Joe Davis develops future leaders at Consolidated Graphics Featured

8:00pm EDT May 26, 2010

Leaders in Joe R. Davis’s position might feel growing pains.

The $5 million printing company he started in Houston in 1985 has sprouted into 70 locations across 27 states as well as into Toronto and Prague. In fiscal 2009, which ended in March, the company struck record revenue of $1.15 billion.

But Davis, chairman and CEO of Consolidated Graphics Inc. (NYSE: CGX), knows he can’t handle every aspect of a rapidly growing organization. In order to keep the company strong as it expands, he needs to develop future leaders.

“Developing these young people, [giving] them the opportunity, is the most rewarding — as well as sometimes the most challenging — thing we’ve had to face,” Davis says.

So he developed the Leadership Development Program to speed college grads through an accelerated path to management.

The company’s Web site touts, “The program succeeds because it is not a cookie-cutter structure. It’s an organic process that is very much tailored to the individual’s goals.”

And succeed it has.

Since its start in 1991, the award-winning program has added 278 graduates to the work force of 5,500 — and 87 of those came in January alone. And yes, we said award-winning: Consolidated Graphics scored multiple honors from the National Association of Colleges and Employers for best practices in educational programming in 2005 and information resources for students in 2007.

Davis has learned plenty about training and developing future leaders but just as much about finding those future leaders to develop.

“You can sit down and talk to them. You can make suggestions to them,” Davis says. “But in the end, it’s up to the individual to perform as you expect.”

Find people who fit

Identifying the right people starts with a background check.

“First of all, we have a great belief that past success is a predicator of future success,” says Davis, who begins his search by reviewing a student’s college career. “Somebody in college, at 22 years old, it’s very difficult to predict what they’re going to do. But we look at their prior track record.”

The first general indicator is grade point average; Davis looks for B or better. But that shouldn’t be the only thing you consider.

Look for outside involvements: social groups, extracurricular activities, jobs, etc.

“Something other than just going to school,” Davis says.

You don’t have to narrow your search to candidates with prior knowledge and experience, especially when you’re using young students as your pool.

“We don’t necessarily look for anybody with prior print experience,” he says. “We believe we can get someone who is bright, enthusiastic, energetic and we can teach them the printing business.”

Focus on work ethic and other ways they’ve already set themselves apart that match what you expect from employees.

“You have to judge and base it on prior history,” he says. “What has been their success through high school, college and gotten them to where they are now? Did they work hard in college? Did they have outside activities? Did they have a job? What did they do to distinguish themselves in their college career? I think that’s the best indicator of what they’re going to do once they join your company.”

Davis wants candidates who have shown they are eager, aggressive, hardworking achievers who yearn to succeed — not lazy students who want an 8-to-5 day and a paycheck. Separating the good candidates from the lazy ones can start with their responses to basic questions like why they want to join your company.

“If their answer is, ‘You have good pay and benefits and I need a job,’ that’s probably not going to be very interesting to us,” he says. “But if the answer is, ‘I see this as a great opportunity to have a long-term career, and I think I could be very successful. Here’s why I’ve been successful in the past, and I think I can be successful here,’ then we’d be interested in that person.”

Of course, you also have to be clear about what the job entails to make sure both sides are in sync.

“We tell them about the company, how we train them, our expectations of them,” Davis says. “So nothing is new when they come on board.”

Explain both what you expect of the candidates and what they can expect. Davis shares stories of 26-year-old company presidents who have zoomed through the program and risen to the top.

Students can also go online for in-depth descriptions and videos of the Leadership Development Program through first-person perspectives of current students and successful graduates. The “Day in the Life” section shares employees’ blogs to show an average day’s duties in several positions. One employee who has only been in the program for a month shares a day of inking press rollers and attending a production meeting to review every job in the plant. Another new employee, still in sales training, blogs about a morning presentation for combining CGX’s print and online capabilities, the daily hour of cold calls and happy hour with a top client.

“They know what our expectations are coming into the company, and hopefully they know what the opportunities are coming into the company,” Davis says.

Through that, he hopes to find employees who will make the best fit.

“Anybody we hire out of college we think has the potential to be a company president,” Davis says. “Or we don’t hire them.”

Provide opportunities

The Leadership Development Program at Consolidated Graphics has three phases to steer employees into management positions, offering development opportunities along the way.

The first stage, formally called the production rotation, is better known as getting dirty. Like the brand-new employee blogged on the Web site, the first step involves teaching employees the process that physically takes a job through the company.

The company’s philosophy is this: If you’re going to be a leader in the business, you have to know how it works down to the finest, grubbiest detail.

After six months, candidates shift to the next phase of business fundamentals by rotating through the back-office departments. They tackle longer-term, hands-on projects in accounting, purchasing and customer service for about another six months.

During these stages, don’t treat the new employees like interns that sit on the sidelines and observe. They should be diving into each specialty to ultimately decide where they want to end up.

On-the-job training provides students reference materials to help teach the technical aspects as well as the assistance of a more experienced associate who may serve as a mentor.

“My objective is I want them to be as successful as they possibly can be,” Davis says. “It’s my challenge to be sure that they have enough opportunities to maximize their potential in our company, and that’s my responsibility.”

While new employees are scouting the various aspects of your company, your job is to make sure they’re making an effort and to help them find their strengths by monitoring their performance.

Every six months, presidents of operating companies comple te written evaluations of the LDP associates at their location, and Davis personally reviews the assessments. While they’re always evaluated on soft skills like getting along with co-workers and communicating effectively, the early assessments focus on technical skills.

“You’re looking at: Are they developing their technical expertise?” Davis says. “They spent six months in customer service, for instance. Have they mastered all the things that you need to know about in customer service? If they’re in purchasing, have they mastered everything, including all the products we buy and the characteristics of those products?”

Their interests — as well as your assessment of their strongest skills — will lead them to the third stage of the program, which is leadership training in an area of their choosing. At Consolidated Graphics, that’s generally a choice between sales development and operations management, both of which eventually lead to the president’s seat.

“They have to decide what they want to do,” Davis says. “We can encourage them, but I think people have to encourage themselves. We give them a lot of opportunity, and they have to take advantage of the opportunity. We’re not in the baby-sitting business.”

By mostly leaving the choice to them, you’ll also identify the self-starters who will jump into a position and strive for success.

“You can look at your job in a narrow field or you can say, ‘I’m here to learn all I can about the printing business. I want to help in any area I can,’ and if somebody’s overloaded, you step in and help them out; maybe you learn something about their job when you’re doing it,” Davis says. “So I’m looking for people who are willing to extend themselves and understand our business.”

Develop leaders

Davis learned that in order for new leaders to develop in his company, he has to throw them the ball and trust them with it. So he tries to strike a balance between letting go and watching how they handle the responsibility.

“It’s necessary to be able to delegate to your people. You can’t be a micromanager,” he says. “But at the same time, I think you need to follow up to be sure that people are doing their job and have some method to measure how well they are doing that particular job.”

The fine line lies at how often you’re monitoring your people. The more closely you examine each step of their progress, the closer you inch toward micromanagement.

“If you’re just looking at results and not questioning the wisdom of every judgment they make, that’s not micromanaging,” Davis says. “You have to let people do enough things and make a few mistakes and hopefully they learn from those mistakes.”

Of course, the way you handle their mistakes can either foster or stint their growth. Davis, for example, prefers to discuss what caused the mistake and how the employee can improve next time. But again, it’s up to them to learn from it.

“I don’t get very upset when people make a mistake,” he says. “What I get upset about is if they make the same mistake twice or if there’s an area that I have told them to be careful about and that’s where the mistakes happen.”

On the other hand, when you see employees using opportunities to improve, it may be a sign they’re ready for more responsibility.

“Go back to the people that have been successful in the job that you’ve asked them to do,” Davis says. “You have an opportunity for more responsibility, then I think that’s the person you’re going to take the chance with — and it’s a chance anytime you promote anybody into a new position. You’re taking risks.

“The question you have to have, always, is, ‘Can he run a larger company?’ I look at him and I see he’s done a great job running a smaller company, and my judgment is that he has the ability to run a larger company.”

But, because you’re taking a chance when you make that call, how can you reduce the risk? What if the employee isn’t ready for the responsibility?

“Well, you have to look at his management style,” Davis says with a nod back to the delegation discussion. “He’s running a smaller company; has he delegated or has he done everything himself? If he’d been a one-man band, he’s probably not going to work well. He doesn’t have any experience or maybe the talents to run a larger operation.

“But if he’s been good at hiring the right people, delegating to those people and making sure that they’re doing a good job, then he probably could handle a larger operation.”

With 21 of the company’s 70 presidents coming through the Leadership Development Program, Davis jokes that he can always give aspiring presidents more responsibility.

“I tell them that I never have enough company presidents,” he says. “We can acquire a lot more companies today if we had enough people to run them.”

How to reach: Consolidated Graphics Inc., (713) 787-0977 or www.cgx.com

Visit the Leadership Development Program Web site: www.cgxoncampus.com