During the life cycle of any business, there are successes and missed opportunities. Even the most accomplished business leaders tell me that while they were ultimately successful, they committed missteps along the way. Often, they attribute these missed opportunities to inattention or “blind spots” that, when looking back, should have been obvious. Why is the seemingly obvious often missed?
Successful business leaders tend to be confident, independent thinkers. This independence can lead to insulation, with an overreliance on an individual or small cadre of the management team.
Other members of the team, or individuals deeper in the organization chart, are heard but not necessarily listened to. At best, they are heard through a filter of preconceptions held by the senior leader or inner circle, thereby limiting the value of the input. At worst, they are completely ignored.
While few have perfect vision, business leaders can limit their blind spots. An outside perspective from experienced resources can provide informed foresight in advance of making critical strategic decisions. Better decisions increase management effectiveness and drive results. How can you gain this invaluable outside perspective? There are several alternatives we have found to be effective, alone or in combination, including:
- Thoughtfully constructing a company advisory board
- Participating in a reputable business forum
- Engaging a qualified consultant
- Obtaining an investor partner
Public companies always have a formal board of directors with regulated fiduciary obligations. Private company boards of directors tend to be much less formal, with wide variances in effectiveness and impact, depending on the particular company.
In both cases, the formal statutory board is typically dominated by insiders. We have found the establishment of an advisory board consisting of just key company leadership and several outside individuals to be effective in providing needed external perspective.
These individuals can have specific industry or functional expertise, such as sales or operations. Their input is typically independent of management’s internal preconceptions.
Multiple business forums exist that can provide peer-to-peer external perspectives, providing business leaders a sounding board for strategic decision-making.
Solis and its portfolio leaders are members of the Young Presidents’ Organization (www.ypo.org), Sage Executive Group
(www.sageexecutivegroup.com), and Vistage (www.vistage.com), among others. For a business forum to be effective, it must provide a confidential format in which senior leaders can feel comfortable candidly sharing and receiving insight.
Many senior leaders roll their eyes when we suggest hiring a consultant to assist in providing external perspective. We agree that consultant relationships, inappropriately qualified and structured, can be ineffective.
Hence, it is critical to thoroughly vet a potential consultant and clearly define expectations. Create objective criteria against which to measure the success of the relationship and design compensation accordingly. By tying compensation to clear deliverables, you’ll limit the chances of a consultant relationship becoming the negative stereotype.
The most transformative way to gain an outside perspective is to bring in an equity investor partner. If the investment relationship is correctly structured, the partnering can be a powerful source of external knowledge and experience. Professional investors bring experience across many companies, often in different industries. This often surfaces insight that business leaders didn’t know they didn’t know.
Obtaining an investor partner doesn’t have to mean ceding control of your business. For example, there are financial firms that take minority equity stakes in private businesses — albeit typically with “ratchet provisions” that increase ownership if the company underperforms — and our firm has pioneered a true 50-50 partnership structure. When selecting a potential investor partner, key factors to keep in mind are the experience an investor partner brings, your level of comfort with the partner and the chemistry between the two parties.
An outside perspective can help business leaders make better decisions and produce superior results. See what you’ve been missing.
Craig Dupper is the managing partner at Solis Capital Partners (www.soliscapital.com), a private equity firm in Newport Beach, Calif., focused exclusively on lower middle-market companies.
Laurence Mawhinney’s recession story is all too-familiar. His company took it on the chin, losing 25 percent of its workforce in the U.S. and forcing those who remained to do more with much less.
“Our team was experiencing enormous change in a very short time frame, and we had stopped investing in our people as part of our cost-cutting,” says Mawhinney, the president of Fisher & Paykel Appliances North America — which is the regional wing of New Zealand-based appliance manufacturer Fisher & Paykel.
“It was necessary at the time but very damaging to the morale of our team. And all of this is going on while the macro picture is pretty ugly out there. The general feeling among people wasn’t very positive.”
The challenge for Mawhinney was to turn around the mindset of the 200 employees in Fisher & Paykel’s North American footprint.
“We’ve had to refocus our team, help people become positive and forward-looking,” he says. “We’ve started to reinvest heavily in our team, and that has really helped to grow our business. It has helped reset our people’s minds to a positive state and realize that the company is focused on the future, focused on helping them and growing the business.”
But Mawhinney’s investment wasn’t just monetary. He and his team committed countless hours strategizing, communicating and promoting the culture.
Mawhinney and his team aimed their leadership agenda at one overarching goal: to strengthen the culture of their company, restore employee confidence, then harness the power of a newly motivated workforce to propel their region of Fisher & Paykel into the next chapter of its history.
“Once we realized that the way forward was pretty clear and we had more blue sky than dark clouds, that is when we saw that we really needed to change, to focus our culture and reinvest in our people,” Mawhinney says. “We needed to convince them that the company was on track and this was going to be a good place to work both now and in the future.”
Get the message
Nothing much has changed in terms of values over the years: Honesty is still the best policy.
When Mawhinney started to see evidence that the recession was loosening its grip, he didn’t try to minimize the damage that it had done to the business. In his communication with his people, he acknowledged the severity of the crisis, the extent to which it had damaged morale throughout Fisher & Paykel’s North American region and the distance that everyone would have to cover on the road back.
As the calendar progressed through 2010, Mawhinney kept employees updated on the financial state of the organization and gave them a clear picture of what areas of the company were performing well and not performing well.
“You have to be very honest, you show them your bottom line, you show them the areas that aren’t performing, and then you show them how to turn it around,” Mawhinney says.
“People are very understanding. It was a very difficult climate, so it’s not like people were driving home, listening to the radio and hearing good business news. It was all very negative. Everyone understood that and took a mature approach to realization of what we had to do to turn the business around.”
Mawhinney realized that the reassurance he could offer to his people was minimal at first. Once the economy started to show some signs of improvement, nobody knew if the improvement would be major or minor, fleeting or sustainable.
In addition to keeping employees in the know, the most important action you can take in that type of situation is to give employees a voice. You can’t simply mandate that they follow your prescribed plan of attack. You have to allow them to question the status and stability of the company and put your future plans under the microscope.
Though you may want everyone to completely buy in to your plans and fight the recession as a united front, each person has to come to his or her own conclusions about the situation.
It’s your company, but it’s their livelihood.
“What we did was centered very much on getting individuals together and listening to them, hearing what their concerns were and addressing the group from the perspective of really trying to understand what they’re going through, then presenting them with a strong business plan that we worked to develop together and using that as the way forward,” Mawhinney says.
“That was really a key to turning around the morale and the individual mindset throughout the company from a negative one to a very positive one.”
Crisis communication is usually about treading water. Employees simply want to know whether the ship is sinking — igniting the boilers and plotting a direction is of less importance until your people are confident that the company’s future is stable.
“At first, your communication will be along the lines of, ‘When do we stop making cuts? When can people stop worrying about whether they’ll have a job in the future?’ They want to know what steps you are taking to provide stability and eventually perform a turnaround,” Mawhinney says. “In our case, our people wanted reassurance that the company wasn’t just taking away and cutting to save.
Once the economy leveled off and we were able to stabilize the business, we started to demonstrate our commitment to the future. We were able to reinvest in our people and show them some wins, which was really critical.”
Grab some wins
A long-held truism in baseball is that pennants aren’t won in April, but they can be lost. The same can hold true when facing a turnaround or recovery in the business world.
You won’t slingshot your company to new heights of profitability and success in the initial weeks and months on the rebound, but the initial wins you do get, however small, are crucial for building the momentum that you will need to ride later.
Without those early wins to galvanize your company and build employee confidence, your recovery plan can stumble out of the gate and you’ll find yourself behind from the get-go.
As Fisher & Paykel started to rebound in the North American marketplace, Mawhinney made it a point to emphasize early wins to his people and demonstrate the importance of small victories at the outset.
“We started to be very successful with our outdoor products that we sell,” he says. “We were able to pick up market share in our outdoor division, which was very profitable for us, and it made for a nice improvement to our bottom line.
“Another big win was when we started to bring individuals together for retraining exercises, our cultural reinforcement and cultural understanding. They’re sessions that we have been running for over a year now.”
In the training sessions, Mawhinney and the leadership team placed the recession and recovery in a historical context. The real victory was in showing employees the staying power of the company. In more than seven decades, Fisher & Paykel had weathered numerous recessions and downturns and had overcome it all to develop into an industry leader.
“We sat down as a group and talked about the culture of the company,” Mawhinney says. “We talked about the history of the company, how the culture evolved due to that history and where we have come from. This company is over 70 years old, and we have been through similar cycles before.
“We used that history to draw analogies to where we are, what we have been through and how we’ve bounced back. That history, and the resilience of the culture, was very useful as far as getting people to understand that what we were going through was a cyclical event. It wasn’t a singular catastrophic event. We had been through this before.”
Early wins improved employee confidence in the future of the organization, which in turn strengthened their belief in the guiding cultural principles of the Fisher & Paykel organization — which is essential to any rebound or turnaround. Without a strong culture, your business isn’t healthy, regardless of the economic climate. Without a strong culture in a down economy, your business could face an existential threat.
“The culture has to be in everything you do,” Mawhinney says. “Everyone needs to be included at every level of your business. It’s important that your team understands that your culture can be a competitive advantage. In today’s environment, that can make the difference.”
Reinforce your culture
Mawhinney added momentum to the initial wins by continuing to link them back to the cultural principles of the organization on a daily basis. If employees can see how their daily tasks help advance the culture, and advance the success of the business overall, it can serve as an important motivational tool.
It’s something Mawhinney demonstrated by involving people in the strategic planning process.
By giving employees a view of, and input into, the strategic planning that was aimed at pulling Fisher & Paykel out of the recession, Mawhinney and his leadership team were able to give employees a sense of the steps management was taking to improve the company’s outlook, and how each person’s job affected the company’s ability to realize its goals.
“We had to develop a new strategy for a difficult time, and everyone was involved in that strategic planning,” he says. “The core values are clearly defined throughout the organization, and our teams have integrated those core values into everyday processes so that they are transparent to all.
“It includes defining the culture and defining a plan to implement the culture, which is really key in terms of stabilizing during difficult times and having that strong culture that can really carry you through.”
Mawhinney’s emphasis on promoting initial wins and on strengthening the culture has had the desired effect. Fisher & Paykel is exiting the recession with a renewed focus on the future. The company has begun making new hires and reinvesting in its existing workforce and has rebounded financially. The company’s North American operations generated $124 million in revenue during 2011.
“Maintaining a culture is really a function of having a strong training culture, as well as mixing the old with the new,” Mawhinney says. “What we found through these pretty challenging times is that the experienced and longer-term employees have really helped the new hires that we have made.
“Our new employees need to understand that our culture is different from what you might normally experience in a U.S.-based company, and it really helps us.
“We believe that you need to have an open culture. That is what I think we really have. It’s a culture where you can feel free to speak your mind and that if you have ideas, put them out there. If we can’t use them, we’ll at least consider them for later.
“It’s critical that employees feel a sense of ownership in what they do. Encouraging an open and creative culture will really help your business, and as the leader, you have to walk the talk if you want that type of culture.” <<
How to reach: Fisher & Paykel Appliances North America, (888) 936-7872 or www.fisherpaykel.com
The Mawhinney file
Born: Stratford, New Zealand
First job: I worked for Television New Zealand before joining Fisher & Paykel, where I’ve worked for 21 years. I’ve worked in the U.S. since 1997.
What is the best business lesson you’ve learned?
Innovation is great, but the bigger question is whether it solves a problem. You need to ask what your problems are, and respond to that. I’m looking for the people around me to offer solutions when they encounter a problem.
What traits or skills are essential for a business leader?
You must have a creative spark, and have the ability to incubate new ideas. That means you have to demonstrate the kind of leadership that allows you to develop a creative culture in your organization. Also, you have to help employees see that what they do each day really matters to the company.
What is your definition of success?
Achieving positive results for retailers and shareholders, which will continue to allow us to invest in the future growth of the business.
As an entrepreneur, I have spent more than 30 years focused on celebrating the growth of our franchise owners, creating jobs, providing opportunities for advancement and giving back through our company charity, the Ms. Molly Foundation. These activities help foster the overall good health of our organization.
However, a more challenging endeavor is the process of considering my replacement in the event of a tragedy, eventual retirement or desire for a less-intense position than overseeing the day-to-day operations of the business. It is a process I recently went through as we named a new CEO, while I retained my position as chairman of the board.
Succession planning for an entrepreneur is not a task that most are likely to enjoy or look forward to, and I am no different. Many never do it, but that is a mistake.
While the day you don’t go to the office, lead the meeting or make the decisions may not be a savory thought, it is the process that will allow the organization to outlast you. Think about succession planning as your emotional insurance for the preservation and continuation of your life’s work.
Here are four steps to help you through this process.
Every business owner should first review potential internal candidates who could take the baton from you and continue leading the company’s mission. Take your time during this important first step and consider all of the qualities you want in your successor.
Then, strengthen your bench and develop your team as the next generation of leaders. If no suitable internal candidates are found, you then need to set your sights on an external candidate who you feel meets your criteria.
Whether you’re planning to step away from the business in one year or in 10, this process can take years, so start early.
Among those who lead teams in your organization, there will be a few who accomplish more than their peers and who more closely mirror your vision for the future. By deciding on a pre-selected candidate to be your successor, it allows you to provide targeted, leadership training, which increases his or her confidence and yours.
Take time to document the succession process and how long it will take for the next-in-command to lead the way. This part of the process can actually generate sincere excitement at the prospect of your hand-selected replacement taking over.
The slow and steady process of your succession doesn’t have to be a luxury. You have identified and trained your No. 2 and determined the length of time it should take for him or her to take over more of your responsibilities as you put your plan into action. It is imperative to the success of your successor for each of you to be committed to the new roles each of you will take.
If done correctly, there will come a day in this process where you will stand back and admire the new leader as he or she steps into the spotlight you once commanded.
As the preparations you’ve made in your plan come to fruition, the time has come to fully embrace the position you’ve chosen for yourself. I’ve heard this feeling described as being gently placed on an ice flow and pushed out to sea.
By knowing the tenacity it takes to succeed in business, I would bet you’re not the type to be pushed out of anywhere, ever. The survival instincts of a businessperson are what keep the quarterly reports in the black and the satisfaction of your customers and team high.
I can honestly say we now have the right successor in the CEO’s role, and I have welcomed my sole role as chairman. I have renewed excitement about the growth still ahead for our constituents, and I believe this approach will pay off for all of stakeholders and for yours.
David McKinnon is the co-founder and chairman of Ann Arbor, Mich.-based Service Brands International, an umbrella organization that oversees home services brands, including Molly Maid, Mr. Handyman, 1-800-DryClean and ProTect Painters. To contact David, send an email at email@example.com.
Gordon Krater didn’t know where the bottom was. So he started focusing on the top.
Like just about every business leader, Krater had never seen anything like the recession that started in late 2008. The stock market started free-falling, the housing market crashed and two of the Big Three American automakers went to Washington looking for bailout money.
Not even the most educated and experienced of economic analysts knew where the slide would stop — or when. As the managing partner of financial and business advisory services firm Plante Moran PLLC, Krater faced a choice: Either brace for the eventual rock-bottom impact or focus his 1,700 associates on discovering present and future areas of opportunity despite the depths of the economic crisis.
“The most important thing was to not listen to all the noise,” Krater says. “Every day it seemed like there was bad news, but we couldn’t focus on just that. We needed to figure out what we thought was really going on. We needed to assess where we were and try to set a positive tone for the organization.”
Krater was elected managing partner in October 2008, on the front edge of the recession, and took over in July 2009, right in the middle of the economic free fall.
Thrust directly into the storm, he had to quickly figure out where Plante Moran could still generate positive momentum and rally his workforce around those areas — and he had to do it while his entire workforce was immersed in an environment riddled with stories of layoffs, foreclosures and bankruptcies.
“In the absence of communication, people assume the worst,” Krater says. “So one of the things I’ve learned over the years is that people really need to hear what is going on, and they need to hear that you are still confident in the company’s future. People won’t follow pessimists. They’ll follow optimists who are also realists.”
Get the real story
During the recession, employees at companies around the country consumed daily media reports about the deepening crisis. By the time team members arrived at the office for work each morning, they had already scanned a newspaper, watched TV during breakfast or listened to the car radio on the ride to work. Krater was already facing an uphill battle against negativity before he stepped into his office each day.
Krater couldn’t stop the bad news, and he couldn’t stop his staff from consuming bad news. But he could show everyone at Plante Moran that there was another side to the story.
Yes, the economy was in dire straits, and yes, it was putting a strain on just about every business. However, that was the surface-level story. If Krater dug a little deeper and asked a few more questions, he believed he could find the toehold that would help give his people a more positive outlook on the future.
To get the answers to his questions, Krater utilized Plante Moran’s vast and powerful client base.
“We have a really solid base, so we are a great place to take the pulse of the economy,” Krater says. “We have thousands of clients that include influential companies and leaders in our region. So I went out and talked to them. I tried to get what was fact versus what was conjecture, the real reactions to the issues at hand versus the reactions to a state of paranoia.
“I wanted to get a real sense for where our clients thought things were going, and where things were headed in reality. I didn’t want to just read a bunch of things in the media and allow us to be influenced by that. We needed to talk to our clients to get a real sense of where things stood.”
Krater was able to take what he learned from the firm’s clients and use it to keep his staff more thoroughly informed. If Krater foresaw a drop in business related to a particular account, he shared as much as he could regarding the reasons behind the drop in business and the potential severity of the drop.
“Rather than simply saying, ‘Business is down,’ we tried to answer how far down,” he says. “There is a big difference between business being 40 percent down and 5 percent down. If we had someone worried about whether a contract would be renewed, like a major auto supplier, versus having a contract canceled outright, there is big difference between those two. A big part of what we had to do was differentiate what was really happening versus the fear of what might happen.”
Krater wanted to focus his people on the day-to-day work of running the firm, not the horror stories coming from the nation’s financial centers. The staff at Plante Moran couldn’t help what was happening in Washington and on Wall Street, but they could do something about positioning the firm to weather the storm by strengthening its client relationships.
“People were concerned about the possible collapse of the financial system,” he says. “It was this growing idea that business as usual was over, and there was a new normal, which was a difficult concept for a lot of people to accept, both here and elsewhere.
“Here in Detroit, we had a front-row seat to watch GM and Chrysler go into bankruptcy, and nobody knew if they were going to come out. So all of that was swirling around, and we couldn’t do much about a lot of it. So what we needed to do was focus on our clients. We needed to do what we could, which was to serve our clients in the best way possible to help them through those tough times.”
Taking control of a crisis means to take control of communication. Your people need to hear the truth about your company’s situation directly from you, which means you need to stay well informed, so that you can better share information with your people.
During the depths of the recession, Krater wanted to give his associates at Plante Moran a realistic view of the situation that the firm was facing. Often, people associate realism with pessimism. Nobody has ever associated a reality check with something positive. But Krater believes pessimism can run as rampant as optimism, if left unchecked.
“That’s why you can’t panic,” he says. “That is why you try to get to reality, to what is real versus what is being thrown around out there. You try to find your own answers as to what is going on out there with the economy, as opposed to taking what you read at face value. Of course, I read everything I could get my hands on about what was happening out there, but you verify what you read.
“You can be truthful and realistic and optimistic at the same time. I wanted our people to know that despite what was happening, we are still going to be here, we are going to emerge stronger than ever, and most importantly, here is how we’re going to do it. You need substance to your message.”
By taking control of communication, you are really taking control of your culture. When tales of woe are assaulting your people from all sides, morale starts to erode; the collective confidence of your people starts to wane, replaced by anxiety and paranoia, which produce a counterproductive work environment.
With frequent and comprehensive communication, you can combat the negative inertia of a crisis by reminding your people why your company can still be successful and by focusing everyone on those items. That approach reminds your people that they’re not helpless, they’re still capable of controlling the company’s destiny, and they have a means of pulling the company out of the crisis.
In short, you want to promote a message of empowerment.
“We tell a lot of stories around our firm, and we’ll talk about clients and their experiences with us,” Krater says. “Frank Moran was our founder, and his undergraduate college degree was in philosophy. One of the things he’d talk about was the idea that we were a people firm disguised as an accounting firm.
“So we have been focused on our culture, ideals and principles since the beginning. We’ll relay stories to each other about a staff member who helped a client, how it happened and so forth — not unlike how I hear Quicken Loans does it.
“If you ask a person who has been there for two years or more, they’ll be able to give you a number of examples of how to deal with a given situation, based on a story they heard from somebody.”
Properly managing communication, and by extension your culture, is a critical component of crisis management. If you let your culture wither in a time of crisis, you’ll find it is a long road back when you set about rebuilding it.
“Every company has a culture,” Krater says. “The question is, is it good or bad? If you let your culture go bad, one of the toughest things to do is rebuild it. It takes so much energy and time, and it’s just a very difficult task. It takes energy away from serving those who you have to serve outside the company in order to make your living. We have a great culture here, and one of the things we do is fiercely protect it. You can’t let anything get in the way of that.”
Invest in what you can
During a recession, or any time of crisis, you need to spend money.
It seems counterintuitive when business is down and revenue is drying up, but when you face choppy financial waters, your company needs you to invest in resources and talent more than ever.
At Plante Moran, Krater and his leadership team made a commitment to hiring new talent during the recession. With added talent, Plante Moran was able to explore new business avenues and set itself up for a period of growth as the recession has loosened its grip over the past two years.
Plante Moran frequently hires college graduates straight from campus, but during the recession, Krater and his team took a bit of a different approach.
“Other companies had to cut some really good people loose, and because of our strong culture and reputation, we were able to attract some really good people who had been cut from other companies,” he says. “That’s one of the biggest advantages of making your culture a priority. You can provide opportunities for people, and they know you are a great place to work.”
If your people know they can impact the future in a positive way, they’ll want to work for your company, regardless of the economic landscape. If they know their work will be appreciated by management, and make a difference in the long run, it will be much easier for your people to tune out the negativity around them and develop a goal-focused mindset on improving your company’s outlook.
“People want to feel like they’re in the know, and they want to feel like they are making a difference,” Krater says. “One of the problems you can run into as an organization gets larger is this attitude of, ‘If I don’t do this one little thing, it won’t matter.’ It can become harder to connect them to the impact they can have.
“Any business, any profession is a game of inches. The little things make the difference between real success and not doing as well. It’s having people who are empowered and believe in their ability to make an impact that makes the difference. That is where you find the real gold.” <<
How to reach: Plante Moran PLLC, (248) 352-2500 or
The Krater file
Education: Bachelor’s degree in business administration, University of Michigan
First job: It seems like I always worked growing up. I was always cutting grass or babysitting. The first time I got a W-2, however, I was a lifeguard at a municipal pool when I was 16.
Krater on making an impression on Michigan State University men’s basketball coach Tom Izzo: We have an annual firm conference where we close the firm down for a day, right around the end of our fiscal year on June 30. Every single person is invited, no matter what their role is. It’s a day when we talk about the firm, what we’ve done, what our goals are going forward, and we celebrate. We celebrate not only the successes of the firm, but of the individuals in the firm.
Oftentimes, we have a guest speaker, and one time we had Tom Izzo come in and speak to us. I was talking to him before the meeting, he had his notes on what he’s going to say, and he asked me ‘So, who is here today?’
I told him everybody in the firm is here. He says, ‘You closed the whole place down? Every single person is here? Not many people walk their talk like you guys do.’
On the spot, he changed what he was going to talk about. He talked about (his 2000 national championship team) that had a rough start to the year. And he actually called in the maintenance man, his administrative assistant and a lot of other people besides just the players. He told everyone, ‘You know what? We’re not doing a very good job. Everybody has to do better, because everybody contributes to the success of this organization.’
He talked about how when they won the national championship, and they got the championship rings that everybody covets so much, the first ring went to the janitor, because he is the guy who opened the gym so the players can practice.
That sends the message that everybody’s contribution is important. That is how we feel, and needless to say, he was a big hit speaking to 1,700 people about something that we really try to practice.
When Joe Peilert came on board at Veka Inc. in 2010, the company was 2½ years into a more than five-year building recession. The company had gone through its first layoffs in its 30-year history, and it seemed there was no end in sight to the shrinking construction market.
Veka Inc. is a 500-employee, $110 million manufacturer of PVC and vinyl extrusions for residential and commercial windows, doors, fences and decks. As the number of homes being built in the United States continued to decline, Veka saw some of its customers shut their doors and its competition struggle to stay in business.
“By the time this was all said and done, 75 percent of the market was gone,” says Peilert, Veka president and CEO. “You’re looking at the peak of 2 million homes being built a year, down to 405,000 homes in 2011. It was a massive breakdown of opportunity.”
Peilert and his leadership team had to act to ensure Veka wouldn’t be the next company closing its doors.
“When you’re in a situation like that, morale is a challenge with employees and customers alike,” Peilert says. “That wasn’t something that was exclusive to Veka. It was a very tough emotional state for people because they were used to growth and success.”
As Veka’s new CEO, Peilert needed to do his due diligence within the organization, which gave him an opportunity to evaluate the business and gain a strong understanding of its operations. However, he had the added pressure of an industry that kept slipping more and more.
Here’s how Peilert identified key areas of strength for Veka and created opportunities within a shrinking market.
Evaluate the business
Peilert has spent a majority of his career in the building materials industry. He was attracted to Veka because it was a quality leader in the industry, and as a family-owned business, it provided a unique working environment.
“It’s a family-owned group with a global presence, which is a great mix because you get a long-term commitment to growing the business and what that provides to me is what I like to call the luxury to make the right decisions,” Peilert says.
“A lot of times you find companies with a three- to five-year horizon, and if you go through a recession, you can bet you start cutting maintenance, you start cutting people development, expenses and things like that.
“With the type of view we have for growing a business bigger and stronger for the next owner generations, you continue to do those things through difficult times and that is very attractive.”
Peilert took advantage of that luxury to make the right decisions. He addressed the people at Veka to share his plan for moving the company beyond the building recession.
“We gathered around 60 managers and supervisors here, which gave me the opportunity to introduce myself and talk about mainly what I considered to be key ingredients for a successful organization,” he says.
“What it boils down to are mainly two things — No. 1 is people who care. They care about the company, the customers and the co-workers. The second element is a well-defined strategy and an execution plan that’s linked to it. If we have those two things going in the right direction, it doesn’t matter what the industry and what the economy does; we’ll do well.”
Once he had met with key people he spent the rest of his first week listening.
“You have to spend time with the employees and with the customers and allow them to talk about their ideas, their concerns and their perspectives because you’re a sponge during that time,” he says.
A big part of what Peilert soaked up was the condition of the company’s customers and competition.
“With the customers, there was quite a bit of consolidation going on in the market,” he says. “As you can imagine, there were a number of people going out of business, so for us it was important to understand if we were aligned with the right people, both from a culture business philosophy point of view, as well as their approach to the market and product positioning.
“We wanted to make sure we provide them the right products. Our design capabilities that we have in-house allowed us to help our customers to transition from a new-construction-focused business into a renovation-focused business. That’s where we spend a lot of time proposing new concepts that help them get into those markets faster and more successfully.”
Peilert also had to fully understand the company’s three stakeholder groups — ownership, customers and employees — which he relates to a three-legged stool.
“There is an inherent balance to the system and the fact is you can’t neglect one group over an extended period of time because you introduce imbalance, and ultimately, that three-legged stool collapses or you fall off the stool,” Peilert says.
“You’ve got to understand the needs of those three groups and make sure that you address them in a balanced way. Understanding that inherent balance and managing that is the key.
“Once you’re there, you can never undercommunicate. You’ve got to constantly be visible, approachable and building trust all the time.”
Rally your team
Building that trust was crucial as Veka employees watched the building market continue to contract and began questioning whether the market would ever get better.
“Ultimately, communication is key in bad times more so than in good times,” Peilert says. “You need to be honest with people and you cannot overpromise. That is really dangerous.
“If you overpromise, then you lose your credibility and then you lose the buy-in and the business culture of the company is also being damaged.”
Peilert spread a message to the employees of Veka that he wanted to see them show an ownership and can-do attitude.
“You always find the people on any given day who will talk about the Steelers and find the negative things,” he says. “That’s really dangerous if that is prevailing in an organization. Fortunately, we have a lot of people, based on their seniority, that had seen the good times and they understand that this is a phase that, at some point, will come to an end.”
Not all of the employees were able to view the market situation with that mindset, so Peilert had to make sure he was allowing employees to voice their concerns.
“You can give company updates where you stand in front of 100 people, but the more effective way, while it takes a lot more time and effort, is to have those one-on-one interactions,” he says. “You get some good quality discussions and people talk about their concerns. They listen and they are not afraid to ask questions. That in my opinion is the best way to reach people. You’ve got to walk the plant.”
That kind of attention to individual employees greatly helped Peilert in the buy-in process. To get his management team on board, Peilert took them for an off-site strategy meeting at Fallingwater, a groundbreaking mansion that Frank Lloyd Wright built over a waterfall in the Allegheny Mountains.
“We took a tour of the building, and it became very obvious that the man had a phenomenal vision and an exceptional amount of focus on detail,” he says. “We said, ‘That’s how we want to approach our business and that’s how we want to develop strategy.’
“The second day we started mapping out our game plan going forward. People got a sense for how we wanted to tackle the business and certainly were inspired by the building and the thought behind it. If the management team has a can-do attitude and shows that ownership attitude, at some point, everyone else in the company will follow that lead.”
To truly rally your employees behind a new direction aside from company meetings, one-on-one discussions and strategy sessions, you have to celebrate your small wins.
“You show people you are hitting the milestones and when you hit those milestones, you’ve got to talk about them,” Peilert says. “You start building the confidence and building the momentum.”
To keep momentum going, Veka had to make several changes to account for what was happening in the industry. The company closed a location in Youngstown, Ohio, and converted its Canadian operation to a warehouse and logistics center to retain critical mass at key sites. It also made adjustments to personnel to help the company head in the right direction.
“Some of that was done, but there was quite a bit of work left to do in terms of looking at both cost and business development,” Peilert says. “At the end of the day, I made it clear to my management team that you can’t cut yourself to prosperity. With that being said, we said, ‘We can grow share and we can grow in bad times. We just have to have the right approach to the market and the right products.’”
Peilert started to break down the critical success factors in each area, one being cost management and the other being new business development.
“Once we had identified them in a fishbone diagram [which identifies many possible causes for an effect or problem], we started to break them down into further detail,” he says. “Once we had the detail, we started to put initiatives behind them. Once we had the initiatives, we attached them to a SMART execution plan.”
SMART is a big initiative for Peilert and the company. It’s an acronym that stands for specific, measurable, achievable, responsible and time-based.
“Once we started breaking this down into individual initiatives, people said, ‘That is achievable. That is realistic,’” he says. “Once we started to see traction on some of those projects and we had the additive nature of those initiatives, people started to gain confidence again.”
There wasn’t a magic trick or a rabbit that Peilert pulled out of his hat — it took rolling up his sleeves and clearly outlining performance expectations.
“I think that helped once people understood very specifically what they need to do to succeed in their job,” Peilert says. “In many cases, that’s not been properly defined. You typically see performance improving once you measure and once you set a target. So we spent quite a bit of time establishing metrics.”
The company focused on quality ratings, internal metrics and specific improvement targets aligned with the philosophy of SMART.
“We wanted to make sure that they were achievable, so we broke them down in quarters and showed a step-up improvement,” he says. “Those were key elements that people say, ‘I can do that over the next quarter. And if that’s possible, I can do it again the next quarter a little bit better.’”
Breaking objectives down into bite-size goals made a big difference. The key is being able to define your core business and put resources behind opportunities that will move the business forward.
“You start off by defining what your core is,” he says. “That’s always worthwhile revisiting and putting on a test vent. Once you’ve done that, you want to make sure you fund your biggest opportunities properly and put the right people behind it.
“It’s not always the biggest account that deserves the best person, but it will always be the biggest opportunity. Ultimately, you just have to spend time in the market and understand the leverage and the levers you have for success.”
Veka’s hard work paid off through a 56 percent reduction in quality claims, the signing of new business and a good growth return. So far, 2012 has been a good year.
“What we are seeing in 2012 is the beginning of a slow but steady recovery,” Peilert says. “People are starting to create households again and that’s how home construction benefits. It will not be a return to the 2 million unit residential homes, maybe we’ll never achieve that again, but it’s now a stabilized system that has experienced some slow and steady growth not based on government programs but based on recovering market strengths.
“For Veka, we are very excited about some of our partners that we have and our customers in the market that we’ve been able to work with on new designs for products that zero in on energy efficiency, sound insulation and impact resistance. Those are all big trends and big needs in applications that will help us grow faster than the market.” <<
How to reach: Veka Inc., (724) 452-1000 or www.vekainc.com
Evaluate and understand your business and stakeholders.
Develop a strategy and communicate expectations.
Implement your plan to head in the right direction.
The Peilert File
President and CEO
Born: Altena, Germany. I came to the U.S. in 1991.
Education: Has a Diplom Oekonom/MBA in business and economics from Ruhr-Universitat Bochum
What was your first job, and what did you take away from that experience?
I worked in my dad’s CPA office. I did classic, old-style accounting with a big journal where you had to write every entry in. That gave me a sense for the complexity of business, but also the need for accuracy and execution.
What advice would you give someone else stepping into a new CEO role?
For me personally, I’ve always strived for having the freedom to shape the direction of the business. There is a saying one of my mentors always said, which was, ‘It’s better to be the head of a mouse than the tail of a lion.’ It was always attractive to me to rather than work for a large organization to work in an organization where I can impact the structure and reach the people. I would recommend to a CEO to be the guardian of the company culture because that is a very precious asset.
Who is someone you admire in business or leadership?
I look up to George Washington. I have a painting of Washington crossing the Delaware in my office, and to me, that is the essence of leadership. If I look at my career, the founding CEO of Ardex, Herbert Goller, was a great mentor to me.
If you weren’t a president and CEO, what is something you have always wanted to do?
One day when I retire, I could see myself teaching.
For 28 years, the late Fred Krum developed the vision for Akron-Canton Airport (CAK), a vision that changed the relationship between the airport and its customers. It involved low fares and complimentary Wi-Fi and massage chairs for passengers. It called for $250 million to modernize airport facilities. The vision was to create “a better way to go” for airline passengers.
Krum cast the vision, and now Rick McQueen is carrying it forward.
“Every decision we make, we think about how it impacts our customers, and we make sure that that continues to be a positive impact,” says McQueen, who became president and CEO after Krum retired in 2008. “We want to be a good partner for this region and we want to give back.”
First-time visitors may be surprised at the effort a regional airport would put into delighting its customers — for example, furnishing new guests with gift bags upon arrival, filled with handy items such as ChapStick, Purell and a personal note from McQueen — or offering complimentary Cinnabon coupons on customer appreciation days and free shirts on “T-shirt Tuesdays.”
CAK has also made strides to improve travel experiences, from retrofitting its website with innovative, interactive content to leading the industry in its hands-on social media strategies and partnerships with low-fare carriers.
“We do not want for our customers to feel like there are bricks and mortar between us — that there’s pavement between us — but that we are all doing the same to serve this community, to get them where they need to go, on time, at a price that they can afford,” says Kristie VanAuken, senior vice president and chief marketing and communications officer for CAK.
This philosophy has paid dividends and not just for the airport. In addition to breaking passenger records for 12 out of the last 15 years, CAK has gradually grown its annual economic impact in Northeast Ohio to about $400 million and 2,250 jobs. Smart Business spoke with McQueen and VanAuken about how CAK continues to refine the vision of “a better way to go” through innovation around the customer experience.
Q. How do new technologies such as digital and social media complement the airport’s vision?
? KV: There are a couple of reasons why it really makes sense for us, one being because of the broad adoption. Two, because it’s extremely transparent, and we are a very transparent organization by choice and by orientation as being a government agency. And because it’s really cool to be in conversation with our customers and to learn from them what they want and what they like.
The website was very much a product of what we’ve done on the social media front, and then it was figuring out how do we integrate our strong brand voice — this ‘better way to go’ theory’ — which really has deep meaning for all of us here.
? RM: This also goes back to our low-fare commitment. What’s the first thing that you are looking for when you go online to look for an airline ticket — lowest price, right? So if our carriers have the lowest price, and it’s so easy now to go online and check all these different fares, it helps us to have that position where people recognize us.
Q. What were the challenges of building a presence on these new platforms?
? KV: You don’t deliver content on social media the same way you do on the website or in the same way you do in a TV ad, but they all have to make sense together. I often go back to this analogy of a rock band. So it’s not everybody strumming the same instrument and the same tune at the same time, but every instrument has to play its part. And it all has to come together to make beautiful music.
Last year, we spent a lot of time thinking about the integration of our brand voice, how the public relations effort really needs to be in concert with everything — stakeholders, airline relations and all of the ways we communicate the things that matter to the community. It needed to have that familiar voice of the airport, that warm, transparent, authentic voice.
Q. You have such a strong brand focus. How does it translate into your new media strategies?
? KV: It’s not a top-down strategy. The great thing about social media is that it’s all about the customers themselves. We get to go to their space. Social media is all about what matters to them. It’s their space and we are often welcomed into that, and that is a privilege.
We’re honored every time someone even posts something to our wall. Because the way we look at it is, ‘Look, that customer could do anything with those 30 seconds, but they chose to spend those 30 seconds posting something to our wall. It was the most important thing at that moment to them.’ In our minds, that kind of commitment deserves a swift response and deserves our friendly and compassionate answer to whatever it is that they’re going through.
Q. So how does the airport respond to this feedback?
? KV: There are two people on my staff, including myself part-time, who monitor and listen every day to what’s going on in the social media realm. But we’re not trying to supplant our current infrastructure for customer service. We have a customer service manager. If something comes up that needs individualized attention, we bring him in. He’s very skilled at quickly responding to customer needs, working on behalf of a customer who needs to interface with an airline or a car rental company.
Another way to look at it is what do our customers really care about? They tell us all the time, and we respond to that. They want free Wi-Fi. Great, they get it. They really respond to our sparkling clean facilities. They want clean bathrooms. … So we listen. We’re looking at all times for something that we can improve. We’re also listening for areas that maybe we should pay more attention to.
Q. What does it take to stay so responsive?
? RM: It’s another level of dedication that most people don’t realize.
I use the analogy of a house of cards shaped in a pyramid. I’m sitting at the top of the pyramid just because of who I am, but if I don’t do my job, the house of cards will fall. If our custodians and our building maintenance folks and our operations people, middle management folks don’t do theirs, imagine if you just take one card out. What happens is the house of cards falls as well. So we all have to work together.
? KV: There are a lot of different ways that we’re trying to use the technology to try to engage people where they are. There’s a lot of give and take. We try to send information out that they would find valuable. But we also like to bring in our people and our family orientation here.
Q. Is it just the marketing team that’s involved?
? KV: We’ve got five in-house bloggers. We feel like there are a lot of viewpoints on the airfield that are interesting, maybe some behind-the-scenes looks that you simply don’t get from the marketing people. I can’t give you the inside track on some cool thing that’s happening on our operations side or even go out there and talk about construction of our new runway because it’s just not in my DNA like it is theirs. Of course, Rick does his ‘Prez says’ once a month, and that’s an open forum for our customers to ask the top dog here any question that they want.
Q. Ever have any really tough questions?
? RM: We’ll have somewhere between 20 to 25 questions each month, and quite frankly, the hardest questions to answer are the ones such as, ‘What’s your favorite airplane?’ Well, that’s hard because I like them all! If it’s just about the operation of the airport — I’ve been here for almost 30 years — those are actually easy for me to answer. But it is great to hear what people have to say, and on occasion, they have suggestions on how we can improve our service, and we’re always interested to hear them. A lot of times, they have new destinations that they’d like to see because they travel there all the time with their families.
Q. How do you reinforce the vision for employees?
? RM: Part of our strategy has always included people or other employees here in the facilities that don’t necessarily even work for us — for instance, the courtesy van drivers. We contract the parking lot out. Those folks don’t directly report to us. But they have to buy in to the idea that we need to be ‘a better way to go’ and that we need to take good care of our customers.
Even the Transportation Security Administration go down and talk to all of their new employees about how we want them to interact with our customers, that our niche as a marketplace is very customer-driven, and we really do live and die by our tagline.
We give away ‘Better Way to Go’ awards on a monthly basis. If someone has gone above and beyond the call of duty, whether they’re our employees or an airline employee or a car rental employee, whoever — we give them an award. They come up, and I get to talk to them for a few minutes, thank them personally. We give them a little tchotchke, which is an airport bag or a watch or something of that nature. So we try to reach out and develop the culture that will permeate the place and keep the message front and center — that we need to be a better way to go and that customer service has to be a priority.
Q. What can other leaders do to make their company more customer-centric?
? RM: You have to make your employees part of the solution and empower them to make decisions and to do things, to buy in and take ownership. I also think it’s key for them to look around their industry and not be afraid to take other people’s ideas and make them your own.
[That applies to] a lot of the customer amenities that people really like here, for instance, a cell phone lot where you can come in, and as long as you stay with your vehicle, you don’t have to go into the paid parking lot. With the advent of the cell phone, people call you and say, ‘Hey, I just got off the airplane … can you swing around and pick me up?’ Our customer service manager saw that at another airport, but we thought it was such as really good idea we incorporated it into our culture as well.
Q. With the recession, ticket price remains a major factor for airline passengers. Will you be able to keep offering low fares?
? RM: It’s interesting because, of course, we don’t set the airfares here — the airlines do. But how we can influence those fares is by the mix of air carriers we have here.
We developed that relationship when AirTran came in 1997, and we’ve been able to keep that leadership as we’ve moved forward. In fact, we just did a study and it shows that currently because of AirTran and now Frontier Airlines, the people in Northeast Ohio are saving about $90 million a year in air travel, because of these low fares.
Q. You also have a new partnership with Southwest Airlines, correct?
? KV: It’s very exciting for us to start thinking about our partnership with Southwest Airlines. They have committed to staying at CAK and growing here. It’s such important news for this community because it means that we can continue to offer low fares.
On the communications side specifically, we’re going to look at other media that are out there. We’re currently experimenting in Google+. We’re looking with great interest at Pinterest. (The company has since started a Pinterest account). We’re already on Foursquare. We’ll keep looking at the ways our customers want to be in a relationship with us.
? RM: We’re in the midst of the master plan right now, which is one of the things that the Federal Aviation Administration asks us to do anyway — but it couldn’t be coming at a better time for us, coming off of record passenger years — one of the key things for me I learned a long time ago from Fred — and that is to always keep abreast of what’s going on out there because we need to be positioned to take advantage of whatever opportunity comes our way. And we don’t know what those opportunities are. <<
How to reach: Akron-Canton Airport, (888) 434 2359 or www.akroncantonairport.com
The CAK Files
President and CEO
Senior vice president and chief marketing and communications officer
Rick, born: North Canton, Ohio
Kristie, born: Lansing, Mich.
Rick, education: Walsh University
Kristie, education: Austin College (BA), then Western Michigan University (MPA)
What are some things CAK does to make airline travel more fun for people?
Kristie: We had a wonderful customer appreciation day on Valentine’s Day this year. What we wanted to do is delight and excite them, give them that ‘wow’ experience. But on Customer Appreciation Day, it was for everyone who was in the building. It was our opportunity to say thanks for being our customer … so we just wanted to treat them right. We had cupcakes and we had flowers and cookies and free coffee and Cinnabon treats. We also partnered with Delta Airlines and for its first flight of the day we had customized gift bags for every customer that had a bag coming out on our bag belt. So the first thing that the customers saw were gifts for them, individually named, and it was so cool to be down there and see the delight on their faces as they’re searching for their bags and snapping photos. It just created happiness.
Rick: Another thing we’ve been doing is on our website in order to encourage more participation is free T-shirt Tuesdays. You’d be surprised at how many people I see who say, ‘Hey, I keep entering but when am I going to win a T-shirt?’ It’s amazing what people will do for a T-shirt. But once again it’s fun, and it gives them a chance to feel like they are part of what we’re doing.
Kristie: We’ve given away about 400 T-shirts.
James Wendle and EQM Technologies & Energy Inc. are largely reliant upon government spending to drive business. However, with the lack of funds and resources from the government recently, Wendle has had to resort to alternative ways to keep the company flush.
EQM is a $75 million, 240-employee sustainable solutions company that provides consulting and technology to business and government. Wendle became EQM’s president and COO in 2010 after the board brought him in to help grow the business.
“What I bring to the table is accountability and know-how in the construction and the engineering world and growing more on the engineering side and developing that part of the business to get us more diverse,” Wendle says.
That diversity is what Wendle expects will ease EQM’s reliance on government spending. His acquisition strategy is to find companies that will get EQM into different aspects of the environmental and engineering industries. Most recently, EQM, which at the time was Environmental Quality Management Inc., merged with Beacon Energy Holdings Inc. in 2011 to become EQM Technologies & Energy Inc.
“The Beacon merger was a reverse merger,” Wendle says. “Beacon Energy gives EQM an added benefit that wasn’t there before.”
EQM has five different divisions that give the company a wide range of capabilities. Now Wendle is searching for the next company that will bring added value to the business.
Here is how Wendle is diversifying EQM through mergers and acquisitions.
Look for opportunity
EQM was looking to broaden its business and get into an industry that it wasn’t in yet, but one that was similar to the work it did. The company came across Beacon Energy Corp., a biodiesel production business.
“The plant was sitting idle, and we had a strategy that we were going to restart the plant, which we did, and be in the biodiesel business, which we are, and the plant is running now,” Wendle says. “It helped diversify us.”
Wendle and EQM put together an acquisition strategy that focused on finding companies in the engineering business and environmental services business that would help the company grow.
“Growth is an expectation,” he says. “It’s not something that you just do by mistake. Growth of companies is what’s expected, and it’s expected by our board. Growing organically can be difficult, and I think a lot of companies are experiencing that.
“So with our equity partner, we have a company that is an expert at it. They’re on a constant search, and raising the capital to make the acquisitions is something that they do every day and they’re very good at.”
In today’s market, if you’re going to grow, you have to look at growing both through acquisition and organically. If you grow through acquisition, you have to understand the business you’re interested in.
“We set up a model of companies that are in a certain range of what their revenue is, what their margins are, how we can be more of a strategic acquisition and what synergies there are,” he says. “If we merged, how can both firms benefit from it? It is something that we need to know something about. We’re not going to buy a company we have very little knowledge about.”
The other part of acquiring a company is what leadership comes with it.
“That is just as important as the company itself, because we are constantly looking for leaders and leadership,” he says. “When you acquire a company, you also acquire the leadership and you have to look at how those leaders can help you grow in other areas.”
One of the most challenging aspects of the acquisition process is not losing sight of your current business.
“You have to align yourself with a private equity company that can assist you in your search, because it can be very distracting, not only for the buyer but for the seller,” Wendle says. “You have a business to run while you’re doing all this and you want to keep your eye on the ball.
“I’ve seen sellers particularly get so distracted through the process that they don’t watch their business. You have to stay focused and keep your eye on the ball. Don’t get all consumed in an acquisition potential.”
Wendle understands how difficult a merger process can be, so he makes sure he is as helpful to those involved as he can be.
“That’s the way I develop a relationship with the people, because it is a relationship,” he says. “If the process goes well, then the closure is going to go well. It can’t be adversarial. It needs to be very friendly and very professional. Instead of looking at it like you’re out there buying assets, you should look at it as you’re being an advocate of the seller’s and you’re helping them sell their business.”
Integrate the merger
Once a deal is made to move forward with the merger and you’ve gone through and agreed on terms and produced a letter of intent, then you need to go through due diligence.
“We’re really trying to understand more and more about the company and they’re trying to understand more and more about us,” Wendle says.
“The integration actually starts in the due diligence process. You want them to learn as much about you as you learn about them. You want them to learn about what your benefits program is. The key for owners selling is how are my employees that I hired going to be treated.”
EQM gets its HR department involved to look through the merging company’s benefits program and matches it up with theirs.
“Typically ours is going to be overall in a better position, so the new employees are going to benefit from it,” he says. “Then it’s integrating the financial packages or the business systems. How do we communicate financially? Rarely do the new companies coming in have the same types of systems that we have.
“From there, we really try not to make changes. Any changes we have to make we want them to go slowly. What’s working obviously has been working and the last thing you want to do is keep it from working. You want the leaders and the employees to keep on doing what they’re doing.”
In a merger process, there are two sides: a legal side and an emotional side. The due diligence process focuses primarily on the emotional side.
“The legal side is pretty cut and dry,” Wendle says. “The emotional side is more cultural. What kind of culture are they coming into and how comfortable do they feel with it? I start explaining that once I first meet a potential acquisition candidate.
“For someone who’s going to sell their business, it’s a very emotional process and they have to be very comfortable with it. You have to pay attention to how you get the cultures to integrate and whether they feel they still have autonomy.
“That’s the one thing about running your own business that’s good, but now they’re part of a much larger organization and they have more potential for growth.”
Making this transition successful relies on strong communication between the two companies, specifically among leadership.
“You cannot communicate enough,” he says. “We have town-hall meetings. We have staff meetings every week. Each business unit has staff meetings every week and you’re just trying to keep the lines of communication open. It really comes down to employee engagement and whether the employees feel that they have a say and whether they’re being listened to.”
While cultural alignment is a big part of making a merger successful, there still has to be a good fit in other aspects of the business.
“Cultural alignment isn’t necessarily more important, but it is as important,” he says. “There still has to be intrinsic value and what the company brings to the table as far as net income. There has to be value-added services that customers want to buy. What I find is if employees have the right attitude and they’re happy, then they have a pretty good customer base. They walk hand in hand.
“If the employees are not happy, customers are going to hear about it because there are close relationships between the employees and the clients. And vice versa, if our client’s employees aren’t happy, we hear about it.”
EQM’s strategy is to leave the incoming company alone to continue the work it was already doing. You have to make a judgment call whether or not to make any changes to a company you’ve acquired.
“There are two aspects of it,” Wendle says. “When we look at a company we look at the brand. Most the time the companies that we acquire have a good brand and we want them to keep that name and that brand and operate it as a subsidiary, unless it is parallel to one of our business units and our brand may be stronger than theirs.”
Develop a strategy
The key to being successful at acquisitions and mergers and with the growth of your business in general is to have a strategy with goals that you hope to achieve.
“I think the business changes so fast that you can have a five-year plan, but to really put tactics behind that strategy is very difficult to do because it changes so fast,” Wendle says. “It’s been my experience that if you look in two to three years, you’re going to have a better chance of meeting your goals and putting more realistic goals out there. We’re in a different climate now than we were in four or five years ago. We’ve all managed downturns and now we’re trying to grow.”
Wendle is looking to keep EQM doing more of the same it did with Beacon Energy Corp. He is focusing on the private side more so than the public side.
“My belief system is that private industry is not investing in itself right now so there is a pent-up demand for capital improvement and industries are hoarding cash,” he says. “And I don’t think it’s going to matter who the president is, companies will start spending money on capital and start investing in themselves again. The first companies that private owners spend money on are environmental and engineering companies. We are going to be positioned to be there when companies start spending on themselves again.”
One of the biggest aspects of laying out any kind of growth strategy is the need to constantly change to stay ahead of competition.
“Presidents and CEOs have to constantly be looking to reinvent themselves and reinvent their companies,” Wendle says. “I think that the business moves so fast in the world we are in that you cannot restrict yourself geographically and you really have to reinvent yourself every three years.”
Part of that reinvention is attracting entrepreneurial people to your business to keep ideas fresh.
“To really look at new services, one of the keys is hiring entrepreneurial leaders in your company and creating a culture and environment that allows people to think freely and say their mind and be able to put strategies together without being frowned upon,” he says. “You have to create that kind of culture of growth … and have the right kind of people to create that culture.” <<
How to Reach: EQM Technologies & Energy Inc.,
(800) 229-7495 or www.eqm.com
- Acquire companies that will allow you to grow.
- Integrate the acquisition by developing a relationship.
- Develop a growth strategy with two- and three-year goals.
The Wendle File
President and COO
EQM Technologies & Energy Inc.
Born: Alton, Ill.
Education: AAS degree in architectural engineering and a B.S. degree in construction management from Southern Illinois University.
What was your first job and what did you learn from that experience?
When I was 10, I swept hair in a barber shop and I also had a paper route. I was raised by parents who were born in the Depression. I was taught that if you worked hard everything would be fine. So I always had a job and I always had money. It’s about the work ethic. I knew I could get a job if I could prove I could work hard. People would want to hire me.
Who is somebody you look up to in leadership?
Abraham Lincoln. The man failed so many times. He had no way of becoming president of this country because of all his failures, but he did and he was the right president at the right time. Another man that had so much against him at the time was Winston Churchill.
What is the best advice that someone has given you?
I was taught by the CEO of the first professional job that I had to be friendly and be professional, but don’t be abused. Don’t let anyone treat you poorly. Stand up to it no matter what.
If you could do something dangerous one time without consequence, what would want to do?
I would ride my Harley through the Alps.
If you own or operate a business, you have probably experienced slow periods where revenue was declining and you didn’t have enough leads coming in. But there is actually a way to market yourself so that you are not at the mercy of the season or economy again.
There are two things that you need to control your revenue year-round: an integrated marketing approach and an organized marketing plan.
Here’s how to do it.
Integration means that each piece of your marketing works together in a coordinated way. For example, an integrated approach might look like this: You have a direct mail postcard campaign that drives traffic to your website. Your website is optimized to convert that traffic into leads by getting them to fill out a form.
Then, that form populates your email database and your leads receive pre-determined emails from you for the next six months. During that time, your sales team follows up with the prospects over the phone.
Of course, the specific strategies that make up an integrated campaign vary by industry, but what follows is a good general outline.
In order to fully integrate your marketing approach, you will need the following systems in place:
- Lead generation. For this, I suggest direct-mail postcards. There are other options such as television, radio, billboards, letters and more. But I have found postcards to be the most cost-effective.
- Lead reception. Receptionists should have a predetermined way to handle callers and gather their contact information. Your website needs to be optimized to gather prospects’ contact information, which is easily done by offering free downloads where the prospect is prompted to fill out a simple form.
- Follow-up. You’ll want to go with an email service for this, because email is the most affordable follow-up option available and usually yields great results when used in this capacity. Postcards and phone calls are also great for follow-up, too.
The Internet is also a great resource to learn more about each of these elements.
It is one thing to have an integrated marketing approach, and it is another thing to have an organized, fully integrated marketing plan.
It may sound obvious, but you need to be intentional and organized about exactly how the pieces of your marketing plan will integrate. For example, how many days will go by before an online prospect receives the first email from you? How many days will you wait until you call your prospects? Does the design on your postcard match the design of your website?
The best way to handle this is to sit down with your marketing staff — or by yourself if you don’t have a marketing staff — and evaluate the process, beginning with lead generation and continuing all the way to the sale. You’ll also need to answer the questions that come up along the way.
Some of these questions you’ll want to ask and answer include the following:
- How am I going to generate leads?
- How am I going to receive these leads?
- Is the method of reception going to immediately let the prospect know they are in the right place?
- How am I going to get prospects’ contact information?
- How am I going to follow up with leads?
- How are my different follow-up methods going to work together?
- How often should I contact my leads?
Once you have built a solid structure for your marketing campaign, you can get to work implementing it. As you do, you will notice that your revenue numbers follow a pattern that correlates to your marketing output. And when that happens, you’ll have confidence that, even in your off seasons, you can get the leads you need by simply increasing your marketing output.
Joy Gendusa is the owner and CEO of direct mail marketing firm, PostcardMania. Joy began PostcardMania in 1998, with nothing but a phone and a computer, never taking a dime of investment capital. Since then, PostcardMania has expanded to offer its clients more services including website and landing page design and development, email marketing and full marketing evaluations — all while continuing to educate clients with free marketing advice. In 2011, PostcardMania reached almost $45 million in annual revenue and the company now employs more than 195 people, prints 4 million and mails 2 million postcards each week, and has more than 53,000 customers in over 350 industries.
? The 12 Principles of Manufacturing Excellence: A Leader’s Guide to Achieving and Sustaining Excellence
Larry E. Fast
Productivity Press, 266 pages
“The 12 Principles of Manufacturing Excellence” provides a practical approach for implementing and sustaining business strategies that promote manufacturing excellence. The author explains how to inspire top-notch performance while creating an atmosphere that encourages leadership and mentoring.
He provides examples that illustrate how companies have achieved vertical and horizontal alignment, he explains how to instill a culture that sustains high-quality and world-class performance via 12 principles of manufacturing excellence, and he provides methods to track progress by plant and by function, emphasizing lean manufacturing and Six Sigma tools to improve manufacturing operations.
? The Toyota Way to Lean Leadership: Achieving and Sustaining Excellence through Leadership Development
Jeffrey Liker, Gary Convis
McGraw-Hill, 272 pages
Many companies across the globe have adopted lean manufacturing practices but few have attained or maintained the levels of excellence that Toyota has. “The Toyota Way to Lean Leadership” sheds light on some of the reasons for this.
Liker and Convis (the former is the author of the popular “Toyota Way” series, the latter a former executive VP and managing officer of Toyota) offer practical ways for executives to spur their employees to focus their efforts on collaborating with co-workers to drive continuous improvement throughout the organization. Case studies demonstrate the methods Toyota uses to produce powerful, capable lean leadership.
? Supply Chain Transformation: Building and Executing an Integrated Supply Chain Strategy
J. Paul Dittmann
McGraw-Hill, 256 pages
As manufacturers expand their offerings and look for new ways to lower their cost structures, the complexity of their supply chain naturally increases. “Supply Chain Transformation” tackles this issue head-on, introducing a strategic framework aimed at helping manufacturers develop a first-class supply chain strategy.
Dittmann presents nine clear, concise steps for manufacturing executives to follow as they retool to improve their company’s management of supply chain dynamics. The book contains numerous real-world examples that illustrate the difficulties inherent in gaining organizational support for the major investments involved in reworking a company’s supply chain strategy. <<
We recently met a defense attorney who chatted with us about wooing a potential client who had a big case against a “whistle-blower.” What was our free, unsolicited advice for that meeting?
Stop calling the plaintiff’s key witness a whistle-blower. A whistle-blower is someone who comes into the case with a distinct credibility advantage, and therefore is someone jurors want to protect.
Instead, we suggested he describe it as a lawsuit filed by a “disgruntled employee.” Rather than ramping up that person’s believability, this language calls into question his or her motives for testifying.
Defining the language allows you to control the debate. Instead of allowing others to control the conversation with their potentially biased vocabulary, set your own terms with language that tells your story.
Control the terms
This is how so many companies became the leaders in their markets, because they controlled the terms: Kleenex for tissue, Chapstick for lip balm, Xerox for photocopy — and Starbucks for the Tall, Grande and Venti sizing system that most of us still use even when we’re buying coffee from a competitor.
Groupon’s catchy name — short for “group coupon” — has now become the word of choice to describe any online daily deal. Perhaps this is why, according to a Bloomberg report released this in August, Groupon still holds the majority of the market share in its industry.
Language can also be used to help you connect with others on a fundamental level. We recently worked with an emergency room doctor whose humility was in sharp contrast to the stereotypes about arrogant, presumptuous physicians. When he described his background, we were immediately taken in by his story of growing up in rural Kentucky and eventually going to medical school overseas.
But a few descriptors painted an even more appealing picture: This doctor was raised by an apple farmer and a schoolteacher, and after helping with the farm for several years when his father died, was named a Rhodes Scholar and earned his medical degree in London. Just a few more words, but the portrait is much more captivating — and his testimony that much more credible.
Watch for connotations
Language also worked — and didn’t work — for health care providers we met with in North Carolina. When we asked a doctor involved in a medical malpractice childbirth case why he chose his specialty, he gruffly replied, “It had the shortest residency.”
The answer might be 100 percent accurate, but it is also 100 percent likely to turn off a jury. A nurse at this same hospital had by far the better response to why she chose to work in labor and delivery: “I wanted to be there for that miracle.” Even we cynical jury consultants melted — and when she testified a month later, so did those jurors.
Your ability to define and control the language, whether it’s for a product, service or telling your side of the story in the courtroom allows you to own the terms of the discussion.
For example, Best Buy’s Geek Squad is so newsworthy that the media even reports when it switched its fleet of Geekmobiles from VW Beetles to Ford vans.
The Apple Store and its Genius Bar attract millions of visitors each year, and they’re not just gawking at smartphones. The Apple Store chain’s 2011 sales of $3,085 per square foot ranked first among U.S. retailers in terms of sales per unit area in 2011, almost double that of second-place retailer Tiffany & Co., according to a story by David Segal in The New York Times.
Whether in business, the courtroom or in the coffee shop, owning the language means your product or service is the one people will remember.
Chris St. Hilaire is the author (with Lynette Padwa) of 27 Powers of Persuasion: Simple Strategies to Seduce Audiences and Win Allies (Prentice Hall Press). He is an award-winning message strategist who has developed communications programs for some of the nation’s most powerful corporations, legal teams, and politicians.