Fundamentals. Vision. Strategy.
Nancy Schlichting knows they’re all business buzzwords. You execute on fundamentals, you strive for your vision, and you focus on your strategy. You teach your team about it, you reinforce it to them all the time. After some time, just hearing those words is enough to make your eyes glaze over.
But before you dismiss them as a few others in a long list of business clichés, Schlichting thinks you should reconsider. Every business needs guidelines, beliefs and practices that provide a template for how management and employees should operate on a day-to-day basis.
Without some kind of outline, a business has no direction. Which is why Schlichting structured her strategy and vision around the fundamentals that she wants to promote at Henry Ford Health System, the $4 billion health care network where she serves as president and CEO.
“We always start with our fundamentals,” Schlichting says. “We have seven pillars of performance that are really constant for us. Every year, we have to focus on our people, patient safety, service, growth strategies, our academic mission with research and medical education, a strong focus on the community and a strong focus on continuing to be stable financially. Those pillars really form our base. If we don’t perform well on those, there isn’t going to be money to make new investments and new strategic changes for the better.”
To allow everyone at Henry Ford Health System to execute on those pillars, Schlichting needs to put them at the center of all of her strategic planning, her vision for the future, and make them evident throughout her day-to-day interactions with her executive staff, physicians, nurses and other staff members throughout the 23,000-employee system.
What follows are some of the ways in which Schlichting promotes the system’s vision and strategy through all the avenues available to her, and some of the lessons she has learned along the way.
Though she runs a medical system, the way Schlichting and her leadership team form a strategic plan isn’t much different than the way a retailer or manufacturer might. Schlichting’s team identifies areas of competitive advantage, and tries to leverage as many ways as possible to accentuate those areas.
“When we focus on those areas of excellence, we try to take advantage of what we think are our areas of competitive advantage,” she says. “Frankly, it’s what any organization does — create a competitive advantage by trying to design and execute on strategies that others can’t copy easily. Then we try to take advantage of that model continually, always trying to figure out new ways to meet consumer needs, employer needs and community needs. It really gives us a great platform on which to build.”
For Schlichting and her staff, the market differentiators include the system’s medical group and insurance structure. Schlichting says Henry Ford is unique among area health systems in that it employs a salaried group of physicians in addition to private practice physicians under the organizational umbrella. The system also owns a health insurance plan with about half a million members, which gives Schlichting’s team an avenue to get closer to customers, major employers and community entities on the plan.
All of the information that the leadership team receives from the front lines helps the entire health system continue to identify and pursue the differentiators that will continue to ensure Henry Ford’s place as a leader in the regional health care field.
It’s a universal lesson that any business leader needs to learn when it comes to strategic planning: Stay in tune with what the market wants, and figure out new ways to give the consumers of your products and services what they need. That is how you turn customers into repeat customers.
“It’s isn’t just looking at the environment, it’s really looking at what is needed in the industry, looking at quality issues, service issues and access to the product,” Schlichting says. “It’s trying to focus on being comprehensive in your approach to business. That allows you to hopefully be proactive, as opposed to reactive, to the environment around you.
“You have to ask yourself what is specifically unique about your business, what you can create with the assets you have, what you can really try to achieve that is right for your organization. You have to have a vision for what has to be accomplished. If you have that vision, you can start to get creative around the strategies you need to form in order to get there. From my perspective, that is what we do here. We try to take full advantage of our organizational assets.”
Create a vision
Before you can plan to get somewhere, you have to know where you want to go. In that sense, a well-defined vision is the single foundational key to executing on fundamental principles.
The vision needs to outline goals that are ambitious yet attainable, and needs to be something that can link back to each person in the organization, so that everyone under your umbrella can feel a connection to it, and feel like their job contributes to the overall goal of realizing the vision.
Schlichting says corporate visions also need to have staying power. You can’t scrap a long-term vision for your company and reinvent the wheel every few months. Major crises, like the recession of the past few years, might force you to alter your goals. But unless your hand is forced to an extreme degree, you should strive to keep your vision consistent.
“The vision is hopefully something you can stay with for a period of time,” Schlichting says. “That’s because it has to be both inspirational and aspirational. The vision is typically not something you’ve already achieved. It’s something you’re working toward.”
At Henry Ford, Schlichting makes her vision personal for each employee by doing something very basic in concept, yet large in scale: She relates the customer experience to each employee.
“We’ve had a vision here for 10 years, and that vision is to provide the same quality of care and comfort that we want for ourselves and our family members,” she says. “What that has allowed us to do over the past 10 years was to really have a personal connection to a vision of excellence for every single person in the health system. There is not one individual working here at Henry Ford who doesn’t understand what it’s like to be a patient, or be a family member of a patient. It has allowed our housekeepers and dietary workers, our nurses and doctors, to all connect around that vision. It has been a highly motivating vision for us.”
As foundational as your long-term vision might be, there will be opportunities to take an alternate path and explore a new opportunity. You can’t get so locked in on your goals that you can’t see an opportunity. The key is to know when to make a detour and when to stay the course.
Schlichting says the opportunities you act upon should ultimately help you realize your goals, though maybe via a slightly different route.
“You have to have perseverance and commitment to what your strategy is, but you also have to have some agility,” she says. “There are things we’ve done over the past 10 years that have been strategic — what we wanted to do is what we did — and other things that were more opportunistic, such as the acquisitions of Henry Ford Macomb Hospital and Henry Ford Medical Center – Cottage. Those were things that emerged as opportunities, and based on us having our antenna up, and us being agile and flexible in terms of things we thought would help the organization.”
Your ability to remain opportunistic is largely reliant on having an open mind and, within reason, an open wallet. If you want to have the latitude to make an opportunistic move, you need to save enough in other areas to develop a financial reserve.
“You have to be open to those types of opportunities, and some leaders are often not as able to be open like that,” Schlichting says. “So you do need to have a financial position that gives you some latitude to be able to finance these opportunities as they come along. The financial structure and the leadership position both need to have strategic and opportunistic elements, and afford you the ability to react and move quickly as the opportunity arises. You need the frame of mind along with the financial resources that are available.”
Learn to say yes
It’s one thing to have fundamentals. It’s one thing to develop core values, a vision and a strategic plan. It’s one thing to say you’re going to execute on all of it. But it’s entirely another to get all of your employees to buy in and work alongside you.
“Engagement” is another business buzzword that you’ve likely heard countless times before, but no matter the terminology you want to use, the need to have employees on board and moving in the same direction with you is a universal need in business. If you don’t have your employees with you, you won’t be successful.
You get your employees on board by enabling them to have a hand in helping your organization to realize your vision. And there is a three-letter Swiss Army knife of a word that you can use to empower employees in a variety of situations.
“I always tell our leadership that the most important word in my vocabulary is ‘yes,’” Schlichting says. “You don’t want to create a culture that is supposed to embrace innovation, or a culture that allows you to take advantage of important opportunities, unless you have that kind of view of the world. Because people don’t come to you twice. If they come to you with their exciting new idea that they thought through and are committed to and you say no enough times, people aren’t going to come forward anymore. You’re also not going to have people in the outside community think that you’re an organization that is open to new ideas and opportunities. It’s those kinds of messages that are important.”
That doesn’t mean you let everyone run free with their ideas. You still need your people to innovate in the same general direction. “No” is still an option, but one you should use only when the idea or suggestion does not fit. And if you tell someone ‘no,’ show them why you can’t use the suggestion.
“At the same time, you need to have discipline around the operating metrics, around performance strategies. You still need to have that fundamental discipline, but it’s also helpful to have an attitude that says ‘yes’ more than ‘no,’” Schlichting says.
How to reach: Henry Ford Health System, (800) 436-7936 or www.henryford.com
The Schlichting file
Education: Bachelor’s degree in public policy studies, Duke University; MBA in hospital administration and accounting, Cornell University
Schlichting on having a positive attitude: We all wake up in the morning with either an attitude of optimism or pessimism. I think it has to come from within. As an individual, you really have to be a positive person. And there are days when I act a bit more, come in on stage and perhaps acting more than I believe it. But you have to do that some days. Not to be unbelievable, but to be encouraging to others. We all have those points when things don’t go well, and those are the true tests for leadership. Because how leaders handle those tough times frankly are your defining moments. People watch us.
Schlichting on building a leadership team: It is probably the most important job of a leader, making sure they have the right team around them. And with the right team, it can make your life a lot easier, it can make things go very well and smooth. But with a team that is not engaged in that way, it can be very challenging. I think it starts with the values of the individuals. When I interview people for my leadership team, one of the first questions I ask them is ‘What do you stand for as a leader?’ Sometimes they look at me like I’m a little nuts, like they’ve never thought of it that way, and that tells me something.
Schlichting on internal communication: The direct manager is the most important person from a communication standpoint. We create tool kits and cascading information in the organization, and we have a communications team that I meet with every month. So we strategize about the messaging, about how we’re helping managers, supporting them, doing often with videos and tools that help them communicate effectively.
Like most business leaders, Frank Napolitano Jr. has a recession story.
His company, Global Affiliates Inc. — which does business as GlobalFit — saw a decrease in the number of consumer products sold. So the $20 million fitness solutions company, which Napolitano heads as president and CEO, needed to pull back from the consumer market and find new ways to provide fitness-oriented services.
Natpolitano’s company didn’t completely reinvent itself, but it certainly developed a new perspective on driving revenue.
Smart Business spoke with Napolitano about how to get creative when it comes to finding customers in a challenging economic climate.
How did you minimize the negative effects and capitalize on the positives?
The only thing you can really do when outside forces are driving prices down is sell fewer of those products and more of the others. We certainly worked to expand the number of gyms we worked with that gave us an opportunity to sell more, even though we were making less on each.
That is the way we mitigated the negative. On the positive, consumers were not so excited about spending money, and while prices on consumer products were largely declining, we found that companies were more interested in buying programs for their employees. We shifted our focus toward getting companies engaged in buying products that would help prevent employees from getting sick, injured or overweight in the first place.
What would you tell other business leaders about mitigating the negative and focusing on what the business does well?
The lesson every leader learns is that when you’re in the middle of battle, when things like a major recession occur, sometimes it’s hard to think strategically because you’re just trying to keep your head above water. If you do look at any of those situations from a strategic perspective, there is pretty much always something good mixed in with all the bad. The key is to find it, grab it and make the most of it.
How do you scan the market to figure out the best way to serve it?
Accumulating information about what is going on in your market is absolutely critical. It is important that you never lose sight of the competition, but it’s also important that you don’t let them drive your strategy.
You can’t put your head solely in your business. You have to be out there participating in the community, and in the community of your business. There are a fair number of organizations that bring together industry leaders trying to establish what they want and what they need, to help their employee populations and their insured populations be the healthiest they can be. It’s by participating in those outside activities that you learn a great deal about what they want and need. From there, you develop products and programs to meet those needs in order to have the greatest chance of success.
But you don’t want to be a lemming. Just because everyone is heading in one direction doesn’t mean it’s the right one, and it’s usually the creative idea, the one that is not the same as everyone else’s, that produces the greatest return on investment.
How do you lead the market instead of following?
That has to be the hardest question in the history of the world. The reason why there is always one person that has to end up making the final decision when the many options are presented to them by their senior staff is because part of that decision is made based on the facts available. But part of it is always based on your instincts, and you rely on your instincts. As imprecise as that answer is, it’s probably as good as it gets.
How to reach: Global Affiliates Inc., (215) 751-1992 or www.globalfit.com
When Bob Funari and his executive team acquired majority ownership of Crescent Healthcare Inc. in 2004, the company was facing severe economic challenges.
But by moving away from commodity-based transactional relationships and toward value-added partnerships, Funari soon changed the outlook.
His team has forged a new culture that values teamwork, accountability and innovation. Along with it, they’ve more than doubled sales, eliminated significant operating losses and achieved profitability goals.
Because of this, Smart Business, ThinkASG, IBM and Union Bank named Funari one of the 2011 Smart Leader honorees. He shared how he innovatively transitions his company’s strategic direction to overcome challenges.
Give an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Crescent Healthcare was a company facing severe economic challenges when our executive team, backed by two private equity investors, acquired the majority ownership in 2004. Over the past six years we have created a culture that values integrity, professionalism, teamwork, personal accountability, innovation and a bias toward action.
As a result, we have more than doubled sales, eliminated the significant operating losses, and achieved our profitability goals. We have financed all of our growth and investments from internally generated cash flow while reducing our bank debt by 80 percent.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
Our mission is providing high-quality care that is both appropriate and cost-effective to patients with complex disease problems in alternate settings.
For the past three years, we have been focused on transforming our business relationships with health plans, hospitals and physician groups. We are rapidly moving away from transactional relationships where the services we provide are perceived as commodities and where competition is based on price, to partnerships where there is an opportunity to create significant value for our customers, resulting in benefits for both of our organizations.
Two specific examples illustrate this change in our strategic direction:
- We reduced the cost of IVIG infusion therapy for a major health plan in California by over $4 million per year by medically managing their members to insure that they received appropriate and cost-effective care with excellent clinical outcomes and positive patient experiences.
- We reduced the cost of unfunded care for a major health system by over $1.5 million per year by redirecting the delivery of care to more cost effective alternate site locations. The quality of care we provided resulted in no readmissions and high levels of patient satisfaction.
How do you make a significant impact on the community and regional economy?
The services we provide improve the quality of life for people throughout California. Every year, the care we deliver saves or sustains the lives of over 30,000 people.
We have increased the number of people working for Crescent Healthcare from 436 in 2004 to 535 today. At the time we acquired the majority ownership position in the company, we made significant improvements in the health care and retirement benefits we provide to our employees.
Our family foundation contributes over $150,000 each year to organizations that address the health care and educational needs of children who have significant unmet needs.
How to reach: Crescent Healthcare Inc., (800) 722-8085 or www.crescenthealthcare.com
It was the year 2000, and John Scardapane was in his salad days leading Saladworks LLC.
The phrase “salad days” derives from a line in the first act of William Shakespeare’s “Antony and Cleopatra,” in which Cleopatra laments her earlier involvement with Julius Caesar:
“My salad days, when I was green in judgment, cold in blood…”
Scardapane isn’t cold-blooded, but the former chef was green in judgment as he led the restaurant chain he founded in 1986 toward a franchising concept that could serve as a springboard to rapid growth, but required the corporate leadership to provide a strong, stable support system for prospective store owners. It was something Scardapane had yet to address.
“I was very green about multi-unit operating,” he says. “We had no structure, we had no core values, we had no manuals, no training programs. We were doing extremely well, but our volume was covering a lot of our seams.”
Scardapane — also the chairman and CEO — decided to begin franchising the stores to family members and friends, hoping they would take the restaurant concept and run with it the way he had. Scardapane’s family and friends had expanded Saladworks to 25 locations as the century turned, but nothing was standardized except for the restaurant name.
“It got to the point where I either had to start building an infrastructure to support them properly, or find someone who could do it,” Scardapane says. “I had no success finding anyone else, so I decided to start building the infrastructure.”
In 2002, Scardapane began selling franchises to the public, and now Saladworks is a chain of more than 100 stores with locations in the New York, Philadelphia, Washington, D.C. and Atlanta areas, along with locations in California, Florida and Missouri. The company employs 2,500 between corporate and franchised locations.
But to get there, Scardapane had to build a growth plan, a strategy for the future and a culture. In short, Scardapane needed a system that worked.
Define your culture
In the early years of the previous decade, as Scardapane began franchising Saladworks locations to family and friends, he knew something was missing from the business equation. But he wasn’t sure what it was.
Scardapane sought out the assistance of executives at Commerce Bank and Wawa Inc., two companies he admires. Through those companies, he found a pair of experienced executives who were willing to mentor him and help grow Saladworks.
“We found a banking executive at Commerce Bank who showed me how Commerce developed their culture and strategies,” Scardapane says. “The gentleman from Wawa came in as a consultant. I asked him to spend a couple of days in the company, go around to every employee and talk to them, come back and give me your opinion on what is happening. He came back to me after a few days, and told me he was extremely impressed. He felt we were running a company structure like you’d have for 500 stores, but he felt the one thing that was missing was a culture.”
Scardapane wanted to know the reasoning behind the need to develop a culture, and why it was critical to his company’s success.
“I asked him, ‘What is a culture and why do I need it?’” he says. “We talked about it, he helped me put everything in writing, and everything else evolved from there. I found out that once you have that culture in place, that is when you can start empowering everyone in the company to make decisions because you know they’re all going down the same path.”
Scardapane decided to craft five core values that would serve as the foundation of Saladworks moving forward: customer service, a passion to be the best, valuing other team members, doing what is necessary to get the job done, and hiring the best people. Those five principles became Saladworks’ DNA, and something at the heart of the vetting process when Scardapane and his team are searching for new franchisees.
“Whenever we’re interviewing potential new franchisees, we want to see if they match our culture,” he says. “We’re really interviewing them concerning whether they have the passion to be the best, are they willing to do the right thing, do they have integrity and honesty. Are they going to do whatever it takes to get things done, and are they going to grow future leaders? Each department has specific questions that pertain to their area, but they all follow those guidelines.”
But even if you hire the right people, you won’t be able to fully engage them in your company’s culture without involving them in the process of shaping your plans for the future. Each year, Scardapane involves his corporate staff in the strategic planning process. Involving the corporate staff allows the home-office work force to better reinforce the culture among the franchisees.
“Everybody has a chance to ask whether we have lived up to our values in the past year,” Scardapane says. “And we look at whether those values are reflected in our programs for the next year. So it’s basically us asking ourselves, ‘Do we still believe in our values?’”
Scardapane drives the discussion down to the franchisee level by taking selected franchise owners and putting them through the same process. To make a truly open forum where no opinion is off limits, he bans members of corporate leadership from the franchisee discussion.
“Nobody from the home office is there,” he says. “I have a consultant help them get through the process, but anything they say never gets back to the home office regarding who said it. Then we compare their strategic plan and what the franchisees think the strategic plan should be for the coming year to the one we did for the home office.
“That way, we have a home office strategy and a strategy from the field, from the people who are actually out there working in the stores. It does two things: It helps us understand what is going on in the field, and it gets the franchisees to buy into the company culture. We share the information in a PowerPoint presentation every year at our convention for all of the franchisees.”
If you need to build or revamp your culture, Scardapane suggests you do what he did: find a mentor and have that person analyze your business.
“There are a couple of books out there, like ‘Good to Great,’ but they won’t give you the details and development, how to actually put a plan together,” he says. “You really need some support and structure and someone to take you through the process. Once they’ve gone through once or twice and shown you how, you and your team can take the ball and run with it.”
Maintain your momentum
Scardapane has learned that without an established culture and empowered, educated work force, you’re going to find growing your company to be a difficult prospect. You may have the capital and manpower to grow, but you won’t be able to harness it in any meaningful way.
Once you’ve established a culture and have the right people on board, however, you need to become something of a maintenance man, with team members constantly on the ground in all of your locations, offering support and promoting accountability.
Scardapane keeps his cultural momentum strong with a team of business coaches who each oversee a handful of Saladworks franchises. It’s the coach’s job to maintain contact with their franchise owners and address any issues they might be having.
Finding business coaches and training them is an involved process in and of itself.
“We’ve found that even if you have experience in your field, even if I bring in a guy who has 15 years of experience in the restaurant, it takes about six months before he can go out and support franchises. He has to know everything possible about owning and operating a Saladworks store. He can’t just read the manual. You have to spend a lot of time in the store working as a business coach before you can adequately support the franchisees. It takes a lot longer than most companies realize.”
One of the continuous challenges facing Scardapane is how to maintain a growth support structure that can stay ahead of the rate of growth. He wants to have a system that is capable of continually absorbing new stores into the fold, which means committing people and dollars to support locations that haven’t opened yet, and doing it months in advance.
“You really have to bring in the structure before you expand,” Scardapane says. “If I know we’re opening 25 stores this year, I’ve already brought in two business coaches, and they’ve already been in the pipeline for four months. That’s why the whole system needs a lot of cash flow.
“Where companies fail is they go out and sell a lot of franchises, but they don’t have the infrastructure to support it. They’re trying to backfill the infrastructure, and they don’t have the people to support the stores that are opening.”
If you’ve built the system properly and everyone in your organization is adequately supported, your company will begin to develop its own momentum. Leaders will groom other leaders, the daily business of the company will be well-managed and you will be free to pull back and view your company’s course with a wide-angle lens.
“Once you’ve been doing it for a while, you can do more managing on a macro level,” Scardapane says. “Once you get used to the ideas of others paying off, and watch them start to grow future leaders, you start believing in people and you start giving them more responsibility. And you become more open because of that. You start to realize that you don’t have to do everything yourself. That’s important, because as a leader, you really have to recognize that you’re going to need the help of others, and that sometimes their ideas are going to be better than yours.”
Scardapane wants team members who are smarter than him in their area of practice. He doesn’t want to have to be the expert on everything in his company. He wants to know that once he’s defined the boundaries of the company playing field through the culture and strategic plan, he’ll have star performers on the field making plays.
It’s the only way to ensure the culture he established more than a decade ago remains strong and allows Saladworks to continue its rapid growth, carrying Scardapane well away from those salad days of old, when he was learning on the job.
“It’s about what the leader does once he’s built the infrastructure of core values and strategic planning,” Scardapane says. “Then, it’s time to let people grow and make their own decisions. My entire team knows that the only time I get upset is when they don’t make a decision. I don’t get upset over a wrong decision. I get upset when they make no decision.”
How to reach: Saladworks LLC, (610) 825-3080 or www.saladworks.com
The Scardapane file
Born: Camden, N.J.
History: I was a chef at a New Jersey country club in 1985 or so, and I could see our golfers were eating more salads than burgers. We had a section of the kitchen that would make these very attractive salads with various vegetables, and I started to have an idea for putting the salad concept into a food court environment. An opportunity came up to buy a location at the Cherry Hill Mall, and I brought the idea in there. But the people who ran the mall told me that salads wouldn’t be successful enough to pay the rent. They asked me to find another concept.
On the third try, they agreed to give me a chance if I’d sell sandwiches as well. They thought sandwiches would be strong enough in sales. I agreed, and opened my first store in 1986. The salads were so successful, we became the highest-grossing counter in the food court.
What is the best business lesson you’ve learned?
Our major tipping point as a business was bringing the culture into the corporate office and franchise system. So my most valuable lesson is you need to have a culture.
What is your definition of success?
Realizing our vision would be our success, and that vision is to be the greatest restaurant brand. What I love to do is build something great. I get a sense of satisfaction watching our home office people rise through the ranks and watching our franchisees become successful.
Patrick Sanders has more than 100 business partners. And that’s not including the people in the front office of Max Muscle.
Sanders is the president of Peak Franchising Inc., the franchising business for fitness and nutrition company Max Muscle. He is in charge of finding and coaching new owners for Max Muscle stores, which generated nearly $50 million in revenue last year. The company has grown to more than 140 franchised locations, meaning there are more than 140 people who need to get on the same page with regard to Max Muscle’s mission and vision.
Smart Business spoke with Sanders about how he finds, trains and communicates with all of the franchisees under his umbrella.
What is the biggest franchising challenge you have had?
Franchising has its challenges because franchisees are your partners. In our case, there are hundreds of individual store owners out there. We don’t view it as an employer-employee relationship. That’s not the way franchising works. So as you ask the question, what is the biggest challenge in leading this organization, I’ve got hundreds of independent store owners that we have to try and get on the same page as you talked about. How do we set goals for them, how do we set a vision, how do we get them all going in the same direction?
That has been my biggest challenge, and we effectively overcome that through communication. We communicate with our franchisees and corporate employees on an ongoing basis. Certain segments are weekly; other segments are daily.
How do you facilitate dialogue among employees and franchisees?
I’m really pleased that every week, we have a systemwide conference call with all of our franchisees. Every week, a franchisee dials an 800 number and the whole system gets on the call, and we discuss every issue that we’re attacking that week.
In addition, there are subsidiary groups of franchisees and corporate employees that. We also dialogue with every week in a conference call forum. I find these to be really our primary vehicle because it’s a discussion. You can hear people talking back and forth; you can hear inflections in their voice and passion, and all of the things that make people so great at communicating.
What would you tell other business leaders about bringing people together in a company?
It is a bit challenging. I centered it around a value proposition. I don’t believe I can get both employees and franchisees to grasp and accept our vision, and thusly our goals and objectives, if they don’t see that as a positive in their particular area of interest. For franchisees, as with many people, we need to make sure the value we’re bringing them is making them more profitable. I have a tendency to overcome those challenges by showing people the value that this particular initiative or program or concept has, showing them the value of how that benefits them. That facilitates that dialogue. Suddenly, they’re asking questions, they’re saying ‘Wait, here is a viewpoint.’ That suddenly opens up the floodgates and you get this interactivity, which when you’ve had a chance to do that with them, then they understand what you’re trying to accomplish, we understand their reality. And by understanding both of those components, understanding the reality and challenges that each of us have there.
How do you set boundaries in discussions to keep people focused on end goals?
It’s interesting, because can you imagine having 200 people on one conference call? It can get really interesting. What we’ll do for each of these opportunities to communicate is we do publish an agenda for each of those calls. We’ll send out an agenda via e-mail, and everyone is pretty trained to know they need to stick with the agenda. If they have other issues they need to bring up, they go back to us independently, knowing that we’re going to try to get it into one of these conference call forums.
How to reach: Max Muscle, (714) 456-0700 or www.maxmuscle.com
There seems to be a widely held belief that success correlates to time in the business world. In other words, business owners need to have a number of years under their belt before attempting to expand or branch out. I ask, why? Why not let your experience be a part of your growth?
I look back at the evolution of my duct cleaning business, DUCTZ. It grew from my daughter’s bedroom into the nation’s largest duct cleaning franchise with more than 150 units. Now, along with its sister franchise, HOODZ, it benefits from ownership by BELFOR, the world’s largest property restoration company. All of this in less than five years’ time.
How? Through partnerships, mergers and acquisitions. And most importantly? A forward vision and an open mind from all members of our team.
When I started DUCTZ, I had a passion for what I was doing, but insufficient knowledge for how to share my vision. I needed access to the people and places that needed these new services. Who better to open those doors than the contractors who did have the access? Once you convince key people that you offer a quality service, they will naturally begin to refer you to others. Then, it’s not about how little time you’ve been in the business, it’s about how long of a time they’ve been in the business.
Seeking a way to accelerate my growth, I identified an existing, synergistic franchise with a growing number of units. I reached out to this company. It turns out, the timing was right and a partnership was a great fit. We hitched our wagon to theirs and increased our reach almost overnight. That was step one.
Step two was to seek people or services to fill a void in my current system. I met with a company that helped write the federal government standards for indoor air quality. My recent partnership had afforded me the credibility to negotiate with this new company; we identified our strengths and their needs. Together, we would “have it all” and the merger became a reality. This move, single-handedly, made us the largest duct cleaning franchise in the nation. In effect, I had to give up a piece of the pie, but in so doing, I orchestrated the opportunity for a much bigger pie.
When we established our niche as the nation’s largest duct cleaning franchise, we were given an opportunity by BELFOR to do work for them around the country. Why? Because we were strategically positioned — we had locations in the places where they needed us. This association with BELFOR enhanced our credibility on a local level, which led to increased referrals and contractor relationships. It wasn’t long before BELFOR made the offer to acquire our company. An association with a company of this magnitude opened a new world of opportunity while reinforcing our core model.
Here are some other things to remember about accelerating growth:
Never lose focus on your core business.
Whether embarking on a partnership, merger or acquisition, if you’re not careful you can strategize your way into an entirely different business. Stay open to diversification as long as your core business stays intact.
You cannot be afraid to think outside of the box.
To think out of the box is your job — if you don’t, someone else will. Your competition is strategizing about how to get ahead of you as we speak. My advice is to actively live your role as a strategist — don’t get bogged down in the daily emails and operations — that is not where your time is best spent.
The best strategy? Never stay static — it’s crucial to remain dynamic and to keep moving forward.
John Rotche is the president of Ann Arbor-based BELFOR Franchise Group Inc., a multiconcept franchise system. The company’s two franchise concepts, DUCTZ and HOODZ, center on the compliance and proper maintenance of commercial kitchen hoods and residential and commercial air duct, carpet and upholstery cleaning services. For more information, visit www.belforfranchisegroup.com.
Eileen Gittins knew creating an online book publishing business meant she wouldn’t have physical stores where she could her meet customers face to face. And yet, she’s found other ways to reach out, from sponsoring international events to opening temporary pop-up stores in London and New York.
“Without having permanent retail locations, when you are an online brand like this whose product makes physical things, how do you get out there in the physical world?” says Gittins, founder, president and CEO of Blurb Inc.
And by answering the desire of digital consumers for shared, interactive experiences, she’s grown Blurb to $45 million in revenue in five short years.
Smart Business spoke with Gittins about how to build relationships with consumers as an online brand.
Focus on your customer. You are just uncommonly focused on the people, on your sweet spot. And just staying ahead of that is the way that you continue to become the one that matters.
For us, it’s the creative enthusiast and the creative professional markets. So we’re explicitly not focused on what others call the ‘chief memory officer,’ the mom at home who’s got 40 minutes to whip something out before the baby wakes up. That’s not our market. Our market is people who are creative at some level and who are really enthusiastic about their photography, their design — whatever it is, they’re into it — all the way up through creative professionals. When you focus your efforts like that, it becomes possible to stay ahead of the curve because you’re not spread too thin.
Build an experience. Instead of looking at this challenge as: We print books, so that’s the business you’re in, we said, ‘No, no, no.’ What this is about is experiences increasingly for people who are digital natives and they want an experience of making the book that frankly helps them relive the content, whatever it was — their trip to Jamaica, their family reunion, a recipe book, when they had that fabulous meal for Christmas every year when they were a kid.
We knew if we built an experience, where the experience of making the book was frankly as fun and rewarding as getting the book, then this would be the kind of product that people would talk about and it would get its own viral adoption.
Create opportunities to connect. Every year we have a big, worldwide competition called ‘Photography Book Now.’ It invites people all over the world at all levels of skill to submit their books in different categories. And it’s not just a competition online. … Last year we had meet-ups in 11 cities all over the world, so that there are opportunities for people to come and meet us and frankly for us to talk to folks who are customers or would be customers about their experience.
They feel a personal connection to this brand, and I think it’s because we enable them to do something that makes them look better than they ever thought.
This last year we had almost 40 percent of the entries from outside of the United States, which is why we go to Paris and Berlin and London and New York and L.A., Toronto, just all over the place in these meetups. So that’s a huge part of our approach to the markets. We joke here — but it’s not a joke — that offline is the new online for Blurb. Our books are physical, tangible things, and people want to meet up in physical space and check each other’s books out, look at books, hold books — hold them in their hands.
Share your passion. I joke that my title should really be chief storyteller not chief executive officer, because that’s how I manage and lead is through stories, great stories that help people understand why things matter, instead of just the data telling them why things matter. When there’s an emotional component to that, it’s memorable and actionable.
The first thing that we look at in terms of hiring people is passion … and the reason for that is if you are passionate about something, anything, whether it’s skydiving or making cupcakes, then you are going to have a lot of empathy for our customers, who are extremely passionate about the thing that they are making. You get it. You just get it. So that’s like music is to you. That’s like skydiving is to you. This is somebody’s passion.
How to reach: Blurb Inc., www.blurb.com
You’ve heard the saying, “if you do what you’ve always done, you’ll get what you’ve always gotten.” As leaders in the Columbus region contemplated the community’s future and the importance of economic development, they understood that change was necessary. That change had to be broad-based and include a variety of people and perspectives. Here’s our story of making that change.
Nearly two years ago, the Columbus region embarked on a journey that has transformed the way in which it tackles the economic development of the eight-county, central Ohio region. The discussion began with The Columbus Partnership following a situation that forced the community to scramble to save an important local business. Members of the partnership, a group of more than 30 top business and community leaders representing major corporations, reflected on the way in which the region organizes economic development. Following months of research, benchmarking and discussions, my job was to return a recommendation to The Columbus Partnership. While many may have expected a proposed solution that put the partnership at the helm, I felt strongly that while this situation required a laser vision, it also had to be driven by divergent brains, talents and interests. This felt risky and was a change for our community — exactly what was needed.
I recommended and we executed a broad engagement strategy that started with a series of leadership round-tables that, over time, brought together more than 1,500 people representing big business, small business, government, elected officials, young professionals and more. Each round-table session was a three-hour conversation of our community, its strengths, its weaknesses, economic development successes and failures and most importantly a discussion on our collective aspirations. We asked a lot of questions, did a lot of listening and connected the dots as common themes emerged. Columbus 2020, a 10-year vision on economic development was born through broad community engagement.
Now to my favorite part of this story. A transition team was formed to discuss, debate and decide just how economic development could be different for our region. Each member of that team had skin in the game — they each represented organizations that had a hand in economic development. Members represented organizations including The Columbus Partnership, Columbus Chamber, TechColumbus, the city of Columbus, Franklin County, CompeteColumbus, the Columbus Foundation and the Mid-Ohio Development Exchange (MODE). This team came together at 8 a.m. every single Friday morning for more than one year. They did so because they decided to, not because it was dictated. These organizations had collaborated before but this situation was different. This time, the group was focused on a common vision, one that could make transformational change for our community. And, they knew that staying the same was not an option. Fueled by coffee, passion for our community, and a willingness to set individual interests aside, they reviewed, debated, questioned, presented options and, in the end, made difficult decisions.
Doing things differently
Today, Columbus2020 is our region’s economic development integrated strategy. It’s not a new organization but a compilation of organizations, each playing a role in achieving our aggressive goals for the region. And it’s working. As a community we’ve secured more investment in economic development than ever before. More organizations are contributing financially and with other resources. There is enthusiasm, commitment and, most importantly, a willingness to look through a different lens.
I congratulate Smart Business on recognizing a diverse group of business individuals as the 2011 Smart Leaders class because it’s this diversity in thought and action that will continue to improve our region. As a community, we must be open to ideas. That’s one of Columbus’ greatest assets. Let’s use it to our advantage.
Alex Fischer is the president and CEO of The Columbus Partnership.
Today, the picture of St. Mary’s Medical Center is much different than when I first walked through its doors as CEO four years ago. We have improved many areas, including programs, services, medical staff, quality, patient services, employee morale and financial stability.
It took a hospitalwide movement to shift St. Mary’s into the hospital that stands today, as well as a lot of hard work and dedication from the executive leadership team, medical staff, board and employees. As I reflect on the many changes that we’ve implemented to turn around the hospital, I can identify four key elements that drove our success: embracing change, engaging employees, building upon strengths and inspiring innovation.
In today’s market, change has to be the executive’s friend. We live in a constantly changing environment and when internal and external forces evolve, businesses need to do the same. For any organization considering a new direction, it’s important to refocus the executive leadership team to evaluate where improvements can be made in the current business model and develop a strategy for action. This often involves creating a new brand or image for your organization that reflects both the legacy of the organization and its new vision.
The next critical element is employee engagement. It’s vital to understand employees’ perspectives and discover what they need to be satisfied in their work. To reflect a new image, employees must be actively involved. They must feel engaged and take pride in the organization for which they work. At St. Mary’s, we immediately established an employee relations program with a designated employee relations staff member. Directors and managers should also be encouraged to boost morale by positively reinforcing employees that exemplify a job well done. With these resources, we were able to develop specific programs to improve our employee and physician satisfaction as well as more organizationwide celebrations and activities, consistently recognizing employees for their merit within the organization.
When implementing change, you also have to secure the support of all the people who make the organization tick. As a hospital, St. Mary’s dedicated a lot of resources to expanding our physician relations program and to supporting a medical leadership that had our patients, the hospital and its legacy’s best interests in mind. We increased communication with physicians to get them more invested in our hospital’s success. We also developed a new governing board that could evolve the medical staff leadership into a more cohesive, cooperative group that worked together to envision the St. Mary’s of the future.
With a strong and dedicated workforce, an organization has the tools to better execute its strategy for growth and development. But when deciding how to prioritize and manage strategic capital investments, it’s always important to make sure they are realistic and within your organization’s resources. At St. Mary’s we are equipped to care for very high-risk patients with our trauma center, Level III Neonatal Intensive Care Unit and Children’s Hospital. Therefore, we set out to grow and expand services that support this infrastructure, such as our Advanced Orthopedics Institute, Neuroscience Program and our Comprehensive Stroke Program.
Lastly, it’s essential to have an organization that embraces innovation from the top down. St. Mary’s has achieved great success in the last four years; however, there’s much more to come. It’s my job to first get people thinking, and second, get people motivated for action. I’m constantly asking questions and proposing new ideas and new ways to look inside our hospital and within our very competitive market. This insight helps us predict what might affect us in the future so we can shift our business plan accordingly. Innovation drives us to look ahead, embrace change and continue to evolve.
Davide Carbone has been CEO of St. Mary’s Medical Center and the Children's Hospital at St. Mary's since 2006. Prior to assuming his role at SMMC, he served as vice president of operations and market initiatives for the Hospital Corporation of America, and CEO of Aventura Hospital and Medical Center in Aventura, Florida. Reach Davide at (561) 844-6300.
André Thornton doesn’t make excuses. He didn’t do it as a baseball player with the Cleveland Indians and he doesn’t do it as president and CEO at ASW Global LLC.
In both cases, he faced sizable challenges.
In the late 1970s and early 1980s, the man once known as “Thunder” hit a lot of home runs, but played in front sparse crowds at cavernous old Cleveland Municipal Stadium with a team that had almost no hope of ever winning a title.
Today, Thornton leads the 170-employee supply-chain solutions company in the midst of an Ohio economy that is still recovering from the 2008 recession. But just as he did in his playing days, Thornton stays laser focused on the job at hand.
“You can’t sit back and say, ‘Well, I’m in here in Northeast Ohio, so therefore, I’m crying about business going out all over the world,’” Thornton says. “Well, that’s not going to change. You have to figure out a way to be competitive and to survive in an ever-changing global marketplace. That’s what a leader and his leadership team is always thinking about.”
When Thornton bought ASW in 2007, he saw employees that had quite a bit of fear about what the future might hold.
“People’s anxiety levels were up,” Thornton says. “Frustration was up with things going on around them. To go through those ups and downs, you really have to trust the people you are following.”
So it was up to Thornton to be open with his people and give them a reason to trust him.
You need your employees to be an active and committed part of your team so they can do their best to help you compete. You can start by clearly explaining to them what you’re looking to do.
“It’s making sure that the plan you have in place, people can understand it, they can believe in it, they can trust it and they can see the practicality of it,” Thornton says. “They can see the progression even though they may not see all of the plan rolled out at once. They can see a progression of where you are trying to go.”
Thornton draws a parallel to the very nature of his business, which is to provide solutions for clients with warehousing and distribution needs. You need to do the same with your employees.
“This is where we’re going and this is why we’re going there and this is what we want to accomplish along the way and this is the benefit to all of us,” Thornton says. “Those are things that a leader has to establish.”
But it’s not just your ability to explain a balance sheet or lay out a strategy that is going to make the difference for your business. You need other people who can play leadership roles too and help you move things along.
“I need to have the right people in place to help promote, direct, guide and advocate the vision throughout our organization,” Thornton says. “That’s through leaders both formal and informal in your organization. They have to buy into it and continue to advocate. They have to be people that have the respect of the organization. What I mean by that is they are not only saying something, they are doing it. Their lifestyle and management style is one of respect and one of integrity.”
And while respect doesn’t have a slot on your balance sheet, it’s probably as important as anything in determining whether your business succeeds.
“It’s the way you carry yourself,” Thornton says. “It’s what you do and how you do it. It’s how you treat people. It’s how you listen. All those things are vitally important because for you to follow me, there’s a respect level that needs to take place.”
André Thornton is a respected man in Northeast Ohio and that’s something that matters a great deal to him. It should also matter to you as the leader of your business.
“We see leaders struggling today,” says Thornton, president and CEO at ASW Global LLC. “It is often around a lack of management around their personal life. Look at the breakdowns that we see taking place in the business community and the political arena. “You are constantly being bombarded with all sorts of information, challenges, requests and opportunities. If you don’t have a way to manage that in your own life, it could throw you off kilter. Whether it’s success or lack of success, people respond to those things in ways that are not healthy.”
So take a moment once in a while to look in the mirror and assess what you see.
“Be honest in assessing your own personal management,” says the leader of the 170-employee supply-chain solutions company. “That it is not a hindrance or deterrent to the success of your organization. Secondly, make sure that what you’re doing organizationally is not a deterrent to the success of your organization.”
How to reach: ASW Global LLC, (888) 363-8492 or www.aswglobal.com