33 best management ideas Featured

7:00pm EDT November 25, 2008

We’ve all had days where we would rather not open the newspaper, turn on the TV or pick up the phone for the fear of learning about more bad news.

Unfortunately, there have been a lot more of those days for all of us lately.

The stock market is going through extreme ups and downs, capital has dried up, and key customers are cutting back. You start to wonder where the sales are going to come from to enable you to make this quarter’s budget. If things don’t turn around soon, you’ll have to consider drastic cutbacks yourself.

In times like these, what’s a CEO to do? The answer: Get back to basics. Focus on the things you do best and do them as efficiently as you can. Use your strengths to exploit your competitors’ weaknesses and outhustle them.

It’s often the simple things that made you a success in the first place, and it will be the simple things that keep you afloat during the economic storm.

With that in mind, we’ve assembled the best pieces of advice garnered from Indianapolis’ top leaders from throughout the year. We think you’ll find some great ideas to help you improve your business within these pages, and we encourage you to keep this issue as an ongoing reference to help you find your way through the trying times that lie ahead.

Have no fear

Jeff Tognoni, president and CEO, Consona Corp.

One of the problems that often comes about when trying to turn around a business is actually a fear of making things worse, says Jeff Tognoni, president and CEO at Consona Corp.

“Businesses are more durable than you think they are,” says Tognoni, who appeared in our June issue. “You can push change pretty hard on a lot of businesses and not break them. That is usually what paralyzes people from making decisions. They are so afraid that if they make one change, the whole house of cards is going to come down. So they don’t make any change.”

When Tognoni analyzed his company’s data in the summer of 2003, he determined that cuts needed to be made.

“You figure out the productivity that is the right level of productivity for doing everything in the business,” he says. “... Then you cut your staff back to that productivity level. It’s not rocket science. It’s just that most people have a hard time doing it.”

Tognoni used a combination of data analysis and conversation with employees to figure out what moves he needed to make. In the end, it really comes down to your own judgment.

“You either have a good judgment about what makes a good salesperson or you don’t,” Tognoni says. “Most organizations you go into, everybody knows who the good salespeople are and who is just hanging on. The problem, many times, is that people fail to act.”

While difficult moves are often necessary, you can do a lot for the morale of those who are staying with the company by showing a little empathy.

“When you’re doing a lot of changes to an organization, going out and being rah-rah right after you’ve cut a bunch of jobs is actually counterproductive,” he says. “People go, ‘You want me to be excited when you just fired my friend.’ It’s a low-key approach, but it’s a very direct approach, and we tell them exactly why we do things. ... And we try to educate them about why decisions were made and then just ask for patience.”

Tell stories

Bill Corley, CEO, Community Health Network

Stories are a much more colorful and memorable way of conveying the positive things you’re employees are doing to others, says Bill Corley, president and CEO at Community Health Network.

“Stories are much more powerful than memos,” says Corley, who appeared in the magazine in November. “Just about every week, I will tell stories on our voice mail system to our employees about other employees and the significant impact they have had on our patients, other employees or physicians’ lives. The stories are very, very powerful.”

Corley recalled a time earlier in his career when he was a shareholder in a company that made stents for patients. It offered a lesson that stories can come from leaders but also from others both inside and outside the company.

“At an annual meeting of all the shareholders, who did they bring in?” Corley says. “Sure, the president and CEO talked, but they had either patients or patients’ loved ones talking about the stent that they made to save his wife’s life.”

You need to find ways to capture the good things that your employees do and share those moments with others.

“Tell those stories about how one of your employees handled this most difficult situation and turned it into a plus when it was headed for a minus,”

Corley says. “It’s positive reinforcement rather than, ‘Oh, somebody did something wrong.’ No, it’s somebody did something right. It really is making sure you want to make this part of your culture and then communicating it to others.”

Developing a culture around storytelling and the sharing of experiences takes time.

“Don’t expect it to be a quick fix,” Corley says.

Always seek input

Matthew Gutwein, president and CEO, Health and Hospital Corp. of Marion County

Employee input is critical to gaining buyin on broad changes in an organization.

But if you can get them actively involved in the dialogue and decisions about what changes to make, Matthew Gutwein believes you stand a much better chance of getting them to buy in to your vision.

Gutwein, the president and CEO at Health and Hospital Corp. of Marion County, says you need to ensure that everyone has a voice in your organization and realizes the valuable role he or she plays in your company’s success.

“For the head of the organization, it’s completely within their control to be able to communicate and seek the input and views of everybody so that people know they have a real stake in the success of the organization,” Gutwein says.

Gutwein and his executive team created value-added teams within each division of the hospital. Each team had a senior vice president, a manager, a director and a staff member. Their job was to look at how things were done in the organization and find a way to do it better or more efficiently.

One of the units noticed that there were four different kinds of cups on a particular shelf.

“Someone asked, ‘What are the costs of these cups, and why do we have four different cups sitting here, and what do we actually use them for?’” Gutwein says.

They studied the cost of each cup and learned that the plastic cups were close to a penny apiece, the Styrofoam cups were far less than a penny each.

“In this particular division, they were using hundreds of thousands of cups a year,” Gutwein says. “By only using the more expensive plastic cups when you absolutely had to and using the Styrofoam cups for almost everything else, that individual unit saved $78,000 annually. That is the cost of a nurse. They said we’d rather have another nurse in our department than these nice little cups.”

Gutwein says he never would have thought to examine the cost of cups. But the work inspired the rest of the organization to look for ways to save money in their own divisions.

“We literally saved millions of dollars through those value-added teams,” Gutwein says. “What we also did with those teams was we said, ‘All you have to do is save $1,000, and we will give you a $100 check.’ So you have an economic incentive. People didn’t do it for the economic incentive, but it was fun.

“Those value-added teams, overall in our financial improvement, were a relatively small impact. But I think they were important nonetheless, both for the dollars themselves and also for the mindset and the culture they created.”

Check your ego

Jim Carpenter, CEO, Wild Birds Unlimited Inc.

Jim Carpenter did not launch Wild Birds Unlimited Inc. with a background of extensive business training. The founder, president and CEO of the bird hobby store retailer had to reach outside his circle to gain the skills he needed to run his company.

He spoke about how he gained the knowledge he needed in our September issue.

“Employees are obviously excellent and part of the whole process, but they sometimes do have a hard time saying exactly what they think,” Carpenter says.

Over time, as you and your employees get to know each other, it becomes easier to have open and honest conversations.

“But it’s still good to get an outsider’s view because then they are filtering it through their experience with the dozens or hundreds of companies they have been involved with,” Carpenter says.

That first step of reaching out to others and admitting that you can’t do it all on your own is a difficult one to take for many CEOs.

“You have to get over the ego part of thinking that you should be able to figure this out,” Carpenter says. “That’s the inthe-head thing: ‘I don’t know how to do this.’ That’s really big for most people. You are really good at your product. But you have to recognize, ‘I’m not good at this, and I can’t just innately wing this.’”