Tony Reisz wasn’t facing a company on the brink of ruin or severe financial issues. He was facing something much worse: apathy.
“It was our own internal culture and leadership,” says Reisz, the president and CEO of 500-employee Ontario Systems LLC. “What became blatantly obvious to me was the culture and leadership had created a limitation to growth. The culture was the lifestyle business type of culture. ‘We’re comfortable. Why do we need to grow? We have investors, but so what. They’re making money. How much money do you really need to make?’ Leadership had allowed that culture to take place.”
Ontario provides software to collection agencies and hospitals to help them collect their bad debt. The company had some nice products that customers were interested in buying, but sales had hit a plateau. The effort to continue developing new products and technology just wasn’t what it once had been.
“This had been a pretty successful company, 30 years in business, that had reached the medium-sized level but had stagnated from a growth perspective,” Reisz says. “Solid customer base, good product suite but had literally stagnated. I had a huge challenge ahead of me. One was to convince the organization that growth was a good thing and not a bad thing. Two, really reposition the entire company to put it on a growth attitude.”
The economy had begun to spiral into what would become a deep global recession. Reisz knew this presented an opportunity for Ontario as companies would be stepping up their debt collection efforts and would need software to do it.
He just needed to show his people the potential they had and weed out the elements that had caused the company to stagnate. So he decided to begin by showing them a wet diaper.
Demonstrate the problem
OK, so he didn’t really show them a wet diaper. But this metaphor, which came from the studies of Dr. Behnam Tabrizi at Stanford University, seemed like a good place to begin to convince everyone at Ontario that they had a problem.
“It’s very visual, and it certainly is a great representation,” Reisz says. “You have to put somebody in a position where they recognize that they’re not comfortable. You have to change. In order to do that, you have to create that wet diaper so somebody absolutely has to change.”
Reisz got the attention of his staff by making it clear that at that moment, no one’s job was considered safe.
“We made it really clear at the beginning of this that no one in the company had a right to a job,” Reisz says. “We were going to be evaluating them over the next 90 days. Their leadership, their character, their results, their performance. We were going to be reorganizing the business based on the new strategy and based on what we learned from them during that 90-day period of time. That was going to determine where they were going to be placed in the new organization.
“So for them, it was also a tryout. You’d be surprised how easy it was for people who normally were adversaries to find a way to work together, because they had a common goal. They knew they were being evaluated.”
It’s not just about creating fear. You can’t just get up and talk about the need for change without figuring out what needs to change. If you don’t give your people a chance to be part of the effort to make that change happen, you’re not going to accomplish anything.
So Reisz took 50 people from the roughly 600 employees in the company at the time and developed teams to analyze all aspects of company operation.
“I empowered them to diagnose the patient,” Reisz says. “I empowered the teams to come up with the plan. I empowered them to create the actual details of how we were going to accomplish it. I met every week with them to make sure that we were removing obstacles from the way and that they were making progress. What I wasn’t doing was impeding them or micromanaging them about what I thought about the data they were gathering.”
It has to be that way in order for it to work. You can get the ball rolling on change and explain the need for it. But you can’t make it happen on your own.
“I’m responsible and accountable for everything,” Reisz says. “The way that I accomplish it is I delegate very significant portions of that to people who are really on top of it to do that portion of the job. Otherwise, I can’t be successful. If you’re going to be a big company, a growth company, you can’t do it all alone. It’s not possible.”
Get people involved
Reisz was confident that Ontario Systems had the potential to be a successful and dynamic company. But he needed to put his people in a position where they could help him capitalize on that potential.
“We gave everyone the opportunity to not only understand the strategy but to know exactly what their role was in the execution of that strategy,” Reisz says. “It wasn’t me who walked in and said, ‘Here’s what we’re going to do.’ My job was to guide that. But they needed to be bought in to the process. They know the company better than anyone else. They are the agents for change. They are the ones that need to execute on that change. For them to own it and to say, ‘This is me. I put my name and thoughts and ideas into this,’ it becomes virtually impossible for someone not to execute on that change.”
These teams have to represent your vision for change.
“There were certain characteristics of leadership that we were looking for when we chose members to participate in this team,” Reisz says. “It wasn’t like we had everybody in the organization participating. We had an opportunity to really look at leadership and make some decisions of ‘OK, here’s the type of people we think we want.’
“Cross-functional teams looked at every facet of the business and came to a conclusion. Is this what we want to do? Do we want to be in this business? If we’re to be successful in this business, here’s exactly how we’re going to do it. And then creating the operational plan that comes out of that strategy in order for us to go back to the organization and execute on it.”
It’s critical that you put a time element on the work of these teams. You’re not micromanaging. But you are making it clear that they need to move swiftly in their work.
Reisz went with 30 days from the formation of the teams to the creation of a report.
“It forces people very quickly to get everything out on the table, because they have a deadline they have to reach together,” Reisz says.
The time element keeps people on the teams from playing the blame game or getting territorial about their own department.
“As the CEO, I was the ultimate change agent for the organization,” Reisz says. “I had a weekly meeting with each of the rapid response teams. They had to report out to me on their progress. So I was able to watch very quickly to see who was performing, who was staying in the territorial mode and who was thinking outside of the box.”
Make the tough call
At some point in a transformation, tough decisions need to be made. It’s at that point that many corporate transformations stall out, because the leader doesn’t have the nerve to follow through and make those tough decisions.
“You have to be the one who is not willing to let yourself go backward,” Reisz says. “You have to have the intestinal fortitude to stick to it when it gets tough.”
The tough time for Reisz came after the reports had been reviewed and analyzed, and it was determined that employees would need to be let go.
“As a byproduct of our new plan, I laid off a fair chunk of the organization,” Reisz says. “That in itself was the moment of truth. I had to make the tough decision. … For me to have believed that people were behind me at that point, I would have been kidding myself. That was a very tough, lonely time for me when I had to make that decision.”
However, as Reisz and his leadership team looked at the result of all the research that had been conducted by the cross-functional teams, he felt it was the right thing to do.
“We’re a 30-year-old company that has rebuilt itself into a company with new markets and a new growth attitude,” Reisz says. “The biggest transformation that we made was a talent transformation. The leadership and the talent we have in the organization today is fundamentally different from the talent we had in the company two years ago.”
Despite the positive changes, Reisz knew that there were and still are people in his company who did not agree with what he did.
“For the person who is gone, a decision has been made,” Reisz says. “For the person that stays, there hasn’t been a decision made yet. They have to make a personal decision. Is this what I want to do? Do I want to look at other options? Do I even have other options?”
Reisz conducted a number of employee surveys and shared the results with his people, even when those results did not reflect well on him personally.
“Here is a segment of the company that absolutely does not buy in to our strategy,” Reisz says. “We were very open about that, that we still have about 25 percent of the team that’s not on board with us. Here’s what we’re trying to do about that. It’s not calling people out, because you don’t know who they are and you’re not trying to find out who they are. It’s just being really transparent that we’re gaining momentum, but we still have people that are really skeptical.”
When you show yourself to be open in sharing the mood of your people, both good and bad, you increase your chances of eventually getting more support.
“By sharing those results as widely as we did, the peer pressure started to step up,” Reisz says. “When somebody started to hear somebody else at the watercooler who would be bad mouthing something or creating some rumor along the way, they would say, ‘Hey dude, what are you doing? We got stuff to do and don’t you be the one who is standing in the way of this.’ You create this kind of internal peer pressure when you’re transparent. People have an opportunity to police themselves. It’s a lot more effective than when you try to do it.”
As Reisz looks at his company, he sees a lot of progress. But it’s all about the diligence and the commitment to carry out the plan that makes the difference.
“A lot of people can lay out a great strategy or plan,” Reisz says. “But it takes a ton of everyday effort in order to make sure that you execute in order to overcome the obstacles that are going to be along the way.”
How to reach: Ontario Systems LLC, (800) 283-3227 or www.ontariosystems.com
The Reisz file
President and CEO
Ontario Systems LLC
Born: Owensboro, Ky.
Education: Bachelor of arts degree in business, University of Dayton
What was your very first job?
I was a paperboy for the Waukesha Freeman. There were two things that I had to do as a paperboy that were really important. It was a morning paper. So I had to get myself up, stuff the papers and deliver them. So it taught me a lot about responsibility.
But the second piece was it taught me a lot about how to deal with customers. I had customers who would complain that I put the newspaper in a spot that it blew in the yard or it didn’t get there at exactly the time they wanted it to. Then I had to collect money. I had to go door to door every single week and collect from my customers. That was my job.
I learned a ton about how to interface with customers at 10 years old. You’re intimidated and you have to go door to door and say, ‘Look, you owe me $1.50 for the newspaper.’ It gave me a lot of confidence. I delivered a service, and as a part of that service, I deserved to be compensated.
If there was one person you could sit down and speak with, who would it be and why?
My dad, Jerry. I lost my dad a long time ago. The lessons he taught me growing up, I’m still learning today. I’d love to sit down and talk to him again. I’d give anything to sit down and have a conversation with my dad.