When it comes to being successful, it’s all about momentum. One small win needs to be parlayed into two wins, which in turn need to fuel the big win needed to make budget. You not only have to get people moving in the same direction, you have to keep them moving at a faster and faster pace. Otherwise, everything just stops. There are many aspects to momentum, and it starts with vital business ideals like the mission and vision statement, runs through relationship building and ends somewhere on the far side of culture. Only when everything is working together are you able to turn multiple small victories into momentum that can change an entire organization.
Below is a sampling of what three CEOs previously featured on the cover of Smart Business Pittsburgh had to say about keeping your momentum going to drive change.
“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. But if you really believe in it, you move forward anyway and find ways to make it work.”
Ed Stack, CEO, Dick’s Sporting Goods
“The key is to really show them what’s going on today and explain very clearly why the organization needs to change; then get them to help develop that future collectively with you.”
Dr. Christopher Olivia, president and CEO, West Penn Allegheny
“Whether it’s your clients or your employees, you’re less successful unless you have a relationship with these people. 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.”
Patrick Hampson, founder, chairman and CEO, MED3000
Believe in your plan and don’t be detracted by naysayers.
Explain to employees why things need to change and get them to help you do it.
Everything in business is driven by relationships.
When partners Steve Goodman and Craig Swill purchased Welcome Wagon International, Inc. in 2009, the business was still the world’s largest welcoming service for new homeowners at 82 years old. They decided to keep the company updated and relevant moving forward by refocusing the company completely on sales and marketing. The problem was, the company’s corporate culture was very negative and communication between the corporate and sales sides of the company was poor.
“You kind of had a sales versus corporate clash going on within the organization,” says Swill, the company’s CEO.
The corporate side cared more about technology and was insensitive to many sales-oriented issues. The sales employees felt cut off from many changes at the corporate level, with some of them working as individuals in remote parts of the country.
“When people do not have communication and are out in the field by themselves, they kind of get this paranoia. … So you have a lot of missed communication when there is lack of any communication,” Swill says.
To get employees re-engaged in the vision for Welcome Wagon, especially on the sales side, Swill and Goodman needed to reopen some lines of communication that hadn’t been open for decades.
Together, they went on a “world tour,” visiting every company region to give presentations for the sales teams and to discuss their vision and goals for the first 12 months of their leadership transition. Most of the people they talked to had never met anyone from the corporate office, much less the heads of the company.
“They were very touched that we felt enough to go out and really learn about their challenges in selling and about their challenges in the economy,” says Goodman, Welcome Wagon’s president.
“We asked them questions to learn what they were looking for within the organization. From the very beginning, we opened lines of communication between the corporate office and our field organization.”
They implemented weekly meetings to provide sales training for corporate employees, so they could better understand the experiences of their sales counterparts. On the sales side, they offered representatives and managers training opportunities to learn new technology and skill sets, giving them the resources needed to be most effective. Now, sales officers communicate weekly and daily with field officers to reinforce and align their goals.
After their one-year anniversary in 2010, Goodman and Swill did another world tour to discuss progress and go over their five-year strategic plan. Their reception this time around was a lot different. They’d grown sales every month, and in less than a year, they made Welcome Wagon a debt-free company.
“We started receiving hugs. Literally, people wanted to come and hug us,” Swill says… “We were able to check off bullet point by bullet point, page after page, all of the things we promised them, and we hit everything that we promised them. We were able to gain their trust, and that is huge.”
Today, Swill and Goodman continue to make themselves very accessible to the organization’s employees by talking on the phone to address sales problems, questions or issues, and always looking for ways to support the sales team with the resources they need to succeed.
“Some of the most negative people that I could give examples of a year ago were so positive this year and saying thank you for taking this organization and totally revamping it, turning it around, giving us products and giving us a company that we can now go out and truly be proud of in the way that we sell it every day,” Goodman says.
How to reach: Welcome Wagon, www.welcomewagon.com
Law of limits
According to Steve Goodman, successful strategic planning isn’t just about winning people over to your vision. That is one part of it, and so is communicating that vision effectively. But another key part of executing a strategic plan is recognizing and understanding other people’s limitations.
“You have to always understand, that just because we can get something done and we see things going from A to Z, that doesn’t mean that all of the people that you lead see things in the same way,” Goodman says. “Some people are really pigeonholed in what they do 100 percent; they don’t understand how to tie things together at different levels within the organization.”
As a business owner, CEO or entrepreneur who is used to fast-paced change and goal-setting, you may be tempted to push hard and move fast in carrying out your plan. However, leading people isn’t about pushing people in the direction you want them to go, it’s about guiding them, showing them you are aware of their capabilities, and giving them the resources needed to get there.
“It’s the ability to get people to see things in a way that makes sense as they move forward and to help them further their careers,” Goodman says.“You have to see people’s strengths and weaknesses to see how to move them.”
Shawn McGorry survived the days of the Wild West-like dot-com boom when employees enjoyed free Mountain Dew, foosball tables in every office and nonexistent dress codes.
So when he was charged with incorporating the cultures of the dot-com boom and a more serious corporation at Expedient Communications, he knew just how to handle it.
“The role in that kind of transition, especially a traumatic transition, is to be a very competent and thick-skinned man in the middle,” says McGorry, president and COO. “I spend a lot of time assuring, comforting and explaining to the management group and the employees of Expedient that things are different and there’s a reason.”
Expedient Communications, a network of data centers and a provider of managed services, has successfully steered through acquisitions while continuing to thrive. With 150 employees and annual revenue just shy of $100 million, Expedient offers a culture that most companies can’t.
Smart Business spoke to McGorry about how he successfully united different company cultures with compromise and communication.
Be honest. I try to have a very open and honest culture in the organization and make sure that not only the managers that oversee the different departments and functional groups but also the employees themselves feel empowered, feel engaged and understand what accomplishing their objectives means to the growth and success of the overall organization.
We have a longstanding practice of having open, all-employee meetings every quarter. We’ll have a luncheon and spend half a day sharing with all of our employees our successes, our shortcomings, our challenges, down to the financial numbers and sales numbers. We open up the kimono and let everybody in the company feel like they’re privy to everything that’s going on, good and bad.
Don’t be afraid to discuss and address company business or concerns directly, factually and confront any rumor mill that might be purveying or brewing that may not exist. Honestly address any concerns or any information that might be out there, whether it’s factual or false. If it’s factual, even if it’s concerning your bad news, acknowledge it and outline what you and the management team are going to do about it and take it on as a challenge. If it’s false, acknowledge that you’re aware of it and explain the reasons why it’s not true. Present data that demonstrates why that’s not the case.
Be available. I’m more often than not disappointed when I hear employees say, ‘Well, they were afraid to come to you or they’re a little nervous about coming to you, or what do you expect, you’re the president, they’re not going to come to you.’ That makes the challenge a little stiffer because there is a cultural protocol that is built in to our society that has these walls that get more impenetrable as you move up the management title chain.
I’ve done a lot to soften those walls and knock them down where I can. You have to keep your door open. Be very visible. Get to know everyone’s names that you could possibly get to know. It’s important that you have at least a congenial, friendly, nonassuming relationship with every employee you encounter. Periodically invite yourself to lunch with some of the lunch groups that inevitably form in every organization. Take the time to spend five minutes to exchange pleasantries, whether it’s asking an employee how vacation was or how their kids are doing or just discussing sports events.
Compromise. You have to manage the cultural clash from both ends and ask both sides to make compromises. It didn’t work in all cases. Some people didn’t survive. We have had employee turnover where the employee said, ‘Forget this; it’s not worth it to me. I’d rather go work somewhere where I could do what I want.’ People feel like if they can go work for a more liberal company, they can have more freedom and that’s what they want.
You have to look at all of the things that go with the work experience and look at them in a big basket. That is really your compensation. It just doesn’t include the paycheck in that basket, it includes benefits, it includes the work experience, it includes the opportunity, it includes some of those freedoms, it includes the people you work with, the friendships you have at work and travel time to and from work. You compare what’s in that basket to what’s in the basket somewhere else. I think we have a pretty doggone good basket.
How to reach: Expedient Communications, www.expedient.com
If you consider the challenges of integrating any two corporate cultures, it is no surprise that so many mergers fail. The probability that two or more cultures have identical histories or ways of doing things is virtually zero. So, from the time of the merger announcement forward, the importance of leading well and managing behavior begins.
The paper avalanche of a merger discloses legal and business due diligence about both companies. Unfortunately, the documents and the due diligence process don’t disclose the depth of cultural differences.
In other words, merger documents rarely reveal the patterns of behavior that have been shaped over decades by the systems and people within each organization. With a merger, the players abruptly change, leaders and leadership structures are altered, and expectations and behaviors that get rewarded also shift. The result: The old conditions that encouraged important behaviors no longer exist, and resulting behaviors become much less aligned with what made the individual companies so successful prior to the merger.
Under less successful conditions, subcultures can exist where the pockets become identified as the old “XYZ Co. sales guys” or the old “PFG Co. sales guys.” What are people really identifying when they use these labels? They are using “code” for identifying the behaviors those leaders predictably and reliably encourage — the way they “still” get work done. And so it is easy for these subcultures to become embedded, and the development of a new culture to be delayed — while profits suffer and full integration is put off. Leadership is key in preventing this from occurring.
Creating a new culture
Leaders can create a new culture and help encourage new behaviors by aligning expectations (like a new vision statement) with desired behaviors and by ensuring that leadership feedback and coaching actively encourages those behaviors. Taking the time to do this work is where most mergers fall short.
In the frenzy to get FTC approval and names plugged into organizational charts, it is tempting to view “culture” as a distraction and a waste of time. Dedicated leaders, doing everything imaginable to hit pro forma targets, often forget that it is their leadership that most powerfully influences how their organizations perform.
Key leadership actions for successful merger integrations include:
Invest time in clearly articulating to everyone the vision, strategy and means of success for the future. Make the expectations clear and consistent. Encourage new teams at all levels to work together and to review the critical results targets at their levels. Identify key behaviors that need to occur for the targeted results to be met.
Invest time to plan and deliver positive consequences for achieving those results and decide how those who engage in less desirable behaviors will be coached. Don’t leave success to chance. Ensure that every interaction the leaders have with the organization are leveraged as opportunities to show what the company stands for and encourage the desired behaviors needed for success.
Steward business plans with oversight of performance versus plan. Use this opportunity to track progress, reinforce success, remove barriers and take corrective action. Show through words and actions that the performance is the best lagging indicator of how things are working inside the organization.
Ensure that rewards and recognition systems are aligned with the behaviors needed for business success and for behaviors critical to the desired new culture. Maintained or improved business results are especially key in a post-merger situation. Leaders need to actively coach and encourage desired behaviors, and the consequence systems need to reward them.
There is no substitute for leadership’s role during merger integration.
Leslie W. Braksick, Ph.D., is the co-founder of CLG Inc. and the author of "Preparing CEOs for Success: What I Wish I Knew and Unlock Behavior, Unleash Profits." Braksick consults with top executives and their boards on issues of executive leadership succession and effectiveness and strategy execution, including merger integration.
Reach Braksick at firstname.lastname@example.org or visit CLG Inc. at www.clg.com.
Singing from the same sheet. Following the same path. Reading from the same page.
No matter what idiom you want to use, Stan Johnson’s message is the same to everyone at Veteran’s Affairs San Diego Healthcare System: He wants everyone aligned on delivering the best possible experience to the system’s customers — its patients.
“That is really leading a culture change in terms of working with all staff, informing the staff of what it means to provide patient-centered care,” says Johnson, the director of the 2,400-employee, La Jolla-based health care provider within the U.S. Department of Veterans Affairs. “A lot of what we do was already patient-centered care. But it was really looking at redesigning our delivery of care so it is geared toward meeting and exceeding the patient’s expectations.”
Johnson says changing a culture can be challenging and exciting at the same time. You are excited to implement a new way of thinking among your team, but at the same time, there will be bumps in the road as you rebuild processes from the ground up and try to uproot habit-entrenched employees and attempt to show them that the new way is a better way. It can be much more easily said than done.
At the VA San Diego system, the leaders put a template in place by becoming an affiliate of the Planetree Alliance — a nonprofit partnership of health care organizations that advocates for care that is centered on an overall positive experience for the patient. The alignment with Planetree gave Johnson a path to follow when he assumed control of the health care system in 2009. But Johnson had to bring the plan to life every day and coach more than 2,000 employees to do the same.
He did it by involving as many people as possible in the decisions that would affect the system’s future. He sought out the opinions and ideas of not just his employees but patients, as well.
“You really need to look at your organization through your customers’ or patients’ eyes,” Johnson says. “What we’ve done with some of our system design groups is involve many of our patients, because you have to know firsthand what the expectations and needs of your customers are.”
Engage your employees
You’ve probably heard it countless times in your career: Your culture isn’t what you say it is; it’s what your employees believe it is. You can preach all you want on your organizational principles, but if you don’t follow those words with like actions, your culture is going to wither, and distrust will seep into the hierarchy of your company.
One of the actions you need to take is opening a dialogue with your employees. If you are preparing to point your company in a new direction or alter your defining principles in any way, your employees will need opportunities to speak with you in person.
Johnson and his leadership team create those opportunities by getting many people together for a few days off-site, free from workday distractions, where employees can feel enabled to speak up, offer feedback and share ideas.
“About 85 percent of our staff has been on a retreat where they begin to understand what patient care is,” Johnson says. “They begin to individually understand what they individually could look at to improve the patient experience. As a leader, you want to listen to their ideas and suggestions and start to implement things that come out of that, so that it starts to be driven by them instead of being driven by upper management.”
Of course, you can’t implement every employee idea in the name of strengthening or changing your culture. But you can offer feedback on all ideas that come your way, and you can implement the ideas that make the most sense for where your organization is at that point in time. If you don’t at least do that much, you can expect the dialogue, and the wellspring of ideas that comes with it, to dry up .
“You can ask and you can listen, but unless you actually implement some of those suggestions and react fairly quickly to their good ideas, that will dissipate or go away fairly quickly,” Johnson says. “People simply will not continue to give you good ideas and suggestions if you’re not listening to them and implementing some of them. So what you really want is a mechanism to allow your people to make some of those suggestions but also to follow through on your end with the action and implementation of providing feedback and recognition.”
Recognition is another key cog in achieving buy-in on any new initiative. If you want your employees to embrace new cultural principles, reward their good behavior and hold your high performers aloft as an example for everyone else.
It’s something that Johnson emphasizes on a regular basis throughout the San Diego VA system.
“Recently, our communications work group had a patient call center that is about 16 staff members who take a lot of calls, schedule appointments, and the wait time for those calls was longer than we what we liked,” he says. “So those individuals worked with our system redesign staff, flow-mapped the process to see if there were steps that didn’t really add any value to the process any longer, and they were able to make significant improvements in about a two-month time frame.
“Myself and our leaders in that area went to that work area and personally recognized them with an in-person thank you as well as a cash bonus. Many times, it’s a combination of the personal recognition and financial reward that really helps keep employees engaged on that level.”
Stay close to customers
As a business leader, it is imperative that you maintain close relationships with your customers. Without customers, you don’t generate revenue, you don’t turn a profit, your employees don’t keep their jobs and, eventually, you go out of business.
With that in mind, you need to develop avenues to build and maintain customer relationships. Johnson takes it a step further, utilizing the vast amount of military technical training that his organization’s patients have absorbed, by encouraging patients to get involved in various initiatives throughout the system.
“One of the system redesign efforts right now is focused on communication, and a subset of that talent is telecommunications,” Johnson says. “We have a couple of individuals who use the VA for their care, and they have an area of expertise in telecommunications. They’re kind enough to volunteer their time to work with our work group.”
If you always keep it front of mind that your customers are your reason for being, you will be much more apt to seek out their opinions and input on how you run your business from a service standpoint.
“That is the key, to have constant feedback from the people you take care of,” Johnson says. “That is what we’re here for. You have to make sure you’re meeting their needs. It’s not just what we think they’re asking us for, it’s finding out what they’re truly challenged by in using your system.”
As with any other aspect of your business, customer interaction needs leadership with an eye toward continuous improvement. No matter how good you think your system is, no matter how well you think you stay in touch with the people you serve, it can always be done better, and you and your leadership team should constantly seek ways to build a better customer service mousetrap.
“It’s like anything else when you’re in a leadership position,” Johnson says. “You continually work at it. You take nothing for granted. Just because you’re doing something well now doesn’t mean that you’re not continually looking for improvements, how you can be more efficient and effective with what you’re doing. Just because it’s working well now doesn’t mean it can’t be done better.”
Johnson takes the reins when it comes to driving that mentality throughout the organization, but ultimately, he wants all of his employees to become self-starters in delivering an exceptional patient experience.
“It is the responsibility of every single person on our staff,” he says. “We’re here to provide a service to veterans who have served our country. Each one of us, each individual who works with the VA San Diego Healthcare System, can make sure that the patient experience exceeds their expectations. That is what we’re trying to instill in our patient-centered care and affiliation with Planetree, to make sure all staff understand that and can individually make a difference. That is why we want everyone to view it as their responsibility, all the way up to me.”
Once you have systems in place to allow for engagement of both employees and customers, you need to keep watering the ground with frequent communication. Johnson views continual communication and cultural reinforcement as one of the biggest challenges before him each day.
The challenge of delivering good communication each day is complicated by the fact that you can’t be in all places at all times. You have to have a network of managers and electronic interface points that allow you to keep your messages in front of both employees and customers when you can’t be there in person.
“Communication is another one of those things that you’re always striving to do better,” Johnson says. “What we try to do is communicate in multiple ways. For instance, we have electronic message boards up in elevator lobbies at clinics. We use them to share updates on what is going on at the facility, new information that we want to share, whether it be patient satisfaction or how we did with a recent survey.
“You’re also getting that information out there through e-mail, social networking sites like Twitter and Facebook, many different ways. Different methods of communication work for different people, and you have to use them all to communicate your strategies and your benchmarks that you have set or that have been set for you.”
But even after you’ve rolled out a new direction for your company, even after the meetings and dialogues with employees and customers, communication remains a two-way street. Feedback from multiple channels is the only way you can ensure that your message is reaching the people you want it to reach and if they are buying in to the message.
“You’re always kind of surveying people, both formally and as you talk with people throughout the day,” Johnson says. “We think we might be doing a good job of communicating, but until you hear it from your customers, patients or staff, you probably haven’t done a good enough job yet.”
How to reach: Veterans Affairs San Diego Healthcare System, (858) 552-8585 or www.sandiego.va.gov
The Johnson file
Veteran’s Affairs San Diego Healthcare System
Born: Bloomfield, Iowa
History: I joined the Navy and came to San Diego in 1972. I did my boot camp here and served here. I was in the Navy for four years, and they were kind enough to support my education and training, so after that, I went back to Iowa and earned a bachelor’s degree in business administration and a master’s degree in health care administration from the University of Iowa.
What is the best business lesson you’ve learned?
Listen to the patient. Involve your staff and your customers in your improvement efforts.
What traits or skills are essential for a business leader?
The key is to develop good working relationships, be transparent and treat people fairly.
What is your definition of success?
For me, it boils down to hearing firsthand from our customers that we’ve done an outstanding job for them.
Ralph Scozzafava had just walked off the plane, but he already knew Furniture Brands International Inc. had a safety problem at one of its factories in Mississippi.
“The guy that picked me up at the airport had some dried blood on his pants from one of our key associates on the production line that had just cut their finger and been brought to the hospital,” Scozzafava says.
Unfortunately, safety wasn’t the only concern for Furniture Brands when Scozzafava arrived in early 2008.
“We were low on cash and we had a pretty big debt balance and really some liquidity questions and concerns,” says Scozzafava, the company’s chairman and CEO. “We also had declining margins and increasing administrative costs to the point where our operating margins were approaching zero and ended up negative very quickly. There were a lot of things happening at the same time, all taking us to a very difficult place.”
But before he could address any of those concerns, he had to get people in the company to realize that there was, in fact, a problem that needed to be addressed. The furniture retailer has 6,500 employees in the United States and 2,000 more employees abroad.
“A lot of folks just thought, ‘Hey, we’re going through a bit of a rough patch,’” Scozzafava says. “If we don’t tell people where we are, in a lot of cases, they just don’t know. So it’s informing. We have a problem here. It’s an issue. We have to change, and we have to change intelligently and quickly.”
It was time for Scozzafava to start talking and get everyone moving on the changes that needed to be made.
Start a dialogue
One of Scozzafava’s most pressing concerns, in addition to making the company safer for employees, was that he needed to generate some cash for Furniture Brands. The company was losing a lot of money.
“We had over $300 million in debt, we had $27 million in cash, and we were losing money on the operating line,” Scozzafava says. “You don’t last long with a business of our scale if you’re doing that. So the big thing for us was to generate cash.”
In this type of situation, you can’t just go to your people and say, ‘Hey, we need to generate more cash.’ You need to show them what they can do as an individual or as a group to help you solve your problem.
“If they don’t have line of sight, ‘What do I need to do to help?’ you’re not going to get the full engagement that you really want to get,” Scozzafava says.
In other words, spare the corporate lingo and Wall Street clichés when you’re speaking to your employees.
“Use words you would use with your family,” Scozzafava says. “Relate some interesting stories. Try to make things sticky if you can. The state of the union address as told with your best formal English doesn’t help. If you use every business cliché in the book, you’re not sincere. If they feel like you’re not sincere, if it feels packaged, they’re not going to listen. It’s not going to be compelling.”
Scozzafava needed to get his employees engaged in coming up with a solution for the company’s cash concerns.
“I tell our folks, ‘I’m going to tell you everything I can as fully and clearly as I can as many times as I need to so you fully understand,’” Scozzafava says. “And then I’m going to ask lots of questions so you can do the same with me. If you have that kind of dialogue, there’s really nothing up anybody’s sleeve.”
It has to be a dialogue, meaning two-way communication, and the best way to achieve that is to get out of your office.
“You’ve got to penetrate the organization,” Scozzafava says. “My direct reports will feed me info that is good, informative and interesting. But if I want to know about the supply chain, I’m going to go down on the factory floor and talk to a lot of people. If I want to know how our retail stores are doing, I’m going to go to retail and I’m going to ask a lot of questions and visit 10 stores.”
And if you want to know about a possible safety concern, you’re going to go visit one of your factories.
“I went on the factory floor and saw what we were doing and how we were operating the equipment and I knew we had a safety problem,” Scozzafava says.
Scozzafava discovered that multiple factors were leading to the cash issues. Safety problems were caused by improper use of equipment and were affecting product quality. This was affecting the margins and ultimately leading to the problem with the cash.
It’s the kind of information that you can only get when you approach your research with an open mind.
“The temptation is I want to bucket things,” Scozzafava says. “I’ve been doing this for 30 years and I’ve observed a situation and the knee-jerk reaction is to say, ‘Oh, that’s just like …’ and name a situation, something you’ve gone through before. When you do that, sometimes you miss it all together. Most of the time, you get it close, but you miss the nuance and you really can’t get a good clear assessment.”
As you begin to generate dialogue and ideas to make your company better, you need to create accountability to make sure that the ideas are investigated and implemented if they turn out to be viable.
Safety was one of Scozzafava’s biggest worries with his business.
“What are the safety ideas?” Scozzafava says. “We’ll put them on a bulletin board. Those ideas have initials next to them. Who gave us the idea? They have a date of when we’re going to evaluate it and get it solved and when we’re going to implement it.”
An idea was raised to install sewing tables in one of the factories that could be raised or lowered to help eliminate repetitive motion injuries.
“When are we getting the tables in?” Scozzafava says. “When is it getting installed? When is it finished? It’s about the idea, evaluating the idea and putting people in place who are accountable. Put their names next to the task and then finish the job.”
When you create ideas or metrics for employees to live by, they need to be ideas that are objective in nature like the sewing tables.
“There are certain things that you can measure very well,” Scozzafava says. “Those are very data-oriented things that you should use as the core of what you measure. The things that become matters of opinion, if you make that a focal point of what you’re doing and lots of people give their points of view, you’re going to struggle. Cut-and-dried measures are always the best.”
Work with each department on what it specializes in and help the department come up with measurable goals that help the company.
“So for example, 2008, we’re here to generate cash,” Scozzafava says. “But we’re also going to work on building our brands, and that’s the work the marketing people will do. We’re also going to work on getting more efficient in our factories. That’s the work the supply chain people will do. You can go down the road. The finance team has to centralize finance and accounting and accounts receivable and accounts payable and credit. That’s the work they have to do. So there’s the singular big goal we’re all working on and then there are pieces within the company that individual groups do to make us better.”
You have to keep pushing the importance of initiatives and making sure accountability is part of all of them.
“You think you’re saying it enough, because you’re thinking about it all the time and you’re talking to your direct reports or your executive team about the same subject all the time,” Scozzafava says. “So that repetition is something you just assume is going through the organization. And it’s not. One of the things I’ve learned is you have to tell them, you have to tell them again, you have to tell them what you told them, you have to ask if they understand it, tell them again, have them repeat it, quiz them.”
So if you think you’ve delivered your message enough after all that, you might want to do it just one more time to be sure.
When you ask employees to help make your company better and they step up and do just that, you need to show them that you appreciate their efforts. By doing so, you increase the odds that others will follow their lead.
“Good people want to do well,” Scozzafava says. “They want to be part of a winning team. If they see their peers somewhere else within the company performing very well and being recognized and rewarded for that performance, they typically not only want to mirror that, they want to do better. If you get the right people and treat them right and tell them what they need to do and listen to the ideas they have, it’s powerful.”
You can show your appreciation in a number of ways. There are the gift cards and cash bonuses that all employees are grateful to receive. But your ability to show appreciation and gratitude can also go a long way toward helping your business be successful.
“When you have the title, until they meet you, there is always going to be some kind of trepidation,” Scozzafava says. “People want to get it right or they want to make a good impression. If they see you as a regular person, if you get information and you do something positive with it and you’re not looking around trying to zap somebody or catch somebody, pretty soon they understand what your intention is. If it’s a positive intent, they’re going to share more and more with you.”
Scozzafava’s ability to get people to buy in to his effort to turn things around at Furniture Brands is showing some signs of success. While net sales dropped from $1.7 billion in 2008 to $1.2 billion in 2009, the steady loss of cash seems to have been stopped. And safety on the job is better than it’s ever been before.
“It all goes back to the build, win, deliver, grow strategy,” Scozzafava says. “[Employees] know that’s what has taken us from losing $400 million in 2008 to losing over $100 million in 2009 to making money through the first three quarters of . They know if we stick to that strategy, if we’re aggressive and prudent about how we change, differentiate and do things better, we’re making the problem go away.”
The key is to stay focused on helping your employees help you.
“If you expend your energy and feel spent, you’re probably not doing enough within the organization to drive the kind of morale and camaraderie and high-performance culture you want to create,” Scozzafava says.
How to reach: Furniture Brands International Inc., (314) 863-1100 or www.furniturebrands.com
The Scozzafava file
Chairman and CEO
Furniture Brands International Inc.
Born: Danbury, Conn.
What was your first job?
I worked for my dad; he was in the refrigeration business. One guy, one truck. Probably from age 6 to 7, I knew all the tools in the toolbox. I could wire things, run pipes, weld, I could do a lot of stuff. I haven’t done it recently. But give me the stuff, I’m sure it would come back.
What is the best advice you’ve ever received?
Hard work and common sense. My uncle said if you can just master those two things, you’ll be successful in anything. He was an entrepreneur who did very well and had no education and those were the two pieces.
If you could sit down with anyone in the world, past or present, who would it be and why?
I’d like to have dinner with my dad.
Scozzafava on public speaking: I’m real big on bullet points. I’ll have slides without many words on them. I may have a little scrap of paper in my hand that may have 6 or 7 thought starters on it. Each message that I’m trying to get across, I try to have an accompanying story.
I try to make it engaging. I draw people out of the audience a lot. I’ll call people by name and I’ll ask them to stand up and talk about things so that the message is what I’m going to call multi-medium. Part of it’s on the screen, part of it’s in a video, part of it’s a story from Ralph, part of it’s a story from the audience. You have a lot of different stimuli coming at you.
Tony Reisz wasn’t facing a company on the brink of ruin or severe financial issues. He was facing something much worse: apathy.
“It was our own internal culture and leadership,” says Reisz, the president and CEO of 500-employee Ontario Systems LLC. “What became blatantly obvious to me was the culture and leadership had created a limitation to growth. The culture was the lifestyle business type of culture. ‘We’re comfortable. Why do we need to grow? We have investors, but so what. They’re making money. How much money do you really need to make?’ Leadership had allowed that culture to take place.”
Ontario provides software to collection agencies and hospitals to help them collect their bad debt. The company had some nice products that customers were interested in buying, but sales had hit a plateau. The effort to continue developing new products and technology just wasn’t what it once had been.
“This had been a pretty successful company, 30 years in business, that had reached the medium-sized level but had stagnated from a growth perspective,” Reisz says. “Solid customer base, good product suite but had literally stagnated. I had a huge challenge ahead of me. One was to convince the organization that growth was a good thing and not a bad thing. Two, really reposition the entire company to put it on a growth attitude.”
The economy had begun to spiral into what would become a deep global recession. Reisz knew this presented an opportunity for Ontario as companies would be stepping up their debt collection efforts and would need software to do it.
He just needed to show his people the potential they had and weed out the elements that had caused the company to stagnate. So he decided to begin by showing them a wet diaper.
Demonstrate the problem
OK, so he didn’t really show them a wet diaper. But this metaphor, which came from the studies of Dr. Behnam Tabrizi at Stanford University, seemed like a good place to begin to convince everyone at Ontario that they had a problem.
“It’s very visual, and it certainly is a great representation,” Reisz says. “You have to put somebody in a position where they recognize that they’re not comfortable. You have to change. In order to do that, you have to create that wet diaper so somebody absolutely has to change.”
Reisz got the attention of his staff by making it clear that at that moment, no one’s job was considered safe.
“We made it really clear at the beginning of this that no one in the company had a right to a job,” Reisz says. “We were going to be evaluating them over the next 90 days. Their leadership, their character, their results, their performance. We were going to be reorganizing the business based on the new strategy and based on what we learned from them during that 90-day period of time. That was going to determine where they were going to be placed in the new organization.
“So for them, it was also a tryout. You’d be surprised how easy it was for people who normally were adversaries to find a way to work together, because they had a common goal. They knew they were being evaluated.”
It’s not just about creating fear. You can’t just get up and talk about the need for change without figuring out what needs to change. If you don’t give your people a chance to be part of the effort to make that change happen, you’re not going to accomplish anything.
So Reisz took 50 people from the roughly 600 employees in the company at the time and developed teams to analyze all aspects of company operation.
“I empowered them to diagnose the patient,” Reisz says. “I empowered the teams to come up with the plan. I empowered them to create the actual details of how we were going to accomplish it. I met every week with them to make sure that we were removing obstacles from the way and that they were making progress. What I wasn’t doing was impeding them or micromanaging them about what I thought about the data they were gathering.”
It has to be that way in order for it to work. You can get the ball rolling on change and explain the need for it. But you can’t make it happen on your own.
“I’m responsible and accountable for everything,” Reisz says. “The way that I accomplish it is I delegate very significant portions of that to people who are really on top of it to do that portion of the job. Otherwise, I can’t be successful. If you’re going to be a big company, a growth company, you can’t do it all alone. It’s not possible.”
Get people involved
Reisz was confident that Ontario Systems had the potential to be a successful and dynamic company. But he needed to put his people in a position where they could help him capitalize on that potential.
“We gave everyone the opportunity to not only understand the strategy but to know exactly what their role was in the execution of that strategy,” Reisz says. “It wasn’t me who walked in and said, ‘Here’s what we’re going to do.’ My job was to guide that. But they needed to be bought in to the process. They know the company better than anyone else. They are the agents for change. They are the ones that need to execute on that change. For them to own it and to say, ‘This is me. I put my name and thoughts and ideas into this,’ it becomes virtually impossible for someone not to execute on that change.”
These teams have to represent your vision for change.
“There were certain characteristics of leadership that we were looking for when we chose members to participate in this team,” Reisz says. “It wasn’t like we had everybody in the organization participating. We had an opportunity to really look at leadership and make some decisions of ‘OK, here’s the type of people we think we want.’
“Cross-functional teams looked at every facet of the business and came to a conclusion. Is this what we want to do? Do we want to be in this business? If we’re to be successful in this business, here’s exactly how we’re going to do it. And then creating the operational plan that comes out of that strategy in order for us to go back to the organization and execute on it.”
It’s critical that you put a time element on the work of these teams. You’re not micromanaging. But you are making it clear that they need to move swiftly in their work.
Reisz went with 30 days from the formation of the teams to the creation of a report.
“It forces people very quickly to get everything out on the table, because they have a deadline they have to reach together,” Reisz says.
The time element keeps people on the teams from playing the blame game or getting territorial about their own department.
“As the CEO, I was the ultimate change agent for the organization,” Reisz says. “I had a weekly meeting with each of the rapid response teams. They had to report out to me on their progress. So I was able to watch very quickly to see who was performing, who was staying in the territorial mode and who was thinking outside of the box.”
Make the tough call
At some point in a transformation, tough decisions need to be made. It’s at that point that many corporate transformations stall out, because the leader doesn’t have the nerve to follow through and make those tough decisions.
“You have to be the one who is not willing to let yourself go backward,” Reisz says. “You have to have the intestinal fortitude to stick to it when it gets tough.”
The tough time for Reisz came after the reports had been reviewed and analyzed, and it was determined that employees would need to be let go.
“As a byproduct of our new plan, I laid off a fair chunk of the organization,” Reisz says. “That in itself was the moment of truth. I had to make the tough decision. … For me to have believed that people were behind me at that point, I would have been kidding myself. That was a very tough, lonely time for me when I had to make that decision.”
However, as Reisz and his leadership team looked at the result of all the research that had been conducted by the cross-functional teams, he felt it was the right thing to do.
“We’re a 30-year-old company that has rebuilt itself into a company with new markets and a new growth attitude,” Reisz says. “The biggest transformation that we made was a talent transformation. The leadership and the talent we have in the organization today is fundamentally different from the talent we had in the company two years ago.”
Despite the positive changes, Reisz knew that there were and still are people in his company who did not agree with what he did.
“For the person who is gone, a decision has been made,” Reisz says. “For the person that stays, there hasn’t been a decision made yet. They have to make a personal decision. Is this what I want to do? Do I want to look at other options? Do I even have other options?”
Reisz conducted a number of employee surveys and shared the results with his people, even when those results did not reflect well on him personally.
“Here is a segment of the company that absolutely does not buy in to our strategy,” Reisz says. “We were very open about that, that we still have about 25 percent of the team that’s not on board with us. Here’s what we’re trying to do about that. It’s not calling people out, because you don’t know who they are and you’re not trying to find out who they are. It’s just being really transparent that we’re gaining momentum, but we still have people that are really skeptical.”
When you show yourself to be open in sharing the mood of your people, both good and bad, you increase your chances of eventually getting more support.
“By sharing those results as widely as we did, the peer pressure started to step up,” Reisz says. “When somebody started to hear somebody else at the watercooler who would be bad mouthing something or creating some rumor along the way, they would say, ‘Hey dude, what are you doing? We got stuff to do and don’t you be the one who is standing in the way of this.’ You create this kind of internal peer pressure when you’re transparent. People have an opportunity to police themselves. It’s a lot more effective than when you try to do it.”
As Reisz looks at his company, he sees a lot of progress. But it’s all about the diligence and the commitment to carry out the plan that makes the difference.
“A lot of people can lay out a great strategy or plan,” Reisz says. “But it takes a ton of everyday effort in order to make sure that you execute in order to overcome the obstacles that are going to be along the way.”
How to reach: Ontario Systems LLC, (800) 283-3227 or www.ontariosystems.com
The Reisz file
President and CEO
Ontario Systems LLC
Born: Owensboro, Ky.
Education: Bachelor of arts degree in business, University of Dayton
What was your very first job?
I was a paperboy for the Waukesha Freeman. There were two things that I had to do as a paperboy that were really important. It was a morning paper. So I had to get myself up, stuff the papers and deliver them. So it taught me a lot about responsibility.
But the second piece was it taught me a lot about how to deal with customers. I had customers who would complain that I put the newspaper in a spot that it blew in the yard or it didn’t get there at exactly the time they wanted it to. Then I had to collect money. I had to go door to door every single week and collect from my customers. That was my job.
I learned a ton about how to interface with customers at 10 years old. You’re intimidated and you have to go door to door and say, ‘Look, you owe me $1.50 for the newspaper.’ It gave me a lot of confidence. I delivered a service, and as a part of that service, I deserved to be compensated.
If there was one person you could sit down and speak with, who would it be and why?
My dad, Jerry. I lost my dad a long time ago. The lessons he taught me growing up, I’m still learning today. I’d love to sit down and talk to him again. I’d give anything to sit down and have a conversation with my dad.