SBN Staff

Tuesday, 19 September 2006 20:00

Prepared for anything

 In 2000, Sue Burnett lost a $16 million client. Then came the Sept. 11 terrorist attacks, and the economic fallout resonated with her business well through 2002.

As president of Burnett Staffing Specialists, Burnett could have freaked out when her business plummeted from $63 million in revenue in 2000 to $37 million in both 2002 and 2003. But she was used to this; it was just another dip in the ride.

She manages with the mindset that a recession could hit any day. By closing offices, cutting staff and watching expenses, she remained profitable during those difficult years, and revenue grew to $58 million last year, a 57 percent increase over 2003.

Smart Business spoke with Burnett about how she manages her business so it can grow but still stay afloat when encountering murky economic waters.

How do you manage growth?
We run our company debt-free, and we want to make sure that that’s important.

We run our company fairly lean in the standpoint of we try to run it as though there’s a recession around the corner. We’re not frivolous with our money, and we keep a lot of money in the company. We finance our own payroll. We don’t borrow any money.

Business owners sometimes overexpend, and they start borrowing money, and then a recession comes along, and then they’re in real trouble. I’ve seen so many of my competitors have to sell because they hit the limit on their line of credit, and they can’t borrow any more money.

How do you stay debt-free?
If you’re going to grow, you need to be able to pay for your growth. We never open an office and borrow money to do it. We’ve always had enough money to afford to pay the rent on another office.

If you go into debt to pay for an office, and the office doesn’t work, and you’ve borrowed the money to do it, then you have a double problem — you have a failure of an office, and then you have debt on top of it.

Watch expenses. I look at that American Express bill every month and every item. My staff knows that I’m going to do that because there are people that will take advantage of corporate credit cards. I look at the phone bills to make sure that we’re not having excessive long distance. I’ve had people in the past who’ve called all their relatives during the daytime.

We watch those kinds of things. We watch expenses. That’s very important.

Good times won’t last forever. People forget it. When the good times start rolling, they say, ‘Hey, this is going to last forever,’ and it is not. This is a rollercoaster. People have to understand that.

How do you correct those people problems when they arise?
Let them go as soon as possible. One of the biggest problems that business owners have is hanging on to mistakes for too long. When you know that you’ve made a serous hiring mistake, first you have to analyze, why is this person not doing well?

Is it a training issue? Or the office they’re in? Or the manager they’re working with? Or is there a personality conflict? What is that problem?

If you determine that the person simply is not the right person for the job because of their work habits or attitudes or whatever, then cut your losses and move on. One of the biggest mistakes I’ve made as a business owner is keeping people way too long and hoping that they will get better. Then the staff says when you let them go, ‘What took you so long?’

The staff sees that this person is not cutting it. They have more respect for a management that lets mistakes go versus letting that mistake continue to sit there.

One bad apple spoils the whole bunch; therefore, you have one bad person in the office, it kind of spoils everybody.

What inhibits a company from growing?
One of the things that keeps a company from growing is when your staff doesn’t think that the management is working as hard or as smart as they are. We’ve always led by example. We’re first in, last out.

They know that I’m out there selling the company constantly. I make about 120 company visits a year to clients. I make speeches. I’m out there publicizing the company constantly. They know that I’m out there working as hard as I can.

For business owners, when things start going well, they start playing golf, and they start coming in late and leaving early. Your staff notices those things, and they think, ‘Well, why am I working so hard if they’re not willing to work so hard?’

I never ask them to do something that I’m not willing to do.

HOW TO REACH: Burnett Staffing Specialists,

Tuesday, 19 September 2006 20:00

Jim Lites

 As president of the Dallas Stars, Jim Lites has hired many recent college graduates because he loves the excitement, passion and rock ’n’ roll attitude they bring to the organization. That passion is contagious, and it fuels him. But when he gets too ambitious or his ego rises into the stratosphere, he depends on his wife to smack him back down to Earth. The trust he has in others and the passion he exudes have helped him create a resume that reads like a dream to-do list for a sports fan — winning the Stanley Cup, working as president of the Texas Rangers, attending the Olympics, building sports arenas and being involved in soccer and arena football. Smart Business spoke with Lites about how he thrives off of his 115 employees and continues to lead them to success.

Hire and empower.
First and foremost, I like really intelligent people. Personality is really important, don’t get me wrong, but brains can’t be beat.

Intelligence is really important in business. It isn’t just raw intellectual capability, it’s the ability to understand problems, read other people and juggle 9,000 things.

Hire good people, give them responsibility and then let it go. They know that I won’t throw them under the bus if things go wrong. Everybody handles it differently.

I don’t have the patience or the mindset to spend a lot of time going over financial statements, even though it’s important to do. I’ve learned to hire a really good CFO and trust them and trust what they’re creating and how they handle the statements.

Make family — yours and those of your employees — a priority.
You can measure success a lot of different ways, but it’s very hard to lead people if you’re not sensitive to the issues that go on in their lives outside the hours they spend with you. You don’t get any of that if you don’t understand your people.

Communicate with them really well. Get to know their families. I have an open-door policy, and I know that sounds a little trite, but I interact with them. I try my best to be a regular guy. I stay away from closed doors.

I’ve seen very few successful executives in any business who are successful in business and unsuccessful in their personal lives. You’re not well-rounded unless you actively participate in your own family’s lives because what are you then? Just another suit.

I grew up with a father who worked very hard, and he always had time for me, and I try to do the same thing with my children. Pay attention to your family. Take care of your children. Be a good spouse. Listen. Get away when you can.

Don’t immerse yourself in (business) because it will burn you out.

Learn to let go.
I tend to develop from within and push a lot of people out of the nest — good people that have gone on to other teams or businesses who have been really successful. I may have wanted to keep them, but it’s better for their development to move on.

Don’t be afraid of it. One of the people I worked for early in my career was always upset if they heard anyone talking about employment with another company.

It always seemed funny to me because I see it almost as a compliment. You hate to lose your best people, but from a management perspective, a little change is good sometimes.

Having people move and change isn’t a bad thing, and I’m never offended by people wanting to get ahead who work for me. Sometimes their career path may be blocked by really good people in front of them.

Keep your ego in check.
Great people can be involved in businesses that fail. Lots of things can bring companies down. A lot of times, it’s leadership at the top.

Some of the pitfalls are forgetting the principles that made you successful in the first place. Principles that got them to those situations sometimes go out the door. Ego begins to drive decision-making as opposed to sound business principles. That’s sometimes fatal.

They’re touched by celebrity, and they forget the reasons they were successful in other businesses and do things they would never do — don’t empower their people, don’t stick to a plan; get amnesia, we call it. Amnesia can be a real problem — ‘Oh, I forgot I was told that.’

Learn to delegate.
It comes over time. Some people can’t do it and don’t like to do it and can still be successful. I never had the time to not do it.

It’s so many little tasks that have to be accomplished to run a successful, $100 million business as large as ours. You can’t do it all yourself, nor should you.

I’m a conductor. I orchestrate, listen and go.

Be honest with yourself and others.
Go with your instincts. Try your best to evaluate and put the bullshit meter on people’s ideas, because there can be a lot of hype. Stay true to yourself and try to be honest.

I have to manage down, and I have to manage up. I have an owner, and I’m only one of any number of businesses he’s involved with. For every issue I have, he has 20, so don’t take him everything that you might. You learn what to inform him of.

You have to have the balls — courage is a better term — to stand up to your own boss and tell him the truth. Eventually, if you don’t, and you sweep problems under the rug, they come back to haunt you.

If you go in and ‘yes’ the things they’re suggesting all the time, you can get in trouble, and it can be a problem. If you’re delivering news that’s unpopular, you’re better off delivering it than sugarcoating it or worse, ignoring it.

Have fun.
Try to have fun at it. People are attracted to fun. They’re attracted to laughter. They’re attracted to a sense of humor. You get more out of people if you try your best to spend some time with them.

Whether you’re in a CPA firm, or doing what we’re doing, if you’re the CEO and you’re the boss, you want people to relate to you, so you better have some fun doing it or you’re not going to, ultimately, be successful.

HOW TO REACH: The Dallas Stars,

Tuesday, 29 August 2006 20:00

Molding success

 Even as a kid, Carolyn Faulk knew how to make money. As an 8-year-old, she created a private club and charged other kids a quarter to join.

As an adult, while working as a teacher and keeping books for local plastics companies on the side, one of those manufacturers left town, claiming there wasn’t money in Houston. Faulk’s entrepreneurial flair kicked in again, and she started her own business.

“I said, ‘This is a great opportunity. I’m a young, healthy woman that is not afraid to work, and if I can’t make this work, I can always go back to teaching,” the president and CEO of A&C Plastics Inc. says. “I’ll always have a roof over my head, so what’s the problem here?”

She saved $5,000, got an answering service and started “just kind of playing Monopoly and built it up from there.” She and her 37 employees work by the philosophy that they sell service and throw in the plastic for free, and that’s paid off. A&C posted $16.5 million in revenue last year, up 27 percent over 2004.

Smart Business spoke with Faulk about growing a company while growing as a leader.

What most inhibits a company from growing?
If you try to grow too fast, you can actually grow yourself out of business. You see all this business you can get, but you don’t have the capital to (act) on it, so you overextend yourself with your vendors. You don’t watch your cash flow. You’re not watching your spending. It’s a domino effect.

You’ve got to take baby steps — one step at a time to get you to the next level. Don’t try to be the front runner and not have the cash flow, the inventory and your expenses to back it up.

How do you harness that energy?
You don’t want to do a little bit of everything and a whole lot of nothing. Stay focused on what got you where you are.

You’ve got to stay within your means but take risks to increase your cash flow and your business. You always have somewhere to go. You know it’s out there, and you know how to do it.

How do you lead growth?
If your employees know the market and know their job, they’re going to take you to that next level. If you don’t know what your competitors are doing, you’re kind of just chasing your tail. You’re in your own little world. You think you know what you’re doing, but you don’t.

You have to be aware of what’s going on around you and how the market’s going. You stay ahead of the market. You try to act.

What qualities do you look for in employees?
I hire for attitude and I train for skill, because you can teach anybody with a great attitude how to do something. Attitude is 85 percent of your job, but if you have 85 percent skill and a bad attitude, you’re dead in the water.

How do you gauge attitude?
You never know anybody until you’ve worked with them or lived with them. We give them different kinds of tests, and then we give them a job description — and we always put on there more than what we’re going to expect out of them.

We watch them. What are they willing to do? How do they react to a lot of questions? I want to hire people who are looking for an opportunity and don’t just want to be on the payroll.

How do you nurture and empower employees?
Get out there and get your hands dirty. Go out there and be visible to all your employees and speak to them. Be hands-on, and let them know that you know who they are, even if it’s just by name.

The most important thing is putting your employees in the position they’re best at. They know they have the opportunity to grow with the company to the next level, which is where I come in and let them know, this is where you are, this is where you can go.

How do you grow as a leader?
Always be a student in your own business. You’re selling service. Stay in tune to your customers’ needs and your employees’ needs. Anyone can be replaced. Even the president and CEO of a company can be replaced.

My dad was a great inspiration to me. He always said, ‘All you have to do is get up early and stay late.’ It comes down to getting up early and staying late and loving what you’re doing and staying focused. It’s not a job. It’s a game - it’s a personal game.

HOW TO REACH: A&C Plastics Inc.,

Friday, 28 July 2006 20:00

Mapping success

 Each time Wayne Whitener wants to expand TGC Industries Inc., it comes with a $7 million price tag.

The company does subsurface mapping for oil and fuel companies and grows by adding crews of new equipment and about 45 people. With such a hefty price tag for each expansion, this president and CEO has to keep his finances in check and cultivate his 468 employees so they’re ready to step into new positions when clients require more crews.

His leadership skills are paying off. The company added three to four crews in the last year and a half and grew its revenue to $30.9 million last year, a 53.7 percent increase over 2004.

Smart Business spoke with Whitener about how he keeps his employees and finances in check to lead growth.

What most inhibits a company from growing?
When you look at the real problems out there, it’s market conditions and having qualified personnel.

When the market’s good, it’s much easier to be on a growth or a steady pattern. When demand is down, there’s not a lot we can do about it.

Your hope is to keep the very best that you have of the personnel. You have to call on your more experienced and better people to carry more of the load to keep costs down through difficult times.

How do you maintain morale during hard times?
We just buck up and work our way through it and still keep some of the rewards for the personnel that are doing the job, even though it is tough times. You still have to let the employees know that you appreciate what they are doing.

Even though you’re not in a very high money-making mode, what they’re doing is keeping the company going for the time in the future when we have the opportunity to make a good return on the revenue.

How do you financially prepare for growth?
You have to really balance your debt. Hopefully your business is at such a level that internally you’re generating cash and you’re not overextending yourself in the growth mode that shadows either one of these, whether it be the borrowing or using up all your cash to generate the growth.

There’s a fine line there balancing all three of those in order to keep the growth going and keep enough cash to make sure you don’t have any cash problems and do just enough debt if things turn, you can manage that debt.

How do you maintain that balance?
Every time an opportunity becomes available to us, we weigh all three of those. We have to review where we are cashwise, where we are debtwise and whether we want to take on additional debt or if we have enough cash being generated internally to at some point go out and say, ‘OK, six months from now, we anticipate this cash expenditure putting out this new operation and we feel we can do that without taking on additional debt.’

How do you make decisions regarding growth?
Take advantage of the opportunities when they become available. If the business is there, you need to make the decision quickly and take advantage of it.

You want to look at the positive side of it on what opportunities are there for the company? What opportunities are there for the personnel? And what opportunities are there for the investors?

On the other hand, you have to look at if there’s a downturn eight months from now, where will we be? Can we service this debt? What will we do with the personnel? What will we do with the equipment? You have to weigh the pluses and minuses.

How do you get employees to buy into your decisions?
That’s the simpler part. You have your plan laid out, and you present it to them. ‘This is what we’re doing. This is what’s happening. This is when we’re going to do it.’ People have enough faith that they’ve seen it in the past that this is what’s going to happen, so everybody just moves forward.

If you went in there and started asking employees, ‘Well what do you think? What should we do?’ not a lot would get done. As a CEO, you have to formulate the plan for the company, take responsibility for that plan, and go in and get the employees to execute that plan for you.

How does that leadership style help the company grow?
Being able to lead the company in the right direction is critical. A lot of times, even in our market right now where demand is very high, people get complacent and say, ‘I’ve got all that I can handle right now. We’re doing great.’

It takes the CEO to step up and say, ‘Well look, we need to do more. We need to step out here. We need to put another crew out. We’re going to do it by such and such a date, and this is how we’re going to do it.’

Get everybody in the frame of mind that this is what we’re doing and we’re moving forward and keep the company moving.

HOW TO REACH: TGC Industries Inc.,

Thursday, 29 June 2006 06:16

Growing from nothing

In 1984, the company Al Haire worked for as a sales rep went up for sale. A man with a modest background and young family, he leveraged everything he had and bought the company, which was then a small manufacturer of overhead heaters for the industrial and commercial markets.

He created a growth strategy with the help of his mentor, and that small company grew into Enerco Group Inc., a global manufacturer with 100 employees.

Balancing optimism with risk, and investing both his time and money during the past two decades, Haire personally guaranteed EGI’s growth.

He began with a risky plan to maintain the company’s distribution channels while opening a new one to reach the retail market. He guided the marketing and development efforts of a heater line to meet the needs of customers who worked out in the cold, such as dockworkers and outdoorsmen.

That portable heater line propelled the company into the retail market through a combination of product development and repackaging while also targeting both large and small retailers. Today EGI’s products are found in Wal-Mart, Home Depot, Tractor Supply and Lowe’s as well as at smaller, independent stores.

Haire drove product innovation and promoted outstanding customer service in order to make EGI successful in both the distribution and retail venues, but the company soon faced an obstacle.

Many customers were using the outdoor portable heaters inside, which left them at risk for carbon monoxide poisoning. To combat this, EGI developed the Buddy line of heaters, which featured an oxygen depletion shut-off to make them safe for indoor usage.

The company’s diversified customer base has kept the business growing, but it has also allowed Haire to keep operations based in Cleveland, despite pressure to move them overseas.

To continue growing in the future, Haire blends veteran employees with new blood to promote different perspectives and brainstorming new ideas. He also plans to continue addressing the needs and solving the problems of EGI’s customers.

These strategies are paying off, as EGI has grown by about 35 percent each of the past few years, and looks forward to many more successful years to come.

How to reach: Enerco Group Inc., (216) 916-3000 or

Sunday, 14 May 2006 20:00

Driving growth

Chip Brewer needed to cut 60 percent of costs his first year at Adams Golf, but two areas he refused to touch were people and resources.

He knew those were the things he needed to get the company back on track, so he chose to invest even more in them and found other areas in which to reduce costs.

“Getting the right people and making sure they have the right resources and environment is the primary way you orient for that growth,” Brewer says.

His strategy paid off, and the company ended 2005 with $56.4 million in revenue, a 49 percent increase over 2002. Smart Business spoke with Brewer about how he invested in his 125 employees to grow Adams Golf, a designer and distributor of premium golf clubs.

How do you prepare for growth?
It’s having the right people in the right places and allocating resources to those areas, because resources are never unlimited. Quality people are never as plentiful as you like, so you cherish every quality employee you can get.

Then you make decisions about how you’re going to allocate resources and what areas you’re going to focus on because you can’t focus on everything. If you do, you’ll be average at a lot of things, and if you chase every opportunity that runs at you, you might not catch any of them.

What do you look for in potential employees?
It’s hard to find good people because that’s such a key resource. It’s a challenge of any growing business, and it’s one of those classy problems that you like to have. We look for passion, integrity, drive, intelligence, a fit with the culture here.

We’re a relatively small business. Friends and friendships have developed, and you don’t want to interfere with that based on the quality of hires. We’ve had some people come through that were clearly bright people and excellent backgrounds, but they didn’t appear to fit with the culture. I wouldn’t support us hiring those individuals because the negative effects would outweigh what they could provide.

We’re better off to keep looking until we get that perfect fit. Getting the right people into the organization is probably the most important thing.

The only thing I know in my heart of hearts that I’ve done a good job at is attracting good people early on and retaining them during the bad years when the business was really struggling. We were able to keep and motivate some good people, so when we got our financial act back together, got our product line back together, those individuals were still here.

They were battling hard by then, and that allowed us to move forward.

How do you retain employees?
It’s about trust — treating them well, open environments. In a time of crisis, everybody wants leadership and direction, but you also need to identify and trust the individuals. It was mutual. They knew how highly I felt for them and how much respect I had for them, and trust, even though none of our results were that good at the time.

We would talk openly about the difficulties that we faced and what the other opportunities were for them, both personally and professionally, and we agreed to stay and stick it out together.

How do you differentiate your products from those of the competition?
We play two basic product games in our business. We play leapfrog, which is where there is a clear technological trend in the industry, such as the size of driver heads, and we try to use our size as an advantage to be faster to the market in the next evolution — just try to stay one step ahead of the competition.

The other area, which is more exciting and rewarding when you get it right, is delivering true innovation. Being the first to enter that category gives you a significant advantage.

We’ve identified a niche, innovated to deliver better product into that, moved aggressively into it, and we’ve committed fully.

How do you drive innovation?
We’re relatively aggressive. We will take some risks. We will push. We don’t want to take a lot of time and come out with a product that matches others. That isn’t the key to success. Each product we do has to have a clear reason why it exists in the world because the world doesn’t need another me-too product.

You have to make sure you put the resources in the right area. Product is a key area that we try to differentiate our business, and if you look at how we’ve spent our money, R&D is the primary area where we’re constantly funding.

How does investing in people and resources help you grow the business?
Happy consumers and market share, which then turn into top line and bottom line growth for the business. You can feel inside the organization when we’re getting stronger organizationally. You can tell when you’re on the right direction — the quality of people, what they’re working on, their attitudes.

Sooner or later, that turns into product and tour count growth. That turns into e-mails coming in from people who are using your product, and from there to market share, and from there to financial metrics.

How to reach: Adams Golf,

Tuesday, 25 April 2006 05:36

Thomas W. Stephenson Jr.

Imagine running a company where your success depends almost entirely on what another industry manufactures and how consumers react to those products. Welcome to Thomas W. Stephenson Jr.’s world as president and CEO of movie theater chain Rave Motion Pictures. He has no control over the movies flowing out of Hollywood or how viewers will react to them, which presents a challenge to growing his company. But because he cannot choose his inventory or control the top line, he focuses on details to ensure customers can view movies in the best possible atmosphere and are treated to the highest level of service. This approach is paying off — the company is adding about six theaters each year, and annual revenue hit $115 million last year. Smart Business spoke with Stephenson about how he plans and manages Rave’s growth.

Know where you want to go.
To start a company and grow it, you have to have a vision and you have to know where you’re trying to take the company. But the world has a way of not working out exactly the way you plan it, so you have to have that vision, that passion, that goal for what you’re trying to do, but I think you also have to let the real world intrude on that.

You have to learn from what you’re doing, from your successes and your mistakes. You have to have a vision, but you have to temper that vision with real data from the world.

Try to do the best you can by your customers, by your employees, by your investors, by your vendors — the people that have a real vested interest in your franchise, the people that you have great relationships with. You do the best you can with each of those groups. If you do that well and conduct yourself as honestly and truthfully as you can, then you’re going to have a pretty good company.

Grow with a purpose.
You don’t want to ever grow for the sake of growth. You want to grow because you’re filling a market niche that exists. The best way to grow is because you’re answering or fulfilling a market void out there.

The first thing to look at is, are you really growing because there is something you’re doing better for the consumer than some other way he could get that good or service? If you are, that’s pretty healthy growth. If not, you have to scratch your head and ask why you’re trying to grow.

The second thing I think is equally important is you have to be able to manage that growth. There are all sorts of companies that had great ideas, that expanded too fast and couldn’t really manage the growth. When we grow, we look at two things. We look at new units, but we also look to get better and better performance out of our existing units so that we’re growing internally. You have to be able to manage that growth well and not just put up new units.

Managing growth is difficult because, by definition, you’re taking on more and more responsibility. Your people have to do more and more. You’re still looking outside to bring people into your organizations, so managing that process is not easy.

Success brings success. We’ve had all sorts of people come to us and want to join our company because they like what we’re doing and see what we’re doing in the markets. They say, ‘You do whatever it is better than my company, and I’d really love to be a part of the team.’

The better you did, the more people want to be a part of that process. I love getting e-mails from people saying, ‘I lived in Pensacola and I moved to Destin or Cincinnati or Fort Wayne, and I loved your theaters and I’m so happy to find you have a theater in the market I’m going to.’

Create a strong corporate culture.
We started from scratch. We started very small. We tried to grow internally as much as we can, but we’ve also tried to look around our industry at businesses that are similar in some way ways and try to attract the best people we can and bring them into the company.

We have to do a good job of training our people, helping them all step up to the next level but also looking around from time to time for people from the outside.

We try to recruit smart, aggressive, active people that really want to be a part of a great company. We provide them with terrific managers, with different seminars and management meetings during the course of the year, and then we have a group of senior managers that travel to all our theatres on a very regular basis.

We try to do as well as we can every day. We want to make this a great place to work. We want to make this a great place to go to the movies. We want to create the best environment that we can, so we try and create a really wonderful place to work.

Nobody has to come to work for us, or anybody else, every day, but that’s the difference between a really good company and a not so good company — they keep, they get and they retain really good people.

What we try to do is attract the best people we can and create the best working environment we can so the best people want to stay here and don’t want to go somewhere else. This is a great place to work if you want to be the best. It’s a lousy to place to work if you don’t.

It starts with the way you treat them. We try to treat everyone here with respect, with understanding, with compassion — you want a place where you feel good about coming to work every day. Beyond that, bonus programs, benefits programs, equity in the company, good working environment.

This is a great place to work if you want to be the best. It’s a lousy to place to work if you don’t.

How to reach: Rave Motion Pictures Inc.,

Wednesday, 22 March 2006 11:59

Terdema L. Ussery II

Where Terdema L. Ussery II goes, success follows.

That caught the attention of the Dallas Mavericks, which brought him into its game nine years ago with one purpose — to lead change. And that he has done.

In his first year, he led the funding campaign and secured naming rights for American Airlines Center. Since his arrival, the franchise has grown to $117 million in annual revenue, according to Hoover’s Online, and increased its corporate sponsorships, ticket sales, television revenue and community activity.

On top of that, he and Mavericks owner Mark Cuban started HDNet, the nation’s first high-definition television network, of which he also serves as CEO. Ussery spoke with Smart Business about how to lead change and succeed in business.

On leading change: The most important thing to recognize when there is change is that it cannot be dictatorial because automatically, there’s going to be a lot of anxiety among staff. Change, by definition, brings anxiety because everyone wants to know, when the paradigm shifts, what does it mean for me?

Communication is critically important in letting people know, honestly, what the purpose of the change is, what the goals and objectives are, and how that person may or may not fit in, and then giving them the opportunity to show that they want to fit into the new paradigm. You really have to spend time talking to people, communicating with people, reassuring people, and for those that have a different agenda, getting them out before they create too much damage internally.

We’ve seen some of that, where people are not happy with change so they want to, in some ways, sabotage change, and that happens in different ways. It’s just being vigilant about knowing who your staff is and knowing people who are really trying to get after it and knowing those who aren’t happy about the change and are going to be disruptive.

On hiring and managing employees: Hire the best people that you can and give them as much room to run and do what they need to do. Multiple tasks require folks with multiple talents.

Instead of looking for people with an expertise in one area who can only operate in that area, you look for people who are extremely bright and agile, who may have his own expertise but have the ability to learn quickly and do other things you need. It’s more hiring people who are bright, that are passionate, who have the ability to go across zones if you need them to.

I don’t believe too much in micromanaging. It’s important to empower smart people so that they have a sense of accomplishment, of fulfillment, so we try very hard to let the people that are in this company run the company. We’re more of a forgiveness organization than a permission organization.

We’re not a company that sits around, has a lot of meetings, spends a lot of time betting whether or not this is or isn’t a good idea. If someone comes to the table with a good idea that we think is going to be impactful, we move pretty quickly. And if it fails, we can always ask for forgiveness, but we don’t want to stifle people’s creativity.

Bottom-line focus is fine, but at the end of the day, you want people who are fulfilled by their jobs because those people are going to do the best. When people aren’t being paid, when the 40 hours is up, are people still buzzing about what they’re doing? Are they still happy to be at work? Are they still trying to get their jobs finished, not because they’re going to be graded down or they’re going to get overtime, but because they’re enjoying what they’re doing and they’re excited?

It’s more than a bottom-line focus. It’s really enjoying having a sense of purpose and feeling as though you’re making a contribution to something larger than yourself that’s meaningful to people.

On balancing life and work: You can get so caught up in what it is you’re doing professionally that you forget about the other side. Something has usually happened that has jarred me and made me realize the importance of trying to have balance.

I try to stay cognizant of the fact that you’ve got to stay healthy, and not just physically but emotionally and psychologically, to be the best you can at work. I think I’m pretty good about telling guys to get away, to get out of the office, go take a long weekend, go do whatever to refresh yourself. Trying to remind them keeps me aware, as well.

When I was at Princeton, my first year there, myself and a couple guys pulled an all-nighter to prepare for an exam — that was a badge of honor, right? But I didn’t do well on the exam. One of my roommates, who had a different methodology of studying, which was just to study consistently, was doing a lot better than me, and it dawned on me that this whole idea of cramming and going til you can go no more is not a good thing.

In the workplace, it’s the same thing — you can work until you burn yourself out, but then you’re doing nobody any good.

On succeeding: The second you believe that there is some unalienable right to exist, it’s the second that the clock is ticking to your demise and ultimate downfall. Every day, one of the things we try to instill in people is a sense of urgency.

The second we start believing because we’re winning or because we’re good — and it doesn’t matter the industry — the second you start reading your own press and buying into it is the beginning of the end. You lose your competitive edge. You lose your ability to be flexible. You lose your ability to listen to your customers and what they’re saying.

It’s waking up every morning and being in an attack mode as opposed to a passive mode — aggressively going after the things that you need to get done that day to be successful, and when you get into that kind of pattern, it makes it easier to multitask. It’s trying to be better today than you were yesterday.

If you can do that, if you can slice your life that thinly, then it helps keep you going. I don’t look out six, seven months and say, ‘I have to get this done.’ I say, ‘How good was I today? What can I do to get better tomorrow?’

No one stands at the base of Everest, starts climbing it and stares at the top all the way up. They’d never make it. You come up with an effective plan and focus on execution.

Keep your head down and focus on taking great steps because any one misstep can cost you your life. Focus on executing every day the best you can, and eventually, the air gets thinner and it gets cooler, and one day you’re going to take that next step and it’s not there, and you’ve made it to the top.

Advice for new CEOs: Start off the job by doing nothing but listening. Spend the first few weeks just listening — the secretaries, the senior management, the middle management, your customers, all the constituents that are going to impact your life.

Just listen to what their concerns are, what their issues are, what their goals and objectives are. What are the issues? Are you having fun? Are we delivering the way you thought we would?

Then distill that information, and from there, start talking about planning for the future. You’d be surprise at some of the stuff you hear.

How to reach: Dallas Mavericks,

Monday, 30 January 2006 11:18

Stripping the waste

Thomas Steel Strip realized it needed to change if it wanted to compete globally.

It needed to improve its effectiveness, profitability and efficiency. To do so, the company began a new continuous improvement program called Business Excellence, which focuses on reducing waste in both the company’s business and manufacturing processes.

During a weeklong Business Excellence “boot camp,” the team focused on lean manufacturing, problem-solving and statistical data analysis techniques. The program provided one common, structured method for improvement and generated a clear bias for action and results. It also gave all leaders clear, simultaneous communication of expectations to eliminate miscommunications.

The teams applied the knowledge they learned in a series of kaizen events on both the shop floor and in the front office, including Quick Changeover SMED, Value Stream Mapping, Lean Office and 5-S Workplace Organization. Following the activities, the teams were able to better identify root causes of waste and inefficiency and eliminate those sources.

Thomas Steel Strip did not want the Business Excellence Program to stop there, though. It has become an ongoing endeavor for the company, which has three full-time coaches to oversee and monitor the day-to-day progress. These coaches also work to continue driving the initiative forward, and the company has seen a great impact since implementing the program. It has cut the number of line stops it experiences by 50 percent and capacity on key bottleneck units in its nickel plating line has increased by 13 percent,both without investing in any capital costs.

One of the most significant impacts has been in Thomas Steel Strip’s work with customers. Before the Business Excellence program, it took the company approximately 30 days to respond to customer inquiries. After implementing the program, the company now responds in about three days.

When all of these improvements meshed, it created a $500,000 savings in the first year of the program, and nearly $900,000 in savings to date. Thomas Steel Strip looks toward the future to continue developing the Business Excellence program and improving its processes.

How to reach: Thomas Steel Strip, (330) 841-6222

Tuesday, 27 December 2005 11:53

Worldwide safety

With lifting trade barriers and the continued growth of U.S. exports, companies are realizing opportunities to expand their reach into the global market. But with these opportunities comes a new world of risks. Companies need to maximize growth while minimizing their exposure to financial loss, which can be exacerbated by legal, linguistic, cultural, economic and political differences.

Exposure to these international risks does not require a company to have an international location. Employees traveling abroad or simply sending faxes or other correspondence overseas can create an international exposure for a company.

Regardless of the degree of the exposure, a company may be uninsured or underinsured with a domestic insurance policy. Even the worldwide endorsement used by many U.S. insurers can leave gaps in your coverage.

Companies should thoroughly review their current insurance programs and make sure prospective carriers fully understand the nuances of the global market and provide a broad range of products and services to address the unique exposures of international business.

Four key areas where due diligence should be performed before going global include the following.

Underwriting expertise
Does the insurance carrier understand the local market? This includes legal jurisdictions, economic climate and the language.

Various countries have unique nuances and insurance requirements that range from environmental impairment in Germany to natural catastrophe pools throughout Europe. The insurance carrier should also be able to keep you abreast of any major changes in the legal and economic climate.

Specialized programs
The foreign landscape opens a box of exposures rarely considered.

Currency devaluation, political risk and tax liability are all issues. An insurance carrier should be able to offer a wide array of products to meet your needs as overseas expansion occurs. Ideally, a company should be able to grow with their insurance carrier from the early beginnings in international operations to full manufacturing and service operations based overseas.

A routine overseas business trip may not be as simple as it first appears. As an employer, you must consider workers’ compensation issues, automobile liability and property theft exposures. Purchasing these lines of coverage individually may be costly, but many insurance carriers can package these programs to ensure adequacy in coverage along several lines.

This simple package may later require local admitted insurance policies (those recognized and required by local countries) as your company grows. This requires an insurance carrier that understands the local insurance market and legal requirements imposed on business owners.

Global network
While it is important that your insurance partner provide a wide array of international insurance products, it is equally important that they support their products with an experienced global network of service providers.

Your carrier should provide local claims handling ability and medical assistance programs to help in the event of an injury or sickness overseas. Examples of incidents that might require global services include:

  • A business traveler has a car accident and the doctor does not speak English

  • A business traveler is robbed and needs help re-establishing identification

  • A business traveler gets arrested — and jailed — for a seemingly minor infraction

Financial strength
In 2003, nearly 25 insurers went insolvent. In addition, many carriers left the international insurance arena, or decided to reduce their global services, which adversely affected the value of their product.

Carriers should have the financial stability and commitment to fulfill their obligations and be a long-term competitor in the international market. It is crucial that the carrier have the financial strength to make good on its promise to pay and be there in the hour of need. Common insurance carrier financial strength rating benchmarks are provided by A.M. Best, Standard & Poor’s and Moody’s.

John Sence has more than 10 years of experience in the insurance industry. Since joining Schiff, Kreidler-Shell, the Midwest’s leading independent insurance agency, he has developed key areas of expertise in international insurance and construction. For a review of your current insurance program, contact Sence at (513) 977-3198 or