When Chuck Wade worked as a narcotics officer, he seized more than $25,000 in drugs 11 times, and every operation didn’t start with shady people in sketchy alleys — they began undercover in a company, where he would, inevitably, end up arresting the No. 1 drug dealer in that business.
“I saw firsthand the problems (drugs) were causing with productivity and absenteeism and tardiness and leaving the worksite without permission, and it was truly destroying a company from within,” says Wade, president and CEO of The Council on Alcohol and Drugs Inc. and state director for Drugs Don’t Work in Georgia. “Quite often, upper-level management wasn’t even aware it was happening until it was too late and the company was suffering and they were bleeding red ink, and they began to realize there was a problem there.”
But often, management wasn’t aware that drugs were the issue, which is why creating a certified drug-free workplace can help prevent problems from even forming. On top of reducing problems, there’s a financial incentive, as well. Twelve states in the country, including Georgia, have a state-mandated discount on workers’ compensation insurance for certain state-certified drug-free workplaces. The discounts range, but Georgia has the highest with a 7.5 percent discount, which means savings of a few hundred dollars a year if you’re a smaller business, all the way up to as much as $100,000 for some large companies.
If these numbers have caught your attention, then the first step to becoming a certified drug-free workplace is to put a substance-abuse policy in place.
“If a company does not have a substance-abuse policy in place, then the company has put themselves in a precarious legal position,” Wade says. … “Every company, regardless of size, needs to have a substance-abuse policy.”
If you don’t have anything in place, the simplest way to get started is to contact Wade, who can e-mail you a fill-in-the-blank policy that was created by the organization’s attorney, who has more than 25 years of labor law experience and specialized in workplace law.
“He wrote the law on drug-free workplace here in Georgia, and he wrote the law on substance-abuse policy,” Wade says. “It’s the most legally sound substance-abuse policy a company can have.”
The policy is written in a way that it can be customized to any size business, and it’s absolutely free.
Once you have a policy in place, then the second step is to do drug testing. On average, a drug test costs $25 if it’s processed externally.
“All companies need to be doing drug testing, primarily because they don’t want to inadvertently hire a drug user,” Wade says. “One drug-using employee can single-handedly destroy a company from within, and I’ve seen that happen many times.”
In addition to applicant drug testing, participants are required to do post-accident testing. Not only does it increase safety in the workplace, but it protects the employer. For example, Georgia law states that if an employee tests positive for drugs within eight hours of an accident or for alcohol within four hours, the employee will not win a workers’ comp claim against the company. On average, it costs about $75,000 to treat a back injury, so if one of your employees gets hurt, and your insurance provider has to pay that much, your rates will go up.
“There are companies that have gone out of business for one reason and one reason only, and that’s because their workers’ comp rates got so high because there were so many claims filed against them they couldn’t afford workers’ comp insurance anymore, and they were forced out of business,” Wade says.
In addition to these two types of testing, participants are required to do reasonable suspicion testing and post-treatment/rehabilitation testing.
After testing, the third step to becoming a certified drug-free workplace is drug education. This is critical because Wade says 77 percent of drug users are employed, so education in the workplace is the most effective way to reduce demand.
Education can be through guest speakers, DVDs or newsletters. Most companies opt for the newsletter option, which costs $150 a year, as it doesn’t require employees losing productivity to sit through a speaker or DVD. Newsletters are often more effective than the other options, because employees can refer back to them and share the information with family, too. Additionally, Wade says research shows that employees will retain only 9 percent of the information they hear in a presentation.
The fourth step is supervisor training, which can also be done through the same three ways as employee education. The supervisor newsletters cost a company $110 a year, and the training helps teach supervisors to recognize warning signs of drug use.
Then the last step is to provide either an employee assistance program or a list of treatment counseling centers to give employees if they test positive, so they know where to get help.
Overall, it costs $35 a year to apply for certification, which goes to the state. Other than that, the only costs are for the newsletters and drug testing, but given the payoffs that creating a drug-free workplace can provide, it’s cost-efficient.
“For more than 20 years now, all the Fortune 500 companies have been drug-free workplaces — not because of the workers’ comp discount,” Wade says. “The reasons these big boys and girls have done this — and this is one of the reasons they became the big boys and girls to begin with — is because they do the right things right. And they know with a drug-free workplace, you increase productivity, reduce your absenteeism and your tardiness, cut workers’ comp claims in half, reduce medical costs by up to 300 percent, increase overall workplace morale, cut turnover rate, reduce death and crime in the workplace, and all of that positive affects the bottom line.”
How to reach: The Council on Alcohol and Drugs Inc., (404) 223-2480 or www.livedrugfree.org
The old cliché says steering a large organization is like steering a ship. But steering an ocean liner on the open water might actually be a simpler task than what Laurence Merlis needs to accomplish.
As the president and CEO of Abington Health, Merlis is charged with steering a medical system comprised of 6,000 employees spread across two hospitals, two major outpatient campuses and 57 physician sites.
Merlis has to promote and enforce a uniform set of standards and values for everyone, regardless of where they work in the Abington system. To do it, he needs a vision, and he needs the vision to be clearly defined and communicated to managers and employees who understand their role and how it helps the system accomplish its overarching goals.
“Everybody has a part to play, leaning forward and recognizing day in and day out that we can move toward our vision if we’re clearly aligned,” Merlis says. “We need to recognize that there is a connection between the parts people play in their daily tasks and the work we do to ensure the very best outcome for patient safety and service, while at the same time ensuring that we are efficient and effective.”
Merlis wants everyone at Abington to visualize what the medical system can be when it realizes its full potential. In the highly competitive Philadelphia market, in which patients have numerous options when seeking medical care, Merlis wants Abington to be the go-to system for area residents, known for high standards regarding service, technology and safety.
Visualizing that outcome starts with Merlis, and must cascade down from there. That’s where a great deal of the work occurs. Merlis realizes that he needs to be a visionary, but even more than that, he needs to be a unifier.
“You do need to be able to visualize the concept of what you can be as an organization,” he says. “You start really thinking about tomorrow and how has to be inspiring for everyone. But it has to be understandable, we have to stretch for it, and we have to make sure that the messages are crisp and simple and something that becomes compelling in terms of what our purpose is and how we can rally support to achieve that vision.”
Start with leadership
Two of the most critical things a leader can do when formulating and promoting a vision is to listen and measure. It’s something that Merlis has made a top priority at Abington. He wants his leadership team to get input on the future direction of the organization from all involved stakeholders — the board of directors, physicians, medical staff, office staff and support staff. Then, once the vision and strategy are formed, he manages by what he can measure and communicates that data back to employees to facilitate an ongoing dialogue.
“You need to make sure that you can measure and manage work, and that you are not setting strategy or policy by anecdote, but that you are setting it by fact,” Merlis says. “You need to be sure that you are measuring yourself by what you said you would do.”
When a strategic initiative is set, Merlis and his leadership team keep tabs on metrics within that initiative, and disclose the results to the employee population. He wants to keep the entire work force engaged in the process and also empower employees to hold management accountable for their leadership decisions.
“We have metrics within each of our major strategic intents,” he says. “We share that in an effort to stay as transparent as possible. Since one of our core values here is patient safety, we’re very public with where we are day to day against what we call ‘serious safety events,’ because that is a critical metric for us. We have other patient safety initiatives around the effort to reduce infections. It might be something as simple as the number of our staff who received a flu vaccine.”
Merlis wants the staff involved in measuring progress against the vision because they are the people at ground level each day. They have a front and center seat for what is going on in the facility corridors, and can offer real-time advice on improvements that can be made.
“Our philosophy here is the staff are experts in how to get things done,” Merlis says. “We look to them for advice and recommendations on how to make things better when it comes to making ourselves a place for patients to receive care. We need to constantly look at all of our processes, work on them and continually find ways to make them work better. It all gets back to execution. You need to get the results needed to achieve your vision. You can’t confuse effort with results.”
Stay on message
Rolling out a vision is great. Receiving input from your staff on the vision is even better. But what about after the initial push is over? You need to keep the momentum going and keep your people interested in continuing to achieve the goals you originally set.
At Abington, Merlis has learned that keeping a vision fresh within a large organization takes a combination of front-and-center communication and subtle reminders in the day-to-day details.
The details can be as small as a pocket-sized card.
“We have what we call an ‘E3’ card, which stands for ‘engaging every employee,’” Merlis says. “Every employee has a card, and on that card are the three things they can do to help us move our mission and vision forward.”
The more direct reinforcement comes in the form of, among other things, patient feedback. Like many health systems, Abington uses the stories of successful patient treatment to inspire, and any negative patient feedback is analyzed for ways to improve policies and processes.
Regardless of who is receiving the message, Merlis and his leadership team don’t do a great deal of tailoring the message to a given audience. Whether the message is meant for physicians, nurses or food prep staff in the kitchen, everyone receives it in similar fashion. Though some large organizations believe in crafting the message to meet the needs of a certain audience, Merlis says it’s more important to keep everyone on the same page and eliminate any chance of a message getting muddled or completely lost in translation.
“We don’t shape the message,” he says. “We share with everybody what the issue is, what the strategy is, what the goals are moving forward. We want to make sure that we clearly articulate the behaviors we want, the behaviors we need to exhibit, so that it can resonate with every single person and show them the part they do have within the system. The size of our organization, with 6,000 people and multiple facilities, is why we need consistency. It creates different challenges in terms of making people feel connected.”
Build your team
With a well-defined vision comes the need to continually look for people who can help promote the vision at all levels of the organization. At Abington, much of the interview process for many positions focuses on whether a job candidate has the competencies needed to support the system’s mission and goals.
Merlis calls it “behavioral-based interviewing.” He says the essential skills needed for a job are going to be present on a resume, or they aren’t. The technical requirements are a mere means to getting in the door for an interview. Once in the door, it’s up to Merlis and his team, as well as the interviewee, to figure out whether there is a cultural match.
“What we’re looking for are people whose behaviors will exhibit and support our values,” Merlis says. “To get to that stage, we’re already looking for people who have the right skills and competencies. The skills are the hurdle to get into the interview. The knowledge and the background, their experience, those are all things you can pick up in their CV and references. But you really want to be interviewing for the level past that. You want to know if they can be the right fit based on those leadership competencies and behaviors, what you know you need to have in order for a person in that position to be successful.”
The way to drill down and find the best possible match is to ask specific questions in the interview process. Merlis says you want examples of ways in which the job candidate has exhibited the cultural qualities you want in an employee.
“You’re asking specific questions to elicit examples of where their behavior and prior experiences support the values that you think you need for this particular position in the organization,” he says. “It’s a given set of competencies for each position. But you’re always looking for people who can manage a vision and a purpose, people who manage ethically in terms of honesty and integrity, people who manage by engaging their staff. You want people who have great interpersonal skills and are focused on results.”
And once you’ve found the right match for the position, you need to let the person do his or her job. As long as the employee is doing it well, you should be able to trust that he or she is on the same page with regard to the vision, will live it and help promote it.
“When I got here back in 2009, we already had a team that was excellent,” Merlis says. “If you have that, you want to give people the freedom to do their jobs. You want somebody who recognizes that they’re going to be a part of a team. We define success as the success of the team. And you want people to be self-aware so they learn.”
Ultimately, you are defining the roles and the rules of engagement. Beyond that, you want to see your best and brightest show their stuff, which means letting them do their jobs and promote the vision, mission and values in a way that plays to their strengths.
“Everyone has to be committed to the goals of the team,” Merlis says. “You have to have the right mix of skills, and you really have to have a sense of holding each other responsible. We want the team to understand, based on the project or issue, who is responsible, who is accountable and who they need to contact for support.
“Another big key is continuing to create a safe environment, meaning an environment where people feel safe to raise issues and follow up. You’re going to need to have crucial conversations or confrontations at some point, but you promote the culture by doing that in a positive and respectful way. You want your people to be able to handle conflict yet move on, a team that has a sense of spirit and can support each other.”
How to reach: Abington Health, (215) 481-2000 or www.amh.org
The Merlis file
Born: Bay Shore, N.Y.
Education: Bachelor’s degree in biology and psychology, Union College, Schenectady, N.Y.; MBA, George Washington University
First job: I taught waterskiing for a summer after my freshman year in college.
What is the best business lesson you’ve learned?
What is critical for anyone to be successful is to not act outside yourself. Be true to who you are. Be genuine and sincere.
What traits or skills are essential for a business leader?
First and foremost, ethical behavior. You absolutely must lead with honesty and integrity. You need to be approachable. You need to be willing to lead and make difficult decisions and be self-aware of what you can do better. Just constantly look to improve.
What is your definition of success?
Success could be defined as making sure you make a positive difference in the lives of others, while achieving goals to bring the organization closer to its vision. You want people to be moving forward with you and, ultimately, leave the organization in a better position than when you first arrived.
Mike O’Neill does not consider himself to be a micromanager. But when he sees people at Switch: Liberate Your Brand, who are, it doesn’t make him uncomfortable.
“Micromanagers are great if you can line that skill set up with a need that you have in your organization,” says O’Neill, partner and CEO at the 100-employee experiential marketing agency. “In our organization, the people who tend to be more micromanaging among us tend to end up in the execution side of our organization and at the project level, not at the management level. It doesn’t work.”
The lesson here is that you need to give people a chance to succeed and find their sweet spot in your organization. Sometimes the person you have at your disposal just needs to find the right place to apply their talents.
“There are people that are in this organization who are very good, but they are the kinds of people who just seem to be wired where they have to have their hands in everything,” O’Neill says.
“How we’ve handled that is that person manages the project managers because the project manager has to keep track of a tremendous amount of detail and be very organized and really does have to be involved in all aspects of a project. The trick is to line those folks up with a position in the company where that’s a plus and not a negative.”
Get more people involved in personnel decisions such as making hires and awarding promotions to help discover where a person’s talents can best be put to use.
“Anytime we’re hiring someone or considering a significant promotion where we are going to put them in a leadership position, we tend to have them talk to a lot of people,” O’Neill says. “We’re interviewing right now for someone in business development. I’ll guess and say that person has probably met with eight different people from Switch.”
Whether it’s you that is doing the hiring or promoting, or someone else in your company, that second or third opinion can be crucial to putting a person in the right spot.
“I’ve hired people that I was convinced when I hired them, ‘Oh my God, this guy or this girl is just going to be a rock star,’” O’Neill says. “And it turns out they weren’t. And then I’ve settled for people that turned out to be great. You have to recognize it’s sort of a ‘one plus one has to equal three’ situation. The one dynamic that you don’t know is what they are going to be like working here. They worked some place else, they did a great job and they have a great track record. But every organization is just a little bit different.”
If you bring someone in and it’s clear they aren’t working in their present position, and can’t really seem to find another position that fits them, you need to move them right back out.
“You demonstrate to people that you’re serious about it,” O’Neill says.
But before you take that drastic step, make sure you’ve given that person an honest chance to succeed. If your decision is based less on performance and more on a personality conflict between you and the individual, it could lead to problems down the road.
“You have to manage the personal chemistry part of it and the needs of the business and find the balance between the two,” O’Neill says. “If I’m here picking on someone I don’t like and making it personal and never taking them seriously because for some reason, I don’t like them, people are going to look at that and go, ‘Oh, well, that’s our culture here. You’re either in the in crowd or you’re not.’”
How to reach: Switch: Liberate Your Brand, (314) 206-7700 or www.liberateyourbrand.com
Think before you speak
Mike O’Neill likes to tell a story about Winston Churchill and a long speech the famous British politician once delivered.
“His handlers came up to him afterward and said, ‘Boy, that was a really long speech,’” says O’Neill, partner and CEO at Switch: Liberate Your Brand. “And he said, ‘Yeah, I’m sorry I didn’t have enough time to prepare a short one.’ He meant it takes time to really focus things down and make those choices about what’s most important to talk about.”
When you’re looking to get your people engaged in some aspect of your business, you need to think before you speak.
“You have to be selective,” says the leader of the 100-employee experiential marketing agency. “You can’t have 10 priorities. If you have 10 priorities, you have no priorities. We try to really hone stuff down and say, ‘Here’s what we really want you to know and remember.’ We usually do that at the beginning of the year and then we get together at least once a quarter to update people on how the year is going.”
Pick things you want to focus on and then keep people informed about what’s happening in those areas.
“You’ve got to be really explicit about your objectives,” O’Neill says. “It’s getting everybody in the company feeling like they are working for the same company and going in the same direction.”
When local airports canceled flights to Portland during a horrible snowstorm, many travelers were left stranded in Seattle hotels on Christmas Eve. One of the hotel’s guests hadn’t celebrated Christmas Day with family in three years and thought he would be missing the holiday once again.
Instead, the hotel’s bellman, an employee of Kimpton Hotel & Restaurant Group LLC, offered to brave the eight-hour trip through the snow to drive the guest home to Portland in time to spend Christmas with his family.
Niki Leondakis, Kimpton’s president and COO, says that what differentiates her company from competitors is the fact that employees are always striving to create meaningful customer experiences, or “Kimpton moments,” by going the extra mile to take care of guests and show them random acts of kindness. In the Market Metrix Hospitality Index, Kimpton consistently achieves the highest scores in customer satisfaction and emotional attachment of any U.S. hotel company. This commitment to customers played a key role in the company’s strategy for dealing with the impact of the worldwide economic recession.
When your business is facing financial or economical challenges, you have to reinvest in the areas that set you apart from competitors and that make your business successful. For Kimpton, this meant reinvesting in the people who make Kimpton moments possible every day — the front-line employees at its hotels and restaurants.
Prepare for change
Easing employee fears at the start of the recession was a primary concern for Leondakis. Stressed out employees typically don’t deliver top service. Many people were fearful about the future of the company, seeing friends and family lose jobs and hearing about mass layoffs at high-profile companies. They were under a great deal of personal and professional stress that was directly related to the economy. Leondakis realized employees needed help managing this added stress if they were to overcome the new challenges placed on them.
The first step was to provide them with tools and information to better manage this stress, such as situational leadership training, stress management and self-care classes for employees to address their pain points. Easing their worries also meant keeping their spirits up, which can be as simple as cheering an employee up with a funny joke to take off some of the pressure.
“We went out of our way to create a spirit of fun and laughter and not take ourselves too seriously,” Leondakis says. “While we spent an appropriate amount of time dealing with brass tacks and business needs at hand, we also balanced that with some fun and making them laugh and just being silly. I think that combination helped keep people inspired, because at the end of the day, it’s got to be fun to come to work every day or you aren’t very engaged or motivated. We worked extra hard in the last two years to make sure we were providing our people with stress release.”
Keeping the emphasis on the vision and goals of your company is another way to motivate employees to stay committed to its long-term success. In the wake of any kind of major change, uncertainty and fear can distract people from their goals. Therefore, you want to reinforce the goals that are most important in carrying out your vision.
“I think one of the mistakes companies make is changing the focus for their employees too often,” Leondakis says. “Another mistake is having too many goals for employees to focus on. That’s why we’ve narrowed our focus to one wildly important goal, so that 6,500 employees in the organization know which way is north, what’s most important and, at any given moment, what is their highest priority.”
In Kimpton’s case, simply increasing the focus on its No. 1 goal, customer satisfaction, was much more beneficial than increasing the number of goals for employees.
“We increased the focus,” Leondakis says. “We talked about it a lot more. We got very granular with metrics around our customer satisfaction scores and set very specific targets for continuous improvement, specifically in the areas that don’t require financial investment.
“Being friendlier or more helpful doesn’t cost any more money. Focusing our people on what they can control — them and their employees and their attitudes and the way they take care of our guests — made people feel empowered in a situation like this great recession, where there’s a tendency to feel out of control. People felt like they did have control over certain things, and that was our customer experience.”
Giving employees more focused goals eases their stresses by creating more certainty about their role in the company and how to handle the changes that affect your business. In having this control and accountability, they then have more opportunities to be proactive and to act on change rather than react.
In times of crisis, the reaction of some business leaders is to stay out of the spotlight and avoid confrontation by hiding from tough questions. However, when the head of a company is not visible and unwilling to address organizational challenges, it can leave employees fearful of the worst, which, in turn, can hurt your service level.
Leondakis says that though you can manage your company from the corporate headquarters, you cannot lead from one, especially when your business is facing potentially difficult times.
“People don’t know what’s going to happen,” she says. “They read the headlines. They read that thousands of people lost their jobs during this recession. They read about businesses closing. They want to know what’s happening with our business. Being able to answer that firsthand is incredibly valuable.”
If you want to keep employees motivated and united in your vision, you have to open up communication and show them that you are not abandoning them to ambiguity. When Kimpton started feeling the impact of the financial crisis in 2008, Leondakis knew that her presence at the company’s businesses was even more essential. In the past few years, she has spent more time traveling to Kimpton’s hotels and restaurants than ever before.
“Part of my strategy for dealing with the recession was to be more visible, to be more hands on,” Leondakis says. “I’ve always been pretty visible and out there, but I just felt that now, more than ever, people need to know we’re in this together, and we will get through it together. If you have problems or barriers, I want to be there to help you.”
Increasing your face-to-face communication and personal interactions with employees also increases organizational transparency, which is an important part of building trust between employees on the front lines and the corporate side of the business.
“It’s modeling the behavior, and if I do that, then my direct reports do the same thing, and then it trickles through the entire organization,” Leondakis says.
Whether it’s holding formal presentations or conducting fireside chats with employees in a relaxed setting, Leondakis has increased opportunities for direct communication with employees. By doing so, she’s given them more opportunities to share their ideas, goals and barriers, and ultimately, ways to add value to Kimpton businesses.
“When I travel, I do fireside chats with employees and ask them, ‘If you owned this hotel or this restaurant, what you would do differently to better serve our guests and to make it a better place to work for all of the employees?’” Leondakis says.
“When people see you being honest and genuine and authentic, they begin to trust you, and they will talk to you and tell you what’s happening.”
Being responsive to employee insights and feedback is incredibly valuable because it can give you ideas to improve your business that you may never have considered.
“We take that feedback very seriously and we share it with our senior leaders; we share it at our operations meetings, and we actually put action plans to that feedback to implement,” Leondakis says. “As a result, some of the best ideas, some of the most iconic ideas at Kimpton have come from our employees.”
One example is Kimpton’s well-known goldfish program, where its hotels deliver live goldfish to the hotel rooms to keep guests company while they are traveling. The idea started with one employee at one hotel but was developed into a brand program.
Reinforce your values
Because what separates the Kimpton brand from its competitors is its customer experience and the emotional connection the company’s guests have with its employees, reinforcing operational excellence has always been a key part of the company’s business strategy.
“We could, like a lot of other hotel companies, compete on geographic distribution, but that would require significantly more hotels and much more markets than we have today. It would take a long time, just to compete on, ‘We have a hotel in every primary, secondary and tertiary market in America,’” Leondakis says. “Rather than compete on, ‘We have a hotel where you go,’ we’re competing on operational excellence as a point of differentiation. And that operational excellence is really defined as the way every Kimpton employee interacts with every Kimpton guest, creating an emotional connection. We create a loyal following that way.”
In lean times or times of growth, achieving operational excellence always begins with the hiring process and always bringing on people whose values and personality align with your company’s core values. These are the employees who will strive hardest to carry out your vision, because they truly care about its success.
“To see how a potential employee might treat another potential employee is a very good indicator of how they would treat a guest; it’s just how they react and respond to other human beings,” Leondakis says.
“I’ve never believed in the idea that, ‘OK, we’re on stage, everybody get on stage.’ You hire genuinely kind people and you inspire them to be themselves and be their best selves. I’ve never supported the idea of, ‘OK it’s 5 o’clock. The shift’s starting. Doors are open. Everybody put your smiles on.’ It’s a more authentic and genuine approach hiring people who are genuinely caring people, not people who are great actors.”
She says you can always train employees to execute job processes and set targets for continuous improvement, but you can’t train them to have self-initiative, like the bellman that drove the Kimpton guests through the snowstorm or the Kimpton employee who stayed up until 1 a.m. to help a guest deep condition her hair after she burned it with a blow-dryer.
By hiring employees who are committed to Kimpton’s core values, then providing them with stress release, a clear vision, priorities and increased communication, the company has helped employees continue to achieve success and create Kimpton moments for guests every day.
“It’s an opportunity to pay it forward,” Leondakis says. “We believe in treating our employees as though they are guests. The idea is, if we treat our employees as individuals and we take care of them in a personal way, in an individual way, and see them as our customer, they will go the extra mile to take care of our paying guests.”
HOW TO REACH: Kimpton Hotel & Restaurant Group LLC, (800) 546-7866 or www.kimptonhotels.com
The Leondakis File
President and COO
Kimpton Hotel & Restaurant Group LLC
Born: Springfield, Mass.
Education: University of Massachusetts, Amherst, Mass.
What was your first job?
Working the fry station at a Hardee’s when I was 15
What do you think are the keys to building a successful culture for employees?
It has to be unanimous. Every individual at every level has to be committed to this culture and has to be in agreement about what the tenets of the culture are and how they are brought alive. Every individual has to see themselves as an ambassador of that culture. It cannot be viewed as human resources job.
Tom Swidarski may not be a secret service agent, a bouncer at a night club or a front desk manager at a high-profile office building, but as president and CEO of Diebold Inc., his job’s focus is similar to all three — security.
On one hand, Swidarski’s job is to supply security solutions for his customers, which include financial institutions, government operations and commercial businesses across 600 worldwide locations. However, in addition to handling security for customers, Swidarski is also responsible for ensuring the security of Diebold’s 150-year-old legacy, a part of his job that presents its very own set of challenges.
When Swidarski became president of Diebold in 2005, he was tasked with the weighty challenge of eliminating $100 million of cost out of the company over three years — a program dubbed the “SmartBusiness 100.”
“We weren’t sure exactly how we were going to do that,” he says. “But we said, ‘Hey, Charles Diebold probably had ‘SmartBusiness 1.’ He got the first dollar out. It’s our job to get the $100 million.’”
Building a profitable business is a matter of controlling costs as much as it is generating revenue, and amid the global economic slump, Diebold’s SmartBusiness cost-savings initiatives have been a key part of increasing Diebold’s profitability and securing its position in the competitive global landscape.
Since 2005, Swidarski has not only led Diebold to achieve the SmartBusiness 100; but in the last year, the company has already launched SmartBusiness 300, and begun its third $100 million tranche of cost reduction. The company’s shares rose 18 percent last year, with fourth quarter revenue increasing nine percent to $791 million.
“Hopefully, the economy turns and things move in the right direction, but in all of our businesses, you can control the cost side of the equation,” Swidarski says. “You can’t control the revenue side — so it’s making sure that we have a good understanding of the cost side.”
Get the info
One way to better understand the cost of your business is to utilize your information-gathering and research tools. By having focused research to use in your company’s strategic planning, you’ll know where resources are most needed for your business to become faster, more nimble and more cost-effective, whether that’s in setting up new operations or proactively adjusting value points with spending to meet changing customer needs.
Before you decide how to allocate your company’s physical and financial resources, you have to make sure information about your customers, industry, competitors and so on, is collected and evaluated similarly throughout your organization. In Diebold’s case, Swidarski added paperwork for all of his global market managers to analyze industry activity in detail.
“What we tried to put in place was a similar process that we could use across the board in terms of the evaluation,” he says. “Then we put it incumbent upon each of the country managers to fill out the documents and forms. At first, people looked at is as, ‘I’m filling out documents and forms.’… Now they understand that to get the R&D effort that we need for a place like Thailand, we need to know the specifics and granularity of the competitive landscape there and how that differs from Brazil, because they are different competitors. To get a group of diverse people across 90 countries focused on the priorities, everybody has to understand the endpoint. So collecting that information became very important.”
Implementing new information-gathering procedures in your business is sometimes necessary to ensure you have all the knowledge needed to make financial decisions.
For example, Swidarski recognized that Diebold could better plan for global operations by moving its $70 million per year R&D — previously based in the United States — out to its top revenue-generating countries and develop micro-market plans to map out each market’s strategy.
“In those micro-market plans, we know exactly what gaps we have, what technology from a software-hardware service standpoint and what we need to do to create competitive advantage,” Swidarski says. “Those countries — they drive about 80 percent of our total revenue — so [there is] very focused effort there.”
Having focused research for specific markets also helps Diebold identify which markets need new capabilities and which could be served by the company’s existing technology.
“Other countries may fall out that are going to use the technology we develop for a China or a Brazil or a United States or a France,” Swidarski says. “So though we may not develop something specific for a smaller country in Europe, we still have the technology that we developed that may be specialized for France that we can use there. That helps us hone our resources not only on the front end but on the back end.”
Look at the big picture
Another way businesses can learn to be more cost-effective is by changing the way they analyze their operations. There are many different parties and steps involved in operational processes such as product design or engineering, so it’s difficult to gauge how cutting costs in one area might affect another. To understand where costs can be streamlined, you need to look at entire processes as whole, complete puzzles instead of as their separate pieces.
“You may make a module less expensive, but then you have to service it out in the field,” Swidarski says. “So for us, it’s looking at all aspects of it and the intelligence you want to build in the module that may give you savings on the backend. That is even more important than saving $2 on the front end if you are going to save $5 or $10 on the backend by having a sensor that helps you have reduced inventory.
“Probably some of our biggest innovations come from our treasury. Our day sales outstanding in the United States have dropped from 60 and 75 days to about 30 days because of process improvements with less people. That’s really where we get the biggest gain. How do we handle everyday processes and look at them wholistically, rather than ‘my little piece of it.’ When you look at an order-to-cash process, where are the areas of ways you call pull out of that? And through that, you get cost savings, as well. We need to do that based on the competitive environment that we are in.”
By looking at the big picture, you’ll have a better sense of how different parts of a process interact and affect one other and, therefore, recognizing how to trim, alter or consolidate costs in one or more areas without sacrificing quality in others.
“There’s more to come out from a process-improvement standpoint than there is from working with suppliers and saying, ‘I want that for 3 cents versus 4 cents,’” Swidarski says. “That gets you a little bit. But it doesn’t change the process.
“It’s not only the design aspect of what’s needed in the marketplace; it’s what are the other aspects of what that device is doing and the connective tissue of it as to what the total cost is and how we attack that wholistically. So we’ve brought our engineers from our service organizations in earlier. We brought manufacturing into design. We brought software in and where we use to test serially, we now test entire pieces wholistically. It really has made a tremendous difference.”
Recognize your value points
You can’t have a good understanding of cost if your strategic analysis doesn’t take into account how the value points that your customers are choosing constantly change. So lastly, to understand the cost side of your business, you need to follow your value points.
The real value a business brings to its customers is shaped and changed based on the competitive landscape. Swidarski sees that more and more of the value Diebold provides customers today is in the service side of its products such as ATMs; so he’s led Diebold’s transition into services-focused organization rather than a manufacturing one.
“The way I view it is: If someone defines you as a manufacturer, you may or may not be,” Swidarski says. “That may be a little part of what your value is. … In our case, if you use a simple device like an ATM, the knowledge of how that needs to be incorporated within an environment is much more important — the software associated with that, the intelligence you can put on that to make it more valuable, the ability to self-heal a remote device. So as we look at it, manufacturing may be a phase that 10 or 15 years down the road, doesn’t have to be something that we absolutely do. Now, today, we do that, but I wanted to make sure that the value points, that the bank that my customer’s choosing, I recognize what those value points are.
“There’s 80 percent that’s spent on managing an ATM that has nothing to do with how much that hardware costs. It’s that 80 percent that has the services that have the greatest value that we spend a lot of time focusing on.”
The point is, you don’t want to define your value it in a way that may not be relevant for your customers changing needs and interests.
“When I met with the first CEO from one of the biggest banks in India, he said to me, ‘You know, your ATM costs four times what it costs for me to buy a car,’ and I said, ‘Well, my ATM’s about 40 times more reliable than your car,’” Swidarski says. “The point is, as you deal with different folks from a different perspective, there are different issues that are the most important issues in their decision process. Having something over-engineered and developed from very sophisticated U.S. folks may not make it to the marketplace because the price points might be wrong.”
When you better understand the cost of doing business, you don’t just learn what strategies are needed to save money and be more efficient. You also learn you can focus your financial resources where they can have the most impact, so as your customers value points change, your business can adapt and grow to meet them.
“It’s in viewing the value chain and how you fit in,” Swidarski says. “Not limiting our thought process in that regard has allowed us to move the value points and allows us to generate over half our revenues from recurring revenue.”
“Now we are about managing high value of networks, creating and managing complex networks. That’s really what we do. It happens to be an ATM today. It happens to be security devices. But in the future it can be anything.”
How to reach: Diebold Inc., (330) 490-4000 or www.diebold.com
The Swidarski File
President and CEO
Education: Bachelor’s degree in marketing and management at the University of Dayton; master’s degree in business management from Cleveland State University
What is a typical week in the life of Tom Swidarski when you are not in the office?
Quite a bit of my time — maybe 40 or 50 percent — is spent traveling. And a lot of that is international. That’s really for me to get in front of customers as well as our associates and understand and make sure that we’re meeting customer needs and where we have holes or gaps and making sure that the information we’re getting in. It’s important for customers, especially larger customers that are maybe spending $100 million or $150 million with you, that they see the CEO and that he’s committed to it. So China is important in that regard. Brazil is important in that regard. For me, it’s also important to not only go see them but also to view our operations, to sit with our top team as well as always spend time with our folks internally.
How do you get employees to buy in to your vision?
If you can demonstrate in the deepest, darkest hours the humanity of making tough calls and doing it appropriately, that really helps people buy in to the vision of what you are trying to accomplish, regardless of how good you are at communicating. Regardless of how good your vision is and how fancy it is, it comes down to do people trust you. For me, that’s what it’s about.
Chris Blase never intended to go into the cleaning business as his career. It was something he decided to do with a couple buddies to supplement his full-time job.
Then he and his buddies lost their full-time jobs and the cleaning business suddenly became a lot more important.
“I thought it would be a pretty simple, straightforward business to start, and I found out it was a lot more difficult,” Blase says. “The biggest challenge by far was recruiting people that were motivated to do a good job. I hired and fired over 1,000 people over a five-year period.”
What followed was a time of stress, struggle and, ultimately, satisfaction as Blase learned what it took to find the right people and build a business that could thrive.?He says his first lesson was to stop trying to be all things to all people.
“I was getting to the point where it was not unusual for me to work straight through the night,” Blase says. “I was doing things like driving away from the gas station with the hose still in my car. And I walked out of my apartment one day and I hadn’t put my pants on.”
Blase was taking all comers as clients, no matter the size or location, and it was burning him out. After selling the business and working for a couple other companies that were suffering from the same problems, Blase decided to strike out on his own again. This time, however, he took a different approach.?He quit trying to do it all and focused on a specific segment, office buildings between 50,000 and 300,000 square feet.
Just as importantly, he made it a point to bring in motivated managers who could help him lead and grow his business. Buildingstars Inc. now provides cleaning services for more than 1,400 customers and took in $20 million in 2009.
“If you can find a way for your key managers to have a vested interest in the company, you’re going to get a totally different attitude toward work and just a totally different approach,” says Blase, the 48-employee franchise cleaning company’s founder and president. “Especially if you’re expanding on a large scale.”
Blase decided to get into franchising. And lest you think this story suddenly doesn’t apply to you anymore, Blase says, ‘Think again.’
“In theory, almost any business is franchiseable,” Blase says. “Companies are going to be faced with a decision where, ‘I’m happy here in St. Louis. I really don’t want to expand beyond this because I don’t want to make the investment and manage remotely.’ They should be asking the question: Would that make sense under a franchise model?”
Blase says franchising is a much more comfortable way to manage people.
“It’s like working with supporting partners versus managing employees,” Blase says.
So the next question is: How do you find people to fill these important roles of leading your franchise units?
“The key is not really looking to sell a franchise,” Blase says. “It’s more based on qualifying or recruiting a franchise owner that’s qualified. It’s not all about the initial investment. It’s more about the recruiting process. You should turn the process around and look at qualifying that person just as strong as you would when you’re bringing on a manager in your company.”
Blase says the difference in providing someone with equity and a stake in the business versus just being another employee in the company can be immense.
“I was able to attract a totally different type of individual that maybe wouldn’t normally go to work for a cleaning company,” Blase says. “It’s all about creating the right kind of management and development system for your key people.”
Put in the time
One of the first things Chris Blase does when he’s looking at a prospective franchisee is ask the person to put together a business plan.
“Have the prospective franchisee go through a very in-depth process to prove that they are competent or capable of managing that unit,” says Blase, founder and president at Buildingstars Inc. “The biggest mistake that companies make is they base the decision on that person’s ability to invest versus their ability to perform.”
The 48-employee franchise cleaning company has more than 1,700 customers and took in $20 million in 2009 revenue.?If you find that you’re not recruiting effective leaders for your business, assess your recruiting style and the questions that you’re asking.
“Am I identifying the same skills and using the same criteria that I would use in hiring a competent manager?” Blase says.
Set aside the investment aspect of franchising and focus on the basics of leadership skill and competence. Make it clear that you want to work with the person to help them grow.?At the same time, you need to stay in touch with customers to get their feedback on how your leader is doing.
“It’s important to be in touch with the perceptions of the customers and hear their positive viewpoints and negative viewpoints,” Blase says.
How to reach: Buildingstars Inc., (866) 991-3356 or www.buildingstars.com.
Wellness is everywhere these days. It’s in the home. It’s in the workplace. And it’s a topic of national conversation. But wellness means more than just staying healthy and eating right.
“When you look at wellness, you have to examine everything — your career well-being, your financial well-being, physical well-being, social well-being, community well-being and, ultimately, your spiritual well-being,” says Dr. Deepak Chopra, wellness guru and founder of the Chopra Center for Wellbeing.
Smart Business sat down with Chopra, who works with individuals, executives and companies to foster wellness in numerous forms and discussed the impact health and well-being can have on individuals and organizations.
Dr. Chopra, how important is wellness and can you put an actual economic number on that importance?
There is a lot of good data that shows how well-being correlates with economics, and there are huge implications of how one’s well-being affects the bottom line of a company.
It is currently estimated that 15 percent of the work force in the United States is ‘actively disengaged.’ These are unhappy people who go to work each day and make it their business to make other people unhappy. The cost of actively disengaged workers in the American work force is about $350 billion a year. There are another 57 percent of people who are not actively disengaged, but they’re disengaged, which means they’re just punching the clock. That leaves only about 28 percent of workers who are actively engaged.
I’m on the advisory board of the Gallup Organization, and we’ve studied this issue. What we’ve begun to find is that the economic implications of this are not only in the billions but probably in the trillions. What’s more, we don’t understand the relationship between physical and mental well-being and economics very well because medicine has not focused on this. But the fact is that new information shows that your physical well-being is linked to all these other things and there’s an enormous economic impact tied to wellness.
Can you give me an example of how this works?
If you are having an unhappy time at work, for example, such as if you’re not only disengaged but your supervisor ignores you, your likelihood of getting disengaged and ultimately becoming sick goes up by 44 percent. If, on the other hand, your supervisor doesn’t ignore you but criticizes you, your disengagement falls to 20 percent because you’d rather be criticized than ignored. That is because, when you’re ignored, you don’t exist. Finally, if your strengths are noticed by your supervisor or by your colleagues, your disengagement falls to less than 1 percent. That has huge economic implications, not just for a person’s well-being but also for their family.
Likewise, there is data on social well-being, community well-being and financial well-being. If you work for a firm that makes sure there is some safeguard for you not to get into debt, if you have a certain amount of savings taken care of through automated plans and if you can afford to pay your taxes comfortably, those have direct implications on your health and, therefore, on your productivity.
When you actually sit down and analyze it, you can come to the conclusion that, for companies, wellness and well-being may just be your biggest investment because it has huge returns for you economically. Think about it from this perspective: If you have happy employees and you’re happy yourself, you’re going to have happy customers. And if you have happy customers, you’re going to have a healthy company and happy investors.
So you’re saying that there’s a correlation between happiness, health and wellness, and prosperity?
Absolutely. We now know so much about happiness and workplace happiness and how that has direct effects on your neurophysiology, on your biology, on things like immunomodulators (the things that modulate the activity of your immune system), so no longer is the connection between emotions and wellness and well-being disputed.
If you’re a business leader, you need to consider whether you engage emotionally with your employees and even your customers, in order to improve and increase your business. This emotional engagement requires immense amounts of knowledge about what makes people emotionally intelligent.
For 40 years, we focused, as a medical profession, on the deleterious effects of stress. We now know that with people who are stressed, there is a direct correlation with addictive behavior, cardiovascular disease, infections and some types of cancer. But we hadn’t looked at the opposite: If stress could make you sick, could happiness make you better? And the evidence shows it can.
What can someone do to spark that happiness and, in turn, become healthier?
There is a lot of good data on happiness. Happy people see opportunities where others see problems. Happy people have ways of getting over the limiting beliefs that hold them back. Happy people have meaning and purpose in what they do. Happy people make other people happy. And they know the fastest way to be happy is to make someone else happy.
Here’s something worth thinking about: If you have a happy friend, your happiness level goes up 15 times. If your happy friend has a happy friend, it goes up another 10 percent. And if your happy friend has a happy friend who has a happy friend that you don’t even know, it goes up another 10 percent. Here’s why: Because when two people meet, it’s not just those two people meeting, it’s all the relationships and factors in that person’s life that influences their behavior.
These days, we are doing a lot of research on social networks and how they not only improve the quality of life but also the quality of well-being, economics, productivity in the workplace, engagement and even biochemical responses, such as your blood pressure level. It is all tied to wellness and well-being.
Wellness seems to be something everybody should be interested in pursuing, but it goes well beyond just eating healthy, exercising and trying to be happy. You’re talking about a complete behavioral change, correct?
That’s true. I work directly with companies and executives to provide training on leadership skills in this area. True leadership requires several strategies. It requires the ability to listen, but the ability to listen not only as a good observer but as an analytical listener, emotional listener and spiritual listener. Leadership also requires the ability to create a vision, the ability to engage emotionally with people and the ability to enhance your awareness to understand what people need — whether it is your customers, employees or investors.
Finally, leadership requires the ability to strategize and take action.
There is a whole section I call responsibility. When you talk about corporate or leadership responsibility, you talk about initiative, investing the right resources, risk management, values and establishing corporate missions. But what is missing for corporate leaders and leadership training is that as leaders we need to be healthy ourselves, physically and emotionally, and we need to make sure the people we work with we have at least some tools to ensure their health, wellness and happiness. That does require a different way of thinking, and yes, it is a behavioral change.
How do you get to that point? It’s a lot harder than simply waking up a little earlier and working out before going to work or eating that salad for lunch instead of a double cheeseburger.
If you motivate people through fear it usually doesn’t work. There’s a high dropoff rate, and furthermore, fear has its own consequences, such as stress. So many times, when people are motivated by fear, they end up worse than they were before. Instead, people have to be inspired and feel some type of joy in this transformative process. They also have to understand that if they take on this transformative process and take responsibility for their well-being, they’ll be much more productive. They’ll be able to accomplish more by doing less.
Take stress for example. When people are stressed out, they do things they shouldn’t, like drink to excess. If somebody has a hangover because they were stressed out and sought refuge by drinking too much, half the day is wasted just recovering from the hangover. And by the time you’ve recovered, then you’re ready to create another hangover.
So it’s very important for people to recognize that their energy level, their creativity, their ability to motivate others and their ability to produce more is directly related to how they’re feeling inside and their health.
What are some ways people can take to increase their wellness?
There are a few simple things that will help create well-being.
Get good sleep. The importance of sleep has been underestimated. There is an overwhelming percentage of the population of the United States that take sleeping pills to sleep. That doesn’t produce normal, rejuvenative sleep, which is necessary.
Engage in a minimum amount of exercise each day.
Be a little careful about your diet. Don’t be compulsive, but try not to eat anything that comes in a can or has a label.
Have healthy relationships.
Use some technique for stress management, even if it is 10 minutes for meditation, reflection or thinking about how you want your day to go, sitting quietly or strategizing around your priorities.
Build up on your relationships — both at home and in business.
You mentioned relationships. What’s the importance of personal relationships in wellness and well-being, and how can those directly impact one’s mood?
Emotions are contagious. If you’re feeling stressed, even if you don’t say or do anything that’s inappropriate, there’s a phenomenon called limbic resonance. People around you will start to feel stress, their blood pressure will go up and their heart rate will speed up even though they are not aware of it. All of this means that, as a social species, we are constantly monitoring, regulating and being regulated by the emotional state of others around us.
This emotional state not only affects our emotions but our physical state — blood pressure, heart rate, adrenaline levels. If you are emotionally fulfilled, happy, you affect other people not only by what you say or do but by your very presence.
And the opposite is true. If you’re stressed out, you affect people in a negative way, not only emotionally but physically, just by your presence.
So what can you do to keep this from negatively impacting your wellness along with the well-being of others?
There are techniques to change this. You can acknowledge other people’s strengths, help build teams and foster teamwork, and actually make sure that people work only in those areas where they can utilize their strengths.
We have identified 35 strengths where people fall into and found that even if people are really good and productive, if you put them in the wrong seat on the bus with regard to their strengths, they’re not going to be happy, and that’s going to affect their productivity. Therefore, team-building and putting together the right set of talents based on people’s strengths is imperative in the workplace. And, you must acknowledge people’s strengths. We don’t always do this.
We asked people in over 150 countries the same question: Do you like what you do every day?
Only 20 percent of people said yes. We also found out that more people die in the United States on Monday morning at 9 a.m. of a heart attack than any other time because they hate their jobs. These are facts that are immediate and alterable, and they all correspond to wellness.
How important is getting the right amount of sleep each night?
Sleep is very important. Restful sleep is the time when your body rejuvenates. There is a period during sleep, dream sleep, which is when you have some sort of detox activity, where the stress is removed. For many people, between six and eight hours of sleep makes sense.
So what should be the first thing people do to take responsibility in their own wellness and well-being?
Sit for five minutes with your eyes closed. Put your attention in your heart every morning and ask yourself, ‘Who am I? What do I want? And how do I want my day to go?’ If you start living that question, you will spontaneously know what your priorities are. And that will ultimately lead to a healthier, more productive and happier life.
How to reach: Chopra Center for Wellbeing, www.chopra.com
Robert Eves has been using a technology for 20 years that is still relevant today and has likely saved him millions of dollars in that same time period.
As founder and president of Venture Corp., a commercial real estate development firm, he began using content management software about 20 years ago as a way to keep all of his contacts, to-do lists and projects organized in one place. As the company grew, it became even more important to the business.
“This is Ground Zero — it’s the base of our operations,” he says. “Everything that we do is controlled by or metered by or recorded by Commence (the software Eves uses). It is, without a question, the most important program that we use in our company, by far. It’s far and away the most important software that we use all day, every day.”
To start, Eves uses it for to-do lists, notes on topics of interest to him, quotes he’d like to remember and other things along those lines. If he needs to schedule a lunch meeting with a co-worker, he can go into the software and put it on the calendar. A second later, it copies over to his Outlook, and a second after that, it copies over to his iPhone. At that same time, it sends a message to the person he’s having lunch with and puts the time on his or her Outlook calendar, as well. Everything is updated for everyone in real time.
It also reduces clutter because he keeps all files and records in the software instead of having manila folders everywhere — in fact, he has the equivalent of about 80,000 manila folders stored in the program.
Additionally, he uses it to target customers and manage the relationships with them. His target client isn’t necessarily someone who’s looking to buy his commercial spaces. Instead, it’s the commercial real estate brokers whom he’s trying to reach, and the software allows him to do just that. He now has more than 210,000 broker contacts in there to customize his searches.
“We can go into Commence and say, ‘Give us all the commercial real estate agents within these ZIP codes surrounding my new project,’” he says. “I enter those search parameters in Commence, and it takes me about 15 seconds, and there on the screen is every broker that fits those qualifications.”
He sends out about 100,000 e-mails a week, and because brokers want to know what’s available for their clients, they’re not going to delete these e-mails, so it’s highly effective marketing.
The program is also helpful for his website. He creates spreadsheets of all the available real estate centers that Venture has available, and these include asking price, square footage, property taxes, acres, how many phases there are and will be, and other numbers along these lines. Using SQL Server technology, the software is connected to the company’s website, so if he makes an update in the spreadsheet in Commence, it’s then updated to the website in real time, so customers always have current information. These updates can be done in real time like Eves does, or they can be programmed to update at a certain time on certain days.
“That kind of connectivity is great,” he says. “We don’t need a programmer, we don’t need anyone to go to change the price — it changes dynamically.”
And not needing a programmer saves big bucks on his IT budget, which can add up very quickly.
“We measure it more in increase in efficiency and productivity,” he says. “I would say that the savings are perhaps millions over the years and certainly many hundreds of thousands in payroll to make changes to it — there are changes to it every day. Just to have it, productivity goes so much higher.”
How to reach: Venture Corp., (415) 464-2000 or www.venturecorporation.com
Set it up
If you want to save money and efficiency by using content management software like Robert Eves, founder and president of Venture Corp., then it’s simple. First, find the software that fits your needs. If you don’t want to deal with IT people, then find one that has templates that can help you get started.
“Use the templates that come with it and then begin to customize them,” he says.
For example, you may have a contacts template, but you may add to it a column to put people’s spouses names, so when you see that person at a function, you can also greet his or her spouse — you remember the name because you had it in the program, which translates through to your smart phone, too. Or maybe you’re a car enthusiast and want to keep track of the type of car all your contacts drive — you can do that through customization.
“If you want your notes to get linked to your to-do list or your to-do list to be linked to your appointments, that’s what a relational database does.”
David Hankin could pass for an entertainment executive as he sits in the courtyard of The Peninsula Beverly Hills hotel. Donning a sleek suit and squinting into the sun, he cracks jokes about which doctor he might portray on TV.
And when you hear his mantra, you’ll really think Hollywood.
“You have to take care of your talent,” he says.
Hankin does come from the entertainment industry, where he gleaned that piece of advice, but today, he serves as CEO of The Alfred E. Mann Foundation for Scientific Research. In fact, that mantra still guides him as he leads research and development of medical devices at the organization, which has produced cochlear implants for the deaf, retinal prostheses for the blind, and the pen-cap-sized device Hankin holds now — an implantable microstimulator that’s battery-powered to stimulate impaired neural and muscular functions.
Some would argue that those plots of intellectual property are a business’s most important assets. But when a moderator of a panel discussion on the topic once made that claim, Hankin was quick to refute it.
“I said, ‘With all due respect, in our business, intellectual property is not the most important asset that we have,’” he says. “‘The most important asset we have is people because that’s where it starts.’ You don’t have intellectual property if you don’t have great people.”
For Hankin, who also serves as president of The Alfred E. Mann Foundation for Biomedical Engineering, it really boils down to that mantra he borrowed from the entertainment world. It’s all about taking care of his 105 employees, who tend to be top decile graduates from prestigious technical schools with years of specialized experience. That caliber of talent presents a double-edged sword.
“The challenges, of course, are that you have to figure out how to channel that creativity and that brilliance so that it’s productive,” he says. “The rewards are spectacular, and you end up with devices like a microstimulator that holds the promise of reanimating paralyzed limbs. From a leadership point of view, it’s really channeling that brilliance and energy that (employees) have.”
Start with skill
Though the Mann Foundation is relatively small, with recent income around $24 million, it competes with giants like Boston Scientific and St. Jude’s.
To stay competitive when it comes to hiring, the foundation recruits heavily across several fields, from electrical and mechanical engineering to biosciences. Hankin keeps tabs on employment news so if a large defense contractor is shedding people because of a canceled program, for example, he reaches out to their human resources manager to connect the dots.
“Anytime a company with sufficient technical prowess is shedding people, we look at who they shed,” he says. “Just because somebody gets axed in this environment doesn’t mean they’re not a great person.”
Because about 80 percent of the positions at the Mann Foundation are technical in nature, Hankin considers technical skill the primary hiring factor.
“It’s a litmus test because, frankly, if you don’t have the right technical acumen, you’re not going to be able to hang in our group,” Hankin says. “If they don’t have the skill level and they can’t sit in meetings and contribute in our organization, then they’re not going to make it.”
Hankin often has prior working relationships with executives he brings in, partly thanks to his recruiting network. Beyond that, he assesses how candidates have proven themselves in the field.
“Some of it is based on past performance: What have they done in their career? What kinds of challenges have they undertaken?” he asks. “I’m not afraid of people who switch careers. Frequently when we see that, we see people who are able to make adjustments and also have to learn about new industries.”
Industry-hopping could also suggest a candidate is a natural learner who would fare well in ever-changing fields like health care and technology.
Use the interview to drill into candidates’ skills, even if that means turning it over to the experts. Hankin gets uncomfortable in interviews with his scientists, because they ask candidates such tough questions.
“It’s not, ‘What do you think your strengths and weaknesses are?’” he says. “They’re asking them how they would solve certain scientific and engineering problems. They want to know more about their approach than whether or not they come to the right answer.”
Give employees leeway
When you’re bringing in such technical people who have spent years specializing in their area, the key is really harvesting their abilities. If you’re like Hankin, you may feel clueless next to your people’s expertise. In that case, get out of their way.
“My management style tends to be more about hiring great people and letting them run, giving them the field,” Hankin says. “I’m not smart enough to micromanage these people, honestly. The technical breadth and diversity among the different technology areas that we have to cover … is staggering. I have to hire great people and really trust them.”
Their skills need the opportunity to shine. Give employees freedom to do what they do best.
“One, you have to have creative, challenging projects for them to work on,” Hankin says. “Two, you have to give people room to make mistakes and fail. We want people to take risks; that’s how we solve problems.”
Creating that safe environment starts with flexibility on your end. When you’re discussing the company’s approach to solving a problem, keep the table open to all ideas. If your employees are technical experts, this isn’t too hard to do because they’re the ones with the knowledge necessary to formulate answers.
“It’s not my role to talk,” says Hankin, who stays quiet during meetings. “If something comes up where there’s a partnership issue, those are things I’ll (talk) about. If there’s a debate on how to design a circuit sufficiently to perform a certain function, I’m probably not going to enter that debate.”
The good thing about this kind of environment is that even if Hankin did enter that debate, his perspective would merit consideration, too. He’s comfortable throwing out a “what if” in a meeting because an initial “Yeah, right” response may give way to, “Let’s try it.”
“We discuss different directions that we might take in addressing a problem,” he says. “We may pursue one or two or three or four avenues of addressing a particular technical problem, any of which may succeed or not. We’re willing to consider multiple paths.
“Maybe 90 percent of the conversation is about different technical approaches: ‘Well, have you tried this? Have you thought about that? I know someone who’s done this.’ This free flow of scientific ideas is something that we promote, and that’s how these kinds of problems get solved. They don’t get solved because some guy is holed up in a cube someplace running experiments.”
Rigorous testing — in many cases, required by national and international guidelines — later reveals the best solution. But to get there, Hankin has to remind people that speaking up is the only way for solutions to surface.
“From a management point of view, we tend to want to understand what the problems are so that we can help try to direct resources to hot problems,” he says. “Because we have a culture where you’re not going to get crushed if you fail, people tend to be more open about things that they’re seeking to solve. One of the things that I always tell people (is), ‘If there’s a problem that exists and I don’t know about it, there’s nothing I can do to help direct resources.’ I look at myself as the remover of roadblocks and also traffic cop of resources. If I can direct resources in the right way in the right place, we can solve almost anything.”
You generate an open discussion by focusing on the collective goal of solving problems. A new employee at The Alfred E. Mann Foundation, who came from a company where people were protective of information, was surprised by his first meeting. Afterward, he asked Hankin if people were usually that open.
“Here, people want to share information because they want to solve their problems,” Hankin told him. “They know there’s other people who have different experiences who come from different industries who have a potential contribution to solve their problem.”
Make your mission relevant
The microstimulator Hankin is pinching between his thumb and forefinger was a much bigger undertaking than its size suggests. It took 10 years to develop — two for the proprietary ceramic case alone. To get there, the foundation debuted at least half a dozen fresh innovations.
How does he keep employees motivated for projects that take that long to complete? Hankin says it’s not a huge hurdle, considering that “psychic value” is inherent with Mann’s mission of, basically, saving lives. When Hankin surveyed employees about their motivation a couple of years ago, they said they were there to help improve human health.
Your company’s mission may not be that mobilizing. But whether you’re saving lives or shipping parts, the key to motivating employees is showing them the relevance of what they do. Making your product or service real to them will keep them engaged for the life of the project — however long that may be.
“Because we take things to human trials, people get to see the effect on people,” Hankin says. “We also bring patients in who’ve experienced the benefit of a device, and we have them talk to our people. So we try to bring our people as close to the patient experience as they can get without having to go to the clinic themselves. This is the whole motivating factor— you get to see the benefit of the device you create.”
To get his employees close to the customer, Hankin will even send employees to watch the company’s devices being implanted through surgery.
The key is keeping that big picture in focus as employees tackle individual tasks. Frequent design reviews give Hankin’s team an opportunity to recap every aspect of a project’s progress and remind everyone about all the parts that must come together.
Getting big-picture buy-in goes back to giving employees challenging projects to work on. If you can pare down your teams to the point where each member carries a significant portion of a project’s weight, you automatically make each piece important. When Hankin came on board in 2007, he trimmed overlaps and “deadwood fat” to make the organization lean and each role relevant.
“Each person’s working on something that’s really meaty,” he says. “It’s not somebody who’s working on a piece of something that they can’t see any relevance to. Everybody in our place understands the relevance of exactly what they’re doing.”
A good leader educates employees about why their jobs matter, but a great leader actively matches up employees with jobs that matter to them personally.
By helping employees see all the necessary parts that make a whole, you’re inevitably unveiling other opportunities where their skills could make a difference. Have the flexibility to let them jump on different projects.
With five or six projects running at once, Hankin can reassign employees who have completed one task or just need a change.
“I try not to pigeonhole people,” he says. “If people want to try different things — subject, of course, to meeting our schedules and our budgets — we try to enable people to work on different projects. … We make adjustments from a career development focus. I may say, ‘Look, next available opportunity to do that, we’ll do that,’ but I keep my promises.”
That effort keeps employees engaged so they’ll make your company successful. By taking care of his talent, Hankin keeps his most valuable resources engaged through high-risk, high-reward projects with long, challenging life cycles.
“If somebody is working with you and they are unhappy and disgruntled, you’re not going to get their best work,” he says. “Part of the challenge is to get people to align with what their desires are.”
How to reach: The Alfred E. Mann Foundation for Scientific Research, (661) 702-6700 or www.aemf.org
When Marty Field purchased a money-leaking Chicago packaging company about a decade ago, he didn’t want excuses. In early production meetings, he learned the company, which was operating at 42 percent efficiency, was late delivering to more than half of its customers — because that’s the way it’d always been.
That wasn’t going to cut it.
“If we could create a manufacturing facility that would always be on time and if we were to meet every customer’s request, that would be a wonderful way to create sales,” says Field, the president of what is now Field Packaging Group LLC. “We couldn’t do that because we didn’t have an efficient manufacturing facility. That’s when we created our efficiency bonus program.”
He told his 80 employees they could receive monthly performance bonuses for hitting certain ranges of labor cost and efficiency, as well as delivering on time at least 98 percent of the time. They’d earn $50 for reaching 70 percent efficiency and an extra $10 for every percent over that — minus any deductions for quality incidents.
But first, Field had to define efficiency.
“The key was to find a way to accurately measure efficiencies and then determine what reasonable industry standard is,” says Field, who purchased industry-specific software loaded with standard machine setup times and run speeds. “Then communicate to your employees what’s expected of them, monitor their performance and then, at the end of the month, communicate to them how they performed.”
For transparency, Field installed chalkboards on each machine to track efficiency. Now, if the previous day’s numbers aren’t posted by noon, employees come looking for reports.
Sure, that breeds some peer pressure, but Field sees it as motivation.
“An awful lot of the increased efficiency is created internally by [employees] themselves,” he says. “If a crew is waiting for the paper, the guy in charge of the paper has a lot of pressure on him through his fellow employees. Peer pressure has caused people to act as a team. They’re able to perform together and to perform a lot better.”
Field brings employees together once a month to recap performance and other influencing factors, like the economy and competition. They also go over quality issues, discussing improvement opportunities.
All employees — from the receptionist to the customer service rep — attend those meetings and participate in the incentive program. Employees need to understand the connectivity of how each role must seamlessly set up the next to achieve overall success.
“Without teamwork from everybody, we won’t be able to get the efficiency,” Field says. “If the order goes out to the factory and all the information is accurate and provided, that saves time from a crew having to try to figure out what they’re supposed to do. If the people who are supposed to provide the tooling are not efficient in what they do, then the crew is waiting for the tooling.
“Everybody in the whole company affects efficiency, and everybody in the whole company should be rewarded for it.”
The reward itself is motivation enough — with some employees earning monthly bonuses of $220 — but it’s also the concept. Employees know they have a hand in controlling not just their bonus but the company’s overall success. Employees took the reins and led Field Packaging to 2009 revenue of $40 million and are still improving efficiency.
“They really are self-motivated, and it’s not only for the bonus,” Field says. “They need to see that the company is successful, especially these days where there’s so much unemployment.
“They have a greater desire to perform better because we’re creating more business. The more business we have means more work for everybody. People have really bought in to it, because it’s good for the company and it’s good for them.”
How to reach: Field Packaging Group LLC, (708) 594-5260 or www.fieldpackaginggroup.com
Never say no again
There’s one word Marty Field doesn’t want to hear.
“If a customer calls and has an unreasonable request for a delivery, a customer service person is not allowed to say no,” says Field, president of Field Packaging Group LLC. “We have to find a way to get it done.”
It was bad enough that late deliveries were the norm when Field bought the company. He envisioned the other extreme where they’d not only be on time but meet any request.
There are a few exceptions, of course — like acts of God or unavailable tooling. Aside from those, Field never wants to be in a position where he has to say no.
“The more efficient we are, the more capacity we have,” he says. “The more capacity we have, the more flexibility we have to be able to take care of customers’ requests. The more customer requests we have, the more successful we’re going to be.”
One machine used to take a half-hour to set up and another hour to run. Now, because Field’s employees understand efficiency goals and use teamwork to achieve them, they’ve cut out dead time. They can set up the machine in five minutes and run it in 20.
“We have put ourselves in a position where we always will have more capacity than we have business,” Field says. “We should never be in a spot where we can’t say yes.”