Clinton Coleman was given a mission when he was named interim CEO at Bell Industries Inc. back in 2007. Bell Techlogix, a business segment of Bell that provides IT managed services was missing out on a chance to cash in on the growing demand for its offerings. It was Coleman’s job to find a way to capture that market.
Segment sales had dropped from $90.3 million in 2004 to $75.6 million in 2006, causing leadership at Bell Techlogix to lose confidence in its core business and begin searching for other ways to make money.
“That usually is a recipe for not very good results if a management team is focusing on things that don’t build upon what you already do well,” Coleman says. “A lot of that had to do with some of the previous managers’ own personal interests rather than what really made sense for the company to be focusing on.”
Bell Industries was taking a hit, too, dropping from $136.2 million in 2004 revenue to $120.3 million in 2006.
Coleman knew there was demand for what Bell Techlogix did. He knew companies were looking for a better way to manage their IT services. The effort just wasn’t being made to capitalize on this opportunity.
The board of directors at Bell Industries agreed with Coleman and installed him as the man to make it happen at Bell Techlogix, which has 608 of the company’s 714 total employees.
“Bell Techlogix really needed to reinvigorate its strategy for growing IT managed services,” says Coleman, who is also CEO at Bell Industries. “It was something that Bell did well, and they had the core competencies to do it. But over time, they really lost their way with respect to sales and marketing execution. They had lost their sales-driven focus. We needed to reinvigorate that growth where there were some good opportunities.”
It wasn’t going to be easy as Coleman had to energize his team in the midst of a tumbling economy.
“But it was what it was and you can’t really change any of that,” Coleman says. “So we just had to deal with those issues.”
See who is with you
As the new guy in charge, Coleman had a captive audience. But if he didn’t move swiftly to give them something useful to latch onto, his audience would start to lose interest and fall back into their old routines.
“I really challenged the team to realize that we can be successful doing this,” Coleman says. “We needed to do things differently and we needed to make some changes. But it was always about building around those core capabilities that Bell Techlogix has and realizing that those can be successful.”
Coleman expressed confidence that the tough economy was only going to increase the demand for the company’s services.
“We were able to identify how our strategy of growing the company in some ways very much fit with the challenges our customers were having,” Coleman says. “We help companies reduce their IT support costs while also improving their service levels. That created some opportunity for us. They were facing challenges that required them to re-evaluate the long-held beliefs that they had about IT support.”
Coleman needed his team to pick up the pace and put in the work if he was going to take advantage of this great opportunity that was out there. He began by reaching out to the managers at Bell Techlogix.
“Getting the attitude right among the managers is absolutely the first thing you need to do,” Coleman says. “If you don’t have the right attitude amongst the managers while you’re trying to refocus a company’s strategic direction for growth, while also at the same time handling an economic downturn, it’s very easy for people to be pessimistic.”
It really comes down to showing your passion and commitment and finding out who is willing to stand up and follow you.
“Who is up to the challenge?” Coleman says. “Who do you want to be working through this with for the next year?”
To begin answering those questions, he moved the company’s monthly leadership meetings away from a monotonous rundown of the financial spreadsheet.
“That was a new experience for a lot of managers making our monthly business reviews into real business discussions,” Coleman says. “Not just running through the numbers, but real discussions about what we learned this month. … You allow the senior management team to all be hearing the same thing and be participating in the same discussion. Through that process, you realize that some people are more up for the task than others as far as how they respond to that discussion.”
There was a key question Coleman needed to answer before he could move forward: Did his team understand the difference between a goal and a strategy?
“We’re supposed to grow our sales by X amount this year,” Coleman says. “That’s not our strategy. That’s our goal. Are we able to talk about what we are doing? How do our results from one month to the next indicate we’re really doing a good job in this area and we’re trying to re-evaluate this other area and look at things we can do differently.”
He needed to see who was willing to dig beyond the numbers. Who was willing to put in the time to figure out what the customer wants and then take those findings and figure out what the company needs to do in order to meet the needs of the customer?
“You need to make sure each one of the managers are in a position to carry forth the company’s vision and hold regular discussions with their direct reports,” Coleman says. “That really does flow from the top down. But that only happens if you have a broad group of managers that are all part of the same discussion of where we are trying to go as a company and what we are trying to achieve.”
The result of the initial group meetings was that some managers proved to have what Coleman was looking for while others did not.
“We weren’t painting everybody with the same brush,” Coleman says. “It was a real evaluation of putting managers in position to demonstrate how they could be part of the company’s success going forward.”
Coleman felt that lack of communication was a key reason why the company wasn’t making more money on its offerings.
“We’re not doing a good job of communicating with new customers and our existing customers about what we do and how what we do helps them with the challenges they are facing,” Coleman says. “There are other companies in the space, other midsized IT managed service providers, that have been able to have some success.”
One of the reasons companies fail to capitalize on new opportunities is that they become unwilling to analyze what they are doing and make changes to their plan.
“Every year, we would set a business plan,” Coleman says. “The important thing wasn’t that we set a business plan that remains frozen in place. … It was very important for us to always be listening to our customers and the managers and the people on the ground at Bell and the salespeople that were actually interfacing with customers every day. It was really listening to that feedback and making sure we were responding to it.”
Coleman needed to instill a mindset whereby the annual plan would be used as a guide that was fluid. It could be changed when circumstances called for it. It would not be set in stone and it would not be the sole factor used to determine whether business was good or bad.
“Companies will set a budget at the beginning of the year and for the rest of the year, you’re judged against that budget and that’s the primary measure of whether you’re doing well or not doing well,” Coleman says. “That can create a shortfall for a company. What you really need to be having is not a discussion of the budget numbers, but what’s going on behind that.”
There are a number of factors that contribute to the financials that appear on any company’s ledger. You need to talk about those factors.
“What you really need to focus on is how are the things that we’re doing every month either leading to or not leading to having success in that metric,” Coleman says. “That’s by looking at things beyond just a static budget that’s set in place and stays in place for the year. That can also lead to missing out on some of the bigger opportunities where you have more momentum than you realize and you need to have a reallocation of resources.”
When Coleman took over as interim CEO, he approached the job with a sense that he had a lot to learn. He wanted that attitude of curiosity and naiveté to give his people reason to open up and share with him their ideas to help the business grow.
If they were to be passionate about it, they couldn’t just do things because he told them to.
“It was a gradual process,” Coleman says. “I didn’t come in and pretend to be an expert on the company and the company’s business. It was one where we worked toward a more natural conclusion with the managers by using their input and building upon the realities of what’s going on in the company and what our strengths and weaknesses were rather than coming in and already having a predetermined idea of what we’re going to do and how we’re going to do it.”
You need to talk about outcomes if you’re going to move your company forward. It can’t just be a discussion of ideas that never lead to anything.
“This is how we’re going to know if we’re making progress or not,” Coleman says. “That was part of my job was to make it real for them. This whole idea of talking about the strategy to the company wasn’t just a theoretical discussion. Make it a real discussion: What are we doing this month to help us get toward those goals? It’s having an open and honest discussion about why we did or didn’t meet those goals and doing it with the entire management team so everybody is hearing the same message and everybody is part of the same discussion.”
It’s your job to make sure your people have that idea in the back of their mind about what the bigger goal is while they are dealing with the day-to-day.
“We’re trying to go and make sure all our daily efforts are working toward that vision,” Coleman says. “Remind everybody of what was the underlying strategic goal behind the metrics. What did we learn this month to indicate to us whether we’re being successful or not successful? What should we do differently next month to better achieve our strategic goals?”
In addition to addressing concerns, you also need to celebrate successes.
“In any particular quarter, one division may be having more success than the other,” Coleman says. “But by having the discussion together with the management team, it does help improve everybody’s overall morale and optimism if they are able to hear about and see the successes that other areas of the business might be having in that particular quarter toward the overall strategic vision.”
As Coleman looks at his company now, he sees progress. Sales for the Bell Techlogix segment grew from $62.9 million in 2008 to $66.1 million in 2009 and Coleman expects 2010 to show even more growth.
“Working through the economic downturn didn’t really help us in achieving those goals as quickly as we would have liked,” Coleman says. “But we’ve gotten to the point where we’ve rebuilt our entire commercial sales team. Last year, we had success in growing our IT manager service business at a pace it hasn’t grown in years and years. We’re doing a much better job of communicating with our customers and packaging our services in a way that customers are demanding it.”
How to reach: Bell Industries Inc., (866) 782-2355 or www.bellind.com
Clinton Coleman, CEO,
Bell Industries Inc.
Born: Cleveland, Ohio
Education: Double major in physics and economics, Vanderbilt University. I spent my junior year at the London School of Economics and Political Science. A lot of it was exposure to international culture and international ways of doing business. The makeup of classes is from all over the world. It was intellectually stimulating from that perspective, but it was also a lot of fun. I spent a lot of time backpacking around Europe and doing things that you only get a chance to do when you’re that age.
What was your very first job?
I was a busboy and also did the salad bar prep for Steak and Ale restaurants.
Who has had the biggest influence on you?
Rick Leaman, [former] head of mergers and acquisition in the United States for UBS. The first job I had out of college, I was in the mergers and acquisitions group at UBS in New York. So I was working on Wall Street doing M&A investment banking work.
I worked with him on a number of deals. He took a lot of interest in me, and he allowed me to tag along with him at board meetings and negotiations with management teams at a bunch of different companies. He kind of took me under his wing and allowed me to get exposure to the corporate decision-making process at large companies in a way that is very difficult to replicate when you’re 22.