Do you want to strengthen your company’s performance, increase customer satisfaction and improve its bottom line without having to resort to high-priced consultants or sending your employees to expensive and time-consuming seminars?
First, introduce your salespeople to your accounts receivable staff. When you’re done, continue making introductions throughout the company until each person knows the people in every other department whose work either affects or is dependent upon their own output.
If you’ve not gone down this path before, you’ll be very surprised how quickly it will enable the management team to generate improved business results. I know I was surprised.
I discovered the power of this approach not by experiencing a moment of brilliance but by becoming frustrated over the lack of progress in solving a serious problem. The company was experiencing significant aging of its receivables beyond the targeted time frame. To make matters worse, the number of bankruptcies in the industry had been rising for years as both the customer and supply base faced continued economic uncertainties, increasing the risk that some of our receivables could become uncollectible. We engaged many of our top people in an attempt to quickly get to the root cause of the problem.
Was it the customers who were at fault or were we the problem? To make a long story short, when we got all of our salespeople and our receivables staff in the same room to put an end to the finger pointing that was going on, we discovered that many of these long-term employees had never met face to face, despite working on the same customers’ accounts.
We also found a lack of clarity as to where the roles and responsibilities of each party began and ended as well as what authority each had to troubleshoot issues or bring them to a head. Once this situation was recognized, it didn’t take long to clear up almost all past due receivables (very few were caused by customers), and the improved clarity and communications between those departments provided assurance that the new level of performance would be sustained.
Improved intra-department communications was also found to be effective in driving down inventory, shortening lead times, increasing production, improving product field performance and reducing warranty expense. Why should this simple act make such a difference?
Perhaps it’s not news to you that any given department is sure that many of the company’s problems stem from the incompetence that exists in one or more of the other departments. Oftentimes, when these folks understand each other’s roles, responsibilities, and more importantly, the issues faced by those in other departments, they develop a new respect for those colleagues. Then the hard work of continuous improvement can begin in earnest.
A good management team should take advantage of this phenomenon by creating cross- functional teams that are given ownership of specific key processes or company metrics. These teams could set targets, establish meeting schedules, assign priorities, create action plans, monitor performance and report out to management at predetermined frequencies.
To get started, select one or two key processes or company metrics that are in need of improvement. It’s important that you make the case for the needed improvement to the team by clearly defining the benefit to the company. It’s wise to initially select areas where you suspect there might be some low-hanging fruit, because you’ll want to publicize early successes throughout the company and recognize successful teams.
Making sure that people in different departments get to know each other isn’t just a nice thing to do. Properly exploited, that practice can be the catalyst that enables your company to pull ahead and stay ahead of the competition.
George Perry has more than 40 years of experience in engineering, operations and executive management. He retired as president and CEO of Yazaki North America Inc. in December 2009. Reach him at firstname.lastname@example.org.
John Rost realizes that employees show up to work each day for a paycheck. But he also knows that most employees — and the managers who listen to them — will tell you they seek something more from their place of employment.
They want a sense that their work contributes to a greater goal, a sense that they are valued by the company, a sense that their input on the company’s policies and directions has meaning and will be seriously considered by management.
But in order to have that, the tone has to be set at the top level. That’s why Rost — the founder, president and CEO of Fiesta Insurance Franchise Corp. — strives to get out among his employees at his company, which generated $36 million in 2010 sales under its brand name, Fiesta Auto Insurance.
Smart Business spoke with Rost about how a good set of ears and good set of walking shoes paves the way for an engaged, loyal work force.
How do you involve employees and franchisees in shaping the company’s future?
We are always chatting with our franchise owners to see if they have a different perspective, if they know of things that are working or not working. They might have some particular challenges or successes out there. We recently had three of our superstar franchise owners who were down here from northern California visiting with us. It was an opportunity to spend some time talking about their operations.
I can also think of some accounting challenges recently that came from our front-line clerical staff. With that, and discussing some of the potential solutions, we were able to create some software programming where the programming can be done more efficiently.
To implement something like this, having other people involved is key to a good working environment, whether it’s staff members or franchise members. If they feel there is not an opportunity to be heard in the organization, that is not going to help the success of the organization itself. In the leadership position, as the CEO or top manager, you have to spend a certain amount of time out in the field, making sure that you’re available to shake hands, chat with people and ask them for their input.
When you’re talking with your employees and franchisees, what do you want them to tell you?
Sometimes you’ll find in those situations, people will tell you about the good things, but you’ll need to ask them about the challenges they’re facing. You can talk about two things that are good things, but let’s also discuss the five things that are challenges. Without those discussions, you might not find out about that operational crisis that you’re not yet aware of or whatever it might be that they’re facing in their various capacities.
From there, the next step is to ask them about potential solutions for each one of those challenges. Most of the time, people that are dealing with whatever challenge exists have it in their mind how they would have dealt with the issue in the first place. That is how you begin to generate great ideas from the people on your staff who are dealing with those challenges on a daily basis.
What qualities does a truly engaged employee possess?
From a personality standpoint, it’s going to be someone who is very persistent, somebody who is not going to give up easily in the face of some challenging times. Nothing is perfect out there, so in order to be successful, you have to have that attitude of never giving up. So our franchise owners, if they come in, grab a hold of the concept in training, and go out and execute the plan we’ve laid out, they have an opportunity to be very successful. Every once in a while, we’ll have someone who goes out and tries to buy an orange and turn it into a banana, and it doesn’t work too well.
Ultimately, what do you see as the leader’s role in engaging employees?
As the leader, you have to have that vision to get people involved. You have to make sure everybody understands what the vision is and hold everybody accountable to stick with it. It’s something that is changing. It’s always zigzagging across as you’re headed in a certain direction. But you have to make sure everybody is staying on that path by motivating and inspiring people to achieve the goals of the organization.
How to reach: Fiesta Insurance Franchise Corp., (877) 905-3437 or www.fiestafranchise.com
Elaine Bellin has worked at Paragon Food Service, a distributor of fresh foods to the restaurant and prepared foods industry, for 27 years. She has served as president of the $47 million company for 18 years, and during that time, she has worked to make Paragon an industry leader.
“Fresh foods have gained in popularity over the last two decades and are still popular and gaining more popularity because of the health benefits of eating fresh foods, particularly fresh fruits and vegetables,” Bellin says. “As that has grown and that interest has grown, our business has naturally grown as a result of the demand.”
That growth has pushed her to position the company as one of the best in the industry.
Smart Business spoke to Bellin about what it takes to bring your company to the top.
Lead your industry. What we have done over the years is we’ve tried to put ourselves in a position of leadership in the industry and in our market by being really proactive. We recognized the potential in really high-quality fresh foods and the potential and the benefits of local and sustainable foods long before others had. Our motto is not necessarily to supply the demand but also to bring forth and promote what is healthy and what is environmentally productive for everybody and to bring that awareness to our customers and ideas about that to our customers.
You have to look at opportunities and potentially innovative products or solutions that are indigenous to your industries. You also have to have the right team in place to promote innovation. That is critically important to get ahead and to change or bring different ideas to an industry. You have to have a team that is dedicated to wanting to be innovative and wanting to be a leader in their industry and can take advantage of any innovation that is available to them in the industry.
Allowing really qualified employees to develop their ideas and to develop their initiatives, to work with them and support them is important. If they feel they are making a difference and they’re contributing to the overall strategy, plan or goal of the company, you have the potential of getting a highly productive work force and ultimately a successful business.
Offer quality service. We have been focused on really high service levels and high-quality levels. All of the areas of business that have made us successful, we have to continue to do that extremely well. We cannot waiver; we cannot make a mistake because with all the economic pressures, customers have an even higher demand of their vendors and their distributors.
If you want to be successful in this economically challenging environment, you have to have the consistencies and a workforce that has a strong desire to want to be the best at what they do. Happy employees tend to show that. You have to make them feel like they’re being treated well and treated fairly and that comes from an enhancement of the benefits package to make sure that their wages are in line and that they have an opportunity to continue to do better with the company. You have to focus on employees and focus on the economic challenges and the uncertainty of the economy.
Stay focused on what you know how to do and don’t lose sight of what you do well. You have to redouble your efforts so that the competition is not able to take away your business in a price sensitive market. If you develop the relationship and you are covering your customers and building that relationship through excellent customer service and excellent quality, then I think you have a better chance of maintaining good customer relations.
Differentiate yourself. We were the first distributor in our area to introduce locally grown food products to our customer base. We did it before it became vogue and now its vogue and its here to stay. For me it always starts with quality and that’s been the main ingredient in the success of our company is that we provide quality first. The exploration of broadening the local segment of our business is going to be very helpful in sustaining the growth and leadership position of the company.
You have to be open-minded and when there is an opportunity or somebody brings an idea forth, you have to be open to exploring that. Being open to new and innovative ways of doing business is very helpful. You have to bring good information to your customer base and be innovative and propose changes. If you just accept that customers will do the same thing then you’re not going to be a benefit and you won’t add value to your customers. In order to add value, you have to be at the forefront of new product identification. You have to be at the forefront of trends and be aware of those ideas and bring them to your customers to try.
HOW TO REACH: Paragon Food Service, (412) 621-2626 or www.paragonfoods.net
Sue Burnett, founder and president of Burnett Staffing Specialists, had never heard of a staffing firm doing an employee stock ownership plan until a friend told her about a staffing firm in Missouri that decided to do one. Intrigued by the news, Burnett investigated the possibilities for her and her husband, Rusty, who serves as CFO and executive vice president, to do an ESOP in their company.
“We thought that this was something that might be an option for us,” Burnett says. “Rusty and I really have no plans to retire, and we weren’t looking for an exit strategy because we weren’t ready to exit. At the same time, Rusty turns 70 this year and I turn 65, so our staff — particularly our younger staff — were wondering what is the future of the company.”
Burnett thought an ESOP was the perfect situation, because she didn’t have to leave the company or retire. It was a way to give back to the people who helped her build the $64 million company.
Smart Business spoke to Burnett about what went into her ESOP decision.
What are some of the advantages of doing an ESOP?
I think that the advantage of it is that now my staff knows what the future of the company will be. I think there was a feeling of relief that we were not going to sell the company No. 1, and that No. 2, we were going to continue on with the company. It gave my management staff a real vision to be able to see into the future that they will be able to run the company without us. With a management staff that’s young, it made them feel like there was really something to work toward, because they are now owners of the company. It is definitely a long-term way to retain staff and particularly management staff.
For me personally, it was a tremendous feeling of relief from the standpoint that now I know that the company is in good hands. The people that helped build it will be the leaders of the future for it and I can stay for as long as I want. It was a way for me to ensure that the company will continue into the future and my staff won’t be worried about what is going to be happening.
Are there any disadvantages?
From an employee standpoint, there’s nothing but positives. They are being given stock, and it’s free. It’s a retirement situation for them. As the company continues on into the future for all of these people who are fairly young, when they retire, if the company is still in business or if the company is sold, whatever happens, their stock will be worth a lot of money. There is no downside for the employee whatsoever. ESOPs have shown growth faster than normal companies because the employees become very committed and excited that they have ownership in the company.
Why would other CEOs want an ESOP?
I do think that for the owners, it’s a wonderful exit strategy, but they have to look at it as a long-term exit strategy. If you want to just sell the company and leave, then that would not be the best thing to do. In our case, it will take about seven years or so to allocate the stock, and we will certainly be involved during that period of time. There have been some ESOPs that I’ve heard about where the owners basically did the ESOP and then left. That was not as successful, because the management team could not keep the success going and the owners didn’t get paid off.
How can you tell whether an ESOP is right?
It is an expensive thing to do because there is a cost. You need to make sure that you’re willing to take on that cost. There are a lot of attorneys involved and a team of people that work on it. You have to have the financial ability to be able to do the ESOP. Also, you have to recognize that the money of the ESOP really just comes from the profits of the company.
I think that if you’re too young and you want to continue to own the company, you shouldn’t consider it. I see the ESOP as more of an exit strategy for people who want to transfer ownership and perhaps stay involved in the company but maybe not for 20 years. The ESOP decision is an owner’s decision.
HOW TO REACH: Burnett Staffing Specialists, (713) 977-4777 or www.burnettstaffing.com
Mark Reynoso could hear the rumble approaching on the horizon, and he knew it spelled trouble for Belkin International Inc. Competition was growing fierce in the consumer electronics industry and if he didn’t act fast, he and his business were going to get run over.
Belkin launched as a seller of computer cables and surge protectors. But the business evolved into products that make electronic devices such as laptop computers, iPods and eReaders easier for consumers to use and easier to integrate with other devices.
As the calendar turned from the 1990s to 2000, the company of more than 1,000 employees found it wasn’t alone anymore in this realm. Belkin was facing more and more competition and Reynoso needed to respond to help his company stay ahead of the pack.
“We saw that the retail market, the shelf space that our products lived on, was becoming more competitive,” says Reynoso, the company’s president and CEO. “Not only were we competing against other brands like Belkin, but retailers began to develop their own private brands to compete with people like Belkin.”
Companies such as Best Buy and Circuit City were now in the market offering their own specialized electronic connectivity solutions. Reynoso feared that without quick action, his products were at risk of being moved to the back of the shelf or even getting bumped off completely.
“It became really clear that we needed to push our organization upstream in terms of our innovation capabilities to really continue to put ourselves in a space that was ahead of the commoditization curve so that we’re bringing new products to market and creating new categories that would allow our brand to maintain its relevance and strength,” Reynoso says.
“Our goal was not just to sustain our business; it was to grow and expand our business. The only way we would be able to do that was if we were bringing differentiated solutions to the market that people really cared about and that consumers loved.”
Make a commitment
Reynoso reached out to his people and explained the dire circumstances. He told them that they all needed to work harder to come up with new and innovative products that would excite consumers and help Belkin stand out from the competition.
The plea did not go over well with his employees.
“Initially what we discovered when we tried to inject this way of thinking into our business was that it was really hard to get it to take hold,” Reynoso says. “People were running their day-to-day businesses. It was hard to get them to change gears and change focus and begin to develop some of these new strategies.”
The response underscored the fact that the increased competition wasn’t due to a lack of effort from his employees. They were working hard and didn’t have much capacity to take on additional tasks.
“So then to say to somebody, ‘Hey, I want you to go kick off this new initiative because we’ve discovered a customer need,’ it would be really difficult to make that successful,” Reynoso says.
He had shown them that he understood the environment in which they were working and was willing to adapt that environment to make this new initiative possible.
“You have to have the conviction to stop doing certain things if you want to do new things,” Reynoso says. “One of the CEO’s primary responsibilities is to set priorities for an organization. Something is going to have to fall off the list. The biggest thing you can do is remove barriers.”
Innovation was desperately needed at Belkin. Reynoso knew he had the talent on hand to be innovative and develop new products that would excite consumers. It was time for him to give that talent a chance to blossom.
His idea was to create an entrepreneurial program in which selected leaders in the company would be given a chance to take an idea conceived by the consumer insights team and develop it into a great product for Belkin.
“Every company has their bureaucracies that are designed to make them more process-driven, efficient and effective,” Reynoso says. “Start-ups succeed in part because they don’t have any process. Everything is done pretty much in an ad hoc, entrepreneurial fashion. The best thing you can do for somebody in that situation is to put them in an environment that liberates them from a lot of the structures in your organization and truly gives them the freedom to be completely entrepreneurial.”
This program would solve a big problem for Reynoso. Employees chosen to take part in it would be freed from other responsibilities and given a chance to dedicate all their time to the new project. The excuse of not having enough time or resources would no longer be valid.
“We’re going to allow entrepreneurs within Belkin along the lines of this vision and future that we’ve talked about really push the needle of our innovation profile,” Reynoso says. “We’re going to fund those ideas, we’re going to fund those entrepreneurs and we’re going to allow them to work within our corporate development group. We’re going to cocoon or isolate them so that they can really focus in exclusively on nurturing their specific idea.”
Connect with your customer
With the framework of his entrepreneurial program in place, Reynoso needed a great idea to hand off to one of his fresh-faced entrepreneurs. A scan of the marketplace revealed that laptop computers might be a good place to start as they were becoming really popular, particularly for home users.
“We recognized that we were going to need to understand consumers’ needs and preferences in order to create new solutions or categories that would allow us to drive growth,” Reynoso says. “A real direct result of that discussion was our commitment to begin to disproportionately invest in and become experts in our consumer research and consumer insights.”
Reynoso made it clear to his employees that ideas would be given the opportunity to breathe and grow at Belkin. In order to do that and begin the entrepreneurial process, he and his consumer insights team had to identify an idea with great potential. He had to reach out to consumers and figure out what would get them excited.
If he was lucky, the team would stumble upon an idea that consumers didn’t even know they needed.
“That’s really the gold mine for us,” Reynoso says. “It’s a need that a consumer can’t articulate because we’re solving a problem that they didn’t know they had. When we’re mining for unarticulated needs, you can’t ask them direct questions. You need to spend time understanding broadly how they live and how they use the product and the pain points they have with it.”
Whether you’re reaching out to people through a database of customers who have bought products from you or you’re flipping through the Rolodex on your desk, you need to get inside the heads of the people who use your products.
“If we’re learning about laptops, what do you love about your laptop?” Reynoso says. “How do you use your laptop? Where do you use your laptop? What is it you don’t like about how you use your laptop? The more data you gather in that respect, certain trends and themes will begin to emerge that will give you a hypothesis to begin to innovate around. That’s how you tackle unarticulated needs.
“It doesn’t need to be complicated. The key is less about the sophistication of the system versus the sincerity of the conviction to make it a priority for your business. What you need to figure out is the best way for you and your company to engage your customers.”
You’ve got to show customers that you’re genuinely interested in their feedback and that their responses will play a key role in the product decisions you make.
“Be really clear in communicating your sincerity of your objective of what you want to achieve,” Reynoso says. “Then make sure you listen and deliver. There’s nothing worse than taking up somebody’s time and then effectively ignoring their recommendations.”
It’s the kind of thing that will drive your customer to a competitor.
Through its commitment to intensive research, Belkin came up with an idea that Reynoso and the consumer research team believed laptop users would love.
Find the right person
It was now time to find someone to lead the initiative to develop a product related to laptop computers that would excite Belkin consumers and serve as a springboard to even more innovation.
“You have to identify a vision and you need to go make some quick wins so people can see that direction is a good direction,” Reynoso says. “When people see it, they’ll follow suit. It’s like Roger Bannister and the four-minute mile. Until somebody does it, it seems impossible. Then as soon as somebody does it, people can see that it’s real, it’s achievable and it’s possible. You have to go from something that appears to be not possible to something that was done so they can see that it can be repeated.”
In order to make the initiative a success, you need to think beyond just the technical expertise in whatever realm you’re asking this person to work in. You need to look at their ability to work in an entrepreneurial fashion.
“Somebody who is very structured, process and rules-driven is not somebody who you want in start-up environment,” Reynoso says. “There are people who thrive on innovation, thrive on the ups and downs and don’t require a tremendous amount of management to work through the hiccups that you’re inevitably going to have. They recognize it’s part and parcel of the path that needs to be taken.”
Use your HR team to identify people who have the personality and temperament to take on leadership roles.
“If your HR organization is focused on developing your people and caring about your people, usually that tends to be a correct recipe,” Reynoso says.
Once you put the person in place, you have to live up to your promise and your intent to let the person be a leader in developing the initiative.
“You can tell somebody, ‘Hey, we’re going to be supportive of you when you make mistakes or when there are failures,’” Reynoso says. “OK, great. But they are going to test it when it happens. They are going to want to see that when a failure occurs and there is a setback, you truly are willing to support them. We have a good track record of being able to say, ‘OK, you fell down. Pick yourself up, dust yourself off and move forward.’ Don’t nickel and dime them.”
You should also understand that any plan is likely to go through changes and perhaps even complete transformations over the course of development.
“I don’t recall what the initial assumptions and expectations were for the laptop at home business when we initially put together the business plan,” Reynoso says. “But I can promise you what ended up being successful was only half of what we originally wrote down. We just had to give our leader the freedom and the empowerment to go to make mistakes.”
What Belkin came up with was the Cush Top, a product that would help laptop computers keep their legs cool while using their computers.
“It’s an ergonomic, comfortable laptop stand that you put on your lap whether you are in your bedroom or your living room or wherever you are,” Reynoso says. “That was one example of innovation driven through consumer insights that was a huge home run for us.”
The work also produced a product called Home Base that would connect computers, printers and any other USB device in your home. Consumer research discovered that connectivity was a big issue for many people.
“Collectively, those insights drove our laptop at home initiative that basically allowed us to create a new business that is now in excess of $100 million,” Reynoso says. “Had we tried to drive that through our existing businesses, it probably would have failed because everybody was so busy with everything else they were doing. That dynamic is more true now than it was seven or eight years ago.”
How to reach: Belkin International Inc., (310) 751-5100 or www.belkin.com
The Reynoso File
Born: Addis Ababa, Ethiopia
Education: Bachelor of arts degree, law and society, University of California, Santa Barbara
Who has been the biggest influence on your life?
My parents. They just really taught their kids to understand what right and wrong was and tried to make sure they behaved accordingly. Just a real ethic, a moral grounding was what they brought to us.
Reynoso on making the right personnel choice: You don’t want to pick somebody who is doing really well and put them in a job where they struggle because now you’ve made two big mistakes. You’ve taken somebody who was successful and made whatever they were doing less successful because you pulled them out of that.
Then the initiative you wanted to do is now not going to be successful because you put somebody in there who isn’t going to be successful. And now you’ve got an employee who was feeling really good about themselves being successful who is now struggling. It’s a real disaster in that respect. You just want to be really careful you don’t misalign opportunities with roles.
What one person would like to have a conversation with?
Nelson Mandela. For somebody to go through the life that he did, to be imprisoned by his own country because of the color of his own skin, to be willing to struggle for freedom and to then embrace the society that imprisoned you and lead that country as he did out of apartheid, it requires a depth of a person that is really hard to understand. He would be an incredible individual to be able to spend some time with.
Mentoring of the arts and skills needed for success in business is of very great importance. To improve oneself in business and become better at what you do, top-notch mentoring is necessary. Continuous monitoring of our advances in mentoring processes is also essential, and mobilizing everyone in these pursuits is very important.
The Society of Jesus, or the Jesuits as they are more commonly known, is a Catholic religious order that is highly regarded for its leadership and expertise in the field of education. Over its 400-year existence, the Jesuits have perfected a system of education or learning that revolves around three processes: experience, reflection and action. This system is founded on the principle that one of the best methods of learning is gained through an actual experience of the lesson.
For example, to learn to ride a bike, one must first get on the bike, pump the pedals, keep our balance, steer the bike and stop without falling over. Once we can do a task well, we often want to advance and progress. This is part of the ongoing learning experience.
Learning only progresses through the idea of reflection. It is in reflection or the re-examining of an experience and its effects, that learning is greatly aided and accelerated. Unaided by those who already know what a learner is trying to learn, one can progress, but such progress is greatly impeded and slowed by a lack of current understanding. We do learn forward, but we only understand backward. So, a mentor, a coach or a learning assistant who already possesses the knowledge or skills we seek can help us immensely in the reflection process.
It is the mentor’s job to get you to think about what went wrong or how you might have done something better. A mentor will ask, “Well, what happened? And, why do you think this effect occurred? And what might you have done differently?” or, “What do you now plan to do?” Our mentor stimulates the reflection that we might otherwise not have done. If the mentor can kindly offer some tips, such assistance can expand and accelerate the initial teaching and the reflective learning processes. For example, “Do you think that if you had put your foot down when you tried to stop your bike you might not have crashed to the ground?”
The objective of reflection is the recognition and the identification of the causes and effects of what has happened or can be caused to happen better or differently. In these processes, the mentee is aided to also learn the art of sophisticated analysis — thinking and doing so that the skills and sub-skills of each lesson can be repurposed and applied to other tasks and challenges.
As a mentor sees light bulbs in the learner’s eyes, he or she then might suggest step three, or the corrected action stage. These suggestions might also take the form of confirming questions, such as, “Do you think that would work?” and then, “Do you think you could do it?” Only after such confirming questions are positively answered might they make the encouraging suggestion, “Let’s try again. And, now let’s put your foot on the ground when you stop your bike.”
In more complex environments with even more complex lessons or skills to be learned, the optimum mentor facilitates further learning and choice of next action by aiding the student to see the lesson and the possibilities in multiple dimensions. The practiced mentor offers his questions and lessons in a way that entices the mentee to not only learn the skill but to love the understanding of subtlety and detail.
No one in business should go it alone, as they say, or if he or she does, the person often finds it harder to get to the top. Successful businesspeople realize that having someone else who has gone before them whom they can bounce ideas off of is an asset and necessity. The mentor will have insight into the challenges the mentee will face and can provide guidance and suggestion to help make their travels in the life of business easier or a hand to grab onto if they falter.
It’s about standing on the shoulders of others who have traveled the path before you. These people have made the mistakes that they don’t want you to make. Mentors in the business world reach out, share experiences, ideas and a helping hand to pull you up the mountain of learning and adversity.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. http://tomnies.cincom.com/about/
Michael Fischer wasn’t expecting utopia when he took the helm at Swan Corp.
“Companies rarely bring in a new leader because everything is going perfectly,” says Fischer, president and CEO at the kitchen and bath product manufacturer. “So you normally are thrust into an environment where you can see right away more opportunities than you have the time or resources to tackle.”
Fischer took over the 300-employee company in April. At least in the early days, he resisted the urge to make immediate changes.
“You get tempted to go to your playbook and execute against things you’ve done,” Fischer says. “But unless you really understand what the needs are of the business, that may not be the right solution.”
Smart Business spoke to Fischer about establishing the right tone to lead effectively.
Get familiar. For me, the first 90 days is getting to know the organization inside and out. I normally start outside and work my way back in, which involves meeting with customers and listening to what they think of the company and where they think the opportunities are. As you make enough of those rounds internally and externally, the pieces start to come together. Usually for me, it’s at about the 90-day point.
You may not figure out right away what the biggest levers are to move the business. But the first week I was here, we started meeting as a team across all functions. To me, it’s all about teamwork and breaking down the functional silos. I wanted to send that message from the first day I was here that that was the way I wanted to run the business. Whether we solve anything or not, you can send those kinds of messages.
Ask questions. I met with everybody in the organization in the first two weeks. By the time you get to the 30th or 40th person, you start to see trends or some things that keep popping up. So I try to direct questions. ‘If you were the CEO for a day, what would be the one thing you would do to improve the company? If you could change one thing in your job, what would it be? If a customer could change one thing about our company, what would it be?’ Try to direct the conversation a little bit to idea generation and not, ‘I don’t like the lunch in the lunchroom.’
Back up your words. You have to remember that you’re the CEO or president and people are observing everything you do to see if you really are walking the talk, even more so when you’re new. If you say, “I’m going to run this as a team, and it’s all about teamwork and accountability and being customer-focused,” you have to try to find opportunities very quickly to exhibit that behavior. People tend to play chameleon in a new situation watching the CEO. What does the CEO value? What does it take to be successful in the organization? I’ve tried to communicate that.
Don’t be afraid to change things. The one thing that will get me upset or agitated is somebody saying, ‘We’ve always done it that way.’ I read one time those are the last words of a dying company. Even if you’re doing something well and it’s working today, it doesn’t mean you can’t keep challenging it and keep trying to get better each and every day. That goes with the attitude that if you’re not trying to challenge the status quo, you’re not trying to get better. You can learn from the past, but let’s not dwell on it. What are we going to do positively going forward?
City: St. Louis
Size: About 300 employees. Swan Corp.’s products are available through about 8,000 wholesale and retail outlets nationwide, as well as in the United Kingdom and Europe.
How to reach: Swan Corp., (800) 325-7008 or www.theswancorp.com
Motivation is commonly viewed in two ways: external motivation and internal motivation. External motivational tactics should only be seen as reinforcement of employees’ natural inclinations or intrinsic motivators. For example, compensation programs, rewards and recognition programs, professional development efforts, performance reviews and other extrinsic motivators should not be seen as primary ways to motivate employees. Unquestionably, these are indispensable aspects of organizational life. However, if you depend on them without understanding how they connect to the nature of intrinsic motivation, you do so at your own peril.
A good foundation to understanding intrinsic motivation needs to take into account both motivational factors that all employees share as well as factors that differ in influence for each person. Let’s focus on factors that people have in common.
In his book, “Drive: The Surprising Truth About What Motivates Us,” Dan Pink proposes three key principles that are components of intrinsic motivation: autonomy, mastery and purpose.
Who among us likes to be micromanaged? Few would answer yes. Does unnecessary interference inspire us to greater heights of accomplishment? Is it uplifting and inspiring? For most of us, even when interference is well-intentioned, it misses the mark for a variety of reasons. Having an appropriate level of control and self-direction for a given task or role is key to employee motivation.
Who wants to be known for doing a job poorly? We all want to do our jobs well. Continuous improvement is built into our nature. If we’re doing something we believe to be important, we want to get better at it. And Pink reminds us that mastery requires sacrifice and determination.
Intrinsic motivation requires that we believe in what we’re doing. Nonprofit organizations understand this better than most. Attract people who believe in what you’re doing and carrots and sticks become less important in your toolbox of management tactics. Just make sure you don’t get in the way of your employees. Don’t build barriers to your potential success and employees’ natural motivations to work toward a shared purpose will be a powerful engine for achievement.
What are some lessons to be learned from these motivators?
Find people who are passionate about your organization’s purpose and have proven to be persistent in the face of adversity. Ensure that the degree of autonomy you provide is a good fit for your employees. Ensure your employees have the resources they need to get continuously better.
Best-selling author and professor of psychology and behavioral economics Dan Ariely states that, “People don’t just care about money. We care about competition and completion, and we care about self-fulfillment and friendship and obligation — all kinds of things.”
Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO's Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity by discovering and using the unique strengths of the organization and its people. Andy can be reached at (314)863-4400 and at email@example.com
Jim McCarthy was frustrated. He worked hard to hide the fact that his employees at Goldstar Events Inc. were one of the biggest reasons for his frustration. They just didn’t get it.
They were worried that a sudden surge in the number of competitors offering half-price tickets to live events was going to be too much for Goldstar to handle.
“Our employees and other people started thinking, ‘Are we going to be overwhelmed? Are we going to be ignored because of this massive wave of discounting everywhere?’” says McCarthy, co-founder and CEO at the 50-employee company. “I’ll confess it was mildly annoying to me that my employees just didn’t get it.”
What they didn’t seem to understand is that Goldstar had gotten pretty good at what it did and was well-positioned to deal with some competition.
“I realized I wasn’t doing enough to help them understand the picture,” McCarthy says. “My approach to that and the approach of our management team as a whole was to really center people back on a couple of things.”
McCarthy reminded his employees of the attributes that made Goldstar great and encouraged them to quit worrying about what other companies were doing.
“What I made very clear to people is, ‘Don’t be focused on the success or failure of other companies,’” McCarthy says. “It doesn’t help us for other companies to fail and it doesn’t hurt us if they succeed, unless we don’t do a good job. … You hear about the seven deadly sins. When you see a company growing like crazy and getting popular overnight and that kind of thing, one tends to be a little envious of that. But there is a reason why envy is one of the seven deadly sins. It’s not good, and it’s not helpful.”
McCarthy decided he needed to step up his game and unleash a barrage of communication through multiple mediums to convince his employees that as long as they continued to work hard, there was no reason to fear the competition.
“If you feel your communication is adequate or sufficient, you’re almost certainly undercommunicating,” McCarthy says. “I felt like if I was being a nuisance, it was probably just enough. Here’s what we represent, here’s why it’s good, here’s why it’s unique in the marketplace, and here’s why the success of others doesn’t necessarily make a difference to us one way or the other.”
Overcommunicating doesn’t just mean repeating the same message over and over again. Then you’re a nuisance that serves no purpose but to annoy your people.
“You have to show, not tell,” McCarthy says. “Don’t tell me we need to be distinct and stand on our own values. Show me an example of something we do that nobody else does. Show me that the feedback system we have on our events is unique. Show me that nobody has the ability to get as many venues on one site. If your strategy is coherent, you should be able to tie it all back to the same core ideas.”
Alignment is critical to getting employees to buy in to your message.
“If we’re saying our venue relationships are a critical part of our strategic success, but the group is understaffed and undertrained, the message is really hollow,” McCarthy says. “The objectives of the organization and the work that people are doing on a daily basis, it has to line up with what you’re telling them is important. If the things they’re being asked to do in their work don’t match up with it, it doesn’t work.”
Two years later, McCarthy’s strategic overcommunication onslaught has paid off and helped employees get their mojo back.
“Our growth has sped up and the organization is stronger than it’s ever been,” McCarthy says. “Now they get it.”
How to reach: Goldstar Events Inc., www.goldstar.com
Find your greatness
When an employee brings you a genuine concern, you need to resist the urge to blame that person or anyone else for the problem. It’s a lesson Jim McCarthy learned as he fielded employee worries about how competition might hurt business at Goldstar Events Inc.
“It didn’t take me long to realize that it was a me problem and not a them problem,” says McCarthy, the 50-employee company’s co-founder and CEO.
“It’s like when you take your kid to the ice cream place and they sing ‘Happy Birthday.’ The employees have probably sung ‘Happy Birthday’ 50 times that day. But to your kid, it’s the one and only time. It’s very important if you’re in the ‘Happy Birthday’ chorus, that you sing it like it’s the first time. I try very hard that if someone asks me a question, I’m giving the information as though it were the first time I’m delivering it with that kind of thoroughness.”
As much as you may embrace the glory when you make a wise decision, you also need to embrace and respond to your own imperfections when you make a mistake.
“I wasn’t frustrated from the sense that I was annoyed that they were asking questions,” McCarthy says. “It just took me a little while to recognize that what I had was a management problem of my own.”
In June, a crowd gathered at the Firestone Country Club to hear former
Cleveland Indians baseball player André Thornton talk at the Smart Business Power Players Akron luncheon.
But the former two-time All-Star wasn’t talking about his 21 years playing professional baseball but rather the past four years of business experience as president and CEO of ASW Global LLC, a supply chain management company.
Thornton has gained a reputation of leading with faith-based values, integrity and humility.
“It’s not hard to be humble,” he says. “It depends on what you’re measuring yourself against. I can measure myself against someone I think I stand higher than and feel very good about myself, but the standard on which I measure myself, that has a lot to do with my faith, is one who is holy. It doesn’t take much to be humble when I know the thoughts that go through my mind. That keeps your feet on the ground.”
He says it’s easier to be humble when you recognize your limitations, which is something he learned from being a professional athlete.
“You recognize what you can do and what you can’t do,” he says. “I have no qualms about what I can’t do, finding someone who can help me do that and not feel diminished. I think you have to recognize that more than anything else. I’ve run across a lot of arrogant people in business and athletics, but there is nobody who can do it all. I don’t care how smart they are — they all need help. If you keep that in mind, it also helps to keep your feet grounded.”
Getting a good team is one of four keys he’s found to success in business. In fact, it took a year and a half to bring together the right team when he bought the company in 2007.
The second is to make sure they have the right strategy. The strategy has to fit the capabilities they have now and the opportunities to compete against larger players.
“It was vital to do that if we want to perform at the level we want to perform at,” he says. “We’re competing against some very capable companies around the world. … Nobody’s going to give us any business. They might like the fact that I hit some home runs, but nobody’s giving us business because I hit home runs. They may have opened the door to see who’s outside, but they haven’t given business.”
The third key is finding access to the right resources, whether that’s talent, equipment, financing or whatever.
“You have to have access to those resources, and you have to have the kind of network that if we don’t have it available to us at our fingertips today, we know how to get it shortly,” Thornton says.
The fourth key is you have to provide the kind of rewards and motivation that keep your people excited about coming back every day. He says to let people know that you can’t win without them.
“No matter what I think of my own talents, I can’t get the job done without them,” he says.
If you don’t encourage people, recognize them for their achievements and literally say, “Thank you for doing a good job,” people won’t feel appreciated.
“When you go to organizations that are struggling, people are murmuring, there’s backbiting, all those kinds of things; you’ll find the underlying thing is many of them don’t feel appreciated for what they do,” he says.
When he focuses on all four of these elements, then he knows he’s on the right track.
He says, “Those are the things that, for me, I have to make sure are happening within our organization because that gives us the chance to be successful within the playing field we operate in.”
How to reach: ASW Global LLC, (888) 363-8492 or www.aswglobal.com