“I had a lot of things people didn’t see because they were worried about my grade point and all the other things,” Gores says.
Though Gores, the founder, chairman and CEO of The Gores Group LLC, ended up getting a job at General Motors, even the executives there didn’t see what his strengths were right away.
“My strength was I was tenacious, aggressive, and I was willing to learn,” he says.
Today, Gores, a self-made billionaire, doesn’t want to forget that tenacity. He knows that passion is the lifeblood for TheGores Group, a private equity firm that focuses on acquiring controlling interests in mature and growing businesses, so he refuses to let himself get complacent.
“It starts at the top, so I’m open-minded, especially when hiring new people,” he says. “You also have to continue to be nimble, even though you’re big, you have to be willing to make mistakes and keep challenging your people because if it becomes about running everything by committee, you’ve lost it.”
So Gores has made a career out of risks, hiring passionate people who may not have found a home elsewhere and buying companies that weren’t making it alone.
By keeping himself challenged, keeping employees challenged by letting them take risks and make mistakes, and bringing in young talent for a fresh perspective, Gores has been able to shake the complacency out of The Gores Group on a regular basis. As a result, it has continued to grow, acquiring 70 companies since its inception in 1987 while expanding to include offices in Colorado and London. Currently, it controls more than a dozen firms with billions in combined annual revenue.
Keep yourself challenged
Gores knows a horror story that scares him more than any challenge he can have his people take.
“I worked with this guy a long time ago that had this word processing company worth $500 million,” Gores says. “Along the way came personal computers and this guy was so stuck in his technology that he was not open-minded to other technology. One of his engineers even saw the PCs coming along and he played around with putting their software on a PC. This guy, with his ego, basically fired him.
“Well, the rest is history. They went out of business a year or two later because the PCs came along, and that one mistake, not being open-minded and listening to your people, stays with me. If I get stuck in my way, thinking we’re the best instead of thinking, ‘Jeez, this business is changing, and we need to continue to look at the challenges and competitors and make it better, then I’m not doing what I’m supposed to do.”
Gores is constantly working to take on a bigger challenge than he’s ever met before to keep himself from getting complacent. He doesn’t go beyond the reach of his company’s financial capabilities, but he’s always looking for something that his competitors aren’t doing.
“Once you get successful, you’re stuck in this mindset and you think you have the best toy,” he says. “You are very close-minded because you think the world is never going to end, so it’s that fear that you have to have that this world is going to change, and you better be ahead of the game, and you better think like a start-up.”
To do that, Gores has to be the one leading the charge when it comes to taking risks. He constantly listens to pitches from managers on things the company has never done before.
“Status quo doesn’t exist for me,” Gores says. “I’m always keeping it challenging, I never want to do the same thing I dida year ago. We have to continue to challenge the people that are here so that they’re reaching to a point where it really hurts.”
That means that Gores tells himself something every day that most leaders don’t want to think about: He’s not the smartest guy on the planet.
“I don’t let that get in the way and start making a lot of assumptions that may not be true,” he says. “That’s a challenge because you almost are too smart, and you’ve been through too much, and that can keep you from going to the next step. But if you’re always challenging people to continue to take risks and reach and get better to make the company better, you have to do the same.”
When you are willing to hear those new pitches or sign off on something that the company has never done before, Gores says you don’t have to send out company memos every week telling people not to be complacent. When people see the senior leader producing challenges, it breeds more creativity.
“Whether it’s buying a company bigger than we ever bought or more broken than any before it, it’s always pushing, and that’s done by action,” he says. “I’m pushing the organization to do bigger things every day, so that’s the culture that exists here without me saying, ‘Gee, I want you guys to go out and do this.’They just know they have to do it. My job is to create these opportunities that push people.”
Tell employees to make mistakes
Though he likes to take risks, Gores had to come to terms with something that makes most leaders nervous: If you’re going to think like a start-up, you’re going to make mistakes. As much as that can hurt, he has two policies when it comes to that. He encourages his nearly 50 employees at The Gores Group and the thousands working for the companies run by The Gores Group to think without fear of a mistake while also telling them not to make the same mistake twice. The result is loyal employees who push the envelope.
“We make sure people understand that taking risks is good, making a mistake is good, as long as you don’t repeat the mistake,” Gores says. “I don’t want people that say, ‘I did a perfect job, and I never made a mistake.’ That concerns me. You create an environment where, when people make a mistake, they don’t get fingers pointed at them; you help that person fix the mistake.”
With a system where people aren’t just allowed to make mistakes, but they will be supported in their effort to fix their wrongs, The Gores Group is able to nip problems quickly because employees don’t try to cover up. That, in turn, helps reciprocate the company’s risk-taking capabilities because those people see the loyalty they get if they make a mistake.
“We’re not hiding someone’s mistakes under the rug, so that makes people open about making a mistake and taking a risk,”Gores says. “This open environment with people helping each other retains people because they know we have loyalty to them. Everyone wants to grow financially, but they also wantto grow personally, so our job is to make sure we create that growth for those individuals. Taking risks, making mistakes and the way the team comes together, those are all the things that keep people here. Most people don’t want status quo, most people want change. And I’d rather they grow here and make mistakes than go some other place.”
As with his own push for new challenges, Gores doesn’t want people being silly, so there are still checks in place for big decisions. Still, in order to think like a start-up he can’t have employees with feet of clay so he gives them the ability to pull the trigger on things to keep them from becoming stagnant.
“It ’s not like just go and do something stupid, it’s being calculated about it,” Gores says. “It’s making a decision. When you’ve looked at a decision and all the facts, sometimes you just don’t make the right decision, but as long as you’re not just running with your head cut off, it’s about encouraging people to make good decisions. If they made a bad decision, but they worked hard to look at all the facts, that’s OK.
“My whole career has been built on making mistakes, but you have to learn from those so the next time you do better. What’s important about this is if you made a mistake, you can’t get stuck in it. You can’t bring yourself down; you can’t think about it all the time. You have to let it go, you made that mistake, now go make up for it somewhere else.”
Grow young talent
If you’re thinking that what Gores wants his people to do isn’t for the faint of heart, you’re right. In order to keep challenging the status quo, Gores hires young talent and quickly throws them into the action. He remembers how aggressive he was when he got out of college and how there was no outlet for that passion.
“When I see a person that wants to come out of the box a young person out of college who’s been here for two years most people will try to hold that person back,” he says. “But I’m always pushing our people to throw these young people in the pool instead of coming up with 20 reasons why you can’t get them to the next level.”
That doesn’t mean that Gores gives young employees thepower to push the nuclear bomb button as part of first-day orientation, but he asks his managers to look for hunger in newemployees and tells them to feed growing employees as muchas they can handle it.
“I’m looking for young people that are hungry, that are willing to work very hard, and I want them to shake it up a little,” Gores says. “I want them to ruffle some of the people who have been here for a while. In many ways, the younger people that come in can challenge the others because they want to take on some things that maybe those of us who have been around too long won’t take on because we make too many assumptions.”
Once new employees get into the fold, Gores knows that even the most adventurous new talent may be reticent to speak up, so he makes sure that both he and his senior managers prod the talent to give his or her two cents.
“You tell them all the time that their job is to keep pushing and shoving to get themselves in and that pushes people that have been here, so they’re growing, too,” he says. “It’s difficult for someone that’s young to be as open as you are whenyou’ve been through 20 to 30 years of experience, so teaching them to speak up and be open is important. Every now and then, you grab one that’s been here for two or three months; tell them, ‘Don’t be afraid to be aggressive, this is what you have to do.’”
In throwing those young people in the fire and letting them grow up in the company, Gores also found that there is a collateral benefit, they appreciate the vote of confidence and find a home with the firm.
“Loyalty goes both ways,” he says. “It’s all about retaining people, the experience, the good will that we get as a firm by keeping individuals here from the time they are out of college until the time they’ve been a professional for 20 years. We have a great track record of people who start young, they’re loyal to us, they stay with us over the years, and we’ve found ways to keep them motivated so they don’t want to go anywhere else.”
HOW TO REACH: The Gores Group LLC, (310) 209-3010 or www.gores.com
Emerging technologies in the banking sector, such as remote deposit capture services, enable companies to reduce costs while improving efficiencies.
The image capture solution allows businesses to scan checks at their office location and deposit them by transmitting an image file. By eliminating the need for delivery or mailing of paper items, transmitted deposits can enter the collection stream faster and with less effort, cost and risk than with traditional methods.
Customers taking advantage of this technology have longer processing hours as well as improved funds availability and deposit reporting all without leaving their office.
“Now is the ideal time to take advantage of the benefits that remote deposit capture has to offer,” says Joy Gilmer, senior vice president of treasury management for Comerica Bank’s Western Market. “As more and more banks are exchanging check images rather than paper checks, remote deposit capture puts a business in the right position to take advantage of the savings and convenience of image technology.”
Smart Business spoke with Gilmer about advances in banking technologies and the benefits that remote deposit capture provides to businesses.
How have advances in technology improved the ways that businesses can handle their banking needs?
Through technology, businesses are able to quickly communicate financial information to and from their financial institution. With the advent of remote deposit capture, companies are taking advantage of later deposit windows, better processing float, simplified deposit creation and better record-keeping.
How does the concept of remote deposit capture work?
The concept is simple. A scanner is installed at the company and customers access the Web-based application from their PC workstation or laptop. Checks are scanned and an electronic deposit ticket is created. Once the information is loaded into the deposit capture system, the information is transmitted to the bank and made available for deposit processing. Since it is data versus paper checks being delivered to the bank, processing/desk float and manual processing errors are reduced significantly. Remote deposit capture services have proven to be a significant value in disaster recovery plans. Recent fires in California, for example, caused road delays that impacted the ability to deliver paper checks to the bank. With remote deposit capture, there are no ties to commute-related issues.
In what ways can this function improve record-keeping?
Deposit information, including images of deposited checks and electronic deposit tickets, is stored and available for retrieval as needed. Having quick access to this information improves response time to customer inquiries and reduces research expense. The capture process gives a company the ability to update account receivables systems directly. Reports can be accessed from anywhere using the Internet.
How can utilizing remote deposit capture increase productivity while reducing costs?
Remote deposit capture enables a company to make deposits without the checks physically leaving the office, thus, reducing expense associated with time out of the office, courier services and/or third-party depository banks. Deposit preparation time is reduced as information is scanned versus keyed or written. With the recent enhancements in the marketplace to Web-based solutions, deposit capture functionality is improved even further. A company with multiple locations can review consolidated reports, perform research functions and approve transactions remotely from any location. A company can now utilize the convenience of browser-based remote deposit technology.
What role do you envision technology will play in the future for banking?
Technology will continue to play a significant role in the financial arena. The movement and management of financial transactions is a complex process. Timing of obtaining and reporting information is critical to the health of a business. Having the right systems in place to improve processes is necessary to the ever-changing needs of the financial community.
JOY GILMER is senior vice president of treasury management for Comerica Bank’s Western Market. For more information on deposit capture technology or Comerica Bank's Business Deposit Capture, you can reach her at (714) 435-3931 or email@example.com.
When it came time for Barry Arbuckle to get his staff at MemorialCare Medical Centers to implement a new electronic medical records system, he was reminded of a lesson learned from his predecessor.
“Be prepared for the thousand questions they’ll likely never ask you,” says Arbuckle, MemorialCare’s president and CEO. “Because if they ask you and you don’t know, you lose momentum and you lose credibility.”
So Arbuckle’s job was pretty simple when it came time to overhaul the entire medical records process for the health system: He needed every answer possible to sell each facet of the change to every employee all 10,000 of them. After all, when you’re fundamentally changing the way people do their jobs, the onus is on you to give them the answers on why they should buy in.
“All of the sudden, you’re saying, ‘Change, it’s a fundamental swap, and you have to trust me that it’s going to be better,’” Arbuckle says. “Well, quite honestly, in the first couple of weeks, it’s hard, and there’s that propensity to say, ‘I’m going back to what I’ve done for years, it’s worked for 15 to 20 years, by golly, I’m going back to it.’
“Many of these people have done it the old way their whole life. Now we’re going to require them to change, and we’re going to take away every other means they had, that’s a big change, and you have to sell them on that.”
Rather than make employees feel like they were forced into changing, Arbuckle wanted to build buy-in for the new system to make sure employees felt like the adaptation wouldn’t just be good for MemorialCare but would also be good for them. To do so, he used a three-step process. He started off by including employees in looking for the answers on how to adjust, then used that information to push a consistent message about the new direction, and finally, followed up to make sure his staff had the right resources to make the change. As a result, MemorialCare implemented the new system on time and on budget, putting the $1.4 billion health system ahead of the technology curve.
Involve your team
“If folks understand why you are making the decisions you are making, they are more willing to go along with you on your journey as opposed to jumping ship and going elsewhere,” Arbuckle says.
The first step to that is acknowledging that even though you need to have all the answers for employees, you probably don’t have them.
“You have to know what you don’t know and acknowledge it,” Arbuckle says. “Sometimes, when you get to a leadership position, it’s easy to forget that. I’m a leader because I know more about this than most other people, but, my God, there are so many things I just don’t know.”
So when Arbuckle started the process of overhauling the records systems, he began by involving front-line people in the process before he implemented anything new.
“It’s got to be a vision that they also share,” he says. “It can’t be, ‘I’m being asked to do this because the hospital thinks it’s a good idea,’ there has to be, ‘I’ve been part of deciding that this is what we’re going to do because it’s what we want to accomplish.’”
The talk of a new system actually wasn’t started by Arbuckle but by MemorialCare’s volunteer physician’s society. Because physicians can’t be employed by a hospital in the state of California, Arbuckle has formed the volunteer group because he knows they are passionate about making medical care better.
Once the idea had been kicked around by the physicians, Arbuckle took it to other members of the team. He made it a point to get a diverse group of people, grabbing people from each department and each portion of the hierarchy because it’s important to make sure that every demographic is represented. When that group was formed, they became the eyes and ears for the staff, hearing vendors pitch new systems and voting to eliminate systems they thought wouldn’t work. The group was even invited to go to other hospitals to see working systems in place so they could ask about the things that concerned them.
“We said, ‘Let’s go out to a hospital like ours and see really how the system works,’” Arbuckle says. “‘Let’s have some side conversations and ask them, ‘If you could do it all over again, what would you do differently, would you spend more time doing this or that?’ And they got some grand ideas. It really added to our intelligence in terms of what to do and what not to do.”
Not only did it make employees feel involved in the process, but it gave Arbuckle a cheat sheet for those thousand questions that may never be asked.
“That’s useful because then you are able to articulate their reasons for decisions to board members or to employees whose livelihood you are potentially impacting,” he says.
To continue to get his staff thinking about the best system, Arbuckle even hired a former chief information officer of a hospital that had failed putting together a new system. The idea was to really let everyone get a close look at what would work best and what wouldn’t so they could articulate which system was the best fit. The employees had to make the change, so their opinions mattered more than anything.
“It was millions of dollars, but they selected it, and then they helped us build buy-in with our colleagues,” Arbuckle says. “The fact that they helped convince people who weren’t necessarily computer-ready to jump on this, that’s all that really matters because I don’t use that system. It’s easy for me to say, ‘This one’s big, this one’s popular, our neighbors chose this one,’ but that does-n’t work, particularly when you are asking folks to fundamentally change.”
Keep a consistent message
Though the inclusion process helped Arbuckle see the advantages of the new system, some of the staff still had to be sold on the fact that a change was going to be made. That takes a consistent communication process that ensures every employee sees the core vision.
“You have to articulate the end goal, ‘Here’s where we are today, here’s where we want to get, and does everybody agree that that’s going to require a change in between?’” Arbuckle says. “You kind of get everybody understanding that this is where we want to get to, there is a reason we are doing this, and the path that we’ve taken to today won’t get us there.”
Arbuckle could articulate the change well from what he’d learned by including his team in the process, but he still had to do it over and over and over again.
“It was communication, and that’s an overused term, but we probably overcommunicated,” Arbuckle says. “The number of Web casts that I did on this topic out in the field, the number of newsletters, meetings, social events and signs around the office, quite honestly, it felt like absolute overkill. But it turned out that it wasn’t, it was necessary because we had to just keep reinforcing why we’re doing what we’re doing.”
MemorialCare brought in a communications and education expert to design the communication plan because it’s tough to know how many times you have to tell 10,000 people something before it sticks.
“It was like, ‘My God, we’ve got to say this again. Aren’t people bored with this by now, I’m getting bored saying it,’” Arbuckle says. “But it turned out to be very useful. The more we did it, the more it became clear to them that this wasn’t just the project of the month or of the fiscal year, this was a marathon process where we were going to be steady and keep working toward the goal. That communication helped remind people that we were still out there, that they couldn’t forget about it. Just the consistency of the message is powerful.”
Not only does the consistency help the message resonate, but a consistent communication attack can also alleviate the negative virus brought about by the rumor mill. Arbuckle consistently spoke with his people about the change at meetings and spoke freely about the transition.
“I’ve learned over the years that people imagine and develop their own reasons for why leaders are doing what they’re doing, and many times, they are wrong, and many times, they can be disruptive,” Arbuckle says. “I always open myself up and say, ‘Ask anything you want.’ I bring the core message with me, and I’ll take that risk. Sometimes I’ll have to say, ‘That’s a good question, and I can’t answer it today, but I will answer it when I can.’ But I find that most of the time I can give people exactly what they want, reinforce the message, and we can move forward.”
Help employees adapt
Building buy-in doesn’t stop once the change is in effect, so MemorialCare continued to sell employees on the process even after the systems had been picked and implemented.
“Having them verbalize it is one thing, ‘Oh, yeah, I can make that change, it looks like a nice system,’” Arbuckle says. “Making sure they are actually understanding and willing to embrace and accept change is the powerful finishing piece of these projects.”
Understanding that some employees will take longer to change and some will have to make bigger changes than others is a big part of the last stages of getting employee buy-in. For MemorialCare, that meant understanding that even though the new systems got the thumbs up, extra time and resources had to be spent training those who couldn’t just jump into a technology upgrade. MemorialCare hired a clinical training specialist who was deployed to every physician’s office to see how each one handled computer systems.
“Part of that process was to assess where they were, where they were personally in terms of their own ability to use a computer would they need a side class on keyboarding and navigating a new menu,” Arbuckle says. “Most people don’t want to admit that they aren’t ready for a change, or they’ll exaggerate a tad, and that turned out to be very powerful in working with them privately to see what they needed to improve upon.”
Arbuckle was also concerned with the emotional aspect of making a change. During the switch to the electronic systems, MemorialCare employed a psychologist specializing in change management who worked with employees who were set in their ways. It might not be a realistic expense for every organization, but the main idea is to let people voice how the change affects them mentally.
“It really turned out to be valuable,” Arbuckle says. “This fellow led sessions on change management, and some people would say, ‘I thought I came in to talk about computers, and we haven’t said the word computer,’ but it was so valuable to let people discuss the problems they had with changing because people aren’t always ready for it.”
More than anything, Arbuckle focused on the fact that it was his job to do everything he could to sell his people on the change. Getting 10,000 people to move in a direction is never easy, so the goal is always taking the burden off them by making sure they see the benefit of the change and then being ready to sell them with the right answer to those 1,000 questions that may come up.
“We never treated physicians or staff as people who had to do this,” Arbuckle says. “We treated it like a sell, we had to pitch the actual value of it to them again and again, and our job was to help them get there.”
HOW TO REACH: MemorialCare Medical Centers, (562) 933-1800 or www.memorialcare.org
In today’s fast-paced business environment, the need to secure credit approval for merchandise purchases or services in a timely fashion has never been greater. Unfortunately, for many companies, the process of working with vendors, suppliers, financial institutions and other creditors can be a slow and arduous task.
In order to speed up the credit approval process, Comerica is offering services called credit mitigation tools.
The portfolio of services has a number of benefits, says Syd Saperstein, senior vice president, division manager of Comerica’s Special Corporate Financial Services Division. “Companies using this service can increase their profitability, increase their market penetration and increase customer satisfaction,” he says.
Smart Business spoke with Saperstein about the importance of obtaining credit approval in a timely manner and how the process can be facilitated.
Why is it so important for companies to be able to obtain credit approval in a timely manner?
Fulfilling customer orders in a timely manner is critical to any good customer service position that retailers or wholesalers need to maintain. If they can’t get credit approval in a timely manner for the goods they would like to order, then their customers will not get the product in the time frame that they expect it.
How does the composition of the supply chain affect credit decisions?
Products in a supply chain may go through as many as five or six wholesalers and distributors before they get to a retailer. Manufacturers usually don’t sell direct to retailers or consumers. Manufacturers sell to distributors who sell to wholesalers who sell to regional wholesalers who sell to retailers who sell to consumers. Every step where goods change hands is a credit risk decision that is going to be made by credit managers or the policy of a particular company about how and when they want to be paid and whether they are going to ship goods before they’re paid.
What are some methods that can be used to facilitate the credit approval process?
We substitute a trustworthy payer in the middle of the distribution chain I just mentioned. Instead of a wholesaler/manufacturer/distributor having to decide how much to trust a customer with a net worth of say $250,000, we substitute the customer with the bank that has $58 billion in assets. We replace the risk that would have been assumed by the wholesaler/manufacturer/distributor by putting the bank in the place of the customer.
Of what does the credit mitigation tools portfolio of services consist?
The portfolio of services is devised to put reliance on the creditworthiness of the bank in place of the higher risk ‘promise to pay’ of the distributor or retailer. To put it into a consumer context, let’s say you want to purchase a product from an online Web site and it costs $350. You would supply your credit card or checking account number to that seller. The seller would immediately collect the money from your account. When the seller gets the money, it tells the wholesaler/manufacturer/distributor to drop ship those goods that you just bought.
If the Internet seller has a credit line with a supplier and hasn’t exceeded its allotted credit for the month, then the wholesaler/manufacturer/distributor will ship the goods within four to five days. The customer is happy, and the retailer is happy.
The wholesaler/manufacturer/distributor incurs a risk because it has a sale but does-n't have any money yet. It has to wait until the end of the month and see if the retailer is going to actually pay the bill. So there is a limitation on how much credit the supply chain will permit to the retailer. The credit mitigation tools portfolio addresses these concerns.
How can companies benefit from this service?
In addition to increasing profitability and market penetration, companies using this service can increase the depth of product availability because they will never be out of stock. They can increase the breadth of products that they can offer for sale because they will no longer have barriers that will keep them from being able to fulfill their orders. If they were buying only from those suppliers where they have established credit, they would not be able to buy enough variety. For example, they may only have four or five manufacturers who grant them the credit they need. Credit mitigation tools can reduce this risk. Also, companies will be able to speed up the turn of inventory to whatever the consumer-driven demand is.
SYD SAPERSTEIN is senior vice president, division manager of Comerica’s Special Corporate Financial Services Division. Reach him at (415) 477-3246 or firstname.lastname@example.org.
The fruit and vegetable cooperative has been running a program for several years now where a child, ages 7 to 12, can use a special Sunkist lemonade stand to raise money for his or her favorite charity.
To Sunkist President and CEO Tim J. Lindgren, it’s the perfect way to do some charity work while also building on an international brand.
“We build on the fact that Sunkist has a long tradition of wholesomeness and that reinforces that,” he says. “We provide them with a lemonade stand in front of public events or stores, and they serve lemonade with the Sunkist brand on it, so we get associated with some real wholesome activities, and I think we probably have now 20,000 of these stands, so every time you see one, it’s around some wholesome activity; that’s the image we’re building on.”
If it seems pretty basic that a household name like Sunkist has an image based on wholesomeness, then the brand work done behind the curtain has been successful. But that doesn’t mean that it does-n’t take a heavy dose of leadership to grow a successful organization. In addition to taking the reins for one of the largest brand names in the world, Lindgren is charged with leading more than 400 employees between Sunkist’s office and manufacturing facility, as well as working with the 6,000 grower members in California and Arizona. Lindgren has been aggressive with his leadership and has moved Sunkist forward, pushing it to $1.1 billion in revenue for its growers in 2006, up from $1 billion last year.
Here’s how Lindgren has continued to raise the bar at the largest fruit and vegetable co-op in the world.
Give your employees a basic vision
With more than 6,000 growers in the co-op, Lindgren will be the first to tell you that there are many, many babies to kiss and hands to shake along the path to building buy-in.
“I would tell a new CEO that probably the single most important thing you can do is to get a basic vision that is a composite and get it out in front, and then march ahead with it,” Lindgren says. “Because when you get a vision out there, it allows everybody to participate. Different people have different talents and a different frame of reference, but if you can get them all going under one vision and orchestrate it so all the product that comes out is a really one, single product, where everyone knows that is the goal, that’s the best thing you can do.”
That single vision becomes the cornerstone of every initiative in the company. For Sunkist, it’s based around being the best brand in the market. From that simple idea, Lindgren can get everyone on board and then start to work out the specifics for the rest of his strategic plan. That’s when he hits that long road of trying to get ideas and feedback from those 6,000 members.
“It’s extremely important to have a defined vision out there; it’s important for your team and staff to participate in developing the aspects of it and that they participate in the modification of the plan as you go forward,” Lindgren says. “We’ve had amazingly positive response from our growers, and we are really revisiting all areas of our company operations, everything that we do.”
Once you’ve set up the basic vision, you can go back and really focus on the details by doing something else that is simple: asking for feedback.
“We’ve gone to the growers and said, ‘We want to create a new vision and what do you see as far as priorities,’ and it’s been an amazingly satisfying prospect,” Lindgren says.
It’s in that mode that face-to-face meetings become important. Though he can’t realistically get to everyone, he does his best to organize ways to get feedback from as many growers as possible. He takes time on the road to see people and get as many people as possible involved even if he can’t fit their idea into the updated version of the vision.
“There’s no substitute for that, going to their home or grove and talking to them,” Lindgren says. “We have grower meetings, we go to areas and have luncheons and have conversations with them about what is happening at Sunkist.
“It’s very important to see what they’re feeling out there and also communicate what you’re trying to do. It has to be done in a somewhat organized manner because obviously with 6,000 growers, you’re going to get 6,000 different points of view, so it takes experience to filter through it to make sure what you’re hearing, what you’re passing on, what you’re taking action on is done within an organized framework. But it is extremely important both from an information-gathering standpoint and for making them feel involved.”
Build a company around a brand
Lindgren wants you to know that whether you’re aware of it or not, the Sunkist brand is all around you.
Don’t be scared, it’s part of the plan. With Sunkist, building up and protecting the brand is on top of the organization’s to-do list. So, while it has lent its name to more than 600 products, ranging from soft drinks and juice to candy, in 50 different countries, there is a method to the madness.
“It’s a real sacred trust, it’s a brand that’s been built up over more than 100 years, it is one of the most recognized food brands, so it’s something we take very seriously, and our quality control and service levels have to be maintained and stay high,” Lindgren says. “My role as CEO is to be certain that when someone has a Sunkist brand they know they have a good, quality product, so we have a pretty rigid system of quality enforcement. Beyond that, we are always promoting our brand.”
That promotion, like the lemonade stands, is centered on keeping the brand tied to its strongest and best-known elements. The basic thing Lindgren wants to do is to keep that profile regardless of where the brand moves. Therefore, Sunkist has implemented a snack program where it provides sliced fruits as an alternative to vending machine snacks. Sunkist also turned its focus to organic fruits for the first time in 2007, a strategy that took years to plan out but that keeps consistent with the idea of building goodwill around the brand.
“Our main thrust was to get out and establish identity,” Lindgren says. “The product lends itself to that; there’s nothing more wholesome than a citrus product, so you start with that, we maintain high quality, we have a staff that’s dedicated to promoting that, and they are constantly taking that out into the public.”
Not only does Sunkist want the consumer to see the brand as the label of success, but Lindgren uses it as something like a company flag to fly outside the office.
“The brand is central to everything,” he says. “We take great pride in it, and it’s developed a great culture for us. The brand gives you a rallying point. When you have something to build on, it’s not like you’re starting from scratch. It’s important to understand that the brand is sort of the banner out there to combine the emotions and efforts of people. It becomes a really good rally point for combining people who have been in the system for a long time and the new people coming in who can immediately attach to a pride and a continuity.”
The idea of hanging a brand flag can work as an energizer on both ends, too. While building a successful brand will give employees something to believe in when times are rough, it can also act as a starting point for upping the ante when times are good.
“It’s important that when you talk about the brand and the vision that it isn’t just something that you do when you’re down or in trouble,” Lindgren says. “We came off one of our best years, but we decided to take on a major new vision wrapped around our Sunkist brand even though we’re on top. You always need to be improving and looking ahead, and it’s better to do that when you’re on top than when you’re fighting from behind, so you can use that to motivate them to keep upping the brand.”
Lead without fear
Lindgren has learned plenty about leadership in his time at Sunkist, but there’s one business lesson that he takes with him that comes from outside of the business world.
“I had a friend who was a great athlete, and I asked him one time, ‘How do you do this?’” Lindgren says. “He had all this national claim and attention, and he told me, ‘My motto is that I hate to lose, but I never let the fear of losing interfere with how I play the game.’”
That fearlessness is something that Lindgren has applied to his leadership tactics ever since. And while he appreciates the consensus he builds at Sunkist, he knows it’s not worth anything if he can’t push final decisions out the door.
“One of the things that I’ve learned is that you are the leader for a reason, and you’ve been selected to do that,” he says. “So the buck stops here, and the final decisions have to be made by you.”
That’s not his way of saying forget the team, but he knows that there are times that you simply can’t get a final move from a larger group, and when push comes to shove, you have to be willing to make the big decision and present it to your people.
“I consider myself to have a very participative style of management, so I like to build up consensus, but I guess the only regrets I’ve had over the years are when I have not ended up using my own individual judgment,” Lindgren says. “At the end of the day, you’ve got to sort everything out and make the decision. I’ve had ventures that I’ve not gotten involved in that I maybe should have because I got overly cautious advice or times where I was pushed by advisers to do something I wasn’t sure about. Over the years, my experience has been that my judgment, combined with the best advice I have available, is the thing that I have to lead with. At the end of the day, you have to go with your judgment, and you’re going to win more than you lose.”
HOW TO REACH: Sunkist Growers Inc., (818) 986-4800 or www.sunkist.com
Jim Holbrook eavesdrops. Whether on airplanes or in aisles at local retail stores, he keeps a journal of what people do, why they’re traveling, what they want and what they need. That’s because the answers are in the marketplace, says the CEO and director of EMAK Worldwide Inc., a family of marketing agencies with 348 employees worldwide. Although his mantra is admittedly borrowed from another CEO, Wal-Mart’s Sam Walton, it has brought impressive results to EMAK, which posted 2006 revenue of $181 million. Smart Business spoke with Holbrook about consistency, short-term memory loss and why it’s important to weed out assholes when hiring.
Make employees feel that they are part of the team. The last thing you want to do is show up and feel like you’re not making a difference, that you’re just a cog, that you’re just pushing stuff around, that your role doesn’t really matter. Getting everybody to feel like they’re on the team is critical. Delegate the work so that they feel like they’re making a difference.
We put our business plan on one page, and everybody gets a copy of it. It’s very clear what our objective is, what we’re trying to do and what the key priorities are for the year. Everybody gets a copy of it so they can refer back and say, ‘OK, I’m working on this project, and I see how it fits in,’ or, ‘I’m working on this project, and I don’t really see how it fits in. I’d better ask somebody if I’m heading in the right direction.’
The ideal work environment is a place where people drive fast to work in the morning and drive slow home at night. I’ve worked at companies where they have massage therapists come in or there’s a barista making special espressos. That can be artificial and superficial. Employees know when they’re being bamboozled. It’s got to be a genuine effort.
If people are happy, stimulated, and feel like they’re productive and part of the solution, then the results will be better.
Avoid assholes. There’s a book out now [by Robert I. Sutton] called ‘The No Asshole Rule.’ Hire people that are good people, that have a positive outlook on life, that are optimistic and that are outgoing. It makes work life a lot better.
Look for people that are curious. The people that come into interviews and ask me lots of questions, generally, I know are well-briefed, interested and trying to learn something. Those are the kind of people that are not assholes. The curious people are the ones who really want to know what it’s like and how does everything work.
Our interviewing process is multistep. We don’t interview somebody on one day and make them an offer. It takes several rounds, meeting with several people. It’s an inclusive process, so the person gets voted on by the team.
I never recommend that we hire that person unless they ask me five or 10 questions, at least, throughout an interview. The curiosity factor that is the real recipe for success in business.
Know when to act. At some point, you’ve got to say, ‘OK, I’ve heard enough. Like it or not, we’ve got to do something. Let’s do this.’ I think that’s the critical balance at the CEO level know when to intake and listen, and know when to decide and move on.
My first boss at Procter & Gamble always taught me to get to 80 percent. That’s good enough. Once you have 80 percent of the data, do something. Getting the last 20 percent is so painful, so expensive, takes so much more time and has diminishing returns. If you have to be 98 percent right all the time or have 98 percent of the data or facts, the organization will become more stagnant
Remain in the present. We try all kinds of things that don’t work. If we were batting 1.000, that would mean that we were playing in the wrong league.
One of the key factors is short-term memory loss. You don’t look back. My management group spends some time talking about what we tried that didn’t work and coming up with those conclusions. Playing too much Monday morning quarterback is not a good proposition.
CEO as judge and jury is a bad role: ‘I’m going to wait for you to screw up, and I’m going to criticize you.’ It makes the organization become risk-averse, and then the CEO has to be the one coming up with all the things because nobody else wants to get criticized. A little bit of criticism, a little bit of introspection and self-analysis is a good thing.
It stretches the people. It shows the people that they can try things as long as it’s prudent. The benefit really is making the employees feel like they can push the boundaries.
Stay consistent. We set strategies that are enduring, not something that happens this quarter, this month or even this year. It’s an ongoing objective that we have to work toward. Setting those objectives and coming back to them consistently is what drives alignment and then drives the results.
Re-evaluate not the goals as much as the way to get to the goals. It’s not like, ‘These don’t work. Let’s try something else.’ Try to be very consistent, day to day, week to week, month to month, even year to year.
It gives people the opportunity to understand and get on board.
A lot of organizations change their agenda all the time, and that just confuses everybody: ‘Are we working on this? Were we working on that? Well, now we have a new agenda, so I’m not going to work that hard on this because something else is going to come down the pike.’
If people know what’s going on and have visibility into what’s happening, then it drives alignment. Alignment is the key to a successful and empowered organization.
HOW TO REACH: EMAK Worldwide Inc., (323) 932-4300 or www.emak.com
Since taking the title of managing partner in 1999, Greg M. Nitzkowski has had a unique challenge at Paul, Hastings, Janofsky & Walker LLP: The international law firm is extremely successful.
It’s not a bad problem to have, but it gives Nitzkowski fits when he has to get his people to buy in to the changes the firm has to make to stay on top of the market.
“The challenge is, how do you get people fired up to recognize that as hard as they’ve worked, that the bogey is just going up?” says Nitzkowski. “How do you go about giving people who have been doing better each year for 10 or 15 years running a sense of urgency? That is really what a leadership position is about.”
The basic thing that Nitzkowski must do when he wants the firm to grow is create buy-in from his entire staff. That’s not easy when you have 1,200 lawyers and 3,000 total employees spread over 18 offices, so he goes through a process of building up momentum by keeping in touch with his people.
“We’d all like to stop and say, ‘Gee, isn’t this comfortable?’” Nitzkowski says. “But the goal is getting people to recognize that a sense of comfort is certain poison and that you always have to push yourself because we’re in an extraordinarily competitive marketplace. It amps up the need for communication. You have to project very specifically the need for change and how it relates to the decisions individual partners are making each day.”
Using that idea, Nitzkowski built a strategy to get buy-in for new direction at the firm. By making himself available to his people and understanding their jobs, he is able to tie the vision to a context that puts emphasis on how the firm’s success will benefit the individual. In turn, Paul Hastings has continued its success, growing from $667 million in 2005 to $815 million in 2006.
Show your face
It’s not easy to push new ideas for an already successful business, so Nitzkowski starts off with a very simple strategy at Paul Hastings: He shows his face around the office. Nitzkowski spends more than two weeks of every month visiting some of the firm’s 18 different offices, making the time to attend smaller partner meetings to listen to new ideas and to be seen.
“The most important thing is just being in the offices and being available,” says Nitzkowski. “It’s important for the other leaders in our law firm to see that we are really one of them. I want them to see that we are derived from them, and our authority derives from their skills every day that’s essential to culture.”
To Nitzkowski, the first step to improving Paul Hastings is to get in touch with as many people as possible to find out where the firm can sharpen its acumen. And while he can communicate some strategies via e-mail or conference calls, he says the best bet for step one of building buy-in is working with employees to get new ideas and to give them a good look at the leader behind the plan.
“There is no substitute for being across from somebody, answering their questions, and having them challenge you and them seeing some of their own influence in the ultimate shape of the decision,” Nitzkowski says. “People respect that you ultimately have to go a certain direction, you have to make a decision, but as leaders, our decisions are very much touched by that input.
“E-mail is terrific, but it’s not the way to have meaningful dialogue. It’s terrific for information conveyance, but I don’t think it’s a good tool for consensus issues that you face or communicating about the successes or challenges of the firm. Somebody being inspired by the personal qualities and visions of a leader is very motivating, so you have to have someone people want to follow at the head of the enterprise. Very few enterprises succeed over the long run without having someone in the leadership position that others want to follow.”
Nitzkowski knows that he can’t be best friends with all 3,000 employees, but the idea is to make a human connection with every employee so that new strategies come from a leader, not a corporate signature.
“I try to be there for orientation and training so that we’re the human face of the firm,” Nitzkowski says. “Part of gaining consensus is you have to demonstrate that you have all the qualities that they admire in their colleagues and the understanding of what’s going on in the market so that you build the case in a logical way to get them to understand whatever kind of change you need to make to keep up.”
Finish your homework
While it’s nice for Nitzkowski to spend time in the office, he knows that’s just the first step. He has to come in with his homework finished.
“In doing this job, you have to accept that no matter how smart you are or talented you are, when you’re in the room with other lawyers, 99.9 percent of them secretly believe they are smarter than you,” Nitzkowski jokes. “You have to accept that, and recognize that ambition and pride is a great part of what drives them, so it’s a good quality.”
Before he talks with a partner at the firm, he insists on knowing what he or she has been working on and how it ties to the strategic plan for the firm.
“When I speak to a partner, I know exactly how they spent their time for the last five years, I know what their team looks like, I know the concept of that team, I know how the model of that team relates to the profitability model and the strategies of the firm,” Nitzkowski says. “I can meet with them and talk in a very specific way, some of it having to do with metrics, some of it more conceptual, about the direction of the firm, talk about mismatches, things that we need to see from them in order for Paul Hastings to reach its goals.
“When you ask, ‘How do you drive people toward the changes in behavior that they’re going to have to adopt in order for the enterprise as a whole to succeed?’ It’s about communicating deeply and clearly and being viewed as very prepared and knowledgeable about the marketplace in a way that helps us build consensus.”
A big part of that is going to the partners at Paul Hastings with a good bit of background on how individual work fits in with the market and what changes must be made. At the heart of building buy-in is a need to communicate but also a need to back up that communication with hard evidence on where Paul Hastings needs to go.
“It has to come from the needs of the enterprise itself,” Nitzkowski says. “Looking into the future, looking into the market, understanding what kind of enterprise you have and saying, ‘What do I need to drive us to a more successful future and what are the changes that are going to be out there on the market?’ Being familiar with their work makes the message much more powerful and helps me talk about the direction of the firm. That’s the key part of changing behavior, understanding what people are doing and connecting up where their strategy ties to the model and then showing them the mismatches in what they’re doing in a direct and thoughtful way.”
Put the vision into context
Once Nitzkowski has done all of his homework, the final step to building buy-in is to roll out a vision that is based on a mixed concept of the firm’s strategy and how it fits in to the context of his people. The idea is to make a personal connection with what may otherwise seem like merely high-end firm goals.
“It becomes about putting into context the decisions that we’re making that affect their daily lives,” Nitzkowski says. “Why we’re doing it, how does that relate to what’s happening in the marketplace, why it will give them greater opportunity. Making a connection between the things that matter to associates and the decisions that we’re making, that really is the job of the leader’s communication with employees. For those that aren’t as deeply invested in the firm, it’s very valuable that their career here is connecting to what they want their future to be.”
The contextual part is where it’s easy to get confused. While Nitzkowski would like to believe that he can put together a vision that will keep all of his employees deeply engaged in the future of the firm, he realizes that just won’t happen. Instead, he draws up a plan that shows how individual success drives company status and how that company status will drive individual success.
“Retaining people is a combination of them believing in the vision, seeing the trajectory of the enterprise, understanding how the decisions being made will help propel that trajectory, them feeling richer in every way because of their connection to the enterprise,” Nitzkowski says.
“One of the things you have to accept as a leader is that people come for all sorts of different reasons, and not everybody shares the goal of going to the top of the firm. You have to communicate with them why your vision to be an elite player in the marketplace will help because no matter what their personal goal is, if the enterprise itself is building up to be an elite institution, their trajectory is enhanced, as well. You give them that combination of self interest and the firm. You want people to believe that by hitching their wagon to a star they are going to soar much higher and farther than they would otherwise. That’s a big part of helping them see their own professional opportunity because regardless of what they are doing, they want to be part of the best team possible.”
To Nitzkowski, it makes sense to view getting employees to buy in to the firm in the rule of thirds: One-third of your employees will be on board with any company strategy, one-third can be convinced in time, and one-third won’t care about the company goals. Knowing that, he tries to make a connection with those people who may be not staying for the long term so that they still desire success in their tenure. By showing them how they can grow, he gives them a road map to a better future and a reason to get there.
“You can’t make the direct personal connection with every person about their goals,” he says. “But it’s about describing the vision and trajectory in a way that they can link their own future to it. They see where they hook their strap to that star so they can get that ride out of this. And when they see where they hook their strap, they can see that this place is going to take them much, much further.
“You have to have that human capital day in and day out, connecting with the big strategy so that they understand that the things they choose to work on, how the time they spend training an associate or not, will help the enterprise. You need them to understand how important what they do is so they feel connected to it.”
HOW TO REACH: Paul, Hastings, Janofsky & Walker LLP, (213) 683-6000 or www.paulhastings.com
If your company has recently grown or has added new hardware or software and your information technology department is working its fingers to the bone trying to keep up with the demand for help from end users, it may be time to consider an MSP, or managed IT service provider.
“With the shortage of qualified IT professionals in the marketplace at the moment and the increased technology demands from compliance issues, IT departments are finding themselves stretched thin,” says Gary Matsuda, co-founder and executive vice president of Agile360, a technology consulting and engineering firm based in Irvine, California. “Companies that find themselves in this position ought to consider outsourcing IT functions by using an MSP.”
Smart Business spoke with Matsuda about MSP and how it can help companies take control of their IT departments without losing control of their information.
What can an MSP do for an IT department?
MSPs offer a variety of core infrastructure services that generally fall into one of two categories: reactive services or proactive services.
The large majority of MSPs provide help in the reactive category. This could include hardware and software monitoring and troubleshooting, application support and tuning, and general help desk duties, such as password resets, printing issues, etc.
In the ‘proactive’ category, MSPs can provide consulting on larger issues, such as patch management installing security measures and basic upkeep of the operating system and application software. An MSP can also provide help in strategic IT planning through quarterly business reviews with the business or application owners. In these review sessions, the previous quarter’s issues are summarized and topics revolving around performance and efficiency are discussed.
In addition, some MSPs provide co-location services, including fully redundant data center infrastructures with managed physical or virtual servers on a monthly rental basis. These co-location servers can be located in different geographical regions and, with data replication technologies, can provide a key component of a company’s business continuity solution in case of a disaster or system malfunction.
When should an IT executive or business owner consider an MSP as an alternative to hiring more IT staff?
An MSP solution works very well for many small- to medium-sized businesses that are finding it hard to keep their IT staff lean and efficient. When a business grows and adds employees, it usually requires more IT staff to support these end users. By hiring an MSP to handle the core IT services, the business does not have to keep adding IT staff and deal with all the training and retention problems that go along with it.
Contracting an MSP could be a sensitive issue within the IT department and needs to be positioned in the right way. Your IT staffers need to realize that they are not being displaced, but that the MSP will help offset the added workload and allow them to focus on more strategic IT initiatives.
Could hiring an MSP save money?
Yes, and the cost savings can be significant when you consider that the average salary for qualified IT professionals in Southern California can range from $60,000 to $100,000-plus a year. Many MSPs offer ‘block support’ contracts, which are prepaid hours of support. These also come in different levels from advanced senior level IT support for complex issues to more basic remote administration duties, such as the ‘help desk’. The prices per hour or per block will vary accordingly. That said, if a company’s IT environment is chaotic, it may require some prerequisite costs to stabilize the environment in preparation for a hand off to the MSP. But assuming that the IT situation is under control, the savings can be significant.
Are there security risks associated with hiring an MSP for co-location services?
Depending on the level of management and administration delegated to the MSP, security risks are not too different than if a company were to move its services to a co-location facility on its own. That said, you do need to trust that the provider has a good hiring process with background and other checks and qualified personnel.
There is a lot of concern today regarding disaster recovery, particularly because of more stringent compliancy issues. How can MSPs help companies with disaster recovery?
Any good disaster recovery or business continuity solution will have a second data center in a different geographical location, but having a second site is usually cost-prohibitive for many small- to medium-size businesses. It is very expensive for a business to have its own computing resources in a different location on a standby basis, which requires a huge capital investment in rack space, network, servers, operating systems, power, cooling, etc. MSPs can eliminate the capital outlay required to support a secondary data center by providing managed servers on a rental basis, moving the expenses to the operating budget. As an added benefit, with the proper data replication and management tools in place, the second site can also be used as a development/test environment.
Using an MSP’s co-location services is an excellent alternative to fulfilling a disaster recovery plan. Disaster recovery is a hot topic now because of the compliance-related tasks a business needs to fulfill in order to adhere to its documented business continuity plans.
GARY MATSUDA is the co-founder and executive vice president of Agile360, www.agile360.com, a technology consulting and engineering firm based in Irvine, California. Reach Matsuda at (949) 253-4106 or email@example.com.
Many business leaders believe that growth problems are good problems to have. But for Brian Oken, that doesn’t make the problems any less substantial.
“Businesses go through cycles,” says Oken, president and CEO of Ventura Transfer Co., a bulk handling and transportation company. “We’re having a lot of fun, and we’re doing a lot of things really well, but we have grown considerably over the past couple years, and we’re feeling that.”
Oken says with increased volume, the standards of performance VTC has set for itself especially those regarding customer service are being challenged. With annual revenue of about $18 million and growing, he adds that while maintaining simplicity is important, solving new problems means creating new solutions, and that requires employees who are willing and able to grow along with the company.
Smart Business spoke with Oken about the perks of being a trusting leader and the importance of employee feedback.
Q: How would you describe your leadership style?
Trusting. I like my people to pursue their own agendas while staying in touch with the company’s vision and strategic plan. In order to do that, you’ve got to trust them. Sometimes they hang themselves, and sometimes they become real heroes, but you’ve got to give them that latitude. You can’t constrain them, and I try to push that through the organization. We’re a company that lives by standards of trying to be a great place to work. Talk is cheap, and it’s much harder than it appears, but at the foundation of that is trust and respect.
Q: How do you build trust and what are the benefits?
Integrity and credibility are everything. Right now are challenging times for us. Our business has had very good growth over the past two or three years, and it’s definitely strained our capabilities and our managers’ typical ways of doing things.
At times, that credibility has been challenged. To be able to fall back on, ‘I’ve never lied to you, I’ve never deceived you, I would never manipulate you, you might not like what you hear’; you have to have that credibility, and we try to push that through the organization.
We’re in business for profits. Whether you’re a private company or a public company, you’re looking for a return for your shareholders, and you’re always looking for incremental improvement and to make sure you’re still a healthy, dynamic organization. All these things are done for two reasons: One is because they’re our core values and our beliefs, and they also generate return. Our customers are happier, our team members are happier, and our financial performance reflects that.
Q: How do you communicate your vision to your team?
We’re a private company that has full disclosure among our people, so when we go through the planning process, our financials are keeping score. Are we winning the game, are we losing the game, or are we just treading water? When we have a planning session, everybody is invited, and everybody knows what’s at stake.
After the planning meeting, during which the plan is developed and approved by the board, every month, we have my direct reports sit in front of a room. Imagine a classroom, and they’re all sitting by the chalkboard, and we fire at them the objectives of the plan, and it’s up to them to demonstrate results. This is the one time we’re very firm about, ‘We’re not interested in hearing about effort. What have you given our customers that they didn’t have 30 days ago?’
Q: How much feedback do you get during that process?
To be honest, I wish I got more. In business today, there is a feeling among many employees that they’re afraid to ask questions, afraid to bring up thoughts or observations because they feel like they’re going to come across as being stupid or seem like they’re not in touch. I really respect the people who stand up and say, ‘I have a question,’ and bring forth some insight.
You have one person who is providing the vision, then you have the executive team, and then you have all these other people. All these other people are the guts of the business. Their brains are full of ideas. They have tremendous insights and observations on what’s going on with our business and our customers, and most companies don’t solicit that. We really try to solicit that. We try to bring it to the surface, and I wish that we had more.
We have the traditional suggestion boxes and anonymous e-mails, but more than anything, I’m trying to be around them and trying to get them to give me their insights, whether it’s in traditional meetings or just in general conversation. The questions I get are great. They’re usually far better than anything I can anticipate.
HOW TO REACH: Ventura Transfer Co., (310) 549-1660 or www.venturatransfercompany.com
Lung cancer is one of the most common malignancies in both genders. In terms of new cancer cases each year, it ranks second only to breast cancer in women and second to prostate cancer in men. There are approximately 170,000 new lung cancer cases annually, and each year about 160,000 deaths are attributed to it.
As a result, says Dr. Jay M. Lee, Surgical Director of the Thoracic Oncology Program at the David Geffen School of Medicine at UCLA, “Lung cancer is the deadliest malignancy and the leading cause of cancer-related mortality in both women and men.”
Smart Business spoke with Lee about lung cancer, how it is detected and what steps can be taken to reduce the odds of getting this form of cancer.
What are the different types of lung cancer?
Lung cancer is a malignancy where cancer cells grow in the tissues of the lung. There are two major types of lung cancer, nonsmall-cell lung cancer (NSCLC) and small-cell lung cancer (SCLC). NSCLC is much more common and accounts for 80 percent of lung cancer cases. By the appearance of the cancer cells under the microscope, several histologic subtypes have been classified for NSCLC. The common subtypes include adenocarcinoma, squamous cell carcinoma, large cell carcinoma and carcinoid tumors.
What are the possible signs of lung cancer?
Lung cancer can be present with no symptoms, particularly in its early stages. However, when symptoms do occur, they can include nonspecific and often subtle symptoms such as:
- Chronic cough
- Hemoptysis (coughing up blood)
- Unexpected weight loss or loss of appetite
- Difficulty breathing
- Bronchitis or pneumonia
- Chest pain or discomfort
Because these symptoms are also present in other lung problems, you should consult your doctor to find out the cause of the condition.
How is lung cancer detected?
Patients with suspected lung cancer are detected in two scenarios: 1) The onset of symptoms prompts a visit to the doctor or 2) in the case of asymptomatic individuals, a routine examination and radiologic testing leads to the finding of an abnormal spot [tumor] in the lung. In both situations, the doctor will evaluate a person's medical history, assess risk factors and obtain a family history of cancer. The doctor will also perform a physical examination and may order a chest X-ray or a specialized X-ray called a chest CT scan. Although the radiologic studies allow the detection of abnormal spots in the lung, they do not provide tissue confirmation of lung cancer. Therefore, to make a diagnosis of lung cancer, the doctor will need to obtain a sample or biopsy of the lung tumor. If you are diagnosed with lung cancer, the doctor will do further radiologic testing to find out whether the cancer has spread outside of the chest and to other parts of the body.
This information will help the doctor stage the lung cancer and plan the most effective treatment.
How can lung cancer be treated?
Individual treatment plans are generated on the basis of several factors, including the type of lung cancer, stage and the overall health of the patient. Treatment strategies may be used in varying combinations to treat or palliate lung cancer. There are three main treatment modalities: surgery, chemotherapy and radiation therapy.
What steps can one take to decrease their chances of getting lung cancer?
The most common risk factors associated with lung cancer development are smoking, secondhand smoke, radon exposure and asbestos exposure. Smoking cigarettes or cigars is the most common cause, resulting in almost 90 percent of lung cancer cases. Secondhand smoke is also a risk factor and is attributed to about 3,000 lung cancer deaths annually. Thus, smoking cessation and avoidance of secondhand smoke are obvious lifestyle modifications to reduce cancer risk.
Radon is a natural radioactive gas and a known lung cancer carcinogen and cannot be seen, smelled or tasted. However, its presence in your home or workplace can pose a danger to your health. Radon has been shown to be the leading cause of lung cancer among nonsmokers, accounting for approximately 20,000 lives annually. Testing for excessive levels is encouraged.
Asbestos is a mineral fiber that was once used in building construction materials. Although its use has been banned, asbestos can be found in older homes, in pipe and furnace insulation materials, paints and other coating materials. It’s a well-known carcinogen that can cause lung cancer and mesothelioma. Avoidance or safe handling of asbestos fibers is important.
DR. JAY M. LEE is Surgical Director of the Thoracic Oncology Program at the David Geffen School of Medicine at UCLA. Reach him at JaymoonLee@mednet.ucla.edu or (310) 794-7333. For more information, visit www.lungcancer.ucla.edu.