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Faith healer Featured

8:00pm EDT October 26, 2007

Charlie Smith saw the fear in the eyes of his employees. It was October 2003, less than a year since he took over as president and CEO at Countrymark Cooperative LLP, and the company was facing an uncertain future.

A new piece of equipment needed to be built at the company’s refinery in Mount Vernon or the plant would have to be shut down, and there was growing concern about a pipeline that might require significant funds to repair.

Employees had been forced to give up quite a bit prior to Smith’s arrival and these two costly projects certainly weren’t going to help the oil refining and marketing company’s financial situation.

“We were so close to bankruptcy for a number of years that I think people stopped having a dream of the future,” Smith says. “It’s like walking through the woods. If you are constantly looking at your feet because you’re afraid you’re going to trip over something, you’ve taken your eye off where you are trying to go. You’re not really going to get anywhere. I said, ‘You know, if we’re going to fail, we might as well fail at 500 miles per hour rather than go with a whimper.’”

With that idea in mind, Smith set out to develop a culture that would encourage employees to use their imagination and seek out new opportunities to move the 345-employee company forward.

“You have to articulate a positive vision of the future,” Smith says. “We were kind of sleepy. The cultural change was to create an environment where people felt empowered to dream big dreams and believe they could make a difference in the company’s future.”

Empower your people

Smith knew he needed to inject an upbeat attitude into the organization to turn CountryMark around. It’s up to the CEO to get employees to believe that he or she has a solution to any challenge.

“There’s no point in dumping on the employees about all the bad news if there is nothing they can do about it,” Smith says. “So you just stay positive. You have to. Leaders have to believe there is a way out.”

Smith recalled one of his first meetings when he faced a number of employee questions about where the company was headed.

“I said to them after about three or four questions, ‘Look guys, things are going to be fine,’” Smith says. “Did I know that? No. But I told them, ‘Things are going to be fine. We’re going to make this. We’re going to make this because we’re going to work hard, and we’re going to find ways to improve, and we’re going to make good decisions.’”

Smith decided one of the best ways to get CountryMark employees feeling good again was to get them directly involved in the solution. He began with the pipeline project.

“Rather than spending a bunch of time overengineering it with outside people, we said, ‘Look, we’re going to get a team of pipe fitters and welders, and we’re going to create a team,’” Smith says. “They’ve got a year to do it. Just tell them, ‘This is your budget, this is what you have to do. Now go make it happen.’ They owned that. That was their thing.”

By engaging people from within the company who possessed the skill sets he needed, Smith was able to get the pipeline problem solved and give employees a needed morale boost.

“They embraced that task like they were working on their own house, and they went off and made it happen,” Smith says.

Often, employees are willing to do a lot more than you think to help their company get out of trouble. Sometimes, they just need to be asked.

Build consensus

One of the worst things a CEO can do in a crisis situation is to surround himself with people who agree with everything he says and does.

“If you get differing opinions, not hostile opinions but differing opinions, then the debate begins. Through that debate, I believe the right answer tends to emerge,” Smith says.

When he made the decision to reallocate some of CountryMark’s capital funds to improve the efficiency of refinery operations, some employees felt they were being shortchanged.

“We took some capital, and we reallocated it away from some operations into others,” Smith says. “Some of the operations where it came from, some of those people weren’t really happy.

“We need to be a team that can professionally accommodate dissension and work through conflict. That, I believe, is how we make the right decisions. If anybody thinks they have got a monopoly on good ideas and the right answers, they are probably one step away from failure.”

Through clear communication about the reason for the funds reallocation, Smith was able to get everyone on board with the plan and take another step in bringing CountryMark back. Of course, the winning idea in a recovery plan does not always have to come from the CEO.

“I know that we’ve done things that some of my staff has probably thought, ‘Why are we doing this?’” Smith says. “You explain your logic, you explain why, and you let them voice their opposition and you sincerely consider that. I’ve been around enough smart people to know I’m not one of them. I could easily have missed something.”

Smith says a leader can be solidly committed to a plan and still have questions.

“In the back of my mind, I’m always questioning the plan,” Smith says. “Have we got it right? What if this happens? What if that happens? How might we react? How do we keep our options open? And at times, that can drive people nuts when you change your mind.”

The idea is to build consensus and get everyone pulling in the same direction.

“I’m willing to let people that work for me make decisions that I would disagree with because it’s their job to make those decisions,” Smith says. “It kind of works both ways. Through that interaction, there’s enough respect and enough confidence that people are going to try to make the right decisions.”

Show them you care

One day, early in his tenure at CountryMark, Smith showed up for a meeting at the refinery wearing blue jeans and a hunting jacket.

“Somebody came up to me after the meeting and they said, ‘Are you sure you’re the CEO?’ I said, ‘Yeah, why?’ And he goes, ‘Well, you don’t really act like one, and you don’t look like one.’ I said, ‘Well, I could have worn a suit, but would that have made you feel any better?’” Smith says. “You walk that line about being a leader that’s in control and that’s confident about the future, and yet never takes themselves too seriously.”

Employees need a reason to believe in what their CEO is telling them, especially in cases where a company has struggled. By dressing down, Smith was sending the message that he was accessible and a member of the team.

If you want employees to really buy in to your plans, you also have to show them that you care about their lives outside the workplace and that you’re not just a boss looking at a bunch of numbers.

Smith says it’s an easy mistake to conclude that a leader has to be charismatic to be successful. What’s more important is that a CEO finds a style that is comfortable for the individual. The key is to find a way to engage employees in discussions that are both open and honest.

“You tell them what’s going on with the industry, and you tell them what’s going on with the company, and you tell them what the good news is, and you give them some insight into the challenges and what we’re doing about it,” Smith says.

He gets this information out via an annual formal presentation about the company and also gives out his direct phone number so that any employee can call him.

“I’ve been to dinner with employees to hear them talk about the things they are frustrated with,” Smith says. “Some bosses have lunch with people, and they script them, and people are picked based upon people that aren’t going to ask difficult questions. They might as well ask, even if I don’t know the answer.”

Through continuously working the lines of communication with employees, Smith started to see employees buy in to his plan to turn CountryMark around. Each success the company demonstrated got them to buy in a little more until everyone was working toward the same goals.

Monitor your progress

As CountyMark’s fortunes began to turn and profits began to grow, Smith faced pressure to dole out big raises and throw a big party. Instead of simply breathing a sigh of relief and reveling about the black ink, Smith wanted to know why his company was faring better.

“We say, ‘OK, how did we do versus our plan, and how much of that was because of what the market gave to us, and how much of that was stuff we did ourselves?’” Smith says. “Sometimes organizations make the right decisions and do all the right things and the marketplace doesn’t allow them to make much money. Other times, the marketplace can allow them to make a lot of money and they make all kinds of mistakes.”

Smith says it comes down to looking beyond the numbers. “When something goes one way and you ask why it happened, and they say, ‘I don’t know,’ the ‘I don’t know’ answer scares me,” Smith says. “You say, ‘OK, how do we figure it out?’... It’s wondering why did we achieve what we achieved, what were the root causes, and what were the wins and losses that management had control over?”

When the analysis reveals that the company is on the upswing, it’s easy for you to want to open up the checkbook and give everyone a big raise for sticking with the organization through the challenges.

Smith says he could have done that as the numbers began to turn at CountryMark. Sales have grown from $346 million the year before he arrived to nearly $1 billion in 2007.

“If we were always going to enjoy this level of profitability, we’d be happy to give you this kind of raise,” Smith says. “But I worry about when it’s going to go away. So if I give you a smaller raise, but a lump sum, the lump sum isn’t buried in our cost structure forever.”

Smith says he overheard many employees saying that they had received a bonus.

“No, you didn’t get a bonus,” Smith says. “This is part of the salary administration. ... It gives you something to do something with. It’s allowed us to not have our ongoing costs increase as much as they might have otherwise.”

The plan falls in line with Smith’s effort to always keep an eye on the future of the company and the people who work for him.

“We talk about wanting people that desire to be a servant or leave a legacy,” Smith says. “Leaving a legacy is not, ‘I want a statue of me when I’m gone.’ Leaving a legacy is, ‘I’m really here for the long-term betterment of the organization, not for my own personal gratification.’ We’re trying to preserve something of value for the next generation of employees and management. It’s sort of a moral obligation. ... As long as you articulate that, I think people follow.”

HOW TO REACH: Countrymark Cooperative LLP, (800) 808-3170 or www.countrymark.com