On a Saturday in early March 2010, Will Knecht was delivering some product for customers when he got a call on his cell phone, “Will, come back to the forge, it’s on fire.” He hustled back to find his flagship store, corporate offices and work shop of Wendell August Forge up in flames.
Knecht, president of the company, a retailer and manufacturer of handcrafted metalware and giftware that employs 106 people, couldn’t believe what he was seeing. As firefighters went to work, Knecht says he didn’t think the damage was going to be as bad as it ended up being.
“As that was burning, I had a very interesting peace about me that day,” he says. “I wasn’t anxious, I wasn’t stressed; it was what it was, and I really trusted the Lord that he knew what he was doing even though I didn’t.”
As the fire roared on, more Wendell employees came to the site where Knecht led them in a prayer, which ultimately set the tone for rebuilding and moving forward.
“As we broke that circle it was absolutely like the lights had been turned back on, and we were all about what do we do next. What are the next steps? What do we need to do to get back up and going?”
To add pressure to getting back to work and refocused, the company had just landed its biggest order in its history.
“We got an order from the Pittsburgh Penguins … two days before the fire,” Knecht says. “We were able to create 20,000 replica tickets of the last game at the Mellon Arena and we were able to deliver those on time.”
The Penguins order was a game changer for the company and following the fire it helped to keep Wendell August motivated and in business.
“That order took on added significance because it was the rallying point,” Knecht says. “We were going to deliver that and it put everything in focus.”
The first step Knecht had to take was to rally his employees and change their demeanor from wondering what was next to focusing on getting past the fire.
“As you can imagine … there was a lot of fear,” he says. “This fire wasn’t the end of the game. This was the closing of a chapter or the closing of a book on Wendell August and at the same time, that day was the opening and writing of a new book. We conveyed that confidence to each of our employees and said, ‘We’ve got to go about getting it done now and turning this around. This is a temporary setback, but we’re going to be OK.’”
Knecht did everything he could to continually communicate that Wendell August would make it through this hardship.
“Having faith, for me, was the cornerstone, but what that gave me was a sense of purpose and direction and clarity that it was incumbent upon me to communicate,” he says. “My job became the chief communicator inside and outside. I had to provide the stability. They had to see in me a calm and peace, strength, confidence, and they had to see a future focus.
“Bad things are going to happen. It might not be a fire, but a company might lose its biggest account. A company might lose a key employee. The leader’s job is to overcommunicate a sense of calm, a sense of focus and a sense of direction. That’s what we were able to do immediately after that fire. You have to communicate that clearly, directly and consistently. That’s what they needed from me. They didn’t need me to make the product or make a big sale. They needed me to calm and steady the ship.”
Eventually the company got itself back on track, and Knecht had to keep his employees motivated.
“When you go through a cataclysmic event like we did, it’s all about the here and now and getting us through today,” he says. “Then you change gears when you get through an event like that and you have to execute and get back to business basics. You’ve got to stay the course. You need to overcommunicate and you as the leader need to become the bridge to move on to the next phase of life. Put it behind you and change your demeanor, communicate and focus and then begin to throw the vision forward and cast that vision for the employees.”
HOW TO REACH: Wendell August Forge, (800) 923-4438 or www.wendellaugust.com
Wendell August was opened to exciting opportunities because of the fire and being forced to think in new and different ways.
“There is a realization on all of our parts that we are an almost 90-year-old company, so we’ve got a tremendous foundation, but we’re basically rewriting the book and we have this blank canvas now to paint on,” says Will Knecht, president. “There’s an energy and there’s an excitement about some of the new directions we’re headed.”
The Penguins order put the company into the realm of licensed products, which is today a big focus that the company is moving on significantly as part of the future.
“That Penguins order … and the success that we had with that allows us to talk to some teams in Major League Baseball and the NFL and other NHL teams,” he says. “You have to look outside of yourself and think differently and open your mind. One of the things we did was we weren’t stuck in a ‘This is how we’ve always done it.’ We as a company opened our horizons and we looked at what the possible was. What can we do now that we have this great foundation of a company yet a blank canvas to paint? That’s what I would challenge business folks who go through an event such as this to open their mind to the opportunities sometimes you don’t see when business is going as business as usual.”
How vividly I remember learning to sail. It was at summer camp during junior high. The instructor explained the relationship of sail and wind, the rudder, and leaning with my body. He emphasized how the sailor must monitor and quickly adjust the variables, while navigating toward a specific destination.
It all seemed logical until I got into the boat and actually tried it. I remember how counterintuitive it was to tack left in order to go right. I felt overwhelmed at the need to adjust so many things simultaneously while also focusing on my destination. And the wind was so unpredictable. (I drank a lot of lake water that summer.)
As my sailing prowess improved, one thing quickly became apparent: success depended heavily upon my response to the wind — the unpredictable wind. Etched into my head was the learning: Sometimes, you need to tack left in order to head right.
I have seen this at play as I have coached executives to develop and progress in their careers. Sometimes, they need to tack left in order to head right. If you wait for the wind to pick up and fill your sails, you may find yourself sitting idle for a long time: waiting, wondering and missing the chance to advance by heading in a direction slightly different from the one they were expecting.
Many executives are finding that to move ahead they need to “tack left” and develop capabilities and career paths that differ from their expected course.
Here’s the proof: In a recent study, a colleague and I interviewed sitting CEOs of 27 Fortune 100 companies asking them, “What best prepared you for the CEO job you now hold?” The No. 1 response was not “running a bigger business unit.” Instead, No. 1 was “running a standalone business unit outside of the United States, with full P&L responsibility.”
For many, this job meant leaving a bigger business unit they were running in the U.S. — or a bigger function they were currently leading. This is not the usual sequence of career development. But the experiences gained in this slight detour taught these CEOs how to work in multiple currencies, in emerging markets, where English was not the first language. They had to know how to set up, implement, and nurture business partnerships and collaborations. They developed new sensitivities by living in another culture. Upon reflection, most of the CEOs saw this as their most valuable preparation for becoming CEO of a global company, and yet most of them did not predict it would be part of their development.
When you face a wind that stops your sails, or starts to take you in an unexpected direction, pause and ask yourself, “What do you really need to learn or demonstrate in order to be successful? And does this rerouting actually help you get there?” Remember that sometimes a lateral move or a half-step change can allow you to acquire skills and experiences you will need later on.
Whether sailing or running a business, we all know that the wind is neither predictable nor steady. It can rise and force you to act quickly, and it can die even faster, leaving you idle. The key is for executives, like sailors, to seize the wind and sometimes be prepared to tack left when you expect you will be heading right. Truly examining the equation for your success may convince you that tacking left to head right will not only enhance your capabilities toward your planned goal, but it just may unlock new opportunities you’ve never even thought about.
Leslie W. Braksick is co-founder of CLG Inc. (www.clg.com), co-author of Preparing CEOs for Success: What I Wish I Knew (2010), and author of Unlock Behavior, Unleash Profits (2000, 2007). Braksick and her CLG colleagues work with executives to help them navigate the unexpected winds of business. You can reach her at 412-269-7240 or firstname.lastname@example.org.
George Washington once said, “To be prepared for war is one of the most effectual means of preserving peace.” The same could be said about a business being prepared for disaster; it is certainly the most effective way to preserve peace of mind.
In the aftermath of Sept. 11, financial institutions located at or near Ground Zero discovered they had not designed their data security systems to withstand the degree of devastation caused by the terrorist attacks on the twin towers. Since then, a flurry of fierce hurricanes hitting the Gulf Coast states has tested the data security systems of businesses from Texas to Florida.
In the event of disaster or even a simple hardware failure, would your company’s critical information be secure? Answer these questions to find out.
- Does your business have processes in place to systematically replicate and secure data that is critical to its ongoing operations?
- Does your business house its backup data in a location that is geographically remote from its primary location?
- Do multiple employees know how to access the backup data to maintain business operations?
If you answered no to any one of the questions, your company may not be able to recover the data necessary to effectively maintain operations following a disaster. You’re not alone. Many small or midsize companies do not have a fail-safe disaster recovery plan in place, but failing to develop a plan can be costly for you and your business.
While it is relatively easy to measure the costs to replace lost equipment, it is far more difficult to assess the less tangible costs that result from business downtime. Businesses have to consider the costs of lost sales, lost customer goodwill, lost productivity, missed contractual obligations, as well as the increased costs incurred when attempting to make up these losses. Needless to say, having a recovery plan established that helps a company quickly recover data and restore normal business operations can minimize these potential costs.
In its “Summary of ‘Lessons Learned’ from Events of Sept. 11 and Implications for Business Continuity,” the SEC recommended that businesses operate with two or more widely separated active sites for critical operations so that one provides inherent backup for the other. The strategy addresses a number of key vulnerabilities by eliminating dependency on availability and relocation of staff, reducing the likelihood of telecommunications single points of failure, supporting maximum geographic separation, and assuring business continuity through actual use rather than infrequent and less-than-complete testing.
Obviously, creating and maintaining redundancies is costly and impractical for many small to midsize businesses. However, partnerships with professional service firms can help to serve the same purpose. For example, professional employer organizations manage integral administrative functions, such as human resources, benefits, and payroll processing for their clients. Subsequently, a PEO can protect certain critical data by housing and maintaining redundant systems and administrative files for clients at a separate geographical location.
While most professional service firms, like PEOs, legal firms or accounting agencies, would never consider themselves in the data storage or recovery industry, following Sept. 11 and subsequent disasters like Hurricanes Katrina, Rita, and Ike, such firms recognize this as an added benefit they provide their clients.
John Allen is president and COO of G&A Partners, a Texas-based HR and administrative services company that manages human resources, benefits, payroll, accounting and risk management for growing businesses. For more information about the company, visit www.gnapartners.com.
All Steve Shifman is hearing and reading today is how companies aren’t hiring, aren’t investing and aren’t growing. While that has certainly been the trend over the last couple of years with economic uncertainty still looming, Shifman has had the opposite challenge at Michelman Inc., a 250-employee global developer of water-based coatings for flexible film packaging, paperboard and other products.
“We’ve kind of bucked the economic trend during the downturn of the last few years,” says Shifman, president and CEO. “We continue to expand both here in Cincinnati and also around the world, and we’ve continued to hire.”
The company hasn’t been cutting costs or staying conservative to ride out the uncertainty. Instead, Shifman and his employees are embracing the position they are in and are hiring top-level talent and developing strategic plans to allow the company to keep growing for years to come so the organization can capitalize on its opportunities.
“It’s not growth for growth sake,” Shifman says. “Growth is important because we know that by doing that, we can continue to bring in the kinds of capabilities, skills and tools that will help our customers to win.”
Here’s how Shifman developed and led a strategic growth plan to allow Michelman to achieve its mission of helping its customers and continue to grow.
Formulate a direction
A strategic plan helps paint a picture for your organization of where you ultimately want to take the company. It provides a clear direction and strategy to get you there.
“We’ve made some decisions on the kinds of investments we’d like to make and what we’re prepared to do in order to grow the business a little bit more rapidly, particularly because we’re trying to find new solutions to help customers to win,” he says. “We started serving some of these industries and we recognized there’s more growth potential within these industries. There are more needs that need to be filled, let’s go invest around those industries so we can bring in new solutions and hire new people and build new facilities that will help us to serve those industries better.”
Shifman took this focus on customers and industries and made it the top priority for Michelman’s strategic plan.
“It’s very important to start with the customer in mind,” he says. “There are different ways you can organize a business. There are some businesses that organize around their production and they’re primarily manufacturers and some businesses are primarily around technology and those are right for them. In our case, our business begins and ends with our customers and we understand the markets and the industries we serve so well, so we start with those industries and with those customers and then we try and understand the kind of skills we need to serve the customers well — the kind of resources, assets, the kind of depth, the kind of distribution networks, etc.
“You have to understand who you’re serving. Understand what their needs are and help them to understand not only their needs today, but the needs they’re going to be facing over the next five or 10 years. Help them look around the corner to figure out where their businesses are going. Everything starts with the customer, starts with the industries and the markets that we serve and then we work closely with those industries and those customers to figure out where we think the future is going and then come up with our tactical plans to get there.”
In order to understand who you are serving you also need to understand the marketplace.
“We very much take an outside-in view of the marketplace,” Shifman says. “What I mean by that is we’ve organized our businesses around sets of customers in certain industries that have similar problems or similar challenges. That’s important to us, because instead of being a company that simply sells products, we’re a company that really focuses on industries that have needs and then we build solutions for those industries and then we build teams of people around these industries that have expertise. We work to hire people out of the industries that we serve. They understand the industries, they speak the language, they understand the challenges, and they can help us design solutions for those industries in a way we feel many of our competitors can’t.”
While there are many ways to put together a strategic plan and countless reasons for one, all those differences are moot unless you have smart people to help you.
“You have to get really smart people in the room to be part of the process,” Shifman says. “Plans created by one or two people off on high and handed down to the masses and say, ‘Here, go implement,’ tend to be less successful than those that are created by people who are actually going to be involved in executing, particularly in a business like ours where understanding the industries and understanding the customers is so critical. Also, have a grand vision. I believe in setting very large strategic goals for our company that challenge the company. If you really want to improve in something, set big goals. Don’t set them in the abstract. Set them because you know that by achieving these goals, you’ll continue to create a better place for your organization in the marketplace.”
A strategic plan or new direction will only be a success if you can build buy-in around it and gain support for what you hope to achieve. To do this, you must focus on communication.
“I’m a lucky guy, because I get to spend most of my time talking and communicating within the company and then also going out and seeing customers,” Shifman says. “It starts with me because the person in my seat in any organization has to be the one driving the grand vision. So it was incumbent upon me to have a big picture for where I thought we could take the company. We spent a lot of time as a team, first of all, making sure we’re all bought into this grand vision, because if the entire team is not bought in, then it’s probably not going to work. We work very closely together and we work very hard to make sure the team is completely aligned around it. Then it’s an awful lot of time spent with other members of the organization.”
Alignment is critical to the success of any strategic plan. To achieve that alignment you have to have the necessary communication tools.
“We do have some pretty well-tested communication tools that we use,” he says. “I spend a lot of time personally with our business units and business unit leaders visiting our facilities around the world and our people who are out in the field. It’s a lot of regular communication. It’s one-on-one communication. I write a letter to all of our employees every month that I send home, because I want their families to read it. We have lots of company-wide meetings and we have video conferencing systems. It’s just an ongoing communication process. It’s not a one-size-fits all and it’s not a once in a while, it’s constant. Can we do it better? Of course, there’s always a way to improve upon it, but I think it’s something we focus on a lot here and we make sure we are working hard to keep people aligned with what we are trying to accomplish.”
To aid in the communication efforts and provide total understanding of the tasks required by your employees, it helps to be transparent.
“One of the words that I try to live by is transparency,” he says. “I happen to believe that there are very, very few secrets within our business. We try to make our plans and our objectives and our results within our organization transparent, because it’s hard to hit a target you can’t see. If you make it transparent and you make people a part of the process and treat them like adults, they’re going to behave like adults and they’re going to be part of the process.”
It’s not enough to be transparent on one aspect of the plan or be transparent only for a little while. You have to make transparency and communication a big part of the strategic planning and buy-in process.
“It’s about transparency and it’s about rigorous, regular, constant, robust communication and dialogue,” he says. “Nothing is off limits to talk about, to debate, and to discuss within our organization. It may not be right for everybody, but within our organization, that really contributes to the culture of Michelman. It makes everybody feel as though they’re a part of the business, they’ve got a voice, they can assert an opinion. They’re not just told to do something. They understand why they’re being asked to do something. They have a chance to really debate and discuss that so that they know they’re a part of something bigger, they’re not just doing a job on a daily basis. It really is something that’s been baked into the DNA of our organization.”
Measure your plan
While a strategic plan begins with a vision for the company, a clear mission of what you’re trying to accomplish and the support of your organization, none of it will be beneficial if you don’t measure your plan on a regular basis to make sure you hit goals.
“We’ve got a lot of robust systems in-house that allow us to measure our business on a day-to-day basis, but we also have this high-level strategy map and balanced scorecard that tell us that we’re moving in a perfect strategic direction,” Shifman says. “Our strategy map is our high-level map of where we’re going strategically and we use a balanced scorecard. The balanced scorecard is not how we manage the business, but it helps us to know that we’re on our strategic path.”
The steps to measuring your strategic plan are to first, have a plan to measure and second, be sure to collaborate with others on your team.
“Many people just operate on a day-to-day basis and there’s probably no long-term plan of where they’re trying to take the business,” he says. “At Michelman, we have a very solid past and that past has helped to inform who we are today and we also have a very clear picture of where we’re trying to take the business. And that picture isn’t something that I keep to myself. It’s one that I have approved by my board. It’s one that my executive team is actively involved in helping to create. It’s one that we communicate actively and we share transparently.”
Once you have a plan and vision in place and buy-in from the company, you have to make sure you discuss and measure specific areas of the plan.
“Make sure you’re debating and checking that plan so it isn’t just something that you pull out of thin air, but something that you’ve actually imbedded and something that a team can buy in to,” Shifman says. “Measure yourself against the plan and be willing to adjust if things change. We have long-range plans, but it’s like talking about a battle plan — once the bullets start flying sometimes the plan gets tossed out the window. Our plan is not tossed out the window, but sometimes reality on the ground forces us to adjust our plan, so we need to remain flexible.”
Remaining flexible is exactly why you have to constantly measure your performance against your plan, otherwise if things change, your plan won’t be effective.
“Be willing to change that plan slightly if things that are happening dictate some needs to change the plan,” he says. “You have to also surround yourself with extremely good people, because it doesn’t matter how smart the person at the top is, it really comes down to the people on the team who are really helping to build the organization and execute the plans.”
No matter the reason for your strategic plan, always understand what you are trying to achieve.
“We need to continue to grow in order to continue to build the resource capabilities that our customers are demanding from us,” Shifman says. “With growth come the resources to be able to invest in new facilities, invest in new technologies, invest in new skills and new people.”
HOW TO REACH: Michelman Inc., (513) 793-7766 or www.michelman.com
The Shifman File
President and CEO
Born: Springfield, Ohio
Education: Graduated from the University of Colorado and received an MBA from Xavier University
What was your first job and what did you learn from that experience?
I worked on a beer delivery truck in Springfield, Ohio. I was a driver’s assistant. I wasn’t even old enough to buy beer, but I schlepped cases of beer off the truck into bars and restaurants. I realized just how hard people work. I also worked in a warehouse for these guys and there was zero training and one of my first days they tossed me the forklift keys and said, ‘Here, go move this pallet.’ We had guys regularly putting forks through the tops of trucks and you’d see pallets full of beer and wine falling off of the forklift. I realized that’s not the kind of work I wanted to do, and getting an education was going to be really important to me.
What is the best business advice you’ve ever received?
Surround yourself with really smart people. Recognize what your real strengths are and build a complementary team of people who have the skills and experiences that come together to create an organization.
What is your definition of success?
We define success at Michelman, first and foremost, by whether or not we are helping our customers to win. If we help our customers to win, then we have a right to win as an organization. Personally, I think success is adding value and giving back and being a part of something bigger. I’m a lucky guy. I have a chance to run what I think is an outstanding organization and I also have a chance to work actively in the community. I feel like I’m successful because I’ve got a beautiful wife, wonderful kids and a great family.
What are you looking forward to in your industry?
All I hear about and all I read about today is how people aren’t hiring and people aren’t investing and people aren’t growing and everyone is waiting for a signal from the government before they do anything. In our case, I couldn’t disagree more. Over the last number of years during a period of uncertainty, we continue to hire, we continue to invest and we continue to grow. I’m looking forward to the next few years because we plan to do a lot of the same. We’re on a rapid growth path, because we believe very much in the future of our business. I’m excited about our growth opportunities, because we’re not waiting for others to figure this thing out.
Last month’s column featured my ideas on how and why salespeople should not think they are involved in “sales cycles,” but rather to approach them from the needs of their customers who are involved in a “buying cycle.”
Seek not to sell
Prospective customers are seeking to buy but they are not seeking — and often resist and resent — efforts to be sold. I like to phrase a sales person’s job as that of an “assistant purchasing agent” rather than a sales agent and use the term “servant sellers” to convey this role at Cincom. The emphasis is on the idea of a servant seeking to help prospects buy what they value, want and need rather than focusing on what the seller wants to sell.
Seek to help buy
To further emphasize my point, I have begun to think of this buy cycle metaphorically as a “bicycle.” I offered a few analogies last month as to how a bicycle and a buy cycle were similar, such as: The importance of the wheels on a bicycle — the front wheel provides direction and represents the strategy and vision for a buy cycle. At the same time, the rear wheel is the source of power or fuel that energizes the cycle. Strategy and direction have to be present along with energy and action in a corporation if a sale is to be made.
I’d like to expand upon my metaphor now to help others better understand the idea of a bicycle and the importance of this servant selling idea by breaking it down into the various parts of a bike.
A bicycle uses ball bearings to reduce friction. Grease makes the bearings smoother and less resistant. In order to grease the buy cycle, you must be proficient at both the technical evaluation cycle as well as the economic and emotional aspect of the evaluation.
Like a bicycle, if a business stops moving forward it will fall over. Unlike a bicycle, a business does not have a kickstand that can preempt the gravitational pull, so a business must be constantly moving forward or it will fall over.
The front fork of a bicycle holds the front wheel that allows the rider to maneuver and balance the bicycle. Maneuverability is very important for those who are looking to optimally be servant sellers to a prospect. Maneuvering is typically of competition during the early and developing stages of a market. Almost every great company establishes themselves by maneuvering themselves into a position where it is considered the best choice for a specific customer’s desires, needs and interests.
There is a certain skill that comes with braking. Knowing when to use the front or back brake, when to brake on curves and when to brake for animals is not only a control means but a safety aid, as well. Braking in a race or when riding in a group is also a commitment because of your effect on other riders. Know when to pull back and when to lay off the brake.
Cranks and pedals
These are the tools that are used to move the bicycle forward. These are the receivers and transmitters of the power and energy of the biker. Emotions and feelings are powerful motivators. They influence why we buy and who we buy from. When sales reps are not focused on being servant sellers and are unmindful of these powerful and often overriding emotional factors, or are unable to skillfully anticipate and advantageously use these forces, they seldom succeed in a buy cycle. Emotions and motives are the cranks and pedals of the buy cycle, a relationship that is built on trust will power the sales cycle. Then, when mixed with emotion it will propel the buy cycle forward.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. http://tomnies.cincom.com/about/
Dr. Lee Ponsky could not stand by and do nothing. He had just returned from a trip to Nigeria and watched as doctors used empty bread bags for surgical gloves and fishing line for stitches, putting patients at great risk during otherwise routine surgical procedures.
Ponsky discovered hospitals discard more than 2 million tons of medical surplus every year, including a whole lot of medical supplies and equipment that can’t be used due to strict regulations in the United States. These items would be of great benefit, however, to the people of Nigeria and other places where clean supplies are so scarce. He just needed a way to redirect the surplus to these people whose lives could be saved.
MedWish International was founded by Ponsky in 1993 to do just that. His goal was to create a non-profit organization that could facilitate the recovery and repurposing of otherwise wasted medical supplies and equipment. He founded MedWish in his parents’ garage just prior to beginning medical school at Case Western Reserve University.
The organization, which Ponsky leads as president, has grown quite a bit from those humble beginnings. MedWish now has a 38,000 square-foot home and is saving lives around the world. Over the past five years, it has recovered over 2.2 million pounds of lifesaving medical supplies and equipment from over 50 U.S. hospitals and has shipped aid overseas to 90 countries since its inception.
Ponsky’s drive and determination is fueled by the opportunity to help people who really need it. He is confident that he can do even more and continue growing MedWish International’s reach to help more and more countries. His efforts have saved lives and at the same time, lessened the load on the landfills where these tools were destined to end up.
HOW TO REACH: MedWish International, (216) 692-1685 or www.medwish.org
It happened so fast that no one really noticed how spread out things had gotten at AMS Fulfillment. The third-party fulfillment service company had grown from 80,000 square feet to 500,000 square feet in just three years.
“We took a step back and said, ‘Wow, we’re operating our fulfillment business out of seven buildings,” says Jay Catlin, president and managing partner at the company of more than 200 employees. “It’s not necessarily ideal to be running your business out of that many different buildings in our space.”
Catlin and his leadership team felt like the company needed to consolidate a bit and have a larger presence in fewer locations.
“It’s a situation where you say, ‘Wow, we’re really growing,” Catlin says. “But just because you find a way to get an order fulfilled and out the door doesn’t necessarily mean you’re fulfilling it in the most efficient or effective way. So after running all this business out of the various facilities, we took a step back and said there is a way to do this better. We need to commit to coming up with an operational infrastructure that’s going to benefit ourselves and our clients.”
It was time to sit down and talk out the best plan of attack to meet this goal of better operational efficiency.
“If it’s not managed properly, meetings like that, you can run into some inefficient dialogue where people are talking over people and so forth,” Catlin says. “We lay out the framework. This is the situation and these are various options we have.”
You’ve got to have some sort of framework of a plan in mind before you begin the discussion. But you probably want to keep it to yourself as the meetings begin.
“Our job at that stage is we don’t want to force our opinions on the senior troops underneath us,” Catlin says. “We want them to give their ideas and advice without it being influenced by our own thoughts. So we hear everything that they have to say and then as we’re helping to direct conversations and so forth, we’re sharing our thoughts on what might be positive or negative with any particular approach.”
In the case of AMS, there wasn’t a lot of debate over what needed to be done. The company needed to commit to longer term leases and make capital expenditures to get those buildings ready to be more permanent facilities. There also needed to be an effort to make sure client relationships were strong.
Your tone in how you approach these discussion meetings will go a long way toward making them effective.
“Whoever might be directing traffic, if that person is one who is combative or emotional in the way they conduct the meetings, it’s just going to breed more of that,” Catlin says.
You need to maintain an even keel and make sure you let people have an opportunity to speak without being interrupted.
“If you get into a situation where you’re not able to finish your thought process, it’s very frustrating and not very effective,” Catlin says. “There is a goal in mind of everybody having a chance to share their thoughts completely and everybody having a chance to respond.”
You also need to make sure that people are doing their jobs and being held accountable for tasks they may be assigned along the way.
“If somebody comes in and we’re supposed to have a meeting about one subject or another and it seems like they are not prepared, we’re not out to embarrass anybody,” Catlin says. “But just in the course of asking questions and looking through what they have to talk about, we’ll just naturally find they are not prepared.”
If it becomes a habit, try meeting with that person after the meeting in private to discuss it.
Catlin says it’s a problem he doesn’t have at AMS, which has allowed the company to address some of its concerns.
“We’ve had a chance to get caught up and move ahead of our current business activity to better prepare to manage our current and future needs,” Catlin says.
How to reach: AMS Fulfillment, (800) 931-4267 or www.amsfulfillment.com
Get it on the record
You may think that because you’ve labeled a meeting as important, that everybody will remember everything that is said. But if you don’t have a formal process to document the business of the meeting, that’s not too likely to happen.
“It can become hearsay afterward,” says Jay Catlin, president and managing partner at AMS Fulfillment. “You’ll hear, ‘That’s not the way I remember it,’ or ‘I don’t recall talking about that.’ If we’re having a meeting about something where we’re going to be taking some action or there’s some change in place, it’s best to have the function leader writing up all the notes and then sending out a confirmation e-mail.”
Catlin takes documentation a step further at AMS, a third-party fulfillment services company with more than 200 employees. Important topics become a spreadsheet file that is maintained and accessible on a shared drive on the company’s computer network.
“So at any time if you’re going about your business and you think, ‘Oh wow, here’s another thing we could talk about, you could just go onto the shared drive and type an additional line item onto there. Here’s an area of concern, here’s a possible solution. Then the next time we have a meeting on the subject, that issue will be up there.”
As he looked around at his executive leadership team, Alain Couder saw no clear disorder or conflict. The reason that his company’s leadership was not effective had nothing to do with a particular leadership style or group dynamic. But then again, the issue wasn’t really what people weren’t doing at all. It was that they didn’t realize what they needed to do.
“They didn’t know what they didn’t know,” says Couder, the chairman and CEO of Oclaro Inc.
Oclaro — the product of two startup companies worth more than $200 million apiece — had quickly emerged as a tier-one company with potential to reach No. 1 in its core optical and high-powered laser markets. After completing three more acquisitions, it had risen to third in its industry and become an employer of thousands of people around the globe. Yet, that meant many of the $393 million company’s employees, who had come from smaller companies, now lacked the skill set required to operate in a larger, global company.
“To get all of those startup people and turn them into a company that can be operating at $500 million in revenue and get to $1 billion was my biggest challenge,” Couder says.
Choose the right people
With a career that included working at both large corporations and small startups, Couder knew from experience that Oclaro was not prepared to scale for the next phase of growth.
“Because of my background working in companies like IBM or HP or others that are really well-structured and well-organized, it was clear to me that Oclaro was not that way,” he says.
So he began the process of putting in place a new leadership structure — one that that made sense for Oclaro’s new size and objectives. He hired an external consultant to go into the company and take stock of its operations, people and processes. By using an outside consultant to evaluate his team, he was able to eliminate partiality and really find out who would be able to help scale the company.
“Specifically what you learn is that they go into the company and see how you operate,” Couder says. “They see what information systems you are doing. They speak to your managers and then they tell you, ‘This guy knows what he is doing and this guy needs to learn or needs to be replaced.’”
After getting this feedback, the first decision Couder made was to replace three of his key executives. While these personnel decisions can be difficult to make, a CEO has to be confident that the leadership team he or she has in place will be able to lead effectively when moving to the next stage.
“I choose an executive team that is appropriate for the size of the company,” he says.
“I make sure that I treat the people who are leaving well, but that I put in place people who are stronger and can help me scale the company to the next level.”
When you are growing a company significantly, you want to bring on executives who have experience and past success in their area of expertise. They also need to have the right personality and values to be a good cultural fit at the company.
“[It’s] are they going to be able to work in a constructive fashion with the rest of the team?” Couder says. “If you bring in someone who has a very different set of values than the ones that you have in place for the company now, then it just doesn’t work well.”
How do you identify the people who can scale successfully?
“It’s talking about what you want to achieve,” Couder says. “You create a dream of what can be achieved and then you explain what it takes to do it.”
When you start doing that, you’ll have some people who are enthusiastic and some people who start to resist change.
“I work with them and coach them and try to help them improve, but at some point in time when the company scales, some people are going to scale with the company and some people are not,” Couder says.
Once you’ve explained the vision, it’s more worthwhile to focus your time and resources on the people who seem energized about the vision for growth rather than on to trying to convince the opposition.
“You need to spend the time with the people who are enthusiastic and forget about the other ones,” Couder says. “Otherwise, you spend all of your time with people who are resisting and then do nothing in the end.”
Eventually anyone who has a “wait and see” attitude will either leave the company or decide to be part of the change and move with the enthusiastic people. The best thing to do is respect people’s motives and then focus on who can help you grow. While two of the executives that Couder replaced remained within the company, the third one left.
“They are able to drive their own lives and their own convictions,” Couder says. “And that’s fine. That’s part of change management. Not everybody is happy in a larger company. Some people are much happier working in startups and they should go work in startups.”
Empower your people
Leading an organization with more than 3,000 employees meant Couder and his executive team needed to start shifting their attention to more of the big-picture goals and high-level decisions of the company.
“You always need to shoot for the No. 1 position,” he says.
That means people lower in your organization need to shift to take over new responsibilities and decisions, as well.
“When you scale a company, you want to be able to move the decisions lower in the organization,” he says. “So this is the notion of empowerment.
“In a startup, the CEO is at the center of everything, is aware of all the decisions being made, in touch with every customer — he is involved in all of that. As you scale the company, if the CEO continues to do that then the CEO becomes a bottleneck.”
When you take a set of people with a startup mentality and ask them to manage in a larger, more structured corporate environment, you need to give them the right tools and support to be successful in that culture.
“It’s then helping the people you choose succeed in what they are doing,” Couder says.
“And as a result of that, the CEO becomes increasingly in charge of setting the right direction.”
To empower his managers as decision-makers, Couder implemented a global management training program for leadership teams all across the company. The three-day training program included approximately 80 managers and included twice daily training on leadership best practices.
“We coached them on leadership, how to make decisions, how to coach your team, how to train them, how to make them go, how to make them passionate about what they do, how you can create a team that is going to win together and all those kinds of things which are so important to success,” Couder says.
You and your people both want to feel comfortable with them making decisions independently. So first, you need to spend time giving them context of how to make those decisions and their impact on company.
“This is a part of the delegation and control,” Couder says. “As the company gets larger, I delegate more and more, but I want to make sure that we still have the proper controls in place and make sure that everything is moving the way that it should.”
By giving managers leadership best practices and skills that they can pass on to their teams, you push those practices out and the organization itself can become more nimble in decision-making for growth. Moving forward, a good measure of your team’s empowerment is how many decisions get pushed up in the organization. If it seems like too many, sometimes giving yourself some distance to think and reevaluate your own decision-making process can help you gain perspective. It also gives management a chance to brainstorm new ideas independently.
“One of the pitfalls is to always be acting and acting,” Couder says. “In fact, if I take a week of vacation, the team always comes back with new ideas and new things to be done.
“As you have a larger company, the best ideas are in the company. The CEO doesn’t need to have any ideas. He just has to listen.”
Dance to the same music
Lastly, when you are talking about scaling a global, multicultural organization such as Oclaro, which has operations in Europe, R&D in North America and manufacturing in China, to more than $1 billion in revenue, everyone in the organization needs to be working toward the same goal if you are to have any chance of success.
“You need to get the whole team and the whole company to be pushing and pulling in the same direction,” Couder says.
“So it’s also to encourage people to talk to each other and to learn from each other.”
That is where internal communication becomes incredibly important.
“There are three dimensions to the flow of information, top down, bottom up and also networking at the company level,” Couder says.
For a company that is growing very quickly, it’s vital to have good communication so that everyone’s expectation is clear and employees can work in harmony across different departments, divisions or operations.
“We need to make sure that we learn the same dance and that this dance fits the music,” Couder says. “Before in the company, you had different music and different sides and different dances, and therefore, the cooperation inside was a lot more difficult.”
To get everyone on the same page, Couder created a cross-functional task force to simplify and streamline some of the company’s key processes such as product life cycle, and train everyone — executive team included — on a set of leadership best practices. Part of that training included learning a standard vocabulary for operations that would be used by everyone in the company worldwide.
“You create a common language and that helps to have everybody dance to the same music across the company,” Couder says.
“When we talk between different geographies between China and the U.K. or California, we have the same terms and the same words,” Couder says. “We know exactly what we are talking about. There is now no ambiguity in what we want to do.”
When it comes to top-down communication, Couder believes that there is no replacement for meeting with your team in person.
“Through the questions, I get a pretty good understanding of what they know, what they don’t know and what kind of progress they are making,” he says. “That is one measure I use, and unfortunately I can’t find any replacement for travel. Video conference is great, but it doesn’t work for that. …You need to feel and communicate your actions with the people.”
Couder schedules a half hour with each of his direct reports three times a month to talk about their progress and maintain alignment on the organization’s goals. Whenever he travels, he also meets with his leadership teams during brown bag lunch sessions to find out what is working, what isn’t and offer his support to meet any challenges.
With a strong, empowered team that has everyone pulling in the same direction, Oclaro is no longer a bunch of pieces, but one united company that can scale successfully for growth.
“If you want to be able to be organized as a company, you can be empowered but within a certain context, within a certain set of processes and methodologies and tools that are common to everybody in such a way that it boosts harmony in the way we work,” Couder says.
“We know that we now have the best practices and the tools, and the means and the people involved to be able to compete in a much more effective way.”
How to reach: Oclaro Inc., (408) 383-1400 or www.oclaro.com
The Couder File
Chairman and CEO
Education: Paris, Ecole Superieure D’Electricite
First job: Teaching in Africa at the Abidjan University
What would your friends be surprised to find out about you?
I have raised six kids and have nine grandchildren.
What do you to regroup on a tough day?
Hiking in the mountains is my favorite getaway.
What is your favorite part of the job?
Do you have an innovation tip?
You always need to invent a better way of doing what you do, a better way of communicating, a better way of writing a memo, a better way of making a presentation. It’s not only about product innovation. It’s about finding ways of doing things better in a smarter way. It’s about working smarter, not only harder.
Couder on choosing the company’s name: Oclaro is the new name that we choose to merge Avanex and Bookham. We are big believers that when you merge two companies of similar size and you have one which is acquired and the other which is the dominant … by adding a new name and a new set of values, that helps in fact create a new company. Oclaro stands for optical and clarity, which is how we created the name.
Andy Wexler is a man in search of the right mix. As founder and executive camp director at Pali Camp, he has often struggled to find the right balance for how quickly to grow the 221-employee camp operator.
“Sometimes I tried to grow very quickly before the business was ready and I put in a large management team and the business couldn’t support that, so I had to cut back,” Wexler says. “Other times, I grew too big without bringing in a management team, and we had growing pains.”
Wexler has found the most success when he has taken the time to work with his people and share his knowledge to help them become better leaders in the company. It puts them in a better position to handle whatever new responsibilities arise.
“Over the last five years, I’ve gone through showing them how to run each one of their businesses like their own business unit and have them basically take responsibility,” Wexler says. “So they’d not only be responsible for their revenue but their expenses, as well. It’s been a fantastic learning experience because every one of them now has ownership of their division. We have a cabinet meeting every week where everyone says if they are on goal and what their plan is for the week and then I let them do their thing.”
Reaching this stage of empowerment requires that you find strong people when you make hires.
“The first thing that I do is when we post a job, I’ll ask very specific questions,” Wexler says. “I want to make sure the person was meticulous enough to read the job description. It’s shocking. I’ll get 300 resumes and only maybe 15 to 20 percent actually read the job description. So at that point, out of 300 respondents, I’m down to 30 or 40.”
The candidates that make it through to this point are then judged on their cover letters.
“Did the person write a cover letter that was actually interesting to read?” Wexler says. “Did it look like they actually spent a little bit of time looking at whatever the position is? They could have asked pointed questions or they could have pretended that they were interested or maybe they really are interested. Once you get down to that, it’s probably about seven to eight people. Once I get there, I would see what their background is and see how long they have been at past positions.”
After whittling it down to a final four or five people, Wexler conducts in-depth interviews with each candidate to attempt to really get a good read on who is the best fit.
“The biggest thing at that point where people shoot themselves in the foot is if they complain about their last job,” Wexler says. “If someone just says, ‘I grew too big for the job’ and I call their employer and they say this was the best person they ever had, that’s the person I’m going to hire. If it’s a person who rips on their last job, they are just going to do the same thing for me.”
When you take this process seriously, what you end up with are people who believe in your vision and can walk with you to help your business grow. Then it’s all about you following through on your promise to let them grow as leaders.
“It’s all about motivation,” Wexler says. “If the manager is willing to put in more hours, then the employees will put in more hours. Education takes as long as it takes. If you really need to do something, as the manager, you can do it yourself and do the serious learning later on. If you really want people to learn and fish by themselves, however, that takes longer.”
How to reach: Pali Camp, (909) 867-5743 or www.paliadventures.com
Pick a direction
You need to figure out what kind of leader you’re going to be and stick to it. If you like to take on different leadership personas, you’re asking for trouble.
“You can’t micromanage some days and not on others,” says Andy Wexler, founder and executive camp director for Pali Camp. “Just like with parenting, kids are very comfortable with routine. It doesn’t matter how tough the rules are, if they’re consistent and they know what the rules are, they can live within the rules. An employee would be the same thing.”
So if you’ve tended to be a micromanager and suddenly, you look to ease up a bit, you’ll have to work hard to be convincing that you really want to change your ways.
“If you say, ‘I’m going to let you do this,’ they’re going to be shocked first of all,” Wexler says. “They’ll either freak out or they will really appreciate it. They probably won’t believe it. But your actions have to follow your words.”
If you find people have gotten too used to being micromanaged, it may be a case of that person not having the skill set to make decisions on their own. Give them a test of responsibility and see how they handle it.
“Let them go with it,” Wexler says. “It’s probably not the most vital business area, but it gives them a taste.”
Do you think about what your employees want to hear from you when you speak to them? Or do you worry more about what you want to say? You need to be conscious of both, but sometimes it’s easy to get so consumed with your own message that you lose sight of your audience. What are they supposed to do with your remarks? How should they respond to what you say? What if they have questions and feel uncomfortable approaching you? What should they do then?
In the past few months, Smart Business has spoken with several leaders about this very issue. Check some of their thoughts and see why they believe communicating is about more than putting your words on paper and reciting them for your employees.
“It’s probably far more important that we understand how those who work for us want to hear things and want to communicate. It’s not about my dominant style. It’s more about what that individual who works for me needs.”
-- Jean Birch, president, IHOP
“I can’t necessarily get all my employees to follow me unless I get out there and inspire them. If you’re not communicating with them, they are expending energy every day and they are expending it in different directions. … The job of a leader is to harness all of that energy and get it to move in unison like a flock of birds or a school of fish.”
-- Adam Coffey, president and CEO, WASH Multifamily Laundry Systems LLC
“You win the hearts and minds of the people. Not because of charisma or because of empty rhetoric. But because you have a substantive idea that makes sense and they see your optimism and they see your excitement.”
-- Mel Elias, president and CEO, The Coffee Bean & Tea Leaf
Summary: Think before you speak; Harness employee energy; Develop your idea