Regardless of what products you’re selling, we’re all really in the people business, aren’t we? And as a business, we are really only as good as the people running the ship. Needless to say, attracting the best people and keeping them inspired to perform at their highest potential is one of the most important things you can do as a business leader.
Not only is recruitment expensive, but it is also time-consuming, which is why it makes great business sense to get it right the first time.
Commit to the fact that it will take more than just your human resources department to create a top-performing team. Recruiting is part of everyone’s job, and the company culture should reflect the importance of it. At Moe’s, we make the interview process a priority. No fewer than seven associates interview, regardless of what position the candidate is interviewing for.
Use a list as a guide
It all starts with the job description. You know the skills and experience it takes to perform a particular job, but what does that job look like when performed by a superstar? What skills and what personal attributes are most critical in order for a person to exceed expectations in a particular role?
Identifying what is needed, prioritizing and committing to not settling for less will help you get the right candidates through the door. Use the job description to guide the interview process. Get the interviewing team aligned around what to look for and around your intent to hire only the best.
Interview with purpose
Admittedly, I’ve been guilty of reviewing a candidate’s resume a few moments prior to the interview. It’s easy to get busy and let preparing to be a good interviewer slip. However, to get the most out of the interview process, do research on the candidate, follow up with references and ask the open-ended questions that will get at the skills that are most needed to be successful at the job.
Some candidates may have all of the required skills, but they may not be a strong cultural fit, which in my opinion is more important. At Moe’s, we often ask questions such as, “What do you enjoy doing on the weekend?” This helps us understand the candidate on a more personal level.
To combat that concern, have several key players on your team interview candidates, and take their feedback to heart.
Also, bring in as many people as possible for an interview. The more people you interview, the greater the odds that you’ll find the perfect fit.
Complete and repeat
Once you’ve hired the candidate that fits the top-performer description, the next step is keeping him or her happy. Typically, top performers are highly motivated people who are eager to make an impact on the organization and advance their careers.
Be sure your top performers know they are appreciated. They will enjoy added responsibility and will appreciate a company that offers a clear vision of the future and goals upon which they can measure their success.
The best part about recruiting great candidates is that they will attract other great candidates. Next thing you know, you’ll be surrounded by a team that is talented, motivated, smarter than you and ready to grow your business beyond what you thought was possible.
Paul Damico is president of Atlanta-based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 430 locations nationwide. Damico has been a leader in the food service industry for more than 20 years with companies such as SSP America, FoodBrand LLC and Host Marriott. He can be reached at email@example.com.
Talk about getting hit with severe hardship right off the bat. In 2008, SRS Real Estate Partners split off to become a standalone company when its parent, Staubach Co., merged with another real estate firm. Then, a month later, the U.S. financial crisis began and flipped SRS’s world upside down.
“We sold all of the Staubach Co. assets to Jones Lang LaSalle except the retail business,” recalls Chris Maguire, SRS’s chairman and CEO. “We closed the sale in August 2008. We were just starting to adjust to life without Staubach. Then we got hit with the financial crisis.”
Virtually all U.S. business sectors were affected by the subsequent recession, but two markets that suffered especially abrupt, deep and lasting cuts were real estate and retail. And those markets are SRS’s bread and butter.
“In the real estate industry, I think anyone would tell you that of the four food groups, the retail business got hurt the most, because it’s led by consumers, and consumers got hammered,” Maguire says.
“When retailers shut their pipelines down in September and October 2008, it resulted in dramatic revenue declines for our business. Our brokerage business, peak to trough, was off 60 percent. And that went on for about two years before we were able to stabilize our business.”
The downturn was a rude shock for SRS. The company found itself thrown back on its heels with business drying up and bad economic news coming from all directions.
“We weren’t sure where the world was headed, much less how we were going to adapt our business,” Maguire says. “It was a scary, unbelievably uncertain time for our business.”
Get back to basics
As SRS’s revenue began to take a dive in the last quarter of 2008, the company’s leadership team members got together and circled the wagons. The threat level they faced was hyper-urgent. They had to find a way to rally their staff and stanch the bleeding.
“The first six months was the worst,” Maguire recalls. “Today, I remind our people all the time about that: Don’t forget how bad it was from September 2008 to March 2009. We really didn’t know what was going to happen to our business.”
The first thing SRS’s leaders recognized they had to do was to guide the company back to the basics of what had made it successful during the two decades-plus that it had operated as a unit of Staubach Co.
“What we realized we had to do was drill down to our core business,” Maguire says. “And our core business at SRS is transactions. We receive fees when transactions are executed. As long as transactions are taking place, that’s how we get paid.”
The financial crisis slammed the retail sector hard, and SRS began feeling the reverberations immediately.
“It was unlike anything I had seen in my career,” Maguire says. “We started seeing retailers who for years had been growing their business by opening new locations not only shut down their new-growth pipelines, but they also were scrambling to figure out how to get out of some of the deals they’d previously committed to.”
Therein, though, lay a key to SRS’s chances to reverse the tide and get back on its feet. Transactions were still taking place in the retail real estate business. It’s just that they were transactions of a different type than the Staubach Co.’s retail division had been used to seeing in normal economic times.
“We were clearly going from a period of growth to a period of contraction,” Maguire says. “That meant our clients were going to need help on the disposition side — getting rid of dark stores, restructuring existing leases. And our landlord clients were going to be doing a similar type of thing: Trying to figure out how to lease their centers in a very uncertain economic environment.
“So we knew the market was going to be difficult for growth. As a result, we had to focus on where the transactions would be. We had to shift from being a business focused on retailers growing to a business focused on retailers shrinking.”
Manage tough transitions
While SRS’s leaders and staff members knew retail real estate transactions were out there, uncovering them proved to be a tough learning curve for the company.
“It was rocky,” Maguire says. “Really, for 24 months, it was very tough going for us.”
Exacerbating the business problems were issues of insecurity related to SRS’s parting with its longtime parent company.
“We were not only dealing with an uncertain economic environment and a continual stream of bad news as it related to the consumer and retailers, we also were dealing with a company that for 22 years had been part of the Staubach organization and was now split off on its own,” Maguire says.
“So we got the double whammy there. It was hard enough going through an economic period that none of us have ever experienced, but to compound it, we were trying to teach our people that life is going to be OK without Staubach.”
The former football star had been an inspirational business leader, and many in the company found it difficult to adjust to having new leaders.
“It was hard for some people to grasp that, for it to sink in,” Maguire says. “Roger was an incredible leader. He had a great reputation. Being part of that company was important to people. And, well, I’m not Roger Staubach; I don’t have a Heisman in my trophy case. But I’ve been in this business for a long time, and our management team has been together for a long time.
“So we had to focus on the details, and on stabilizing our business. We had to focus on teaching our people how to deal with the market and the realities of where the transactions in the retail business were happening at that time, which were very different than where they’d been for the last 20 years.”
During the recession’s deepest depths, staff morale was a particularly tough issue to deal with for SRS’s leaders.
“We’re in a business where most of our people on the SRS side are independent contractors,” Maguire says. “They’re brokers that get paid commissions. It was hard to motivate them, as well as our own employees, when all they read in the papers every day and all they watch on TV is bad news. They walk into the office with their head down every day.
“We had to find a way to show them that, ‘Look, you can’t think about this day to day. You’ve got to ignore the bad news. You’ve got to come in here and focus on what you need to get done. We’ve been doing this for a long time. We’ve been through a number of cycles, and we will get through this. But it’s going to be tough, day to day. It’s going to be a marathon.’ And that’s clearly what it turned out to be.”
Focus on the achievable
For a few months, Maguire and his leadership team found their own morale running low, and that made it extremely difficult to motivate their staff. They learned that they would have to dig deep to find reserves of strength and hope within themselves.
“It was hard because none of us had ever experienced a downturn like this,” he says. “There were times early on when I stood up in front of our company and said, ‘Look, we’ve got to focus on our core business; we’ve got to focus on our history and our track record and the fact that there will be transactions there; if we do these things, we’re going to be OK’ — and for about six to eight months, I’m not sure I even believed it. But I had to get up there and project a positive attitude.”
Concentrating on taking small steps and improving the company’s standing little by little was an approach that began to turn the tide for SRS.
“There was nothing we could do at that time that was going to dramatically slow the decline in our revenue or stop retailers from shutting stores and from shutting off the new growth,” Maguire says.
“So we had to focus on small, achievable goals and wins. I looked at the situation and said, ‘Any progress we can make day to day is important.’ At the beginning of the downturn, five out of five days in the week were bad days. My goal initially was to just find a way to have one good day a week, then two good days a week, then three good days a week.
“Even in good times, not every day is going to be a success, and you’re going to have problems. But we really had to get our people focused on, ‘OK, what are you going to do today? How can we make a difference with these clients who we’ve had long-term relationships with, who still need our help — they just need it in a different way?’”
Not everyone was able to adapt to the new business realities that SRS faced. Some of the company’s longtime staff members found themselves unable to make the transitions that needed to be made.
“We had some people who had rode the wave for a decade,” Maguire says. “They were surfing a wave that was cruising along, and all of a sudden, that wave hit the rock shore and was gone, and those people got up in the morning and said, ‘What are we going to do?’ Our management team’s message to them was, ‘There are transactions out there. These retailers need our help. But you’ve got to get out and you’ve got to be proactive.’ And I’ll be honest with you: We had a number of people that had been very successful with our company that couldn’t hack it. And they had to go do something else.”
Communicating with staff is a tough thing to do when all of the news coming at you is bad, and Maguire concedes that he didn’t communicate very well at the beginning of the crisis.
“It was hard for me early on,” he says. “I like to communicate a plan: Here’s what we’re going to do, here’s our goal, here’s how we’re going to get there, here’s how the company’s doing financially.
“But everything was really uncertain. And I think probably one of my biggest mistakes early on was not communicating up front and talking about all the bad things — the bad news, the uncertainty. I had to work through that.
“My management team and others encouraged me to spend more time talking about those things: ‘Look, these are the challenges, and frankly, if this revenue decline doesn’t stop, we’re not going to have a business. So here’s what we’re facing. Let’s figure out how we can overcome it.’”
Thus, Maguire says a key piece of advice he would give CEOs facing a similar predicament is to be transparent and to convey all of the news clearly from the outset.
“Communication is the most important thing,” he says. “And not just the good news. Not just, ‘We have a plan.’ It’s much more than that. It’s, ‘Where is our business today, really? Where do we stand? Good, bad or ugly, let me know where we stand.’ And then, ‘Let’s put a plan in place to fix it.’
“One thing I’ve learned that I’m not sure I really appreciated before is that employees really want and need to know. I was concerned that if I give them too much bad news, they’re going to curl up and not be able to accept it. But the reality is people are smart and they deserve to know the real news, not just the CEO rah-rah.”
Eventually, haltingly, after rocky transitions and some shakeout, the U.S. retail business began to recover. And SRS’s business began to grow again as well. The 350-employee company now has about $45 million in annual revenue.
“For us, stabilization came when we saw the bottom,” Maguire says. “Our revenue flattened out, and then we started seeing growth. In fiscal 2010, we grew our business at just under 10 percent. Then for fiscal ’11, we were at 12 percent. And this year, we think we’ll be at 15 percent or so.
“Historically, our target has been 20 percent growth. As you get bigger, it becomes harder to hit that level because the numbers are bigger. But for us, we’d love to get back to 20 percent. It’s a bit of a stretch for us right now, but that’s our goal.” <<
How to reach: SRS Real Estate Partners, (214) 560-3200 or www.srsre.com
THE MAGUIRE FILE
Name: Chris Maguire
Title: Chairman and CEO
Company: SRS Real Estate Partners
Born: Trenton, N.J.
Education: University of Texas at Austin
What was your first job, and what business lessons did you learn from it?
My first job was delivering newspapers here in Dallas. It forced me to be accountable. I had to be there every morning on my bike picking the papers up and putting them on the doorsteps of all the people in the neighborhood, because if you didn’t deliver, they weren’t happy.
Also, we had to go out and knock on doors and collect the monthly fees for the papers, and some of those people were hard to collect from, but if I didn’t collect, I didn’t get paid. So that was some early insight into how the business world works.
Do you have a business leadership philosophy that you use to guide you?
In our business, you have two things you have to protect at all costs: your reputation and your relationships. If you do that, and you build a track record, you’re always going to do the right thing.
What trait do you think is most important for an executive to have in order to be a successful leader?
You’ve got to have vision. People want to work at companies that are going to grow, that are exciting, and that can be leaders in their industries. And in order to have that, you have to have a vision that’s not Disneyland. It has to be a vision that you can actually achieve over time.
What’s the best advice anyone ever gave you?
Roger Staubach had a lot of good advice. One thing he said that has stuck with me over time is “There’s no traffic on the extra mile.” It’s about putting in extra effort and working a little harder, because most people don’t do it. Hard work doesn’t necessarily ensure success, but it goes a long way toward achieving it.
Northeast Ohio companies and employees were lacing up their cleats and getting in game shape this past summer for another year of the Cleveland Corporate Challenge coordinated by Hermes Sports & Events.
This year’s Cleveland Corporate Challenge set new participation records with 117 companies from Northeast Ohio competing in the summer’s 14 events that made up the challenge and 88 of those corporations competing in the Corporate Cup divisions, which included participation in all of the events.
Those weren’t the only records set in 2012. Additional record-setting performances included: a total of 1,462 teams, 56 corporations and 181 individuals volunteered to assist in the events, more than 50 industries were represented, an estimated 10,000 players and spectators enjoyed the challenge, 18 different venues hosted the events, and 19 different charities received donations from the challenge.
The Corporate Challenge events consisted of softball, skeeball, kickball, mini golf, dodgeball, flag football, cornhole, basketball, volleyball, bowling, tug-of-war, a 10K relay, an obstacle course and a 1-mile fun walk.
Corporate Challenge was broken up into six divisions based on participating company’s employee size. The winning companies in each division were: AXA Advisors in Division I, The Blind Pig in Division II, Majestic Steel in Division III, Titan Insurance in Division IV, Hyland Software in Division V and PNC in Division VI.
The Cleveland Corporate Challenge promotes employee wellness, teamwork and business networking among companies and their employees, while helping local charities in the community. Registration for the 2013 Cleveland Corporate Challenge will be available soon. <<
How to Reach: Hermes Sports & Events, (216) 623-9933 or www.hermescleveland.com/corp_challenge
At some point in the past few years, it hit Rick Dawson: He had hundreds of experts working in his business, but no one was really working on the business.
The president and CEO of Bal Seal Engineering Inc. had 450 employees around the world. Just about all of them were performing at a high level, helping to vault the industrial solutions company into an era of growth, while most businesses were dealing with the effects of the recession.
“That has been the good news for us,” Dawson says. “A lot of businesses have been struggling, but we have been growing at a rate of just over 15 percent per year.”
Last year, the company generated $75 million in revenue, up from $64 million in 2010. The sailing was smooth, there were no alarm bells ringing at the company’s headquarters. Bal Seal was in a rare place of peace amid tumultuous economic circumstance.
Yet, Dawson sensed trouble forthcoming if he let the company continue to ride on its own momentum. Specifically, he saw a company that could strain itself by growing too fast, and growing without a well-defined strategic plan.
“We have been expanding into new markets and new regions,” Dawson says. “That definitely puts a strain on your capacity and resources. So, working with our leadership team, it has been important to establish clear goals and objectives of what our on-time delivery expectations are, what our product development requirements are, what our sales goals are. Then, make sure everybody clearly understands the direction and measures those results.”
Dawson has worked with the leadership team at Bal Seal to formulate a strategic plan that could help the company better manage growth, but that is only part of the equation. He and his team have also needed to work tirelessly to create alignment on plan throughout the company’s associates, spread among offices in Colorado, The Netherlands, the Czech Republic, Hong Kong and Japan, in addition to the company headquarters in Foothill Ranch.
Start at the top
Like many businesses, Bal Seal organizes yearly strategic planning meetings. In those meetings, Dawson and his management team plot out the umbrella goals and objectives for the coming year. The companywide goals are then used to formulate goals for each division and team within the organization.
“We develop functional goals and objectives for our operations team, sales team, health and safety team, and so forth,” Dawson says. “Those are then put into even more specific goals and objectives.”
The goals and objectives are what Dawson terms “smart goals” — specific, measurable, achievable and realistic. Dawson wants his employees to stretch beyond their comfort zone at times, but not so far that they’re reaching beyond the realistic capabilities of themselves or the company at that point in time. Goals need to be ambitious, but still realistically achievable.
Dawson and his team monitor the progress of the departments in implementing the cascaded goals through a series of stoplight meetings, which got their name from the three-color system assigned to the progress level of each objective.
“It’s a two to 2½ hour meeting each month, and each department manager is responsible for reporting the progress on their goals,” Dawson says. “Green means there are no problems and there is nothing to really talk about. Yellow means you have a problem, but you have worked within your own departmental team to come up with a solution. Red means you have a problem and haven’t been able to come up with a solution. If you have an objective that you have classified as “red,” we can then schedule a separate meeting to assist in dealing with that problem.”
Though Dawson likes to limit the number of meetings throughout the company, he has found value in the monthly stoplight meetings, which have helped to identify and address problems before they become major issues that compromise the pursuit of a department’s goals.
“The operations team was working on an on-time delivery objective, and what they found was that they were struggling to get a specific order out on time,” Dawson says. “It was an aerospace customer, and we had lead time issues with getting materials in on time. Then on top of that, we were having capacity issues.
“But by communicating with the sales team, those of us on the management team were able to identify exactly what they were struggling with, and the history of the customer that were impacted.
“Once we did that, the sales team was able to step in and get some relief from the customer. We were able to explain the delay, which was resulting from raw materials that were delayed offshore. Once the customer understood, it provided relief to the operations team, which helped us get the orders ready on time.
“Because we were able to get together and talk about it, we were able to identify the customer and the problem, and the problem was resolved before the product was late to the customer.”
As the layers and locations within your company increase, creating and maintaining alignment on organizational objectives becomes a more difficult and more involved task to accomplish. With 450 employees, Bal Seal doesn’t face the communication challenges of companies that employ many thousands. But with locations around the world, the management team still had its work cut out.
To help strengthen alignment, Dawson does what a lot of CEOs do: he logs air miles, visiting each of Bal Seal’s facilities twice a year, and having in-depth meetings with the facility directors at each stop.
“It’s important that you’re promoting the message to everyone, from the machinists to the managers,” Dawson says. “I also want to reinforce the messages laid out in our plan at the start of the year. We know at the beginning of the year what the schedule is for Europe, for Asia, but it is a constant challenge to make sure the staff remains aware of it, and is kept up to date on what is going on.”
There is a limit to how far down in an organization a CEO can, and should, reach. If the company is large enough, your place is not managing the factory floor. But you still have to construct a system that allows you to connect with everyone in the organization, from the top to the bottom.
If you can keep your finger on the pulse of the mood and attitude of your lowest-rung employees, you are in a much better position to determine whether your messages are permeating every layer of the company. You are also in a much better position to cut off the rumor mill, should issues arise.
“For example, we’re currently building a second facility in Colorado Springs,” Dawson says. “When I said we were building a new facility there, what everyone in the company heard was,‘We’re moving the company to Colorado Springs.’ That wasn’t the case. We’re expanding there. That’s where having a means of staying connected to everyone in the organization is so important. I had to reaffirm that we’re continuing our growth and expansion, not relocating.”
Dawson didn’t have to reinvent the wheel every time he presented the message to a new audience, but he did have to tweak it in a manner that addressed the questions and concerns of whichever group within Bal Seal was receiving the message.
“It’s important that you’re promoting the message to everyone, from the machinists to the managers,” Dawson says. “To the machinists, you’re promoting the idea that the expansion allows for more job security. You’re soliciting input from the managers, and on the executive level you’re promoting the vision for the overall corporate goals, and the deliverables in order to achieve those goals.
“The communication and interaction is something constant, something that you can’t push into the background.”
Another aspect of alignment centers on the widely-held business truism, “What gets measured, gets managed.” If you want to create alignment around organizational goals, you need to create universally-understood methods of measuring them. Usually, that means measuring the statistical categories most important to the success of your business.
“I measure cash, I measure sales, I measure on-time delivery, and I measure safety, which is my number one category,” Dawson says. “So you’re monitoring those on a regular basis, and talking with your managers about it.
“You are going to view your management team as something of a mouthpiece, since you can’t be everywhere at once. So you have to help them stay aligned on the plan, and monitor what they’re saying to their teams. You just continue to provide guidance.
“If you manage the relationships with your managers, you can better manage the flow of communication throughout the company. You oversee those relationships with your managers by ensuring that you are comfortable, and they are comfortable with the vision and direction, and thoroughly understand it.”
Build your team
Consistency is one of the biggest keys to maintaining a message for a large audiences over an extended period of time. That means consistency in how you communicate, when and where you communicate, but it also means maintaining consistency in the structure of your management team.
Turnover will occur. If a member of your team is talented and driven enough, and has reached a ceiling in your organization, that person will likely leave when a better opportunity comes along. So it’s prudent to develop new leaders from within.
When the time comes to fill a space on his management team, Dawson prefers to promote internally, looking outside the organization only when he believes there is a need. Internal candidates have proven that they can help promote and execute the strategic plan. But even when promoting from within, it’s not an exact science when looking for those who have the right competencies and right attitude.
“You break your people into quadrants,” Dawson says. “There is willing and able, willing and unable, unwilling and able, and unwilling and unable. Obviously, you’re looking for willing and able. If you have someone who is willing and unable, you have a performance issue. If you have someone who is unwilling and able, you have to see if you can educate them in the process. If you have unwilling and unable, you’re probably not keeping them.”
To hit for the highest possible willing-and-able average, Dawson wants to see prior evidence of accomplishment, creativity and integrity in the work experience of job candidates.
“A lot of people will come into an interview and say ‘I’ve been the manager of sales,’ but when you ask them how they ran their sales organization, when you ask them about their vision and direction, they can’t get down to specifics. If that’s the case, they’re probably not the right fit for the organization.
“After you hire someone, you’re continuing to assess them. You’re working with the person to set goals and objectives, and if they’re complying and conforming, you’re doing great.
“If you are seeing a continuous pattern of not meeting goals and objectives, then you have to be willing to be very honest and candid with the person, explain to them what the issues are, and from there, you can assess the next level of whether they’ll be a fit for your organization moving forward.
“But it is important to continue to work with the person to help them succeed. Building a team is a continuous process of communication and direction.”
How to reach: Bal Seal Engineering Inc., (949) 460-2100 or www.balseal.com
The Dawson file
President and CEO
Bal Seal Engineering Inc.
Education: Mechanical engineering degree, California State University, Long Beach; MBA, Pepperdine University
What is the best business lesson you’ve learned?
The No. 1 rule I’ve learned is that you can never run out of cash. You need to have liquidity in the business. You also need to have an ability to make strategic and tactical changes. If you have a strategic plan, implement it and then measure it.
What traits or skills are essential for a business leader?
I think the No. 1 thing is communication. On top of that, you need perseverance, because things don’t always work out the first time. It is also important that as a leader you are willing to take the time to understand your people and communicate with them.
What is your definition of success?
To meet the plan you set out to accomplish. If you want to grow the business at a certain percentage, success is meeting that number.
Frank Venegas Jr.’s company, The Ideal Group Inc., was facing what you would call, well, not an ideal situation.
The year was 2008. Even if your company didn’t file for bankruptcy or face an existential threat, you probably had a bottoming-out point about that time or thereafter. At some point, your company probably reached a nadir, and you knew the only place to go was up.
The Ideal Group’s low point came when the company had to slash nearly 14 percent of its workforce. For founder, chairman and CEO Venegas, the staff reduction was a fork in the road. He could have chipped away at his staff little by little, reducing the short-term trauma level, but potentially forcing his company to go through multiple rounds of demoralizing cuts.
Or he could take the lump-sum approach, get it all the cuts over with at once, causing more short-term trauma, but beginning the healing process sooner.
Venegas chose the latter approach.
“At that point, we were probably operating the company at 30 percent larger than what it needed to be,” Venegas says. “What we told everyone was ‘Here is where we are at, we are going to cut it really hard and heavy, and we are going to do it one time, instead of doing it every month.’ And we were fortunate because we were able to hold true to that. We did it once, and we held on.”
As the saying goes, laws are like sausages; you really don’t want to know how they are made — you really don’t want to know how staff cuts are made. It’s a stomach-turning process for just about every business leader to decide why one group should remain employed and other group members should lose their jobs.
But in uncertain times, information is your company’s lifeblood. Venegas quickly realized that if his industrial manufacturing, distribution and solutions company was to recover and emerge stronger, he’d have to lead the way.
That meant keeping his remaining employees in the loop regarding the company’s status, why the cuts were happening and, perhaps most importantly, the reasons to get excited about the future.
“You can’t do much about the short-term morale of the remaining people,” Venegas says. “The only thing you can do is keep them up on what you’re doing as a company, and be honest and forthright. You try to give them new opportunities whenever possible, and really establish an entrepreneurial culture where people have the ability to try new things and make some mistakes along the way.”
Create a culture
Employees do come to work for a paycheck. They rely on your company for the money that provides food, shelter and other basic life necessities. So to say money has nothing to do with fulfillment of employees is flat-out wrong. Money is a factor.
However, it’s a basic factor. If you can’t provide competitive wages, the discussion regarding talent retention ends there. But if you can satisfy an employee’s financial requirements, employment does become about something else.
In short, once the money matter is settled, fulfillment is a matter of engagement. Employees want opportunities to think, create and innovate. They want a leadership group that is responsive to their input.
Employee engagement is increasingly critical when a company has to do more with less.
Ideal’s staff cuts were the product of a customer base that was about 70 percent automotive. When the U.S. auto industry took a historic nosedive during the depths of the recession, the ripple effect hit Ideal. While the company was able to endure the shock better than some of its competitors, sales slipped to under $100 million in 2009, making cuts necessary.
While those left behind had to deal with the collective morale damage and other fallout, Venegas saw an opportunity. Ideal had to do more with less, but the opportunity was there for his remaining staff to flex its entrepreneurial muscles and demonstrate their versatility.
Entrepreneurship is something that has always been a part of Ideal’s culture, but Venegas realized the time was right to embrace the concept anew.
“When you walk in here, and see the way the company looks, the way we run the company, it doesn’t take you a long time to realize that we are a highly entrepreneurial and change-oriented company,” Venegas says. “We’re like a Silicon Valley company in that we do things far differently than anybody else.”
The key to developing and maintaining a focus on innovation within a company is to educate employees, which is as simple — and as complicated — as communicating with them. You have to reveal your vision, your strategy, your methods and, when possible, your financial numbers, to your people.
If you can paint a detailed picture regarding where the company stands, and where each person fits into the larger picture, you stand a much better chance of motivating employees and keeping the idea stream flowing.
Venegas likes to keep his employees apprised of where the company stands financially, whether the numbers show a profit or a loss. Though some leaders might look at a financial loss and see something that would damage employee motivation, Venegas believes the act of informing employees is a motivator in and of itself.
“You get people to buy into an entrepreneurial culture by making money,” he says. “So for our purposes, we want our people to know whether we are making money or not. We run a monthly financial statement for each of the six companies that we have, and those are reviewed not only by senior management but also by the people who lead those companies — which we call BUMs, or business unit managers. They are in charge of their balance sheet, P&L and the whole deal.
“You just make it really clear for everyone to see whether you are doing well or not so well. Everybody should be able to hold their eyes open and take a look.”
Informed employees have a better idea of how to formulate new ideas that walk in step with what the company needs. They feel more empowered to take calculated risks, live with the consequences, and if the plan fails, to turn it into a learning experience for next time.
“We don’t box many people into any particular role,” Venegas says. “My brother and I own the company, and I guess we were taught how to take things apart and put them back together. A lot of times, if we didn’t need this part or that part for a given project, we didn’t get it.
“So we were always looking at how we could build things faster, less expensive and more reliable. That is a concept we’re always trying to pass on to our people here.”
Feed their careers
Venegas believes employees want four things out of an employer, apart from financial compensation: consistency, opportunities to express their ideas, opportunities for promotion and the chance for longevity.
“My CFO just celebrated her 15th anniversary here,” Venegas says. “When she initially came to work for me, she was a graduate intern from the University of Michigan. Obviously, she wasn’t the CFO when she first started, but she grew into that position, she demonstrated great learning habits, and it has been a real blessing to have her here.”
To Venegas, the long tenure of his CFO reinforces the importance of career development as an employee motivator. In particular, Venegas values hands-on employee development that coaches his team to think, create and innovate in a real-world setting, formulating ideas that will be relevant to the company moving forward.
“Our career development operates every single day,” he says. “We are a very well-managed company. The key, I believe, is to set your missions in a very clear way, establish performance metrics and go through them frequently. We go through them not only on a monthly basis, but on a weekly basis.”
Venegas also has his team conduct frequent meetings. Though many business heads view meetings as one of the biggest time-wasters on the company schedule, Venegas still sees value in getting a group of people together in a room to exchange ideas, and share what is working and not working in the company’s operations.
“People say meetings are a waste of time, and that is their opinion,” he says. “But here, it really gives us time to open up and talk. Here, our meetings are pretty open, and you can say what you want. When someone proposes an idea for a new project, we start out with a white board, and begin listing the pros and cons. There is no particular recipe regarding the how and why of the projects we pick, the things we are going to go after.
“But I do find that it is pretty apparent over the course of the meeting whether it makes sense or not. We can generally see whether we’re filling the white board with reasons why we should do something, or reasons why we shouldn’t do it.”
As long as the conversation remains respectful and all viewpoints are considered, Venegas says his team will come to a consensus on how to proceed. If there are any disagreements or conflicts, those have to be addressed in order to get everyone back on the same page.
Motivating employees means respecting them — their work, their opinions, their careers, their ideas. Venegas has promoted that viewpoint at Ideal, and it has helped lead the company out of the recession to $201 million in revenue last year.
“We look at our company values during our meetings, and our mission statement, and from there it’s really not that hard to put together what we have to do in order to be a success. I remind our people — and sometimes, I have to remind myself — that we went through this whole recession, and we’re still here. We remain strong, and we didn’t have the problems of some of our competitors and other companies.”
How to reach: The Ideal Group Inc., (313) 849-0000 or www.weareideal.com
The Venegas file
Frank Venegas Jr.
Founder, chairman and CEO
The Ideal Group Inc.
History: I started the business 33 years ago because I won a Cadillac in a card draw. I sold it a few days later, took the money, put it in my banking account and started Ideal.
What is the best business lesson you’ve learned?
My grandfather always told me that if you do what the boss doesn’t want to do, you’ll have a job every time. Also, you need to create a reason why you’re in business. Do what someone else in the market isn’t doing. You could be in the window-washing business, but it might be how you present yourself. Maybe it’s how you let customers inspect the final product. But you do something a little different, and that draws the customers back to you.
What traits or skills are essential for a business leader?
Have integrity and don’t lie. I’d say that’s the most important thing by far. Once you’re not honest, no one wants to work for you.
What is your definition of success?
Being happy in anything and everything you do and seeing everybody around me fulfilled. I lost $18 million on a business deal in 1998. I did something that I should have thought harder about. The company made it back, not because I was a great leader, but because of the people who work for me. It takes a whole bunch of effort from a whole lot of people to keep a company happy.
Craig Clark is one of several general managers who have held the position at The Rivers Casino within its first three years of operation. But that inconsistency at the leadership role has made it hard to create programs that benefit the casino’s customers as well as its employees.
The Rivers Casino, which opened in 2009, has more than 1,800 employees and saw 2011 revenue of $434 million. Clark, who became GM in June 2011, has been focused on enhancing both the customer and employee experience to make the casino a better business overall.
“The key is really consistency of leadership so you can put together programs with the community and programs within the facility to allow team members to grow and advance,” Clark says. “I think that’s the key to my leadership. In the gaming industry some people move around, but for myself I like to be located at one facility for quite a period of time.”
Before coming to Rivers, Clark spent nearly 15 years at Turning Stone in upstate New York where he was able to develop the facility.
“That’s where I spent most of my career, and we had a complex there that we kept adding to for years and years,” Clark says. “(In Pittsburgh) we have a great complete facility that we keep creating different entertainment experiences within and reasons for our customers to come and visit.”
Currently, Rivers Casino has 80 table games, 30 poker table games and 2,970 slot machines. It also includes five different food and beverage outlets, a banquet space and three bar locations on the casino floor. All combined, there is plenty of opportunity to impress guests with customer service and create programs that motivate the employees.
Here is how Clark is driving customer- and employee-related initiatives.
Develop key programs
In an industry where excellent customer service and employee training are staples of operating a business, it isn’t enough to simply talk about having good service. To ensure customers are treated well and employees get opportunities to advance, you have to implement programs that keep service and training as a top priority.
“We have a variety of different programs here at the property,” Clark says. “We’ve introduced a 12-Star program, which is a program for our young business leaders to learn more about all operations of the facility.
“We have leadership training components within that training program. We have accounting practices. We have how to do a review and give good feedback to team members when you give them their annual review. It’s a 12 different part program.”
While one program may be aimed at learning all aspects of the casino business, other programs offer employees a chance to learn what it takes to perform specific jobs.
“We have a dealer school here where people from outside can interview and be trained as dealers and team members who are currently dealers can learn other games that they might not have perfected to date,” he says.
The casino also has programs aimed at recognizing employees who are going above and beyond the expectations of their jobs.
“We’ve put in a program for team member of the month and we have team member of the year, where both an hourly and a salaried team member are recognized for their great contributions to the facility,” he says.
“We are also putting together right now a supervisory leadership training program focusing on how to ensure our supervisors are consistent and thorough in their coaching and their mentoring of team members so we get the right consistency throughout the organization.”
While setting up a program is one thing, continuing to improve it and make necessary changes is another. The key is to view it as an on-going process.
“It doesn’t start one day and end another day,” Clark says. “It’s actually a process that you have to live and breathe and it has to be part of your business soul. You need to focus on it each day because as a leader, the team members are looking at you as the example.”
When you can listen to employees and listen to their ideas and make a positive change, that’s how these programs are developed. You have to ensure your team continues to focus on service levels because it’s not lost on clients, customers or guests.
“Our guests have such a high expectation of coming here and they all want to be treated as if they’re that special person; our goal each and every day is to ensure that we do that and they walk away with a memory and an experience of coming here to the Rivers,” Clark says.
One of the biggest reasons Rivers Casino has the amount of opportunities available to its employees is to offer them a chance to grow and learn about the whole business. This creates employees who thoroughly enjoy what they do and strive to be well-rounded.
“Sometimes people are narrowly focused and I think the more that you can explain to them or educate them on more parts of the business, the more valuable they become to your organization,” Clark says. “If a dealer understands how the marketing promotions are being created and what our goals are with those programs, they’re our salespeople that are out there each and every day and it just makes them more informed and better team members and better guest service professionals.”
To help encourage employees to become well-rounded, it is crucial that you provide outlets for them to be recognized.
“Those types of programs start from one-on-one contact with team members and ensuring that you recognize them as you walk around the facility and thank them for their hard work,” he says. “That’s something that business leaders need to continue to focus on because that pat on the back is one of the best rewards that a person can have each and every day if somebody can have that personalized recognition.”
Another way to develop your employees is to establish expected criteria and highlight the individuals who provide strong examples of the attitude, behavior and work ethic you expect.
“When you look at human resource programs, we try to create the criteria that establish what the right business behavior for a team member or team leader is,” Clark says. “We want to take those people who are examples of that behavior every day and put them on a pedestal so people look at them and say, ‘Matt is a great guest service deliverer every day. He walks the walk and coaches team members.’
“He is an example that they can look at for that consistency. Consistency is the hard part in the hospitality business because things happen in your personal life and when you come to work you have to shed anything that’s not positive and ensure you put that smile on your face and be positive and proactive in what you do at the workplace.”
Strong employee development ultimately comes down to how much employees want to help themselves become better. If you can get your employees to want to achieve greater things and you allow them outlets to suggest improvements, you create a culture that fosters continuous improvement.
“Quite often some of the best ideas come from listening to your team members,” Clark says. “Keep an open mind. I’ll walk the casino floor and some of the best ideas I get are from team members who come up to me with suggestions or ideas that were passed on from a customer. You have to take those ideas, and as a leader our job is to align the resources, when practical, to implement those great ideas.”
On a quarterly basis Clark does something he calls “communication corner” where he sets up a table in the team member cafeteria for all three shifts to get their input.
“I ask them for their ideas, suggestions and concerns because a third of the ideas come from the leadership team and their experience, a third comes from our team members who are in the workplace each day and a third comes from customers,” he says. “So I can get two-thirds of the knowledge I need by just listening to our team members.”
An outlet such as Clark’s communication corner is a great way to gain access to employee’s ideas. However, the key to continuing that practice is to show them you are acting on those ideas.
“A lot of it is listening to those ideas and then having the team members see the change,” he says. “That openness to listening as well as showing action, positive actions reinforce that behavior. It’s like anything else in life, if you’re an athlete or if you’re a business leader, you have to exercise those behaviors. As business leaders we have to exercise the behavior of listening and we have to exercise the behavior of implementing the things that are practical to our businesses and cost-effective.”
Drive customer service
The concept of customer service seems simple on the surface, but to achieve it and be a leader at it your company takes the right employees first.
“One of the keys is starting with the selection process of the team member,” Clark says. “The next most important thing is we have a two-day orientation here at the property. Part of it is going through policies and part of it is really talking about hospitality and talking about our guests and the expectations of our guests.
“Also, it’s how we ensure that we are focused on those good behaviors to make it a great experience for the guests when they come here and how all the systems work.”
An orientation program is a key way to set the tone for someone arriving in the company. It gives employees a good overview of the type of businesses that they’re entering in to and ensuring they’re the right person. The casino doesn’t stop there.
“From that, we have a 90-day checklist program which really follows the job description and what their core functions are as a team member,” Clark says. “We make sure we go through that checklist to ensure that we have good training programs set up to ensure that they focus on the job function, the quality and the service.
“Those types of things tend to work out well where team members really understand the expectation and deliver the best results.”
To measure whether employees understand their job and are delivering desired results, it is important to have some form of review in place.
“We do a 90-day review of a person who joins the organization and then an annual review,” he says. “An annual review should never really be a surprise. It should be a summary of the year’s performance of the team member. The key is to have ongoing communication and ongoing coaching and praise.
“When you have a balanced program and all those cogs of the wheel are working together, that’s where you have the best result. If there is something team members need to advance their skill on, the key is helping them out with that as soon as it’s identified. If they’re doing great things it’s recognizing them immediately because that’s where you’re going to create the best team loyalty and the best team culture.”
To keep customer service levels at their peak it is important that you use what resources you have available to you. Rivers recently implemented a secret shopper program to help test customer service.
“We have an independent party that will evaluate service levels looking at it from a guest perspective,” Clark says. “A shopper service will come in and they’ll go through experiences as if they were a guest and then give us their feedback on individual team members and the property overall.”
There are a lot of great resources, some of them free and some of them you can acquire. “You have to stay current on different practices and different education processes,” he says. “The world is changing rapidly when it comes to online training. We’ve put several tutorial programs in place this year. The key is really seeing what the most effective way is to use this technology to train team members and ensure that they are current on all their practices.”
How to reach: The Rivers Casino, (412) 231-7777 or www.theriverscasino.com
- Design programs around initiatives.
- Provide opportunity and outlets for employees.
- Enhance the customer experience.
The Clark File
Born: Endicott, NY
Education: Received an associate degree from Broome Community College in business administration. He also has a bachelor’s of science degree from SUNY Binghamton.
What was your first job, and what did you learn from that experience?
I worked with my father as a residential carpenter during high school up until I graduated with my bachelor’s degree. What I took away from that was hard work, an understanding of what you can create with your hands, and a strong work ethic.
What is some advice that has held true through your career?
One of the things I think is most important is education. Somebody should always focus on educating themselves and continue that education throughout their life.
Who is someone you look up to in the industry?
I spent most of my career at Turning Stone and I worked with Frank Riolo. He was somebody who always believed in me and continued to challenge me and give me opportunities to grow.
Do you ever gamble and what is your favorite game?
In the state of Pennsylvania, I rarely gamble. If I make a trip to Vegas, I gamble a little bit, but not very much. I like to play craps. I enjoy the entertainment experience.
What are you looking forward to at Rivers Casino?
I’m looking forward to the continued development of Rivers. I love to grow a business and I really believe in the business plan. That’s why I enjoy this job because I can see the growth of the team members and the growth of the property and the success that’s driven by both of those.
Governor John R. Kasich announced that Western Reserve Partners LLC’s founder and managing partner, Ralph Della Ratta, has been appointed to serve as a member of the Kent State University Board of Trustees.
Della Ratta’s term began July 13, 2012, and will end May 16, 2021. Aside from his involvement with Kent State, Della Ratta is also active in numerous local and national organizations, including University Hospitals Cleveland Medical Center, Rainbow Babies and Children’s Hospital National Leadership Council, the Rock and Roll Hall of Fame and the 50 Club of Cleveland. He is also a board member of Olympic Steel Inc., MAI Wealth Advisors LLC and NDI Medical.
Western Reserve Partners LLC is also pleased to announce the hiring of Justin A. Wolfort as its vice president. Wolfort rejoins the firm after earning his MBA in finance from the Kelley School of Business at Indiana University.
He has seven years of investment banking experience, focusing primarily on middle-market M&A and capital-raising transactions in the industrial and real estate sectors. Prior to joining Western Reserve in 2004, Wolfort served as an analyst in the Real Estate Investment Banking & Public Equity Finance groups at McDonald Investments Inc. and KeyBanc Capital Markets. While at Kelley, he interned in the Corporate Strategy Group at Cummins Inc.
Capital Advisors Ltd. announces that the Cleveland Chapter of the Society of Financial Service Professionals’ (SFSP) has selected Neil R. Waxman, CFP, as its Financial Service Professional of the Year. The SFSP, founded in 1928, has more than 15,000 members nationally and is the pre-eminent, multidisciplinary organization for professionals who practice in the broad spectrum of wealth management.
The honoree for the Financial Service Professional of the Year Award must have practiced for 15 years and consistently exhibited core values such as support and commitment to professional advancement via continuing education, support of ethical awareness, development of collaborative relationships with colleagues, which enhance client service, and progressive practice management strategies.
Waxman is a managing director of Capital Advisors Ltd., a wealth management firm that provides wealth management services via the establishment and integration of investment, tax, estate, retirement and business succession planning.
Glenmede, a privately held and independent investment and wealth management firm, announced that Lawrence H. Hatch has been hired to serve as director of the firm’s Cleveland office. In this role, Hatch will oversee wealth advisory services for high-net-worth individuals and manage the day-to-day operations of the Ohio office. With 26 years of trust and estate industry experience, Hatch will lead a team of 20 individuals and supervise the office’s 184 relationships. The office’s former director, Frank I. Harding, will assume a senior advisory role, allowing him to focus solely on clients.
Prior to joining Glenmede, Hatch served as president, secretary and chief fiduciary officer of The Private Trust Co.
The Society for Vascular Surgery presented its prestigious Medal for Innovation in Vascular Surgery to Roy Greenberg, M.D., of the Cleveland Clinic during the June 6-8, 2012 Vascular Annual Meeting held at National Harbor, Maryland.
Dr. Greenberg is the director of endovascular research and the Cleveland Clinic Peripheral Vascular Core Laboratory. He holds more than 50 patents developing endovascular devices for aortic disease especially within the field of complex endograft repair.
Candidates for the SVS Medal for Innovation in Vascular Surgery must be individuals whose contribution has had a transforming impact on the practice or science of vascular surgery.
Bravo Wellness, an industry leader in results-based wellness incentive programs, announces the appointment of Michael O’Donnell to its newly formed advisory board. A noted authority in health promotion throughout the last three decades, O’Donnell brings critical knowledge and guidance in developing and managing health promotion programs based on integrating scientific findings with the dynamic realities of workplace and community environments.
O’Donnell has developed and managed health promotion programs for more than 50 workplace settings in addition to a broad range of clinical, community, government, foundation and insurance settings. He presents internationally on the health and financial impact of health promotion, integrating active living strategies into everyday life, strategic design of workplace health promotion programs, and integrating health promotion into national health policy. He is also the founder and editor-in-chief of the American Journal of Health Promotion, a peer reviewed research journal with subscribers in more than 40 countries, which focuses on the science of lifestyle change.
Employees are a company’s greatest asset. They are the driving force behind creating new ideas, developing products and cultivating a work environment that is both profitable and enjoyable. Yet, one of the greatest challenges a company will face is hiring and retaining the right people.
Every organization wants to hire the right employee every time. A high success rate happens only when you have a workplace culture that attracts the attention of the best candidates. The key to attracting and retaining the best employees is to create an attractive but competitive compensation package, combined with a flexible, challenging work environment, opportunities for empowerment and recognition.
As difficult as it is to attract the right talent, retaining them is even more challenging because, if you’ve done the hiring job well, you have hired people with great skills, experience, aspirations and motivation. Other employers will want them too. Studies show that almost one-third of employees who have been in their current job for less than six months are already searching. So, what can you do to get the best people and keep them on the team and fully engaged?
At Clark-Reliance, we have worked tirelessly to address these issues. Our efforts have been refined over the years, and they have clearly worked — some 38 employees (18 percent of the workforce) have been with our company for more than 20 years, and 138 employees (64 percent) have been with us for at least five years. We have an annual service awards banquet to thank employees for their service to our company.
We have learned to focus on the elements that are both satisfying and motivating to our employees. These areas of focus include benefits, training, incentives, challenges and opportunities to grow. While compensation is important, it is not the sole motivator. Employees want challenges, recognition, empowerment and rewards.
Based on our experience, the following advice will help your company attract and retain your most treasured asset.
Create a culture your employees enjoy and can thrive in. A company with a well-defined strategic purpose and a clear set of business objectives, philosophies, etc., will attract, support and motivate good employees who will know what is expected of them and how to achieve their goals. At Clark-Reliance, not only do we emphasize the importance of getting the work done, we are clear on how to get the work done properly while supplying the tools to allow for success.
Be flexible. Provide a flexible work environment that allows for a healthy work/life balance. Today’s workforce is looking for flexibility on the job and balance in their life.
Give attractive benefits. Health care is one of the biggest concerns for workers today and a good health plan with a family option will be attractive to most workers. We started a “life coaching” program that helps employees set and achieve personal and professional aspirations, including health and wellness goals.
Offer training opportunities. Employees value the opportunity for personal and professional development. At Clark-Reliance, we pay for training classes, undergraduate and graduate courses, online courses, in-house training, and external seminars and conferences.
Recognize good work. Nothing motivates more than positive recognition for one’s achievements and contributions. Recognition can be given in a number of ways: e-boards with names, newsletters and special events such as employee luncheons, doughnut days, an ice cream truck on hot summer days and by our ACE award ,which is our employee recognition program.
Make work fun and rewarding: Find things that motivate your employees and help them bond with other employees. These opportunities include bowling leagues, fishing charters, outings at sporting events, etc. Clark-Reliance has an annual Halloween party for employees, a complete Thanksgiving dinner is distributed to all families, a full course Christmas luncheon and a family day at Cedar Point.
Establish a goal outside of work: Finding a charity or project to work on outside of work can enhance team building. Also, employees like to work for a company that has a “soul.”
Creating an attractive work environment, being transparent, approachable, respectful and supportive creates a place where the best employees want to work. It has valuable long-term reputational benefits as well as a significant day-to-day impact on work quality, safety and financial performance. The best people do indeed make the best employees and the best companies.
Matthew P. Figgie is chairman of Clark-Reliance, a global, multidivisional manufacturing company with sales in more than 80 countries, serving the power generation petroleum, refining and chemical processing industries. He is also chairman of Figgie Capital and the Figgie Foundation.
Rick Solon is president and CEO of Clark-Reliance and has more than 35 years of experience in manufacturing and operating companies.
Can you recognize an authentic Picasso painting from a really good reproduction? Unless you’re an art expert, probably not. Fortunately, authentic people are easier to spot.
We know authentic leaders because their words and actions are aligned, and we know them by the way they make us feel — inspired, motivated, and ready to jump on board in support of their vision. Truly authentic leaders have a way of leveraging their authenticity to positively impact the lives of others.
What are some of the key traits of authentic leaders?
Authentic leaders know and accept themselves. At the core of authenticity is self-knowledge and acceptance. They aren’t trying to be someone else. They are genuine. They lead in the truest sense, rather than being a mimicker of others. Because these leaders are fundamentally comfortable with themselves, they foster an environment where others feel at ease to be authentic too.
Richard Branson comes to mind because he certainly isn’t trying to fit into a cookie-cutter mold of a CEO. Not surprisingly, he has created brands that reflect his self-confidence and uniqueness.
Authentic leaders demonstrate vision. There’s a tendency in today’s economy to lead by the bottom line numbers. That’s understandable, but it’s misguided. Of course, the numbers are important, but they can’t be the sole driver in decision-making.
Authentic leaders are motivated by a vision of the companies they are trying to build and the service they want to provide, and that vision guides every decision. That vision is consistently communicated in their words and actions. It’s that vision that motivates employees, earns their commitment, and gives the workforce something to rally around.
Be willing to do the right thing, even when it’s difficult. I like to say that authentic leaders do the “harder, right thing.” By that I mean authentic leaders have the courage to do the right thing even when it’s not easy (and it’s often not easy). Because authentic leaders are true to themselves, they are able to keep true to their principles and vision. That motivation enables them to do the harder, right thing time and again.
Why is this important? Repeating what’s familiar is easier, but it doesn’t move you forward. Instead it keeps you stuck in the current state, potentially losing time and money. Doing the harder, right thing initiates movement and enables progress.
Speak from the heart. We all know the feeling of listening to someone who speaks from the heart. We feel connected and drawn to them. We are energized and engaged. When leaders speak from the heart, it translates to enhanced effectiveness and productivity. Those around them are motivated by their sincerity, honesty and passion.
Engender trust. Authentic leaders create trust between themselves and their employees. It’s pretty easy to spot inauthentic behavior — when values, words and actions don’t align. People catch on to this, and they are rightfully reluctant to trust.
One Bright Side client, a supply chain executive representing 120,000 employees, has modeled this well: During a recent calibration session, he was very open with his team about his biases. He asked others to call him out if he couldn’t provide logical, rational arguments for his ratings suggestions.
By revealing his true thoughts, he fostered trust within the group. Almost immediately, others felt comfortable to acknowledge their own biases. This frankness allowed the group to work cooperatively, rather than thwart progress with hidden agendas.
Recognizing the elements of authenticity is a first step to becoming an authentic leader. Ultimately, authenticity requires courage: the courage to trust yourself and your vision and a willingness to put yourself “out there” — to expose your ideas, your thoughts, your inspiration, and your values to others. By doing so, you give those around you something real to latch on to and a reason to follow you.
Speaking from the heart is a good place to start. It doesn’t have to be a public conversation — yet. Start with yourself. Are you leading authentically? What is your greater vision for the future?
Who do you consider an authentic leader? What behaviors do they exhibit that tell you they’re authentic? What is the impact of their authenticity, and what can you learn from them?
Donna Rae Smith is a guest blogger for Smart Business. She is the founder and CEO of Bright Side Inc., a transformational change catalyst company that has partnered with more than 250 of the world’s most influential companies. For more information, visit www.bright-side.com or contact Donna Rae Smith at firstname.lastname@example.org.
Going into 2008, Chip Conley was concerned about the future, and not just for the obvious reasons. Yes, there was the looming possibility of another economic downturn. And with his company launching 15 hotels in a 21-month period, he wondered like many business leaders what impact a recession would have on his organization and its 3,000-plus employees. The difference was Conley’s personal life was also in turmoil.
“We were growing as fast as we ever had at a difficult time,” says Conley, the founder of the San Francisco-based hotel group, Joie de Vivre Hotels. “I also had a family member who was going to San Quentin prison wrongfully. … I had a long-term relationship end. I had five friends commit suicide during that time.”
Soon, the CEO faced the repercussions trying to juggle so many emotions.
“I had my own flat-line experience,” he says.
After finishing up a speech in St. Louis, Conley fell unconscious. In the five to 10 minutes that it took the paramedics to arrive, his heart stopped.
While Conley fully recovered from the heart attack, his experience sent him through a search for meaning, a way to make sense of all the things happening in his life.
“CEOs — you sort of think that they’re above all the emotions and the difficulties and no one should be pitying any CEOs,” Conley says. “You know — ‘Don’t cry for me, Argentina.’ But the bottom line is that I was really confused by all of the emotions I was feeling — a lot of things were falling apart in my life at once.”
As the leader of a $250 million business, Conley knew that he couldn’t be the only one facing this challenge. To empower himself as well as other leaders he did extensive research on the psychology behind emotions and how this translates in business, writing “Emotional Equations: Simple Truths for Creating Happiness+Success.” The book focuses on how business leaders and individuals can become more emotionally fluent, and subsequently, improve their organizations. To date, his transformational leadership practices have been featured in publications from Time to Fortune and The Wall Street Journal.
“In business, what we want to do is influence things,” Conley says. “We want to have an impact. And usually it’s very external: how can I have an impact or influence the world? What I’m saying is if you can influence and impact your emotions, you can actually be more impactful as a leader in the world.”
Become a CEO (Chief Emotions Officer)
Conley’s research on emotions led him to the work of author Daniel Goleman and an interesting finding that the author made in his book “Emotional Intelligence” 16 years ago: that two-thirds of the success of business leaders comes from their EQ — emotional intelligence quotient — while just one-third is due to IQ level or experience. This statistic struck a powerful chord with Conley.
What it means for a CEO is that the best leaders have more influence and control over their emotions. The most effective CEOs are “chief emotions officers.”
“First of all, the more that you’re emotionally fluent and emotionally intelligent about what’s going on inside of you, the more effectively you’ll be as a leader and the happier you’ll be,” Conley says.
The first step in becoming a chief emotions officer isn’t an easy one for all, however. It begins with becoming more attuned to what’s going on inside of you by taking your ego out of the equation.
Conley notices that many young leaders tend to use talking to motivate people. They have a tendency to think that if they give a good speech or make a proclamation that that the emotion will get people excited. While this works sometimes, he’s learned over the years that trying to motivate people without good information can also backfire.
Frequently when people want to get things done, their ambition in tandem with success can lead employees to interpret it as narcissism, Conley says.
“What happens sometimes is a leader of an organization wants to get people fired up and people think that he or she is really out of touch with what they are seeing,” he says. “So it’s a fine line, because you do want to be a visionary as a leader and help people see things that aren’t as obvious, but you also have to keep your feet on the ground.”
Practicing empathetic leadership starts with becoming a better listener.
Conley uses the example of commercial airlines. When jet fuel prices went up and they started adding new charges for items such as amenities, luggage and so on. The exception was Southwest Airlines, which considered the impact on employees when it decided to maintain many of its pre-recession policies.
“The airlines teed off us — the customers — for charging for bags and for food and no longer handing out peanuts, except on Southwest,” Conley says. “So they upset us, but more importantly, they also upset the flight attendants. Because they were going to start charging us for bags, we brought all of our bags on the plane. You turn flight attendants into baggage handlers and the level of the satisfaction of the flight attendants went way down. And guess what? Customer satisfaction plummeted, except at places like Southwest.”
Understanding people’s feelings takes a two-way conversation. So instead of giving a speech about how it’s going to be, Conley now asks his people how they want it to be. As CEO, he frequently had dinners with different groups of employees, taught classes for team members and maintained an open door policy to encourage people to share their emotions and ensure they felt heard.
“When you can understand the subtleties and the nuances of what this person in front of you is looking for in their life, it allows you to deliver on those needs a lot better,” Conley says.
Identify the variables
The challenge in learning to control emotions for most people is becoming more responsive to them. Because people tend to react quickly when something happens to us, they often don’t take time to think about the root cause of emotions or worse, push them off, Conley says.
Due to the stresses of day-to-day business dealings, it might take CEOs days or weeks to realize that something has been eating at them because they were too busy to deal with it at the time.
“Sometimes efficiency takes us away from our emotions and we just ignore them, and then they come out in other ways,” Conley says. “We wonder, ‘Why am I so angry about this?’ and you don’t realize that yesterday this person sort of blew you off when you were supposed to have a meeting with them. And you just had other things to do so you didn’t focus on it.
“So something happens and we react. The lifespan of an emotion physically in your body is usually 90 seconds long, but we actually hold on to it a lot longer than that. It gets stale, but it’s still that emotion that you’re holding onto. Learning how to be more responsive and less reactive is a good thing.”
In a business culture, emotions are contagious, from smiling to yawning and frustration, to fear and anxiety. So not addressing the fear or anxiety of one person — or yourself — can quickly turn into the emotional neglect of many, causing creativity and innovation to suffer.
When Conley researched “Emotional Equations,” he found that although emotions seem fleeting and uncontrollable, they are actually quite predictable. Once you identify the emotion that you or your people are feeling, you need to examine ingredients that created it. Most can be broken down into simple math.
In a study done several years ago, participants were given two choices: get an electric shock now or get an electric shock randomly in the next 24 hours, but it would be half as painful. The vast majority of people in the study chose the option to get the shock immediately.
Why? They had more control over the situation by knowing when the shock would happen, lowering their anxiety.
“Anxiety has two different ingredients: uncertainty and powerlessness, or what you don’t know and what you can’t control,” Conley says. “Once you start to realize this you can actually influence the ingredients and then may influence the emotion.”
Other examples include (Disappointment = Expectations - Reality) and (Workaholism = What Are You Running From?/What Are You Living For?)
By dissecting emotions into variables, leaders can influence the variables to better control the emotions themselves. Take anxiety, for example.
If employees in a company harbor anxiety, they will eventually become distracted and less productive. So when leaders find out that people are anxious about their jobs and finances, they should look for ways to deplete some of the powerlessness and uncertainty they may be feeling.
“If we know that uncertainty and powerless is what creates anxiety, and we know that anxiety makes people less creative, less innovative, less engaged, less productive, then when we have bad news, we better figure out how to package it quickly and get it out to people,” Conley says.
“When people are just stewing about what they think will happen, it becomes a big distraction from what they really should be doing in their work.”
While reassurance with words is always helpful, you also need to take action. Set tangible goals. Provide comprehensive feedback. Get employees more engaged in innovation.
The same goes for anxiety of a CEO. By creating more certainty in your life and taking power over the areas that you can control, you reduce the anxiety that can paralyze you and your organization.
“Even in a time when people are worried about things like layoffs, they can feel like ‘Ah, I have some power or some influence in terms of my effectiveness if I do the following three things,’” Conley says.
Make it a commitment
CEOs who use empathy in their decision-making processes can create cultures with happier employees, who in turn, provide better service.
“What we saw is the more employees felt engaged, the happier they were and the more likely they were to give a great experience to our customers,” Conley says. “So our employee satisfaction went up and then our customer satisfaction went up as well.
“When you get more engaged employees in a service environment, you’re able to put an environment together that allows the customers to get solutions faster. And the employees are going to feel not just engaged but they feel like their fingerprints are all over the business.”
Seeing the power of emotional equations, Conley began teaching them to leaders at Joie de Vivre to help them better identify with their emotions and empathize with the emotions of others. And so far, the impact on organizationwide morale has been overwhelmingly positive.
“Initially people thought, ‘Oh God. Here’s Chip with his New Age stuff again,’” he says. “But honestly, the last few years have been an emotionally trying time for people in the business world. So the fact that I was being vulnerable and authentic about my own fears and frustrations and concerns about life meant that people felt like, ‘OK, I can breathe. I don’t have to be Superman.’”
Giving more voice to emotions doesn’t mean productivity has to suffer either. In fact, it should be the opposite. When people have the safety to express their emotions, they’ll be more empowered to make decisions because the fear of making a mistake or anxiety about their job security won’t be distracting them.
“If you have a problem in a hotel or any kind of business, you want the person right in front of you to solve it,” Conley says. “You don’t want to have them say, ‘OK, well, I’ll talk to my manager.”
While he’s transitioned from the role of CEO, Conley continues to promote the equations at Joie de Vivre as a strategic adviser. Today he focuses on creating one emotion in particular: joy (Joy=Love-Fear), which is also the company’s mission statement.
“Our company name is Joie de Vivre, which means joy of life,” Conley says. “The fact that we have an underlying message and many of us wear these wristbands that say “create joy” is a reminder that that’s what we’re in business to do.”
How to reach: Joie de Vivre Hotels, (800) 738-7477 or www.jdvhotels.com
The Conley File
Founder, former CEO and strategic adviser
Joie de Vivre Hotels
Born: Long Beach
Education: BA and MBA from Stanford University
What was your first job?
The fries and shake station at McDonald’s
What is one part of your daily routine that you wouldn’t change?
Compensation is a right and recognition is a gift so I try to provide two honest and detailed forms of personal recognition to people I work with daily. If I slack off one day, then I add those to the next day.
What would your friends be surprised to find out about you?
I’m not sure that many people know that I have a 35-year-old stepson, a six-week old baby and three grandchildren, with the oldest being 17 and 3 inches taller than me. As much as Joie de Vivre and our various hotels were sort of like my children and family, I feel fortunate to have these kids and grandkids in my life as they remind me of what’s truly important at the end of the day.
If you could have dinner with one person you’ve never met, who would it be and why?
Herb Kelleher, the former CEO of Southwest Airlines who was in that position for 37 years. He created a compelling culture that walked its talk around the customer coming second and the employee coming first. The airline industry is brutal — cyclical, high fixed costs, lots of unions, big risks — so I’d want to learn more about how he dealt with the emotional roller coaster that came with being CEO for three dozen years. He outdid me by a dozen years since I was CEO of JdV for two dozen years.