Jerry Kline Featured

7:00pm EDT December 26, 2007

Jerry Kline is the kind of guy who loves to promote people who work for him, but he also likes to hire new people into those positions. It sounds contradictory, but not to Kline, chairman and CEO of Innovative Interfaces Inc. Kline, who built the $70 million integrated library system company from the ground up, appreciates the history his current employees carry, but he also understands that new employees can bring fresh ideas to the table. By working hard to retain a large core of employees while occasionally peppering the mix with fresh faces, he keeps his 310 employees motivated with a path to promotion while working to carve out new challenges. Smart Business spoke with Kline about how to balance your hiring system and why sometimes you just have to let someone go.

Balance the hiring of internal and external people.

I believe in hiring from within where we can. We’ve been able to retain bright people, keep them motivated and give them a path. In our industry, where we are evolving, having the history and knowing why we made past decisions is very helpful.

But it’s also important to bring people in from the outside for fresh ideas. Just because we’ve been doing things a certain way doesn’t mean it’s the best way to go forward. So both are important.

When you’re looking at each situation, we can always bring in people from the outside, so if there is a chance someone can step up internally, we tend to default to that. If we see there is someone who clearly can do the job or deserves a chance to do it, then that’s what we do.

Seeing that there are people who have been here a long time sets an example for everyone. I see way too much turnover in IT companies, and as a customer to other IT companies, seeing new reps and policies all the time can be really disruptive. From that angle, retention and consistency are important.

Still, sometimes we have to bring in somebody new because there is no clear-cut inner hire — and that’s when we do it. So start by asking the question, ‘Is there somebody within the organization that fits this job so we don’t have to train someone?

Hire for retention. We’re looking for people who want to be here for a while. We are looking for people who are not trying to do a hit-and-run.

You have to look at their history — have they always bounced around every two years or had they been somewhere a long time, and then maybe hit a few situations where it wasn’t working? We have a lot of people here who are perceptive and can understand that you look at people’s situations and figure out what they’re likely to do. For example, are they tied to the area, or are they just moving in and moving out?

I learn things about this company every day, so certainly somebody who has been here for a year is still at a point where they are learning a heck of a lot. Somebody that’s been here two years is just starting to really give us the return, so if they’re jumping ship that quickly, that’s not so great.

Go ahead and delegate. The challenge for me was learning where I should stay involved and where I bring the right people in to let them go. Going from a one-person, two-person, 10-person company to 300-plus employees, you find out that if you’re going to lead, it has to be a different kind of leadership.

In most places, I turn things over to people who can run the day-to-day operations without me, and I get more involved in areas where I can make a difference. You can’t do everything when you’re mediumsized, and when you’re coming from somewhere where you were very small, you probably did do everything.

But you learn from your mistakes, you learn that if you are going to be directing every decision, then every decision is going to come to you, and your directors will start turning to you for everything, and you don’t want that — and can’t do it, frankly. You learn that if you’re going to grow, you need to turn over the leadership on a lot of things to other people and, even if it’s not exactly as you would do, you have trust in them.

Set the standard for your employees. I’m actively involved in the company every day, talking with our employees and customers, and that keeps me knowledgeable about what is going on.

My interest, excitement and passion for what we are doing helps keep them motivated. It lets them know that this is interesting stuff, it’s applicable and touches many people. Showing that enthusiasm for what we do, and coming in and talking to customers and talking to the staff here, makes me knowledgeable to a deep level where I can talk about where we’re going, and that helps.

Have front-line employees help you evolve.

Talking to your people that are out-front every day is important, I don’t know a better way to keep on top of it. Having working executives here in the office as my decision-makers — the ones who are talking to our customers on a day-to-day basis — and allowing them to shape our direction based on those conversations is really important.

I watch companies where decisions are made at a board of director’s level, where they may not even understand the business, and that’s one way to go, but I don’t think it’s the best way.

Having the people who are making these decisions working here every day, saying, ‘This is going to work for the next while, but we need something new next year,’ and trying to make those decisions of what we can start changing next month, that’s the key to staying ahead. It’s more than sitting down and talking at a high level about where the company needs to be in five years; it’s knowing that the company needs to be different every year and, even without knowing exactly what that means, having those people in the front in positions where they can quickly make the decisions when they see what changes have to be made.

HOW TO REACH: Innovative Interfaces Inc., (510) 655-6200 or www.iii.com