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Dr. Robert Corrato founded Executive Health Resources in 1997 as a small start-up built around the concept of medical compliance solutions to hospitals.

Corrato’s new company created its own niche, which allowed for a highly entrepreneurial attitude within the organization. The rules weren’t set, the boundaries weren’t drawn, and Corrato was allowed a blank canvas on which he and his staff could create and innovate.

But in the ensuing 14 years, the game has changed. EHR’s leadership defined operational processes to guide the company as it grew to 1,600 full- and part-time employees. Through necessity, EHR became more operational in nature.

But innovation is what built EHR in the first place, and Corrato wasn’t eager to let go of the freedom afforded by an innovative culture. The expanding company needed a sense of order, but in order to keep growing, Corrato still needed to keep an innovative mindset at the forefront. He needed two mindsets, often divergent, to exist in the same culture.

“Oftentimes, the competencies that are required to be entrepreneurial and start something up are different from the competencies needed to scale an organization as it grows over time,” says Corrato, the company’s president and CEO. “With that in mind, probably the toughest personal challenge I have faced here has been changing with the dynamic needs of an organization in different iterations of growth. It has been a tough challenge from a learning perspective.”

Corrato has constructed components within his organization that focus individually on the innovative and operational elements of the business. But he also needed to figure out a way for the two components to develop a symbiotic relationship — the innovators offering ideas to the operators and the operators offering structure to the innovators. It has required Corrato to define the company’s culture in specific terms, hire people who can help promote the culture, and ensure that there is a system through which the innovators and operators can collaborate.

Define the culture

Like most young businesses, EHR’s culture wasn’t designed at the outset. It took a number of years for the culture to evolve and meet the needs of a company with rapidly accelerating growth.

In the early days of the company, Corrato and his staff focused on building up a core of industry knowledge, then listening to clients, responding to their needs and providing services to meet those needs in the most efficient manner possible.

“First and foremost, you have to build a deep expertise and knowledge in your space, and you have to initially keep your nose to the grindstone, listen very carefully to the clients you have been able to engage and cultivate those early adopters,” Corrato says. “Then, you have to couple that momentum with your deep knowledge of the industry to continually refine what those services or product offerings are going to be. Once you have a good concept of what the service offerings need to look like, you then need to say ‘OK, if we are going to be able to provide these services with excellence, and do it to a large marketplace, how do we take the best of what we do and scale it in a way that ensures a consistent, excellent approach?’”

Over the years of shaping and reshaping EHR, Corrato has learned that a successful company’s culture revolves around three tenets. Employees need to believe in the value of their company’s purpose, there has to be a defined business case backing up the purpose, and employees have to extract a sense of enjoyment and satisfaction from their work. Without those three factors in place, it becomes difficult for a culture to sustain itself.

“It is a daily tactical initiative,” Corrato says. “It is very easy to have the right rhetoric, but if the people in the organization don’t see you, as the leader, living that every day, you can run into problems. Living it can be as simple as you’re walking down the hallway, you see a piece of paper on the floor and you pick it up because you’re proud of the way your office looks. It can be on a large scale, like ensuring that you’re there every day to support every person in the organization, whether they’re in marketing, account management or whatever component they might be in. If you’re willing to be tangibly available and a presence, that is the first step in getting to those three tenets of a good culture.”

Without your actions, your words become hollow, and the cultural seeds you’re attempting to plant will never sprout.

“This is an exhaustingly important job, because if you don’t do it, and keep doing it, it simply becomes rhetoric,” Corrato says. “And people are smart. If they hear rhetoric and don’t see the actions to match it, all faith is lost, and the foundation on which your organization should be supported begins to crumble away.”

Put people in place

From the start of the recruiting and interviewing process, Corrato wants the people who come through the door looking for a job at EHR to understand the company’s culture and what is expected of team members.

If you want your culture to embrace specific cultural tenets, you need to ensure that you’re bringing aboard people who can embrace and advance the culture.

“The last thing we want to do is take the time and effort to recruit and interview, and then bring the wrong person into the organization,” Corrato says. “It is much harder to do that than to prevent it from happening in the first place. That is why you need to develop a thoughtful, detailed recruiting process that allows the individual to learn about the organization along the way.”

Having a good recruiting process begins with having good recruiters. At EHR, members of leadership from the various departments meet with job candidates to explain how the company values both innovation and operational stability, and how it plays into that particular field.

It comes back to organizational connectedness. Your hiring process can’t be completely separated from your daily operations or the areas that will thrive on the ideas that new employees will bring to the table.

“Your recruiting can’t be disconnected from the operations and everyday goings-on,” Corrato says. “The folks who are leading various units of the company also have a role on their team as input into the evaluation of those coming into our organization. It is a good and structured approach that brings in the subject matter experts in our organization to do an evaluation of the individuals who come into the organization. The connection is important to have. If that’s disconnected, then you will find that the folks who are going to be working with the new, recruited individual may find that they have made a misstep in hiring, and that goes back to the fact that it’s much harder to correct a misstep than to make the right hire in the first place.”

Get things moving

If you’ve defined a direction and built a work force that can help support that direction, the question becomes, how do you get to your goals?

At EHR, this is where the question of innovation versus operations became prevalent.

“It is a classic dilemma of how do you take an organization that is very scaled and detailed, and how do you interject the ability to create innovation,” Corrato says. “It’s a constant dilemma because they are very different processes. The operational process is one where you’re measuring on a daily basis what you are doing and honing the operational machine. Innovation, on the other hand, is more of an approach that is centered on projects.”

Corrato’s solution was to break the innovation out from the operations. He set up innovation teams to produce ideas for new products and services. The ideas are pieced together by the teams, and then presented to the heads of the operational aspects of the organization for review. It begins a back-and-forth process between the innovation and operations sides of the business, that will, over the course of several rounds, refine an idea into a product that can be rolled out to customers.

“The key is to develop these processes within the organization that allow for the development of innovation, but very closely feed the ideas back to the operational organization,” Corrato says. “If you have an operational organization and try to have those people innovate, you will find that there is always a reason why the operations need to come first. There is always something that will have to be an operational priority, and it will get in the way of that innovation component coming first. That is why you need to segment that innovation aspect out in your organization, but have it connect back to the operational areas when the time is right, given the level of development of the innovation.”

The innovation and operation aspects of EHR have also developed a mutually beneficial working relationship because all areas of the company are narrowly focused on a set of end goals. The operational heads do not hinder the creative process of the innovation teams, but the innovation teams also have a responsibility to stick close to the organization’s mission and purpose with the ideas they create.

Stay focused

Innovation needs to work in harmony with operations because innovation needs to help propel you toward your goals. You need to keep your innovative minds centered on your purpose and mission. If you ever need to move away from your mission, that has to be a decision that comes from your head office, not from an idea generated down the ladder.

It helps if everyone in your organization, whether they are idea generators or process managers, stays in touch with the market and understands what customers want and need, and how you can best serve those needs. In a nutshell, you have to know what you do well as a company and constantly try to figure out new ways to leverage that set of core competencies.

Corrato says it’s a matter of going deep versus going wide. Companies that go deep strive to become experts in a narrowly defined area. Companies that go wide are constantly probing for new areas to develop, which may offer a more comprehensive set of products or services to clients, but may also force the company to sacrifice expertise in a particular area.

“I’ve heard a number of folks say that no company has ever gone out of business by focusing,” Corrato says. “So that’s why it’s critical to focus on the market and services, and what your clients need. Once you’ve done that, if you want to grow, you need to assess whether the market is expansive enough to allow for the scaling of an organization. Not every company has to be a large, scaled national organization to achieve success. But once an organization decides the track it wants to take, then you have to create a repeatable, standardized and scalable approach that will result in A-plus service.”

With new ideas coming from your innovation teams, you have to weight the positives and negatives of each and project the ultimate benefit to your company. Again, you come back to finding a balance between innovation and operations.

“If you have this amazing new opportunity, what is the opportunity cost?” Corrato says. “If the cost of going wide allows you to lose an opportunity that is right in front of you and has a lower cost to attain, depth would probably come before breadth. But if you’ve already saturated and solidified your current market and it is now time to look at adjacencies, to expand your offerings, you can create the opportunity to upsell to a satisfied client base. It’s really about the pros and cons of wide versus deep, given where you’re at in your current market.”

How to reach: Executive Health Resources, (610) 446-6100 or www.ehrdocs.com

The Corrato File

Name: Robert Corrato

Title: President and CEO

Company: Executive Health Resources

Education: Biology and psychology degrees, La Salle University; MBA, Wharton School of Business, University of Pennsylvania; M.D., Medical College of Pennsylvania

What is the best business lesson you’ve learned?

To create a business case for the Golden Rule — treat others as you would want to be treated. Always keep in mind doing the right things for the organization, and everything else falls into place. There is definitely a business case for doing the right thing.

What traits or skills are essential for a business leader?

First and foremost, honorability. You have to be honest. You also have to be able to take your vision and instill it in others, and instill confidence in the vision.

What is your definition of success?

My ultimate definition of success is when people are proud of the organization. If you have that and a culture that supports that, you have the foundation of a strong organization.

Published in Philadelphia
Sunday, 31 July 2011 20:01

Kelly Borth; Leading Results

At the recent strategic planning discussion that I facilitated for the Entrepreneurship Institute’s Columbus President’s Forum, several of the 40 top leaders of companies who attended were either going through or had recently been through the strategic planning process and were stuck on how to implement the plan.

It was a question — and a frustration ? around execution. Here is some insight on how to get from vision to execution.

Getting to halfway

Based on my personal experience of participating in more than 30 strategic planning discussions for nonprofit groups, trade organizations and business advisory boards during my 35-year career, too often the strategic planning process stops when the four-hour or so “planning retreat” ends. We walk away with a strategic direction and the facilitator’s documented notes, but due to time, we do not finish the planning process.

To finish requires that we establish action steps, determine resources and responsible parties and define how we are going to measure progress and celebrate our success. Sure, getting through the first half feels a lot like running a marathon, but you’re only halfway there. To finish takes one or two additional four-hour sessions. It is the second half that we never get around to. To move on to execution we have to address some issues.

Changing vision into action

Most anything can be made to happen if it is broken down in bite-size chunks.

You’ve finished the visionary portion of the strategic planning process and now you need to translate that vision into a list of action items in order to realize that vision. Identifying action items is an exercise in prioritization. Understanding the tasks at hand helps leaders and managers have a clear perspective of order and what realistically can be accomplished with the existing team and workload.

Who and how much?

Assessing available resources — human and financial — will drive how quickly an organization can achieve its end goal.

Does the needed talent exist within the organization or does it makes economic sense to “hire in” or “hire out” the expertise? If the talent exists, how can workload be shifted to allow for time to focus on these new initiatives?

It can also be a question of available budget or cash needed. Understanding resources needed to get the job done helps leaders and managers define who will do the work, how much can be accomplished and how quickly.

Measures of progress and timelines

In successful implementation, timelines are not always met. Often, unexpected interruptions occur — some of which are not under our control. If there are mission critical timelines to reach, focus on those.

Establish measures of progress or milestones and adjust as needed in order to achieve those critical deadlines. For initiatives that are more quality-driven, you may have to adjust the timeline several times. In either case, establishing milestones will help responsible parties determine the right course of action to take as you drive the execution process.

Posturing for execution

If we, as organizational leaders, have led our teams through the second half of the strategic planning process, the path for execution should be well-paved.

Along with our managers and associates, we have worked through the critical thinking needed to understand how we get to the end goal. We have removed all known obstacles and provided the necessary resources to accomplish the action steps by the required timeline. We have a clear plan with the proper leadership in place to carry out our organizational mission.

Celebrate the accomplishments

As a part of your planning process, define with team members what their accomplishments will mean to the organization and plan for how they will share in that reward.

Then dance in the end zone.

Kelly Borth is CEO and chief strategy officer for GREENCREST, a 20-year old brand development and strategic marketing firm that turns market players into market leaders. Kelly has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 25 certified brand strategists in the U.S. Reach her at (614) 885-7921 or kborth@greencrest.com, or for more information www.greencrest.com.

Published in Columbus
Sunday, 31 July 2011 20:01

The Power of Planning

Studies have shown that only 3 percent of people around the world write their goals down on paper. However, that 3 percent is more successful than the other 97 percent combined. Think about any winning recipe, whether you’re trying to grow a company to new heights or baking a cake. Without a strategic plan and goals to meet along the way, you’re much less likely to reach them if you don’t write them down and keep track of them. Strategic plans take time, effort, research and people to monitor and drive them forward. You can’t simply devise a plan and then not reference it. You must constantly be checking your progress and making sure you are on track to accomplish what you set out to do. Below is a sampling of what three CEOs previously featured on the cover of Smart Business Pittsburgh had to say about developing strategic plans.

“You have to look at where you want to go and what you’re trying to strive for your business to achieve. It comes down to being able to pick and choose where you want to spend your money and where you want to spend your resources and you really have to do your homework to make sure that you’re making the right decisions.”

Michael Fetsko, formerly of Bombardier Transportation. Currently VP and GM of frieght pneumatics at Wabtec Corp.

“Once a strategic plan is in place, it is to your advantage to continue to follow and update that plan. It requires an individual in the company to have responsibility for that plan and have responsibility for making certain that everybody’s working toward it. Finding the time to work on the longer-term strategy takes a lot of discipline.”

Jack Ouellette, president and CEO, American Textile Co.

“Make sure you have a very strong strategic plan. It’s got to have … your diligence plan, your integration plan and your plan going forward. You need to be able to know what you can do internally from an organic standpoint or what needs to be looked at outside of your current organizational set up.”

Stan Hasselbusch, president and CEO, L.B. Foster Co.

Published in Pittsburgh

Scott O’Neil had moments during the launch of MarketSmith where he just felt completely lost.

“I’ve been in a few meetings where they bury me and I just say, ‘Please, just draw me a picture,’” says O’Neil, president of the 200-employee investment research firm.

MarketSmith is a wholly owned subsidiary of William O’Neil + Co. and has developed the next generation of the company’s popular Daily Graphs Online investment research service.

“The launch was very professionally done, but it was nerve-wracking,” O’Neil says. “It was tough launching a whole new major product like that.”

The biggest challenge in launching a new product is figuring out when you’re ready to unleash it on the world.

“They always want a little more time to make sure fit and finish is really good and solid and tight,” O’Neil says of your product team. “You kind of have to force them with deadlines. So there is that tug of war. When you get down to that moment, if that product is not quite ready and you launch, you’re going to pay in multiple ways.”

So what steps can you take to make sure your product is actually ready to be launched? You can start by getting a number of different people to test your product.

“We would take it out of the technologists’ hands and put it into a business analyst’s hands on their desk,” O’Neil says. “They would work it and they would try to break it and give it the going over.”

It’s important that some of these people that you have testing your product are people from outside of your primary circle.

“It never hurts to get a fresh opinion or an opinion from the outside,” O’Neil says. “For instance, a couple times over the years, I might find someone that is much more my senior that has just been in business longer with lots of experience. I’ll sit down and have a cup of coffee.”

It can’t just be you judging whether your product is ready and it can’t just be your cronies who can be counted on to praise every word that comes out of your mouth or every product that you develop.

“It’s impossible for an individual to be an expert in numerous different fields,” O’Neil says. “If you have a team and it’s a high-caliber team and there are experts in various fields, you are significantly stronger as an entity.”

As you’re getting feedback from people, if it differs from your expectations or if you find that people don’t necessarily love what you’ve come up with, don’t just dismiss it in favor of your own idea. Your people have to believe they’re not wasting their breath by offering their opinion.

“That boosts morale and gives them tremendous energy to really want to accomplish something,” O’Neil says. “Then of course, the person that sits next to them sees that person and they say, ‘Gee, coach. Give me the football and let me run.’”

Of course at some point, you need to stop fiddling around and either launch your product or try something else.

“At a certain point, you have to draw the line on what’s going into the product and just launch it,” O’Neil says. “You have to say, ‘I’m sorry, you’re going to have to wait for the next bus and that will be version 1.5.’”

If you do it right and take the right amount of time to plan, you should have a solid launch.

“Absolutely in spades I’ve seen this where we were prepared for a lot of road bumps when we launched and we really didn’t have very many because of all this front-end preparation,” O’Neil says.

Engage your team

Scott O’Neil doesn’t want to make every decision at MarketSmith. If you are making every decision in your business, you may be headed for trouble.

“You have to push authority down and I mean far,” says O’Neil, president at the 200-employee investment research firm that is a wholly owned subsidiary of William O’Neil + Co.

“I don’t mean just down a little bit. In the end, you have to trust people that they will accomplish the task. They have to believe they control their destiny.”

O’Neil talks about the work environment at MarketSmith on a regular basis. He wants work to get done, but he wants it done in a way where everybody is taking part in the journey.

“Create an environment that is conducive to everyone’s growth,” O’Neil says. “Your company will grow and your customer base will grow. Another very important point. You want positive, can-do people. Cut loose disruptive, negative people. You don’t have time for that. They’re infectious. Over the years, I’ve removed two individuals for general negativity. I’m not proud of that, but that was the reason.”

O’Neil says it’s the failure to involve others in your business that dooms many leaders.

“They don’t always listen,” O’Neil says. “I can tell you probably over half the decisions in this company, I’m not making. I don’t make them. We’ve got a lot of competent people and they are out there doing it.”

How to reach: MarketSmith, www.marketsmith.com

Published in Los Angeles

The ultimate life challenge for most leaders is how to balance home and work — especially with today’s demanding travel schedules. While we are chasing urgent business goals, we often lose sight of the truly important priorities of family, faith, and friendship.

Are we doomed to workaholism as we labor to ensure our company’s success? Or, the flipside: will we never advance in our corporate world if we put family first? I don’t think so.

After many, many years at this, I conclude: There is no such thing as work-life balance — and that’s OK. We live in a constant state of imbalance. Life and work events necessitate elasticity in our time and attention toward each. The key is to know where you are on the continuum of imbalance and to be proactive in managing through it.

On the work side, you may face weathering the largest economic downturn in our lifetimes, managing through a merger or acquisition, developing a proposal that might double your company’s size, supporting the leadership of the nonprofit board you sit on, or managing through a difficult time. Each of these demands extra hours, conference calls, and endless days. These are all but guaranteed to impinge on your personal or family time.

Similarly, on the “life” side, you may face the sudden or prolonged illness or death of a parent or child, helping your teenager navigate a difficult time, or supporting a close friend who has encountered a tragedy. Each can demand a sudden or prolonged time away, such that you need others to cover for you. You also need to honor less-urgent but highly important things like your son’s little league championship or your daughter’s dance recital, or a long-planned family vacation, regardless of conflicting business demands.

These tugs and pulls define the ebb and flow of our lives — and that’s a good thing. It will always be this way. The key is to have strategies to deal with it successfully:

Take care of your physical and spiritual health. Commit to sleeping, eating healthy, and exercising. You must be healthy, both physically and emotionally, to be at the top of your game. If you don’t take care of your body, then where will you live?

Get ahead of your schedule by prioritizing your time. It’s one thing to manage tugs and pulls, but it’s another to be the caboose getting whipped around because you’ve lost control of your schedule. Work closely with your assistant or teammates to ensure everyone is aligned on where your time should be spent.

Know who your A-Team is at work. Tell them about both the business priorities and your personal commitments. Enroll key people who can help you seamlessly cover work needs when your attention must be elsewhere.

On the home front, recognize your unsung heroes. Devote special attention to your spouse/partner/parent who sets the tone for how your children and others understand the demands of your job and your absence from events. Recognize the huge impact your work challenges have on your unsung heroes, and how hard they work to help hold everything together. You cannot thank them enough.

Remember that what we sow, we reap. So, model your support of others when their work-life imbalance shifts unexpectedly. In doing so, you are demonstrating how others can help you do the same. Because you bring passion to both your work and life, and bring your A-game to the table every day in all that you do, you will inevitably emphasize one over the other at times, thereby living fully into your work-life imbalance. But that’s a good thing. Just know its happening and plan accordingly.

Leslie W. Braksick, is co-founder of CLG Inc. and author of Preparing CEOs for Success: What I Wish I Knew (2010) and Unlock Behavior, Unleash Profits (2007). Braksick advises top executives, their leadership teams and boards of directors on issues of strategy execution, leadership effectiveness and organizational performance. She can be reached at lbraksick@clg.com.

Published in Pittsburgh

The economy is slowly improving, and you’ve decided the time is ripe to realize your dream to begin a second career. Or perhaps you’re already retired and are eager to turn your hobby into a business. So, what now?

First, do your research. While banks are eager to lend, you’ll need more than just your passion and great ideas to get started. It’s more important than ever to have a strong understanding of the opportunities and industry, a thorough business plan, a solid financial background and a realistic evaluation of your chances for success.

Once you have your bearings, talk to an expert. Those aspiring to an “encore” career can benefit from the advice of Carol Ball, a former day-care center manager whose second career has been the Cleveland-area C.J. Henry & Associates Counseling Center she has co-owned for the past 20 years. Back then, she didn’t go to a bank loan officer but a business acquaintance who looked over her figures and said the center wasn’t financially viable.

“Luckily,” she says, “my spunky Welsh husband and I concluded that we would make it work.”

They rented a suite with two offices for $237 a month and paid the rent from their consultancy fees.

Today, the 66-year-old grandmother of nine says she would seek a bank loan to purchase the space. She notes that since 1991, the center has paid a lot of money in rent that could have gone toward purchasing the suites and seen them appreciate in value.

Ball says she has gained a broader perspective of how a bank can help a small business grow. The counseling center has increased to 11 counselors from two, and last year it handled 6,000 counseling sessions. Its counseling specialties have expanded, as well. The center grew so much that Ball and her co-owner sought a loan to rent two other office suites to handle the workload.

They came to PNC, where a business banking officer looked at their financial picture and their growth, as well as their projections for future income growth to support the expansion. The officer visited the counseling center and the additional office space, examined the quality of the counseling staff and, within two weeks, developed the lending package.

For second-careerists mulling the plunge into a new business, here are several tips that Ball and PNC offer:

  • Assess your experience in the industry you’ve chosen. Conduct as much research as possible, making sure you determine your competition, the demographics of the area in which you will locate, and how you will differentiate yourself.
  • Have a thorough business plan. A bank will want to see three years of projections. Recognize, too, that it can be challenging to get a loan for a startup business right now so the more prepared you are, the better.
  • Ensure you have plenty of anticipated cash flow. Do you have enough cash in reserve should the business start off slower than you anticipated? It’s important to have at least one year of living expenses, especially if you have a mortgage.
  • Make sure your personal finances and credit standing are in good shape. Both will be important to the bank considering your loan application.
  • Consider working with the Small Business Administration. Ask your local banker if you qualify for a loan offered through the Small Business Administration. SBA loans can serve as a valuable financing alternative. They also offer a variety of tools and resources to help businesses succeed.

Remember: If you ensure your dream of a second-career is based in reality, you’ll be better positioned to achieve your encore performance.

Heather Dodig is vice president, business banking officer, PNC Bank, in the Cleveland area. 

Five tips on growing your business

If you believe now is the perfect time to expand your business, consider these tips to achieve that growth:

  • Crunch the numbers. If you plan to purchase capital equipment, review the numbers. You also may want a contract in hand. A letter of intent could pre-qualify you for a loan, but unless you have an actual contract, your bank may hesitate to provide funds.
  • Update your business plan. If you want to open a second location and need funding, your bank will want to see as detailed a plan. Be sure to look several years ahead to project realistically your income, expenditures and growth.
  • Do your research. Just as you did when you first began your business, look at your competition, service area and the changing demographics of your market. Conditions likely have changed in your region since you last created a business plan.
  • Investigate specialty lending programs. Check with the Small Business Administration to see how it can help — not only financially but also in terms of research and current business information. Talk to your bank about other government programs that may be available for your project.
  • Get the most out of your business today. By meeting with your banker, you can determine whether you’re maximizing your cash flow and other money-saving tools, such as treasury-management solutions, workplace banking offers for your employees and other available rewards.

Published in Cleveland

When David Lingafelter became president of Moen Inc. in late 2006, the flow of prosperous times had been replaced by a plug of economic uncertainty.

Moen’s business is faucets, sinks and accessories, and it’s significantly dependent on the U.S. new construction market, which started declining in October 2006 and rapidly continued downward throughout 2007. That was hard, but then the global financial crisis hit, too.

“Just when we thought, ‘OK, is this thing going to bottom out,’ the rest of the world takes a dump,” Lingafelter says. “Everything else just goes in the swirling uncertainty. Consumers back even further away, so a business that was many, many years of record sales, year after year, you have this transition. That’s been the toughest challenge.”

Add to that, this entire decline was happening as Lingafelter was taking over his new role as president.

“The normal thing of going from a product manager to a president has its own challenges, but those are manageable compared to a business environment in one of your core markets in one of your core segments declining 70 percent,” he says. … “Most people say, ‘Wow — good timing.’”

While it was challenging, it wasn’t all hopeless. The company was strong in other areas, and he recognized that, as well.

“We’re a billion dollars,” Lingafelter says. “We have a highly recognized consumer brand, and we have a good team. So it wasn’t, ‘Oh my gosh — let’s start over.’ It was, ‘OK, what’s changed, what is changing, what does the trajectory look like, and what does that mean to us?’”

What that meant was sticking to what had gotten the company where it was — good strategic planning and accountability.

“It’s not that we’ve done it differently because of that, but it’s just more important, and what we’ve done throughout the year is we’ve had to iterate more,” he says.

Moen’s approach to planning involves aligning the leadership team, diverging and converging, prioritizing initiatives and then measuring. Sticking to this process, even in the challenging times of the past few years, has helped Moen continue to build its $1 billion brand.

“We’re still bullish on our growth in China and with the retail markets — it continues to grow as consumers look for that value in do-it-yourself,” he says. “It’s good. It’s not double-digit growth, but we’re positive. We’re positive on our growth opportunities in places, but we’re not out there spending way ahead of the growth, so we’re continuing to be cautiously optimistic.”

Align your team

Before you can do any game-planning, your leadership team has to understand what’s guiding the process.

“First and foremost, your leadership team is aligned,” Lingafelter says. “If your leadership team is not aligned, then they’re coming in with different headsets. They’re coming in with different glasses on.”

This is the time to look at your vision, mission and strategic initiative pillars to understand why you’re in business and what the purpose of your organization is. Keeping these elements at the forefront of each executive team member’s mind will ensure that your team stays on the same page.

“If everybody says, ‘OK, yes, we understand our vision, yes, we understand our mission, yes, we understand our goal, [and] yes, we believe in our strategic initiative pillars,’ then you get better alignment,” he says. “Then you have a balanced discussion. It’s still not easy, but having those guideposts to help you through the decision process, I think, is key.”

If your team isn’t aligned already, Lingafelter says you have to recognize it’s not going to happen quickly.

“You can’t do it in a [single] meeting,” he says. “It’s not like we’re going to set the vision from 9 to 10. It’s not a completely evergreen process because you don’t want to change it all the time, but I think you have to have a disciplined process of understanding your marketplace, understanding your opportunities, understanding who you are and have enough vision to say, ‘Here’s the direction that we want to go,’ and that process you need to have as much fact-based information as you can.”

At Moen, the company’s three main strategic initiatives are growth, business improvement and organizational excellence, so anything the company as a whole does has to support one of those initiatives. Then that cascades down to each business unit level, and anything that unit proposes must also support one of those three initiatives.

“We use the same language as it moves through the organization,” he says. “Common language makes communication a heck of a lot easier.”

If you can start with these commonalities, the entire process of prioritization and planning is going to be a lot easier.

“It must start with leadership alignment,” he says. “If you don’t have that, you don’t have a prayer because everybody will communicate differently. It’s OK to have a different style, but your fundamental message has to be around those strategic guideposts and those initiatives.”

Diverge and converge

Once you’re aligned with what your vision and mission are, then you have to lead your team through a process of diverging — brainstorming — and converging — bringing everyone back together again to decide what’s most important.

“The diverge and converge can happen at the team level, the group level or the corporate level,” Lingafelter says. “The process is the same — it’s exactly the same — if you boil it down.”

Often you’ll have to facilitate this process yourself because it’s not something that comes naturally to many team members.

“Allow them to diverge on the facts, and then you converge on to your strategy,” he says. … “[It’s a] process that says, ‘OK, this is what we’re going to do. We’re going to talk about our marketplace, and we’re going to get information on our marketplace — let’s all get on the same page. Let’s talk about the company. What are we good at? What are our strengths? What are those things that we think are our competitive advantage and how do those marry up with the marketplace?’”

The amount of people that you involve in this process depends on the size of your business.

“It’s tough to do on your own, but I would say, no matter what, get multiple heads in there to help you at least with the assessment because a lot of times, different views get you to a different place,” Lingafelter says.

For Moen, this happens across the organization at the business unit level.

For example, if one business unit says they want to grow with new construction plumbers, they may start by brainstorming what they know about them. What are the facts? What are the trends they’re seeing? What do they think the future state as it relates to that specific area looks like?

“This is not days and days,” he says. “It’s let’s spend a few hours talking about this, and then you get to the next session, and someone facilitates and says, ‘Let’s take off our headsets and let it run.’”

Sometimes, you need to do some pre-work to these sessions. In those cases, Lingafelter says unit managers may ask their team to brainstorm on their own and come to the table with their top 10 things that they think are challenges with new construction plumbers.

From there, the diverging has to end, and the converging begins.

“Then you do simple things like, ‘Let’s prioritize all these ideas. What do you think? Let’s bring it in a little tighter,’” he says. “It’s not rocket science. You just need to facilitate through the process.”

From there, that business unit will come to the corporate level with, say, its top three things they want to do because they feel those are the priorities as it relates to new construction plumbers. That unit would then take those three items to the corporate level and talk about not just the ideas but what they think they can return on each item and how much each will cost.

“They’ve gone through diverge, converge and this is what they’re recommending they can do,” he says. “It’s not hard, but it’s a process — you have to have a discipline.”

By doing this within each business unit, it helps the corporate level not get bogged down in initiatives that aren’t very important and focus on what will be most beneficial.

“We’ve done this long enough, and our people are seasoned enough to know that wish lists aren’t going to fly,” he says. “The more confusion that they create, the less likely they are to get their initiatives communicated.”

Prioritize

After every unit brings its top initiatives, from there, the leadership team has to prioritize which initiatives out of all of those most-important ideas to focus on.

“When you’re talking about strategic tradeoffs you’re not diverging anymore,” Lingafelter says. “You’re trying to converge on the decision.”

At this point, every business unit has identified what its most important priorities are, but now you have to take it a step further.

“It’s not like we have a bunch of initiatives — ‘Oh, some of these aren’t so important,’” he says. “No, we neck it down to the most important initiatives. So you say, ‘OK, now we’re going to neck it down to only the most important, and you have to make prioritization discussions.”

The vision, mission and strategic initiatives drive those discussions and help identify where tradeoffs will be. This process starts with discussion to identify the facts.

“You try to get everything on the table — have the conversation about tradeoffs,” he says. “Listen to the downside. Otherwise, if we don’t do this, here’s the implication, and you have to vet both of those because a lot of times, the premise on the upside is probably higher than it actually is, and the scenario downside is probably lower than it actually is, so as leaders, you have to try to manage the message or manage the communication a bit. It’s probably not that bad, and it’s probably not that good.”

First, he looks at what the costs are for each initiative. It’s important to look at total costs — operational, finance, IT, human resources, etc. — not just what’s on the surface, and include any of those in the total cost. Then you have to look at what the returns on those investments are.

“A lot of it comes back to getting results,” he says. “If you say, ‘Look, is this in a shorter-term strategy, where it’s within the calendar year? Is it a longer-term strategy? Is it further out than that? Is it changing our positioning?’ You look at how long it takes for that to pay off, and we make calls that way.”

You also have to look at what your company’s strategic initiatives are that everyone was aligned to.

“A vision and strategic initiatives don’t just tell you what to do — they tell you what not to do,” Lingafelter says. “When you’re making tradeoffs without having guideposts, you can naturally steer off course. You have to have leaders that say, ‘OK, wait a minute, let’s remember — what’s our strategic initiative? What’s our focus? How is this relevant?’”

For example, at Moen, Asia is a growth market for the business, so they’ll make investments there, even if they could get a higher payback somewhere else. Sometimes that means cutting one business unit’s budget to fund that other initiative. Someone may get upset and ask why his or her budget is getting cut when three of his or her projects have a higher return than what the company is doing in Asia. But Lingafelter explains to people that the company will still fund that Asia initiative because its strategic guidepost says it wants to grow internationally and diversify from U.S. new construction.

“You come back to those guideposts,” he says. “You come back to those decisions. You know why? Because everybody had the same glasses on when you elected that process. It may not have been exactly the way they thought, but everybody needs to be aligned so you can have rational versus emotional discussions.

“This is not a perfect science. It doesn’t come without stress. It doesn’t come without discussion. Compromise can be dirty sometimes, but you can end up in a better place. I believe that. Taking your marbles and going home because you’re not getting everything doesn’t work.”

It’s important as the leader that you properly facilitate this process so everyone has the opportunity to share what their priorities are and why they think they’re important.

“You try to facilitate consensus and communication because I have very skilled, very smart and very capable people, and you don’t want to disenfranchise them in the process,” he says. “You don’t want people taking their marbles and going home, so you continue to go back to, why is it important? Is it a growth initiative? Is it a business improvement initiative? Cost, quality, service, new products? Is it organizational development?”

You also don’t have all the time in the world to have these conversations and make these decisions. At Moen, they’re constrained by when they have to provide guidance to the parent company, Fortune Brands. It’s important to communicate those time constraints as well so people understand when the stopping point is.

“There are hard stops,” he says. “This is the decision time frame. This is when we need feedback. This is the discussion we’re going to have. This is the prioritization discussion we’re going to have, and we have to stick to those timelines.”

Lastly, you have to look at your budget and what, of all your ideas, is feasible within it. Fortune Brands has a performance expectation for Moen to get results, so he can’t get caught up in something that is risky or too expensive.

“It isn’t a wish list, but it’s a heck of a lot more than we can afford,” Lingafelter says. “It’s prioritized because it’s a strategic initiative that we’ve talked about. There’s never enough funding. This is no different than any other business. The government can print money — we can’t, so we have to control the budget.”

Once you’ve heard all of the initiatives and looked at the facts, then it’s time to make the important decisions of what to focus on and communicate that to your team.

“You try to listen and then repeat back, ‘OK, this is what I’ve heard. I think these are the tradeoffs, and I recommend this is how we go forward,’” he says. “Are there times a leader just has to say, ‘We’re going north?’ Absolutely.”

Taking this approach to prioritization is also helpful when last-minute opportunities arise long after you’ve done your planning.

“That gives you things on deck, too,” he says. “You can say, ‘We have a few extra dollars, where do we go?’ It’s not, ‘Oh my god!’ We can say, these are the three things on deck, and let’s go fund them.’”

Measure

Once you choose your top initiatives, then you have to make sure that people focus on them and follow through.

“Every initiative has the ability to track it,” Lingafelter says. … “Each initiative rolls back, at the end of the day, to growth, business improvement or organizational development.”

For example, a metric in organizational development could be that every employee has an individual development plan. A way to measure that is to say that every employee will have an IDP by March 1.

“That’s a metric,” he says. “That means you have to spend one-on-one time, you have to establish an IDP, log an IDP — those kinds of metrics have to be tied to your initiative.”

It’s critical to take the time to put in some sort of way to measure each initiative.

“If you’re not disciplined with prioritization and establishment of initiatives and tying a metric to it, then it will be tough to track,” he says. “Are you executing and exceeding or excelling in your initiative? You have to just be disciplined to say, ‘OK, here’s the initiative, what’s the metric — how are you going to measure it? What’s the cadence? Again, it sounds simple, but everybody has to have that same headset of process of here’s how I want to present my initiatives.”

At Moen, a new three-year strategic plan is completed every year. That plan is put in a binder or spiral bound, and each initiative is given its own page that outlines the key action, the things they’re going to do to reach it and the timing.

Then, when Lingafelter meets with the person in charge of that particular initiative once or twice a quarter, he asks how they’re doing with it in regards to both progress and timing. Each initiative is coded with green if it’s on track, yellow if it’s a little behind and red if it’s falling behind or being killed. If it’s red, then he discusses the reasons — did they have enough resources? Is the situation different than they originally thought? Have business conditions changed? Or did you just miss it?

“As long as you don’t have too many, then you move on,” he says.

Each initiative will have a plan not just for that current year but also for each year in that three-year plan.

“They’re much more detailed than the next year — a little less detailed the next year and a little less detailed the following year,” he says.

As the company moves through its strategic plan for that year and prepares the next three-year plan, because metrics are such a crucial part of measuring progress, Lingafelter can adjust numbers up or down as needed so that the next plan is likely to be achieved. For example, in the fourth quarter of 2008, numbers got worse, so he adjusted the numbers for 2009 to reflect that.

“It’s generally one of two things — most recent performance and trend lines,” he says. “We look at how we did last month, how is the quarter going and how does the future forecast look. We do a lot of modeling, so we look at what’s happening in the market and we say the trajectory looks like it’s going to be up, flat or down, and we make adjustments based on that. We use a rearview mirror on performance and we use the windshield on forecasting and trend lines so we have that dialogue all the time.”

While this is a lot of work and requires a lot of give, take and communication, Lingafelter recognizes that this process is why Moen and his 3,000 employees are still doing well despite its largest market being down.

“When your culture is built around this kind of teamwork, it helps,” he says. “Leadership’s job is to continue to facilitate that and continue to lead. I think our organization has done a heck of a job through the adjustments that we’ve had to go through.”

How to reach: Moen Inc., (440) 962-2000 or www.moen.com

Published in Cleveland

It used to take a lot of work for Don Ascione and his sales team to secure new business for his $15 million distribution companies, Continental Steel & Tube Co. and its subsidiary Continental Chemical USA.

“We were calling people up and soliciting their business, trying to find out … who would be buying titanium? – OK aerospace,” says Ascione, president and founder of the Fort Lauderdale-based companies. “Then we’d have to go find all the aerospace companies and say, ‘OK, Boeing, and try to find a buyer in Boeing, and get them to talk to you. It’s daunting.”

Ascione saw he could no longer rely on print advertising to generate leads as more and more buyers of industrial products moved online.

“People get impatient and you are talking to them on the phone and they want to see a picture of something – they’ll send you an e-mail and if it’s not there in 30 seconds they’ll say, ‘Where is it?’… The world has changed to instant gratification,” he says. “There is no waiting anymore.

“We looked at it and said, ‘OK, we’re not going to do print anymore,’ and decided to put all of our eggs in the Internet basket.”

Ascione’s online strategy was to make Continental’s online presence more credible but also more accessible to potential buyers. Without print, the Internet would be his sole sales channel.

With the help of long-time sales partner ThomasNet, Ascione approved a complete website redesign for both Continental businesses, updating the sites’ capabilities to include online product catalogs, SEO-driven language, e-commerce shopping carts and user friendly search functions. Each also developed a web presence on ThomasNet’s online distribution portal.

By utilizing the web effectively to showcase its strengths, a smaller company, such as Continental, built a niche for its specialty products.

“It provides an avenue for people to find us and to know what we do and what we are capable of providing,” Ascione says. “We have always been exporting for a long time, but our Internet strategy has allowed people in other countries to find us.

“It sets us in our niche products so that we can compete with the big guys. We’ve developed a relationship with our sources [so] that when somebody wants those particular items, we can be competitive that we can get the delivery. We can satisfy the end users’ requirements. We know that our price and delivery is going to be just as good as a Ryerson, or an EMJ or Alliance or any one of these billion-dollar companies.”

It also brings the customers to you.

“With the strategy that we have now, what happens is people call us,” Ascione says. “When they call us we’re in a better position. They found us and they’re looking for us to provide something for them. So they are receptive when we call back, when we respond back to them. When they do, we actually put a markup on it and try to make a profit.”

As more customers make purchases through your site, you can use web tracking to monitor which products are most popular with which customers, making changes to your online strategy as customer demands change.

“We’re updating on a regular basis our catalog and our content on our website. … As we develop more sources and better sources, and we have more information, we evaluate what kind of information we are able to provide to the customer and what they want,” Ascione says.

“We want customers to come to our site and find useful information and help them achieve their job and to make them and their company profitable. That will help us become profitable because they’ll find value in what we do.”

How to reach: Continental Steel & Tube Co., (954) 332-2290 or www.continentalsteel.com

Published in Florida

While every business appreciates referral sales, many seem to overlook the usefulness of referral data. Referrals are easier to close and more profitable than leads from most other sources. But more important, referral sales are the most accurate test of whether or not your customers believe that your offering works.

If you think about it, prospects are created primarily by circumstance, not by marketing. When a bee stings your child at the playground, you don’t need Madison Avenue to point out the problem. You immediately want a solution. You know that there are all kinds of pain relievers out there, but this isn’t a muscle cramp or a migraine. In this situation, you need a tailored response.

When you get to the pharmacy, you see a host of products on the shelf — everything from generic ibuprofen to something called, let’s say, Auntie Beth’s Children’s Strength All Natural Bee Sting Be Gone. I’m guessing you’ll go with the product that seems to be designed with exactly this situation and your sobbing toddler in mind. Whichever product you choose, from the business’s point of view what is most important isn’t the fact that you bought its product — it’s what happens next.

Let’s assume you go with Auntie Beth’s bee sting product. You swiftly apply the treatment. Within minutes, you and your child will make a discovery about the product that will stick with you much longer. It will become part of the story you tell the ice cream man when you wander back to the park, that you share with the rest of the family when you get home, that you tell your officemates when they ask about your weekend, and that you pass on to other parents at playgroup.

Auntie Beth’s just took the marketplace equivalent of a final exam, and whether it passes depends on one thing: Does your retelling of the bee sting story create new customers?

If the product was a dud, it gets a zero. If it worked, it becomes a hero. When an offering effectively solves a problem — when it becomes a hero — customers tell others in ways that drive referral sales.

Some businesspeople might think they already know that their products work because they have tested them in the lab. The problem with this thinking is that lab tests are constructed to determine whether the product offering does what the company intends for it to do, not what the customer wants it to do. Furthermore, controlled tests are lousy at discovering whether customer enthusiasm about the offering will be high enough to generate referral business.

You might then ask, ‘What about sales data?’ For one, nonreferral, first-time sales don’t speak to the effectiveness of your offering but rather the effectiveness of your advertising, positioning, distribution, promotions and pricing. Although repeat sales send back a more useful signal — whether customers perceive your offering to be good enough, at least some of the time — only referral sales can tell you whether your offering is really taking off.

For most businesses, referral data should be treated as the most important operating metric. Referral business is the ultimate truth-teller — and sometimes the truth it tells is a harsh one. If your referrals aren’t strong, you need to go back to work on the offering, your marketing or both. But given proper attention, referral data can point the way toward a rapidly growing market share. Once you’re able to secure referrals from referrals, you’re well on your way to market dominance for your offering.

Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. Contact Jerry at JMcLaughlin@branders.com.

Published in Northern California

Let’s say you can pitch your business like Moses delivering the Ten Commandments ? your passion and energy will make a believer of just about anybody. Unfortunately, there is only one of you, and there are multitudes of people who need to hear your message. 

Yes, technology has changed business communication, but one fact remains as true for you as it was for Moses: nothing beats word of mouth. For that, you need people – advocates ? and you need to arm those advocates with memorable messages about your organization.

Who are your potential advocates? Any person within your company or outside of it who can speak on your behalf ? customers, vendors, clients, employees, salespeople, service reps and so forth. Advocates are invaluable when you’re implementing a particular strategy or promoting a new product or service. But just as important, advocates can build ongoing buzz for your business by passing along positive messages about your company whenever the opportunity arises.

To arm your advocates most effectively, think like a politician. Give your advocates talking points ? succinct, specific messages that support the larger story. You can give different advocates different talking points, but don’t give any one person more than three. The following types of talking points are especially memorable and persuasive.

Statistics, trends, and other numbers 

People remember numbers, whether it’s calories or horsepower or hamburgers served. To find the numbers just mine your own data. Has business increased 20 percent each year? Did you receive 15 e-mails from satisfied customers in a single month? Do you have 36 positive ratings on Yelp? Are 80 percent of your clientele return customers?  If your business is too new to have impressive numbers of its own, broaden your search to the field. Find statistics that support the cost-effectiveness or other benefits of businesses like yours.

Third-party validation

Politicians seek endorsements of influential groups and individuals to add credibility to their campaigns. Third-party validation is just as effective in promoting your business. Within your organization, that might mean a vote of confidence from various departments or from clients; but keep in mind that it must be specific. Telling your employees that you’re getting positive customer feedback is nice, but vague. Instead, give your team leaders specific talking points to pass along, such as, “The president of Able Corp. said this was the fastest turnaround of any company he’s hired. He’s thrilled.”  For advocates who will be spreading the word to the outside world, think like a movie marketer and provide “blurbs” from your most impressive clients or from positive coverage in print or on web sites. Comb consumer review sites for memorable quotes that you can turn into talking points. For example, “One customer called us the da Vinci of carpet cleaners.” Obviously, awards you have won are the most succinct and impressive type of third-party validation.

Track record

The longer you have been in business, the more talking points you can develop from your track record. Have you been in the same location for 10 years? Have you met every deadline for the past six months? Is yours a family business that goes back two generations? Encourage your best customers and clients to visit sites like Yelp and Angie’s List, where their positive reviews will build an instant track record if your business is new or fortify your track record if you are already established.

It’s worth taking the time to brainstorm talking points about your business in general, particularly important upcoming projects, as well as to list all the people who could be your advocates. Keep in mind that the folks your advocates talk to will also be able to spread the word, meaning they will then become your advocates. That’s why your talking points must be easy to remember. Keep them brief and use a colorful quote or a specific number to make them go a long way.

Chris St. Hilaire is the author (with Lynette Padwa) of 27 Powers of Persuasion: Simple Strategies to Seduce Audiences and Win Allies (Prentice Hall Press). He is an award-winning message strategist who has developed communications programs for some of the nation’s most powerful corporations, legal teams, and politicians. Reach him at csthilaire@m4strategies.com

Published in Los Angeles