Northern California (1069)

Thursday, 25 June 2009 20:00

Against the odds

Written by
Finalist
Health and Life Sciences

When Clint Severson became CEO of Abaxis Inc. in 1996, the company’s future was in doubt.

Abaxis, which markets blood analyzers to physicians for use in their offices, was losing money and barely had enough cash to stay afloat. Its machines lacked the ability to perform some crucial tests, it faced federal regulations that would require physicians to go through a lengthy licensing process before using its product, and in the veterinary market, a much larger competitor controlled 90 percent of the market.

Severson, who also serves as the company’s chairman and president, dug in to turn Abaxis around. He hired a new manufacturing director to find a way to lower the cost of the blood sample container from $22 to $4, increased manufacturing efficiency and hired a sales team to cultivate a small group of enthusiastic customers. And he tied every employee’s compensation to the company’s goals, increasing compensation as those goals were met.

Today, the blood analyzers can be used to perform 96 percent of the chemistry tests ordered in the U.S., and doctors don’t have to obtain a license from the FDA after Abaxis proved that someone with no prior experience could achieve reliable results. And unlike the way traditional blood samples have been analyzed, Abaxis’ technology allows for accurate and comprehensive analysis in less than 15 minutes.

As a result of the company’s revolutionary technology, it has increased its veterinary market share, and its sales have increased at a 36 percent compounded annual growth rate since 1996.

Even with all of his success, Severson has no intention of slowing down. Over the next few years, he plans to continue to broaden the analyzers’ testing ability, and his goal is to double Abaxis’ earnings and increase the company’s share of the total blood chemistry market to 10 percent.

How to reach: Abaxis Inc., (510) 675-6500 or www.abaxis.com

Thursday, 25 June 2009 20:00

Banking on success

Written by
Winner
Financial Services

When Ken Wilcox took over SVB Financial Group in 2000, it had just been through a difficult period and was facing the bursting of the tech bubble.

To ensure its survival and position it for long-term growth, Wilcox decided to refocus the bank on its core strength — lending to and focusing on the needs of innovative technology companies and their venture capital investors.

Making that move wasn’t easy, as it meant turning away from about 75 percent of the bank’s existing customer base. The transformation took a toll both on the balance sheet and the employees, and to make the transition easier on employees, Wilcox established a culture characterized by respect and communication, stressing a harmonious culture that strives to minimize negative behaviors and discourage internal competition.

Wilcox also retrained his staff to better understand the needs of the technology/life sciences community and began research and development efforts to identify innovative products to offer to its new core client base. He expanded SVB’s suite of products to meet the needs of his clients throughout their life cycle, strengthened the company’s balance sheet, and he boosted its board by replacing insiders with world-class experts. And he began focusing more strongly on customers’ needs.

Today, under his leadership, SVB has been transformed from a U.S.-centric commercial bank serving many industries into a global, diversified services company serving entrepreneurial companies worldwide, which is helping it weather the current market turmoil.

Going forward, Wilcox is focused on the future with plans to grow by investing in growth markets, in IT infrastructure to improve both efficiency and client experiences, in employee training, in the development of innovative programs, and in expanding the bank’s global reach with more international branches.

How to reach: SVB Financial Group, (408) 654-7400 or www.svb.com

Thursday, 25 June 2009 20:00

Multiple choice

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Let’s face it, when you’re in a budget crunch you’re looking to slash any line item that doesn’t show an immediate return. In today’s recession, training is becoming that item more and more.

The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, according to research firm Bersin & Associates. The average training expenditures per employee fell 11 percent from 2007 to 2008, and small and midsize businesses were hit the hardest, averaging 33 percent fewer training hours per employee.

You may think trimming or even axing training is justifiable — training takes time and money and doesn’t usually have an immediate return on investment. But educators say now is a prime time to enhance your employees’ skills, whether it’s taking advantage of slower business to cross train employees or supporting your employees in the additional responsibilities that they took on following company layoffs.

“When these major recessions occur, they change the world of business,” says Robert Tanner, instructor for continuing education at California State University, East Bay, and founder, principal consultant and president of Business Consulting Solutions LLC. “If the training budget is cut too severely, then these companies are not really positioned to do well when the economy rebounds. So as a result of that, they can lose their competitive advantage.”

Eliminating your training or education budget can be detrimental. But there are ways to maintain productivity with fewer dollars, and it starts and ends with efficiency.

Track your spending and its returns

One place to start is looking at the training or education you’ve done in years past. Did you see results that directly improved your bottom line? If not, look closely at what you’ve spent money on. Maybe you’re paying for employees to get advanced degrees that are useless to your company or maybe you lack the resources needed for your staff members to fully implement what they learned in training.

“When we talk about training, this is a common mistake companies make: They don’t allow sufficient time for the business professionals to observe, to practice and to provide feedback, they just try to get all the material out,” Tanner says. “The training design has to allow enough time for activities, for feedback and all of these things to occur for people really being able to take this back and make meaning of it in the workplace.”

There are multiple ways to track training, the most popular being pretesting and post-testing to grasp the change in employee knowledge. Whether or not you measured your employees’ change in skills, a follow-up assessment to gauge retention and whether more training is needed can provide positive feedback. Questions to think about are: Did they learn something from the training? If they learned something, can they apply it on the job? If they can apply what they learned on the job, did it have a positive financial effect on the company?

If you haven’t seen the results you were hoping for, don’t continue to throw the same training program at the problem and hope for a different outcome. It’s important to remember that training isn’t always the solution and that people learn in different ways. The best thing to do is either sit down with a training provider or internally spend time evaluating the best solutions moving forward.

Find solutions now, while planning for the future

Effective training that gets to the core of the problem starts with an analysis of what the issue is and having a sense of what you want to accomplish through training. A common mistake is assembling training for a particular reason but never defining the why and a quantifiable outcome.

An internal training department can outline the company’s objective, but you can always look to the experts at consulting firms, colleges and universities to do a needs assessment and align an educational plan with the results.

External providers can offer objective advice to what your company’s priorities should be when it comes to training and carryout implementation. And while you may be thinking short term in this economy, a long-term plan is essential to be a step ahead of your competition and execute successful training.

The best ways to assure you’re meeting your company’s needs and spending your money wisely are to link training to your strategic plan and your performance management system — each job description and employee annual review.

“Every employee, every time their performance is evaluated should also have attached to that evaluation a plan for how they’re going to get better in their job based on their own needs and the needs of the employers,” says Gail Whitaker, associate vice president for academic program development and dean of the College of Extended Learning at San Francisco State University. “Then the training regimen should be planned according to that.”

That guarantees a regular evaluation of your training program and your employees’ skills, and if you’re working with a provider, it keeps them abreast of your company’s future plans, which can lead to identifying problems and solutions earlier and faster.


Determine training that suits you and your budget

There’s a plethora of external sources to partner with, whether it be sending administrators to pursue master’s degrees or training employees on communication techniques. Colleges and universities tend to be the best bang for the buck, offering a one-stop shop with consulting, full implementation and a broad range of courses.

When it comes to training, the costs that add up are flying in topic experts, sending employees to out-of-town conferences or even holding training off-site. If you’re hoping to trim your training budget — and it seems many are — then think locally. Look at the office training and online services offered by local community colleges and universities.

Tough times call for creativity. Think about internal and external resources that lend themselves to free training. Check professional associations for round tables and seminars. Survey your employees on their areas of expertise and hold brown-bag lunches on those topics. If you’re bringing training in-house, just make sure you’re using a variety of techniques to meet each employee’s learning styles.

“What I would suggest taking a look at in a down economy is the motivation of the employees,” says Whitaker, who proposes splitting the cost of training with employees. “We’re seeing more and more of that, and employees are willing to do that, because they value the training so much. It’s a way for them to continue their upward mobility even in the down economy.”

And look for funding sources — federal, state and local organizations offer training grants, whether it’s the U.S. Department of Labor or one of your local economic development corporations.

If you’re thinking about dramatically cutting your budget, first think about why you have training in the first place: to improve your retention, customer satisfaction, corporate culture and the overall growth of the company.

“People think that maybe education is dispensable, but it isn’t any more dispensable in the corporate world or in the nonprofit world than it is at the elementary-school level,” Whitaker says. “Not investing in education and training would be like the state not funding education — everybody knows you have to do that.”

Tuesday, 26 May 2009 20:00

3 Questions

Written by

Tom Carter is vice president of sales and broker relations for Kaiser Permanente California, and he has more than 22 years in the health care industry in sales, marketing and account management. Carter leads Kaiser Permanente’s group sales team statewide and co-leads the broker development strategy. During his career, he’s focused on prevention, ranging from behavioral health care to promoting healthy living.

Q. How can you save on health care costs without spending money?

Look at what’s available for free. A lot of this is about education. People want access to more information so they know how to change their behavior. People, if you ask them, (say), ‘I know I have to increase my activity; I know I need to eat healthier. But I’m busy.’ Their lifestyle is such that someone needs to help them and coach them through what you can do based on your lifestyle.

Q. How can employers determine what programs will benefit their employees?

We just did a survey that had over 126,000 respondents. The top three (responses) seemed to match every other survey I’ve ever seen, which is help me with weight management; I’m interested in nutrition. Then the third area is — especially in today’s economy — I’d like to learn how to manage my stress. Ask your employees, ‘Which programs would you be more interested in so I can make sure they’re available to you?’

Q. How much time does an employer need to dedicate to promoting healthy living?

They need a champion, and it doesn’t always have to be the CEO or the CFO. You need to have sponsorship from the executive level even in a small company but usually somebody on staff has a passion for healthiness or having a healthy lifestyle. If you ask who wants to be our wellness champion this month … somebody will usually put their hand up. That’s been one successful kind of tactic. The other one is to the extent an employer is using a broker, the broker can act as that wellness administrator or champion and can come in and do monthly meetings.

Tuesday, 26 May 2009 20:00

Bio: The Guertin File

Written by

Education: Bachelor of science, electrical engineering and computer science, University of California at Berkeley

Previous positions in the company:

? Joined company in 1976

? General manager of customer support: 1982 to 1989

? Corporate vice president: 1992 to 2002

? President, Oncology Systems business unit: 1992 to January 2005

? Executive vice president: October 2002 to July 2005

? Chief operating officer: October 2004 to February 2006

Outside organizational involvement:

American Electronics Associations — past chairman of the board, current member of the organization’s Silicon Valley/Northern California Council

Diagnostic Imaging Section of National Electrical Manufacturers Association — board of directors member, past chairman of the organization’s Therapy Systems division

American Society of Therapeutic Radiology and Oncology — corporate council member

Canadian Association of Radiation Oncologists — corporate council member

Saturday, 25 April 2009 20:00

Rebalancing act

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The pace of layoffs has slowed and, in a recent study conducted by Watson Wyatt Worldwide, 55 percent of employers said major job cuts were over. Although news of a stabilizing economy is good, it may heighten the challenge of motivating and retaining employees, because more than half of surveyed employers said they intend to increase cost-cutting measures through 2009 and beyond. The recession has necessitated short-term savings tactics like reduced bonuses and salaries or wage freezes, yet it has done little to allay experts’ predictions of long-term labor shortages. The answer is to make sure that every penny spent enhances the company’s employment value proposition.

“A company entices and retains employees through its value proposition,” says Yana Plotkin, CCP, senior compensation consultant for Watson Wyatt Worldwide. “Historically, turnover has increased during periods of recovery, so now’s the perfect time to look at everything that contributes to the employee work experience to make sure it is creating the ultimate value.”

Smart Business spoke with Plotkin about the best ways to motivate and retain employees by recalibrating your company’s employment value proposition and redesigning incentive programs.

What is an employment value proposition and how can it be rebalanced to achieve maximum return?

Every company has an employment value proposition, but few know what it is, how to customize it or how to communicate it to employees. Compensation, benefits, the company’s work environment, brand and culture all contribute to the total experience of working for a company, and its value is determined by the company’s employees. First, employers should assess the desires of their critical work force — those employees they must keep — then customize programs and align funding so expenditures deliver their intended impact. For example, a younger work force might be willing to get by on 10 percent less salary because they value investments in training and development, whereas a more mature work force might affix greater value to continued pension contributions and 401(k) matches. One size does not fit all when it comes to value creation. The key is to focus on what is most valuable to the most critical people that a company needs to retain in order to survive and succeed.

How can employers motivate and retain employees with reduced salary budgets?

Our survey shows that companies have budgeted only 1.5 percent for salary increases in 2009, yet as late as May of last year, executives said that retention of key employees was still their No. 1 concern. Rather than mandating no salary increases or small merit increases across the board, top performers or those in critical jobs should receive larger raises. Scarce engineers or rainmakers in professional firms are much harder to replace, and differentiation in rewards and recognition is a key principal to retaining high performers in difficult times by communicating to the most talented workers that the company values them.

How should incentive programs be recalibrated?

This area is particularly challenging because companies with pay-for-performance plans may find that those goals currently are unattainable, which will only demotivate employees. Consider these
alternatives:

? Review your company’s long-term goals and projections to make sure you continue rewarding employees for the right behaviors during the downturn, but perhaps with smaller awards. Now may be a good time to lower performance thresholds to energize and motivate employees, while raising the performance levels leading to maximum payouts in order to protect shareholders and owners from paying windfall bonuses resulting from a recovering economy.

? If your company needs to preserve cash, consider paying bonuses in stock or a combination of cash and deferred stock or stock options. This tactic increases retention and takes advantage of the depressed stock values while aligning employees’ interests with the company’s long-term strategies, ultimately creating a return for shareholders.

Might other incentives also enhance value for employees?

Many companies budget as much as 1 percent of annual salaries for employee recognition, yet few managers even know the funds exist, what to reward for, or that they have the discretion to use those tools to motivate and retain key employees. Look for unutilized funding sources to grant top performers spot bonuses, gift certificates or other recognition so they know they are appreciated during difficult times, and continue funding training and development programs so your company is positioned to optimize business opportunities during the rebound. Keep in mind that, at some point, the market will change and employees will once again be in the driver’s seat. How they are treated now may make all the difference in whether they choose to stay or go once the economy turns.

Yana Plotkin, CCP, is a senior compensation consultant for Watson Wyatt Worldwide. Reach her at Yana.Plotkin@watsonwyatt.com or (415) 733-4212.

Saturday, 25 April 2009 20:00

The Hitz File

Written by

Education: Bachelor’s degree, computer science and electrical engineering, Princeton University

On creating company values: You start making your list of what you think your values are, and they all look pretty much the same. At first that bothered me. ‘Gee, what’s the point? It has the same stuff as anybody — honesty, teamwork, blah, blah, blah.’ To me, values of a company are like a constitution for a country. So suppose you were starting a brand-new country and you were trying to think of what the constitution should have in it. Can you imagine the forefathers and foremothers going, ‘You know, we were going to put freedom of speech, but that one was taken.’ No. Freedom of speech is a good one. It’s not taken. The bigger point is not, ‘Is it taken?’ The bigger point is, ‘Do you actually believe it?’

On evaluating risk: A lot of times when people evaluate risk, they compare against the wrong thing. James (Lau, the other co-founder) and I had perfectly good jobs. We decided to quit our jobs and go do a start-up. A lot of people said, ‘Oh my God — what are your odds of success? How risky is that?’ And yet, a bunch of friends were quitting their jobs to get an MBA or law degree.

Compare their risk to my risk. They were going to quit their jobs and go spend a couple years not getting paid. I was going to quit my job and spend a couple years not getting paid. At the end, they were going to learn a lot, and at the end, I was going to learn a lot. In the end, I might create a company, and they had no chance of that.

Instead of asking, ‘What are the odds that the good thing might not happen?’ ask, ‘What’s the worst thing that might happen, and what are the odds of that?’ If you convince yourself that the worst thing is not so bad, then whether or not the good thing has some probability of success, that matters less. The risk of an upside not happening, that’s not really a risk. It’s downside risks that might kill you.

To learn more about Hitz and his book, ‘How to Castrate a Bull,’ please visit his Web site at www.howtocastrateabull.com.

Thursday, 26 March 2009 20:00

International tax planning

Written by

The closest thing to a minefield in today’s

global business environment may be the

myriad U.S. and foreign tax rules affecting cross-border business. Companies involved in international business need an

effective global tax strategy, or risk incurring

highly unfavorable tax consequences. Worse,

uninformed companies can miss the opportunities to take advantage of U.S. and foreign

incentives available to companies engaged in

cross-border business transactions. International tax pitfalls and opportunities exist

even for relatively small U.S. companies that

merely sell goods destined for U.S. export or

engage in foreign R&D.

Smart Business spoke with Doug Wright of

Burr Pilger Mayer LLP to gain insights into

the complexities of global tax planning, how

companies can simplify them, and how international tax consultants can help.

How do companies benefit from partnering

with international tax consultants?

International tax specialists can help companies convert tax traps for the unwary into

opportunities. Effective upfront international tax planning can reduce a company’s global tax costs by minimizing the potential for

paying double taxes to a foreign jurisdiction

and the U.S. An effective global tax strategy

will balance U.S. and foreign tax considerations in the context of a company’s broader

business and financial objectives. This translates into increased after-tax cash flow,

increased after-tax earnings and financial

statement benefits, and ultimately increased

shareholder value.

Why is international taxation so complex?

The various U.S. and foreign taxing jurisdictions are all seeking a bite of the same

cross-border revenue apple. They have

become increasingly proactive and diligent

in pursuing collection of what they consider

to be their ‘fair share’ of a company’s cross

border revenues. A good example of this is

the development during the last decade or so

of widespread and complex international

transfer pricing rules, which require companies to document their annual compliance

with strict ‘arm’s length’ standards for

pricing intercompany transfers of goods

and services. These and other international

tax rules are constantly changing, which

becomes a major minefield for uninformed

companies that are engaged in cross-border

business.

International tax consultants can meld the

U.S. and the foreign tax sides of a company’s

business into a coherent tax and business

strategy. They are well-versed with the

issues, trends and changes involved in

international tax planning, and track them

continually.

What is the key to an effective international

tax strategy?

To do international tax planning properly, a

company has to develop a global tax strategy

that facilitates its global business objectives.

The starting point is developing a solid understanding of a company’s business and financial position, its international operating strategy, and where and how it intends to operate

outside the U.S. With this knowledge, an

international tax consultant can help a company develop an overall global tax strategy

that makes good business sense and is practicable. International tax planning for specific situations can then be approached in a

coherent manner, taking into account the

company’s broader global tax and operating

strategies.

Do international tax rules provide incentives

for companies?

Yes, there are significant cross-border tax

incentives available in the U.S. and abroad. A

key U.S. incentive for exporters is the IC-DISC (Interest Charge Domestic International Sales Corporation). Although this incentive

has existed for more than 35 years, many U.S.

companies aren’t aware of it or may not realize that they qualify. It can significantly

reduce the U.S. tax by 50 percent or more on

income from sales of certain export products

and from certain international services. The

IC-DISC rules are highly complex, however,

so an experienced international tax consultant can help a company identify and capture

the maximum IC-DISC export tax benefits.

What risks exist for companies that do not

develop effective international tax strategies?

Companies that are not familiar with international tax rules, cross-border transfer pricing requirements and double tax treaties are

much more likely to suffer unnecessarily

high global tax costs, including increased tax

compliance burdens and tax penalties. For

example, many less-developed countries

don’t have a good international tax treaty network, so it takes careful cross-border tax

planning to minimize tax burdens, including

high foreign corporate tax rates and high

withholding taxes applied to a wide spectrum of ‘outbound’ payments from such

countries. The same holds true with transfer

pricing. The U.S. has had fairly well-developed transfer pricing rules for many years,

including potential transfer pricing adjustment penalties and interest charges, but

developed and developing foreign countries

also now have their own sets of transfer price

rules. So, it’s no longer just a matter of being

focused on the IRS side of the transfer pricing equation, but also making sure that foreign transfer pricing problems are not created. An experienced international tax adviser

can assist a company in establishing a tax-effective cross-border transfer pricing strategy that helps ensure that U.S. and foreign tax

and transfer pricing landmines are not inadvertently stumbled upon.

DOUG WRIGHT is a partner in Burr Pilger Mayer LLP’s International Tax Practice. Reach him at (925) 296-1044 or dwright@bpmllp.com.

Thursday, 26 March 2009 20:00

Building blocks

Written by

John F. Eller first experienced a leadership transition when the two founders of SB Architects retired from the firm and left him in charge.

“The thought that scared me to death was, ‘The founders are going away; now what?’” he says.

But Eller rose to the occasion. The principal and president of SB assembled a strong team around him, and with his guidance, SB Architects has become a 98-employee, two-office enterprise that earned $28.8 million in 2008 revenue.

Smart Business spoke with Eller about how to motivate employees and how to tell when they are ready to be promoted.

Q. How do you motivate employees?

Each member of our management team defines that a little differently. For me, I define it in terms of what motivated me. What I’ve found successful in motivating other people is describe to them and encourage them toward opportunity.

Try to eliminate for them and encourage them toward really demonstrating their particular talents and capture the opportunities that will come by that demonstration.

I usually define it in terms of, ‘Do your job, and as best you can, do your boss’s job.’ My advice to them as part of the motivation is, ‘Always be learning.’ Always be focused on trying to do their job as well as they can, be in command of that responsibility, but always look to do their boss’s job, so they learn while there is a safety net. The security is that their boss is responsible for their own performance. But the more that person can do their boss’s job, they learn in an environment with a certain level of safety — but they take on the opportunity to improve the performance of their boss.

Then, when they are given the opportunity to step into that position, they’ve already been doing it. They’ve already demonstrated their capacity to do it.

Q. How do you handle an employee who doesn’t want to take advantage of those opportunities?

Every company has people who find their comfort zone. It is incumbent on the person to engage in the company.

For those who want to come punch the clock and do their job and do it well, they can be valuable people in the company. Very talented people who participate in the company at that level — you tolerate for their talent. You provide them with a certain level of reward.

But the people who really want to participate in the company, who take that extra step, are the ones who reap the greatest benefit just in personal return and also in the reward the firm provides and acknowledges them for their efforts.

Q. How do you assemble a strong management team?

You look for those people who took advantage of opportunity, stepped up and showed an interest in participating at that level — people who demonstrate not only the desire but the sense of judgment, sense of people, sense of ‘firm first.’

Really, it comes down to trusting your instincts about people and knowing that a variety of people have to compose the management team. It’s not a one size fits all; it’s not just little clones of myself but people with different talents, different attitudes, different perspectives.

They complement each other. Over time, establish that group so there is a significant level of trust between the players.

Q. How can you tell when an employee is ready to take that next step up?

That’s mostly gut instinct. But I’ve always found that to be a really interesting dynamic. There are people in the company who are very ambitious. They aspire to title and request it. Generally, those are the people who are not ready.

They can be, and you can tolerate elevating them for their talent and ambition, but in some respects, you want the person who just does what you are hoping they’ll do as they follow their career path. They understand there is opportunity, pursue it and take those steps without the need for acknowledgment.

Yeah, it’s there. They want it, but they aren’t asking for that acknowledgment. They are more often surprised by the opportunity. When you say, ‘I want you to be engaged at this level,’ and, ‘I want you to do this, this and this,’ they feel surprised, motivated, challenged, scared, all those things.

Then they acknowledge they’ve been honored. But the real answer is the people who deserve it most are those who may in their own hearts harbor expectations and desires, but they don’t go about advertising it. They don’t go about insisting on that recognition. When given that opportunity, over and over, I’ve seen them ask, ‘Are you sure?’ They have that trepidation; they have that doubt. But it tends to translate to a desire to prove that your guess that they can step up and take that responsibility is accurate.

How to reach: SB Architects, (415) 673-8990 or www.sb-architects.com

Monday, 23 February 2009 19:00

Believe

Written by
Not long after he joined the company in 2004, John W. Combs gave ShoreTel Inc. the equivalent of a sucker punch.

The recently named chairman, president and CEO told the then-$18.8 million unified communications company that the new revenue goal was $100 million. With the room suddenly silenced, Combs — who helped lead Nextel’s growth during the ’90s — assured people that the aggressive challenge was one the company could handle.

His track record helped sell his employees on the idea, and four years later, the company exceeded the goal, posting fiscal 2008 revenue of $128.7 million. After that, Combs found his people a little harder to knock out.

“When it was clear we were going to make the goal, it was not as crazy to say we’re going to hit a billion,” Combs says. “A new hire might say, ‘This guy doesn’t know what he’s talking about,’ and other people tell them, ‘He is crazy, but we will do it.’”

Smart Business spoke with Combs about why you need to ask who a potential hire’s biggest antagonist is, how you get your people to believe in unbelievable growth goals and why you have to build an A team.

Take the time to find an ‘A.’
You have to attract people to your team that are A players. If the executives at the organization are not A’s, then that isn’t happening. A’s hire A’s. B’s don’t hire A’s — and C’s never hire an A. So if you’re going to build a team — particularly if you’re going to grow something very large very quickly — you’ve got to have people who can do and accomplish a lot more and are more adept than people who are a B or a C.

I personally expect that the quality of the management teams, the sales teams, the engineering teams that we’re bringing in are top notch. There’s a real tendency to say, ‘This (person) seems good. I’m in trouble, and I don’t have any other candidates, and she may not be an A, but let me get her on board right now.’ ... And you say, ‘We’ll straighten her out later.’ And that never happens because you don’t change people.

A lot of people seem to think that checking references is just something that you do as it’s convenient. I personally take time to check references for the people that join my team, and I will spend an hour on the phone with those individuals probing.

I developed a list of questions, which helps to really get at the issues. If they didn’t include their former supervisor, ask, ‘Who was their boss, and what would he or she say about them?’ The one I like the best: ‘This guy Mike sounds like a good guy; who was his biggest antagonist in the organization? Oh, it was the CFO. Well, what would the CFO say about him?’

Or, ‘Give me a difficult situation you were in and how he reacted. Would you hire him again — if so, why?’ And if the answer to that question is yes, you ask, ‘Why haven’t you hired them in your organization?’

Earn support during times of opposition.
There are times when you have to go against the team. ... So being able to stand up and articulate your principles is important, but you better anticipate and handle the disappointment and frustration they’re going to feel.

If you have a strong need to be liked, then this is not a position you want because you have a lot of opportunity to frustrate people. You have to have a clear vision of where you’re taking the business, and you have to maintain that direction through the frustration of people who you really respect.

But being a leader is working through that short-term frustration to show them the way to that long-term success.

When Wayland Hicks was the CEO of Nextel, I ran the largest region of the company, and he and I didn’t agree on more things than we agreed upon. But he had the ability to articulate to me my position as well as I could, and if somebody could do that and decide to do something different, then I felt very comfortable supporting that.

I was surprised at how much passion I would end up putting into supporting his position because he understood my position and decided to go another direction.

Anybody can do that. It’s not a matter of communication skills; it’s based on the investment of time. If you’re in a rush situation, stopping and taking the time to listen to someone and then articulating their position back to them takes a lot of time. But if you do it, then people know that you listened and will support the process.

Use your credibility to encourage lofty goals.
You’ve got to set bold, impossible goals, and you have to be able to convince the team that they’re going to accomplish those goals. When I joined ShoreTel ... I made an announcement to the team that our goal was $100 million, and when I did that, there was literally no oxygen left in the room.

We’d been working for seven or eight years to get to $18 million and to have this person come in and say we’re going to get to $100 million was seen as being pretty radical.

But you don’t send an e-mail out saying we’re going to be $100 million when you’re $18 million; it’s always done in person. They have to understand from you that you’ve been able to reach big goals before.

At Nextel, I was the 34th employee, so it helps to share that track record with them, and by letting them see what you’ve done, they see that you know what you’re talking about.

HOW TO REACH: ShoreTel Inc. (800) 425-9385 or www.shoretel.com