If you’re reading this column you’re one of two people — my mother (who thinks it’s pretty cool that her son is a writer) or somebody who is hoping to pick up a nugget of information to help him or her better run his or her organization. So mom, this column’s not designed for you.
For the rest of you, if you take one idea from this month’s missive and issue of Smart Business let it be this: Unleash your employees.
Do it today. Don’t wait. Don’t run a cost-benefit analysis. Don’t think about the short-term cost. Don’t fret over disrupting the hierarchy. And definitely don’t put together a task force charged with developing a plan for management to analyze and make recommends on.
Recently, I had the honor of having the CEO of a company quote me to me — which can be as unnerving as it is flattering — and his message was just as direct: If you want to be an innovative organization, you must tap into and, just as importantly, use the ideas from everyone within the work force.
For years, I’ve proselytized about the five traits all innovative organizations share — regardless of size, industry or even if they’re a for-profit, nonprofit or governmental entity. Simply put, the third of those five rules is: Innovative leaders build organizational cultures where innovation thrives, and they understand that it does not happen in a vacuum.
So here’s the plan — five items. Start here and then fill in the blanks by personalizing it to each of your organizations:
- Develop lines for open communication at all levels of an organization. (A so-called open-door policy doesn’t cut it.)
- Empower and trust employees to think creatively about how they do their jobs.
- Provide all team members with the tools they need to accomplish their goals. (This may cost some money, but if you trip over dollars to save pennies, you have only yourself to blame for falling short.)
- Allow people to own the ideas they champion. (You’ll be amazed what happens when your team goes that extra mile to see their ideas become reality.)
- Create an environment where those people are able to collaborate with others in order to bring them to life or take them to market. (This will require a mind shift at multiple levels of an organization and may just be the biggest hurdle you face. But it is imperative to tying everything together.)
There you have it, a straightforward strategy, a simple yet powerful plan when executed properly. Now, what are you waiting for? Go become an innovation leader by unleashing your employees.
Something Hal Uhrman has learned in all his years of running 14 full and six half marathons is that you have to pace yourself. With that kind of distance, you can’t sprint out of the starting line or else you’ll run out of gas quicker than you think. It’s a steady, consistent approach to the race that will get you to the finish line.
He uses this same approach to run State Industrial Products, the cleaning products company where he’s been president and CEO for more than two decades. The $111 million company celebrates its 100th birthday this year, and to stay in business that long, you have to think long term.
Build on cash
One way Uhrman does that is by only buying in cash.
“There are all kinds of four-letter words, and the only good one is cash,” he says.
His cash-only policy even goes for buying other companies and facilities — one of which was 11 years old and sat on 10 acres of land.
“If we can’t pay for it, we don’t buy it,” he says.
“You can never get in trouble if you don’t owe money.”
He bought six companies before the recession started, but when it did kick in, he stopped because he didn’t want to run out of money.
Now that the recession is over, Uhrman is looking to make acquisitions again.
Two types of companies that he targets are family-run businesses, where owners are looking to get out, and struggling organizations.
Once he buys a company, he wants to keep as many of the field employees on as possible as well as the owner, if he or she still wants to be involved in some capacity. But there are certain areas where there’s duplication and he knows he won’t need some of those people.
“We don’t need their billing system or their collection system, so some of their employees would get eliminated,” he says. “Anybody who’s out in front of customers, we need all of those. Our payroll is all done here, so if they have a payroll department, we don’t need that.”
If he has good people who he doesn’t need but may be effective in other areas, he’ll look at moving them to a different position.
“If we can find them other jobs, we will, but we have to do what’s right for the company,” he says.
He says it’s key to make these changes right away instead of letting them linger on your to-do list.
“I try to do it as quick as possible because a lot of these companies aren’t making much money,” he says. … “You can’t do it [from the heart]. You have to be objective on who stays and who doesn’t. If they’re a good worker and there’s a place for them, we absolutely want them.”
Hire the best
Having good workers who are dedicated to the business is crucial for State Industrial’s success, and he’ll only hire people who fit that mold, because you can’t build a strong team if people aren’t dedicated to helping the company. He starts with people who are willing to take the time — even sometimes outside of work hours — to handle problems that arise. Getting these people starts with taking your time in hiring.
“You look at their track record to see what they’ve done,” he says.
If they come in right out of college, you don’t have a way of knowing for sure, but he says you can see if they’ve been involved in team-oriented activities in their past, such as sports.
He’s also dedicated to making sure they’re taken care of. This starts at the most basic level with making sure they have their job, even when times are tough.
“Most companies, when things get tight, they start cutting back people because they don’t have any money, and if you have money, you can kind of wade through, and that’s really what we did,” Uhrman says.
It goes back to his cash-is-king mentality, so he was able to take care of his team through the downturn. Beyond that, he says that good benefits and a 401(k) program are important, but it’s even more than that.
“The best culture for employees is one where they have the opportunity to help the company achieve its goal and achieve its personal success,” he says. “As you provide a large group of people with challenging work and the responsibility to get the job done and reward them for a job well done, the enthusiasm is contagious.”
He says that taking care of people also comes down to looking out for their long-term desires and needs.
“You have to be honest with them in everything you do, and if you get somebody out of school, if they don’t see a position with you where they can move up, they’ll leave you,” he says.
Additionally, he says you have to make work a fun place for them. One way State Industrial does this is by regularly participating in the Corporate Challenge program where companies compete against other local companies in various athletic competitions.
“We get nonathletes to do something,” he says. “They really contribute. When they have this Corporate Challenge, they have a cookout down there. We do things to try to make it fun.”
When you have a strong culture like that, it will show in how your employees treat your customers. A huge part of State Industrial’s success is that it takes care of customers well.
“If you do the right things for your customers or employees, it works,” Uhrman says. “If you take advantage of either one, it doesn’t work.”
One way he and his team takes care of customers is by looking out for their best interest. Every quarter, his team goes to each customer and shows them exactly what they’ve spent and what they can do to control costs better.
“Trying to make more money off the customer is narrow-minded,” Uhrman says. … “You have to take care of the customer.”
Taking care of the customer ensures you don’t lose that customer.
“If you don’t lose customers, you have to win,” Uhrman says. “Every company for one reason or another loses customers. We really try to do a job on them to convince them they’re spending less money.
“If a customer thinks that he is being treated fairly, you won’t lose him. … If you take care of customers, they will stay with you.”
In addition to treating his customers well, he also strives to make sure the product offerings they have are the absolute best. About six years ago, as he and his team went to different trade shows, they started to notice a trend: more and more companies were starting to come up with environmentally friendly products.
“Our challenge is to do it better than some of our national competitors and knock them out,” he says.
That meant that State Industrial needed to start adapting its product line, as well, so that customers had safe, effective and environmentally friendly products to choose from.
For that to happen, he had to get buy-in from his team. He started with his top people to lead a change process.
“Bring them in, indoctrinate them on what has to be done, and we train them, and their job is to go out and train their people, and it’s easy for us,” he says.
Overall, he says you have to continuously encourage and gently push people into changing.
“You can’t do it with a sledgehammer,” Uhrman says. … “If they don’t change, one by one they’re going to lose their customers. If it’s not to us, someone else will come in and convince them.”
How to reach: State Industrial Products Corp., www.stateindustrial.com
Phillip Keiser is a bit of a traditionalist when it comes to dessert. If, after his double cheeseburger with the works, he’s still inclined for custard, he goes for a plain vanilla cone. And it should taste the same whether he’s at the Culver’s restaurant near his office in Prairie du Sac, Wis., or the one in Elkhart, Ind., closer to his hometown. As president and COO of Culver Franchising System Inc., a chain known for its ButterBurgers and frozen custard, Keiser’s job is making sure everything, down to dessert, is consistent everywhere.
But he can’t be in all 435 locations at once.
“How do we keep brand standards going?” Keiser says. “One of our critical success factors is our franchise operators and their commitment to the brand.”
Because he takes extra care to bring in committed franchisees, Keiser doesn’t have to manage details too closely.
“The only way the brand grows is if we’re all in this together,” he says. “So our training program is more extensive than most. Our interview and selection process is more extensive than most. Our core values surrounding what type of franchisee we look for are more extensive than most.”
These days, those core values are stronger and clearer than before, thanks to Culver’s new “Welcome to Delicious” campaign that reinforces the chain’s reputation for good food, family values and great service. Founder Craig Culver is very involved in the campaign, telling stories about Culver’s ingredients and relationships.
So Keiser has to make sure those stories and values radiate throughout the Culver’s system. That starts with attracting and developing franchise partners who are committed to them.
1. Identify committed franchisees
When Keiser joined the company in 1996, Culver’s operated 44 locations. Now, nearly 400 restaurants later, he still hasn’t advertised a single franchise.
“They’re all sold by word-of-mouth,” he says. “Most of the folks have discovered us through a friend or relative or as a guest in our restaurant.”
Attracting interest, then, isn’t the challenge — it’s identifying the right candidates. The first filter is financial. Even though the restaurant business can be expensive, Keiser’s not interested in investors because investors don’t operate restaurants.
“The first thing is: They’ve got to be somebody that wants to run a restaurant day-to-day,” he says. “We require that in each one of our restaurants, we have an operating partner who needs to own either 25 percent of the operating entity and (25 percent of) the real estate or 50 percent of the operating entity. They’ve got to (be financially qualified) if they want to own the real estate.”
He runs background checks to verify financial standing, but validating the ability to run a restaurant takes more than paperwork.
“Many franchise organizations would do a Discovery Day, where they would come in and interview the franchisor,” Keiser says. “We have what we call Discovery Week, where they come on their own nickel. They need to buy uniforms and work six 10-hour days in our restaurant.
“Basically, during the week they’ll work every station in the restaurant. Can they figure out how to work the grill, how to make the custard? They get there early in the morning and work with our porters mopping the floors, scrubbing the fryers. They basically experience a little flavor of the day-to-day life of a team member working in our restaurant.”
Why subject potential franchise owners to entry-level work? Believe it or not, Keiser’s not testing prior restaurant experience.
“We really want them to do a gut check on themselves, is this right for them,” he says. “If you work in a kitchen, you get hot and you get some of the kitchen odors in your clothing. Are they OK with that, or do they think it’s gross? Are they OK wearing the uniform and seeing their friends? They’ve got to be comfortable with the environment.”
Not only the work but also the hours can weed out candidates.
“If they come from a traditional 8-to-5 type of Monday-through-Friday work environment, do they understand we do as much business after 4 o’clock as we do before 4 o’clock, and the weekends are big days for us?” Keiser says. “You won’t be successful with a Monday-through-Friday mindset.”
While Keiser is looking for applicants to be comfortable with the environment, he’s not hung up on kitchen skills just yet.
“We’re really looking for people that have leadership skills, communication skills, critical thinking skills, team-building skills,” he says.
In the mornings during Discovery Week, applicants further reveal those skill sets through the Wonderlic Cognitive Ability Test, personality tests and a GED equivalency test measuring math and verbal skills. While Keiser considers these results, he doesn’t put too much weight on them.
“We’ve had people that have scored off the charts that haven’t done real well working in the restaurants,” he says. “But it does give us an insight in terms of how that person is wired.”
To really understand what makes applicants tick, Keiser and other executives — including Craig Culver — interview them at the end of Discovery Week.
“Try to understand: What are their goals or objectives?” he says. “Most of them have some motivation to get into this. And if their motivations aren’t aligned with what we know it takes to be successful in this business, that’s probably a deal-breaker.”
Because the right motivation requires a lot of commitment, Keiser wants to make sure candidates are sincerely willing and able to make necessary sacrifices. Would their family support relocation? What if their July Fourth tradition at the lake couldn’t happen on July Fourth?
He also tries to read current employees’ interactions with applicants. Now that they’ve worked together a week, Keiser observes how well they mesh.
“You can tell sometimes by the body language of our team members, and you can see by the interaction of people, what they talk about,” he says. “The team member, if they’re leaving the shift, do they come over and say goodbye (to the applicant), or do they just leave because maybe they won’t see this person ever again? Are there hugs, or is it just pleasantries? There’s a lot of collective input from people that goes into this.”
To gather all that input, Keiser brings together everyone who interacted with the applicant on the following Monday. It’s crucial that opinions are kept quiet — especially from the top — until decision time.
“We don’t talk about the candidates during the week when they’re here,” Keiser says. “Myself or for Craig — if we met with somebody and said, ‘We really think they’re great,’ or, ‘Boy, I don’t think they’re very good,’ — because of our positions, we would taint somebody else’s insight.”
But come Monday, there’s no holding back. By engaging several team members around the decision, he gets a better-rounded view of applicants. Plus, by this point, he’s given applicants plenty opportunities to self-select themselves.
2. Train and develop your team
Discovery Week is just the appetizer for new franchisees. Once they’re on board, they dive into an intensive 16-week training course. The first 12 weeks are spent at the restaurants around Culver’s headquarters in Prairie du Sac — about two and a half of those in a classroom.
“Some of that would be dedicated to food safety, then everything from how to conduct training, how to use the training tools, how to conduct local marketing, to accounting practices, payroll, labor laws and presentation skills,” he says.
Franchisees spend the rest of the time mastering each workstation in the restaurant, not just learning what happens but also why.
“The product and techniques have to be followed,” Keiser says. “But part of the burden for us is to ensure that we have a policy or a procedure or a product or an ingredient that makes sense, that we can actually back it up and make a business case for it. When we do a good job with those decisions, we make it easier for the franchisee, that they aren’t thinking of doing it a different way.”
Throughout the program, trainers test franchisees and even reward the highest scores. Like school, they have to maintain passing grades to advance.
“If they aren’t cutting it in one area or another, then they have to go back and revisit it,” Keiser says. “A few times, we’ve actually had to extend the training a few days because they weren’t getting their arms around some aspect of the business. There’s a lot of testing, measuring and follow-up that goes into it.”
The ultimate test comes in the last four weeks, when new franchisees open two restaurants, facilitating a week of training and a week of opening for each.
“That’s where the dynamics really change, because when they’re working in our restaurants, the team members basically know their jobs,” Keiser says. “But now, they have to become the expert. Now, the people ask them questions. Now, they’ve got to help inexperienced team members overcome challenges of getting the job done.
“If they’ve never been through an opening before, they’re kind of standing there wide-eyed like, ‘What the heck’s going on here?’ The second time they do it, they really start to understand the challenges they’re going to face when they do the same process in their very own Culver’s restaurant.”
But it can’t be all work all the time. Most training programs at Culver’s include a cookout at Craig and Lea Culver’s home, or there’s a patio at the office that makes a perfect casual spot for serving beer and appetizers.
“You’ve got to look for some of these social times to get to know people on an individual basis and not make it all just about the business,” Keiser says.
3. Stay present and engaged
When you take time during training to get to know franchisees individually, you start the relationship with a good sense of alignment. But it takes constant effort to stay aligned.
One of the ways Culver’s does it is through a network of franchise business partners (FBPs) that acts as a field team to support the franchise community. Each FBP has about 20 restaurants to visit and measure against standards. They’re also on-call to help franchisees solve any business issues, from profitability to developing their teams.
But Keiser doesn’t use that network as an excuse not to get out in the field himself. Both he and Craig Culver visit restaurants throughout the system.
“I once had a guy tell me that as you advance, it becomes more and more difficult to get out of the office and into the restaurants,” Keiser says. “I always thought that was a little bit of bull, but I’ll tell you what — I can’t get out as often as I’d like to.”
At a minimum, he grabs lunch at a nearby Culver’s almost daily and tries to get out of Prairie du Sac for a couple of days each month to visit other restaurants.
The main goal of visits is shaking hands and saying hello. But he was a restaurant manager, too, once, and he still observes through those eyes.
“When I walk in the restaurants, I’m not the president of the company anymore,” he says. “I’m basically the restaurant manager, looking at the things I looked at when I last ran a restaurant in 1981: What’s the sense, what’s the feel? Do they have their act together? Do they have the right amount of products? Are the team members smiling at each other? Do they say please and thank you? They can’t fake that stuff.”
Even if they behave while you’re there, how do you know they don’t play while you’re away? The key is not drawing all your conclusions from one visit.
“You don’t just use one snapshot to tell the story,” Keiser says. “You use the collection of all the things you see happening at a restaurant: What are their patterns for growing sales, what are their patterns for growing people, what is their community involvement, how does that match up with the reports and what the other folks are doing?”
That big-picture mindset is important because you’re not just visiting a restaurant, you’re assessing how the local leadership is managing that operation.
“I not only have to see how the restaurants are doing, I have to evaluate how the rest of our leadership team is evaluating standards,” Keiser says. “You may go from one FBP’s region to another FBP’s region and you start to understand, OK, this guy or gal has a blind spot or that’s their hot button and they’re really pushing that aspect of the business. When I go out, I really try to look at it and say, ‘What are my directors of operations and my VPs talking about when they’re out there?’”
While tucking observations into his broader evaluation of the network, Keiser takes note of details, too.
“Ours is a very detailed business,” he says. “We measure our success in terms of penny profit on our menu items. We measure our success in terms of seconds in speed of service. There are a lot of details that go into it — not that I can get into all the details in my job — but [it’s important] to have enough of an awareness that when you do dig into a certain topic, you can get down to brass tacks and understand it.”
But tread carefully when dealing with details in the field.
“If you see a critical detail that’s being missed, you’ve got to be conscious (of the situation),” he says. “I have to remember that, for me, I’m just walking into another restaurant. For them, they’re getting visited by the president today, and that makes some people uptight.
“But when you see stuff that is on standard, you try to reinforce it. And if there’s a coachable moment, well, you do a little coaching, too.”
The main objective is just letting employees know you’re there and you care about what they’re doing. The more you do that, the better equipped you’ll be when issues need attention.
“If you have some things that aren’t quite to standard, it’s much easier to have some of those difficult conversations if there’s a relationship based on trust and mutual respect,” he says. “If they only hear from you when they did something wrong and they’re in trouble, so to speak, then that doesn’t work very good. … You’ve got to get together with people and get face-to-face as much as you can.”
How to reach Culver Franchising System Inc.:
Phone: (608) 643-7980
The Keiser File
Name: Phillip Keiser
Title: President and COO
Company: Culver Franchising System Inc.
Headquarters: Prairie du Sac, Wis.
Locations: 435 in 19 states (from 44 when Keiser came on board)
Hometown: Nappanee, Ind.
Education: Bachelor’s degree in business from Manchester College
Previous jobs: various management positions with Burger Chef and Hardee’s
What was the last book you read? The owner’s manual for my car. Have you seen those new manuals? I mean, come on, they’re like books! And I still don’t know how to work all the stuff on the radio. But seriously, the last book I did read was ‘Decision Points’ by George (W.) Bush.
If you could have dinner with any three people, living or not, who would you choose and why? I’d like to have a conversation with Vince Lombardi because he was a Packer but also because I think he also had a lot of insight on how to motivate people and get things done and be disciplined.
In our industry, the person that I think would be a real hoot to talk to would be Col. Sanders. He basically started selling chicken out of his car and using a recipe as a business plan to become, now, one of largest restaurant companies in the world. From some of the folks I’ve met through our industry that actually have worked with the Colonel, I get the impression he was a pretty colorful character.
And then I think any former United States president. I’ve had a few opportunities over the years to hear a couple of them speak, and when they go off script and they start telling stories, OK, at that point, if walls could speak, there would just be a whole bunch of interesting things to get from any of them, regardless of how you view them from a political standpoint.
If your company had a theme song, what would it be? There could be a couple of them: I think the theme song from ‘Rocky.’ We’re not the big guy, but we’re always trying to grow. We’re always a little bit of the underdog and trying to make things happen, but we always believe in ourselves and we aren’t afraid to take on the challenge of the fight to get out there.
One of the other ones would be ‘We Are Family.’ We talk a lot about a spirit of family; we actually call our annual convention The Reunion. It’s the spirit we like to have at our gatherings with our franchise community and our team members.
What’s your favorite stress relief? I’m a landscape gardener. I live out in the country, and I have a woods and a perennial garden. So after all we do all week, then I just go out there with the plants and the trees and the grass, always cutting something, pruning something. I wouldn’t call it mindless work, but I can get out there and have some me-time and work up a sweat and get some sore muscles, too.
Nothing is more personally frustrating for a senior executive than regrettable losses. Learning after the fact that one of your most valuable employees has decided to leave for a “growth opportunity” elsewhere — or even “more earning potential” — is as frustrating as it gets for people-savvy leaders.
It’s a pull-your-hair-out moment where you ask yourself and your senior human resources person: “What signs did we miss on this one? Have you asked if she/he is willing to stay under any circumstances? What if we paid more — would that keep them here?”
Unfortunately, executives will see more of this turnover of top talent in the future, not less. The generation now in their first 10 years in the work force will work for an average of nine companies in their lifetime. These workers will chase opportunities for growth and development. They are a generation that has not experienced loyalty in their home lives or youth — and therefore they neither seek nor offer unconditional loyalty to their employers.
So, can anything be done to prevent unwanted attrition? Absolutely.
You have more influence over this than you may think. Absent a personal crisis or spouse relocation, leaders can significantly influence an employee’s decision to stay or leave. It starts with knowing the top five reasons why employees leave companies:
“I am not appreciated”— Employees report their hard work and contributions are neither appreciated nor valued by the company. They get little to no positive feedback for a job well done.
“No growth opportunities” — Employees report they see no growth or development opportunities in their current jobs or roles, nor are they being actively developed for their next role. They receive little to no career planning or development for the next job or role in the company.
“Peers” — Descriptions here range from peers behaving badly with no consequences to peers who exhibit a fraction of the effort yet receive the same pay and opportunities to peers who make life more difficult internally. Unacceptable behavior with no visible consequences drives away top performers.
“Values clash” — Employees reported being asked to do things that were incompatible with their own values. Examples: Being asked to sell products/services to people who didn’t need them; being asked to misrepresent facts or data. Honesty and integrity still matter a lot — people want to be proud of what they do and who they do it for.
“Compensation not commensurate with value creation” — This one is a post-bubble addition. Executives see the value of what they do to contribute to the company’s overall success but feel they are not rewarded commensurately. You have to ensure comp systems are differentially rewarding higher contributors.
These five should make your hair stand up. All but one reason resides in how people are managed, in how leaders lead. So if keeping your brightest and best talent is a priority for you and your company, be sure managers and leaders at all levels are taking the time to say and show how much they appreciate the contributions of the high performers. Engage those you want to keep, especially, in career-development conversations and development efforts.
Help them to actively learn, grow and prepare for their next role in your company. Act on bad and unwanted performance. Let the high performers see that you will not shy away from addressing bad behavior and performance in your organization. Lead by example, and they will repeat your same actions at their level. Demonstrate honesty and integrity in all that you do.
You don’t need to be a victim to unwanted attrition, but you do have to recognize that retaining your top talent just may require new leadership behaviors on your part.
Leslie W. Braksick is co-founder of CLG, Inc. (www.clg.com), author of Preparing CEOs for Success: What I Wish I Knew (2010), and author of Unlock Behavior, Unleash Profits (2000, 2007). Braksick and her CLG colleagues work with leaders at all levels to maximize performance in key areas—and to help executives do the right things to eliminate regrettable losses. Reach Braksick at firstname.lastname@example.org or at (412) 269-7240.
Mitch Lowe is not looking for sympathy. He just wants you to know that the rapid growth of Redbox Automated Retail LLC — going from a dozen kiosks to more than 27,000 locations nationwide where you can pick up a movie for a dollar — has come with a few challenges along the way.
“If you asked most people in business what you would be worried about, growth would not be one of them, especially in the economy we’ve had over the last couple years,” says Lowe, president of the $1.16 billion subsidiary of Coinstar Inc. “But growth brings on a whole set of challenges that are unusual and very complex.”
One of the most complex challenges is finding people to fill the constant job openings that tend to come about with a rapidly growing business.
“You need to hire people very quickly, and you need to work a lot harder than I ever expected in making sure you don’t cut corners in your hiring,” Lowe says. “You try to continue to keep your high standards as far as the people that you hire and the rigor that you put in finding people who are the perfect fit.”
With the popularity of Redbox, Lowe is not lacking for quantity when it comes to receiving applications for newly posted job openings. But the quality is sometimes a different story.
“When you are so attractive, you start to have a lot of folks who are trying to get jobs there who are really good at presenting themselves but are not so good at fitting in with the culture or the style of the company,” Lowe says. “When you’re trying to hire 50 people a week, it starts to get very tedious, and you see people inclined to cut corners.”
Lowe needed to find a better way to fill personnel needs at Redbox that would prevent the kind of compromises that could ultimately hurt the 1,600-employee company’s ability to keep growing.
Make it a team effort
The solution to the hiring conundrum, like everything else about Redbox, was arrived at in a flash. Implementation would take a little more time and effort, but the idea became apparent very quickly.
“We have always been a fast-action company, and I believe we did this within a couple days,” Lowe says. “You have to set up an environment where making mistakes is not something that you try to hide or are fearful of.”
The idea was to get more people involved in interviewing potential job candidates. It wouldn’t just be a single department head or a department head and a division president.
“We instituted this practice of 100 percent unanimity in bringing on any individual new employee,” Lowe says. “We had typically seven people across the company from all levels who would interview any new candidate from the person at reception to someone who works in the field to a VP to myself. And even if the hiring manager was 100 percent behind hiring this person, if the merchandiser who merchandised the jewel stores did not agree that this person should be hired, we did not hire this individual.”
The idea was to get more people to take ownership of the culture and the responsibility of bringing good people to Redbox.
“Everyone realized that I have as much to say about whether we hire the absolute best people that I can count on and can count on leading the company as anybody else does,” Lowe says.
The opportunity to be part of a job interview would be open to anyone. Actually, it was even more than that. It would become an expected part of your duties as an employee at Redbox.
“There are going to be people who don’t make themselves available to conduct the interviews,” Lowe says. “So you need to make it much like our jury system in the United States where employers are required to allow people to participate in juries. It has to come from the top, a very clear statement that the reason why we are doing this is so that, over time, we build an incredible group of people who are going to be dedicated to solving problems. It’s going to be a much more enjoyable place to work. In order to do that, you have to participate. You have to live up to the rules of this process.”
Lowe was confident that the collaboration and involvement of other people in the hiring process would make a big difference in the quality of people who were offered jobs at Redbox.
“It wasn’t just a poster on the wall that said, ‘We believe in integrity and humility and we believe in perseverance,’” Lowe says. “It was real and no matter where you were in the company, you were responsible for hiring people that lived up to those values.”
It didn’t all happen that smoothly, of course, and Lowe had a few problems to overcome to get this new employment interview protocol up and running. First and foremost was the scenario where a hiring manager didn’t get the candidate he thought was best for a position because someone from another department didn’t see it the same way.
“This was a very controversial idea,” Lowe says. “Not everybody agreed with it, especially the hiring managers who did not want to lose their authority in who they were going to hire. People imagined, and this actually came to pass, that they would be really sold on a candidate.
“This person was going to be working for them and an individual in the call center didn’t think this person represented our core values and vetoed the individual. There were all these debates that happened very quickly upfront. They got it out on the table. ‘I don’t think this is going to work because it is going to slow down our process,’ or, ‘I know best who I should hire and these others won’t.’”
Lowe reiterated his belief that getting more people involved in conducting interviews, even if those people weren’t in the same department as the position being hired for, was a good thing.
To further bolster his position, he referenced the book, “The Wisdom of Crowds,” by James Surowiecki.
“It’s the basis for our jury system and the basis for why democracy works,” Lowe says. “The core tenet is that a lot of people with some information on a topic, if they all get together and vote about what they believe in on a topic, they are more likely to be correct than if you put two or three experts on the topic trying to answer a question. … So that’s why we have this random group of people interviewing from different perspectives.”
A matrix was built that would list out categories of employees and the quantity of people that had to participate in the interview. It was done in such a way that interviewers would be chosen randomly by the human resources team, with anywhere from five to 11 people selected, depending on the level of the position.
“You have to be careful you don’t set it up so it can be manipulated and become a stacked deck,” Lowe says. “The trick is the hiring manager is not picking the people who interview the candidates because the hiring manager can be very biased.”
As much as Lowe believed this was a great idea, he did not force it upon the employees at Redbox.
“I have to show that I am not stuck and stubborn with my own preconceptions and my own ideas all the time,” Lowe says. “Only very rarely do I push through my own beliefs that might be contrary to others. Set the example that you are open to trying new things and new ideas and not being fixated on your own view of the future.”
He didn’t get everyone to agree with the plan. But through being transparent and willing to discuss the idea and answer questions, he was able to earn their support.
“When you have that consensus building, people say, ‘Well, I don’t agree, but the majority of you do and I trust you and I have faith in you, so I will try it.”
Perhaps the most important piece of this new hiring practice, aside from earning support for the idea, was to put employees in the best position to conduct good job interviews. The first point covered was critical if this plan was to have any chance of being a success.
“There was a stated rule at the very beginning of those meetings that no one was going to try to force you to change your mind,” Lowe says.
The reason this rule was so important was that there needed to be a way to resolve conflicts peacefully so that no one felt pressured to change their opinion for the wrong reason. If that wasn’t the case, the system would lose all legitimacy.
In addition to having the freedom to make their own choices, employee interviewers would also be free to come up with their own questions.
“We try not to script them too much in the way they ask their questions so we get all kinds of feedback from a different perspective,” Lowe says. “We encourage a free flow of questions.”
When an interview is completed, forms are filled out by the interviewer and turned into the human resources person managing the process.
“What they do is if there is more than the majority against hiring this person, we just move on to the next person,” Lowe says. “If it is one or two people out of five or seven or 11, then they will put together a panel to bring that group together to discuss the issues that they saw.”
It was some time after the system had been implemented that Lowe faced the very scenario his hiring managers had feared.
He had been looking to hire a senior vice president of purchasing for about a year and thought he had found the perfect candidate for the job. But out of the 11 interviews that were conducted, it was a near even split with people both for and against the candidate.
“So we got together, all 11 of us, and everybody explained why they were for or against,” Lowe says. “At the end of that, I could see pretty clearly that the issues that the people raised who thought the candidate wasn’t right for the role, they described things that I had not seen, but made sense.”
Lowe freely admits the decision frustrated him.
“I thought this candidate was perfect,” Lowe says. “What they taught me was that there are things, because of their unique perspective, things they saw that I did not see. And so we decided not to move forward with that candidate. It ended up taking me a whole other year to find the right person. It can be frustrating for the hiring manager, but you have to respect the process and respect the insights that come from the diverse interviewer. The other great benefit of this is that each individual feels that they play a big part in building the leadership and the teams across all parts of the company.”
There has also been a benefit to the people who have been hired under this system.
“We found the wider the range of people that did the interviewing, the more likely we were going to get employees that were going to stay longer, have more impact and have more fun working here,” Lowe says. “And it really has paid off. There’s just a whole sense of passion about Redbox and our mission from everybody, wherever you’re working at Redbox.”
How to reach: Redbox Automated Retail LLC, (866) 733-2693 or www.redbox.com
The Lowe File
Born: Omaha, Neb.
Education: High school graduate
What was your very first job?
Working as a demolition guy in a construction job. My job was tearing apart barns and removing metal roofs and that kind of stuff. It was fun because you could take a hammer and a crowbar and yell, ‘Timber!’ and watch stuff fall. I got this job from a friend of my parents who gave me the job as a favor to my parents to try to keep me out of the house during the summer.
My boss was this guy named Shorty, and he was never satisfied with the work that I did for him or the work that anyone did for him. It taught me a good lesson on how not to motivate and manage people.
Who has had the most influence on you?
One is Gregg Kaplan, the president of Coinstar Inc. What Gregg really taught me was analysis. If you want to continue to make decisions over and over again that end up being right, you need to do a lot of research and analysis and testing.
The other person was the person who was the co-founder of Netflix with me, Reed Hastings. He taught me focus. Focus on the big things. Focus on the things that could change the business in a big way. Leave the small things for later.
Who would you have loved to have dinner with and why?
It would be Thomas Jefferson. He was such an innovator and such a great creator. He was always devising tools and equipment to solve problems and he lived in such a turbulent time. I would love to see what was going on in his brain.
When hiring a member of the IT team, weeding through all of the candidates out there is a tremendous challenge. Particularly if you are a smaller organization, it is likely that a non-technical person is doing the interviewing. In that case, it is very difficult to determine whether or not the person you are talking to actually knows their stuff. Even someone with a very technical background can be fooled by an impressive resume and a smooth talker.
“IT people are weird. I should know — I’m one of them,” says Zack Schuler, founder and CEO of Cal Net Technology Group. “They are the hardest to hire and even harder to retain, and are sometimes hard to fire, as many of them make themselves indispensable as they convince management that their skills are unique. Many of them have technical egos that are larger than life.
“At Cal Net, we have roughly 35 talented IT engineers that we had to hire, train and retain. And we’ve had to let some go over the years. We would like to think that we have this down to a science.”
Smart Business learned more from Schuler about the best process for hiring and retaining the right IT people.
Should IT people be interviewed differently than other potential hires?
Like with any position, you should be screening for the personality traits. An egocentric IT person is the last person you want on your team. Some interviewers are naturally talented at sniffing this out. For others, I would recommend a personality profile. In my opinion, personality is more than 50 percent of what you should be screening for.
Another of the most important traits is good communication skills. We have all experienced the IT guy who wants to sit in a closet somewhere to minimize his contact with humans. If they do make end user contact, it is usually a painful experience, as they will say the least amount possible so that they can head back to their cave. You should have the expectation that your IT person will be able to communicate as effectively as anyone else in the organization.
How should a company screen an IT person?
Start with, ‘Tell me about your IT environment at home.’ If they give you an answer along the lines of ‘I have three physical servers, running 7 VMs for testing, and I’ve got my own mail server running Exchange, and I’m running VDI for my primary workstation,’ then that is a good first step. They view this as their ‘sandbox.’ If they respond, ‘I’ve got a laptop at home and I try to stay away from the computer as I get enough of it at work,’ then they probably aren’t a good technical fit. You want your IT folks to be passionate about technology, and most of them do their best research and learning at home, after hours.
The second easy way to screen is to have a short technical quiz that can be administered by anyone. Feel free to e-mail me for our quiz.
Last, and perhaps the most time-consuming and difficult process, is to put them through a technical lab. We require that our new hires come in and build a network in an eight-hour time period. We have a point system that scores the candidate, as no one ever finishes the lab. This gives us an excellent assessment as to what they do know, and what it is that they need help with. Depending on what you are looking for, there are companies that will administer these sorts of labs for you. If you are testing on Microsoft infrastructure skills, we can administer this sort of lab.
What are some of the challenges of retaining IT people?
In general, IT people are motivated by advancement and the quest for knowledge. In organizations where there isn’t any room to move up, nor is there anything new to learn, IT people will stagnate and usually move on.
Good IT people are always looking to explore and learn the latest and greatest technologies. Just as they have a sandbox at home, they want to work for an organization that invests in IT and gives them an opportunity to learn.
Good IT people are also looking to move up the food chain. While some IT folks are motivated heavily by pay, many are more motivated by an increase in title and responsibility.
How can these challenges be overcome?
Quenching the IT person’s quest for knowledge isn’t always the easiest thing to do. There are two ways to attack this. First of all, if you hire someone who is a master of all of the technologies that you are currently running, you’ll get someone who can hit the ground running, but you will also get someone who becomes bored quickly. On the other hand, if you hire someone with like experience and aptitude, but not exact experience in the technologies you are running, you will give someone an opportunity to learn. You will obviously have to weigh the business risk in doing this — and while they are learning you may want to supplement their skills with a consultant — but it can be well worth it in the long run. In short, I recommend slightly ‘under-hiring’ for the position.
The second way to attack this is to give your IT person some latitude when it comes to decision-making. If they want to implement a new technology that is reasonable from a cost standpoint, and delivers business value, I would err on the side of letting them do it. Even small concessions can give your IT person a sense of worth and something new to learn.
Last, in terms of advancement, don’t ‘over-title’ a person. Don’t call your lone IT person ‘IT director’ right away. Create a career path: network administrator, senior network administrator, IT manager, IT director, and so on. Even very large IT organizations should be using this model. Look for increases in responsibility along the way, along with small increases in pay. Thinking out a career path before you hire someone will go a long way in making sure that they hang around for a long time.
Zack Schuler is the founder and CEO of Cal Net Technology Group. Reach him at ZSchuler@CalNetTech.com.
Immigration is currently a hot-button issue, so it’s not surprising to hear that Immigration and Customs Enforcement (ICE) recently hired 500 new auditors in its quest to crack down on undocumented and unqualified workers.
Businesses who rely on undocumented workers take note: If ICE audits your business and finds you have knowingly or mistakenly hired illegal aliens, it will assess up to a $250,000 fine per undocumented worker and $1,000 per mistake on each completed I-9 form.
In my experience, I often find that employers are unaware of the stiff penalties associated with hiring undocumented workers. They believe their audit risk is low, and in many cases, it’s easier for them to staff undesirable jobs with undocumented workers than with documented ones. But the penalties and PR repercussions associated with immigration busts quickly destroy any benefits you may have received from hiring illegal aliens in the first place. Your reputation is hard to replace and so is loss of client confidence.
When ICE does come knocking, companies who rely heavily on undocumented workers find themselves facing a twofold problem. First, the potential fines can easily run into the millions of dollars. Second, the moment your undocumented workers get wind that ICE is at the door, they will leave. Suddenly, your business is missing 30, 50, or in one case, even 80 percent of its workers. You have to figure out how to backfill those positions quickly to avoid business interruption and significant revenue loss. Once you’re in that hole, it’s incredibly difficult to get out.
There are a number of steps organizations can take to minimize the risk of an ICE audit. First, do not attach photocopies of a worker’s documents to his or her I-9 form. When immigration comes in, the agent asks for the I-9s, and he or she will see the photocopies. If the photocopied documents don’t look authentic, you’re in trouble. All of a sudden those photocopies become evidence against you, and it’s now easier for the government to prove you’ve engaged in negligent hiring practices. When you are filling out an I-9, all you’re required to do is visually inspect the documents presented to you and attest that they appear to be authentic. Sign on the appropriate line and skip the photocopies.
Second, make sure you train your employees on how to spot forged documents. For example, authentic green cards and resident alien cards have holograms on them. Fake ones do not. Many fake social security cards don’t have the right number of pillars on either side, or they’re the wrong color blue. Knowing how to spot a fake can go a long way toward protecting your business.
Third, ensure that the employee who is charged with filling out the I-9s for your business is adequately trained on the proper way to complete the form. When I conduct HR assessments for my clients, I frequently see multiple errors on various I-9 forms. If ICE audits these forms, it will fine you $1,000 for every mistake — not every form with mistakes on it.
Common mistakes include using abbreviations, writing in the wrong color ink, omitting signatures, and not adhering to the rules regarding dates. Proper training and preventative measures in this area can save tens of thousands of dollars in fines.
Fourth, it’s important to obtain social security validation and verification through a reputable provider. E-Verify is the government’s verification service, but many businesses find it to be overly burdensome and time consuming. At the very minimum, find a reputable provider who will match the name, date of birth, and address to the given social security number.
Taking the time to do these four things will minimize your risk of an ICE audit. If all else fails and ICE does come knocking, call an immigration attorney or qualified and knowledgeable HR professional who can help you correct errors in your hiring process and put a plan into place for backfilling positions that may now be vacant.
Sherri Elliott-Yeary is the CEO of human resources consulting companies Optimance Workforce Strategies and Gen InsYght, as well as the author of “Ties to Tattoos: Turning Generational Differences into a Competitive Advantage.” She has more than 15 years of experience as a trusted adviser and human resources consultant to companies ranging from small start-ups to large international corporations. She is a Senior Professional in Human Resources and holds an Associate designation in Risk Management. Contact her at email@example.com.
Hospitals nationwide are being pressured and, in some cases, forced to adapt to changing demands in the health care industry. Rising expectations in the quality of delivering care, the cost structure of health care and a looming shortage of personnel are just a few issues hospitals are looking for solutions to. Dr. Cary Gutbezahl, president and CEO of Compass Clinical Consulting, specializes in hospital consultation. His firm helps hospitals solve these issues by improving efficiencies.
Smart Business spoke to Dr. Gutbezahl about how hospitals are streamlining their operations to combat health care issues.
What are the most pressing issues facing hospitals today?
Hospitals are facing a couple of important challenges. One is rising expectations for the processes and results of delivering care. That means things related to improving patient safety, reducing the occurrences of undesirable events and reducing hospital readmissions.
The other pressure is the cost structure of health care. The way it has been funded has generated some pretty significant overhead costs and investment in technology that have made health care costs rise to the point where they are pretty much unsustainable both for private-sector insurance as well as for public insurance.
The third challenge which is looming on the horizon is shortage of personnel. In the future, with rising demand for health care services and the aging of the existing population, there is going to be a severe imbalance between supply and demand.
How are hospitals looking to solve some of these issues?
The challenges give hospitals a number of opportunities to make some changes both in their traditional scope of operation as well as expanding their scope of operation.
One of the areas that hospitals have had incentives to work on, but many hospitals haven’t addressed is the issue of how to manage hospital care expeditiously in order to minimize the amount of time and expenses that are provided for a patient.
A number of hospitals have patients stay a number of hours in the emergency department. They are sitting in the emergency department waiting for an inpatient bed, but in the meantime, they are not getting the physician consultation and diagnostic tests that you would normally get as an inpatient. One way that hospitals can accelerate care is to make sure patients either get to a bed quickly, or that the care process begins while the patient is in the emergency department so there aren’t hours waiting for things to happen.
They also have to recognize when a patient’s care can be safely transitioned to an outpatient setting. Some hospitals are identifying and working with the physicians and nurses to say this patient can get the rest of their care as an outpatient with home health care or with outpatient rehabilitation therapies.
What is the main focus of hospitals right now?
Right now there are two things that hospitals should be focusing on and they are related. One is called throughput. That is increasing the capacity of the existing facilities, meaning both space and people, by redesigning the way patients flow through the health care delivery system so that they move more quickly.
That means people sitting in the emergency room for less time so that the existing beds in the emergency room can accommodate more patients. It means moving patients through the inpatient side quicker so the hospital doesn’t need to build additional beds in order to house people for inpatient care. If hospitals have to build more beds, then the costs are going to rise. The only way to try and keep the cost of health care down is going to be to work on these through put issues throughout the hospitals. The ORs, the inpatient beds, critical care units, emergency department, all areas of the hospital where there are backups in terms of patient flow.
The second thing is looking at how we redesign the delivering of health care services so it becomes more efficient. One technique that’s being used on the outpatient side in a number of large multispecialty medical groups is the idea of group appointments. You have a number of patients who have similar kinds of clinical problems. Instead of meeting with each of them one by one … a number of these organizations are scheduling group meetings for patients who have [the same diseases].
HOW TO REACH: Compass Clinical Consulting, (513) 241-0142 or www.compass-clinical.com
For Charles Schreiber, finding the best talent is only the tip of the human resources iceberg. At KBS Realty Advisors, that talent needs to be trained and prepared to jump directly into their new jobs.
KBS has a work force of 200, and Schreiber wants any new hires to be able to assume their full job responsibilities with 60 to 90 days of coming aboard. In that two- to three-month window, new hires need an education in the culture and structure of the real estate and investment firm, which CEO Schreiber co-founded in 1992.
Smart Business spoke with Schreiber about identifying and grooming top performers.
What are some of the key factors that you want to see in someone you employ?
An overused term is looking for the self-starter, but we are looking for people who are really thinkers. We give people a lot of responsibilities and the ability to grow in their job. So the people within KBS are problem solvers. They’re looking to improve not only their performance, but the performance of their whole team. We’re looking for leaders who not only finish their tasks by the end of the day, but sometime during the day and week, they take time and focus on how things can be improved, how things can be changed.
Another big one is integrity. That is our whole culture here. We work as a team, so we’re accountable to each other, so for example the performance in our reporting group and the fact that they’re completing their reports on a timely basis will have an impact on our reporting group. So if the accounting group is late, the reporting group is going to have trouble getting their reports out and distributed within a time schedule. They have to work evenings or weekends because the accounting group didn’t get their work done. So that is critical, the effort each group puts into their job and working as a team.
How do you identify a self-starter?
Sometimes it’s really simple. It’s something we’ve embraced and done for 20 years. All of the leaders in our company, I request that when somebody within their team comes to them with a problem, don’t bring the problem to them without bringing a recommendation along with it.
That is a fundamental step. If I have to solve the problem, I don’t need that employee. I just have to go do it myself. The positive is it requires everyone to think. The negative is that if somebody comes in with recommendations and you’re the supervisor, you really don’t want to say no. You want to encourage their ideas. So you need to manage that appropriately. So I think that it is a fundamental trait within a company like ours. Everybody at every level is solving their own problems, coming up with recommendations, and having the approvals that allow people to solve their own problems.
In the recruitment and interview process, how are you getting a feel for whether a person will be the right fit?
You have to be fairly challenging in the interview process. If I’m interviewing the person, they’re going to come in and have a key role within the company. I’ll go through at least two, if not three, meetings with them, and I’ll challenge them on their business skills. On the skills of etiquette, timeliness and just the fundamentals of being a good business person. I’ll challenge them on their dedication to their career, on their priorities, not only in their career but their life. You want people who are going to be successful not only in their business, but in their entire life. Hopefully by working with KBS, they’re going to have the tools where they can pursue personal goals. Those personal goals are really of interest to me.
How to reach: KBS Realty Advisors, (949) 417-6500 or www.kbsrealty.com
Since founding the company that is now Outdoor Hub LLC in 2007, CEO David Farbman has been in growth mode. His efforts have paid off, as the online platform for outdoor enthusiasts generated $10 million in 2010 revenue.
But growth can be a dou
ble-edged sword, providing challenges along with opportunity. Farbman has had to keep his leadership team a step ahead of growth, by structuring the organization to better react to the needs of growth.
Smart Business spoke with Farbman about how he’s maintained room to grow and how you can stay ready for growth at your business.
How has your company’s management structure positioned it for growth?
Historically, as we were starting to kind of grow the business, people were wearing multiple hats on a regular basis. As we were growing the business, we did get recapitalized in April 2010. After that, we really started to staff up and hire more experienced, specialized talent. So the weight of the management structure is set up today, it’s actually unlike anything I’ve run in the businesses in my career. We have people that are what we call a T1 and T2 responsibility.
T1 implies our leadership team, and that leadership team meets on a weekly basis with a very strong cadence that is focused on doing that every Monday, first thing before the day kicks off.
We have seven people on that leadership team, and each person is responsible for what we call T2, which is essentially their pillar of the business. It could be metrics and financials. It could be sales, it could be trafficking and ad operations, it could be new revenue, it could be content. Those people report up to me.
How does that setup help things run more efficiently?
It does two things. It creates an allegiance at the T1 level that basically says to someone on the T1 team, your first allegiance is to this leadership team, there is no ego on this leadership team, there is an ability to make decisions as a team and push things forward. It allows for us to work in a cohesive way on a regular basis, where synergistically we can take an issue to the other people on that team and get a technology perspective, get a marketing and research perspective. It allows us to be able to hash out an issue and then keep moving.
How do you foster a collaborative mindset within a team?
It has to start with the person at the top of the organization. You have to believe in a very authentic style of leadership with a lot of transparency, and you can’t believe ego is very productive for results. It does start there.
You’re looking for people that want to work toward a greater cause and put their energy toward creating something great, and not looking for self-fulfillment at each turn. At the same time, it always has to be regularly coached, and you have to have a very open table. If someone has an issue with me, they can just about tell me to ‘F-off,’ and I wouldn’t care, as long as it was moving the company forward. We try to clear issues quickly, and having that T1 level allows you to clear issues quickly.
What would you tell other business leaders about managing a high-growth company?
No. 1 is, providing you can afford to do it, you need to staff slightly ahead of the growth. You need to begin to do your all to specialize people more, so that the company becomes more scalable and areas can be molded as the company grows. You need to upgrade your systems, both from a technical level as well as a procedural level. We’re trying to do that each day. By no means are we in a perfect place, but we always have a constant desire to try and improve that.
How to reach: Outdoor Hub LLC, (248) 663-4440 or www.outdoorhubmedia.com