When Eric Thomas gets up in the morning, he’s not listening to the radio or watching the news. Instead, he’s listening to “Good to Great” and other business books on CD.
It’s not something that he’s always done, but after hearing a speaker talk about the benefit, he thought it would help him in leading his 46 employees as CEO of FreedomVoice, a provider of toll-free number service solutions.
“He was talking about this idea that you listen to music, and how many words for songs do you know, and the reason you know them is because when you’re in downtime mode, when you’re getting ready in the morning or whenever, you’re listening to that,” Thomas says. “What if you took that time that ingrains and puts all this information in your head and used it to put information in your head that would help you or your company?”
Smart Business spoke with Thomas about the things he does to be a more effective leader.
Look for opportunities. Looking for opportunities is a lot of common sense it’s understanding the industry, understanding what things are needed, what pains exist for the customers, what problems need to be solved. Then look at those to see if there’s some sort of way to make a business opportunity out of it.
It really just has to do with putting yourself in the position of a customer in whatever particular marketplace and/or product idea that you’ve got. Think of it from the customer’s perspective and try to understand what would make a difference, what would they get emotional about, those sorts of things.
Ask good questions when hiring. You’re looking for people who are the 20 percenters the 20 percent of the people that do 80 percent of the work, that are creative, driven, self-started. Ask all the questions that might find you those people.
Things that I ask are, ‘What do you do when you’re not at work?’ If you’re hiring a programmer and they say, ‘Well, I play video games.’ That would be less compelling than somebody who says, ‘Well, I like to do research on new programming languages, and I like to read trade journals,’ things that tell me that they’re passionate about their particular talents and how they’re going to contribute to the company.
‘What are you reading?’ That’s usually an indicator. I like people who read and are trying to always develop themselves.
Give them examples of situations, and try to do it in an open-ended way … to see if they answer on the way of doing the right thing as opposed to what most people think an employer wants to hear. Sometimes people will answer in a way that’s like, ‘Wow, I wouldn’t give them the refund because the company should keep the money,’ versus, ‘Well, the right thing to do is to give them the refund, so I would give them the refund.’ I’m looking for the guy who’s going to look after the customer and do the right thing. A lot of times people think the company is always about the money. Money is on the list, but it’s pretty far down.
Reinforce your values. Talk about the core values of the company. One of our core values is to contribute to the success of our customers through technology and service. Maybe I’m talking to somebody in client services about something that happened and it didn’t go the way I felt it should go. I would bring up the core value as the way to evaluate what the right behavior should be, so that they would automatically learn, ‘OK, to know what the right decision is, start thinking about core values and then weigh it against that. OK, that makes it easy. I don’t have to know the rule that in this situation, do this I just have to know that I’m trying to help this customer through service; therefore, that feels like the right thing to do, so I’ll do that.’ It’s talking about it, reinforcing it, keeping it top of mind for people.
Have a plan. Each year, we do a road map of what we’re going to do in R&D, in sales, in marketing, in client services, etc., and have an overall road map in the company. That helps because it’s not about activity it’s about productivity. It’s easy for people to get off on tangents that are interesting but not necessarily on the critical path.
It deals with an honest assessment. You have to understand where you are now, what you might be able to accomplish, and then you start prioritizing and organizing in terms of what things are dependencies sometimes you need to get this done to be able to do that. It involves meeting and talking about it ‘No, I don’t think we can do that because this will take us off of that,’ or, ‘That’s more important because it will help our customers this way.’ Meet between the different departments because something that happens for R&D will affect what’s on the road map for marketing. … All of these things have to line up.
Be honest. Doing well has to deal with telling the truth, and this seems like a Sunday school thing, but it’s really critical. … If you are truthful with yourself, you can properly evaluate where you are and make changes. If you lie to yourself about ‘I’m this,’ or ‘I’m that’ and you’re not, you’re going to run into roadblocks. You’re depending on your abilities that aren’t there.
You have to have honest self-evaluation as a company, and you have to promote, ‘I don’t want you to fluff this. I want you to just tell me what you think. I don’t care if you use any flowers around the words. I just want you to say what it is, and then we’ll deal with it.’
If you don’t do that, then things that are wrong build because they never get taken care of. If you are building a culture of telling and facing the truth, then you find the errors. Maybe it hurts you to know that they’re there, but at the end of the day, you actually deal with it, you fix it and you move on.
How to reach: FreedomVoice, (800) 477-1477 or www.freedomvoice.com
Nearly two out of every three companies launched today are being founded by women. Over the past few years, women have held the top spot at companies such as Wellpoint Inc., Avon, Sara Lee and HP. Economists predict that women entrepreneurs may lead the economic recovery by creating new jobs.
Despite being a fast-growing segment, there remains a stunning gap between these realities and the general perception about women CEOs and entrepreneurs.
To underscore this trend, Smart Business has partnered with the Women Presidents’ Organization as a national media partner. WPO is the premier organization for women entrepreneurs, with more than 1,400 members worldwide. Through this partnership, we hope to help bust myths about women-led organizations and share the experiences of women CEOs.
One component of this partnership is a regular column by WPO Founder and President Marsha Firestone, which will begin in May and will discuss topical issues faced by this demographic.
Smart Business Executive Editor Dustin S. Klein recently sat down with Firestone to discuss the growth of women-led businesses and the role WPO plays in fostering them.Tell me about the role women entrepreneurs play in the economy.
The impact on the American economy can be measured by the number employed and the revenues generated. If we take just the Women Presidents’ Organization, the average revenues are $13 million but the aggregate revenues are $15 billion. The average number of employees among our members is 96 people, but the aggregate number of employees is 110,000 people. So you can see, this is a tremendous impact on the economy.
The real place that women have carved out where they have more influence, more power and more economic security, is in owning their own businesses. Two out of every three new businesses are being started by women, so not only are they generating this revenue but they are also employing a lot of people worldwide.What unique challenges do women business owners face that perhaps their male counterparts do not?
That can be summarized in one word: invisible. Unfortunately, women-led companies are not always recognized by the public-at-large. They are perceived as mom-and-pop operations. ... Three percent of the women who own their own businesses generate more than $1 million in revenue. Only 6 percent of male-owned businesses generate more than $1 million in revenue. ...
There was an article on the front page of a major publication that led with the question: ‘Why do women own such small businesses? Why are they all crafts and cookie bakers?’ I think that says it all.So why do you think this perception exists?
Because women really only started growing the numbers of businesses they owned around 1977. At that time, 4.5 percent of all the privately held businesses were owned by women. Today, we see that number closer to 30 percent. And, when you add in women-led businesses, the number grows to 38 percent of all privately held companies.
The recognition about these numbers just hasn’t caught up with the reality.Do you see that women entrepreneurs collaborate differently than men?
Women tend to be more territorial, and they aren’t necessarily the best collaborators. But that said, there is a large percentage of women who will collaborate and work together and is not much different than men. The WPO is based upon the four C’s collaborating in a confidential environment with noncompetitive businesses, making a commitment to support each other and to build connections. So the tagline we have is ‘reaching farther together.’ It implies collaboration, but that collaboration doesn’t happen without the help and support of our chapter chairs who make sure that’s what goes on at the meetings.
We bring the genius out of the group, and the chapter chair’s responsibility is to help achieve that. And because there is that structure in place, I think there is more collaboration.It’s been said that women have a unique opportunity to help lead the economic recovery. How is WPO helping its member do that?
The way the WPO functions is that we meet monthly for three to four hours. The agenda is defined by the members. Our members discuss issues during this downturn, which are important to them and which they need to address to remain a going concern.
Eighty-two percent of our members are optimistic about 2010. Eighty-three percent say that WPO has helped them to feel optimistic and to move through the difficulties of the economy. And 65 percent of our members feel that they can tie the growth of their companies to the WPO. So I think that women do have an opportunity. We’ve seen it.
And the main place where they have that opportunity is in job creation, through building these new businesses. Entrepreneurial businesses are employing about 40 percent of the U.S. population. Because two out of every three businesses being started are being started by women, they will be contributing even more to that 40 percent number.
How to reach: Women Presidents’ Organization, www.womenpresidentsorg.com
In order to close a sale, customers must hear the word “yes” before they make a purchase, agree to a service or sign a contract. Few people will do business with a company that makes it a practice of giving a dozen reasons why something cannot be done, instead of figuring out how to say “yes.” The word “yes” is the launching pad for every transaction, but too many companies don’t seem to get it.
A negative response to a request may at first blush seem appropriate, but a seller must learn how to turn a negative into a positive. There are some easy techniques to accomplish this seemingly elusive feat. As an example, a customer wants a delivery on a Tuesday, when your truck only travels to the customer’s area on a Friday. Instead of summarily saying “no” because it does not fit your schedule, empower your people to find a solution. Teach them to be cautious with their choice of words and learn how to use softer and more conciliatory synonyms for “no.” For this delivery request example, your representative could say, “Yes, your request is reasonable. We will work on making it happen. However, until we can permanently change our schedule, can we deliver on X day instead of Y day?”
I could never understand why a retail store would put up signs that proclaim what a store won’t do for its customers instead of what it can and will do. “No food or drinks allowed.” “No checks.” “No who-knows-what.” Sure, a retailer doesn’t want anything spilled on the merchandise and certainly doesn’t want to get stiffed with a bad check. However, instead of posting a “no-no” statement, the sign could easily be rewritten to make the negative a positive. A substitute to this same proclamation could be: “We have the lowest prices in town because we don’t incur the added costs of processing checks, and we pass this savings on to you. For your convenience, we accept all credit cards.” Of course, these illustrations are oversimplifications, but they will point you in the right direction.
Never forget your business needs the customer much more than the other way around. Management’s job is to promote creativity and underscore the objective of accommodating your customers’ needs with the ultimate goal of exceeding them. You’ll never do it if you start with the word “no.” The lifeblood of most every company is repeat business. The toughest initial hurdle is to get a customer to try your product or service. This initial trial is also typically the most expensive step in the sales process, but after that, it can lead to a long-term and profitable relationship.
There is nothing worse than telling a customer, “No, it is against company policy,” or even worse, “We don’t make exceptions, no way, no how.”
Recently, I was in a fancy-schmancy restaurant when the waiter began his shtick by rattling off a list of requirements for the privilege of eating at this establishment: “Chef does not allow substitutions, won’t prepare the entrée other than broiling and insists on cooking everything medium rare.” I interrupted the waiter in midsentence exclaiming my confusion because I thought my guests and I were the customers and the restaurant took the orders instead of giving them. The waiter looked at me as if I were from another planet. He then continued with his spiel. What was the net result of this string of “no’s”? First, I had a lingering bad taste in my mouth, and it wasn’t from the food. Secondly, I reduced the tip from my usual 20 percent plus. Worse yet for the restaurant, I won’t rush back for a return visit and most likely will repeat my tale of woe when this eatery comes up in conversation. You do the math of the cost per letter of the use of the word “no” and what this did to the restaurant’s bottom line.
Nyet, nein, no or like words in any language can all have the same effect: lost sales and profits, not to mention a tarnished image. It doesn’t get “no” worse than that. Your job as a leader is to find a way for your team to always get to “yes.”
Michael Feuer co-founded OfficeMax in 1988. Starting with one store and $20,000 of his own money, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind wellness chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at firstname.lastname@example.org.
After several years of falling workers’ compensation rates, California employers are bracing for double-digit rate increases in 2010. Increased claims, rising medical costs and lower collected premiums as a result of higher unemployment leave insurance companies with no choice but to increase their rates. Regardless of workers’ compensation reform, the WCIRB has also reported that the average cost of serious claims has risen 47 percent since 2005. Unfortunately for most businesses, such rate increases could not come at a more economically challenging time.
“Most companies seeking to control their workers’ compensation claims and premiums have utilized traditional tools such as employee safety training, safety incentive programs and annual employee evaluations,” says Griff Griffith, CPA, CIC, a principal with GMGS Insurance Services. “Some measurable success has also been achieved with claim reviews when coordinated by experienced workers’ compensation claims specialists. Nevertheless, the greatest success can be achieved when a tool like GMGS’s Workers’ Compensation School is utilized to transform the culture of a company by making the employees the focus of such training.”
Smart Business spoke with Griffith about this unique risk management innovation that can help businesses mitigate the rising cost of workers’ compensation insurance.
How is a program like Workers’ Compensation School unique?
It is an employee training program taught by risk management professionals with proven results, including:
- Drastically reduced workers’ compensation premiums
- Superior employee safety performance
- Reduced frequency and severity of claims
- Special rate discounts offered by insurance carriers
- Improved employee morale and productivity
In Workers’ Compensation School, employees are taught the truth about workers’ compensation insurance and learn that they are more than just employees; they are key players in the success or failure of their workers’ compensation program. By inspiring employees to take ownership of their safety program, Workers’ Compensation School has proven to be a catalyst in reducing participant’s annual workers’ compensation premiums by thousands of dollars and, in several cases, more than $1 million dollars.
What results are achieved through Workers’ Compensation School?
Businesses control one key factor in the calculation of their workers’ compensation premiums: their Experience Modification Rate (EMR). This multiplier is an experience rating that companies earn based on the past three years of losses. This EMR can double or triple a company’s annual premiums due to an adverse loss history; alternatively, it can cut the annual premiums to less than half the average premium to reward a clean safety record.
Workers’ Compensation School participants regularly achieve EMR reductions of 50 to 75 percent, and even more impressive is the fact that their reduced EMRs are maintained indefinitely. In addition to EMR reductions, many insurance companies are also taking notice of these results and offering special premium discounts of 5 to 10 percent for companies participating in the school.
In addition to employee advocacy, Workers’ Compensation School educates management and employees about the realities of workers’ compensation fraud. Few, if any employees actually understand that workers’ compensation fraud is a felony and punishable by up to five years in prison.
Who benefits from this program?
As your company’s EMR and premiums drop amidst rising workers’ compensation rates, your company becomes more competitive than the competition. Companies are able to secure more work, which boosts revenues and preserves the jobs of their employees. Most business owners are also willing to share some of the premium savings with their employees, which helps to financially incentivize employees to take ownership of their workers’ compensation and safety programs.
What makes Workers’ Compensation School credible for the employees?
One of the keys to Workers’ Compensation School is that it is taught in English and Spanish by an outside third party, not an employee of the company or an employee of the insurance carrier. Bonding with the teacher is critical to the success of the program. In fact, students are taught that, as targeted results are met, their insurance carrier and broker actually make less money. This adds distinctive credibility to the training.
What are the most popular issues addressed?
There are 15 key topics addressed in Workers’ Compensation School, but probably the most popular is ‘How much do workers’ compensation claims really cost your company?’ Management and employees all want to know what a claim actually costs them in the long term. It is a penetrating lesson for employees to learn that their ultimate cost of a claim is 25 to 100 percent more than the actual medical costs paid by the insurance carrier.
The greatest myth dispelled by Workers’ Compensation School is the truth behind workers’ compensation lawyers. It is revealed to employees that workers’ compensation attorneys collect as much as $200 million a year in California, while claiming to be ‘Robin Hood.’ The students quickly realize that such attorneys are more focused on ‘robbing the ’hood’ than serving the needs of injured employees. Ultimately, Workers’ Compensation School ensures that employee safety is not a waste of time and that working safely benefits all employees personally and financially.
Griff Griffith, CPA, CIC, is a principal with Garrett/Mosier/Griffith/Sistrunk Insurance Services. Reach him at (949) 559-3370 or GriffG@garrett-mosier.com.
In an economy where every penny counts, return on investment is king. People want to know how much they will get back on anything they spend money on.
One area you probably can’t go wrong in is business events. Investing in events, and the face-to-face opportunities they present, provides you with returns that you can measure.
Regardless of whether you attend, sponsor or buy a booth, you can determine whether it was worth the time and money you invested. If you attend, how many people did you meet who were prospective customers? In an age dominated by e-mails, text messages and the occasional phone call, nothing beats face-to-face communication. People do business with people whom they know and like. The best way to earn their trust and get to know them is through a face-to-face meeting at a casual business event.
If you are sponsoring an event, you’ll know how many people were there and will probably get introduced to some VIPs and get other opportunities to provide information about your business to others. Like the attendees, you’ll get plenty of opportunities for face-to-face contact with business prospects.
If you buy a booth, you’ll have a list of qualified leads to work off of after the event is over, and they will be people you met in person. So no matter what route you take with events, you will have a measurable return on your investment.
The key to a successful event, whether you are putting the event on or just attending, is qualified people. You want to go where your potential customers would go. Customers are lured by high-quality information that’s relevant to them.
The more specialized the event, the more significance it will have. It’s easier to find general information than it is niche information, so if you have an event that is narrowly focused, you will find a lot of customers in attendance who are attracted to that niche.
If you are the one putting on the event, take great care that everything is professionally done from start to finish. If you are uncomfortable handling the details internally, I recommend using an event management firm to look after all of the details for you. It only takes one small slip up to ruin the entire event. You will be judged not just on attendance but also on things like the food quality and how well the sound system worked.
Your event should provide an opportunity to bring buyers and sellers together, even if you are the primary seller. Use your event to get face-to-face time with not only prospective customers but existing ones, as well.
A big part of building a company is repeat business. You can’t afford to lose a client these days. An event can build on the trust and rapport you already have with your customers. It offers the opportunity for face time and perhaps even a chance to introduce them to other customers who can assist them with other problems they may be having. The more value they get out of your relationship, the harder it becomes for them to walk away.
A good event will keep people coming back year after year. Regardless of whether you are a sponsor or attendee, with a little preparation and the right attitude, you can get a great return on investment. In this economy, is there anything better than that?
Read Fred's previous column.
While the economy is down, Rick “Baja Rick” DiRienzo isn’t letting that stop him from having some fun at Rockin’ Baja Coastal Cantina.
“What we try to do is keep an upbeat attitude with our guests, with our employees,” he says. “We want everyone to have a party atmosphere when they come in here.”
So at the restaurant chain, the food and drinks must be tasty, and if a server wouldn’t eat or drink something him or herself, then send it back. If someone is celebrating a birthday or graduation, treat that person to something special and make him or her feel important.
“We need to create a party when people come to dine with us,” the founder and president says. “It’s like going on a mini vacation. We have to give them a party atmosphere to have fun with it, and by doing that, the guests will keep coming back.”
Smart Business spoke with DiRienzo about how he creates a fun and successful business for his more than 200 employees despite the down economy.
Get employee buy-in. We have to get everyone on the same page. Everyone has to buy in to (the culture) or they won’t be able to work here.
I’m not the one who does that my managers do that. They’ll call people out if they don’t look like they’re paying attention. They’ll say, ‘Go on home. If (you) don’t want to listen to what I have to say and if you don’t think it is important enough to you, then go home.’
We only want people who are really committed to our entire philosophy, which is service-oriented and taking care of other people. If you start thinking about yourself too much and not about your customers, it’s not going to work.
So they’ll tell them, ‘John, are you sure you want to work here because it doesn’t seem like you do?’ They’ll get that hint that they either come to work ready to listen and learn or else they don’t. It’s a tough attitude sometimes, but you have to. You can’t afford to have people here that won’t give your guests service.
Give customers what they want. Listen to your guests and listen to your customers. They’ll tell you what they want to see and what they want to hear. One of the biggest faults all of us can have is not listen to what the guest is asking for. You need to provide. We don’t know the word ‘no’ or ‘can’t.’ We can do anything. If we have the food in the restaurant or the alcohol, we can do it. It doesn’t matter if it’s on the menu or not.
Never say no to a guest or a customer if at all possible. There’s a lot of different people who will want some sort of vegetarian meal we only have one vegetarian meal, but we’ve got all the product we’ve made vegetarian pizzas on tortillas. We’ve made vegetarian fajitas. If people want to come in and just get 5 pounds of crab legs, we’ll sell them 5 pounds of crab legs. They’re coming to us and spending money, so why not accommodate them. Usually the people who ask for something special, they’re more than happy to pay a price for it. They just want to be able to get it.
You have to fight for every dollar you get. There’s no reason to turn anybody down on anything. It’s like my father always said, ‘Everything is for sale. Just attach your price to it.’
Set the example. Every once in a while something will pop up and you’ll tell them to do it, and it just doesn’t get done or it does get done and it’s just not right. It could be a simple thing like hanging a sign or banner. Sometimes it’s the easiest thing in the world and people just do it, and because it’s so simple they don’t take the pride in it of making sure it’s leveled or straight or centered. I’ll say, ‘Can you put that banner up for me?’ and they’ll do it crooked or it’s not centered. I’ll just do it myself and I’ll show you how you should have done it. Then they look at you like, ‘OK, why is it that important?’ Well, because it is. It’s important that it’s straight and that it’s centered and that it looks right. You’ve got to have pride in what you’re doing and have passion in what you’re doing. If you’re working, you should have a passion for it. Take pride in your work and have a passion for it.
Set goals. We visualize where we want to be three months, six months, nine months, 12 months down the road, and we identify everything we’re going to do and try to reach them it’s like an onion, and keep peeling back the onion.
All of our goals are set monetarily, so our budgets are pretty much our goals. We don’t make an unrealistic budget we look at last year, we look at the economy, and we study it. A [former] partner of mine tells me that all of these restaurants are complaining that they’re down 15, 20, 30 percent. I’m very upset. We’re flat. We’re doing the same amount of business as we did last year we haven’t increased any. He’s telling me I should be thrilled, but I’m not I’m not thrilled with mediocrity. Our food is good enough and our service is good enough, so we should be up, but everyone tells me I should be happy. I guess in this economy flat is the new up. Flat is not in my vocabulary even for this year we set our goal for 10 percent higher than what we did last year.
You just need to talk about it and open up your eyes and say, ‘What will help you be better, and what will help us all be better and reach those goals? What does it take? Does it take more advertising? Do we need to spend more advertising dollars? Do we need to look inside our walls or outside our walls? Is there something that we can do? Maybe your signs are wrong? Maybe your front entrance is wrong?’
How to reach: Rockin’ Baja Coastal Cantina, (619) 234-6333 or www.rockinbaja.com
A couple of years ago, a bombshell of sorts hit Gerald Proehl’s company, Santarus Inc.
It was a Paragraph IV certification an industry-specific name for a problem that too many companies deal with.
Basically, another company wanted to make Santarus’ product and was taking action to try and make it legal. If you’re at all familiar with what a Paragraph IV patent certification is, you know it is one of the channels by which a generic prescription drug company can attempt to replicate a brand-name prescription drug company’s products and take them to market.
In this case, it was Zegerid, Santarus’ flagship product a proton pump inhibitor that treats acid reflux.
“Our stock was trading at about $6 a share, and it went down to $2 a share,” says Proehl, Santarus’ president and CEO. “It has been a big overhang of the company for really the past two years. It has forced us to focus on the things the company really needs to do to be successful but still not knowing what the final outcome is going to be.”
It was the air of uncertainty that provided Proehl with his biggest challenge as he attempted to pull his company which generated $130 million in 2008 revenue through a swamp of patent litigation, case building and, ultimately, not knowing if its backbone product would become, in essence, a shared property with a generic prescription company.
Employees want certainty and stability in their company’s performance, and when you can’t totally guarantee it, sometimes you have to focus your employees on what you can control. A big part of that is frequent and frank communication.
“There are certain things you can’t control, and in our industry, you can’t control whether someone files a Paragraph IV on a product, so you go through the process of keeping people updated on what happens along the way, as far as the different points along the litigation,” Proehl says. “You keep them informed, but beyond that, you keep them focused on what you need to do to be successful.”Stay on goal
When a situation puts your company in circumstances beyond your control, one of the first things you need to do is focus your employees on what they can control.
At Santarus, Proehl needed to continue focusing his research teams on research, his sales teams on driving sales, his administrators on administration.
Emphasizing the variables you are able to control takes the spotlight off the looming issue, at least on a day-to-day basis, and helps keep employees at work on the basic blocking and tackling that is going to drive your company’s success, no matter the influence of outside circumstances.
“If employees understand what the corporate goals are and what their individual goals are, it keeps them focused on the things they can control and the things they can accomplish,” Proehl says. “Most people want to accomplish goals, as long as they are measurable, specific and attainable. It keeps attention on the right things, as opposed to on the wrong things that can kind of weigh people down when things don’t go well.”
At Santarus, setting and communicating goals begins with Proehl and his leadership team. The company’s top management works together to define corporate goals, which then cascade down to departmental and individual goals. Goals have to align from each individual up to the overarching corporate goals.
“You really have to spend time with your leadership team,” Proehl says. “You have to continue talking to them about how their department goals align with the corporate goals. In some cases, it’s easier for some functions or departments.
“Say you have a corporate goal of a certain revenue. It’s easy for the corporate folks to say they’re easily aligned to that particular goal, but it’s more difficult when you talk to someone in research and development or quality assurance. You need to spend more time talking to them about the things they can do to drive revenue. We might get into discussions about clinical trials or how they can provide information to help drive revenue. It all comes back to explaining how departmental goals drive corporate goals, and then showing how each individual’s goals align with the corporate goals.”
Aligning goals vertically helps give each employee a sense of how their daily tasks mesh with the overall mission of the company. If each employee is engaged in that manner, you will form a company of people who realize that each piece of the puzzle is integral in driving profit, maintaining a culture and working through adversity.
It’s up to you and your management team to start that process. You need to take the larger mission and goals of the company and convey it to each department and by extension, each employee in a manner that shows how everything fits together.
“At the end of the day, people want to understand where the company is going and how they fit in with the future growth of the company,” Proehl says. “They want to really feel that the company has a vision and a strategy to grow and become a success. If they don’t feel that or don’t see that, people start to get disenchanted or disengaged.”Develop leaders
When an organization is undergoing a transformation, many leaders try to develop “change agents” within the ranks people who set a new example and advocate for the change.
You can apply the same idea when attempting to create a sense of stability in your company. When you’re trying to focus everyone on the same basic goals and objectives, particularly in a time of uncertainty, it helps to have leaders throughout the organization who can do the same.
“Again, a lot of it starts with me and my senior leadership team,” Proehl says. “We spend a lot of time talking about the culture, identifying overall values that people have and making sure they match our values system.”
By clearly identifying your vision and the principles upon which your culture is based, you’ll be able to better identify what you want in a management-level employee. Forming those parameters is a critical step, because finding the right leaders for your company starts during the recruiting process.
It’s much easier to hire someone with a matching values set than it is to mold someone who doesn’t quite fit.
“It’s hard to change people’s values systems,” he says. “If someone’s personal values don’t match with what you have developed for the company, it’s probably not going to be a good fit, and either they’re not going to be happy or you’re not going to be happy with them. That’s why you spend a lot of time during the interview process trying to determine whether they’re going to fit culturally.”
Proehl and his leadership team send each management candidate through different rounds of interviews with representatives from various departments. The multipronged interview approach helps develop a wide range of perspectives on the candidate.
“Some people interview for technical or scientific skills, while others might interview more on the cultural fit side,” Proehl says. “When we debrief each other on the candidate, we talk about not only whether the person has the skills and experience to do the job but whether they fit within the c ulture.”
Each interviewer poses an assortment of situational questions to the interviewee, aimed at getting a feel for how he or she would approach a cultural or ethical dilemma and the process behind their approach.
“You want to see how they’d react under stress, under pressure, in a given situation,” Proehl says. “You get them to explain their processes and how they found a solution.
“A lot of this you can also find through the process of checking references. The reality is, you can try to interview some of this out of folks, but if you’re really good at asking the right questions of references, you start to get a feel for how they interact with people and how they fit within a company.”
Managers need to have both the technical skills and the cultural fit for the job. However, Proehl says the cultural fit is the pivotal factor. Leaders need to focus their people on the goals and mission at hand, no matter what distractions might be buzzing around the company. With that in mind, if a candidate has the skills for the job but isn’t a cultural fit or a competent communicator, Proehl and his staff will look elsewhere.
Good leaders have some common skills and characteristics, all of which can help keep the company informed and focused during a challenging time.
“Leaders in an organization need good interpersonal skills, of course,” Proehl says. “They need the ability to think strategically but also do things tactically. We look for people who have the ability to wear multiple hats, the ability to do two or three different things. And you want someone who genuinely enjoys what they’re doing. If someone is just going through the motions, it becomes pretty obvious. Those are the primary things you want to look for.”Preach patience
When piloting your company through an uncertain time, one of the most critical things you can manage is the expectations of your employees. Employees want to see progress, and sometimes, they want to see it at a faster rate than you are able to deliver.
As the leader, you and your management team have to show progress, but you also have to show the work behind the progress, which can help employees understand the speed at which you’re moving.
“Sometimes, it’s difficult for folks because people want it to happen overnight,” Proehl says. “When you’re licensing a product, people are waiting for it to happen next week. So what we’ve tried to do is explain the process we go through. When we do license something, we go back and talk about it. We talk about how long it has taken. Sometimes it takes 12 months, 18 months or two years from the start of the conversation to finishing the deal. People need to understand that it’s an ongoing process.”
It comes back to showing employees how everything fits together and aligns with your goals. Proehl says you have to answer the question for every employee, “How does it affect me?”
“When we do our surveys, sometimes we find that it’s not necessarily that people don’t clearly understand the vision of the company, it’s that they have to see actions that reinforce the vision,” he says. “It all sounds great, but how does this affect me as an employee, and are we doing the things necessary to drive us toward the vision?”
As of press time for this article, Santarus was still waiting for a final outcome on the Paragraph IV certification, but the company has remained stable, and Proehl says employees remain focused on driving sales and remain optimistic about the company’s future. Keeping things that way will continue to be an ongoing communication task for Proehl and his managers
“You just have to keep your goals and vision in front of people all the time,” he says. “You just want to constantly remind people of what you’re trying to do.”
How to reach: Santarus Inc., (858) 314-5700 or www.santarus.com
The late comedian Rodney Dangerfield’s signature line, “I don’t get no respect,” always garnered a few good chuckles. As a leader, however, if you find yourself in this same predicament, it’s no laughing matter.
Most executives usually try to do the right thing. They carry out their responsibilities, weighing the pros and cons of their actions and decisions.
Way too many executives think that their people will somehow recognize the angst they endure before gaveling an action into effect.
People cannot, however, understand why you do something simply through osmosis. This is where communication comes into play. How many times have you made an important decision and just filtered it down with what I call the “so be it” method? Sure, sometimes mandates are a part of being a leader and some are popular and others aren’t.
Throughout my career, I’ve learned a number of lessons about respect. The most important one is that respect can be earned in many ways, and most times, it’s simply a reflection of your attitude and actions, rather than what you actually say.
When I was a young CEO of my retail, publicly held, Fortune 500 company, I participated in what are known as Wall Street security analyst field trips, in which an underwriter organizes an excursion that takes portfolio investment professionals on the road with CEOs of similar businesses. One such trip was a bus tour of retail stores in Providence, R.I., visiting each respective CEO’s store along the way. The tour included a 45-minute walkthrough, led by the CEO of the chain explaining why his or her operation was the best on the planet.
On this particular tour, everything was running late and my store was the last stop. As the bus arrived, my watch told me there was a huge time problem because participants had planes to catch.
As we entered the store, it was spotless. All of the employees were wearing their “Sunday best” and you could literally eat off of the floor. The leader of the tour whispered in my ear that I had 10 minutes to get the message out. As I rushed 20 portfolio managers through the store, talking faster than the pitchman on the classic FedEx commercial years ago, the dejected looks on the employees’ faces were apparent. My tour ended almost faster than it began as I walked backward out of the store continuing my pitch.
As we boarded the bus to the airport, I felt lousy. I knew the employees most likely had suffered acute gastrointestinal distress while preparing their store for “show time.” As the bus barreled down the freeway, I realized this was a defining moment for me. Using my cell phone I called the store manager and told him to get in his car, catch up to my bus and quickly get me back to the store. Instinctively I knew that I had to show this store’s employees that I respected them and their work.
When I returned to the store, the employees gawked at me with eyes bigger than saucers. I then spent about two hours walking the store, aisle by aisle, with all of the employees in tow, asking for their input on everything they do. I missed my plane, had to stay overnight and ruined my schedule, but it was worth it.
Word of this encore visit spread through our 1,000 stores faster than Grant took Richmond. In no time, this infamous visit turned into a celebrated success and became a part of the company’s history.
You, too, can pick your own time and place to recreate a “respect event” that will speak volumes about how you do business. This can be achieved by arriving at meetings on time and ending the meetings as scheduled. It can also be reflected by not piling on the work just because you decided you needed something on your timetable without consideration of what else is currently on someone else’s plate.
Respect is contagious and can start a cascading trickle-down effect. Your direct reports will begin to increase their respect for subordinates and even you, if you’re lucky. It’s not only the right thing to do, it is the right way to build a business and create a positive culture.
If you feel you just “don’t get no respect,” you can improve your business persona by following this golden rule “To get respect, you first have to give it.
Michael Feuer co-founded OfficeMax in 1988. Starting with one store and $20,000 of his own money, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind wellness chain featuring more than 7,000 products for head-to-toe care. Mr. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
Shortly after the opening credits of the film “Tomorrow Never Dies,” James Bond received a cell phone from the Q Branch of the British Secret Service. The phone was able to transmit incoming and outgoing calls, of course, but it was also able to scan, analyze and transmit fingerprints, and pick locks with a stylized antenna. And it could also fire away as a stun gun.
Not bad for 1997.
A little less than 13 years later, there is nothing that lethal anywhere in the world of telecommunications. There are, however, plenty of developments, especially regarding Voice over Internet Protocol, or VoIP, that might make you feel a little bit like 007. And cut a chunk of money from your monthly expenses.
Developed in earnest during the first Internet boom of the early 1990s, VoIP utilizes the Internet to make inexpensive, if not free, phone calls to just about any number around the world. All you need is a computer, broadband Internet access and a voice on the other end of the digital line. For years, media and industry experts trumpeted VoIP as the next big thing, but the Internet capabilities lagged behind the technology, leading to garbled conversations and snowfalls of static.
With the rise of faster and more efficient Internet access during much of the last decade, VoIP increased in scope and performance. Dartmouth University installed a network across its campus in 2003. Oprah stumped for a popular VoIP service last year. Even the government is starting to take advantage of the new technology, with the Social Security Administration in the process of converting to a VoIP network at its more than 1,500 field offices.
All of that combined means that VoIP is not the next big thing. It is the now big thing.
“The entire industry has gone beyond the experimentation phase,” says Tom LoFrisco, executive director of business product management, AT&T. “Carriers, manufacturers, everyone is headed in the direction where they will be able to supply Voice over IP.
“It’s decided. It’s a business standard.”Make technology work for you
What makes VoIP so special is what it is able to do for you, for your business, for telecommunications as you know it.
There are the audio and video calls, which are available for either nothing or next to nothing on a number of popular Web sites. But if you choose to rely on those sites and the public Internet to run your business, industry experts say that you will leave yourself susceptible to many of the problems common to insecure data networks, including hackers, spyware, malware and any number of viruses.
A better option might be to install a VoIP network through a larger carrier to ensure that your voice and data will be secure. The cost to install a new network is high normally between $20,000 and $30,000 for businesses with 50 or so lines, though quotes and actual costs vary case by case but the savings can add up thanks to the 20 to 30 percent that most industry experts say you can save on your monthly bill. And besides, you will have plenty more tools, the kinds once thought limited to secret agents, to enhance how you do business.
“There are just a slew of new features that existing networks don’t have,” LoFrisco says. “There’s ‘Find Me Follow Me,’ where calls can ring your different assigned handsets simultaneously. There’s integration with other voice applications. And the key is that most of those features can be provisioned and managed at the user level.”
Many of the features provided by larger carriers have been available for more than a decade but at a far higher price. As recently as a couple of years ago, only Fortune 500 companies and the like were able to afford IP features, including unified messaging, where your voice mails are converted to text and arrive seamlessly with your e-mails, and secure access to the company network for employees working anywhere in the world.
“Being able to have remote workers is a big advantage,” says Roger Ramsey, vice president, West Coast Cabling. “You can take an IP phone and you can plug it in at home, or I’m able to take my soft phone and plug it into my laptop or put it on my PDA, or take a hard phone and plug it in at home. I don’t need anything special as long as I have some kind of high-speed Internet access at both locations.”
Your employees can even work from home with the same equipment, technology and access available to them at the office. Just hand them a VoIP phone, tell them to take it home and plug it in, and they will be able to work and sound as if they are at their desk. This feature is ideal for call centers and companies that offer 24-hour service because it opens the door to hire remote workers across the nation and around the world. It will also benefit employers who might want to decrease the size of their office and the amount of their rent but maintain the size of their work force or smaller companies that want to appear bigger to customers.
“I’m able to act as if I’m in the office,” Ramsey says. “Nobody knows the difference.”Think about the future
Though VoIP networks might initially seem like some sort of futuristic technology that will be difficult to install and more difficult to understand, it will likely be an easier transition than rotary to touch-tone or analog to digital. You might not even need to install new phones or schedule much time, if any, to train employees how to maximize use of the new features.
“VoIP does take some time to fully understand and utilize the benefits,” says Larry Coval, vice president, Cox Business San Diego. “Generally, some training for IT personnel is needed, as well as for end users, and that really comes from the feature functionality and how to use it. The end users are the ones who want to learn more about it and take advantage of those features.”
If you can figure out how to use your remote control to flip channels, record your favorite shows and insert a DVD with the push of three buttons, you will probably be able to figure out a few additional features on your phone, especially if they help you run your business more efficiently.
Of course, a VoIP network might not be necessary for all businesses. If you have only one office and a handful of employees who never work in the field, if you receive far more calls than you send or if you want to install the newest technology just to say that you have it, you probably have little need for VoIP. But if you have offices in multiple cities, even multiple states, to tie together with one network or if you have any employees out in the field, a VoIP network might be a sound investment.
“Most people will agree that we’re headed for a converged network over time, but TDM (time-division multiplexing) is not dead yet,” Coval says. “There are still lots of customers out there who continue to have a need for TDM.
“But I don’t think there’s any doubt that convergence onto a single platform is inevitable.”
Stenman wouldn’t — and couldn’t — have it any other way.
Change and adaptability have become two necessary ingredients for success in just about every business. Change is inherent to the construction business, which can be cyclical by nature. But the economic downturn of the past couple of years has compounded problems and increased the need for adaptability.
Stenman’s solution is to keep all potential avenues for growth open and connected.
“Let’s go back a couple of years,” he says. “The education market was strong, and the temptation is great to put all your eggs into that basket. We became the sixth-largest education builder in the nation, just by building schools in California. Now, as part of Heery, we’re the fourth-largest school builder.”
Barnhart was acquired by Atlanta-based construction giant Heery International Inc. in 2008. Stenman operates Barnhart as its president.
“But you still have to avoid putting all your eggs in that one basket,” he says. “So we kept our presence in the federal market with military. We kept a foothold in municipal work with cities. That way, when the cycles turn, you’re not caught in a place where you have no work, where you can’t build a platform. You always have to remain cognizant of those other opportunities.”
Communication is a major part of keeping Barnhart — which generated $450 million in 2008 revenue — adaptable to both cyclical and economic downturns. In order to stay ready, Stenman has to both inform and stay informed by establishing and continually feeding channels of communication with both employees and clients.
It’s the people at the ground level who are going to notice market trends first and will be able to keep you and your leadership team in the know. But you have to establish and maintain those connections during stable times in order to reap the potential benefits during challenging times.
“There is no secret formula,” Stenman says. “It’s hard work on top of more hard work and delivering on what you say you’re going to deliver.”
Stay close to your markets
Staying close to your markets means staying close to the people you serve. Whether it’s an end consumer using your product, a client with whom you are trying to build a relationship or a business customer, you have to put yourself and your top management in places where all of you can interface with the people who fuel your business.
Stenman says it boils down to two words: stay involved.
“In the education market, we get involved in the coalition for adequate school housing,” Stenman says. “We have individuals who go through training, then speak at national events and state events. We stay close to city managers, facilities directors, we try to understand their program with future construction, what it encompasses, and we try to monitor it. On the military side, a lot of our project managers have come out of the military.
“You need to find a way to understand how the client operates. That’s what helps us respond to these opportunities when they arise. If you haven’t developed that experience and background, it becomes difficult to have success in the markets you serve.”
However, there is more to it than just flying somewhere and shooting the breeze with a client or customer. Informal, nonstructured communication can provide valuable nuggets of information, but if you want to be able to use the information you gather from the customer interface point to help you grow your company, you need a more formalized system for obtaining and analyzing all of it.
Stenman and his leadership staff survey Barnhart’s clients, drawing a picture of how the company is servicing clients in the here and now, and helping to sketch an outline for how Barnhart could possibly better serve clients in the future.
“As executives, we’re charged with the responsibility to continually serve the marketplace,” Stenman says. “So we have to continually survey what our clients want. We find out what our clients of the future might want, then we evolve the company.”
If you’re reaching your customers and meeting or exceeding their needs, it’s likely they’ll come back to you to do more business. Stenman says that is a key indicator when it comes to staying close to your markets. If the customers keep coming back, you’re probably on the right track.
“You’re only as good as your last project, your last sale,” he says. “So if you’re getting repeat business, that says you’re performing responsibly. Then you build on that. You make sure you’re staying on top of legislation from your industry. You make sure you attend events that keep you in touch with your market. You have to be very knowledgeable about the markets you serve. You really have to become an expert.”
Stay close to your employees
Managing your relationships with your clients and customers is essential to your success as a business. But every bit as essential — and perhaps even more critical to the integrity of your culture — are your relationships with your employees. It’s an issue that became magnified as the spiraling economy of 2008 and 2009 created tension and uncertainty within many companies.
As with customers, employee communication hinges on the willingness of you and your management team to get out of the executive offices and engage your people face to face.
“Uncertainty breeds fear, so you need to be honest and candid with your employees,” Stenman says. “Not everything will stay the same. Things may change, but you have to keep focusing on the idea that we’re all part of the change process. When employees are privy to that kind of communication, a level of trust is created.
“The more trust that is created, the more confidence they will have in their abilities, and the better they’ll perform their jobs. The last thing I want our employees doing is worrying about having a job.”
Stenman says economic challenges can provide some of the most profound learning experiences a leader will ever encounter. Few things will test your ability to lead your people like the environment that a down economy creates. Employees will crave knowledge and worry when they aren’t kept in the loop.
At Barnhart, messages don’t always start in Stenman’s office. He wants managers at all levels of the organization to stay involved in communication. The cascading communication keeps managers and employees at all levels of the organization engaged on a face-to-face basis. However, it also requires vigilance on the part of upper management. Stenman and his staff need to follow up on their messages to ensure that they’re reaching every corner of the organization.
“You have to have multiple communications and dialogues at multiple levels of the company, on down the line, interacting with employees at each level,” Stenman says. “It’s somewhat difficult to have one single person do all of it, all the time.”
To help ensure that communication stays consistent as it cascades, particularly when it comes to major messages that affect the entire company, Stenman and his leadership
team will put the message in writing before reaching out to the managers down the organizational ladder.
“We’ll develop a message triangle or a message box,” he says. “We’ll figure out the bullet points we need to discuss the message. We usually come up with a single sheet of paper, so that when we go out with the message, we’re all speaking in a unified voice — all singing from the same sheet of music, so to speak. I think that’s important, because if you go off point, something you said can be interpreted differently, and that can create a string of interpretations that you don’t need. You frame the message, then try to keep it intact.”
Prepare during good times
Even if your business isn’t in a cyclical industry, chances are you will still experience another economy-related downturn at some point. That’s why you need to prepare your company and your employees for challenging times, even when times are relatively good.
You need to guard against complacency in your work force. Companies can fall into ruts during prosperous times and not even realize it. You don’t want to mess with a good thing, so your primary goal becomes maintaining the status quo. But if you let your business practices run on a treadmill for too long, if you let some slack into your spending and hiring habits, you could set your company up for a fall when market conditions worsen.
“When times are good, you have to resist the urge to become complacent in whatever market has made you successful,” Stenman says. “We’ve seen downturns in the ’80s, in the ’90s and now over the past couple of years.
“Ultimately, what you have to do is resist the urge to become inflated. We believe in being lean and mean — though you can’t take that to such an extreme where you’re working everyone 80 hours a week or anything like that. What you want to be careful about is when there is a need for a cutback, you’re not so bloated that you can’t respond. You don’t want people within your company to develop an irrational exuberance that everything is going to be great forever.”
The acquisition by Heery, which was completed in June 2008, combined with the economic downturn shortly thereafter, reinforced to Stenman the need to build and maintain a long-range company vision that is foundational but also flexible in certain areas.
Stenman says you should never waver from the basic values and principles that make your company a success to begin with. But when it comes to serving your customers and leveraging the talents and skills of your employees, it all comes back to the willingness and ability to adapt.
“The part of your vision that is fixed is what made you good in the first place,” Stenman says. “How you delivered your services, that you didn’t run for cover when the chips were down, that you’re in this business together with your people, that you have a team approach.
“But you also have to have the flexibility and the talent to respond in a diversified marketplace. If a market you serve heats up, you have to have the flexibility and the talent pool to respond and meet those needs. You have to have flexibility in your systems and processes to be successful. But your core, your trustworthiness, your integrity, that never changes.
“Remember that your brand is not a logo. It’s how you do what you do. That is how your clients and customers will remember you.”
How to reach: Barnhart Inc., (858) 385-8200 or www.barnhartinc.com