Nicole Whyte knew the construction and real estate booms wouldn’t last forever.
When founding Bremer Whyte Brown & O’Meara LLP in 1997, Whyte and her colleagues mainly tackled construction litigation. But they knew the market would eventually drop. And they knew they would need to be prepared.
By diversifying its offerings, the law firm grew its client base and, in return, its bottom line. Bremer Whyte has grown from two attorneys to 141 employees spread throughout seven cities.
Whyte says there are four aspects to consider when deciding how to diversify and grow your company: your clients’ needs, industry trends, your company goals, and the flexibility and talent of your people.
“The key is being able to look to the future and being able to anticipate clients’ needs and industry and other trends to be ahead of the curve,” says Whyte, a founding partner and family law expert at the firm.
Smart Business spoke with Whyte about what to analyze when it comes to deciding how to diversify.
Understand and anticipate clients’ needs. Communication is key it’s staying in touch or being in touch on a daily or at least a weekly basis with the key people, the key leaders of your clients.
Communicating with them, and finding out what’s happening within their industries or businesses, and what their needs are and how those needs are changing.
Frankly, just sometimes asking point blank what we, as essentially a service provider, can be doing or should be doing, or what do they want us to do to better serve their needs.
It just comes down to communication. I think the one-on-one relationship is key. Obviously, today, much communication is done by way of technology, e-mail and so forth, but I still think the one-on-one meeting in person (is essential).
Getting out of your chair and traveling to the client, going to their facility or to their offices, meeting the key people, having an understanding of the employees and so forth is key so that you can see what their operations are and how they operate. That is extremely helpful.
Research trends and diversify. All of the partners within my firm are responsible for being informed and staying informed (on trends), and we have regular partner meetings. It’s really a group project if you will.
The key is looking to industry trends. That would be just staying on top of obviously the news and the economy, reading relative media publications, newspapers and so forth that will help keep you ahead of what those trends are.
To give you an example of that in my legal practice at the law firm, when we started the law firm we were handling a lot of construction litigation and that was in the ’90s when there was a construction boom here in Orange County and all over Southern California.
Of course, what we foresaw would happen because of the real estate boom and market (being cyclical) and even construction is cyclical that ran for a seven-to-10-year cycle we saw the real estate market (would) take a dive and with that construction, new construction.
It’s really having an understanding of what the trends are by speaking with people in the industry or reading the news publications and anticipating in seven years time this very busy construction arena is going to slow down, and with it, the litigation will slow down. We foresaw that and early on diversified into other areas of litigation. One of the areas we got into, for example, was employment litigation. That was an area that we got into that turned out to be a good area of practice.
Look at your company’s and your own goals. From my own experience with my law firm, we look to our own needs and our own goals. Every business has to have in place specific short-term and long-term goals. Are those goals to try to grow or at some point stop growing? I think that’s a very individual specific question, and the leadership of the business needs to, again, have short-term and long-term goals that are specific to the business.
I think the question is, ‘Where do we see ourselves as a company in five years? Where do we see ourselves as a company in 15 years?’ And then, for the individual business owners, I think individually you have to say, ‘Where do I see myself in five years and 15 years? Is my goal to keep working around the clock or do I want to be able to, at some point, back off? Do I have other up-and-coming leaders within the company who I want to step in and start taking over so I can step back a little bit and perhaps spend more time with family and more times with hobbies and so forth?’
It’s both an individual and a company goal that needs to be examined.
Hire flexible employees and mentor them in order to diversify. Surrounding yourself with good people, hiring good people, hiring people who have good vision, that is key.
I think the past is the best predictor of the future. Obviously in the interview process a lot of these issues can be discussed. But, you want to look at how the individuals have performed in the past with their previous employment.
A law firm is more of a calling in a way we like to hire lawyers young, and then we like to mentor them and train them. All of our partners have really come up, grown up through the ranks of the firm.
So I think if you have in place a good fundamental firm philosophy and you’re taking the time to train and mentor your young people, you train them in those ways, and hopefully you can make good leaders for the future.
How to reach: Bremer Whyte Brown & O’Meara LLP, (949) 221-1000 or www.bremerandwhyte.com
If you are a management-level employee at Advanced Bionics LLC, it’s probably not because Jeff Greiner made you that way.
Whether he’s hunting for management talent internally or externally, the first thing Greiner acknowledges is that there is only so much he, the president and CEO of the 650-employee cochlear implant development company, can do to mold the next generation of leaders. Ultimately, you need to be a judge of competency and character, not a creator of it.
“What I’ve learned in the last 20 years is that the selection of the people is the most important thing. If I’m selecting people who have 20, 30 and 40 years of experience, I’m selecting people whose values and personalities are already shaped, so there is little I can do other than select the right people,” Greiner says.
Smart Business spoke with Greiner about how you can learn to identify the best leaders in your organization and why you should look to hire leaders, not create them.
Know your limits. The notion of a leader shaping the team is overblown. The notion of a team’s performance being determined principally by who they are as people, in terms of their character, expertise and energy, is probably not stated enough.
You see the tremendous number of leadership books out there. Most of them are pure crap in terms of the leader’s ability to shape people. What is not crap, and I’ve never read the book, I’ve just learned it as I’ve gone, as a matter of principle and a matter of my own life experience, is the notion of going out and trying to shape the team into a greater team. The notion is you take C players and you make them B’s, or they’re not on your team anymore. That is a correct idea. If I do that with my leadership team, as such that people have the kind of character, expertise and commitment that is necessary for us to be successful or I get them off the bus, that is a correct notion. But the idea that you shape them, that you influence them tremendously on a daily basis and change how they operate, is way overblown. It’s basically not true.
Twenty years ago, I thought I was really good at the selection process. But I guarantee I haven’t been any better than a 50 percent success rate. I’m talking about building a company from scratch. When you’re building a company from scratch, you have to go outside, you have to go through the interview process. You can ask all the questions you want, but until someone is out there doing the work, you’re not going to be sure if they can do it with the kind of expertise that you need. You’re not going to see that until someone is in a place where they have something to win or lose. That’s when you really see their character, so gaining that kind of picture of a person is really a tremendous challenge.
As for people on the inside, that is all about identifying the characteristics that you want in a leader and observing them over time. Internally, your record should be 80 to 90 percent success when it comes to internal leaders, because you’re observing them constantly, you’re seeing them over time.
In our organization, we have vice presidents, directors and then managers. Whether someone at the director level can become a vice president, you ought to be able to make a choice in that regard. That is a much easier task to identify people within the organization who are going to do what you think needs to be done, than trying to build something from scratch and hiring the right people.
Be willing to correct. You have to know what you’re looking for in a leader, and you have to have the courage to admit hiring and promotion mistakes early on. If you make a mistake hiring for a leadership role, you have to be willing to turn around in the first three months, or at least the first six months, of the leader’s tenure. That’s a hard thing, but it’s something that you get better at over time. It does depend on the personality of the leader. I don’t want leaders in here who are quick on the trigger. I want people to appreciate that we’re all human, we’re all flawed, but there are certain fundamentals that a leader has to have.
Fundamentally, a leader has to have integrity, and not everybody does. Fundamentally, a leader has to have the expertise to drive a particular function, and sometimes it’s difficult to figure that out. As a CEO, you’re not necessarily knowledgeable about every function that reports into you. Fundamentally, you have to have a work ethic that makes this more than just an 8-to-5 job, because nobody succeeds with that mentality. Those are some of the fundamentals of what you’re looking for, but it takes time to get better at identifying those things.
Develop a support system. You have to have the discipline to critique your own hires. But you also have to have support on top of you, too. If you have any kind of dysfunctionality on top of you, it makes your job that much more difficult. If you’re a CEO, you have to have a board that you have developed and with which you have developed a sense of trust. They trust that you are going to make the right decisions, they trust that you are going to communicate with them as to why you’re making these decisions, and if the business is going in the right direction and they perceive it, that strengthens the trust.
All along the way of building a company, there are going to be ups and downs, so that trust might be stronger or weaker depending on where you are in the building of the company. That affects your ability to move forward with some of the tough change decisions that you make.
How to reach: Advanced Bionics LLC, (877) 829-0026 or www.advancedbionics.com
Every employer has a vested interest in the well-being of their employees. But Dick De Witt says it’s how you show that interest that can really make a difference.
De Witt is the president and chief operating officer of Marketplace Chaplains USA, a provider of chaplain services to businesses throughout the country that has $12 million in revenue. From his perch, he’s seen business leaders with many different kinds of leadership styles.
In his experience, the best leaders don’t just take care of the employee who works between 8 a.m. and 5 p.m. They take care of the person with a life apart from work, which, in turn, helps create better employees.
“I lead with three E’s: engage, empower and encourage,” De Witt says. “As a leader, you have to be touching your people, and in the process of getting to be with them, you understand what their strengths and weaknesses are, and you want them to use their attributes to the best of their ability.”
Smart Business spoke with De Witt about how you can build better employees by showing that you care.
Live the three E’s. Engaging is a matter of communicating with employees on many different fronts and making in-person contact with them as often as you can. Empowerment is a matter of building up and augmenting the strengths that each one of us have. We all have weaknesses and we all have strengths, so to find those and be sure the giftedness that is present in each person is used to its fullest extent. My job as president and COO is to bring those skills out, draw attention to them and encourage them in the process.
The encouragement side is really a matter of so many attaboys. We do not use monetary rewards since we are nonprofit and our chaplains are more driven by helping people day in and day out.
You do need to show a genuine and earnest interest in your people. Most leaders do that. But in doing so, there has to be another mechanism by which you can get to the heart of the matter with a person.
Someone can put their best game face on for a good interview, but who are they really on the inside? As a leader, if you can get closer to that real person, that real employee, that part of the team that you really care about and are investing in, you’ll have a better employee who is not going to be distracted, who is not going to be absent, who is not going to leave after you’ve invested in them and trained them to be ready.
Look outside the organization. The stuff of life that drives each employee, if you’re the leader in a corner office, you’re never going to hear it. You might say that’s why you have HR, to find those things out, and they might do a great job. But it might also help if you have an outside party to help get a grip on some of the real sometimes ugly things that affect your people in life. In a lot of instances, people in a company might not want or have the opportunity to tell the boss what is going on in their lives. That’s why I think it’s important to have someone in a company, an employee advocate, who is from the outside and not on the payroll. Because there is always the possibility of that fear of telling someone on the inside, that it’s going to find its way up to the boss, and they don’t want that to happen, for whatever reason.
Every business leader today needs to be focused on one employee at a time. I’m appearing in this issue of Smart Business, and to me, smart businesses are always looking at their employees and taking care of them, both at work and, when possible, away from work.
We go to work, we have to work at each of our jobs, but we also have a family and a life that drives that presence, and if you show up to work thinking about medical problems or an argument with a spouse, a child in trouble or your personal problems, that is going to hold onto you, and you need a way to talk it through. Once you can somehow open that up, make that connection with employees, talk it through with someone who they know will not use anything against them, it is enlightening and freeing to the point that it could revolutionize what we do in corporate America.
Realize what is at stake. The fact of the matter is that the government says that every single employee represents $4,500 worth of fraud a year. You think about absent employees, unplanned absences, the so-called Monday morning flu, costs a company a lot of money each year. You talk about turnover and keeping talent, the battle for talent is very real, so if you have an employee who feels that he or she is not appreciated, not cared for, there are a lot of other companies looking for top talent, and that top performer could go there.
If you put methods in place to care for employees emotionally, physically, spiritually, whatever they need, it creates a definite culture shift within a company. We see it all the time. It’s the difference between wanting to go to work and having to go to work. The employer becomes someone more than just that person who sits in the corner office and tells you to get the work done. They become the person who realizes that it takes special people to do the jobs they do, and employees realize that the boss will care about them and what is going on in their lives.
How to reach: Marketplace Chaplains USA, (972) 941-4400 or www.marketplacechaplains.com
Until one of Tom Baugh’s managers pulled him aside to say employees didn’t understand the company’s direction, he had no idea his communication was failing.
Out of the conversation came an early lesson in Baugh’s role as CEO of Marketplace Events LLC: In order to get your message across to employees, you need an effective and uniform communication style.
Baugh’s analysis drove him to start the “Monday Morning Update” to communicate with his 100 employees based in 11 offices and two satellite offices in the U.S. and Canada. He uses the e-mail message to update employees on everything, from company performance to his personal life, and as a mechanism for feedback.
“There’s no great technology involved, but it’s extremely consistent, and I think people have come to rely on that consistency,” he says.
He credits the consistency in helping the producer of consumer home shows expand in the marketplace, including this month’s The Great Big Home & Garden Expo.
Smart Business spoke with Baugh about how to reach scattered employees.
Set communication as a priority. We said an important part of our culture is open communication, and we don’t have the luxury of people being able to kind of think that if they’re concerned about something, we’re going to pick up on it because, physically, we don’t have enough people that can see how people react and feel on a daily basis.
We knew we had to work twice as hard to develop a culture of we were going to be straightforward as a management team and we wanted them to communicate back up through the ranks.
I’ve gone in front of the company, in front of all the employees, and said, ‘Listen, I am really good at several things. I’m really good at leading at times. I’m really good at communicating at times.’
But I said, ‘I can’t do any of this as well as I’d like to nor can you do your job as well as you’d like to unless we agree this communication has to go both ways.’
Although you’re not physically with all your people every working day of the year, I think it’s possible to build a culture where they’ll communicate honestly, and certainly when present, they will.
Pick a communication style that everyone is comfortable with. More than anything I think it has to reflect whatever the senior manager is comfortable with. For me, I’m comfortable writing; I’m also comfortable doing. I will do brief video clips.
I think the tool that’s used really depends on the manager, on the CEO. Trying to force a communication tool on a CEO that’s not comfortable using it, to me, there’s going to be a level of frustration that sooner or later people are going to pick up on. That’s certainly the last thing I would want.
Our people know that I’m really comfortable writing, I’ve got kind of my writing style. They also know that I’m comfortable in front of a camera, and they know if I’m doing it on camera it’s got to be something that’s either really important or kind of silly or whimsical like for a Christmas message or a Thanksgiving message.
We do teleconferences, and I will get on the phone with folks and I’ll say, ‘You know what, we’re going to go through the message, and I know I’m not going to get any questions at the end of it because I know I’ve got 100 people sitting around conference tables in 11 different offices. And who wants to be the first to ask a question.’ So much depends on the CEO and the nature of the business and the physical set up.
I would think that feedback would be critical (for determining communication styles). I get feedback all the time. I just gave a good example the teleconferences, our people hate them. They hate them because it’s not a format that really works well for us.
I learned early on that me doing a lot of conference calls, tying up everybody across three time zones in different offices, was not a good idea.
Make sure the employees got the message. I do think a CEO can have a significant impact on the culture, the direction, the vision of a company. I do think to a certain extent, however, that the greater personality, the greater effectiveness comes from the people that surround the CEO.
I guess what I’m getting at, the only way you’re ever going to know if the message gets across is if you have people around you that you trust to not only transmit the message but also be able to support it, further refine it and explain it.
One really good CEO who has a weak management structure underneath them can only do so much.
The key to our company is our show managers, and if we had layers, that’s the third layer. So we spend a lot of time trying to make certain that our show managers get it.
We find it’s not that hard (to measure whether the message was heard). The metrics will be different in every business. We’ll see it immediately with sales numbers; we’ll see it immediately with satisfaction numbers from exhibitors. You can tell it on a show floor.
Understand the importance of consistency. For a CEO, I think consistency means everything. The pressure on a CEO now is so much greater than it was three or four years ago because this is a different business model, this is a different world.
The consistency is noticed by people. It’s when there’s stops and starts, when there’s, ‘Oh wait, this was the message six months ago, but we’re going to do this.’ It’s a whole notion we are building this thing at this company is it on a solid foundation or a shifting foundation. And at least for us, I can’t say about any other business, our consistency is our strength. There’s no doubt in my mind.
How to reach: Marketplace Events LLC, (866) 463-3663 or www.marketplaceevents.com
When Scott Willett took over leading Willett Honda South from his father, he had his fair share of problems to deal with.
“He had gone through several general managers, and it had some horrible customer service scores in fact, some of the worst in the country,” says Willett, who owns the dealership. “That took a long time to turn around.”
The dealership, which had $74.4 million in 2008 sales revenue, eventually changed. By focusing on customer service and having solid people in place, the organization won the President’s Award in 2008, which is Honda’s highest award given to dealers.
“There were 10 dealers that got a perfect score on that out of over 1,000 dealers, and we were one of those 10,” Willett says. “That was a big accomplishment for us. We’ve been working on that for 10 years. I took over the store in 2000 … so that gives you an idea how long it took to get that turned around.”
Smart Business spoke with Willett about how to lead a turnaround in your business.
Get the right people internally. It starts primarily with the top down. I have interest in the dealership, so I take a lot bigger interest in my customers, and once the dealer takes an interest in the customer, then you have to relay that down to the people below you and get the right people that agree with your philosophy in business. That was the biggest thing was just getting the right people and training those people on how to handle problems and how to prevent problems. It’s a lot easier to prevent forest fires than put them out. Generally, I try to bring everybody up within. It gives the people who come on board an incentive to do well because they know that at some point in time, hopefully they can work their way up in management.
Hire other good people. It’s hard to teach an old dog new tricks, so to speak, so I’d try to get someone with a real open mind who’s willing to learn new things, that believes in the same principles as I do. My father was very successful in the car business, and he got that way by fulfilling promises to customers and not taking advantage of a customer and treating them right. It’s important that they have those same philosophies and then work with them and have the patience to have them gel.
An interview, there shouldn’t just be one. There needs to be a couple, and you ask a lot of questions. A lot of times in an interview, it’s the [person doing the hiring] talking about the business and trying to sell the prospective employee on why to come there. My philosophy is to ask questions of that perspective employee and just listen to their answers. It doesn’t take long to figure out what a person’s made of if you ask the right questions, like, ‘What’s your business philosophy on a customer, or how would you go about selling this individual, or what are your strengths or weaknesses?’ and they’ll pretty much tell you, and a lot of times they’ll try to tell you things, but generally, you can see through a lot of that.
Gather ideas from employees. Listen to your employees and get them incentives to come to you with their ideas rather than have them be scared of either being ridiculed for that idea or scared to bring it up for fear of it being rejected.
You’d be absolutely shocked at what great ideas employees can bring to the table if you just ask them. The auto industry has been impacted probably more than other industries, other than homebuilding, in the United States. We had to come up with some real creative ways of reducing expenses and increasing profits to be able to survive the environment.
For example, we have about 75 employees, and I would probably venture to say we have about 30 computers in the dealership. None of those computers turned off at night. It’s a simple program that you can install or activate on the computer for everything to turn off after a certain hour. That can save us thousands of dollars a year, but believe it or not, it took an employee to come up with that idea. There’s little things that can add up.
Get employee reaction and come up with an incentive based program where they don’t just shoot from the hip, and they put some serious thought into what the dealership or what they can do or what the department can do to increase revenue or decrease expenses.
For example, it might be a cost-saving idea that somebody comes up with, and we have a bonus that whatever that saves us, we’ll give the employee 50 percent of the savings for the first month. For example, if they come up with an idea that can save us $1,000 a month, that employee would get $500 that month as an incentive for coming up with the idea.
Improve customer service. Take the time to hire somebody to do a quick phone survey to get the customer’s perspective on how the experience went and then to track that. You can’t expect what you don’t inspect. We get the surveys, we track the surveys, and when we see something below the standards we feel a customer deserves, then we drill into it.
You can hire somebody for probably $8, $9 an hour to make phone calls, and you’ll get enough people to respond to your survey that you get an idea of what’s going on. Then just have meetings and identify problems and make procedures to correct the problem.
Let’s say, for example, the customer picks up their car in service. Was it picked up on time? Did they have to wait five minutes? 10 minutes? We track that, so if we get one per month, more than likely that was an individual problem, but if it’s more like two or three, that’s a procedural problem and we try to drill into that right away.
How to reach: Willett Honda South, (778) 968-1500 or www.willetthondasouth.com
Rebecca Boenigk admits she’s not good at hiring. That’s why she has someone else do it for her at Neutral Posture Inc. But she’s not afraid to admit that hiring at the company, which posted $24 million in 2008 revenue, is an area where she is weak as a leader. In fact, leaders who can recognize their weaknesses will be a lot more successful than those who turn a blind eye to their faults, she says.
“This is true whether you are an entrepreneur or somebody in the corporate world,” says the co-founder, chairman and CEO of the furniture company. “Most people don’t like to talk about their weaknesses. I think that is why some people fail at being leaders just because they don’t know when they need to delegate to someone else. Then, once you do delegate, you have to give that person the power and the authority to do the job.”
Smart Business spoke with Boenigk about how to delegate and create the type of culture to empower those whom you’ve delegated to.
Ask employees. I would think that most people can at least be honest with themselves to know where they succeed and where they don’t.
Usually the people around you will tell you if you are willing to ask and you can do it in a way that’s not confrontational or threatening to them. My office is always the worst place to have a conversation because there is something about walking into the CEO’s office that just puts people on edge. I’ve never yelled at anybody or screamed at anybody, but I think you just have that persona as the CEO.
I think that sitting in the break room having your lunch or even having a beer sometimes you can ask, ‘Tell me who you think would be good at taking on more responsibility, and what do you think that they could take?'
It gives them the opportunity that they can include themselves in that conversation if they want or they could just recommend other people that they think are able to take on those responsibilities knowing that some of those responsibilities are yours.
Monitor what you delegate. If you delegate something that is huge, you have to follow up. But your follow up is more of a, ‘Why don’t you give me an update of where we are on that?’ One of the things I tell my staff is, ‘I don’t want a dissertation. I want the key things that are helping you or hurting you. Let’s fix the things that need to be fixed. Are you stuck on anything? Do you need additional help somewhere?’ But very nonconfrontational. More along the lines of, ‘Just give me an update.’ If you give somebody the job and responsibility, you have to let them do it. You have to let them fail and succeed.
Get other opinions. When we have any kind of project or even a process change, we get people involved.
One of my failures at this recently was I decided I wanted to be really green. So I sent an e-mail to my IT guy and said, ‘I want you to change all the copiers to automatically print on both sides.’ That’s the default. So if you don’t want it to print on both sides you actually have to click and change that you don’t want it to print on both sides. So he did that because I’m the CEO. I said, ‘Do it,’ and he did it.
Well, the uproar was huge because I didn’t think about the fact that when we get a chair order, it prints up what we call a pick ticket. That goes to the floor so they know what to build and that stays with the chair the whole time it’s being manufactured. Now you have two orders on one piece of paper. Invoices were printing front and back.
So it’s just one of those things I made a decision in a vacuum. I didn’t talk to anybody and caused complete upheaval.
(I learned) that I don’t know it all and that there are a lot of processes and procedures that happen now that I’m just not in that everyday part of the process. I made this change in vacuum without talking to anybody else and screwed stuff up. Within 30 minutes, we changed it all back. You really have to be a consensus builder with your organization.
Create an open culture. You really have to have complete trust. Your people have to trust you, and you have to trust them. As soon as you start second-guessing, then you go back to the nontrust situation and you’re not going to get there. For us, it started out with just me and my mom. As we added people, they became more like just a big, extended family. So it’s easier if you start that way than if you go into a situation where now you don’t have a great culture and you have to change.
It’s hard when people don’t trust you to earn their trust again. Most people walk in the door thinking, ‘This is good and my boss is good.’ It’s how you treat them and then they change their mind and say, ‘Maybe my boss isn’t so good. So maybe I don’t need to be quite as loyal.’ So I think that culture is a very hard thing to change. One person can upset that culture in amazing ways. Over the years, we’ve tried really hard to get rid of those bad apples as fast as possible.
What we’ve found out is that you get rid of one attitude and then another bad attitude kind of rises to the top. They’ve had a bad attitude for a while, but they weren’t as bad as the other one that you just got rid of. Sometimes it takes awhile to weed out those people, but it doesn’t matter how valuable you think that person is. If they are ruining the day of other people and you do nothing about it, then you are taking full responsibility for having a crappy environment.
How to reach: Neutral Posture Inc., (800) 446-3746 or www.neutralposture.com
For Joseph A. Cutillo, the big picture is just a starting point. He zooms in on the brushstrokes that create it, too. So when it comes to making acquisitions, he looks beyond the books of business to consider how people are impacted by the change.
“People grossly underestimate cultural clashes,” says the president and CEO of Inland Pipe Rehabilitation LLC. “If the culture is diametrically opposed to your culture, even though both businesses are good, it’s going to be a hell of a lot harder to make that successful in the long run.”
Since stepping into the position in October 2008, Cutillo has made one successful acquisition, with another slated to close soon. He continues to actively pursue other additions to grow the underground structure reconstruction company, which had 2008 revenue in excess of $107 million.
But he doesn’t let his expansion strategy fog the human factor. His priority is helping his 445 employees assimilate to the changes.
Smart Business spoke with Cutillo about bringing acquired employees on board as quickly as possible.
Address people’s concerns. [The biggest challenge is] getting through the emotions. An acquisition sometimes is like a death. You can’t deny that people are going to be shocked or may be upset or angry or concerned. The key to success is getting them through those stages as fast as possible.
You have to understand what emotions the acquired company is going to go through. First, the simple thing of: Do I have a job? Second, I’m on this team that I maybe have been competitive with. What are they going to expect from me?
The beauty of an acquisition is there is a high level of expectation from the company that’s being acquired that changes will happen. Because people are expecting the worst, you can usually capitalize on that. You create an excitement out of it versus a worry. The longer you wait, they assume that there’s not going to be any change, and then if you start making changes, you actually have a backlash.
I always use the analogy when I go in with a new team, I say, ‘This isn’t [like] you’ve been sold out to the enemy. You’ve been traded to another team in the NFL or the American League. You’re still a great player. You just wear a different jersey.’
To make an acquisition successful, you have to go in very, very rapidly. We generally meet with the entire team the very first day of the acquisition. Talk to them about their future. Let those that are staying know they have jobs. Let them know what their bonuses are going to be, what the expectations of the company are of them, and then bring them on board and assimilate them as quick as possible so they are part of that.
We will generally have the highest level of the organization participate in those so we can answer as many questions and get as much out in the open and make decisions quickly if there are concerns.
One of the things we’re working on right now for an acquisition [that] we’re getting ready to close is a welcome package in a box. It’s going to be everything from shirts and hats and coffee cups to policies, procedures, handbooks, benefit packages. You get through all of that as quickly as possible.
Get buy-in on changes. At the same time, you’ve got to make sure that you don’t come in as a conquering nation. One of the biggest challenges as the acquirer is making sure the organization doesn’t come in and lose the things that are actually done better, and then we back-adopt those into our culture.
They’ve got to feel that they were bought for a reason. It’s important that we articulate that to them and they’re excited that they’re part of the team, not scared.
What we have to do early on in communication with the business being acquired is we say, ‘Look, there are things we bought you for that you are doing better than us. And there are processes and procedures that we are doing that are better than what you’re doing. We are going to put those in place and we’re going to also steal shamelessly the stuff you do better, so you should be proud of that.’
We have members from that regional team participating in the due diligence. It enables the team to come back and say, ‘What these guys are doing for maintenance is a hell of a lot better than what we’re doing.’ Our organization will accept it because we’ve recognized it; it’s not being forced on them.
We’ll also split crews. So we’ll take people from the acquisition and we’ll put them with teams from our company to work in a given area together. It’s not just a matter of telling them, ‘This is the way to do it,’ but they can physically be involved and see firsthand that it’s better. If people see it work better, they’ll adapt to it much quicker than if you tell them in a meeting room and just ask them to go out and do it.
Provide ongoing support. We don’t make an acquisition that’s going to sit out there as an island. We’ve set up a geographic regional structure so that we have a regional vice president. We’ll generally put in a project manager or two from our other business. We’re not overbearing on them, but we have our checks and balances in place.
We try not to set them free completely. They’ll always report in, in some way, shape or form. If you let them run on their own, they will do things that you don’t want them to, and it’s more difficult to correct after it’s done than beforehand. That’s why we went to the regional structure, so that we could tuck these acquisitions in and still have that local overarching support.
We try to put processes around it as much as possible, but there is a human side at the end of the day. There’s some coaching that will take place. There are more one-on-one conversations that will take place [with struggling employees.] Don’t prolong it. Get 80 percent of the way there as quick as possible and you’ll be able to work through the other pieces.
How to reach: Inland Pipe Rehabilitation LLC, (313) 899-3014 or www.inlandpiperehab.com
Having an open-door policy is so important to Claire Zangerle that she literally removed the door that separated her suite from her employees. Then she knocked down a partition that blocked the view of the sitting area.
When Zangerle was named president and CEO of Visiting Nurse Association of Ohio in July 2008, she knew the position would require a culture shift. To emphasize what she was communicating to employees, she took the extra step of physically showing them her door is open.
“You have to be accessible to anyone and everyone in the organization,” says Zangerle, who has 783 employees at the $55 million organization. “To me, that’s an expectation of any leader.”
In order to have an effective open-door policy, guidelines need to be in place, including setting aside time and articulating what issues employees can bring through your door. However, even if they’re coming to your office, you can’t underestimate meeting employees on their turf.
Smart Business spoke with Zangerle about how to open your door to employees.
Invite employees through the door. I write a short, weekly update letter to all the employees, it goes out through e-mail and it’s posted on our intranet site. At the end of my letter every single week, I offer the simple open invitation.
You always have to open the invitation. I always end my letter with, ‘You know where to find me. My e-mail is this, my cell phone number is this, my extension is this, and my office is on the third floor.’
I think a simple open invitation in the beginning, some are going to take you up on it, some aren’t going to believe you mean it, but then there are some who totally overuse it.
Once they come through the door themselves or hear about one of their colleagues that have come through the door, it’s not that difficult.
Set a schedule, but remain flexible. Truly to be the most effective having a dedicated time for the open door is the best, but things come up on an emergent basis so you really have to be prepared for that.
I block off Friday mornings or Wednesday afternoons that’s when I’m in my office doing some work, stop by or make an appointment with my secretary or whatever is best for you. But I don’t want to discourage people from coming to me on an emergent basis either.
That happens a lot. That’s where you have to use your judgment depending on what the issue is.
Work with your assistant to say, ‘OK, if this is something I can address immediately, and I’m doing something else, then tell them I will get back with them within this amount of time.’ Give them an idea that, yes, you will get back with them.
Make your policy clear. I make it clear to everybody that I’m not going to fix all of your problems, but if you’re coming to me to brainstorm or make me aware of a process that can be improved to make the organization run smoothly, then bring it on. They know they don’t need to come to me to tattle or gossip or whine because I don’t tolerate that. You need to go through the chain of command if any of that is going on.
The best thing to say is put a sign on your door that says no tattling, no gossip and no whining. You’ve got to be clear … (with) what you’re going to address as the CEO because generally the people that come to you are not going to be your management and leadership level because you talk to them all the time. The people who are going to come to you are going to be the front-line folks, and those are the people that need to know that I am not here to resolve the issue of somebody stealing your lunch out of the refrigerator.
I have people who come to me who complain about their managers, I’m like, ‘Look, you have a chain of command to go through.’ If you have an issue and unless it’s a terribly abusive situation, which generally it’s not, then you need to go through the chain of command.
Be careful not to undermine management. This can be an issue if it’s not handled delicately because truly if the management team is paranoid that their employees are coming to leadership with issues, then obviously we have a problem with management.
I struggle with not wanting to fix something that (employees) perceive as broken right then and there because I have the authority to do that, but then that does undermine management. So I have been very careful to let the process work (itself) out.
I have reassured management just because employees come to me they don’t need to be paranoid.
Meet employees in their own environment. It’s important to meet people where they are instead of where you are. I think that’s important both literally and figuratively.
Literally go to their place of work. It doesn’t have to be in the CEO office, which really frankly is more intimidating at times.
Then, figuratively meet them where they are. If an employee brings an issue to you and clearly it’s one that you don’t agree on as a leader, you have to listen to their side of the story and be respectful. Be open to changing your mind.
It’s more of a priority to go find out what’s going on in the field and with your employees than staying in your office. Sometimes our offices become our sanctuaries because it protects us from the outside, but you know all the work occurs outside of the office.
This is my greatest leadership challenge, wanting to fix something on the spot instead of letting others work through it and solve it on their own. It’s not because I think I have all the answers, I just want to make sure my folks are relieved of the stress of the process, but the process is valuable for them to work through.
You learn all that when you go out and meet them, not just when they bring the problems to you.
How to reach: Visiting Nurse Association of Ohio, (216) 931-1400 or www.vnaohio.org
In most years, Stan Kryder would set an annual budget and business plan and stick to it for the whole year, but now things are a little different for the president and CEO of Midtown Bank & Trust Co.
“We’ve gone to a much more dynamic and shorter-term review of our budget, where we literally, once a quarter, sit down with our board of directors and review it and make changes to our business plan once a quarter because the market is much more dynamic right now,” Kryder says.
Given the changes in the economy, this different approach to running his bank, which had $212.6 million in total assets at the end of 2008, is helping him ride out the storm. And while he rides, he’s trying to keep his 34 employees upbeat and positive about the future, as well.
Smart Business spoke with Kryder about how to build for the future while today seems bleak.
Keep people positive. It’s really getting people to focus on the things in their business and their personal lives that they can control and to really work on those.
Each day, there are certain core principles in each company that a company is really good at or that they can control, so focus on those things and separate out those that you get inundated with but that you truly cannot control.
Each of us may have periods, whether it’s on a daily basis or it’s at some point each week, where you’re dealing with a difficult business situation or difficult economic situation, and you do that privately, but when you go out of your office, you transition to a coach and cheerleader to be positive and create new opportunities and new business and really separate those negative things that are still having to go on. Everybody needs more positive reinforcement in the difficult times than they do in the good times. It’s playing that role of the coach and cheerleader to keep people upbeat.
Sometimes it’s stepping out of our role as a traditional leader and, in some cases, improvising and trying to find fun ways to motivate people. Everybody has a different way of doing that but try to find a way to keep people upbeat and maybe try some nontraditional ways of motivating people some fun games and fun contests. Anything that helps add some spirit and novelty to whatever your business is.
The leader puts him or herself out there and sets the example of trying to model whatever the behavior is as opposed to just asking other people to do it. In a case of sales, if I’m a sales leader and I’m asking other people to do it, then I want to model that behavior, too, and be bringing in new accounts to be modeling right behavior as opposed to asking other people to do it. If people see that and you can have success in a difficult time like we’re all in right now, then it truly says, ‘Wow, things are tough, but there are things we can do that’s positive.’ It’s the little things that then begin to add up.
Look for new opportunities. Today, we’re all struggling in our businesses to survive the economic downturn but also to look for trends and changes in our respective businesses so that when the recession is over, you’re better positioned to grow and build your business than if you remain static. As difficult as the operating environment is for everyone right now, it’s a great time to find those niches and opportunities for growth.
There are a lot of different ways to do that depending on your business. For a number of them, we can all take a bunker mentality, where we stay inside our company and just hold down the fort until the recession or the storm is over. Instead, it’s a great opportunity to go out and prospect for new business, to consider new products and new lines of business, and do some thoughtful kind of strategic planning, even though everybody’s business is down because, at some point, the market will turn, and you want to look for those opportunities to expand your business and grow your revenue. Now’s a good time to do that while business may be slow.
Some of that is just brainstorming and market intelligence. What are people seeing in the market? What are your prospective customers asking you for? What are they struggling with in their businesses? If we can solve what they’re struggling with, what would that look like? What products and services do we need to create that would help small-business people in particular with the things they’re struggling with?
It’s really spending a lot of time in their offices or their plants whatever the case may be learning what challenges they have in their businesses, and in doing that, you have to truly understand their business and spend a lot of time in their shop. If you do that and you bring that knowledge back, then you can better equip your business to again figure out the products and services that that customer needs. You’ve got to go on-site and walk and learn the business. You want to learn about their customers and what their customers are looking for right now, what kinds of things they’re having to do to satisfy their customers is it a slightly different product? Slightly less expensive product? What adjustments are they having to make and what things are they struggling with?
Prioritize the ones that keep coming up the most reoccurring and the loudest, and focus on those the fastest so we can have more positive impact to our customer. It’s like anything else, to get the feedback and synthesize it and prioritize it, turn it into a product or service and get it back out to those customers as quick as you can.
How to reach: Midtown Bank & Trust Co., (404) 969-4400 or www.midtownbank.biz
You could say Nicholas Saraniti’s company has split personalities. From the inside, it looks like a growing corporation with high-tech systems and structures. But looking in on Commcare Pharmacy from a customer’s perspective, it seems like the same small company it’s always been.
That balance is intentional, and Saraniti’s challenge as CEO is maintaining it so customers can’t see the difference between 2005 revenue of $7.3 million and 2008 revenue of $56.7 million.
“It does you no good to bring on an extra couple million dollars’ worth of business if you can’t continue to provide service at the same level you do today,” says Saraniti, who leads 60 employees at the pharmacy. “You will hurt yourselves in the long run by not providing the high level of service that your clients have come to depend upon.”
Smart Business spoke to Saraniti about balancing the internal structures that growth brings with the personal service only a small company can provide.
Serve like a small company. From your clients’ perspective, they tend to like that small mom-and-pop, family-owned business feel. They think they get better service. People know their names; they put a face on the business. Maintaining that as you grow and expand is probably the most difficult thing we do.
So internally, you’ve added all these controls and you have policy and procedure and regulation that govern how you do certain things. But from the outside, you don’t want it to look like that. You don’t want to look like a big corporate Microsoft. You want to look like the family drugstore on the corner to your customers.
First of all, we give them a dedicated internal contact here. So they have a troubleshooter that works for them inside the pharmacy and they help them navigate the entire process from beginning to end.
Anytime I have a meeting with my staff, I always remind them that in our personal lives, we’ve all been on the other side of health care, and it was horrible, and we were treated like children and nobody told us anything that was going on. We don’t ever want one of our customers leaving here feeling that way, and we reinforce that continuously.
It means maybe making your (corporation) more transparent so your customers aren’t involved in any of the bureaucracy that comes along with that. Here we use a lot of technology to make that happen.
So maybe up on their computer screen when [employees] type in a patient’s name, it pops up all the communication that’s occurred from anybody within our organization and that client within the last couple of months. If their birthday was last month, they could see that immediately and mention that to them. Keeping all that information readily available in one place enables my employees to build those personal relationships.
But one of the things we haven’t done — and we won’t do — is automate our phone system. You never call our business and get some sort of automated voice response attendant. I hate those. Everybody hates those. People use those because they don’t want to talk to their customers.
... We’ve chosen, instead of doing that, to hire more expensive and more employees to answer the phones by hand and physically take those phone calls. From a customer’s perspective, that’s a great thing because they get to talk to another human and explain their problems to another human, not leave it on a voice mail or have to press 16 digits every time they call us.
Improve internal structures. Employees like structure. Typically, they do better if they know exactly what’s expected and exactly what to do. I find that involving them in the process of why the changes are happening makes things go much, much easier, not just delegating these changes to them.
We also use that same kind of technology whenever we have a change in our work flow. We’ll obviously meet with the employees. We’ll explain to them, ‘This is the change; most importantly, this is why we’re making this change.’ And on top of that, we will put some check in place technologywise to ensure that those changes are actually occurring. Maybe it’s as simple as a reminder just saying, ‘Hey, did you put a customer care survey in this box?’ Or maybe it’s something more serious, along the lines of, ‘We’re not even going to let you print a shipping label for this yet because there’s no proof in the system that you’ve talked to this patient yet today.’
We involve our employees in the process as much as we can in the decision-making process. When they ask questions, give them truthful answers. Don’t just tell them to do this and do that. Take the extra time to explain to them, ‘This is why we’re going to do things this way now. This is what we’re hoping to accomplish. Become part of the team and let’s do it together.’
Limit changes. When we’re planning our growth, we look at not only how our process works today but how it would work if we had twice as much business. So we’re not constantly having to go back and redo policy or work flow over and over and over again with employees.
Going from one physical business to two locations was a huge jump for us, and we made lots of changes to accommodate for a second location. When we made lots of those changes, we didn’t account for ever needing a third location. So we basically had to go back and redo everything we had just done. So when we added that third one then, we made sure that as we added future ones on, the systems were in place so that they wouldn’t have to be redesigned.
Just [take] a couple extra days or a couple extra weeks, a little extra thought before you actually implement something. Look at how it would work if you had twice as much business as you do today or twice as many locations as you do today, and take that into account.
How to reach: Commcare Pharmacy, (954) 332-6170 or www.commcarepharmacy.com