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Des Walsh was looking for a boost. This boost would not come from one of the products offered by Herbalife Ltd., a 4,500-employee nutritional products company that seeks to help people live more active and healthy lives.

Rather, Walsh was looking to provide a boost to Herbalife’s mediocre sales figures. In the three years prior to Walsh’s arrival as company president in January 2010, net sales had been flat, lingering right around either side of $2.2 billion. In 2009, the company registered $2.3 billion.

“Our founder had a vision for Herbalife to become a $5 billion retail company,” Walsh says of company founder Mark Hughes. “That was a core vision he had laid out many years ago. For this new management team, as we embraced the value and vision of the company’s legacy, we adopted that same challenge. We worked with our leaders to try to figure out, how do we grow the business?”

Walsh had a bunch of places he could look to discover this elusive boost. Herbalife is a global brand that markets and sells its products through a network of more than 1.9 million independent distributors in 70 countries around the world.

The problem was that while some parts of the world were experiencing growth, others were not, and that’s what was causing the growth problem. Walsh needed to find a way to take the good ideas and strategies and share them with the people who could use the help. If it was done effectively, revenue would increase and Herbalife would move closer to meeting the goal that its late founder ran out of time to reach. It was up to Walsh to devise a plan that would get everyone back on track toward achieving that goal.

Look at what’s working

Walsh wanted to get inside the heads of his successful distributors and figure out what it was they were doing so well and why it was so much more effective at generating good results than the strategies that others were following.

“We looked for distributors that were achieving significantly higher levels of success than their peer group in a particular market,” Walsh says. “We looked for two things: increasing sales and increasing movement of our marketing plan.”

The marketing plan would be key to achieving the $5 billion goal. Part of Herbalife’s strategy is to recruit new product distributors at the same time the product itself is being pitched. The company’s belief is that if you can get people so excited about your product that they want to help bring it to others, you’ve done more than just create one sale. You have the possibility of creating an exponentially higher number of sales as more people get more potential distributors excited and so on and so on.

The thought of bringing someone on board as a new distributor is always part of the sales pitch.

“When our distributors begin their Herbalife business, they come in with an entrepreneurial spirit,” Walsh says. “It’s driven with wanting to bring the Herbalife brand to more people. Our distributors are very interested in learning from other distributors and helping them to achieve greater success. It’s a very core part of our culture.”

Unfortunately, this sharing of ideas was not taking place uniformly across the entire organization, leading to the slow pace of sales growth.

Walsh needed to get things moving again. He needed to find the ideas that were worth replicating to the benefit of other Herbalife distributors and then work on breaking down the silos and reopening the lines of communication to spread those ideas across the organization.

The first stage of this process is identifying an idea or strategy and exploring whether it is worth sharing with others.

“What is it that is driving growth in a particular distributorship?” Walsh says. “Is this something which we believe is beneficial and sustainable? Sometimes they aren’t sustainable in the long run. We’re looking for success drivers with long, stable growth and duplication potential.”

You also need to look at external factors and determine if they are playing a role in the idea’s success.

“Sometimes an idea works within a particular distributor’s organization, but it’s not exportable or duplicable,” Walsh says. “That’s why we seek to have another distributor test it. If we find out based on that, it is an idea that can spread across cultures and across markets, we look to do that.”

If the idea still looks good after it is tried in multiple environments with multiple leaders, it’s time to give the originator a chance the share their inspiration with others.

“They show distributors what they’ve come up with and they train on how other distributors can duplicate what they’ve done,” Walsh says. “The last stage is we measure the adoption and track the level of success.”

Closely followed, Walsh was confident this process would generate results. He just needed to find an idea worth replicating and get people talking about it.

Spread the word

It wasn’t just one idea that got Herbalife back on course toward its goal of reaching $5 billion in sales. But one of the best examples of an idea that got the company moving in the right direction, and got people talking to each other again, was a weight-loss challenge conceived by a group of distributors in Michigan.

“It was a 12-week program in which they invited members of the community who wish to lose weight to participate in the program,” Walsh says.

After people met initially and recorded their weights and measurements, a regular meeting schedule was set up to monitor progress. These meetings would also feature discussions on the benefits of good nutrition, through the use of Herbalife products, of course.

“What it creates is a fun, competitive environment,” Walsh says. “People find it challenging and rewarding. This becomes a very supportive environment where people can learn about good nutrition. Most importantly, they achieve extraordinary levels of success.”

When you create a program that gets people to not only buy your product but to also be engaged in your product and participate in programs that surround your product, you’ve done more than make a sale.

“But also, in keeping that weight off, it creates permanent customers for Herbalife,” Walsh says. “Plus, many people say, ‘Wow, what a fun thing to do every week,’ and they become an Herbalife distributor. So it not only creates permanent customers, they become Herbalife distributors.”

It’s not always that simple, of course. In the case of people who already are Herbalife distributors, if you have one person who is experiencing success offering their perspective to someone who is not doing as well, the potential exists for egos to be bruised.

“All we can do is highlight success and have other distributors train on how that success can be duplicated,” Walsh says. “Our distributors are not saying, ‘What you are doing today is wrong.’ What you are doing today is great. But what we are showing you could help you even more. We’ve all heard the same thing before where the leader says, ‘I’m here from corporate and I’m here to help.’ But rather than force ideas from one country or one organization to another, it’s a slower path. It may take as much as two or three years, but it achieves a higher level of success.”

If you’ve got someone in your organization, whether they are an independent contractor or an employee, the key to getting them to successfully share an idea with a peer is convincing them to show humility.

“I’m not here to tell you what to do,” Walsh says, of how to open the conversation. “But what I am here to do is share with you my story. If there is something in this that can help you in your business, I encourage you to adopt it. It’s that spirit of humility that can make a big difference.”

It’s the same measured approach that you need to take with customers who you want to turn into distributors if you want a chance at closing the deal.

“The process that I’ve described is not a fast-track process,” Walsh says.

Build relationships

Your humility and desire to help others is important, but you need people who want to learn and want to explore the opportunity you’re presenting. So when you have opportunities out there to bring to other parts of your organization, it’s typically best to seek out volunteers to receive them.

In other words, don’t force ideas on people who aren’t interested.

“You want people to evaluate the concept with an open mind and with a real interest in helping it to be successful,” Walsh says. “If you take your top sales leaders and say, ‘I want you to experiment with this, who is interested in seeing if we can adapt this to your country?’ you will have people who are actively looking for ways to enhance and grow the idea and adopt it successfully.”

Create opportunities for people to share information and find ways to get them talking to each other.

“Have your sales and your corporate team spend as much time out in the field as possible,” Walsh says. “There’s no substitute to hearing and listening to good ideas firsthand.”

But don’t lay all the burden of talking with your people on your management team. Walsh makes trips around the world, and instead of just meeting with regional leaders, he wants to talk to the top performing salespeople.

“I want some personal face-to-face time with our lower-level distributors who are moving rapidly,” Walsh says. “I always have two questions for them. What are you doing that is causing you to have such success? What can we do to support you to achieve even greater success? By having these face-to-face meetings, which are always in the presence of local and regional management, we are constantly looking for the next great idea. We are fostering the culture that everyone is totally focused with helping.”

The Michigan weight loss program turned out to be very translatable to other parts of the world. As more communication took place and ideas moved more freely around the organization, sales began to improve. In 2010, net sales hit $2.7 billion.

“I was just at a Russian extravaganza in Minsk where they just launched an expansion of that program,” Walsh says. “What they found was that many customers in our Russian-speaking market would complete the 12 weeks and ask if they could come back and participate in the program with more topics. It just shows you the desire of people to achieve a weight loss goal in a supportive environment.”

Walsh says great ideas don’t always have to come from the president or CEO.

“No matter how bright somebody is, no matter how experienced we are, we all benefit from hearing ideas from others,” Walsh says. “Those ideas are best when heard from people closest to the customer. Making the time to hear ideas from those people who are in the early stage of their careers when they have a fresh perspective is always time well spent.”

How to reach: Herbalife Ltd., (866) 617-4273 or www.herbalife.com

The Walsh File

Born: Dublin, Ireland

Education: Bachelor of Laws degree, University of London

What was your very first job as a kid and what did it teach you?

My first job was in an insurance broker’s office in Dublin after I finished high school. It taught me that the best way to achieve success was always to be looking for ways to do things better.

Who has had the biggest influence on your life?

My dad, who exemplified the importance of staying calm in every storm, doing the right thing every time and treating everyone with equal respect.

Who is one person that you would like a chance to sit down and talk to?

Colin Powell

More on Herbalife: The company’s products include protein shakes, protein snacks, nutrition, energy and fitness supplements, and personal care products. Its mission is “Changing people’s lives.”

Michael O. Johnson joined the company as CEO in April 2003 after 17 years with Walt Disney Corp., most recently as president of Disney International.

Published in Los Angeles

Daniel Adamany did not need to fix his business. At a time when many businesses were struggling to survive, Ahead LLC’s revenue had risen from $3 million in 2007 to $130 million in 2010.

But Adamany wanted to shake things up anyway. He looked at his 100-employee business, which provided IT products to its customers, and felt like he could be doing more to help them.

“We’re really changing the product we’re selling from a hardware product to a consulting-based solution,” says Adamany, founder and president of Ahead. “It’s been challenging. We’re getting through it and we’ve been successful, but it’s a lot harder than I thought it was going to be.”

One of the toughest parts was convincing employees that even though what they were doing was working, they should jump on board his plan to dramatically change the business.

“When I come to them and say, ‘Hey, we’re going to change,’ a lot of them question why,” Adamany says. “Why would we do this when we went from zero to $130 million in 4.5 years? It seems like what we’re doing is working. Why change it? It’s one thing if we’re losing money and we have to do this or we’re going out of business. We’re the best at what we do and they feel great and they know what they’re doing. It makes it even more difficult.”

Adamany says he has made some mistakes in trying to fix a business that wasn’t really broken. The first misstep was when he brought in people who had expertise on how to build a consulting business.

“I allowed them to come in and communicate to the team, but there was such a disconnect between how they were used to running their business and how we ran our business that for the average guy, it was too much,” Adamany says. “They couldn’t process it. In hindsight, I would have sat down with them and understood the model better and then communicated it in words that my guys would understand because that’s where I came from. Prepare a little bit before you communicate. That was an error that I made.”

You may have a vision for your business. It may look like an easy path to achieve that vision. But you’ve got to remember that you have living, breathing human beings who need to be engaged with your plan rather than just blindly commanded to follow a set of directives.

“All of these guys know their vertical better than me,” Adamany says. “So for me, my goal is to understand what they have to say. I also have a broad perspective that they don’t have, because they run within their vertical. My job is to listen to them and then try to understand how that applies across the verticals.

“When people feel a part of what’s going on and what’s happening and they feel that they are contributing, then that also stimulates thought and creativity and ideas,” Adamany says. “They obviously need to be comfortable enough to share those with you.”

What Adamany has learned is that it’s OK to admit, as he eventually did, that you don’t have all the answers or prescient knowledge about whether something is going to work.

“I just told everybody, ‘I didn’t really get this, but now I do,’” Adamany says. “These are the principles and we’re still going to experience some pain, but ultimately it’s the right direction. Getting them in the boat with you seems to be the best way to get through it.”

Adamany’s efforts have accomplished what he wanted. The company is now an even more valuable asset to its customers.

“From a consulting standpoint, we’re going in much earlier in the cycle to determine if they need anything and if they need it, what they need,” Adamany says. “We develop a solution to fulfill whatever they want to get done.”

How to reach: Ahead LLC, (888) 992-4323 or www.thinkaheadit.com

Time it out

Daniel Adamany identifies two big mistakes he made trying to turn Ahead LLC into a technology consulting business. One was the way he initially sold the plan to his people. The other was in how he set timelines.

“I wanted it to change much faster,” says Adamany, founder and president of the 100-employee company. “I put timelines in place, but I think I was a little bit too aggressive because I really didn’t understand what it was going to take to make the change. I would have been better off saying, ‘We want to make this change and we will put a timeline together once I understand it more.’ We failed to meet our timeline. Maybe it’s not a big deal financially, but you don’t want to communicate something and then not hit it.”

Milestones and realistic timelines give your people a good foundation to take the steps your plan needs to succeed.

“We kind of dove in headfirst and said, ‘Hey, we’re going to be successful at this and we’re going to be transitioned within a few months,’” Adamany says. “Reality is, it will take more like a year, because we didn’t know what we didn’t know. So it’s taking more time upfront, making sure we convey the right story and message and taking more time to put the plan together.”

Published in Chicago
Saturday, 31 December 2011 19:06

The takeaway: A tale of two logos

Before you hand out your first business card, before you set up the most bare-bones website, and before you minimally introduce a new venture to the market, you need to have a logo.

A graphic has the power to make a quick and indelible impression, and a good logo can give a start-up an early advantage. Just ask Nike. Just ask Apple. The same is true in reverse. A poorly conceived and poorly executed logo suggests to anyone who sees it that the company just isn’t ready for prime time.

So it was pretty early on when we realized that we needed a logo. As an early-stage start-up, we at Summit Data Communications wanted to look like a professional, confident and dependable company, not a handful of rattled guys taking the biggest risk of their careers. Yet while we knew enough to know that getting our first logo right was a big deal, we still managed to fail at it spectacularly. Here’s how it happened.

We got the first part of the process right: get a good designer. Through one of our partners, we engaged a designer with a good reputation and a portfolio of previous quality work. We then shared with him the collective and unfiltered thoughts of the seven of us, including our favorite colors, shapes and typefaces. Although not one of us had any design experience or training, we provided detailed feedback through multiple iterations. The result was our company’s first logo, which came to be known as “the river of blood,” is reproduced here for the first and last time. In the end, the designer in question refused any compensation for the logo, asking only that we never, ever associate his name and good reputation with it. This was entirely fair because the problem wasn’t him — it was us. We wouldn’t make the same mistake again.

We knew we had a serious problem and we set out to solve it. Conveniently enough, another partner knew another designer, one untainted by a previous relationship with us. He initially agreed to help us out in a few weeks. When he saw the logo, he realized that our young company was a critical case and our image was in imminent danger of irreparable damage. “I’m on it stat!” he said. Just two days later, we had a new logo, pictured here for comparison. This time, only two of the partners knew the project was going on, and the result was delivered not for comment but as a fait accompli.

The takeaway:

Our company got far more from this process than just a respectable logo. I also gained a few valuable management lessons:

  • It’s not enough to hire the right people. You have to let the right people do their jobs. If you hire a pilot or a brain surgeon, you tend to afford them a fair bit of autonomy. The same should be true for engineers, writers, and yes, designers.
  • We all know that too many cooks spoil the broth and that the camel is a horse designed by committee. Still, it’s easy to forget this, particularly when you are on a new team and you are building confidence and relationships. Feedback is great, but acting on every opinion isn’t.
  • Lastly, everyone makes mistakes. The difference is what you do in the aftermath. Successful organizations identify errors early, correct them quickly and learn as much as they can from them. You’re going to fail sometimes, so the key is to fail fast.

Ron Seide is the president of Summit Data Communications Inc., a wireless technology company headquartered in downtown Akron. Reach him at reside@summitdata.com.

Published in Akron/Canton

For Andreas M. Schulze Ising, running a global company is both his biggest challenge and his biggest advantage. The president and CEO of Advanced Polymer Technology Corp. doesn’t get to work within the confines of one country operating in a certain way with a standard set of rules and regulations. However, he thrives on the ability to draw from different environments and points of view to advance the capabilities of the 200-employee global manufacturer of polyurethane-based materials, synthetic turf products and sports flooring applications.

The company has development teams around the world to aid in its global business, but keeping those teams in contact and working together is a constant, yet well worth it effort.

“When you’re just focused on one country, it’s an easier task because government and guidelines and the mentality of the folks in a certain country that you’ve experienced work in a certain way,” Ising says. “When you mix and match those and you work in the American industry and you have to incorporate the German way of thinking or the way things are handled in Australia or Hong Kong or China, then you really have an interesting task.”

Advanced Polymer Technology’s ability to pull from very different environments and perspectives allows the company to be an industry leader in innovation. It’s that ability that landed it the task of supplying surfaces to the Olympic authorities for the games in 2012.

Here’s how Ising keeps Advanced Polymer globally connected in order to develop innovative quality products.

Develop a global framework

Advanced Polymer manufactures and installs running tracks, tennis courts and artificial turf for rugby, football, soccer and many sports facilities and schools across the globe. The company has to be able to understand how business works in different parts of the world in order to succeed.

“It’s always a little bit of a struggle when you have locations, specifically production environments on a global basis,” Ising says. “You have to provide those folks with the right truths to make them understand how things work on a global basis. When you have brand names that you market globally, you have to make sure that you comply with the rules and regulations in a certain country but use those to excel the company and get everybody on the same boat to make sure things are going in the right direction.”

One of the key things to running a successful global business is to really provide people with a direction.

“You have to be able to see beyond the future and what the market requires,” he says. “How can the folks on hand and how can doing innovation fit into that picture and excel the company forward? Give them a straight line and the proper advice and have a plan for how the company can survive so people have a clear idea of what the next steps are. It’s very important to make sure that on the global level that this mission is clear across boundaries and clear across the country. It has to go beyond the local customs and how people think on a local basis. Because as a global company, it’s very important that the mission statement and the brand strategy is very clearly defined and can be grasped by everybody to make sure that it’s a team environment and teamwork that goes forward and extends in the right direction.”

To help Advanced Polymer keep tabs on how things are going in other countries and where each region can benefit from one another, Ising uses a global development team.

“We have a global development team of Ph.D. candidates … on hand in Europe and the states and Australia, and they create and test products to the market,” he says. “They have such an influence from the local markets and they understand the local requirements, so when you put all that together, you don’t just have the creativity of a specific area or a certain way of thinking whether it be German, Australian or Chinese, you actually cross the boundaries by having these guys talk together. It’s a very simple tool and it gives you a platform where ideas get brought to the table and discussed.”

If you operate on a global scale or even if you just operate in one country, you have to have a way for different regions to communicate and share ideas that can benefit the business.

“We look from three different directions from three different continents on similar products that we can enhance and modify based on local demands or local requirements,” he says. “As you can imagine they have very, very different conditions in Australia versus in Germany. In the United States, you have not just forest areas, you have deserts and extremely cold areas where the requirements for certain flooring products or sports flooring products are very different. There are different performance characteristics that are very dependent on the environment, temperature and light. Having the input from these different continents gives you quite an interesting mix of ideas and points of view and perspectives of what is right. The most important thing is to have an open mind and try to see things in a different global environment from that perspective.”

Innovate on ideas

Different perspectives are what allow you to develop ideas. You have to bring people in who actually look further beyond this perspective to help progress the company forward.

“In the end it’s all about innovating things,” Ising says. “It’s all about coming up with this new product. It’s always being a step beyond the competition. That’s probably one of the key focuses. We have a company that works in many different directions not just the sports flooring industry, but we make polymers for optical materials and you can imagine how extreme the bandwidth is between a simple tennis coating to something that will find it’s way into an optical application.”

While working on products for different industries creates challenges for the company, it also allows it to find innovations it otherwise wouldn’t find.

“For example, a running track that has up to 70 percent renewable resources,” he says. “With all these different technologies we have on hand in all these different areas, we have done a great job overlapping amongst those areas and coming up with a whole range of products.” 

Whenever possible you have to allow your employees who operate in different areas of the company to interact so they can offer different perspectives and ideas and be challenged to innovate.

“You have to always be able to challenge somebody to step out of their own bubble and look at it from a customer basis, but also from a very fresh angle,” he says. “I think that’s also a key in our company since we have the global approach you always get all sorts of views out of very different perspectives. You have to make sure that you don’t get stuck with a certain way of looking at things. You always have to be able to challenge what you do and look at it from a different person’s perspective, a different market perspective, or a different requirements perspective because only then will you be able to overcome these problems and get this aha effect.”

You have to understand that when you’re looking at a problem for so long, it becomes the same old thing. Putting a different spin or twist on a situation can get you another step in the right direction.

“When you work within the sports environment you are always challenged,” Ising says. “You’re always challenged by the athletes, by the directors and the guys that actually use the products. There’s always an idea that comes from this market. On the other hand being so versatile and not being just a sports flooring business, but having a lot of high-tech applications like the optical industry, you challenge the standards that are not common in the sports flooring side or the industrial flooring side. You get a complete different set of requirements and you get a complete different set of eyes that look at things and can tell you how that is met. Then you have to have the ability to take those estranged views from a different environment into a more common environment and sometimes it has a very eye-opening effect.”

The biggest key for Ising and Advanced Polymer’s innovation comes from the fact that the global employees communicate in meetings, over the phone, and through e-mail platforms to provide different opinions from different environments that trigger the thought process and make products better.

“The key is you have to really challenge people,” he says. “You have to really everyday make sure that you ask the right questions, that you have people on your team that do the same thing, that really push that question and have good ideas and different perspectives on things so that you have a good discussion that will shed light from different angles on other things to do.”

Maintain a collaborative environment

In order to keep people in your company interacting with one another and sharing ideas, you have to make sure communication between them is easy.

“You have to always be able to communicate,” he says. “I have to communicate from my perspective to the communicators and I try to convey the message to them to do the same things within their teams — have an open mind, have an open ear, listen to people and really try to give good feedback and really try to question things in a positive way, in an upbeat and creative way.”

Advanced Polymer also uses a simple platform to communicate ideas to everybody within the corporation to get instant feedback.

“You come to work in the morning and you open up your e-mail and besides your normal e-mail, you have these little idea snippets, these little comments, these little challenges every day that people can take a look at and think about the day-to-day business, but again be challenged or poked to comment on these questions or ideas,” he says. “Everybody uses it in the company. Any request that goes into a development project is going to be put on that and discussed instantly.”

You don’t have to be on time for conference calls and forced to wait because not everyone is dialed in and you don’t have to fly anywhere to speak to someone.

“You get these things and you can respond very, very fast and it makes things so much easier because you really have an instant feedback and people can attach pictures and excel sheets and it’s out there for everybody,” he says. “To have a quick idea discussed amongst your peers that are involved in this is so much easier. It’s also kind of fun, because you don’t have to elaborate forever, you just put this out there and the idea is taken further by other colleagues in the organization.”

It is very beneficial to have ways for employees to share ideas amongst one another, but you also have to determine which ideas are the best.

“We have certain levels of R&D work that is basically on a more creative level that we discuss once a month in a management meeting where we look at these things and determine what has potential, what fits into our vision of the company, and what we can move forward,” Ising says. “Based on those decisions there is always something in there that we can take and actually incorporate into existing products or we go ahead and work it into new ideas and new products. It’s really a process of listening to the folks in your company. It’s a function of that and it’s a function of your market intelligence. What does the market tell you that you need? What are your potential possibilities within the company? It comes down to understanding what your company is able to do and reflecting that into the market environment.”

At the end of the day you have to have a passion for what you do and a drive to constantly do it better.

“That’s what sports are all about — being competitive and looking beyond your means and trying to exceed the next challenge and that’s what we do at our company very well,” he says. “It’s all about innovation and it’s about the people your company has and bringing that together.”

HOW TO REACH: Advanced Polymer Technology Corp., (724) 452-1330 or www.advpolytech.com

Takeaways

-         Develop a global framework and mission that allows you to best utilize your team

-         Get different perspectives to unlock hidden innovation

-         Implement communication methods to maintain innovation and best practices

The Ising File

Born: Muenster, Germany

Education: Master’s degree in textile polymer chemistry from Bergische Universitat Wuppertal

What was your very first job?

I had many jobs during my childhood since my parents emphasized that life is not free. The one that stuck most with me was working as a delivery boy for medications in my mom’s pharmacy. We had to bike for miles to drop off prescriptions come rain or shine from 20 degrees to 110 degrees. Sometimes the work was more than one could endure. But what counts is getting the job done.

Who is someone you admire in business and why?

This would be my first boss. He touched me because of his vision and the ability to turn that into reality. He was probably the best listener and had that amazing ability to bring the right people together to achieve highest results.

What is your favorite country to do business in and why?

It is most certainly America. A country filled with people wanting to live the American Dream creates an environment of fast pace but also the desire to move ahead with business and life to create that amazing environment all Americans live in. Things happen in the U.S.; people try, try to excel in their own life/career and move others with them. The U.S. also provides a very pragmatic business environment that gives everybody the tools to become great entrepreneurs.

Do you have an APT product you are most proud of?

APT has worked for a very long time to be the industry leader in quality. Our product lines prove that. We have lately focused on environmental-friendly products within the polyester and polyurethane-based product families, utilizing many renewable resources in our formulations. Latest developments created a new generation of running track based on the legacy track, Rekortan, used in the 1972 Olympics in Munich, Germany, called Rekortan G13 that is based on up to 70 percent renewable chemistry. It’s not only a track that runners will love for its accommodating features but will also provide a surface that will exceed the current requirements for sustainable and green building and construction codes.

Published in Pittsburgh

David Rascoe, president of Thermal Industries Inc., a manufacturer of windows and doors that employs more than 400 people, has come face to face with several critical business challenges. The company has experienced a drop in sales, a lack of consumer financing and, most importantly, a lack in consumer confidence.

“To overcome these challenges, it’s been kind of an all-hands-on-deck approach,” Rascoe says. “When it comes to getting in front of the customers, all of our key managers and executives get in front of customers to understand better how we can add value to the business and find better solutions to meet their needs.”

The company continues to work aggressively with its customers to step up in its struggling areas.

Smart Business spoke to Rascoe about how he meets customers’ needs through adding value.

Meet customer needs. You’ve got to be personally committed to being in front of your customers and having a constant direct communication with your sales and marketing teams to have a grasp on the current environment. The organization needs to be flatter in these times to improve the flow and speed of communication. You’ve got to be actively engaged and driving, in our case as a manufacturer, the product-development process.

It’s a time commitment to personally being out with your rank and file in the field, talking to your large customers and, most importantly, talking to prospects as well to understand better what your organization has to do to compete more effectively, whether it is on the sales training side, the marketing development side, or product development and support.

The focus has to be on how you add value to your customers versus just selling a product. You have to find a unique solution to their business problems and have a commitment to being in the field with your sales team to best understand the challenges and, more importantly, the opportunities where many may only see problems. That fuels the engine and fuels the growth.

Add value. It’s like how real estate is location, location, location. When you’re trying to find the value-adds and be innovative, it’s people, people and people. You’ve got to have the flow of ideas and communication within your organization, and you’ve got to have the recognition to those who generate ideas. Not necessarily financial, but recognition that they get for making the kind of contributions through various methods.

We look to bring a lot of our contract customers in to our factory to do tours, and it’s less to learn about the product and, more importantly, to meet the people. Through the exchange of dialogue and communication, you gain ideas both on existing products that you have and product opportunities that they see out of their markets. Some of these things happen through discussion on the shop floors and some of them happen in the engineering area where you’re showing them how you do testing and some of them happen in your showroom where you’re walking through your product with your marketing and sales folks. When your customers truly believe you care, this breeds this kind of communication.

Communicate to find answers. Our innovation is very much a product of a 360-degree feedback loop where we have service technicians who are in consumers’ homes and are continuously getting feedback about products, and we continually mine that data. You’ve got to be talking to customers and trying to understand the pain they’re experiencing and looking for the unique solutions that can add value for them and their process. This isn’t necessarily led by executive management. It’s led by these teams at the field level. They’re the ones on the street that see these things, and they’re constantly engaged in discussing what these opportunities are. We may not all agree that these are good opportunities for the company, but they can all be opportunities.

Through this process, your people have to get very good at the art of probing and asking solid and investigative questions to gain insight to problems that your customers don’t yet recognize as their problem and provide a solution. A lot of times, people are talking about one thing that’s their problem, but it really is a symptom of another problem. So it’s going through that investigative questioning process to help determine what might be a unique solution that we can provide. That sometimes can be through something different in our manufacturing, something different in our product development or something different in a basic service we provide. It could be just for that customer or it could be for all of our customers.

You never want to stop learning from others, so it’s a great thing to keep reading and keep engaged not only within the industry but outside the industry. I get some of my best ideas and impetus to do things from reading outside of our industry and applying those ideas and strategies within the scope of our business.

HOW TO REACH: Thermal Industries Inc., (800) 245-1540 or www.thermalindustries.com

Published in Pittsburgh

On a Saturday in early March 2010, Will Knecht was delivering some product for customers when he got a call on his cell phone, “Will, come back to the forge, it’s on fire.” He hustled back to find his flagship store, corporate offices and work shop of Wendell August Forge up in flames.

Knecht, president of the company, a retailer and manufacturer of handcrafted metalware and giftware that employs 106 people, couldn’t believe what he was seeing. As firefighters went to work, Knecht says he didn’t think the damage was going to be as bad as it ended up being.

“As that was burning, I had a very interesting peace about me that day,” he says. “I wasn’t anxious, I wasn’t stressed; it was what it was, and I really trusted the Lord that he knew what he was doing even though I didn’t.”

As the fire roared on, more Wendell employees came to the site where Knecht led them in a prayer, which ultimately set the tone for rebuilding and moving forward.

“As we broke that circle it was absolutely like the lights had been turned back on, and we were all about what do we do next. What are the next steps? What do we need to do to get back up and going?”

To add pressure to getting back to work and refocused, the company had just landed its biggest order in its history.

“We got an order from the Pittsburgh Penguins … two days before the fire,” Knecht says. “We were able to create 20,000 replica tickets of the last game at the Mellon Arena and we were able to deliver those on time.”

The Penguins order was a game changer for the company and following the fire it helped to keep Wendell August motivated and in business.

“That order took on added significance because it was the rallying point,” Knecht says. “We were going to deliver that and it put everything in focus.”

The first step Knecht had to take was to rally his employees and change their demeanor from wondering what was next to focusing on getting past the fire.

“As you can imagine … there was a lot of fear,” he says. “This fire wasn’t the end of the game. This was the closing of a chapter or the closing of a book on Wendell August and at the same time, that day was the opening and writing of a new book. We conveyed that confidence to each of our employees and said, ‘We’ve got to go about getting it done now and turning this around. This is a temporary setback, but we’re going to be OK.’”

Knecht did everything he could to continually communicate that Wendell August would make it through this hardship.

“Having faith, for me, was the cornerstone, but what that gave me was a sense of purpose and direction and clarity that it was incumbent upon me to communicate,” he says. “My job became the chief communicator inside and outside. I had to provide the stability. They had to see in me a calm and peace, strength, confidence, and they had to see a future focus.

“Bad things are going to happen. It might not be a fire, but a company might lose its biggest account. A company might lose a key employee. The leader’s job is to overcommunicate a sense of calm, a sense of focus and a sense of direction. That’s what we were able to do immediately after that fire. You have to communicate that clearly, directly and consistently. That’s what they needed from me. They didn’t need me to make the product or make a big sale. They needed me to calm and steady the ship.”

Eventually the company got itself back on track, and Knecht had to keep his employees motivated.

“When you go through a cataclysmic event like we did, it’s all about the here and now and getting us through today,” he says. “Then you change gears when you get through an event like that and you have to execute and get back to business basics. You’ve got to stay the course. You need to overcommunicate and you as the leader need to become the bridge to move on to the next phase of life. Put it behind you and change your demeanor, communicate and focus and then begin to throw the vision forward and cast that vision for the employees.”

HOW TO REACH: Wendell August Forge, (800) 923-4438 or www.wendellaugust.com   

Looking forward

Wendell August was opened to exciting opportunities because of the fire and being forced to think in new and different ways.

“There is a realization on all of our parts that we are an almost 90-year-old company, so we’ve got a tremendous foundation, but we’re basically rewriting the book and we have this blank canvas now to paint on,” says Will Knecht, president. “There’s an energy and there’s an excitement about some of the new directions we’re headed.”

The Penguins order put the company into the realm of licensed products, which is today a big focus that the company is moving on significantly as part of the future.

“That Penguins order … and the success that we had with that allows us to talk to some teams in Major League Baseball and the NFL and other NHL teams,” he says. “You have to look outside of yourself and think differently and open your mind. One of the things we did was we weren’t stuck in a ‘This is how we’ve always done it.’ We as a company opened our horizons and we looked at what the possible was. What can we do now that we have this great foundation of a company yet a blank canvas to paint? That’s what I would challenge business folks who go through an event such as this to open their mind to the opportunities sometimes you don’t see when business is going as business as usual.”

Published in Pittsburgh

Samuel Bennett is used to being an individual contributor. Bennett, principal and eastern region client management practice leader for Buck Consultants, an employee benefits consulting firm, has had to adjust to a new mentality in his new role as leader of the Cincinnati office.

The 40-employee office has had to overcome challenges of a tough economy where everybody needs to work a little harder for less. Bennett’s job is to motivate employees and continue to right-size the business.

“The biggest transition into a leadership role out of sales is really making sure people you work with are successful and not just yourself,” Bennett says. “The best thing a leader can do is inspire others to be successful.”

Smart Business spoke to Bennett about how he is adjusting to a leadership role and motivating employees.

First steps

I always go back to, as a company, why are we here? Where are we headed? It’s easy with all the noise of the economy to get internally focused, but what I find is our people are happy and more motivated when they’re focused on the client stuff and not on the internal stuff.

You have to find and focus on the priorities both of your organization and internally on your relationships with your staff. It should be a combination. The staff should be well aware and motivated with the company direction and understand where you’re headed, but also see what their personal value is in that whole scenario and be able to connect that. I think all companies are headed in two directions. They want to grow and they want to be profitable, but if you make your clients happy all that other stuff takes care of itself.

Get to know employees and clients

There are very few people in my office in the first six months of my tenure where I didn’t buy them lunch, take them to breakfast, meet them for a drink or whatever it is to just figure out what it is that they’re about. It’s just a personal relationship-building exercise. You can transfer that over to clients too and getting to know clients on a personal basis. What their needs are, where they’re at in the organization and what their expectations are. It’s more of a communication thing and if you take the time to get to know the employees and the clients, a lot of times you’re headed off in the right direction because most employees and clients will tell you exactly what they want and exactly what they need.

You’ve just got to create that avenue of communication. It’s hard. When you’re in a leadership role you’re tugged in 25 different directions, but if you don’t make the time to build those relationships and you’re focused on the tasks, you’re missing out on the big piece of it.

Motivate employees

You have to learn as much about every individual as you can, because there is no single way to motivate everybody. Everybody has their own little thing that motivates them. Some are motivated by money. Some want autonomy. Some want some credit when things go well. You have to figure out each individual and what makes them tick. Does it work when you kind of spread it like peanut butter and treat everybody the same? I think you leave half the people out when you approach it that way. When you individualize it and really learn what makes everybody tick, you can adjust your style to meet what motivates them.

That takes a while to do. That’s not something you read in a book or is easy to figure out. It takes a little time. There’s no one way to be a true leader, but you can learn from everybody you interact with every day. Adjusting your style to fit your individual employees is more successful than to say, ‘Here’s my style, everyone adjust to me.’

HOW TO REACH: Buck Consultants Cincinnati, (513) 784-0005 or www.buckconsultants.com

Published in Cincinnati

Jeffry Quinn had to stop the bleeding at Solutia Inc. When he took over as the company’s CEO seven years ago, it seemed like the best thing he could do at that moment. Solutia was a company that was in a lot of trouble.

“I became CEO just a few months after the company filed for Chapter 11 reorganization,” Quinn says. “We had a failing business that was beset by a number of problems. Some not of our making, but some of our making. So it was a transformation that had to occur rapidly in order to create a future for the company.”

Much of the difficulty that the company was experiencing could be tied back to the split from Monsanto in 1997.

“The company got spun off,” says Quinn, who is now chairman and president in addition to CEO. “It was loaded up with all these legacy liabilities. It was not given some of the businesses that arguably might even be viewed as chemical business that were defined as agricultural businesses and stayed with Monsanto.”

So Solutia, a performance material and specialty chemical business, had lost some of the businesses it needed and was tied to a number of businesses it did not. The result was turmoil.

“We had a significant series of issues that related to businesses that we had not been in for decades,” Quinn says. “Businesses that weren’t even part of the company at the time it was spun off from Monsanto in 1997. It was pretty obvious that was the biggest source of many of the company’s difficulties. What was not as obvious were the performance issues relating to the businesses that we were running. There was more potential to be realized from those businesses than we had created.”

Quinn was under a lot of pressure. He arrived at Solutia in January 2003 as a senior vice president and general counsel. Six months later, he was chief restructuring officer, helping to prepare the company for bankruptcy. Less than a year after that, he was CEO.

“I was the first officer-level person that had not worked at Monsanto before the spinoff,” Quinn says. “When I started in 2003, no one would have thought a little over a year later, I would become CEO of the company. It wasn’t the Solutia way.”

But it was the reality that Quinn faced.

“It’s kind of like a doctor in the ER triaging a patient,” Quinn says. “You get the patient stabilized first and then you can figure out what the cause is.”

Stop the bleeding

Quinn looked at the situation at Solutia and began to cut away at expenses. It had to be done before the company could talk about a recovery.

“We had to do things relating to benefits,” Quinn says. “We had to do things relating to our pension plan. We had to do a lot of things that were not very pleasant at all, but they were necessary in order to put the company on better financial footing.”

As each cut was made, Quinn made a point to clearly explain to people what was being cut and why.

“It was direct, candid conversations to really talk to employees through global video town-hall meetings, through visits to our plants, to discussions with the leadership team,” Quinn says. “It was just dealing with people in a candid and open manner. ‘Here’s the facts, here’s where we are, and here’s what we need to do.’ The process of making these decisions, the decisions weren’t difficult analytically. The decisions were difficult emotionally.

“For example, we had a pension plan that was significantly underfunded and we made the decision to freeze benefit accruals under that plan. What I told employees at that time was that freezing the plan was what was necessary in order to save the plan.”

Quinn was surprised to find employees were actually pretty receptive to his message, despite the gloom.

“We had gone through a period here at Solutia where many of the employees saw the issues and saw the problems and perhaps felt like the organization had not dealt with the problems directly and proactively,” Quinn says. “So the employee population was very receptive to, ‘Here’s the problem, here’s what we’re going to do, and here’s how we’re going to take aggressive action.’”

When you have big cuts that need to be made, you’ll probably find it easier to earn support if your employees feel like there’s a reason for the action and a bigger goal in which that action is contributing toward achieving.

Quinn didn’t want the recovery at Solutia to be about hitting a number.

“We had a vision of what this company could be and everything we did from day one was focused on that vision of what Solutia could become,” Quinn says. “We couldn’t have gotten employee buy-in if it was all about slashing and cutting to a certain number. It had to be about fulfilling an ultimate vision.”

Create a sense of purpose

Quinn didn’t learn how to create a vision in college. And you won’t find the perfect vision for your company in this story or in any other business magazine or at any industry forums, trade shows or leadership conferences.

“You have to develop these from the heart,” Quinn says. “They have to be things that you truly believe in and truly want your organization to believe in. You have to be willing to pattern yourself that way and pattern your organization that way. You can’t just give lip service to something like this. You have to be candid and realistic with yourself and be able to look in the mirror to ask the difficult question: Is the organization living up to your expectations in that regard?”

Quinn sat down one evening shortly after becoming CEO and wrote down 10 statements that he felt Solutia needed to stand for. The list included such things as, ‘Be good stewards of our business,’ ‘Set high expectations for ourselves and our colleagues’ and ‘Give our people opportunities to make a difference.’

“These weren’t written by a consultant, they weren’t written by good communication people or the HR organization,” Quinn says. “They were written by me.”

The key to this list was what Quinn did with it. He put together a team that he called the Solutia Transformation And Revitalization Team, also known as START. It was a group of about 80 people from across all parts of the business. Quinn’s tenets would be the foundation for this team.

“It was not necessarily hierarchal in terms of organization level,” Quinn says of the team. “But it was certainly comprised of the influencers, the people who had internal credibility and people who had positions in HR and other functions that were very visible. We wanted the people who could really go out and tell the story to our own employees.”

You can develop the best plan in the world. But if it doesn’t involve your people or if you don’t let them play a large role in how your plan is carried out, it won’t do you any good.

This kind of inclusion was not a priority at Solutia before Quinn arrived.

“I thought a situation had developed where there were two or three people at the top of the organization and everyone else was at the second tier,” Quinn says. “I didn’t want the mentality of people looking around the room and saying, ‘What are those guys going to do about this?’ I wanted it to be more inclusive. I wanted to create a greater expanded accountability where our employees and our management team felt like, ‘Hey, I’m accountable for what happens here. I can make a difference. I’m involved and I’m part of the team.’”

It’s that type of feeling and not just clever clichés that you need in order to earn support for a vision.

“There’s nothing you can do in a four-sentence vision statement or mission statement that will get employees excited,” Quinn says. “You need some statement of the ultimate destination. But the way you build excitement is through communication and dialogue around that statement. What does it mean? How are we going to do it? What does it mean for me? If it was as simple as writing a catchy four- or five-line vision statement, the communication people would be running the world. It’s kind of a statement of who we are, but it’s also a statement of who we strive to be.”

Manage your team

Of course, as Quinn was working to develop this purposeful and inclusive organization at Solutia, he was also working through bankruptcy and the challenges that presented on a daily basis. He did his best to keep things separate.

“I felt like I had two jobs for those four years,” Quinn says. “One was running the company and the other was running the bankruptcy process. We tried to keep those separate.”

Quinn says going through bankruptcy isn’t what many people think it is.

“It’s not really your creditors you’re dealing with,” Quinn says. “It’s new money investors and all the hedge funds that flood into your capital structure and buy up all your capital structure bringing new money investment into it with the anticipation of making incredible profits from the process. So the bankruptcy became a battle between warring hedge funds located in New York a few blocks apart.”

This battle was important, but there was nothing most employees could do about it. So Quinn encouraged the START team to continue focusing on building a purpose-driven organization and turned his own attention to his management team, where he felt more change was needed in pursuit of the vision.

“You make your own observations,” Quinn says. “You know just from being involved, unless you’re very withdrawn and detached, you know when the team is hitting on all cylinders.”

Quinn looked at his management team and he still believed there was a problem with how it interacted with employees. The team was not being the standard bearer for his vision that he wanted it to be. So he made changes.

Some people were pretty unhappy at not being deemed worthy of being leaders at Solutia anymore. But Quinn felt strongly that he owed it to his employees to make the changes. They were the ones who had shown such loyalty to him because they believed the tough decisions he had made were in pursuit of a better future for Solutia. So he owed it to them to find leaders who were a better fit for the plan.

“The thing I would say is not to be complacent,” Quinn says. “Making changes is difficult, and it’s easy to fall into a trap of not wanting to create disruption. We were falling short of where I wanted us to be in terms of communication, collaboration and information flow. That candid dialogue is so important. I thought in some areas, we had fallen into too much of the manage the message, manage the information and manipulate and control as opposed to the transparency that I like.”

Quinn wanted to show his people that their commitment to him and the trust they had shown in him both to deal with the bankruptcy process and guide them through the development of a new vision had been worth it.

“What helped was keeping employees focused on the vision of where we were going and keeping employees focused on the fact that as difficult as this was, we were going to make those difficult decisions in order to create a future for the company,” Quinn says.

It’s not done yet, but Solutia is out of bankruptcy and the company had a gross profit of $608 million in 2010 with revenue of $1.95 billion. Instead of 23 businesses, the company is now comprised of three businesses. The leaner business model and slimmer portfolio brought EBITDA from a 4 percent margin in 2003 to better than a 25 percent margin in 2010.

Quinn says the key to turning your company around and being the leader it needs is not the depth of the cuts you make or the clever sound bites you write into your speeches. It’s getting people to believe in you and believe in what you stand for.

“The challenge is not to be constrained by some of the conventional wisdom of organizational structure,” Quinn says. “Who are those people who can influence your organization? Who can be your ambassadors? Who will truly buy in to what you’re trying to create and be advocates for that within the organization?”

How to reach: Solutia Inc., (314) 674-1000 or www.solutia.com

The Quinn File

Born: Sturgis, Ky.

Education: Bachelor of science degree, mining engineering; juris doctorate, University of Kentucky. I always joke that I’m a reformed lawyer.

What was your very first job and what did the experience teach you?

I wrote a column about high school sports. I also I worked in underground coal mines and put myself through school. All my experiences taught me that everything is hard work. Any job, whether it’s being a world-famous sports columnist or being a CEO or being an engineer or working day to day in a manufacturing plant, it’s hard work.

Who has been the biggest influence on you?

My dad was in the mining business, and he did not have the opportunity to go to college, but he rose up to become vice president of operations for a significant company in the mining business. He did that through hard work. But my dad was one that was especially known for being concerned about his employees. He wasn’t a guy who tried to get by on bluster and bluff and rhetoric like a stereotypical person in the coal industry would at that time.

If you could talk to just one person, who would it be and why?

That’s a very easy question for me. I have an 18-year-old daughter, Grace, who is a special needs kid. Grace is functional to some degree and she verbal approximates and you can communicate with her. But really the opportunity to sit down with her and talk with her like you would a typical kid is probably what I would wish, to see what’s really going on in her mind.

Published in St. Louis

It happened so fast that no one really noticed how spread out things had gotten at AMS Fulfillment. The third-party fulfillment service company had grown from 80,000 square feet to 500,000 square feet in just three years.

“We took a step back and said, ‘Wow, we’re operating our fulfillment business out of seven buildings,” says Jay Catlin, president and managing partner at the company of more than 200 employees. “It’s not necessarily ideal to be running your business out of that many different buildings in our space.”

Catlin and his leadership team felt like the company needed to consolidate a bit and have a larger presence in fewer locations.

“It’s a situation where you say, ‘Wow, we’re really growing,” Catlin says. “But just because you find a way to get an order fulfilled and out the door doesn’t necessarily mean you’re fulfilling it in the most efficient or effective way. So after running all this business out of the various facilities, we took a step back and said there is a way to do this better. We need to commit to coming up with an operational infrastructure that’s going to benefit ourselves and our clients.”

It was time to sit down and talk out the best plan of attack to meet this goal of better operational efficiency.

“If it’s not managed properly, meetings like that, you can run into some inefficient dialogue where people are talking over people and so forth,” Catlin says. “We lay out the framework. This is the situation and these are various options we have.”

You’ve got to have some sort of framework of a plan in mind before you begin the discussion. But you probably want to keep it to yourself as the meetings begin.

“Our job at that stage is we don’t want to force our opinions on the senior troops underneath us,” Catlin says. “We want them to give their ideas and advice without it being influenced by our own thoughts. So we hear everything that they have to say and then as we’re helping to direct conversations and so forth, we’re sharing our thoughts on what might be positive or negative with any particular approach.”

In the case of AMS, there wasn’t a lot of debate over what needed to be done. The company needed to commit to longer term leases and make capital expenditures to get those buildings ready to be more permanent facilities. There also needed to be an effort to make sure client relationships were strong.

Your tone in how you approach these discussion meetings will go a long way toward making them effective.

“Whoever might be directing traffic, if that person is one who is combative or emotional in the way they conduct the meetings, it’s just going to breed more of that,” Catlin says.

You need to maintain an even keel and make sure you let people have an opportunity to speak without being interrupted.

“If you get into a situation where you’re not able to finish your thought process, it’s very frustrating and not very effective,” Catlin says. “There is a goal in mind of everybody having a chance to share their thoughts completely and everybody having a chance to respond.”

You also need to make sure that people are doing their jobs and being held accountable for tasks they may be assigned along the way.

“If somebody comes in and we’re supposed to have a meeting about one subject or another and it seems like they are not prepared, we’re not out to embarrass anybody,” Catlin says. “But just in the course of asking questions and looking through what they have to talk about, we’ll just naturally find they are not prepared.”

If it becomes a habit, try meeting with that person after the meeting in private to discuss it.

Catlin says it’s a problem he doesn’t have at AMS, which has allowed the company to address some of its concerns.

“We’ve had a chance to get caught up and move ahead of our current business activity to better prepare to manage our current and future needs,” Catlin says.

How to reach: AMS Fulfillment, (800) 931-4267 or www.amsfulfillment.com

Get it on the record

You may think that because you’ve labeled a meeting as important, that everybody will remember everything that is said. But if you don’t have a formal process to document the business of the meeting, that’s not too likely to happen.

“It can become hearsay afterward,” says Jay Catlin, president and managing partner at AMS Fulfillment. “You’ll hear, ‘That’s not the way I remember it,’ or ‘I don’t recall talking about that.’ If we’re having a meeting about something where we’re going to be taking some action or there’s some change in place, it’s best to have the function leader writing up all the notes and then sending out a confirmation e-mail.”

Catlin takes documentation a step further at AMS, a third-party fulfillment services company with more than 200 employees. Important topics become a spreadsheet file that is maintained and accessible on a shared drive on the company’s computer network.

“So at any time if you’re going about your business and you think, ‘Oh wow, here’s another thing we could talk about, you could just go onto the shared drive and type an additional line item onto there. Here’s an area of concern, here’s a possible solution. Then the next time we have a meeting on the subject, that issue will be up there.”

Published in Los Angeles
Wednesday, 30 November 2011 19:17

Amar Panchal: sharing the benefits

When it comes to employee fringe benefits, small- and medium-sized businesses are in a tough position. Fortune 500 companies often offer unbeatable benefit packages, profit sharing and 401(k) matching with which their smaller counterparts simply cannot compete. This begs the question: How can businesses with less to spend secure and retain top talent? It took me 10 years as a business leader to answer this question and the conclusion was surprising.

Employee morale was not necessarily tied to the cost I spent on benefits and perks. Of course, paying employees fairly is important. But what I learned over the years is that small things do matter. As simple as it sounds, I truly believe that small personal touches are responsible for my company’s, Akraya Inc.’s, No. 1 position on the San Francisco Business Times’ 2011 Best Place to Work in the Bay Area list.

Growing businesses often make the mistake of concentrating all their efforts outside of the company to bring in investors and clients. My experience is that it is never too early to start building a strong company culture. Instead of letting the company culture take a back seat, shaping company traditions and customs with the same vision and precision used to shape your products and services is important. This can be as simple as choosing a company mascot or an artifact of significance that symbolizes the company’s values.

At Akraya, celebrating success has always been a cornerstone of the culture. Thus, we installed an old-fashioned dinner bell in a central area of the office that we named the Akraya Bell of Success. Every time an employee completes a project or comes up with a solution to a problem, his or her supervisor rings the bell and the whole team gathers for a round of applause.

While Fortune 500 giants have the budget to wow employees, small- and medium-sized businesses possess the power of flexibility. They simply aren’t constrained by a 500-page policy manual. And flexibility is something employees really appreciate. One way of exercising this is to simply grant time to employees to attend to family obligations or take time off when going through a rough patch. Sometimes, even a small favor like letting them arrive to work half an hour late to avoid traffic can improve their lives.

Another important lesson learned is that when it comes to investing in perks, you should spend on things that really hold value to the employees. Company picnics are great, but they can feel like a burden, especially if the employee already has little time left after work hours. But a couple years ago, I observed that my female employees often complained to each other in the break room that their weekend was spent cleaning their houses and they didn’t have time left to recharge. Thus, I decided to look for a local professional cleaning company and signed my employees up for a complimentary biweekly house cleaning. This new perk became a smash hit among Akraya employees as they gained an extra couple of hours to spend on other things.

Respect and trust are two core values your company culture should be built on. Most employees leave a company not because of perks or compensation. They leave (or stay) because of their boss. At Akraya, we promote a culture where the individual is respected. Starting at the very top, the message is that subordinates are treated with respect. We praise in public but criticize (constructively) in private.

Earning and retaining employee trust is also crucial. Employees don't mind if a leader disagrees to a proposal or request. However, if you do agree and then renege when it is time to pay up, you lose their trust.

When thinking of ways to secure and retain talent, spending on high-cost perks is not always the best solution. Instead, focus on building a strong work culture to draw people to your company. As my favorite line from the movie “Field of Dreams” says, “If you build it, they will come.”

Amar Panchal is the co-founder and CEO of Akraya Inc., which he and Sonu Ratra founded in 2002. He brings more than a decade of management, international business development, technology consulting, product management and software engineering experience to the company. Learn more at www.akraya.com.

Published in Northern California