Stan Hasselbusch always looks for the next way to keep his company growing and expanding its presence. L.B. Foster Co., a manufacturer, fabricator and distributor of products and services for the rail, construction, energy and utility markets, acquired Portec Rail Products last year as a way to improve its product line. Part of the company’s strategic growth plan is to grow through acquisition and Hasselbusch made good on that strategic goal.
“We looked at a half-dozen different companies,” says Hasselbusch, president and CEO. “We looked at companies that were primarily related to the rail industry, and we weren’t going to be foolish and we did a lot of due diligence. We were looking for something that was going to make a sizeable contribution to our organization.”
Portec Rail Products was a company that fit all those requirements. A $100 million company also based in Pittsburgh, Portec is one of L.B. Foster’s biggest acquisitions. Hasselbusch knew it was going to take a lot of hard work and time to integrate the organization, but it would help continue the growth of a company that saw revenue of $475 million in 2010. Here’s how he did it.
Plan your acquisition
Acquisitions can’t be taken lightly. They can allow your company to grow, offer new products or reach new customers. They are a crucial step in growth, and they need to be given the time and effort to be done right.
“You have to really do the due diligence and have patience,” Hasselbusch says. “Having patience is something that if you’re going to have a growth strategy, you’re just not going to grow for the sake of growing, you’ve got to have patience.”
Planning out the various stages of an acquisition will help you navigate through what is often a very long and difficult process.
“Plan for what you need to do,” he says. “Make sure you have a very strong strategic plan. It’s got to have how you’re going to go through an acquisition, your diligence plan, your integration plan and your plan going forward. There’s a lot of planning and then it’s following through with strong execution.”
Hasselbusch and his team referenced the plan and kept patient while looking at companies that were going to benefit them and fit well within their organization.
“We’re not going to step out of our wheelhouse,” he says. “We’re not going to go out and do something that’s not familiar to us. We are basically in three products. About 45 percent of our business is in rail, about 45 percent of our business is in construction products and about 7 or 8 percent is in tubular products. But really our focus is in the rail side of the business and in the construction side of the business. So when we go looking for acquisitions and growth in our company, that’s what we’re looking for.”
You want to look for companies that will be a good compliment to your existing business and help continue your growth.
“Our strategic objective in the railroad side of our business is to strive to become a premier distributor of products beneath the wheel,” he says. “[Portec] had a couple of products that really played into that very well. They had a large presence in what’s called friction management. Friction management is lubrication of the wheels and the rail to minimize friction and slows down the wear of the wheel and the rail. That’s an up-and-coming market.”
Having an understanding of your market is a big part of the planning process, as well. Hasselbusch knew what part of the rail market they wanted to expand upon, and Portec was the company that offered those products.
“You need to know the market you’re going to serve,” Hasselbusch says. “You have to understand the markets that you serve if you’re going to be successful in the first place. You need to be able to know what you can do internally from an organic standpoint or what needs to be looked at outside of your current organizational set up.”
Portec fit the plans Hasselbusch and the company had to move forward with for growth in the rail industry.
“Looking at Portec, it really looked fine,” he says. “We liked the size of it. We liked the fact that it does have a global presence or at least is a springboard to get into the global market. They do a lot in the service sector, which compliments what we’re doing. They have good research and development and engineering, which compliment some of our efforts very well. They have products that we can use in our bag of tricks of rail products and we liked their people.”
Finding a company that matches up with your own is the most important part of an acquisition. The company you acquire has to be complimentary in the things they offer or make.
“You have to understand how they are going to compliment or strengthen your business,” he says. “You want to look for companies that would be accretive. You’re going to look around a lot. You have to ask yourself how the product will complement what you’re currently doing.”
It is also critical to find a company that has a similar culture. If cultures are too different, the acquisition will be extremely hard to make work.
“You have to look at the people,” Hasselbusch says. “You have to look at the people so when you buy an organization it’s going to come in and you can grow together. You can’t lose focus. One of the big things we are seeing during this integration is how the cultures match up.”
Communicate growth plans
Communication plays a big role in growth and especially in mergers and acquisitions. Hasselbusch constantly communicates the company’s plans for growth to his employees.
“We’ve always … expressed to them the importance to grow,” he says. “One of the areas of our strategic plan to grow is to grow through acquisition. They know that that’s always going on, that we’re looking at people. [Our employees] know that we are always looking for ways to grow the company. You have to communicate this all the time.”
During an acquisition process there are a lot of moving parts and a lot of variables that constantly need to be addressed. Communicating often is the only way to keep things going smoothly.
“You have to over communicate,” he says. “You have to make sure everyone in the company is aware of what’s going on.”
L.B. Foster has town hall meetings twice a year where everyone in the company gathers to hear what’s been going on in the organization. At the end of those meetings they have a Q&A session where employees can comment on what things have been happening throughout the year.
Integrating two companies together takes a lot of hard work and dedication. The process can’t be rushed. Nothing good will come out of an integration if it is forced or rushed.
“It’s very time consuming and you have to be prepared for that,” Hasselbusch says. “There’s just a lot of work to do and it doesn’t stop. It doesn’t stop in the diligence phase, it doesn’t stop as you go forward and you close and it doesn’t stop through the integration. It really steps up and you’ve got the deal down and you take a deep breath and it’s not over — it’s just starting.”
Patience and communication are extremely important while trying to successfully bring two companies together.
“Communicate on both sides with your company and theirs,” he says. “There’s a lot of hard work and a lot of patience that’s going to be required and you can’t over communicate. You’ve got to be prepared for that. If you’re going to do it and do it right, you’ve got to put the time in and it’s got to be quality time. It’s not going to start by itself.”
Nothing is more important than communicating and getting to know the company you have brought in.
“When you bring in a company that’s 20 percent of the size of your current organization, it can be a challenge,” he says. “You have to stress communication. You can’t overdo communication. You have to take the time and put forth the effort to get to know them. That’s the only way you can do it.
“You have to communicate with them and try to understand them and where they are coming from. You can’t spend enough time with the troops. You have to be out with them and press the flesh. That’s the ultimate communication. You have to do that a lot.”
Integrate your teams
When it comes time to integrate the newly acquired company into your own, you have to be willing to take time and plan how you want to make the process work.
“There’s got to be a very detailed integration process,” Hasselbusch says. “You’ve got to be able to nail that. If you lose that, you’re going to take a long time catching up.”
For Hasselbusch and his senior executive group, the first step of integration was visiting several of Portec’s facilities around the country and internationally to get a feel for the operations and people.
“It was very important for me and my senior executive group to spend some time visiting each one of those facilities because at the end of the day, it’s about the people,” he says. “You can have ideas and you can have approaches and you can have plans, but it’s about the people.”
Throughout all the hard work and planning that goes into an acquisition, you also have to create buy-in for the future of the two companies.
“The integration has been a lot of hard work, but there’s been a lot of buy-in on both sides and there’s been a lot of working together,” he says. “There are certain compromises that you have to deal with, and it’s a give-and-take process throughout. That’s the big thing — bringing people together for a common cause.”
Another aspect of compromising during an acquisition is finding the best practices between the two companies. It is very easy for the acquiring company to keep doing things how it always has. However, that won’t improve your company and it won’t help the integration process if you don’t consider all avenues.
“We’ve spent a lot of time trying to better understand their operations at their plants,” he says. “We really looked at this and we’ve told the people at Portec that we’re looking for best practices. It’s not our way. We’re going to look at you, we’re going to meet you, we’re going to try to understand you and we’re going to try to meld the best practices.”
It takes full understanding of each company in order to decide what practices can be improved and what practices to keep. It takes careful consideration on both sides.
“We’ve not gone into this integration like it’s our way or the highway. It’s looking at it from both sides. They do some things in engineering and research and development that we can benefit from. We do some things in operations that they can benefit from. You’ve got to dig in. You’ve got to really understand the cultures, you’ve got get to know the people, and better understand the products.”
The willingness and ability to keep your mind open and listen to what everyone involved in the process has to say will help you make the integration a better and quicker success. “You’ve got to go in there with your eyes wide open,” Hasselbusch says. “You have to open up and listen. We’re not saying that our way is the right way. Sometimes you’ll agree and sometimes you’ll disagree and all you can do is reach a middle ground. At the end of the day, at some point you’ve got to come on board and you have to move forward and you have to move forward together.”
HOW TO REACH: L.B. Foster Co., (412) 928-3505 or www.lbfoster.com
The Hasselbusch File
President and CEO
L.B. Foster Co.
Born: Cedar Rapids, Iowa
Education: Attended the University of Dubuque in Iowa. He went to work for L.B. Foster straight out of school. He started in 1972, and it’s the only place he has ever worked as a professional.
What was your very first job, and what did you learn from it?
I delivered newspapers. I took away from that experience how important people are.
Who is someone you admire in business?
Warren Buffett. I really like his approach. It’s a very wholesome and down to earth approach and he has been very successful. I find him very interesting.
If you could invite any three people to dinner, who would they be?
Babe Ruth, John Kennedy and Michael Jordan. My wife would have to be there, as well.
If your day is off to a bad start, how do you turn it around?
I go in my office, take a deep breath and start all over again. We are really fortunate here. There is a light attitude throughout and there is a lot of humor in the office. There are always going to be good and bad days and you just have to be tolerant and try to work through them...
Ravi Kathuria is president of Cohegic Corp., a management consulting and executive coaching firm that he founded in 2002. His objective is to make business leaders think about and implement ways to make their companies more coherent. That objective is what made Kathuria write his book, “The Coherent Company: The Struggle for the Next Level – A Business Parable.” The book follows a fictional senior sales executive, Trent Wertheimer, as he becomes CEO within a business intelligence company, Hintec. Trent quickly digs himself into a hole because he thinks he knows how to lead a company, but doesn’t. With the help of a mentor, Trent learns how to transform the company and himself by implementing the Cohegic method to give Hintec coherence and clarity. “The Coherent Company” is a look at leadership in practice as Trent implements the Cohegic method and tries to turn around the company in his new role as CEO.
What is the message of the book?
This book offers the road map for business transformation. Most business books focus on one aspect such as strategy, execution or work processes. Few business books tie them all together. This book connects mission, vision, philosophies, work processes, strategies, goals, roles and responsibilities, culture, execution and measurement.
What business problems are addressed in the book?
The primary reason that the book was written was because companies lack clarity and coherence. The issue that companies have is that they are not really crystallized in their business spirit. Their mission statements are not well-written and they have not crystallized very clearly their business model. When you look at a majority of mid-level companies, you’ll find that their mission statements and core philosophies are not crystal clear. Because they don’t have clarity around that, it creates a lot of confusion in the organization.
Companies get confused between mission and vision. They are confused about what vision should stand for. Companies have to connect their strategies, goals and visions together so that they drive clarity in the organization.
What makes the book different from other business books about leadership methods?
It’s the fact that the book is presented in the backdrop of a very intense and realistic story. It shows leadership in the real world, leadership in practice as opposed to leadership in theory. Leadership in theory is very easy to talk about. Nobody is challenging you. Leadership in practice is very difficult. Your ego, your self-awareness, your inhibitions, your preferences, your tendencies, your habits, all comes into play. Overcoming all of that is a huge challenge and as a leader you have to really perform at a much higher level and you have to help the organization succeed in spite of yourself.
What would a new leader or entrepreneur take away versus what an experienced leader would take away from the book?
I think a new leader and an entrepreneur must understand that the core of their business is the most important. They must seek to drive very clear thinking in their business model and define why they are creating that business and that company. They have to ask, ‘Do I have clarity about what I am doing and why I am doing it?’ If they don’t have that, success will be a little harder.
Experienced leaders need to understand that clarity cannot exist just in their mind. Clarity has to exist in everyone in the organization and they have to make sure that that clarity is consistent and coherent.
If a leader cannot connect all those strategic aspects, a company cannot perform. The questions that the book raises are not easy questions to answer. Those questions are difficult and take time to answer. If companies can go through and ask themselves these questions, it will make a powerful impact.
HOW TO REACH: Ravi Kathuria, 281-403-0250, or www.cohegic.com
It’s not everyday that the founders of a company go around and make employees ice cream sundaes. However, that’s exactly what Bob and Marcie Zlotnik did for their employees at StarTex Power, an energy reseller. The co-founders got an ice cream cart and bought supplies for sundaes and served employees decadent treats at their desks.
The Zlotnik’s strive for StarTex Power to be one of the best energy service providers in the industry and to do that, they focus on a corporate culture that fosters employees who enjoy what they do and provide great customer service.
“One of our philosophies is that in order to be a superior customer service company, you have to have superior employees,” says Marcie Zlotnik, chairman and co-founder. “In order to have superior employees, you really have to have an environment that fosters a great working culture.”
By focusing on a corporate culture that gives back to employees and promises to deliver energy service without surprises, the company saw annual revenue of $407 million in 2010.
“When we started, we were focused on customer service,” says Bob Zlotnik, president, CEO and co-founder. “In our industry, there is a lot of competition. We decided to sell by doing people right.”
That business model has helped the company achieve rapid growth since being founded in 2004.
Here’s how the Zlotnik’s use a strong corporate culture to grow StarTex Power.
Define your culture
Privy to the fact that numerous energy resellers don’t tell their customers everything they need to know or everything that they are being charged for, Bob and Marcie decided that they would deliver exactly what they promised.
“Energy is a very complex product and there’s a lot of different ways you can present it and a lot of different ways you can sell it,” Bob says. “We’ve always taken the view that we weren’t going to surprise our customers. So when they entered into an agreement with us, they got what they thought they got. With some of our competitors, they didn’t necessarily get what they thought they were going to get.”
That focus on service translated into creating a corporate culture that employees found helpful to their jobs.
“The key is corporate culture,” Marcie says. “I think that’s really where it starts. If you don’t have a place where people want to come to work, where they want to do their best, your end product will not be the best. Without the best product, in the end you won’t be successful.”
Part of offering the best product is being able to deliver things to a customer that the customer actually values and things they can’t get anywhere else.
“We’ve always compared ourselves to Southwest Airlines,” Bob says. “They take a lot of pride in their corporate culture and how they treat their customers and employees. They are running a lot of ads about bags fly free, no change fees, and we started thinking, ‘We need to do some of those same things.’”
Offering products or services that the competition isn’t is a good start, but you have to make sure that your employees enjoy the work you have for them. If employees don’t think they are contributing to something worthwhile, they won’t do their best and your company will suffer.
“You want to make sure you have employees that have passion,” Marcie says. “It’s not about paying people the most amount of money. Certainly as a start-up you can’t do that. It’s about really caring about people. The more you trust people, the more they want to do well for you.”
You have to set an example and show that you value your employees at all levels.
“You need to understand that it’s not about you,” she says. “It’s really about the people and your employees. As you build your employees and you show them what success is, they want to do that. They want to follow the lead. You’ve got to do whatever it takes.”
As you develop employees and hire new ones from varying backgrounds, you have to make sure each and every employee understands the culture within the organization.
“When we see those employees coming from other companies, they’re very much trained to not go outside their department, to not talk to people that are more senior and we are really insistent about breaking down those types of barriers,” she says. “That creates inefficiency. If you want to go talk to a senior manager with a good idea, go, don’t stop, do it.”
Defining your corporate culture is critical for success. You have to show employees that your company cares about them.
“People have to feel that their ideas are welcome, that they can have a long-term track to success and that they are truly part of the company,” Marcie says.
Creating a corporate culture that empowers employees and contributes positively to your company will only work if you put in the effort to make it work.
“It’s really the ideas and the time and effort that’s put in that people appreciate,” Bob says. “It’s really not the money. Marcie and her group in HR, a lot of what they do is the thought and effort that I think people appreciate.”
Thought and effort can go a long way toward building a strong team and developing the results you want to see in your company.
“To me it’s the little things that you do,” Marcie says. “It took a lot of hard work to not just develop a corporate culture, but to feed it and make sure it continues.”
Once you find a culture that works best for your company and your employees, you have to work continuously to keep it.
“The key is when you try to create that culture, you can’t back down from it,” Bob says. “For instance, there was some debate on whether to have a TV in the break room, but the promise was made, so we have a TV set being installed in the break room.”
Part of keeping a corporate culture alive is making sure that it stays consistent with everything your company does.
“You know when you walk in the office and the culture feels different,” Marcie says. “You can’t get away from it. It’s about being vigilant.”
Bob and Marcie give their employees much more than just a TV to watch. They implemented an employee stock-option program to give employees a bigger incentive to do well. They also make the work environment fun and rewarding by putting on different competitions, activities and programs.
“Most people say when they walk in the office that it looks so much fun and so lively,” Marcie says. “When we were smaller, we had a company scavenger hunt. When we hit a certain mark we put a $100 bill on everybody’s desk. Just outside of my office we have a wall and…when employees have been here for six months…I ask that they take a star and they decorate it to reflect their personality. It shows how we are all individuals that make up the company.”
From personalized decorations to scavenger hunts, ice cream parties, and various friendly competitions, the employees at StarTex Power work hard and play hard.
“You’ve got to be flexible,” Marcie says. “The way that Bob and I came out of work and the work environment that we were raised in is not going to work with today’s group. If you’re not flexible, you’re going to wake up one day and realize, ‘Why are we not communicating with our employees?’”
To keep in touch with their employees and to make sure that everyone in the company is staying happy, StarTex Power administers surveys and does research to gauge what employees are feeling.
“It turns out that the Gen Y group is a different group,” Marcie says. “I read any article I can find on Gen Y and from what I have researched, I found out Gen Y likes team competition and peer recognition. So what we have done is tailored our rewards. That’s how we determine the different things that we do by researching. You don’t know what you don’t know unless you seek guidance from those that do know.”
You have to make use of the resources available to you today. Read articles about other businesses and their practices and look online to see what experts are saying about corporate culture and today’s work environment.
“There was a recent Fortune magazine that talked about the best places to work,” she says. “I pulled that and read every one of them to see what new ideas there are. You have to read. Read about best-places-to-work companies and see what they are doing.
“If you don’t ask, you’re never going to find out. Don’t be afraid to ask, throw things out there. There is so much information and so many companies that are on the forefront of a strong corporate culture that you don’t have to reinvent the wheel. But it certainly is about reading and you’ve got to embrace it.”
That research and application of their findings has given StarTex Power recognition and won them awards for being one of the best places to work.
“When you do that, you start getting third-party validation,” she says. “In an industry with so many competitors, people are kind of looking for that. By being a Better Business Bureau Pinnacle award winner, by being a J.D. Power award winner, it really gives the customer the feeling that, ‘Hey, I may not of heard of this company’s name, but they have a great reputation and they do right by their customers and their employees.’”
Make employees comfortable
No matter how effective your corporate culture is at providing your employees with an enjoyable work environment, a CEO must make a commitment to get to know his or her employees and make sure they are getting what they need.
“You have to listen,” Marcie says. “You have to develop a relationship where people feel comfortable telling you the good and the bad, where there’s open communication and where you’re flexible.”
It’s easy to overlook the impact that a conversation with an employee can have. You have to connect with your employees.
“It’s being a person,” she says. “It’s being able to walk around the office and saying hello to people. Know as many people’s names as you can.”
You have to be visible and available to employees in order to create a relationship and make them feel comfortable coming to you.
“It’s going and pulling up a chair next to them and sitting down and talking with them,” she says. “I don’t think people see us coming down the hall and say, ‘Oh my God, the bosses are coming.’ If they have something to say they are comfortable talking.”
If you can open up to employees and speak with them on a personal level, it can make a huge difference in the work environment.
“You’re not any better than they are and you’re not any worse than they are, you’re just like they are,” Bob says. “Don’t expect things from them that you don’t expect from yourself. I show them that I’m a nice guy and I think that they believe that I have concern for them and if people view that you’re concerned about them, I think they feel open that you’ll try to help them.”
Getting to know your employees also means getting to know their jobs and what it is they do to help the business.
“The other thing is that we know their business, we know what they are doing,” Marcie says. “If you can go by somebody’s desk and see what they’re doing and be able to say, ‘Hey, have you tried this?’ You get a lot of respect out of that. Bob and I are here to make our employees look good. It’s not about me winning. I’d rather turn around and make it feel like they won. That’s how you develop a good corporate culture.”
HOW TO REACH: StarTex Power, 713-357-2800, or www.startexpower.com
The Zlotnik File
Co-founder, president and CEO
Co-founder and Chairman
Born: Marcie – Montreal, Quebec; Bob – El Campo, Texas
Education: Both attended the University of Texas at Austin. They both received BA’s in accounting and Bob has an MBA in finance.
What was your first job and what did it teach you?
Bob – My first job was working for my dad at a family business. I cleaned the bathrooms and mopped the floors. I learned that there was a lot of benefit to owning your own business but there is also a whole lot of hard work. And I knew that I didn’t want to spend my life cleaning the commode.
Marcie – My first job was as a day camp counselor. I took away from that that you can do an average job but you don’t get anything out of it. You don’t have to sign up to be the coordinator of the play or a swim counselor, but that’s how you get the passion is by doing those other things.
What is the best business advice you have ever received?
Marcie – You’ve got to know your business.
Bob – Even when things are going bad, you have to stick to your principles.
What is your favorite or most fun event that you have done for your employees?
Marcie – My favorite was the scavenger hunt. I didn’t tell people what we were doing. I told them to bring jackets, bathing suits and I even told them we were going to a concert one day so they wouldn’t catch on. We got limos to take them around the city to do a scavenger hunt. All the departments were mixed up and people had so much fun.
Bob – My favorite was serving the ice cream because I think it took the employees by surprise to see us making sundaes.
David Harding knew there had to be a better way to reduce the stress at work. So he read an article about executive coaches, hired one, and set out to change the company culture with his newly minted purpose statement.
It was his “aha” moment. The revelation? Hiring the best people, trusting them and letting everyone share in the duties ? and share in the rewards.
“We dreamt that people would want to work here and would be lining up at our door to join the team,” says Harding, president and CEO of HardingPoorman Group, whose annual sales are about $30 million.
Once that vision is solidified, you develop the purpose. Harding finds this one fits the bill: “To make a meaningful difference in the lives of our employees.”
Finally, ask, “How can we deliver on that purpose?”
Then comes the action. Take away the autocratic management style. Put in a democratic style, where managers are allowed to run their departments. Take away the plant manager.
“We chose not to have one because everyone tends to go to him/her for answers,” Harding says. “Pretty soon you have a stressed-out person because the staff puts monkeys on his/her back.”
The culture revolution won’t be easy. It took Harding about two years to get his 154-employee graphic arts company turned around. Autonomy was especially problematic at first.
“It wasn’t a habit for them to make decisions, and so they would come to us and say, ‘What do I do here?’ and we would say, ‘You’re running the show; what do you think you do?’ and eventually, after you do that a few times, they understand: ‘OK, I need to be making my own decisions.’
“Instead of answering the question for them, you ask them to come up with the answer themselves. And nine times out of 10, it’s the same answer you give them, especially if they understand the vision of the company.”
Management, in a twist of the usual case scenario, should be accountable to employees, and not the other way around. This is the optimum way to benefit the customer.
“Think about it,” Harding says. “The people that can really provide value to a customer are the people that are closest to that process. In other words, the people that are closer to producing a product can probably provide more value quicker to a customer than managers. The reason is they work with that product every day and they know what improvements can be made. So it’s faster. They don’t have to go upstairs and say, ‘Is it OK if I do this?’ Of course they can do it. You should really turn the pyramid upside down and let them provide the value.
“In fact, there is a good book written on the subject called, ‘Employees First, Customers Second,’ and by making employees first they should know what the customer is wanting, too, and what the customer’s vision is, as well. So you have to connect them with the customer.”
If you hire the right people, it makes your job so much easier. Harding points out that his company’s turnover rate for 2010 was 9.1 percent. Statistics show that manufacturing companies average about 16 percent a year.
“There are a million things you can do to make sure a hire is a correct hire,” he says. “Pre-employment testing is one. Multiple interviews. Actually have the employee go through vocational-type tests.
“One time I even drove by an employee’s house, because it was a very important position I was hiring for,” he explains. “I actually could tell by the shape of his house and the garage whether he was an organized person or not.”
Did he get the job? Yes, and he’s now a partner.
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Bring on the feedback
Employee feedback through staff surveys will bring meaningful results in building a great company, says David Harding, president and CEO of HardingPoorman Group.
Each year, the 154-employee graphic arts company conducts a staff survey to evaluate where the company is headed and where it has been.
An outside firm conducts the process and answers are anonymous.
Some of the 35 questions include, “My supervisor is willing to listen to ideas I have about improving my job,” and, “I understand the values of this company and what is important to it.” Respondents agree or disagree on a scale of 1 to 10. Comparisons are made to previous year’s scores to see where improvement is needed.
“We take the average of all 12 questions about the manager and put it on their review,” Harding says. “That way we are telling the managers what’s important.
“The manager can see what his department’s low areas were. Then he can set a plan, or we can set a plan with him, for how he is going to increase those scores this year. You’re benchmarking the company. You can benchmark the manager.
“I’m proud to say that every year our numbers have improved,” Harding says. “I would hope that if you asked our staff if they ‘bought in to’ our culture, they would overwhelmingly say, ‘Yes.’”
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Tom Feeney did not agree with how employees were being treated at Safelite Group when he became president and CEO in July 2008. He was confident this mistreatment was one of the things holding the company back from achieving greatness.
Now to be clear, Feeney is not saying that employees were being abused or treated badly. But they weren’t a priority at the company and that was a problem.
“While we have been really good in the area of providing good customer service, we have done so at the expense of our people,” Feeney says. “We haven’t invested in our people. We asked ourselves the very strategic question: What are we focused on? Companies historically have to focus on one thing. They can’t focus on three things.”
The three things that you can choose to focus on as a company, in Feeney’s opinion, would be your employees, your customers or your stakeholders.
“When I looked at Safelite, we had never selected,” Feeney says. “We were doing things erratically and trying to serve all three masters.”
As a result, customer service wasn’t as good as it could be at the 10,000-employee auto glass repair company. Employees didn’t feel as attached and as valued to the company as they needed to in order to give their full commitment to their work. And stakeholders didn’t feel as connected to where the company was heading.
“We debated and concluded that it was our people that came first,” Feeney says. “Once you make a decision like that, it causes you to make changes in your strategy, changes in your direction and changes in your decision-making. We simply concluded that if our people truly came first, all of our investments had to be toward making our people feel good about working at Safelite.
“We had to train them, invest in them and give them more tools and evidence that people first really meant something. It wasn’t just words.”
You need to begin your quest for a more focused direction by asking yourself why you’re in business. Why did you launch the company you’re now leading? Why did you agree to become a CEO?
“Many people say, ‘I’m in business to make money,’” Feeney says. “Well, yes, of course, but that’s oversimplification. You make money because of the actions you take. You have actions to take because of those strategies you have in place. So it really starts with that very basic question: What am I in business for? Who are you serving? You’ve got to know where you’re trying to take the business.”
Feeney believed the vision at Safelite needed to focus on what was best for the people who worked there. He was confident the result of such a focus would be happier employees and more satisfied customers.
Make more connections
You need to make real connections with your people in order to get them to believe in you and believe that you care and value their role in your organization.
“It does start at that point with some words on paper and some visuals to help bring the words to life,” Feeney says. “But it’s much more important than that to take this vision down to the very lowest levels of the organization with passion, with believability, with credibility and with an explanation of how this fits them. What is their role in achieving this vision?”
As you think about vision, keep in mind that it’s not your employees’ responsibility to get inside your head and figure out what you want them to do.
“In fact, it’s our responsibility as leaders of the business to understand it from their perspective,” Feeney says.
In order to gain that perspective, you need to get out of your office and meet with people, employees on the front line and not the district manager or vice president who runs that particular office.
“I’m not sitting in a room and getting a presentation from the general manager,” Feeney says. “That’s the last thing I want to do. If I believe the leader sets the vision and must communicate the vision and must inspire others, I have to figure out how to connect with people on a personal level.”
Get out there and explain the changes you want to make, but allow just as much time for questions that employees are going to want to ask. You need to appreciate the impact of change on their world.
“As you go through a cultural transformation in your company, the reality is each person must go through a personal transformation,” Feeney says. “I have said publicly that in order for the company to achieve a cultural transformation, each of us has to change. What that means is the things you did yesterday to make you successful in the company are not going to be the things you do tomorrow that make you successful. You have to change. I put myself out there.”
Show them the work that you’re doing on your own skills and abilities as their leader and help them understand that you have work to do as well.
“I share examples of things I’ve done well and things I haven’t done well,” Feeney says. “So when I get a performance review or a 360 feedback or I participate in the same leadership development tools that we provide for all our management, I share my results. I put them right out there so people can see, ‘Holy crap, he ain’t perfect.’ I’m far from perfect. I’m on the same leadership journey of the leaders in our company.”
Value your people
You may think you’re the big cheese at your company. And if you’re on local commercials or advertisements or you frequent the banquet circuit in your community, you may have a pretty visible presence. But it’s your employees who have the greatest impact, good or bad, on the image of your business.
“Our customer service reps who answer the phones, they are the voice of our company to the customer,” Feeney says. “They are the first impression. When a customer calls on the phone and we answer the phone, immediately that customer has an impression of our company.”
The point is you need to value those people and give them a reason to be proud to be part of your company.
“If my phone rings and it’s an associate, I take that call,” Feeney says. “I don’t have a mechanism to filter this stuff. Some CEOs put mechanisms in place. I have an open-door policy. Anybody in my office can walk up and interrupt what I’m doing and I’ll talk to them. They know that. I’ll walk around and see them. You can’t say one thing and do another.”
Of course, it’s not just enough to say you have an open-door policy. If nobody comes through your door or if you scowl at people who do come through your door or forget what they told you 30 seconds after they leave your office, it doesn’t do any good.
“They have to respect you and feel that there is an openness to listen,” Feeney says. “That has to do with style and approachability and sincerity and follow up. If you hear things and if you listen and then you do nothing, you will stop being told things.”
Think about the way you present yourself to your people. Does it give off an air of approachability?
“If you walk in with a posse or you drive up in a stretch limousine and fly in on a company plane, you’re going to come off as a bit standoffish,” Feeney says.
You play a key role in the evolution of your culture and its ability to continue pushing forward.
“If they sense you’re moving right or left off the vision, it’s almost permission to stop believing and go the wrong way,” Feeney says. “You have to be true to that vision and the strategy and the path you’ve laid out for the journey.”
Here’s another important thing to keep in mind when reworking your culture: You have every right to expect some results from your efforts.
“When we put things in place to make our people better, I expect a return for that,” Feeney says. “We expect a return for that. Your people are your greatest asset. As you invest in them, you should expect them to do more. It’s not about productivity. It’s more about attitude. The term I used before is ‘qualitivity.’ You get quality and productivity, which is the best possible outcome. When people are really engaged about coming to work, and they know what their role is, and they know how they fit into the puzzle and what their job is and how important their job is to the ultimate prize of the company, it’s unbelievable what can get done.”
So once you’ve opened your arms and instituted systems for employees to share their concerns and ask questions, it’s OK to expect that their performance will get better.
“If you have an employee that’s been with you for 10 years and they were really successful in the old days, but they are just average today, you have an obligation as a leader to tell them that,” Feeney says. “Show them what they need to do to become above average again and provide them the tools to do it. But in the final analysis, it’s that individual’s responsibility to take action. If they don’t, you must upgrade talent.”
Cultures aren’t fixed or built in three easy steps. It requires a constant commitment by you to make adjustments when needed.
“It’s a constant drumbeat of sharing and communicating on a very frequent basis what’s gone right, what’s gone wrong and have we deviated from the long-term vision that we created,” Feeney says. “We’ve picked up the pace on communication. We’ve been more visible to our organization, meaning we go out to the field on a quite regular basis to hear from them. How are we doing? What’s going right? What’s going wrong? What can we be doing better? Make every leader responsible for the future and make sure they understand their roles in it. It’s easy to use the words. It’s hard to walk the talk.”
So don’t just talk about how your people are important. Take actions, and support actions, that reinforce that importance.
“My job is to role model the kind of behavior I want all our leaders to pursue,” Feeney says. “I’m constantly amazed and proud when I hear stories about somebody who did something. Maybe they took a risk and they sent someone on a weekend trip because they did something really well and they sent their family away and we paid for it. I love that. That says it’s permeating the organization.”
Feeney’s efforts have paid off financially as sales topped $1 billion for the first time in 2010, up 70 percent from 2007. But the work will continue to make sure the company gets even better.
“Leadership is a journey,” Feeney says. “You’re never done. It’s a work of progress that is never completed. It’s a work of art and the people who get to judge it are your employees and the customers you serve.”
How to reach: Safelite Group, (877) 800-2727 or www.safelite.com
The Feeney File
Tom Feeney, CEO, The Safelite Group
Born: New York City
Education: Bachelor’s degree in accounting, La Salle College (now La Salle University). I thought I was going to be a CPA and then a CFO. I took that path and then branched out.
What was your very first job?
Sweeping the floors at a music studio where I took music lessons. They needed someone to clean the floors. I played the trumpet. Our parents always encouraged us to be involved in music and sports.
What is the best advice you ever received?
I got some really good advice early on in my career. If you’re very serious about your career, you’ll be walking a tight rope most of your life. There will be days when you lean to the right. Maybe that’s your career. Then there will be days when you lean to your left. That’s your personal life. If you lean too far, you’ll lose your family or lose your career. It’s that balance you have to find.
Keep your family connected to your career and keep your career connected to your family. If you choose that path where your wife stays home, you have an obligation to keep her current.
What one person would you like to have talked to?
President Ronald Reagan. He was truly an inspirational leader. He led the country through a transformation and then the world. At the same time, he was a bit of a strange person. He didn’t seem to have a good family relationship.
Thomas J. Neri was facing two problems when he took over as president and CEO at Lawson Products Inc. First, he had a work force that had lost its desire to be innovative and wasn’t feeling any pressure to rediscover its passion. But that paled in comparison to the second problem, which was the fact that his company was being targeted by the federal government for improper selling practices.
It was under those inauspicious circumstances that Neri began his tenure at the top of Lawson, an industrial distributor of maintenance and repair supplies. The tricky part for Neri was that despite a seemingly obvious major problem, he still had to convince some people in the organization that changes were needed.
“The biggest challenge was building that burning bridge for the organization to say, ‘Look, we’re not as good as we thought we were and we have to change,’” Neri says.
“How do we get back to being what we need to be? How do we convince our customers that we are going to be a valuable and reliable partner? So you had the culture change. You have working through this legal issue. The other side is looking at what sort of people we were going to need to run this organization going forward.”
It wasn’t going to be an easy fix at the company, which now has 1,010 employees and 1,200 independent field sales agents. Neri needed to clean house on the senior management team and find people who could be more aggressive about growth, but do it in a way that would avoid any future entanglements with the federal government.
“We had to be very honest with ourselves and with our employees and our agents and, to some degree, our customers and our vendors that we weren’t as good as we thought we were and we were going to be much better,” Neri says.
You might be surprised to learn that as he began his effort to lead Lawson Products through this storm, Neri says he didn’t really feel fear.
“At the end of the day, you just have to say, ‘I’m open to changes,’” Neri says. “‘I’m open to opinions. I’m open to being entirely wrong.’ But what you hope to find is a compass heading that is the right way. It’s not going to be the exact map because it never is. Once you’re comfortable with the compass heading, you just have to charge ahead with it. The worst that happens is you get fired.”
Build your case
Neri did have to make wholesale changes on the senior management team, but the firings were not the first thing he did upon taking the helm at Lawson.
“There were a number of people that I was not sure if they would make it or not or would buy in to the vision,” Neri says. “So we didn’t make a lot of initial changes in the first six months in personnel. But once we got the story out as to what the burning platform was and where we had to go with it, it became fairly clear that we had to change people out if we were going to get there.”
When you’re dealing with a crisis, you need to approach it with patience and honesty.
“As we began to make some of these changes, we simply told the organization, ‘Not everyone is going to have a job when we’re done with this. We don’t know who will and who won’t,’” Neri says. “But what we did say is we’re going to provide training for everybody for some of these new positions and we’re going to pick the best that we can.”
As Neri began to talk about the areas in which the company had lost its way over the years, he bolstered his words with financial data.
“You use some very basic financial measures and performance measures as it relates to customer service,” Neri says. “Most of those are fairly easy to get. So the story came out pretty clear that at least in comparison to our competitors, we weren’t performing very well.”
He also reached out to customers and got some feedback from them about their perceptions of Lawson Products.
“The results came back and were pretty stunning for all of us in the organization, even those of us who were only here a short while,” Neri says. “A lot of our in-house perceptions were certainly not what the customer thought of us. When we thought we gave great customer service, it came back, ‘Well, it was OK,’ but it certainly was no better than other people. So as you start feeding them real data and real information, then you start applying day-to-day world things that they do, they start to see that we don’t measure up and some of the things that we do inside don’t seem to make a lot of sense.”
The lesson here is that when you’re trying to make an argument, you need to build a case and gather information and data that supports your cause. Then ask the people you’re presenting to, if they have concerns, to make their case as to why they think you’re wrong.
“We held a lot of employee and department meetings or a lot of different meetings with larger groups and small groups and began to lay the case out for them in relatively straight-forward terms,” Neri says. “We were pretty open in listening to what they had to say. We would lay out a problem or an issue and say, ‘OK, we believe this is right solution. You tell us why it isn’t the right solution and if it isn’t, tell us how you’re going to correct it.’ That first step is convincing them there is a problem, but the second step was going to them and having them help us tailor-make some of those solutions.”
Find people in the company who can help you make the case for those solutions that you support.
“I tried to find people who had been with the company for quite some time and were influencers throughout the company,” Neri says. “Even though they may not necessarily have agreed with all the changes, what I did was spend quite a bit of time with them convincing them that they can be a big part of it.”
It’s OK to seek out help if that help can make it easier for you to get things done.
“I tried to find four or five of those influencers who can make the case for me and had a lot more validity with the older organization because they knew them better,” Neri says. “When you talk about honesty, it takes quite a long time to get people to trust you. Until you get that trust built up, you need some other people in the organization to do that for you.”
When you’ve made that effort, look at where things stand and then plot your next step.
“There was a large cadre that said, ‘We don’t believe we’re as bad as we are,’” Neri says. “We don’t see the need for change and we don’t like the change you’re talking about.’ The old analogy is, ‘The train is leaving the station. Either get on or step off.’”
Manage the message
As you begin to roll out the next step, your plan for recovering from a crisis, you need to put a great deal of thought into how it will be presented and how it will be received by your employees.
“It really starts with our director of communications,” Neri says. “Part of this is making sure your messages are the same messages and you’re not contradicting each other. Part of it was putting a calendar together and saying, ‘OK, here are the messages we need to get out and here is the information or feedback we want to get back from them.’ So a calendar was laid out, and I would spend a great deal of time on the content, especially on the town halls. I would spend a lot of time going over the communication and what the presentations were and who is giving the presentations.”
You need to talk about the actual rolling out of information and the logistics involved in doing so, in addition to the meat of your plan.
“What’s the rollout look like for the next six months?” Neri says. “What are you going to be saying to the organization? How does that tie into the corporate initiatives? Then as we get closer, what are we going to roll out next month?”
You need someone in place who can help you manage your message. It’s critical that this is someone who you’re willing to listen to and abide by, even if you don’t always agree with them.
“You’ve got to really organize how messages get out and how you get feedback,” Neri says. “You do want someone who is adept at being able to work with you for about a month or two and can begin to understand your style. Someone who can understand that how I give a speech is different than how someone else gives a speech and that my writing style looks like this.
“They have to feel that same freedom to be able to say, ‘Yeah, I know you like to say it that way. But it really comes across badly. I really would like you to try it this way.’ It really becomes a symbiotic relationship. You’ve got to have confidence in each other and trust each other’s opinions.”
What you’re trying to do is create a picture of what it’s all going to look like when you’re finished with your plan.
“It doesn’t have to be that solid of a picture, but it has to give people an idea of where this is heading to,” Neri says. “My style is to say, ‘Here are the guts of what it is. Now I need your help in reshaping that and changing the face of it a little bit.’ You do have to give them some sense of what it’s going to be like out there.
“Just as importantly, what is going to be my role in this? Why is it going to be a benefit to me if you make these changes? What do I get out of this from a working perspective or a career environment perspective? You have to do both of those in tandem. People aren’t really sold until they understand how it impacts them.”
To help in this process, Neri transitioned his human resources department into an employee advocacy department.
“That position had a dual reporting relationship to myself and the chief operating officer,” Neri says. “I made it clear one of the responsibilities of HR is to be an employee advocate and to do outreach programs to make sure that people are being talked to.”
As you move into the execution stage of your plan, make sure your employees have a major goal that helps tie all their efforts together. At Lawson, this goal was helping the customer.
“We went into a lot of explanation as to what that really meant at every level,” Neri says. “If you worked in the warehouse and you were lifting boxes or sorting things, we made it very clear to you how important that job was and how it translates into customer service.”
Keep in touch with your direct reports and encourage them to do the same on down the line as to the progress your people are making in their jobs.
“I will sit with the managers every once in a while and say, ‘How do you think Scott is doing?’” Neri says. “Is he meeting all the goals that we have? Are we pushing him along strong enough? Are we giving him the training?’ Based upon the conversation with those individuals, I’ll know whether they are having those conversations with those people.”
As Lawson entered 2011, Neri’s efforts were showing results. Net sales increased from $301.8 million in 2009 to $316.8 million in 2010. The federal investigation resulted in a $30 million penalty in 2008 that was paid over three years.
Neri is confident better days are ahead and are the result of a changed corporate mindset.
“Your jobs are very important, but what’s more important is who you are and how you go about that job and your attitude that you carry with it,” Neri says. “I’m a big believer that attitude is far more important than the technical skills.”
How to reach: Lawson Products Inc., (847) 827-9666 or www.lawsonproducts.com
The Neri File
Thomas J. Neri, President and CEO, Lawson Products Inc.
Education: Bachelor of science degree in accounting, University of Illinois at Urbana-Champaign
What was your very first job?
I was a paperboy for either the Daily News or the [Chicago] Tribune. What I learned was I really didn’t want to do that because my dad was not going to get up at 3 in the morning to help me wrap papers.
Who has had the biggest influence on you as a leader?
Sam McKeel. Sam had been publisher at the Philadelphia Inquirer for a long, long time. He retired and he came to the Sun-Times in 1989 or 1990. He taught me that the most important thing about leadership is who you are — not skill set, not who you know, not the technique. Being a leader is really about being a people person and understanding how you can achieve things through other people. You’re very limited in what you can achieve yourself. He just taught me a lot of good lessons.
What one person would you like to meet from all of history and why?
Winston Churchill. The thing that fascinates me is that he had such a checkered career. He was someone born with a silver spoon. He failed miserably during World War I. He failed in a number of different areas. He was out of favor politically for 30 years.
When World War II started, they brought him back in, and he was probably the strongest voice of freedom in resisting the Nazi party. After the war, he was shuffled off again. It would be fascinating to talk to someone who had seen the bottom and seen the top several times and always managed to move forward in his life.
Despite the best intentions, too much success may ultimately lead to failure as employees in well-established companies focus on maintaining the status quo and following procedures instead of looking for new opportunities. Executives ultimately get a wake-up call when a svelte competitor swoops in and seizes market share by capitalizing on an untapped opportunity.
“When things are going well, it’s natural for companies to thrive on their own logic and nurture a culture that resists change,” says Dr. Glen Taylor, director of MBA Programs for Global Innovation at California State University, East Bay. “But if you don’t consider new ideas and opportunities, eventually you’ll hit a dead end.”
Smart Business spoke with Taylor about the techniques that help executives infuse an entrepreneurial spirit into mature companies.
How can executives begin the journey toward an entrepreneurial culture?
Entrepreneurs are found in all types of organizations — small and large, business and government, whether people are paid or act as volunteers. If you act like an entrepreneur you are an entrepreneur. It is a behavior, not a job title. An entrepreneur is a person who is good at spotting opportunities, good at mobilizing resources to pursue an opportunity and willing to act on the opportunity. Finding opportunities requires a new frame of mind or attitude, thinking outside the box and challenging the status quo. Entrepreneurs shake things up by injecting different points of view into the organization and then leading the way to test the waters to see if there is real potential for something new.
Well-established companies can do many things to encourage entrepreneurial behavior. Managers can encourage divergent thinking by welcoming guest speakers who offer unorthodox ideas or impart pointed observations about the company and industry. For example, an outsider may propose a direct sales model in lieu of traditional distributors or using social media to embrace a new generation of customers. Managers can also initiate internal conversations that challenge employees to step outside their comfort zones and suggest new ideas. Insights about new opportunities can come from anywhere in the organization. Making room to discuss new opportunities can foster a spirit of collaboration and enthusiasm. But in the end, it takes more than ideas and talk. It takes a commitment of resources and a commitment to take action to achieve entrepreneurial results.
How can executives control expenses and still invest in new ideas?
Entrepreneurs are not loners. They usually do best when they build strong partnerships, sustained by a network of supporters who share the vision and who provide a sounding board that fuels the creative process. Small groups of dedicated employees who share a similar vision and are willing to support each other during the incubation process are the ones most likely to succeed in marshalling resources, building prototypes and conducting pilot tests to move forward in a relatively inexpensive and risk-free way to assess the merits of a new opportunity. Experimentation means failing early and often, and learning from the experience to keep moving forward.
Why is it necessary to modify organizational incentives?
In mature companies, the organization might be silently fostering competing agendas with incentives that discourage experimentation and impede the creative process. It’s up to executives to assure seamless support for innovation across the enterprise by recognizing and rewarding entrepreneurial behavior. This might require separating responsibilities for new initiatives. If entrepreneurial employees get frustrated and leave, the organization will soon be drained of its creative talent.
What other changes inspire innovation?
Unless companies embrace people with diverse views, the corporate culture will continue to support the dominant view and resist new ideas. People learn through experience that they have to act in a certain way or follow specific protocols to be successful. Entrepreneurs often feel like outsiders and seek greener pastures. Corporate cultures that embrace diverse values and perspectives can infuse an entrepreneurial spirit into the culture.
What else can executives do to support cultural transformation?
Trust is the engine that powers innovation, because, without it, employees will be reticent to suggest new ideas or worry that a failed venture may damage their careers. Executives are responsible for engendering trust by setting realistic expectations and time frames for pilots and experiments and by treating failure as a learning opportunity.
Unknowingly, executives often stifle creativity and reinforce the status quo through their actions and responses, so it’s critical that they set the tone by modifying their behaviors. Show support for the creative process by hosting executive forums or roundtable discussions where employees can share ideas. Since innovation is a social process, encourage collaboration by asking employees to talk about their endeavors in meetings and online forums. But do more than support talk — support action. Finally, generate enthusiasm and raise spirits by celebrating small wins, recognizing employees who suggest bold ideas and applauding cultural change.
Dr. Glen Taylor is the director of MBA Programs for Global Innovation at California State University, East Bay. Reach him at email@example.com or (808) 203-3818.
Let’s talk about creating an environment where you achieve results. If you aren’t achieving results, your leadership won’t matter to your business. But it isn’t just about the “business of business” — it is also about people. I’ve been places where relationships didn’t matter. It isn’t pretty or successful in the long term. I vowed relationships would be the nucleus of any company that I had the opportunity to lead.
At Cbeyond, we spend a lot of time on culture and the “how” around “what” we accomplish. It is table stakes for having a successful career here. Don’t mistake my compassion as weakness. It isn’t soft — it drives return on investment. Period. It puts the focus on what is important (i.e., results) and gets us there by developing trust in each other, which drives collaborative growth and shared achievement.
Develop a legacy of trust and partnership. We call it “relationship capital” at Cbeyond.
Build the right team with the right character. Your job is to build the team and then emotionally invest in its members. Like any coach, you own the job of finding the talent and coalescing the players. And once they are on your team — invest. It is a slippery slope to think that the perfect employee is out there and you just haven’t hired them yet. Embrace the 90 percent capability you see in their talent and use sincere “frankness” and coaching to get closer to 100 percent. There’s an exception: Hire for competence; fire for fit. If they aren’t a cultural fit, get them off your team — and quickly.
Encourage vulnerability and avoid a culture of blame. We want teams that are comfortable and confident in their competencies, but we also want them to be self-aware. If we create environments where we assume good of each other, candidly declare the breakdowns and then arrive at a solution together, we create a culture where our employees feel trust, acceptance and support. If you as a leader provide positive regard for your people, they will be able to offer it to each other and to your customers. We call that “making a simple promise to each other.”
The world is a place of abundance and someone doesn’t have to lose for you to win. Benchmark against others — compete against yourself. Think this way and it will change how you lead and fundamentally how your teams interact with each other.
Focus on achievement — not status.
Stamp out bureaucracy. At Cbeyond, we all sit in cubes, we don’t print titles on business cards, and we don’t publish organizational charts. It isn’t just about bureaucracy; it is about having the ability to play as a team. Put the right talent on the proper challenges without regard to rank. When we are not trapped in “status” discussion, we are positioned to make the right decision for both our employees and our business.
Create shared values. Establish metrics, measure your business, create alignment and then celebrate success. For the past 11 years, we have rallied our troops around an essential imperative, our “Year of …” theme where we align our strategic initiatives, departmental objectives and individual MBOs (management by objective). And to make it stick, we share the same bonus objectives — everyone’s incentive compensation is paid on the same metrics. We rise and fall together and together we make decisions, drive priorities and ask the question, “If it doesn’t support our ‘Year of’ theme, should we be doing it?” You must have shared values to create shared success.
Speak in partnership language. Simply put — it is we, not “me” or “I.”
I have one final thought on all of this: Eliminate the rearview mirror. Learn from your experiences and move forward.
Jim Geiger is the founder, chairman, president and CEO of Cbeyond, a company that provides IT and communications services to small businesses throughout the United States and also provided the world’s first 100 percent VoIP local phone network. Learn more at www.cbeyond.net.
As CEOs, we enrich our community by running companies that provide jobs and pay taxes. As income earners, we pay our fair share of personal taxes that fund many community services, such as schools, libraries, parks and emergency services. But there is more that we can do. Every community has needs, and in every community, the needs are great.
It begins with you.
Many of us have sat on nonprofit boards and have lent our expertise to organizations with needs. We were involved in community service as adolescents through organizations like Boy Scouts and Girl Scouts or religious affiliations. As we were building our careers, we volunteered on committees or boards of trade organizations. That’s what leaders do, right?
Inspire others to follow
Said best by Tom Peters, “Leaders don’t create followers; they create more leaders.” So how do we inspire others in our organization to do their part?
I am personally inspired by what Charles and Debra Penzone have done. They infused their team at Charles Penzone Family of Salons to realize their gift of talented hands that make people feel beautiful and special. And with those hands, team members provide services to individuals who are going through cancer treatment. This is just one of many examples of how Charles Penzone uses its gifts to give back and help enrich the lives of those in need in our community.
The company’s employees not only volunteer their time, but they also provide a percentage of their sales from services to a variety of community causes.
Another inspiring organization for me is DesignGroup Inc. Second-generation leader Bob Vennemeyer shared his firm’s corporate giving philosophy during a casual chat. In the company’s 10th year, founding partners established a donor-advised fund with The Columbus Foundation. The company’s goal is to contribute every year to its local community foundation. As requests and community needs arise, DesignGroup requests grants from its foundation to 501(c)(3) public charitable organizations. Again, this is just one example of the many ways DesignGroup and its employees give back.
As CEO of Greencrest, I have followed in the footsteps of both these great companies. As you can imagine, nonprofits have no shortage of need for marketing, design and public relations services. With our gifted minds and artistic talents, we generously provide in-kind services to a number of special causes in our community. We try to be selective and provide a depth of services that will catapult a nonprofit to the next level. In 2007, we opened a donor-advised fund at The Columbus Foundation. The Greencrest Living Hope Foundation provides for individuals who may not have the opportunity to live life to their full potential without some assistance. In addition to these gifts, we also come together as a team to dip into our own pockets to provide a holiday hope box for the homeless, children or seniors.
Use your voice
You need to actively promote the difference that your organization makes in your community to your team. Let’s face it. We all want to be recognized for doing good. It is important to internally promote the difference your organization has made in the causes you have invested time and resources.
At Greencrest, it is important for employees to know that their efforts have made a difference, whether it is in the life of one person or the lives of many. The closer our employees can get to meeting or being around the people they have helped, the more inspired they become. It just solidifies the effort. It gives them joy, satisfaction and purpose.
For me, it is a philosophical belief that our role in life is to make a difference and leave the world a better place. I know that in stating this, I am in good company. The more we, as leaders, can promote the importance of corporate social responsibility, the more community needs can be met. And there is work to be done.
Kelly Borth is CEO and chief strategy officer for Greencrest, a 20-year old brand development and strategic marketing firm that turns market players into market leaders. Borth serves on several local advisory boards and is one of 30 certified brand strategists in the U.S. Reach her at 614-885-7921 or firstname.lastname@example.org, or for more information, go to www.greencrest.com.
Don’t tell Adam Coffey, president and CEO of WASH Multifamily Laundry Systems LLC, that his business isn’t capable of innovation. That will just get him started on telling you why you’re wrong.
“Our business, like many mature businesses, often continues practices or procedures that were adopted decades ago,” Coffey says. “As time goes by, the reasons for implementing the practice become lost; yet, the organization holds on to outdated methods that as the world evolves, actually complicates business. It is incumbent on a ‘Smart Leader’ to constantly validate everything an organization does to make sure that sound decisions made long ago are still relevant to today’s world.”
To put it into perspective, Coffey’s company collects coins from 300,000 machines every month. His firm’s counting rooms process more than 1 billion quarters a year, and they handle more than 250,000 service calls annually, with an average response time of 11.2 hours and a 97 percent first-time fix rate.
Over the course of the last three years, his team’s productivity has increased by more than 34 percent as a company.
Coffey did this through a $7 million investment in cutting-edge technology, and as a result of bringing best-in-class technology to his laundry company, his margins have climbed to be the best in the industry, his customer satisfaction has improved, and in the two worst economic years since the Great Depression, his company has enjoyed the best two years of organic growth in its 63-year history.
Because of his ability to change in the face of complacency, Coffey was named one of the 2010 Smart Leader honorees by Smart Business and Chase Bank. We asked him what keeps him thinking ahead, how he overcomes challenges and about the importance of giving back to the community.
Give us an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Our company operates what are essentially 42,000 small (self-service laundries) with hundreds of thousands of coin-operated washers and dryers. More than 2 million people do laundry in our rooms each week. Back in the 1960s, the company faced a threat from professional thieves who were experienced at picking locks. The technology of the day made the machines easy targets to a skilled lock picker and a great deal of revenue was lost.
To combat this threat, lock companies developed very sophisticated ‘pick proof” locks. Our company went one step further and developed a very intricate method of insuring that the same lock was only used a specific number of times in a given ZIP code or territory, which also prevented lost, stolen or illegally made duplicate keys from being used in a small geography. These steps and procedures implemented in the 1960s virtually ended this threat and were considered to be a big success at the time.
Over the course of the 50 years that followed, our company faced significant challenges to coin collector productivity because of having to inventory and keep track of literally thousands and thousands of unique keys. These processes slowed down production in our plant because the machines being prepared for field use all required different series of locks and keys, which had to be found, tracked, installed and recorded.
As I began to look under the hood of the company I was running, I started to ask ‘why’ more and more. What I found to be the most common answer was simply, ‘Because we have always done it this way.’
Our company today faces absolutely no threat from professional lock pickers. Today, our biggest threat comes from crack heads with sledgehammers or portable torches. Keeping the intricate keying methods alive works wonders for lock pickers from the 1960s — who are now over 80 years old — but it does little to help with today’s threat of a drugged up guy with a sledgehammer. This guy isn’t into picking a lock; he is into absolute destruction to find enough coins to buy his next rock.
By recognizing a changing threat, the entire company was able to move forward and get beyond what was a viable and necessary solution 50 years prior and begin to design a more streamlined process that is still equally as viable but much more cost-effective in today’s world.
Smart leaders must always be challenging status quo and revalidating processes and procedures to make sure the company is operating and evolving to face today’s challenges, not yesterday’s problems.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
Running a large laundry company with essentially 42,000 small Laundromats, 300,000 coin- and card-operated machines that more than 2 million people are using each week may not seem very sexy or high-tech. After all, it’s just laundry. However, that assertion is just plain wrong.
When I came to this company seven years ago, I spent the first 90 days traveling to 28 branch offices in 20 states talking to 100 percent of my 1,043 new employees. I did ride-alongs with each major job classification in our company — collectors, installers, service technicians, sales reps and managers. What I found was a company full of proud people with very long tenure who were drowning in duplication of data entry, outdated practices and suffering from a complete lack of coordinated use of technology.
It didn’t take long to walk in the shoes of the line employees to figure out what was broken and what needed fixing. The people performing these jobs every day provided me with the best insight into their struggles and, in many cases, gave me the beginnings of ideas on how to solve them.
Smart leaders talk to their people and learn to walk in their shoes. Smart leaders don’t make cuts for the sake of saving money; they let technology redefine the jobs and processes, which, as a result of implementation, lead to productivity enhancements.
Upon returning from that initial road trip, I created a 400-plus page strategic plan with my leadership team that we spent almost six years implementing and finishing. Today, our company has an enterprisewide IT system, where data entry is only performed once and where our data-warehouse-driven dashboards now allow business leaders to make informed decisions based on fact rather than intuition. In business, it’s not what you think that matters; it’s what you know.
Our vehicles have GPS tracking, we use state-of-the art satellite dispatching and routing, our counting rooms are integrated via computers to our ERP system, and our processes are streamlined to reflect the needs and realities of today’s world. This technological journey we are on has no ending as we continue to invest $1 million a year in updating and enhancing our capabilities.
How do you make a significant impact on the community and regional economy?
Our company has been in continuous operation for 63 years. Today, we employ more than 500 people in Calif., Nevada and Hawaii. More than 2 million residents of apartment communities, colleges, military bases and hotels use our 42,000 locations and 300,000 machines each week for their laundry needs.
Over 1 billion quarters are collected and counted in our high-volume, high-speed counting rooms, which makes us the largest depositor of quarters to the Federal Reserve, west of the Mississippi. We are the second-largest commercial laundry customer in the United States for our principal suppliers Whirlpool, Maytag and Speed Queen.
Our fleet of more than 400 vehicles is all purchased locally as are many of the supplies and services we consume. Our company works hard to be a good partner to local charities, homeless shelters and to those less fortunate than ourselves. As our company continues to grow and expand, we are actively hiring and working to provide a better environment for our employees’ families and consumers. Our use of energy-efficient, front-load machines save California billions of gallons of water each year.
It is companies like ours that represent the backbone of California business and economic development. We are proud to have our HQ in El Segundo, Calif., and look forward to our next 63 years of growth and prosperity.
How to reach: WASH Multifamily Laundry Systems LLC, or www.washlaundry.com