Brian Horn

Monday, 25 June 2007 20:00

Success express

When the three partners of Relay Express make decisions, majority rules. And because the person who comes out on the short end of the stick may have a bias against the decision, co-founders Matt Seiter, Robert Smith and Mike Bernecker appoint someone else to relay the decision.

“We try to give one voice to the people,” says Seiter, president and CEO of the courier service. “There is that little bit of, ‘Hey, they didn’t like my idea.’”

Seiter and his partners have grown Relay Express’ revenue 75 percent from 2005 to 2006.

Smart Business spoke with Seiter about how to deal with employee mistakes, what to look for in employees and how pictures of family serve as a motivator.

Q: How do you give employees the freedom to work their own way?

It’s tough to just let go when you see someone making mistakes time and again. I try to stay away from them. Not out of the office, but out of their way. If I see someone making the same mistake over and over again, then I can see they aren’t getting it.

If they are making a different mistake, then I see they are learning. If they are making the same mistake, then maybe it is my fault for not teaching them the proper way to do it.

We do let people learn from their mistakes, and, in the long run, they are self-sufficient.

We try to retrain or have someone else in the company help them. I say, ‘They aren’t getting it from me. Maybe you can help them.’ We cross-train everyone so there’s not just one person who knows this part of the business. When there is a problem, they may be a better teacher for that person.

Q: How do you know a potential employee has the qualities you want?

When you go to interview somebody, if you like them right away, they can change when they come to work for you. We try to hire people we want to hang out or go to lunch with. If I like to talk to you in an interview, then I’ll like to go to lunch or dinner with you.

Everyone we hire, we tell them upfront that there is a 90-day period we want to have you work because they may not like us. It is a fast-paced business. There can be some burnout in it quickly. We try to eliminate the stress by having the personalities around that everyone can lean on everyone else.

Q: How do you retain employees?

We’ve had problems in the past with this where we have brought them in, let them go, and that’s not worked. In the last three or four years, we put up a picture board in the lunchroom where it’s everyone’s family.

We try to do more family-oriented things and to give weekly bonuses. ‘You did a good job, here’s a $25 gift card.’

That whole process of trying to get people involved in the company and each other’s lives has helped us retain employees. They want to see what they are doing makes a difference, and we have tried to show that in the last three to four years.

When we first started, we didn’t know what we were doing. We would ask our employees, who were older than us at the time, ‘What do you think we should do?’ Those first five to 10 years, we would go out to dinner with these people and their families. It was really a family culture.

After we did this for 10 years, it got to the point where my family started to come first.

So, we’d hire people to run the company for us, and the three of us stepped back and got out of the way. That whole family culture went away, and we had some turnover problems.

So we thought, ‘This isn’t working, we need to get back involved in this.’ Not so much in the day-to-day basics but involved in the people because they want to belong to something.

Q: How has having family pictures in the break room benefited the company?

If you are happy at work, you will do your job better. If you aren’t doing your job, you look at that board during lunch and you think, ‘I’m not just letting down the company, I am letting down these people.’

I know it’s been brought up quite a bit. People talk about it all the time. When a new picture goes up, I may not notice it, but a lot people go, ‘Did you see the new picture of so and so?’

I know it’s looked at every day. It’s like a motivator in there.

HOW TO REACH: Relay Express, www.relayexpress.com or (800) 860-6288

Saturday, 26 May 2007 20:00

Not just wingin’ it

When Philip Schram is hiring people, he is looking for talent more than expertise.

“Talent you have forever with employees,” says the French-born president and CEO of Buffalo Wings & Rings LLC. “They are going to learn and put the best foot forward. Expertise, you realize after a year you have transferred the knowledge of that particular individual to the rest of the organization. Expertise is a short-term acquisition, where talented people, you have the smartness forever.”

Schram has used that philosophy to turn Buffalo Wings & Rings around from a failing chain of restaurants to one that employs 400 people and had 2006 revenue of about $10 million.

Smart Business spoke with Schram about how to know the difference between someone who is smart and someone who has expertise.

Q: How do you know if people are smart or have expertise?

I have been burned. I am not American. I would like to compare three different cultures in the way you interview.

In America, people try to sell themselves extremely well. In Europe, people are kind of neutral. In Japan, you want to be extremely low profile, and it is the role of the interviewer to find the right man or right woman.

At the beginning, people told me they did such and such, and I would hire them. When it was time to perform, they didn’t perform. Right now, I have a philosophy that we don’t give them a position immediately. We see how they interact and how they deliver.

We look to put you in the right seat in the bus. Before, it was the resume and what was said in the interview to determine what they do. Now, we let them ride in the bus for a while and see what the right seat is for them.

Q: What are the keys to being a good leader?

You need to be genuine and yourself. I like to read a lot about the successful American entrepreneurs. I start with a vision. Then I do a road map, a tactical plan, and then I execute and follow up.

I have a companywide staff meeting once a month where everybody can keep up on achievements. At the beginning of the year, I do the yearly plan. We also have a six-month plan, and we update that every quarter.

It’s a lot of one-on-one or weekly meetings where you explain and listen. It’s between the vision, which is the strategic side, and the execution of the vision so that it is successful.

Q: How do you deal with failure?

The constant feedback I get back is that when you make a mistake, you need to acknowledge that you made a mistake. It’s more important that you are going to fix the mistake than the mistake itself.

So, if someone calls and says that a take-out order was wrong, if you take a corrected order to their home for free, you get the psychological credit, which is incredible. The customer then sends an e-mail that an order was wrong and the manager went above and beyond to fix it.

You should never deny. Try to do something that in the eyes of the customer is outstanding. People become loyal when they are treated well.

Q: How do you keep a business from growing too fast?

The thing I am doing is to sell a new franchise, then build the store. Third is to open the store and then manage and grow the business of the open store.

Once we have identified those, I keep the balance of these activities so I don’t have any bottleneck. It’s like a wheel. It needs to be spinning without unbalance. There is one additional thing behind all that, which is money. I am monitoring the balance of those four key activities of the company while keeping the money in mind.

Q: What are some things you do to prevent a bottleneck?

To have people that coach me outside of the company, for example, senior people in my industry with a completely different background. I discuss with them, which heightens me to get some feedback, and I am listening to their feedback.

It’s retirees and people that are in their 60s that like to teach. That’s one avenue to get feedback.

HOW TO REACH: Buffalo Wings & Rings LLC, www.buffalowingsandrings.com

Monday, 09 April 2007 20:00

Irvin D. Reid

Years ago in Chattanooga, Tenn., Irvin D. Reid heard something he still remembers to this day — a good leader is someone who sees a successful parade going by, grabs the baton and jumps in front of it. Reid, president of Wayne State University, agrees with the statement, adding that much of an organization’s success depends on the people who are following the leaders. A good leader needs to have insight into the people who are going to follow him or her, says Reid, who leads more than 5,400 employees as president of Wayne State University. Smart Business spoke with Reid about how to maximize the talents of the people following you and how to get employees to buy in to your message.

 

Give a sense of a vision. That vision could be built around the strengths of the organization or it could be in terms of your insight. But, it clearly has to be built on consultation and the interest in listening to what they have to say.

It’s the demonstration of commitment to the very thing you would give in speeches. A lot of people give beautiful speeches, and there is never any follow-up. You have to do that every day. You have to demonstrate these are the core values of the organization and these are truly the objectives that you are trying to achieve.

Look for outside input. Arriving on the campus, people are looking to you on what your new ideas are and how you will bring them to the campus. It doesn’t hurt as a leader to lay back, wait and listen to people even if you think you know what you are going to do.

I showed up on campus and an-nounced that I wanted initiatives in five areas. One of them was, I wanted their views on global education. I announced I would be interested in talking about possibilities of global education as an initiative to the university.

Without saying anything about what programs I had in mind, I asked them what was happening on the campus. I learned there were things going on, but there was no unity. So, my job was not going to be to create global education at the university but to organize, unify and give it a sense of purpose and commitment.

One of the things as a leader is, you don’t want to reinvent the wheel. You want to find out what the strengths are and build on what those strengths are.

Reach out to employees who don’t buy in to your message. Sometimes it’s just as important to identify the people who are interested as well as the people who aren’t interested.

If you find in your organization that there are people who have not shown any initiative toward an idea you have been moving or building your dream or vision on, then you may have to reach out to them.

 

For example, say, ‘I noticed that we didn’t have anyone from nursing when we did the outreach the other day. But I was just reading an article about how nurses are leading the global health care ... ’ and go on from there. Then you are saying, ‘You weren’t there, but you are very important to what I want to do.’

Once a leader makes that kind of outreach to a person, they aren’t really going to turn them down, are they? You will have demonstrated an extraordinary commitment to not only those who came as first responders but the second ones that you had gone out and brought in. You build coalitions that way.

Understand what qualities you possess. One of those qualities for good leadership is knowing that you have to build a community where everyone feels as those he or she is making a contribution.

The worst kind of an approach for a leader is the use of the word ‘I.’ It has to be ‘we’ or ‘you’ working with your colleagues. When the favorite word becomes ‘I,’ then you are losing it already. You aren’t talking about leadership but you are talking about domination.

You need to demonstrate that you are willing to share the dream in both its creating and implementation, and particularly, that you are going to share the credit. You are going to speak about the achievements of those people. They have to be empowered to do things but also be recognized that they have done things.

One of the great criticisms of Donald Rumsfeld in his role at the Pentagon was [that] he came in knowing everything. Not because he was there before but because he wasn’t interested in listening. It creates an environment of hostility and of emasculation of people.

Recognize good work in unique ways. Handwritten notes are nice. A big part of my business is raising money and I am a terrible artist.

To donors, I do stick figure drawings and put it on, in addition to signing my signature on the typed letter, and write a note. Sometimes the stick figure will have in one hand a big ‘W’ for Wayne State University, and in the other hand, the person has a big ‘Thank You’ or ‘Yes’ or ‘Yippee.’

Very childish and playful, and people really love it. In all of us, there is this motivation toward play and having fun. This is not what I write on a letter of sympathy but it certainly goes on a thank you or a birthday.

I do it for people if they gave me a million or a thousand dollars. I do it for employees, too. I get more comments about that than anything. They are shameless in how bad the drawings are.

Here’s an opportunity to do something that people really like to see in their leaders and that is, they like to see imperfection. Here I am, president of the university and drawing something that is so absolutely horrid. That humanizes the leader.

The more positive emotion you can bring out of the followers, the more effective you can be as a leader.

HOW TO REACH: Wayne State University, (313) 577-2230 or www.wayne.edu

Saturday, 31 March 2007 20:00

Alpha mail

Bill Disbrow was facing a difficult situation. 

He was building a new, larger facility in Florida to handle his company’s double-digit growth. However, that success meant a facility in North Carolina would be closed as operations were consolidated, and those employees would be out of a job.

That didn’t sit well with Disbrow, president and CEO of Cox Target Media Inc., whose familiar blue Valpak coupon envelopes aremailed out to more than 45 million homes each month.

After announcing the closing of the North Carolina facility, he vowed to do his best to find someone to take over the plant andemploy the workers. But his efforts went beyond a public relations statement — Disbrow hired a marketing firm to find a buyer.Ultimately, a buyer was found. And while going to such efforts may not seem to benefit Cox Target Media in any way, Disbrowsays the actions showed that when he says he cares about employees, he means it. “It’s things like that where you get past telling people what you’re going to do and showing them,” he says. “If you don’tultimately lead by example nobody is going to follow you.”

Disbrow says that showing that you genuinely care about employees can be a key factor in retaining them.

“The money and all that is something you have to have there,” he says. “You don’t have to be the highest guy on the street,but you can’t be the lowest guy on the street. Somebody has to be able to look you in the eye and think that you care aboutthem and that you care about what their future will be like. You have to show people you care about them a lot more thanjust putting it in the brochure.”

Disbrow has led Cox Target Media from a $50 million company in 1991 to a $250 million organization today. He boils hiskeys to leadership down to not only caring for his employees but also having solid communication skills and the ability toadmit when something is going wrong.

Listen to drive change
When Disbrow took over in 1991, he saw great potential in Valpak if the frequency of the coupons mailing was increasedfrom five times a year to monthly.

Valpak relies on a network of franchisees to sell coupon opportunities to local businesses. Changing the frequency of themailings would have a direct effect on how much work the franchisees had to do.

Though the company culture was positive when Disbrow took over, the franchisor-franchisee relationship was not great.Before any major changes could be implemented, the relationship had to be strengthened.

Disbrow says it’s important to keep an open mind at all times.

“Too often, you get guys who have had some level of success, and they think when they speak, everyone else should listen,” says Disbrow. “You have to go back and think about where you came from.

“The first job was to make sure everyone got on the same page and went in the same direction.”

Disbrow says from the first day he came into the company, the owners of the franchises wanted to sit down and have atalk with the new management. “We sat down and listened,” he says. “The things they wanted to do made a lot of sense. We really listened to our franchisees at that point and time and asked, ‘How do we support your growth?’ We tried to take the ‘us’ and ‘them’ out of it andstart pulling the same way. What drove a lot of the growth for the first 10 years was increasing frequency. “If I was a franchisee, I would mail this month and then relax for a month and then mail next month — mailing, at most,every other month,” he says. “We really turned it into a job where this is something you are doing day in and day out, andthis is something monthly that advertisers can rely on.”

Disbrow says management explained to the franchisees how more volume would mean more money for everyone.

“They are in it to make money,” he says. “So we tried to point out to them that if we did this better and smarter and more[often], we could make more money short-term,” he says.

“A lot of them looked at the business, as, ‘What can I make this year?’ We really started talking to them about building theasset value of what they had to the extent that we could change the business model of a promotional mailing that goes outevery couple of months into a real advertising medium, and convince them that ... their franchise would increase in value.It wasn’t just, ‘How much money can I make this year?’ but, ‘What am I doing to grow my asset?’”

Disbrow says many CEOs talk about the importance of listening to the customer, but listening to employees is just asimportant. “I don’t think you can listen to one and not the other,” he says. “If you do a poor job of listening to the folks you work with,I don’t think you are going to do a good job of listening to your customers. It’s about serving someone. The more you cankeep that in your mind, the easier it is to make these things work.”

Disbrow says listening also helped him understand himself and be an effective leader.

“You listen more than anything else, and you understand how you act and affect people,” he says. “It comes with timeand trying to be honest with yourself. As you talk to people and say things, listen to how you affect them and how theytake that and see if you are getting the results you want.”

Repeat your message
Aside from awards and recognition, Disbrow says employees appreciate knowing the direction the company is headed. To reach the point where everyone knows the company goals, Disbrow says he needs to drive the message homeconstantly. “It took me a long time to learn how often you have to say things before it starts sinking in,” he says. “Once you aregetting tired of saying it, people are just starting to get it. The more people feel like they understand where you’re going,why and what your part is in it, the better they like it. “Everyone wants to feel like they are adding something. Rewards and recognition do that, but ultimately, it’s abouthoping they understand why they are doing what they are doing.

Disbrow says as a company gets bigger, the influence that you, individually, have as a CEO diminishes because people don’t see you as much. “It’s making sure the folks that report to you are all saying the same thing and have the same vision and direction,” hesays. “There is nothing that will sink a company quicker than three vice presidents saying five different things andgiving 10 different directions. Then, employees think the managers don’t know what they are doing.”

Disbrow says the tighter you can get a message, the more relevant it will be, but he warns not to get it so tight thatthere’s no room for movement. “You want to be able to be flexible enough that if someone comes up with a good idea or the market changes, thenyou are able to change,” he says.

Cutting your losses
While listening plays an important role in leadership, so does admitting when you’ve made a mistake. Disbrow foundhimself in that in 2001 after having to pull the plug on an acquired company that wasn’t pulling its weight.

In 1996, Cox had just taken over Carol Wright, another direct-mail firm. After years of watching the company, its priceplummeted low enough to entice Disbrow into purchasing it in hopes of turning it around.

The only problem was, this acquisition was different from previous ones and was outside of the criteria the companynormally used. “We had always bought companies that were growing,” Disbrow says. “In this case, we bought one that was goingdown that we thought we could turn around. We never came close to turning it around.”

The decision to close Carol Wright wasn’t an easy one.

“You are affecting a lot of lives, it was a lot of money, and you never like to say you didn’t win,” says Disbrow. “But,at some point and time, you have to look at things realistically. You have to look at the bigger picture. For every hourwe were spending in Carol Wright, it was an hour we weren’t spending on Valpak.”

Disbrow says that looking back, he would have never done the deal, and the smartest move he made was shuttingdown Carol Wright in 2001 and focusing on Valpak. “It’s like getting married,” he says. “You at least have to marry somebody in the beginning that you think you have apretty good shot with. We went away from our core beliefs as to what we should acquire. It’s a lot different turningsomething around that’s heading for the ground than it is accelerating growth on a company already going up.”

Even in the less-than-ideal situation, Disbrow says some positives were squeezed out. He says Valpak may not havehad the same level of growth if Carol Wright was never acquired. “We learned a lot about the direct mail and marketing space,” he says. “We picked up three or four executives fromthat business even after we closed it. The executives have added a heck of a lot of value. When we closed that, it greatly enhanced our national sales in Valpak because we took some of those customers in Carol Wright and moved them toValpak. “So, when the smoke cleared, was it the financial success we wanted it to be? No. Was it a disaster? It could have beenbetter, but we got a lot out of the parts we had left.”

HOW TO REACH: Cox Target Media, www.coxtargetmedia.com

Wednesday, 28 February 2007 19:00

Big developments

As the boss of a successful company, it’s nice to sit back and think about all you’ve accomplished.

But don’t spend too much time reminiscing about the good times, warns Brian R. Wenzel. The president of Atwell-Hicks Inc., a development consultant company, says it’s sometimes necessary to think about previous successes, but you can’t let it consume your whole day.

“The hard thing is to not believe the hype,” he says. “If you spend a lot of time talking about the great things you’ve done, you’ll find while you’re spending time reminiscing about it all, your competitors are getting smarter and the environment around you is changing. If you aren’t constantly striving to innovate or trying to find the areas you can get better, that’s the first step toward disaster.”

Wenzel used that philosophy to lead his company of 400-plus employees to more than $60 million in 2005 revenue.

Smart Business spoke with Wenzel about how to stay focused on the big picture and how to find and retain passionate employees.

Q: What traits does a successful CEO need?

Leaders have to have the ability to see the big picture. All of us, in any business we are in, have the ability to get too focused on one area, be it the area we like, the one we have an interest in or the one that is the problem for the day.

That’s where you run into problems, when you start making decisions based on partial information. You have to have the ability to see the entire big picture.

Once you have the ability to do that, the second thing you have to have is the ability to prioritize. If you think about my job, on any given day there’s either too many people or too much work.

All you are doing all day is balancing those things and moving resources between groups. I have seen many people fail because they didn’t prioritize. They spent a lot of time working on the easy things and not necessarily the thing that needed to get done.

The third thing is the ability to close. Once you’ve figured out what you need to do and once you started working on it, you have to get it done. The ability to close can mean anything. It can mean hiring a new person for the organization. It can mean signing and sealing a deal.

Those people that have the ability to do that or recognize when it’s not going to happen and lose it quickly are the ones that really have success.

Q: How do you develop the ability to see the big picture?

You have to understand what went into getting you there. It’s one thing to manage an organization that is ongoing and you are tweaking, and it’s another thing to get through a crisis situation.

They have to have an understanding of all aspects of the business. I don’t know how you do that if you don’t have an elementary understanding of all aspects of what goes into the product you are producing or the service you are providing.

Q: How do you find good employees?

We have four full-time recruiters in-house. We also have a number of relationships outside with external recruiters who are consistently looking for people.

Obviously, they are people we need to fill roles in the organization, but we’ve got people looking for individuals that have a philosophical and cultural match with the organization. We have always found it’s better to hire attitude over aptitude.

We look at a tremendous number of people. We have a fairly extensive interview process. I still meet ... with at least 75 percent of all the new hires that are made.

Q: How do you retain employees?

Retaining means a lot more than paying somebody market wage. We invested (in excess) of a million dollars in 2006 in training programs for our staff. We use both outside and internal resources to bring about knowledge and information.

We might partner with a University of Michigan or a Harvard to talk about expanding skill sets on people, relationships, management, or sales and marketing, or whatever the case may be.

We have spot bonus programs in place to say thank you when somebody does a job well-done. We have our Impact Atwell program, which is more than an employee suggestion box. It’s something we implemented a couple years ago that gave people, in a variety of different areas — from people to processes to possibilities — the opportunity to help us grow the company.

In the last year and a half, we’ve had north of 1,400 different ideas from north of 400 people, resulting in millions of dollars of savings for the company. In the process, we have paid out north of a quarter of a million dollars to our employees as a way of saying thanks for making the company better.

HOW TO REACH: Atwell-Hicks Inc., (734) 994-4000 or www.atwell-hicks.com

Friday, 24 November 2006 19:00

Real growth

Timing is everything. Just ask Donna Salyers, president of Donna Salyers’ Fabulous-Furs.

The faux fur company was set to make a splash when it sent out about a million catalogs to potential customers. The only problem was, those catalogs arrived at their destination between Sept. 11 and Sept. 13, 2001, and the response was less than stellar.

“That was a huge hit to recover from, a mailing of a million,” Salyers says. “You spent the money on the postage, you spent the money to build your inventory, and now you have zero pay-back.”

It took time, but after laying off people, selling items at half price and talking to banks, Fabulous-Furs rebounded and in 2005, generated about $10 million in revenue.

Salyers also credits a Wall Street Journal article about her company with aiding the company’s healing.

“It seems like something always comes along to save you just as your last fingernail is breaking,” she says.

Smart Business spoke with Salyers about how to handle bad decisions, take risks and deal with change.

Q: What is your process when taking risks?

Looking into past numbers and reading into those. Was it product? Was it the way we did the catalog? Was it our mailing? Looking at as many measurable items as possible. Getting lots of opinions.

We all talk about it. Everyone knows the numbers around here. Get lots of feedback from the people that talk to our customers on the phone. I’m out in the public a lot and talk to a lot of people. We all talk to a lot people around here. We take all that back and make decisions based on good information.

We don’t do focus groups as much as we get feedback from the people here who talk to customers all day. I get e-mails all day long saying, ‘A customer said he or she wants this.’ I put it on my list, and if (I) see that item pop up a couple of times, I say, ‘Oh, I think there is something there.’

Q: How do you rebound from failure?

You hope the cut wasn’t too deep, you stop the bleeding and you turn it around. Don’t do it again next year.

You might have to live with a decision for a season, but you will learn from that. Often, something really good comes out of a mistake. You analyze those problems. We spend a lot of time reviewing what we did.

A company will send us this, but we ordered that, or they send us an inferior product. We will call every customer, even if it’s 200, and say, ‘We’re so sorry this happened. Take a 20 percent discount off something else. We want to make it right, and this is not how we want to do business. We are as disappointed as you are. Let us turn it into something good.’

People respect that because everyone knows something will go wrong because that is the way of the world. But, if you correct those missteps, they respect that.

Q: How do you roll with the changes?

We don’t roll with them; we make them happen. We go after change, reinvent ourselves and are always setting higher goals. I don’t think a business can live if it’s not. You will quickly go downhill.

Even staying even is going downhill. I believe in being very aggressive and doing everything better. Every year, we have our best year ever and, even after I’m gone, I hope that continues. I don’t do dumb things like take these ridiculous risks. I would never want venture capital. I like safe, predictable growth.

Watch your numbers and understand them. How did you get here from there, and how can you make more of the good things happen and avoid the pitfalls? Being willing to work and to watch things and react to them.

And we are easy to work with. If you need it, I will sew it myself if we have to.

It’s always looking for opportunities and being willing to be able to change.

Q: How do you avoid those pitfalls?

Many pitfalls will be outside your control, like the hurricanes last season. Those impacted our business. Think of how many parts of the country weren’t even getting mail, and the rest of us were so horrified with watching it all, you felt guilty about indulging and shopping.

You will probably have some inventory issues because you were prepared for business that didn’t happen. You react. You do whatever you have to and get your inventory to where it should be.

Maybe don’t mail so heavy during hurricane season. There are a lot of uncertainties out there like gas prices. You try to be the absolute best, exciting and interesting.

HOW TO REACH: Donna Salyers’ Fabulous-Furs, (800) 848-4650 or www.fabulousfurs.com

Saturday, 28 October 2006 20:00

Joseph L. Welch

 When Joseph L. Welch was tapped to become CEO of ITC Holdings Corp., he had no management skills or training. Overwhelmed and learning on the fly, Welch says it took a lot of time and perseverance to stay focused. Even today, he says he’s not completely at the point he wants to be, but the numbers show he’s doing something right. ITC Holdings, which was formed in 2003 to purchase ITC Transmission, hauled in $205.3 million in revenue in 2005 and was recognized by the Michigan Business & Professional Association as one of Metropolitan Detroit’s “101 Best and Brightest Companies to Work For.” Smart Business spoke with Welch about how he makes decisions, finds good employees and takes risks.

 

Try for perfection.
You strive for flawless, but you never achieve it, and you never beat yourself up because you’re not (flawless).

It’s no different than if you are a star athlete. You always look for the perfect game. Tiger Woods, as good as he is, he is after himself to be the perfect golfer. He’ll never shoot an 18-hole course with a score of 18, but when you talk to Tiger afterward, he’ll tell you what was right with his game and what was not right. But he does it very analytically.

We try to analyze what we did well, and what we didn’t do well, and how we’re going to improve on what we didn’t do well and how we’re not going to slip from what we did well.

 

Reward employees.
We start out with the attitude that we want our employees to be fairly compensated. In fact, we actively benchmark and target the 65th percentile of the benchmark as the target starting point. We then target our bonus plan to put that employee somewhere between the 75th and 85th percentile in those comparable pay groups.

And then, for two reasons, we have a very good stock program to reward them. One, to keep them, and, two, to keep them focused on [the fact that] the owners are the one making this happen, and when the owner makes money, they should make money.

When that bonus pays out, the owner should be getting something out of that. Those bonuses aren’t just there to make you feel good. Those bonuses are there because they should be making the shareholder more money.

 

Take the job outside.
We work our tails off here every day to have a very collegial environment. We try to celebrate our victories. We try to get together as a team with outings, charitable events.

We’ll have a picnic in the parking lot or just a longer lunch period than normal. We get together and have an outing to raise money for charity, but it’s a golf outing for the employees at the same time. A lot of the employees have started to set up other clubs, like bike riding clubs, and we try to keep sponsored in those things to let the employee know we care about them.

We have wellness and fitness programs we try to keep going and keep our employees involved in. We are able to laugh at ourselves and have fun with each other and still get the job done.

 

Have a vision and communicate change.
You have to have a vision of where the company needs to go and a vision of what the company is.

You need to be able to articulate that. And you need to have the trust of the employees and the buy-in of the employees to make that vision a reality. It’s like a circle that, over time, the vision changes and the direction you want the company to go changes because the externalities change.

You have to be able to address that back to the employees in a way that they don’t feel that this is a kind of a flavor of the month club but this is an evolutionary process and we are just moving from point A to point B to C to D to E. You help them to connect the dots to build their own picture of what is happening.

Change, for a lot of people, can be very painful. So, you try to get them comfortable to let them know it is an exciting thing and get them energized about it.

 

Know your role when creating a corporate culture.
You have to start with yourself and understand you are the coach and not the boss. You’ve got to develop the players on your team.

You have to have culture that doesn’t punish people who go out a limb and take a risk, but you also have to have a culture where those risks are reviewed and everyone agrees that this is a risk we are going to take. It’s a fine balancing act, but we have people here who bring suggestions up and make changes. We try to debrief after things happen. What went right, what went wrong and how can we get better.

There is a lot of opposition out there to that change. As a result of that, you have to make sure everything you do has a calculated risk associated with it. What we do is get all the key people who should be a part of the decision and literally get around a table and beat down what it is we’re doing to see if there is a better way to do it or a less risky way to do it.

 

Make a decision.
We can get around a table and we’ll have a lot of opinions. My job is to make the call in the end.

The process we use is, once we set the vision, we all buy in to the vision and everyone is on board with it. It’s a team effort. Nine out of 10 times, there is no clear decision. There are facts on both sides of the equation, but we know we have to move forward.

I’ll take it upon myself, if it’s not clear, to make that call and I’ll look at my direct reports and they’ll look at their direct reports to make sure that everyone has bought in. Everything is done in the open. Everyone can speak their piece and speak it without any fear of retaliation.

 

HOW TO REACH: ITC Holdings Corp., (248) 374-7100 or www.itc-holdings.com

For a company to be successful, you need to have some structure, says Kathy M. Downey. Although, the managing partner of Plante & Moran PLLC’s Northwest Chicago office says the amount of structure depends on the size of your organization.

“If you’re very small, you can have fewer rules because there are fewer places the train can get off the tracks as you grow,” says Downey, who oversees more than 60 employees at the accounting and business advisory firm. “You need to start adding structure, but, I think for transparency, starting simple is important.

Smart Business spoke with Downey about how to have a structured company.

What is a key to being a good leader?

Having a system to get feedback to people about their performance is one of the key ways that you can create a culture of development because it’s an expected part of everyday work life. ‘I’m going to do something. I’m going to get evaluated on it. I’m going to get feedback. I can get it verbally right away, I can get it in writing afterward, and I get other periodic evaluations.’ We would call it now, the modern business speak is performance management. But you could do it very simply.

I think that’s how you really foster the culture of development — having a good understanding on educating people about the importance of development. So we can have all these things in place, (but) people have to really buy in to ‘Why should I take time to develop all these people around me?’ It’s really to give yourself and them more opportunities because if you want to change what you are doing next year from what you are doing today, you are going to have to teach somebody what you are doing right now. Because, if you don’t, you’re going to be doing it for the next 40 years.

If you are OK with that, that is probably fine, but most people like change and they like to do other things. And teaching younger people around you is how you do it. It’s you either keep doing it or you teach them. So I think showing people what the development does for them is a good way to get them interested in it. I think the performance management is the mechanism that you’d use to get the feedback going.

How do you get buy-in for development and that type of culture?

It’s all about communication and having the message, repeating the message, having the message be simple. It’s not branding, but it reminds me of branding in a way. So let’s say our mission is development. If you really want to drive it, you’ve got to talk about it, you have to have a system for it. It can be complicated or simple. And you as a leader also have to do it. So we haven’t talked about practice what you preach, but there is a huge element of that. I can tell you to go out and develop the staff and get me evaluations and all this great stuff, but when it’s time for me to give you your evaluations, if I don’t do it for you, I’ve probably gone two steps forward and 27 steps back. So, leading by example is critically important in driving any initiative.

Are there challenges in leading by example?

Let’s use performance management as an example. It’s time-consuming, and you have to be disciplined and sit down and do it. So, is it hard to lead by example? Yes, because the phone always rings and there’s always something else that has to be done. There’s always a client that needs something. So, the discipline of doing that is very important and is it difficult at times? Yes.

I think in other ways when I think about leading by example that’s maybe a detailed example. I think treating people the way you want to be treated, being fair, kind of the other things we talked about, making principle-based decisions when you make decisions. Those are things I like to think I’m good at because that really gets down to the fabric of the entire culture of the organization. If someone sees a leader who isn’t what they perceived to be fair, who isn’t open, who doesn’t act with integrity, then your leadership is really impaired I think. Because they’re not going to follow you because you’re not someone who they view as someone worthy of being followed.

How do you handle an employee who doesn’t buy in?

It’s a matter of degree. So, if you’re asking me in a severe situation is that somebody who is a good producer who really mistreats the staff? I don’t even know what the words would be to be a big violator of our culture. I would tell you that they probably would not end up being here in the final analysis because we would place a very high value on behaving the right way and in following the principles that our firm has relative to behavior, how you treat clients, how you treat others around you. So we’d take a fairly hard line on that.

There are others things that aren’t as severe where we would say, ‘You know what. That’s just their point of view.’ You talk to them and work with them and just hope that through constant discussion, you are dealing with somebody who can see your point of view.

How to reach: Plante & Moran PLLC, (847) 697-6161 or www.plantemoran.com

When Carlos Cardoso graduated from college in 1981, the country was in a recession and jobs were hard to come by for everyone, let alone recent graduates.

“A lot of my peers couldn’t get an interview and my biggest challenge was deciding where to go,” he says. “I had plenty of offers and opportunities and so forth.”

But instead of joining a company, he made the bold to move to start his own company. If he thought he knew everything about business before taking the leap of being his own boss, he soon found out he had a lot to learn.

“I realized that I needed to lead, I needed to sell, but I needed to work, too,” he says.

In the morning, Cardoso would dress in a suit trying to make sales, and by the afternoon, he would change into working clothes and make what he was selling a few hours earlier.

That experience was a wake-up call for the young entrepreneur. He thought he could do it all himself, but he soon realized he needed to surround himself with people to support him. Also, because he came from more of a process-oriented and scientific type of training background, Cardoso didn’t have a “soft side” and had to work on that aspect of his leadership.

“That’s a humbling experience, being 23 years old,” he says.

Today, Cardoso can look back on that experience and use what he learned to help guide Kennametal Inc., which posted almost $2 billion in fiscal 2009 sales.

“My belief is that, first of all, when you stop learning, you stop living,” says the chairman, president and CEO of the manufacturing company. “I really believe that. I also believe that you can learn from everybody that you meet at any one point, at any class, at any background, if you give yourself an opportunity to listen — just talk and listen. That has been a model for me that I try to learn from everybody I come across every day.”

Delegate

Because Cardoso learned at a young age the value of delegation, he didn’t have to go through those growing pains at Kennametal.

But there are young leaders out there right now who live under the idea that they can do it all. Save yourself some pain and just start the process of delegation.

“Your chance of succeeding is much higher if you delegate more,” he says. “A leader is only as good as the people that they have working for them.”

But don’t just begin to pass off everything that comes across your desk. You have to evaluate what is necessary for you to do and what you can delegate to others.

“It comes with prioritization and where your strengths are versus the strengths of your team,” he says. “One of things I encourage people as leaders to do is surround themselves with people that have different skills than they have.

“When you are a young leader, you know what you know and you don’t know what you don’t know. So, getting more people involved helps you be successful because it helps you with your blind sides and brings different core competencies that you may not have that you learn.”

You can also use delegation as a learning process for the people below you.

“You’ve got to be opportunistic and understand when is the right time,” he says. “By the way, you have to have the right courage and the confidence that sometimes you delegate to a person who is probably not going to get the job done. It’s part of teaching. You’ve got to make sure the risk ... is very low when you do that. Sometimes you have to let your people fail and you’ve got to be ready to come pick them up.”

Picking them up means using the moment to teach and not to criticize.

“When they fail, you can’t clobber them,” he says.

However, he has been surprised by employees who actually succeed and reach the goal.

“Sometimes I say, ‘I didn’t think you would be able to pull it off, but you did it so kudos to you.’ So you have to reward that,” he says. “You have to reward creativity in the company, as well.”

And you aren’t just delegating to help in the present but for the future, as well.

“Every leader has an obligation to grow their people,” he says. “It’s part of the leadership position. If you don’t delegate, the people underneath you are not going to grow, they’re not going to get better. Ultimately, your department is not going to be any better because everything relies on you.

“If you don’t delegate, you’re not going to be able to be promoted because there’s not going to be a successor to you and the company is going to look at you and say, ‘Your position is critical and we need you there because we don’t have anybody else to take your job.’”

Recognize imperfections

Cardoso is a firm believer that you will go a lot further as a leader if you recognize your blind spots, compared to someone who, well, turns a blind eye to those imperfections.

It’s what he had to do as a younger leader, and he wants those in his organization to take the same approach to improving themselves.

The organization uses 360 reviews to help managers realize their weaknesses, and it’s something Cardoso wants his organization to believe in.

“That’s what leadership is all about is that the people that need to do it and don’t want to do it, you have to, in a way, be forceful about it because it’s in their best interests ultimately,” he says.

Recognizing imperfections is part of the Kennametal culture that Cardoso needs managers to buy in to. Certainly, you have foundational beliefs that you want all employees to believe in and practice at your organization. You may not get 100 percent buy-in from everyone, so you have to give people time to adjust.

“You have to have examples,” he says. “You have to tell them what the blind spot is, and if one of those problems is listening, obviously you have a long road ahead of you because he’s not going to listen to you.”

In Cardoso’s case, if someone doesn’t want to admit to having blind spots and then work on them, he’s not going to fire that person at the first sign of resistance.

“Ultimately, culture in the organization drives results,” he says. “I tell people that you must not get the results in the company at the expense of your people. Don’t be successful because you are driving everybody else to leave the company.

“You call that a manager that leaves nothing but broken glass behind them. So you basically have to give the people an opportunity to understand what the issue is; you have to provide help for them to recover from that. Ultimately, if they don’t, I have dismissed pretty high-level executives because they left way too much broken glass.”

Cardoso gives someone between six and 18 months to adjust, giving more time to someone who shows the initiative to improve.

“You will give them more time compared to someone you know has no interest in changing from words or body language,” he says.

If the manager is fighting the idea of improving or recognizing blind spots, it could be a symptom of a much larger problem that they simply don’t buy in to the culture. So, if someone isn’t buying in, no matter how good of a producer they are, you have to let t

hem go if they are bringing others down.

“High performers that are good performers … get discouraged and sometimes even become lower performers when the organization rewards performers with bad behavior,” he says. “You can only lead if you walk the talk. Maybe in the beginning if people know you, they will buy it and give you the benefit of the doubt. Ultimately, the bottom line is people listen to what you do, not what you say.”

Know your environment

Cardoso says a good leader is one who has a nice balance between experience, emotional intelligence and IQ.

But of those three, emotional intelligence is something that brings it all together. Emotional intelligence is having self-awareness and knowing when you have to listen to others.

“There is time to talk and there is time to listen,” he says. “There’s a balance. There are times that you have to talk more than listening. And there are times that you have to listen more than talk.”

But it also involves getting a feel for the morale of the people around you.

For instance, with this current economic downturn, Cardoso is taking more of an active role with his leaders.

“It was very important for them to see somebody at the top that was calm, collected and was forming the strategy that we had, believing in the strategy and most importantly believed in the people that I have working for me,” he says.

When you feel something has rattled your organization’s confidence, you need to take action. If you are getting a lot of negativity in meetings or no response at all, there is most likely something wrong.

Cardoso gets a feel for the environment by meeting once a month with random employees to find out what is on their minds. He starts off the meetings with normal conversation and avoids coming across as the boss. If the Penguins or Steelers played, he will talk about the game.

“You have to create an environment that is conducive for people to speak up,” he says. “I believe people should be able to express their opinions and so forth. Obviously you get a pulse from that.”

While you may be tempted to only have these meetings during tough times, try to hold the meetings on a consistent basis.

“My view is you have to be consistent as a leader,” he says. “If you do a lot of these meetings during economic challenges and not during the good times, you run the risk of sending the wrong message. You run the risk of losing opportunities with employees.”

Cardoso began to get the feeling that his leaders below him became stressed out because of the economy, so he not only stepped in but he had to carry himself in a way that told the employees that he knows what he’s doing.

“People lose confidence in environments like this,” he says. “The leader’s job is to provide confidence in the organization. I often tell people if you are the top guy in the company, you have to smile even when you’re hurt. Because, if you are going through a difficult time and you smile while you are going through it, people get a different take than if they see you frowning in the morning because, ‘If Carlos is worried, we should all be worried. We don’t know why he is worried, but we should all be worried.’”

The sooner you take action, the better off you will be.

“If you do that after a bad quarter, then you are just reacting” he says. “That’s not leadership; that’s management. I find there is a big difference between leadership and management.

“Management takes order from top leaders. Leadership is you skate where the puck is going to be. You have to know where things are going.”

How to reach: Kennametal Inc., (724) 539-5000 or www.kennametal.com

Sunday, 25 April 2010 20:00

Genuine advice

Edward J. Doherty and his team at The Bricton Group Inc. have an adaptive style of management. That means if they have a general manager of a property with certain strengths, they build around those positives and try to supplement for their weaknesses.

“It’s a very rewarding style of management when you see somebody who you have worked with and really helped focus their strengths and really drive off of their strengths and, at the same time, help them adjust to their deficiencies and make them grow is rewarding,” says the founder, president and CEO of the hotel management group.

Smart Business spoke with Doherty about how to lead with an adaptive management style.

Q. What are the keys to being a good leader?

The one way I encourage — and hopefully, I lead the same way — is I call it the push from the bottom up versus the Whac-A-Mole type of leadership. Some people view leadership as top down. A little Whac-A-Mole pops up and then they whack it down if somebody has an idea. The authoritative, dictator type of management, which is so prevalent in the United States and maybe throughout many of the industrialized countries, I feel is completely wrong. Somebody does have to be the quarterback in the huddle, there is no question about that. But at the same time, I always try to tell our senior leadership team that we’re trying to push them up, and they’re trying to push the next level up so as you keep pushing each level up, the associate can maybe reach the stars. We come from underneath and provide support to lift up, rather than come down from above and dictate.

Q. How can a leader get front-line employees to come forward with an idea?

Just the culture we try to create at the Bricton Group and all the hotels we operate kind of spawns that. We’ve got all sorts of different venues and avenues that they are able to support ideas. We’ve got all sorts of systems and suggestions and open-door polices. And hey, if anyone can help us do something better, that either makes the guests more satisfied or helps bring more dollars to the bottom line through better productivity, we’re all for it. I can assure you that’s the stance that everybody at our company takes.

Q. What advice would you have to grow your type of culture?

Be genuine about it. You have to really mean it and do it and live it and breath it. If it becomes sort of a lip service or management book-of-the-month thing where you just kind of quote it, people sense that and people know it. So you would genuinely have to care about the people; you genuinely have to listen to their ideas and genuinely go out and solicit them. Get to know their names, get to know their stories and get to know what their hot buttons are, what makes them tick. Every human being has an interesting story.

Q. How do you approach employees?

Whenever I am on a property, if there is a banquet that needs to be set up ... everybody from our corporate office ... has the same mantra. If there is something that needs to be done to facilitate an event or a guest, we just dive right in. Many times, I’ll get to meet people on the front lines by working with them, by rolling up (my) sleeves and setting up a banquet table or breaking down a table or whatever. We hold annual reviews with all the teams and we get to know them. As the company grows, it becomes a little more difficult at each position to do that and to know everybody, but we try.

Q. How do you avoid micromanaging?

I don’t know if you can ever avoid it because one thing that we bring to the table is I started the company 22 years ago. I’ve seen almost every possible scenario and seeing it across 14 or 15 hotels, you a lot of times feel you know the right answer, and most likely, you do know the right answer because you’ve had experience in that area before or a situation like that has arisen before. And you are so tempted to go in there and do it yourself. If you are going to have one of your key employees really develop and grow, you have to be tolerant to them and let them go through it. If they make a small mistake, hopefully you were able to step in and correct it and guide them to where it doesn’t become a big mistake. But you’ve got to let them do their job, give them the tools necessary, give them the authority necessary, and as the company continues to mature and grow, you’ve got to, as a leader, make sure that you are giving them the rope and latitude necessary for them to do that.