SBN Staff

Sunday, 25 April 2010 20:00

Driving through the recession

Brian A. Rott nearly had tears in his eyes at what he saw as he toured available office spaces for his expanding businesses, Cart Mart Inc. and Superior Onsite Service Inc.

“The desk was left with his dried up coffee ring on the desk. … Post-Its still on the walls. Photographs stapled to cubicles,” he says. “It’s like they just closed down. Companies that they would advertise on TV and family-run businesses. Done. It’s just heartbreaking.”

As president and CEO of the golf car company and the golf car service company, he navigated his 48 combined employees through 2009 without a single layoff. In fact, he acquired his largest competitor in the area last year, resulting in his need for new office space, and he added a 401(k) matching program to show how committed he was to them.

“I just figured if I’m going to invest in anything, I’m going to invest in the employee base and keep people motivated,” he says.

Smart Business spoke with Rott about how to run your business effectively during a downturn.

Build trust with customers. If you maintain good relationships with your customers and especially your suppliers, then your business can sustain a downturn regardless of the economics.

We have great relationships with our suppliers, and we pay them on time regardless of how much we’d like to hold off another two weeks. In turn, we get our equipment and supplies fast and get maybe better service because they’re thrilled that we’re strong. Look at who are your best customers, and you take care of them even more so during the downturn. It just works.

You have to run an honest organization and not panic like so many people do or have done. The key is to always deliver what you say you’re going to deliver when you say you’re going to deliver it. Never let them down. That’s business 101, and always take care of your customers. Our customers could be a private golfer that has one little golf car that we sold them for $1,000 all the way to the National Football League, who might be renting 500 golf cars to run the Superbowl, and they each have a legitimate need at any given time. That little old lady who bought the $1,000 golf car could be stuck on the course, and she needs help. You have to be able to provide the service. You can never tell people you’re too busy. No matter how big or how small, you’ve got to take care of them. Reliability in today’s market is everything for most companies. I’d pay more, and you’d probably pay a little more, to know you’ll get the job done right. Have you ever worked on your house and called the plumber, and he’s four hours late and he doesn’t show up at all and he doesn’t call? We try to look at the obvious Business 101-type things and just be there.

Resolve conflicts with customers. You certainly never want to lose business, but in the same breath, you have to maintain a level of business ethics, and you have to be able to have a line that is drawn. Ten out of 10 times you just have to be honest with the customer, but nine out of 10 times, you’ll resolve it. Maybe one time you won’t. No matter what, you’ll never make everybody happy, but if you try to make them happy, you’ll survive.

I hate to say it, but I’ve had to fire two considerably sizeable customers because of nonpayment. There’s a level of respect that you’re supposed to have with your suppliers. I’m a customer and they’re a supplier, and we’ve worked many long hours trying to help somebody, or we’ve done a service call or built them a customer application and because of our good nature and our trusting relationships, we’re not getting paid. We’ll put people on special pay terms, yet we’re not getting paid. When you get to a point where your customers are starting to be unfair with us, we’ve fired some customers.

Share problems with other leaders. People should join an organization like Vistage or whatever may be in their area. Joining a support group like Vistage to get advice and insight and support from other CEOs is an absolute huge necessity for a lot of companies in this business climate. I’d recommend that people go out and search for a group that they can bounce ideas off and learn best practices and so forth. You’d be surprised how much confidence you can get back into your own course of business by meeting with other owners in a scenario like Vistage where you can really be yourself and learn about your weaknesses and strengths and the best ways to navigate this business climate.

I personally joined Vistage … and it’s changed my business and the way I do business as a whole. Having peer groups allows you to get specialized ongoing support for the normal issues that bother us, and it could be the littlest things and just having the opportunity to meet with our business peers. It teaches us that we’re not alone and shows us that there are others like us in the same position.

My grandfather, he’s 90 years old, so you can imagine he’s very set in his ways. For the first 30 years of business, he didn’t listen to anybody. It was his decisions, and he was driving the boat — ‘How dare you tell me what to do.’ I spent the first 10 years of my career here trying to get him to consider to put up a Web site — ‘Who’s going to go on the Internet?’ Going into a peer group has been tremendously advantageous to me of learning what’s out there. … This is the kind of stuff we work through every day. We all have to sort of get back to the drawing board in running businesses nowadays and those are important places you can get resources.

Sunday, 25 April 2010 20:00

Something in the water

When Jorn Lyseggen founded Meltwater Group in 2001, he spent the first two years interviewing more than 3,000 people to hire 200.

“My life was really an endless travel from one recruitment to another,” he says. “I traveled all across the world. I did all of the recruitment of the company well into 2006. The reason I did that was I wanted to make sure that the people joining initially, those were the people I would know really well, the people that I knew would be the future managers and the role models and carrying on the culture and the company values as the company was growing. I think that has been an extremely invaluable investment, and I could see that clearly as the company was growing.”

While a lot of new businesses may focus solely on the business plan and meeting financial targets, Lyseggen instead chose to focus primarily on the people side of his business, which delivers business solutions based on search engine technology, cloud computing and biometrics.

“One of the things I’ve always been thinking about in growing our company is management,” the CEO says. “Growth has been linked closely to our ability to attract, train and develop managers. With management, you also create infrastructure to build an organization.”

In order to successfully grow Meltwater, Lyseggen had to hire, coach and train the right people — and sometimes had to make hard decisions, too.

Hire the right people

Without great people, your business isn’t going to flourish, which is why Lyseggen took such an active role in this process early on.

The first thing he looked for were people who really embraced the world around them.

“That can be very different from you in personality,” he says. “That can be very different from you in terms of skill sets — that is all very valuable. [But] it helps to embrace the world in a somewhat similar fashion — that you have the same perspective on life and the world. Some people can be very negative or positive, to use a very simple differentiator, but if you look at the world in a somewhat similar fashion and you’re striving for somewhat similar objectives in life, then it’s much easier to work together and much easier to create an aligned approach and an overall aligned strategy.”

He also looks for people who care about others.

“If the person has an interest in other people, then that person is caring for that person and interest naturally develops and relationships naturally develop, and you get the manager that builds teams and structures, and … they create a much stronger organization than if you had a manager that only wants to get to the targets and isn’t particularly interested in people,” Lyseggen says.

To get these kinds of people, he had to carefully listen during the interviews.

“If you’re listening to what that person says, how they describe people they interact with both in the interview process but also in that person’s life, how they value what perspectives of people that come into their life, people they’re working with, how they describe friends, family, [then] you quickly get a feel for whether that person has a feel for people or not,” he says.

Ask the right probing questions that will help you get to the heart of these issues in the interview process.

“Encourage people to talk about things that they’re proud of, that they did that was an accomplishment, and who they would share that with and why was that so important and significant for them,” he says. “Another question I really like is what is the biggest challenge of your experience, perhaps a major setback that really shook you, and it was really a, perhaps, fall for yourself. Have that person describe that, and get a sense for how that person described the situation himself or herself and for other people involved is often very insightful.”

Then the last question you have to ask is actually directed toward yourself.

“At the end of the day, is this a person I would like to go out and have a beer with or is this a person I would like to invite home for dinner or stuff like that,” Lyseggen says. “Is there a fundamental personal chemistry? If there is that, then there is a good basis for a good, strong professional relationship, as well. At least it’s much easier if you have that chemistry. All the other things come easier and faster. When I say I ask myself, it’s not only myself but it’s as much the team as well that I use to recruit.”

Coach and train

When Lyseggen went to his children’s school to hear a teacher speak, he was surprised to hear her say that teaching children to read and write was easy because all they need is two things.

“One, they need to feel loved, and two, confidence grows from a sense of accomplishment and mastery,” he says. “I thought that was so profound and universal, and that is one of the things I try to live by in coaching, as well. That applies to people at all levels and all ages. People need to feel safe and loved somehow and have confidence to continually grow as they feel the sense of accomplishment and master of the topic at hand.”

This starts by spending time with people.

“First, I think the most valuable thing you can give anyone is your time,” Lyseggen says. “There is nothing as precious as your own time. Sometimes you don’t need to know what to say to a person; you just need to sit down and listen to that person and give that person attention. That person will know you care and are willing to take up your time. Even if you don’t have anything insightful to say or answers or solutions to the problem they have, it’s the fact that you were there and gave them your time. That actually goes a long way.”

Then you also have to be honest with people.

“One of the most effective ways to really show that you care about people is to be honest and tell them about their weaknesses and their shortcomings when you see those,” he says. “People really take a real liking to that when it’s done in a respectful way and it’s done on a foundation of trust and integrity.

“People get to hear things that perhaps a lot of people are thinking, and it can be down to their personality or the way they do things, things that people in general wouldn’t comment on because it would be awkward. But if you are able to share that with them in a friendly, loving and caring way, I think that really helps people improve and grow and it also shows that you care and that you’re looking after them and looking after their best interest.”

You also have to know when to have that conversation.

“You should be cautious — be very careful and not do it too early,” Lyseggen says. “Only do it when you feel really comfortable that there is a mutual trust established. The situation is you give somebody … honest feedback, and sometimes honest feedback can hurt. Even as glowing and caring as you can be, it can still hurt. The most damaging thing is if it’s not based on a trustful foundation, so you can never do that unless there is a fundamental trust present.”

When you can have that honest conversation, you open up the door for improvement in your people.

“It starts with the person saying, ‘That’s an area that I feel lots of confidence in,’ or, ‘I think that is one of my weaknesses; I think I can perhaps do it, but I don’t have the confidence to do it,’” he says. “The first step is a

dmitting that that is an area that they don’t have confidence in or that is an area that feels wonderful. Admit it, and then you have to embrace it. Once they admit it and are able to talk about it, then you can work on that.”

You have to ask them probing questions to find out how to help them develop that area.

“What are the situations that you feel more confident?” he says to ask. “What are the ingredients that you’re looking for that will help you feel strong in that area? What situations do we need to expose you to so you can get the training to get the mastery to accomplish this? … Just talk about it. Then you can actually deal with it.”

Once you talk about the problem and the possible solutions, then move forward.

“Basically, you create a plan,” Lyseggen says. “Often what is the case is the person actually actively pursues or seeks situations where their experiences are more exposed. Often, if you have a weakness and you want to hide it and you want to not deal with it, you avoid situations where your weaknesses are exposed, but if you are able to talk about it and get a commitment and decide you want to turn it around, then you’re in a mode where you try to find situations where you are exposed to it.”

He says to follow up on that plan formally each quarter, but you can informally check in with that person on a monthly basis just to see how they’re progressing.

He says, “On paper, it can seem simple, and on paper, it can seem like a good thing, but it needs to be followed up on and executed and scrutinized on to deliver the results you’re looking for.”

Make the tough choices

Even after doing all of these things, Lyseggen has come to realize that not everyone he hires actually works out, and that’s the last piece of building the right team in your organization.

“That is something you should feel very sad about, but I also think that is part of building the company,” Lyseggen says. “If you build the company, there are people who join the company that it’s not the right place for them, so you have those experiences, as well, which is part of being a manager.”

This is especially heartbreaking for him because it often destroys relationships that started out well, but just like the other aspects of finding and coaching talent, there is a right way to go about it.

“Part of it is to really be honest — to be honest and to be sincere,” he says. “There is a difference between criticism of that person as a human being and criticism of that person in terms of what they do.

“There should be a clear distinction between the two. … You can create that love and create very personal strong feelings. As long as you’re able to distinguish between the person and the actual work produced by that person, and you can do that in a loving, caring way and honest, then in my experience things are working out well.”

It’s also critical that you act quickly in making these decisions.

“Do not to wait too long because if you wait too long, things can entangle and it becomes an irritation to both parties, and both parties enter the dialogue irritated with the other person and frustrated, and that irritation and frustration then can color the conversation,” he says. “If irritation and frustration is colored with disappointment, (then) it is, of course, not positive for the outcome. If you let the process go too far, I’ve seen that frustration and irritation can color the conversation and create that hard situation.”

So when’s the right time to let somebody go? It varies based on every person, position and company, but Lyseggen has a general rule of thumb.

“If you start to talk about that person too often, and when you talk about that person, it’s typically not in a positive way, it’s more about problems, if that happens too often, then that’s a good indication that you have to act on it,” he says. “It’s probably good for both parties, as well, because it’s not in that person’s interest to be in that position where their skills and potential aren’t fully appreciated or it’s not a good match with what the company needs, and then it’s better for that person to move on to a different company where they can blossom and really reach their full potential.”

By focusing on recruiting and coaching people as well as making the tough people decisions, Lyseggen has seen his business grow from nothing to 700 people across 50 offices and $100 million in revenue last year.

“That’s all done organically and with home-grown management,” he says. “When I think of what we’ve done, that is something that I’m very proud of and [it] is the most rewarding thing.”

How to reach: Meltwater Group, (415) 829-5900 or www.meltwater.com

Sunday, 25 April 2010 20:00

Making change

When the word came out in late October 2008 that The PNC Financial Services Group Inc. would purchase National City Bank, the rumblings from devoted employees and disgruntled Clevelanders could be heard all the way to PNC’s headquarters in Pittsburgh.

Investors believed the $5.2 billion purchase price was below National City’s market value. Employees questioned if they would have jobs after the merger was completed and their pride was dashed as they mourned the loss of one of the oldest local companies and one of the country’s largest banks.

Despite the initial shock to the system, it didn’t change the fact that by the end of the year, National City would become part of PNC, and like it or not, everyone had to get on board, and it was Paul Clark’s job to do so as the Northern Ohio regional president.

“As we moved into January of 2009 as part of PNC, the engagement of the team of employees here was incredible — simply incredible,” Clark says. “ … It was an exciting time for us. There was a lot of energy and a lot of enthusiasm that continues today.”

He was able to do that because he had built an effective team environment already, one that he likens to the Cleveland Cavaliers, who can still have fun even during the toughest situations. Like during a time in January when LeBron James got clobbered to the ground and headed to the line to try to win the game. But while this was going on, you also saw Delonte West and Mo Williams, both injured, hamming it up on the sidelines before James hit the game-winning shots.

“You’ve got Mo Williams and Delonte West on the sideline having a lot of fun at the most difficult time of the game, right?” Paul Clark says. “That says something about the chemistry of that team, and that’s really good. I think an important part of having an effective team is just keeping the environment light — keeping it fun so that people can bring their whole self to work every day.”

Clark created that environment, which eventually helped him lead employees through the merger, by bringing people together, communicating effectively, and trusting and overcoming mistakes. And he started with himself.

“You have to bring a certain level of energy to whatever it is you’re doing, even if you don’t have it,” he says. “Even if your energy tank is empty, you have to find some reserve somewhere to create the energy that everyone is looking for and would create that environment and bring their whole selves to work every day, and there has to be a consistency to it. You have to keep doing the same stuff over and over, even if it becomes a bit of a grind from time to time. That’s the nature of being a leader.”

Bring people together

One of the reasons Clark could lead people through the change was because he had already united them as a company, so he then just had to unite them around the new cause.

“When you’re engaged with a group of people, a group of leaders, and you have to lead through change, you have to keep the bigger picture in mind,” Clark says.

You have to remind people why they’re here.

“If they know what their goals are, if they know how we’re going to measure them, how we’re going to pay them, boy, you can engage a team really quickly if you just do those things time and time again,” Clark says.

But it’s not enough to unite people around the cause mentally, you also have to physically bring people together to create opportunities for success.

“I think my tips for how other leaders might create that type of environment is be enormously inclusive,” Clark says. “You’ve got to get away from the same five or six people that you work directly with every day. You have to bring in a large group of people.”

Several times a month, Clark has big group meetings with employees and it’s a chance to let people know what’s going on and recognize people. For example, earlier this year, one of his employees was the No. 1 performer in 2009 for the Western PNC markets, which is a huge deal in the organization.

“To use a baseball analogy, she was 30 games in first place ahead of the second place team,” Clark says. “She really had a great, great year.”

So they talked her up in one of these meetings and sent e-mails out asking people to congratulate her, and soon after, the e-mails started flying around Cleveland recognizing her and sharing in her success.

“When you bring these big groups together, it’s an opportunity to celebrate success,” he says. “If anyone can’t have fun celebrating success, they really have to think about their priorities.”

He also has recognition breakfasts for groups of employees, where they can talk about what they and their co-workers have done to help customers. The meetings not only inspire employees, but they also bring together people who may not work together regularly or know each other that well.

He also arranges small lunch meetings with certain employees that have no purpose other than to introduce employees to each other. For example, he may arrange a lunch with four employees who don’t know each other because they can help each other make the company better — if they get to know each other.

“We set up some meetings for people who don’t work together every day so they can be together and get to know one another and build that trust and build that personal relationship that makes them more effective when they work as a team,” Clark says.

Another way he brings people together is by bridging product developers with salespeople.

“You’ve got to bring them together so you can have a sharing of what the product’s all about and have a sharing of what features that product has that would benefit the customer and, ultimately, how to sell it,” he says. “If you spend a couple hours doing that and there’s 20 people in the room and you get 20 to 40 additional sales that you would not have had otherwise, that’s a great two hours coming together, and it’s that simple.”

Clark also has what they call “Impact” meetings with 20 to 45 leaders in the company every other Thursday. The whole purpose of these meetings is helping people see how what they do can impact someone else to make them successful.

“How can I do something that will impact you and make you successful because we have this thing around here where we only win as a team when every individual wins, so we have to help each other win,” Clark says.

If you have a meeting like that, then you have to have some structure to it.

“Try to have an agenda that hits all the important points and everyone understands that they should contribute if they have something to contribute, and if they don’t, just listening is an important contribution,” he says. “It’s fast-paced. It’s like a scene out of a ‘West Wing’ episode — fast-paced, fun environment.”

He tries to keep those meetings to just an hour.

“After an hour, people are really busy, so if you’re going to bring them together, you’ve got to bring them together, and they’ve got to leave thinking, ‘I got a lot out of that,’’ he says. “We try to pack a lot into an hour or so. … If you sched ule it right and everyone’s respectful, you can get a lot done in that hour.”

Communicate effectively

Nearly every leader will tell you that you have to communicate and listen to be a successful leader, and Clark agrees, but he also says it’s more than that.

“Those are great characteristics of leading through change, but I just go a little bit further in describing that,” he says. “What really works is face to face — looking each other in the eye and talking. That’s what makes a difference. If you can do that rather than make a phone call, do that. Talk face to face. If you can, make a phone call rather than e-mail. Use the e-mails as a last resort for communicating. At that point, it gets personal and it gets real, and have an adult conversation about what it is we want to accomplish. When you do that in a room full of people, that’s when you really engage a team of people and get power in the team.”

When you’re communicating, you need to be transparent and use the correct language.

“People should expect and people deserve just candid communication,” Clark says. “The example that I often use is often people will say, ‘We need you to do this,’ but I think what’s more candid and hits it home right is to say, ‘We expect you to do this.’ That’s clear, and that’s the type of transparent communication I think this requires for a leader to develop a team so that team can lead an organization through change.”

The other key to communication is recognizing the difference between information and data.

“It’s the leader’s privilege to be able to take a lot of data and create an information story from it so you can communicate that in a transparent way to make a team more effective,” he says.

One of the biggest mistakes he says he’s made in the past is just throwing a lot of data out there and assuming that people will just put it together the same way that he did.

“Boy, is that a huge mistake,” Clark says. “So you learn from it. People put data together the way they do it for themselves, and everybody does it differently. I think the leader’s privilege is to take that data and create an information story that leads the team in a certain direction.”

You’re not looking for people to interpret it the same way that you did but rather for them to understand your point of view.

“You have to put it together in a way that you can communicate, ‘Here’s the data that I’ve used to come to this conclusion — what do you all think?’” he says. “More often than not, the team that we have is incredibly bright people that are a lot brighter than me, and that’s one of the things that you have to do is set up teams that are better than you, and they’ll come back and say, ‘What about this, or what about that, and here’s what’s really going on.’ That provides the rich discussion that makes the team effective.”

But as the saying goes, communication is a two-way street, so when you’re talking to people, it’s also important that you listen extremely well.

“It’s really hard to be a listener,” Clark says. “I always think I’ve done a good job of listening in a meeting if I’m absolutely whipped afterward and haven’t said much. The act of active listening should be tiring. You should put a lot of energy into not saying anything and listening. The trick is to not be judgmental. The trick is simply to listen and listen and ask clarifying questions and keep listening, and then respond after you’ve had some time to think. If you’re always listening to someone and you’re trying to formulate a response, I don’t think it’s going to be as good a communication effort as it could be.”

Most of Clark’s career he’s been a relationship manager trying to understand clients’ needs, and a lot of his take on listening was learned from those experiences.

“Every time I thought I had something to sell them, and if I was listening to them, all I could think about was what I could sell them; I never sold them anything,” he says. “But when I would kind of just go there with an open mind and a sense of really trying to understand their needs, then over a period of time, as I listened to them and understood their needs, I could solve their problems for them, and I was selling all sorts of stuff. You’ve got to be in a mindset where you’re just really conscious of the other person’s needs and listening strongly.”

If you’re not actively listening to both customers and employees, you’re not going to get very far.

“You will only go far with that if you provide value to the team, and the only way you’re going to provide value to the team is if you really understand what their needs are,” Clark says. “So if you’re talking to someone and trying to engage them and trying to help lead the team through change, it’s all around listening to what’s important to them and then responding to that, and then making sure that as you respond to that, you do it in a way that’s clear.”

You may think you have to have an elaborate communication process set up, but it’s really much simpler than that.

“We try to make this stuff a bit complicated at times, but you just have to ask somebody, ‘What’s important to you?’” he says.

For example, nearly every company has employee reviews, but for it to be most effective, you should ask how that employee prefers to receive that review.

“Some people like to get that in a meeting, some people like to get that in a piece of paper that they can read and think about, some people like to get that over a lunch,” he says. “Everybody has a different way in which they like to talk about issues that are of a real importance to them, so you’re never going to know what that is unless you just ask them, ‘What’s important to you, and how would you like to receive important information?’

“You just have to keep asking questions, so you really understand the individual, and then that’s how the team comes together. If everybody does that and everybody has real clear accountability as a team member to do that, then the communication around the team is just exponentially powerful.”

Trust people and overcome mistakes

Think about your life. Most likely, you’ve made more good decisions than bad ones. You probably have a family, a home, a successful career. You run your life. And here’s the kicker: Your employees run theirs — and probably just as good as you run yours, if not better.

“If you think about people at work, they come to work after they’ve left their home, so at home, they run their lives like adults,” Clark says. ‘They’ve had successful lives. No matter what their status, no matter what their family situation, no matter what it is, they’re running their life really well, and they’re managing a lot of different things in a very adult way, in a way that works for them, so they bring that to the workplace, and I think that’s really important for leaders to just acknowledge that the people they work with are adults who run their lives really well because the stuff we do here is, arguably, less important than running your life really well.”

Once you can come to terms with that, then you can trust your employees more easily, which also builds a great work environment.

“Let people make decisions,” he says . “They make great decisions every day of their life, so when they’re in the work environment, set up an environment where lots of people can come together to make great decisions and have the types of discussions that foster decision-making. People come to work because they do want to be part of a success, something that’s bigger than themselves. Everyone wants to know that their work is meaningful, and that it’s significant. That’s how we derive richness as people.”

When you let people make decisions themselves, though, they won’t always make them the way you’d like or, for that matter, correctly.

“You have to recognize that people are fallible,” he says. “We’re just people. We make mistakes.”

When people make mistakes, help them better understand what happened and what they could do better.

“You don’t encourage them to make mistakes, but you encourage them to make decisions and learn from the decisions,” Clark says. “When you talk about creating teams that lead an organization through change, learning is a huge part of that and just recognizing that you’re getting better.”

Don’t call someone out in a group setting when the person makes a mistake.

“Do it in a one-on-one setting where you can be candid — where you don’t shed light on the person who made the mistake,” he says. “If you can, do it in a quiet setting and just ask questions and learn.”

And don’t lecture the person — instead have a dialogue.

“It’s just asking, ‘What could I have done better? What could I have done differently? What did I miss? What information should I have had that I didn’t? What information should I have valued more highly that would have gotten me to a different answer?’”

Clark once knew someone who started a new job a few years ago, and when he started that new job, he asked his manager what success would look like if he had a good year.

“All his manager said was, ‘If you make 1,000 decisions and you get 501 of them right, that’s going to be success,’” Clark says. “You have to learn, so you have to set up an environment where people can learn.”

How to reach: The PNC Financial Services Group Inc., (216) 222-2000 or www.pnc.com

Friday, 26 March 2010 20:00

Finding some help

When Neil Gass and his team decided to set a new direction for Sunbrook Franchising Inc., they knew it wasn’t a quick process, so they spent nearly six months evaluating what they wanted to accomplish.

They decided they wanted to open or have in development 60 new centers over the next five years. Then he broke it down and decided that in order to achieve his goal that he would need to open 12 centers this year.

“You start with your longer-range objectives — where do I want to be in five years?” says the CEO of the 160-person child care franchising company. “You hear this in the business publications from everybody, and it’s an often repeated story, but where do I want to be in five years, and then back it up in smaller increments. Now I have to look at what does it take to get these 12 months accomplished?”

But he also recognized that he couldn’t achieve this alone.

Smart Business spoke with Gass about how to bring in the right people to help achieve growth goals.

Recognize your weaknesses. We began as a family business. We know what we’re doing as far as building, developing and operating successful child care centers. We began to realize, as we geared up for this growth, that we did not have the expertise in the actual area of franchising. We’ve been doing it for a while and getting by and been moderately successful, but to move to the next level, you have to have someone on board who knows the industry and knows the business and knows the business of franchising.

It goes back to it’s time to re-evaluate the way you do business and what your goals and objectives are. The market has changed. It’s a new economy. There are different lending environments and some new buyer behaviors and patterns these days. The world has changed or is in the process of changing very rapidly and you go back and you look at what you want to be and how you want to get there.

Hire people who fit with you. It’s critical to have, when you’re gearing up for active growth, the right people in place. You want to know what experiences they’ve had — some key decisions they’ve made that could have gone either way and why did they choose this way versus that way.

I’m happy to continue to grow at a slower pace as long as we’re bringing in the right people to enhance our organization and enhance our missions and philosophies, so one of the things we wanted to know is, ‘How committed are you to active growth, how many sales do you want to make, and what are your key decision factors in making sales?’ If they’re just looking for a warm body with a fat wallet, that may or may not fit with your organization’s goals. It certainly didn’t with us, so what are the key decisions for you in your process? What kind of experience do you have managing systems and developing and revamping?

It almost comes down to the more personal beliefs and philosophies than the hard experience. We can teach people how to operate child care, how to franchise, how to sell, build, develop and grow a child care system. What I can’t teach people is how to have good work ethics, good interpersonal skills, good communication skills and the right philosophy.

Those would be my two big points: Re-evaluate what you’re doing and how you’re doing it, and then find the right people to fill those gaps.

Get outside help. Bring in some business consultants. Any small business trying to grow, it’s nice to have an outside perspective on where you are and where you should be. In that, you can often identify gaps or holes that need to be filled, and some of those will be in terms of leadership and experience that the company would benefit from bringing in from the outside.

It depends on where you start from, of course. We started as a family-based business. One of the first things we did was bring in a family business consultant. For us, it was knowing that we had family business issues, and how can we identify and really address those correctly, and that was bringing in a family business expert.

Beyond the family business expert, there’s a multitude of experts. There’s a whole industry that’s grown up around providing advice and consulting now. Anyone can benefit from some form of a business coach to just provide a fresh perspective. You get stuck in your day-to-day routines of doing what you do, in the way that you do it, and that leads to stagnation and failure to recognize new opportunities, ... so anybody from a third-party perspective sheds a whole new light on where new opportunities exist.

Hire consultants like you would employees. Ideally you want someone who has worked in a similar or related business or industry. ... Then you want to look for some success — how have the businesses that this consultant has coached fared after the work was done? Did they go on and were they able to implement the strategies and ideas given?

Oftentimes, we would work through referrals — through networking contacts, both within and (outside of) the industry. We would look for folks, ‘Have you worked with this company or individual before?’

There’s no replacing good old face time — interviewing. Sit down with this person prior to engaging them and find out what their philosophies are and what their experience is. Does that fit with your philosophies and objectives? You don’t want to bring in a yes-man to further the ways you’ve been working. But definitely somebody who has a similar philosophy of growth and they understand the growth cycle that your company is in and hopefully has been there before to help guide others through the same waters.

We’re more interested in quality over quantity. If I had brought in a franchise expert who was purely growth, purely show me the numbers, that would not be a good fit with our company. That’s part of the process of weeding through the available candidates to find the right match for us.

How to reach: Sunbrook Franchising Inc., (770) 426-0619, www.sunbrookacademy.com or www.sunbrookfranchise.com

Tuesday, 23 February 2010 19:00

Talent scout

Clint McDonnough doesn’t recall ever having an internship himself. In fact, when he joined Ernst & Young LLP — then Ernst & Ernst — you simply got your four-year degree and started working right after graduation.

But the Dallas office managing partner acknowledges that things are a little different these days at the accounting and financial services firm. Now, students must go through a five-year program, and internships are nearly required to get in with the firm. While things have changed, it’s definitely for the better.

“The process is much different than when I got hired, …” McDonnough says. “Nowadays, probably about 95 percent of the people we hire have had an internship with us and have had the opportunity to see us up close and personal on a day-to-day basis.”

And that means that he and his 1,400 people have also had the chance to see them, so when they go to hire full-time employees, they have a better picture of a candidate than just what’s on a piece of pretty resume paper.

“It’s one of the best things that we’ve come up with,” McDonnough says. “It takes the guesswork out of hiring so when you make a full-time offer, you’ve had experience with the campus activities, the interview process, the in-office interview — you’ve had them for eight weeks of full-time employment basically. You’ve had an extended period of time to get to know and work with them, so it really takes the guesswork out of the recruiting process for us, and it takes the guesswork out of that student’s mind of whether this is a good place for (him or her) to work.”

Creating a strong internship program entails getting on campus to build relationships with professors and students, and then offering students a meaningful work experience.

Get on campus

If you want to have the best interns, then you have to have solid relationships with local colleges and universities, and to do that, you have to invest both people and time.

“It starts with making certain that you have our folks who spend time on campus getting to know the students as well as making sure that the students have the opportunity to get to know us and what we stand for,” McDonnough says.

When he’s sending people out to campuses, it’s not just simply something he asks an employee to add into the schedule. Instead, because it’s an important role, assign it as a full-time position. In most cases, a partner serves in the role of campus coordinator along with a team of client-serving professionals, and that team is augmented by full-time professional recruiters on staff. All of these team members and recruiters have had experience working with clients throughout their careers at the firm, so they know what it takes to be successful in E&Y’s culture.

Typically, it’s one partner per campus, although if schools are small, a campus leader may have two schools that he or she oversees, and the company often tries to match alumni up with their respective alma maters, so they already have an idea of the school.

“We like to have long-term consistency in our key campus leaders,” he says. “We’d have someone who has spent many years on that campus so they know the campus, and more importantly, they know the professors, so they’d have the rapport with those professors to know what type of person a specific student would be, and then have a dialogue and discussion around, ‘Do you think that person would be successful in the type of culture that we have?’”

Campus leaders should be focused on building relationships with faculty and staff.

“Spending time with them on campus is key,” he says. “Making certain that they have access to our thought leadership that we provide, that they can use in their classrooms or their lectures is also a critical part.”

Acknowledge the importance of the role those professors play.

“I think it’s just being respectful of the role that they play, and it’s a critical role in the development of the key people who will be a key part of our future, …” he says. “When you go on campus, make certain you understand and are being respectful of the role that those professors are playing in the development of those students that will be your future is something that we need to do and still need to do when we reach out to them. Sometimes there’s a view that we take them for granted, and we never, never want to do that.”

Your recruiters also need to know the students. E&Y’s staff first does this through having social hours on campus two to four times during an academic year.

“One thing that we don’t do is we don’t have alcohol on any of our recruiting visits,” McDonnough says. “That’s not part of the social time. We believe that the social time is really business time, where we get to have meaningful interaction with the students, be able to properly evaluate that student’s social skills and interpersonal skills and use that as another piece of information that we utilize in evaluating that student along with their abilities that they’ve demonstrated in their classroom.”

During these socials, recruiters are looking for students who have qualities that could make them successful at the firm.

“It’s the ability to carry on a conversation, eye contact, feeling comfortable in a discussion and willing to participate in a discussion,” McDonnough says. “Those kinds of things that we can identify that are consistent with somebody who could be comfortable in dealing with people. We are a technical business, but no doubt about it, that technical business is done by people, so it’s important that you have the ability to interact with folks both in our company at Ernst & Young and our clients.”

Look at their intelligence and awareness to find the right fit.

“You also get a sense for just the whole general business knowledge,” he says. “Are they able to demonstrate that they have a good knack for what’s happening in the business community, what’s happening in the economy? That kind of discussion is part of a dialogue that our people have with the students during those activities.”

The next step after the socials is on-campus interviews with the standout students, conducted by the recruiting team.

“That interview, in a lot of cases, is a validation of what we had known,” he says. “In a lot of cases, because we know the students so well, it’s us making sure we know what they want to accomplish in both their internship and where they want to go on a full-time basis. That includes, what city are you looking at? What kind of service line are you interested in doing? What kind of industry are you interested in, if you want to focus on an industry? That’s the kind of dialogue that’s happening in the interview process.”

This provides them with another opportunity to see how that student will handle him or herself, only this time in a one-on-one situation.

After campus interviews, the individual campus teams meet, and they’ll come back and meet with the other schools’ teams to compare notes between campuses.

“Then, depending on our hiring needs from an office perspective, we then go back and decide who to make offers to to come into the office,” McDonno ugh says. “By and large, if you get an offer to come into the office, again, given the amount of history we have had with these students, we will offer an internship after their office visit.”

The number of interns varies based on the work needed, but this year, 90 bright-eyed interns started. Going through this entire process helps reduce the possibility of surprises when they actually get working.

“Because of the amount of due diligence that our campus coordinators do, both in the pre-interview process, talking with professors, getting to know these students on campus, we have a really good idea,” he says. “You combine that with how well they’re doing in their studies, we have a really good idea of who we would like to bring in before we even go into the interview process, so we do a lot of homework.”

Provide a meaningful experience

A lot of people think of fetching coffee and spending hours standing at the copier when the word internship comes up, but McDonnough cautions that you can’t have this if you want to have a successful internship program.

“What you wouldn’t want to have happen is somebody to come full time and be surprised by the culture, the workload, the work requirements — the work,” he says. “You just want to avoid that, so it’s really important that they get a real experience during their internships, and that includes work demands, deadline demands, etc., that would be a normal course when they start with us. It would not be a good use of their time to make coffee and copies. That would be a wasted experience for an intern.”

So if you don’t want to waste your interns’ experience, how do you set up a meaningful one?

“A key of a successful internship program is making sure that they have opportunities to work on clients,” McDonnough says.

To do that, E&Y elects to have its internship program not during its slower summer months when most college students intern but during the first couple of months of the year — or the busy season.

Now doing this also goes back to having successful relationships with the college campuses who will work with both students and the firm to make this happen.

“It’s really because of the accommodations with the schools here in Texas,” McDonnough says. “It’s critical that you get the schools that you’re recruiting at to agree to that kind of time frame for the internships.”

If you don’t have interns when you’re busiest, then you run the risk of them not having enough work to do and not learning.

“Yes, it’s a great opportunity to know the firm and to know you, and you get some sense of what it means to go to work every day and what kind of firm you’re going to be working for, but it’s not as true of an experience of what the work life will be like the rest of the year,” he says.

Once interns start, they go through orientation for approximately three days, which is led by either a staff volunteer or someone from the recruiting team. That orientation is followed by more technical training, and just a couple of weeks into an eight-week internship, they’re ready to start in the field.

“Try to get them different experiences with different people,” McDonnough says. “We like for them to work on a couple different engagements in a couple different industry groups. When they move within the engagements, we try to get them to work with different people. It’s important because it gives us a couple different touch points on how they’re doing — not just one touch point — and secondly, it gives them an opportunity to experience different leadership styles.

“The leadership style we develop is based on the experiences that we all had in working for other people. This is just an opportunity for them to see some different leadership styles and personalities and grow in their personal development.”

Each engagement could involve as few as three people or as many as 15 or 20 people, so the interns have the opportunity to work with many people.

In addition to the engagements, each intern is paired up with a counselor or buddy during his or her time at the firm.

“That’s important so they have another reach-out point of someone that they know and have a chance to dialogue with,” he says.

Lastly, they also have a contact in HR, who is involved in running the overall program. This gives them at least three points of contact internally during their experience, but it also gives you the chance to have several points of evaluation.

“For every engagement they work on, they’ll get feedback from the person that’s above them on their performance and what they can do well and what they can do better,” he says.

Most of the people who intern at E&Y are juniors and will receive a full-time job offer at the end of their eight weeks, contingent on them maintaining their grades through the last two years of their five-year program.

“We’ll do an evaluation before they leave based on the feedback they had on their engagements, but because of the amount of work that we do before we bring somebody in in making sure we believe they’re a good fit, we’re seldom surprised if someone doesn’t live up to the performance standards of the firm.”

This process allows the student to focus on school, knowing he or she has a job upon graduation, and it takes the guesswork out of E&Y’s hiring. It’s also made E&Y a standout employer.

“One of the things that is a good indication of how well we’ve done in the recruiting process … is that we have been now ranked in the top three in Business Week’s list of best U.S. employers for new college graduates,” McDonnough says. “The list came out in September 2009, so it made us feel good, and it validated all the hard work that I have just talked about, about the importance of spending time on campus and finding those opportunities.”

How to reach: Ernst & Young LLP, (214) 969-8000, (214) 979-1700, (817) 335-1900 or www.ey.com

Tuesday, 23 February 2010 19:00

Dig deep

Joe Carrabba has always been in his element in a team environment. Growing up as a football player and wrestler, he always enjoyed the spirit of competition and the atmosphere surrounding a team. But he didn’t realize that those elements he appreciated as a youngster would affect his career as chairman, president and CEO of Cliffs Natural Resources Inc., a mining and natural resources company.

“When I went into the mining business, you work in some pretty remote spots, and you deal with some very difficult environmental effects around you, and in a mine, you don’t call for assistance or help down the road,” Carrabba says. “You have to rely on that group of people or that team to get the product out and get the production for the day. That atmosphere is built very heavily in the mining business, and it’s pretty easy to see how those values carry forward. The world just moves too fast to work in a silo. You’ve got to open up and work in a team atmosphere.”

That’s just one thing that Carrabba has tried to instill at Cliffs, and doing so has helped him successfully lead the company through the difficult economic environment. While many businesses have struggled during the past couple of years, Cliffs saw its revenue from product sales and services grow from $1.9 billion in 2006 to $3.6 billion in 2008, before dropping in 2009. While revenue was down 43 percent through the first three quarters of 2009, the company was still profitable and reduced expenses from $41 million in the third quarter last year to $28 million in the third quarter this year, and it is starting to see a steadily improving demand for its products.

He says the key to his success in the downturn was building that team atmosphere during the good times by creating a great place to work, hiring the right people, communicating and setting goals.

“You’ve got to treat people well in the good times, so you can get their dedication and respect in the bad times,” he says. “We have that kind of team here. Prior to this financial meltdown, we had three or four spectacular years. The commodities business is very cyclical, and you’re going to have very highs and you’re going to have very lows. And you have to plan your business and people have to understand that and then you have to treat everyone equally, fairly and the right way, and that’s what brings the team around.”

Build a great environment

It was one of those first blustery, frigid days in a Cleveland winter. You know the ones — after it’s been relatively warm and then, suddenly, it’s as if Mother Nature turns the hot knob off while leaving the cold running at full blast, making you want to call in sick so as to not leave the warmth of your home and feel the cold creeping through your bones. Well, since most can’t call in sick, Carrabba decided to help his employees out by having an impromptu pizza lunch party so they at least wouldn’t have to go out for lunch and face the wind and cold.

It’s one example of building a better working environment.

“It’s just the way you treat people and the way you want to be treated,” he says. “It really is just as simple as that.

“You’ve got to start with people. That’s really what the business is. You’ve got to have respect for people and their work ethic they put out.”

Your goal is for people to enjoy coming in to your business every day.

“It’s got to be fun for people to come to work, and you’ve got to leave that opportunity in a business when you come in,” he says. “It’s got to be pretty easygoing. The tone at the top has to set that, and it can’t be a stiff organization.”

He says you have to do that if you want people intermingling and working as a team.

“You’ve got to have open doors, and you can have some fun, too,” Carrabba says. “It’s OK. It really is.”

Aside from impromptu pizza parties, he also tries to build fun around college football games, the company’s United Way goals and accomplishments, and some good, old-fashioned humor.

“You start by making fun of yourself, and from there, everything can loosen up a little bit,” he says.

You might think that with the economy the way it is that you don’t have time to have fun or you don’t have the money to spend on anything fun, but Carrabba would advise you to think twice.

“Life’s too short,” he says. “It’s as simple as that. You make your own environment. Nobody else makes it for you, so you can choose to work in a very good environment or a very bad environment. Nobody does that other than the people that are working on this floor or these two floors we have here, so why not make it a conducive place to work?”

Hire the right people

Carrabba doesn’t have to do a lot of advertising to draw potential employees to Cliffs these days. With good morals and ethics throughout the company, people know that and want to be a part of that.

“You don’t have to advertise that on a billboard if you attract those kinds of people who come in,” he says. “On a people side, success begets success. The better you treat people, the more you’re going to get that kind of person to work here.”

But it’s not as if he snaps his fingers and the perfect employees stand out above the others seeking him out — it still takes some work to make sure you hire the right people. Start by focusing on the right things.

“I really leave the technical aspects of the interview to the other folks and their respective departments,” Carrabba says. “My sense is really around team chemistry. That has to be first. You could be the smartest person in the world, but if you don’t have the chemistry like we’re talking about to fit into the group, it won’t work for the individual interviewing, and it certainly won’t work for us. … Dwell on team chemistry and get a sense for where the person wants to go, how they like to operate, how they like to manage their time both personally and professionally.”

He says to ask about life experiences from organizations that they’ve been a part of during their career but also about leadership experiences going back as far as high school and college. Ask if they’ve been involved in team sports at any level and see what types of work they do on the charitable side of business.

“All of those build team types of quality and experiences,” Carrabba says. “You go through the highs when you’re winning and the lows when you’re losing when you’re a team player, so you really have to look for those.”

It’s also important to use the interview process as a chance to show who your company is and not just what it does. This is the time to get people who will buy in to your values.

“It starts at the very beginning of the interview and making sure that they know what kind of company they’re coming to work for and what the values of the company are so there aren’t any surprises when they come here,” Carrabba says.

Also involve several people in the process to make sure you get the right people for your organization because different people will pick up on different things about a person. For example, he’ll involve a ma

nager, but he’ll also involve someone from human resources.

“They’re not in the department, so they can give me an external view, if you will, and that’s what they’re trained in the business to do,” he says.

Then there would also be some peers and lateral people who are at that same level as the person who would be coming in.

“Again, that team chemistry has to work, and they have to have a good feel for the selection that’s going to come into the department,” Carrabba says. “Everybody picks up on different things.”

Communicate

With employees as far away as Perth, Australia, Carrabba spends a fair share of his time trying to communicate with his people. But it’s a twofold reason for doing so: One reason is to get the company’s goals out to people, but it’s also so he can help address problems and issues in their lives.

“The senior team has always taken the temperature check, if you will, on people throughout the organization and how hard they’re working,” he says. “Do they need some time off? What are their stress levels?”

People work really hard, and sometimes certain projects can absorb their time, so you need to have that communication with them to be able to recognize the stress.

“It’s humanistic and knowing your people and knowing what kind of day they’re having or if they have some personal things, that we all go through based on our life,” he says. “We’re pretty passionate about that it’s family first and job second. We’ll work around the job, but you’ve got to take care of the home first.”

Recognizing stresses in people’s lives comes back to communicating with them on an individual level and communicating with your managers, as well.

“Spend time with them,” he says. “Walk around. Have lunch with each individual. Keep your door open. Office hours are for me to talk to people. I’ll do the work side of things after hours.”

You have to make people comfortable talking to and opening up with you.

“A little humor goes a long way,” Carrabba says. “A little lightheartedness — not everything has to be done on a PowerPoint or communicated on a spreadsheet. If you just start with respect of people’s minds and what they can develop and create in an organization, I think that transmits through, and it’s easy to have a two-way conversation.”

Once you get to know someone a little bit, you’ll start to recognize his or her nuances.

“It’s just [like] reading someone who’s close to you or your family members,” he says. “We all know what our routine or normal actions are in a day, and if people are acting a little out of sorts or having a down day, I think they can pick up pretty easy and help take a little load off of them so they can deal with whatever it is they have to deal with.”

But also respect that some employees may want to keep their communication with you strictly professional.

“Some people want to solve their own problems,” Carrabba says. “Some people are closed and personal, and that’s OK. You have to respect that, and some people just sometimes want somebody to lean on, and you’ve just got to have that style of adaptability to do that.”

Beyond personal-level communication, you also need to communicate the high-level corporate happenings that employees should be aware of.

“I keep a running tablet going throughout the period of time [between meetings],” he says. “As we go through the weekly, daily, monthly events, as it leads up to [the next meeting], I don’t sit down and craft a speech or anything like that, but I think the bullet points throughout the quarter are important to ring on.”

Or sometimes he and his team will pick a theme to focus on during a certain meeting. For example, recently they wanted to make sure that people were aware of the company values, so they focused on the core values during that particular period.

No matter how much you communicate, be sure to get feedback from employees, too.

“Answer as many questions as you possibly can, either on a spontaneous basis or on a planned basis, which we do both,” Carrabba says. “You’ve got to spend time with your folks and vice versa. Communication is a two-way street, and people won’t feel comfortable with you, particularly on bad news days. … You can only fix bad news if you hear about it. That’s just a comfort zone people have with you.”

And there’s always going to be questions — even if nobody asks them.

“I get a lot of feedback from individuals who don’t want to speak at the meetings,” Carrabba says. “We’re now asking people in advance by e-mail what questions would you like to ask but you don’t want to stand up and ask a question. We’re encouraging. It can be anonymous questions and usually they’re all on people’s minds, but somebody from the group doesn’t ask, so we’re trying very hard to encourage people to ask what’s on their mind. I can’t address them unless I know what it is.”

Whether it’s corporate objectives or personal problems, there’s one common theme to the communications: You need to work at it.

“You have to really think through a communication plan,” he says. “It can’t be haphazard. It’s nice, and you’ve spent a lot of time with the spontaneous discussions that pop in your head, but you have to have a pretty solid communication plan to make sure you can roll out the vision of the company and the goals and objectives so people know where we’re going and they can align themselves with business goals as they go through with it.

“People want to hear what the business results are for all the work they’ve put in. It’s important that all that feedback is communicated through. Everybody has ideas and suggestions. It’s spending the time explaining to a person as to why you are or aren’t going to do something so at least they feel their voice is heard, and taking that feedback to get the great ideas that are sitting out there.”

Set goals

Every sports team has its ultimate goal — win the championship — but it has things it has to do to get there, such as win the division, improve scoring, decrease errors and so on. And every company is no different, so you must first know your strategy.

“Leave yourself plenty of time,” Carrabba says. “It takes a lot of time to build your base strategy. ... I would say, use fact-based data, not emotion or 30-year ‘isms’ of a company. Challenge the facts and make sure you have them right, and then you do your competitive analysis and move your strategy based on those building blocks.”

Once you know your strategy, then you can start filling in the steps to achieve it by setting goals.

“Build the goals and objectives to align with the strategy,” Carrabba says. “Those goals and objectives come down from the departments themselves.”

He has an executive committee that reports directly to him.

“They cascade the strategy downward through their organizations, and they talk about the goals and objectives they need to achieve so that we can achieve the strategy of the company,” he says.

He has four or five iterations of getting the goals down on paper, and then the goals are published.

“Everybody, here’s the strategy, here’s the large goals and objectives, and then off of that, people h

ave a performance scorecard that has to align with that and has solid metrics, and that alignment goes right down to the front-line supervisors around the world and organization,” Carrabba says.

Supervisors share that scorecard with their employees at the beginning of the year, and each party agrees to it so there are no surprises later on. Then that person is measured on their progress in meeting those goals twice a year, and benefits and compensation are often tied back to that.

“It goes back to the basic premise of you hire smart people, you set the frameworks — the goals, the objectives, the core values of the company — and it’s up to them to perform within those frameworks by building their own scorecard to align and deliver the business goals,” he says.

By doing all of these things, Carrabba has created a strong team environment that has allowed Cliffs to succeed and position itself for the future.

“It’s just strengthened everything,” he says. “If anybody had any doubt, and there’s no reason why they should, the textbook types of things that we’re doing that I described, that you could read in any business manual, we’ve actually applied those in difficult times, and the formula works. They’ve been battle-tested, if you will. We’ve come through them very well and have a very bright future.”

How to reach: Cliffs Natural Resources Inc., (216) 694-5700 or www.cliffsnaturalresources.com

Saturday, 26 December 2009 19:00

Moving fast

When Timothy I. Still joined Accumetrics Inc. as president and CEO, he was in a tough spot, because the founder had been the acting chairman and CEO.

“Whenever you have a situation where the founder is still with the company, it’s a very delicate situation,” he says.

The board had decided to bring in a seasoned executive to build the company, which develops, manufactures and markets tests for the assessment of platelet response to antiplatelet therapies.

Immediately, Still had to establish credibility with the 80 employees, let them know that there was going to be a more accountable culture and then take swift action in changing the company and building his management team.

“Literally, in the first 90 days, there was a significant amount of change,” he says. “That sets the proper tone and proper culture that change is in the air.”

Smart Business spoke with Still about how he effectively led the company through change.

Have a clear vision. First, there needs to be clarity of vision, clarity of where the new CEO wants to take the company.

To have a clear vision and a clear strategy, frankly, it starts with strong leadership. People need to feel convinced that the leaders really know where they want to take the company and know what they want to do. You need to have measurable goals associated with that. You need to have teamwork, and you have to have people buy in and engage them. You have to open things up that if they don’t believe in the vision, to be vocal about it, and that all ties in to having the right culture at the company, one that people feel engaged in and feel heard. It’s clearly something that starts at the top. Even though it’s important to have a strong CEO, all of the functional heads need to be just as strong.

Create a sense of urgency. After you work on forming that vision, what’s equally as important is the sense of urgency and passion to fulfill that.

Make sure that people realize that the market waits for no one. The company needs to operate with a sense of urgency in building a business and really delivering products and solutions to customers. You can’t have a laissez-faire type of attitude. If you don’t take care of the customer, someone else will, so it’s really a sense of urgency as far as building the business and certainly looking at the goals that are out in front of us but not only driving to that goal but possibly through it and really exceeding customer and financial expectations.

Know how fast to move. I’ve made changes within a week of joining a company, but realistically, the first 90 days are crucial. I don’t think it’s logical to come into a situation and just make changes right out of the gate.

Even though you might have the answer and know where you need to take the company, a company of a certain size is only able to process change to a given degree, and you have to be sensitive to that. There will be times when maybe I acted too swiftly. In the end, we were able to catch up, but it can foster a couple weeks of helter-skelter there.

Assess the situation for a while, but if that assessment period takes too long, you tend to fall back into the culture that was there previously. Take action and set the tone of what the vision and what the culture is going to be.

That’s the delicate balance and that’s where effective leadership comes in. In areas you’re more comfortable with, you can probably push a little harder. Areas you’re not, you need to lean on your folks a little more.

Spend time with people. You’ve got to have the right team. As a CEO, probably 70 to 75 percent of your time is spent on people and the team that you have, and you really got to have fine-tuned people skills and knowing if the people on your team are going to fit within your culture or not.

It’s an awful lot of people assessment. Although experience is obviously important, I tend to look for more general qualities. First of all, is desire and passion to be at the company and believing in the vision. That has to be at the top of the list. Wanting to build a company and having the sense of urgency would be just as important. People need to want to make things happen and want to be engaged and not just getting a paycheck or waiting for a transaction to happen.

[They] need to feel comfortable in an accountable culture. We will have measurable goals and everybody will know what those goals are. Some people are comfortable with that visibility and clarity. Some people aren’t.

I would say also the ability for an employee to focus. That probably sounds simple, but we need to have the ability to sort through all of the mundane tasks every day and stay prioritized on what’s important and will drive the company. That’s a skill set that gets overlooked quite a lot.

Set up accountability systems. Lastly, it’s building a culture that’s going to drive success. That’s a culture that needs to be fun, accountable, but it has to be a culture that rewards success.

I’m a believer in a compensation philosophy that has both corporate as well as individual goals. Everybody in the company should be focused on what the corporate goals are for the quarter or for the year as well as the individual goals. We’ll have an all-employee meeting once a quarter. We’ll share everything as far as the financial performance of the company, all of the major goals we’re looking to achieve, and we’re very transparent with sharing that information. That’s something that the company didn’t use to do.

By doing that, you get an awful lot of buy-in, and they feel they know what’s going on with the company, and they feel comfortable being able to communicate up through all levels of management. People know, on a corporate level, every quarter, what our goals are, and then at the end of the year, we measure how they’re doing personally.

How to reach: Accumetrics Inc., (888) 919-9333 or www.accumetrics.com

Wednesday, 25 November 2009 19:00

The value of people

Adecade ago, Barney & Barney LLC was kind of flat and morale wasn’t strong. So the ownership group made some difficult decisions that favored employees, and things started to change. The insurance provider went from about $16 million in revenue in 2000 to more than $70 million this year.

“We sort of took off like a rocket when we faced some tough issues and made some good decisions,” says Paul Hering, Barney & Barney’s managing principal and CEO. “That was a moment when it convinced me that you don’t want to compromise on who you are as a company, your character, your culture, and when you really stand by what you believe in, you have the opportunity to accomplish amazing things.”

In keeping with this philosophy, Hering and his team have continued, despite the economy, to do the things that have made the company a great place to work.

Smart Business spoke with Hering about how to create and maintain a great company culture.

Make employees feel valuable. It’s critical that your people feel engaged and connected and part of something, so they’re motivated, happy to be there, successful and productive. That requires leadership to take the time to really get to know people and get engaged with them and be authentic and really share with them what you’re all about and what the company’s all about.

We now have close to 350 people in the organization. I meet with every single new associate that comes into the company, and we spend a half hour together getting to know each other. It’s very informal, not really structured, but it’s a way to get acquainted and a way for me to share my vision of the company and what we’re all about and what’s important to us.

Time management is a huge challenge. It’s a matter of making it a priority. It would be easy for me to say, ‘I’m too busy — I have too many things both inside the company and outside the company that are making demands on my time that I’m just going to let this effort fall by the wayside.’ That would be the wrong thing to let happen. If I were to discontinue it, it would send an interesting message that would be 100 percent counter to the corporate culture I was talking about.

Have balance. You have to rely on your people. One of the things I talk about with all of the new people in the organization is my belief in work-life balance. I know that sounds like a cliché, but it’s something that I’ve always believed in.

Leaders have to lead by example in this category. It’s difficult for a leader to talk about work-life balance and then be in the office 14, 15, 16 hours a day because they’re modeling a behavior that’s different than what they support. Be a good manager of time and set priorities well, and it’s modeling the behavior that you’re trying to institute amongst all of your people. I have three children that are growing older now, and I’ve always made the time to be the little league coach and never miss a dance recital or volleyball match or something going on in the lives of my kids.

I tell people here, and sometimes they look at me aghast because, coming from the CEO, it’s not something that they’re used to hearing: ‘When you’re here at work, I want you to do your job, do it well and make sure you get it done, but I don’t want to see you working late on weeknights, and I certainly don’t want to see you in the office on the weekends. I want you to make time for those things that are important in your life and more important than, frankly, Barney & Barney.’

It’s kind of like that fish-tank analogy, where the fish will get as big as its tank — if you put it in a bigger tank, it will find a way to get bigger. There’s a correlation between your workday. If you know you’ll be working 12 hours a day, you’ll find a way to get the same amount of work done as you would in an eight-hour day if you were operating a little more efficiently and staying focused.

What happens is people feel empowered and maybe knowing that that’s one of our core values, they work a little more efficiently and make sure they can get things done so they can do those things in their life, whether it’s family or spirituality or social life or working out.

Think long term. Don’t let short-term challenges affect your ability to see long-term objectives. Sometimes you need to make a decision that’s a difficult decision — and maybe is counter to what short-term results and numbers are suggesting to you — because that decision ends up being good for the long haul.

Sometimes we make decisions where someone on the outside might think that’s not a good decision given these economic conditions, but we think it’s right from a long-term standpoint and associate morale standpoint.

To give you an example, this year, we offered salary increases to our support staff at a time when a lot of companies are realizing staff or payroll reductions. We felt like, ‘Hey, this is something we can do. It may mean less money going to the owners of the company, but we think it’s the right thing to do at a time when we want our people to know they’re valued and appreciated, and we want them to stay here.’ We paid year-end bonuses last year. We had six different divisional holiday parties. We paid a special holiday bonus to all of our people.

Those were things that were happening that were completely counter to what people are seeing on the news at night and reading about in the newspaper each day. It was a wonderful message. You talk about an impact on morale and a commitment by the people to our company to continue to want to perform well and continue to drive a good result.

How to reach: Barney & Barney LLC, (800) 321-4696 or www.barneyandbarney.com

Wednesday, 25 November 2009 19:00

Leaving life support

When Mark Laret stepped in as UCSF Medical Center’s new CEO in April 2000, it was just two weeks after the health care system had ended a bad three-year relationship.

The center had merged with Stanford Health Services to become UCSF Stanford Health Care in 1997, and everything seemed so promising. But three years later, a culture war was still raging within the combined organizations, and recognizing that the merger was a major mistake, the two centers separated.

“There were a couple of years of work to bring the organizations together, but when they decided to split, it happened in a matter of months,” Laret says.

The quick break left the organization reeling.

“It was a fairly grim situation on a number of fronts,” he says. “First, and the most obvious thing, was just how distressed the employees were.”

They had been promised certain benefits that weren’t fulfilled, and they were angry that all of this effort had gone on the past few years and hadn’t benefited anybody in any way. They were also mad that management had focused so much on the merger that quality of care had dropped.

Then there were the financial challenges, as the hospital was losing $1.25 million a week. “We were running out of cash, so there was some urgency to act,” he says.

On top of those two issues, operations were a mess. Many functions, such as payroll, were still housed at Stanford, so UCSF had to ask Stanford to do its first payroll checks after the split. Laret also had consultants in pretty much every major role in the hospital.

“There was no chief operating officer, no chief financial officer, no chief anything, no chief information officer, nobody running ambulatory care, so it was a big set of holes here,” he says.

Seeing all of this, he knew the hospital was on life support, but he also thought it could one day breathe on its own again if he could re-engage the employees, build a management team and control the finances — but it all had to be done simultaneously.

“It wasn’t a pleasant set of circumstances, but on the other hand, I knew that the fundamentals here were strong, and that was what we really built on over the next several years.”

Re-engage employees

One of the first three things Laret had to attack was rebuilding confidence with his employees.

“First, and I think most important, was to re-engage the work force here and get them focused on what we could do together to develop a positive attitude about the future, to have confidence in a vision of the future,” Laret says.

He started by writing weekly e-mails to the whole staff, telling stories about patients and the great things done at the hospital.

“The first thing I needed to do was remind them of what kind of organization we are,” he says. “We had gone through a trauma, but fundamentally, we were still one of the great medical centers in this country. We needed to get back and focus on those issues related to what we’re really about as an academic medical center and spend less time talking about the trauma.”

He also spent between one-third and one-half of his time talking with employees at brown-bag lunch sessions and departmental meetings and listening to their complaints and problems.

“As much as anything, giving them a sense that management was listening to them probably did more to re-establish confidence,” he says. “ … That is a key ingredient. People need to feel that management is there and is accessible and is respectful.”

He heard many problems, such as the hospital didn’t have linens and that the gases used to power their lasers were no longer being delivered.

“We needed to go back through and sort out where we were on our accounts payable — how do we manage this?” Laret says. “It was dealing with issues one at a time, from the bottom up, but with the idea that you ultimately get there.”

He also had to prioritize these problems, so he first dealt with anything related to patient care.

“That’s more important than the budget and more important than any of the other things we need to deal with,” he says. “That actually provided some clarity to the organization — ‘OK, we’ll take care of patients first and foremost.’”

After patient care, anything that could cripple the business if not solved got precedence, so he cleaned up some audit and other issues. Everything else could wait.

Next, he revisited the hospitals mission and values.

“Historically, they had these statements, but they were in a book, and nobody knew what they were,” he says. “They weren’t really guidelines for daily decision-making or strategic planning or anything else.”

So Laret started rethinking these things. He asked his management team to talk about concepts for a mission. Then he talked to different leaders and department chairs. Out of that came something short and easy to remember — caring, healing, teaching, discovering.

Through that process, he also developed values to lead people in their daily activity — professionalism, respect, integrity, diversity and excellence, or PRIDE. To get people embracing these values, he started by communicating them in every new employee session. He asked employees to give examples of behavior that both exemplified and didn’t exemplify each value. He put it on internal materials to hammer it home and would ask employees about them during luncheons, round-table meetings and any other opportunity he got.

“They all knew I was going to ask about this, so everybody kind of learned it,” he says.

He also started giving out five PRIDE awards a month to employees nominated by their peers as best exemplifying the values. Emphasizing UCSF’s new mission and values helped heal the employees.

“You need to turn all those employees into advocates, allies, supporters, believers, if you will, in the new vision,” Laret says. “ … Get them on board with it, and if you can do that, then I think all these other things, it’s easier to solve them. If you have an employee work force that is not on board with management, it’s going to be very tough.”

Build your management team

While employee re-engagement was going on, Laret also had to work to build a team of senior managers to replace the consultants that UCSF had in those jobs. But given the state of the hospital, it wasn’t easy.

“I had a lot of selling to do because people knew this was a place that was in bad circumstances after the de-merger — after the divorce,” he says.

He told candidates that UCSF was going to be great and the potential was fantastic, but he was also honest and said it wasn’t a place for the faint of heart.

“This is not a place where you’re going to be able to phone it in,” he says. “You’re really going to have to be energized by this challenge.”

He also needed people with good values.

“When I looked for all my lead people, I was looking for people who had a track record of success in demonstrating those good values in other organizations,” Laret says. “I needed the right people reporting to me, and then I charged them with making sure they had the right people reporting to them.”

He used search firms to hel p him and says he interviewed scads of people.

“I wish I had some great questions, but as much as anything, I asked people to talk to me about what their greatest accomplishments were and obviously about their failures and circumstances they felt didn’t go well,” Laret says.

He listened about what they had contributed and what they felt to be fundamentals of success or, on the other end, fundamentals that led to setbacks. He also asked about what they learned from those circumstances. This entire process took him close to a year to accomplish.

“I wasn’t interested in people coming in and telling me how great they were and all the fabulous things they had done, and when I asked about problems, it was they worked too hard,” he says. “I was looking for people who had another level of insight into themselves and had a level of confidence in themselves about how to lead in these kinds of circumstances. That would be what I’m still looking for today.”

Control finances

While Laret was starting to heal the emotional pains and filling vacancies, he also had to work on healing the financial pains.

“As we started to calm the place down, to move people off the trauma and into the present and thinking about the future, we knew our future was going to depend on getting stronger financially,” he says. “You can’t achieve much if you’re losing money.”

It starts with figuring out where the money was being spent.

“The first thing is, you want to find out who has the checkbook and who has access to your bank account,” Laret says.

In the university setting, departments often submitted recharges against each other, so he implemented actions to control who could submit recharges and in what circumstances they could do so.

He also increased efforts to make sure that the hospital was billing and collecting everything that it was owed to increase the money coming in.

Growth needed to be top of mind, so he started by doing an analysis of where the organization was losing money, where it was making money and what service lines contributed to both of those.

“In a place like this, there are probably 100 different service lines, and you need to look at each one of them and see what’s contributing and what’s not,” Laret says. “Which ones can you grow without too much difficulty? Which ones can you shrink without too much difficulty?”

For example, one of the big problems was the amount of patients coming in on Medicare and Medicaid. Many staffers didn’t realize that the hospital loses a little money on every Medicare patient, a lot of money on every Medicaid patient, and it depends on the commercially insured to make up for those losses.

Laret likens the experience to being Robin Hood in Sherwood Forest, “Because we’re trying to get enough rich people coming through the forest to cover the cost of the poor here, a lot of our leaders didn’t fully understand those economic issues,” he says.

Laret also looked at available benchmarks to see what other hospitals were doing.

“If Stanford Hospital or Cleveland Clinic or New York Presbyterian can provide this service at this cost with these goods and services, why aren’t we doing that?” he says. “ … Benchmarking is obviously important, but customize it to your specific circumstances.”

UCSF is mostly a referral hospital, so it ramped up marketing efforts to increase its referrals by sending staff to educate doctors across the region about its strengths in organ transplants and how it is the leading brain tumor center in the region. He also worked with health plans to make sure that when doctors did refer patients to UCSF, the patient would be covered.

It’s one thing to get more people coming through the doors, but he saw another problem that would affect growth — service.

“You tend to treat people in a fairly consistent way,” Laret says. “And if you tend to treat them in a sloppy way, with mediocre customer service, you’re going to do that for everybody. Maybe you’ll improve for someone really important coming through, but in general, you kind of do things in a consistent way.”

He implemented a patient concierge program to help make the experience more pleasant.

“What has happened, over time, is as we start to treat more and more patients like they’re special, that has become the norm in more areas,” Laret says. “We’re not No. 1 in patient satisfaction in the country, but we’ve come a long way from the bottom quartile to almost the top quartile in patient satisfaction, and that’s really this effort of really focusing on service.”

On top of increases in patient satisfaction, as a result of his efforts, business has grown, as well, and what started as an approximately $60 million loss the year Laret joined became a $70 million gain within five years. Today, the organization is not only breathing on its own, but it’s also running, jumping and enjoying its health as a profitable operation with nearly $1.5 billion in total operating revenue. It’s now also consistently recognized as one of the nation’s top 10 hospitals by U.S. News & World Report — and all of this success is the result of lots of little things adding up to a large change.

“Lo and behold, those things, after awhile, they really start to work,” he says. “Our business in volume has grown over 30 percent in the last nine years. I think it’s fundamentally a result of those kinds of initiatives.”

How to reach: UCSF Medical Center, (415) 476-1000 or www.ucsfhealth.org

Wednesday, 25 November 2009 19:00

Building success

When Primus Builders Inc. started growing, Richard O’Connell faced the difficult challenge of transitioning the design-build engineering and construction firm from a small business, where he could do everything himself, into a larger organization. For the first time, he had to come to terms with the fact that other people would do things differently than himself, but their way could still be successful.

“I’m satisfied with the results, but everyone has different processes to get a task done,” the president and founding partner says. “That’s been tough, because the company for the first two or three years was just a handful of people, and it doubled and tripled and quadrupled, so obviously you just can’t do everything and be everything to everybody.”

O’Connell has adapted, and today, he has 36 employees whom he’s learned to trust, and the team collectively has made the firm a roughly $65 million business.

Smart Business spoke with O’Connell about the principles that have helped him successfully grow his business.

Focus on your customers. It is important how you deliver a project and how you service your customer and the quality product that you put out. There were some expectations along the way to meet standards, so it wasn’t a total hand-off-the-wheel approach of just get it done on this date and under budget and we’re satisfied. We place a high emphasis on our customers. One of our strengths is we seldom or rarely ever lose a customer and that’s been a big key of our growth.

We’ve developed these customers over the years and it’s our job to make sure they’re getting exactly what they expected and getting the level of service they’re expecting.

Don’t take the customers for granted. Be your customer’s advocate inside your office. It’s easy for people to get off track in what’s important for the customer. It doesn’t hurt to go out and take them to lunch once a month. You’re in the area, you’re making a sales call, so you’ll say, ‘Hey, I’m in the neighborhood — do you mind if I come by and I take you out to lunch?’ Be there when they don’t have projects going on, as well. Just don’t take it for granted. Communication is key. We just want to always be providing a service.

Create accountability with employees. You need to make people accountable. If you’re going to assign a task, you need to hold them to deadlines and get that implementation done. If you let it hang out there, it usually just hangs out there, and there’s no follow-up on it, and it’ll be frustrating. We struggle at times with it, but I think holding people to deadlines is crucial. People don’t want to fail — they’ll find a way to succeed because we’re always too busy in the day to day to do anything outside of what we do day to day.

You can take their paycheck away, but that doesn’t work. The ultimate goal is you want everybody to feel like they’re a partner in the business and they’re a part of something and their contributions are recognized and rewarded — and that if they do the job, they can make a true difference, and it’s not just getting bundled up and somebody else taking all the credit. We try to pass the credit where it’s appropriate, and I think most people do not want to fail. As long as they have the tools and they can see the reward and get that job satisfaction, I think they’re going to be somewhat accountable for their actions and for the end results.

Have a family atmosphere. People work hard, and they’re recognized for it. I try to run it that way but the bigger you get, it does get harder to keep that family atmosphere.

A couple years ago, one of the fellows turned 50. We had a surprise birthday party for him in Wilmington, N.C. We took the whole company to Wilmington. We’ve had Labor Day lobster festivals at the lake houses. The Christmas party, we’ve had it at my house the last two years, and we invite outside vendors and customers. We just hold them in high regard because they’re going to make a difference for us.

Don’t take your people for granted. We’re selling a service, and it’s our people. If you take people for granted, it just becomes a job to them, and they’re punching a clock. I called my employees at Thanksgiving — I called every one of them and wished them a happy Thanksgiving. Some years, I call on Christmas Day or Christmas Eve, but I like to reach out to them and let them know I’m thinking about them and I appreciate all their hard work.

Get buy-in for goals. If you keep pushing the theme, you start to see people buy in to it by actions. Actions speak louder than words. We’ve pushed a couple of agendas recently with getting LEED certification, and we’ve got several people moving in that direction. We had to incorporate new software, and one of the operations managers took point on that, and that was a little painful because people were used to doing things one way, and they had to learn a new system, but we felt like in the long run it would be best for the company. I’ve had to take point on certain agendas I’ve wanted to promote and they were tasked with pushing it through and getting people to buy in and execute for that plan.

We haven’t done a lot to get people excited about it. These are tools we need to adapt to be more successful in our business — that’s how I promoted it. That’s just what we need to do, and for the most part, it’s worked OK.