Carolyn LaWell

Monday, 23 February 2009 19:00

Company change

With the slumping economy, Greg Beyerl decided there was only one way for his company to grow: through acquisitions.

As president and CEO of Sign Craft Industries, Beyerl set a goal in early 2008 to reach $10 million in revenue by 2010. Since then, the sign company has acquired two of its competitors and posted 2008 revenue of $5.3 million, and Beyerl projects 2009 revenue of $9 million, putting the company well within reach of its goal for 2010.

Because Beyerl was already familiar with the customers and management teams of the acquired companies, a large component of the transition was communicating the change to the 60 employees, both old and new.

Smart Business spoke with Beyerl about how to inform employees about an acquisition and how to help them adjust through the change.

Q. How do you communicate to employees about an acquisition?

During the process, you don’t want hardly anybody to know because information getting out can be catastrophic to either company if the acquisition does not go through. We waited until the deal was done.

We believed the best way to break the news was in large group meetings. Finding out information from other than the source is never good.

We told them upfront what the objectives were, what we thought the numbers were going to be when we’re done looking at the two companies, how we’re going to go about the process and, again, with an eye on integrity, we stood by what we were going to do.

Be honest. That goes from why the acquisition made sense, what our objective is out of making that acquisition, and more importantly, because they probably didn’t listen to an awful lot of that, start off with what’s the impact on them.

Whenever you get into one of these acquisitions, you have the nasty word that goes around that’s called synergy. It’s a beautiful thing for companies — that’s what makes a lot of these acquisitions worthwhile — but to an employee base, that means that people are going to be losing their jobs.

We conveyed to our employees and to the other employees that if you’re good at your job, if you work hard, if you do the things that you’re suppose to do, you’re going to have a job.

We candidly tell them upfront that we will be reviewing everybody on both sides and try to get the best set of employees in the right jobs that we can.

Q. How do you determine which employees to keep and which ones to let go?

It’s an awful lot of hours and time and effort and meeting with people.

Meeting with prior managers to get a good understanding of the skill set of the people that you’re bringing on. Hopefully when you go into the acquisition, you have a very good understanding of the skill set of the people you have on board already.

It’s spending time with the people, whether it’s the CEO or the people that he trusts, to really build the team to move the company forward. You’re going to make mistakes, but you do the best you can out of the process.

It’s pretty simple to make the decisions on a small portion of the employees. I think it’s pretty much a consensus — and I think that’s true with almost every company — they have some people that probably just shouldn’t be there.

Then you run into the group that it’s just a very difficult process [to evaluate them].

You just take your time and get to know those people, and you get to know their work and how they do. Then you make the final cuts once you have a clear understanding of their ability to do the job.

You can’t help but get employees involved. We sit down with every single employee of the company being acquired. Obviously, they start speaking of other people, so by default, you get an awful lot of input from employees.

They have a clarity in their mind of who they want to work with. We don’t have to ask. They come in and say, ‘Hey’ — and it’s on the positive as much as it is on the negative — ‘Boy, this is a fantastic eye; we need to keep them.’

Q. How do you make a smooth transition for people?

It goes back to listening to your employees, being very open and very candid with the employees and saying, ‘This is what we know about you. This is what you can bring to the table. Tell us what you think is different.’ Then give them a chance to go through the process.

I think the key is to get people comfortable and working together as quickly as possible.

We have intermixed the people from both companies quite a bit. That is really beneficial, just letting them work together.

These are people that they’ve been working against for years and years and years, and all of a sudden, all the myths that these people aren’t at the same level, you have to break down those barriers. The only way you can do that is show the competency of the people you brought on board from the other company.

HOW TO REACH: Sign Craft Industries, (317) 842-8664 or www.signcraftind.com

Monday, 26 January 2009 19:00

Customer care

In Gary Deeken’s book, without solid customer relationships, there’s little room for success.

Good customer service and satisfaction are among the essentials for business survival, and they’re part of the foundation that Central States Bus Sales Inc. has been built on, says Deeken.

“You have to stay close to your customer,” says the company’s president and CEO. “You have to do what you said you were going to do when you said you were going to do it. And you have to base your business on meeting your customers’ needs.”

By listening to its customers, the bus distributing company developed a business model with a built-in customer service component that its opposition can’t compete with, according to Deeken. It’s also helped the company to expand to markets in five states and grow revenue to $90 million.

Smart Business spoke with Deeken about how to create customer relationships and measure clients’ needs.

Form solid relationships with your customers. It starts with your people. Your people have to be good communicators.

They have to care about their customers. They have to relate to them. They have to understand their business. Most of that comes from just listening real well and doing more listening than you do talking.

We tend to develop the relationships with our customers and the leaders in the industry, and we listen very closely to them and learn from them.

It takes time to build relationships. You can’t ever expect a salesperson, for example, to walk into a customer and build a relationship on the first visit. The way we establish a relationship is getting to know them over a long period of time.

One of our philosophies is we don’t want any one of our people to really own the customer. We want the company to own the customer. So we don’t have a salesperson who is the only person that ever talks to a specific customer.

We’re touching that customer in a lot of different ways from a number of different people in the organization. We get to know and understand their day-to-day operating needs. Then look for ways to provide solutions.

What that helps us do is realize we have to drill down and understand the needs [of] our customers and the needs our customers are trying to meet for their customers.

You have to figure out how to have as many different touches with your customer as possible, whether it’s a personal touch, a salesperson calling on them, multiple salespeople calling on them selling different products. Contact with them at trade shows and conventions, through newsletters, advertisements. You want to build your brand; you want to have your name in front of them as much as possible. When you do that, then you develop relationships.

Study customer satisfaction to gauge your performance levels. Performance is a hard thing to measure. Sometimes customers will tell you, sometimes they won’t, whether they’re happy with how you’ve served them or not.

Sometimes, we as leaders, all we’re looking at are the numbers, the dollar numbers. That’s fine. You’ve got to do that, but you’ve also got to find other ways of measuring your performance and customer satisfaction.

We’ve hired a company that for every deal that we sell, this company contacts the customer and does a phone interview with the customer and asks a series of questions we’ve designated with them. Then they give us a report on that. Let us know how we have done with that customer, whether we met their needs, whether they’re satisfied with what we provided them with.

We separate (the data) by customer and by the salespeople that are responsible for those various different customers. It’s one of the tools we use to evaluate the salespeople and not just the salespeople but also parts and services.

It flows through the whole organization. It’s certainly another measure of performance.

Find a balance between providing good customer service and the cost of doing so. You have to look at each situation as it comes up and figure out a solution to solve your customers’ problems.

We look at each situation as a stand-alone situation and try to deal with it according to what best serves the customer. Sometimes it means we’ve got to send one of our guys out to their facility to solve it there. Sometimes it might be the solution is best by sending a driver out and picking up the bus and bringing it back to our facility to solve a problem.

There’s always going to be a balance between providing great customer service and the cost of providing that service. It’s difficult to really measure, in a lot of cases, whether or not the customer service that you provide, whether there’s payback for it.

A lot of times you don’t see a direct additional payback. But through my many years of experience, I have learned there is a payback. It may be a couple years down the road, but customers remember great service, and they will reward you eventually.

I don’t know if you can really put an equation to the balance. You’ve just got to know that customers do appreciate great service, and they’ll reward it in the future with giving you additional business.

HOW TO REACH: Central States Bus Sales Inc., (636) 343-6050 or www.centralstatesbus.com

You can’t miss them. The words “a sense of urgency,” “respect of human dignity,” “independence” and “optimism” are strewn in front of you as you enter the headquarters of the Sheakley Group of Cos.

The words decorate department walls and occupy computer screensavers. The words make up the set of values by which Larry A. Sheakley, CEO, leads the 47-year-old company that specializes in business services, such as payroll, human resources solutions and workers’ compensation.

Keeping your values literally in front of your employees is essential, especially for the less tenured.

“In a company our size, you’re always getting new employees,” Sheakley says. “They need to see it’s important. If they don’t see it anywhere after their first day of orientation, then why would they think it’s important? It’s extremely important.”

Your values can be written over and over and over again. They can constantly catch your employees’ eyes. Your employees can recite them forward and backward.

Still, there’s a difference between knowing the values and living the values. You, as the leader, must be the prime example of how to live the values.

“It’s just a constant reinforcement,” Sheakley says. “It all comes back to leadership, whether it’s from me or the business unit leaders or anyone within the company. If they don’t show those leadership values every day, then the words on the piece of paper aren’t going to mean anything. Again, it’s living by those standards, believing in them, and showing people that that’s what leadership is.”

Dedication to the company values has led Sheakley to continual growth. The company’s revenue reached $122 million in 2009. In March 2010, it acquired the assets of GatesMcDonald HealthPlus Inc. and Gates, McDonald & Co.’s state fund workers’ compensation third-party administrator business.

Here is how Sheakley incorporates the company values of urgency, respect, independence and optimism when it comes to leading his 2,200 employees and meeting customers’ needs.

Get employees to believe

Sure, Sheakley plays a role in maintaining large customer relationships and he answers a client’s call when needed. But gone are the days in which he is involved with major customer contact.

“The CEO’s role when it comes to customers is setting the direction of your company so that your customers are being well serviced and their needs are being met,” he says. “The CEO’s role is always setting the direction of the business and setting the core values and what it is we’re going to do on a day-to-day basis.”

So how do you set the company’s direction and values? It’s more than just communication.

“The biggest key is whether they believe in you or not,” Sheakley says. “You as their leader, they need to believe that you’ve bought in. This isn’t just something that you put down on a piece of paper. These are really part of what your goals are and your ambitions and your core values. If they believe that, then they’ll buy in.”

You can’t make people believe anything. But you can show them you believe by how you act and what you say.

“If you have consistency and passion, then they’ll believe,” Sheakley says. “And if they don’t believe, then they’re not the right people.”

The consistency comes in your communication and reaction. With more than 2,000 employees, Sheakley can’t go to each one and explain the company’s values and his expectations — perhaps you’re in a similar situation. He specifically outlines his message to his direct reports and asks them to pass it along. In regular conversation with his direct reports and when he has a chance to directly communicate with employees, he touches on the essential topics, which to him are the company’s values, mission and customers.

While having a well-crafted, repetitive message is good, you need to make sure your values are being reinforced by not only you and your management team but also by the employees themselves.

Sheakley has lunches with employees for certain anniversaries. It’s an opportunity for him to make sure employees understand the direction of the business, and it’s an opportunity for employees to ask questions about the future of the business.

Not everyone is going to open up, but, as Sheakley says, if you get 10 people in a room, a few will guide the conversation. What the open and honest dialogue allows, though, is for employees to take that conversation back to their peers.

“Hopefully they’ll take away from those lunches a little bit more about how I think and I feel about the business, and then they go back to their department,” Sheakley says. “People ask them what was lunch like. They spread the word. They say whatever the conversation was at lunch, ‘Here’s what we talked about.’”

Sheakley has taken the ingraining of values one step further and created the Eagle Leadership Program. Three to four times a year, a group of about half-dozen employees is selected to join the Eagle class.

Supervisors nominate the employees whom they think show leadership within their own department and have potential leadership value for the company. The employees present to a panel why they’re interested in being in the program and they’re either voted in or voted out.

A series of leadership courses with lectures and books are taught by different management. For each group, the teachers, the employees and what is taught changes but the general idea of training on leadership and company values stays the same.

If you’re going to conduct leadership training at your own company, the essential element that cannot be overlooked is your core values.

“You are grooming leaders; people then see the value that you attach to it,” Sheakley says. “If you’re willing to spend this kind of time on them, they feel as if this must be really important to management.”

Live the values

Communicating the values and showing that you, as the leader, believe in them is only the first step. You have to make sure your employees live the values. And they live the values every day.

In setting the company values and direction, Sheakley is clear on his expectations and has systems in place to make sure they’re met.

“The CEO has to set the expectation, because everyone is looking at the CEO to set the expectation,” Sheakley says. “As long as it’s a rational expectation, then people are going to buy in. If you don’t get buy-in, then you have to examine what your expectations are or you need to find people who are going to buy in.”

A prime example of Sheakley’s expectations blending with company values is customer service. His client expectations include being up front and honest, making customers feel comfortable that the company is there to serve them and using a sense of urgency, basically answering the phone when you can and returning calls that you’ve missed as soon as possible.

What Sheakley sees as its standout difference in the industry is its ability to provide personalized customer service. To provide that level of service, the company relies heavily on feedback.

Every time a customer service or field person talks with a client, notes from the conversation are recorded. Details include whether the conversation took place on the phone or in person, who initiated the conversation and why, what was the resolution to the conversation and any other pertinent information.

The strategic nature of collecting data is informative for many reasons, including tracking customer trends and truly understanding whether management’s expectations are being heard at the bottom level.

“First of all, you understand your client better and what their needs are,” Sheakley says. “Second, it’s a reminder if a caller would call and if they want information on why did we do that that way, we can refer back to our notes and say, ‘Well, here’s what we talked about, and here’s what our notes were.’ We can also be very specific about why or why we didn’t do some action on a particular claim. It also helps us in our dialogue with the client. ‘Yes, we were on top of it, and this is what we did.’”

Having an open and honest dialogue with customers is really how you’re going to understand their needs and get the feedback you truly want to determine how your employees — in Sheakley’s case the customer service and field executives — are following through on service.

“We come back and gather a lot of that data and have conversations internally about what are the highlights and the things that our clients are asking for,” Sheakley says. “What is important to our clients and what is not, because what seems maybe what we do for a client or a group of clients (is important) is not necessarily perceived as valued.

“A lot of it has to do with listening. Not only listening but also accumulating the data, and then trying to do something with it so we’re not just thinking that, ‘Well, we’re providing a product here and this is what you’re buying so good luck.’ It’s more about listening to what the client is really asking for and trying to give that to them.”

It’s important in every customer conversation to ask questions like: Are there any other needs you have? Is there anything else we can do to help? By asking those basic questions and pausing to hear the answers, you’ll pick up on little things. It’s truly listening to their needs.

“Being a good listener is always predicated on being empathetic to the other party’s needs,” Sheakley says. “If you can listen with the idea that you really want to have empathy for what the other person is saying and you really do want to hear and feel the pain of whatever is going on from the other perspective, then you’re going to be a good listener.”

Sheakley’s supervisors and employees look over the notes taken from the customer conversations to understand whether trends are taking place. If a trend is identified, the information moves its way up to the direct reports and possibly on to Sheakley if a discussion needs to take place on making changes.

No matter what the outcome to the answer, you always have to follow up with customers and be honest about what you can and cannot do to meet their needs.

Using a system that tracks customer conversations and satisfaction has allowed Sheakley to retain customers and be better prepared to handle questions and concerns, it has also boosted employee morale from the standpoint that employees realize management takes customer service seriously.

“Leadership all comes back to whether your people believe in what you stand for and what you’re saying,” Sheakley says. “If you don’t actually live it out, then they’re not going to believe it. It all comes back to whatever goals and ambitions and core values you set for your business. You’d better be willing to live those yourself.”

How to reach: Sheakley, (800) 877-2053 or www.sheakley.com

Edward W. Stack had all sorts of doubters when he suggested expanding his family’s business beyond its two stores in upstate New York. Even his father, the founder of what is today Dick’s Sporting Goods Inc., didn’t see a reason to grow.

But what Stack had that others didn’t was a vision to build on what was already a solid business.

“You’ll have a lot of people who won’t really share your vision and will tell you all of the reasons why it won’t work,” Stack says. “But if you really believe in it, you move forward anyway and find ways to make it work.”

That confidence in his vision helped Stack, chairman and CEO of the sports and fitness specialty retailer, overcome obstacles, such as moving the company’s main offices from Binghamton, N.Y., to Pittsburgh, taking the company public (NYSE: DKS) and expanding from two stores to a national business. As of May 1, Dick’s Sporting Goods had 424 stores in 41 states, as well as 91 Golf Galaxy Inc. stores in 31 states.

As the company has grown throughout the years, the vision has evolved and helped to create what is now a $4.4 billion company that employs nearly 26,000 people. Just as important as developing a sound vision is being able to clearly communicate the vision and being aware of when it needs to progress.

“If you don’t have a solid vision, you probably aren’t going to be able to grow profitably,” Stack says. “It isn’t any different than if you were going to jump in the car and drive from here to New York City. If you didn’t have a road map or a vision of how to get there, you wouldn’t get there.”

Communicate the vision

Although you might have a strong vision on paper, it’s not truly developed until it is clearly communicated to your employees and is being lived.

“There’s no silver bullet,” Stack says. “You need to do a number of things. You need to get out and talk. You need to give the ability to communicate through a Web-based communication function. You need to be able to get your message out with the people who are running the particular business areas for you. And you need to get feedback.”

The first step in making sure your vision is going to reach all of your employees is to outline an effective chain of command for communication and present the same message from multiple avenues. For example, Dick’s uses an intranet site to supplement direct communication about what is happening throughout the business.

You need to state and repeat a clear and concise vision for employees, but just as important is your ability to rely on your team to get that message out.

“If you don’t have an effective management team, your vision will never grow to the heights that you hope it can, because one person or two people can only do so much,” Stack says. “To grow a business from two stores to 500 stores takes a lot of smart people to understand the vision to make that happen.”

You need to make sure the roles of your management team are clearly defined when it comes to communicating anything within the company, and you need to have the right people in each of those functions who can speak about the vision. At Dick’s, the message is communicated from top management to district managers, then to store managers before it gets to store associates. But the message can’t be lost as it’s funneled through the organization.

Stack says it’s fairly easy to tell who on the management team understands the vision, has bought in to it and can articulate it — because they’re engaged and participating in the business.

“They live that aspect of being out in the business, of wanting to communicate, of listening, getting feedback of what’s right and wrong out of our business,” Stack says.

Just because you’ve set a vision and you’ve asked for it to be passed through the organization doesn’t mean employees don’t need to hear it from you.

“You need to constantly be talking about what the vision is, what the goal of the business is. You have to constantly communicate that and then you have to represent that vision. You have to follow through; you can’t say one thing and do another. It’s very important for whoever is starting a business that you have a clear vision and you follow through on that vision. You never ask somebody to do something that you wouldn’t do yourself.”

Stack’s commitment to the vision is shown by his presence in the company’s stores. He spends about five or six days each month talking with associates and customers in Dick’s Sporting Goods stores.

As the leader of the company, you need to be visible. You need to verbally communicate the vision to your employees, you need to show them that you live the vision, and you need to use that time to ensure the right message is getting to those who directly work with your customers. Stack uses his time in the stores to accomplish each of those tasks.

While you’re casually speaking with employees and customers, listen to what they’re telling you. In their comments, is there a separation between your vision and how it’s being executed? Other aspects of the business Stack looks at to test whether the vision has been clearly communicated are the appearance of a store and its sales numbers.

“If sales aren’t what they should be at a particular store and other stores in that region are doing fine, then you know you’ve got somebody who may not be doing his or her job properly,” Stack says.

You need to take the time to ensure that something so valuable to your business — your vision — is really being communicated and lived. If not, you need to examine where the disconnect is occurring. It may, in fact, start with you.

“If you’re having a difficult time communicating your message to your employees, the problem is probably with you, not your employees, which means you need to find a different way to communicate,” Stack says. “One of the best ways to find a different way to communicate is to go ask them. You need to ask the associates that you’re working with and say, ‘All right, this doesn’t seem to be getting across. What am I missing? What do you need from me to do a better job? What do you need from me to understand better what we’re trying to do?’ If the message isn’t getting out there, you have to look inward, not outward.”

Gather feedback

Just as you need to be talking with employees and customers to make sure your vision is clearly in place, you need to be out in your organization speaking with them to understand your business and whether the evolution of your vision is really meeting the needs of your customers. The final piece of communication is asking for feedback.

“If you’re in tune with your business, you’ll see things changing or modifying … that it’s time to reinvent your vision or to make some modifications to it,” Stack says. “You need to be aware of your surroundings and what’s going on in your business and what’s going on with your competitors and what’s going on in the marketplace.”

Stack uses that face-to-face time in the stores to really get a grasp on part of that equation, and it’s something he encourages all of his managers to do, as well.

“You need to talk to your customers, because without customers, you have no business,” he says. “You need to have information firsthand to understand your business. Your customers are the ones you’re trying to serve, so you need to get out there and talk to them.”

While in the store, Stack approaches the customers and asks them about their shopping experience to try to solicit feedback. You don’t need to make a grand to-do about who you are or what title you hold. Simply ask questions to understand how customers feel about your company — more specifically, what they think you’re doing right and wrong.

“What service are you not providing that you need to provide to keep those customers?” Stack says. “You can’t be afraid to hear bad news.”

Along with the customers, you need to be gathering information from those on your staff who directly communicate with the customer. Ask them what the customer is saying about your business.

“We’ve been able to create a level of trust with our associates out in the field that they are confident telling me or telling other members of my management team when things aren’t right,” Stack says. “They’re not afraid to deliver bad news. They know we’re not going to shoot the messenger.”

It takes time to build rapport with employees, but it’s something you need to do. The best way to build that trust is to show that you’re actually listening, that you appreciate their input and that they won’t be reprimanded for sharing negative information.

“You talk to them, and you listen to them,” Stack says. “Then you act on their suggestions or you come back and communicate as to why you can’t, but the communication doesn’t end when you leave. You can send the message to them that you value their opinion by fixing the problem that they have or you come back and say, ‘I understand your issue, we cannot make this change and this is why.’ After you’ve done that for a while, they get to understand you, they get to trust you and others on your management team. They’re only too willing to tell you what’s going on in the business as long as they know there aren’t going to be repercussions. We’ve developed that kind of a relationship.”

One of the ways in which Stack developed that relationship was by implementing a fun and engaging process that Dick’s dubbed the “stupid list.” He met with his store managers, told them to go back to their stores, share the idea with their staff and submit through e-mail three things they felt needed to be changed. No topic was off limits.

“I think it’s really simple,” he says. “Ask people for the things that you have them do that they view as not adding value. We did it as a fun thing.”

Gathering the feedback is just half the battle. The second part is analyzing. When you’re gathering information from so many places, you are not, obviously, going to be able to act on every decision.

“We looked at the 10 things that our associates indicated the most,” Stack says. “If somebody said, ‘This is a stupid thing,’ and we heard that 50 times and something else we saw was stupid but we got that three times, we went with the thing that we heard more.”

Don’t try to tackle the concerns and ideas presented by employees on your own. You need to involve individuals with firsthand knowledge of the reason for the process. Stack took the ideas deemed stupid to the management team that executed that portion of the business.

“If it has to deal with your buying group, you go talk to the people in your buying group and say, ‘These are some of the things (the employees) viewed that we’re doing wrong. How can we change that?’” Stack says. “You go right to the source and put somebody in charge of making those decisions.”

Once the decision is made, you need to follow up again with everyone and explain what decisions were made and why. Stack follows up with verbal and e-mail communication.

Remember, the purpose of gathering feedback is to better understand your company and find ways to help your staff execute on ways they can better serve customers.

“It’s a great educational tool for the CEO to see what truly is going on in the business,” Stack says. “I’ve tried to make sure that I’m not insulated from bad news, but sometimes people don’t want to tell the CEO bad news. This is a great way for you to get right into the heart of the business and see what’s right and what’s wrong.”

How to reach: Dick’s Sporting Goods Inc., (877) 846-9997 or www.dickssportinggoods.com

Brown Smith Wallace LLC made decisions in 2009 that many companies probably can’t say they replicated. The accounting and business consulting firm didn’t have large layoffs, it didn’t cut back contributions to employee 401(k) plans, and it didn’t renege on employee raises.

That doesn’t mean the firm didn’t face a year filled with difficult choices. Many changes were made as the company worked to keep revenue steady at $26.4 million. Regardless of whether your company is facing good or bad times, there are essential elements of leadership you must maintain, says Harvey Wallace, co-founder and managing member. You must keep employees engaged and informed, perhaps even more so during financially tough times.

“You need to work a lot harder in down times than you do in good times to get the message out there,” he says.

Wallace stays connected with his 212 employees through multiple streams of communication and setting a context for how the firm is performing financially.

Smart Business spoke with Wallace about how to keep employees engaged.

Communicate to engage. It starts by being out front with employees and communicating what your vision is, letting them know what the expectations are. Our vision is to be recognized as the premier firm in our chosen market as demonstrated by the pride of those associated with us, our people and our clients. It’s setting expectations, communicating with people and continuing to work to move the organization forward.

No one wants to be with an organization that is either stagnant or moving backward, and so 2009 was one of those years where it was incumbent upon leaders that they keep that mood in place. Negativity is not something you can afford to share with your people.

Stay in front of employees. The word that we all like to talk about is communication, and it comes in many forms. At one of our firm meetings in late 2008, we, as most other companies, did realize there was a recession. It was either there or it was about to arrive. At our firm meeting, we addressed that head on, and our words were, ‘We choose not to participate.’ It gave the message to employees that we’re going to continue to keep heading in a positive direction and we understand that it may be difficult, but, as I said, we choose not to participate. That’s just an example. E-mail messages from me as managing partner, trying to update people on things that are going on, communicating any major changes in the organization.

It needs to be something that comes through not just the top management, but I think it needs to come through different levels of management. For example, in our firm, we have five different operating units and each of those operating units has a partner who is responsible for that practice. It certainly is coming from me as the managing member, but as we go down through the organization, it needs to come from direct supervisors of people in different practice areas so that they’re getting a consistent message that is communicated through technology, through e-mail, because that is how we all communicate these days, but [also] on a one-to-one basis so that the message is constant, it’s repeated and you avoid mixed messages.

It is important to make clear to the managers what our goals are and how we’re going to achieve it so that they are knowledgeable and can share that message with the people who report to them. That’s my job to make sure that our managers are informed and a part of the decision-making process and keeping everybody positive. I can’t repeat that enough. You have to continue to keep people positive because a culture that has been built over 30-something years in business can easily come tumbling down. We spent 37 years building our culture and building our firm, and we couldn’t — and no business should — allow one bad year to change the direction and the message.

Share financials. The annual report, as an example, we started doing that four or five years ago. It’s a summary of our performance during the year that’s just ending. We publish it in December; we send it to the homes of our employees so that it’s something they can share with their families.

It’s everything from financial statistics to information on major new clients, to practice areas, new individuals that come into the firm, we highlight people who have had significant anniversaries with the firm. The annual report is just that; it’s a state of the firm in the past year and, of course, ... how we’re doing compared to other years. I certainly think that’s one thing that is important to provide to our employees.

(A) firm meeting is ... the spoken version of the annual report. Our goal at that point is to provide a lot of the same information to employees.

Even in bad times, employees get comfort looking at our statistics, our revenue goal achievements, so that they can see that the organization is moving forward. It makes them feel a part of the organization. As I said, we want to share that with the families because there are 200 families who are a part of this organization, and we take seriously our responsibility to those 200 families. It brings them into the process, understanding who the firm is, what our values are, how we’re moving forward.

It is just so vital to everyone to understand the finances of their organization. Our information tends to be high level as opposed to every detailed line item, but certainly what I think employees, and every member of an organization, can certainly appreciate and understand is the revenue. Is the firm growing? Is the firm headed in the right direction?

Obviously, many public companies, all of their information is available, but I think more and more private companies are going to share information with their employees.

How to reach: Brown Smith Wallace LLC, (314) 983-1200 or www.bswllc.com

At some point in time, you may have looked at your product portfolio and realized it went stale. The same thing happened to Brad Wiandt.

He just had been named president of Madison Electric Products and the recession began to take a toll on the company’s sales. With 40 employees and nearly $30 million in revenue, he had limited resources to revamp the product line.

“The only way to accelerate the process is to add a bunch of overhead to the process or outsource,” he says.

Madison went with the latter. Well, kind of. The product provider to the electrical supply and manufacturing industries developed The Sparks Innovation Center in order to create partnerships with those in the trade who are looking to market their already developed product ideas.

If you’ve analyzed that you don’t have the resources or the time to develop or enhance your product line, perhaps it’s time to consult outsiders.

“The answers don’t always reside within your organization,” Wiandt says. “It’s easy to get confined with the barriers and the four walls that surround your company. Oftentimes you don’t have to look too far. Oftentimes the expense is even less than what you would incur internally to find solutions to problems that you’re facing. We basically outsourced our product development to people who know best.”

The Sparks Innovation Center includes a Web site that details the company’s history and product portfolio and allows inventors to submit ideas through a questionnaire. The proposals are received by Madison’s director of international sourcing.

You need to place someone in charge of the process to weed out proposals that are an obvious mismatch. But you cannot take a solo approach in determining whether a product fits your company. Every department that will touch the product needs to be included in the conversation to weigh the pros and cons.

Wiandt plays a direct role in the process.

“Even if we were a large business this is something that I would remain very active in because it is so important in so many aspects to our future direction of our business,” he says. “And I think anything that a president has passion about they should be actively involved in because passion is what drives business at the end of the day.”

He includes sales, marketing, sourcing and procurement, and engineering in the conversation.

“Everybody has a different vantage point and the decisions that we make on a product affects all of those departments,” he says. “I try to involve all of the facets of the business that are ultimately going to be responsible for the success of the product out in the market.”

Whether you’re brainstorming product ideas in-house or discussing those brought to you, there are very specific questions you must ask yourself. Do you have the capability to develop or manufacture and market the product? Does it fit within your wheelhouse? Does it complement your existing portfolio?

When Wiandt sits down with his team to discuss already generated product ideas, the first questions are directed toward sales.

“I look at them first and say, ‘Is this something you feel you can sell out in the market,” Wiandt says. “The biggest problem is what is the sell-ability of the product — that’s the litmus test of the go or no-go.”

The analysis is crucial in order to make sure you’re improving services for customers. At the same time, when you’re taking on a new initiative, risk is involved.

“You have to be willing to take some risk, and you have to be willing to have some tolerance for failure,” Wiandt says. “Usually those are all learning experiences for the organization to springboard into becoming a better, stronger organization.”

Buying in to change

Chances are the word innovation is buzzing around your business. As companies tried to stay afloat during the deepest part of the recession and now begin to tread water, finding new, innovative ways to go about business surfaced. And with that comes change.

“Change can be painful,” Wiandt says. “But innovation requires change.”

To make employees comfortable with change, you have to maintain a healthy dialogue, explain the reasoning behind the change and ask for feedback on ways to better processes.

Wiandt leads his 40 employees at the product supplier company by maintaining regular communication, asking his staff for their ideas and following through on the good ones.

“(It’s) having an open-door policy, inviting the communication, but then following up and acting on that,” Wiandt says. “A lot of employees are used to sharing their ideas and never seeing anything happen or change with those ideas. I think the biggest mistake that managers or presidents of companies can make is not act on the good ideas. People buy in to the company and the direction and the changes that are being made if they see that at the very top their ideas are being heard and considered and acted upon.”

How to reach: Madison Electric Products, (800) 631-7775 or http://www.meproducts.net/

Rick Arquilla, president and chief operating officer of the plumbing and drain service Roto-Rooter Services Co., stood in front of a call center in Chicago and told America he was going to test the dispatch system he helped design.

He traded in his suit, tie and title for jeans, a blue flannel shirt and a camouflage hat and entered the center using the persona Hank Denman. After all, this was the TV show “Undercover Boss.”

His first assignment was learning the system. The camera zoomed in on Arquilla. Pen and paper in hand, he scrambled to take notes as the operator taught him dispatch’s color-coding system.

“So orange is before green?” he says.

“Yes,” says Candace, the operator. “Am I confusing you?”

“Yeah,” Arquilla says. “See, I’m color blind.”

Dead silence.

Arquilla found it somewhat humorous that a color-blind man would develop a model based on colors. Then again, he never intended on using it.

How often are decisions made at the top of your organization without really understanding what it means for the people who do the work? Perhaps you’ve gathered your direct reports in a room to piece together a plan without employee input.

“It caused me to pause and say, ‘Wait a minute,’” says Arquilla, who oversees 3,500 employees. “There are a lot of decisions that we make here, at the home office, and implement from conceptual stage to actually rolling it out nationwide. Maybe no one who has to do the work ever got a chance to try it to see if it works or not or give us feedback and say, ‘Most of it’s right, but some of it doesn’t make any sense.’”

If you want a truly effective organization, you have to constantly engage the people in your company who are closest to the customer and who are actually doing the work.

“It’s slowing down for a second and asking do we have enough checks and balances along the way to make sure that we don’t have unintended consequences from being too quick to want to implement a general policy, a new procedure, a new way of running our business. And we haven’t spent enough time getting people on the front lines to give us open, honest feedback.”

Test your decisions

It’s not like Roto-Rooter makes absurd decisions that don’t account for how it will affect customers and employees. In truth, many decisions are tested on a smaller scale before nationwide implementation. But Arquilla says that’s not enough.

It’s not enough to run a trial and take the answer of the person in charge at face value. You need to trust that management is telling you the truth, but you need to reinforce the information with feedback from people doing the job.

“We all tend to love what we invent or what we work on, so I don’t think you can be entirely objective about something that you want so badly to work well,” Arquilla says. “You have to get past the person who created the concept and get some totally unbiased feedback.”

How do you gather that feedback? You talk to the front-line employees.

The first thing you need to determine is to what questions are you trying to find answers. To use your time wisely, you must have a focused reason for asking for feedback, whether it’s about a new system or a key issue that holds your company’s attention.

“When I go out in the field, we know what we’re looking for because we know what the priorities are,” Arquilla says. “You have to have discipline to look past the little, ankle-biter problems that get in your way. You have to stay focused on the stuff that really matters because there’s always going to be, pick a number, 50, 70, 100 things you could be working on.”

Once you’ve determined your reason for being in the field, you’ll have a better understanding of what employees you need to talk with and what you should be asking. Then, it’s time to work.

During his time disguised as Denman, Arquilla learned that the experience is completely different when you put on the uniform or, in Roto-Rooter lingo, wear the blues, and work side by side with the employees.

“I would suspect most senior-level folks pride themselves that they stay connected and they understand what’s important on the front line,” Arquilla says. “I’m not sure any of us are quite as connected as we think we are or we’re out there as much as we’d like to be. I don’t think it’s enough just to show up and shake hands and spend the day on your BlackBerry. It’s physically doing the work.”

Dressing the part, turning off your cell phone and being willing to learn, still isn’t going to be enough to buddy up to an employee and get them to openly talk with you.

“The first order of business is can you disarm this person and let them know you’re really there to learn,” Arquilla says. “You’re not there to put (on) a senior-level hat and start lecturing and pontificating about the way the world ought to be. If you want the real deal and you want to really, really know what’s going on, you have to be there to learn, not to judge.”

There isn’t a three-step process that immediately disarms employees to get them to relax. But word travels fast among staff. If you can convey that you’re there to learn in order to better the company’s processes and you hold true to that promise, you’ll build a reputation that employees can openly and honestly communicate with you.

Arquilla is so used to trying to make employees feel comfortable that during the “Undercover Boss” taping, he was lectured by the production company to go easy on the charm. After all, he was introduced as a new employee, not the president.

“If the word is out on the street, ‘Don’t tell this person anything because they’ll beat the crap out of you,’ I know there isn’t anything that person can say when they go in that is going to force anything from (their employees),” Arquilla says. “If the flipside is, ‘Hey, we’ve heard pretty good things about this person. They’re pretty willing to listen. You can tell them the truth even if it’s not good, they’ll still listen and they’ll try to take that information and do some good with it.’ Then, I think you’ll hear the truth.”

Once employees have warmed up to the idea of you working alongside them, make sure you help, observe and ask on-point questions. Staying committed to the task at hand will reinforce that you’re only there to learn.

For “Undercover Boss,” Arquilla unclogged a tub, cleared sewer drains and welded. For a company based on quickly meeting the customers’ needs and matching the right skill set with the job in the field, going in, Arquilla didn’t realize what each job involved. Doing the job gave him a new perspective. It also taught him not to assume anything while learning from front-line employees how the process you’re trying to understand works.

“Don’t be too assumptive on how long a job takes or how difficult it is,” Arquilla says.

Being on the front line also means talking with customers and understanding how the decision you’ve made affects them. If Arquilla is in the field, he sees himself as a front-line employee, not the president. When you’re in front of customers, ask about the service and the way it is delivered. They’ll tell you.

“I love it when they go, ‘It&#

x2019;s not my business, but I don’t know why you guys do fill in the blank,’” Arquilla says. “Sometimes when they tell me what fill in the blank is and they’re not happy about it, it stings a little bit. But it probably wouldn’t hit home if I was reading it in a survey form.”

Throughout the process, remind yourself why you’re in the field to begin with and what you need to know to make an informed decision on whether changes need to be made.

“At some point, the burden falls on you or any other senior-level person to take away what you’ve learned, and somebody has to be held accountable to make a decision,” Arquilla says. “But if you don’t (get) the truth while you’re out there, then your decisions are only as good as the information the front line’s willing to give you.”

Make necessary changes

If the feedback you’ve gathered suggests employees are unhappy or the customers are unhappy or both are unhappy, that’s your cue that changes need to be made.

“The best decision we make is when the customer says, ‘This is pretty cool,’ and the employee says, ‘I like it as well,’” Arquilla says. “If one or both think it’s a bad idea, then it might be a classic case of making a decision behind closed doors that doesn’t fly very well when reality sets in.”

In that case, you have to be humble enough to admit your decision was flawed.

“Culturally you’ve got to have a company that says, ‘There’s a lot of good ideas out there, but you can’t always be right,’” he says. “God knows, I have a long list of things that haven’t worked well for me and as well for the rest of the senior management team, so I’ve got to be willing to accept defeat every once in awhile because then our employees will view it a lot more real, having (admitted) mistakes along the way.”

Your employees aren’t going to believe that their opinion is valued if you ask for their input and do nothing to better the situation. Along that same line, you have to acknowledge a bad decision was made and show employees you’re willing to make changes. If change isn’t seen, employees will shut down and be reluctant to share future information.

“It’s your behavior; it’s what you do,” Arquilla says about acknowledging bad decisions. “You change a policy, you say, ‘Hey, we thought this would work and it didn’t. Effective today we’re not going to do it anymore. Based on what we’ve learned, we’re switching gears.’ It’s more not what you say; it’s what you do. Talk is kind of cheap, and I think the front line is somewhat guarded and skeptical of talk, talk, talk because that’s easy and that doesn’t require much.”

If in gathering feedback you’ve determined a policy or a procedure needs changed, sit down with the necessary decision-makers and your employee and customer input and make adjustments. In the end, the questions are the same: “Do the customers feel good about it? Do our employees feel good about it, and can they live with it?”

When a solution is made, again, go back to employees and communicate.

“Ultimately, our bias at Roto-Rooter is we think your immediate supervisor is the person that most people want to hear the change from or want the interpretation of what this change means,” Arquilla says.

Say, for instance, the change was made in the way Roto-Rooter operationally deals with residential plumbing; Arquilla makes sure the information is passed through the proper chain of command. It starts with a conference call with him to his direct reports. Then they’re asked to communicate the changes to their direct reports, so on and so on until it reaches the front line.

The important element is that it’s communicated to front-line employees in a way that opens a discussion and dialogue that explains why the change was made. Arquilla doesn’t find sending an e-mail or a written mandate effective from a buy-in standpoint. After all, the follow-up communication is a way to put a personal touch on the fact that you’ve listened to employees.

Arquilla thinks the new commitment will better position the company for growth and employee and customer satisfaction. Roto-Rooter’s North America annual revenue is around $700 million, $370 million of which comes from Roto-Rooter Services Co. and Roto-Rooter Corp., which make up Roto-Rooter Group Inc. The remaining revenue comes from independent franchises.

“It would be an awful feeling to say, ‘What you think and the questions you have don’t really matter to people higher up in the organization who made the decisions, so just deal with it and live with it,’” Arquilla says. “That’s why we feel we have the need to explain why.”

HOW TO REACH: Roto-Rooter Services Co., (513) 762-6690 or www.rotorooter.com

When Jim Hensler joined Horsehead Holding Corp. (Nasdaq: ZINC) in 2004, he was charged with leading the zinc producer as it emerged from bankruptcy. Then, just as the company reached its strongest financial hold in years, the recession hit. A steep cost drop in the price of zinc was the primary reason Horsehead filed for Chapter 11, and Hensler was tired of seeing the company fall victim to the commodity price fluctuations that rock the markets during challenging times.

So in 2008, Hensler, chairman, president and CEO, led a charge to heavily invest in growth strategies and eventually diversify the business to make it less subject to cyclicity and commodity price fluctuation.

Horsehead’s leadership team came to two conclusions: One, there wasn’t going to be more room for growth in the area the company was in, and two, it still had significant exposure to fluctuation in zinc prices. So Hensler and his team headed to the drawing board to create a strategic plan that would involve looking for new growth opportunities.

“You’re always better off sticking with what you know and what you’re good at and trying to maximize that, so that’s what we did,” Hensler says. “Then once we got to the point where we didn’t feel we could do much more there, we redefined what we thought we were good at. … We tried to redefine who we are to allow us to broaden the scope of the business and provide career opportunities for growth.

“As long as you’ve got growth opportunities in front of you that are sticking to your basic strengths, then keep following those. When you get to a point where the current direction you’ve been on for a while doesn’t have the growth potential that you felt it did two or three years ago, now you have to take a look at other areas for potential growth in the business.”

Define your strengths

When you’re creating a strategic plan, you want to bring in people from different sectors of the business so that you don’t miss potential opportunities — or pitfalls. Hensler gathers Horsehead’s top 20 to 25 leaders and takes them off-site for the strategic planning process.

“It’s good to get away from the distractions that you’re dealing with on a day-to-day basis and try to take some time to focus in on one subject, try to hold everyone’s attention on that,” he says. “It’s hard to do that if you’re in your work environment.”

You can’t underestimate the value of involving a broad cross section of management in the conversation. You’ll get more out of the process if you have an agenda going on that allows everyone time to share ideas. It’s like with dinner guests: If you’re going to invite them to the table, you have to engage them in discussion.

“We try to structure it in such a way that each area has a role to play and a part on the agenda for the meeting we’re involved with, so as part of that process we get input from most people,” Hensler says.

Some aspects of Horsehead’s strategic planning process are fairly traditional. There’s time to review customer, market, product and competitor data. A second aspect includes breaking into small groups to allow for brainstorming and identifying strategic paths for the business that are then analyzed by the entire group.

Hensler says if you’re looking to grow, there really needs to be one focus during the discussion. The main question you must answer is: What are you good at? Ask yourself: What are your core strengths?

“It’s really sort of stepping back with the management team and discussing what is the value generating the work that we do in the business,” he says. “When you say, ‘What is your unit of competitive advantage of the business? What are the things that really make a difference?’ — it’s not a very long list. In most companies it’s only a couple of things. It’s identifying and having that conversation with the management team that identifies what those things are.”

Those questions can be answered through the typical analysis of your strengths and weaknesses. Closely look at your current focus, where your resources are and what areas of the company create the most value for your business.

Hensler and his team looked at their list and asked themselves: What will be the most profitable aspect of the company in the long term? Can we expand our level of activity there? Are our management, processes and procedures strong in that area?

While Horsehead is the largest zinc producer in the U.S., it’s also the largest recycler of hazardous waste, an industry from which many shy away. Trying to move away from zinc’s price fluctuation, recycling became a clear area to diversify. The decision allowed Horsehead to broaden its range of environmental services beyond zinc recycling, which it did with the acquisition of The International Metals Reclamation Co. Inc. (INMETCO), a recycling business focused on nickel.

“When you look at that and say those are really the core strengths you’ve got, now you start looking at businesses that match up against those strengths,” Hensler says. “Also, look at businesses that not only match up against those strengths but provide diversity.”

Your strategic plan is your map for growth, so it must identify the ways in which you hope to grow either organically or through acquisitions. Horsehead’s main goal is growth through acquisitions, so its strategic plan explicitly identifies potential companies to acquire.

“Part of our strategic planning process is to be identifying target opportunities like that so that when the time is right you’re not just then starting to think about those things,” Hensler says. “You want to be more proactive about it.”

No matter how you plan to diversify, you need to come into the planning process well researched. Hensler uses a combination of experience, external resources and networking, when identifying companies that might be opportunities for acquisitions. He relies on his more than 30 years in the metals industry, his placement on national and international boards and the networking of his management team to keep ears on possible future company matches.

“The other thing we do, though, as part of our strategic planning process, we commission third parties and investment bankers to do studies for us, and in some cases, ideas flow out of that,” he says.

As ideas are shared among your staff throughout the strategic planning process, certain themes will become clear to include in the final version of your plan. You need someone who can take those themes and develop a direction that is then placed in written form. Hensler takes charge of the process.

“Usually, I’ll take a first stab at listening to what I heard and putting together a plan based upon that, sort of setting down some guidelines as to how we would move forward,” he says. “You start out getting a lot of input, you try to condense that down into the key things that are going to be part of your strategic plan … and then you bounce that back to people in the organization.

“It’s a bit of an iterative process until you get agreement that says, ‘This is the way we’re going to move forward.’”

Communicate change

Once Hensler had his strategic plan done, he had to roll it out to employees.

Changes shouldn’t come as a surprise to your people if you’ve done a good job communicating the company’s goals. If your goal is growth like Horsehead’s, a new acquisition or plan to diversify the company shouldn’t be a shock.

“You have to set the context for where you want the company to go and then explain the changes along the way in the overall context of where you want to go,” says Hensler, who heads more than 1,000 employees.

Basically, the key to updating employees on new developments is explaining how the changes move the company closer to its overall objective.

“When we decided to move in the direction of diversifying the business, we communicated that to employees, explained why this makes sense and how it fits in strategically with what we’re doing,” he says. “That’s very important to not only communicate that to our existing employees but also the employees of the company that we just acquired and also communicating it to the outside world.”

Employees and investors need to be hearing the same information. And it doesn’t hurt to communicate with them from multiple angles, such as newsletters, e-mails, informal and formal meetings.

After Horsehead closed on the INMETCO acquisition at the end of 2009, it followed up with investors through a presentation at a Raymond James conference. The conference allowed for a public forum and open dialogue. The company also invited analysts who cover the marketplace to INMETCO for a presentation, a tour of the facility and an explanation as to how the acquisition fit in Horsehead’s long-term plan.

Hensler says the important factor in times of change, especially ones in a depressed economy, is that you, the leader of the company, are visible and you’re communicating a consistent message. That also extends to employees. Your employees need and want to be informed that you’re making the right changes so that they have confidence in your decisions and the business plans.

“Most employees understand that when you’re in a down economy companies have to do something,” Hensler says. “They want to understand that what you’re doing is the right thing. Are you doing it effectively enough so that the company is going to get through it?”

Chances are you’ve made reductions in staff, pay or budgets in recent years. Horsehead reduced staff, idled facilities and cut costs like most companies. You have to present those changes in a context of how and why those decisions were made and what that means for the strength of the company and the path for growth moving forward.

“Unfortunately, in situations like this, some people lose their job temporarily or permanently and the real question is, for the people who remain with the company, do they feel like you’ve done enough to secure their jobs going forward,” Hensler says.

You can ease qualms by being visible. That may mean scheduling more time in the field talking directly with employees.

“We have multiple plants and multiple locations, so it’s difficult to be out there all the time,” Hensler says. “What I try to do is get around to each of our plants on a regular basis, meet with not only the managers of the plants but also get out and try to meet some of the people on the shop floor. We try to do that in social settings as well as formal settings. It’s important to do as much of that as possible, particularly when you’re in a downturn situation.”

Horsehead’s growth process is ongoing.

The company’s revenue dropped the last two years, largely due to the fluctuations of zinc prices from $2 per pound in 2007 to below 50 cents per pound in 2008. To combat the price drop, Horsehead bought a put option on its production that generated $100 million in cash. That financial boost allowed the company to implement its growth strategies last year, which included two acquisitions, and end 2009 with no debt and positive cash flow. Net sales were $216.5 million in 2009 and revenue is projected to reach mid-$300 million for 2010.

But in recent months, Hensler has needed to do less convincing that the decisions made at the top were the right ones. The two acquisitions in 2009 allowed Horsehead to return its idled facilities to full capacity by the end of the year. And since acquiring INMETCO, nickel prices have risen.

“As you go through a recession, employees need to understand that you’re reacting in the right way,” he says. “They’re concerned about the long-term survival of the company.”

How to reach: Horsehead Holding Corp., (800) 648-8897 or www.horsehead.net

If Patrick Hampson ever hands you his business card, you’re just going to have to guess his title.

The same goes with any of MED3000 Inc.’s employees. While titles have some relevance at the health care management and technology company, positions purposefully have been left off each employee’s card since the company’s founding.

“That way we’re all partners at MED3000,” says Hampson, who actually holds the title of founder, chairman and CEO. “I think it’s just another thing that adds to the culture. You have to do a lot of things that just keep building at the culture, and at some point, the culture takes over for a company.”

Instilling a sound culture is important, but it’s especially vital when you’re taking a small entrepreneurial business as Hampson did, and you grow it to a national scale.

“It’s easy when you have one or two employees, and you can walk down the hallway and talk to them,” he says. “But you have to maintain it, and you have to hire people that believe in that culture.”

Since day one, Hampson has driven a culture based on strong relationships. The principle carries back to his youth where the hours spent on the court, on the baseball field and in the locker room taught him the true definition of team mentality.

“Whether it’s your clients or your employees, you’re less successful unless you have a relationship with these people,” Hampson says. “Everything we try to drive is relationship driven, and it makes us more successful on the service side, it makes us more successful on the sales side, and it makes us more successful on the employee-retention side.”

Hampson has grown the company from one employee to 1,760 at the end of 2009. MED3000 reached revenue of $137 million last year and is expecting $150 million for 2010.

Here are the two steps Hampson takes to maintain a culture of strong relationships and ultimately grow MED3000.

Find the right talent

MED3000 continues to add employees each month, and Hampson still uses the basic principle he started the company with: Hire smarter.

“To grow to $300 million, you still need to get people who can continue to bring ideas to the table and help analyze the marketplace and continue with re-engineering yourself and reinventing yourself, so you can continue to grow a company versus get stagnate and flat,” Hampson says.

Hiring smarter means you bring on board people with their own opinions and sometimes their own vision. The first thing you need to do is make sure you have confidence in your own abilities, your knowledge of the industry and your vision of where you plan to take the company. At the same time, you need to be open to listening to opinions that may change your mind on the company’s fundamentals.

“You really don’t want a lot of people just telling you what you want to hear because you’re not always right,” Hampson says.

Besides, isn’t the whole purpose of hiring smarter to bring in alternative viewpoints and experiences that will better your company?

“It’s like in basketball having free agents: You hire a bunch of great athletes, and then you try to make sure that these are great athletes that can work within a team concept,” Hampson says. “You basically try to hire smart people who can work within a team and who really want to move the company first and their careers and themselves second.”

From the onset, Hampson hired people with better credentials than his own and who possessed a belief in his vision and his culture for the company. That allowed him to focus on the vision, while the rest of the team built the company’s infrastructure.

Once you’re comfortable with the fact that you’ll need to accept other’s ideas, you need to find the right employee match. Hampson recommends first using your extended network of contacts.

“You try to get out into the community, you try to get into different situations where you meet other executives, even competitors,” Hampson says. “Then you work hard trying to get a relationship with those people. Get to know them on a nonbusiness aspect, and then, over time, you try to recruit them to the vision. It’s usually a pretty good process because they know who you are and where you’re going because they spend a lot of time with you.”

Whether or not you’ve built a relationship with the person, the way you go about the interview process is critical. Hampson places a large emphasis on listening instead of talking. Basically, allow the person time to interview you.

“We do a bidirectional interview where we’re interviewing them but they’re also interviewing us,” he says. “It’s important to listen and let the candidate do a lot of talking about what their vision is, what their goals and objectives are for themselves, and let them tell you what they would do if they were CEO. If you give the opportunity to people to really speak and feel comfortable in that environment of telling you their ideas, you really pick up a lot of good information, but you also pick up which candidates are the ones that fit your culture versus the ones that don’t.”

If you’re recruiting employees into a team-oriented culture — one that emphasizes building relationships and company first — the best indication of whether they’ll fit is if their answers include a desire to learn rather than teach. At the same time, Hampson says don’t gloss over the obvious such as indications on their resume that they’re a team player, their participation in team sports or maybe involvement in the community.

Also, take the face-to-face time to outline your vision for the company and see how they respond. Hampson lets interviewees know upfront that MED3000 is trying to grow from the bottom up and that the company is looking for entrepreneurs with a vision that can move them forward.

“At MED3000 if you have a job description and you want to be in a box with limitations of what you do, you probably wouldn’t be successful here,” Hampson says. “But if you’re a person who can work in a matrix environment and take a step back and try and figure out what you need to do on a daily basis for the best of the company versus what’s just in your job description, then you’ll be successful in our organization.”

Value each employee

Hampson sees his work force as not only 1,700 employees, but 1,700 families, 1,700 mortgage payments and probably close to 4,000 family members.

“That’s the most rewarding part of the business,” he says. “If you focus on that, especially in rough economies, it really brings extra value to the job.”

Thinking about those numbers has made MED3000 a more conservative and more sustainable company, but it’s also helped get to the core of how you can add real value to your company and to your employees.

For Hampson, valuing employees starts with a culture based on the fundamentals of relationship building: communication and empowerment.

First off, you need to be the one to set the culture and expectations. Hampson doesn’t only want employees to have good dialogue with each other; he also wants them to feel they can reach out to him at any time. He gets that point across by being in front of employees and constantly reinforcin g that message through communication, such as face-to-face interaction, e-mails, newsletters and phone calls.

“You should not sit in your corner office,” Hampson says. “You should go out and talk to people; you should e-mail them, communicate with them and let them feel comfortable communicating with you.”

MED3000 talks about the importance of communication. Its open-door policy is outlined in the company handbook. Employees and clients have Hampson’s and upper management’s direct contact information.

But if you want employees to buy in to your expectations for communication, you need to live them. Showing employees you value a relationship with them starts by simply knowing their names, knowing about their families and interacting with them in their environment.

“Employees actually see me out in their locations,” Hampson says. “I visit with them. I don’t always go out to meet with management; I actually go out and meet and walk around and shake hands with all the employees and talk to them and spend a day. I think, from the day we started the company, employees sent e-mails to me, and I respond immediately. I think it’s just really the communication we’ve instilled with everybody that that’s the way to be.”

When Hampson thinks 1,700 employees, he also thinks 1,700 opinions.

“That’s 1,700 opinions that can help you grow the company,” he says. “It’s a pretty powerful course.”

Showing employees they are valued means asking for their thoughts and giving them tools to offer feedback. But they’ll only do that if they first feel comfortable communicating with you and management.

Hampson is open to any employee e-mailing or calling him, and he makes sure every message is responded to within 24 hours. He expects his management team to use the same speed with personal responses. And if they can’t get back to the employee in a day, they’re honest.

“You give them the answer that you’re going to look into it,” Hampson says. “Then it’s critical that you follow up, and they’re not sending you an e-mail two weeks later, and you didn’t remember. We try our hardest to respond and get them the answer they need and or get them to the person that can answer the question for them.”

Obviously, at times, employees will be apprehensive to speak up or share a concern with management. So MED3000 has implemented a hot line where if employees have recommendations or concerns, they can call the number and leave an anonymous message for management.

“It’s for all 1,700 employees to communicate upwards and tell us anything we can do to improve,” Hampson says. “They can help in managing the company.”

The hot line runs along the same 24-hour rule that Hampson uses for responding — someone from HR or senior management tries to reply to the issue within a day.

You need to develop a way to receive employee feedback, whether it’s through a hot line, employee surveys, employee evaluations, exit interviews. Whatever process you think best fits your culture and will best keep a pulse on your organization.

But Hampson says evaluation and surveys can’t take place of actively talking and listening to employees.

“You have to set aside the time,” he says. “After you get opinions and some of the opinions are successful, you have to reward people so they continue to give you opinions. But I’d say the biggest issue is making sure that not only yourself but also your management team sets aside time to listen to your employees. Then take action on the good suggestions that they have.”

The key to rewarding people is to make sure every employee knows what that person did. In MED3000’s case, if an employee in California did something praiseworthy, those based in the company’s Connecticut office have heard by way of e-mail or employee programs.

“This year, we actually shared some of the profits of the company because the employees really had a great year,” Hampson says. “We gave them surprise bonuses. So when they see they share in your success, it creates that culture of being a family and everybody working together,” he says.

There are two ways to grow a company according to Hampson, hiring people who will preserve the culture you’ve set and valuing employees’ ideas.

“The only thing I can tell you is keep growing from the bottom all of your employees and your managers and your senior managers,” Hampson says. “You keep the people who want to work in this type of culture environment, and you keep influencing their decisions by communication and access and transparency. It’s just something you work at all the time.”

How to reach: MED3000 Inc., (888) 811-2411 or www.med3000.com

Sunday, 02 May 2010 20:00

Adding on

And. Or. Those are two very different words, and Randy Myeroff wants his employees to understand the distinction.
 
When Myeroff presented growth at Cohen & Co. Ltd. a decade ago, the initial reaction of the employees was that growth would take precedent over the accounting firm's principles.
 
"Human nature is that if you're asking me to focus on one thing it probably means that's more important than something else," says Myeroff, president and CEO of the accounting firm. "That's the most significant challenge of any company, realizing in a different environment you have to focus on different things and getting people to understand it's and, and, and."
 
Every business faces cycles. You need to not only adapt your focus but your employees need to buy in to the change to help make it successful.
 
Myeroff, who has 225 employees, says it's all in your approach. Instead of commanding change, walk employees through the reasons why. And make sure you have top down buy-in.
 
Smart Business spoke with Myeroff on how to present changes, like growth, to employees.
 
Present the situation. It's more simple than people give it credit for. Instead of taking an approach that appears to be an edict that says, 'This is what we're going to do, and this is why we're going to do it.' Sometimes if you step back a little with your employees and talk about where the firm is heading, I think you can take an approach that says, 'Will status quo work for us? Based on what we have today and based on where we want to be and based on the things that are part of our foundation that we're good at, if we keep moving forward, will this sustain our organization? Will this provide the opportunities that you want? Will this allow you to live the life you want to live?'
 
What happens is it becomes very obvious because the reason you want to add something like growth is because you've figured out if we don't grow then we can't continue to invest in the community to the extent we want to, we can't continue to stay on the front end of technology the way we want to, we can't continue to have a very large proactive tax group that can put money back in client's pockets. We can't do that if we don't move forward because growth creates opportunity.
 
So you talk about, 'Let's presume we continue to grow at the level we're at. Here's what I see.' If I go back and say, 'At this level, this is where we'll be in five years. Does that work?'
 
What happens is people look and say, 'Oh my goodness, no, that won't work.'
 
It's real easy to say, 'OK, what we're doing isn't going to work so we need to do something different. As uncomfortable as it may be, as much as I want you to get out of your comfort zone, you've been willing to go through an exercise where you've really convinced yourself that this is important. Even if I don't like it, I'm going to have to accept it because we need it.'
 
If you're surrounded with a lot of smart people and they go through that process, it's pretty easy for them to rally around things like growing. It's not a case of follow me and I promise you something good at the end. It's a case of this is what we're trying to build and if we don't do better in this area, then frankly you won't want to work here someday. There will be a point where you'll say, 'Boy, I don't want to be here because you guys didn't plan for the succession of technical quality because you guys didn't plan for growth so there's more room for more owners.'
 
Then you get down to the detail. It's not easy to execute, but it's easy to get people to commit to.

Get buy-in. I think you have to get in front of people face to face and let them hear what you have to say. Let them read your emotions when you're saying it, give them a chance to ask questions.
 
A lot of times in larger groups people don't want to ask a lot of questions, but they'll come around. They'll get to thinking and questions will come out eventually. But we met with everybody in the firm.
We started with an ownership retreat. That group went through a very extensive three-day exercise of ... along with all the things that are so key to our foundation, what level of growth will complement all of those things and allow us to be the organization we want to be.
 
If you try and go down an initiative and your ownership or senior people are what I call silent killers, you're in big trouble.
 
If you have people who are violently opposed to something and they're willing to yell and scream and argue, I think that can be healthy because you know where they stand, it lays it out, people have the ability to say they don't agree. When you have people who are just passive naysayers - 'I'm not going to yell and scream, but when one of the people comes and asks me what I think, I'm going to roll my eyes' - well, that kills an initiative.
 
You have to start with the senior people to make sure they're totally committed. Knowing that you could make mistakes, but nonetheless you have to get the commitment that says this firm has to do this.
 
Then we had a management team meeting. So we go from having our 20 top people, then we have a meeting with our top 80 people and go through a similar process to make sure people have the time and ability to buy in to it.
 
Then we had a full meeting with everyone in the firm where we talked about how important it was. We rolled out the strategy we were going to use to get out in the market more and to grow the firm. 

HOW TO REACH: Cohen & Co. Ltd., (216) 579-1040 or www.cohencpa.com