Some CEOs think the phrase “open-door policy” is trite and tired. But while the phrase itself has been branded a business clich, Fred Olson says the concept is as relevant as ever.
The president and CEO of Rochester Hills-based Webasto Roof Systems Inc. says that if you want a motivated, productive work force, you need visible, accessible leadership that not only creates a vision for the company but acknowledges and rewards the employees who make that vision a reality.
Olson says it’s all about communication communicating with employees is one of the most important day-to-day tasks a CEO must accomplish if he or she is to make a company a success. Communication fosters innovation, bridges gaps between departments and, perhaps most important, gives employees a sense that their work is integral to the overall well-being of the company.
“It happens every day,” Olson says. “Everybody’s not going around slapping everybody on the back, of course, but it’s all part of the culture thing. If you do good work, you know somebody is going to say, ‘Good job, good solution.’”
Webasto Roof Systems is a $500 million subsidiary of the German automotive component manufacturer Webasto, so Olson says he knows how important it is to receive encouragement from superiors. “At my level, when I’m talking to my boss and I provide a report or some input, or deliver results, and he says, ‘Great job, well done,’ I feel great,” he says. “I tell my wife about it when I go home. It’s just the feeling that I’m a valuable member of this team. I believe that happens at every level of this organization. That’s the way you want to feel.”
A two-way street
Olson says communication should be a way of life for every company. Employees should come to view candor from management as the norm, and it starts by simply listening to what others in the company have to say. “We live the model of an open-door policy,” he says. “Anybody can come to myself or our vice president of business development, our vice president of R&D, our COO, to anybody in the company. It’s not an unusual experience at Webasto because that’s just the way we live.”
But simply making yourself receptive to employee questions and suggestions is only part of the battle. Effective CEOs must frequently engage employees on their level to both inform them and let them know that management takes an interest in what they have to say.
At Webasto, employee engagement begins on the plant level, at the start of every work day. Floor managers bring all the employees in their charge together for a brief meeting on the tasks and events of the day. “We start our day with a team meeting for every line,” Olson says. “They talk about what’s important today, was there an issue in the field that we need to take special note of, are there any visitors coming to the plant. We try to let them know about it, and then they know they can depend on management for clear, open, honest communication.”
If you want communication to become a two-way street between employees and management, you must take the first step. There is a difference between passively leaving your door open and actively encouraging employees to enter.
Olson says a CEO must be active. There is no magic formula to it; it’s simply the nuts and bolts of interacting with people.
“It can be something as simple as open staff meetings at all levels of the organization,” he says. “We have to make sure we’re driving information through the organization on a rapid basis.”
Monthly, Olson provides organized forums where employees can talk back to management on any company issue that concerns them. He calls them his “president’s roundtable,” and he randomly invites 25 employees with birthdays that month to attend a meeting where no question concerning the company is off limits. “It’s absolutely an open forum,” he says. “We go around the table, and they can ask me anything they want about the business. They can ask me where we’re going with product development and with certain customers. They can ask me to clarify rumors. They can tell me things they don’t like about the business, and ask me what I’m doing about it.”
Olson and his senior managers take notes on what they hear, and if a question can’t be answered during the meeting, Olson promises a response within two days.
The meetings have become such a hit that employees now prepare lists of questions to take to the meeting.
“It’s a pretty intensive, eye-opening session,” Olson says. “You don’t know what they are going to ask you about, what they are going to put on the table as a problem to be solved. It’s a really good, wide open forum.”
Stopping the rumor mill
If you don’t communicate openly and frequently with employees, employees will fill in the blanks with their own stories.
Rumors and conjecture are a fact of life in any organization, but the rumor mill will start to take on a life of its own if management isn’t there to set the record straight. When rumors grow, fear and uncertainty start to grow as well, and it becomes very easy for your employees to develop an “every man for himself” mindset, taking the focus off the company goals and potentially undermining your ability to grow. “You have to drive out secrecy. Secrecy doesn’t get you anywhere,” Olson says. “Obviously, when you are developing something, there is a normal period (of secrecy), but when you are ready to communicate, you do that openly and clearly.”
Employees learn to trust you when you exhibit trustworthy behavior consistently by having your actions follow your words.
Olson has developed consistency in his message and actions by forming a communication model for the entire company. Whenever a new strategy or plan is posed to the company’s employees, leaders must be prepared to answer three basic questions: What are we doing? Why are we doing it? What does it mean to each person in the company?
Olson says that if Webasto’s leaders can clearly define and answer those three questions, it puts many employee concerns to rest and makes other questions much easier to answer.
“When you develop a communication you are going to distribute widely to the colleagues of the company, you want a model of clarity,” he says. “You don’t want them to leave the communications process with unanswered questions. We always allow ample time for a question-and-answer period when we do those things.”
You can also help reduce the spread of rumors by addressing the would-be threat of shop chatter directly.
“We even say to them, ‘You don’t have to worry about rumors at Webasto,’” Olson says. “In a company of 1,200 people, there are going to be rumors; you can’t block them out. But what you can say is that when you hear it from management, you’ve heard the truth, so don’t pay attention to rumors.”
If an employee has heard something bandied about on the plant floor and wants to know the real story, Olson says he encourages workers to start working their way up the organizational ladder. If the person’s direct supervisor doesn’t give a satisfactory answer, take the matter higher. “If you’re not getting the answer you want from your first level of supervision, that’s a problem in and of itself, but feel free to take the issue upward,” he says. “Take it to the point where you walk into my office and ask my assistant for a time to meet with me. It’s always set up that day if I’m available.”
Working with an employee to get the answer he or she is seeking will help build that person’s trust in management, and Olson says trust is the antidote for rumors. If you are consistent and forthright in communicating, people will believe you before they believe what’s coming from the mouth of a co-worker in the next cubicle. “In our annual employee survey, one of the questions we ask is, ‘Do you feel management communicates directly and effectively with you on key issues within the company?’” he says. “We always gauge what the responses are, and over time, the positive responses are growing to where they are in the 90 percent range. So people are developing that trust that, if they hear it from management, that’s what’s happening.”
Communication doesn’t lose any importance once you have achieved buy-in with your employees. You also have to communicate that it’s important for people to believe in and work toward the company’s goals.
Compensation is critical. It can be a monetary gesture, a small gift, or verbal recognition. But when an employee has an idea, and has enough boldness to bring it to the table for potential criticism, the best reward you can give that person is to show that you are considering the idea.
Olson says not every idea can be implemented, but every idea is worthy of your time, simply because it shows your employees that you are interested in what they have to say. That in and of itself is a form of compensation. “It’s recognizing their value to the organization,” he says. “You recognize that by using their input and ideas. That peer reward system is there.”
Olson has started a program called “Recognizing Excellence and Actions in People.” Through REAP, employees are encouraged to submit ideas and suggestions, and management then evaluates those suggestions, building goals and objectives around a number of them. “We reward people for those ideas,” Olson says. “We even pay more if the idea is formed by a team and they come up with not just an idea but a solution. If it makes good sense and it’s implemented, they are financially rewarded.”
However, Olson believes in balancing between monetary and verbal rewards for high-achieving employees.
“I think both sides of the equation are equal,” he says. “It’s nice to have money, but it’s important to be recognized.
“You can’t just always roll out the money. People feel their importance within the organization. They feel when their input is recognized, whether it’s a solution to a problem or a suggestion for a product, people understand that they are a part of that and they feel good about it. We encourage that all the time.”
HOW TO REACH: Webasto Roof Systems Inc., www.webasto.us
It was so basic, yet such an important selling point for Volkswagen in North America, says Frank Witter, CEO of Auburn Hills-based Volkswagen of America Inc.
Americans and Canadians like to have their coffee and soft drinks with them as they drive, something that might never cross the mind of European auto designers if they weren’t exposed to American lifestyles.
“Americans have a very specific requirement for a lot of storage opportunities for fluids,” says Witter, a native of Hanover, Germany. “That is of less or no importance to Europeans.”
Because of the cultural similarities, it would have been easy for Volkswagen’s Germany-based designers and engineers to fall into the trap of thinking that the wants and needs of North American customers are the same as those of European customers. But something as simple as a lack of cup holders could have cost Volkswagen customers on this side of the Atlantic and cut into its estimated $18.23 billion in revenue from the United States and Canada for fiscal year 2006.
“The problem with Americans is they look like Germans,” Witter says with a laugh. “If you talk about the Chinese market, everybody recognizes it is different immediately, in language, culture and everything. But that’s not the case in North America.”
Because of the less-obvious differences between the North American and European markets, Witter helps coordinate periodic workshops that bring a number of Volkswagen’s German engineers and designers to the United States to absorb the lifestyle and form a detailed view of how Americans use their cars.
The engineers and designers then head back to Germany to act as Volkswagen’s reference for American culture as new vehicles are created.
To Witter, there is only one way to bridge the international gaps of business: Listen, and form a company culture that values listening. Listen to those who buy your product, listen to those who make your product and listen to those who are in the field trying to sell your product.
Witter says it’s the only way you’ll truly understand your market.
“We all know here that the American customer has very different expectations and a very different lifestyle,” he says. “That’s what a product like a car needs to accommodate.”
What customers want
Witter calls it the “sweet spot”: Understanding your customers’ wants and needs, and then providing them with a product that matches those needs.
“I love to remember 1998 when we introduced the new Beetle; that was a sweet spot,” he says. “We couldn’t build them fast enough because it was exactly what people wanted. That’s what understanding a market and understanding your opportunity is all about.”
Creating that connection is a three-step process. You must find out what your customers want, provide them with what they want, and then advertise the fact that you have what they want.
Finding out what customers want is where the skill of listening is most important. In addition to having Volkswagen’s German design staff come to America to experience the cultural landscape, Volkswagen’s leaders also seek information from the dealers and the customers themselves.
The customer and the customer interface are valuable places to pick up information on the market and what sets your product apart in the eyes of customers.
Volkswagen’s corporate office receives constant feedback from dealer owners on customer demographics and what marketing campaigns are working and not working.
“The dealer input is extremely important in terms of the feedback we get and the types of customers coming in to the showroom,” Witter says.
The Internet has also become an effective method to seek customer information.
“We know from research that almost 80 percent of our customers visit our Web sites before going on to the final purchase process,” he says. “Audi and Volkswagen are probably the top two in terms of utilizing the Web for information. And because there is an emotional attachment to the brand, people are more likely to provide us with some personal information about themselves.”
Volkswagen performs frequent research on what customers view as the main points of attraction to the company’s vehicles. It goes beyond vehicle features and value propositions to defining the emotional attachment between Volkswagen and the American public. “We did quite a bit of research to really embrace what the brand of Volkswagen stands for in the United States,” Witter says. “Then we matched up our current product offering with the public perception.”
Volkswagen’s leaders found that, while the company has a degree of mass appeal, particularly with vehicles such as the Beetle, its appeal on the whole is far more niche-specific. Volkswagen’s ads attempt to reflect that.
“Look at our advertisements,” Witter says. “They clearly speak about the brand and its products. It’s about the emotional connection, which is not necessarily appealing to everybody, but we are also not out there to be everybody’s darling. If you look at the latest marketing efforts, you will see that they are clearly sending a message which is very different than what others are doing.”
If you do not create an emotional selling point, or some other means of differentiating your product from that of your competition, it becomes just another commodity in a crowded marketplace, and the only means of separating it from the pack is monetary incentives. “If you are selling them something they really do not need or want, you need to incentivize them to buy it,” he says. “But if you incentivize, you compromise your profitability. That’s why to understand what customers are and to serve them with an offer that suits their needs is the key objective.”
Making yourself visible and accessible to customers is only part of the battle when creating your brand. Employees should also have a strong voice in the direction of the company.
As with customers, it’s all about engagement and finding out what they value. But unlike customers, you’re concerned about something far more encompassing than how they view your product. You’re asking them how they view your company as a place to work.
Witter says the employee experience is every bit as important as the customer experience. And the employee experience starts in the CEO’s office, where the philosophy of listening to employee ideas is born. “First and most importantly of all is fostering that type of environment where employees are actually encouraged and incentivized to bring up ideas,” Witter says. “We train our management that they should take this seriously and foster that type of spirit.”
Volkswagen relies on group and departmental leaders the people on the corporate and dealership levels who interact the most with employees to drive home that message in meetings and throughout their day-to-day work.
Keeping the door propped open might encourage some employees to bring their ideas to the table, but many others need to be regularly encouraged to step up and share what’s on their minds. In the works at Volkswagen of America is an employee idea-management process. The process is still being hammered out and might not be functional until later this year, but when the process is finalized, Witter hopes to have a formal way for employees to submit ideas to upper management and have them considered.
“We want to make sure that employees do understand and get the confidence that the system works, that ideas are being followed up with and that the initiative is really being taken seriously,” he says.
Right now, Witter has many less-structured routes for engaging employees. For those at Volkswagen of America’s corporate headquarters, he conducts luncheons once or twice a month with 15 to 20 employees from all levels of the company, taking questions on a wide spectrum of company matters.
For those who don’t work at the company headquarters, communication becomes more difficult. Witter says he sends out a monthly newsletter to all locations to brief them on what’s happening with upper management and encourages all employees to contact him with questions.
Written and verbal interaction is a big part of engaging employees, but it doesn’t start or end there. Providing employees with adequate training and retraining is also essential.
To some, training might seem like a necessary hoop to jump through, the business equivalent of a dental checkup. But Witter says it is all part of employee engagement and giving employees a sense that they really can affect the company for the better.
Volkswagen holds periodic training sessions at locations throughout the United States. The company tries to quickly familiarize its employees with new car models and new features on existing models. But Volkswagen has also taken it a step further.
As with customer interaction, it has made the Internet a key component of employee training.
From year to year, there are usually minor changes made to the features on existing vehicle models. On the dealership level, salespeople and service technicians are required to learn the new features and then pass a test. To reduce the inconvenience to employees, Volkswagen has set up an Internet classroom where they can take a test and receive immediate feedback on their score. “We use the Internet to optimize the result with the least effort,” Witter says. “It becomes very effective sales-side in a new model year.”
When an employee consistently does good work or shares ideas that help improve the company, you should never fail to reward that person. Rewarding employees for good work is every bit as critical as allowing them to share their ideas in the first place.
To reward employees, you have to have clearly defined goals in place that set the bar for good work performance. That means everyone in upper management has to be on the same page with regard to organizational goals.
“It’s setting measurable objectives and holding everyone accountable for their accomplishments,” Witter says. “We derive those objectives from the objectives we set for the brand. We grow that into leadership objectives and then roll them into employee objectives. So it’s basically a cascading process.”
Volkswagen’s goals are set with seven items in mind: New car sales, cost, dealer profits, dealer satisfaction, customer satisfaction, employee engagement and residual value performance of leased cars. Every goal has to lead to one or more of the objectives.
Once employees have met their goals, there are many ways to reward them. Witter says monetary compensation is the most obvious, but you shouldn’t stop there.
“Monetary compensation normally has short-term implications,” he says. “But recognition needs to be in much more than just monetary forms. We give leaders a small budget which can be used for putting on events, celebrations of successes. We recognize people in my monthly employee newsletter.”
The gestures of gratitude don’t have to be extravagant. The proverbial pat on the back can go miles toward engaging an employee and giving that person confidence in the organization and their place within it.
“It should be happening as we speak, numerous times throughout the day,” Witter says. “It doesn’t need to be in the lobby with every employee. It could be in a group staff meeting. It could be spontaneously walking to somebody’s cubicle. It could be a balloon for the best-performing employee in the call center in a given week. “It’s about the sum of the small things, the little thank-yous. Recognition will do wonders for you. It’s not only about the big bonus once a year, it’s the continuous awareness that this is important for all of us.”
HOW TO REACH: Volkswagen of America Inc., www.vw.com
Nearly half a century ago, long before Ralph Vasami came aboard, Universal Weather and Aviation was a fledgling company in an infant industry, providing weather plans for corporate flights. But as corporate aviation grew, Universal had to adapt, tacking on other services in a grow-as-you-go fashion. The result was more of a loose collection of departments than a unified company. When Vasami took over as president two years ago, he saw the need to unify Universal to take advantage of its size and experience in a market flooded with competitors. The steps he took have helped Universal become a global power in corporate aviation services, with 52 locations worldwide and more than $281 million in annual sales. Smart Business spoke to Vasami about how he communicates his vision and creates passion.
Get it together. We grew up extremely siloed in our history. Every division was doing their own thing, so trying to align the organization has really been a significant challenge.
For the first 10 years we existed, we did nothing but weather, so we kind of grew up on weather flight planning. Then we started adding a whole bunch of services as the market started to grow and the aircrafts themselves became more sophisticated and able to travel longer distances.
We just bolted on services as needed, with functional leaders over those services. Everybody just sort of took care of their own backyard. Then you wake up one day and everybody has different databases, different standards, different commitments to quality. One base isn’t talking to the other, one group is doing it this way, another is doing it that way.
In order to control costs and to really excel and differentiate in the market against an increasing number of competitors, we really had to align our efforts to take advantage of our touchpoints and size around the globe, to provide consistent service no matter where a customer ends up. You can’t do that unless you are aligned with some standards and consistencies.
Establish a reason for change. To change it, I’ve followed the principles of change management. You start with a compelling reason of why you have to change. In our case, that compelling reason was that there was no way Universal was going to take our service and our value proposition to another level unless we were united in our efforts. There is no way you can facilitate 52 locations around the world with standards and expectations of service and facilitate all of these third parties and variables if you’re not aligned.
Basically, we’re letting everybody know that we’re not going to move forward unless we do. So you had to create some compelling reason to get people off dead center.
How we did it was by creating a real vision and direction for the company. We aligned our corporate, division and employees goals to reach that vision. We tried to make it come alive in the organization by aligning everybody’s goals, daily work tasks, projects, you name it, to the achievement of that vision, that goal.
Measure your goals. We’ve taken our company goals from the 80,000-foot corporate vision level and tried to bring it down to a granular, operational level through employee “SMART” goals. It’s an acronym for a program we adopted two years ago, Specific, Measurable, Actionable, Realistic and Timely in all of our goal-setting.
The first thing we do is we share what’s working. What are our strengths, and what are our challenges? Then, from what is working and what are the challenges, we task our management to go off and come up with their goals in order to address how we’re going to handle weaknesses and address challenges.
We have a booklet that was distributed to all employees that shows them the vision, the corporate goals, how we’re aligning the organization through SMART goals, what is our value proposition. Every employee has this, even at risk of it leaving the building and ending up in competitors’ hands. We felt it was worth the risk.
We have one group that’s our largest group. They’ve taken it down not only to SMART goals, but to an actual scorecard. They’re having monthly meetings with management going through their specific scorecard, which also has their measurements built in.
There are other parts of the company that their SMART goals are still being reviewed with people. But it may not be monthly; it might be every six weeks, every two months.
Tell stories. Part of employee communication we’ve found very effective is turning this stuff into storytelling, real-life examples, ranging back from the founding fathers of the company and how they did it in the ’60s, to how we’re doing it in the early 21st century with all the technology and everything else.
That is one of the essential skills any business leader has to have, that ability to communicate the vision and create passion around it. Otherwise, it’s just words.
People can relate to the storytelling. I tell real-life stories of my customer service experiences I had working at the Ritz Carlton, and the point I make when I do it is, ‘What’s going to make someone pay $700 for a room versus $300?’
Every hotel you go to has a bed and a shower curtain. But it’s the people, and the service that really differentiates the Ritz Carlton.
When they hear that kind of stuff, and then you ask what customer service experiences you’ve had that either pissed you off or made you happy, now they can start to relate about how our customers feel when they work with Universal, versus just a bunch of theory and opinion. That kind of storytelling can be very powerful.
Value your relationships. The bottom line is everybody wants to make money, but the way we really define success is our strong financial results via customer and employee satisfaction and loyalty.
We’re willing to lose on a transaction, to be honest with you, to win the war versus a battle. Customer satisfaction and loyalty drive our financial results. We don’t look to make short-term profits at the expense of a long-term relationship with a customer.
The loyalty factor is so important. So whatever a customer wants, within reason, they’re going to get, even if we take a short-term hit on the financials.
HOW TO REACH: Universal Weather and Aviation, www.universalweather.com
The chairman, president and CEO of Aqua America Inc. says it’s important to get the name and faces of your company out into prospective markets prior to making a purchase or acquisition. It’s a tried-and-true method that DeBenedictis has used to lead the Bryn Mawr-based water utility holding company since rising to the top post in 1993.
Aqua America purchases small, privately owned and municipally owned water systems, and it has a lot of people to win over before making an acquisition. Everyone from the mayor and city council, to city water employees, to residents wants to know what Aqua America is all about, what it is going to improve, and if it will deliver on the promises it makes.
In addition, the company is in a business closely regulated by industry officials.
The close scrutiny from multiple angles has caused DeBenedictis to formulate a plan that increases the company’s visibility around the country and educates municipalities about its history and customer service.
“We try to be very visible well ahead of buying,” he says. “Keeping good local political and regulatory relations is very important. That’s where we really have to sell ourselves.”
The company’s philosophy of visibility is the spearhead for a methodical growth strategy that has propelled Aqua America from a small utility holding company in suburban Philadelphia to a 1,500-employee industry leader with holdings in 13 states and 2005 operating revenue of nearly $497 million.
Making the pitch
To most people, patience is a virtue. DeBenedictis says when growing a business, it’s a necessity.
Acquisitions seldom come together overnight, and while you need to have the initiative to spur growth, you also need to have the ability to let the process run its course.
It can be much easier said than done, especially when dealing with a large, bureaucratic organization where items might have to be considered by multiple executives and boards, increasing the probability of business getting hung up in the corporate and governmental channels.
DeBenedictis says a CEO must learn to control the urge to force things.
“I think you get frustrated because you are not in control,” he says. “Especially with government, it’s not like a deal where you’ve offered so much per share, and the shareholders either have to vote it up or down. There is no public reason why a city has to sell its water system to us. They can sell when they want to sell.”
DeBenedictis says in many cases, the only ammunition a CEO has in making an acquisition is repeating and modifying the initial purchase pitch. Since a business leader can’t force an entity to sell, the only thing he or she really can do is have the company’s senior managers keep reiterating the advantages of selling to the decision-makers. It’s a one-pronged approach that doesn’t guarantee expeditious success, but in the end, it can work.
Business leaders should also be aware of what selling points their business has that other businesses don’t. In most cases, it’s a matter of research, comparing your business to others in the industry. In the case of Aqua America, it has the advantage of providing a vital service.
“We realize the service we provide is vital to your well-being,” DeBenedictis says. “You want to know that when a fire starts, there will be enough water pressure to put the fire out.”
But even with all the selling points Aqua America officials can piece together, the purchase process might still ultimately become a waiting game as private owners and government leaders mull over the proposal with no reason to move on it.
DeBenedictis calls it a “value-destroying period” for the acquisition candidate, and says a CEO’s ability to stay focused on the final goal of making the acquisition will be tested during a long wait when little is accomplished.
“Our acquisitions can take nine to 12 months, and that’s a very value-destroying period, especially if you are selling the company,” he says. “You know what happens when a company is changing. It gets even more intense when you’re being sold and you don’t know what the vision is going to be or you don’t know who your new boss is.
“You spend more time speculating around the water cooler than working. That’s why it can be a value-destroying period, and that’s just something you can’t get around.”
Doing what you say
DeBenedictis says once a company is able to make a purchase, the main factor that will determine its success is action.
A well-honed and persistently placed purchase pitch is hollow without subsequent action. If a company doesn’t do what its leaders said it was going to do prior to the purchase, not only will the acquisition suffer, but the acquiring company’s long-term reputation can suffer, as well.
DeBenedictis says investing money to perform necessary upgrades to an acquisition is paramount.
In Aqua America’s case, the first task is usually to spend money on a municipality’s water infrastructure. It creates an initial impression that the company is concerned about not just distributing water and collecting payments, but also about the quality of the system it is managing.
“People say ‘Yeah, that pipe should have been replaced years ago, they’re replacing a 100-year-old pipe, this company is responsible,’” he says. “It’s not sexy in the sense that, ‘Oh, a pipe just got replaced,’ but it is subliminal in the sense that, ‘This never happened before until these guys came in.’”
Aqua America’s extensive history of acquisitions more than 200 since 1995 has taught DeBenedictis that the key to making good on your promises is to not get too far ahead of yourself as a company. Once an acquisition or purchase is secured, focus on that acquisition and get it up and running before moving on to the next opportunity.
“Following through is very important,” he says. “Don’t get on to the next thing ahead of time. Make sure you are delivering what you said you would deliver. If you promise the world, [and] then drop everything and move on to the next opportunity, it leaves a bad taste in people’s mouths.”
DeBenedictis says he and his regional leaders make sure that Aqua America doesn’t buy a city’s water system, lay some new pipe and then vanish behind the curtain. An extensive network of executives helps to make the company more visible on the local level, something that plays back into DeBenedictis’ mantra of remaining accessible to customers.
Each of the 13 states in Aqua America’s network as far north as Maine and as far south as Texas and Florida is governed by its own president.
DeBenedictis says allowing ideas to start at the state level and work their way up to corporate is a key component of how Aqua America is run. He believes that those further down the ladder can better see what is happening in the field and will give the company’s corporate leaders a better view of the details below.
“My theory is that the small stuff is the stuff that needs to be taken care of,” he says. “If you don’t take care of the small stuff, it can hurt you in big ways.”
A new name
DeBenedictis says a sometimes-overlooked aspect of growth is making sure your company’s name accurately reflects what the company is. It is something Aqua America addressed nearly three years ago.
In 2003, the company was still known as Philadelphia Suburban Water Co., which had existed in various incarnations since 1886. Up until the late 1980s, the company had never really ventured outside suburban Philadelphia, but between 1985 and 1990, it acquired three Chester County water systems, and its growth-by-acquisition strategy was born.
By 2003, Philadelphia Suburban Water Company no longer described the business. In January 2004, it adopted the name Aqua America.
To DeBenedictis, it was more than an aesthetic change; it announced the company’s arrival on the national stage.
“It’s how we got our name out there to the regulators and government officials in the other states,” he says. “Ten years ago, Philadelphia Suburban fit us perfectly. But soon we realized it no longer affected our goals and vision. So we changed it, and now the name reflects that we are in the water business, and we are throughout a large part of America.”
DeBenedictis says that as a company grows and changes, it is important that the name identify it accurately. Don’t allow sentimentality to rule your company’s name; if the name no longer reflects the company, find one that does.
“Our name change sent a very important message to the regulators, that we have the benefits of a large, domestic water company, but you get the benefits of it being locally run,” he says.
HOW TO REACH: Aqua America, http://www.aquaamerica.com/
Chambers, president and COO of NCI Building Systems, plays it close to the vest when seeking out growth opportunities. He’s not looking for the next big paradigm shift; he’s looking for a way to maximize NCI’s presence in its core businesses of metal coil coating, building components and engineered buildings, which he accomplishes through a combination of organic and outside growth.
“We are very knowledgeable and very good at our main groups of businesses,” says Chambers. “We stick to the knitting, to use that clich.”
NCI’s leaders focus on the company’s closely defined market, looking for new product opportunities, new product channels and, above all, acquisitions that fit the company’s criteria.
“It’s trying to find companies that fit our model and can benefit from integration,” he says. “We want to capture more synergies, more advantages.”
NCI has made 14 acquisitions and done a merger since the company’s inception in 1984. The most recent was the acquisition of Robertson-Ceco, a Chicago-based manufacturer of engineered buildings, completed this past spring.
NCI’s growth philosophy has produced substantial results. The 5,200-employee company posted $1.13 billion in revenue in fiscal 2005 and is on pace for $1.4 billion this year, solidifying it as a leading company in its industry.
In NCI’s case, Chambers usually lets acquisition opportunities come to him.
“We have people who come to us with ideas, whether they be internally, whether they be bankers we deal with,” he says. “We set parameters for what is acceptable from the standpoint of our strategy, from the standpoint of our geographic mix and from the standpoint of how it fits into what we do best.”
Regardless of whether a company seeks out acquisition opportunities, or lets the opportunities come to it, Chambers says a thorough research job is paramount. A company that doesn’t do its homework risks getting burned financially.
Chambers says that at NCI, the due-diligence team spends a lot of time combing through an acquisition candidate’s practices.
“We have a very long due diligence list that goes through everything from understanding their customer base, understanding their purchasing, their manufacturing processes, and things like how they manage their business, their approach to the community, to environmental issues and safety,” he says.
To Chambers, it is important to find a company that is not just a good match for NCI but that can provide one-half of a mutually beneficial relationship.
“Not to sound arrogant, but we have to feel that the company is as committed to things like community, environment and safety as much as we are,” he says.
Particularly on the issues of environment and safety, Chambers says that if an acquired company and the acquiring company don’t fit together well, it can open up a Pandora’s box of liabilities later on.
To try to avoid those problems, NCI’s leaders look at research and ask many questions, compiling a large file on the company. Usually, those questions spawn more questions. Chambers says it’s not until every question can be answered in a satisfactory manner, and the asking price is right, that a business’s leaders should decide whether to move forward.
He points to the fact that NCI turns down far more acquisition opportunities than it accepts.
“Frankly, we might look at 10, 15 or 20 deals and only pull the trigger on one,” he says. “We look at a lot of companies before we make a large acquisition, and I think you have to look at a small acquisition in the same way.”
Once NCI purchases a company, the focus shifts to integrating the acquired company’s culture and practices with those of NCI.
Chambers says the first lesson that business leaders needs to learn about conducting an acquisition is that their company isn’t the be-all, end-all of the industry. He echoes the advice of other established business leaders: The acquired company was attractive to you because it was doing something right, so it would be short-sighted in most cases to simply wad the acquired company’s practices up and throw them away without giving them so much as a glance.
NCI takes a best practices approach to integrating an acquired company’s culture into its own. Chambers points to NCI’s acquisition of Robertson-Ceco as an example.
“We found that some of their systems were superior to ours, so we’re migrating their systems into our company,” he says. “We find that some of their methodology is better, and we’re also providing them with some of the things we do better. So it is definitely a best-practices approach.”
Chambers says those in charge must maintain an open mind after acquiring a company and must be willing to learn from the acquired company.
“I’ve been on both sides of the acquisition equation,” Chambers says. “I’ve been in acquisitions where we’ve taken a ‘my way or the highway’ approach, and I can tell you that here, we want it to be much different.”
The willingness to integrate on equal terms is part of what has made NCI stand out to customers and investors alike.
“Our performance, compared to our competitors, has always been viewed as the top by Wall Street, by the banks, by our customers,” he says. “It’s this notion of always looking to see if you can learn something else. That comes through in the kind of genuine approach we have, the way we speak to companies we acquire, the way we behave, and they can see that they can have an influence on improving us.”
The open-minded approach is something Chambers tries to have permeate every level of NCI. He traces the company’s ability to accept outside practices to years of communicating the approach as part of the cultural values of the company. From the outset, employees are taught to be on the lookout for ways to improve the company.
“It’s so fundamental in the way we go about business every day,” he says. “It’s just sort of evolved over the years. It’s not really a mandated, top-down thing. It’s just a behavioral characteristic that has developed over decades. Frankly, we’re very intolerant of not being that way.”
Chambers says a company that is not open to outside ideas and concepts, especially during a time of change, can become detached from clients and customers, easily fall behind the cutting edge and ultimately write its own end.
He sums it up in one word: arrogance.
“It’s easy to become arrogant and insensitive, to think that because you’ve been successful, you imagine you will always be successful in everything you do,” he says. “That type of arrogance is something we try to nip in the bud.”
NCI nips arrogance with intervention. If Chambers or other company leaders see an attitude that is not focused on the betterment of the company, be it from an individual or a group, they pull those people aside and work with them.
Chambers says communication, maintaining the clarity of the company’s vision, is the most important aspect of keeping everyone on the same page.
“It’s saying it, putting it in writing, making sure the person understands what it is we’re trying to achieve,” he says. “We work hard on that. We want a person who needs help to ask for help, but if we cannot get that person back on board, we ultimately might have to separate them from company.”
Maintaining an open-minded approach during an acquisition extends beyond integration of practices. Chambers says a business leader also needs to be able to accept and sort through mounds of feedback in the immediate aftermath of a major change.
NCI has formal feedback channels in place, chief among them a quarterly review process that takes into account all the moves the company has made over the previous three months.
Chambers is also a proponent of informal, face-to-face feedback.
“We visit our plants,” he says. “We cycle a lot of our employee feedback into our reviews.”
The feedback from the ground troops gives management a first-person view of the effects of an acquisition, both what is going right and what needs to be changed.
“We learn things about our production and safety metrics,” he says. “We find out about near-misses of accidents, things that didn’t maybe produce an injury or accident but look like a systemic problem. We intervene in that just as quickly as we can to try to find the root cause and deal with it.”
Chambers says NCI’s leaders gets plenty of short-term feedback from reviews and by visiting company plants, but long-term reviews also paint a useful picture of how the company has adapted to a change over several years.
“One thing that is important is going back and checking in a year or two later,” he says. “You need to see if the assumptions you made and the things that you thought would happen have happened.”
Much like during the acquisition, a leader needs to be able to swallow his or her pride and take an objective look at a long-term review of an acquisition.
“You have to not be afraid to admit if something didn’t go according to plan,” he says. “At NCI, the analysis of an acquisition is kind of an ongoing thing. It’s not a one-shot deal.”
Keeping acquisitions a fluid, adaptable process is extremely important, Chambers says. Variables change, markets rise and fall, the unforeseen occurs, and leaders have to be able to step back and take a clear mental snapshot of where the company is positioned at any given time, then react accordingly.
“It’s not that we’ve made the model, we’ve pulled the trigger and now we’re done,” he says. “We constantly recycle back to see whether we’re performing to plan and whether our assumptions were valid.”
HOW TO REACH: NCI Building Systems, www.ncilp.com
The wireless e-mail device allows him and the company’s senior management team to bounce ideas off each other no matter where they are. That communication spawns ideas, which in turn become projects that help the company evolve in the changing automotive marketplace.
Leuliette’s insistence on the constant motion of ideas has produced eye-catching results for Metaldyne. The Auburn Hills-based producer of engine and chassis components netted worldwide sales of almost $2 billion last year, due in large part to accounts with many of the world’s largest automakers.
It would be easy for a company with the track record of Metaldyne to rest on its laurels and continue to produce the same parts for the same companies. But Leuliette says in the auto industry, which can be tumultuous, that is a recipe for disaster.
He demands his company stay adaptable and remain on the lookout for the next big wave. It’s the only way Metaldyne will be able to continue flourishing in the coming years and decades.
For Leuliette, it all starts with a vision and figuring out how to make that vision a reality, even if it means some initial hand-wringing among Metaldyne’s 6,500 worldwide employees.
Five years ago, Metaldyne committed to opening up engineering centers in Japan, Korea and China. It was a move aimed at making headway in the growing Asian market, but employees at a Metaldyne facility in Indiana became concerned that the new commitment to Asia meant that jobs and money would be leaving the United States.
Leuliette said those workers needed to be refocused on the company’s vision.
“The people in Indiana said, ‘I hear word that it sounds like money is leaving Indiana and going to Asia,’” he says. “And we said, ‘No, if we are a better supplier to Toyota, to Hyundai and Honda and Nissan, we will get business from them around the world, including in the United States.’”
Leuliette says the employees were skeptical at first, but the plan quickly swung into action. Now, the Indiana plant is the only plant that produces connecting rods for Hyundai in North America.
“Now, they’re believers down in Indiana,” he says.
The decision to move Metaldyne into Asian markets was rooted in the knowledge that the industry was shifting in that direction, and Leuliette didn’t want his company to be left behind. But beyond that, it was rooted in one of Leuliette’s principal beliefs as a business leader.
“CEOs don’t get measured in quarterly results in the first year or two of their tenure,” he says. “It’s in the third, fourth, fifth year of their tenure, are they playing out their game plan, the outline.”
CEOs are in place to give a company a long-term vision and to modify that vision in a manner that best suits the company.
“It’s not that the strategy has to be so rigid that events of the world don’t modify it,” Leuliette says. “But your strategy should be such that it’s not so dependent on $2-a-gallon gasoline or on General Motors recovering to 50 percent market share. It has to be realistic.”
An effective business strategy is born through taking constant stock of a company’s variables and bringing the senior management in on the decision-making process, he says. If you don’t involve your management team in the process, it can short-circuit the entire plan.
“A decision is not something where you walk into a room and say, ‘This is the decision, and it’s A, B or C.’” Leuliette says. “It’s rather that we talk about these issues, where we’re coming from, and you bring them along. I think a leader needs to sell his ideas. He needs to sell the fact that he’s got confidence in a plan and strategy, and bring those people along with him.”
To help bring people along at Metaldyne, Leuliette lets his managers find their own solutions to a problem or issue, even if he has a good idea of what the answer will ultimately be.
“I’ve been known to take two or three of my strongest managers, say, ‘Look, there’s three paths here, three choices. Each one of you take one, come in next week, and take us through the pros and cons,’” he says. “That way, you begin the dialogue. You talk about it a lot.”
One of the keys, he says, is to open as many eyes as possible to an idea before the proverbial bullet is fired and the decision is made, because even with volumes of input, the ultimate decision always falls to the company head. And the leader must be prepared to act in any situation.
Leuliette has faced his share of tough decisions at Metaldyne, but if the research has been done, the answer is usually clear.
“The right answer is almost always the obvious one,” he says. “The challenge is understanding and coming to grips with the ramifications of making that decision. It could be a business decision, layoffs, risking the company. The challenge is getting the team and the organization prepared for the ramifications. But that’s leadership.”
Outside the comfort zone
Metaldyne is a privately held company, but it has public debt, so bond analysts track it.
When they make presentations at bond analyst meetings, Metaldyne’s leaders always ask the same question: “Do you know who our competitors are?”
Analysts can rattle off its competitors in European markets, but the same question asked about Asian markets draws blank stares.
“That’s because we, as a culture and in business, have grown up with a North American/Eurocentric model,” Leuliette says. “We’re more comfortable going across the Atlantic than the Pacific.”
For Metaldyne to continue growing, that status quo had to be shattered. The company forced itself to go to Asia, sending team members to Japan, China and South Korea for offsite meetings. Leuliette says venturing across borders and dealing with new companies in emerging parts of the world is the only way a business can truly grow to global standing. And that requires bold leadership willing not just to stamp out transactional relationships in new markets but to explain in detail what they can offer to the market.
Metaldyne carved out an initial engineering and sales presence in Asia five years ago, but to Leuliette, that wasn’t nearly enough. Potential customers needed face-to-face interaction so they could see what Metaldyne is all about.
A major emerging client for Metaldyne is Hyundai, based in South Korea. Hyundai leaders knew that Metaldyne could offer them parts for their cars, but Leuliette wanted them to know what it also offered in terms of a vision and business partnership. So some of the company’s leaders set out on a road show, halfway around the world.
“How do we get Hyundai to know us better?” he says. “We’re going to build an engineering and sales center there. But we want them to know us. It’s easy to stop in on our way to work in Michigan and talk, but how do we do that in Korea?
“And we said, ‘Let’s package all of our technologies in Korean, put some of our Korean employees in place and train them, and we’ll go over there with them. We’ll give a presentation to Hyundai of all of our capabilities, with display stands and cutaway vehicles. We’re going to show them who we are.’”
Leuliette would have been happy if 100 or 200 engineers had shown up. Instead, 1,400 engineering and salespeople from Hyundai showed up, and the presentation went a long way toward solidifying Metaldyne’s reputation with the automaker.
“Hyundai will be one of our largest customers by the end of the decade,” Leuliette says.
Leuliette says that staying in a predetermined comfort zone is a sure recipe for business failure. Denying that evolution is necessary is a major symptom of a company unwilling to take the first, uncomfortable step toward a new market.
“Denial is a disease of change, and arrogant denial is a fatal disease,” he says. “We’re here knowing that whatever strategy we’re working on has to evolve and change as the world changes.”
It’s a reason why, when seeking out a new manager to help direct the company, Leuliette wants an open-minded person who is adaptable.
“We want people who have a grasp of who they are and what values they bring to the table,” he says. “People who are not uncomfortable about being stretched. This is not a place where you come for the status quo. This is a place where you come to be a part of changing the industrial fabric of this industry and this country.”
Leuliette says not every business idea will succeed as well as Metaldyne’s venture into Korea. Business leaders must anticipate some degree of failure, and to an extent, must embrace it when it occurs.
“Not many CEOs are 20 or 30,” he says. “Most are 40 or 50, and with good reason. They come to their job with 25 to 30 years of scar tissue built up in business. That scar tissue can either prevent you from taking risks, or it can be the basis of the data sample you use to take risks.”
A CEO with decades of business experience has learned his or her share of lessons. They either find out the status quo is a dead end, or have so thoroughly internalized the company practices over the years, that they can’t think of any other way to act.
“I think a lot of companies take the risk-taker and keep pounding them down and sanding them over so that by the time he gets up to the CEO’s job, he sits back and says, ‘I’m a product of this company, and all I know is what we’ve done before,’” he says.
At Metaldyne, Leuliette tries to take the psychological scar tissue that builds up from run-ins with failure and turn it into something positive for the company.
“You fall off the horse, then get back on the horse,” he says. “You take risks knowing some of them won’t pan out, but that’s not a reason to say, ‘We won’t take any more risks.’”
Leuliette says that risk is inherent in business, and rather than fear it, CEOs should learn to accept it and use it to their advantage. The worst thing a company can do is crush the entrepreneurial spirit of a risk-taker, so long as the person’s risks are grounded in research and facts.
“You can’t penalize someone for taking risks,” he says. “Now, if someone makes the same mistake two or three times, it might be time for a talk. But it’s a culture, and as a CEO, you have to instill that culture.
“You can’t scold people for taking risks and failing from time to time. Otherwise, you will start to create that environment where the willingness to take risks goes away.”
HOW TO REACH: Metaldyne, www.metaldyne.com
She and her husband, Frank, had just purchased the Los Angeles Dodgers from NewsCorp., and within a month of starting the purchase process, Jamie McCourt, a Maryland native and lawyer by trade, was thrust into the center of one of the most well-known franchises in all of sports.
She assumed the president and vice chairman’s role, making her the highest-ranking female executive in Major League Baseball.
“I can’t even express how overwhelmed we were,” she says. “It was a tremendous opportunity.”
But the walk in the clouds was brief. Soon after the purchase, the realities of the business began to set in. McCourt says it became apparent that she and her husband had bought a team in need of help.
She says the franchise was bleeding money to the tune of $50 million a year. The Dodgers’ normally high attendance rate was dwindling, and Dodger Stadium, long regarded as one of the jewels of the sport, was beginning to show signs of age.
To prevent the Dodger organization from slipping further into disrepair, it needed new direction. Like any good business team, McCourt and her husband, chairman of the Dodgers, sat down with the organization’s management and assessed where the Dodgers were and where the club needed to go to restore itself to greatness.
Initial management meetings produced three broad goals for the organization, which Forbes estimates has revenue of $189 million with a franchise value of $482 million.
“We want to field a championship baseball team, year after year,” she says. “We want to make Dodger Stadium and the Dodgers the most fan-friendly experience in all of sports, and we want to expand our involvement in the community.”
Producing championship baseball is left to General Manager Ned Colletti and the baseball operations people. Off the field, however, McCourt took the reins of a massive stadium renovation project, cross-branding opportunities with team sponsors and community initiatives.
It was uncharted waters for the Dodgers in many respects. Some of the team’s practices were well behind the times when the McCourts took over.
“If you could believe, we didn’t even have credit cards in use at Dodger Stadium when we started,” she says. “We didn’t have Ticketmaster.”
Dodger Stadium has received a technological upgrade with the addition of credit card capabilities and Ticketmaster services. The park itself, opened in 1962, will also receive a facelift in 2005, the McCourts announced a $40 million renovation plan that includes the replacement of every single seat in the park. The park’s offices have been renovated, and parts of the turf and warning track have been replaced.
“We also just added the loge terrace, which is another space for people to arrive early, stay late and get out of the heat of the game,” she says.
The cosmetic changes are the ones most evident to the several million fans who spin the turnstiles at Dodger Stadium every year, but it’s only the tip of the iceberg. Embedded in the McCourts’ turnaround plan is a strong belief that the Dodgers are selling not just the experience of watching the home team in person but also quality family time.
“I have four boys, and I can ask one of them ‘How was your day?’ over dinner, and I might get a two-word response,” she says. “I ask them at a ballgame, and we’re talking about baseball, and pretty soon they’ve said a lot more, like they don’t even realize they’re talking to me.”
The pursuit of a family atmosphere steers the Dodgers’ leadership both in how it relates to its employees and how it markets the team.
McCourt says creating a family atmosphere starts at the top of an organization. If leadership values employees as people, the effect will reach down the organizational ladder and find its way to the customers.
After establishing the three basic goals for the organization as the “how,” Dodger leadership began educating employees on the “why.”
“We could not take for granted that all of our employees knew the franchise was losing $50 million a year,” she says. “So educating employees is important first and foremost so that you all understand where you want to go.”
To McCourt, the education of employees begins with a strong emphasis on communication, and communication begins with a strong management team.
“I spend an awful lot of time with our management team,” she says. “We meet several times a week to talk about everything that’s going on collectively so that we all understand how our departments need to be integrated.”
McCourt refers to herself as more of a coordinator and collaborator than a delegator. Her leadership philosophy is to keep tabs on the progress of the club’s senior managers but not to interfere in their day-to-day work. And she says it’s important to remember that different management styles work for different people.
“What works for me might not work for our government relations person or our sales and sponsorship person,” she says.
One thing she does insist on is constant face-to-face communication. Personalized communication helps employees understand where they fit into the organizational framework. Employees who understand their roles in an organization feel like they can contribute and are more apt to take pride in their roles.
“Whether it is the ticket taker in the parking lot, the ushers, the guys on the field, the coaches, front office, all of us have to be pulling in the same direction and contributing so that we do achieve these goals,” she says.
When it comes to communication, McCourt jokingly refers to herself as the “queen of casual.” She is big on lunch and coffee with employees and business partners.
“I think you communicate really well over food,” she says. “People also come and sit with me in the owner’s box during games to talk about what they’re doing in their lives, be it business or personal.”
Knowing the personal lives of employees is extremely important to McCourt, and she encourages Dodgers employees to speak to her about what is going on outside of work.
“It really makes you understand what they are going through in their lives, and it helps you understand where they are professionally,” she says.
Promotional opportunities tend to fling themselves at you when you own the Dodgers.
“I can be out to dinner and someone will come up to me and say, ‘We really want to have a relationship with the Dodgers. How can we do that?’” she says.
But even though the Dodgers’ name creates a wealth of marketing opportunities for the organization, keeping your eyes peeled for the right opportunities is a marketing must, as it is with any business.
“You have to be open-minded that you could get an opportunity from anywhere at any time,” she says.
McCourt has tried to tie the Dodger name to other well-known companies with a series of cross-promotional campaigns. Many of the companies are long-standing partners of the Dodgers, such as Coca-Cola. But McCourt and her staff have also been approached by companies growing in popularity, such as California Pizza Kitchen.
McCourt says Dodger Stadium is currently the only sporting venue where CPK sells its products.
Pizza is among the usual sponsorship suspects when it comes to sports, along with beer, soft drinks, athletic shoes, apparel and related items. Those products cast a pretty wide net if you are trying to reach a young, male demographic.
But what about reaching the mothers, daughters and sisters of those highly sought-after young male customers? It was a question McCourt posed to others in the Dodger organization, and it helped lead the team to begin a marketing campaign that is focused on the team’s female fans.
McCourt says women and girls make up about 40 percent of the Dodgers’ fan base.
“For us not to cater to them would be silly,” she says.
Under the McCourts, the Dodgers have ramped up promotional efforts aimed at connecting the Dodgers to products their female fans use. One such cross-promotion involves cosmetic manufacturer Smashbox, which recently handed out 50,000 tubes of lip gloss at a game.
“Smashbox is now our first major nontraditional sponsor,” McCourt says. “They advertise on our (scoreboard). They are promoting our ‘kiss cam’ between innings. It’s really fascinating to see how you get these sponsors and how you create these opportunities.”
Along with product tie-ins, the Dodgers now run clinics aimed at enhancing the baseball knowledge of female fans. Infielder Jeff Kent attends all the clinics and has become a kind of spokesman for the women’s marketing campaign, which McCourt terms a “women’s initiative.”
The Dodgers have also increased marketing efforts to the vast array of ethnic groups in Los Angeles. With a history of promoting high-profile minority players such as Fernando Valenzuela and Hideo Nomo, McCourt says the strategy goes hand-in-hand with the Dodgers’ multiracial and multicultural philosophy. She says if fans see players of their own ethnicity on the team, they will be more likely to embrace the team as their own.
It’s a philosophy rooted in the franchise’s Brooklyn days, when players such as Roy Campanella, Don Newcombe and Jackie Robinson drew African-American communities to call the Dodgers their own.
“We are pretty lucky,” McCourt says. “We have players who come from all these different communities. Pick a country, we probably have a presence from there. We have a huge Latino and Asian presence. We were the first team in the Dominican Republic, and we still have an academy there.
“We are positioned to be known internationally.”
A woman’s perspective
As the highest-ranking female executive of a Major League Baseball franchise, McCourt is treading where few women have ever gone in the world of sports. She tries to impart what she has learned in that position to her students at UCLA, where she teaches a women’s business class.
“The message I believe in imparting to other female business leaders is to rely on their skill sets,” she says. “They should leverage their skill sets and learn to have confidence in their decision-making abilities.”
McCourt says she tries to get her students, and other up-and-coming female business leaders, to follow their own path as opposed to simply following in her footsteps.
“I don’t think they need to model themselves after someone,” she says. “I just think they should understand that there’s all sorts of people and all sorts of different skills. If they are really good at understanding who they are and having confidence in what they do, then they should lead the way.”
McCourt acknowledges that women have had a difficult time breaking through and achieving success in some fields, professional sports among them. Under her leadership, the Dodgers are helping to reverse that trend a number of high-ranking team positions are held by women, including the assistant general manager, chief financial officer and vice president of communications.
“It would be nave of me to pretend women aren’t sometimes made to feel as if they shouldn’t be in certain areas because of their gender,” she says. “There are all sorts of ways to overcome that, and that’s certainly by performance and achieving your metrics.”
McCourt says business leaders should always keep in mind that diversity helps a business thrive. Different people bring different skills to the table, increasing a business’s ability to adapt and react to different situations.
“It’s important to know that businesses benefit from diversity,” she says. “Businesses benefit from having a constituency that has a diverse skill set. At the end of the day, women bring that to the table.”
HOW TO REACH: Los Angeles Dodgers, www.dodgers.com
Born: Hawthorne, Calif.
First job: Working part-time for the YMCA
What is a universal truth you’ve learned about leading a business?
Absolutely, positively, without question, the No. 1 thing is putting people first. You have to do the right things to attract, retain, develop and grow your people.
If you don’t get the people thing right, everything else is really hard. If you get the people thing right, other things are much easier to accomplish.
What is the best business lesson you’ve learned?
From my father [Chester], who taught me to be relentless, tenacious and persistent in terms of making things work. You are going to get a lot of curves thrown at you, a lot of things are going to go wrong, a lot of people are going to try to make you fail.
You have to believe, keep pushing forward and making things happen and have a no excuses attitude.
What is the most important lesson a CEO needs to learn?
Credibility is key. It’s critical that people be able to trust you and believe you.
You need to be very sensitive to that. Without that, it will be very hard to get anything done. With it, you can really move mountains.
The agency will handle the pre-screening, background checks and testing, then deliver to a business a small group of thoroughly screened candidates who are well-matched with the available position.
Carol Doering, HR director for CORSA Performance, an exhaust systems manufacturer that relies heavily on general labor and seasonal employment, knows a thing or two about working with third-party employment agencies. She’s been using them for about six years, ever since a general labor job advertisement drew 25 people to the CORSA lobby for interviews in one day.
“At that point, I thought it would be advantageous to start working with an agency,” she says.
The 2006 Workplace Practices survey by Smart Business and ERC shows that employment agency services are still sought by many companies. For the sixth year in a row, the companies surveyed say recruiting and keeping great employees are the two biggest challenges they face. The survey shows that nearly 92 percent of companies do reference checks before hiring, although that is down 5.5 percentage points from a year ago and is the lowest level in five years.
Contracting with an employment agency can make life easier for an HR director, but it isn’t as simple as dumping all your sourcing worries into someone else’s lap. Doering says that smart HR directors treat an agency like another customer, but instead of selling someone on your products or services, you are selling your company itself.
“It’s basically selling the agency on selling your company to candidates,” she says.
At CORSA, Doering brings representatives from area employment agencies in for periodic factory tours. It’s an opportunity to show the agencies the improvements that have been made in the factory and to solidify the company’s reputation as a clean, professional place to work.
“What we try to do is bring the agency out, take a look at our facility, take a look at the jobs we have and get an overall picture of the company,” she says. “Then, they can let prospective workers know what kind of environment we have at the company.”
Doering is a one-person HR department responsible for keeping CORSA staffed. The company’s numbers fluctuate seasonally, but on average, it has about 125 employees, 9 percent of whom are temporary.
She says because CORSA is a smaller company that doesn’t have a highly automated HR department, an employment agency can recruit faster and more efficiently than she could alone.
But for any company with tight budget constraints, hiring an employment agency is always going to be a time versus money question Is the convenience of an outside agency worth the cost, or is it more prudent for the HR department to perform all the sourcing services itself?
Doering says the decision is based on factors including number of employees, turnover, HR resources and money. In CORSA’s case, the company’s leaders think it’s worth it to allot money for external sourcing help. But that’s not a given year to year, she says.
“Since we’re a small company, the ownership might sometimes want to revert back to the old way and put an ad in the paper,” she says. “But, in their eyes, contracting with an employment firm is still a cost-saving measure right now.”
How to reach: CORSA Performance, www.corsaperf.com
Born: Jullundur, India
Education: Bachelor’s degree, Banaras University, India; master’s degree, Wilkes University. Recently completed a leadership development program at Harvard Business School.
First job: Management trainee
What are some universal truths you’ve learned about leading a business?
People make the biggest difference. Don’t just work hard, but work smart. Be passionate.
Whom do you admire most in business and why?
Six months ago, I wouldn’t have had an answer. But since then, I have met (Spanish banker) Emilio Botin. I admire him so much.
He walks the talk. He built his bank to the ninth-largest bank in the world, and 25 years ago, it was a small bank. We have such similarity in values and principles.
Whom do you admire most outside of business?
Certainly, Mother Teresa. I had a chance to go to her orphanage, and you talk about commitment. She was so dedicated to helping others.
I wish I could have 25 percent of the passion she developed working with the some of the most unfortunate people in the world.