We’ve all had days where we would rather not open the newspaper, turn on the TV or pick up the phone for the fear of learning about more bad news.
Unfortunately, there have been a lot more of those days for all of us lately.
The stock market is going through extreme ups and downs, capital has dried up and key customers are cutting back. You start to wonder where the sales are going to come from to enable you to make this quarter’s budget. If things don’t turn around soon, you’ll have to consider drastic cutbacks yourself.
In times like these, what’s a CEO to do? The answer: Get back to basics. Focus on the things you do best and do them as efficiently as you can. Use your strengths to exploit your competitors’ weaknesses and outhustle them.
It’s often the simple things that made you a success in the first place, and it will be the simple things that keep you afloat during the economic storm.
With that in mind, we’ve assembled the best pieces of advice garnered from Los Angeles’ top leaders from throughout the year. We think you’ll find some great ideas to help you improve your business within these pages, and we encourage you to keep this issue as an ongoing reference to help you find your way through the trying times that lie ahead.
Keep yourself challenged
Alec E. Gores
founder, chairman and CEO, The Gores Group LLC
Billionaire Alec E. Gores knows a horror story that every leader should learn from.
“I worked with this guy a long time ago that had this word-processing company worth $500 million,” the founder, chairman and CEO of The Gores Group LLC says. “Along the way came personal computers and this guy was so stuck in his technology that he was not open-minded to other technology. One of his engineers even saw the PCs coming along, and he played around with putting their software on a PC. This guy, with his ego, basically fired him.
“Well, the rest is history. They went out of business a year or two later because the PCs came along, and that one mistake, not being open-minded and listening to your people, stays with me. If I get stuck in my way, thinking we’re the best instead of thinking, ‘Jeez, this business is changing, and we need to continue to look at the challenges and competitors and make it better, then I’m not doing what I’m supposed to do.”
So Gores is constantly thinking about taking on a bigger challenge than he’s ever met before.
“Once you get successful, you’re stuck in this mindset and you think you have the best toy,” he says. “You are very close-minded because you think the world is never going to end, so it’s that fear that you have to have that this world is going to change, and you better be ahead of the game, and you better think like a start-up.”
That means Gores tells himself every day something many leaders don’t want to hear: He’s not the smartest guy on the planet. Not even close.
“I don’t let that get in the way and start making a lot of assumptions that may not be true,” he says. “That’s a challenge because you almost are too smart, and you’ve been through too much, and that can keep you from going to the next step. But if you’re always challenging people to continue to take risks and reach and get better to make the company better, you have to do the same.”
Make sure you have a life
co-chair, Disney Media Networks, and president, Disney-ABC Television Group
It’s easy to get caught up in the daily grind, but Anne Sweeney, co-chair of Disney Media Networks and president of Disney-ABC Television Group, has learned that success can come from some time away from her $15 billion business unit.
“We are a company that touches so many consumers in so many different ways; we really want to work with people who are a part of that, people who are living in their world, who have interests, who have hobbies and who are different from each other,” she says.
Pushing that drive for a life is something that has to come from the top.
“I have to take vacations; I can’t just tell people to take vacations,” says Sweeney, who was featured in the May issue. “I have to be judicious about sending e-mails out on weekends. I do have a fair amount of insomnia, and I’d get up at 3 in the morning and turn on my computer and go through my e-mails, and people were waking up at 6 and having an e-mail from me at 3 a.m. Then I started to see that I was getting responses back at 3:30, 3:45, and I realized that I was the problem. ... Unless it’s terribly urgent, I now save those things as drafts in my mailbox and send them out at a more appropriate hour.”
Sweeney has found that creativity at Disney isn’t sparked by overtime, but by people who have a work-life balance.
“The important thing that I’ve learned is that when you have a life, and you’ve truly encouraged your team to have a life, the results for your company are much stronger than if you ask them to give you 24-7, and the work becomes a grind,” she says. “I find that we have real surges in creativity when people have been able to get out in the world and step out of the zone that we’re in Monday through Friday. They come back refreshed with a million ideas.”
Mark R. Goldston
CEO, United Online Inc.
CEO, American Reprographics Co.
You may think your company is ready to make an acquisition, but can you handle a full cultural merge? Mark R. Goldston, chairman, president and CEO of United Online Inc., has built his company through mergers and acquisitions, bringing together names like NetZero Inc., Juno Online Services Inc. and FTD Group Inc. To him, step one is all about knowing what you’re getting from a new team.
“Why do so many acquisitions fail? Let’s face it, they’re done by smart companies with smart investment bankers,” he says. “Why do so many of them fail? Because it’s the conquering theory: ‘We’re going to force our culture onto your company’ — that doesn’t work.”
Instead of sending out his people to figure out if a company can fit with United, Goldston makes sure he does the scouting.
“Most guys that I know that are peers of mine, they send out their advance teams, they do the work, they report back and decisions are made, and the only people the CEO meets are probably the CEO, the CFO and maybe one or two other key players, that’s it,” he says. “You rarely meet a CEO who’s met people 40, 60, 100 deep in an acquired company.”
“Part of it is, is it very clear to me and to them what their jobs are and how they are doing. ... What do they do, what’s their work ethic like, what’s the quality of their work product like?”
If a company doesn’t have the clear makings of what will work with United, Goldston won’t close the deal.
“You see some of these big brand names go bankrupt and you’re like, ‘Wow, how could that company go bankrupt, everybody’s heard of them?’ Yeah, well, what kind of people did they have?”
Suri Suriyakumar, president and CEO of American Reprographics Co., takes that a step further. His company has acquired more than 100 different pieces, and he adds the importance of breaking employees into your culture carefully.
“We never change a president’s job title,” he says. “The key element of that is for us to understand that we’re not just buying a company because we have the money but to win the hearts and minds of the people over in the company we acquired. Failing to do so would actually put our investment in jeopardy.”
So you have to quickly let people know that being part of a larger organization won’t kill their careers.
“The important element is right at the beginning of the acquisition for us to be able to protect ourselves as a company to let them know you are actually going to improve the company,” he says. “When people get acquired, their biggest worry is that their title will change, their jobs will be cut off and somebody is going to bring improvement by cutting cost.”
Study to the front lines
Andrew F. Puzder
CEO, CKE Restaurants Inc.
When Andrew F. Puzder arrived at CKE Restaurants Inc. in September 2000, it had serious problems. The $1.59 billion company was limping — particularly Hardee’s. But there is often a general indifference to basic business guidelines at a stalled company, and Puzder quickly realized most Hardee’s hadn’t touched up on the basic principles in years. He remembers visiting Hardee’s after Hardee’s, each with windows that were just too clean.
“There are french fries on the floor, people have food on their shirts, the tables are dirty, but they’re always cleaning windows,” he says. “My theory was they were cleaning the windows so people could see how bad it was inside and wouldn’t come in.”
Puzder laughs now, but when he looked into the problem, he found his restaurants had an antiquated 4-inch thick cleaning manual covered in dust. His remedy was a 10-page book that simplified cleaning. And, according to Puzder, “The last thing on the list was cleaning the damn windows.”
With a new focus on running a good restaurant, Hardee’s lost its reputation for dirty units and rude service and stopped the bleeding — the average store unit made $916,000 in 2007, the average in 2001 had been less than $800,000.
“If you’re going to fix something, you need to fix it where the rubber meets the road, and that’s where the customer is handing you his dollar,” he says.