Patrick Mayock

Sunday, 08 June 2008 20:00

Firsthand knowledge

Back in 1990, John Kaniuk viewed Zircoa Inc. as an exercise in excess.

“What I saw was a company that had many different products, many different markets and a lot of problems, both internally and externally,” he says.

Company management at the time thought the myriad problems were all technical. Years of disappointing revenue led them to believe that processes — not the people — were to blame. In an attempt to turn the ceramic and refractory products manufacturer around, Zircoa’s management sought out Kaniuk, then a rising star in the research department of a nearby refractory manufacturer, to take over as president.

Despite his technical background, Kaniuk wasn’t so quick to adopt the previous interpretation of the problems. His experiences in numerous strategic planning initiatives made him think the issues might be more widespread. By digging a little deeper and talking to nearly everyone at the company, he eventually concluded that a comprehensive approach was better suited to address so many ills.

“We needed to get everybody involved to determine how to proceed because there were so many problems,” he says. “Instead of trying to just tackle the technical side of the business, my focus became, ‘What do we need to do to get everybody involved to turn this company around and do the things necessary to be successful?’”

To answer that question, Kaniuk empowered his employees by making them active players in his quest toward quality. He organized dozens of committees, each consisting of six to a dozen workers, and charged them with fixing processes and developing key initiatives. His only guideline? Keep it within budget.

That trust and autonomy has helped push the company to 2007 revenue of $30 million, while making it one of only four, nine-time recipients of the NorthCoast 99 Award, which honors great work-places in Northeast Ohio.

Here’s how Kaniuk turned things around at Zircoa by getting his employees involved and then holding them accountable.

Make employees part of the solution

When Kaniuk stepped into the maelstrom of problems at Zircoa, he didn’t start yelling rash directives at his crew. That, he says, is an urge you must fight in a high-intensity turnaround situation. To get everyone paddling in the same direction, you must first gain trust by consciously following through on everything you say.

“The first thing you need to do is to get people to trust you to go down this path,” he says. “There’s no magic way to get people to trust you other than being very, very diligent on whatever you say you’re going to do. When you’re in a tight situation, for people to believe in you, you have to be very diligent in keeping every little promise you make, even if it’s just a side remark. That’s the first step.”

Kaniuk says such diligence is a long-term objective. In the short run, one of the most beneficial things you can do to gain trust, get buy-in and address a number of ills is involve your employees in nearly every aspect of the turnaround process.

“Instead of me coming in and saying, ‘We need to do this, this and this,’ we formed teams,” he says. “Each department solved their things. We must have had two dozen teams out of hundreds of people. Everybody was on three or four teams working on different things.”

Forming these teams isn’t as simple as asking certain employees to solve a given problem. Kaniuk sought outside help from consultants to give his employees the skill sets to better identify areas in need of improvement and to better work within groups to address them.

“Everybody at Zircoa goes through three days of facilitator training so that they know how to run meetings, how to communicate and solve problems,” he says. “The first year, we did 6 percent of our total work hours in training. A huge amount of facilitator training, communications, listening skills — all those kinds of things so that people could talk, communicate and decide which problems to solve, what’s the priority and get them done.”

Once employees have the necessary training, the committees they form will typically fall within departmental lines. The fabrication department at Zircoa, for example, formed a group, identified 85 things that needed to be improved, and then spent six months working on them.

For companywide initiatives, such as incentives, workplace rules and health care plans, committees weren’t so easily defined. In those situations, Kaniuk met with union officials to identify what employees were best suited for each task.

“If it has significant monetary value, such as gain sharing, health care or job evaluations, we work with the union to decide on the group,” he says. “The plant manager and/or I will talk to them and make sure they understand the assignment.”

While consultants and front-line supervisors may be brought in to oversee larger projects, Kaniuk and his direct reports are decidedly absent from the proceedings.

“We can approve it, but we won’t be involved,” he says. Granting such freedom ensures that each project is the employees’ own, which then leads to buy-in.

That’s not to say that Zircoa’s 140 employees operate with complete autonomy. Kaniuk sets careful budgetary restraints for every initiative.

“I usually go to my (chief financial officer) to see the value of an initiative to determine the right amount,” he says. “The guidelines are, ‘We’ve got this much money.’ Other than that, it’s pretty open.”

An authoritative executive may have a hard time relinquishing so much control. Kaniuk certainly had his doubts at first. When a committee first presented their gain-sharing plan for the entire company, for example, he was very hesitant to approve it.

“I was pretty adamant that we had made a big mistake, and they had made a big mistake in setting it up, and I went in and was very vocal about it,” he says. “They said, ‘Yes, we understand your problems, but this is the plan for us.’ So I said, ‘OK,’ and we went ahead and did it. Two years later, I realize they were absolutely right.”

Kaniuk says the success of this strategy and the resulting buyin it yields will ultimately depend on your ability to take your ego out of the equation.

“The only pitfall you can have is your own thoughts of what’s the right way to do some things,” he says. “Even when I said I trusted them, I had my own reservations. I found in the end that you’re much better off trusting their judgment. I went ahead even though sometimes my gut told me no. In the end, you’re better off trusting their judgment.”

Hold employees accountable

Autonomy without accountability is a realm few executives should dare tread. Yes, Kaniuk gave his employees the freedom to address problems. Yes, he allows them to form committees to start initiatives and address changes today. In each and every instance, he demands transparency to make sure his employees are churning along the same track.

“Everybody has a communication board up, and they list all of their initiatives and where their status is and what they are doing,” he says. “They routinely report their progress and sometimes ask for our assistance. In all these cases, communications is frequent and open.”

To facilitate that open communication even further, Kaniuk also practices diligent transparency on his end through regular correspondence.

“In my monthly communication meetings, I keep all employees up to date on progress,” he says. “In this manner, others can get and give feedback on any initiative. In this way, there is greater buy-in by all employees.”

But while transparency may help track progress, it certainly isn’t the end all for Kaniuk’s highly autonomous approach to employee relations. You can communicate as often as you want with your employees, but that doesn’t necessarily mean they’ll approach such responsibility with gusto.

Kaniuk says one way to get employees to really take charge is by setting up an incentive or gain-sharing plan. At Zircoa, the company went about it as it would any other initiative: A group of employees formed a committee and got to work.

“The biggest mistake people do is when management does it and puts it in place,” Kaniuk says of gain-sharing plans. “We let the people decide what was critical. It was their system. They said, ‘Here’s what’s important, and here’s how we are going to do it.’”

Letting your employees decide what’s important can often create problems if their goals don’t align with those of the company. To help minimize that risk, Kaniuk says to articulate and continually communicate the company goals before that committee is formed. Repeat yourself again and again and again in meetings and during informal correspondence. This will help ingrain the business’s objectives in the minds of your workers.

When it comes time to actually form a committee, he says to hire a consultant to help guide it. A skilled third-party representative is usually able to keep the proceedings on track.

Finally, Kaniuk says to trust that your workers will do what’s right for the business. “We’re not telling them what’s best,” he says. “We trust them to hopefully make the right decisions.”

If you do those things, your employees should emerge with an incentive plan outlining goals that are firmly aligned with those of the company. The next step, then, is to implement a system to monitor progress toward them.

The Zircoa committee based its gain-sharing system on productivity gains and yield gains. Management already kept track of this data, so it was simply a matter of communicating it frequently and efficiently.

To do so, Kaniuk posts appropriate data on a large board near the employee entrance. The information is broken down by department and is updated every week. He also holds a meeting every month to share a companywide update and address any questions or concerns.

“I have monthly meetings,” he says. “I meet three times a day. Each shift as well as all the [salaried employees] can go to any one of them. I go through what’s going on monthly financially as well as what’s going in sales and development so everybody knows what we’re doing, where our problems are, and if they have any questions, they can ask me.”

While Kaniuk also posts a monthly update on that same board with the weekly information, he says it’s still important to set regular sessions to communicate with employees face to face.

“In a public forum, people can ask questions if they don’t understand something,” he says. “No matter how good you are, two-way dialogue is always the best. People trust you more whenever you’re looking them in the eye and talking to them.”

In the end, that trust can make all the difference when it comes to turning a company around.

“A business leader has to look at his business, and they have to decide how important your people are,” Kaniuk says. “If you decide your people are critical in getting you to where you need to go in your goal, then you have to put trust in them.” <<

HOW TO REACH: Zircoa Inc., (440) 248-0500 or www.zircoa.com

Monday, 26 May 2008 20:00

Part of the plan

You may not always agree with him, but Darryl Low is going to make sure you at least understand what he’s saying.

“Even if they disagree, they understand,” he says of his 50 employees at MZI HealthCare LLC. “As long as they understand, they’re willing to get on board.”

When he became president of the health care software provider in 2005, Low spent hours explaining the rationale behind every decision he made. That process helped him focus his management team on common goals, and the company has since doubled its revenue to more than $5 million in 2007.

Smart Business spoke with Low about how to get buy-in from your employees during strategic planning.

Q. How do you begin forming a strategic plan?

The key element is understanding the whole picture before you go into your strategic planning: understanding the market, understanding your product, its strengths and weaknesses, and then identifying which strengths you can leverage the most to either turnaround the company or to grow the company.

Q. How do you come to that understanding?

I have always taken time right out of the chute to spend with clients. Go and find out what the real world perceives the (product) to do, what they believe it does well and what they believe it doesn’t do well.

Go out and do face-to-face meetings. I actually scheduled to meet with clients of all different sizes around the country, and we probably spent the first year in pretty (regular) meetings face-to-face with the clients.

We have about 120 customers, so it’s a little easier for us to do than if you had thousands. [Even then], it’s still worth targeting some of your key accounts and then throwing in a good sprinkling of smaller clients to get a really good picture of the perception.

We all know perception is reality, and so it’s very important to find out what the reality of your customer base is.

Q. What’s the benefit of meeting with clients face to face?

It does a couple of things. In turnaround situations, it gives them a face to put the hope to. It really allows you to quickly form a bond that you’re just not going to get over the phone.

There were a couple of clients when we acquired (the company) that were in the process of replacing the software. By being able to go and meet with them to admit that there were issues, to give them an overview of how we were staging to resolve the issues and just having lunch with them, they left with a very high level of comfort that we would resolve their issues, and it postponed their decision to leave.

I haven’t personally touched all the clients, but I’ve also sent out my vice president and sales force to deliver the message after they’ve spent time with me to understand what the message was. Every position, it has been worth the time to do that.

Q. What are the pitfalls to avoid during the planning phase?

Taking too much input internally can be a pitfall, especially in the case where you’re going through an acquisition. You may have a good team, but a lot of their thought processes are based on their experience with prior ownership, and it’s that same leadership that obviously put the company in a difficult situation. They have good ideas, but you have to take it with a grain of salt.

There have been a couple of situations where I have conceded planning issues to staff in an effort to win some ownership and buy-in from them knowing that it was the wrong decision, allowing it to go through, and ultimately, it did prove to be a wrong decision. You’ve got to be careful with trading off good decisions with the empowerment side of it.

Q. How do you deal with resistance in a turnaround?

It has taken a lot of time around the table almost debating, really going over and over what the problem is, how we can get from here to there, understanding that we all have different directions to get to the same place.

Ultimately, what it comes down to is saying, ‘I’m going to take your feedback.’ I’m still going to make the ultimate decision, but I take a lot of time explaining my rationale and logic. Even though they don’t necessarily agree with the path, they understand the rationale and the logic behind it.

You need to be confident in your ability to make good decisions — not cocky about it but confident. If you’re not confident in your ability to make decisions, then you are going to run into the situation where everybody else is making decisions around you, and it leads to chaos.

You’re more likely to keep a good team of people that are supporting the end goals of the company in the same direction. But the flip side of that is you’re also not leading the company into chaos by letting all of those people direct the company in different directions.

HOW TO REACH: MZI HealthCare LLC, (661) 310-9333 or www.mzihc.com

Monday, 26 May 2008 20:00

Prep work

Applying for a business loan can be like kayaking through river rapids; you would be foolish to do either without adequate preparation and the watchful eye of an experienced guide.

Although Dan Waldeck has never pulled someone out of churning waters, he has led executives through the loan application process as senior vice president and relationship manager at National City Commercial Banking. And he says that the most successful applicants are those who practice due diligence before submitting their loan for approval.

That preparation can take many forms, but Waldeck says that the best way to prepare is to devise a state-of-the-company report.

“What I’ve seen that has been very successful is when executives will sit down and prepare anywhere from two pages to 25 pages — depending on what’s going on with the business — that survey not just the financial performance but what they’re projecting for the future and what are the challenges,” he says.

That report not only gives loan officers helpful background on your company, it also helps you by shedding light on the merit of a given project.

After taking a disciplined look at your current situation, for example, you may have to modify your strategic plan before seeking a loan. Or you may have to scrap your plans entirely if an opportunity isn’t as beneficial as you had first hoped.

When conducting your analyses, you should also look at the state of your industry and the economy in general.

Waldeck points to the recent talks of recession as an example: “Right now, we’re in a declining, short-term interest rate environment. It may not be a positive thing that economic indicators have declined, but it does mean that borrowing rates have gone down in the last six months.”

Whatever the state of your company, industry or the economy, Waldeck says that you shouldn’t feel alone when conducting your initial analysis. If you’re struggling, have questions or simply need help getting started, don’t be afraid to approach your loan officer.

“A banker that adds value will assist through the process,” he says. “We’re just not asking you to come in and do an information dump. We want you to feel like we can help you. If you want to contact us even earlier in the process and say, ‘Well, this is just what I’m kind of thinking. What direction should I go with this as I do a business plan?’ That’s something that we can help with.”

Waldeck doesn’t just suggest approaching a loan officer in the preparation phase, but he actually encourages it. Bankers can provide you with guidelines to help steer your planning, and they can alert you of regulations that could affect the status of your impending loan application. But however you use them, it’s important that you open up some channel of communication with a loan officer before you submit your application.

“Communication is so important,” Waldeck says. “We find that the very successful business leaders are the ones that are communicating with us in advance. They should not feel shy about telling us about good news or bad. The main thing is to keep the communication channels open. That allows us to add more value.”

Throughout these initial steps as well as the application process itself, hold your loan officer accountable. Waldeck says that one of the best ways to ensure your loan is approved is to treat your bankers as partners.

“A banker that is truly worth his or her salt would be somebody that considers it a partnership and walks the business leader though the process,” Waldeck says. “Make sure that he or she fully explains the process.”

HOW TO REACH: National City Commercial Banking, (216) 222-9020 or www.nationalcity.com/commercial-banking/pages/home.asp

What is your banker looking for?

All the preparation in the world won’t do you any good if you don’t know what a loan officer is specifically looking for. While the details may change based on your banker, your company and your desired loan, there are four general things that can make or break any application, says Dan Waldeck, senior vice president and relationship manager at National City Commercial Banking.

  • Management “When I’m looking at a business loan request, it always starts with management — the individuals that you’re dealing with from a character standpoint. What type of command do they have on the business that they’re talking about and the knowledge of the marketplace and so forth?”

  • Business model. “A banker that is adding value and that would be a good partner for business leaders is one that really tries to understand the business model for that leader. Is it a compelling business? Does it appear to be sustainable on an ongoing basis? That’s important.”

  • Cash flow. “If it’s a company that has existed historically, we look at historic cash flow. If we added, say, a million-dollar term loan, can the company afford this on a historical basis?”

  • Collateral. “Falling in behind (cash flow) would be, what type of collateral is there to support it?”

Friday, 25 April 2008 20:00

Leaning green

The next time you clock out, Jason Meugniot would like you to turn off your computer. It may seem like an odd request, but it’s just one of many rituals that he and his 75 employees at Guidance Solutions Inc. engage in on a regular basis.

The reason? Environmental sustainability.

“[The green movement] brings integrity to the business,” Meugniot says. “In today’s economy and business climate, integrity is essential to growth.”

At the information technology service company, the owner and CEO has embraced the employee-led initiative, which he says has contributed to the company posting $6.3 million in 2007 revenue.

Smart Business spoke with Meugniot about how to go green at your own company.

Q. How do you begin to establish an environmentally friendly workplace?

We put together an environmental tool kit that lists simple but key areas that we can look at to understand our carbon output and start the education process. We talk about hibernating or turning off our computers and using energy-efficient fluorescent light bulbs, optimizing the AC usage, or [using] light sensors in restrooms.

We talk about things like carbon credits and working with other companies who are committed to alternative energy sources. We talk about looking at your suppliers. Almost every company purchases certain staple products: paper, electricity, telephone service. Guidance, for example, works with Internet hosting vendors who use solar power instead of diesel generators as a backup source of power.

In order to establish carbon neutrality or really get serious about carbon neutrality, we look at education, measurement and action around reducing waste, improving air quality, eliminating greenhouse gas emissions and finding renewable sources of energy.

Q. How can other leaders implement programs at their companies?

To start an effective program, you need to walk the walk. You need to be carbon neutrality. As the executive, you set the example.

I’d also say you need commitment at all levels. You can’t do it alone. Let the initiative live and grow. Don’t stifle the conversation. When I say conversation, I mean the ongoing conversation at the office or at the business about the environment.

Allow employees to share ideas. Allow them to set up blogs. Talk about it. Don’t just post signs around the office.

Q. How do you get employees involved?

Start with education. We provided, very early on, links to Web sites. We shared personal stories. We screened movies [about environmental sustainability] here at the office. We talked about the impact of our own carbon imprint and helped employees to determine what their carbon footprint was at home.

We have a Guidance Green committee. The committee meets regularly throughout the month. They lead various initiatives, and they collate information.

Use your core values to generate buy-in. The first core value is honesty, integrity and fairness. If we’re to have any integrity or fairness in our consumption of nonrenewable resources, we all need to be committed to the environment.

A key component in the program is not creating a top-down program. It’s really creating a program that’s created and even led by the employees. To create this momentum, the employees really need to be a part of it at the onset.

Q. Do you choose the committee, or is it run by volunteers?

The people who serve on our committee are not asked or chosen. It’s a voluntary committee.

Look for people with energy, with commitment to the environment. Look for people who are open to ideas and then sharing those ideas.

Q. How has this movement benefited your company?

It’s really made an impact on our employees and how they work together and the bonds and relationships that keep them together.

We also have prospects who call us out of the blue wanting to work with us because they’ve heard we have a green program. I don’t want to give you the impression that it happens every day, but we are working with clients today who sought us out because they were referred to us from someone who’s heard that we have a green program.

It also filters into recruiting.

As your employees are talking to candidates and new recruits, they’ll say, ‘This is an amazing company. We take a stand for the environment in the face of various circumstances, and I’ve never worked at a company like that.’

You’ll have employees talk to other folks about it, and it gives them a sense of pride in the company they work for, in the work that they do and in their relationships together at the office.

HOW TO REACH: Guidance Solutions Inc., (310) 754-4000 or www.guidance.com

Friday, 25 April 2008 20:00

Out to lunch

If you would have asked Gary Streit a year ago where in town to get your shoes shined, he wouldn’t have been able to tell you. A self-proclaimed outsider, the Virginia native knew very little about Canton, let alone Ohio, before assuming the role of president at Malone College last July.

Because of his unfamiliarity with the institution, Streit didn’t impose his own agenda when he stepped in to manage the college’s 2007-2008 budget of approximately $44 million.

Instead, he did what anyone with an appetite for the unknown would do — he sat down for lunch. Well, make that 10 lunches.

Streit hosted a series of meals during which Malone’s 297 full-time employees shared their concerns, hopes and dreams for the institution. Not only did the hourlong sessions provide the president with an intimate introduction to the college and its constituents, they also set the tone for his decidedly informal style of clear communication.

Smart Business spoke with Streit about how to listen with discipline and how to continuously unlearn that which you already know.

Give people your full attention. I have set up 10 lunches scattered over three months. I go, I greet, we sit down, and, within seven minutes, they get their soup and sandwich. I set it up and remind them of why we’re there, and then I sit and listen to the people talk. I take notes.

Good listening is disciplining yourself to be quiet and to give full attention to what someone is saying. It’s also giving full attention to what is not being said.

I’m hearing a lot of things, and I’m getting some good information, but I’m also getting a lot of good affirmation: ‘Thank you for giving us a chance to talk about the things that are important to us,’ be it a member of the housekeeping staff, be it a security guard, be it a professor of economics, whatever.

At every one of these luncheons, I have a very mixed bag of folk — faculty and staff representing everything from housekeeping to administrative staff. They’re very heterogeneous groups.

This is giving all of these folks at the college a great opportunity to hear other points of view that they often do not get to hear

Share directions before you start the journey. It’s unfair to any member of your executive team if that person doesn’t really know what he or she is being held accountable for. Clear expectations on the front end are extremely important so that everybody knows what’s being evaluated.

One of the biggest problems that presidents face is a lack of clear expectations on the front end as to what that board might expect. Six months into the journey, the president realizes that the board may or may not be headed in the direction that he or she thought the institution would have been headed.

Establish the rules before you start the journey. When you pull out of your driveway, it’s important to know where you’re going on vacation so you know where to turn. You don’t know whether to turn right or left at the stoplight unless you know where you’re headed.

Learn, unlearn and relearn. That concept is really [author Alvin] Toffler’s concept. Basically what he said is the illiterate of the 21st century will not be those who cannot read and write, but rather, the illiterate of the 21st century will be those who cannot learn, unlearn what they no longer need to know and relearn that which is essential for what this world requires.

Our world is changing so rapidly because of technology, this availability of knowledge, this explosion of knowledge and this rapidity of change.

Leadership teams have to get it. That applies not just to knowledge, facts and disciplines, but it applies to protocols and procedures and policies and the ways in which institutions do things.

In higher education, you see a lot of antiquity still operationalized. Nobody can really tell you why we do it this way other than, at some point in the history of the institution, somebody thought it was a good idea.

Every piece of the operation needs to be audited continually. Ask the question, ‘Does it make sense? Does form follow function? Are we administering this organization to meet the needs of the clientele of whom we serve today?’

If institutions aren’t aware that those are the sorts of things that the ‘consumer’ is looking for, you’re not going to make it in the days ahead.

Share the credit. It’s really important as a CEO, as a president, as the leader, to be able to share that success with those persons who actually effect that and make that happen.

You’d better give kudos and accolades where those are due and share that, or you’re not going to inspire, and you’re not going to have much integrity with those folk.

Stephen Covey talks about two mentalities: the scarcity mentality and the abundance mentality. Those who subscribe to the scarcity mentality believe that you’d better hold it pretty close to the vest because there’s not enough to go around.

I don’t believe that. If I brag on you, it doesn’t mean that it’s going to take away from me. Good will and generosity and affirmation beget good will and generosity and affirmation.

HOW TO REACH: Malone College, (800) 521-1146 or www.malone.edu

Wednesday, 26 March 2008 20:00

Tailored to perfection

When you’re interviewing job candidates, Bill Fink’s got one important piece of advice for you: Shut up and listen.

The worst thing CEOs can do is waste valuable minutes championing the merits of their companies instead of vetting the skill sets of potential employees. As founder, owner, president and CEO of Area Wide Protective Inc., Fink has become something of an expert on the subject of interviewing. He’s listened to hundreds of job candidates while increasing the payroll at his temporary traffic control service provider from 139 employees in 2002 to 610 in 2007.

During that same time, he has also asked interviewees a lot of questions. His favorite? “Tell me how you made your last job bigger than how you found it.”

The question not only helps him gauge a respondent’s growth potential, it also introduces that person to an atmosphere of growth that has fueled the company to 2007 revenue of $27 million.

Smart Business spoke with Fink about how to develop a customized training template after you’ve listened to and chosen the best new hire.

Don’t approach training with a onesize-fits-all mentality. A common mistake in business is the notion that one size fits all in training. To me, only the most rudimentary aspects of company orientation are one-size-fits-all.

Past that, training should be customized to the individual, especially at entry-level management positions and above.

What we do is look at the relative strengths and weaknesses of the individual, and then we customize training and orientation to enhance those strengths and bolster the weaknesses.

For example, ‘This guy is a superb public speaker, but he doesn’t have an organized-enough mind. We need to get him into some training where he will be better able to organize his thoughts, his day, his time.’

No two people are alike. No two people bring the same skill set or strengths and weaknesses to an organization, and that’s a good thing. But, at the same time then, if no two people are alike, then no two training protocols are alike, either, nor should they be.

Get buy-in through inclusion. Turf battles within organizations are ridiculous. They waste time, and they’re destructive. The best way to fight that is to be inclusive.

In terms of developing a training template for Joe, new middle manger, I can leave that to the vice president of human resources and say, ‘That’s his turf.’

But if Joe doesn’t become a better time manager than he was when he walked in the door, we’re all going to be looking at the VP of HR and saying, ‘What the hell happened here?’ But if we all bought in from the beginning, then it’s a collective failure, and the turfiness doesn’t manifest itself.

Once (the VP of HR) develops a training protocol for Joe, he’ll present that to us. Then the rest of the senior staff will say, ‘Don’t you think it would be better to dwell on this portion of the training a little more than the other?’

Then there’s buy-in. We’ve all had our hand in crafting the best plan possible.

For the important areas of the company’s future, a collective approach works best and produces the best results.

Encourage healthy debate. Debate is good, and it is not window dressing. I don’t want 100 yesmen or -women.

The first thing is setting sincere and honest ground rules. For most of the employees, even if they’re senior staff members, when the boss is present, the implication is always there that (they’re) really expected to take the boss’s point of view.

I make it clear that at a meeting, ‘Yes, I will make the decision at the end of the day, but for right now, in the course of this discussion, we are all equals, and every opinion is equal. I will judge you more by your ability to stake out and articulate a position.’

Over time, they get comfortable with that and very good and spirited debate follows. From that debate comes invariably the right answer.

Sell change. Selling change effectively to your people is the most important sale that a company makes. It’s not landing the million-dollar account.

What you have to do to sell change is to accurately and passionately portray the features and the benefits of the improvement that will occur once that change is made. Depending on the level of change, speak to the change agents personally. Look at their faces. Answer their questions.

If a physician came to you today and said, ‘You need a total hip replacement,’ he would first have to make a convincing case: ‘The pain you’ve been having, it’s going to get better once the surgery happens. You’re going to have a six-month rehab, but, at the end of the day, you’re going to be able to do more of the things that you want to do, and you’re going to be able to do them better then you did before.’

That’s an oversimplified example, but a lot of CEOs and upper-level management get irritated and angry when their people don’t accept change, and you end up saying something like, ‘This is what we’re doing. Take it, or leave it.’

Sure, you can mandate change, but you’re not going to get the morale and the motivation that you’d get if you effectively sold change. It’s one thing [for your employees] to say, ‘I understand where you’re going here. I suppose I can go along with this.’ That’s not a sale.

A sale is, ‘Wow, you’re right. We really are going to be better off. This really will work.’ That’s the reaction that I want.

HOW TO REACH: Area Wide Protective Inc., (330) 644-0655 or www.awptrafficsafety.com

Sunday, 24 February 2008 19:00

Youth movement

David P. O’Brien didn’t get a chance to slowly acclimate himself to his new job when he graduated from college. He was pushed into the deep end and left to sink or swim. Though equipped with the necessary skills to survive the tasks thrown at him, he could-n’t help but think there was a better way to break in new talent.

Decades later, O’Brien — now president of Oswald Cos., an insurance firm specializing in life insurance, financial services, risk consulting, workers’ compensation and wealth management — is championing a hiring practice that avoids the all-or-nothing approach he had to endure.

“It’s not just, ‘Throw them in the deep end of the pool and see if they can swim,’” he says of entry-level hires. “We wanted to teach them how to swim.”

To do so, O’Brien and his team at Oswald launched the Professional Associate Program. The two-year program puts associates under a mentor in a series of quarterly rotations that encompass ever aspect of the company. This comprehensive orientation not only familiarizes young employees with Oswald’s culture and strategic vision, but its accommodating pace serves as an enticing prospect for the best talent entering the work force.

“We had a firm belief that if we could get young, creative, smart workers, they’ll be around for a long time, and they’ll challenge the status quo of this business and take us to the next level,” O’Brien says.

Since being introduced in July 2004, the Professional Associate Program has affirmed the leader’s beliefs, and Oswald Cos.’ annual revenue has grown 65 percent during the past three years.

Going from implementation to such measurable success isn’t easy. O’Brien says that creating a hiring or development strategy is more akin to a lengthy swim upstream.

Here’s how O’Brien and his team at Oswald introduce new hires to the company — one challenge at a time.

Put a plan in place

Oswald’s Professional Associate Program didn’t begin as O’Brien’s pet project or necessarily as a means to retroactively ease the struggles he had faced upon his own abrupt introduction to the industry. The program began out of need.

A few years ago, the company’s human resources department found itself sifting through a short list of suitable candidates to fill the needs of the growing company. The best candidates certainly had the resumes for the task, but they were often too established and set in their ways to seamlessly buy in to a different culture, strategy and vision.

These managerial headaches sparked an internal dialogue about possible staffing alternatives.

“A lot of us looked at it and said, ‘Let’s develop our own,’” O’Brien says. “‘Let’s not just try to find the best person who’s looking for a job or try to recruit the very successful person who is going to be tough to recruit. Let’s grow our own successful people.’”

He appointed a director of education and business information to lead the initiative, opting for an existing employee who combined an educational background with prior business, management and mentoring experience. To assist her, he also appointed his chief operating officer and human resources manager to the task force.

O’Brien says internal staff members are best suited to handle the initial planning. Whereas a consultant might bring outside expertise, experienced employees have an intimate familiarity with the needs and demands of day-to-day operations, and that knowledge is invaluable when devising a plan comprising the obsessive level of detail that O’Brien demanded from his own team.

“Really develop specifically what you foresee (the young associates) doing for the first two years,” he says. “Be as specific as possible.”

He says a detailed plan acts as a blueprint for the entire program. Like all good blueprints, there will inevitably be some deviations that must be addressed along the way.

“Before we did this, we said, ‘What will happen the first two years?’” O’Brien says. “Some of that we were dead-on right, but some of these things we didn’t move fast enough. Some of them we moved too fast.”

He says it’s important to address such changes and the overall progress of the plan through constant re-evaluation from its authors.

“(The task force) would get together on a monthly basis and really just evaluate how it’s going, what do we need to improve, what’s working and what’s not?” O’Brien says.

Communicate the time commitment

By implementing the plan, O’Brien was forgoing the experience of seasoned candidates in favor of raw talent who would require considerably more training.

“These young people, whereas they may need some more development and molding, you’re better able to develop them,” he says. “That requires a lot of training.”

Training requires a lot of commitment, and it’s something that Oswald’s 225 employees were more than willing to offer. O’Brien says it’s easy to get buy-in simply by communicating how an in-house training and development program can solve pesky staffing woes.

“Very rarely are we saying, ‘We’ve got to get a list of 20 candidates, interview five, do second interviews with three, pick the best one and put them in a spot because we have a need,’” he says. “We just have that person ready to fill a hole when the hole’s going to be there.”

Conveying just how much time participation in the program entails can prove a bit more difficult.

“The real issue was making sure we all understood that this was a tremendous investment of our personal time to develop these folks,” he says. “Time with education, time mentoring, time spent going through a project, and then spending two hours with them after the project to talk about why we did certain things and how we did things and why it’s important.”

O’Brien says the best way to communicate these new responsibilities is to show employees the plan.

“If you just have an idea, I’m not sure you can really put it in front of people and say, ‘You realize the time and commitment this takes?’” he says.

“The key was to have a plan so people could see that this was going to take time. ‘Well, we’re going to have to do these classes. That class is going to take this much time; it’s going to take this much prep time. I’ve got to find a way to create the capacity for myself to do that.’”

No matter how cooperative your staff may be though, there will always be instances when an existing employee can’t devote adequate time to the program. O’Brien says to be accommodating to those needs.

“If they don’t have the time, they don’t have the time,” he says. “You have to recognize that and not just force it because it will fail.”

Seek out the best candidates

Though O’Brien started the Professional Associate Program to avoid tedious hiring practices, he says you must still devote time seeking out the best young candidates on the front end.

“They have to have some natural ability,” he says. “The best skill sets are still going to rise to the top.”

Before you start skimming talent from the top, O’Brien says you must first devise a solid recruitment plan. Prepare a detailed job description and outline of the program — as outlined in the original plan — to present to potential candidates. Then, identify a number of arenas in which to focus your recruitment efforts.

O’Brien’s task force approached a number of area universities, specifying what it was looking for in terms of curriculum qualifications. The task force also went to a number of local job fairs, such as (i)Cleveland, where it eventually found Oswald’s first recruit.

Since that time, the program has essentially become a self-serving entity subsisting off of contacts from existing young associates.

“Now, the recruiting class comes from our past recruits,” O’Brien says. “A candidate comes in with some knowledge because a friend or an acquaintance or an associate has been here, and they’re excited about it because they’ve already heard about it from someone who went through it.”

The process has become so effective that O’Brien and the task force now charge existing young associates, with supervision from the HR manager, with hiring potential candidates.

“They know what it takes, so they can really scrutinize,” he says. “We put a lot of weight behind our people who have come through the program to identify candidates for it.”

In addition, O’Brien says this added responsibility is a great way to foster ownership and get buy-in from the associates.

Mold associates through experience

One of the biggest advantages of the program is the candidates’ lack of experience. Whereas industry veterans may exhibit a stringent allegiance to familiar behaviors, entry-level hires can more seamlessly align themselves with new strategies or visions.

O’Brien and his task force understood this potential and literally set out to teach their young associates the Oswald way of thinking, much of which was accomplished in a traditional classroom setting.

“We have an actual class on our values and our mission statement, culture, and our history,” O’Brien says. “We wanted to have some basic classroom education just to make sure they’re getting a good foundation of the specific, technical nature of our business.”

Some of these courses were taught by Oswald employees who could comfortably speak on given areas of expertise.

Other opportunities arose through outside educational opportunities within the industry.

“We do utilize outside opportunities within the insurance industry, so there may be an insurance company intensive two-week program we’ll send these people to,” O’Brien says.

Whatever the case, O’Brien says it’s important to invest the time and money in this area of training. Not only does the classroom piece bring young hires up to speed, but it also serves as a perfect opportunity to communicate specific company goals and values.

Still, only so much can be taught in a classroom. To gain the necessary real-world experience as well as a better understanding of the company itself, Oswald’s young associates participate in quarterly rotations in different areas of the firm.

“We have a two-year rotation where we get people working for 90 days at a time in different specialty practice areas of our business,” O’Brien says. “Our younger people, who ultimately are going to develop an area of expertise, first develop great peripheral vision and breadth of understanding of the company.”

Within those rotations, associates work side by side with a designated mentor who oversees their progress and growth. O’Brien says to continually underscore the importance of that relationship with the mentors, the mentors are the ones who are charged with the development of each associate, and, in turn, the long-term success of the company.

O’Brien also designated his director of education and business information as the head mentor to gauge associates’ overall development, collect feedback and solve any problems that might arise within a given mentoring relationship or rotation.

But for as much emphasis as O’Brien places on education, rotations and mentoring relationships, he says the success of the program ultimately comes back to commitment.

“I would absolutely accentuate that you have to be committed to making the investment in these people, and you have to stick to it,” he says. “It is an investment of time — probably more so than people will think initially — but the return will be there.”

HOW TO REACH: Oswald Cos., (216) 367-8787 or www.oswaldcompanies.com

Tuesday, 29 January 2008 19:00

Found in translation

At a loss prevention seminar a few years ago, Dennis Astorino learned of a horrific architectural accident.

A beam at a Chicago-area structure had failed, resulting in a needless death. But instead of assessing guilt and blame, the project’s architectural and engineering firms took immediate action to make sure the building would be safe for future occupants. That kind of proactive response can make all the difference in solving problems, Astorino says. As president of architecture and engineering and CEO at Astorino, a 191-employee, Pittsburgh-based architectural design firm, the leader’s head-on approach to problem-solving has paid off: The company’s 2007 revenue was $40 million, up from $37 million the previous year.

Smart Business spoke with Astorino about how to use different “languages” to pro-actively address the needs of your clients.

Communicate using different languages. You need to state the message that you’re trying to communicate to the client in a number of different languages. Restate the message over and over again from a number of different points of view so that you can manage the client’s expectations through communication.

Just because the client will shake their head and say, ‘OK, I understand,’ that’s not enough. I want to make sure that they really do understand or that we understand what their concerns are.

Keep asking the questions in a number of different directions so you understand what the client’s needs are. Ask the question one way, and come back and ask it again. Then I like to put it in their words and give it back to them so that we’re all understanding.

Every client is different — just as we’re different as human beings. You have to understand the client as a personality.

Try it from a point of humor. You can try it from a point of being serious. You have to explore all of these different pathways to truly understand the client.

At the end of the day, the most important thing is to manage their expectations. You want that client to say, ‘Boy, that’s exactly what you told me it was going to be, and you listened to me because this is exactly what I wanted.’

Exceed expectations. It’s important to try to help clients understand their business and actually to make their business better. We deal with healthy buildings all the time. If we can create a building that’s healthier, and you can have less absenteeism and less sick days and it’s a healthier environment to work in, it’s going to increase productivity. That’s a positive thing for a business.

As experts, we want to give that advice to our clients. I challenge our staff not to stop and just accept everything that (clients) are telling us and continue to look for better ways to do things.

The end benefit is a happy client that’s working in an environment that’s productive and exceeds all kinds of expectations.

Encourage input. You must encourage the staff to communicate freely without concern or fear of punishment.

One of the things that I do here Mondays and Fridays, we have a design review where we put up projects — they’re internal, and anybody can come to them — and we just talk about issues.

We sit there, and someone goes through their design thoughts, and we critique them, and we go through them, and we talk about them.

You encourage that, and you foster that. That really helps. (Employees then) become part of the process. People want to feel valuable with their ideas. You want to encourage their input, and you want to nurture their creativity.

Avoid certain comfort zones.

Never find a comfort zone of putting issues off and missing deadlines. I’ve seen it happen too many times, where you may miss a deadline, and you make it by. Somebody goes, ‘Ah well, it’s OK,’ and you put an issue off that you should have addressed.

If you put it off, maybe it will go away if everybody’s real quiet. If you get into a comfort zone of allowing that to happen, eventually, it will be absolutely disastrous.

Practice clock management. You need to manage your internal clock in assessing how long it may take to accomplish a task. You’ve heard it a million times: It always takes longer than you think it’s going to take. Try to really understand how long you need.

You have to be realistic about it. I see sometimes that people aren’t realistic about it. Forgive the cliché: Their mind is writing checks their body can’t cash. You have to understand that.

That is something that comes with experience, obviously, but even experience sometimes is not enough. I see people who have worlds of experience but still can’t figure out how long it’s going to take to do a task.

(Encourage) them not to be fearful of saying, ‘I can’t do this,’ or, ‘I don’t have enough time to do this,’ or, ‘This is what I need to do this.’ There may be a multitude of reasons, but you have to stress upon individuals to be open and not fearful of telling somebody their limitations.

When (they) don’t know something, encourage them to ask questions, to get help or to talk to somebody who might have more experience about how to manage that situation.

It’s to our benefit if that person is successful and learns and grows.

HOW TO REACH: Astorino, (800) 518-0464 or www.astorino.com

Tuesday, 29 January 2008 19:00

Pieces of the puzzle

Have you ever tried putting a puzzle together, only to find that you don’t have all the right pieces? Depending on how much time you’ve put into the process, the ordeal can certainly prove frustrating — even more so when many people have contributed.

That was the case for Mike Watts Jr., who, as president of Astro Manufacturing & Design, saw business constrained by erratic inventory management.

When producing a patient couch support for Philips Medical Systems’ CT scanners, for example, Astro’s employees engaged in a complex manufacturing system that included 38 separate parts. Managing the inventory of so many parts can prove difficult in its own right, but this particular task was made especially difficult because most were manufactured by more than 25 outside suppliers.

With so much to coordinate, production routinely sputtered to a halt when a necessary piece or part went out of stock. This problem was only exacerbated in a fluctuating customer forecast that changed on a literal day-to-day basis.

To combat this problem and make sure employees had all the pieces of the puzzle to work with from the onset, Watts implemented a replenishment system using color-coded tags to track inventory on a real-time basis.

The new process was implemented by stocking inventory in a three-bin system, with each bin designated as green, yellow or red. Stock is first pulled from the green bin, then yellow and so forth. The color-coding provides an easy way to track inventory consumption and signal when new stock should be purchased.

The green bins, for example, denote a comfortable amount of inventory. When employees start pulling from the yellow bin, production is tracked more carefully and plans for future purchases are put in place. When inventory is taken from the red bin, the appropriate amount of inventory is purchased based on the plan that was devised a step earlier.

When properly balanced, Astro maintains the right amount of inventory and consistently finishes every “puzzle” with 100 percent on-time delivery.

HOW TO REACH: Astro Manufacturing & Design, (888) 215-1746 or www.astromfg.com

Wednesday, 26 December 2007 19:00

Charles J. Dougherty

Celebrate success and you may surprise yourself in the process, says Charles Dougherty, president of Duquesne University. Every April,

the nationally recognized scholar asks his team of deans and directors for a list of their yearly accomplishments. And every May, he is

astonished when the responses come in. Though Dougherty employs a variety of communication tools to tap into the pulse of the university,

he is always surprised by the breadth of success that results from 2,700 creative employees and an annual budget of $205 million. Those

results reaffirm the mission and a collective sense of progress, Dougherty says, and he shares them at the school’s annual convocation to

close each year. Smart Business spoke with Dougherty about e-mail, Einstein and how to get input during strategic planning.

Be receptive to various forms of communication. We have a lot of communication

tools these days, everything from formal

memos to e-mail. E-mail has become quite

democratic in the sense that a sophomore

history major has no compunction in writing the president of the university and

unloading about what’s on his or her mind.

I’ll get reports of votes from a department meeting, or I’ll read the minutes of

a school committee on something and

begin to see where the drift of opinion is

going on certain topics.

I try to make myself present on campus. I literally walk around a great deal,

allowing people to stop me and tell me

what’s on their mind. It’s important to

the person who just told you something,

and it puts a real face on who we are.

People feel closer to the strategic direction of the university when they walk past

and think, ‘There’s the president,’ and particularly if they can stop and say, ‘You know

what? I was sorry to hear that we’re doing

X, Y and Z,’ or, ‘I was hoping that maybe we

would take this opportunity to do one, two

or three.’

Stick to the plan. Strategic planning is one

of my most important jobs. What’s

important is to make the plan real.

We have a detailed implementation

document. We know at any given time

who’s responsible for what. We have a

sense for the cost of the things we want

to achieve. We have timelines.

We revisit that on a regular basis. We

sit down and look at that, making sure

we’re still on board for achieving what

we wanted.

First of all, it reinforces the overarching

vision. Where are we trying to go? What

are we trying to achieve? The second

thing is, when you’re actually working on

the plan, and you can show people successes relative to the plan, there’s a real

sense of forward motion. People feel like

that’s what you said you were going to do.

Get input while planning. Many plans

begin as a shopping list: Everybody has an idea, and the ideas all get listed.

At one point (during the planning

process), we hadn’t made what I would

regard as hard decisions, which is to say,

prioritizing certain areas. No one wanted

to say, ‘My area was more important

than someone else’s area.’

So I asked everyone to give me a list of

the top 10 strengths of their programs.

That gave me then 100 strengths. I

reordered them and organized them, and

I showed that there were five or six

areas identified as strengths. Therefore,

they were university strengths.

From that, we took some areas and

said, ‘Over the next five years, we’re

going to emphasize ethics, we’re going to

emphasize leadership ...’

(It’s) democratic in a way. Everybody

had input. We got a long list of things

together but then had to make some choices about which were going to be priorities.

Don’t overrationalize. It was Einstein who

said that if we were fully rational, we’d

never make a decision — we’d always

wait another day hoping for more information to come in.

We can’t do that. Events will shape us if

we don’t make decisions. There comes a

point where you simply have to say, ‘I

think I understand enough. I think I’ve listened enough. I think I’ve heard sides of this, and a decision simply has to be made.’

You can’t paralyze yourself with trying

to get facts if a decision needs to be

made. You either make the decision, or

you lose the day.

Be receptive to criticism. If I’m moving in a

direction that is not likely going to work

out for what I want, then I have somebody

else who can tell me that and can do that

without fear of negative consequences.

No one likes to be told they’re making

a mistake, but a leader has to have people around them who are capable and do

that on a regular basis. In any complex

organization, every leader makes some

mistakes.

It starts with not overreacting when the

person brings you a problem, particularly

an unexpected problem and a bad one.

One of the things I learned from people I

believe were effective leaders was, when I

came in with a crisis, there wasn’t screaming, there wasn’t yelling and there wasn’t

blaming. There was cool, calm deliberation about how do we move out of this crisis and repair the situation.

Try to do that. Try to contain emotions

when there’s a problem of that sort. That

builds a kind of trust that allows somebody to say, ‘You know what? I told him

that last week, and we’re still friends. I

think I can tell him he’s making a mistake this week, and we’ll still have an

effective working relationship.’

Recognize success. There are so many

people doing creative things at various

levels that I find it useful to drop a handwritten note to somebody congratulating

them for something. Send them an e-mail.

Call (them) up and say, ‘I heard you

just published a new book. I’m looking

forward to seeing it. Congratulations,’ or,

‘You were named employee of the year.

I’m looking forward to acknowledging

you at the convocation.’

Those little acknowledgements to people mean a great deal.

HOW TO REACH: Duquesne University, (412) 396-6000 or

www.duq.edu