Jim Cragg Featured

8:00pm EDT October 26, 2007

Observe — then act. To be a great leader, you must first step back and assess the culture and the current state of your company before blindly applying your own experience, says Jim Cragg, president and chief operating officer of MegaPath Inc. Having spent his adolescence moving from country to country with his father, an executive with Pan American World Airways, Cragg speaks with some authority. Whether in Tokyo, Munich or London, he patiently immersed himself in the culture before becoming an active shaper of his surroundings. That approach has served him well at MegaPath, a 480-employee communications provider, where Cragg oversaw three successful mergers while leading the company to 2006 revenue of $160 million. Smart Business spoke with Cragg about communication styles, culture and why you have to invest in your employees.

Adapt your communication style. The definition of leadership is the ability to get people to willingly follow. We have [nearly] 500 employees, and they’re at different stages of their careers. You have to find a leadership style that addresses that stage in their career or that particular role that they play in the business.

The four quads of that leadership are: Telling. Some people do like to be told, ‘This is what you need to do,’ and, ‘This is how you do it.’

Selling. Some people like to be sold on an idea so that they feel more a part of the decisions.

Participating, which is a more participative leadership style.

And then delegating. Some people have all the get-up-and-go that they need. They just need to be given an assignment, and they’re off to the races.

It’s not overly transparent. To lead effectively, you have to have flexibility in how you communicate. You have to understand the group that you’re communicating to or the individual. You have to allow them the opportunities to talk and ask questions, and you have to give them a level of comfort that they can tell you what they think.

Validate change. We communicate that change is inevitable as we grow as a company. People have to see change as bringing a value. If you just zig and zag and zig and zag, they don’t perceive that as value. You have to validate on an ongoing basis.

It will be challenging at times. If we change, and it doesn’t work, we’ll acknowledge that we made a mistake. When you do change, if you make a mistake, that’s OK.

Keep adjusting the formula to really get customer satisfaction to the point it needs to be that the business grows.

Find a common theme. The culture is the company. You have to find very common themes in order to get a culture to change.

You can say things like, ‘You’ve got to be profitable. You’ve got to grow revenues.’ But that is kind of nebulous. People don’t see the financials necessarily in depth.

Our approach is to enable people to feel like they make a difference. The way that people can make a difference is with a cando, positive attitude about getting things done for customers.

You definitely have to lead by example. You have to be involved in the challenges of just about every aspect of the business to show that you’re willing to participate in getting through those challenges and hurdles in order to be successful. You have to stay engaged and close to some of the things that are being changed.

I think the real benefit is that you get through your projects in an agreed-upon time frame and you accomplish goals.

Show people they’re important. People have to feel like what they’re doing is important in order for them to feel like they’re participating in the success of the business. When they’re working for a company, they want to know that they’re making a difference.

There is a lot of recognition involved. There’s weekly recognition for jobs well done. I always respond to the job-well-done notes. Any time a sales rep wins a deal, I’m notified, and I acknowledge and thank them for that.

We have employee of the month, in which we recognize [employees] and give gift certificates. That is acknowledged on a companywide call. We acknowledge team performance, and we acknowledge salesperson of the month. There’s always the opportunity to give stock options, which we give to every employee in the company.

You have to continue to make sure that they recognize that what they are doing is an important piece of the business. If everybody feels that way, the endgame is happy customers.

Invest in your employees. If you’re asking your employees to deal with change and accelerate growth, you’re asking a lot of them. You’re asking them to make a difference and work very hard. That’s their investment in the company.

The company has a reciprocal investment that it has to put in place for the employee. We need to show employees that we’ll build company newsletters, and we’ll give them good benefit plans, and we will give them career-path opportunities and encourage them to look at internal postings. We’ve got a budget going into ’08 for a lot more training.

You need to make sure as executives that you acknowledge and have a reciprocal investment that at least matches the efforts that your employees are putting in.

Share success stories. That’s a common theme in our all-hands call. I will acknowledge individuals’ performances from our customers’ view.

Since I get out and meet a lot of our customers, I touch base with them, and I get very positive feedback on our employees. I pass that on either through e-mails or through acknowledgement on company calls. We’ve got a newsletter ... that will have a large part (about) employee recognition.

The benefits really are the culture. People want to know that they’re making a difference. They want to know that the customers like and appreciate our products. They want to know that we are successful as a company. And they want to know that they are growing as a businessperson.

HOW TO REACH: MegaPath Inc., (714) 327-2000 or www.megapath.com