We know the importance of creating a safe work environment filled with opportunities to learn and grow. Employees want to feel both appreciated for their contributions and have the sense that they are a true and valued part of the team.
Many components go into creating this kind of culture in an organization, but there is one method that is both easy and carries with it the potential for longlasting benefits. That would be the act of gathering your team around a meal.
Sharing food together is a foundation of communities both small and large. From families at the dinner table to block parties and neighborhood cookouts, people love to eat in social environments. Bringing people together around food provides a relaxed, familiar environment for communication.
We tend to eat with people we like or will come to like. So, why not bring that environment to the workplace and give everyone the opportunity to share food and build the bonds that lead to liking one another?
Bond over bagels and boost your bottom line
As CEO, you invest a relatively small amount of money in pizza (or ice cream or eggs and bacon), but you are actually investing deeply in your people. While eating together, employees build connections and develop relationships. They share stories about their days, their families and, yes, their work. These interactions can help them feel connected to each other and engaged with the organization that made it possible — the organization that is recognizing and appreciating them.
Engaged employees have a high level of emotional connection to their work and feel a great deal of fulfillment in what they do. They trust leadership, feel recognized for their efforts and are satisfied with the direction of their career. Pizza is, of course, only part of the puzzle, but it is an excellent place to begin the building.
Play an active role
As CEO, you are responsible for driving these efforts and, as much as possible, participating. When we leaders are present, it helps send a positive message to our wonderful people that the event is important, and that they are valued members of the organization. Now, when you attend, don’t sit with your fellow executives. Simply being present isn’t enough. Sit with people you don’t see or interact with very often, if at all. Ask questions and most importantly, listen.
I often sit with our production workers who I don’t see in my daily office routine. It gives me the chance to ask personally how things are going in the plant, ask if they need anything and listen to their stories about the latest company-sponsored soccer team victory. These interactions bring me great happiness and build trust between us. We see each other as individuals and that is key to building a strong culture.
Here are some tips to bringing your team to the table:
- Events should be routine — A colleague once spoke about his siblings’ ritual of gathering the first Sunday afternoon of every month “whether they liked it or not.” Of course, you hope your employees like it, but gatherings need to be scheduled and routine to reinforce their importance.
- Include recognition — Serve breakfast before monthly employee meetings and recognize birthdays, employment anniversaries and business successes.
- Celebrate little things — There is always a reason to celebrate, even if it is just a beautiful summer day. How about setting up a sundae bar or caramel apples for an afternoon treat?
- Feature families and special interests — Company picnics for families are nice events, as are lunches that highlight employees’ diverse cultural backgrounds, such as our Cinco de Mayo and Indian celebrations where employees help prepare ethnic dishes to share.
- Be involved — As I said earlier, being a part of these meals is important for us as leaders of our organizations. We help set the tone. I have seen shared meals generate tremendous goodwill and help build the culture and community needed to be a successful, growing organization. Be part of the experience.
Joseph Slawek is the founder, chairman and CEO of FONA International, a full-service flavor company serving some of the largest food, beverage, nutraceutical and pharmaceutical companies in the world.
When Dan Myers and his partners capitalized Bridge Bank N.A. in 2001, it was the largest new bank IPO in the state of California at the time. More impressively, they did it during the most brutal economic downturn in Silicon Valley’s history. Even then, the biggest challenges were still ahead.
“We expected to grow rapidly, and based on experiences at other banks that were also somewhat recognized as high growth models, we understood and appreciated that we would transition rather quickly from a de novo, to a $250 million bank, to a $500 million bank to $1 billion bank, and the infrastructure and risk management challenges inherent in each of those milestones were significant,” says Myers, the founding president and CEO of the San Jose-based company.
In addition to its differentiated business model, which focuses exclusively on business – not on retail, the bank’s strategy involved executing a high-growth business model. From the beginning, the founders were cognizant that the company needed to be able to handle change extremely well if it were going to be successful with this vision.
“We had to be adept at change because regardless of economic environment, the company was going to go through some accelerated phases of growth in an accelerated manor that demanded we be good at change,” Myers says.
To ensure that everyone in the company was proficient at change management, Myers and his team knew they needed to weave it into the culture of the bank itself.
Stay several steps ahead
To handle the continuous change that comes with fast business growth, Myers realized that the bank couldn’t afford to not plan ahead when it came to its strategies, infrastructure and growth goals.
“You have to think ahead, not only a couple of quarters or to the end of whatever fiscal year you’re operating in,” Myers says. “You have to look down the road one to five years, which most banks do on a strategic basis. But their five years we’d be looking at in one to two years.”
Proactively building up your infrastructure prepares your company for fast growth by enabling a smoother transition from one phase of growth to the next. This allows you to focus your attention and resources on the core business, such as finding good clients that fit your target profile, soliciting new business and producing the results for its shareholders, rather than trying to constantly re-adapt a long-term strategy.
“We would never want to be in a position where we’re playing catch-up,” Myers says. “So we’d build infrastructure, we’d build capabilities before we actually needed them. When it came time to execute at that higher level, from an internal cultural management perspective, we would already be there.”
To develop a culture of forward-thinkers, it’s important to talk to employees about what kind of growth you are anticipating so they understand why it is important to create a culture that is accustomed to change.
“A lot of that success was focused on explaining that to the bankers that we had already hired, the founders and making sure that as we brought people in they understood not only were we going to execute a sound bank business plan but we were going to do it in a way that would anticipate this high growth and prepare for it,” Myers says.
Myers and his team also spend a lot of time talking to employees, customers and stakeholders about how the company’s value proposition is being received by clients and the bank’s more active referral sources in the community – that includes professional services groups such as CPAs, attorneys, venture capitalists and investment bankers, in addition to the management of all the companies who bank with Bridge Bank on a direct basis.
Having this dialogue is helpful to stay on top of trends and shifts in thinking among key groups in your industry, allowing you to adapt proactively.
“We took it a level higher and said we want to be even more differentiated in that we’re going to be the only true professional, business bank operating at the community bank level in our region,” Myers says.
“So it’s the constant, ongoing conversation are we offering the value proposition, products, services that are relevant in doing what they’re supposed to do for their clients,” Myers says.
The company recently expanded this effort to include brand analysis, which seeks input from its stakeholders and also from prospects that it didn’t manage to turn into customers.
In today’s tough environment, it isn’t easy to attract new clients and retain them for growth, so it’s critical to be part of the industry conversation if you want to be successful tomorrow.
By planning ahead, the bank has been able adapt quicker than many competitors in times of great change, including through two significant economic downturns.
“It’s making sure that we’re questioning those out in the market and getting feedback to expand our target,” Myers says.
Be clear on strategy
When looking at how to set up Bridge Bank, Myers and the other founders analyzed the structure and organization of other local de novo banks — banks that have been in operation for five years or less. What they figured out was that in California, the average de novo community bank would grow to anywhere from $300 million to $500 million in size in a 10-year period. Yet Bridge Bank planned to grow even faster than that.
“We were intending to be roughly double that in the same amount or a lesser amount of time,” Myers says. “So our time horizons were moved up a little bit with the same challenges imbedded in them.”
To execute this growth efforts, he felt it was even more important that the company set clearly defined goals for the bank and its employees for how they would achieve growth.
“You need to understand your organization, not only what it really is — and that’s a challenge, too — but where you intend it to go,” Myers says.
He says that much of his time goes toward developing a culture and communication system to make sure the growth strategy and vision remain clear for everyone.
“There can be a disconnect that develops over time,” he says. “You simply have to encourage the folks that you rely on to run various aspects of your business to keep you informed in an accurate way so that you can manage accordingly.”
It’s beneficial to have a communication system that provides top level management accurate, honest input and feedback so that your top leadership can best understand the organization as it matures. Because fast growth companies tend to be adding new employees all the time, part of that involves devoting significant time and resources to encouraging open communication within your organization.
In other words, talk to people.
“I know it’s a simple concept, but as you grow very rapidly you have people coming in from different organizations,” Myers says. “You have a constant mix and evolution of culture. You really have to proactively develop lines of communication, methods of communication and provide people with the tools to communicate effectively.”
This helps you avoid falling into what Myers calls the “big bear trap” of pursuing areas that are not consistent with your primary model, a pitfall he’s observed for many banks.
“Over the years, it’s been important to remind our folks from top to bottom in the organization that it’s not only critical to focus on what we said we’re going to do,” he says. “It’s to have the discipline to stay away from things that we know are not complementary, which again is running counter to what most other larger banking organizations have done even in the last 10 years.”
Engage people in decision-making
As the second or third startup for many of its founders, Bridge Bank has had the benefit of an experienced leadership team throughout its growth. Yet from this experience, Myers and his partners have also learned that leaders cannot be the only ones coming up with ideas if they want their company to flourish. It is collaboration at all levels that gives companies the greatest advantage when planning for the future.
“Our best solutions for managing the challenges as the company continues to grow don’t necessarily come from the top,” Myers says. “Some of the best ones come from team building and teamwork at all levels of the company, top to bottom, as they work at their own individual levels on different aspects of those challenges.”
By asking people to play a more active role, you empower them to make decisions so they can take initiative to solve problems and come up with solutions or ideas proactively. Being able to acquire clients and build the bank’s business today relies on this efficiency in decision-making. Therefore, the bank’s culture is built around continuous improvement and finding new ways to grow its value proposition, no matter what the economic climate looks like.
The No. 1 driver of this culture is recognition, both verbal and financial.
“It lets us all continuously look for ways that we can improve everything that we do in a positive, constructive context so that we can execute better, we’ll take better care of our clients and we’ll have better performance not only for our shareholders but then how that comes back to our employees in terms of the ways they benefit with their relationship to the bank, including compensation,” Myers says.
“Although we have an economic recovery under way, it’s tepid at best. Therefore, your growth aspirations are really driven by your competitive positioning and abilities to take business from competitors. The overall growth in the economy isn’t going to float all boats.”
Engaging people in your company’s growth goals is more successful when it comes in the form of enthusiasm rather than censure. When you reward people for bringing ideas to the table about how your company can improve its performance, it helps them engage in innovation as a challenge to do better rather than a disapproval of the way thing are being done.
“Unfortunately in some companies it is a form of criticism,” Myers says. “You can do this better — do it better.
“Going hand-in-hand with the collaboration and teamwork, if they identify a challenge within the company, we encourage them to recommend a solution and a way of dealing with that challenge at their level with decision-making authority. That encourages an efficient resolution of whatever the challenges but also understanding that there’s accountability that goes with that.”
Today, Myers says the bank continues to focus on developing its bankers and its change management culture to stay competitively positioned for high growth.
Through continuous effort to take better care of its clients, the bank not only survived through the worst of the financial downturn but actually had its best years for new client acquisition and issuing new credit commitments. Over the last 10 years it has grown organically to some $1.2 billion in assets in 2011, an increase of $131.3 million from just the year before.
“It’s that core competency of change management that served us well when we launched in worst economic environment in Silicon Valley, which has since been bested by the great recession,” Myers says.
“When the banking industry as a whole was really taking it on the chin from a PR and creditability perspective, we had our best years at bringing new clients in, which I think says something about the validity of our value proposition, how it resonates in the market and how our people have executed in delivering that value proposition so that it’s appreciated for what it is.”
How to reach: Bridge Bank N.A., (408) 423-8500 or www.bridgebank.com
- Stay ahead of the game.
- Set clearly defined goals.
- Use teamwork to make decisions.
The Myers File
Founding president and CEO
Bridge Bank N.A.
Born: Dayton, Ohio
Education: DePauw University, liberal arts. Pacific Coast Banking School, Seattle, Wash.
First job ever: I bailed hay part time.
First job after college: Pacific Valley Bank in San Jose, Calif., as a reconcilement clerk
Who are your heroes in the business world and why?
Entrepreneurs. They have the vision, the can-do-anything attitude, and perseverance that is the basis for new company and new job creation, even in the face of monumental challenges in today’s environment.
What do you do to regroup on a tough day?
Take our golden retriever, Belle, on a long walk. She’s a good listener.
What is your favorite part of your job?
At Bridge Bank, I get to meet and work with so many exceptional and interesting people, including the entrepreneurs, business owners and all of the top tier career professional business bankers that have joined me at Bridge Bank.
Believe it or not, one of the most overlooked characteristics of leadership is the ability to draw and motivate followers. But without followers, you aren’t really “leading” are you? In business leadership, this skill translates into the ability to get your employees to “buy in” to the mission and goal of your company or department.
Outside of the workplace, your employees are all very different individuals, each with their own set of life goals and often goals of other organizations with which they are affiliated. So how do you motivate them to concentrate on your company’s goal for the time that they are at work?
You could demand that they do so, but this kind of top-down brute force only goes so far — and usually results in employees faking devotion to the company’s cause for fear of losing their jobs.
The better option is to genuinely love and appreciate your staff. That sincerity will shine through, and in return, your employees will want to help you achieve your goals.
So if you are interested in real ways to motivate employees to buy in to your vision, implement the following actions.
1. Go heavy on the accolades.
A simple “well done” goes so much further than you would think. Deep down, everybody wants to be recognized for their hard work. If you don’t take the time to give voice to your appreciation, it can rot away at your employees’ motivation and overall happiness at work.
Make recognition of a job well done part of your company’s culture. At staff meetings, open up the floor to team members so they can brag about other members of the team or inform the team about an action that another member took that would normally go unnoticed. Even if you think you are good about this, look to improve. Don’t be afraid to lay it on thick!
2. Be an open book.
You would probably be shocked to hear what your employees think your schedule looks like. If they don’t know what you are up to, they are more likely to assume you are on the golf course than off at a three-day conference trying to soak up all the information you need to lead the company to success. That’s just the way it is.
Take pains to avoid being closed off from your employees. Be open. Be available. Be friendly. Let them know what you are working on. The more your employees know you, and like you, the more likely they are to invest in your vision and actually desire to see it come to fruition.
3. Offer perks.
Perks are not the same as rewards. Rewards are prizes that your employees can receive for a job well done. These are important, and you should have them available in the form of company-wide and department-wide games, etc. But perks are something that employees get simply for being a part of your team, and they are that much more effective at building motivation and loyalty.
When somebody is rewarded for effort, they feel accomplished and acknowledged. But when someone is offered a reward simply for being a part of the team, they feel gratitude and team spirit. I offer my employees free exercise classes and recently installed a cafe in our company headquarters. These are perks that my employees can enjoy just for being part of the team, and it helps build overall happiness and motivation to achieve company goals.
Give this a whirl in your company and watch as the culture surrounding your company’s vision shifts in a very positive direction.
Joy Gendusa is the owner and CEO of direct mail marketing firm PostcardMania. Joy began PostcardMania in 1998, with nothing but a phone and a computer, never taking a dime of investment capital. Since then, PostcardMania has expanded to offer its clients more services including website and landing page design and development, e-mail marketing and full marketing evaluations — all while continuing to educate clients with free marketing advice. Contact her at www.postcardmania.com.
The fact that Tom Strauss sees some major flaws with the national health care system shouldn’t just raise eyebrows for hospitals or the patients in them. As CEO of one of the largest integrated healthcare delivery systems in Ohio — employing 10,000 people and more than 1,000 physicians across seven hospitals — Strauss knows the problem is one that affects every person in the country.
“I think everybody would admit that what we have in health care in this country today is unsustainable,” says Strauss, the president and CEO of Akron, Ohio-based Summa Health System. “When you’re spending $2.5 trillion, 17.6 percent of the GDP on health care and the health premium now for a family has exceeded what a minimum wage worker makes in a year — think of that … it’s going to affect the way that we do business.”
The glaring problems with the current care model have been compounded by the increasing number of people without health insurance, which creates a shrinking base of patients from which hospitals can generate any income — the sick ones.
“We’re really a sick care system, which means when we get paid traditionally in hospitals, it’s only by treating a bunch of sick patients,” Strauss says. “So if a good flu season rolls in … our beds are full and we’re billing a lot of revenue, but we have a lot of sick patients. There’s something wrong with that picture.”
With mounting costs, anticipated reimbursement declines and payment model that rewards based on sickness rather than health, Strauss and his team finally said enough is enough. After spending two years devising a new vision for the organization to evolve and improve the system, Summa Health launched a pilot program for an accountable care organization, called NewHealth Collaborative. In January 2011 it moved 11,000 patients in its SummaCare Medicare plan to the new collaborative.
“Some of these places are holding onto the revenue as long as they can because they believe there is a way to survive that,” Strauss says. “We don’t think there is.
“So with us, it’s what do you do to transform yourself to focus differently to create true value in health care.”
Here’s how Strauss has led the implementation of the accountable care vision across the seven hospitals.
Because Summa Health is one of the first organizations in the community to create a prototype for accountable care organizations, Strauss knows it will be an example for future organizations in the way it implements its vision and strategy. To make sure the shift toward population health management is successful, one of the first steps is putting in place the right tools, processes and infrastructure to support it.
“You’ve got to know where your vision is, where you’re going and what your objectives with the strategy are and then put in place the executing tactical plans to make that happen,” Strauss says.
Strauss says that a key problem with the old system of that care was it could be very fragmented. With different physicians in charge of different services, handing off tasks and having limited knowledge of a patient’s needs, an estimated 30 percent of what is conducted in health care and in hospitals today is unnecessary.
So part of the transformation has been changing the organization’s siloed infrastructure to create multi-disciplinary approach to services, eliminating the overtreatment of patients and saving costs by keeping everyone on the same page, including the patient.
“People like me have to start to prepare ourselves structurally to be able to do these things for population health and population management,” Strauss says.
“What’s nice is it’s easier to do the right care, the appropriate care, and eliminate this 30 percent that’s unnecessary than to not do it. So we’ve made it easier for physicians to do that.”
Frequently inefficiency is the result of lack of communication and knowledge-sharing. So a critical step to becoming more organized and efficient is looking for ways to improve your technology.
“Some organizations are used to living on very high revenues,” Strauss says. “When you realize that eventually that is going to go away, you have to reposition your organization to be able to function at lower rates of reimbursement.”
Strauss says that the organization is investing $80 million in IT over the span of five years. It has already added a new call center so physician’s phones roll over to the 24/7 call center with care nurses during off hours. The system’s Akron City and St. Thomas hospitals also became some of the first in the country to have computerized physician order entry so physicians can access and manage orders through a portal at any time.
The other piece was implementing new evidence-based medicine protocols and procedures in the care delivery process to integrate the 10 service lines for increased efficiency.
By structuring your organization for more effective collaboration, you can align the people on shared goals and your new vision. At the same time, you give people a clearer idea of how their role contributes to the big picture of your mission and vision.
“Those are the kinds of structures that you have to have in place to be able to thrive under this new health care reform move towards population health and population management,” Strauss says. “So it’s more than just technology.”
Be an open book
Once they came up with the model, Strauss and his leadership team presented it to the physicians and the board and held retreats to walk employees through the vision, its benefits and how the transformation would occur.
“I think most physicians understand that the old way of doing things is not very effective,” he says. “The days of fee-for service — the reimbursement is just going to be cut and cut and cut. It will be death by a thousand cuts. They understand they can’t survive the way that it is today, so we have to do something differently.”
With most people on board, the real challenge was making sure the 400 physicians and other employees involved could understand, execute and share the vision. Developing strong partnerships among the hospitals and other care providers requires strong alignment on goals as well as new patient care protocols and procedures. So for Strauss, the key to success has been having the organization be as open as possible with employees about the vision, what it involves and any changes being asked of them.
“It’s creating a vision for the future and getting people to understand what that vision is and then educating the components to engage in that process when it might be different than what they were used to in the past,” Strauss says.
“If you don’t, and they don’t believe in where you are going you will be unsuccessful. So for us, we really took the time and even after it was implemented went back to reinforce the vision of why this is so important.”
By explaining how a new vision complements your organization’s core values, mission and culture, you can get more buy-in by aligning people behind shared goals as well as a shared culture. So aside from instituting training and education programs for employees, Strauss has spent a lot of personal time working to put the vision into a clear framework. His efforts include teaching a class for employees called “The Philosophies of Summa,” speaking at monthly new employee orientations and hosting monthly “Talks with Tom” for several hundred employees with representatives from each department.
“There are no secrets,” Strauss says. “I give them financials. I talk about what’s happening good and bad and ugly, and it’s been very effective. It’s information. It’s listening. It’s being by their side and nurturing them when they are down.
“We believe that the employees that work here are the soul of the firm. Your employees represent your greatest strength or your greatest weakness. So they have a culture that supports them — servant leadership — and it says if I’m not serving that patient I’m going to serve you.”
Strauss says that another goal of the open communication is to reciprocate the attitude and culture he wants to drive in the system, which is one of servant leadership and mutual caring.
“The moment of truth is the first 15 seconds when you come in contact with a patient in need, and it’s how you seize that moment to make the difference to satisfy their needs,” he says.
“If you’re too busy or you’re having a bad day or the Browns lost or the Steelers lost, and you translate that at work to your patient, we will fail as an organization.”
To strengthen the mindset they want all employees to have, Strauss has charged managers to be more active in talking to employees and patients to see what their needs are and helping them carry out the vision for accountable care.
“If you’re engaging your work force to go after a vision, then you need to give them as much information as you can about the reason for that vision,” he says. “That’s one of the pieces that I love to do.
“We’re actually making a concerted effort to do rounding with a purpose. You’re going to see every leader at Summa being out more on the floor talking to patients, talking to employees both on satisfaction and safety.”
But once you give people the information, you then want them to drive its success as much as possible. To help employees feel like they have a stake in that vision so they will drive it with enthusiasm, Summa Health has tied more employee financial incentives to the positive patient outcomes it’s seeking from the new care protocols and procedures.
For example, all employees in the system receive a bonus each year based on the company’s financial performance and levels of patient satisfaction.
“We’ve paid out millions of dollars to the employees,” Strauss says. “This is beyond managers. This is all of the employees. We want them to feel like if they produce, if they work with us, if they exceed the expectations of the patients — that’s the definition of quality — they will benefit, their organization will benefit, and we will be the provider and employer of choice.”
Eventually, seeing the positive results of changes helps employees realize that your vision is a viable one.
As a result of its technological innovation, the NewHealth Collaborative received 2012 certification from the federal government for its ability to meet standards of meaningful use guidelines. Its Akron City and St. Thomas Hospitals will acquire $5.1 million in federal incentives, which will be distributed to the hospitals and its doctors.
“In the old days you would just throw services out there and market those services and try to grow this population of sick patients,” Strauss says. “Now we’re going to get paid on the population’s health.”
Although he’s been with Summa Health for 13 years, Strauss believes that the organization is just starting to scratch the service in the excellence it can achieve by transforming the community’s health. Despite the uncertain future of health care reform, he sees more and more people are now realizing that action needs to be taken to change the industry.
“When you deliver that kind of quality and safety and you see the savings we’re starting to generate, you realize that there’s an answer here,” Strauss says.
How to reach: Summa Health System, (800) 237-8662 or www.summahealth.org
1. Put the structures in place to implement your plan.
2. Help infuse the vision with transparency and an open-door policy.
3. Offer employee incentives to drive results.
The Strauss File
President and CEO
Summa Health System
Education: Duquesne University for undergraduate and graduate schools. B.S. in pharmacy in 1975 and a doctorate of pharmacy in 1978
What do you like most about working in health care?
That you are caring for patients at their most vulnerable time, you can make a difference in every patient’s life and you can make a difference in employees’ lives. We’re the largest employer in five counties, so for us we take that pretty seriously. And improve the health status of the communities, not only once you educate and take care of patients but you can go out into the communities and you can make a difference.
What mistakes can you make in a growing business?
The first thing you’ve got to realize is that you can’t make everybody happy. That’s the hard one, especially for somebody like me who really prefers to have people holding hands singing ‘Kumbaya.’ The other area is trying to micromanage. You cannot in this environment micromanage. You’ve got to empower your people and let them go. They will make mistakes and that’s OK as long as they learn from their mistakes. I would think trying to stay in the old system, trying to stay in the old ways was a mistake that got us starting to transform toward population health and population management.
What’s the best business advice you’ve received?
Love what you do. If you think about the hours we all work, that gets pretty challenging if you don’t love what you do because I probably put in as many hours here as I do at home, unfortunately. So that’s one. Make sure you love what you do, and if you don’t love what you do, go find something you will.
When Paul Gaffney became president and CEO of AAA Northern California, Nevada & Utah, the company had more than 4.3 million members, a century of history and $2.6 billion in revenue. At the same time, it was essentially a startup.
That summer the milestone decision had been made by the California State Automobile Association to split up its two big operating businesses, a motor club and an insurance carrier, into two separate companies.
“Whenever you have things combined that have some different business drivers, you end up being inefficient in surprising places,” says Gaffney, who assumed leadership of the auto club in 2010.
He wasn’t surprised to find that the 111-year-old company had gravitated toward a hierarchical culture, but he realized that the transition was a perfect time to reengage employees at the “new” company in a culture that was participative and would drive the kind of ideas needed to excel in the service business.
“So we really wanted to invert that leadership pyramid and put the folks who are on the front lines with our customers at the top,” Gaffney says. “That’s a change for people. People actually like where that’s going, but it’s different than their historical experience. So we’ve had to do a lot of work to explain to people what we mean by that.”
When you’re coming into hierarchical culture, not everyone in the organization may be jumping to start sharing his or her ideas. So the first step for Gaffney was to get people at all levels of the company motivated to play a more active role.
One way to do this is by reminding people how they fit into your company’s vision and mission. Because the company’s heritage had been lost a little bit when it was tied to the insurance business, Gaffney began highlighting aspects of this history using storytelling, for example, the fact that the club invented the eight-sided stop sign.
“We have a historian on staff and we try to make those rich elements of the history of the club very apparent to our employees and in our Via (member) magazine,” Gaffney says.
He encouraged his leaders in the organization to utilize meetings and other internal communications as opportunities to share member stories and anecdotes.
“One thing that we’ve done very proactively is to make sure that our club member is always front and center, even if the thing that we’re working on might seem so ‘back-officey’ that you don’t know how it could be connected to the member,” Gaffney says. “So we tell a lot of member stories. That’s a very important part of our culture, is to remind everyone why we’re here.”
Sharing stories about your company helps employees to connect to your customers and your business in a more participative way, because it facilitates a more personal response.
“It just seems to work well though because it is a tool that lowers the barriers to having dialogue versus monologue, because people can tell you what parts of a story resonate with them, what parts they have questions about and what parts trouble them,” Gaffney says. “Storytelling just seems to be a medium that unlike PowerPoint, really draws people in.”
Another way to motivate employee participation is to ask more questions. This helps draw out people who may be more reserved in bringing their ideas to the table.
“When you ask folks, they usually have things they want to tell you, but when you don’t ask they generally don’t want to bring them up,” Gaffney says. “It’s the rare individual that will proactively bring up something that they know could be improved. But when you ask them, most people respond to that invitation.”
Gaffney now asks everyone in a leadership role at the company to double their question-to-statement ratio.
“The way we find inefficiencies is we try to make the environment one that is really conducive to everyone being curious, because you can’t find inefficiencies by having some specialized group looking for them or by expecting that a couple people at the top will do things,” Gaffney says. “You actually have to have the whole company constantly looking at things and saying, ‘Why do we do this that way? Could we do this more efficiently?’ That has yielded for us a lot of great opportunities that we might not have otherwise uncovered.”
Get with your top people
Gaffney knew his top leaders were historically used to a top-down culture. So to facilitate the transition, he has spent a lot of time coaching the company’s management to help them shift toward a bottom-up leadership structure.
“I spend a lot of time with the folks at the top couple layers of the official org chart, just talking to them about what it means to be in service to the folks who are in service to our customers — so in service to them rather than in charge of them,” Gaffney says.
Providing a model for what you want leadership to look like is important in helping people evolve their approaches and buy into the changes.
One way Gaffney offered this was by implementing a training program to help people examine different approaches to leading. He also decided to run the program personally.
“It’s a leadership development program that is based on reading about leaders in other situations and engaging in a group dialogue of how did those leaders approach the situation, and how did they model the kind of leadership that we’re looking for,” Gaffney says.
In the process, Gaffney realized he had to make some changes in his own leadership style to be more inclusive. As CEO, you are the number one model your managers will look to copy.
“In wanting to be a great role model for how we want every manager and leader around here to behave, that’s helped me even more focus on ‘Hey, am I asking enough questions and reducing the amount of statements that I make?” Gaffney says. “Becoming more aware of that boundary line of when do you really need to tell the organization to do something versus giving it a lot of room to be a healthy organism — that’s a line that is difficult for any CEO to find.”
Because his ideas could easily dominate the conversation, Gaffney says he must make a concerted effort to delegate lower level projects and push decision-making out in the company.
“I don’t think there’s any circumstance where the CEO doesn’t make a couple calls, but out of 100 things, is it 12?” Gaffney says. “Certainly a couple years ago, I think I would have been more toward the ‘We’ve got to get this done and we should do this this way,’ and moved more toward ‘You know what there are only a few things that I’m actually going to weigh directly in on and I’m going to work more aggressively on the other things to make sure that the way that those decisions are getting made is as participative as possible.’”
Although it may require some personnel changes — which it did at AAA — Gaffney says that the real driver of the change in your leadership team is getting people to see the benefit of doing things differently. And this is a more gradual process.
“What I try to do and what I encourage the people who report directly to me to do is to be very aware that we’re asking for a transition in a collection of learned behaviors,” Gaffney says. “To me, the successful way to coach folks through that is not to criticize their historical approach but to ask them some questions about how they might do things differently if they really wanted to be in service to others rather than in charge of others. That takes a lot of time but it can be a very important ingredient in the transformation.”
In this kind of transformation, Gaffney recommends making sure that your top leaders are high in their sense of urgency. Those will be the people who will be worth the big investment of your time.
“Do they tend to be the kind of person who when there’s something to work on, they own it?” Gaffney says. “When there’s something to work on, they believe they have the capacity either to work on it themselves or find the right kind of help to work on it, versus someone who has low urgency and someone who tends to look at circumstances outside themselves to explain why they can or cannot fix something. It’s very difficult to help someone if they’re low in their own sense of urgency. It’s very unlikely that my investment in them is going to help make any change.”
Create an idea system
A bottom-up culture is most successful when you can actually implement ideas into your company to solve problems, innovate and improve. So with more people involved in the decision-making process, you need to teach employees how to evaluate ideas so the best ones rise to the top.
“Everyone is in touch with the emotional goodness of coming up with an idea,” Gaffney says. “It’s a little bit more of a challenge to get people to balance their emotional enthusiasm for something that sounds right and seems to intuitively be a really good idea and then put it through the rigor of could it possibly be big enough for us to actually work on and be excited about.”
Gaffney says to first acknowledge the quality of the idea, particularly if it’s being delivered enthusiastically, then ask questions to turn the thought process back on the employee.
“When trying to flesh out an idea — even if I know instinctively that it could never be big enough or it couldn’t make a profit — instead of sharing my point of view, I try to be in a place where I ask the employee, ‘OK, if you were to run this business, how much do you think you’d sell this for, and how much do you think you’d sell, and how would you go about figuring that out, and what did you think the costs of this thing would be?’ Really what I’m trying to do is get all 2,200 of these folks to think through those things all the time, even in their day-to-day operation.”
Even if the idea doesn’t end up working, pushing employees to find solutions themselves teaches people how to come up with ideas that will work.
“I’m sure there are some people who would rather not have to do that, but those ideas don’t make it anywhere anyway,” Gaffney says. “I think a lot of people react to that by realizing, ‘OK maybe this one wasn’t good enough, but I now know a lot more about what ingredients need to be in my next idea.’”
That also pushes decision-making down in the organizations, which frees your senior leaders up to focus on other priorities and pursue new opportunities as well.
“I think the number one advantage is people have wider ranges of responsibility now,” Gaffney says. “They go to fewer meetings. They have to prepare fewer presentations and that inspires them to just get things done.”
As an example, the company was able to deploy its new finance, HR and payroll backbone in just four short months.
“We were able to do that that quickly because the people that had to do the work had that insight that ‘Hey, there are so many opportunities here, we need to unlock them right away and take a little bit of risk in moving quickly onto a new platform,’” Gaffney says.
“It’s perhaps an inevitable consequence of making an organization leaner, but it’s also the kind of environment that you encounter in a startup, where there’s more work to do than there are people and you have good people in the roles. You give them authority. You let them make decisions; and in my experience people embrace that kind of environment with great enthusiasm.”
How to reach: AAA Northern California, Nevada & Utah, www.csaa.com or (800) 922-8228
1. Engage people through dialogue
2. Be a model of participative leadership
3. Help people evaluate their own ideas
The Gaffney File
President & CEO
AAA Northern California, Nevada & Utah
Education: AB in Computer Science from Harvard College, Cambridge, Mass.
What’s the best piece of business advice you’ve gotten?
Essentially to never stop learning. That has come in a variety of forms, some of them more harsh than others. One of them is to remember that even in moments of great success, you’re just a human being and something else is going to go wrong tomorrow and you better not rest for any period of time on success.
Why do people like working for you?
I’d hope they would tell you that we try to do this in a pretty fun way, and it’s an environment where all 2,200 people in the company speak to everyone else on a first-name basis. I’m Paul out in the field. I’m not the president. And I think that helps people see their work as a pretty natural extension of their life.
What do you like most about your job?
What I love about this company and the businesses that we’re in and the people that are in it is we have no inherent conflict between any other party and the needs of our customers. We don’t have stockholders to please – this company is essentially owned by its members. We have a pretty clear business model that articulates making just a small amount of profit each year that helps sustain the long-term viability of the company and provides great value to members. We don’t sell anything, and as long as I’m here we won’t sell anything where the nature of the sale benefits someone in a way disproportionate to how it benefits the customer. It’s really a blessing to not have any of those conflicts. And most other business it’s not nefarious, it’s just easy for those conflicts to creep up.
Mike Kahoe was not happy with the 15 percent increases for health insurance premiums that his company, Group Management Services Inc., was facing each year. It was time to take control to lower health insurance costs for the 50-some people on the plan.
Once Kahoe, president of the $24 million professional employer organization, searched for some information, he was swayed over to a plan of wellness for his business. He believed he could cut the health insurance premiums significantly ? and there were other benefits.
“At the end of the day, you have a bunch of people who you work with that are healthier and happier,” he says. “And that means happier customers.”
Here are some of the steps he took to reach his goals.
“One of the first steps is to get nurses to test everybody’s cholesterol and blood sugar levels, height and weight and so on,” he says.
This will establish some base-line statistics that you can work on to improve, and the recommendation that some health behaviors need to change has more substance coming from a health professional.
“You should use nurses rather than staff,” Kahoe says. “A lot of times, it’s delegated to an HR person who tells you to quit smoking or says you should quit smoking. I just don’t think it’s very powerful. I think when a nurse or a doctor tells you, it’s a different story.”
The company leader needs to support the efforts.
“Don’t be afraid to get involved in it personally. Take a look at yourself first,” Kahoe says. “People tend to replicate your behavior; for example, if you’re out back smoking a lot, I think it’s bad for the company.
What Kahoe found out about his personal base line became a driving force for the program.
“Honestly, at the time, the thing that was most shocking was that I might have been the biggest violator of all,” he says. “I was smoking two packs of cigarettes a day, working hard and not watching what I was eating. I was also on the obese level, and I really didn't like that term associated with me.”
The second step is to develop the programs by getting information from health sources on popular initiatives such as smoking cessation, weight loss and healthy eating programs.
“We just put together some programs and some incentives for people to quit smoking and live healthier lifestyles.” Kahoe says. “We had some weight-loss competitions and things like that.”
As soon as he knew what his initiatives would be, Kahoe devised ways to make it easier to stay focused on goals.
“There has to be a carrot, and there has to be a stick,” he says. “I think the people that are making bad choices in their behavior should pay a little bit more for health insurance. I mean it takes a little bit of work to be healthy, to get on a treadmill for a half-hour a day or whatever it takes. I think those people should be rewarded for the work they put in.
“If you are a smoker, you pay a little bit more for your insurance, but can get a bonus if you quit; if you are a nonsmoker, you actually get another contribution to your health savings account every year to help fund your health insurance.”
As a last step, you should invest in tools to help employees reach their goals. Kahoe built a workout room where there are treadmills, an elliptical machine and weights.
“It gets very heavy usage,” he says. “The goal is just one more way to get people involved.”
After the programs have been in effect for some time, you should see some impressive results.
“We are down to single digits for the percentage of smokers, we cut in half the obesity numbers and the overweight numbers. Our health insurance costs were cut in half and continue to go down every year. Your people are just healthier. You should get less sick days and a happier environment.”
How to reach: Group Management Services Inc., (330) 659-0100 or www.groupmgmt.com
When Mike Kahoe, president of Group Management Services Inc., wanted to start some wellness initiatives at his company, he knew that peer involvement would be a key point.
Getting people involved starts with your initial event, which is a type of health inventory. You should make it voluntary to participate in the health professional-run event, which includes blood pressure, cholesterol tests and blood tests. With some promotion, you should get a high rate of involvement in the kick-off event. You want to get as many involved as possible to be a success.
“We had almost 100 percent participation,” he says. “People need some awareness and a little bit of a nudge sometimes.”
A good idea is to open the programs to all employees, not just the ones enrolled in the health care plan. This will help unify the participants even more. Team members will give each other encouragement.
“It would be a complete failure if you don’t get the employees inspired,” Kahoe says.
A smoking cessation program featuring a bonus for quitting can start small, but with participation and positive results, it will likely grow.
“A lot of people will encourage each other,” he says. “Once it catches on, and 10 people quit smoking, I think the other people could figure out that they could too.”
It was the middle of 2008, and G. Brint Ryan was uneasy about his business. Overall, he was confident that the Dallas-based tax firm he’d founded 17 years earlier was on solid ground and was poised for continued success. But one thing was bugging him: Workers had been leaving the company in growing numbers. Ryan LLC’s annual attrition rate — though still below the accounting industry norm of 27 percent — had been creeping up. Eighteen percent. Twenty. Twenty-two.
Then, one day late that summer, as Ryan recalls, “the critical event” happened: One of his firm’s fast-rising employees, a young woman a couple years out of college, asked to meet with him. Her request got his attention. It felt urgent.
“Her name is Kristi Bryant,” Ryan recalls. “At that time, she was a brand-new team leader. She came in and said, ‘Brint, I have to tell you, I love this company. I love the work I do. I find it challenging; I find it rewarding. I just love this place … and here’s my resignation letter.’
“I said, ‘Whoa, time out. Tell me why you’re leaving. Are you going to a competitor?’ She said no; then she repeated, ‘I love this place, I love the work. … But, you know, I’m recently married, and I’ve decided to start a family, and we’ve made the determination that work at Ryan is incompatible with a life outside work. It’s just not possible.’”
The words hit Ryan like freight train.
“It laid me out,” he says. “It’s one thing when you have a marginal performer that leaves; you don’t shed a lot of tears. But this was different. When your very top people [opt out] because of the work environment — well, that’s a problem.”
Strike a deal
So Ryan cut to the chase with Bryant. He said, “Look, Kristi, I don’t want to lose you. But more importantly, I see you as a representative of a large class of our younger top performers. So I’ll make a bargain with you: If you’ll stay and give me a chance to work on this, then I’ll let you head up the initiative, and we’ll figure out what’s wrong with this work environment, and we’ll change it.” She said, “Well, let me think about it.”
“So she went away and thought about it for a couple days, then she came back and said, ‘Now, look: If you’re sincere about this — I mean, if you’re truly ready to embrace meaningful change — then I’ll stay and I’ll lead the initiative.’ And I said, ‘Fine, you’re on.’ So that’s what we did.”
Ryan next sat down with his company’s human resources team, and together they decided that their first step toward determining what the company’s new work environment should look like would be to conduct some research to assess how the accounting industry was changing. They quickly did that, and their findings underscored some tectonic shifts in the marketplace that the company’s leaders were aware of but hadn’t been paying much attention to. The accounting industry had changed dramatically from the time G. Brint Ryan began working in the 1980s. It had gone from a male-dominated sector to a female-dominated one. And in response to that shift, some of Ryan LLC’s big competitors had installed flextime and telecommuting programs to make their work environments more suitable for families and women with young children.
Ryan’s firm, conversely, hadn’t made any such moves and was gaining a reputation for being, as the CEO puts it, “a sweatshop” — especially on college campuses, where accounting and tax firms compete for the young talent that feeds their business.
“I had started [the company] in 1991, and at that point I had a little over three years of professional experience,” Ryan says. “I was very much a product of public accounting. And public accounting in the 1980s was very rigid. People wore the amount of hours they worked like a badge of honor. It was very inflexible. And we adopted that model. From 1991 to 2008, we operated in that fashion. We had mandatory work hours of between 50 and 55 hours a week year-round. We communicated to new hires that that was our requirement. We expected people to be in their seats at 8:30, and we expected them to be here until the work was finished. There wasn’t a lot of give in that model. And it worked fine. … I mean, we were successful.”
Seek fresh input
Clearly, though, signs were pointing toward the need for change. That old model wasn’t necessarily working fine anymore. Ryan LLC’s attrition rate was inching up, and it was getting tougher to recruit and retain young talent. So Ryan brought in a consulting firm that had experience working with companies in similar predicaments.
“This [consulting] firm had done a number of assignments and had coined the term ‘results-only work environment,’” Ryan says. “Their idea was truly radical: You throw out the work schedule, you throw out the work location, and you basically just measure people on results. You tell them, ‘I don’t care when you come to work; I don’t really even care if you come to work. Here are the things I want you to accomplish. And as long as you accomplish them and do them well, your life is your own. There are no rules.’
“We were intrigued by that. We saw it as a way to catch up; we saw it as a way to even leapfrog our competition. Because we knew that success comes, for us, by creating a talent magnet: a work environment where everybody wants to be here, where people from other firms are envious and want to be here. We knew that was critical. We knew we could not continue losing our top talent because of a set of work rules that didn’t fit today’s professionals.”
The consulting firm sold Ryan on its results-only approach, and shortly thereafter, Ryan announced to his employees that the company was going to institute the system, initially for a three-month pilot program in the last quarter of 2008.
“We knew this was a radical change, but the old rules weren’t working for us anymore,” he says. “So we ripped off the Band-Aid. I told the organization we’re moving forward with this.”
Not surprisingly, the younger employees at Ryan LLC were elated. They embraced the new system — immediately, enthusiastically. But most of their bosses did not. In fact, many of the senior staffers hated the concept. Ryan says he had expected there would be some discomfort; change is always unsettling. He had even anticipated a few pockets of resistance throughout the firm. But he was taken aback at the intensity of the disapproval from many of his upper and middle managers.
“I greatly underestimated the organizational resistance we were going to get,” he says. “I was caught pretty much flat-footed by it. I had senior partners coming to me and saying,
Look, we don’t know what’s happened to you, but you’re going to tank this place. This won’t work. People will not show up to work. If there’s not somebody standing over them making sure they’re producing, then production’s going to go in the tank. And by the way, Brint, we get paid for the time we put in on the services we provide to our clients.’
“I said, ‘Well, you know, that may be right, but I’m willing to take that chance, because I want to create something that is truly dynamic, and we’re 20 years behind the curve. We’ve not only gotta catch up, we’ve gotta get in front of the competition. And this is the only way that I see that we can do it.’”
Ryan knew he was taking a big risk. He knew the results-only system represented a drastic shift for his organization. But he sensed that the firm needed to make a deep-seated change and that he had to be aggressive in making it happen.
“We knew the old way didn’t work,” he says. “And to be honest, we didn’t know if this new way would work or not. But we knew we had to do something. And I felt deeply that we had to do something radical — that an incremental change was not going to get us where we needed to go. We felt like we were too far behind to just incrementally, you know, put a Band-Aid on it and keep going.”
Ryan and his leadership team knew they had an uphill battle ahead of them, but they were determined to push through it.
When they installed the new system, Ryan says the firm encountered a lot of what he calls “malicious compliance,” as well as some outright noncompliance, mainly on the part of some of the managers. In some cases, people were so adamantly opposed that they ultimately had to leave the firm.
“That was one of the unintended consequences of this,” Ryan says. “When we went to this program full time, we found that there was a small subset of our population that simply couldn’t work under those arrangements. They needed constant supervision. They needed somebody directing them on a day-by-day, hour-by-hour, sometimes minute-by-minute basis. And within a relatively short period of time, those people left the firm. And frankly, overall that’s good for the organization — and it’s good for them too because they need to find an environment that’s suitable for them.”
But overall, Ryan and his leadership team were able to convince most of the firm’s managers to give the new program a fair shake.
“Here’s the way we got most of our management team on board,” Ryan says. “When you look at those teams that have low attrition rates, they are dramatically more productive and more successful than those that have high attrition rates. So we sat our management team down and said, look, whether you philosophically agree with this or not, the key to your success is developing a team environment — just like our overall [company] work environment — where people want to come to work, they’re happy with the leadership they get, and there’s flexibility so they can achieve a work-life balance. And the sooner you get on board with that, the more successful you’re going to be.
“So one by one, we chipped away at it. One by one, we moved them in that direction. And while we still have some issues that we encounter from time to time — where managers have their own interpretation of how the program is supposed to work — for the most part, we have the team on board. And now it’s become expected.”
A little more than a year after Ryan LLC initiated its results-only work system, Ryan says his risky move started to pay dividends.
“At the end of 2009, a miraculous thing happened,” he says. “When we looked at the metrics at the end of the year, we had done some remarkable things. First, we had reduced our turnover from 22.5 percent all the way down to 8 percent. We had to go back and recheck the numbers because we thought, wait, that can’t be right.
“In addition, we posted the highest revenue we’d ever posted as a firm, and a record profit, in what was one of the absolute worst economic environments I’ve seen in my professional career. So we were beside ourselves.”
Ryan says he and his leadership team are now fully invested in the results-only work system for the firm.
“We’re big believers in creating a work environment where people can do their best work, not one where we try to second-guess when they should come to work, or where they should work from,” he says. “We know that people work differently. Some people like to get up early in the morning and knock things out. Other people work later in the day, or they work at different times. And sometimes they’re more effective when they’re away from the office than when they’re in the office.”
Perhaps most importantly, Ryan says the flexible work program has made his firm a hit on the college recruiting trail.
“It’s become one of the most valuable recruiting tools we have,” he says. “When you can go to a college campus and say you’ve won several best-place-to-work awards — and, oh, by the way, here’s how the program works, and this is the type of flexibility you’re going to have — they’re overwhelmed. So we’re getting more than our fair share of the top talent as a result of the program.”
HOW TO REACH: Ryan LLC, (972) 934-0022, www.ryan.com
THE RYAN FILE
Name: G. Brint Ryan
Title: Founder, CEO and Managing Principal
Company: Ryan LLC
Born: Big Spring, Texas
Education: University of North Texas, bachelor’s and master’s degrees in accounting
What was your first job, and what did you learn from it?
I was a newspaper carrier for the Big Spring Herald. That was one of my most difficult collection jobs. But you know what? You learn that if you don’t collect the money, you don’t eat. So it was a valuable skill. Also, there’s nothing like dealing with the public, dealing with the retail trade, to put your mind in the right frame of reference. Because you deal with all types of people. And the objective is to get them all to take the paper and to pay on time. So you learn to be persuasive, and you learn to be persistent. You get turned down more times than bedsheets, yet you just keep on going.
Do you have a core business philosophy that you use to guide you?
Since the beginning of this firm, the thing that’s always guided me is that if you take good care of your clients and you do your best work, everything else falls into place: the money, the opportunities — they are all byproducts of just doing the best job that you can.
What trait do you think is the most important one for a a business leader to have in order to be successful?
Probably the one that’s most important is communication. The ability to connect with people, the ability to understand and empathize with people, is a critical leadership skill. You can’t do anything big by yourself, so you’ve got to be able to build and lead teams to success. And you can’t do that if you can’t communicate — if you can’t identify with and connect with the people you’re trying to lead.
With any business idea, there will be people who are with you, people who are against you and some who are undecided. Sometimes the people against you will forcefully attack you or your position. In those cases, the best response is often to give the opposition nothing to oppose. It’s the same principle that some Eastern martial arts techniques, such as aikido, are based on.
Managing opposition by giving it nothing to oppose simply means prevailing by not fighting back. The strategy plays out in different ways depending on the situation. If it’s just you and one other person having an argument, the natural tendency is to respond to every attack.
Next time, instead of responding and defending yourself, just nod as if you see the other person’s point and then let it sit. Give it a few minutes. In my experience, 90 percent of the time, the other person will moderate his or her own position and come more toward yours. All things tend toward balance and people innately know when they’ve crossed the line.
In group situations, a similar approach is possible. In the past, I’ve advised readers not to respond to a big ego that is trying to dominate the room. If you perceive that person as petty and insecure, chances are everyone else does too.
In the same way, if someone launches an attack on your idea in a group setting, often you can sit back and not respond at all while the person’s words hang in the air and the rest of the group comes to their own conclusions. Then you can go back to the original goal without making a value judgment about the person.
If ignoring a challenge doesn’t end the opposition, you can manage it by redirecting the energy. In those cases, the most effective move is acknowledging his or her point of view because that gives the person’s opposition nowhere further to go. Once the kneejerk opposition subsides, you can come back and approach the topic from a different angle. Don’t capitulate your position, but know that there is usually more than one way to get where you want to go.
In any debate, arguments can turn into sub-arguments that have little effect on the overall outcome. Without losing any important ground you can say, “I see your point,” and leave it at that. Or you can rephrase the other person’s point and ask, “So is that what you’re saying?” The other person will respond, “That’s right.” You can then say, “Well, that’s interesting,” and now the opposition is thwarted without a confrontation.
Managing opposition when you are not part of the argument calls for a different approach. If everyone is in an equal position of power, what often happens is that when someone makes a suggestion and another person opposes it, the first person will immediately dig in his or her heels. If you’re witnessing this, it’s a good opportunity to remind everyone of the goal — “Why are we here today?”
In group situations where there is a clear superior, strong leaders will sometimes allow heated arguments to take place, trusting that the group will resolve the problem on its own. Experienced CEOs know that if they immediately step in, they may stifle creativity by imposing their will. Instead, they’re patient and allow the room to work things through.
The best CEOs seem to know intuitively when to sit back and when to guide the debate. When the group finally makes a decision, they’ll just say, “I think that’s a great idea. Let’s do it.” They won’t take credit for it because now the group owns the idea.
Whether you are among equals or in the leadership role, the main concept to remember about opposition is that there’s no use in swimming against the current because you won’t get anywhere. Instead, you’ve got to swim with the current and redirect it. To do that, you’re letting silence work for you. You’re finding common ground with your opponent. And you’re always going back to the goal that the group is trying to accomplish together.
Chris St. Hilaire is the author (with Lynette Padwa) of “27 Powers of Persuasion: Simple Strategies to Seduce Audiences and Win Allies” (Prentice Hall Press). He is an award-winning message strategist who has developed communications programs for some of the nation’s most powerful corporations, legal teams and politicians.
Are you asking and expecting more out of your people than you were a year ago? If you are, you’re not alone. Many business leaders are asking their employees to give more for the same or less than they had been making in order to keep the company making ends meet. Assuring that your team is part of your vision and is willing to give this extra effort rather than being an impediment to your list of to-dos is a swinging gate to success or failure.
A crucial part of navigating the turbulent waters of these economic times is to be sure you keep the right crew aboard to keep your ship afloat. Organizations that lose focus on this are asking for trouble both now and in the future, if they have one.
Here are five tips to be sure your high flyers are flying with you:
Determine the motivations of top talent
How do you do this? Ask them. Be specific and make sure that your top brass answers questions like the following:
- Are you happy with where your career is headed?
- What would you like the next step in your career to be?
- How can I/we help you get there?
Exit interviews are not the time to determine these motivations. Find out what your future leaders need now and feed those who feed your machine.
Make individual meetings a standard
Another common fumble by companies is that they don’t make individual updates a cultural consistency. They do backflips for their clients, yet they don’t look inward and pay special attention to those who drive business and pump oxygen into their organization. Meeting with your folks individually recognizes their importance and provides a wonderful forum for discovering what they may not disclose in a group meeting.
Delegate and give responsibility
One of the biggest challenges for execs is to let go. It’s difficult for them because all that happens under their jurisdiction is their responsibility. Remember that your emerging leaders want to be challenged and be given assignments that utilize their talent. This is how they learn. Let go and show trust and you will be surrounded with a higher performing team.
Become a teaching executive
Even the brightest executives have never been taught the fundamental rule of adult learning: Teaching hasn’t occurred until learning is confirmed. Telling isn’t teaching and execs must know that even the brightest talent may process information differently than they do. Be sure you are patient and aligned as you develop and confirm that understanding has happened.
In the absence of feedback, people create their own opinions of what’s happening and it’s typically negative. You must keep your folks abreast of what’s going on, regularly. Provide knowledge which is different from data. Data is merely “the what.” Knowledge is “the what, the why and the how they play a vital role to change and growth.” Keep your top talent informed and you will keep morale high and get these key players to feel passionate about sticking around.
Joe Takash is the president of Victory Consulting, a Chicago-based executive and organizational development firm. He advises clients on leadership strategies and has helped executives prepare for $3 billion worth of sales presentations. He is a keynote speaker for executive retreats, sales meetings and management conferences and has appeared in numerous media outlets. Learn more at www.victoryconsulting.com.
When Eric Affeldt came in to run ClubCorp USA Inc., it was a 50-year-old company that had been operated by one family, and he recognized that change wasn’t going to be easy for the organization.
But change was necessary for the business, which owns and operates private clubs. With an aging population, many of the clubs’ members would soon not need a club or be physically unable to use one, so making them more appealing to younger people needed to happen.
“My biggest challenge is an ongoing challenge, and that’s how do you get people to look at the business differently every day,” he says. “Certainly markets change, consumer spending patterns change, consumer desires change, and you could continue to deliver the same product a consumer liked 20 years ago, but you may find yourself a dinosaur.”
He wanted to send a message that change was going to be a new part of the organization, so on his business card he printed his title as “catalyst and CEO.”
“(That) addresses the biggest challenge, and that is that many people are reluctant to change,” he says. “We’re all creatures of habit, and we all get in ruts, some are good, some are bad.”
Then he dug in. Here’s how he changed ClubCorp from a parochial organization to one that’s keeping with the times.
Paint a vision
To start the change process, Affeldt recognized that change must be intentional and that it started at the top with him, thus the title on his business card.
“It obviously indicates something is going to change,” he says.
Even though you know something is going to change, you have to have a specific idea in mind.
“No. 1, [great leaders] set direction, so they have a dream, they have a vision, and they have some place in their mind they can see going and get other people to go with them,” he says.
He wanted to focus on underserved markets and target more women and younger people to encourage them to become members of the clubs.
But he couldn’t just have an idea in his head of where the company was going to go and not let other people in on the secret — nobody would follow because they wouldn’t understand. So he set out across the country to talk to employees. In his first year in the company, he visited about 130 of 154 locations.
“It was face to face, answering questions, trying to convey a different sense of energy and focus, and frankly, curiosity, and just getting people comfortable that if I’m going to suggest that it’s OK to challenge the way things have been, it probably is OK,” he says.
For the most part, he received positive feedback from employees about the new direction, but he also encountered some resistance.
“There are clearly some that said, ‘This is not what I signed up for, and, frankly, who are you to tell us what to do?’” he says. “We’re the oldest company of our type in the industry. There were a few folks who thought we were too cool for school. … It’s always a challenge because it’s not unlike a new exercise program — it hurts for a little while to do some different things. You might know it’s beneficial, but it hurts for a while until your muscles get used to the new routine.”
He was also met with some opposition from club members. On one business trip, he was dining alone and an older member of the club approached him and asked why he was going to focus on bringing in younger people to the club — the older folks were the ones that paid his dues.
“I said, ‘Thanks, I appreciate your input, but the reality is with an aging demographic and people dropping out of clubs due to people not being able to play golf anymore, or they’ve retired and have no need for a business club anymore, it’s important to bring the next generation of consumers into the club. It doesn’t mean we don’t care about you, and we do want to have programs to serve you, but we need to keep new consumers coming in because the reality is, most people, myself included, won’t belong to a club because they either won’t have the interest nor the time or physical ability to do so,’” he says.
Affeldt says the man intellectually understood, but he really didn’t want to hear it, and that’s the common response most people took. He says the key is to continue to reinforce the plan and why it’s important and let them come around.
“Part of it is just stick-to-itiveness — here’s what we’re going to do, and we appreciate if this is new or different, but we are going to do it, and we are going to help you do it, and we’re going to tell you why we think it’s important,” he says.
Once he had a vision in place and had communicated it to people, he had to provide the means to do so and give people a reason to care.
“No. 2, [great leaders] allocate resources,” he says. “That’s both people, getting the right people in place as well as capital dollars to grow the business.”
For the first part of that, he created an 11-member executive committee, and he said about seven of those members turned over in the first year, so having the right top people was critical. He and his colleagues pulled out their rolodexes and recruited sharp people they had previously worked with who would complement his team.
“It’s important to have people who have different skill sets than you do,” Affeldt says. “I use this analogy all the time that if you grab two batteries and put the pointy ends together in a flashlight, the flashlight is not going to work. It has to be a plus and a minus. You have to have people around you that have different skill sets that complement yours. At the same time, you have to have people around you who like to be challenged.”
When he was bringing those people in, it was important that they know the change the company was going through.
“Another critical word in my vocabulary is communication,” Affeldt says. “Very clearly articulating both to the people who stayed and the new people that our intent was not to milk this company, so to speak, but to transform it into ways that were more appealing to existing members and future members — making sure they were signed up for running faster, jumping higher and pushing the envelope.”
By communicating this goal upfront, he was hoping to get people who embraced change.
“There’s a quote I’ve used from Gen. Casey, who said getting people to embrace change is the toughest job of any leader,” he says. “The key word there is embrace — not tolerate or stand for it, but embrace it. It’s important to find people who have that same sort of passion for change and improvement, however improvement is defined.”
Aside from hiring the right people, Affeldt also allocated resources toward his employees in a way not many companies do — he created a 501(c)(3) for them. As the company celebrated its 50th anniversary, he decided to have a one-day fundraiser at his clubs to raise money for a multitude of charities, including a new one just for his team members. It was designed that when hardships hit his employees, they could receive free help, which they never had to pay back. Since starting it, he’s given away about $1.5 million to people who have lost their homes to flooding or fire, had their cars break down, or reached insurance limits and weren’t able to pay for medical expenses.
“By establishing that foundation, a lot of line-level employees said, ‘Wow, apart from actually paying me, these people are providing a safety net for me if something nasty happens to me,” he says.
Aside from the nontraditional resource allocation in the charity program, he also increased financial incentives for people to outperform their financial targets and invested about $250 million in capital back into the business.
“Our employees see we’re not just talking about improvements and then taking all the money to the bank and running away,” he says. “We’re actually reinvesting in them and their clubs.”
And when you put resources toward your employees to help them, it also creates the buy-in you need from them to do a great job and embrace the change. If you’re unsure of putting more money into your people, let data guide your decision.
He says, “For the skeptical, you can always tiptoe into the pool and try programs to see what kind of reaction you get with your employee partners, but there’s enough data that exists from a lot of organizations that shows what the power of incentives provides for growing companies in a variety of different industries.”
He had to make sure that people were actually working on changing and that it just wasn’t a pretty plan sitting on a shelf.
“No. 3, and most importantly, [great leaders] ensure execution,” Affeldt says. “It’s not enough to have a great idea and to have other smart people working around you. You can’t just put your feet up on the desk at that point and say, ‘I hope it works.’ You’ve got to ensure that it works.”
The financial incentives he created certainly helped ensure that, but he doesn’t go off of his hunches to gauge whether execution is happening.
“We’re a relatively good size company – almost $700 million in revenue,” he says. “Clearly, the change is reflected in our financial performance as well as in some of the metrics we measure our business.”
He uses member numbers, the number of rounds of golf played, the number of meals served and other similar metrics to track ClubCorp’s progress.
“There are all kinds of analytics you can look at to say, ‘Something is happening here and hopefully something good,’” he says. “Then you say, ‘Why did that happen? Hopefully you can trace that back to, ‘Here’s the plan we had, here’s the people we allocated against it, and the performance is better.’”
As he looks around the organization today, the numbers are proving that ClubCorp. is growing and improving and changing each day, and he anticipates that continuing as he looks toward the future. But even more important, his people are now fully bought into the change.
“What they’ve told me is it’s a more egalitarian, collegial atmosphere, and the constant questions that I pose about, ‘What next, what next, what next,’ have sunk in,” Affeldt says. “People are now very comfortable with trying to come up with something that’s radical.”
How to reach: ClubCorp USA Inc., (972) 243-6191 or www.clubcorp.com
The Affeldt File
NAME: Eric Affeldt
TITLE: President and CEO
COMPANY: ClubCorp USA Inc.
Born: Los Angeles, and I grew up in Orange County, Calif.
Education: B.A. in political science and religion from Claremont McKenna College
What was your first job ever as a child, and what did you learn that still applies?
Pulling weeds and clearing out lots for a developer in our little community where I grew up — my first paid job, let me put it that way. I think I was 10.
I vividly remember I was working at a neighbor’s house over the weekend clearing a lot, and the nice neighbor lady wanted to pay me on Saturday night, and the job wasn’t finished yet. I said, ‘No, I can’t do that.’ My dad had taught me that when the job is finished, then you get paid. That was one of the first things I remembered from working.
And frankly, several of the jobs I had, there’s a lot to do with attitude. You go and do a job, trying to do as well as you can and hopefully enjoying it as opposed to saying, ‘Oh, I have to go pull weeds.’ Your attitude is extremely important.
What’s the best advice you’ve ever received?
I have to answer, because my faith is an important part of me, what Jesus said when asked, ‘What do I need to do to be saved?’ — love the Lord your God with all your heart, soul and mind and love your neighbor as yourself. That’s really good advice for everybody.
I don’t know if this was specifically said to me or came to me through parents, but the importance of being kind to other people is important and recognizing that everybody has their own stuff. It’s important to be kind as you go through your life, and people will respond to that.
What’s your favorite board game and why?
I like backgammon, frankly. It’s strategic, it’s fast, it’s quantitative to a degree, and there’s a cautious way to play, and there’s an aggressive way to play, and depending upon who you’re playing and the roll of the dice, you have to make decisions in real time as to how fast and how slow you want to play.
As a child, what did you want to be when you grew up?
A kid, I wanted to play professional baseball. A younger man, I wanted to go into the ministry or play professional baseball or go into politics.
So how’d you get where you are now?
Oh gosh, that’s a really long story. A lot of serendipity, meeting people, friends would call it God-winks — things that just happen and you say, ‘How did that happen?’ — meeting people who encouraged me to go into finance and then to take a risk and to start my own company, then being invited to join another company with a friend. And through all of that, raising my hand too many times and volunteering for new things and just giving things a try.