Dan Rodriguez is an enabler.
The founder, managing partner and CEO of Veredus Corp. wants people to succeed at his staffing company, so he invests in their training and development instead of forcing them into a sink-or-swim situation.
“It’s a two-way investment,” he says. “They’ve elected to come work for us. In turn, we’re going to make an investment of time and development to give them an opportunity to succeed.”
Rodriguez’s approach to his employees has improved retention at Veredus, which earned $38 million in revenue in 2006.
Smart Business spoke with Rodriguez about why training your employees is worth the investment and why you should really think twice about adding that new wrinkle to your business.
Q. What major pitfall should business leaders avoid?
You have to focus on what you know how to do. We’re a staffing company. Our core competency is going out and finding qualified individuals.
We have relationships with qualified individuals that can fill jobs. We have relationships with qualified companies and managers at those companies that will give us jobs so we can place those candidates.
Sometimes, I’ve seen folks creep out of what their core competency is. They try to do project work, or they try to do outsourcing, or they try to do software, or they try to do training.
We stick to what we know.
We do what we do, and we feel like we’re really good at it. We don’t really creep too far outside of our box. Because chances are, if you’re looking to go out and do something else, there’s probably somebody else in that space that’s already been doing it for some time and that is probably pretty good at it. So we stay away from that.
Q. How do you avoid straying from your core competency?
We remind folks every day of who our customers are.
Our customers are our candidates who are looking for jobs, our consultants that we have on assignment and our clients. Sometimes things happen, and you take the focus off the customer, and that’s not good.
You’ve got to be focused on all your customers all of the time ... or somebody else is going to come and take your space.
Q. How do you make sure everyone stays focused on the customer?
We talk about it. Our management team just came out of a management meeting here recently, and we talked about making sure all our folks are focused on the customer. You build internal processes where you’re touching all three of your customers on a regular basis.
We do feedback surveys with not only our clients but also our consultants who are on assignment and our candidates. We’re continually looking for feedback on how we can get better, how we can improve.
It’s part of our culture, it’s one of our core values and something that in our everyday discussions about business that we focus on.
Q. How do you decide which feedback to act on?
As a leader, I’m very introspective. I’m always looking at how we can make our business better. How can we differentiate; what can we do? A lot of our management meetings are centered around feedback we’ve gotten from our surveys, feedback we’ve gotten internally on how we can improve our processes and make sure that we’re doing things better.
I don’t know that there’s any formalized process for bringing some sort of feedback in and determining how we’re going to address it. But overall, as a management team, our mantra is focused on how do we differentiate, how do we get better, how do we make our company a better place to work?
That’s one of my standard questions as I’m going through my reviews with my internal people right now. I sit down with everybody in the company, or at least everybody in Tampa, and talk to them about their goals and last year and how they did and what they want to do this year going forward. Two of my standard questions are, ‘What can I do for you?’ and then, ‘What can the company do to make this a better company?’
We are definitely asking that question, and quite frankly, some companies I’ve worked for in the past haven’t even asked that question.
Q. How do you implement that feedback?
It depends on which of our customers the feedback’s coming from. Whenever we get feedback, we as a management team get together and determine how we’re going to address the specific issue that has been brought to our attention.
Many of the changes we’ve made big and small, from process changes to the way we do things on a daily basis have come from employees at various levels that made a suggestion. We looked at it; it made sense from a tactical standpoint, and we went out and implemented it. That occurs on a monthly, if not a weekly basis. It’s a regular occurrence.
HOW TO REACH: Veredus Corp., (813) 936-7004 or www.vereduscorp.com
John Gergel has ink in his blood. So in 1985, when he had the opportunity to purchase Watt Printers, he didn’t hesitate to buy one of Cleveland’s oldest printing firms.
The company was founded in 1893, and after three generations of family ownership, the Watts family was looking to sell, and Gergel and co-owner Craig Kellem were ready to buy.
“The gentleman who owned the company had all professional children: doctors, lawyers, bankers,” Gergel says. “They had no ink in their veins.”
After a hefty initial investment to replace much of the company’s obsolete equipment, Watt Printers has enjoyed steady growth. With Gergel as president, it has grown from a five-employee, $200,000 operation to an 85-employee, $14 million industry leader.
Smart Business spoke with Gergel about why you should cross-train your employees and how to build a positive reputation for your company.
Q. How did you develop a plan for the company?
It wasn’t really a plan. We bought a company that was totally antiquated, and having been in the business prior to owning this business, we knew what quality meant.
Basically, as we grew, we had to improve our quality by investing in more capital equipment obviously, and that’s how it came about. As we grew, we kept enhancing our capabilities, or technological equipment, and added more employees.
What helped us grow is a philosophy that we all have. As trite as it may sound, if a person spends a dollar with us, they get a dollar-plus in value back.
Q. How do you ensure that your employees are living your philosophy?
Our management team has set up complete employee guidelines. Everyone basically knows their job, and we do a lot of cross-training.
So there are people out there who not only know their jobs, but they know other jobs within the company. Everybody is kind of looking after everyone else on a constant basis.
It’s helped many times during vacation periods and during sick periods. We’ve had people with some major illnesses who were gone for quite awhile. If we had no one available who could do that job, we’d be in a real hurt. So that’s two of the many, many more reasons why we’ve done that.
It also keeps the challenge. Challenge is a big part of the company, from the floor sweeper right up through Mike [Nakonek, vice president of operations] and me. If you’re not challenged, you don’t have the ambition to come to work in the morning.
Q. How do you earn the respect of your employees?
Having been in the business all my life, and having been through nearly every phase of the business, we understand the business. All of our people do know that.
We highly value our employees and let them know that. That mutual respect we have for one another has been quite sufficient in leading this company.
Q. How do you show your employees that you value them?
When we have a major client or prospective client come into the shop, I basically introduce every one of them on an individual basis. That in and of itself lets them know their importance.
I tell a story at each station. I might tell them how long that employee has been with us, what kind of job he’s done, in most cases.
I believe that we are nothing without their expertise and technical knowledge. We even let our clients know that. But then again, we do have employees we can be proud of by the work they do, by the way they present themselves, even by the way they communicate with our clients when they’re in the shop. Letting them know what an integral part of the business they are has helped get their full cooperation.
Q. How do you find employees you can be proud of?
In our industry, there seems to be a lot of people looking. Unfortunately, there are a lot of good people out there that we just cannot hire because of our size.
We have a reputation, and people in the industry who are wanting to make a move you wouldn’t believe how many times we’re approached and asked, ‘Can you find an opening for us?’
There are a lot of good craftsmen out there who are qualified to work here, but we have to limit ourselves. We can only employ the people that we can afford to keep.
Even that is difficult because we do promote from within. We have apprentices who are working with our journeymen, and they know someday they’re going to be in the top spot. We’re more apt to promote from within rather than go from the outside.
Q. How does promoting from within increase retention?
With the cross-training, the constant challenge as well as knowing they can be promoted, they know that there’s no limit to how far they can go in this company. That’s our business philosophy. If they want my job, they can have it. We don’t limit anyone.
HOW TO REACH: Watt Printers, (216) 398-2000 or www.wattprinters.com
The corrosion control and protection company had gone through three CEOs in three years and the constant change in leadership had wreaked havoc with the company’s culture.
“If you came in and analyzed this company, you would have seen the issues within a week,” he says. “You don’t need 30, 60 or 90 days.”
Morale was low from a major reduction in the work force that occurred two years ago, its employees were unhappy, there was no direction, and Larkin needed to fix it.
From a conceptual perspective, the problem was simple. The trick was taking a disgruntled work force that didn’t trust its leadership and completely change its attitude.
Earn their trust
Executive indecision led Corrpro to become stagnant, along with a demoralized work force and a company culture that was on the skids.
Larkin needed to fix the overall attitude so the company could move forward, and it meant doing one thing: walking the talk.
“My predecessor and others in other companies, they can do the 60,000-foot stuff,” he says. “They have all the wonderful strategic plans, they understand and assess the marketplace, and they do all the analytic work. But they don’t take any action. Or they’re not willing to spend money and resources to take advantage of some of those insights. The key is to understand what the issues are. If there’s a big decision to make, make it as quickly as you can.”
Larkin prides himself on being the type of leader who puts the “execute” in “chief executive officer.” Shortly after beginning his tenure as president and CEO, he embarked on a trip to visit each of the company’s offices. He wanted to meet the people working for him, and he wanted to show them he was more than just CEO No. 4 in four years.
Corrpro has 21 offices in the U.S., seven in Canada, one in the U.K., one in Portugal and one on the way in China. Larkin visited employees all over the Corrpro network, donning overalls and getting out in the field with them to learn about the challenges they faced every day.
“When they see that, I think they see it’s real,” he says. “I told them what they see is what they get. There’s no façade here.”
Winning over the jaded engineers and corrosion protection specialists was an important step in reforming the culture at Corrpro. Larkin liked to introduce himself with, “Hello, I’m the CEO of the month,” and everyone would have a chuckle. But he was truly determined to earn the trust and respect of Corrpro’s more than 1,000 employees.
“Taking action is the most important thing,” he says. “Even if it’s the wrong action, it’s the best signal to the employees that you want to make significant changes. Even if you take the wrong action, you can change it. But no action is the worst.
“It frustrates people. The morale in a company goes down. But if you start making moves, and you’re communicating why you’re making moves, and you’re showing the benefits behind why you’re making the moves if you do that, you create a momentum that people get behind, and things start to click.”
The changes didn’t all come at once, but he made it clear that it was not business as usual.
“When you’re trying to change a culture, you’ve got to start with baby steps,” Larkin says. “We’ve got 1,000 employees worldwide, and I can’t be talking to 1,000 people every day.”
Larkin says the best way to get your message out is the trickle-down effect. For this to work, you need to be constantly communicating with your direct reports, and the message must be absolutely consistent. Those managers will then provide the exact same message to their direct reports, and the information trickles down to the lowest level in the organization.
It takes time because if there is a break in the consistency of the message or if too many people aren’t following along, you won’t be able to successfully change the culture.
Larkin spent time with employees several levels down the management chain to make sure morale was improving. Whether through trade shows, town-hall meetings or simply taking a small group of employees out for lunch, it’s easy to get a feel for employee morale.
“None of this is rocket science,” he says. “It’s how you deal with your family, your friends how you deal with life.”
Sometimes it just comes down to how you treat people. “If people will treat me with respect and how I want to be treated, then it’s easy to deal with them,” he says. “If you treat people nicely and you’re not always threatening to fire them or pounding your fist on the desk, and you use some humor and logic, generally, people will say, ‘Wow, this is a nice place to work. Why would-n’t I want to follow this guy?’”
When Larkin joined Corrpro, the company had no marketing department a shock to Larkin, who has an MBA with a concentration in marketing and strategic planning. Larkin sees marketing as leading the way and also sees the sales group as being a part of that effort.
“The marketing group should be the main aorta between the company and the consumer,” he says. “Without sales or marketing, we all go home.”
Corrpro tried to implement a marketing department before, but it failed. Larkin says if management decides to bring in a marketing department populated with outside marketing experts, it’s generally doomed to failure. That’s why he tried a new tactic at Corrpro, one that would establish crucial buy-in from all levels of the Corrpro staff.
Larkin rounded up his key operational people into one room and had a little educational seminar on the basics of marketing. Then, after consulting with his management group, he picked several operating engineers employees who knew corrosion and sent them off to sales management training. They became regional sales managers, and the cornerstones of Corrpro’s new sales and marketing effort.
Larkin says the move resulted in immediate buy-in from the operational staff, which fostered a true spirit of cooperation throughout the company.
“It’s because here is a regional VP who selected one of his operations guys to be the regional sales manager, and he doesn’t want to see him fail. He’s a friend of his, and so he will do everything he can do to make that person succeed as opposed to hiring somebody from outside and saying, ‘You don’t know our business, you don’t know our customers, and you don’t know our company.’”
Larkin says the actual training process went smoothly. The engineers, who already were experts at corrosion service, were able to easily grasp the structure and nuances of building a good sales team. Also, the newfound unity between the engineers and the sales and marketing team was good for morale and a boon to the struggling company culture.
The revamp of the sales and marketing branch of Corrpro was just another example of a change that was just waiting to be made. Larkin didn’t hesitate, as so many had before.
“They’ve been talking about changing the marketing and sales here for about five years,” he says. “We did it in four months. You can’t just wish for things to get better. You’ve got to try to do something that will make a change.”
Larkin calls himself a benevolent dictator. When dealing with employees or a management team, it is important to get their input and insight, but the final word always rests with Larkin.
“I’ve seen a number of CEOs who can do the fluff,” he says. “They can do the analysis, they can hire the consultants and have a lot of segmentation analysis and mission statements and all those things, but it’s just fluff. It doesn’t mean anything. Employees say, ‘Oh, this is the program of the month or the CEO of the month,’ and it does-n’t mean anything.
“You do have to have a vision, and you do need to have a game plan, and you do need to communicate it. But you have to do things. You can’t just wish things to happen. You have to take action, and the sooner you do that, the better.”
Larkin knows his way of doing things is working, and people are starting to come around to it. The company posted revenue of $157 million for 2007, up from $139 million in 2006. Net income was $2.8 million, up from a loss of $4.8 million in that same time period.
Corrpro’s board of directors asked him about the metrics he uses to measure the progress of rebuilding the company, and while he looks at revenue, turnover and margins, he says the most telling measurement is harder to quantify.
“We’ve been able to hire a bunch of people from our competitors,” Larkin says. “And we’ve been able to hire people back who were at Corrpro, left and now want to come back because they see it as a different organization.
“There are not a lot of metrics there; it’s just anecdotal, but when we have hired back about a dozen people who used to work for us and then left because they were disgruntled, that’s a pretty good indication we’re doing the right thing.”
HOW TO REACH: Corrpro Cos. Inc. (330) 723-5082 or www.corrpro.com
If you work for Bob Shallenberger, you’d better be able to think for yourself. Shallenberger, who runs Highland Homes Inc. with his partner, John Cavanagh, gives his employees full autonomy, and once the goal is set, he doesn’t want to have to OK your plan to accomplish it.
“I might do that for my 9-year-old children, not for a project manager,” he says.
The founding partners’ goal was not to become billionaires but to build the best company they could. And in doing so, they’ve grown Highland Homes from a $4 million company in 2004 to 2006 revenue of $16.5 million.
Smart Business spoke with Shallenberger about why you should think twice during the hiring process and why you always have to keep your agreements.
Q. What are the keys to your success?
The main key to our success is we outwork everybody. I learned a long time ago that you only get so many hours in the day. We can’t all work 20 hours a day. But what we can do is stretch the hours and stretch the day. We can multi-task to get a couple things done simultaneously.
One thing we’ve done is set the tone for working hard and finishing and completing tasks. We lead by showing everyone how to work hard, rather than telling everyone.
The guy who tells you how hard he’s working is trying to convince you he’s working hard. The guy who’s working hard doesn’t have to tell you because you know. Lesson No. 1: Look out for that.
Q. How do you build trust with your employees?
We have agreements with the people who work for us. Like, ‘I’ll go get lunch,’ or, ‘I’ll get this done for you next Wednesday.’ A lot of time, people will want me to look at plans or figure out if what they’re doing is right.
I may or may not have the time to do it, but if I tell them I’m going to get it done by a certain time, I have to keep that agreement because I want them to do the same for me.
If I let them down, I don’t have much of a leg to stand on later on, when I say, ‘Hey, you said you’d have this done Friday at 2 p.m., and here we are at 3 p.m.’ They can say, ‘Well, two weeks ago, you said the same thing, and you let me down.’
We encourage people to renegotiate before the deadline. If you’re supposed to have something done Friday at 2 p.m. and it’s Thursday at 1 p.m., and at that particular second, it dawns on you that there is no way you can keep that agreement, don’t wait until 2 p.m. Friday. Let us know right then and there.
Q. How do you create a strong company culture?
We walk the walk; we’re not hypocritical. I don’t make everyone wear Highland shirts all the time and then not wear one myself. On the flip side of the coin, nobody wears suits and ties here unless they want to. Then they’d probably get harassed.
The culture is a lot about where we’re going and how it is. We have a formal informality. People will say please and thank you, but they might be wearing Birkenstocks. You’ll never see anybody in here in a suit or tie or dresses or skirts, unless they went to court that day.
Q. What is the biggest challenge in running a business?
Hiring people because people are the hardest thing to investigate upfront. We’re a smart enough beast that we can hide emotions, we can lie and other people wouldn’t know sometimes.
We’ve learned not to try to hire rookies and make them into stars overnight.
On the flip side of the coin, if you can afford and have the patience to nurture or train someone who has no experience at all but has the desire, then you should. But if you need a great salesperson, if you need to turn out 50 sales right now, you’ve got to go hire one. You can’t take a chance. Whatever that costs, it costs.
Q. How do you make sure you’re hiring the right person?
We’re not so arrogant to think, ‘Wow, we’re really cool.’ They’re not just coming here because we’re really cool because they’re coming from somewhere else.
We always have the ‘chick’ analogy here; we laugh about it. If there’s a really hot chick and she’s going to go out with me, I’ve got to wonder. If I think she’s only coming on to me because I’m really cool, there’s something else to it.
Is it because she just got dumped by her boyfriend? What’s the deal? Because I want to know what the whole deal is, but if you just say, ‘Wow, it’s just because we’re cool,’ you’re lying to yourself.
There’s always another side. We’ve made some bad hires of people we thought were going to be phenomenal because we didn’t question some things we should have questioned.
HOW TO REACH: Highland Homes Inc., (314) 863-2845 or www.highlandhomesinc.com
James P. Carulas learned the hard way that sometimes the toughest decision you have to make is not to hire someone.
When Meaden & Moore, a 180-employee accounting firm, had major growth opportunities staring it in the face, Carulas, the president and CEO, was tempted go on a hiring spree.
However, he says it’s better not to hire anyone than to hire someone who isn’t a good fit for the company.
Smart Business spoke with Carulas about how to grow smartly and how to make sure you and your employees are on the same page.
Q. What are the keys to being an effective leader?
In order to be effective leaders, people have to be role models. We have to inspire, we have to communicate a vision and inspire that vision.
Effective leadership is sharing the vision, getting people to buy in to that vision of what the future can be, where we’re trying to go and having everybody pull toward that in a collaborative way.
Leadership isn’t, ‘I’m in a position; you’ll do what I say.’ Leadership is, ‘I believe in the organization; I believe in what we’re trying to do. I take personal responsibility.’
In effective organizations, the vision and beliefs are not static things developed in a strategic planning meeting and put on the shelf. They are reinforced constantly throughout the organization through the way they interact with the policies you make.
Q. How do you share your vision with employees?
It’s in the way you communicate it. First of all, you have to know — when creating a vision, you have to know yourself. Part of effective leadership is the leaders having an understanding in their personal beliefs and who they are.
If you understand who you are as an organization — what you stand for, who you are, where you’re going — then the other aspect is the people coming in have to understand who this organization is.
Q. How do you make sure your employees understand the organization’s direction?
To do that, you have to understand who they are and what they’re trying to achieve. If you have that insight, from then on out, everybody’s looking for verification of what you told them when they were coming in. They bought the idea, ‘I’m SBN, we’re a management journal that’s going to create practical, real-life information for people. We’re going to put best practices into our journal.’
When you came in, you were told what they were trying to do, and you bought in to that. After that, it needs to be communicated daily.
When we create a vision, it’s what we see the world looking like for Meaden & Moore 10 years out. There are all kinds of things that could impact us. But you have to start by saying this is what the ideal would be like. This is the impact we would like to make.
All our actions should be in concert with what we believe. If people believe it, they will be acting it out every day. From communicating it verbally to the activities you promote to the way you reward people to the way you celebrate people’s success — it’s all in alignment to what your vision and belief is.
Q. How do you get buy-in?
The buy-in comes because you’ve modeled it in your mind, you’re able to inspire others, you’re able to create, you’re able to get other people onto the train.
When you paint your vision, you have to understand the dynamics of all the people in the organization. We all work in the organization, so there has to be some commonality. You have to gain some understanding of the people who work in our offices and what they’re looking to do. I can’t say all of a sudden we’re going to be the firm that will provide services to NASA, when I have a bunch of people who don’t like science.
You have to know your people; you have to ask for feedback. Have an understanding of what motivates your people.
You have to get a feel for the landscape of your organization and the people that you have because a vision that is not aligned with a reality check on who you have is doomed to fail.
Q. How do you make sure your vision is being executed?
You have to convince a core group of people where we’re trying to go. Then you have to have them reinforce it constantly in their actions and in their communications. They can’t say one thing then do something else.
Everybody has to have buy-in, and it needs to be communicated on a number of different levels. The way you inspire it is understanding your people, and what their goals are, aligning that or taking that into consideration when you paint the vision, then you model it, then communicate that and share it. You get everybody to be part of it.
HOW TO REACH: Meaden & Moore, (216) 241-3272 or www.meadenmoore.com
Maureen Herrmann believes that knowledge is power, and she wants all her franchisees to believe that, too. Herrmann is co-founder and co-president of Ageless Remedies Franchising Co. LLC, which combines a medical skin care treatment center and a retail apothecary into each of its stores.
Herrmann and Jennifer Curtin, also co-founder and co-president, have developed a comprehensive training program that prospective franchisees must take to receive certification. Then it’s their job to pass that training down to employees.
Since founding the company in 1999, Herrmann and Curtin have grown it to 11 locations in five states with more than 100 employees, all of whom have a voice in the company.
Smart Business spoke with Herrmann about how to ensure your employees have a voice at your next management meeting.
Q. How do you train your leaders?
Jen and I started the original store; we learned a lot from having that business. We worked internally to where we felt we could create management by inspiring our workers to work as a team. One of the important things within that was to support ongoing learning and study for them in almost a mentor environment.
So if we brought someone on, we’d really want to mentor them and really create that teamwork and that learning environment. Everyone learns from everyone.
We also want our leaders to direct others in ways that make the brand more cohesive. So it’s important our leaders all incorporate a certain belief, value and knowledge of the brand.
We also support a lot of communication. Our leaders need to influence people by communicating and incorporating them into the team.
Q. How do you make the brand more cohesive?
They have to really understand the vision and what we like our leaders to share to understand our vision. Not everyone works together on a daily basis, all the employees from other locations or other regions. That’s why it’s important for us to come together through workshops or conference calls, so we can really keep to the core of the vision.
That’s what I mean by cohesion: The leaders at the top like to communicate together so the cohesion of the overall brand stays consistent.
Q. How do you make sure your message filters down through the ranks?
We have trainings and workshops at the management level on down. The leaders direct to the managers, and the managers are the ones who hand the information to the team. They work together.
It’s important that our managers work for the team and the employees not the other way around. This allows our employees to excel and feel as if they are part of the company. It is the managers in the individual stores who actually take the information, take our vision and incorporate it into each individual center.
We encourage them to motivate and empower the individual employees by mentoring them and [through] effective ongoing training to help them gain the new skills and keep the promises we put in place.
Q. How do you empower your employees?
Allowing them to have a voice within the system has empowered them. We include them in the decision-making process. That allows them to make a difference, and we really encourage feedback from them.
If they have concerns or ideas, we are very open to that. If there is a consensus from a lot of the different centers, we do make changes. If it’s an effective change, we will strongly consider it.
Q. How do you attract and retain quality employees?
We’ve put together an employee manual that creates a very positive working environment, and we expect our franchisees to follow that. The intense training and professionalism that our concept and vision incorporate really helps us to retain employees.
We definitely look at talented, empowered human capital as a prime ingredient of any organization, as far as success, and it is very costly. We understand that cost when we bring on employees and lose them.
So what we try to do from the front is create incentive, a very fair, aggressive pay scale and growth system for them to do really well in. Then we provide a good amount of training and skill to employees.
We’ve created this environment in such a positive way, that it would not behoove them to leave unless they want to relocate because the location was too far away. We have a strong retention rate for employees because we listen and we support them. We try to make it a win-win for both Ageless Remedies and our employees.
HOW TO REACH: Ageless Remedies Franchising Co. LLC, (404) 816-7550 or www.agelessremedies.com
Cedar Hames sometimes knows more about his clients’ business than they do. The president of Paradise Advertising & Marketing Inc. says that because his company is pushing messages and brands into the marketplace, his employees need to be aware of how the marketplace is changing.
It’s all part of the constant quest for knowledge at his $20 million firm. Hames tells his employees that it’s not enough just to keep up they have to stay ahead of the curve to succeed. For instance, Paradise used to create just print advertising for its clients.
Now, the marketing communications company has switched its advertising presence over to the online component of newspapers.
Smart Business spoke with Hames about the science of planning for growth.
Q: How involved in the day-to-day operations should a leader be?
I’m more of a big-picture person. If you have a motivated team, you shouldn’t have to be that involved in the day to day. If you hire bright, talented people and provide the tools for them, just step back and let them do the work they do best.
The biggest pitfall is for a CEO to micromanage. If you’re micro-managing, you’re not only not letting them do the work that they should be doing, but you’re not doing the work that you should be doing.
Each CEO should have a different approach to that, but in our case, one of my particular rules is to do strategic thinking and planning for our clients. We have a team that does that, but that’s a lot more important than me trying to edit a radio commercial.
Q: How do you develop and communicate a vision to your employees?
As far as the vision, it’s more a way of doing business than anything else. We’re in the communication business, and too often, businesses do not communicate to each other, much less outside the business. We try to open up that communication.
Of course, now with e-mail and such, you get more communications than you want sometimes. But we do try to have weekly or monthly meetings where we try to share knowledge with each other and get together.
They’re not gripe sessions. Sometimes we exchange necessary information; other times we exchange ideas. Communication is a key factor, along with the knowledge that if you’ve hired talented, motivated people, you don’t have to motivate them, you just have to provide them with the opportunities to do the work.
Q: How do you find those qualified employees?
In our business, we’re so specialized, it makes for a small universe of talent that is available to us. So, the best way to attract exceptional talent is to do exceptional work. If you’re doing that, talented people will seek you out.
Regardless of the area we’re working, we try to be very strategically based and very creative. That is the type of thing that attracts good people and keeps them motivated: the ability to be creative.
Q: How do you manage business growth?
We try to be proactive in the sense that over the past five years, we’ve had such substantial growth that we anticipate that each year we’ll continue to have that growth. In our staffing and in our office space and other areas, we try to allow for at least a percentage of growth and build it into our budget plans.
There might be a lot of CEOs out there cringing at that thought, but it’s worked for us. I’m sure a lot of them say, ‘When you get the business, then you staff up, and you make those arrangements.’ When we anticipate (the growth) and so far that has certainly been the case then we are already prepared.
Remember, with us, it’s not like we can run an ad in the paper and have a number of people lined up who would be qualified. It’s a specialized area, so we try to be proactive, especially in the staffing arena.
Q: How do you anticipate the amount of business growth?
We have different departments and a formula as to the number of hours for each person in a 40-hour week; we allocate what we call billable hours. That may not be actual, but it will reflect the cost of that person that we’re putting toward the client. We know from experience that a certain type of work for a client will take X number of hours per month times these 12 individuals.
We know that we anticipate growth at a certain percentage, and we can just do the math and make sure that we’ve got the people on board that can accept that business.
The reality is that we would love to have more business come in than we anticipated and rush out and try to attract some talented people. But it’s certainly smart to anticipate that growth. Since we’ve had such an ongoing record of bringing in business, it’s worked for us.
HOW TO REACH: Paradise Advertising & Marketing Inc., (727) 821-5155 or www.paradiseadv.com
When Timothy Hall, founder, president and CEO of Digital Blue Inc., was getting his fledgling company off the ground in 2002, he didn’t think he could spare five minutes to breathe, let alone enough time to develop a five-year strategic plan.
But he made the time, and it was time well spent. Hall’s start-up which partners with brands including Disney and American Idol to target the tween and teen audience with products such as cameras, microscopes and binoculars has grown into a $20 million company. And although its products and marketing strategies have changed since Hall created the plan, having it helped him deal with basic growth issues, such as capital, infrastructure and resources.
Smart Business spoke with Hall about how he’s grown his company by learning to suppress that impulse to tell everyone else what to do.
Q: What are some pitfalls CEOs should avoid?
When you hire new managers, there’s a tendency to tell them what to do. Don’t take your managers and tell them what to do. Ask them to recommend what they should do. Challenge and understand their recommendation and either support it or redirect them.
That’s pretty hard for CEOs to do. A lot of us are type-A personalities, who are used to ordering people and telling them what to do. We know it, we can do it faster ourselves, but we could certainly get the job done faster if we just tell someone what to do and they go execute what we asked. If that happens, you still can’t grow a company beyond a certain limit.
But if you start challenging them and mentoring the way you’re always looking at the subordinate for a recommendation, either the subordinate gets really good at that and becomes able to mirror the type of behavior you would do yourself, or they leave and you get somebody better.
Q: How do you make sure you’re hiring the best employees?
A major pitfall is when people don’t really dig in on the recruiting and really spend a lot of time in an organized process recruiting new people. When you’re busy in start-up mode or early growth mode, you’ll hire somebody who fits the bill and put up with that.
That’s a pitfall to be avoided because the people you put on the bus are the most important thing in the company more important than the product.
We won’t hire a senior person unless we’ve interviewed them three times in different settings. We spend a lot of time with their reference checks and really dig into what they’ve done in the past that suggests they can succeed at a job here. We want to make sure they’ve done this job somewhere else and can hit the ground running.
Avoid the pitfall of recruiting too quickly and grabbing the first candidate who does well in a one-interview setting.
Q: What is the biggest business challenge you’ve faced?
The big change from being an executive at a public company to being in a start-up, then going from a start-up to a rapid-growth company was a second set of challenges.
I had to relearn how to do my job when I went from being a line executive with a couple hundred people beneath me to being a line executive with just a golden retriever at my feet. I had to relearn how to spend money wisely and watch the cash.
Entrepreneurs who start as entrepreneurs do this better than guys like me who come from public companies to do a start-up.
Then when we go from start-up to growth to a rapid-growth company, you have to relearn how to professionally run a company. When I left the public company, I said, ‘I’m so glad to go to a company where everything’s efficient, and we never have to have meetings, and everything is decided on the fly.’
That works really well up until your first $20 million in revenue, but then you have to go back to structure. You have to go back to having meetings. You’ve got to have human resources and vacation schedules and all sorts of things you associate with traditional companies.
Q: How do you deal with those changes?
My team had to talk me into having regularly scheduled meetings again. I always though that was anathema. In a public company, you’d have these ridiculous staff meetings that nothing got accomplished in. In a small company, we’d accomplish 10 times more in the hallway.
But, once you start having two-, three-dozen people, that doesn’t work anymore. Communication doesn’t flow from hallway meetings, so you have to have meetings that have agendas and carefully constructed reasons for being there and minutes to distribute.
As long as you keep those efficient, you can stay lean and mean and move quickly. You don’t have to get bogged down just because you have meetings.
The challenge to the CEO is to adapt to that world and run the company in a professional way.
HOW TO REACH: Digital Blue Inc., (888) 800-0502 or www.digiblue.com
Fred Baker, president of Fred Baker Porsche Audi, made a name for himself as a race car driver, an automotive technician and a car dealer — but also as a humanitarian.
Baker loves being associated with what he considers the greatest cars in the world, but he also enjoys giving back to the community. The Western Reserve Historical Society has benefited greatly from Baker’s philanthropy.
Over the past two years, Fred Baker Porsche Audi has helped raise more than $430,000 for the WRHS. One of the major fund-raising events is the Barrington Napa Classic, hosted by the Barrington Golf Club in Aurora.
In 2006 and 2007, Baker presented the Barrington Napa Classic in association with the Cleveland Auto Dealers’ Association. The Barrington Napa Classic is a luxurious event that features a sampling of the finest wines from Napa Valley and around the world.
In addition to fine wines, delicious cuisine, live music and fireworks, the Barrington Napa Classic features a classic luxury car collection.
More than half of the $300 ticket price for the opulent event goes to the WRHS. In 2007, more than $130,000 was contributed to the historical society — an increase from $100,000 in 2006.
Baker also was the title sponsor for the popular and critically acclaimed exhibit “Diana, A Celebration,” at the Western Reserve Historical Society. The $100,000 sponsorship enabled the WRHS to host the exhibit, which displayed 150 objects from the ancestral home of Princess Diana’s family, including 28 of her famous gowns.
Baker was compelled to sponsor the exhibit because he was born in England and has always had great respect for Diana’s charity, spirit and devotion to others.
Part of the ticket proceeds from the exhibit went directly to the Cleveland-based charity Shoes and Clothes for Kids.
Fred Baker Porsche Audi also teamed up with the Cleveland Animal Protective League for the “Cayenne for Canines” program. Along with dog food, bedding and toys, the dealership provided the APL with a Porsche Cayenne for six months to deliver dogs for adoption.
Since 2000, Baker has supported the Audi Quattro Cup Golf Tournament, which has generated $7,000 annually for the WRHS and the Diabetes Association of Greater Cleveland. The dealership also helped raise more than $5,000 for the Big Brother/Big Sisters (Portage County) Hole-in-One Golf Tournament and also provided a car as a hole-in-one prize.
HOW TO REACH: Fred Baker Porsche Audi, (440) 232-4700 or www.fredbakerporscheaudi.com
One of Tony Quin’s favorite pieces of business advice is something he learned from his father, a British officer who spent four years of World War II in a Japanese prisoner-of-war camp.
“He always said business is just like being a warrior,” Quin says. “You put your armor on, and you gird your loins to go out every day to fight. It’s quite an honorable thing to do because you’re fighting for what you believe is right. Hopefully, nobody gets killed.”
Quin has taken that philosophy to heart with IQ Interactive, a 75-employee digital advertising agency that is pushing the limits of broadband Internet with its groundbreaking Web site design.
Smart Business spoke with Quin, CEO and executive creative director of IQ Interactive, about why CEOs need to act with certainty.
Q: What are the most important skills a CEO needs to have?
A leader has to have a strong vision and has to be able to articulate it really well.
Because if everyone doesn’t think the leader knows where he’s going, then how are they meant to know where they are going?
Another important characteristic is having at least a semblance of certainty. Knowing where you’re going is important, but it’s also OK to change direction as long as you’re doing it in the context of a plan.
Your employees are everything, and it makes people uncomfortable if you are reacting to your environment. When you’re predicting the future, obviously there’s no absolute certainty in that, but people do tend to gain confidence as your predictions come true.
Anybody who’s running a business is trying to guess the future. Your employees are relying on the CEO to be the best future-guesser around.
Q: How do you articulate that vision?
In regular meetings with the entire company, I reinforce our driving ideas. We try to get into an open and frank dialogue; nothing is off limits. Anybody can ask any question and get the truth.
When we get new employees, we want everybody singing from the same hymnal. You should be able to ask any of our employees, ‘What does IQ do? Where is IQ going?’ and get the same answer. So we work hard to ensure that’s the case.
It’s not about understanding by rote; it’s about getting them to understand it. I’ve done a number of videos, which we share with all of our new hires. They talk about everything from vision to values. That saves me the time of having to do that for every single person.
Q: What are some pitfalls CEOs should avoid?
The biggest one is you get out of touch with your people. You get so involved with the big picture stuff that you get out of touch with your people. The moment they feel like cogs in the machine, maybe your company needs cogs in the machine, but it doesn’t work in my world.
You have to feel accessible; you have to feel human. We have high expectations of ourselves, and we have high expectations of employees, but they’re not machines. We’re asking them to find the capabilities in themselves they don’t even know they have yet. We want our employees to be rising to their next level of their capabilities just as the company is. So they have to believe in themselves just as we believe in the company.
If you want loyalty and if you want enthusiasm and people’s creativity and drive and determination, you’re not going to get that by sitting in your ivory tower and saying hello to them at the company picnic once a year.
Q: How do you create a culture that reflects that?
Organizational culture is something that happens when you get the right balance between individual responsibility and rigorous process, which tends to tie people, give them less freedom. There’s a balance. You have to be careful not to put handcuffs on people.
Our culture comes from the nature of the people that we hire, the way we want them to interact with one another, and the freedom we give them to move out of their space.
We don’t want people who just put that one lug nut on the car and do that 3,000 times a day. We want people who understand how the whole car goes together and who feel free to go give a suggestion to the guy working on the wind-shield or the engine.
So, we encourage cross-disciplinary capabilities. We encourage technical people to be creative and creative people to be technical. It’s helpful and it empowers people.
The other thing about the culture is people need to see they can grow within it. They need to see that somebody comes in as a junior designer; if they do good work, they go to a senior designer, then they go to art director, then they go to senior art director, then they go to associate creative director, and so on.
HOW TO REACH: IQ Interactive, (404) 255-3550 or www.iqinteractive.com