The New Year is going to be fast, furious and painful for companies that blink. Why? The key components are finally lining up to create the infrastructure for making a top-to-bottom transformation of our business world.
“The emerging megatrend for businesses to meet global competition is to become far more agile and much faster to drive more value to their customers,” says Bill Russell, executive vice president of Allegient. “To accomplish this, companies will have to tie their business goals, as they relate to serving customers, all the way through the enterprise.”
Smart Business spoke to Russell about how to tap the solutions, the processes, the people and the technologies that are emerging to support this new era of speed and agility.
How will business solutions impact the emerging megatrend?
We’re going to see a wave of new solutions this year. They’ll be customer-centric and aimed at generating new revenue or solving a problem or need. It’s not going to be about saving money or cutting costs. You can’t shrink your way to prosperity. It’s going to be around innovation with a huge emphasis on fast delivery and driving more value to customers. A second mega-area of solutions is going to orient around business process efficiency. That efficiency is going to come from a business being able to tell itself how its processes are operating (i.e. process intelligence) and changing them for optimization.
Finally, a whole host of solutions are going to focus around making knowledge workers more effective or productive in collaborating on solutions, including how to be more creative and how to provide faster answers to business opportunities.
How are processes changing to support this?
Certainly, faster collaborative solutions development is going to occur. We’re going to see new techniques, with more new agile methods and new smaller-scale proof of concepts and prototypes, and types of initiatives that will drive business value faster into the end-user set. Frankly, to manage all of that, we’re going to see big trends around portfolio management, different types of initiatives and how to manage those initiatives, in terms of ensuring that you are executing the highest priority, the greatest speed and the most value.
Will we have to change the way we work?
In this area, the major trend picking up speed is tightening the collaboration between the business and IT sides through new roles to support the more agile processes. You can almost predict the beginning of the disappearance of the separation between business and IT. People have always talked about the business and IT areas within their organization, but really, there is no reason for that. We should be talking about business needs and business solutions that happen to have a set of roles some from the business side and some from the technical side. Some of the emerging roles will include process engineers, account managers, business integrators, information architects and composite solution architects.
What is being demanded from technology?
Remember, we’re talking about a complete transformation of how we’ve been doing business. First, we’re clearly going to see the examination of ‘software as a service’ or SaaS. The reason for that is because of the lower risk and the speed of deployment in order to get the business value. Business process modeling and management technologies will take a big push forward this year. We’re watching the beginning of a movement toward social software, similar to MySpace, Facebook and Second Life, but for business. The buzzword emerging around this is ‘folk-sonomies,’ which are built on much more virtual, community-based technology platforms to support this more agile, faster and collaborative environment we’re discussing. Portals and collaboration software also are sure to see much greater deployment and emphasis this year. Finally, the services-oriented architecture/composite application technologies will be taking a lot more traction in 2008 because they support mash-ups, which are going to be hot.
What are mash-ups?
Mash-ups bring different information from different sources together and create something new for the value of a customer, executive or knowledge worker. For example, when you Google an address and get a map, you also get other data coming from street addresses and related information. It all gets mashed up before you see it to give you a richer consumer experience. In a business context, I might take data from a manufacturing system about what product has been produced, marry it to the customer data from my customer relationship system, and then I might want to look at my warranty database to see if there were any problems with the product. All of that is mashed up before I see it and before I go in to visit my customer. It’s going to include a portal presentation layer that allows me to request that mash-up in a really snazzy user interface.
BILL RUSSELL is executive vice president of Allegient in Indianapolis. Reach him at firstname.lastname@example.org or (317) 564-5701.
Born: Franklin, Ind.
Education: Bachelor’s degree, economics and business, Franklin College; master’s degree, business, Indiana Central University (now known as the University of Indianapolis)
What is the biggest business lesson you have learned?
It’s been said many times, but it’s a fact: There is no company or no employees without our customers. It is paramount to understand your customers and bring them value. Not just sell them a product but bring them a total gambit of value of all the different things they need. I learn that every day. That wasn’t just something over time. I learn something new every day about what our customers need from us. They are all different. That doesn’t stop.
What was your first job?
When I was about 10 years old, I was mowing a lot of lawns. My dad and I did that together. It made me interested in business. I still remember putting on a little chalk-board at home when I would buy a gallon of gas and have to buy some oil and trying to keep track of whether I was making money or losing money and doing some profit and losses on a very small scale. I was intrigued by business.
Whom do you most admire in business?
My former boss, Robert Britton, who is the past president of Knauf Insulation. He had a tremendous calming ability to evaluate situations, to not panic, but to evaluate the situations clearly and make good, strong decisions based on the facts. That’s obviously very important to be able to do when you’re in some of these positions.
If you’re an entrepreneur and you aren’t willing to invest your heart and soul in making your business a success, the chances are pretty good that you will fail, says Richard Miller.
“All you’ve got to do is work 100 hours a week and stuff happens,” says Miller, founder, president and CEO of Fineline Printing Group. “There has to be a reason why one goes into their own business. You’re going to pay a price.”
The key is to find that reason within the person and use it as hir or her driving force to make the company a success. For Miller, the key was the image of him and his father both of whom had emigrated from Argentina standing together in New York with only $100 between them.
By holding on to his dream, no matter what, Miller has led his 72-employee printing company to 2006 revenue of nearly $11 million.
Smart Business spoke with Miller about how to earn respect by getting to know your employees.
Q: How do you earn employee loyalty?
If they like you and respect you, you’re going to win. You earn it by doing social things with them, things that are not really expected. Having random chili cook-offs like we have here.
Last week, we had a back masseuse come in. Work with the people and talk to them from the bottom up, rather than from the top down. I ride with our truck driver, and it seems like that is unusual. You get to know them personally, you get to know their family, and you get to know about them and their dreams and aspirations and thoughts about the future.
It allows you a moment that it is strictly about them. It has a tendency to create a tad of passion. They look up to you, and because they know you, because they shared their life with you, they have more of a tendency to be more engaged in your business and want to be here.
I like serving the people, not just our customers but our employees. Serving is as simple as when we have a picnic for 150 people; I do the cooking. That’s one manner of serving. If there is trash to be taken out, I’ll take it out. If your car doesn’t start, you can take mine. What can I do for you? Be very accessible.
Don’t be afraid to come over and talk to me.
When a new person comes in and goes through orientation, the staff itself starts complimenting how you manage and what you do. By the time I found out about them, a lot of the homework has been done for me. In a sense, if you set it up, it just grows.
Q: How do you find the right people?
We go to a battery of tests for assessment on IQ and adaptability for positions. We are always looking; we all look for people all the time and keep a bank. As a position remotely close to our need comes open, we contact those people first.
It’s networking, just keeping our eyes peeled. If present employees are happy, they are the ones who suggest a former coworker or someone that touched their life somehow that it’s worth for us to talk to.
Q: How do you identify leaders?
They can quickly come in and tell you what they would do if it was them, if they had the opportunity. I’m one of those that will let you try it and not hope that you fail but hope that you make it. People that are not afraid to try and not afraid to fail.
It’s your department understand it and bring to the plate how to make it better. You’re the knowledgeable individual in your department. We will listen and add to it and help you talk it out and spread it out to your staff.
Let them bring ideas to the table, implement them, and bring the next idea and stay out of their way. I want them to know that we do value everybody’s ideas.
I want them to understand and ask, ‘How hierarchal are we? Do we promote cross-functional development? Does our climate promote open and honest communication? What are our strategies? How are we performing? What makes us money? What costs us money?’
Q: How do you deal with mistakes?
I forgive, forget and go on. Don’t dwell on it. Make it right; move on. Somebody stiffs you for money forgive, forget and move on. You can’t let it fester. It doesn’t create an example of anything.
We do have a system where people write a corrective action form. Where did the mistake come from? How can we avoid it in the future?
We catalog those and get together and implement another checkpoint for it. We see in the system where the failure occurred and address it at that location.
HOW TO REACH: Fineline Printing Group, (317) 872-4490 or www.finelink.com
Charlie Smith saw the fear in the eyes of his employees. It was October 2003, less than a year since he took over as president and CEO at Countrymark Cooperative LLP, and the company was facing an uncertain future.
A new piece of equipment needed to be built at the company’s refinery in Mount Vernon or the plant would have to be shut down, and there was growing concern about a pipeline that might require significant funds to repair.
Employees had been forced to give up quite a bit prior to Smith’s arrival and these two costly projects certainly weren’t going to help the oil refining and marketing company’s financial situation.
“We were so close to bankruptcy for a number of years that I think people stopped having a dream of the future,” Smith says. “It’s like walking through the woods. If you are constantly looking at your feet because you’re afraid you’re going to trip over something, you’ve taken your eye off where you are trying to go. You’re not really going to get anywhere. I said, ‘You know, if we’re going to fail, we might as well fail at 500 miles per hour rather than go with a whimper.’”
With that idea in mind, Smith set out to develop a culture that would encourage employees to use their imagination and seek out new opportunities to move the 345-employee company forward.
“You have to articulate a positive vision of the future,” Smith says. “We were kind of sleepy. The cultural change was to create an environment where people felt empowered to dream big dreams and believe they could make a difference in the company’s future.”
Empower your people
Smith knew he needed to inject an upbeat attitude into the organization to turn CountryMark around. It’s up to the CEO to get employees to believe that he or she has a solution to any challenge.
“There’s no point in dumping on the employees about all the bad news if there is nothing they can do about it,” Smith says. “So you just stay positive. You have to. Leaders have to believe there is a way out.”
Smith recalled one of his first meetings when he faced a number of employee questions about where the company was headed.
“I said to them after about three or four questions, ‘Look guys, things are going to be fine,’” Smith says. “Did I know that? No. But I told them, ‘Things are going to be fine. We’re going to make this. We’re going to make this because we’re going to work hard, and we’re going to find ways to improve, and we’re going to make good decisions.’”
Smith decided one of the best ways to get CountryMark employees feeling good again was to get them directly involved in the solution. He began with the pipeline project.
“Rather than spending a bunch of time overengineering it with outside people, we said, ‘Look, we’re going to get a team of pipe fitters and welders, and we’re going to create a team,’” Smith says. “They’ve got a year to do it. Just tell them, ‘This is your budget, this is what you have to do. Now go make it happen.’ They owned that. That was their thing.”
By engaging people from within the company who possessed the skill sets he needed, Smith was able to get the pipeline problem solved and give employees a needed morale boost.
“They embraced that task like they were working on their own house, and they went off and made it happen,” Smith says.
Often, employees are willing to do a lot more than you think to help their company get out of trouble. Sometimes, they just need to be asked.
One of the worst things a CEO can do in a crisis situation is to surround himself with people who agree with everything he says and does.
“If you get differing opinions, not hostile opinions but differing opinions, then the debate begins. Through that debate, I believe the right answer tends to emerge,” Smith says.
When he made the decision to reallocate some of CountryMark’s capital funds to improve the efficiency of refinery operations, some employees felt they were being shortchanged.
“We took some capital, and we reallocated it away from some operations into others,” Smith says. “Some of the operations where it came from, some of those people weren’t really happy.
“We need to be a team that can professionally accommodate dissension and work through conflict. That, I believe, is how we make the right decisions. If anybody thinks they have got a monopoly on good ideas and the right answers, they are probably one step away from failure.”
Through clear communication about the reason for the funds reallocation, Smith was able to get everyone on board with the plan and take another step in bringing CountryMark back. Of course, the winning idea in a recovery plan does not always have to come from the CEO.
“I know that we’ve done things that some of my staff has probably thought, ‘Why are we doing this?’” Smith says. “You explain your logic, you explain why, and you let them voice their opposition and you sincerely consider that. I’ve been around enough smart people to know I’m not one of them. I could easily have missed something.”
Smith says a leader can be solidly committed to a plan and still have questions.
“In the back of my mind, I’m always questioning the plan,” Smith says. “Have we got it right? What if this happens? What if that happens? How might we react? How do we keep our options open? And at times, that can drive people nuts when you change your mind.”
The idea is to build consensus and get everyone pulling in the same direction.
“I’m willing to let people that work for me make decisions that I would disagree with because it’s their job to make those decisions,” Smith says. “It kind of works both ways. Through that interaction, there’s enough respect and enough confidence that people are going to try to make the right decisions.”
Show them you care
One day, early in his tenure at CountryMark, Smith showed up for a meeting at the refinery wearing blue jeans and a hunting jacket.
“Somebody came up to me after the meeting and they said, ‘Are you sure you’re the CEO?’ I said, ‘Yeah, why?’ And he goes, ‘Well, you don’t really act like one, and you don’t look like one.’ I said, ‘Well, I could have worn a suit, but would that have made you feel any better?’” Smith says. “You walk that line about being a leader that’s in control and that’s confident about the future, and yet never takes themselves too seriously.”
Employees need a reason to believe in what their CEO is telling them, especially in cases where a company has struggled. By dressing down, Smith was sending the message that he was accessible and a member of the team.
If you want employees to really buy in to your plans, you also have to show them that you care about their lives outside the workplace and that you’re not just a boss looking at a bunch of numbers.
Smith says it’s an easy mistake to conclude that a leader has to be charismatic to be successful. What’s more important is that a CEO finds a style that is comfortable for the individual. The key is to find a way to engage employees in discussions that are both open and honest.
“You tell them what’s going on with the industry, and you tell them what’s going on with the company, and you tell them what the good news is, and you give them some insight into the challenges and what we’re doing about it,” Smith says.
He gets this information out via an annual formal presentation about the company and also gives out his direct phone number so that any employee can call him.
“I’ve been to dinner with employees to hear them talk about the things they are frustrated with,” Smith says. “Some bosses have lunch with people, and they script them, and people are picked based upon people that aren’t going to ask difficult questions. They might as well ask, even if I don’t know the answer.”
Through continuously working the lines of communication with employees, Smith started to see employees buy in to his plan to turn CountryMark around. Each success the company demonstrated got them to buy in a little more until everyone was working toward the same goals.
Monitor your progress
As CountyMark’s fortunes began to turn and profits began to grow, Smith faced pressure to dole out big raises and throw a big party. Instead of simply breathing a sigh of relief and reveling about the black ink, Smith wanted to know why his company was faring better.
“We say, ‘OK, how did we do versus our plan, and how much of that was because of what the market gave to us, and how much of that was stuff we did ourselves?’” Smith says. “Sometimes organizations make the right decisions and do all the right things and the marketplace doesn’t allow them to make much money. Other times, the marketplace can allow them to make a lot of money and they make all kinds of mistakes.”
Smith says it comes down to looking beyond the numbers. “When something goes one way and you ask why it happened, and they say, ‘I don’t know,’ the ‘I don’t know’ answer scares me,” Smith says. “You say, ‘OK, how do we figure it out?’... It’s wondering why did we achieve what we achieved, what were the root causes, and what were the wins and losses that management had control over?”
When the analysis reveals that the company is on the upswing, it’s easy for you to want to open up the checkbook and give everyone a big raise for sticking with the organization through the challenges.
Smith says he could have done that as the numbers began to turn at CountryMark. Sales have grown from $346 million the year before he arrived to nearly $1 billion in 2007.
“If we were always going to enjoy this level of profitability, we’d be happy to give you this kind of raise,” Smith says. “But I worry about when it’s going to go away. So if I give you a smaller raise, but a lump sum, the lump sum isn’t buried in our cost structure forever.”
Smith says he overheard many employees saying that they had received a bonus.
“No, you didn’t get a bonus,” Smith says. “This is part of the salary administration. ... It gives you something to do something with. It’s allowed us to not have our ongoing costs increase as much as they might have otherwise.”
The plan falls in line with Smith’s effort to always keep an eye on the future of the company and the people who work for him.
“We talk about wanting people that desire to be a servant or leave a legacy,” Smith says. “Leaving a legacy is not, ‘I want a statue of me when I’m gone.’ Leaving a legacy is, ‘I’m really here for the long-term betterment of the organization, not for my own personal gratification.’ We’re trying to preserve something of value for the next generation of employees and management. It’s sort of a moral obligation. ... As long as you articulate that, I think people follow.”
HOW TO REACH: Countrymark Cooperative LLP, (800) 808-3170 or www.countrymark.com
You invest in the proper insurance protection for your business assets and liabilities. But have you considered your potential risk from the work completed by subcontractors and vendors? If these parties don’t have insurance, you could end up paying dearly for their mistakes.
“It is important that business owners know that the people doing work for them or providing products and services have insurance,” says Bob Wood, manager of the Underwriting Practices Group at Westfield Insurance. “If an uninsured contractor causes injuries or damages during a project, the owner might have liability for the contractor’s actions. This responsibility comes from the fact that the work was done for the benefit of and on behalf of the owner.”
You clearly want to reduce the risk of having your insurance company pay for the actions of other businesses that work with you. Spending a little time investigating contractors’ insurance status before you sign a deal can save you from spending a great deal of time and money after an incident.
Smart Business spoke with Wood about certificates of insurance and their role in business owner risk management practices.
What are certificates of insurance?
Certificates of insurance are documents that insured businesses can obtain to give evidence that they have insurance coverage. These certificates include information about the effective dates of the policy, the limits of liability, the insurance company providing the coverage and the certificate holder, or the entity requesting the certificate. These certificates are different than the policies that insured businesses have as a guarantee of their coverage. Businesses don’t use certificates to negotiate benefits with their insurance provider; instead they have them as a way to show other parties, like hiring companies, that they have the appropriate coverage. If the certificate of insurance and the actual policy contain different provisions, the insurance coverage will follow the specifications outlined in the actual policy.
What are potential consequences when business owners don’t collect the certificates?
As noted before, if an accident occurs and the subcontractors or vendors do not have insurance, the business owner could end up incurring the liability. This would mean additional expense for the company and potential increase in its premiums. This situation can be avoided if businesses require that the people working for them prove that they have insurance coverage.
Even if entities working for a company do have insurance coverage, not collecting certificates of insurance could still cost a business owner. When hiring companies choose not to keep records of these certificates, they are not following good risk management practices. When their insurance company audits their policy, it might charge additional premiums for the increased potential loss exposure incurred by not verifying proof of insurance. Not having a certificate of insurance doesn’t invalidate any insurance that contractors or subcontractors might carry, but it does show that business owners are exposing themselves to preventable additional risk.
How can companies obtain certificates of insurance?
Business owners can easily obtain certificates of insurance by requesting them from the subcontractors or vendors that want to work with them. These entities can, in turn, access the documentation from the insurance carrier that provides their coverage. Hiring companies should insist that they receive the certificates promptly so they can review them prior to authorizing the contractor or subcontractor to start work. Once businesses have allowed third parties to start work on a project, the contractors have less of an incentive to follow through with the documentation. Also, if uninsured businesses even begin work on a project, business owners have opened themselves up to unnecessary liability. Business owners need to use reasonable care in reviewing the certificates, but generally, they don’t need to validate the certificates of insurance.
What else should owners know?
If a contractor will perform a significant amount of work for an owner, the hiring firm should secure additional protection. Business owners should discuss contractor, subcontractor and vendor insurance requirements with their attorney prior to signing substantial contracts. The attorney can provide advice regarding limits of insurance and other terms and conditions.
One of the common recommendations for owners entering large deals with contractors is that owners should ask to be added as an additional insured on the contractor’s policy. This goes one step beyond the risk reduction provided by simply collecting a certificate of insurance. This distinction assures that the policy of the party most in control of the losses applies first. This protects hiring parties by preserving their own insurance limits and reducing their risk of loss. The certificate of insurance should outline the owner’s additional insured status.
BOB WOOD is manager of the Underwriting Practices Group at Westfield Insurance. Reach him at email@example.com or (330) 887-6883. In business for more than 158 years, Westfield Insurance provides commercial and personal insurance services to customers in 17 states. For more information, visit www.westfieldinsurance.com.
E-mail is great for a lot of things, but Bob Huffstodt says it can’t replace a personal conversation when he’s assessing new opportunities for Polymer Technology Systems Inc.
“If it’s a new customer, and I don’t care where they are in the world, you need to have a conversation with that person,” says Huffstodt, Polymer Technology’s president and CEO. “Nothing beats being able to read an individual, best of all face to face. If you can’t do that, at least have a conversation over the phone. That gives you the key element of any risk assessment.”
By getting to know his clients and his employees, Huffstodt led the cardiovascular technology company to 2006 revenue of about $15 million. With 105 employees, the company has been growing at an annual rate of about 60 percent in recent years.
Smart Business spoke with Huffstodt about the importance of focusing on relationships to succeed in business.
Q: How do you manage fast growth?
It pays to step back and look at the forest once a day or twice a day and remember the big picture. Remember where you are going, and understand whatever the issue of the day is, it will pass. It will be resolved, and it will be a dim memory very quickly, and that puts it into perspective.
I go back to what I was taught as a freshman in college. That little grid of urgent and important, important but not urgent, urgent but not important, and literally do a quick mental rundown of the things that are on my daily to-do list. I do a to-do list every day and go at the ones that rise up to the upper left first, the urgent and important, and take it from there.
I have a notepad, and I do it in long hand. I’ve tried it on the computer and don’t like it as much. It’s just more stimulating for me to write it out. I try to do it at the end of a day for the next day. It lets me sleep better. I know it’s on my list so I know I’ll get to it, so therefore, I don’t have to obsess on it at night.
Q: How do you deal with unexpected problems?
I take a mental deep breath and force myself to be level-headed and calm with whatever the issue might be. If they are urgent enough to break into your routine or meeting, there is something big about it in terms of magnitude.
Even if it’s a good thing and you’re going to end up getting very excited about it, it’s best to learn about it in a very calm fashion.
Q: How do you connect with your employees?
If I’m going from my office to the front desk to greet somebody, I might take the longer way there and field a couple questions along the way. It’s absolutely essential.
I’ve had people approach me about, ‘Gee, we have all these extra chairs. Could we donate them to the church?’ Just the way you encounter these things, you can make somebody on the staff a hero just by having 10 seconds of availability. It’s huge in its cumulative effect.
Over time, the rapport that builds, the understanding, and the respect which goes both ways I think it’s critical.
Q: How can you earn employee trust?
It starts with just making sure people are treated fairly. If people come in and they are not promised the moon unless you are prepared to hand the moon to them, I think that just builds trust and credibility.
Don’t tell them that you’re not going to have to work hard. They are going to have to work hard. Don’t tell them that the benefits aren’t going to cost you anything because the benefits do cost everybody something.
Just set the expectations appropriately. Follow through on what you promise, and you’ll get that credibility.
Q: What is the best advice you’ve ever received?
When you are rating your employees, if you can’t, after six months, on a report card give them at least a B, you should think about replacing that individual. That sounds kind of harsh.
But what it forces you to do is look in the mirror and say, ‘Am I enabling this person? Am I empowering them correctly? Am I guiding them correctly? Am I interfacing with them the way I should?’ If you can say yes to all that, you need to really think about changing who is in that job if you can’t give them a B or better.
Oftentimes, I’ll find the fault is with me. I haven’t talked to this person all week, and they report to me. That’s just not right. So, I’ll set about trying to rectify the situation.
HOW TO REACH: Polymer Technology Systems Inc., (317) 870-5610 or www.cardiochek.com
Bob Bowen’s fingerprints are all over Bowen Engineering Corp. As the founder, chairman and CEO, Bowen has always taken a lead role in setting the company’s vision and solving problems when they arise. “If there was a problem, I fixed it,” Bowen says.
The world has changed over the past 40 years, and so has his company. As a result, Bowen himself has had to change the way he manages.
“If you’re going to build a great company for the future, you’ve got to have a lot of problem-fixers,” Bowen says. “You can’t have just one.”
That’s not always an easy proposition to accept for someone who built his company from the ground up and has always had a hand in most, if not all, aspects of the operation.
“If you’re an entrepreneur, you’re probably a lot like me,” says Bowen, the company’s founder, chairman and CEO. “You’re a doer. You’re task-oriented. You’re good at what you do, so you continue to do that.”
In today’s world, Bowen says it’s all about bringing others into the mix.
“If you’re going to be a great president, you have to bring people up,” Bowen says. “You have to build people up. You have to encourage people and promote people and give people an opportunity to step up and provide leadership, and you have to train them.”
Bowen Engineering was founded as a water and wastewater treatment plant contractor before shifting to a contractor that specializes in earthwork, concrete and mechanical work in commercial and industrial markets.
The business grew from around $6 million in revenue in the early years to nearly 1,000 employees and about $170 million in revenue in 2006.
The key to this recent success has been Bowen’s ability to work through his own uneasiness about relinquishing control of the company and to see the potential gain of developing employees into leaders who can carry the business into the future.
“It’s a culture change,” Bowen says. “Everybody here is focused on leadership training and leadership mentoring. ... Everybody knows that they have an opportunity to be the best they can be. There is no limit to what anybody can be in this company.”
Bowen developed the Compliment-A-Day Club to help drive home a feeling of camaraderie and commitment at the company that would encourage people to take on leadership roles.
“I compliment people probably 50 times a day, probably to a fault,” Bowen says. “One of the goals here in this company is everybody here is supposed to be a member of the Compliment-A-Day Club. If you have a meeting, how many people did you compliment today? Five of 20 will raise their hands. The more you ask it and the more you do it and the more you compliment people, the more you see everybody else complimenting people.”
Bowen says the concept is not a cultural gimmick, but rather something that he takes very seriously as a tool to keep the company growing.
“This is part of our management strategy,” Bowen says. “You’ve got to be a member of the Compliment-A-Day Club if you’re going to be a serious leader or manager.
“We’ve had some senior managers that weren’t good team players, and they are not here anymore. We had one guy that at one time I was grooming to take over the company. He was an I/me guy. My other employees hated him. He’s now running a business of his own. He’s a competitor. But I know that my company is better off without him, even though he’s a true entrepreneur. We’re a better company because we build team players, and we care about people.”
Bowen implemented an in-house leadership program that takes the top 15 leaders in the company and puts them in a position to mentor the next 15 leaders, who are viewed as protégés, the up-and-coming managers in the organization.
Bowen is using a model called “The Leadership Challenge,” which was developed by Jim Kouzes and Barry Posner.
Sessions are held every two months in which guest speakers come in and talk about leadership, team building, engagement and vision. The sessions are led by three senior managers, with one person in charge and the other two providing assistance.
“All of a sudden, everybody in our company is involved in the teaching,” Bowen says. “Most of the senior managers are mentors. It’s a great team-building exercise. It’s almost more team building than leadership training.”
Students in the program are handpicked by senior management and selected based on their readiness for leadership training. Standards include productivity, work ethic and success in their job.
Initially, students had a mentor selected for them, but the company has found better results by letting them select their own mentor from anyone in the company.
“Some of our matches weren’t exactly made in heaven,” Bowen says.
While students benefit from the knowledge they receive in the classes, the senior managers gain a lot by making the presentations.
“It’s good experience for them,” Bowen says. “It’s great image-building for the people to see their leaders up holding classes. You engage more senior managers in the presentations. Even an average presentation, it is still very good for the company to have your senior people up making presentations and having the responsibility to get up in front of people. I happen to believe that making presentations is a great training tool for building leaders.”
In-house development is the best way to develop the bench strength you need to keep your company growing.
“If you’re going to survive in the long term, that’s the way to do it,” says Bowen. “You build leaders. You force everybody all the way down to the lowest level in your company. Everyone has to take a step up as leaders.”
As the program endures, past protégés will become mentors to the next batch of new leaders, and the cycle will continue, allowing more and more people to receive the valuable training.
“It’s engaging everybody into the vision of our company,” Bowen says. “Now the mentors in the group are not the old-timers, it’s the group that just went through the program. (The new protégés) are being mentored now by young leaders that have been here a little longer than they have, probably not a heck of a lot older. They are now doing the leadership training, the mentoring, the team building.”
A program of continuous education on leadership skills can also help a company and its leadership adapt to changes both within the company and in the business environment of the day.
Bowen reflects on his own evolution as a leader as a prime example of the need for leadership training.
“In the past, I’d step in and give people advice and often-times fix the problem,” Bowen says. “Today, the boss does-n’t do that. He holds the people involved accountable, and he helps them, but it’s still their responsibility to step up and get the problem resolved. We’re teaching a whole lot of people how to solve problems now. ... If you’re going to build a great company for the future, you’ve got to have a lot of problem-fixers. You can’t have just two, or you can’t have just one.”
When people feel comfortable with their co-workers and see them as more than just co-workers, they will be more willing to share both the good and the bad that occurs each day in the workplace and work together to solve the problems.
“I tell people here, ‘Don’t go down alone,’” Bowen says. “If you have a tough problem, share it with your team. Share it with leadership and your management. We don’t want you going down alone. We’ve got a family and a team and all of a sudden, problems aren’t so devastating. Everybody takes responsibility and works through them together.”
Employees will be more encouraged to share their problems with a leader who is not looking to assign blame for whatever it is that went wrong.
“I tell people around here, ‘If you’re involved in a problem job, we all need to take ownership. Every person is involved, even Bob Bowen, chairman.’ What can I do? We can lose $1 million on a job. I’m not going to sit here and blame the project superintendent or the project manager. I tell them, ‘I hope you’re asking what you can do different on the next job to prevent this from happening.’ I ask myself that. We hopefully try not to lay blame but try to find answers.”
A big part of the leadership training sessions is teaching people to constantly be looking at their own role at the company and what they can do to make the organization better.
Such an attitude is important for all employees, but especially for those serving in a leadership capacity.
“If a project manager leaves here, it’s like, ‘Whoa, what happened?’” Bowen says. “People leave because of their direct supervisor. We’ve had three managers leave here. Two engineers and a project manager left in the last two or three years out of 150 or 200 people. Those were events that our company had to step back and say, ‘Wait a minute. What do we need to do different? What did we do wrong here?’ We believe in all three of those cases, we were not providing those people with the engagement and the opportunities they really needed. We’re now working with their supervisors on what you need to do differently.”
Leaders should feel a responsibility to be cognizant of the company’s future not only for themselves, but for their employees who are making their own plans for their future and that of their family. Giving employees a dose of leadership training and providing opportunities for them to move up in the company is a good way to provide some peace of mind.
“Their careers are going to be impacted by how this company survives in the future and how it succeeds,” Bowen says. “They want to know.”
Bowen Engineering is expecting 2007 revenue of around $250 million, and Bowen says the future has never been brighter.
“I can’t wait to get to the office in the morning,” he says. “You see people growing and loving their job. I walk through this office and they are all engaged. ... We’ve created an environment and an engagement, and we somehow passed that all the way down to the most menial person in our company.
“We know that I’m no better than our lowest-ranking laborer on a job. He’s working just like I am. They know that they are part of the team. They know they are part of the planning, and if they do a good job, they know they’ll get a nice bonus.”
HOW TO REACH: Bowen Engineering Corp., (317) 842-2616 or www.bowenengineering.com
Mix and match experience. We are at our best when we have diversity in our work force, in particular, a diversity of experience. So we pair individuals well into their careers as mentors with new hires who are starting their careers. We see two things happen: good progress for those starting their careers and cost-efficiency with the performance of the blended group.
It helps in a couple of ways for the senior. One is, as a teacher, you develop a mastery of the subject matter in a way that you never could or would as a student. The demands to be prepared to lead and to teach are really an extraordinary professional development opportunity, so we’re seeing a level of mastery in subject matter among our senior people because their expectations of those they are mentoring is so high.
The junior person is getting a good chance to see where they can go in their career. The difference between the two may only be five years, but they develop so quickly in their careers that they are seeing a peer with intense experience and savvy, and for someone just coming out of college, that can be both inspiring and very humbling.
Let employees know what’s going on. We run a totally transparent company and give a monthly report to all staff on all of our metrics financial and performance. On a quarterly basis, we lay those metrics against our five-year plan to show progress.
That allows individuals to self-manage their performance against company goals. It’s really been interesting to watch because senior employees with experience at other companies have blossomed under this open management system, where before they were shut out as to the company goals. It’s been extraordinarily empowering.
For our new people, who’ve never worked anywhere else, it’s helping them understand what’s going on and progress much faster in their careers. It’s worked differently depending on where you are with your career, but it’s all been very positive. For all the years we held on to that information dearly, I regret it.
Know whom you want to hire. From a hiring perspective, if there is one thing that we look out for, it’s a know-it-all, because there is so much to know. We are quick to identify know-it-alls and dismiss them. We are committed to lifelong learning, and if you are not curious and inquisitive and dissatisfied with your own knowledge, you can never keep up.
We’re very honest and hope that individuals self-select. We tell people, both on our Web site and in interviews, that there are much easier places to work and this is not a fit for everyone. We communicate the expectations. By being honest about our culture and the level of performance that’s expected, it really does allow individuals to figure out if that’s a fit for them. They’re going to know themselves better than we ever will.
So our recruiting is toxic. What we find is that the individuals who are attracted to that are extraordinary performers.
Give employees a chance to push each other. We have individuals maintain portfolios, and those are critiqued by their peers, and then peers are involved in the assignment of projects and the formation of teams. This forces individuals to be entrepreneurial within the organization, and it makes their internal performance really matter because if those slip, they’re quickly without work to do.
Now, our role as managers is to help those individuals develop their talents and market them internally and match them with others who are going to be in high-performing teams. I don’t want to suggest that the culture is brutal or negative, it truly makes for a culture of success.
We work with very motivated and very bright people, and if they have had a negative critique, generally we find they are way ahead of us in finding out why that happened and what they need to do about it. As management, typically our most successful tactic is to let them verbalize that and see that they work through an action plan to fix it.
Just letting them know that we care about their success, and we take the time to support them, is more effective than trying to solve it for them. Then we make sure they get right back on the horse by making a team assignment.
It’s critically important for the individual, but it’s also a demand of the business. We cannot carry individuals who are not valued by clients or peers.
Listen to your employees; they have the answer. Part of communication is the ability and willingness to listen. It’s not just empowering to the individuals, it’s also empowering to the organization. If you’re not willing to listen to your own staff, communication becomes one-sided with nothing but pronouncements from management.
There’s an issue of empowerment there, but, more importantly, you’re dealing with the presumption that management knows what’s going on. The individuals who are on the front line have a very different perspective and, frankly, much more of the critical knowledge about production and customer relationships, and they are willing to share that if we just ask.
And asking not only informs management, but in the spirit of a Socratic method of teaching, it forces engagement with the staff. By asking the right questions, we do more to see that the staff is focused on the right issues than we ever would by telling them to focus on those issues. Individuals are extraordinarily responsive to you taking time to understand their needs and their objectives professionally, and then they will want to achieve your objectives professionally.
HOW TO REACH: Hirons & Co. Communications Inc., (317) 977-2206 or www.hirons.com
The U.S. Patent and Trademark office has launched several initiatives to streamline patent processes, including a pilot program that guarantees resolution of new patent filings within one year. Despite its intentions, the current patent climate has been decidedly unclear since April when the U.S. Supreme Court issued its KSR International v. Teleflex decision, which struck down a long-held standard regarding the obviousness of patents. The decision may make it harder to win patent approval and could put some existing patents at risk to challenges.
Smart Business spoke with John Brannon, Ph.D., an intellectual property attorney with Sommer Barnard PC, author of more than 200 patents, to learn the implications of the changes and appropriate strategies businesses can pursue.
Why is the KSR ruling significant?
The Supreme Court decision threw out the teaching, suggestion and motivation (TSM) standard that was used to decide the obviousness of patents, saying it was too rigid. The decision won’t have much of an affect on patent filings, but will impact prosecution. The decision makes it easier for patent examiners to take prior art patents from different areas and combine them to make the case for obviousness of new claims. Prior to KSR, to reject a patent because of obviousness, the patent examiner had to show some teaching or motivation to combine two or more prior art references under the TSM standard. Now, the examiner can pull prior art references from anywhere they don’t have to be as closely related to the area of the patent application. Examiners could theoretically deny claims based on obviousness, as long as the combination of references includes all of the elements of the claim being examined.
Does the decision put existing patent protections at risk?
The decision will change the way patent applications are evaluated going forward. Existing patents may be subject to attack and scrutiny if the patent was granted by overcoming an obviousness objection solely based on the TSM argument. However, TSM by itself is rarely a winning argument, so not too many patents are at risk.
What else is impacting patent processes and litigation?
The Patent and Trademark Office has proposed several changes that are supposed to make it quicker and easier to get a nice, solid patent. They’re also trying to tighten up perceived abuses of the system. There is some well-founded criticism about the process, especially that it takes too long.
The most important proposed changes are the Accelerated Prosecution Route, which is a pilot program to expedite patents, limits on continuations for filings, claim reform that limits the number of claims filed for a given patent application, and information disclosure statement reform, which proposes limits for the number of prior art references filed with patent applications.
How does the Accelerated Prosecution Route make the patent application process faster?
The Accelerated Prosecution Route was a pilot program that started in June 2006 and guaranteed resolution of patent requests within one year. The first patents applied for under this program were recently awarded, and the Patent Office would like to expand the program. The program shifts a tremendous amount of responsibility from the patent office to the patent applicant, and it also increases the applicant’s risk.
Under the normal process, patent applicants do not have to search for and include prior art references with their applications, unless they know of related patents. The Accelerated Prosecution Route requires applicants to search for prior art references and document for the patent examiner how the references relate to the new application. It shifts the research responsibility from the examiner to the applicant. It also shifts a lot of risk. Any statements made to the patent office in the submission could come up in litigation, so applicants have to choose their words carefully.
The Accelerated Prosecution Route could be very useful for a company that needs a patent quickly because they’re at a competitive disadvantage without it. The process is faster, but it’s also expensive and requires more work, so it may not be worth it if there is time to be patient.
Are there new strategies patent filers should take in light of these and other developments?
The other proposals are intended to streamline the process and prevent abuses of the system. Some would limit the number of references submitted with patent applications, so key references don’t get hidden in a large filing. Others would limit the number of claims and extensions available for applications. Some sweeping changes have been proposed that won’t be applicable to the average applicant. These reforms may have the opposite effect as intended.
JOHN BRANNON, Ph.D., is an intellectual property attorney with Sommer Barnard PC and has a background in Ceramic Engineering. Reach him at (317) 713-3500.
Mike Barth III has made a life out of listening and observing. Whether it was following in the footsteps of the two Mike Barths that preceded him in the family’s electric business or listening to his 300 employees as president and COO of Barth Electric Co. Inc., he’s always open to everyone’s side of the story. To Barth, that’s the only way you can really be sure that you have all the information to move forward. That ability has been kind to him on more than one front as Barth Electric has pushed past $48 million in revenue, and, according to Barth, he’s one of the few guys on the planet who has a wife who admits he’s a good listener.
Smart Business spoke with Barth about keeping his ears open and coaching his staff.
Let your staff do the work while you coach.
I like the word coaching. It’s very rare that I actually head a project.
I think that with them having the freedom of heading the projects, there is a lot more self-satisfaction for them. A little bit of personal pride equals a better job. Every one of our projects has a final scorecard after it’s done, from the biggest job we do down to the smaller stuff, and I try to put notes on those to share some thoughts with people.
That certainly helps with their pride and self-satisfaction. Those are probably more important than the compensation. It’s not a quantifiable bonus, but it’s huge. If they feel good about what they do, they work harder at it, and they do better at it. And they’ll carry your message to the people around them.
I like the flexibility and the freedom to let people do their job, instead of telling them how to do their job.
Listen to all three sides of the story. I listen, and I pay very close attention to my surroundings. And, from that, it’s like the old joke about the three-sided story. I let all three people tell me their side of the story, and I’ll listen to it and decide which one, or one-and-a-half, reasons sound like the thing to do, and that’s what we run with. But I make sure everyone is in on it, and I hear what they’re saying.
Then I try to follow up. If it’s something they need to do their job a new computer program or a new tool I listen to it, and if it makes sense, we’ll happily do it. If it doesn’t make sense, I make it a point, after I look at the situation, to go tell them why.
Keep track of your employees for the future.
Positions don’t really come around every day, so it takes some patience on their part because we can only move people up as we have a need for them.
Along with that, I’m painfully quiet about not making promises to anybody. People know they can come in here and talk, and they can tell me their aspirations and I’ll listen, but I won’t make a promise if I don’t know when or how I can come through on that. Most people see that the opportunity is here, and if they do the job, I will try to give them a chance.
A lot of our people start off as electricians, and they do a very good job, and they work their way up, and as they learn, they will come and put a bug in my ear about how they might be interested in a higher position when one comes up. I keep a file of names of people who have come to me and some notes on those matters. Whether it happens in six weeks or three years, I do know their aspirations.
And if he’s an existing employee, I probably already know him pretty well or at least somebody on my key staff does. So I kind of already have a preconceived notion, but I still listen and talk to them.
Don’t wait on the tough decision. The hardest thing about being a leader is making tough decisions about people especially when it’s not working out. But I pace a little bit and just decide that I have to do it, so I do it. When I get done with it, I know it’s the best decision for the company and the other employees here.
I’m generally pretty swift about the actions. I put out a memo within the department with a slight delay and then let it go out through the rest of the company from there.
It’s just easier on my mind that way. For the company, it’s going to be disruptive one way or another, but if you give somebody two weeks notice or something, it would be pretty hard for that person to care to do their job. And it’s even more destructive to give that person time to talk to others; that can be detrimental.
Believe in your gut, but double-check. I joke that I grab my posterior and let my gut lead the way on big decisions it’s usually out in front of me anyway. The way the whole thing feels is very important to me. But we also go through the pros and cons list of why we want to pursue a venture.
Once a potential project comes in the door, we’ll decide which team is going to do it, and we’ll get that team leader, our head of estimating and even our financial guy, and we’ll gather them together and ask why do we want to pursue this job. And then we’ll knock around the pros and cons, and we’ll go from there.
I can sit here and decide that we want to go pursue that new factory, but if I get the team in there, it makes them feel better, and they will do a better job if they’re in on the final decision.
HOW TO REACH: Barth Electric Co. Inc., (317) 924-6226 or www.barthelectric.com