Michael B. Kennedy Jr. was wondering what was taking so long to get a computer rendering completed at KAI Design & Build. He stopped by the desk of the guy who was working on the project and asked what the delay was.
“He said, ‘I’ve been working on this for 25 hours over the past month,” says Kennedy, the 97-employee firm’s president. “If I had this software, I could have been done in five hours.’ A quick ROI in my mind and I said, ‘How much is the software that you need?’ and he said, ‘It’s $1,000, and they said they didn’t have it in the plan.’ You’re a $100-an-hour person and you just said you’re spending 25 hours. That’s $2,000.”
The situation drove home Kennedy’s strong belief in staying in touch with his people to collaboratively come up with the best way to manage a business.
“You really have to get out there and talk to your people,” Kennedy says. “Ask them, ‘Do you have what you need to do your job?’ It’s going to make your business more profitable and your people happier. There’s no way as president I can know what that person is doing in their cubicle to make their job more efficient. Unless you go around and talk to them and implement their ideas, you’ll never know.”
When Kennedy stepped in as president at the design and build firm in June 2008, he assumed the leadership role that his father had held since founding the firm 30 years earlier. He felt he had to prove himself worthy of being the leader.
“My position was to build that trust first,” Kennedy says. “I heard everybody out and asked them if they all had the tools to do their job. I do that with everybody from a lower staff member to an executive. Do you have the tools to do your job? Is there a way you can more efficiently do your job and how can I help you? Instead of a dictatorship, it’s an entitlement. I wanted people to feel like I had an open ear and they could trust me. Then I had to perform.”
That, of course, is the key. Anyone can go out and ask for feedback. It’s what you do with it that makes the difference.
“The difference is when you write it in a plan and put it on a shelf versus coming up with your missions, goals and strategies,” Kennedy says. “Those are the three boxes of a business plan. You’ve got your mission, you’ve got your goals and you’ve got your strategies. Then it sits on the shelf. How do you drive that down to the lowest level of your company? That’s where you need to write the initiatives to implement your strategies. Then you need measurable objectives that you measure yourself on yearly, monthly and weekly in your reports.”
Again, it’s the next step that is key. You need to have those conversations with people to see what they need in order to help you achieve your goals. When everyone is involved, you don’t have the disagreement over the need for software that Kennedy had to deal with. Everybody is on the same page.
“The last thing that is the most difficult thing once you get your initiatives and objectives in is getting the individual objectives at every level,” Kennedy says. “How does the receptionist and the assistant, what are their individual objectives to help us on the overall objective? It’s getting all those driven down.
“Everybody at every level has to understand, ‘Well, how do I contribute to that? How am I measured against that?’” Kennedy says. “We started rewriting those objectives and metrics into their yearly evaluation so they know what’s expected of them and how they contribute to this business plan.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Michael B. Kennedy Jr. makes sure everyone at KAI Design & Build has a copy of the company’s business plans when those plans are presented. But it doesn’t end at that meeting.
“Each manager, through people’s evaluations, would talk to them individually on how they fit into that role and what we needed them to do,” says Kennedy, president at the 97-employee firm. “Then with the formation of committees, you put the vision out there and have committees in place that meet quarterly or monthly so they can have the buy-in of the plan and take ownership of it. You don’t want to just drive it down their throat. You want input and you want them to take some ownership of it. You explain the theory and concepts and why it makes sense and then you have them buy into it and own it.”
If you find that people that tend to be waiting on you to move forward with plans you thought you had communicated, you clearly didn’t make them feel like they actually owned their role.
“Or they don’t feel like they can make a mistake,” Kennedy says. “Depending on your business, maybe you don’t want them to be allowed to make a mistake. Or you need to define what level they can make decisions without asking you.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Jeffrey S. Davis and his team at Perficient Inc. were not ready for the bursting of the dot-com bubble back in 2001. Despite the warning signs, tough decisions were put off and fingers were crossed that the seemingly inevitable recession wouldn’t turn out as bad as everyone feared.
“We waited too long to really respond to it,” says Davis, who was COO at the IT consulting firm at the time. “We knew what we were going to have to do in terms of layoffs was going to be very unpleasant. So we had a lot of noise among the executives and senior managers in the company. Some people were saying, ‘That’s disaster. If we lay off anybody at all, everybody else will quit, and we won’t have a business left.’ Or people said, ‘That’s not what I’m here for. I refuse to lay anybody off.’”
Davis and his team were in denial.
“People didn’t want to believe it after things had gone so well, especially for the prior couple of years,” Davis says. “From 1999 to 2001, it had just been a phenomenal year for the tech industry. It was hard for people to accept that it was over and over really rather quickly. Denial is exactly the right word.”
Perficient took a pretty big hit like a lot of businesses, but eventually did what it had to do in order to survive and the lessons that Davis learned through that difficult time stuck with him. And those enduring lessons proved to be crucial when the economy began to plummet again in late 2007.
“It was amazing to me the kind of repeat that we had,” says Davis, currently the president and CEO at the 1,015-employee company. “We had the same type of people, salespeople, saying, ‘Oh, we just have to sell our way out of this.’ All the same things were playing over again.”
Fortunately for Perficient, which took in $215 million in 2010 revenue, Davis and his colleagues on the senior management team knew they couldn’t afford to wait around and hope for the best.
“We were able to tune that out and move the business along with what we needed to do,” Davis says.
Make a list
The first thing Davis did this time around, and the first thing you should do when you sense that trouble is ahead, is make a list.
“I would start making a list of every area where I can cut costs as quickly as I can,” Davis says. “It is fairly complicated, especially when you’re talking about taking people out of the business. Any kind of resource you have in the business, theoretically, you needed. Otherwise you shouldn’t have had it. And that happens too. When find yourself in these situations, you start to realize, ‘Gosh, why were we doing that anyway?’ So you start making that list with, ‘Here are the things we can impact immediately.’”
Davis suggests making your list in three tiers to account for the range of severity you might be about to experience.
“Here’s the not-so-bad recession list,” Davis says. “Here’s the pretty bad recession list, and here’s the Armageddon list. We were prepared in phases to go through each of those if we had to.”
This list can’t be something that you do yourself while locked alone in your office. You need to get your colleagues on the management team and your department heads involved from the beginning.
“I wanted to make sure people bought into it and as unpleasant as it is, this is where we are and this is what we have to do,” Davis says. “While none of us liked it, we all agree it’s the right thing for the company and ultimately, it’s the right thing for those folks who are left behind. So it was definitely a collaborative effort and not a mandate.”
Davis had each manager and department leader come up with percentages of cost reductions and dollar figures. It’s not your job to identify specific individuals to let go. Let your people who work with them on a regular basis and know their strengths and weaknesses make those decisions.
“They are closer to it than I am,” Davis says. “I hope they have the right answers because it’s going to be difficult for me to come up with given that I’m a couple steps removed. You’ve got to rely on your folks, hold them accountable but also rely on them to make the right decision.”
You can acknowledge that these are decisions that no one likes to make without falling into tired clichés.
“Just be upfront and honest,” Davis says. “This sucks, but here’s where we’re at. I’m not going to candy coat it for you. Here’s what we have to do. For the people I mentioned and I would even extend it to your 17 general managers, our executive team is about 21 people, I would treat everybody on the team like that. They wouldn’t be in those positions if I felt like a conversation like that was going to be send them into a tailspin.”
You can also offer your hope that the worst doesn’t happen and that the draconian cuts you’re talking about won’t have to be made. But if you don’t plan for the worst and the worst happens, your stress is going to be a whole lot worse. So you need to maintain a sense of urgency.
“I never had anybody that was that much of a holdout,” Davis says. “But if I did, I would say, ‘If you’re not going to do it, I’ll do it for you.’ Usually when you offer something like that, they tend to take it more seriously. Because the last thing they want is for you to be making the decisions for them.”
Help people grow
Unfortunately for Davis, he did have instances where people came back to him and hadn’t come up with enough to cut out of their part of the budget. The claim was that there were too many things they couldn’t afford to live without.
“It’s a process of education and less of a negotiation,” Davis says. “It’s not really a negotiation when we know who the winner is going to be and that’s me.”
If your people have a hard time even drawing up a list of possible cuts, try being a mentor to them rather than a tyrant.
“With those people, it’s more of a process of, ‘Let me walk through it with you.’ Make it more of a mentoring exercise. ‘Let’s go through it together. Here’s why this function is no longer going to be necessary or here’s why you’re not going to need this many of that particular title or function in the scenario we’re talking about.’”
You can also encourage people to look beyond just getting rid of employees to reduce costs.
“Those are some of the things that don’t immediately strike the person serving in the trenches wrestling with this,” Davis says. “To your point, maybe they are hung up on the people side of it. And they aren’t even thinking about the fact that, ‘Hey, we’ve got that extra conference area over here that some other tenant has been wanting for two years. Let’s get rid of it.’”
Whether it’s offering alternatives or just encouragement, you need to remove the fear your leaders may have about making important decisions. Show that you trust them to make big decisions in the best interest of the business.
“You’ve chosen this person for this job,” Davis says. “They are either your person or they are not. If they’re not, you should do them a favor and get rid of them. If they are, you should support them. People are motivated knowing they have a boss who believes in them. I can’t think of a better way to be motivated myself than knowing my board has confidence and believes in me and believes in where I’m taking the company.”
If people do make mistakes in the cutback process, try to remember that you’ve made plenty of mistakes yourself.
“At this level, if you’re still trying to manage people, there’s something wrong,” Davis says. “You’re not doing your job correctly or you’ve got the wrong people. But your business is not going to grow. You’re not going to reach your potential either if you’re still trying to do everybody else’s job for them.”
You’re not going to have a team of leaders that feels like it’s marching forward together if you become a micromanager. You need to buy in to them and they need to buy in to you and you need to trust each other.
“If you’ve got that buy-in, they’re going to work really hard,” Davis says. “They really believe in their heart of hearts this is what needs to happen not just because you told them so, but because they understand that it really does need to happen. They’re going to work very hard to make it happen.”
Davis has been two through major recessions at Perficient and he has seen the cultural damage they can cause. So when cuts need to be made, he suggests you try to get it right the first time.
“Honestly, as cold as it sounds, the right thing to do for the business is to go down as deep as you can,” Davis says. “If that’s more than necessary, that’s unfortunate. But that’s better than having to make four cuts. That continual cut, cut, cut just kills morale. In the service business, those are your assets. That’s what you care about and that just kills it.”
Once the announcements have been made and those who are being let go have been notified, you need to move quickly to refocus everyone’s energy. Show people that this isn’t the first step toward going out of business.
“Try to give some concrete evidence that you’re taking action,” Davis says. “When the chips are down and they’re kind of down anyway, they want to know that you’re doing something. You’re not just sitting around waiting for the economy to get better.”
Davis took advantage of a declining market and made some investments that the company might not otherwise have made.
“We’re trying to gain share, so frankly, we did some experiments,” Davis says. “It allowed us to try some things that we might have been a little more reticent to try if we weren’t working so hard to turn things around.
“We invested and built organically a health care business unit that is focused on that industry. Before we did that, it was already part of our business, but in 2008, it was probably about 15 percent of our revenue. It’s 25 percent today. From 2009 to 2010, we added $12 million in revenue in the health care industry.”
You can’t promise people that you’ll never have to make cuts again. But you need to reassure them that the company is moving ahead.
“Let’s all get back to work,” Davis says. “It’s unfortunate, and we’ll miss our colleagues, but we’ve still got a job to do. For your own sake and the benefit of your family and yourself, we need to keep slugging it out every day. Let’s move on and keep moving it forward. That’s the speech I would give.”
Davis says it’s the need to work with his people and help them continue to grow that helped him weather the storm at Perficient a little bit better the second time around.
“I’m pleased to say we never got more than even halfway through the second list of cuts and never even had to get to third list,” Davis says of the three cutback scenarios that were considered.
He added that he continues to grow as a leader and learn the value of empowering others.
“I’m a better motivator of people that I was 10 years ago and I hope I get better every day,” Davis says. “That’s the most important thing as a leader is motivating. It’s making sure you have the right people around you, of course, but motivating them and not managing them.”
How to reach: Perficient Inc., (314) 529-3600 or www.perficient.com
The Davis File
Jeffrey S. Davis
President and CEO
Born: Tulsa, Okla.
Education: Bachelor’s of science in electrical engineering, University of Missouri-Columbia; MBA, Washington University in St. Louis
What was your first job?
I ran a newspaper route when I was 10 for the St. Louis Post-Dispatch. I collected my pay, and I got a checking account and for 1975, I was making pretty good money for a 10-year-old kid.
Who has been the biggest influence on you and why?
My dad, James. There are a number of things [he taught me], and they are all an offshoot of the same thing. He had an incredibly high level of integrity.
What’s the best advice you ever received?
My mother used to always say, ‘Your sins will find you out.’ I think the best thing I ever learned in my life that I’ve tried to always apply is to do the right thing. I was like any other kid. I was probably about 15 when I finally figured out I can’t lie my way out of trouble. Some kids probably learn younger than that, but I was 15. That was a life lesson that stuck with me.
Who would you like to meet, and what would you want to ask that person?
President Ronald Reagan. How did he manage to muster up as much charisma as he did in the face of a bunch of crappy stuff and a bunch of naysayers? How did he always manage to hold his head up and do the right thing and convey that in an amazingly charismatic way? He connected with people at all levels and from all walks of life in this country. He did a better job of that than any president in my lifetime.
Because Ryan Kugler sought new outlets online, Distribution Video & Audio Inc. stayed cutting edge during the recession. He didn’t know the Internet would also boost his customer service.
DVA, which purchases CD and DVD inventory excess from studios and labels to resell, moved online by selling to other Internet resellers. By finding new ways to expand and attend to his customer base, Kugler — president and co-owner with brother Brad, CEO — has grown DVA to 35 employees, selling 20 million units per year to 350 accounts with 24,000 storefronts, which totaled $24 million in business last year.
Kugler spoke with Smart Business about finding and keeping customers online.
How has technology changed your business?
It has changed the way that we do business because when you’re dealing on the Internet, you’re dealing with people who are not multimillion-dollar companies like Target or Big Lots. You’re dealing with a whole different species of an animal — someone who might complain more, to be honest with you. You need to have a little bit more customer service when you’re dealing with Internet resellers.
No. 1 rule [of customer service is] get back to every single person that reaches out to us … within 24 hours. Even if we don’t have an answer to their question, say, ‘We are researching it. We will get you the answer, give us a minute.’
On Amazon, if you don’t get back to (customers) you get a bad rating. Technology has helped us (stay in touch) because we want to keep a good rating with Amazon; otherwise, you’re kicked off.
How do you handle your marketing?
The biggest challenge … is finding new customers. We are always marketing. We buy mailing lists. We send out letters. We send out postcards. We send out e-mails. We place ads in trade magazines.
If you cut your marketing, you’re not going to get new customers. Now, you can cut marketing as far as keep marketing to the same amount of people at a lower price. Instead of sending out a letter with an envelope — which, with a first-class stamp, might cost you 60 cents — you can go to a postcard, which will cost you 32 cents. You’re still mailing to the customer, and that’s the whole point. Never cut the outflow.
My advice is: Do not cut marketing. Find another area to cut. Cut your water usage. Cut your coffee usage. You need new customers because that’s what’s going to sustain you during a rough economic period. There’s little things you can cut (instead of) marketing.
Is the customer always right?
It doesn’t matter if it’s true. If the customer says this, we just try to work it with that. We want to close the sale. If doesn’t work financially or if it’s going to put us out of business, then we just say, ‘Sorry, can’t do it.’
We will do anything the customer wants as long as it’s legal. If a customer wants a banana taped to each DVD, I’ll say, ‘Sure, we can do it, but here’s the price.’ I’ll apply to the Food and Drug Administration to attach something perishable to a DVD. It’s just going to cost the customer money, and we always tell them that. That’s why I’m still here doing business, because we’ll do whatever the customer wants.
Is there a pitfall to that approach?
My board will complain, saying, ‘Hey, the margin was low on that deal.’ But then I’ll say, ‘What goes around comes around,’ meaning I might have sold something at a low margin, but that customer’s going to order from me again because I did what they wanted.
That’s the whole key. The more attention you put on (customers) and the more you do what they want, the more likely you’re going to get the business again.
HOW TO REACH: Distribution Video & Audio Inc., (818) 848-6111 or www.dva.com
Those Gen Y connections have come in handy at Ernst & Young LLP, where about half of the 1,100 employees in the Los Angeles operation are under the age of 30.
“You just have to really communicate with ways that are important to them,” says Browning, the Los Angeles County office managing partner. “We’ve got to keep in mind that this is a different generation than, obviously, what I grew up with. The way they communicate is different.”
Regardless of which generation he’s communicating with or how, Browning strives to make meaningful connections with employees so his message will resonate. That’s key for getting everyone on board with his “growth mandate” — which includes growing their people, growing their community, growing their alumni network of former employees and growing their clients.
Browning focuses on building relationships and staying in touch so communication is a constant part of the environment at the firm, which has grown its worldwide presence to 141,000 people and $21.3 billion in fiscal 2010 revenue.
“(Communication) happens in a number of ways,” Browning says. “But the hallmark of seeking that feedback is setting a very open tone for our people, making sure that they know their opinions are incredibly important to us and that we have an open-door policy. And then once we get the feedback, to try to do our very best to react to it and to constantly do whatever we can to make L.A. County with Ernst & Young a great place to work.”
Browning knows the most elaborately constructed messages fall flat if they’re isolated attempts to reach employees. It takes a very involved effort to communicate constantly with employees before you can expect a message to gain footing.
“You have to be visible. You have to be accessible,” he says. “I spend a lot of time doing that by one-on-one reaching out to our people.”
One of the ways he stays in touch is through an ongoing series of breakfast meetings called Straight Talk with Bill.
“First of all, it’s purely voluntary,” he says. “Whoever wants to come can come. It’s an open invitation to our people to meet with me periodically, and it’s absolutely an open agenda. No planned topics — it’s whatever is on their mind.”
He welcomes employees by experience level. Last month, for example, he conducted separate meetings for senior managers, managers, seniors and staff.
Typically, he starts with an update on what’s happening locally in the firm. Then he’ll pull from his international travels to offer observations of market conditions in London, the Middle East or Hong Kong. At this stage, he’s not necessarily delivering a corporate message but simply sharing his thoughts and opinions — which encourages employees to share theirs.
With unique audiences at each gathering, the discussions will vary, because you’ll share different thoughts with different groups.
“I tailor my comments based on the experience level of the people,” Browning says. “I’ll go into more detail with the staff on, for example, how the firm is organized. I might go into more detail with them about our different service lines, whereas [with] the senior managers, I don’t need to do that.”
Browning usually only takes the stage for a few minutes before turning it over to employees. But to be able to get their questions, suggestions and other feedback, he must be able to relate. That’s where it helps him to think about his teenage kids and the differences in communication styles.
“What (employees) are interested in is different, and we need to keep that in mind,” he says. “I’m always asking them what is important in their life, both personally and professionally. What kind of experiences do they seek with the firm and then are getting with the firm? Are they getting the best type of support they need from the firm to succeed?”
The feedback won’t always relate directly to a business initiative, but that doesn’t mean it’s any less relevant. At the most recent breakfast, for example, someone asked about the firm’s recycling policies. That spurred some green suggestions to enhance the company’s efforts.
“That’s the kind of thing that comes up that really doesn’t relate, per se, to our business, but it is very important to our people,” Browning says.
By simply asking employees what’s on their minds — rather than commandeering the stage with your agenda — you show them you’re interested in hearing what they have to say.
Open forums like Straight Talk are great because they put the ball in the employees’ court. But because they’re purely voluntary, you may skip over shy employees who don’t step out with their feedback. You need other avenues.
“One way that we make sure that our people are heard is through the mentoring relationships,” Browning says. “The mentor is trying to make sure they always are seeking feedback from our people and reacting on it to make sure each person’s goals are met.”
Mentoring programs also tackle another communication obstacle: the fact that the CEO can’t be the sole connector and develop personal relationships with all employees, especially in large organizations.
“It’s not just about me; it’s about all of us being visible to our people,” says Browning, who has six mentees. “I try to be accessible to all thousand of our people, but it’s really about all of our leadership team doing that and forming those key connections with our people daily.”
Browning tries to make sure no one is overlooked by approaching mentoring from several angles. First, the firm formally assigns mentors by matching up employees in similar work areas. They may be paired with members of the senior leadership team or, as of March 2010, with alumni — former E&Y partners and employees who can add value from outside business settings — as well.
But there are also pre-existing personal relationships between employees, where mentors may seek certain mentees or vice versa. These informal matchups will happen with or without a formal program.
“There are a lot of informal mentoring relationships that happen and those, quite frankly, are often the most effective,” Browning says.
Because relationships form and develop differently, it takes flexibility and follow-up to make sure they’re equally valuable.
“It’s a constant process of reaching out to both the mentors as well as the mentees, seeking feedback that those connections are being helpful, asking our employees if other connections are needed,” Browning says. “If a match isn’t working, we’ll change.”
Whether the relationships start as formal assignments or informal friendships, ideally they should all trend toward the latter as they develop.
“There is a formal program, but it really gets down to the mentor and the mentee making it happen and staying in touch with each other and tailoring that mentoring relationship so it works for each person in that relationship. If you look at a mentoring relationship, it starts out as first becoming friends and establishing a personal relationship and then really trying to discover what the mentee’s personal and professional objectives and goals are. This is where the personal and professional often intersect because they are intricately entwined.”
A good mentor knows when to probe and when to draw the line. Respect your mentee’s privacy and be sensitive to personal issues, obviously, but personal matters do play a part so don’t overlook them entirely.
“An effective mentoring relationship only comes when you really get to know someone,” Browning says. “The root element of a mentor relationship is a friendship. And when you develop that friendship with the mentee, then that really sets the stage for having an effective relationship.”
The basic questions behind a mentoring relationship center around: “What do you want to accomplish in life? What do you want to accomplish at this company? Where do you want to be in five years?”
“That then breeds a lot of different discussions in terms of job assignments, in terms of training opportunities, in terms of: Do they want to be involved in the community activities we’re doing? Do they want to be involved in marketplace activities?” Browning says. “The overall goal of a mentoring relationship is we want that mentee to be the very best they can be, both professionally and personally. Mentors are trying to make sure the mentee really thinks about what their objectives are professionally and personally, and the mentor is a real advocate to them to try to accomplish those goals.”
Mentors may meet mentees over lunch, a baseball game or during the day in the office to set action steps for meeting goals. The key is that there are constant touch points.
“It only happens through that close day-to-day contact with our people,” Browning says. “You can’t do it from afar. … You (have to) have day-to-day contact with people so you really understand what’s important to them and what they want to focus on.”
Now that you’ve reached out to employees through open forums and mentoring relationships, your messages stand a better chance at gaining traction. But you still need effective communication. You can’t expect people to just listen to you because you’re in charge.
“Effective communication doesn’t necessarily flow from your position or your title,” Browning says. “Leadership comes from the level of impact and influence you have on people. It’s not about my position as the managing partner; it’s really about the amount of influence I have on our people.”
Of course, some of that influence will come from the reputation you build through relationship-building; employees will see you care about their ideas and success when you ask for their input and help them set personal goals. But you build upon that influence by delivering compelling messages with clarity.
“I find that the younger generation prefers concise communication in a mechanism that’s readily accessible to them when they want it,” Browning says. “So therefore I try to be brief. I try to be to the point. … When I try to craft messages, whether they’re by voice mail or by text message or by e-mail, I always try to put myself in the shoes of the recipient and think: What’s in it for them? What do I want them to know? Am I asking them to take action? Am I just communicating information?
“I don’t try to give them corporate speak. If I’m seeking action, I make clear what the actions are that I’m seeking. If I’m communicating information that I think is important to them, I tell them what I think is important to them, and I stress that in very simple terms.”
Beyond that, effective communication depends on how the message is received. Browning sometimes uses Straight Talk meetings to ask how employees perceive his messages.
“Often what I’m asking is, ‘Do they understand the direction that we’re trying to go, do they understand what our growth mandate is here in L.A.,?’ and then really seeking feedback about what are we doing right, what can we improve,” he says.
The communication loop should be constant, whether you’re meeting with mentees regularly or just stopping employees in the hall to chat. Don’t wait to observe results through the actions people end up taking — make sure they’re on board before it’s too late.
“You just have to be as involved as you can with your people and as close as you can to your people to understand: What are they receiving? What are they hearing? What’s motivating them?” Browning says. “It’s just listening, facing feedback, trying to discern what people have heard.”
If you’re taking the time to assess how people understood your message, you should also have the willingness to adjust if their perceptions don’t match your intentions.
“The two main things that I try to tell myself often are: Be adaptable, be flexible,” Browning says. “If something’s not working, if I’m not achieving the desired result that I’m seeking from people or from our organization, I tell myself to focus on what I’m communicating because the problem may be in me, not the person that’s receiving or listening to my communication.”
How to reach: Ernst & Young LLP, (213) 977-3200 or www.ey.com
The Browning File
Born: Dallas. As a small child, I moved to Chicago. I grew up in Chicago, and I consider it to be my boyhood home.
Education: Bachelor’s in business administration from the University of Oklahoma
What was your first job, and what did you learn from it?
I had a variety of jobs as a high school student, but my very first job was working for a pharmacy chain in the Chicago area by the name of Walgreens. I learned, first of all, it’s very hard work. It was great encouragement to continue my education and to get a degree and to really seek a career as opposed to just a job.
What’s the best business advice you’ve ever received?
About 15 years ago, I was going through some difficult situations with a client and another client told me that once your career is over, you can take two things with you and only two things. Those two things are your reputation and your integrity. When I’ve been really challenged, I always come back to the advice that he gave me.
Your workday is off to a bad start. How do you turn it around?
I’m a morning person so my day typically doesn’t get off to a bad start. But if a day isn’t going like I want it to go, I simply get up from my desk, walk around and try to talk to people. I always find just talking to our people or the clients’ personnel typically gets me out of a bad frame of mind because I start really focusing on how I can improve their day — and in doing so, I typically improve my day.
If you could have any superpower, what would it be?
When I look around, I’m always depressed by the amount of suffering that’s going on, the amount of poverty, the amount of homelessness, the amount of abuse. If I could wave a magic wand and have a superpower, I would immediately take away all that suffering.
If you could have dinner with anyone, from any time, who would it be and why?
I see very few people that I can think of in recent memory that had as much impact on so many people as Coach John Wooden did. The legacy he left of living honestly, hard work and striving to be the best you can be was just amazing. I would love to meet him and have dinner with him and just listen to all of his experiences and all of his advice. He was really a remarkable man.
The benefits of giving back
Whether it’s a holiday party, a community volunteering program or a local sporting event, out-of-the-office activities give Bill Browning a chance to interact with his 1,100 employees at a whole other level. Not only does he get to know his Ernst & Young staff and partners more personally, but the experiences also double — or, actually, quadruple — as teaming activities, training opportunities, community involvement and a way of branding the firm locally.
“Community activities are a great way to participate in a team environment,” says Browning, the Los Angeles County office managing partner. “We’re focused on each individual succeeding as an individual, but doing so in a very team environment.”
On Dec. 3, for example, Browning shut down Ernst & Young’s L.A. County offices so his employees – more than 500 of them – could spend the day participating in community activities through an EY Connect Day. Employees volunteered with 18 local organizations from Habitat for Humanity to the Los Angeles Zoo to Heal the Bay, a beach cleanup organization. All in all, employees donated about 2,600 volunteer hours that day.
Across Ernst & Young’s west region last fall, nearly 1,700 employees participated in EY Connect Days, totaling about 6,700 volunteer hours.
Most companies sport a similarly impressive list of philanthropic efforts, but for community service to reap the benefits it does at Ernst & Young, put some thought into what you’re doing and why.
Browning’s two-fold goals for community activities are pretty basic – that they make a difference at the organization he works with and that they make a difference with the Ernst & Young employees who are involved. As a third goal — which is really more of natural byproduct than a result to drive toward — Browning wants the overall company to benefit from community commitment.
To keep community service aligned with that end goal, Browning organizes activities according to the three E’s.
“The first E is education,” he says. “So we focus on activities where we really can educate and mentor people in the community. The second E is environment; we focus a lot on community activities and organizations that are focused on environmental sustainability. And the third is entrepreneurship, supporting organizations that that build entrepreneurship in our community, and a lot of that is done by encouraging young people to get involved in business.”
By devoting office hours to the community, Browning keeps the organization focused on one of its four core goals — community — and demonstrates that what you do at work ties into the broader community even if you’re not strictly volunteering your accounting skills.
“By being involved in those organizations, we will really build a sense of involvement and we will build skills in our people,” he says. “And then through their efforts, my hope is that Ernst &Young will achieve a brand in the marketplace that we really are giving to the community. It’s just a result, but that’s not the focus. The focus is really on the city and the community and for the people that will benefit because of our involvement. If Ernst & Young achieves some branding and some goodwill because of it, so be it, but that’s just a natural result.”
How to reach: Ernst & Young LLP, (213) 977-3200 or www.ey.com
There are real people out there with many of the same needs, desires, problems and issues that you have. They have a job to do. They have demands and expectations that need to be met and a boss that at times can expect the impossible. Just like you, they want to be recognized and respected by their peers, supervisors and suppliers for doing a good job and also be rewarded by the company. And, just like you, they have a life outside of work, including family and friends. Sometimes the stress of life impacts their behavior at work, and sometimes the stress of work impacts their life at home.
Customers are human, and like the rest of us, they are sometimes demanding, unreasonable, inconsiderate jerks. In my experience, most people do not want to act in a negative way, and when they do, it is usually because they have some problem or some need that is causing them pain. For most of us, pain is a call to action. We will do whatever we need to do to make the pain go away.
Your customer has specific goals, objectives, measurements and key success factors that will determine their success, raises and bonuses. At the same time, your customer has problems that impact their ability to meet those objectives. Remember this: Your customers’ every action and every request is motivated by some need or some pain. Do you know what it is? It may not be what you think. If you can discover your customers’ real needs and pain and help them to satisfy them, you have the key to a successful relationship.
Our job is to help our customers achieve their goals, eliminate their pain and satisfy their needs while bringing benefit to our companies.
If we are going to be appreciated by our customer, we need to understand what it is that they value. We need to understand their goals, objectives, measurements, key success factors and problems. Every customer is different; they each have different strengths and weaknesses. They each have different definitions of what success means to them. Our challenge and opportunity is to identify what it is that our customer really wants, both as an organization and as individuals, then modify the way that we act and perform so that we deliver the correct results.
Their success depends in large part on you and your performance. Without you, they are unable to do their job. Consider these questions:
What are the biggest problems and challenges that you and your company are facing?
What kind of impact are those problems having on you and the company?
What do you think are the reasons why those problems exist?
What would have to be different for that problem to be eliminated?
How can we help you solve your problems?
During the course of this month, take the time to find out more about your customer. Find out about their company, department and family. Try to learn about their goals for the year. How is their performance measured and in what areas do they need to improve? Write it down. Communicate what you learn with your team. Then take the time to try to figure out how you can help your customer eliminate their pain, achieve their needs and realize their goals. When you can do that, you have earned the right to be viewed as a trusted ally, someone who can be counted on to help. That is really bringing value.
Scott Morey is president of Morey Corp. During his 36-year tenure, the company has experienced marked growth and an expansion of service and product offerings. Morey has played a key role in developing and implementing the company’s best-in-class program management and quality systems. He serves on the board of directors for Morey Corp. and 10G (a joint venture with Caterpillar). He is also a member The Young Presidents’ Organization.
Rob Meck likes to push people to see how they respond. When he arrived at Premiere Credit of North America LLC, that’s exactly what he set out to do.
“I came on board in July 2009 and was cast with the challenge of transitioning a mature, but small entrepreneurial accounts receivable management firm into a leading national accounts receivable management firm with the ability to grow both immediately and rapidly,” Meck says.
He began meeting with company leaders to gauge who could work well under the pressure of pursuing growth.
“Too many managers, especially during the turmoil we were going through, and it’s such a huge transition, automatically retreated and didn’t want to take a lot of risk,” says Meck, the 400-employee company’s president and CEO.
He wanted people who could step out of their comfort zone and grow with the business. So he engaged them in strategic projects that contained a certain element of risk and working side by side and made an assessment of their abilities.
“I try to be a mentor with all of them and one of the things I do with them is try to roll up my sleeves with them and work on projects,” Meck says. “I really had to pick who the keepers were, and we had a lot of people we wanted to maintain. We put those people in specific areas that we really wanted to build on, strong people that had loyalty to the company and adherence to our values. We also recognized there were a lot of people who weren’t going to stay.”
Testing people doesn’t have to be throwing them in the deep end to see if they can swim. Work with them closely to discover their talents and abilities. Make it clear that mistakes are OK, as long they are made in the pursuit of progress.
“Reaffirm with them that the failure of you trying something and taking that risk isn’t career ending,” Meck says. “You can learn from that mistake. You’re not going to get punished for trying something that was an educated risk. … In a competitive world, if you don’t take some risk, you’re never going to be the top-ranked performer in your industry.”
The fear of taking risks is what holds back many entrepreneurial businesses.
“A lot of them struggle with the fact that building the infrastructure is a fairly significant expense of non-revenue generating, nonprofit making individuals,” Meck says. “If you’re going to invest into it and do it right, it costs money and it could affect earnings.”
Meck was willing to take some of those risks and he found other leaders who also thrived under pressure. But there were some who didn’t fit his mold and that led to his move to bring more than 30 new managers from 20 competing companies to Premiere Credit.
“Bad turnover is when you lose one of your top performing, most compliant, loyal and dedicated employees,” Meck says. “Good turnover is when you lose some of your lower performing people who don’t buy into your values. We knew that if we did not adhere tightly to our core values and have everyone buy into them, the company would not be as strong as it could be.”
The ability to make those tough decisions and take a few chances along the way is often the difference between a company that grows and one that plateaus.
“A lot of entrepreneurs really have loyalty to the people who made them successful,” Meck says. “It’s hard to keep them on the payroll and hire someone else who has that higher skill set and still maintain your financial business model.”
Meck is confident the steps taken thus far have Premiere on a path to growth.
“Our performance on every one of our clients has improved dramatically in the last year with people buying in to our new cultural values,” Meck says.
Catch your breath
Rob Meck moved quickly to make changes at Premiere Credit of North America LLC. So quickly, in fact, that he had to institute daily wrap-up meetings to keep track of it all.
“I was afraid we were losing track of all that we were doing,” says Meck, president and CEO at the 400-employee accounts receivable management firm. “So I set up executive debriefs at 5:30 every night for the top four executives for what was hopefully 15 or 30 minutes max. It was just a brain dump of everything that happened today.”
Maybe you don’t need a meeting every day. But Meck says it’s crucial that you make sure everybody is running forward at the same pace.
“As fast as we were moving, within a day, we could have had two executives taking different projects that were in opposition to each other,” Meck says. “It also served as a team-building exercise. It was a great way to end the day so that we all knew we were on each other’s team.”
Even though the pace has slowed a bit, the meetings continue.
“It helps communication,” Meck says. “It’s such an important part of the communication every day with our senior management team.”
HOW TO REACH: Premiere Credit of North America LLC, (888) 403-1637 or www.premierecredit.com
Bob Grote knew what the next morning was going to bring and it was eating him up inside. The recession had taken a toll on business at J.E. Grote Co. Inc. and now he had no choice but to lay off employees.
Or so he thought.
“I went into a restaurant, a little watering hole where I sometimes have a bite to eat,” says Grote, president at the 170-employee food slicing equipment manufacturer. “A guy I kind of half know came up to me and said, ‘Man, you look depressed.’ I said, ‘Yeah, I am. I think I’m going to have to lay some people off.’ He poked me in the chest and said, ‘Come on Bob, you can do better than that. You don’t have to do what everybody else does. Be creative.’”
Grote began to ponder what this casual acquaintance had just said to him and the wheels began to turn in his head.
“A good portion of our staff, be it engineering or in the shop itself, is really dedicated to the manufacturing of new equipment,” Grote says. “So when your equipment dries up, you have nothing for a lot of people to do. I came in and said, ‘What if I force vacation and go down to a four-day workweek for everybody in new equipment?’ You’re going to take vacation in the first half of the year until you run out of vacation. It doesn’t help my cash flow, but it reallocates my resources to later in the year.”
The response from his management team was shock.
“They all kind of looked at me like, ‘What?’” Grote says. “I got challenged by them saying, ‘Are we just wimping out? Are we just afraid to make the right decision because we’re fortunate to have the cash flow to support doing this? Are we just delaying the inevitable?’”
Grote had pondered those same questions. He decided it was worth the risk to try something a little different.
“Leaders truly underestimate the cost of retraining,” Grote says. “In an environment of unemployment, you can hire really quick and you can hire really good people. But at least in my business, because this is very customized work, it’s hard for a guy to contribute in some of these areas for a minimum of six months, sometimes up to a year. As I look at it, I’ve got to hang on to that core muscle.”
One of the land mines Grote had to navigate around was, “How do you do something that only inflicts pain on one segment of your work force?”
“I went to the departments that were going to be affected and spent a lot of time talking to them and trying to get them to complain and be OK with complaining to me,” Grote says. “I was constantly focusing on the future and reminding them that this is what it is. What’s paying our bills right now, guys, is all these parts and all this stuff that these other guys are doing. You want us to pay our bills so we can keep you around, too.”
Grote also spent time with those who weren’t being forced into February vacations.
“I reminded people that you better look busy,” Grote says. “I know you’re busy, but you better look that way.”
So the vacations were taken, and while there were a few nervous moments, business did begin to pick up in the summer, and Grote’s plan ended up working out.
“There was fear every day,” Grote says. “I ultimately have to answer to the shareholders of the company. I look foolish and wasteful if it doesn’t work out. But if you’re truly a leader at that point and you’re in that position to make that decision, if you think about what’s going to happen to you at that point, maybe you shouldn’t be the leader.”
Take time to listen
Bob Grote could have shoved his idea to avoid layoffs at J.E. Grote Co. Inc. down everyone’s throat and ignored the concerns of his management team. But he knew that wouldn’t do much for his stock as their leader.
“If you have a past experience of going back and changing your mind because they have a logical reason why you shouldn’t do your idea and you’re not just being stubborn, they will talk to you and explain their reasoning,” says Grote, president at the food slicing equipment manufacturer.
He wanted to hear their feedback because he himself had fear that maybe it wasn’t the right thing to do.
“I’ll either say, ‘Maybe you’re right, let’s go back and explore this,’ or, ‘I still think I want to do it this way, and I’m going to do it, but I see where you’re coming from,’” Grote says.
Either way, you show yourself to be open-minded when you make the effort to listen.
Unfortunately for Grote, he faced the same dilemma again in early 2010.
“My mantra was, ‘If this keeps up, I can’t do that again guys,’” Grote says. “Fortunately, it turned a lot quicker.”
Grote adds that his confidence in foreseeing the future in today’s world is pretty much gone.
“I don’t believe anything until I’ve got the contract with dripping ink on it and the smell of money in my office before I believe an order is here,” Grote says.
HOW TO REACH: J.E. Grote Co. Inc., (888) 534-7683 or www.grotecompany.com
Michael Glimcher had a lot to worry about in March 2009. The stock price for shares in Glimcher Realty Trust (NYSE: GRT) was hovering right around $1. The company had a massive pile of debt, and confidence in the real estate industry was slipping with every new foreclosure.
“We’re a capital-intensive business,” says Glimcher, the 552-employee company’s chairman and CEO. “When the banks were shut down and they didn’t want to lend money out and they just wanted to be paid back, it put us in the most precarious position that we’ve ever been in as a company in our 50-year history.”
Glimcher really needed to raise some cash and get rid of this debt that was strangling his business. But where was he going to find the money to get it done?
“How are you going to come up with $200 million?” Glimcher says.
This money wasn’t going to come from patrons at the malls and shopping centers that Glimcher managed. The economy had hit them hard, too. So he told his people not to spend time worrying about things over which they had no control.
“I basically told everyone here at the company, ‘If you want to pontificate about what’s going to happen to the overall economy and what’s going on in the outside world, you can do that all you want when you’re at home,’” Glimcher says. “But during the workday, if we can’t affect it, we’re not talking about it. It’s not an option.’
“We can control what our operating expenses are. We can control the morale within our organization. We can control how safe and clean our malls are and make sure they are great environments that people want to shop in. So there are a lot of things we can control.”
Glimcher felt that setting aside these uncontrollable factors would allow his team to get laser-focused on what could be done to get the $308 million company turned around.
Get people engaged
Glimcher needed $200 million. So the first thing he did was go to his people. He wasn’t looking for handouts to pay down the debt. Rather, Glimcher sought to assure employees that he was going to find a way to raise the money and pay off the massive debt.
“I made it real clear to everyone, ‘We’re going to win here,” Glimcher says. “‘We’re going to get through the issues we have to get through. Everyone who believes that we can get through it should be here. If there’s anyone who doesn’t believe we can get through these issues, you shouldn’t be here.’”
Glimcher wanted to express both confidence and resolve in his ability to turn the company around. But he was blunt about the steps it might take to accomplish this feat.
“Rather than giving people part of the story or half the story, we said, ‘Here’s exactly what’s going on,” Glimcher says. “‘We might be selling your mall.’ Frankly, we needed the help of the team to market the asset so we could get people excited about it. We had different potential investors coming through.”
So how do you get employees engaged in a battle to save a business when they may not even be part of that business when all the dust settles?
You get them doing whatever they can to make that move of last resort unnecessary. You get them focusing on the things in their world that they can control.
“The message is, if you do your job and if you do what you’re responsible for and you do it really well, it’s going to be a lot easier for us,” Glimcher says. “You need to instill confidence in the team.”
That begins with getting out of your office and becoming more visible with your employees. The more you hide, the more you raise suspicions.
“People are uncomfortable and nervous,” Glimcher says. “People want to be assured of what’s going on. I’d tell our company officers, ‘Get out of your office. Walk around. Meet with your department. Sit down and have a cup of coffee. Tell people what’s going on.’”
As you encourage your leaders to be more visible and more available, you should be working on getting the message out about the big picture.
“We called a state-of-the-company meeting and I outlined every issue we were dealing with and what we had to do to be a healthier company,” Glimcher says. “‘Here are the three or four most critical issues we have to correct. Here are the things we absolutely have to do, and when we do X, Y and Z, we’ll be in a much better place.’”
You’re not making promises that anyone’s job is untouchable. But you are engaging your employees in the effort to get things fixed and you’re showing them that you and your team is working right along side them in order to make things right.
“If you treat people nicely and you genuinely care about them and you’re incredibly honest with them about what’s going on, I think people really appreciate that,” Glimcher says.
Keep an open mind
If you’re truly seeking feedback from your employees that can help you work through a difficult time, you need to show them that their opinion has influence. So when someone brings Glimcher an idea, he tosses it right back in their lap.
“I try to never guide the decisions,” Glimcher says. “If someone presents something to me and they ask me, ‘Do you want to do A, B or C?’ I don’t answer them. I ask them, ‘What would you do? Why would you do it? Why would you recommend doing that?’ It’s empowering them to make the decision and make the recommendation. Guess what? I don’t always agree with it. But I want to know what someone thinks we should do.”
Glimcher recalls an asset financing deal where he did not see things the same way as his chief financial officer and his chief investment officer.
“I had made up my mind of what I wanted to do,” Glimcher says. “Our CFO and chief investment officer, they had a very different idea. And they were right and I deferred to them. I didn’t go in there and tell them, ‘Here is what we’re going to do.’ I actually went around the table and I got everyone else’s input and then I told them, ‘That’s not what I was planning on doing, but I think what you’re recommending makes sense and I think the reasons you’ve given me make sense, so I’m going to support it.’”
Glimcher had an opinion about how to pay down his company’s debt. But he respected the expertise of his leadership team to help him reach the best decisions to accomplish that goal.
“You have to rely on your people to play their position well,” Glimcher says. “Ultimately, I’m going to set the game plan, but I’m also going to set it with a lot of people’s input. There are some times where we come down to decision making and I feel very strongly. I believe this the right thing for the company and going in a different direction would be detrimental. I’ll override whoever I have to override.
“That’s how it goes. In the example I cited, I thought we would have been better off, but we’re not going to be hurt in any way by going in that direction. I’m not going to hurt the company just to make somebody happy. If everybody has input and we make a good quality decision, even if it’s not my decision, I’ll support it.”
One of the ways to help you judge if your people are making a smart decision, aside from gathering more feedback, is to make sure you know their history.
“Is this an area where they are really strong?” Glimcher says. “Is this an area where they are OK? Or is there an area where they are weak? If someone is passionate about something and you’ve seen through experience that that area is a weakness for them, you probably don’t listen to them as much. If it’s a strong area for them and they’re passionate about it, you probably better listen a little bit better.”
Glimcher knew it was going to take more than a good attitude and some elbow grease to erase his company’s debt. But as he pondered the big decisions that would have the most impact, he still wanted to show employees that their effort mattered.
So he began looking at the incentive program that was in place to help properties keep their tenants.
“We had an incentive program in place where if you renewed someone, say The Gap was in your mall and you got them to stay, you got a one-time commission,” Glimcher says. “If they were already there, the idea was it’s not that hard to renew someone. If no one was there and you got a new store to go in there, you got two times that amount of money. We put a higher value on new production versus keeping what we had. It was perceived to be a lot easier to keep what you had.”
But in the midst of a challenging economy that played a large role in the company’s debt predicament, Glimcher decided it was time to tweak this incentive program.
“In an environment where things were really tough, just keeping what you had was a big deal,” Glimcher says. “So we actually went in and we altered our compensation method. We said, you know what, renewing a deal is as valuable as getting a new deal. We’re going to pay the same amount for both. We knew No. 1, we wanted to keep the good salespeople working here. And No. 2, keeping the revenue we had was every bit as valuable. And frankly, that was what could be done in the environment.”
You need to take every opportunity in a stressful situation to show your people that you’re all marching toward the same goal. In your case, you need to show people that you are aware of any unique challenges they might be facing as they try to do their jobs.
“Do the goals of your incentive program match the goals of the organization?” Glimcher says. “If they do, it will probably work for you. If they are incongruent, they probably won’t work for you. We woke up one day and said, ‘You know what, the goals we set were fine for before. But they’re not fine for right now.’ As things get back to normal, it will probably go back. I think everybody respects that.”
The good news at Glimcher Realty Trust is that no mall properties had to be sold to erase the big debt. Revenue dropped to $275 million in 2010, but joint venture partnerships were arranged and a total of $300 million of equity was raised.
One of the biggest deals involved a joint venture purchase of Pearlridge Center in Hawaii.
“We’re going to be an 80/20 partner,” Glimcher says. “They’ll own 80 percent of it. We’ll own 20 percent, and we’ll operate the asset. Good things can come out of tough times. Now we’re growing with a partner when really we were contracting by bringing them into an asset. That worked out really nicely.”
Glimcher says the key in any tough situation is to keep your cool.
“When you’ve panicked in the past, has that been an effective mechanism for you?” Glimcher says. “If you yell at someone, are they going to feel good and want to do something for you? Ore are they going to feel kind of down and think you’re a jerk? People who are treated nicely usually wind up doing better things. If I thought people were going to be a lot happier and we were going to make a lot more money because I could go around yelling at everybody, maybe I’d start doing that. I don’t believe that’s true.”
How to reach: Glimcher Realty Trust, (614) 621-9000 or www.glimcher.com
The Glimcher File
Chairman and CEO
Glimcher Realty Trust
Born: Columbus, Ohio
Education: Bachelor of science in political science, Arizona State University
What was your very first job?
I did work at Youthland, which was a children’s clothing store. I worked there for a couple summers and part time over Christmas break. It was me and five women. I changed the light bulbs and I’d sit in the back room with the steamer and steam all these little miniature clothes. Anything that involved getting on a ladder and moving things around was my responsibility. I can still wrap a gift really nicely.
Who has had the biggest influence on you?
It’s probably a compilation of people. Obviously, I’ve spent a lot of time with and worked a lot with my dad, so he’s obviously had a huge amount of influence on me. You learn different things from different people’s management style. I’ve been fortunate to be exposed to a lot of pretty interesting people over the years.
What’s the best advice anyone has ever given you?
A great piece of advice I got was, ‘Put everyone else before yourself.’
If you could sit down with anyone, past or present, who would it be and why?
President Ronald Reagan. When you think about my style of relying on great people, delivering the right message, being positive and trying to inspire people, he certainly inspired me.
Since Sushil Jain, founder, president and CEO of Empyrean Services LLC, started his engineering management and technical consulting business in 2000, he has had a very collaborative and consultative leadership style. Using that style to build trust and respect with his employees and clients, Jain has developed a culture that puts people first.
“The more participative culture with focus on teamwork makes people feel more involved, more empowered and they feel more a part of the company versus just being an employee,” Jain says. “That quality is very important particularly in a small business.”
That culture has helped Jain grow Empyrean Services LLC to annual revenue of $20 million in 2010.
Smart Business spoke with Jain about how he focuses on people to grow his business.
What have been key factors behind your company’s growth?
Fifty to 60 percent of growth in the business over the last several years is attributed to the people that have worked for me. We go out of our way to treat them with respect. Whatever their needs are, we fulfill them. You have to work with people and work for people. Be firm and fair. Lay out the cards the way they are and people will understand that you are treating them with respect.
How can someone make their culture people-oriented?
If people are working together, it makes for a very cost-effective and efficient organization. You should have an open-door policy and make sure people feel comfortable that they can come and talk to you about anything. You have to build the level of respect and trust in the organization so that people trust not only you as a leader but also trust each other. You have to really take the time to listen to the employees. Everybody talks about having an open-door policy, but people have to really see that in action. You have to take the time to walk the floors and sit down at people’s cubicles and start to talk to them. Talk to them about what’s going well and what’s not going well.
How do you get employees to come to you?
When people come and talk to you and they have an issue, you listen and you do something about it. In a majority of cases, you’re able to do something about it, but in some cases, you’re not. You have to go back to them and say, “I know you had told me this or you had talked about this or you requested this, but this is the reason I cannot do it or this is where I am with this and it may or may not happen because of this or that.” People really appreciate that. You have to explain the reason for your decision.
As you grow up in management as you become a CEO, you are faced with making a lot of decisions on a daily basis. Some of those decisions are going to be unpopular. You have to communicate to the affected department or individuals why you are deciding it that way. Some folks may not fully agree or endorse that decision, but they respect the fact that you took the time to explain why you came to that decision. You have to take full ownership and accountability in your decision. That goes a long way toward building trust and respect in the organization.
How do you align culture with who you look to hire?
I think chemistry is very important. You don’t want to bring in a person who has a very different management style than what the organizational culture is because that can be very disruptive. The person may have the best work ethics, the person may have the best intelligence and knowledge, but they do not fit with the team and it could be like a bull in a china shop. That can create a lot of disruption with the team and their contributions could actually be negative rather than positive. The fit with the organizational culture is very important.
How to reach: Empyrean Services LLC, (412) 528-1573 or www.empyreanonline.com
Mark Seremet, president and CEO of Zoo Entertainment Inc., understands that, in the ever-changing world of technology, you must innovate to stay on top. Since being founded in the spring of 2007, Zoo Entertainment Inc., a developer, publisher and distributor of interactive entertainment software, has been recognized as one of the fastest-growing companies in the region because of its ability to generate new ideas.
“As an organization, not just externally but internally, we are very open,” Seremet says. “You have to encourage communication and you have to encourage ideas from everyone regardless of what their position within the company is.”
That openness and ability to have free-flowing ideas within the organization has led to revenue of $45 million through September 2010.
Smart Business spoke with Seremet about how he motivates Zoo Entertainment Inc. to innovate.
Identify your company direction. The most important thing to keep in mind when dealing with your organization is communication. Everybody needs to understand where this company is going, how can I help us to get there and understand what the metrics are that the company is measured on to know if you’re successful or not. If you’re not communicating and telling people what’s going on, what’s important to the organization, you’re unlikely to get innovation around the areas that you need it. You may get some innovation and some innovative ideas, but they may not fit with where you’re going with the company.
We have monthly meetings to communicate the direction of the company. You have to communicate how the company is doing, where we’re going, new initiatives that are being driven. At the end of the meeting, we have a period where anybody can bring up comments, ideas, thoughts, criticism whatever it may be. … We encourage anybody’s views there. You have to continually reinforce it, because it’s a message that people get every month. A lot of times, when you’re working in an organization, you don’t want to just feel like it’s a job or you’re stuck and you don’t really know how you fit into the whole thing. So we talk about how all of those pieces work. You just have to keep communicating that message and what’s important to the company every month.
Create an innovative culture. It’s interesting to look at other businesses that are innovative or maybe models that are working that may be similar to your industry but not necessarily in your industry. Then learn all you can about what that company is doing and what some of the drivers are in their success and then try to employ those same drivers into your business. That’s a good way to explore innovation and culture around that innovation. When you think innovation, you often think of technology, but you don’t necessarily just innovate around tech. You could innovate in customer communications, manufacturing, whatever it is. There is a lot you can do just by looking at these other organizations and applying that knowledge to your own company.
That culture comes from the leader, the CEO. I think it’s important that CEOs manage by walking around. It’s important that CEOs personally communicate with as many employees as they possibly can. They will learn a lot about the organization, and at the same time, they are encouraging people to bring things up. You’ve got to have a culture where employees know that we want to hear these ideas, we want to pick some up and move with them, and we also want to reward people for having created an innovative idea.
Be open-minded. If you’re open-minded, you will see a lot of ideas that larger companies don’t get an opportunity to look at because they have a very regimented and bureaucratic structure. To be innovative, you have to listen to people. If you’re myopic, then you won’t see what’s happening around you both within your organization and externally.
A lot of innovation can be customer-driven. If a customer sees improvements or sees potential ways to improve your product or recommends a new product to you, you’ve got to be listening to that. A lot of innovation is driven by being open-minded and having a reasonably flat structure where people can communicate effectively.
We foster the idea internally with people externally that we are looking for new games and ideas and anybody can propose them and they can communicate with the executives about it. Your idea might get shot down … but the environment and the culture is such that we want to hear those ideas. I think the biggest driver behind innovation is solving real problems. You’re creating a better product or experience for consumers.
HOW TO REACH: Zoo Entertainment Inc., (513) 824-8297 or www.zoogamesinc.com