Identify with your team. I never ask an employee to do something I wouldn’t do myself. They understand that I understand the difficulty of the processes they go through.
That’s important from the fact that most people look at their job as a lot more difficult than the next person’s job, that they’re working much harder than the other people are, so knowing that I’ve done their job in the past, I understand exactly what they’re going through.
I build that understanding by the fact that I’m still willing to go back and do the part of their job that they need help with while they’re doing it. Whether it’s going outside and picking up paper in the yard to make it look good for customers, emptying trash, cooking lunch, helping with any of their individual tasks, it doesn’t matter. We’re all part of the same team.
To give you an example, we once had an executive vice president who had a lot of education and a lot of titles behind him. I asked everyone to go outside and clean up what needs to be cleaned up so that it looks good for our customers. So, I’m out there picking up sticks with everybody else, and when I came back in the office, he was still sitting in his office. He wasn’t willing to get his hands dirty.
Within two weeks, he was gone. That shows me by example that if he wasn’t willing to do what I’m willing to do, that’s not really a team effort.
Get down to a personal level. You have to get out of your office. You have to mingle with people. You have to understand that they have a personal life, and what is important in their lives is different than what is important in your life. But it’s taking that extra effort to show that it is important to you.
You have to make time for that type of communication. You do that by giving other people responsibility to perform the tasks that you don’t have time to do. You have to basically get rid of the things on your plate that somebody else can do, give them the authority to make decisions and then let them do it. That will give you the time to do other things, like examining the direction of the company and paying attention to employees.
To make that happen, I push everything down as far as I can until I see mistakes being made. You give people the authority and responsibility, give them the opportunity to step up to the plate and take care of those details.
Treat your employees like customers. The No. 1 thing as an owner is to find the right people. People are your most important asset. Our saying here is that our employee is our No. 1 customer.
Customers come and go, but your employees are here, so you have to treat your employees as your No. 1 customer. Then they know how to treat your customers. So, it’s finding the right people and then treating them the right way. Wednesdays, we have someone come in and do manicures and pedicures on company time, and we pay half. Other Wednesdays, we have someone come in and cut hair on company time, and we pay half. We have a heated massage bed that they can go in, close the door and use any time they need to. We have an outdoor grill. We have teams from our six different disciplines that work together to make creative meals.
So, we do these things for our employees, and they understand that we value the company, and they push that down to our customers.
Listen, don’t just hear. What you want to do is 70 percent listening and 30 percent talking. My sales training has given me the skills to ask open-ended questions, listen to the answer, then speak.
Most salespeople have to be leaders. They have to listen well, they have to hear what the customer is saying, they have to read between the lines and hear what a customer is really saying. Just hearing a question doesn’t mean you’re really listening.
Just pay attention to any conversation and ask someone what they were just talking about 10 minutes ago, they have no idea what they said. You have to pay attention to really hear. That’s why listening 70 percent of the time and talking 30 percent is really what I try to do.
Talking with a customer or an employee, or even with my spouse, I really try to ask open-ended questions, to listen, to really try and understand where they are coming from.
Keep track of your statistics. Measuring your business plays into the sports team analogy. You have to keep score. Your score is going to end up being the bottom line.
The measurement is always important. It gives people goals and objectives. It gives them areas they can see to improve. Measurements are important. In our case, a sales-driven team is always looking for goals, for increases in sales. It’s very important to understand the score and what it means for the company.
HOW TO REACH: DEI Inc., (513) 825-5800 or www.dei-corp.com
Once upon a time, there was a company that made buggy whips, says Barry Pletch.
With horses and carriages on every street of every city, the buggy-whip maker flourished. The company’s name was everywhere, and the company’s leaders made a lot of money.
But then, along came a new invention: the automobile a self-propelled contraption that used an internal-combustion engine instead of horses.
With so-called “horseless carriages” beginning to proliferate, the buggy-whip maker soon came to a crossroads, its leaders forced to make a decision, and they couldn’t afford to be wrong.
“They had to either figure out a way to get into the car industry or sit there, hope the car industry failed and continue to make buggy whips,” Pletch says.
A quick glance at your office parking lot on a busy workday should clue you in to the fate of the buggy-whip maker that decided to stand pat and hope the auto industry would fold.
Pletch says stubbornness and stagnation is a recipe for disaster in the world of business. The cautionary tale of the buggy-whip maker that ignored the oncoming tidal wave of the auto industry helps Pletch keep his work force at ThyssenKrupp Elevator, Americas Business Unit one of the largest manufacturers of elevators and escalators in the world focused on the future.
“You have to keep ahead of the game,” he says. “You have to be thinking about the ideas of tomorrow, not of yesterday, and even in some cases be willing to terminate what you are doing because it doesn’t fit in to where the market is going.”
It’s no small task for Pletch to keep his business focused on that common goal. As the president and CEO of ThyssenKrupp Elevator, Americas Business Unit, he oversees a work force of nearly 12,000 spread across North and South America, running a business that is a $2.6 billion segment of ThyssenKrupp Elevator AG, which is based in Germany.
Faced with great numbers and great distances, Pletch says communication is one of the essential components of his job. Without effective communication skills, he says he’d never be able to accomplish the Herculean task of taking employees based in Los Angeles, New York, Canada, Brazil and many places in between and getting them to work toward the future of ThyssenKrupp.
When communicating with many different employees spread over a large area, Pletch says the first and most important lesson to learn is to keep your message simple and direct.
He centers his messages on three or four specific, company-related goals that stay the same regardless of geography, and then conveys those messages in meetings, e-mails and other forms of communication.
“My belief is that you have to deliver the same message every time,” he says. “You can’t deliver 15 different messages. You have to deliver three or four specific things you are looking for as far as goals, as far as the way we want to do business, integrity within the organization, communicate that consistently and make sure (our managers) communicate that to their people. You can’t send people in 15 different directions.”
Regardless of the size of your company, the need to get in the field and engage your employees in person is constant. Pletch says that even though travel time and other commitments can get in the way, it’s up to you to make the time to get down in the trenches with your foot soldiers.
Engaging employees in person is the only way you can really expect them to buy in to what you are telling them.
“To make (communication) effective, you have to get on the ground, get on the front line, visit construction sites, visit manufacturing plants,” he says. “Don’t just walk through. Speak to the people who are actually doing the work, using their hands, using their ability. Find out what their concerns are. Talk and listen to them.”
Every CEO has 24 hours each day and 365 days each year to work with, so Pletch says there is no real secret to blocking off the time to communicate in person except to prioritize. He says the best time to do that is at the start of the year, when your calendar is clean.
“You have to mark in dates, and those dates then become a priority,” Pletch says. “I think about 20 to 25 percent of my time is spent talking to customers and talking to our front-line people. Management meetings, meetings with board members in Germany, a lot of that can be done by videoconferencing, so we’re not flying overseas for meetings that take four or five hours.”
Pletch says communication is more or less the grunt work of the innovation process. If you aren’t hammering away on the importance of innovation and actively soliciting ideas from your employees, an innovative culture will not take root.
However, if you pour enough of yourself into your communication infrastructure and log the air miles, good things can happen, and the culture will begin to cascade downward.
“It’s regular meetings with the management team, having them assure you that they’re having regular meetings with their team, face to face with every part of the organization,” he says. “I personally get out to branches, but with over 200 branches in North and South America, I don’t get to every branch every year. But I have a plan to get to every branch within three years.”
The ground level
Pletch says there are some things his markets have in common: “They have elevators that go up and down. They have escalators that ascend at 30 degrees.”
Beyond that, he assumes no similarities.
Great ideas can’t truly be great unless they address your customers’ needs. Pletch says you can’t come up with one innovative idea and expect it to be a puzzle-piece fit with customers in every market.
That’s why Pletch wants each one of his branch managers to operate like an individual entrepreneur running his or her own business, generating ideas and, above all, listening to what customers are saying from the ground level.
Pletch calls Jack Welch his “business hero,” and tries to emulate a lot of the principles Welch perfected at General Electric.
“The first thing you do is you give your senior managers and branch managers goals,” Pletch says. “They can be 90-day goals, six-month goals or 12-month goals, but you set them, and get out of the way. Let your managers do their jobs and don’t micromanage.”
Not only does Pletch steer his managers away from cookie-cutter management, he tells them that he expects each branch to be managed uniquely to that market.
“A hospital customer is completely different from an office-building customer,” Pletch says. “A condominium board wants to meet with us at night because no one is available during the day. So if you have a lot of condominiums in a given market, it’s much different.
“It’s much different in Florida than it is in Las Vegas or Minneapolis. You have to recognize that, and let the branch managers decide what is best for those customers locally. We have to let that happen because those of us in upper management can’t be dictating from 5,000 feet how to handle a particular customer.”
Pletch also borrows from the Toyota template of business management, which he says values customer service as much as, or more than, the product that is being sold.
“Toyota has grown to become the leader in the automotive marketplace,” Pletch says. “How did they get there? It’s not because their cars are really that much better than the competition. But a lot of it is in how it’s presented to the customer. I know Toyota owners who rave about how, when they take their car in for an oil change, it comes back washed and with the inside vacuumed.”
Pletch says it’s going the extra mile for customer service that secures repeat customers, and that responsibility lies in the hands of the employees who interact with the customers.
“It’s always best to listen to your customers,” he says. “We are continually challenging our people, telling them that whatever you do today, you must find a way to do it cheaper, faster and better tomorrow. That’s the basis of our organization. Those three things Is it cheaper? Is it faster? Is it better? will hopefully give you an advantage over your competitors, if you continue to do it on a daily basis.”
Customer interaction starts at the ground level, but in order for the customers’ ideas to have a lasting impact on your company, there has to be a way for their words to reach the people who blaze your company’s new trails.
Officials at ThyssenKrupp Elevator have regular meetings with customers all over the Western Hemisphere. The company’s sales, research and development, and management wings are involved in meetings with local developers, consultants and architects. The meetings are a forum for ThyssenKrupp’s customers to pool their ideas and concerns, which could be used later in the formation of a new elevator or escalator product.
“Usually, there are 20 to 25 people in those lunch meetings,” Pletch says. “We ask them, ‘What can we do better? What would make your life easier when it comes to elevators and escalators?’ We ask them what the future should bring.
“A lot of creative R&D ideas have come from a customer saying, ‘I want this,’ or, ‘I’ve been getting this for 10 years, and I want something different.’ That’s where we’re getting our ideas, and it’s great feedback.”
Pletch says the meetings are cut at 20 or 25 customer representatives to avoid information overload. You want many different opinions and perspectives from various customers, he says, but you don’t want to have so many voices at one time that some ideas get lost in the shuffle.
“You think of the number, it’s like 20 students in a classroom today, that’s a pretty normal number they can control. That way, everyone’s voice is heard.”
The ideas generated in those meetings are then put through to ThyssenKrupp’s R&D committee, which is a cross-section of Pletch’s work force that reviews and analyzes ideas, then prioritizes them.
Pletch says it’s important to have a system for gathering and considering customers’ ideas because customer needs can change quickly and, in some cases, drastically.
Increased competition in the retail sector has affected a nonretail business like ThyssenKrupp Elevator. The more department stores that open in a given area, the more stores there are competing for the same consumer dollar, which means any store that operates with ThyssenKrupp’s elevators and escalators needs to be assured of reliability, both from the company’s products and its services.
“I’ve had people at high-end department stores who tell me every person who walks through the door after Thanksgiving spends $380,” Pletch says. “If they can’t get up to the second floor where all the jewelry is, they’re going to miss out on a big portion of that $380.
“We need to provide them with an escalator that runs 12 to 15 hours a day, then provide them with the right product and the right maintenance to make sure that happens. In the retail business, time means money, and they have to make sure things are operating properly.”
To Pletch, customer service is a critical part of staying ahead of the curve. You need to produce the products your customers are looking for, but backing up your products with service and attentiveness is a key component in making sure your company doesn’t end up like the buggy-whip maker that was blindsided by the advent of the automobile.
“It’s all about continuous monitoring of your customer base,” Pletch says. “If you don’t, you’re going to end up like some of the large companies today that are falling behind. You have to be in front of your customer. If not, then you’re eventually going to be out of business.”
HOW TO REACH: ThyssenKrupp Elevator, Americas Business Unit, www.thyssenkruppelevator.com
Jack Lynch was walking down a hospital hall one day when a security guard stopped him.
“Where is your ID badge?” the guard asked. “I’m the president,” replied Lynch, who is also the CEO of Main Line Health, a $780 million health care system based in Bryn Mawr.
Lynch sounded like he was asserting that he didn’t need an ID badge, but he actually had an ulterior motive.
After the guard gave him a perplexed look, Lynch let him in on the joke.
“I’m just kidding,” he told the guard. “I can’t tell you how much I appreciate that you would stop me and tell me that I need a badge, even though you know I’m the president. You’ll never see me in this hospital without an ID badge again.”
Lynch had mistakenly left his ID badge in his office, but when the guard questioned him, he used it as an opportunity to reinforce a key part of his vision for Main Line Health: No one person is any more or less important than another. All employees, from doctors and nurses to parking lot attendants and administrators, are all key cogs in the Main Line machine.
By valuing his employees equally, Lynch says he is enabling them to do more for his company’s customers the patients who are treated at Main Line’s facilities, which include four hospitals in the Philadelphia area.
Employees are the working parts that make your company go, but Lynch says that if you want them to be at their most focused and productive, they all have to be on the same page, working toward a common set of goals. That starts with the words that come from the CEO’s office.
Boots on the ground
When Lynch became the CEO of Main Line in August 2005, he was faced with the task of making a good company great. He says it can be a difficult task to take the reins of a company that already appears to have just about everything on the ball and make it even better, but relying on his previous experience as a hospital administrator in the Houston area, that’s what he set out to do.
The first order of business was to focus every employee in the company on providing the best possible customer experience.
Lynch says it doesn’t begin or end with the transaction, or even when a customer enters or leaves the building. A customer’s experience begins when they drive into the parking lot, and it never really ends, because they take their experience with them and pass it on to other people.
With that in mind, Lynch says it was important for his vision to reach every corner of Main Line’s ranks, all the way down to the parking lot attendants and custodial staff. So he went to all of Main Line’s facilities, engaging employees and beginning the initial steps of getting his work force to buy in to the future of the company. And, as important, he listened to what everyone else had to say.
“I spent the first year really listening, boots on the ground, getting out into our community, getting out into our facilities, looking at the (hospital) board’s plans for growth,” he says. “There was really no need to go right or left. It was really grabbing the baton and continuing to move forward, but hopefully, at an accelerated speed and with a bit more clarity.”
To aid in providing clarity, Lynch shortened what had been a lengthy vision statement, an essential step for clearly communicating it to 10,000 systemwide employees.
“We had a full-page vision statement, and if I asked the employees what the vision statement of the company was, nobody could articulate that,” he says.
An effective vision is a vision that management is able to relate to each individual employee, showing each person how he or she fits into the larger picture of the company. That was the starting point for Lynch to create a broad, wide-ranging company vision that applied to everyone at Main Line, medical staff and nonmedical alike.
“If we talk about something broad, like we talk about having a superior patient experience, if a cashier is crabby with someone leaving our parking lot, that is inconsistent with a superior patient experience. So I tried to make the message very clear and give a really clear line of sight as to how the person receiving the message can impact the performance of the organization.”
Making his initial rounds to all of Main Line’s facilities helped plant the seed of a new vision for Lynch, but everything he’s done since has been with an eye toward making the vision take root. That is accomplished through a constant dialogue between employees and management.
Lynch says two-way communication is important for any business that wants to improve. As the CEO, chances are you’re not bashful about communicating with your employees, but he says, your employees need avenues to talk back to you and your senior management.
“Making communication a two-way street is very important, and we encourage people to talk directly to or e-mail their manager, their human resource director, executives within the organization, the hospital president or me,” he says. “My e-mail is not filtered. Any e-mail from an employee gets a personal response.”
If you set an example of being approachable to everyone in the company, they will take notice and follow suit. Lynch says that if you are going to hold employees accountable for following the rules you have set, you need to be willing to let them hold you accountable for the job you are doing in steering the company.
“I try to avoid the feeling that there is a hierarchy of importance. We’re all here to do a job and everyone else is important, and we have a sense that there is an environment where there is an open door throughout the organization.”
Though many business leaders think the term “open-door policy” is cliché, Lynch says the concept is still relevant, and furthermore, it is essential to a culture that encourages open communication.
“It’s a classic example of behavior far outweighing the words,” he says. “When people know I’ll take a phone call from somebody, management begins to understand that if they don’t take a phone call, it will eventually get to me.”
However, when you make yourself open to everyone in the organization, people will come to you with their problems, be it with another employee or an organizational policy. When that occurs, Lynch says you have to make sure that you aren’t passing judgment on a situation without knowing the full story.
If you do, not only might you make an error in judgment, you run the risk of usurping authority from a manager below you.
“Executives have to be very careful that they don’t undo things that were done below them, without adequate information about what they’re doing,” he says. “I don’t draw conclusions immediately when somebody shares something. I’ll often direct someone who comes to me to the appropriate level within the organization.
“But if you do that, I think you begin to develop a reputation that, hey, these people (in management) are approachable. They do care about what you think.”
The power of people
Though, in many cases, the college degrees might be more advanced, Lynch says recruiting employees for a health care company isn’t much different than recruiting for a bank or manufacturing company: You want team players who will take your vision and company values and run with them.
Lynch says that is the most important aspect of any hire he makes, calling anything else a new hire brings to the table “added value.”
“One could conclude that we want people who are all the same, who look alike, act alike, do alike,” he says. “But I don’t care what you look like, if you come in here and don’t embrace our values, I don’t care how good you are, I don’t want you here.”
Lynch says your best recruiters can be your own people. If they believe in what you are doing and believe that they are making a difference in the company, they will be more inclined to recommend others to your company.
Though Internet job boards and the newspaper want ads have their place, he says word of mouth is probably the most powerful recruiting tool a business can have. Your reputation among the public can affect your recruiting positively or negatively.
“When the word gets out that people enjoy working for Main Line Health, we tend to see our applicant pool rise,” he says. “Where we have problems on a particular unit where supervisors aren’t behaving in line with our values, we’ll see turnover go up, and we’ll see people not wanting to apply here.
“There is a constant nurturing of the organization that has to take place, to make sure the environment I described is going on, and when it’s not going on, addressing it and fixing it so that it does.”
As economies become more globalized and the world becomes effectively smaller, Lynch says diversity is a growing issue that many businesses need to address.
If your business has a large, diverse customer population, they will want to see a large, diverse employee population taking care of them. Lynch says it isn’t only about equal opportunity, but it also makes good business sense.
“We’re in a global environment right now where we’re caring for people from more walks of life than we traditionally might have in the past. If we’re not committed to diversity, I’m not sure we’ll have enough people to care for the patients we’re expected to care for.”
Occasionally, Lynch has been forced to take a stand with regard to diversity. Once in awhile, he says an elderly patient who grew up in a different era of racial and ethnic tolerance might object to having his or her care provided by a doctor or nurse of a different race or ethnicity.
As he did with the security guard, Lynch takes it as an opportunity to reinforce his vision.
“If we believe a caregiver is appropriately trained and providing the quality that we expect, we’re not going to change that caregiver out,” he says. “It shows a lack of respect for the caregiver.
“That says a lot about you valuing your employees. The symbol it shows your employees when you are reinforcing that is dramatic. If I lose a patient to another hospital, I lose a patient. I won’t lose an employee because I devalued them by taking them off that assignment.”
Lynch says Main Line has placed a policy on the books that a caregiver will not be removed from an assignment based solely on the request of a patient. That policy, he says, has been one of the biggest steps he has taken in getting employees to buy in to his vision and values.
“It comes back to the culture,” he says. “It’s not something every employee believes you are willing to do. When I got here, I found that historically, the organization believed the right thing to do was to satisfy the patient. But when we started talking to our employees, we realized how demeaning that could be to an employee that was changed out.
“It’s one of those things that takes just hours to get through the organization, when senior management comes down with a policy that demonstrates that you really value your employees.”
HOW TO REACH: Main Line Health, www.mainlinehealth.org
There are many important elements that go into building an effective business culture. The key ingredients vary from company to company and industry to industry, but regardless of what your company produces or how it does business, Gerry Rubin says there is one thing that will never go into a great company culture.
“You can’t send an e-mail or write a memo and suggest [the culture] to your associates,” he says. “To suggest in a message how they should behave, that won’t work.”
In short, Rubin says, if you don’t actively engage your employees in person, your culture will dry up.
Employees need more than a written how-to manual on company values, says Rubin, co-founder, president and CEO of Rubin Postaer and Associates the largest independent West Coast advertising agency, with clients such as Honda, and more than $1 billion in annual billings.
Employees need to see the culture in action, which means they need to see you set the example.
Rubin, who founded RPA with Larry Postaer in 1986, has learned more than a thing or two about building a company culture over the years. With more than 40 years of experience as an executive in the advertising business, he says he has learned how motivated, engaged employees are employees who feel enabled to think outside the box, come up with new ideas and pursue them, and ultimately, help the company grow.
“You need to maintain a commitment that your culture is one where independence thrives,” Rubin says. “You put in place all those disciplines and all those resources that a client needs, and you put them in-house, as opposed to individual smokestacks located in different ZIP codes that are never, in fact, integrated under one roof.”
Surrogates for the culture
Rubin says the key to building a long-standing company culture isn’t to build a work force of people who think alike and act alike. While you probably want all of your employees to embrace the same set of values, Rubin says you need to allow them to do it as individuals.
At RPA, Rubin refers to it as becoming a “surrogate” for the company culture. He wants employees to do more than just follow the culture. He wants them to believe in the culture to the point that it, in a way, takes up residence inside each person.
In order to do that, he says you must allow your employees to consider and hopefully accept your company on their terms.
When new employees are hired at RPA, Rubin brings them into his office, unannounced, on the morning of the day they start. They have never met him, and he doesn’t really know who they are. Rubin purposefully makes that the first time he meets new hires because he wants to know what drew the new hires to RPA.
“I bring them into my office, I have my Andy Warhol ‘Hall of Shame’ photos up here, and we have an icebreaker,” he says. “To start off, I ask one question of all of them: ‘How did we come to you, and how did you come to us?’”
Rubin says he wants to get to the heart of why new associates applied at RPA in the first place. The answers tell him what is motivating them to work.
“The answer I’d like to hear them say, and I don’t always hear it, is that they’ve studied our Web site and this is where they want to work. As opposed to, ‘A friend of mine works here and told me there was a job opening.’ Sometimes I regret hiring a person like that. I want to hear that they’ve studied us. When I hear that, it resonates with me
“Then I ask them, ‘What do you like about what you’ve learned?’ Then you really get to the depth of their understanding. ‘Boy, I really liked that Honda ad I saw.’ Now I truly know I have someone who wants to be a part of our culture.”
He distills the initial meeting with newcomers down to one word: passion. If a new employee has taken the time to learn about your company and has become excited by what he or she has learned, chances are you are hiring a motivated, interested employee.
“They want to learn, they want to make discoveries, and they take their own initiative,” he says. “Hence, they’re surrogates, not clones.”
But in order to get that level of involvement and commitment, both you and your employees have to be willing to work at it. In other words, it won’t happen overnight.
Each employee will come to his or her own conclusion about the environment and culture of your company over time. In Rubin’s estimation, it could take years.
“I’d like to think there is a point in time on the calendar where I can say, ‘They’ve captured it,’” he says. “But if you’re looking for a numerical response, I’d say years. You can’t expect for the food to get eaten in a year’s time. You have to dribble it out, little by little.”
No matter how passionately you drive your culture, or how eager the new hires seem at first, Rubin says there are simply going to be a certain percentage that aren’t going to find a home in your company, particularly among young workers. Don’t look upon it as a failure either on your part or theirs. Rather, he says, remember the uncertainty and self-doubt of your own early working days.
“There is a group of what I call searchers at our place, at any place,” he says. “It’s the 25- to 35-year-olds who [are] not certain that this is the industry where they want to work, and if it is, that this is the place to do it. So they transition, which is why it takes them awhile to capture the culture. And I encourage them to leave. Why? Because they’re marking time. They’re standing in place, which isn’t helping them or us. If it comes to that point, they should seek other options.”
Pushing the right buttons
Getting your employees to accept and internalize your culture is one thing. Keeping them in that frame of mind is something entirely different.
Rubin says a company’s culture is not a static thing. It fluctuates based on a number of variables, including internal communication, the financial health of the company and how workers perceive management.
With that in mind, Rubin says you can never take for granted that just because you haven’t made any changes to the culture that it is necessarily staying the same in the eyes of your employees. The work environment of a company is something that needs constant maintenance, and in order to do that, you need to find the right buttons to push among your employees to keep them driving toward the same goals.
Some employees are driven by a job well done. Some are driven by recognition from their superiors. All have something you can latch onto as a manager.
“They’re all different,” Rubin says. “It’s like a manager with 24 baseball players. One he pats on the ass, another he kisses on the cheek. And he can only be effective when he manages the team over time.”
Rubin says he spends most of his days acknowledging and recognizing people because it is so important to the success of his company. He walks the halls, attends meetings and gets to know many of his employees personally. He believes that developing a personal knowledge of your people is the only way to find out what truly motivates them.
“Recently, one of our associates celebrated 20 years here,” he says. “This guy is a diehard UCLA basketball fan, and you can’t get tickets for UCLA around here. But we made sure he had the best two seats we could find, plus a bunch of UCLA stuff, pennants, pins and whatnot. What it says is that we spent the time to get to know that person.”
As an advertising agency, you might expect RPA to have a knack for drawing attention to its associates. RPA recently took some of its creative muscle and flexed it for its own workers in creating an awards program called the League of Extraordinary Associates.
RPA designers concocted a group of comic-book-style super-heroes, each representing an award given to an associate quarterly.
“We have the ‘Bionic Wonder Award,’ the ‘Chameleon Award,’ the ‘Colossus Award,’ the ‘Guardian Award,’ the ‘Secret Agent Award,’” he says. “These are all cartoon characters with a description on a card of what the award means and why that person qualifies. We have a ceremony in our courtyard for the whole agency, and the awards are presented. I’m the presenter, I have my own orange cape with RPA on the back, and we go over the top in making these awards like the Academy Awards.”
He says it’s exciting, kind of humorous and a whole lot of fun. But the underlying message is a serious one: RPA’s leaders appreciate the contributions of their employees and value the company’s culture.
“That person [who receives the award] might have only been here six months, but they’ve done something outstanding.” he says. “Think of the tingles they get. They are really taken by this, and it costs us nothing. We created it in-house. These are the small but maybe not-so-small things in terms of how we reward people, but also recognize our culture in the process.”
Clients and customers
If you are asking your employees to take your culture to heart, they must believe you are also taking your culture to heart. That, Rubin says, means that the words and actions that cascade down from upper management must be consistent.
Employees can develop many conclusions about how the company is run by the type of customers and clients you bring in.
Clients who don’t match well with your organizational goals and values will produce projects that don’t allow your team members to do their best work, which in turn affects how they view management and the culture.
“One of the things that will compromise our culture is not just bringing in the wrong people, but bringing in the wrong clients,” he says. “Bad clients are generally followed by bad work. Sometimes that work isn’t due necessarily to any indiscretion on our part, but it’s due to the fact that we have a culture clash.”
Rubin says there is a one word answer, simple in theory but sometimes difficult in practice: Discipline.
As the head of your company, you need to be able to create the discipline to pursue the opportunities that best match your company, but might not necessarily be the most financially lucrative.
Rubin says discipline is rooted in research. The first thing he looks at is the long-term history of a potential client.
“A client that is already established or mature, you just look at the past work,” he says. “That’s the easiest way to make an assessment of what you think your opportunities will be with that client. You want to look for continuity and longevity.”
Rubin says your company and your clients need to have a realistic idea of what one can do for the other. If there are inflated expectations or unrealistic promises from one side or the other, it can sabotage the relationship before it even starts, which in turn can deliver a black mark to your company among your employees.
“We want our associates to go home, share with their loved ones, their friends, their neighbors, the dog if the dog will listen that they’re proud of the work they did that day,” he says. “That is a tall order. It’s very daunting and very challenging.
“But I am responsible for creating an environment for good people to do good work. You do that when you have good clients. It really goes hand-in-glove.”
HOW TO REACH: Rubin Postaer and Associates, www.rpa.com
As the CEO of CITGO Petroleum Corp., one of the world’s largest oil companies, his job is affected by everything from market fluctuations to geopolitical strife, from technological advancements to natural disasters.
Through it all, Rodríguez is charged with keeping a company of more than 4,000 employees focused on a set of common goals that are small when compared to the global variables that influence the oil industry.
While the figurative winds of conflict and the literal winds of tropical storms swirl around the fringes of the oil industry, always ready to deal a damaging blow, Rodríguez keeps his employees centered on the basic business concepts of customer service, innovation and community involvement by making sure they carry out his vision, valuing what he values: The ability to take an enormous corporate entity and make its strength the customer interface — in CITGO’s case, taking an oil company with approximately $32 billion in annual sales and turning it into its customers’ neighborhood pit stop, the place where they fill their gas tanks and pick up a snack for the road.
To make that happen, Rodríguez says it all starts with your employees. You must be able to relate to the communities where your customers live, and to do that, you must have a work force that is an active part of the communities it serves.
Your vision and expectations have to be communicated frequently through both words and actions, and you have to listen to feedback on how you can do things better.
Backing up your words
One of the most important things Rodríguez says a business leader can do is back his or her words with actions. He says words are hollow if employees and customers think management won’t follow them with actions.
He says it’s about creating the perception among those you serve that you are as good as your word, so that people will be more apt to believe you when you say something. And the only way you gain that level of trust is by having actions that repeatedly fall in line
with what you preach.
In 2005, Rodríguez’s community-centered platform was put to the test when the U.S. Gulf Coast — where many CITGO employees reside — was struck by hurricanes Katrina and Rita within weeks of each other.
“I went to New Orleans,” he says. “I saw the people living in and around the flood, water 1 or 2 feet or higher. They asked me why did I go there as president and CEO. I went there because CITGO has a refinery in Lake Charles (Louisiana) with a 400,000-barrel
capacity, and that was obviously important. But even more important to me was the people we had living in the area.”
Rodríguez says that as your company grows and its profile increases, your ability to appeal to employees, customers and communities on a personal level can become closely scrutinized. In the wake of the two major hurricanes the summer of 2005, Rodríguez says the first thing he acknowledged was that he not only had 4,000 direct employees of CITGO there, he had an additional 100,000 people who formed the majority of the company network through independently owned service stations. Though they weren’t all affected by Katrina and Rita, he says it helped put his level of responsibility in perspective.
With that in mind, Rodríguez helped establish a $5 million medical assistance program in Lake Charles in the immediate aftermath of the 2005 hurricanes.
Through CITGO’s humanitarian initiatives immediately following Rita and Katrina, Rodríguez says he wanted to reinforce throughout his company the concept of relating to people face-to-face and doing it through actions.
“What you say has to be what you practice,” he says. “This is a very important thing. People read the newspapers, they go to the Internet, they are into various forms of communication. There are many avenues you need to cover to clarify what the mission of your company is.”
Rodríguez says that if you show a commitment to those around you and do it consistently, you will eventually be rewarded with their trust. But it doesn’t happen overnight.
“For me, most importantly, I have to take care of these issues, to let them know what the intention is for the company,” he says. “For me, I try to focus on the core message and vision and try not to get distracted by all the background noise. I try to show the people in the company a commitment so they will show confidence in me and what kind of company we have.”
If a company leader isn’t clear and concise with his or her messages to employees, they will start to fill in the blanks themselves, which is how rumors start. Rodríguez says rumors can become like weeds that choke off productivity and can do long-lasting damage to employees’ — and, in turn, customers’ — confidence in a company if they are left unchecked.
He says people are generally inquisitive and want to know what is going on within a company, and to the best of your ability, you should strive to completely and truthfully answer the questions they have.
“I think any person wants things to be set so they know exactly what is meant when the CEO says something,” Rodríguez says. “You put people in place who ask more and more questions, and first of all, we need to communicate and share our ideas every day.”
In much the same way that Rodríguez wants to appeal to customers on their level, he also wants to appeal to employees where they work, be it at the gas station, the office or the refinery.
On the refinery level, CITGO holds daily operational meetings to brief employees on, among other things, safety and environmental protection policies. Monthly, the company’s leaders meet face-to-face with the managers of the marketing department to discuss ways to adjust marketing campaigns and communication strategies.
Rodríguez says the meetings are based on two-way dialogue, with CITGO’s leaders doing as much listening as speaking.
“We ask our employees what they need, what are they feeling about what is going on,” he says. “This is crucial. This gives us the framework for communicating every day around our vision.”
If an employee comes up with an idea in one of those meetings, Rodríguez says he and his senior leadership not only listen to it but quickly act on it.
Acting quickly on employees’ suggestions or concerns not only gives them a sense that their words are worth something, it also shows the entire organization that you are willing to effect change
when the situation calls for it.
“If somebody comes up with an idea, we act very quickly and understand why they want to do something,” he says. “We correspond with a plan in order to better find something that will benefit the organization.”
The analysis and revision of a new process or product involve many people at CITGO. Ideas are passed back and forth through groups, with each group adding its own tweak or addition until a consensus is reached.
“We might sometimes have a discussion with more than 100 people present when someone comes up with a new idea,” he says. “We have people discuss it at one table, and others discuss it at another table, and through the discussions, we form a new plan. That’s how we build a plan with employee participation from different viewpoints.”
Finding the right people
Forming a work force that follows your vision and embraces your values starts with communication from the top. But you also need to have the raw materials with which to work, and that means finding people who fit the corporate culture you are growing.
To drive your vision downward and outward throughout the company, Rodríguez says you need employees who are receptive to what you have to say — and that begins with their attitude.
He says he wants employees who feel motivated to make a difference both in the company and in the community, and a key component in motivating employees is enabling them to do their best.
At CITGO, Rodríguez enables management-level employees by maximizing their versatility, giving them training in multiple disciplines. He says he’s not asking a chemical engineer to become an operations guru, but he wants everyone on the same page when it comes to projects that require teamwork.
“It is important for employees to have familiarity with different processes,” he says. “For example, if you have an electrical project in a refinery, you might need to involve an electrical engineer and a mechanical engineer to work together on something.
“If the situation involves something in the community, you might need to involve someone who specializes in community relations so that you can know what is happening in the community, in case it impacts the community.”
Though an oil company can deal with economic and environmental issues that far outpace what companies in other industries might see, Rodríguez says the need for a work force that is in tune with customers and the community is nearly universal.
“Our Houston-Galveston refinery was operating when Houston had maybe a million people,” he says. “Now, Houston has more than 2.5 million people. So the people who run the refinery have to consider new equipment, new protection for the community, what
is happening with emissions, what is happening with the electrical set-up inside, what is happening with the law because now you have many more laws — environmental laws, employee laws, community laws.
“So you need to have the ability to work by team and involve different disciplines in one decision and make a plan as it pertains to the law, to engineering, to the community, to supplies. It can become very complex. You need to plan, and have people who can plan for risk on different fronts.”
HOW TO REACH: CITGO Petroleum Corp., www.citgo.com
Browne, who had served on the company’s board for more than 18 years, was becoming the captain of a corporate vessel that was experiencing its worst year in a history that spanned almost a century.
Reserve charges had wiped out the property and casualty insurance company’s profits, it was behind the curve with technology, and the lines of communication were withering among the company’s employees and independent agents, resulting in a teamwork breakdown.
Harleysville, once a sleek ocean liner in the large fleet of Philadelphia-based insurance companies, appeared to be turning into a leaky tugboat, gathering rust.
But Browne saw something else. He saw a company that, at its core, was still strong, and he used that message as one of the key components in engineering a turnaround.
“I knew what the strengths of the company are, and I wanted to preserve those,” Browne says. “That was really the message we gave to employees early on. Yeah, there are a lot of things that need to be fixed, but there are also a lot of things that need to be preserved.”
What ensued was a multiyear process devoted to team-building, improving the technology infrastructure and refocusing the company on the basics of good communication and customer service.
“It was about changing the momentum of our business,” he says. “It was about getting people to embrace change. It’s like turning a ship. If you’re trying to change the direction of a company, you can’t do it overnight. It takes you awhile to get things going and change the momentum.
“And you do that by building a team. No one person can accomplish that much by himself or herself. You have to build a team.”
When refocusing the company on teamwork, Browne said he had to answer one question before all others: Were the right people performing the right jobs?
It was one of the most time-consuming answers to find, he says, but it’s an essential answer for any company.
“I tried to be very careful in assessing the senior leadership in terms of whether I thought the people in the jobs when I got here were the right people,” he says. “I certainly didn’t make any snap decisions. I took quite awhile before I made my decisions.”
Through a series of one-on-one conversations, Browne began to develop a mental picture of each member of his senior leadership: their skill sets, their leadership qualities, their teamwork capabilities.
“It was a lot of discussion with each individual,” Browns says. “How they saw their job and what they thought they could accomplish, their attitude and also, quite frankly, what kind of team did each of the people reporting to me have?”
Browne says how a manager oversees his or her own team is usually a clear indicator of how that person will perform as a member of the senior leadership team.
“Because one person can only do so much, if you’re not pushing to have a stronger team for yourself, you’re not going to be that effective,” he says. “That’s always been one of the early signals for me as to whether I think someone is the right person for a job. Do they have the right team around them?”
He says getting a read on a person’s potential is not an exact science. Much of it is gained through repeated interaction with your team over a long period of time. As you get to know your senior leaders better, you’ll see what they value in a team and if their goals and objectives mesh with those of the company.
“One of the ways I look at somebody is I think of our (company) goal, which is to be the best superregional property and casualty insurance company,” Browne says. “When I look at people, one of the questions I ask is if I think this person can help us to be the best. Are they not only good at what they do, but can they help us to be the best? If I think the answer is, ‘No,’ that tells me something.”
Finding the right people and putting them in the right jobs is critical to a company’s ability to adapt in changing market conditions.
“It’s hard sometimes to keep pushing yourself about wanting to have the best people, because a lot of time you’ll have somebody working for you who you really like, but they might not be the best person for the job,” he says. “You need to work with them to get them to improve, or, if they can’t, you need to find somebody else.
“If you resist change, it’s going to sweep over you like a wave. But if you have the right people, you’ll be able to embrace change.”
Getting with the program
Harleysville has experienced personnel cutbacks during Browne’s tenure. From about 2,400 employees in 2003, the company now has fewer than 2,000. But it’s still a sizeable work force, and getting every person on the same page is a huge challenge.
To help steer the company back toward calmer waters, Browne says it was important to get every corner of the business thinking and operating the same way. He initiated a strategic planning effort during his first months at the top and asked every level of the company to get involved in creating Harleysville’s refined strategic vision.
“To get 2,000 people on the same page, it doesn’t happen overnight,” he says. “Early on in the first year of the recovery, we basically embarked on a strategic planning effort. We didn’t bring in outside consultants or experts. We just got about 100 of our top performers from every level of the company senior people, mid-level people, lower-level people and that cross-section of the company became our strategic planning committee.”
The committee scanned the company in detail from top to bottom, examining processes, policies and strategies. Browne says it revalidated parts of the company’s strategy and identified areas in need of change.
Getting every area of the company involved in the revision of the strategic plan was instrumental in achieving buy-in with employees. He says your team members will be much more receptive to an organizational shift if they had a hand in forging your company’s new path.
“A cross-section of the company helped get people’s buy-in that this is where we need to go,” he says. “If you get everybody working together, you’re going to be much more successful than if you have just a few people from the top telling everyone what to do.”
He says the alternative, bringing in consultants from the outside, wasn’t as appealing from an employee-interaction standpoint.
“I thought our employees would better understand the company,” Browne says. “A lot of times, you’ll have a consultant come in and give you advice that’s really only partially pertinent to the company. They might understand the industry, but they really don’t understand the DNA of your company.”
However, if you are going to use internal groups to refocus your company, you have to be willing to be brutally honest, lay everything your company does on the table and, Browne says, work under the assumption that there are no sacred cows among your company’s policies and practices, no matter how long you’ve done something a certain way.
“We didn’t need a consultant, as long as we were willing to be very open and honest with ourselves about our problems,” Browne says. “Are we doing things right? Do we need to change? What do we need to change? It’s important to stay true to who you are.”
When a company is undergoing a major strategic shift, it will cause tremors to rumble throughout the company work force.
Browne says many employees at Harleysville were initially concerned about the future of the company and whether it would be sold.
Browne says he had to eliminate the speculation before it turned into a rumor mill with a life of its own, and the only way it could be done is with open, clear and consistent communication about his intentions.
Many of the communication methods Browne introduced in 2003 and 2004 are methods he still uses today, including a recorded companywide broadcast every couple of weeks.
“When I travel around, employees tell me they like the recordings,” he says. “I don’t pull punches; I try to tell them what I’m thinking. Honesty and openness is very important. You can’t try to kid people.”
Browne says all successful companies have at least one thing in common: They all keep their employees in the information loop on a daily basis. He says that company leaders who paint a murky picture of their intentions and future plans are far more likely to have employees who don’t trust them.
“The great companies, the well-run companies, are places where everybody feels engaged,” he says. “I’m not suggesting that we’ve gotten where we need to be in regard to that, but we’ve made a lot of progress.”
Browne emphasizes e-mail as a way for him and his team members to stay in touch with each other.
“I frequently tell employees I like to get e-mails from them,” he says. “If they have a suggestion or idea or criticism, I’d like them to e-mail me. I get e-mails every day from employees.”
He says e-mail communication is a simple, effective way to engage employees and give them a feeling that their input matters to upper management.
“If people feel like you want to hear their suggestions and criticisms, that it will turn into change in the company, people are encouraged to do more of that,” he says.
An open communication policy has to be more than something you bring out when the situation calls for it. Browne says it should be based on a guiding principle of honesty. In many cases, clamming up is every bit as bad as lying when it comes to the morale of your work force.
Today, morale is improved at Harleysville, and so are the numbers. Three years after posting a net loss of $47.6 million, Harleysville garnered a net income of just more than $111 million in 2006. Its total revenue was slightly less than $1 billion last year, compared to $925 million in 2003, the year Browne took over.
“(Honesty) is kind of a core value of mine,” Browne says. “The success of a company is based on your people being good and having good teamwork, and I think honesty is very conducive to having a teamwork ethic.
“To me, in the long term, I don’t see how you can have success in a company if you don’t treat people the right way.”
HOW TO REACH: Harleysville Group Inc., www.harleysvillegroup.com
Efficiency was paramount. Mistakes were the enemy. It was all about meeting customer needs in the shortest time with minimal snags. But a funny thing happened on the way to maximum efficiency, says Schneider, president and CEO of the $500 million developer and manufacturer of robotic components.
“I found (that way of thinking) was very detrimental to innovation,” he says. “Doing it right the first time means you had better not try anything too out of the ordinary, because if you want to do it right the first time, it means you’d better not make a mistake.”
He says mistakes are inherent to the innovation process. In fact, some of the best innovations originate with mistakes.
Schneider says he has strived to create a culture where mistakes are not swept under the rug. Instead, they are set on the table and examined to find out what exactly went wrong. He says he wants his employees to be problem-solvers, not perfect performers.
“What I’ve found is that it’s very important to have a culture that, if someone makes a mistake, you don’t come down hard, reprimand them or punish them.,” he says. “What you do is say, ‘OK, what is the root cause of that problem, and what are the ways and processes we can put in place so that problem doesn’t reoccur?’”
Schneider says at FANUC Robotics, the object is to always learn and to use what you’ve learned to come up with new solutions for customers.
He says opportunities to learn are everywhere, in just about any business. You just have to know where to look.
Defining the direction
If you think a mistake-tolerant culture means employees sling their ideas against the wall the way Jackson Pollock slung paint at a canvas, Schneider says there is more to it than that.
To learn from mistakes, he says you must first define what a mistake is, which means you must clearly define your company’s direction.
“One of the first things is that everyone needs to know where you are headed as a company and what your targets and key objectives are,” Schneider says. “Innovation is only helpful to a company if it’s in line with what you are trying to accomplish.” Schneider takes every opportunity he can to interact face to face with his approximately 1,200 employees, reinforcing the company vision and objectives.
A company being pulled in different directions is an unfocused and ineffective company, but he says he is consistently blown away by what can happen when everybody understands what the company is all about.
“A graphic I use at a lot of my presentations shows two people in a canoe,” he says. “One is rowing in one direction, and the other is sitting at the opposite end rowing in the other direction, and the caption says, ‘Boy, the current sure is strong.’
“What I find is that if you get everybody rowing in the same direction, it’s amazing what you can accomplish. But you have to make sure you really communicate the challenge you’re working on and your overall direction.”
Schneider says the job of senior management is not to micromanage the innovation process but to give employees the resources they need to innovate, to ask questions such as, “What do you need?” and “What barriers do we need to take down for you?”
Schneider fosters interaction between departments and levels of the company with cross-functional meetings. A number of departments and levels of management are represented at each meeting; the object is to get people from different parts of the company discussing problems and solutions within the innovation process.
Before he began having three to four cross-functional staff meetings per month, he said the story was quite different.
“We’d be sitting, talking about a lot of critical issues that affect the company, and I’d realize the staff really isn’t close to a lot of problems and issues within the company,” Schneider says. “Now, we don’t have the entire staff there, but we have people from all areas of the company, from the manufacturing floor, from finance, and now when we talk, we’re getting their perspectives.”
He says bringing different perspectives to the table is critical when discussing a new idea. Often, a manager in one area of the company will have a very narrow perspective on an idea as it pertains to his or her department. Exposing that person to another mindset will help him or her take a better overall view of the idea and can make the end solution that much stronger.
“You think you really understand in detail what is going on in the company, but a lot of times that’s just not the case,” he says. “But when you get that cross-functional team, from myself down to all different levels of the company, you start talking about an issue, you start to get some great ideas and suggestions, and you can learn a lot.”
Dealing with mistakes
FANUC Robotics has replaced “Do it right the first time” with a new unofficial motto: “If you make a mistake, let’s not repeat it.” Schneider says a company that values innovation needs employees who are passionate about being creative and aggressively pursue their ideas. Many times, that flies in the face of a company culture that values streamlined processes and efficiency.
But he says that if you don’t give employees room to learn by doing, and the residual mistakes that come with it, you’re going to choke much of your company’s ability to grow.
“One story I tell often to employees is from a company I worked for several years back,” Schneider says. “Management would come out and announce a decision, and the only thing we could think of that must have been behind the decision was them saying,
‘What could we announce that will upset the most employees?’”
If a mistake occurred, he says that chances are it was due to a communication breakdown at some point either someone didn’t have the right information, or someone didn’t have enough information.
“If I make a decision and you look at it and say, ‘That was a terrible decision,’ one of two things happened,” he says. “First, it was a bad decision, and I just didn’t understand some of the things that were going on in the company. Second, it was a good decision, but we haven’t explained to you the background on why we made the decision.”
In addition to using company meetings and presentations as an opportunity to reinforce the company objectives, Schneider also uses interaction opportunities as a time to solicit feedback from employees. Schneider says employee feedback is one of the best ways to take something that went wrong and begin to form it into something that helps the company. The employees on the innovation and customer front lines are the people who know best what is working and not working.
“Every year, we have an employee survey,” Schneider says. “We ask a long series of questions. We want you to tell us what you like, what you don’t like, what we need to work on. I love those surveys because the best way to drive innovation and improvement is to find out what’s broken.”
Schneider says mistakes and shortcomings are a fertile ground for innovation.
“I sometimes joke with (employees), ‘If we don’t have any problems, we’re in trouble,’” he says. “If you look at where innovation is coming from, time and time again, it’s coming from problems. Sometimes they’re major problems, but the bigger the problem, the bigger the innovation.”
Schneider says he has never had a customer visit that he didn’t feel was worth his time.
“Virtually every time I go to visit a customer, they say something during that visit which is a good idea,” he says.
If every innovation should address a customer need, he says it should follow that customers should be your best source for innovative ideas. If a customer has a problem with your product or service, it might be difficult to face the music and address its concerns. But that problem might be the start of something new for your company, a new problem that requires a new solution that will benefit both the customer and you in the long run.
But Schneider says you have to reach out to customers and, in essence, harvest their problems for new solutions.
“Sometimes visiting a customer is like going to the dentist,” he says. “The dentist is drilling a cavity, then he fills it. Sometimes going to see a customer can be pretty painful like that. If I get called out there, it’s often to talk about a serious problem.
“But you go to the dentist to fix the problem, to fill the cavity. You don’t stop visiting the dentist because it’s painful, and you don’t stop visiting customers because it’s painful.”
Bringing customers’ suggestions back to your organization’s innovators is one of the most valuable services you can perform for your company.
“Any key innovation usually comes from a customer coming to us with a problem,” Schneider says.
Simply attempting to sell your ready-made solutions to customers defeats the purpose of innovation, he says. You should always keep yourself abreast of what is going on with your customers, how they view your company and how satisfied they are with your products.
Schneider relies heavily on customer satisfaction surveys as a gauge for what FANUC Robotics needs to do better. That information, combined with face-to-face interaction with customers, paves the way for the company’s innovation process.
“What makes customer interaction important is that a lot of times as a company, you want to go out and sell your solution to a customer,” he says. “Here’s our product, here’s our solution. But if you take that approach, you really aren’t going to learn a lot or generate a lot of innovation.”
The flip side, Schneider says, is instead of matching a product to a customer’s need, match a customer’s need with your company’s most creative thinkers. If you find out what your customers are really struggling with, you can better solve their problem and further your company’s reputation as innovators.
“If you go out to a customer and say, ‘What are your challenges? What are you struggling with?’ then you bring those challenges back to your product development team, your application and systems group and say, ‘What is a way we can solve this customer’s problem?’” he says. “That’s where I find really key innovation comes from.
“What I tell our customers is that you usually don’t see innovations coming from a product development engineer sitting in his cube thinking about what would be a great innovation. It usually comes from a customer’s problem that our engineers work on. Then they come up with a creative solution.”
HOW TO REACH: FANUC Robotics America Inc., www.fanucrobotics.com
Mike Cox calls it the “cowboy mentality”: Salespeople who view accounts as their own and not the company’s, and don’t want anybody treading on their territory; employees who, in many ways, are more loyal to their clients than to the company that signs their paychecks.
That’s the corporate atmosphere Cox stepped into upon becoming president and CEO of Bloomfield Hills-based Logicalis Inc. in 2003. An “every-man-for-himself” mentality was evident among the company’s sales force. It might have been good for the individual accounts of each sales representative, but Cox knew it would eventually kill the company, which was bleeding money and required layoffs shortly after he took over.
Cox says a companywide culture shift was needed. He had to find a way to refocus a work force of 500 on a single mission statement and get his sales force to buy in to the idea that teamwork was going to make both them and the company financially healthier in the long run. “My goal was to make this a place where people could feel safe and build a career at, and in turn, release a little of their control over the customer,” he says.
What ensued was less about a grand corporate vision and more about shaking hands, logging air miles and using the art of persuasion.
Communicating the culture
Soon after the layoffs, Cox and his management team conducted a tour of all of Logicalis’ major offices around the country. The format was different from what the company leaders had used before. It was centered more on two-way interaction than management speaking and employees listening.
With the $490 million IT services provider in the throes of cutbacks and with a culture shift imminent, Cox says it was important for employees to have a platform on which they could voice their questions and concerns and, at the same time, a means for company leaders to gain employee input on rebuilding the culture.
The tour was such a hit that Cox followed it up with a second 11-city tour and quarterly companywide audio conferences.
“Our conferences have evolved from too much of us talking and very little time for question-and-answer to us just answering questions that have been submitted a month prior,” he says. The employees “are not afraid to submit some very good questions, then we have confidential, interactive follow-up during the audio conferences.”
Cox says getting employees to buy in to a more company-centric culture has been a three-step process: communication, dialogue and more communication.“Communication has to be bidirectional, and that would apply to whatever size company you are leading,” he says. “It was that way at (Hewlett-Packard) when I had 7,000 employees, it was that way at Logicalis when we had 180 employees and it’s that way now with 500 employees. You have to listen and act on the good ideas you hear.”
Regardless of the message, Cox says communication from top management needs to be forthright, honest, frequent and formalized. Cox relies on some of the more traditional and buttoned-down forms of communication like speeches and audio conferences, but he says formal communication and casual interaction aren’t mutually exclusive.
“Every time we go to a company office, we are supposed to offer in advance to buy a pizza lunch or do a coffee talk,” Cox says. “Our employees seem to enjoy that, plus it gives you a chance to see them all and talk with them. Those things are the most important in communicating.”
Employees won’t respond if a message is communicated several times and then left among the weeds while management goes off and does something else. As he proceeded to sell his staff on his revamped culture, Cox said he learned quickly that in addition to honesty and formalized methods, communication must also be consistent with your actions.“People are smart, so they see right through the talking head or people telling them what they want to hear,” he says.
Cox started his cultural shift by narrowly focusing the entire company down to one mission statement and hammering it home to his team.“We understand exactly what the customer wants, we sell them exactly what they need, then we deliver exactly what they bought,” he says. “That’s our recipe for success with customers, and that really says a lot to our employees that we want them to be one Logicalis to our customers.”
Cox says having a powerful mission statement is an important ingredient in getting your entire work force on the same page. It has to explain in a few short, effective sentences what your company is all about and what everyone in the company should be working toward. “I really like our mission statement,” he says. “It’s powerful. I think employees can relate to it.”
Getting sales back in line
One aspect of Cox’s new culture caused more hand-wringing among the sales staff than all others: He wanted his salespeople to start giving independent advice to customers.
Cox says many Logicalis sales staffers viewed themselves as the company’s authority on a given vendor. If a customer needed help with Hewlett-Packard, it went to Salesperson A, if a customer needed help with IBM, it went to Salesperson B.
Cox wanted the sales staff to begin giving unbiased advice. If an IBM-connected salesperson could better solve a customer’s problem with HP products, or vice versa, Cox wanted that salesperson to be able and willing to do so.
Cox says independent salespeople can develop the cowboy mentality he abhors. They want to ride alone, protect their own interests and, above all, sell the products they want to sell.“The whole idea of giving independent advice probably caused our employees the most discomfort,” Cox says. “It’s hard for a salesperson that only sold IBM, who has relationships with IBM reps and managers, to even think about offering a product competitive with IBM, but that’s the direction we were headed.”
Cox says if you are asking employees to step out of their comfort zone, don’t expect it to be an easy transition. Expect some people to need a lot of coaxing and anticipate that some may outright refuse to make the leap.“We have many people that do (offer independent advice) now for our company,” he says. “But others haven’t been able to leap that chasm and offer our whole portfolio for fear of alienating their vendor friend.”
Cox says it is a fine line to walk. While you want your sales force to be willing and able to offer your entire product line, you also have to realize that the salespeople who have longstanding relationships with certain vendors bring you an insider’s knowledge of products that other companies might not have.
Cox says he doesn’t want to quash the vendor relationships that some salespeople have spent years building; he just wants them to broaden their perspectives and offer other products to customers.
The most effective way to get salespeople to relinquish some control over their vendors is to add value to their sales efforts. He says it’s a matter of taking the strong motivation for personal success that drives your sales staff to be territorial in the first place and use it to motivate them in the company’s direction.
Cox says to start by appealing to their most basic motivation by showing them how stepping back from their prized vendor will make them, and the company, more money.“Initially, it’s about being able to offer them some value that will increase their business and make them more money, and gets you and other members of the company into their accounts,” he says. “Then once they see that you can help them, you and other members of the company will be invited back in.”
Cox also hired a sales management team charged with overseeing the performance of the sales staff.
“Over time, you start to require certain things from them, like a forecast,” he says. “That’s something we didn’t do four years ago, and now we’re very good at it. Four years ago, our reps wouldn’t submit that data. That’s something our front-line sales managers have required that, over time, all our employees participate in.”
Even the best-laid plans for assimilating an employee into a new culture will sometimes fall flat. Cox says that some people simply won’t be able to reconcile the changes you are asking them to make.
Be prepared to let some of them go, but if they are good and you parted on good terms, never completely shut the door.
“Eventually, there comes a time where if you can’t get with the program, you have to leave,” Cox says. “Some won’t follow the code of conduct, some won’t follow the new processes. That’s happened. But we give everyone every chance. We’ve had some reps come to us and say that they just can’t do it this way.”
If a philosophical difference is creating the rift, Cox says those are the employees for whom you’ll want to keep the door propped open. Code of conduct issues, such as behavior, are one thing, but there is always a chance that differences in philosophy can be bridged at a later time.“One of the things that is always a rule of mine is that anyone who leaves on their own terms, anyone we didn’t ask to leave for a conduct issue, I always personally tell them that they can come back,” he says. “That’s not a guarantee, but in a competitive environment like ours, we know that if someone good leaves, the best thing we can do is try to bring them back.“If they go to another VAR [value-added reseller], they can come back to us and tell our employees, ‘Man, you don’t know how good you have it here.’”
Refocusing the company culture might seem like a pretty basic thing on paper, but Cox, who is now the company chairman, says putting it into practice can be a drawn-out and sometimes messy process because you are asking every employee in your company to think about his or her job differently.“Some of them, this was their first sales job,” he says. “Some of the legacy companies we have go back as far as 22 years, and some of the people have been with that company for that long. (For) many, this is their first sales job, they’ve only done it one way, and if you’ve ever been asked to do it another way, it’s hard to get people to realize they have to change.”
With that in mind, he says the ones that can make the change and adapt to your new culture should be rewarded. Logicalis has a number of reward programs for high-achieving employees, including a President’s Club, in which the top performers in each department are rewarded with a yearly vacation.“It’s more for salespeople than nonsales, but we are able to get one or two people from each function of the company and take them someplace nice,” he says.“They get the same acrylic award every year they are in the President’s Club, and they are listed on a plaque. I think it sends a really powerful message. I love walking into one of our offices and seeing five President’s Club plaques on the wall. Now, President’s Club is something everybody strives for. Those that get there are the ones that changed the way we do business. It’s really helped to develop our culture.”
HOW TO REACH: Logicalis Inc., www.logicalis.com
Patrick Soon-Shiong has business down to a science.
A doctor who was once a surgeon at UCLA, Soon-Shiong says he has the perspective of both ascientist and a businessman when it comes to leading Abraxis BioScience Inc.
The chairman and CEO says business and science aren’t mutually exclusive disciplines. In fact,business can be considered a form of science, especially when it comes to developing a criticaleye and never taking any piece of information at face value.
Soon-Shiong expects everyone at Abraxis to approach business with the same critical eye as hedoes, and he fosters a culture of critical thinking by starting with the words that come out of hisown mouth. “Our culture starts with me,” he says. “If I get in a room and nobody is challenging what I say, Iget very upset. Not angry upset, but upset in the sense that I think every statement needs to bechallenged in a very thoughtful way.”
Soon-Shiong says relentless self analysis of your policies and data is the only way you will ultimately drive your business to the top.
It might not be microbiology or astronomy, but to Soon-Shiong, business is, in many ways, justlike a science.
A critical culture
Innovation is the fuel of Abraxis, a biopharmaceutical company that specializes in injectable medicines to treatserious illnesses such as cancer. But at Abraxis, which had nearly $519 million in net sales in 2005, an idea is onlya starting point.
Soon-Shiong says that when it comes to innovation, you must validate the idea and then validate the validation.
“The nature of good science is always to challenge,” he says. “It starts with a good idea, you get the good idea,then you validate the validation and you continue the process.”
Forming a culture that casts a constructively critical eye toward new ideas starts at the CEO’s desk, but that culture won’t sustain itself and take on a life of its own without putting the right people in the right places.
You must have people who are motivated by the company’s mission. At Abraxis, Soon-Shiong wants to hire people who are motivated by the belief that their work makes a difference in the world.
Soon-Shiong says if you want to have employees who are motivated to produce and refine great ideas, they mustbe motivated not just by the mission of the company, but in some cases, by the mission of the industry. “I look for two qualities in a team member,” he says. “The first quality I really look for is in people who sincerely believe that the pharmaceutical industry is the industry in which they are here to make a difference in apatient’s life. “The second is, these have to be smart people. That is the real strength of a company, if you can surround yourself with smart, intelligent people who are detail-oriented and have a high work ethic. It doesn’t matter whatindustry you are in, you will succeed because of the intelligence of the people you have hired.”
Attitude and intelligence are only parts of the equation, however. Your employees must also be secure enoughthat they are willing to accept constructive criticism, which comes back to the culture that you have formed,Soon-Shiong says.
For your employees to treat criticism as an opportunity for improvement and not as an adversarial situation,you must start by embracing criticism as something that is positive for the company and communicating that toyour team. “From that point, people know that when they are challenged, it isn’t a personal attack,” he says. “People knowthat it’s really for the good of the organization.”
Soon-Shiong says communicating and sustaining an innovative culture requires the repeated hammering homeof the same messages to your work force. It takes time and the willingness to communicate as much as possiblewith your employees.
Employees thrive on communication from management. It has a large bearing on how they innovate and createnew ideas.
Soon-Shiong says that it is up to the executive team, and ultimately the CEO, to paint a specific picture of thecompany’s direction. In an industry with many possible avenues for new business, that’s especially important.“There are so many avenues right now [in biopharmaceuticals], and I think the challenge is to make sureemployees know which direction we are going in,” he says. “As we are growing so fast, it’s hard for some peopleto keep pace. We use both internal and external communications as ways to communicate where the organization is going.”
In those communications, which include newsletters and e-mail, Soon-Shiong not only disseminates information, he solicits it.
If you ask your employees to be creative, you must make sure they can take their ideas as high as they need towithin the organization, he says. Soon-Shiong is a believer in an open-door policy, and he communicates it to theAbraxis team frequently. “It’s all about openly challenging people and having an open-door policy,” he says. “I want ideas to come all the way tothe top in terms of the head research and development people and all the executive committee members, and ultimately, myself. I am always trying to make sure that important ideas flow upward in the company. To that end, I personallyparticipate in some of our [project] review meetings.”
Soon-Shiong says one of the best ways to make criticism constructive is to approach it through different angles.He believes in bringing different perspectives to the table when reviewing a new idea. He calls the groups a “convergent of multidisciplines,” and says that you should strive to build a work force that has diverse backgrounds,with each person bringing something unique to the larger organization.
“You need smart people with diverse backgrounds,” he says. “For instance, we have regulatory scientists with very extensive clinical trial management backgrounds and regulatory scientists with global experience. Our basic scientists extend between mathematicians, computations scientists and physicists.”
The need for multiple perspectives is something Soon-Shiong has learned through his own professional experiences.
“I have had a 360-degree exposure to my industry,” he says. “I was a surgeon at UCLA and understood the needs ofpatients with life-threatening diseases. I was a basic scientist and started working with nanoparticles and stem cells veryearly on in my career. Then, I’ve also been exposed to the commercial side, where I’ve been involved in building a pharmaceutical company and directly involved with the manufacturing process and all the challenges that go with it.”
He says if you want your organization to have a wide view on innovation that encompasses multiple perspectives andhave leadership that seeks multiple sources of input on creative projects, you need to create an organization that does-n’t have layer upon layer of management hierarchy.
At Abraxis, Soon-Shiong has structured an organization in which he can reach down several levels to address lower-rung employees, and those employees can address him.
It goes back to having accessible management and tirelessly communicating an open-door policy. But it gets more difficult the larger your company gets.
Abraxis has expe rienced rapid growth in recent years. In 1996, the company employed fewer than 50 people. By 1998,that had sprouted to 500, and by 2006 had increased to just over 2,000. “Keeping a flat organization is certainly a challenge as you grow bigger,” he says. “It’s easy when you are 500 people,and it might still be relatively easy when you are at 2,000. But as you start growing to 5,000 or 10,000, it has to beaddressed from the top down on a daily basis.”
As you grow, keeping lines of communication open and your messages consistent becomes more and more important.There is no secret to it, Soon-Shiong says, other than to make sure you and your senior management team remain vigilant about communication and actively seek feedback from all areas of your company.
Soon-Shiong says as a CEO, you aren’t just a businessman, or a scientist, or a number-cruncher. You are also a teacher.Employees become passionate about their work by learning about their jobs and how their jobs affect others. You cangive them charts and graphs to show them how their work fits into the big picture mathematically. You can show themhow their work fits into the next big product your company is going to produce. All of that works on some level.
But one of the best ways you can give your employees a sense that their work is producing real results is to relay tothem the stories of the people they are helping. In some industries, it might be your company’s product helping peoplein another company thousands of miles away to get their jobs done. At Abraxis, motivation comes in the form of cancersurvivors and others who are winning the battle with life-threatening diseases. “You need to believe in your conviction, that what you are doing is really affecting and changing lives,” he says. “Youneed to find the people whose lives are actually changed by your innovations and share their stories with your team.“At Abraxis, we are very fortunate and blessed that the patients actually call in and share with us experiences thatchanged their lives. Some patients had breast cancer and were told that they only had a few months to live, and some ofthem had full [treatment] responses. These are the things that really motivate us.”
Showing Abraxis team members how their ideas become life-changing treatments is the most powerful motivator Soon-Shiong says he has.
He says you have to create a feeling among your employees that there is a real need for what you are doing as a company, something that creates a purpose beyond the profit-loss ledger. “I think there needs to be a recognition that there is an urgent, unmet need for what it is you do,” he says. “That ishow you guard against complacency.”
Soon-Shiong says that monetary rewards are a significant part of the equation when it comes to motivating employees, and employees do respond to financial gain. But as the CEO, you should dig deeper to find what beyond moneycan motivate your team. “We offer both stock options and a competitive salary as compensation,” he says. “But that’s not what drives somepeople, certainly not a lot of our people. For some, the satisfaction of making a difference is the great motivator.”
HOW TO REACH: Abraxis BioScience Inc., www.abraxisbio.com
It’s right there, at the top of Mark Wallace’s list of maxims on effective leadership: “Leadership always influences and determines outcomes, not some of the time, but all of the time.”
That one sentence has served as Wallace’s guiding statement as president and CEO of Texas Children’s Hospital for the past 17 years. Wallace says every decision a CEO makes will create a cascading effect throughout the organization, affecting executives, managers and employees alike, and the best CEOs never forget that.
He says it is his responsibility to set the tone for the entire Texas Children’s Hospital organization, which has 52 locations in the Houston area and posted just more than $1 billion in revenue last year. Wallace sees it as his duty to be positive, energetic, candid and forward-thinking so that his employees learn to be the same way. “A lot of it is being very visible in the organization,” he says. “I try to make sure that employees can see my presence, sense my presence and feel my presence. I’m always out and about when I’m at the hospital. I’m interacting with employees, I’m upbeat and attentive.”
Wallace says a CEO with a positive attitude can project that attitude to his or her employees, which is critical to getting them to buy in to your company vision. If you can clearly define your vision and enable employees who can carry out that vision, it can create the momentum that drives your company forward.
Finding the right people
Spreading your vision starts with developing people who can carry out your vision. And it isn’t just a matter of coaching; it’s also a matter of recruiting.
At Texas Children’s, recruiting starts not with the person but with the job to be filled.
“That’s the most common mistake organizations make,” Wallace says. “They don’t think through what is the leadership position all about, what are the characteristics, what are the skill sets and what are the characteristics I want from the person who will fill this position?”
Finding the right people the first time will not only increase the effectiveness of your work force, it will also reduce turnover.
“Jim Collins, the author of ‘Good to Great,’ said it best,” Wallace says. “He said, ‘If I were leading a Fortune 500 company, I would have one priority: Get the best people on the bus, get them seated on the right seat on the bus, and make sure they don’t leave the bus.’
“That’s been my goal: Attract great people, get them sitting in the right seat, and keep them here.”
Wallace tries to fit the right people in the right places with an involved process inspired by the hiring practices of Google.
“If you are just a regular applicant at Google, you will end up talking to an average of about 25 people before you will be selected to be hired,” he says.
Wallace calls it a “selective interviewing process,” and it requires managers from different areas of the hospital to interview a potential employee, many times asking the candidate the same question several different ways. Afterward, all of the managers who interviewed the candidate get together and compare the consistency of the person’s answers. Through that, Wallace and his staff can start to sketch a picture of how the person would fit in.
“No one bats 1.000 when it comes to picking people, but if you have that much commitment going on at the front end of the process, through good, interactive programs led by human resources, your average of picking great people goes way up,” he says. “That’s opposed to a lot of companies, where you might just have one HR person and one person from the unit the person is applying to work in conduct the interview.”
Wallace says he’s looking for a certain “it” within a person. That “it” lets him know a job candidate will embrace Wallace’s vision for the hospital and will be willing to work as a team player to make that vision happen.
Wallace says the characteristics that define “it” are subjective and depend on what the CEO wants. But he says that if you know where you want your company to go, you will know what you are looking for when you see it.
“It’s people that have energy, that project energy,” he says. “I’m not talking about someone who is loud or bubbly or has the personality of a cheerleader. The kind of positive attitude I want comes in a variety of personalities. Quiet personalities can be very positive, very energetic and very contagious.”
Wallace says getting hires right the first time is critical because the chances of changing the attitude of your employees aren’t very good. Most people, by the time they reach adulthood, have their general disposition set.
“You can’t teach attitude,” Wallace says. “People learn and develop their attitudes when they are children. By the time someone is an adult, their attitude is their attitude, and organizations can’t change that.
“That’s why, before you even make the decision to hire someone, you have a really good idea of the personality of this individual, are they driven, and do they have a track record of success.”
Driving down decisions
Wallace says that as a CEO, you need to learn who the most important people are to your company’s success.
And here’s a hint: It’s probably not you. It might not even be the people directly below you. The most important people in a company are what Wallace terms frontline managers. They are the people who interface with customers and provide the face of management to lower-rung employees. In short, any impression a customer or employee gets about your company, chances are it will come from your frontline managers.
As such, Wallace says the ability to enable your frontline managers to make decisions and communicate your vision is critical and should be one of your top priorities as a CEO.It’s a matter of smart delegation of authority and responsibility.
“Eighteen years ago, when I was being recruited by Texas Children’s Hospital, I told the board that if I come to be CEO, the last thing I want to hear from the board is, ‘Who told you that you could approve that?’” he says. “I told them that I wanted it to be very clearly defined as to what the board is willing to delegate to me in terms of policy regarding operational matters and financial matters.”
Upon receiving the job, Wallace drafted a comprehensive document outlining the levels of authority within the hospital. The document starts with Wallace’s responsibilities, then moves down to what he delegates to senior management, and then what senior management delegates to frontline managers and employees.
As the CEO, it is your prerogative how much of your authority you delegate to those beneath you. But Wallace says if you are going to delegate, make sure you are serious about sticking with it. “Our levels of authority document is now 18 pages long,” he says. “That’s where the proof is in the pudding. If you really talk a game of delegation and empowering frontline management, you have to operationalize it by making it formal throughout the organization. “You can’t just say it. You have to formalize it because, at least here, there are 10,000 decisions to be made every day. So everybody has to know what their levels of authority are.”
He says levels of authority go hand-in-hand with levels of responsibility. If you give someone a certain responsibility, you must also make sure that you have given them the authority to carry it out. If you don’t, bottlenecks develop in the decision-making process. “You need to make your organization as fluid as it can possibly be,” Wallace says. “One of the biggest bottlenecks in any organization is, ‘Well, it’s sitting on someone’s desk,’ or ‘So-and-so hasn’t approved it yet because they are stumped. They don’t know if they really have the authority to approve something like that.’ “You can’t be slowed down by slow decision-making. Your competitors will pass you by. That’s why, in these large organizations, it’s imperative that we push decision-making downward so that the best decisions can be made and the timing is right.”
Wallace says in many cases, the frontline managers are the ones most capable of making the right call if given the proper authority.
“What you are trying to do is get the decision-making down to the leader who knows the most about which decisions need to be made,” he says. “If you ask me to make a decision that is going to impact the radiology unit, I couldn’t tell you because I don’t work in radiology every day. The frontline leader in diagnostic imaging is going to be able to do a much more effective job there than the president and CEO.” Wallace says pushing decision-making capabilities downward is one way a large organization can maintain a degree of flexibility as marketplaces shift. The leaders on the front lines will be able to react to changes in the field far sooner than you will.
“One person can’t make all the decisions,” he says. “Ten people can’t make all the decisions. A hundred people can’t make all the decisions. It really takes an entire organizational structure, people who have been empowered to make a policy or financial decision.”
Through the grapevine
Texas Children’s Hospital is a health care facility, but the logistical hurdles it must clear aren’t much different than those faced by a software company or an auto component manufacturer.
While Wallace doesn’t oversee offices in China or Dubai, he still has more than four dozen locations around the Houston area that fall under his authority. Within those locations is a wide assortment of doctors, specialists, nurses, clerical staffers and other employees. They all come from different backgrounds, and they all need to have the same company messages conveyed to them.
In the world of the CEO, communication is critical. Without it, there is no vision, there is no mission, and employees never get empowered to make decisions.
It’s not about bells and whistles and grandiose statements. Wallace says it’s mostly about grinding away on the same messages, over and over, until everybody has heard it enough times for it to sink in. “Communicate, communicate, communicate, and that communication has to take many different forms,” he says. “Some people want to hear it from me. Others like e-mail and Internet messages a lot more.”
If you emphasize frequent communication, you will eventually find the right mix of print, Internet and in-person communication to reach all of your employees. But at first, that communication will involve a lot of message seeds that never take root. “It’s not that people don’t want to hear it, it’s that people are busy,” he says. “That’s why the messages have to be very repetitive and delivered in a variety of different forms. “It’s communicating in a plethora of different forms, and once you think you’ve communicated enough, you do it a bit more. I’ve been there myself. Some things I hear the first time, sometimes it takes me three times to really hear it and get it. It’s just because we’re busy and distracted. That’s why repeating your message is really, really important.”
HOW TO REACH: Texas Children’s Hospital, www.texaschildrenshospital.org