Ash Robinson is passionate about helping people develop along a career path.
And to share that passion and motivate employees at JW Tumbles, a $9.1 million national chain of children’s fitness and learning centers, she rewards them with “Tumbles Dollars,” which they can spend on a team or another employee doing a great job “sort of a pay-it-forward kind of thing.” Robinson, owner, president and CEO of JW Tumbles, says this creates a team environment among her employees 18 in her office and 270 at franchises nationwide.
“It’s a great reward to see people grow and move up,” she says.
Smart Business spoke with Robinson about how to find the right employees, motivate them and become engaged with them.
Q. How do you find the right people for your team?
Our culture is well defined, and either people are passionate about those things or they’re not. It’s almost a self-filtering process because people who aren’t [passionate] usually aren’t interested in us.
Situational-based questions are a great way to find out how a person reacts and handles themselves. Spend a lot less time talking about the job and more talking about them.
Q. How do you ensure employees are in the right positions?
It’s constant feedback and being engaged with their work. If they’re not in the right position, re-evaluate.
Handle it sooner than later, and bring it back to the job description and whether or not they’re successful. If you have another position they’d be great at, move them to that spot. If they’re not right for your company, amicably part ways and allow them to be successful somewhere else.
Q. How do you become engaged with employees and stay open to feedback?
Set up a system to formalize the feedback process. You can never have enough feedback with your employees, whether it’s criticism or praise.
Create a schedule. Go to employees’ workspaces once a week to ask how they are doing, what they’re working on and what you can help with.
When an employee hits a home run, let everyone know. When they make a mistake, correct it as soon as possible and make sure they have an active role in the solution.
Utilize all communication tools, from e-mail, project management software, phone and face to face. Add more face time whenever possible.
Q. How does an open environment benefit the company?
It’s efficient, in that problems are flushed out quickly. It’s a great place to work if you feel like your boss appreciates what you’re doing and knows what you’re contributing. People know what others are doing and are respecting each other’s contributions.
There are drawbacks. When employees embrace the open-door mentality to the extreme, you may be interrupted more often than necessary. I’ve empowered my employees in specific areas, built their confidence, put trust in their decision-making and designated certain times as ‘do not disturb’ blocks.
This inspires employees to focus on their individual progress.
Q. How do you motivate and empower employees?
It’s giving employees confidence and trust. If I have confidence in them, they have confidence in themselves. Give them ownership for projects and acknowledge when they are successful.
Give them the opportunity to make mistakes. You don’t want people making $100,000 mistakes but easy ones because that facilitates the learning process. When they mess up, say, ‘Here’s what happened, this is where you went wrong, but that doesn’t change anything about what a great job you have and all you have learned.’ It’s having them know that you trust them and their decision-making ability and allowing them to make smaller decisions.
Get comfortable in the areas in which mistakes make less of an impact on the company’s overall objective. If you outline the goals and expectations of a particular position, you reduce the severity of any potential mistake.
Motivating and rewarding is about recognition and making sure that you’re communicating and acknowledging it.
It takes your company to the next level, and you get better results. It makes life easier because you can do a lot more than you could by yourself or with the wrong people.
Q. How do you implement an employee reward system?
Start one at a time. Don’t overwhelm because you don’t want to come off as cheesy. If you go in and say, ‘I hired a consultant or I read an article on how to motivate employees,’ it comes off as insincere.
... Be real. If you are sincere and care about your employees, they buy in to it. It’s hard because you have so much to do. Put things on your calendar and find something good an employee did, so you don’t get too busy and forget about them. If you put it into a system, it makes it easier.
HOW TO REACH: JW Tumbles, (858) 794-0484 or www.jwtumbles.com
When you become the leader of an organization, you gain a whole lot more than a prestigious title.
You also put yourself squarely under the microscope of all the people who work for you, says Dana Gibson, president of National University. If you’re having a bad day, you need to think twice before you pound your fist into the wall or let out a hearty scream because people will be watching.
Fortunately, the same people tend to notice when you do something positive. With the goal of fostering a healthy culture, Gibson says she tries to let her passion for her job shine through in her personality and in the way she conducts business at California’s second-largest private, nonprofit school.
By being both a good listener and a collaborative leader, Gibson seeks to demonstrate through her actions that she wants everyone to be part of the school’s success.
Smart Business spoke with Gibson about learning how to interact with people by watching how they interact with others.
See your people. Even if you’re a company in one location, it’s getting out to different departments. If you have more than one location, go to the different locations so that you get kind of a feel. It’s not just listening to people but seeing some of the informal things, as well, that you learn by being out.
See how folks interact with some of their supervisors. Let’s say an individual and you go out, and you’re visiting with another manager in their office; you can see how they interact with their support staff.
You learn a lot about people when you see those interactions. It helps you understand how you need to interact with them, and it lets you see how they interact with other people.
That usually shows a comfort level that they have. If they are more structured on how they communicate or if they are more informal, that helps you to know how to communicate with that person.
Talk to your people. When they do a good job, say, ‘That was a really great effort.’ It’s being sincere when you do that. Give them the ability to make mistakes. If they acknowledge they have made a mistake and they need to correct it and they’ve learned from it, that’s also beneficial to the organization.
None of us want to make mistakes as an organization, but human nature is we are all going to make them. It’s acknowledging that that’s going to happen and letting people realize that they need to come forward and correct them and move on.
It’s a positive when they are doing things well and giving them kudos and being sincere. On the other side, when you have some issues, it’s discussing that through and using it as a learning experience.
Guide, but don’t lecture. It’s very important for people to figure out how to accomplish what they need to do. It’s the leader’s job to make suggestions because many times, that helps them focus where they need to be spending their time and effort.
There’s a way you can do that and not micromanage everything they are doing. It’s more making suggestions along the way as you see things and yet, at the same time, letting them move forward.
I’m not a micromanager, but I also like to know what’s going on and to make suggestions. Try not to give them specific details.
It’s more giving them guidance instead of details. Like instead of giving them a list of here’s the five steps to do this, it’s suggesting you need to make sure that you communicate with the right parties while you are doing this because there is a lot of vested interest in it.
By doing that, you hope they come up with a plan that makes sure they are communicating with all the people they need to.
Keep the focus on the team. Emphasize that everybody can say their piece, and we all listen. We might decide on a path that not everybody agrees with 100 percent. It’s setting that up and being very open and blunt about it when you have the discussion.
Here’s the controversial thing, and we have to make some decisions on it. We’re not all going to agree 100 percent, but once we make the decision here, we’re all 100 percent supportive of it.
Be responsive. It’s the 80-20 rule. Eighty percent of the things take 20 percent of the time. It’s really trying to figure out what are those 20 percent that need to take more time. Most of the people that have worked for me have always said they found that I was very accessible, and it was because I would respond quickly to most of their items.
If nine out of 10 items get a really quick response, but that one that you need to work on takes longer, they don’t really notice it because you have gotten back to them so quickly on most of the things.
Some people set aside a specific time of day. I’ve never found that works well for me because there are too many pulls on your time. If I’ve got an hour to go through all these communications, it’s trying to get through a vast majority of them in 20 or 30 minutes and then spending time on the other ones.
You can be a captive of your calendar sometimes. Not everything is as structured as you’d sometimes like it to be. Don’t let that rattle you. You can get back on track.
HOW TO REACH: National University, (800) 628-8648 or www.nu.edu
Craig Weatherwax was the class clown in high school, and he continues to use his sense of humor to create a fun family atmosphere at Oceanside Photo and Telescope Inc.
“I do a lot of hands-on, on-the-floor experience with my employees,” says the owner, president and CEO of the $17 million, 22-employee retail camera, telescope, binocular and microscope company. “We try to keep it on a first-name, friendly basis. There’s a lot of kidding and joking that goes on. It makes it fun to go to work.”
Smart Business spoke with Weatherwax about how to create a feeling of family among your employees.
Q. How do you create a fun team environment?
Lead from the top. We try to evaluate everybody as a group, reinforce how departments are doing as a whole and make employees understand that we’re all in this together.
It’s the, ‘This is a marathon, not a sprint’ concept. You can’t get hung up on the bad days, but understand that in the long run, it’s all going to work out.
If your employees see that you take a personal interest in the growth of the business and that you like it and like being with them, that’s something you can’t instill in somebody; it has to come from the heart.
Q. How do you model that culture?
It’s not contrived; it comes naturally. You can tell if people are happy with what they’re doing, and it’s important that people are happy at work. I try to express that and let them make fun of me because you’ve got to give as well as take.
You can’t belittle employees or think less of them. They’re human beings, they have feelings, and you have to be aware of that. A happy employee is a good employee.
Q. What are the benefits of a fun work environment?
Everybody pulls for everybody else. You have your sibling rivalries a little bit like you do in a family, but it’s all done in fun. The family relationship allows people to help others with product knowledge or with how to handle a certain situation as opposed to being competitive and cutthroat.
Q. What are the keys to being a hands-on leader?
A lot of what you do as a leader is to set the tone for the workday. If you’re having a bad day, you maintain that within yourself and exude a feeling of confidence and patience. You can make a good day better or a bad day worse just by how you handle situations and problems.
Q. How do you get better at being confident and patient?
Look at the big picture. Some people get hung up on the specifics of a particular event and fail to look at the big picture. It comes with time.
If you take a step back and focus on the business as a whole as opposed to the specific incident that’s happening, it makes it much simpler to try to have that patience and exude that confidence.
Q. How do you balance being a hands-on leader and knowing when and how to delegate?
Experience. Evaluate each individual situation. Surrounding yourself with good people is important; there’s no substitute for a good staff. Sometimes, you rely on them more than you ever know.
Don’t lose sight of the big picture, and never put yourself too far above the rest of the people because you’re all working toward the same end goal. A lot of people think that you can go into business,
create a business model, and that’s as far as it goes, but being able to be there on a day-to-day basis allows you to make the kind of changes that you need. You can’t sit in a big office and expect things to work smoothly.
Communication is the most important thing you can do to be able to understand and listen to your employees and the people in the chain of command. Listening is an under-rated talent. A lot of people forget that the people down below have a better understanding of what makes your business grow and be successful.
You have to have an open mind to be able to understand and listen to what they have to say. Having preconceived ideas might hinder your ability to listen effectively. If you listen to them with an open mind, it makes a huge difference.
Q. What are the benefits of listening to employees and having open communication?
It helps you understand the building blocks of the business and allows you the ability to change. Many businesses get static in their growth potential because they don’t listen. The employees then, because they’re working with the customer on a day-to-day basis, have a better understanding of what the customer wants, and what the customer wants is going to make your company grow and change in today’s environment of constant change.
HOW TO REACH: Oceanside Photo and Telescope Inc., (800) 483-6287 or www.optcorp.com
Tom Sudberry didn’t sit down and put a lot of thought into what type of leader he wanted to be at Sudberry Properties Inc. Instead, he just looked at his personality and the way he liked to be treated and decided that would be the best way to lead a group of people toward making the real estate development and asset management firm a success. With a strong dose of enthusiasm and passion, Sudberry founder and chairman of Sudberry Properties has developed nearly 6 million square feet of property with a market value totaling more than $800 million.
Smart Business spoke with Sudberry about how to manage your enthusiasm and how to guide your employees without looking over their shoulders.
Put your enthusiasm to good use. A leader needs to have enthusiasm and passion for what you are doing. It’s critically important. Without that, you can’t maintain the energy level you need to run a successful company.
Enthusiasm and passion leads to a sense of vision and optimism. Enthusiasm is contagious. I love being around enthusiastic people because that energy level rubs off on everybody. But you can be very enthusiastic and never accomplish anything.
You have to match your enthusiasm with a sense of vision and strategic thinking, or you’re never going to get anywhere.
Keep employees in the loop. Share what’s happening in the company. We share our vision every month. We talk about the projects we’re working on. If everybody in the company knows where we’re going, we’ll get there.
If we don’t share the vision and the goals, it’s hard to keep everybody moving in the same direction.
Celebrate and support each other. We get into celebrating birthdays and anniversaries and accomplishments and sharing the small victories that people have so people can feel good about each other and what we are doing. We really hold each other up.
Make employees feel comfortable. My style is to treat people as I’d like them to treat me. That engenders a sense of cooperation and a synergism in the company. People feel comfortable in this atmosphere that their decisions aren’t being second-guessed.
They have the opportunity to grow and make decisions and make mistakes. We all make mistakes. When you make a mistake in our company, we have a tendency to say, ‘OK, we all make mistakes. But we’re trying to make the right decisions.’
They feel empowered because we don’t second-guess our decisions. We aren’t constantly looking over their shoulders. We don’t lose our temper and get angry when things aren’t perfect. They feel safe working here.
Not that we don’t ask for and need accountability and the best effort from everybody, but we recognize that none of us are perfect, and occasionally, we’re going to make mistakes. When we do, we’re not going to get crucified for the mistake. We’re going to learn from it and be a better businessperson as a result of learning from those mistakes.
Stay the course through tough times. It’s really through the down times when a company’s reputation is made. How do you treat your employees, your partners, lenders and your merchants when times are bad? Do you treat them honorably or not?
Anybody can do the right thing when times are good. The companies that do the right things in the tough times, those companies are the ones that get through it with their reputation intact.
Accept new ideas. I’m certainly going to listen to anybody that works here for good ideas that they have. Many times, they can point you in a direction that you should be going in. Their ideas are listened to, and they are respected.
We never say things like, ‘That was a dumb idea or a stupid decision.’ We listen to different opinions with an open mind and with respect.
But in the end, the CEO and the chairman need to make the decision as to what they think is the best interest of the company.
Take the time to get to know your employees. When I come in the office in the morning, I always take the long way around to my office so I can get through to the rest of the offices and say hello to people.
I like to see how they are doing, I’ll stop and ask about a family member or what they did last weekend. It’s really important to me that people enjoy working here and they, in general, have a smile on their face.
I think the leader of a company is always a role model. Whether you want to be or not, you are a role model.
Help employees find new challenges, even if it’s not with you. I want you to be happy in your job. But when you reach the point where you feel like you are ready for more of a challenge and more responsibility and you do not feel there is an opportunity to do that in this company, then let me know.
Don’t just quit and go someplace else. Let me know you would like to take on more responsibility, and if I don’t have a spot for you in this company, I’ll help you find a spot at another company.
HOW TO REACH: Sudberry Properties Inc., (858) 546-3000 or www.sudprop.com
Private bankers provide a number of customized banking services, including commercial real estate loans, unsecured credit products, securities investments, insurance premium financing for estate planning and working capital lines for professional firms. By establishing relationships with their clients and developing a personalized approach, private banking relationship managers can service all of the financial needs for key owners as individuals and their businesses.
“With private banking, clients have a very special relationship with their banker,” says Nga Nguyen, vice president in Comerica Bank’s Western Market in Wealth & Institutional Management.
Smart Business spoke with Nguyen about private banking lending options, what types of services private bankers provide and the importance of establishing relationships.
What types of private banking lending options are available?
Our private banking representatives strive to provide out-of-the-box lending. Everything is customized because clients have special and different needs depending where they are in their life. Let’s say that a high-ranking executive needs to borrow money so he can relocate. We can help him obtain a mortgage so he can purchase a house in the area he wants to live in. If he has stock options, we would consider making him a loan so that he can exercise those options at the right time. If he has equity in his house, then we can give him a line of credit so that he can pursue viable investment opportunities. That’s what I mean by customized services rather than set products that people can fit in a box.
How do loans collateralized by securities work?
If customers have a portfolio that is being managed by a brokerage firm, instead of liquidating their portfolio, they can bring it to us. We have the capability to manage their portfolio and can use the securities as collateral so they don’t have to sell their assets, but they can draw cash from their holdings. In today’s market, which is so volatile, people don’t want to sell their securities outright. This is a very bad time to sell anything. By using securities as collateral, we can give customers a line of credit that is very flexible and can be used to purchase other assets or to make additional investments.
What factors do you consider when making loans to individuals?
We don’t just look at such factors as how much you made last year or how much you averaged during the past three to five years. We look at who the individual is, the total relationship between the individual and the company that is banking with us and what the likelihood is that the individual can pay us back. The collateral is secondary. The individuals are the most important factor: their integrity, their track record and their relationship with us.
How do individuals qualify for private banking lending options?
With many banks, you must have at least $5 million in liquidity before you qualify for private banking, while other banks focus on the individual. Many of our clients have put their cash back into their companies or used it to make investments. For example, if clients have built their business, owned it for more than 10 years, have a lot of equity in the business and we have a long-term relationship with them, then we will make sure they have a private banking relationship and all related services, including lending.
How important is it to work with a private banking partner that offers customized solutions?
It’s very important to the bank as well as the individual because, in addition to lending, banks also provide other services, such as:
- Cash/debt management
- Education funding
- Stock-option analysis
- Life and disability insurance analysis
- Investment plan review
- Retirement planning
- Estate planning
- Charitable giving
By establishing trust and a meaningful understanding of clients’ needs, banks can offer customized solutions. These services are as important as how much money a client can borrow because, without good planning, the money you make may not be passed on to your heirs, and you may be paying more taxes than you should. Private banking involves all of the services combined, not just the lending side.
What role do relationships play in private banking?
The best referrals I have are from existing clients because they have friends who may need the same types of services. They want to make sure that their friends are well taken care of. A private banker should focus on two things: providing solutions and maintaining trust. It is all about relationships.
NGA NGUYEN is vice president, Wealth & Institutional Management, in Comerica Bank’s Western Market. Reach her at (619) 652-5744 or firstname.lastname@example.org.
Many executives offer their expertise to the community by serving on the boards of nonprofit organizations.
While CEOs might be skilled and experienced with board interface from their responsibilities as chief executives, a different level of expertise is required when the roles are reversed and CEOs find themselves sitting in a board member’s chair.
“It’s important that board members understand their respective roles,” says Greg Moser, partner with Procopio, Cory, Hargreaves & Savitch LLP. “It isn’t unusual to find that board members, particularly in nonprofit organizations, have no previous board experience, so they need to be trained and educated to make sure they know how to support management and execute their roles as policymakers and don’t become micromanagers. In addition, board members have fiduciary responsibilities and the potential for personal liability, so it’s vital to understand both your role and your responsibilities when serving as a board member.”
Smart Business spoke with Moser about how nonprofit board members should support management and execute their roles and responsibilities.
What constitutes a board member’s fiduciary responsibilities?
The fiduciary duties of a nonprofit director are the duties of care, loyalty and financial oversight. Breaching any of those duties can subject the nonprofit board member, even an unpaid volunteer, to personal financial liability. Most commonly, an ex-employee or third party with a claim against the corporation will name directors in their suits. Directors will generally have immunity and be entitled to indemnification from the corporation as well as defense from their directors’ and officers’ liability insurer, unless they have breached one of their duties.
While there are no shareholder suits, oversight of nonprofits is provided by the state attorney general and often the nonprofit’s parent organization. Additionally, the nonprofit corporation can pursue individual board members who have violated their fiduciary duties.
What are the board member’s primary roles and responsibilities?
Board members are accountable for selecting auditors, overseeing the compensation of the organization’s executives and making strategic decisions, such as decisions to expand the organization either by acquisition or by devoting time and resources to a new service offering. In larger nonprofits, it’s the responsibility of the board to establish a compensation committee as part of their fiduciary responsibilities. The duty of loyalty includes both an obligation to keep proprietary information confidential and to avoid conflicts of interest. Board members also play a key role in labor-management relations by setting the tone and the philosophy for approaching employee relations and how the organization will be positioned in the marketplace relative to similar organizations, which has a profound impact on employee turnover.
How can board members support the organization’s management team?
The board should help decide the strategic direction of the organization, while the business plan should be crafted by the management team. By conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats, the board can provide an outside view of the organization and help management decide where to take the organization in an effort to optimize its strengths and minimize its weaknesses. Besides having the benefit of knowing how the organization is perceived externally, board members are often the best source for new board members, and having those recommendations come from the board reduces conflict of interest concerns for management. Board members should hold management accountable for the execution of the plan, but they should not be involved in the details.
How can board members get the requisite training?
Initial training for new board members should be conducted by management, who will provide an orientation, a tour of the facility and a general overview of board duties as well as the goals and history of the organization.
Retreats offer an ideal setting to conduct in-depth board member training and to work on the strategic plan. High-functioning boards will use an outside facilitator and take the opportunity afforded by the retreat to build relationships and to set expectations of one another because regular board meetings generally aren’t conducive to this type of interface. Boards should use information from the SWOT analysis to conduct crisis management and contingency planning, which might be required to survive unanticipated changes, such as a major cut in funding. The strength of the board really shows through when they are faced with a crisis and are called upon to lead the organization through difficult times. If the board has merely been rubber stamping things and going through the motions, it won’t be effective under crisis conditions. If the board members trust one another, understand their roles and can work together as a team, they’ll be able to lead the organization through any challenge.
GREG MOSER is a partner with Procopio, Cory, Hargreaves & Savitch LLP, advising a wide variety of nonprofit organizations, including hospitals, schools, and other charitable organizations and foundations. Reach him at (619) 515-3208 or email@example.com.
Many business owners use an insurance broker for buying commercial insurance. While business owners may feel secure knowing that their business is covered, the litmus test of a policy’s adequacy is when a claim is filed.
But how does a business owner tell one insurance broker’s services from the next? They may end up basing their decisions exclusively on price or an attractive package deal.
“Insurance is often treated like a commodity, but selecting an insurance broker should be done with the same care as selecting an accountant, banker or attorney,” says Rob Kempa, a commercial insurance broker with Westland Insurance Brokers with offices in Irvine, San Diego and Temecula.
Smart Business spoke with Kempa about tips on how a business owner can determine if an insurance broker is good fit for his or her business.
What are the hallmarks of a good insurance broker?
At the very least, an insurance broker should assess your risks, tailor an insurance program that will protect those risks and provide recommendations to improve the insurance program to transfer the risk via risk management processes that include buying an insurance policy.
Insurance brokers that go above and beyond these basics are a true asset to a business owner.
What are some of the things that make an insurance broker stand out from the pack?
A good insurance broker will help business owners consider risks that they would not normally consider and help them foresee problems that could jeopardize the company in the future.
Clients ought to expect that an insurance broker behave like an attorney, a banker or another trusted adviser rather than simply a salesperson.
A good insurance broker is often very involved in advising clients on the ever-changing landscape of insurance trends, policy and coverage changes. A good broker should also make sure that clients are in compliance with ever-changing laws and regulations, so that if a business is inspected everything will be in order. The broker can achieve this by hosting seminars and workshops within the client’s company about pressing issues, such as compliance with OSHA and reviewing a company’s safety programs.
A good insurance broker can also communicate with clients through e-mail or a newsletter about insurance issues that can affect businesses.
What are some red flags that a business owner should be aware of when selecting an insurance broker?
Beware of insurance brokers that emphasize only price and savings. While you may save money in the short-term, the premium savings can be eradicated if there is ever a claim not covered due to a gap in coverage.
Also, be wary of brokers who do not have experience insuring companies that are similar to yours. Brokers or the insurance companies they represent need to understand the industry that you are in if they are to completely understand all the risks that need to be covered.
Do not take a cookie-cutter proposal. Make sure that the broker has analyzed your business and is giving you custom-designed services.
Lastly, make sure that the insurance brokerage firm you select has adequate resources to properly manage your account. Make sure the broker has a highly qualified staff to support your servicing needs. The broker should represent many high-quality carriers that can support your company in the ever-changing marketplace.
What are some tips when seeking a good insurance broker?
Get recommendations from your other trusted advisers, your business associates, friends or your chamber of commerce.
Interview at least two to three prospective brokers, similar to the way you would interview a prospective employee. Research the history of the broker.
Make sure the insurance broker has experience insuring a company in your industry. How long has he or she been a broker?
Make sure that the broker is not acting as just a salesperson, but takes on the responsibility of becoming your risk manager and insurance adviser.
Do not make your decision based on price alone, but ask the broker to provide a line-by-line assessment of the coverage so that you can easily review and compare with other brokers.
Ask for references and a list of clients, and call them.
Make sure the carriers the broker is presenting are A-rated AM Best carriers. This can easily be checked by visiting www.ambest.com.
Make sure the broker can provide full brokerage services not only property and casualty insurance but also employee benefit, personal lines and safety management. By selecting a full-service broker, this will give you the convenience of working with one firm rather than many.
ROB KEMPA is a commercial insurance broker with Westland Insurance Brokers (www.westlandib.com), a full-service commercial and group insurance company with offices in Irvine, San Diego and Temecula. Reach Kempa at firstname.lastname@example.org or (619) 584-6400, x3216.
Bruce Geier has achieved a milestone reached by few other founders in the technology industry his company has turned a profit every year for 26 consecutive years. In an industry that has been through more cycles than a dishwasher, Geier, president and CEO of Technology Integration Group, has outperformed and outlasted most of his competitors.
Although the company is classified as a minority-owned, small, disadvantaged business, it’s Geier’s opponents who may be at a disadvantage when they compete against him, mostly because of his balanced decision-making.
“I credit much of our success to our diversified business model,” Geier says. “It hasn’t always been easy. In the beginning, I was developing software, but people wanted hardware more than software, so I had to learn about hardware. When hardware margins fell, having revenue from services got us through. Over the years, we’ve offered a multitude of different technologies, and we’ve continued to evolve because we constantly have to find a way to get our solutions in front of the right audience.”
In 1981, Geier left a budding career as a tax and litigation consultant for a big eight accounting firm to risk it all in the burgeoning computer industry. As a computer science major, Geier could-n’t resist the urge to develop software in his garage when things were slow in the consulting business. He decided to pursue his strong premonition that computers would change the business world and launched the company. Since that time, TIG, which primarily provides IT solutions to the government as well as small and mid-size businesses, has grown to 19 branch offices, 325 employees and 2006 revenue of $281 million.
Here’s how Geier has conquered some of the biggest challenges facing his company to take it to new levels of success.
Create a winning plan
Success starts with a winning plan. “I think we’ve had a better business plan than our competitors,” Geier says. “It’s like an investment portfolio: You have to diversify and have a balanced approach that’s what I’ve learned.”
Geier began offering a portfolio of technology services to clients long before most of the technology industry realized that margins on traditional hardware and software products were slipping. Consulting, programming and integration services not only offered value to customers, the services provided a way to improve margins and stabilize revenue during down cycles.
“Our goal is to sell multiple solutions to one customer,” Geier says. “I don’t favor jumping on the bandwagon too early because if the technology doesn’t catch on or becomes obsolete too quickly, you will alienate your customers. I say that I prefer to be on the leading edge not the bleeding edge of technology.”
To decide what new products and services the company should offer to clients and to support his middle-ground business offering philosophy, Geier regularly devotes time to evaluating emerging technology. He meets with the company’s practice leaders each month to review new offerings. One of the outcomes from the meeting is the development of a list of new products that might interest customers, while still meeting Geier’s criteria of providing staying power for the customer’s investment in the ever-changing technology marketplace.
“I think it’s important to have interplay between all of the team members when you make your decisions about what you want to offer customers because as the CEO, you have to get the opinions of the smart people around you,” Geier says. “You can’t be an expert on everything so you must rely on others.
“If we reach consensus as a group, then we move forward; if there’s disagreement, I like to handle those discussions through one-off conversations with the dissenting practice leader. Having a lot of conflict out in the open doesn’t do anyone any good because when people are upset, they can’t focus on work. As the CEO, you can set that tone by handling issues that arise off the record.”
Next Geier validates his team’s recommendations via direct customer input. TIG hosts vendor-led seminars for customers throughout the year that feature emerging technology. Geier uses seminar enrollment as a gauge of market interest in any new technology. Taking the additional step of validating the company’s offerings through clients keeps the new technology selections on target with customer appetites, and it reinforces Geier’s main value proposition for customers he won’t recommend an unproven technology solution.
Encourage staff participation
Geier authors an annual budget and a business plan that establishes revenue goals for each type of product and service the company sells. Because of wide variances in the margins for each product and service, this type of detailed revenue planning maintains the firm’s profitability by achieving a blended margin that avoids the industry’s extremes. In addition, his plan projects a reasonable revenue growth percentage for the company each year.
Geier says that he favors measured growth as a way of keeping debt under control and reducing risk.
“I start with the VP of sales and I define the desired mix of business for the year, which gives us a blended margin for the total business portfolio,” Geier says. “From there, we transfer the desired mix of business down through the sales organization, which includes the branch managers, and then finally, we roll revenue targets down to each sales rep. This ensures that each person on the team has personal responsibility for achieving the corporate goal, and it makes it very clear what services we need to sell to be profitable.”
As reinforcement, Geier offers bonuses to managers and additional perks to the sales staff for hitting the targeted revenue goals that are specified in the business plan. For example, sales reps earn the opportunity to stay in a suite at the company’s annual president’s club achievement trip to Hawaii as an incentive for selling the right mix of business.
As a final step in reinforcing his revenue goals, Geier holds meetings each year for the firm’s sales, engineering and branch management groups, using the venue to roll out the company’s annual initiatives around business mix. The employee events actually serve dual purposes. Geier expresses his appreciation for the efforts of his team while connecting with the staff in person, and he also uses the time to get everyone behind the company business plan and the revenue goals for the year.
“As the leader, you have to achieve buy-in for your plan, and the key is that everyone has to understand their part and why you’ve made your decisions,” Geier says. “Our people can articulate our value proposition very clearly to customers, and we achieve our business plan because the staff understands it. They know that their performance is vital because they get a chance to hear the plan in person and ask questions. In addition, they are highly motivated by the incentives, which provide just one more step in assuring the results.”
Focus on retention
Geier’s success is also a result of another technology industry anomaly: His employees don’t often leave the company.
“We’ve changed our sales compensation plan only once in 26 years,” Geier says. “We haven’t lost a top sales rep in 15 years. To keep people, you’ve got to create a sense of pride within the staff, and to do that, you have to have a comfortable work environment. In some companies, people just get comfortable, and then management changes the rules by changing the comp plan. To me that’s just not a smart business decision.”
Geier says that 70 to 80 percent of the company’s total work force receives incentives through bonus plans, including the engineers and the collections staff. Allowing employees to have skin in the game also contributes to a sense of ownership throughout the company.
“I think it’s important to offer financial incentives to employees because it encourages the staff to take ownership and have some personal pride in the results,” Geier says. “You want to create a company culture that has an element of pride, and that culture will help you attract the kind of people who take pride in their work.”
Employees are invited to fun activities, like a bowling night, because it contributes toward a family atmosphere and helps people feel like owners.
“If I truly knew the secret to hiring great people, I would have retired long ago,” Geier says. “Anyone who tells you that they always make great hires is not being truthful, but I have always favored hiring a more experienced person who can step right into the position and hit the ground running. Even though we pay a premium for experience, I think the clients prefer working with someone with experience, and more experienced staff are definitely more productive when they work on projects.”
Geier also tries to find the seam between being overstaffed or understaffed when it comes to hiring decisions. That management-middle-ground hiring philosophy allows Geier to hire proactively while avoiding the burden of taking on overhead too quickly.
“I’m generally not of the mentality of ‘build it and they will come’ when it comes to hiring,” Geier says. “My mentality is more of a just-in-time approach to hiring.”
To achieve his goal, Geier establishes hiring priorities by position allowing a green light to new staff additions that can generate revenue and more careful scrutiny for additional head count in areas that represents overhead.
“I would hire any qualified sales executive at any location at any time provided they fit within our pay structure and don’t have any noncompete restrictions,” Geier says. “The same is true for certain types of engineers. That need is established by the senior management of the engineering group, and it’s often predicated by the needs of manufacturer partners or customers.
“I believe that if you make your underlings cost-substantiate any new hire, much of the decision to hire or not is pretty obvious. So what you really need is a good internal structure to evaluate their needs and justify those needs. I balance the decision by position and based upon the current utilization review by branch, especially as it relates to engineers.”
No matter what the challenge, it’s always a matter of spreading the risk whenever possible.
“Over the years, I’ve seen a lot of talented people leave the business because they didn’t spread out their risk but spread out their business,” Geier says. “When the technology bubble burst in 2001 and the hardware and software business went away, the services business pulled us through. I truly believe in a balanced portfolio, measured growth and that you have to be in the right place at the right time to achieve success.” <<
HOW TO REACH: Technology Integration Group, www.tig.com
Today’s spotlight on business speed and agility is magnifying the shortcomings and frequency of poorly executed change initiatives. The truth is that nearly 70 percent of all change implementations never bear fruit. There are many documented reasons why change initiatives fail.
“Often, the people leading the change think that announcing change is the same as implementing it, so they don’t pay attention,” says Patricia Zigarmi, Ed.D., organizational change expert and Founding Associate of The Ken Blanchard Companies. “They don’t surface people’s concerns regarding change.”
Smart Business spoke with Zigarmi about how change elements are predictable and why leaders of successful change initiatives involve a broad-based team to address employee concerns on the front end.
Why do change efforts fail?
A big reason why change efforts fail is leaders often don’t surface people’s concerns. The immediate reaction when people are asked to change is, ‘What am I going to give up?’ They’re talking to each other about those concerns but not to the change sponsors. Leaders need to eavesdrop on the conversations about concerns people are having. Another big reason change fails is because the people who are asked to change are not involved in the planning for it. These employees feel closest to the customer, the work processes and the problems at hand, and they want to influence the changes that are being architected at the top.
Some initiatives fail when there is no communicated sense of urgency or when the business case for the change isn’t made clear. People need to see a gap between the what-is and the what’s-possible. People are smart if you help them understand the change from the standpoint of the person deciding the change, they’ll come to the same conclusions about compelling reasons to change. Other factors for failure include misaligned systems within the company and change leaders who are not credible or trustworthy.
Are there predictable reactions to change?
Absolutely. People have predictable and sequential concerns with change. In the 1980s, I worked on a study to find out why a set of educational initiatives tested extremely well, but when they were rolled out, they didn’t achieve results on a mass basis. What we found out was that nobody had surfaced the concerns of the teachers with regard to the changes. We created a model and ended up proving in subsequent change efforts that reactions to change are indeed predictable and sequential.
How can change leaders apply this model?
The model delineated six buckets of concerns with change, and if leaders would only pay attention to the first three, the rest of the change would take care of itself. The first bucket is around information concerns. People don’t want to be sold on the change. They want to know what it is, what you are seeing and why things have to change. The second bucket involves personal concerns. They’re the most ignored because they sound like whining, but what they really are, are clues about resistance to the proposed change. People don’t want to know why the change is good for the company; they want to know why it’s good for them, and they want to know if they will be able to master the new skills the change requires. The third bucket is around the nitty-gritty implementation concerns like system alignment, best practices and the daily mechanics of making the change happen.
The remaining buckets of concern are impact concerns does the change make a difference; collaboration concerns who else needs to be on board; and refinement concerns what’s even better than what you’re doing right now?
How can leaders best communicate change?
I think the minute people sense a crack in senior leadership support for the change, they think they don’t have to get on board, or they believe they can wait around and see what happens. It’s really important for dialogue to happen around the change, at the top. What is the compelling case? What is the vision? What is the picture of the future if this change were to be successfully implemented?
The real need here is for leaders to speak with one voice, to communicate the same message, no matter who is communicating. Leaders must explain the priority of a change against all the other initiatives going on in the company. Leaders also should express trust and confidence in the decisions of their colleagues because if that doesn’t happen, the change is doomed from the front end.
What are the key steps to a successful change initiative?
Top-down change efforts appear to get off to a faster start, but many times, the reality is all of the details aren’t thought out and ultimately the change doesn’t get implemented. Leaders need to listen to people’s concerns and find ways to address them. They need to create a compelling business case and expand involvement and influence to gain the buy-in of those impacted by the change at all phases of the change process. A high-involvement, collaborative change effort dramatically increases the probability of a successful change initiative. <<
PATRICIA ZIGARMI, Ed.D., is an organizational change expert and Founding Associate of The Ken Blanchard Companies, a global leader in workplace learning, productivity, performance and leadership effectiveness. She can be reached through The Ken Blanchard Companies Web site at www.kenblanchard.com/patzigarmi.
Before employees can work toward a common vision, they have to be able to work with each other, says Bob Kelly. That’s a key reason why employees at The San Diego Foundation are randomly dispersed through the office, says the president and CEO. A finance person sits next to a marketing person, whose cubicle could be right next to an administrative assistant. That way, employees get a better sense of the different roles required for the organization to be successful. The formula has helped the philanthropic organization grow to $105 million in annual revenue, with 50 employees and 300 volunteers. Smart Business spoke with Kelly about why you need to plan your trip before you actually go to the moon.
Focus on execution. You can have a great vision and a great dream, but if you don’t put together a team that can help develop the strategy and you don’t spend time ensuring execution, everything is going to fall apart.
Successful people are the ones who have great vision and great execution skills. The execution skills get into making sure you set performance goals, manage to those performance goals and organize the organization around what you are trying to accomplish.
It’s all about having clear and measurable results. A lot of places fall apart because of the lack of execution.
Listen to your people. I spend a lot of time talking to the staff and to potential customers, just listening to what they care about and what they think. Over a period of time, it kind of evolves and comes together.
After listening to everybody, it’s the CEO’s job to really articulate what that vision should and could be. It takes time. Read about what’s changing in the environment and what is changing about customers.
And not just in my business, but what’s happening in every other business. It opens your mind to new ideas.
Give your vision some color. If the vision is inspirational, people will be motivated to rally around it and be motivated to work on it. Come up with a vision or a story that is simple and easy to understand and easy to explain.
If people can understand it, they can feel it, they can touch it and they can measure the success without too much effort. They have to be able to simply understand it and be able to see the steps to success.
I’m sure John F. Kennedy, when he said we’re going to the moon, he didn’t just show up on Thursday and say, ‘Hey, we’re going to the moon.’
I guarantee he was talking to scientists and rocket engineers and all the information was put into his brain and he said, ‘You know what, we need to get the United States moving into the next century.’
Have a common goal that everybody can rally around that is challenging but inspirational and one where if we work hard enough, it is doable.
Define individual roles. Everybody needs to have a piece of the action, and everybody needs to feel that they are engaged in it. They all need to take pride that their one little part is going to make the iPhone incredible.
A good leader really makes sure everybody knows how they fit in to the big picture and how important it is for them to do their job really well. Reward everybody not on individual performance but on how the total organization has gotten to the vision you’re trying to accomplish.
We have all-staff meetings, and we have a thing called ‘kudos.’ We recognize somebody for what they have done toward what we’re trying to accomplish. What we try to encourage is everybody recognizing the contribution of everybody else.
Bring people together. We have departments on a piece of paper. We have no departments in our organization. The finance people don’t sit with the finance people. They are scattered through the whole organization. A finance person could be sitting right next to the marketing person who is sitting next to the administrative assistant. Everybody is working together.
Everybody has to get up and walk around and talk to each other. Their cubicle mate is working on investments, and they are working on the newsletter. Everybody has to work with everybody. It really encourages teamwork and cross communication.
They can’t be in their own world and do their job. They have to work with everybody else and appreciate what they do because they hear what they do and they see what they do.
Integrate new employees. When they first come on board for the first two weeks, they don’t do anything with their job.
We have them go on a scavenger hunt. They have like 15 pages in their book, and they have to go talk to somebody in marketing and ask them about this, this and this and see if they can figure out how a newsletter is produced.
Then they may go to investments, and the thing is to find the investment reports and calculate the rate of return that we have earned on our investments over the past 10 years. Here they are sitting down going over investment reports trying to calculate out the investment return.
We ask, ‘Who would you go to, to find out how to order letterhead?’ We don’t give them the answer. They have to go to different departments and find out who is responsible for letterhead. At the end, they have a test, and if they don’t get all of the answers right, they have to go find all the answers.
It’s fun, interesting, challenging and it gives them an overall perspective of the organization.
Be a moral leader. Employees will respect the hell out of you. And customers will respect the hell out of you.
Employees, they know if you’re going to do something immoral or unethical or illegal. They lose motivation, and they lose the respect that you need as a CEO for them to follow your vision. You cannot disappoint your staff.
You start messing around with morals and values, you start losing the respect of your staff. Over time, things are going to fall apart. It undermines the leader’s ability to lead. It’s just not worth it.
HOW TO REACH: The San Diego Foundation, (619) 235-2300 or www.sdfoundation.org