When Hugh Harris answered his phone, a woman was furious that the siding Dixie HomeCrafters had installed nine years ago had faded from brown to pink.
The $110 million home improvement company has a 100 percent guarantee on its work, but he vividly remembered that she wanted a color they didn’t carry, so he reluctantly used a product he didn’t like to meet her wants.
But instead of an “I told you so,” he wanted to stand by the company’s promise. He tracked down the company that had acquired the faulty siding maker, and it agreed to provide new, quality product if he provided the labor. So an entire $18,000 job got replaced at no cost to the customer.
“They sent me a letter thanking me and couldn’t believe that we actually stood behind what we said we wanted to do nine years later on such a large job, but that’s what we do — we take care of our customers,” the CEO says.
Smart Business spoke with Harris about how to build customer relationships.
Stay true to your word. It’s just straight business. I’ve worked my business philosophy my whole life like this — do what you say you’re going to, do it when you say you’re going to do it, and it makes for a good situation for both parties. You don’t have to lie, cheat and make things sound better than they actually are as long as you have good stuff to begin with. Just follow through.
That’s all people want nowadays — give them a fair shake. Tell them what you’re going to do. Then you go do it. We do our business a little bit different than most contractors do. It doesn’t matter if the job is $2,000 or $50,000, we don’t take any money upfront and nobody in the middle (does either). Our customers, they pay us when they’re 100 percent satisfied with the job. It ensures good quality work from my contractor who does the job because nobody gets paid until that customer is happy. It’s just the old-fashioned way of doing business really.
Be active in customer service. No matter what your title is or how big your company is, go out and actually go on the street yourself and go to your customer’s home and look at a job that you’ve actually completed and interview the customer. Even if you don’t sell the customer something, at least do a follow-up call to see how courteous your salesperson was and make sure that they cover all the bases and try to figure out, if they didn’t sell, why, and if they did sell, why. If they did sell, let the job be completed and go out and look at it. Check what you expect.
Ask questions of customers. Just straight talk — if you treat people right and talk to them straight, they’ll tell you the truth, they’ll tell you exactly how (they) feel. People are really open to telling you about your customer service — good, bad and indifferent. You say, ‘Hey, how did my people do when they were out; did they do exactly what they said they were going to do?’ If they did, they’ll rave about you, and if they didn’t, they’ll rave about you.
Fix their problems. If it’s a job-related [problem] — something that we did or a work-related product or item — we go out to the job on the spot and fix it. No matter what. If it’s maybe just a misunderstanding about something, I’ll send people to dinner — a husband and wife if we’ve inconvenienced somebody. If we inconvenienced them, you have to take care of them because your reputation is second to nothing. Even with that, you’re not going to please everybody all the time, but we do strive to please everybody all the time.
Give them access. We have a general manager for each location, and their home number and cell number goes on the top of every contract so that they can go straight to the top. They don’t have to talk to the receptionist and they don’t have to talk to anybody else, and if the decision can’t be made on the branch level, then all my general managers have access to me 24-7, and they call me and I make the decision. I probably talk to each of my managers for something like that maybe once a week.
Get employees to buy-in. Stay in touch with them all the time. It doesn’t matter who has what title. The guy at the top has to be talking to everybody all the time. That’s pretty much a full-time job. My full-time job is calling my branches and talking to my production managers, talking to my scheduling managers, talking to my marketing managers. Talk. Communicate. Just because you’re a CEO, don’t make everybody afraid of you just because you have that title. You have to be able to roll your sleeves up and talk to people, and when they do, don’t overreact. Listen to what they have to say, keep your mouth shut and fix whatever problems they have. If you talk to someone at the branch level, sometimes they’re afraid to talk to you because they may have pressure from their boss. You have to make it always an open-door situation where nobody gets in trouble for talking to you about an issue with a customer. You’ve got to be able to talk and openly communicate.
To Daniel J. Elsener, running a large organization is like producing a play or an opera. The production involves many people who have to not only know their roles but feel inspired to perform their roles at a high level.
“There are scriptwriters, singers, actors, there is storytelling, there is a message, there is a passion, there is a stimulating of excitement,” says Elsener, president of Marian University, a Catholic and Franciscan institution that generated $40 million in 2009 revenue.
The key is to find how each performer in your organizational play best fits the overall production and then playing to their strengths. You do that by building a culture that emphasizes building employees up and encourages them to seek what truly drives them each day.
“You have to build a culture of achievement, a culture of passion, a culture of faith, a culture of commitment to the people you serve,” Elsener says.
Smart Business spoke with Elsener about how you can put the right performers in the right roles for your business.
Discover strengths. If you think about it, when you were a child growing up, along the way, someone might have taken you to a football game and something caught your imagination. There were sights and sounds, and you might even have thought about being a football player then. You certainly wanted to talk about it and be a part of it. If you go to a play, maybe you don’t end up wanting to be the actor on the stage but maybe you want to branch out and go do something that it inspires you to do. Maybe the actor on the stage inspires you to go out and do something, and the message resonates in your heart and mind, and you leave that theater and say that you have a calling, you’ve been prompted to do something.
You find what relates to you, with the talents and gifts that you have, and what you are going to do with it. Great performances inspire us in general to do other great work. That’s how you get engaged. That’s why I think of culture as this production that keeps telling a story.
As far as the leader’s role in that, the biggest thing I’ve learned over the years is that I used to think I could remake people. We don’t try to remake people anymore. God made them, and they develop their talents, desires and passions. The best way to help people find their role, take their role and live it with passion is to work out of their strengths, their desires and their gifts. When people do what they’re good at and what they love, I just stand in awe of it. When you’re forcing them and trying to remake them, when you make the accountant be a great artist or the great artist be an accountant, that’s when you can have problems.
A good friend once told me, ‘Don’t try to teach pigs to sing. It frustrates you and annoys the pig.’ So that’s why we’re always trying to find the strengths of a person and have people on teams understand each other’s strengths and manage each other’s weaknesses. Once that happens, an organization rolls.
Build strengths while neutralizing weaknesses. We do have some instruments that help you find your strengths that are well-tested, but when we have groups of people working together, we’ll put their strengths on the table, and you can kind of see where they’re coming from, how they perform a task. So you try to get a strengths quotient, not only on the individual but also the group. Then you have performance reviews when people set goals and so forth. We’ll show people their strengths and how they can use it to help us here at Marian and how we’re going to support them.
You manage weaknesses by making sure they don’t ruin your strengths. And look for technology and other team members, assigning other people to support that. At least manage the weaknesses so they don’t trip up your strengths. You can do that in a lot of various ways. First and foremost, if a person has weaknesses, don’t give a job where their weaknesses are going to be a constant burden for them. Make sure it’s manageable in a certain situation.
Set the cultural tone. You have to know people and you have to like them. If you’re going to be in a leadership position, it’s a requirement that you have to stand in awe of a person’s goodness and giftedness and what they can achieve.
Being an educator is a great training ground to be a leader. When you teach and you’re part of an organization that teaches and learns, you see how people develop, and you can do amazing things. They can grow so much if you encourage and affirm and get to know them, spend time with them and listen to them. You can do it informally, by getting to know people, spend time with people and listening to people. But you get much better at this when you put it into your philosophy on personnel management and hiring. If you put it front and center in the beginning, talk about it in seminars, develop your capacity to understand strength management in the organization, it becomes a way of life.
It’s also quite interesting that as you work to make it systematically part of your operation, people are less likely to just get angry with someone because they don’t do something. They’re less likely to become frustrated with their bosses. Most performance reviews spend about 90 percent of the time talking about what you’re not good at. But you’re much better off working from someone’s strengths and building them up, and manage those things where they’re not naturally inclined. So you really have to make it a part of your approach to personnel management and selection.
How to reach: Marian University, (317) 955-6000 or www.marian.edu
Burt Kunik wants a culture of employees who think freely and view themselves as entrepreneurs. Kunik, founder, chairman and CEO, of Sharps Compliance Corp., which posted $20 million in fiscal 2009 revenue, has to spread that message throughout the medical waste company.
“The leadership of a company needs to speak at all times relative to the culture that you believe it is that creates a success that you want in your company,” he says.
Along with an individual message, your company needs to know the mission and vision of the organization. The more employees feel a part of setting and reaching organizational goals, the more successful you will be.
“Everybody needs to feel a part of where you’re going and to be a part of your vision,” he says. “When we have a staff meeting, people all show up and they are very excited to talk about where we are, what we’re doing and the role they can play in it.”
Smart Business spoke with Kunik about how to create an entrepreneurial culture.
Be inviting. You have to invite an openness amongst your employees to make them feel comfortable, always. The big word in the culture that I’ve created is creative entrepreneurship. I think that everybody in the company needs to feel they are part of a creative entrepreneurship. In that regard, I invite people to come in, (and I say), ‘What are your new ideas?’ It just can’t be wrong. The only thing that is wrong is not having ideas and not being able to discuss how we can be a better company. That to me is a big part.
You see that in a lot of companies that are getting started because large corporations have created a lot of people working in silos that aren’t really a part of a creative entrepreneurship. When you are in a company that is a smaller size, you make people feel a part of what you are doing. It’s pretty easy. You just have to want to do that every day.
Be consistent. If you want your people to feel like they are a part of your vision, you have to work on that every day. It’s in contrast to showing up at a meeting, making a statement and then going to do something else. That has to be part of your every day [from] when you walk into the office to the time that you walk out of the office that you stand for what you believe in, (which) is the culture of the company.
You have to visit with your staff members. You have to discuss issues with them, you have to make them feel important and part of your creative entrepreneurship there. You have to have frequent meetings where you can have discussions and sharing.
Use ideas. I always take (an idea) in, and I try to incorporate it the best that I can, even though I don’t think it’s a good idea, and try to figure out how I can make it a part of what we are doing some way. So, I can respect and care about the fact that they brought me something new. You have to respect the person for the fact that they really thought it was important to bring you something.
People care that you care, and once you show them that you care, they feel proud of the fact that they did care enough to bring a new idea to the company. Then, you can even mention it along the way at the staff meeting that, ‘Carol brought in an idea today, and we are trying to work with it.’ Just try to respect the person for the fact that they brought something to you.
Don’t handle managers’ issues. If your senior managers are good people, then that should rarely happen. It’s when people come to me to discuss that, I try to listen to what they are saying and then I say, ‘This is something really you need to talk (about) with your direct report.’ So, I probably will follow up to talk with the direct report to relay the conversation and just make sure that gets managed by whomever they directly report to.
Very good senior managers understand the value the employee brings to the table. If that employee really brings everything to the table, I think they will understand that they just missed it and should accept it in the right vein and move on.
Wait for employees to adjust. If somebody is dishonest, I like them to leave right away. If somebody is trying to find their way into the culture, I think you need to work with them, give them time and give them an opportunity to become a part of it because a lot of people have not come from a creative entrepreneurship background, and coming in is a new experience. Sometimes they have tremendous talent that’s just never been shown before, and you give them the opportunity and, all of a sudden, you have a wonderful employee there who is part of your culture.
It’s the leader that has to speak to it at all times because otherwise the managers don’t feel reinforced to begin with because everyone has their fires to put out every day. So, I reinforce that with managers, and then I reinforce it with staff meetings at least once a month.
Check your ego. For me, as a leader, I have always said, ‘Don’t ever look to respect me because of my title or the fact that I have anything to do with your paycheck. Respect me because of what I bring to the table.’ Our future is based on our creativity and it’s all up to us. We have what it takes. We don’t have any debt, we’ve got plenty of cash, and we have a great future in our company. What our success will depend upon is our ability to be creative and execute.
How to reach: Sharps Compliance Corp., (713) 432-0300 or www.sharpsinc.com
Customer service is the business of every employee now, that’s not just a phrase Dave Wangler throws around at TMW Systems Inc., it’s the attitude he wants his nearly 400 employees to embody.
“Everybody realizes they’re here because of the customer and only because of the customer,” says Wangler, president and CEO of TMW, a solutions provider for the transportation sector. “Our employees recognize that TMW might be the name on their paycheck, but they actually work for our customers, and our customers get to vote in the marketplace on whether we’re doing a good job or not.”
In order to build strong customer relationships, two sets of expectations have to be addressed what you expect from your employees in terms of customer service and what your customers should expect from you. It’s those interlocking thoughts that have allowed TMW to meet its 1,800 customers’ needs.
Smart Business spoke with Wangler about how to set customer expectations.
Build customer relationships. What it comes down to is establishing very clear expectations and delivering upon those. Say what you’re going to do and do what you said you were going to do.
We deliver fairly complex software solutions that companies rely upon to run every aspect of their business.
Having expectations, for example, of what an implementation of our software might look like, what benefits they can expect to see, what challenges they’re likely to encounter as we implement and as they go forward using our solutions.
Establishing clear expectations in the sales process and in the delivery process and delivering against those really drives successful customer relationships.
If you get off on a good footing as you begin the relationship, you establish a reputation with that customer, or an expectation of if they’ve got a problem, what is your response going to be.
You set those expectations. ‘If you have a problem, you call us. Here’s what’s going to happen.’ And you follow up on those, and you deliver against those. I don’t think it’s any more complicated than that.
Be open. If you can’t (meet their expectations), then you have to explain to them why.
Notice I started with establish clear expectations. In other words, if we go in and our expectations are mismatched about what a product or service is going to do or what it’s going to cost, we have a problem.
I need to establish clear expectation on the front end and agree to what those are. If I fail to meet expectations that I’ve set, I think one has to be pretty frank with customers and sit down and explain to them why. Either one or two things is possible, A, they’re reasonable, but you’re failing to meet them, so you need to come up with a plan as to how you can. Or they’re unreasonable; maybe things have changed.
You’ve got to be clear about re-establishing, resetting expectations so that you’ve got the right yardstick that the customer can measure the company by.
Communicate service as a culture. I have 1,800 customers and 400 employees. Is it sitting down with certain customers? Sure. But it’s got to be more than me saying it. It’s got to be a culture.
You’ve got to have a consistent repeatable process, whether you’re delivering a new implementation to a customer, whether you’re building some special capability for them, whether you’re solving day-in- and day-out problems. You’ve got to have this culture of establishing those expectations and delivering upon them.
It isn’t just something I do; it’s got to be a culture of our business.
You also need to have a culture of being invested in your customer’s success and a willingness in leading from the front, a willingness to, when there’s a problem, drop everything and take care of it.
I think culture gets established over time. If the culture isn’t something you can grow upon and, as the CEO, you enter a situation and you need to instill that or change the culture as we’ve sort of done with some of our acquisitions, at that point, it’s about lead from the front.
There are probably two schools of thoughts (on communicating that culture). There is the personal leadership that flows down through the organization. If you can get your C-team and your executive management team to live that, as well, that moves down to the vice president and that moves down to the directors and that moves out into the field.
That’s the organizational behavior side of this.
There are lots of things that you can do and that we do to communicate that. You have to measure everything you do.
You can have this lead by example, this sense of urgency, but I think you have to measure and incentivize.
Let me give you an example. We have call centers for customer support. We measure the performance of those call centers not by how many calls they close or how many calls are open; we measure performance based on customer surveys.
We survey every customer twice a year with the same questions. How are we doing? Are you happy with the level of service, the knowledge of the person helping you, the responsiveness? There’s a 12-question survey that goes out.
We incent the support group in each one of our businesses based upon the results of that survey, so there’s a monetary incentive.
If that survey is greater than a certain threshold, then there’s a bonus payout. If it’s not by a hundredth of a point, then there isn’t.
You measure and incent people based upon the results of those objective measures.
That alone I don’t think will do it, but it is a way to really enforce that culture and put the focus where it is.
You build the culture, you lead by example, you propagate that through, you measure and incent.
How to reach: TMW Systems Inc., (216) 831-6606 or www.tmwsystems.com
When your kids bring home papers from school, you proudly display them on the fridge. That’s the idea at Hobsons EMT, where Managing Director Sasha Peterson sends letters to high-achieving employees.
As the company grows, he keeps it personal with his 180 employees.
“The key is trying to have as close a pulse as you can, which I’ll readily admit will become harder and harder as we get bigger,” Peterson says. “That’s not easy, but it’s possible to make sure you talk to everybody during the course of the year.”
In 2007, Peterson took over the Enrollment Management Technology division, which accounts for about $45 million of Hobsons’ revenue by providing customized database management packages to help universities manage retention. He’s already had to adapt to the growth.
“If people believe in what you’re trying to do more broadly, then hopefully — as long as they know why you’re making those decisions along the way — change shouldn’t be a scary thing,” he says.
Smart Business spoke to Peterson about staying in touch with your employees.
Communicate goals. The critical job of any leader is to convey broad directionality and make sure that the themes that you’re trying to focus on are understood very thoroughly and deeply by everybody that’s working for you. It’s a constant refinement. It’s trying to distill a very broad vision into a couple of immediately actionable goals.
As far as how I distill that, the biggest challenge I’ve given myself is to be as transparent as possible. On a weekly basis, whatever office I’m in, I have a small lunch with people. I open up with just five minutes of stuff that I’m thinking about and working on and then the rest of it is pretty open. Sometimes it’s work-related; sometimes it’s very personal — but either way it’s a win. If it’s work related, it’s a lot easier to ask questions in a small group. And if it’s personal, it just helps build that rapport where people will feel more comfortable to come ask you questions along the way.
On a monthly basis, I do a companywide lunch meeting we’ve creatively named Snacking with Sasha because on the West Coast it’s breakfast. Continue to have that rolling dialogue with people, you know, ‘Here’s what we’re hoping to do next month,’ and then, ‘Here’s how we did on that.’ Continually keep people updated and continually trickle down that information.
Then on a semiannual basis I have a companywide in-person meeting with everybody that outlines the broader objectives. So the monthly ones are pretty operational; the semiannual ones are a little bit more aspirational. Tons of communication and as much transparency as possible are the key drivers of making sure that people are aligned to the same goals.
Plan meetings. I started doing an annual calendar that maps out where I need to be for meetings or conferences or important client visits and then where I want to be, which is a reasonably equal distribution across the offices. Just getting that on paper and seeing it in front of me makes me accountable to myself to say, ‘I really don’t feel like going to California next week, but I said that I would and so I’m going to go.’
The other thing is making vocal commitments about things I’m going to do. We do these semiannual meetings, and announcing at the beginning of the year when they’re going to happen, makes them happen. So I self-create some pressure to make sure that things will happen.
Make yourself accessible. It’s just being up and available. I spend most of my day just walking around, talking to people, trying to understand what they’re working on and making sure that if they know that I know what they’re working on, that it’s important. Make a very conscious effort to spend time physically in each office — and not just with the managers.
I’m very conscious about who is there, who I’ve talked to. Most of it I can remember, but I do make little notes from time to time about significant events in their lives — if they’re getting married, if they’ve got children.
As soon as somebody thinks of you as president of the division, then suddenly there’s this organizational chart that makes it really difficult for them to feel like they can come talk to you. When they know that I’m Sasha and I’ve got two daughters and I’ve got the same challenges they do in their life, that makes them a lot more likely to do it. I’ve tried to make sure that people know me not just as their boss but as a person, and that is enough to make them come talk to me.
Listen to responses. If an employee believes that they matter to the organization and that the organization is sincerely focused on empowering them with tools that they need to do their job more efficiently, that’s a pretty big driver and motivator, as well. But that also translates back into the communication, because if it’s just me talking my head off, then what good is that? It’s got to be a feedback loop so that they can feel like they can come and talk to me or their manager about ideas that they’ve got.
If you can create environments in which people can sincerely give you ideas and they see those ideas implemented within a month, that’s pretty powerful stuff.
One of the ideas that I’m introducing this year is asking people to have a hassle log. What’s making your life harder? What could I do to make it easier for you to do your job better? I said I want a quarterly list from people beginning in December. I told them to call me personally, e-mail me personally — it’s not firstname.lastname@example.org. They know I’m going to get them.
One of them was, ‘I don’t know everybody anymore. We have new people starting all the time. How about name plates to put on our desks?’ That’s a really good idea. We’ll have that in a couple of weeks.
If we can say, ‘Hey, Brian had this idea; it’s done,’ that’s a really quick and easy win. When people see those quick wins happening, then they’re going to say, ‘Well, this isn’t just lip service.’
How to reach: Hobsons EMT, (800) 927-8439 or www.hobsons.com
Meeting with customers is frankly a higher priority than anything waiting for Tony DiBenedetto at the office.
“If I can focus on the customer,” DiBenedetto says, “not only have I done a good job listening and bringing that information back to our team and setting the strategy, but I also set an example for everybody else that we should be focused on the customer.”
Understanding customers’ needs is the priority that has helped Tribridge grow, reaching $65 million in revenue in 2009.
Really, the key comes down to thinking like your customer, says DiBenedetto, chairman and CEO of the IT services firm. But it’s not as simple as asking questions once.
To stay engaged with customers Tribridge uses multiple techniques, including training employees to ask effective questions and using a customer council to get a cross section of clients talking about their needs. DiBenedetto spends months on the road meeting clients. And the company uses surveys, which indicate Tribridge has a 98 percent client-retention rate.
Smart Business spoke with DiBenedetto about how to understand your customers.
Try on your customers’ shoes. The key, frankly, is to put yourself in your customers’ shoes. When I think about what a customer is going through, I think about what I would be going through in their shoes.
In other words, I run a company, and we have IT needs, and we have business process needs, and we have strategy needs, so anytime I’m talking to a customer, I put myself in their shoes like I run their business.
When I do that, it makes me just listen differently, ask questions differently. It becomes a ‘we’ thing versus a ‘them’ thing. I really try to put myself in their shoes and ask the questions like, ‘Hey, how are we going to fix that issue?’ or, ‘How are we going to fix that problem?’
When you start getting customers to talk, then you’re really learning because they ultimately have been spending all of their time trying to figure out solutions to problems and your job is to help them solve that problem.
So, if you can listen really well and kind of separate the noise of the problem from the real root cause, and then really figure out what the business benefits would be to solving those problems, then you’re in the head of the customer.
The cornerstone is the listening and the attitude that you’re in their shoes, whether you’re an owner or an executive in their company.
Ask questions that engage customers. When we’re in the beginning of an engagement with a customer or a client, we’re making sure that we have a full understanding of the business strategy, the business model, what the problem is.
The most effective questions are open-ended, as you might expect, and they’re questions that allow a customer to talk about their business.
We have structured questions [that] we have for our discovery, so it’s by industry. We make sure we’re asking questions that are relevant to a particular industry. Then, we ask those questions in a way that allows the executive to open up a dialogue with us that is less structured and closed off.
Open structure is key. Pointed to the fact that they’re related to the industry that they’re in is a second key. Third, being able to ask the question in different ways multiple ways gives you that ability to get different dimensions to the answer. Sometimes the answer to the question is answered, but you don’t really get the full 3-D view of it, so we tend to ask questions with multiple view points.
Then, we also ask multiple levels within a company. We wind up talking to different levels within a company to get different perspectives.
At a high, very high, level we’re asking questions like, ‘Tell us a little bit about your business strategy.’ Then, ‘Give me the plan for the next three years.’ Then, we might drill down and say, ‘What are some of the obstacles in the way of you achieving those objectives for that strategy?’ It’s that obstacles question that tends to illuminate the problems that they’re having.
‘Tell me the top five things that are keeping you stressed at night or are getting in the way of you being able to accomplish the vision that you’ve laid out.’ Questions like that tend to get people talking.
To the extent that they share those with you, you might go into a whole line of questioning around, ‘Tell me some of the things you’ve tried before to fix that problem.’ That may sound like an odd question. But, inevitably, they’ll tell you. They’ll start talking about it, and they’ll realize the problem was bigger than they said, or there’s another dimension to it because they tell you about solving a problem that is somewhat related but not exactly.
Get out and meet your customers. Without question, one of the keys of growing a business is to focus on the customer. My job in the company is to truly understand the needs of the marketplace. The marketplace is defined by the customers.
I go on the road every year for a couple of months and have very direct one-on-one conversations with customers and ask them very direct questions about our business, about competitors’ businesses. You just learn a tremendous amount about what resonates trust with a customer.
My advice to any CEO, I don’t care what the business is, is to become intimate with the customers. Don’t fool yourself or filter yourself based on surveys or anything else, it has to be direct contact. I don’t know how else you could make solid decisions or be right about anything.
I fancy myself as a good listener and being able to provide a good business that provides products and services, I don’t profess to tell a customer what their needs are. A CEO that’s not spending time with a customer, in essence, is telling a customer that he knows better what their needs are.
The only way you’ll know better is if you are actually talking to the customer themselves.
How to reach: Tribridge, (877) 744-1360 or www.tribridge.com
James Luck is an inclusive leader. As the president and CEO of the 250-employee Orthopaedic Hospital, there is more to that statement than meets the eye.
In his position, Luck has to bring together employees from a wide range of disciplines doctors, nurses, administrators, office and support staff, among others.
To make it all happen at the hospital, which generated $34 million in 2008 revenue, Luck has to focus on communicating clearly and frequently and identifying others who can help further his communication strategy. It’s a team-focused approach that has worked for Luck throughout his career.
“I really like to have everyone feel that they’re having an active role in decision-making for the organization,” Luck says. “It’s my personal psychology. My whole life, I have very much enjoyed team efforts as opposed to individual efforts. I relish the idea of working with a team on a challenging, complex problem and coming up with a solution.”
Smart Business spoke with Luck about how you can build great communication throughout your organization.
Take an interest. Styles of communication are highly variable. People can be great communicators and do it in a variety of ways. But one of the most essential components is that the leader has a strong personal desire to communicate, that the leader cares about communication and cares about the people of the organization and cares about how they relate to the mission. That personal interest level is critical, and there is no substitute for it. You can’t fake that.
Great communicators are focused on people, a ‘people person,’ but they vary in terms of how extroverted they are. But they genuinely care about the communication, care about the people they are talking to and care [about] being able to engage people in the discussion. That is pretty obvious when you listen to these people speak. You do get engaged because they have established a connection with you. That is the most essential element of a good communicator.
What form the communication takes, writing or verbal, that is not so critical, but it is critical that they have that strong personal interest in communicating.
I am very much a walk-the-halls kind of leader. I’m personally involved in the health care delivery I see and take care of patients in addition to my administrative responsibility. I walk the halls and understand the challenges that exist in the various departments. I’ve been around here long enough that people know me well, and they’re not hesitant to come up and talk to me if they have some ideas or concerns.
Doing the things I do, especially the patient care activities and the residency program, really gets me out with people. ... We also have managers that do a great job with their own particular departments. For example, if I were not a physician, if I were just an administrator working in my office, there would be a whole different level of communication and awareness about what is happening.
Identify and develop communicators. You do have to try to identify people who have the potential to be good communicators, even if it is not well-developed potential initially. But we do recruit and recently did recruit the head of our children’s program. One of the key things we were looking for was vision and communication skills. That can be enhanced and fostered in someone in a variety of ways. You can send someone off to courses and stuff like that, and that is of some value. But I think setting an example and establishing communication as an important accomplishment, then monitoring their progress, that is what you need to do. Someone coming into this organization should see that there is a high level of communication and be a part of that, then gradually assume more and more of that responsibility.
When it comes to finding people with communication potential, there are two factors at work. First, it is what they have accomplished thus far and what you can glean from letters of recommendation. If you look at someone and you see that they have moved up the leadership ladder, that they have been asked to assume leadership roles and responsibilities, that generally would indicate that they have pretty good communication skills. You don’t get there without good communication skills.
Second, it’s the interview process itself. We ask our applicants to give presentations, to study our organization and give a fairly lengthy presentation on what they see for the future, what they would establish as priorities and goals and where they would take the organization. That is then open for discussion afterward. It is an elaborate process to determine if that individual really has that communication ability.
Bring people together. Direct communication is what I’ve found to be the most effective. Newsletters are great, people look at them, but they may or may not take the time to read or think about it. Getting a group together and giving them an update on what is happening in an institution, but even more important than that, getting them to ask questions and get engaged in the discussion, that is the best method.
We have team meetings on a regular basis. We have senior team meetings twice a month, and we have employee forums quarterly. We have an internal journal newsletter we send around on a quarterly basis. We have a lot of functioning groups that meet as often as necessary in every department. For the physicians who work here and senior staff, we have lunch together every day. That is extremely valuable, a lot of important communication occurs there.
We place an emphasis on team building. As an example, I am part of a team that takes care of patients with bleeding disorders. The reason they have orthopedic problems is they bleed into their joints and have terrible arthritis starting in childhood. The only way people can make progress in a disease of that magnitude is with a team, and that team has to be a very broad team of hematologists, orthopedic surgeons, nurses, physical therapists, social workers, clerical staff and so forth.
How to reach: Orthopaedic Hospital, (213) 742-1000 or www.orthohospital.org
When Clark-Reliance Corp. launched efforts to reach double-digit revenue growth year after year, Rick Solon knew it wouldn’t be all organic.
So the president and CEO of the manufacturing company created a process for acquisitions that starts before the first phone call.
You must understand your core competencies and processes and procedures in order to find the best strategic fit, Solon says.
Second, you can’t leave employees in the dark. Not only will the communication make the transition easier when it’s time, but employees can play an integral role in your acquisition search.
Clark-Reliance, which had 2008 revenue between $60 million and $70 million, formed a list of 900 potential acquisitions based on employee feedback.
“Talk to your sales and marketing folks, all of your employees, about what they think or what they hear,” Solon says. “What companies they come across that they think would be a good fit based on their knowledge and experience both working with us and perhaps working outside the company.”
Smart Business spoke with Solon about how to prepare for acquisitions.
Understand your company. The most significant issue for every company is if you’re looking just at your internal products and processes, you’ve developed some understanding of what you believe your core competencies to be. Whether those competencies are in fabrication and welding, whether they’re in human resources, how do you hire people, you’ve understood and developed a sense of what those core competencies are.
Then, typically you want to go out and find someone or some other company that will actually be a very good strategic fit with those products, processes and ... how does this complement or augment your core competencies?
You have to be honest with yourself that you have a very strong foundation from which to work. By that specifically I mean, if you are a typical manufacturing company that has some combination of fabricating, welding, machining, light assembling, in those particular regards … in order to establish that base you have to be able to say to yourself, ‘These are things that we believe we do well.’
For very small companies, it’s hard. You read all this stuff from Harvard Business School and the rest about well how do you build a core competency that maintains a sustainable competitive advantage. That’s a great statement for a small company, but most likely for very small companies $10 million, $1 million you’re not going to achieve that.
But what I would tend to counsel anybody else on is make sure that you’re comfortable with the processes you have in place internally, whether it’s quality systems, manufacturing processes, internal ordering process.
The process and procedure, the process by which you get the work done, is incredibly important. If you have robust processes, then generally those processes will allow you to understand just how quickly you can bolt down an acquisition or you can grow based on your knowledge on what it’s taken to get your resources trained and educated and in the right place to be able to go after acquisitions and internal growth for that matter.
Update employees. It’s critically important that (employees) understand the big-picture strategy, the individual details, (the) specifics of every strategic vision people have to carry out. The more they understand from the big picture down to the specifics, the more they understand what that is, the better they are able to go about executing that vision and helping you understand where you may have to change it, tweak it, adjust it.
The founding family that owns the company is very, very intent on making sure that not only from the acquisition perspective but also the whole employee culture we have developed, which gets driven from them at the top, is one of as much transparency, open, honest about what our big-picture direction is as we can possibly make it.
(Clark-Reliance Chairman) Matthew Figgie, when he was still in the vice chairman role, started talking to all of our employees at our quarterly meetings about the acquisition process three years ago. At that point, we weren’t really completely as active as we are now.
We try and make sure that whether or not that employee is going to be involved in that acquisition discussion from day one or not, we want them to start hearing about it from day one.
Form a list. Typically what we’ve done in the past and what we’ll continue to do, we try to first generate, what I’ll call, a wish list or target acquisition list of what we’ll classify as the top 100 or so companies that really make sense to us.
We used both internal resources and, to some degree, some external resources.
To be honest, what we find is the best thing to do is get all of your employees when I say all, the majority that are in product management and sales and have them do as much informal information gathering as they possibly can. Like, ‘Hey, you’ve been at a competitor’s plant,’ or, ‘You’ve been at this person’s plant. About how many people do they have? Who is their president? Who is their vice president of sales? About how big is their plant?’
We’ve had more luck, quite frankly, with the more informal information-gathering process than anything else, where it’s word-of-mouth. It’s getting all of your people energized to understand you’re on an acquisition program, that acquisitions are just as important as your organic or internal growth, and that you, as an employee, play a significant part in giving us ideas, bits of information.
Generally what they’re going to come back with, at least first off, is a list of your competitors, which makes sense.
No matter how big or how small your competitors are, it never fails there are sometimes billion-dollar companies that have very small divisions that may be interested in selling a piece of them off. No matter how big the company is, never discount making that phone call.
How to reach: Clark-Reliance Corp., (440) 572-1500 or www.clarkreliance.com
Thomas Cassady’s salesmen don’t need to be loved. They just want some respect.
“The old stereotype of an insurance salesman (that he is) a pat-on-your-back buddy is an anachronism,” says the president and CEO of USI Midwest Cincinnati. “They look for your respect, and they don’t need to be your buddy.”
But in order for any of Cassady’s 105 employees to earn his respect, they have to build up some trust. That requires a constant flow of feedback that goes both ways: top-down as well as bottom-up.
“This is an industry built on trust,” Cassady says. “Are they going to fool us? Shame on us if they do.”
With that sense of accountability, Cassady has spurred revenue from $7 million in 1999 — when the company was created through the merger of his agency with another — to $24.5 million in 2008.
Smart Business spoke with Cassady about building trust and accountability with your employees by offering and receiving feedback.
Offer feedback. The most important thing a leader can do is have the trust of the people who are following. It is sort of like Stephen Covey says: You have to make deposits in the credibility accounts of the people that you rely on. You make those deposits by giving them … honest feedback, whether or not it’s all positive. Good employees want fair, candid feedback. Every employee is looking for specific ways on how they can improve, especially if you can give it to them in a timely fashion — not at the end-of-the-year performance review, even though those are important. A leader that provides instant feedback is much more credible.
We provide a traditional performance review where the supervisor provides written feedback to the employee. In that, we have a forced calibration, which is based on not only what the employee did but how the employee did it and the relative contribution of that job to the overall success of the company.
We have five categories — far surpassed, surpassed, fully achieved, partially achieved and achieved far less. We rank what was achieved as well as how they did it. We don’t want to put somebody in the very top ranking that achieved great things but was a terrorist doing it, so they have to play well in the sandbox as well as achieve superior results.
It’s really whether or not they’re consistent with our company philosophy of how we want people to represent our brand, how they work not just internally but with our carriers and our customers. That would be judged with things like: Do they tell the truth, are they disciplined, do they help others, are they a good inventor, [and] are they a good model for others to follow? They are subjective, and the supervisor probably has the best and the most credibility in those discussions. It’s not what (you are) going to do; it’s what you actually do. It’s just by observing their actions that we are able to do that.
The third — and this is sometimes the most controversial area — is their relative contribution to the overall success of the company. The best way that we have found to try to define relative contribution is how difficult is it for us to go out and replace that person? If it’s relatively easy, then the relative contribution is weaker. If it’s fairly unique and we don’t believe that the person’s skills can be found in the marketplace very well, if at all, then the relative contribution increases dramatically.
The management team and the supervisors get together in a room and talk about everyone and have that open debate on how to rank people.
Don’t evaluate alone. The second part is the internal customer survey in which direct reports provide feedback to a supervisor. Even if you don’t have any direct reports, you do have internal customers. A receptionist, for example, has no direct reports but everybody is her internal customer.
My direct reports give me feedback on my skills, habits, knowledge, but most importantly, attitude. So it’s a bottom-up kind of performance survey.
We use a software program so people are really doing it anonymously. Some people sign their names to them, but it’s really a way in which they can say whatever they want. They grade the customer on a scale of 1 to 10. If you’re going to grade them below a 6, you have to make a comment, a suggestion for improvement. Then that report becomes aggregated and then goes to the supervisor and the supervisor shares that with the employee.
Start with the right slate. We look for people who represent the same kind of values that the company has, and the two most important values the company has are integrity and our sense of accountability. In our business, we sell a bunch of promises on a piece of paper, so people need to have absolute trust that what you say is true.
When we recruit, we are looking for people who want to be held accountable, that it’s OK to take feedback. If a salesman comes into our office and says, ‘You don’t have to worry about me. I’ll just do my own thing, and I’ll give you the results at the end of the year,’ that doesn’t work for us.
If you tell them about it upfront and people say, ‘Well, no, I’m superstitious. I don’t like to talk about an account that I’m working on,’ that just doesn’t work for us.
You really get paid for doing the right things when no one’s watching. So I really have no idea what our salesmen are doing 95 percent of the time because they’re out doing their thing.
We want to know what they’re doing — particularly in sales, the front line out with the customers, which is very important in how we promote and protect our brand. Every appointment is documented and discussed at a Monday morning sales meeting, and we do track results. We know who they’re meeting with.
Nothing happens unless there’s some activity. And if we see people with lots of activity but very poor results, then we know that there’s a problem with either skills or knowledge.
How to reach: USI Midwest Cincinnati, (513) 852-6300 or cincinnati.usi.biz
Shan Padda needs employees to buck the status quo.
“Part of the challenge of being a CEO of, hopefully, a fast-growing company, is how do you create a culture and employees that are comfortable with constant evolution and constant change?” Padda says. “Embrace it as opposed to being something that they’re afraid of.”
To set a culture that supports rapid growth, you need employees to see change as a positive and you need them to take everything in stride, even setbacks. The ability to do so comes down to how you communicate and what you communicate.
“It’s very important to be honest and not be misleading,” says Padda, chairman and CEO of Health Integrated Inc. “When things are going well, share that, and when things are not going well, also share that, but also explain why and what can be done about it so that people get energized.”
That philosophy has helped the innovative health plans partner grow to 220 employees.
Smart Business spoke with Padda about how to form a culture around growth.
Create a culture around communicating change. In order to create that kind of a culture, it’s really important to communicate, and from the very beginning, be very transparent and vocal about the fact that change is a natural part of the landscape. The ability to change is one of the advantages that a smaller company has, i.e., it’s nimbleness in meeting customers’ needs. Help people understand or frame the thought process around the ability to evolve and change as a positive trait versus something that they’re afraid of.
In order to do that, you certainly have a lot of different mechanisms for communicating with employees, but what I’ve found is most effective is you have to get in front of people and communicate with them.
We try to accomplish that through something called all-staffs, where we’ll get up or I’ll get up with other members of the senior management team. We probably do this once every six weeks to communicate with everyone on both what’s gone well, what hasn’t gone well, and then also to share with them what’s changing, what’s different, and why that’s good and why that’s a part of the process.
I think what’s important is you need to help people get a context of why it’s important to be able to change. The bigger message you have to communicate is that every company that is successful is successful because it’s providing value to its customers. In terms of being able to provide value to your customers, inheritably in that process is the ability to shift products and functions so you continue to be relevant to your customer base.
Also as a corollary to that, as I was mentioning earlier, the fact that one of the advantages of a smaller company is just the ability to move very quickly to innovate. It’s important for employees to recognize that, and that applies with the proper context of why it’s a positive not a negative.
Maintain a sense of optimism during setbacks. For a leader in an entrepreneurial environment, there’s always going to be setbacks, there’s always going to be so many challenges to overcome, and if you’re not optimistic, if you don’t think the glass is half full, you’ll never be able to be, first of all, yourself successful in overcoming this obstacle, even more importantly, you’re not going be able to convey that conviction to those who work for you.
People generally know when there’s a setback, so the first step is [to] acknowledge what happened. People will be more open-minded if they feel you’re being truthful to them. But then the key is to help them provide the context, help them understand that all companies and all people have setbacks from time to time. Anyone who says that they don’t is not being truthful. Make them get comfortable with that it’s just a part of the process of building a company, part of the process of running a company.
The next step then is to frame out with their input in terms of what happened why did the setback occur? Lastly, help lay out a plan in terms of how you can fix it and how you can overcome it.
Show employees there is meaning in their work. I think that another really important thing, in terms of from a culture perspective how you build a culture of a company is to help communicate why what you do as a company matters, that gives meaning to work and everything else.
People want to believe that what they’re doing at work, which is a significant part of their life, means something. In our case, it’s actually easy because what we do is we help people who are ill with chronic health care conditions stabilize, and that keeps them out of the emergency room and keeps them out of the hospital, so in one sense, that’s easy for us because we’re having a meaningful impact on people’s lives on something that is very important to them, health care. But my point is that every company needs to come up with a way of framing how what they do matters.
Create an environment of inclusion. (The culture is) not going to work if you have a very rigid, hierarchical environment where, for example, management lives in an ivory tower. The core essence of having people be comfortable with that is to create an environment where people feel included, and that goes to everything from titles and approachability of supervisors, the approachability of management. It’s a combination of a lot of different things.
As a small example, we’re a clinical company. Most of our employees are clinicians or perform clinical functions. My office is right off of our main work floor, so when I’m coming or going, I’m walking right through the middle of where most of our people in our facility in Tampa are working.
How to reach: Health Integrated Inc., (813) 388-4000 or www.healthintegrated.com