When Enron offered to buy his software company and put him in charge of a $6 billion division, Tracy K. Price thought it was the opportunity of a lifetime. It turned out to be the beginning of a two-year nightmare.
Price’s company, FieldCentrix, was rolled up with three other companies to create ServiceCo, a new building services company under the Enron umbrella. Nine weeks later, Enron collapsed and the newly minted ServiceCo didn’t stand a chance.
“We never even got the stock issued,” Price says. “It made the dot-com implosion look like a protracted illness by comparison.”
Even though the ink had barely dried on their contract, Price’s team was buried with negative overspray from the scandal. So he immediately began damage control and tried to sever his ties to the sinking corporation.
“I naively thought that we could just unscramble the egg and have everybody go back to their respective corners,” he says.
But Enron wouldn’t go away that easily. The companies were dragged through bankruptcy court and put out to bid several times, but ultimately, Price was able to lead a buyout to take control of ServiceCo.
There was a lot of work to do to repair the company’s tarnished reputation, and he began by forging a new corporate identity, renaming the company The Linc Group.”
“What I tried to do with The Linc Group was take a business that had languished under [the] uncertainty of the Enron debacle and under the yoke of the despot and try to refresh that,” he says.
To combat the nagging specter of the “crooked E” that continued to haunt him, Price strove to make The Linc Group the polar opposite of its former parent company. He took employee accountability to new levels, shattered any comparisons to Enron by operating in total transparency — both inside the organization and with customers — and purged the company of anyone who wasn’t on board with his changes.
As chairman, president and CEO, Price led The Linc Group from the ashes of the Enron disaster to more than $500 million in revenue in 2007. He’s not finished either; the 4,200-employee organization is projecting nearly $600 million in revenue for 2008.
Operate in the open
Price’s plan to remake The Linc Group hinged on creating total employee accountability. The technology to create the type of system he needed was already available, but first he needed to bolster a technological infrastructure that was bordering on obsolete. Price spent $6 million to install a wireless system that would facilitate real-time accountability all the way down to the point of service.
“It was all about becoming a technology-enabled labor business — a business that was going to operate under these sets of values in real time,” he says. “You have the check and balance with the value systems and the ability to see the values were being lived in real time. That was the uniqueness of what we were trying to do.”
The system is able to give a constantly updated tally of each employee’s progress toward his or her individual performance benchmarks. However, instead of keeping that information restricted to members of the management team, Price drew back the curtains and let everyone see how well The Linc Group was doing.
For each project, each employee has a set of key performance indicators to work toward. Price’s team works with the customer to create goals and benchmarks that align with that particular project. By listening to their input, you create a stronger relationship with the customer and increase their overall satisfaction with the project.
“We tell them, ‘Here are the things that are important to us in order to redeem our contract value to you. Tell us the things that are important to you,’” Price says. “Then we marry those up and create these performance indicators that we benchmark monthly. So then our customers know — on a monthly basis, not quarterly or once a year — they know if we are hitting our marks, if we are closing out our job tickets, if we are doing the things we told them we were going to do.”
As the project progresses, the performance indicators are posted in real time on the wireless system. That helps customers see the project’s progress as it happens, and the transparency shows Price’s confidence in his team.
“It’s open kimono with your customers, so you’d better be confident that what you’re sharing is something you’re willing to aspire to,” he says.
Usually Price’s management team explains how each performance indicator creates value in the mind of the customer. The benchmarks for a field service technician will be different than the benchmarks for a dispatcher, but the key is showing them why each metric is important and how they will be evaluated.
“When you facilitate that with the performance indicators that say, ‘Here’s how you’re going to be evaluated,’ people are going to aspire to hit those marks,” Price says.
He rewards employees who consistently achieve the goals set for them with bonuses and promotion. He says by shining a light on his employees’ performance, he lit a competitive fire in his team.
“When you have that visibility and transparency in real time, you create an environment where people will naturally compete to try to do better than the other guy,” Price says. “That’s just basic human nature. If you create transparency down to the level of the point of service, then the guy who’s out there doing the work knows he’s getting the proper support, the proper training and the proper tools at the point of service, but he also knows he’s being watched.”
The extra scrutiny raises employee awareness of how they are performing in relation to their peers. Making employee performance indicators public can create tension in the workplace, so you must share the reasoning behind your metrics with your employees or else risk complaints of a skewed playing field.
If your business doesn’t actually manufacture anything, creating measurable goals isn’t always easy. To create easily defined metrics, Price says you have to eliminate vague, nebulous goals. During each planning session for a project, Price rejects any potential performance indicators that can’t be tied to a value and shown in real time.
“If we want to be X, Y or Z, that’s great,” he says. “Now, how do we measure X, Y [and] Z? If it wasn’t measurable, it didn’t have much value.”
As might be expected, some people didn’t agree with Price’s new direction for The Linc Group. During the two years of what Price calls “The Enron Wars,” the switch to a completely transparent work environment forced some employees to leave. Price didn’t mind though, because the employees who couldn’t adapt to the changes weren’t the employees he wanted to stay anyway.
“It’s visibility that creates the angst,” he says. “People either enjoy that because they like being rewarded for good behavior or people are hugely uncomfortable with that and they take themselves out of the mix. So if you’re the kind of person who runs under the refrigerator when the light comes on, we’re not a good place for you to be.”
Some employees may appear to be doing a good job, but appearances can be deceiving. For example, Price fired one very talented and bright employee who was running a division with modest success.
“When I had the final discussion with him, his comment was, ‘I’m not going to fault myself because I think what we’ve done has been pretty good,’” Price says. “And I said, ‘Yeah, well imagine where we’d be if you did the hard things, too.’”
Although he gives his managers the freedom to do their jobs the way they see fit, Price enjoys the added security of the constantly updated system that tells him exactly what they’re doing.
“You can’t blindly advocate responsibility to people,” he says. “As they say, hope is not a plan. You can hire the best people in the world, and if you don’t measure or monitor them, you’re still going to get an outcome that’s sporadic and haphazard.”
Give your employees the tools to grow
For The Linc Group to succeed, its employees not only have to hit their targets — they have to know why they need to hit their targets.
“I want the people who are the farthest from the point of origin of the company — the technician on the most remote outpost — to understand how his job impacts our strategy,” Price says.
To achieve that, Price has worked tirelessly to communicate the company’s values and to post and explain the performance metrics. You need to make your plan visible, so your employees understand how their job performance affects the big picture. Even if you have software systems that make real-time benchmark tracking possible, you won’t gain the benefits if your employees don’t understand the strategy behind those metrics.
“The nirvana for me is when a dispatcher calls in sick, she realizes that by her calling in sick, she’s going to know the productivity for us went down by X that day,” Price says. “If we have the systems to allow her to help us out remotely a little bit, maybe she’d be willing to help us out.
“If we have a guy who blows off an afternoon and just says, ‘I’m done, I’ve got my 40 hours in, I’m not going to take any more calls,’ we want him to know that the lost productivity for the company was X because he didn’t want to take another call.
People need to understand their direct economic impact on the company and how that aligns to the strategy.”
Price has a simple tactic to get his employees to buy in to that concept.
“In our company, everybody knows more work means more pay,” he says. “We’re not asking anybody to do more for less, and we’re not telling them they have to do more, then the customer is going to pay us less. We’re saying the more you educate yourself, the better you do, the more productivity and better performance, the more money you’re going to make.”
Those opportunities are available at The Linc Group, because Price is a firm believer that if you want your employees to improve, you need to invest in their development. He developed a robust training and education platform that includes online classes for employees to improve their job-specific skill sets and on-site executive training sessions in finance, general management and several other areas. He also sends several top executives to Duke University’s business school. The educational efforts are a considerable expense, but a necessary one.
“You can talk all you want, but if you don’t deliver and if you don’t spend the money on them, it’s hollow,” he says.
Although Price spends a lot of time and money training his people, it evens out when he doesn’t have to spend time or money replacing existing people. As a company evolves, it tends to outgrow some of the people who helped it reach that level. But by setting up educational programs and training seminars, you can create opportunities for those people to grow along with the company.
“Long ago, I learned the famous adage, ‘What if you train them and they leave?’” Price says. “Well, what if you don’t and they stay? I’ve always been an advocate of training our people, spending the money, and hopefully, if they’re led well and we create opportunities for them, they won’t leave.”
HOW TO REACH: The Linc Group, (949) 330-1555 or www.thelincgroup.com