When Jeff Ahola decided recently to target The Ahola Corp.’s services specifically to family-owned businesses, it was not the first time he had refocused the company itself family-owned and operated around a specific market niche.
Upon its founding in 1967 by Ahola’s parents, The Ahola Corp. operated as a general data-processing bureau, using mainframes to compute a wide range of business functions. Nearly 20 years later, Ahola joined the organization as marketing manager and made a quick realization.
“I joined the firm in 1984, and shortly thereafter, I realized we were just too spread out as a company,” Ahola says. “We were competing in a humongous number of markets and areas.”
Choosing which of those markets to target was difficult, but after weighing his options, Ahola settled on outsourced payroll processing.
“That first choice to focus just on payroll services was a huge decision, and it was the right decision, in retrospect,” Ahola says. “You can forecast it, but when it comes to where the rubber hits the road, you’ve got to make the decision.”
Once you’ve made the decision to focus your business, Ahola says the biggest challenge is often preparing your staff for the process. Communication from the top is critical in reducing the confusion and frustration that accompanies any significant change.
“When you see the vision clearly, you assume that everybody else sees what you see,” Ahola says. “Not everybody can be whole-brain thinkers, and that’s what good leaders need to be aware of.”
At least some of that communication is non-verbal, Ahola says. During any business adjustment or refocusing, it is imperative that once a decision has been made, a leader projects a sense of confidence, not indecision.
“It’s like if you’re leading a battle and you’re in a boat and you’re landing the boat and going inland; you’ve got to burn the boats so you’ve got to go forward,” Ahola says. “Confidence builds success, and then success builds confidence. Your people need to be confident that you feel you’ve made the best decision.”
Projecting confidence, however, is sometimes easier said than done. Ahola says that while the benefits of such a change can be slow to materialize, a leader must stick to his or her guns.
“What’s difficult in this economy is that you can’t filter between, ‘Is it the economy, stupid?’ or, ‘Is it your strategy, stupid?’” Ahola says. “You’ve got to be ready to withstand the short-term confusion of the marketplace. Once they see the benefits of the focus, the growth will go very, very rapidly.”
Making the correct and profitable niche marketing decision requires, first and foremost, that a leader be familiar with all aspects of his or her own organization. Above all, Ahola stresses the importance of being well-acquainted with your customers and their issues before choosing how you can best appeal to them.
“You just have to know your business,” Ahola says. “You have to be out there with your clients. You have to be there in a sales capacity, an owner capacity and a customer service capacity before you make the decision.”
Though conventional wisdom might suggest that targeting a specific niche is limiting your opportunities, Ahola believes just the opposite.
“It’s tough to think you’re going to shrink your market,” he says. “You’re actually going to expand it. You’re going to enhance your expertise and you’re going to create your own leadership position in a category, especially if the category has not been created yet. There is no leader for family companies for payroll services, and we intend to take that leadership position.”
HOW TO REACH: The Ahola Corp., (440) 717-7620 or www.ahola.com
Rules to better niche marketing
Niche marketing can be a low-cost, low-risk strategy to grow your business. Keeping your risk low, however, requires foresight and thoroughness. Kim T. Gordon, an author and marketing coach, offers these three rules to effective niche marketing.
- Meet the unique needs of potential clients. The benefits you promise must have special appeal to the market niche. What can you provide that’s new and compelling? Identify the unique needs of your potential audience and look for ways to tailor your product or service to meet them.
- Say the right thing. When approaching a new market niche, it’s imperative to speak the language of the niche. In other words, you should understand the market’s hot buttons and be prepared to communicate with the target group as an understanding member, not as an outsider. In addition to launching a unique campaign for the new niche, you may need to alter other, more basic elements, such as your company slogan if it translates poorly to another language, for example.
- Always test the market. Before moving ahead, assess the direct competition in the new market niche and determine how you will position against them. For an overview, it’s best to conduct a competitive analysis by reviewing competitors’ ads, brochures and Web sites, looking for their key selling points, along with pricing, delivery and other service characteristics.
SOURCE: To reach Kim T. Gordon, go to www.smallbusinessnow.com
In the interest of keeping his staff thinking about generating meaningful results, Mark Young likes to ask a few questions.
“How does that make our product better? How does that help us with our customer satisfaction? How does that advance our education and make our people better?” Young says. “Sometimes people think they’re doing things for the greater good, and it may be a nice thing in the end, but the question is, ‘Did that really produce value?’”
With a culture that aims above all else to make a difference in the marketplace, Tapestry Solutions Inc., which designs and implements graphical software products, posted 2006 revenue of approximately $45 million.
Young, Tapestry’s founder and CFO, spoke to Smart Business about flexibility and why growth requires a willingness to change.
Q: How would you describe your leadership style?
I try to focus on tangible results and try to stay away from the stuff that is just sometimes nice to have, but not stuff that I consider to be results and value.
The other part of my style is to be flexible. I try to involve the folks that are engaged in working with me and understand what the issues are and not always be hell-bent on everything having to be my way. That tends to bring out better-performing people.
Q: What are the advantages of being results-oriented?
At the end of the day, you get out of the business what really needs to happen. In business, there are different degrees of what you can do to survive.
You could do anything and everything to make the business nice and beautiful; however, a good part of that is probably not needed to run a successful business. When I say we focus on results, it’s things that truly make a difference in managing the business from my perspective: getting contract stuff done, etc.
What’s less important is keeping track of how many chairs you have. Applying priorities to results is critical.
Q: How do you encourage involvement?
I consider it like a doctor doing his rounds. I’m not necessarily big on, ‘Let’s have a meeting every week at 2 o’clock,’ or that type of thing.
I make sure I have one-on-one interaction with people to get them involved and to understand what they’re doing. I am not the micromanager from a practical standpoint. We may talk about the big issues, but I’m assuming that, from there, the execution is happening. I’m not a believer in meeting with big groups of people because that tends not to produce a lot of results. It’s good for keeping people educated on what everybody else is doing and keeping everyone collectively on the same sheet of music, but those types of things are not the most effective way to manage a business.
Q: How important is flexibility during a growth phase?
You have to be able to be flexible to take advantage of opportunities as they’re presented. If you lack that flexibility and the world changes quickly and you can’t meet those needs, the marketplace you have will slowly dry up and you won’t be able to replace it. You’ll be too far behind the curve.
A lot of businesses that can’t do that or can’t adjust their management styles or change their products are the ones that will tend to burn out in my marketplace. Maybe a guy who is building mousetraps can keep building mousetraps forever. But in a technical world, if we don’t keep being flexible and helping people out, it doesn’t work.
Q: How do you encourage employees to embrace change?
You have to show your employees the value in change. There are definitely people who get used to doing the same thing, and any time you try to change, it’s obviously one of those situations where they are less likely to make the change.
We are successful, and we are able to survive by being able to do this. If we choose not to, then this great little company that’s become a nice middle-sized company will potentially shrink down and have its problems.
I’m a firm believer that if people know what the downside is, they will tend to motivate themselves, too.
Q: How does a company change as it grows?
We’ve implemented a middle layer of management, which is a big change for a small company becoming a medium-sized company.
As you grow, the big difference for those of us who are doers is to go from being engaged in everything down to working with the clients to transition to more of a manager-type. You’re guiding the ship now as opposed to rowing the boat.
You can’t cover all the ground that you used to. You cannot effectively manage. Things start to fall through the cracks, and you become aware pretty quickly when things aren’t getting done.
You have to get some management in the different places to help manage the workloads and manage the people and so forth.
HOW TO REACH: Tapestry Solutions Inc., (858) 503-1990 or www.tapestrysolutions.com
Delegate to make time for strategy. I have a great management team, and I delegate a lot. We make decisions collaboratively, and I can pass on a lot of the day-to-day operations to the management team. That frees me up to be strategy-driven and data-driven.
What that means is it gives me a chance to look at the broad landscape of our market. What’s happening? What are the potential opportunities or potential threats? I tend to be very data-oriented in terms of trying to quantify strategic opportunities. I’m able to do that because of our great management team.
Otherwise, I would have to get involved in a lot more of the day-to-day operations.
Collaborate to build buy-in. A true leader has a vision, but he builds that vision collaboratively with a team so that they have buy-in. The true leader almost becomes a cheerleader and communicates the vision such that people become passionate.
The true leader has a responsibility for building that fire in the belly in all the people, so that managers and everyone all the way down has the fire in the belly. That’s quite a challenge. Some people are there just to earn a salary and do a good job. Other people want to win.
You have to build that desire to win in as much of the organization as possible. That’s my job.
In general, collaboration in agreement on strategies gets people to buy in to it. People can actually kill strategies, not necessarily by taking overt action but just by sitting back and saying, ‘Well, I don’t agree with this so I’m not really going to work hard to make it happen.’ So, collaboration really gets people to buy in to a strategy and a vision. Collaboration brings cohesiveness to the team to work together and buy in to the direction of the company.
Learn from mistakes. You have to make people feel comfortable with hearing, ‘Look, if I’ve told you to take that hill, or we’ve agreed that hill needs to be taken and you’ve agreed to take it, I don’t need to check with you every 15 minutes to see how you’re doing on your way to the top.’
That’s when you know you’re there.
When you can assign complex tasks to people, they understand how those tasks fit in with the overall strategic direction and they feel comfortable executing those tasks and coming back and saying, ‘I’ve gotten to the top, what’s the next challenge?’
It doesn’t happen overnight. People have to learn and grow. Basically what has to happen is, you define your direction and you start giving people responsibilities and you watch and measure if they come back and routinely perform, or if they make a mistake and there’s interactive discussion about, ‘Let’s go back and understand what created the issue or the problem.’
It’s something where you agree with a person and say, ‘Here’s your mission, here’s your goals. Let’s talk about problems that surface, or if you have a problem on your way up a hill, what is that problem, and how can I help you?’
Connect individual tasks to the overall goal.
There has to be two parts to communicating. There has to be a formal process. We have a very formal, strategic process that is very collaborative, and we agree on our strategic goals.
Then we have a process of fleshing those goals out and driving those goals deep into the organization so every last person understands the part they’re working on and the part it plays in the overall company goal.
We typically have our goals broken down into two or three major goals. One might have to do with leveraging our install base. Another big strategy might be becoming a more significant player in the manufacturing execution systems space.
Then each department, whether it’s sales or marketing or research and development, we break it down and say, ‘OK, sales, in terms of this new product area, we expect so many dollars out of Europe,’ and it goes all the way down to the individual. They are told exactly what we expect from them.
In terms of development, if we expect to announce or launch a product in July, then the milestones have to be set for the individual product components that have to be ready to be tested by such and such a time.
You work backward. You say, ‘OK, we’re going to hit this target, and here’s what the milestones are.’ That’s the kind of process we do, and it happens in every department, whether it’s sales, marketing, research and development, or human resources. Everybody gets assigned their task that is tied to the overall goal.
Err on the side of being too open. In terms of communication, you can do two things. One is you cannot communicate at all, which is probably the worst thing. People don’t understand. They’re kept in the dark.
If you work in a vacuum, you don’t achieve the synergy that you’re obviously looking for. The dangers of telling everybody everything are that you have no secrets and your competition might learn what you’re doing. There has to be a balance, but I would tend to argue more for the open than the closed. I would rather take a chance on overcommunicating and maybe letting some information slip out, because a strong team that has bought in to a set of goals and visions is much better than possibly keeping it a secret and not having that strong team and keeping information away from people.
HOW TO REACH: Wonderware, www.wonderware.com or (949) 727-3200
“It’s an inverse pyramid,” Moeller says. “The people closest to the customer are the ones empowered to make the right decisions. Those of us who are further away from the customer are here to support those decisions and make sure we give them the tools and the cultural environment it takes to be effective.”
The cultural environment Moeller refers to is one that embraces change, and that has helped grow DriveCam, which produces equipment that monitors driver behavior, to 2006 revenue of more than $28 million. Moeller talked to Smart Business about the importance of trust and the dangers of second-guessing your team.
Q: How would you describe your leadership style?
I’m very trusting and open, so I take people for what I believe them to be and I let them prove me wrong, as opposed to being suspicious and letting them earn my trust. I don’t read a resume, for example. I do a behavioral interview.
I don’t want to be tainted by what you say you are or can be or have been. I look at how you’ve lived your life behaviorally up to this point so that I can start to draw a picture of who you really are and how your mind really works and what kind of values you have as to what you’ll base your decisions on.
Q: What are the benefits of that style?
When you have an open and trust basis, it allows for communications to happen pretty freely and regularly without a lot of politics or fear. What we’re trying to create here is an environment where people are fast-moving and unafraid to take risks, take chances and make things happen.
We like to have a bias for action, and as long as you’re not violating some basic core principles, people are going to make mistakes, and we know that. We encourage people to just be adults, and own their own decisions and the consequences of their decisions.
As long as there is nothing nefarious about what their decisions are, the best way I can empower everybody to be where I can’t be and shouldn’t be at all times is to share a vision and values that they can act upon them the same way I would if I were there.
Q: How can a leader encourage risk-taking?
It comes down to reinforcing certain behaviors, whether you’re reinforcing them positively or negatively. If you say you want a bias for action and you encourage people to do what’s right for the customers, which is what we do, you don’t have to ask permission to do the right thing for a customer. Make your own judgment.
In doing that, if you, in your value judgment, thought that a customer deserved a refund or a complete reinstall or whatever it is that you think should be done, you’re the best judge of that. That’s what we hired you for.
If you encourage people and empower people to do that in whatever they do, and you then second-guess them or you say, ‘That’s not what I would have done,’ you’re basically reinforcing that you may say that and it might be written on the wall, but don’t dare do it again.
You’re effectively putting a negative consequence on a behavior that you say you want. You have to be really careful that what you’re reinforcing, either positively or negatively, is what you really want.
Q: How do a leader’s responsibilities change as his company grows?
As you get bigger, you have to be willing to duplicate your messages, your thinking and your direction and the values by which you get there. You have to be willing to let go of that so other people in the organization can engage their minds and their hearts, and it isn’t all just from you.
Things start moving so quickly and there are so many different facets to the business that you can’t possibly keep up with it. That’s why culture becomes everything. You have to trust that the culture you built will do the right thing at the right place at the right time, because you couldn’t possibly keep your finger on the pulse of all of that yourself.
As long as you don’t try to become a micromanager or think that you’re superhuman, as long as you are self-secure enough to know that you’re just part of it and not all of it, you’re hiring the right people and giving them the right direction. The leader needs to stay focused on strategy. From a macro level and from a micro level, you’ve got to learn to let go and trust.
HOW TO REACH: DriveCam Inc., www.drivecam.com or (866) 419-5861
Protect your culture and your brand. Unless you’re just a box mover and you’re just selling something for the lowest price, where culture doesn’t make much difference and people are just looking to get in and out and get the box for the cheapest amount, you have no option. Your culture is what is going to make or break you.
We franchise throughout the country, and one of the things that makes Ruby’s successful is the essence of our culture. Without that culture, you’ve got just another restaurant. You might as well be a coffee shop. That’s essential for us.
One of the things you have to be careful of is that the brand becomes the guests’. They take possession of it and they hold it very near and dear to them. If you lose the core of what it is that they have an affinity for, you can really turn things upside down. Especially with an older brand, you have to protect the core value of what the guest perceives you as.
Our culture video is something that every new hire, no matter where they are in the company, is asked to watch. It’s about a 15-minute piece on where the company’s roots are and how it developed and where it’s going. We have something called Ruby News that goes to every employee via the Internet, and we try to make sure we’re consistently sending our message on. We’re trying to make sure we’re disseminating that data so the guest gets the impact of our culture.
Communicate from the top. Everybody, all the way to the busboy, has to understand what they’re in charge of and what they’re responsible for. The message has to be very clear and concise. Unless you have that alignment, everything you talk about at the home office is for naught. We don’t sell any hamburgers here on the eighth floor.
We have to make sure our missions and our goals are very well delineated and very well communicated. If you don’t do that, you’ve lost it all. Without alignment, you really don’t have anything. They’re out there on their own, and they really don’t know what they’re trying to execute.
There’s a certain amount of comfort that team members have when they know what their job is in very definite terms. When they feel comfortable and confident, they’re going to do a far better job. In a vacuum, it’s a wildcard; you really don’t know what you’re going to get.
Balance entrepreneurial spirit with discipline. If somebody’s going to create a new division or a new product line, the entrepreneurial spirit goes a long, long way. On the flipside, my skills as an entrepreneur are better set for the foundation of a brand and for the genesis of things.
As a company gets big, you need to become more professionally managed. You always have that entrepreneurial element embedded in there, but you have to get more and more disciplined. You can’t be the cowboy you once were.
The magnitude of everything shifts as the sales get higher. The importance of decisions is magnified as well, so shooting from the hip doesn’t work quite as well as it did in the early days. You don’t want to ever lose your entrepreneurial edge but being disciplined is important, and it creates a more stable environment for the management throughout the organization.
Build buy-in by listening. There’s nothing as valuable as buy-in, and it’s a little tricky these days. You have several different generations you’re working with and their motivations are far different than the baby boomers, and the X-ers are different from the Y-ers, so it is a bit of a dance to keep them all in lockstep.
You just have to listen. We go to great lengths to have roundtables at our restaurants where we will invite the team members to come and talk about what’s affecting them and their job and what we can do to better support them to support the guests. It’s critical for me to know the real story.
I don’t get a chance to interact with our guests that often but these folks are there day in and day out, and they’re far more in touch with what the guests are thinking. If we make a change in a menu or a procedure, that’s when I really have to dive down to make sure we didn’t affect the core of the brand, because that’s the golden goose you can’t mess with.
Create positive tension. The people I’ve found to be most successful are the people who are absolutely, doggedly tenacious and just don’t give up. That makes up for a lot of things.
You don’t have to be the smartest guy in the pile, but the minute you stop innovating, the minute you stop being aggressive, that’s when things get dull. The team can sense that. There’s a certain level of tension that’s healthy for an organization. I don’t mean negative tension, but there’s a level of creative tension that keeps people excited and keeps people interested.
It’s all about new ideas and it’s all about ‘What’s next?’ That keeps people inspired.
HOW TO REACH: The Ruby Restaurant Group, (949) 644-7829 or www.rubys.com
Treat others with respect. I promised myself that if I was ever fortunate enough to have a business that I would treat people with dignity and respect, and treat people the way I would want to be treated.
It’s really simple. I’ve worked for jerks in my life and I don’t want any of my people to have to work for a jerk.
Leaders need to think about how they would want to be treated in a work environment and deal with people the way they would want to be dealt with. It’s really basically very logical and simple. If you want to be dealt with, with dignity and respect, that’s how you treat other people.
As a result, people know where you’re coming from and they can trust you. People know where they stand at all times. If I’m angry or I’m concerned, I voice it. I don’t hold back.
People prefer that. We always want to know where we stand with other people, and if you’re open and honest about that, and foster open and honest communication, it frees people. People are burdened by what they think other people think, and they don’t have to worry about that with me.
Embrace change. An organization that doesn’t change or doesn’t evolve is an organization that is dying. I’m pretty much a change leader in everybody’s mind, from a truck driver to security guard to supervisors to our upper management.
I’m a change agent and I believe in challenging the organization to evolve and change, as opposed to being a CEO who likes the status quo. I’m constantly asking people to grow and change, and I am, too. I’m evolving constantly.
Without being open to change, another company is going to come up and basically eat your lunch. If you don’t reach for excellence and embrace change as people, you cease to be relevant, really, because what was successful yesterday will not be successful tomorrow. There are thousands of companies in the United States that have perished because they did not change; they did not vary what they do and the way they do it, and the way they look at the market and their people, and the way they interact with their people and internal and external customers.
Empower employees and learn from mistakes. People need to feel safe in the work environment, safe to venture out and make a mistake, and we’ve got to try to foster that. We all make mistakes, and that’s OK. We kind of even celebrate the mistakes because we can learn from them, and we certainly celebrate the positive results.
Get employees involved in the process. We have groups called ‘do-it groups’ in our business, where there are teams of people that just come up with their own projects, present it to a ‘do-it council’ of executives and we almost always green-light it and say, ‘Go for it.’
Leaders can’t do it all on their own. You have to harness the intellectual and emotional power of the organization to help move the organization to the next level.
You have to give people authority to make decisions. You have to let them go a little bit and allow them to go out on their own. Sometimes it’s going to burn you. We’ve had some issues where we’ve given authority in some areas and it cost us, but in the long run, it helps develop people.
As long as you keep your eye on everything, it won’t be that critical a mistake. A leader has to trust. You have to hire the right people and then you have to trust them. You can’t be a micromanager.
Reinvent yourself constantly. Our biggest consistent challenge is reinventing ourself as a company. We started as a tiny futon and sofa bed company and progressed to something else, and then morphed to something else, and went from traditional marketing for our type of business to electronic advertising, from radio to TV.
The biggest issue is to reinvent the business and morph into something bigger and better and different, and accept that and not be so stubborn that you’ve got to do it the way you did it a couple years ago.
Being open to that change and that reinvention is what will make a business great. If you do it the way you’ve always done it, you’ll always get what you’ve always gotten. We have to change. We have to evolve as people or we don’t have to. We could decide we want to be X millions of dollars and we’d probably be OK with that, but eventually, somebody is going to come and do it better.
Somebody is going to invent the company that is going to put you out of business if you don’t keep evolving and changing. My biggest fear is becoming a company that’s happy with its success and just stagnant, and under my watch, that will never happen.
HOW TO REACH: Sit ’n Sleep, (800) 675-3536 or www.sitnsleep.com
Mike Muench’s leadership style is based first and foremost on one thing: passion. Therefore, as president and CEO of Line 6 Inc., a company that produces digital modeling devices for musicians, Muench stays involved in the music-making community, and for good reason.
“Customers can tell when a company is genuine versus when it’s trying to be something it’s not,” Muench says. “When you’re passionate about something, you’re going to get people attracted to both your company and your products who share that passion.”
Another significant aspect of Muench’s leadership is the space he grants his 250 employees to make their own decisions, which he largely credits with the company’s success.
Since 2003, Line 6 has grown revenue 55 percent, reaching approximately $69 million in 2005.
Smart Business spoke with Muench about how being a leader means developing skills in others.
Q: How would you describe your leadership style?
The best leadership I can give is good direction so that others can do their jobs. I don’t want to micromanage and do the job for people. I have good people who want to do the job themselves.
As you grow, your job as an executive is to develop the skills in others within your organization as opposed to having those skills and using them yourself.
From a leadership standpoint, it’s important that you are clear as to the goals and expectations that you have of an employee, and then the discussion really becomes, ‘How can I help you become successful in achieving this? What perspective or expertise can I bring to help you in solving the problem or achieving the goal?’
And that drives the kind of collaboration that I’m talking about.
Q: How does collaboration benefit your company?
We make better decisions. I certainly don’t think I’m the best decision-maker in all cases on every decision. We have people who feel more responsibility and ownership of their responsibilities because they’re not just doing what somebody else tells them to do, they’re doing what they think they need to be doing.
We get better performance, and they’re more satisfied than they might be in other types of environments.
That kind of collaboration avoids the ‘iconization’ of the leader of the company. In some companies, there’s sort of a general feeling that it’s all about, ‘Well, what does Joe think?’ and the whole culture of the company revolves around playing to the boss.
In general, we’ve tried very hard to avoid making leadership something that is personality-driven, so it’s not what Mike wants, it’s what is in the best interest of the company.
Q: How do you motivate employees?
From the beginning, we have been very open with our employees about when things are going well and when things aren’t going so well. We try to be transparent, and that includes the financial performance of the company.
The financials ultimately drive many of the decisions that get made and the priorities that are set. It is the scorecard for how the business is doing. To say that the employees are on the team but they don’t get to see what the score is -- ‘Just keep scoring touchdowns but you never get to see if we’re winning or losing’ -- didn’t make any sense.
It’s a very rare case where we will set goals that the employees don’t understand how achieving those goals is in the best of interest of the company and their success. It’s a natural thing that people want to do a good job, they want to be successful, and if you give them the direction of what they need to do to be successful and they’re self-motivated, buy-in and motivation isn’t a problem.
Q: How do you set goals in a fast-growth situation?
It’s really a tough balance when you’re leading a high-growth company and you’re trying to set aggressive goals and you find yourself coming up short of your goals but perhaps exceeding many of the traditional benchmarks of your business. People’s incentive structures are based on the achievement of goals.
Their feeling of, ‘Did I do what I was asked to do, or not?’ or their own motivation is a function of these goals, so it is a tough balance.
It’s hard to feel good when you’re not making goals, so we’ve had to, at times, adjust and reset our goals. In some cases we changed that if traditionally it was a one year goal, we might take it in smaller steps, a quarterly goal instead of an annual goal, and see if we can’t achieve those quarterly goals as a step to getting us to an annual goal. It’s definitely one of the more difficult things to balance.
You want to set aggressive goals, you don’t want to settle for the status quo and yet you want to be able to celebrate your accomplishments.
HOW TO REACH: Line 6 Inc., (818) 575-3600 or www.line6.com
Share your success. This is in no way negative, but in the days when my grandfather started this business, he was purchasing the pencils that everyone used. It was that level of control in decision-making, and that worked for a long time.
He started a business from scratch and did extraordinarily well and created a brand, and I give that an incredible amount of credit. But today, to have a consistent work force and people who want to come back to work and come back to work every day, in order to really be competitive, you have to have everyone thinking about their impact on the business, not just coming to work and working.
A key thing is to make sure everyone in the business can be impacted, no matter what their role is. If their role is sanitation in the plant, as a company, we look at that as a key part of our business, and if we’re successful in delivering a high-quality product on time and at the right cost, then everyone will share in the benefits of that.
Evaluate yourself. Since I took over the business four years ago, we’ve really tried to open up with all the employees to communicate much more about the strategy, where we’re headed, why we’re going there and what it means for them.
A big part of what I do is giving them their expectations and letting them go to it versus every decision coming from senior management. If we can do that, we’ll be a lot more successful than if three or four are making all the decisions.
When I came in, we spent a chunk of time really defining who we are and what it is we do well. All levels in the organization were involved, and in that process, people were kind of forced to think about what they do well and what they do not do well. How often do you really think about that?
Through that process and involving a bunch of people, we got a buy-in into what we do well and what we don’t do well, and when we communicated from there, we decided how we were going to proceed for the next five years. In that process, we exited a chunk of businesses that we felt weren’t strategic or sustainable, we communicated that, and when we did, it made a lot more sense.
Be consistent. Communicating, being consistent and what I’ll call facing reality are huge to any company. Doing so makes it a lot more clear to the employees as to what it is we’re doing and why, and so when decisions are made, if you stay consistent with those decisions, you build credibility and you can hold people accountable because they then know how things interrelate.
We went out last year and made an acquisition, which was the first time we had done so in 50 years. When we did that, we could connect the dots as to why that made sense for us as opposed to a random opportunity that came along.
We were consistent in terms of what that would do for our core business and what our core skill sets could do to be successful in that acquisition.
Because of that consistency over the last four years, people bought into the acquisition right away, even though it was a massive change for the company. Through repetitive communication of the same message, we’ve been able to absorb change in a way that was a lot less overwhelming for people.
Change is obviously hard and, as my dad says, nobody likes change but a baby with a wet diaper, but if you go through change with one communication once, it’s whatever the flavor of the day is. If you go through change and it’s a multiyear approach, which is what we had said we were going to do, then as those changes come people can absorb them.
Face reality. The most challenging thing is sticking with your decisions and making sure you face reality. It’s so easy, and occasionally I still find myself getting caught in thinking, ‘It will be a rosier picture tomorrow.’
You have to almost train yourself to say, ‘No, let’s take a hard look at it again.’ You can always plan for the worst-case scenario, but I don’t mean even that. It’s really finding out what the real likelihood of something happening is and then adjusting your plan to that.
That’s a really hard thing for most people to do. You don’t want to face it. It’s easier not to. With bad news comes tough decisions, but you can face those things and you can plan and prepare.
That’s something that’s been difficult for our organization to do, yet we’ve done it, and it’s really begun to pay off. It was so opposite our culture, which was to say, ‘Well, this year didn’t go great, so next year, we’ll just grow 15 or 20 percent.’ That’s just not realistic year after year.
If you don’t look deep all the time, something fairly large is going to jump up and bite your company because you just didn’t face it. It’s not that you couldn’t find it or couldn’t face it, you just decided not to.
That has manifested itself at our company, and it’s not an uncommon tendency. It’s all about knowing specifically what your plan is and communicating it, and then beyond that, measuring it consistently enough to see the red flags before it’s too late.
HOW TO REACH: World’s Finest Chocolate Inc., www.worldsfinestchocolate.com
As president and CEO of Prime Group Realty Trust, Jeffrey Patterson does his best to keep everyone happy. Demanding his attention are the Chicago-based real estate investment trust’s 102 employees, the tenants who occupy Prime’s millions of square feet of rentable space and the organization’s expectant shareholders. Patterson’s philosophy of business is to create incentives for his employees that will encourage them to provide top-notch service to their tenants, which will, in turn, build long-term, profitable business relationships. Not only does it look good on paper, but his approach has been successful to the tune of $117 million in 2005 revenue more than enough to satisfy Prime’s shareholders. Smart Business spoke with Patterson about how creating discourse, defining objectives and providing a little motivation keeps everyone at Prime Group Realty Trust in perfect harmony.
Conduct your business. A good CEO needs to be a good orchestra leader, and somebody who understands most of the facets of his business and can motivate people who play all different kinds of instruments.
Everybody has different skill sets, and put- ting the skill sets of different people togeth- er and the strengths of different people for different responsibilities generally results in a more positive result than one person or a couple of people trying to do everything.
If people aren’t playing in tune in the orchestra, if you’ve got some negative thinkers or people who don’t want to accept responsibility for the plans that they’ve cre- ated, that can create problems. In most cases, you can’t live with it, and you’ve got to weed out those kinds of performers.
I look for people who will be good team- work members. I look for people who are self-starters and motivated and have the intelligence and the desire to complete the task. I don’t know that you ever know that you’ve found the right person, but I don’t just rely on myself to do that.
I typically involve key members of the team in that discussion. You get more bal- anced input as to the capabilities of the per- son that you may be considering hiring. First and foremost, listen to your people before making decisions.
Create friendly competition. I’m fairly hands- off in the sense that I try to let the people that are responsible for our assets ... run things on their own and make decisions on their own. I’m able to do that because most of our employees have been with us for quite a long time.
With respect to our tenants and focusing primarily on property management people who run specific buildings, it makes them responsible for their existing relationships with their tenants; it makes them responsi- ble for the bottom line of the buildings and empowers them to produce their own results.
The other thing it does is when these peo- ple run their building individually or run their assets individually, is it creates a little bit of competition among all of the folks in the company to want to make their building perform the best, relative to their peers. I don’t think competition is ever a bad thing.
Create a place for dialogue. We try to have fairly open lines of communication with firmwide meetings, which we do a couple of times a year, and we have some confer- ence calls more often ... as circumstances change. You just need to make the effort to do it, because it’s important.
I don’t know that it took any more than that to do it, but once you start doing it, the communication becomes very two-way after awhile. If there are any questions as to what the strategy is going forward, it pro- vides a place for dialogue to make sure everybody’s clear on the direction we’re headed and it creates an opportunity to ask questions about any concerns.
Provide incentives. The most positive way to motivate your staff is with previous results. We set goals up, and when people achieve those goals they’re recognized. Peer recog- nition, as well as financial recognition as a result of achieving goals, sort of propagates wanting to do it repetitively.
A leader’s most important responsibility is to produce results and, at the same time, foster an environment that’s mutually ben- eficial for the employees and stockholders. I don’t think you can disengage the two because if you don’t provide the proper incentives for your employees, you can’t achieve the results.
Success in our business happens when we are providing a service for users and our users are happy with the service we provide, our shareholders are happy with the results that are being produced and our employees are properly motivated to keep our tenants happy and produce the results.
Define your objectives and recognize achieve- ment. I would describe our culture as friendly but results-oriented. Everybody gets along and works well together, but there are clearly defined goals and objec- tives, and recognition occurs for the group that meets or exceeds their goals and objectives, and it’s not just our internal rewards system.
In our case, some of our buildings have been recognized by their peers with awards, which is external recognition. So it’s two types of recognition, really, one that we’ve put in place and another that’s generated by the employees to be honest with you.
The external recognition is usually gener- ated by the results our people produce, because we start with the approach that you’re responsible for your building, and you’re responsible for your results. All our people have a great deal of input into the goal-setting process, so in a sense, we’re making people accountable for what they say they can do.
People are more productive when they know what their goals and objectives are, and we’ve been fairly successful in the last few years in achieving our goals and objectives.
HOW TO REACH: Prime Group Realty Trust, (312) 917-8788 or www.pgrt.com
Maintaining a healthy work-life balance for her employees is a high priority for Nien-Ling Wacker.
“We don’t expect people to work long hours, at night, overtime or anything else,” Wacker says. “I basically say, ‘Enjoy your life.’ If you put your best 40 hours a week into something you enjoy, your customer will love to see you, and you’ll have a full life, and you can do things that are really, truly enjoyable.”
Wacker, chairman and CEO of Laserfiche, a Long Beach-based document imaging solutions provider, encourages her 200 employees worldwide to enjoy their work, as well. That might mean anything from taking advantage of the foos-ball, billiards and pingpong tables in the office to participating in a company softball, sailing or running club after hours. Wacker says those activities have helped create camaraderie, which, in turn, has inspired idea-sharing and collaboration.
Smart Business spoke with Wacker about optimism and how her Chinese heritage influences her leadership style.
Q: How would you describe the culture of your company?
I am from Shanghai originally, but I’m educated in the West. If you look at our company, it is very diverse, and I really believe that I have combined the best of the East and the West.
In the Eastern culture, you want harmony, but sometimes you get stagnation you don’t grow. Western culture is very forced progress, so you push and push, and my goal is to combine these two, to not only have a harmonious environment but also allow for growth.
People look at growth as effortless. By doing every day’s work and doing their functions and applying themselves, they are actually creating growth, in a way.
Q: What is one trait all successful business leaders share?
People like myself are very optimistic. We are good problem-solvers, but we aren’t just limited to problem solving; we are builders. We try to build on what we are doing to build the next thing. We always continue to grow in that sense.
The real world, especially in technology, is changing all the time. If you don’t have optimism, you can’t survive. Some people always look at the negative aspect. I look at something and say, ‘How do I solve it, but how do I eliminate it?’
Instead of doing it in a direct way, I think about a clever way to avoid that problem, maybe by changing some infrastructure. For example, I built a support site for our customers so they can actually get more information rather than having a bottleneck where information only comes from us.
Q: What are the dangers of growing too fast?
Our growth is very reasonable. I don’t have any rich uncles behind us. Everything we have is from our people. Our people are our major asset, and our growth has been a managed growth.
Other organizations take a lot of money from venture people, and it’s this steroids kind of growth. I would love to have hockey-stick growth, but you have to create an environment to do that, rather than just growth for the sake of growth.
Every company and every organization has resources. How do you manage your resources cost-effectively and, in the meantime, provide service to your current customers? In our business, the software business, as soon as you release a product, you already have to be thinking about the next release. It’s moving all the time. So the way we do it is to service our customers, and our customers are our salespeople in a way. Word-of-mouth helps us spread to other people, their colleagues and their friends.
We basically get the message out with happy customers, and they help us grow. This is very organic growth.
Q: What advice would you offer a brand-new CEO?
It depends on the individual’s background, but first of all, you have to understand yourself. Do a soul-searching. What are my strengths? What is my style? What is the environment I want? What are my goals?
A lot of people don’t look at themselves as much. What are my limited resources? What are my assets? Then using those assets, try to avoid the limits and find the best way to reach your goals. Instead of going from A to B the direct way, sometimes there is a more clever way.
Leadership really has to have a direction. If leadership doesn’t have a direction, the whole organization is going to be spinning its wheels. Any CEO has to understand, like the book of Sun Tzu says, that you have to understand your environment, your heaven, your earth and what’s going on, and be able to tackle it.
You can tackle any problem, but you also know what your limits are and your resources are. Being a good company is really knowing how to manage your resources efficiently and getting the maximum amount of return and involving your people so they are enjoying the journey itself.
HOW TO REACH: Laserfiche, www.laserfiche.com or (562) 988-1688