Super User

Friday, 25 September 2009 20:00

Smooth sailing

Tammy Krings may be even more tired of hearing about the recession than you.

She’s not one to say that she’s had it worse than someone else, but the downturn came early for Travel Solutions Inc.

“The travel industry felt it very early, and we took a very quick view of how it was impacting us, and one of the things that we quickly concluded was that our business was down, obviously, and we looked at it by sector,” she says. “We looked at it every which way we possibly could.”

As the recession deepened, Krings, who is a CEO and leadership coach at the travel company she started and co-owns, had discussions with her peers to pick their brains about what actions they were taking. She was surprised to find most executives had the mindset of a cheap plastic surgeon: cut, cut, cut.

“I’ve talked with a lot of my CEO-level colleagues, and I would say, ‘What are you doing?’ and they would say, ‘Well, we did this,’ and I’m waiting for more, ‘What else did you do?’” she says.

“We went to great consideration to make a very comprehensive recovery-type plan before we needed it, and that’s why we did a very long list of tasks and initiatives to make those things happen, and most of my CEO counterparts were saying, ‘We’ve cut costs,’ and that is not a sustainable mode of operation. We were looking at a remedy that would be sustainable across a long period of time [and] that would also build up the disciplines of the business so that even in the good times we are lean and mean.”

While Krings took many different steps to help get the $645 million company through the downturn, the basic overview of the plan was to get her 160 people to understand what was happening and what it meant for them, take initiatives that moved the company forward and to make any cuts as quickly as possible so they could get back to business.

Get people on board

When times start to get tough, it’s well known that the complainers come out and start to kill morale. So you have to get out and let people know you’re still leading them and the fight is against an external enemy. That takes a degree of leadership, not management.

“Leadership and management I see as two different things,” she says. “You can have a good manager that is technically good at managing things, but the intimacy that you have to have with people to be a good leader needs to occur consistently and you need to be able to draw an influence across a wide behavior over groups of people.”

Drawing that wide influence comes in steps. But, good times or bad, you better start by being visible on a daily basis. But taking the next step toward getting people to trust you as a leader is tricky. When it comes to getting more in touch with people, many leaders start by asking about personal things, but Krings doesn’t go there. She wants to avoid generic questions to be more sincere, and she also doesn’t want what the kids call TMI: too much information.

“I do think a leader has to be very careful in what kind of intimacy they ask for from their folks,” she says. “So I will ask them things about how comfortable are you feeling in your role. ‘Do you feel we’ve done a good job getting you the right training; what’s missing that we could do to help you,’ and if they say, ‘Gee, I really need extra blah, blah,’ I say, ‘Well, have you told your team leader?’ And so now I’m saying to them, ‘You’re accountable for that,’ and if they haven’t [told their team leader], then it wouldn’t be unusual for me to call a team leader over and say, ‘Let’s have a chat about how we can help Suzy Q a little better.’ So they see an immediate response and that can also help to diffuse people talking about things that don’t matter.”

When times get tough, you have to further build that rapport by sharing details candidly.

“[What] we have always committed to our associates is that for anything that impacts them, they will know what we know, when we know it, and the message is as important as the timing so you can control any rumors, or in the absence of communication, they’re going to draw their own conclusion.”

But while being candid, understand that empathy, not sympathy, is what employees want.

“You can’t appear to be sympathetic; empathetic would be more appropriate in that we’re all in this boat together,” she says. “And help them to understand our perspective on things. ‘This is what we’ve done; this is why we’ve done it. This is what we need you to do to make it successful. Here’s why we think it can be successful; here’s the result we’re looking to achieve.’ If there’s any kind of associated compensation or reward to that, tell them what that would be — it could simply be you get to keep your job. I like to do these sort of emotional talks about how it impacts you and then I like to focus on the statistics, because that helps take some of the emotion out. ‘Here’s what we’re expecting to achieve on a P&L-type level.’ Coming up through the ranks, I’d heard very often people need to have a pat on the back, but that’s a tough thing to do without it feeling condescending or insincere. You don’t need to tell them, ‘Hey, you did a great job,’ every other day. That will be addressed in a lot of different ways. To help it be more sincere, use good examples as examples of what to do as opposed to calling people out for bad examples.”

Get your people moving forward

As she was getting her people to support the company’s actions to combat the downturn, Krings made some uncommon moves to spark some momentum: Travel Solutions hired three salespeople and expanded its product line.

While it may seem counterintuitive, the initiatives came as part of a Growth 360 initiative that Krings led that took a look at all the internal efficiencies of the company, including a new building lease.

A quality review like that starts with a basic question: What is the core business you are in and how are you doing in that? The answer led to hires and cuts for Travel Solutions, as Krings and her leadership team found some inefficiency in their processes and also some opportunity to expand sales with clients by adding products they should have already been using.

“It seemed counterintuitive even on the inside, when we’re saying we’re going to reduce staff but we’re going to hire salespeople, so one of the things we knew we had to do was secure additional business,” Krings says. “We’re a transaction-oriented business, so if our sales are down, our transactions are down. If our transactions are down, we need more of them.”

But when you want to make a move like that in a bad cycle, you have to do it a little more carefully and with a little more thrift. While Krings didn’t want to share the exact model Travel Solutions used, she says she hired extremely seasoned salespeople and their pay scale was heavily performance-based.

“What we found out there is the sales folks who were confident in their capabilities were accepting of a creative compensation program, so we basically have a pay-per-performance type of program, all of them have the ability to make a lot

more money than I do,” she says.

Krings says that model did exactly what it was intended to do: turned off middle-of-the-road candidates and kept costs low.

“As soon as we mentioned pay-per-performance, if they started to gloss over, it was like, ‘OK, you can leave,’” she says. “I could tell it was a confidence issue.”

While Krings says it’s too early to call the hirings a roaring success, because Travel Solutions’ sales cycle is so long, the results thus far have been solid, and she says the company has built a heavy pipeline of business in a time when many travel companies are going under.

Make your cuts quickly

While cutting costs couldn’t be Travel Solutions’ only strategy, it is a fact of life in severe downturns. Still, Krings wanted to do it with some strategy. The first thing she wanted to do was be careful about who she let go.

“We have a very rigorous human resource and development initiative, and we identify those who are in trouble basically and who are having difficulty performing, and we document those things and we coach them,” she says. “But there is this obligation that we have to tell somebody, ‘You’re not going to be successful here,’ because they may just hang around for the sake of drawing a paycheck, and it hurts them because they know they’re not a contributor and it hurts everybody around them because they’re the ones that have to pick up the slack.”

While you can probably name the people you’d cut quickly if you had to, the second cut is the deepest. Krings says the second group of layoffs came from people they were coaching whose career track had them some ways from being highly productive.

What’s important at each stage is to tell people and do it in the same day if possible.

“We were sharing with everybody, ‘This is what’s going to happen and here’s what we’re looking at,’ and it happened very, very quickly in terms of laying people off, because we don’t like this stuff to linger,” she says. “If you’re going to take action, you announce it and you do it. You do it fast and you do it well.”

If you don’t do that, you’ll lose the wrong group of people.

“The timing is absolutely tethered with the success of the emotional outcome,” she says. “When you let it linger, folks will again start drawing their own conclusion. You may end up losing people you want to keep because they might be some of the most employable and they hop on that job search bandwagon and you’ll be out your top producers.”

By doing cuts as she announced them, Krings was surprised to find that what she thought would be a somber day was actually an OK day. In fact, a few people who knew they weren’t cut out to stay at Travel Solutions thanked her. Not everyone was that happy, of course, but the quick cuts made for a clean break. In the time following the layoffs, the company was able to ask others to make concessions because it told everyone that each person was a part of a group the company wanted to keep. Krings told hourly people they’d have to take a few less hours and were surprised to see people volunteer.

“Initially it was, ‘Gosh, I hope I’ll be able to pay my bills,’” Krings says. “Then it turned into we had some folks who came forward and volunteered, and we had one gal who said, ‘I’d love to take the summer off; I just had a baby. Can I come back in September?’ and we said, ‘Yep,’ that takes a little bit of stress out of it. … The general consensus after a couple of weeks was we are all in this together, and we’re kind of fortunate that we have the option to make this choice instead of laying off a few more people who we considered people we wanted to retain.”

All this is not to say things are perfect at Travel Solutions, but Krings’ multifaceted attack of the downturn has helped her company start to dig its way out.

“We’re starting to see teeny-tiny upticks,” she says. “I don’t think we’ll be a turnaround that we go from one day to the next and everything is all rosy, though.”

But while things won’t immediately be all rosy, Krings’ plan to do more than just cut has put Travel Solutions in better shape than before the downturn.

“That’s the biggest part of what I feel we’ve been most successful at, is using this as an opportunity to build a plan that’s sustainable across a fairly long period of time and provide us a business model that keeps us in a healthy state,” she says.

How to reach: Travel Solutions Inc., (614) 901-4100 or www.ts24.com

Wednesday, 26 August 2009 20:00

Building for the future

Joel S. Pizzuti comes from a pretty good legacy of success, but he still worries about his company.

Sure, for more than 33 years, The Pizzuti Cos. has seen its share of downturns and recessions. But through that time, the company founded by Pizzuti’s father, Ronald, has become one of the best-known names in Columbus, opened offices across the country and has grown consistently. Still, this particular storm is a rough one.

“Certainly we’ve been through a number of recessions and come out of them stronger,” Pizzuti says. “But the major difference it seems today, as compared to economic recessions in the past, is that the access to capital is just not there. The challenge today is that we’ve been at a standstill to a certain degree, and until capital becomes more readily available, this is going to persist.”

But Pizzuti, who serves as the company’s president and COO, hasn’t let a downturn knock his company off its long-term path. Pizzuti and his father have worked to construct a master plan for the company, and while slight course corrections have been made, they’ve taken great strides to keep people on track at the $252 million real estate services firm. It’s not easy to keep a company of that size moving forward in a downturn, but Pizzuti has kept the company focused on its strengths and looked to add innovation to what it already does well. During that time, he’s addressed course redirections candidly with his people and helped them keep the context of the overall vision.

Stick with what you know

Not surprisingly, Pizzuti is quick to mention his father on his short list of mentors. He also mentions him when thinking about the best advice he’s ever been given.

“He’s always preached sticking to what you know, stick to what you understand, don’t try to do everything,” Pizzuti says. “When times are good, don’t try to stretch too far into things that look interesting that may not be part of your core business or things that you don’t understand particularly well, and when times are challenging, like they are now, that pays dividends.”

This mindset has helped The Pizzuti Cos. last through the years. Like most, Pizzuti didn’t know the extent to which the economy would fall in the last year, but four years ago, he helped get Pizzuti Solutions off the ground. The new division wasn’t about jumping into uncharted territory, it was about business balance.

The division is focused on public-sector, fee-based work and isn’t totally dependent on borrowed money. It’s not exactly the company’s traditional bread and butter, but it’s certainly in the same spread. So how do you expand into something like that? You start with your talent pool. In good times or bad, if you want to adapt your business while sticking to what you know, you need to understand what skills you already possess in your industry. If you do a survey of your talent, you’ll probably find people have an array of experience in similar business extensions.

“We’ve got 14 people with 100 years of public sector experience,” Pizzuti says. “They understand the ins and outs of public-private partnerships, and it’s been incredibly successful. That’s given us a nice balance in our revenue year over year, and when the private development returns, which it inevitably will, we’ll be that much stronger.”

If you take stock of your people and find that you don’t have a lot of room to spread out, don’t panic. You can also use down cycles to do your homework on other things you’ve wanted to do. You might not have as much timeline work, but you can certainly get your ducks in a row to prepare to take off when better days arrive — much like Pizzuti has.

“Certainly development activity is down, but we have a number of really exciting projects and we’re taking this time to get those prepared for the inevitable recovery, so going through the zoning processes, planning them, getting the master plans done, working with all the communities to get everything approved, working with the municipalities to get the infrastructure done and really set things up so that when the economy does improve and things do return to some sense of normalcy, we’ll be ready to capitalize” he says.

Innovate your space

Another thing about sticking to what you know is that it doesn’t mean you can’t be innovative. During a good business cycle, that means pushing for something slightly new. During a down cycle, that means creating more value-added products or services.

“These times are interesting, and it teaches us a lot of things,” Pizzuti says. “No. 1, the best companies that do things in the most effective ways will certainly survive, get through this and be stronger on the back end. But, to get through these times, it’s important to be creative, to exhaust every idea we can to keep people interested in what we’re developing, to keep our projects moving even though it’s challenging right now.”

That tone needs to be set at the top.

“Always set a tone of entrepreneurialism and wanting to constantly drive to be the best in your industry and always be innovative and keep on pushing the creative envelope,” Pizzuti says. “When that starts at the top, it permeates through the entire organization.”

Setting that tone requires you to open up your mind to employee ideas on how to reshape what already exists. Pizzuti is in weekly contact not only with people in the company’s Columbus headquarters but also those in the Chicago, Atlanta and Orlando offices. The goal is to make everyone feel included in the brainstorming.

“We have open lines of communication with every person in every city,” he says. “We are intimately involved in every deal; we’re working candidly with everyone, whether it’s one of our chief development guys or moving all the way down to accounting, maintenance, property management — there’s an open-door policy and there’s a lot of collaboration between us and them.”

But including people in innovation conversations alone doesn’t do it all. If you really want to hear new ideas, you have to ask people for them. Pizzuti notes that his team leaders are like specialized industry experts for their particular subject matter.

“A lot of the best ideas in our company don’t come from me or my dad, they come from all the smart people that work with us,” he says. “Everyone knows that in their particular area of expertise they have a deep understanding of it and if they have an idea or a concept or they think we should push a certain initiative, we take it seriously.”

All of this means you have to be willing to check your ego to hire, promote and listen to people smarter than you.

“That’s the culture we’ve had at our company for a long time, and it’s worked pretty well,” he says. “Again, we hire the smartest people we possibly can, and part of the reason we hire them is they do have good ideas. That makes my life easier.”

Pizzuti has seen his people adapt to the downturn with ideas like a promotion for its Prescott Place development that put a Smart Car in the driveway of new sale agreements. Letting employees tackle an innovative project like that won’t just help you get through tough times, it also means you’ll have better employee engagement and commitment. At The Pizzuti Cos., the average employee tenure is more than nine years, a rarity in a field known for its turnover.

Put course corrections into context

While Pizzuti is working hard to keep his company on track and innovate within a comfortable space, he concedes that this is one tough time. Because of that, his company, like most, has had some projects that have slowed. You have to address those things with your people because being stagnant will lead to worry, but he says you must do it in the proper context.

“A lot of leadership comes from communication and delivering a clear message,” he says “A message that explains the vision of our company, where we’re going, why we’re doing things and then it goes to the next level, which is effectively communicating with all of our associates how we together achieve that goal and what we expect from each and every one of them.”

To make communications clear, you can’t sugarcoat them. Instead, you have to honestly address things that have been taken off course slightly and tell employees how those adjustments still fit into the overall plan.

“We’ve been very honest with all of our associates,” Pizzuti says. “We have told them what we think the challenges are, and we’ve consistently done that. It’s been a little over a year since things started to get tough in our industry, and we have taken the position that sharing with them exactly what’s going on, why we think that’s happening and what our plan is to move through this challenging period. That way people aren’t asking questions, people aren’t wondering, and that’s been very effective.”

Doing that means having those honest conversations with employees, but it also means regularly refreshing the context of their daily work. For example, when employees are doing a little more preliminary work on project approvals and the like, they need to hear why that’s part of being ready to take flight when the downturn is over. Providing that framework helps motivation.

“Again, it’s about communication and sharing with people where we’re going and why we’re going there,” he says. “When we’ve explained to folks, ‘This is what we’re doing for the next six to nine months; this is where we need to focus our energy and time,’ all of our people get it. And they know there is a light at the end of the tunnel and they’re excited.”

Once you’ve communicated your vision and expectations to employees, you then must stay sincere to your original vision or plan. When times are tough, drawing up a brand-new vision makes people nervous and they have a hard time believing in you. But if you revisit your vision and explain alterations in a way that you believe, you’ll get buy-in.

“It’s critical that the leader believes in what he or she is preaching, and if that is the case, then it’s critically important to deliver that message clearly and concisely,” Pizzuti says. “But equally important is the idea that he or she has to follow it themselves. So we try very, very hard to stick to the path that we set.”

That means you don’t change your core ideals, you simply adjust them to the market. If your quarterly budget will be different due to external forces, you explain that, but you don’t scrap the whole budget and start over, you use it as your reference point for alterations.

“I don’t think the core way we want to run our company, the tone we want to set, ever changes,” Pizzuti says. “Now our day-to-day decisions or our quarter-to-quarter decisions can change — they’ve changed a lot in the last 18 months — but it’s my job to take that information, figure out what we should be doing and explain that, explain why it is the case, and then push in that direction. It’s more important to be consistent about how we’re doing things and why we’re doing them.”

How to reach: The Pizzuti Cos., (614) 280-4000 or www.pizzuti.com

Sunday, 26 July 2009 20:00

Coach ’em up

Dennis Abrahams is no rocket scientist.

He’s the president and CEO of fast-growing SageQuest LLC, but at heart, Abrahams is still a high school baseball coach with a simple philosophy on how you build success.

“I look back to when I was a high school teacher and coach; I look back to early experiences,” he says. “And my answer pretty consistently is, be good to your team and they’ll deliver. I don’t think this is rocket science.”

OK, it’s not rocket science, but there have been some impressive numbers floating around SageQuest the last four years, as the service provider of GPS fleet tracking and management solutions has grown more than 1,500 percent in that time. Along the way, Abrahams has lived the philosophy of taking care of his team, setting realistic goals to keep them on track and rebuilding the company infrastructure to give his 85 players better systems and products.

Smart Business picked Abrahams’ brain on how you set growth goals and why rebuilding infrastructure takes precedent over short-term goals.

Carefully bring in team players. We’ve always made certain to bring on board a team that’s not only talented and covers the breadth of skills required but also has to have the passion to succeed and, even more importantly, the commitment that it takes to succeed. We put every employee here through behavioral testing — are they a cultural fit; do they exhibit the core traits that we believe drive success? I’m a big believer in that stuff to the degree that a lot of people that I work with that I get along with make fun of me. They say, ‘You’re so into the interpersonal side; you’re so into the team side.’

We use a few different tools, we use BMA, Behavior Management Associates, we go through a battery of testing with BMA and then salespeople we also put through Sogistics testing. So the stuff we do is very behavioral, and people sometimes laugh at the stuff I do, but, very bluntly, we’ve almost had no turnover, and we’ve had tremendous success with our people.

You’re always tweaking the system, and as you grow, as you go from 10 employees to 30 to 50 to 70, the dynamic changes. But the core rudiments of what we’re looking for, the behavioral characteristics, the cultural characteristics, the sales characteristics, the technical skill sets … have remained pretty constant. Our methodologies have been adjusted over time but not dramatically.

Set realistic goals. This is where I’m a little different than a lot of people. I don’t believe in lighting the fire under a lot of people’s butts to cause them to perform. I always set realistic goals because if you have the right people, they never perform to the goals, they perform to their ultimate capabilities and a combination of what you’ve created and your skills in the market create the condition of performance.

Those early years, we were very practical, very realistic. We said over a five-year period where we wanted to be, and we said, ‘We can’t get there on day one.’ The mistake a lot of companies make is they’re so worried about how they’re perceived each quarter and each year, they lose track of what it takes to become successful. I just was blunt with our original founders, our owners and the venture folks that came on board. I said, ‘Look, this is who we can be; this is the process we need to take. If you don’t like this process, you don’t want me.’ I would constantly reinforce — and not in a negative way, in a very constructive way — ‘You don’t have to listen to me. But, if I’m doing this, we have to do it in a way that will work for you guys.’

I don’t let the market and the investors dictate the process to become successful because that’s a danger. … Early on we just created a course and said we’re going to create stabilization of product and infrastructure. So maybe this is a more specific answer: The first thing you have to do is say what market are you in, what does that market need and demand, and what are the processes and infrastructure to deliver on a sustainable way in the future, regardless of the speed of the initial success.

Rebuild your infrastructure. I’ve run three growth companies, and there are characteristics they all have in common, and in all honesty, it ties it back to a sports analogy. I had a number of baseball teams that were all mediocre and became good, and I really believed they all fit into the same category. To me, growth is all about controlled, focused aggression. It’s understanding what current and future customers demand and their needs, and then figuring out a way to deliver those needs while maintaining control over the process and margin.

Where most people fail in growth is they can either get the business and create the product but they can’t create the process and the margins you need to excel or they understand process and margin but they don’t understand growth.

So my view of growth is sustainable and aggressive with focused results, and I tell that to every company that I’ve ever run. For an example, in our early years, 2003 to ’04, we basically didn’t sell anything. I recreated the infrastructure of the shell company, and it probably scared the investors to death, but I said, ‘When we’re at the point to sell, we’ll be able to sustain our success.’ So most of our growth happened between 2005 to ’08. We’ve grown at well over 100 percent every year; we’re doing extremely well financially in a very, very tough market.

I always look at four pieces: growth, profitability, product strength — because that’s what we’re selling our customers — and shareholder value. And how we get there is with the best core product in our market. … That means you don’t always sell every bell and whistle, but those things that 80 to 90 percent of the customers want, you do better than everybody else.

How to reach: SageQuest LLC, (888) 837-7243 or www.sage-quest.com

Thursday, 25 June 2009 20:00

Two-way street

Craig A. Kasper didn’t create the company culture at Hull & Associates Inc.

In fact, Kasper, the president and CEO at the development and engineering company that solves challenges related to land, energy and the environment, credits the company’s founder and chairman, John H. Hull, with instilling integrity and two-way trust. And, he says, his people keep it going.

But whether he wants to toot his own horn or not, Kasper has a role in keeping up that mentality with his roughly 200 employees, which, after a recent merger, are in seven offices. From forming an executive group that can have candid conversations to creating transparent systems for leadership transition, he finds ways to sharpen that integrity-based culture.

“All of our leaders are that way, and again, it’s about transparency, honesty and trust,” Kasper says. “It’s gone a long way, and the company has never really changed that.”

Smart Business spoke with Kasper about how you can create transition strategies people believe in and why you better know your plan before sharing it with others.

Create transition opportunities. About 10 years ago, we created an associate level where we bring people in, they have a different compensation package, different incentive package, (and) that’s the group that we mentor for future ownership and leadership. So we identify future leaders and owners out about three years and then we start mentoring them. And the closer they get, assuming everything goes well, they know they’re going to be a shareholder or in a new position at least 12 months before they’re actually there.

At both levels, associate and shareholder, you can go to our intranet and look up the dozen criteria that we look for — and they’re different, obviously. So anyone who feels compelled or worthy of being an associate can come to us and say, ‘Here’s my criteria, I feel like I’m ready.’

At the same time, we are actively trying to look for those people; we look for their performance, things like that. So we have the objective criteria and then, after that, the leadership team will sit back and say, does this person make the group better from a subjective viewpoint. And then, once they’re associates, the next step, they have another dozen criteria they can look at to become a shareholder — obviously the difference there is they actually have to invest in the company.

We started back when we had only six or seven shareholders and … we wanted to make sure we had transition, that we weren’t going to be one of these companies that didn’t prepare the next generation and, all of the sudden, there’s no one to take over our firm. So we stepped back and developed criteria, and through the years, it evolved.

Know your expectations for transition. You have to understand your goals. What are you trying to get out of transition? In our case, we developed our ownership structure so that we’re not trying to sell the company on the outside; we’re trying to turn it over to the people that work here, so understanding your goals is important.

The other one is culture. What’s your culture? We’re an extremely family-friendly company, we always have been. It’s important for anyone to understand their culture to decide what type they are developing and how comfortable are you in turning it over to them.

Build a group of leadership resources. I go to a leadership conference every year in New York City, and the person that puts it on came up with this acronym, DDMS — dysfunctional decision-making syndrome. His comment to all the CEOs was [that] you need to make decisions, you need to attack the issues and not to be careless, but sitting back and not addressing an issue is detrimental to your business. You need to put your group together, and you need to attack and evolve as quickly as you can.

The first thing is the CEO leadership team. They’re my resources, and we’re all peers when we’re in there. We meet six times per year, and it really helps us, me, to deal with the issues.

There are about eight of us on it, and just having the two-way trust allows you to sit there and effectively battle the issues and come out with a resolution. You have to trust someone enough that you can constructively say what you need to say and they can say the same thing back to you.

We have a board of directors that really focuses on the big decisions. What I needed was more of a boots-on-the-ground-type group, so our COO is on it and our CFO, so that takes care of pretty much all of our operations. Our founder is on it, and then our director of development. And then we have four markets that we’re in, and each one of those market leaders is on my team also.

Fully explain your direction. At a minimum, I do two town meetings a year, one in February (and) one in July, and they focus on the previous year’s performance and where we’re going in the future. With the economy being so tough the last 18 months, I do a lot of communications every month or so to let employees know how we’re combating the economy.

It gets back to being able to trust the help around you. ... It’s just like being in front of a client; it’s important to be in front of the employees so they feel you’re connected with them.

Some of the cost-cutting measures that we’ve done have not affected the employees. We’ve not reduced health benefits or 401(k)s, salaries, so being able to not change their life while we’re going through this time. But it’s telling them things that are going to happen: We’re going to reduce our marketing, and we’re going to change things that may not impact them directly … but if they see it, they’re wondering if they are next. What’s really important is they’re keeping real busy bringing in work. As long as people are busy they feel secure. It’s when they’re sitting around thinking about, ‘Well, what am I working on now?’ that they get worried.

How to reach: Hull & Associates Inc., (614) 793-8777 or www.hullinc.com

Tuesday, 26 May 2009 20:00

Stretch run

Peter H. Griffith is far from old, but he understands his employees today live in a different world than he did when he was starting his career at Ernst & Young LLP.

“I started in 1981,” he says. “That’s a different environment, and a majority of our people in our firm have started within the last five to six years, so when you think about those people, that does create a challenge.”

But that challenge is one Griffith, who today is vice chair and managing partner of the Pacific Southwest region, has actually spent a good portion of his career thinking about. He’s twice come back to the greener pastures at the professional services behemoth that employs more than 135,000 people, and he says the reason is simple.

“Ask anyone at the firm why they stay here, and they all say the same thing: Our people and the culture that they’ve created,” he says. “We’re very proud that we’re consistently recognized as a great place to work. I have the cover of BusinessWeek from last year where they named us the No. 1 best place to launch a career, and that means a lot to me, because I have a daughter graduating from UCLA, so I know students scrutinize these things.”

But while Ernst & Young continues to pile up best place to work accolades, Griffith can’t take his eye off his evolving work force. Beyond a more diverse employee base, the firm estimates that by 2010, approximately 60 percent of its client-serving work force will be from Generation Y, which is loosely defined as those born between 1980 and 1999.

So Griffith has taken a close look at the 2,200 people in his region and found out that flexibility is a key component of retention. He started by communicating to Gen Y employees on their level, created systems to promote flexibility and learned what it meant to be a leader who accepted the terms of a new work environment.

Figure out what your employees want

Griffith has four children, so he has experienced and mastered every new communication outlet short of Twitter. But even though he understands the changes, he still spends a good bit of time learning what younger employees want.

“I try to understand what they’re looking for,” he says. “I speak to our new-hire groups and have a two-way dialogue (to learn) what are they trying to get out of their experience and their career at Ernst & Young.”

Griffith realizes the best thing he can do in his endeavor is to get help, since he can’t regularly speak with 2,200 people. Ernst & Young has a lead people development consultant, something most companies wouldn’t swing for, but that has led them to a practice anyone can afford. The firm has partner-Gen Y panels, which pair a half dozen younger employees with several senior executives for a conversation about the work atmosphere. The key is realizing the best way to get more from your younger employees is to start a dialogue about what they expect from you.

“I find the way that we solve a lot of things at Ernst & Young is we create a lot of awareness around an imperative and then we move to action,” he says. “It’s not always an easy thing. Sometimes you’ve got to make people aware of the issue and make sure it’s on the front of their mind.”

Using his comfort with modern communications, Griffith also likes to “play on their field,” creating the company’s first Facebook page, texting potential job candidates and creating a blog. It is in these communications where he began to realize what many leaders fail to see: Younger employees want to work hard, but the old rules are out. Griffith uses his blog to create a two-way forum where he can get real-time feedback on issues they see in the firm.

“One thing I know about the blog is, it’s available to our people, I know that I can control the content, so that it’s accurate, timely, virtual, and it gives us the ability to message what we want to accomplish in the sub-area and in the firm,” he says. “Leaders need to think about this because the people that I’m trying to communicate with, they expect a two-way platform.”

You can use whatever forum you like, but Griffith says the key is sparking a two-way conversation. He helps push that on his blog with things like Starbucks gift cards to the first five or 10 responders who respond to posts with viable ideas or suggestions, giving him fodder for ongoing dialogue.

“Sometimes you need to encourage and enthuse them to create the two-way platform,” he says. “But, remember, it goes both ways, and then I can respond again if something’s not perfectly clear with my own comment to their comment on my original blog entry.”

Put programs into action

To Griffith, his connection with employees reiterated one key thing about the mushrooming Gen Y work force.

“You’ve got to give people some flexibility,” he says. “You’ve got to develop a culture of flexibility to allow them to team together. And so we redefined how our people work. We provide all of our [employees who directly serve clients] with laptops and with 24-7 access to technology assistance anywhere in the world. And we have provided resources for our people to have flexibility in their professional and their personal lives.”

Flexibility is about making your people’s lives easier by adjusting their work-life balance, which Griffith says clears their mind and allows them to spend more time at work worrying about, well, work. Among other things Ernst & Young did, beyond giving flexible hours, was create a concierge service for traveling employees, help employees handle personal financial planning, and create backup child and elder care programs.

But Ernst & Young is careful not to just give people such freedom without taking into consideration how it benefits the business. Griffith says you have to know where your core success is and tie accountability to flexibility.

“The most important thing we do is we assess our client service satisfaction,” he says. “We have a client service quality program with our clients, and we ask them how happy they are with our team and the relationship and how much time our team is spending on it, are they responsive and so on and so forth, and our people would be held accountable for that. So if there was an issue there relative to somebody maybe using flexibility to the point that it might disadvantage our service to a client, then we’re going to hear about that really quickly.”

If and when something like that does come through, Griffith cautions that it’s not cause for an instant suspension of flexibility. Instead, he says you need to do a sit-down with those involved to reiterate that flexibility has to go around the vision. Ernst & Young also pre-empts that by doing what is called acceleration sessions.

“Before we even start serving the clients, we’ll get the team together,” he says. “We’ll run a big calendar on what everybody has going on during that project, so let’s say we have a six-month project that has 30 people working on it, we’ll sit down and create a master calendar.”

During that session, employees are asked to think about their upcoming schedule. While you have to realize there will still be emergency situations, mapping out people’s personal lives in conjunction with a fair and accountable work session can keep everything on track.

“Maybe we’re coming up on graduation season, so maybe somebody has their child graduating from school. … We can’t expect them to work that day,” Griffith says. “But if we plan that all out for all 30 of those people, and be thoughtful about it, we will accelerate our success as a team delivering service to that client. So there’s a loop there that we’re very careful about to make sure flexibility is working and clients are getting passionately served.”

Understand your flexible culture

Griffith is a family man, which is where he uses the flexibility in his own schedule, but he learned a lesson from an old boss that he never forgot.

“It’s critical as you’re developing this to realize that as a leader, it’s vital that you suspend judgment on what people do when you provide them with flexibility,” he says. “People do different things. You cannot have any opinions on, ‘Gee, they want flexibility in order to do X, and I only think you should have flexibility in order to do Y,’ OK, because we have lots of people in our work force that don’t have children, so you don’t need flexibility for that. Maybe they need flexibility because they want to go do an Ironman competition. That’s not my business to judge. If they get their work done, and they get it done in the highest quality manner, and that client is really happy, that is what we want to drive. So I would recommend to leaders they think about it that way.”

Moreover, if you want to implement flexibility, you have to give that open mind to everyone — even your senior leaders. Watching a normally hardworking vice president take off at 3:30 one afternoon may be hard to swallow, but that’s part of fairness to the program.

“If you have key executives that are on flexible work schedules, you have to support that,” he says. “It’s really important that they have the opportunity to be exceptional performers and leaders just like everyone else.”

And exhibiting that has to go all the way up to your office. Griffith works a lot of hours in a high-demand business, but he makes it a point to flash his own use of flexibility.

“Flexibility has to be something that you begin to get into your DNA,” he says. “Leaders have to demonstrate how they utilize flexibility. So, in other words, if I’m going to watch my daughter’s swim meet … I let people know. I might say to someone, ‘I can’t do that conference call right then, but can we do it an hour and a half later, I’ll be done with the swim meet, I’ll be at a landline, and it will work just fine.’ And I’m honest about it, and I work it out, and I demonstrate that type of flexibility.”

It’s not always easy for Griffith to exhibit that, but he does his best to do what he expects of his people, keeping a smart calendar and using his 24-7 access to his work files.

“If I need to go home and leave the office at 4 and get home and have dinner and then fire up the e-mails later that night, then I do it,” he says.

That attitude hasn’t just kept home life on the up and up for Griffith, who is closing in on 30 years of marriage, it also improves his leadership abilities at Ernst & Young. His use of flexibility shows his young talent their career can be satisfying on a personal and professional level. That, he says, is what keeps the firm on everybody’s best place to work list.

“Our people want to see that,” he says. “These are really smart people here, and to make this thing a career and become a great leader and to take this firm over from myself and my peers, they need to be excited about what they see. And balance is something I’m proud of and I hope that people say it’s the biggest success that they observe in my career so far.”

How to reach: Ernst & Young LLP, (213) 977-3200 or www.ey.com

Tuesday, 26 May 2009 20:00

Manufactured risk

Scott Balogh wants people to know that he’s messed things up pretty bad at Mar-Bal Inc.

Balogh and his brother, Steven, were with the company when it was five people and they tried almost anything to create innovation.

That brought success to the nearly $50 million manufacturer of thermoset custom-molded parts and compounds, but it came with more people and processes. Today, Balogh is president, and he and Steven are constantly trying to convince their 400 people that quality process is king, but they still need to spark creativity.

“What I always try to educate everybody on in any project is you have the voice of the customer,” he says. “You also have the voice of the process. … We’re marrying the two of them, and there’s never a right or wrong answer, but there are compromises you have to make. That’s part of developing that innovation culture; you have to take risks and be willing to make mistakes.”

Smart Business spoke with Balogh about why he doesn’t cry in his beer over failure and how to set realistic employee stretch goals.

Allot room for creativity and mistakes. When Steve and I started, it was the two of us, our father and two engineers. We were a $13 million company and now, quarterly, I address a group of 25. The sales and engineering team alone is close to 20 people. So the first thing that came to mind is, ‘Wow, we’ve grown — our baby’s grown up.’ The next thing is you start thinking about, ‘Well, we better start educating this baby as to how we got here, because (innovation) was a lot easier then.’

So it’s creating the communication networks and connections and developing project teams and giving everybody an opportunity to fail. When it was the five amigos, and three of them were named Balogh, if we screwed up, we let each other know it, but then we just had to get on with it. You couldn’t cry in your beer; it didn’t do any good to blame the other guy because you were going to see each other the next day. … So you learn to take development one step at a time and give people the opportunity and the support to do that. And it’s exceptionally hard because you typically find people don’t want to make mistakes, and we made a ton of mistakes.

We spent $2 million on a facility so we can do development away from the plant. The plant’s focused on cost. We’re focused in the engineering group and sales group on development, so you do have to separate the two at first, and once you start to move through what I call a tollgate, or a process in which we measure the development of a product, then you start to bring in the process engineers and the plant managers and the quality managers.

Require innovation through stretch goals. You have to set the goals so they’re achievable, but there’s got to be what I call a stretch component. It has to be achievable, something that’s realistic, otherwise people aren’t going to show up. They’re going to feel like you’re out to get them; they’ll say, ‘They’re out to fire me obviously, look what they’re asking me.’

I would say probably 60 to 70 percent (of their job expectation) is if they’re paying attention, they’re present, they’re leading their people and they’re focusing on the right areas. I would say the 30 percent is the stretch; you’ve got to create some kind of change to get through the organization to the next level. Take the sales example: You’ve got to create a buying opportunity or a design opportunity or a new product development opportunity with a customer to take them to the next level.

It gets your people to do things they haven’t done before. With the sales guy, it’s walking that shop floor or working with a customer and asking kind of the out-of-the-box questions, ‘Why do you do this a certain way; why is this a certain way?’ and finding some kind of competitive advantage that’s innovative.

Hire people who get it. If there is someone to be hired, the person doing the hiring will actually write the job description, work it out with HR, select a number of candidates, and what we have is a leadership or management imperative — by adding this person, what are we trying to solve, what’s this person going to do, what’s their mission? Obviously, you can’t do this for somebody that you’re hiring in the plant as a machine manager, that’s a pretty defined process. But this could be for your first-level supervisors, a staff engineer, a salesperson or even a senior accounting person.

They’ll come ask me and we’ll develop a job description. And if it’s something new, you do your best. You leave it open as much as possible but still give the person some idea of what performance will be required, what their metrics will be.

Then we have a cross-functional group interview [with] the person. So we put together a packet that tells the management imperative what impact this person’s going to bring and communicate that to all the people.

And it’s a two-way street. They also get a chance to view and see a lot of people in our business, some of which they’ll work with, some they might not work with, but they get a feel for our culture. … And it’s an informed decision by both parties. An individual would spend anywhere from 10 to 16 hours talking to people, not doing tests, but just talking to people, touring the plant, etc.

How to reach: Mar-Bal Inc., (440) 543-7526 or www.mar-bal.com

Saturday, 25 April 2009 20:00

Risky business

Dave O’Brien has no problem laughing off concerns about handing over the reins to the next generation of talent.

After all, it’s the next generation that has helped Oswald Cos., the independent insurance brokerage firm where O’Brien is president, average 18 percent growth per year over the last six years. O’Brien and other leaders at Oswald set stretch goals for their 400-plus employees and expect their young talent to take risks.

“I treat them the way I wanted to be treated when I was their age,” O’Brien says. “And I was given those types of opportunities early in my career, so that was the natural thing to do. As long as they communicate back, there are very few problems they create that we can’t solve.”

Smart Business spoke with O’Brien about how to ignite young employees and why you have to tell people why they don’t want to work for you before you hire them.

Work with people to build intelligent risk. We’ve grown aggressively the last five or six years, and we expect to continue to grow. As we do, that will create new opportunities for people.

They need to understand what those opportunities may be and which ones they may be a good fit for, and then we put them on a track to get there. With those folks, we very much get them to set stretch goals for themselves to help them get to the next level.

They have to see that when they do that, they are achieving greater results, that when they do stretch and take a little risk and push a little further, it’s much more rewarding, and the people that are willing to do that here are very successful.

We help them draw that conclusion. You ask them questions. You challenge them to think through how it would work, what it would take to be successful, what might cause it to fail. We have a process people have to go through when they make these types of investments, and through that process, they draw their own conclusions.

The goal is to help them understand how the idea or the concept is or is not aligned to the vision of the firm.

People who take risks and try things, oftentimes they succeed, and sometimes they don’t. If we discourage them from taking that risk, it wouldn’t happen again. We understand that every risk that they take and everything that they try is not going to work. Our point is, all right, let’s learn from it and let’s try another one; it will be that much better because we tried this.

The best benefit we have is that our younger people have become successful people. Those are our future leaders, and in some cases, they are our current leaders, and they are our ownership perpetuation plan. When those people take on new levels of responsibility, we see good things happen. That’s what drives our growth.

Communicate everyone’s role in achieving your goals. Oftentimes, you’re dealing with younger, less experienced people who need greater clarity and understanding of where they’re going, where we’re going as a firm and how what they’re doing ties into our success.

It also is important for us to understand what that generation is looking for and what they expect of us. The thing that our 20-something-year-old employees are looking for from us, as their employer, is different than that of those who have been with us for 25 years.

We assign mentors. We have a structure in place from an HR perspective to have communication and two-way feedback from those people. We also have more of an informal networking group for that group internally, so that group gets together to share what’s working for them, what’s not and to bounce questions off one another.

We actually formalized a position here internally. We took one of our very long-term employees, who has been here for 20-plus years, and gave her the responsibility for leading the internal communication and message within our firm. So we try to use that individual to create a consistent message that our practice leaders can then cascade through the organization because the larger we get, the tougher it is.

You have to simplify the process of communication by having a consistent message that that group is delivering.

So that communication strategy internally is very much about updating and measuring how we’re doing against the message. Or, if there’s been a change, it’s OK to adjust based on things that are going on in the marketplace, but we have to communicate that as well.

Let lofty expectations become your hiring filter. If you get hired at Oswald, you’ve met with a lot of people here. We are definitely looking for a certain culture. It’s a very rigorous process that we go through in terms of testing and interviewing and meeting with people. Our culture is not for everyone. There are some people who are very good at this business, can be very effective and very successful but may not fit with us.

Oftentimes, what I’m doing in the interview might make it seem like I’m trying to talk them out of it. We’re very upfront and clear in terms of our expectations, we’re very upfront and clear about what type and style work here, and that person who hasn’t taken their hat out of the ring is my litmus test in terms of, are they the right type of person, because we’ve made it very clear what won’t work here, and oftentimes people that understand themselves take themselves out of the running.

How to reach: Oswald Cos., (216) 367-8787 or www.oswaldcompanies.com

Monday, 23 February 2009 19:00

Believe

Not long after he joined the company in 2004, John W. Combs gave ShoreTel Inc. the equivalent of a sucker punch.

The recently named chairman, president and CEO told the then-$18.8 million unified communications company that the new revenue goal was $100 million. With the room suddenly silenced, Combs — who helped lead Nextel’s growth during the ’90s — assured people that the aggressive challenge was one the company could handle.

His track record helped sell his employees on the idea, and four years later, the company exceeded the goal, posting fiscal 2008 revenue of $128.7 million. After that, Combs found his people a little harder to knock out.

“When it was clear we were going to make the goal, it was not as crazy to say we’re going to hit a billion,” Combs says. “A new hire might say, ‘This guy doesn’t know what he’s talking about,’ and other people tell them, ‘He is crazy, but we will do it.’”

Smart Business spoke with Combs about why you need to ask who a potential hire’s biggest antagonist is, how you get your people to believe in unbelievable growth goals and why you have to build an A team.

Take the time to find an ‘A.’
You have to attract people to your team that are A players. If the executives at the organization are not A’s, then that isn’t happening. A’s hire A’s. B’s don’t hire A’s — and C’s never hire an A. So if you’re going to build a team — particularly if you’re going to grow something very large very quickly — you’ve got to have people who can do and accomplish a lot more and are more adept than people who are a B or a C.

I personally expect that the quality of the management teams, the sales teams, the engineering teams that we’re bringing in are top notch. There’s a real tendency to say, ‘This (person) seems good. I’m in trouble, and I don’t have any other candidates, and she may not be an A, but let me get her on board right now.’ ... And you say, ‘We’ll straighten her out later.’ And that never happens because you don’t change people.

A lot of people seem to think that checking references is just something that you do as it’s convenient. I personally take time to check references for the people that join my team, and I will spend an hour on the phone with those individuals probing.

I developed a list of questions, which helps to really get at the issues. If they didn’t include their former supervisor, ask, ‘Who was their boss, and what would he or she say about them?’ The one I like the best: ‘This guy Mike sounds like a good guy; who was his biggest antagonist in the organization? Oh, it was the CFO. Well, what would the CFO say about him?’

Or, ‘Give me a difficult situation you were in and how he reacted. Would you hire him again — if so, why?’ And if the answer to that question is yes, you ask, ‘Why haven’t you hired them in your organization?’

Earn support during times of opposition.
There are times when you have to go against the team. ... So being able to stand up and articulate your principles is important, but you better anticipate and handle the disappointment and frustration they’re going to feel.

If you have a strong need to be liked, then this is not a position you want because you have a lot of opportunity to frustrate people. You have to have a clear vision of where you’re taking the business, and you have to maintain that direction through the frustration of people who you really respect.

But being a leader is working through that short-term frustration to show them the way to that long-term success.

When Wayland Hicks was the CEO of Nextel, I ran the largest region of the company, and he and I didn’t agree on more things than we agreed upon. But he had the ability to articulate to me my position as well as I could, and if somebody could do that and decide to do something different, then I felt very comfortable supporting that.

I was surprised at how much passion I would end up putting into supporting his position because he understood my position and decided to go another direction.

Anybody can do that. It’s not a matter of communication skills; it’s based on the investment of time. If you’re in a rush situation, stopping and taking the time to listen to someone and then articulating their position back to them takes a lot of time. But if you do it, then people know that you listened and will support the process.

Use your credibility to encourage lofty goals.
You’ve got to set bold, impossible goals, and you have to be able to convince the team that they’re going to accomplish those goals. When I joined ShoreTel ... I made an announcement to the team that our goal was $100 million, and when I did that, there was literally no oxygen left in the room.

We’d been working for seven or eight years to get to $18 million and to have this person come in and say we’re going to get to $100 million was seen as being pretty radical.

But you don’t send an e-mail out saying we’re going to be $100 million when you’re $18 million; it’s always done in person. They have to understand from you that you’ve been able to reach big goals before.

At Nextel, I was the 34th employee, so it helps to share that track record with them, and by letting them see what you’ve done, they see that you know what you’re talking about.

HOW TO REACH: ShoreTel Inc. (800) 425-9385 or www.shoretel.com

Monday, 23 February 2009 19:00

Clued in

Ira C. Kaplan doesn’t think his law firm is ready for the final verdict.

Kaplan, the managing partner at Benesch, Friedlander, Coplan & Aronoff LLP, has been helping to push the firm toward getting all 300 people to better understand and involve themselves in where the firm is headed. The results are coming along, but the process is continuing.

“We’re not even close to perfect,” he says. “But I think, I hope, we have a handle on how to get better at what we value and people sense we’re moving in the right direction. And I hope that we’re effectively communicating it.”

But while Benesch isn’t a finished product, Kaplan says that the firm’s efforts have been helping to get everyone on the same page, motivating them in their work and in their ability to help the firm succeed.

Smart Business spoke with Kaplan about how to involve the next generation of leadership and why putting an existing vision on paper gives it new life.

Put your plans on paper.
One really important thing is being conscious of effectively communicating with your stake-holders so that they understand where the business is going and they understand how you’re going with them to get there, and they understand what the challenges and opportunities are. Very often, businesses don’t have a vision as to where they’re going, and too often, they don’t effectively communicate it.

We adopted a set of core values at the beginning of this year, and we communicated those to everyone in the firm and have little palm cards that say what our core values are. They are posted on our Web site, they’re in our firm literature, they’re in our lobby, and I carry them around with me and I hand them to clients when I go visit them because it is important for them to understand what our core values are.

So I wouldn’t say that those values are new, but putting them on paper is new, and we’re trying to use that to indicate more clearly how we manage our firm and manage our relationships, both internally and externally. And that helps.

Create avenues to share your direction.
We have a number of different opportunities to talk to our folks at different levels. We have monthly partner meetings where we share with our partners as much as we can.

Obviously, certain things can’t be completely opened up because they may not be ripe for discussion, but we try to share that, too. We share with each of our partners how the firm has done against plan for the prior month and why, and we share with our department chairs how their different departments have done on at least a monthly basis, so there’s a pretty clear understanding here how the firm is doing and where it’s going.

We also have regular meetings with our associates where we share information on the firm, and we have periodic meetings with our staff where we do the same thing. And I wouldn’t say anything is unique, but I think we’re more open than most people.

In terms of our strategic plan, we’re planning to have meetings where I’m going to address the associates separately and staff separately just to make sure they understand where we’re headed as well in terms of the plan. So always look for ways like that to try to be more open to solicit feedback and conversation with people.

It gives them a better sense as to where we are, what the future is and less of an opportunity to worry about it. In the sense that you can eliminate uncertainty, that’s always a positive thing.

Involve the next generation.
When you talk about how a firm grows and thrives, you can’t ignore its young leaders and up-and-comers. We can clearly see looking at the firm where the next generation of leadership is, and I think that’s real important.

I had a great predecessor ... and he had us in a real good direction that I’m trying to continue. Part of what we decided was maybe there wasn’t a clear understanding of who we were among our stakeholders here and who we wanted to be.

So one of the things that was high on my list of priorities was the strategic planning in terms of getting younger people or the next generation of leadership involved. We formed a strategic planning committee that was made up of about half of our executive committee and half of our partners outside the executive committee as well as some senior staff.

And we pulled into that process some folks who we believe we want here for the long haul and whose opinions we value and who we know we needed to listen to and who, frankly, have some constituents of their own because they’re doing a real great job here. You take advantage of opportunities like that to pull people into the process.

I don’t think we have the luxury nor do I think it’s smart to not involve them. You have to make this their firm. I think our folks feel a strong bond to this place, but you have to work.

It’s like a marriage — you have to work to keep relationships strong, and you have to pull them into those processes to understand or try to understand what concerns people have and also what opportunities they see, because they are your primary assets.

HOW TO REACH: Benesch, Friedlander, Coplan & Aronoff LLP, (216) 363-4500 or www.beneschlaw.com

Friday, 26 December 2008 19:00

Rowing together

Imagine the complexity of dealing with running a major hotel

chain.

Now imagine if that hotel chain also had all the problems of a

shipping company with more than 30,000 employees from 100 different countries to deal with.

Seems like Adam M. Goldstein’s job could make anyone a little

seasick. But Goldstein, president and CEO of Royal Caribbean

International, the lead brand for $6.15 billion Royal Caribbean

Cruises Ltd., sees the pleasure cruise line business for what it is.

“The main reason why I think I’m here is I understand that it’s not

about me; it’s about the entire team of people extending to the

waiters and the stateroom attendants,” he says. “I’m not on the

ships, I’m not with the guests, and I’m not with the travel agents for

the most part. It’s hard enough for me to even keep up with the

biweekly progress reports, never mind interact with all the people

that are doing the work.”

Look, unless Goldstein wants to rent out Dolphin Stadium and

hire about 30 translators, there will never be an on-site, all-company meeting about Goldstein’s vision for Royal Caribbean. Instead,

he is all about starting the cascading process through his direct

reports and realizing his limitations.

“You have to cascade it downward,” he says. “If you want people

out on the water to believe they work for somebody with integrity, you need to make sure that at each level of management, from

senior level on down, you have people who actually act with

integrity because they are always watching. For me, it was about

how do you get the senior vice presidents to be that way and how

do you get the associate vice presidents and then the vice presidents and the directors and so it goes.”

The process is all about getting his direct reports behind him so

they can begin to push the company vision downward. Goldstein

has found that doing that is about consistently showing integrity,

empowering his people and keeping a constant eye on his own

words to maximize employee involvement.

Show why you are the captain

First and foremost, Goldstein doesn’t want to mince words about

the No. 1 thing a leader needs to do to get other leaders behind him

or her.

“If you accept the opportunity to be a senior leader of any

organization, but certainly this one, you have to understand

that you are being evaluated for whether you are exemplifying

the principles that you are communicating out to the work

force,” he says.

The bigger your organization gets, the more eyes you’re going to

have on you in everything that you do. If you have one slip up or

one promise that you’re going to do something that you end up just

forgetting to do, it’s going to be remembered.

“A lot of it is how you conduct yourself every day,” Goldstein

says. “If you do things people perceive as lack of integrity, you

don’t get to erase that with your next nine days of doing the right

thing. It’s irretrievable.”

Since you are the torchbearer, you are also responsible for creating a “wow” moment for your people. That moment is about

making a stance on one of your core values that can resonate

across your entire staff. Often Goldstein says these can take place

when you have to make a change in course or when you’re a new

leader.

“The first day that you’re in the new area, every person in that

area knows more about that area than you do,” Goldstein says. “All

of the sudden, you’re their supervisor and they’re all saying to

themselves, ‘Why does this person who doesn’t know even what I

know, why are they leading me now? I don’t understand this.’ Well,

the way that you combat that is by showing that you are prepared

to deal with issues that have been lingering, in some cases, for

decades in that area without ever being addressed properly or corrected, that you’re willing to take on even the hardest challenges,

and they start to think, ‘Wow, this is different. This might work better.’”

For Goldstein, one of those opportunities came about 10 years

back when he took over hotel operations for Royal Caribbean.

The company was getting ready to unveil its new ship, Voyager Of

The Seas, and was looking to update the systems around compiling guest feedback. A few people had complained that some

guests were being helped toward giving generous feedback by

staff, so Goldstein decided he would tackle that by keeping

employees away from the process entirely — by penalty of termination. The edict was clear and sent a sharp message. It also

earned him a lunch with a director on the management team who

didn’t think he’d have the daring to follow through.

“He said, ‘We don’t have the guts to do that here.’ I said, ‘Watch

me,’” Goldstein says. “And he said, ‘It won’t work,’ and I said, ‘If

you feel that way, probably this is not a good situation for you,’ and

I didn’t fire him because he actually wanted to quit.

“And we never looked back. The ratings today are what the

guests want to rate us, and we changed all kinds of protocols on

the ship to hermetically seal the ratings process. And it’s doing

those things where people say, ‘Whoa, this is really going to be

different.’”

Empower the leadership

Goldstein says a big part of getting your direct reports behind

you is letting them do their jobs without looking over their

shoulder — for the most part. He spends a good bit of his time

on the big-picture portion of the business, but he checks in

with all of his direct reports via a monthly meeting and a

biweekly progress report. The progress report, which is usually around 40 pages, is a bulleted breakdown from each of his

groups listing the overview of their project and its status.

“We cannot master every detail, but we can challenge our people

on some details at some times so that they really are forced to

explain what it is they’re doing and why,” he says. “And then you

can help people out because if somebody says something in their

area, you’re able to say, ‘OK, that’s interesting, you should talk to

so and so in this other area of the business because they’re dealing

with something that I think would be very relevant to what you’re

talking about.’ You can only do that if you’re pretty near the

ground.”

Using a system that shows where each group is works not just as

a measuring stick for you on each group’s success, but Goldstein

says it helps to raise flags on details you may otherwise miss.

“If I see a bullet point in those pages that I don’t have any idea

what they’re talking about, I’m going to ask because I really expect

to know,” he says. “I don’t expect to know about a financing

arrangement at the same level that the treasury people do, but if

I’ve never heard of the financing and don’t know why we’re doing

it, I’m going to ask somebody, and that holds true for any of the

hundreds upon hundreds of bullet points. And it’s not because I’m

trying to micromanage — I’m not inserting myself into the vast

majority of those situations — but I want to feel the pulse of the

business enough so if I see something that either I don’t know or it

doesn’t strike me as right, that it makes sense to the people when

I talk to them or I can correct a trajectory that will lead to an

unproductive use of time. If you’re not comfortable dealing with

detail, you can’t be at the top of this business, in my opinion.”

Give a voice to your crew

Beyond trusting his people to do their everyday jobs with minimal

down-their-neck breathing, Goldstein believes that another big step in

getting your senior leaders on the same page is getting them to feel

like they have a voice in the path of the company.

“Even for senior leaders of a corporation, it’s not always easy to

voice your opinion,” he says. “Clearly one of the challenges that I

have, or that every president and CEO has, is to create an environment where your leaders are going to say what they have to

say.”

For Goldstein, the emphasis for creating an open culture for

senior leaders is to constantly think about how powerful they are

in the eyes of some.

“I have begun to appreciate the intensity of the impact on people

of what I say,” he says. “I’m not sure I fully appreciate it, but I have

told people over the years that if you’re in senior management, you

might think you are hitting somebody with a feather, but to them,

it feels like an anvil.”

No matter how welcoming you think you are, you have to realize that people are coming to you not just as a person but also as

a boss and the voice of the company — that gives every word you

use considerable weight.

“I really have to think about the words that I use,” Goldstein

says. “I would like to think that I’m a reasonably articulate person,

and I know that if I mean something to be constructive criticism,

there is, I would say, a very strong tendency of most people to forget about the constructive word and just remember the criticism.

So if I don’t really worry about what I’m saying and how I’m saying it, if I’m talking to a director or a manager or an analyst about

how they might do something differently, they are going to not

receive it well unless I go to very considerable lengths that they

would receive it well. And even still, there’s no guarantee.”

The thing to remember is that many people in your organization,

even among leadership, might not get a great deal of time with you.

So if all they hear is criticism, they are going to fear the worst.

“They will extrapolate from what I say to a whole range of situations past anything that I intended because if I speak to them one

or two or three times a year, then they may use those one or two

or three sound bites to decide how I feel about them in total — or

that what I chose to talk about was the only thing about their work

that I noticed,” Goldstein says.

To combat that, you have to create systems where people know

they are not thought of merely in terms of the constructive criticism you give them. Beyond thinking about how you phrase

something, take the time to point out to people that they are the

subject of many positive conversations or that you have high

hopes for them. Similar to the way a negative thought may resonate with them for months at a time, knowing you have positive

conversations about them will also dig its way into their brain.

“You have to try to create the conditions where they really will

perceive something as constructive suggestions to improve as well

as making people understand that I probably notice more and am

more aware of what they’re doing than what they think,” Goldstein

says. “So you try to create an environment in which people are OK

to accept commentary and act upon it.”

Once that environment is created, your people will feel better

about talking to you and be able to better internalize constructive

criticism. In turn, that will create those employees you want to go

out and start cascading your vision across your entire organization.”

HOW TO REACH: Royal Caribbean International, (305) 539-6000 or www.royalcaribbean.com