Having taken over as CEO of Associated, Michael Romano began to evaluate ways to set the company apart from the competition. He decided there should be some changes. As a result, the past three years for the company have been the most transformative by far in its history.
But in making a change in direction, Romano encountered some static from the managers who were not sure the change in the company’s business model would be a success.
It was a challenge to shift the way of thinking for many tenured employees from seeing themselves as a “Raymond Forklift Distributor” to being professionals delivering integrated supply chain solutions.
The Associated team, led by the efforts of Romano, had to sell the idea to its own people, and ensure that its people believed in the vision before taking it to the public. Associated has proven to be resilient, taking on this transformation during a time of economic uncertainty, and as a result of all these investments and changes, the company is now recognized as a leader within the industry, setting the standard for quality and solution offerings.
In the last couple of years, Romano has implemented a transparent, well-defined and standardized performance management process for Associated employees. The company’s strategy is to create standards, implement those standards, and reward employees, believing that these efforts will ultimately benefit their customers. The company also prides itself on promoting from within.
In order to meet market demands, Romano believes that each employee must understand, embrace, project and consistently employ practices that effectively convey Associated’s brand promise.
This is achieved by participating in all branding focused educational events, working with marketing to develop programs that will allow the company’s technicians and field service mangers to enhance the perceived value to customers by promoting the brand, and participating in relevant industry-related educational events.
How to reach: Associated, www.associated-solutions.com
At age 30, Bradley J. Dannegger approached the owners of ARCO/Murray National Construction Company and asked to open a Chicago office of the firm. He had already worked at the St. Louis and Florida offices, and the owners recognized that he was a rising star, so they support his plan.
The result was a substantial decrease in pay for Dannegger as well as an increase in risk. But his hard work, perseverance and his top talent has grown the Chicago office into one of the most successful in the ARCO/Murray family.
He continued to grow ARCO through the recent recession by focusing on complicated, niche construction projects with Fortune 2000 companies – for example, clean-rooms and laundry services for hospitals and hotels. The market is large, the construction is complicated, and few competitors are in the market. Staying away from construction that only requires “four walls and a roof” has helped differentiate his company from the competition and drive repeat business.
Dannegger sets high expectations for himself and his team, but he leads with an inclusive style — realizing that less experienced employees need coaching and encouragement. He faced challenges in the first couple of years trying to find the right talent to build his team. Starting in 2005, he focused on hiring the brightest students from the best engineering schools. When interviewing, he began focusing more on a candidate’s potential rather than experience. These new hires came onboard with no bad working habits and an eagerness to learn every aspect of the construction business.
In client relationships, Dannegger has always strived to form a strong partnership. As a design/build firm, ARCO is present at the earliest stages of the project until the building is complete.
Subcontractors and vendor relationships are just as important. Each year, ARCO honors its top 10 vendors in an annual ceremony to celebrate the year and their hard work.
How to reach: ARCO/Murray National Construction Company, www.arcomurray.com
With J.P. Fingado as its CEO, API Healthcare has more than doubled the number of hospitals and staffing agency clients it serves and is regarded as the nation’s leader in healthcare-specific workforce management technology.
Fingado’s ability to drive such success at API Healthcare is because of his capacity to lead the people working with him. In his four years as CEO, the company’s workforce has increased significantly to match its rising sales growth. But regardless of the company’s size, Fingado’s management philosophy has remained the same: building people based on their strengths, not their weaknesses.
The success and record-breaking growth API Healthcare experienced under Fingado’s leadership made the company a threat to their top competitor. As a result, during January 2011, the competitor attempted to buy out API Healthcare.
An unusual thing happened during the negotiations — API’s customers began to protest and tried to block the purchase. Recognizing the distraction to the business and the risk that the buyout presented to API’s ability to serve its customers and take care of its employees, Fingado convinced the board to excuse API from the proposed sale. In so doing, Fingado asked his customers for their ongoing support so that API could continue to achieve the best-in-class strategy and innovation it had experienced to that point, and its customers and employees responded.
Fingado’s vision is to identify and quantify miscellaneous factors that contribute to cost reduction and quality improvement to offer Healthcare providers information vital toward effectively managing their company. In an industry where an estimated 60 percent of operating expenses can be attributed to labor, this is critical. Fingado’s focus is to build solutions that address this, and doing so is possible through the effective recruitment and management of individuals with strengths that complement their talent.
How to reach: API Healthcare, www.apihealthcare.com
Industrial and Distribution
When Paul Jones joined A.O. Smith Corporation in 2004 as COO, the company was operating in a subdued, slow-growing industry and had no primary focus. With his years of experience with companies such as General Electric, Midwest Electric and Greenfield Industries, Jones quickly realized what was needed.
In order to maximize current assets and provide the largest return to the investors, Jones and his team would need to refine the company focus from being just a water heater and electric motors company — the focus would have to be on the area where the company had a comparative advantage and the shareholders would receive a better long-term return.
Jones determined the company needed to do three key things: stop explaining the past and start focusing on achieving in the future, distill the business focus, and prepare the larger water heater business for pending growth issues, which would likely occur once the commercial and residential construction boom receded.
He also took note of the corporate culture — it was a culture set on treating people with dignity and respect. He knew that this would be a great fit, and he has been leading the company by focusing on “keeping our promise” to customers, shareholders and employees.
Upon Jones’ promotion in 2006, Jones said he was announcing his retirement as CEO of A.O. Smith. As the shareholders looked at him in astonishment, he finished by saying “which will be in 2014.” He promised by then the company will have achieved $5 a share in earnings, $100 per share stock price, and have 10 analysts covering the stock.
He was met with skepticism and was told that he would never reach those goals. But in 2012, with split adjusted shares, he met all of those goals. The growth was largely driven by his moves to obtain a strategic position in the replacement market and focus on growing markets such as China.
How to reach: A.O. Smith Corporation, www.aosmith.com
When Daniel Adamany founded the technology solution value-added reseller AHEAD, LLC in 2007, he knew he had to have a competitive advantage over the competition.
One major strategy was to remain vigilant in identifying the customer’s industry-specific technology needs. To do so, Adamany, CEO of the company, put into effect the Think, Look, Plan, Move strategy — for customers and employees alike.
AHEAD wants its employees to think about their position in the company, look ahead at where they might want to move in the company, plan a strategy to achieve that goal, then move forward and execute that strategy. This philosophy has helped the unique culture at AHEAD to attract and retain highly talented individuals, including former employees of competitors.
For customers, the strategy urges them to think about what their technology needs will be, to look ahead to the future of their industry and future needs, develop a clear vision and plan of action to meet the needs identified in the first two steps, then move ahead and execute the plan in order to succeed.
This framework has been very successful for both AHEAD and its customers, which praise the company for its innovative, and applicable and reliable services.
Adamany continuously looks to improve AHEAD’s offerings and its ability to sell those offerings. In the ever-changing technology environment, AHEAD maintains its competitive advantage by offering package solutions to customers and remaining up to date on technology.
The company’s highly talented workforce is constantly researching new technology solutions developed by other companies as well as investigating the feasibility of developing its own products.
Adamany has been able to attract and retain talented individuals when he started AHEAD by using his own capital to pay employees until the company was profitable enough to handle payroll. It is actions like these that show Adamany’s ambition, passion and dedication.
How to reach: AHEAD, LLC, www.thinkahead.com
Industrial and Distribution
Warren Young decided one day at age 50 to pursue an entrepreneurial path. His career had been full of diverse professional experiences. Over the years, he had learned that he was passionate about fixing problems and building businesses. He set off to look for a company to purchase and grow — and Acme Industries, Inc. came into view.
When Young purchased Acme from the founders of the company, he made the tough decision to remove members of management who did not share his vision. He did not stand for management members satisfied with the status quo and stagnant growth.
Rather, he believed in empowering and supporting his workforce and allowed for flexibility, which promotes innovation and loyalty.
Young leads his employees with the simple message, “You can do it.” He has faith and trust in his employees and in return, they respect and go the extra mile for Acme.
Without being overbearing, Young is a hands-on manager. He can describe each manufacturing process down to the smallest detail, and remains involved in warehouse operations and back-office support. He encourages his employees to learn from their mistakes and to accept failure as a possible outcome.
When Young purchased Acme, the company had two customers that accounted for 93 percent of its sales. He started to seek new customers to immediately diversify the sales portfolio, decrease risk and grow the business.
Within five years, he had developed relationships with additional clients and the 93 percent figure dropped to 66 percent. But after considering how they aligned with his direction, Young separated from the two large customers because they only valued low cost. He brought on an entire sales force to bring in new customers that aligned with Acme’s business model, a move that increased sales and margin.
How to reach: Acme Industries, Inc., www.acmeind.com
Michael Golden and Thaddeus Wong were top producers at a small brokerage firm when they took a leap of faith and founded their own company, the real estate firm @properties, after being dissatisfied with the service and support they received from their sponsoring broker.
The new company first started selling new construction, but expanded into existing home sales within the first few years. Over the next 12 years, Golden and Wong lead the four-person enterprise to become the largest real estate brokerage firm in Chicago and one of the 35 largest in the country — with much of the growth occurring during the recent housing market crisis.
The pair took a big financial risk to start @properties, being owed $1.5 million in commissions, which never were paid, by the previous firm. Foregoing a salary at first, Golden and Wong kept a tight budget and reinvested back into @properties. Their first payday finally came after two years when their initial client transitioned to, and completed, a high-rise development.
With that success in hand, and a strategy to expand despite the market crisis, Golden and Wong over the last five years has opened six new offices and more than doubled the number of Realtors from December 2006 to today.
The adoption of a conservative mentality through the expansion of the business has been a key factor to the company’s success. For instance, while many other real estate brokerage firms have extravagant offices, @properties has much simpler facilities. The company has invested the monies that could have been used for a more lavish office into employee resources.
Golden and Wong have studied opportunities for expansion, but want to grow strategically. They have and will continue to consider acquisitions but do not see an immediate need to acquire other firms, especially when they have been consistently drawing agents from other firms to work for @properties.
How to reach: @properties, www.atproperties.com
“A ship in port is safe, but that’s not what ships were built for,” is a quote that hangs in Brig Sorber’s office at Two Men and a Truck in Lansing, Mich. Sorber uses that quote to define the new direction in which his company has been moving.
“I love that quote because this ship, Two Men and a Truck, has been in port for too long,” says Sorber, CEO. “We’ve got to get this into deep blue water. There are a lot of challenges out there and a lot more risk, but that’s where business is done. We need to start moving forward and accept the challenges.”
Sorber and his brother, Jon, started Two Men and a Truck International Inc., a moving company, in the early ’80s as a way to earn money using their ’67 Ford pickup. Today, the business has x4,500 employees, more than x1,400 trucks, more than x200 franchises in x34 states, Canada, the U.K. and Ireland, and 2012 revenue of x$361 million.
“We did it to make beer and book money for college,” Sorber says. “We really never thought that it would get to this point.”
However, in getting to this point, the company had neglected to make necessary changes in order to keep the operation aligned and running well.
“One of the challenges we have had is going from a mom-and-pop-type business to having to grow up and become more corporate,” Sorber says. “We needed to bring in newer and stronger skill sets.”
Here’s how Sorber has helped Two Men and a Truck grow up.
Two Men and a Truck incorporated its first business in Lansing, Mich., in 1985 and began franchising in 1989. The company at this time was run by Sorber’s mom since he and his brother were in college.
Upon graduation, Sorber worked as an insurance agent and also operated his own Two Men and a Truck franchise. He returned to the company in the mid-’90s, became its president in 2007 and CEO, the title he carries today, in 2009. In that time the company had grown significantly, but it wasn’t running as well as it could be. Starting in 2007, Sorber’s job was to help restructure the business.
“We had to take a look at ourselves internally,” Sorber says. “There came a time that I just knew things were broken here.”
Because the company was growing so fast there was no organization chart. It was very loose on who reported to whom. It wasn’t that people weren’t working hard, but things were not getting measured.
“I had an epiphany that something had to change big time,” he says. “I made up something that resembled an org chart on a big piece of paper in my office. I brought in five people that I greatly trusted and had confidence in and gave them three markers — green, which meant that person or that job was important; yellow, which meant I didn’t have an opinion either way about this person or about this job; and red, which meant that this job makes no sense.”
Sorber used that as a starting point to help him identify where the company could restructure and cut costs.
“I wanted to give big bonuses to everyone at the end of the year and share the winnings, but we had to prime the pump first,” he says. “We went from 78 employees down to 51 employees after I went through that chart.
“That wasn’t because we were losing money. It was because by the time we realigned everything, there were some people here who weren’t doing anything.”
To avoid issues such as this, you have to have metrics that you measure to make sure whether you’re doing well or not.
“My metrics are No. 1, customer satisfaction,” Sorber says. “Find out how every one of your customers feels about their service. No. 2 is trucks and driveways. We want to put more trucks in more driveways every year.
“No. 3 is franchisees. Make sure your franchisees are profitable and have the tools to grow. No. 4 is giving back to the community.”
Metrics are a crucial aspect of success, but so is a mission statement that helps employees and customers know what the business is about. It also makes your decisions as a CEO simple.
“If your mission statement is strong, it should be limitless,” he says. “For us, we had our mission statement when we had 25 franchises, and now we’re well over 200 and it still applies. You also need core values that comprise what’s important to your company. Once you have those, you have to stay within the confines of your core values.
“When I was a younger executive I thought that was stuff you say to be nice. It’s something that’s serious. You can’t go into work and keep turning the wheel and expect better things to happen. You’ve got to maintain your mission statement, core values, measure what you’re doing, and then you have to look for ways to make things better.”
Bring in key people
As Two Men and a Truck went through these necessary changes, new employees and executives had to be brought in to give the company the right skill sets to continue growing.
“Sometimes we hold onto our executives too long, and we get comfortable with them,” Sorber says. “They may not question what you’re doing. Not all of them, but many of them can be fine with the status quo and as the world is changing they’re not forcing you as a CEO to question what you’re doing.”
You can’t settle for the people who are in your key positions. You need to find people with the right skill sets and make sure they stay within your mission statement and core values.
“Bringing in new individuals is kind of like working on an old house,” he says. “You think if you put new windows on the house it’s good, but then the siding looks really bad. The same thing happens in business when you get somebody that’s great in a department. You start to think, ‘What if I had someone like that in marketing?’”
Sorber brought in executives to fill his company’s voids, and they began offering all kinds of new ideas for the business.
“When I started bringing in these key executives, they wore my carpet out because they have fresh eyes for the business,” he says. “They asked why we did this or that. Many of the things we were doing were the right things, but it’s good for you to make your point about why you do it.
“The new executives will say, ‘That makes sense’ or ‘That’s different.’ Other times they’ll say, ‘OK, but did you ever think about doing this?’”
That is how your business goes through an evolution, and it starts bringing in more modern thinking and different approaches. A business will have a life cycle of only so long, and you need to continually reinvent it because your customer is changing. If you bring in new people they may bring the great ideas you need.
“It’s really important as a president or CEO to hire people who are smarter than you in their specific fields,” Sorber says. “Our job as president or CEO is to look more strategically at where we want the business, make sure the executives play nice together, ensure there’s harmony in the business and keep an eye on those important metrics.”
During the course of the past six years, Sorber has been able to successfully do all those things within Two Men and a Truck. Randy Shacka became the company’s first non-family member to serve as president in 2012. Now, Sorber and Shacka are looking at the future outlook of the business.
“We think we will be a $1 billion company by the year 2020,” he says. “In the last few years we’ve been doing a lot of internal work on fixing where we are broken and getting the right people in here. Now we want to be more than just a moving company. We want to be a company for change.”
How to reach: Two Men and a Truck, (800) 345-1070 or www.twomenandatruck.com
Many executives do not view the content they distribute as intertwined with their organization’s unique product or service. However, the two are interchangeable. Your product or service has differentiators that cause your clients to select you instead of the competition. Those same factors apply in content marketing.
If your goal is to engage prospects and ultimately lead them to conversion, you must create content that keeps them engaged. Success comes from creating consumable pieces of content that together form a singular thought leadership message and distributing those pieces across multiple channels. You never know through what channel someone will engage with your brand (or branded content), so the message needs to be consistent.
There are a few simple rules to doing this. Your content and what you’re selling should meet four criteria. It must be:
Useful means the content, as well as your product or service, has a defined use for a target audience. It addresses:
- How do I use this?
- How does this help me?
- What problem does this solve for me?
Here’s an example: According to a recent IDC Research report, 49 percent of the entire U.S. population currently uses a smartphone. By 2017, that number is expected to reach 68 percent. That means that within four years, more than two out of every three Americans — regardless of age — will be connected via smartphone. Therefore, a useful product a company might offer could be a solar-operated phone charger. And useful content to distribute to a target audience may include “How to make your daily life easier with these top five iPhone apps.”
To be Relevant, the product, service or content must be new and interesting, and mean something to the market or industry. Your audience will ask:
- What does this mean to me?
- Do I need this?
Let’s say your organization provides a website portal that connects insurance companies. New and interesting content that means something might be, “How your health care plan will be affected by reform . . . and what you can do to prepare for it.”
In a world filled with noise, you must demonstrate how what you do is Differentiated from competitors and explain:
- How does your content, product and service compare to the competition?
- Is it unique?
Let’s go back to the smartphone example. If you sell or service iPhones and Android-platform models, think about creating engaging content that examines the needs of today’s smartphone user, and then go beyond the basic functionality.
It’s also imperative to understand your target audience and the target audience for each product. Android-based smartphones are primarily aimed at businesspeople. iPhones, for all their bells and whistles, are not. This differentiation has led to a lot of confusion in the marketplace when consumers compare one against the other. Understanding this allows smart marketers to create engaging content such as “The top 10 needs of businesspeople: A comparison of Android phones vs. iPhones.”
Finally, your product, service and content must be Available and easily obtained in any channel.
If you run a benefits company that works with employers, for example, health care reform provides a timely opportunity to help clients make sense of the landscape. This might entail delivering a variety of consumable content that’s available to them 24 hours a day, seven days a week, through any channel.
This could include a video that explains the difference in options available to employers. It could be a social media campaign that outlines the top five differences between the health care insurance exchanges and employer-sponsored health care. Or, it may be a series of print mailers or webinars, or even a dedicated microsite that’s filled with content that details what employers need to know.
When your goal is creating engaging content, your ability to consider — and address — each of these factors may be what’s required to transform engagement into measurable conversion.
This is no fish story. Instead, this column is about one of the most important roles an owner or CEO must fulfill on an ongoing basis.
Leaders spend an inordinate amount of time dealing with the issues du jour. These range from managing people, wooing and cajoling customers, creating strategies, searching for elusive answers and just about everything in between. These are all good and necessary tasks and undertakings. Too frequently, however, these same leaders delegate this effort to others or ignore it altogether. To be “in the game,” you have to know when to fish or cut bait.
Successful fishermen know that to catch a fish they have to sometimes cast their lines dozens of times just to get a nibble or bite. The first bite might not result in reeling in that big fish. Frequently, a nibble is just a tipoff as to where the fish are swimming.
The same applies to reaching out — casting a line, if you will, to explore new, many times unorthodox, opportunities for your organization. These opportunities can be finding a competitor to buy, discovering an unlikely yet complementary business to partner with or snagging a new customer from an industry that had heretofore gone undiscovered.
All of this takes setting a portion of your time to investigate unique situations, as well as a healthy dose of creativity and the ability to think well beyond the most obvious.
Too many times even the most accomplished executives lack the motivation to look for ideas in unlikely places. Some would believe that it’s unproductive to spend a significant amount of time on untested “what ifs.” Just like sage fishermen, executives can also cultivate their own places to troll.
Of course, networking is a good starting point, particularly with people unrelated to your business, where sometimes one may fortuitously stumble onto a new idea that leads to a payoff.
Other times, a hot lead might come from simply reading trade papers, general media reports and just surfing the Internet. The creative twist is reading material that doesn’t necessarily apply to your own industry or to anything even close to what you do. New ideas come disguised in many forms and are frequently hidden in a variety of nooks and crannies. This means training yourself to read between the lines.
Once something piques your imagination, the next step is to follow through and call the other company or send an inquiry by email to state that it might be worth a short conversation to explore potential mutually beneficial arrangements. This can at times be a bit frustrating and futile. That's when you cut bait and start anew.
However, reaching out to someone today could materialize into something of substance tomorrow. The often skipped but critical next step, even after hitting a seemingly dead end, is to always close the loop with whomever you made contact. Even if there is no apparent fit or interest at the moment, it’s easy and polite to send a short note of thanks and attach your one-paragraph “elevator” pitch.
That same person just might be casting him or herself, be it in a month or even a year later, and make contact with a different organization that’s not a fit for him or her, but recall you because you followed through and created awareness about your story.
This just might lead the person with whom you first spoke to call you because you had had the courtesy to send that note. Bingo — you just got a bite all because of continuing to cast your line.
Good CEOs and honest fishermen also have one other important characteristic in common: humility. They know that when a line is cast it won’t result in a catch every time. But if nothing is ventured, it’s guaranteed there will be nothing gained. Don’t let that big one get away. Just keep casting.