Crime doesn’t pay. Protection from crime, on the other hand, has paid off in a big way for AlliedBarton Security Services LLC.
The 55,000-employee company bucked the downward trend during the recession, growing from 2006 revenue of $1.2 billion to 2010 revenue of $1.7 billion. Chairman, president and CEO Bill Whitmore attributes the growth to a selective, informed approach to business, along with a dusting of opportunism.
“The good news for our industry is that during an economic downturn, there is a focus on crime,” Whitmore says. “There is a concern with protection, a concern with preventing workplace violence. Those things still exist, and a company like ours is here to fill that need.”
The seeds for AlliedBarton’s winning approach to business in a recession were planted in 2007 and 2008, when Whitmore and his team formulated a strategic plan. Whitmore’s team didn’t know the depths to which the economy would sink, but they controlled what they were able to control — the markets they decided to pursue and how they reacted to whatever the markets and the economy, threw at them.
“When we sat down and wrote the plan, we saw a couple of things that we believed would happen,” Whitmore says. “One is that contracts in our industry would be consolidated. They were, and we put together a national accounts team that works with customers embarking on initiatives. That program didn’t exist in 2007, and now it is roughly $400 million of our run rate. The strongest pipeline we have in our company is for those clients that are looking to consolidate.”
To make a strategic plan strong and accurate, you need alignment. That means you need your plan to fall in line with the vision and cultural values you promote as a company, and you need a team that is willing to embrace those values and work toward the goals outline in your strategic plan.
It’s a task that requires you to be equal parts cheerleader, lookout and air traffic controller.
Get focused on goals
Every item in the AlliedBarton strategic plan is tied to a goal, which in turn ramps onto the overarching goal of the organization, which is to protect the people, property and assets of clients.
With goals ramping upward, the responsibility for achieving the goals has to be communicated downward and tied to goals and incentives that directly impact each of the 55,000 AlliedBarton associates around the country.
“Goals get translated into an annual performance plan, goals get translated into compensation metrics as basic as performance planning documentation for individuals, which is then cascaded into the company,” Whitmore says. “Then we sit down and measure people on how they did against those goals and how well we did as an organization. That’s the accountability part, that we hold people accountable for doing it.
It’s a mentality that is shaped by management from an employee’s first day on the job. From the beginning of the first day, employees are schooled in the company’s goals, strategy and values. They are given a copy of the company’s cultural primer, “Dare to be Great.” The booklet is often referenced by Whitmore in conversation, and employees are expected to know its contents.
With “Dare to be Great” providing the template and Whitmore providing the guiding hand and reinforcement, the culture of accountability has taken root throughout the expansive AlliedBarton footprint.
“The one thing I’m very pleased with is we’ve had a number of examples in the last few years where people in our markets would kind of light up in various ways,” he says. “They would say to us, at the account level and regional offices, that there is a leader who is not living up to the standards that we as a company expect. We expect more out of our leaders than this, and we know that you on the corporate level do as well.”
If an employee, particularly on the management level, is not knowledgeable about the goals and values of the company, their technical competency matters less. Technical skills can be learned, and in management-level positions, is often a job prerequisite. Values and a willingness to work as part of a team toward common goals are far more innate to each person.
“Anyone can learn the software and technology of the job, but you want people to lead,” Whitmore says. “I was interviewing a woman for a senior position recently, and I brought the ‘Dare to be Great’ book with me. I showed her what we’re all about, what we’re hiring for. She had the technical skills, we was a seasoned executive, but I told her if she doesn’t believe in what is in this book, don’t come with us. You have to reflect on whether this is in your heart.”
Continue the challenge
Employees stay motivated to strive for goals when they are constantly challenged by management to test the boundaries of their capabilities. It’s something Whitmore has kept in mind as he has continued to fashion a future direction for AlliedBarton.
“One thing I always try to be clear about is that ‘Dare to be Great’ is exactly what it says,” Whitmore says. “I’m daring you to do something great. I’ve had competitors say to me, ‘You guys think you’re great,’ but that’s not the idea. We’re the first to admit that we’re not perfect. With 55,000 employees, not all of them does the right thing or gives 100 percent every day. It’s about challenging everyone in the organization to be great.”
Whitmore says that mindset should be at the core of every leader’s thinking, if a company is to stand any chance of growing and thriving.
“It is at the core of everything we do in leadership,” he says. “You walk in every day and say to your employees, ‘I want us to be better and better.’ I’ve been here a long time, and I come to work every day trying to think of ways that we can better this business today. What can we do differently? What new thing can we try? How can we enhance what we do? And that’s generally the feedback we get from our clients, as well — that our managers come to work each day asking how we can improve our service, better improve and develop our security officers.
“It’s fundamental. I don’t care if you’re running a single McDonald’s restaurant or General Electric. You have to come to work every day and challenge your folks to do better.”
Developing a culture of continuous improvement is so integral to the process of strategic planning, Whitmore says he has trouble separating the two when it comes to explaining how AlliedBarton does business. Without driven, motivated employees, your strategy will never bear fruit. Without a strategy as a structure, your employees will have nothing on which to focus their efforts.
“It’s just at the core of everything we do,” he says. “In order for us to meet our goals, in order for us to build our business, none of it is going to happen without the desired culture in place. You can say you’re going to be anything you want. Without the culture for it, you just can’t do it. We could just work on selling contracts and making money. But one of the reasons you see us going from a small regional company 10 or 11 years ago to where we are today is our belief that the financial results will happen if you do all the other things well.”
To point your company in a given strategic and cultural direction, you need raw materials in the form of good people.
Finding the right people for the job at AlliedBarton — regardless of what the job is — means finding people who have a high emotional IQ.
If your IQ is a measurement of your capacity for head knowledge, your emotional IQ is a more ambiguous measurement that takes the temperature of your softer, people-oriented skills and traits.
“We mean people who are good at dealing with individuals, who are willing to take responsibility, who are oriented around growth and can make a connection with people,” Whitmore says. “People who can show leadership skills.”
Whitmore and his leadership team promote teamwork and attempt to heighten the collective emotional IQ throughout AlliedBarton through the company’s training and continuing education programs, where leaders emphasize the concept of building a collaborative culture around the company’s strategic goals.
“Sometimes I get complaints because we have too many people working on different projects,” Whitmore says. “But I like it because it’s what drives our culture. We have a class here called ‘212,’ which is a reference to the Fahrenheit temperature at which water boils. I once went around asking people how long they had been coming to the classes, expecting them to talk in terms of weeks and months. But one person had been going for five years. The person was a former operator who had moved over to the sales side, and one of the reasons they kept coming back was the number of people who stepped up and volunteered to guide and advise.
“Those are the types of things that become voluntary when they become a trait of your culture.”
Whitmore likes large numbers of people working together on projects because he feels it is critical to the culture to have people in different disciplines and locations working together toward common goals and developing a mutual understanding of what is happening in the departments and locations of their project-mates.
“You get interdisciplinary groups of people working together on projects, processes and initiatives, and that breaks down the silos that can develop in an organization,” Whitmore says. “But I’m not going to kid you, it’s work to do that. You get someone who works in, say, El Paso, and because of what they do, they get very inner-focused. It is something we have to work on all the time, because if we let that go, everything else won’t work as well.
“It’s all because in any business culture, the number one thing — and it’s been said over and over again — is teamwork. If your company is made up of leaders who can work together for a common cause, and who are there for each other in good times and bad, I think those are the companies that survive.”
How to reach: AlliedBarton Security Services LLC, (484) 351-1300 or www.alliedbarton.com
The Whitmore file
Born: King of Prussia, Pa.
Education: Bachelor’s degree in business, Philadelphia University
What is the best business lesson you’ve learned?
Be curious. The world is changing, so don’t get tied into what you do every day. Ask why people do things a certain way. As part of that, do a lot of reading and keep yourself intellectually stimulated.
What traits or skills are essential for a business leader?
Integrity, honesty and being highly communicative. And do what you said you would do — walk the talk.
What is your definition of success?
I think if we meet all of our plans, then it is a win-win-win for customers, employees and shareholders. That is what I define as a success.
For two hours, Tom Reilly sat with Secretary Janet Napolitano, head of the Department of Homeland Security, to discuss the importance of cyber security and how to protect citizens from cyber attack. Today, the threat of cyber attack is an issue that affects more than just big business and government entities, but everyone.
“You read every week about another breach in the industry, whether it’s enemy nation states attacking our power grid, it’s a bank undergoing cyber fraud, credit cards getting stolen or identities,” says Reilly, who is the former CEO of the $181.4 million security and compliance solutions company ArcSight LLC, which was acquired by technology giant HP in 2010. “It’s happening. Clearly the traditional approach to solving security has not worked.”
In light of more high-profile security breaches at companies such as Google and Sony, it is also a problem for which new solutions are plainly needed.
“I talk to a lot of customers who have been investing in security technology for 20 years, spending a lot of money, and yet they still don’t feel secure,” Reilly says.
With technology advancing and changing exponentially, it’s important for companies of all sizes to reevaluate the security measures that they are using to protect their most valuable information, data and possessions.
“What’s interesting is cyber criminals do not distinguish between company sizes,” Reilly says. “They don’t distinguish between industry and they don’t distinguish between countries or public and private sector. They go after the softest target.”
Smart Business spoke with Reilly about how the security landscape is changing for the next decade and what business leaders can do to defend their companies from imminent cyber threats.
For companies that don’t have a risk management strategy, what is the first step in creating one?
I think the first thing is to know, based on your business, what is critical to protect. So if you are a healthcare provider, it’s patient records. If you are utility, it’s keeping up the power grid or protecting customer records. If you are a bank, it’s definitely protecting accounts from account takeover. So you need to identify what is critical to your business that you need to protect. Don’t take just a generic position ? let’s protect everything equally. Protect your crown jewels. Understand where that data, those systems reside and make sure that that data or those systems are well-protected, much more than the rest of your organization needs to be protected.
Which industries are at high risk for cyber crime?
The opportunity in cyber security is a global opportunity, affects companies that are small right up to the largest and it touches many verticals. In every vertical, I can tell you what it is that they want to protect, whether it be intellectual property, it could be financials, it could be customer data, it could be health records or it could be services like the power grids that have to keep power up and phone companies that want to keep phones working.
What are biggest cyber threats?
The most serious risk and the one that can have the most significant impact is one that is called ‘the insider threat.’ And the insider threat is not an attack from outside but it’s an employee in your organization who for one reason or another is a disgruntled employee. Yet you’ve trusted that employee with access to systems and sensitive data. The employee could be disgruntled because they are a poor performer and then they get fired. They could be compromised because somebody is bribing them externally for data, which we come across a lot. Or they could be getting blackmailed, which is also quite common. The insider threat is not only that they have access to the most sensitive information and they can do the most damage, but they are the hardest to detect.
The second area is the theft of intellectual property, and a lot of this is sponsored by enemy nation states who are trying to access intellectual property within companies that have leadership. By stealing intellectual property, you can gain a competitive advantage effectively. Intellectual property could be the designs of a new electric vehicle. It could be the designs of a new plant that’s being built. It could be the spreadsheets that rationalize a bid for a big mining project.
What can companies do to prepare employees for cyber risks?
Continual education is always needed. The reason it’s continual education is cyber criminals are always evolving. They are always introducing new techniques and new capabilities, and they are very, very patient. So they may take six months to a year targeting a specific company to penetrate that company’s network, to get code on there and to have basically sweeper agents that are monitoring what’s happening within a company.
When you start understanding some of these sophisticated things, you suddenly realize that you have to have continual training around what our security policies are, how you provision people to access systems, how you de-provision people when they leave the business. You have to have good rigor in enforcing those policies. You are only as secure as your weakest link. Unfortunately, now the weakest link is not technologies or computers, it’s employees often making inadvertent mistakes and bringing in malicious code into the environment.
How do risk management tools identify cyber security threats differently for businesses than other approaches?
It allows them to measure the amount of risk that they are taking or that they have in their IT environment. And once you can measure risk, you can invest money wisely to reduce or mitigate risk. So we’re changing the discussion from ‘Are you secure?’ to ‘What’s your risk posture?’ You can now look to a chief security officer and say, ‘What’s your risk posture? What’s your risk policy?’ and they can answer that concretely rather than ‘Are you secure?’ which is usually a yes or no. So risk deals with the gray.
What about security intelligence?
One of the assumptions you have to make to really effectively use security intelligence tools is you have to assume that you have been breached and that your network has malicious code or malicious users on it. Your job is to go discover them.
So if you assume that your perimeter has been breached and that either you have a malicious user inside or you have malicious code on your network and you say now I have to go find it, then that’s how you use security intelligence tools. You start listening and monitoring network activity. You start modeling how users use the system for the normal course of business, so that when anomalous use is occurring, it stands out.
How to reach: HP Enteprise Security, (888) 415-2778 or www.hpenterprisesecurity.com
William J. Abbott was concerned that Crown Media Holdings Inc. had lost its way. The company, which operates and distributes Hallmark Channel to more than 87 million television subscribers, didn’t seem to have a clear path that it was following to achieve success nor did it have a clear idea of what success looked like.
“We would come up with all kinds of different reasons to pursue an endeavor that might not necessarily enhance that singular focus,” says Abbott, the company’s president and CEO. “The biggest challenge I faced was getting everybody on the same page in terms of what our corporate objectives really are. Especially in the entertainment industry, that can be challenging and difficult in that different entertainment companies sometimes have different focuses and different points of view on what’s really important.”
Abbott wasn’t new to Crown Media. He had spent nine years running ad sales and this experience had provided a window into how the different parts that made up the 170-employee company functioned.
“Previous regimes were always focused on the bottom line,” Abbott says. “I just think that the path to profitability and the path to success were pursued differently and with a different vision. For example, producing volume as opposed to being more targeted in terms of what we produce would be an example of a strategic difference.”
Abbott wanted to change that. His goal was to instill a strategy and a sense of purpose to let everyone know what they were doing and why they were doing it.
“It’s delivering a hard-line business approach to a bottom-line driven emphasis,” Abbott says. “If it doesn’t deliver something for the bottom line, our point of view now is it doesn’t make sense for the business.”
See who fits
Before he could begin plotting this new strategic focus for Crown Media, Abbott had to look at the people who worked for him and determine if they were a good fit.
“The first thing you have to determine is that you have the right team in place that is willing to buy in to a new set of strategies and is willing to pursue things a little bit differently,” Abbott says. “It’s an analysis of the team that you have and ensuring you have the right people on board.”
Abbott knew things about a lot of the people on his team from his experience at the company. But he had to set that aside and gather input as to how they would fit into this new initiative.
“That’s probably a 100-day process of really learning exactly where they have been, what their framework for decision-making is and what they draw on from their experience in terms of how they approach their day to day,” Abbott says. “You don’t want to make snap judgments around looking at someone’s resume and deciding they don’t have the right experience to get where you want to get to. It’s living through the day to day for three to four months. That’s what you need to do to get a sense of their thought process.”
You’re looking at relationships and how people function with each other rather than just trying to appraise the skills of an individual.
“It’s seeing what their relationships are like with other team members and people in their group and in their departments,” Abbott says. “The story is told pretty quickly that way versus any kind of evaluation or fact finding that I would do. It’s through their interaction with others that ultimately tells the tale and the respect or lack of respect they have with other leaders.”
Your observations should not be gathered by planting yourself in someone’s office and watching people work.
“That’s the last thing you want to do,” Abbott says. “The evaluations you make really don’t come through wandering around and talking to people. That creates way too amped up of an environment where it becomes an us-versus-them mentality where everybody is fearful when you walk in their office.”
You’re not trying to size them up on an individual basis, which is often where that pressure comes from. You also shouldn’t necessarily be worried about how they respond to you. It’s the way they interact with others, and with their direct supervisors, that will tell you what you need to know.
“It’s the respect they have in the marketplace, their knowledge overall in the business and their ability to function as the leaders in the organization that are much more important than any one or two questions that you might ask them when they are having a bad day or just got off the phone with somebody else,” Abbott says. “I’m not a big believer in how conversations go in the hallway at 5 o’clock at night or 9 in the morning. It’s a much bigger landscape that you need to look at.”
Talk to your people and gather impressions about how they function as part of a team. Ask about others too and see what you learn.
“Who could say, ‘I’m willing to sacrifice my own personal objectives for what I believe is a philosophy or strategy that results in a good product,’” Abbott says. “It’s having that candid, honest conversation that will begin to help you make that determination about who can get there and who will have more trouble.”
Explain what you’re doing
Abbott learned that he did need to make some personnel moves at Crown Media to get the company on the course he believed it needed to be on. Those changes can be tricky to make as you want to do it without rocking the foundation too much for those who aren’t leaving.
“I don’t know that there is a way you can do it without creating some questions and some sense of trepidation,” Abbott says. “It’s a vigilant communication to the employee group of how well they are doing and how much they are valued. Be as present as possible and as visible as possible and try to reassure people, even on a one-on-one basis, that they are valued and very good at what they do and that they have a bright future in the organization.”
You can’t make the moves and then expect to instantly move on as if the changes had never been made.
“To make changes and not really give a very strong explanation as to why and leaving people in the dark and questioning … is very poisonous,” Abbott says. “You need to overcommunicate and be very clear and as approachable as you can possibly be. At the end of the day, everybody is a human being and they have families and responsibilities and hopefully they work to live and don’t live to work. You’re dealing with peoples’ livelihoods. You want to be sensitive to that fact.
“Not only does it make sense from a business perspective to have an environment where people flourish and like coming to work, but also from a personal perspective. If you’re going to run an organization that has integrity and have people who thrive personally, that’s just the right thing to do. There is a responsibility of leadership to put people in the right places and try as best as you can to ensure their confidence levels are high with what they are doing and that they can feel good about the job they do when they go home at night.”
Get the ball rolling
Abbott did not wait until he had made his personnel moves to begin formulating a plan to create better strategic alignment at Crown Media.
“When I took over, I knew exactly where I wanted to go,” Abbott says. “So I didn’t have to spend a lot of time fact finding or searching for what a strategy might be to make it successful. We were able to roll something out pretty quickly.”
You need something to present to people that shows you’ve done your homework on these big changes you’ve been talking about. But at the same time, you have to show people that they have an opportunity to influence the changes that are going to be made.
“Judging what makes successful television is in the eye of the beholder,” Abbott says. “Through the course of conversations, there will always be that type of creative tension which I think is good and I think it just needs to be solved through talking it through. At the end of the day, hearing what makes the most sense for the brand and for the business is what the ultimate gold star is in terms of making that decision. We view everything through that lens, which makes the decision-making a lot easier than it would be if we were just trying to evaluate something for art’s sake.”
With that in mind, Abbott called on his department leaders to meet with their people in groups to have more intimate conversations about what was happening at Crown Media.
“We don’t put everybody together in one big town-hall meeting, but we have smaller town-hall meetings,” Abbott says. “Communicating that message on a level where you have as few people in the room as practically possible is a strategy that is important. If you’re in an organization that’s too big, it’s absolutely incumbent on the leaders of the divisions to really be the messengers and deliver the news and the new strategy in a compelling and coherent way.”
If you’ve made good personnel decisions, the plan should begin to come together fairly quickly. But there is, of course, no sure thing in business or in any aspect of life.
“At some point, you’ve done the best you can,” Abbott says. “There is a level where you have to have confidence. There is a point in any senior management team’s development and evolution where you make decisions and then you just have to believe in your vision and relentlessly pursue it and make it work. But there is no such thing as a sure thing. You have to have that confidence and a little dash of hope as well.”
The successful execution of these steps is in large part based on your ability to be honest with yourself about your abilities and those of your people. If you’re unwilling to make the tough personnel moves when they need to be made, you’ll have a tough time moving your business forward.
“You have the wrong people in place and you’ve got to make changes,” Abbott says. “There’s no room, at least here in our organization, for people who at the end of the day can’t walk away and learn how to have meetings where they are productive and there is the proper amount of respect given. People need to be mindful that they have colleagues as well who are working for the common good. I’ve been on some of those teams, so I understand what that dynamic is like. It’s not a fun place to work and it’s certainly not a productive place, because you don’t have the type of dialogue necessary to move the business forward. It’s the leader’s responsibility to make sure the team is restructured so that it’s part of the culture.”
The numbers at Crown Media are trending upwards. Revenue grew to $287.3 million in 2010, up from $279.6 million in 2009.
“It’s really that consistent buy-in that we’re all singing off the same song sheet,” Abbott says. “We all really have in our minds where we want to be, not only this year, but in three to five years. Historically at our company, that hasn’t always been the case.”
Fair or not, the burden on making the tough call that sometimes has to be made to grow your business rests with you.
“Ultimately the leader is accountable and the leader needs to make changes so that he or she brings in the right people where that environment doesn’t exist,” Abbott says. “So yeah, ultimately the fault with the leaders. But individuals are responsible for their behavior and it’s a plague on both of their houses at the end of the day if the organization continues to operate in that kind of manner.”
How to reach: Crown Media Holdings Inc., (818) 755-2400 or hallmarkchannel.com
The Abbott File
Born: Manhasset, N.Y.
Education: English and political science major, College of the Holy Cross, Worcester, Mass.
What was your very first job?
Maintaining tennis courts at a country club. They were Har-Tru (clay) courts so they had to be swept and various things had to be done on the courts that aren’t typical of your typical tennis courts.
What is one of the biggest misconceptions people have about the TV business?
Why shows stay on the air and why they get cancelled. There is a definite bottom-line formula that determines the success of a show and the genre, and that isn’t always necessarily understood.
Do you have a favorite TV show?
In terms of quality and star appeal, the Hallmark Hall of Fame over 60 plus years has been a franchise that needs no introduction to the vast majority of Americans. It has served a vital purpose in the television landscape for a very long time. It continues to endure and do very well.
What is the best advice anyone has ever given you?
Work hard and be prepared. It sounds pretty basic, but preparation is so key to your success or lack thereof. Every day when you wake up in the morning, you decide whether you’re going to be successful that day or you’re not just by the nature of what you decide to do. Being empowered like that and knowing that it is a choice is very good advice.
Linda Henman has helped a lot of CEOs over the past 30 years. But in 2006 when she was asked to help another one, this time at a $1.5 billion publicly traded company in St. Louis, she felt like something was missing in her tutelage.
“I remember wishing I had a book I could hand him that explained all about being a CEO that no one had taught him,” says Henman, an executive coach and author. “What does a brand new CEO have to know that no one has taught that person in any other job?”
Henman took the most important of those missing pieces and put them into “Landing in the Executive Chair: How to Excel in the Hot Seat.”
What is the biggest thing a CEO needs to know?
When you’re the CEO, the people who report to you have to be excellent. They can’t be above average or pretty good. They have to be excellent and exceptional. If they’re not, nothing else is going to work.
What is your advice on making sure you have excellent people?
Look at the aptitude of the person. The ways I encourage people to evaluate aptitude are first of all, ask whether or not this person can make unfamiliar decisions. Then ask yourself if this person can learn quickly. And third, ask yourself does this person understand how to make sense of the numbers?
What has surprised you most in working with CEOs?
So many people are running companies who lack strong analytical ability. So often it doesn’t show up until the person gets promoted to the C-suite. But then it does show up and people don’t understand what to do with it. They just understand the person is not executing. They don’t understand why.
How do you get through that?
You just cannot expect every day to be a good day. That’s unrealistic. When you have thousands of people counting on you and there are so many locations and so many products and services that you offer, something is going to go wrong somewhere every day. You just have to learn to put that in perspective and roll with the punches. You have to realize you have to have good people to handle those kinds of things so you can keep constantly focused on the big picture.
How helpful is your book for CEOs who aren’t new to the job?
Two of the most important chapters for experienced CEOs will be the strategy chapter and the succession planning chapter. I tell people I help leaders tie talent and strategy together. That’s the key. If you get those two things right, the rest of it seems to take care of itself. But the experienced CEO often will not realize the role he or she should play in planning succession and tying that to what you want to do for the long range or the next three to five years. The two of them have to go together, talent and strategy.
Is it because they can’t look past today?
That’s a big part of it. The other part of it is that they are so busy running the business, they forget one of their primary responsibilities is to build the bench. So they just don’t take the time to do it. I’ve never heard a direct report to anybody say, ‘I get more feedback than I want.’ Those words have never been spoken. But continuously I hear, ‘I wish my boss would let me know what he or she is thinking. I just don’t know.’
How to reach: Henman Performance Group, (636) 537-3774 or www.henmanperformancegroup.com
Uncertainty looms on the horizon for many corporations fighting to move forward through our present economic climate. Small and midsized businesses are faced with considerable challenges, and many of them are finding themselves in transition phases without the promise of growth that only solid leadership can bring.
In such situations, action is the key to success. Time is precious, and money is generally short. Having the right CEO often climbs to the absolute top of the priority list. Finding this person, however, can be a daunting task. Utilizing an interim executive is a smart — though often disregarded — option to propel a company from a static, transition position to a forward-focused phase of growth.
An interim executive is an experienced, unbiased top-tier business leader. His or her career is filled with four- to six-month stations in the CEO position for companies that don’t have the internal talent to recruit from within or the time or funds to recruit from the outside. Interim executives have years of experience conquering myriad common business roadblocks; time is on their side, and politics are rarely in their way.
Strategy and objectivity drive an interim manager to success. Chances are they powered through a similar situation in their last position. Whether they may be called on to replace a sudden vacancy, shore up a weak/inexperienced management team, mentor an inexperienced leader or even shut down an ailing business — they have seen it all.
Furthermore, interim managers do not require time to transition themselves into their temporary role as leader but rather hit the ground running implementing appropriate strategy and moving their temporary company forward. Case in point, a diversified telecommunications, real estate and transportation company required a management team to address its troubled telecommunications subsidiary. The team’s job was to step in and solve problems quickly, without mistakes. In a matter of days, with the hiring of two interim managers, an experienced CEO and CFO were in place to refocus the business and reduce capital spending and operating losses, enabling renewed focus on regional top-line growth.
In a different situation, a company had earned more than 50 industry awards, yet like hundreds of other Internet companies, it was burning through its funding. The interim manager who was brought in as a CEO to rescue the business, and who had taken over and turned around at least 10 companies prior, got results right away. He rewrote the business plan, refocused the product from a one-size-fits-all commodity to a strictly custom model, cut staff and refocused the sales effort. With that done, he re-energized the board, negotiated new critical partnerships and raised $9.5 million in new funding.
Because an interim manager has no interest in morphing into a full-time CEO for one corporation, they are able to see and, therefore act, objectively. This objectivity ensures that their mentorship and guidance is genuine. Their leadership comes from the best interest of the company, not the best interest of any one individual. Likewise, a team atmosphere is better developed from the leadership of an interim manager, as he or she poses no threat to the careers of existing management.
While an interim manager forges through crisis management, the company can simultaneously extend its efforts to recruit a new, permanent leader. This leader, thanks to the use of an interim manager, will not have to sacrifice any relationships with new employees due to hard, but inevitable, decisions required during transitions. He or she will instead be received in a positive light, ready to move his or her new company into a full-fledged phase of growth.
Roger Sweeney is the managing partner of SMB Operating Partners, a firm with expertise in change leadership, providing clients with experienced, high-performance, C-level interim executives to carry out time-intensive assignments in a wide range of businesses. For more information, visit www.smbop.com or call (312) 924-1547.
Three years ago, Mark Adamson was staring at a company that was losing more than 50 percent of its demand in some of its global businesses. It was the height of the credit crunch, and the situation called for immediate action. Adamson, president and CEO of Formica Corp., an $800 million building products company with more than 3,000 employees, had to make quick decisions to help restructure and refocus the nearly 100-year-old organization.
“Fifty percent of our revenue was disappearing overnight,” Adamson says. “It didn’t happen gradually as you might expect if you have a category decline or a major competitor advance; this happened one week to the next. Any of the normal business decision-making processes that you might expect in largish companies, we just didn’t have the luxury of time to go through that. It was interesting watching management resort back to the old techniques of good judgment, having the balls to make a decision quickly based on the data available and just act.”
The business was kicked into survival mode. The company was losing money, losing employees, and no one could help the organization but itself. Since Adamson was a new CEO at the time, he had begun some restructuring just a few months before the crisis hit.
“We had the management team focused on the need to improve,” Adamson says. “We were ready to hit the deck running, whereas I think some companies were hit unaware and took a couple months to react. It really sorted the men from the boys so to speak in terms of the management team. I thought we really went into the crisis, not in good shape per se, but certainly in good shape managerially in terms of our focus and our ability to address it.”
Adamson had to make quick, sound decisions, rally his team around changes and do what he could to keep Formica from succumbing to the recession while positioning the organization for future growth.
The financial crisis has forced businesses to throw out the old ways of decision-making and implementing changes. It’s a new game, and if you don’t act quickly, you lose to those that do.
“I think the biggest challenge was to react quickly,” Adamson says. “In some respects I’d rather have made an 80 percent correct decision than none at all because the level of need at that time was huge. You needed people that come with a focus and were bright people, intelligent people who could make quick decisions and execute them quickly, and I was fortunate enough to be surrounded by enough of those sorts of people that, within six months of the Lehman situation, we pretty much found a level. The base of earnings was established — it wasn’t good, but it was a base of earnings.
“Those six months during the credit crunch was like triage. You had a patient wheeled in from a traffic accident and there’s blood everywhere. You just have to stop the bleeding. Once you got the patient stabilized … you really did have to redesign your business model for the new edge. The five years of boom — where if you wanted to argue, a fairly average CEO could run a company and make money — was over.”
In any situation where quick decisions and changes are necessary, you have to be able to rally your team together, analyze data quickly and confidently, and make a decision without second-guessing yourself.
“I always find it useful to look to the sporting world for advice on management,” Adamson says. “Alex Ferguson, the manager of Manchester United, is really good at creating a kind of siege mentality — us against the world. I think we did manage to create that internal need where everybody pulled together against a common enemy, which was the economic woes. To do that however, you have to be able to look the people and that team in the eye, and it’s very difficult to do that if you don’t act quickly.”
In order to implement necessary changes and move forward, you need to have the right team in place to do so.
“Unfortunately, you do have to release people,” he says. “You do have to very quickly gauge the people that you think will be at your shoulder acting in a way that you think will get you through the recession. It’s not always the guys and girls who are good at managing status quo. I released some very sound senior management who had served us well in the past but who I just didn’t think were going to get us through the difficult times. You have to have balls, and you have to be cruel in some cases and release those people and create the team that you think will get you through.”
Adamson stopped Formica from bleeding and turned his focus to creating a company that could live on leaner times. Companies have to be able to adjust business models appropriately.
“Having kind of saved the business, it was a matter of growing the earnings with flat revenue,” he says. “I think during the good times a lot of businesses had extended their products, grown their SKUs and grown their product portfolios. What we did was we stripped the product offer right back to what we genuinely thought the customer wanted and needed because during that time of boom, people didn’t talk to their customer base enough. I think a lot of companies during that phase became internalized and just assumed what customers wanted.”
If getting past the survival stage isn’t hard enough, it’s crucial to keep plugging along to restructure what is no longer working and determine where you want to go.
“You’ve got to have people with intellect and experience, some young ducks and old heads, and quickly come up with a destination,” he says. “The key is the destination. There’s always enough brains in an organization to work out how you’re going to execute to get there, but determine where it is you want to get your business. It may be in phases like we did — survival, restructure the business model and then grow. You shouldn’t have 20 phases, but you shouldn’t have one so big that people can’t get their head around it. Break it down into phases of 12 to 18 months. People can get their head around that in the business.
“You then have a rallying call and you can say, ‘In the next 18 months, we’re going to do this. This is what success looks like and this is what happens after that.’”
Part of forming a new destination for your company in a time of restructuring is seeing the positive.
“We were able to paint a picture of what the business could become and in some respects turn the recession into a positive,” Adamson says. “You explain how it would enable us to make the decisions that maybe in the past we wouldn’t have been empowered to make. Our parent company gave us an awful lot of autonomy and leeway to make big, quick decisions and some of these decisions in truth may well be decisions we’ve always wanted to make, but we didn’t have the bravery to do so. This was an opportunity to actually do stuff that historically we might have shucked.
“I don’t want to talk so warmly about the recession, because it was ugly for a lot of people, but it was a great enabler to allow you to do all sorts of things that you might not have otherwise got away with. Any manager that didn’t take advantage of that should be shot. See it as an opportunity.”
During such a time of unrest and uncertainty, you have to remain strong and confident or your employees will lose confidence in the changes.
“I look back now and the management team and I used to walk around smiling,” he says. “People take their lead from the senior management. If you walk into the office every day with a face like a fiddle, looking as if you’ve got the weight of the world on your shoulders — it surprised me in my early days of senior management just how much people would base their rumor mill and their views and emotions on how I looked in the morning when I came into work. You have to be cognizant of that. In times of crisis, do a lot more walking around, a lot more smiling, a lot more talking. People need reassuring.”
Once you have decided on a destination to take the company, make sure you keep everyone in the business informed.
“The ultimate destination was a stronger company with a platform for growth was what the objective was,” he says. “Once you’ve established that destination, very frequently measure against it and communicate. Don’t leave people in the dark.”
Re-evaluate customer relationships
Adamson knew that for Formica to restructure and return to growth, he would have to change how the company worked with its customers.
“What we did was we were very honest and we went to our customers with our assessment of the profitability of that customer, and in some cases, we don’t make money on you,” he says. “We were very pleasantly surprised in how that honesty was repaired with the customers and nobody wants to be a loss-making customer. We were able to work with them and said, ‘Well, one option is to increase price, but it’s really an option of last resort, because you’re in the recession as well and you’re suffering and we don’t want to do that to you. What if we supplied you once a week instead of twice a week? What if we reduced your product offer? Do you really need all these range of products? Could we not reduce that and still be able to give you the chance to fight in your marketplace?’
“As a result of that, we reduced the number of SKUs by over 50 percent. We rationalized our shipping routes, and by and large, we achieved fairly significant increases in profit without necessarily relying on the old levers of just trying to jam the customers with price or slash cost.”
Having engineered the business after the immediate recession to be what they thought was cost efficient, the company generated more revenue out of the customer base and doubled earnings in an 18-month period. To return to growth mode, you have to look externally.
“For those who have had the foresight to have a base to move on from, it’s about consciously changing your focus from inside to outside,” Adamson says. “The recession did bring us all back internally. It focused us all on fixing our cost bases, restructuring our management and our product offer.”
Formica went through this for a period of about six months. Adamson quickly moved to the next phase and focused on customers, top-line growth and innovation.
“The challenge I now face, which is a very different challenge to cost-cutting and profit execution, is how you grow the top line,” he says. “There’s three ways you can grow the top line. You can sit on your ass and wait for the economy to come back, but we’re not doing that. You can convince your existing customers to buy more or you can go out and find new customers. What we’re trying to do is the second one, which is to convince our existing customers to purchase more from us. A key component to that is innovation.”
To aid in the search for innovation, Formica is trying to get to the customer in the marketplace and understand the dynamics of what they want and what they need.
“I think traditionally people think innovation is R&D. If you throw a load of money at your scientists, keep your fingers crossed, something might come out of the other end. What we’ve said is, ‘Innovation is a virtuous circle.’ R&D does have a role in that, but so does customer need. It’s one thing inventing new stuff, but that’s no good if the customer doesn’t want it or if the customer really wants you to go down this path and not the other path.”
Formica is focusing on gathering feedback from its sales force, customer service reps and other avenues the company has to better analyze data on what customers want.
“You’ve got to be able to analyze the feedback and see trends.”
Establishing trends in the marketplace is helpful, but you still have to be certain that the trends work for both you and the customer.
“The customer isn’t necessarily always right. You have to help him understand what he really needs. We’ve done it before and developed products that in truth people said they wanted and when we went to market with a product it was, ‘We said we wanted it, but we’re not going to pay for it.’
“Make sure you understand what they truly want and what they truly value and are prepared to pay for and put your dollars into developing that.”
HOW TO REACH: Formica Corp., (800) 367-6422 or www.formica.com
The Adamson File
President and CEO
Born: Newcastle, Northern England
Education: Graduated with an honors degree in business and finance from Newcastle University
What was your first job, and what did you learn from that experience?
The government in the U.K. decided it didn’t really have a handle on its roads network and needed to survey all of its major trunk roads (interstates) and they needed people who would walk around all summer with these little wheels and computers and … try to take a digital snap shot of every mile of road right across the U.K. We were given these utility trucks and given so many miles a week that we had to perform and were asked to survey these roads. The speed of execution, the prioritization, setting targets, I guess you could say it all started then. It was an outdoors job and you used to get wolf whistled by all the girls driving passed in cars. It was a perfect job for a 19-year-old boy.
What would you say is the best business advice you’ve ever received?
It was the importance of networking. You’re never too senior to benefit from the ability to make a phone call and ask a favor. The power of networking and communicating is huge.
What Formica product are you most excited about?
There’s the 180fx products. It’s a product that really hit the market strongly and is a product that has the look of real granite — big bold patterns with texture. That’s a really exciting product. The other product is a departure for Formica. Formica’s traditionally seen as an interior decoration product. We’ve just embarked in the last 12 months on a product for the exterior of buildings. All the colors and patterns that you got internally from a Formica product, you can now apply to the outside of the building. It’s called Vivix.
If you were going to remodel your kitchen, what Formica products would you use?
I’m not an interior designer, but I operate in this field so some of it rubs off. I think modern kitchens are quite like contrast. I would probably use two patterns. I would have one on the island and on the island I would use our 180fx product and then maybe a more sedate, darker pattern around the outside with one of our etchings products. That allows the 180fx island in the middle to really standout.
If you’re reading this column you’re one of two people — my mother (who thinks it’s pretty cool that her son is a writer) or somebody who is hoping to pick up a nugget of information to help him or her better run his or her organization. So mom, this column’s not designed for you.
For the rest of you, if you take one idea from this month’s missive and issue of Smart Business let it be this: Unleash your employees.
Do it today. Don’t wait. Don’t run a cost-benefit analysis. Don’t think about the short-term cost. Don’t fret over disrupting the hierarchy. And definitely don’t put together a task force charged with developing a plan for management to analyze and make recommends on.
Recently, I had the honor of having the CEO of a company quote me to me — which can be as unnerving as it is flattering — and his message was just as direct: If you want to be an innovative organization, you must tap into and, just as importantly, use the ideas from everyone within the work force.
For years, I’ve proselytized about the five traits all innovative organizations share — regardless of size, industry or even if they’re a for-profit, nonprofit or governmental entity. Simply put, the third of those five rules is: Innovative leaders build organizational cultures where innovation thrives, and they understand that it does not happen in a vacuum.
So here’s the plan — five items. Start here and then fill in the blanks by personalizing it to each of your organizations:
- Develop lines for open communication at all levels of an organization. (A so-called open-door policy doesn’t cut it.)
- Empower and trust employees to think creatively about how they do their jobs.
- Provide all team members with the tools they need to accomplish their goals. (This may cost some money, but if you trip over dollars to save pennies, you have only yourself to blame for falling short.)
- Allow people to own the ideas they champion. (You’ll be amazed what happens when your team goes that extra mile to see their ideas become reality.)
- Create an environment where those people are able to collaborate with others in order to bring them to life or take them to market. (This will require a mind shift at multiple levels of an organization and may just be the biggest hurdle you face. But it is imperative to tying everything together.)
There you have it, a straightforward strategy, a simple yet powerful plan when executed properly. Now, what are you waiting for? Go become an innovation leader by unleashing your employees.
Can you afford to blow money on marketing?
I can’t either. With a staff of 192 employees, meeting payroll week after week and paying the bills is often stressful in this economy — even for a “big” small business like mine. Sometimes smaller business owners imagine that we have loads of cash lying around to test out new marketing ideas. Not true. The expenses grow with the revenue.
No matter what size your business is, having a well-planned and executed marketing budget is the key to making sure that you continue growing. If you don’t have a marketing budget, you leave yourself open to the trap of not promoting enough or blowing excess money on ineffective marketing. Neither of those will get you what you desire, which is a steady flow of business and revenue growth.
But how do you decide what your marketing budget should be? What goes into determining that perfect number? Well, it’s actually a little easier than you’d think.
Here is a simple three-step equation to determine your company’s ideal marketing budget:
1. Where you want to be
The first thing to do is get out a piece of paper and write out the letters A-D. Now, next to the letter A, write your current monthly revenue (average). For example, let’s say it’s $100,000. Next to letter B, write down your desired monthly revenue (average). Let’s say it is $300,000. So you want to add $200,000 of revenue per month. Now we find out what it takes to get there.
2. Where you are
Now, next to letter C you need to write down what you currently spend on marketing per month (on average). Basically, you need to know how much marketing it is taking to generate the business you have now. Let’s say it’s $5,000.
Once you’ve done that, divide A by C to find out how much each one of your marketing dollars is worth in terms of revenue. In this example, that would be $100,000 divided by $5,000, which makes the revenue value for one of my marketing dollars $20. This is letter D.
3. What it will take to get there
In order to get to my goal of $300,000 a month, I need to figure out how much to increase my marketing budget to allow for that growth. For that, take B and divide it by D. I would divide $300,000 by $20 to get $15,000. So, in order to take my monthly revenue from $100,000 to $300,000, I need to raise my marketing budget from $5,000 per month to $15,000 per month!
That may sound like a lot, but when you look at the payoff, it really isn’t that bad. The tricky thing for business owners is not to give up when marketing doesn’t seem to be working. It is an evolving process. Sure, you can change around what marketing you’re using to make sure it is the most effective. For instance, personally, I have always found direct mail to be the most effective medium for lead generation and growth. But whatever marketing works for you, you have to be willing to keep investing in your marketing budget — no matter what. Every dollar spent on marketing is a dollar that goes toward growth. That’s where growth comes from, and when it comes to your marketing budget, you can’t afford to blow it.
Joy Gendusa founded PostcardMania in 1998 with a phone, computer and no capital investment. Since then, she has grown the company into one of the nation’s most effective direct mail marketing firms, specializing in postcard marketing for small to large-sized businesses. Over the years, she expanded to offer mailing list acquisition, website development, email marketing — all while continuing to educate clients with free marketing advice. She has been named Tampa Bay CEO of the Year, Business Woman of the Year in Tampa Bay and has been featured on MSNBC’s “Your Business.” PostcardMania is an Inc. 500 and 5000 company and has won awards for creativity, best business practices and leadership. Learn more at www.postcardmania.com.
Tom Fricke’s resale cartridge business is part of a multibillion-dollar global printing industry.
Fricke, who has been CEO of Cartridge World Inc. since 2008, has helped his company expand as the largest global dedicated retailer of ink and toner cartridges by taking advantage of the industry’s tremendous growth to build out franchises in new and existing global markets. Operating in 65 countries and growing, Cartridge World generated 2010 revenues of more than $160 million under Fricke’s leadership.
Smart Business spoke with Fricke about how to sustain long-term corporate growth by finding the right business partners and having a responsive leadership style.
What is the challenge of finding good partners in a fluctuating industry?
Our business is changing, the challenges we face are changing, and that change is consistent with the vendors, as well. I think that the biggest pitfall is you find vendors that are right today but aren’t going to be right in a year or two years from now as the evolution of the industry continues. So the biggest thing we’ve looked for is finding those kinds of vendors who are going to be able to change with us. There are some vendors who may have been great today but just weren’t going to be right for tomorrow. I think you are constantly trying to look for those who have the same mindset and the same approach to the future as much as today.
How do you decide who will be the best partners for growth?
The best way to do it is to spend a lot of time with them. I like to get out and meet with as many of my partners as I can. I like to be as open and forthright with them of the challenges we face and the challenges that we’re considering as we go forward. I think that kind of dialogue and that kind of personal relationship is critical as you really start working through your suppliers.
We like to be demanding of our vendors. We like to be fair. We want to make sure that they’re the right kind of partner that has similar strategies that we do. We like to them to be technically very capable. We like them to be very responsive, and we want partners who are going to be as supportive and focused on the franchise network as we are. The best way for us to make all those assessments is to be as interactive with them as we can. So if it’s not me, it’s the local, regional teams or management teams. We like to spend as much time with our partners as we can to make sure that we understand them and they understand us.
How can a leader facilitate a culture that is responsive to change?
To me the secret is you always try to find the balance. … You do what you have to do in order to operate in a new environment, but you also have to be patient. You are struggling between being demanding and being patient. You need to be a perfectionist, but you also need to let people know that it’s OK for them to try new things and make mistakes in the process of making it.
The capabilities of a leader really have to be a function of the environment in which they are operating in, the challenges that they have in front of them, the nature of the system they are dealing with and the business that they are in. I think if anything the leader needs to be multifaceted, because you really need to try and get a feel for all of that. Your style needs to flex and change. It’s really that ability to get in and sense what the business needs, what the people need and provide whatever leadership is needed.
How to reach: Cartridge World Inc., (510) 594-9900 or www.cartridgeworld.com
When Gary Kovacs joined Mozilla Corp. a year ago, the company was on track to release the next version of its browser, Firefox 4.0., with immense anticipation from the user community. While everyone was excited about the 2011 release, Kovacs also saw that approximately 15 months were lapsing between each update. With the increasing speed of innovation, he knew the company couldn’t afford waiting another year or longer to introduce Firefox 5.0 if it wanted to stay competitive. Fifteen months might as well be 15 years in the Internet space.
“What I came in and helped all of us understand, which is something that everybody knew but we didn’t really internalize, is the market’s moving at a different pace than it did even a year ago, and our mission is to lead in the creation of the open Internet that gives the user choice,” says Kovacs, CEO of Mozilla. “Lead means continuing to push new features, new products at a pace that is ahead of others in the market, and we weren’t doing that.
“Coming in as a leader, what I understood and I think everybody understood is that the pace of the Internet is moving at a very rapid rate. We needed to continue to evolve our offerings and our processes and organization to keep up and to continue to lead. That requires some changes and adjustments.”
While Mozilla had already been growing when Kovacs arrived — generating $104 million in revenue in 2009 — his ability to expedite change through his leadership has been instrumental in expanding the company’s scope, offerings and size over the last year. By reenergizing Mozilla’s mission through swifter execution on several key initiatives, Kovacs has made sure Firefox remains a leader in the evolution of the Internet.
Reframe the issues
Transitioning the Firefox browser to a rapid-release cadence was just one opportunity Kovacs saw for Mozilla to move quicker in adapting to the change around it. However, one of timeliest areas he wanted to address when he came in as CEO was how to handle the Internet privacy issue of Web tracking. After many months of going back and forth, the company had still not reached a decision on whether or not to add a “do not track” feature to Firefox 4.0, which would enable users to opt out of being tracked by websites they visited online. So to get closer to a decision, Kovacs says he needed to put the issue into a different context for his 350 employees.
“Sometimes I make the decision and surface it and socialize it with the group,” he says. “Sometimes I just facilitate the decision getting made. A practical example would be on do not track. I asked a question. I felt this wasn’t exclusively my decision to make, but I felt we had to make one. … I asked, ‘What’s stopping us from making a decision?’ — which is a really different question than, ‘What do we think we should do?’ ‘What’s stopping us from making a decision to implement this?’”
When a decision is at standstill, asking people to examine it from a new perspective can help them identify what are the most significant roadblocks and obstacles to progress.
“I call it the yellow car syndrome,” Kovacs says. “You don’t realize all the yellow cars on the road until you buy one, and then you realize all the yellow cars on the road. After you see the behaviors a few times, you start to recognize them. The behaviors sound like this: When a team or a group or a community is debating on an issue, they start covering the same points and then they cover them again. At that point it’s like ‘OK, done. Time for a decision.’”
When the same, familiar answers came back about the do not track feature, Kovacs reframed the issue for his team again, this time as a question of mission accountability.
“I came back and said, ‘Our mission is to lead the Internet where users are in control and choose, and this is an issue with privacy where users aren’t in control” he says. “‘So do we think some solution is going to be needed this year?’”
Everyone agreed it was.
“Then our only question was are we truly going to be a leader or are we going to wait until somebody else develops something and then fast follow it?” Kovacs says. “The former was the only one that felt right to people. I said, ‘OK, then the harsh reality is, we’re going to have to take a step sometime before knowing the final outcome because the answer can’t be created until you take many steps toward it. Let’s take this first step.’”
Sometimes getting people to see the urgency of taking action begins with getting them to think about choices in new ways. Reframing an issue as how it ties into your vision, mission or core values for instance can help people who are caught up in the initial challenges of a decision see the larger value and implications of making a change. Once Kovacs got his people to redefine Mozilla’s mission and vision of leadership, the team recognized the necessity of making changes to execute both moving forward.
“Everybody to the core said, ‘Absolutely. Time to lead. Time to move,’” Kovacs says. “Once we created that highest order vision, which really tied closely to our mission of leadership of the open Internet, then the work of leadership turned into the work of management, just making sure the processes and structures were in place to actually drive what everybody wanted to do anyway. But it was really calling that out and making that something that was visible.”
By redefining the challenges at hand, you can help your team turn the corner to move forward on a tough decision. However, to balance a participative decision-making culture with efficient execution, you have to have mechanisms to hold people accountable to progress. By providing your people time constraints and clear responsibilities, you can give them input and encourage dialogue without letting a participative culture turn stagnant.
“Doing anything where it involves the ‘I’ word — ‘I think’ or ‘We’re going to do this because I say so’ — that’s death,” Kovacs says. “There are organizations that benefit from that type of leadership. It’s not here. That doesn’t mean that you have to be slower than if it was just you, but you have to be much more inclusive in your leadership style. … The second thing that is negative is if we confuse communal with no need for crisp execution.
“People will follow you, but they want to know that you are going to execute crisply, effectively and things are going to get done. You are going to stay true to your word. If you say you are going to do something or the organization says it’s going to do something or starts to do something, they’ll do it. So the execution, the metrics around that, the processes around execution, getting things done is really critical. And the negative, of course, is if it’s just sort of arm-wavy and nothing gets done.”
If you want to remain competitive, you can’t afford to let your organization stall in its decision-making. Ensuring decisions are made decisively is easier if you set parameters to steer people toward the end result by keeping everyone accountable to progress.
After asking each of his senior leaders if a week would be long enough to research the different aspects of a do not track decision, Kovacs gave them the time period to investigate the issues and then report their findings to the rest of team. He also set a two-week time limit on the final decision. In two weeks, a call would need to be made one way or another. When the team regrouped before the deadline, it reached a decision in favor of the Do Not Track feature.
“Then we moved right to ‘OK, let’s talk about how we are going to execute this over the next three weeks,” Kovacs says. “‘How are we going to communicate it? How is it going to get built into the product? Who is going to own each piece?’ We put a dashboard of operations to it. That’s my approach. You give people an opportunity, but you don’t give them an infinite time to exercise their opinion. You time-bound it, you make it specific, and then you execute based on that.”
Explain your reasoning
If you were in Mozilla’s corporate office, you would see huge boards and monitors constantly rolling user feedback from mechanisms built into the Firefox product, beta channels and its external channels pushed out into the user community. Mailing lists, briefings and community meet-ups that Kovacs attends also provide ongoing consumer feedback to help the company make decision about its direction and product.
Yet while Mozilla relies heavily on input from its user community, Kovacs understands that the company is never going to please every one of Firefox’s 400 million users with a decision.
“If I make a decision or send an email or think through a strategy or even ask an opinion, I’ll get a wide range of feedback that will be everything from, ‘Hey, that’s great. I love it,’ to really in-depth how it could be better, to ‘You’re an idiot, and I’m not sure why you are leading that organization and that’s the dumbest thing I’ve ever heard,’” Kovacs says. “If you are uncomfortable with who you are and uncomfortable receiving that kind of feedback in as plain form as it comes sometimes, it’s not going to work.”
Although it’s probably impossible to have every customer back your decision every time, when you communicate why you made it clearly and assertively, you make it easier for people to meet you halfway and buy in to it long-term. That’s why once Mozilla decided internally to implement its do not track feature — being the first in the market to do so — Kovacs made sure the company reached out fully and transparently to its user community, using every one of its community touch points to explain and discuss the reasoning behind the decision.
“We posted,” Kovacs says. “We blogged. We helped them understand our rationale. We shared all of that, and we expected some to be upset with it. What came back was ‘I’m not happy that you did it, because we don’t have the full solution, but I really get why you did it and once I understood it, I think it was the right thing.’
“You can’t manage by averaging the opinion because then you please no one. In the end, there is a judgment call that needs to be made. What we have learned and what I certainly have learned and has been reinforced … is people will accept a decision. They’ll accept a judgment, but what they also expect is that you’re clear about how and why you made that decision.”
In order to inspire confidence in the long-term vision of growth, transparency is critical. Even if people don’t agree with some decisions you make, if you are clear that you have the mission and core values guiding your choices, they will be able to buy into your judgment as a leader.
“People see you make those decisions – and we’ve made lots of them in the last six months – where we’ve had to say this might result in more revenue, or might be more interesting or might move us in a better direction short-term, but it wouldn’t be good for the mission so we don’t do it,” Kovacs says. “The mail that we get back constantly is ‘Way to go. Way to stand up.’
“You have to be comfortable servicing that point of view, comfortable taking feedback, but the most important piece then is over some period of time, and not too long [saying], ‘OK, we’re going west and we’re going west for these reasons. I’m going to communicate it openly ? but we’re going west.’ Then sometimes there is sort of a hailstorm of negative feedback and you have to push through it. If you believe and you create that belief for the right reasons, then you push through it. It works.”
How to reach: Mozilla Corp., www.mozilla.com
The Kovacs File
Born: Toronto, Canada
Education: completed undergraduate and graduate degrees at the University of Calgary
Who are your role models for success?
My father — due to his outstanding integrity, fairness and keen ability to clarify thoughts — and Lou Gurstner. I admire him for his steady resolve, absolute simplicity and clarity of thought in the face of tough obstacles. I also find Reid Hoffman extremely inspirational as a leader.
Who were your mentors in transitioning to the role at Mozilla?
I had some of the greatest people who have led major organizations and major missions both in the Valley and globally. I’m very pedantic about this. I sat down with them prior to coming to Mozilla. I asked their opinion. I involved them in the decision and then I put the touch on them. I said, ‘Look, I’m going to need help and perspective, and I would love to be able to come to you. I gave them a frequency — we’ll have a glass of wine or we’ll have a dinner — and I’m going to be thoughtful and mindful of your time. I think I can give something back to you. So we created a little bit of a mentorship agreement. When I faced some of the toughest challenges or decisions or issues, I relied on the mentor network to help me navigate through them.
What can California do to create a better environment for business?
We have to improve our fiscal plans and budget in order for businesses to be more effective. I think as a state we need to take steps to make major improvements to the primary education system in California. Great education is fundamental to the success of future generations.
What is one part of your daily routine that you wouldn’t change?
Every morning, I get to enjoy my first cup of coffee with my family. This helps to keep me grounded and allows us to spend quality time together. Also, some sort of physical activity is essential in my day to day.