For Arnold Burchianti II, business in the past 10 years has been good. Burchianti, founder, president and CEO of Celtic Healthcare, a home health care and hospice provider, has been focused on growing his business through strategic planning and keeping his 450 employees engaged.
That engagement and strategic planning have helped the company reach 2010 revenue of $45 million and has allowed Celtic Healthcare to stay nimble and adaptable in an industry that is always changing.
“When cuts and changes have occurred, which they do quite frequently in the world of Medicare and home health care, you operationalize and try and maximize your efficiencies as best you can,” Burchianti says. “Along that journey it’s been a lot of engaging the work force in alignment with the type of strategy and tactics that we had.”
The company has continued to thrive because everyone at Celtic works for the betterment of the business.
Smart Business spoke to Burchianti about how he keeps his work force engaged and strategically aligned.
Be honest and open. We’re pretty transparent with our employees. Short of issuing a P&L and balance sheet to a nurse who won’t understand it, we give them everything we can. We try and paint that picture and get them to really understand how and why as leaders we’re doing the things that we’re doing.
We go in and show them our overhead costs, the leadership’s wages and costs according to benchmarking data that we get from cost reports and we put it out there. By really engaging the work force as to what’s going on in the industry through benchmarking data, comparing us to them and showing them where we need to improve and why we need to improve for sustainability, it makes it a little easier when you walk in and show them the facts.
Are they always happy with our decisions? Hell no, but as a leader you have to engage them and you have to be transparent. You have to let them know why you’re doing stuff so they can trust you. That’s the fundamentals of great leadership. You’ve got to get people to be engaged, to trust you and be transparent.
Understand your culture. I believe you need to come up with strategies to engage your employees and one of the best ways to do that is to take a look at the cultural health of your organization. We do these cultural tests and we pay a lot of money for it, but its well worth it. I could tell you twice a year exactly what my top three things are for corporate health and culture.
It’s easy to get baselines on your financials, on your marks, on many legislative things, on your turnover rate, but getting an objective read on culture, you can’t just go into a room and ask somebody, because they’re not always going to tell you the truth. As a leader or CEO, you can’t listen to your VPs and people around you all the time, because sometimes those people are micro-managers and they just hear what they want to hear. You as a leader need to go transcend beyond that and most of us don’t have the ability to do it ourselves. You need to bring someone in at least every few years to run these types of exercises. I’m not saying bring someone in to train and make things better; you’ve got to understand what the issue is first.
Once you’ve heard and gained the information, then you tell them that you heard them and tell them what you’re going to do. Let them know where the progress is. It’s really an art of engaging your employees and making sure you understand the health of your culture. If your people aren’t engaged and you’ve got to make a change because of a market or legislative issue, good luck, because a company like Celtic is going to beat you there 500 times faster, because we can move quicker. The small and the fast always eat the big guys’ lunch.
Form a plan. The No. 1 thing is proper strategic planning. That means making sure you understand your values and that you understand what is the single most important priority that your organization has to accomplish for your vision and mission. You have to make sure you understand what your values are, because that lays out what your strategy is going to be and what’s important to you and keeps you from chasing 9 million different facets.
Once you understand what that vision or mission statement is then … you’ve got to get your work force engaged or at least your leadership engaged and you need to be meeting with them in some cases daily or weekly. You’ve got to make sure when they wake up in the morning they are thinking about that. That’s where people fail; they’re chasing a lot of different ideas, they’re putting out fires and everyone thinks within their own division what they’re working on is their priority. Everyone needs to be aligned with that single most important corporate goal.
HOW TO REACH: Celtic Healthcare, (800) 355-8894 or www.celtichealthcare.com
Over the past few years, John Foster’s clients have not been embracing the conventional approach to the way his company does business, and its sales and backlog have been dropping below forecasts because of it.
Foster, president and CEO of Coutinho & Ferrostaal Inc. North America, a division of Coutinho & Ferrostaal, one of the largest independent steel trading companies in the world, had to make a choice when the recession hit in 2008. The company could wait to see what became of the economy and its customer’s reactions to it, or it could adapt to the changes and position itself for the foreseeable future.
No matter what the decision, the more than $500 million division could no longer survive doing business as usual. Foster chose to shake things up to regain confidence and trust from the business’s customers.
“My focus and challenge has been on re-engineering the mindset of a well seasoned but cognitively well entrenched team of professionals and a back-to-back trading philosophy,” Foster says. “Moreover, set the challenge to go beyond what has been the tried and true commercial formula of the steel trading business for literally decades and now embrace the already re-engineered mindset of our customer base that has changed significantly over the past 10 years.”
Coutinho & Ferrostaal had to switch from being a principal in a global steel transaction to becoming more of a value-added service partner for its customers.
Here’s how Foster took on the challenge of embracing a re-engineered mindset of the company’s customers in order to survive.
Shake up your comfort zone
In today’s business environment, it would be a tough task to find many businesses or industries that haven’t had to change critical ways in which they operate because of new market dynamics. The steel trading industry is no exception.
“The fundamental reasons such change was necessary are found in the fact that the traditional landscape of the trading model, although not obsolete by any means, had changed, and if new avenues of value and commerce were not found, embraced and expanded upon, our company would not only not grow, but fall badly behind the curve of creative innovation that our trade partners have come to expect from our organization,” Foster says. “This meant initiating some monumental change to meet some monumental challenges and where business as usual was not going to cut it.”
The needs of Coutinho & Ferrostaal’s clients have been changing since the explosion of the internet and were altered again when the Great Recession hit. Foster had to help his team understand that their customer’s financial and risk management needs had changed dramatically.
“With the advent of the Internet into our business as well as the proliferation of mass information media start-ups, our customers, vendors and most importantly our competitors knew most of what was happening in the globalized steel world the same moment we did,” Foster says. “The other important and more recent change dynamic that needed to be addressed was the dramatic alteration in how our customers and supply partners evaluated risk and coped with financial stress in light of the varying degrees of corporate trauma that ensued since mid-2008.”
This loss of a particular competitive advantage forced Foster and his employees to bring other value to the daily transaction equation. As is the case with many crisis situations, opportunities can be found. The challenge here was to take the team out of its comfort zone of traditional business and start listening much more closely to trade partners who were no longer interested in going offshore for steel, but rather turning to domestic supply.
“After all those years of having the ball in your hand for the customers needs and then almost overnight they said, ‘I’m not going to buy your futures anymore … I’d rather buy from you, but you have to have it here for me,’” Foster says. “So right there was a pretty big sea change in how we do our business, going from two-, three- or four-month futures to a just-in-time type of approach.”
To get his team on the same page, Foster had to sit down and lay out the situation in order to understand where to go.
“We sat down with the rest of our department heads and asked, ‘How are we going to manage this? How are we going to meet these needs? These are things we haven’t done before. What are our risk guidelines?’” Foster says. “As a global company, we literally had to redo our risk guidelines. If you’re too conservative, you’re not going to survive. We had to use our professional expertise and change our risk guidelines to align ourselves with customer needs.”
In situations like these, you can never communicate too much.
“You just really need to explain it to them in very clear terms,” he says. “This is what we’re going to need to do to get back to where we were. By just putting up simple pictures, you really impress upon people. I like to get the group together and say, ‘Here’s where our performance has been the last three years. Here’s the event that happened. This is the effect it had upon us. These are our forecasts and we’re having trouble getting there because what worked for all these past years is not working.’
It was really quite a revelation to bring everybody into the mix and say, ‘This is the challenge we have and this is what we’re being told to do. How can you help do it?’ It’s just listening and communicating it to the entire corporation.”
The changes in the steel trading market were happening quickly and Foster and his team had to do everything they could to keep up and find out what the company could do to meet the new needs.
“Budgets were revamped and cost-cutting measures were initiated,” Foster says. “Because of the speed of the market retraction however, we found ourselves being in more of a reactive mode than a proactive one. This was when we readily saw the need to pool the brain trust of our key leaders from the financial, logistics and commercial sectors of our company and turn ourselves into a more proactive direction and highlight as many creative options as we could to generate positive business.”
These options primarily revolved around financial services and expanded risk-management models. However, they quickly recognized a key element was missing.
“That element was feedback from our many trade partners as to what they now need to meet their own particular set of challenges,” he says. “It was here that our own change model began to form. Moreover, it saw us moving from that initiating principal role to a better listening and more value rich service partner in our thinking.”
If Foster wanted to find out what direction to go in, he would need to go directly to customers for the answers.
“We went back to these customers and said, ‘Look, you have concerns about inventory management, we can help you do that. You want just-in-time inventory, we can help you do that.’” Foster says. “We have stepped in the middle of domestic suppliers and our customer base, which has never happened in the history of our business, and it’s just a new dynamic.”
It is crucial that you get input from both customers and employees when looking for a new direction.
“I would emphasize stepping back in times of such crisis and reminding yourself of the ever-important need to listen to the boots-on-the-ground team members while mandating the need for them to do the same with their customers and trade partners,” Foster says. “It is only through keen listening that the seeds of expanded thinking and creativity are found.”
Such listening skills must also be encouraged throughout the organization.
“No discipline of the organization can be comfortable with business as usual,” he says. “Even such stoic departments as accounting and human resources need to be given the nod that it is OK to embrace change and question what has been company policy and standards. This is one of the other keys to our implementing change initiatives—not only keen listening skills to understand what needs to be done, but encouraging a corporate culture that feels both comfortable as well as empowered to implement those changes that are viewed as positive directions for the company.”
Now that it had been established the company would need to more of a strategic partner for its customers, Foster had to get complete buy-in for the new direction.
“Buy-in can be said to be grounded in mutual respect and trust for each other’s expertise and shared vision for the company,” he says. “This is a dynamic that is not built overnight, but over years of team building and shared goal setting, albeit not always in full agreement. It is this team and shared information approach that helped us create an ‘OK, let’s try it’ attitude that gets the change mode moving. The need for a change is most fundamentally driven by both the short and long-term dynamics of the market place in which you participate day in and day out. Subsequently, the need for change simply becomes a logical business decision.”
Foster had to broadcast this new market fundamental in a clear, logical and business professional fashion to get an “all hands on deck” environment to be embraced.
“The buy-in was actually a little bit easier than I would have guessed because of the dynamics,” he says. “The rapid pace of the problem before us got people looking for answers. The environment was a fertile one for this type of change. By very logically and professionally putting out the downside versus upside and risk versus reward, it got there.”
It’s that focus on communication that will aid any business leader in changing directions and getting his company onboard.
“You have to get more than your usual team of players together in the same room,” Foster says. “Be careful not to insulate yourself from all levels of the company. I think there are some CEOs that aren’t very comfortable getting outside their own office and they tell their next-in-line lieutenants, ‘Here’s the deal.’ Those lieutenants take it to managers and those managers take it to their people. Things can get lost in translation. You have to put yourself out there as the leader across the whole scope of the company. If it’s a manufacturing company, get out on the floor. Talk to the workers and the guys on the machines. That’s what’s going to impress and engender change more quickly because you’re showing respect for the entire organization.”
Improve upon your success
Once you have found the new direction for your company and you see success, you have to continue to look for ways to meet customer needs.
“So far, I am quite pleased with our initiative results,” Foster says. “As could be expected, some divisions were more receptive to change than others. Change and further market conditions adaption is a constant, particularly in light of the recent Great Recession leaving a mark whose ramifications could be expected to last several more years going forward. At the same time, I am a firm believer that adversity is a catalyst for opportunity. I can say with confidence that our company has made great strides in changing the traditional way of conducting our business to one that absolutely expanded upon our inherent commercial skill sets and financial assets.”
The changes made have allowed the company to outperform its market and meet goals by breaking the molds of its traditional comfort levels.
“What we see now is the need to build upon our new orientation to change acceptance and get deeper into our customers and vendors hierarchy of needs while plying our well-honed and fundamental skill sets into related but new sectors of our industry,” he says. “In other words, apply what we know has worked well further up and down the industry’s commercial chain.”
HOW TO REACH: Coutinho & Ferrostaal Inc. North America, (281) 999-9995 or www.coutinhoferrostaal.com
- Test your company’s comfort zone areas so not to become complacent
- React to market and customer needs by listening and communicating
- Continue to improve upon the value your company can add
The Foster File
President and CEO
Coutinho & Ferrostaal Inc. North America
Education: Studied business and economics at Marietta College and got an MBA from the University of Colorado in association with the University of San Francisco.
What was your very first job, and what did that experience teach you?
I mowed lawns in the summer and shoveled snow in the winter. If you wanted to have some money for fun, you had to work for it.
What was the scariest part about the change initiatives at CFI?
That they might not work. Anytime you go into uncharted territory, you have that certain trepidation of, ‘Is this going to work?’ Is the team going to support it? Which I didn’t have much concern about, but the real concern was on the customer side because they were in more of a panic than we were. I was mostly concerned with would the marketplace accept the value-added service initiatives that we were bringing to their table.
What is the best business advice that you’ve ever received?
Be as open and honest with your business partners as you can, because most business is built on trust and that’s the only way you’re going to build the trust you need to bridge the most difficult times. Everybody can be friends in good times, but it’s the bad times that really test your trust and relationships.
What is your favorite thing about the steel trading business?
I just love to see the steel in a building that we sold or on the foundation of a truck trailer driving down the road. To see a ship unloading our imported steel and loading our exported steel because that is an important dynamic in our industry.
What is your favorite business trip location?
Brazil. They are excellent steel people and they know how to work hard and play hard, which is one of my philosophies.
G. Michael Campbell and his company MCA International LLC specialize in business transformation projects from launching or developing new products to changing organizational structure. Campbell, who is president of MCA, has seen countless project undertakings that have both ended well or turned out to be project management nightmares.
From planning and tracking to specifications, budgets and timelines, strong project management can be a very big differentiator in your company. To aid companies in project management and how to develop the best techniques, Campbell wrote his latest book, “The Idiots Guide to Project Management, Fifth Edition.”
While Campbell says that you don’t have to be a genius to run a project, you do need to understand that doing a project by following some best practices will make a world of difference.
Who would get the most out of this book?
The book is really targeted for a more experienced manager who has suddenly been handed an important business project for them to manage. They understand the importance of it and they recognize the business need, but they really don’t understand how to manage a project beyond sitting down and preparing a checklist. They’re really looking for some practical guides and some practical tips that they can apply right away to increase their chance of success on this.
What do leaders often overlook in project management?
Leaders should keep the project focused more on the business goals and objectives. You need to stop at certain points and do a recheck and say, ‘Is this project still on track to deliver the business goal that I was looking for?’ Project managers want to deliver on budget and on time and that’s good. From a leader’s perspective you want to be focusing on the business value that you were looking for. The business leader is the one that has to focus on that. Business leaders can read this book and begin to make the connection for keeping that business focus on any of their projects or initiatives.
What are common mistakes that this book addresses?
The first one is keeping the project aligned to the business objectives that where the reason the project was sanctioned in the first place. Some projects, particularly the business transformation projects, can often take two or three years to complete. The business landscape can change pretty dramatically over a two- or three-year period and one of the problems is that the project team over that period of time really didn’t adapt to the new business landscape. If they had kept abreast of changes and built those into their project, they would have been much better aligned with the business and the business goals when they finally delivered on the project.
Another one is the scope of the project. What I’m going to deliver and how it’s going to be judged is really not well-defined. When you don’t have a project with a well-defined scope, you’re really not certain what exactly you’re going to deliver and what kind of requirements it’s trying to achieve and you begin to wander around and you waste a lot of time and money bumping into walls.
The last one is just keeping your stakeholders aligned and informed with what you’re doing. Particularly in these larger projects, you have a lot of people that get impacted by the projects and making sure they’re all informed and understand and ready for it is really critical.
What is the role of senior management during a project?
The problem with senior managers in these things is typically when they’ve decided to do a project they’ve been thinking about it for a while, considering it against other options and alternatives, and once they make a decision, they’re ready to dust off their hands and move on. The fact is as a project manager, occasionally I’m going to need their help for certain kinds of business issues. Senior managers need to understand they still have a role in this when the project starts. They’re not going to be in the day-to-day operation of it, but I’ve got to be able to have them ready when I need them.
HOW TO REACH: MCA International LLC, (281) 768-8014 or www.mcaintl.com
Gregory Kenny considers himself and General Cable Corp. fortunate to have made it through the past three years of the recession. When the fourth quarter of 2008 came about, the president and CEO had the challenge of leading a business operating in an industry that had a 30 percent decline in global demand.
General Cable Corp. is a Fortune 500 manufacturer and distributor of copper, aluminum and fiber optic wire and cable products. The company employs 12,000 people and Kenny had to make sure every one of them was focused on the task at hand to remain culturally aligned and focused on opportunities in global markets.
“We saw global demand fall in this industry, excluding China, by 30 percent, which is a big number,” Kenny says. “Some regions fell more than that. Managing with a 30 percent reduction in demand across the board as well as compression pricing, caused us to take extensive steps and redouble our efforts around lean manufacturing.”
Those steps and efforts weren’t easy tasks, but Kenny has made sure he constantly looks for ways to keep the $4.86 billion organization moving forward.
“Clearly the recovery is long when you have a financially induced recession,” he says.
Stay motivated and focused
When you experience a drop in demand like General Cable did, you have to make sure your company culture can handle that type of shake up. You have to be prepared for ups and downs in demand.
“Keeping people motivated and focused was not hard,” Kenny says. “We have a very good team here that’s been through cycles and we’re looking forward strongly.”
The change in demand the company saw wasn’t the only challenge Kenny had to deal with.
“I think the tremendous changes in our long-term material costs up and down has also been difficult,” he says. “We buy a lot of aluminum, copper, petrochemicals and steel and they both fell dramatically and then accelerated dramatically and then fell again. Managing tremendous changes in input costs in a weak overall market is challenging.”
Since General Cable is used to operating in an industry that goes through cycles, it didn’t have to make drastic changes to handle the new pressures.
“We already had a culture that had been in place since about 2000 around lean manufacturing,” Kenny says. “What we did is continue to look very hard on the cost side, but that’s really a continuous part of our culture. We did have salary freezes and hiring freezes. We didn’t have any major layoffs, but as different countries struggled with demand, we had to adjust our crew counts, so we were a smaller company than we were in 2007. While a global financially-driven recession wasn’t well seen, we were in a sense prepared for it because our mission has been clear, our costs were already in excellent shape and we didn’t have one of those moments where we had to reinvent the company.”
What Kenny did have to do was continue to drive the culture forward and look for new ways to help in that effort.
“We are always looking to do more with less culturally and we have expanded the company globally to many product areas and countries and not every country suffered in exactly the same way,” he says. “Being good at our business and the diversity helped us get through this in quite a different way than 2001 to 2003, which was much less severe, but was actually a more difficult time for the company.”
Getting through unforeseen challenges such as these, comes down to the people you have in your organization.
“You have to have the best team you can have on the field and pay great attention to recruiting the great athletes,” he says. “You have to also keep your culture together in terms of everybody fighting as a team and that’s critical. Those cultures aren’t easy to invent overnight. You have to be mindful of who you are and also take a longer view in the business.”
When the economy takes a hit like it has, you have to remain calm, but act appropriately.
“Things don’t go down forever and they don’t go up forever,” Kenny says. “We try to prepare for what if demand picks up 30 percent or what if the world goes into a double-dip recession. We’re constantly looking forward and stressing our own balance sheet and organizational capabilities to be sure we’re ready for it. Clearly, the world isn’t smooth and linear and keeping that access to capital markets and being able to borrow money remains critical. Don’t lose your nerve about the business because sometimes the best opportunities are when lots of people are fearful.”
While General Cable’s culture was already equipped to handle the decline in demand, Kenny did create councils to help align the company and keep it operating as one.
“What we’ve done is said, ‘What if we could take a breakthrough from one place and carry it to the next in five minutes or one minute? If we could know everything we know in our facilities all around instantaneously, wouldn’t that be a powerful weapon?’” he says. “What we did, without creating corporate bureaucracy, was created councils around safety, which is our paramount concern.”
These global councils helped keep alignment and also opened eyes to potential new opportunities and ways to improve the business.
“If we can act as one and really compete as one company, not as 20 or 30 separate companies that are simply affiliated with General Cable, we’d have a powerful idea,” Kenny says. “That has helped get us through because we share heavily a lot of the new products we launch in one place in the world or another that are maybe developed and thought about somewhere else and then leveraged into that market. I think it’s a big idea and we get better at it every day, and it’s a powerful part of our success.”
The councils were so successful that the company didn’t just form them around safety, but created some for certain product families as well.
“You have to be good at both cross-utilizing assets, meaning seeing a market opportunity and looking inside to see what you have to meet that, or helping to create it,” he says. “That work around focusing on key customers and unmet needs and running that through our technology group to see if we can actually do it has been really important. You have to think about which disciplines are decisive in your company. You have to think about what things are core to your DNA.”
Expand your business
While General Cable’s culture played a big role in the company’s ability to overcome recessionary challenges, it was Kenny’s global outlook that really set the stage for growth and new opportunities.
We know that in the developed world, there’s both a recovery that has been underway and we believe it will continue as well as a need to rebuild the infrastructure that was built many years ago,” Kenny says. “In the developing world, the population growth is quite a bit higher and the infrastructure clearly lags. One of our ideas was if we can take the free cash and know-how and the business model of lean culture into the developing world, that’s a powerful set of opportunities.”
While the business had certain global markets underway prior to 2007, the real jump came from buying Phelps Dodge International Corp., a $1.4 billion cable maker principally in South America, Central America, Sub-Saharan Africa, and Asia.
“They had 50 some odd years of experience really thinking across trading regions, geographic cultural regions, freight regions, and they really took a model of high knowledge of distant cultures and got very good at it,” he says. “They brought local know-how and a tremendous record in lean and safety and what we brought was access to the products that those societies would need in the future as they develop.”
Kenny took Phelps Dodge’s know-how and General Cable’s expertise and entered Mexico, Peru, South Africa and India.
“We have largely increased our position in these markets,” he says. “We looked at other global opportunities so we acquired a business that made cables for wind farms and we also acquired in North Africa in Egypt and Algeria. I think when you identify opportunities you have to think about what you do well and where you want to be.”
Before entering new markets you have to consider certain aspects of doing business there to determine whether it is a good move.
“We look at what are the demographics, what is the civility of the country, if it’s not stable can we tolerate the instability, and then getting local ownership and buy-in as well as expertise here to get it done,” he says. “We have to look at every market and see, can we be successful there? Do people make products of good quality and does the country have laws and how are they enforced?”
Aside from understanding whether a market is a good fit, you have to begin to think in terms of your global markets if you truly want to build a global company.
“You can build to an extent yourself, but until you become multicultural as a company and really think as much in French and Spanish as you do in Mandarin, it’s hard to spot the opportunities because you don’t know what you don’t know,” he says. “I think Phelps Dodge helped tip us over to some critical mass of know-how and then we continue to build behind it.”
What Phelps Dodge brought to General Cable was a better understanding of the new markets the company wanted to get involved in. You have to be able to grasp critical elements of entering new geographies to be successful.
“You have to look at demographics,” Kenny says. “Look at whether it is a young population and growing. Is it a level playing field? Do they want quality products or is it a market that doesn’t appreciate making products to standards and making it correctly? Look at transparency and whether people pay taxes. Can you sell in a transparent way and be successful?”
Understanding those aspects of new geography you are preparing to enter is critically helpful. Once you have made a decision on where to go, start slow and get familiar with the area.
“If you have a product that can be exported, start with a small office and hire locals,” Kenny says. “What we generally do is look for people who share our values, but are from that country or that region and get to know them and how they think. Let them educate you on local mores. Learn the turf. Look at the experiences of other companies in the country. I think you can engage the chamber of commerce which will have international companies in it and they are generally very hospitable in terms of telling you what the pros and cons of the market are there. Usually there’s a foreign commercial office in the embassy, which is also a useful call.
“You have to build a case around that country and then look at the competitors and see how you want to start and where you’re going long term. It’s hard to do from Cincinnati. You need feet on the street. Linguistically, it’s a must to have someone who speaks the language fluently, both English and the local language.”
The company’s geographic diversity and product diversity have been two big factors to its success and growth recently.
Net sales increased from $4.38 billion in 2009 to $4.86 billion in 2010, with gross profit increasing from 519.5 million to 554 million in the same time period.
“Even in a down market, if you keep getting better and smarter and things turnaround, you can have a really strong rebound,” Kenny says. “Leveraging 12,000 people and the 48 or 49 factories we have has been really, really helpful in getting us through this, as well as spotting new markets and opportunities and not being afraid to enter them.”
HOW TO REACH: General Cable Corp., (859) 572-8000 or www.generalcable.com
- Align your culture for the greater good of the company
- Create company councils to improve best practices
- Search for new opportunities during a downturn to grow business
The Kenny File
President and CEO
General Cable Corp.
Born: Long Island, N.Y.
Education: Attended Georgetown University in Washington D.C. and received his MBA from George Washington University and a Masters in public administration from Harvard.
What was the very first job you ever had, and what did that experience teach you?
I had my own lawn business because I like working outdoors. My first full-time job was in the grocery industry, which is a tough business and they work you hard. So I grew up working, and feeling not entitled comes from a long history of working and making things happen.
Whom do you admire in business?
I admire the folks who get stuff done on the floor every day. When you find them turned on and excited it drives General Cable forward and that’s the most exciting part for me.
What is one of your favorite countries you do business in outside of the U.S.?
I can’t answer that because we’re in many countries, but I would say that I do enjoy getting far off the track. I avoid classically touristic places. I like smaller villages and getting in with the people and understanding more about that society.
What is a place you aren’t doing business that you’d like to break in to?
I see opportunity in Southeast Asia and also I think we could do a bigger job in South America than we’re currently doing. We are also looking at sub-Saharan Africa.
Nick Vehr, founder and president of Vehr Communications LLC, a public relations firm, doesn’t mind uncertainty.
Everyone has been enduring it for the past few years, and for Vehr and its 18 employees, that uncertainty has brought out the best in the business.
“Our company is young and I started it at the front end of the worst recession in many lifetimes,” Vehr says. “It’s an extremely scary time to be out there with a business and even more to be investing in that business and growing that business.”
While it’s a scary business environment, it will be those who work hardest and deliver the best results that will survive.
Smart Business spoke to Vehr about how he is growing his company despite tough times.
How do you deal with uncertainty?
You put your head down and work harder because you can’t control it. You can’t spend all of your time worrying about it; you have to spend time with every client you have and fight aggressively for every client you can get. That’s the only way I know how to deal with the uncertainty that’s out there. Fortunately for us, we’ve been able to grow with cash flow and we didn’t have a huge overhead to feed when the economy went bad and companies started pulling back.
What have been some of the key factors of the company’s success?
Somehow you have to strike a balance between keeping your eye on the big picture and sweating every little detail of the way you run your business, and I think that’s especially true with small businesses. You just have to be very careful in your hiring. You have to be selective in your clients and you have to work harder than the next guy. That’s the key, because there is a direct-line correlation between working hard and winning. You’ve got to be smart. You’ve got to be transparent, honest and open with clients when you give them advice, even if it’s advice they don’t want to hear. All of those things in our business are a given. The variable that spells the difference between winning and losing is, ‘How much are you willing to put into it?’
How do you plan your hiring?
This is a great time to be hiring. There is a whole lot of talent that’s out there and the trick is not trying to pick up good talent dirt cheap because in the long run you’ll lose that talent, because they’ll know you weren’t truly committed to them. We try to be very deliberate, intentionally slow and careful, and on my side when I make the decision to make the hire, I try to calibrate the best I can on a couple of different points. A disaster for us is somebody who we invest all that time and energy in, we pay them a salary for a year, they start developing a relationship with clients, and then they leave. That’s a significant lose of investment on the business side of things.
The scary thing and the challenging thing is you have to hire out in front of the work. People with whom we work, they want to know who they are going to talk to and work with on a daily basis. I can’t as CEO make the sale and then hand it off to a person who’s completely unknown to who I made the sale to. Our people are our product. It’s their brains and their skills and their experience that people are buying. For anybody who’s hiring, the hardest thing to calibrate is, ‘How do I hire out in front?’ You’ve just got to get great people, work hard and the business will come and they will end up adding value to the bottom line of your company.
How have you attracted clients in such a tough economic time?
I hope we don’t do anything differently in good economic times than we do in challenging economic times. For a successful relationship with a client, we have to commit ourselves to that relationship. That means open communication. That means thinking out ahead of the client and what their needs are and being proactive in suggesting strategic approaches and ideas. The best way to make sure a relationship works is to commit yourself to being an active partner in the relationship. It’s a lot of touch and communication. We want to become a strategic partner with our clients. We want to be at the table for the great opportunities and the tough challenges and be able to advise our clients appropriately.
HOW TO REACH: Vehr Communications LLC, (513) 381-8347 or www.vehrcommunications.com
Gary Conley is never satisfied with a process being good; it can be better and he will find ways to make it so. Conley is president and CEO of TechSolve Inc., a 55-employee consulting company that specializes in industries such as health care, manufacturing, and aerospace.
Conley and his team at TechSolve help businesses find ways to improve operations and become more efficient in any way possible. While he focuses on helping other companies, Conley has to also make sure he is keeping an eye on his own company’s processes.
“We have the same issues as our customers, although our people are trained to look for continuous improvement opportunities,” Conley says. “We need to be careful that we don’t fall into the rut of taking some of our processes for granted and not continuing to find ways to improve them.”
TechSolve utilizes concepts from Toyota’s production system of total quality management.
Smart Business spoke to Conley about how companies can focus on taking waste out of practices.
What are some common mistakes in business processes?
A common mistake is that the top management is not sufficiently engaged in the process and committed to seeing the process through. While you can often go into an organization and identify some immediate cost savings and other measures that might improve productivity or improve profitability, management needs to harvest those types of opportunities, but they also have to keep their eye on the long-term opportunity, which is to develop an environment within your company where everyone in the company is continuously looking for ways to improve.
Another mistake that’s often made is trying to do too much too quickly. This usually results in a lot of multitasking, which tends to delay improvements from actually being realized. It’s much better to focus on a smaller set of improvement initiatives and see them through than to try to take on a very large number.
How can management focus on improving processes and avoid common mistakes?
They need to learn as much as they can about the improvement methodologies that can be applied. Then they need to actually be personally engaged in the process and involved in working with their workers in the actual implementation of these methodologies. These are things that ultimately you can’t learn in the classroom. You can’t learn them by reading books. You can’t learn them just by watching. You have to actually become engaged and do them because it’s very much a high touch, contact sport. They need to establish clear goals and clear measures so that they can monitor the progress that’s being made and also so the workers and other managers who are engaged in the process can continuously evaluate where they are against the goals that have been set forth.
How do you develop a continuously improving environment?
What needs to occur is for all the managers to be aligned around the improvement initiatives and fully understand the purpose and the goals and the methods and the cultural transformation that is being pursued. Then, they, in turn, need to be trained in the methods and be personally hands-on involved in the actual implementation of the improvement.
How do you identify what processes need to be updated or changed?
In the beginning, it’s simply a matter of prioritization. What you’re looking for are improvements that will be meaningful to the organization that can be performed within a relatively short period of time so that they become a model for other divisions or work units within the organization to attempt to duplicate. You want some early successes and visible successes, meaningful successes that other people within the organization can observe and realize that benefits are being realized from the activity. That reinforces the belief within people that they can in fact make these changes and that these changes will make the organization more successful and their workplace a more secure place and a more productive place.
Another approach is if you have dissatisfaction from your customers, either as to quality or meeting delivery promise, then that might give you an indication of what would be the more meaningful project you might take on. Even if you didn’t have dissatisfaction, your sales people and people that are closest to the customers might be able to give you information about the aspects of your products or your service that would have the most meaningful impact.
What are the keys to recognizing what changes give you the best results?
You start with the basics. You want to look at the quality of your product. How much product is being returned? You could also look for areas where you have excessive scrap rates, for example. You look for bottleneck operations which might reveal themselves by very high work-in-process inventory levels. You look at how effective you are at achieving your delivery promise.
Although many of the techniques and methodologies originated within the manufacturing sector, they have universal applicability to any type of enterprise.
HOW TO REACH: TechSolve Inc., (800) 345-4482 or www.techsolve.org
Jochen Meyer has built a company from the ground up before. He was essential in helping Flabeg U.S. Solar Corp. grow from two employees to nearly 200 in less than two years. His latest venture is PMJ Service Parts Management LLC, a management consulting company that specializes in optimizing spare parts logistics.
Meyer, CEO is leading the company forward by laying out a focused and driven plan of attack for how the business operates. By staying focused and sticking to the expertise of the company, Meyer expects the company to grow globally.
“Spare parts are really an important part of business and it’s often neglected because most of the management attention is given to developing, producing and selling the original product that a company makes,” Meyer says. “The after-sales service is kind of an afterthought, although, that’s very important to customer loyalty and to the bottom line of the company.”
The company is building trust in the service parts arena by delivering what it says it will.
Smart Business spoke to Meyer about what it takes to grow a young company.
What is the biggest challenge of building a business?
The challenge is in creating your own pace and keeping everything driving. It’s actually very similar to how we started Flabeg with only two people. Now it’s kind of going back to that start-up mode that we have successfully mastered and going back to a leadership situation where you have to be very careful not to do everything, but you have to rely on yourself a lot more.
We have set our goals or sights to small to medium size companies. Those are customers that really benefit the most from what we can do. You have to believe and you have to have trust in your unique selling proposition. You have to test that a little bit before you go out there. Once you see that a lot of the people that you talk to say this is a good idea, this is something that is missing. If it’s important then you have to go with it.
Why is it helpful to have a focused business plan?
It’s important that you stay focused and do not stray and think about doing a little bit of business here and a little bit of business there, but that you stay with your goal and that you stay with what you want to do. Otherwise, you take away from getting over that initial hurdle by kind of running around it. You have to get over that hurdle to be known and to have a name out there. That is something that you cannot cut short. Focus is really what gets you there.
How do you gain customer attention?
You have to understand your customers and try to create that trust in your customers and that interest in the services you provide. We have to build a very reliable partner network. Our approach is not to do everything ourselves. Our approach is to identify what needs to get done and then have the right partners in place that we engage with to execute that part of the supply chain. Those partnerships are very vital and they have to be built on experience.
That’s an important factor where you can show to the customer that you understand what the need is and you have the exact right person to execute that and you have the management experience to manage that whole process for them and be accountable for reaching the goals that you agree upon.
It’s important to have a way how you can create that reference between what you have done in the past with these people and what you’re going to do in the future. That’s the credibility that you have to build. You have to know what you’re talking about. The people that you’re talking to are experts, so you shouldn’t promise more than you can deliver and you’ve got to listen to what their real needs are.
How do you differentiate from the competition?
I would segregate the competition in two separate areas. The one is in the peer consulting world. There are people that are focused on supply chain and logistics and there are people that as part of that also work on service parts. For them it’s a small part of their portfolio. While for us it’s the focus of what we do. That’s the difference there.
You’ve got to define your market space in a way that it’s not the same where there’s already five, six, seven, eight other people. If I would walk up to Ford Motor Company tomorrow and try to pitch against UPS, it’s probably not going to work so well. You have to understand which players are approaching what customers and where that spot is where I can fit in. Once you establish that nucleus obviously you have to grow in a number of different directions.
HOW TO REACH: PMJ Service Parts Management LLC, (412) 213-5300 or www.pmj-spm.com
Long gone are the days when consumers had to wait around for a newspaper or magazine to arrive in order to get caught up on news and information. The media world has been transformed, and Scott McCafferty and Mike Emich are on the forefront of that rapidly changing industry.
McCafferty and Emich are co-founders of WTWH Media LLC, a business-to-business media company involved in magazines, websites and apps for numerous industries. The business has been growing as fast as the industry has been changing, and it is the ability to keep up with trends and evolving technologies that have led to success.
“Our premise is media used to be a one-way street,” McCafferty, managing director, says. “Media was pumped out at consumers, and consumers would read the paper or read a magazine or go to a tradeshow. Well, now it’s reverted to the users being in control of how they get their information. It’s up to a media company to surround that user with sites and resources that enable them to get their information on their terms.”
To make that possible, McCafferty has had to understand the latest technology being used in the industry and how that can help the business and its customers.
“The things that get us really excited is that media continues to change,” McCafferty says. “The tools and the technology out there continue to evolve. That’s exciting because you may think you have it figured out today, but it’s going to change tomorrow. We’re very engaged in using technology from the standpoint of using Twitter, using LinkedIn, using Facebook, we’ve got programmers that are versed in Explorer, PHP, Wordpress, Drupal and whatever the latest CMS platform is. Everyone actively uses the technology and by using it, that allows us to look for opportunities with it.”
By using technology the company has been able to deliver ROI back to the marketers. But it isn’t enough to just know technology. The company ensures it stays close to customers, as well.
“We’re out in front of our customers that are actually advertising, asking them what’s working for them and what’s not working for them,” McCafferty says. “Our ability to do that close to our customers allows us to say, ‘OK, what do we need to build to support what they’re doing?’ That level of engagement has enabled us to do things really quickly.”
HOW TO REACH: WTWH Media LLC, (440) 234-4531 or www.wtwhmedia.com
Alan Jaffa has always stayed true to his company’s philosophy that customer service equals resolution. In the 16 years that he has been with Safeguard Properties and the more than 18 months he has been CEO, a continued focus on customer service has driven the company to success.
Safeguard Properties is the largest privately held mortgage field services company in the country. It inspects and maintains defaulted and foreclosed properties for a wide range of clients in the mortgage industry.
“We are the property preservation company that will maintain grass, board windows and maintain the property once the banks have taken possession and are actively trying to sell the property,” Jaffa says. “We do this nationwide. There isn’t a ZIP code we haven’t been to in the United States.”
Safeguard’s national reach and it’s commitment to quality service have allowed the company to experience growth since the company’s founding 21 years ago.
“We have been able to grow, because we market our services just by doing what we do day-in and day-out for our clients,” Jaffa says. “Our growth has always been year-over-year for 21 years and counting by continuing to pick up market share and continuing to build relationships with existing clients.”
Big contributors to Safeguard’s growth are those business relationships and the company’s ability to listen to its customers.
“Over the years, we have grown and grown by listening to our clients, hearing their needs, understanding their pain points and building on that with additional services,” Jaffa says. “Within the last year, we started providing utility services where we are handling a service that our clients always used to handle. We’ve been able to come up with processes and automate it and take that burden from our clients, which has helped us increase our visibility.”
Safeguard and Jaffa have no plans to alter the business strategy anytime soon.
“My main goal is to continue to stay true to who we are and what we’re doing out there with our clients and not lose what we built this company on,” Jaffa says. “I’m not saying it gets more difficult as we get bigger to do that, but it does get more difficult to stay focused on that with so many things going on.”
HOW TO REACH: Safeguard Properties, (800) 852-8306 or www.safeguardproperties.com
When small companies begin to see fast-paced growth, it adds additional challenges to doing business. That is exactly the position Hank Newman finds himself in at Recon Logistics, a transportation management solutions provider for small and medium-sized manufacturers.
Newman is president of Recon, and in just six years of business, his company has grown to heights that he never anticipated to be possible. His challenge now is figuring out how he wants to continue growing the company.
“The biggest challenge is whether to just put the gas pedal down or to sit back and grow the same way that we have been growing now, which is more organic,” Newman says. “We have a huge opportunity now if we wanted to really ramp things up and bring on some salespeople and invest more heavily in technology to really push the sales and marketing growth. It’s right there in front of us. We’re very regional, even though we have customers all over the country. We could take that very regional approach and go all over the country in midmarket cities.”
Newman got his company to this position through an often under-appreciated approach of open and honest business with his company’s customers.
“We tend to price in a way that’s from the bottom up, which lends an awful lot of credibility to our customers that we’re going to make a fair dollar for what we do,” Newman says. “I’ve worked for a lot of big (third-party logistics providers) and they tend to price in a way to maximize profit. If they can save a customer 20 or 30 percent on their transportation costs, they might tell them they can save 5 percent and the customer is like, ‘Great, I can save 5 percent.’ We really turn it upside down.”
Newman’s approach has saved customers an average of 30 percent on transportation costs, has allowed Recon to never lose a customer to date and has led the company to its 24th consecutive quarter of growth.
“To me, it’s being open and objective on everything,” Newman says. “The industry that we’re in is rampant with people stretching the truth; for example, people saying the truck is going to be here in an hour, when it’s not. We find being truthful and honest with everything right away, whether it’s cost or service failure or a better way of doing things. Even if it rubs the customer the wrong way … they appreciate that viewpoint, which causes us to get recommended to other customers.”
HOW TO REACH: Recon Logistics, (440) 708-2306 or www.reconlogistics.com