Meeting of the minds Featured

8:00pm EDT October 26, 2009

When Paul J. Sarvadi and his co-founder sat down to talk about what kind of company they wanted to become back in the mid-1980s, they really didn’t have any idea what they were doing.

But, one thing they did know is they wanted the company to be about people, corporate culture and freedom for employees to do their jobs.

“What’s interesting to me is that most people spend an incredible amount of time and effort to develop their financial plan or their sales plan or their operating plan, but very few people spend the amount of time and effort to develop their people plan,” says Sarvadi, co-founder, chairman and CEO of Administaff Inc. “What’s their people strategy? What is the culture they want in their company? What is their organization and leadership philosophy for the company? How do they want to award people? ... These are equally important issues but generally don’t get the attention. The funny part is, it’s the people that implement all those other strategies.”

With 1,900 employees and more than $1.7 billion in 2008 revenue, Sarvadi is far from those days when corporate culture wasn’t even a common term in business circles.

He still believes in leading by example and communicating the type of culture that will continue to help the professional employer organization succeed.

If it’s after 5 p.m. and Sarvadi sees someone still in the office, he doesn’t automatically think what a great worker he has on his hands. He wants to know why that person isn’t home with his or her family and if he or she needs help with whatever it is the person is working on.

“In our world, we want to have a good work-life balance,” he says. “That’s one of the things we value. I want your work life to be a benefit to your home life. I don’t want you to live to work; I want you to work to live. So, I would rather reward you for innovating so effectively that you could figure out how to do the job better from 8 to 5, than I would reward you for being there at 6 in the morning and 10 at night. What are we doing wrong that we can’t get it done within the work hours?”

It’s that type of caring that has helped shaped Administaff’s culture and working environment today.

“(Your culture) becomes how your company reacts to the things that happen to you, good or bad,” he says.

“Your culture … either enables everything you are trying to do or inhibits everything you are trying to do. In our particular case, it’s been a tremendous enabler.”

Lead by example

Sarvadi wants employees to know he cares about them and wants to create a trusting work environment around him. In order for the message of a trusting corporate culture to permeate through your organization, you have to lead the charge by not just words but also actions.

“Leadership is always more communicated through example than it is through just discussion,” he says.

Which is where walking around after 5 p.m. to see who is still working comes into play. If he didn’t care about his employees and wanted them to fend for themselves, he’d walk right past the late-night worker, instead of inquiring if he or she needs help.

Or, he could chastise the worker for not finishing on time and bark orders. Neither would be effective in building a positive corporate culture.

“I just believe you get a lot more out of people when you lead out of authority instead of out of more of a power base liked you’d have in the military,” he says. “To me, the keys to being an effective leader are all about how you care about the people you are leading and how you develop that kind of influence. To me, it’s a set of skills that you learn and how to interact with people that develops that type of relationship.”

Sarvadi’s leadership style revolves around that kind of authority and developing relationships with people where they really want to follow and participate in whatever objectives have been set.

“That means that people are ready to storm the hill with you,” he says. “In order to get people in that kind of mode, what you have to do is develop personal influence with those people. The way you do that is develop a set of skills that involve how you connect to people. It’s really interpersonal skills — caring about people and respect for them as an individual and caring enough to tell them when they are doing things right and when they are doing things wrong. (It’s about) having the type of relationship that is trust-based where they learn over time that you really care about them and their success. When people know that, they participate at a different level.”

Sarvadi recommends thinking back to your past about someone to whom you gave over a significant level of authority.

“Power is something imposed on people, but authority is something people give you as a leader,” he says. “What you are looking for is situations where you said, ‘Hey, I am going to submit myself to that person’s authority.’ Then you answer the question ‘Why? Why was I willing to submit to that authority?’ What you are going to find out is those people in common had skills where they had developed personal influence with you.

“They were honest with you, they demonstrated they listened to you, they cared about you, they communicated with you in a way that was respectful and honest. Those are the things that make somebody really want to follow.”

Think about how those actions affected the level of personal influence that person had in your life and what made you want to follow that person up the mountain. Then, try to emulate those characteristics.

“It’s the little things,” he says. “Usually they are humble, they are kind, always respectful. They held you accountable but forgave you when you messed up. It was more of a learning thing. A lot of times, they were teaching you. They were willing to take the time to teach, not just correct.”

Don’t think about leadership as only getting up in front of people and talking. To build a trusting culture, the example you set is important.

“Although being able to communicate is really important, people are more about what you’re doing than what you’re saying,” he says. “It’s the integrity between what you say up there and what you are doing day-to-day that people pick up on and determine whether they could trust you or not.”

While leading by example will work its way down the organizational chart, so will your actions differing from your words. If you are preaching one thing and doing another, don’t fool yourself into thinking that no one is paying attention to you going through the motions. They are, and it’s hurting your credibility.

“Some of the things are as basic as listening skills,” he says. “But I always say listening is different than caring. A lot of times, people will listen just because that’s the polite thing to do. But, you know an individual can tell the difference between when you really care about what someone is saying and what their end objective is as opposed to just listening just to be polite.”

Explain why

Administaff is in pretty good financial shape, even during this financial crisis. There is still money in the bank, working capital and no debt.

Bu

t the economy still affected the company, and Sarvadi had to make changes.

“Our customers are affected, therefore we’re affected,” he says. “We’ll still make money. We just won’t make as much money. But in this environment, even though we have that type of financial standing and capacity, it still made sense for us to take a conservative view of the next couple of years.”

Sarvadi gathered with his executive team and they walked through what a conservative approach would look like, and then communicated with the next level of management the new approach.

Making cutbacks when a company is doing well can send a wrong message and leave employees disgruntled.

“We made a bunch of decisions that are not popular,” he says. “We froze wages; we decided to not replace folks and allow attrition to take place. We cutback on the 401(k) match. We did a number of things that a lot of companies are doing these days just to be conservative and to make sure the company stays in good financial shape through the downturn.”

Decisions, especially unpopular ones, need to be explained if you want a positive culture where people are empowered. You can’t expect people to hear what you say, be happy and then just go back to work.

Instead of just sending out a memo explaining the changes, Sarvadi and his team took a whole company meeting to explain why they were scaling back.

“A lot of times leaders don’t take the time to explain why,” he says. “When people understand why, then they help figure out how more effectively than they would if they don’t understand the why.”

Not everyone is going to love the decision or even the reasons why, but that doesn’t mean you keep it a secret.

“But at least people say, ‘Hey, you know what. They have the guts to just tell us like it is, and we just have to live with it.’ But that’s better than people wondering what’s going on behind the curtain,” he says.

You shouldn’t wait for bad news to start communicating. Keep the lines of communication open at all times to engage employees and find out what’s on their minds by giving them the opportunity to ask questions.

Every month, Sarvadi has a meeting with the entire staff, and they broadcast it throughout the country. Employees can ask whatever questions they want anonymously. They submit them in advance and Sarvadi reviews them and answers as many questions as he can in the time allotted.

“What happens is many of these questions give an opportunity to answer the question in a way that supports and reinforces our leadership philosophy,” he says.

Aside from unpopular decisions, there may be other topics people want to know about. The more questions you see about a specific topic will give you a better idea of when you need to explain the reasons behind a decision.

“Part of it would be just when you are making a decision that impacts a broad number of people or when it’s a change to the strategy or direction or a change to a major objective,” he says. “Then, beyond that, it would just be things that kind of bubble up. You can have more of the same kind of questions bubbling up from two or three different parts in the organization.”

Using examples will also help in getting your point across. In Sarvadi’s case, when he announced some of the changes, he also told everyone that the off-site training sessions he normally has for his management team would no longer be off-site to save some money. It shows that management was serious about its decision but that it also wants to meet the company’s goals and objectives for the year.

“Really, it was amazing how people were able to apply that thinking in their own part of the business and have tremendous results and control of the expenses,” he says.

It also shows management leading by example. That, coupled with explaining yourself, will go a long way in creating a trusting corporate culture.

“I don’t think you can have a V.P. of corporate culture because everyone has to be the V.P. of corporate culture because anyone of us can create an environment that’s counter to the culture,” he says. “So, it’s a matter of everybody owning it. But, they can’t own it if they don’t know what it’s about. If you’ve never described it fully, if you’ve never explained why it’s important to you and the business, then why would anyone care?”

How to reach: Administaff Inc., (800) 465-3800 or www.administaff.com