Flipping the switch Featured

8:00pm EDT March 26, 2009

Every once in awhile, you’ll find Keith Olsen sharing a bowl of ice cream with his employees.

It’s one of the ways he tries to lighten the mood for his 330 employees at Switch & Data Facilities Co. Inc., a provider of network-neutral data centers that house, power and interconnect the Internet.

Olsen, the president and CEO, sees the ice cream breaks as a way to bring together people who may not normally interact at the company. It’s a way to get people who might otherwise not spend a lot of time talking to each other to come together in a nonthreatening environment.

“Sometimes people just don’t like to kind of step forward,” Olsen says. “Some people feel, ‘I want to be more reserved.’ But, if all of a sudden they see everybody else participating, it becomes a bit contagious.”

Of course, giving away ice cream to employees isn’t the main stimulator of the company’s success, but it’s one of Olsen’s leadership ideas that has helped the company grow. By focusing on hiring the right people, having a solid plan and empowering employees, he has created steady growth — highlighted by a 24 percent increase in revenue and a 34 percent increase in EBITDA between fiscal 2006 and 2007, increasing revenue projections for fiscal 2008 and a projection to hit more than $200 million in revenue this year.

Here’s how he did it.

Hire the right people

Olsen is looking for employees who fit in to a performance-based environment that, as the company performs better, the employees get better rewards.

“If someone overachieves, someone achieves and someone underachieves, they will all be rewarded differently,” he says. “That’s a performance-based culture. People sometimes don’t like that culture. They shouldn’t be in this company. But people that like that kind of culture, then it becomes contagious, and the overall company benefits.”

To find the people that best fit in to your company’s culture, he says you can investigate within the company to find the groups that have had a high rate of employee success. If one group is full of successful employees and their retention rate is great, you should go talk to that group and find out what they are doing right.

Olsen also finds referrals from people whom you trust are a good way to go when hiring.

“Use your customers and use your employees,” he says. “Your customers and employees who are the most interested in you having the best people are a great resource.”

It’s always helpful to go off a trusted reference when hiring someone, rather than just looking at a resume.

“As long as you have a high degree of confidence in the reference as the source,” he says.

When Olsen was a hiring manager, he would tell someone that the first meeting he or she was going to have would be about 15 or 20 minutes. Olsen did this so neither he nor the individual would waste time if the two didn’t hit it off.

“But, it could go for two hours, that 15- or 20-minute interview,” he says.

If Olsen is impressed in the first meeting, he then wants to see that individual again and he wants a couple of other people to see that same person.

“Then the third time I see them, if they didn’t get better from the first time, I have to do an analysis because they have to get better each time I see them.”

Overall, Olsen doesn’t see any difference between hiring people for a company that is looking to grow or one that is content with its success. In both instances, you are going to look for the employees who can benefit your company.

“You are looking for competent, capable people that fit the operating environment and the cultural environment in the company,” he says.

Have a plan

As you start thinking about making multiyear plans, you need to have a different team thinking about the long-term execution versus the near-term execution.

In Olsen’s case, he looks at his business in two regards. He has his executive team, which he refers to as the “invest in the business (ITB) team” and his “run the business (RTB) team,” who are the people that report to his direct reports.

“I’m not looking for people to do each other’s jobs,” he says. “I’m looking for them to compliment one another for the execution. As the RTB is running the business, the ITB team is looking out more than one year.”

Olsen stays in touch with his teams through various meetings. They have weekly, monthly and quarterly reviews that allow Olsen to get a feel for what is going on at the company. Inside those meetings, there are many strong opinions, and Olsen describes the room like an ice rink.

“We move the puck around a lot,” he says. “Then we decide, once we’ve banged it around quite a bit, what’s the best return for the shareholder based upon what resource we are applying against what projects in what type of timing, so that we get the appropriate return.”

While discussions and opinions are important, Olsen still wants data as part of his structure. The company has playbooks, which are the company’s go-to-market plans for a specific customer segment, and are built based on customer and analyst research. Olsen describes them like a sheet of music where, if executed properly, you have perfect symmetry.

“When there is no sheet of music and people are tuning up a symphony, it’s just a cacophony of noise,” he says. “But the sheet music provides the guideline and the tempo so all of the different instruments are going in concert to actually build that beautiful sound that was expected because of the execution. Through practice and through competency building, you fine-tune that execution.”

The use of playbooks removes someone’s strong opinion from being the guiding word on an issue.

“We’re trying to diffuse from ego being involved,” he says. “We are using business metrics to be able to utilize that as building strength in the business.”

Data is important for any business because it not only gives you concrete evidence of how you are doing, but it also backs up the art of leadership.

“You use the science to confirm your gut,” he says. “Your gut is all the years of experience that you and your leadership team can accumulate.”

Olsen says the science will be able to show you that, if you want to go north and you aren’t heading somewhere between northeast and northwest, then it allows you to step back and adjust.

“You use the numbers to calibrate,” he says. “Then you kind of perpendicular check and say, ‘Now let me go out into the market and talk to them.’ Or, if it happens to be an operations group, go and see that. That’s where the art form comes in. But most of business is science.”

To avoid drowning in data, you need to make sure you are getting out and talking to employees and customers, which has helped Olsen get information outside of just what is on paper.

“We have built rapports over the years to get kind of the perpendicular views besides what I am just reading through reporting mechanisms,” he says.

Empower employees

Once you’ve hired the people y ou want and have a plan in place, you need to empower those employees.

One way to do that is by talking with them and listening to what they have to say.

Olsen has breakfast with six to eight employees, which his assistant chooses randomly from across the organization, about once every six weeks.

If you want to meet employees in a more casual setting, make sure you aren’t doing it with someone you interact with on a regular basis.

“Think of it as, it’s not a skip level,” he says. “It’s skip two or three or four levels.”

The company reserves a private room where the employees can take their time, eat and talk, and not feel rushed. Employees don’t know what to expect before they arrive, but when they do, Olsen tells them to order whatever they like and the group engages in some small talk.

“Then, all of a sudden, the dynamics turn around always to something around work, something around business,” he says. “Then, someone says, ‘Well, do you know I can help you with that?’

“Then, all of a sudden, that level of the organization that has their hands on the steering wheel are now engaged in cross-functional communication. We expect them to do that on a regular basis. That then bubbles up into the process work that we have the process teams looking at. Then, you can now build a playbook around the improved process. You don’t try to build the playbook and then jam that down people’s throats. That doesn’t work because there is usually breakage between what I could potentially see … versus the folks that are building the tasks.”

That communication is not only needed from side to side in the organization but also up and down. While it’s beneficial to have the macro view of the organization, you need to hear from the employees on the lower levels, which holding get-togethers like a breakfast helps accomplish.

“It’s sort of like watching a football game, and I get to see where the open receiver is because I have 20 TV cameras showing me,” he says. “I don’t have the defensive lineman about to crush me. But the person that is down on the field has the ability to understand the speed of the game that I have no appreciation for from where I am sitting. Therefore, those two views end up providing a much better type of equation to solve versus either one of them on their own.”

Another way to empower employees is to show them that they may know, in some cases, more than you do about the company.

“Then it builds also an interesting human dynamic issue,” he says. “They actually see that I don’t know a lot and I have to depend on them. They also get to see that I am thinking about things two or three years out.”

During the breakfasts, as well as town-hall meetings, employees sometimes ask Olsen questions he doesn’t have an answer to, or they ask him questions he hasn’t really thought about.

If you find yourself in that position, remember to just be honest.

“I find that if you are just direct, frank and truthful, you don’t have to be that smart,” he says. “I don’t have to remember a lot of things if I’m direct and truthful. I just have to remember that it’s the truth. That doesn’t mean you have to tell the truth harshly. You can tell the truth as attractively as possible, as long as it’s the truth.”

It’s also OK to say you don’t know the answer, instead of trying to give a half-informed response. If you don’t know the answer, admit you don’t, but make sure you let that person know you will find the answer and get back to them.

Overall, having breakfasts and skip-level meetings helps empower employees, which leads to a more productive company.

“People come up with creative ideas,” he says. “They now don’t think that they shouldn’t raise their hand and come up with ideas to improve the cycle times and the operations,” he says. “Then they see us implement some of these decisions and spend money on these decisions, and we talk about the pride of ownership of it.

“Now, there are many more ideas than what you do. As long as you have the process and they understand that it’s going to take a serious look, but the minimum ante is that you have to build a case. It’s not just a whim and an e-mail saying ‘Hey, did we ever think about standing on our nose?’”

How to reach: Switch & Data Facilities Co. Inc., (813) 207-7700 or www.switchanddata.com