SBN Staff

Monday, 26 October 2009 20:00

Bearing fruit

Dan Kim believes in the power of a brand.

As founder, president and CEO of Red Mango Inc., he says you have to have a strong brand, and you can’t deviate it from that if you want to be successful in business.

“If you constantly change who you want to become, the strength of your brand goes away,” he says. “If you try to do too much and address too many things, you stretch yourself too thin and really can’t accomplish anything.”

Kim says you have to know who you are as a brand, and then you have to keep your ideas and people focused on that. This helps him keep his 800 people across 55 frozen yogurt stores moving the company forward.

“It’s discipline, it’s focus, and it’s appreciating the brand at all times and understanding that the success of the company is not going to be determined by short-term wins but really how well we position ourselves as a brand,” he says.

Know yourself

What do you want to be when you grow up? It’s not just a question for a young child or a student entering his or her college years. Instead, it’s a question that Kim says you should be asking yourself about your business.

“We always start with, ‘Who do we want to be when we grow up and who are we as a brand?’” he says. “We always keep that top of mind in terms of everything we do.”

Kim wants Red Mango to be the leading retailer of healthy and delicious treats, using frozen yogurt as the first platform to do that.

“So now you know what you want to become,” Kim says. “How are you going to get there? What are the values that are important to us? What are the values that are important to our customers?”

Identifying your company’s values may seem like a tedious process, but it boils down to what you believe in.

“It really depends on who you are and what’s important to you and your company and your managers and your founders as a team,” he says.

For example, if you’re in the computer industry, maybe being environmentally friendly is important to you or maybe it’s building the smallest computer. Neither one is wrong.

“But if you start wavering between the two, you start losing your own focus and start losing the focus of your management team and your resources,” Kim says. “Most importantly, your consumers get confused as to who you are.”

Identify what you’re most passionate about so that you stick with those values.

“Make sure you’re passionate about them, and the reason why you want to be passionate about them is actually so you don’t waver back and forth between the different passions,” he says. “When you’re passionate about something, that keeps you on track.”

Kim created a brand trifecta that says that Red Mango is a convergence of health, taste and style, so anything Kim does should support those things. He also created a “MangoFesto,” which is a two-page document that outlines what the company stands for, its values, objectives and goals. He’s taken that document and made it into a poster for each store so that the employees know what the goals are and to make sure that every decision is consistent with that brand philosophy.

This may sound all well and good, but how do you create your own version of the MangoFesto?

“Writing one is very important, but I guess the question is how to go about writing one,” he says. “For me, it’s keeping it very simple. Some people will have 10 or 15 objectives — we have three.”

His three objectives are get people to try the product, get them to know it’s good for them and give them a great in-store experience. He could have added other things like make sure your floors are clean or make sure you train people properly, but instead, he looked at the bigger picture.

“At the end of the day, kind of boil it down to what are the three most important things that you need to do that will enable everything else that you want to do and make those possible,” Kim says.

Then the objectives you come up with will naturally encompass the other things you want to accomplish. For example, if you make sure your floors are clean, it’s going to help the customer have a good in-store experience.

“The thing that you can do that’s not cool is you write it once, and you never come back to it, and it gets lost,” Kim says. “You have to make that part of the cultural fabric of your organization.”

Keep ideas focused

When a franchisee wanted to sell frozen yogurt cones at his store, Kim had to do some evaluating based on what he’s established the company to be.

“Once the idea comes to me, I’ll have them explain why they need it, why they think it will work or help improve their store, and then why they’re so passionate about it,” he says.

In this case, the owner said he wanted to be able to sell to more people and operate at a lower price point and give people a reason to come to his store instead of places like McDonald’s.

With some reasoning behind the idea, then Kim and his team assess it using a few guides.

“One, does it make sense to the brand and will it not deteriorate what the brand stands for?” he says. “No. 2, if I were to do this and the test was successful, could I really roll it out nationally or regionally because consistency and repeatability are important to us? Then I look at the variables, like cost. How much is this going to cost to execute and promote?”

By putting the cone idea through these filters, he concluded that it wasn’t a good idea and said no.

“We’re not ice cream, and we don’t want to do anything that reminds people that we’re ice cream, …” he says. “We don’t compete with McDonald’s. You’re not going to make incremental revenue by selling cones, because you’re selling them at a lower price point, and it doesn’t promote the core product.”

But on the opposite end, when an owner in Hawaii proposed serving papaya at his store as a topping, Kim ran the same filters and came to a different conclusion than the cone idea and told him to go for it.

“Papaya is really cheap in Hawaii,” Kim says. “Hawaiians love papaya like strawberries are to the rest of the country, and it fit with the brand — papayas are healthy, delicious fruit that can be served fresh and went well with our yogurt.”

It all goes back to evaluating ideas based on what’s important to you and your company.

“It goes back to analyzing it with regard to our brand trifecta and making sure that it makes sense for the brand and makes sense from an economic perspective and make sure it makes sense for the business,” he says.

Having a process like this helps you maintain your focus and not get distracted by ideas that seem great but in reality aren’t.

“I’m a big believer in brands and the power of brands,” he says. “The way I exercise my leadership is to constantly stay dedicated to not redefining who we are for the wrong reasons — especially if it has to deal with short-term ways to overcome obstacles.”

This can’t be a once-a-quarter or once-a-year thing either — instead it should be constant.

“When new things come up that you haven’t thought of or it wasn’t there last week or it gets proposed to you, always go back and assess it,” Kim says. “ … Make sure that resonates well.”

Keep people focused

What are your company’s blue chips — the things that are most important to your business?

“You can have all the chips in the world, but you want to keep the blue ones,” he says.

To stay focused on the blue chips, Kim has a mandatory weekly Wednesday meeting for him and his top 10 people. All 10 staff members prepare a report that addresses the following: What they’re working on this week, things they’ll be working on next week, things that are on the back burner, and things that they wish they were working on but don’t have time for.

“It kind of annoys them because they have to do it every week, but I find it very, very effective in helping them manage their time and helping me understand what they’re working on and helping other people understand what their colleagues are working on,” he says.

This also helps him know if his team is working on the best things to move Red Mango forward.

“There are two levels of decision-making,” he says. “If you break it down to the micro level of an individual — what are the things that I as a CEO want him working on? It’s a delicate balance — are the things that he’s working on consistent with what the company as a whole needs to do, and then do we have the money or the budget to execute that?”

This is helpful in knowing both your time limits and monetary limits.

“A lot of times when you work with a lot of ambitious people, they want to do more than they can,” he says. “That’s the first filter I put it through — does it align with the company, does it have the right resources to do what he needs to be doing and is he doing too much?”

Knowing these answers helps you say no to others who may want you to do more. For example, if Kim says that he’s going to open up X number of stores, with an average unit volume of Y and he’s going to recruit Z number of franchisees, everyone knows those are his top goals. Then when someone asks him to do something else, he can say he’s not able to because the money and people need to be used on the first three goals instead of the fourth, fifth or sixth thing they want done.

“It’s really having a budget in place and a well-thought-out plan that gets you to where you need to get to because if you don’t have that, and you have a lot of outsiders or board members or executive managers who don’t understand how the strategy is executed in regards to having the right resources, then you’re in a situation where you just constantly want to do more and more things without people understanding why you can’t do them,” he says.

You may have everyone else on track and moving forward, but lastly, you have to keep yourself focused, as well.

“Every week you’re doing something,” he says. “Assess what you’re doing against those goals or your brand mission.”

Do this for everything you have on your schedule, and you’ll keep yourself — and ultimately your business — on track.

“Even if I’m traveling to Seattle to meet with a customer or going to New York to meet with a supplier — is that meeting in and of itself consistent with the brand mission and brand values?” Kim says. “Always ask yourself that because if you don’t, you’re just going to get caught up in a very busy schedule doing stuff that you think is important. Again, people’s time and money are limited, so you have to constantly assess.”

How to reach: Red Mango Inc., (214) 302-5910 or www.redmangousa.com

Monday, 26 October 2009 20:00

Hitting the brakes

A few years ago, Bendix Commercial Vehicle Systems LLC was bought by a German company, and in that transaction, Joe McAleese, who serves as Bendix’s president and CEO, had to shift his company’s focus from a quarterly, profit-driven mentality to a long-term, double-digit revenue growth outlook. It changed the game for the business, which develops air brake charging and control systems for trucks, trailers, buses and tractors, and he was now focusing on things that he never focused on before.

As a result, business boomed, the company doubled its size between 2002 and 2006, and he was seeing a pipeline of more growth opportunities awaiting him. At the time, it was the biggest challenge he had faced, but it was exciting to see the company change and even more thrilling to see all of its potential. But then everything changed.

“Before the recession started, we started being impacted with the housing starts slowing down and declining,” McAleese says. “Our customers have been in a prolonged freight recession for three years, so they don’t have a need for trucks, so the truck companies don’t need to build trucks, so it’s been a difficult time for our industry.”

McAleese had to change the game — again — to adapt with both the industry and the economy.

“For us, the challenge is in how do you manage through that?” he says. “We’re used to managing through very big cycles. Our industry is normally very cyclical — we go about from the top of the cycle to the bottom of the cycle 50 percent. That’s normal for us. We’re used to dealing with that kind of cyclicality. This time it’s 75 percent. We’re not used to dealing with that. We’re not used to the aftermarket business slowing down at the same time.”

To keep the company moving forward during the tough time, McAleese and his team took a processed approach to changing Bendix by getting all of their options on the table, making the right decisions, communicating with employees and then moving forward.

Know your options

When his human resources department sent him a memo saying that another company had cut executive pay by 10 percent, McAleese vividly remembers thinking it was the stupidest idea in the world.

“I said, ‘Well, that’s a dumb idea. That’s not a very good idea. We’re not going to do that,’” he says.

Coming to terms with your emotions is the first step in putting all of your options on the table.

“You need to get everybody willing to discuss the items, which means that you have to personally get there, too,” he says. “This is not just about managing other people’s emotions. It’s managing your own.”

Seeing his own emotions helped him start the process.

“You have to recognize your personal reaction to those things because these things are very personal,” McAleese says. “They’re very personal for you as an individual, and they’re going to be very personal for all of your employees if you go and decide to do those things.”

You have to know what’s going on in your industry and with the economy.

“You see one person out there doing something like that, you go, ‘That’s not a very good idea,’” he says. “You see two, you go, ‘Well, OK.’ When you see five or six or seven, you say, ‘OK, if other people are doing it, they’re going through the same set of issues we’re going through and they’re looking at the same set of facts, and they’re concluding that that’s a good option.’ I may not initially like it, but that has to be on the list of items we need to discuss.”

While his initial reaction to lowering executive pay was that it was out of the question, he eventually softened, which allowed him to think with an open mind.

“It’s the whole leadership team managing their emotional reactions to that,” McAleese says. “Until we can come to grips with it, we can’t go out and communicate it and execute it properly, so it’s getting us past that emotional hurdle that it’s an acceptable option for the short term — not the long term but for the short term.”

And that’s the key. Things such as pay cuts and furloughs or layoffs weren’t in his line of vision a year ago.

“Those were not things we’d even consider, but when you get in the depth of the economic crisis that our industry is in right now, you have to make sure you have the whole range of options in front of you, so that’s the first thing — making sure you have the whole range of options in front of you.”

Make good decisions

McAleese wants to double the size of the company from what it was in 2006 before things started to go downhill. This may seem silly, impossible or maybe even frivolous given the economy now, but it’s actually quite relevant to the second step in leading a company through hard times: making good decisions within the options you’ve laid out.

“You have to start with what’s your long-term vision,” he says. “Where do you want to be in the long term? Whatever decisions you’re making, you can’t sacrifice that. You’ve got to keep that out there in front of you of where you’re trying to go with the business. You can’t let yourself get carried away with the current situation and not recognize the context of the long term.”

Look at what fuels that as well as the roadblocks.

“You have to identify what the biggest issues are,” he says. “If you’re going to be successful this year, why are you going to be successful? What are those couple of items that you absolutely have to do to be successful, and if you’re going to fail this year, what are those couple of things that will cause you to fail? Then make sure you manage around those things.”

Knowing where you want to be down the road makes it easier to look at your options objectively.

“Then you have to really evaluate what’s the impact on the organization of taking each of these steps,” McAleese says. “What’s the impact of our strategic long-term, strategic intent? What’s the impact on the people in our organization? These are very painful and difficult decisions, not just for the leadership team but for the organization because we’re impacting people’s lives.”

Have other people help you in that process so you can overcome your own preconceived notions. McAleese engages his HR team so he can have a better idea of how people will react. He also has a team of about 15 to 20 senior people help him in making big decisions.

“You can’t have 50 people in the conversation, but if you do it with three or four, I think you’re making a mistake,” he says. “You need to have a good cross section that you get different inputs and points of view.”

The kind of people you involve in making decisions is crucial.

“You have to surround yourself with people who have an opinion and are in touch with the organization and that are willing to voice their opinion and are willing to disagree with you,” he says. “You have to be able to have this fruitful discussion, and it can’t just be a rubber stamp of something or a recommendation that comes into the meeting — not in these times. You have to really have good viable discussion on each of those items.”

During those discussions, be careful not to put your opinion out there too early because it can shut down the conversation. It’s also helpful to vocalize both sides of the argument.

“I have to play devil’s advocate sometimes on some things I don’t support,” he says. “I’ve got to be engaged in the conversation, but I’ve got to be willing to take both sides of an issue. I’ve got to be willing to take the side that I don’t really believe in and ask questions around that so that I try to balance the discussion because I can shut the discussion down by just asking all the questions on one side of the issue.

“ … As a leadership trait, the ability to ask questions and ask the right questions is critically important.”

Then make sure you work through all of the ideas and suggestions.

“You’re making decisions to get to an objective, and you can’t get hung up on one item,” McAleese says. “You can’t get hung up that this is the right answer. You have to be willing to explore all of them. You have a solution you need to get to, and there are multiple ways of getting there.”

Going through this process helps ensure that you don’t make rash decisions too quickly. For example, a lot of times when business gets tough, management first turns to cutting people, but that’s not always the best solution. Instead, McAleese said that was the last thing he wanted to do, so instead Bendix instituted a hiring freeze, lowered both executive and employee pay, discontinued its tuition reimbursement program, and trimmed other benefits. Additionally, the company put management processes in place to react to issues the business and industry were facing.

After doing those things and realizing that he was going to have to let people go after all, he first evaluated every salaried position in the company — about 800 of the 2,000 people.

He looked at which positions could be eliminated permanently, and those people would be let go. Then he looked at positions the company needed for the long term but could do without for the short term and what projects could be delayed, and all of those people were to be furloughed.

“People rush to conclusion on that stuff way too quickly,” he says. “We had that at the end of our decision-making process. That was the last thing that we implemented.”

Communicate

The town-hall meeting in which McAleese was going to communicate his decisions — the next step in leading your business during tough times — honestly wasn’t going to differ from how he had communicated all along.

Even in the good times, he always had five structured town-hall meetings each year to outline what’s happening in the world economy, how it’s impacting Bendix’s industry, how it’s impacting the company and what leadership is doing about those things.

During those meetings, he also shared with his employees the monthly scorecards that he used to monitor each of the initiatives in the company’s goals for that year.

“You need to decide which items that you’re going to communicate on a regular basis, …” McAleese says. “People who haven’t started it can be fearful of it because they complicate it. It’s a very simple thing. Communicating is at the core of our management system. It’s at the core of what’s important. It’s not a tremendous amount of preparation or a tremendous amount of work. You just have to get started.”

Keep your message to no more than an hour. Then give employees about a half an hour to ask questions.

“Once you get past that, people get antsy,” he says. “You got to get them out of there in an hour and a half.”

After each meeting, employees fill out a short survey about how effective and valuable they thought it was and their opinions on company matters, and meeting length was something that came up when he’d go too long.

“When you get into bad times, yeah, you need to communicate, and it’s more important than ever that you communicate in those bad times, but it’s a lot easier process if you started the communication process in the good times,” he says.

When times started to get tough, McAleese then shifted his message from talking about the scorecards half of the time to talking about the economy 80 percent of the time. As he and his team identified options for adapting to the hard times, he would share those with his employees so they knew what could happen in the future. As they made decisions, they communicated those openly in these forums, as well.

“During this time, it’s even more important that we communicate with them and explain where we’re going and what we might do, so we’re very transparent on the range of options, and we’ve tried to continuously communicate to them what’s the economy doing, how that impacts our industry, how the industry impacts our business and what we’re doing,” McAleese says.

He also made sure to talk about how the company was still being successful though.

“It’s very easy to get into these negative thoughts and negative spiral, but we have to recognize that there’s a lot of great things going on in the business,” he says.

So when McAleese and his team needed to lay off some employees and furlough others until the end of the year, he told them in the town hall.

“We had two options — you rush out and eliminate positions and impact people and then in the town hall tell people about it — that’s an option,” he says. “Or do you tell people about it in a town hall — what you’re doing, how you’re doing it, the magnitude of what you’re doing, and then you go and execute it?”

He chose the latter, so he told them what was happening and how many people it would affect — but not who. After the meeting, management spent the next day and a half communicating with the affected individuals. The downside is that it leaves employees in limbo for a day or so, but McAleese says he’d rather do that than not tell people upfront, and then have rumors flying once he started meeting with people because nobody knows what’s going on.

This process happened on a Tuesday and Wednesday, and employees were informed that Friday would be their last day.

“We didn’t march them out of the building when we told them,” he says. “We told them, ‘Friday is your last day, and now it’s up to you what you want to do. If you want to go home now and not come back, that’s fine with us. If you want to go home now, come back tomorrow or Friday to say goodbye to people, that’s fine with us. If you want to stay for the two and a half days, that’s fine with us.’ We let them manage their exit in their own way. I think that added dignity to how they left.”

After you have those conversations, though, there’s still more communication to be had.

“Whenever you go through that, there’s a lot of emotions in the organization — the people that are making the decisions, the people delivering the news, the people that are leaving the organization and then the people who are left behind,” he says. “You have to manage the emotions on all those levels.”

Immediately after those conversations, McAleese walked around to talk to people who had been furloughed and reinforce that he hopes to bring them back in the future.

“As a leader, you need to go out and be visible in the organization,” he says. “You need to walk around and talk to people. It’s not a time to go hide in your office.”

Keep your message consistent with what you’ve already told them. Most people he spoke with were not angry, and while they were disappointed and sad, they understood.

“You have to be willing to be out there and be visible and accept the consequences of the decisions that you made and be out there and talk to people and understand how they’re feeling,” McAleese says.

Move forward

As Bendix moves forward, McAleese is now in the fourth phase of this process.

“That’s the first three parts, and then the fourth phase is, OK, when you do the range of things you have to do, you’re going to cause some harm to the relationship between you and the employees, so we have to recover that,” he says.

That, too, comes down to communication and consistency.

“We have to do that by telling people what we’re going to do and then going and doing it, so demonstrating that we’re still credible, we’re still the same people we were before,” he says. “When we were telling you what we were doing on the upside, we did it. We’re telling you on the downside, and we’re going to go back into growth mode.”

McAleese anxiously awaits the day when he can call people back and once again focus on doubling the business. But knowing when that time has arrived is hard, especially when every day you read headlines and hear stories along the lines of “Economy bottomed; recession end nears.” He says you have to look at leading indicators for your industry and then at your actual business.

“This is not an economic climate where you can forecast that, in six months, things are going to be better,” McAleese says. “You can’t work off that kind of forecast. You have to wait until you see it in the incoming orders from your customers.”

Once he sees that, then he’ll begin adding things back as the company can afford them and can once again focus on growth instead of cuts.

“Our business has a great future,” he says. “Our business is really down, but in the end, all of the goods and services move on trucks, so when the economy gets rolling again, the trucks will then get rolling again, and our business is going to go right back to the size it was before then. This is just kind of a reset phase to get our business positioned to go flourish again in the future.”

How to reach: Bendix Commercial Vehicle Systems LLC, (800) 247-2725 or www.bendix.com

Friday, 25 September 2009 20:00

Risk and reward

Sudip Nandy knows a thing or two when it comes to growth.

At his previous position at a billion-dollar company, he oversaw more than 18,000 employees and led nine global acquisitions and joint venture operations in two years.

Nandy, who is now CEO of Aricent Inc., a global technology and services company that focuses exclusively on communications, says the key to driving growth is to have a good blend of what you know and ambiguity tolerance — the things you don’t know because you haven’t seen them in the past and others haven’t either.

“In a growth market, it’s always new things that drive growth, and new things mean it’s uncharted territory. So one of the critical things to have is that tolerance in a growth market and having a good understanding of what we know and also knowing what we don’t know,” says Nandy, who is pushing his 8,000 employees at Aricent to work closely with customers, take risks and to move forward in trying new things to take the company to the next level.

Work with customers

It’s so easy to make your customer into nothing more than a data field in your spreadsheet, but to drive growth, see them as people. The mantra that Aricent uses is “co-develop, co-design and co-innovate” so that they’re actually working with the customer to find solutions.

“Most companies have a map … so you know the route to take,” Nandy says. “We say we don’t have a map — we have a compass. We know which is north and south, but we don’t know the route. We’ll work the route together with the customer — that’s co-creation. … If you have a map, you won’t change the game. If you have a compass, you probably can make a new road and change the game.”

If you want to lead with a compass, then you can’t come off as a know-it-all to your customer.

“The compass thing happens in the area when you don’t know and the customer doesn’t know,” he says. “Both of you have an idea, but you have to start working in those areas of, ‘What next? What next year? What for the segment?’ It’s a way of self-discovery with the customer.”

The only way you can figure out which way the compass is pointing is to get in front of your customer and the competition.

“Typically you have to go to your customers and you have to go to your customers’ customer yourself, and then decide, with in-depth interviews and observations of what they’re doing,” he says. “You collect and come back and think them through, and you analyze, and through the analysis, you get your own insights and the implication of what’s true in your market or what’s true in your subsegment and so on.”

For example, by observing customers’ customers, Aricent noticed that people in their 30s and 40s, when asked to push a doorbell, would use their forefinger; however, people in their teens and 20s, who text message more prevalently, tended to use their thumbs.

“Those observations are what make you design things in a different way,” Nandy says. “That comes through observation, and you have to do that kind of thing, and it makes it very important.”

When you meet with people though, it’s important to get in front of the right audience.

“It’s not an issue of what you discuss, but it’s equally important who you start the conversation with,” Nandy says. “When you’re doing a discussion on what new features to add on, which would make your product gain market share, it’s probably with a product management team … but if it’s what new products to launch, what new services to offer, what new end users to address, it is probably a C-level — a CEO or chief marketing officer that you’re addressing.”

By talking to the right people at your customers and competitors, you’ll start to get a picture of what’s needed and the things that can help move your business forward.

“We get insights, insights lead to ideas, ideas lead to very interesting conversations with our customers, [and] customers come up with good ideas,” he says.

But with so many ideas coming in as a result of the conversations and research, how do you know which ones may be viable? Nandy says that you have to go back to your customers and explain what you’re seeing and present possible problems, solutions and ideas to them.

“Say, ‘Have you thought of doing this for your customers, or have you thought about launching this kind of product or service?’” he says. “They sit up, they clear their desk, and they call their team. They say, ‘Here’s some interesting discussion,’ so you stimulate that. If you get that reaction, you know you’re on the right track.”

Take risks

When it comes to the HIV crisis in South Africa, you wouldn’t think that there’s much to be done aside from educating people about safe sex practices. However, Aricent teamed up with other organizations, and after doing their own analysis, they found that the larger problem was the social stigma that went with simply getting tested for the disease.

They also realized that about 85 percent of the population had wireless phones, so they worked with these other organizations to create a system where a citizen could send a text message to receive information on getting a testing kit. Citizens could then have the kit sent to them, do the test, send it back in and be notified by text again when the results came back. The program launched a year ago, and within the first three months, the number of people being tested for AIDS quadrupled.

“It’s not a money-making proposition, but you know there’s a problem available, people are trying to solve it, and if you have an approach to discuss, sometimes people will say, ‘OK, let’s try it out,’ and it becomes a case about how technology … can really solve a problem,” Nandy says.

This testing system is just one example of how you have to try out ideas when you see problems. Sometimes ideas will be successful, as it was for this case, but sometimes they’ll fail. Either way, you have to be willing to implement new ideas if you want your business to grow.

“There are some times you fail, but that’s the other important thing,” Nandy says. “For a growth industry, you have to be not scared to fail. You have to embrace uncertainty, and you have to be someone who is aggressive in seeking new experiences, and you realize that even if you fail, you have to believe that you have broadened your repertoire, you have enhanced your knowledge base, enhanced your experience base. That’s the approach you have to take.”

The problem is that so many people are opposed to risk, especially in a down economy, as the leader, you have to show them that it’s OK.

“Reward people who have taken good risks and do not penalize people who have taken a risk,” he says. “It takes some building because people are generally risk-averse.”

But Nandy also cautions that you need to balance risk taking.

“It should not be experiment and risk run amok,” he says. “So it’s a nice balance between making people comfortable with taking risks and, at the same time, have a finance team that isn’t really a team of accountants but a team of strategic finance, who understand that it’s a percentage game.”

For example, they should u

nderstand that you may fund 10 projects, and maybe you succeed in three or four, but the success of those three or four will more than pay for the other six or seven that failed. Doing this gives people room to try new things, but it also helps move your company forward because you’re not relying on one home run but instead a series of singles and doubles.

“I think I would be adverse to take one bet of a particular side of $10 million,” Nandy says. “I would rather take 10 bets of $1 million each. Each company needs to choose where its comfort zone lies.”

Move forward

Once you decide which ideas to move forward with, then you have to act quickly.

“Move on that and make those bets quickly and cut through the process,” Nandy says. “Then, what happens is, you succeed or fail very quickly, right? Then you can build on that quickly. Otherwise, as the whole thing lingers, your success is delayed, and so is your failure, which is sucking in more money from your kitty to do that kind of thing.”

First, create ways to measure your progress so you know if you’re succeeding or failing.

“It is not that you discuss with your customer only at the end, at one point in time,” he says. “You have multiple checkpoints. We intend to go back. There are checkpoints for different things. You define, maybe depending on how long the project is, 10 proof points or five proof points — whatever you define.”

The key to creating proof points is that they should be done before you start working on the project and be there to help show you if you’re on track or not.

“Ask the people who are doing it themselves to say, ‘At what point of time do you think you have failed?’ because you have to ask those questions before the start of the project because once you start the project, you slowly grow and you’re not objective anymore,” he says. “You’re part of the problem, so defining at what point to pull the plug on a project is something that you do before with the team so people are a little more sane and less married to the idea so they can make objective calls at that point in time.”

Some of the proof points may be technology-related, while others may be financial, and some may be related to your customers.

“Whatever assumptions or insights you had before you started the project, are they still valid or has something else come in the meantime to change the market or has something happened where people’s ideas have changed or have some technology come about that makes the whole thing obsolete and changes the whole idea?” Nandy says. “So it’s important to define those proof points and have a set of people who are external who help you assess it.”

It’s also important, as you move forward, to knock down the barriers to success that may exist, which include approving budgets and resources as well as simplifying processes. For example, if getting an approval for a customer takes seven days, find a way to cut it back to three. If it takes 72 days to hire someone and get him or her on board, cut it back to 62. By looking to simplify processes for your people, it increases their creativity and moves everyone forward in growth mode.

“Bureaucracy busting should be a constant exercise because it’s a human thing,” Nandy says. “We build it up trying to allocate work in the right way, so constantly looking at that is a critical component for having a company that’s growing and growing in innovative ways and doing things for customers that customers just love.”

How to reach: Aricent Inc., (650) 391-1088 or www.aricent.com

Friday, 25 September 2009 20:00

The best investment

Chuck Gummer has been working for Comerica Bank for 39 years. These days, it’s a rarity to see someone with the same company for that length of time, but then again, that’s what his company is all about.

The banking giant has been around for 160 years, and it attributes the majority of its successful growth to having long-tenured employees who are able to grow and develop within the business.

So it’s no surprise that Gummer started with the bank in Michigan, and when it moved into the Texas region 20 years ago, he was on board with that and now is president of the bank’s Texas market, which consists of overseeing 1,500 employees in the Metroplex, Houston and Austin.

In order to see that both the Texas region and the bank as a whole continue growing, Gummer focuses on recruiting the best people to the organization and then working to develop them within the business.

“You have to have a perspective on your company and where you want it to be over time,” he says. “If you want it to be around a long time and you want it to have a truly life of its own, then having a stewardship approach of people and developing leaders is very important to doing that.”

Get the right people

Your business won’t get anywhere without having quality people in place. You not only have to hire the best people, but you also have to know what you’re looking for in both job skills and personal characteristics.

“We start off by saying, ‘What’s the ideal profile of this person?’” Gummer says. “List all that out, and then as we interview people, compare what the traits and qualities of that particular person is compared to our template or profile, and make sure there’s a good fit here.”

If it’s a job that somebody has already been in, you can use that person’s traits — or lack thereof — to guide you in forming that list, but if it’s a new position, lean on your colleagues to help you develop the list.

“Start with a job description so you know what you want,” he says. “Then you have to go through and identify what are the educational experiences, the business experiences, maybe the life experiences that are good for a person to be successful in that job.”

While the job skills may change between positions, some of the values that Gummer is looking for do not. For example, because Comerica has been around for 160 years and in Texas for 20, he wants people who want to be with the organization for a long time. Comerica also has a commitment to serving the community, so he also looks for people who care about that. Focusing on your organization’s values will ensure that you get someone who meshes well with your business.

Once you know what you’re looking for in a candidate, then you can begin searching for the right person.

“Another thing that’s real important to understand is academic achievement does not assure business success,” Gummer says. “By that, I mean you can be very smart and well-educated, but do you really have what it takes to be successful?”

Instead of focusing on where people went to school or what they achieved while they were there, Gummer follows the GE method of evaluating people on four E’s: energy, enthusiasm, edge and execution.

“Those are four things that you don’t necessarily get in your education, but you have to evaluate that on the people that you’re interviewing if you want to pick people who will be successful,” he says.

But first, you have to check candidates out on paper first.

“First thing you do is study and evaluate the resume of the person,” he says. “If they’ve had a lot of jobs over a short period of time without good reason, there may be a question there.”

He also looks for signs of community involvement, such as charity work or church activities, on their resumes.

“Are people involved in the community and the nonprofit world and have they provided leadership in that area?” Gummer says. “I think that’s a tell-tale sign of what kind of person you may be getting.”

Once you’ve found some people who look good on paper, then bring them in for interviews.

“Have more than one interview,” Gummer says. “I don’t know how you can evaluate somebody and make a decision based on one one-hour interview. I think having interviews in multiple venues is important.”

He says the type of venue isn’t as important as recognizing the need to get to other venues aside from your office.

“From the office to a cup of coffee someplace, to whatever else might fit in, there’s nothing special about a particular place, but I think getting off-site is important,” he says. “It tends to relax everybody a little bit more.”

As you’re meeting with people, then it’s important to ask questions that get to the heart of those values and skills you made on the list. If you had any red flags, such as the multiple jobs in a short time frame, you need to drill down into those, as well. One way to do that is to ask them very broad, personal questions.

“You just got to ask that person to share their life story and the challenges that they’ve met and they’ve overcome,” Gummer says.

Taking this approach ensures that you get people that fit well with both your job description and your organization as a whole.

“Know what your values are, and then ask the questions around those values,” Gummer says. “Clearly, as much as we’ve tried to put science behind the hiring, there’s an art to it, and that art is identifying all the right questions and getting the answers that you think are appropriate and spending enough time so you think the person is sincere.”

Evaluate employees regularly

You may get the most amazing people coming into your organization, but if you don’t set expectations and measure their progress, then they, like your organization, aren’t going to grow.

“Put together a performance plan before they come on board so they already know what the clear expectations of the job are,” Gummer says. “Once you have that, you can evaluate folks as you go along.”

He says to evaluate your new people at least monthly. Once people prove themselves and get acclimated to the job, then you can relax that to quarterly or semiannual reviews. With any evaluation, whether it’s a brand-new hire or a seasoned employee, you have to ask a lot of questions though.

“Part of that evaluation is what’s going right?” he says. “What do we need to do differently? How can we help you be successful? The success of the person, as much as it needs to be driven by our colleagues, the manager has to take responsibility in their successes and wants to do what they can to help them be successful.”

In addition to simply asking those questions and reviewing their performance, it’s also important to create action steps to move the employee forward in their job and career.

“Any performance plan that we have here has a development plan as well — what can we do to help that person as we move along?” Gummer says. “[How can we] make sure they’re taking advantage of the training we have here and make sure they’re taking advantage of workin

g with other colleagues that we have here and putting together different programs to help them be successful?”

Remember to keep both the end goal and action steps to get there in mind when putting together a development plan.

“It has to be results-based and efforts-based,” he says. “That is, we have to get results if we’re going to continue to be successful overall, but we have to know what gets to those results, and those are certain effort goals. You need to measure both of them, but the ultimate measure tool is the result.”

Besides simply measuring employee performance, you also need to identify their skills and desires and those who have the capacity to move into leadership roles in the future.

“Evaluate them on leadership qualities — what they desire to do, what they would like to do within the company over time and where we see them headed — and then create opportunities or experiences to help them get that recognition that they need in order to be considered for other positions in the future,” Gummer says.

This process of molding people into leadership roles can take years.

“It starts off, you take care of the immediate needs and to make sure they can be successful today, but you have to have an eye to the future as to where that person might be and be willing to put in some additional training,” he says.

That may mean sending them to an outside coach or having them attend internal programs. Other times it may mean sending them to external programs and conferences around the country that are available to them.

“Part of it may be moving people to different positions within your company for different periods of time and getting them to have those various experiences as you see them move up in the organization,” Gummer says. “If you think that they’re going to continue to want to move up in the hierarchy, they have to have a variety of experiences. They can’t be one-dimensional.”

The last piece of this though is to make sure you stay in touch with your employees’ needs and desires and aren’t trying to force people into leadership roles who don’t want them. Instead of having a preset group of people who are identified as “leaders” and get all the special attention, Gummer and his team instead identify every person’s needs and desires and focus on giving more to those who want it.

“People change what they want to do over time,” he says. “To slot somebody or predestine them to something is not what we’re about. We’re about, ‘Does this person want to move upward in the company? Do we see their performance as supporting that?’”

It’s also important to touch base with people in those regular reviews to see if their goals or desires have changed at all. Oftentimes, someone may have wanted to climb the corporate ladder, but if he or she is now starting a family or caring for an ill relative, that person may not want the additional responsibilities that he or she desired in the past.

“That’s why we need to have constant communication so we’re not trying to get them to be something they don’t want to be,” Gummer says. “We have to stay focused on the employees’ needs as well as our own, and if there’s change, we have to take another avenue.”

If you’re able to take these approaches with your people in developing them, then, like Comerica, you’re likely to see long-term growth and success.

“If you want to be able to have a company that’s successful over a long period of time, leadership development is an absolute must,” Gummer says. “Sitting down with your folks and knowing what they want and discussing with them what you believe their potential is and getting them to agree to a development plan and executing on a development plan is what’s going to assure that that person is growing in the company as the company grows.

“If you don’t do that, you’re probably destined for a very short tenure in your company, whether that’s selling out someday or just closing up someday. If you have a desire to make your company an enterprise and not just a small business and have long life, then leadership development is very important to do that.”

How to reach: Comerica Bank, (800) 589-1400 or www.comerica.com

Wednesday, 26 August 2009 20:00

Building a team

Early in his career, Brad Eller was promoted to a position that, by title and job description, he didn’t have enough experience to have, and the new role opened his eyes.

“When that happened, what I realized very quickly is people do not think the same way that I think,” Eller says. “People do not do the same things that I do. People don’t approach problems or issues or conflict the way that I approach those things.”

At the time, he didn’t have the resources to hire a coach to help him, so he immersed himself into reading a variety of professional books to help him learn how to understand different personality types. What he learned still helps him today as president and CEO of LEVEL5 LLC, a construction management services company that has climbed the Inc. 500 list as a result of its growth from $1.5 million in revenue in 2004 to $47.5 million in 2007.

Smart Business spoke with Eller about how to understand personalities and build a strong senior management team.

Develop a strong senior management team. Everyone has to understand the need of a senior management team. One person cannot drive a business. It takes a group of people, and it takes a group of people that have alternative thoughts or different perspectives for a president or CEO to really get a read on any situation or issue or problem or actually to create a vision.

How I developed that is twofold. One, there’s going to be people in the business that you didn’t select — they’re in the business, so you have to understand those people and you have to understand what perspectives they bring to the table and what their talents are. I don’t want to go too far into psychology but kind of what is their personality profile? Where do they stand? How do they view life? You have to understand the perspective of who that person is and what they represent.

You have some of those people and then you have the ability or occasion to bring in other people. You have to bring people into your organization in areas where you’re lacking. Sometimes managers surround themselves with people who think like they do, and that’s a mistake. You have to look at the uniqueness.

Senior leadership, it’s like a stew; my job is to put the right ingredients in the stew — make sure that those ingredients complement one another. I can’t put the same ingredients in, otherwise it wouldn’t be a stew, and I have to make sure the ingredients bring out the flavor of the other ingredients and that it blends. Then I have to occasionally taste it and add ingredients. Sometimes my job is to stir it up a little bit. Then my job is to sometimes put the heat on and sometimes to turn the heat down.

Take time when hiring. From my perspective, I’m committing to someone for their livelihood. One of those fundamental leadership things that I have is I need to make it work. It needs to be successful, so I need to make the right decision.

I begin with a phone interview. Certainly we talk about experiences, previous work history, but we also talk about what do you want to accomplish in your career, what is the perfect job, how do you see yourself progressing, where would you like to be in 10 years, how much money do you like to make?

Then I like to bring the person into the organization, and I like to conduct an interview and meet the person. Depending on the strength of the phone interview and the personal interview, I’ll invite them back the second time. That second time, that’s the most rigorous of all because I try to have all of the other senior managers spend an hour with them — it can be a long, tiring day for the right candidate.

Then we meet and everyone provides feedback. Then, based on that feedback, I call the person in again. If you find a talented person, they may have other offers, and they’ve got decisions to make, and sometimes I have to accelerate through that, but I make it clear that we don’t want to rush through the process. It’s got to fit.

It’s like buying a pair of shoes. I go to the store, and I see a great pair of shoes, and I put them on and they don’t really feel right, but I buy them anyway and take them home and wear them into work, and my feet hurt and have a blister, and the shoes didn’t work. You don’t want to do that with people. You want to make sure that it works and make sure that it fits.

Mix everyone together. You have to make sure that your team understands that everybody is there to provide different alternatives and perspectives. So when we have a meeting, we want to have rules because I want power dialogue in the room. The main rule is you attack an idea not an individual. Other rules are there’s no rank in the room, and you have to be present, you have to be engaged.

Then what you have to do is you really have to teach your senior management team how to engage in conflict so that people can disagree and it doesn’t ignite emotional fire. It’s an education on how to engage in conflict. Organizations grow through conflict. If a conflict is resolved, they can stay on that growth curve, but if the conflict’s not resolved, you decline.

What you want to do is by heating up the fire or stirring the pot, when it makes strategic sense, have some conflict. You’ve got to check the temperature of your organization. If people are complacent and everybody just seems to be complacent, then obviously that’s when you need to insert a little bit of heat and conflict. If everybody is out there firing on all cylinders, and they’re working hard toward a common goal, then that’s when you need to turn the heat off, and you don’t need to stir the pot. Let it simmer. It’s a good tasting stew. It doesn’t need me doing anything to it.

How to reach: LEVEL5 LLC, (404) 761-0008 or www.level5.com

Wednesday, 26 August 2009 20:00

Clarity of purpose

Tim Bentsen has been working at KPMG LLP longer than many of his employees have been alive.

After 34 years with the audit, tax and advisory service firm, one thing he recognizes is that he has a large group of generationally diverse people, which makes it a challenge to get everyone to understand him and the vision he’s communicating — and to buy in to it.

“We have so many smart, bright people that are out there trying to serve clients in a variety of ways — how do you keep them all aligned under the firm guidelines, processes, goals and objectives?” says Bentsen, the firm’s managing partner for the Southeast area and the Atlanta office.

He starts by setting goals for the 2,000 people in his region, following up to make sure they understood and then stepping back and letting them execute.

“That links into how do you get buy-in around things,” he says. “You can’t just tell someone, ‘This is our vision, and by golly, you just have to buy it, and it’s our way or the highway.’ You have to let them take some ownership of it. Say, ‘OK, this is the firm’s vision. What’s my piece of it? How can I influence it at my level? And how, at my level — even me as a partner — can I really influence what’s happening?’

“If you start to understand that piece and see how if I push in that direction or contribute in this particular area, it helps move the firm forward overall.”

Set goals

You’ll never be able to get a group of people going in the same direction if you don’t set the direction for them, so the first thing that is crucial to keeping people aligned is to set goals.

“The key is just set a real clear set of goals and objectives and keep them focused on that, and you continue to say, ‘This is what we do, and this is what we will not do, and this is how we’ll engage with our people, and this is how we’re going to engage with the marketplace,’” Bentsen says.

When it comes to setting clear goals and objectives, it’s often more difficult than we’d like to think.

“We’ve all heard it for years — keep it simple,” Bentsen says. “That’s what we have to do because professional services, we can make it sound awfully complex, but it’s really fairly simple. If we understand our clients’ business issues and help them solve those, it’s not a whole lot more complicated than that. … We just have to keep in front of us a clear understanding of who we are and what we’re not, what we’ll do and what we won’t and how to engage with our clients in accomplishing that.”

Bentsen has to take a look at KPMG as a whole and then break it down from there. For example, as an international organization, the company has goals and objectives it wants to accomplish. From there, the U.S. entity also has goals that it’s looking to achieve. From those goals, Bentsen needs to look at how his regional area can fit into that puzzle of achievement. He then uses those tasks to create goals for his people.

“It starts at the very top with the firm’s priorities and strategies, and it transcends down into the businesses, be it geographic or functional, which then goes down to specific teams and individuals — what is my role, what are the things that I’m expected to do to help the firm accomplish its overall goals?” he says.

A lot of times it may seem overwhelming when you’re determining what goals to set for yourself or your people, but Bentsen says you have to choose the most important tasks to focus on.

“Don’t overdo it,” he says. “One of the real challenges is to keep it fairly clear. … Our leadership team might say, ‘Tim, here’s 47 things we need you to do.’ I cannot focus on 47 things, so it really needs to break down to, ‘Tim or Sue or George, what are the three to five things that you do that will move the business forward?’

“So I would say to keep it really clear, keep it somewhat of an ability to focus on priorities. What are the three to four things that will really make a difference?”

He says there are some ways to know how to choose top priorities.

“One, you have to use your own knowledge and intuition about what’s really important, but I’ll also play that back to my boss, and I would encourage people to play that back to their leaders,” he says.

For example, when you or your people are part of multiple projects, everyone thinks that the project he or she heads is most important, so how do you prioritize when different people think different things are most important? He says that’s when you have to go through those 47 — or whatever your number is — things and look at which items will most affect the business. Then communicate to everyone involved that these are your 47 things, but these are the four that are most important to focus on.

“I’m going to get to the other 47, but I’m going to address these four things first or keep them sort of the No. 1 priority as I work through the overall list,” he says. “Play it back to the people that you work with to get them to agree and understand what some of those competing priorities are.”

Follow up

It’s all well and good to set goals for your company and employees, but they still won’t get aligned if those goals aren’t clear and understood by everyone, so you have to check back with them.

“When you’re communicating with someone, setting expectations, you do some follow-up with different groups and levels and say, ‘Did the message get through?’” Bentsen says.

He does this by having people summarize to him what they heard when he’s conducting formal reviews.

“You’re working with me, and I’ll say, ‘Here are your performance goals for this year, and I want you to summarize those and put them back in the formal performance discussion process that we have,’” he says. “So one, it’s your ability to turn around and articulate those in a formal and structured manner and then through ongoing and frequent communication and interaction.”

Bentsen also likes to sit in with his managers when they do this with their team members so he can see that they are doing the same thing and that their people are seeing how they need to contribute.

He also follows up with people after large group meetings.

“One of the things that I’ve learned — you kind of know it, but you learn it the hard way sometimes — is what you believe you say is not always what people hear,” Bentsen says.

For example, when he had a practicewide conference call for his region, where there were hundreds and hundreds of people on the call, he knew there could be misunderstandings. So the next day, he had a call with 15 of his senior associates and asked them what they heard on the call the previous day.

“I went through four or five specific areas that I had addressed,” Bentsen says. “‘OK, this is a topic we covered. Somebody tell me what I said.’ I think just to have that follow-up — and that’s the goal of having this sort of feedback process is to say, ‘Did my message get through, was it understood, how could it have been interpreted by others?’ If everybody is sitting in different contexts and experiences and different things, what they hear is going through all those different filters.”

Get out of the way

After setting goals and following up, for everything to work well, the next thing you have to do is back off.

“My role is to get out of the way,” he says. “We have some outstanding people, and if you set the goals and set the expectations, you want to empower them by having that clarity of expectations and then getting out of the way and then saying, ‘OK, you go do it, and what can I do to support you?’”

Bentsen knows how important it is to get out of the way because he’s seen his own frustrations through his own experiences with micromanagers and, on the other hand, his experiences with those who empowered him.

“Do unto others as you would have them do unto you,” he says. “I look at who have been great leaders for me over the years and know that they were there but they had given and they had instilled in me a tremendous amount of confidence — ‘Tim, I know you can do this. I’ve seen you do this before. We’re in agreement this is where you’re going; go do it and check back with me in two weeks,’ or whatever. But you learn from the people that you work with.”

While you may learn how to better let go by watching those who have led you, you’ll also learn how much to let go as you watch those you currently lead.

“As I’ve had the opportunity to work with others, you give more rope to different people,” Bentsen says. “That’s why you get to know people and you understand Samantha here can do some incredible things so I’m going to let her have almost as much rope as she needs, where Steve over here is maybe a little less experienced so we’re going to have a little more frequent touch points.”

Those touch points come in the form of evaluations and metrics. You have to have that follow through and look at how they are performing against those goals and objectives. One of the expectations he has of his people is to provide constructive feedback on someone’s performance in order to help them grow and understand the opportunities they have in the firm. He expects performance reviews of new associates after every project of more than 80 hours. For more experienced people, reviews are expected semiannually. He’s also quick to note that sometimes the best performance “review” is often the immediate and specific feedback that someone provides to a colleague.

“For a huge percentage of the population, they’re just going to do that anyway, but for everyone else, there is an expectation that what gets measured gets done,” Bentsen says.

Once you do all of this, you’ll have good systems in place to move the business forward.

He says, “You set all these expectations, and then you get out of the way and let them go do it and don’t micromanage and have your points of accountability and know that you’re there to support and encourage and help the teams going forward.”

How to reach: KPMG LLP, (404) 222-3000 or www.us.kpmg.com

Wednesday, 26 August 2009 20:00

Power of people

When A. Ray Dalton used to work for Jack Welch, he quickly learned that he valued people far more than GE did.

“It was so painful to me to get another e-mail that said, ‘Get rid of 42 more people because all of your C’s had to be gone by November,’” he says.

While GE only grew about 5 percent a year, Dalton’s segment was growing 40 to 50 percent.

“I was struggling to hire people, and he’s telling me to get rid of people,” he says. “This doesn’t make sense.”

For all that GE excelled in, he knew it was missing out on more.

“(GE does) an amazing job,” he says. “But they forget a huge, very important part of that — how they got there. It’s the people that contributed to the number. I come from the inner city, where drugs and alcohol and a lot of things were going on. I saw the power of the people, and I saw that people survived that, and people contributed to things that were better.”

In 2001, he founded his seventh business, PartsSource LLC, which sells replacement medical equipment parts, and from the beginning, he’s focused on that power of people.

“Our growth is completely centered around that we’re customer-centric, but in order to be customer-centric, you have to be employee-centric,” Dalton says. “People say, ‘We really care about our customer,’ but the question you have to ask is, ‘Do you really care about your employee?’ What is the evidence that you can point to that shows that you value your employee as much as you value your customer because you can’t have a long customer without a long-term employee. It doesn’t happen.”

He says that in business, there are “yes” companies and “no” companies, and after his past experiences, he strives to be a “yes” company.

“‘No’ companies are like GE, who will tell you all the things you can’t do — ‘Don’t do this, don’t do that, don’t send this e-mail, don’t go over there,’” he says. “They spend so much time telling you all the things you can’t do that by the time they get done with you, you’re a little nervous that you might not have heard right because they didn’t tell you not to do something that you say, ‘I’m sure they don’t want me to.’ They miss out on all this opportunity of all these people who want to do great things, but they say, ‘They don’t want me to do great things — they want me to do this, so I’ll do this.’”

Being a “yes” company is important because it empowers employees to do things their way and try new ideas.

If you want to be a “yes” company, keep the rules to a minimum. Instead of telling everyone what not to do, Dalton instead says employees can do whatever they want as long as they don’t intimidate or offend other employees, customers or vendors. His reasons are simple — companies are like families and going to work is like going to a reunion. You may not like everyone, but they’re still family.

“They’re all people, and they will be respected, and they will all be respected with the same amount of dignity as the most popular person in the building because they’re all family,” he says.

Another way to be a “yes” company is to encourage employees to think on their own so they don’t depend on your ideas and answers.

“If you come to me and say, ‘I have this problem,’ I’ll say, ‘What do you think we ought to do?’” Dalton says. “You know it is impossible for you to identify a problem without identifying what you would do if it was up to you. I’d say, ‘You’re smart, tell me.’”

To avoid being a “no” company, don’t create uniform processes for everything.

“You have a style, and your style is different than people out there, … ” Dalton says. “You’ll never be me, and I’ll never be you, and you have so many attributes that are so amazing and so much better than me that if I try to make you me, then I don’t get them. … We’ll be a lot better company if you don’t try to make me you, and I don’t try to make you me.”

Doing these things empower your employees and ultimately take your company to new levels of success.

“The job of the CEO is to be the chief encouragement officer and not the chief execution officer, … ” Dalton says. “Don’t give up on your people. Your people are your strongest asset. It’s your employees that can get you to heights you can’t even imagine you can get to, but if you can imagine it, they can do it.”

How to reach: PartsSource LLC, (877) 497-6412 or www.partssource.com

Sunday, 26 July 2009 20:00

Straight talk

A few years ago, when Mark Edmunds took the reins as vice chairman and managing partner for Deloitte LLP’s Northern Pacific region, he stood before all 4,000 of his employees with a single message for what they could expect of him.

“I wanted them to know that every day when I come to work, I’m going to focus on building trust,” Edmunds says. “Trust — when you think about it — it’s easy to say and it’s hard to earn. I told them that trust is the foundation of everything we do at Deloitte. If you build trust with your colleagues, you actually deliver better service to your clients.”

Over the last few years, Edmunds has lived out that mission of establishing trust by leading with a mindset that everyone matters, being straight with people and always listening.

“It’s all about living what you say, and it’s all about the actions that you take,” he says. “It’s providing leadership on it, so I really try to earn my colleagues’ trust every day when I come in.”

Here are some of the things Edmunds has learned about leadership through the years.

Don’t discriminate

Growing up in southern Virginia in the ’60s and ’70s, Edmunds saw that his father, a successful lawyer, treated people differently than others in town. One evening, his father had a cocktail party, and he invited a black couple to the party. When they arrived, he’ll never forget how three couples left the party and how people treated his father after that.

“He always lived that everyone matters,” Edmunds says. “He really instilled that in me, and I’ll never forget how some of the people in town treated him after that — as if he didn’t matter anymore. My whole life — my professional and my personal life — I try to live by this mantra that everyone matters.”

One way to do that is to not discriminate with whom you engage in conversation. For example, Edmunds will talk to the people who park his car in the garage, to the security people at the desk when he comes in and all the way up to the senior managers in the company. But beyond that, it also extends to the various offices he oversees. For example, he has 1,800 people in his San Francisco office. But if he goes down to Fresno, he only has about 30 people there.

“I try to make sure (the people in the Fresno office) understand that they matter as much to me as leader of this region as the partners here in San Francisco that serve the biggest accounts,” Edmunds says.

Edmunds uses a five-minute rule for his meetings to show people that he respects their time.

“Whether there are supposed to be 4,000 people on a call or four, within five minutes of when it’s supposed to start, I start it,” he says. “That doesn’t matter whether my CEO from New York is supposed to be on it and he’s not on it yet, I start it. Within five minutes of starting time, we run. That’s how you show respect to the people who showed up on time.”

All of his employees are well aware of this rule and respect it, just as they do all of the other rules related to this, such as no do-overs.

“So you start the call, and somebody arrives 15 minutes late, you don’t debrief them in front of several hundred people,” he says. “You talk to them later.”

Doing this shows his people that while some people may have higher titles, they’re not more important than anyone.

“I respect their time, and they trust that I’m going to run things on time and run things properly,” he says. “No do-overs. The message that sends is everybody matters. It doesn’t matter if the senior partner shows up late. Everybody is the same.”

Be straight with people

Another lesson Edmunds learned from growing up in a small town is that you can always leave your keys in your car or your front door unlocked. There’s no crime because everybody knows what you’re up to and won’t hesitate to tell you when you’re acting out of line.

“One of the things that’s instilled in you is to talk straight,” he says. “People there didn’t even know what a political agenda was, much less have one. So growing up in something like that, that’s built in to your soul, so when you talk to people and listen to people, you’re straight with them. … Talking straight with people and having no agendas is a really important character and leadership (trait) that all great leaders have.”

You can start with not sugarcoating a situation.

“I have to define reality and say, ‘You know what, it is tough, we’re in a tough market, and that is the reality,’” Edmunds says. “But then you also have to provide hope and a vision as to where it is you’re going to go: Hope that we’re going to be OK as a firm, and a vision to let everyone know that I can actually see around the corner of this recession.”

And while Edmunds strives to be straight with people, he expects the same back from them.

“If I ever ask them to do something that doesn’t help them more effectively mentor and coach and develop their people or more effectively serve their clients, I ask them to push back on me and don’t do it,” Edmunds says.

Nearly every day he’ll get e-mails asking him why the firm wants them to do something. Sometimes he’ll explain why it’s in their best interest to do it, and they’ll understand and buy in, but other times, their questions challenge him to be a better leader.

“There are other times when I will challenge myself or the firm to say, ‘Why are we doing this?’” he says. “When you’re a big organization, sometimes you can become a little too bureaucratic, and sometimes you have to challenge yourself to streamline and do things more effectively.”

The last way to be straight with people is to back their decisions.

“There’s no more powerful a statement you can make to someone around trust than, ‘You have my proxy,’” Edmunds says. “It’s a business term, but it’s really powerful. … Use that word. There’s no more powerful statement from a leader to someone else to say, ‘Wow, he really trusts me and is going to encourage me to make a decision on a really big issue.’”

But this is also not something you just say freely. In order to trust someone to make the right decisions, you have to truly believe in them.

“Building trust takes awhile,” he says. “It’s through several interactions. Trust you’re trying to earn with a client could take months and months and months of doing things that are valuable to that client, and over time, they could trust that you’re not there to sell them something every time you have a conversation. It could be years. It’s the same with your colleagues internally.”

He says you can start with smaller decisions, and once you learn their decision-making capabilities, you can give your proxy on the larger issues.

“There are times when you need to let them fall down a little bit on a decision that might not be as critical, but let them learn from that,” he says. “I guess the bottom line is it just takes a little time to spend with them before you’re comfortable doing it.”

Listen

One other way that Edmunds builds trust with his people is by listening to them.

“I think listening skills are the best thing you can have as a leader,” he says. “A lot of times, when you move up in a very senior position, you lose some of that, and there’s a lot of pressure to perform as a leader and to steer the business in a certain direction.”

One way to build your listening skills is to set up venues to hear what people have to say. Edmunds has a series of advisory groups that he’s established to do just that. For example, one is a group of Generation Y employees to give him a fresh perspective from the younger staff. He also has a senior manager group of people that have about eight to 12 years of experience and are one step away from being in the partnership. Then he also has a group made up of young partners in the firms. Each group meets with him quarterly.

“Having different constituency groups giving me input outside the normal chain of leadership is very important,” Edmunds says.

If you want to form your own advisory groups, it’s important to choose wisely who will sit on each.

“You want to look at the top 10 to 20 percent of your folks, because you want them to have the opportunity to have access to me in this informal setting so they can learn more about the firm,” he says. “They’re the future leaders of the firm. Usually, it’s the top performers in each of those categories. You simply look at the evaluations over a period of time, and if they have sustained high performance, I pick from them.”

He said it’s also important to make sure that as you select people, you make each group as diverse as possible, as well.

“I make sure there’s a good balance of men and women and a good balance of diversity, … ” he says. “Whatever we think would create a better team. It’s clear to us that diversity of thought and diversity of background in any kind of meeting or gathering you have helps you reach better answers.”

As you interact with these groups or even in your more regular meetings, it’s important to recognize that you don’t have all the answers.

“People (need to be) willing to check their ego at the door,” Edmunds says. “There are many people that rise in an organization and have a lot of the experiences and believe that they might have the answer before anybody else in the room does. Those are people that need to lean back in the chair and let everyone else talk and listen to them to see if there’s a better answer than what you came in with. … There are times when you want to lean in and times you want to lean out.”

It’s important to recognize when you need to do either of those.

“When you’re with a team and you want the team to get to a good answer for our people and for our client, lean out,” he says. “Let people talk about it, and let the group come to a decision versus leaning in and saying, ‘This is what I think the answer is,’ because then groupthink comes to that (decision) because you’re the most senior person in the room.”

By doing all of these things, you’ll develop a strong trust between you and your team, and that will translate through to all you do.

“There’s a difference between leading and managing,” Edmunds says. “If you’re trying to manage other people, you’re trying to get them to do things because you’re asking them to do it or requiring them to do it.

“But leaders inspire people to go in a different direction. Leadership is about inspirations. You can’t inspire people to do it unless you’re believable, unless you’re trusted, unless you’re straight with them, unless you have good listening skills, unless you convey to them that, in the end, it’s not about me as a leader. It’s about us being successful — successful in our organization, successful serving clients, successful giving back to the community.”

How to reach: Deloitte LLP, (415) 783-4000 or www.deloitte.com

Tuesday, 26 May 2009 20:00

Searching for solutions

Tim Guertin has three questions he continuously asks his employees to answer to ensure that Varian Medical Systems Inc. continues growing.

“Obviously, growth comes from people wanting to buy your products in ever greater numbers, so the first question you have to ask yourself is, ‘Why would they do that, and how do you make them do that more?’” he says.

Next, he asks how to make the products more efficient and make people happier using them. Lastly, he asks how Varian can get more people who aren’t customers to buy its products, which are medical devices and software used to treat cancer patients.

If you can find the answers to those three questions, then it’s likely that success will follow.

“Do those three things well, I think you’ll grow,” says Guertin, president and CEO of Varian.

He has learned that in order to answer these questions effectively, he and his employees have to focus on their customers, be open to criticism and also be inspirational. As a result of doing these things, the business has grown from $1.6 billion in fiscal 2006 to $2.1 billion in fiscal 2008.

Focus on customers

When Guertin first started in the business, one of his managers made him go to a clinic for two days to watch patients be treated. It helped him better see what the problems were and what the customers liked and disliked.

“You should spend a lot of time talking to customers and having people in your organization talking to customers,” Guertin says. “You need to understand your customers viscerally and spend enough time with them [so] that you do.”

You have to be strategic about it though and make sure you’re spending that valuable time with different demographics.

“You watch new users and see how long it takes them to learn something,” he says. “You talk to the people who have to educate customers and ask them how it’s going and what things are the hardest for the customers to learn. You talk to experienced users and get their opinion.”

The problem with expert users is that they know so much that they often get on tangents, and you don’t learn what you really wanted to learn. Because of this, you have to also hit your intermediate users, who use the product but infrequently. These users may know how to do something but sometimes forget between usages.

“Intermediates represent the bulk of customers, and they’re the most easily frustrated,” Guertin says. “You have to talk to them and figure out how to design your products such that those people stay happy.”

When you talk to customers, open up the meeting by letting them talk. Guertin says that if he’s having a daylong meeting with a customer, he lets them talk for an hour before his first PowerPoint slide even comes up.

“You have to know where they’re coming from,” Guertin says. “Most people go into a conversation knowing where they’re coming from and not knowing where the other person is coming from.”

While listening entails using your ears, it also involves observations. For example, if Guertin sees a glimmer of distaste come across somebody’s face, he’ll ask what bothered him or her.

“There’s a little bit of detective work involved,” he says. “If you’re a detective and if you’re questioning a suspect, you can’t just have a planned interview. You have to follow things up.”

You also should reach out to people who aren’t your customers.

“You have to go talk to the people who aren’t interested in your product, and you try to figure out why and what’s going on in their head,” he says.

It may be your product or it may simply be the way you advertise your product, but you’re not going to know unless you ask them.

“You have to teach your sales force to do this,” Guertin says. “The sales force’s job isn’t just to talk. It’s to talk to people who don’t want to buy the product. It’s actually to talk to cold prospects and learn from that.”

Throughout all of these tactics, remember that you have to be somebody your team can emulate.

“You have to demonstrate the behavior yourself because people will watch the boss,” he says. “If I go into a room and spend all my time telling customers instead of listening to them, I’m not modeling that behavior.”

Be open to criticism

The second way you’re going to answer those three questions is to talk to the critics within your organization and customer base.

“Sometimes the best people to talk to you are your critics, which is no fun to do,” Guertin says. “You go talk to them and listen to what they have to say, and then you walk away feeling like you should kill yourself, but the next day you may have a better idea of how to make things better.”

For example, one of Varian’s customers decided to buy a different product offering, so Guertin called the customer and asked an honest question.

“I said, ‘I know we lost, but will you have dinner with me, and let’s talk about it?’” he says. “’I’m not here to change your mind. I just want to talk about where we went wrong. It’s my job to build a better Varian — can you tell me how to do it?’”

The customer said OK, so the two went to dinner, and Guertin was shocked when it lasted four hours.

“I spent dinner going, ‘OK, so we did this wrong. Good. What else?’” he says. “My job was to say, ‘What else?’ and extract a whole list from him.”

Guertin then wrote a letter to his team about what he had learned so they could fix themselves instead of being mad. It’s important that when you get feedback, you recognize what to listen to, so Guertin goes back to his three questions.

“If those are the goals, then when you get feedback, you sort of match them up against those goals,” he says. “If someone says your service organization screwed up, then you get details about how they screwed up, and then you ask yourself, ‘OK, how is this thing working against us in answering one of those three questions?’”

In addition to taking criticism from your customers, you also need to seek out the internal critics.

“In a lot of companies, the people who tell you all the ways in which something will fail are not welcome,” he says. “But you need to have those people.”

Guertin likes to seek out one particular person to run his ideas by.

“He’s one of those people who can see every possible and conceivable way it can fail,” he says. “If I can walk into his office and discuss an idea and survive the failure discussion, and at the end of it, he’s starting to smile and look interested, I know we’ve got something.”

It’s not easy to welcome criticism, but it’s something you have to train yourself to do. Guertin suggests an exercise that an organizational development person showed him years ago to help set aside your defensiveness. That person told him to take a group of employees into a room and ask them to finish the statement, “My job would be better if _____.” Then write down all the things they say, but you can’t change or argue with anything they say. When you’re all done, you may have 60 or 70 things. Ask people to vote by secret ballot for the top five, and then you’ll see where the consensus is for problems.

“Since you’re the boss, if you don’t react defensively, and if you just write it down, the longer the meeting goes on, the more you’ll get things that are crucially important to them and really are bugging them,” he says.

Be inspirational

Guertin recently heard a quote from Bob Noyce, one of the co-founders of Intel Corp., who said, “Don’t be encumbered by history. Go off and do something wonderful.”

You have to keep looking beyond what your reality is to pull in people who don’t use your products yet.

“If you just pay attention to history, you’ve been misled about what the future should be,” he says. “Don’t automate the cow paths. Don’t look at the cow paths and decide where the roads ought to be. If you think originally about what customers want, you can sometimes see that an evolutionary step is the wrong step. You need to rethink what people do in order to imagine a new solution.”

Guertin points out the creation of the iPod as an example.

“Sony should have thought of the iPod,” he says. “They made disk drives, they made everything necessary to do it, but they missed it because they were encumbered by their own history. That’s one thing you don’t want to do.”

When you’re thinking revolutionary, your products will inspire people and get them excited. For example, the typical house has a kitchen, living room, dining room, bathrooms, bedrooms and a garage.

“A person who is not a designer can pretty much draw a house, but a great architect can draw a house that’s an inspiration to the person who lives in it every day,” Guertin says.

He points out Frank Lloyd Wright’s Fallingwater as an example.

“The houses of that day compared to Frank Lloyd Wright, you can see that he went to a place nobody had ever gone before,” he says. “That’s what great designers do.”

But often when you look at your own abilities, you realize that your skills are more preschool-like rather than Picasso-like.

“You have to hire people, who by their life experience, have learned how to do that,” Guertin says. “... You have to have those people in your organization.”

To get those people into your organization, you have to spark their passion in the interview process by asking what they’ve most enjoyed in their career. Their response doesn’t matter. What does matter is that you drill down by asking them to tell you more and to explain it in great details. You’re looking at what that answer stirs up inside of them.

“If it was, in truth, something that they really enjoyed and something that they learned a lot from, they’ll be able to tell me a tremendous amount about it, and the more they talk, the [more] enthusiastic they would be,” he says. “By the depth of knowledge they display and the enthusiasm that they show, I can tell what kind of person they are.”

If you can find that passion in someone, you know they’ll also find a passion for your business and products and work to make both more inspirational.

“People put on an interview face, but frankly, most people’s interview faces aren’t that good,” he says. “Passionate people don’t put on that face. … They show love and affection for doing a good job. If someone doesn’t show me love and affection and a good job in an interview, they probably won’t show it to me in the job.”

How to reach: Varian Medical Systems Inc., www.varian.com

Tuesday, 26 May 2009 20:00

Keeping it simple

Greg Muzzillo is a simple guy and believes business is the same way. He doesn’t want to waste your time and expects the same from you. So if you’re not going to buy from him, don’t give him the runaround.

“Just tell me, ‘I’m buying from the president’s brother, and he owns a print shop, so you don’t have a ghost’s chance in a ding dong of getting business here,’” says Muzzillo, president and co-CEO of Proforma. “Tell me that, and let’s get it over with.”

The same simple philosophy also applies to things like mission statements: Don’t make it long and drawn out with big fancy words that are impossible to remember.

“If they actually thought about the core element of what drives their business and the two or three or four things that they absolutely have to do well and that all of the other paragraphs and pages of their strategic plan hang off of and just focus on those two or three or four elements, then that would be simple,” he says. “Sometimes people don’t think in an outline fashion. They think in a paragraph and book fashion, and all those key elements are on page 45 and 83 as opposed to being a heading of two simple outlines.”

Case in point: Muzzillo’s mission is to make his franchise owners’ dreams come true. That’s it. Short, sweet and to the point.

“I think business is very easy, and I think business is very simple, … ” Muzzillo says. “If you make it simple and don’t make it complicated, then you can communicate that easily. They get it, and they get on board with it because it’s simple and easy to understand.”

This methodology has served him well. He started the print and promotional products supply company 31 years ago with just $200, and then expanded it with a franchising model in the mid-1980s to create a network of independent distributors who could work together to build stronger supplier relationships. His approach worked so well that Proforma has twice been named to the Inc. 500 list and today has more than 650 owners and sales of $350 million.

“We recruit great franchise owners and help our franchise owners’ dreams come true,” Muzzillo says. “That’s not complicated. It’s very simple, and there’s a lot of power in simple.”

Here’s how Muzzillo has grown his business through the years by sticking to the basics.

Get the right people

Muzzillo has given up trying to find every single right characteristic in a potential leader.

“You know, I quit playing God a long time ago,” he says. “I used to think I knew. Now I can tell you what we’re not looking for.”

Instead, when it comes to finding a new leader of one of his franchises, he focuses on what he’s not looking for — someone with a criminal background or someone with bad credit. That’s it.

Like most things with Muzzillo, it’s pretty simple. Taking the approach of knowing what you don’t want in an employee can often be more worthwhile than trying to make sure someone has every characteristic that you could possibly conceive.

For example, Muzzillo has been absolutely amazed by some people who have joined Proforma as franchisors, but he probably wouldn’t have given them the time of day had he been looking for specific characteristics instead of what he doesn’t want. One man in particular put millions of dollars of profit into Proforma’s pockets before he retired, but Muzzillo questions whether he would have made the cut with a different approach.

“If you would have said come up five key ingredients and if people don’t have these five key ingredients, they can’t come in — he never would have made it,” he says. “Give them a shot. I’m not smart enough to be God.”

When hiring employees, Muzzillo relies partially on personality testing.

“You want to make sure they have a good fit for the position, … ” he says. “It’s a little bit of intelligence testing and a little bit of personality testing to make sure we’re putting the right people in the right spots.”

The intelligence testing addresses different questions centered on math and reading. The personality profile asks questions to candidates to understand them more. Questions include: Do you prefer to work in a group? Does it bother you to work in a group? And did you steal from a previous employer?

Prospective employees also go through a couple of interviews, often with the entire team that they’ll be joining because that team doesn’t let just anyone join its family.

In addition to the testing process and interviewing, Muzzillo also says there’s one other way to get to the heart of a person.

“There’s nothing like a woman’s intuition,” he says. “You know you have it or you don’t, and I don’t have it, and I’m not trying to be sexist, but I think women have an intuition that men don’t.”

While he doesn’t do much of the hiring these days, when he did, he would ask the receptionist what she thought of a particular candidate and actually relied half on testing and half on his receptionist’s intuition to make a decision.

“She would know,” he says. “‘You should see how he acted in the lobby waiting,’ or, ‘You should have seen how arrogant he was,’ or, ‘He wouldn’t even wear the name badge,’ or, ‘Man, what a great guy’ — they knew.”

Above all, take your time in hiring and focus on one position and one person at a time.

“We can grow one good person at a time,” he says. “One good staff person at a time and one good franchise owner at a time can create a really big thing. Really, our focus is just one good person at a time.”

Trust your people

Back when the business was first starting, Muzzillo asked his franchise owners if they thought it would be a good idea to have some sort of franchise advisory counsel. They all liked the idea, and the first official thing that they did was kick Muzzillo out.

“They say, ‘Now, Greg, this is going to be our advisory council; we’re going to do it our way,’ and they kicked me out,” he says.

This was frightening and very hard for Muzzillo, who says that he was scared to even let them vote on what color the business cards would be.

While it may seem scary to let your people take over, it can also make life simpler for you, because they can handle things and make decisions that you otherwise would have spent time doing.

The key is getting the right people on the advisory council. He notes that sometimes you may have good intentions of setting a group for your employees, customers, vendors or, in this case, franchisors, but sometimes those good intentions are sidestepped by people who talk too much but don’t have anything to really say.

“Set up a formal network to listen to as opposed to random people,” he says. “Sometimes if you just want to listen to random people, the wrong people make the most noise, and it’s not necessarily the noise you want to hear. But if you set up a network of peers that elect and govern themselves, my experience has been that the cream always rises to the top.”

For Proforma’s council, it consists of eight elected regional representatives and then four elected officers, for a total of 12 people.

“When we hear from people that have been elected by their own peers and respected by their own peers, we’re not hearing the noise of people who would rather hear themselves talk as opposed to accomplish things,” Muzzillo says. “We’re hearing significant, meaningful talk from our top producers, who themselves know how to filter the good from the useless from the people that they represent.”

Council members are elected for two-year terms, but the elections are held each year, so that half of the council changes out annually. This helps ensure that it keeps running smoothly while still getting fresh blood involved.

Having a council of people that doesn’t include you also helps people buy in to your mission, vision, values and goals.

“The franchise owners proved to be loyal to the vision,” he says. “Not necessarily to my ideas but loyal to the vision, and at the end of the day, they’ve helped people become like-minded. They helped people who were rowing in the wrong direction start rowing in the right direction in a way that not even I, as CEO of the company, could get them to row. … Sometimes your peers can get you to see something in a different way that other leadership can’t get you to.”

For example, a while back, Proforma needed to find a new bank. While negotiating with one, the bank told Muzzillo that it thought it could make it work, but there was a certain wording in the franchise agreements that it wasn’t comfortable with, so the bank needed nearly all of the 120 franchise owners to change it.

“I remember thinking, ‘If we don’t get this done, I don’t know how we’re going to survive as a company,’” Muzzillo says.

Instead of trying to convince 120 people that they should do this, he instead went to the president of the advisory counsel and explained the situation. That person understood and convinced 118 of those people to change their agreements, which was more than enough to make the bank feel comfortable giving them money.

“To this day, that’s the franchise agreement that we have,” he says. “Those were the terms that helped us grow like a weed, and I know I never would have gotten it done without their peers telling them to.”

Focus on the best work

When you have so many different things on your plate, sometimes it can be hard to simplify and just focus on what you really have to in order to move the business forward.

“It comes down to what’s the value of your time,” he says. “All work’s not created equal.”

Muzzillo teaches a class about how to grow a business in his industry, and in it, he poses a question.

“If there are three desks in your office that you could go to, and one pays $400 an hour, one pays $40 an hour, and the other pays $20 an hour, what desk are you going to go to?” he says. “They all say, ‘Oh, I’m going to go to the $400-an-hour desk.’ You’re all liars. I tell them right to their face — you’re liars because the $400-an-hour desk is the hard stuff.”

He says that the $400-an-hour work can be filled with failure, such as making a big proposal for a big company and losing, being rejected for sales, and other painful things.

And this is true, no matter what industry you are a part of.

“There are some things that are $400-an-hour work, and there are some things that are $40-an-hour work,” he says. “A lot of people don’t think that way. A lot of people just think there’s work, and a lot of people just think there’s their to-do list. It all mushes together in their head. … Some of it is really going to get you a return on your invested time, and some of it’s just really going to be a waste of time, and yet, it’s hard to discern which those are.”

Sometimes you may think that the $20-an-hour or the $40-an-hour work is what’s most important.

“Sitting behind your desk and being CEO of Me Incorporated, with your name out there, oh man, that feels really important, and sometimes it’s easy to fall into doing the $20-an-hour work, the $40-an-hour work, avoiding the $400-an-hour work all day, and going home exhausted but never doing anything that is the right stuff all day,” he says. “The key really is for every businessperson to figure out what’s the $400-an-hour work, and what’s the $40-an-hour work, and figure out how to get rid of the $40-an-hour work and to do more of the $400-an-hour work.”

One of the biggest $400-an-hour tasks is getting business that you don’t have yet. He says you can do this by getting business that your current customers aren’t already giving you, getting new customers altogether, hiring salespeople to get it or acquiring your competition.

“It’s not going and calling on your favorite customers and bringing them another box of doughnuts,” he says.

Muzzillo has a rule he lives by that is also pretty simple.

“You will eventually get paid for the work you do,” he says. “If you love doing accounting … then you’re eventually going to make $20 an hour. Good for you, right? Because you’ve chosen the wrong thing. You can. You own the business. Nobody can fire you. It’s a choice. Doing the right thing is a choice. Nobody can fire you over the wrong choice, but if you make the right choice, it will show up.”

While it may be harder to focus on the right work because it’s scarier and often attacks your pride, Muzzillo says you can’t let your pride get in the way when you have those feelings.

“If you let your pride run you when you’re running your business, you’ll never be proud in line at the bank,” he says. “But if you throw pride out the window, you’ll be very proud in line at the bank.”

For example, when Muzzillo quit his job as an auditor at what eventually became Deloitte LLP to start Proforma, he had a lot of rough days.

“It was kind of embarrassing,” he says. “Here’s Greg. He used to be this big important auditor, and now he’s running around, schlepping around a briefcase, begging people to buy printing from him. It wasn’t prideful, but I said to myself, ‘Greg, you’re going to be proud someday in line at the bank, and the only way to get there is to not worry about being proud from 9 to 5.’”

Today, Muzzillo accredits his success to that rule.

“If I didn’t have this rule, I’d be nowhere today or my head would be falling off my shoulders because I have pride,” he says.

He says that instead of focusing on the today, you should focus on what your dream is. For example, he tells his franchisors to make their goal visible to them by writing down on a business card how much they want to make and in what year they’re going to do it. Then put that card in an easy to see place in their wallet, so every time they open the wallet, they see that card and are reminded of what the big goal is. He had one franchisor do this for 12 years and that franchisor reached $100,000, then $250,000, then $500,000, and that franchisor is now working on $1 million.

“Focus on whatever the big dream is, that big goal, and then try to think of all those things that are going to get you there, and try not to do all those things that are going to get in the way, and it’ll happen,” he says.

Lastly, sometimes when no other motivation is forcing you to focus on the right stuff, it just comes down to a good old, suck-it-up mentality.

“When I was building my business, it was sort of like going to the gym, which I hate to do,” Muzzillo says. “But once you get started, it’s like, ‘Oh yeah, now we’re going.’ Once you get into the groove of selling, you’re in the groove. Once you go to the gym, it’s kind of like half the battle — the rest is easy.”

How to reach: Proforma, (800) 825-1525 or www.proforma.com