Ron St. Clair Featured

7:00pm EDT December 26, 2007

Ron St. Clair says there are similarities between politics and business: At the center of each, says the president and CEO of Thorntown-based Stalcop LP, has to be a belief in the sometimes messy process of democracy. St. Clair strives to get everyone involved in forming the vision and direction of the $35 million manufacturer that specializes in metal forming. To do that, he solicits input from all of the company’s approximately 300 employees based in the U.S. and Europe. It’s a time-consuming and sometimes tedious process — something St. Clair likens to making sausage — but without it, he says you will find it extremely difficult to build your company effectively. Smart Business spoke with St. Clair about why it’s important to get everyone involved and how to keep employees engaged.

Democracy can be messy, but pursue it anyway. There is no easy democracy. Take the town-hall meetings you’re seeing in the presidential race.

You have certain people who don’t want to change anything, you have certain people who want to change something. Each one thinks their idea is the best. What we have to do in this democratic process of where the company is going, what we want to do, is you’re setting a clear direction, but how you get there is really important.

To get the buy-in from everybody, you have to take the time to really bring the people together, and that’s what I call sausage-making. It’s very easy for me, as the CEO, to come in and say, ‘This is what we’re going to do, steps one, two, three, four, five, go do it.’ But if you don’t get the democratic implementation, it never gets done.

So from my perspective, I say, ‘Let’s spend the time upfront, get the appropriate buy-in, make sure we’ve chosen the right objectives,’ then once we’ve done that, it’s easy for me to say, ‘Discussion over, objective one belongs to this person,’ and they either perform or they don’t.

Once we’ve democratically determined our collective objective, then I implement with a very autocratic focus. We’ve elected, now it’s not democratic anymore, the specific objectives and resources. So once we’ve democratically chosen our direction, I autocratically hold people accountable.

It’s a messy process, but you don’t get anything done otherwise. You might think you control the company, but nothing happens. If you don’t get people talking about these things and at least give people the feeling that they are participating, unless they are the one assigned the objective, they’ll only give begrudging support to it.

This approach lets people really become involved in how we set the company, where it’s going to go, why it’s important we go in certain directions. It allows people to understand more about the dynamics of the business versus, ‘Shut up, I told you to do it.’ Everyone working here is a bright, articulate person, they just have different job skills, and you want to know why you’re doing something. It’s about more than just the paycheck.

Map out a strategy. One of the key tools we’ve used over the past several years is called strategic mapping. This is something that was developed at Harvard, but what we’ve done is applied it to a mid-sized company instead of a large corporation. The strategy map is a physical document that shows how we create value for our customers and the actions we’re taking to lower costs and improve revenue.

If you don’t measure it, it doesn’t get done. It’s very easy to use the nebulous, ‘We want to be the best company in the world, we want to be a lovely company, we want our employees to love us, our customers to love us.’ What does that mean?

Without having very specific measures for financial, operational, customers and internally for your people, you don’t know whether you’re truly making progress. It’s very easy to say we’re working on these things, but you never know if you’re going to accomplish them or if you’re headed in the wrong direction. You have to have concrete measures or you’re not going to accomplish anything.

It’s similar to FedEx when they first got started. They absolutely guaranteed your package would be there by 10 a.m. Everything was focused on getting it there by 10 a.m.

Set and review goals. We spend quite a bit of time doing something called catalytic coaching. It’s different from performance assessments. You sit down with someone and tell them what you need them to do for the company.

So for high-potential people, we’re using a variety of tools that way, and the old management-by-walking-around. We spend a lot of time getting out with the people, constantly communicating the objective for the week, the objective for the month, where are we with regard to revenue growth, where we are on specific projects and how they can help us in those areas.

We used to do annual performance reviews, sit you down, find out what you accomplished, assess a grade on a scale of 1 to 10, then throw you back out the door. It was really a nonvalue-added type of performance review.

Through using the system of catalytic coaching, it really gets you into a dialogue between the person you report to and yourself. It gets away from trying to say you’re a number grade to, ‘How are you brining value to the organization, and how is the organization helping you achieve what you want to do?’

Through these quarterly sessions, you learn about your performance. You don’t find out that you were up to be fired and nobody has every talked to you.

It provides a reason for this dialogue, but it takes people quite a long time to get used to dialogue. All managers I’ve ever run into just have a hard time with dialogue. They’re OK with superior-subordinate interaction, but if you start entering into dialogue and start discussing things, they become uncomfortable.

By forcing them to use this type of tool, you find that they are more apt to enter into things jointly rather than dictatorially.

HOW TO REACH: Stalcop LP, or (765) 436-7926