Abby Cymerman

Sunday, 26 October 2008 20:00

Catch a rising star

Steve Wolever is always on the lookout for stars, those people who shine and who have the potential to one day run his business.

“What’s really driven succession planning home is this baby boom, because all these people are going to be leaving the work force, and who’s going to take their place?” says Wolever, owner, president and CEO of Signature Inc., which does business as Signature Worldwide.

Wolever, whose company provides training to service-based organizations, says Signature Worldwide’s succession program identifies top performers and helps them move up the ranks. Its U.S. operations and seven licensees reported $14.5 million in 2007 revenue.

Smart Business spoke with Wolever about how he finds the stars among his 300-plus employees.

Q. How can CEOs prepare for succession planning?

We’ve literally looked for our stars, and we try to identify them: What career path do they have, and if someone would leave, who is the next likely person? It’s OK to say, ‘Our next likely person is going to come from outside because we don’t have anybody,’ but you need to know that.

It really is planning, and that’s something you can’t just leave to HR. The key senior management people need to be involved in succession planning because that’s the strategic part of the future of your company.

Q. How do you identify the stars?

We have a committee that includes our director of HR, our CFO, my wife [Becky Wolever, chief operating officer,] and I. We set a time once a year with each one of the department heads, and they name two or three people in their departments that they consider their stars and explain to us why.

It gets that department head thinking about who they would have as a succession for themselves and who is showing extra talent or energy within their job that would be considered a star.

We ask them this question: If this was your business and you could only take two people from your department with you to start it, which two would you take and why? That has brought on some very interesting rethinking of who they thought were their stars.

Early on, when we asked the question about who they would take with them, when the department heads were in the room with us, they really stopped and thought and changed their mind.

Too often in companies, people get promoted because they do their jobs very well, and they might get put into a supervisory role; they were good workers, but they’re horrible supervisors. That’s not fair to them, either.

Some people do a lot of work and get a lot of things done, but they’re not necessarily the stars. You need a whole bunch of those worker bees that do great work and love their job, but they might not have the desire to go any further that. It’s not just about whether they do their jobs really well; that’s not the definition of a star in our company.

Our definition is a person who does good work but also has an aptitude and a desire to move, in most cases, into a higher position.

Q. What’s the next step in the process?

If that employee is a star within his own department, but if we think he has talent to move up into a managerial position, we might move him to another area so he gets a broader experience level.

If that employee lacks some education, then our HR people will sit down and talk to him about taking classes at the university or seminars on particular topics that would make him better suited to take that next step.

The term ‘talent management’ is truly that: We’re trying to manage that talent, and identifying it isn’t enough to have a succession plan. What do you do then? It’s taking those people and trying to figure out No. 1, what do they want to do? No. 2, how do we help them get to where they want to go? And No. 3, how do we make that work within our organization?

Q. How can other companies create a succession plan committee?

The CEO’s role would be to get your director of HR to organize everything and set the committees up. Get your people to identify the stars.

If you’ve got 250 employees, it’s very easy to overlook one or not know how well they do things. It will become apparent when you do these meetings. It’s worked really well for us.

We have different departments in three different performance review cycles, so it’s going on all year long, and we do those star committee meetings in conjunction with the performance reviews. The department heads take great care in doing performance reviews because they know they’ve got to tell the committee who they think their good people are.

HOW TO REACH: Signature Worldwide, (800) 398-0518 or www.signatureworldwide.com

Thursday, 25 September 2008 20:00

Quick-change artist

When Ted Abrams joined the team at Joffrey’s Coffee & Tea Co. in 2001, the Tampa company was in bad financial shape.

“When I came in, I eliminated the retail operations that the company currently owned and operated, except for the kiosks at Disney World,” says the co-owner, president and CEO. “I changed our focus and our core strategy from retail and operating coffee shops to wholesale.”

By encouraging quick communication among the management team, Abrams brought Joffrey’s out of financial hardship. Today, the company has 115 employees and posted 2007 revenue of $10.7 million.

Smart Business spoke with Abrams about how communicating with speed can facilitate a successful turnaround.

Q. How should a leader approach a turnaround?

Don’t be afraid to make change within the organization; change is good. In any turnaround situation, some people are willing and able to accept the change, and others just can’t.

Everybody’s got to be on the same path at all times, and they’ve got to be able to buy in to the vision and the strategy. If not, then it’s not going to work.

Laying out the strategy has to be done very quickly in the beginning, and then it has to be communicated on a continuous basis. You can’t just lay it out one time and then walk away from it.

There is a lot of micromanagement that has to be done, but it’s being done in a communicative way that will create the buy-in from your management team, and at the same time, it allows them to gain confidence in you. You take little baby steps along the way and then very quickly communicate the successes as you come upon them because your team will begin to see that the strategy is working.

It gives further solidification to the buy-in to your strategy and vision for turning your company around.

Q. How do you communicate your turnaround strategy?

Recognize what the company’s strengths and weaknesses are. Put a plan in place around those strengths and eliminate those weaknesses.

Meet with your direct reports multiple times a week. Make sure that when there are specific tasks that need to be done, you’re sitting down one-on-one with your management team and laying out their responsibilities and their functional roles on a day-to-day basis. If there are too many things thrown at them all at once, they’ll get overwhelmed, and the execution will inevitably fail.

Focus on the low-hanging fruit: What are the things that can quickly be identified as weaknesses, and then how do you very quickly execute to eliminate them from your business model? You sit down with each individual, communicate that to them and make sure that they completely understand.

Get feedback and input from them. Employees who have been doing their job for quite some time may get tunnel vision — but they still are able to see certain little golden nuggets that you may be overlooking.

Moving quickly provides some form of comfort: We are going to be OK, and we’re beginning to see the fruits of our labor. You can have the best execution plan in the world and can execute against it, but if you don’t celebrate the successes along the way, then it can break down very quickly.

When we executed something and saw it was working, it was discussed openly throughout the organization.

We did little things that really didn’t cost the company all that much — brought in pizza or ice cream at the end of the day. We would all come together as a complete team and talk about what was done and what worked, and it created additional energies for that next strategic piece that we needed to accomplish.

Q. What is the CEO’s role in the communication process?

You definitely want to listen and seek input from the people that report to you because it shows that you care about them. You’re interested in hearing what they have to say.

They have to feel that you have their best interests at heart, and, at the same time, they know that they can come to you to talk about anything. You need to be the absolute champion of the cause at hand. I sit down one on one and just ask, ‘What do you think would work? What have you seen in the past that hasn’t worked?’

By allowing them to provide their input — and then there’s feedback coming back from you — you work together to ultimately come up with what’s going to be the best strategy. It provides the best form of execution, if right upfront, you’ve got their buy-in.

Your job is to keep people focused to task and continuously communicate the successes. When something is not going as planned, you very quickly have the conversations with the team and the individual responsible for that particular facet to see where you’re going awry and what you can do to get back on track.

HOW TO REACH: Joffrey’s Coffee & Tea Co., (800) 458-5282 or www.joffreys.com

Tuesday, 26 August 2008 20:00

Unlimited potential

Mercedes Walton and Hannibal have a lot in common.

Although Walton is a modern-day executive and Hannibal is a historic military leader, Walton is inspired by Hannibal’s famous quote: “We will either find a way or make one.”

As a child, Walton adopted it as her lifelong motto, and it continues to serve her well as chairman and CEO of Cryo-Cell International Inc., a 55-employee family cord blood bank that posted fiscal 2007 revenue of $17.5 million.

“Everything I’ve done in my life is reflective of a spirit that will not be defeated by the odds,” Walton says.

Smart Business spoke with Walton about how she provides the strategic vision for her innovative organization.

Q. How can CEOs establish a corporate vision?

The key is having the vision of the organization in the context of its industry. You have to know what position and differentiations you’re attempting to achieve in a particular industry. Where do you want to take the business in terms of industry leadership?

You really have to be at the helm of the ship and have a comprehensive understanding of the environment. That includes understanding the direction of the industry, the strengths and weaknesses of your company, what the company is setting out to achieve for its shareholders, and how the company intends to achieve that.

A vision is the foundation. Underlying that would be the strategic underpinning, and then underneath that would be the tactical plan.

Q. What is the first step?

Take an honest and candid assessment of where your business is. Once you have a complete understanding of that and you’re able to envision where you can take the business from the current place, you have to have imagination. You have to have the ability to think innovatively, imagine how the world is moving and how the markets are evolving.

Then, you have to set benchmarks as to where you want to be, how you’re going to get there and when.

In 2003, we had $7.5 million of revenues and losses of about $7.5 million, so we were literally bleeding, and we were also faced with two major and formidable competitors. We stepped back and took a critical examination of ourselves and of the industry.

We determined that for us to stabilize, to become profitable and to ultimately grow the business, we would have to make numerous changes and reposition ourselves.

Q. What process did you follow to reposition your company?

The first step was to enhance the features of the service in a highly differentiated and strategic way. We began to offer features to our service that our competitors did not have, and as a result, we were able to increase the price of the product significantly.

Part two was to recognize that, longer term, we would need to diversify [our] product portfolio. We looked more broadly at the whole stem cell arena and began to consider other sources of stem cells and strategies for commercializing new services that would broaden our portfolio beyond umbilical cord blood stem cells. That turned out to be a pivotal decision for the company. It was a comprehensive recipe of incorporating the present situation with the vision of the future.

The next step is to understand the voice and the needs of the customer. That’s tantamount to providing the solution space of where you can go. You are designing something that you know, based on the customers’ needs, will fulfill their requirements.

Q. How do you determine your customers’ needs?

Invest the time to listen to your customers. We spend an extraordinary amount of resource taking the pulse of the customer. On an annual basis, we conduct comprehensive customer satisfaction surveys to understand what we’ve done well, what we can improve upon and how it stacks up to what our competitors offer.

The first step is to get a critical understanding of how you’re viewed by the market you’re serving. Then you have to innovate to the future needs of the customer. By understanding the customers’ needs and overlaying that with where the industry is going, you can unlock some of the hidden messages of where the industry is moving in the future.

Recognizing your core competence is the linchpin to your future. It provides the elements of differentiation. By combining the understanding of our core competencies with innovation, we’ve created what is, in effect, an industry of one.

Q. How do you stay true to your vision?

First, remove the notion of failure from your mindset. Every single time I’ve had what seemed to be, at the moment, a setback or a crisis or a struggle, it actually turned out to be a stepping-stone to much greater things.

And second, take thoughtful risk based on data, history and intuition of the future. Patterns are repeated over time. Look at trends and at what has happened in the past. That’s a good indicator as to how things might emerge with a different twist of the present.

HOW TO REACH: Cryo-Cell International Inc., (800) 786-7235 or www.cryo-cell.com

Saturday, 26 July 2008 20:00

Defying boundaries

When Scott Isabel began working as superintendent for The Diaz Fritz Group Inc., he knew his opportunities were unlimited.

He continued to move up the ranks of the general contracting company, and 20 years later, Isabel is co-owner, partner and president of the company that does business as Diaz Fritz Isabel. And as the leader of 42 employees, Isabel never forgets his roots.

“From day one, our founders Del Diaz and David Fritz said, ‘The sky’s the limit. If you want our chairs one day, you can earn it,’” Isabel says. “And we still share that belief.”

Smart Business spoke with Isabel about how he hires good people to lead his $32.4 million company into the future.

Q. What is your key to growing a successful company?

Teamwork is the thing we focus on here the most. Everybody on the team has to play a role, and we need everybody to fulfill their role so the whole team can survive.

We don’t ask people to step out of their position here. Everyone brings value and is good at certain things; we would like you to focus on what you’re good at and what you’re passionate about.

We just finished a project, and the customer came into my office and said, ‘Your group made me feel like part of your family and part of your team.’ That’s what we strive for here. We want our customers, our vendors and everybody involved to feel like we’re all part of a team.

Q. How do you attract good people?

It starts with having a company with a great reputation. Then, it’s important for potential employees to see the track record of your current work force and how long they have stayed at the company, and finally, they see that there is no ceiling to where they could end up, no limit to what position they could hold within the company. They are not pigeonholed.

We’re not building this company for any one of us. We’re building it so it continues on past us, and we need those future leaders to continue it. We are looking for the best talent, and the best talent needs to have growth potential. They are searching for what they can be one day and what opportunities the company will provide for them one day.

We have employees who come to work here from other companies, and they say, ‘There was nowhere else for me to go there.’ That stunts growth for employees, and I think it kills their passion.

Our philosophy here is to wrap ourselves with people that are as talented, if not more talented, than we are. We’re not concerned with growing people up that may become better than us.

Q. What can prevent a company from growing?

A company won’t grow if its leader doesn’t have any appetite for trying to create an atmosphere for the future leaders of the company. From my perspective, I have to prepare a plan for the people who are going to sit in my chair in the future, and we’ve got to have a plan for that. A true leader will not be afraid to let somebody take their position.

You have a host of talented people around you, and as people grow and become more talented, they have a couple of choices: They can grow with your company, or they can go somewhere else. We would rather have our employees continue to grow here.

Q. How do you help people grow without feeling threatened in your position?

It has been a maturation process and a learning process. As our company has evolved and grown in size, we had to think differently. I don’t think we even thought about that potential 10 years ago, but as we continued to strategize and talk about what we’re trying to accomplish, it became very clear that we weren’t doing this for any one of us but we were doing it for all of us in the team. We were going to do whatever was best for the team, not for any one person or for any one profit.

I went from being a player to a coach to a leader. As the evolution happens, you have to trust other people to be able to do things, too.

Our founders had that philosophy of not being afraid of the potential of people. From the first day here, it was instilled in me. I’m not going to say I totally understood it at the time, but it became clearer as I matured and got some practice at it.

You realize you can only do so much by yourself. It’s like a sports team: Most teams don’t work out too well with one all-star.

HOW TO REACH: Diaz Fritz Isabel, (813) 254-0072 or www.diazfritz.com

Saturday, 26 July 2008 20:00

Deliberate and decisive

Amy Gutmann likes to surround herself with smart people.

As the president of the University of Pennsylvania, she hires sharp employees to join her team and help her lead the organization’s 20,381 employees in a deliberate and decisive manner.

“Before I became president of Penn, I studied decision-making in large, complex institutions and in democracy,” she says. “All the evidence suggests that one person relying on his or her own strengths alone will not be nearly as effective a leader as a person who brings together lots of smart people in a team, deliberates with them and then decides what to do.”

Gutmann says it is another version of, “In unity, there is strength.” Having a wise work force creates commitment to the institution and brings the best ideas to the floor.

Smart Business spoke with Gutmann about her rules for leading an intelligent team.

Hire a smart work force. We are an educational institution, so it would be ironic if we didn’t take advantage of the fact that we attract very smart people. I bring a lot of them on my team, play to their strengths and decide on the basis of what everybody has to offer me in supporting a vision for the institution that already has buy-in.

Before I hire them, I have a good sense of what their strengths are, and then, there is nothing like practice for showing what people’s strengths are: rolling up their sleeves and making decisions. There’s no science to this. It’s really an art, not a science.

I think it’s important for CEOs to be very involved in hiring. One can’t be involved in hiring everybody, but letting search firms do most of the hiring on your senior team is a serious mistake. Search firms can help, but you really have to be involved. I try to determine before I hire people whether they share the values and the goals of this organization.

It’s culture coupled with commitment and expertise. You can’t just have the culture if you don’t have people who are also committed and expert at carrying out the day-to-day important tasks that need to be done.

Communicate in a clear and inspiring way. Speaking directly to large and small groups is very important for the CEO to do, and there are two reasons. The first is there is still no substitute for face-to-face communication for showing that you care about the people who you’re serving, and the second, you get spontaneous feedback; you can see what resonates, what people are concerned about and you can hear from them directly.

It’s not a substitute for all the other things you have to do to move your institution or organization forward, but it sure is essential to getting the pulse of the place.

Communication is one of the rarest skills, and it’s essential for a CEO. If the CEO can’t effectively — and in an inspiring way — communicate the goals of the organization, then who will? If it is somebody else, you have to ask the question: Is the CEO motivating people?

Motivate your employees. If people know that they are valued, not just once a year when they get a pay raise but in day-today ways, they’re going to want to do more. Making a positive difference is an energizing experience, but you have to know that people appreciate what you’re doing.

Very few people are saints and can just continue to do things without any positive feedback. I am not a saint, and I don’t expect my people on my team to be so. I expect them to work hard, work effectively, be very committed, have the right values, and they should expect me and others to appreciate them for doing that.

Get buy-in. For a business to be successful over time, people other than the CEO have to believe it’s a very worthwhile enterprise. If people believe that, the CEO can get the support that he or she needs for making hard decisions and doing the difficult things to make a business better. So it is a virtuous circle.

Only if one has the support of one’s constituencies can an organization move forward over time. You can’t be a leader without followers, and these days, if you’re surrounded by smart people, you can’t have slavish followers. You have to have followers who really believe in the same mission, the same goals, as well as some of the strategies that you develop to accomplish them.

Make sure the lawns get mowed. The best business advice I ever received was tongue-in-cheek from a Penn trustee and alumnus, Jon Huntsman, who is a very successful businessman. Shortly after I became president, he invited me out to his Utah getaway. He sat me down and told me there were two things that presidents had to do to be successful. No. 1, they had to make sure that the lawns got mowed, and (No. 2), they had to raise money.

While it was tongue-in-cheek, it wasn’t entirely without seriousness. What Jon was saying to me is that a leader has to set priorities and stick to them. Be sure you know what you want to do, and don’t get distracted by all of the other things you’re going to be called on to do.

HOW TO REACH: University of Pennsylvania, (215) 898-8721 or www.upenn.edu

Saturday, 26 July 2008 20:00

Building success

John Brand is no stranger to corporate growth. Butler, Fairman & Seufert Inc., a civil engineering firm with 2007 revenue of $15.3 million, recently acquired a Lafayette civil/environmental company after partnering with the business for several years. In addition to making the acquisition, Brand — the company’s president and a principal — says Butler Fairman has grown by balancing new opportunities with maintaining existing client relationships.

“Our integrity and our firm’s reputation is paramount,” he says. “We’d like to be viewed as a trusted adviser.”

Smart Business spoke with Brand about how he and his team of 145 employees have become trusted advisers to their clients.

Q. How do you communicate to your clients that you will follow through?

First and foremost, we make sure that we take care of our existing clients so that they keep calling back and asking us to take on the next project. That’s just demonstrated on our past performance, and that’s very important. Sometimes, it’s really hard for clients to sort out until they have some experience with the firm.

It’s easy for everybody to come in and say, ‘I can do this job; I understand what needs to be done here,’ but to really separate yourself from others, you have to promote personal service and be responsive to your clients.

Your clients identify a problem, and they don’t know what’s needed for a solution. They rely on you to come up with a solution. They trust that you’ll be prudent with the decisions on their money and their schedule; they have a lot at stake. They need to know that you’ll be able to follow through and get the job done for them.

Q. How do you promote personal service?

We like to get a lot of face time with our clients. We have seven client services people on our payroll. Since we founded the company, we chose to call that department client services rather than business development because sometimes business development gives the connotation that you’re always pursuing other projects that you don’t have.

We do pursue new projects, but I’ve found that we’re able to grow if we devote four days a week to servicing existing clients and one day a week to pursuing new opportunities and new clients.

Q. How did you determine that formula?

About 10 or 12 years ago, we sent two people out on the road to call on only new clients. The amount of time they spent with it versus the payoff — it wasn’t very good. We found that if we were totally pursuing a bunch of new opportunities, we didn’t do a good job of taking care of our existing clients.

It takes a lot more time to develop a new relationship than it does to maintain an existing one. We’ve delivered projects for our existing clients in the past, and we have an emotional bank account with them.

[That means] doing what you say you’re going to do. The values in our company are honesty, professionalism, consideration, dedication and accountability. That’s how we define it to our employees. We have a constancy of purpose.

Q. What one thing can prevent a company from growing?

A company won’t grow if the leadership doesn’t see growth as a priority. If you want to maintain the status quo, that certainly can be deflating for the employees — and even the clients — to see that.

You need to be profitable enough to continue to invest in technology. You can’t fall behind in that regard. In providing good equipment for our personnel — the proper software and the training that goes along with it — they know that the company will make that investment for them to do their job well. If they look around and see that our competitors have better equipment and better resources, that can be deflating.

Q. How do you avoid the status quo and keep moving forward?

We’re in our fourth generation of owners, and we’ve all viewed it as our duty to have the company be better when we depart than when we started. We view it as being good stewards to this business. We do our part for a period of time, and then we hand it over to others and let them do the same thing.

When I came in as an owner in my mid-30s, the transition plan for when I retire — as far as the cost and the time frame — was already agreed upon, so there will be no surprises later. A person has a window of opportunity to do some good; it’s not forever. In our particular practice, we can continue our employment with the company, but we step aside as principals at age 62.

It does give a sense of urgency, but we’re also structured where no one’s going to control the destiny of the company. There’s a buffer between what’s best for the individual and what’s best for the company.

HOW TO REACH: Butler, Fairman & Seufert Inc., (317) 713-4615 or www.bfsengr.com

Saturday, 26 July 2008 20:00

Realty check

Karen Derr is a tightrope walker.

That’s the feeling that Derr gets at Karen Derr & Associates Realty Inc. as she tries to balance growing her midsized real estate firm and staying small enough to innovate.

“People start trying to buy you or merge with you, and there’s this lure of getting bigger and bigger, and yet, you have some assets and resources that are very difficult for a very small company to have,” says the founder, president and CEO.

“Staying at that plateau in the middle gives you the advantage of being able to move and innovate much quicker than a large company.”

Her other advantage is that when she founded the real estate company, she did it all, so she understands firsthand what her five full-time employees and 55 independent contractors are experiencing, which helps her make educated choices for her $152 million company and maintain a bond with her employees.

Smart Business spoke with Derr about how she motivates her staff and rewards accomplishment.

Consider your guest list. Don’t hire anybody that you wouldn’t want to have dinner with. When you’re new and trying to recruit, you take almost anybody you can get; it’s a necessary evil, but it’s just not pleasurable. 

It’s not fair to hire the person if you’re not really compelled to spend time with them. That’s not fair to the salesperson and your customers, and it’s not fair to you, either, because you have to spend a lot of time with the people that you hire.

As we started to grow and become successful, we started to spend more time with the people who are the key to our organization. I said, ‘Wow, this is what it’s all about. It should never be any way but this way. All of us are enjoying our business and each other.’

It just evolved after finally getting it right. We’re a diverse group of people, but you can have synergy in a group without everyone being the same.

Jump into the trenches. I’m out there every day, shoulder-to-shoulder with my employees. For a midsized company, the competition is so fierce that you have to be out there every day.

 

You can’t arrive as the owner of a company and assume that what your sales force is up against is the same thing you were up against a year ago, sometimes even six months ago. If you’re not in front of clients, just like your salespeople are, you could easily lose sight of what’s going on.

Stay in focus. Being in front of clients helps your competitive edge. Maybe that’s how I keep in touch with reality. I hear firsthand what our clients like and don’t like and what they’re saying about our competition and how we’re competing.

 

If we don’t get business, I ask why. We’re so focused on innovation that we see it as a great opportunity. We’re always looking for something extra that we can do better or do faster.

Successful companies don’t have time to do big market research projects. The better you can bring back information from clients and salespeople, the quicker you can make a strategy based on that and the better off you are.

Don’t be afraid to turn down business. We have a mission statement about who we’ll do business with and who we won’t. If there’s not a high level of ethics with our clients, we won’t do business with them. It’s hard sometimes because it’s so competitive and you want that business so badly, but we all know that when there’s a problem, we will look at each other and say, ‘They’re going to have to find someone else to do business with.’

 

That empowers my sales-people. They know that if they come to me and they say that they’re having a big problem with a client, I’ll say, ‘Don’t do it. Tell them to go somewhere else.’

Skip the weekly sales meeting. We send out a little e-mail communiqué four days a week, and salespeople participate in weekly e-mail discussions that are almost always geared toward adding value for our clients. We don’t have weekly sales meetings at all.

 

When I worked before at places that had them, they were dull and a waste of time, and the top producers didn’t want to come. I didn’t enjoy it when I worked as a salesperson for another company; I didn’t see they were of use. We do a lot of things by e-mail where people can respond after they’ve really had the time to think about the discussion at their own pace.

Set goals and acknowledge hard work. In contrast to competitions and contests, a lot of people respond really well to one-on-ones and personal goals that we set together. If I notice that they’re falling short, I’ll sit them down again and say, ‘This is not where you want to be.’

 

When I see that they have reached their goals, I acknowledge them. Many times, it’s just personal congratulations and maybe going out for a drink. We also give laptops or private office space when they reach certain goals.

It’s important to me for a lot of different reasons. When you’ve come up through the ranks and you’ve done the exact same job they’re doing, then you genuinely feel an amount of thankfulness and gratitude. When you start a business, you always feel gratitude when money comes in that you personally didn’t have to go make.

HOW TO REACH: Karen Derr & Associates Realty Inc., (800) 656-7653 or www.karenderr.com

Saturday, 26 July 2008 20:00

A sunny outlook

Michael Rosati knows windows inside and out, but he knows his customers even better.

When he founded The Rosati Window Co. LLC in 2000, he pledged to treat his customers the way he wants to be treated.

“You go into an appliance store, and they jump all over you,” says the founder, president and CEO of Rosati Windows, which posted 2007 revenue of $18 million. “That’s not what consumers want to hear today. They’re intelligent, decision-making adults, and if they want to buy something, they’re going to buy it. That’s one of the main things that I changed in marketing our business.”

Smart Business spoke with Rosati about how he and his 167 employees create successful customer relationships.

Q. How do you grow a successful company?

You have to have a firm commitment for customer satisfaction. In most companies, no matter what they’re selling, the salesman makes the sale, takes your money, and you never see him again.

Three years ago, we started a quality assurance. After the windows are installed, we send a trained professional to do a walk-through with the customer and make sure everything’s the way the customer wants it. If there’s something that’s an issue, we can usually fix it on the spot.

The quality assurance program has been very successful for us. It’s another way to tell our customers that we care about them and that we want them to be happy.

We couldn’t afford it at first — it’s an expensive program — but it was already in my business plan, and I knew it was going to happen sooner or later. The department doesn’t earn a profit; it’s all expense to make sure that my customers are taken care of. It’s part of our cost of doing business, and it has created instant trust and instant credibility.

Q. How does rapid growth affect that credibility?

A lot of companies panic when they start getting a lot of orders because they’re getting busy. They shut down their marketing and advertising, and that’s a huge mistake.

Then, all of a sudden, the customers forget who they are.

Once the machine is going, you don’t want to stop it because it might not start back up again when you’ve caught up with your orders.

Q. How can business leaders manage rapid growth?

They need to contact their customers, tell them they’re inundated with orders and that things are going to be running a little bit late.

About five or six years ago, we had this huge spurt of business. I sent a letter out to every one of my customers, apologized that we were running behind and gave them all a discount. I didn’t lose one order, and nobody was upset with us.

I got a lot of phone calls, and people appreciated the fact that I took the time to be upfront and honest with them. It was just the right thing to do.

If you attack the issue upfront, people appreciate and accept that. When you don’t talk to them and the product doesn’t come in on time, that’s when people get upset. That’s one of the problems with a lot of businesses — they’re not upfront.

Q. How do you deal with rapid growth?

You’ve always got to be thinking one step ahead. You have to recognize the market and have a feel for the influx of orders and customers. You just know that things are brewing. It’s a seventh sense, a gut feeling and a best-guess scenario.

You can’t be a brand-new company and lease 100,000 square feet; you’ll be bankrupt. You’ve got to start small, but you can’t put yourself in a corner or you’re not going to grow the business, the building and the employees.

Q. What happens if you fail to stay one step ahead?

If the business takes off and if you’re successful, you’re going to get overwhelmed with business and you’re not going to have enough people on staff to handle it. You have a responsibility as the owner to be aware of the overall picture.

If you don’t plan ahead, the potential of upsetting and losing customers is very high. If you take an order and don’t have a clue how you’re going to fill it, that’s a real issue. If you do it enough times to enough people, then nobody will buy from you.

One of the most important things you have to do is build a good reputation. There is so much competition in the market today. You have to attract people to your business because they trust you, believe in you and want to do business with you. Reputation is everything. With a bad reputation, you’re done.

HOW TO REACH: The Rosati Window Co. LLC, (888) 866-7800 or www.rosatiwindows.com

Wednesday, 25 June 2008 20:00

Investing in the future

Jim Green works hard to keep his employees happy, knowing that how he treats them impacts how they treat their customers.

And the customers seem to be happy. As an example, the founder, co-owner, chairman and president of Aetna Maintenance Inc. recalls a prospective customer who called an AMI customer for a reference.

“Our customer told them that we made him feel like he was our only customer,” Green says. “That prospective customer is now a customer.”

Green’s 1,500 employees provide commercial and industrial janitorial maintenance, and the company posted 2007 sales of $23 million.

Smart Business spoke with Green about how he attracts and retains good employees.

Q. How do you build a strong work force?

You have to keep your employees happy. We pay a competitive rate for the employees, and if they’re not happy with our company, they’ll go to work for someone else, and then we have to retrain someone else.

We give them training, and we make them comfortable in their job. We don’t hire someone new and just turn them loose. They actually work with a trainer or a supervisor on-site to get them familiar with what they’re supposed to do, with equipment and supplies.

If they’re doing a good job and they’re happy at their job, our customers will be happy. That’s the whole key to growth.

Q. How does training benefit your company?

There’s less turnover. If employees are trained and know what you expect, they’re happier.

If everyone is paid the same minimum wage, employees are going to stay with the company that treats them better than the other companies. They’ll feel comfortable in their job.

If you can cut (turnover) in half, management doesn’t have to spend time training new employees, and they can devote that time to better checking the building and making sure our customers are happy. We don’t ask our employees to do something that our management team would not do.

Q. How do you attract employees?

We try to get referrals from other employees. If they can bring somebody in, and that person lasts for 90 days, we’ll give them a bonus. If an employee knows someone who’s looking for a job, it makes more sense to hire that person.

We run a statewide background check, but that really doesn’t say how hard they work or their attitude — you don’t find out those things until after they’re hired. But, if someone says, ‘I know this person, and he’s a good worker who’s going to do his share of the job,’ we prefer that route.

Q. How does hiring that way benefit you?

That helps the quality of employees; hopefully, they’re better than you’re going to get off the street. If you run an ad in the paper, you have no idea the quality of the person. They may have a clean background, but you don’t know how good of a worker they are.

With privacy laws now, most employers will not honestly tell you what an employee’s like. We try to put the percentage on our side. It may not work for other people, but it works for us.

Q. What advice would you share with other business leaders trying to grow their company?

Keep your employees informed and ask for suggestions from your employees. I’ll meet with my top management, and we’ll kick around how we can save a customer money or how can we give them a better job than they’re getting now. You’d be surprised at some of things that other people come up with.

My management style is autonomy with accountability. My managers have the autonomy to make changes that will result in a better outcome. They also have to have accountability. It’s a two-edged sword; they’ve got the freedom, but they also have the responsibility.

You don’t have to make all the decisions yourself. Everybody shares the decision-making, and you empower your management people to do the job that they think should be done.

I don’t believe in bullying or management by intimidation; that’s not my style. I absolutely hate that, and I will not have it in my company. That went out of style 30 years ago.

Q. How do you deal with people who don’t make good decisions?

We discuss what was wrong with the decision and how we can correct it. Hopefully, they’ll learn from their mistakes. If they make the same mistake over and over again, then you have to discuss whether they’re in the right business or not.

Our customers are tough. Dollars are harder to come by, and they want more for their dollar. If you can’t do it, they’ll find somebody that can. Everybody is doing more in their jobs with less people, and there’s more demand on everyone.

HOW TO REACH: Aetna Maintenance Inc., (800) 330-2400 or www.aetnamaintenance.com

Wednesday, 25 June 2008 20:00

Bases loaded

George Ball wants all of his employees to be all-stars.

The chairman of Houston-based Sanders Morris Harris Group Inc. views his role as leader of his 684 employees similar to that of the manager of a baseball team.

If someone dictates the starting lineup to the team manager, Bell says that tends to create in the manager a subliminal desire to achieve defeat. But, if the manager establishes the batting order himself, he is motivated to show that he’s made good choices.

That’s why Ball allows his managers to make their own choices at his $185.8 million financial services holding company instead of dictating behavior to them.

Ball’s firm provides its clients with money management, trust services, investment banking and brokerage services. Fifteen years ago, Ball joined the firm’s New York office — one of many locations throughout the United States — and moved to Texas in 1996. He expects the firm’s 2008 revenue to reach nearly $225 million.

Smart Business spoke with Ball about how he delegates his authority and how he empowers his work force.

Delegate, but stay involved. My leadership style is probably more that of an involved delegator than an order giver. It is very difficult for people to manage following the dictums of another person. 

On the other hand, delegation without involvement is abrogation because you are simply saying, ‘Here is the job. You go out and do it.’ If you don’t counsel, aid, involve, motivate, hand-hold with a person, then you’re really not doing anything to enrich their abilities.

Don’t micromanage. I ask people questions about what they’re doing. I’ll probe them on the ‘why.’ I’ll challenge them on personnel decisions or strategies and not to try to superimpose my will but rather to get them to think thoroughly about their direction. 

My father was a college professor, and he said he would never tell a student an answer. He would talk with them, work with them and coax them until the student got the answer.

You really don’t learn simply by having a fact handed to you and then regurgitating it. Your cognitive facilities are enriched only when you are able to articulate an answer or a theory, and that’s what I find works best for me most of the time.

Grow and then empower. When I first worked at the firm, we were — of necessity — more involved in every intricacy, every decision, every fact, every outlay and every investment. As you add more people, you have to empower them, not leash them. 

You get much more creativity, much more imagination, much more involvement and much more dedication from people if they know that they, in part, create their own destiny rather than simply acting out someone else’s destiny.

No. 1, tell them that they are empowered so that there’s no mistake about it. No. 2, have a very brief compact with them, which essentially deals with three things: The first is that we will talk frequently, the second is that I would like to be able to talk through with them the important decisions they are making before those decisions are etched in stone, and the third is that I will not go around them to manage their people or their departments but will work with them so that they can do it well.

The response is positive, and sometimes it’s skeptical: ‘Will you really let me be the master of my destiny, or are you going to be a micromanager?’ It takes time working together before they believe that.

Sometimes people come to you rather than making the small decisions, and even though I may know exactly what the decision ought to be, I will tell them, ‘That’s up to you.’ It makes them better because, No. 1, they get to rise or fall based on their decisions not mine, and No. 2, they become stronger.

They know that they get to, within some broad limits, make the key decisions affecting their areas of responsibility.

Be motivated by your career. I find this business to be a fascinating combination of finance, of people and of emotions. If you get money, mankind and motivation all mixed together, it is a constantly shifting kaleidoscope, and that is very exciting.

When you see people who don’t love their jobs and don’t get joy out of their jobs, they generally don’t do them well, and they should do something else. Most people spend more of their waking hours at their vocation, their profession, than they will with their families or doing anything else, so if you aren’t exhilarated by your work, you’re really living your life foolishly, and you probably don’t do it well.

People do well those things that they enjoy.

Challenge your employees. I am excited about the business, and to some extent, excitement is infectious. Try to hire people who are equally excited about the business, and help people to have a series of constructive challenges that make them better and give them some successes and a reason to enjoy every day and every hour.

That gets back to being an involved delegator. If people see that you’re interested in what they’re doing, that you are aware of what they’re doing, that you are involved in what they’re doing, but you aren’t meddling unnecessarily, they will perform better.

We all like to be on stage. We are all actors, and we enjoy appreciative audiences. If you respect your boss, and that boss is an audience for you, you will sing longer, stronger, more on key and put more into it.

HOW TO REACH: Sanders Morris Harris Group Inc., (713) 224-3100 or www.smhgroup.com