As Beery saw both himself and his company getting older, the thought of what would happen to RBB and its employees after him began to weigh on his mind.
“As I approached 50 and had been running the company for a number of years, I knew that I wanted it to continue without me,” Beery says. “The continuation has always been very important for the people who work here.”
When Beery realized that his skill set as a leader no longer matched the skill set required by the position, it was a red flag that he needed to start thinking seriously about succession. As business grows and matures, Beery says a new brand of leadership is in order, and it’s not necessarily the company’s founder who is best suited to provide it.
“When you have an ongoing organization you really don’t want to expose 70 people to your personal risk level,” Beery says. “You need stability. You still need people who are entrepreneurs in your organization to push you to try new things, but you need better risk analysis and financial management.”
So when Hendrick joined RBB’s management team, Beery quickly realized that not only did Hendrick have the organizational skill set to lead the company, but his motivations and values jibed with those that Beery had spent decades establishing.
“Ours went from an entrepreneurship to a more professionally run organization,” Beery says. “It was very important that I find a person that meshed with me personally on the important values.”
Because companies founded and led by an entrepreneur often become dependent on that individual’s vision and leadership to function, Beery says that for an organization to continue to grow, an organizational structure must be implemented that decentralizes the emphasis on the company’s leader. Introducing Hendrick as RBB’s new leader helped Beery achieve that goal.
“You want to get the organization to the point where if the president is not there, you don’t know it,” Beery says. “You really want an organization where the upper management has done such a good job with the organization that they’re not needed. In the end, they are needed, but the customer is not going to notice the difference when he or she isn’t there.”
Achieving that stability and making a transition to new leadership does not come without potential pitfalls, however. Beery no longer runs the day-to-day operations of the company, and he says that it is of utmost importance that he make every effort to avoid stepping on the toes of his successor.
“You have to really be willing to not subtly undercut the other person,” Beery says. “That’s something that you have to be aware of, because you can really create the impression that you are unhappy with the person you put into the position.”
Though it is often a difficult decision for an entrepreneur to part ways with his brainchild, Beery says the best thing a leader can do is avoid being a hanger-on.
“Move it forward,” he says. “If you hesitate and wait too long, you can negatively impact the company, and you probably should do it sooner than you really think.”
HOW TO REACH: RBB Systems Inc., (330) 567-2906 or www.rbbsystems.com
Balancing actBruce Hendrick, president and CEO of RBB Systems, shares his thoughts on what a new leader needs to do when taking the reins of a company from its founder.
“The balance that you have to find is to preserve what’s healthy about the culture, but don’t be afraid to say, ‘Here’s what the business needs.’ Be clear that you’re trying to preserve what’s best in the company, but don’t have any fear about making the right decisions, because that’s your job.
“Always tell the truth, whether it’s popular or not. It’s also your job to hold a mirror up to the organization. That’s what the next generation leader must do. Don’t judge it, but say, ‘This is how it really is.’ That’s an important value you bring as the second generation, so don’t shirk that responsibility.
“The employees should not give the benefit of the doubt. You need to earn the benefit of the doubt. Trust is not given lightly, and loyalty is not something to take for granted, so it’s firmly on the shoulders of a new leader to establish a direction, earn credibility and lead by having solid relationships with the people.
“The main point is to honor the past but not live in it. Make that a mantra.”
“You might design a product and all you seem to care about is if it is a cool product, and yet sometimes you don’t think about whether the customer can even use it,” says Dolin, chairman, president and CEO of Noteworthy Medical Systems Inc. “Is it going to make the customer successful?”
In 1997, Dolin founded Noteworthy Medical Systems, which, through its flagship product, NoteworthyEHR, provides health care professionals databases to manage and update patients’ electronic medical records. At the time, Dolin says, electronic medical records had only just begun to gain popularity, with less than 2 percent of the country’s 800,000 physicians utilizing EHR technology.
“For this product, analyzing the market size was easy because we knew doctors didn’t have the product,” Dolin says. “There was a huge, huge market.”
After assessing market size, Dolin says the next step in developing a product is examining the competition. By analyzing the downfalls of similar products, Dolin was able to avoid the same mistakes in developing NoteworthyEHR. In this case, other electronic medical records had failed because doctors had found them too complex. Although Dolin says it can be nearly impossible to predict how a market might embrace a new product, a company can be more in touch with the needs of its customers by soliciting feedback and input before a new product is introduced.
“The way we started with the product was to say, ‘How can we simplify this?’” Dolin says.
“We built a demo of it fairly rapidly and we started showing it to different people in health care — physicians, nurses, research people — just to make sure that it fit the needs of the organization.”
Dolin says perhaps the most significant difficulty in introducing a new product is that customers might simply not be ready for it.
“You have to understand your market, and the biggest challenge that we have faced over the years is that we’ve been too far ahead of the market,” Dolin says. “We know what should be the endpoint, but we try to get there too quickly with our customers.”
Seeing that doctors and other health care professionals had begun to use tools such as the Internet and e-mail, it seemed to Dolin that his market was becoming increasingly comfortable with technology and perhaps more likely to react positively to his product. In reality, in its beginning stages, Note-worthyEHR was still ahead of the market.
“A lot of small companies start out and don’t understand that while they think their product is great, they don’t understand there might be a lot of reasons that customers don’t want to buy it,” Dolin says. “We looked at our competition saying, ‘We know we’re better than the competition and we’re a better value because we priced our product lower than the competition.’ Yet in the first couple years, we didn’t lose prospects to the competition, we lost prospects to no decision. They just didn’t care about the product.”
As Dolin points out, in most cases, smaller, more entrepreneurial companies are generally ahead of the market, while larger, more established players opt to be behind the market, where they can use their bottomless pools of resources to develop better versions of products already recognized in the market.
As such, introducing a new product will always be a challenge for a young company.
“Until something becomes the standard in an industry, it’s hard to build your own demand for it,” Dolin says. “With breakthrough products, you have to generate the demand yourself, and that is very difficult for a new company to do.”
HOW TO REACH: Noteworthy Medical Systems Inc., (440) 684-6800 or www.noteworthyms.com
JCS, an architectural specialty design, fabrication and installation company, surpassed $10 million annual revenue in 2006 and is anticipating a 35 percent growth rate this year, and Waksmundzki says there’s no doubt what was responsible for the company’s growth.
“Had we not gone through that change process, had we not forced our culture to meet our vision, we would still be back where we were revenue-wise, we’d still be back where we were attitude-wise,” Waksmundzki says. “They are directly tied to each other.”
Waksmundzki spoke with Smart Business about the power of change and how to develop the right culture for success.
Q: How would you describe your culture?
We’ve really transformed this company from what you would see as a typical mom-and-pop company into what we would expect to be a professional environment. With that, there are a lot of steps you have to learn along the way.
Our values of integrity, teamwork, respect and responsibility are really the rules now that we live by. One of the things that we preach around here is following those core values, and if you follow those core values as a leader when you make a decision, you need a decision-making process that you follow. When we started as a mom-and-pop company, you don’t usually have that discipline that you actually have a process for making a decision.
When we started this, we didn’t know what a decision-making process was. Understanding that decision-making needs a process is a very important piece for young business owners. Obviously, a lot of decisions are made by gut, but nevertheless, there needs to be an identified process for decision-making.
Q: How did you develop that culture?
It takes living those values, and the big one is integrity. That’s the one that you see a lot and you hear a lot, but really trying to live it not only when you’re walking the halls of the company, but you take it home with you so every single day when you come here, the decisions that you make have to be made following the rules. That’s what makes the biggest impact.
When you mix those values and you make your decisions based on those and you are able to carry it out, meaning you walk it every day and you live it every day, your life transforms. Now you’re living a life of excellence. You’re living a life full of integrity.
If everyone’s doing it, the organization has to follow. It’s common sense. If you’ve got 10 guys and they’re all practicing excellence, the organization is going to follow.
As the CEO, it’s a life of conflict. You’re constantly in the role of solving the next problem, whether it’s big or small, and when you’re following these core values and you follow that type of culture, people are interacting with you and they’re seeing how you make these decisions. When it goes down to the next level of management, they’re practicing those same values.
Q: Why is it important that everyone practice the same values?
If everyone doesn’t know which way you’re going, everyone can go their own separate way. You need to have that unified vision and that focused approach.
I can imagine four guys jumping into a car and saying, ‘We’re all going to go on vacation,’ but if each one wants to go somewhere else, the end result is going to be a lot of haggling and hassling and, ultimately, some compromises that might leave three of the four very unhappy.
In order to get proper satisfaction, you need to know where you’re heading, and myself, as the CEO, I’m the one who’s responsible for orchestrating that vision.
Q: What are the positive benefits of having the right culture?
The culture you create is the creation of the customer experience, meaning the culture has to be equal to the goals of the organization. If I had wanted to stay a couple-million-dollar company, I could have stayed with a less professional environment. Putting the growth model and plan in place that we did, it demanded excellence and it demanded our ability to be best in class.
Without the proper culture, your people cannot take you there. It ties back to the vision and keeping everyone on board with the vision.
If you don’t create the correct culture to attain your goals, you will not attain those goals. The culture has to be equal to what you’re trying to achieve. If it’s the right culture, it can be used to dominate any marketplace.
HOW TO REACH: Joint Construction Services, (847) 349-1580 or www.cabworks.com
If you deal with banks on a regular basis, chances are you’ve spent your fair share of time waiting in line to make a deposit, withdraw or payment at least Gary Lewis Evans hopes you have.
More than a decade ago, Evans, president and CEO of Bank of Internet USA, began considering the potential of using the Internet to provide banking services without the hassles of more traditional banks.
“I started working in the concept of Internet banking in 1992, when I first saw the Internet and what it was doing,” Evans says. “It was in its infancy. The vision was there, and it was something I couldn’t let go.”
In 2000, after years of working through regulatory red tape, Evans launched Bank of Internet USA and has since grown the company’s annual revenue to $34 million in 2006 despite employing just 27 full-time staff. Evans says that efficiency has been a key to Bank of Internet USA’s success.
Smart Business spoke with the Net banking pioneer about the benefits of embracing change and constant improvement in a growing company.
Q: How would you describe your culture?
We are constantly tearing down and looking for a better way. Everything can be done better, we just haven’t figured out how to do it yet. So we’re constantly tearing down, redoing it, using a constant improvement philosophy, and we have created a bank operation that is very unlike any other.
The newer the company, it can be a real task, because sometimes you start going down a road and maybe you’ve taken a hundred steps, but then you can really fine-tune a process, speed it up, make it more efficient and keep the organization lean.
In our development, our whole strategy was to automate for the customers, give great service but really keep the growth in our staff to a minimum, to really get the most efficiency out of everybody and design systems and styles to be the most efficient. As a result, it’s very easy for me to manage by wandering around, and all of the managers, as well.
It becomes a direct one-on-one communication, and people can literally see what we’re trying to do on a daily basis. For a company of our size, that’s critical.
Q: How can a leader motivate his or her staff?
People really do have different motivations, different hot buttons, so to speak. You really have to tailor it to the different managers’ styles. It’s not one-size-fits-all.
The better a leader is, the better they understand their different employees and how they can work the best with them. For some people, it’s a very matter-of-fact this is how you do it.
Other people have a more intelligent way of working through it. You have to get them to really understand and buy in to it completely. Everyone is unique.
It changes day-to-day, and as the process moves, we have to modify as leaders, and the leaders below me have to modify their staff, as well, and communication is, of course, the most important part of that, no question about it.
Q: How does a leader’s responsibility change as his or her company grows?
As a company grows, you develop greater depth in management, which is really positive. So as a leader, you really pull back and let the other people lead.
You always have to be a leader, but your tasks clearly change as the organization grows, and it changes in that you’re letting other management take more control. It’s important to develop the depth to grow and to get other points of view.
As we grow, we need other ideas and other concepts. If everyone is thinking based on the original philosophy in our case, continual improvement it lets them pass that through, as well.
Q: What is one trait that all successful business leaders share?
Their vision and how they can pass that vision through the company. Look at someone like Steve Jobs. He keeps his vision going and keeps his company moving in that direction.
Any great company is that way. It could be the Fords, the Rockefellers, the Firestones, you can go right down the line and all the way up to the current Internet-type entrepreneurs. Having that vision, that very clear vision, and working hard is a huge part of it.
If you don’t have that vision and the drive, you don’t have a foundation for that new company. Maybe you could become a franchise operator, and that’s not to knock it, but if you’re creating something new, you really have to have that vision and drive.
HOW TO REACH: Bank of Internet USA, (877) 541-2634 or www.bofi.com
Give employees ownership. I run a business that is relatively small for a public company, so I try to instill a sense of direct ownership in the business that, if you take care of this business, it will take care of you and your family.
I try to impart upon our employees that they’re with a young organization that’s growing and that there are not multiple layers of management like Procter & Gamble or GE. They can be recognized and noticed, and that plays well for us.
Our goal is to constantly communicate that there is opportunity and advancement here and that this is the best place for them to invest their talents versus some larger corporation. It’s important not only to talk about it, but to deliver on it and measure it to communicate it.
We talk about advancement opportunities, we try to hire from within, we talk about training and enhancement of internal skills, and we do that. If you’re going to play that card as a leader, you have to be prepared to be measured against what you’ve said. We track our tenure, we track our advancement, we track our successes, and then we communicate that to our employees.
Improve effort with recognition. If employees just feel like they’re coming to work and going to the same cubicle and their day is not going to change and there’s no way to be recognized, they get bored.
If you can eliminate the redundancy or the monotony of a job responsibility, you get higher productivity. If you’ve got somebody coming to work for you thinking they can make a difference or thinking they can be recognized, they’re going to be happier and they feel like they have a voice in the direction of their company.
I don’t want to overstate it, and it’s harder for multibillion-dollar companies, but you still have to have a culture where people feel like they can be recognized.
We spend a lot of time training people, and our retention tends to be better than other organizations who view people as expendable. There is a lot of money lost and downtime when you have turnover in key positions.
We tend to have a little bit better retention and overall effort because people are genuinely invested in the business they work for versus just looking for a paycheck every two weeks.
Commit to proactive communication. People don’t spend enough time on internal and strategic communications, and it creates a huge amount of anxiety and lost energy and time and distraction.
If you leave people to their own devices to figure things out on their own, they typically get it wrong. We try to do our best, we don’t always get it right, but we’re sensitive to the fact of when we’re communicating information and when we’re not. We just recently did a couple acquisitions and we were sensitive about what it would mean to the acquired companies’ employees, but just as much what it would mean to our employees.
We tried to address those issues on the front end as opposed to the back end, so we were proactive versus reactive. More corporations need to be proactive on communication versus reactive.
Know who you are and communicate it. You can’t have everyone going a different direction. Brands are hard to develop. If you set the basic tenets of ethics and quality and people know what to sell every day, day in and day out, it makes everyone’s job a lot easier.
We’re quite clear about what our direction is and we say it over and over again that we strive to be the highest quality, diversified professional staffing firm not the largest staffing firm, but the highest margin professional staffing firm. There are messages there.
We’re not a bulk seller of human capital, we’re a professional organization. We’re not commoditizing our business and we communicate those tenets every day. Understand your business, pick the four or five things that are critical to your success, and repeat (them) often.
Use good judgment. It doesn’t matter if you have a Harvard MBA and you can do three different stochastic models in your head, if you don’t have a fundamental business judgment about what’s right and wrong and long-term benefit versus short-term gain and be able to make a quick judgment on things like that, you can’t learn it. That’s inherent.
And no matter how clever you can be and no matter how close you can get to the line without crossing it, you’ve got to have a fundamental, sound position on ethics. No matter how much you can make off of it, if it’s not good for everybody, or if it doesn’t look good, you’ve got to resist the attraction to do something like that.
Judgment and ethics allow people to be successful over the long-term versus at a particular measurement date or event.
HOW TO REACH: On Assignment Inc., (818) 878-7900 or www.onassignment.com
When Rex Bright joined SkinMedica Inc. as president and CEO in 2001, the dermatological pharmaceutical company had annual sales of $1 million.
By the close of 2006, drawing on years of experience leading companies through turnaround and start-up phases, Bright had helped grow SkinMedica’s revenue to about $40 million, in part, he says, by continuously making an effort to improve the company’s culture. “Culture is something like a marriage,” Bright says. “You’ve got to keep working on it and it’s never perfect, but you have to keep confronting it.”
Smart Business spoke with Bright about how improving culture requires constant communication with all levels of his company.
Q: How would you describe your culture?
We use an acronym called ETC, which doesn’t stand for ‘and so forth.’ It stands for Entrepreneurial Team Culture. We talk about that a lot.
If you think about it, being entrepreneurial and being a team player sort of conflict with each other, but if you’re successful, it’s the degree to which you can do both. Think big, stay humble and surprise people. We really try to live that entrepreneurial team culture. You’re never perfect at it, but you keep working at it, and when you see behaviors that are outside of that focus, you have to say, ‘Wait a minute. We didn’t really adhere to our culture. We didn’t give that a guy a chance to try his idea, even though it has a pretty good chance of succeeding. Let’s not shoot him if it doesn’t work; let’s fix it and move on.’
The days are over when an entrepreneur says to everyone, ‘Get your pencils out, and I am going to tell everybody what to do,’ because if you have experienced, smart people and create an environment that they like to work in, they will come up with much better ideas than yours. Some of the ways they implement them might be quite different, but you have to give them freedom to do that.
If their style conflicts with the culture or the way we operate, if someone is looking to affix blame or take credit, that gets knocked down and confronted, but different people manage different ways.
Q: How can CEOs stay in touch with their employees and their company?
Once a month, I have a pizza lunch with everybody who has a birthday that month. You get people from the warehouse, you get VPs, you get all departments, and you sit around and talk about how you’re doing and what you need to do to get better. Another thing I do that people tease me about is once a month, on a Saturday, I open all the mail. You find out how many direct mail pieces you sent out that came back because they had the wrong address, you find out what vendors you’re dealing with.
I put fake meetings on my calendar so that my calendar doesn’t get filled up. If I come in on a day when my calendar is full from 8 in the morning until 6 at night, it will probably be one of the most unproductive days I’ve ever had.
My secretary and I laugh about it, but we have a code word for a fake meeting. What that does is it gives me time to step back and think or time to walk around and talk to people. You have to spend a period of time listening and learning. ‘MBWA’ means management by walking around. You have to walk around and talk informally to a lot of employees at every level in the company.
Q: What traits do all successful business leaders have?
Leadership and vision. From a vision point of view, you have to show people what’s possible and sometimes what’s possible hasn’t been done before.
You have to make them believers, and you really have to believe it yourself that you can get there. One skill of leadership is knowing when to drill down and manage more closely, and when to back off and let people have more autonomy.
The other part of leadership is inspirational. One trait that all CEOs must have is you have to be able to sell. It’s what we all do. I’m selling the board, I’m selling Wall Street, I’m selling investors, but you’re also selling your own management team on how good they are and what they can accomplish.
A lot of leadership comes naturally, but you can get better at it. I’ve learned to listen better just from mentoring, and my mentoring comes from the people who report to me.
An important part of leadership is humility. You have to be humble enough to be able to listen to someone’s idea that’s very different from yours, and sometimes it’s hard to open your mind.
But if you do, often you’ll find that their idea really is better than yours.
HOW TO REACH: SkinMedica Inc., (760) 448-3600 or www.skinmedica.com
When Doug Johnston became president of SCI Real Estate Investments LLC two years ago, it didn’t take him long to recognize the growth potential of the company. “Within the first week I was here I suggested, even though we had only about 30 employees, that we would have 100 employees in a year,” Johnston says. “That was certainly an eye-opener for the people who were here.”
In just two years, Johnston has taken the potential he saw and made it a reality, as the property investment firm has grown from one Los Angeles office to 28 locations nationwide and in 2006 posted revenue of more than $40 million. Smart Business spoke with Johnston about why it’s up to leaders to model what they expect from their employees.
Q: How would you describe your culture?
The culture here is work hard and play hard, and finding that balance is a tough thing to know sometimes. Some people are really focused on work all the time I tend to be one of them but it’s important that we all step back and enjoy our lives and each other. We focus typically on once every three to six months having a really big, fun get-together, whether that’s a picnic or an outing at the race track or whatever, but something that is heavily thought out and has absolutely nothing to do with work.
The first step in building that kind of culture is twofold. First of all, it’s setting the pattern that there is nothing here I wouldn’t do personally. People in our company often see a pretty fast pace and orientation from me personally, and that sets a pattern.
I demand a lot of others, but I demand even more from myself. For me, that has been a very effective management style, and it breeds some degree of respect that you’re not being handed something that somebody else would not do.
Q: How would you describe your leadership style?
My leadership style is very much hands-on. The pattern I’m trying to set throughout our company is a very high attention to detail. Initially, I set that pattern myself, and if I then see that the department heads and individuals pick up that pattern, I’ll withdraw and let them do their thing.
Attention to detail, in my experience, is always a good thing, provided it’s not overdone and provided you do allow focused people to take over their own show. You have to be very mindful of when to step in and show people the pace you want, the attention to detail you want, and critically, when you have to step back and let them do their thing.
That’s about a three- or four-month process of seeing how the employee thinks and making sure that they’re thinking with enough passion and dedication to sustain themselves.
Q: What’s the most significant lesson you have learned in business?
I learned a very painful lesson 20 years ago when I counseled an employee in front of his peers. That was a dreadful mistake, and accordingly, that lesson was that counseling always occurs in private.
Never, under any circumstances, embarrass an employee in front of others. It’s a frightful scene of misplaced respect and lost trust and worse. Employees always respect being told in private what they’re doing right or wrong, and they never, in my experience, enjoy being told those things, and certainly being counseled negatively or reprimanded, in public.
The leader loses respect. There is sort of the Bobby Knight, basketball coach theme that slapping people around, either physically or mentally, is perhaps for him a successful coaching style, but in the business world, it’s very problematic.
Q: What is the danger in growing too fast?
One danger to growing too fast is losing track of details. Service slips, and people don’t know what’s expected of them or they’re not well-trained.
We’ve done a pretty fair job of keeping all those things in check. A few simple things helped us avoid that, such as communication solves all problems.
It was pretty uncommon for a company our size two years ago to implement a plan whereby virtually all of our employees above an entry level were on BlackBerry. The complexity of our business is such that we simply need to have everybody in constant communication with each other.
The mantra is communication solves all problems, and that extends to the technology of virtually all our above-entry-level employees having a BlackBerry and re-emphasizing that very saying in all staff meetings. When people hear that over and over, they’re not hesitant or afraid to ask the boss, and those things are important.
HOW TO REACH: SCI Real Estate Investments LLC, (310) 470-2600 or www.sciproperties.com
In the wake of the terrorist attacks of Sept. 11, 2001, when many of his competitors were scaling back operations, Ted Scislowski took the opposite approach with Nationwide Hospitality Inc. Faced with an airline industry fraught with bankruptcies and financial uncertainty, NHI, a corporate travel service provider, instead aggressively sought new customers. “During the bankruptcies, I believe a lot of my competitors were cutting back their services trying to protect their companies financially,” Scislowski says. “Yeah, we were hurting, but rather than constrict, we wanted to expand and we went out and created more opportunities.”
Scislowski’s gamble paid off. The company has since grown at a 40 percent clip annually and now provides services in more than 20 cities. Smart Business spoke with the president and CEO of NHI about how staying ahead of the competition means being willing to think outside the box.
Q: How would you describe your leadership style?
When we hire people, I try to hire people that think on their own and that are experienced in the field we’re in. We do a lot in the airline business, so the talent we need to hire is one that can run itself.
They don’t need to be managed or hand-held, they can think outside the box and manage the problems we give them. The managers around me are very independent and free to do the things they need to do and run the tasks instead of being micromanaged.
In any business, if you’re standing still, your competition is going to be coming up with more creative ideas and better ways of doing things. Micromanaging to me is locking up the employees in one thought pattern, tying their hands and making it a lot harder for them to do their job. Giving them the freedom, they go outside the box and think of new ways to do things.
What we want to do is come up with creative solutions for our customers. Even though maybe one thing is working, come up with better ways to handle it. Continually come up with ideas. Giving my managers that kind of freedom makes them more productive.
Q: What do you look for in a new hire?
My interview process is probably one of the hardest to get through because not only do we look for experience experience in this industry is a necessity we want people that are not set in their ways. Hiring a person that has locked in one way of doing things really stymies the company.
During the interview process, I look for imagination, initiative. I want to see if, given this project, how they will run with it. Are they thinking outside the box? Are they looking for unique solutions, or are they giving me standard solutions in the industry?
Flexibility is the key to growth. It’s been the key to our growth. We’ve been able to jump leaps and bounds over our competition because we’re going to the same customers, but we’re coming up with more creative solutions.
Our employees are not only able to teach me, as well as my customers, new things, they’re also able to create new ways of handling things, and that’s what it’s all about. As technology changes and systems change and new problems arise, we want to be proactive and make sure we’re ahead of our competition in finding these solutions for our customers.
Q: What is the most important lesson you have learned?
Take nothing and take no customer for granted. The one reason I like to say, ‘If it ain’t broke, break it,’ is it’s too easy in today’s world for competitors to come up with new ideas, to come up and pay attention to a customer that you feel is yours and all of a sudden, one day, you lose it.
In every industry, people are changing. It is important that nothing is taken for granted. Make sure your customers are paid attention to, your employees are paid attention to, and realize that you just can’t stand still. You want to exceed your customers’ expectations, so you have to keep moving forward.
It’s not just being reactive but being proactive. It’s being able to come to a customer and say, ‘Look, we see a need that you’re going to face because we foresee a problem.’ By being proactive and communicating to that customer, suggesting some courses of action, it makes the customer feel secure that, ‘We’ve got a company that’s got our back. They’re watching out for us. They’re not just reacting to a problem that pops up, they’re foreseeing the problems and they’re generating new solutions to get ready for them.’
The best advice is to keep growing and keep changing. Whatever your product or service is, don’t ever be satisfied with what you’re doing. If you’re satisfied, someone is going to come up and outgrow you and take your customers.
HOW TO REACH: Nationwide Hospitality Inc., (847) 718-9181 or www.nationwidehospitality.net
When John Westerberg inherited the reins of the family company from his father in the 1960s, Nelson Westerberg Inc. had a solid reputation as a local Chicago moving company. But it didn’t take long for Westerberg to introduce a new philosophy, one aimed at expanding the company beyond small, neighborhood accounts.
“If you’re going to get on a national and a global plane, then you’ve got to have a whole different approach to life, and that has to be that you’re absolutely the best thing out there,” Westerberg says. “It’s all based on quality.”
Smart Business spoke with Westerberg, whose company posted $78 million in 2005 revenue, about how growing your business really can be as fundamental as being the best you possibly can.
Q: What is the key to building customer loyalty?
If your initial philosophy in being in business in the first place is to be better than your competition, then your initiative is going to be quality. There are three Qs in business: quality, quality and quality.
If you’ve got a service that’s directed toward that initiative all the time, if that’s the main focus that you have — to be a quality provider, a quality supplier, a quality company to your customers — then your customers are going to stay with you for a long time. I’ve never had a customer come to me and say, ‘You know, you’re the best thing since sliced bread, you are absolutely the best there is in the industry and we love you, but we can’t do business with you anymore.’ I’ve never had anybody tell me that.
If you can’t deliver the quality, then you’re not going to last very long in our company. I don’t care if you’re an owner/operator, an operations manager, a customer service representative or a warehouse man, if you don’t have at the forefront of your thinking every single day you come to work that you’re going to do the best you possibly can for our customers, you’re going to be in trouble in our company.
I’m driven by that myself. I’m not going to have anything with my name on the door that’s going to embarrass me.
Q: How do you set goals?
The Japanese have a very good philosophy about business. They don’t worry quarter to quarter or half to half or one year to another; they see a very long-range vision.
I see my company exactly that way. I don’t worry about how much profit we might make in a three-month period, I’m interested in how we are doing on a long-term basis. I want to look out there four, five, six years and see where we want this company to be and ask if we are still happy with our business model.
Every time I have a meeting with our top people, I ask them the same question: Is our business model still viable in today’s marketplace? That, to me, is one of the absolute most important things. Every company has a business model, and every company has a culture, but is it still viable in today’s marketplace?
Q: How would you describe your leadership style?
I’ve always believed in order to run a small business effectively, you’ve got to be involved in the processes and you’ve got to be involved in truly managing the company and making sure that the initiatives that you set out for your people are being carried through.
Otherwise, you’re going to lose your business really quick. There’s no guarantee in American business that you can make it from one year to the next if you let go of the process and you don’t manage it effectively and closely.
If you’re far removed from the street, where things are really happening for your people and for your company, if you step back too far, you might get a nice macro look at your company, but it won’t tell you what’s really happening on the ground. In our business, or in any business for that matter, you’ve got to know what’s happening on the ground.
That’s the difference. Don’t confuse it with being a micromanager. This is hands-on management, understanding what your people are doing but not necessarily trying to do their job for them.
Q: What is one thing that can limit a company’s growth?
Losing track of where you’re trying to go. If you don’t have a clear idea of where you want to go and what customers you want to serve and what company you want to be in, you can’t grow anything. You won’t know what to do or how to even get the thing started.
Success is defined by your customers and by your people. You’re successful if your customers love you, if they think you’re doing a great job for them and they don’t think there’s anyone else out there who could do as good a job as you’re doing for them.
Mark Weinstein a lawyer by trade had no formal business training when he founded MJW Investments in 1983. Now, more than 20 years later, one lesson he learned then still applies now.
“Surrounding yourself with the right people makes your life easier,” Weinstein says. “You should invest a lot in your employees and a lot in their training.”
By surrounding himself with the best people and creating a culture built on accountability and growth, Weinstein has expanded his Santa Monica-based company into one of the fastest-growing developers in the region. MJW’s revenue has grown from less than $45 million in 2003 to more than $70 million in 2005.
Smart Business with Weinstein, president of MJW, about how he builds a culture, inspires employees and uses community service to make himself a better leader.
Q: How can CEOs motivate their employees?
We have accountability groups and personal growth groups where we feel we have a value-added component to our company by having consultants that are working with people as individuals and as a group. They improve not only their work skills, but improve their ability to get along at home with their significant others and their family. My employees feel that that’s a value-added.
When we set the example of doing good things in the community or doing good things in our company, it inspires all the people in the company to want to do better. We encourage not only personal growth but business growth by promoting people and giving them the opportunity to have as much responsibility as they can handle.
By constantly raising the bar, communicating our goals, having an open environment and supporting them both personally and in business, it makes people want to work for you.
Q: How does your community service influence your leadership style?
I get involved in the community for two reasons: one is that doing good things is one of the values of our company, and another is that you meet other business leaders and sources that you might deal with in your business.
I lead by example of what I do in the community and by being a visionary, and I surround myself with really good people. I have a management structure that’s well-defined, and each person knows their role and we support each other.
I give a lot of feedback and behind-the-scenes support, but I try to let the other members run the day-by-day stuff. I don’t have to be so much the key person in integrating every detail of the company.
I have other great people, so I don’t have to think about whether they’re doing a good job or not. I trust them, and they get the job done, and I get the benefits of their work ethic.
Q: How do you know when you’ve found the right person for the job?
It’s more important who a person is than what a person does sometimes. People development is often not focused on, and that’s really key because you can always train people to do work, but if they’re not the right people, then it’s kind of hard.
Sometimes there are people who don’t want to work for you. They will self-select out.
If everyone else is on a certain road and training and the other person doesn’t fit in, a lot of times here they’ve self-selected out where they realize they’re not really into personal growth or business growth. There’s accountability here, and they don’t want that, so they leave.
Q: How would you describe your company culture?
Our culture is one that’s committed to growth, accountability and creativity. Those are our values, and we meet a lot and we have defined what our values are and what our goals are.
When we make decisions, we often ask whether the decision is consistent with our values, and it creates a good environment because everybody knows what our values are. Our goals are clear.
Our environment is very open to having people communicate to each other. We have group meetings where we network and brainstorm, and even if it’s not your area of expertise, everybody has good thoughts, and we try to run things by the brain trust of everybody so that we can get better ideas and be more efficient.
Q: How do you measure success?
Success is a very individual thing. We all set our own personal business goals, and when we do things both in the community and at work that achieve our goals, I think that’s success.
But what happens in most businesses is you keep raising the bar. You set certain goals for the company and as individuals, and you reach those goals and you suddenly move the bar up. So you’re always chasing the sky.
Success is an ever-changing target, but accomplishing your goals and giving back to the community and being recognized for the work that you do that’s success.
HOW TO REACH: MJW Investments, (310) 395-3430 or www.mjwinvestments.com