Middle market manufacturers often think workers’ compensation and disability are uncontrollable costs items. However, it’s more important than ever to change this way of thinking.
“Workers’ compensation is a significant variable cost element for manufacturers,” says Joe Galusha, managing director and leader for casualty risk consulting at Aon Risk Solutions. “It’s an area where controlling workplace injuries and their associated costs can actually become a competitive advantage.”
“We’re coaching our clients to take more responsibility over workers’ compensation and disability prevention, as well as claim management,” says Mike Stankard, managing director, Industrial Materials Practice, at Aon Risk Solutions. “If they do, there’s a significant opportunity to lower costs, and with that comes boosts in productivity, morale and many intangibles.”
Smart Business spoke with Galusha and Stankard about why workers’ compensation and disability management is crucial as well as cost containment and reduction strategies.
What’s the manufacturing landscape today?
Post-recession manufacturing activity is increasing, partially due to repatriation. But with that comes payroll growth, and then typically growth in workforce costs, which for manufacturing can largely be workers’ compensation and disability. There’s also negative trends related to the profile of the typical American worker that will compound the current challenges, so manufacturers that don’t put more effort into managing injuries and related costs may be at a disadvantage.
What workforce demographic trends make this management so essential?
About one-third of adults and almost 17 percent of youth are obese, according to the Centers for Disease Control and Prevention. Obesity drives comorbidity and complexities in an individual’s health, creating a link to the cost of care and recovery from injury.
At the same time, workers 55 and older are expected to be nearly 20 percent of the workforce within a year. A number of physical impacts — decreased strength, more body fat, poorer visual and auditory acuity, and slower cognitive speed and function — come with aging and affect a workers’ ability to recover from injury. People over 60 also are much more likely to be obese.
These trends not only affect employment-related injury costs, but also productivity and business continuity costs when workers are absent for non-occupational injuries.
How can big data be used as a tool here?
There’s never been as much data available for a nominal cost — the challenge is leveraging it. You need the right data at the right time to compare it to the right things. When benchmarking against other companies or applying data sets to your environment, jurisdictions, evaluation base and the age of the benchmarking sources are important to ensuring your data is pure.
Although there are external sources, many times third-party administrators (TPA) or insurance carriers have already done a tremendous amount of data mining and predictive modeling. Businesses just need to know it’s there and to start using it to drill deeper into the cause of loss and the cost drivers of workers’ compensation.
What are some best practices for managing workers’ compensation and disability?
The secret is preventing injuries and creating a healthy workforce. But injuries will occur, so focus on responding quickly with the right amount of effort at the right time on the right claim. Predictive modeling can help identify the types of claims likely to become more costly.
Understand what’s driving your costs by doing a baseline assessment of cost drivers and utilizing benchmarking to drill down. Then, align the incentives of all internal and external parties — TPA, carrier, broker, and vendors involved in loss control and claims management — to focus on the cost-driving elements, using a dashboard to monitor performance. This creates a sustainable loss control and claims management effort.
Many organizations need to align all stakeholders — human resources, finance, legal, operations, etc. Also, combine the efforts of health and wellness with workers’ compensation and safety. A streamlined approach creates a healthier workforce, reducing injuries and their costs.
Joe Galusha is a managing director, leader for casualty risk consulting at Aon Risk Solutions. Reach him at (248) 936-5215 or firstname.lastname@example.org.
Mike Stankard is a managing director, Industrial Materials Practice at Aon Risk Solutions. Reach him at (248) 936-5353 or email@example.com.
Hear more expert advice about workers' compensation and disability management in manufacturing by visiting our archived webinar.
Insights Risk Management is brought to you by Aon Risk Solutions
Most leaders understand that it’s critically important to collaborate regularly on initiatives with their employees, but are they getting all they can out of these interactions?
What leaders may be missing is a new paradigm for employee engagement and competitive advantage.
Many of them are working from an old style of management in which business decisions are made at the top and leaders follow a hierarchy of authority. Senior executives must still set strategy and manage for results, but they can likely achieve better outcomes by letting go.
Authors Craig Schreiber and Kathleen M. Carley explain that adapting a participative-style leadership environment allows people and the business to co-evolve into higher levels, enhancing personal responsibility, accountability, collaboration, innovation and business outcomes.
To do this, leaders need to empower employees to collectively make decisions that drive results and train employees to work in this model.
Employees on the front line are often in the best position to see trends and market opportunities.
Leaders can help drive businesses in new directions and enhance their bottom line by giving lower-level managers and line employees the support and encouragement to assume a much higher level of accountability and responsibility.
Information creation and sharing based on trust are critical components of innovation, according to author R.E. Miles. As they feel more engaged, employees are also more motivated to contribute and add value.
To achieve this, leaders must create an environment where risk within certain boundaries is rewarded so that employees feel comfortable enough to act on their abilities and instincts.
Leaders can support employees by encouraging ideas to grow and flourish among employees rather than through the manager. This will allow employees to identify and pursue opportunities that benefit the company.
The most important — and often most challenging — aspect of leadership is constant follow-through. It is important to discuss leadership techniques with employees and provide training.
Talking through leadership strategies with employees calibrates the group to be more in alignment. It also increases follow-through from employees who feel a part of the process.
Leaders can do this by:
? Discussing best practices among participants
? Identifying leadership needs
? Generating solutions that fit with the needs of the group
? Sharing best practices of employee collaboration throughout the company
? Recognizing work among employees and outcomes
For example, a bank executive wanted leadership training for her front-line managers. Her goal was for them to be able to work out problems and challenges independently or as a leadership group without constantly seeking guidance.
For 10 weeks, we challenged the managers to take more risk and encouraged them to make more decisions at their level. Through group coaching meetings, the employees helped each other consider best alternatives and the executive learned how to manage by letting go. The managers reported feeling more encouraged and engaged, which considerably enhanced results. ?
Jay Colker, DM, MBA, MA is core faculty for the master’s in counseling and organizational psychology program at the Adler School of Professional Psychology. Colker also maintains a human capital consulting practice and may be reached at firstname.lastname@example.org or at (312) 213-3421.
It seems that every other week there’s a major story in the media about a company claiming that one of its competitors has purloined a cherished secret that provided an unfair competitive advantage. This is all part of running a business in today’s fishbowl environment, where sensitive information is too abundant and can be obtained by almost anyone and everyone who is so inclined.
In this era of heightened visibility, some of the best companies, especially high-tech firms, play everything incredibly close to the vest, particularly when it comes to providing information about current sales trends, new products and projects that they are exploring or developing. This is because such information is a coveted company asset. In today’s “victory at almost any cost” world, too many are looking for that edge to leverage whatever they can to stack the odds in their favor.
We also read too frequently about how easily these secrets have somehow wound up in the wrong hands. Sometimes a loose-lipped employee simply talks too much to too many people in the wrong places. Occasionally, someone simply leaves a briefcase or smartphone, jam-packed with confidential information, in a bar, at a restaurant or on a plane.
What’s not talked about much is the frequent practice of competitors simply asking what appear to be innocuous questions of lower-level personnel in a company in order to garner nuggets of “inside information” usually without risking the perils of violating any legal statutes. It’s also common practice for Wall Street security analysts to simply walk into a retail store, as an example, and begin asking questions about trends, what products are selling and which aren’t. It all gets down to the reality that it never hurts to ask a question because one never knows when a valuable tidbit will be revealed.
Like it or not, this is just the way it is, and there will always be people who ask and others who tell. What can you do to protect your coveted information? The answer is basic: mandate that providing revealing responses to specific questions is a violation of company policy and could result in draconian consequences for anyone who spills the beans, no matter if well-intended. Once your employees and suppliers know the ground rules and the consequences, you’re one step closer to closing the possibility of vital information inadvertently slipping through the sieve.
The best way to accomplish this is to establish, enforce and continually reiterate a “one voice, one company” policy. This translates into all hands within your organization knowing what can be told to outsiders and, more importantly, what can’t. This policy must be in writing and must state what types of questions are off limits. It must also explain how the questioner is to be handled when the interrogatory is posed. In my retail chain experience, we often had competitors, vendors and industry analysts visit stores and ask all types of questions. Candidly, I don’t blame them, but with a clearly understood policy, employees know how to respond by referring the questions to headquarters and a specific department or individual. Ninety-nine percent of the time the person asking the question never follows up with the corporate office because he or she knows the desired answers will not be forthcoming.
Most employees want to please their employer and most want others to think they are in the know. When you create an ironclad policy, it takes the pressure off of your people and adds another layer of security about things no outsider needs to know. For your suppliers, require that each sign a confidentiality agreement and specify that you have a simple “one strike and you’re out” policy. Also use your own secret shoppers to test your vulnerability by having them ask the forbidden, just to verify that the company veil is not being lifted by the unauthorized.
This protocol is certainly not foolproof, and periodically, there will be lapses — the most frightening of which are the ones you’ll never learn about. It all gets down to a numbers game. Confidential information, just like the cash, equipment and other assets on your balance sheet, can never be taken for granted and must be protected. Anyone can look in your fishbowl in this day and age, but it is your job to make sure that what they think they might find is not what they get.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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Darron Burke’s picture is on the front of every bag of coffee he sells, a testament to the fact that he is always standing behind his product. When Burke launched Café Don Pablo as a specialty coffee roaster in 2004, he spent as many as 10 hours a day on his feet handing out samples of the coffee at Costco and sharing the company’s vision with anyone who would listen. As president and CEO of Café Don Pablo and its parent company, Burke Brands LLC, Burke has doubled the company’s product sales on average every year since. By embracing every opportunity to engage customers in the story and the mission of Café Don Pablo, he spearheaded the company’s tremendous domestic and international growth to $12 million in 2010 revenue.
Smart Business spoke with Burke about how he spreads Café Don Pablo’s mission of quality and value to get buy-in from customers and employees.
How have you set your company apart from competitors?
I wanted to give people an honest deal, and I wanted to produce the best of the best for a very good price. In other words: value. I don’t think that value ever goes out of style. … We wanted to give people a fair deal, a great quality coffee at a fair price. When somebody gets something that’s really special, if the quality of the product is such that it’s outstanding and you can tell that it’s different and better, people tend to want to share that with their friends and family.
Whenever we’re at Costco or Sam’s Club and we’re giving out samples and people walk by with another brand of coffee in their hand, they drink ours. They put theirs away immediately.
How does setting up sampling booths help communicate your value to customers?
We’ve spent a lot of time and a lot of money educating the consumer, and it’s worked. I make sure — and this is with everybody I come in contact with that has an interest in the business — I always try to share the vision and direction with them and try to get them to buy into it, because if they do, that just makes us stronger. For the last five years I’ve been standing out there myself on weekends giving out literally 1,000 little 4-ounce cups of coffee to people and giving them my little spiel and telling them why, what sets us apart. We’re the No. 1 selling coffee in Costco, and it’s because of that, because I’ve literally given tens of thousands of people, handed them a cup of coffee personally and told them about our company. There’s a lot of brand equity that’s been built up.
Where does customer feedback come into play?
You try to glean any piece of information that you think is going to be helpful to you. Obviously customers are a wealth of information. All kinds of people write in and give suggestions and it helps quite a bit to see if you are on track. If you screw up a bit, and sometimes we do — maybe you’ll burn a batch of coffee and they’ll put it in a bag instead of throwing it away — we hear it from the customers. So that just helps us to realize that we may have some concerns and we need to address them.
What can a leader do to communicate the vision to employees?
You need buy-in from the people. People have to believe you. You have to be honest and credible and transparent. They have to know that you have their best interests in mind. Everything you do has to be with a win-win mentality. I’ve always tried to put myself into the shoes of the other person, whether it’s somebody that works with us or our customer or our potential customer or vendor. And that I’ve found has helped quite a bit. What I try to do is seek first to understand and then to be understood. If you really get to understand somebody else’s point of view and then work from there, they’ll really appreciate that and they’ll help you achieve your goals.
HOW TO REACH: Burke Brands LLC/Café Don Pablo, (877) 436-6722 or www.cafedonpablo.com
Ron Seide used to work for Cisco Systems in its wireless network business unit making products for manufacturers of data collection. What he did was part of a relatively small niche market, and as a result, Cisco put less and less focus on it until ultimately deciding to stop that line of business.
Seide and some colleagues saw this as an opportunity and formed Summit Data Communications Inc., a Wi-Fi solutions company.
“Something that was relatively small for Cisco was actually quite substantial for an independent company,” says Seide, president of Summit Data Communications. “As a result we were able to convince customers that worked with Cisco to work with former Cisco employees who were looking to bring to market a successor product to what Cisco was doing.”
Smart Business spoke to Seide about how Summit Data Communications has exploited a niche and is looking to continue expanding its reach.
Find a niche. It’s good to find a niche and fill it, but it’s even better to create a niche and fill it. It all comes from having an understanding of the market you want to serve. You have to understand the markets that you want to serve and then create a unique set of products or services that you can then hold up as being your very own niche.
It’s really no secret. It’s really talking to customers. Between myself and our sales staff and technical staff, we have a very permeable membrane in the organization where information constantly flows back and forth between ourselves and our customers, ourselves and our partners, ourselves and our supply chain. It really is about openness and willingness to speak with external parties on a very regular basis and that will help you understand what the market is all about. No amount of reading, no amount of studying or looking at reports really gives you that sort of rich, deep set of knowledge of the marketplace than just being in constant contact with external parties.
Grow organically. The initial start of the company was an incremental step from what Cisco was doing, but having then established that beach head, we have now expanded that into new technology and new markets. It’s those new technologies and those new markets that will fuel our growth going forward.
This technology is used in bar code scanning, factories, warehouses, distribution centers and big box retailers, all of which are supply chain applications. One driver of growth for us is the increasing automation of organizations’ supply chains. The bar code becomes an increasingly integral part of an organization as they try to gain efficiency.
At ball games and concerts, tickets are now being scanned commonly by handheld computers with bar code readers on them. That’s just one example of how bar code readers and handheld computers, which use our radio module are being found in new applications and therefore new growth opportunities for the industry and new growth opportunities for us.
In terms of identifying new growth opportunities, oftentimes your set of products and services that works in one market may play well in other markets. It’s a great way to gather low-hanging fruit and build incremental revenue. It doesn’t necessarily require new products or new capabilities; it just requires the willingness to move out of your comfort zone.
Brand your business. Following our customers and responding to our customers requirements caused us to indentify a whole new class of devices that we could access and a class of devices that had requirements for our unique set of capabilities.
When we started out, we were targeting all of our marketing and sales efforts on the parties that were directly one step up stream from us. You have to build up a brand. What we did was with each Summit radio that we sell that comes along with a software application, which runs with the device. On that software application is the Summit name, the Summit logo and a variety of different ways to identify to the end user that the device contains a Summit radio.
By doing that we are able to build a pull-through demand. You can establish a preference amongst the customers of your customers. It sets up an entrance into other markets because you have a brand and others don’t. It’s not enough to have a unique set of capabilities. Beyond that you have to also make it known who the provider of that unique set of capabilities is, not just to your direct customers but to customers down stream from your customers.
HOW TO REACH: Summit Data Communications Inc., (330) 434-7929 or www.summitdatacom.com
Garry McGuire is entertaining you in those little moments of boredom throughout your day. Whether it be waiting in line at coffee shops, watching CNN while on the StairMaster or while on a flight, he and his team of about 70 people places television-quality media there for your entertainment pleasure as CEO of RMG Networks.
When he came on board two years ago, the company provided content to about 10,000 screens but now reaches 60 million viewers each day through more than 190,000 screens.
“As we are growing and expanding rapidly, we are trying to stay focused on what we do best, which is entertaining and informing people when they are on the go throughout the day,” McGuire says.
Smart Business spoke with McGuire about how he’s grown RMG.
What is the key to successfully growing a business?
The key to growing a business is singular focus on one, two or no more than three objectives — and being able to be flexible and change your plan as needed to stay focused on those same objectives.
How do you choose what to focus on?
The most important one is really focus on the customer and the problem you are trying to solve. A lot of companies try to focus on how great their product is without keeping in mind the problem you are trying to solve at the end of the day. A lot of technology companies in particular tend to do that. They invent a really cool technology that does a really cool thing, but it might not actually be solving a problem that people care about. Timing your product with a particular pain in the market place is probably the most important element.
Just stay focused on what you do best, what you do better than any other company in the marketplace. As you begin to grow your business, don’t lose focus on those core fundamentals that you’ve become successful at or that you’ve become known for in your quest for new business or adding new features to your business.
I worked for really small companies and really large companies. At one point in my career, I worked for Compaq when it was in massive acquisition mode, and it was sort of a race to become the biggest computer company in the world. It made all kinds of acquisitions — some of them were brilliant and some were disastrous mistakes. What I was able to ascertain from that was that in your quest for getting bigger, bigger is not always better. I’ve seen that in so many examples, large and small. Sometimes you get very wed to an opportunity, and it’s very emotional rather than rational. I’ve seen a lot of business leaders make mistakes based on that.
How can you stay rational when you are looking at those big growth opportunities?
I think just talking to as many advisers or people you respect who come from a pretty independent perspective is the most helpful way. I try to do that a lot with my board, with investors, with advisers — just to try to collect as many data points as possible. Don’t drink the Kool-Aid. Especially in a company as a president or CEO, you tend to be surrounded by people who agree with you. So as many people as possible who you can talk to outside of that circle, the better decisions you make.
How do you choose good advisers to speak to about these things?
Look for people who have worked in senior positions in your same industry, who are not currently working in the industry. They’ve maybe retired or they’ve changed or they’ve moved on to another profession. I have a couple of advisers who are in that role. I think it’s good to have an adviser completely outside of your industry, because they can look at it from a truly outsider's position. It’s also good to get advisers who don’t have the same background as you. My background is more sales and marketing and our business has a lot of technology and finance, so I tend to try to surround myself with advisers who have different skills than I do, just to try to complement my weaknesses.
How to reach: RMG Networks, (415) 490-4200 or www.rmgnetworks.com
In January 1877, Cornelius Vanderbilt passed away. The richest man in America at the time, the shipping and railroad magnate’s estate was worth around $105 million — at least $150 billion in today’s dollars. “Commodore” Vanderbilt, as he was known, remains the second-wealthiest American in history. He may even have been the world’s first self-made billionaire.
His secret? It’s simple; he saved on expenditures.
“I have never had any advantage of anybody in running steamships,” Vanderbilt declared in 1869, “but if I could not run a steamship alongside another man and do it as well as he for 20 percent less than it cost him, I would leave the ship.”
Regimented cost-management may not sound exciting in today’s high-speed, whiz-bang world, where innovation and the next new thing tend to garner more attention than the basics. But running a tight ship remains a viable core strategy for many businesses, large and small.
Take Southwest, Geico and Wal-Mart. They’ve based their entire strategy on a low-cost/low-price basis. Why? Because when it comes to air travel, insurance and household goods, price really matters to the target customer. As long as the target customer doesn’t feel she’s giving up much in terms of the experience, she’ll patronize these businesses for the savings—and the lower the prices, the more compelling the value in her eyes.
Businesses like these often aggravate competitors, because their low prices force competitors to justify their own fees. Customers start wondering what benefit they get from paying a higher price. If the higher-priced competitor can’t answer that question persuasively, it won’t be a competitor for long.
But to consistently sell at low prices, a successful business must remain the low-cost operator in its segment; otherwise the low prices become unsustainable. How can you maintain a lower price than your competitors if your costs are as high as theirs?
Low-cost producer status can’t be attained or maintained through minor nips and tucks. To the contrary, it requires a constant, rigorous seriousness of purpose. Examine your entire operation for creating and delivering your products or services to your customers. Look step by step, function by function, and ask yourself if your customers get more value out of each element than it costs you to include it. Distinguish between expenses that drive near-term revenue and those with more distant payoffs. How confident are you that these investments will ever pay off at all?
At Branders, after we took ourselves through this exercise three years ago, we eliminated what had been our largest single division: our Order Management Specialists, or OMS. It wasn’t that our OMS employees weren’t performing their jobs well. What we realized was that the job they were doing was not one our customers valued enough to cover its cost. When we eliminated the OMS role, our customers never missed it.
Warren Buffett’s longtime partner, Charlie Munger, once suggested that the key to success is to, “Take a simple idea and take it seriously.” Transforming your business into the low-cost producer among your competitors is about as simple as ideas come. But it is exceedingly powerful.
And if you’re not trying to offer your customers low prices? Then take out the unnecessary costs and reinvest the extra profits in faster growth — or simply bank it. No business ever failed because it was run as a tight ship. And more than a few have flourished.
Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. He can be reached at JerryMcLaughlin@branders.com.
Wal-Mart and Apple operate in different industry segments with different business models, and yet the same management principles drive their long-term success. What is it they are doing that you need to do in your business?
Wal-Mart and Apple have absolute clarity about their core management philosophies, and they do not violate them. Core management philosophies define a company’s business approach and its fundamental choices. The combination of these choices creates a company’s unique position or business model in the marketplace. The strict adherence to these core philosophies often creates an unassailable advantage.
Wal-Mart ranked No. 1 on the Fortune 500 list in 2010 and reported profits of $14.3 billion. It has the money and resources to carry any merchandise it desires in its stores. Why is it, then, that you are not likely to find a $2,000 suit or dress in a Wal-Mart store? If you did, as a customer, what would go through your mind?
Wal-Mart’s core management philosophies include operational efficiency, lower prices and higher volume. Wal-Mart does not feature high-end merchandise in its stores. It would confuse its customers, employees and suppliers. The customer of a $2,000 dress has a very different set of expectations than that of a customer of a $30 dress. Selling a $2,000 dress requires a markedly different selling process than selling a $30 dress. Wal-Mart knows its business model and strictly adheres to it.
How well articulated are your core management philosophies? Is there ambiguity about your business model? Core philosophies are part of the DNA of your company. If there is confusion about the DNA, the company will not do well. Core philosophies affect everything the company does from its vision, goals and strategy to its capabilities, processes, roles and responsibilities, culture, performance measurement, and execution. Therefore, it is critical for you to identify your core management philosophies.
Business experts and consumers regard Apple as a highly innovative company. Many other companies also claim to be innovative, but Apple innovates in a special manner. It follows a core philosophy that permeates every single product it puts out in the marketplace. Apple constantly breaks new ground to make its products intuitive and easy to use. That is Apple’s No. 1 mantra, and it sets Apple’s products apart in the marketplace. Go out and search — you are unlikely to find an Apple product that is not easy to use.
Core philosophies are at a higher level than strategies. Strategies may change but core philosophies remain the same regardless of internal or external conditions. To identify its core philosophies, your company should consider if there are any unchangeable, non-negotiable aspects that define its business approach. Some questions for you to ask include: Does your company limit itself to certain industry verticals, market segments, account sizes, specific customer needs and specific product/service attributes?
Look around and identify successful businesses, whether they are Fortune 500 companies or the local bakery store. If you examine these successful businesses closely, you will find they all have a set of core management philosophies that they do not violate. It defines their business. It is their DNA.
It does not matter what core management philosophies you choose. Every answer is right. What is important is to have a clear answer that removes all ambiguity. You may select operational efficiency and low prices like Wal-Mart or you may choose superior products and premium pricing like Apple. Know what you are choosing and make sure all your stakeholders — employees, customers, suppliers, investors, board and management — understand those choices. It may very well be the difference between success and failure.
Ravi Kathuria is the president of Cohegic Corp., a management consulting and executive coaching firm. He is the author of the highly acclaimed book, “Coherent Strategy and Execution: An Eye-opening Parable about Transforming Leadership and Management Perspectives.”
Suddenly immersed in Switzerland to head teams from 17 different countries, Kelly Grier was understandably overwhelmed. It was late 2000, after she moved her family overseas for a position with Ernst & Young LLP.
Grier was responsible for Europe, Middle East and Africa engagement teams, and she was having trouble handling the group’s broad differences. Some advice from the chief financial officer of a client turned the challenging experience around and shifted her mindset going forward. He told her she wasn’t in the “United States of Europe.”
“Every one of these countries is very unique. Every one of its people are very distinct,” Grier remembers him saying. “They have their own culture, their own mores, their own business practices, and you can’t just come in here and impose the American way. You can’t even try to come in here and have one homogenous approach to all of the different geography, because it’s vastly different from one country to the next.”
Grier is closer to home today, as the managing partner of Ernst & Young’s Chicago office, but she remains a huge proponent of global mobility — if for no other reason than she sees her clients expanding globally all the time. To be able to serve them competitively and effectively, leaders like her need that same expansive mindset, whether or not they hone it overseas.
“That criticality of being able to operate with a global mindset and function effectively in any geography around the world — having that sort of intellectual agility is critically important for us, as a firm, to serve our global client,” she says. “Even if you are solely a domestic organization, the fact is that the global environment is influencing your success, because your competitors might be overseas and pulling your business outside of the U.S. You face domestic competition where there’s a more global mindset, and they’re offering a differentiated solution because of that advantage.”
Grier’s broadened perspective translates into everyday inclusive leadership when she leverages her team’s diversity into a common vision.
“You can’t generalize people or places or business practices,” says Grier, who oversees 1,700 employees at E&Y’s second-largest office. “You really need to understand and respect that there are vast differences — and that’s the power of it. If you aren’t able to harness the power of it, it will be an incredible impediment to your success.”
Draw out diversity
When Grier met with teams from the 17 countries she oversaw, she’d get about 17 perspectives around the issue. She grew so accustomed to that constant diversity of thought that she notices when it’s missing from her team today.
“I can just sense when I’m not getting everything,” she says. “In some cases, I’m not getting everything because people in the room aren’t contributing everything that they have to contribute, and in some cases, it’s because I don’t have the right complement of people in the room. There’s no panacea for this; it’s really a learned behavior that comes from operating in a highly diverse environment where those diverse perspectives are really valued.”
You can obtain diversity on your team by intentionally building it in, but that doesn’t mean you need to place employees just to fulfill a quota of minorities.
“When we talk about diversity of perspective, it’s not necessarily their ethnicity or even their gender — it’s their experiences that inform a more diverse perspective,” Grier says. “You could align (team members) with other activities, other projects, other teams within the organization. Even transferring them from one business to another business or from one function to another function broadens one’s perspective. You could certainly ask that they take on a leadership role in community organizations. There’s almost an infinite amount of opportunities to broaden one’s perspective and create that kind of diversity of thought and experience.”
You can also highlight diversity by grouping cross-sections of employees for projects. Grier forms task forces with representatives from various generations, service lines, genders and ethnic backgrounds. The internal communications task force, for example, represented a spectrum of communication styles, which helped develop more effective messaging that would resonate across the company.
An intentionally diverse team is crucial, but it’s moot if you don’t maximize, and later leverage, the team’s diversity. In order to do that, you have to tap into every viewpoint you can and consider its weight in the discussion.
“Diversity without inclusiveness is counterproductive if anything,” Grier says. “You’ve got to have the ability to really draw out different perspectives and then synthesize a wide variety of thoughts and perspectives. You’ve got to know when you’re not getting that broad and diverse spectrum in the dialogue. Looking for the folks who may not be fully engaging or participating and drawing them out, that sends a message that everybody matters.”
One of Grier’s partners, for example, is an “intellectually sophisticated thinker” with plenty of valuable perspectives to share. He’ll fill an hourlong one-on-one — and then some — with his distinct ideas. But in a two-hour group session, he only makes a couple of comments.
“I’ll ask him in advance of the meeting, ‘This is what we’re going to talk about. You have such a valuable perspective; I want people to be able to benefit from that perspective. I really want you to talk specifically about this when we get everybody together,’” Grier says. “I needed to know that person well enough on a one-on-one basis to know that this is his style, that he does have this incredible broad perspective that’s very valuable. For me to draw that out and get that that very valuable perspective infused in our group discussions, I needed to approach it differently.”
Welcome all ideas
Part of inclusive leadership is soliciting opinions. But if you’re quick to brush off certain perspectives, see how quickly the feedback stops.
You need to give diverse perspectives a safe place to surface by creating an environment where all opinions are welcome.
“How, as a leader, you respond to that contrarian view will really dictate whether or not people feel safe in sharing a perspective that’s different from the norm,” Grier says. “You’ve got to be visibly both encouraging and then rewarding those folks to share a perspective that is different.”
The way you react to comments that directly challenge your stance can be the biggest revelation about your leadership style.
“As a leader, you’ve got to be able to face some criticism of how you’re seeing things, and not become defensive or dismissive,” Grier says. “That immediately shuts down that communication channel. You’ve got to express a little bit of humility — perhaps, ‘I didn’t know that,’ or, ‘I hadn’t thought about it that way.’ You really set the tone by how you behave — not only as a leader of the team but when your own perspective is challenged.”
Even if you end up going with the majority, your decision-making process only benefits from a richer variety of thought. If you want to expand the possibilities on the table, you’ll want to vet every perspective you can.
“If somebody says something that’s a little out of step with the normative thinking and you don’t give that point of view ample airtime in the discussion or if you’re dismissive, if you’re defensive, if you don’t really listen to what’s being said and understand it fully before you make an opinion of what place it has in the discussion, that will immediately shut down that candor that you want,” Grier says. “Make sure that everything that you say is grounded in the spirit of inclusiveness and encouraging that candor, because it’s very easy to just react quickly in a manner that sounds dismissive. At that point, the conversation’s over and everybody around takes a message from that; it’s not just the person who may have made the statement.”
You set the stage for an inclusive environment, but you won’t get far if you’re the only one with that mindset. Enforce an open attitude from your team members, too.
“Where you see a member of your leadership team cutting somebody off at the pass, you’ve got to call them out on that — obviously in a constructive manner and in a respectful manner — so the person who made the comment knows you insist on having that open and inclusive environment,” Grier says.
That’s sensitive territory; so many leaders prefer to privately pull the violator aside later. If you can do it constructively though, as Grier does, call the person out in the meeting to make a point for everyone.
“I would probably say, ‘Bob, I think that Jim was about to share a perspective that I would find very valuable,’” she says. “‘Before we move on to the next point that you were going to make, I want to make sure that he has an opportunity to complete that thought.’”
The more diverse viewpoints you draw out, the more perspectives you have to keep straight. Managing and synthesizing those is the key to leveraging diversity.
To keep track of what her employees think, Grier records it all.
“I take copious, copious notes,” she says. “It sounds so fundamental, but I will take notes of every one of these conversations. Very quickly, you see themes emerge. They’re not exact replications of one another but there are common threads through these conversations. It really does become apparent after having several of them and reflecting on, ‘What were the key themes and how do I then coalesce those messages into one message that will resonate with everybody?’”
Writing gives Grier something to reference and ensure everyone’s voice is represented. By synthesizing opinions inclusively, you’re setting yourself up for buy-in later on.
For example, Grier spent the first 90 days as managing partner of the Chicago office on a listening tour, meeting one-on-one with partners, senior managers and various staff members as well as with groups of employees. All she did was ask questions about moving the company forward — and listen. Then she melded several perspectives into the vision she conveyed to employees later.
Sure, you won’t satisfy every person’s wishes every time, but weaving every perspective through your thought process will show employees you listened.
“People are more inclined to buy in if they’ve got some skin in the game and they’ve been a part of crafting that vision,” Grier says. “Having that upfront engagement — my 90-day listening tour — people could hear the words that they had said to me in the messages that I then conveyed in a more synthesized fashion afterward. They knew that I had listened to them and they know that their perspective was part of the strategy, and they were on board in driving toward that strategy.”
Another benefit of drawing diverse opinions out during your meetings is exposing members of your team to them. Those discussions can build buy-in by enhancing understanding of the issue, potentially turning employees on to ideas they initially shoot down.
“For example, when a company launches a new internal development program, members of its team may jump to conclusions about what that program means to them,” Grier says. “Team members could make assumptions based on their previous experiences with similar development programs, which impacts their engagement. To maximize results, leaders should elicit a diversity of perspectives right away, debunk misconceptions and incorporate relevant suggestions. Those steps should greatly improve the participation of your teams and the program’s success.”
If you make those steps habitual, you’ll extend the power of diversity into the fabric of your organization. When Grier compares the business world that she witnessed overseas a decade ago with today’s environment and then projects another 10 years into the future, she realizes the importance of continually harnessing all perspectives in an ever-expanding global paradigm.
“You can’t rely on just saying the right things; you’ve really got to experience a mind shift,” Grier says. “Most companies have a stated objective of having an inclusive culture and really celebrating diversity. But first of all, it needs to be grounded in the fundamental imperative, which is that the world is different today than it was a decade ago, and it will be profoundly different a decade from now. We need an entire paradigm shift to be able to not only survive but really thrive in that changed global environment.”
How to reach: Ernst & Young LLP, (312) 879-2000 or www.ey.com
Chicago Managing Partner
Ernst & Young
Born: St. Cloud, Minn.
Education: B.A. in accounting from St. Mary’s College at Notre Dame in South Bend, Indiana
Favorite travel destination: Italy or France
What was your first job, and what did you learn from it?
My very first job was as a babysitter. I certainly learned the importance of being responsible and communicating well. I actually had a wide set of experiences when I was young: I worked at this Dairy Queen-type shop. I also worked at a machine shop, if you can believe that, for a period of time as I was putting myself through college. I’d say you can probably take all of those experiences together and one of the key lessons learned is just respect — respecting everybody for what they bring to the table, having a bit of humility to how you approach the people that you work with at all spectrums of the work environment. I have a great deal of empathy and support for the people who come in and empty my trash bins because that’s very much aligned with a job that I would have been doing to put myself through college.
Your workday is off to a bad start. How do you turn it around?
I truly don’t have many days that start off on a bad note. I actually just love what I do. There’s array of challenges or issues that I’ve got to deal with, but rarely does that actually cause me to perceive that as a bad start. My workday is also very dynamic. What I do from 7 to 8 and then what I do from 8 to 9 and thereafter is very different. So it would be difficult for me to get mired in any particular issue because I’m so quickly on to the next.
If you could have any superpower, what would it be?
It’s got to be being able to clone myself to be a multitude of places at the same time. I feel like I’m trying to do that on any given day, anyway.
If you could have dinner with anyone, who would it be and why?
I would say Martin Luther King. He was such a dignified leader and was so committed to his values and faced such incredible adversity. He could have gone down a path of conflict and destruction and he didn’t. He was so committed to his values of what’s right and what’s wrong that he was able to really galvanize this whole sweeping nation of change in a way that was still aligned with his values. That’s difficult to do. It would be easy to become frustrated and angry and try to force change in a way that is perhaps not aligned with your core values. Somehow, in the face of adversity we can’t even imagine, he was able to do it. As a leader, that’s a quality that I greatly admire, that ability to galvanize and inspire others to do good and to carry out the mission without losing your way from a core value perspective.