Erik Cassano

Poor communication is a hindrance to good business. Poor communication can damage a company’s culture. Any person charged with running a business probably knows that.

But Steve Rector has another take on the subject: “Poor communication is the root of all evil,” he says. “That’s the theory with me.”

The president and CEO of Regional Medical Center Bayonet Point has a lot at stake when it comes to communication. He oversees a staff of 1,000 people, employed in a variety of departments and disciplines. If communication breaks down on his watch, the results can be far-reaching and difficult to correct.

“Effective communication has been the most consistent challenge across the whole organization,” Rector says. “How do you not break that chain of communication; how do you keep it flowing from the bottom up and top down, horizontally and vertically? It has been a huge challenge to ensure that we keep communicating effectively each and every day.”

Rector has met the challenge by acknowledging the various ways a large group of employees will seek and absorb information, and then working with his leadership team to construct varying avenues through which management can disseminate information.

“You start to learn that people will learn and absorb things in different ways,” he says. “Not everybody learns the same way. Some people are visual learners, some are auditory, some have to touch the message and have it in their hands in paper form. So it’s communicating all the time, in various media so that it’s constant repetition. That’s how to start to make it effective, and make sure it’s a two-way street.”

But there are always ways to communicate more, and that is the ongoing task for Rector and his management team, in an effort to keep everyone throughout RMC Bayonet Point engaged and motivated to carry out the center’s health care mission.

Keep the signal strong

Communicating over multiple levels of an organization can result in a loss of signal strength. The message starts out loud and clear from your office, but by the time it reaches the people on the bottom rungs of the company — the employees who are likely interacting with your customers — it has lost a lot of power and might have been distorted as it has passed from mouth to ear or screen to eye.

Rector combats the loss of signal strength by turning his people into signal repeaters.

He and his leadership team work to stimulate feedback from different departments and levels of RMC Bayonet Point. Rector aims to create the dialogue so communication becomes interactive, as opposed to allowing employees to passively receive messages.

The way Rector creates dialogue is through his willingness to admit he doesn’t have all the answers within the organization, and looking to others to provide suggestions and ideas concerning a wide range of issues.

As the leader of your organization, a person who is by definition an authority on the business, you might find it difficult to admit that you don’t know the answer to something. But demonstrating your fallibility can help remove the apprehension that many employees feel about approaching upper management.

“I’m going to be wrong a hundred times this week, so no idea from anyone in the organization is going to be too far-fetched or crazy,” Rector says. “‘Let’s come up with ideas and play this out.’ You have to encourage those types of open discussions because people have to get to know you. Otherwise there will be people out there who feel like they don’t know you well enough to have that type of open conversation with you.”

You have to be willing to set the tone for open dialogue with your work force. You and your leadership team need to demonstrate your desire for open discussion from the top tiers of the company, and do it frequently.

“Everyone on our leadership team has that personality where we don’t think we have all the answers, and we engage everyone in discussion to make sure we are going in the right direction. We realize that it’s an intrinsic trait of leaders that we always want to have the answers. But oftentimes we don’t, or we may think we do until someone points us in the right direction. That’s why everyone on our leadership team knows it’s important to be willing to say, ‘I don’t know that answer; let me go research it. Can you help me with it?’”

Find communicators

To facilitate an ongoing dialogue between employees and management, you need to have leaders on your management team who are willing and able to communicate. That means you need to choose wisely when you recruit and hire the people who will become the future leaders of your company.

Rector calls it “hiring tough.” When you hire tough, you refuse to settle for a warm body to fill a position. You are willing to struggle with a shorthanded staff in the short term to reap the benefits of a good hire and a more cohesive team in the longer term.

“You might be overwhelmed with work, but you do not settle for a person who might get the work done but doesn’t share the same intrinsic values,” Rector says. “I never want someone who is going to come in here and be a yes-man. If I were to come into a meeting and tell everyone that I wanted to paint the hospital pink, I don’t want everyone standing around me and telling me that’s a great idea. I want people to tell me, ‘You might want to think that over first.’

“That’s why you want to have a good hiring process, to make sure that you understand who you’re hiring and that they share some of the same values that you do. Maybe they don’t have all of the same ideas or thought processes but the consistent values are there.”

In the hiring process, Rector and his staff formulate questions geared toward finding out about a candidate’s set of personal values. They want a candidate who brings an adequate skill set to the table, but they want to find the cultural match first. Skills can, to an extent, be taught by an employer. Personal values can’t.

“We have a pretty specific interview process that engages a candidate in questions that aren’t just work-related but reveal a lot of their values set,” Rector says. “It’s lasted as long as I’ve been here, and it’s a process that works very well for us.”

Rector and his staff also employ peer interviewing sessions, in which management-level candidates speak with their prospective peers and subordinates. A candidate for a director position is interviewed by other directors but could also be interviewed by the people who will report to that position.

“Candidates are probably going through five or six individual and five or six group interviews over the course of a few days,” Rector says.

You need a cultural match when you look for hires, because you need people who are willing to make your organization’s mission personal. You might not deal in saving lives the way Rector’s organization does, but the need to have your employees internalize and live your message is still there.

Rector doesn’t want his managers and employees to memorize the mission statement at RMC Bayonet Point. He wants them to believe in it. If, as an employee, you can parrot the organization’s mission and core values back to a manager, it should be because you’re living the mission and values each day, not so that you can placate your bosses.

“We can create a set of rehearsed core values that look important, but our core values are exactly what they are, and our team members have to embrace them,” Rector says. “So we have to keep things very simple along those lines. One of the questions I always ask people is, ‘How do you know good care when you see it?’ And you have to ask yourself, ‘Am I treating this patient the same way I’d be treating them if they were my own family?’ If that’s the standard we’re using for treating people, we’re probably going to do a really good job of delivering care.”

Value your employees

As the leader of your company, one of your jobs is to continually make sure that the puzzle pieces of your organization fit together. You do that by showing people in every area and department of your organization how their daily tasks help the organization meet its overarching goals and mission.

At RMC Bayonet Point, showing employees that they matter means showing them how their work improves the experience of the patients who are seeking treatment at the facility.

Arming employees with that knowledge can mean the difference between an adequate customer experience and a great experience that makes customers loyal to your service, product or brand.

“When people come to our organization, they expect us to help them get well,” Rector says. “So if we do everything perfect and help them get well, we’ve met their expectations. But how do we exceed their expectations? It’s typically those small things around the periphery of their care. Did we notice that someone was cold and, without asking them, went and got a blanket? Did we set up someone’s dinner tray the right way? Did we help them prepare their food the way they want it? Do we offer a simple smile and introduction to a patient when we walk into a room? Those little things turn a hospital stay from a clinical success, which is a good stay, to an exceptional stay. We need to focus on those little things.”

Focusing on those little things comes back to the principles of good communication and reinforcing the foundational building blocks of the culture. That means relying on good top to bottom communication that maintains a strong signal from your desk all the way to the bottom of the organizational ladder.

If making your mission personal helps to engage the employees who interact with your customers, your managers and directors need a way to make their jobs personal, as well.

“We want all of our director-level people to become CEOs in a sense,” Rector says. “Each of our directors have big business units with lots of employees. If our units were separate businesses, they’d still be among the largest in the community. So we ask them to become CEOs. I always ask them what they would do differently if their income was dependent on what was left over at the end of the day, then take that view as an entrepreneur. ‘What would you do, how would you retain customers, how do you measure their satisfaction, and what might you do differently the next time?’

“It’s not as hard to do if you have engaged management that is able to move ideas across an organization and facilitate communication with employees. That ability to communicate, facilitate and share best practices is really the mark of a great leadership team.”

How to reach: Regional Medical Center Bayonet Point, (727) 819-2929 or www.rmchealth.com

Bill Bembenek remembers a time, not long ago, when the biggest challenge facing Pala Casino Spa & Resort was keeping up with demand.

The casino will celebrate its 10th anniversary beginning this month, and for the first seven years or so, growth was explosive and guests were flocking to the northern San Diego County casino and resort, owned by the Pala tribe.

“For the first seven years, the challenge was just keeping up with the business that was coming through the doors,” says Bembenek, the facility’s CEO. “We were experiencing tremendous growth in what I now believe was an overstimulated market.”

As the later years of the decade progressed, Pala began to feel the effects of a deepening recession. Customer traffic dwindled as more area residents opted for cheaper entertainment options instead of a weekend away. The revenue bubble that had carried Pala’s growth since its opening burst, and Bembenek was left searching for answers to the problem of how to stimulate business under difficult economic circumstances.

“As the economy slowed, we quickly came to the conclusion that the companies that would come out of the recession were the companies that took this as an opportunity to capitalize on the future,” he says. “Guests have a decision to make when they come to a property like ours. They spend disposable income that they don’t have to spend, so we as an organization have to be prepared not only through the recession but after the recession. We needed to capitalize on the idea that when a person makes a decision to spend disposable income, Pala is at the top of their mind.”

The way to make Pala stand out, Bembenek decided, was to focus on delivering an exceptional customer experience. And the way to make customers remember their experience at Pala was to create happy, loyal employees to interface with those customers. It required a cultural shift for the entire 2,000-employee organization.

“All the casino properties in California have nice facilities, slot machines, blackjack tables and good food,” he says. “But service was the impetus for our cultural direction. The most sound position we could put ourselves in was with an emphasis on service, and that starts with our team members.”

Serve your employees

From his experience in the hospitality industry, Bembenek says businesses generally have one of two approaches to service — customer-centric or employee-centric.

Customer-centric companies focus directly on the customer experience, regardless of who is delivering that experience. Employee-centric companies are primarily concerned with enabling and supporting the people who interact with the customers each business day — the workers who put a human face on the company for all customers.

“Both of those approaches can be effective, but what we believe is that the most effective approach is to be employee-centric,” Bembenek says. “That means you treat team members the way you’d like them to treat your guests. If you do that, you have a much better opportunity to succeed. That’s why we developed a philosophy to make sure our team members are supported, empowered and appreciated. We want them to have a high sense of security in the company they work for. That makes all the other efforts related to our guest experience easier.”

To roll out an employee-focused culture, Bembenek had to send his communication strategy to the weight room. It needed more strength, more size and more power.

Above all else, it needed more layers.

“In order for a culture to change, it needs to be embraced by all levels of the company,” he says. “At each level, you want to take the time to ensure that there is a consistent message and everyone is pointed in the right direction.”

Bembenek and his leadership team began working on messages aimed at reaching out to employees at all levels of the organization, creating a dialogue that would educate employees on Pala’s new direction, stimulate feedback and empower employees to take initiative on enhancing customer service.

Bembenek first worked with his direct reports on the senior leadership team. Once everyone in upper management was aligned, the new cultural principles were cascaded to middle management, then to the floor supervisor level. Once every manager in the company had achieved alignment, then Bembenek rolled the message out to the employees working the front desk, restaurants, casino floor and any place where customers spend their money.

“Each step took more and more time, as we made sure that we had buy-in from larger and larger groups,” he says. “Only after all that was completed did we roll the message out to our team members.”

Bembenek wanted to have each management layer of Pala engaged successively because of the organization’s size and large number of customer interface areas. The most effective way for any large organization to communicate is from supervisor to subordinate.

“This isn’t something that can be accomplished by one person with one singular message,” he says. “It has to be reinforced and encouraged through all layers of an organization.”

But that doesn’t mean upper management stays detached from everyone outside of the executive office wing. Though Bembenek can’t personally reinforce Pala’s culture to every employee all the time, he and his upper management team still take the opportunity to make an impression on employees.

He has small group meetings like many business leaders have. They are effective in stimulating dialogue and keeping employees informed. But in true casino fashion, Bembenek and his management team like to put a little jolt of electricity into larger meetings, to keep things interesting for employees.

“We created a new position in the company, and the responsibility of that person is to be creative and come up with new ways to engage team members,” Bembenek says. “We develop meetings that try to be both informative and entertaining. We’ll show YouTube videos or some kind of video that conveys, in a comedic way, a service issue that we feel is important to the company.

“We just try to mix it up from group size to format to creativity levels, so that a team member can come to six different meetings over the course of a year and each one will feel different. We don’t want to be in a position where people are walking into a meeting with a preconceived notion of what they will experience. You need to inject some enthusiasm into the way you communicate, because when you’re doing the same job for seven or eight years, doing the same tasks repetitiously, the job kind of becomes mundane. That’s why one of the things we try to accomplish with our communication is to keep our team members excited about the environment they’re working in.”

Listen to your employees

Along with opening multiple avenues for management to communicate with employees, Bembenek also wanted to establish different platforms for employees to reach various levels of management with feedback. Without feedback channels and employees who feel enabled to use them, you won’t get an accurate read on how your cultural shift is taking root. You also won’t be able to open yourself to ideas and suggestions from your team.

“Some people are comfortable speaking directly with their supervisors,” Bembenek says. “Those are the people who are very open with their ideas and thoughts. Other people aren’t so open and want to offer feedback on an anonymous basis. We have the typical suggestion boxes and open-door policy for all levels of management, and we always open the floor to questions at every meeting. But sometimes people are still inhibited.”

To overcome shyness, apprehension and any other potential roadblock to employee feedback, Bembenek and his management team took an added step, turning feedback into a contest of sorts.

“If anyone suggests anything that we end up implementing in the company, we give that team member $50,” he says. “We’ve had suggestions of all kinds, from serving a certain type of food in our staff dining room to suggestions that have changed policies within the company.”

The leaders of Pala make feedback a money-earning proposition for employees because some of the most candid feedback and best ideas can come from the lowest rungs of an organization’s rank and file.

“Those are the people who interact with hundreds of our guests each day,” Bembenek says. “On the ground level, those are the people in a company who are going to be the most in tune with customers, as opposed to most of the executives, who don’t have the opportunity to rub elbows with customers as frequently.”

Listening to your employees is, by extension, listening to your customers. You can’t serve customers well without first engaging and empowering the employees who directly serve your customers. It’s the entire basis of Pala’s new culture, and it’s something that Bembenek tries to personally reinforce whenever his schedule allows.

Bembenek and his leadership team rely a great deal on cascading communication and the relationship between employees and their supervisors. But even though he is a CEO with the accompanying workload, Bembenek still sees value in blocking off time to informally interact with people at all levels of his organization.

The “informal” part is important.

“The informal interaction that you can initiate with employees is where you’re going to get some of your best information,” he says. “If you talk to a team member in a more formal capacity, as something is going on related to work, their response can sometimes be very restricted to the immediacy of the situation. But if you can engage someone in general conversation at a more relaxed point in time, you start to get a better picture of who they are, and they start to open up about some of the things they’ve heard from guests. That type of interaction can generate some of the best dialogue and information.”

With everything else on your extremely full plate, the only way you can ensure that you have time to simply get out and talk with your people is to make it happen. You have to clear time on your calendar just like you would for a meeting or any other appointment.

“You actually go into your calendar and make the time,” Bembenek says. “I insisted on that several years ago with my management team. I know how a day can fill up quickly, yet we always find time to make it to the meetings on our calendar. That’s how it kind of tripped in my mind that you have to treat your interaction time with employees like it’s a meeting on your calendar.”

Bembenek’s employee-centric approach to business has yielded results, despite the sluggish economy. Though customers aren’t spending like they did several years ago, Pala is experiencing record visitation to the casino and resort, which has helped to offset the drop in spending per guest. The company has not had layoffs.

As Pala moves into its second decade of operation, Bembenek proceeds with the knowledge that his company will be swimming upstream against the economy for the foreseeable future, but it will be doing so with an empowered work force that has the support of management.

“There is simply no way you can achieve the goal of having the best service without having team members that feel appreciated,” he says. “That’s it in a nutshell. At the end of the day, it’s all about that interaction between employees and customers.”

How to reach: Pala Casino Spa & Resort, (877) 946-7252 or www.palacasino.com

The people at Odyssey Marine Exploration Inc. are used to

navigating all over the globe, through seas both rough and calm.

But while the ships are out at sea, Mark Gordon is back at the

home office of the $4.3 million company in Tampa, doing his own navigating of the

business environment surrounding Odyssey.

Much like the captain of an oceangoing vessel, Gordon, the president

and chief operating officer of the company, has to keep his eyes fixed on the

horizon, looking for potential course adjustments that might need to be made.

And when the corporate ship does need to steer in another direction, Gordon

must know how to make the turn at just the right time — not too quickly, not

too slowly.

To make that balance happen, you need stability from your

culture and a willingness on the part of your people to take risks.

Smart Business spoke

with Gordon about how you and your employees can work together to build and

sustain a business plan that is both stable and open to change.

How do you build maneuverability into a business plan?

We have this concept, what we call ‘our rocks,’ which are the

key objectives we’re trying to push up the hill each month. We pick no more

than three, so overall the company has no more than three major objectives or

rocks, and each department has only three. So going back to the question about

flexibility, we’re in sort of a triage process deciding whether those three

objectives at the corporate and department level are the most important at that

point in time, given what is happening around us. And we reserve the right to

replace an objective based on the circumstances of the situation.

What would you tell other business leaders about building a

business plan that is stable yet flexible?

Part of it is looking at the business process. You have to

think of it as being flexible when you start out. As simple as it sounds, I’ve

been a part of organizations in the past where they’re carving something into a

stone tablet when they make a decision. So acknowledging the fact that in this

dynamic world in which we now all operate, things are going to change. So you

have to bring that mindset into the business planning.

In terms of the process, the communication is key. Formulate

the plan from the outset so that it’s, as I call it, an agreement among

consenting adults — so that everyone understands what we’re trying to achieve,

and that things can change.

And then that weekly tempo of having meetings and discussing

what has happened. Are our objectives still the objectives that we should have.

I think that’s critical. I’d highly recommend that once your plans are in

place, you are reviewing them at least weekly — and some businesses do daily

huddles.

How do you go over key objectives and figure out whether you

need to make course corrections in that huddle format?

It is confronting, each week, actual results and what is

happening in the world around you, then collaboratively agreeing along as many

levels of the organization as possible, even down to line employees as much as

you can. They might have visibility or sight of an issue as to what needs to

happen going forward.

My style is that I like to lead in a very democratic fashion,

but in reality, business leaders, especially if you’re betting the farm on a

decision and you have to make it immediately, sometimes have to go to a more

autocratic style of decision-making.

How do you ensure that employees are taking advantage of the

communication opportunities provided by management?

One thing we learned is that there is always an open-door

policy, so any day someone can walk into my office or their manager’s office,

and we encourage feedback. In a group setting, the town-hall setting is a

specific forum for Q&A and inputs. Although what we’ve learned over time is

that some people aren’t comfortable contributing through an open-door policy or

in a group setting town, so what we’re starting to increasingly see is, for

lack of a better word, a suggestion box. In other words, it is necessary to

give your employees a means to communicate thoughts in an anonymous manner. To

that extent, we’ve set up a vehicle where people can make a suggestion, comment

or logic question in anonymity. It’s those three prongs: open door, town hall

and suggestion box — which means to simply provide some kind of anonymous

mechanism for communication.

Is that type of communication something you have to hammer

away on from the first day someone is on the job?

If that is not how the business was run prior, then there is

sort of a period of getting people comfortable with that style. What is most

gratifying for me is that people, especially line employees, are very

appreciative if you share that level of information. Most organizations won’t

do that. My opinion is the organizations who don’t do that, who don’t seek

input from their employees, are doing a disservice to themselves and to their

shareholders. But it does take some time to build that operational tempo where

people get comfortable, both higher up and the folks below me on the

organizational chart that have been exposed to it. You’re changing a paradigm.

How to reach: Odyssey Marine Exploration Inc., (813) 876-1776 or www.shipwreck.net

Every business in the modern world uses technology to communicate. Which means that every business will find itself in need of communication upgrades sooner or later.

At printing services provider ANRO Inc., IT Director Paul DeSantis tries to keep his company on the cutting edge of phone and Internet service, which helps the nearly 200-employee company serve its customers with optimal efficiency.

Along the way, DeSantis has learned some lessons about how and when you should evaluate the state of your communication system and when it might be time to look into upgrades or replacing your system outright.

Smart Business spoke with DeSantis about how to keep current with communication technology.

How can a company know when it’s time for an upgrade?

There really is a lot that goes into that. It’s a unique decision process for any organization. But typically, you’re going to start with inadequacies in the current solution. Does your system have an interface compatible with other technologies that are coming out? A good example is unified communications. Every business has its own system for taking calls. Those call systems are independent of cell phones or e-mails that have inherent inefficiencies. Once you’ve identified those, then you can start to think about how to address them. But it would start with seeing if your current phone system can field a call from a cell phone and access someone’s voice mail, how closely are the systems tied and how closely do they interface with each other. Any organization is going to have questions about that from their staff. If you are fielding a lot of questions about technology, it’s probably time for an upgrade.

What are some of the other indicators that systems aren’t working well together?

That goes above and beyond the obvious problems you’ll have, like call quality issues and call volume issues. If people are calling into your main number and getting busy signals, you need to be aware of those things and take action pretty quickly. Any telecommunications managers or executive in a business is going to want to have those kinds of resources available. You’re going to want to have a readily available phone line when that sales call comes in. You’re going to want to know that your system is going to take and deliver that call effectively and accurately.

What comes with those types of upgrades today is a whole new level of visibility into the operation of the phone — better reporting, real-time reporting on call volume, things that would be important to an executive considering whether to make that kind of investment.

How should a company be budgeting for communication upgrades?

That’s a critical mass type of investment. You should be reviewing it biannually, even if you can’t do anything for 36 months due to the constraints of your lease. We review biannually but stick to 36-month leases. A 60-month lease is going to be too far. You’re going to want to make changes to that.  But that should definitely be a high priority on the budget list.

How does a phone system upgrade play into a company’s overall communication infrastructure?

You really do have to package all of that together. There are some areas of convergence that are critical, one of which is bandwith. Obviously as a business grows, you’re going to have more employees who are going to be doing more things via the Internet. Sooner or later, you probably are going to require additional bandwith. So having two different vehicles to deliver voice and Internet connectivity is going to be a problem. You’re going to want to converge those two into a voice over IP system so that you can maximize your investment in that Internet connectivity and use it for all of your voice communication.

In the operational aspects, this is especially critical because for most businesses, in most cases, the phone is the most critical customer-facing component of your business. The effectiveness of your voice transfer system can really change clients’ perception of your entire business. So when you’re having phone issues or problems, it’s a customer-facing problem and needs to be addressed quickly.

On the employee side, it’s going to save time. Having one address book for all of your communications, having one location for all of your e-mail and voice-mail messages, is probably going to make your employees more effective.

How does a company choose what features are right for them in a communications system?

That is going to be a decision that is unique to your organization. But now, some of the features and how they’re packaged into systems are different than what they were in the past.

It used to be that you were buying a mechanical switch, and it had a layer of software that could utilize that switch in different ways, but today all of the new phone systems are server-based. All the functionality is software-based, so the ability of the manufacturers to include more functionality into the base or core package has definitely brought those costs down. Whatever your buying power is, you’re going to get more from the new system than you could have ever achieved trying to upgrade your legacy system, because of the way it’s structured.

So even if you are just two or three years into an analog system that seemed like a good option for you at the time, it needs to be re-evaluated because of the dynamics of the new feature sets.

How to reach: ANRO Inc., (800) 355-2676 or http://www.anro.com/

First came Charley. Then Frances. After that, it was Ivan, Jeanne, Dennis, Katrina, Rita and Wilma.

In the span of 13 months between August 2004 and September 2005, eight major hurricanes ravaged Florida and the U.S. Gulf Coast. And right in the midst of all of it were Don Cronin and his staff at United Property & Casualty Insurance Co.

“We had never dealt with a hurricane,” says Cronin, president and CEO of the St. Petersburg-based company, which generated $155 million in gross written premiums in 2009 and more than $88 million in revenue. “The company was founded in 1999, and the first hurricane we dealt with was in August 2004. The departments all had to come together. It wasn’t just on the claims side. It was finance, marketing, underwriting, all the different areas basically reaching out to help each other. Whether it was answering the phone, stuffing envelopes, delivering checks to people who had lost their properties, they did it all, and without any complaints. And we just went from one storm to the next. It was seven days a week.”

As the Atlantic and Caribbean delivered blow after blow, leaving untold dollars in ruined property and untold numbers of ruined lives behind, Cronin saw a ray of hope in how his own company bonded together, embracing a culture of teamwork in an effort to serve affected customers and communities.

“Insurance is a piece of paper with a lot of promises on it,” he says. “There aren’t a lot of opportunities to fulfill those promises. But eight times when we needed to, we filled those promises in a very short period.”

Through the challenging times, Cronin says he learned a lot about how a company can band together to serve a greater cause than the bottom line. And it reinforced to him the importance of creating and sustaining a culture of teamwork and collaboration.

It’s a culture rooted in communication from the top of the company, communication between departments and locations, and a willingness from all parties to listen as much as they talk.

Connect your people

You provide opportunities for teamwork by providing your employees with opportunities to work with each other. If you can put your people in positions where they regularly interact with each other, they will begin to develop a higher level of familiarity with each other and each other’s jobs.

The interaction opportunities can occur in a formal work setting, but you should also take the time to build more informal opportunities into the work calendar, where socialization is the objective, not necessarily work.

“You engage individuals in your processes by providing the opportunity for them to interact with each other and with you,” Cronin says. “You can provide those opportunities through meetings, cross-training programs or social functions outside of the normal scope of work. Company picnics and other types of events like that can bring people together so they can get to know each other.

“We hold a monthly companywide meeting. An individual in each department is responsible for providing content for the meeting, for sharing things that are going on in their departments. That also helps the whole company gain a better appreciation for what that department does.”

Cronin encourages each department to take the monthly presentation and get creative with it, which has turned the meetings into a kind of loose competition. No prizes are handed out for the best presentation, but the creativity factor creates an added level of engagement for both the department giving the presentation and those in the audience.

“We used to have meetings where just one person would speak,” Cronin says. “But it really became kind of boring and unproductive. However, once we started to put more responsibility on each of the individual departments, it became more of a collaborative effort, to the point that now there is almost some competition as to who can do the best job of making a presentation, which improves the content.

“It has gotten to the point where some presentations utilize sound. If they’re talking about wind, you might hear wind in the background. So our employees go out of their way to spend time on these presentations, and it keeps everyone interested and engaged.”

The presentations at monthly meetings are among the most visible examples of Cronin’s desire to have employees speak up and come forward with ideas and feedback. If you want employees to behave as a team and put aside personal and departmental agendas to work toward larger goals, you need to provide input and feedback channels.

If employees feel like management is too enamored with its own vision to pay attention to what is happening in the trenches, they’ll stop trying to communicate. Which means that, over time, they’ll stop listening to you.

At United Insurance, all employee input and ideas are addressed. It doesn’t mean that management spends hours and days carefully considering each idea, but each nugget of input from within the company is acknowledged and management at least responds to it.

Even if your answer is a flat-out no, it’s better than no response at all, as long as you are willing to explain to the person the reasoning behind your rejection.

“It may be a situation where the problem is simply the idea’s cost,” Cronin says. “You explain that you value the idea, but the cost makes it unrealistic right now. In the insurance business, we’re so controlled by regulations, that alone might make the idea a bad fit. But as long as you’re making sure that you’re communicating to the person that not every suggestion can be acted upon, you still give them a sense that you and your managers are listening to them and their idea is important. What you need to make sure of is that you’re not just dismissing ideas right off the bat.”

On the management levels of the company, Cronin sees to it that every manager and executive knows it is obligatory to listen to employees and offer feedback on suggestions and ideas that are submitted.

“Every manager has the responsibility to listen,” he says. “Every manager needs to offer feedback on ideas. And if an idea isn’t being implemented, we want to know why. There will be no repercussions for coming forth and speaking your mind on a relevant topic. That is a set-up that has worked well for us.”

If an employee is proposing a small change that might improve the work environment, those are the suggestions you should pay close attention to. Sometimes the smallest adjustments can make the biggest difference when it comes to employee engagement and confidence in management.

“In the majority of cases, it’s typically very small, minor things that can impact your business,” Cronin says. “Making small changes that will satisfy people; not necessarily reinventing the wheel. We’re very high on technology, so we’ve streamlined the process that allows access to our systems, so they work faster and are more responsive. Those types of changes can make a huge difference.”

Know your role

When building and promoting a culture of teamwork, your role in the top post of your company is that of an initiator. You need to set the example that you want others to follow.

You can put your mission statement and core values on paper and you can reinforce the culture in meetings. There is value in putting your guiding principles in writing, and reinforcing them from the podium. But the most effective reinforcement happens at ground level, when you get out among your people and dialogue with them.

Cronin says the best way to reinforce your messages is to ask a lot of questions, then close your mouth and listen before responding.

“Get people to talk about what they do and how they do it,” he says. “Then, the single most important thing you can do is listen. In management, we have a responsibility to listen to our staff. On a senior level, it’s listening to our managers. They perform your company’s functions on a daily basis and best know what changes need to be made.”

As a leader, listening can be hard to master. Chances are, you either started your company or have had a heavy influence on the company’s current state. You’re used to directing and getting things done quickly. You might not be as used to taking your time to listen and consider other perspectives.

“Listening requires a lot of patience,” Cronin says. “Your instinct as a leader is to talk. I’m not the kind of person that sits around behind a desk. I like to get around and talk to people, and as a part of that, you learn to listen. Employees appreciate that, and it gives you a better understanding of what is going on and how you can do a better job in management, both for employees and customers. You can’t really sit behind a desk and make that happen.”

It doesn’t mean you devote every minute of the day to dialoguing with your employees, ignoring the other tasks on your plate. But you do need to schedule in the time over the course of days and weeks to interact with employees and make yourself visible. If you are interactive and collaborative, your employees stand a much better chance of following suit and getting on board with a teamwork-oriented culture.

“It takes discipline to schedule that time in,” Cronin says. “But you force yourself to make that time, and sometimes that’s very difficult. It doesn’t take spending the whole day. You might spend time in a particular area, walking around and reaching out to people.”

If you lead a company with multiple locations, it obviously makes having that personal interaction more difficult, particularly if covering your company’s footprint means logging a lot of air miles. Overcoming the obstacle of distance requires a combination of logging those air miles when possible and making sure that you and the leaders at each location are frequently communicating on core values.

“You ensure that the people who do get out to the various locations are interacting with their customers and listening,” Cronin says. “If you’re in the executive management levels, it all comes back to training people and developing the culture. Ask the questions, get out, and engage and listen to how you can better yourself as a company and better serve your customers.”

As a supplement to your written and spoken communication, you might also send out surveys to give employees an anonymous means of giving you and your management team feedback on the job you’ve done in communicating, listening and setting the teamwork tone for the organization.

At United Insurance, Cronin’s survey is constructed around the five team dysfunctions described in Patrick Lencioni’s leadership fable “Silos, Politics and Turf Wars.”

“It’s really almost like a report card for management,” Cronin says. “It’s done on an anonymous basis, and it’s a good way to measure yourself to see where things have broken down or where they might not be working the way they should be.

“The measurement is on the fear of conflict, lack of commitment, accountability and so forth. Is there an absence of trust; is there something where people don’t really trust what is going on in an area? It’s a measurement, and then acting on that particular area of need.”

If management reacts to the needs of employees, employees will react to the needs of customers. Just like the staff at United Insurance did in the wake of the disasters that occurred five and six years ago.

“At the end of the day, everyone has to understand the importance of the customer,” he says. “You need to work together for the benefit of the customer. A lot of organizations don’t teach long enough about the importance of the customer. But everyone needs to understand that without your customers, your job doesn’t exist and the company doesn’t exist.”

How to reach: United Property & Casualty Insurance Co., (727) 895-7737 or www.upcic.com

Mark McMillin’s story is not all that different from the stories of numerous other business leaders over the past couple of years.

The economic downturn hit his business hard.

McMillin is a second-generation leader of The Corky McMillin Cos., a San Diego-based custom homebuilder founded by his father 50 years ago. Today, McMillin leads the company as president and CEO, with his brother Scott in the chairman’s role.

But the stability of family leadership still hasn’t been enough to shield McMillin’s company from the harsh realities of dwindling housing starts and the subsequent drain it put on the company’s revenue — $255 million in 2009, down from an estimated $464 million in 2006.

The revenue crunch forced McMillin and his leadership team to make some tough decisions. None of those decisions was more difficult than to trim the work force by about 70 percent. The Corky McMillin Cos. now employs approximately 350 people in California and Texas.

Through all of it, McMillin had to figure out how to buoy morale for the remaining employees, minimize damage to customer confidence and keep everyone focused on the end goal of piloting the company to calmer waters.

“We’ve had to do a significant amount of downsizing and rightsizing, constantly looking at costs,” McMillin says. “It has been a painful process trying to keep the company alive with that much change. The people you are trying to keep, it’s hard to show them that there is a light at the end of the tunnel — and that the light isn’t an oncoming train.”

For McMillin, trying economic times meant getting his company back to the basics of good communication, soliciting feedback from employees and putting the company’s guiding principles and core values back in the spotlight.

There was also the simultaneous issue of making sure the company maximized its remaining revenue channels.

“We had to convince people working on existing projects that there is 18 or 20 months of work here,” McMillin says. “We had to try and give people working in an unstable environment a sense of security for longer than 12 months. Whether we’re doing well financially or not, we still have to keep the projects moving down the tracks. So we needed to have a lot of individualized conversations, pats on the back, convincing people that while there might be a lot of turmoil right now, what we’re working on is important, we need it, and please stick with us.”

Communicate with employees

In any type of uncertain business environment, communication needs to start from the top. Employees need guidance and ground rules set from the top tier of the company.

At The Corky McMillin Cos., McMillin set the communication wheels in motion with meetings on both a group and an individual basis, depending on each person’s position and situation.

“Employees want to be appreciated for the things they’re doing and they want to be in the know about what is going on,” McMillin says. “That’s why we had very open meetings with them both on a big group basis and one-on-one.”

McMillin wanted to set an overall positive tone for his group meetings, so he always led off with positive news. Whatever progress he could report was always first on the agenda.

“If we had a good sales week and month, we’d lead off with that,” he says. “Then we’d share where we are financially with our loans and so forth. But we’d tell them outwardly that we’re not out of the woods, that we still had some debt that we needed to work our way through, but the banks are working with us.

“You need to start out with the good news because people need to hear the good news. I like to tell them good news. If you can’t make lemonade out of lemons, get out of the kitchen, I guess.”

Not every meeting can have a positive angle, however. When McMillin had to reduce head count by laying off a portion of the staff in the company’s Bakersfield office, he went there to attempt to cushion the impact for those who were staying.

“You need to get out there and interact,” McMillin says. “I personally visit our four divisions, talk to people and be seen. In Bakersfield, I tried to make the light a little brighter for those who remained.

“You kind of have to look at it the same way as when you’re doing well financially. You need to be out there, on the ground, visit the sites and locations, visit your salespeople and so forth. We tout ourselves as a family company, family owned and operated, so we want to be an open book and show our people that, despite negative circumstances, we’re not going to give up.”

Ultimately, you have to remember that your people drive your business. You might have the blueprint for your business. You might have built the machine. But your employees fuel it, oil the parts and run it. If you’re not putting them in a position to succeed by keeping them connected and enabled, you’re not putting your business in a position to succeed.

“The No. 1 commodity in any business is people,” McMillin says. “People are what make the difference. Everybody can go somewhere and buy lumber. Everybody can go somewhere to get sales and marketing advice. But it’s the team you have put together that is going to be out there doing the right things for the people you serve. That’s my advice: Get out there and make sure you know and connect with the people who are representing you to your customers.”

Foster collaboration

Employees need stability and communication from the top of the organization in a challenging business climate. But communication can’t just flow downward. It needs to move upward and laterally, from employees to management and from department to department.

McMillin has helped to entrench that mindset by linking bonuses to company goals. It comes back to the idea that if the company doesn’t provide a healthy, constructive work environment, no one within the company will have a healthy mindset. The need increases exponentially during hard times.

“We always encourage people to work together for common goals,” McMillin says. “Our bonus system has always operated on companywide success, not project by project or even division by division. A company has to do well, otherwise projects won’t succeed, our credit is no good and other bad things start snowballing.

“The company has to be healthy, so that is why you need people who are working for the greater good. Bonuses based on the company’s overall performance is one way to make that happen. It enables us to buy new projects, negotiate existing projects with partners and so forth. If the company is not healthy, no one is healthy.”

You also need to make collaboration a priority when recruiting. If you bring collaborative example-setters into the mix, those employees can set an example for the rest of the company, helping to promote a focus on the company’s large-scale goals. But that focus needs to start with you and your human resources staff and the type of people you let in the door.

“It’s all in the personalities you find during the hiring process,” McMillin says. “During the question-and-answer dialogue of an interview, you ask questions about that person’s professional history and how they interacted at previous jobs. You find out what type of employee this person was for their previous employer. Listen carefully to their answers. If you hear a lot of ‘me, me, me’ instead of ‘We did this’ or ‘We did that,’ you need to watch out.”

If you’re hiring and grooming employees who value collaboration, you need to make sure that you’re not discouraging the behavior that you want to see out of them. Many business leaders trumpet their company’s open-door policy. The notion that employees can pop into the president’s or CEO’s office on a whim is used so often in business that it has become a cliché — to the point that employees now often view the phrase “open-door policy” with a heavy dose of skepticism.

Simply saying that you have an open-door policy isn’t enough anymore. You have to follow it with action. You have to actively encourage feedback and ideas in group and individual settings, and you need to accept all points of view on an issue, even those you don’t agree with.

“One thing employees know they’ll always get out of my brother and I is a good ear for listening,” McMillin says. “But they’ll also get the sense that we support them and the people working for them. We’re not going to knock anyone’s head off for something they want to share with us. Beyond having an open-door policy, you need to be open-minded. Of course, we do want employees to deal with their direct supervisors first, but in the event they feel awkward doing that, they can come to us first if the situation warrants it.”

Maybe you can implement an idea or maybe it doesn’t fit. But you do owe it to your employees to give them feedback on what they’re proposing, and do it before the employee’s enthusiasm for the idea dries up.

“Maybe the idea isn’t totally embraced or acted upon, but maybe there are parts and pieces that can be used,” McMillin says. “You need to figure out where the root of the suggestion is coming from. Is it going to benefit their personal agenda, the project or the company? That can play a role in whether you can implement the suggestion or not.”

Prepare yourself

All businesses that are prepared to weather an economic storm seem to have a few things in common. They all have good discipline around financials, a well-defined system of checks and balances throughout the leadership tiers of the organization, and an unwavering focus on executing the business plan in line with the company’s core values.

When it comes to preparing yourself for financial hardship, you need to make sure that you are keeping your eyes open.

“Be aware of where all of your costs are and how they are broken up,” McMillin says. “We learned a lot about ourselves and our costs — for example, our legal costs and who should be paying them — over the past several years. We’ve seen how a business can get kind of lackadaisical when things are going good. If there is a magic formula for making sure you stay on top of your costs when times are good, I haven’t found it. Really, you just have to make sure you’re staying up on your books, that you know what you’re spending your money on.”

Financial responsibility goes hand in hand with fostering a companywide desire to make the best of a bad situation. You want the people at your company — especially on your senior leadership team — to be willing and able to do whatever it takes to not just endure the bad times but emerge ready to flourish when the outlook improves.

“You just have to find the bright spots in bad times,” McMillin says. “You find out what you’re going to do and how you’re going to fix it. You brainstorm with your management team and come up with solutions. A lot of times, those solutions only cover the next day or week. You might try to always focus on long-term goals, but sometimes, you can’t worry about how this line of credit is going to affect us for the next year. Focus on getting to the end of the month, on getting the next round of bills paid. Sometimes, that alone can serve as a glimmer for the whole organization that you really do believe in what is going on around here.”

How to reach: The Corky McMillin Cos., (619) 477-4117 or www.mcmillin.com

Rex Schlaybaugh says lawyers are skeptics by nature. So when the chairman and CEO of Dykema Gossett PLLC tried to drive a systemwide change in their mindset, he was faced with overcoming a great deal of established inertia in order to make it happen.

“Large law has never been a fast-paced, fast-changing industry,” Schlaybaugh says. “Changes come slowly, are often resisted, and as the economy changes, we have found that we are subject to business cycles just like any other industry. Therefore, the way we’ve been operating for the past 100 years can’t be the way we operate in the future.”

Dykema Gossett is a national law firm with 700 employees that generated $175 million in revenue last year. Schlaybaugh had to figure out a way to overcome the momentum generated by an organization of that size and drive home a message that is simple to state but far more difficult to internalize and implement.

“I needed to drive home the recognition that we are a business,” he says. “Though we are legal professionals, we are a business, and our clients are looking to us like they look at any other business in a supply relationship. Are we efficient? Are we cost-effective? Are we producing value? Do we understand their business? And above all, we needed to realize that we aren’t entitled to any portion of their business, but we have to earn their business every day. It’s really a fundamental change in the way many lawyers approach the profession.”

To get the lawyers and legal staff at Dykema Gossett to think like businesspeople, Schlaybaugh needed to get out of the office, communicate and educate. He needed to make a nationwide force of attorneys aware of the business that makes a large law firm run. He needed to get his employees to think in terms of supply and demand without sacrificing any of the legal specialization and expertise that had built the firm’s reputation over the years.

Start a training program

Schlaybaugh needed to begin drilling his employees on the fundamental economic principles that drive successful law firms, and then link those principles to the demands that purchasers of legal services are making in the marketplace.

With the need identified, Schlaybaugh and his leadership team organized a series of training sessions that dealt with topics such as price, profitability and how a top-line dollar finds its way to bottom-line revenue.

“We significantly invested in our finance area to help our lawyers become better businesspeople,” he says. “We have a lot of partners and lawyers in the business, many of whom have significant client relationships and are involved in taking on work every single day. That is who we needed to take the time to educate on becoming smarter, better businesspeople, because they really become the sales, marketing, pricing and finance department for that piece of business. So the more we can help them understand the economics of a big law firm, the better they’re going to be as businesspeople.”

In addition, Schlaybaugh and his leadership team developed a partnership with the Stephen M. Ross School of Business at the University of Michigan.

“We worked with their business school to develop a proprietary program where we took our young, up-and-coming lawyers, as well as a group of the people who serve our largest clients and run our practice departments, and ran them through a leadership management program,” Schlaybaugh says. “It’s all part of our view that, overall, we need to be more sensitive about what our clients are wanting and more sophisticated in the way we manage our business.”

But training programs are only the beginning. You need to reinforce your focus on foundational business principles through consistent communication that continues to drive home the core message that you want your people to hear.

At Dykema Gossett, Schlaybaugh reinforced the firm’s focus on solid business practices by repeatedly placing emphasis on client services. Schlaybaugh wanted every lawyer and staffer to realize that whatever is good for the client will be good for the firm in the long run.

“It’s about the commitment of the organization on the matter of communication,” he says. “Constantly communicating and sharing information is critical. That means you need to share information from the top. In our case, it all comes back to the fact that these are changes to the historical model of law firm management. We need to understand what our clients want. In the past, law firms didn’t really do that. They’d say ‘We have a real estate department, and if you have a real estate problem, come to us and we’ll take a look at it.’”

Cross-functionality has become an issue of increasing importance in law as it has just about everywhere in the world of business. It is a major aspect to effective client and customer service, and as part of his ongoing communication strategy, Schlaybaugh wanted all of the leaders at the firm to examine the organizational structure for opportunities to provide cross-functional services — and as part of that, to build familiarity among various practices within the firm by developing opportunities for lateral communication and team building.

“We realize that we need to invest in everybody who works on a particular client,” Schlaybaugh says. “We need everyone who works on a particular client to know what is going on in the firm. Who is providing services and what services are we providing? That type of communication, information sharing and knowledge building among the people who are serving a particular client or customer is extremely important if you’re going to be as efficient as possible in providing services and achieving your desired outcome.”

Build for adaptability

If you want your employees to be ready for change, the preparation has to start long before you shift course. You need to build adaptability into how you do business. Your market might not change, depending on your industry. Your philosophy on leadership might not change all that much. But you still want a business and work force that can change with the times, move with shifts in the industry and, perhaps most important, remain able to quickly react to new business opportunities.

As part of thinking like businesspeople, Schlaybaugh wants his attorneys to react like businesspeople. If a potential client presents a new service opportunity that might create the possibility of additional business, Schlaybaugh wants his legal experts to recognize the opportunity and feel empowered to capitalize on it.

The way he makes it happen is by continually driving home the idea that what was good for the firm in decades past isn’t necessarily good now. Momentum should propel you forward, not keep you in a circular flight pattern.

“In today’s environment for leaders, with the challenges that are out there, you need to be able to start out fast and keep picking up speed,” Schlaybaugh says. “We have kept trying to break the rule that says we’ve been doing something a certain way for so long, and we can’t do it any other way. Obviously, you don’t want to just change for change’s sake, but you do want to remain nimble and agile. I don’t think a ponderous organization that is slow to change or afraid to change will necessarily be as successful as organizations that are more nimble.”

In some cases, making a change means making a decision that is unpopular, but the numbers, measurements and insight of your experienced team members have given enough evidence to make you believe it is the right call.

The decisions in which you are cast as the lone wolf awash in a sea of doubters can be difficult to make. Far easier are the decisions over which you can build consensus in advance of pulling the trigger.

There is a time and place for both, but as often as you can, you should try to make the rounds, build your case and cement the idea with your people. Your employees will develop a much stronger tolerance for change if they feel like you are making a good faith effort to solicit, consider and implement their input.

As you keep driving a forward-thinking mindset to your employees, and as the decisions you make begin to deliver positive results, your employees will start to develop more and more confidence in your ability to make a judgment call. If you’ve done your job correctly in the early stages of change management, building a consensus should be a less arduous task over the ensuing months and years.

“In any business, the management team continues to build credibility through the outcomes they have achieved,” Schlaybaugh says. “So we measure ourselves by how we have grown the business, how we have improved earnings, how satisfied our people are with their jobs.”

Dykema Gossett has an internal scoreboard that measures the job that management has done in communicating with employees. Employee confidence is reflected in job satisfaction, workplace satisfaction and the financial success of the business, among other categories.

“Our partners are entitled to expect that our management team will make progress on all fronts every year,” Schlaybaugh says. “We have a number of things that most businesses measure, both on financial and nonfinancial aspects of the operation. Obviously, you’re aware of the financial ones. What is our revenue, our growth rate, our revenue per lawyer, profits per partner? We have a whole series of financial metrics that we measure ourselves against.”

Financial metrics can give you an accurate gauge on how well positioned your business is to grow and change. But it’s the employee feedback that will show you how well your business will be able to capitalize on the opportunities presented to it. It’s your employees who are going to man the throttle and steering wheel.

You need to encourage employee feedback through multiple channels. Feedback channels give employees an ongoing opportunity to interface with management and help retain their involvement and interest once you’ve initially engaged them.

It might be cliché to say that you have an open-door policy, but Schlaybaugh says the concept is still worthwhile. You need to be accessible on a day-to-day basis if you want employees to be engaged and willing to change with the company.

“You have an open door in the sense that you are willing to listen to different opinions and views,” he says. “Even if you do have to make a decision and move on at some point, I think most people appreciate that a decision was made — even if it wasn’t necessarily the one they were advocating — as long as they were provided with the opportunity to be heard, to be able to advance their position. It goes back to the larger communication issue and how important it is within the whole organization.

“When we get a piece of feedback, we hand it to whatever department of the law firm has responsibility for that area. Obviously, not all ideas are adopted. But you go out of your way to thank people for their ideas and time. I think people appreciate the willingness on the part of management to listen, and then they are very happy to see the changes that come from the ideas within the organization.”

How to reach: Dykema Gossett PLLC, (313) 568-6800 or http://www.dykema.com/

Most utility company heads haven’t had to go through what Nick DeBenedictis has had to endure over the past four years.

What the chairman, president and CEO of Aqua America Inc. has had to endure is rapid growth — the ultimate double-edged sword of business. Rapid growth means rapid success, but it can also mean outgrowing systems and processes way too quickly, creating more problems than it solves, both financially and culturally.

Most of Aqua America’s growth was due to a series of large acquisitions in 2005 and 2006 that greatly increased the municipal water system management company’s presence in the southern U.S., raising the total number of states in the company’s footprint from six to 13.

“Normally, utilities grow at 1 percent,” DeBenedictis says. “We have grown at 50 percent over the past few years. That gives you an idea of the size we’re dealing with. We had to get systems in place, people in place and change out management. The digestion period was one of our big challenges and overlaying that was the recession, the credit crunch and everything else that was happening as we were trying to grow.”

Managing water utilities is a capital intensive business. While Aqua America generated $670 million in 2009 operating revenue, the company is also slated to pay out $300 million in capital improvements to their water systems this year.

On top of managing a high-volume flow of cash, DeBenedictis is also in charge of maintaining and promoting a service-oriented culture to the company’s 1,800 employees.

The capital investments and culture are the two main prongs in Aqua America’s mission to build lasting relationships with customers. Water utility customers can’t choose what company supplies water to their city, but many cities have a choice as to who provides their citizens with water service. If Aqua America doesn’t maintain an impeccable customer service reputation, future growth opportunities might be harder to come by.

“You want to make sure that you have happy customers in any case, not just begrudging customers,” DeBenedictis says. “That’s why we wanted to make sure we had good people and good systems in place. In many cases, the reason we were able to acquire a company was because that company didn’t have good management. We’ve had to come in and make nearly a 100 percent change to first-, second- and third-level management.”

Promote your culture

If you want to have a strong culture as you grow your business, you need to start with strong communication. In the aftermath of the 2005 and 2006 acquisitions, DeBenedictis rolled out a plan that would drive communication down to the ground floor of the company, and do it level by level.

The go-to person in DeBenedictis’ plan was president of each state’s operation. Aqua America has an operations president for each of its 13 states. That executive is charged with having an ongoing and detailed knowledge of the markets that Aqua America is serving in the state and how to best meet the needs of customers.

“The state president is a person I normally select myself, and we usually get a person who has been a star in another state to take on the challenge of having their own state,” DeBenedictis says. “That person basically lays the groundwork for the organization and the people they need, whether the people currently in the company are the right people or if there are changes that need to be made.”

In acquisition scenarios, DeBenedictis and his leadership team try to keep as many executives in place from the acquired company as possible, since they have already built relationships with employees and customers. If the existing state-level leaders can be kept in place and educated on Aqua America’s culture and processes, that is the best-case scenario. However, there are times when the existing managers simply can’t mesh with Aqua America, and DeBenedictis needs to move quickly.

If you don’t remove people who can’t or won’t see eye-to-eye with your strategy — particularly if they occupy influential positions — it can damage your culture and your ability to serve customers.

“We try to keep as many of the original people as we can, but if the culture doesn’t work, you can’t take too long to make the changes,” DeBenedictis says. “If people just don’t understand a corporate philosophy, if they’ve always been a part of a small business, they’re probably not going to understand how we do business, and they’re not going to be productive or happy.

“It’s the people who take up with us very quickly, who like the idea of being with a bigger company with more dollars to spend, those are the people we like to keep. Those are the people who are going to know our type of business.”

Promoting a culture to a new group of employees is primarily the product of two factors: managing by example and managing by data. Managing by example means you set the cultural example yourself — placing an emphasis on customer service and high quality standards with your own actions. It also means highlighting the people in your organization who exemplify your cultural values by putting them in places where they can influence the values and behavior of others.

Managing by data means you set a plan of action that includes well-defined goals, and then using metrics to ensure that your managers and employees are meeting those goals. If your company isn’t hitting targets — whether they be on a companywide level or further down the ladder — it can be damaging to culture every bit as much as a high-ranking employee who isn’t sticking to the plan.

“You have to know that you and everybody else in the company should lead by example,” DeBenedictis says. “They’ll see how you operate and realize that this is how they should operate, as well.

“Managing by data is critical, as well, because you can’t do it all by instinct. As engineers, we learn to listen, analyze and then set a plan of action. Our assets are 100-year assets, so we can’t just do it by instinct. We do a lot of studies and data, and then make huge investments.”

Your biggest allies in developing, sustaining and promoting a culture will almost always be your long-term employees. Your staff members with the greatest company longevity have an extensive knowledge of your processes, your core values and why it all makes sense for your company. Compensation and benefits play a role in reducing turnover and increasing your numbers of 10, 15 and 20-year employees. But aside from that, committed employees will often groom other committed employees.

“We want our people to feel like if they want to work for a company like ours and they want to do a good job, they can be employees for life,” DeBenedictis says. “That is very rare in today’s world. You have to expect that employees should want to be with you for a long time, find their potential within the company. That’s why a part of our culture is entrepreneurship but also consistency and a reward for professionalism.”

Impress your customers

There are many little ways you can impress customers and keep them loyal as your company grows and changes. You can mail coupons or throw in some loyalty discounts for long-standing customers. You can take the time to get to know their names and learn enough about them to strike up a conversation when you see them.

All of those tactics help. But there is only one true way you can build loyalty with customers: fulfill your promises. Do what your mission statement says you do.

At Aqua America, DeBenedictis has made reliable water service the No. 1 priority. With a water utility provider, there isn’t much else to guarantee besides faucets that run and toilets that flush. But when the faucets don’t run and the toilets don’t flush, customer attitudes and confidence can wither in a hurry.

“The No. 1 issue is we get in there and start fixing their system right away,” DeBenedictis says. “The key is that customers see the difference you make early on. For us, it might be a new water plant, fixing leaks, improved water pressure. If we do those things, we get good customer feedback because we got right in there and fixed those systems right away.”

If you want your employees to place an emphasis on customer service, you need employees who realize that they’re not working just to make the delivery or produce the product or balance the budget. They’re working, in their own way, to satisfy your customers and keep them coming back.

Once again, it comes back to culture and what you emphasize as a leadership team.

“If you give people a place where they want to work for life, they’re going to come to you with the mentality of being a professional,” DeBenedictis says. “Then, they’ll say that their job isn’t just to make the repair, it isn’t just to put the pipe in the ground correctly, it’s to make sure the customer understands what is going on and why, and that they’re happy with the job we are doing.

“We get a lot of letters from customers when our employees go above and beyond the job they were asked to do — such as, they went to someone’s house on a service call and found another leak somewhere else and fixed that. If you broadcast those examples, people start to know that their job is to make the customers happy. That is something that really has to be a part of the culture from the start.”

Once again, you need to turn to your long-term employees to set the pace for customer service. When your long-standing employees hold others accountable for maintaining the reputation of the company, it’s a positive form of peer pressure.

“If you’re in a company that doesn’t have a lot of turnover, the peer pressure gets to be important,” DeBenedictis says. “The reputation of someone who has been at the company for 25 years is at stake, and then you’re bringing in a new person who might not be doing things up to their standards. That’s when employees can affect this. It’s peer pressure as much as it’s discipline or anything else.”

If you don’t have a customer-focused culture or if you can’t adequately project it to your customers, your company’s reputation will start to suffer. It’s an ongoing battle, and you need as many allies as you can find.

In the end, you are the company your customers think you are and you are the type of leader that your employees think you are.

“Most people don’t know where the water plant is in their town,” DeBenedictis says. “They just know that water comes out of the faucet and goes down the drain. They don’t know where it comes from or where it goes. But they see the trucks out on the street, they see us digging up and replacing old pipe, so they see that we’re making that investment in them and that we’re trying to build a long-term relationship with them and their towns.”

HOW TO REACH: Aqua America Inc., (877) 987-2782 or www.aquaamerica.com

Friday, 25 June 2010 20:00

Local authority

Shortly after Chris Van Gorder began his tenure as the president and CEO of Scripps Health, he attended a marketing meeting at one of the system’s hospitals.

“I was listening to their marketing plan,” Van Gorder says. “Their marketing plan was to take as many patients away from Scripps La Jolla as they possibly could.”

Five different health care campuses in the San Diego area share the Scripps name. They’re all under the same corporate umbrella. But each location was wrapped in its own silo and, in some cases, competing directly for business with another Scripps location.

“We’re all one company, so that makes no sense whatsoever,” Van Gorder says. “But people were thinking and operating in their own silos. Hospitals can become very big silos, and it then becomes very easy for an employee to say, ‘I work for Scripps, but I really work for Scripps Mercy Hospital. It’s a mindset that pays no attention to the fact that you might be in direct competition with other areas of the organization.”

The silos had developed over time throughout the 12,700-employee organization, ironically because the power at Scripps had become too centralized. The system’s corporate leadership had dictated policies from headquarters, and in many cases, the administrators, doctors and staff on the hospital level didn’t agree with the policies or they felt that the hospitals weren’t given enough say in creating the rules.

As a result, the hospitals had become strategically and philosophically detached from corporate leadership and from each other.

“It was the biggest challenge I had when I first got here: how to overcome a vote of ‘no confidence’ from our managers and employees on the organization and its strategic direction,” Van Gorder says. “They simply did not agree with our direction or strategic plan.”

To re-engage the team members working at the hospital level, Van Gorder had to put decision-making power back in their hands. He had to give the hospitals an ability to impact the strategy and direction of the organization. He had to decentralize the entire system by starting from the center and working his way out.

Build the right plan

With no backing from the organization as a whole, the strategic plan at the time simply wasn’t working. Scripps was losing money, there was little to nothing in the way of an overarching company culture, and the entire system suffered from the effects of weak relationships among its various levels and locations.

The strategic plan would never be realized in that kind of climate. So Van Gorder scrapped it altogether. Instead, he and his leadership team rolled out a tactical plan that acted as a form of triage, aimed at addressing the most severe problems first.

“We literally threw the strategic plan away, and that received immediate applause,” Van Gorder says. “Then we decentralized the organization as one of the first steps of the tactical plan, pushing accountability down to the hospital executives and medical staff. We weren’t hitting our targets, financially or otherwise, because there was no ownership.”

Van Gorder began to engage the system’s physicians by forming a physician leadership cabinet — bringing all of Scripps’ elected physician leaders onto a single council with the goal of assisting top management with critical decisions about the organization’s future.

The object was to begin stimulating ideas at the hospital level, and then giving the staff members an avenue for feeding their ideas to the corporate level.

The connection between the field and corporate levels is a key part of this stage. Without the connection to corporate, you run the risk of further entrenching the silo mentality, as employees at one location develop a best practice and might not be eager to share it with other locations if trust and familiarity aren’t present.

“In decentralizing, the object is to try to drive accountability back to the hospitals, but in doing so, recognizing that it creates the opportunity for even more silo orientation,” Van Gorder says. “Over time, what we’ve done is rebalanced that. There are things we need to do in a standardized way for more cost-efficiency and effectiveness. But at the same time you don’t want to lose the accountability key. So you develop a system where decisions are made at the local level but communication is very robust from the corporate level so that things are standardized across the organization.”

Lead with your middle

Many of the changes at Scripps were operational in nature. But the system also needed a cultural overhaul, and cultures aren’t changed from the top down. They’re not changed from the bottom up, either.

Van Gorder says cultures are changed in the middle. Your middle managers are high enough on the ladder to be visible to their entire company segment, but low enough that they can still have frequent personal contact with employees on the lower rungs.

Middle managers can reach every corner of your organization. With that in mind, Van Gorder places a top priority on getting his hospital-level management on board with his new decentralization plan.

“I’ve been in a lot of organizations and I’ve seen no way that a CEO can write a memo to change culture,” Van Gorder says. “At the other end, there is no way a ground level employee can change a culture. So my hypothesis was that, over time, the middle managers would become the agents for culture change.”

Van Gorder constructed a panel of 25 of Scripps’ middle managers and placed them in a yearlong program of periodic full-day sessions. Each session contained several hours of open discussion with Van Gorder, during which he encouraged frank discourse and tough questions about the health system’s future.

“Every time we’d do this, they’d all come in a little timid, a little unsure about what they could ask me,” he says. “I’d usually chide them, tell them that they’re not a very good class because they’re not asking tough questions.

“There were only two parameters we had for the question-and-answer sessions: We didn’t allow personnel-related questions and we didn’t allow questions about anything related to a confidentiality agreement. Everything else was fair game. What that does is, eventually, it starts getting people more comfortable with me and each other, and it gets people to be more transparent with information.”

If you’re going to get your middle managers on board and allow them to become agents for the organizational changes you are planning, first you have to give them a reason to get on board. You do that by giving them a chance to understand why a decision was made, how it impacts them and how they can help carry it forward.

“What I’ve always said is that people need to understand why decisions are made in an organization,” Van Gorder says. “I started out as a clerk in the emergency room and I spent many years thinking, ‘That is a crazy decision; why would they do that?’ It builds kind of a distrust of the intelligence behind decisions that were made, a distrust of the overall direction of the organization. But if people understand the parameters of a decision, they might understand the decision and be able to own it better.”

After a year of meetings with middle management, Van Gorder began to see a change in attitude throughout the Scripps system. Managers began to take a wide-angle view of decisions, looking at cu

lture and strategy from the perspective of corporate management instead of just from the perspective of their own organizational units.

“I now had a group of 25 people who understood that the center of the universe didn’t exist in each of their business units,” Van Gorder says. “They began to understand that the greater Scripps was a pretty robust organization and that there are experts throughout the organization that they can tap into. Rather than doing something all by yourself, maybe somebody has already done it at one of our sister campuses.”

From there, Van Gorder put a message in his middle managers’ minds and sent them out to their respective campuses to spread the word.

“I told all of my middle managers that they are my agents for culture change, and what I expected from them is to go into their hospitals and talk about how we have a whole system here to help you,” he says. “No. 2, I told them to demand more from the people they work with. Senior management should be delivering more to you and you need to deliver more to the people who work for you.

“Truthfully, even though it was a cool thing to say, I wasn’t sure if even I believed it. But they proved me right, and they brought the whole organization together.”

Develop new leaders

When building and implementing a cultural and strategic change, Van Gorder says the two most important things you can do are find enthusiastic leaders and listen to them.

“When you give somebody an opportunity to step up, there is a loyalty and a drive that comes with that,” he says. “I surrounded myself with hard chargers who were excited to be leaders, then I listened to them. Listening is a key piece. I listened to my corporate leadership, my middle managers and my employees, and that connection jumped our culture ahead by literally years.”

It can be a lengthy process to find the right people who can become effective decision-makers and promoters of the culture in a decentralized organization. But the time and effort is worth it if you can make the right hire.

What makes for a “right hire”? One critical element you should always look for is an interest in your business and industry.

“You always want to be looking for people who are interested in the business you’re in,” Van Gorder says. “When I was interviewing for our CFO, I interviewed candidates for over a year. Our search firm brought in some of the most talented people I had ever seen. They had outstanding backgrounds, but you could tell that they often thought they needed to run a bank for me. They had to manage our money. But what I wanted them to understand was how the money was to be used in patient care. We don’t run a bank. We earn our money for one thing, and that’s patient care.”

It comes back to one of Van Gorder’s guiding principles, which is to build his organization around people who are able to view decisions and policies from the perspective of how it benefits the whole organization. In Scripps’ case, the organization doesn’t benefit unless patients receive a high level of care, so all decisions need to impact patient care in a positive fashion.

That mindset has helped make Van Gorder’s turnaround of Scripps a success. In fiscal 2009, the system had an operating margin of a little more than $100 million.

Van Gorder ended up hiring a chief financial officer who is not a certified public accountant. Instead, he hired a management engineer who understood organizational operations and how money needed to be used to achieve Scripps’ end goal of outstanding patient care.

“Every CFO, CEO, every leader is looking for what they believe to be a good attitude,” Van Gorder says. “We do take some of the objectivity out of it by requiring everybody we hire to take an exam that helps identify some attitudes and traits. But when push comes to shove, it’s really about the persona connection between manager and subordinate.

“We do make mistakes. I’ve made mistakes in the past with people who I thought would be a great fit, but they didn’t fit. But over the years, I’ve made that mistake less and less because I’ve developed a level of experience and I trust my instincts more.”

How to reach: Scripps Health, (800) 727-4777 or www.scripps.org

Scott Dennis recognizes that most businesses can’t be total democracies. Sooner or later, someone has to make the decisions or the business will not grow and progress toward its goals.

But that fact doesn’t eradicate the need for a strong sense of collaboration among team members. At D&K Engineering Inc. — a developer and manufacturer of electromechanical products that generated $35 million in U.S. revenue last year — Dennis and the rest of the leadership team have worked at creating a culture of collaboration and communication among the company’s employees.

Smart Business spoke with Dennis, the company’s co-founder and CEO, about how you can build a collaborative mindset into your company.

How do you begin to promote collaboration?

My leadership style — and the one that probably pervades our organization — is a collaborative style. While we work hard on making sure goals and vision are very set and clear to everyone, we try to accomplish our goals in a collaborative way whenever possible. We do recognize that someone ultimately has to make the call. It’s not management by consensus, but we do try to collaborate together because we are an innovation company here.

How do you foster a collaborative mindset with employees?

One, that starts with the kind of people you try to hire. We hire people who are very passionate about what they do. If we’re trying to do a new product development endeavor, and we have a group of engineers sitting together, once you have an environment where everyone’s input and valued and it all contributes to solutions, it kind of snowballs from there.

The other piece is to set an environment where you’re not afraid to confront the brutal facts about whatever the situation is. It may mean facing difficulties in a project or you’re behind schedule or you’re not meeting some other goal or specification. So you need to be honest about where you are, working through difficulties together as a team, and then celebrate the successes on the other side. If you do that over and over as a team, over time you turn around and find that you have quite a collaborative environment.

What tips would you give other business leaders about creating a collaborative environment?

You have to establish rapport with everyone, and that will be different depending on the kind of company you have. In our company, most are professionals with degrees, so once you’ve given people responsibility within a project, that kind of collaboration develops within the company.

But you also have to actively build that rapport, as well. We have quite a number of regularly scheduled casual events, and we’re kind of disciplined on scheduling these casual events, like barbecues and pub nights. You do get to know people better in a casual setting and develop those communication channels. Perceived barriers are knocked down. Then when you’re in a higher-pressure arena, some of those perceived barriers are gone because you got to know each other in a more casual setting.

Also, as a leader, you cannot be afraid that you don’t like the news coming at you, to take that input, learn from it and not bite people’s heads off if you don’t like what is coming at you. That is another factor in ensuring that communication flows smoothly. It comes back to being the type of organization that always confronts the facts of the situation, no matter what they are.

It takes a lot of discipline to be willing to take the bad news and use it to improve the company. You might be frustrated and you don’t think the circumstances should be that way for whatever reason. But the reality is, the situation is what it is, and as a leader, you need to make up your mind that you want to know the actual facts so that you can do something about it.

People aren’t perfect. Obviously you want to hold people accountable for their responsibilities, but you also have to be realistic that not everybody performs at an A-plus level 365 days a year. People makes mistakes, the organization might miss something, so it is better to know what went wrong and try to put procedures in place to make it not happen in the future.

How do you take mistakes and turn them into learning experiences?

Let’s call them ‘honest mistakes.’ In our business, doing research and development, by definition, you know you’re going to run into unexpected roadblocks. So you have to make sure you’re testing new solutions, and sometimes they work, sometimes they don’t. But to take actual errors and turn them into a learning experience, use ‘we’ instead of ‘you’ a lot as you’re talking to your people. As in, ‘We should do this in the future,’ rather than singling people out and putting them on the chopping block for honest errors. Also, since you’ve acknowledged that everyone makes mistakes, take ownership of your own mistakes. Be willing to tell people, ‘I messed up,’ and take ownership for your own issues. If you can do that, everyone else will feel comfortable enough to do that also.

How to reach: D&K Engineering Inc., (858) 376-2500 or www.dkengineering.com