When Jon Irwin listens to music, he uses his Android smartphone to crank out the tunes. As president of Rhapsody International Inc., Irwin wants his customers to be able to listen to any song, at any time, on any device.

“You should never be without your music,” Irwin says.

That’s the motto with which Irwin leads Rhapsody. To provide that level of music access, he is implementing a two-pronged growth strategy that focuses on direct-consumer marketing and alignment with distribution partners to put Rhapsody’s services in front of more customers and increase its service capabilities.

Rhapsody, a 200-employee music subscription service company, has been in business for more than 10 years. Until 2010, it was a joint venture between Viacom, under MTV Networks, and RealNetworks before being spun out on its own.

“That was kind of a great combination, because we were able to leverage the technology within RealNetworks and the marketing prowess of Viacom and MTV Networks to promote the Rhapsody brand to support the business,” Irwin says. “In 2010, we separated as an independent company, and … since that time, we have more than doubled our customer base. We announced last December that we had gone over 1 million subscribers.”

Those 1 million-plus subscribers pay $10 a month for the company’s primary product, which provides access to more than 16 million songs and spins up Rhapsody’s annual revenue north of $120 million.

To keep subscribers happy and gain new ones through the growth of the business and its capabilities, Irwin has already lined up a few key partnerships. Recent acquisitions include Napster’s U.S., German and U.K. businesses.

“What you see in doing that since the spinout is an entrepreneurial company with great resources, that’s operating in this business at scale and has been able to innovate — not only on mobile products but on distribution models through companies like Metro PCS and Verizon Wireless and is expanding internationally by acquisition with Napster,” he says.

Here’s how Irwin is speeding up the tempo at Rhapsody through a dual-pronged growth strategy.

Support your strategy

Rhapsody was the first on-demand music subscription provider. It saw a market with an opportunity and it capitalized on it.

“Most recently, if you look at the trends within this space and what the business has done, we were so far out in front of this business, nobody else even entered it until the second half of the last decade,” Irwin says. “The business really started to grow beginning in 2009, driven by some of the capabilities of smartphones, mobile devices and network capabilities that really enabled music to be truly portable and make it a fantastic user experience for people to take music with them.”

To expand on the capabilities of smartphones and mobile platforms, Rhapsody has partnered with companies in the wireless arena.

“Last August, we launched a partnership with Metro PCS, which actually took the access model of music to a bundled concept,” he says. “Metro PCS is the largest noncontract wireless carrier in the United States, so customers get unlimited music included with their wireless plan. That’s a very exciting way for us to bring our service to folks.”

Rhapsody also saw an opportunity to buy the Napster business from Best Buy as a way to reach more customers. Best Buy had acquired Napster in 2008 and thought it was a natural fit for the music and connected devices sold in the store and subscription music play.

“What had happened over that period of time was there were challenges in the retail space and Best Buy was working on aligning its strategy,” Irwin says.

Best Buy was soon unable to give Napster the attention it needed. Napster’s product innovation and growth began to suffer because of it.

“We approached Best Buy a little over a year ago and started discussing whether it makes sense for Best Buy to alter its strategy a little bit and not walk away from it, but maintain a stake in the digital music business and be an equity stake in Rhapsody and we would take over those customers and operate the business both in the U.S. and overseas,” Irwin says.

“They decided that made a lot of sense, because it allowed them to focus on their core business. At the same time, they were able to stay in the game with the digital music and subscription music business that’s consistent with a lot of the products they sell.”

Rhapsody acquired Napster last November in the United States, and at the end of March 2012, it also closed on the acquisition of the Napster business in Germany and the United Kingdom.

“That gave us our first international presence, which is an indicator and foreshadowing of future expansion we plan to do over in Europe,” he says. “We not only acquired a great customer base to be No. 1 in the market in Germany, but we have a very capable and seasoned team to continue to build the business, not only in Germany and the U.K. but in the rest of Europe. That was an exciting time for us to support that aspect of the strategy.”

Irwin and Rhapsody plan to keep looking for the opportunities that align with the company’s strategy.

“We are bringing the Rhapsody service to consumers directly and are continuing to innovate on the mobile products and work with distribution partners, both in the United States and internationally,” he says.

“This is to include music in their core offerings and work in partnership with those distribution partners, whether those are cable companies or wireless carriers, to make sure the way the service is being delivered to their subscribers is good for everybody involved. I don’t think there is anybody in the business better than us at doing that.”

Grow through acquisition

The acquisition of Napster played right into Irwin’s growth strategy. Napster helped Rhapsody reach more music listeners and the connection to Best Buy allowed Rhapsody to expand the kinds of devices customers could use to listen to music.

“If you go into a Best Buy store, a lot of the electronics they sell have Rhapsody integrations built-in,” Irwin says. “Overall, getting us in front of those customers is consistent with our mission and our goal of having all the music you want within arm’s reach.”

While Rhapsody acquired Napster less than a year ago, it has been a key factor to the company’s recent success because it was such a good fit. Growth through acquisition is successful if that acquisition supports your objectives and strategy.

“For us, scale and being able to acquire those subscribers and bringing them over to the service was a natural fit,” he says. “In the subscription business, scale is important because the more subscribers we have, we’re leveraging the platform that we built. That consistency with business objectives is No. 1.”

Once you have acquired a business, the No. 2 most important thing to keep in mind is the relentless planning and caring you need to do about how you treat the customers of the acquired company.

“You want to welcome them in a way that isn’t disruptive and, in fact, actually delights them and makes them happy they are over in this new house,” Irwin says.

Rhapsody did specific things in the planning and the migration processes so that what was important to those customers was already in place when they transitioned to Rhapsody’s services.

“They may have created playlists on Napster of their favorite songs,” he says. “They certainly had their own user names and passwords that they had created. They had libraries filled with their favorite artists. Their music collection is very important to them.

“So we made sure that as soon as they signed on and they were moved over to the Rhapsody service, all of those familiar characteristics of their music collection were there. Their playlists were there. You were able to continue to recommend music to them based on their listening history. They didn’t have to go create new accounts. We just made it very smooth for them.”

Attention to those migrating customers is crucial, but so too is a focus on the talent from the acquired company that may be beneficial to your growing business.

“No. 3 is there are a lot of very talented people that you can find in companies that are dealing in the technology space,” he says. “How do you combine the two companies, bring them together, merge them and make sure the talent that you emerge with from the acquisition is even greater than you had when you entered it?

“There were some very good business-minded individuals and people with strong technical skill sets that are happy and productive employees that help to carry that across. You have to tap the talents of the potential acquired company.”

Through the leadership of Irwin and the continued execution of the company’s dual-pronged growth strategy, Rhapsody is positioned well to continue to be a strong player in the subscription music space.

“The trajectory that we’re on now over the past 2½ years is pretty exciting,” Irwin says. “We’re a small start-up company coming back into a very exciting industry with tremendous resources, a customer base that has scaled, technology that has matured, and a brand that MTV Networks helped build. So we’re really set up to run forward and have fun.” <<

How to reach: Rhapsody International Inc., (206) 707-8100 or www.rhapsody.com

Published in National

Krish Ramakrishnan isn’t a clairvoyant. He can’t actually predict the future. Yet as a serial entrepreneur, Ramakrishnan repeatedly succeeds at a feat that eludes some of the largest and well-funded businesses in the world: coming up with business ideas that transform industries.

Ramakrishnan’s most recent company, for example, provides a service that makes videoconferencing interoperable for businesses. So if you’re a Skype user, you can call somebody on Google or Cisco, and so on.

“It’s all about universal connectivity,” says Ramakrishnan, co-founder and CEO of Blue Jeans Network Inc. “If you have an iPhone and you’re only able to call other people on the iPhone, that’s not much use. And that’s what the state of videoconferencing was prior to Blue Jeans.

“All these business models said they wanted people to be attracted to their island without ever having the opportunity to be voted off the island. We made everybody get off the island.”

Seeing islands where others see market share is one of the ways Ramakrishnan creates such in-demand businesses. His previous start-up, Topspin Communications, was acquired by Cisco for $250 million in 2005. Cisco also acquired his first company, Internet Junction.

With nearly $50 million in venture funding, 100 employees and an impressive customer list —including Facebook, Groupon and Foursquare — Blue Jeans is now also on the fast track for growth.

But if Ramakrishnan isn’t a psychic, how has he been right so many times? The answer is, by looking at the obvious. One of chief reasons Blue Jeans is successful is the fact that the concept is actually, quite simple — so simple actually, that when it came out, many companies couldn’t believe there wasn’t already a business like it in the marketplace. So the question then becomes, ‘Why didn’t anyone else see it? And if they didn’t, why did he?’

Smart Business spoke with Ramakrishnan about how he identifies and pursues innovative business opportunities and why you don’t need to be an industry leader to transform an industry.

Q: How did you identify the market opportunity for Blue Jeans?

KR: I always look for trend lines in technology rather than headlines in technology. The headlines in technology are cloud computing, all of those things. But if you start a company based on the headlines, you’re shooting behind because everything is already designed. What you want to do is look at where all of these technology trends are going, and at the conversion of a couple of these trends, there might be an opportunity, a pain point, two or three years down the road that you need to solve for a customer.

Three years ago, video was in the headlines all the time because HDTV had come in. So I looked at one trend line as video was getting huge adoption. The second trend line I looked at was homes are getting broadband adoption, and in a big way. And independent of this, I was looking at demographics. There were lots of young people coming into the workforce.

So when you think about these things and say: If these trend lines intersect — they are not currently connected in any way — you’ve got the young workforce, broadband adoption and high-definition TV. If they intersect, what kinds of things could you design in the marketplace that could take advantage of these trend lines?

And I said, ‘Younger people are used to being on video. They probably want to use videoconferencing. If there’s more broadband available, they can do video from their home. And they want to be able to experience HD.’

Q: So you tapped into the idea of videoconferencing. But how did you approach it differently than companies already in the market?

KR: Videoconferencing is not used well in the workforce today, even though it’s been around. It’s very hard to use. And I said, ‘How can we make it pervasive?’ That was the question based on the trend lines. But that in and of itself doesn’t give you an opportunity. That just gives you a target to shoot at.

Then you have to figure out OK, videoconferencing. What are we going to do that’s something unique? When we looked at why everybody isn’t using videoconferencing, we found out people aren’t using it because it lacked ease of use, it lacked interoperability, and it was expensive. We said, ‘If we can solve these three things, we would have a big hit in our hands.’ And therein lies the hard work. … You can’t really solve one, because it may not be a big deal. It may be a ‘me too’ product. You need to solve all three issues to transform the industry.

Q: Once you solved those problems, how did you know your service would resonate with the marketplace?

KR: You need to get your potential customers to give you some help. It also helps — and this is true of Blue Jeans — to think like an outsider. The reason we’re successful, and this is something unique, is that we have no experience in videoconferencing.

In fact, that is the hallmark of our success. Intentionally, we did not hire anybody from the videoconferencing space at first. The first 10 employees were not from that space because we wanted to bring an outsider’s perspective.

What actually surprised us was the number one question that people asked us is, ‘What took you so long?’ And the flip side of the question was, ‘What you guys are doing is so obvious; why hasn’t anybody else done this?’ This directly relates to another one of our favorite axioms we use in our company. Einstein said you cannot solve problems with the same thinking that created it. The videoconferencing industry always saw the problem one way. That thinking is not going to help them break out of it.

So lesson No. 2 for me — and this is a piece of advice I give everybody — is don’t be afraid to go into new industries where you don’t have the actual expertise in the industry. If you have the drive and knowledge, you can get the expertise at the relevant time. But as an outsider, you actually bring a lot to the table to solving an industry’s problem.

Q: What are the keys to succeeding as an industry outsider?

KR: You need to understand from a business perspective what some of the pitfalls are in that industry. For instance, in the videoconferencing space, most of the buying was done by IT departments. Most of the scheduling and the conferencing were done by IT departments. So you need to understand how the dynamic of that particular industry works in order to design something that can be used by everybody. You need to talk to enough people, and of course, talk to industry incumbents and get their thoughts — not necessarily their advice. When you talk to them, they’re going to validate your thought process.

Q: How has your previous business experience helped you to grow Blue Jeans?

KR: When you start a company, you are a nobody, and you have to evolve into a somebody by building credibility. So the first rule of thumb is in order to build that larger-than-life image of yourself, of your company; you have to associate with successful people that are backing you.

This could be your advisory board. It could be other entrepreneurs that have been successful — so that when people come to your website and say, ‘Oh, Blue Jeans. Who is that?’ they look at the people who are backing you and the advisers who are advising you. Then they get that perception that this company must be doing something very interesting. … That goes a long way in building an image of the company.

The second half that’s always helped me is the fact that you only know about half of the problem. You don’t know exactly whether once you finish this product whether it’s going to take off in the market.

You need to have a very flexible attitude, even in the implementation in terms of the technology and architecture, so that you can change as you develop the product. You should be willing to change based on your business plan, your product idea, the final product and how you go to market.

The third thing is to be able to make decisions with imperfect data. If you wait for all the data to make a decision, your decision will be stale, and it will be too late. You need to be comfortable making decisions with imperfect data, and then have the flexibility to modify once you go.

Q: How did you build flexibility into the Blue Jeans model?

KR: The entire Blue Jeans business model was built on the idea that we build this product, we put it on the Web, and people buy it based on credit card transactions. If you like Blue Jeans’ service, you get your credit out and you buy Blue Jeans. Lo and behold, we found out that with videoconferencing, at the end of the day, customers liked the service, but they didn’t want to spend $5,000 on a credit card.

So we had to modify and hire sales teams — which was not in the business plan — to actually go and do that, and move us away from online transactions. That’s a huge change in the business plan, but we were willing to make that decision right then and there and say, ‘We have to do it,’ rather than say, ‘This is our plan; we ought to try it.’

Remember there is a fine line between perseverance and stupidity, and you only know after the fact. You can keep trying the same thing, and if you break through, people say you are a genius. But if you keep doing the same thing and you can’t break though the wall, people say, ‘That guy is a moron.’

Q: The name ‘Blue Jeans’ is rather ambiguous. What made you choose it?

KR: People who do not think differently will always say, ‘Why did you call it Blue Jeans? It has nothing do with videoconferencing.’ But customers actually love the name. And one of the traits is once you hear the name Blue Jeans, you do not forget it. It also differentiates us from all of the videoconferencing players, because everybody starts with a V — video this, video that.

When you pick a company name, it doesn’t have to be closely tied to the technology that you’re solving today because as the company grows, you may have to pivot. You may have to go into a new market and so on. So you want a name that can be yours forever, rather than having to change it. … You want to come up with a name that can accommodate all future directions of your company. <<

How to reach: Blue Jeans Network Inc., (800) 403-9256 or www.bluejeans.com

The Ramakrishnan File

Krish Ramakrishnan

Co-founder and CEO

Blue Jeans Network

Born: Myanmar

Education: Monmouth University — M.S., Computer Science

Why consensus decision-making can work, with the right team: Once you have your team, decision-making becomes easy. My style as much as possible is to have a consensus. Try to have consensus-oriented management team, where everybody has an opinion and then we sort of come to a consensus on a particular decision that we make. But one of the things I also encourage in the company is dissent. You need to have dissent in the company. People who disagree need to feel comfortable disagreeing with their management team, with their CEO publicly, and not be chastised for it. If a company is full of people who just follow your word all the time, that’s not going to be successful company. You need people who are confident voicing their opinion. And you as a leader need to encourage that . . . That fosters a great company.

On winning over investors as an industry outsider: For the investors, it’s always going to be a challenge because they’re thinking, ‘You don’t have any experience in this industry. Why should I believe in you?’ If you have a track record of building successful business, that goes a long way. So they can see patterns of what you’ve done and they can believe in that. But beyond that, when you present a compelling business plan — this is the problem of the industry and this is how I’m going to solve it — for an average person, it should make sense. If it doesn’t make sense, you’re not on the right path. If it does make sense, the investors get excited because they see an opportunity; and more importantly, there is an emotional connection because you’re coming in as an underdog, an outsider to the industry. Everybody wants to help an underdog win.

 

 

 

 

Published in Northern California
Friday, 30 November 2012 19:22

Jerry McLaughlin: The firing squad

Life is not only lonelier at the top, it’s shorter. After a recent study of CEO succession events in the S&P 500, The Conference Board has identified this general trend: CEOs have been getting fired faster. Why?

The Conference Board thinks it has something to do with shareholders becoming more aggressive in making changes at the top. That may be. But if so, then why are boards of directors — and the shareholders they represent — increasingly dissatisfied with CEO performance?

In one sense, the job of the CEO is the same as ever: to deliver a good result for shareholders. But excelling in that job today is much harder, particularly because the world has changed.

They say old dogs can’t learn new tricks. But not long ago, successful CEOs didn’t need to. The right person to have in the top job was the one who “knows the way we do things here” and wouldn’t try to fix what wasn’t broken.

As a result, the refrain, “That’s the way we’ve always done it,” wasn’t so much unimaginative as it was prudent. The prevailing mentality was it’s hard to grow a big business. So if you’ve found a way that works, count yourself lucky — and stick to it. Don’t try to reinvent the wheel — or the Coca-Cola.

Get a picture of the path ahead

But globalization, the rise of the Internet and the increasing rate of technological discovery have changed the very nature of being a CEO. Just because you’re in the right business, the right way, today, doesn’t mean you will be tomorrow.

Imagine it’s the year 2000, and you are CEO of a large call center serving the pharmaceutical industry. Your three tasks are to keep quality up, customers happy and land new accounts — until a company in Mumbai starts drastically undercutting your prices. Perhaps for the first time, you must find entirely new ways to think about the business.

That takes time, if a solution can be found at all. So you’re working to formulate a promising response — when you’re fired.

Now imagine you’re the CEO of a video rental company in 2000. Even if it’s a big business, the business is conceptually simple: Your job is to sell more video rentals and to increase the profit on each one.

How? Mostly by opening new stores and by making sure you have many copies of the most in-demand movies on the shelf every Friday night. Plus, you collect late charges. You are really good at those things. You even smoothly make the shift from videos to DVDs. But then someone in California comes up with a novel equation: DVDs + U.S. mail + subscription - stores = Netflix. A seemingly short time passes. You’re fired.

Take time to stop at talents

Corporate America has changed. In the past, a well-regarded CEO was one who could optimize the business model that he or she had. Today, CEOs must not only do that, they need to be skilled in redeploying resources into better businesses. Leaders who excel in running the core business must also be equipped to evaluate nascent opportunities beyond it. And frankly, most of them can’t.

Why not? For the same reason pitchers rarely hit well, and hitters can’t pitch. In baseball, you draft a player for his strengths, knowing he won’t do everything well. That’s why every big league manager knows better than to send the slugger to the mound or bat his closer at clean up.

Is it possible that your big hitter is also the unhittable pitcher? Well, maybe in your dreams.

You may find the CEO who can run the current business better than most or the one who starts and nurtures tomorrow’s winners today. But how many CEOs of large companies can do both very well? All of them could sit together in your living room, comfortably.

Boards that expect old dogs to learn new tricks — while continuing to perform the old ones — simply haven’t come to terms with the new realities of competition. CEOs hired to do both are well advised to cover their bases, and negotiate a severance package up front.

Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. Reach him at JerryMcLaughlin@branders.com.

 

Published in Northern California

A strategic plan outlines the steps to achieve a desired future, and the process of creating that plan can provide an invaluable opportunity for the exchange of ideas and consensus among your management team and your staff. Defining your shared vision and then planning based on that desired outcome is the essence of strategic planning. With that in mind, allow me to share with you eight gaffes that should be avoided while outlining your strategic plan.

The time frame of the plan is too long.

First, strategic plans need to remain laser-focused on accomplishing strategic priorities in a timely manner. The plans also need to be frequently refreshed to keep them from becoming stale and to keep the organization energized on plan execution.

Long-term planning certainly has its place in a corporate world, but shorter operational plan horizons, going only 12 months out, allow organizations to utilize valuable current information and remain engaged in delivering the plan milestones.

Too many strategic goals.

We all fall victim to this mistake. Organizations often have a laundry list of goals. Dreaming up goals is never an issue. Instead, the issue is having the discipline to narrow down prioritized goals to a manageable and achievable level.

Five goals is a good number to consider as a maximum. When you factor in each goal that will lead to a sequence of programs, initiatives, activities and deliverables to be managed and implemented throughout the organization, it’s easy to see how a long list of goals can inhibit implementation success.

Goals are not tied to measurable outcomes.

Organizational goals should be constructed in terms of outcomes. They should be defined in such a way that they can be measured and managed throughout the layers of the organization to propel action and achievement from those involved.

Employees are unaware of the goals.

Believe it or not, this can be a huge problem in many organizations. When the corporate planning process fails to consider the individuals who will actually implement the plan, breakdowns happen and desired outcomes are rarely attained.

Key vendors and partners not considered.

By communicating organizational goals to key vendors and partners, much needed buy-in and assistance can be gained from these external parties to achieve desired outcomes. Think about it. Are they not critical to your long-term success?

Organizational culture is overlooked.

The corporate planning process must consider the organizational culture. Without this, it is impossible to fulfill the organization’s potential to dominate within their marketplace. Culture determines how the organization functions and how work will be completed.

Operational planning is overlooked.

An effective corporate planning process allows the organization to plan strategically at the enterprise level and then operationally at the business unit level with each part supporting the other.

Failing to reach all the way down through the organizational layers is a common problem with corporate planning processes. Strategic planning, to be effective, must address the entire business ecosystem — from top to bottom.

Customer value is overlooked.

At the end of the day, it is all about the customer. Customer-centric planning puts your No. 1 stakeholder — the end customer — at the forefront of the organization’s activities and goals.

By creating goals that reflect the type of value the organization can create for the customer, you’ll put a face to the name and more effectively connect members of the organization with the desired outcomes.

We have entered into a forever changed business climate. Put another way, the new normal is here and here to stay. Despite all the distractions we encounter every day, we must never lose sight of the fact that we must spend more time on the business rather than in the business, and it all starts with a strategic plan.

G. A. Taylor Fernley is president and CEO of Fernley & Fernley, an association management company providing professional management services to non-profit organizations since 1886. He can be reached at tfernley@fernley.com, or for more information, visit www.fernley.com.

Published in Philadelphia

There was a little disappointment at first.

After 37 years operating as Bayada Nurses, company founder and President Mark Baiada stood before members of his nursing staff and relayed the news: The word “nurses” was to be eliminated from the company’s name. As of January 2012, the company would operate as Bayada Home Health Care Inc.

It wasn’t a decision taken lightly by Baiada or his management team. But it was a decision they felt compelled to make.

“My wife is a nurse, we’ve been a nursing company throughout, so to drop ‘nurses’ when it had been in there for so long, I think there was a little disappointment,” Baiada says. “We still have nurses, but it’s not part of our official name now.”

Baiada and his team made the change as part of a wider rebranding initiative, recognizing that the scope of in-home health care services offered by the company had grown beyond nursing to include services such as physical therapy, occupational therapy and speech therapy.

The challenge for Baiada and his team was to unify employees in the many different disciplines around the company’s core mission and goals and to ensure that every employee, no matter the occupational field, felt accepted by and engaged with the rebranded organization.

“We created a new logo, with a larger dove icon, to symbolize the Bayada Way, a document which lists our guiding mission and values,” Baiada says.

“But we also wanted it to come to symbolize the extent of our services and the fact that we were doing more than nursing. The culture of excellence that had grown up around our nursing staff — we wanted to be sure our clients associated the same levels of compassion, excellence and reliability with all of our services.

“It was really a case of wanting to be fair to all parties.”

Communicate clearly

Baiada says the initial resistance to losing the word “nurses” in the company’s name was motivated by nostalgia more than anything else. Ultimately, the nursing staff wanted reassurance that the company still valued its nursing heritage and would preserve it alongside the effort to identify the Bayada name with a wider service offering.

Baiada took steps to reassure the nursing staff that the nursing practice would continue to be held in high esteem within the company. But with nurses seeking reassurance over their future role within the company and employees in other disciplines enjoying the recognition implied in the company’s new name, Baiada stepped back.

He surveyed the situation and saw the opportunity to use the rebranding initiative as a means of strengthening the connection between every employee and the mission of the company.

With a properly crafted message, he could renew the sense of purpose throughout the organization, re-energizing the entire workforce, regardless of role or background.

With more than 18,000 employees and operations in 26 states, Baiada encouraged a method of cascading communication that started at the company’s headquarters, eventually reaching all of the organization’s local offices with multiple forms of communication.

“We had a series of meetings, we rolled out a new website to let people know what we’re doing and why we’re doing it, and we also sent out some mailings,” Baiada says. “We had a lot of positives from the communications office, which handled the communication all the way down to the local offices, which then handed things out and supported the local nurses and field staff.

“If we had a meeting with 20 people, we’d have an introduction. If people couldn’t make it, they’d get something in the mail.”

Every move Baiada and his leadership team made had an eye toward rallying the workforce around the guiding company principles of compassion, excellence and reliability. That included altering the outward appearance of all employees by outfitting them with new uniforms. Bayada issued new scrubs to nurses and new uniforms to the other field employees, all bearing the company’s new logo.

“Everyone received new name tags and new uniforms with the new logo,” Baiada says. “It was another way to mark the change and another way to get it out in front of everyone. Almost everyone got something with the new logo on it.”

Ultimately, Baiada wanted to make the change real to everyone in the company. He wanted to immerse everyone in the new Bayada brand. If employees feel connected to the company’s future, they’ll be able to take more of a sense of ownership in the company’s mission and goals, which will strengthen the culture in turn.

“What you have to remember is, Enron had a beautiful mission statement, but they didn’t follow it,” Baiada says. “You need a sense of commitment that what you are putting down on paper and communicating to everyone is something that you are following continuously.

“If you aren’t following it, you don’t have integrity. And you want your people to agree to it, so you want to get a dialogue going and keep it going. What is in your heart also needs to be in their hearts.”

Start a dialogue

Baiada began to facilitate dialogue well before the rebranding initiative took effect.

If you want your employees to own the change, you have to let them buy in to the process.

“We conducted focus groups with our employees and additional focus groups with people outside the company,” Baiada says. “We conducted focus groups with clients and customers at-large and referral sources and also did surveys. What we really tried to determine was the key characteristics that are important.

“What we found was the research reiterated that the Bayada Way was pretty much on target as a set of guiding principles. When people needed help, they wanted compassion and reliability.”

But generating a renewed focus on the company’s guiding principles was only the first step toward fostering employee engagement. Baiada wanted to engage his people on a continuing basis, allowing employees throughout the Bayada organization to have a say in how the company embodies its foundational principles.

The engagement that employees feel in your brand, mission and values will show in the relationships they build with clients and customers.

“Happy employees and satisfied employees make for happier clients, which means we get more business,” Baiada says. “We’ve brought an analytic statistician on staff, and the research shows that when we compare our employee satisfaction, our client satisfaction and our business growth, they are highly correlated. They say it’s hard to find a good tomato, and it’s also hard to find a good nurse or therapist.

“So when we get them, we have to take care of them. We need to focus them, give them a voice, respect and honor them. If you respect them and engage your people, you’ll be able to build a team that can meet your clients’ needs.”

Engagement is about stimulating the thought process within your people. You want your employees to frequently think about the end users of your company’s product or service and how those people benefit from it.

“Knowing the stories of the people you serve helps employees put a human face on the work they do each day, and it also helps spur ideas around the subject of building better customer service.

“A success for us is when a client improves to the point that they don’t need our services anymore,” Baiada says. “We share those kinds of client stories, and we’re continually trying to put them in writing and record them on video. It’s all about getting that message out there, even in ways you might not immediately realize.

“For instance, all the photography on our website is images of actual clients and employees. We don’t use stock photos or actors.”

Though he can’t be everywhere at once, Baiada also recognizes the value of a visible, accessible organizational leader in maintaining a dialogue with employees and reinforcing the mission and values.

“You have to start out with an open door and a willingness to let people in,” he says. “If you have a story to share or an issue to address, here is my phone, here is my email. If you find something isn’t right around here or you feel something is going on that is disconnected from the Bayada Way, let me know.

“Hopefully, you’ll be able go to whoever is in charge of your area first, but if you need to contact me directly, I’m accessible.”

Hire for the culture

Achieving buy-in with existing employees is critical to the success of any effort to rebrand the company or refocus on your cultural values. But every bit as important as your existing employees is the employees you don’t have yet.

The reinforcement or erosion of your cultural values can hinge in large part on the quality of the hires you make and whether those people can align with the foundational principles of your organization.

As the leader of an organization that provides in-home care to clients who might be struggling to overcome disease or disability, Baiada believes his company’s culture of compassion is essential to success and is a critical pass/fail measurement in the hiring process.

Job candidates are presented with Bayada literature emphasizing compassion as a core value alongside operational excellence and reliability.

“We try to be clear in our materials about who we are and what we stand for,” Baiada says. “A lot of people take a job based on what they think it is or isn’t, and when they start working at the job, it’s not the same thing that they expected.

“For example, if a person is working primarily for money, this really isn’t the place for them. If you don’t like working for the clients and serving them, you’re probably not going to like the job.”

To develop a deep understanding of a job candidate’s behavior and thought patterns, you need to put the person in a work situation during the interview. Bayada’s team asks scenario-based questions and tries to uncover real-life examples of on-the-job situations in which the candidate demonstrated an adherence to Bayada’s core values.

Baiada says reliability is often the hardest to gauge, and if there is a hiring mistake to be made, it will often involve hiring a person who otherwise fits the mold of what you’re looking for but has reliability issues.

“Some of our care is on a one-on-one basis, so if someone doesn’t show up to work, we have a crisis on our hands in trying to find a replacement,” Baiada says. “You can get a feeling for compassion based on how someone behaves in the interview process. You can measure excellence in their performance.

“But the reliability factor can be harder to gauge.

“Ultimately, if you’re serving people, you want to find people who are motivated by serving people. That’s one of the biggest keys to continuing to strengthen our culture moving forward. It’s that focus on people. We like helping people, and the job can’t satisfy you if that doesn’t push your buttons.”

How to reach: Bayada Home Health Care Inc., (856) 231-1000 or www.bayada.com

 

The Baiada file

History: Founded Bayada Home Health Care Inc. in 1975 as RN Homecare. The company was subsequently renamed Bayada Nurses, and then rebranded as Bayada Home Health Care on Jan. 17, 2012 — the company’s 37th anniversary.

What is the best business lesson you’ve learned?

It is all about people. It is getting the right people connected and capable of serving our clients, and in making the Bayada Way come true as they carry out their responsibilities. We have a lot of people who make that happen each day.

What traits or skills are essential for a leader?

In our system, you have to be compassionate, excellent and reliable. If you can model that and make that come true, we’ll be in a great position to do what our clients require.

Baiada on keeping an eye open for small-scale factors that can make a big difference to the culture: I am a nut like that, personally. I hope we have enough people here like that, to keep things going forward. I am kind of a stickler for connecting the details to the bigger picture. And that takes constant attention. You are always trying to draw a connection. You’re always asking if everything is coherent and connected, if there are any disconnects. Is there any way we can be doing things better? It is a matter of being attentive, like coach, teacher or chef. You have to be attentive to it all, with an eye for improvement.

Published in Philadelphia

Andy Farbman doesn’t want to fix everyone’s problems.

The president and CEO of Farbman Group knows his business — and any business with designs on growing — can’t try to be all things to all potential customers. It’s a recipe for strained resources, exhausted employees and ultimate failure.

So Farbman has led his real estate management firm with an eye toward smart, selective growth that emphasizes areas in which his firm has traditionally excelled.

“No matter what you’re trying to accomplish, you’re always looking to go downwind or down river,” Farbman says. “You are not trying to fight the current. You are trying to find a path of smooth sailing or places where you can leverage your natural inertia and not have to fight what is going on around you.”

In particular, Farbman focused his company — which generated $200 million in revenue from property rentals in 2011 — on receivership work for banks and real estate in the health care field.

“Those are the areas where we really tried to shift a lot of our focus during the recession,” Farbman says. “We have always been very well skilled in and out of the court system in the state of Michigan, and we are now in 11 states as a receiver.

“The other niche in Michigan has come about through its aging population and really strong hospitals. We have developed our presence in the [health care] industry over the last four years, to the point that we are now working with five of the 10 largest hospitals, focusing on their real estate needs outside of the hospital campus — areas such as office buildings and ambulatory services.”

Planning ahead for effective growth requires you to have an accurate read on the markets you serve and an accurate view of the strengths and weaknesses within your business. It also requires you to motivate your workforce, rallying your people around a common mission and a common set of goals that will allow your company to achieve that mission.

Identify your strengths

Over the course of the past five years, a large number of commercial real estate firms have purchased apartment properties. Due to several factors, residential space made for an easier investment, and easier return on investment, than commercial space.

“The adequacy of capital was more significant, and it was an easier industry to be invested in,” Farbman says. “As a result, a lot of firms have gotten into the apartment business over the past few years.”

But Farbman declined to place a large amount of resources into purchasing and managing residential properties. Despite the lucrative potential in an industry still trying to crawl out of the real estate market crash of 2008 and ’09, Farbman felt it wasn’t the right fit for his company.

“What we have done, really over the last 12 or 13 years, is remove that skill set,” he says. “We did not believe we were the best in the world at managing those types of properties, so we didn’t focus our efforts there.”

If Farbman does not believe a particular business opportunity will play to the strengths of his business, he does not pursue it. Even if you see money practically growing on trees for other businesses in a given space, you won’t achieve the same outcome if you can’t commit the right resources to your own venture into the space.

Farbman says you should readily recognize the strengths of your business. You can always try to find new ways to leverage those strengths, but you should never abandon those areas of strength and abruptly turn in another direction.

“I think your strengths pop out,” Farbman says. “You can study trends and figure out trends and try to adapt the resources you have to follow those trends, but organizations — and particularly organizations that have been around for 35 years, like ours — have a natural skill set. It maybe isn’t as obvious as a left-handed pitcher, where a kid just naturally picks up a ball and starts to throw left handed, but it is still pretty obvious. It shows itself.”

Remaining true to your strengths means remaining disciplined about what business you accept. Apartment properties don’t represent the only area where Farbman’s firm has turned down business. Every week, and sometimes every day, Farbman and his executive team are confronted by tempting, yet difficult, decisions regarding whether to take on a new business opportunity.

“There isn’t a day that goes by where we don’t turn down business,” he says. “We want to do a great job for our clients, but we don’t believe we are one-size-fits-all. We have been asked to expand some of our businesses into other marketplaces, and that might be an area where we have reached out for a bit of help.

“A client might want us to be a street broker or a property manager in a city where we don’t have a lot of history. In those cases, if we take the business, we’ve had to find a partner who knows the market and the lay of the land better than we do.”

But in order to steer clear of areas that might not play to your strengths, you first have to know your organization’s strengths. That requires you to evaluate your organization and develop an extensive understanding of what resources you can employ and what skill sets and areas of expertise your people possess.

“You have to look within your organization and see the assets that you have,” Farbman says. “You have to evaluate what your assets are. In our organization, our two primary assets are capital and brainpower. Whenever you are dealing with a distressed asset or a troubled asset, you are trying to find a kind of special sauce for operating it, something that might lead to more revenue or decreased expenses. Once you figure out that special sauce and are trying to sell it, it’s something that becomes natural and obvious because it is already being implemented.”

Farbman’s philosophy centers on a desire to utilize the resources already in-house before looking outside the firm to add more firepower. It’s an approach aimed at creating efficiency and minimizing waste. Acquiring new resources — be it more people, more capital, more infrastructure or anything else — requires the use of resources in and of itself.

“We spend a lot more time figuring out ways to utilize the resources that we have instead of looking outside to bring in more resources,” Farbman says. “The biggest internal struggle today is probably that the profitability and longevity of organizations often aren’t aligned. I’d say every CEO has to focus on the long term in addition to the short term, and how to keep their P&Ls in order.”

Lead your people

Farbman’s focus on his firm’s areas of strength would never yield results if the approximately 200 employees at the Farbman Group weren’t aligned on a common set of goals aimed at leveraging those strengths. Farbman routinely engages his team and reinforces the goals and mission of the organization so that when they interact with customers or think of new ideas, it’s all with the end goal of enhancing the Farbman Group’s position in the marketplace as much as possible.

“I would definitely say that is part of our special sauce as a firm,” Farbman says. “We have an internal committee that meets once a month.

“It is a place for anyone in the organization to step up and propose new ideas for how we can either run the business better, because we might have a skill set that we might not be utilizing, or it might be as simple as the way we are recycling paper. There might be a better solution, no matter what the question is.”

Farbman and his executive team reward employees who create ideas that are ultimately implemented by the firm. It is a simple step that has been taken by many CEOs over the years but a necessary one if you are to reinforce your messages to your employees.

“It’s a monthly competition, and we give rewards to people who create opportunities for the organization or just make us a better place to work. In some cases, we might reward financially based on the savings that take place.

“But it’s important for us to take these ideas that start on the ground level and hold them up for the rest of the organization to see. When you manage 28 million square feet of property, you have all of these employees doing these different things day to day, and there are amazing things that are found at smaller properties, which you can end up implementing at bigger properties.”

Farbman says you can never underestimate the impact of giving employees a voice within your company. You can set goals and fashion a mission statement, but if you give your people the means to discover new and better ways to realize those goals and achieve the mission, they’ll develop a sense of ownership in what you’re trying to accomplish.

“It’s an approach that empowers your people,” Farbman says. “One of the ideas that came out of our committee forums was a flexible work schedule. We have a lot of single parents who work in our accounting division, and our accounting division isn’t necessarily an area where our people need to interface with a bunch of other employees. They don’t need to keep consistent hours. A 10-hour, four-day-a-week workweek is quite advantageous to some people.

“So there are intangibles that might not pop out the same way that a money-based reward or a promotion might, but it is more focused on lifestyle. In all cases, it helps keep people engaged in what you’re doing, and it can help reduce turnover in certain areas.”

If you engage your workforce in helping to construct the policies and procedures that will help you achieve your goals and mission, it also paves the way for effective delegation of responsibilities. Engaged employees are more willing and able to take on new responsibilities and own them.

“My executive team does a really good job of empowering people throughout the organization,” Farbman says. “We want to give our people every opportunity to make their own decisions. It’s something that really has to happen by example. You can’t Monday-morning quarterback your folks in the decisions they make. You might evaluate the decisions and why they made them, but you don’t cut off their knees. If they made a commitment, we live up to that commitment as well.”

Ultimately, if you are empowering people to take on new tasks and entrusting them with an increased level of responsibility, you want them to make decisions. It might be a right decision or a wrong decision, but regardless, making no decision is worse than making a wrong decision.

“You can’t be afraid to make mistakes, because if you don’t make decisions, you’ll stagnate as an organization,” Farbman says. “With my little kids, I play a game called ‘this or that.’ It’s a game where you are forced to make a decision and not push it off until tomorrow.

“I used to be an athlete, and most of the great leaders in my life have been some kind of coach. So I strongly subscribe to the idea that if you’re running the football, you better hit the hole as hard and as fast as you can. Even if you take the wrong route or hit the wrong hole, it still gives you the best chance to succeed. You have your moral compass and your gut to follow, and I believe that your gut, for the most part, leads you in the right direction.” <<

How to reach: Farbman Group, (248) 353-0500 or

www.farbman.com

 

The Farbman file

Born: Royal Oak, Mich.

Education: I have two degrees from the University of Michigan, in social science and economics. I’m halfway through my MBA at U of M, and probably will be for the rest of my life.

First job: I had a bagel and newspaper route when I was 12 years old and my brother was 15. We sold warm bagels with cream cheese and The New York Times door-to-door on Sunday mornings. Even though it was a starch-oriented business, it was very fruitful for us.

What is the best business lesson you’ve learned?

If you buy it, you own it. Properties have many little intricacies that go into running them, whether it is utilities, cleaning or tenants that might be disgruntled. When you buy a property, you commit to managing all of that. It goes back to the fact that we turn down business every day. Because it’s not enough to just get a good deal. You have to be committed to everything that comes with it.

What traits or skills are essential for a leader?

You have to be confident in yourself. When you go to sleep at night, you have to be confident in the decisions you made during the day, because people have to know that you believe in the decisions you have made. But along with that, you can’t take yourself too seriously. Here, we have pingpong tables next to the offices, and there is always a football being thrown around somewhere in the building. So we try to remain playful and have a good time. It keeps the juices flowing.

What is your definition of success?

The ability to balance business and life. One of my biggest commitments I have made is that I will be home to tuck my kids into bed, and I can miss their bedtime for a maximum of 10 days a year.

Published in Detroit

In today’s world, few things change as quickly as technology. Add to this the fact that technology change is usually toward greater complexity, and it becomes easy to see why some executives throw up their hands in exasperation when attempting to manage technology. Technology, however, is a key driver in execution and in maintaining your company’s competitive advantage — it can’t be ignored or delegated.

“One of the keys to managing technology is to not lose sight of the fact that it is a means to an end, not an end itself,” says Kirk O’Hara, vice president, consulting services at Executive Career Services.

“Executives need to understand the essential purpose of technology in their business, be able to incorporate it into their strategic plan and know how to easily and efficiently adapt new technology into business systems and operations,” he says.

Smart Business spoke with O’Hara about what executives need to know about integrating technology into their companies.

What should executives understand about technology and using it to execute business functions?

Leveraging technology starts with an understanding of how it can be used as a strategic resource. Every strategic plan should have a section devoted to technology and its role in driving the mission. This means that the IT department needs to be integrated into the company’s mission and not seen as an ad hoc department to go to when there are problems. In this respect, IT can be seen as going through the same sort of transformation that human resources did a couple of decades ago. Prior to that, HR was typically called ‘personnel’ and was seen as a necessary evil to avoid problems. Today, HR is viewed as a valuable strategic partner and talent management is a major concern of most executives. It is time for IT to be elevated to the same position.

Most executives do not need to get into the details of how technology works, but they should be familiar with the basic input, throughput, output cycle. For example, what data need to be collected for the input of business systems such as accounting, inventory control and customer relationship management? Remember the IT adage ‘GIGO’ — garbage in, garbage out. Collecting the data necessary to run a business is essential to maintaining a strategic advantage.

How involved should executives be with a company’s technology?

Executives should be intricately involved in the output. What reports are needed to properly manage cash flow, maintain optimal inventory levels and keep an eye on customer relationships? Part of the value of technology is that it can spew out a tremendous amount of information. In this regard, it is easy for executives to request too many reports and get lost in the information overload. The same can be said of business unit leaders and departmental managers. Monthly and quarterly reports accumulate over time and may never be used to make business decisions. Executives may want to try this simple technique. Occasionally discontinue a report and see if anyone notices it is missing. If no one complains, it is a safe bet that the report isn’t necessary.

Should a company make sure it has the latest hardware and software?

Throughput considerations will typically involve matters of technology, such as hardware and software upgrades. While it may seem wise to always have the latest and greatest technology, this isn’t always the case. Software updates often have bugs and new hardware may have higher failure rates. Unless your company is very technology dependent, it may be wise to put off updates until they have proven themselves in the business world, and only then when it is clear that the upgrades will have material benefit.

Leveraging technology isn’t all about systems. Executives also need to be sure that they are using personal technology efficiently and effectively. Smartphones and tablets are quickly replacing laptop PCs. Text messaging is replacing voicemail and email is a ubiquitous part of everyone’s work life. In addition to ensuring that technology is used as a strategic resource for the company, executives need to be sure that their personal use of technology is efficient.

How much should a company rely on technology to do business?

Above all, executives should ensure that in-person face-to-face communications aren’t lost in the crush of today’s workload. In-person meetings are essential when forming new teams, creating and nurturing new relationships and/or discussing areas that are emotionally laden or when intended messages can be easily misinterpreted. Email notes have their advantages, to be sure. They allow for a wide distribution where everyone receives the same message and they serve as historical records for documenting what was said.

Too many managers, however, try to manage through email, and this is poor technique. In particular, some executives will rely on an email note to convey a difficult message, for example, to address a conflict. A good executive will never opt to use email when a personal conversation is indicated.

Technology has pervaded — some will say invaded — virtually every aspect of our professional lives. We don’t need to get tangled up by it, however, if we keep the focus on how it can be used as a strategic advantage and never allow it to replace interpersonal interaction.

Still having trouble getting your head around technology? Find an IT liaison who speaks your language. After all, they are people, too.

Kirk O’Hara is a vice president of consulting services at Executive Career Services. Reach him at kohara@ecscpi.com.

Insights Human Capital Solutions is brought to you by Executive Career Services

Published in National

Over the course of the past six years, Tony Thomas hasn’t had to hunker down in the face of the economic recession — he’s had to plan for 10 to 15 percent annual growth over those six years.

Thomas, who serves as executive director at Welcome House Inc., a 295-employee organization devoted to helping individuals with intellectual and developmental disabilities, has been focused on overcoming funding challenges, diversifying services and continuing growth.

“We don’t really know what people are talking about when it comes to a bad economy or an economic recession; it just hasn’t happened to us,” Thomas says. “There’s been a lot of growth in the developmental disabilities field because the need is so great.”

Within Cuyahoga County alone, there are 600 to 700 people waiting for services. Providers such as Welcome House have been trying to expand services and create opportunities so people with disabilities have quality homes to live in in the future.

“That’s why the recession really hasn’t hit us at all,” Thomas says. “It’s gone in the opposite direction.”

Challenges of Growth

While Welcome House has experienced exceptional growth over the recent years, it hasn’t come without challenges and obstacles to overcome.

“The biggest challenge we have is the number of people who need services far exceed the number of spaces and opportunities that we have,” Thomas says. “What we are trying to do is to look for new and creative ways to serve people.”

The other thing that’s been a challenge for Welcome House has been that both the federal and state government changed their funding restraints.

“They’ve done some different things in their funding cycles, so the traditional programs we used to rely on to build a group home, some of those funding streams have changed,” he says. “So what we’ve had to do is be creative in the way we approach public funding to try to get dollars available to serve the people that we support. That’s really been our biggest challenge over the last four or five years.”

Welcome House has tried to counter this change by creating a home health care agency within the organization to draw new dollars from the federal government through the Medicare program.

“That’s a way we have tried to balance out,” he says. “If something changes in the state system, we try to look for federal dollars to support that. If things change in the federal system, we look at how the state may supplement that or go to the county for some creative ways to work with them. That’s what we are good at doing and that’s how we work.”

Another way around funding changes has been expanding fundraising beyond government sources.

“We try to do events and other kinds of things that will create opportunities,” Thomas says. “People can get behind us and support us through our fundraisers, through our events, through volunteering with us and a whole variety of ways.”

The growth Welcome House has seen doesn’t come to organizations that keep doing the same things over and over. Welcome House looks to differentiate itself from other providers in Cuyahoga County.

“We differentiate ourselves from those other organizations by looking at what the needs are out on the horizon and trying to plan for those services that may be needed two to three years from now,” Thomas says. “An organization like ours needs to change. It’s not something that can stay constant. We really need to change and adapt our organization to meet the growing needs and the changing needs of people with disabilities.”

It’s that kind of thinking that has separated Welcome House from other similar organizations and has contributed to its growth.

“It’s trying to think about what the future is but also trying to think outside the box,” Thomas says.

When it comes to out-of-the-box thinking, you need employees who share your vision and drive to make a difference in the organization.

“You have to recruit people who not just share your vision but also see the need for changing the organization and expanding services in different directions,” he says. “If you’re an organization or business and you’re staying in one line of business and that’s all you do and the market changes or the needs change, you’re not adapting to it. You have to adapt to it and you have to change and you have to have people on board, especially in your leadership positions, that are willing to look at changing the organization and aren’t afraid to make those changes.”

To make those changes a reality, you have to plan things out as an organization.

“If you agree to do something you have to also agree to change your organization to meet that need,” Thomas says. “Our people are very into doing that. They see the need to do it and they see the need to move the organization in a different direction.” <<

How to reach: Welcome House Inc., (440) 356-2330 or www.welcomehouseinc.org

 

Published in Cleveland

It was late 2008 when Ross Bushman and his team had just finished a new strategy for the next five years of business at Cast-Fab Technologies Inc. Bushman, who is president and CEO, along with his team were excited about the new strategy that was put in place and what it could mean for the company.

However, just a few months later, 2009 began and the castings and fabrication industry was hit hard by the recession. Cast-Fab Technologies, a 280-employee, $50 million gray and ductile iron foundry that supplies castings, patterns, steel-welded fabrications and precision sheet metal components, lost nearly half its business virtually overnight.

“We went through some hellacious turmoil in our industry, to say the least, back in that 2009 time frame,” Bushman says. “It was a period of about five or six months where a lot of that drop occurred. It wasn’t that we just lost 30 or 40 percent of the business in one day. We didn’t lose any customers. What we lost was our customers weren’t buying anything and that was different.”

With its customers taking a break from business, Bushman and Cast-Fab had to look elsewhere to keep business going.

“We knew we had to stay strong, make some painful choices early on, and we didn’t procrastinate on them,” he says. “We knew there would be opportunities to pounce on.”

To take advantage of those potential opportunities, Bushman stuck to the company’s plan, reassured employees that things would be all right with hard work and new customers would be found through diversifying the business.

Here is how he carried Cast-Fab Technologies through the downturn.

Involve employees in your strategy

The recession caused panic in a number of businesses as individual industries began to see the effects of the economy. Bushman, however, wasn’t going to let panic set in at Cast-Fab — he communicated what the organization was going to do.

“Our people were going home every night and the news was not good,” Bushman says. “Everybody had a friend, a neighbor or a family member affected somehow by the economy.

“People need clarity and every day we were out there trying to talk about those things and we kept talking to them about reaffirming America’s manufacturing excellence. That was what we were after.”

To achieve manufacturing excellence Cast-Fab aimed to diversify the customer base, establish new customer relationships and continue to grow with current accounts. To put that plan in motion Bushman involved many people in the strategic planning process.

“You have to involve a lot of folks in the organization,” he says. “People are usually pretty surprised at how much different kind of numbers and things we are sharing even down to key shop-floor personnel. Team members need clarity. They need the ‘what’ and the ‘how.’”

Deciding who to include in the strategic planning process can be a difficult decision. A good strategy group involves people from different levels and experience.

“We certainly have the key managers involved, but we’re also looking out for those up-and-coming associates who are going to be the key folks five or 10 years from now and getting them to be part of the process,” Bushman says. “At the end of the day, these folks own the plan — the strategy map and the numbers on the scorecard and what specific metrics we are doing — they are intimately involved in developing those things with us.”

You want to pull in folks who are on a track to do some bigger and better things for your company down the road.

“That just helps with the breadth of opinion,” he says. “In the C-suite, we all can get blinders on at times and forget that information isn’t assimilated through the organization as much as it comes to you. That’s why your players need clarity — the ‘what’ and the ‘how’ — and you have to communicate those things.

“The toughest part that any organization has is getting an outside force’s perspective of what’s coming at you and trying to look at where things are going to be five or 10 years from now and what you need to be doing today to get there. That’s where some of those outside folks can help challenge you.”

People are usually surprised at how many folks Cast-Fab involves in its strategic planning process.

“We have around 280 folks today and we’ll take 25 or 30 people off-site to really be part of this process and really help map the future of the organization,” Bushman says. “They then own the plan and they believe in the words and the numbers that are on the page. It’s not just me or my brother sitting up there talking about those things and that’s really worked well.”

Get buy-in

Having all of those people in the room to help form a plan is extremely beneficial when it comes to gaining buy-in for a new direction.

“I talk to our folks and tell them, ‘This is your chance to write the script for the next four or five years for the organization,’” Bushman says. “It’s not just me standing up there going over the same old charts and numbers. We’ve really created some good alignment within the organization as far as goals. We’re getting people pulling in the same direction.”

To get your company on the same page and moving together, it takes patience and persistence. Bushman has identified the five dysfunctions of team training to get his employees in line.

“You have to be willing to get better and not just go through the motions,” he says. “Sometimes to get better you’ve got to have some conflict and some change. So we’ve used the five dysfunctions of a team training, which talks about dealing with issues in a professional way. Sometimes it’s not fun, but we’ve spent a lot of time getting the right people that fit together.”

When you’re trying to get buy-in for a new strategy or direction for the company, it is rare that you will please everyone, but it is critical that you get a majority on board with you.

“You have to keep working your strategy so it becomes ingrained in what you do,” Bushman says. “My dad told me years ago that if you got even 70 percent of your workforce on board, buying in to what you were doing, that’s probably world class. You’re probably not going to have everybody, you just have to keep getting some converts each day, each week, each year to what you’re trying to do and you’ll slowly move the needle.

“An 80 percent solution executed on time is better than a 100 percent solution executed late. It may not be perfect, but start the plan and start it working and work on the implementation phase. It’s about getting a little bit better each day as opposed to giant leaps.”

To move forward with a plan each day and each week, you have to put emphasis on the implementation of your strategy.

“Too often people go through a huge strategic planning process, they come out with a great plan, but they spent months and months doing it, and at that point, people are exhausted,” he says. “When the work needs to begin on the implementation side, it fizzles out a little bit.

“We really shortened the time on the strategic planning side and we really focused on the implementation. On the implementation side is really where plans are won or lost and strategies are won or lost.”

Move forward

Following Cast-Fab’s strategic planning process in 2008, the economy tanked and implementing a plan and sticking to it became more important than ever.

“One of the principles and beliefs that I use is that decisions in crisis demand calm leadership,” Bushman says. “We really knew that and really communicated as best we could with the organization.”

Bushman used that calm, yet determined demeanor to steer the company in a positive direction. With current customers putting business on hold, Cast-Fab looked to gain new business. It brought on new clients and diversified its offerings.

“We knew there would be some opportunities in the marketplace and there were,” he says. “We continued to use our strategy, and we continued to look at where we wanted to go and that’s how we made our decisions. We made some painful cuts at the time, there’s no doubt about it, but we were proactive with those. We didn’t wait too long.

“We really saw where things were heading pretty quickly and that allowed us to stay strong in many ways.”

The opportunities Bushman communicated to his employees came up in time. Cast-Fab made an acquisition and gained business from competitor demise.

“We had our most successful year that year of new customer generation,” he says. “We really needed to, because our current customers weren’t buying anything. I knew if we could get some more spokes into the fold once the current markets came back we’d be in pretty good shape.”

Throughout this period, Bushman made it a point to stay as positive as possible and celebrate any small wins the company made.

“You have to spend a lot of time talking about the positives, not just the negatives,” he says. “People think you have your plan and you come in and talk about the stuff that’s not going very well.

“We try to celebrate success, because how boring would that be to just come in and talk about the problems all the time. We try to spend three times the amount of time on the positives as we do on the opportunities for improvement.”

Some of those positives have come from the new product offerings that Cast-Fab has created over the years in order to diversify.

“Part of the strategy that has been working really well for us is we have developed a couple of product lines of our own to help us diversify,” Bushman says. “We have a line of bank equipment products that’s sold under the business and brand Security Systems Equipment. We do safes, vaults, safety deposit boxes, pneumatic tubing systems and anything that a credit union or financial institution may need that’s metal-based.

“We have another smaller division that does products for water and waste water treatment. That business is sold under the name Coldwall Wilcox Technologies. These are subsidiaries of Cast-Fab that are a smaller piece of what we do, but they do help us diversify.”

The key to diversifying to help grow your business is to not leave the core competency of your business behind.

“You can’t stray from your core competencies,” he says. “Ten years ago, we didn’t know anything about bank equipment, but we knew how to make fabricated product. An opportunity came up to make an acquisition there, and we did that.

“Eight years ago, we didn’t know much about the products in water and waste water treatment other than they used a lot of castings and fabrications, machining and assembly. We had to learn how to sell some of those products and establish ourselves in those markets, but at the end of the day, we know what we do here in this building pretty well, and we’ve never strayed far from that.”

By sticking to a strategy of following core values and diversifying the business, Bushman has led Cast-Fab into new realms of business. He plans to continue that growth.

“As a family business, we don’t want to be doing this just for one or two more years; we want to be doing this for 30 years and beyond and get it over at some point maybe to a third generation,” he says. “So we’re trying to do those things and make those decisions now for the long haul.” <<

How to reach: Cast-Fab Technologies Inc., (513) 758-1000 or www.cast-fab.com

Takeaways

Utilize employees from different levels in your strategic planning.

Continue to work your plan as you gain buy-in.

Diversify by using core competencies.

The Bushman File

Ross Bushman

President and CEO

Cast-Fab Technologies Inc.

Born: Cincinnati

Education: Attended Miami University in Oxford, Ohio and received a productions and operations management degree. He also received an MBA from the University of Cincinnati.

What was your first job and what did you learn from that experience?

My very first job was at Carlisle Construction. It was a heavy equipment construction company that rented cranes, dump trucks, etc. I was the guy who swept the gas pumps, worked in the truck wash and steam-cleaned the engines so the maintenance group could work on them. It was a pretty good experience for a 14-year-old learning different stuff. I learned how different people dealt with conflict.

What is some of the best advice you have received?

My dad taught me years ago that pigs get fat and hogs get slaughtered. We use that a lot here when we’re talking about relationships with OEMs that we’re trying to establish for the long term. So when we’re in negotiations or doing pricing we’re talking about getting a fair return for what we’re doing to be able to sustain and grow the business, but at the same time we’re not looking for just one sale or a home run. We want to be able to do this for the long haul with them.

Whom do you admire most in business?

My dad taught me most of what I know. He’s been my hero in life. I was also part of a mentoring group here in town several years back with a fairly famous local business guy, Bob Kohlhepp. He is the chairman of the board over at Cintas and has been a great mentor to me and taught me a lot as well.

What are you most proud of at Cast-Fab?

I would have to say it was some of the work we did for the military. We did things on both sides of our business, ranging from ductile iron bomb bodies to some of the fabrications for the MRAP vehicles. A lot of our stuff isn’t necessarily seen when it is in use somewhere. It’s part of a machine or inside the guts of a machine, but when you can point to something that our folks are doing to help out our troops overseas, that’s pretty special to us.

Published in Cincinnati
Wednesday, 31 October 2012 20:00

Wholesaling books for CEOs

? The Little Black Book of Strategic Planning for Distributors

Brent Grover

Modern Distribution Management/Gale Media, 128 pages

Grover’s “Little Black Book” covers the critical pieces of creating a strategic plan for a wholesale distribution company, including case studies, exhibits and end-of-chapter questions for the wholesaler-distributor’s management team. These days companies are almost always focused on “the now,” and the recession exacerbated that tendency. This book will help shift that mindset. Its insights will help distributors organize a strategic planning project, gather the needed information and build a one-page plan. Execution is the final step, and that is where many distributors fail. This book gives distributors what they need to put their plan into action.

? 5 Fundamentals for the Wholesale Distribution Branch Manager

Jim Ambrose

Amazon Digital, 149 pages

“5 Fundamentals” is a guide for wholesale distribution branch managers to help improve their business and leadership skills. Ambrose asserts that the branch manager is the key to success for wholesaler-distributors. Expectations for managers’ performance are higher than ever, and the traditional advancement from inside sales to outside sales to branch manager is no longer the assumed track. The branch manager who follows this track with no leadership skills will struggle as companies push for improved performance at the branch level. Regardless of the company’s structure, the branch manager will need the fundamentals outlined here to keep the company profitable and provide the best value for customers.

? 2012 Wholesale Distribution Economic Factbook

Modern Distribution Management

Gale Media, 192 pages

MDM’s “Wholesale Distribution Economic Factbook” is widely regarded as the best source for accurate statistics about the wholesale distribution industry, including segment and overall industry revenue trends, inventory levels, 2012 sales forecasts and other critical benchmark data. Executives who manage, sell to or invest in wholesale distribution companies can use this report to stay on top of key economic and market trends. The report is produced by MDM, which has been researching and reporting on the wholesale distribution industry since 1967. MDM uses that experience to compile an accurate, comprehensive picture of the wholesale distribution industry in this report.

Published in National