We’ve all read or heard the perennial favorite old English nursery rhyme about Humpty Dumpty who fell from that darned wall, was irreversibly damaged and could not be put back together again. In business, we spend a lot of effort fixing what has been broken, rather than preventing the breakage in the first place. Think of your own organization and recall how much effort went into trying to fix that last big problem that could have been critical to your business and, ultimately, sales and earnings. No doubt that once the issue reared its ugly head, you went into fire drill mode, barking out orders to get to the bottom of the problem and fix it immediately, as measured in hours and days, not weeks and months.
Stop and think about the cost, the interruption factor and diversion of effort this “pick up the pieces” exercise inflicted on the organization. Key people had to drop everything and scramble, not to make a penny but to stop the loss. Of course, every business periodically hits a slick spot and has to maneuver quickly to regain control; it comes with the territory.
Wouldn’t it have been easier, however, to prevent the crisis before it became one? Just ask BP about its oil spill last year and what it cost in hard dollars (or pounds), not to mention the almost irreparable harm to its reputation and perhaps long-term future. This is a dramatic case of failing to take the necessary steps to avoid the oil damage itself, as well as the near cataclysmic peripheral stumbles made in handling communications. The amateurish PR efforts are what really pushed BP’s Humpty Dumpty, aka the Gulf of Mexico Deep Water Horizon spill, off that proverbial wall. What actions can your company take to ensure you don’t encounter your own Humpty Dumpty?
Sure most companies have risk management programs, which involve assessing potential dangers, working to prevent them and determining the costs if the unimaginable does occur. Unfortunately, too many companies apply the risk management thought process only to issues that are most associated with accidents. The Humpty Dumpy theory has to be extended to all areas of a business, from customer service to employee productivity and everything in between.
It starts with paying attention and sweating the small stuff and taking action when the first whiff of a problem occurs. It’s almost a gut feeling that surfaces when good executives encounter something that just doesn’t seem right. Call it a sixth sense, but it can happen at any time and in some of the most unusual places.
As an example, you’re reviewing an internal report on an important new project, and as you study the material, something just doesn’t seem right. The numbers add up, but nonetheless you know that all the dots aren’t connecting as they should — you’re just not sure what’s wrong. You pause and put the report down for a few minutes, and then it hits you. Kaboom, a subtle yet critical step was omitted from the plan. Now that you’ve found the missing piece, you make a few calls and a potential problem that could have easily morphed into a big issue is squelched.
These same gut feelings apply to “reading” people, not necessarily by what they say or do but many times by what they don’t say or do. Here’s another scenario, your biggest vendor normally touches base with you like clockwork, sometimes if only to say hello. One day you realize you’ve not heard from this supplier recently. You wonder what’s up with this? However, you’re busy and the thought quickly passes. Big mistake. You should have picked up the phone, found out what the story was, and if there was an issue brewing, fixed it then and there.
It all gets down to trusting your instincts and recognizing when your Humpty Dumpty might be leaning too close to the wall’s edge. That’s the same wall from which anything can topple and shatter beyond repair. Preventing that from occurring requires paying attention, looking for telltale signs of change and then being perceptive enough to know that there is something that needs scrutiny — even if you can’t pinpoint exactly why or what.
The risk in your own little kingdom is that when your Humpty Dumpty falls you may not have enough of the King’s horses and men to put the pieces back together again.
Do the right thing. This may seem like a simple task, but there are many circumstances in the workplace that challenge employees’ ability to act within their organization’s core mission and values. With a strong ethics program, employees can better grasp expectations and understand their individual role in making the culture of compliance thrive within the organization as a whole.
“The law is the minimum standard,” says Debbie Wheeler, regional compliance director, Tenet Florida. “To help employees make the right decisions that properly reflect the organization, employers need to take a step further by developing, communicating and enforcing clear standards of conduct.”
Wheeler discusses with Smart Business why ethics in the workplace is critical, and offers suggestions for building a strong employer-driven compliance program.
What are the benefits of managing ethics in the workplace?
A strong ethics program aligns the organization and its employees. It provides a solid foundation from which an organization can build a consistent culture of ethical decision-making, transparency and accountability. I always say that the law is the minimum standard; what goes beyond that in our daily decision-making of ‘right’ versus ‘wrong’ is guided by integrity and ethics. Employers can play an important role in helping employees make more ethical decisions in the workplace by routinely communicating and enforcing a standard of conduct. This serves as a guide for employees to understand their organization’s specific expectations for communication, decision-making and actions in their work. When employees feel that their own standards and values align with their employers, they are generally more positive about their work and even more productive.
What is a code of conduct and why is it important?
A code of conduct can be viewed as a guide or reference for employees, as it provides a resource to influence ethical decision-making and behavior. The code of conduct also reaffirms the values of the organization, which often include integrity, transparency, honesty and respect. For example, the code may communicate that employees are expected to: make decisions that support the organization’s values; be responsible for their decisions and doing the right thing; raise issues that are inconsistent with their workplace values; seek appropriate help when the right decision is not clear; and have the tools to effectively solve problems.
It’s important to have a code or standard of conduct, but it’s even more important to enforce it and offer consistent support and resources for employees who may need help with the ethical decision-making process. At Tenet, our Standards of Conduct provide employees with an Ethical Decisions Guide. The guide is a step-by-step algorithm that can assist individuals with making decisions when the right one is not obvious or clear. In addition, Tenet has created the culture of open communication and trust, where employees understand how to go through the proper channels to discuss and report their concerns. One of these channels is the Ethics Action Line (EAL), which is available 24 hours a day. Employees know that they can call this line and anonymously talk to a qualified professional who can help address their problems and offer a suggested process to reach a resolution. Employees are also encouraged to go to their supervisors and express ethical issues without fear of retaliation. We have taken every effort to open communication within all organizational levels while ensuring that employees feel protected. I recommend that organizations promote their code of conduct and ethics program by fostering a high level of trust between employees, management and administration.
What does a highly ethical organization look like?
A highly ethical organization sends out a clear and consistent message of its expectations; employees are aware of their standard or code of conduct and put it into practice each and every day in their work. It’s an organization where everyone understands the culture of transparency and full disclosure. Because of this, employees feel comfortable about speaking up when they perceive a potential ethical dilemma personally, or see a potential problem within the organization. When the entire work force is acting based on shared values and standards, the organization has a more influential force to reach its goals.
What are some ways to train people about an ethics program and ethics in the workplace?
It’s important for every employee to be trained on the organization’s standard or code of conduct at the start of and routinely throughout their employment. I recommend requiring specific ethics training for every new employee upon hire and at least annually thereafter for review. In my experience, it is beneficial for employees to hear real-life examples of ethical dilemmas as well as their resolutions. These examples give employees an opportunity to apply the standards of conduct to real situations and it creates an applied learning experience that will be remembered.
Organizations should also consider designating a qualified point person who is responsible for managing and emphasizing ethics in the workplace, such as a compliance officer. This person must display sound ethical judgment and character as the role model for the organization. He or she should also engage employees and earn their trust in order to influence the entire organization’s culture of compliance. This person is the advocate and resource for all employees as they strive each day to ‘do the right thing.’
Debbie Wheeler is the regional compliance director of Tenet Healthcare Corporation, Florida region.
Before coming to the United States to oversee Grupo Eulen’s international division in Miami, Luis Rodriguez had worked for the Spanish outsourcing company for 10 years in various divisions at its Spain, Dominican Republic and Chile offices. During that time, a question he repeatedly asked employees that worked for him was, “Do you think you will retire still working with Eulen?”
In Chile, where Rodriguez spent four years prior to becoming CEO of Eulen America, he estimates that 95 percent of his employees answered yes to that question.
“We always look for that, that people are remaining with us for a long period of time, because that’s being part of the growth of a company and being part of a company,” Rodriguez says.
After moving to the United States two years ago to head up Eulen America, Grupo Eulen’s newly acquired aviation services subsidiary, Rodriguez noticed that people in the United States changed jobs much more often than in other countries, moving from one company to another every four or five years instead of every 10 or 20.
As a part of a $2.4 billion company, Eulen America has the capital resources to expand and grow, but to grow successfully, it takes personnel resources, as well — employees who are willing to commit to the Eulen vision and communicate it to customers. To grow his company in new markets, Rodriguez had to show his people the value of being a long-term employee at Eulen (pronounced A-lin).
Address employee needs
Employees won’t follow leadership that they don’t feel can lead them effectively and, therefore, they can’t trust. As a CEO who oversees nearly 1,600 employees in Miami-Dade County alone, Rodriguez is unable to meet with every employee and build this trust through personal and daily interactions. However, there are other ways to reinforce trust through the way you manage your business and the way to handle the areas that affect employees most directly.
One is payroll. To earn employee trust, Rodriguez says you have to pay on time and you have to pay correctly — no exceptions. When it comes to payroll, just one bad experience can tarnish employees’ trust in its leadership. Therefore, you also have to have accountability in payroll to make sure the systems are always working and employee concerns about payment are addressed immediately and effectively.
“Whenever somebody has their doubts on their monthly check or weekly check, whenever they have to sit down with a supervisor in order to review overtime, that it has been correctly paid or the number of hours they have worked or the health care benefits that they have and so on, … you have to have people that are capable of explaining those things to the employees,” Rodriguez says. “That has definitely been the reinforcement that we have done.”
In addition to monitoring efficiency in payroll, Rodriguez works continuously to find ways to improve employee benefits. If you want to keep your top talent from moving to competitors, giving them lower costs on insurance compared to other companies in the industry is often more valuable than giving them pay raises.
“It’s a matter of motivation through incentives, and not so much in salary but in benefits,” Rodriguez says. “That is what is going to improve fidelity of them remaining with us.”
Offering competitive benefits and paying employees on time shows them that your company invests in their success and hard work. Responding quickly to employee concerns in areas such as payroll is an important part of keeping a business efficient. Additionally, it’s how you show employees that they can trust leadership to fulfill their needs.
Rodriguez makes sure that that he and his direct reports have effective ways to respond quickly to any employee issue, whether it concerns a client relationship, a missing uniform or an error in payroll. In a company with 35,000 employees, mistakes will happen and problems will arise, but implementing the fastest response possible shows employees you support them and recognize their individual problems as the company’s problems.
“Trying to have a quick response to them is the key to have them happy with us and working with us and feeling the spark of a team,” Rodriguez says. “At the end of the day, the ones that are representing you as a company are your employees because they are in the houses of our clients. Obviously, if they are going to have problems, they are going to transmit those to our clients. The best recipe is to be aware of all the things going on with your employees. That is the main way of fixing the problems.”
Whether you are managing 35 people or 35,000, you can’t handle the situations and issues being faced by all your employees at any given moment. It’s not realistic. However, when there is an opportunity to help an employee deal with a problem, as CEO, being the first to step up and take control of the situation shows people who work for you that you are still personally driven to make your company successful.
“Whenever someone has trouble doing a spreadsheet or typing a letter or going to the airport and having to manage the baggage and the belt loader, I’m going to do it as the first one in the company,” Rodriguez says.
“Your team has to believe, has to have the impression, that you are the one who is the first one to pull up your pants and get into the mud and to help anyone with a contract. That’s what I have always been doing and I’m going to continue to do that.”
As a leader, demonstrating to employees that you are willing to put in the hard work to help them be successful also shows them that you don’t just see them as people you manage but as colleagues in your business.
“As long as you have the people really joining you and feeling themselves as part of a team, they are going to communicate that to other people and potential clients,” Rodriquez says.
Before growing an office in a new market, Rodriguez always begins by looking at the local community and seeing how to adapt Eulen’s culture in a way that drives business and keeps employees loyal.
“One of things we usually do is to learn first about the culture of a country,” Rodriguez says. “Sometimes multinational companies don’t have a set strategy to do that because they are so big. You have to embrace the diversity that comes with being a global company.”
By listening to the local people that make up your business’s employees and customers, you can understand the keys and the barriers to succeeding in an area long term.
“We are not magicians, but the best way to improve a service is to listen to the employees who are the ones who really know what the day-to-day problems are,” Rodriguez says. “Sometimes the multinational companies do not have the ability to do that. They are so big that they lose the focus of getting to the little problems and the day-to-day business, and at the end of the day, those are the ones who see death in the growth of a company.
“Being involved with the communities offers you an opportunity of how to solve those problems, where you can search for labor or how to deal with local issues that appear of how to solve problems that maybe somebody from the community knows better than you, that coming from outside they are going to tell you how to solve them.”
Every city and its people are different, and business leaders need to study those differences in order to find the best ways to motivate and lead employees in diverse areas. By learning the cultural features that distinguish a community, you have a better understanding of what matters to the people you hire and can then adapt employee recognition programs, operations, training and incentives accordingly to fit that.
“Incentives programs with employees work 100 percent, but the programs have to take into account the people who you are working with,” Rodriguez says. “When I was in the Dominican Republic, the incentive program was completely different from what we are doing now over here or what we used to do over in Chile or Colombia or Peru.”
Keep jobs secure
Having effective employee programs is just one part of keeping employees happy at a company long term. If you are a large company with offices all over the world, your employees need to have assurance that their jobs are secure and won’t be outsourced to nonlocal employees to save the company money later. That is why Eulen almost exclusively hires people who are local to the areas where it operates.
“We are trying to hire people and to transmit to them that, within this company, what they can be sure of is that there is going to be stability and permanence in the company — that they have a future project with us as long as we are over here to grow,” Rodriguez says.
“At the end of the day, this is a company (that) is going to be built with local people as we have been doing.”
While Eulen America started out only providing services for the aviation industry, under Rodriguez’s leadership, it has added janitorial, security, landscaping, maintenance and auxiliary divisions, as well. In the last two years, Eulen’s opportunities to get new contracts has continued to increase, opening up even more avenues for new business.
Taking into account the worldwide lack of stability in employment, it’s very important to communicate with employees about new opportunities and growth at your company. For one, seeing the growth potential of their company builds their confidence in the organization’s success, but you also want to show employees where there are opportunities to succeed as individuals and stay with the company throughout their careers.
“Whenever we hire people, we talk and we speak with them about our company and that we have a presence in over 11 countries together with Spain,” Rodriguez. “We can always have a plan for people to not only remain on the place where they are hired at the beginning, but they can relocate from one place to another whenever they improve their skills within our company, and then move to another place where we need them.”
By showing people your vision for their personal growth within a company, you give them more reason to stick around. As the company grows, Rodriguez makes sure to keeps all management and employees in the know about the company’s strategies for and plans in adding new services, clients, jobs or offices. In doing so, he continues to build loyalty among employees who want to be part of that vision.
“In all the places that we work, you can go and you can feel that the people are proud of wearing a uniform from Eulen,” Rodriguez says.
“You just try to get people who are really going to feel like part of the team so that they have faith on the projects and are willing to remain in the company a long time.”
How to reach: Eulen America, (305) 269-2714 or www.eulenamerica.us
The Rodriguez File
Born: Madrid, Spain
Education: I went to an English school in Madrid 1974-1987: Kensington School.
I went to University in Madrid — Universidad Politecnica de Madrid and studied engineering.
What was your first job?
My first formal employment was as technical engineering for solar systems designing. Prior to that, I worked as tutor for math, physics, and even during summer times, I worked in Madrid unloading trucks.
What are the keys to successful leadership?
Transparency. Honesty with your employees and on a day-to-day basis to communicate as much as you can.
In this hyper-competitive economy, everything is about speed. How quickly can you get a new product out the door? How fast can you deliver a service to a client? How long until that report is done? No one needs anything now; they needed it 30 minutes ago.
The result is an environment that demands ultra efficiency at every level. Companies of every size have been turned into machines, with senior managers tasked with fine-tuning them to the specifications set by the CEOs. If a particular part of the machine is slowing it down, that part needs to be changed out for a better, more efficient one. The moral dilemma comes when you start looking at the parts — they are people, not pieces of metal. Too many CEOs are looking at people as a means to an end, rather than human beings.
It’s a danger of our capitalist society that some leaders look at just the numbers, forgetting that there are many names and faces behind each line on the budget. You can be torn between building a cash reserve or achieving maximum profitability to please investors and being fair to the people who may not be performing up to the standards you would like to see. The question is, what do you do about it?
The easiest solution is to simply get rid of the people who you think are holding you back. This was Jack Welch’s philosophy — chuck the bottom 10 percent each year and your machine will continue to get better. There’s no room in business for having a soft spot for underachievers and there is no time to bother with them, so out they go.
While this model may be best for the short-term finances, is it really the best way to go? How many of those people had potential, but didn’t understand what they were supposed to be doing? How many of them simply needed clear goals they could strive for? And was productivity hurt as people in the middle continually fretted about where they ranked within the organization? Also, at some point, your organization would be as efficient as it could be, meaning those in the bottom 10 percent might be pretty good employees — and you might be hard-pressed to do better when you go to replace them.
The tougher solution, at least from a straight business perspective because of the cost in time and money, is to invest in the people who aren’t allowing you to reach peak efficiency. This could range from making sure they understand their goals and the company objectives to investing in training and development so they have the right skill set to do their job in the best way.
If given the time and the opportunity to improve, many of the people on the low end of the performance scale will improve, and a select few will even blossom into full-blown superstars.
The new economy isn’t just a rat race; it’s a digital rat race with speeds increasing exponentially each year. You may want to invest in people, but your competitive environment may simply not allow you the time to do so.
Each business is unique, and there are pros and cons to both strategies. But what’s most important is that, regardless of which direction you choose, you never lose sight of the fact that there are people behind the numbers, and people are what matter most.
All individuals have strengths and skills that they have honed to perfection through a multitude of experiences. But we may think less often about how to effectively use our organization’s strategic strengths. Sure, we may have a list of our tactical strengths from a SWOT analysis. But we may not have taken the next step of seeing how those tactical strengths build strategic value.
We believe there are four organizational strengths that need to be in sync in order for you to build value. One of the following usually emerges as your primary organizational strength: vision, culture, customer focus or process.
Organizations with vision as their strength are those that “see around corners.” They create the next new thing. Apple is an example of a company that shapes the future. For example, the leadership at Apple created a music environment for consumers that few of us would have imagined. Does your organization have the resources and talent to recognize trends and consumer wants or needs that have yet to be uncovered? If so, this might be your primary organizational strength.
Some organizations nurture a culture as their primary strength. Many of these companies are found on Fortune’s Best Companies to Work For list. What do they have in common? They have a core belief that culture is the “secret sauce” necessary to create great customer interactions. They know what’s important to their employees and screen them well before they join the company to ensure they fit. Are your customers drawn to your company because of your people? If so, culture may be your top strength.
Nordstrom creates an environment in which knowledge of the customer is its primary organizational strength. It creates systems that allow employees to know their customers better than their competitors. Nordstrom also encourages its employees to adapt to the needs of their customers rather than having customers adapt to rigid company processes. Do you know your customers so well that you can anticipate their needs? If your customers believe this, this could be your strength. If you don’t ever survey your customers, this probably isn’t your organizational strength.
Finally, some organizations excel at maximizing processes. Are you like UPS, which not only excels at creating efficiencies for itself but consults to help other organizations do the same? Are you adept at continuously implementing efficiencies? If so, process may be your primary organizational strength.
Of course, every organization has to perform well in each of these areas. The organizations we lead have to think about the future, build a workplace that people want to engage with fully, maximize efficiencies and understand customer needs. At the same time, we know that we can’t be the best at each of them. One of those strengths will rise to the top based on our investment of time, money and effort. Even Michael Jordan couldn’t be the best at everything.
How does knowing your primary organizational strength help? It’s part of your guide for investing your time, money and talent. When faced with tough choices, you will know that, in order to keep your edge, you need to invest in your primary organizational strength. When tempted to cut back, just ask yourself if you would want Apple to reduce resources spent in product development or Nordstrom to cut back on training employees in the best way to meet customer needs.
Do you know your primary organizational strength? Are you investing the time, talent and money to “sharpen your saw” and continue to excel in that strength?
Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO’s Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity by discovering and using the unique strengths of the organization and its people. Kanefield can be reached at (314) 863-4400 or firstname.lastname@example.org.
Mit Shah was enjoying the fruits of his labor.
As Shah, founder, senior managing principal and CEO of Noble Investment Group, a company that invests in and manages hotels, he had successfully gotten the business past the struggles that followed the Sept. 11 attacks when travel and tourism dollars fell. Everything was back on track, and the company had been growing, earning spots on the Inc. 5,000 list through the years, and in 2008, it recorded $325 million in revenue.
But things have slowed from the pace Shah and his team are used to.
“We’ve built this model over 17 years — great people, great human characteristics — but clearly the last two and a half years have created a real pause of how we approach our business,” Shah says.
One of his challenges is having extremely talented people, which most wouldn’t think is a problem, but in tough times, it proves to be.
“How do you keep a group of highly successful, highly talented, highly motivated, passionate leaders engaged and focused on the ability to manage what we have when you’re an organization that’s truly built for continuous investment and continuous growth, and that’s how you’re structured?” Shah says.
He’s also been challenged by looking for opportunities to grow the business and figuring out how the market will shake out.
“That has been a big part of my responsibility to continue to surround myself with people who internally and externally will give me good insight as it relates to how do we see opportunities going forward,” he says.
And then it’s been just hunkering down on the business basics.
“Continue to do what the books say you’re supposed to do — stick to your core values during times of great opportunity and during times of crisis, take care of people, make sure that you continue to commit to things that are part of who you are and who you espouse to be,” Shah says.
Over the past three years, by building a solid group of peers to rely on, focusing on his people and looking for opportunities, Shah was able to successfully move Noble forward — earning $346 million in revenue in 2009 — and prepare it for future growth.
Build your peer group
One of the aspects of business that Shah says has been particularly critical the past few years has been forecasting out where the market would go and how things could change, but he can’t do this alone. He’s come to rely on a core group of people that he’s built over the years to help him better make decisions about his company.
For example, he may have dinner with the CEO of Hilton Hotels one day and the president of Wake Forest University on another, and they both play a critical role in his life.
“I always stayed very close to a group of people that I viewed could help me on a broader basis,” Shah says. “It goes back to this peer group — never being the smartest person in the room, always having the smartest room, and always finding people who I could befriend and I could build a relationship with and build a partnership with, who, in essence, I could learn from and build a base of knowledge that I wouldn’t get in just running my company.”
Having a group of people to get feedback and ideas from has also helped him bring in the best people when those openings arise. To build his group, he got out on the road and met with people continuously, and this went back as far as 18 years ago. Over the years, his group has also evolved and today includes top executives of the world’s major hotel chains, basketball coaches, people in service businesses and manufacturing as well as investment bankers.
“That’s really helped me think about things, both then and now, in a way that helps me lead more effectively,” he says. “I have the power of and the benefit of a broad range of thinking, and then I can take those thoughts, and I can incorporate them into my own and lead through that manner.”
To create a group for yourself, Shah suggests getting out more to build those relationships with people.
“Go to meetings, go to conferences, find out the best industry events,” he says. “Walk around, shake people’s hands, get to know people, and take every opportunity that you have to understand those in whatever business and industry are at the tip of being visionary, of being organizations that have had sustainable track records, that are respected among a group of people that you respect, and find opportunities to establish relationships.”
Sometimes that means you have to make the tougher decision in the here and now. You may want to go do something fun, but instead, you need to choose to do what will be most beneficial in the long term.
“There’s been times all across my entire career where it’s an opportunity to either go have a dinner or to be in the same room or to go to a meeting or a conference, and you have no idea what you’re going to get out of it,” Shah says. “But spend those times as opposed to saying, ‘Let’s go find the best place to watch the game tonight,’ and really go and find an opportunity to establish a friendship.”
When you meet people and get to know them, it’s important to remember that they’re people just like you, so use that as a base to build that friendship.
“It doesn’t matter if someone is the CEO of a big Fortune 100 company or if they’re just your golfing buddy,” he says. “At the end of the day, when you peel back everything, people are just, if you find good human beings, decent people. They’d much rather go have a barbecue sandwich than have something fancy. They’d much rather have a beer together and talk about your families than always be talking about how you’re going to win market share here and how you’re going to do that. That all comes, but break it down to just finding quality human beings and building friendships with them.”
Focus on your people
During the downturn, Shah didn’t cut his 401(k) match, community service programs or the company Christmas party. Instead, he doubled the budget for his employee engagement committee so it could plan things like bowling outings and have a really nice holiday party.
“Let’s be honest, this is a tough labor market,” he says. “People aren’t jumping jobs right now, so we get that. You can’t use that as a crutch, because as soon as the market comes back, they’ll leave for a better opportunity once available.”
Despite the challenging times, it’s crucial to make sure you continue to focus on your people and how you can support them. Look at the people that aren’t your senior managers — just your everyday, salaried employees — and reflect on what their intentions are.
“Do they have the character and confidence, and then do they care about the company’s best interest?” Shah asks. “If they do, then making that decision is very easy.”
If you have employees that would leave to go across the street for 5 percent more, then Shah understands not wanting to put the resources out to support them, but at the same time, he also questions why that is.
“What does that mean?” he says. “That means that if you haven’t brought in that person who has that character and if you haven’t done the things to promote that loyalty, whose fault is it? Is it the team member’s fault or the employer’s fault that they’re not loyal?”
When you face yourself with this kind of a situation, that’s when it becomes difficult to decide whether to put money toward your people or to keep it for the company.
“If employers are in that situation, then it’s hard for them to part with their dollars because — they’ll never admit it and they’ll never sit in front of a town hall and say, ‘All of you employees are commodities,’ — they would never say that, and if they feel that, they’ll make a decision and say, ‘We’ll just hoard the cash,’” Shah says. “But if you really believe in your team members, and if you really believe they have the organization’s best interest and they’re going to be there for the long haul, then you take care of them. You always take care of them.”
In fact, as 2009 came to an end, Shah was anticipating a surplus in the budget and predicted that they would be creating a supplementary bonus program with it in addition to putting some of that back into the company as a buffer for this year.
“You always go to the denominator of what’s the right thing to do,” he says.
The economy has changed business the past few years, so you can’t just rest on your laurels and expect clients to come your way.
“You’ve got to look through a number of different avenues,” Shah says. “It’s far different than it ever was. Generating business in general is different than what it was before — in any industry.”
Over the past couple of years, Shah has been diligent about looking for new opportunities, and that starts with knowing your market.
“It’s really about having a very good understanding of your marketplace so you don’t have to be a big national organization or global organization,” he says. “We could be just the best hotel group in Atlanta, but we need to know Atlanta like the back of our hand.”
Knowing your market also goes back to your peer group and having people you can talk to about how the market is going so you can better predict how things may shift. On top of that, it’s important to have a niche.
“You have to find a niche in the business,” Shah says. “I think that companies of the future that are going to be very successful will have a niche. They aren’t broad-based companies that do a lot of things. They’ll find a couple things they do really well, and they focus on those things, and they outperform the competition there. It’s way too difficult to be good at many different things.”
For example, Shah knows that his company is good at hotels, but he also recognizes that it isn’t cut out to go into, say, grocery stores or office buildings.
“You can’t just, all of a sudden, wake up one day and say, ‘I think we’re going to be grocery-anchored retail,’” he says. “There’s some smart leaders in our organization, but we don’t know anything about grocery-anchored retail, and I can’t just go hire someone who knows about grocery-anchored retail and pretend we can be a great company overnight.”
Instead, you have to look at what your company already does and what expertise you already have within the organization.
“You have to say, ‘What are you built to go do that’s as good as or better than the best people that do it in your business?’” Shah says. “Based on that, how do you build that if you have not already? If you think you have it already, how do you go and execute around that area?”
If you see that the opportunities aren’t in that area and you do think you have to explore a different area, you need to do it in a smart way.
“If we don’t know how to do something, we always go get the talent first and go and build a model around it, and then start with one and continue to grow,” he says. “That’s what we’ve historically always done.”
The key is you have to be able to live with whatever consequences come as a result of the direction you head.
“Understand what your downside is,” Shah says. “Know what you can live with. It’s hard. How do you be visionary, be aggressive, be strategic and also manage risks without just being completely paralyzed by it?”
How to reach: Noble Investment Group, (404) 262-9660 or www.nobleinvestment.com
The Shah file
Founder, Senior Managing Principal and CEO
Noble Investment Group
Born: Morristown, N.J.
Education: Bachelor’s degree, economics, Wake Forest University
As a kid, what did you want to be when you grew up?
I wanted to be a basketball coach. If I can’t be a coach, I want to be an announcer.
I’m first generation American. My parents are both immigrants. I’m the eldest child of immigrants. They think about education and stability, and you’re like, ‘Hey! I’m going to be a basketball coach or announcer.’ They’re like, ‘What are you talking about? You’re going to be a doctor.’ I was like, ‘All right, I guess I’m going to be a doctor,’ — until I got to college and took bio and chem and physics and hated all three with a passion.
Did you get the chance to coach at all?
I used to coach kids basketball when I was in college. One of the first things that really helped me think about what I wanted to do with my life was when a friend of mine was going to be the head coach, and he asked me to be the assistant, and he transferred schools, so I ended up becoming the head coach before the first game, and it was the most thrilling thing to me.
I was coaching these 11- and 12-year-old kids, but these kids were just wide open. They listened, they cared, they were good enough where you could teach them things. I was like, ‘This is really great.’ They’re 12, so they’re going to listen to you, and they don’t care that you’re 18 — they’re 11, so they look at you as a leader. I was like, ‘Wow. This is the first time anyone’s listened to me.’ It got me really excited about the opportunity to lead and the opportunity to be somewhere where I could teach and help people maximize their potential.
What’s the best book you’ve read?
I’ve got a number — Jim Collins’ ‘Good to Great.’ It’s kind of a pat answer. It was the first book I ever read that gave real tangible evidence of what companies did over time to help them not only survive but thrive through multiple periods of economic volatility. It helped me think about my business in ways I never had thought about it before.
If you’re looking for something less business-oriented, ‘The Last Lecture’ by Randy Pausch was a great book because it really touched on things that, to me as a human being, we should always think about.