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Mike Stayton built one brand from two legacy companies Featured

8:01pm EDT May 31, 2011
Mike Stayton built one brand from two legacy companies

Mike Stayton had a problem. It was 2008, and he was trying to create a business that would be the market leader in contract utility locating during one of the worst economic downturns since the Great Depression.

“My analogy was trying to change a flat tire on the road while the car is still moving down the highway,” says Stayton, founder, president and CEO at U.S. Infrastructure Corp.

Stayton and a group of partners purchased SM&P Utility Resources and Central Locating Services in late 2007 to form USIC. The 3,600-employee company had two unique cultures that would need to be meshed into one if Stayton was going to achieve his goal.

“Creating a brand and taking two previous legacy companies, which is what I like to call them, and raising their brand level to a new level was my first challenge,” Stayton says. “We took the first year and a half to integrate the two companies and create one way, the USIC way, as opposed to the way the other two companies were operating.”

Stayton chose to first focus heavily on the cultural integration, because there wasn’t much he could do about the recession.

“You don’t know where the bottom is as the economy is sliding into the recession,” Stayton says. “You don’t know what level to keep your overhead at and your staffing levels. It was a constant moving target.”

So Stayton focused on the cultural integration by talking to people. He wanted to talk to a lot of people. He wanted to meet with them face to face and share his vision for the company and get their reactions. It wasn’t something he could do through a single town-hall meeting. Not when he had 41 locations across the country, each with employees curious about the new company they were all now a part of.

“It was my management challenge to get them on my page for the vision,” Stayton says. “So I had to gear myself up. Otherwise it would have been a flop.”

Just do it

You need only look at the breakdown of employees by where they work to see why Stayton felt it necessary to hit the road to sell his plan for USIC.

“Our headquarters is here in Indianapolis, but there are only 80 people out of the 3,600 that are here,” Stayton says. “So we’re a very decentralized organization. I don’t have the luxury of everybody being here and being able to address them. So how do you create this brand and this unity in the USIC way in a decentralized organization? We had to work very hard to overcompensate for the geography differences.”

Stayton wanted to visit each office and explain where he was coming from as well as find out where the employees were coming from. As a result, he hoped to have an idea of how they could all find their place in the new company.

“My presentation was twofold,” Stayton says. “One was to present the vision of what the new company was all about and why my partners and I bought the two companies and put them together and what we were going to do for them to take them to the next level to be part of that. The second part was more tailored depending on what their needs were and how well they were performing.”

When you’re meeting with so many people, both for their sake and your own, you need to keep the message simple.

“You have to set a couple of key objectives,” Stayton says. “In our business, we’ve distilled that down to three objectives, which are productivity, quality and safety. If you take care of those three things, the financial objectives take care of themselves. But by setting clear targets, that’s only half of it.”

And here’s where the stumbling block comes for many businesses. Stayton explained three key objectives he wanted his employees to focus on. But if you stop there and don’t check to see what your employees need to meet those objectives, success will be tough to achieve.

“If they don’t have the resources to achieve those targets, you’re going to lose face with your organization,” Stayton says. “They won’t believe in what you’re doing. As we talked through in those initial meetings what they had and what they didn’t have, it was imperative for me to deliver on the resources they needed to meet those objectives. Then I could hold them accountable for meeting those objectives on a monthly basis.”

In order to learn what everybody needed, Stayton hit the road. He knew it would take a lot of energy to visit all 41 locations and make sure that employees at the 41st location felt just as valued as those at the first.

But if that’s a problem for you, you should ask yourself how badly you want to achieve your goal? What is your true level of commitment to making it happen?

“It’s not unlike somebody acting on Broadway,” Stayton says. “They have to get out there six days a week and perform and be up for the show even though they’ve performed Phantom of the Opera 235 times. My enthusiasm and passion for creating the market leader allowed me to gear up for every meeting. When you think about it, I couldn’t create the market leader without each of these management teams and technicians doing their job properly.”

Don’t be a dictator

The face-to-face meetings, beneficial as they may have been, weren’t going to be enough on their own to build a cohesive new brand. Stayton needed to create an integration team, one that truly would play a role in melding the two former independent entities into one.

Stayton’s first tip on integration teams: Don’t stock it with a bunch of managers.

“It just seems to me that getting people involved that are actually doing the work helps you reach a more complete decision,” Stayton says. “Management has to be involved in it. But the people actually doing the work, the ones who will be using it, they are the ones that also need to be involved. You get your best results that way rather than just superimposing a new system that they have to relearn and may or may not buy in to.

“They know what works and what doesn’t work. Whether it’s a billing system for our customer or a payroll system or an accounting system, it’s the actual people doing the work on the teams. They were led by a manager. But the actual people who had to do the work and live with the resulting system were involved in the decision-making process, because they know it better than anybody else does.”

One of the things that made this process tricky was the fact that both companies Stayton and his partners had purchased had authoritarian cultures.

“I knew that I had to create an environment that would allow people to start expressing their opinions freely without reprisal,” Stayton says. “That was a problem they had before. To allow that debate to happen is extremely important. Let people understand that it’s OK to agree to disagree. It’s OK to give your opinion. There are no bad opinions. There’s no risk to you doing that. We’ve made a lot of progress on that, but it’s still not where I want it to be. We’re getting there, but my job is to create an environment that will allow key players to get to the right answer by interacting with each other, not by my dictating something.”

Stayton was trying to build an organization where everybody felt a strong attachment to the whole team. So he let the integration team hash out such things as the type of finance system that the company would use or its operating system or HR policy without interference.

“I could have dictated that upfront and we probably wouldn’t have gotten it completely right, but it would have been a lot simpler,” Stayton says. “But that wouldn’t have done any good.”

Of course, when one system was chosen, another system was rejected. Stayton made sure the people who had pushed for the system that was rejected got a full explanation as to why their way wasn’t chosen.

“I had to circle back and explain to the group why I didn’t pick their system or their process and why picking the alternative would make us a stronger company,” Stayton says. “Had I not circled back and explained to them why I felt it was better in the long term, I think that probably would have caused their feelings to fester and they wouldn’t have become participative. As I circled back and gave them the rationale and made sure they understood why we did what we did, I found that made all the difference in the world.”

If you explain to people why you’re doing something a certain way and the rationale behind the decision, that’s usually enough to earn their support.

“If they understand something and understand why a decision was made that will lead to their success, they can come to grips with it,” Stayton says. “But if there is some unknown reason and they don’t know why you made the decision and it doesn’t seem logical to them, they’re either not going to be a team player or they’ll probably leave.”

Set some goals

As work progressed through those initial phases and more concrete plans began to be made, it was time to give employees a clear sense of what was expected of them. They needed to know exactly what their role entailed in making the company go.

“You have to first decide what the key levers are that you want to measure that you think are important to your business,” Stayton says. “That’s got to be the essential starting point. Figure out what everybody needs to know collectively and how you’re going to set your targets for the year.”

Again, this needs to be a collaborative process. Employees who know what the systems are and know what the greater goals are need to have a role in figuring out exactly how they will be measured in using the systems to help achieve those goals.

“A person’s objectives have to be achievable in their own mind,” Stayton says. “If they’re not achievable in their own mind, they’ll dismiss them as being out of reach. Then they will be cast adrift. It’s very important when we set the budget for the year and objectives for everybody at the beginning of the year that we measure them against that they have input into that.”

Based off the input gathered from employees at all levels speaking with their direct reports, USIC puts out a daily dashboard each morning.

“It starts with the technician in the field,” Stayton says. “He or she gets their individual dashboard on how they did yesterday and year to date in their key metrics of quality, safety and productivity. That rolls up to the supervisor, to the district manager and all the way up to me. I have one for the entire company every morning that is up to date through yesterday. Having that dashboard in front of them, I hope it keeps most of them focused.”

By staying laser-focused on the creation of this new company and not worrying about things he couldn’t control, such as the recession, Stayton was able to put USIC on a good track for the future.

“You’ve got to have confidence in your management team and the systems and the culture that you’ve built that it’s strong enough to withstand adversity,” Stayton says. “If you don’t have confidence, I don’t think there is anything I can tell you that would make you feel better. I wasn’t doing the integration. I had to rely on a lot of people to do it. If I didn’t have confidence in those people, I probably wouldn’t have gotten a lot of sleep.”

How to reach: U.S. Infrastructure Corp., (317) 575-7800 or www.usicinc.com

The Stayton File

Mike Stayton, founder, president and CEO, U.S. Infrastructure Corp.

Born: Battle Creek, Mich.

Education: Bachelor of arts degree in biology and chemistry, Wabash College; master of science degree in international commerce, George Washington University

What was your first job?

I was a paperboy for the Indianapolis Star. It taught me if I didn’t get up in the morning to deliver the paper, a lot of people would be upset. I was affecting their life by my decisions.

Who has been the most influential person in your life?

Ted Englehart was in the venture capital business and was an early mentor of mine. Most recently, Jim Morris and I worked a lot together when he was president of the water company and then he and I were with the United Nations World Food Programme together. He is now president of the Pacers.

Ted was very helpful in looking at new business situations and understanding their strengths and weaknesses. Jim Morris taught me the value of dealing with people properly and getting the right people in the right slots to help you do anything. Jim arguably has the largest Rolodex in Indianapolis. He’s got more done here in Indianapolis than most people have done. But that was a valuable lesson on how he treated people.

What is the best advice anyone ever gave you?

I learned at a very early age that treating people like you want to be treated and, with respect, is an extremely important way to live your life.

If you could sit down with one person in the world, past or present, who would you choose and why?

I did that with my father before he died. He lived to be 91 years old and had a lot of experiences.