Dan Benning gets that fitness is hard. That’s why, when he took over as president of 24 Hour Fitness’ North Division in 2007, he wanted to help his company make it even easier.
While 24 Hour Fitness’ mission of “easy and accessible fitness” was simple, Benning saw that it wasn’t always translating into the fitness experience of customers and employees.
Potential customers and fitness club members often had to jump through hoops to find, join and use the facilities. His noticed some of the 10,000 employees at the clubs struggled with a lack of leadership and were either scrambling to solve problems for customers or passing off responsibility with little accountability. To grow the company, he wanted to take the mission and really put it to work at his 200 clubs.
“From a vision, it’s not really complicated,” says Benning. “It’s ‘Fitness is hard enough. Let’s make it easy for people coming into fitness to make it easy to join and make it easy once they have joined; once they have joined, make it easy for them to use our clubs, and then for our team members, make it easy to run so they can spend time with our members and their team members.’”
Simplify the sale
The first problem was, when it came to buying gym memberships, consumers were conditioned from past experience to anticipate a hard sell, run-around pricing games and an overall negative experience. Making fitness easier and more accessible started with changing the negative perceptions consumers had about fitness clubs in general.
“They hated the sales process,” Benning says. “They hated it because it was a lot like a timeshare. It was a lot like buying a used car 20 years ago.”
Because much of customer’s alienation stemmed from the pricing games involved with buying a membership, Benning decided to getting rid of price negotiation completely. The clubs would offer one fixed membership price for everyone.
“Buying a gym membership five years ago – and even today with most of our competitors – is not a pleasant experience … We’re very focused that from a pricing standpoint, you know what the price is,” he says. “There is no high-low, ‘Let me go talk to the manager’ type stuff. We think we offer a great value. We go out with that great value and we give that to the consumer.”
If you don’t have transparency in the information you give customers, it’s hard for them to trust that they’re getting a fair deal. So Benning also spearheaded improvements to the 24 Hour Fitness USA Inc. website to include actual membership prices and better information about club locations. The company also became the first fitness club to let consumers sign up for membership online or by using a mobile phone.
Making these kinds of customer-centric improvement in the sales process benefits customers as well as employees. When customers are armed with more knowledge upfront, they are more empowered coming into the sale. They can spend less time weeding through information and more time getting answers to their questions. Pricing transparency also takes pressure off employees to sell, so they can really focus on helping customers, who are again, more receptive to the information they’re receiving in the first place.
In other words, when you make it easier for customers to buy your product, you make it easier to sell.
“The makeup of our sales force – it’s not about the art of the sell – it’s about interacting with friendly people who are in tune and focused on helping you achieve your fitness goals versus what’s in it for them,” Benning says.
“[It’s] taking away those barriers so that the consumer that already has enough trepidation about walking through the door…and take what the consumer is expecting, which is a high-pressure sale, and turning that into a ‘Here’s how we can help you,’ and introducing them to the folks in our clubs, and showing them all the things that they are going to be able to do to help them achieve their goals. That’s been a difference-maker for us.”
Listen to your customers
Making the customer experience easier starts with the sales process, but once customers buy your product or service, it’s the experience they have after that that determines the reputation and success of your business.
To find out how to improve the customer experience – making the clubs easier and more convenient for members to use – Benning decided to go straight to the source.
In addition to using customer surveys, 24 Hour Fitness became the first company in its industry to start measuring customer satisfaction scores through J.D. Power and Associates. Benning and his senior managers also dedicate most of their time to visiting clubs in person to get feedback from employees and members.
“The difference between today and four years ago in our clubs – there’s a significant difference in the way that we’re focused on the member experience,” Benning says.
He says the answers to a more successful company can be found in the clubs by talking to employees and customers.
“That’s where we find out what we’re doing that’s working and what we’re doing that’s not working. Some folks have the principle of you call the plays as the officer from the tower and you hope it gets run. We believe that you find the answers out in the clubs, you make some decisions and then you spend time with your team members and your customers, listening to their questions, concerns, getting them to understand why you’ve made changes. You’ll often find that you’ll tweak what you do based upon members’ and team members’ feedback.”
When it comes to making changes to improve your business for customers and employees, Benning quotes Will Ferrell’s fictional race car driver, Ricky Bobby in saying, ‘If you’re not first, you’re last.’
“As soon as you start waiting for someone else to do something, you’re going to lose,” he says. “That’s in everything. That’s in business. That’s what’s going on in your office or your club today. Don’t wait for someone else to talk to that member. Don’t wait for some other company to beat you to the punch because you’re worried about will it work or not. It’s ‘Figure it out, involve a bunch of people and be first, because if you’re not first, you’re last.’”
For example, when club feedback indicated that members found it a hassle to carry membership entry cards, 24 Hour Fitness implemented cardless check-in using fingerprint IDs. As the first fitness chain to do so, it has already enrolled around 2.5 million members in the program.
“Our members love it,” Benning says. “Our team members love it because it allows them to focus on the member versus the actual card checking experience. So the actual interaction of team members with our members has gone up based upon that process.”
The more opportunities you have to get customer feedback, the more data you have to use for continuous improvement.
“Our members know that if there is something going on that they really like, they’ll serve it up,” Benning says. “If there’s something going on that they don’t like, they’ll serve it up and we’re quick to act on what those are. We have ways for the consumer to communicate with us if they have an issue, and that is whether they just want to recognize a team member in a club or whether they want to say ‘Hey, this is going on in this club and I don’t like it.’ We have it built so that the consumer can do that via the phone. They can do that through our website. And as it relates to how we react to that – there’s all a mechanism around that that makes sure the consumer’s issue is handled, good or bad.”
Empower your team
Because most of the clubs are open 24 hours, keeping the clubs clean, equipment working and customers satisfied is an around-the-clock job for 24 Hour Fitness employees. Benning recognized that the new vision couldn’t just apply to customers; he needed to make fitness easier for employees too.
“I’m a big believer if you make our clubs easier to run for our team members, they can spend more time with their team members and with their members versus trying to figure stuff out. We’ve taken a lot of the junk out of running the clubs and work hard to make it easier through systems, processes and technology, so that our team members can do what we want them to do, which is serve those who serve our members and serve their members,” Benning says.
For instance, having different leaders in different parts of the club was confusing because it fostered a pass-the-buck mentality among employees in aligning goals and handing issues. So Benning first added one leader in each club to have final say and authority over decisions.
Secondly, he increased opportunities for employees to learn about the organization, implementing new programs such as 24 Hour Fitness University and management interest days to show employees potential career paths, and increase internal transparency about how the company operates.
“Transparency is sort of a cornerstone to trust,” Benning says. “We do everything in our power to make sure our team understands what our vision is, where we are trying to take the organization, what role we play in it, and if they want to play a bigger role, to have an opportunity to do that.”
Building that trust is the key to getting honest feedback from employees. The value in connecting with your employees on a personal level doesn’t just come from sharing your vision firsthand, but opening up communication so you can find out what they need and provide them with the resources and support need to be successful.
“What people forget is when you’re 20 years old and you see the president, or regional vice president, or division president, or CEO or whoever walks into their store, there’s a lot of scary mystery associated with that person … and that gets in the way of creating a great experience for our team members,” Benning says. “I spend a lot of time connecting with team members, getting to know them, getting them to understand that I’m a real person, and I need their help and that they’re important.
“Sometimes people look at that as taboo, that you shouldn’t get to know people past a business standpoint. I think that’s a bunch of malarkey. I believe that the more connected you are to your team, the better off that you’ll be.”
Not surprisingly, as the company’s employee engagement scores have improved, its J.D. Power customer satisfaction scores have also gone up. In spite of a recession, Benning has led 24 Hour Fitness to grow in workouts, improve in membership and consistently increase its satisfaction scores of members and team members, even achieving an A-plus rating from the Better Business Bureau.
“We are the first club chain to achieve that rating,” he says. “We’re proud of it. Our team members are proud of it, and it goes back to if you focus on the consumer, you focus on your team members and you have a simple strategy to deliver on your service promise, great things can happen.
“You have to have a plan. You’ve got to share it, and you’ve got to share it a lot. And you do that in lots of different ways. You do that in big meetings. You do that in town hall forums. You do it in small team meetings. You do it on phone calls. You do it in your written communication, but that communication of what you are trying to do is clear. Whatever you communicate, tie it back to what your vision and plan is so people understand that it’s not a poster on the wall, but it’s the way that you operate.”
How to reach: 24 Hour Fitness, (800) 224-0240, www.24hourfitness.com
The Benning File
North division president
24 Hour Fitness USA Inc.
Born: Des Plaines, Ill.
What was your first job?
I’m a high school graduate. My dad died when I was a junior in high school and my brother was in college, so I worked through high school and then after high school to help put my brother through college. At the same time, I figured I’d get him through college and then I would go to school. The circumstances came where I had the opportunity to be a police officer, but I decided, based upon my grandmother not wanting me to go do that … I started selling on the sales floor.
I was a sales counselor at Circuit City and I was making a lot of money and the rest is kind of history. I did 20 or so jobs at Circuit City. I’d call myself self-educated because I was fortunate, from everything to being at the right place at the right time to I believe I work harder than anybody else. I may not be able to always outthink you, but I promise I will outwork you.
What do you do to regroup on a tough day?
I love sports, and that’s why I think I have the best job in the world, because I get paid to work out and I get paid to help others lead a healthy lifestyle and workout. So I do. It is an amazing stress reliever and to relax and do something positive for yourself. I’d also tell you that I love team sports. I was fortunate enough to make some time to coach my son’s high school football team this year. It was an unbelievable experience. I will play you in anything. I like the team the best, but I’ll play you in tiddlywinks. I’ll play you in flag football, but I will play with you and compete with you on anything that you want to compete on.
As we make our way out of the worst economic downturn in our professional lifetimes, we are challenged to engage our organizations in the effort to turn the corner and achieve growth. Leaders have historically relied upon innovation, discipline and consistency to do so. In battling through the recession, many companies were forced to cut jobs, reduce spending and make significant changes to their organizational structure.
Conscious decisions were made to focus more on internal matters and spend less to service markets and customers.
But word travels fast in the world of Twitter and customers have immediate access to information about products and companies. This enables both customers and prospects to make better choices, often without sacrificing quality or service. To keep pace, you must adapt accordingly.
Engage your people
Leadership is vital for positioning the company, developing strategies that create value and engaging people to execute those plans. You must make appropriate investments in capacity and capability, innovation and talent. Communicate your vision and goals and be certain you have alignment throughout the organization.
Many organizations are trying to reinvigorate their employees after downsizing and focus them on growth. Be certain you have the right people with the right experiences to not only perform these duties but to enable you to compete effectively. Provide an environment and resources to motivate people to manage the complexities while strengthening the business. Engage them in the process while maintaining an effective dialogue to bolster their confidence. Not only will they succeed at their jobs, but they will also creatively seek out solutions to issues and find new opportunities for the organization.
Achieving growth is highly dependent on how you lead and what you focus on. You must lead the growth initiative. Be visible, engaging and in touch but avoid becoming too hands-on.
Open your eyes
One key point that seems to have been forgotten recently is competitive intelligence. You should never lose sight of where the market and competitors are going. The competition will always seek out new opportunities and innovation, especially if you remain idle. Comparing your capabilities with your competitor’s is very worthwhile.
You also need to stay in touch with your customers and have a good knowledge of how they operate and what is important to them. Find ways to engage your customers. Listen to them and gain an understanding of their views, challenges and opportunities. This will enable you to be more effective as a leader and will show the organization what you value. Determine firsthand how your products, programs and service affect overall customer satisfaction. Confirm that you are producing and providing these at a level that meets or exceeds their expectations.
Track your efforts
Growth takes determination and foresight. Seek out growth and consider new opportunities where your company can deliver value not only in traditional markets but also in adjacent markets and new verticals.
When you know where your company can deliver value, push to drive innovation and collaboration. Effective new product development capabilities are necessary to ensure the continued success and growth of the company. Without new products, the company cannot have continued revenue growth or stay current with the technological advances of its competitors. Building effective collaborations can facilitate speed to market, investment and creative thinking. You also must know where and how to collaborate to bolster your innovation capabilities. Evaluate your overall supply chain and determine what aspects you must own and control as opposed to being able to influence these areas to achieve your goals. Flexibility could be key to allowing you to react quickly to changing markets and dynamics.
Just as leaders and management initiated the cost management actions to survive the recession, they too must monitor leading indicators and lead the organization on its growth mission. Knowing where and how to compete, selecting the best talent, and driving innovation will ensure sustainable growth. Success requires fresh thinking, creativity, collaboration and continuous innovation at all levels of the organization. Once you find the necessary tools, you’ll find it a lot easier to achieve your desired growth.
Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. Utilizing C-suite experience as a CEO and executive experience in early-stage startup and Fortune 100 companies, he brings unique skills, insights and perspective to enable clients to improve business performance. Tony can be reached at (314) 825-9525 or email@example.com.
Eric Graf, president and CEO of Ritzman Pharmacies Inc., had to make the tough decision to close a store and combine two others because of the economy. However, Graf didn’t turn his back on those employees and found ways to retain them for when good times returned.
Graf, who leads 160 employees at the pharmaceutical company, understands sacrifices have to be made in business. He also knows that when times are tough you have to be strong and resilient.
“Like everyone else, we had to look at our business units and look where there was profitability and where there was not and where we could make better use of that,” Graf says. “Fortunately, we had some positive solutions to those challenges.”
Graf says the process wasn’t easy, but his decisions paid off in the end.
Smart Business spoke to Graf about how to handle the good and the bad in business.
How did you keep morale up as you were eliminating stores?
We were very cognizant of the impact to our employee morale within the company. Fortunately, as we downsized, we also knew that we had this startup, cold-start opportunity in a new location. So we bit the bullet and retained all those associates from the closed business unit from December until April when we opened the new business unit. That was huge in speaking to our people. You try to be upfront. You try to be present and not sitting way in the back so that you’re available and putting your face on things. You have to express things to them one on one rather than through memos. You have to make sure you have a presence with the associates.
What is important to keep in mind during tough times?
You have to stay with your core beliefs, your vision, mission and your core values. You try to live those as best you can. Those values serve you well in positive times when you’re asking for more because you’re short-staffed because growth is coming faster than you can keep up with. But it also serves you well in the negative times when you are making adjustments that can impact you negatively.
How do you keep employees informed about what’s going on within the company?
One of the things we do … is we publish our financial information throughout the organization. Everybody sees our revenue, our cost of goods, all of our top-line issues compared to budget, compared to prior year — they see those on a weekly basis. When it came time to close that store, there was no mystery. Everybody had seen the sales taking a dive and had seen that how could the store become financially viable. When they see that trend compared to other trends or other stores, they realize that something needs to happen there. That openness with financial information is very critical and people knowing and understanding why you’re making the decisions that you’re making is important.
What helped you recover from tough times?
It’s always key, especially as times get tighter and tougher, that you have strong vendor relationships. A vendor relationship is very much a two-way interaction. Whether it’s a good day or a bad day … you need to negotiate smart, not just strong. I recently read a quote from Indira Gandi that said, ‘Old leadership used to be about muscles and new leadership is about people and relationships.’ So while you’re striving to get a good cost and a fair deal, you need to be bringing value to them in terms of what you’re seeing in the marketplace. You need to be giving them feedback to improve themselves.
When you started seeing success again, how did you maintain it?
You have to build on that foundation. You have a heritage of different key strengths and that goes back to your mission, vision and core values. You look at the reasons for success and it comes down to your associates and how you serve your customers and what your priorities are there and how you deploy your assets.
Even though things are a little tougher, you have to look for those people who can get out there and find more opportunity and develop more business for you instead of pulling back on that.
HOW TO REACH: Ritzman Pharmacies Inc., (330) 335-2318 or www.ritzmanrx.com
Jean Birch finds it quite difficult to pick a favorite item on the menu at IHOP. Actually, that’s not really true. She just has a hard time staying loyal to one item as her favorite when there are so many tasty treats to choose from.
“It switches just about every week,” Birch says. “Last Saturday, I ordered the Cinn-A-Stacks pancake combo. It’s like the inside of the cinnamon roll rubbed all over your pancakes. I can’t get enough of those. Good stuff, man.”
Birch, the president of International House of Pancakes LLC, sees herself as the restaurant chain’s chief cheerleader. The company finished 2010 with 1,504 IHOP locations and expects to add as many as 65 new locations this year, with an additional 330 units planned over the next 19 years.
Birch loves to get out and visit as many restaurants as she can fit into her schedule, but she’s not just there for the pancakes. She wants employees to feel her energy and see her passion for the business. That often takes some effort as many employees find it hard to see past her title.
“People tend to drop more dishes when I’m around,” Birch says. “They’re on their best behavior and they want to make a good impression, but I don’t personally see myself as any different than when I was a bus girl in the restaurant or when I was a manager in the restaurant.”
IHOP is owned by DineEquity Inc., a 17,700-employee company which also owns Applebee’s Restaurants and took in $1.33 billion in 2010 revenue. Before she came to IHOP, Birch recalls those younger days and the visits she had from executives who weren’t there to enjoy a meal or exchange a few laughs with the hired help.
“They were looking for things to be wrong in the restaurant instead of trying to find things that were working well and that we were proud of,” Birch says. “I have plenty of people in my organization that can tell people how to improve their business and what they can do to be better.”
Birch says her job is to break down any barriers that exist between her and her people, establish a rapport with them and get them as excited as she is about being part of the IHOP brand.
Show you care
One of the challenges Birch faces in building passion and energy is that IHOP is a franchise operation. Franchises thrive on consistency, and with the wrong approach, that commitment to doing it a particular way can restrain passion and create robots.
It’s up to you take the right approach.
“In a franchise community, you don’t just make a decision and send the word out,” Birch says. “In a franchise community, you want to engage the franchisees and make sure you fully understand their perspective on a particular issue. Enroll them in wanting to solve the problem in a meaningful way. It’s a lot more about vision and understanding what the big brand is all about, collaborating on how to solve particular issues and fundamentally we get where we need to go.”
You need to make sure people understand your brand and the things that you stand for and the vision that guides your business. That is a key to having a successful franchise operation.
“Without strong vision and leadership at the top, franchisees will tend to move in different directions as they see the world from their perspective,” Birch says. “These little decisions, if not tied to a cohesive strategy can get your brand off track very quickly. It becomes a different IHOP in L.A. than you have in Nebraska than you have in Boston, which undermines the strength of the brand overall.”
But just because you have a brand, you don’t have to, nor should you dictate every step and every action that your people take. You need to provide outlets for their skill and creativity to be unleashed and put to use on the job.
“We want their creative energy, but we want it channeled into the areas that are going to do the most good for our business,” Birch says.
Birch takes it upon herself to get out of the office as much as she can to provide opportunities for employees to feel more connected to her and to the brand.
“You have to have a lot of self-awareness,” Birch says. “The biggest thing you can do is listen. Ask an open-ended question and then listen. Tell me about your restaurant. Tell me your story. How did you get started at IHOP? Clearly, those are questions they know the answer to. This isn’t a trick question like, ‘What was your labor percent last week? What market share do you have here?’ This isn’t trying to trick anyone. Just tell me your story about why you’re involved in this business. What’s on your mind? What are you most proud of in your restaurant? You get people talking about those kinds of things and pretty soon, you’re just two people having a conversation.”
Show people that you’re not just there to dig up dirt and find excuses to complain, but to get them even more engaged in what your company is doing. Take a supportive and encouraging tone and you’ll garner a lot more loyalty.
“It’s not as hard as you think,” Birch says. “These folks are relying on myself and the team to do a good job of leading this brand and creating opportunities for them today and tomorrow. I don’t take it lightly.”
Put the work in
When you communicate with your people, you need to be aware of how they process information and which modes of communicating work and which ones don’t work. That’s going to be key to establishing the healthy rapport you’re seeking.
“We all have our way that we hear things or like to communicate,” Birch says. “It’s probably far more important that we understand how those who work for us want to hear things and want to communicate. It’s not about my dominant style. It’s more about what that individual who works for me needs. So how do I explain it in a way that makes sense for them?”
It’s a valuable lesson to learn ? the idea that you can’t just think about yourself and your own personal needs when you’re pondering the next step for your business.
“It’s not about the leader’s needs,” Birch says. “It’s about the subordinate’s needs and how they are going to work through this problem.”
You’ve got to put in the work to come up with solution that you and your team can execute. It’s not a solution you’re likely to find sitting behind your desk.
“You go to the people who do the work, the people who are in it every day that get a multitude of perspectives,” Birch says.
“From the dish washer to the franchise owner to the franchise business consultant to the people at the support center. If you talk to the right people, the real issues come to the surface. And the solutions to those issues, although never easy, they’re not as hard as they sound when you’re trying to do everything locked in an office by yourself. The people have the solutions if you can just uncover them and bring them to the surface.”
And when you engage people and show them that you care about their opinions and demonstrate that you need them to succeed and grow your business, you’ll have taken another step toward earning their loyalty.
“As a mid-level leader, I was confident I had all the damn answers,” Birch says. “I was ready to go off and just go do it and make sure everybody followed in line and I was just brilliant. Follow me and off we go. The more I’ve grown as a leader and the higher up I’ve gone, the more I’ve realized you don’t have to have all the answers. In fact, it’s probably better if you don’t start with all the answers.”
Stay in touch
If you find that you’re not getting a lot of ideas from your people, that’s not a good sign for you, for your business or for the two-way flow of communication in your business.
“If I stop getting a lot of good ideas from franchisees, I get a little worried that they are starting to withdraw and distance themselves from the brand overall,” Birch says.
Getting ideas requires more than just a drop-in by you at a distant location away from the corporate office. You need additional personnel who can fill in the gaps and provide a regular outlet for ideas on how to make your business even better.
“We have field-based franchise consultants that work day in, day out with our franchisees,” Birch says. “They are a collector of ideas for us. We have regular meetings with our franchisees, both formal and informal, which is consistently a two-way dialogue. Here’s what we’re doing and here’s where we’re going. This is what the consumer is involved in. These are the great things on the horizon for our brand that we’re getting ready to go. Then we open it up to, ‘What’s on your mind? What do you think we should be working on? What are some ideas we can save money on?’ We get a tremendous amount of really good input. When you start to do a number of those, you see patterns.”
One thing to keep in mind as you’re implementing methods to gather feedback is that in most companies, you’re not trying to solve matters of national security.
“It’s not like we have to go figure out a nuclear physics problem,” Birch says. “We’re in the restaurant business. Sometimes we have to remind ourselves that it’s just that simple. Great food. Great service. Great place. Do that over and over and over again and you’re going to have a pretty good restaurant company.”
Birch says it takes special people to learn to manage their creativity and apply it to a business where they can’t do whatever they want to.
“The biggest challenge in leading IHOP would probably have to be this unique opportunity to be the leader of some really independent-minded entrepreneurs,” Birch says. “They are very involved, very active, very bright individuals that are running their businesses every day and have a very strong entrepreneurial spirit. But they have chosen to align their efforts with a proven brand and proven formula for success, which is what IHOP and franchising is all about.”
You just need to make sure you’re staying in touch, showing your passion and constantly engaging them in the effort to make your brand better. Don’t waste their talents. Find a way to harness them.
“As you look at this compared to other leadership situations, you really have to think through the fact that they are the leaders in their businesses and they are bringing so much value to the table day in and day out,” Birch says. “You can’t just command and control.”
How to reach: International House of Pancakes LLC, (818) 240-6055 or www.ihop.com
The Birch File
Jean Birch, President, International House of Pancakes LLC
Born: Boone, Iowa
Education: Bachelor’s degree, double major in economics and oriental studies, University of Arizona; MBA, Southern Methodist University
Who has had the biggest influence on you? I had a very strong mentor in one of my previous jobs. Aylwin Lewis. I worked for him at Pizza Hut and he was a tremendous mentor and role model. He told me what I needed to hear, not what I wanted to hear. I worked for him for about two and a half years. He mentored me for about 10 years.
It was mid career when I was at Pizza Hut as a district manager. He told me how the organization saw me, how I could be more effective, what I did right, what I did wrong and more importantly, because of the roles he created around me, he stretched me far more and far faster than I ever would have gone on my own.
Birch on looking in the mirror: I think it’s from “Good to Great,” the concept of the mirror in the window. The idea is, when something goes wrong, a good leader should first look in the mirror. What did I do that caused this not to go right? Did I not communicate well? Did I not research the project well enough? Did I not communicate effectively? When things go well, you should look out the window to your team and congratulate them for the great work that they did. That piece of advice has done more for helping me frame the best ways to get the most out of folks than any other piece of advice that I’ve had.
If you asked to see Mariani Landscape’s projects, CEO Frank Mariani would showcase the best he has to offer.
One day, hopefully, he’ll offer more.
“When we have reached mecca will be when I can tell you, ‘Here’s my entire book of business. Open the pages and stick your finger on a name, and we’ll go see that job, because every job is perfect,’” Mariani says. “Some people might think that’s unrealistic; I’m driven by that.”
That drive has already helped Mariani expand in services and size. He took over the family namesake when father and founder Vito passed away in 1973, leaving nine employees. Today, the company has 420 employees.
Smart Business asked Mariani how to grow and improve your company.
How do you communicate as you grow?
We have town-hall meetings about every eight weeks where we encourage everybody to come have pizza and we give a state of the union. Especially right now, it’s important because people are afraid for their jobs.
It allows people to get inside our head and understand what we’re thinking about, and hopefully, we can get an idea what they’re thinking about. An easy (issue) to look at right now would be the state of the economy and what we need to do to stay focused so that we can keep our team intact.
We open it up for discussion. People can raise any issue. If no one is attacked for their ideas, it will encourage participation. It takes awhile to build that trust. By shaking hands and having a cup of coffee with them, people are going to open up. If you make yourself available, they’ll let you know what’s on their minds. If you hide in your office, you won’t know what’s happening in your company.
What role have employees played in Mariani’s growth?
As we’ve grown the company, we’ve been able to add more expertise and offer our clients a better product, so it really is a win-win. To grow only for our clients and (not) benefit our associates would be a mistake. To grow for the associates without benefiting the clients would be a mistake.
When somebody comes in and interviews for a position here, we tell them, ‘If you have great ideas, let us know.’ Therefore, our company — which originally was strictly a maintenance company — grew to be landscape design, landscape architecture, landscape construction, then we brought somebody in who had expertise in perennials (and) started growing. All these types of things offer opportunity, which, in turn, allows growth, which, in turn, allows financial stability and opportunity for associates.
How did you position what was a small family-owned business for the growth you’ve seen?
A lot of it has to do with ego. I’m not embarrassed to say I really don’t want to be second.
We have an open-door policy, not only amongst our associates but actually for our peers in the industry. We encourage other landscape companies, ‘Bring your staff in and see how we go about doing business.’ It makes us sharpen the way we go about doing business because they’re going to see the work we do in the field, they’re going to see what our offices are like, so you put a little bit more spit and shine and polish on everything.
I’ve attended tours of other landscape companies and you go in there and it looks like a movie set where you see the fronts of the buildings, but when you walk in the door, there’s nothing behind it. I used to say to myself, ‘This is insulting.’ I’m proud of what we have here.
If somebody becomes better because of what they saw here, that forces us to take it to the next level. The more we can take it to the next level, the next level, the next level, the entire green industry benefits — so does Mariani Landscape, as long as we’re up to meeting that challenge. There’s nothing to hide; there’s only things to celebrate.
How to reach: Mariani Landscape, (847) 234-2172 or www.marianilandscape.com
Thomas J. Neri was facing two problems when he took over as president and CEO at Lawson Products Inc. First, he had a work force that had lost its desire to be innovative and wasn’t feeling any pressure to rediscover its passion. But that paled in comparison to the second problem, which was the fact that his company was being targeted by the federal government for improper selling practices.
It was under those inauspicious circumstances that Neri began his tenure at the top of Lawson, an industrial distributor of maintenance and repair supplies. The tricky part for Neri was that despite a seemingly obvious major problem, he still had to convince some people in the organization that changes were needed.
“The biggest challenge was building that burning bridge for the organization to say, ‘Look, we’re not as good as we thought we were and we have to change,’” Neri says.
“How do we get back to being what we need to be? How do we convince our customers that we are going to be a valuable and reliable partner? So you had the culture change. You have working through this legal issue. The other side is looking at what sort of people we were going to need to run this organization going forward.”
It wasn’t going to be an easy fix at the company, which now has 1,010 employees and 1,200 independent field sales agents. Neri needed to clean house on the senior management team and find people who could be more aggressive about growth, but do it in a way that would avoid any future entanglements with the federal government.
“We had to be very honest with ourselves and with our employees and our agents and, to some degree, our customers and our vendors that we weren’t as good as we thought we were and we were going to be much better,” Neri says.
You might be surprised to learn that as he began his effort to lead Lawson Products through this storm, Neri says he didn’t really feel fear.
“At the end of the day, you just have to say, ‘I’m open to changes,’” Neri says. “‘I’m open to opinions. I’m open to being entirely wrong.’ But what you hope to find is a compass heading that is the right way. It’s not going to be the exact map because it never is. Once you’re comfortable with the compass heading, you just have to charge ahead with it. The worst that happens is you get fired.”
Build your case
Neri did have to make wholesale changes on the senior management team, but the firings were not the first thing he did upon taking the helm at Lawson.
“There were a number of people that I was not sure if they would make it or not or would buy in to the vision,” Neri says. “So we didn’t make a lot of initial changes in the first six months in personnel. But once we got the story out as to what the burning platform was and where we had to go with it, it became fairly clear that we had to change people out if we were going to get there.”
When you’re dealing with a crisis, you need to approach it with patience and honesty.
“As we began to make some of these changes, we simply told the organization, ‘Not everyone is going to have a job when we’re done with this. We don’t know who will and who won’t,’” Neri says. “But what we did say is we’re going to provide training for everybody for some of these new positions and we’re going to pick the best that we can.”
As Neri began to talk about the areas in which the company had lost its way over the years, he bolstered his words with financial data.
“You use some very basic financial measures and performance measures as it relates to customer service,” Neri says. “Most of those are fairly easy to get. So the story came out pretty clear that at least in comparison to our competitors, we weren’t performing very well.”
He also reached out to customers and got some feedback from them about their perceptions of Lawson Products.
“The results came back and were pretty stunning for all of us in the organization, even those of us who were only here a short while,” Neri says. “A lot of our in-house perceptions were certainly not what the customer thought of us. When we thought we gave great customer service, it came back, ‘Well, it was OK,’ but it certainly was no better than other people. So as you start feeding them real data and real information, then you start applying day-to-day world things that they do, they start to see that we don’t measure up and some of the things that we do inside don’t seem to make a lot of sense.”
The lesson here is that when you’re trying to make an argument, you need to build a case and gather information and data that supports your cause. Then ask the people you’re presenting to, if they have concerns, to make their case as to why they think you’re wrong.
“We held a lot of employee and department meetings or a lot of different meetings with larger groups and small groups and began to lay the case out for them in relatively straight-forward terms,” Neri says. “We were pretty open in listening to what they had to say. We would lay out a problem or an issue and say, ‘OK, we believe this is right solution. You tell us why it isn’t the right solution and if it isn’t, tell us how you’re going to correct it.’ That first step is convincing them there is a problem, but the second step was going to them and having them help us tailor-make some of those solutions.”
Find people in the company who can help you make the case for those solutions that you support.
“I tried to find people who had been with the company for quite some time and were influencers throughout the company,” Neri says. “Even though they may not necessarily have agreed with all the changes, what I did was spend quite a bit of time with them convincing them that they can be a big part of it.”
It’s OK to seek out help if that help can make it easier for you to get things done.
“I tried to find four or five of those influencers who can make the case for me and had a lot more validity with the older organization because they knew them better,” Neri says. “When you talk about honesty, it takes quite a long time to get people to trust you. Until you get that trust built up, you need some other people in the organization to do that for you.”
When you’ve made that effort, look at where things stand and then plot your next step.
“There was a large cadre that said, ‘We don’t believe we’re as bad as we are,’” Neri says. “We don’t see the need for change and we don’t like the change you’re talking about.’ The old analogy is, ‘The train is leaving the station. Either get on or step off.’”
Manage the message
As you begin to roll out the next step, your plan for recovering from a crisis, you need to put a great deal of thought into how it will be presented and how it will be received by your employees.
“It really starts with our director of communications,” Neri says. “Part of this is making sure your messages are the same messages and you’re not contradicting each other. Part of it was putting a calendar together and saying, ‘OK, here are the messages we need to get out and here is the information or feedback we want to get back from them.’ So a calendar was laid out, and I would spend a great deal of time on the content, especially on the town halls. I would spend a lot of time going over the communication and what the presentations were and who is giving the presentations.”
You need to talk about the actual rolling out of information and the logistics involved in doing so, in addition to the meat of your plan.
“What’s the rollout look like for the next six months?” Neri says. “What are you going to be saying to the organization? How does that tie into the corporate initiatives? Then as we get closer, what are we going to roll out next month?”
You need someone in place who can help you manage your message. It’s critical that this is someone who you’re willing to listen to and abide by, even if you don’t always agree with them.
“You’ve got to really organize how messages get out and how you get feedback,” Neri says. “You do want someone who is adept at being able to work with you for about a month or two and can begin to understand your style. Someone who can understand that how I give a speech is different than how someone else gives a speech and that my writing style looks like this.
“They have to feel that same freedom to be able to say, ‘Yeah, I know you like to say it that way. But it really comes across badly. I really would like you to try it this way.’ It really becomes a symbiotic relationship. You’ve got to have confidence in each other and trust each other’s opinions.”
What you’re trying to do is create a picture of what it’s all going to look like when you’re finished with your plan.
“It doesn’t have to be that solid of a picture, but it has to give people an idea of where this is heading to,” Neri says. “My style is to say, ‘Here are the guts of what it is. Now I need your help in reshaping that and changing the face of it a little bit.’ You do have to give them some sense of what it’s going to be like out there.
“Just as importantly, what is going to be my role in this? Why is it going to be a benefit to me if you make these changes? What do I get out of this from a working perspective or a career environment perspective? You have to do both of those in tandem. People aren’t really sold until they understand how it impacts them.”
To help in this process, Neri transitioned his human resources department into an employee advocacy department.
“That position had a dual reporting relationship to myself and the chief operating officer,” Neri says. “I made it clear one of the responsibilities of HR is to be an employee advocate and to do outreach programs to make sure that people are being talked to.”
As you move into the execution stage of your plan, make sure your employees have a major goal that helps tie all their efforts together. At Lawson, this goal was helping the customer.
“We went into a lot of explanation as to what that really meant at every level,” Neri says. “If you worked in the warehouse and you were lifting boxes or sorting things, we made it very clear to you how important that job was and how it translates into customer service.”
Keep in touch with your direct reports and encourage them to do the same on down the line as to the progress your people are making in their jobs.
“I will sit with the managers every once in a while and say, ‘How do you think Scott is doing?’” Neri says. “Is he meeting all the goals that we have? Are we pushing him along strong enough? Are we giving him the training?’ Based upon the conversation with those individuals, I’ll know whether they are having those conversations with those people.”
As Lawson entered 2011, Neri’s efforts were showing results. Net sales increased from $301.8 million in 2009 to $316.8 million in 2010. The federal investigation resulted in a $30 million penalty in 2008 that was paid over three years.
Neri is confident better days are ahead and are the result of a changed corporate mindset.
“Your jobs are very important, but what’s more important is who you are and how you go about that job and your attitude that you carry with it,” Neri says. “I’m a big believer that attitude is far more important than the technical skills.”
How to reach: Lawson Products Inc., (847) 827-9666 or www.lawsonproducts.com
The Neri File
Thomas J. Neri, President and CEO, Lawson Products Inc.
Education: Bachelor of science degree in accounting, University of Illinois at Urbana-Champaign
What was your very first job?
I was a paperboy for either the Daily News or the [Chicago] Tribune. What I learned was I really didn’t want to do that because my dad was not going to get up at 3 in the morning to help me wrap papers.
Who has had the biggest influence on you as a leader?
Sam McKeel. Sam had been publisher at the Philadelphia Inquirer for a long, long time. He retired and he came to the Sun-Times in 1989 or 1990. He taught me that the most important thing about leadership is who you are — not skill set, not who you know, not the technique. Being a leader is really about being a people person and understanding how you can achieve things through other people. You’re very limited in what you can achieve yourself. He just taught me a lot of good lessons.
What one person would you like to meet from all of history and why?
Winston Churchill. The thing that fascinates me is that he had such a checkered career. He was someone born with a silver spoon. He failed miserably during World War I. He failed in a number of different areas. He was out of favor politically for 30 years.
When World War II started, they brought him back in, and he was probably the strongest voice of freedom in resisting the Nazi party. After the war, he was shuffled off again. It would be fascinating to talk to someone who had seen the bottom and seen the top several times and always managed to move forward in his life.
A few years ago, when one of Rafi Holtzman’s employees called him from Europe and said she forgot her bright pink suit pants she needed for a trade show she was attending, he went to her house and, not wanting them to get crumpled in his suitcase, carried them by hand on the plane. He got odd looks, but it was just one way the CEO of Luidia Inc., a creator of interactive whiteboard technologies, showed his employee that he cared about her.
Holtzman also drinks his coffee with employees so he can talk to them, and he bought employees expensive ergonomic chairs so they would be comfortable. And when any of his nearly 100 employees have family emergencies, he says he’ll see them when it’s over instead of expecting them to work during the crisis.
“Even if you’re a cold-hearted capitalist, you still want to act like this because it buys you the thing that money can’t buy — it’s the personal responsibility, it’s the self-motivation — salaries will not do that for you,” he says. “Salaries are short-term sugar highs. If people understand you’re there for the long-run … it goes a long way.”
Smart Business spoke with Holtzman about how values affect a company.
What role do values play in an organization?
There are two kinds of motivation in human life — and it’s basically falling into two buckets. One of them is fear and the other one is love. Fear is a great motivator for a short-term burst — if you’re running away from a wild animal or doing a very fast project that you need to do right now and kill yourself to finish it. But if you really want to sustain growth, creativity, teamwork for the long run, then you have to be highly motivated to continue this for the long run, and the only way I know how to do that is personal involvement. I’m using the term love, but it’s a lot more than that. It’s a combination of respect and personal responsibility and taking things really personal.
It helps a lot if you believe in that. You can fake it and do pep talks. A lot of companies will say that people are their strongest assets. But from my experience, not a lot really do mean it on the basic level. If you can really believe in that, you’re a large part of the way there.
How does showing care to employees help the business itself?
You have to go really outside the box to get support that will last for years. Most organizations manage to keep the people they don’t want to keep — we like to keep the people we do want to keep.
Changing employees is bad for you. It’s also hideously expensive. A stabilized company is always good rather than changing employees all the time — this going up and down and the learning curve and the hiring process puts stress on everybody.
How do you hire well the first time so you have a stable company?
Don’t compromise. Wait a bit more and don’t compromise. As a matter of compensation, it’s not always the highest monetary compensation that brings you the best candidate. You really have to see if there’s a fit on the vision both in the day-to-day activity and in the long run. People who fit in with the company values and, at the end of the day, are proud of their work, get significant points over somebody who just thinks of work as work.
What questions do you ask to get a good match?
The top question I ask is, ‘Tell me about the project you are proud of.’ I remember one candidate going, ‘Look, I started this, I made the proposal to the department of defense, I developed the process, I went all the way from idea to actually selling it, and it was a great thing because the company sold a lot of them. What I got from this I got taking ownership from one end to another.’ He had pride of ownership that he did a good product — he was really high on my list.
The other question is, ‘What do you want to do when you grow up?’ You find out a lot about people when they answer this question — there’s only one good answer and that’s I don’t want to grow up. One of them said chocolate taster — that was a good answer.
How to reach: Luidia Inc., (650) 413-7500 or www.e-beam.com
As A.J. Hyland sits comfortably on one of the two modern leather couches in his second-floor office at Hyland Software, it could be easy for him to look through his office’s glass walls across the maze of cubes and simply smile in contentment.
After all, the software company, which develops the enterprise content management solution called OnBase, grew 77 percent between 2006 and 2009, reaching $133 million in revenue and landing it a spot on the Inc. 5000 list last year for the fifth time. The company has made six acquisitions, won numerous awards and has more than 9,700 customers, and of that, 97 percent renew maintenance on the software each year. On top of that, it now has more than 1,100 employees and constantly has no shortage of applicants because it has gained a reputation of having a Silicon Valley culture despite its suburban Cleveland location.
Yes, Hyland could simply smile in contentment, but all of that is just the beginning for him.
“I get more excited each year because we’re getting more and more strong, but we have so much potential to grow,” the president and CEO says. “For me, it’s about building a strong foundation but never being content. That’s why we’re talking about evolving this year with all the employees. We’ve got to move forward. It doesn’t have to be this massive rip-up change — we’re doing so many things well, but let’s continue to tweak things and get better and better and better and grow and that’s key.”
Evolution is vital because the competition has taken notice of the organization and all of its successes.
“We can’t just sit here — we have to move forward,” he says. “There are way too many people coming after us in this marketplace. There aren’t a lot of barriers to entry in this space. People can develop products and services to compete with us, and a lot of people are trying to copy what we do, so as they get close to us, how do we leapfrog ahead again? A lot of that has to do with evolution.”
To continue growing and getting better, Hyland is proactive about growing the company by making sure he hires great people, focuses on customer service and effectively communicates.
He says, “If you want to grow, you have to believe that you’re going to do it and make it a self-fulfilling prophecy.”
Hire great people
As Hyland Software has grown, unlike many companies, it hasn’t waited until there is enough work to justify hiring new employees. The company has been proactive and hires employees well ahead of when they’ll actually be needed.
“We hired ahead of where we needed to hire to have people there so that when we got to a point, we were able to service the clients we had,” Hyland says. “It’s not like we held, off, held off, held off, and as soon as something hit, we hired a bunch. We hired a bunch and pushed the growth and kept on bringing people in. …You have to add good people all the time.”
Many may scoff at spending money on such expensive resources as employees before the business is there, but Hyland says that with great risk comes great reward and it’s just one part of pushing yourself to grow.
But it’s not just hire a bunch of people without any thought behind it. Hyland has a specific approach to the practice.
“It comes down to planning and figuring out what areas are going to be hotter than others,” he says.
He looks at the business and says that if it grows by X percentage on the sales side, that shows him how many people he needs to hire on the technical services or support side. He also brings into account data about how many people leave the company each year, as well.
“It’s really about looking at your business and analyzing the historical data and having some lens into where it’s going in the future,” Hyland says.
The key is that you have to be grounded in data and also be willing to use it.
“Spend some time sifting through the data,” he says. “A lot of people have the data but they don’t spend time cutting it up or slicing it from different angles. Every month we look at all of our sales, services data and figure out what’s happening. Are we seeing a couple trends over a couple months? What does that mean from an employee perspective?”
But it’s not just hard data that you have to incorporate into your hiring plans. Listen to what your customers are telling you, as well.
“You get comments from customers — ‘Hey, it’s tough to get a hold of you guys these days,’ or, ‘Your backlog for services is stretched out too long,’” Hyland says. “That immediately throws us a flag, and we say, ‘OK, we’re low in certain areas, and we want to make sure we have enough people to handle those volumes.”
As you assemble the data and the feedback, you’ll likely want to ask your department heads and managers what they think they’ll need in terms of human resources, as well, but Hyland says you also have to make sure to ask questions when you have those conversations.
“When you’re dealing with departments, people are going to ask for the moon,” he says. “If you ask what they need, they’re going to ask for a lot, and it’s good to have some checks and balances on that and check people and say, ‘Why would you need five people there?’ or, ‘Why would we need four people there?’ and make people come up with legitimate reasons.”
Once he knows how many people he needs to hire, then it’s time to focus on the hiring process itself.
“Setting expectations in the interview process is good,” he says. “[It’s] coming up with creative ways of drawing out personalities in an interview process.”
At Hyland Software, it’s a multistep process that doesn’t rely on one manager to make a decision. Applicants go through multiple interviews with both human resource staff members as well as managers they’ll be working with directly.
“Having the multi-interview process is helpful, but [it’s also] having them talk about experiences where they had to deal with adversity and see how they’re going to function in this environment to see if they’re self-starters,” Hyland says. “If you can come up with questions and approaches and draw that out, that’s going to be part of your success in bringing in the right people.”
He says it’s also helpful to be honest about their work environment and really share what it will be like.
“Have an overall tone of your department that’s communicated to the applicants so they can self-weed-out,” Hyland says. “‘OK, this is how it works here, and maybe it’s not perfect, but this is how we function, and if this is something that’s going to make you uncomfortable, maybe it won’t work.’ Setting proper expectations in both directions is very important.”
It’s also important to involve successful employees in the process. He says that if you have a couple successful individuals in a particular area that you’re hiring for, identify what traits they have that have made them succeed. Train those people to be a part of the interview process so you have more people involved, and look for those traits when interviewing.
Lastly, Hyland says it’s a common mistake to get excited about all the wonderful things you see on somebody’s resume and ignore the red flags that come up in your interview process.
“More often than not, if the HR [representative] isn’t feeling good about somebody in terms of their attitude or approach but their manager felt good about them, they’re not going to be successful here,” Hyland says. “It’s just the data shows that. There are always exceptions, but if you’re ranking fair to poor (and) a manager wants to trump that and say, ‘I want them anyway,’ we have some good data that shows that doesn’t always work out.”
Focus on customer service
When Hyland hands you his business card, you’re actually receiving access — not simply a card. On that little card is not the general company phone number or an assistant’s extension but rather his direct office line as well as his cell phone number.
“Make sure there are no gatekeepers to the senior leadership — period,” Hyland says. “Don’t have a bunch of hoops to go through before you actually talk to the owners or the senior management in any department. That would be No. 1, so customers have to know that they’ve got a final backstop with the leadership of an organization.”
This is just the start of how Hyland Software focuses on customer service, the second critical factor to growing the organization.
“Senior leadership has to lead by example because if they’re not doing it, no one’s going to do it,” he says. “If they’re not customer-oriented, they’re not taking calls, they’re not getting in front of the fire and getting out on the front lines with customers who need help or need resolution on stuff and they’re trying to shirk all those responsibilities, it will not trickle down at all.”
Hyland says that customer service starts with making yourself available to your customers.
“Customer service has a lot to do with accessibility,” he says. “[It’s] making sure that you’re projecting to your customer base that we want to hear from you — it’s not you bought our product and good luck.”
That’s why Hyland and the other senior executives at the company make their phone numbers available for all of their customers, and that’s what he expects of all of his employees, as well.
“If you’re not willing to get on the phone and help customers with problems, you’re not going to last here,” he says. There’s no way for you to exist in this organization if you’re going to take this standoffish us versus them. To us, it’s about partnership. It’s about locking arms and dealing with issues. It’s about saying sorry when you make a mistake and moving on to a solution fast.”
To get everyone to adapt this mentality, Hyland says you have to focus on training your people in customer service.
“Don’t skimp on training for people, particularly when they start with a company,” he says. “Don’t just say, ‘Good luck.’ You have to give them context on where you are in the industry and what your corporate value system is and how you approach customers in general and what we care about as an organization and what our goals are this year and what are we focusing on. People armed with those parameters are better able to serve customers.”
You also have to continue talking to them about why customer service is so important long after they start.
“It means being proactive,” he says. “It means training your people and giving your people the power to make decisions that are pro-customer and they understand that this is who signs the paycheck and building that mentality over time.”
That understanding of who signs his employees’ paychecks is critical, and to reinforce it, he talks about new customers at every Monday-morning meeting with the company, where he reads the name of each new customer that has come on board in the previous week.
“It may sound corny — I could just say the number — ‘Hey, we got seven new customers last week,’ but I think it’s important for people to hear who these companies are that are signing our paychecks and for them to see the names written in front of them,’” Hyland says.
He also wants employees to get to know customers and understand them so customers come into Hyland and present their solution to employees, and it’s also recorded so people can watch it later. They talk about the decisions they make, why they buy Hyland’s product, what have been some of the positives they’ve gotten from it, what some of the pitfalls have been, what they would like to see in the product and what they would like to see from the company. It’s not mandatory for employees to attend or watch it later, but many of them do because they realize it’s important to hear from customers.
Another way Hyland focuses on its customers is by creating user communities where customers can come in and learn from each other.
“Sometimes people feel that’s dangerous and all the bad stories are going to get out, and yes, you’ll have some individuals that will take advantage of that, but more often than not, people are good, and they’re just trying to find answers and share best practices,” he says.
Between these avenues as well as simply working with customers every day, Hyland can see when trends are starting to develop that need addressed, but the word trend is important.
“You learn through experience and mistakes that getting crazy off a one-off experience doesn’t really help,” he says. “There’s usually two sides to every story. It’s really if you’re getting a consistent wave.”
He says there are certainly situations that you need to correct right away, but more often than not, if you’re seeing many customers telling you the same thing, that shows you it needs to be addressed.
“Feedback is coming from different avenues, and you’re getting a sense that this is a problem and we need to address it” he says. “I think knee-jerking to one particular issue, I’ll leave that to the government. I don’t think that’s really smart. You can certainly address the issue, but is it a trend if it happens once? No. That’s a mistake that a lot of people make, and they’ll get all fired up and start blaming and moving a bunch of things around, and you need multiple data points before you shift focus. … If you have multiple avenues of feedback from partners, from customers, from user groups, then you know you have something to address.”
As Hyland Software redid its large HR system, it was a huge project that touched everybody as they tried to consolidate other systems into it. It also forced managers to be more accountable on certain things, so there was a lot going on with it. Even though Hyland had talked about why they were doing the project multiple times, people were still getting upset.
“As you get further along in the project, people get angry about certain things and you have to reset everybody,” he says.
That’s where communication comes in, which is another critical element to the company’s growth. Hyland says he was naïve when he was younger in that he thought he could just go out and say what the company was doing and where it was going, and everyone would get it.
“You wonder why people wander off in a different direction — ‘Wait a minute! They’re not following me?’” he says. “It’s just getting the discipline down of talking about things fairly consistently and then creating avenue and mechanisms at the global level and departmental level that reinforce that vision or the values or whatever it is you’re trying to get across.”
So he’s become more disciplined in his communication approach. To start, he’s created a small group of several vice presidents and meets with them about once a quarter to ask them how he’s doing with his communication. He’ll ask where they think the company is on a certain issue, what they think he just communicated about it or what their team thinks about it. He’ll ask what is fuzzy about what he said or what didn’t link right with people.
“It’s been eye-opening for me,” he says. “I won’t let them talk and hear each other so they can’t mold their answers. I actually make them write them before we talk about them so I get the raw feedback before we get mob mentality.”
Doing this helps him see that he hasn’t projected the real reasons he’s doing something or what the purpose behind something was. Hyland says that when you get a group of intelligent people who know you and the business really well, they can really help shed light into your communication efforts.
“Creating that and being humble enough to take that is the key advice to just create a group of individuals who do that,” he says.
He’s also done this with employees and asked them a couple strategic questions to see if they really understand where the company is heading. Sometimes he sees that newer employees don’t get it but older employees do, and sometimes he sees that everyone gets it.
“If you’re willing to open yourself up to the feedback, people will talk,” he says. “It may take them a little time, but they will talk and they will say, ‘This doesn’t make sense.’ The advice I would give to any leader is open yourself up. Put the target on your shirt and just take it. It’s going to forge you as a better leader, period. If you think you know everything or you’re God’s gift to whatever, that’s great, but you’re not going to evolve as an individual, and you’re not going to be a stronger leader three years from now.”
In the case of the HR system, it was clear from the feedback that employees didn’t understand the point. Hyland recognized that it was creating different work for everyone, and change doesn’t make people happy, so he spent five minutes at the Monday-morning meeting talking about it. He explained why it was important, why they needed to do it from an employee-development and career-development perspective, how they didn’t have a consolidated system, why it was strategically important as a business, and how people are crucial and doing this keeps turnover rates low.
“Immediately, people said there was a massive upswing in involvement and energy behind it, and it just took five minutes for the leader to say, ‘OK, everybody, I know there’s pain, but get through it – there’s a light at the end of the tunnel. We’re not just doing this to put you through pain, but there’s actually something valuable here that we want to get to,’” he says. “Sometimes we need a little reminder.”
He says you don’t want to do this every single time you communicate to people, though, but rather when you get feedback that the simpler message isn’t getting through.
“If you do this every week, you drive people nuts — ‘Oh here he goes again,’” Hyland says. “But once every six or eight weeks — ‘OK, he’s actually thinking about things.’”
HOW TO REACH: Hyland Software, (440) 788-5000 or www.hyland.com
As CEOs, we enrich our community by running companies that provide jobs and pay taxes. As income earners, we pay our fair share of personal taxes that fund many community services, such as schools, libraries, parks and emergency services. But there is more that we can do. Every community has needs, and in every community, the needs are great.
It begins with you.
Many of us have sat on nonprofit boards and have lent our expertise to organizations with needs. We were involved in community service as adolescents through organizations like Boy Scouts and Girl Scouts or religious affiliations. As we were building our careers, we volunteered on committees or boards of trade organizations. That’s what leaders do, right?
Inspire others to follow
Said best by Tom Peters, “Leaders don’t create followers; they create more leaders.” So how do we inspire others in our organization to do their part?
I am personally inspired by what Charles and Debra Penzone have done. They infused their team at Charles Penzone Family of Salons to realize their gift of talented hands that make people feel beautiful and special. And with those hands, team members provide services to individuals who are going through cancer treatment. This is just one of many examples of how Charles Penzone uses its gifts to give back and help enrich the lives of those in need in our community.
The company’s employees not only volunteer their time, but they also provide a percentage of their sales from services to a variety of community causes.
Another inspiring organization for me is DesignGroup Inc. Second-generation leader Bob Vennemeyer shared his firm’s corporate giving philosophy during a casual chat. In the company’s 10th year, founding partners established a donor-advised fund with The Columbus Foundation. The company’s goal is to contribute every year to its local community foundation. As requests and community needs arise, DesignGroup requests grants from its foundation to 501(c)(3) public charitable organizations. Again, this is just one example of the many ways DesignGroup and its employees give back.
As CEO of Greencrest, I have followed in the footsteps of both these great companies. As you can imagine, nonprofits have no shortage of need for marketing, design and public relations services. With our gifted minds and artistic talents, we generously provide in-kind services to a number of special causes in our community. We try to be selective and provide a depth of services that will catapult a nonprofit to the next level. In 2007, we opened a donor-advised fund at The Columbus Foundation. The Greencrest Living Hope Foundation provides for individuals who may not have the opportunity to live life to their full potential without some assistance. In addition to these gifts, we also come together as a team to dip into our own pockets to provide a holiday hope box for the homeless, children or seniors.
Use your voice
You need to actively promote the difference that your organization makes in your community to your team. Let’s face it. We all want to be recognized for doing good. It is important to internally promote the difference your organization has made in the causes you have invested time and resources.
At Greencrest, it is important for employees to know that their efforts have made a difference, whether it is in the life of one person or the lives of many. The closer our employees can get to meeting or being around the people they have helped, the more inspired they become. It just solidifies the effort. It gives them joy, satisfaction and purpose.
For me, it is a philosophical belief that our role in life is to make a difference and leave the world a better place. I know that in stating this, I am in good company. The more we, as leaders, can promote the importance of corporate social responsibility, the more community needs can be met. And there is work to be done.
Kelly Borth is CEO and chief strategy officer for Greencrest, a 20-year old brand development and strategic marketing firm that turns market players into market leaders. Borth serves on several local advisory boards and is one of 30 certified brand strategists in the U.S. Reach her at 614-885-7921 or firstname.lastname@example.org, or for more information, go to www.greencrest.com.
Those Gen Y connections have come in handy at Ernst & Young LLP, where about half of the 1,100 employees in the Los Angeles operation are under the age of 30.
“You just have to really communicate with ways that are important to them,” says Browning, the Los Angeles County office managing partner. “We’ve got to keep in mind that this is a different generation than, obviously, what I grew up with. The way they communicate is different.”
Regardless of which generation he’s communicating with or how, Browning strives to make meaningful connections with employees so his message will resonate. That’s key for getting everyone on board with his “growth mandate” — which includes growing their people, growing their community, growing their alumni network of former employees and growing their clients.
Browning focuses on building relationships and staying in touch so communication is a constant part of the environment at the firm, which has grown its worldwide presence to 141,000 people and $21.3 billion in fiscal 2010 revenue.
“(Communication) happens in a number of ways,” Browning says. “But the hallmark of seeking that feedback is setting a very open tone for our people, making sure that they know their opinions are incredibly important to us and that we have an open-door policy. And then once we get the feedback, to try to do our very best to react to it and to constantly do whatever we can to make L.A. County with Ernst & Young a great place to work.”
Browning knows the most elaborately constructed messages fall flat if they’re isolated attempts to reach employees. It takes a very involved effort to communicate constantly with employees before you can expect a message to gain footing.
“You have to be visible. You have to be accessible,” he says. “I spend a lot of time doing that by one-on-one reaching out to our people.”
One of the ways he stays in touch is through an ongoing series of breakfast meetings called Straight Talk with Bill.
“First of all, it’s purely voluntary,” he says. “Whoever wants to come can come. It’s an open invitation to our people to meet with me periodically, and it’s absolutely an open agenda. No planned topics — it’s whatever is on their mind.”
He welcomes employees by experience level. Last month, for example, he conducted separate meetings for senior managers, managers, seniors and staff.
Typically, he starts with an update on what’s happening locally in the firm. Then he’ll pull from his international travels to offer observations of market conditions in London, the Middle East or Hong Kong. At this stage, he’s not necessarily delivering a corporate message but simply sharing his thoughts and opinions — which encourages employees to share theirs.
With unique audiences at each gathering, the discussions will vary, because you’ll share different thoughts with different groups.
“I tailor my comments based on the experience level of the people,” Browning says. “I’ll go into more detail with the staff on, for example, how the firm is organized. I might go into more detail with them about our different service lines, whereas [with] the senior managers, I don’t need to do that.”
Browning usually only takes the stage for a few minutes before turning it over to employees. But to be able to get their questions, suggestions and other feedback, he must be able to relate. That’s where it helps him to think about his teenage kids and the differences in communication styles.
“What (employees) are interested in is different, and we need to keep that in mind,” he says. “I’m always asking them what is important in their life, both personally and professionally. What kind of experiences do they seek with the firm and then are getting with the firm? Are they getting the best type of support they need from the firm to succeed?”
The feedback won’t always relate directly to a business initiative, but that doesn’t mean it’s any less relevant. At the most recent breakfast, for example, someone asked about the firm’s recycling policies. That spurred some green suggestions to enhance the company’s efforts.
“That’s the kind of thing that comes up that really doesn’t relate, per se, to our business, but it is very important to our people,” Browning says.
By simply asking employees what’s on their minds — rather than commandeering the stage with your agenda — you show them you’re interested in hearing what they have to say.
Open forums like Straight Talk are great because they put the ball in the employees’ court. But because they’re purely voluntary, you may skip over shy employees who don’t step out with their feedback. You need other avenues.
“One way that we make sure that our people are heard is through the mentoring relationships,” Browning says. “The mentor is trying to make sure they always are seeking feedback from our people and reacting on it to make sure each person’s goals are met.”
Mentoring programs also tackle another communication obstacle: the fact that the CEO can’t be the sole connector and develop personal relationships with all employees, especially in large organizations.
“It’s not just about me; it’s about all of us being visible to our people,” says Browning, who has six mentees. “I try to be accessible to all thousand of our people, but it’s really about all of our leadership team doing that and forming those key connections with our people daily.”
Browning tries to make sure no one is overlooked by approaching mentoring from several angles. First, the firm formally assigns mentors by matching up employees in similar work areas. They may be paired with members of the senior leadership team or, as of March 2010, with alumni — former E&Y partners and employees who can add value from outside business settings — as well.
But there are also pre-existing personal relationships between employees, where mentors may seek certain mentees or vice versa. These informal matchups will happen with or without a formal program.
“There are a lot of informal mentoring relationships that happen and those, quite frankly, are often the most effective,” Browning says.
Because relationships form and develop differently, it takes flexibility and follow-up to make sure they’re equally valuable.
“It’s a constant process of reaching out to both the mentors as well as the mentees, seeking feedback that those connections are being helpful, asking our employees if other connections are needed,” Browning says. “If a match isn’t working, we’ll change.”
Whether the relationships start as formal assignments or informal friendships, ideally they should all trend toward the latter as they develop.
“There is a formal program, but it really gets down to the mentor and the mentee making it happen and staying in touch with each other and tailoring that mentoring relationship so it works for each person in that relationship. If you look at a mentoring relationship, it starts out as first becoming friends and establishing a personal relationship and then really trying to discover what the mentee’s personal and professional objectives and goals are. This is where the personal and professional often intersect because they are intricately entwined.”
A good mentor knows when to probe and when to draw the line. Respect your mentee’s privacy and be sensitive to personal issues, obviously, but personal matters do play a part so don’t overlook them entirely.
“An effective mentoring relationship only comes when you really get to know someone,” Browning says. “The root element of a mentor relationship is a friendship. And when you develop that friendship with the mentee, then that really sets the stage for having an effective relationship.”
The basic questions behind a mentoring relationship center around: “What do you want to accomplish in life? What do you want to accomplish at this company? Where do you want to be in five years?”
“That then breeds a lot of different discussions in terms of job assignments, in terms of training opportunities, in terms of: Do they want to be involved in the community activities we’re doing? Do they want to be involved in marketplace activities?” Browning says. “The overall goal of a mentoring relationship is we want that mentee to be the very best they can be, both professionally and personally. Mentors are trying to make sure the mentee really thinks about what their objectives are professionally and personally, and the mentor is a real advocate to them to try to accomplish those goals.”
Mentors may meet mentees over lunch, a baseball game or during the day in the office to set action steps for meeting goals. The key is that there are constant touch points.
“It only happens through that close day-to-day contact with our people,” Browning says. “You can’t do it from afar. … You (have to) have day-to-day contact with people so you really understand what’s important to them and what they want to focus on.”
Now that you’ve reached out to employees through open forums and mentoring relationships, your messages stand a better chance at gaining traction. But you still need effective communication. You can’t expect people to just listen to you because you’re in charge.
“Effective communication doesn’t necessarily flow from your position or your title,” Browning says. “Leadership comes from the level of impact and influence you have on people. It’s not about my position as the managing partner; it’s really about the amount of influence I have on our people.”
Of course, some of that influence will come from the reputation you build through relationship-building; employees will see you care about their ideas and success when you ask for their input and help them set personal goals. But you build upon that influence by delivering compelling messages with clarity.
“I find that the younger generation prefers concise communication in a mechanism that’s readily accessible to them when they want it,” Browning says. “So therefore I try to be brief. I try to be to the point. … When I try to craft messages, whether they’re by voice mail or by text message or by e-mail, I always try to put myself in the shoes of the recipient and think: What’s in it for them? What do I want them to know? Am I asking them to take action? Am I just communicating information?
“I don’t try to give them corporate speak. If I’m seeking action, I make clear what the actions are that I’m seeking. If I’m communicating information that I think is important to them, I tell them what I think is important to them, and I stress that in very simple terms.”
Beyond that, effective communication depends on how the message is received. Browning sometimes uses Straight Talk meetings to ask how employees perceive his messages.
“Often what I’m asking is, ‘Do they understand the direction that we’re trying to go, do they understand what our growth mandate is here in L.A.,?’ and then really seeking feedback about what are we doing right, what can we improve,” he says.
The communication loop should be constant, whether you’re meeting with mentees regularly or just stopping employees in the hall to chat. Don’t wait to observe results through the actions people end up taking — make sure they’re on board before it’s too late.
“You just have to be as involved as you can with your people and as close as you can to your people to understand: What are they receiving? What are they hearing? What’s motivating them?” Browning says. “It’s just listening, facing feedback, trying to discern what people have heard.”
If you’re taking the time to assess how people understood your message, you should also have the willingness to adjust if their perceptions don’t match your intentions.
“The two main things that I try to tell myself often are: Be adaptable, be flexible,” Browning says. “If something’s not working, if I’m not achieving the desired result that I’m seeking from people or from our organization, I tell myself to focus on what I’m communicating because the problem may be in me, not the person that’s receiving or listening to my communication.”
How to reach: Ernst & Young LLP, (213) 977-3200 or www.ey.com
The Browning File
Born: Dallas. As a small child, I moved to Chicago. I grew up in Chicago, and I consider it to be my boyhood home.
Education: Bachelor’s in business administration from the University of Oklahoma
What was your first job, and what did you learn from it?
I had a variety of jobs as a high school student, but my very first job was working for a pharmacy chain in the Chicago area by the name of Walgreens. I learned, first of all, it’s very hard work. It was great encouragement to continue my education and to get a degree and to really seek a career as opposed to just a job.
What’s the best business advice you’ve ever received?
About 15 years ago, I was going through some difficult situations with a client and another client told me that once your career is over, you can take two things with you and only two things. Those two things are your reputation and your integrity. When I’ve been really challenged, I always come back to the advice that he gave me.
Your workday is off to a bad start. How do you turn it around?
I’m a morning person so my day typically doesn’t get off to a bad start. But if a day isn’t going like I want it to go, I simply get up from my desk, walk around and try to talk to people. I always find just talking to our people or the clients’ personnel typically gets me out of a bad frame of mind because I start really focusing on how I can improve their day — and in doing so, I typically improve my day.
If you could have any superpower, what would it be?
When I look around, I’m always depressed by the amount of suffering that’s going on, the amount of poverty, the amount of homelessness, the amount of abuse. If I could wave a magic wand and have a superpower, I would immediately take away all that suffering.
If you could have dinner with anyone, from any time, who would it be and why?
I see very few people that I can think of in recent memory that had as much impact on so many people as Coach John Wooden did. The legacy he left of living honestly, hard work and striving to be the best you can be was just amazing. I would love to meet him and have dinner with him and just listen to all of his experiences and all of his advice. He was really a remarkable man.
The benefits of giving back
Whether it’s a holiday party, a community volunteering program or a local sporting event, out-of-the-office activities give Bill Browning a chance to interact with his 1,100 employees at a whole other level. Not only does he get to know his Ernst & Young staff and partners more personally, but the experiences also double — or, actually, quadruple — as teaming activities, training opportunities, community involvement and a way of branding the firm locally.
“Community activities are a great way to participate in a team environment,” says Browning, the Los Angeles County office managing partner. “We’re focused on each individual succeeding as an individual, but doing so in a very team environment.”
On Dec. 3, for example, Browning shut down Ernst & Young’s L.A. County offices so his employees – more than 500 of them – could spend the day participating in community activities through an EY Connect Day. Employees volunteered with 18 local organizations from Habitat for Humanity to the Los Angeles Zoo to Heal the Bay, a beach cleanup organization. All in all, employees donated about 2,600 volunteer hours that day.
Across Ernst & Young’s west region last fall, nearly 1,700 employees participated in EY Connect Days, totaling about 6,700 volunteer hours.
Most companies sport a similarly impressive list of philanthropic efforts, but for community service to reap the benefits it does at Ernst & Young, put some thought into what you’re doing and why.
Browning’s two-fold goals for community activities are pretty basic – that they make a difference at the organization he works with and that they make a difference with the Ernst & Young employees who are involved. As a third goal — which is really more of natural byproduct than a result to drive toward — Browning wants the overall company to benefit from community commitment.
To keep community service aligned with that end goal, Browning organizes activities according to the three E’s.
“The first E is education,” he says. “So we focus on activities where we really can educate and mentor people in the community. The second E is environment; we focus a lot on community activities and organizations that are focused on environmental sustainability. And the third is entrepreneurship, supporting organizations that that build entrepreneurship in our community, and a lot of that is done by encouraging young people to get involved in business.”
By devoting office hours to the community, Browning keeps the organization focused on one of its four core goals — community — and demonstrates that what you do at work ties into the broader community even if you’re not strictly volunteering your accounting skills.
“By being involved in those organizations, we will really build a sense of involvement and we will build skills in our people,” he says. “And then through their efforts, my hope is that Ernst &Young will achieve a brand in the marketplace that we really are giving to the community. It’s just a result, but that’s not the focus. The focus is really on the city and the community and for the people that will benefit because of our involvement. If Ernst & Young achieves some branding and some goodwill because of it, so be it, but that’s just a natural result.”
How to reach: Ernst & Young LLP, (213) 977-3200 or www.ey.com