If you’re an employee at AkzoNobel Decorative Paints North America, you’ve probably helped paint a classroom, donated school supplies or brought a new shine to a school playground. It’s just what you do when you work at AkzoNobel.
The paint company led by Bob Taylor, the company’s president and general manager, has more than two dozen volunteer initiatives that are supported through its community program.
When it’s a painting project, AkzoNobel typically donates all of the paint, stain, tools and materials for a project. Employees donate their time and energy, sometimes during the workday or on evenings and weekends. In 2011, employees in Greater Cleveland used nearly 700 gallons of paint and gave more than 2,300 hours of time to help make the lives of their neighbors a little bit better.
In some cases, the painting is about more than just freshening up a room with color. Studies have shown that certain colors in the classroom can be more conducive to learning and can help students perform better. A brochure helps volunteers work with the schools they’ve chosen to come up with a color scheme that best fits their room.
But not all the good will is spread with a brush. AkzoNobel has been a valuable contributor to area food pantries, including the Strongsville food bank. The company also raises more than $100,000 each year to support the United Way and took part in an effort to help the Cuyahoga Valley National Park rid an invasive plant species from its grounds.
It’s those personal connections made from neighbor to neighbor that make all the difference. When each person does their part, so much can be accomplished and that’s the mindset that AkzoNobel employees bring each day.
How to reach: AkzoNobel Decorative Paints North America, www.akzonobel.com/us
Thomas M. Laird Jr. was a founding member of the ACE Mentor Program of Cleveland, an affiliate of the ACE Mentor Program of America. Since 2008, the ACE program in Cleveland has provided mentors to students in the Cleveland Metropolitan School District who are interested in pursuing careers in the architecture, construction and engineering fields.
As part of his efforts, Laird organized the principals of leading Cleveland design and construction firms, providing the foundation for the program’s outreach efforts in area high schools, which begin with mentoring and continues in the form of scholarships and grants that allow students in the program to continue their advancement in the industry.
Laird was not only critical in helping to raise funds for the organization’s scholarship program but also in convincing Kent State University, Cuyahoga Community College and Cleveland State University to provide matching scholarships for CMSD students interested in entering the architecture and engineering fields.
Over its nearly five-year existence, Laird has led the effort to bring the ACE program from a few participating first in its inception to a current pool of 35 participating firms in the architecture, engineering and construction fields.
Together, the participating firms provide more than 50 volunteers who serve as student mentors. For the 2012-13 school year, the plans include programs at West Technical High School, East Technical High School, John Hay School of Architecture and Design and James Ford Rhodes High School.
Mentors introduce students to a broad range of people, projects and career possibilities within their field of interest. Through personal example, explanation and tours of offices and construction sites, ACE mentors educate students about career paths and professional life in the design and construction professions.
How to reach: Ace Mentor Program of Cleveland, www.acementor.org
Organizations and their people always try to avoid uncertainty, unpredictability and ambiguity. To create an environment of safety, sense and rationality in terms of the choices they make and the goals they set, they impose routines, standard operating procedures, decision-making recipes and risk-avoiding agreements.
Scholars’ traditional views about organizational routines explain their existence with the need for “cognitive efficiency” and the reduction of complexity. This view suggests that routines arise because they are functional, they minimize costs, they increase managerial control and they create stability in the organization.
Therefore, routines are an important element of a firm’s social system and its decision-making process.
However, rules and routines can be seen as repetitive and inflexible, fixed and mindless, and as creating inertia in organizations. They mechanize decision-making and choices, they create a “business as usual” mindset, and they put the organization into “automatic mode.”
Thus, there is a consensus that routines are generally detrimental to innovation and change in organizations. Inertia and “business as usual” form strong barriers to change and tend to comfort employees in their views that “It was never done in the past”; “Why change if it works?”; “If it ain’t broke, don’t fix it,”; and, finally, “This is not the way things get done around here.”
Sound familiar? So how do you break this business-as-usual phenomenon and wake up your organization before it becomes too complacent or before the next crisis arrives?
I conjecture that it is the role of top leaders in organizations to create disruption and create proactive mini “revolutions” in order to bring about incremental change, increase the sense of urgency and encourage people to embrace change.
The great challenge is to do this when times are good and when the organization is successful.
In my career, I have embraced Sun Tzu’s saying in the “Art of War for Managers”: “When you are at peace, prepare for war.” In other words, when times are good, prepare for bad ones, and vice versa.
I often characterize myself as an agent of disruption by trying to break organizational routines, release mental locks and create a climate of change by encouraging breakthrough thinking.
Here are a few disruptive approaches I have used to create organizational change and to accelerate organizational transformation:
Constantly challenge your business model and reject complacency
Think outside the box, release your creative potential to constantly reinvent yourself even when you are successful and achieving your goals. Are you anticipating disruption five years from now? Are you tracking mega trends? Are you scanning other industries and companies for potential failures?
You can do this by breaking the organizational equilibrium and bringing about change when least expected. Take your organization’s pulse and avoid organizational fatigue by designing changes in teams in advance of issues and in tune with organizational needs.
Are you suffering from too many meetings, too many PowerPoint presentations, long decision-making discussions? Experiment with new meeting formats, PowerPoint-free zones, casual Tuesdays, fun Fridays, decision-making blitzes, rapid innovation processes, creative speed-thinking, etc.
Break the level of market predictability
By surprising competitors with breakthrough innovative products and surprise moves, the traditional cycles for price increases, product launches and customer events become a moving target that is hard to predict and that will bring excitement to markets at different times.
Make breakthrough thinking a core competency
Train your leaders on what breakthrough thinking means and how you can bring about soft and mindful disruption. Look to hire people in leadership who have great change-management skills but who can also lead change. Also, hire creative and nonconventional thinkers and embrace humor and fun at work.
Embrace skeptics and eliminate organizational bottlenecks
Make change successful, irreversible and anchored in the organization’s DNA. Remove any bottlenecks in breakthrough thinking and pockets of resistance to change. Listen to skeptics about the relevance of change and about where things need to change.
By creating these proactive changes during good times you prepare your organization for potential difficult times ahead — but most of all, you put yourself in a position to avoid the next crisis by removing complacency and business-as-usual. Give it a try. Become your organization’s “agent of disruption.”
Stephan Liozu (www.stephanliozu.com) is the founder of Value Innoruption Advisors. He specializes in disruptive approaches in strategy, innovation and value management. He is also a Ph.D. candidate in management at Case Western Reserve University and can be reached at email@example.com.
It was late 2008 when Ross Bushman and his team had just finished a new strategy for the next five years of business at Cast-Fab Technologies Inc. Bushman, who is president and CEO, along with his team were excited about the new strategy that was put in place and what it could mean for the company.
However, just a few months later, 2009 began and the castings and fabrication industry was hit hard by the recession. Cast-Fab Technologies, a 280-employee, $50 million gray and ductile iron foundry that supplies castings, patterns, steel-welded fabrications and precision sheet metal components, lost nearly half its business virtually overnight.
“We went through some hellacious turmoil in our industry, to say the least, back in that 2009 time frame,” Bushman says. “It was a period of about five or six months where a lot of that drop occurred. It wasn’t that we just lost 30 or 40 percent of the business in one day. We didn’t lose any customers. What we lost was our customers weren’t buying anything and that was different.”
With its customers taking a break from business, Bushman and Cast-Fab had to look elsewhere to keep business going.
“We knew we had to stay strong, make some painful choices early on, and we didn’t procrastinate on them,” he says. “We knew there would be opportunities to pounce on.”
To take advantage of those potential opportunities, Bushman stuck to the company’s plan, reassured employees that things would be all right with hard work and new customers would be found through diversifying the business.
Here is how he carried Cast-Fab Technologies through the downturn.
Involve employees in your strategy
The recession caused panic in a number of businesses as individual industries began to see the effects of the economy. Bushman, however, wasn’t going to let panic set in at Cast-Fab — he communicated what the organization was going to do.
“Our people were going home every night and the news was not good,” Bushman says. “Everybody had a friend, a neighbor or a family member affected somehow by the economy.
“People need clarity and every day we were out there trying to talk about those things and we kept talking to them about reaffirming America’s manufacturing excellence. That was what we were after.”
To achieve manufacturing excellence Cast-Fab aimed to diversify the customer base, establish new customer relationships and continue to grow with current accounts. To put that plan in motion Bushman involved many people in the strategic planning process.
“You have to involve a lot of folks in the organization,” he says. “People are usually pretty surprised at how much different kind of numbers and things we are sharing even down to key shop-floor personnel. Team members need clarity. They need the ‘what’ and the ‘how.’”
Deciding who to include in the strategic planning process can be a difficult decision. A good strategy group involves people from different levels and experience.
“We certainly have the key managers involved, but we’re also looking out for those up-and-coming associates who are going to be the key folks five or 10 years from now and getting them to be part of the process,” Bushman says. “At the end of the day, these folks own the plan — the strategy map and the numbers on the scorecard and what specific metrics we are doing — they are intimately involved in developing those things with us.”
You want to pull in folks who are on a track to do some bigger and better things for your company down the road.
“That just helps with the breadth of opinion,” he says. “In the C-suite, we all can get blinders on at times and forget that information isn’t assimilated through the organization as much as it comes to you. That’s why your players need clarity — the ‘what’ and the ‘how’ — and you have to communicate those things.
“The toughest part that any organization has is getting an outside force’s perspective of what’s coming at you and trying to look at where things are going to be five or 10 years from now and what you need to be doing today to get there. That’s where some of those outside folks can help challenge you.”
People are usually surprised at how many folks Cast-Fab involves in its strategic planning process.
“We have around 280 folks today and we’ll take 25 or 30 people off-site to really be part of this process and really help map the future of the organization,” Bushman says. “They then own the plan and they believe in the words and the numbers that are on the page. It’s not just me or my brother sitting up there talking about those things and that’s really worked well.”
Having all of those people in the room to help form a plan is extremely beneficial when it comes to gaining buy-in for a new direction.
“I talk to our folks and tell them, ‘This is your chance to write the script for the next four or five years for the organization,’” Bushman says. “It’s not just me standing up there going over the same old charts and numbers. We’ve really created some good alignment within the organization as far as goals. We’re getting people pulling in the same direction.”
To get your company on the same page and moving together, it takes patience and persistence. Bushman has identified the five dysfunctions of team training to get his employees in line.
“You have to be willing to get better and not just go through the motions,” he says. “Sometimes to get better you’ve got to have some conflict and some change. So we’ve used the five dysfunctions of a team training, which talks about dealing with issues in a professional way. Sometimes it’s not fun, but we’ve spent a lot of time getting the right people that fit together.”
When you’re trying to get buy-in for a new strategy or direction for the company, it is rare that you will please everyone, but it is critical that you get a majority on board with you.
“You have to keep working your strategy so it becomes ingrained in what you do,” Bushman says. “My dad told me years ago that if you got even 70 percent of your workforce on board, buying in to what you were doing, that’s probably world class. You’re probably not going to have everybody, you just have to keep getting some converts each day, each week, each year to what you’re trying to do and you’ll slowly move the needle.
“An 80 percent solution executed on time is better than a 100 percent solution executed late. It may not be perfect, but start the plan and start it working and work on the implementation phase. It’s about getting a little bit better each day as opposed to giant leaps.”
To move forward with a plan each day and each week, you have to put emphasis on the implementation of your strategy.
“Too often people go through a huge strategic planning process, they come out with a great plan, but they spent months and months doing it, and at that point, people are exhausted,” he says. “When the work needs to begin on the implementation side, it fizzles out a little bit.
“We really shortened the time on the strategic planning side and we really focused on the implementation. On the implementation side is really where plans are won or lost and strategies are won or lost.”
Following Cast-Fab’s strategic planning process in 2008, the economy tanked and implementing a plan and sticking to it became more important than ever.
“One of the principles and beliefs that I use is that decisions in crisis demand calm leadership,” Bushman says. “We really knew that and really communicated as best we could with the organization.”
Bushman used that calm, yet determined demeanor to steer the company in a positive direction. With current customers putting business on hold, Cast-Fab looked to gain new business. It brought on new clients and diversified its offerings.
“We knew there would be some opportunities in the marketplace and there were,” he says. “We continued to use our strategy, and we continued to look at where we wanted to go and that’s how we made our decisions. We made some painful cuts at the time, there’s no doubt about it, but we were proactive with those. We didn’t wait too long.
“We really saw where things were heading pretty quickly and that allowed us to stay strong in many ways.”
The opportunities Bushman communicated to his employees came up in time. Cast-Fab made an acquisition and gained business from competitor demise.
“We had our most successful year that year of new customer generation,” he says. “We really needed to, because our current customers weren’t buying anything. I knew if we could get some more spokes into the fold once the current markets came back we’d be in pretty good shape.”
Throughout this period, Bushman made it a point to stay as positive as possible and celebrate any small wins the company made.
“You have to spend a lot of time talking about the positives, not just the negatives,” he says. “People think you have your plan and you come in and talk about the stuff that’s not going very well.
“We try to celebrate success, because how boring would that be to just come in and talk about the problems all the time. We try to spend three times the amount of time on the positives as we do on the opportunities for improvement.”
Some of those positives have come from the new product offerings that Cast-Fab has created over the years in order to diversify.
“Part of the strategy that has been working really well for us is we have developed a couple of product lines of our own to help us diversify,” Bushman says. “We have a line of bank equipment products that’s sold under the business and brand Security Systems Equipment. We do safes, vaults, safety deposit boxes, pneumatic tubing systems and anything that a credit union or financial institution may need that’s metal-based.
“We have another smaller division that does products for water and waste water treatment. That business is sold under the name Coldwall Wilcox Technologies. These are subsidiaries of Cast-Fab that are a smaller piece of what we do, but they do help us diversify.”
The key to diversifying to help grow your business is to not leave the core competency of your business behind.
“You can’t stray from your core competencies,” he says. “Ten years ago, we didn’t know anything about bank equipment, but we knew how to make fabricated product. An opportunity came up to make an acquisition there, and we did that.
“Eight years ago, we didn’t know much about the products in water and waste water treatment other than they used a lot of castings and fabrications, machining and assembly. We had to learn how to sell some of those products and establish ourselves in those markets, but at the end of the day, we know what we do here in this building pretty well, and we’ve never strayed far from that.”
By sticking to a strategy of following core values and diversifying the business, Bushman has led Cast-Fab into new realms of business. He plans to continue that growth.
“As a family business, we don’t want to be doing this just for one or two more years; we want to be doing this for 30 years and beyond and get it over at some point maybe to a third generation,” he says. “So we’re trying to do those things and make those decisions now for the long haul.” <<
How to reach: Cast-Fab Technologies Inc., (513) 758-1000 or www.cast-fab.com
Utilize employees from different levels in your strategic planning.
Continue to work your plan as you gain buy-in.
Diversify by using core competencies.
The Bushman File
President and CEO
Cast-Fab Technologies Inc.
Education: Attended Miami University in Oxford, Ohio and received a productions and operations management degree. He also received an MBA from the University of Cincinnati.
What was your first job and what did you learn from that experience?
My very first job was at Carlisle Construction. It was a heavy equipment construction company that rented cranes, dump trucks, etc. I was the guy who swept the gas pumps, worked in the truck wash and steam-cleaned the engines so the maintenance group could work on them. It was a pretty good experience for a 14-year-old learning different stuff. I learned how different people dealt with conflict.
What is some of the best advice you have received?
My dad taught me years ago that pigs get fat and hogs get slaughtered. We use that a lot here when we’re talking about relationships with OEMs that we’re trying to establish for the long term. So when we’re in negotiations or doing pricing we’re talking about getting a fair return for what we’re doing to be able to sustain and grow the business, but at the same time we’re not looking for just one sale or a home run. We want to be able to do this for the long haul with them.
Whom do you admire most in business?
My dad taught me most of what I know. He’s been my hero in life. I was also part of a mentoring group here in town several years back with a fairly famous local business guy, Bob Kohlhepp. He is the chairman of the board over at Cintas and has been a great mentor to me and taught me a lot as well.
What are you most proud of at Cast-Fab?
I would have to say it was some of the work we did for the military. We did things on both sides of our business, ranging from ductile iron bomb bodies to some of the fabrications for the MRAP vehicles. A lot of our stuff isn’t necessarily seen when it is in use somewhere. It’s part of a machine or inside the guts of a machine, but when you can point to something that our folks are doing to help out our troops overseas, that’s pretty special to us.
Optimism and pragmatism can go a long way toward achieving success. If you strategically put optimism to work through a focused agenda and celebrate successes, you can see a positive influence on attitudes and results.
A great example is the story of the pessimist who argued the glass was half empty, the optimist that exalted that the glass was half full, and the college student who grabbed the beer, drank it and was the only one who quenched her thirst. The college student was optimistic, pragmatic and focused — and she achieved the desired result.
I was first introduced to a meeting concept called Positive Focus while attending a Strategic Coach session taught by Colleen O’Donnell of Strategic Wealth Partners and designed by Dan Sullivan. She revealed the importance of kicking off staff meetings with positive energy derived from the attendees themselves. This is not a New Age method or fluff but rather the celebration and recognition of successes as seen by the eyes of your employees.
How it works
In the opening of management meetings or departmental meetings, each attendee shares one item he or she feels is positive and deserves the spotlight. It should be quick and it should avoid dragging a lot of detail into the explanation. This meeting concept:
? Actually highlights challenges — and how they were resolved — without the dreaded “update” process that slows down meetings.
? Provides recognition.
? Gives managers the opportunity to congratulate their staff or others on the recognition and praise being given.
? Starts the meeting on a high-energy note.
? Shows that challenges can be overcome through teamwork and any challenges that are going to be discussed in the meeting have a positive precedent to follow toward resolution.
? Reinforces the culture of collaboration and communication.
It is tough to say that there is a “typical” positive focus in our meetings. The majority of the comments include a shout out for an employee or a team of employees by name for what they have been able to achieve. We also have customer stories and the success that a great win or implementation is doing for the company. We have had cheers for an improved bill of health or a clear cancer screen after a long health issue. We have celebrated the refreshed feelings after taking a vacation.
The content is not controlled or restricted. The purpose is to reflect on what is making our work lives better. This purpose helps us focus on what is right in the world and reminds us that we are among great, talented people and we can tap those resources.
Positive attitudes are proven to improve results and health. I believe executive teams should spend additional time developing more of the “can-do” attitude in our approach toward business. By focusing on optimism, it’s easy to see the pragmatic benefits to the organization.
The next time you are facing the dreaded update drudgery of a departmental meeting, I highly encourage you to turn the agenda around a bit and start with a Positive Focus moment. Then incorporate the agenda of every appropriate meeting. There will be time to discuss and solve the challenges you are facing, but the mental approach to the problem will make a difference in the approach.
My Positive Focus
Today, my Positive Focus is that I have had this opportunity to share a tactic that really works and has changed the complexion of meetings in a highly successful business. I believe it can have far-reaching impact elsewhere, too. <<
Lois Melbourne is co-founder and CEO of Aquire, a workforce planning and analytic solution company based in Irving, Texas. Visit www.aquire.com for more information.
Like any pair of siblings, Neil and Gary Jaffe each view the world very differently. While Gary is focused on people and the quality of dialogue he has with his leadership team at Booksource, Neil tends to look at things from a more strategic perspective.
“I think about the challenges we have faced as a company in the industry,” says Neil, president of Booksource. “A big one was our transition away from the bookstore market, which historically has been our largest revenue stream, and focusing on the school market.”
The brothers are looking to keep Booksource, which is owned by GL group Inc., in a position to drive maximum revenue. The move to the educational market is part of that, as is the integration of digital media and e-books.
Managing such a transition is not easy, and that’s where Gary’s biggest challenge comes in. When he took over as CEO at GL group a couple of years ago, it was important to him to have the right people in place to help him with the transition process. Unfortunately, that wasn’t the case.
“They weren’t giving me any advice and guidance when it came to some of the decisions we had to make as a leadership group,” Gary says. “It was getting the proper feedback that I was looking for that those people weren’t giving me.”
As Gary viewed the situation, he was confident his leadership team knew what he wanted from them.
“We have a saying around here to give people explicit expectations,” Gary says. “Those people knew their role. They knew what we wanted. But for whatever reason, they just didn’t have the business acumen to give me the proper answers.”
Both Neil and Gary needed to find a way to solve their problems if Booksource was to perform to its full potential. The best course of action was to attack both problems and move ahead with a renewed sense of focus.
“If you have to do this and you have to do that and then you have to do this, why not just do it all at the same time?” Neil says. “People are going to be going through change. At the end of it, it’s all done.”
And so the brothers set out to make the changes they believed would put Booksource in a better position to grow.
Assess your team
Gary was very frustrated with his leadership team and the lack of feedback it provided. But despite that frustration, he still found himself questioning whether it was really a problem.
He got with his business coach and told her that one of his key people was doing his own job quite well. He just wasn’t offering much in the way of guidance to Gary.
“He’s just not giving me advice,” Gary says. “And she turned it around and said, ‘By all means, I feel like he is hurting you. You’re not able to get what you need from him, therefore he is hurting you.’ And I totally agreed with that. The person can be hurting you if they are not doing the extra that we are expecting them to do.”
Neil is quick to add that Gary is not lacking in the ability to do his job or make decisions on his own. Rather, it’s one of his strengths that he is eager to gather feedback and use that to make even better decisions.
“Gary always has a natural inclination to listen a lot,” Neil says. “Unfortunately, he wasn’t getting helpful answers. That’s where he recognized what needed to change. When he asked, he needed to get much better answers from people who were engaged or thoughtful or had different ways of thinking about things.”
Leadership is a very fluid process. If you’re not at least thinking about how you interact with your team, you’re not using that team to the best of your ability.
“You have to make changes with people who don’t listen enough or don’t lead from engagement among the staff,” Neil says. “You can either listen too much and not get the feedback and have a problem or you cannot listen enough and have great people giving you feedback, and you’re not moving things forward.”
In Gary’s case, it was the former and that needed to change. Once he made the decision that he had to replace some of his people, he had to determine what qualities and attributes the replacements would need to have.
“It’s the qualities that you are searching for that are most important,” Gary says. “Determine what those criteria are. That’s more important than having the person available that you’ve picked out.”
In other words, you can’t just pick a person who is different than the one you’re trying to replace. You’ve got to take time to know what qualities you are looking for and then go out and find that person.
“You’ve got to listen, you have to have this person meet other people and you have to get other people’s feedback and opinions to see if it’s really the right fit,” Neil says. “Get a lot of feedback from a lot of different people. Make sure you look at the criteria and go off the job description. Do all the things you would normally do when hiring.”
As he proceeded with his changes and found people who had the qualities he was looking for, Gary learned that he wasn’t the only one who had noticed a problem on the leadership team.
“One of the guys after he was terminated, one of the guys who worked on his team came up to me and said, ‘I knew it was only a matter of time. I’ve worked with you for 15 years, and I know you can only take so much,’” Gary says.
It’s OK to try to help a person to try to get them to provide you with what you need. But trust your gut when you think you’ve gone far enough and reached a point where it’s not going to happen.
“For me, it’s always a matter of, ‘Have I done everything to get this person to understand what I’m looking for when it comes to giving me feedback?’” Gary says. “If my gut is saying, ‘I’m not going to get them to understand,’ it’s time to make the change.”
Engage your team
As the personnel issue was being addressed, both Gary and Neil were assessing Booksource’s strategic direction. It was key that everyone be part of the changes that were occurring and be kept apprised of what was happening.
“If you’re strategically focusing on the right stuff, it’s going to make the staff better too because they will have less to worry about,” Neil says. “They are all focused and engaged and passionate about the right thing that is leading to good rewards. A busy facility is an energetic place and it creates a morale boost, a staff boost, an engagement and they feed off of each other.”
Booksource had always been open with its financial data and numbers, but Neil wanted people to feel like they had a real part in affecting those numbers.
“The first step is to get people engaged,” Neil says. “If you have the potential to get a bonus, you’re going to work a little harder to make sure that we as a team achieve that goal. ‘If we achieve that goal, I might get a little more money.’ It teaches the staff that a big order is a good thing.”
Neil says there is a lesson to be learned for management when incentives are introduced into an organization.
“It teaches the owner that that bonus and that engagement and showing them the number and giving them a goal and a target is a very positive thing for the organization,” Neil says. “People will work harder and faster and you need less people, and it all builds on itself.
“There are dozens of other ways to open the books to give people an opportunity to see what’s happening and to participate. Start small with opening it and providing some kind of incentive to people and then you’ll see the benefit.”
You’ve got to follow up beyond introducing incentives and sharing information. If you just do it once and let it fade away, your people will lose a lot of faith in you as their leader. But if you steadfastly follow up and stick to it month after month, year after year, you’ll earn strong loyalty.
The key is setting expectations and then meeting them.
“I want to know what the end result that is my expectation is going to be and try to figure out how to get there,” Gary says. “What would it mean? What would it look like? We do a lot of follow up to see if the decision we made is right or wrong. If it is wrong, what do we need to do to go back and get it on track and get to that desired end result?”
Meetings are held with management, and then quarterly with employees to provide updates with how the company is faring in meeting its goals.
“They can look and ask questions and say, ‘Oh yeah, at the beginning of the year, you said you were going to do 40 brochures, three new catalogs and this, that and the other,’” Gary says. “They know what we said we were going to do. The staff has to OK the plan from the managers.”
Getting your team involved in what you’re doing can only help you as an organization.
“It all goes back to that involvement issue,” Gary says. “Listening and taking feedback. We don’t feel you can make a better company if it’s straight from the top down. We need it both ways.”
Transparency also puts pressure on you to really think about the decisions you’re making for your business.
“You’re showing yourself so if you’re not doing everything right, people might realize, ‘Oh my God, they’re going to see my weaknesses,’” Gary says. “We all know we have weaknesses. That’s why we need the support of others to figure out how we can get over those weaknesses.”
As Neil and Gary look at Booksource today, they see a company that is much more focused on and much more engaged in what needs to be done.
“We’re having one of our busiest months in the history of the company,” Neil says. “And we’re renovating the big break room that we have, so there are tables out in the warehouse and a refrigerator out there, but it’s all tremendously organized. People don’t complain about it, people don’t grumble about it. They just have a tremendous amount of engagement and it’s because of the changes we made.”
Gary says employees feel just as much a part of the success or failure of the business as management does and that’s a good thing.
“By understanding it and getting people involved in reporting those numbers, I’m not responsible for the budget,” Gary says. “We all are responsible for certain areas of the budget and people have to watch it. They are accountable for it.” <<
How to reach: Booksource, (314) 647-0600 or
The Jaffe Files
Gary Jaffe, CEO, GL group Inc.
Neil Jaffe, president, Booksource
Gary: St. Louis
Neil: St. Louis
Gary: Bachelor’s degree, human development and family life, University of Kansas.
Neil: Bachelor’s degree in marketing, University of Illinois; MBA, Washington University in St. Louis
What was your very first job?
Gary: Camp counselor. It was a sports camp. This was their summer, and I needed to make sure that they enjoyed it. If the activity wasn’t engaging, we’d change that activity to find something that was fun for these kids.
Neil: My first real job was a busboy at a hotel restaurant. It taught me that you have to wake up early and work hard.
Who has been the biggest influence on your life?
Gary: No. 1 is my dad. I’ve been around him so long and I’ve listened to these stories and he’s preached these things over and over again, and I’ve had 30 years of training from him. It all boils down to character. He’s shown the character that Neil and I have taken not only in our jobs, but in our family life as well.
Neil: It would definitely be my father, but I would also say my older brother, Gary. He has taught me a lot about life and leadership.
Who would you like to meet, or have met from the past?
Gary: We spend a lot of time at Disney World and it was in the ’60s when Walt Disney had the vision of a place where families can go. I’d love to see what his reaction would be today.
Neil: George Washington. I’m reading his biography now.
Know what you want from your leadership team.
Get your people involved in meeting company goals.
Be accountable to your employees.
Bob Bellack got an early start in the entrepreneurial game. Selling golf balls and lemonade, mowing lawns, cleaning gutters and washing windows were just a few of the jobs Bellack took on before he had even turned 10.
“Anything I could do to make a buck,” Bellack says with an air of confidence. “I was driven by the need to do things independently and have money of my own to get what I wanted when I wanted it.”
Flash-forward to 2012 and you’ll find that Bellack, now all grown up, is still in a hurry to achieve success as quickly as he can make it happen. He’s the CEO of Newegg North America, an e-retailer with an offering of more than 3 million products and roughly $2.5 billion in annual sales.
Those are great numbers, but Bellack says they won’t cut it in tomorrow’s world. He explains that as the market continues to evolve, so must the products available for purchase at Newegg.
“We have to be faster, smarter and more nimble in what we do,” Bellack says. “Not in everything but in what we do. Newegg did a great job getting to where it is today. But where it is today isn’t where we need to be. We need to keep changing the business. There’s a lot of change that’s going to happen in the next 12 to 24 months.”
You won’t find pingpong tables, brightly colored walls or slides for employees to swiftly glide from the second floor to the first floor at Newegg. Bellack says it’s a different approach than that of other companies in the tech industry, but it’s one that suits him best.
“When people come here, they have to be people who don’t look to see what it is,” Bellack says. “They see what it could be. That’s the biggest challenge is finding people who have that vision. What we’re doing is we’re going to change and evolve Newegg to another stage in its life. To do that, you have to have those people.”
It’s not that Bellack is trying to be coy about his company’s future when he says prospective employees need to visualize it for themselves. It’s more like he views the future as a picture that hasn’t been painted yet.
And if you’re not confident enough, or brave enough, to come along for the ride and help him paint that picture, Bellack says you’re not going to be a good fit at Newegg.
“Innovation is not going to come from me,” Bellack says. “It’s going to come from them seeing opportunities to do a job better or see what somebody else in their realm is doing and make change and drive change.
“It’s not going to be from me telling them to do it. If that’s the culture you have, you cannot be competitive. Amazon has 50,000 employees around the country trying to figure out how to be better than everybody else. If you think I’m smart enough to beat 50,000 people, that’s absurd.
“We have to build a really strong group of people who are creative, independent thinkers and risk takers who are willing to take risks and change things.”
The big question is how do you find those talented people, and then once you find them, how do you get them to mesh all of their talents together for the betterment of your organization?
“I do a lot of interviews,” Bellack says. “I talk to three or four people a week and then sometimes more. When you reach a certain point of your career, a large part of what you do is recruiting and finding new people and finding new skills. You learn things from people who you interview and people you talk to. That’s one way you stay current with what’s going on.”
Talking to people is only scratching the surface of what you need to do, of course. Anybody can find people and engage in conversation, but that alone is not enough to bring you the talent you need.
The key is your ability to set your ego aside and not set barriers as to who you’re willing to talk to or consider bringing into your business.
“Don’t be afraid to hire experts or to hire people who know a lot more than you do,” Bellack says. “Shoot for as high as you can get. If you don’t, the last thing you ever want to be in any leadership role is the smartest guy in the room.”
If you have a problem hiring people who are smarter than you, you have to ask yourself what your goal really is with your business. Is it to achieve personal glory? Or is it to build a successful business?
“It’s not about people or personalities,” Bellack says. “It’s making sure people understand it’s really about the ideas and the business. It should never be personal. It should be very focused on what is our business objective. Our business objective is to make the place better.”
Give someone a sense that they can be part of a big success story and achieve growth on a personal level and they’re more likely to buy in, even if you don’t yet have a clear sense of where it’s going. They’ll see it the same way you do, as a challenge and an opportunity.
“The person you hire has certain expectations,” Bellack says. “Pay is one of them. That’s kind of the ante to be in the game.
“What they really want is to work with smart people that they are going to learn from. They want to do things that are unique, different, cutting edge and innovative. They want to be able to have a career path or development path, maybe in the company, maybe out of the company.
“But at the end of the day, they want to be at a place where they like to get up and go to work every day.”
Focus on the big picture
When Bellack talks to people about coming to work at Newegg, he engages in every conversation with the hope of learning something from it. If he’s lucky, it will be something that he can apply to his plan for growth at Newegg.
“I’m looking for someone not just to say, ‘I had $1 million to spend on marketing, I bought search keywords on Google and my click-through rate is ABC,’” Bellack says. “What I want to know is they actually had a bunch of different ideas on how to bring customers in and they executed those plans in a unique way, one that I hadn’t thought of before.”
Bellack is particularly interested in where people have gone who have worked either for or with the people he is interviewing.
“Tell me where the people are who worked for you,” Bellack says. “Where did they go? What jobs did they take? Have they been successful in their career? One of the guys answered, ‘Well, I’m not sure what they’ve gone on to.’ That was about over and we were about done.
“That tells you the kind of people that they bring in. The people I’ve brought in to work for me, a lot of them, I wish I had taken the jobs they took. They did far better than I did in many cases. But I’m happy for them. I think people should pick people who are smarter than they are and have the confidence they can hire good, smart people.”
In Bellack’s mind, it needs to be all about the business. If everyone is focused on the business and on making it better, all the other things will come. The personal growth, the personal rewards and the opportunity for everyone to experience a lot of success — it will all be there if everyone has the same goals in mind.
“I want to hear good ideas,” Bellack says. “I want to hear that they have recruited and developed good people and I want to know that they have concrete things they have accomplished.
“I want to know that they could work together with others to accomplish a goal. Personally, there is no incentive or benefit to me for self-promotion among the people who work for me. The only way I win is if this company creates more value.”
Put it all together
The final piece is to take those ideas and talents and potential and put it all together to build a better business. It’s not always easy as even people who work well with others and enjoy collaboration have days when they don’t agree with their colleagues.
“When you start bringing in a lot of people who have strong views and vision, I think the biggest challenge becomes what the alchemy is when you put them all together,” Bellack says.
“Part of my job is to try to make sure what we make here is constructive and that people work together. The people who were here before and the new people, what I don’t want is conflict and confusion. I want people who are creative, and I want people to debate and challenge things. But at the end of the day, you need people who can work together constructively.”
One of the most important things you need to do when you’re building a team is to set expectations. If you’re a business that is still shaping its future, that’s fine. But you and your people still need a road map of how you’re going to do it.
“If you set the ground rules and you tell people how to behave and you set the culture where people behave in that way, generally it works,” Bellack says. “I can’t say it always works. But I believe most people want to do a good job. They just want to know what the rules are and how best to work in an environment.”
Bellack takes personal pride in helping the people he hires become successful. In the same way he looks for stories from interviewees about people they have developed, he wants to have stories he can share about talented people he helped grow and succeed.
“My role is to make sure the people I bring in are as successful as they can be,” Bellack says. “What we need to do is make sure we identify employees with unique skills and capabilities and make sure we set a climate and environment where they can be successful.
“Sometimes they can’t do other things, but they can do one thing really well. Part of management is figuring out where those people are and finding the right spot where they can excel and make the company successful.”
As Newegg continues to grow and rack up more awards for its ability to meet and exceed consumer expectations, Bellack says he’ll continue to try to do it even better.
“You should never stop asking the question, ‘Are we doing the right thing?’” Bellack says. “At the end of the day, that drives you to continuously get better.”
While Bellack pursues growth relentlessly, he doesn’t let himself get overwhelmed by all the moving parts that make up Newegg.
“I cannot worry about whether someone in Shanghai or New Jersey is doing the right thing,” Bellack says. “I will never know that. I can never know that and it’s somebody else’s job to know that. But if they understand how they link back and how the goals and metrics are tied back, then we shouldn’t worry.” <<
How to reach: Newegg North America, (800) 390-1119
The Bellack File
Newegg North America
Education: Bachelor’s degree in accounting, DePaul University, Chicago. MBA, Kellogg School of Management — Northwestern University, Evanston, Ill.
Who has had the biggest influence on your life?
My father. He was an entrepreneur, a musician and a music publisher. He did all kinds of things. He was basically a very successful guy doing lots and lots of things. He fostered a climate of independence and entrepreneurialism in our family.
What is the best piece of advice you’ve been given?
My father told me to not be afraid to make mistakes. He told me when I played percussion, I had the cymbals, and he said, ‘Don’t be afraid to hit them hard.’ Let me tell you, when you have those cymbals, if you’re not on the right time, you’re going to be singled out as the guy making the mistakes. But that’s true of anything. You learn every time you do something.
What one person would you like to meet now or have met from the past?
Steve Jobs was a very interesting guy. He is somebody who went through a lot of pain. He had some unbelievable successes, but he is somebody who was criticized and challenged. He made the world’s most valuable company. He went from Michael Dell telling him to give the money back to making the world’s most successful, valuable company. It’s more his spirit, his ability to be successful despite a lot of challenges. Some were self-inflicted; some were not. It would be interesting to hear his innermost thoughts about how he felt at different points in that experience.
Know the kind of people you want to hire.
Look for people who have helped others succeed.
Set the expectations for what you want to achieve.
Gordon Krater didn’t know where the bottom was. So he started focusing on the top.
Like just about every business leader, Krater had never seen anything like the recession that started in late 2008. The stock market started free-falling, the housing market crashed and two of the Big Three American automakers went to Washington looking for bailout money.
Not even the most educated and experienced of economic analysts knew where the slide would stop — or when. As the managing partner of financial and business advisory services firm Plante Moran PLLC, Krater faced a choice: Either brace for the eventual rock-bottom impact or focus his 1,700 associates on discovering present and future areas of opportunity despite the depths of the economic crisis.
“The most important thing was to not listen to all the noise,” Krater says. “Every day it seemed like there was bad news, but we couldn’t focus on just that. We needed to figure out what we thought was really going on. We needed to assess where we were and try to set a positive tone for the organization.”
Krater was elected managing partner in October 2008, on the front edge of the recession, and took over in July 2009, right in the middle of the economic free fall.
Thrust directly into the storm, he had to quickly figure out where Plante Moran could still generate positive momentum and rally his workforce around those areas — and he had to do it while his entire workforce was immersed in an environment riddled with stories of layoffs, foreclosures and bankruptcies.
“In the absence of communication, people assume the worst,” Krater says. “So one of the things I’ve learned over the years is that people really need to hear what is going on, and they need to hear that you are still confident in the company’s future. People won’t follow pessimists. They’ll follow optimists who are also realists.”
Get the real story
During the recession, employees at companies around the country consumed daily media reports about the deepening crisis. By the time team members arrived at the office for work each morning, they had already scanned a newspaper, watched TV during breakfast or listened to the car radio on the ride to work. Krater was already facing an uphill battle against negativity before he stepped into his office each day.
Krater couldn’t stop the bad news, and he couldn’t stop his staff from consuming bad news. But he could show everyone at Plante Moran that there was another side to the story.
Yes, the economy was in dire straits, and yes, it was putting a strain on just about every business. However, that was the surface-level story. If Krater dug a little deeper and asked a few more questions, he believed he could find the toehold that would help give his people a more positive outlook on the future.
To get the answers to his questions, Krater utilized Plante Moran’s vast and powerful client base.
“We have a really solid base, so we are a great place to take the pulse of the economy,” Krater says. “We have thousands of clients that include influential companies and leaders in our region. So I went out and talked to them. I tried to get what was fact versus what was conjecture, the real reactions to the issues at hand versus the reactions to a state of paranoia.
“I wanted to get a real sense for where our clients thought things were going, and where things were headed in reality. I didn’t want to just read a bunch of things in the media and allow us to be influenced by that. We needed to talk to our clients to get a real sense of where things stood.”
Krater was able to take what he learned from the firm’s clients and use it to keep his staff more thoroughly informed. If Krater foresaw a drop in business related to a particular account, he shared as much as he could regarding the reasons behind the drop in business and the potential severity of the drop.
“Rather than simply saying, ‘Business is down,’ we tried to answer how far down,” he says. “There is a big difference between business being 40 percent down and 5 percent down. If we had someone worried about whether a contract would be renewed, like a major auto supplier, versus having a contract canceled outright, there is big difference between those two. A big part of what we had to do was differentiate what was really happening versus the fear of what might happen.”
Krater wanted to focus his people on the day-to-day work of running the firm, not the horror stories coming from the nation’s financial centers. The staff at Plante Moran couldn’t help what was happening in Washington and on Wall Street, but they could do something about positioning the firm to weather the storm by strengthening its client relationships.
“People were concerned about the possible collapse of the financial system,” he says. “It was this growing idea that business as usual was over, and there was a new normal, which was a difficult concept for a lot of people to accept, both here and elsewhere.
“Here in Detroit, we had a front-row seat to watch GM and Chrysler go into bankruptcy, and nobody knew if they were going to come out. So all of that was swirling around, and we couldn’t do much about a lot of it. So what we needed to do was focus on our clients. We needed to do what we could, which was to serve our clients in the best way possible to help them through those tough times.”
Taking control of a crisis means to take control of communication. Your people need to hear the truth about your company’s situation directly from you, which means you need to stay well informed, so that you can better share information with your people.
During the depths of the recession, Krater wanted to give his associates at Plante Moran a realistic view of the situation that the firm was facing. Often, people associate realism with pessimism. Nobody has ever associated a reality check with something positive. But Krater believes pessimism can run as rampant as optimism, if left unchecked.
“That’s why you can’t panic,” he says. “That is why you try to get to reality, to what is real versus what is being thrown around out there. You try to find your own answers as to what is going on out there with the economy, as opposed to taking what you read at face value. Of course, I read everything I could get my hands on about what was happening out there, but you verify what you read.
“You can be truthful and realistic and optimistic at the same time. I wanted our people to know that despite what was happening, we are still going to be here, we are going to emerge stronger than ever, and most importantly, here is how we’re going to do it. You need substance to your message.”
By taking control of communication, you are really taking control of your culture. When tales of woe are assaulting your people from all sides, morale starts to erode; the collective confidence of your people starts to wane, replaced by anxiety and paranoia, which produce a counterproductive work environment.
With frequent and comprehensive communication, you can combat the negative inertia of a crisis by reminding your people why your company can still be successful and by focusing everyone on those items. That approach reminds your people that they’re not helpless, they’re still capable of controlling the company’s destiny, and they have a means of pulling the company out of the crisis.
In short, you want to promote a message of empowerment.
“We tell a lot of stories around our firm, and we’ll talk about clients and their experiences with us,” Krater says. “Frank Moran was our founder, and his undergraduate college degree was in philosophy. One of the things he’d talk about was the idea that we were a people firm disguised as an accounting firm.
“So we have been focused on our culture, ideals and principles since the beginning. We’ll relay stories to each other about a staff member who helped a client, how it happened and so forth — not unlike how I hear Quicken Loans does it.
“If you ask a person who has been there for two years or more, they’ll be able to give you a number of examples of how to deal with a given situation, based on a story they heard from somebody.”
Properly managing communication, and by extension your culture, is a critical component of crisis management. If you let your culture wither in a time of crisis, you’ll find it is a long road back when you set about rebuilding it.
“Every company has a culture,” Krater says. “The question is, is it good or bad? If you let your culture go bad, one of the toughest things to do is rebuild it. It takes so much energy and time, and it’s just a very difficult task. It takes energy away from serving those who you have to serve outside the company in order to make your living. We have a great culture here, and one of the things we do is fiercely protect it. You can’t let anything get in the way of that.”
Invest in what you can
During a recession, or any time of crisis, you need to spend money.
It seems counterintuitive when business is down and revenue is drying up, but when you face choppy financial waters, your company needs you to invest in resources and talent more than ever.
At Plante Moran, Krater and his leadership team made a commitment to hiring new talent during the recession. With added talent, Plante Moran was able to explore new business avenues and set itself up for a period of growth as the recession has loosened its grip over the past two years.
Plante Moran frequently hires college graduates straight from campus, but during the recession, Krater and his team took a bit of a different approach.
“Other companies had to cut some really good people loose, and because of our strong culture and reputation, we were able to attract some really good people who had been cut from other companies,” he says. “That’s one of the biggest advantages of making your culture a priority. You can provide opportunities for people, and they know you are a great place to work.”
If your people know they can impact the future in a positive way, they’ll want to work for your company, regardless of the economic landscape. If they know their work will be appreciated by management, and make a difference in the long run, it will be much easier for your people to tune out the negativity around them and develop a goal-focused mindset on improving your company’s outlook.
“People want to feel like they’re in the know, and they want to feel like they are making a difference,” Krater says. “One of the problems you can run into as an organization gets larger is this attitude of, ‘If I don’t do this one little thing, it won’t matter.’ It can become harder to connect them to the impact they can have.
“Any business, any profession is a game of inches. The little things make the difference between real success and not doing as well. It’s having people who are empowered and believe in their ability to make an impact that makes the difference. That is where you find the real gold.” <<
How to reach: Plante Moran PLLC, (248) 352-2500 or
The Krater file
Education: Bachelor’s degree in business administration, University of Michigan
First job: It seems like I always worked growing up. I was always cutting grass or babysitting. The first time I got a W-2, however, I was a lifeguard at a municipal pool when I was 16.
Krater on making an impression on Michigan State University men’s basketball coach Tom Izzo: We have an annual firm conference where we close the firm down for a day, right around the end of our fiscal year on June 30. Every single person is invited, no matter what their role is. It’s a day when we talk about the firm, what we’ve done, what our goals are going forward, and we celebrate. We celebrate not only the successes of the firm, but of the individuals in the firm.
Oftentimes, we have a guest speaker, and one time we had Tom Izzo come in and speak to us. I was talking to him before the meeting, he had his notes on what he’s going to say, and he asked me ‘So, who is here today?’
I told him everybody in the firm is here. He says, ‘You closed the whole place down? Every single person is here? Not many people walk their talk like you guys do.’
On the spot, he changed what he was going to talk about. He talked about (his 2000 national championship team) that had a rough start to the year. And he actually called in the maintenance man, his administrative assistant and a lot of other people besides just the players. He told everyone, ‘You know what? We’re not doing a very good job. Everybody has to do better, because everybody contributes to the success of this organization.’
He talked about how when they won the national championship, and they got the championship rings that everybody covets so much, the first ring went to the janitor, because he is the guy who opened the gym so the players can practice.
That sends the message that everybody’s contribution is important. That is how we feel, and needless to say, he was a big hit speaking to 1,700 people about something that we really try to practice.
When Al Crawford visits Disney theme parks, he’s thrilled by the rides, the theatrics and the entertainment. But what really leaves him in awe are the park’s employees.
“I’m absolutely amazed by an organization like Disney,” says Crawford, chairman and CEO of the Southwest Ranches, Fla.-based Bankers Healthcare Group Inc. “I’ll walk through their parks and I’ll ask, ‘How do they handle this? How do they control everything?’ … For just one park, you wonder how do you get the right people being responsible?”
At the time they founded BHG in 2001, Crawford and his partners didn’t have to worry about any of these questions. Among the three of them, they had all the skills they needed to launch a successful venture on their own.
As president, Robert “Bobby” Castro, was “the guy who brings the business in” and “makes it rain.” His brother Eric Castro —BHG’s COO and the “glue” between the three founding partners — put the systems in place to help the company scale. Then there was Crawford, who handled finances and built the balance sheet for the company, which provides financial services to medical professionals.
“One of the unique things about the company was that you didn’t have to go out there and hire people to do things that you didn’t know how to do, because the original three owners had expertise and experience in really all areas,” Crawford says. “So you didn’t rely on anybody else. You knew that you had the experience and that your partners had brought a tremendous amount to the table to get the job done and to grow the company.”
But as growth accelerated, so did the demands on the three partners. Soon enough, the notion of doing it all was feeling more like a burden than a joy. Like the Disney parks, they needed to assemble a team of people who could run the organization’s day-to-day operations and could be trusted to make decisions and take care of customer needs independently, so that the owners could focus on expansion. Yet this was easier said than done.
“When you’re doing everything yourself, you know there’s accountability,” Crawford says.
“As we grew, one of the challenges has been letting go of those reins and finding people who had the passion and dedication that we did in all three areas.”
Recognize when you need help
Flash back to 2005, the three owners were drowning in the responsibilities of day-to-day business. They no longer had the time and resources to run the company on their own. But when you’ve been handling certain parts of your business independently for years, it’s hard to recognize when it’s time to delegate some of your job to other people.
One way to gauge whether you need to reallocate some responsibility is by asking, “Can I take a vacation?” For instance, whenever partner Bobby Castro was out of town, it showed up in the bottom line.
“It was where you just couldn’t handle it all by yourself, and the fact that you were trying to handle it all by yourself was actually hurting the company,” Crawford says.
“I could tell you when Bobby was on vacation because there would be a drop in originations, which is unacceptable when you’re looking at $15 million of small ticket $100,000 loans on a monthly basis. All of a sudden Bob’s on vacation so we do $7 million that month because he was gone for 10 days. We can’t have that. We’ve got to have other people that, though maybe not as good as Bobby, are close.”
Another question to consider is how many hours are you working? Working nights and weekends may be necessary when starting out, but 60-hour workweeks may not be the best use of time for the CEO of a growing business.
As the head of finance, Crawford found himself struggling to juggle too many tasks while also trying to finance business growth. COO Eric Castro faced a similar dilemma.
“Eric was close behind me in saying I can’t build all of these systems myself,” Crawford says. “I need to hire people, and we need to grow proportionately.
“So I had to grow my section — I can’t run around talking to banks for the rest of my life, because I’m also trying to handle accounting. We’re trying to handle legal. And I need to be a little more grounded. Consequently, I need some people who can do what I’m doing and do it just as well and not drop the ball.”
In the end, each of the partners felt the strain differently and independently. But acknowledging that they needed to let go of the reins was a critical step in preparing the company for the next stage of growth.
“As your plate starts to grow beyond an average of eight to 10 hours a day and you truly to see growth from a P&L standpoint — you’re making money and you’re becoming more profitable — you need to put the money out and start to mentor somebody,” Crawford says.”
“From a real microeconomics look, as the tasks become so vast that you find yourself just about getting to none of your to-do list, it’s time to find somebody who can start to take some of those tasks.”
Reset your priorities
Delegating responsibility to other people is a relief for some leaders, but incredibly difficult for others. Either way, it helps to start small.
As Crawford and his partners began unloading some of their mounting job responsibilities, they handed off their lowest priority items first.
“If I made a list of everything I had to do today, there’s probably a bottom 10, 15 or 20 percent that somebody else could do,” Crawford says. “And they could do it just as efficiently as me. If I’m just running around in circles and constantly trying to catch up, constantly not getting to things, I’d be better off and more efficient doing the bigger things better and allowing somebody else to do that bottom 20 percent.”
Instead, take that bottom 20 percent and give it to a new employee, who can give it his or her utmost attention.
“Give it to the person who is looking to ride something in that department and let them make it their top priority, so all of the stuff on your list is always getting high priority,” Crawford says. “You’re getting effective representation if it’s customer service stuff. Your customers are being serviced better.”
If it’s taking you two or three days to get back to a client or customer, ask yourself if there’s an employee who could take the task of following up on phone calls or even an entire account. A new person will also be excited and eager to get back to them, Crawford says.
“Maybe they are not dealing with you, but that’s OK,” he says. “Because dealing with you is really hurting the relationship because you haven’t gotten back to them in three days. That type of delegation makes the whole organization better, when you can take a look at your list and say, ‘What am I not doing well here?’
“Delegate that to someone who’s anxious, who’s looking to climb, looking to grow within your organization, and they make it No. 1 through 5 on their list, so it gets done extremely well.”
Help new people learn the job by staying close to them — literally. As Crawford began delegating to new leaders, he frequently had them in his office or next to his office to shadow and learn from him. He also confesses that finding the right people tends to be a process of trial and error.
“It’s no different than a professional baseball team or a football team,” Crawford says. “They can go out there and they can literally go after what they think is going to be the best quarterback in the country. And he can be a flop.
And just because someone has pedigree or experience doesn’t mean that he or she is going to be a success.
“We’ve had people who we’ve hired that have been tremendous,” he says. “We’ve had people that we’ve hired who we thought were going to be tremendous who were horrible. And then we’ve had people who we hired that we cultivated, homegrown and have become superstars.
“It’s finding the right candidate with the right degree, the right experience and the right attitude that you bring in and put in close proximity to you. You look for them to just really absorb everything you’re doing. You try to share what you’re doing, and you look to grow them into your spot, honestly, so they could replace you.”
Find people like you
Since 2001, BHG has grown from its original three partners to 150 people. And as a result, Crawford doesn’t see the “young, aggressive, talented person” anymore. Instead, most of the hiring decisions are pushed down to different department heads, who are given the freedom to hire, fire and mentor the people who work within their area.
“We use that model where you’re counting on people who you’ve trained, people who are moving up the corporate ladder, and they have earned the respect of their peers, earned the respect of the owners,” Crawford says. “Now they’re making the same decisions that you were making two or three years ago, and they’re looking to grow that department by implementing the same type of strategy.
“So they’re going to find that person. They’re going to find a person that fits with them, and they’re going to mentor that person in the same way.”
As people become more independent, they’ll take on larger roles in the company and eventually their own disciples. This tiered mentoring ensures that new leaders are continually being developed at all levels of the organization.
“It’s important for me, Bobby and Eric that people within your department respect you and they look up to you, and your personal traits and business traits appeal to them,” Crawford says. “If we can get that out of the individuals that work for our department heads, it’s a home run because they’re the people that have to do the entire day’s work with their peers.”
Furthermore, managers in the company can be more effective because they’re able to surround themselves with people who share their working style, whether it’s fun and laid-back like the BHG marketing department or more structured like in accounting. For example, the company’s lead treasurer, Angela, is always one of the first to get to work and last to leave, so she looks for this work ethic from everyone in her department.
“I can guarantee that she’s going to surround herself with people who are like her,” Crawford says. “It’s going to run in straight contradiction to her if you’re coming in at 9 a.m. and you’re leaving at 5 p.m. You’re taking an hour and a half for lunch ... It’s just not going to work. Angela probably works longer hours than I do. So if you’re in her department, you’re probably going to log some hours. And she’s got to hire. She’s got to fire.”
Hiring and mentoring people who share your values is important, but it doesn’t mean you want to fill your company with a bunch of “yes-men” either. That’s why Crawford always abides by the rule to hire intelligent people who are passionate about keeping the business innovative and thinking for themselves.
By developing and mentoring new leaders for the company, the partners grew BHG to $155 million in revenue in 2011, making the company a staple on Inc.’s list of fastest-growing companies, with six appearances in the last seven years. The company also received the Ernst & Young Entrepreneur of the Year 2012 Award in the Financial Services category in Florida — evidence that the new generation of leaders is carrying on the vision of its owners.
“We love to hire people that are smarter than us, that can bring ideas that we’re not bringing and that can just really push the envelope,” Crawford says. “In the future, we have the right people in place to challenge us daily, to come up with new products, to bring better solutions to the customer. And with those solutions, you’ll see a growth in business.” <<
How to reach: Bankers Healthcare Group Inc., (866) 297-4664 or www.bhg-inc.com
- Recognize when you need to transfer responsibilities
- Delegate some duties to a new employee
- Encourage managers to hire and mentor people like them
The Crawford file
Chairman and CEO
Bankers Healthcare Group Inc.
Born: Troy, NY
Education: BA from Gettysburg College, 1984
On being a worry wart:
I’ve been told that, ‘Geez Al, you worry a lot’; and it’s interesting, because Bobby [Castro] – he doesn’t worry. He’s so type A. The glass isn’t half full with Bobby. The glass is 7/8 full. And so that’s been a real help for me, because I’m a positive person. But a positive person can still worry about what’s coming around the corner.
What’s the best piece of business advice you’d give to another leader?
I don’t think it’s bad to worry and to be concerned that the world changes daily now. You have to be concerned. There are so many things that don’t last forever. For me it’s been a trait of always looking over my shoulder to see what might be coming at us from behind us and worrying about that, yet still not dwelling on that.
You’ve got to be positive. You’ve got to be thinking outside of the box. And I think the two traits go well together, where you’re willing to push on your people and willing to push on yourself…because nobody wins the Super Bowl every year.
On trusting your partners:
It’s trust in what they’re bringing to the table to the company. I’m dealing with two brothers who are 66 percent. People say to me, are you ever concerned about that? Could you be voted out? It’s not even a thought. They trust my opinion. They respect my opinion when it comes to growing the company, being the CEO of the company. And I feel the same exact way about them as individuals.
On loving what you do:
We’ve never been interested in even looking at a sale of the company because to sell the company and then have a non-compete clause and have to do something else – we like what we’re doing. To a point that might be not a good thing because maybe there’s a time where every company should be sold, but for us, it’s kind of like; well, what else would we want to do?
When Joe Peilert came on board at Veka Inc. in 2010, the company was 2½ years into a more than five-year building recession. The company had gone through its first layoffs in its 30-year history, and it seemed there was no end in sight to the shrinking construction market.
Veka Inc. is a 500-employee, $110 million manufacturer of PVC and vinyl extrusions for residential and commercial windows, doors, fences and decks. As the number of homes being built in the United States continued to decline, Veka saw some of its customers shut their doors and its competition struggle to stay in business.
“By the time this was all said and done, 75 percent of the market was gone,” says Peilert, Veka president and CEO. “You’re looking at the peak of 2 million homes being built a year, down to 405,000 homes in 2011. It was a massive breakdown of opportunity.”
Peilert and his leadership team had to act to ensure Veka wouldn’t be the next company closing its doors.
“When you’re in a situation like that, morale is a challenge with employees and customers alike,” Peilert says. “That wasn’t something that was exclusive to Veka. It was a very tough emotional state for people because they were used to growth and success.”
As Veka’s new CEO, Peilert needed to do his due diligence within the organization, which gave him an opportunity to evaluate the business and gain a strong understanding of its operations. However, he had the added pressure of an industry that kept slipping more and more.
Here’s how Peilert identified key areas of strength for Veka and created opportunities within a shrinking market.
Evaluate the business
Peilert has spent a majority of his career in the building materials industry. He was attracted to Veka because it was a quality leader in the industry, and as a family-owned business, it provided a unique working environment.
“It’s a family-owned group with a global presence, which is a great mix because you get a long-term commitment to growing the business and what that provides to me is what I like to call the luxury to make the right decisions,” Peilert says.
“A lot of times you find companies with a three- to five-year horizon, and if you go through a recession, you can bet you start cutting maintenance, you start cutting people development, expenses and things like that.
“With the type of view we have for growing a business bigger and stronger for the next owner generations, you continue to do those things through difficult times and that is very attractive.”
Peilert took advantage of that luxury to make the right decisions. He addressed the people at Veka to share his plan for moving the company beyond the building recession.
“We gathered around 60 managers and supervisors here, which gave me the opportunity to introduce myself and talk about mainly what I considered to be key ingredients for a successful organization,” he says.
“What it boils down to are mainly two things — No. 1 is people who care. They care about the company, the customers and the co-workers. The second element is a well-defined strategy and an execution plan that’s linked to it. If we have those two things going in the right direction, it doesn’t matter what the industry and what the economy does; we’ll do well.”
Once he had met with key people he spent the rest of his first week listening.
“You have to spend time with the employees and with the customers and allow them to talk about their ideas, their concerns and their perspectives because you’re a sponge during that time,” he says.
A big part of what Peilert soaked up was the condition of the company’s customers and competition.
“With the customers, there was quite a bit of consolidation going on in the market,” he says. “As you can imagine, there were a number of people going out of business, so for us it was important to understand if we were aligned with the right people, both from a culture business philosophy point of view, as well as their approach to the market and product positioning.
“We wanted to make sure we provide them the right products. Our design capabilities that we have in-house allowed us to help our customers to transition from a new-construction-focused business into a renovation-focused business. That’s where we spend a lot of time proposing new concepts that help them get into those markets faster and more successfully.”
Peilert also had to fully understand the company’s three stakeholder groups — ownership, customers and employees — which he relates to a three-legged stool.
“There is an inherent balance to the system and the fact is you can’t neglect one group over an extended period of time because you introduce imbalance, and ultimately, that three-legged stool collapses or you fall off the stool,” Peilert says.
“You’ve got to understand the needs of those three groups and make sure that you address them in a balanced way. Understanding that inherent balance and managing that is the key.
“Once you’re there, you can never undercommunicate. You’ve got to constantly be visible, approachable and building trust all the time.”
Rally your team
Building that trust was crucial as Veka employees watched the building market continue to contract and began questioning whether the market would ever get better.
“Ultimately, communication is key in bad times more so than in good times,” Peilert says. “You need to be honest with people and you cannot overpromise. That is really dangerous.
“If you overpromise, then you lose your credibility and then you lose the buy-in and the business culture of the company is also being damaged.”
Peilert spread a message to the employees of Veka that he wanted to see them show an ownership and can-do attitude.
“You always find the people on any given day who will talk about the Steelers and find the negative things,” he says. “That’s really dangerous if that is prevailing in an organization. Fortunately, we have a lot of people, based on their seniority, that had seen the good times and they understand that this is a phase that, at some point, will come to an end.”
Not all of the employees were able to view the market situation with that mindset, so Peilert had to make sure he was allowing employees to voice their concerns.
“You can give company updates where you stand in front of 100 people, but the more effective way, while it takes a lot more time and effort, is to have those one-on-one interactions,” he says. “You get some good quality discussions and people talk about their concerns. They listen and they are not afraid to ask questions. That in my opinion is the best way to reach people. You’ve got to walk the plant.”
That kind of attention to individual employees greatly helped Peilert in the buy-in process. To get his management team on board, Peilert took them for an off-site strategy meeting at Fallingwater, a groundbreaking mansion that Frank Lloyd Wright built over a waterfall in the Allegheny Mountains.
“We took a tour of the building, and it became very obvious that the man had a phenomenal vision and an exceptional amount of focus on detail,” he says. “We said, ‘That’s how we want to approach our business and that’s how we want to develop strategy.’
“The second day we started mapping out our game plan going forward. People got a sense for how we wanted to tackle the business and certainly were inspired by the building and the thought behind it. If the management team has a can-do attitude and shows that ownership attitude, at some point, everyone else in the company will follow that lead.”
To truly rally your employees behind a new direction aside from company meetings, one-on-one discussions and strategy sessions, you have to celebrate your small wins.
“You show people you are hitting the milestones and when you hit those milestones, you’ve got to talk about them,” Peilert says. “You start building the confidence and building the momentum.”
To keep momentum going, Veka had to make several changes to account for what was happening in the industry. The company closed a location in Youngstown, Ohio, and converted its Canadian operation to a warehouse and logistics center to retain critical mass at key sites. It also made adjustments to personnel to help the company head in the right direction.
“Some of that was done, but there was quite a bit of work left to do in terms of looking at both cost and business development,” Peilert says. “At the end of the day, I made it clear to my management team that you can’t cut yourself to prosperity. With that being said, we said, ‘We can grow share and we can grow in bad times. We just have to have the right approach to the market and the right products.’”
Peilert started to break down the critical success factors in each area, one being cost management and the other being new business development.
“Once we had identified them in a fishbone diagram [which identifies many possible causes for an effect or problem], we started to break them down into further detail,” he says. “Once we had the detail, we started to put initiatives behind them. Once we had the initiatives, we attached them to a SMART execution plan.”
SMART is a big initiative for Peilert and the company. It’s an acronym that stands for specific, measurable, achievable, responsible and time-based.
“Once we started breaking this down into individual initiatives, people said, ‘That is achievable. That is realistic,’” he says. “Once we started to see traction on some of those projects and we had the additive nature of those initiatives, people started to gain confidence again.”
There wasn’t a magic trick or a rabbit that Peilert pulled out of his hat — it took rolling up his sleeves and clearly outlining performance expectations.
“I think that helped once people understood very specifically what they need to do to succeed in their job,” Peilert says. “In many cases, that’s not been properly defined. You typically see performance improving once you measure and once you set a target. So we spent quite a bit of time establishing metrics.”
The company focused on quality ratings, internal metrics and specific improvement targets aligned with the philosophy of SMART.
“We wanted to make sure that they were achievable, so we broke them down in quarters and showed a step-up improvement,” he says. “Those were key elements that people say, ‘I can do that over the next quarter. And if that’s possible, I can do it again the next quarter a little bit better.’”
Breaking objectives down into bite-size goals made a big difference. The key is being able to define your core business and put resources behind opportunities that will move the business forward.
“You start off by defining what your core is,” he says. “That’s always worthwhile revisiting and putting on a test vent. Once you’ve done that, you want to make sure you fund your biggest opportunities properly and put the right people behind it.
“It’s not always the biggest account that deserves the best person, but it will always be the biggest opportunity. Ultimately, you just have to spend time in the market and understand the leverage and the levers you have for success.”
Veka’s hard work paid off through a 56 percent reduction in quality claims, the signing of new business and a good growth return. So far, 2012 has been a good year.
“What we are seeing in 2012 is the beginning of a slow but steady recovery,” Peilert says. “People are starting to create households again and that’s how home construction benefits. It will not be a return to the 2 million unit residential homes, maybe we’ll never achieve that again, but it’s now a stabilized system that has experienced some slow and steady growth not based on government programs but based on recovering market strengths.
“For Veka, we are very excited about some of our partners that we have and our customers in the market that we’ve been able to work with on new designs for products that zero in on energy efficiency, sound insulation and impact resistance. Those are all big trends and big needs in applications that will help us grow faster than the market.” <<
How to reach: Veka Inc., (724) 452-1000 or www.vekainc.com
Evaluate and understand your business and stakeholders.
Develop a strategy and communicate expectations.
Implement your plan to head in the right direction.
The Peilert File
President and CEO
Born: Altena, Germany. I came to the U.S. in 1991.
Education: Has a Diplom Oekonom/MBA in business and economics from Ruhr-Universitat Bochum
What was your first job, and what did you take away from that experience?
I worked in my dad’s CPA office. I did classic, old-style accounting with a big journal where you had to write every entry in. That gave me a sense for the complexity of business, but also the need for accuracy and execution.
What advice would you give someone else stepping into a new CEO role?
For me personally, I’ve always strived for having the freedom to shape the direction of the business. There is a saying one of my mentors always said, which was, ‘It’s better to be the head of a mouse than the tail of a lion.’ It was always attractive to me to rather than work for a large organization to work in an organization where I can impact the structure and reach the people. I would recommend to a CEO to be the guardian of the company culture because that is a very precious asset.
Who is someone you admire in business or leadership?
I look up to George Washington. I have a painting of Washington crossing the Delaware in my office, and to me, that is the essence of leadership. If I look at my career, the founding CEO of Ardex, Herbert Goller, was a great mentor to me.
If you weren’t a president and CEO, what is something you have always wanted to do?
One day when I retire, I could see myself teaching.