Your own approach to the work that your company does transcends all aspects of your business. It sets the tone for pace, execution, employee engagement and results. By its example, top management must establish the culture of work on which excellence, and thus company success, depend.
But as I consult with companies — small, medium or large — I’m continually amazed at how work is getting done. What’s lacking in these businesses is a culture that clearly defines excellence and that values diligence, timeliness, efficiency and, as you’ll read in the case study presented here, honesty.
Absent these shared values, the answers to problems become those that a select group wants and not fact-driven solutions. Projects take on a life of their own, dragging on for inordinate periods and overrunning budget because goals, scope and deliverables aren’t defined. Time and resources are wasted on misguided efforts and activities that don’t support the company direction or mission. Employees then become frustrated by a process that makes it impossible for them to contribute their skills, talents and energies to a successful outcome.
How can a CEO turn this destructive culture around? An important first step is to understand the difference between challenging and communicating - a critical distinction that impacts how work gets done.
When you challenge a team, you risk directing the outcome to a narrow set of predefined options or to an impossible goal. For example, hitting a sales target that isn’t supported by market conditions. Communicating, by contrast, calls for setting the overall tone and parameters and creating an environment in which broad, even unforeseen options, can be critically explored and high achievements can blossom. This was one invaluable lesson that a CEO who called on me for advice learned.
When the CEO engaged me, his company’s sales targets and new product launches were consistently falling short of expectations. He wanted to know, “Why isn’t the sales team working effectively to launch new products, maintain current accounts and expand our customer base?”
In each of the three previous years, the company’s management had assembled members of the sales and marketing teams to explore how to achieve sales growth and position new products. In these meetings, the sales team had described the competitive challenges it faced in the marketplace, including effectively demonstrating the value of the company’s products to customers. Sales also had consistently reported that the margins distributors were capturing were not competitive.
But marketing, just as consistently, had responded that its research indicated high end-user satisfaction and high repurchase marks even at higher prices, and so, marketing had continued to raise prices. Management and marketing together had concluded that the sales team’s inability to position the products was the reason for declining sales.
As it turned out, the CEO’s challenge to grow sales had spawned a dynamic that had produced just the opposite. Determined to rise to the CEO’s challenge, the management and marketing teams had ignored the views of the sales team as they focused determinedly on raising prices and setting high expectations for sales. Unable to gain support at the distribution level, the sales team continued to fall short of goals as sales experienced even sharper declines.
Although he’d heard the arguments of both sales and marketing, the CEO believed he should continue to challenge his teams, assuming that they would present the best solution. As it turned out, however, marketing had not just discounted the views of the sales team but had also skewed its research rather than confront the CEO by questioning his challenge. So the CEO learned the importance of communicating rather than challenging. But he did so at a dear price for his company’s sales figures, his trust in the marketing team and his sales and marketing teams’ ability to work collaboratively and effectively.
Does your company lack a culture of work? If it does, what price are you paying?
Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. He can be reached at (314) 825-9525 or firstname.lastname@example.org.
If there is one thing running a business has taught me about being a leader, it is that you have to know when to step back and allow your company to run without constant meddling. Everyone has a story about that one manager who would check in every 30 minutes to make sure everyone was “on task” or the executive who seemed to have lost any human compassion toward people who weren’t sitting around a large, wooden table during a meeting.
Back in April, I was looking to hire a new salesperson to shore up numbers down on the floor. I had an interview in the afternoon right after my son’s baseball game and so I rush into the office in a baseball cap and jeans to meet a potential hire. I see a young woman, fresh out of college, in a pencil skirt, pinstriped blazer and new pumps.
She introduced herself, her name was Heather, and we talked about the position she was interviewing for and her previous experience.
Heather was a writer by trade and had been working for a small ad agency, but she said she just couldn’t handle it anymore. I couldn’t help but laugh as she described her bosses; two nasty egomaniacs that demanded employees beg for their office’s bathroom key and would pump the most horrible music out of the office speakers. It was a sad story, truly, but I just couldn’t believe that people like this existed. They sounded like fairytale trolls.
Personally, I’ve forged some of my strongest employee relationships simply by sitting back and letting them do what they know best. Part of this is really about trusting yourself to make the right decision. If you choose to hire a slacker, then you either have to hound them to make sure they work or fire them. I am running a successful business, so I know I’ve made more good choices than bad ones. If you’re in the same position with your business, chances are you’ve made quite a few good decisions as well.
Part of that success, at least in my case, was making sure I act as more of a guiding force than a totalitarian dictator. After putting in the amount of training that a new employee requires, the last thing I want is for them to run off because of something like a bathroom key.
Of course, that is an extreme example. But I do know other business owners who go home ripping out their hair because their employees aren’t following the strict guidelines they set out. Micromanagement rarely works. It just puts undue pressure on everyone involved.
I’m already running in and out of the office, meeting with aspiring entrepreneurs and trying to spread the word about my business. If I had to sit on the floor and coach people in sales as well, I’d lose my mind.
Heather, by the way, didn’t get the sales job. I made her head of our new social media department, a position she was much better suited for. I trusted my instincts, stepped back and let her blaze her own path in the office and I couldn’t be happier with my decision. So my sagely advice is to remember to not let your leadership position go to your head. Do what you do best. Run your business and give your employees the space necessary to make you proud.
Deborah Sweeney is CEO of MyCorporation Business Services Inc. She is an advocate for protecting personal and business assets for all consumers. With her extensive experience in the field of corporate and intellectual property law, Sweeney can provide insightful commentary on the benefits and barriers to incorporation, as well as who should consider incorporation and trademark registration. Sweeney received her juris doctorate and MBA degrees from Pepperdine University and is a member of the American Bar Association. She also serves on the Board of Regents at California Lutheran University. For more information, go to www.mycorporation.com
Dana Roberts could not place all the blame for his company’s problems on the recession. As the end of 2009 drew near, C.W. Driver had a few issues of its own that it needed to work out if it was going to remain a leader in the construction industry.
“There were projects out there, but we kept missing them,” says Roberts, the $500 million company’s president and CEO. “We got wind of the projects when it was too late. We were way behind the power curve from the standpoint of our contacts in the industry. We just needed more people out there knocking on more doors and being more aggressive to get the information about what’s coming out.”
Roberts’ hope had been that 2010 would serve as a springboard to better business growth in 2011. But he began to understand that even if things had worked out that way and the recession had ended in 2010, his company still needed to get more focused on what it was doing in order to achieve that growth.
“We want to be able to look at 10 projects and pick out three and say, ‘OK, we’re going to pinpoint this one, this one and this one,’” Roberts says. “We didn’t have that information. The reason we didn’t have it was our whole business development group wasn’t organized in such a way to do that.”
It was a reality that led him to make a risky decision.
“In a recession era, most businessmen say, ‘OK, we need to start cutting overhead,’” Roberts says. “We did just the opposite. We expanded our overhead and we looked at it as an investment in the future.”
Roberts wanted to get more people involved and engaged in helping the company grow. He felt the move to make significant investments, despite the recession, would demonstrate his commitment to the task.
“How do we keep our people motivated?” Roberts says. “How do we keep our people, our most important asset, well engaged? It’s by trying to do new things and trying to make things happen, not waiting for the economy and our market area to come around.”
Get to your best ideas
Roberts set out to use the vast and relatively untapped knowledge base of his employees and use it as a resource to identify those opportunities they were missing and make C.W. Driver a more effective and more efficient business.
“It’s not only reorganizing the business development and marketing group,” Roberts says. “It’s also getting every employee engaged in being aware of what’s going on out there in the neighborhoods they live in and the communities they live in so the entire company is involved in the business development effort.”
Roberts got a good response as people had numerous ideas about how C.W. Driver could expand into new markets and broaden the company’s reach. The challenge in this case wasn’t getting people to open up.
It was taking all those suggestions and narrowing them down to the few really strong ideas that really have a good chance of success.
“We may have 50 or 60 different things that we start with, but we narrow it down to a few initiatives and we develop a plan that everybody gets behind,” Roberts says. “If they can’t get past that, they’re going to dilute their efforts. You’ve got to narrow it down. You just can’t physically do everything. We’ve been through that and we’ve tried to do too much. We find that in our business planning sessions, it’s got to come down to two or three things, maybe four things at the most, that you are trying to accomplish. It’s really spending the time to build the consensus.”
Roberts opens the process to whittle the list of ideas to a select few by admitting he probably be won’t be the one providing the best suggestions.
“I tell everybody, ‘Look, I come up with some of the stupidest ideas in the company,’” Roberts says. “People tell me, ‘That is a bad idea, Dana.’ I’m the president and CEO. I want that kind of environment in the company. I want people to speak their mind. I don’t want them to tiptoe on eggshells around everybody. We’re open and honest, and we do it with respect and integrity.”
It’s important that you set expectations before you go into a brainstorming session. Give your people an understanding of how things are going to work instead of jumping right into idea generation.
“We have a whole set of ground rules within our senior management group on how we conduct our meetings,” Roberts says. “Everybody knows you have to get down to two or three good ideas. Otherwise, you’re sunk. You’re going to take a shotgun approach and you’re not going to accomplish anything. It takes a day or two, but you get there.”
If there are people who are unwilling to let go of the old way of doing things and help with what you’re trying to build, you may have to let them go.
“The one person or two people that didn’t agree with it or didn’t get a fire under their butt to get behind this whole program and to understand the urgency of it are no longer here,” Roberts says. “I don’t like to say I fired them, but it no longer became a fit. We had a change that we were going to make that we needed to make and they weren’t of the mind to be part of it.
“We want people that are out in front charging hard all the time as opposed to dragging other ones along. It’s very important that we build consensus and that everybody is in agreement and doing their part to make the change work and operate in the new environment.”
Seek outside help
Roberts isn’t afraid to seek outside help when key decisions need to be made at C.W. Driver and this particular instance was no different. He doesn’t view it as a lack of confidence in his own abilities to lead the company and adds that his team doesn’t see it that way either.
“Not once has anybody criticized anybody bringing in an outside consultant,” Roberts says. “Smart people won’t do that. We don’t let the consultant run the business. We make our own decisions, but we get input from him and other things and then we make our own decisions.”
The third-party input that comes from an outside facilitator can be invaluable when you’re trying to move from the information gathering stage to the implementation and execution phase of a transition.
“You can find consultants to do anything out there,” Roberts says. “You just have to look in the right circles. You have to understand too that you don’t know everything. I may be president of the company, but there’s a lot I don’t know. So I look for a lot of input.”
Roberts stresses that the involvement of outside consultants is a demonstration of strength by a leader, a willingness to do what it takes to get the job done.
“If companies try to do it themselves, they’re not going to end up where they want to be,” Roberts says. “They need somebody in there to facilitate them and guide them. It wasn’t like, ‘Oh, we can’t agree on anything. Let’s get a consultant in here.’
“It’s like trying to fix your own car. I’m just going to get all the manuals and read the manuals and I’m going to fix it. But you get somebody who does that every single day and you realize you really need that outside type of knowledge. If you’ve got a big ego, you’re going to have to get over it.”
There are, of course, good practices to follow when it comes to using consultants. Perhaps most importantly, especially when you’re trying to encourage engagement and teamwork, is to make sure everybody likes the consultant you’re bringing in to help.
“Don’t you select him and then he comes in and everybody hates him,” Roberts says. “That’s the first consensus you want to build. Hey, we all like this guy. The key is finding somebody that everybody relates to and everybody likes and has really good credentials coming in the door. See who he has worked for and where he has been. Talk to his references and talk to his other clients. Find out the plusses and minuses for him.”
Consultants don’t come cheap, but Roberts says when you find the right one, it will be well worth it.
“It’s a big expense,” Roberts says. “But it’s worth every dime.”
There were a couple big changes that C.W. Driver made to better respond to market demands. One was to form a special projects group that would handle smaller projects.
“We had clients that we had done big projects for, but now they only had small projects to do,” Roberts says. “And we had clients we were trying to establish a relationship with, new clients, but their projects were too small for us to compete on.”
This new segment would be able to take on those projects and free up the bigger company to handle projects it was more suited to take on.
“The people that work in this group get paid a little less so they can compete on smaller projects,” Roberts says. “So instead of waiting until the market turns, we decided to take more aggressive action and say, ‘OK, how can we compete in a market and maintain these relationships and gain new relationships for big Driver? So we opened small Driver.
“The other one is the for-rent housing market. We decided that in order to compete in that market, we have to have a separate company that focuses on for-rent housing, student housing, senior living and possibly extended stay hotels.”
The smaller companies are part of the C.W. Driver brand but can operate in a way that better fits them.
“They can operate just like a small company, but we can give them all the support of a big company without the bureaucracy,” Roberts says. “So far it’s worked out, and we’ve built a backlog of about $20 million over the last seven months.”
When you embark on a remaking of your company, you’ve got to move smartly, but quickly. Your employees demand it of you, even if they don’t always openly tell you that.
“They want to see that the company is moving forward and doing something to maintain its growth and maintain its level of business activity,” Roberts says. “They don’t want to lose their jobs. They want to know if they are going to have a job next year. That’s the most important thing in everyone’s mind right now. Are we going to have a big layoff? Are we going to lose our benefits? Is our pay going to be cut? What is the company doing to sustain itself or increase its business? They are looking to senior management to come up with those answers.”
They are looking for answers and then they are looking for follow through and execution on what you’ve talked about.
Roberts was committed to preserving jobs and finding ways to remake C.W. Driver without having to do layoffs. It’s often viewed as the harder way to go, but that may not actually be true.
“You can’t just do these wholesale layoffs because if things turn around, then you have to hire people back and that is an incredible cost,” Roberts says. “Find new people, hire them, train them and get them involved.”
You’ll probably find that your people are more receptive to change than you think if it means their position with your company is secure.
“There’s very few people saying, ‘I don’t like working on this project. I want to work on this project,’” Roberts says. “I think everybody is really happy to have a good job, have good benefits, not have their wages cut and have a company that really has a lot of empathy for its employees.”
How to reach: C.W. Driver, (626) 351-8800 or www.cwdriver.com
Dana Roberts, President and CEO, C.W. Driver
The Roberts File
Born: Los Angeles
Education: Bachelor’s degree in economics, Utah State University; master’s degree in civil engineering, University of Southern California.
What was your very first job?
I had a paper route when I was 9 years old. It was called the Valley News and Green Sheet, which is now the Los Angeles Daily News. I had 120 papers I delivered and people would pay for it on a voluntary basis.
It was 65 cents a month and I would have to go and knock on doors and say, ‘I’m collecting for the Green Sheet.’ They’d say, ‘I don’t want it; that’s a rag.’ Or they’d say, ‘Oh, we love that paper,’ and they would give me 65 cents. One lady, she gave me a dollar. And I would go to give her the change and she’d say, ‘Keep the change.’ I got a 35-cent tip. She never failed to give me that 35-cent tip.
Who had the most influence on you?
There were two things my father said to me. He said, ‘Son, I can’t afford to send you to college. But I can give you a job.’ So that’s how I got through school. Then he said to me when I became an owner of the company, he said, ‘I’ve reached the pinnacle of my career. I’ve got my kid signing my paycheck.’
He was a great influence on me. The respect he had for people. Not only the people who worked for him but the people he worked with and worked for.
Kevin Brown looked at Grand Café and he didn’t like what he saw. The French bistro in Chicago’s Lincoln Park neighborhood was still a nice place to eat, but it had lost that special something that once made it a destination place.
“We had let some chefs play with the menu a little bit and it had lost its soul about what it was,” says Brown, president and CEO at Lettuce Entertain You Enterprises Inc.
Lettuce Entertain You operates more than 80 restaurants across the country and with the responsibilities that come along with each of those locations; it would have been easy for Brown to look for someone else to tackle the problem of Grand Café.
He certainly didn’t have enough time to take on the task himself, right?
Whether he did or not, Brown made the time to do a thorough review of every aspect of the restaurant’s operation. Company founder and Chairman Rich Melman and several talented chefs in the company joined him in the effort.
“We went back and I think we were closed for about three weeks,” Brown says. “We redid the floor plan, redid the look of the menu and we changed the name to Mon Ami Gabi, which was ‘my friend Gabino.’ We just went back to basics and made it a great French bistro again. We worked on the onion soup and the salad frisée and the steak frites. We just went back and said, ‘This is what this business is meant to be.’ We reignited its soul.”
More than a dozen years later, Mon Ami Gabi remains one of the company’s most popular eateries with five locations, including a particularly successful restaurant in Las Vegas.
Brown credits the attention to detail that has been embedded in the culture at Lettuce Entertain You for allowing the transformation from Grand Café to Mon Ami Gabi to take place.
“Leaders, a big part of their job is to solve problems,” Brown says. “That’s what we do. We inspire people. We take chances and try to solve problems. We take risks. Risk creates opportunity. Whether you’re fixing something that is not working or creating something new, you have to attend to the details. The details are what build the engine to make it fly.”
It’s not always easy to stay in touch with those details as your company grows. Lettuce Entertain You has come a long way since June 10, 1971, when Melman and Jerry Orzoff opened their first restaurant in the same Lincoln Park Neighborhood.
But Brown says finding a way to maintain the spirit that the company had when it had only one restaurant is crucial to the effort to stay on top.
“Culture is the glue of an organization,” Brown says. “It fills the gaps where nothing else can fill. It’s the passion and the culture and the drive to do what we think is right and the drive to do things because that’s the way we believe they should be done. That’s our primary motive.”
Here are some of the ways Brown works with his team to help Lettuce Entertain You and its collection of restaurants remain a favorite for customers.
Stay true to your culture
Brown quickly one-ups anyone who shares with him that their job is just never the same from one day to the next.
“My job isn’t the same every hour,” Brown says with a chuckle. “It’s a wonderfully stimulating business. You get to taste a lot of really great food. You get to work with design and you get to work with music. But at the same time, you have to think about how do we run a $400 million company with 91 restaurants?”
The first step for Brown is to not look at this task as if he were being asked to build a new company from scratch. Lettuce Entertain You has been around for 40 years and history shows it has done a lot of things right.
“We have a very entrepreneurial organization with a dynamic founder,” Brown says. “The challenge of my leadership is to help bring the second generation along so we can keep it going. How do I maintain it and keep it going as we continue to drive new ideas? At the same time, how do I structure and help organize and create accountability in the organization to ensure that along the road, we’re healthy?”
One of the keys to his company’s success is the belief that culture is more than just a sign that is posted on the wall or a card that employees are asked to carry in their pockets.
Culture is made through every action you take and every word you speak.
“Your philosophies from the way you want to treat people, the way you want to manage people and the way you view your business, culture is built every single day,” Brown says. “It’s the way you react on the spot to your employees and to your guests and to your vendors and the decisions we make on how we want our restaurants to be run. It’s a day-in and day-out process.
“So when you’re pushed on something and you’ve having to make a decision or something, that decision, if you look at the decision you’re making and it’s a long-term decision or it’s a tough decision, that says something about your culture. I believe it’s those decisions that reinforce the culture. It’s those conversations and those choices. I would hope we continue to make choices in our organization that reinforce our culture.”
Brown prefers not to think of his job as leading 5,500 people a philosophy, which makes it easier to maintain the company’s open culture and easier to tackle fixes like the transformation of Grand Café.
“We don’t focus on the entire company at once,” Brown says. “We focus on one store at a time, one problem at a time and we try to fix things. Now there are multiples of us trying to fix and improve one area at one time, obviously, at our size. That’s how we operate. We don’t think big. We think small. We believe when you think small you can get things done. When you think big, it can be overwhelming. We don’t view ourselves as big.”
Brown and Melman didn’t approach the situation at Grand Café with panic or a sense that the fate of the company was hanging on what they did next. The calm approach gave them the freedom to do what needed to be done.
But even if you are facing a significant problem, you still can’t afford to panic.
“You have certain things that come across your desk that you have to deal with,” Brown says. “Most of the things, if you’re trying to fix something, it’s unlikely they got where they are quickly. And it’s very unlikely they are going to be fixed quickly. So the recovery is going to be somewhat similar to the reaction to what actually happened.
“You have to be intense, you have to be persistent and you have to keep working at it. But at the same time, just know that some issues you go to tackle are going to require smaller steps to solve. You want to try to solve things so that they are solved, not just a Band-Aid.”
Respect your employees
No matter how great you think your company and its culture are, you need to make sure employees have a clear outlet to express concerns.
“This is not an easy business,” Brown says. “There are guests who are rude, and management’s job is to support employees. Back them up if there is a rude guest. Let them know that is not acceptable. Any service business unfortunately can be the brunt of other’s emotions that really sometimes have nothing to do with where they are at the time. Sometimes we’re the brunt of something that happened to them three hours earlier or something that is going on their life. That’s just the nature of being in the service business. You want to be supportive of your staff.”
Hopefully, there aren’t a lot of situations where you have conflict between your employees and your customers. In more typical interactions, the way you treat your employees is often most evident through your actions rather than your words.
“They know when it’s real,” Brown says. “You can’t say it, you have to reinforce it. It’s decisions that you make every day. It’s how you treat people. You can’t say you care, but then don’t back it up. You’ve got to put substance behind it and make people believe that we want this to be a great place for people to work.”
If you’re a company that touts itself as providing world-class customer service, you may want to look in the mirror and ask yourself how well you treat your employees. Is there a difference between the two?
“If you expect your guests to be well taken care of, you had better take great care of your people, because they take care of your guests,” Brown says. “We like to work with a high level of recognition for our employees and high respect. What we ask of them and everybody that works for us is we want them to care. We want them to care about their guests, their food and care about each other. We want them to care about the job they are doing.”
Develop your emotional side
If you’re a leader who has read every piece of advice offered on how to succeed in your industry, Brown gives you kudos. Just don’t think that you’ve reached the finish line and now know all there is to know about effective leadership.
“Sometimes leaders try to read a lot about getting more technical savvy in their business, which don’t get me wrong, is important,” Brown says. “But as leaders, you always have to be developing your emotional side. You have to be developing your ability to lead, your ability to motivate and your ability to read a situation. That’s our job. Our job is to continue to develop ourselves. If you continue to develop yourself in all aspects of leadership, it can be quite fulfilling.”
It’s easy to get hung up on perfecting this process or working on your sales pitch or making the next version of your widget better than the last. But it can’t be all about the nuts and bolts of your business.
“We have a lot of employees,” Brown says. “We as an organization have to fill their financial needs and their job security needs, but there is a certain amount of emotional needs we have to fill with them also. We have to give them a good workplace. The hierarchy of needs, that’s all real. But it’s not a formula; it’s a practice.
“You have to constantly be committed to developing yourself in all aspects of leadership. A developing leader and a growing leader generally speaking will have a developing and growing organization. If I stop growing and I stop developing, it’s kind of hard for people around me. Why should I keep going? Why should I keep pushing?”
Brown says the blueprint for effective leadership is really not that tough to understand. The execution isn’t always easy, but the steps are pretty straightforward.
“You give them as many tools at the management level as needed when they go on the floor to know how we feel service should be and how the guests should be treated,” Brown says. “Once they continue to progress, then it’s just reinforced on the day-to-day decision-making and leadership they see from the rest of the organization. As long as we say it, the proverbial ‘walk the talk,’ as long as we tell people what we’re doing and then we back it up, then it’s believable. If we say what we’re doing, but we don’t back it up, it’s not particularly believable. I won’t say we’re perfect, but we really strive to do the right thing.”
How to reach: Lettuce Entertain You Enterprises Inc., (773) 878-7340 or www.leye.com
The Brown File
Kevin Brown, President and CEO, Lettuce Entertain You Enterprises Inc.
Education: Bachelor’s degree, hospitality management, Michigan State University
What was your very first job?
My father had a very small boat dock on the Ohio River. It docked about 30 boats and it had a snack bar. My brother would be out pumping gas and would be on the boats and loved to water ski. That didn’t interest me. I was real interested in what was going on in the snack bar. My father was also the manager of a lot of townhouses that had a pool and a snack bar. I ran that also. There was something in the back of my brain that I like serving food and I like taking care of people.
Who has been the biggest influence on you?
Founder and Chairman Rich Melman and second would be Steve Phillips. The Phillips family owns Phillips Crab House in Ocean City, Md. It’s a large family, and they have a big crab-packing company and 15 or 20 restaurants. I had an opportunity to work there in Ocean City. I wanted to work at the beach, and it sounded like a fun job.
Well, I went into a 1,400-seat restaurant and said, ‘This is the coolest thing I’ve ever done,’ and six weeks later, I transferred to Michigan State University for the fall. Steve Phillips was driven and intense and cared about quality and took care of his people. Fortunately, I went from Steve Phillips to Rich Melman and he exemplified the exact same thing and both of them have helped mold me into who I am.
What would your last meal be?
Traditional spaghetti and meatballs
Few tasks are more central to effective leadership than communicating well and making sure your charges are doing so too. Communication pitfalls are rife in business. Maybe you have a tendency to rush through strategy sessions, or to be too subtle, to not spell things out clearly enough. Maybe you find yourself becoming so dependent on a PR person or group of PR people that you start to feel inaccessible. Maybe you have a manager who’s basically good at articulating his thoughts, but when his mouth opens, his ears snap shut. Here, from the pages of Smart Business Dallas, are some ideas from business executives on how to avoid such missteps and keep everyone in your company connected.
“When most people hear [communication], they’re thinking of transmitting, so we really tried to put the emphasis on receiving. It’s making it a part of the leadership culture to emphasize listening well and asking appropriate questions to enhance absorption of what’s really being attempted to be communicated. That’s not a natural skill. People typically default to being better at transmitting than receiving. You can see that in a variety of ways, but one way you can see that is when a discussion of reasonable intensity is going on and one party is communicating to another, you can almost see that other party stop listening to start formulating what their response is going to be on what they’ve heard so far.” — Carlos Sepulveda, President and CEO, Interstate Batteries
“Communicate early and often. You can almost overcommunicate. Make sure you’re sharing the vision — that it’s not just that there is a vision, there is a strategy behind this. …You overcommunicate and begin to share capabilities and really point out the most important thing to both cultures, and that is we’re a client-first organization. I try to compare it to something the group has been through before, if it’s possible. It’s not always possible, but if you can compare it, make it relative; I do find that to be helpful in many ways.” — Jeff Markham, Regional Managing Director, Texas Region, Merrill Lynch
“I don’t have a PR agent. I’m probably the easiest CEO in America to find and e-mail and get ahold of. It’s more efficient and takes less time to deal with things directly via e-mail than it does for someone to go through your e-mails and not know what you’re missing and then have them communicate to you and you communicate back to them. The time it takes for you to answer an e-mail or hit the delete key, if it’s not worth responding to, is probably about 20 percent of the time it takes to go through one, two, three assistants. I go into Hollywood and I see four assistants sitting outside somebody’s door, and I’m like are you [expletive] kidding me?” — Mark Cuban, Dallas Mavericks Owner and HDNet Chairman, President and CEO
- Emphasize the importance of listening.
- Don’t cocoon yourself with intermediaries.
- Hit the nail on the head; repeat as necessary.
Terry Cunningham knows that you need to have a compelling story for potential customers if you want their business. So when he joined EVault, A Seagate Co., around three years ago, his first objective was finding out how well the company’s story resonated with its customers and its 400 employees.
“We spent of time looking in the mirror and saying, ‘Well, would you buy it, and if not, why not?” says Cunningham, the president and general manager of EVault. “What’s not true about it? What is it that the customer would say, ‘I don’t really buy that story and here’s why’?”
Often, the problem isn’t that you don’t have a compelling story, but that you’re not communicating it correctly. Cunningham realized this was the case at EVault, which provides online backup and disaster recovery using cloud-based systems.
“So they had the right idea — the previous generation of the company,” he says. “It just wasn’t told in a way that had a broader market appeal.”
At the time, the company was serving only a small niche of industries that were legally required to backup their data anyway. But Cunningham knew that there was an opportunity to communicate to more consumers and markets that the cloud was a better way to handle their data protection and disaster recovery.
So how do you go about broadening the appeal of your story? Cunningham says the first step is floating the idea with people who may not think that they need your product.
“You begin with getting to the prospect that isn’t compelled buyers or compelled markets,” he says. “Go beyond the regulated industries that are required to do it and get to somebody that doesn’t care.”
Even if they seem unenthused at first, if you can open up a dialogue you will probably be able to identify some pain points.
“So now we get to the prospect or customer that at first doesn’t care that much because he thinks everything is OK, but then in the conversation, you discover that there are some challenges that they’re facing,” Cunningham says. “So OK, what’s the first problem you’re trying to solve, … what’s the second problem you have to solve … and so on.”
As you find these pain points, you can walk the customer through what a new solution might looks like and how a new story could meet them.
“Then it’s the usual sort of discovery process,” Cunningham says. “Let’s say we did have all of this. How much would you pay for it? When would you do it? What are all the other issues?”
Using this feedback, the company has been able to retool its story with pricing, packaging and other specifications that reach a broader spectrum of consumers. Now, Cunningham says the key to growth is being able to tell that story in a way that is simple and memorable.
“The early stage of that is to get out and tell the story and tune that story in the simplest possible way so that people can retell it,” he says. “If I give you the pitch, can you turn around and give it to somebody else easily?”
To help employees communicate it effectively to others, Cunningham regularly travels around to the company’s different offices to talk about the new story and why it is significant.
“The ultimate goal here is to communicate a story that gets told and retold by others, and we don’t have to keep doing all the heavy lifting,” he says. “If this is a better way, then eventually the world adopts it as proof that is really is a better way. You need everyone in your company to be able to communicate the story passionately and with the same enthusiasm.”
How to reach: EVault, A Seagate Co., www.evault.com or (877) 382-8581
The next best thing
When Terry Cunningham goes out to dinner, he loves to eat at restaurants that have paper on the table. That’s because when the whiteboard is out of reach, he has a spot to sketch out the next great idea for his technology business.
“They used to deliver crayons for the kids, now they deliver crayons for people like me to draw pictures while we’re talking about something,” he says.
As you continuously recast the story of what your business means to customers, you always want to be asking yourself, “What’s the next step?” even if it means sketching out the plan in Midnight Blue.
“[It’s] what’s changing from our customer’s perspective and how does it affect us to make sure that we’re not becoming irrelevant without even knowing it,” Cunningham says.
“There isn’t a technology company on the planet that isn’t sort of assessing where they’re at because the world is changing very quickly. So they’ve got to sort of reassess and figure out what the customer, target or prospect is looking for today.”
The key to long-term growth is to consider what the customer or the market is saying today, but never stop looking forward and innovating.
“I see a lot of companies and people I’ve worked with just chase the current model or market and they basically end up saying ‘me too,’” Cunningham says.
Successful CEOs don’t simply accept the hands that they are dealt. They like to write their own futures. They are able to envision how they will achieve their objectives. But how are they able to predict how the world will change? Are they merely lucky?
Peter Micciche, president and CEO of Certain Software, recently recommended the book titled “Flash Foresight” to his fellow Alliance CEOs. Authored by Daniel Burrus, a leading forecaster and corporate strategist, the book discusses a variety of triggers that enable us to separate what we can know about the future from trends that are only temporary. There are “hard” trends that will clearly continue and there are “soft” trends that will not.
Hard trends are based upon measurable, tangible and predictable facts or events, such as the aging of the U.S. population and continued improvement of technology. So to begin to predict the future, Burrus recommends we start with certainty. If we are to create successful companies in the future, it is critical that we get in front of these trends rather than lagging behind. They include:
Dematerialization — You only need to look at your phones, computers and cars to notice that most everything is becoming smaller, lighter and more portable with less environmental impact.
Virtualization — Software has enabled us to simulate most any process. For example, online businesses such as Amazon and eBay have virtualized retail stores and garage sales.
Mobility — Just in the last few years, we have begun to take for granted that we can access almost anyone, anytime from anywhere.
Product intelligence — Through the use of sensors and microprocessors, our tangible products and surroundings are becoming “smart,” including our cars and appliances as well as roadways and buildings.
Networking — The creation of highway, railroad and phone networks enabled the economic advances of the past. The next generation will grow up taking the ability to engage and share with others around the world for granted.
Interactivity — Traditional media such as television, books and newspapers was limited to one-way communications. Increasing interactivity will not only transform entertainment and advertising but also politics as we witnessed in the recent “Arab Spring.”
Globalization — The reason we are globalizing isn’t because our governments think we should, but because technology has made it possible. We want to engage with others around the world to enrich our lives as well as our pocketbooks, and it’s impossible to stop.
Convergence — Technology has enabled products to be merged with other products. Just look at your smart phone and think about how it has eliminated the need for old products such as maps, calculators and restaurant reviews.
So how can we take this knowledge and generate breakthrough ideas? Here are some techniques proposed by Daniel Burrus:
Anticipate — Think ahead about the problems that you will be facing several years from now and address those opportunities proactively rather than reactively.
Transform — Steve Jobs created the personal computer industry, but he transformed the music, animation and cell phone industries. He understood how technology would enable new business models and got ahead of the curve.
Go opposite – The future path of success will almost certainly be a path that no one is on currently. Whichever way your competitors are going, think about going the opposite direction.
Redefine and reinvent — Agriculture is an industry that is challenged by lack of water, arable land and unpredictable weather. Solazyme, a local Bay Area company, is creating a new industry based upon algae that produces food, fuel and chemicals in ways that promise to reinvent those industries.
Take your biggest problem and skip it — Many industries have issues due to legacy systems that have limits. Ask yourself how you might let go of the old stuff and skip into the future.
Paul Witkay is the founder & CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for CEOs. Paul can be contacted at email@example.com.
Do you know who actually buys from you? I’m talking about the socioeconomic makeup of your best customers. Is it women 35 to 45 years old with an income of $60,000 that spend, on average, $200 on every purchase? Is it businesses with 10 employees or less? If you don’t know, it’s high time you found out. After all, you can’t clone your best customers until you know who they are.
Take the following steps to construct a model of your ideal customer:
1. Accumulate all the details of your sales for either the past six months or one year (it’s not necessary to exceed a year).
2. Add up the total gross income (GI) of each sale and divide that number by the total number of sales. This will give you your average ticket price. Example: 200 sales with total GI of $200,000 means your average ticket price is $1,000.
3. Take the top 10 percent of your invoices (based on sale price) and list all attributes you know about them. If you are targeting consumers, this should include gender, age, income, location and whether or not they have kids or own a home. If you are targeting businesses, this should include industry, number of employees, annual revenue and the title of the person at the company who worked with you.
Once you have the model of your ideal customer, you can begin to take steps to acquire more customers that are like them. If you don’t know some of the answers to the above, you can actually buy data and append it to your list.
I have found direct mail to be the most successful lead generation tool for my marketing, especially for acquiring specific customers. The reason is that you can get extremely specific with mailing lists and tailor your mail piece to that specific demographic for a higher response rate.
For example, at PostcardMania we mail to small business owners. We discovered from reviewing our invoices that dentists make up a whopping 20 percent of our revenue, so we pulled out all the data we could about our dental clients and by appending information, found that the bulk of them (not all of them) were the dentists with newer practices. So we targeted those newer practices and saw an increase in calls in, closes, and of course, overall revenue generated from that industry.
Say your target demographic, or ideal customer, is wealthy men in their 50s. You can simply get a mailing list of every man in your area whose age is between 50 and 59 with a household income of $300,000 or more. You could also further specify by home or car value, marital status, number of children and so on.
Not only does this list ensure you reach everyone in your potential ideal market, it also pulls great results. Since you know exactly who it is you are mailing to, you design a postcard (better than letters, no envelope to open) with copy and images sure to get their attention, rather than appealing to everyone. The more you hone in on the “button” that resonates with your audience, the higher your response rate (and conversion rate if your salespeople do their jobs) goes.
This is a simple strategy to target the customers you want to replicate by identifying your ideal customer, getting a mailing list of all the people that fit that model and mailing out marketing material that uses a message especially tailored message to them. For best results, continue to communicate this message over time. It takes an average of seven marketing touches for a prospect to respond to your message. So the more often they see it, the more likely they are to respond.
Joy Gendusa founded PostcardMania in 1998 with a phone, computer and no capital investment. Since then, she has grown the company into one of the nation’s most effective direct mail marketing firms, specializing in postcard marketing for small to large-sized businesses. Over the years, she expanded to offer mailing list acquisition, website development, email marketing ? all while continuing to educate clients with free marketing advice. She has been named Tampa Bay CEO of the Year, Business Woman of the Year in Tampa Bay and has been featured on MSNBC’s “Your Business.” PostcardMania is an Inc. 500 and 5000 company and has won awards for creativity, best business practices and leadership. Learn more at www.postcardmania.com.
Britt Massing realized that his company needed to get creative if it was going to weather the turbulent economy in 2009.
“We could see that a lot of clients, instead of having four or five or maybe 10 orders a month, were going to one, two or three orders a month and constantly saying, ‘We might be having layoffs,’ or, ‘We’re trying to maintain our costs and cut costs etc. at this point in time,’” says Massing, president of The Staffing Resource Group Inc., which employs 93 contractors and a staff of 11. “That’s what we had to deal with.”
Today, the staffing company is one of the fastest-growing businesses in the Tampa Bay area. Smart Business spoke with Massing about how to use economic uncertainty as an opportunity to grow your business by better serving your clients’ needs.
What is the first step when you realize that your clients are struggling?
I think that a lot of companies didn’t react quickly enough to making changes. They thought maybe that renegotiating might not be the best thing for them. A lot of them also didn’t think about going back to as grassroots as taking a look at the income and the profit and loss report and thinking look at all the vendors and going back and talking with them.
The first thing we knew was that a lot of our competitors were going to be going out of business, and for us, it was if we make it through this, we’re going to be good. So what we did was we renegotiated with a lot of our clients our terms, and we also then renegotiated with almost all of our vendors.
We did one-year contracts where we’ve reduced our rates some. We were flexible when other companies were not flexible. We’ve listened to what our clients needed and if it worked for us from a business standpoint, we renegotiated until the turnaround started to happen for us. That was a big part of how we survived when a lot of other companies did not.
How do you stay aware of how to meet your clients’ needs?
We were asking our clients what they needed. Some clients, because of the technical aspect of our business, weren’t hurt as much as other clients, but the ones that were having some difficulties and asked us about flexibility, we decided what made good business sense and we ran with it.
Outside of that kind of strategic aspect, instead of not calling clients when they didn’t have needs at that time, we’ve maintained our relationships with everyone throughout that period. People would be like ‘You know you don’t need to stop by and say hello to us right now. We don’t have anything for you.’ Our response always was, ‘Well, we know you will in the future and when you do, we want you to remember us.’ We wanted them to know that we treat all of our clients like it’s a relationship and it’s a partnership. So we spent a lot of time staying in front of them. We’re in direct contact either via phone, e-mail, in person, breakfast, lunch, dinner etc., with our clients every week. We have a very grassroots effort to make sure that we’re constantly in touch and in front of all of our clients.
As the contracts had ended and then needed to be renegotiated, depending on how the companies were doing, we had opportunities to renegotiate our prices back to where they were or above where they were before; we’ve been able to do that as each contract has come up. A lot of them were experiencing the same thing that they had to do for their businesses as well. Many of the people that understood and partnered with us were going through it themselves, and for the most part, were very appreciative of what we did to help people get through those times.
What advice would have in employing this kind of strategy?
Don’t be afraid to ask for help. … We [the owners] are always constantly in communication and talking and bouncing ideas off of each other and taking that to the team. When the team is involved in any policy changes or any changes with the company, it gives them ownership of it and they take pride in seeing it through and making it happen.
We knew that we had to maintain the relationships because we work with what we feel is a great book of business and when we got with our team, we told them, ‘Every customer that we have will continue to get the same amount of service as they’ve gotten before and that’s what will happen in 2010 and beyond after we get through 2009.’
How to reach: The Staffing Resource Group Inc., www.srg-us.com or (877) 774-7742
John O’Leary wanted to know what was holding back his salespeople at VPS, The Vacant Property Specialists. Why were they struggling to drive new business and what could be done to eliminate those struggles?
“It was my job to come in, take a look at them, evaluate them and make recommendations and changes that would help increase the top line,” says O’Leary, CEO of VPS in the United States. “So I came in knowing I needed to find out who were keepers and who were not keepers.”
Spend a few minutes speaking to O’Leary, whose business specializes in protecting vacant properties from harm, and you understand he’s a no-nonsense guy. His approach to the challenges at the 1,500-employees was no different. He simply asked his salespeople to prepare a 30-minute presentation about what was working and what wasn’t working in their jobs. It would be delivered to him in a one-on-one setting where they would have his undivided attention.
“It would give me a feel for how sales-oriented the people were,” O’Leary says. “Their capability to make a presentation, talk about their territories, talk about the obstacles that we needed to overcome as a company. Usually, if you ask some people what’s wrong with the company, you get more than what you need to hear.
“But if you hear it enough times from enough people, where there is smoke, there is fire. My purpose there was to find out the top three or four things that I heard consistently from the people, then to take a look at them and see how they presented themselves and how they presented it to me. I was the customer in that environment. They were giving me a presentation on themselves and their territory.”
When it was all said and done, O’Leary expected to have a better idea on what he needed to do to get VPS where everyone wanted it to be. He wasn’t interested in excuses. He wasn’t interested in blame. His objective was to identify problems, eliminate those problems and help his people succeed.
“I was brought on board to help sales growth in the company,” O’Leary says. “You need to find a way to hit that number. ‘The economy is tough’ is not the answer. I don’t think you would find that an acceptable answer in any company. You just need to look in the business section every day to see how many companies are laying people off.”
If all went well for O’Leary, it wouldn’t come to that at VPS.
Talk to your people
O’Leary takes his job seriously. But he didn’t want to intimidate his people with these 30-minute presentations. He wanted them to clearly understand that he was there to help them and that it was to their mutual benefit to have these meetings.
“I said, ‘I’m bringing you in for a sales meeting because I feel it’s important that I understand what you’re facing as an employee and as a salesperson,’” O’Leary says. “What do we need to do to change anything that’s not being done correctly? What tools do you need to succeed?
“My purpose in doing this is there are about 16 of you right now. It’s going to be difficult to do one-on-ones going out and visiting you. It would take me too long. The reason I’m doing this is one, to get everyone together to talk about where we’re going as a team and let you meet me and find out what my thought process is on this; let me meet you and find out where you are on this and what you need to succeed. Hopefully, you’ll get an idea of how I work and what I’m looking for from salespeople and I can get a feel for what you need to succeed and some of the obstacles you’ve had in the past that have prevented you from succeeding. It’s a get-to-know each other.”
With all the forms of communication that are out there, sometimes you still will get the best information from a simple one-on-one conversation.
“I gave them an outline and I said, ‘Look, I want a 30-minute presentation on your territory,’” O’Leary says. “’What’s going on in your territory right now? Who are your top customers? What are the obstacles that you face every day that inhibit you from succeeding? What are the things we’re doing right? What are some of the things we need to change? What would some of your recommendations be if we were to change them? Give me a general overview of who you compete against and what you need to succeed, and anything else that you think is important that I should know about at this point.’”
O’Leary got a strong response from his people and the opportunity to sit down and talk to him about their challenges.
“They were looking for leadership at the time,” O’Leary says. “There were a lot of people working very hard. Like anything, when you come in and review things, some changes are made with personnel. That’s the way it is when you get new leadership. That’s going to happen in any company when you make changes. There were a bunch of people working very hard. They were looking for leadership, they were looking for the tools to be successful and welcomed someone that would come in and say, ‘All right, here’s the deal. Here’s where we are. Here’s what we’re going to do. Here’s what I’m looking for from you.’”
O’Leary had people bring him a written version of their presentation and he took notes along the way. When the presentations were finished, he reviewed what he had learned and quickly reported his findings to the people he had just met with to demonstrate that there was a purpose for what they had just told him.
One of the pieces of information that came up repeatedly was product and service pricing. O’Leary wanted to investigate this further in the field with prospective customers.
“I said I’ve got a list of some things here,” O’Leary says. “What I plan to try to do now is call some of you to go out and visit with some current customers and find out what they think about us; go out and make some new sales calls with you and find out what people who are thinking of possibly using us, what are some things you confront on a sales call. So I get a feel of what are the objections that we’re hearing to our product line and why we’re not selling. We’re going to figure out what we need to do better in terms of presenting our product, and look at our pricing and see if we truly are too high-priced.”
Be part of the team
So O’Leary hit the road with his salespeople to see what customers and prospective customers thought about VPS and the products and service the company was offering.
He wanted his people to be on board with the plan, but if they weren’t, he was OK with that too. They just would have to find somewhere else to work.
“If they are not willing to change, it’s a culture issue,” O’Leary says. “You need to change the culture or the company doesn’t have a chance at succeeding. One of the other reasons I had the sales meetings was to create team synergy. These people rarely got together. They’d see each other once a year. Now we’re doing quarterly meetings and having dinner afterward where everyone gets to sit down and talk. They get to be a team. They call each other now when someone has success and ask each other what they did. It’s created a team environment.
“I remember when I was younger and in sales, we had a new CEO come in. He turned around and he said, ‘Look things are going to change here. Not everyone is going to fit in with what we’re looking to accomplish. Let’s shake hands, part ways and part as friends. But for those of you willing to take part in what we’re looking to accomplish, I welcome you to jump on board and participate enthusiastically and let’s make this thing a success.’”
As O’Leary met with customers, he discovered that his people were right on target. People were concerned about price and in a tough economy, that was only making it worse. There was just a perception out there that VPS was charging too much.
“The question became are we too high-priced?” O’Leary says.
He didn’t think this was true. Rather, he thought his people needed to take a different approach in how they presented VPS offerings to prospective customers. They needed to know that while using steel to protect vacant properties might be more expensive, it paid off when those properties were not broken into.
“I put together a proposition that talked about the things that we do well versus the competition,” O’Leary says. “We went in and started talking to customers about this and started getting their attention. This is part of changing the sales culture here. In the past, they just accepted the fact that we were too high-priced. The first thing I had to do was get the sales team educated, change the culture and help them understand that you have to go in and be a consultative sales person to the end user. Pricewise, we really did play in that environment.”
O’Leary wanted his people to focus on solving problems for customers and not on selling them a product or service.
“The first thing I would ask is if they know us,” O’Leary says. “Even here in Chicago, you’d be shocked at how many companies have no idea who we are because we have not been marketed very well in the past. You sit down and start from the beginning. Here’s what we do. When you secure a property, what do you do? Do you use steel? Do you use wood?
“We’d tell them some of our customers use our product because they’ve encountered problems like this. Can you associate with any of those? Find out what are their issues. Then, let’s come back with a proposal for you and see if it makes sense for you pricewise. We are going to be a little more expensive than the wood, but we think in the long term, it will save you money.”
O’Leary was confident in his approach and he wanted his people to believe in it. But he didn’t expect them to be clones, because would-be customers would see right through that.
“People can be successful, but there is no cookie-cutter approach to doing it,” O’Leary says. “What works for one person may not work for someone else. What works for you may not work for me. We can all learn from the success that people have had, but I do encourage people to be themselves. We did professional sales training, but I said, ‘You need to take this and adapt it to your own personality.’”
By taking the approach of offering solutions to customers rather than just a product to buy, and giving them a few tips on how best to present those solutions, O’Leary found his people were having more success. He did have to make some changes and let some people go.
But the end result was a team of people who felt like they working toward a common cause with O’Leary.
“So and so has been successful and closed this deal,” O’Leary says. “Why don’t you tell us a little bit about it? How did you go about it? What did you find out was important to other customers? What enabled you to close the sale? Different ideas. The salespeople now after these sales meetings, they’ll get on the phone together and talk. How did you do that? What did you do to do that? So it’s important to get people communicating. Part of my coming here was when I got here, the salespeople were more out on an island. Now we’re building more of a team. I think that’s important.”
But even with the success, O’Leary recognizes that there will always be more work and more tweaking that needs to be done.
“Part of what you need to do is constantly go through the process,” O’Leary says. “What are we doing right? What are we doing wrong? What opportunities are out there? How do we grow the marketplace? Where can we improve as a company? Where can we help our salespeople improve? It’s a constant. It’s not coming in and doing it the one time because if you do that, things become stagnant.
“In times like this, you always need to be creative and look at the opportunities that are out there for your company and your salespeople. The most important thing is to educate them on how to sell your products, make them confident when they are in front of the customer and let them be able to relay the value proposition we offer to a customer.”
How to reach: VPS, The Vacant Property Specialists, (800) 918-9100 or www.vpspecialists.com
The O’Leary File
John O'Leary, CEO, VPS, United States
Born: New York
Education: Bachelor’s degree in business management, Marist College
Who has been the most influential person on your life?
My father, John O’Leary. He was born in Ireland. He came over on a boat with his family and had nothing when they got here. He was going through high school when he joined World War II. He came out after the war, finished high school and college at night and became an accountant/CPA. He showed me No. 1, that work ethic is important and to be responsible for yourself, but that you can achieve anything you want to if you put your mind to it.
What is the best advice you’ve ever received?
Work ethic is huge, I’ve never asked anybody to do anything I won’t do myself. That’s how you get a successful company and that’s how you become successful yourself. Go out there and set achievable goals and work towards them.