Winning mentality Featured

7:00pm EDT December 31, 2006

Be successful today. It’s a short, simple phrase, but to Jerry Parsons, it’s a philosophy that is the cornerstone of business longevity.

Parsons, chairman and CEO of Communications Test Design Inc., says the foundation for future success is always laid in what you do today.

“The No. 1 thing is to be successful today,” he says. “Then, once you’re successful, you have to keep the mentality of being a winner.”

For Parsons, it begins with CTDI’s core business of telecommunications repair, a staple of the West Chester-based company since Parsons started the business with his father, Donald, and brother, Richard, more than 30 years ago.

With telecommunications repair as the foundation, Parsons has built a culture of innovation that values the ideas of both employees and customers to find solutions to the technologically complex telecommunications problems of the 21st century.

It’s a philosophy that balances the old with the new, and it has taken CTDI to the front of its industry, with 3,500 employees and annual revenue of about $400 million, according to Hoovers.com. “If you have a continuing-improvement mentality throughout your company, it generates innovation and ideas,” Parsons says. “If we all come to work every day and think we can do it better than we did yesterday, that becomes your foundation of creativity.”

Customer opportunities
Parsons says interacting with customers is more than just a chance to peddle your wares and services; it’s also an opportunity to make your business better, and it should be treated as such.

When a customer comes to CTDI with a problem, it sets in motion a chain of events that starts with the evaluation of the initial problem and ends with a solution, or at the very least, a resolution. “First of all, we set up strategy sessions with our management, our engineering teams and our account management teams,” Parsons says. “First of all, we need to see if it falls in line with the mission of the company.”

CTDI’s evaluation process for individual projects is set up as a series of checkpoints progressing from general to specific. CTDI considers its general mission to service the telecommunications industry, so if a project involves telecommunications service, CTDI will consider it.

The second stop is a brainstorming session among the company’s engineers, who come up with a solution to the problem. Once a solution has been mapped out, the project is handed to a third party, the marketing wing, which then compiles a presentation for the customer outlining the solution.

While that is going on, CTDI’s account managers are crunching the numbers, determining the cost of the solution to the company versus the revenue that can be expected.

Parsons says a customer solution should not only take into account the current problem, it should also view the customer as an opportunity for future business.

As a privately held company, Parsons says CTDI takes a longer view of profitability, looking for solutions that will yield revenue both now and in several years.

“If we feel this product or service will benefit both the customer and CTDI, and give us future opportunities one or two years from now, CTDI will invest in the research and solution for that customer,” he says.

But Parsons cautions that smart innovation is rooted in stability. Having endeavors that are profitable now is the only way to ensure that your business stays the course. Without the meat-and-potatoes sustenance of your core businesses, the higher-risk, innovative ventures might be too much to swallow.

CTDI’s stability is based on Parsons’ belief that while a company can view profitability in the long-term, it must accomplish profitability in the short-term.

“Being profitable today allows you to invest in the future, and therefore, you can take a longer view of your projects,” he says. “If you are not profitable today, you would have a hard time investing resources the way you’d like to. If we didn’t at CTDI, we wouldn’t be as flexible as we are today.”

Creating an innovative workplace
For Parsons, internal communication starts at the bottom.

Many of the ideas that move the company forward start when engineers and technicians begin brainstorming, then work their way up to management.

Parson says the lower rungs of the company are a fertile ground for innovation, and he promotes the cross-pollination of ideas by having different departments work closely with each other on projects. “It creates an atmosphere that everyone is on the same team,” he says.

But for ideas to flow upward, a culture that promotes an exchange of ideas has to flow downward.

When it comes to communication, Parsons says employees need two things: a sense that their ideas matter and constant updates on the direction of the company.

To help the company’s engineers and technicians take ownership of their ideas, they are placed on an open operations floor with members of other departments. When someone creates an idea for a new product or service, it’s up to him or her to form the initial concept, create a prototype and then seek feedback.

The open-forum style of creating and refining ideas not only brings new ideas to the table, it helps keep employees interested in the direction of the company.

“In the case of engineers, they’re not sitting in cubicles designing something and then just handing it off,” Parsons says. “They’re actually implementing their design platforms on the floor, making sure they work, so they have ownership of that equipment until it’s handed off to operations.”

Parsons describes CTDI as a company that is fanatical about daily reporting. Information on new products, new services, financials and the internal workings of the company are disseminated to employees daily, usually through e-mail or department managers.

Keeping employees abreast of the company’s situation gives them a better idea of where they and their projects fit in to the grand scheme, and, in turn, helps motivate them.

“If you’re driving your business from a daily mentality and daily operations mindset, if you’re going to improve your daily performance, you need to report daily,” Parsons says. “You can’t be in a vacuum. Whatever you’re measuring, you need to report those measurements to your people every day.

“That’s how they buy in, that their daily performance and their daily ideas are critical. That’s how they see how what they do daily rolls up to how the company performs as a whole.” But at CTDI, the information employees want doesn’t just need to move downward from management; it also needs to move outward to the company’s 35 centers around the world. Distance is another hurdle to effective communication, and to overcome the distance, Parsons relies on his network of site managers. Keeping site managers empowered and enabled to communicate is critical to the success of any company that is spread across many locations.

To help motivate the company’s site managers, Parsons has installed an incentive plan that awards bonuses to site managers based on how well their site performed in a given month.

“Every month, we report to them not just how the corporation did but how they did at their local branch,” Parsons says. “They are rewarded financially based on how well their branch did.”

It’s called a Monthly Incentive Plan, or MIP, and the bonuses awarded through the program give Parsons a gauge of how each site is performing.

“We report everything from how the revenues are doing, how our profitability is doing, and then bring it down to the individual locations,” he says. “Not only on a corporate level are we communicating, but on a local level, the local management is reporting the performance of everyone in those branches, both from a revenue side and a profitability side.”

Though CTDI gathers the approximately 100 members of its top management together for an annual strategy meeting, Parsons says written communication is still the most vital part of spreading a message over long distances.

Parsons relies primarily on e-mail and a quarterly newsletter to spread his vision and messages over long distances.

“That’s the biggest challenge of communicating over long distances, that you cannot always do it in person,” he says. “You have to have good written communication that gets to the point, describing results and describing your strategies moving forward.”

Management’s role
The leader of a company is charged with creating a vision and then creating an environment that can make that vision happen.

But even though the CEO is the captain of the ship, he or she shouldn’t stay locked away on the bridge.

Parsons says it’s important for a CEO, and for the other senior managers of a company, to view themselves as part of the team. It’s not just a matter of delegating effectively; it’s a matter of working effectively, filling the roles that need to be filled.

Parsons takes a kind of jack-of-all-trades approach to his day-to-day work. That doesn’t mean he professes to know everything about every facet of the company; it means he’s willing to perform tasks and attend meetings on an as-needed basis. “The way we view our selling and customer service is that we’re one big team,” he says. “If my vice president of sales is at one meeting and they need me to go to another meeting, then I will just go to that meeting.”

He says who is performing which job is secondary so long as the net sum adds up to good company performance.

“It really doesn’t matter so long as we’re doing the best we can as a team,” he says. “That’s the culture we build around our top management.”

It plays into Parsons’ philosophy on delegating authority. He says you need to be able to trust those in your top management. If you have a strong organization built to win both now and down the road, your management team should be strong enough to earn your trust.

Parsons says you need to know your managers, and know what they are good at.

“The key is to understand the talents of the people you surround yourself with,” he says. “You have to challenge those individuals to be as innovative and creative and hard-working as they can.”

Spurring a high performance out of your managers comes back to the vision and culture of the company, which comes from the CEO’s chair.

Be proud of where your company is, but never become content.

“As a CEO, you need to drive that continual improvement, continual revenue growth, continual profitability,” he says. “We are very satisfied with where we are, but we all understand that we need a mentality of building on success. We’re successful, we’re good, but we always want to get better.”

HOW TO REACH: Communications Test Design Inc., www.ctdi.com