When Blake Lundberg heard the news about the NFL ending its deal with his company, he knew it was time for a Hail Mary pass. For 11 years, the Sports Licensed Division of the Adidas Group LLC manufactured licensed apparel and uniforms for the league. But the NFL said a competitor had outbid Germany-based Adidas and its Reebok brand.
The company was about to lose a big piece of its revenue. Some analysts say the NFL job was worth $200 million annually to the Indianapolis facility.
“The lifeblood of the licensed apparel and headwear business is your license with these leagues or universities,” says Lundberg, vice president and general manager. “You depend on those deals; if you don’t have them, you simply can’t survive. It’s that straightforward.”
He was used to changes happening quickly, and this didn’t give him a whole lot of time to find new sources for revenue and ramp up employment to support them before the contract ran out. But the time factor wasn’t the biggest concern ? hot players and hot teams came and went, and to keep in business, usually meant having an ace or two in the hole.
“A product can become pretty obsolete quickly,” Lundberg says. “When Peyton Manning got hurt and he’s not going to play for the year. Or when LeBron James decided to move to a different team. When Barry Sanders retired out of nowhere. Once Michael Vick left the Atlanta Falcons, nobody wanted a Michael Vick jersey.
“The obsolescence of a product is critical. It’s a mix of, ‘I’ve got to have the right finished goods on the shelf and specific players,’ and, ‘I can’t have too many in case they become obsolete based on a player trade, a player retiring or a player getting injured.’”
Fortunately, the division management team had experience with reacting quickly to changes to find solutions.
The most logical route was to take a step back and see if there was some new business that could be developed and to possibly transfer and build up some operations the division could take on from other parts of the Adidas Group.
Lundberg and his talented leadership team had the business acumen to study the company’s strengths and convince Adidas corporate officials to transfer more existing business, such as from the NBA, to centrally located Indianapolis. A big selling point was that the plant could turn around products quickly as compared to other companies that had facilities in foreign countries where it can add weeks to the process.
In addition, some promising new lines were examined. They would be added in previously untapped areas such as high school sports uniforms and apparel, NHL team uniforms, club sports and sportswear connected with the Crossfit Exercise program.
Here’s how Lundberg focused his employees to take on new challenges and drive revenue for the 1,350-employee company.
Focus the managers
A company should really understand its strengths and weaknesses if it wants to succeed and grow. Lundberg was fortunate in that his management team knew it had bench strength ? most members had been in their positions for years and knew how to assess a situation to find a solution fast.
It was no accident that the team had a mixed bag of experienced managers. Many came from previous incarnations of the company, going back 12 years or so. Lundberg found that to encourage flexibility and creative thinking, some company veterans could anchor the group while some fresh but experienced faces from outside the company as well as outside the industry would add additional insight.
“The management team today is virtually the same that it was years ago,” he says. “We took over the management of Logo Athletics [a previous incarnation] and young Logo Athletics people stepped into more important roles. They really knew this business.
“The other thing we had the ability to do is to go out and hire industry veterans, people from Nike, people from Starter, people from Pro Player, people from our competitors that had really gone all by the wayside. Then we hired outside the industry, so people were experts in IT, and human resources and event planning.
“That really was an interesting mix if you think about it. The one thing that we have done the best is to have kept that group together. You all should really understand your strengths and your weaknesses. You can go into a staff meeting and disagree and have issues and argue constructively, and then come out, locked arms, on the same page, and say, ‘Here’s what we’re doing.’”
Look at people options
When a company launches a new line of products for a new division, it brings some challenges for its production team as well as for its human resources department to add more staff. You can tap an agency to send you temporary workers or you can add full-time workers. Either way, you’ll have to decide how to handle the workflow if the new business means running extra shifts around the clock.
“You will definitely face some service challenges ? ‘Hey, I’m doing all my existing business, plus now I’m going to pile on all this new business?’ And you probably have a finite amount of capacity,” Lundberg says.
He found mixed results with the temporary employee route for production work, and suggests the full-time seasonal route instead. This ideally would allow for more control over product quality.
“We don’t try to use the temporary route, for the most part,” he says. “We’ve looked at that. We might try it again.”
What you do what to try as you ramp up hiring is to look for people who can think on their feet and who will be in synch with your company.
“You’re looking for good talent, people who have the ability to adapt and people who have the ability to learn,” Lundberg says. “When you interview people, look for who’s going to fit within the organization. You might not hire the person who is technically right for the job. You really should be concerned with somebody who fits in.”
As far as compensation issues, your company’s practice should be to reward the best performers, as is done in many industries, but with a twist.
“Institute a labor incentive plan, not a piece rate,” Lundberg says. “Base it on engineering standards, accuracy and productivity and efficiency. You grade out at the end of every week.
“If employees are above standard, they get paid a bonus and an incremental bonus based on how much they are above standard. If they are below standard, they’ve got X number of weeks to get back up to standard. If they don’t, they’re out.
“It’s a very, very objective measurement tool to use in distribution and manufacturing. There are two schools of thought. I’m going to pay you X dollars an hour, you come in and I am paying you to do a job, and it is what it is, or I’m going to pay you X dollars an hour with an upside for the people who are really good.”
Going hand-in-hand with your search for manufacturing employees should be your search for qualified management trainees. There, a different approach is needed to bring you results.
“It’s very different to hire people in the front office versus hiring packers, screen printers, embroiderers and people who work on the shop floor,” Lundberg says.
His experience showed him that recent college graduates are the preferred material for management trainees. On-the-job training offers senior management an opportunity to observe the would-be managers.
“Design a 24-month program,” Lundberg says. “You rotate through, say, six different departments, four months per department, to get you to the 24th month. Then you slot them into a full-time job, something that they like, that they’ve learned, for the first 18 to 24 months.
The time spent in the program will serve to groom trainees for their specialty.
“I have a tough time believing that the majority of new college graduates know what they want to do,” Lundberg says. “They want to go to grad school or they want to be a lawyer, they want to be a doctor, or in some professional environment, something like that. We’ve seen that.”
Keep a diet of change
Lundberg readily admits he doesn’t know how to define the word normal. But that’s not a drawback. He’s taught himself that his “normal” can be best defined along the angle of constant change. And it’s his role to see that his employees are flexible and disposed to change.
“You’ve got to be willing to adapt to your environment,” he says. “I think you’ve got to treat people with respect. You’ve got to hire good people and let them do their job. I think that’s very important.
“Create an open atmosphere because you need to make decisions quickly,” Lundberg says. “You can’t be worried about somebody coming to you every time they need to make a call. They’ve got to be able to make it on their own.
“Develop an atmosphere where people enjoy coming to work, give them a good work environment so they can drive and succeed, and give them the ability to make a decision without being afraid of being wrong. Give them the ability to go out there and make decisions on their own and succeed,” he says.
“I think that the majority of people want to do a good job. You’ve got to give them the environment for them to do that in.”
That environment is one that encourages creativity, openness, trust, communication, problem solving, flexibility and feedback. Along with the responsibility of creating that atmosphere comes the opportunity to make errors and be accountable for them.
“People are going to make mistakes and that’s OK,” Lundberg says. “You can’t wait an hour, two hours sometimes to make a decision. You’ve got to make it and move on. People can’t be afraid of making mistakes.”
There are reasonable limits, however ? try not to make the same mistake twice.
“And don’t make it three times,” Lundberg says. “You can’t be afraid in business to formulate your decision; base your actions on those decisions, move forward, and if you’re wrong, you’ll have to re-evaluate, you’ll have to course-correct, and then you have to move on from there. It’s definitely important that you hold people accountable.
“Don’t be a big micromanager. You hire people, and for the most part, they will be extremely successful. Empower people down to the lowest level possible. You want to truly give the associate out on the floor the ability to make specific decisions, obviously within reason.”
At the management level, people obviously are empowered to run their department ? and you’ve got to be able to deal with the departments that are feeding you, a sort of internal customer service, as it were.
“So it’s not only dealing with external customers; it’s dealing with internal customers as well,” Lundberg says.
The goal with these internal customers is to motivate them to always want to get better.
“I think the one thing you have to do a great job of is to encourage people to look for a better way to do things,” he says. “Your IT department probably has a huge list of IT improvements because people are looking for a better way. I think you should keep the workforce motivated to not settle for the status quo.
“Good people breed success. I don’t care what industry you are in. If you hire quality people, and give them the opportunity to thrive and succeed, I think your company is going to be successful, and I don’t care what you are doing.”
How to reach: Sports Licensed Division, Adidas Group LLC, (317) 895-7000 or www.adidas-group.com
The Lundberg File
Born: Bellevue, Wash., outside of Seattle. I actually grew up in suburban Detroit.
Education: I went to school in North Carolina, Wake Forest University. I got a bachelor’s degree in science and business and math there.
What was your first job?
I slung newspapers for The Detroit News. Then I worked at an asphalt plant when I was in high school.
What was the best business advice you ever received?
Be ready to change, because if you don’t, somebody is changing around you. Our business always has something changing here: a new league that we are dealing with, a new big customer, a new process in the back, adding screen-print equipment, adding new facilities. I sit and smile and think, what would it be like to sit back and take a breather for a year?
Who do you admire in business?
This is going to sound sort of corny, but I really admired my father, Dick Lundberg. He owned his own road construction business back in the ‘70s in suburban Detroit. Business then went from absolutely doing very well to doing not so well. He was committed to keeping us in Plymouth until my sister and I graduated from high school. He was 50 years old at that point and I thought it was an amazing thing. I can’t see myself switching careers at 50. Incredibly difficult. I definitely admired what my dad did.
What is your definition of business success?
Giving people an opportunity to succeed and obviously growing a profitable business year over year. You need to continue to grow and you’ve got to do that with the bottom line in mind. You’ve got to grow the bottom line faster than the top line.
Lundberg on working at Adidas: I think people enjoy coming to work for a major sports brand ? for an Adidas or Reebok. To be able to work for two of the largest three sports brands in the world, I think is a great benefit. I think it helps us to attract good people. We’ve got people who want to come to work here because it’s the sporting goods industry. There are people who are passionate sports nuts out there, whether you are right out of college or you are five, 10, 15 years removed from college, they are like, ‘Wow, how cool would it be to work for one of the major sports brands!’
Mike Kahoe was not happy with the 15 percent increases for health insurance premiums that his company, Group Management Services Inc., was facing each year. It was time to take control to lower health insurance costs for the 50-some people on the plan.
Once Kahoe, president of the $24 million professional employer organization, searched for some information, he was swayed over to a plan of wellness for his business. He believed he could cut the health insurance premiums significantly ? and there were other benefits.
“At the end of the day, you have a bunch of people who you work with that are healthier and happier,” he says. “And that means happier customers.”
Here are some of the steps he took to reach his goals.
“One of the first steps is to get nurses to test everybody’s cholesterol and blood sugar levels, height and weight and so on,” he says.
This will establish some base-line statistics that you can work on to improve, and the recommendation that some health behaviors need to change has more substance coming from a health professional.
“You should use nurses rather than staff,” Kahoe says. “A lot of times, it’s delegated to an HR person who tells you to quit smoking or says you should quit smoking. I just don’t think it’s very powerful. I think when a nurse or a doctor tells you, it’s a different story.”
The company leader needs to support the efforts.
“Don’t be afraid to get involved in it personally. Take a look at yourself first,” Kahoe says. “People tend to replicate your behavior; for example, if you’re out back smoking a lot, I think it’s bad for the company.
What Kahoe found out about his personal base line became a driving force for the program.
“Honestly, at the time, the thing that was most shocking was that I might have been the biggest violator of all,” he says. “I was smoking two packs of cigarettes a day, working hard and not watching what I was eating. I was also on the obese level, and I really didn't like that term associated with me.”
The second step is to develop the programs by getting information from health sources on popular initiatives such as smoking cessation, weight loss and healthy eating programs.
“We just put together some programs and some incentives for people to quit smoking and live healthier lifestyles.” Kahoe says. “We had some weight-loss competitions and things like that.”
As soon as he knew what his initiatives would be, Kahoe devised ways to make it easier to stay focused on goals.
“There has to be a carrot, and there has to be a stick,” he says. “I think the people that are making bad choices in their behavior should pay a little bit more for health insurance. I mean it takes a little bit of work to be healthy, to get on a treadmill for a half-hour a day or whatever it takes. I think those people should be rewarded for the work they put in.
“If you are a smoker, you pay a little bit more for your insurance, but can get a bonus if you quit; if you are a nonsmoker, you actually get another contribution to your health savings account every year to help fund your health insurance.”
As a last step, you should invest in tools to help employees reach their goals. Kahoe built a workout room where there are treadmills, an elliptical machine and weights.
“It gets very heavy usage,” he says. “The goal is just one more way to get people involved.”
After the programs have been in effect for some time, you should see some impressive results.
“We are down to single digits for the percentage of smokers, we cut in half the obesity numbers and the overweight numbers. Our health insurance costs were cut in half and continue to go down every year. Your people are just healthier. You should get less sick days and a happier environment.”
How to reach: Group Management Services Inc., (330) 659-0100 or www.groupmgmt.com
When Mike Kahoe, president of Group Management Services Inc., wanted to start some wellness initiatives at his company, he knew that peer involvement would be a key point.
Getting people involved starts with your initial event, which is a type of health inventory. You should make it voluntary to participate in the health professional-run event, which includes blood pressure, cholesterol tests and blood tests. With some promotion, you should get a high rate of involvement in the kick-off event. You want to get as many involved as possible to be a success.
“We had almost 100 percent participation,” he says. “People need some awareness and a little bit of a nudge sometimes.”
A good idea is to open the programs to all employees, not just the ones enrolled in the health care plan. This will help unify the participants even more. Team members will give each other encouragement.
“It would be a complete failure if you don’t get the employees inspired,” Kahoe says.
A smoking cessation program featuring a bonus for quitting can start small, but with participation and positive results, it will likely grow.
“A lot of people will encourage each other,” he says. “Once it catches on, and 10 people quit smoking, I think the other people could figure out that they could too.”
Juuhi Ahuja knows uses a simple phrase to describe what it takes to find the talent that has helped her company, Wise Men Consultants, earn a spot on recent lists of Houston area fast-growing companies multiple times.
“We are a fast-paced, aggressively growing company, so getting the people who have the required level of ‘fire in the belly’ to grow both professionally and financially is my biggest challenge,” says Ahuja, founder, president and CEO of the $29 million business, which has grown since 1997 from a staffing company to a provider of international full-range solutions.
“It’s about attracting and keeping the good talent who can be the right mentor to the company’s younger talent and be interested in growing.”
Smart Business spoke with Ahuja on how she finds employees with an inner glow that guides them to success.
Q. What initial approach should a company take in finding the right talent?
I have made a lot of mistakes along the way, not that the talent was wrong, but the fit was not right. But I would say that more than anything else, when you look for a person, look for similarities in attitude. That is an important key because that will make or break the person.
You may not even mind hiring people who have less talent and less experience as long as they portray the right attitude, which resonates with your philosophy.
Putting a candidate through several interviews takes time but it is better than making mistakes. We've had to fire people because they did not have the ‘fire in the belly’ that we were looking for. So take your time. It also proves that the candidate is genuinely interested if he will wait to go through your process. Weed out the people who are just looking to make a jump for the sake of a jump.
Q. What other qualities should an interviewer look for in a candidate?
Look for people who are good solution providers ? somebody who should be able to take no for an answer and be persistent but at the same time know that knocking on this door is not going to bear any fruit.
You want somebody who believes in intuition, or a gut feeling. You want somebody who is a person who believes in data, but backs it up with 20 percent intuition. The way I define intuition is a good feeling, or bad feeling, in the gut, combined with market intelligence and hard data of some success stories with clients ? and just an inside feeling that yes, this will work.
Q. While an interviewer can’t spot ‘fire in the belly’ by looking at a candidate, are there any outward signs, such as body language, that are helpful in evaluating a job seeker?
It is in the person’s best interest to find something (that) he is passionate about, and it is also in your best interests to find a passionate person for the job. Passion is what you really look for in people ? that they should run to work.
Yes. Not walk to work. I think it is very true that people who walk fast think fast and tend to act fast. People who have a sluggish gait or ... I can’t say talk very slowly because I have had very, very good luck with people who talk slowly and measured, but I have very accurate insight into intuition and gut feelings. I have found that somebody who is open, gregarious, walks fast and enjoys a fast pace is more successful.
Q: What also increases your odds of getting a good fit?
It is also about letting a person flourish. If the environment is not to the employee’s liking, he is not going to be as excited. I think excitement and enthusiasm are keys to life. Life is really beautiful. You don't want to go into an environment that irritates you and irks you on a daily basis.
I mean life is so beautiful; it can’t be wasted. I have had employees say this is the best place I have worked for, and I know they are protecting themselves. We may still let them go after giving them two or three notices. They are not doing themselves a service or realizing that they need not be in this environment but need to be in a different one, which will make them come alive.
How to reach: Wise Men Consultants, (281) 679-6740 or www.wisemen.net
Jim O’Neil learned an important lesson some years ago when he was a 23-year-old engineer who sometimes found himself under the gun to make million-dollar decisions.
In one instance, he had a client impatiently cooling his heels, waiting for a resolution.
O’Neil knew he was on the hot seat ? and there was no one available to call for help.
“When you are on the line like that, you need to make decisions, and you made them,” he says. “They didn’t have cell phones then, the boss might be gone, and you had to make a decision. There was nobody else around. It might have made you uncomfortable, but you did it. You made it.
The firsthand experience of being in control left a lasting impression.
“It’s amazing how much you learn versus letting somebody else make the decisions all the time. And today, everybody is so accessible, if you are in an organization where people don’t want to make decisions, then you’re not empowering your organization,” says O’Neil, CEO of Quanta Services Inc., a company that supplies infrastructure solutions for the electric power, natural gas and pipeline and telecommunication industries.
He knew that empowering people to make decisions was the direction to go.
“I don’t need 1,000 cell calls a day asking me if they can make decisions that are well within their authority and responsibility. In the technological world that we live in today, it’s easy for people to not be accountable and to not want to be empowered.”
Once O’Neil became CEO, he drew up the boundaries employees needed and then encouraged them to adopt an entrepreneurial mind-set to drive business and customer relationships.
“If I could bottle that up and train that to others, you know ? and just move it up through an organization; I think that’s one of the biggest challenges ? to give people the latitude to make decisions.”
Here’s how O’Neil brews up the kind of empowerment at Quanta Services he wants to bottle and serve to employees.
Use collective approaches
When O’Neil arrived on the Quanta Services scene, he had been employed 20 years outside the specialized industry of infrastructure. His employment at Halliburton in oil and gas service had impressed senior management at Quanta Services, as did his record of holding several positions after joining Quanta in 1999. He was named CEO in 2008. Most of the people who had moved up the ladder in the organization were either former owners of companies that were acquired or people who the management put in place to succeed former owners when they decided to retire or leave.
But that only encouraged O’Neil to instill the collective approaches to solving complex problems he desired. He realized it was his role to discourage complacency, to push the organization, be flexible and change with the customers and markets, to be creative and to seize new and/or different opportunities.
In short, he was back in the situation he was earlier ? there was nobody else around to drive employee empowerment, and he had to decide how to formulate and institute a spirit that would persuade employees to feel sovereignty over their jobs.
To O’Neil, empowerment meant a lot of things.
“It’s not only decision-making; it’s go out and develop that relationship, go out and sell services and don’t be afraid to go sell services or sell the company’s total capabilities,” he says.
“You have to empower your employees to make decisions,” O’Neil says. “You set policies and procedures and clearly define a broad range of operating boundaries, and let the employees work within these boundaries. Employees who are properly trained for that position know when and where they need to seek approval authority.
“Employee empowerment is one of the most important aspects of being a successful service company. Once you clearly state the employees’ boundaries to operate, they then are empowered to make decisions to take risks.”
Even though it sounds like a potential Camp Runamuck, part of an effective empowerment plan needs to include the structure that says where decision hand-offs are to be made.
“I think structure within some organizations is good when you set policies and procedures and somebody needs to make a decision,” O’Neil says. “Empowerment is that the people who report to the CEO clearly understand what their roles and responsibilities are and what decisions they can make.
“Through the relationship that you have with them, the working relationship, they know when to come to you and when not to come to you ? even if they have the authority to make certain decisions, they know when to at least bounce an idea off you if they’re not comfortable.”
Direct reports should feel the same way and have that same relationship. The empowerment should probably go down to one or two levels below that.
Another important goal is collaboration, and when you collaborate, everyone is on the same level.
“There is no intimidation by position, you all roll up your sleeves and make the decision,” O’Neil says. “If I need to be involved, I’ll roll up my sleeves and work with the presidents of our operating units out in the field or with some of the leadership in the corporate office.
“It depends upon what the situation is if you want to make sure everybody understands that you are all in this together. We are out for a common goal. There is no stupid question; let’s just work through it together.”
Look at it fairly
While employee-empowerment programs can be elaborate or simple, O’Neil found that simple is best, and he made it easy to commit to memory by using an acronym.
“I call it the FAIR model,” he says, with each letter of the word denoting an action that in effect serves as a type of empowerment mission statement.
“F stands for focusing everyone in the organization on the overall vision and strategy of the company,” O’Neil says.
This takes into account that you have company vision and mission statements already in place. If you don’t have them, it’s time to write them.
“No matter what job position you are in with an organization, you work as hard as you can to make a difference,” he says. “You listen and you learn from those around you. “You contribute where you can contribute thoughtfully to a discussion or a situation and good things will happen to you in the way of advancement and more responsibility.”
“A” stands for holding employees Accountable for their performance.
“You have to hold people accountable and watch for complacency,” O’Neil says. “How do you know whether people are complacent or not? One of the main ways is to set financial targets.
“Also set employee development targets for them to develop talent within their organization. Your customers are a good source to find out complacency issues within your organization. And certainly if you have open dialogue throughout your employee rank, you can get feedback from that way as well.”
“I” is for involving every employee in the mission of the company
“A CEO must always remember that employees are his internal customers,” he says.
“You have to be a good listener. More than 95 percent of all problems brought to my attention deal with the need for better communication. People often require a sounding board to talk it out. Some problems are complex and require a collective approach to a solution.”
If you have employees involved in establishing the vision, it will bring a sense of ownership and stewardship.
“Employee input is valuable, and they must feel like they have a meaningful role in the future of the company,” O’Neil says.
While longevity may bring different levels of comfort, learning doesn’t stop once an employee gains seniority in a company.
“That 40-year-old guy can learn something too,” he says. “Times change, markets change, customers change. The 40-year-old guy has a lot of experience to bring to a discussion, and we typically listen to that person.
“He’s probably the one you can listen to the most when you are trying to do the job or build a project but that person’s ability to listen to input from others, too, is critical because he can learn from others as well. So it’s a team effort.”
R stands for recognizing people for their results.
“It means understanding what each person brings to the table in the way of value, knowing that you may have people at the table who are new, and they are there just to learn,” O’Neil says. “But just the experience of sitting through that type of exercise is invaluable to anyone. I learn every day. It’s a continual process.”
Employees who are involved are more likely to generate ideas in the suggestion box.
“They’ll pretty much tell you if you empower them that, ‘Look, I know I am responsible for this right now, but if I was given the latitude to go out and do this over here … I’m responsible for A, if you let me go pursue B, I think I could improve value to both our organization and the customer,’” O’Neil says.
Quanta has a Chairman’s Challenge program that forms teams of rising stars from across the company to address a variety of opportunities, market dynamics and challenges. It seeks to harvest the best and brightest ideas for implementation.
“It’s really a servant leadership-type of mentality,” O’Neil says. “You’ve got to empower the employees, and they have to give you their input. It’s collaboration. I do that with my direct reports, and my direct reports do that with their direct reports.
“Every employee is your customer. You want them all to be properly trained for the roles that they are in and to understand that your job is to make sure they have those tools and that they are well-equipped to perform those services to your customers.”
Empowering employees to make decisions may be a break from the traditional management plan of some years ago, but a break from the usual is often what is needed to reach new levels of success.
“You may make decisions that might have not brought optimum results,” O’Neil says. “Somebody told me a long time ago that failure is the launching pad for success. You’re going to make mistakes, and you learn from them and you move on. That’s why you invest in people.”
Those who have an entrepreneurial mindset know how to take risks, they have to make decisions, they own their own companies and they grew them from nothing in many cases.
“I think that is a very important aspect of differentiating yourself from people who have an organization that’s matrix reporting ? where nobody wants to make a decision, it’s slow, and typically when you get into that situation, people are running a lot of things and they don’t make the right decisions.
“You want to be in an organization where people are empowered, they learn from their mistakes, and they become a valuable part of your organization when you need to make decisions in a very rapid format for your customers.”
A company that empowers its employees has to think bigger than just responding to calls for bids.
“But bidding is a very important part of what you do,” O’Neil says. “You are never going to get away from that. The more you can move ahead of that process, and partner with your customers to provide solutions ? that’s where you can really differentiate.”
Even if that project would go to bid and you have had discussions with your customer, the customers don’t have to take the lowest price.
“They want the best solution,” he says. “They look at value as well. I think you need to understand where your customers are going as an organization. You need to try to stay one step ahead of them. You can’t live in a rear-view mirror. You need to look at future trends and not only in the direction the market is going, the economy’s going, but the route that your customers are taking.”
Many customers are being forced to reduce costs and improve reliability and many of them aren’t looking for low-cost answers. They are looking for solutions for their problem.
“Because you have that relationship, and you have a reputation for providing services safely, execute projects on time and on budget, customers will continue to share more information with you as you build relationships to try to figure out how to get better,” O’Neal says.
“You want to be part of that solution. And that’s what I call partnering with your customer in order to provide them with a better outcome, and at the end of the day, it will provide you with a better outcome as well.”
With its 17,325 employees and $4 billion in annual revenue, Quanta Services is a Fortune 500 company ? and has many of its projects are now larger in magnitude than the total value of the company when it went public in 1998. Its growth includes 120 acquisitions since its founding. Some 2,500 employees were hired in one quarter in 2011 alone.
O’Neil points to employee empowerment as a key factor in this success.
“The ideas and innovations of the minds in your company are an invaluable resource, and when you tap into it, employees truly feel ? and are ? empowered.”
How to reach: Quanta Services Inc., (713) 629-7600 or www.quantaservices.com
The O’Neil File
Birthplace: New Orleans, La.
Education: Bachelor of Science in civil engineering, Tulane University, 1980
What was your very first job?
I turned 18; I worked as a laborer during the summer in a chemical refinery outside of New Orleans between college semesters. It was a great experience for me and taught me the value of hard work ? actually digging ditches and eventually running a survey group as I moved up between my junior and senior year. It was outside with 90-degree heat with 100 percent humidity. I really didn’t want to do that for the rest of my life. So it was a great motivator to stay in school. We had to dig ditches by hand. I’m about 6’7” and that wasn’t easy.
What was the best business advice you ever received?
No matter what your job position is within an organization, work as hard as you can to make a difference; you need to enjoy what you are doing, listen and learn from those around you, and good things will happen for you in the way of advancement and more responsibility. I think I’m a good listener. I think that’s probably one of the most important traits that have helped me be successful.
Whom do you admire in business?
Well, I have a lot of respect for CEOs, thought leaders, and the like, but really those I admire the most in business are those I work with and for. I really admire Quanta’s employees who are on making critical operating decisions and interfacing with our customers and our communities because that’s really the face of our organization. Every one of those 17,000 employees represents our company. Without them, we don’t have a company. I myself don’t bring in a dollar of revenue for this company. Our people on the front line do.
What is your definition of business success?
Success is happy shareholders, customers who see the value in our services and employees and potential employees who believe Quanta is the preferred employer in the industries we serve, and world class safety performance is very, very important to me.
That’s my No. 1 objective.
Nick Fortine had to face a 40 percent drop in business as the retail sector put on its capital expenditure brakes in 2009.
Fortine, the president of CSC Worldwide’s Retail Specialty Group, which makes fixtures such as fitting rooms, display walls and cash register stands, was startled, but he knew he had to act soon.
“I was particularly surprised by the level at which capital expenditures stopped in the specialty retail sector,” Fortine says. “We had to create a strategy rather quickly based upon our new reality.”
Once Fortine examined the landscape, he made a bold decision to downsize personnel but to invest ? by adding people ? to the sales team. The company hired a handful of sales associates at the time it was laying off an equal number on the operations side.
“At the beginning of ’09, we knew the future was far from certain,” he says.
“We also knew that if we took our foot off the gas on our selling efforts, our pipeline would quickly dry up.”
Fortine knew that in many businesses, including fixture manufacturing, relationships with prospects and opportunities to sell usually take from several quarters to years to develop.
“So when spending picks back up, you need to have new opportunities queued up,” Fortine says.
In the meantime, when the dust is settling, it’s time to get started with your new strategy.
“As a leader during periods like these, first of all, your team needs to know you have a plan,” Fortine says. “Then they need to understand the plan, believe in the plan and buy in to the plan. They need to know that you are a part of a plan. You are there to support and assist them and to successfully execute that plan.
“A natural result of adversarial times in a workforce is tension, fear, doubt and uncertainty about the future,” he says. “During periods like those, open and frequent communication about the state of the business, the strategy, the goals and measurements against those goals is really critical. In fact, it’s always critical in a business, in good times or bad.”
A key factor is to make sure that everyone understands the steps you are taking to move the business forward given the environment.
“People are much more effective at doing their jobs when they know that they are aligned with the overall goals of the company,” Fortine says. “People perform much more effectively when they are not running scared but rather when they feel like they are empowered to go make a difference in the business. That is the biggest challenge and how you overcome it is by making sure that the people left truly understand what their role is in turning this situation around.”
You need to be positioned to find and win new opportunities all the time.
“While the economic environment is still unpredictable, you have to keep selling throughout,” he says. “You need to be positioned to find and win new opportunities all the time. When the market experiences the inevitable upswing that will come in the future, and those levels of spending return, you will be very confident in your position to take advantage of that.”
While the new sales representatives were getting their feet wet, Fortine was coaching the remaining employees on the new strategy to keep selling and to do more with less. It was critical for them to understand their new roles.
“We needed to explain that if we wanted to sustain our business long term, you don’t do that by laying off sales people,” he says. “You’ve got to always be selling.”
While this wasn’t a company culture makeover, Fortine felt it added a new dimension to the culture.
“I really believe it changed us culturally,” he says. “Your associates should really learn to think creatively about new approaches to managing the business. You have to continually ask yourselves and challenge each other, ‘What can we do to make this better?’ and ‘What can we do to make this easier, more economical, take less time?’”
How to reach: CSC Worldwide, (614) 850-1460 or www.cscww.com
Recreating positive sales and service experiences is an effective way to add to your bottom line ? once you know your strengths and weaknesses.
“You grow by continuously finding ways to do what you do more effectively,” says Nick Fortine, president of CSC Worldwide’s Retail Specialty Group. “You become more honed in doing what you do best.”
The best way for you to hone your business performance is to review the customer satisfaction level.
“Your clients will be very clear about how they believe you are doing,” Fortine says. “Continually ask them. If you are growing, if you’re profitable, and if your clients are happy, you know you are doing the right things.”
You should also believe also that your strength is your domain knowledge in the market.
“Knowing what it takes to pull off a world-class product rollout and translating that knowledge into exceptional service and program results ? that’s your differentiation in market,” Fortine says. “Believe that you do that as well as anyone in market.
“Spend all your time trying to recreate those success patterns by finding opportunities and serving more of them. Become really focused at what it is you do well and knowing what it is you don’t do well. Spend your time concentrating on just getting better and better at what you do really well.”
Ira Sharfin had thought Indianapolis would be a great market for his company, Continental Office Environments, an office interior and furniture business. The company already had offices in Columbus, Toledo and Pittsburgh, and it made sense regionally to be in Indiana.
But after some years of trying to operate the branch location, including through the weak economy, the numbers just weren’t there. There also was a problem in that Continental Office Environments and a competitor were both selling the same high-end furniture brand. Continental wanted the exclusive right to sell the furniture.
The decision was about to be made to exit the Indianapolis market and find another way to grow profitably.
“We suffered from not being able to drive enough volume,” Sharfin says. “From the Indianapolis standpoint, we just couldn’t get enough scale.”
Contrary to conventional wisdom, the plan was to grow the company ? by closing the store, which was sold at the end of 2010.
“It turned out that in order for us to grow in other areas, we just couldn’t be all things to everybody,” Sharfin says. “The effort that it would require to get the business to the size and scale that we wanted wouldn’t allow us to invest and grow other areas.”
By closing the store and growing the company in other areas (Continental’s flooring business grew about 400 percent in a year and a half, with 30 new employees hired), the numbers were much better overall. The revenue loss from the Indianapolis market has been replaced by the growth in other areas.
“We are still growing, not for growth’s sake but because there is demand out there, because we’ve got some pretty strong capabilities,” he says.
Sharfin, who had a 17-year business consulting career before becoming CEO of Continental, knew that his task was to look at the overall revenue targets and at the bottom line to see what the best route was.
Here’s how Sharfin found the solution to his predicament, made it happen and how the $120 million company is realizing the rewards.
Make the decision
Closing an office so that a company may focus its energy elsewhere is not as simple as it sounds. Leaving a market means a CEO must check his or her ego and pride at the door. As much as you want something to work, especially with all the time and effort you put into it, sometimes it’s just not the right fit. Every so often you have to prune to grow.
Once Sharfin decided this was the right direction for the long term, he had to rein in any lamentations for leaving, and start the communication process.
“I have no regrets of being in Indianapolis, because I think you learn from those experiences, and I met a lot of great people, but it just didn’t fit for us,” he says.
“You will never want to impact people’s lives like when you close a store. It’s tough when you are sitting at the top ? and you really are trying to make something work ? to look in the mirror and say, ‘This just isn’t the best fit for us. We are really taking time and effort away and focus from other things that would drive profitable growth, which would help us further our strategic goals.’
“As a business leader, you constantly have to ask yourself the questions: Are these the right markets for me? Are these the right products? The right services? Should I be investing more in other areas?
The more the situation was analyzed, the more the challenges arose.
“It’s very difficult sometimes to pare down,” he says. “I think it’s easier to expand, grow and add, but it’s much harder to realize, ‘Hey this just isn’t working for us.’”
As far as options, Sharfin started with the obvious ones that would allow the company to grow profitably.
“You want to grow financially stable,” Sharfin says. “It allows you to invest and do things in the community and do things for your associates. It’s the bottom line that you want to track ? monthly, quarterly ? your top line and what your order entry numbers look like.”
When you consider scale, you need to make a concerted effort to judge how long it would take to drive the volume needed in a market to put you on solid footing.
“It may take you too long to become large enough to really drive adequate volume, and you may think you are either going to invest for the next few years and make a commitment or you could exit now and focus on other areas that you thought would have a greater return,” Sharfin says.
There are few, if any, instances when closing a store or location can be decided and carried out overnight. Rather, it may involve discussions and planning sessions taking up to a year or more.
“About a year before we got out of the market in Indianapolis, we had the sense among my executive team that we really should look at options for exiting, because the store was consuming resources and attention, and we probably weren’t going to get the same return as if we focused on the other three markets,” Sharfin says.
“The first approach is to vet your decision quite a bit,” he says. “Don’t use only your executive team; use your managers as well. Ask for their input and engage them ? which I think certainly helps. When you engage people, and the more that you can share without getting into all the details, it’s all the better.”
Sweat the fine points
Communication is very critical at this point. Spending any time on the “if onlys” doesn’t gain support from employees who may fear for their jobs. You should realize that at this difficult point, your decision may not make new friends with anybody.
“You know some employees wouldn’t be offered a job if another dealer acquired your business,” Sharfin says. “I always believe you should be as open as you can with employees whether it’s good news or bad news.
“You tell your company that you are going to invest in areas where you can grow and be profitable and, occasionally, you are going to have to make decisions that may be less popular but they are for the good of the company,” he says.
People need to have a clear sense of the direction in which the company is going. Think externally as well as internally.
“Some manufacturers may ask questions, but you may not have any clients concerned about the strategy where you are going,” he says. “However, you will get questions from your people, and without sharing details or confidential information, tell them that part of your plan was to grow where you were strong and to continue to expand in areas you were very good at.”
Once employees understand the decision, questions should die down pretty quickly. If you explain your reasoning for the change, it will help keep open the lines of communication as well as trust in your leadership.
“Do it through face-to-face meetings saying that this is isolated to this market,” Sharfin says. “Tell them that you are doing fine in spite of the economy. You are meeting your overall company objectives and your financial targets, but you will be able to exceed those going forward by refocusing your efforts and closing the location.”
You have to cascade communication throughout the company and make sure people are grounded in the company’s vision and strategy.
Tell them this is actually going to help you focus on areas that all employees are involved in, and depending on the size of the company, you will have more attention to focus on those groups of people and of those businesses if you’re not distracted trying to grow or fix another part of your business.
“Obviously, you see it in Fortune 500 companies all the time where the CEOs communicate that they are exiting businesses because it’s no longer strategic or that they can realize a financial gain by reinvesting,” he says. “People still need to hear from you that everything is fine and that reiterates your strategy.”
What may speak loudest is your decision to hire people at your other locations ? in order to grow.
“Any fears that employees had will lessen as employees see new people coming in to bring in new business,” he says. “They will be seeing the physical results of the things that they had been told.
“As you grow your business, you may add more sales and business development people and others,” Sharfin says. “That is the way that people will really get it ? ‘Oh, now I understand. They are really serious about growing our business in expanding the areas where we are already strong.’”
After Sharfin decided that keeping the status quo wasn’t the most viable solution, he realized he was learning two lessons.
“One lesson is to know your strengths, and if your gut is telling you that something may not be good in the long term, it probably isn’t,” he says. “But the biggest lesson is, don’t ever rule out any potential business partners. You might never think that a competitor would strike a deal with you for your business.
“We spent about a year talking back and forth with our competitors, and I really grew to like them,” he says. “We were able to work a deal, they absorbed a bunch of our folks and I think it was a win-win. I still talk to those guys today.”
Start to see the rewards
If you know where your company is strong, a large part of your strategy should be to grow in existing geography and go deeper with the clients that you already serve. Grow some different services and capabilities in the markets that you are in.
“Try to leverage existing relationships and what additional services and products you can deliver to the current client base,” Sharfin says. “I learned early in my career the best future customer is the customer you already have. You always want to be as relevant as you can and not pitch everything.
“There are a lot of different areas that you can kick around with their management team or your leadership team ? things that you could be doing for clients that you are not even doing yet.”
By investing in your new and existing employees so they are trained in the new areas of business, it will give you the best chance to achieve profitable growth. It’s also time to re-emphasize that an attitude of grace goes far.
“Tell your salespeople, and believe this even when you lose a sale, you want to win graciously and lose graciously,” Sharfin says. “If a client decides not to select you, say, ‘We respect your decision; we are disappointed. Keep us in mind. Is it OK if we continue to call on you from time to time, or if we have some cool ideas for cool new products, can we share those with you?’ Always take the high road because you never know what could happen.”
If you communicate well with employees and customers, it can’t help but see you across the finish line where employee buy-in is the prize.
“I think buy-in is critical,” he says. “I’m not a big believer in consensus. I think you vet issues, you get people’s opinions and ideas, you get general agreement, you make a decision, and you move on. If you try to get consensus, it takes you forever. You may not have everybody agree, but if you explain why we’re doing it, why you made a specific decision, I think you do get that buy-in.
“It’s hard to grow and really be successful long-term if you don’t have buy-in. I think you can fake it, and you can get through a year or two, but at the end of the day, especially when you have a challenging economy, if you don’t have buy-in, you’ve really got your work cut out for you.”
And with that commitment and a plan to expand, you are in line to focus the company’s energy on its strengths and grow.
“It actually pays off,” Sharfin says. “It’s great when a plan comes together.”
How to reach: Continental Office Environments, (614) 262-5010 or www.continentaloffice.com
The Sharfin file
Born: I grew up in Columbus, but I was born in Brooklyn, N.Y. I only lived there a few months, but I always joke with people if they give me a hard time, I say, ‘Listen. Don’t mess with me. I’m from Brooklyn.’ The people who know me say, ‘Yeah, but you were in diapers when you left.’
Education: The University of Michigan, so I am very popular in Columbus. I have an industrial engineering degree from there.
What was your first job?
My first job was working for my dad’s construction company when I was 14. I was a construction laborer, really a go-fer. They didn’t cut me any slack. They worked me, and in looking back, I appreciated it because it was hard work. You know, hot summer days in August working on the roof of a new building. You would bake, and these guys had me running for tools and parts, lunch, and I learned a lot about working hard. It was a good place to start, and I made a lot of mistakes. They would send me for 10-penny nails, and I would come back with 12-penny. I definitely got a workout.
What was the best business advice ever given you?
Don’t argue over nickels. I learned this early in my career. Be fair when you are doing deals, don’t try to take advantage of people because it always catches up with you. I’ve always tried to live by that. It was from two people: my father, and Frank Kass, who is a business partner of mine. Frank always uses that statement as well. Frank over the years has been a mentor, and he’s reminded me of that.
Who do you admire in business?
I would probably say Howard Schultz. I have never met him; he’s the CEO of Starbucks. What he did was he created an unbelievable brand name and a brand where people have an emotional attachment. I really admire that. I am not a coffee drinker, but people tend to feel good when they think about Starbucks, or see the logo. One of the reasons I admire him is that a few years back, he shut down all the Starbucks stores saying, “We’ve gotten away from our quality and our roots, and we need to retrain our people on making the perfect espresso.” He had a lot of critics. He shut down stores. And I think they benefited from that.
What’s your definition of business success?
I really learned a lot over the years from learning through mistakes and having a company where people truly buy into the vision. I think when you are viewed by your customers as a valuable partner, that’s the definition of success, being able to solve their complex problems, and I think also giving back to the community. I would be remiss in saying driving profitable growth. Not being profitable, but continuing to drive profitable growth, whether it’s for shareholders, whether it’s being able to provide a home for a lot of associates. Also, that you can also give back to the community the more profitable you are. If it’s first and foremost about making money, then you lose sight of your people, of your customers and community. I think making money should be the lesser concern.
Steve Orander had started a company called Indy Office Solutions, it was just over a year and a half old, and he wanted to establish some principles to guide the employees on how to do what they do. So he took some time off and went on a mini-retreat to compose them.
“I was just trying to look at the major questions that would come up in a typical business day,” Orander says. “So I was able to combine some business and Biblical knowledge to come up with six things that I think are simple to understand, simple to apply and simple to measure.”
In 2007, Sharp Electronics Corp. bought Orander’s company as well as some others and formed Sharp Business Systems of Indiana with him as president.
The organic growth continued. Revenue was about $8.5 million in 2007, has almost doubled since then and the guiding principles have been carried over.
“I feel our culture has been a huge driver of our success,” he says. “The guiding principles are kind of the engine of the organization; they have made a tremendous impact not only on our business growth but truly how we look at what our mission is every day.”
Once Orander knew that his objective was to draw up some principles, he went down a list of key questions that had to be answered daily.
The first and most obvious one was to decide on the core motivation. Orander crafted the most straightforward statement he could devise: We seek first to serve.
“That’s the way we have run our business,” he says.
As for the second principle, Orander reasoned that if a person followed the first principle, it probably was due in a large part to parental influence. The second principle took that into account: We operate our business in a manner that would make our parents proud.
“Would your parents be proud if you took a shortcut with something?” Orander asks. “Would they be proud if you really went above and beyond? If you took the extra five minutes to talk to somebody and truly care about that person, they probably would be proud of that.”
For the third principle, he analyzed that a lot of business growth could come from client relationships that had been lost ? and regained through consistent contact and development. The third principle focuses on commitment: If we commit to something, we follow through.
“They’ve given us the opportunity the second or third time around, and we've been able to follow through on that,” he says.
For the fourth principle, Orander wanted empowerment to be a key factor in satisfying clients: Each employee is empowered to make a decision that benefits the client.
“What that truly means that anybody from the truck driver who delivers the product to me, we can all make the same level of decisions,” he says.
In an industry where the client retention rate is 30-35 percent, Sharp Business Systems has more than a 98 percent rate. Orander felt strongly that making a commitment to serve a customer is not just to get them to purchase from his company, but to build a lasting relationship.
The fifth principle echoes this feeling: We gladly forfeit any short-term gain that would not be in the best interest of our client for a long-term relationship.
The last principle involves helping your fellow man: We give back to the community generously because it’s the right thing to do.
The company has about 100 employees. Once a quarter, 12 Sharp employees get a day off to volunteer at a community organization.
“We will pay their salaries, and they will go out and give back in that practical way,” Orander says. “I think what we see is that our staff truly gets into a mindset of service.”
Using principles as a guide
Guiding principles aren’t just a list that hangs on a company wall. If used optimally, they can assist in not only running a company, but in the hiring and management of employees.
“They are truly both how to execute internally with each other as well as externally with clients,” says Steve Orander, president of Sharp Business Systems of Indiana.
The six guiding principles at the company each make a statement on how important it is to serve. The first time a prospective employee is exposed to them is during the job interview.
“I always ask them straight up, do you think you can commit to these things because I'd rather have you understand that this is really an important part of being on our team,” Orander says.
Besides being part of the basic operation, the principles also are used when there may be a performance problem.
“I'll sit down with the person, and I would basically saying let's look at our guiding principles here,” he says. “Based on what you did, how did that fit or not fit these guiding principles? Then they become the topic, not me telling them what to do.
“This has been really helpful as a culture because the culture maintains itself to a degree when you have that kind of checks and balances,” Orander says.
How to reach: Sharp Business Systems of Indiana, (317) 844-0033 or http://in.sharp-sbs.com/
A few years ago, John B. Swisher and his team at JBS United Inc. were putting together his first joint venture with a Chinese company and language and culture differences were creating significant obstacles for both sides.
Swisher, founder, chairman and CEO, was used to establishing lasting relationships built on communication and trust. One relationship with a feed and grain company has continued ever since he founded his now $480 million animal nutrition company 55 years ago.
But the Chinese joint venture was suffering from miscommunications. Swisher, meanwhile, was very concerned about his exploration into the burgeoning swine, poultry and livestock feed markets in the Asian giant.
“What they wanted was our research, our experience, and they want us to train that sales force to be a capital partner there,” Swisher says. “That market is just growing so rapidly.”
Already producing six times more hogs than the United States, the swine industry in China showed unparalleled growth.
“An American name means a big thing over there, so we were trying to capitalize on our name and the skills we have,” Swisher says.
He just wasn’t going to give up, and he set out to find a solution, even if it meant asking everyone who would listen. And soon, the right person was listening.
“I was at a 4-H Foundation committee meeting, and I was sitting next to this young lady,” he says. “She was an attorney with a law firm, and we were just talking about the difficulties in China ? and she said, ‘Do you know that we have attorneys in China? And that they’re Chinese?’”
Taken aback, Swisher said, no, but he sure would like to talk to one. And he did. What evolved was a solution built after dogged determination ? and that chance meeting.
“Within a month we had that thing completed,” Swisher says. “The attorney understood the language, he understood the people, and he had a law degree from China and the University of Indiana. He was just able to put that together so quickly once he could understand both sides. We are still using him. To be able to understand the language, I think, is crucial.”
International joint ventures can be lucrative undertakings. Teaming up with another company distributes the rewards ? as well as the risks, but the pairing may be the major factor in a successful endeavor, which might have not been a success by either of the companies alone. Both sides have opportunities for growth and a return stream for years.
“With the joint ventures, you have a strategy to grow and primarily to attract that skill that you do not have in-house and for all practical reasons could not afford to have in-house,” Swisher says.
For JBS United, its first Chinese joint venture was the United-Liuhe Co. Ltd., which manufactured and marketed nutritional products to poultry and livestock producers in China.
JBS United recently sold its interest in United-Liuhe for an excellent return ? nearly tripling its initial investment. It is now undertaking a second venture with the principal investor in that first partnership.
Here’s how Swisher helped blaze the trail for joint ventures on an international scale.
Find a good partner
In any joint business venture, it’s important to find a partner who is not just knowledgeable and has deep pockets. But what are some other key factors in a partnership?
“It’s people that you can work with, that are honest and reasonable, because no matter what contract you write, there are going to be exceptions and there are going to be other things that happen,” Swisher says. “Out of 13 domestic and international joint ventures, we’ve been really successful with 11. We had two absolute failures. I think we misjudged the partners in those two failures.”
The partner-judging process is not unlike that used in seeking a new employee. Proposals have to be examined, research has to be conducted into past history and risks have to be weighed to minimize possible mistakes.
“No matter how good that résumé looks, and how good the interviews go, you’re going to miss something,” Swisher says. “You cannot spend enough effort to avoid making some mistakes.
“I’ve read stories on American businesses going to China, and all they did was send money over to lose,” he says. “It’s like anything else. Ultimately, it boils down to the person that you are partnering with and the skills and character of those people.”
While you may find a different language and culture may make reference checking and other research a little challenging, it is an important part of the decision-making process.
“It is critical that you know the people who you are doing business with, that you trust them, they are aboveboard and they are doing things right.”
Once Swisher and his team realized that networking efforts might be fruitful, their search began to bear fruit.
“The partners here had gone to graduate school with a Chinese national, and he came to us and said this was a really good company; these are really good people,” Swisher says. You will find, however, that a good reference just opens the door, and you will need a comprehensive vetting process and face time. Likewise, a Chinese business has to approve of your company.
“We met with them and our conclusion was the same,” Swisher says. “We’ve really had a great relationship for 10 years. We have been really pleased with the outcomes.”
“You have to become trusted and be brought in ? sort of as a brother,” says Don Orr, JBS United president, who spent four years to find the right partner for the company. “Somebody’s got to vouch for you in China. Then you’ve got to spend the time over there to gain their trust, and then it will work. You can get through these differences or rough edges that you need to smooth out.”
Once JBS United made its decision, Swisher made it a point to keep the two-way communication alive through final negotiations and continuing on through the business enterprise.
“You’ve got to do your part,” he says. “You’ve got to hold up your end. They’ve got to be sure of you, too. I think it’s like any other relationship. You work with somebody for a period of time and you get to know what they do, what they can do and if what they tell you is right, and so forth.”
After his experience in the first venture opened his eyes a bit, Swisher put to work some of the lessons he learned for his second venture.
“No. 1 is you want to be a financial part of the company,” he says. “Although we had money over there in the first venture, what we had was just a small part of it and separate from the company. This time we are going to have ownership in the company.”
Another point applies to clearly defined roles for each party. Each should assess how they will go about completing their purpose and deciding with whom they need to interact.
“I think this time, there is an understanding with them and an understanding with us far more on what our roles are,” Swisher says.
Get the right people
It’s almost a given that your management for a joint venture overseas should include qualified, native-born talent. There is no shortcut to finding a suitable person; it takes determination and patience.
Swisher felt so strongly that the company needed this type of individual to deal with the Chinese partners that it took years of searching.
“We hired a Chinese man, born, raised and educated in China, who came to the United States and got master’s and doctorate degrees,” he says. “Our president, Don Orr, went searching and found him up in Canada. He is now literally the one responsible for the Chinese venture. Of course, he can read and write the language and is trained and educated in nutrition. No question, he has been unbelievably valuable.”
Some of the keys to a successful search?
“You really have to be agile and rally your resources and start communicating,” Orr says. “Use all your resources here, everyone you know here in the United States and the universities. Go to those people who are allied in your industry and say, ‘What’s your connection to those institutions or industries in Canada, the U.S. and China?’”
Once Orr learned that Chinese culture favors conversation between the top officers ? not vice presidents ? of both companies, it cemented his goal to find a native manager. Another advantage of such an employee is that he or she, once on board, is probably more likely to test the waters of business expansion than your employee who doesn’t have any local background.
“Don’t think too narrowly when you consider what is this person going to do because he or she may open up many, many doors for you, which you didn’t know you would be going through,” he says.
You may be talking and interacting with companies that you didn’t even know existed, and it may help to pave the way for future business relationships.
Also of value is the fact that once you have located and hired one highly skilled individual, he or she may lead you to another. The contacts that they developed during their school years or early employment years can be invaluable.
“They can pick up the telephone, call the schools and say, ‘Do you have any students up there that are going to graduate?’” Swisher says. “All these guys know each other and the good news is they can help advise the student.”
In effect, you will have an in-house recruiter ? and a marketing agent. Word-of-mouth is one of the most convincing tools, as most companies know.
“They will know your company and they will sort of know who’s going to fit, who’s not going to fit, and why,” Swisher says. “They can describe your company and your activities to the students. So it helps both sides.”
“If you have a good reputation with those people, you’ll likely get some recommendations.”
Deal with the lows
Sometimes the best-laid plans can go awry, as the poet Robert Burns once said. You’ve lined up someone to do business with, he or she is bilingual and everything looks like it will work. Then something happens and the project never gets off the ground.
While not technically a joint venture, Swisher’s company attempted to set up a distributorship in Ukraine, working with a local businessman who spoke English and Russian ? and it died on the vine.
“It blew up,” Swisher says. “There was no question part of the problem was language and part was culture. We offended them somehow, obviously not intentional, but all of a sudden it became an issue we couldn’t overcome.”
What Swisher took away from that experience was that American business practices may differ from those in Ukraine.
“There was another company in Ukraine that contacted us and basically in that conversation we agreed to meet with them,” Swisher says. “This really offended our prospective distributor. We thought we were being up front, and he basically said if you go around my back once, you’re going to do it again. We could not get over that hurdle.”
In a case like that, it is best for you to dissolve the relationship. Chalk it up to the differences in culture and as a learning experience.
“Do not violate the original opportunity, even if you think a third party is only remotely connected,” Orr says. “Inform your partner first.”
When it comes to going your separate ways, make a concerted effort to have an amiable parting.
“We left as friends; that’s the best way, with mutual respect, realizing that the arrangement just wasn’t the best fit at the time,” he says. “That’s why you never burn any bridges behind you ? you may do business with them down the road.”
Luckily, losses were minimized on the Ukraine project. But two joint ventures JBS United had in the United States with Indiana companies went sour also, and while not causing heavy losses, they were failures attributable to incorrect conclusions. As with the international joint ventures, you need to evaluate the domestic joint ventures with the same scrutiny.
“First of all, we misjudged their talent,” Swisher says. “They were not as skilled as we thought they were, and they were not as reasonable as we anticipated. Those two things just killed those partnerships.”
But if you take a philosophical outlook, it will help put it in perspective.
“But, you know, to some degree, if you say two out of 15 is not bad, it’s sort of like hiring people,” Swisher says. “If you could hire 13 really great people out of 15 hires, you’re damn good.”
The Swisher file
John B. Swisher
Chairman and CEO
JBS United Inc.
Born: Danville, Ill.
Education: University of Illinois, bachelor of science in animal science. Honorary doctorate from Purdue University in agriculture. That was a real treat for me to get an honorary from a university. Well, I did attend Purdue for one graduate course, but never got a diploma from Purdue. They felt that what I had done for them for agriculture was worthy. It sure as hell wasn’t the money that I had given them.
What was your first job?
Sacking a pancake mix in 5-pound bags. I was 14 years old. I was even driving trucks at 14. You have to understand, in the World War II years, manpower was hard to come by.
What was the best advice you ever received?
Whatever you promise, be sure that you fulfill it, no matter how hard, how badly it hurts you. You’ve got to be good for your word. That’s from a guy named Paul Kefauver. It was early in his business. He was a customer, a really large farm in Indiana named Fuller Farms. Mr. Fuller had a lumber business down south, a big lumber business. He owned a farm, I guess his wife inherited the farm, and it was like 1,000 acres; it had all kinds of cattle and pigs. Paul was a professional farm manager and was just sort of one of those wise old men that you are lucky enough to come in contact with.
Whom do you admire in business?
John Stadler has to be at the top of that list. His family had a packing business in Columbus, Ind. His adopted father hired him to save that company, and he did. Then he built a packing plant for an integrator down in Missouri. Then he had a series of things, which includes starting one of the largest hog farms in the United States, plus a packing plant, plus a sausage plant. He has a knack of taking desperate situations and turning them around. He does it so easily that it makes me envious. To do something that is so difficult and to do it with such ease is my definition of a pro.
What’s your definition of business success?
To be able to manage a company through the bad times successfully. There’s an old adage about anybody can be a captain in a calm sea. Not many people can be a captain, a good captain, in a rough sea. In these last three years, so many people in business have had it unbelievably tough. I think you’ve got to be able to manage through the changes and adapt successfully to change. I think that as much as anything else I see is a hallmark.
Swisher on what a joint venture means: What the joint ventures have done is for is to be able to take a medium-size company and expand particularly the technical intelligence, and in our joint ventures we have microbiologists, for example ? it would’ve been really difficult for us to be able to attract and employ that type of intelligence and experience. So with the joint ventures, we have a strategy in effect to grow and primarily to attract that skill that we do not have in-house and for all practical reasons, could not afford to have in-house.
How to reach: JBS United Inc., (317) 758-4495 or www.jbsunited.com
The first, George McCloy, told the audience of 530 about the various jobs he has held. However, his message wasn’t to brag about his experience. It was to make a point that for each job, there were ways to earn tips from customers, be it for delivering newspapers to earning a bonus if he sold a “prime merchandise” article of clothing.
“What I really learned when I was a young person was that if you worked ethically and were set at what you were told to do, you would have a good year,” he says.
Inductees this year included Sue A. Doody, president and founder of Lindey’s Restaurant and Bar; Robert C. White Sr., chairman and co-founder of The Daimler Group, a real estate developer and construction management company, and McCloy, president and founder of McCloy Financial Services. The event was co-sponsored by Smart Business, and was JA’s 25th such event.
Even Angela Pace, Columbus television community affairs director and emcee of the event, joked that Avalon Elementary School student Sascha Smoot was so adept at the podium welcoming the guests that Sascha might replace her.
Sascha was one of 16 classmates at the Columbus gifted and talented school who attended the event that not only lauded the three inductees into the hall of fame but showcased how Junior Achievement was giving young entrepreneurs a taste of the business world.
Doody took the stage and warmed the audience with her comments about starting her own restaurant business and nurturing it to success while raising four children.
“Junior Achievement teaches students work readiness and financial literacy,” she says. “If I had known all those things when I started a business, I probably would have started out much better.”
White wrapped up with his praise for the organization.
“Junior Achievement is needed more today than at any time in the history of this country,” he says. “The demands on our youth today are huge, the decisions they have to make earlier and earlier in life are increasing. Junior Achievement recognizes this and helps establish the means to make those good decisions. I am especially proud to be associated with Junior Achievement.”
Gender diversity in corporate leadership
If a woman wants to pursue a corporate leadership role, it might be to her advantage to be a fast walker. That’s the candid advice of Rob Falkenberg, CEO of UnitedHealthcare of Ohio.
“I look for fast walkers,” he says. “I find that fast walkers are fast thinkers; they’re fast doers. I want people who are really driven, energetic and passionate about their work.”
Falkenberg was one of three CEO panelists at the Healthcare Businesswomen’s Association Ohio Chapter discussion in October. The panelists were from leading Ohio health care organizations where women are clearly succeeding in corporate leadership roles. The panelists fielded several questions from moderator Shari Tordoff, and here is the top advice from the CEOs on how women can give it their best shot:
“First of all, I would say be assertive about your goals, and also be understanding that things don’t always happen on your timetable. Be very clear about your expectations, your objectives and career, work hard for it and be patient and very flexible.” - Rob Falkenberg, CEO, UnitedHealthcare of Ohio
“Do purposeful networking ? make a list of five people you want to meet or have lunch with. And consciously do it once every two months. It can be intimidating ? let them get to know you, and don’t make them all women.” - Pete Geier, CEO, Ohio State University Health System
“Women have to ask. Women will tend to wait to be asked to get to a leader position. Be a little more aggressive. Secondly, have a willingness to be coached. View feedback as a gift given to get better than a criticism.” - Mike Kaufmann, CEO, Pharmaceutical Segment, Cardinal Health
Summary: Be assertive while being patient. Network with a purpose. Show willingness to be coached.