Going up Featured

8:00pm EDT July 26, 2007

Once upon a time, there was a company that made buggy whips, says Barry Pletch.

With horses and carriages on every street of every city, the buggy-whip maker flourished. The company’s name was everywhere, and the company’s leaders made a lot of money.

But then, along came a new invention: the automobile — a self-propelled contraption that used an internal-combustion engine instead of horses.

With so-called “horseless carriages” beginning to proliferate, the buggy-whip maker soon came to a crossroads, its leaders forced to make a decision, and they couldn’t afford to be wrong.

“They had to either figure out a way to get into the car industry or sit there, hope the car industry failed and continue to make buggy whips,” Pletch says.

A quick glance at your office parking lot on a busy workday should clue you in to the fate of the buggy-whip maker that decided to stand pat and hope the auto industry would fold.

Pletch says stubbornness and stagnation is a recipe for disaster in the world of business. The cautionary tale of the buggy-whip maker that ignored the oncoming tidal wave of the auto industry helps Pletch keep his work force at ThyssenKrupp Elevator, Americas Business Unit — one of the largest manufacturers of elevators and escalators in the world — focused on the future.

“You have to keep ahead of the game,” he says. “You have to be thinking about the ideas of tomorrow, not of yesterday, and even in some cases be willing to terminate what you are doing because it doesn’t fit in to where the market is going.”

It’s no small task for Pletch to keep his business focused on that common goal. As the president and CEO of ThyssenKrupp Elevator, Americas Business Unit, he oversees a work force of nearly 12,000 spread across North and South America, running a business that is a $2.6 billion segment of ThyssenKrupp Elevator AG, which is based in Germany.

Faced with great numbers and great distances, Pletch says communication is one of the essential components of his job. Without effective communication skills, he says he’d never be able to accomplish the Herculean task of taking employees based in Los Angeles, New York, Canada, Brazil and many places in between and getting them to work toward the future of ThyssenKrupp.

Great communication

When communicating with many different employees spread over a large area, Pletch says the first and most important lesson to learn is to keep your message simple and direct.

He centers his messages on three or four specific, company-related goals that stay the same regardless of geography, and then conveys those messages in meetings, e-mails and other forms of communication.

“My belief is that you have to deliver the same message every time,” he says. “You can’t deliver 15 different messages. You have to deliver three or four specific things you are looking for as far as goals, as far as the way we want to do business, integrity within the organization, communicate that consistently and make sure (our managers) communicate that to their people. You can’t send people in 15 different directions.”

Regardless of the size of your company, the need to get in the field and engage your employees in person is constant. Pletch says that even though travel time and other commitments can get in the way, it’s up to you to make the time to get down in the trenches with your foot soldiers.

Engaging employees in person is the only way you can really expect them to buy in to what you are telling them.

“To make (communication) effective, you have to get on the ground, get on the front line, visit construction sites, visit manufacturing plants,” he says. “Don’t just walk through. Speak to the people who are actually doing the work, using their hands, using their ability. Find out what their concerns are. Talk and listen to them.”

Every CEO has 24 hours each day and 365 days each year to work with, so Pletch says there is no real secret to blocking off the time to communicate in person except to prioritize. He says the best time to do that is at the start of the year, when your calendar is clean.

“You have to mark in dates, and those dates then become a priority,” Pletch says. “I think about 20 to 25 percent of my time is spent talking to customers and talking to our front-line people. Management meetings, meetings with board members in Germany, a lot of that can be done by videoconferencing, so we’re not flying overseas for meetings that take four or five hours.”

Pletch says communication is more or less the grunt work of the innovation process. If you aren’t hammering away on the importance of innovation and actively soliciting ideas from your employees, an innovative culture will not take root.

However, if you pour enough of yourself into your communication infrastructure and log the air miles, good things can happen, and the culture will begin to cascade downward.

“It’s regular meetings with the management team, having them assure you that they’re having regular meetings with their team, face to face with every part of the organization,” he says. “I personally get out to branches, but with over 200 branches in North and South America, I don’t get to every branch every year. But I have a plan to get to every branch within three years.”

The ground level

Pletch says there are some things his markets have in common: “They have elevators that go up and down. They have escalators that ascend at 30 degrees.”

Beyond that, he assumes no similarities.

Great ideas can’t truly be great unless they address your customers’ needs. Pletch says you can’t come up with one innovative idea and expect it to be a puzzle-piece fit with customers in every market.

That’s why Pletch wants each one of his branch managers to operate like an individual entrepreneur running his or her own business, generating ideas and, above all, listening to what customers are saying from the ground level.

Pletch calls Jack Welch his “business hero,” and tries to emulate a lot of the principles Welch perfected at General Electric.

“The first thing you do is you give your senior managers and branch managers goals,” Pletch says. “They can be 90-day goals, six-month goals or 12-month goals, but you set them, and get out of the way. Let your managers do their jobs and don’t micromanage.”

Not only does Pletch steer his managers away from cookie-cutter management, he tells them that he expects each branch to be managed uniquely to that market.

“A hospital customer is completely different from an office-building customer,” Pletch says. “A condominium board wants to meet with us at night because no one is available during the day. So if you have a lot of condominiums in a given market, it’s much different.

“It’s much different in Florida than it is in Las Vegas or Minneapolis. You have to recognize that, and let the branch managers decide what is best for those customers locally. We have to let that happen because those of us in upper management can’t be dictating from 5,000 feet how to handle a particular customer.”

Pletch also borrows from the Toyota template of business management, which he says values customer service as much as, or more than, the product that is being sold.

“Toyota has grown to become the leader in the automotive marketplace,” Pletch says. “How did they get there? It’s not because their cars are really that much better than the competition. But a lot of it is in how it’s presented to the customer. I know Toyota owners who rave about how, when they take their car in for an oil change, it comes back washed and with the inside vacuumed.”

Pletch says it’s going the extra mile for customer service that secures repeat customers, and that responsibility lies in the hands of the employees who interact with the customers.

“It’s always best to listen to your customers,” he says. “We are continually challenging our people, telling them that whatever you do today, you must find a way to do it cheaper, faster and better tomorrow. That’s the basis of our organization. Those three things — Is it cheaper? Is it faster? Is it better? — will hopefully give you an advantage over your competitors, if you continue to do it on a daily basis.”

Gathering information

Customer interaction starts at the ground level, but in order for the customers’ ideas to have a lasting impact on your company, there has to be a way for their words to reach the people who blaze your company’s new trails.

Officials at ThyssenKrupp Elevator have regular meetings with customers all over the Western Hemisphere. The company’s sales, research and development, and management wings are involved in meetings with local developers, consultants and architects. The meetings are a forum for ThyssenKrupp’s customers to pool their ideas and concerns, which could be used later in the formation of a new elevator or escalator product.

“Usually, there are 20 to 25 people in those lunch meetings,” Pletch says. “We ask them, ‘What can we do better? What would make your life easier when it comes to elevators and escalators?’ We ask them what the future should bring.

“A lot of creative R&D ideas have come from a customer saying, ‘I want this,’ or, ‘I’ve been getting this for 10 years, and I want something different.’ That’s where we’re getting our ideas, and it’s great feedback.”

Pletch says the meetings are cut at 20 or 25 customer representatives to avoid information overload. You want many different opinions and perspectives from various customers, he says, but you don’t want to have so many voices at one time that some ideas get lost in the shuffle.

“You think of the number, it’s like 20 students in a classroom today, that’s a pretty normal number they can control. That way, everyone’s voice is heard.”

The ideas generated in those meetings are then put through to ThyssenKrupp’s R&D committee, which is a cross-section of Pletch’s work force that reviews and analyzes ideas, then prioritizes them.

Pletch says it’s important to have a system for gathering and considering customers’ ideas because customer needs can change quickly and, in some cases, drastically.

Increased competition in the retail sector has affected a nonretail business like ThyssenKrupp Elevator. The more department stores that open in a given area, the more stores there are competing for the same consumer dollar, which means any store that operates with ThyssenKrupp’s elevators and escalators needs to be assured of reliability, both from the company’s products and its services.

“I’ve had people at high-end department stores who tell me every person who walks through the door after Thanksgiving spends $380,” Pletch says. “If they can’t get up to the second floor where all the jewelry is, they’re going to miss out on a big portion of that $380.

“We need to provide them with an escalator that runs 12 to 15 hours a day, then provide them with the right product and the right maintenance to make sure that happens. In the retail business, time means money, and they have to make sure things are operating properly.”

To Pletch, customer service is a critical part of staying ahead of the curve. You need to produce the products your customers are looking for, but backing up your products with service and attentiveness is a key component in making sure your company doesn’t end up like the buggy-whip maker that was blindsided by the advent of the automobile.

“It’s all about continuous monitoring of your customer base,” Pletch says. “If you don’t, you’re going to end up like some of the large companies today that are falling behind. You have to be in front of your customer. If not, then you’re eventually going to be out of business.”

HOW TO REACH: ThyssenKrupp Elevator, Americas Business Unit, www.thyssenkruppelevator.com