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Mel Payne Featured

8:00pm EDT July 26, 2007
Mel Payne freely admits that he is the CMM, or chief mistake maker, at Carriage Services Inc. By being honest about the fact that that he is no closer to perfection than any of his 2,000 employees, Payne believes he fosters a culture in which employees are willing to take risks, learn from their mistakes and help the provider of funeral and cemetery services grow in the process. Carriage Services posted 2006 revenue of $151.1 million and is estimating growth of 7 percent to 9 percent in the years ahead. Smart Business spoke with Payne about the importance of making a connection with your employees and why sometimes you just have to dive off the cliff.

Get to know your team. If you can relate to them on a human level as a person, they are more likely to connect with you and the goals of the company. It makes them feel important as a person. I had a new assistant here one time. She said, ‘Mr. Payne, I’ve worked for CEOs and chairmen before, and I need to know how to manage your calendar and the calls.’

I said, ‘Here’s the deal. Everybody calls me Mel, and the most important calls I will get are the managers of our businesses across America. If one of them calls, you get me no matter where I am, no matter who I’m talking to. You come get me.’

They would not be calling me if it wasn’t important. They will call me. I will call them. They need to be comfortable that I’m Mel, and I’m a person, and I want to help them be successful.

Keep chasing excellence. It’s a continuous thing. You have to get up every day and work on this little thing, and the next day work on something else until you get it right.

We define being the best as not related to somebody else. It’s more like playing a golf course. How good can we be, and what is being the best? How do we define it culturally? How do we define it performancewise? We realize we’re probably in about the second or third inning. There’s a lot of innings to play, and we’ll probably never be finished.

If you believe in it, just do it. In late 2003, we switched from a budget-and-control model. We just threw it in the trash bin and invented a new operating model that was based on standards. It led to a complete transformation of our company in 2006.

It was not easy. You’re headed off down a path that people just don’t take because it’s different.

It takes longer than you think, and being a public company, it led to some underperformance that didn’t get addressed properly because we didn’t have the corporate leadership in place to do that.

We could have been more cautious. We could have spent a lot more time trying to do analysis and brought in consultants. We didn’t do any of that. You just have to dive off the cliff. You just have to go for it and just drive it every day.

There will be resisters. You have to figure out who they are and sweep them out of the way. Change and transformation require a lot of energy and energizing and edge. I probably let some people on the corporate leadership side stay too long. I gave them more time to make their adjustments, and they just didn’t.

If you have a vision on something and you want your company to move from mediocrity to something more, change and transformation are absolutely necessary.

Give your employees feedback. Be honest and straightforward. Use appraisals to help people do better on their jobs.

If someone is not performing up to our high standards, they will never know unless you tell them. If you don’t have a habit of doing that, you are not being fair to them, and you are not being fair to the business.

They can’t read your mind and know what they should be doing. Tell them what they should be doing and explain it.

Set clear goals. We publish monthly league tables, showing the top in the company to the bottom. That’s where the peer pressure kicks in. Everybody knows who is the best and who is the worst, and wants to get off the bottom.

It’s based on the standards. We calculate the standards monthly. It’s very healthy for the best talent. This takes someone with a competitive, winning spirit. If they don’t have that, they can’t grow this business. For someone with a competitive, winning spirit, they thrive on trying to move up the league tables.

Empower your people. Surround yourself with talent and empower them. Coach them. Communication skills in a CEO are critical. I tell them what the goals are, and then let them go do it.

I spend a lot of time on goals, strategies and coaching all during the year but especially at the end of the year. I do detailed appraisals and sometimes I do interim appraisals in writing. I give a lot of data and examples of behavior and results that are expected, and similarly, what isn’t expected.

I just have to constantly make sure there is an alignment of our leadership with the culture and the mission and the vision.

Don’t just look at the resume. We try to focus on what we see as potential weaknesses. It’s a waste of time to talk about what is obviously a strength. We want to focus on what are the potential weaknesses and what are the potential reasons why this person won’t be a fit or be successful in this role.

When we do the reference checks, we ask them about those weaknesses, and we don’t leave quickly if the answer is not real specific and acceptable. People don’t like to say something negative about a reference. If they won’t talk to you much about it, we view that as a negative.

Hiring the right people is a very disciplined, patient process. You have to do a lot of work to get it right or minimize the chance that you’ll get it wrong.

HOW TO REACH: Carriage Services Inc., (713) 332-8450 or www.carriageservices.com