Involve your people in decisions. That probably gets annoying to people because decisions are slower than giving finite answers, but I like to look at strategy and operational decisions from a 360-degree angle.
I’ll often argue both sides of the argument to make sure that we are doing ourselves justice in making the right decisions and challenging the people to do that and try to get consensus from my team before we make decisions.
It’s pushing down to empower people to do their jobs. We do consensus and setting the strategy. Once we do that, we try as best as possible to empower the next one to two levels down to make their own decisions and tell them mistakes will happen, and that’s OK. If mistakes didn’t happen, we’re probably not learning.
I always tell everybody they’ll never lose as much money for the company as I have, so they shouldn’t worry that much about making a mistake.
Communicate employees’ roles to them. The biggest impediment to empowerment is people just don’t feel they’re empowered.
A lot of that is due to lack of clarity is this my role? Your role? Who has the decision? Who is the influencer, and who has to be informed?
Some, you want to inform them because your decision will impact them, but they don’t have to be part of the decision, they just have to be informed. There are people that influence decisions, so you want their input, but they don’t make the final decision.
Then there are people actually responsible for the final decision. Make sure the people understand what their role is are they an influencer, someone who has to be informed, or are they a decision-maker?
If you’re a decision-maker, make sure they know that, and make sure other people know that, so when a decision is made, it can actually be executed. A big risk is someone thinks they made a decision, [only] to find out it was never executed upon because other people didn’t think they had the right to make that decision.
Trust people. If you don’t trust the individuals to make decisions, either they’ll act like robots and they lose all ability to think, which means your company isn’t doing a good job because they’re not going to have any ideas.
Or you just drive them out because they get so demotivated because they try new things and nobody listens to them you don’t respect their opinion and you don’t trust them to make decisions.
You have my trust from Day 1. You [could] lose it, but you don’t have to earn it. To trust people to make decisions, you hire the right people. Raise the bar and make sure the people you hire are talented, smart, and they come in and learn.
Nobody comes in and knows everything at once. Over time, through working with other people or mentors or learning through experience, ultimately you trust their instincts and talents. If you can’t trust the people working for you, then you don’t have a solid company.
Hire good people. We want the person to be smart, bright and [have] the ability to operate and think independently. Things move and change quickly, so we need people that can hit the ground running if we put them in the deep water with a life jacket, that they can make sure they don’t sink.
No. 2 is adaptability. We change a lot. Strategies change a lot. You have to be someone who can roll with the punches and be flexible. No. 3 is innovation and risk tolerance. If you’re not willing to make mistakes and try stuff new, you’re not someone who’s going to help us raise the bar on ourselves and grow the business. We need people who aren’t afraid of taking calculated risks.
I don’t want people who are just going off without thinking and saying, ‘Hey let’s do this, and we’ll see what happens,’ and all of a sudden, $10 million later, you say, ‘What the hell happened?’
We want people who aren’t afraid of trying new things and doing it smartly, so we want people who are creative and analytical.
Ask tough questions when interviewing. I ask a lot of black and white questions that people don’t like to answer. For example, would you rather get up on a desk and inspire 25 people, or sit down in a room and have a meaningful impact on one person’s career. Obviously we’d like both, but I don’t give you that choice. You have to pick one or the other and explain why. Those are the types of questions that you never know what I want to hear, so the interviewee is confused.
Answer what you want to do, and it gives us an indication of the type of person or manager you would be. It’s a lot of black and white questions to the extreme that, in reality, almost never happen, but it helps give you a sense of what the person’s taste and predilections would be.
Have a personal touch with employees. I know everybody by name, and I know something about them, and I encourage my senior team to do the same just personal connections so they know we’re trying our best, and we’re not perfect. We never pretend to be, and people see that.
They may not always like our decisions, but they respect us and understand that we’re trying to do what’s best. People relate to that, and there’s a tolerance for making mistakes. We just learn from them and move forward.
It’s engraining that in people whenever we have the opportunity. Whether it’s at quarterly reviews, annual events or just a one-on-one basis, saying, ‘Hey, glad you tried this out. It didn’t work out what’d you learn from it? What’s the next thing you’re going to try?’ HOW
TO REACH: AG Interactive, (216) 889-5000 or www.interactive.ag.com
As Ted Glahn worked in his office filled with framed photographs of his family, one of his managers came to him with a problem.
As president of Solarcom Holdings Inc., Glahn had written the compensation plan for a particular salesperson, but the way it read cheated that person out of a hefty commission.
“Ted, this happened, and here’s the way it reads, but that doesn’t seem fair because of this and this,” the manager said to Glahn while he reviewed the plan.
Glahn realized that the way he wrote it didn’t express his intent, creating a discrepancy.
“You’re right,” Glahn said to him. “That’s really not what I meant. I didn’t think of that issue that could impact it, and I think we owe him the money.”
Glahn paid that sales rep almost $22,000 more than he originally received because it was the right thing to do, and it’s an example of how he operates.
The son of an immigrant truck driver, Glahn grew up ingrained with values prioritizing family and integrity. His blue-collar upbringing and ideas have propelled his success as he’s moved up in the white-collar business world and cultivated an environment at the technology solutions company that’s focused on customers and employees. But all that work can be destroyed if anyone has a lapse in integrity, so Glahn embarks on a daily quest to lead by example.
He believes that when you build relationships based on integrity, growth will follow.
“If you set the example, then managers follow,” Glahn says. “You maintain integrity by making sure that you always use integrity and good judgment, and they learn that you expect them to do the same thing. It’s not an option it’s a requirement.”
Focusing on customers
Glahn met a major client for dinner and during their conversation told the man, “I don’t have a widget. I don’t have a product that comes out of a warehouse that I manufacture that answers all your problems. What I sell is a relationship. What I sell is customer service. What I sell is a partnership and not a vendor relationship.”
That approach helped Glahn grow Solarcom to $400 million in revenue last year.
“Nobody spends money simply because they have nothing to do on Friday,” Glahn says. “They have a problem. They have a business issue they need solved, and that’s what you really need to do. From a business perspective, that’s how you make money. ... Put yourself in a position to be a partner and not a vendor because vendors are a dime a dozen they come out of the Yellow Pages. You have to provide service.”
Glahn starts with pricing. He has no qualms about making money, but he knows the difference between making a profit and ripping people off.
“It’s more important to me to have a long-term relationship with our customer than try to gouge somebody and try to find new customers every year,” Glahn says.
He uses old-fashioned rules like returning phone calls and e-mails within 24 hours to nurture customer relationships. But creating solid customer relationships extends beyond their inquiries. Employees call and ask customers everyday questions simply to touch base. “When people spend a lot of money with you, the only contact they hear from you shouldn’t be, ‘What are you going to order this week?’” Glahn says. “Every once in awhile, it’s nice to get a call from someone and say, ‘How are you doing? How’s the weather? Did you go skiing?’”
His executives also periodically visit customers and they never talk about selling. Instead, they listen to the customers’ problems and help them find solutions, even if that solution doesn’t benefit Solarcom. “I would rather promote a concept to someone that saves them money and literally costs me money than try to oversell to make money, because when I do that, I’m going to stand out among my competitors, and they’re going to do business with me next year and the year after and the year after,” Glahn says. “We’ve been here 30 years. I want to be here a lot longer, so we look at everything as a long-term relationship instead of a short-term gain.”
Nurturing relationships extends beyond just the good news. Glahn says it’s important to share bad news immediately to maintain credibility and integrity.
“Bad news doesn’t get better with time,” Glahn says. “If you have some bad news, you need to do it. We’re definitely not perfect. We make mistakes. The real issue is how you respond to those mistakes.
“We want to do business on the basis that I’m not perfect. I can’t promise to be perfect, but I can promise to always plan to do the best I can to be perfect, and if I do something wrong, I’ll fix it, and I’ll fix it at my expense, not yours.”
A team based on integrity
These approaches to customer service sound great at the top, but it requires a lot of effort to ensure that Glahn’s 350 employees live up to them as well.
And that starts with hiring like-minded people. Glahn takes a long time when hiring and has lost potential candidates because they grew frustrated with the interview pace.
“I’d rather lose some than hire some that were a bad fit and didn’t take the time,” he says.
He looks for people who will uphold integrity and model it for others to emulate.
“You have to get up in the morning and look in the mirror, and if you look in the mirror and don’t like what you see, then what do you got?” he says. “That’s a terrible way to live. I’m not going there.”
Potential hires may talk to as many as seven managers during interviews even those they wouldn’t be working for because Glahn wants everyone’s opinion. The final interview is with him, and he doesn’t look at resumes that’s for the managers to evaluate.
Instead, he wants to get to know candidates as people, which often starts with how they respond to his office, where one can’t look anywhere and not see a family member’s photo. He uses his family as a talking point to see if candidates value time outside of the office, or if they have more of a churn-and-burn style. “I’m very clear to our people I want you to work hard,” Glahn says. “But your job’s not more important than your family. If your job comes before your family, eventually you’re going to be an unhappy person, and if you’re an unhappy person, that’s going to show up in your work. “You work so that you can take care of your family. You didn’t have a family because you had a job. Life’s kind of short, and there are so many things out there that just make you a better person when you have something you look at and that’s what drives you to work. Heck, I’d rather lay under a coconut tree and drink margaritas. The reality is, I use these pictures around my office as a motivator.”
Glahn encourages his employees to be motivated in similar ways.
“I want them to go home,” he says. “I don’t want them to work 10 hours a day. If you’re doing that, you’re probably not working smart. You may be working hard, but you’re probably not working smart.
“You need to go home. You need to see your wife, your kids, your boyfriend, your girlfriend, your partner. You need to take care of that because if you don’t, you’re not going to be a complete person.”
As he hires people receptive to that environment, they grow with the current employees, bonded by common ideals.
“It’s no different than a relationship with your spouse or significant other,” Glahn says. “When you first met, it wasn’t the same as it was two years later, right? They just start melding together, working together, and start respecting each other.”
And if employees respect each other and customers, they don’t need the shelves full of procedure manuals that most businesses have. It all boils down to doing the right thing.
“If you follow that one rule, you could save 3,000 trees,” Glahn says. “You don’t need all that junk because it all brings you back to one sentence do the right thing. Sometimes the right thing may not be the right thing for your pocketbook.
“People come in here with what they think are complicated issues. I look at them and say, ‘Well, what’s the right thing to do?’ ... It’s not that complicated. People get used to following that kind of protocol.”
And when people uphold integrity and perform well, he makes sure to communicate that.
“The tap on the shoulder hey, you’re doing a great job, or that was a good presentation sometimes that’s worth more than money, and sometimes companies take that for granted,” Glahn says. “They forget that people are just people, no matter how tough on the surface they are or how professional they are or how advanced they are in terms of their success.
“I don’t care who they are. They could be Lee Iacocca or President Bush, it doesn’t matter. Occasionally, it’s nice for someone to say good job, and good job doesn’t come in terms of a check.”
The company also rewards top performers with incentives. Last year, it thanked them for their work by taking 85 couples to Costa Rica for vacation. Whether it’s a pat on the back or an exotic vacation, it all starts with caring about people. “Focus is the key not only for (business) but for the culture,” Glahn says. “Culture and the way people act is something that has to be reinforced literally every day. If I go to the coffee machine and it’s running low, I make coffee. ... You have to do things like that and set examples. “You have to focus on not only the business of making money but the business of taking care of people. It’s the business of leadership, and leadership has a lot more to do with people than it has to do with money.”
HOW TO REACH: Solarcom Holdings Inc., (888) 786-3282 or www.solarcom.com
I’m all about the people that work here and that I deal with outside, as well. It’s a relationship business they all are. Understanding psychology, that’s always helpful because knowing what motivates people and how to get them to work for you and feel good about the company, themselves it all flows together.
Make work a home away from home.
A lot of what we do is about longevity, so it’s an encouragement to stay with the company.
Coming to our organization, we want you to find a home here, and we try to match skill sets and promote and reward. Obviously money is important. Beyond that, it’s feeling appreciated and noticed.
We don’t have a lot of layers here we’ve got about 500 employees, so your work is recognized and acknowledged. It’s pretty simple: You work hard, you get rewarded, and if there’s other opportunities, we’ll look from within first to promote.
Hire employees with multiple skills.
There’s not one prototype, but you want someone who wants to stick around awhile and learn and is open. Well-rounded works better than someone who has a particularly strong skill set in one area.
We’re in a really fast-paced environment, so you’ve got to be on your toes and be able to multitask. You need good computer skills, good communication skills.
Rely on your managers.
I tend to want to control everything, and not in a bad way, but just know about everything, because ultimately, if the buck’s going to stop with me, I need to know about it. I’ve gotten better in trusting people because we’ve got so many talented people to own different segments of the business and get it done.
Select some key managers that have a particular skill set that can get it done. Empower them to make decisions and go out there and do the research and then execute.
It’s about the team. Nobody does this alone. You have to have a really great team around you and work closely together, and there’s that whole trust. Sure, one of us is going to stumble once in awhile, but we pick each other up and keep going.
Prioritize employees and watch the bottom line.
We’re a no-debt company. If we don’t have the money, we don’t do it.
Our motto was proven right in the tech-wreck. Many of those companies were trying to grow by press release, and they were overex-tended. We had a lot of technology companies that use Business Wire, and we felt a trickle-down effect, but we didn’t have any layoffs not one during that time.
We said, ‘These people we hired to be with us and grow with us, and we’re going to find something else for them to do until we recover,’ and we did. It speaks to the fact that we weren’t overextended.
The people that work here, that’s how they stay. We have good benefits, but more than that, there is that care. You spend a lot time with everybody in your office. They become like your family. If we take care of our people, they’re going to take care of us, of our clients, which is what it’s all about.
Address problems as they arise.
Sometimes you have to course-correct. We hate to do it, but there are requirements, and we’re an aggressive company, so we might have to change the manager or salesperson.
There might be a good reason for that. An industry might be lagging, so we might have to ride that for a while, and maybe they’ll have to look at some other ways of selling. They might need to be retrained in some area.
Most of the time, you’re going to find out you’ve got the wrong person in the job. Someone might be good at one thing, but they’re not that good at something else. They’d be better off in a different position. It’s matching up skill sets. They’re not happy, either. It’s kind of refreshing when the person says, ‘I’m feeling stressed out this is a relief to hear.’ It’s identifying it early and communicating.
Learn from mistakes.
You’re always going to keep learning. I don’t think anyone should ever get so cocky to think you’ve got it all figured it out because nobody does.
It humbles you a little bit. Always keep a little grace for other people, and hopefully you’ll get the same when you need it.
I have a little newspaper clipping headline on my PC, and it says, ‘Nerves of steel.’ It’s stressful. Lots of things happen, and you have to be prepared, but you can’t anticipate everything that’s going to happen on a given day.
You’ve got to be flexible, and you need to be able to take that deep breath and think about it rationally before reacting. Then you address the issue head-on, you deal with it straight up, and you move on. The one thing I do is, we have a problem, immediately communicate. That takes a lot of the sting out of the problem.
You take your lumps and you fix your problems and you just move on. That kind of attitude serves everybody well.
Have strong values.
Keep it simple. It’s like the old values are the good values, and if you live your life that way in business and [in your] personal life, you pretty much can’t go wrong. Hard work and being focused and being passionate about what you do if you don’t have that, I don’t think anything really happens.
HOW TO REACH: Business Wire, www.businesswire.com
When John P. Hayes took over HomeVestors of America Inc. in early 2005, it was to fulfill the company founder’s dying wish.
Hayes switched careers from consultant to president and CEO, and began nurturing the real estate company’s culture while creating a focus on growing profits. He convinced his 80 employees and 250 franchisees that the company would grow and, true to his word, 2006 revenue grew 17 percent over the previous year to a projected $38 million, and the number of employees doubled.
Smart Business spoke with Hayes about how giving away gas cards and going to Texas Rangers games help foster an environment that makes employees want to stay.
Q: How do you communicate change to employees?
[Support] didn’t happen by me sitting in the ivory tower sending out e-mails or letters. I get in front of them, and I speak very frankly with them.
I’m not going to tell them something I don’t believe to be true or know that is true. They respect that, and that’s a lesson I’ve learned through the years from my clients, that when there’s trouble in paradise, don’t run away from it get out there and face it.
We also have opportunities to meet throughout the year with all of our employees and in our weekly staff meetings. The vision, mission and our code of values are discussed frequently.
Employees rank-order our code of values and how well we’re living up to our code of values. The bottom two that don’t fare, we make a concentrated effort in the next 90 days to improve our ability of that value that seems to be lacking.
Q: How does establishing those values help the company?
When they see that we don’t only talk about the code of values, but we live up to the code of values, then that creates an environment important to growth because you need to keep these employees they’re your internal customers.
We need to develop a relationship of trust with them, so when we tell them something, they know we’re not just fooling them or lying to them. We’re telling the truth. We have a value that says we communicate honestly, and that helps keep walls from building.
We also have a value that says we ask for clarification when we don’t understand. That’s huge because if I ask you to do something, and you think you know what I mean, but you’re not sure, and you go away and do it and come back, and I blow up, that doesn’t help anybody.
If you’re getting direction, seek to understand what it is. That eliminates many of the stresses.
I was a consultant for most of my life to franchise companies. I would see a founder or CEO knew what he was trying to accomplish or what she wanted to do, but the 22 people working for them had 22 different ideas of what they wanted to do.
That retards growth, and that’s the first step, assuming you have a great company with a concept that produces results. Make sure that every internal customer or employee understands this is what we’re trying to achieve, and this is how we do it, and these are the standards we’re trying to live up to, and if you don’t like our standards, or you don’t want to fulfill our vision or help us do that, we’ll be happy to help you find a job somewhere else, but you can’t work here.
Q: How do you maintain the culture?
Focus on fun, which a lot of companies don’t do. We sent five of our employees and their guests to the American Idol tour concert. Several times in the last year, we’ve said, ‘The cost of gas is outrageous, and you have to get to the office, so here’s a gas card. You don’t have to win it or qualify for it it’s on us.’
We took the entire office to a Texas Rangers game and rented a skybox. It’s costly to us, but these are our customers and important people to us, so we need to help them and take care of them. We do things where we make them feel like this isn’t just a place to work, it’s a place to stay for a long time.
We believe in continually enhancing our knowledge and skills. We’ve established a reading room that’s stacked with books and magazines and really comfortable chairs.
We encourage people. If you want to learn more about marketing or finance or real estate, we have the materials for you, so borrow these CDs or books.
I don’t like to compare it to a family because that’s more sacred and personal, but we spend more time here than with our families, so it’s a culture in which they feel comfortable and know they can have fun, and there are not barriers.
HOW TO REACH: HomeVestors of America Inc., www.homevestors.com
When Robert B. Weltman attends conferences, he doesn’t go for the chit-chat and friendly banter. He’s there to learn, to listen and figure out what the new issues and needs are so that he can convert what he learns into a creative business plan for Weltman, Weinberg & Reis Co. LPA, the 950-employee, $68 million creditors’ rights law firm of which he is senior partner. Smart Business spoke with Weltman about the need for speed in implementing ideas and why it’s important to set a good example for employees.
Delegate. Learn to delegate by having confidence in the people that you delegate the responsibilities to. Lead and guide them where they need assistance. Measure them by how creative and original they are with the ideas they come back with.
I will also measure it by how quickly you’ll get back to me with the first round of responses, and I’d rather have a person pushing me for feedback than me constantly going to them asking for the status.
Look for people that are very busy. If a busy person agrees to take on a responsibility, you know that they’ll complete the task. I like people that ask a lot of questions. I like people that understand, by their body motions and their actions, what the task is about.
I like people that listen and understand the concept of what I’m trying to delegate instead of scribbling down a lot of notes.
Communicate your vision. It’s more difficult to retain the No. 1 spot than to achieve the No. 1 spot.
When somebody is ahead of you, you know what you have to do to pass them by, but when you’re No. 1, you have no one to look up to as to what your goals are. You’re fighting against the invisible giant that is out there.
Continue to do well at what you’re doing, but also realize that others are attempting to achieve what you’re doing. You have to come up with new and better and more creative ways to complete the job that have not been touched upon by other organizations or people.
Implement ideas quickly. Sit down with your most trusted employees or leaders, kick the idea around and weigh out a schedule of what you want to do and how you want to accomplish it.
You have to get started right away. You can’t just sit there and let it linger. Be proactive in addressing whatever it may be. Ideas tend to become stale, and too many people like to say, ‘I’ll get to it when I have a chance.’
To be best at what you do, you must address the idea immediately rather than let it just drift along. Too many people like to procrastinate and put things off.
Don’t let it become a stale idea.
Set the example. I’m not the kind of person that comes in late while the employees are working. I’m not the kind of person that leaves early and lets the employees work.
I get here early and I work longer and harder hours, so I set an example by the way I conduct myself in the office and in the workplace. Being a good leader requires you to do everything, if not more than, what your employees are doing, so they can see that you’re a contributing member of the team.
Don’t rest on your laurels. If you did a good job on something, that was yesterday’s news, so what are you going to do for me tomorrow?
Too many people, when they achieve some level of success, become stagnant and hope that the idea that they’ve created will last indefinitely. Once you create an idea and a product, immediately focus your attention on the next idea or product that you’re going to come up with.
Listen and learn first. When you start at a place, start at the beginning. If it’s a warehouse, work in the warehouse. If it’s an office, do the initial grunt work.
When I started at the firm, I was the lowest employee. I picked up the mail. I put files away. I pulled files, and I did it until it became second nature.
Like any athlete, the way you become good is to constantly do it over and over
again so it becomes second nature. The quicker you learn basics, the faster you can go to the next level.
Be patient, keep your eyes and ears open, and master every part of the job that you’ve been delegated. Know your customers. Know your industry. Know your field. Become a important part of what you’re doing.
Don’t just jump in and say, ‘This is a great idea,’ and have a schedule of when you want to achieve success.
Give a professional product. Too many people are too negative on their ability to accomplish. That’s one of the reasons I’m so sour on the Cleveland Indians — not because they’re losing, but because professional athletes should not perform the way that they’re performing. For the kind of money they’re getting paid and the kind of money we’re paying to support them, we’re entitled to a much more professional product.
I’m the same way in my practice. My clients are coming to me for help. They’re paying me good money to give them help, and I have a sense of responsibility because somebody has come to me and asked for help. I owe it to them to come up with a creative solution for their problem.
Go the distance. Too many people aren’t equipped to run the marathon. They like to run the dashes, and they like to run the relays, but very few of them are prepared to dedicate themselves to be the best at what they do.
The best athletes don’t just wake up in the morning and perform at that level. They work hundreds and thousands of hours behind the scenes refining their skills. If you went to a basketball game, before and after the game, Larry Bird and Magic Johnson and Michael Jordan would be out there practicing.
You say, ‘Why do they have to practice? They’re the best.’ The reason is simple. You can’t be good at what you do unless you’re ready to give the job all of your time and attention to be the very best at what you do.
HOW TO REACH: Weltman, Weinberg & Reis Co. LPA, www.weltman.com
“It appeared that my job was completely unrelated to what these sayings on the wall were,” Rothrock says. “It seemed to me that there should be a connection that if you’re going to make some statements about what you are as a company and what you’re going to be, your employees should be connected to that.”
He vowed that if he ever ran a company, he would create values that employees actually understood and related to their jobs.
Today, as chairman, president and CEO of CompBenefits Corp., Rothrock is doing just that. He joined the employee benefits company in 2003 after its revenue had declined 18 percent in two years. Coming in, he saw employees who were too inwardly focused and caught up in doing their jobs without much regard to customers or how their jobs affected customers.
If he could get employees out of their silos and understanding how their responsibilities impacted other departments and customers, the company could grow again, but that meant overhauling the corporate culture. He thought it would be a quick and simple process but slowly learned that an effective cultural shake-up takes a lot of time and repetition.
“In three weeks I could have gotten the (values) list that somebody came up with in their office that’s the kind that I used to work for,” Rothrock says. “And I’d say, ‘Who thought these things up? Did we talk to anybody? This is out of a book somewhere. Sense of urgency? Customer focus? Well, what does it mean?’
“No one could describe them for you. That’s why I said, ‘Let’s do this right. Let’s take some time. Let’s engage our people and get it right the first time,’ and we have.”
Finding a focus
Rothrock wasted no time in making changes. He brought in outside people he had worked with in the past and whom he trusted to develop values rooted in the employees.
To get buy-in, the changes needed to include the employees, and over an eight-month period, this team spoke with about 60 percent of the 750 employees.
“The culture wasn’t what I wanted it to be when I got here, but still we had good people,” Rothrock says. “Generally, there were good people who were trying, so we started there and evaluated where we were today and offered up some different kinds of values and beliefs and tried them out on people. “They didn’t come in with a textbook answer and say, ‘These are the kinds of things your company should be like. This is what you should emulate,’ with no relation to what was already embedded in some of the folks in the organization.”
Rothrock made sure everyone knew how they related to the new values.
“We spent the time to describe that clearly, so that when people read the poster on the wall, they had a pretty good sense of what it was,” Rothrock says. “We followed up and continue to follow up to this day with providing context ‘Let me describe what I mean when I say this. Let me describe what that means to our customers. Let me describe what that means to my expectations of you. Let me describe how it impacts what you do every day.’”
Employees are taking it to heart. One data entry employee, who corrects problem claims, views her job as a daily opportunity to demonstrate the company’s dedication to its customers. She puts herself on the spot to show other workers how to fix problems so that they aren’t repeated.
She acknowledges that customers come to CompBenefits expecting a high level of service, so by showing others how to do better, she helps them better meet customers’ service expectations so that the customers stay with the company.
With any change, it takes a continual effort to get people on board and moving with you.
“It’d be nice to say I sent a memo out one day, and the next day the entire organization was behaving differently,” Rothrock says. “That’s not the case. It has taken years. I’m surprised. ... It has been, in a word, repetition.”
He started by setting an example leading meetings, explaining business plans and connecting the dots between decisions and values so that employees understood the changes.
“When we succeeded, we pointed back to where in the culture this fit in,” Rothrock says. “When we failed, we were able to show that we were undertaking actions that didn’t line up with any of these kinds of things.”
It wasn’t enough for employees to nod and smile during the evolution, either. They needed to really understand how they affected other departments and to care about how those other departments performed, as well.
“They could be a bad citizen as long as the work got done one way, shape or form,” Rothrock says. “Part of all this is understanding the entire process and understanding that what we do affects our customers.”
To shatter this silo approach, Rothrock explained to employees that for the company to truly focus on customers, every person had to focus on correctly completing responsibilities the first time. The company maintains a 99 percent accuracy rate in claims completion, but that 1 percent of inaccuracy equates to about 20,000 mistakes a year.“Loyalty, or our measure of persistency, is key,” Rothrock says. “When you make a sale, initially you’re making a promise. You’re saying, ‘Buy from us, and everything you want, we’ll do. You’ll be happy with what we do for you. I promise you.’ “That’s easy. It’s during the course of the year when all 750 employees have to make good on that promise have to actually send out a bill that’s right, have to pay a claim correctly, have to answer the phones and provide a high level of service. The real measure of success is this loyalty factor. At the end of the year, when the employer says, ‘Do I renew with CompBenefits ... or do I walk away because they didn’t fulfill my promises ... I’ve been able to bring back to our employees and say, ‘Every one of you have an impact on whether these customers stay with us.’”
As with any change, some people didn’t like it and left. Turnover was higher during that initial transition period, but Rothrock didn’t let the anxiety of losing employees and managers permeate the company. “Every opening was a new opportunity to go out and recruit the kind of people that did fit, that did want to be aligned with our culture, that did want to be aligned with our beliefs,” Rothrock says.
He focused on getting new people with commitment and energy to knock naysayers off the fence.
“Being surrounded with more people that believed and were encouraging, we clearly had a lot of converts, if you will,” Rothrock says. “A lot of people that were initially on the fence ... when they saw new people come in, they said, ‘Hey, I’m going to jump on that bandwagon. I’m going to buy in to this. I can see where we’re headed as an organization.’”
Getting people excited about new possibilities is one thing but ensuring they don’t revert to their old habits is another story. To combat this, Rothrock overhauled management reviews to make them less dependent on numbers and more focused on how managers engage with employees.
Employees also completed quarterly satisfaction surveys about how well they felt their managers did in providing them with training, tools and understanding the values.
Any manager who scored below a set standard received six months of remedial training and tools to become a better manager. After every manager consistently met that standard, Rothrock raised the bar and worked with the bottom five performers, no matter their score, to increase their effectiveness.
“Now you have more managers who are spending more time with their people, making sure their people are doing the right things, are motivated, enthused and working with other departments,” Rothrock says.
Rothrock didn’t want to ignore the frontline employees, either. He wanted to better engage them so they would have a higher level of job satisfaction and stick with the company, creating a sense of comfort for customers.
He instituted product training programs that, once voluntarily completed, allow employees to field calls regarding the product they trained for. Employees can train for several products, allowing them to have a more interesting day by fielding calls on several topics instead of one. They also receive a slight pay bump for each program.
The programs give employees some control over their job responsibilities and pay scale, and CompBenefits benefits, as well, as its turnover rate has fallen by half since it instituted the program.
“People haven’t changed jobs,” Rothrock says. “They’re not demanding to be promoted. They’re not saying, ‘I’m bored. I need to quit and go somewhere else.’ The job satisfaction has increased dramatically.”
Although slow starting, Rothrock now sees the fruits of his labor. Revenue has grown 17 percent over 2003, as CompBenefits hit $323.8 million last year and expects to post $347.5 million for 2006.
“Revenue is the measure of how valuable customers think you are,” Rothrock says. “Are they willing to pay you to do what it is you do for them? Do they see value in it? Did they spend a dollar with you? Did they get enough value back that they were happy to spend that dollar, and they’d spend it again?”
And as CompBenefits continues to grow, it maintains its focus on teaching employees about the values any time decisions are made. Continuing education and training, combined with positive reinforcement, have created a culture of happier employees who are working harder to ensure that the current error rate of 1 percent is reduced so they are rewarded with customer loyalty.
“When we serve them the way they want to be served, they reward us with their loyalty,” Rothrock says. “They don’t go to a competitor, and we build our business that way by having a customer stay loyal to us and begin to build a customer base.”
Rothrock has learned to have patience and stay the course, even if progress can’t be immediately seen along the tumultuous journey because eventually, the rewards will appear. He’s finally reaping his rewards, as the company just earned its largest contract ever, a contract he says it wouldn’t have earned two years ago because of how different the culture was.
“The bottom line is it’s not just nice talk and having people with smiles on their face, but there is a business result that comes from this,” Rothrock says. “I really think that our success and the growth that we’ve had the last year or so is directly attributable to having an organization that is aligned behind a common set of organizational beliefs and a common goal.”
HOW TO REACH:CompBenefits Corp., www.compbenefits.com
Many companies have ‘Mahogany Row.’ In those environments, employees become reluctant to interact with the management of the company, and that does a real disservice to the performance of any organization.
If the management is constantly in meetings and behind closed doors, that’s not very conducive to good communication and interaction. Being involved with employees and having open forums with employees is a key ingredient to success.
If employees see you’re engaged in and active in the business, they’ll do the same.
It’s important that the management of companies work hard, stay engaged and lead by example. I know a lot of CEOs who paint the vision and then go away and let other people execute it. The highest chance of success comes when the management team is fully engaged in executing the vision as well as painting the vision.
The worst thing is to have a CEO paint that vision and then spend 40 percent of the time in the office and the other 60 percent of the time on the golf course, letting everybody else make it happen. It’s critical that the CEO be engaged on a day-to-day basis and continue to evangelize what’s going to happen when we achieve success.
Hire good cultural fits.
We don’t compromise on our criteria for bringing new people into the company. One of the key tests for any new employee is, ‘Are they a good cultural fit?’ It’s critical, as we grow, that (the company’s) culture be maintained.
If you begin to compromise the process and begin to hire ‘B’ players, then the ‘B’ players will begin to hire ‘C’ players, and pretty soon you’ll find you regressed to the mean. ‘A’ players need to hire other ‘A’ players in order to keep us ahead of the competition and in order to have an aggregate work force that is significantly more skilled than our competitors in the industry.
Have a team involved in hiring.
While (the hiring manager) sort of makes the final call, they have to get input from many other people, and we do that in an interactive, open environment.
When people just send in a few notes about what happened in their interview, it’s very easy for a hiring manager to discard flags that may have come up in an effort to get a person in quickly. When you get those people together interactively, if someone brings up a flag about a person, then someone else may jump in and say, ‘I detected that, too, and I was a little concerned about that, now that you mentioned it.’
It’s a great way to have checks and balances on the hiring process. It certainly works on the negative side, but it also works to overcome flags. If somebody says, ‘Well, this flag came up for me,’ another person may jump in and say, ‘I saw that, too, but when I drilled into it, it was obvious why that wasn’t an issue.’
That controls the process and puts the power of group thinking into the hiring.
It’s cross-functional, and it’s typically at different levels. Anybody coming into the company, we would have a number of people at the next level interviewing them, but we also have peers people they would be working with interview them. In the case of managers, we actually have some of the people they would be managing (present during) the interview process.
There’s a recent book out called ‘The Wisdom of Crowds,’ and it speaks to the notion that people come to a process or task with very different sets of assumptions, goals and insights. The kind of thing a person the level above is thinking about may be very different than what a peer may be thinking about.
Having that diversity of viewpoint improves the value of the overall position.
Don’t depend on one person.
As a young start-up company you’re very dependent on particular people and personalities for success, but in developing a larger, more successful company, you need to have an infrastructure that is less or not dependent at all on individuals but is more self-sustaining.
One of the metrics of success as a company grows has to be, ‘Is the company sustainable?’ One measure of the sustainability of the company is that if any given person in that company wins the lottery or changes their mind about working every day, that the company can go forward with the plans that are consistent with the organization.
To get to that sustainability level, you have to create a structure that is increasingly independent of any given person. That doesn’t mean that individuals aren’t making phenomenal contributions because clearly they are, but what it does mean is you have ways of backstopping those individuals should the organization change in either planned or unplanned ways.
They create focus, so it’s important that everybody understands what it is we’re trying tying to achieve. Once they know what the goal is, they can think about what’s the best way to get there.
Those goals are often aggressive, so it creates some out-of-the-box thinking. If you set a goal that’s simply step and repeat, say ‘Get 10 percent better at X,’ then people just think, ‘How can I just nudge something in one direction or another to make it 10 percent better?’ as opposed to setting aggressive goals that may be two or three better.
Then they have to stand back and think much more broadly about, ‘Is there a new way to approach the problem?’
HOW TO REACH: Illumina Inc., www.illumina.com
See the big picture.
Businesses are always going to have challenges and are always going to have problems. If you allow yourself to spend all your time just solving whatever problem is in front of you, you’re going to miss the opportunity to pursue a bigger opportunity that could eliminate all your problems.
There is a risk in a fast-paced business that your operations become disjointed. You have teams making decisions on the fly. You’re moving quickly to keep up with the pace of the business and the pace of the market.
That’s a good thing in the sense that you want your people to be empowered and you want to keep that entrepreneurial culture that was key to your success in the early years going as you continue to grow as a business. At the same time, successful companies need to remain focused on what their core value proposition is and what their mission is and keep priorities in sync. That’s the balancing act.
Remain focused on your core.
It comes back to metrics. I got some really good advice early on that you get what you measure. It took a while for that to hit home for me. What that means in terms of what you do as a leader is rhetoric doesn’t have the power of measurements.
You can give speeches. You can write e-mails and memos and presentations. You can have counseling sessions. But in the end, that’s all rhetoric. It’s words intended to inspire people.
If you really want to influence behavior, the best way to do that is through metrics specific goals that are measurable that you can assign to people. That’s part of empowerment.
People are not truly empowered unless they have the resources they need to get the job done, but also they’re told what success means. The best way to define success is by measurable, actionable, results-oriented targets that allow you to give people feedback and for people to measure themselves and how well they’re doing in hitting the goals you set for them.
If you stay disciplined about measuring how people are doing, that’s going to have a bigger impact on getting the results that you may want to achieve in your business than anything else you can do.
You can’t do everything yourself. That seems to be a challenge for a lot of entrepreneurs.
A lot of entrepreneurs are strong, independent performers that are very good at delivering results on your own, but as your business scales, one person doesn’t scale. If you are on the critical path to results within your business, then ultimately you’re going to hit a ceiling in terms of how large your business can become.
The only way to break through that ceiling is to empower people to do the kinds of things you may have done yourself during the early days of the business.
Communicate your vision and goals.
It’s time-consuming to sit down and write an e-mail or craft a speech or put together a presentation. Mark Twain [is often credited with] having said, ‘I would have wrote you a shorter letter, but I didn’t have enough time.’
It takes time to boil down a message to the point that it’s digestible by the people that you’re trying to reach. As your company gets bigger, that gets more challenging because when you’re growing, everybody is busy.
In this interview right now, what you’re getting is a stream of consciousness response to your questions, but that’s not the most effective way to communicate to a company. I try to take the time to think about, what’s my message, who do I need to reach, what’s the most concise, impactful way to communicate it.
The actual communicating of the message is the easy part. It’s the preparation and the time that goes in to that that really makes it effective. Take the time to communicate.
Get buy-in when pioneering.
The biggest challenge that a pioneer has in a new industry segment is figuring out the recipe for success. If you’re starting a business in a sector that has a long history and has been around for decades, you can typically emulate other businesses that have been successful in that sector.
You can adopt the metrics that they’ve used. You can adopt their business processes. You can hire people who have worked in that sector.
But if you’re in a new sector that’s never been done before, you have to figure all that out yourself. It can be challenging. It can be frustrating for your employees. Employees often want to step in to a job where the goals are clear, the purpose is clear, what it means to be successful is clear from the outset.
We often ask our employees, ‘Help us figure out what the right set of metrics are for this particular situation.’ That’s part of being in an entrepreneurial situation. That’s not for everybody.
If you’re in a situation like that, it’s key when you interview employees to make the determination if that employee has the resolve to be passionate about the cause. If you can communicate to your employees what the mission of the business is, and that employee can get fired up about it that mission and say, ‘I get it. I understand what we’re trying to do, now I want to be a part of helping you figure out how to get there,’ then that employee is probably going to be successful in your business if they have the basic skills that are needed to perform the job.
How to reach: VeriCenter Inc., www.vericenter.com
Hire independent thinkers.
Hire good people, empower them and let them do their thing. I look for people who don’t necessarily always agree with me.
I look for people who have strength and conviction in what they believe, yet who are willing to, at the end of the day, go along with what the group decides.
Correct hiring errors.
There’s always a tendency to make the job fit the capabilities, but it usually ends up with having to replace the person. Try to give the person the benefit of the doubt.
You coach them, and you give them time to see if they grow in the job. Once you decide that they’re not going to, then you have to do something else.
A lot of times you find that there’s another position within the company that they’re more suited to. In the process of deciding that someone is not going to be able to do what you thought they could do, you see everybody has strengths and weaknesses. There aren’t any perfect people. In the process of identifying what they’re not capable of doing, you see what they are capable of, and a lot of times it turns out to suit the need better than the original one.
A lot of times it’s a get-out-of-jail free card for them because they’re not happy. Most people want to be successful in what they do. It’s more of a driver than compensation is just the idea of your self-value and feeling like, every day, you accomplish something.
It pushes decisions back to them and gives them a great deal of headway. When they make decisions that aren’t necessarily what I would make, I don’t punish them for it.
I may go to a manager and ask why they did something or how they evaluated that and what their thought process was, and try to share with them another perspective on it something that they may not have considered. Maybe it was outside the range of what they’re aware of. For the most part, [it’s] letting them make decisions and supporting them, good or bad.
One person can’t make all the decisions. My big job, in terms of management, is to make these other people successful. The way to do that is for them to learn from the good and the bad of what they do.
Make employees happy.
Keep sight of the fact that there are a lot of people in the organization, and a lot of different needs and wants. Try to keep everything focused on your own people, because if they’re happy, they’ll treat your customers well, and if they’re not, they won’t.
Ease people’s growth fears.
Every company has some up and down cycles, particularly a fast-growing company. It will go through a period of really rapid growth, and it will bring on a lot of folks, and then the growth settles out, and you end up having to readjust personnel levels and jobs and changes.
When you go through one of those cycles of having some reductions of force or reorganization, that kind of change brings a company down. What we’ve done over the years is focused really hard on the employee relationships in terms of company parties and picnics, doing the little things around the office bringing in lunches, taking everyone to the ball game.
We really focus hard on that to counterbalance the fear that ‘I’m going to lose my job.’ In general, it’s fear of the unknown that’s the biggest drag on a company’s growth.
Watch your emotions.
Never let them see you sweat. You can’t let the people that work for you know that you’re concerned, even though you are concerned and you are worried, and you’re making decisions you’re not 100 percent sure of.
You have to keep a good attitude. It starts from the top and goes all the way through the organization.
I can see it in stressful times. We went through a period of time where there was some litigation going on, and it was very stressful for myself and the CEO, and you could really feel it out in the organization just this stressful sense all the way out from the people inside to the salespeople.
At the same time, when those things get behind you and you get on a roll and you’re setting records for sales, and I’ve got a bounce in my step, it just goes on through the organization as well.
A lot of people pay lip service to communicating in top-down, bottom-up type of stuff, and they will communicate once and then expect that to be it. You have to circle back and re-communicate over and over again.
We had a period of time when we lost a product line we had for a long time it was 50 percent of our revenue. We had to adjust and make changes. We had always had quarterly company meetings, but at each of the quarterly meetings for the next year or year-and-a-half, I went back over everything that had gone on since we lost those lines.
I know it was saying the same things over and over again, but it gave them comfort to circle back and see, ‘Yeah, this is what happened to us, but even though this is what happened, this is what we’ve done and been able to do,’ and kind of spread the optimism a little bit.
It has to be communication, but it has to be repetitive communication, because communicating change, it won’t stick with them. Not that they don’t remember it or don’t understand it, but when you communicate it, it relieves the anxiety, but the anxiety comes back, so you have to go back and address it again.
HOW TO REACH: HADCO, www.hadco.net
Care about your people and let them work.
Everybody has good people even the worst companies have good people.
I don’t think I’ve gone into a business and said, ‘Wow that guy is an idiot. Boy, she looks stupid.’ No, people care about what they do. Not all, but a high majority of the people work hard and try to do a good job. All you have to do is let them.
The question is, how do you get the most out of those people? Give them a job they like, that they have passion for, give them an organization that gives a darn about them, and get the heck out of their way.
People talk about how people were the key, but most didn’t realize the key wasn’t the people. The key was what they, as CEO, did to allow the people to be the key, which is really different.
Mold younger minds.
Mentoring is important. I’m 60 years old and have been through a lot of different things.
Although I don’t think I’m particularly bright, I’ve run into some of these issues before, so I know how to handle them. To pass that information along to people, it’s amazing to see the light bulb go on above their heads.
We have strategic meetings where we say, ‘OK, where are we going, and what are we going to do?’ and listen to what everybody has to say, and we argue about it.
We used to take all the vice presidents out, get locked in a room for two or three days and come back and announce this great idea and be surprised (if) 20 or 30 percent of it would get accomplished.
When we bring 40 or 50 people to a meeting and we hash out each person’s vision and we pick and choose from these visions, you’d be amazed how much that buy-in changes the culture of the company and the attitude of the people that are trying to accomplish that vision or strategy.
If you give me an idea, and I like it and everybody else likes it, you’re going to bust your back to get that done. It’s part yours, so you have buy-in.
They were part of the solution, and when they are part of the solution, they jump on board and make sure it gets done. It makes a huge difference.
Think beyond a job description.
A job description limits your scope. You’re an engineer and a marketing idea comes to you well, its not part of my job. Bullshit! Bull it is part of your job.
Every idea is part of your job. When I do job descriptions, I make sure they’re wide, so somebody that has a passion can switch over to something else and do a little of that, too.
There’s people we move from one department to another because we saw that they were doing an OK job here, but boy, these ideas in marketing are sensational. You change the place on the bus, and all of a sudden they go from a nice producer to a superstar.
It’s important ... to sit down with people and listen to what they have to say. Now I listen more.
As you get older, you’ve learned a lot, you’ve been there, so you spend a lot more time working with your ears than with your lips. People will tell you everything you want to know if you just listen and ask a few questions.
Don’t search for one magic bullet.
Most people think there’s a magic thing to do to your company to sell more product or become more lean. There isn’t.
Every corner of your business is a way to make you 1 percent better. Whether it’s using ... a new marketing campaign or a better way to do procedures or a new product, that will make you 1 percent better, but it won’t make you 100 percent better or 5 or 10 percent.
All these things are no better than 1 percent, but if you do all of them, that’s what makes for a successful company. Do not depend on any one thing to save you or to make you successful.
There are no seven highly effective habits of a successful person. There’s a hundred habits of a successful person. Your habits may be different than somebody else’s. They both can be successful. It’s foolish to believe that one thing can solve it.
Instill the value of teamwork.
Every Friday, all the individuals write a report of what they did during the week. If you spend more than five minutes doing this, you’re chastised. The idea is, ‘This is the highlight of the week’ one line, two lines ‘By the way, this person really helped me this week, and I want to give them a penny.’
When people give another person a penny, they value that person, and it comes back to them. It doesn’t necessarily come back to them directly, but it may come back in a roundabout way. You, as a company, are patting somebody else on the back, so it makes it a much happier company.
Be a strong manager.
One of the questions I ask when I’m hiring a manager is, ‘What do you expect out of your employees?’ They’ll give you a list of different things.
‘What do you expect out of me?’ Nine times out of 10, those will be different, and they shouldn’t be. They should be the same.
I’m looking for somebody who helps other people get better, who sets certain goals for people and helps them attain it.
HOW TO REACH: Dimension One Spas, www.dimensiononespas.com