Fundamentals. Vision. Strategy.
Nancy Schlichting knows they’re all business buzzwords. You execute on fundamentals, you strive for your vision, and you focus on your strategy. You teach your team about it, you reinforce it to them all the time. After some time, just hearing those words is enough to make your eyes glaze over.
But before you dismiss them as a few others in a long list of business clichés, Schlichting thinks you should reconsider. Every business needs guidelines, beliefs and practices that provide a template for how management and employees should operate on a day-to-day basis.
Without some kind of outline, a business has no direction. Which is why Schlichting structured her strategy and vision around the fundamentals that she wants to promote at Henry Ford Health System, the $4 billion health care network where she serves as president and CEO.
“We always start with our fundamentals,” Schlichting says. “We have seven pillars of performance that are really constant for us. Every year, we have to focus on our people, patient safety, service, growth strategies, our academic mission with research and medical education, a strong focus on the community and a strong focus on continuing to be stable financially. Those pillars really form our base. If we don’t perform well on those, there isn’t going to be money to make new investments and new strategic changes for the better.”
To allow everyone at Henry Ford Health System to execute on those pillars, Schlichting needs to put them at the center of all of her strategic planning, her vision for the future, and make them evident throughout her day-to-day interactions with her executive staff, physicians, nurses and other staff members throughout the 23,000-employee system.
What follows are some of the ways in which Schlichting promotes the system’s vision and strategy through all the avenues available to her, and some of the lessons she has learned along the way.
Though she runs a medical system, the way Schlichting and her leadership team form a strategic plan isn’t much different than the way a retailer or manufacturer might. Schlichting’s team identifies areas of competitive advantage, and tries to leverage as many ways as possible to accentuate those areas.
“When we focus on those areas of excellence, we try to take advantage of what we think are our areas of competitive advantage,” she says. “Frankly, it’s what any organization does — create a competitive advantage by trying to design and execute on strategies that others can’t copy easily. Then we try to take advantage of that model continually, always trying to figure out new ways to meet consumer needs, employer needs and community needs. It really gives us a great platform on which to build.”
For Schlichting and her staff, the market differentiators include the system’s medical group and insurance structure. Schlichting says Henry Ford is unique among area health systems in that it employs a salaried group of physicians in addition to private practice physicians under the organizational umbrella. The system also owns a health insurance plan with about half a million members, which gives Schlichting’s team an avenue to get closer to customers, major employers and community entities on the plan.
All of the information that the leadership team receives from the front lines helps the entire health system continue to identify and pursue the differentiators that will continue to ensure Henry Ford’s place as a leader in the regional health care field.
It’s a universal lesson that any business leader needs to learn when it comes to strategic planning: Stay in tune with what the market wants, and figure out new ways to give the consumers of your products and services what they need. That is how you turn customers into repeat customers.
“It’s isn’t just looking at the environment, it’s really looking at what is needed in the industry, looking at quality issues, service issues and access to the product,” Schlichting says. “It’s trying to focus on being comprehensive in your approach to business. That allows you to hopefully be proactive, as opposed to reactive, to the environment around you.
“You have to ask yourself what is specifically unique about your business, what you can create with the assets you have, what you can really try to achieve that is right for your organization. You have to have a vision for what has to be accomplished. If you have that vision, you can start to get creative around the strategies you need to form in order to get there. From my perspective, that is what we do here. We try to take full advantage of our organizational assets.”
Create a vision
Before you can plan to get somewhere, you have to know where you want to go. In that sense, a well-defined vision is the single foundational key to executing on fundamental principles.
The vision needs to outline goals that are ambitious yet attainable, and needs to be something that can link back to each person in the organization, so that everyone under your umbrella can feel a connection to it, and feel like their job contributes to the overall goal of realizing the vision.
Schlichting says corporate visions also need to have staying power. You can’t scrap a long-term vision for your company and reinvent the wheel every few months. Major crises, like the recession of the past few years, might force you to alter your goals. But unless your hand is forced to an extreme degree, you should strive to keep your vision consistent.
“The vision is hopefully something you can stay with for a period of time,” Schlichting says. “That’s because it has to be both inspirational and aspirational. The vision is typically not something you’ve already achieved. It’s something you’re working toward.”
At Henry Ford, Schlichting makes her vision personal for each employee by doing something very basic in concept, yet large in scale: She relates the customer experience to each employee.
“We’ve had a vision here for 10 years, and that vision is to provide the same quality of care and comfort that we want for ourselves and our family members,” she says. “What that has allowed us to do over the past 10 years was to really have a personal connection to a vision of excellence for every single person in the health system. There is not one individual working here at Henry Ford who doesn’t understand what it’s like to be a patient, or be a family member of a patient. It has allowed our housekeepers and dietary workers, our nurses and doctors, to all connect around that vision. It has been a highly motivating vision for us.”
As foundational as your long-term vision might be, there will be opportunities to take an alternate path and explore a new opportunity. You can’t get so locked in on your goals that you can’t see an opportunity. The key is to know when to make a detour and when to stay the course.
Schlichting says the opportunities you act upon should ultimately help you realize your goals, though maybe via a slightly different route.
“You have to have perseverance and commitment to what your strategy is, but you also have to have some agility,” she says. “There are things we’ve done over the past 10 years that have been strategic — what we wanted to do is what we did — and other things that were more opportunistic, such as the acquisitions of Henry Ford Macomb Hospital and Henry Ford Medical Center – Cottage. Those were things that emerged as opportunities, and based on us having our antenna up, and us being agile and flexible in terms of things we thought would help the organization.”
Your ability to remain opportunistic is largely reliant on having an open mind and, within reason, an open wallet. If you want to have the latitude to make an opportunistic move, you need to save enough in other areas to develop a financial reserve.
“You have to be open to those types of opportunities, and some leaders are often not as able to be open like that,” Schlichting says. “So you do need to have a financial position that gives you some latitude to be able to finance these opportunities as they come along. The financial structure and the leadership position both need to have strategic and opportunistic elements, and afford you the ability to react and move quickly as the opportunity arises. You need the frame of mind along with the financial resources that are available.”
Learn to say yes
It’s one thing to have fundamentals. It’s one thing to develop core values, a vision and a strategic plan. It’s one thing to say you’re going to execute on all of it. But it’s entirely another to get all of your employees to buy in and work alongside you.
“Engagement” is another business buzzword that you’ve likely heard countless times before, but no matter the terminology you want to use, the need to have employees on board and moving in the same direction with you is a universal need in business. If you don’t have your employees with you, you won’t be successful.
You get your employees on board by enabling them to have a hand in helping your organization to realize your vision. And there is a three-letter Swiss Army knife of a word that you can use to empower employees in a variety of situations.
“I always tell our leadership that the most important word in my vocabulary is ‘yes,’” Schlichting says. “You don’t want to create a culture that is supposed to embrace innovation, or a culture that allows you to take advantage of important opportunities, unless you have that kind of view of the world. Because people don’t come to you twice. If they come to you with their exciting new idea that they thought through and are committed to and you say no enough times, people aren’t going to come forward anymore. You’re also not going to have people in the outside community think that you’re an organization that is open to new ideas and opportunities. It’s those kinds of messages that are important.”
That doesn’t mean you let everyone run free with their ideas. You still need your people to innovate in the same general direction. “No” is still an option, but one you should use only when the idea or suggestion does not fit. And if you tell someone ‘no,’ show them why you can’t use the suggestion.
“At the same time, you need to have discipline around the operating metrics, around performance strategies. You still need to have that fundamental discipline, but it’s also helpful to have an attitude that says ‘yes’ more than ‘no,’” Schlichting says.
How to reach: Henry Ford Health System, (800) 436-7936 or www.henryford.com
The Schlichting file
Education: Bachelor’s degree in public policy studies, Duke University; MBA in hospital administration and accounting, Cornell University
Schlichting on having a positive attitude: We all wake up in the morning with either an attitude of optimism or pessimism. I think it has to come from within. As an individual, you really have to be a positive person. And there are days when I act a bit more, come in on stage and perhaps acting more than I believe it. But you have to do that some days. Not to be unbelievable, but to be encouraging to others. We all have those points when things don’t go well, and those are the true tests for leadership. Because how leaders handle those tough times frankly are your defining moments. People watch us.
Schlichting on building a leadership team: It is probably the most important job of a leader, making sure they have the right team around them. And with the right team, it can make your life a lot easier, it can make things go very well and smooth. But with a team that is not engaged in that way, it can be very challenging. I think it starts with the values of the individuals. When I interview people for my leadership team, one of the first questions I ask them is ‘What do you stand for as a leader?’ Sometimes they look at me like I’m a little nuts, like they’ve never thought of it that way, and that tells me something.
Schlichting on internal communication: The direct manager is the most important person from a communication standpoint. We create tool kits and cascading information in the organization, and we have a communications team that I meet with every month. So we strategize about the messaging, about how we’re helping managers, supporting them, doing often with videos and tools that help them communicate effectively.
Usually when your natural gas provider decides to replace thousands of miles of pipeline, it spells potential inconvenience for customers. But when you’re working with Columbia Gas of Ohio, the company is one step ahead. That’s because President Jack Partridge keeps the company’s customers front-of-mind — which is pretty innovative in the regulated utility industry.
Because of this, Smart Business, U.S. Bank and Blue Technologies named Partridge to the 2011 class of Columbus Smart Leader honorees. He told us how he maneuvers challenges like these with communication, setting his company apart with innovative service.
Give us an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Several years ago, in the interest of safety and reliability, we knew we needed to significantly accelerate the replacement of major portions of our 20,000-mile natural gas pipeline system in our 61-county service territory (capital spend of more than $2 billion during the next 20 years). We knew we were going to be in customers’ backyards and busting up pavement on the streets of the communities we serve more than ever before. We also realized we needed our regulators to authorize us to recover this investment of major capital in Ohio.
We launched a proactive, comprehensive communication/education plan targeted to all our stakeholders — from one-on-one meetings with community and government leaders to presentations for civic organizations to bill stuffers and door hangers and news releases — all with the same message: ‘Yes, we are going to be visible in your community. We will minimize disruptions. The benefits are: first, safety and reliability, more jobs, property tax benefits to the community, economic development benefits, better sizing pipe to growth areas, less leaks, lower O&M expenses, etc.’
In terms of our regulators, we conveyed we will be investing more capital in Ohio than ever before, and the investment will enable us to keep our costs down.
To date, this program has been extremely effective. We have seen no material increase in complaints. I credit this to effective communication and very effective operations planning and execution.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
We are innovators in the utility industry in terms of how we maximize value in a regulated environment and how we work with our customers.
Utility companies, being regulated, typically file rate cases to recover their costs from customers. This usually involves nine months or more of litigation (beating your customers up, in a legal sense, in a hearing room). We have adopted an innovative approach to this combative, unproductive process. We gather all our stakeholders around a table in a collaborative fashion prior to filing a rate case to find out what their needs are, be candid about our needs and negotiate true win-wins. Our objective is to file a settlement with the PUCO for approval — ideally a multiyear agreement that’s agreed to by all parties. We have been successful — our most recent rate case was in 2008 and resulted in a settlement approved by the PUCO. This has allowed us to establish more positive relationships with our customers and regulators.
How do you make a significant impact on the community and regional economy?
We serve the entire Central Ohio region and realize we have an obligation to not only supply customers with reasonably priced natural gas every day but to be good community partners in terms of providing corporate, philanthropic and employee participation contributions. In terms of direct economic impact, natural gas prices are the lowest they have been in the last eight to 10 years. This has a huge positive impact on residential, commercial and industrial customers.
I personally serve as chairman of the Columbus Chamber of Commerce board, and I am a member of the Columbus2020 board and the Columbus Partnership. These require a great deal of time, but it’s time well spent. The Columbus2020 Economic Development initiative is for real and will provide great value for the investment in our Central Ohio region.
How to reach: Columbia Gas of Ohio, www.columbiagasohio.com
See all of the 2011 Columbus Smart Leaders on the next page.
Together with U.S. Bank and Blue Technologies, Smart Business named the following honorees to the 2011 class of Columbus Smart Leaders:
- Christine Poon, Dean, Fisher College of Business at The Ohio State University
- Dave Blom, President, OhioHealth
- Denny Griffith, President, Columbus College of Art & Design
- Derrick Clay, Vice President, New Visions
- Doug Kridler, President, Columbus Foundation
- Jack Partridge, President, Columbia Gas
- Marjory Pizzuti, President and CEO, Goodwill Columbus
- Brenda Stier-Anstine, CEO, Marketing Works
- Jim Klein, CEO, Finance Fund
- Kevin Gadd, CEO, Venture Highway
- Eleanor Alvarez, President, LeaderStat
- *TaKeysha Sheppard Cheney, CEO, The Women’s Book
- Brigadier General Arnold W. Bunch Jr., Air Force Security Assistance Center at Wright-Patterson Air Force Base
*Indicates Women Presidents’ Organization Breakthrough Business Leader
Partnerships and relationships don’t always have a happy ending. On occasion, your personal leadership will be tested to the maximum when you are faced with delivering bad news. Bad news can come in many forms: reduction in work force, getting out of a certain line of business or simply ending a relationship that may have been in place for years. Leaders sometimes shy away from “doing the right thing” when it comes to properly communicating bad news.
First and foremost is the simple gesture of reaching out in a personal way — delivering the news with compassion and a personal touch. I really don’t believe you can use subordinates or public relations firms to relay the messages to the impacted parties. Right now in Texas, like many other states in our nation, we are faced with the daunting task of cutting our state’s budget by billions of dollars. Unfortunately, it appears that teachers and school employees are going to be impacted in a dramatic fashion. I have watched carefully, as school district leadership has struggled with making these tough decisions all across the region. I have been struck by the means and manner by which superintendents have delivered the message.
This week, I observed a leading school superintendent in the area deliver news that is sure to be devastating to his employees, with passion and purpose. He did not send his communications director to do the tough interviews. He handled the media with grace and eloquence, as he clearly outlined the reasons for these decisions. The biggest takeaway for me was the obvious pain and compassion he displayed by personally communicating to those impacted by job loss. He took the time to outline the reasons why and clearly communicated his deep personal apologies for having to take this painful action. While this doesn't bring back the jobs, it communicates clearly, from the top, that the decisions were thoughtful, considerate and unavoidable. The mere fact that he assumed the role of communicator spoke volumes about his commitment to excellence in leadership.
It is easy to be out front when it’s time to take credit. It’s an entirely different matter when the news is bad. I have learned some things over the years that helped prepare me for delivering the bad news. Generally speaking, making the tough calls and decisions doesn’t occur overnight. These hard decisions take time and offer opportunities to pay attention to details along the way. I would offer the following as things leaders should do leading up to final action:
1. Communicate early and often along the way. A “ramp or runway” often exists, where leaders can talk to those that will be impacted long before the final decision is made.
2. Inclusive dialogue with affected parties is a great way to manage the communication loop. Too often, as leaders, we sometimes forget that dialogue and idea sharing with those that can be negatively impacted will oftentimes produce potential solutions.
3. Deliver the message personally.
4. Take personal ownership and responsibility for the actions. Don’t pass the buck or send someone else to deliver the bad news.
5. Always leave the door open for a future relationship. Never is a long time and should not be the leading descriptor of a future state.
6. Shorten and clearly state the why. Diatribes and long-winded explanations often lead to confusion, resentment and negative feelings.
7. Take the arrows that will surely follow, with grace, professionalism and responsibility
8. Always be the chief spokesperson.
The effects of bad news can easily be exacerbated by bad delivery. Though unhappy endings can’t always be avoided, they can often be tempered by thoughtful, personal communication.
The good news? Owning up to this responsibility will earn respect and a reputation for doing the right thing. We owe it to others and ourselves.
Gary G. Godsey is CEO of United Way of Metropolitan Dallas. He has more than 30 years experience at the CEO level, managing nonprofit organizations around the United States. Godsey is an accomplish speaker and leader in the nonprofit sector.
As the largest municipal transit operator in Los Angeles County, Long Beach Transit has a very specific mission: serve the area’s residents, employees and visitors with world-class service.
With Lawrence Jackson at the helm as president and CEO, Long Beach Transit has done just that, and in the process, it has become a nationally acclaimed public transit system that serves more nearly 30 million customers each year.
It hasn’t been easy, but Jackson has done the job well.
“In a time when public agencies are struggling with huge deficits and unfunded services, conservative fiscal management has allowed us to operate as a business for over 47 years with a balanced budget, never missing a single day of service,” he says.
Because of this, Jackson was named one of the 2010 Smart Leader honorees by Smart Business and Chase Bank. We asked how he keeps Long Beach Transit on time and on budget.
Give us an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Until we started our specialized Dial-A-Lift program, it was nearly impossible for persons with disabilities to get around. For our residents who were unable to ride a fixed route bus system, Dial-A-Lift was a successful public/private partnership with our local taxi company service, Long Beach Yellow Cab. This made a huge difference in the lives of many people — who were not otherwise able to leave their homes. On the business side, we sought ways to make the service more cost effective and efficient by making our vehicles part of the taxi fleet. Long Beach Yellow Cab now has accessible taxi cabs for the general public while Long Beach Transit was able to lower its total operating costs by nearly 50 percent.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
Long Beach Transit has always been a leader in working to improve the environment, well before regulatory deadlines. We were the first transit agency in California to use ultra low sulfur diesel fuel and install particulate traps on our entire fleet of full-sized diesel buses. We then pioneered a new propulsion technology with the purchase of hybrid electric buses, replacing aging diesel buses in our fleet. Long Beach Transit now has the largest fleet in the nation of hybrid gasoline electric buses, and we can boast that these buses have the lowest emissions of any transit bus currently available. The effort was so successful that several other Southern California transit operators joined in purchasing hybrid vehicles for their fleets.
Long Beach Transit is also a leader in real-time bus arrival information. We were first in Southern California, and third in the nation to provide real-time technology via the web and now offer trip planning through Google Transit. We also make real time bus arrival information available at bus stops, on board the bus, and from a customer’s phone.
How do you make a significant impact on the community and regional economy?
Long Beach Transit is a critical link in the economic and social well being of the area's residents, employees, and visitors, who have positively rated the system’s overall service quality above 90 percent. We are a nationally acclaimed public transit system providing a wide range of transit services to nearly 30 million customers annually. The organization directly employs over 700 people plus 100 private partnership persons, with an annual capital budget and operating budget of $100 million.
How to reach: Long Beach Transit, www.lbtransit.com
“I’ve been in a few meetings where they bury me and I just say, ‘Please, just draw me a picture,’” says O’Neil, president of the 200-employee investment research firm.
MarketSmith is a wholly owned subsidiary of William O’Neil + Co. and has developed the next generation of the company’s popular Daily Graphs Online investment research service.
“The launch was very professionally done, but it was nerve-wracking,” O’Neil says. “It was tough launching a whole new major product like that.”
The biggest challenge in launching a new product is figuring out when you’re ready to unleash it on the world.
“They always want a little more time to make sure fit and finish is really good and solid and tight,” O’Neil says of your product team. “You kind of have to force them with deadlines. So there is that tug of war. When you get down to that moment, if that product is not quite ready and you launch, you’re going to pay in multiple ways.”
So what steps can you take to make sure your product is actually ready to be launched? You can start by getting a number of different people to test your product.
“We would take it out of the technologists’ hands and put it into a business analyst’s hands on their desk,” O’Neil says. “They would work it and they would try to break it and give it the going over.”
It’s important that some of these people that you have testing your product are people from outside of your primary circle.
“It never hurts to get a fresh opinion or an opinion from the outside,” O’Neil says. “For instance, a couple times over the years, I might find someone that is much more my senior that has just been in business longer with lots of experience. I’ll sit down and have a cup of coffee.”
It can’t just be you judging whether your product is ready and it can’t just be your cronies who can be counted on to praise every word that comes out of your mouth or every product that you develop.
“It’s impossible for an individual to be an expert in numerous different fields,” O’Neil says. “If you have a team and it’s a high-caliber team and there are experts in various fields, you are significantly stronger as an entity.”
As you’re getting feedback from people, if it differs from your expectations or if you find that people don’t necessarily love what you’ve come up with, don’t just dismiss it in favor of your own idea. Your people have to believe they’re not wasting their breath by offering their opinion.
“That boosts morale and gives them tremendous energy to really want to accomplish something,” O’Neil says. “Then of course, the person that sits next to them sees that person and they say, ‘Gee, coach. Give me the football and let me run.’”
Of course at some point, you need to stop fiddling around and either launch your product or try something else.
“At a certain point, you have to draw the line on what’s going into the product and just launch it,” O’Neil says. “You have to say, ‘I’m sorry, you’re going to have to wait for the next bus and that will be version 1.5.’”
If you do it right and take the right amount of time to plan, you should have a solid launch.
“Absolutely in spades I’ve seen this where we were prepared for a lot of road bumps when we launched and we really didn’t have very many because of all this front-end preparation,” O’Neil says.
Engage your team
Scott O’Neil doesn’t want to make every decision at MarketSmith. If you are making every decision in your business, you may be headed for trouble.
“You have to push authority down and I mean far,” says O’Neil, president at the 200-employee investment research firm that is a wholly owned subsidiary of William O’Neil + Co.
“I don’t mean just down a little bit. In the end, you have to trust people that they will accomplish the task. They have to believe they control their destiny.”
O’Neil talks about the work environment at MarketSmith on a regular basis. He wants work to get done, but he wants it done in a way where everybody is taking part in the journey.
“Create an environment that is conducive to everyone’s growth,” O’Neil says. “Your company will grow and your customer base will grow. Another very important point. You want positive, can-do people. Cut loose disruptive, negative people. You don’t have time for that. They’re infectious. Over the years, I’ve removed two individuals for general negativity. I’m not proud of that, but that was the reason.”
O’Neil says it’s the failure to involve others in your business that dooms many leaders.
“They don’t always listen,” O’Neil says. “I can tell you probably over half the decisions in this company, I’m not making. I don’t make them. We’ve got a lot of competent people and they are out there doing it.”
How to reach: MarketSmith, www.marketsmith.com
Todd Beckman wants his employees at The Tan Co. to think of really big things and really big goals that they want to accomplish in their lives. If for some reason they’re not sure how to proceed with these lavish wish lists, they need only step into Beckman’s office for guidance.
On his desk, they’ll find a picture of the house Beckman wants to build some day and a model of the car he’d like to eventually own.
“I just always try to keep myself moving forward,” says Beckman, founder, president and CEO at the 400-employee chain of tanning salons. “Usually, I do that not only with the business or family, but with some sort of a toy. A car, a boat, a house. I have that in front of me at all times. I just do things like that to keep my head in the game. We have to constantly be hitting on all cylinders to hit those goals.”
The growth of The Tan Co. from a small two-salon operation in 1994 to more than 70 locations across 13 states today can be tied directly to ambition, Beckman says. The trick is to get your people to share the passion and energy that you possess as leader of the company. You’re going to need it if you want your business to grow.
“I have goals that I want to achieve for the year and we work toward achieving those on a weekly basis,” Beckman says. “Everything has to work. Otherwise I don’t achieve my goals. So I have to come in and be excited and positive about where we are going and what we are trying to do so everyone wants to follow that.”
There is a board at the corporate office of The Tan Co. and Beckman has employees post their dreams and aspirations on the board for all to see.
“It can be anything,” Beckman says. “It can be anything from a purse to a car to a house. Whatever they think they want to achieve. Even to be higher up in the company.”
The goal is to get your people to adopt an attitude of continuous improvement that will hopefully come through in their work.
“That’s the whole trick of it,” Beckman says. “I have to make sure that everybody is working hard and that I am leading them as hard as I can to make sure we can achieve our goals. It’s impossible to do it on your own.”
On the business side, you need to work with your people to set goals that they can pursue and not just blindly assign them without any dialogue.
“They feel like they are part of the company and that they’ve helped to make those decisions,” Beckman says. “They come into the office on a weekly basis and we go over where their store is at and what kind of numbers they are doing. Then they talk about their numbers in front of their peers. A mix of all of that is what motivates our people to want to work here.”
You need to demonstrate that you are working hard, that you have goals that you’re pursuing and numbers you need to meet and that you’re part of the team if you want to get support. Your belief and confidence in your ability to achieve those goals can make a huge difference.
You can’t let yourself get down when challenges arise.
“You just can’t allow that to happen,” Beckman says. “Even in the worst of times and the worst of days, you just have to figure out a way to not go into the office with that attitude. That’s what I try to do. It’s not easy, but at the same time, if you’re going to be leading, you’d better be on your game.”
How to reach: The Tan Co., (866) 668-2626 or www.thetanco.com
Learn to unwind
Todd Beckman starts each day at the gym with a workout and a three-mile run. It’s a crucial step in his ability to be an effective leader at The Tan Co.
“If it wasn’t for that, it would probably be a lot harder of a struggle for me,” says Beckman, founder, president and CEO at the 400-employee chain of tanning salons.
“You just relieve a lot of stress and anxiety when you’re at the gym running. I run three miles a day and then just do a workout. That helps me.”
It also puts Beckman in a better position to deal with employees who are going through a tough time and get to the root cause of what is bothering them.
“We’ll sit down and talk to them about it,” Beckman says. “It’s just really going over the whole wheel again and starting from scratch. What is it you’re not happy about? Where is it that you want to go? What is it you are trying to achieve? Why aren’t you achieving it? It’s just going through the steps. That’s what all of our training is all about. We’re constantly helping people to be better.”
How to reach: The Tan Co., (866) 668-2626 or www.thetanco.com
Most businesses profess a desire to have empowered employees who are able to think for themselves, who can handle issues on the spot without recourse to a long management chain, who look at the business as their own and thus come up with creative solutions and put them into effect.
Balancing it, and usually countering it, is the fear that if left to their own devices, their employees will make idiotic decisions that will have financial and public relations consequences of far greater detriment than any possible benefit. The result is a mixed message — “We sort of want you to be innovative, but don’t do anything that carries any risk of a negative outcome because we’ll be checking up on you.”
Small wonder so many employees aren’t eager to use their initiative.
How gratifying it is when one finds an exception. Traveling for business, I rent from my local Enterprise Rent-A-Car office. I am constantly impressed by their enthusiasm and professionalism, and most of all for their ability to make decisions on the spot. Not monumental decisions — I don’t expect them to be able to sign me over the registration of their cars or redesign the corporate logo, but certainly the sort of day-to-day issues that so many other companies make a big deal over.
They are able to make decisions that do have an effect on the income of the business and they are confident about using their initiative to bend the rules when common sense dictates.
Anyone who has ever brought a rental car back an hour late and been charged for an entire extra day will appreciate this. I always leave Enterprise feeling that I have been dealing with people I like, who like me, and most importantly who are on my side. Not, as could so easily be the case, with a large nervous rental car organization, one of whose $25,000 assets they are about to hand over complete control of to me for $35 a day. Consequently they are one of the few companies that I feel a genuine loyalty towards without any of the gimmicks of points and loyalty programs.
How do they and others like them achieve it? Most important, they trust their employees and let their employees know it, but not blindly. The key is for line managers and employees to feel confident about the kinds of decisions they can make. In order to do this, they need to know their limits, which should be as wide as reasonably possible, and to know they will be supported by the management chain.
These parameters need to fit into the company’s vision, be clearly laid out and be an ongoing part of their training. Poor managers are scared of losing control, so they give their employees no leeway to think for themselves. Terrible managers deliberately avoid giving their employees firm guidelines so that they can claim credit in success and apportion blame in failure.
Encouraging innovation and creativity in employees needs to be just one part of fostering a positive corporate culture in a well-led organization. Assuming most employees are neither thieves nor charlatans, that they are able to eat breakfast without stabbing themselves in the eye with a fork, bring up children without misplacing them, and make it into work without falling in front of a subway train, then they can probably be trusted to make decisions, and to come up with creative ideas in the interests of the company.
Demonstrating this level of trust, within reasonable boundaries, goes a long way to making employees feel they are doing something that is important, and that they are personally valued. That’s leadership.
Julian K. Hutton is president of Merlin Hospitality Management, where he oversees the company’s hotel management and distressed asset management operations, drawing on 20 years’ experience in the worldwide travel and hospitality industry. Reach him at firstname.lastname@example.org.
From its humble origins with a handful of trucks and drivers 20 years ago, The Kenan Advantage Group has grown to the largest tank truck transporter in North America. And the vision that Dennis Nash and Carl Young had then is as clear as it is today: to revolutionize transportation and logistics services within the liquid bulk industry.
Nash, who serves as CEO, and Young, who holds the position of CFO, adopted a philosophy of delivering exceptional customer service combined with safe, reliable operations. They surround themselves with skilled and talented personnel who share the same integrity and philosophy for growth and success. Those skills and values play an important role because the transportation of hazardous materials is not a job to be taken lightly. The safety of employees, the public and the environment has always been a priority for Nash, Young and the company.
To help achieve their vision, the two monitored the marketplace and began taking advantage of the fragmentation of the industry by executing strategic acquisitions to expand their platform and accelerate growth. They partnered with two private equity firms in 1998 to recapitalize the company and acquired seven companies from 2000 to 2005. More recently, KAG made acquisitions that expanded its chemical transportation business and gave it an entry into the industrial gases market.
Nash and Young’s strong leadership capabilities, coupled with a superior business model, have fueled strong and consistent organic growth. In addition, as the largest player in a highly fragmented industry, KAG has become the acquirer of choice for well-managed and profitable companies.
As the company continues to grow, its strategies include gaining market share in its core business, entering new end markets and geographies and executing strategic acquisitions.
How to reach: The Kenan Advantage Group Inc., (800) 969-5419 or www.thekag.com
Patrick Sanders has more than 100 business partners. And that’s not including the people in the front office of Max Muscle.
Sanders is the president of Peak Franchising Inc., the franchising business for fitness and nutrition company Max Muscle. He is in charge of finding and coaching new owners for Max Muscle stores, which generated nearly $50 million in revenue last year. The company has grown to more than 140 franchised locations, meaning there are more than 140 people who need to get on the same page with regard to Max Muscle’s mission and vision.
Smart Business spoke with Sanders about how he finds, trains and communicates with all of the franchisees under his umbrella.
What is the biggest franchising challenge you have had?
Franchising has its challenges because franchisees are your partners. In our case, there are hundreds of individual store owners out there. We don’t view it as an employer-employee relationship. That’s not the way franchising works. So as you ask the question, what is the biggest challenge in leading this organization, I’ve got hundreds of independent store owners that we have to try and get on the same page as you talked about. How do we set goals for them, how do we set a vision, how do we get them all going in the same direction?
That has been my biggest challenge, and we effectively overcome that through communication. We communicate with our franchisees and corporate employees on an ongoing basis. Certain segments are weekly; other segments are daily.
How do you facilitate dialogue among employees and franchisees?
I’m really pleased that every week, we have a systemwide conference call with all of our franchisees. Every week, a franchisee dials an 800 number and the whole system gets on the call, and we discuss every issue that we’re attacking that week.
In addition, there are subsidiary groups of franchisees and corporate employees that. We also dialogue with every week in a conference call forum. I find these to be really our primary vehicle because it’s a discussion. You can hear people talking back and forth; you can hear inflections in their voice and passion, and all of the things that make people so great at communicating.
What would you tell other business leaders about bringing people together in a company?
It is a bit challenging. I centered it around a value proposition. I don’t believe I can get both employees and franchisees to grasp and accept our vision, and thusly our goals and objectives, if they don’t see that as a positive in their particular area of interest. For franchisees, as with many people, we need to make sure the value we’re bringing them is making them more profitable. I have a tendency to overcome those challenges by showing people the value that this particular initiative or program or concept has, showing them the value of how that benefits them. That facilitates that dialogue. Suddenly, they’re asking questions, they’re saying ‘Wait, here is a viewpoint.’ That suddenly opens up the floodgates and you get this interactivity, which when you’ve had a chance to do that with them, then they understand what you’re trying to accomplish, we understand their reality. And by understanding both of those components, understanding the reality and challenges that each of us have there.
How do you set boundaries in discussions to keep people focused on end goals?
It’s interesting, because can you imagine having 200 people on one conference call? It can get really interesting. What we’ll do for each of these opportunities to communicate is we do publish an agenda for each of those calls. We’ll send out an agenda via e-mail, and everyone is pretty trained to know they need to stick with the agenda. If they have other issues they need to bring up, they go back to us independently, knowing that we’re going to try to get it into one of these conference call forums.
How to reach: Max Muscle, (714) 456-0700 or www.maxmuscle.com
When Jon Ransom started Environmental Management Specialists out of his basement in 2000, he faced some challenges. He had just moved to Ohio from North Carolina, and he had a lack of customer relationships, minimal knowledge of the regional marketplace and had little credit with vendors and suppliers.
What he did have was a background in environmental services and an ability to meet a challenge head on with an intense focus on the solution and his pursuit of constant improvement. Slow but steady growth followed at the company founded as a waste brokerage that aids environmental consulting firms and contractors with the transportation and disposal of hazardous waste, and by 2008, Ransom had 12 employees and a positive reputation in the marketplace.
Following the economic downturn in 2008, EMS had a challenging first half of 2009, but by the second half of that year, the company had hit its stride. By 2010, EMS had 38 full-time employees and had expanded from being just a waste brokerage to offering full-service brownfield site remediation, tank removal and installation, emergency spill response, and waste management and industrial services for private and public sectors.
Ransom believes in leading by example and has worked side by side with associates in various capacities, gaining respect because they know he is willing to tackle any job they face. He also supports a culture marked by mutual respect, empowerment and integrity, and employees are regularly asked for ideas that might improve the company’s performance. The professionalism and combined expertise of the company has earned the esteem of regulatory agencies, customers and competitors and has paved the way to a growing awareness of its capabilities across Ohio and beyond.
How to reach: Environmental Management Specialists Inc., (440) 816-1107 or www.emsonsite.com