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8:00pm EDT September 25, 2008

When staff members join Arora Engineers Inc., one of their first orders of business is to have lunch with President and CEO Manik Arora.

At that lunch, Arora tells them that he doesn’t want them to do something just because he said so. Instead, he wants his approximately 50 employees to learn why the task needs to be done, or if they have a different idea, show him another way to finish the task.

“I think that’s the best leadership style because it almost puts you on the same playing field as the individual,” says the head of the engineering firm, which specializes in secure environments.

Smart Business spoke with Arora about how to balance friendship with business.

Q. How would you advise another CEO to better lead by example?

Hold to the ethics of what you believe in, and make sure they are strong ethics. If you are going to lead by example and you have a tendency to lay down and maybe cut some corners or do things just in the interest of the almighty dollar, it might come across as you’re not a good judge of character sometimes.

I always believe that if you are going to teach someone, it should be by the book, yet it should be creative enough to inspire them.

Q. What are pitfalls in leading by example?

The folks get such a comfort level with me that sometimes the lines get a little blurry. It’s good, I’m inspiring, I’m cheerleading, I’m rah-rahing.

But, on the flip side, and you are leading by example, there’s some separation needed at times. We go out, we promote social events, but what happens is the younger folks don’t know how to separate those lines sometimes. They think it’s all fun, but we’re trying to teach them the business.

So, I have to play sometimes a Jekyll and Hyde just to keep everyone honest that I still have a deeper responsibility in this firm than just this project, and it’s your job to function on this project a certain way and respect authority. I think authority can be compromised if you’re not careful.

I don’t think anyone here abuses that. It’s just sometimes they forget.

Having an open-door policy is another pitfall. Some people think you should be in your ivory tower and go through protocol. My thing is, ‘Hey, if you have an issue, come to me.’

Sometimes people forget that they have direct supervisors. When they come to me around their supervisor and they are having an issue, the first thing I say is, ‘Did you talk to your supervisor about it?’ Again, that’s that line. Do you have an open-door policy? How open is it?

Q. How do you walk that line between Jekyll and Hyde?

For example, if we go to a happy hour, I might be hanging out with all the folks or we have softball games and everyone lets their hair down a little bit. That’s Manik the CEO promoting a good time.

But, then it comes to a meeting, and there is someone sitting there, and maybe they’re not as attentive. I call them out right there on the carpet in front of everyone. That’s nothing personal; that’s Manik the businessman.

So, they can’t play that just because we went out last night, you can sit in a meeting and not give your 110 percent. That’s sort of the two hats I have to wear at times, and that’s the danger, that’s the pitfall of being flat-lined and at that level.

Some CEOs say, ‘You didn’t do (something), you’re going to be reprimanded.’ My thing is, I want to show them why and how we got here.

Q. How do you address someone who isn’t living up to standards?

Management comes in to me, and those are heads of departments ... but because we are flat-lined, there is always room for my interaction along the lines with a [project manager] if someone missteps, and it depends what the misstep is.

If it’s something that violates company policy or our practices manual, it’s treated a certain way from HR. If it violates maybe the culture we’re in — hyper-responsiveness — it’s, ‘Hey, you didn’t call the client back, or you weren’t being responsive to a certain issue.’

There are evaluations done at the end of each year. We are trying to move that to a quarterly basis and say, ‘OK, here are your goals,’ because we forget. Wherever they misstep, we want to come back and revisit that in an evaluation that, ‘OK, you were able to clear that up.’ But, when I sit down with someone, it’s really going backward and saying, ‘What are our fundamental core principles here, and can you continue to function, or did we overpromote you into something you’re not ready for?’

HOW TO REACH: Arora Engineers Inc., (610) 459-7900 or www.aroraengineers.com