Michael O’Neill doesn’t focus much on how hard his employees work each day because that’s not what he pays people to do at Preferred Sands LLC.
“What you get paid to do is to get results,” says O’Neill, founder and CEO at the 526-employee frac sand and proppant company. Frac sand is crush-resistant sand of a specific size that is used by the petroleum industry in the hydraulic fracturing process.
“People become wanderers,” O’Neill says. “You get people who work very hard and very smart, but they wander into other peoples’ areas in the company instead of focusing on where they are strong and what they need to get done. You have to keep getting them back to focus on their goals.”
It’s a tough problem because on the surface, it seems like what every leader would want: A group of employees pushing themselves as hard as they can for their employer. Employees are coming in early, leaving late and even taking work home at night, oblivious to the idea that it doesn’t have to be that way.
“You need extensive metrics in every area to help them focus,” O’Neill says. “Otherwise, conscientious people will be so dedicated to the company that they will work themselves to death because they have not been given good direction to realize they don’t have to do all the things that they are doing.
“You get lots of metrics and you pull these people in and say, ‘Look, I know you’re working hard. But I don’t know why you’re doing these five things that don’t deliver value. I’d rather you focus on this one thing and go home to your family.”
O’Neill has taken the time to build a culture that focuses on generating results, and it’s led to a business that generated $500 million in revenue in 2013. The key to that success is how he and his leadership team keep people focused on doing their jobs through metrics and to make the tough decisions when they need to be made.
Stay on top of your metrics
The effort to stay on target begins at the top at Preferred Sands. O’Neill meets with his leadership team every Monday and a regular topic is how the company is performing against its metrics.
“How are we doing well? How are we not doing well?” O’Neill says. “So the metrics say we’re not doing well in this area. You drill down and say why are we not doing well? Maybe we made some bad decisions on best in class. Maybe we haven’t made some tough decisions. Maybe we aren’t delivering value relative to the marketplace.”
It’s a systematic look back at all the metrics the company has set up such as the value of the company’s product, the conversion rate of sales calls and number of calls being made.
“You just walk through those metrics one at a time,” O’Neill says. “Are we collecting our bills? Do we have a company in trouble? You just drill down and peel back the onion and go through all those things. When you do that, you find some department isn’t functioning right.”
In this scenario, it turns out a department is being asked to do too many things at one time and important items are being missed. Here, it’s not your team’s fault because they were doing what they were told. Now it’s your responsibility to address the issue and live up to your belief in the value of working on the right job, not just working hard.
“You have competent people and they are working on these three things and maybe we did talk about that, but I didn’t realize as a CEO that we didn’t have the bandwidth to do that,” O’Neill says. “So that’s why you have those meetings. ‘My mistake, let’s drop that from the priority list and see if you guys can’t get this to work and let’s review it again next Monday.’”
When you focus solely on working hard, the result is a burned-out work force. When you focus on doing work that delivers value to your customer and earns revenue for your business, you have a stronger business.
“If my business is down, if we’re having problems, the first question I ask is are we delivering value for the customer?” O’Neill says. “If we’re delivering value for the customer, let’s double down because we’ll make a profit on that. If we’re not delivering value to the customer, then it’s the sunk cost theory. I don’t care what you spent on it, move on, drop it. You’re not delivering value. You’re just trying to push water up a hill.”
Make people delegate
One of the keys to having an efficient work force that stays on target with its metrics is having a good team of managers that can effectively guide their direct reports. They can encourage the people who are appropriately focused and steer back the ones who are veering off or spending too much time on other things.
“The two things managers tend to lack the most is the ability to make a tough decision quickly and the ability to delegate and insist the person they delegate to does their job,” O’Neill says. “What they typically do is they delegate to somebody and if he or she is too weak, they step down and start doing the work for him or her. It’s a huge leadership weakness, and we see it all the time.”
Just as you need to regularly look at your company’s metrics, you also need to spend a consistent amount of time developing the leaders in your organization.
“I always want to make sure the person we’re hiring could be the next CEO of this company or one of our other companies,” O’Neill says. “I tell them that, at any level. You could be and if you want to be and you’re driven to be the next CEO; I want to make it clear to that person that the opportunity will be there.”
O’Neill tells people that one of the most important things they need to understand as they advance is that they can’t do everything and will not advance by trying to do everything.
“Successful people have high expectations of themselves and when they become managers, they have to learn how to take that same expectation and move it to the people below them,” O’Neill says. “I’m not going to rely on myself to do this anymore. I have to rely on my team and transfer that self-reliance over to them. Therefore, I have to hold to a very high standard those that I hire and those that I keep, and I have to develop them.”
It again comes back to the idea that it’s not about working hard. It’s about doing the right thing and staying focused on what your role is in the company. When your managers advance, they need to know there are certain things they can’t do anymore and need to delegate to their replacements.
“I know I can’t scale without my managers learning to delegate to other people,” O’Neill says. “Otherwise, they’re going to be working 20 hours a day getting worn out and wondering why they aren’t getting any satisfaction.”
Dealing with conflict
Conflict avoidance is a big problem for many managers. Rather than deal with a problem head on, they try to avoid it or hope that it will just go away and resolve itself.
“So you identify a problem, but you don’t deal with it because you’re afraid that if you do, somebody is going to look bad,” O’Neill says. “So you let the problem fester.
“The reality is they would rather let the whole company go down and everybody gets run over by the bus because somebody in the organization is incapable of doing their job or is just not doing their job.”
This fear of confrontation can quickly become a major distraction from the goals your business has set forth.
“That now becomes your goal,” O’Neill says. “I don’t want to confront somebody. I don’t want someone to get hurt. What they don’t realize is you’re not going to hurt them. If they’re not in a good space, it’s not going to get any better by not addressing it. But it’s hard work. It takes stamina to always get up and say, ‘How do I refocus everybody on the goal?’”
When you promote this environment at a company level through weekly metrics meetings and you show that you’re willing to admit mistakes and make changes to keep everything on track, you encourage your managers to do the same.
“You run great organizations by being best in class in everything,” O’Neill says. “It’s how you define what is best in class and how you build a culture within your company of always looking for and relying on best in class that helps you get there.”
How to reach: Preferred Sands LLC, (610) 834-1969 or www.preferredsands.com
The O’Neill File
Name: Michael O’Neill
Title: Founder and CEO
Company: Preferred Sands LLC
Born: Merion, Pa.
Education: Bachelor’s degree in finance, Villanova University; law degree, Temple University School of Law.
What intrigues you about the law? It truly and thoroughly teaches you to problem solve. You’ve got a few hours to present your case and you’ve got to be thorough. That thoroughness of studying and outlining things and going down every avenue and checking the boxes, it’s really given me terrific insight toward problem-solving as it relates to business.
Who has had the biggest influence on your life? My parents. My mother was constantly focused on how to improve and how to get better. My father was a very hard worker and a very dysfunctional businessperson. So he was constantly scrambling in a dysfunctional world.
But no matter how bad it got, he had this ability to get up and go back to work the next day. He just had that stamina to always be the last man standing. No matter how bad it is, get up and go back the next day.
What one person would you really want to sit down and talk to and why? Peter the Great. He went around the world at a time when you couldn’t travel around the world looking for the best in class in everything, fashion, architecture, surgery, medicine, naval and army construction, commerce. He was unbelievable in his pursuit to find the best in everything and bring it back to Russia and bring that country into the present state at the time. You just wonder what made somebody so incredibly driven to do that.
Track your metrics.
Empower your employees, then let go.
Don’t fear problems. Face them head-on.