As The Wistar Institute has grown in size and complexity, it has outgrown its old management processes. President and CEO Russel Kaufman was overseeing a loose command structure with overlapping job assignments, which was fine for a smaller organization, but as the biomedical research center grew to $76 million in 2010 revenue, the lack of structure was leading to a lack of direction for its associates.
Kaufman saw that the old management system simply wasn’t going to work anymore, and the problem was only going to get worse as Wistar kept growing. So he and his leadership team set about remaking the organization to not only allow it to adjust to its current growth rate but accommodate future growth, as well.
Smart Business spoke with Kaufman about how to rebuild your company’s management structure.
What were the steps involved?
In this new model, I have one person in charge of science and one person in charge of administration. And having this structure where you put all this management under one person, it can be threatening to a lot of people. All of these people who had managed in the matrix felt like they had a group of loyal people who had reported to them, but now there is a new leader that everyone reports to on the administration side. Those internal loyalties they built up now won’t be as effective.
So it has been managing this process of getting all of our employees to understand that they should be loyal to the organization, not loyal to a leader. It is a very important concept, and one that we’re going to have to continue to work hard on.
That was the administrative side. The other step was to name a cancer center director, who became our scientific leader. I recruited that person, and now I have to transition authority to that person. The challenge was that I worked with many of our scientists for many years, and they’re used to coming to me with their problems. Now, we have a new leader, and it’s defining that person’s authority, defining that person’s responsibility, and making sure everyone knows what those roles are.
How have you ensured that people know their roles?
The approach we’ve taken is what I call clearing out space. In activities I’ve previously led, we still have those meetings, but I no longer participate. The new cancer center director has to take charge, and those meetings are a statement of the person who is in charge. We’re still working on it, but most organizations will go through these kinds of problems when they’ve had a leadership structure that is a loose matrix, and they have to put one person in charge of a new area.
Maybe people have worked with me and are comfortable with me, and I’m still here, but not in that capacity. If I went to the Moon for a year, it would fast track this process, because I wouldn’t be here. The new leader would be forced to make decisions, and everyone would be forced to go to him. As it is, if they come to me, I re-direct them to the leader of that area.
How do you train people to start accepting the new structure?
The way you do it is you look at benchmarks and gaps. You look at internal and external benchmarks, and then you look for gaps where you can improve. What we’re about to do is undertake a SWOT (strengths, weaknesses, opportunities and threats) analysis so that we can find the areas where we can be the most effective to close these gaps and improve our performance. I think that if you can get a group of people and really take a formal approach, do a formal SWOT analysis using formal group processes, and then aligning that with the institutional goals, you can make a lot of progress. You can take this organization that might be ossified, and really disrupt it, in a way, because people then start seeing results in front of them.
If I ask each of my departments to judge themselves, to look at what they’re doing, they’ll give me a list of what they’re doing and how well they do it. But the issue isn’t really how well they’re doing it, or whether those things are valuable or not. To me, the bigger issue is how do they fit into the bigger structure of the organization. Do they advance the organization through collaboration?
How to reach: The Wistar Institute, (215) 898-3700 or www.wistar.org
With unemployment levels still high, it remains a buyer’s market when it comes to talent.
But Lisa Varga says that’s not the whole story. The founder, chairman and CEO of Phoenix Energy Technologies says you might be able to find talented individuals in the stack of resumes on your HR director’s desk. But finding the right talent — the right mix of skills and values that match your company’s mission — can become more of a challenge.
At her growing 41-employee company, Varga and her staff have needed to get creative and methodical when it comes to getting the best possible candidates in the door and sifting through them to find the right person for each open position.
Smart Business spoke with Varga about how to move from merely hiring to building a cohesive team of players who complement each other’s skill sets and share common values.
What is the biggest recruitment challenge you have faced at Phoenix Energy Technologies, and how have you overcome it?
The biggest challenge is we’re a growing firm with many positions to be filled, and we need to find qualified individuals to fill those seats and help execute on our plan. Many positions you’d think would be easier to fill with the unemployment rate where it is, but the percentages of the unemployable are something to consider, because they’re not just sitting out there knocking on your door.
So we’ve had to get creative with overcoming the challenge, particularly in the technology area, with the seats that we needed to fill — not only using recruiters but trying to get feedback from the individuals of quality that we were finding and how do you infiltrate their network. It’s almost like you’re interviewing the people in those fields and trying to figure out where they’re looking for new opportunities.
What did you learn from that experience about recruiting?
Definitely, you have to give yourself the proper ramp-up time to get those positions filled. And make sure you have a good, solid story, because you’re pretty much conducting a sales pitch to those individuals, selling them on your company. So you want to get your marketing team involved in putting some excitement into an ad for your positions that are open.
On my end, I try to get people excited about coming to work here by being as accessible as possible. I constantly engage our employees at all levels to make sure they know our successes and our vision, and let them share in the celebrations and wins we do accomplish. That is key for keeping everyone aligned and motivated and excited about what we’re doing.
As you go through the recruiting and interviewing process, how are you ensuring that you’re finding the right match?
It can be tough, but we have a multitiered interviewing process for every position in the company, and we have one person from our HR department who is in every interview, so that we are consistent in certain values. I think we are a very family-oriented company, and it is always good to see people who have a good, solid family life. It is good to see people who are used to working in fast-paced environments but are able to leave that behind at the end of the day and transition into their family life.
What questions do you ask of someone to determine if they’re going to be a cultural fit?
We want to know their likes and dislikes, what excites them, what drives them, what did they like to get involved in at the companies they worked at previously.
Some people like to be very strategic, some like to be very tactical, so we try to ask many different kinds of questions. Where do they see themselves in the future? Are they someone that likes to get in a position and just stay there forever? Or are they a growth-opportunity person? Do they multitask well? How do they do in serving different scenarios?
Do you recruit first for the technical skills of a job or for a cultural fit?
They have to have the basic skill sets for the position. If they’re a programmer, they have to have certain technology applications that they’re able to do. But we actually weight it heavily on the cultural fit.
Years ago, we tried to hire people who were familiar with our processes, but we realized that it was just as easy to take someone with the core basic skill sets, values and cultural principles, and teach them our processes. That has helped us with retention and growth in those areas. So there is a lot of weight we place on culture.
How to reach: Phoenix Energy Technologies Corp., (877) 340-8855 or www.phoenixet.com
Dean Friedman remembers one client in particular:
“It was a 35-store chain of restaurants that had a really difficult time building a database and creating an opportunity to have a rewards program,” says the CEO of Real Integrated, an advertising and marketing firm with $28 million in media billings last year. “One of our younger people came up with the idea for an opportunity in this space, and we grew a database from under 4,000 to approximately 27,000 Facebook friends, which is now driving that restaurant’s business through weekly offers.”
It’s not the traditional way that marketing and ad agencies have done business, but it’s example of the need to keep your eyes focused on the horizon when running a business. As technology has become more prevalent as a mass-marketing tool, Friedman and his staff have found it necessary to not only implement new technology, but find more creative ways to use it, constructing customized solutions to meet client needs.
“We’re a traditional agency, and had been for 50 years, the last 20 of which I’ve overseen,” Friedman says. “We’re really good at what we do, we have a fabulous product, and people perceive us as a great local agency. But what wasn’t being perceived was all the digital efforts we had been making. As the transformation has been occurring in the whole media marketing world, we have evolved.”
To build an organization that can take advantage of new opportunities, you need to build an open culture in which the employees that spot new opportunities are empowered to bring them to management for consideration. As it pertains to technology in particular, Friedman says that means you need to give a voice to your technology-savvy team members.
“One of the great things I’m learning throughout all of this is to take advantage of youth,” Friedman says. “I’m 59, and I don’t have all the answers. A lot of people in my organization have more answers than me, and are on the front lines more than I am. So my greatest advice is to keep an open mind and listen to everyone. As we’ve listened to our people, we’ve developed and refined our forward-thinking mindset.”
John Ozdych, the firm’s president and creative director, encourages dialogue throughout all levels of Real Integrated, helping to promote an atmosphere where there are no bad ideas and change is viewed as progression, as opposed to upsetting the apple cart.
“Everyone has to be agents for change, stewards of change and technology,” Ozdych says. “They have to be looking across the Web, combing through what is out there and bringing it back to the agency. If a new technology has been introduced out there, we’ll ask which of our clients could benefit from this solution, and we’ll also invite our clients to show other clients what we’ve been doing for their business. So it keeps going back to having that open dialogue throughout the business.”
Getting your employees to think ahead is critical, but clients and customers also need to look at what’s next. Your employees provide your services to customers, but the customers are the end users.
“What I believe is happening, and what is critical in all of this is that our clients are realizing that not every idea has to come from the CEO, or the president of the client company. Instead, ideas can come from anyone internally. The ideas bubble up now. I don’t care where the ideas come from and neither do our clients. We want to keep building a culture where everyone can have an idea or a suggestion.”
How to reach: Real Integrated, (248) 540-0660 or www.realintegrated.com
Forward-thinking companies don’t just look to the future for their own benefit. Sometimes, they’re able to bring a client along for the ride, and open the client’s eyes to new ideas.
Bill Eubanks is in charge of co-op services for Real Integrated, and has a marketing relationship with Kentucky Fried Chicken that goes back to 1979. KFC has historically been extremely old-school when it comes to marketing practices.
“If there is anything I know, it’s that KFC has a plan that is exceedingly traditional in its approach to the business,” Eubanks says. “But as an agency, what has given us added juice is the way we’ve structured things here, the partnerships we’ve created with vendors on the leading edge, to begin to offer a traditional client very nontraditional ideas.”
Real Integrated recently developed a website called MyLocalKFC.com, in which KFC store operators can promote their businesses in a manner specific to the locale. KFC operators weren’t used to it, but the new concept has started to gain traction as store owners have seen the value in it.
“That’s the kind of thing we weren’t doing recently, until we really started to emphasize the way we communicate internally and the partnerships we’ve created with leading-edge vendors,” Eubanks says.
Crime doesn’t pay. Protection from crime, on the other hand, has paid off in a big way for AlliedBarton Security Services LLC.
The 55,000-employee company bucked the downward trend during the recession, growing from 2006 revenue of $1.2 billion to 2010 revenue of $1.7 billion. Chairman, president and CEO Bill Whitmore attributes the growth to a selective, informed approach to business, along with a dusting of opportunism.
“The good news for our industry is that during an economic downturn, there is a focus on crime,” Whitmore says. “There is a concern with protection, a concern with preventing workplace violence. Those things still exist, and a company like ours is here to fill that need.”
The seeds for AlliedBarton’s winning approach to business in a recession were planted in 2007 and 2008, when Whitmore and his team formulated a strategic plan. Whitmore’s team didn’t know the depths to which the economy would sink, but they controlled what they were able to control — the markets they decided to pursue and how they reacted to whatever the markets and the economy, threw at them.
“When we sat down and wrote the plan, we saw a couple of things that we believed would happen,” Whitmore says. “One is that contracts in our industry would be consolidated. They were, and we put together a national accounts team that works with customers embarking on initiatives. That program didn’t exist in 2007, and now it is roughly $400 million of our run rate. The strongest pipeline we have in our company is for those clients that are looking to consolidate.”
To make a strategic plan strong and accurate, you need alignment. That means you need your plan to fall in line with the vision and cultural values you promote as a company, and you need a team that is willing to embrace those values and work toward the goals outline in your strategic plan.
It’s a task that requires you to be equal parts cheerleader, lookout and air traffic controller.
Get focused on goals
Every item in the AlliedBarton strategic plan is tied to a goal, which in turn ramps onto the overarching goal of the organization, which is to protect the people, property and assets of clients.
With goals ramping upward, the responsibility for achieving the goals has to be communicated downward and tied to goals and incentives that directly impact each of the 55,000 AlliedBarton associates around the country.
“Goals get translated into an annual performance plan, goals get translated into compensation metrics as basic as performance planning documentation for individuals, which is then cascaded into the company,” Whitmore says. “Then we sit down and measure people on how they did against those goals and how well we did as an organization. That’s the accountability part, that we hold people accountable for doing it.
It’s a mentality that is shaped by management from an employee’s first day on the job. From the beginning of the first day, employees are schooled in the company’s goals, strategy and values. They are given a copy of the company’s cultural primer, “Dare to be Great.” The booklet is often referenced by Whitmore in conversation, and employees are expected to know its contents.
With “Dare to be Great” providing the template and Whitmore providing the guiding hand and reinforcement, the culture of accountability has taken root throughout the expansive AlliedBarton footprint.
“The one thing I’m very pleased with is we’ve had a number of examples in the last few years where people in our markets would kind of light up in various ways,” he says. “They would say to us, at the account level and regional offices, that there is a leader who is not living up to the standards that we as a company expect. We expect more out of our leaders than this, and we know that you on the corporate level do as well.”
If an employee, particularly on the management level, is not knowledgeable about the goals and values of the company, their technical competency matters less. Technical skills can be learned, and in management-level positions, is often a job prerequisite. Values and a willingness to work as part of a team toward common goals are far more innate to each person.
“Anyone can learn the software and technology of the job, but you want people to lead,” Whitmore says. “I was interviewing a woman for a senior position recently, and I brought the ‘Dare to be Great’ book with me. I showed her what we’re all about, what we’re hiring for. She had the technical skills, we was a seasoned executive, but I told her if she doesn’t believe in what is in this book, don’t come with us. You have to reflect on whether this is in your heart.”
Continue the challenge
Employees stay motivated to strive for goals when they are constantly challenged by management to test the boundaries of their capabilities. It’s something Whitmore has kept in mind as he has continued to fashion a future direction for AlliedBarton.
“One thing I always try to be clear about is that ‘Dare to be Great’ is exactly what it says,” Whitmore says. “I’m daring you to do something great. I’ve had competitors say to me, ‘You guys think you’re great,’ but that’s not the idea. We’re the first to admit that we’re not perfect. With 55,000 employees, not all of them does the right thing or gives 100 percent every day. It’s about challenging everyone in the organization to be great.”
Whitmore says that mindset should be at the core of every leader’s thinking, if a company is to stand any chance of growing and thriving.
“It is at the core of everything we do in leadership,” he says. “You walk in every day and say to your employees, ‘I want us to be better and better.’ I’ve been here a long time, and I come to work every day trying to think of ways that we can better this business today. What can we do differently? What new thing can we try? How can we enhance what we do? And that’s generally the feedback we get from our clients, as well — that our managers come to work each day asking how we can improve our service, better improve and develop our security officers.
“It’s fundamental. I don’t care if you’re running a single McDonald’s restaurant or General Electric. You have to come to work every day and challenge your folks to do better.”
Developing a culture of continuous improvement is so integral to the process of strategic planning, Whitmore says he has trouble separating the two when it comes to explaining how AlliedBarton does business. Without driven, motivated employees, your strategy will never bear fruit. Without a strategy as a structure, your employees will have nothing on which to focus their efforts.
“It’s just at the core of everything we do,” he says. “In order for us to meet our goals, in order for us to build our business, none of it is going to happen without the desired culture in place. You can say you’re going to be anything you want. Without the culture for it, you just can’t do it. We could just work on selling contracts and making money. But one of the reasons you see us going from a small regional company 10 or 11 years ago to where we are today is our belief that the financial results will happen if you do all the other things well.”
To point your company in a given strategic and cultural direction, you need raw materials in the form of good people.
Finding the right people for the job at AlliedBarton — regardless of what the job is — means finding people who have a high emotional IQ.
If your IQ is a measurement of your capacity for head knowledge, your emotional IQ is a more ambiguous measurement that takes the temperature of your softer, people-oriented skills and traits.
“We mean people who are good at dealing with individuals, who are willing to take responsibility, who are oriented around growth and can make a connection with people,” Whitmore says. “People who can show leadership skills.”
Whitmore and his leadership team promote teamwork and attempt to heighten the collective emotional IQ throughout AlliedBarton through the company’s training and continuing education programs, where leaders emphasize the concept of building a collaborative culture around the company’s strategic goals.
“Sometimes I get complaints because we have too many people working on different projects,” Whitmore says. “But I like it because it’s what drives our culture. We have a class here called ‘212,’ which is a reference to the Fahrenheit temperature at which water boils. I once went around asking people how long they had been coming to the classes, expecting them to talk in terms of weeks and months. But one person had been going for five years. The person was a former operator who had moved over to the sales side, and one of the reasons they kept coming back was the number of people who stepped up and volunteered to guide and advise.
“Those are the types of things that become voluntary when they become a trait of your culture.”
Whitmore likes large numbers of people working together on projects because he feels it is critical to the culture to have people in different disciplines and locations working together toward common goals and developing a mutual understanding of what is happening in the departments and locations of their project-mates.
“You get interdisciplinary groups of people working together on projects, processes and initiatives, and that breaks down the silos that can develop in an organization,” Whitmore says. “But I’m not going to kid you, it’s work to do that. You get someone who works in, say, El Paso, and because of what they do, they get very inner-focused. It is something we have to work on all the time, because if we let that go, everything else won’t work as well.
“It’s all because in any business culture, the number one thing — and it’s been said over and over again — is teamwork. If your company is made up of leaders who can work together for a common cause, and who are there for each other in good times and bad, I think those are the companies that survive.”
How to reach: AlliedBarton Security Services LLC, (484) 351-1300 or www.alliedbarton.com
The Whitmore file
Born: King of Prussia, Pa.
Education: Bachelor’s degree in business, Philadelphia University
What is the best business lesson you’ve learned?
Be curious. The world is changing, so don’t get tied into what you do every day. Ask why people do things a certain way. As part of that, do a lot of reading and keep yourself intellectually stimulated.
What traits or skills are essential for a business leader?
Integrity, honesty and being highly communicative. And do what you said you would do — walk the talk.
What is your definition of success?
I think if we meet all of our plans, then it is a win-win-win for customers, employees and shareholders. That is what I define as a success.
A while back, there was a problem with the chicken breast at Johnny Rockets.
“It didn’t cover the whole bun correctly,” says John Fuller, president and CEO of The Johnny Rockets Group Inc.
It’s not unusual for a restaurant chain that specializes in burgers and sandwiches to have some issues like that. With nearly 300 locations around the world, Fuller and his staff are constantly tinkering and adjusting in an effort to keep the food, service and atmosphere at every Johnny Rockets consistent.
The real story is how Fuller achieves that consistency. It’s not through top-down mandates. It’s from the restaurant level, as Fuller frequently seeks input from franchisees and company-owned store operators on how the entire chain can do things just a little better.
To improve the chicken breast, Fuller went into the field — as he does once every few weeks — and started talking to the people on the front lines.
“We talked about different ways to cook it, or the possibility of going with a different product,” Fuller says. “Do we change the cooking style or try some other things? Through that process, we’re going out and asking our franchisees for input. Certain franchisees will test some different things. Then we’ll come back and look at what had a positive reception, we’ll work it through other restaurants, and we’ll come back and share the data. Based on that feedback, we’ll come back and try to make a final decision.”
In some ways, it might be easier for Fuller to simply tell store operators what to do and how problems should be solved. But Fuller believes the best ideas often come from the people who interact with customers each day. He believes that, as a company leader, you should leverage the brainpower and experience of your people to drive the company forward.
Fuller — who has a finance background and also serves as the company’s CFO — views his job as one of support. If you want to adequately support your employees, you should be prepared to enforce standards, coordinate resources and ensure that the people who have expertise in your field have whatever they need to perform their jobs at an optimum level, no matter where they are in the system. It’s an approach that helped Johnny Rockets generate approximately $300 million in revenue last year.
Focus on people
With a background in finance, Fuller is used to managing by the numbers. Numbers are important. You can’t lead a business without knowing where you stand in regard to your key metrics. But in his time at the top of Johnny Rockets, Fuller has learned that you can’t afford to let metrics get in the way of people.
“I have worked at other companies in the past where a lot of the systems the people in the field used to report information to the accounting department were done to make the accounting department’s job easier but were kind of onerous to implement in the field,” Fuller says. “It was kind of the accounting tail wagging the operations dog. That’s why I think it’s important that everyone understands who their customer is and how to provide service to them.”
Fuller has long held a belief that the more that leaders are able to talk to the people they lead, the better the result for the entire organization. If you deal with reports and spreadsheets first and your people second, your business will suffer.
“More district manager and general manager time on the floor is what we should be striving for,” Fuller says. “If they’re spending more time doing administrative stuff, more time crunching numbers and generating reports, then we in corporate have failed them as a support center. Because the more time they’re on the floor interacting with guests, you can’t help but improve the experience that way. Providing a great customer-guest experience and giving customers a reason to come back, is our whole reason for being.”
That’s why Fuller gets new members of management in a customer-focused frame of mind from the get-go. Each new management-level team member at Johnny Rockets has to spend a week in a restaurant, serving in various capacities. The assignment allows new managers and executives the opportunity to see operations through the eyes of their new subordinates. It also allows them to have direct contact with customers and gain a feel for what they expect from a trip to Johnny Rockets.
“If you’re going to provide support to employees, you have to see what their needs are,” Fuller says. “Don’t guess what their needs are, go out there, talk to them and ask them. Feel it and live it. Don’t lose sight of the fact that, in business, it comes down to the customer interaction. So you always have to know what it is you do, and what you can do better in terms of providing guidance and support.”
Be the culture
Fuller has a few other reasons why he wants new ideas, policies and procedures to well up from within the Johnny Rockets organization — namely, what and where. As in, what are the circumstances surrounding a particular location, and where is the restaurant located?
With several hundred locations and untold miles separating all of them, not every restaurant has the same local resources or the same needs. That means in order to maintain consistency, Fuller has to relate the Johnny Rockets culture in a way that makes sense for each audience in each location.
It could be in words or it could be in actions, such as finding common solutions to the same problem.
“One current issue we have is that we’re changing our music,” Fuller says. “Depending on what music system you have, we have to provide three different solutions. It’s knowing what each of our restaurants have and what that particular item is. Each restaurant is not set up the same way, so you can’t be foolish enough to start mandating things without understanding the implications on all sides.”
Fuller wants to hear about what matters to each restaurant operator, what would allow them and their staffs to work at an optimum level. But he still has to maintain standards that allow all locations to stay true to the Johnny Rockets brand.
It’s a fence Fuller has to walk between brand recognition and embracing a culture that allows a certain degree of flexibility so that store operators can tailor their offerings to meet the needs of the specific market.
“I’m not necessarily interested if they all want to serve pizza and wraps, things that are inconsistent with what we want to be as a restaurant,” he says. “We’re burgers, shakes and fries. If you want to move into something that is radically different, go open your own restaurant. However, if someone wants to try serving different kinds of soups at a location in the Northeast during the winter, go ahead and try it and see what you have. Come back and let me know if it’s something that we could leverage throughout the rest of the chain. Ultimately, you just have to make sure they’re focusing on things that are consistent with the brand and the company. We do it on a case-by-case basis.”
Fuller views a CEO’s role as someone who sets firm boundaries, but leaves enough space between the boundaries to allow for ideas and innovation — and encourages team members to move freely within the boundary space.
“You have to give your people opportunities and enable them,” he says. “I’m not going to micromanage someone who is doing their job right. I’m going to enable them and allow them to do things within the guidelines and mandates that have been laid out. We have a very good flow of communication going back to our franchise support center, and try to be very transparent within the organization as far as where we’re at, where we need to be better and where our challenges are.”
As the head of the company, the key to promoting the culture is to relate it to each employee. You need to show employees how their daily tasks allow the company to strengthen its brand, reach for its goals and remain profitable.
“You have to emphasize to everyone how they can be a key member of the organization,” Fuller says. “You have to show them what role they play and how they play it. To me, it’s reporting back through financial results and tying those results to their specific role, showing how they impact those results. You emphasize how they have made a difference, and how they can make more of a difference.”
Find the right people
In order to build a solid support system for your organization, the responsibility lies not just with the corporate management providing the support. It is also the responsibility of the employees to take the logistical, financial and cultural support that you offer and turn it into something that advances the company. You need team members who are willing and able to take advantage of the support system to better themselves and the company.
That means finding the right people who not only bring the talents and skills to the table for the position but also have an attitude and values that match the culture.
If you want accountants who do more than just crunch numbers, you need to hire for that, because you can’t teach personality traits and personal values.
At Johnny Rockets, Fuller wants team players who meet management in the middle on the communication front. Management provides resources, and people throughout the organization are willing to take a wide-angle view and understand how their utilization of those resources affects the company as a whole. The mutual understanding of the big picture helps create dialogue throughout the various levels of the Johnny Rockets system.
“Whatever role they play in the organization, I want them to know the endgame in that role,” Fuller says. “You can be an accountant and just kick out numbers and put them in a pile. But tell me how you use those. How have business decisions been made off of the deliverables you provide? I want to get everyone thinking about the deliverable that their department provides, what decisions are made from that, and what cog you are in the overall organizational structure of the company.”
In the end, Fuller says it is a service-oriented mentality that will enable your company to continuing growing and achieving. Management feels the need to serve employees, employees feel the responsibility to serve the company, and everyone wants to serve the customer.
“Go out and meet your customers, talk to your customers, and don’t just sit in the office,” Fuller says. “Go and find out what is happening in the department, go and ask what you can do to help. Go and see if there is anything your department can do to help others. It’s a mindset, and over time, you can spot pretty quickly who has it and who doesn’t. You can see who would rather stay in their office, and who wants to go out and help others.”
How to reach: The Johnny Rockets Group Inc., (949) 643-6100 or www.johnnyrockets.com
Last December, John Fuller, president and CEO of The Johnny Rockets Group Inc., was the subject of an episode of the CBS reality TV series “Undercover Boss,” in which the chief executive of a large company volunteers to work undercover as a low-ranking employee. Filming took place in October 2010, at several Johnny Rockets locations in the New York and Washington, D.C., areas, as well as a day filming at Fuller’s house. Smart Business spoke with Fuller about his reality television experience.
It was great for me, because I had really not worked in a restaurant. Getting out there and being able to see things without people knowing who I was, it was perfect for what I wanted. The show worked quite well and I got a lot of great experience that I wouldn’t have gotten otherwise.
That worked well for me. It also taught me — because I’m very analytical in how I think — how to simplify things. All that really matters is improving the process of the guest-server interaction. Develop a rapport, make eye contact, trying to make them smile once in a while. You build a relationship for the 20 minutes or so that you’re going to be with them, and if you can do that, you’ve kind of won the battle. If you build that relationship, people are more forgiving if things don’t go right and more excited if things go great.
I also learned about the passion that these people working in our restaurants have, and how excited they are to be a part of the Johnny Rockets family. It shows how each location that shows up as a line on a spreadsheet here is really a living, breathing collection of people who have a passion for what we do.
It was really good and it really emphasized the importance of being in the field. That’s why I have made it part of the training for anyone we hire at the manager level or above, so everyone can experience enough of what it is like to work in that environment, to cook during a lunch rush, to serve eight tables at once and all of that. It is important for management to have some kind of empathy with the people working on the front lines.
Michael Heneka runs the North American operations for an automotive component manufacturer. But when he first arrived, the challenges he faced had much more to do with airplanes and passports.
Heneka is now the president of Faurecia North America, part of Paris-based Faurecia. In his current position, he oversees more than 10,000 employees working in a business unit that generated $3.4 billion in sales last year. But when he arrived at the company five years ago, he was president of Faurecia’s North American interiors division.
At that point, Faurecia was still relatively new to the North American marketplace, and shipped a number of management-level employees to the U.S. for short-term tours of duty. The result was cultural quicksand.
“We had diverse staffing from all over the world,” Heneka says. “We had people from Spain, Mexico, France and Germany, so it was a bit transient. There were those who would be here for a short period of time and then move on. The difficulty in that approach was that you lack accountability if you feel you’re not going to be here for a long period of time.”
Not only were the short-term managers causing the company to suffer from a lack of accountability, the effect seeped downward to the subordinate levels. Heneka found lower-level employees were less inclined to see projects through to the desired outcome if they knew the boss was only going to stick around for a few more months.
“What I wanted to do was instill some sense of ownership in the team that was here,” Heneka says. “I wanted to lengthen the time period they would stay here in North America.”
Heneka also wanted team members to experience a higher level of engagement in the company’s culture during their lengthened stay. In short, the entire system of assigning, indoctrinating and training the people who would shape Faurecia’s presence in North America had to change.
Flick the first domino
Heneka needed to correct Faurecia’s cultural issues starting with corporate policy, then moving into the areas of training and communication. One of the first areas he addressed was extending the minimum length of an assignment in North America.
“What I didn’t like, and what I didn’t want, was an 18-month individual,” Heneka says. “I don’t think you can be held accountable for 18 months. So I asked for and received the authority to ensure that people were here for three to five years. That way, if something was started, the same person would be there for the finish and held accountable for it. If you’re going to be a part of the global growth and move from country to country, division to division, a minimum stay would be three years, and ideally five. Once we did that, we got rid of people working for a few months at a time, and it worked out much better. People lost that sense that, ‘My boss is going to be gone in six months, so I don’t have to worry about that.’”
With new rules on the books, Heneka turned his attention to getting his employees to understand and embrace a new cultural direction. It’s a step that required numerous meetings and fielding many questions about the company’s future direction.
He kicked off his communication by organizing everyone in his division’s technical center for a question-and-answer session.
“I told them who I was, where we were going, what I was trying to accomplish, and then I started to ask them questions,” he says. “I’ve been around a long time, and I’ve found the more I listen, the more I learn. I don’t learn a lot when I’m talking, so I tried to listen, find out what the issues were and report that.”
After the initial session, Heneka hit the road, holding lunch meetings and on-site forums, creating rounds of dialogue between upper management and workers in different locations.
“I’d go to each plant every couple of days as we were launching, seeing where we were going and where I could help,” Heneka says. “I wanted to see where our customer support was, or lack of support, so that I could help our facilities with the OEMs we were supplying.”
Faurecia was rolling out a number of new products in the same time frame, which added an extra layer of complexity to the process of ratcheting up the engagement level of Faurecia team members. Two months of traveling and communication gave Heneka enough time to focus the people in his division on the company’s culture, and how it would factor in the plans for the future. But he felt large-scale adoption and understanding didn’t occur until the four-to-six month time frame.
“We had to work fast,” Heneka says. “Within two months, I felt like I knew where we needed to go, but it was four or six months before we were pretty much on track with regard to where we were going. The plants still had some work to do because it can’t happen all at once, but within that six-month time period, we were focused and on track regarding what we needed to do.”
If you want to take your company in a new cultural direction, or find a new way to reinforce an established culture, Heneka says you need to show everyone in the organization why their work is significant to upper management, and how management supports them in their work.
“Most people simply want to know what is happening, where are we going, what is your goal, what are you doing to support us,” he says. “The more open you can be with what you’d like to do and what the company wants to do, you’ll find that people are much more willing to participate. They may not necessarily agree with everything you’re trying to accomplish, but knowing makes it a lot simpler. Once they know where we’re going and understand it, they’ll pull towards it because then they’re part of the solution.”
In a situation in which you’re trying to build a case and stimulate dialogue, you first need to open the dialogue, then listen to feedback, then look for solutions based on consensus whenever possible.
“The days of autocratic rule are over,” Heneka says. “There isn’t a better example of that than Alan Mulally at Ford. He made all of his direct reports part of the direction in which he wanted the company to move, and made them part of the solution. They’re all moving in one direction, and that’s really what I wanted to accomplish here. I wanted us to all pull in the same direction, and so far we’ve been very successful the last few years.”
After the initial rollout of his go-forward plan, and as he took over the entire Faurecia North American footprint four years ago, Heneka has needed to keep the momentum going. So he has looked to Holland.
Holland, Mich., that is.
On the other side of the state from Detroit, Faurecia maintains a design center, separate from the manufacturing channels of the company. In the Holland design center, Heneka picks the brains of some of Faurecia’s top North American idea makers and has come up with some new ideas for how to maintain the momentum of the company’s culture of engagement and inclusion moving forward.
“What they do there is think about innovation and what we can do in the future,” Heneka says. “We have them come in and show their innovations to our manufacturing facilities, the technical centers. We show them where we want to go, the types of products we want moving forward, and continue to bring suggestions.”
It’s one of the ways Heneka keeps the questions and answers flowing on a frequent basis.
“We have Q&A sessions where we’re asking everyone present what they think, what could we be doing better,” he says. “We invite that. Our four process groups are completely different. What would be exciting to someone in our emission controls group may not be so exciting to our seating group. But sometimes that collaboration of those four different product groups really brings some innovation. And that’s what we’re trying to instill.”
Faurecia North America’s four product groups are interiors, exteriors, seating and emission controls.
The increased engagement of Faurecia employees in the company’s North American operations has yielded new innovations that the company has been able to implement on a larger scale.
“With the environmental awareness factor in the auto industry, where people need more green products, our innovation process has helped to develop wood-based products,” Heneka says. “In the past, we’d have finished a part with a coating or fabric, but now we’re exposing the wood-based look with some of our products. We gain a lightweight factor, we gain appearance, and that is something that came from our design group. It was out-of-the-box thinking regarding how we could make something different, lighter and greener.”
Heneka’s company is in an advantageous position regarding employee input, in that the people who work for Faurecia almost all drive cars, and therefore will likely come in contact with a Faurecia product in their vehicle at some point. But even if you don’t manufacture something that your employees use, you should still take advantage of the fact that everyone in your organization is a consumer, and can take a consumer’s mindset to visualizing your final product.
“All of our employees are connected with a car in some way or another,” Heneka says. “So their input is along the lines of ‘What would you like to see in a car?’ We have a new seat system coming out that is going to allow people to adjust their seats with their iPhone after taking a picture of themselves. So we bring our employees in and say ‘What do you think of this? Would you use it? Would your children use it?’ By getting their input, we have a really good market study within our own company.”
Ultimately, employees want to know that management is willing to work alongside them. They want to know that management will work as hard and as long as the people in at the front lines, and are willing to offer support when a problem arises.
“Employees want to know that you are there with them, that you’re willing to do what you’re asking them to do, that you’re going to be out at the plant late at night, even though you got up at five that morning,” Heneka says. “They want to know that you feel the pain when something happens and that you want to be a part of the solution. You can’t just be some guy in a corporate office. You have to be someone who is ready to help. I’m not the guy on the line trying to make a part, but I am there to help. Employees are going to notice that.”
How to reach: Faurecia North America, (248) 409-3500 or www.faurecia.com
The Heneka file
Education: Industrial engineering technology degree, Western Michigan University
History: After college, I went into the Marine Corps, not so much by choice, and after I got out, I got a job working for Charlie Gehringer, a former baseball player for the Tigers. He was running several manufacturing companies, and I ended up working for him for several years.
What is the best business lesson you’ve learned?
I’ve learned a few. But one of the best is to always try to bring a solution to a problem. It’s easy to have someone come into your office and say, ‘We have a problem,’ but bring me three or four solutions and we’ll see what makes sense. Because if I have to solve everything, I don’t need those people working for me.
What traits or skills are essential for a business leader?
You have to be willing to be part of a team. You have to be willing to spend the time that is needed. You can’t isolate yourself. You have to be available. And I think you have to want to complement people. You have to put your ego aside and understand what they’re doing. It’s about less ego and more listening.
What is your definition of success?
You have to put your family first. When I see someone in our plants who is ignoring that, I’d like that person to take care of their family. If that is successful, most other things will fall in place. Also, I’ve been reading some of C.S. Lewis’ books, and he was a pretty brilliant guy. He said, when you have reached your own room, be kind to those who have chosen other doors, and to those who are still in the hall.
In other words, if you’ve chosen your path and are successful with it, if other people are on a different path, embrace them and acknowledge those differences. Once you do that, you will succeed and people will work a lot harder for you.
In April, J&J Snack Foods Corp. announced that it had a deal in place to acquire several frozen-food product lines from ConAgra Foods. The acquisition added up to $50 million in annual sales for Gerald Shreiber’s company, but it also added new production facilities in North Carolina and Oregon, new people to integrate and new inventory to manage.
But as the economy slowly crawls out of the pits of the worst economic nosedive in almost 80 years, the acquisition is a reflection of Shreiber’s philosophy on running a business: Don’t be afraid to take a calculated risk in the name of growth.
“We have expanded our business almost every year,” says president and CEO Shreiber, who bought the company that would become J&J Snack Foods at a bankruptcy court in 1971, and grew it to $696 million in net sales last year. “Sure, we’ve been through three — or four or five — economic downturns, and we know it’s occasionally going to be bumpy out there. But we’re not going to manage our business out of fear, we’re not going to crawl into a hole and wait until it’s over. We’re going to expand our niches and expand our portfolio of products.”
Lean economic times may prevent you from spearheading across-the-board growth. You might find that certain areas of your business are treading water better than others. But you should, if at all possible, look for the select few growth opportunities that still make sense for your business, and capitalize on them.
At J&J Snack Foods, finding those growth opportunities means listening to customers, allowing team members to innovate, and maintaining a business structure that is always ready for growth and expansion.
“It is tough to grow a business and maintain levels of profitability when you’re faced with cyclical adjustments with respect to the economy and sales,” Shreiber says. “The fact that we’ve been able to meet those challenges speaks volumes for our people, our customers, our partners and our suppliers.”
Serve your customers
With a portfolio of products that includes cookies, soft pretzels and frozen beverages, Shreiber’s company has felt the pinch of consumers reining in their spending on trips to the supermarket. As more consumers stripped their shopping trips down to the basics of meat, vegetables, bread and milk, snack foods became expendable items on many families’ shopping lists.
“We realize that our products are not mainstay items,” Shreiber says. “They’re not meat and potatoes. They’re impulse items; they’re treat items. All of our items are not part of the everyday shopping experience.”
As shrinking budgets altered the way consumers spent, Shreiber and his leadership team have had to find new consumer touch points. They’ve had to look past the traditional concept of selling snacks in packages in a store aisle.
Customer feedback pointed Shreiber toward spaces where consumers were more likely to buy snack foods — such as sporting events, theme parks and schools.
“Now, we’ve developed a big presence in sports venues, from high school all the way to the professional ranks,” he says. “We have a big presence in sports, leisure and entertainment. With schools, we’ve had to reformulate several of our product lines that were being sold to school and education systems. We’ve had to eliminate most of the sugars, reduce some of the fats and reform some of our standards. But we’ve done it, all the while maintaining our sharpness and edge.”
The traditional method of soliciting customer feedback has been to collect it in the field, utilizing a salesperson at the customer interface point, talking to consumers and store operators about what they want and need. However, like the heads of many large companies, Shreiber has formalized the system beyond that.
“It’s a matter of getting good feedback, good marketing, good interactivity and good integration between our marketing people and our salespeople in the field,” he says. “Today, our research and development department likes to measure the opportunity that is being requested. We operate 12 plants throughout the country, so in that situation, you have to know where the request came from and start to get a reading on how you can best implement the thought and idea. That process has allowed us to invent new products, expand our product lines and development. I believe a good company has to take the box, shake it up and down, and reinvent itself from time to time. That’s where customer feedback comes in. They’re the people who are buying our products every day, somewhere, in some venue.”
Invest in growth
Even as the economy has faltered and Shreiber’s team has had to get more creative about finding new sales avenues, Schreiber has still maintained a willingness to invest in his company’s future. It is a major reason why J&J Snack Foods has remained in growth mode each year, regardless of the economic climate.
You might not always be able to invest large sums of money in large-scale growth initiatives, but if you are able to save what you can and carefully select the time to strike, you can still make a move with a lasting positive impact for your business.
“You do have to budget,” Shreiber says. “I like to say we’re flexible, but we’ve also been very conservative over the years. We don’t spend more than we earn, we’ve eschewed debt and stayed solvent. If you don’t shoulder a lot of debt, you give yourself more flexibility. We’ve had the availability of both cash and credit to look at expansion.”
Growth opportunities can help you expand on an existing area of strength, or can help you broaden your product offering. In Shreiber’s case, he’s looking for product lines that can supplement his company’s existing portfolio.
“If you look at a good football team with good management, they’ll find the missing pieces,” Shreiber says. “The good teams will do it constantly all the time. It’s a matter of making your resources fit properly. Occasionally, we’ll look at a dozen to 15 things before we think we’ll have found something that fits us — the right company, the right location or the right portfolio of products.”
Investing in new growth also means investing in the people involved. Shreiber refers to it as “installing new batteries” in the people, particularly if growth means acquiring a new business unit.
“We want to kind of give them a new energy,” he says. “That’s the whole point of installing new batteries. In the case of the recent ConAgra acquisition, we brought our key plant people to visit us here at our headquarters just before we closed on the business. We had two or three days of sales and strategy meetings, and had some of their other people visit our facilities.”
Shreiber’s staff and the incoming unit leaders collaborated on a series of lists, between 10 and 12 items in length, each with a 100-day goal in mind. At the end of the fiscal year, Shreiber and his team reviewed the progress against the stated goals.
“Above all, you’re looking at how this product line fits in with what we’re doing, how you’re getting the message out to existing customers in areas that you weren’t operating in before, and how we’re getting it out to new customers,” Shreiber says. “I’m cautiously optimistic about our situation with this acquisition, that we’ll get this to work and be on to the next challenge in a relatively short period of time.”
Investing in growth also means investing in the support structure to accommodate growth. Though a self-admitted computer novice, Shreiber has invested heavily in IT support over the past decade — an effort to make his company more efficient, more scalable and a better conduit for information.
“If nothing else, that technology gives the CEO good, concise, clear information all the time,” he says. “So you can’t be afraid to grow and invest in your company, and that is something I encourage other CEOs to do. Even though we area a public company and answer to shareholders, I’m still the controlling shareholder and as long as I’m around, my mantra will never change.”
Plan for growth
Even if growth isn’t an option right now, if you want to grow again at some point, you should continue to operate with growth at the center of your long-term plans. That means fashioning a strategic plan with aggressive yet realistic goals and ensuring that you don’t backslide on the principles that made your business a success to begin with.
“Sometimes it’s a little more difficult if gas reaches $4 a gallon,” Shreiber says. “People drive less. If they drive less, they go less often to the places where we sell most of our products. So we are often challenged that way. That’s when you’re looking to ensure that your merchandising remains a priority, that you’re taking a good look at the locations where your products are delivered and that you’re delivering good value to the customer and, ultimately, the consumer. It’s almost like a running train. All of the cars are connected in there, and if something comes loose, there is going to be an issue. As the leader, you have to be the supreme conductor to make sure nothing comes loose. If it does, you make sure that someone reconnects it right away.”
Shreiber tries to plan for the short-to-medium term, but refrains from looking five-to-seven years down the road. Too much can change in the economy and in the industry in half a decade to accurately assess the plan of action.
“If you plan for five or seven years from now and you get everybody following that plan like a book, there are things that can happen in the short term that can affect that,” Shreiber says. “You want to be able to respond and react to opportunities, so our long-term planning stays within three years.”
Every business is different. Each business has its own market to serve, its own processes, its own structure and different methods of management. But the same principles of facilitating growth apply no matter what product you make or what service you provide. You have to know what your customers want, know what your business is set up to provide, and you have to continually invest in initiatives that will help spur growth.
“Every business is different,” Shreiber says. “We turn over our inventory 12 to 15 times a year. If you’re in the auto industry or heavy construction, maybe it’s a little different. But we’re buying our raw materials, packaging and ingredients on a regular basis. You have to invest in the business and invest in the opportunities you find, as opposed to throwing a cover over yourself because of the recession. Good companies are impacted by the recession, but you get through it by doing more things more often, and doing them in a better way.”
How to reach: J&J Snack Foods Corp., (856) 665-9533 or www.jjsnack.com
In addition to his business career as founder, president and CEO of J&J Snack Foods Corp., Gerald Shreiber is also an animal enthusiast and lifelong supporter of animal rights organizations in Philadelphia and southern New Jersey. Supporting animal rights causes has become one of Shreiber’s passions, and Smart Business recently spoke with him about it.
As a child, I always had an affinity and love of animals, particularly dogs, but certainly all animals including horses, cats and rabbits. I would find homeless dogs, bring them home and fib to my mother that they just followed me.
At 11 or 12 years old, I would clean horse stalls to ride for free. I always believed there was some magic in communicating with dogs and that I had some of that magic. Later when my career flourished, I felt a responsibility to give back and do what I could to help animals.
The Shreiber Animal Foundation Enterprise is a corporation organized and operated exclusively for charitable and educational purposes and for the prevention of cruelty to animals. I also support organizations such as the American Anti-Vivisection Society, the National Humane Education Society, the North American Wildlife Park Foundation, PETA and the Pennsylvania SPCA.
I believe animals should be treated with respect and dignity at all times and I support those causes that share my beliefs.
Three years ago, Matt Carter was the president of a business unit that was anything but booming.
The competition was, however.
Carter was the president of Boost Mobile, part of Sprint’s prepaid wireless group. Boost had made its name catering to lower-income customers in urban centers. But staying confined to that niche wasn’t helping expand the division’s market share.
“It was a very challenging situation,” says Carter, who is now the president of Sprint Global Wholesale Solutions Group, an Irvine-based division of Sprint Nextel Corp. that generated $1.8 billion in revenue last year. “Boost was in a category that was growing, but we were the only brand in the category that wasn’t growing. So it became very critical to give people a sense of reality, but it couldn’t just be me that was standing up there and saying, ‘Here is the state of the business.’ Half the deal was really presenting facts and data, and letting folks come to that conclusion themselves and buying in to the need of finding new ways of doing things.”
Carter needed to leverage the brainpower of his people to help redefine the Boost brand. But in order to get people at Boost thinking, he had to engage them in the process of developing new ideas. This meant everyone under Carter’s leadership umbrella had to realize their input and opinions mattered to management.
“It’s critically important in that situation that you let folks know that you are the leader, but you aren’t going to do this all by yourself,” Carter says. “This isn’t Moses laying down the Ten Commandments. You have to let folks know that you’re there for them, that you’re here to serve them and that you want them to buy in to what you’re doing and trust you in leading them. But you can’t force it. You have to figure out a way to get them to want to believe in you and what you’re trying to accomplish. That’s the type of trust that helps you move a business forward.”
Envision the vision
Carter was the leader, but he was also the new guy. He had people on his staff who were much more familiar with the Boost brand than he was and could see the potential directions for growth more than he could. Early in his tenure at Boost, after talking with a number of employees, Carter started to see the brand through the eyes of his people — and it was a brand with a great deal of untapped potential.
“Many of our people felt that there was a great deal more underlying value here that can appeal to a broader segment of the population,” Carter says. “Not just credit-challenged people, but people who are simply looking for good value.”
Carter developed a vision for Boost as a company that could appeal to consumers of different age groups and different income levels, in the city, suburbs and outlying areas. Boost began developing a diverse selection of marketing campaigns, broadened its product distribution and expanded its product offerings.
It sent a strong message to consumers, and it also sent a strong message to Carter’s work force.
“They started to see that, ‘Hey, he’s listening to what we have to say,’” he says. “There is greater potential here than just where we’ve been. Everything from our devices to marketing to distribution, it was all affected by the input I was getting from our people out there.”
Carter gathered the input by getting on the road. He spoke with customers and employees. Many company leaders pound the pavement, interacting with stakeholders and soliciting feedback, but Carter says the most critical step is the one he took next. He turned the talk into action in a short period of time.
“What happens in that process is that as you get their input, they start to see action that reflects the things they were talking about,” Carter says. “It makes them feel as though they had a vested interest in the process, in the outcome, in the decision. It wasn’t just me as the leader, sitting in a room by myself. It was really me getting input from a lot of smart, passionate, engaged people. As most folks saw that, they bought into what we were doing. They felt like, ‘Hey, I’m being heard.’ You can’t underestimate the importance of that. It just makes people more engaged.”
Make it cultural
Once you’ve set a tone of collaboration, it’s up to you to continue reinforcing that message to your employees. If you start out working hard to seek input and turn that input into action, but let the momentum trail off over the following months and years, you’re going to kill the cultural seeds you planted at the outset.
To make collaboration and engagement a part of your culture, you need to hire the best people, define their roles and continually show them how their work benefits the organization as a whole.
Ultimately, Carter says that as a top-level executive, you’re not in the business of manufacturing your company’s product or providing your company’s service. That’s the job of those under you. As the leader of the team, you’re in the people business.
“I view myself as a player-coach,” Carter says. “I’m in the game, but I also coach and provide guidance. As a leader, your first job is about people. You have to make an evaluation around the type of people you have on your team, who is working collaboratively, who are the people who will help us get to where we need to go. At the same time, you also have to make the tough decisions around those who are not part of those plans. So, it’s being really clear about how you maximize the team’s capabilities. That is absolutely numero uno for me as a leader. It is my belief that it is all about how you maximize your team’s capabilities.”
You need the right puzzle pieces on the table, but you also need them to fit. Fitting the pieces together requires you to define roles for the people on your team. If your team is comfortable with collaboration and sharing ideas, your people need to know what you expect of them and what they can expect from you.
“I don’t try to come in and prejudge people,” Carter says. “I try to give them the benefit of the doubt. Some people work better with certain types or leaders or in certain types of situations. What you try to do is come in with an open mind and a clean slate. This is what I need from you and your team, and this is what you can expect from me. And that starts the evaluation process. How are they performing against the expectation that is required for the team to be successful?”
Some people will perform above expectations, some will perform at the level of expectation and some will fall below. If someone falls below, you take corrective steps. If those don’t work, then you are forced to make a judgment call on whether you can move forward with that person as a member of your organization.
“The worst thing you can do is keep bouncing around people who are not performing,” Carter says. “You have to protect the integrity and the performance of the team.”
Develop solid practices
Carter says there are few things more important in business than defining metrics and goals and consistently executing on them until you’ve gotten it right. Without practice and execution, Carter and his team would never have seen their vision for Boost Mobile come to fruition. It’s a lesson he’s seen illustrated in pro sports.
Former NBA league MVP Allen Iverson once famously ranted to the media after he was criticized by his coach for missing team practices.
“Maybe Allen Iverson didn’t completely believe in practice, but you have to practice,” Carter says. “You have to be able to work on your game. So I have put in practices that allow us to have good habits as an organization.”
Carter and his leadership team continually assessed Boost’s performance with a series of metrics and used some tools they formulated to help keep everyone abreast of how the company — and their department — was performing against the metrics.
“Every week, we made sure everyone was clear on the state of the business,” he says. “We had a weekly scorecard to indicate how we were performing against all the key metrics. It was set up like a gas gauge, with red, yellow and green. Green meant you were performing at or above the plan, yellow was kind of a warning area and red meant you were underperforming. The goal of that was to get everyone performing from the same sheet of music, the same metrics we were going to use to evaluate the business. Everyone has a common language. And you don’t want to underestimate the importance of that. Having a common language is what allows everyone to have a robust conversation as an organization.”
If you don’t have that method for uniform measurement that allows for consistency in your execution against your goals, you end up like the Lakers did this past spring when they were swept in the second round of the playoffs.
“The Lakers are unquestionably one of the best teams in the league, and what happened to them? There were all kinds of personality issues, emotional distractions, psychological drama,” Carter says. “They’re people, and they weren’t all operating on the same page. And they collapsed. L.A. could still have lost that series, but I don’t think they should have been swept four games to none. And the same thing applies in business. People come to work, they have all kinds of things going on, and you as a leader have to figure out how to keep people together and focused on helping the team best the best that it can be.”
With that approach, Carter had refashioned Boost as a prepaid wireless services brand with appeal to many different market segments by the time he was promoted to lead Sprint’s 4G network expansion in 2009 and to his current post in 2010.
“It just keeps coming back to the fact that it wasn’t just one person as the head of the business, telling everyone else what to do,” Carter says. “We had a forum that was collaborative but invited dissent. You get different points of view and then encourage debate around those points. At some point, if you reach a stalemate, the leader has to make a decision. But you get everyone to understand where we’re going, how we’ll get there and the pros and cons of any decision.
“Having that as part of the process was absolutely critical to getting people to buy in to the vision. And that’s really what you’re trying to do — establish habits and routines. Practice still makes perfect, and you have to put some form of practice in place.”
How to reach: Sprint Global Wholesale Solutions Group, wholesale.sprint.com
The Carter file
Sprint Global Wholesale Solutions Group
Education: Radio, TV and film major at Northwestern University; MBA, Harvard University
First job: I did the newspaper thing. I used to deliver the Boston Globe back in the day, when people used to read the paper.
What is the best business lesson you’ve learned?
It is about people. You get things accomplished through others. As soon as you understand that as a leader, the better off you are.
What traits or skills are essential for a business leader?
You have to be competent at what you do. You have to have confidence, exude optimism and communicate. You don’t have to speak like Barack Obama, but you have to have a willingness to reach out and engage people. And you have to have trust. People have to see that you as a leader are trustworthy. You need to have their back.
What is your definition of success?
It’s living up to your capabilities. If your capabilities can only get you onto the junior varsity team, then so be it. For me, success is really about giving it your all, to the best of your capabilities. Don’t be like Mike. Be like you, do the best you can do. If you can’t live up to what Michael Jordan did, you don’t need to feel like a failure. You give it your best try. It’s when you don’t give it your all that you fail.
Avinash Rachmale has been in growth mode for 17 years.
The Mumbai, India, native founded the company that would later become part of Lakeshore TolTest Corp. in 1994. From the construction contractor’s early days with a staff of 30, Rachmale fed and watered his seedling of a company enough for it to sprout as a global outfit with 700 employees and $621 million in revenue last year.
To achieve the results, Rachmale says the term “growth mode” has taken on a more universal meaning for his business. He grows the capabilities of his people. He grows his business base. He grows enthusiasm for where the company is and anticipation about where it’s headed next.
“As a company, you want to have a vision about where you are headed, where you want to head and where you are actually going,” says Rachmale, who is the president and CEO. “Our vision was pretty clear. We wanted to be one of the largest contractors. We rallied people around that vision because people want to grow with a company that is growing.”
For Rachmale, growth means growing the culture in addition to growing new business opportunities. He wants every move made by the people at Lakeshore TolTest to be both a reflection and reinforcement of the company’s core values. It’s a belief that factors heavily into how Rachmale’s team hires new employees and trains them to conduct business.
“Our core values include items like client satisfaction, bringing a positive, can-do attitude to the office and taking responsibility when you take charge of something,” he says. “That is why we don’t hire people who have just the technical skills for the position. They can’t have the technical skills but no sense of our core values. No matter how competent they might be otherwise, if they don’t demonstrate those values, we won’t hire them.”
What follows is some of Rachmale’s lessons on how to grow some of the most important aspects of your company, from your culture to your people, to building a bigger portfolio of customers.
Build better people
To build the type of employees who can promote your culture and help your business grow on all fronts, you need to recruit people who have the right materials to begin with. Your new hires need to be a match for your culture, which is something you need to deduce through the interview process. But even once you’ve hired the best possible candidates, in order to keep them for the long term, they need to find career advancement opportunities at your company.
Rachmale says upward mobility is one of the most sought-after factors that determine whether a company retains its best and brightest players. Star performers want opportunities to move into higher-ranking positions, and the resources available to get the experience necessary to succeed in more demanding positions.
It aids your company, as well, since you will be developing an internal pool of management candidates, allowing you to promote as a first option and hire from outside the organization as a second option.
“People want upward movement in their careers,” Rachmale says. “As the company is growing, you’re looking to hire them and then to train them, so that you can promote them first, then look outside if there are no good options inside the company. If your people have the opportunity to move up as the company is growing, they definitely have an incentive to stick around.”
Training in and of itself can serve as a means of energizing employees. Many companies train employees for compliance on industry standards or as a measure of internal quality control. It’s a critical element of training, but the education of your employees should also come with a certain degree of “school spirit” about the company for which they work.
As the leader, you can begin to foster that level of engagement and enthusiasm by setting the example from the top, with the help of your leadership team.
“As employees learn more, they get more energized,” Rachmale says. “We have various programs to try and keep the energy level high. Monthly, we have what we call our Lakeshore University, where we have a topic of importance that we talk about and analyze. It’s basically like a webinar format. That is a big step in making sure that employees are getting the right training and feel more energized. It also helps if you can go above and beyond in how you take care of your people. If they need a little time off to deal with a personal matter, we accommodate that. Those are some of the things you do, both big and little, to keep employees motivated.”
How employees respond to your motivation efforts will give you a good feel for their potential to grow within your organizational structure. Rachmale informally divides employees into three categories: A, B and C. A players are your top performers, the employees with the best chance to grow into leadership positions within your organization. B players have the potential to grow into A players but might struggle in some areas. C players have significant problems with attitude, motivation or competency. Some can be salvaged and improved, some don’t have a future with your company.
“What I would say is that you will always have those three types of players in your organization,” Rachmale says. “You motivate B players to become A players. You try to motivate C players to become better, but if there are too many C players, you won’t be able to motivate your B players to reach their full potential.”
Rachmale and his leadership team use yearly performance evaluations to get an accurate read on the potential achievement level of each employee.
“The goals that we set are being monitored quarterly and yearly,” he says. “If an employee is coming in ahead of their goals, we know that is an A player, and that person has a chance to excel in a promotion situation.”
Plan for success
Building the best team is a major component of running a successful organization. But even the most talented team still needs rules by which to play. Your team has to know where you want to take the business in the coming years, how their jobs affect the goals of the company and what is expected on them — on a day-to-day basis, and in the longer view.
You give employees that type of structure with a well-constructed business plan. Your plan will aid in leading your company, and it will also become one of the first things that investors and banks will look at if you seek new avenues for financing.
It’s a lesson that Rachmale learned early on in leading his own company.
“Banks will look first at your business plan,” he says. “If you have a solid business plan, a solid vision and a good track record of performance, banks will be open to you, even with the economy as it has been. That is how we did it, one job at a time. We did a good job each time, we made good money on the project and we showed the banks that, yes, we can work with a million-dollar line of credit. The next year, we needed another line of credit for another job, and they said yes. That is really how you need to do it.”
A business plan has to outline what you are selling and provide evidence that you will be able to provide a return on investment. It has to speak to your employees, customers and all of your other stakeholders.
“You need to describe what you are selling and get your management team on the same page with you in order to promote it,” Rachmale says. “All of those things are important. Your product, your management team, the outside people you have contact with, your clientele. All of those groups have to factor into how you construct your business plan.”
A realistic, comprehensive business plan is the product of you and your leadership team knowing what the company can handle as a whole, and what each department is equipped to handle. You have to take a look at what markets you want to attack, the workload coming in the door and the resources available.
“As you put your plan together, you learn what you can chew on,” Rachmale says. “You start to learn what your team can handle, and then you need to answer the market with that. You look at what jobs are coming in and if you’re positioned right for that job. You demonstrate before you take a job that you have the pieces in place, and if you get the job, you’ll be able to do it. Then, once you win the job, you set the team in motion and make sure all the pieces are in place and working. Because clients will not give you a job if they feel you cannot manage the job. You have to demonstrate your abilities beforehand, which goes back to the importance of a good business plan.”
As you grow your business, opportunities might come along to add on to the company through a merger or an acquisition. Rachmale has recent firsthand experience in growth by acquisition, having been a key figure in the formation of Lakeshore TolTest. In April 2010, Lakeshore Engineering Services Inc. acquired Maumee, Ohio-based TolTest Inc., led by President Ernest Enrique. Both entities continue to operate separately, but under the same corporate umbrella, with Rachmale serving as the head of both Lakeshore Engineering and Lakeshore TolTest.
For Rachmale, the challenges associated with growth by acquisition are often related to culture. From your due diligence, you know if the acquisition makes financial sense. You know if the products or services are a good fit for where you want to take your company. But on cultural matters, it’s often a case of leadership from both entities sitting down together and piecing together a plan.
It requires a willingness on the part of both operating units to grow and change, and accept that their way of doing something might not be the best way.
“It is a challenging process when you have two cultures,” Rachmale says. “Every company has its own culture, so when you are bringing two cultures together, one group feels they have a better way of doing a particular function than what the other group might have been doing. That is why you put together an integration team, make a plan and a schedule and work through it. It’s something we have had to work with for over a year, and we have made progress.
“In our case, the integration team was in charge of finding the best practices from each site where we operated. It took us almost a year to do that, and there were a few fallouts along the way, but I think we’re where we need to be. But that is why you have a transition plan ready from the start. You can’t wait for something to transpire before you react. From the day you declare that you are going to acquire a company, you have to have that transition plan and integration team in place.”
How to reach: Lakeshore TolTest Corp., (313) 875-4115 or www.lakeshoreeng.com
The Rachmale file
Name: Avinash Rachmale
Title: President and CEO
Company: Lakeshore TolTest Corp.
Born: Mumbai, India
Education: Bachelor of science degree in civil engineering, Government Engineering College, Aurangbad, India; master’s degree in environmental engineering, Wayne State University
Rachmale on answering the bell for clients: When you are putting together a proposal for a project, you are telling the client what you can do for them. You might not have all the pieces in place, but you have enough pieces in place that the client feels good about you.
We once put in a proposal that said we were going to have a certified accounting system in our offices. That was one of the requirements of the contract. Then the client looked us over and said that we had demonstrated that you have this, you have some key components, but you don’t have the whole team. But you have enough that we will use you. As soon as we got the job, we put all the remaining pieces in place. That is one example. There are so many others like it.
John Rost realizes that employees show up to work each day for a paycheck. But he also knows that most employees — and the managers who listen to them — will tell you they seek something more from their place of employment.
They want a sense that their work contributes to a greater goal, a sense that they are valued by the company, a sense that their input on the company’s policies and directions has meaning and will be seriously considered by management.
But in order to have that, the tone has to be set at the top level. That’s why Rost — the founder, president and CEO of Fiesta Insurance Franchise Corp. — strives to get out among his employees at his company, which generated $36 million in 2010 sales under its brand name, Fiesta Auto Insurance.
Smart Business spoke with Rost about how a good set of ears and good set of walking shoes paves the way for an engaged, loyal work force.
How do you involve employees and franchisees in shaping the company’s future?
We are always chatting with our franchise owners to see if they have a different perspective, if they know of things that are working or not working. They might have some particular challenges or successes out there. We recently had three of our superstar franchise owners who were down here from northern California visiting with us. It was an opportunity to spend some time talking about their operations.
I can also think of some accounting challenges recently that came from our front-line clerical staff. With that, and discussing some of the potential solutions, we were able to create some software programming where the programming can be done more efficiently.
To implement something like this, having other people involved is key to a good working environment, whether it’s staff members or franchise members. If they feel there is not an opportunity to be heard in the organization, that is not going to help the success of the organization itself. In the leadership position, as the CEO or top manager, you have to spend a certain amount of time out in the field, making sure that you’re available to shake hands, chat with people and ask them for their input.
When you’re talking with your employees and franchisees, what do you want them to tell you?
Sometimes you’ll find in those situations, people will tell you about the good things, but you’ll need to ask them about the challenges they’re facing. You can talk about two things that are good things, but let’s also discuss the five things that are challenges. Without those discussions, you might not find out about that operational crisis that you’re not yet aware of or whatever it might be that they’re facing in their various capacities.
From there, the next step is to ask them about potential solutions for each one of those challenges. Most of the time, people that are dealing with whatever challenge exists have it in their mind how they would have dealt with the issue in the first place. That is how you begin to generate great ideas from the people on your staff who are dealing with those challenges on a daily basis.
What qualities does a truly engaged employee possess?
From a personality standpoint, it’s going to be someone who is very persistent, somebody who is not going to give up easily in the face of some challenging times. Nothing is perfect out there, so in order to be successful, you have to have that attitude of never giving up. So our franchise owners, if they come in, grab a hold of the concept in training, and go out and execute the plan we’ve laid out, they have an opportunity to be very successful. Every once in a while, we’ll have someone who goes out and tries to buy an orange and turn it into a banana, and it doesn’t work too well.
Ultimately, what do you see as the leader’s role in engaging employees?
As the leader, you have to have that vision to get people involved. You have to make sure everybody understands what the vision is and hold everybody accountable to stick with it. It’s something that is changing. It’s always zigzagging across as you’re headed in a certain direction. But you have to make sure everybody is staying on that path by motivating and inspiring people to achieve the goals of the organization.
How to reach: Fiesta Insurance Franchise Corp., (877) 905-3437 or www.fiestafranchise.com