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Inside or out Featured

7:00pm EDT January 26, 2009
It’s a question that every CEO faces when looking to develop leaders in a growing organization: Do you promote from within and rely on the internal knowledge and expertise gained by loyal employees who have been with you for an extended period of time, or do you bring in fresh faces from the outside who can shake things up a little and challenge the status quo with some new ideas?

The fact is that it takes a little bit of both, says Marvin Richardson, president and CEO of Arcadia Resources Inc.

“At a senior level, you’ve got to find people who are dedicated and share a common vision on where the company is going instead of having opinions that may differ from the leadership.”

But it would be a mistake to look for people who are simply going to agree with everything you say and do.

“A lot of people want to hear validation that what they are doing is correct,” Richardson says. “I couldn’t care less about that. What I want to know is are we doing what’s right and is there a better, more efficient way of doing it?”

Since Richardson came to the $151 million provider of home health care products and services in early 2007, he has hired four new executives. In each case, Richardson says he was looking for both a friend and a critic.

“You want to get along and you want to make sure when you are interviewing people that the personalities fit in well with what you are doing,” Richardson says. “But I’m also looking for people who are not afraid to tell me, in an interview or otherwise, what they think about the business and what their philosophies are.”

Here’s how Richardson found the right mix of leaders, both internally and externally, to keep his 5,000-employee company moving forward.

Engage employees

Soon after Richardson arrived at Arcadia in early 2007, the decision was made to revise the company’s mission, vision and values. The core of the new company mantra was to constantly focus on finding new ways to help patients both stay at home and stay healthier for longer periods of time.

Richardson could have drawn up a new mission statement and code of values and unilaterally made them policy at Arcadia without any input from others. Instead, he sought to engage employees in the effort, because developing leaders from within your company means giving them opportunities to be a part of important initiatives and decisions.

“You’ll never get them there if you’re telling them what to do, because sooner or later, they stop thinking on their own,” Richardson says.

“You lose creativity, and you lose your ability to problem solve because everybody is waiting on you to make a decision about what you are going to do rather than them making a decision based on the information they have gathered. You’ll become a lot less effective as a company because you’ll grind to a halt while everybody is waiting on the CEO to make a decision.”

Meetings were held throughout the company to gather feedback from employees and hear about what mattered to them at Arcadia. Information was dispensed through company newsletters and through the Web.

“We get out and see people and talk to people and we’re in front of people talking about where the company is going and how we’re going to get there,” Richardson says. “The key is making sure that the people around you, your management team, is communicating effectively with the group.”

The key is taking the responses you get and incorporating them into the project for which you are seeking input. That’s what engages employees and that’s what gets them on the path to personal growth and advancement.

The result of this effort at Arcadia was an employee base that felt more a part of the team.

“I got a lot of feedback and notes from people saying, ‘I get it. It’s nice to know where the company is going. I understand clearly what I need to do. I need to understand my role in the company,’” Richardson says.

“That’s the critical step because you do that and people want to stand up and line up around a vision. The company makes sense and they want to succeed and move forward and be promoted and do those kinds of things.”

It’s these types of projects that will open your eyes to employees with leadership potential.

“You’ve got an employee that becomes more confident in the job they are doing because they are making decisions and those decisions are building confidence for them,” Richardson says. “You get somebody who can make decisions on their own and ultimately you want somebody that is going to develop over time who can take on more responsibility.”

Assess your talent

As you begin to identify your company’s future leaders, you need to keep track of what they’ve done and the attributes that stand out in demonstrating their leadership potential.

“We have a high-potential list that we’re developing within the company to start looking at what is the next level of managers and executives in the company,” Richardson says. “At least every six months, we’re sitting down with that high-potential list and talking about where people are in their careers and what they are doing. As we need people, we’ve got opportunities to identify candidates within the organization that would fit some of those spots.”

Identifying traits in employees who are not your direct reports is difficult to do. So as the CEO, you need to ensure that your leaders have their eyes open.

“It’s tough for me to go out and make an assessment of somebody because it’s going to be for a short period of time and it’s not going to encompass their overall work effort,” Richardson says. “I’m going to leave that more to our managers to make those determinations of people they think are ready. We certainly will talk about people that are high-potential people within the company and talk about their strengths and weaknesses.”

In order to get the best assessment of an individual, you need to get reviews from people who worked with them, above them and even below them as well as from the individual you are assessing.

“It’s interesting to see what they think they are doing well and what they think they are not doing well, and then compare that to what your assessment is and people around them,” Richardson says. “You begin to understand why people are acting a certain way or doing a certain thing based on that evaluation.”

It’s at this stage where you have to rely on your judgment and have confidence that you made smart moves installing your various departmental leaders.

“I try to tell them what I think the strengths and weaknesses of that particular area within the company are and the changes that are going to need to be made to make it better,” Richardson says.

“How they make those changes and how they put that team together is entirely up to them. ... I’m not going to tell them how to get it done. I’m going to set the vision of the company and the strategy of the company along with the board. What I want to do is let them manage the process and come through it with a way of dealing with it.”

You need to let your leaders develop their own teams of individuals that they feel comfortable working with.

“If you do it in reverse, what happens is your executives inherit people that may not be their people and may not be people they identify with, feel comfortable working with and know well,” Richardson says. “You’re putting that executive in an uncomfortable position. Make the decision you need to make for the management team and let them begin to identify their decisions.”

Hire carefully

A resume can tell you a lot about a person. But when you’re looking to develop a group of leaders that can work well together and take your company forward, you need to know more than their batting average and RBI total from last season.

“For me, it’s sitting down with them two or three times and talking with them about our company and our vision and seeing what their reaction is and getting feedback from them on what they believe, how they manage and how effective they are and seeing if there is a fit,” Richardson says. “Having chemistry and having a fit is probably the single most important thing.”

When you are interviewing someone, it’s most likely for a senior management position. Take care to eliminate any distractions that might take away from your focus during the interview.

“It’s anywhere you can be one on one with a person for a period of time and not be distracted by cell phones, BlackBerrys and phone calls,” Richardson says. “Have enough time to understand who they are and their backgrounds and why they made the decisions they did along their career paths. All those are critical elements. If they are in a good position today, why are they looking for something else? You begin to get a sense of their personality and whether they are a good fit in your company.”

Your opinion will obviously play a critical role in whether you decide to hire a particular individual or not. But you shouldn’t put the entire burden on your own shoulders. Get feedback from others, as well.

“You want other people to talk to them,” Richardson says. “Those are the ones they are going to work with. If one of your executives talks to a person that you’re hiring for a particular position and doesn’t feel comfortable with them, that’s going to be an issue. It’s important that you get feedback from the group.”

It could also be helpful to put potential hires in front of someone who will be reporting to them to get another’s thoughts, as well.

The key is to get beyond the resume and find out how the candidate will fit in at your company with the people who are already there.

“How do you handle certain situations?” Richardson says. “How do you plan on putting a team together? You know our mission, vision and values. How are you going to contribute? What are you going to bring to the table that somebody else can’t bring?”

Richardson says that he has become a better listener with age and experience, whether it’s with prospective new employees or employees who already work for him. It has helped reinforce to him that he doesn’t know it all.

“When you are younger, it’s more difficult to listen because you get into a position and you think, ‘OK, I have to be tough and I have to be a leader here because if I’m not, people aren’t going to respect me,’” Richardson says. “As you get older, you figure out that’s not the way it is. You can learn a lot by listening. In doing so, you get good ideas and good information and all that is helpful.”

HOW TO REACH: Arcadia Resources Inc., (317) 569-8234 or www.arcadiaresourcesinc.com