Inclusion of minority and women-owned companies isn’t just the right thing to do – it’s the smart thing to do to economically benefit the region.
That’s the message from the Northeast Ohio Economic Inclusion Forum Series. The series aims to engage the public, private and nonprofit sectors in creating a targeted, comprehensive economic inclusion action plan for Northeast Ohio.
“A lot of growth in the economy comes from small businesses, and minority small businesses are an important part of that fabric,” says Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland. “It is very important to our economic growth, both from a region and a country, to have every individual, every part of the workforce, fully engaged.”
The March panel for the third phase of the series, “Perspectives from the Private Sector,” discussed the role larger companies can and should play in fostering economic inclusion, and how this benefits their business.
Create a diverse staff to foster innovation
Inclusion begins internally with the hiring of a diverse workforce, says Chris Connor, chairman and CEO of Sherwin Williams. This ensures you can provide relatable service to your customer base.
“We look to hire, recruit, train and develop the leadership of our company from this broad spectrum of different folks so that we can, in fact, emulate and look like our customers,” Connor says.
A diverse staff also fosters innovation and creativity by bringing together diverse perspectives.
“Diversity of ideas is critical to better decision-making,” Pianalto says. “We made it a part of our strategic direction almost 10 years ago to make sure that we had a very diverse and inclusive organization and culture.”
To ensure an inclusive culture, inclusion must be embraced, communicated and incentivized from the top down.
“This is a topic that gets discussed in the boardroom; it’s a goal that I’m measured on by my board,” Connor says. “There are compensation and incentive goals on this topic of inclusion, so it’s on everybody’s hearts and minds. We just made this a business prerogative as opposed to a check-the-box, to-do project.”
How you can help
Although Pianalto says bank lending is on the rise, the current economic state makes it difficult for small companies to gain access to capital. That’s where larger companies can step in to help their client companies.
Paint manufacturing companies commonly support professional painting contractors by selling them the equipment and materials they need on credit. This enables the contractors to begin work, hire others and generate cash flow.
“You’re seeing more businesses step in in a very focused, strategic segment of supporting customers in providing some of that financial quota to get these things going,” Connor says. “We’ve done a lot of that for minorities, and we’ve been richly rewarded by that.”
Larger companies can also ensure smaller companies are able to do business by “unbundling” large projects, breaking it down into smaller pieces so that people have the chance to bid on types of business that they’re capable of handling.
This method was adopted in the building of Cleveland’s Horseshoe Casino, with a point scale used to evaluate potential contractors’ levels of inclusion.
“It takes a little bit more coordination on the front end, but at the back end, the rewards, the mentality, the excitement it creates within the job of people that would have never been afforded this opportunity before is immeasurable,” says Jeff Cohen, CEO and founder of Rock Cos. and vice chairman of the Cleveland Cavaliers and co-visionary of the Ohio Casino Initiative.
While this unbundling can help small companies on a local level, Warren Anderson, president and general manager of Anderson DuBose — the 17th largest African American-owned industrial services company in the U.S. — says this unbundling can hurt growing minority and women-owned companies by making a job too small.
“If you’re a small-to-medium company like mine, a small contract is too small,” he says. “But a national contract with a bundled approach across the country is too large.”
With that in mind, companies can also take another approach to inclusion by giving big contracts to prime contractors that are capable of handling the magnitude and encouraging them to partner with smaller subcontractors for local materials and labor. Cohen says such partnerships added value to potential contractors on the casino project’s inclusion evaluation scale.
Women- and minority-owned firms have an obligation to earn business through top-notch service, says Anderson.
“I compete for contracts based on superior price, service and personnel,” he says. “So to me, in terms of running my business, it’s about being as good as anybody and being attractive … for companies to award contracts to, so I’m included in the bids.”
Successful women and minority-owned firms also have an obligation to help other women- and minority-owned businesses with their growth.
“We encourage those who have been successful to turn around, reach back and lend a helping hand to those who have not been as fortunate,” Cohen says. “You need to provide those opportunities, because in many instances, that’s all it’s about — being given the opportunity to perform.”
For more information:
Watch “Rachel Talton of Synergy says economic inclusion action plan will benefit northeast Ohio”
Watch “Jodi Berg of Vitamix Corp. says inclusion promotes innovation and inspiration”
How to reach: The Northeast Ohio Economic Inclusion Forum Series, http://theciviccommons.com/issues/neo-economic-inclusion
Everyone is talking about social media. As a result, I’ve read dozens of articles on the topic to better understand what it means for business. I even have a team that manages it and sends me reports on a regular basis.
However, it wasn’t until I joined Twitter, Foursquare and Facebook myself that I began to truly understand it. When I started using these platforms for my own personal and social purposes, I began to get what the fuss was all about.
Not a spectator sport
Just like anything else, real-world experience adds more value than research alone. If you lead an organization, joining social networks gives you the opportunity to listen and respond to your employees, customers and fellow industry leaders, as well as spot trends and issues.
Don’t feel pressure to jump on Twitter, for example, and just start tweeting away. Ease into it. Follow people of interest and listen to the conversation. Watch how people use hashtags, @replies and retweets. Be yourself. And remember, it’s not supposed to be work, it’s supposed to be fun.
I would encourage you to begin as an average consumer and try not to think about it from a business perspective. Once you’re a comfortable user of a platform, the business aspect will come naturally.
Resist the ad urge
We can’t help ourselves. We read all about social media and how it can drive sales, and we feel inclined to join Facebook and blast ad copy. Resist. Try to think of social media as a public relations function rather than an advertising function.
Social media is about two-way communication and building relationships. So what’s important in a relationship? Honesty, transparency, sense of humor, listening and making people feel special. The same rules apply in social media.
As a business leader, social media provides you with the opportunity to connect one on one with your customers. Share what you have in common. Help them understand how your business fits into their lives. Let them participate in building your brand. Make a difference in their communities. Acknowledge and reward your biggest fans, and win back fans that had a bad experience.
While contests, promotions, deals and giveaways can be a lot of fun, remember there is value in building trust and loyalty through simply listening and responding on social platforms. Of course, this is just my opinion, but I say build relationships first, sell your product second.
Lead, follow and like
Whether you decide to join social media networks or not, your customers will be there talking about your brand. You can help lead the conversation, correct false information and attract new customers or you can leave that to someone else to do on your behalf. Taking a leadership position when it comes to social media will send a strong message, and your team will surely follow.
The way the world communicates is changing. Get on the bus and help lead the change.
Paul Damico is president of Atlanta-based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 430 locations nationwide. Damico has been a leader in the foodservice industry for more than 20 years with companies such as SSP America, FoodBrand LLC and Host Marriott. He can be reached at email@example.com.
Back in 2003, the telecommunications industry was going through what Timothy Jenks describes as a “downturn and compression,” as large equipment manufacturing companies — his customers — increasingly consolidated and reduced their vendor base to manage costs. The result was that many companies in the telecommunications components industry, which NeoPhotonics Corp. occupied, were being put out of business.
“As a small technology company, clinically a start-up, it was difficult to gain mind share let alone market share at these very large companies as they consolidated their own operations,” says Jenks, the chairman, president and CEO of the San Jose, Calif.-based optical components supplier with approximately 3,000 global employees.
Jenks saw that the company needed to enhance its core value proposition in a way that would resonate with this core customer group and help it win its business. After spending a year looking at M&A opportunities, he and his management team soon found their solution in Photon Technology Co. Limited, China's largest supplier of active optical components at the time.
“It was complementary technology to our core technology and with an established customer base,” Jenks says. “We had both cash and technology and they had certain products, customer base and manufacturing capability. So together we felt that we would have all of the requisite elements to be an important supplier going forward in the industry.”
By acquiring Photon in 2005, the company now had the opportunity to become a global, one-stop shop for optical components, a value proposition that would click with the needs of its customers. But Jenks now had the task of taking the two companies with different languages and different cultures on different continents and creating one new entity consisting of 1,200 employees and more than 100 customers around the world.
Before they could align everyone directionally and operationally, Jenks and his leadership knew that they needed to spend time with the employees in China to initiate a comfort level of understanding between both teams.
“In order to do that with very strong differences in language, culture and location, it took an awful lot of personal time and attention to develop mutual understanding,” Jenks says. “With mutual understanding, we could get alignment. With alignment, we could execute on the goals. With the goals being clear, we could make good progress.”
While Jenks had a number of people on his team and several from China who were bilingual, there were still communication differences and cultural differences that needed to be addressed in the new company.
“You need to be compassionate, taking the time and effort to understand our global brethren and what are issues from their point of view?” Jenks says. “Everyone is not the same but everyone is important.”
In-person communication in the preliminary stages of the merger was helpful for both leaders, who needed to establish a plan for integration. For about a year and half, Jenks travelled to China for one week or more every month to meet with direct reports and develop an approach of how to provide a clear direction to the key managers in the combined company.
“The face to face matters not just because it’s face to face, but because it allows people on both sides of the table to jointly see momentum,” he says. “If they see you once a month or once occasionally, there just isn’t much momentum.”
The benefit of being face to face with employees who are being acquired is also being able to see the realities of how people operate and manage the ins and outs of daily business. Jenks says that in retrospect he would have moved to China during this time, now that he’s seen the value of this personal time.
“Living in each other’s shoes by being together causes you to understand the issues that you’re facing not on too high of a level but much more day to day, hour to hour, the real issues that we’re facing and how can we jointly solve them,” Jenks says. “My experience is when people have the opportunity to face challenges together and find solutions together, that is what defines successful integration.”
Build alignment on new goals
This first phase isn’t about getting everyone to agree, but cultivating a comfort level and understanding between your two companies so you make decisions easier.
“We spent a lot of time and effort to understand each other, but we didn’t make it the biggest priority to gain consensus on decisions,” Jenks says. “It was to gain consensus on understanding, not consensus in decisions. Decisions had to get made and we had to move forward.”
The next step was getting the two companies to act as one global company, with one set of goals, one vision and one mission moving forward. Getting this alignment involved eliminating all of the previous goals from the individual businesses and creating one set of goals for everyone.
“The company in China wanted to operate on the global stage and the company in the U.S. wanted to be successful and deploy its technology globally,” Jenks says. “So putting those two nuanced sets of personal goals into one set of company goals was a challenge.”
After a merger, there may be a tendency for employees from either company to hold on to the old way of doing things. Where problems arise is when people become so attached to their previous goals that they don’t focus their efforts on new business growth.
“We had a company in the U.S. that was used having objectives that were local objectives, and we had a company in China that was used to having objectives that were Chinese objectives,” Jenks says.
So part of the strategy to get buy-in was to do away with any past performance goals that distracted people from the new global strategy. All financial incentives for employees in the future would be tied to global instead of local performance.
“It was to eliminate and remove all of those objectives and any references to them and replace them with goals so that people in China have to help the global result,” Jenks says. “People in the U.S. had to help the global result. Then even though they understood it, if they weren’t willing to embrace it, there wasn’t a role for them.”
Jenks and his team collaborated with the leadership in China to develop the new set of objectives.
“We actually spent a lot of personal time to write goals to be one company, not to be two companies, and to express with our managers our values that we would embrace and how we would operate,” Jenks says. “That included people from East and West in the senior most management to share ideas, share understanding, share goals and execution plans.”
Getting input from both teams is important, because it helps everyone embrace the new goals as their own, adding to the synergies in the combined company. Once your topmost leadership is aligned on the new corporate goals, you can proceed to build alignment throughout the organization.
“The key thing is that we did express a group of values to be one company and to focus on those global goals, which implicitly meant that staying on the fence was not an option,” Jenks says.
Again, talking with your people face to face to share the new strategies and goals is critical in getting everyone on the same page.
“It causes integration to happen faster, and people find energy in integration success that allows you to move to the next chapter together instead of moving to the next chapter staying individually who you used to be,” Jenks says.
Get the right people on board
Jenks knew that inevitably there were people in the U.S. operation that didn’t want to spend time working on business in China as well as people in China who preferred working for a Chinese company. There were some people who had the skills to succeed in the new environment but weren’t interested in the new direction.
“It was difficult for some people who are not necessarily comfortable living in a language that they don’t speak,” Jenks says. “Moreover, it may be uncomfortable for people who are linguistically gifted but then may have a larger burden because of their abilities.”
During a merger, you have to accept that there are people who will embrace the change and people who won’t. To an extent, the employees who won’t will self select.
“Ultimately, strong performers and people that were good at execution were strongly encouraged to come over to the one-company side of the fence,” Jenks says. “If they were unwilling to do that, they left. That was perfectly OK. If these are not the objectives that you want to work on then there’s no reason why you should work on them, but then you shouldn’t work here.”
In the course of this kind of transformation process there will likely be turnover. As long as you are very clear about the new goals and direction, then you can be fairly confident that people who aren’t excited about it probably don’t have a role in your new company anyway.
“We had to look beyond the level of turnover and say we’re operating to a larger goal and the goal was to be successful and competitive on a global basis,” Jenks says. “That was embraced by a large majority of the employees in both locations. So having that dedicated and engaged group of employees was a really important part.”
To further engage and motivate people, make it clear that with the new vision comes new opportunities for those who are willing to put in the work. That could be everything from more career opportunities, travel opportunities or selling opportunities. Jenks made sure that the Chinese company recognized it now had access to the U.S. R&D and technology and let U.S. employees know that they could enjoy larger manufacturing and a better cost structure. He also knew the added capabilities of the combined company would particularly appeal to sales people as they sought out new business.
“Sales people are always interested in a higher, broader, deeper value proposition to offer to their customers,” Jenks says. “So there was a natural affinity in terms of our customer facing efforts, meaning sales people, whether they were from East or West, suddenly had a broader group of products because they had the merger partner’s products. They had a better roadmap of what they might be able to offer in the future and they had a bigger story to promote with a customer.”
The employees who embrace change are the ones who will do what it takes to make it successful. “I think it’s been a great experience for all of the people who have stayed with the company over the last five or six years,” Jenks says.
Since the merger, the company has grown from approximately $35 million to $181 million in revenue for 2010. In 2011, it completed another acquisition to purchase San Francisco-based Santur Corp., a privately-held components manufacturer with approximately 150 employees.
“So the principles used back in 2005 and in some subsequent deals are being applied again to develop as one company moving forward and to work jointly on what our goals and objectives are,” Jenks says.
How to reach: NeoPhotonics Corp., (408) 232-9200 www.neophotonics.com
1. Gain understanding by getting face to face.
2. Build alignment around shared goals.
3. Encourage people to buy in or opt out.
The Jenks File
Chairman, president and CEO
Education: U.S. Naval Academy, B.S., Mechanical Engineering
Massachusetts Institute of Technology, S.M. Nuclear Engineering
Stanford University, Stanford, Calif., MBA
What is one part of your daily routine that you wouldn’t change?
A quiet morning moment for a cup of coffee alone with my wife
What do you to regroup on a tough day?
I like to have a brisk walk with my dog, but unfortunately most tough days don’t offer the opportunity to regroup. That’s why they are tough.
What do you like most about your job?
I like the global aspect of it. I have friends, colleagues, customers and suppliers all over the world and it really makes me feel like I live in a 21st century existence. My friends and family sometimes are astounded by the regularity in which I find myself dealing with other parts of the world, and it’s a fun thing. At the same time, realizing that what we do really makes a difference. The vast majority of the world does not yet have access to online content. There’s a lot left to do.
What’s the best business advice you’ve ever received?
Hire people you’d be willing to work for, because you may. If you’re picky who you work for and you only hire people that you’d be willing to work for, then you end up with good people.
And, build a business with good people. Good people tend to hire good people.
M&A tips for the next time around: One of the lessons that I learned is that if you’re going to spend an effort to try and merge two companies and you’re in a leadership role, the best thing you can do is move there. For example, doing a transaction with (San Francisco-based) Santur, the first thing that I did is I did take an office there.
Faced with an industry that was shrinking by nearly 40 percent, Bryan Putt and his team at American International Relocation Solutions LLC (AIReS) realized that things were about to change in the relocation services market. Due to the onset of the recession in 2008, drastic changes in the housing market and the fall of several banks and institutions, companies and employees alike became more reluctant to relocate.
With a new business approach in the company’s future, Putt, president of AIReS, a global relocation services provider employing more than 300 people and having annual revenue of $180 million, had to think of new ways to continue to grow despite a shrinking market.
“The biggest challenge was leading into 2009 and recognizing that the realities of the economy were going to have a profound impact on our business, both from the standpoint of our clients being directly affected and … the reality that a fundamental part of our business is the real estate market,” Putt says. “The devaluation in many cases of people’s property values created a situation where a lot of people who historically would have been open to a relocation for their companies have had to evaluate that with a much different perspective than they did for the 25 years leading up to that.”
Putt now had a choice to make. A common response is to prepare for survival mode and look to where cuts can be made, but Putt knew there were ways around that. Rallying his team, the decision was made to focus more on customer service and making sure clients understood the current relocation market.
Here’s how Putt focused on thriving instead of just surviving in a shrinking market.
Collaborate on your plans
Before Putt went ahead with any proposed direction for AIReS, he made sure that the plans were a collaborative process that included his senior team and had buy-in from the company.
“Our senior leadership team got together in 2008 and looking forward we said, ‘OK, all the signs are that it could be really bad. What do we want to do? How do we want to deal with this?’” he says. “It really was a function of everybody on that team having a strong belief in what we do. There was a consistency in terms of our vision and where we want to go and how we want to get there.”
That type of understanding within the organization is something that took years to create, but it has been one of the biggest factors to the company’s success.
“Building a culture that’s collaborative to begin with is paramount,” Putt says. “I’m one guy in the organization and honestly probably the least important individual in the company on a day-to-day basis. I’m very fortunate to be surrounded by really awesome people … who believe in the mission. They get it. They believe in what they’re doing, what we’re doing and they’re turned on by it. You’ve got to build a culture that is wrapped around that kind of singular focus of who you are, what you are and is a collaborative one.”
Having the ability to leverage that collaboration will help eliminate hasty reactions and will make people more comfortable about where your business is going.
“We go through a strategic planning process and not having a knee-jerk reaction is built on people feeling comfortable to put their ideas on the table within that group and to validate the thinking behind it,” he says. “Challenge each other in terms of the assumptions that are being put forward and the ideas, but always at the underlying level of that is what’s best for your customer. Focus on how you take care of the client and how you best service your customers because that’s what leads to profitability. For too many organizations the first thing they think about is the P&L. They focus on profit — dollars and cents, return on investment. The first layer of focus has to be on the customer. On the heels of that, profitability is going to follow.”
Changes in direction are oftentimes met with opposition. How a leader goes about making those decisions plays a big role in creating buy-in.
“If you happen to be the owner of a business and you get the 51 percent call and make the final shot, you can always walk in and provide a mandate or a dictate that says we’re going this way,” Putt says. “The problem is the minute you do that if you truly have people opposed, they’re not going to be pulling in the same direction as you. At best they walk out of the room kind of indifferent. They may not openly work against the agenda, but they’re certainly not going to be 100 percent in it trying to help you go in the right direction.”
Investing in a collaborative process and getting consensus on where you’re going helps eliminate doubt and puts employees at ease. That collaboration within AIReS led to the decision to retain employees and focus more on customer needs.
“It boils down to that point where everybody on the team and everybody in the room can be into that process and at least say, ‘Maybe that’s not exactly how I’d do it, but I buy in and I’m good to go and I’m with you all the way.’” Putt says. “Building that consensus is absolutely critical. Invest the time. If people are pulling against it, if they’re fighting where you think you need to go, invest the time in understanding what their concerns are and why. Try to understand how you can address those concerns, get them onboard and get that consensus built. It’s a big investment in time, but it’s well worth it.”
Decide your direction
When the signs that the relocation market would shrink began to appear, companies approached the situation in different ways. Putt was set on differentiating the business.
“We said we were going to retain our talent and we’re not laying people off,” he says. “Our knowledge capital is the value that we bring. We made a conscious decision that rather than try to hunker down and cut and save our way to profitability, we opted to aggressively sell our way through the recession. Our approach was somewhat unconventional in comparison to certainly what we saw others in our marketplace doing and that was looking at different ways to cut their costs and try to save their way into a positive financial position.”
Before making these types of decisions in your company’s future, you have to first understand your market position and value proposition.
“Anybody sitting in that position and saying, ‘OK, I think we’re going to have a declining market; we have all these things going on. How are we going to deal with it?’” he says. “You’ve got to have a pretty strong understanding of your value proposition and how to leverage that. It’s having an objective, realistic perspective of where you sit in the market with value proposition in comparison with the client base and the competition that’s sitting out there.
“If you are a commodity-type provider and the market is just shrinking in general and you can’t bring a new value proposition, it may not be the right decision to retain all your staff and continue to invest that way. You may just have to ride the wave because of where you’re positioned in the marketplace.”
When times become tough and you have to change course, try to avoid instinctively looking to make cuts within your organization as a first reaction.
“I wouldn’t tell everybody to continue to invest, plow into it, and sell your way through if all of the markers are telling you it’s going to go the other way no matter what,” Putt says. “If you do have a strong culture organizationally and if you focus on your people, the first approach from my perspective is not to cut. Try to find that yes. Try to figure out how to retain your knowledge capital.”
A lot of times there is that kneejerk reaction to tighten the belt. However, there is a time and place for doing that.
“Certainly assessing your cost structures, cutting out unnecessary expense and limiting the expenditures is all part of any good organization even in best of times,” he says. “That knee-jerk reaction of ‘we’ve got to cut’ is amazing because a lot of times the first thing people want to cut is in the sales force, but they’re the folks that are out there in market bringing you business. The idea that you can just hunker down and spend a year or 18 months or whatever and just protect what you’ve got — I don’t subscribe to that theory.
“If you’re not actively working to sell and grow, you’re dying and shrinking. There’s no such thing as ‘just stay level and hunker down.’ If you’re not actively out prospecting, the reality is some of your existing wells are going to dry up. Even in the worst of times regardless of the industry you’re in, cutting the sales force to me would literally be one of the very last steps I would want to take. There are other avenues to look to before you start cutting out the hunters in your organization that are going to bring the opportunities in the front door.”
In the case of AIReS, the customer is the company’s focus. Putt made certain not to eliminate the critical things that would make the new direction successful.
“If you have a focus on the customer as your primary reason for existing, generally the first reaction isn’t let’s get rid of the things that make the customers happy,” he says. “Building that into the organizational DNA is probably the most important thing and that’s a long-term process. You don’t build a team or react to scenarios when the bad times come along. That’s a process that during the best of times you’re focused on building an organization that thinks about what’s coming down stream. You’ve got to be cycling through that process all the time.
“When you’re staring into an inevitable negative situation you have to take the right steps. You’ve got to have the managerial courage to do it, but it’s figuring out the priorities of when and where and not doing the easy things because it looks good for a quarter.”
Meet customer needs
Now that Putt had decided on a direction for AIReS and got buy-in from his company, he had to understand where the company could better meet customer needs.
“One of the big areas of concern is the real estate market,” Putt says. “You want to move your staff members and their families around. Probably the most valuable asset they’ll ever own in their lives is their home, and the market is plunging precipitously depending on where you’re sitting.
“The home that that transferee owns that was worth a half a million dollars a year ago is suddenly worth $350,000. It’s pretty easy to say, ‘Aha, this is a great area of concern for our clients. How can we help them with this? How can we add value in the process and support them through this?’ We can’t go in and suddenly make that house worth $150,000 more.
“What you can do is you can add value to your selling process of helping your clients and helping the individual transferee come to grips with the realities of the market.”
Since AIReS’ clients’ livelihoods are at stake when they decide to relocate, the company decided to focus on helping them understand the current market.
“A big part of what we had to do was to go through a coaching process with each of the transferees to help them get a truly objective perspective of what the value of their home is,” Putt says. “You need to move through your employer and you need to sell your house. If you’re not realistic about what the value of your home is in today’s market, you’re not going to be able to sell your home and you’re going to go through a process that’s a lot more painful.
“So it was helping people get that realistic perspective and investing the time with the transferees to help them understand the market so they can make good knowledgeable decisions that helps them and it helps their employer.”
AIReS used its knowledge capital to the max in order to provide its clients with better service and understanding than before.
“It’s spending that time and being a problem solver for them as much as being simply a service provider and really leveraging that market knowledge we have of dealing with 400 or 500 corporate clients,” Putt says. “It becomes a process of evaluating what they’re doing and sharing good solid strategic business intelligence with them to help them obtain their goals.”
To help clients achieve their goals, the process was simple.
“You have to ask,” he says. “Go to your market and ask the questions and understand what their pain points are and where they’re seeing things not generating the kind of results they want to generate and then evaluate how you can help in that respect. The term ‘think outside the box’ is overused at this point, but come up with innovative alternatives to help clients overcome what’s occurring in their market. Generally, there are alternative ways to tackle a problem or concern that is going to be more palatable than just going down the path the way it currently is.”
The new direction of AIReS helped the company overcome the potential trouble of a shrinking market.
“We saw good returns on our investment even in the face of a really difficult year, and 2010 and 2011 have continued with even more healthy growth,” Putt says. “Our overall market shrunk somewhere between 30 and 40 percent, yet we were able to maintain an 11 percent growth rate. We have to continue to focus on building our team, recruiting and retaining great people who buy in to our culture and get it.
“We also have to continue to focus on the core services we deliver … and continue to automate and streamline and find efficiencies of our underlying activities so we can focus more time on the client.”
HOW TO REACH: American International Relocation Solutions LLC, (412) 788-0461 or www.AIReS.com
- Form a collaborative environment to create a unified business.
- Avoid kneejerk decisions and make customers your focus.
- Find unmet needs of customers to differentiate your business from competition.
The Putt File
Born: Indiana, Pa.
Education: Attended Indiana University of Pennsylvania and studied information systems.
What was your very first job, and what did you take away from that?
I was an office cleaner. That taught me that you have to focus on what you’re doing. Sometimes what you’re doing isn’t fun. Sometimes there are days when what you do can be a dirty job. If you focus on doing it well and you take care of the end user, it works, it pays off and there’s value in it.
What is the best business advice you’ve ever received?
Take care of the customer, and if you do that, profitability will follow. That was an epiphany for me. If you don’t focus on the customer, none of the numbers will matter because they won’t keep coming back. That was a defining moment for me in terms of defining my perspective of business.
What advice do you give others?
One of the things I tell people during orientation is you’ve got to have passion about what you do. Life is too short to just show up for a paycheck. You’ve got to do something in your life that you can connect to.
What geographies are you seeing the most relocation in?
It’s global. Within the U.S. there are key markets where you see a lot of corporate presence so you see a lot of relocation tied into those markets. On the international side, there is a heavy concentration and interest in the BRIC countries. Brazil, in comparison to what it used to be, is heavy. You wouldn’t compare it in the same way to China, but as a representative percentage against what they used to be, Brazil is a hot spot. China is huge right now because Asia is booming. The Chinese government is doing a pretty good job of setting a regulatory and investment environment where companies are comfortable. Then there are the traditional markets such as the U.K. and Singapore.
Kevin Reddy has a reason to like social media. It’s because of those data points that the chairman, president and CEO of Noodles & Co., a fast-casual lunch and dinner restaurant chain, decided he had to bring the chain to Pittsburgh.
The Colorado-based company has more than 5,200 employees and more than 280 restaurants in 22 states. Two of its newest locations are Market Square and Oakland.
“One of the wonderful things about social media is the amount of data points and guest feedback that you get,” Reddy says. “That’s one of the reasons why we decided we needed to get to Pittsburgh because we’ve gotten quite a few requests over the years about opening in Pittsburgh. It got to the point where we couldn’t ignore it; we’ve got to go.”
In an industry that has seen a decline in restaurants for the past three years, Noodles & Co. has been seeing double-digit growth.
Smart Business spoke to Reddy about what makes the Noodles concept so successful.
Execute growth plans.
For any business to grow successfully today, you’ve got to be one of the better, stronger performers within your niche and within your segment. One thing that we’ve been successful at is we have a pretty simple, focused philosophy on creating a dining experience that we’re really proud of and it’s based on three things; really good food, served by genuine, nice people, in a friendly, welcoming place. That’s what we’ve been doing over the past five years and we just keep getting better and better and better at it.
It starts with being very objective and critical about what you’re currently doing well today and what you’re not doing well today and really understanding how the guests view the brand. It’s one thing if a management team believes something but if the guests believe something else, you’re never going to create that connection that you need to. You have to be very objective and truly understand your guest’s perception of your brand. You’ve got to be very honest and objective of what your system is capable of executing and how well they’re doing it. Once you assess that you can put the right strategy together and form the whole discipline around identifying what’s important, being rigorous in how you innovate, and having a slightly unreasonable expectation in execution.
Grow your infrastructure.
Infrastructure for growth starts with understanding the right risk tolerance level. It’s about funding, it’s about capital, it’s about expectations around growth and you’ve got to believe in your own brand to grow. For anyone to grow, you first have to look at real estate. You really need to understand who your guest is, what influences how far they’re willing to travel and how frequently they come. You’ve got to be able to define those areas that make up the key decision criteria. Understand those big blocks of demographics and how they influence sales within the range of your own concept. Then it’s how do you replicate it. When you’re growing fast, you have to have the analytical model down pretty tight, and then you’ve got to have the discipline to stay true to your site screen.
Enter new markets.
Every year we add two to three brand-new markets. We pick those based on what we can get on data. We try to find out which cities and states are thriving and growing and which are struggling. We picked Pittsburgh because Pittsburgh has done a phenomenal job in staying relevant and transitioning its economy.
You have to really understand the elements of your business and which ones are critical to replicating success because not all things are important equally. You have to look at what’s on the consumer side, on the operation side and then the real estate side. You have to willing to build those systems — the training programs and decision logic before you start growing. You’re always going to modify and get better, but it gets really difficult to build the ship as you’re sailing it and you don’t want to make fatal mistakes early on. What’s critical to the right real estate? How are you going to merchandise and market the guests? How are you going to make the brand relevant and make people aware of it so they’re going to try you? You can’t just chase a number for growth. You have to pay attention to every one of those details because they all have a chance to dilute your ultimate success.
HOW TO REACH: Noodles & Co., (412) 562-2191 or www.noodles.com
Vlad Shmunis built his company the old-fashioned way, one customer at a time. Starting with zero users, he’s grown RingCentral Inc. to deliver cloud-based business phone system solutions to more than 200,000 customers across three continents and employs approximately 500 people.
“It’s very clear that there is an amazing amount of demand,” says Shmunis, the founder and CEO of the San Mateo-based company. “It was at the right time, right place. So it’s just trying to hit it on all cylinders.”
To stay ahead of the competition in the business communications industry, Shmunis now looks to invest in areas that grow the business with new customers while also meeting the needs of current ones.
Smart Business spoke with Shmunis about how he invests in RingCentral’s long-term growth.
Invest in top performers.
As we’re growing, the focus is more the sense of the overall vision and culture understanding and making sure that everybody is on the same page. As far as the people we want to hire, how do we incentivize them? How do we keep them excited about what they do?
This is a constant quest. We try to have an A-team in every respect. We have well-accomplished people in the key positions. So that’s taking a lot of my time now and probably will continue for the foreseeable future as the company grows.
The slowing down of the economy did not slow our growth down and did not slow our customers’. The people that work for us have options. So how do we keep them here and productive?
Invest in infrastructure.
People understand that emphasis is on continuing to delight existing customers. So we’re not going to do anything that would jeopardize their well-being and in any way destabilize the service. We do invest a lot into the infrastructure, so we’re definitely putting our money where our mouth is. We’re running our own cloud. We invest a lot in the support systems — software and people most importantly — making sure that you have 24/7 coverage … that people will be woken up in the middle of the night whenever something serious happens.
These are people trusting us with their businesses, and if their phone line goes dead, it’s not a good thing. If things do happen, which is hopefully not a very common occurrence at this point, we have procedures that are well-defined.
Time of response is extremely important. So if there’s an outage, we will immediately post updates to the website to keep them up to speed. We are active in social media so we use Twitter. We use Facebook, our own website, anything we can to make sure that we’re not asleep at the wheel and that we’re still here and the service will be brought up as soon as humanly possible.
Invest in quality.
We make it easy for people to refer people to the service. But really the most important thing is that we’ve invested heavily into a product that will be liked. You can’t pay a person enough to have them recommend something that the person doesn’t like. The product speaks for itself. So we just make sure that it does what it’s supposed to. It does it well. It does it reliably, which is immensely important for our customer base. The rest takes care of itself.
The general position is saying, ‘Look, while we’d really to grow and take over the world and have tens of millions of customers, none of that is going to happen unless we keep our existing customers happy.’ One positive reference may bring you another lead. One negative reference can lose you 10 leads, if not more. Just continue the emphasis on quality of service.
Invest in your vision.
We’re not trying to veer out from our main task, and main task is enterprise-level communications to small businesses. We’re not trying to bring them additional services. We’re not trying to be a generic cloud platform. We’re not trying to become a broadband provider or call center operator or any of those things. Many of our competitors might be going into those tangents under the belief that there is low-hanging fruit there, and maybe there is. But I believe in focusing.
It’s fairly rare to find a world-class football player who is also a world-class baseball player. People have tried. Most of them did not succeed at the other sport after owning one sport. I feel the same thing here. If you want to be really, really good at football, play football. If you want to be really, really good at business communications, do business communications. We’re at the size where if we are to retain our world championship status, we need to work really hard.
How to reach: RingCentral Inc., (888) 528-7464 or www.ringcentral.com
This season for corporate leaders is unlike any before. The Internet has accelerated everything, internationalized the marketplace and propelled companies large and small into national and international arenas with their products and services. There are unprecedented opportunities to study, live, and work overseas. The number of successful new business startups is at an all-time high. It’s an incredible time, really, vastly different from any the business world has ever known.
So, why am I often hearing this refrain —“It’s just not as much fun anymore”— especially from CEOs and their direct reports?
There are reasons aplenty: increased governance and regulatory agency oversight, more regulations, heightened scrutiny, documentation, audits, checks, and double-checks. There are outside advisors to ensure we don’t make mistakes, because inadvertently doing the wrong thing can be costly, litigious and damaging to our reputation. A mistake or even a rumor can ruin a brand and end careers at lightning speed.
Systems to protect us from doing the wrong thing add cost, administrative burden and nonvalue-added work. Lawyers, lawyers and more lawyers are needed. And amid all of this “more” is the fact that most corporate CEOs are running leaner and doing more with less.
So, no surprise to hear from all levels —“It’s just not as much fun anymore.”
But every challenge is an opportunity in disguise. If ever there were a time for outstanding leaders — either seasoned veterans or those on their way up — to make their mark, it is now. Companies can’t hire enough high-performance can-do leaders who bring energy, optimism and a flexible work style to the workplace. Companies are discovering the need for leaders who sign on to personal accountability and who can inspire.
Providing a compelling vision and an engaging work environment is more than the right thing to do — it’s crucial to help offset the unavoidable “un-fun” parts of today’s work that so many live with daily.
So, what does such leadership that is personally accountable and truly inspiring really look like? Our own benchmarking might surprise you. Three qualities emerged above others in our research on what employees want from leaders today:
- Leaders who will hold employees accountable — willing to have the tough discussions when needed, while being generous with praise and recognition when it is deserved. They want to keep score, know the score and have the chance to share in the upside benefits that come with high performance.
- Leaders who are open, listen and consider innovative ways of getting the work done — the emerging workforce is very tech-savvy and can see a shorter distance between two points than their bosses can. Employees want leaders who tackle reality head-on, reinvent where necessary, and commit to growth and innovation even when it requires significant change in “how we have done things in the past.”
- Leaders who provide stretch opportunities — employees want the chance to prove themselves and the current business challenges, by their very nature, will afford plenty of opportunity to separate the wheat from the chaff. Employees don’t want to hear about the ceiling; they want to be given challenging work along with the mentoring and feedback to realize success.
Companies that succeed in these challenging yet exciting times have leaders who are sensitive to valuing and inspiring their work force and balancing the “un-fun” parts of work with workplace challenge and strong performance management. These leaders recognize and engage differently — because they know the role they play in offsetting the natural challenges the company or industry may be facing. They engage in the right leadership behaviors that are under their control, because they know it matters.
Are you that leader?
Leslie W. Braksick, Ph.D., MPH is co-founder of CLG Inc. (www.clg.com), co-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 ensure they help executives use their leadership to unlock performance and unleash profits, especially during challenging times. Reach her at (412) 269-7240 or firstname.lastname@example.org.
Before you read this today, you read your e-mail. You’re always reading your e-mail. E-mail is Facebook for grownups: America’s current favorite distraction from work — corporate America’s No. 1 de-focuser.
I have teenagers. If you have teenagers, then you too have heard someone explain why it is important to have a Facebook page open while doing homework. The rationale is that some of the other kids have the same class and they are talking about the assignment. But we all know that even if the chemistry homework got mentioned, the kid isn’t using Facebook as some sort of electronically enabled chemistry symposium. Facebook is distracting more kids from doing their homework than it is facilitating it.
The same thing is true about your e-mail and your work. E-mail can facilitate the exchange of information and documents — no doubt about it. But it isn’t without its costs when you continually check and re-check it. E-mail has become our informational slot machine. Each time you pull the lever — that is each time you check the inbox — you might find something rewarding there. But nine times of out 10 it’s just junk or very low priority information, for example, the date next month that they're testing your building’s fire alarm system. Yet even with the rewards to checking e-mail so terribly low, we continue to distract ourselves with it.
The key to success in baseball is to avoid outs. As long as your team makes less than three outs, you remain at bat and in the position to scores runs. If you make no outs forever, you can score runs forever. That would make for a very long game, but still one that you would certainly win.
The key to success in good thinking is to avoid changing subjects. In other words, if you can stay focused on one idea or problem until it is fully developed or solved, you’ll find many more insights and produce much higher quality work than if you switch your attention to and from the main idea or problem. How many times have you found yourself, in mid-conversation, asking aloud, “What was it I was saying?” or confessing, “I just lost my train of thought.” Keeping our minds focused on a single point is so precarious we can lose the point even while we are talking about it.
No meaningful accomplishment I know of was completed in the first pass. Great writing always involves many rewrites. Great marketing ideas evolve through iterations. Important laws are drafted and re-drafted countless times before achieving a final form. All thinking activities require that someone hold a problem or idea in mind and work with it for an extended time.
Scientists are acknowledged to be some of our best thinkers. The world is full of interesting scientific problems and curiosities, however, most scientists cannot think in a serious way about more than one or two areas at a time. That is why a scientist will sometimes shoo away a colleague that proposes an interesting new problem.
Again, the idea is that you cannot allow yourself to divide your attention among multiple areas if you hope to make a meaningful contribution in any one of them. Our minds don’t perform any differently when working on business or organizational issues. With work, family, and personal issues clamoring for our attention, the odds of focusing are already stacked against us. We are awash in the noise of all the people and projects that want our attention. Into that mix come the enticements of advertisers and other pitches designed to catch our attention. Then comes e-mail and its constant promise to relieve us from the hard and productive work of focused thinking.
Increased focus leads to better work productivity and in the longer run, to better career opportunities and better jobs. Focus begins with and depends upon the elimination of distraction.
If you want a raise, turn off your e-mail.
Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. Reach him at JerryMcLaughlin@branders.com.
To follow the trends in the market, Marc Blumenthal decided that his company needed to broaden its product and service offering for customers. While it was easy to make this decision from an organizational standpoint, the real challenge was moving this idea from thought to reality.
“Everything tends to have a ripple effect,” says Blumenthal, the owner and CEO of Tampa-based technology services firm Intelladon. “Every little decision that gets made, I have to get a few dozen people to change the way they do things a bit.”
By implementing new ideas to drive growth, Blumenthal has led Intelladon’s expansion from a handful of employees into a 40-person company.
Smart Business spoke with Blumenthal about how he floats new ideas to take hold in the organization.
Build critical mass.
Usually I’ll bring an idea through some level of gestation. I tend to incubate things first a little bit from the team as a whole until I get some critical mass around the idea and some validation.
I might talk to some of our customers. I might talk to some fellow CEOs. I have a whole lot of people that over the last 25 years I’ve gotten to know and I can run things by.
Then I bring the team in. The benefit is that I don’t disrupt the team on every idea that ever comes up, because there are many more ideas that get generated that never even get evaluated and still fewer that actually get implemented. The penalty I pay is that I have to work backward to catch them up when an idea has reached critical mass and it’s time for them to get involved. But if I got them involved in every idea that came up, they would never have time to do their jobs.
Involve your leaders.
I usually will meet with the person who has the greatest knowledge of subject matter expertise on that topic and vet a few things with them along the way. Usually one member of the leadership team has a little more experience in the area I might be working on. I sit down with them over lunch or coffee and brainstorm a little bit, and say, ‘Well, what would you think if …?’ If the feedback is positive I will take it to my COO, who is really the guy that runs the company on a day-to-day basis. His name is also Mark, but I call him the anti-Marc. He’s the opposite of me. I pull him out of his comfort zone and he pulls me back. In the end, we end up in a good place between the two of us.
Present ideas with a purpose.
My approach has been for every 10 ideas that I have, I may only present two or three, and only one may make a lot of sense. Don’t present all of your ideas, because people have a tendency to think that all of your ideas are supposed to be run with. Ideas need baking. In the early days of the previous company, I used to throw out all these ideas and we’d have a brainstorming session with the leadership team. Then I’d come in the next day and a couple of people started working on some of them. I’m like, ‘What are you doing? That was just an idea.’ You have to be careful about discerning between what ideas are and what you are actually asking for. So I try to be very careful about what I put forth and when I put it forth.
Help people to run with it.
It’s really important to give the team the opportunity to change, refine and make the decisions to make it their own, what gets changed and what doesn’t. At that point, you can step away from it and it’s no longer your idea, it’s the company’s. It’s the team’s. Once that happens, you are almost assured of success.
I try and pull the team along a little bit. I try to be a little bit disruptive, but not too disruptive. I like to be the sand in the oyster. So a pearl forms because I’m rubbing up against them, pushing them a little bit. We end up being a little bit better, growing a little bit faster, trying a few new things that might not otherwise get done or get tried if I wasn’t pushing and pulling a little bit.
Part of that is I’ve learned that if you give the team the power to make great decisions, they elevate to that in most cases and they actually do a better job than I might do by infusing myself in a lot of decisions.
How to reach: Intelladon, (813) 814-2345 or www.intelladon.com
When Ken Kemerer looks at the 80 percent revenue growth SilMix Ohio has achieved since 2001 when it was purchased by Wacker Chemical Corp., he gives a lot of credit to getting involved in industry associations.
Not that it was the only factor ? a rebranding effort three years ago was also part of the mix ? but being an active member of industry groups was a must.
“That’s where the networking is huge,” says Kemerer, director of SilMix Ohio, a manufacturer of custom silicone compounds. “We have added 50 customers since 2009, and we truly believe this branding and networking has resulted in the new customers.”
To get going with industry group networking, you need to research the organizations through universities, libraries or the Internet.
“In the rubber industry for instance, the American Chemical Society is an umbrella group that has a rubber division and a subset for regional and local groups,” Kemerer says. “You want to support financially and technically through manpower and participation all those groups. We support basically all those groups in North America now.”
In terms of support, it means more than paying membership fees.
“You can sponsor their websites, sponsor their fundraising, their golf outings and donate to their scholarship funds,” he says. “The regional groups have technical meetings. You can give technical presentations at their meetings. The technical service is important because other companies may not have an expert on site and you can provide that technical side of the industry.”
The fact that you are at a regional conference giving a presentation and answering questions about your specialty goes far in establishing your brand.
“It’s all about the networking in getting the name out, so that if people are not familiar with your specialty, and they have questions, yours will be the first name they think of,” Kemerer says.
One thing that obviously helps the initiative is encouragement from company ownership.
“Our owner is a corporate citizen, which means we have a responsibility to the industry,” he says.
This attitude should underlie your involvement in the industry groups ? you are not just giving a presentation as a sales pitch for your company.
“The industry groups had been the only place to get knowledge unless you hired somebody who had been trained by somebody else,” Kemerer says. “As the Internet has come along, and online training, they have changed, so the industry groups are really providing networking opportunities on a high level. It’s almost more of an awareness than technical training. These opportunities are out there.”
With your interaction in the industry groups, you are advancing your knowledge throughout the sector.
“There are not that many technical experts out there if you are in a niche,” he says. “Yes, it’s self-serving when you present, you may get your name known as somebody who has the answers, but it is not just about that. It’s also about corporate citizenship.
“There are many opportunities to present new and innovative things if you can in particular areas such as the medical field. That’s on the cutting edge as is helping customers in the industry become aware of new ways to do things or new developments.”
One other fact to keep in mind while attending or presenting at a conference is that your competition may be present, and while it is wise to guard what may be trade secrets, with care, you can still deliver an effective presentation. Don’t use it as a soapbox to show your differentiation.
“We do see competitors, but we see them more on a regional level,” Kemerer says. “We all have the same general purpose products. Some competitors may also be your customers ? so you want to keep good relationships, a good working knowledge and make sure you don’t cross any of them.”
How to reach: SilMix Ohio, a division of Wacker Chemical Corp., (330) 628-5017 or www.wacker.com/silmix
Formula for rebranding
If your company can’t decide where your rebranding should start, do what Ken Kemerer did at SilMix Ohio: look to your “Pillars of Success.”
“We identified our ‘Pillars of Success,’ that’s what we call them ? our customer service, our technical service and our flexibility, and we made them our focus,” says, Kemerer, director of the custom silicone compound manufacturer.
With that simplified mission statement, it gives you a basis to build a branding and marketing effort that will represent your company well.
“We built three different advertising ? let's say modules ? based on those,” he says.
“Identify your pillars of success, and then customize your advertising both visually and verbally along those lines so you can publish it in different media ? magazine, newsletter and website. Have a variety of pictures, so they don't get stale. Use text that describes each pillar of success.”
Then to help support the industry groups, use the same collateral to expand your brand to that outlet as well.
“It worked out real well for us for the past three years, and now it is a good time to have a new angle and still build off the same things ? and more as video opens new opportunities,” Kemerer says.