Doing something wrong isn’t always something someone wants to admit. Yet Perry Daneshgari, owner, president and CEO of Computer Builders Warehouse, wants his employees to come clean when they make a mistake. “’Fessing up is celebrated and not punished,” he says. “We are educating managers to be small business owners and not followers.” Coming clean is also the way Daneshgari, who follows the business approach of Toyota and Microsoft, deals with failure. “We admit it,” he says. “Then we change course again. It doesn’t matter if it’s me or one of the managers.”
Daneshgari is also president and CEO of MCA Inc., which acquired Computer Builders Warehouse. CBW posted 2005 revenue of about $20 million and estimates 2006 revenue of about $25 million.
Smart Business spoke with Daneshgari about how he implements his collaborative leadership style and lets employees know he’s listening.
Q: What causes a company to fail?
Primarily lack of business knowledge of top managers. Management’s lack of understanding of business principles. They try to be profitable by increasing their prices, and they can’t compete.
Second, management thinking people working for them would be able to think like them. That is the biggest fallacy of all management gurus. They have all their theories and they think the people standing on line are going to think like their executives. If they were going to think like their managers, they would have their jobs.
Third, managers don’t understand how workers think because they have thought that way all their life and they have gone though the ranks. What makes workers tick might be different in manufacturing than in sales or the office. You can’t have one-model-fits-all. Managers have to understand how people think.
Fourth, the fact managers try to put in untested and unvalidated managerial theories. All these fads that come and go. They are all theories of some professors and nothing against professors, I’m one myself at the universities sitting there and creating theories. It worked in the ’60s and ’70s because we bombed the hell out of the rest of the world and no one could compete with us. Any management theory would have worked.
Fifth, the commitment of the management to change. Durability and the management actually stays behind the change. That usually kills implementation, if they don’t stay behind the change.
Q: How do you implement your collaborative leadership style?
We create implementation teams. First of all, we set the direction. Implementation teams go all the way down to the lowest level of the company. They are given direction. They are not self-driven teams; they are mission-driven teams.
The people who do the work know the environment the best. They are only lacking the bird’s-eye view, which the management brings in. We give them enough authority to come up with implementation and to do the actual implementation.
We assign an executive to the implementation team. It’s a very surgical, cross-functional team. Let’s say on a manufacturing team we have people who are involved in sales, as well as procurement, as well as manufacturing. There are multitudes of inputs. Manufacturing just does-n’t dance to their own drum. They take inputs from the users upstream and downstream.
Q: How do you make decisions?
That’s sort of an open door. I may have ideas I may put on the table; because I am the owner, they may think I have a higher weight on the ideas.
But I have to educate them if my idea is correct or not. Very often, they may have opposition to that. If the opposition is valid, we have a methodology we will test first before we put it across the company.
We take the input, and sometimes the decisions are just made by notifying me.
Q: How do you let employees know your door is open and you won’t ignore the suggestions?
I call that ‘open door, but closed mind’ policy. The doors are open, but the mind is not. It’s the action. We can talk about things, but, if you don’t act on them, you lose their trust.
We have the open issue list. We call it O.I.L. Every manager and every employee has an O.I.L. If they have any issues, they track on it and we review that religiously. If the items on O.I.L. are not resolved in a certain time, we assign a task force to go resolve it.
Let’s say the employee says we need to advertise in XYZ magazine. They literally have to go investigate what the cost is, what the read-ership is and then bring in the facts. We aren’t going to pass it to somebody who doesn’t have the same passion about it.
That person has to convince other people. Once it is approved by the management group, then we put resources behind it for implementation.
HOW TO REACH: Computer Builders Warehouse, (586) 756-2600 or www.cbwstores.com