Whoever said that business and pleasure don’t mix clearly never met Greg Koch. When Koch and fellow beer aficionado Steve Wagner founded Stone Brewing Co. in San Marcos in 1996, the duo began building a team that, while diverse, shared one defining characteristic.
“Essentially, everyone here is different in every imaginable way, with one single point of convergence, which is a love for what we do,” Koch says. “That passion has been absolutely critical to what we’re all about and to our success.”
Now celebrating its 10th anniversary, Stone has experienced explosive growth in recent years, with revenue of more than $12 million in 2005, a 100 percent increase over 2002 revenue.
Smart Business spoke with Koch, chairman and CEO of Stone Brewing, about how his employees’ enthusiasm for brewing drives his company’s growth.
Q: What is the most important thing the CEO of a growing business must do?
You’ve got to be true to why you started and what you want to accomplish, and if you’ve changed from that, to really understand why. Was it because the original concepts and values were not valid, or because they got lost along the way?
It’s always good to bring a certain level of ignorance into business, the old ‘not knowing you weren’t supposed to do it that way.’ That, of course, is why people do new things and do things [about which] the veterans of a particular industry might have said, ‘Oh no, you’ll never be successful doing that.’
Our culture has stayed very similar. We’ve gotten larger, but again, we’re a passion-driven company, so we’ve been very careful to maintain that ethos.
It has been a challenge to keep focused on that passion from Day One. You get hit from a lot of sides, maybe even more so in the start-up phase. In the early days, we were certainly passionate, but we weren’t so certain we could afford to be passionate.
But we were bold enough to stick to our guns and maintain our philosophy, even though many naysayers were around.
Q: How can other business leaders inspire passion in their own companies?
They should make sure they’re doing something that’s worth being passionate about. In the simplicity of that statement is the beauty of it.
Literally, if you’re in a business that is concentrating on making something that is in the realm of the lowest common denominator the cheap, the inexpensive, the for-the-masses that’s something that’s very difficult to inspire people with. Of course, a lot of companies talk about wanting to be inspirational or to inspire their staffs, but then they intentionally set out to do things that, by their very nature, aren’t very inspirational.
What can you do if you make widgets, which are not necessarily good at inspiring passion? What can you be passionate about? Well, maybe you can be passionate about the ethics of your company, etc.
Q: How important is it to take risks?
It depends on perspective. For example, if we put out a beer that is really different from anything else nobody is asking for a beer of that style, but we think it’s absolutely terrific-tasting and we really enjoy it ourselves is that a risk or is that not a risk?
We already know what it tastes like, and we have great taste and we release it. I think that means we know what we’re doing.
You want that risk-to-reward ratio to be in decent balance. The idea isn’t just to throw stuff against the wall and see what will stick; you want to make educated risks.
Sometimes you have to go with your gut, certainly, especially if you’re in an area where you feel you’re privy to things that maybe not everybody else might be keyed in to yet.
Q: How does a leader’s responsibility change as his or her company grows?
You need to learn new sets of skills to deal with a larger company. And you have to be willing to be flexible and to change yourself as you’re asking others around you to start approaching something from a different perspective from the way you used to do it.
In many cases, you have to work hard to make sure you don’t have to make those kinds of changes. Sometimes you’ve got to bend over backward in one direction or the other so you can maintain that original culture.
My job is to make sure we have the framework in place within which people can be a part and contribute and get excited about what they do here, and to make sure that I steward the path of Stone Brewing so that we can maintain the focus of what we’re all about, which is great beer.
HOW TO REACH: Stone Brewing Co., www.stonebrew.com
When Sean Callahan has a good idea, the light that clicks on over his head isn’t your standard 40-watt soft glow.
Callahan is president of iLight Tech- nologies, a Chicago-based manufacturer that develops and markets lighting prod- ucts that utilize light-emitting diodes, or LEDs, a more durable and efficient alternative to traditional neon lights.
Barely six years old, iLight has grown almost 1,000 percent since 2002, with revenue of $11 million. Smart Business spoke with Callahan about building the right team and the importance of letting customers make decisions for you.
Q: What is the key to leading a fast-growth company?
It’s all about the people. You have to attract driven, committed peo- ple and give them responsibility and authority and lead by exam- ple. I am almost always the first one into the office and almost always the last one to leave, so I’m not asking anyone to do any- thing that I’m not doing myself.
With a fast-growing company it’s even more so the people. With a slow-growing company, you can see if there’s a problem, you’ve got time and you can address it. But with a fast-growing company, things are much faster.
There’s a lot of opportunity that if we don’t have the right people, we could have grown rapidly. But if we could have grown more rapidly and still provided a quality solution to the customers, quite frankly, that’s a disappointment to me.
So in a rapidly growing company, you need good people around you to seize the opportunities and manage them effectively.
Q: How can a leader maintain growth?
It gets back to the people element again and how you attract and maintain quality people. I feel very comfortable with the people we have, but since we’re a growing company, we’re going to keep needing new people.
We have a human capital consultant that works with us in assessing the folks we’re considering for employment. It’s not so much of a, ‘Do we hire, or do we not hire?’ It’s assessing a person’s personal attributes and how they fit in to the iLight team and how we can help grow them and develop them with time.
We’re in a wonderful industry and we’ve got a great position within that industry, but it’s the people that are going to make it happen or not happen. The stronger each individual is, the easier it is for us to get another strong individual on board, and the more time I have to do other things that are productive for the company.
All this means customers that are very well-served.
Q: How would you describe your own role in the company?
My job is very simple. It’s to build the right team. That means getting the right people on board and having them in the right position, making sure they have the tools and support necessary to be effective in their roles.
I work for everyone, which means I’ve got to make sure they have the tools and support necessary to be effective, and to develop them so they become more valu- able and more effective. If someone is not in the right position, is there another posi- tion where they fit better, or does a change need to be made? Fortunately, we’ve been very successful in hav- ing key positive contributors.
However, sometimes you’ve got to change one or two people. There’s the clich that a few bad apples can ruin the bunch. Let’s say there was some meaningful change that we believed needed to be done. Presumably, we believed it needed to be done because of what the customer wants or because of competitive position.
You need all your people to be on board for that, and if somebody is not going to come on board, ultimately, you’re going to have to make a change. It’s going to be a heavy anchor slowing the whole ship down.
Q: How do you lead change?
There’s a quote from Charles Darwin to the effect that when he was studying animals and how they existed, it wasn’t the smartest that survived longest or those who worked the hardest, it was those that adapted best to change.
That’s a blanket statement, but when you add on the fact that we’re a rapidly growing company in a rapidly growing industry, we have no choice but to be very close to the customers and very close to change.
It all goes back to the customers. I might have some ideas on how I think things should be done, but if the customers are not willing to pay for it, if there’s not a meaningful market for it, then I don’t have any interest in pursuing it.
When people see that this is very much a customer-focused, opportunity-focused company, then we can meet with the customers, and in a sense it’s the vision of the customers that drives us.
HOW TO REACH: iLight Technologies, www.ilight-tech.com
Maureen Beal likes to think of the staff of National Van Lines Inc. as one big, happy family. After all, it was her grandfather who founded the company in the early 1900s and led it through the Great Depression, and her father who ran National until Beal took over 13 years ago. Beal has not forgotten that history, and although her efforts have helped grow the Chicago-based household moving company to annual revenue of $85 million, she dedicates just as much effort to growing and maintaining a family atmosphere at the company. National now employs more than 100 people, and Beal makes sure every one of them feels right at home.
Smart Business about knowing your strengths, recognizing your weaknesses and how to lead by example.
Keep your eyes on the prize.
Follow the fundamentals of good business. Don’t become complacent, and keep your focus. Don’t drift.
Sometimes when you start getting successful, you don’t keep your focus like you should, and you have to bring yourself back. When you start making money and making a profit, you start spending money on other little things that wouldn’t have before. You have stick to those fundamentals.
When I first took over the company after my father passed away in 1993, I needed to find a way to keep tabs on what was going on, to keep my thumb on the pulse of the company. The company was struggling, and I learned very quickly that I had to concentrate on cash, first and foremost, so we could get to the point where we could reinvest into the company and bring it forward.
Our biggest growing pain was to get the cash comfortable, because that old saying “Cash is king” is so true.
I have an open-door policy, and my employees are not afraid to come to me and talk to me about their concerns or their problems because I don’t overreact. I don’t kill the messenger.
When I have told someone that I will keep something confidential, I do. That’s very important. The first time you betray a confidence, you’re done for.
It has benefited the company to where people aren’t afraid for their jobs or covering their fannies, and it’s not just my employees, but it’s my agents and my drivers, as well. When a driver is walking through the office, they think nothing of just popping in and saying hello and sitting down and talking to me for a few minutes. With that comfort level it’s a friendly atmosphere, and they are able to sit down and talk to me as a friend as well as a business associate. The employees feel the same way.
I truly care for their well-being, and if I can do something to make their lives easier, plus the company’s life easier, then I want them to come and tell me about it.
Know your strengths, your weaknesses and your staff.
I have surrounded myself with good people, so I let them do their jobs. I know what my weaknesses are and I know what my strengths are, so I hire people to complement my weaknesses.
I was very lucky that my father was my role model. He worked five-and-a half-days a week until he was 90 years old. I’ve learned that work ethic, and I know my employees work harder when they see the president or the CEO working as hard as or harder than they do.
When you manage people, you also get to know what their strengths and weaknesses are, so when you know they have a certain strength, you let them run with it. But, for example, if you know that a very talented, visionary person has a hard time keeping control of money, watch them a little closer on the expense side.
If there’s anything I’ve learned, it’s that every one of my direct reports is so different that I have to manage them differently. If somebody would have told me that years ago, I would have said you can’t do that.
But to me, that’s the only way for the company to be successful. You can’t treat everyone the same, because they’re different in their talents.
Make employees feel like owners.
One thing we’re doing that has been very successful is giving all of our employees financial training, which has really given them a sense of ownership in the organization.
They can see how well the company is doing. That’s what their bonuses are based on, and we give bonuses to everyone in the company, from the switchboard operator on up. When you give your employees a bonus program that makes sense, that’s logical, they then take the ownership of the company, and that’s what we’re striving for.
When you feel like you’ve got ownership of the company, you want your company to provide the best service possible. You don’t want to be embarrassed by poor service.
Giving employees the right information at the right time really helps them make the right decisions. Our employees feel the company cares enough about them to give them that something extra if they do a better job.
Practice what you preach.
The culture of any company reflects the personality of the CEO. Luckily, I believe in motivation, education, rewards and recognition, and I understand the work/life balance of my employees and what they have to deal with.
If they are reflecting on my personality, where I’m motivating and educating them, they begin to realize that we have to supply good service to be a good company. They continue with my vision, which is not to be so large but to provide the best service we can. They start taking an ownership attitude in their own respect.
It’s like when you’re bringing up a family. You can’t say one thing and then do something else. So you have to feel for your company as much as you want your employees to feel for it.
We always hire for attitude and potential. We don’t hire for the experience they have or don’t have. If someone with a good attitude comes through the door, that’s who we want. So, if anything, new employees add to the positive nature of the culture. You can have someone come through your door that has the best experience in your industry possible, but if they don’t have a good attitude, you might as well just not even hire them.
How to reach: National Van Lines Inc., (800) 323-1962 or www.nationalvanlines.com
Mark S. Wrighton is traversing a theoretical high wire.
On one side, the chancellor of Washington University in St. Louis stares down the hands-on styling of micromanagement.
On the other side, he sees a macro approach facilitated by an autonomous group of direct reports. Finding the balance between those two, he says, has been one of the keys to his successful tenure at the university.
Wrighton says that to strike that balance and establish your footing, you need to recognize your limitations: Participate in areas where you can make a positive impact, but let key managers make the day-to-day decisions in areas where your expertise is limited. By taking his own advice, the chancellor has found his balance while juggling the needs of approximately 12,000 full-time faculty and staff members while managing an operating budget of $1.7 billion.
Smart Business spoke with Wrighton about how to develop a strong sense of community and how being consistent inspires confidence in employees.
Practice consistency in leadership. Tell everybody that you interact with the same thing. Tell each person that here are the priorities, and do not change them depending on who you speak to.
That relates to integrity. Be honest in all that you do. Not only say, ‘We are committed to high integrity,’ but also live that way conscientiousness, doing what you say you’ll do and being attentive to detail.
I would like (my direct reports) to have confidence in the person who does have the responsibilities that a president has. I’d like them to feel that they’re working with a person they can trust, a person who would be willing to listen to them and a person who will be honest and conduct not only the affairs of the institution but also their personal affairs, with integrity.
Create opportunities for participation. When we talk about setting up priorities, another characteristic I strive for is to be a good listener. What are my key leaders telling me that’s necessary to bring about great success for them and, therefore, for our university?
Collaboration is key in any organization. No unit is completely independent; otherwise they wouldn’t be part of the organization. It’s important to provide opportunities for people to share their ideas openly and to have people offer their own views, the ideas of others and what makes most sense in terms of pursuing a plan.
People that would have an interest in a potential area of development should all have an opportunity to help shape a plan.
We are in the midst of a major planning process. We are drawing on all of the stakeholders, so to speak, and encouraging everybody to take part.
Everybody will have been able to play a role in shaping that set of priorities.
It’s very consultative. It involved lots of people. It takes time. It’s a process that enables people to not only put forward suggestions but to rationalize them and to critique the suggestions of others.
When one thinks about setting priorities, these key groups need to be included. Customers need to be consulted. People who are the front lines of executing the plan must be consulted.
Celebrate achievement. We have a strong sense of community. (To develop that,) one of the key things is to lift up what each part of the organization is doing and to make others the focus of attention and to encourage them by being willing to stand alongside them and to be with them at events and activities of importance to them.
Celebrate individual achievement and encourage individual initiatives and entrepreneurship within the organization, and celebrate those successes.
The principle outcome is one that it provides the best environment to realize the great potential of our students and faculty. Therefore, that makes us a stronger, higher-impact university.
Maintain momentum and stay focused. One of our biggest challenges is maintaining momentum. We cannot rest on our laurels. We cannot become complacent.
When communicating about both the new opportunities and the challenges that we face, you need continuity. No amount of communication can really ever be enough.
They have to be effective communications, but we need to start early and go late and work hard every day to keep people informed and enthusiastic about what we’re doing. It’s easy to backslide.
Another challenge is to remain focused on your core responsibilities. With the passage of time, more people are anxious to interact and take part in the life of the institution, and it’s easy to be distracted.
There are a lot of things that can consume time and energy and resources, and I need to weigh how they stack up against this priority of remaining focused on the mission.
Approach each year with enthusiasm. I once heard a bit of interesting advice that I often remind myself of: Every organization that has some maturity has an annual cycle of activities and events. For a public company, every quarter you come out with your earnings. You have your annual meetings. There are seasons.
For universities, that is certainly true. We welcome students. They graduate in the spring.
It’s important to try to treat every year like it’s your first year. Exhibit the same enthusiasm the same sense of renewal and treat each year as if it’s going to be a new and exciting undertaking.
Associate Editor Patrick Mayock also contributed to this story.
HOW TO REACH: Washington University in St. Louis, (314) 935-5000 or www.wustl.edu
In the sports and entertainment industry, the challenge of competing for the attention of the consumer is daunting enough. But when Peter McLoughlin was named CEO of St. Louis Blues Enterprises during the summer of 2006, he faced yet another challenge. Responsible for the management of the National Hockey League franchise’s nonhockey operations, McLoughlin had the task of continuing to reignite interest in a product that was just one full season removed from a yearlong absence from the market, the result of a labor dispute that wiped out the 2004-2005 season. After implementing rules changes intended to increase scoring and entertainment value, the league set records for average and total attendance during the 2005-2006 season, and McLoughlin has continued to work to win back fans. With his staff aligned behind one distinct responsibility to provide a unique and exciting entertainment experience McLoughlin employs a leadership style that emphasizes constant communication and accountability. Smart Business spoke with McLoughlin about how to turn passion into profits and how to get the most out of your employees.
Foster alignment through communication. One of the keys to leadership, for me, is to communicate with your people about the goals of the organization and the direction you’re all headed in.
Communication has always been one of the foundations of how I manage and lead an organization. As people hear you articulate the goals and the vision of the direction that you’re going, they can share in that and participate in the development of that mission. Everyone gets on the same page.
When communication fails, mistakes get made and inconsistent messages get out. When that happens, your customer gets confused. When the customers are confused or don’t like what they are hearing, they will maybe make the decision to spend their money elsewhere. That’s why alignment is key.
We’re creating a culture of the St. Louis Blues here. It’s a great brand with a 40-year history.
In order for us to be successful and to compete, we all have to be aligned.
Take every opportunity to interact with your team. We have regular top-level management meetings so that we can make sure all of our department heads are aligned and are communicating and sharing strategies and plans together, and then it’s up to those department heads to communicate those things to their people. We try to use e-mails to all the employees to let them know of events and activities and developments that are coming up so that they’re not surprised and they hear it from us.
As we’re at the press and we’re talking about strategies and objectives, that’s also a great way for people to read the morning paper or hear on radio shows what’s going on with the team, and we want to make sure everybody is informed of what we’re going to be saying and what the objectives are.
It’s making people throughout the organization feel a part of it. That can be anything from a broad staff meeting, which we do often in terms of the events that are coming into our building and everybody’s role in terms of activating around that event. And it comes down to simple things like having an all-employee luncheon or Christmas party and using that opportunity to take the microphone and make some points and give people an opportunity for question-and-answer so they feel engaged and feel a part of it.
Commit to success and hold people accountable. A big challenge is getting the most out of your people. What I mean by that is a combination of setting goals, encouraging people to meet those goals and holding those people accountable.
When you’re working in a company, in a business environment, you become close with the people you’re working with, and you want everyone to be successful, yet you also have to hold people accountable, including the leader. The challenge is getting everyone committed to being successful and working hard to achieve that.
Encourage dedication to common goals. You’re always looking for a certain passion within people to go along with their experience and with their particular skill set.
If someone brings passion and dedication and shares the common goal of wanting to win back the fans of the Blues, pack the house, provide great customer service and be part of a team that is going to win the championship in the National Hockey League, that’s what I look for, someone who is really passionate about those things.
We’re in a fun business, and that helps. Professional sports and the great concerts and family shows that come through the Scottrade Center are a fun business to be a part of. There is an underlying enthusiasm there, and the key is to turn that enthusiasm and passion for what we do into profitability by selling tickets and selling sponsorships and selling food and beverages and merchandise and reaching out to customers so that they feel good about spending their money here.
People who are very committed and hardworking and are driven to succeed are the kinds of people that are going to go that extra step to make an organization successful. You have to have your own personal pride and personal drive and work ethic and the collective sense that everyone is working for the same goals.
When you have that combination, it really leads to great success.
HOW TO REACH: St. Louis Blues Enterprises, (314) 622-2500 or www.stlouisblues.com
Who better to welcome them aboard than Howard? After all, Howard joined Navigant when the company she worked for was bought in 1998. Clearly no stranger to change, Howard draws on her experience as both the acquirer and the acquired as she guides the specialized consulting firm through the challenges of executing a strategy driven equally by organic growth and growth through acquisitions.
“If there’s one thing that we can be certain of, growth creates disruption,” Howard says. “Disruption can discombobulate people, so having an awareness of the expectations of the firm, the expectations that you can have for your peers and the knowledge that things are similar and consistent helps manage that disruption.”
As an organization whose product is intellectual capital, Howard says Navigant’s growth typically means growing by people. And while its employee base has expanded to more than 2,500 worldwide, the firm’s financial growth has also been on the rise. During the past three fiscal years ending in 2006, Navigant recorded annual revenue of $482 million, $575 million and $681 million respectively.
And while Howard says communicating the standards and expectations of the organization to new and existing employees is the first step in successfully executing a strategy, ensuring that Navigant avoids the disruptions and pitfalls of change as it continues its growth requires much more.
“It’s important to probably overcommunicate when you’re trying to instill a new strategy or effectuate change management,” Howard says. “But the other equally important thing is that you need to build your strategy into your infrastructure, the processes you have in place, and the programs you use to measure people’s performance, to evaluate and promote their development and to compensate them.”
Creating flexible goals
Because marketplace conditions are constantly shifting, Howard says a successful strategy is one that can adapt and change over time. As such, she is careful to avoid describing the development of Navigant’s growth strategy as a “process,” a word she feels might give the connotation that at some point the strategy is complete. Though Howard says many businesses, including Navigant, spend time throughout the year working on strategic plans and setting goals, it is imperative that those plans and goals allow room for adjustment.
“I am a strong believer that developing your strategy is something that’s on a continuum and something you’re doing all the time,” Howard says. “Your strategy is evolving based on the information you’re taking in to the organization and what you’re learning as markets change and they react to your business. It’s a constant evolution, and there isn’t any one point in time where you can say, ‘This is our strategy.’”
In fact, Howard might suggest you take your organization’s long-term plan and toss it out the window. While she agrees short- term to midterm overarching goals are helpful in framing a company’s overall direction, Howard says the specific nuts and bolts of how those goals will be achieved are in a state of constant flux.
“I don’t know that there’s any benefit to anybody to have a 10-year goal because the market will evolve and change so much,” Howard says. “One of the major tenants of our strategy is that we’re going to follow the marketplace. I am quite confident that we will not be doing some of the services we do today several years in the future. We will have retooled and evolved our services to match the new opportunities in the marketplace.”
One of the primary information sources that Navigant utilizes while assessing and further developing its strategy is the organization itself. Encouraging what Howard calls a “feedback loop,” key leadership positions across the company are consulted on how to continually update Navigant’s strategy to better reflect the conditions of the market. Additionally, over time, Howard has looked to form relationships with individuals in the firm whose experience and position gives them broad awareness and context from which to offer continued insight. In all, Howard says the more input that can be efficiently gathered, the better.
“There is not one individual that sits in a room somewhere and says, ‘I have developed this strategy for the firm,’” Howard says. “We have a lot of people who are in midlevel, listening-post positions in the organization, people who are out in different regional areas and different practice areas. Those people can feed you information and help you test some of your thoughts and ideas on strategy and how it plays in their local market.”
Howard says everyone in an organization needs to understand and have the ability to articulate the path they’re following. Soliciting input and feedback from multiple layers of the organization not only helps build awareness around a strategy but also inspires employees to buy in, which Howard says is a crucial ingredient to any strategy’s effectiveness.
“There has to be some level of buy-in, and they have to feel like it’s a common goal that they can get on board for,” Howard says. “You need participation in the development of and a willingness to carry out the strategy with senior leadership and with people who have influence in the organization in helping us to define programs, set measurements and help carry it out.”
Developing new leadership
Regardless of its size, no organization can be driven to success on its strategy by one person alone. Every individual at every level up to the highest position on the organizational chart has a different contribution to make. As an organization grows, Howard says it is imperative that its leadership team expands, as well.
“The more you grow and the greater your platform is, the more you’re going to need a larger team of people contributing and bringing different skill sets,” Howard says. “If you don’t have developed leaders in place, it can be the one thing that can seriously impair you from reaching your strategies when you’re growing.”
Identifying and developing future leaders — or as Howard calls them, “high potentials” — requires, first and foremost, that a leader not lose his or her relationships within the organization, regardless of what title he or she holds. Not only will maintaining and deepening that connection help you better understand the inner workings of the company, but it will also allow you the ability to gain perspective on and monitor those individuals who are displaying the potential to eventually assume leadership roles.
At Navigant, Howard says high-potential employees have also been identified with help from a 360-degree evaluation process whereby the peers, staff members and senior team members have had the opportunity to evaluate some top-level practitioners on attributes that have been identified as key leadership indicators.
Howard also gives future leaders a chance to display their talents by allowing them to participate on broader-scope assignments beyond their normal job responsibilities, which she says, is beneficial to the organization as well as the individual.
“Another way to really get at your high potentials is to allow people from all different levels and all different capability sets to participate on firmwide projects and initiatives — things that are normally outside their everyday jobs,” Howard says. “It’s a benefit for the company because you’re getting new perspectives and you’re also helping to form those relationships that otherwise wouldn’t occur. It also allows us a chance to observe young professionals and emerging professionals and the development of their skills.”
Howard says that while Navigant does not have a specific program for developing future leaders, by making space for those identified high potentials to contribute to the organization on specific companywide projects, it allows those individuals the opportunity to perform for a broader group and have their progression be monitored with increasing levels of responsibility. And although a shift in roles and responsibilities within the leadership team can cause some consternation, Howard says the development of new leadership during phases of growth is a natural and necessary evolution.
“It’s natural as a company grows, and you need to widen the leadership net that there are those that were in those positions when you were smaller (who) may feel infringed upon or that they’re giving up certain responsibilities,” Howard says. “But the whole idea is that you’re supposed to be creating opportunities for people and ultimately finding the person who is going to replace you. So it’s really imperative that you expand your leadership team.”
Retention through growth
While it’s no secret that employee retention is a key contributor to the success of an organization, Howard says it is especially so of a company experiencing growth. In an organization like Navigant, where monetary growth is accompanied invariably by employee growth, employee retention creates stability and consistency as new team members are added, be it as individuals or as part of an acquired company.
“It facilitates your strategy,” Howard says. “It stabilizes the framework for people. In our firm, growing means that we’re growing our intellectual capital. Therefore, we are growing by people. We’re humans; we have our own internal motivations and personalities, and by retaining while you’re growing, it stabilizes the framework for on-boarding people into a common culture.”
Howard says that while employee attrition is costly for an organization from a monetary perspective, its negative impacts go far beyond that.
“We lose key intellectual capital that has to be rebuilt, we lose an investment we’ve made in our people to train, mentor and develop them, and others in the organization perhaps have lost a leader or a boss who was allowing them to develop their careers,” Howard says. “On one hand, it’s natural, to be expected. On the other hand, it’s very impactful to the company.”
Understanding how to retain employees means understanding and being conscious of the expectations and motivations of your work force. Whether it is a generational difference or simply a sign of the times, Howard says employees today have different expectations than did employees 20 years ago.
“Younger professionals today want to receive more immediate feedback, recognition and rewards — and probably more frequently than we are used to as an organization,” Howard says. “They’re looking to be challenged and to obtain a rapidly higher education and constantly be developed, so we’ve put a lot of effort into developing more on-time recognition programs, tuition reimbursements and tuition grants.”
While Howard says compensation drives behavior, and therefore, it is necessary that a compensation structure reflects the goals of an organization’s strategy, compensation alone will not keep employees from leaving. In the same way that Navigant strives to be adaptive to the market in adjusting its growth strategy, it likewise makes efforts to ensure the compensation and the environment Navigant offers its employees is on par with what they might find elsewhere, and it makes efforts to better understand employees’ motivations.
“We’re in the midst of a benchmarking study against our competitive environments, both domestic and international, to ensure that we know not only what the competition is paying, but if people are leaving, why they are leaving, and where they are going and for what amount of money or for what intangibles, so that we can adapt our systems and our support structures,” Howard says.
Ultimately, Howard’s ability to shepherd Navigant through its growth initiative, be it by building awareness, developing new leadership, tweaking the organizational framework or adjusting compensation structures, requires that she and her organization be ever-ready to embrace and celebrate change.
“Change management is probably the No. 1 responsibility that I have in the organization,” Howard says. “It’s acknowledging that the solution you applied yesterday will likely not work tomorrow, and that’s the biggest challenge of managing growth.”
HOW TO REACH: Navigant Consulting Inc., (800) 621-8390 or www.navigantconsulting.com
Communicate to all levels. The most significant challenge a leader faces is clear, concise communication of what the company’s goals and objectives are. When you see companies that are not doing as well as they should be, that’s usually the No. 1 thing that has broken down. There’s a lack of trust, and the reason there’s a lack of trust is because nobody ever hears from or sees the leadership of the company.
The one trait that all successful business leaders have is listening and communicating. I look at best practices a lot and visit different companies in my area of business, and what’s interesting is that the most successful restaurant companies that I visit out there share a common thread that everybody, at all levels, knows what the goals are, and they buy in to it, and they’re excited about it. And that comes from communication.
When you see companies that are in turmoil, usually nobody knows what’s going on. They really don’t know what the end result or the goals of the organization are.
Encourage commitment. Goal-setting starts at our team-building meeting, where we say, ‘Here are the macro goals that we need to achieve this year. How will you and your respective team go about achieving that?’ We spend a lot of time going through that, and it’s their involvement that sets the pace, and that builds their commitment to getting it done.
The old saying is that involvement builds commitment, so ours is not top-down-type management, and it’s not top-down-type goal-setting because they’re in the process, and many of the goals that we have came from them and their team members. By involving them in that process, they feel way more committed to achieving that because it was their idea to do it, and they’re going to work harder and smarter to make sure it happens.
The long-term benefit is twofold. It certainly builds their trust, and it builds their commitment, their loyalty to the brand. They are less apt to look outside for other opportunities because they feel that their opinion matters, they feel that is their goal to achieve, and so they feel committed to that. Once you have trust in an organization and you feel committed to it because you’re involved, it gives you a lot better job satisfaction.
Create a fun culture. We’re very serious about results, but we have a lot of fun. Life’s too short not to have fun. If you’re having fun, you’re going to do a better job, and it reduces turnover. When the phone rings from the headhunters, they’re not necessarily listening because they’re having fun.
A lot of our team members have worked in other places where there is a top-down mentality and you have no flexibility in your schedule, and it is, ‘It’s this way or the highway.’ When they’re working in an environment like this, where they are having fun, where we play pranks on one another, where all of the upper management listens to their team members and involves their team members, it’s a better place to work.
It trickles down to your franchisees, it trickles down to your company managers, it trickles down to the team members in the restaurants servicing the guests, and then, ultimately, we give a better experience to the consumer.
Maintain culture through communication.
Culture is difficult to maintain, and communication is at the top of everything. I have to communicate, on a daily basis, the good, the bad and the ugly.
If you’re not out there, if you’re not visiting with your other team members, with your direct reports, if you’re not visible in the business, the culture breaks down. It starts taking on a life of its own, and you have a fragmented message.
Communication is the most important thing that a leader can do. Everybody wants to be informed and kept informed of all the news. We have an open-door policy, and we communicate the good, the bad and the ugly. We communicate and celebrate if we are meeting and exceeding budget, and we communicate and talk about ways we need to improve the next month if we’re not.
We have several different forums or formats to cascade our information, and even doing all of those, there’s still a lot that doesn’t get cascading as deeply as we would like it, but it’s an ongoing effort, and it’s more difficult than you would think.
Get out of the office. I usually only spend two or three days a week in the office, and I spend the rest of the week splitting my time between visiting company stores and visiting franchisees. It’s a gut check to see if our message is getting to the levels we want it to. When I’m in the restaurants, I’m talking not just to the managers but to the employees. Two weeks ago, we hit four stores, and we met with four or five employees at every restaurant, just to sit down with them and say, ‘Hey guys, what are we doing that’s stupid? If you ran the company, what would you do differently?’
It’s those ongoing types of communications that make them feel important and, believe it or not, they’re not afraid to voice their opinions. Because of that, they feel that I and my direct reports are very approachable, and when they get the message, they believe in it, and they trust in it, and they try to do the right thing.
HOW TO REACH: Sizzler USA Inc., (310) 846-8750 or www.sizzler.com
Keep your door open. We empower people to make decisions and know that no idea is a bad idea. They’re not afraid to give their opinions, and their opinions could be right or wrong, but as a culture, we would rather have people give us their opinions.
I have an open-door policy in my office, and the only time my door is shut is if there is a meeting going on. Everybody knows that they can come in my office at any time if they’ve got an issue or a question or want to bounce something off me or any other person in the company, and that took some time to establish.
Being in the human resource business, you hear a lot of people say, ‘We have an open-door policy,’ and as you drill down and talk to some of their people, how much of an open-door policy did they really have? What I’ve done is instilled in everybody that I trust their opinion and that there are no repercussions for anything they say to me. They can talk confidentially with me and not worry that there is going to be a repercussion. That’s a key part, whether it’s an employee talking about something in his or her personal life or something corporate or something off the record about a client, employees need to be able to know that it’s confidential, and it takes time for people to realize that.
Maintain focus. Losing focus is something that can cause a business to fail, and not only losing focus on your own business but of your marketplace. You can be running a great manufacturing company, but you have to stay on track with the inventory and where the marketplace is going and stay focused not just internally but on the external marketplace also.
Sometimes it’s not being as involved as you should be. In some cases, maybe you’ve entrusted the management to the wrong people. We’ve seen that happen a few times with some of our clients.
The owners have brought in some people to run day-to-day, and they thought they had someone running their businesses and doing a great job, and the next thing you know, people took their eye off the vision.
Communicate to all employees, not just the top of the pyramid. It’s important to keep communication lines open because if they’re not open, it’s too easy for a department or a person to be thinking one thing, and, as in anything, people talk, and you want the right message to be disseminated to everybody.
The last thing you want in any company is an incorrect rumor going around. Open lines of communication really keep the correct and accurate message going through the company.
Before we started doing the weekly meeting, we had people asking us, ‘Where’s the company going? What’s our direction?’ and so ... we have company meetings at least quarterly where we say, ‘Here’s what our retention is of our clients, here’s new business, here’s what’s happening on the horizon.’
We found a few years ago that the management of the company and the senior people knew the direction and focus of where we were going and the growth plans, the sales department knew who was selling what, but in the overall company, we needed to have the same communication down to every level of employees, so everybody had an idea of the vision of the company.
Doing that enables employees to realize that there is a vision within the company, that they’re working for an organization that has specific goals, that has growth in mind, that has customer service in mind, and it helps the culture of our company grow. Pretty much everybody in our company deals with customers in one way or another, and it helps them know that there is a vision, and as they’re talking, it enables them to be excited about what we’re doing as a company.
Seek input. I always look for other people’s involvement. I started the company with my father and brother 11 years ago, and early on, we established what we refer to as an executive council, which consists of key people from within the organization.
We meet regularly, and we look for their involvement. Each person manages multiple people internally, and I value their input. Outside the executive council, every Friday, all of the key people from each department meet and talk about issues. We typically review three or four clients each week so everybody knows what each other is doing, but at the same time, I want to hear from everybody about what’s going on in their department that other people should know about.
It’s really helped our company grow, and it shows that we value their input. It empowers them to make decisions and think on their feet and to stay focused on the customers.
What was surprising when we first started this process was that because there are so many different components to a company, people know each other from seeing each other in the hallway or the lunchroom or company outings, but they have no idea what the other departments do. ‘Ron’s in loss control, and I didn’t even know what that was.’ So it also started to educate different people in the organization and then empower them to know what the different departments do so they can interact with our customers.
HOW TO REACH: Employco Group Inc., (630) 920-0126 or www.employco.com
When Kevin Hartman was a student at Niagara University, he took a clerical position with an organization called CNF Inc. Today, more than three decades later, he serves as president of Con-way Freight-Western Inc., a subsidiary of Con-way Inc. previously known as CNF a $4.2 billion transportation and logistics company. In the years since he graduated and entered a management trainee program, Hartman has held a number of positions within the organization, with increasing levels of responsibility, and in 2005, he was named to his current position. Now supervising approximately 3,500 employees serving 13 states, Hartman’s leadership philosophy stresses communication and feedback as the means to uncovering opportunities.
Smart Business spoke with Hartman about the importance of core values and how he prepares his organization for change.
Encourage collaboration. You have to surround yourself with people that are diverse with points of view and experience, and you have to ensure that various departments and that the employee and customer perspective are taken into consideration.
You have to allow people to come up with ideas and be free to give dissenting opinions, and you can’t kill the messenger. The intent is that employees come to work and feel that they can make a difference. They know their input is valued and that they had a piece in shaping the direction that we take.
As a result, we’re more adept at change. We can stay abreast of what’s going on. We’re in a very competitive marketplace. By having different points of view represented, we’re able to stay current and on top of things. We’ve created an ability to change and adapt. Change sometimes is very hard, but by having employees involved, you recognize why change is needed and what is changing in the marketplace.
Listening to customers is one of those things that helps us. We recently met with customers, and by listening to them, we found there was a product not being offered by our industry. A product that, by talking with them, by listening to customer needs, we were able to take an idea and develop it into a product that’s been very successful for us. If a company doesn’t listen to its customers, it’s at a serious disadvantage.
Develop culture around your core values. Our culture is strong and built upon our core values of safety, integrity, commitment and excellence. They’re more than words.
Early on, as this company was evolving, we determined that these four values were our cornerstones. It’s one of those things that has taken on a life of its own. We don’t have to force it.
We knew early on that the company was going to be successful and that it was distinct in our industry, and we shared our core values across our system. We all have one common culture, and we took great pains to catch people living the values. Whenever we could, we thanked them.
We took great pains early on, and today continue to always view those values in every decision we make.
Use values to guide behavior. We have an employee recognition program that is more positive affirmation than negative, and it is based on continuing to catch people doing something good.
We have a very simple process where employees can give each other a ‘star card’ for living our core values. It’s amazing how many are issued to each other on a daily and annual basis. There’s no quota system, it’s not forced, but it’s celebrated to the point that it’s comfortable and it’s not contrived.
What we also try to do is use our values as a guidepost to correct behaviors. If we have an employee who has had an accident or is mistreating a co-worker, we always go back to our values. We don’t beat them over the head with it, but we always try to say, ‘What you’re doing is wrong in relation to our values, and here’s what good behavior is.’
I thoroughly believe nobody comes to work wanting to do a bad job. You can use your values to say what is expected, and it always keeps your values alive as positive instead of a negative thing.
Prepare for change. Change is the most significant challenge a person in a leadership position faces. You have to have your radar out for what’s happening in your company, the industry and the economy.
Customer needs are ever-changing. If your business isn’t attuned to that, you’re going to get left behind.
It’s recognizing the need for change. The status quo is going to be harmful in the long run. The challenge is preparing yourself and your people so that change is not a harmful thing. Human beings don’t like change. You have to have an organization that is adaptive in reacting to change, and that’s the hardest thing a leader has to do.
Preparing for change takes honest communication, feedback, listening, and getting out and talking with employees, trying to communicate and listen. We try to continue to make examples of changes that we’ve made that have worked, and even changes we’ve made that we’ve had to learn lessons from.
You have to be open and honest in your approach so your employees recognize that change is safe and necessary.
Inspire passion. If there is one trait that all successful leaders share, it’s passion. To be successful at whatever you do, you have to believe in it.
You also have to be able to show that passion to your customers and employees so that they’re energized and comfortable, and they understand your purpose and why you’re doing it.
You have to then look to take that passion and pass it down. Employees truly want to belong to something. They like being part of a winning team. You’ve got to take the passion you have and communicate the vision and how your employees fit into it, why it’s important and what they’re contributing. If you can get employees truly understanding what they’re supposed to be doing and why it’s important, you have a formula that’s very successful.
HOW TO REACH: Con-way Freight-Western Inc., (714) 562-0110 or http://freight.con-way.com
Working at a company with annual revenue of approximately $12 million, the 77 employees of Des Plaines Office Equipment have good reason to be happy. And according to President Chip Miceli, happiness is not an option it’s a requirement of the job.
“If you’re working here, you have to be happy,” Miceli says. “If you’re not happy, you don’t do yourself any good, you don’t do your team any good, and you definitely aren’t going to do the organization any good.”
For Miceli, making his people happy means quickly assimilating new hires into the organization and giving all employees the opportunity to contribute to the company’s overall goals and direction.
Smart Business spoke with Miceli about planning for growth and how to attract quality employees.
Q: How would you describe your leadership style?
I’m the type of person that likes my employees to take ownership of their particular job or their department. So I will give out two choices to them, and they have to pick which one is best for them.
That gives them empowerment, and they feel that they are part of the solution, more so than being dictated to, and it gives me the capability to expand my organization a lot quicker, because now I know that I have people that can get the job done and who aren’t afraid to make decisions. They take the ball and run with it, more so than in a dictator-type organization.
Q: How can a leader communicate his or her goals and vision to employees?
Goals are very important, and I express my goals to my people all the time, but I also like them to make their own goals. If they’re in charge of a particular department, we sit down before the year starts, and they tell me whatever percentage of growth they expect.
When people pick a goal, they have something to strive for, and it’s something they picked, not something I gave them. We have meetings constantly, a couple times a month with my managers, and we have a meeting once a quarter to go over the goals and say, ‘Here are the goals you picked, and here’s where we are.’
If you don’t keep people on task for their goals, then the goals are never going to come around.
Q: What is the most significant danger in growing too fast?
People. A lot of organizations go out and grow really fast, and all of a sudden turn around and find out they don’t have enough people to support their growth. It’s important for an organization to be continually looking for new hires and to keep people in a database that you can hire immediately when you need these people.
Our organization had a growth spurt a couple years ago, and we didn’t have the people to maintain it, so we had to go out quickly and hire more. Then you don’t get the quality you want because you’re in a fast hiring mode, more so than saying, ‘OK, I need to evaluate you better.’
Q: How important is it to anticipate and prepare for growth?
At the beginning of this year, my people came to me and told me they were looking for 25 percent growth this year. My first question was, ‘Where are these people going to come from?’
They told me they had a heavy recruiting schedule in place, and the first thing they were going after were two managers to manage the people they were going to have to add to our organization for that growth. Right away they started hiring before the growth had started.
That is what you have to do today because there are so many people that are available that are looking for jobs, it’s hard to find the right one if you’re in a hurry. If you can take your time and go through a proper interviewing process, you’ll find that you’re a lot more successful than just hiring the first person that walks in the door.
Q: How can you make your company attractive to quality hires?
For (the people) you hire, you have to show them a career path right out of the box, no matter what position they are in the organization. Everybody wants to know what will be (his or her) next step in life. If you can’t show them that upfront, you’re not going to attract people.
There are certain people that think, ‘Hey, I just want to sell the rest of my life, and I never want to be in management,’ and those people are great because you never have to worry about it. But a lot of people want to know, ‘What’s the next bridge I have to cross?’
I like to find people that like to be challenged, because I feel that if I continue to challenge them, they continue to grow, and the company will grow with them.
HOW TO REACH: Des Plaines Office Equipment, (847) 879-6400 or www.dpoe.com