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Neil Mortine needed to show people that he had a plan. It was something he needed to do three times in 2010 as Fahlgren Inc. made three acquisitions to its business.

“You have to be able to convince people that you’re taking them somewhere good, somewhere that is a better place,” says Mortine, president and CEO at Fahlgren Inc. “You have to have clear goals and plans of where you want to go and what you want to achieve. Then it’s not that hard.”

Mortine’s 160-employee public relations firm has added Edward Howard & Co., Grip Technology and, most recently, Sabatino Day Inc. to its organization in 2010. One of the biggest challenges that comes about in acquiring a business is integrating the two cultures.

Fortunately for Fahlgren and the companies that were joining it, cultural integration was part of Mortine’s plan in each case.

“Culture is king,” Mortine says. “It is the primary driver for what we’re doing. … If the culture is not solid, I don’t know how it all hangs together.”

Mortine initiated the creation of cultural integration teams that would be made up of employees from both Fahlgren and the company it was acquiring.

“We wanted to have people involved that really understood our culture,” Mortine says. “We didn’t want it necessarily to be the senior executives. We wanted it to be people that had spent some time here, maybe some of the ones who had come to us just out of school but were still young in their careers, up-and-comers and overachievers. We purposely put those people on the team on our end. We asked the executives at the other company to do the same.

“The executives are always talking before, during and after. But we wanted the rank and file to be talking to each other just as fast as possible. We put the teams together and introduced them.”

When you put together teams for anything, be it cultural integration or some other special project, you need to empower that team to do its job. It can’t just be for show.

“Give people the ability to fail and the opportunity to be heard and to go out there with ideas and not be afraid of failing,” Mortine says. “Empower folks and act with a sense of urgency and give guys a freedom and authority to take action and influence change. We support that. We give them tools and resources they need and the confidence to stand up there. Part of what I need to do is build leaders that can move this thing forward after I’m done with it.”

You’re looking to convince people, especially the ones at the company that you are acquiring, that you’re not simply imposing your will on them.

“We told them it wasn’t going to be our way or the highway,” Mortine says. “We were looking for recommendations to make us even better and stronger. We didn’t want to force anything down anybody’s throats.”

Make sure the team members meet on a regular basis and feel free to check in on their progress. But for the most part, let them do their job.

“We gave them parameters of what to look for,” Mortine says. “But the ones we selected, we knew their credentials and we knew why we wanted them on the team. They would dig for information, they were collaborative and they were our overachievers.”

If your team comes back with ideas that you’re not sure about, don’t just reject them without consideration. That power and freedom to fail is something you need and your people need in order to achieve success.

“That’s what life is all about,” Mortine says.

Reach out

Neil Mortine has been on both sides of the table when it comes to business acquisitions.

“Fahlgren acquired my company eight years ago, so I know what it’s like to be acquired,” says Mortine, president and CEO at Fahlgren Inc. “I know what it’s like personally to be part of a new team.”

With that experience, Mortine also knows what it’s like to be the CEO one day and an employee at someone else’s business the next.

“It can be pretty emotional,” says the leader of the 160-employee public relations firm. “Try to work through the title and roles and responsibilities very early on to see if they are interested. ‘Here are some new areas you can work in that can be exciting now that you don’t have so many administrative responsibilities. Can we take advantage of all that you’ve learned and your relationships?’”

If the person seems open to working with you, do yourself a favor and listen to what he or she has to say in terms of ideas for the business.

“I tend to come off a lot smarter to people if I’m quieter and just listen as opposed to just putting my opinion out there on day one when people meet me,” Mortine says. “People want to work with me a lot better and a lot more closely if I give them the lead and let them talk a little bit and give their point of view and ask questions.”

How to reach: Fahlgren Inc., (800) 731-8927 or www.fahlgren.com.

Published in Columbus
Thursday, 31 March 2011 20:01

Jane Mason leads growth at eMason

According to Jane Mason, the founder, president and CEO of software provider eMason Inc., being the leader of a fast-growth company means always having to re-evaluate your strengths and weaknesses, both in your business and in yourself.

“You have to leverage every ounce of leadership and management skills that you have to grow the company — from where we were to here, and from here to the next level,” Mason says.

As a pioneer in offering Web-based business automation services, eMason has achieved 1,702 percent growth over the past three years as well as doubled its work force to 100 employees in just 12 months.

Smart Business spoke with Mason about her strategy for adapting her leadership style to manage her company’s rapid growth and expand the $10.2 million business.

Lead though behavior. My leadership style is very hands on, but I also lead through motivation and by setting an example. From a good leadership perspective, having a clear vision that can be communicated regularly is very important, and I think the most important part is your behavior; leading by example. Our vision includes the words kindness and respect, and that permeates my leadership style. My style is more motivation than it is autocratic. The things that I’ve seen that don’t work are the aggressive, autocratic behaviors and not living up to what you say. I’m very clear and I’m very tuned into following up on what I’ve said I’m going to do, corporate strategywise and with people.

Set your priorities. As we’re growing, I’m modifying my behavior in how I interact with people. I’ve had to step back, and I can’t be involved in all of the day-to-day operational things, because that’s not healthy. That’s not good for our company. I have to keep my eye on the market, on the strategy and on the client delivery. Because there are so many things coming at us personally and through the business, I’ve learned to chunk it down into three pieces and try and accomplish those things each day.

Delegate tasks. Personally, instead of making something happen — I need to make this business development report — I go to the person whose job or role that is to create a business development report. I’ve moved myself away from the day-to-day operations through the hiring of consultants and other high-level, skilled people. I’m letting them do what they do best. It’s a personal struggle in some areas because it’s hard to let go, but through good hiring practices and motivating through kindness, I think we create a level of trust where people are holding themselves accountable and delivering.

Retool communication. The original group of people still meets with me personally, and I meet with the management group, but there are a lot of people now that work here that I don’t know and don’t really communicate with other than my corporate messaging. I do internal videos where I reach out to the company and tell them what are we doing, what are the successes or we’re having some workshops internally, so sign up. I keep them in tune. It’s kind of like an internal YouTube. It enables them to see me if they don’t see me because I travel quite a bit and I’m on a different side of the building now.

Hire people with initiative. We’re an entrepreneurial company at heart, so we want the people that come here to be the best that they can be and we want them to understand that we need them to help us grow and add structure to what we’re doing. Self-initiative and self-responsibility is really important for us. We’re looking for people that can say, ‘I have the skill set, but I’m also honest enough to know that I might not be able to do this job,’ or have the self-responsibility to say, ‘I don’t know how to do that, but I’m going to learn how to do it.’

Focus on your vision. Motivation has a lot to do with the passion we have for our product and what we’re doing. I think employees are motivated by the fact that they are responsible. They can see they are making a difference, and we talk about how they make a difference and how we as a company are making a difference; I think that jazzes people.

HOW TO REACH: eMason Inc., (727) 507- 3440 or www.emason.biz.

Published in Florida
Thursday, 31 March 2011 20:01

Virginia Albanese

Building a leadership team should be at the forefront of developing and implementing business strategy. While the strategy sets the direction of a company, the executive leadership team and those in the manager and supervisory roles are key factors of a company’s future success or failure.

To get it right, start by taking an inventory of your leadership team’s current skills, abilities and experiences, and then match the inventory results to what is required for your strategy. This exercise will reveal any large gaps in talent, or it will display how well your team is aligned to the strategy. In most cases, the findings will be somewhere in between, with many excellent matches and a few people who need retooling for new job positions or opportunities. The key here is to take an honest and realistic view of your leadership team so you can determine where you need to strengthen your talent pool.

Your work does not stop there. Take this same approach with every level of the organization. Leaders at each level must be prepared with the right technical, managerial and leadership skills for executing the strategy with confidence while assuming accountability for the results. The managerial and supervisory positions will likely be the implementers of strategy and change. They can have the greatest impact on achieving your company’s strategic success.

When conducting the talent review inventory, look closely at the team’s diversity. This not only means the traditional gender, race, orientation and age characteristics but also diversity of opinions, perspectives and work styles.

For example, at our company, we use a variety of tools for determining a team member’s development strengths and opportunities. A few years ago, our leaders completed an assessment for improving personal and professional effectiveness. The results gave us valuable insight into how the differing work styles impacted others in the organization. We discovered some leaders loved detail; the more data and analysis the better. They could be counted on to ask lots of questions and needed time to come to a conclusion or take action. In contrast, some leaders trusted their gut feelings and were quick to take action with little data. We had a mix of leaders who required high involvement with others and leaders who preferred an individual work style.

While diversity in style can cause frustrating moments, with education and reinforcement, you can capitalize on the power of having such a diverse group of leaders who complement and appreciate each other.

In addition to examining your leadership pool, you must also plan for the future. This involves more than putting words to a page; it has to involve your people. While you need to develop an actionable strategy with company revenues and profits that project into the next three to five years, oftentimes, a forgotten step is working with the human resources leader. He or she can help build a foundation through succession planning and employee development programs.

I am proud to say that our company has taken succession planning and organizational design to a new level by identifying pivotal jobs necessary for our company’s strategy. While this level of detail is led by human resources, succession planning must be owned by the executive leadership team; they are accountable for the current and future success of the organization.

Upfront work on establishing the right team is a vital first step for achieving the company’s vision and mission. Planning for the future includes staying focused on business metrics, which includes generating revenue, building a strong talent pool and valuing diversity in leadership and work styles. These are the components that pay off in excellent company results and the achievement of your strategic initiatives.

Virginia Albanese is president and CEO of FedEx Custom Critical, North America’s largest critical-shipment carrier. The company provides 24/7 service throughout the United States, Canada and internationally, delivering hundreds of thousands of critical shipments each year. She is also the chairwoman of the Greater Akron Chamber of Commerce and serves on a number of other boards to benefit the Northeast Ohio community, including Akron Children’s Hospital and The Boys and Girls Club of the Western Reserve.

Published in Akron/Canton
Thursday, 31 March 2011 20:01

Allen Keith Construction Co. builds growth

Founded by Dan Hanlon in 1976 under the principles of hard work and dedication to doing a good job, Allen Keith Construction Co. has been continuing to expand and grow its business.

Lonnie Hanlon, Dan’s son, took over as CEO in early 2010, but he has worked at the restoration company since he was a little boy only 10 years old.

“I started out sweeping the floors of the warehouse,” Hanlon says.

He’s now putting all his experience, knowledge and the company’s good name into continuing to grow the 48-employee restoration company.

Smart Business spoke with Hanlon about how he looks to keep growing Allen Keith Construction Co.

What are the keys to being successful?

Basically, it’s just about working hard. If things aren’t going right and you want to be successful, you’ve got to get in here and you’ve got to put time in. It’s about getting out and seeing people and getting involved. You have to make sure you keep an eye on everything, whether it’s a specific construction project or the overall financials of the company. It’s going out and seeing our customers and talking to them and making sure we are doing a good job. You have to also know the trends of your industry. Knowing when your busy season is and being prepared for it is important.

How do you grow your company?

There’s so many different ways to grow. It’s helpful finding niche businesses that relate to ours. Finding a niche is important because it’s tough out there. It’s a tough economy. It’s hard to find places to grow. If you’re the only one that offers something, you can control the market for that and charge whatever you want. By getting into that same business it can cut down costs and turnaround time and allow you to provide better customer service.

We are expanding into southwest Florida. We saw a market in Florida where construction is completely different than construction up here. They move a lot slower, and things are not as professional as they should be. We thought if we could bring the professionalism of Allen Keith and the quality of work down to southwest Florida, then there would be a huge opportunity for our business to grow.

You’ve got to be resourceful in this kind of economic climate. I think 80 or 90 percent of why businesses fail off the bat or when they are trying to grow in new areas is because they have too much overhead. One of the most important things my dad has taught me was to keep your overhead low. We have a 36,000-square-foot facility [in Canton] and we didn’t go down [to Florida] and just go all in and build a huge place. We are starting small and are going to work our way up.

How do you know when and where to expand your business?

You have to take your time when making decisions about new markets. You have to research every aspect and get to know that market. You have to talk to a lot of people. Who are your customers? If you do decide to go to that market, take it slow. Keep your overhead low until there is a need for it. Obviously, once you are growing, you’ve got to add more people to get more production and get your sales up, but don’t go in guns blazing.

How important is it for a company to keep up with technology?

Technology is obviously a very important part of growth. If you don’t keep up with technology, you’ll die. You have to know your industry. You’ve got to have foresight and you’ve got to be able to see down the road — whether it’s doing research or just talking to people.

You have to also know your competition. Look at your competition and see what they do. Are they doing something that you should be doing? Are you losing business because they have a new technology that’s making everyone’s life easier and you’re not doing it?

What can prevent a company from growing?

You have to avoid being shortsighted and not being able to see what’s ahead of you. Whether you’re talking about your industry or you’re talking about your market or the economic climate, not having that vision can prevent growth. If you’re not able to see that someone is doing something that may revolutionize your industry and you’re not on it, the people that do that stuff first can take a lot of your business away from you.

HOW TO REACH: Allen Keith Construction Co., (330) 455-5451 or www.allenkeith.com

Published in Akron/Canton
Wednesday, 02 March 2011 12:50

How to chart a new course for your company

Emerging from the darkest days of the great recession, Richard Bolte Jr. came to one undeniable conclusion: Predictability was gone. It left with the economic downfall in 2008, and it wasn’t coming back.

Change was the new constant for his company, BDP International Inc., and he needed to adapt BDP to deal with the new reality.

“The financial crisis left us with unpredictability and market volatility,” says Bolte, BDP’s president and CEO. “So as a result, it’s a new environment that is volatile and unpredictable, and you have to transform and change, as well. You can no longer serve your market with that business model. Your customer requirements have changed. They’re moving their supply chains around. They’re making different decisions. They’re looking to outsource things they used to do themselves.”

To react to the new volatility, Bolte had to transition his company from a controlled, structured environment to a company that nurtured new ideas, promoted innovation and valued entrepreneurship. It was a dramatic shift for the global logistics solutions provider, which generates $1.65 billion in annual revenue and employs 3,000. It meant not just new processes and policies, but a complete reconfiguration of the way the company collectively thinks.

And to make it all happen, Bolte had to start at the individual level and work his way up.

“The challenge I gave to our guys was, rather than looking at global operations as something that needs to be controlled, you need to ask one question: ‘How can I help you grow?’ he says. “That would underscore and focus the team on transformation, because from a support perspective, it is quite a journey to go from controlling to nurturing.”

Build the case

As Bolte and his leadership team surveyed the damage from the recession, he came to the conclusion that the companies that could adapt on the fly would be the companies that survived. Knowing that, he realized one of his first duties as the head of the organization was to create a sense of urgency around the need for change. He needed a management team that wanted to embrace change now, not a year from now.

“It’s one of the things you need to do as a leader,” Bolte says. “The message needs to keep coming out that we’re not kidding, we believe we need to migrate to these things. We need to change and why. You’d better have a good answer as to why you believe things need to change and why they need to change now. Because even if you get buy-in on change, you might find those who want to change in a year or so. So you need to create that sense of urgency. You need to create a tremendous sense of clarity around why you think things need to change and why they have to happen now.”

Bolte built the case for change by collecting and presenting data to his managers, and then cascading that data throughout the organization. Bolte and his leadership team built a three-year strategic plan that identified where BDP currently stood and where it needed to be in 36 months to maintain profitability. The basic points of the plan were then rolled out to every corner of the organization.

“We came out with a three-year plan that says, ‘As a result of going through this crisis, things need to change, and here are the things we’ve identified that need to change now,’” Bolte says. “Then we communicate that through town-hall meetings, through webcasts, through our management team and senior team. We embedded those exact same messages into their communications. We then developed a strategic plan and published progress as to how we were performing against those changes we had identified.”

The change areas that Bolte and his team identified centered on what he calls “centers of excellence.” Bolte wanted employees in each area of the company — IT, finance, global administration, sales and marketing, and transportation services — to identify ways in which their department could evolve into a more entrepreneurial, innovative team. It was easier for some areas than for others, and in some cases, it took a personnel shift to fulfill the company’s shift.

“Let’s take finance, which is controlling by nature,” Bolte says. “One of the things we looked at is that finance can be a valuable tool to the organization, if employed correctly. It can be a partner to growth instead of a ‘threat to be audited’ kind of mindset. One of the things we had to do was actually look at the people within the organization.

“Some individuals are actually not going to be able to make that leap over to a nurturing environment. We actually had to go out and bring in new and different talent into organizations like finance and IT, who thought in different ways and could accommodate that kind of transformation.”

Even though the organization was shifting away from centralized processes, Bolte was starting to rally BDP around a strong central vision, which required buy-in from people who also embraced the vision, necessitating the need for new blood in certain positions.

“The notion we asked them to embrace is that we need to create an environment that is easy to do business in, where we treat people how you want to be treated, not a highly structured or controlled environment,” he says.

But with that newfound need for entrepreneurship and innovation comes a need for boundary lines. You might not want rules weighing down your people, but you can’t let them innovate themselves into left field, where their ideas do nothing for them or the company.

Bolte harnessed his employees’ brainpower and used it to cement his new culture by turning innovation into a competition of sorts.

“Last year, we actually had a specific program we named BDP Fusion,” he says. “We encouraged employees anywhere in our system to submit ideas for a new business plan. We then held a contest in each region where we picked the top three ideas. At the end, it boiled down to one winner, and we actually implemented that idea as a new business plan. We had contests in three regions and myself and some other senior members went around, and the finalists were able to present to us.

“There was a tremendous amount of energy and excitement around these teams presenting, and in addition to ending up with a great business plan for tank management in Asia, it was very good for morale. A lot of companies say they listen to their employees, but here was visible evidence of a company seeking direction on a new business from its employees. It sends a powerful message that we do listen and we do care about these new ideas.”

Build change agents

You can hire people who will embrace your vision for the future, but until you can fully leverage their ability as leaders, you won’t have much more than passive order takers.

You not only want your best and brightest to get on board with a new organizational direction, you want them to get others on board, too. In some companies, they’re called change agents, but whatever title you want to stamp on them, they’re a critical ingredient in making your vision a reality.

At BDP, Bolte has formalized the process of getting buy-in from his future leaders, partnering with outside resources to train and enable the next generation of change agents.

“We went and aggressively developed what we call a leadership development program involving the top 40 or 50 next-generation-type leaders,” Bolte says. “We did a partnership-type program with [Dale Carnegie Training]. We did a two-week course with instructors from Dale Carnegie, but we also developed a program with senior staff from BDP, where we ran a highly energetic and entertaining two-week session. The energy coming out of that was tremendous.”

The training program goes hand in hand with an internal mentoring program that Bolte and his leadership team initiated. The mentoring program is designed to give potential leaders a wide-angle view of the company by pairing the young protégé with a mentor from a different department.

“It’s very cross-functional in our case,” Bolte says. “We might have the CFO mentoring two people in operations. Or you might have an operations person mentoring someone in the finance department. The mentoring process is a bit better than just identifying top performers. It takes it a bit deeper, because you’re getting direct feedback from senior management members who had these individuals under their wing for the program, which runs six months. So I think you’re developing a deeper understanding of your top performers.”

But sometimes, it comes down to the lessons learned from your years of experience as a manager of people. If your gut is full of experience, it’s OK to trust it sometimes.

“In addition to the processes, don’t be afraid to use your gut feelings,” Bolte says. “Sometimes you’ll get a good sense about somebody, and in business, I think you can trust your sixth sense, so to speak. But other than that, if you do not have a mentoring process or a leadership development program, you should study various forms of those types of programs and consider implementing them.”

Maintain your momentum

Once you have forged a new direction for your company and gotten all of your key players on board, your job isn’t done. You have to keep enforcing the rulebook and reinforcing the behavior you want to see.

In the final months of 2010, Bolte was involved in budgeting and strategic planning meetings for the upcoming year, as many company presidents and CEOs were. But he took the opportunity to reinforce the direction of the company through the budget and planning process.

“These meetings that we’ve been having internally are designed to build complete alignment among the business units and the infrastructure that supports them,” Bolte says. “They all have an agreement that these are the priorities for 2011, this is the order that we hope to accomplish them, here are the critical success factors, and so on. So there are different elements of the plan, and we come together and sign off on it — ‘This is how we’ll move forward as a team.’

“I like the simplistic approach. You don’t need a 51-page strategic plan. You need strategic principles and a two- or three-page paper, and that is really the strategic plan. Because if anything is bigger than that, you start to lose people.”

Bolte says you still need to allow your team to bounce ideas off of each other and off of you. You can’t throw water on innovative brainstorming. It simply goes back to ensuring that you have broadly defined the direction in which you want everyone pointed and nudging people back on track when they stray.

“If it’s something I don’t like, I’m pretty quick to tell them,” he says. “If you think of it like they’re presenting their wish lists, I don’t give much comment unless they’re really in an area where I think it’s not aligned with our vision. So it’s really an opportunity to listen to those plans, see how it’s going to impact the whole group and figure out what they’re going to need to do to support those plans moving forward. That’s how you keep everyone on the same page with regard to a vision.”

How to reach: BDP International Inc., (215) 629-8900 or www.bdpinternational.com

The Bolte file


Richard Bolte Jr.

president and CEO

BDP International Inc.

Born: Philadelphia

Education: Business/finance and Spanish degrees, Mount St. Mary’s University

What is the best business lesson you’ve learned?

You can’t do business with people or companies you don’t trust. If you don’t have that element, you can’t have a relationship, and you can’t do business.

What traits or skills are essential for a business leader?

You need to be a great communicator and have really strong public speaking skills. You need to be trustworthy and ethical, be passionate about what you do, and show that passion when you have the opportunity.

What is your definition of success?

Meeting all predefined goals. But you can define it in other ways. Success can be creating a successful culture, and that means not accomplishing a goal but how you accomplish a goal. Did you do it in a moral and ethical way?

Published in Philadelphia
Wednesday, 02 March 2011 12:06

Mark Davis

The risk of potential failure is ever-present in the life of a startup, especially one that is located in Silicon Valley. As a senior leader, your goal is to maximize the possibility of success by assessing risks and taking advantage of the opportunities that they can present.

Break new ground

Several years ago, my Virsto co-founders and I set out to secure funding for our startup and spent many days visiting venture capital firms along Sand Hill Road, home to many Silicon Valley venture capitalists. Time and again, those VCs would assume that as a startup in the virtualization space, we naturally would develop our first product to support VMware, which was essentially a monopolist in that market at the time.

They were wrong.

On the contrary, we made a conscious decision to build our first solution supporting Microsoft’s yet-to-be-announced competing technology platform. The reason was simple: It was the green field. Many of the companies that were developing products for the market-leading platform had been around for years, giving them ample time to establish themselves and crowd the market. We made a bet that Microsoft would rapidly take market share. We knew that by choosing the alternative path, Virsto would have the opportunity for faster growth with many new users who would need a product to support their brand-new platform.

It was a carefully calculated, strategic risk that we took, and along the way, it taught us several valuable lessons about the keys to going after the green field.

Plan growth wisely

The first order of business was to establish our beachhead. To set ourselves up for success, part of our plan was to grow the company strategically. The first two years were spent developing the technology, determining the product specifics and mapping how the company should grow. We did not outsource quickly or hire with abandon. Instead, we opted to manage our cash reserves carefully before turning on the growth, once we had proven what we had was truly viable.


Too often, startups get overeager and try to “focus” on too much. It is a classic mistake: Right out of the gate, you get excited and want to chase every opportunity in your field of vision. Instead, Virsto took the tack of securing only the capital we needed to start the company and to support our research and development. Determined not to waste a penny or squander a moment of our headstart in the market, we became experts in a specific area that promised great potential growth.

Build a passionate team

A CEO interacts daily with a staggering amount of people in numerous ways — customers, employees, channel partners, board members, strategic partners, investors, lawyers, bankers, prospects and so on. To keep the business running smoothly, it is vital to be team-oriented and assemble a talented group of individuals, interacting with each person in different ways so that each gives you his or her very best.

It is necessary to bring passion to your role, and this is particularly relevant when you are all focused on one goal. At Virsto, our team is defined by its determined optimism. This is a team of people who are very excited about what we are doing and who enjoy working with each other and with our customers and partners. The gang has a strong desire to make a difference, to build something significant. <<

Mark Davis is the CEO and co-founder of Virsto Software. He has been at the center of the networked storage and virtualization revolutions since their inception. He launched the first Fibre Channel disk array in 1994 and was instrumental in growing Sun Microsystems from a nonplayer to the largest Unix storage vendor within five years. Before co-founding Virsto, he was CEO of storage resource management vendor Creekpath Systems, engineering its acquisition by Opsware (now HP), and also repositioned ConvergeNet as the inventor of SAN-based storage virtualization, resulting in a $340M acquisition by Dell.

Published in Northern California

Deciding when or how to transform a small company into a global company can be a tough task, but James Tallman took the reins of Datacert Inc. at the height of the economic downturn in 2008 and made a tough task a reality.

As president and CEO, Tallman took the company from a modest provider of software and services for the legal industry that had 2007 revenue of $21.5 million to a global company with 2009 revenue of $33.7 million.

“Datacert was an entrepreneurial company, 10 years old, and they needed someone to come in and bring the company to the next level,” Tallman says. “The company had done well, but it had reached the point where we needed to take a different approach to the marketplace, and we needed to do things in a more scalable fashion.”

Smart Business spoke with Tallman about how he grew a small company into a global success during one of the toughest economies since the 1930s.

Reassure employees. My first challenge had nothing to do with the company, it really had to do with the people and the economy, and it was getting my team to understand that a downturn in the economy could actually be the greatest opportunity for a company. I was really blessed because over the past two years, I’ve had a really outstanding board and I’m surrounded by an outstanding management team. We really had to rally the troops who, for a lot of them, were going through personal strife, where their husbands and wives were losing jobs in the marketplace. My challenge as a leader was to get them to understand that a downturn in the economy, when other companies and your competitors are struggling, winds up being a tremendous opportunity for you to take the market and grow.

When you transform from an entrepreneurial-based company to a professionally managed company, the key challenge was spending time with the employees and spending time helping to develop the skill sets that they needed to get the company to the next level.

Plan for the long term. Do what you say and say what you do. As you lay out a clear plan and you tell people this is what we’re all going to do, make sure you stay the course. During bad economic times, your tendency sometimes can be to react to a short-term market force and not stay with the long-term strategy. I made a commitment to the employees that I was going to invest in them and I was going to reinvest 30 percent of our revenues, and yes, I didn’t know what the economy was going to do, but we were going to stay the course. If I invested in them and we invested in the new technologies and where we were going, the benefits would come.

As the sales and the revenue of the company started to grow and [employees] saw the reaction from the customers, at first, they were open to the plans that we had, but they were also skeptical. As they started to see the results, they became believers. The reactions I started to get were people coming by my office and thanking me and saying, ‘Everything we said we were going to do, we’re doing and we’re winning and we’re dominating the market now.’

Develop growth. Make sure that the company isn’t entirely dependent upon you. Put your ego in check and recognize that to grow a great company, you need a great team around you. Any company that’s driven by one person or just a couple of people, although you can exhibit short-term growth, you’re never going to achieve a long-term sustainable growth strategy if you don’t surround yourself with people who are better than you are.

As a CEO, the first thing you have to do is look in the mirror and ask yourself, ‘What am I really good at and what am I not good at?’ I have a small company and I want to make it a global company. I need to ask myself, ‘Do I really understand what it takes to go to the next level, do I have the talents within myself, and what kind of people do I need to surround myself with that have talents that I don’t have to be able to do that?’ It’s one of the biggest failings that I’ve seen of CEOs that I’ve worked for. The CEOs who truly understand that they don’t have the answers and they need to hire people who are better than them in a lot of different aspects of the business is a critical thing for a CEO who is trying to transition from a small company to a large company.

How to reach: Datacert Inc., (713) 572-3282, or visit www.datacert.com.

Published in Houston

By the time Tenet Healthcare acquired St. Mary’s Medical Center in 2001, the hospital had officially entered an identity crisis. In struggling to keep pace with industry changes, the West Palm Beach-based facility had floundered financially in its final years as a not-for-profit hospital. By the time Davide Carbone stepped in as CEO in 2006, St. Mary’s had become so unsure about how to move forward that it wasn’t moving at all.

“The hospital had a wonderful past and wonderful legacy and is a vital resource to the community, but it was treading water to figure out which direction to go in, in a world of constant change, especially in the health care universe,” Carbone says.

Despite coming in with a successful track record — Carbone spearheaded a major financial turnaround at Aventura Hospital and Medical Center as its former CEO — he had a big job ahead of him.

“The hospital had really not been advancing, had not been progressing, and people were concerned,” he says. “But they were also comfortable with what they were doing. One reason that the hospital wasn’t progressing or meeting the needs for growth was because they weren’t changing, and I became a change agent.”

Find an identity

To stabilize St. Mary’s financially, Carbone had to get its more than 1,600 employees and members of the community on board with some major changes needed to turn the hospital around. This was easier said than done.

“There was a large contingent in the community that easily wanted to see St. Mary’s go back to the old days that they remember fondly, but that was not practical,” Carbone says. “That’s not reality.”

Carbone needed to gain the support of the community and unite people around a new vision for St. Mary’s. The problem was that the hospital was perceived by community members in very different ways.

“This hospital had a glorious background and kind of fell into a trough and was having a hard time pulling itself out of it,” Carbone says. “It lives under the cloud of a lot of people’s impressions that we’re just a charity hospital or we’re just a trauma hospital or just a Catholic hospital.”

As a faith-based hospital, St. Mary’s is one of the highest providers of charity care in South Florida. It also functions as a level-one trauma center and a community hospital. Carbone wanted to show the community that St. Mary’s encompassed not one, but all of these things, and financially, it wasn’t a failing or destitute organization, but it had lots of potential and was still providing great services.

He decided the first step in re-establishing the hospital’s identity with the community was instituting a new logo that honored the legacy of the hospital while acting as a symbol for a fresh start.

“It seems trivial, but I think it gives people something to rally around,” Carbone says. “We all want to follow a leader. We want to follow success.

“In this case, it was just getting people motivated and getting them to see a vision of what could possibly be at St. Mary’s versus what had been at St. Mary’s.”

By getting the community excited about change and a new vision, people could start embracing change without feeling like they were abandoning the roots of St. Mary’s. Carbone refocused the hospital’s marketing and image-building efforts to generate excitement in the community about its goals.

He encouraged St. Mary’s staff to work proactively with the media. Giving the media more opportunities to learn about the hospital’s services and facilities, St. Mary’s began getting positive media attention instead of negative. This attention played a large part in renewing communication and building trust with community members, many of whom were Carbone’s biggest skeptics.

“Sometimes that criticism is legitimate and warranted, and sometimes it’s due to a lack of understanding,” Carbone says. “A lot of that is just communication.

“People have to see you as somebody they can trust and somebody you can believe in. As you develop that level of trust, people are much more willing to work with you and take risks with you.”

Recognize employees

Getting the community on board with change was crucial. However, Carbone also had to make sure that employees were prepared for change at St. Mary’s. Having started in health care as a nurse’s aide and as an emergency medical technician, he knew how easy it is to get caught up in the hectic demands of the job and lose sight of the long-term vision. Many employees weren’t interested in changing the status quo, even with a negative company culture.

“It took a lot to convince some of the folks, especially on the medical staff, that change is a good thing,” Carbone says. “Change means change, but change also means progress and survival. You have to be a change agent, but you have to do it in the most positive way possible.”

In looking for ways to re-engage his employees, Carbone realized that one explanation for the alienation he saw was a lack of effective employee relations and recognition.

“One of the things I noticed right away was that we did very little in the world of employee relations,” he says. “We did very little communicating, very little celebration of our successes.”

Carbone had St. Mary’s human resources department bring on one person whose sole job would be handling employee relations and developing ways to call out the successes of employees and of the hospital.

With an employee relations department in place, St. Mary’s developed monthly employee newsletters, activities with employees and celebrations during the holidays. It started recognizing industry events, such as May’s hospital week, and being more active in charity events, including the Leukemia Walk and March of Dimes runs and walks.

The hospital has also developed awards for top employees and volunteers each quarter. By holding up these examples of success, Carbone hopes employees will see how each individual’s success benefits the hospital, which benefits everyone.

“You have to encourage people that it’s definitely teamwork,” Carbone says. “No one person, no one idea can save any facility. So you have to rally the leadership team. They have to rally the people that they work with to try to get on board and see we’re going in a new direction, and here’s the direction, and here’s why, and here’s what we need you to do to help us get there.”

Since Carbone stepped in as CEO, he hasn’t replaced one member of his senior leadership team at St. Mary’s, with the exception of a COO who left to become CEO of another hospital. By uniting the existing team to support change, he was able to build trust needed to move forward.

“Your job is to sell them your perspective, your vision and your goals and that you have the experience and wherewithal to make it happen if we can work as a team,” Carbone says.

Enhance services

Once you rally your people around change, you have to deliver it. Carbone was starting from scratch to develop a strategic plan that could turn St. Mary’s around financially and update it for the future. Before making any changes, he thought hard about St. Mary’s strengths, where it wanted to go, where it needed to be and how to get there.

“Those are all easy questions to ask but very difficult, especially in health care,” Carbone says. “There’s a lot of competition. Development of any service is very resource intensive, from equipment to supplies to personnel and to physicians. Changes are not easy to implement. Good ideas are not always easy to implement. So you have to prioritize what you think will have the biggest impact for the short-term and long-term success of the hospital.”

To grow, the hospital needed to maintain and enhance core programs, while developing others. That started with small steps, such as renovating and enhancing equipment and facilities. As Carbone examined opportunities to add new services, he looked at the services that St. Mary’s already offered and then considered how a new service could add to or enhance the existing services in a way that was successful for patients as well as the facility.

One way to do this was by providing people services locally that weren’t currently available. For instance, there was a lack of neurologists in the area willing to see patients in a hospital setting, and a lack of neurosurgeons willing to perform cranial surgery. Carbone worked to build a neuroscience team to supply these services at St. Mary’s.

He also led the drive to institute a pediatric open-heart cardiac surgery service and get it approved by the state. St. Mary’s is the first Florida hospital in 25 years to win approval for this cardiac service, which will be implemented this year.

St. Mary’s gets more than 3,000 transfers from other hospitals of people who are seeking its high-level services, so Carbone has dedicated much of his time to finding talented doctors and providing them with the resources needed to develop core services, such as pediatric, trauma, stroke and obstetrics.

“It’s very challenging for physicians in South Florida, but if we can provide them with the resources that they need and if they can see the same vision and opportunity that we do, then it’s a good match,” Carbone says. “If we can get them the right resources, they can build a successful program.”

Carbone brought on doctors to start a comprehensive stroke program, which opened in December 2008, and a physician to head a new limb orthopedic program, which brings in patients from around the world. He now constantly looks for ways to build out services that are not being met at all or not being met adequately to serve the community.

“All of our financial success has been built on building new programs, building better programs and making sure we’re meeting the needs of the patients that we serve,” Carbone says.

Build on success

By getting people to see how change benefits the community, the patients and the staff of St. Mary’s, Carbone has been able to transform the hospital into a growing and profitable facility. In 2010, St. Mary’s was elected business of the year by Palm Beach Chamber of Commerce and Carbone received South Florida Business Journal’s Healthcare Award for CEO of the Year. Each of its successes brings St. Mary’s closer to the next.

“Over time, as you build success stories and people see you are doing these changes for the right reasons, people get on board,” Carbone says. “Success breeds success. Bringing on good people brings on more good people. Having a successful service encourages others to take that same kind of risk to establish a new service.

“We’ve had major successes not only financially with the hospital, not only the development of services for our patients but also in the measurements of quality of the care we provide. Almost any measure you can measure, we’ve more than exceeded our goal.”

Infection rates have dramatically decreased in the last five years, and other core quality measures have improved. Financially, the hospital went from being in the red to being in the black. By building new programs and recruiting many new positions, St. Mary’s has increased its number of patients and employees, which has also benefited its local economy.

“A lot of skeptics in the community were taking a wait-and-see attitude to see where St. Mary’s was going to go,” Carbone says. “I think they’ve been pleasantly surprised that we’ve had a great deal of success in turning the facility around.

“That first year, year-and-a-half to two years is key to get a few success stories and get some energy into the facilities, environment and get people understanding that we are going to be moving in a new direction, but one that should be positive and beneficial to all of us. I think we’ve accomplished that, but you can’t sit back and be satisfied. You have to constantly be looking for the next opportunity.”

How to reach: St. Mary’s Medical Center, www.stmarysmc.com

The Carbone file

Davide Carbone


St. Mary’s Medical Center

Born: Boston area

Education: Bachelor’s degree in environmental biology from Clark University; master’s in health administration from Duke

What is your definition of success?

Being able to go home every day and feel you’ve done the best that you can for your facility or your employer and for your employees and to be proud of what you’ve achieved. … If you can go home at night and know you’ve done a good job, that’s probably the best measure of success. As long as you are gratified with the amount of effort that you put in and it’s actually leading to something that’s getting better and that you’ve hoped to achieve.

What do you like most about your current job?

The ability to make a change and make a difference in people’s lives, and that’s at every level, from the patients we serve, to our employees, to the folks out in the community.

If you weren’t doing your current job, what would you be doing?

There are lots of jobs I’d thought about early on through high school and in college, but I’m very happy doing what I’m doing and I can’t imagine doing anything else.

Published in Florida

You’ve trimmed all the visible fat from your operations and improved efficiency as much as you can. Yet your bottom line still isn’t where you want it to be. So now you’re thinking about diversifying into a new market or product to improve your bottom line. Not a bad idea. Done right, diversification can be a lifesaver. Done wrong, however, it can be, at the very least, a letdown and, at the very worst, a quick path to disaster.

“Business owners diversify for many reasons, such as to gain a competitive advantage, minimize risks from concentrating too heavily on a particular market, or as a method to adapt to customers’ needs,” says Steve Williams, managing partner at HMWC CPAs & Business Advisors in Tustin. “Branching out to new lines of business, markets and suppliers may seem like a good idea, but, without a careful strategy, adequate resources and realistic expectations, it could turn out to be a bad one. We help our clients to be successful from the initial stages.”

Smart Business spoke with Williams about the best path to diversification.

What are some typical strategies for diversifying?

Diversification can take on many forms. You can take advantage of new market opportunities through introduction of a product developed through research and development. You may want to expand a product or service line to gain additional customers. Another alternative is to take on an entirely new area of business through a merger or acquisition.

Sometimes it makes sense to buy another company for economies of scale, reduced supply-line costs or other economic reasons. One type of diversification is horizontal integration, which involves expansion into the same industry and/or a similar product area. For instance, a vehicle dealership could buy another dealership.

Another type of diversification is vertical integration, in which a company moves into a different level of the supply chain. Usually each subsidiary, owned by the parent company, combines together to form a more efficient and cost-effective supply chain. For example, a manufacturing company might purchase a distributor or retailer. Some businesses use vertical integration strategies to eliminate the middleman — such as wholesalers and retailers — and keep the profits in-house.

These diversification strategies typically require significant capital expenditures. In most cases, you’ll have to pay (i.e., acquisition costs, time, operational changes and other resources) before you can reap the benefits, which may take time to materialize.

What are some easier, less-costly strategies?

There are several less-expensive methods to enhance your product lines and service offerings and provide the best value for your customers while maximizing your business’s growth over time. Some strategies to consider:

  • Ramp up sales. If you don’t have an outside sales team, consider hiring salespeople (or contracting with independent sales reps) to prospect for customers. Your distribution channels, which are in contact with a diverse customer base, can also be instrumental in finding new business.
  • Add the extras. You can compete nationally and globally by offering value-added services to your customers. For instance, don’t just sell a product; offer a complete package that includes warranties, preventive maintenance contracts, educational and training offerings, and any other services that will make the product more attractive.
  • Know your customer. Get to know your customers’ businesses and the changes they’re making, such as an increase in production capacity or new packaging for a product. Offer to support their new business goals by customizing products, services and other offerings to fit their needs. This will convey your value to them, help develop a new business opportunity and keep your customers satisfied.
  • Seek smaller fish. Many companies rely heavily on large-volume customers who make up a significant portion of their sales base. Consider diversifying your customer base to lessen the impact should a major customer decide to depart.

Is a business plan needed?

Adding successful products or services, for example, isn’t as simple as just buying equipment and finding building space. Develop a business plan that encompasses goals, production, human resources, financial and marketing issues. Goals, for example, may include increasing sales, gaining a broader product line, and having greater control over quality and delivery. Make sure that the plan identifies important details, such as capital costs, incurring additional debt, time commitment to manage the new product line, etc. Calculate the potential profitability by projecting an income statement that considers all the additional revenue and expense (both fixed and variable costs) factors. Consider how your projected balance sheet and income statement might affect relationships with banks or investors. These are just some of the issues that should be addressed in your business plan.

What about ‘barriers to entry’?

When you expand into new markets, there are ‘barriers to entry,’ which can include capital investment costs, branding, government regulations, taxes and permits, unions, heavily entrenched competitors and a wide array of other factors. For example, when you look to get into new markets you’ll likely be up against many established relationships, so you’ll need to identify solid reasons for customers to jump ship.

Barriers to entry should be fully analyzed, especially the financial factors, before committing to a diversification plan. Consider your company’s strengths (such as a highly skilled work force or any specialized equipment you can bring to the table) as well as its weaknesses (i.e., poor cash flow at the moment). Be objective, honest and realistic in this assessment.

Steve Williams, CPA, is the managing partner of HMWC CPAs & Business Advisors (www.hmwccpa.com) in Tustin. He also heads the firm’s Healthcare Practice and has served healthcare clients for more than 25 years. He can be reached at (714) 505-9000.

Published in Orange County

Just as people need annual check-ups to maintain their physical health, businesses also need check-ups to help maintain their financial health.

Businesses that are dedicated to creating solid business plans with both short- and long-term goals, and that habitually refer to those written documents and measure their success against those goals are better positioned than their competitors to access capital for growth and go after market opportunities, says Stewart Beach, executive vice president, Old Second National Bank, Aurora, Ill.

“With the economic climate in recent years, it’s critical for business owners to constantly evaluate their position in the market, to review goals and objectives, and to determine what action items are necessary to carry out their business plans,” says Beach. “A business’s bank wants to make sure that management is actively leading the business toward success and future growth, making performing regular financial checkups so vital.”

Smart Business spoke with Beach about how to perform a regular review of your business and its performance, and what to consider during these financial checkups.

What metrics should a business focus on when performing financial checkups?

A business plan is a roadmap for an organization’s goals, both short term and long term, and all businesses should have this document in place and on paper. But the plan doesn’t do any good if you simply create it and put it on a shelf; instead, the plan should evolve over time, be edited frequently and revisited regularly so a business can determine whether it is hitting key goals and objectives.

In particular, the budget is a primary checkpoint that should be carefully analyzed on a regular basis. Is the business meeting its projections? If not, why? What factors are causing the business to derail from the plan? While a business plan seems like an inevitable foundation for any business, the fact is that many organizations do not have a formal plan in place.

But every business needs to dedicate the time and resources necessary to assemble those goals, lofty ideas, strategic opportunities and, most important, those numbers into a sturdy, well-crafted business plan, creating a document that will serve as the basis for regular checkups.

What value do these regular checkups have for a business’s relationship with its bank?

While access to capital is better today than it was a couple of years ago, banks still approach business opportunities with cautious optimism, much like any business would consider a deal in these more fragile economic times. Banks want to know that their business clients have a solid plan in place and that they regularly review financials. This is evidence of a strong management team that is actively leading the business and meeting financial targets.

Management that is on top of the budget and on task with achieving business objectives is likely open to growth opportunities, and this is a win-win for banks and the businesses that partner with them.

How does the economy impact the way businesses should evaluate their organizations?

In the current economy, the markets change more rapidly and business cycles move faster than ever before. Businesses might need to go back to the drawing board and review their business plans to ensure that there is enough flexibility to meet changing demands, whether from the customer base, vendors or delivery sources.

The key word is flexibility. Flexibility should be a way of business life today. But an organization can only be flexible when it has a solid anchor, a business plan or similar document that serves as a benchmarking tool. From there, a company can measure and celebrate its successes.

By regularly taking the pulse of the business, management is in a better position to act on market opportunities. For instance, one of the fastest growing segments today is exports. Businesses that produce all products in the United States and have not considered international business might want to investigate how to gain a presence in the export market. Perhaps a company wants to develop an export business to grow its existing domestic revenue. Or a retail organization might begin to explore online sales opportunities to add muscle to its current in-store sales.

The key is to constantly be looking for what’s next, and the businesses that continue to check in with their plan and ensure that the budget is in line, that goals are being met and that key people are in place to help the business grow have a better chance of succeeding when they venture into some of these market opportunities.

A business that is not on top of the budget, receivables, personnel and sales will not be in a position to capture new market opportunities. The economy today demands that businesses run lean, and that means understanding where every dollar is spent. This is why regular financial checkups are crucial to the future of any business.

Stewart Beach is executive vice president of Old Second National Bank in Aurora, Ill. Reach him at sbeach@oldsecond.com or (630) 906-5478.

Published in Chicago