Howard Wander likes to joke about his wife’s claim that he makes at least one wrong move every single day. He doesn’t question her opinion, and in fact, he is comfortable adding that his partners on the management committee at Fort Lauderdale-based Kelley Kronenberg feel the same way about him.
“I think that’s a sign of strength to be able to say that you’re wrong and admit that you’re wrong,” says Wander, one of the managing partners at the 140-employee law firm. “That’s a key essential to leadership. Nobody is right all the time.”
But it takes more than humility to succeed in today’s business world. Wander credits his ability to work with his management team and work through their collective mistakes for the firm’s growth over the years from two offices and seven lawyers to eight offices and more than 50 lawyers.
“Part of it is questioning each other,” Wander says. “We are all different, and we come from different backgrounds, and we approach things differently. But we have a shared vision of our future. Sometimes we think it’s a different road to get where we want to be and we don’t always agree on that, but we have that shared vision of what we want to obtain.”
The key to coming up with a good model, where you sometimes agree and sometimes disagree, but you ultimately get to the same place, is constant communication.
“If I have something that I don’t agree with with one of my partners that I think is important, I’ll contact him, and we’ll talk about it,” Wander says. “Communicate and get it off your chest. You can’t let things build up. That’s a recipe for disaster. We try to be very open with each other and talk things out, should there be a question.”
For instance, if you’re in a management team meeting and someone else on the team says something you don’t like, don’t just bury your disagreement.
“There are times I may call one of my other partners afterward and say, ‘Hey, you made that comment about something. Let’s talk about that a little bit,’” Wander says. “There are times I’ll say, ‘You know what, you were right. I was wrong.’ That’s the opportunity for growth.”
You need to make yourself available for these conversations to take place. For Wander, that means being available on his cell phone or at his home whenever someone needs to talk to him. It may not be convenient, but it comes with the responsibility of being the leader of your business.
“Someone asks me a question, they want it now,” Wander says. “They don’t want to hear about it two days from now.”
When you make yourself available and open your literal and figurative doors to your people and your clients, you encourage your employees to do the same.
“The important part is to have everybody on staff sharing that vision and sharing that passion that I have and that others have to attain that vision,” Wander says. “They are part of that team that is going to help make that vision occur.”
Wander says the reason the firm has been able to grow is that everyone is committed to finding solutions to problems quickly and effectively resolving differences so that business can move forward.
“I need those people to have the confidence in me and the other partners on the management committee that we’re making good decisions and we’re all on the same page and we’re all working toward something together,” Wander says.
How to reach: Kelley, Kronenberg, Gilmartin, Fichtel, Wander, Bamdas, Eskalyo & Dunbrack P.A., (561) 684-5956 or www.kelleykronenberg.com
Use your resources
Do you talk to your current employees when you’re looking to make a hire? If you don’t, you might be making a big mistake. Your staff can be a great resource for finding people who will be a great fit in your organization.
“I need my key people to find new key people,” says Howard Wander, one of the managing partners at the 140-employee Kelley Kronenberg. “They are recommending people to me who they know fit our image and fit our mindset of who would be a successful person in our firm. Occasionally, we do go out, but it’s hard because you don’t know who you are getting and if they are going to share the passion and vision of what you’re trying to attain. It starts with talking to your people and letting them bring people to you.”
One of the essential parts of any successful business is continuity. As people advance or leave your organizations, others need to be able to step up and fill their roles. When you’re working with your employees to find new people, that continuity is much easier to maintain.
“You’re only as good as the guy next to you or the support staff you have,” Wander says. “If there is a weak link next to you, the whole team falls.”
Charley Shin did have a moment when he wondered if Charley’s Grilled Subs was going to make it. It was actually a very long moment, one that lasted about 10 years, as he recalls.
“I underestimated the time and the cost of the growth that would take place,” Shin says. “I started out with a business plan that we would break even when we had about 20 stores. When we hit the 20 stores, we were still losing money.”
Shin kept revising his goal to finally become profitable for 30 stores, then 50 stores and then 70 stores. At each step, he was still losing money.
“It wasn’t until we had about 100 stores that we were breaking even and making some money,” Shin says. “It was over about a 10-year period. It was a very intense, grueling, excruciating 10 years.”
There was also the fact that his mother had let him borrow from her life savings to start this business. That only added to the stress Shin was feeling about his business.
“I wanted to give up,” Shin says. “I really did want to quit. But I come from a Christian background. I just knew this was something I have to do even though I wanted to quit.”
It’s that kind of persistence and commitment that helped Shin stick with it through the tough times and enabled him to finally reap the fruits of all his labor. Today, Charley’s has more than 400 units in 44 states and 15 countries around the world.
Shin says the key to getting through tough times, whether you’re just starting a business or trying to manage an established company through a challenge, is your mindset and the way you present yourself to your people.
“I don’t think I ever gave an indication that I was going to quit,” says Shin, the 5,500-employee company’s founder, president and CEO. “Think about the reason why you’re doing it. Each person may have a different reason.”
Shin’s reason was to build a successful business that provided a great product to customers and provided a great and fulfilling place to work for employees.
“We have people who are investing their life savings believing in us and believing that this concept will do well,” Shin says. “In order to fulfill our promise, we just have to continually invest within our infrastructure and with our personnel and increase our expertise. It was a really trying and difficult 10 years. But looking back, I don’t believe I’d be where I am without those 10 precious years that put us through the fire and gave us a ton of experience.”
Charley’s, which is legally known as GOSH Enterprises Inc., took in $220 million in 2009 revenue. That’s a long way from his take at that very first store on the campus of The Ohio State University back in 1986. As he has grown the company, Shin has learned how to find the right people and how to help them get through that inevitable first hurdle.
Find the right people
Shin has interviewed a lot of people over the years to assess their ability to lead one of his franchise locations. He’s learned that you can learn a lot about the attributes and personality traits of an individual from your first impression.
“Most people do not come in with a disguise,” Shin says. “Even someone who comes in with that intent, after a while, it all becomes disclosed.”
In other words, don’t make an interview harder than it needs to be.
“Our interview usually lasts a whole hour,” Shin says. “As we sit in the room, we tend to have a pretty good gauge on what type of person that is. We’ll just ask questions as to their background. What you have done before? Tell me about your background and your family. Why are you here? How do you like to spend your time? Through asking those questions, we get a fairly good read on the person, and we can tell if they’re just looking for a get-rich-quick scheme or they are genuine and really a hardworking person.”
If the person is more interested in the financials than your values and philosophies in leading a business, that should definitely be a red flag.
But it’s not only this person’s skills and personality that you’re measuring. You should also be thinking about how this person would fit in your company and how he or she would handle leading one of your business units.
This becomes particularly important for Shin when he’s assessing someone’s ability to be a franchisee in his company.
“It’s their business, but they are not in business for themselves,” Shin says. “They are in business with our brand. They are an extension of our brand and they have to represent us. We have a fairly clear expectation of what it is that they need to do.”
When you have that expectation in mind at the start and know what a good candidate looks like, you’ll have a lot more success judging whether someone is right for your business.
“Don’t get blinded by money,” Shin says. “Don’t focus on growth at all. I really do believe the business will grow out of healthiness rather than growth per se. Pick the right people because the people are going to be 80 percent of what’s going to bring you success.”
So what if you get into a situation where you just can’t seem to find the right person to fill the position? Shin says resist the urge to just plug anyone in and wait it out.
“I would really focus on picking the right people even though there may be fewer of them,” says the man who waited 10 years for his business to really take off like he wanted it to. “I don’t want to be a leader where I look at everyone and say, ‘This is the way to go. Let’s go together.’ Each of them has their own job to do or their assignment to accomplish and that’s how we’re going to grow.”
You need someone who offers examples of projects they’ve led from the start and talks about how they overcame challenges to make that project a success. Otherwise, you’ll constantly have to be holding their hand.
“Our franchisee has to be a person who is committed to serve people,” Shin says. “They have to be outgoing and have a good nature about themselves. A very critical success criteria is people who are courageous and bold and who will step out of their comfort zone. If I believe the person has that quality of wanting to serve and is a bold and courageous type, that is really my person of choice.”
It’s a level of patience to find this type of person that has helped Shin successfully grow his business.
“I’m really upfront with them,” Shin says. “I tell them, ‘I think we have a great concept and we’re going to be successful. I don’t know that 100 percent, but we have a very good chance and God willing, we will be successful and we’ll all reap the benefit.’ That’s the underlying premise.”
Don’t focus on the details
When Shin is working with a new franchisee, the first thing he teaches them is not how to make a Philly Cheesesteak, an order of Cheddar, Ranch & Bacon Fries or a kiwi lemonade.
“That will come, but that is not the most important thing,” Shin says. “We want to teach them about why you are in business. I think a story works better than anything else. We just share how we do our daily business or our daily life. We tell them how we operate and how we work.”
You should be working with the leaders of your business units to develop their skills managing the people they’ll be hiring to lead.
If you’re worrying about whether the person can handle some aspect of what your business does, whether it’s making a sandwich or producing a part in the machine shop, you probably haven’t chosen the right person.
“What I need to do is start training the basics of my philosophy,” Shin says. “Why is it important to serve people? Why is it important to bring your employees in as part of the family? We just start teaching from there.”
You need to make sure this person can handle problems on his or her team. You also need to have confidence that this team will be led in a way similar to how you would do it if you were there running things on your own. It’s why you focus so much on the person and his or her personality in the interview process.
“That’s where the expectation really needs to come,” Shin says. “Without a clear set of guidelines of what it is they need to do and ... the jobs they need to perform, just the feeling of love and family doesn’t cut it.”
A leader’s skills at managing people are just as important, if not more important than his or her skill at whatever it is your company does.
“Facing a problem is just one of those things that makes a leader a leader,” Shin says.
Make sure you’ve communicated your expectations to the individual about all the job entails and given him or her an opportunity to express concerns or ask questions. If you’re having trouble with a leader at this stage, it’s probably another sign you made a bad choice.
“I don’t believe we can change a person,” Shin says. “They come as they are. I think I could have a great impact changing people, but I don’t want to fool myself. If they have certain traits, that’s the way they are going to be.”
Expect a few problems
Shin likes the leadership training program he has developed over the years for Charley’s. He takes the approach that training gradually is the best way to go.
“If we’re trying to download a lot of information in a short period of time, the brain only has so much capability for what it can absorb,” Shin says. “It will absorb a certain amount of data and the rest will just stray.”
Perhaps that explains why even great leaders typically have a few hiccups along the road to that greatness.
“Real expertise will not really come until they are fully spending lots of time at the store,” Shin says. “Then they start to get a better grasp. … People forget what they are taught in the training time. It’s not rare to see our team go into a franchise store to give them a shot in the arm.”
You’re fighting human nature and that’s a pretty tough opponent to defeat. Most people, especially the ones with the leadership gene, like to believe that they can do it on their own. It doesn’t really matter what the “it” is.
“Struggling franchisees typically think they can do something better than they are taught,” Shin says. “They are trying to find their way of solving the problem or they start to deviate from the protocol. When the systems are not fully utilized, a problem starts to crop up. I think it’s just human nature by some people.”
So how do you work through the problem quickly? Start out by sharing examples of how doing things the way they were taught lead to successful outcomes.
“They just have to see the standards and how much better the standard is,” Shin says.
And you just have to remain patient.
“I am here not for my own good only, but I’m here for the good of the person in front of me,” Shin says. “That has to be conveyed.”
How to reach: Charley’s Grilled Subs, (800) 437-8325 or www.charleys.com
The Shin file
founder, president and CEO
Charley's Grilled Subs
Born: Seoul, South Korea.
Education: Business degree, The Ohio State University
What was your first job?
Washing dishes at a Japanese steakhouse when I was 14. It was good, but when I quit that job, I knew I didn’t want to be a dishwasher for the rest of my life. I didn’t want people to tell me what to do all day.
Whom do you admire most in business?
Truett Cathy, the founder of Chick-fil-A. He is a phenomenal businessman and such a strong, principle-driven man. I admire him a lot.
What’s the best advice anyone has ever given you?
Keep your books straight. There will be a lot of temptation because you deal with cash. Keep your books straight and just pay your taxes and everything will be OK.
How Charley’s Grilled Subs came to be: Charley was taking a family vacation when a missed exit brought him to South Philadelphia. His first encounter with a local delicacy, a Philly Cheesesteak, was love at first bite. Totally hooked, he brought his findings back home to Columbus and began testing recipes on his college buddies.
After perfecting the recipe, Charley’s fortune took another turn for the best. His mother let him borrow from her life savings to open the first Charley’s on The Ohio State University campus. The 450-square-foot, 16-seat restaurant featuring Philly steak subs, gourmet fries and natural lemonade was an instant hit.
To keep up with customer demand, Charley began franchising in 1991. Locations began popping up all over the world, including mall food courts, strip centers, airports, and even Army and Air Force bases. The company now has more than 400 locations around the world.
The past few years have brought about the worst economic climate we have seen since the 1930s, and for Steve Cuntz, president and CEO of BlueStar Inc., the situation was no different.
However, Cuntz saw the economic downfall coming and prepared his company for the worst. His actions have helped BlueStar not only get through the downturn relatively unscathed but put it in a growing position and expanding globally.
“We have been successful beyond my wildest dreams,” Cuntz says. “I really anticipated more problems than we have experienced. Having been in the electronics industry long enough, the one thing you can guarantee is change.”
BlueStar is a national business-to-business distributor of point-of-sale and auto-ID products. Its ability to adapt to ever-changing conditions played a big part in its success through tough times and in its growth.
“Any time you’re growing, it’s anticipating the strain that scaling causes on an enterprise,” he says. “In any organization, your growth can put you in a position where the things you never would have dreamed of doing, now you’re going to have to do.”
BlueStar’s ability to adapt and keep its 370 employees hard at work through the downturn resulted in 2009 revenue of $365 million.
Here’s how Cuntz created a company that can weather tough economic times.
As a private company, BlueStar has sometimes had trouble getting suppliers to pay attention to it as a viable distributor.
“Since we are a privately held business, [suppliers] have a tendency to sometimes question your capability,” Cuntz says. “We manage to overcome it one supplier at a time. There’s nothing like performance that wins somebody over. It takes awhile for people to drink the tea, but once they get a taste of it, they understand what we are about. Usually in business, especially in distribution when you are doing order fulfillment and things like that, it’s just take the order and fill it. We go out and try to find new orders and try to develop new customers for our manufacturing partners, and over time, that has helped us create a major difference.”
During a time when a lot of companies were losing money and struggling to keep business, BlueStar was growing. The company used its position to help its customers, and in return, BlueStar gained valuable relationships.
“During the last recession, we bent over backward to extend credit terms and find ways of creating a business flow of capital that allowed our customers to live and keep their credit ratings while we continued to try and expand the marketplace,” Cuntz says. “That was a bit unusual, which may have had an impact to our suppliers, because during the recession, our sales actually went up. It’s ironic because a lot of what we sell is exactly what an enterprise needs to do to cut expense overhead.”
Cuntz didn’t think twice about stepping in and helping customers through their tough times. In fact, that kind of effort is a company philosophy.
“Going above and beyond is just part of our organization’s philosophy, which is ‘Give more than you receive,’” he says. “It provides a differentiator in so many ways. In the long term, it provides an advantage. Providing that extra value also provides you extra recognition, notoriety and opportunities that might not exist otherwise. You have to create a unique difference for yourself. Fill a need or a void that currently isn’t being filled. It depends on the business you’re in, but always be good for the money and always create a value-add difference for your business, and it will work.”
Hire strong employees
During the recession, companies like BlueStar had to keep people motivated by keeping them busy at work.
“It became very activity-based,” Cuntz says. “Call the customers up and let them know that if they have a deal, we want to help them close it. Call them up and tell them the good news that we’ve got extended credit. Call them up and tell them that we’ve got inventory. We didn’t cut our purchase orders, we stayed the course. We became one of the few distributors that actually had product available. They saw an immediate return on their investment because of increased activity. So it wasn’t hard to keep people motivated because they were writing orders as fast as they could.”
That motivation was also fueled by strong leadership and employees who were hired because they would grow within BlueStar and help the company succeed.
“We’ve got substantial managers in our organization,” Cuntz says. “Our philosophy is you can’t move up until you replace yourself with someone better. Our management team has continued to get better because we keep hiring better people than we are ourselves and after awhile that becomes attractive to talented people who look for a career path.
“You have to create an environment where you lead by example. Every day, people are watching you, and unless you have somebody better than you sitting behind you pushing, it’s easy to fall into that yes-man trap, and we haven’t had that. It’s very important in a growing company that you have people that want to grow.”
BlueStar’s challenge quickly changed from “How do we stay motivated?” to “How do we meet goals in this down economy?”
“You have to be honest and communicate with your employees,” Cuntz says. “You should tell them what you expect them to be doing. We use budgetary goal setting to discuss our future plans and growth. Sometimes we will use weekly meetings depending on what things are happening within the company. We have weekly meetings with our sales and marketing teams, and we communicate through terms of budgetary accomplishment and feedback loops and what we expect. Are we hitting our goals? Are we not hitting them? Why do you think that is? You have to ensure that employees are doing the things necessary to succeed. If you’re not meeting goals, then you need to communicate with staff and see what things need to be changed.”
Cuntz and BlueStar are also constantly combing for people who will bring drive and the desire to grow to the company.
“Hiring people is kind of like Glengarry Glen Ross with the ABCs of selling, ‘Always be closing,’” Cuntz says. “We use the term ‘Always be recruiting.’ I think you have to always be in the frame of mind when you see a talented person who expresses a desire to be a little bit more in life or has some desire to make a change; we just try to be sensitive to that and keep our ears open. Networking is critical. With the nature of our business, we are constantly at trade shows, and we work with hundreds of suppliers, so we are constantly networking with folks. We try to carefully define what we are looking to accomplish and what kind of skill sets and characteristics it’s going to take to fill that position. It’s not just a saying, ‘Always be recruiting.’ We are always thinking of that.”
Grow and invest
In the world of technology, the industry is never quiet. It is constantly changing and progressing forward, and it is crucial for companies like BlueStar to be able to grow, adapt and invest within those changes.
“The things that seem intuitively obvious with an enterprise package are not,” Cuntz says. “That was a real challenge for us, and it continues to be. We knew coming in that we will face change. How you change and how you succeed with that change is the real key. With a flexible mindset and a flexible business plan, you have to expect that it’s going to happen and you have to be willing to make the investments. You have to invest in change. I’m always thinking about what’s our next investment.
“You have to have some expectations of three things when you think about investing. First of all, you have to understand what the investment is thoroughly. I don’t care whether that’s stock of a Fortune 5 company or a small business. You need a real thorough understanding of who that company is and who the people that are managing the company are. The second thing is does the company have the capacity to do better than it’s currently doing? Look for the missing links. What could you do to bring about change that would help make this company or this investment more than it is? The third thing you should look at is does it fit with your culture? Also, is it attractively priced? If all those elements are in place, then you could probably move forward with that investment.”
In recent years, BlueStar has grown to a level where it has been looking to expand globally and make acquisitions that will augment and enhance its business. However, with global growth comes more changes and challenges.
“The one thing I didn’t plan on was the organizations’ cultures,” Cuntz says. “Different parts of the world have different customs, labor laws and things like that. The biggest challenge to us has been to understand not so much that the business appears to do the same kind of work that we do but to understand the underlying business development of that organization and what the thought process of those employees are. Those are the challenges of understanding if you bought a company that doesn’t match up philosophically with yours.
“You have to focus on companies that are in the core market of the kinds of products you sell. If you’re going to look for a merger or key acquisition, you have to look for key managers that are going to stay on that share your corporate philosophy. And you really have to know what it is you want to accomplish. You have to look for similarities where you don’t necessarily have to reinvent the wheel but where you can offer them something that they need that will help both of you grow.
“You have to understand the market you’re getting into and the culture of that market. Does the market have the potential to grow? What’s the economic climate? The U.S. is not the best benchmark for how most of the other parts of the world operate. You have to understand that there are other costs involved of managing foreign entities that we are not aware of. You have to have a team in those regions that can clearly explain to you what those costs are and what those opportunities are so you can make a valid decision whether that’s going to fit your business model.
“We can determine pretty quickly whether they’re of a like mindset or not. You have to sit down and say, ‘Here’s where we want to go, and here’s how far we have reached.’ And if they’re not in agreement with that, then sometimes you have to make a change. It’s going to come down to communication. Communication is not a quantifiable formula. It’s a skill set on both ends of the communication.”
If you’re the investor, it’s your job to make sure that you are being understood. And it’s your job to make sure that you understand what’s also implied or said or inferred in a relationship.
“It’s an art form, a skill set to make sure that you know your partners,” Cuntz says. “That’s something there is no formula for. You have to be completely unassuming. My method is I assume that I was not clearly understood and there’s the old saying, ‘Inspect what you expect.’ My first inclination is maybe I didn’t say it right, so I’m going to monitor the response to the communication to make sure that I’m seeing the results to the request. You have to be very, very specific.” <<
How to reach: BlueStar Inc., (866) 830-0140, or visit www.bluestarinc.com.
The Cuntz file
President and CEO
Education: Received a bachelor’s degree in accounting and a master’s degree in finance at Xavier University
What was your first job, and what did you learn from it?
My first job was as a night manager for a fast-food restaurant called Burger Chef. What I took away from that job was that I found out I didn’t have any ability to know I was making a correct hiring decision at the time I was making it. Some people interview well and wind up being terrible employees, and some people are terrible at being interviewed, but they make tremendous employees.
What is the best piece of business advice you’ve received?
Always spend less than what you make. The gentleman I heard that from was my loan officer, Bob Herman, who actually helped BlueStar get going when I became CEO. I asked him, ‘What advice do you have for me, because I don’t want to ever let you down?’ He said, ‘Steve, you’ve got to spend less than what you make and you got to set money aside for contingencies, and the businesses that fail to do that usually don’t make it.’
What do you enjoy most about your job and why?
I really enjoy setting budgets and goals and then hitting them. I’m a very goal-oriented person. It’s kind of an architectural thing. You put it up on the board, and you look at it and wonder if you can build that thing, and then you put together plans to achieve it.
If you could invite any three people, past or present to dinner, whom would you invite and why?
I would love to have George Washington, Albert Einstein and Lou Gehrig to dinner. I would be curious to know how Washington kept it together in the face of that kind of adversity. His skills and leadership just floored me.
Guys like Einstein, I’ve admired my entire life, because I wish I’d been a better science student. Einstein was able to take really complex ideas and make them really simple. I still don’t understand half of what Einstein talked about. And Lou Gehrig, to me, was an icon. He was a natural-born leader and had the respect of his teammates and was one of the first truly great athletes that also was a role model.
Throughout his career, Chip Bullock always envisioned creating a collaborative, team-based approach to architecture and engineering in order to get the best possible facility designs.
So when he became managing principal of the Atlanta office of HDR CUH2A, a $286 million integrated architecture and engineering firm, he wanted to realize his dream.
The problem is, people think in different ways.
“Architects and engineers come from two completely different backgrounds and approaches to solving a problem,” he says. “Architects like to explore problems until the last minute before they settle on a solution, while engineers love to solve a problem through a series of prescribed steps in a very efficient manner.”
If he could bring people together, he thought he could realize his dream.
“Great architecture and engineering is a fusion of those two approaches, so [I want to] try to help the architects understand more of what drives the engineers and help the engineers understand more of what drives the architects,” he says.
But the differences in approach to problem-solving weren’t the only obstacles he faced.
“We have a matrix organization, which has its pluses and minuses over a top-down kind of organization, but it often can lead to confusion about who’s responsible, who’s accountable and how to get things done,” Bullock says. “I seriously wanted to make an improvement over the current situation.”
He wanted people to work together and reach higher quality levels. He also hoped employees would have an experience they valued, and he wanted to raise the bar on projects so clients would rave about their work.
Bullock had seen what this looked like in previous organizations, and he thought if he could take a different approach to training, it may just be achievable.
“I knew that I needed to do this for the viability of this office,” he says. “I wanted to take it to a higher level. There wasn’t a training program out there that I could just take off the shelf. I had really been thinking about how to train people to be critical thinkers, how to express themselves in a way that allowed a free flow of communication and problem solving. … I knew there had to be a better way to do it than we were doing presently.”
So he set out to hire a consultant, have an initial program and then build a larger program from there so he could achieve his vision.
“I recognized the power of bringing in expert leadership trainers for myself, my lead team and my project teams. I set to develop a scalable training program that would allow me to improve myself, my people, our service and, in time, allow me to implement my vision.”
Hire a consultant
The first thing that Bullock did to work toward his grand vision was to bring in consultants to help lead the charge. He says if you want to build a successful training program, then this is a key.
“Definitely [have] a face-to-face interview, references and direct conversation about what your expectations are and exploring how flexible they are on creating a training program that’s customized to the approach that you envision but being open to their professional advice at the same time,” Bullock says.
When you talk to someone you want to potentially bring in to your organization, communication is crucial.
“You have to be a good listener,” he says. “You have to make your points very concise and to the point.”
These conversations in the interview process are key because it helps you start building a relationship with that person and helps you know if you can really collaborate with that person.
“You really want it to be a professional collaboration that’s really right for both parties,” he says. “You really need to know where that person is coming from and (if their style of approach) will be compatible with the culture that you have. The biggest mistake somebody can make is to have a mismatch of personality or styles that would hinder the program.”
Bullock suggests that you ask open-ended questions of that person to see how they respond. These open-ended questions will give you the most opportunity for learning.
“Get that person to tell about their successes and failures with training programs,” he says. “I would ask about what their motivation was to be in that line of consulting.”
He says to be very careful in how you phrase your questions so you’re not giving away what you’re looking for in the way you ask it.
“A lot of people start off with answering the question they’re going to ask before they ask the question, which defeats the purpose,” he says. “I always go into something like that with a list of things I’m after prepared in advance, and I always frame them in a way that can’t be a yes or no answer.”
Lastly, Bullock says to look at the nonverbal cues when you’re hiring someone. Often, these can be a good indication of someone’s personality.
“Eye contact and body language are certainly very important ways to gauge a person’s interest and ability for creating a program,” he says. “For example, do they lean toward you or away? And are their arms crossed or open? It’s really good to be a student of kinesiology as it applies to the workplace. It’s probably the most important thing one’s going to do, so the more upfront one can be on good interview skills for picking a consultant, it’ll be the smartest investment you’ll ever make.”
Have an initial program
Once he brought his consultants on board, Bullock didn’t jump cherry-bomb style into the pool. Instead, he just dipped his toe in to check the temperature.
“The first step was to go through the individualized training with the consultant on leadership skills, which was a good way to gauge the consultant for their suitability for the bigger picture program that I had in mind,” Bullock says. “Being a cautious buyer and not wanting to risk everything all at once, I really wanted to gauge how well we could work together to test drive what they had to offer.”
The consultants led an interactive, eight-person leadership workshop with Bullock and a diverse group of people. The group participated in soul-searching exercises that pushed people to reflect on their own skills, but the program also paired those exercises with real-life assignments for the group to do with their staffs between sessions. Bullock says the combination approach allowed him to connect with people in the office in a completely different way than he had previously.
He says it was also important for himself to participate in this initial session, not just because he wanted to see what they had to offer but also to learn about himself.
“Put one’s greatest effort into understanding oneself better and understanding how you come across to your colleagues, overcoming your blind spots, building your effective communication skills and working to really understand others,” he says.
Through these sessions, Bullock learned that he has a tendency to speak over people’s heads and that he needs to simplify his language sometimes.
“This training program allowed me to synthesize everything I had learned from that academic approach in a true leadership setting,” he says. “Really, the key was the more things you can do to relate to others effectively, the better you have a framework to communicate and, more importantly, the more you understand yourself, then you build this great foundation that you need to learn to work with and understand others.”
Build a bigger program
As he went through the initial program, Bullock started to put together the larger training program that would help him achieve his vision.
“As I went through the program, I was looking to see what parts of it were scalable to my direct reports and how could I creatively use this training program at the project leadership level,” he says.
He would bounce his ideas off of the consultant so they could collaboratively create the next-tier approach for his direct reports and how they could implement a project-based training program.
“Being a firm believer in advanced planning, I laid out plans well in advance of the opportunity to actually implement it, so the approach was refined over a series of iterations and collaborations with the training consultant,” Bullock says.
The main element of training that changed was instead of getting all of the information you could ever need to know all at once, employees started receiving training right when they needed it.
“We give people skills on a just-in-time basis, not a training program that’s a download of information that you’re hoping you can remember in a week, a month, a year later,” he says. “It’s a combination of core skills and ongoing coaching and support as projects are delivered.”
Now, new employees come in and they have a day and a half of general, core-skills training, but from there, employees receive training on specific project types or issues just ahead of when they’ll encounter them. These additional training sessions are typically half-day to three-quarter-day sessions.
“I want this to really connect with the actual doing of the work, so we schedule them around key milestones in advance of the milestones, so we have a chance to work out solutions for the inevitable challenges that come in delivering large, capital projects,” he says.
As employees moved forward, when new problems came up, those would be considered for future training courses.
“In the early stages of, particularly, the project training sessions, we get everybody to chart out what things went wrong that created a problem,” he says. “In almost all cases, they were things that could have been avoided. Once we knew where those pitfalls (were), we could really focus on developing an approach that kept everybody focused on a positive future and positive outcomes, because we already knew where things were going to go wrong. If we know where things are going to go wrong, we can have a plan to help mitigate those things.”
As these programs have developed and grown over the past two-plus years, Bullock is seeing a clear difference at the firm.
“Where people might have promised to get something done and came up with an excuse when they didn’t get it done, they’re much more open to saying what they need to be successful in getting the thing done in advance, so we can find a solution to the problem,” he says. “One goal of the training program was to eliminate excuses to readily foreseeable problems that, if they were discussed in advance in the right setting, we could have a much better outcome.”
The training programs have helped increase client satisfaction because employees are more proactive about problems than before, and the programs also helped people understand elements of other people’s jobs, which has created the collaboration that Bullock dreamed of.
“The most gratifying part of my job is when I can see people self-initiate that exploration of solving problems together in a collaborative way,” he says. “When I realize that an engineer is talking and drawing the way an architect would and an architect is talking and solving a problem like an engineer, the end result is really better than either party could have come up with on their own.”
Establish your vision
Bullock was able to create a strong training program because he had a very clear vision of where he was going. But what if you don’t know where you’re going?
If a client came in and told Bullock to design him a building, the first obvious question would be to ask what kind of building. Knowing the kind of thing you’re trying to create is critical — a hospital is different than a research laboratory and a house is different than retail space. So if Bullock didn’t know what kind of project he was trying to create, he wouldn’t be able to design it.
In the same way, if you don’t have a vision of what you want your organization to be, then you can’t create any program or goal to get you there.
“Having a strong vision is really paramount in this,” Bullock says. “Having a dream to create a new culture is very rewarding, it’s very demanding.”
First identify what it is you want to create or change in your organization so you know what you’re working toward and then define how to get there.
“Have no fear of going down that path,” Bullock says. “To create a vision, it’s really important to find your vision in terms of the commitments and what they mean to you personally in very clear, simple terms.”
In Bullock’s case, he knew that he wanted to create a firm that could blur the lines between architecture and engineering to create the best designs, and that was his career ambition — not just something that if it got done, then that would be nice. His passion comes through to his team.
“It’s more than just buy-in,” he says. “It’s really driving home and enrolling people in the vision and getting them to commit that they’ll be there to make it happen.”
But most people won’t commit if they don’t know what’s in it for them, so one of the keys to establishing your vision is to make sure that people understand their own individual role in making that vision happen.
“You also have to make sure that people understand that there is a place for them to fit into the vision and that they’re a very important part of carrying it out,” he says. “It can be as simple as first writing it out and get it to the place where people can understand it in such clear, simple terms.”
How to reach: HDR CUH2A, (404) 815-1212 or
The Bullock file
managing principal, Atlanta
Born: Chattanooga, Tenn.
Education: University of Tennessee in Knoxville School of Architecture
What was your first job as a kid?
My first job ever was working for a commercial woodworking, fence and sign company, where we built very large, heavy-timbered wood constructions for commercial clients. I worked with heavy machinery, lots of heavy manual labor. I learned really quickly that there wasn’t any room for creativity on my part in that kind of job. My boss would tell me, ‘I figured out exactly the most efficient way to do this — you don’t need to think about it; you do it the way I’m telling you to do it.’ My boss happened to be a retired Lockheed engineer.
As a kid, what did you want to be when you grew up?
I had two lines of thought — I either wanted to be a road construction civil engineer like my grandfather, or I wanted to be a mechanical engineer that designed high-performance automobiles, and my third choice was an architect. I chose architecture because I liked to draw so much.
What’s the best advice you’ve ever received?
The best advice I’ve ever received is you’ll only get one chance to make your case for a change order, and only a fool would be willing to attempt to argue about the end result after that. That was my grandfather, who was the road-building construction contractor.
If there’s one word that describes the manufacturing sector moving forward, this is it.
“There’s macroeconomic uncertainty, public policy uncertainty, uncertainty in terms of the value of Chinese currency, and that is going to make the business sector — particularly in manufacturing — very cautious when it comes to capital investment,” says Edward Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University.
There are signs of better days ahead, with more orders coming in and North American factories running at higher capacity than in the past few years.
“A big barometer for manufacturing is auto sales, and auto sales just took a dive the last couple of years, but it’s picking back up and demand is back up,” says Eric Burkland, president of The Ohio Manufacturers’ Association. “The good news is, the economy has clearly turned and demand is picking back up, but the cost pressures globally remain just incredible, so that dampens the hiring.”
Chuck Hadden, president and CEO of the Michigan Manufacturers’ Association, says that things are slowly turning around.
“We’re one of the sectors that are doing a little bit more hiring out there — not a lot, but we’re starting to get some hiring,” Hadden says. “There was a lot of uncertainty toward the end of the year — what was going to happen with federal taxes, elections, and that uncertainty is now gone. We know what’s going to happen with those things, and now people can start moving forward, and I’m optimistic at the direction we’re going.”
While no one can say for sure what the next 12 months will bring for manufacturing, there are two things that the experts agree on: Success in the sector will be driven by diversification and innovation, something Jim Nicholson, vice president of chemical maker PVS Chemicals Inc., will attest to.
“This year, we are really working on continuing to expand our customer base — we’re looking for new markets that we traditionally have not served and adding those markets to our customer base, and we’re making investments in new kinds of people, with different kinds of experience, specifically related to market and marketing,” Nicholson says. “We think this is going to be a pretty good year for manufacturing.”
Diversification has been critical the past few years and will continue to play an integral role this year.
“If you’ve made it through, you’ve probably figured out a way to diversify your company from one product to another product so you’re not reliant on one business sector,” Hadden says.
But he says it’s time to take it a step further in 2011.
“Let’s diversify your customer base so you’re not totally reliant on one customer in that business sector,” Hadden says. “Find ways to expand your business that way, still doing what you ... do best but find more customers. It’s a big world out there, and there’s no reason why we can’t be competing in a lot of markets out there.”
He says one of the keys to effectively doing this is to look beyond America’s shores.
“Our biggest growth opportunity for us as manufacturers that we haven’t taken advantage of is finding customers in other countries that we can help supply,” Hadden says. “I think that’s the biggest tone that we’re going to try to set this year. We all know we can’t rely on one or two customers anymore. … If you’re making a part here for an auto company, why can’t you be making it for someone in Germany or Japan or India?”
Hill agrees that diversification overseas is important because of the growing demand that will come from those markets.
“There is a lot of opportunity out there, but the opportunity is going to be based first on international markets, particularly in growing, developing economies,” Hill says. “It is really important for American manufacturers to really pay attention to international markets.”
For example, one of the biggest markets that American manufacturers need to be involved with is China, but it’s not because of cheap, offshore manufacturing.
“They should be looking seriously at China, because it’s an incredibly growing demand and middle class that’s going to drive global sales for years,” Hill says.
Diversification also means that you have to look at other ways to position your expertise and capabilities in the market.
“Companies are continuing to look for new markets and new ways to use their knowledge and their capital for new products,” Burkland says.
But when you look at the global economy and look at your industry and look at your business, you could get dizzy from seeing everything that could potentially happen. That’s when you have to choose a few things to focus on in your diversification efforts.
“Survey, and then pick a couple that are likely winners,” Nicholson says. “Trying to do everything is logistically impossible.”
The way Nicholson and his company decided was by looking at the products they know really well and then looking at applications where they felt their products weren’t well represented. Finally, they looked to see if they could move into those markets with their products.
“Again, [it’s] trying to leverage what you know into a new market. It’s very hard to get into a new market where you know nothing about the product and where you know nothing about the market,” Nicholson says. “You have to choose to either serve a market where you know something about the product or serve a market where you know something about the market and need to develop the product. There’s too much risk and investment to try to solve both those problems at once.”
One of the other keys for manufacturers to find success this year is to focus on innovation.
“That’s the trick today — cut costs but don’t cut innovation because innovation is the path toward future profitability,” Burkland says.
Giorgio Rizzoni can explain why innovation is so critical. Rizzoni is the Ford Motor Co. chair in electromechancial systems, as well as a professor of mechanical and electrical engineering and director and senior fellow for the Center for Automotive Research at The Ohio State University. He says that if you and a friend have the same laptop, in theory, you both have the same battery in that laptop, even though you could each get a different capacity out of that battery.
“You sort of adapt to whatever you have,” Rizzoni says. “It doesn’t matter, from a consumer perspective, that that one battery in your computer or cell phone has whatever performance it has, and if the variability is plus or minus 10 percent, who’s going to tell, right?”
While it may not matter in electronics like your laptop or your cell phone, it does make a big difference in larger items where batteries are needed, such as electric cars. In one of those, you have hundreds or thousands of battery cells.
“Some of them can range up to $15,000 a pack,” says Suresh Babu, associate professor for materials science and engineering and director of the NSF Center for Integrative Materials Joining Science for Energy Applications at The Ohio State University. “A pack means many batteries in it. That means you have to make sure these batteries last longer.”
And that’s where innovation is critical. If you have that 10 percent variability in those batteries, it makes a huge difference and is a serious liability to the car and its cost of maintenance.
“There’s an old adage that a chain is only as strong as its weakest link,” Rizzoni says. … “There’s an analogy there — if you have weaker cells, they will bring down the body of the entire battery pack so the ability to manufacture cells with a high degree of repeatability and quality is a very important thing.”
Improvements to these batteries aren’t happening on an annual basis either — they’re changing monthly. And the saying is that as the automobile industry goes, so does the rest of manufacturing go, and the auto industry is innovating at a rapid pace, so by rule, the rest of manufacturers will be, as well.
But innovation in the automobile industry will go beyond making better batteries. As it strives to reduce the mass of its vehicles, it’s looking for lighter-weight materials to help, and finding lighter materials will also help other manufacturers.
“The more you’re able to find new ways, lighter ways, more resilient ways, more flexible ways, more whatever the characteristics of the materials, that leads to opportunities in product innovation,” Burkland says.
Rizzoni says some of the new materials that are getting implemented in automobile manufacturing are plastics, aluminum, magnesium and high-strength steel. But new materials also mean more changes in the industry.
“One of the challenges that has surfaced when you start working with similar materials is that now you’re trying to join a piece of plastic to a piece of steel, for example, so joining techniques become, possibly, a real challenge,” Rizzoni says.
This is where you have to look at what you traditionally do and throw it out the window. Kevin Arnold is the business development manager for advanced energy for the EWI Energy Center, which helps manufacturers in the energy sector and other industries improve their productivity, time to market and profitability through new, innovative technologies. He says, for example, that if GM built every battery for its electric vehicles to Six Sigma standards, which for years was the gold standard of quality, none of the cars would run, because they would all have bad welds in them.
“You’ve got to get so many decimal places out of quality,” Arnold says. “This is a challenge. That’s part of the growing pains we’re seeing now is that what was considered good enough for many years is now not quite good enough, so it’s looking at the fundamentals, understanding and controlling them and ongoing monitoring to ensure that you’re within limits.”
Look at the processes in your organization and find ways to make them better — even if it’s something that’s been the same way for decades.
“What manufacturers have to be open to is don’t take processes that seem simple, like welding, for granted,” Arnold says. “Welding is a fundamental manufacturing process that’s been around for 100 years, but it’s often one of the least understood processes and one of the first that could go out of control and cause problems. Ensuring that they have the right expertise on staff to look at their processes, understand the variables and understand that what they’re doing is with increasing levels of scrutiny.”
The experts recognize that the money is likely not there in your organization for you to throw out your assembly line and start with something newer and better though, so that’s why they’re working to help manufacturers find ways to cost-effectively innovate.
“All of [the processes] have to be mature,” Babu says. “Mature means not only from the science aspect but also from the industry aspect — how can we implement them in an existing manufacturing line. That’s the biggest challenge.”
But it’s a challenge worth exploring because the way to succeed this year is to push your product and process innovation efforts to the limits.
Resources: Center for Automotive Research — The Ohio State University, (614) 688-3856 or car.osu.edu; EWI Energy Center, (614) 688-5000 or ewienergycenter.com; The Maxine Goodman Levin College of Urban Affairs at Cleveland State University, (216) 687-2000 or urban.csuohio.edu; Michigan Manufacturers’ Association, (800) 253-9039 or www.mma-net.org; NSF Center for Integrative Materials Joining Science for Energy Applications — The Ohio State University, (614) 247-0001 or www.matsceng.ohio-state.edu/faculty/babu; The Ohio Manufacturers’ Association, (800) 662-4463 or www.ohiomfg.com; PVS Chemicals Inc., (313) 921-1200 or www.pvschemicals.com
Manufacturing has led the economic comeback, but will it last?
When you look at the brightening economic picture, manufacturing has played a major role in the comeback. The biggest question facing the sector is simple: Will the good times last?
Robert Dye, vice president and senior economist for PNC Bank, says the odds are in favor of manufacturers, but there are still risks.
“It is my expectation that we continue to see strong growth but not as strong in the last year or so,” Dye says.
The overall recovery in the U.S. will eventually reach across all economic sectors, including service and construction.
“When I look at price conditions for manufacturers, I’m concerned about a profit squeeze as energy and higher commodity prices drive producer prices up,” he says. “Those prices will not be able to be passed through to the consumer at this point. Even though there are currently strong profits, there is potential for profit erosion down the road.”
Companies that make consumer goods should also see better times ahead.
“I do expect the consumer sector to show ongoing improvement through 2011, as we saw consumers bounce back in 2010, with strong retail sales and a strong holiday shopping season after three disappointing seasons in a row,” Dye says. “Measures of consumer confidence are improving and job creation should improve through 2011. Manufacturing sectors that will be able to take advantage of that will be the consumer-focused sector.”
There are also potential risks in the consumer sector, as well: Foreign debt woes could increase the value of the dollar, hurting exporters, unemployment is still high, and the housing market is still weak.
“We are still in uncertain times, and manufacturers will face cross currents in the year ahead, but most of the wind will be at their backs,” Dye says. “But the lingering risks are still with us.”
How to hire in 2011
While most manufacturers are seeing things on the upward swing, hiring can still be a difficult decision as you continue lean operations. Likely, you’re down to a core group of people who you trust and can rely on to do a good job, so if you have a good core and you want to hire, you have to take an approach that most manufacturers have never taken.
“If they do have to hire, it will be slowly — one or two at a time — and they’re not looking at the skill base they have, but how do they fit in with the rest of the people,” says Chuck Hadden, president and CEO of the Michigan Manufacturers’ Association. “Can they work as a team? Is it someone everyone else will get along with? Those are all crucial things they’re thinking about beyond can the guy or the woman do the job.”
Hadden says you have to take more time in your hiring now if you want to be successful.
“Your HR person does the interviewing, but maybe you include a couple people from the floor, and they sit in on a couple [interviews] and listen to them,” Hadden says. “It used to be, when I was growing up, somebody’s grandfather or uncle would get them a job in the place and they’d take off. It doesn’t work that way anymore.”
He says to make sure you look for people who are willing to learn and want to continue to learn through technical school, additional training or whatever the company may call for.
Jim Nicholson, vice president of chemical manufacturer PVS Chemicals Inc., says you also have to trust your managers to make good hires.
“The key on the hiring process is to have confidence that your managers can hire well,” Nicholson says. “Spend time and effort training your managers on how to hire well, and make sure your managers spend enough time on the process and have choices and present choices, so that they can get input from their fellow managers and hire the best person for that role.”
Doing these things will help you as you look to add bodies in 2011 and the years to come.
Let’s be honest: We all want to be “great.” Whether it’s being a great worker, a great boss, a great parent or a great community leader, this mentality is ingrained in us from the beginning.
That’s why it is no surprise that company leaders put a great deal of resources behind building a strong support system around them. There is nothing more powerful than a strong team, and there is little that cannot be accomplished when the right people are all moving together toward a common goal. Whether it is a sports team, a surgical team or a business team, they all rely on each other for the win. Because, truth be told, no one likes to lose.
Creating a winning team is all about developing the culture and the vision.
The vision can be clear, concise and actionable, but if your team isn’t fully engaged, the vision will be lost. Let the key players on your team take part in shaping the company’s mission, vision and values so that it uniquely reflects the culture you will build together. I took my team on a two-day retreat to lead a healthy discussion that resulted in a solid foundation for the company’s future. Today, I don’t think anyone in the company could recite our mission, vision and values word for word, but I do believe anyone could explain the essence of what we stand for, and at the end of the day, that is what’s most important.
It’s one thing to understand a company’s values, but it’s another thing to actually live it. Are your team’s behaviors reflective of your ultimate vision?
Reminders and positive reinforcement will help your employees keep their eye on the ball. For example, we have posters of our guiding values that hang on the walls of our office and on stainless steel water bottles that I gave to each associate. We highlight living examples of our values in each edition of our quarterly newsletter, and each department creates goals with the company mission in mind.
At Moe’s Southwest Grill, we work hard to ensure that we maintain a great talent level throughout all disciplines of our company. From our initial hiring practices to our ongoing associate development, we believe that all of our employees deserve to be the best they can be, both personally and professionally, and we have put programs in place to ensure everyone has the opportunity to be great.
When we recruit new talent, we look for intelligence, integrity, energy and edge, to name a few, and our interview process is a reflection of that. Candidates meet with four or five members of the team and are asked questions that get at the distinct personal attributes we look for. Because we’re all on the same page, it becomes crystal clear who the best candidate is for the job each and every time.
Most important, once you have identified and put this strong team in place, you must allow the team members to spread their individual wings, yet come together to fulfill your vision of greatness.
Continue to develop your team, discuss the future and think in terms of the next five years.
Using your vision, mission and values as a filter for all you do is the secret to creating and sustaining a winning team.
Paul Damico is president of Atlanta-based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 400 locations nationwide. He has been a leader in the foodservice industry for more than 20 years with companies, such as SSP America, FoodBrand LLC and Host Marriott. Reach him at firstname.lastname@example.org.
Most every CEO has made the statement that "our people are our greatest asset." I do believe that most companies realize that their people are their greatest asset. However, to sustain this value, companies need to continually evaluate, measure and evolve their strategies for talent acquisition and retention. After having completed several successful searches for Parker Hannifin and working with numerous executives, it is clear they "Walk the Talk" and their track record speaks for itself.
Recently, I had the opportunity to discuss talent acquisition and retention with one of Parker Hannifin’s HR executives, Nate Jackson. Nate is a vice president of human resources for Parker Hannifin’s Instrumentation Group and one of the primary stakeholders in the execution of Parker’s workforce planning strategies. Parker Hannifin has continuously demonstrated success in attracting and retaining top talent globally. In a time where employee tenure is shrinking, it is common to see tenure with their employees of 10-, 20- and even 30-plus years. This success is a direct result of corporate culture and values, competitive wages and benefits, and career growth and succession strategies.
The following are some of the insights Nate Jackson shared with me regarding Parker’s efforts.
What steps does Parker take to ensure that senior level talent fits the culture?
We view the hire of a senior level manager or executive like bringing someone into our family. We want to get to know them and be certain that this person will take care of our customers and employees the Parker way. Senior level candidates will meet with numerous executives in the interview process to ensure we really know the candidate and evaluate the fit effectively. At certain levels, we will engage the services of industrial psychologists who conduct in-depth assessments of the candidates. References are checked with an emphasis on management style. We look for people who can influence others versus those who just exert authority.
Parker has locations in 46 countries, 132 divisions and approximately 55,000 employees worldwide and growing. What is different about Parker’s talent acquisition process in various regions in the US and the world?
As a corporation, Parker will continue to drive efficiencies through global processes and procedures as it relates to our talent. We have developed Parker Leadership Business Skills which serve as a universal standard for Parker employees and consists of values, behaviors, attributes and skills. With that said, we realize that being a growing, global business, we need to empower our divisions to create best practices for their specific location based upon both Parker values, as well as, regional cultures.
Parker has regional VP’s of HR who are then supported by divisional HR managers within their region. These professionals are experts in the local culture, hiring practices and regulations. They are empowered to execute strategies for talent acquisition and retention which are aligned with Parker’s values and goals.
Experts keep talking about the talent shift. What is/has Parker done to retain talent during the recession and as the economy picks up?
As we entered the recession, Parker took major steps to minimize reductions in our workforce and save as many positions as possible. We started with a top down approach where senior level executives made the first sacrifices. Ultimately, we took a team approach to the sacrifices being made to weather the economic storm. This approach strengthened employee loyalty to the business.
During this time, we realized that we were asking employees to do more with less to get us through this time. Parker has and will continue to execute programs that incentivize our employees for their performance within the business. We offer a profit sharing program, equity programs and strategies for our employees to be rewarded and grow through globalization of our business. Parker continues to think outside of the box by expanding our medical coverage including alternative medicine. We also have a goal to have a workout facility in every Parker location. This is an obvious convenience to our employees and helps to increase the overall health of our people.
Parker continues to engage in strategic workforce planning initiatives. Talent challenges are a result of retirement, expansion & acquisition, new product launches and increasing globalization of our business. We are constantly looking for better ways to increase our talent flow into the business and talent growth once inside the business.
If you would like to learn more about Parker Hannifin, you can visit their website at www.parker.com for more information.
This article was brought to you by Chris Carmon, president of The Carmon Group. You can find out more about The Carmon Group at www.carmongroup.com
Ron Roma believes in redundancy.
It’s a commonly used word for engineers, architects and other professionals who need to ensure that fail-safe systems are in place for the buildings, transportation systems and vehicles that we rely on every day.
But it’s an applicable word in the world of business, as well.
At Healthesystems LLC, the pharmacy benefit management company where Roma is the founder, owner and CEO, he has had to build redundancy into his work force. He needs to build a team of people with overlapping skill sets and an ability to step into new roles on short notice.
“When we started the company, I hired and brought a guy on, Daryl Corr, who is currently our president,” Roma says. “He started out as vice president of operations, and I promoted him to COO; now he’s president. Our biggest challenge was finding a successor to Daryl, and subsequently, finding successors for other key employees. When you’re a smaller company, you might attract some very talented people, but often, it’s hard to replicate their skill sets.”
It’s a call that must be answered through recruiting and training of new staff members. Roma and his staff have worked with recruiters in both the Tampa and Phoenix markets to find new blood, also relying heavily on referrals.
“We’re very much in an industry of relationships, so we’re continually reaching out to people we know,” Roma says. “Our HR department once told me that 85 percent of our new hires have come from referrals, either internal or external.”
But to get plugged in like that, Roma has had to focus all executives at Healthesystems on team building and the constant pursuit of the new talent that has allowed the company to grow to nearly 300 employees and $214 million in 2009 revenue.
Recruit for redundancy
The key to attracting good people is maintaining good people. It’s a concept that Roma enforces throughout the management levels at Healthesystems.
You don’t just maintain good people for their potential recruiting connections. You maintain good people because your work force is the most critical element in determining your company’s atmosphere and how your company is perceived by outsiders.
“When you’re doing the interview process, it’s really a two-way street,” Roma says. “It’s not just us interviewing prospective new employees; it’s the employees interviewing us to determine if this is a place they want to work. So the company has to have a very pleasant, attractive look and feel to it. You know what it’s like when you walk into a place and it feels all starchy and stiff. The people aren’t very open. You have a difficult interview and you don’t get a warm feeling from the cohesive group. That’s not how we want to be.”
Start by reaching into your coffers and giving your human resources department the backing it needs to build an ideal staff.
“You have to be willing to spend the money,” Roma says. “Three or four years ago, one of our corporate objectives was to double payroll. It is an expense that if you can afford it, every company would be well served to do it. We’re trying to avoid a situation where one person is so vital to what we do each day, if that person left, it would create a lot of problems in that area of the company. That is what we’re trying to avoid, and that is why a couple of years ago, we decided that this was an investment we were willing to make.”
Of course, not every company is in immediate shape to begin shoveling money into recruiting or payroll. But as your company evolves and changes, you need to invest whatever you can in hiring the people who will help provide you with talent reinforcements down the road. The position for which you hire a person this year might not be the position you need filled in four years. If your company is growing, chances are even better that will be the case.
“The redundancy you put in place is really about succession planning,” Roma says. “In our case, we’re so young as a company, it’s really not a matter of losing somebody. It’s that if a new opportunity comes up, we want to have that extra flexibility with the people on staff.”
If you have multiple locations in your company, you need to make sure you’re recruiting and maintaining adequate talent and skill sets at all locations. It’s particularly true if you serve customers with any type of phone-based or Internet-based help desk. If your help desk on the East Coast is knocked offline, you need to have capable talent and staff numbers at another location.
“When we were looking at people and locations, it’s one thing to say that we have help desk backup in North Carolina, with systems and people trained there,” Roma says. “But if you shut everything down in Florida due to a hurricane, it might impact the Carolinas, as well. With that in mind, we made our redundant help desk site in Scottsdale, Ariz., and even put a backup data center there, as well. It’s redundancy in people, facilities and systems. It all works together. You need all three.”
Find the cultural fit
You need to hire for talent and skills or you won’t create the team that will allow your company to flourish. But if your company is in growth mode, it is imperative that you find employees who can help support and advance your culture.
At Healthesystems, Roma operates a high-growth, entrepreneurial company and looks for people who can flourish in that environment.
“High-growth companies can be difficult for many people to fit in,” he says. “A lot of it depends on their work experience. If they have been out in the workplace with an IBM or a really large company, they’re used to a lot more structure, definition and rigidity day to day. I describe our company as entrepreneurial and opportunistic, and that means we’re always looking for that next entrepreneurial opportunity with whatever happens to fit us. People tend to get concerned if they have that big-company perspective of wanting to know what their job is and what are the 15 things they need to get done today. And 15 years from now, they’ll still be responsible for those 15 things.
“That’s not how we operate in a smaller, entrepreneurial company. You have to be light on your feet, take what you learned on the last project and transfer it to a new project.”
You try to find the right fit through your hiring process, and use your training process as a kind of proofreading system for your hires.
“Basically, you have multiple layers of interviewing,” Roma says. “We bring in and define the selection process for people in significant, key positions. They might interview with five to 10 people in the organization, and it is in all kinds of disciplines. It might be accounting, IT, account management. I even get involved in some of the more significant hires myself.”
From there, Roma and his leadership team use the training classroom to find the people who will grow with the company. In a high-growth environment, not every hire will be a home run. Some might not even get you a base hit. Out of every round of 10 to 15 hires performed by Healthesystems, up to one-third might leave the course, deciding the company isn’t a good personal fit.
“In my mind, failure in the training program is the result of failure in the hiring and recruiting process,” Roma says. “In most companies, the help desk is usually the highest area of turnover. We were told by our HR department that the help desks in most companies have a 100 percent turnover rate in a year. We have been more in the 15 to 20 percent area, which I think is phenomenal. To me, when you bring someone in and they fail in the first six to 12 months, it’s as big of a failure for the company as it is for the individual, because obviously you missed something in the interview process.”
The key to success in an interview and training process boils down to one word: involvement. Management has to be active and engaged in exchanging feedback and ideas with the human resources staff. You don’t want to micromanage your HR department or perform the jobs assigned to your HR professionals, but you do want to concern yourself with the overall process and whether it is delivering the results you want.
“Back in 2001, I had a client that I did some consulting for,” Roma says. “The company was producing enough revenue that the owner had the lifestyle he wanted. But it really wasn’t doing as well as it should be. The biggest problem was lack of sales.
“The owner tells me, ‘Ron, I get so upset when I look at our books and realize that 90 percent of our customers are still the ones I brought on.’ Then I told him ‘Well, you need to get off your butt and go sell some more.’ You get tired and you get a little conceited, thinking, ‘I’m above that now.’ But you don’t want to create a culture of superiority. You want a culture where any task that needs to be done, you or any other person is willing to do it, willing to take a look at what is going on and educate yourself. You never want to be in a position where people are saying, ‘This isn’t worth my time.’”
You stay engaged with your team, your HR department and the process by which you are adding to your team by never taking your eye off the ultimate goal of achieving and maintaining a winning culture and profitable balance sheet, and everything that entails.
“Always keep your eye on the ball,” Roma says. “There is always someone out there trying to divert your attention from running the company, and when those activities happen, the only thing I’ll remind people of is keep your eye on that ball, maintain those customer relationships and employee relationships.
“Ultimately, as a businessman, that is why you are there — to maintain your customers and maintain your employees.”
How to reach: Healthesystems LLC, (800) 921-1880 or www.healthesystems.com
The Roma file
Founder, owner and CEO
History: My dad was in the Air Force, and we moved to Oklahoma when I was a year old. My parents were from Montana.
Education: Chemistry and math degrees from the University of Oklahoma
First job: When I was 14 or 15 in Oklahoma, there were a bunch of old rail beds on land that was going to be recycled, so I had a job clipping the old railroad ties there.
What is the best business lesson you’ve learned?
Don’t quit; don’t stop. It doesn’t matter what happened 10 to 15 years ago. You stick at something.
What is your definition of success?
At 20 years old, success is a paycheck. At 52 years old, I expect that a company has to produce in other ways for its employees. You have to help meet the career objectives of your employees. And you have to meet the needs of your customers and investors.
Despite the “shellacking” — to borrow a turn of phrase from President Obama — the Democrats took in the midterm congressional elections in November and the divided government those election results will bring, 2011 still promises to be a year fraught with challenges for employers both within California and across the nation. From new legal mandates contained in obscure provisions of health care reform to new enforcement initiatives undertaken by various government agencies and the continued increase of wage and hour claims, business owners will have to remain vigilant to ensure compliance with the various legal and administrative changes coming in 2011.
Smart Business spoke with M. Alim Malik and Jonathan M. Werner of Jackson DeMarco Tidus Peckenpaugh about what labor and employment law developments are on the horizon for business owners in 2011.
How will the recent congressional elections impact employers in 2011?
From an immediate standpoint, a divided political landscape will mean that business owners should not have to worry about any new significant legislation impacting the workplace coming out of Congress in 2011. However, while Congress may be deadlocked, the Obama administration will remain busy implementing the various laws that were passed in the most recently adjourned Congress and initiating new enforcement initiatives to achieve the administration’s political objectives by executive fiat. Several areas of particular concern warrant discussion.
What is the discussion surrounding employers’ use of credit checks?
On Dec. 21, 2010, the U.S. Equal Employment Opportunity Commission announced that it was suing Kaplan Higher Education Corp. for refusing to hire a class of job applicants based on their credit history. While refusing to hire applicants with poor credit does not in and of itself constitute unlawful discrimination, such a practice can be illegal if it has a ‘disparate impact’ on a protected category of individuals, and if an employer cannot show that the practice is job-related and justified by ‘business necessity.’
Having just emerged from the deepest economic slump since the Great Depression, and with unemployment still hovering above 10 percent, it stands to reason that a significant percentage of applicants for any job are going to have poor credit. Moreover, it is not always clear what relevance an applicant’s credit history has in making a hiring decision for most categories of jobs. Given its negligible utility in the hiring process, and the EEOC’s renewed interest in its use by employers, business owners should refrain from using the results of credit checks to justify hiring or promotion decisions in most contexts. Such information should only be used when employers can show a strong ‘business necessity’ for applicants to possess good credit (for example, in jobs where employees handle large amounts of cash or other financially sensitive positions).
Why is the Department of Labor encouraging hourly employees to keep a separate record of hours worked?
Wage and hour law is one of the most active areas of labor and employment law nationwide. Perhaps because of this, the U.S. Department of Labor is actively encouraging hourly employees of private businesses to keep a separate, daily log of the hours they work and the breaks they take in order to ensure that business owners’ timekeeping methods are fully recording all employee work time. The Department has even created a free, downloadable ‘Work Hours Calendar’ for employees to use to track their own time. In view of this, business owners should take the time to audit their timekeeping practices to ensure that they are accurately and completely recording all hours worked by their employees.
What new accommodations do employers need to make in light of health care reform?
Congress included a provision in the Patient Protection and Affordable Care Act requiring employers to provide a reasonable amount of break time to employees to express breast milk as frequently as needed by the nursing mother. Additionally, employers must provide a separate, private space (restrooms don’t qualify) for these employees that is free from intrusion by fellow employees or the public.
While California has had a similar law on the books for several years, employers should nevertheless take this opportunity to review their internal procedures for accommodating nursing mothers.
How is businesses’ use of interns changing?
Both the Obama administration and the state of California are cracking down on business owners’ use of unpaid interns. Generally speaking, under federal law, unpaid interns are only permissible in situations where the internship is similar to the training given in a vocational school or academic institution, the intern does not displace regular paid workers and the employer derives no immediate advantage from the intern’s activities. Business owners considering internships should seek competent legal counsel.
What new provisions in wage and hour law should employers look for?
In California, 2011 should see the resolution by the California Supreme Court of perhaps the most significant wage and hour issue since Gov. Gray Davis signed legislation restoring daily overtime in 1999.
In recent years, hundreds of class-action lawsuits have been filed over the issue of whether business owners must ‘ensure’ that employees take their mandated meal and rest breaks or merely make such breaks ‘available’ to employees. The California Labor Code provision on this issue is ambiguous, and parties on both sides are eagerly awaiting the court’s ruling in a landmark case currently before it.
Regardless of what the court decides, prudent business owners in 2011 should review their meal and rest break policies to ensure that employees are taking the breaks afforded them under California law.
M. ALIM MALIK is a shareholder with Jackson DeMarco Tidus Peckenpaugh and chair of the Employment and Litigation Groups. Reach him at (949) 851-7458 or email@example.com.
JONATHAN M. WERNER is a senior counsel with Jackson DeMarco Tidus Peckenpaugh. Reach him at (949) 851-7422 or firstname.lastname@example.org.
The past couple of years have been stressful for most businesses, and Marko Mrkonich can relate — in some ways.
While the past two years have been crazy for him as president and managing director of the employment and labor law firm Littler Mendelson PC, it hasn’t been because the economy has been hurting his firm. It’s been a result of staying ahead of the growth that has taken the firm from $240 million in revenue in 2006 to $370.5 million in 2009.
“Growth simply to say you’ve grown is not necessarily a good thing,” he says. “When you find yourself in a position where the best reason you can come up with to undertake a new initiative is because it lets you grow, that’s not enough. That’s missing the point. Growth is an indicator of success, and it shows that there are positive things going on.”
He says that if you are an average company with average people and you add more average business and average employees to what you already have, then it’s not going to be the success you likely envision. You have to make sure you’re making your firm better with the people you add and the new projects you take on.
“When you’re on a growth curve, every once in awhile, you need to take a deep breath and assess what you’ve done and where you’re going and try to see the pattern and the trend of the line that you’re on and if you’re going where you want to go,” Mrkonich says. “You can get caught up in the excitement of the moment and start on a path without realizing exactly where it means you’re going.”
To make sure he’s stayed on the path during the past few years, he’s focused on hiring better people, creating the right environment and making sure he prioritizes what matters.
Hire better people
As Littler has grown, one of the keys to making sure the firm stays a strong organization has been hiring people into only the top half of the firm in terms of talent.
“If you’re average to start with, and you add people no better than what you were, you’re going to remain average,” Mrkonich says.
To make sure he gets people who will only move the firm forward, he goes beyond their experience. Littler has such a niche focus, experience is a given. He goes further and looks to see if they’ll fit in.
“When you’re looking at whether someone would be a good fit, focus on the person’s long-term goals and ambitions and see whether they align with your organization and if they fit with your organization,” he says. “So often, short-term goals dominate.”
He says you have to look at what their motivations are for leaving their current position. For instance, is someone interested in moving on because something unpleasant happened in his or her current company or is the person simply looking for a better opportunity? If it’s the former, that could happen anywhere, and you don’t necessarily want your people looking for a new job each time something unpleasant happens.
“You sort of start to focus on what the person’s ambitions are — what they hope to do professionally, what they hope to do personally, what they hope to do financially,” he says. “You sort of see and explore paths within that would bring that person in.”
You also want to make sure that the main reason someone leaving another position is not simply for more money. Sometimes a person may have specific needs that require looking for a position with a higher salary. But you have to distinguish between that and just chasing the next dollar, and the only way you can do that is to make sure you’re not enticing them instead of focusing on the attributes of your company.
“Generally speaking, people want to know that economically, they can, in the long run, do better,” Mrkonich says. “However, it’s our general practice that we don’t go buy people. Ultimately, if you recruit someone because you’re willing to pay them more today than someone else is, that can change tomorrow.”
Once you get past a person’s ambitions, you also have to look at his or her personality and who he or she is as a person.
“Get to know the person at a more human level,” he says. “What are their hobbies? What are their interests? What do they like to do in their nonwork time? What do they like to do within their work time? What part of the practice do they like the most?
“Once you break down a barrier or two, then you start to go beyond the interview-speak and hear what people are really thinking and feeling.”
This also helps you learn about not only why they’re interested in coming to your company but also what barriers they face in leaving their current position. For some people, they may only make one or two major career moves in their life, and if you’re a possibility, you have to understand that about them.
“If it’s someone who moves a lot and all the time, it’s not that we won’t find someone that’s a great fit, but that’s a … warning signal that you want to make sure it really is a great fit,” Mrkonich says. “If it’s someone considering the one move they might make in their career, you say, ‘Well, they’re more likely, if they find the right place for them that solves their long-term aspirations, to be a long-term team player for you.”
When you have someone like that, you need to be respectful and careful in what you say in your attempts to recruit them.
“One rule is, I never bash the place they are, because they’ve devoted a fair amount of their professional career and their personal time making that firm and that place all it can be, and that doesn’t get you very far,” he says. “To me, I like to focus on the future and the positive things that we bring as a firm.”
Have the right environment
When a lawyer in Los Angeles came forward with the idea of opening an office in Orange County, he wasn’t shot down. He explained that while working in L.A., he saw a huge market opportunity in the neighboring county and that the firm would benefit by having a ground presence there. He got the OK, and now there are about 15 lawyers in the office. A similar situation occurred with Minneapolis, which now has about 30 lawyers there.
“It’s building a business case for the idea, making sure there’s sufficient number of others that buy in, and it’s developing a budget and plan,” Mrkonich says. “If it makes sense, we do it.”
Empowering employees to bring forward new ideas has been one key to Littler’s growth, and doing so creates an environment of teamwork and collaboration.
“They believe that if they have an idea and they can articulate a reason to pursue it, they will never be told no,” he says.
If you haven’t had that kind of environment in the past, you clearly can’t just start implementing a bunch of ideas, but you can start somewhere.
“I don’t think you can take someone else’s system and graft it onto your own,” he says. “It starts with looking at your own values system, your own culture, your own business model and see where opportunities exist for new ideas and new ways of doing things, and then trying to work and focus on that aspect of the business.”
He says you have to look at what you’re completely committed to and what you’re completely not committed to in order to make decisions.
“If you’re committed through hard cost investment to a particular business model, and someone wants to come in and say that business model is wrong, that doesn’t help you much,” Mrkonich says. “You want to focus on the areas where, from a structural standpoint and a values standpoint, you’re open to new ideas, and then build systems that are compatible with your culture and understand and reward people for taking chances and identifying opportunity.”
Another element to having the right environment that promotes growth is making sure you are fostering and encouraging collaboration and teamwork.
“You have to have a rewards system that includes your ability to work together and how well you work with others,” he says.
This can be a series of metrics that are specific to a department or set of people, or it could just be one super metric. Either way, as the leader, you have to demonstrate this.
“If you or the people at the top are always claiming credit for good things and passing blame for the bad things that happen, it’s never going to work,” Mrkonich says. “There has to be a culture of accountability at the top, a culture of sharing and a culture of teamwork at the top. … If you do it at the top level, there’s some hope that it will filter out and be seen by those trying to work themselves into positions where they’re part of the leadership team as the right way to do things.”
And lastly, you have to make sure you’re communicating in an honest and fair manner with all of your employees.
“When there’s bad news, you can’t hide it,” he says. “One of my colleagues says bad news does not taste better served cold. That’s very true. It’s being realistic and being honest, making sure communication is frequent and also personal.”
Mrkonich is an avid fiction reader, and while he doesn’t read a lot of business books, Stephen Covey’s “Seven Habits of Highly Effective People” resonated with him when Covey spoke about prioritization.
“Obviously, if something is urgent and important, you’re going to do it,” Mrkonich says. “If something is neither urgent nor important, you’re only going to do it if you need a break — like playing solitaire on your computer — and then you have that, ‘What if it’s urgent but not important versus important but not urgent?’ How you balance those two things determines the effectiveness of your organization and you as an executive.”
And those decisions can also determine how well — if at all — your organization can grow. So when the phone is ringing, he has 10 e-mails to return and an employee is about to celebrate his or her 30th anniversary with the firm, how does he prioritize what to do?
“It’s time for you sit down and write a thank-you note to the person who just reached their 30th anniversary with the firm,” he says. “Which one is more important? This is a time when each is more important, but in the end, if you don’t get around to thanking the people who have been here for 30 years for their loyalty and commitment, you’re missing the boat.”
He says you have to develop a system for determining what’s important versus what’s urgent and weighing how tasks fall into those buckets.
“Make sure you don’t fall into the trap of doing things that are urgent but not particularly important at the expense of those things that are truly important but don’t have the immediacy that other things do,” Mrkonich says.
“You sit down, and you devote the time to planning and deciding. There’s no one answer. Sometimes things are urgent for a reason — even though they’re not important, they have to be done. Other times, you have to make sure you have time to do those things that are important but may not be urgent.
“Think of it as Saturday date night with your spouse or partner. That’s important. It may not feel urgent each Saturday night, but you recognize that if you don’t do it, you’re not investing enough into your relationship. … You start running around and saying, ‘I have to have this done, and I have to finish this and finish that, and you have to look at, ‘What if I’m a day late with that? What am I giving up?’ You have to know. It’s all about prioritization.”
How to reach: Littler Mendelson PC, (888) 548-8537 or www.littler.com
The Mrkonich file
President and managing director
Littler Mendelson PC
Born: I was born in a town called Thief River Falls, Minn. The nickname of the high school sports teams is the Prowlers — which today sounds like a felon in waiting, but it’s a nocturnal cat that was sort of the logo. I don’t know that a school would knowingly pick that these days. I grew up in Duluth for most of my childhood.
Education: Undergraduate and law degrees, Harvard
What was your first job as a child?
My first job with a paycheck was cleaning schoolrooms and desks in the summer time for the Duluth School Board. I was 16. I learned, to a certain extent, no matter what you’re doing, showing up on time and prepared is important.
As a child, what did you want to be when you grew up?
I wanted to be a professional athlete. I wasn’t even picky. I probably wanted to be a pro football player.
What has been the best advice you’ve received?
It’s interesting, because over the years I’ve been fortunate to have had many people share many pieces of wisdom. There are two I would say — one is from my father, which was, ‘Work hard every day, and people may not agree with you, but they’ll respect you.’ And [the other is,] ‘Worry about yourself and what you’re doing — don’t get caught up in looking at what other people are doing, because that’s a recipe for disaster.’
What’s your favorite board game?
Trivial Pursuit, because I think that it’s social and I just have a fondness for trivia.