The old cliché says steering a large organization is like steering a ship. But steering an ocean liner on the open water might actually be a simpler task than what Laurence Merlis needs to accomplish.
As the president and CEO of Abington Health, Merlis is charged with steering a medical system comprised of 6,000 employees spread across two hospitals, two major outpatient campuses and 57 physician sites.
Merlis has to promote and enforce a uniform set of standards and values for everyone, regardless of where they work in the Abington system. To do it, he needs a vision, and he needs the vision to be clearly defined and communicated to managers and employees who understand their role and how it helps the system accomplish its overarching goals.
“Everybody has a part to play, leaning forward and recognizing day in and day out that we can move toward our vision if we’re clearly aligned,” Merlis says. “We need to recognize that there is a connection between the parts people play in their daily tasks and the work we do to ensure the very best outcome for patient safety and service, while at the same time ensuring that we are efficient and effective.”
Merlis wants everyone at Abington to visualize what the medical system can be when it realizes its full potential. In the highly competitive Philadelphia market, in which patients have numerous options when seeking medical care, Merlis wants Abington to be the go-to system for area residents, known for high standards regarding service, technology and safety.
Visualizing that outcome starts with Merlis, and must cascade down from there. That’s where a great deal of the work occurs. Merlis realizes that he needs to be a visionary, but even more than that, he needs to be a unifier.
“You do need to be able to visualize the concept of what you can be as an organization,” he says. “You start really thinking about tomorrow and how has to be inspiring for everyone. But it has to be understandable, we have to stretch for it, and we have to make sure that the messages are crisp and simple and something that becomes compelling in terms of what our purpose is and how we can rally support to achieve that vision.”
Start with leadership
Two of the most critical things a leader can do when formulating and promoting a vision is to listen and measure. It’s something that Merlis has made a top priority at Abington. He wants his leadership team to get input on the future direction of the organization from all involved stakeholders — the board of directors, physicians, medical staff, office staff and support staff. Then, once the vision and strategy are formed, he manages by what he can measure and communicates that data back to employees to facilitate an ongoing dialogue.
“You need to make sure that you can measure and manage work, and that you are not setting strategy or policy by anecdote, but that you are setting it by fact,” Merlis says. “You need to be sure that you are measuring yourself by what you said you would do.”
When a strategic initiative is set, Merlis and his leadership team keep tabs on metrics within that initiative, and disclose the results to the employee population. He wants to keep the entire work force engaged in the process and also empower employees to hold management accountable for their leadership decisions.
“We have metrics within each of our major strategic intents,” he says. “We share that in an effort to stay as transparent as possible. Since one of our core values here is patient safety, we’re very public with where we are day to day against what we call ‘serious safety events,’ because that is a critical metric for us. We have other patient safety initiatives around the effort to reduce infections. It might be something as simple as the number of our staff who received a flu vaccine.”
Merlis wants the staff involved in measuring progress against the vision because they are the people at ground level each day. They have a front and center seat for what is going on in the facility corridors, and can offer real-time advice on improvements that can be made.
“Our philosophy here is the staff are experts in how to get things done,” Merlis says. “We look to them for advice and recommendations on how to make things better when it comes to making ourselves a place for patients to receive care. We need to constantly look at all of our processes, work on them and continually find ways to make them work better. It all gets back to execution. You need to get the results needed to achieve your vision. You can’t confuse effort with results.”
Stay on message
Rolling out a vision is great. Receiving input from your staff on the vision is even better. But what about after the initial push is over? You need to keep the momentum going and keep your people interested in continuing to achieve the goals you originally set.
At Abington, Merlis has learned that keeping a vision fresh within a large organization takes a combination of front-and-center communication and subtle reminders in the day-to-day details.
The details can be as small as a pocket-sized card.
“We have what we call an ‘E3’ card, which stands for ‘engaging every employee,’” Merlis says. “Every employee has a card, and on that card are the three things they can do to help us move our mission and vision forward.”
The more direct reinforcement comes in the form of, among other things, patient feedback. Like many health systems, Abington uses the stories of successful patient treatment to inspire, and any negative patient feedback is analyzed for ways to improve policies and processes.
Regardless of who is receiving the message, Merlis and his leadership team don’t do a great deal of tailoring the message to a given audience. Whether the message is meant for physicians, nurses or food prep staff in the kitchen, everyone receives it in similar fashion. Though some large organizations believe in crafting the message to meet the needs of a certain audience, Merlis says it’s more important to keep everyone on the same page and eliminate any chance of a message getting muddled or completely lost in translation.
“We don’t shape the message,” he says. “We share with everybody what the issue is, what the strategy is, what the goals are moving forward. We want to make sure that we clearly articulate the behaviors we want, the behaviors we need to exhibit, so that it can resonate with every single person and show them the part they do have within the system. The size of our organization, with 6,000 people and multiple facilities, is why we need consistency. It creates different challenges in terms of making people feel connected.”
Build your team
With a well-defined vision comes the need to continually look for people who can help promote the vision at all levels of the organization. At Abington, much of the interview process for many positions focuses on whether a job candidate has the competencies needed to support the system’s mission and goals.
Merlis calls it “behavioral-based interviewing.” He says the essential skills needed for a job are going to be present on a resume, or they aren’t. The technical requirements are a mere means to getting in the door for an interview. Once in the door, it’s up to Merlis and his team, as well as the interviewee, to figure out whether there is a cultural match.
“What we’re looking for are people whose behaviors will exhibit and support our values,” Merlis says. “To get to that stage, we’re already looking for people who have the right skills and competencies. The skills are the hurdle to get into the interview. The knowledge and the background, their experience, those are all things you can pick up in their CV and references. But you really want to be interviewing for the level past that. You want to know if they can be the right fit based on those leadership competencies and behaviors, what you know you need to have in order for a person in that position to be successful.”
The way to drill down and find the best possible match is to ask specific questions in the interview process. Merlis says you want examples of ways in which the job candidate has exhibited the cultural qualities you want in an employee.
“You’re asking specific questions to elicit examples of where their behavior and prior experiences support the values that you think you need for this particular position in the organization,” he says. “It’s a given set of competencies for each position. But you’re always looking for people who can manage a vision and a purpose, people who manage ethically in terms of honesty and integrity, people who manage by engaging their staff. You want people who have great interpersonal skills and are focused on results.”
And once you’ve found the right match for the position, you need to let the person do his or her job. As long as the employee is doing it well, you should be able to trust that he or she is on the same page with regard to the vision, will live it and help promote it.
“When I got here back in 2009, we already had a team that was excellent,” Merlis says. “If you have that, you want to give people the freedom to do their jobs. You want somebody who recognizes that they’re going to be a part of a team. We define success as the success of the team. And you want people to be self-aware so they learn.”
Ultimately, you are defining the roles and the rules of engagement. Beyond that, you want to see your best and brightest show their stuff, which means letting them do their jobs and promote the vision, mission and values in a way that plays to their strengths.
“Everyone has to be committed to the goals of the team,” Merlis says. “You have to have the right mix of skills, and you really have to have a sense of holding each other responsible. We want the team to understand, based on the project or issue, who is responsible, who is accountable and who they need to contact for support.
“Another big key is continuing to create a safe environment, meaning an environment where people feel safe to raise issues and follow up. You’re going to need to have crucial conversations or confrontations at some point, but you promote the culture by doing that in a positive and respectful way. You want your people to be able to handle conflict yet move on, a team that has a sense of spirit and can support each other.”
How to reach: Abington Health, (215) 481-2000 or www.amh.org
The Merlis file
Born: Bay Shore, N.Y.
Education: Bachelor’s degree in biology and psychology, Union College, Schenectady, N.Y.; MBA, George Washington University
First job: I taught waterskiing for a summer after my freshman year in college.
What is the best business lesson you’ve learned?
What is critical for anyone to be successful is to not act outside yourself. Be true to who you are. Be genuine and sincere.
What traits or skills are essential for a business leader?
First and foremost, ethical behavior. You absolutely must lead with honesty and integrity. You need to be approachable. You need to be willing to lead and make difficult decisions and be self-aware of what you can do better. Just constantly look to improve.
What is your definition of success?
Success could be defined as making sure you make a positive difference in the lives of others, while achieving goals to bring the organization closer to its vision. You want people to be moving forward with you and, ultimately, leave the organization in a better position than when you first arrived.
As the CEO of LG Chem Power Inc., which supplies lithium ion batteries to the auto industry, Prabhakar Patil is dealing with constant change. As the auto industry shifts toward more reliance on renewable energy sources for vehicles, Patil must keep his company ready to answer the challenge.
It became particularly evident in 2007, when Patil’s company began rolling out prototype battery packs for GM.
When we got started with GM, the original announcement came out in April of ’07,” Patil says. “The first prototype pack had to be delivered by October of ’07, which was a very short period given that the first time we were doing a battery pack of this size and magnitude, for a plug-in application.”
To address the needs of the evolving auto industry, Patil needed to keep everyone at his $25 million, 150-employee company focused on a well-defined mission and set of goals.
Smart Business spoke with Patil about how you can adapt to change by putting your company’s foundational principles at the forefront.
How do you get people on board with these new ideas and concepts?
People recognize that we are sort of fortunate to be in the position that we are in. There is a fundamental transformation that is taking place in terms of what I call the transportation paradigm, shifting from internal combustion petroleum-based engines to more electrified vehicles. Not that the transportation industry is going to roll over to all hybrid vehicles anytime soon, but there is a basic and fundamental shift that is going on. To be part of that is indeed sort of a privilege and, in some sense, luck that we area in the right place at the right time. We have to do everything to make sure it is successful. What would make the opportunity go bad more than anything else is if it disappoints the customers when these vehicles are on the road, and that is something that none of us want to be responsible for.
What would you tell other business leaders about relating the goals of the company to employees and their individual work?
It is figuring out a way where you personalize the relationship between the job and the person. Sometimes, it can be an intellectual kind of connection but is much better if it becomes a more visceral connection, where people internalize the significance and importance of what it is they’re trying to do, because of the impact that it is going to have either on their own lives or on the family that is going to be using the product or on making a fundamental change in the technology. You have to find a nobility of purpose, something that people can relate to, something that people can say, ‘This is critical, painful though it may be for the hours I have to put in. This is something we have to do and do right.’
How do you find nobility of purpose in a company’s mission?
In our case, it was relatively straightforward to
do. It’s seldom that you get a chance to do something that is good for the environment, for the country, for the community. In many ways, what we do is our opportunity to address the environmental issue as well as the energy security issue.
Does your own visibility and accessibility in the organization help to reinforce the mission?
It is doing it by example. I encourage suggestions and ideas, and I encourage our team leaders down the chain to have that kind of accessibility to their teams. For example, just looking at the subject of quality, once they see the due diligence, time and effort that is put in to not cut corners, I think that communicates the message more than anything else that quality is an important subject for us.
How to reach: LG Chem Power Inc., (248) 307-1800 or www.compactpower.com
There really wasn’t a battle plan for what Brett Healy faced in 2009.
Healy is the president and CEO of Webasto Roof Systems Inc., a company that supplies sunroofs and other roof systems to auto manufacturers. Like just about every other auto supplier, Webasto was dealing with automaker bankruptcies, downsizing and reorganization, and the cascading effect it was creating throughout the industry.
“It involved lots of things that you weren’t going to find in a Harvard Business Journal review,” Healy says. “As we rolled into 2010, it was basically a matter of trying to keep people motivated, because people were very unsure about the environment. People needed to remain motivated around the idea that we still had a viable company, keeping them on task and focusing on getting back to normal business volumes.”
Motivation was a key aspect. Healy and his leadership team had to spearhead a period of consolidation in the company’s head count and plant capacity. Between 2008 and 2009, Webasto Roof Systems— the Michigan-based arm of German vehicle component manufacturer Webasto AG — had to remove three plants from production and reduce head count by 200.
If there was any good news, Healy had begun the consolidation ahead of the economic crisis, so he already had a plan in place for reshaping the company’s future. But when the crisis hit, it took Healy’s methodical plan and turned it into a scramble.
“I took this role at the beginning of 2008, before anybody even recognized a serious crisis was coming,” he says. “Just sizing the company, I knew we were heavy in terms of capacity. We had low capacity utilization in some of our plants. One of our consolidations was executed in 2008 in proper order, but as things started to deteriorate in 2009, we took a plan that was going to take about three years and had to accelerate it into about nine months.”
To get his people motivated, Healy had to restore their faith in the present. To keep them motivated, he had to build a better future.
As he started down the road of navigating his company through the darkest days of the recession, Healy had to take the most difficult step first. He had to admit to his people that the financial crisis was unprecedented in its scope, and management was getting an on-the-job education just like the work force.
In company meetings and his president’s round-table forum, which Healy holds monthly, he had to face his people with a combination of confidence and humility. He had to be a leader, but he had to admit that the company was sailing into uncharted waters.
“They were asking questions like, ‘We just had a layoff, is there going to be another layoff? Are there going to be any other plant closings?’” he says. “They saw that two of our customers (GM and Chrysler) went bankrupt and wanted to know what that was going to do to us. Those are three loaded questions.”
When faced with answering big questions about your company’s future, you really only have one recourse. You have to tell the truth, and do it without mincing words.
“We told our colleagues that we’ve never been through this before,” Healy says. “We’re checking with other people to see if anyone has information on how this happens, and based on our own knowledge of the business, we’re going to do A and B. And if that works, that’s fine. But if it doesn’t work, we’re going to try C and D. So you simply show your people what you’re going to do. There are companies that tend to have a culture of secrecy, and I really don’t subscribe to that. When people don’t know what is going on, they have a tendency to use their imaginations, and they can imagine things much worse than they really are. During that whole time, we remained focused on making sure everyone had the facts, and the facts were changing very quickly.”
Healy wasn’t trying to sugarcoat the situation, and he wasn’t trying to force his company to wallow in grim reality. What he wanted to do was give his people an accurate reflection of the challenges the company faced, then immediately get everyone focused on solutions to pull the company back to growth mode.
“All is not perfect,” Healy says. “I wasn’t trying to paint a rosy picture, but if you just keep talking to people, it does work. Whether you’re the janitor or VP of engineering, with us you’re going to hear the same exact presentation of our plans and objectives for the year. We had cards made up that put the corporate focus on one side and on the other side, we had our quality actions that drive success. We talk about this in great detail in our first company meeting of the year, and it will be the lead in our company meetings for the whole year. We’ll talk about how we’re doing compared to our corporate focus for 2011 and how we’re doing against the things we’ve been talking about.”
Form a strategy
In any crisis, you need well-defined strategy for the future, aimed at helping your company’s recovery. At Webasto, Healy used industry forecasts and data to formulate a strategy and give his people goals to pursue, both in the short and long term.
“We’re very data driven, because in the automotive world, there are some very good forecasting services,” Healy says. “We started our planning process by triangulating various forecasting services’ projections of volumes. From there, we already knew the projects we had been awarded, and we had a good idea of the projects we’re going to focus on in the future. That is the beginning of the business planning cycle. There are also some other items that go into that, in terms of buying behaviors, customer shifts in desiring various vehicle options, but basically, we start with a projection of what the volumes are going to look like and hone our strategy around that. It’s a five-year plan, and it goes into hyper-detail for the year that you’re in.”
Healy and his management team project their plan out as far as 20 years, though it’s a broadly defined direction at that point. The plan then comes down to 10 years, which is defined a little more, to five years, which gets into planning specifics and, finally, the well-defined one-year plan.
“The one-year plan is set in stone,” Healy says. “But as much as I say it’s set in stone, you still need the ability to move and adjust. It’s just that when you move and adjust, make sure your modifications are still within some guideline of business practice, so you don’t blow your brains out on any of your particular metrics.”
In a crisis mode, when dramatic change is often necessary, it can be difficult to decide where to remain steadfast in your leadership approach and where to change. Though you might be tempted to say you need to remain steadfast on matters of culture and mission, Healy says your budget is another good place to remain rock steady. Any plans you make will need funding to become reality.
“We’re sticklers for cost management and cost control,” he says. “But things change. Literally, by Jan. 2, something has already changed. You have to adapt to it but stay within the guidelines of your business plan. A great example would be capital budgets. We have not exceeded the capital budget plan since I’ve been running the company. To me, it’s pretty simple. It’s like a household budget. You only have so much money to spend, and if something changes in the environment, you have to reprioritize your expenditures. The new widget machine we desperately needed becomes a third priority because something with the ability to generate more growth and EBIT for the company has taken priority.”
When planning your company’s next set of moves, it’s OK to take a little bit of time, ponder the various scenarios and gather input — as long as the pause for research and introspection results in definitive action. Healy took decisive action to plan and communicate with his people. Without that action, his company’s confidence in him would have waned, and he could have become a less effective leader.
“What I have learned is that there is such a thing as acting too fast and moving too fast,” Healy says. “When I took this role, I always told myself that the most important thing is to be decisive. I still feel that is the most important thing, but I have learned over the past three years that it is OK to take a day to ponder something. I don’t think it’s OK to ponder for weeks and months, because people still expect you to act. A company is like the economy. It functions well when there is confidence. Confidence comes from people looking to the management team and feeling that these people know what they’re doing, are agile and decisive, and are looking out for them and the interest of the company.”
Creativity is another key to crisis management. At Webasto, Healy tried to get everyone thinking about new ways to do things. He wanted everyone in the company to get into a problem-solving frame of mind. He wanted people who were willing to constructively challenge policies and processes. In one case, a responsive work force saved Healy a significant amount of money.
“We had quoted a project where a new mechanism was going to be required that was a pretty expensive investment,” he says. “The original review from our engineering department said it has to be new because eventually existing systems won’t work. But some of our colleagues outside of engineering challenged that paradigm and asked the test department to run a part with this existing mechanism on it. The test ultimately validated it and ultimately found out that the paradigms the engineering department had were not really accurate in that regard. It saved the company about half a million dollars and it used carryover standard parts.
“In that scenario, nobody did anything wrong. Engineering did what they were supposed to do. They followed the standards that had been set. But we had some people who embraced the idea of creativity, and we really try to promote that kind of thing.”
To promote it, you need to ask for it, keep asking for it and applaud it when you see it.
“We’ve got a long way to go to continue promoting creativity, but it starts from my level with a culture where that sort of thing is applauded when we see it. Whether it’s large or small, it needs to be recognized as a behavior that is appreciated in the company.”
It’s an approach that helped Webasto Roof Systems rebound to $380 million in 2010 revenue, up from $250 million in 2009.
“You always have to go back to what is important,” Healy says. “Go back to the basics when things get a little weird or a little cloudy. Just go back to the basic premises of the business and the values you are trying to promote. It’s really not that complicated. I think a lot of managers make it more complicated than it has to be.”
How to reach: Webasto Roof Systems Inc., (248) 997-5100 or www.webasto.us
The Healy file
Born: Evansville, Ind.
Education: Business degree, Michigan State University; executive management training at the Fuqua School of Business, Duke University
First job: I’ve been working since age 12, when I worked on a horse farm, taking care of the property.
What is the best business lesson you’ve learned?
I’ve worked for five or six managers in my career who were very influential in my creation as a CEO. I wouldn’t say all five were positive. I’ve learned as much from the negative traits of my managers as I have from the positive traits. I’ve learned not to take yourself too seriously and open yourself to criticism. If people are telling you something, it’s probably true, and you have to adjust the dials on your approach.
What traits or skills are essential for a business leader?
No. 1, common sense. No. 2, a sense of humor. No. 3, a keen interest in the company and the people who work there. No. 4, the ability to look at things through others’ eyes. And No. 5, an interest in a balanced approach to short, mid- and long-term objectives.
What is your definition of success?
The feeling that I enjoy what I do, that I made a significant contribution, which allows me the rewards to live outside my business life as to what I need. For a family, it’s the same thing. Balance and a priority to raise my kids the right way, teaching behaviors and expectations, and a partner in my wife aligned on the same channel of expectations.
In the early days of his business, Carmen DeLeo’s company relied on word of mouth.
CDM Electronics, where DeLeo is the general manager, needed customers to tell other prospective customers about the company’s line of computer components. But as the company grew to $20 million in 2010 revenue, its marketing needs became more complex, and DeLeo needed to carve out a presence on the Internet.
“It was an easier transition for us when we were looking into online, because we felt we were already technically savvy, and the good learning curve would be shorter,” DeLeo says. “That was the impetus for getting that going.”
Smart Business spoke with DeLeo about how to conceptualize the website and online marketing strategy that will fit your business, and how to find the people that can help you make it a reality, and enhance it as the needs of your business grow and change.
Out of all the options, how did you narrow it all down to what would work for your company?
The way we did it was to forget about online for a second. We put ourselves in the position of engineers and technical buyers, who are our main customers. They’re the ones who are going to fit the profile for us. Some of the things they would come to us for include specification of part numbers and drawings. The way we decided to build this was figuring out what our customers need, so let’s try to get as much information on the site as we can, and we can make it a 24-7 part of our customer service.
What would you tell other leaders about formulating an online strategy?
First is, you need to put yourself in the position of your customers, how your customers see it. Number two would be content. If you supply the site with as much content as possible, it is only going to help serve your customers. We’re still very early in that the computers that are doing these rankings of the value of your website are still extremely rudimentary. At sites like Google, it is obvious humans don’t review the results, but they still do a remarkable job of returning what is relevant. Even having an ugly site with content is still better than a website with no content on there. If all you have is an address and a little bit about the company, it’s not going to do you much good.
However, the third thing is the look of the site. Once you do get a human to view the site, you want to make sure it portrays the image that you want for your company.
What would you tell other leaders about finding a technology partner to work with?
For us, what we did was we reviewed the old traditional methods – so industry sources. Probably the best thing to do would be to go to an industry trade show and start talking to some of those. You can get a couple hundred companies in one shot, all in your industry. Most of the time, you can find someone who has been through exactly what you’ve done and is willing to help. It is networking. That is a great way to make it efficient.
How can you make sure your online strategy aligns with and complements your overall business strategy?
Results would be what to look at. After six months’ time, did we achieve the results of what the overall strategy is? Part of our strategy is to hit bigger OEMs and target larger and more technical projects. After a few months, we started to see requests to come in from those types of individuals. Some patience is required, but I’d say in a relatively quick time frame, certainly less than a year. Otherwise, that would be a red flag, because things do seem to happen fairly quickly.
How to reach: CDM Electronics Inc., (949) 250-1525 or www.cdmelectronics.com
Steve Plochocki knew that now was the time to strike.
It was February 2009, and the federal government had just passed the American Recovery and Reinvestment Act. The stimulus bill allotted $60 billion to assist health care businesses in improving technology.
Plochocki is the CEO of Quality Systems Inc., which provides software and electronic medical records to doctors and hospitals. With billions in stimulus money about to be injected into the health care industry, the market was about to grow like never before. And Plochocki had to position his company to take advantage of the new business, and do it before the stimulus bill became active this past January.
“The stimulus bill was great news for us, but we needed to create an operating model that we would be able to deliver on, and have products certified, in time for January 2011,” Plochocki says. “It was something I was going to be doing over time anyway, but the beauty of the stimulus bill was that it shifted everything into overdrive and forced us to get those pieces in place very quickly. I used it as a catalyst to get where we needed to get to anyway, but get there faster.”
The solution for Plochocki was to reorganize the company into four separate operating sections, each with its own leader and each responsible for developing new products that could help Quality Systems and its 1,560 nationwide employees capitalize on the five-year stimulus window, which lasts through the end of 2015.
“We needed to create that type of organizational structure, our president became our COO, we put marketing and sales plans in place, we expanded our sales organization by about 40 percent, and we formed implementation and training teams. We were able to put all of the support and mechanisms in place for what we believe is going to be a very strong five year run for us.”
To better serve the company’s various markets, Plochocki and his leadership team divided Quality Systems into an ambulatory unit, which focuses on developing technology for small facilities, clinics and physicians; a practice solutions division, which focuses on revenue cycle management, billing and collections; the inpatient solutions unit, which focuses on hospitals; and a dental unit.
“All these units had been operating in a fashion of togetherness, but none of them were getting the right type of attention,” Plochocki says. “This setup enables us to create a leadership head at the helm of each one, with their own sales, their own marketing, their own development capabilities, their own initiatives for certification and their own financial analysis support teams.”
But before he could move forward with the new organizational setup, Plochocki needed to show his people the field they would be playing on. He needed his managers to understand the stimulus bill, the bill’s goals and where the industry could be at the end of the stimulus window.
“We put the plans together in a collaborative process,” he says. “Through that effort, we were able to realize the importance of having that division element in our organization. Once we understood with greater clarity exactly how the stimulus was going to work, what the government’s desires were and where they wanted to see the software medical records sector in five years, we brought our leadership team together and laid everything out on the board.”
Plochocki and his leadership team had a series of strategy sessions to help everyone in the company gain a better picture of how the stimulus bill would alter the health care technology market, and the ways in which the company needed to change in order to answer the needs of the new market.
“You lay out the market, you lay out the circumstantial opportunities, you take a look at what you have and where you want to be,” he says. “It was a typical planning process where we had all the different functionalities of the company represented.”
Plochocki also wanted to foster ongoing collaboration among the business units. Each unit was to have its own specialization, but in the interest of improving customer prospects for all units, Plochocki wanted everyone in touch with each other, regardless of their area of specialization.
“Every one of these product lines can be provided as a group to the customer,” he says. “So each one of these business units has a core team of their own specialists, and then we have a hundred salespeople who sell all the products.
“An example would be, if I am a specialist selling hospital software to a hospital, and they have an interest in revenue cycle management, then I can bring in the revenue cycle management specialist to work with me on creating a packaged opportunity for them. And there is money in it for both of us. I put incentives in place to make sure that if they can build or expand an order, they go do that.”
Build a winning team
To implement a system with business units that are independent yet collaborative, you need people who can realize the vision of what you are trying to create.
Plochocki, who played quarterback in high school, says it’s not much different from sports: The team with the best players is usually the team that wins.
“Finding the right people for your organization is always going to be a very key feature,” he says. “Everybody in our organization knows that when I go to fill leadership positions, one of the most important things to me is chemistry. To me, chemistry means having people who are good listeners, who have a general bent toward collegiality, they are more homed in on encouraging processes rather than discouraging processes, and they have an overall positive attitude. If you can bring the right group of people together with the right skill sets affixed to those personality traits, you’ll find that you can move processes along rather quickly.”
It’s all about learning the people that you’re working with, and learning what motivates them to do the best possible work, and using that knowledge to play to everyone’s individual strength.
“When I was playing in high school, the coach told me, ‘As the quarterback, you have to try to use everybody around you to win the game,’” Plochocki says. “You have to use the players around you to win the game. My coach wasn’t going to judge me on my statistics. He was going to judge me on wins and losses. It’s the same way running a business, which is why you have to get to know the people around you and try to bring out the very best in them.”
The button you push with a highly motivated employee is not the same as with an employee who might have the talent or skills to be great, but lacks the confidence.
“You fuel the energy of the first one and build the confidence – and your confidence in them – with the second one,” Plochocki says.
But in order to grow your people as professionals, you also need to have their trust. You build trust through all of the principles of good management, like honesty and integrity. But you also build it through engagement.
As Plochocki and his leadership team were going through the process of restructuring the company, they also made it a point to find opportunities to engage employees in shaping the company’s future. If employees feel like they’ve had a hand in building the new version of your company, they’re much more likely to buy in and remain on board for the long haul.
“It usually takes a few meetings for them to realize that you are genuine about it,” he says. “But after a while, if you stay consistent in your messages, the ground troops will start to feel a bit more empowered, and they’ll feel like management really does want to know what they have to say.”
One of the Plochocki’s first projects upon taking the CEO job was to set up a president’s advisory council, which serves as a vehicle for employees throughout the company to offer input and suggestions to upper management.
“One of the very first things we did was change our logo,” he says. “We were going to change our logo and get a new lobby sign. As part of our new organization, we were going to give our company a whole new look and feel. So instead of going out and hiring some marketing or consulting company, I opened up the opportunity to the organization. I said, ‘You folks have built this company, you know this company better than anyone. I want your suggestions and recommendations as to what our logo should look like, the way our company name should be displayed, and when we decide a winner, there will be a cash prize affixed to it.’”
Plochocki says the response to the logo initiative was substantial, and he accomplished exactly what he had set out to do. Employees throughout the organization were involved with management on a project.
“We had so many entries,” he says. “People became so engaged in trying set the new company look and logo, we had more things coming in than we could even deal with. I had to expand the committee to review everything, and the logo we have today was designed by a software developer in the company. You develop another flavor for your organization when you behave that way.”
Moving forward, Plochocki says Quality Systems is well-positioned. The company began the stimulus window in January with all of its products certified to comply with the stimulus bill, with all four sectors in growth mode, 2010 revenue of $292 million (up from $245 million the year before), and a well-stocked pipeline for new business.
“We have a fixed time to benefit from this opportunity, which means we have to get things going on the front end of it,” he says. “Necessity is the mother of invention, but in this case I’d say necessity is the mother of urgency.”
From there, the challenge for Plochocki and his team is to maintain that sense of urgency over the five-year stimulus window and beyond. It can be easy to spend months preparing for a big shift in your business, and once you’ve lined everything up, to ease your foot off the accelerator, thinking you’ve got it all under control.
However, Plochocki says you need to remain vigilant and keep hammering away on the principles that made your plan a success in the first place.
“We just got the pieces in place at the tail end of 2010,” he says. “We got our products certified in October, and now we’re on to the execution phase. If you are a buyer of software, you know who is certified. So now we’re into pure blocking and tackling execution mode. All the preparation we did to get ready for this game took place over the prior 18 months, but we still have to keep focused on the task at hand.”
How to reach: Quality Systems Inc., www.qsii.com or (949) 255-2600
The Plochocki file
Education: Bachelor’s degree, journalism, Wayne State University; MBA, Central Michigan University
First job: I grew up on the lower East side of Detroit where a lot of different ethnic groups lived, and my first job was as a paperboy. I delivered the Detroit Free Press, the Detroit News, along with the Polish, Russian and Italian papers. Whenever I’d deliver a Free Press or Detroit News, I’d ask them if they’d want an ethnic paper. So I kind of took a paper route and turned it into a diversified paper route, which is not unlike what I’ve done here.
What is the best business lesson you’ve learned?
Early in my career, I had built up the best sales territories in the company I was working at. Then my boss approached me and asked me if I wanted to change territories. I was comfortable where I was, so I asked him why I’d want to do that. He told me that if I want to grow and explore everything that I can do, I need to step out of my comfort zone.
You should welcome opportunities to step out of your comfort zone. It will give you the greatest growth potential that you can imagine.
What traits or skills are essential for a business leader?
You have to have a genuine regard and liking for people. That was one of the questions I had at a panel once. A guy asked me if CEOs don’t like people. I told him that it’s not that CEOs don’t like people, it’s that a large percent don’t want to have to do with people. The harder thing to do is to continue to reach out. Maybe it’s the salesman in me, but if I have a difficult person, instead of getting rid of the situation, I try to make the person come around. I try to find out what I am missing, or what the person doesn’t understand.
The decisions that impact your company’s future might ultimately rest on your shoulders, but the process by which you arrive at those decisions can be far more collaborative.
The best leaders are the ones who solicit input from managers and employees at all levels of the organization and formulate a system by which ideas and feedback can be submitted to and considered by the company’s main decision-makers. Whether employees want to give you input on the strategic direction of the company or the new light fixtures in the restrooms, it’s all a part of keeping ideas flowing and keeping your work force engaged.
Over the past few years, Smart Business Philadelphia has talked to a number of local business leaders about how they keep their employees focused by engaging them. Here are what three of them had to say:
“What I tell my employees is to come back to me with a game plan, tell me what you would do to solve it, because you’re closer to the issue than me. Nine out of 10 times, employees solve their own problems. They understand what they have to do and end up bringing back great results.”
-- Richard Miller, president and CEO, Virtua Health
“Part of building a team-oriented culture is building consensus, seeking input. Two heads are better than one; three heads are better than two. So we encourage people to seek others’ opinions because it absolutely yields better decisions, and we develop a culture where we respect each other’s
opinions. That’s the way we operate.”
-- Bill Hankowsky, chairman, president and CEO, Liberty Property Trust
“It’s amazing how many people are doing some best practices that we don’t even know about. When people hear stuff from their peers at work and they get a live testimonial, it ignites them to go back and try that, it ignites their thought process to say, ‘What can I do to better please customers, to get a better spirit in my store?’ It creates such wonderful momentum.”
-- Judy Spires, former president, Acme Markets Inc.
Get your employees to think like problem solvers.
Always look to build consensus on decisions.
Never underestimate your employees’ ability to generate new ideas.
Sometimes, in the pursuit of success, you begin to fail your company.
That’s the position that Mike Gauthier found himself in at his $24 million company, Save on Everything, the brand name of Mike’s Market Share Coupons Inc.
Gauthier, the company’s founder and president, answered a period of rapid growth by altering the structure of his company and constructing a leadership team of outside hires. But in the process, he allowed his company to get away from the culture that had made it a success in the first place.
So Gauthier had to bring his company full circle, bringing it back to a culture that valued internal growth and promoting the ideas of its people.
Smart Business spoke with Gauthier about how to bring your company back to what it does best.
What is the biggest challenge you’ve recently faced in your role?
One of our biggest challenges was a culture change we went through a few years back. We grew substantially, and that brought in a bunch of smart people with their own policies and procedural habits. Although those things are a necessity, one of the things we lost was the essence of who we are as a company, what I like to term our ‘saga’ — what are we about, why are we here. We forgot about that and started making policies and procedures more important than who we are.
So I’ve had to do a huge shift back to what our company was about. We had lost really good people during that time, and I had to end up replacing the management to have more my style and my feel of how a company should run. So we really had to reinvent ourselves, change our products, add new products, and we’ve done that pretty successfully.
What does a business need to have in order to not be bogged down in procedures?
Culture has to be a shared environment. People have to know what is going on within the company. If you’re keeping them in the dark, you’re not going to build a very good culture. I try to bring in more of a family-type culture here, even though it’s tougher to do that as you get into being a larger company. Right now, we’re at about 120 employees, so it’s manageable. But it’s having that daily involvement of your people. We have daily updates so that people know what is going on in the company, what is going on in sales, how we’re doing against our measurements and so forth.
Cultures also tend to flourish when people have a reason more than a job. They have to know that their ideas are valued and viewed as critical to success. They have to see changes will be made if they come up with good ideas. And you have to not punish them for making mistakes. You have to let them try things.
How do you allow your people to try new things, but still stay on goal?
It takes good ideas. You have to ask for them. With our sales staff, we’ll come up with new products from one of the sales members. They’ll see something, and they’ll tell us whether they think it can work in our organization. Instead of blowing it off, we’ll take the idea and see if it actually could work for us. We try to take ideas and work with them. We allow people on the production side to come up with new looks, new covers for the magazines we do. We tell them ‘Here is what we’re looking for; you come up with the product. You design it and come up with the idea.’ That gives them ownership. They take ownership and pride in what the product is going to look like. Then it starts to become more than a job.
How do you find people who are a good cultural match?
That is a tough part of the job. We went through all the scientific methodology and all of the other aptitude programs that are out there. They give you some idea, but in reality it’s all about who wants to step up to the plate. The trouble is, I’ve found that when you bring someone in from the outside, a lot of them are anesthetized from the neck up. They haven’t been cultured to think for themselves. So if you’re running a culture like ours, it takes a while to change that. Ultimately, it’s up to them. If they feel like it’s important, that they want to change and work hard, they’ll do it.
HOW TO REACH: Save on Everything, (248) 362-9119 or www.saveoneverything.com
Sometimes, an old stove can really help you weather an economic recession.
Not the stove itself, actually. It’s the money you save by not buying a new stove right away.
At MotorCity Casino Hotel, president and CEO Gregg Solomon has used a heavy dose of common-sense, cost-saving frugality to help his 2,800-employee facility to weather the toughest economic climate in 70 years.
“There is always a natural attention you pay to controlling your discretionary spending,” Solomon says. “Rather than schedule the replacement of a piece of kitchen equipment, we’re going to see if it makes it through the year. If not, we’ll have to replace it. Those sorts of things, when you’re planning capital expenditures, you can reasonably estimate that you’ll be replacing a certain amount of equipment. In this case, we decided that if it breaks, we’ll deal with it, otherwise we’re going to try to get another year out of it.”
But it’s not all about capping capital expenses. For Solomon to make it through the recession with his business positioned for future success, he has also needed to throw some strategy, opportunism and leadership into the mix. He’s needed to find opportunities to grow that are financially advantageous and build an organization of enabled, motivated people who can capitalize on those opportunities.
Like a lot of business leaders, Solomon has done some learning on the job as his business has progressed through the recession. What he has learned has driven home to him the importance of not just financial and strategic positioning, but the need of employees to have the support, direction and encouragement of management in uncertain times.
“Basically, a lot of it was not allowing us to fall into the negative mindset that a lot of companies get trapped in,” he says. “Without question, a major challenge has been keeping everyone’s attitude on track when things are not good.”
Watch your costs
When you need to keep a close eye on your cost structure, it’s about how you spend your money as much as the amount you spend. Often, you can’t simply take an organizational hedge trimmer and cut a nice, smooth line across all departments and areas. Some departments are going to need more investment than others.
At a large casino with many departments and areas all vying for budgetary support, Solomon needed to come up with a guiding principle that would help determine which areas got financing first.
The deciding fact for Solomon and his team was whether an expense or cost-cutting maneuver would adversely affect the customer experience. If a move could generate a negative impact for the customer, it was deemed a bad move. If it could help improve the customer experience, Solomon’s staff pursued the idea.
“We took a hard look at our labor component and tried to find more creative ways to do business,” he says. “One of the things we looked at was working with unions to implement four-day, 10-hour-shift workweeks. That allowed us to better appropriate labor than five-day, eight-hour-shift workweeks, which is the concept that is predominant in our industry.”
Solomon and his team looked at every discretionary expenditure, including electricity usage, facility maintenance and even magazine subscriptions, to see if there was a better way to arrive at a positive end result.
“It goes back to whether you need to replace that piece of kitchen equipment right now,” Solomon says. “The key is, you don’t budget to the maximum extent that you’re able to spend. We always have some discretion regarding additional expenses that weren’t in our original forecast. You try to project the reality of the situation beforehand. A department head sees that a piece of equipment is becoming more costly to maintain and we see that it really doesn’t have another year in it. Or maybe we lose a maintenance agreement on a piece of equipment and can’t be sure that we’ll get the replacement parts. You take it as it comes.”
Another strategic maneuver that Solomon helped facilitate was the use of MotorCity as a proving ground for new technology. The casino’s leaders formed alliances with gaming manufacturers, arranging partnerships that paved the way for new features, such as server-based gaming. The arrangement helped provide a large number of new attractions for the gaming floor at MotorCity on favorable financial terms.
“They would provide a huge amount of equipment to us on a trial basis, and we would either be able to defer payment or arrange other favorable terms,” Solomon says. “It allowed us to get a huge number of new games on the floor without an immediate financial impact.”
As a business leader, you need to take a proactive approach to leadership. You can’t wait for the market to boom or bust before you devise and carry out a plan of attack. When the economic outlook is anywhere between murky and gloomy, it can be difficult to be that bold. However, Solomon says the key is to remember what makes your business great and remember that you are still the one running your business, not the circumstances of the marketplace and not your competition.
“Stick to your game,” he says. “Don’t let other competitors run your business. Don’t get caught in a fact-and-react loop, where they tripled their offer so you’re going to quadruple it. You have to realize that the economy might be different, but it doesn’t change the fundamentals. It just makes sense to stick to what you know is right. Be mindful of your competition, but don’t let them run your business.”
Build on brainpower
You can keep your expense structure lean and construct a strategy for the future, but your best laid plans won’t ever become reality without the involvement of your people. Your managers and employees need to get on board with your plans if your business is ever going to fully recover from the recession.
Early on, Solomon acknowledged the importance of strong binding ties, both vertically between layers of management and horizontally between departments. He needed his people not just talking with each other but thinking with each other. Solomon knew innovation would become a key component to fighting the recession, and he wanted an environment where creative ideas could develop.
First, he needed a method for getting his people together and interacting.
“One of the most important things is to inspire an atmosphere where people talk in plain English and are not hesitant to speak up,” Solomon says. “You don’t want people getting defensive if somebody gives advice or comments about something they have observed in a department. Don’t be defensive if someone handles a situation on the floor that might not be in their department but needed to be handled right then. More than anything, it’s constantly keeping your folks together in a free-form environment where everyone can speak and there is no downside to being honest.”
In a large, layered organization like MotorCity, Solomon wants all of his decision-makers in the same room periodically. With scores of managers and scores of different jobs in different areas of the casino complex, management-level interaction can’t be left to chance meetings on the casino floor.
“We need to have a quarterly meeting with our entire management team,” Solomon says. “We refer to it as our ‘Sound Board Session,’ — Sound Board being the name of our theater. We present to our management team a whole list of results, issues, opportunities, and we have three meetings to cover all of our shifts. That type of forum has been a great way to communicate the overall vision and strategy, the things that have happened in the past quarter and where we are going in the next quarter. Marketing, strategies, all of those things are presented in those meetings.”
Laterally, Solomon helps tear down would-be silos by taking away financial incentives for departments and managers to hoard ideas. No person or department at the casino is going to get ahead or make more money by trampling on their colleagues.
“A lot of companies inadvertently create scenarios by way of compensation or otherwise, and it actually encourages negative behavior for the property as a whole, thinking they will inspire more aggressive management techniques at the department level,” Solomon says. “But generally, it ends up becoming ‘Well, who cares about the other guy?’ We don’t do that. People know they’ll be rewarded for being a team player.
“It all goes back to communicating with the entire staff. When they are better informed about how they relate to the overall picture, it becomes an issue of you knowing the complete scenario, and if you choose to go against what is in the best interest of the overall operation, that would not be a good statement about your management style. If you give your people enough information about how they relate to the whole, they should be able to make the right decisions voluntarily. If they don’t make the right decisions, then you have a question to answer about whether they’re the right kind of manager.”
Keeping your staff engaged and informed is the first step. From there, you need to continue reinforcing the need for new ideas and creative thinking. If you want your people trying new things, you need to live with the trial-and-error process that accompanies innovation. You have to be willing to acknowledge that failure is a possible outcome of trying something new, and if your team isn’t failing at times, the mental gears of your business probably aren’t spinning fast enough.
“The most significant thing you can do is not punish people for failure,” Solomon says. “We are very dedicated to the proposition that if you’re not trying things and making some mistakes, you’re not trying enough new things. You have to foster an environment where it is OK to fail, and we want you to recognize failure quickly and remediate it or move on. But if you’re not failing on some things, you’re not trying enough new innovative ways of doing things.”
In Solomon’s experience, taking chances and embracing new ideas offers far more of a competitive advantage than holding back and taking a more conservative approach. You can’t simply bet the farm on one idea, but a willingness to stick your neck out on a new idea could aid your company’s recovery from the recession.
“When you look at the home runs we’ve had versus the impact of some project’s failure, there is overwhelming evidence that the green-light thinking, things nobody else is doing, we’ve gotten a lot more in terms of competitive advantage than if we had simply stuck with all the safe things you can do as a business,” Solomon says. “If you are allowing your people to try new things, you simply have to stick with the fact that they’re going to fail on occasion. Then recognize it quickly, move on and don’t dwell on what didn’t work. Just be mindful of not repeating them.”
How to reach: MotorCity Casino Hotel, (866) 752-9622 or www.motorcitycasino.com
The Solomon file
Born: Covina, Calif.
First job: I started in the industry as a slot mechanic when I was 20 years old.
What is the best business lesson you’ve learned?
You have to put in the time. Early in my career, I worked for the company that became Mandalay Resort Group. My first boss asked me how much I wanted to work, and I told him I wanted to work enough to get paid as much as I could per week. So they put me on salary, and that turned out to be a great strategic decision. I put in all the time I could, they never sent me home due to incurring overtime, and I learned a lot about various aspects of the industry. It turned out to be a very critical thing in my career.
One of my peers once said, ‘A smart guy learns in one hour what it takes me eight. But I put in nine hours, so that makes me smarter than him.’ That really stuck with me.
What is your definition of success?
Success is still measured by the bottom line in any business. But what I would say is that success is producing the highest return on investment in a way that is still mindful of the human beings involved in the process.
They were planning to close at 9 a.m. that first day.
Dan DiZio had just co-founded a small pretzel bakery with his former college roommate. He had been a stockbroker; his roommate was a psychological counselor. They had tired of the daily 9-to-5 grind and decided to pool their resources and get into the pretzel business.
They had designs on being a two-man wholesale outfit, spending their early mornings twisting and baking the pretzels, selling them in large quantities during the morning hours and knocking off for the day before most people had made their lunch plans.
“We weren’t set up for retail,” DiZio says. “We didn’t even have a cash register. We rented a retail space only because the rent was cheaper than a warehouse would have been.”
But somehow, on that first day, they became a retail outfit. A line of customers formed at the door of their little storefront bakery and didn’t dissipate until late in the afternoon. In the span of one day back in 1998, the seeds of the company that became Philly Pretzel Factory were planted. And DiZio was thrust into a world of change management and rapid growth.
“I went on to open up eight more stores through 2004,” he says. “In 2005, we started franchising, that became popular, and in 2006 and ’07, it really started to take off. We opened 50 stores in ’07, 46 in ’08, so it jumped from a numbers standpoint very quickly. We were opening about a store a week at that point.”
Now, the company has 120 corporate and franchised locations, employing 1,500. It’s a meteoric rise, considering DiZio didn’t have much of a business plan at the outset.
“We didn’t have a typical structured plan,” Says DiZio, the company’s president. “We were flying by the seat of our pants.”
To get from a two-man operation to 120 locations, DiZio needed to formulate a business plan that gave future employees and franchisees rigid foundational principles, which still allowing room for flexibility as the company grew. And he needed to find the right people to facilitate growth — people who could help Philly Pretzel Factory broach new markets.
Build a framework
To formulate a growth strategy, you first need to set the ground rules for your business: who you want to serve, how you are going to serve them and what you are going to serve them.
Early in the life cycle of Philly Pretzel Factory — the brand name of Soft Pretzel Franchise Systems Inc. — DiZio decided he wanted to focus on customers who bought in volume. DiZio’s target consumer isn’t an individual walking in off the street for a bite to eat. He wanted to target people who are buying for large social gatherings, community sporting events and office parties, and spread the footprint of his business based on where those people congregate. City street corners were out, office parks and suburban neighborhoods were in.
“We decided that we were looking for family-type communities where there are a lot of sporting events, a lot of salespeople,” he says. “It comes back to picking the right target and having a product that follows that target.”
To aid in targeting the right markets and, in turn, the right franchisee candidates, DiZio and his staff use software to conduct studies that analyze demographics and purchasing trends. But he says it’s a folly to rely solely on computer data to plot your growth strategy.
DiZio and his team visit potential markets, experiencing them with their own eyes and ears. He says it offers a type of insight that is difficult to quantify but extremely critical in the process of deciding whether a given market is ripe for expansion.
“We drive the markets, look at the locations, look at the area, look at the schools, then really take it back to the office and look at our research in more detail,” DiZio says. “It’s not just on a screen or a piece of paper. It’s something intangible that you can’t really touch. You kind of feel the energy, you get a sense of a neighborhood and the way it is. It’s kind of like how Ray Kroc would go out and look for places to put a new McDonald’s. He was looking for church steeples. He wanted to put his restaurants where there were churches. But regardless of how it happens, you have to get out and feel if it’s the right location. For us, taking the word of a computer or demographic numbers wouldn’t be enough.”
Ultimately, DiZio says you need to keep your growth strategy as simple as you can. That doesn’t mean you completely avoid or fail to address complicated issues, but you should build your growth strategy around some central principles that never waver. The best bet is to figure out what it is you do best as an organization, and figuring out ways to leverage that strength.
“We wanted to keep it simple, and that was our philosophy and belief,” DiZio says. “We still have that philosophy of doing what we do best, but really trying not to do everything best. Everything else trickles down from that. There are always these great new products our there that we could come up with, but it would complicate the business model and we don’t want to do that. So we have to continue to follow those core beliefs of keeping it simple.”
Your growth equation will never be complete if you simply rely on acquiring new geographical areas. You also need to take a look at what you’re offering and if there are better ways to offer more value to your customers.
Though you might strive to stay devoted to your core product or service offering, a new opportunity can get your company’s foot through some very important doors. It’s something DiZio learned firsthand when some of his franchisees began pressuring him to broaden the menu at Philly Pretzel Factory.
“A few years ago, our product mix was pretzels and soda,” DiZio says. “That was the entire menu. There was no other version, just pretzels out of the oven. But as we moved along, I started to get feedback from franchisees who wanted to bring new ideas to the table, like sandwich pretzels. I shot them down for a long time, because I didn’t like the idea of sandwich pretzels, and I couldn’t envision each store making these sandwich pretzels and keeping them consistent.”
Some dialogue between DiZio and the franchisees resulted in a middle ground that took the sandwich pretzel concept and simplified it, making it a better fit for DiZio’s business model. The sandwich idea paved the way for party trays, opening up a new and highly successful element of DiZio’s business.
“That whole idea is what created a lunch business for us, and it has been a key to success for us,” he says. “That’s why, as a leader, you have to be able to make decisions quickly, but you also have to be flexible enough to make a decision to try something new. You can’t be so rigid that you can’t try something.”
By DiZio’s own admission, he sometimes misses on an idea from down the ladder that turns out to be a hit in the end. It has taught him to listen to the employees and franchisees under the Philly Pretzel Factory umbrella and give them latitude to try new things when appropriate.
Some ideas, like menu choices, can’t be planned and executed on a store level. Any business needs to have consistent standards and product offerings to customers. But DiZio puts a great deal of marketing in the hands of his franchisees and store operators.
Marketing is one area where he wants to see his store-level people try new things and report back on the success or failure of the idea.
“We want them to run with their ideas, because we learn from those and share those ideas with other franchisees,” he says. “We have round-table discussions where we talk about what has worked for various franchisees. Obviously, every idea won’t work for every franchisee due to differences in the markets. But if it does, we’ll take it and run with it.”
DiZio focuses on the importance of intimacy with a narrowly focused group of customers. Though a given location might attract youth soccer parents buying pretzels for a tournament that is miles away, each store is really focused on building a customer base within a five-mile radius.
“You want to build a presence in a given market if you’re going to enter it,” DiZio says. “It doesn’t really do any good to only have one store in a market. You’d think if you put more locations in a market, they’d take away from each other. But then you realize that the more locations you have in a market, the more business they all do. It’s the effect of brand recognition.”
Bring along others
To grow your company, you need people who can help grow it. You need brainpower that you can leverage.
DiZio states it simply: He wants people who are better than he is.
“I’m looking for people to be better than me, especially in their field,” he says. “I want them to be much better than me. Do I try to shape their thoughts a bit? I probably do, but after a while, I want them to run with their ideas, shape them, share them and keep them on the right path of where the company is headed. As long as they stay within our guidelines, we try to have fun with the concept. It’s a fun business — it’s pretzels, and we try to play that up.”
But if you want fun in your culture, you have to be serious about finding people who want to have fun. You need to find people who are a good personality match for your company. In the recruitment process, DiZio does what a lot of company leaders do. He brings franchisee and management candidates in for multiple rounds of interviews with executives from various areas of the company.
But he and his staff don’t do a lot of talking. They ask questions and do a lot of listening.
“We sit back and listen maybe 90 percent of the time in an interview,” he says. “We’ll ask questions and let them elaborate to the best of their ability. It goes back to the idea that as the CEO, you want people who are smarter than you.”
By asking initial questions, sitting back and listening, DiZio gets a gauge on how passionate a candidate is for his company’s mission and products. If DiZio doesn’t get a good feel for the person’s excitement, chances are it’s not a good match.
“We ask them what excites them about our brand and our products,” he says. “A lot of our franchisees were customers and already love the brand and the product. But some might not be familiar with it. Maybe they grew up in California, moved here and don’t have a feel for our brand. But if they don’t have that passion for what we do, it’s really hard for us to connect with them. You can definitely sense during the interview process how excited they are about what you do.”
How to reach: Philly Pretzel Factory, (800) 679-4221 or www.phillysoftpretzelfactory.com
The DiZio file
Education: Bachelor’s degree in management and finance, East Stroudsburg University of Pennsylvania
First job: I began selling pretzels on a street corner when I was 11. Now I’m 39, and I’ve been selling pretzels for all but two of those years when I was a stockbroker.
What is the best business lesson you’ve learned?
Startup money is so valuable, so don’t waste it. We wasted a lot at first and ultimately had to end up redoing a lot of the work. So really watch those dollars and know where the money is going.
What traits or skills are essential for a business leader?
You have to understand your product and know the business. You need to be able to relay your thoughts and passion to others, and train them.
What is your definition of success?
Success to me is going to work and doing something I love. I think people go on vacation to escape their lives, but I love where I am. I love watching where we grow, and watching our stores grow.
No one who lives in southeast Michigan needs a reminder that the region has been one of the epicenters of a massive economic recession. But it might help to remember that there will be a light at the end of the tunnel, and you can reach that tunnel in better shape if you are prudent in how you lead your business. You can take steps to become more opportunistic, managing your spending and focusing your employees on the vision and mission of your company.
Over the past couple of years, Smart Business Detroit has spoken with a number of Detroit-area business leaders about the steps they’re taking to help their companies weather the economic storm. Below is a sampling of what three of them had to say.
“Employees are smart, and many of our employees have been here a long time. They can see when we are going after the real problems, not just the appearance of problems. That’s one way we convinced them of our intentions through actions instead of words.”
Marty Kahn, CEO, ProQuest LLC
“Take all of the other distractions away. Get rid of ancillary businesses, ancillary and unimportant initiatives, things that are taking away from the core, uniform strategy that you’re trying to deploy. It’s an ongoing effort. It’s an evolution, and you keep working through it. You keep building momentum over time, and eventually it does pick up."
MaryAnn Rivers, president and CEO, Entertainment Publications LLC
“As you think about the future of your organization, you have to do scenario planning. You need to come up with best-case, most-probable-case and worst-case scenarios. You need to be able to anticipate and stay ahead of the curve. Leaders need to do that all the time.”
Patricia Maryland, president and CEO, St. John Health System
Employees know when you're addressing the real problems
Get rid of factors that take away from your core businesses
Plan for many possible situations