Every company has its baby photos. Monoprice Inc. is no exception.
A decade ago, the Internet electronics retailer was a small start-up. The company’s owners wore many hats, dictating almost every aspect of the company’s culture, strategy, systems and processes.
That was then. The “now” for Monoprice is the company that CEO Ajay Kumar has fronted for the last two years. It’s a $121 million player in its space, growing at a rate of 25 to 30 percent every year. With rapid growth and a workforce of 250, Kumar can’t possibly dictate every angle and nuance of the company’s day-to-day operations.
“When you start a small company and grow it, you can manage every aspect of it,” Kumar says. “You can be hands-on, making every decision, involving yourself in every detail.
“But now, we have to have all the appropriate controls in place to manage the company. We have to have the right organization, accountability, reports, metrics, all that stuff, so that it’s not just the top person running the whole thing. You need the structure and controls in place to make it all work.”
By the time Kumar took over, the CEO’s role had evolved into a global-view position. Instead of laboring in the trenches, Monoprice needed its CEO to define a vision, work with his leadership team to put goals and processes in place to achieve the vision, create metrics to measure progress against the goals, and build a team that could achieve and exceed the goals.
“My leadership style is that I am hands-on but not a micromanager,” Kumar says. “I want people who are capable of executing what I need done in each functional area. In addition to the goals and metrics, we need the right people in the right places throughout the organization.”
At its heart, Kumar’s biggest challenge has been to harness the ability to look ahead and anticipate what his company will need in the coming years.
Create a vision
Vision equals direction. Without a well-defined vision, a company is operating without a compass or a rudder. That’s a recipe for turning growth into stagnation and eventually into mere survival.
That’s why Kumar’s first job upon taking the CEO’s role was to define a vision and ensure that the vision and the reasoning behind it could be adequately explained to the Monoprice team.
“I was able to have a vision for the company coming in, since I had a lot of experience in this industry,” Kumar says. “I had a lot of experience in terms of sourcing products from Asia, getting products made rapidly. The consumer electronics business is something I’ve been in for a long time, so I had a good idea of what the vision needed to be for the type of company we are.”
Kumar’s vision was to produce products equal to or better than big-name brands in terms of quality and compete on price.
“We didn’t want to get into selling any product line if we didn’t feel we could generate at least a 30 to 70 percent advantage over the retail selling price,” he says. “That creates a certain amount of discipline as far as launching products. We don’t want to be randomly launching products.
“We want to launch products where we have a price advantage. The way we do that is we don’t sell other brands. A lot of Internet retailers are selling other brands. We don’t do that, so we are eliminating a whole layer of markup.”
By not carrying outside brands, Kumar and his team also attempted to make a statement about their belief in the quality of their products — a move made, in part, to bolster consumer confidence in the product lines.
“If we sell other brands, we’re, in effect, saying their brands are as good as ours, but they are much pricier, so why are we selling them?” Kumar says. “It’s like saying their products are a step up from ours. That is a key part of our vision: The products we make need to be as good as the famous brands. If the quality is the same but the price is lower, people aren’t going to go anywhere else.”
Related to that, Kumar incorporated a sense of focus into the vision. Monoprice would compete on price and quality but would also compete by becoming an expert retailer in a focused space, as opposed to carrying a broad spectrum of seemingly unrelated offerings.
“A lot of Internet retailers carry tons and tons of products that all seem kind of random,” he says. “It doesn’t feel like a portfolio.
“Our goal is to pick product lines that we want to be in. If we want to be in the Apple accessory area, we need to come up with the right mix of products in the portfolio. Not too many, not too few, because our goal is to become a destination for each product line that we want to be in.”
With the vision focused on those three factors, Kumar then had to roll it out to the company at large — complete with a compelling set of processes and incentives aimed at motivating people throughout the company.
Make them follow
To drive the entire company toward realization of the vision, Kumar had to give all 250 people a reason to get on board. He had to show everyone in the company how their performance related to the company’s ability to achieve its overarching goals and turn the vision into something concrete.
Kumar and his leadership team started by rolling out the vision with a companywide presentation, with an opportunity for dialogue and feedback. That planted the seed, but Kumar says the seed sprouted thanks, in large part, to the company’s bonus plan.
With a bonus plan anchored in corporate-level metrics, Kumar steered every person in the organization, regardless of department, toward the goals that would help Monoprice realize his vision.
“I think a bonus program is always tricky,” Kumar says. “Do you measure people based on department results or overall company results? Some companies go down one path and some go down the other.
“Early on, I decided our path should be aligned along one set of metrics at the corporate level. We decided to focus everyone on three metrics that drive our bonus program: sales, profit and cash flow. Some people in some functions might not be able to directly impact all three of those, but we wanted everyone thinking about all three.
“The thing I like about having the metrics at the corporate level is that everyone in the company is focused on the same thing. It’s the same bonus program whether you are a warehouse worker, customer service person, IT or even myself. It keeps everyone working in the same direction.”
The disadvantage to developing a bonus plan driven by corporate-level metrics is that some people in certain areas of the company might not feel a high level of urgency to meet the company’s goals.
To avoid coasting, Kumar and his team have devised department-level metrics. Since those metrics don’t directly impact the bonus program, Kumar relies on a culture of accountability to enforce them.
“They’re producing against those department-level metrics, they’re showing plan versus actual against those metrics, so there is a little bit of accountability and professionalism at stake when you’re executing on that plan in front of your peers,” Kumar says. “That, in and of itself, will drive a certain level of motivation.”
Find the talent
You can have a well-defined vision, and you can develop metrics and incentives that ensure people are working toward realizing that vision. But your people provide the momentum that will really power your company toward the goals you have set. Without competent employees, nothing gets done.
Kumar believes in attracting top-notch talent but not without first understanding the roles that he needs to fill. He wants talent, but he doesn’t want to simply stockpile talent for talent’s sake, without a plan for utilizing it.
“One of the key things before you go recruit people is making sure you have an understanding of what, exactly, you want from a particular role,” Kumar says. “Some folks may go out there and hire a generic person for a generic role. What I try to do is figure out exactly what I want to get from a particular role.”
Then, when you bring a candidate to the office for an interview, make sure your line of questioning aims to ascertain whether the candidate is a match for the criteria you have established.
“One of the things I like to do is get into the details of what they did at their past job and how they did it,” Kumar says. “When you look at resumes, sometimes it will say a person saved 30 percent or grew sales by $50 million, but you start digging, and they didn’t do it all themselves. They didn’t drive it. I’m looking for people who generated benefits at their previous jobs, and I want to know if they can do the same thing at this company.”
How to reach: Monoprice Inc., (877) 271-2592 or www.monoprice.com
The Kumar file
Name: Ajay Kumar
Company: Monoprice Inc.
What is the best business lesson you’ve learned?
I am a big believer that what you don’t work on is as important as what you do work on. It’s important to know when you should pass on an opportunity. In most companies, it is too easy to get bogged down on doing too many things. It is the nature of a high-performance person. You want to get things done, but you can’t do everything.
What traits or skills are essential for a business leader?
Having a vision that makes sense, creating a sense of buy-in, recruiting the right people, drive, performance, being a good two-way communicator, facilitating teamwork, and providing a coaching and mentoring approach to growth. One of the primary things people want to get out of a job is what they learn from their boss.
What is your definition of success?
For me, it is setting goals and then achieving them. That might seem very metrics-oriented, but if you don’t achieve goals, it won’t be a fun place to work. People won’t feel like the company is successful. If you set goals and don’t make them happen, you don’t get that sense of accomplishment. People start to feel like you’re wishy-washy.
Develop a strong vision.
Create buy-in on the vision.
Hire the right people.
Artur Wagrodzki and Tomasz Tokarczyk were surprised at what they found upon arriving in the United States from their native Poland. They were just teenagers, but they still had an image of what America was like, and Brooklyn wasn’t really matching up with what they had envisioned it to be.
“I thought it was going to be palm trees everywhere,” Tokarczyk says. “In Brooklyn, you have concrete going all over. That was my first impression.”
The childhood friends and future presidents of Artur Express Inc. grew up as neighbors and eventually went to work for a limousine company in the New York City borough. It was there that they found their love for the transportation industry.
“It was a black car service and they took bankers and people like that around the city,” Wagrodzki says. “We worked in different departments, but we basically were dispatching drivers, picking up phone calls and doing customer service. In some respects, it was a little bit similar to what we do now. We just move freight instead of people.”
The numbers show Artur Express Inc. does a very good job moving that freight. The transportation and logistics company was founded in 1998 and grew to $28.1 million in 2008 revenue. Revenue reached $54.9 million in 2011.
“When we started this business, we were really young,” says Tokarczyk, who serves as president along with Wagrodzki of the 50-employee company. “So maybe that gave us a big advantage. We took it upon ourselves to build the business, and we just did what we felt was right. We ran with it and did everything in our power to make it work and help the company grow.”
The business partners have led with a mix of instinct and collaboration. They don’t worry so much about what the leadership textbooks say you’re supposed to do. But they understand the importance of building a strong culture where employees are committed to doing their job to the best of their ability in order to satisfy the customer.
“A lot of the loads that we haul are for very important customers and it’s very time-sensitive,” Wagrodzki says. “You can give a driver the wrong ZIP code and he’s going to end up in a different state. It’s that crucial. So we need very accurate data and we need everybody to do their job.”
Here’s a look at how Wagrodzki and Tokarczyk work together to lead Artur Express and make sure their employees know exactly what needs to be done to keep the company on top of its game.
Share your responsibilities
One of the biggest changes at Artur Express in recent years has been the influx of technology into every aspect of the company’s business. Whether it’s tracking loads or the drivers who deliver them, technology has led to a different way of doing things in the company and throughout the entire transportation industry.
“The main key for our operation is to develop and use all the different technology that is out there to be able to perform and control the different problems that we have and give that information to the customer,” Wagrodzki says.
Everybody can benefit from technology, of course, but you’ve got to know how it can help you. To just implement something because everybody else is doing it or because it’s shiny and new is asking for trouble.
Wagrodzki says they are careful to incorporate technology that helps them and helps their customers. They have the advantage of having been with the company since the beginning.
“We’ve worked hands-on in the business from day one and we know the ins and outs of it,” Wagrodzki says. “We know exactly what we do on paper and then we just convert all those different ideas to our computer system. It’s not just bells and whistles. It’s something we can really use.”
That conversion process is handled by an IT department that is usually pretty tuned into what Wagrodzki and Tokarczyk are looking for. That type of connection is obviously important.
“All they need is an idea of what we want,” Wagrodzki says. “It takes a while to put it together, but once it’s in place, it becomes a very easy process that you can access any time, which helps gets us get the information to the people it needs to go to.”
It’s those connections that you have with your IT team and with your employees that make or break the integration of things such as technological tools to help you track volume and the status of deliveries.
If you’re not speaking the same language, you’re not going to get what you want or what your company needs.
So Wagrodzki and Tokarczyk make sure they are accessible.
“Employees know if they have an idea, they don’t have to put it out to us or management in some fancy form,” Tokarczyk says. “They can just shoot us a quick email and we react instantly. Every idea they send to us, we try to make it better. Some of the good things we’ve done, that’s how they have been developed.”
It’s that partnership that makes the difference between a business that can grow and one that is limited by the capacity of the entrepreneur. Wagrodzki says he and his partner knew enough to hand off some of their work as they grew to allow the company to gain more customers and take on more work.
“When we started the company, we did it all from accounting to billing to dispatching,” Wagrodzki says. “You name it, we did it. It’s helping us now to be able to meet up with the managers, meet up with the staff and give good pointers on how we used to do it. Maybe it was on a smaller scale, but the factors are still the same.
“If you have 50 trucks or 500 trucks, you have to apply those same rules. We try to treat our employees and our independent contractors on a very personal level. That definitely helps.”
Keep looking for talent
Hiring is always a challenge for any business because you just never know exactly what you’re going to get, Wagrodzki says.
“You’re going to take a gamble when you hire somebody,” Wagrodzki says. “They try to be perfect in the interview and you follow the rules and follow your steps of having them interview with multiple people. I would say 85 percent of the people we hire turn out pretty good.”
But it’s that other 15 percent that can cause a problem. It’s why Artur Express is always in recruiting mode to some degree. With the growth that the company has been experiencing, Tokarczyk says they can afford to bring in talent that has untapped potential.
“We try to find people who can grow with us and are motivated,” Tokarczyk says. “They do have management potential, but maybe that potential needs to be discovered a year or two years from now.”
If you’re looking for more experience in your new hires, it pays to keep tabs on others in your industry. In these difficult economic times, there are often companies that don’t make it or have to let people go whom they otherwise would prefer to keep.
“Sometimes we’re able to get those good people from different companies that were bought out or are no longer in business, “Tokarczyk says. “These people have been there for 15 or 20 years and they’re looking for another strong company where they can set their roots for a while. That’s how we were able to get a lot of the good people that we have.”
Whatever way you go, when you do bring someone in, give strong consideration to having more than one person interview the candidate if you don’t already do that. It will give you a variety of perspective that can help guide your decision.
“We try to have them interview with at least three or four different people,” Tokarczyk says. “This way, we have an idea where they would best fit in the company.”
One thing that Tokarczyk always asks candidates when he interviews them is why they like transportation.
“You can get all kinds of answers,” Tokarczyk says. “Sometimes, you get an answer like, ‘Hey, my father used to drive and he took me on a trip.’ Some of the customer service girls that we hire, those were the answers we got. So there’s always an aspect of transportation in our employees’ lives, one way or the other. That’s always good to hear. You have to be in it to love it.”
Manage your relationships
Artur Express relies on about 400 independent contractors to deliver freight for clients rather than its own employees.
“They are our partners in this business,” Wagrodzki says. “It’s a 50/50 responsibility. If they don’t make the delivery or if they don’t deliver on time, we’re not going to be able to use them again with this customer. They know it’s a one-time shot.”
One of the things Wagrodzki looks at to determine whether the company is doing well or trending in the wrong direction is the fleet of independent contractors.
“There are always guys who come and leave,” he says. “That’s normal. But once you see that nobody has left for a month or two, you can feel good that the company is doing well. We are providing the service that our customers need.
“You might have other times where something is not working and all of those independent contractors are leaving. Now there is something you need to react to.”
In an attempt to be proactive about relations with the contractors, Artur Express has created a team of people who check in regularly to address questions and concerns before they become a big problem.
“They are constantly on the phone with those contractors asking questions,” Wagrodzki says. “What are we doing wrong? What can we do better for you? That’s a key in this business. We match up contractors and customers, and we manage the process of them picking up the load on time and delivering it on time. Once we have those two parties happy, we’re happy.”
The recession has provided a bit of a challenge in this area as Artur Express has worked hard to help both parties understand what the other is dealing with.
“In some cases, customers don’t want to pay too much and drivers want a lot,” Wagrodzki says. “You have to talk to drivers. ‘Hey, this is the industry right now, this is the market.’ And if the market goes up, you have to go to customers and say, ‘We bid this business for the last two years, but we need an increase now.’ Most of the time they do understand because we move a lot of freight and we know from one customer to another there’s not that big of a difference.”
The key is approaching all relationships with a good attitude and not being afraid of a little conflict that is always going to come up from time to time.
“We never look for a perfect project or for a bulletproof opportunity,” Tokarczyk says. “We’re always looking to take some type of risk. But we’ve learned over the years that you can sit on the sidelines and play it safe or you can play the game. If you play it right, you usually end up on the good side.” <<
How to reach: Artur Express Inc., (800) 487-4339 or
The Tokarczyk and Wagrodzki Files
Tomasz Tokarczyk, president, Artur Express Inc.
Born: Kamienna Góra, Poland
Artur Wagrodzki, president, Artur Express Inc.
Born: Zielona Góra, Poland
Wagrodzki on managing through the recession: If we had to give customers little breaks on the business, we did it. We were able to convince our drivers that we will have the business, and it will be steady. We were lucky enough to make sure our business was diversified. We were working with retail, home goods and a lot of food companies.
Wagrodzki on word-of-mouth recruiting: We were able to hire more independent contractors because the contractors that we had, they talk a lot out on the road. Word-of-mouth is a big deal for transportation. The drivers drive and they talk and if you have good customers and you pay the drivers on time, they can’t ask for more. They just want to join your team and haul your freight.
Wagrodzki on bonuses: We have all different bonus programs set up for our employees and they are revenue-driven bonuses. Retention is a big factor in our business, so we have customized bonus programs for dispatchers and for load planners and all different types of tiers in our operation. Our employees feel that they own a piece of this company. If the company succeeds, we’re going to succeed as well.
Let your people help you run your business.
Don’t ever stop looking for talent.
Make managing relationships a constant priority.
Retaining top talent in these turbulent times remains very high on today’s executive agenda. Equally critical is the need to minimize the crippling effects that key talent departures have on organizations, especially those that rest much of their success on these high output, unique talents. Yet very few firms create and follow through on a retention strategy that really makes a difference. Why is this? And how can organizations "crack the code" on talent retention? Based on recent interviews with a several executives in firms with outstanding reputations for leadership retention, there are several ingredients that, when effectively blended, result in an environment where the very best talent thrives. They raise their own performance bar, often feeling a synergistic relationship with the organization, and are less likely to abandon ship. Key ingredients in the retention of top talent cited by these executives in the know include:
- Culture focused on talent development
- Broadened leader bandwidth
- Effective general manager
- Well-developed retention strategy
- Effective orientation and on-boarding
Culture focused on talent development
I pull my team together for just about every morning to discuss briefly what took place the day before. We often cover highlights and lowlights, recognize combined contributions and review what we need to do better. We refer to these sessions as our morning huddle — whether in person or by conference call. When we break, people are pumped to reinforce our customer-focused atmosphere.
Comments such as these define the benefit of a work climate or culture that focuses on individual and team development. They don’t just talk about it, they live it! Retention is typically very high in organizations where the culture supports team work, individual development, recognition for contributions, and encouragement to perform.
Broadened leader bandwidth
Organizations that enable leaders, through a variety of means, to identify individual needs and respond with a portfolio of styles typically achieve significantly higher levels of retention. One size does not fit all! Top performers need to be treated as exceptions, because they are indeed exceptions. If leaders over rely on their most comfortable style, they’re bound to miss the mark on many occasions. It’s interesting to note that in cases where leaders have the capacity to respond with a number of styles, the total team and organization benefits.
Effective general manager
The factor that seems to have the greatest influence on retention of key talent is the effectiveness of the general manager in creating and maintaining a high performance culture. One executive vice president commented that her most promising general manager has a deep-seated need to raise the bar for each employee just enough so they feel truly stretched all the time. Her leadership cascades down the organization to every contributor to the point where individuals choose to raise their own bars. The signal here is for organizations to both unleash leader capacity and invest in development so leaders can realize extended capabilities.
Well-developed retention strategy
Some organizations have actually created "offices of retention" to elevate the challenge to a higher level. Often a very senior executive is accountable to the CEO for shepherding retention-related efforts and takes the lead. Even without this level of focus, many organizations see significant retention progress with well-developed and communicated retention goals and objectives for the entire organization.
Effective orientation and on-boarding
By my third week with the company I felt totally connected and ready to do battle! By my second month I realized that everything I was told on the way in was accurate. Now, three years into my relationship with the firm I realize that a solid beginning was a key reason for staying.
Comments like these are common in organizations recognizing that effective induction, orientation, and on-boarding have a huge impact on retention. Yet, very few firms treat these early phases with the attention they deserve. This impact is magnified for top talent.
A final observation on "cracking the code"
Organizations should remain in close contact with top talent, being careful to consider adopting retention practices that are truly desirable, and can be effectively managed. Too often firms select more initiatives than they can handle, and more than they need. Firms that have achieved their desired levels of top gun retention know all too well that just around the corner is another lure tempting their most prized possessions.
Sheryl Dawson is an executive partner with Talent Strategies Group, a Division of Career Partners International (CPI), Houston. She has over 25 years experience in talent management, team assessment, leadership development, and career coaching and consulting. She can be reached at firstname.lastname@example.org or (713) 784-3197.
Read more from Dawson: Talent management solutions: How CPI Houston helps companies optimize their bottom lines
As the U.S. economy continues to falter, unemployment has never been such an influencing factor since the Great Depression. Unemployment stands at between 12 percent and 15 percent, not the 9 percent you hear every day. That number is based on government statistics that come from people registering for unemployment. In reality, it is estimated that there are as many 25 million people who are currently unemployed.
The average monthly paycheck is $3,500. The average monthly unemployment check is $1,000. That means it costs the government as much as $50 billion each month in lost payroll taxes and paid unemployment benefits. The question then becomes, “How does the future look for job seekers, employers and the economy as a whole?” Also, “How does the HR and talent management industry react to the constantly changing landscape during these uncertain times?”
Many manufacturing jobs are simply gone forever. They are not coming back, either as a result of outsourcing overseas or because certain sectors have become obsolete or uneconomic from a production standpoint. Today, more than 50 percent of consumer goods — from semiconductors to washing machines — are manufactured outside of the U.S., and that trend continues to increase. At the same time, new industries are emerging, which are very much technology-driven but will take time to develop their full potential, especially as it relates to employment.
As a result, many companies are outsourcing their help desks and customer service activities to countries like India, which is having the effect of creating something of an unemployable labor pool in the U.S., due to a lack of job training and/or education.
So what this means is that for as far as the eye can see, we risk having a permanent unemployment rate of between 8 percent and 10 percent, compared to what was previously the norm of between 3 percent and 5 percent.
Looking to the future, the private sector of the U.S. economy is going to be far more dependent on service industries than manufacturing. Therefore, the human capital of industry must be re-educated and re-trained to meet this new criteria. Initially, it will be a painful transition that probably will get much worse before it gets better.
Human resource managers are now looking at significant changes in their hiring practices in an effort to reduce costs and improve efficiency. Due to the uncertain economic outlook, companies are relying more on temporary staffing than full-time employees. Fewer companies are outsourcing their search requirements and are scanning the job boards and going to social networks, such as LinkedIn, Twitter, Facebook and cloud computing to identify job applicants — from CEOs to entry-level trainees. This, in turn, has required talent management firms, such as ours, to essentially reinvent themselves.
No more brick-and-mortar office space. Outsourcing of consultants and virtual delivery has become the norm. And, many client companies have decided not to provide outplacement services when they plan a reduction in their work force.
The retained search business has also become a victim of these changes. Ancillary services, such as executive coaching and leadership development programs, have been put on hold by many employers indefinitely.
As a result, our company, ECS, has adopted something of a hybrid approach that incorporates a hi-tech/hi-touch delivery system, providing the best of both worlds to the candidate, including high-quality virtual programs as well as the more personal one-on-one consultation.
Today, the industry is becoming more sophisticated in the development of online career centers and interactive webinars. Consolidation has also begun to create economies of scale. All of the changes now allow candidates a choice to develop their job search from home by accessing the selected service providers’ website, as well as select online certified job training programs. This change has been slow in coming but is now more the rule that the exception. As such, more focus is being given to alternative careers relative to preferred training options and home office environments.
This will not be an overnight recovery. We anticipate unemployment will continue at between 8 percent and 10 percent well into 2012. Political uncertainty, along with tightening of bank credit, concern about higher taxes and the unknowns of health care reform, virtually guarantee it.
Most people in this country want to work and be successful. If we can combine this desire with a re-education program where we have round pegs in round holes, we really can “win the future.”
A viable solution is creating a task force composed of management, government, labor, educators and HR professionals. This group could begin the process of industrial renewal that will put us on a path toward rebuilding our labor pool into a more practical, sustainable level that will launch us into the 21st century and beyond.
In this land of opportunity, there is room for everyone to succeed in their own way. That’s what makes America great.
Peter Munson is managing partner of Executive Career Services. Reach him at email@example.com or (310) 442-7734.