Dave Dutton walked into a nightmare when he took over as Mattson Technology Inc.’s CEO in December 2001.
“The company had just completed a merger, and then, right after the dot-com bubble burst, went into one of the worst downturns,” Dutton says. “The founder quit and essentially retired. This all happened three days before an analyst’s conference call, which I had never been experienced in.”
Adding fuel to the fire, Dutton said the merger hadn’t been fully integrated, so his business was behaving more like three separate companies.
“The company had an optimism that the companies would just fold into each other and grow,” Dutton says. “The reality was the merger was not a structured business focus, so the company was losing money. On top of that, the worst downturn in our industry hit, so that took a weak operating structure and sent it down further.”
Being hit from all angles, Mattson was already on its knees and still getting hit as it closed out 2001 with a $336.7 million net loss and only $230.1 million in net sales.
It was now Dutton’s job to heal the wounds, but with those numbers, he couldn’t simply slap on a bandage.
Instead, he needed to completely overhaul the semiconductor manufacturing equipment provider, so he took to rebuilding Mattson’s infrastructure by cutting costs and creating a new vision.
“It’s just like anything else in business,” he says. “When you’re in a difficult situation, a turnaround or whatever, call a crisis a crisis, get people in the room, start mapping where you are today, make decisions, and speed of execution is still critical.”
Make tough choices
In a financial crisis situation, most leaders would just start wildly slashing costs everywhere, but Dutton realized he couldn’t just cut without reason.
“Really quantify clearly what you need for success,” he says. “What does a company need to get to as far as the size and level because, certainly, when you make these cuts, you don’t want to be doing them over and over.”
To move forward, he decided to examine all the products and business segments and evaluate their current strength and long-term viability.
“We had to make decisions around what products and what areas of the company were adding value near term and had the capability in place to continue to drive toward a leadership position, and those areas that weren’t having an impact and weren’t positioned to have an impact in the future,” Dutton says. “We were making cost-cutting decisions left and right.”
Dutton and his team developed a set of product principles to help them make these decisions. A product had to first have a clear path to leadership meaning it could be No. 1 or No. 2 in the market with what it already had or with what they were anticipating developing. The second test addressed whether the product had differentiating capabilities and technology from competitors.
Dutton then applied those principles to each product and business segment to see if it was delivering now or if it was positioned to do so in the next two years.
“It was decisions around, ‘Is this business strong enough today? If it is, can it continue to have that strength?’” he says. “In other words, is it positioned well in the market, and is it generating value for us? That first set became keepers.”
The next step was looking at the areas that weren’t positioned well.
“Do we have the funds and resources to bring it to position, and if so, will it be a contributing factor in the next two years?” Dutton says.
If the answer was yes, it stayed, but if it was no, it went. “It sounds pretty mechanistic, but we’re making decisions, and in some cases, we’re shutting down some very new and novel technologies that could have been market winners ... but the reality was, at the state the company was in, we felt we wouldn’t have the resources to deliver those to success.”
When you’re cutting products and areas, you’re also cutting people, so Dutton had to communicate to his 2,300 employees the company’s state and that many would lose their jobs as he made decisions. With bad news, it would be easy for them to slack off until they know if their job is safe, but Dutton showed them how their work output would affect not just themselves but their peers.
“A lot of it was being clear to our employees and divisions,” he says. “There were cases I’d walk in and show people our revenue stream, our cash flow and essentially give them a number ‘If we reach this point in cash flow, the company will cease to exist and nobody has a job, or you can adjust to this level, and then some people will have a job. It’s your choice.’”
People worked to reach the levels he set out, and Dutton continued making decisions. Because these decisions affected so many people, if something had to go, he first looked to divest it so fewer people lost jobs. About 900 people left as a result of the divestitures. What didn’t get sold was discontinued, along with the necessary layoffs of about 800 people. Although it’s never easy to reduce a work force that much, focus on the silver lining.
“The thing is, instead of 1,800 people having to lose their job, it could have been 2,300, so you have to do the right thing through the enterprise,” he says. “Whatever that end solution is, the enterprise now is successful in moving forward. That’s what you’re signed up to do that’s the ownership you take in that role.”
His advice for others is to get your leadership team on board, and then move quickly.
“Once a decision is made, move as quickly as you can,” Dutton says. “Get it done, get it over with, so that the people that are departing can be helped to the next stage, and the people that have to move the company forward can now be focused on what are the next steps to move the company forward.
“It’s making pretty tough calls and getting down to a point then that the businesses you have moving forward are generating value, and you can translate that value back into a profit. Once you get to that stage, now you can start building that little strategy going forward.”
Create a new vision
Once Dutton had the people and products in place, it was time to start moving everyone back toward profitability, and to do that, Mattson needed a new vision.
“It’s not only an execution in the now, but also an eye on the future because without building that future, that company dies,” he says.
He hired outside consultants to help him and his team focus on overall corporate wellness and not get caught up in only keeping the patient alive.
“Their task was to make sure they were pulling us out on regular intervals so we could then go through a revisioning process,” Dutton says. “That process was basically centered around mapping the situation today, understanding the dynamics of our competitors and our market analysis looking at where we thought the market would be 20 years from now, building in white space of where the opportunities were, and from there, building in a set of strategies and principles that mapped into the mission.”
During this vision process, collaboration was key. “When you’re dealing with a collaborative style and a collaborative environment, you work hard to get most of that discussion out so people get it out on the table and understand the objectives,” Dutton says. “Then you drive toward a decision.”
Let the team work through the process, and often in the process, you’ll see the direction slowly appear, so you try to align the team toward that direction, but sometimes, you have to make an executive decision.
“If it gets circular or starts to move away from the problem, it’s time for a decision, and you either bring the team to the decision or you say, ‘Look, this is the decision. Are we OK with it? OK, good, let’s go,’” he says.
Even after you make that decision, you need to make sure everyone has said what’s on his or her mind.
“You make those decisions, you say, ‘OK, this is the decision. Are there any emotions on the table about this?’” he says. “If you bring up that emotion now, you’ll talk about it more. It may not change it, but at least that person really has clarity about where they are and how to operate in the team.”
By asking these questions and opening up discussion, you’re more likely to succeed.
“The more inclusion you have, the more alignment there naturally is,” Dutton says. “You have to have a set of leaders that understand that decisions are made for the enterprise, and they have to execute them.”
Communicate the plan
Once he and his team had created their vision for Mattson’s future, they also had to communicate that to the employees, but stating the vision is just the beginning.
“Visioning is a constant communication, so you never stop communicating,” Dutton says. “You say it multiple times. The old adage, and you hear school teachers say, ‘You have to hear it three times before you get it.’ I think in rolling out a vision, people have to hear it 20 times in 20 different ways, so you’re constantly trying to tie regular communication to the employees.”
One of the key ways to communicate a vision is to get people to discuss it so it’s more inclusive and less lecturing.
“A lot of times, even things that sound simple, like setting the next year’s revenue goals ... if you put 15 people in a room and start talking about it, that number of fears and uncertainties inside every person are all different, so try to get those out,” Dutton says. “Once they’re out, you can talk them through, and then procrastination to moving toward that new goal goes away, and people start to move forward.”
Even when people resisted, Dutton tried to talk things through with them.
“Over time, when people constantly don’t align to where a company is going, a lot of times they make their own decisions that they don’t fit,” he says. “We don’t use, necessarily, authority over dissension. It’s still collaboration through dissension that moves the company forward.”
As he made progress toward the future, Dutton was also mindful to share those victories with people.
“For example, if we win an account because our tool has the highest throughput for a customer, we can tie that back to one of our product principles, which is toward low-cost ownership,” he says. “It’s a constant communication of the mission, and then taking the successes and tying them back into the mission so that people are constantly internalizing it and moving forward.”
Dutton’s strategies have proven successful. With $267.3 million in net sales and $27.6 million in income last year, the company is now solidly positioned and earning money instead of bleeding it. While successful, Dutton thinks back to a conversation from 2003 and how much has changed since then.
“My wife, Donna, and I were talking, and I said, ‘So far, my claim to fame or mark on this role is we’ve taken a company from 2,300 people to 600 people not a great thing, not a thing you want to be known for,’” Dutton says. “But, at the end of the day, those 600 people have now built the company forward, where it’s continued to gain share, it’s become a leader in two areas, and it’s now implementing two other growth segments, and we’re expecting to double our revenue as we go forward over the next year and move into a whole other realm of the company.”
HOW TO REACH: Mattson Technology Inc., www.mattson.com
Seven years ago, Rick Davis needed to hire a new chief operating officer for DAVACO Inc.
While most leaders look for people with five pages of management experience or multiple graduate degrees from Ivy League schools, this founder and CEO took a different approach. Because his company specializes in retail services including retrofitting stores and high-volume rollouts, retail experience was at the top of Davis’ list.
This was all the more important because Davis himself lacked this experience, so to better relate to his clientele and balance his shortcoming, he needed someone who understood the inner workings of the retail industry. He found just what he was looking for, and today, the majority of his management team at the $115 million company also has retail experience.
Smart Business spoke with Davis about why hiring presents the biggest roadblock to growth.
Hire great people. The biggest challenge we have day in and day out is just finding great people. The biggest inhibitor to growth is hiring. It can be damaging to hire the wrong people. Our widget is our people, so the quality of the people that we have out representing DAVACO is all we have. If we compromise that, we compromise the entire company.
Most of our work is done in an open-store environment. When you have an open store, our customers are not only the managers of that retail chain, it’s also their customers. If we don’t give great customer service, we may not have that customer.
We are only as good as our last job or project for a client. If we are not careful, one employee who is careless can erase years of superior service. If you have employees that are misrepresenting your brand and not meeting the quality standards that you have set for the company, then your business will suffer.
Strength of character is the most important qualification. Skills can be taught, but integrity, ethics, loyalty and high standards are inherent qualities. Hire quality people with good values and integrity that will do what they say they’ll do because I can’t train that. It starts with evaluating the person’s personality, and then we go to great lengths to test for everything from drugs to driving and all the things that you want to make sure that someone has the proper abilities to do.
We go through 20 to 30 candidates to find one. It’s important because of the time and what you have to go through to train them once you put them on board. Hire great people, and go to great lengths to do it.
If you have to rehire them, it’ll cost you, so we spend a lot of money upfront trying to make sure that we hire great people.
Promote from within. Part of the growth process has been that we made an effort to promote from within. We have several employees in our management team that have been with the company since the beginning.
With a business that is growing quickly, you get the opportunity to grow the employees with it.
That really helps you on the growth part. If you’re growing a company at 35 percent a year, year over year, it helps that people can deal with change, and the people that have been within the company and moved up with the company understand that change because they’ve been a part of the company. They understand where we began and how far we’ve come.
Communicate. You can’t drive growth and year-over-year success without change. Successful companies are not static. They are constantly challenging themselves and their employees to evolve. We have encouraged and built a culture within our company to embrace change.
The best way to foster the idea of embracing change is to make sure that you communicate with your employees. There’s so many mediums today to communicate with your people, whether it’s through a Web site, or we have as many as 500 BlackBerry devices throughout our work force that we communicate through daily.
We have quarterly meetings, a quarterly newsletter, and we go, semiannually, off-site. It’s simply to communicate the vision of the company, where we’re headed, where we’ve been and what changes we’re going to make.
We even have a Web site that we use to communicate benefits. We have a DAVACO University for training sessions, and we bring in people to train and communicate through that medium.
The more communication that you can give them, the better. All of that is important because it assures that everyone in the company understands our annual goals and is motivated to be a part of reaching those goals.
Recognize achievements. We’re about people, so we go to great lengths to recognize the superstars in our business.
On a monthly and quarterly basis, we have a companywide meeting within the office, and we have a program where any employee can recognize another employee for going above and beyond. We go through all of those and have a quarterly superstar. At the end of the year, we have an annual super-star you get to spend a week in Hawaii, and you don’t even have to use your own vacation time to get there.
Recognizing achievements within the company are just as important, if not more important, than monetary rewards. People like to feel as though they’re really appreciated. It’s a good thing.
HOW TO REACH: DAVACO Inc., (877) 732-8226 or www.davacoinc.com
Mansoor Ahsan takes pride in the fact that he’ll do anything to get the job done even if it’s grunt work.
“The key is passion, and the passion is in the grunt work,” he says.
This CEO of Bridgefarmer & Associates Inc. says that taking pride in doing grunt work sets an example for his 50 employees that they should do whatever is necessary to get the job done, even if they feel it’s beneath them. It also shows clients that he’s fully committed to meeting their needs.
The example he sets is one way he builds both relationships and his civil engineering firm, which grew 33 percent in two years to reach 2007 revenue of $13.6 million.
Smart Business spoke with Ahsan about how to build customer relationships as if you’re hunting prey.
Q. How do you build client relationships?
Knowing the client, knowing the needs of the project and knowing what clients are looking for and why. That’s what starts the engine. Then everything comes once you have a client.
Providing solutions helps the relationship, and not selling what you want to sell but actually giving them the service that they are looking for.
Study the job. If I can take a metaphor, it’s you hunt the job, then you fix the job you hunt the prey, then you skin it and you eat it. Go and study the job, and you win the job from your competition, and when you’re doing the job, you do an excellent job, where the client feels like you were worth every penny. Intense studying of the job will always be rewarding, whether it’s on that very project or the next project, but you will be remembered.
That’s where the relationship starts. That’s what any business counts on relationships with clients and relationships with your employees and relationships with your peers and your colleague firms.
Q. How do you build employee relationships?
Cater to people’s needs. [For] people you want to retain, you want to make sure that whatever their issues are, you address them. If it’s just money, nobody makes enough money, and we understand that, but there are a lot of other things that go with it.
I’m a firm believer that when people change companies, they don’t really change companies, they just change managers. Company A is no different than Company B. If they had one set of issues at one company, they’ll have another set of issues at another company. If you understand that psyche, you can address those issues.
We don’t have a one-shoe-fits-all model. Address it on an individual basis. For instance, people can be paid overtime, or they can take time off. If there is a married woman who wants to spend time with her kids, she may prefer to take time off and go spend time with her kids.
Whereas, if there is a young guy, but he needs more money, he may be paid time-and-a-half on his overtime, so addressing the needs of the employees helps develop that relationship.
Q. How do you help employees build better relationships with clients and peers?
If someone wants to pass their initial exams, then we promote them to a project-engineer level, where they can see various disciplines of the project, how they’re put together and how well things are coming together.
From that point on, they move to the next phase, where they’re supervising other people, and that is the opportunity that they can develop relationships with their peers and their clients.
They would be given that next opportunity when the client starts to ask for them, and they want to be in the leadership role. When a client calls me and says, ‘I want to have Person X on this project,’ that tells me that Person X has reached the next level, and that’s the time when that person automatically is grown to that next level. If a client starts to ask for that person, that is a good clue-in that client maintenance is being taken care of by this individual, and this person is ready to be a project manager and be in that role.
That is the highest level he can get because, technically and financially, that individual is responsible for a project delivery system.
Q. How does promoting people from within help both clients and employees?
It sets a good example, and it gives a good insight to the staff that there is an opportunity within the company to grow, and it also helps the organization that it’s a home-grown person. They understand all the quirks.
Clients like that if somebody is promoted from inside because then it’s not a sales job. The thing that matters to us and has worked for us is we don’t do a quick sales job. A sale to us is when a client hires us because we found a solution to a problem for them.
HOW TO REACH: Bridgefarmer & Associates Inc., (972) 231-8800 or www.bridgefarmer.com
When she finished speaking, she invited anyone who wanted to sign up for the new plan to head back to the office and sign their name on the common area wall under the strategy. When you walk through that area, hundreds of signatures adorn the walls.
“You can have a strategy and set out goals and set out metrics, but if you don’t have accountability to hitting those goals and people truly taking ownership of their area, then it’s never going to come to fruition,” says Albanese, president and CEO of the company, which specializes in shipping critical freight.
The first step to getting people on board with your goals is to communicate the end destination.
“Think of it as going on a journey,” Albanese says. “If we say we’re going to go to Rome, then we all know we’re going to Rome — we can all plan to go to Rome, we can all pack for Rome, and we can all figure out how to get there. If we said Europe, and some people think we were going to Rome, and some people think we were going to England, and some people think we’re going to France, we’ve got people going in different directions. The idea is to get everyone to realize that we’re going to Rome, and that’s the destination in mind.”
Even when you communicate what the goal is, you’re going to encounter resistance to that plan. Albanese likes to include those people in the process and tries to get them “unhooking from the past and looking to the future.”
“To me, it’s involving people — showing them why it’s a great idea to go to Rome, and that England wasn’t a good place to go this time,” she says. “Show them what’s in it for them — that’s really important.”
After you’ve spoken with those people, if they still don’t want to get on board, recognize that it’s OK and part ways. With those who are left, you have to empower them to get there.
“If you can paint a picture of the future for people, and you can give them a good focal point on the destination in mind, then you don’t have to keep telling people what to do,” Albanese says. “They get it, so ... I don’t need to tell people how we’re going to get there — whether it’s by a car, by a truck, by a plane, by a boat. If they know where they’re going, people can figure that out.”
To make sure people know where they’re heading, Albanese encourages employees to boil the strategy down to what she calls the 30-second, elevator speech, meaning if someone asked about it in an elevator, you could tell them in that short time period what it meant to you.
“The only way you can really know is by asking people to talk about the strategy,” she says. “Tell me, what do you think the strategy means? What does it mean to you? How are you going to live it? What are you going to do within your job to help the strategy? If they can verbalize back to you what they’re going to do or what it means to them, then I believe they got it. If they can’t, that’s a problem, and we have to look at other ways to communicate it, or we haven’t been clear, and we have to find those things out.”
To make sure everyone can internalize the strategy, Albanese uses a variety of communication strategies.
“You have to communicate in many different ways,” she says. “My undergraduate degree is in education, and one of the things I learned a long time ago is some people learn by reading things, some by hearing things, some by seeing things.”
Albanese uses large meetings, small meetings, a magazine, weekly video messages and monthly sit-downs with a handful of employees, called “Visits with Virg.” Continuous communication helps educate employees, makes them feel part of the process and moves the company forward.
“When people don’t understand, and they haven’t had the communication, that’s where I see people going off the path and doing their own thing or becoming disengaged, and the longer you keep people in the loop, people want to be in the know. They want to know what’s going on, and they want to feel a part of it.”
HOW TO REACH: FedEx Custom Critical, customcritical.fedex.com
Michael B. Romano realizes it’s not enough to simply know where you’re heading in business.
As president and CEO of Associated Material Handling Industries Inc., he’s learned that everyone working under him also needs to know that direction because if everyone understands the ultimate goals, then they can work collectively to achieve them. He equates it to a basketball team where everyone plays a different position, but if everyone plays their position well, then the team wins.
To ensure equal playing time for his employees, he works with members of his management team to create a vision for the organization and then allows them to develop ways to achieve it. He says that if he mandated everything, nobody would care about those things. But by creating solutions themselves, employees are more inclined to get things done at the material handling storage company, which posted 2007 revenue of $117 million.
Smart Business spoke with Romano about how to effectively create a vision for your organization and get everyone playing on the same page.
Create a vision. You first have to look at what is the purpose of your organization. The vision should answer, ‘What is the need an organization is trying to address? How is your organization differentiated? What makes it unique?’ Then you should consider and address, ‘Who are the beneficiaries of what you do?’
There should be a purpose statement, which basically says what the organization seeks to accomplish, why does it exist, and then there should be an activity description — what exactly is the business? Many companies get sidetracked and get involved in unproductive activities because they’re working outside their core competencies because they haven’t truly defined what their business activity is.
Then, beyond that, the mission and vision should include and consider the cultural values that you find important and that you would like the organization to hold in common and endeavor to practice. That would begin to establish your culture.
The vision can be categorized in those three areas — the purpose, the business and the values. If someone thinks in terms of those three areas and answers some questions in those three areas, that’s when they start getting their hands around their future vision.
Revisit that vision. I and our organization must embrace our strategic planning process. It starts with setting a vision and mission for the organization. It then goes through evaluating the environment in which we operate, both internally and externally.
We do this every year, and then, based on opportunities that we feel we have in the marketplace or possible shortcomings, we develop initiatives that drive individual departments to develop their own goals and strategies to fulfill those.
Visit that every year and challenge it. We may tweak our mission statement based on things that we’re trying to stress. That’s actually done at the beginning of our planning process because we want to make sure that the plans we then develop the following year are allowing us to constantly work toward that vision that we’ve established.
Get buy-in. It’s not only my vision but the vision of executive management, and, if we’ve done it right, the vision shared by all employees.
The key is to make sure that everyone in the organization, from technician to general manager, are in the process, so they’re bought in to the process, they feel they have contributed to the development of the plan, and they fully understand their role in the execution and the success of the plan. That is fundamental to the whole empowerment.
We bring the planning process all the way down to the individual through the performance review process. The employee is reviewed every year on how they perform relative to their contribution to their department’s plan.
Every employee within a department knows not only the department plan but their role in it. At the end of the year, that’s ultimately how they’re judged.
It goes back to the buy-in. These are not top-driven. The vision is top-driven, but the rest of the plan, all the way down to the department level, is developed by those people, so that’s the key — their involvement.
Review employees. The employee performance review is simply an embodiment of that department’s goals and strategies, so when an employee looks at their review form, they see their department’s goals and strategies.
A manager is supposed to review all of those with them and agree as to what areas they’re going to be involved in. What is their role? Those areas are then marked as applicable, and that’s what the employee gets reviewed on the following year.
That employee review process is what creates the employee traction with the planning process because it forces the manager to review the goals and strategies for their department and to make sure the employee knows their role in the execution of the plan. You then let a good employee, who has the basic skills and capabilities, go out and do the job and make decisions and receive coaching and mentoring when they need it. ...
If they understand what they do [and] ... what their department contributes to the overall organization, all of a sudden, they feel a part of this. That’s what it’s all about — creating that inclusion-ary environment.HOW TO REACH: Associated Material Handling Industries Inc., www.associated-allied.net or (877) 628-9705.
Pam Sessions has been an entrepreneur and enjoyed working from an early age.
As a 7-year-old, she hosted mini carnivals, and by age 12, she was ordering candy as if she had a real store. She says she loved working and felt she was wired to do so because she enjoyed making people happy and providing them with something that they wanted and for which they were willing to pay.
That love for work and an entrepreneurial flare stayed with her as she and her husband, Don Donnelly, founded home-building company Hedgewood Properties in 1985. In 2006, the 70-employee company posted revenue of more than $100 million, and Sessions’ leadership as co-owner and president is being tested as the company faces the steep housing recession.
Smart Business spoke with Sessions about how to alleviate uncertainty when your company is facing tough economic times.
Communicate. What people fear the most is uncertainly. There’s such an important need to keep strong and consistent interaction and communication, so you don’t have uncertainty lead to rumors, lead to fear, lead to who knows what from there.
It’s humbling, and it’s important to be completely honest. Although we can’t give them certainty as to what the market will do, we can let them know the strategies, the effects and the impact, and not just talk at them but include them and get their feedback and opinions.
At the heart of how everyone listens is, ‘How does this affect me?’ Be sure that you’re speaking to them and you’re able to walk in their shoes and understand what their concerns are, what their uncertainties are and be confident. It’s so critical to be confident, to be courageous.
If you have self-confidence, you can instill it in others. It’s building partnerships and maximizing the energy. In times of uncertainty, leadership is even more important, so it’s not having all the answers and needing their input to make good decisions but still exhibiting confidence.
Hire great people. It’s times like these that highlight the quality and spirit of our people. You see clearly what your culture is about and the character of your company. It’s all about your people. It sounds trite, but it absolutely is the difference.
We look for more than just the job skills. It’s important to hire people with positive attitudes and creative thinkers.
We have a testing process that is behavior-driven for compatibility of that job and to help us understand how to bring out the best in that employee. We like to meet people’s family, if possible, because a job isn’t just a one-person factor it affects the whole family.
Then it’s just a matter of asking the questions that matter to you most and getting people to talk to you. ... Ask open-ended questions that enable people to open up.
When you hire people that share your philosophy, passions and principles, you are working within a trusting environment, and when you are in a respectful environment, all ships rise. Everyone learns that respect for each other is part of the culture. It definitely can provide a more trusting atmosphere.
Be in it for the long term. Make the commitment to a long vision. The decisions that are made short term are not always the most impactful.
Think about where you want to get and all the smaller impacts that are necessary to get you there. You have to hone down, refine and make as efficient as possible everything that you are today just to survive.
It’s important to not fall into the trap of being myopic. You have to stay in the broader world and be aware of what’s happening, changing trends, changing demographics, population trends everything that influences tipping points and social changes.
It’s not just about your business. Your business is interconnected with everything else that’s going on in the world, so it’s looking at that for logistical reasons but also for inspirational reasons.
Having a long-term focus helps you get through the day to day.
Solicit input. When you work in a participatory style, you’re working together, you’re communicating, and everyone has an important role in the process.
Don’t call a meeting to discuss things. You’re just out amongst your people all the time. You’re talking, and it’s casual and comfortable, so it’s not intimidating because you’re doing it all the time.
People still look to you, as the leader, to be the decision-maker, but they know their voice matters. They continue to give good advice and good consult because they know it does matter. They see that you’re taking in their input and understanding that perspective, and your decisions are influenced by that.
Do what’s right. Make those sound decisions to do what you believe to be right all the time, even in times of conflict, even times of temptation. Take that high road, do what is right and make good, sound decisions in that spirit. Just do right by people.
Leadership is over time I don’t think anyone is an instant leader. Over time, it’s those little pieces one happy customer, one great partnership, or one loyal employee, all of those things where you make decisions and little rewards add up to a successful business.
It’s that same commitment, even when there’s apparently nothing in it for you.
HOW TO REACH: Hedgewood Properties, (770) 889-3667 or www.hedgewood.com
“Despite being well-to-do and all that, the reason I admired him was he embodied the people focus of the business,” Choate says.
When Choate was 12, he began cutting Smith’s massive lawn. Some days he got more than a sweat-filled workout when Smith would come home for lunch and he and his wife would sit and talk with Choate.
“They would take time out of their day to talk to a 12-year-old kid, and then going forward with advice, with coaching and showed an interest,” Choate says. “I’ve never forgotten that.”
The care the couple showed made Choate continue working for them through his teenage years.
“I enjoyed learning from them,” Choate says. “He was a very successful businessperson who didn’t let it go to their head. So many people let it go to their head, and egos run amok. If you can be successful and yet keep grounded in what got you there and the people that got you there and faith in God, I think that’s what I admire most.”
Now as founder and president of Choate Construction Co., he tries to emulate the behavior he witnessed as a child and the care he experienced as a teen with his own people. He says that people are critical to success, so if he doesn’t get the right ones and then motivate them and respectfully help them improve, then they’ll become complacent. If that happens, then his business stops growing, so it’s crucial to maintain that people focus.
“Our No. 1 production units are human beings, our professionals,” Choate says. “You have to stay close to it.”
Hire the right people
Choate evaluates potential employees on a few characteristics. He obviously wants people with integrity, but he also wants candidates with solid people skills.
“Everyone is basically in sales because everyone is trying to get someone to do what they want them to do,” he says. “How good are they at persuasion? How good are they at getting people to want to help them?”
He also looks for people who have the ability to eventually make good decisions on their own and exude intelligence.
“Basic, innate intelligence means the capacity,” Choate says. “That doesn’t mean experience right off the bat, but intelligence is the capacity to learn and develop.”
On top of those, he wants people with experience. Despite knowing what he wants, actually evaluating these attributes can prove difficult.
“Anybody can look good in an interview,” Choate says. “They key is to just ask. We try to develop some intuitive questions that we can ask people and gauge their response.”
For example, he may ask questions surrounding personal ethics or those of the company, such as what the person would do upon receiving confidential information not intended for him or her or if he or she received a payment greater than necessary.
He also asks about hobbies, interests and passions to gauge the intensity of the response and the candidate’s verbal expression skills.
“After all, 90 percent of our success comes from the ability to communicate one’s message, need or request,” Choate says.
Despite background checks, psychological analysis and having multiple people interview, in the end, he says, it simply comes down to those little voices speaking to you in your head.
Once, when Choate was interviewing people for an assistant position, he thought one candidate was energetic, sharp and just excellent all around. Despite all this, something just seemed a little off with either the person’s character or sophistication level. Whatever that something was, he brushed it aside and told himself it was trivial.
“I brought the person on and wish I had given the little indication more credence than I did because it turned out to be true,” Choate says.
He says that many people brush off their gut instincts, but those are some of the most important feelings you should use when hiring people.
“Trust your instincts, and don’t just gloss over what seems an insignificant indication really analyze that and explore that a little further before you make that final decision,” Choate says.
If you truly can’t make a decision about how important a vibe is, have one or two other people also interview that person and get their input.
Throughout interviewing and the feelings you get about different candidates, Choate also advises to not move too quickly. By hiring the assistant he had a red flag about without fully exploring it, it cost him time in needing to hire someone else.
“Typically, a manager is looking to bring someone on because we’ve grown or are expanding, and we have a definite need, and, usually, that need is now,” Choate says. “The temptation is almost to want to subconsciously have that candidate be successful because that takes care of the immediate need. ... Don’t let that be the overriding influence. Even though it makes sense now, in the long haul, it’ll cost you.”
Motivate your team
When one of Choate’s managers came to him expressing that he was in a rut and needed to be invigorated, Choate knew he had to recommit to motivating his people to ignite the sparks in them.
“You have to keep people enthused and pumped up,” Choate says. “Otherwise you’re not going to get the maximum return.”
Enthusiasm starts with you. Choate passes along his excitement for his people by calling each of his 450 employees on their birthdays to wish them a good day.
While time-consuming, he says it’s an investment in them and sets an example for his managers.
“Show people what they have to do,” Choate says. “Enthusiasm is infectious. I’m a type A, and I like to go after things with as much gusto as I can, and I like my managers to do the same thing. You meet with people and talk to them, and they’re all different characters and personalities, so not everyone is going to be overtly excited and running through the walls. There’s quiet personalities, but even quiet personalities, in their own way, get pumped up and enthusiastic.”
One way to get people excited is to give them control of part of their destiny by providing a base salary and making part of their income tied to their performance. This incentivizes them to work harder to reach those additional financial rewards and shows them how their work affects the business.
“People realize their position, and they realize they’re of value to the company, and above all, that they’re proud of what they’re doing,” Choate says.
Beyond financial rewards, strive to create a family atmosphere. Instead of working to build one large team environment, Choate instead promotes smaller groups so that people can become closer and feel more connected to the people they’re around most.
“That develops a person-to-person relationship and just helps promote a sense of family,” Choate says.
Then these close-knit groups can plan social events or form recreational sports teams.
“That helps build teamwork and build relationships internally,” Choate says.
The more teamwork you have, the more productive your company will be.
Push for performance
Even with the best and most enthusiastic people, sometimes employees do things wrong, so it’s important to help them improve.
“If a person is a keeper, you want to help them develop and improve and excel,” Choate says. “Some of our best people, by far, are ones who may have, at one point in time in their development, struggled or hit a flat spot. By demonstrating our commitment that we want them to be successful, it’s amazing how it motivates them, inspires them, and now they’re some of our best production people. It’s really a people skill and an investment.”
Having metrics in place that are important to your business are a given. Beyond that, you have to know your employees.
“A manager simply has to invest time in that person, has to get to know that person,” Choate says. “Go to lunch with that person or visit them in the field. Spend time with that person. Talk to them. What do they like to do? ‘What did you do this weekend? What’s your pet peeve on a project or job or position? How do you see things? What do you think we can do better?’”
Knowing your employees helps you communicate with them in the most effective manner.
“Everyone has to be treated very specially,” Choate says. “Everyone has to be treated on a custom basis and addressed on a custom basis because which buttons you push or how you do it can be very productive or extremely counterproductive if it’s not done the right way. It just all depends on the individual. There’s no magic there. You just got to know the person.”
While people respond in different ways, one thing that shouldn’t be different from person to person is how you communicate your message.
Choate was once alarmed to overhear a manager speaking in a demeaning tone to a subcontractor on the phone.
“I told our manager, ‘This guy isn’t going to make it. He has to realize that whoever he’s talking to isn’t going to be motivated to make a change or please this guy,’” Choate says. “It’s important that you do it in a proper way so people understand the benefits of it, and you don’t alienate the person and their push back is not there.”
When communicating problems, speak firmly, yet calmly and clearly, and avoid raising your voice. Doing this ensures you don’t speak down to someone.
“Address deficiencies straightforward and without any reticence,” Choate says. “You can hone any knife sharper, so there’s always ways to improve yourself as well as others, so when someone is not performing, you address it clearly, you outline it, you structure it. Say, ‘Here was the expectation, the requirement. Here is where it didn’t occur, and here are the results of the nonperformance or the noncompliance.’ Then you illustrate what that does, whether it’s an economic loss or a reputation loss or whatever the impact was.”
Doing these things to help employees improve helps them buy in to your ideas and trust you as a leader.
“Treat that person with respect and that transfers,” Choate says. “In any leadership position, there has to be an inherent sense of humility. I think anybody that thinks, ‘I got here all because of what I did,’ is a person pretty much delusional or misled. Anyone has been successful because he helped put together a team, but the team as a group is what made the group successful, so humility is very important.”
Choate keeps that humility and team focus at the forefront of his thoughts. Despite starting the company himself from his basement 19 years ago, Choate is quick to note his team has gotten him to the $675 million in 2006 revenue and the projected $850 million in revenue for 2007. And as long as they collectively stay motivated and maintain a sense of urgency by not settling for the status quo, those numbers will continue
“You can spend all the money you want on computers and back-hoes and systems, but if you don’t have people out there leading the charge, you’re not going to be successful.”
HOW TO REACH: Choate Construction Co., (678) 892-1200 or www.choateco.com
When Mike Hislop’s famous guitarist friend wanted to celebrate one night, Hislop offered to make him a reservation at the restaurant where he was working. The guitarist said that was fine as long as Hislop got him seated in a certain server’s section. He said that the server was teaching him about cabernets, and he didn’t want to upset the man by sitting in another section. The multimillionaire’s loyalty to a restaurant server made an impression on Hislop, and today, as CEO of Corner Bakery Cafe a $200 million fast-casual restaurant chain he seeks to earn that same kind of loyalty.
Smart Business spoke with Hislop about how he finds the right personalities for the job and how to get employees to embrace change.
Hire great people. The way you grow is people. Have the right people. We have the economic model. We have the concept. Now we can be choosy about who we’re going to bring in, in the future.
When you end up losing managers, you usually end up losing employees.
So how do we hire the right managers? When you’re going through the interview and looking at the kind of experience that they’ve had, do they enjoy working with people? It’s real easy to get at the core of an individual in an interview.
You ask them certain questions. Do they have fun? When you’re asking them to describe their personality and style, you can find out real quick. Are they going to come in dressed and ready to go? Are they smiling? They go through three of those interviews. They start with the assistant manager, move to the manager and then get to the general manager. By then you have a real good idea, and you can tell them a lot about what the expectations are.
Empower managers to hire good people. We have the best manuals and training programs, but you really need to have that personality, starting with management to make sure they’re going to hire the right people. Once you get a person who can smile and really does honestly care about people, it’s real easy to train them.
When you get the right personality it really meshes together. You will see the sales grow.
We’re training our managers exactly what to look for not just questionnaires. We’re looking for personalities. When they come in, do they naturally smile? Do they naturally have that caring attitude that we have? We talk to them about building relationships how are you going to be able to build those relationships?
If someone is coming back every day, how do they like their coffee? Trying to remember their names. People love to be recognized when they come in. When they build the relationships, they’re going to come back more often, and that’s what drives the economic model and allows everyone to make money and grow together within the culture.
Embrace change. It’s making sure you have a culture around and that senior management realizes that, ‘Hey, part of our culture is we’re going to evolve this brand and make sure that we’re going to be on top of research to make that happen every year.’
Go out and talk to your people. If you have a culture that’s been doing it the same way forever, and maybe it’s been good and maybe it’s been OK, you’ve got to go out and just meet with them. Start with your senior management and get buy-in that, ‘Hey, this is how we’ve been doing it, and I think these are some changes.’
You have to be a good listener. As a leader, go out and ask the tough questions, and then really listen to the answers. Some of the people, you’d think they would be afraid to talk to the CEO they’re not afraid to talk to you at all.
Encourage new ideas. Create a culture where people aren’t afraid to speak up respectively and then leave that meeting and all be on the same page. Create an atmosphere where people aren’t afraid to ask questions.
Say, ‘That is a great question, and I don’t know why we do it that way. Maybe we can do it a little bit better.’ There’s nothing worse than being ‘yes’-ed in a middle of a meeting. Some leaders might like that, but I definitely do not. I don’t think you can be successful unless you can create an environment where people aren’t afraid to speak up and let you know some of their ideas.
Be ready to try a few things. You can’t say, ‘This is it.’ You have to go out there and test out some new ideas. You want your leaders, whether it’s general managers or corporate support, to be thinking of ways to make this brand better and knowing if they get a good idea that it’ll be something that we go out and try.
When I was at Il Fornaio [which acquired Corner Bakery in 2005], we had a couple of guys who thought the bar needed some change. The older people said no, but we ended up putting in a whole new bar, and the bar’s doing about 40 percent sales versus about 25. We go back to that guy and said, ‘You nailed it on this one. It was a brilliant idea.’
HOW TO REACH: Corner Bakery Cafe, (800) 309-4642 or www.cornerbakerycafe.com
In the early part of the decade, the senior leaders at Novelis Corp. weren’t occupied with brainstorming creative approaches to manufacturing in their aluminum rolled products and aluminum can recycling business. Instead, they were focused on environmental, health and safety initiatives, and continuous improvement based on lean Six Sigma. Despite this focus on other initiatives, one of their other focal points — value-based management — gave them a reason to spend more time brainstorming creativity in their manufacturing processes.
Without any best practices in place, Novelis had the opportunity to address and correct the problems that prevented innovation. Among the issues was not knowing who was responsible for innovation beyond the research and development and marketing departments. It also lacked structure for collecting ideas and a reward system for the ideas it did find. Novelis also didn’t have a review process for ideas or any resources to go to.
To tackle these issues, the company developed an innovation council. The council, which meets quarterly, consisted of the president/chief operating officer, business group presidents and designees, and leaders in corporate marketing, research and technology, and business planning.
Michael Thomas, director of global technology and R&D, and Roy Stever, vice president, global strategic marketing, then became the architects of an innovative management and execution system that could input data, capture information, update action plans, communicate and measure progress on projects, and review ideas. This new system, which was implemented by Novelis North America President Kevin Greenawalt, has helped keep everyone internally engaged and up to date. Additionally, a year ago, it launched a center designed to specifically promote creativity throughout the organization.
On top of these new programs, Novelis has clearly defined that each of its nearly 13,000 employees is responsible for innovation. Leadership has created a formal recognition process for creativity by adding an innovation category to its annual awards program.
With formal programs and processes now in place, Novelis continues to strive for more innovative approaches to operating. With ongoing communication and a constant focus, this $9.8 billion company is sure to reach even higher heights in the years to come.
HOW TO REACH: Novelis Corp., www.novelis.com or (440) 423-6600
When Greg Boyd’s ERGEnterprise Resource Group merged with MIS Group in 2006, he became president of the rapidly growing combined group, going from 55 employees to 163. With that kind of growth, it’s easy to become overwhelmed and frustrated, but Boyd has successfully managed the growth at the $17 million software and information technology services provider.
Smart Business spoke with Boyd about how he uses communication to eliminate surprises and how he gets buyin at a company in flux.
Q: How do you successfully lead changes in an organization?
Change really revolves around people, process and technology. It’s setting the right expectations. Set the communication in place so everybody is on the same page to understand that. As long as they know what’s coming without surprises, I think you can manage change a lot better. It’s the surprises that people don’t like.
Some things happen that are unexpected, and obviously, you can’t control everything, but try to set those expectations as far ahead of time as you can, and prepare people that these things are happening. In our case, we did four acquisitions last year, so it’s a matter of communicating with the organization, ‘Look, these things are happening.
These things are going to happen in the future. It’s part of who we are as a company. It’s part of our growth strategy that there will be acquisitions, so that means there will be new people coming and there will be processes that are changing as a result of that.’
There’s always some chaos involved with change, so setting that expectation upfront is critical so that people aren’t just blind-sided by what’s going on. If you weren’t sharing those things ahead of time, then all of a sudden, out of the blue, you come in and say, ‘We just picked up 100 more people, and this is what’s going to happen to your job tomorrow.’ That catches people more off guard than being able to say, ‘This is coming; this is what’s happening.’ You can kind of be prepared for it, attitudewise, to deal with it.
Q: You mentioned that processes change, as well. How do you deal with those changes?
Each year, it’s like you’re a new company. That can frustrate people that aren’t expecting that, but when you’re an organization of 10 versus an organization of 50 versus an organization of 200, there’s just different systems and different processes that have to be in place to accommodate scaling an organization to the next level.
Sometimes, those things are almost harder because people are like, ‘This is how I do my job; this is how the system works,’ but when you have system changes going on continually to support the efforts and methodologies of the companies, those are hard things. All these changes are happening, and it’s affecting everyone, and trying to keep the airplane flying with the wings on fire. You’re trying to change the wings but keep the plane in the air so it doesn’t crash.
Q: How do you get buy-in for those changes and make sure people really understand them?
Communicate calmly and often. Communication and expectations are two big things to be focused on. It’s just setting the expectations so they know what’s coming, and if you’re going to miss deadlines or dates, make sure you communicate those so people at least have an idea what’s going on.
One of the things we started working on is, what are the top three things we should be working on? That starts at the top and works all the way through the organization, so everyone can stay focused on those things. Sometimes those priorities change depending on the direction we’re going. Sometimes crises do come up, and you have to change those priorities in the process.
There has to be communication all the way down to the employee level on a regular basis. Coaching is a big part of that and having metrics for everybody and objectives so they know what to expect How am I being measured on my performance, and how am I performing? And being able to talk about those things on a regular basis.
That’s the time when you’re having those discussions and you’re talking about the vision, and how does what I’m doing as an employee really impact the vision overall and this is what my contribution is to the organization. Once they make that tie-in, it goes from just being ‘in one ear, out the other’ to, ‘I’m really making a difference in the company.’
Ultimately, it gets down to communicating those things and having that collaboration and dialogue all the way down to the team level so people know their expectations and, ‘Have I met those expectations, what are my future expectations going to be, and how am I making a difference in the company?’
HOW TO REACH: MIS Group, www.misgroupusa.com (800) 454-0993