Dr. Robert Corrato founded Executive Health Resources in 1997 as a small start-up built around the concept of medical compliance solutions to hospitals.
Corrato’s new company created its own niche, which allowed for a highly entrepreneurial attitude within the organization. The rules weren’t set, the boundaries weren’t drawn, and Corrato was allowed a blank canvas on which he and his staff could create and innovate.
But in the ensuing 14 years, the game has changed. EHR’s leadership defined operational processes to guide the company as it grew to 1,600 full- and part-time employees. Through necessity, EHR became more operational in nature.
But innovation is what built EHR in the first place, and Corrato wasn’t eager to let go of the freedom afforded by an innovative culture. The expanding company needed a sense of order, but in order to keep growing, Corrato still needed to keep an innovative mindset at the forefront. He needed two mindsets, often divergent, to exist in the same culture.
“Oftentimes, the competencies that are required to be entrepreneurial and start something up are different from the competencies needed to scale an organization as it grows over time,” says Corrato, the company’s president and CEO. “With that in mind, probably the toughest personal challenge I have faced here has been changing with the dynamic needs of an organization in different iterations of growth. It has been a tough challenge from a learning perspective.”
Corrato has constructed components within his organization that focus individually on the innovative and operational elements of the business. But he also needed to figure out a way for the two components to develop a symbiotic relationship — the innovators offering ideas to the operators and the operators offering structure to the innovators. It has required Corrato to define the company’s culture in specific terms, hire people who can help promote the culture, and ensure that there is a system through which the innovators and operators can collaborate.
Define the culture
Like most young businesses, EHR’s culture wasn’t designed at the outset. It took a number of years for the culture to evolve and meet the needs of a company with rapidly accelerating growth.
In the early days of the company, Corrato and his staff focused on building up a core of industry knowledge, then listening to clients, responding to their needs and providing services to meet those needs in the most efficient manner possible.
“First and foremost, you have to build a deep expertise and knowledge in your space, and you have to initially keep your nose to the grindstone, listen very carefully to the clients you have been able to engage and cultivate those early adopters,” Corrato says. “Then, you have to couple that momentum with your deep knowledge of the industry to continually refine what those services or product offerings are going to be. Once you have a good concept of what the service offerings need to look like, you then need to say ‘OK, if we are going to be able to provide these services with excellence, and do it to a large marketplace, how do we take the best of what we do and scale it in a way that ensures a consistent, excellent approach?’”
Over the years of shaping and reshaping EHR, Corrato has learned that a successful company’s culture revolves around three tenets. Employees need to believe in the value of their company’s purpose, there has to be a defined business case backing up the purpose, and employees have to extract a sense of enjoyment and satisfaction from their work. Without those three factors in place, it becomes difficult for a culture to sustain itself.
“It is a daily tactical initiative,” Corrato says. “It is very easy to have the right rhetoric, but if the people in the organization don’t see you, as the leader, living that every day, you can run into problems. Living it can be as simple as you’re walking down the hallway, you see a piece of paper on the floor and you pick it up because you’re proud of the way your office looks. It can be on a large scale, like ensuring that you’re there every day to support every person in the organization, whether they’re in marketing, account management or whatever component they might be in. If you’re willing to be tangibly available and a presence, that is the first step in getting to those three tenets of a good culture.”
Without your actions, your words become hollow, and the cultural seeds you’re attempting to plant will never sprout.
“This is an exhaustingly important job, because if you don’t do it, and keep doing it, it simply becomes rhetoric,” Corrato says. “And people are smart. If they hear rhetoric and don’t see the actions to match it, all faith is lost, and the foundation on which your organization should be supported begins to crumble away.”
Put people in place
From the start of the recruiting and interviewing process, Corrato wants the people who come through the door looking for a job at EHR to understand the company’s culture and what is expected of team members.
If you want your culture to embrace specific cultural tenets, you need to ensure that you’re bringing aboard people who can embrace and advance the culture.
“The last thing we want to do is take the time and effort to recruit and interview, and then bring the wrong person into the organization,” Corrato says. “It is much harder to do that than to prevent it from happening in the first place. That is why you need to develop a thoughtful, detailed recruiting process that allows the individual to learn about the organization along the way.”
Having a good recruiting process begins with having good recruiters. At EHR, members of leadership from the various departments meet with job candidates to explain how the company values both innovation and operational stability, and how it plays into that particular field.
It comes back to organizational connectedness. Your hiring process can’t be completely separated from your daily operations or the areas that will thrive on the ideas that new employees will bring to the table.
“Your recruiting can’t be disconnected from the operations and everyday goings-on,” Corrato says. “The folks who are leading various units of the company also have a role on their team as input into the evaluation of those coming into our organization. It is a good and structured approach that brings in the subject matter experts in our organization to do an evaluation of the individuals who come into the organization. The connection is important to have. If that’s disconnected, then you will find that the folks who are going to be working with the new, recruited individual may find that they have made a misstep in hiring, and that goes back to the fact that it’s much harder to correct a misstep than to make the right hire in the first place.”
Get things moving
If you’ve defined a direction and built a work force that can help support that direction, the question becomes, how do you get to your goals?
At EHR, this is where the question of innovation versus operations became prevalent.
“It is a classic dilemma of how do you take an organization that is very scaled and detailed, and how do you interject the ability to create innovation,” Corrato says. “It’s a constant dilemma because they are very different processes. The operational process is one where you’re measuring on a daily basis what you are doing and honing the operational machine. Innovation, on the other hand, is more of an approach that is centered on projects.”
Corrato’s solution was to break the innovation out from the operations. He set up innovation teams to produce ideas for new products and services. The ideas are pieced together by the teams, and then presented to the heads of the operational aspects of the organization for review. It begins a back-and-forth process between the innovation and operations sides of the business, that will, over the course of several rounds, refine an idea into a product that can be rolled out to customers.
“The key is to develop these processes within the organization that allow for the development of innovation, but very closely feed the ideas back to the operational organization,” Corrato says. “If you have an operational organization and try to have those people innovate, you will find that there is always a reason why the operations need to come first. There is always something that will have to be an operational priority, and it will get in the way of that innovation component coming first. That is why you need to segment that innovation aspect out in your organization, but have it connect back to the operational areas when the time is right, given the level of development of the innovation.”
The innovation and operation aspects of EHR have also developed a mutually beneficial working relationship because all areas of the company are narrowly focused on a set of end goals. The operational heads do not hinder the creative process of the innovation teams, but the innovation teams also have a responsibility to stick close to the organization’s mission and purpose with the ideas they create.
Innovation needs to work in harmony with operations because innovation needs to help propel you toward your goals. You need to keep your innovative minds centered on your purpose and mission. If you ever need to move away from your mission, that has to be a decision that comes from your head office, not from an idea generated down the ladder.
It helps if everyone in your organization, whether they are idea generators or process managers, stays in touch with the market and understands what customers want and need, and how you can best serve those needs. In a nutshell, you have to know what you do well as a company and constantly try to figure out new ways to leverage that set of core competencies.
Corrato says it’s a matter of going deep versus going wide. Companies that go deep strive to become experts in a narrowly defined area. Companies that go wide are constantly probing for new areas to develop, which may offer a more comprehensive set of products or services to clients, but may also force the company to sacrifice expertise in a particular area.
“I’ve heard a number of folks say that no company has ever gone out of business by focusing,” Corrato says. “So that’s why it’s critical to focus on the market and services, and what your clients need. Once you’ve done that, if you want to grow, you need to assess whether the market is expansive enough to allow for the scaling of an organization. Not every company has to be a large, scaled national organization to achieve success. But once an organization decides the track it wants to take, then you have to create a repeatable, standardized and scalable approach that will result in A-plus service.”
With new ideas coming from your innovation teams, you have to weight the positives and negatives of each and project the ultimate benefit to your company. Again, you come back to finding a balance between innovation and operations.
“If you have this amazing new opportunity, what is the opportunity cost?” Corrato says. “If the cost of going wide allows you to lose an opportunity that is right in front of you and has a lower cost to attain, depth would probably come before breadth. But if you’ve already saturated and solidified your current market and it is now time to look at adjacencies, to expand your offerings, you can create the opportunity to upsell to a satisfied client base. It’s really about the pros and cons of wide versus deep, given where you’re at in your current market.”
How to reach: Executive Health Resources, (610) 446-6100 or www.ehrdocs.com
The Corrato File
Name: Robert Corrato
Title: President and CEO
Company: Executive Health Resources
Education: Biology and psychology degrees, La Salle University; MBA, Wharton School of Business, University of Pennsylvania; M.D., Medical College of Pennsylvania
What is the best business lesson you’ve learned?
To create a business case for the Golden Rule — treat others as you would want to be treated. Always keep in mind doing the right things for the organization, and everything else falls into place. There is definitely a business case for doing the right thing.
What traits or skills are essential for a business leader?
First and foremost, honorability. You have to be honest. You also have to be able to take your vision and instill it in others, and instill confidence in the vision.
What is your definition of success?
My ultimate definition of success is when people are proud of the organization. If you have that and a culture that supports that, you have the foundation of a strong organization.
When Rick Pleczko thinks about the office space his company used to be in, he thinks about a college campus. He remembers open houses with barbeques on the front lawn, free beer, a DJ playing music and all his employees enjoying themselves.
Pleczko, co-founder, president and CEO of BBS Technologies, used to throw these parties as a way to thank current employees for hard work and to attract new employees looking to join the $30 million provider of systems management software.
“We have this interesting environment where, since we founded the company, we have been in three turn-of-the-century mansions in this bohemian neighborhood,” Pleczko says. “Everybody loves it here. It’s almost like a college campus-style environment.”
Over the past few years, the company has grown to new heights and in the process, outgrown its current headquarters. The challenge facing Pleczko and his team was to find a new place to conduct business that would keep that college-campus feel.
“Our big challenge was, ‘Gee, one of the unique things about our company and our culture that attracts folks is this campus-like environment,’” he says. “It wasn’t practical for us to add more houses in this space. It just couldn’t be done in the neighborhood. We knew we would have to move to a tower. Our problem was, how do you recreate that culture in a tower?”
Recreating the company culture was a big undertaking. It took collaboration from his 200 employees to find the right place.
“We talked to our employees,” Pleczko says. “Everybody wanted to be in the same neighborhood or close to it. So we were looking for something within a couple-mile radius of where we were. Then it was going to the staff and saying, ‘What features do you want in this new environment? We can’t replicate what we have entirely, but what do you want to do?’”
Pleczko set up a committee of a few employees to get feedback on the type of things they wanted.
“You have to figure out what the key criteria are to maintain and expand your existing culture and get those criteria from the folks that work for you,” he says. “Focus on the staff and get the information and the feedback from the staff. Then you need to engage a good, talented Realtor.”
Pleczko was fortunate. He found a space 1.5 miles away with 70,000 square feet across three floors of a tower with a spiral staircase connecting all floors.
“We have this environment with a spiral staircase and we’re building it out with almost a Google-like campus environment,” he says. “We set up recreation rooms with Xbox connects, foosball tables and table tennis. Software engineers tend to work long and odd hours, so they like that sort of environment. So we built a couple of playrooms on different floors where people can get together and socialize just like they would walking down to the local Starbucks. We were able to replicate to a high degree our culture inside of a tower.”
Not only did BBS recapture its culture in a new building, but the company took a big step forward in its growth by moving to a new headquarters.
“The environment that we had was perfect for when we were in the startup stage to about where we are now,” Pleczko says. “But we are now doing business with some very significant and very large corporate entities. When they came to visit us in those funky houses, they thought it was cute and it was like visiting an ad agency in a brownstone in Manhattan or something. We always looked like we were a fun startup.
“Now moving to this new environment, it gives the impression of we’re a $100 million company. It gives us significant credibility with the environment, the space, the décor, etc. But it still enables us to maintain that culture of innovative startup.”
HOW TO REACH: BBS Technologies, (713) 862-5250 or www.bbstech.com
Not only will BBS Technologies’ new headquarters building allow the company to continue to grow and keep its unique culture, it provides change within the organization.
“Change is good,” says Pleczko, co-founder, president and CEO. “It seems to refresh everybody’s morale and attitude and I think it acts as an inflection point for growth. I’ve been able to say, ‘We’re moving into a space that a $100 million company lives in and we’re going to be that $100 million company.’ It enables you to get some pretty good motivating messages out to your staff.”
A move like this takes time and a strategic plan. Pleczko had to understand his company’s growth pattern and plan accordingly.
“This is of great strategic importance, because if we didn’t move, our growth would be constrained,” he says. “We are planning to grow aggressively this year and that growth would not be enabled without this new building.”
Failing to realize that your company is outgrowing its current space can negatively impact the productivity of your employees.
“[Employees] become inefficient,” he says. “You have too many people in not enough square feet and they are bumping in to each other. Things like conference rooms end up being turned into offices. Folks become unproductive simply because of the noise and activity level all around them. If you don’t [expand], you will tend to see productivity go down.”
Hospitals nationwide are being pressured and, in some cases, forced to adapt to changing demands in the health care industry. Rising expectations in the quality of delivering care, the cost structure of health care and a looming shortage of personnel are just a few issues hospitals are looking for solutions to. Dr. Cary Gutbezahl, president and CEO of Compass Clinical Consulting, specializes in hospital consultation. His firm helps hospitals solve these issues by improving efficiencies.
Smart Business spoke to Dr. Gutbezahl about how hospitals are streamlining their operations to combat health care issues.
What are the most pressing issues facing hospitals today?
Hospitals are facing a couple of important challenges. One is rising expectations for the processes and results of delivering care. That means things related to improving patient safety, reducing the occurrences of undesirable events and reducing hospital readmissions.
The other pressure is the cost structure of health care. The way it has been funded has generated some pretty significant overhead costs and investment in technology that have made health care costs rise to the point where they are pretty much unsustainable both for private-sector insurance as well as for public insurance.
The third challenge which is looming on the horizon is shortage of personnel. In the future, with rising demand for health care services and the aging of the existing population, there is going to be a severe imbalance between supply and demand.
How are hospitals looking to solve some of these issues?
The challenges give hospitals a number of opportunities to make some changes both in their traditional scope of operation as well as expanding their scope of operation.
One of the areas that hospitals have had incentives to work on, but many hospitals haven’t addressed is the issue of how to manage hospital care expeditiously in order to minimize the amount of time and expenses that are provided for a patient.
A number of hospitals have patients stay a number of hours in the emergency department. They are sitting in the emergency department waiting for an inpatient bed, but in the meantime, they are not getting the physician consultation and diagnostic tests that you would normally get as an inpatient. One way that hospitals can accelerate care is to make sure patients either get to a bed quickly, or that the care process begins while the patient is in the emergency department so there aren’t hours waiting for things to happen.
They also have to recognize when a patient’s care can be safely transitioned to an outpatient setting. Some hospitals are identifying and working with the physicians and nurses to say this patient can get the rest of their care as an outpatient with home health care or with outpatient rehabilitation therapies.
What is the main focus of hospitals right now?
Right now there are two things that hospitals should be focusing on and they are related. One is called throughput. That is increasing the capacity of the existing facilities, meaning both space and people, by redesigning the way patients flow through the health care delivery system so that they move more quickly.
That means people sitting in the emergency room for less time so that the existing beds in the emergency room can accommodate more patients. It means moving patients through the inpatient side quicker so the hospital doesn’t need to build additional beds in order to house people for inpatient care. If hospitals have to build more beds, then the costs are going to rise. The only way to try and keep the cost of health care down is going to be to work on these through put issues throughout the hospitals. The ORs, the inpatient beds, critical care units, emergency department, all areas of the hospital where there are backups in terms of patient flow.
The second thing is looking at how we redesign the delivering of health care services so it becomes more efficient. One technique that’s being used on the outpatient side in a number of large multispecialty medical groups is the idea of group appointments. You have a number of patients who have similar kinds of clinical problems. Instead of meeting with each of them one by one … a number of these organizations are scheduling group meetings for patients who have [the same diseases].
HOW TO REACH: Compass Clinical Consulting, (513) 241-0142 or www.compass-clinical.com
When Stephen Newlin arrived at PolyOne Corp. more than five years ago, the biggest challenge he faced was the company’s culture.
“The morale wasn’t good, and the people didn’t seem to feel like they were winning or had a road map toward success, and the company had been in a state of decline for a long enough time that people were frustrated, and a lot of talent had left,” the chairman, president and CEO says. “The biggest challenge was trying to find a way to instill confidence and give them hope for the future and get them to believe in the future.”
He started this daunting task with a classic leadership principle.
“One of the first things you do is assess what you have and assess the situation,” Newlin says. “People tend to try to find a project that they think they have a good chance of winning and make it high profile. When you hit on that, it spreads throughout the organization, and it helps build the confidence that’s so important and lets people realize, ‘OK, we did have a common cause, we got together for it, and we feel good about it.’”
Newlin thought the case was simple. He has an engineering background, and he started in sales engineering dealing with customers, so he approaches business from a customer-centric standpoint. He was fortunate when he started that PolyOne had just done a customer satisfaction survey.
“I was pleased that we had done that, but what we hadn’t done was really acted on it, so I went through it and talked to some of the people that were around — what did you learn from this?” he says.
What he learned was they were about the same as their competition. PolyOne’s delivery rates were 81 percent, and the competition’s were between 81 and 82 percent.
“The incumbent management team at the time said, ‘Let’s not worry about this because we’re about the same as the competition,’ where I viewed it as an opportunity to differentiate,” Newlin says. “I said, ‘Listen, we can do a lot better than this. I know we can from past experience.’”
He had worked in industries somewhat similar to PolyOne, a provider of specialized polymer materials, services and solutions. At one of his previous stops, his company had an on-time delivery rate at 95 percent or above.
So he decided that in the course of the next 18 months, they were going to rise from 81 percent to 95 percent.
“If the competition wants to follow, that’s fine,” he says. “If not, we’re going to separate from them.”
He suspected that if they could spring out in front of the competition that the company would not only have better customer service and get stronger, but that people would likely feel like they make a difference and that the company is going somewhere.
He says, “It was a way to energize people, to get them to come together toward a common cause and to begin to see things differently at our company in these early phases.”
Get the right people
He started the process by assigning someone internally to be in charge of making sure PolyOne hit this mark, so every day when that person came in, that was his or her primary task. But it wasn’t an easy task. If a customer called that morning and wanted an order by the afternoon, even though it wasn’t possible to get it to the customer that quickly, PolyOne considered it a strike against the person’s score because the company wasn’t able to meet the customer’s need.
“That’s how you get things done,” Newlin says. “Our company suffered from a lack of accountability. It was something our board recognized. It was something I recognized on day one. I felt we needed a person whose job it is to make this happen, and I’m going to support them and the officers are going to support them.”
Even though only one person was tasked with making sure he or she hit this goal, the entire management team had to buy in to the strategy. While Newlin had the overall state of the company working against him when he came in, he also had some things working for him to get that crucial buy-in.
“Working for me were people that were ready to embrace change, that were tired of the declines in bonuses and not getting salary increases and not seeing the stock price appreciate and just sort of frustrated with where we were going,” he says. “They were working hard, and they weren’t seeing any real benefits, so they were eager to embrace change. … They didn’t know if what I was saying was right or not. They didn’t necessarily buy in to everything I said, but they did buy in to the concept of significant change.”
Major change and incentive aside, he worked on trying to convince them to buy in.
“If you’re selling to the customer or you’re buying or selling a business, you have to understand people’s motives because we all have things that make us tick and cause us to behave in certain ways,” he says. “Then I think you have to appeal to those motives, so you have to put things in a language that’s meaningful to them. Then you have to start with the right ingredients — the right people.”
But how can you tell who the right people are?
“You have to have people who are open-minded, who understand in business today, the rate of change is very brisk, and if you’re not prepared to move quickly, somebody’s going to run right by you,” he says. “Those things are the starting points. Then you get into talking their language and helping them understand what’s in it for them, and that doesn’t always have to be materialistic or money. It could be recognition or a sense of fulfillment or achievement, but appealing to them on a very human basis — here’s why we have to do this, here are the alternatives — and selling them.”
The right people rapidly become apparent because not everyone signed up. Newlin says he could see pretty quickly who was just nodding their head to agree and who actually had the heart for it, so he made massive changes at the management level, overturning two-thirds of the officer corps of the company. He didn’t start right away, but within six months, he started making changes.
“You try to give people a chance and sell them and motivate and inspire them, but in the end, if you can’t change the people, you have to sort of change the people, so we had to do some of both,” he says.
That continued for about a year. As people left, Newlin hired people from leading companies that bought in to what he was trying to do already. In doing so, they, in turn, cascaded that process down. Someone would come in who bought in, and about six months later, he or she would start cleaning out and augmenting his or her team to get people who bought in.
“It takes two or three years to get those players in place at the right levels in the organization,” he says. “That doesn’t mean you wait until then to make things happen, but when things really start to gel like they are for us now, and they’re harmonized, I think it’s about three years.”
Stay on task
As each quarter went by, that on-time delivery rate inched up, and after five quarters — and ahead of schedule — PolyOne reached 95 percent.
“They felt really good about getting a victory,” Newlin says. “It wasn’t a victory in terms of earnings per share, but it helped them understand that with some direction, and with a strategic plan and a focus, they could begin to do things that felt successful. It’s a small victory, but it’s not insignificant in terms of transforming the culture at the time.”
With one small victory under his belt, Newlin was beginning to think bigger. In late 2007, he did something many would deem crazy: He publicly rolled out all of PolyOne’s goals that he wanted to achieve by the end of 2012.
“It was risky, and we said, ‘Here’s what our financial objectives are, here’s what our innovation objectives are, here’s what our globalization objectives are,’ and we published them,” he says. “It might have been foolish, but it was one of the best things we ever did because it put the pressure on us. It said to the organization that I and my team will be held accountable.”
This was something that the employees needed to see. They often snickered and joked about different initiatives being the flavor of the quarter because leadership would start down a path with something, and if they didn’t see results in a quarter, they typically abandoned them.
But while the employees liked seeing this, investors weren’t as optimistic. At one point, he remembers doing this in Chicago and could see the investors shaking their heads in disbelief at how ridiculous they thought it was.
“There’s no question they were skeptical, but I just laid it out — ‘This is not going to be a cost-cutting exercise. This is going to be a specialization strategy, a differentiation strategy, and it’s going to take us time. If you’re the type of investor who wants to turn your portfolio every quarter or two, you’re not going to be happy,’” he says.
He and his team worked harder to pursue longer term investors who really understood the story and rationale behind it. Some people believed in it, and others didn’t, but he continued pushing PolyOne forward.
Demonstrate your value to customers
As PolyOne moved forward, the company was now meeting its on-time delivery rate goals, which was a great improvement to customer service, but it now needed to show the customer why they had to pay for this type of service.
“I think we used to think we were customer-oriented whenever we would drop price to keep an account, even if it meant losing money on an account,” he says. “That’s not the kind of customer you can have an ongoing relationship with. This is not the Red Cross. This is a business. This is a public company, and we’re expected by our shareholders to earn a reasonable return and profit on that.”
Oftentimes, customers would somewhat bully PolyOne by saying their competitor will give it to them at a certain price, so they need to get to that level too, or they’re gone. While before, the company often caved and lowered the price, the new PolyOne won’t.
“We usually at that point say, ‘We can’t and here’s why,’” Newlin says. “Here’s what we think we’re doing for you, and if you don’t agree with that, by all rights you should make the change.”
And if a customer decides to leave for a competitor, instead of holding a grudge against them, Newlin views it as a failure on he and his team’s part that they haven’t convinced that customer of their worth.
He needed to align with the kinds of customers who appreciated what they were doing and would pay them for the service and the uniqueness they provided.
They developed a proprietary tool for their sales force that would map the competitor’s program and cost with PolyOne’s by looking at scrap rate, production, electricity costs, speed the machines could run, cost savings for the organization, and time it takes to change over the machine from one to another. By laying out this information, it was easier to show why the premium the customer paid to PolyOne made sense because it would, in fact, save it more in the long run if the company looked at all these other factors.
“We have to be competitive, and we understand that, but at the same time, we can get a premium for the great quality, service and differentiation we have,” Newlin says. “We’re investing almost 3 percent of sales in R&D — that’s the highest we know of in our industry and it’s pretty substantial.”
Showing customers the worth PolyOne brings to the table has been helpful in rationalizing the company’s commitment to not give away its product for prices that aren’t fair anymore.
“We want our customers to use our service, that’s what we’re all about, but they have to pay us a fair price,” he says. “They can’t pay us a price they pay someone else that doesn’t provide that and expect it to all work out.”
While Newlin has been able to take a stronger stance with customers and demonstrate the company’s worth with data, that’s not enough to continue driving PolyOne forward.
“You can’t keep having the old, antiquated, me-too products and expect to get any kind of a premium,” he says.
Because of that, Newlin wanted to focus on innovation. One of the goals he set in those to achieve by 2012 was a vitality index — what percentage of products sold were five years old or newer. In 2006, PolyOne had about 11 percent of its products in that category with a goal of getting that number between 35 and 40 percent.
One way innovation gets emphasized throughout the organization is through the company’s innovation centers. At these centers, customers can come in and view innovative products that have been made by other companies using PolyOne’s products and technologies. Some examples include the soft plastic grips on some razors and tools, metallic-looking plastic parts for some popular car brands, certain colored or scented products for personal hygiene products and BPA-free materials used for sippy cups and water bottles. It helps them see the possibilities instead of just looking at the product strictly by itself in its original form and not for its possibilities. They can also test ideas, and PolyOne provides office space for those who are in town for a few days who need a place to work and collaborate.
Another way Newlin drove innovation was by inspiring his employees to think about it. Earlier this year, he challenged employees to submit innovative ways to use PolyOne’s plastics know-how, formulating know-how or any other expertise customers tell them about. The top three would be rewarded, and anybody could make suggestions.
He thought he and the team would get 150 to 200 ideas, but they received 657. His head of marketing and head of R&D pulled some all-nighters going through all of them, and they determined that 165 of those were viable. The top idea came from an HR person locally, and the second- and third-place ideas came from employees in China.
To reward employees, everyone who submitted an idea got a small reward, and then the top three winners received innovative prizes, made by innovative companies, to reward their innovative ideas. The top prize was a Samsung 3-D television. The other two prizes were an Apple iPad and a Sony Reader.
The top three ideas are in the process of being patented and implemented right now, and the other 162 ideas were divided up.
“They’re not sitting around,” Newlin says. “The businesses have been prioritizing them. One business got 30 of these, and they can’t possibly work on 30 at once, so they’re saying, ‘We’ll do this one first, or we might outsource that one if it’s not a proprietary.’”
It’s created a new problem, but its one he’d much rather have than the polar opposite.
He says that’s how you get the process started — taking what your company knows how to do and then finding exciting and meaningful uses for it for your customers. Then you have to take it a step further and start anticipating the future by asking them questions to understand their needs and try to recognize potential pain points they may not realize they have or will have.
“At the speed at which business flies today, you can’t wait until your customer discovers they have a need,” he says. “You get a lot of that, but you have to get out past them and look ahead and anticipate emerging trends, regulatory driven changes that are going to impact your customers, things that are going to influence their outcomes, and you have to start working on that generation in advance of when the customer even realizes they need it. Then, the moment that it’s there or ahead of time when you develop this, you can take it to them, and they can be the first mover and get a big gain in the market.”
He’s extremely pleased with the progress made — the 2010 vitality index was at 40 percent. He’s also excited to see how much more innovation comes out of the company in the next year as a result of all of these ideas slowly getting implemented.
“We’re not Apple, we’re not Google, but we’re not the old PolyOne either,” he says. “In the context of our industry, we’re very forward-looking.”
With a little over a year left to achieve the goals laid out in 2007, Newlin is confident in PolyOne’s ability to reach those, because he sees a company that has changed tremendously since he took over.
“It’s really a lot of fun now,” he says. “The early years were very challenging. They were very frustrating. I felt like you had to do a lot of work that wouldn’t even be visible to employees or shareholders, but you knew you had to do it, and some of it was difficult work.”
The original culture has long since disappeared, and he now has an engaged culture that is poised to grow the $2.6 billion company.
“Now we’re having a lot of fun at PolyOne,” Newlin says. “The attitude of our employees is very different. It’s a fun place to work, and we work hard. There’s a sense of responsibility, and there’s a great sense of commitment, but people are having fun and getting a lot of rewards and a lot bigger sense of fulfillment than they have in the history of the PolyOne organization. … People feel good about our company, they feel good about where we’re going, and they feel like we have a lot of potential and a lot of room to grow as we rev this thing up.”
How to reach: PolyOne Corp., (440) 930-1000 or www.polyone.com
At the end of each year, Charles Gusmano throws a huge party for his 365 employees. With guests, he typically hosts around 1,000 people for games, food and prizes that include car giveaways. Gusmano welcomes the expense as an opportunity to show his employees he recognizes their hard work.
“Even though businesses are slower than they’ve typically been, everybody’s off from the high, if you want to call it that — despite that we’re doing more for our employees than we’ve ever done before,” says Gusmano, who is co-founder, president and CEO of Southern Waste Systems LLC.
By furthering a supportive, caring company culture, Gusmano has grown SWS from one facility to 10 in a decade.
Smart Business spoke with Gusmano about how to keep employees motivated in tough times.
Interpret change. When you lead by example and you treat people right — starting from the top of an organization — you are going to have a successful company no matter what. To get into business examples, it’s staying on top of change and things that are happening around you.
I think business is kind of like a unicycle. You’re either peddling forward or peddling backward. There’s really no standing still. You’ve got to keep your managers and everybody focused on moving forward.
You’re kind of guiding the ship and being stern and holding them accountable. At the same time you’re making a lot of quick moves. Sometimes people don’t understand that and they get nervous. My job is to keep them focused, to explain to them that change is good in some ways and we have to make these moves if the company is going to stay and survive.
Show you care. We serve our customers, and I also want to believe that we serve our employees. What I instinctively grew up with, the family values, those little things, the ‘thank yous’, the ‘we really appreciate the hard work,’ the pat on the back — I want that instilled throughout the company from the top down.
So on a daily basis what I find myself doing is going around patting everybody on the back, (saying) ‘How’s everything going?’ and bringing out all the positive things.
Instinctively, I try to be in a different facility or two every week, so at the least, the employees know that I’m there and I’m active and I’m accessible. A lot of them do know that I have an open-door policy and that they can get in touch with me any time, day or night.
Lend an ear. When you listen, you’d be surprised what comes out of that. I do that quite often whenever I go to a facility. I’m always talking to the people that are out on the ground. You talk to those people — that’s where you get most of your information from. Those are the guys that really know how to make your company better and what you can do to improve it and what the real problems are. As you go up the chain of command it kind of gets diluted. So I make it a point even to my managers to make sure that they are really hands on enough and that I get information on my end that’s factual.
Be a resource. Everybody is having a hard time with something, whether it’s in their family, whether it’s financial — it could be a bunch of different reasons. I try to help whoever we can, and sometimes it’s a dollar value and a dollar value can do it, and sometimes it’s not. Sometimes it’s just meeting that person somewhere and lending them an ear or giving them advice or steering them in the right direction or just showing them that you’re there, showing them that you care, giving them my phone number and if you have any problems call me.
When anxiety is high, productivity is down. When that individual is wondering how he is going to pay his rent or he’s going to be out on the street, what do you think he’s thinking about when he comes to work? He’s not thinking about that. He’s thinking about how he’s going to get the money to pay his rent. I take that off the table and that guy knows that ‘All right, I’m OK right now. I can come to work as the best person at work.’ And he’s going to perform to the best of his ability.
How to reach: Southern Waste Systems LLC, (888) 800-7732 or www.southernwastesystems.com
Achieving a sustainable competitive advantage in any business often seems to be an elusive goal.
There are many ways to gain a competitive advantage, but in today’s world, information crosses the globe so rapidly that ideas and methods are soon copied and technologies quickly become obsolete.
Executives of high-tech companies claim innovation as a core value and point to an extensive portfolio of product and process intellectual property as evidence of a “culture of innovation.” It is this culture that they claim to be their source of competitive advantage. Why then do so many such companies find success short lived despite maintaining a robust IP portfolio?
I won’t deny that there is a strong correlation between technical innovation and competitive advantage, but the fact is, a true culture of innovation encourages and supports creativity from all associates, not just those in the technical community. To eliminate any confusion that might arise, I prefer the more encompassing “creativity” label for the core value necessary for sustainable competitive advantage.
Many companies struggle with the conflict between standardizing every process, method and procedure to minimize risk and/or assure consistent quality and allowing associates to be creative, encouraging them to think outside the box and rewarding risk-taking at every level of the organization.
The secret to achieving a sustainable competitive advantage lies in finding the solution to this apparent conflict that works for both your internal organization and all of its customers.
I have observed that companies that are not successful in finding this solution, and they often fail for one or more of these three primary reasons: poor communication within the company, an ill-defined process for implementing improvement ideas, or inadequate associate training in the use of the tools of improvement.
A communication plan should be a fundamental part of any company strategy, but it becomes even more important when the organization is in transition. Management must make the case for change to all associates, create a picture of what success will look like, establish metrics and provide frequent progress reports. It is important that all supervisory personnel are on the same page so the message is consistent throughout the company.
Continuous improvement programs must be built around stable processes. These processes provide a performance or output baseline from which the effectiveness of any proposed change can be measured. The first step, therefore, often missed, is to establish that a process is stable. This is how the risks associated with constant change are mitigated in an environment of continuous improvement.
Of course, disciplined use of the tools of improvement throughout the organization is the backbone of the change control system. Integrating the use of these tools into the fabric of the company can be done in a number of ways, ranging from hiring specialists to support improvement teams to training all associates in selected problem-solving methods.
Given that these elements are in place, delegating responsibility and decision-making to subordinates at lower organizational levels while accepting accountability for the business results often opens the floodgates to continuous improvement, resulting in quick, creative solutions to company and customer concerns, issues and problems.
The goal is to develop a work environment in which each and every associate is empowered to help the company succeed by finding and eliminating waste and inefficiency in his or her job function as well as throughout the enterprise, has the necessary skills to do so effectively and willingly accepts that challenge.
With the right checks and balances in place to protect its customers, a company that goes down this path will be on the way to achieving a sustainable competitive advantage.
George Perry has more than 40 years of experience in engineering, operations and executive management. He retired as president and CEO of Yazaki North America Inc. in December 2009. Reach him at firstname.lastname@example.org.
Executives across the Silicon Valley received a wake-up call in January, when Eric Schmidt stepped down as the CEO of Google. Rumor had it the tech giant and former Wall Street darling had missed the social network boom and lost its innovative edge, as Schmidt focused on day-to-day operations while digressing from Google’s legendary 70-20-10 rule, which requires technical staff and management to devote 10 percent of their time to dreaming up new ideas.
Although leadership is the catalyst and source of organizational innovation and creativity, busy executives don’t need a complex plan to inspire and encourage an imaginative culture, as long as they’re willing to shake things up and not punish failure.
“Creative leadership is about giving people permission to dream and encouraging them to try something different,” says Dr. Terri Swartz, dean and professor of marketing for the College of Business and Economics at California State University, East Bay. “You get there by shaking things up and not letting employees settle into the status quo.”
Smart Business asked Swartz to describe the activities and behaviors that inspire and promote an innovative culture.
How can executives inspire creativity by shaking things up?
Although bureaucratic processes and formal protocols create the organizational discipline, which often produces short-term productivity gains, they actually threaten a company’s long-term financial health and stability by discouraging outside-the-box thinking and the development of new products and services.
Give people permission to dream by launching meetings with a brain teaser instead of a reading from the latest financial report and allow them to play with simple, creative toys like Legos, pipe cleaners and Silly Putty during conferences instead of leaving them to text message co-workers or read e-mails.
Next, invite new perspectives on old problems by holding meetings outside traditional conference rooms. Stroll the campus while you meet, congregate in a local park or shake up a stale routine by asking participants to sit in different seats. Finally, change the menu in the cafeteria and even the background music in the office on a regular basis, so employees learn to anticipate and embrace the unexpected.
What other simple, cost-effective techniques incite innovation?
Employees need breaks and a change of scenery to get their creative juices flowing; otherwise, they’ll spend all of their time with routine activities and putting out fires instead of dreaming up new ideas. In fact, carving out creative time and changing venues were simple but effective practices under Google’s 70-20-10 rule. Technical staff were asked to spend 70 percent of their time on core activities, 20 percent of their time on secondary business pursuits and one day each week in a different room or locale, just so they could focus on new ideas. Yet all too often, companies put the kibosh on telecommuting or non-traditional work schedules that break up daily routines and actually encourage forward thinking.
How can executives encourage risk-taking and companywide participation?
It’s easy for companies to digress into a culture that shuns risk and thwarts new ideas as they become mature and successful. But executives can dissuade group thinking and invite companywide participation by maintaining an open door policy and soliciting everyone’s opinions once an idea is suggested. Keep naysayers from getting the upper hand by scripting the positives as well as the concerns when weighing the merits of an idea. And don’t allow risk managers or lawyers to quash new products or ideas until they’re fleshed out.
Finally, travel the hallways and visit the cafeteria to solicit new ideas from everyone. Encourage new behaviors by writing down employee suggestions and recognizing every submission.
What else can executives do to encourage innovation?
First, hire and retain the right people. At first glance this may seem simple, but think of the relationship between elephants and fleas. Elephants are big, organized and successful systems, much like today’s corporations, but they are established and set in their ways. They cannot survive change without fleas. Fleas represent creative individuals or groups. They see themselves as different and want to make a difference. Unfortunately, bureaucracies often isolate or suffocate ‘fleas,’ killing off their ideas and passion, ultimately leading to their own demise.
Second, encourage and reward creative ideas from any source. Also, encourage employees to play together because participating in outside activities or playing group games during lunch breaks builds familiarity and trust, which is essential to the creative process and aids in the acceptance of new ideas. Use instruments, candid feedback and pulse surveys to gauge your open-mindedness and temper your reaction to new ideas and departures from the status quo. Executives may unconsciously quash new ideas by expressing a contrarian view or allow personal biases to interfere with their objectivity.
Next, lead the way by changing your routine and asking line managers to do the same. Finally, be willing to invest in the future. Although investments in dream time and allowing employees to roam the property may not produce immediate financial rewards, there’s no doubt that encouraging innovation will yield dividends in the future.
Dr. Terri Swartz is the dean and a professor of marketing for the College of Business and Economics at California State University, East Bay. Reach her at (510) 885-3291 or email@example.com.
When Ray Anderson, the founder and chairman of Interface, first articulated his sustainability vision, employees and investors were skeptical, but it was actually a competitor who said what everyone was thinking, “Has Ray gone ‘around the bend?’”
Anderson’s response was vintage entrepreneur: “Yes, I’ve gone around the bend,” he told a gathering of Interface people. “That’s my job — to see what’s next. The last time I went around the bend, I found the technology to make carpet tile, and that’s worked out pretty well for us, hasn’t it?”
Chances are your company wasn’t born with sustainability in its DNA. And whether you’re coming to the green movement by choice or necessity, you likely already know that pursuing a lower impact business model is a real game-changer. Those of you experienced in organizational change know that once your perspective is radically altered, you see things through a new lens.
That’s what it’s like when sustainability becomes part of your organization’s mission. You have a new perspective on everything in your product or service’s life cycle — how you design and source materials, how you manufacture your product or deliver your service, and what happens at the end of your product’s useful life — will you reclaim it and use it again? As you begin to rethink everything, it hits you: You have to rethink everything.
Radical thinking starts with radical questions — not radical edicts. Good questions can stimulate new thinking and naturally encourage dialogue. Dialogue can lead to good ideas or, in the best-case scenario, a transformative vision.
That’s where senior management support — what we call “permission to pursue” — comes in. Setting the tone at the top communicates that that big ideas are a priority. And while it might initially be overwhelming, don’t hesitate to set bold, audacious goals. A NASA engineer once told us that after the first Apollo series of moon shots, morale at NASA was at an all-time low. When asked why, he said that President Kennedy’s challenge, to put a man on the moon and return him safely before the end of the ’60s, turned out to be too easy. Kennedy’s seemingly ambitious vision was not ambitious enough. Having succeeded, NASA had no other big idea to inspire them.
Once you have set your sights high, “permission to fail” becomes just as important as “permission to pursue.” New thinking, by its very nature, is speculative. As Henry Ford said, “Failure is the opportunity to begin again more intelligently.” And while it was GM and not Ford that gave us the EV1, without it, we may not have the choices we have today when it comes to alternative-fuel vehicles. And if it weren’t for the before-its-time Newton (one of the first PDAs, created by Apple), we might not have smartphones and iPads today.
It’s said that the status quo is a powerful opiate, and if you’ve ever been inclined to say, “That’s always how we have done it,” then you know it’s true. One potential outcome of your new perspective is the idea that you should actually stop doing something — not just do it differently or better but actually stop doing it. It was true for Interface when we learned how energy- and water-intensive our original process for printing carpets was — we just stopped doing it. We had to find another way to build color and pattern into our floor coverings — an exercise that led to innovations too numerous to list here.
The rationale we’ve applied to thinking about sustainability could be applied to just about any situation where you’re trying to pursue a new business model. But consider motivation and outcomes for pursuing sustainability: using fewer natural resources to produce higher quality, better-performing goods or services, and to make your customers a part of your supply chain by designing reclamation and reuse into your system. All of this comes while you’re engaging your work force in the opportunity to think differently, to embrace failure as a learning tool and to do it all in the name of future generations.
Jim Hartzfeld is managing director of InterfaceRAISE, the peer-to-peer sustainability consultancy of Atlanta-based carpet manufacturer Interface Inc.
It was the year 2000, and John Scardapane was in his salad days leading Saladworks LLC.
The phrase “salad days” derives from a line in the first act of William Shakespeare’s “Antony and Cleopatra,” in which Cleopatra laments her earlier involvement with Julius Caesar:
“My salad days, when I was green in judgment, cold in blood…”
Scardapane isn’t cold-blooded, but the former chef was green in judgment as he led the restaurant chain he founded in 1986 toward a franchising concept that could serve as a springboard to rapid growth, but required the corporate leadership to provide a strong, stable support system for prospective store owners. It was something Scardapane had yet to address.
“I was very green about multi-unit operating,” he says. “We had no structure, we had no core values, we had no manuals, no training programs. We were doing extremely well, but our volume was covering a lot of our seams.”
Scardapane — also the chairman and CEO — decided to begin franchising the stores to family members and friends, hoping they would take the restaurant concept and run with it the way he had. Scardapane’s family and friends had expanded Saladworks to 25 locations as the century turned, but nothing was standardized except for the restaurant name.
“It got to the point where I either had to start building an infrastructure to support them properly, or find someone who could do it,” Scardapane says. “I had no success finding anyone else, so I decided to start building the infrastructure.”
In 2002, Scardapane began selling franchises to the public, and now Saladworks is a chain of more than 100 stores with locations in the New York, Philadelphia, Washington, D.C. and Atlanta areas, along with locations in California, Florida and Missouri. The company employs 2,500 between corporate and franchised locations.
But to get there, Scardapane had to build a growth plan, a strategy for the future and a culture. In short, Scardapane needed a system that worked.
Define your culture
In the early years of the previous decade, as Scardapane began franchising Saladworks locations to family and friends, he knew something was missing from the business equation. But he wasn’t sure what it was.
Scardapane sought out the assistance of executives at Commerce Bank and Wawa Inc., two companies he admires. Through those companies, he found a pair of experienced executives who were willing to mentor him and help grow Saladworks.
“We found a banking executive at Commerce Bank who showed me how Commerce developed their culture and strategies,” Scardapane says. “The gentleman from Wawa came in as a consultant. I asked him to spend a couple of days in the company, go around to every employee and talk to them, come back and give me your opinion on what is happening. He came back to me after a few days, and told me he was extremely impressed. He felt we were running a company structure like you’d have for 500 stores, but he felt the one thing that was missing was a culture.”
Scardapane wanted to know the reasoning behind the need to develop a culture, and why it was critical to his company’s success.
“I asked him, ‘What is a culture and why do I need it?’” he says. “We talked about it, he helped me put everything in writing, and everything else evolved from there. I found out that once you have that culture in place, that is when you can start empowering everyone in the company to make decisions because you know they’re all going down the same path.”
Scardapane decided to craft five core values that would serve as the foundation of Saladworks moving forward: customer service, a passion to be the best, valuing other team members, doing what is necessary to get the job done, and hiring the best people. Those five principles became Saladworks’ DNA, and something at the heart of the vetting process when Scardapane and his team are searching for new franchisees.
“Whenever we’re interviewing potential new franchisees, we want to see if they match our culture,” he says. “We’re really interviewing them concerning whether they have the passion to be the best, are they willing to do the right thing, do they have integrity and honesty. Are they going to do whatever it takes to get things done, and are they going to grow future leaders? Each department has specific questions that pertain to their area, but they all follow those guidelines.”
But even if you hire the right people, you won’t be able to fully engage them in your company’s culture without involving them in the process of shaping your plans for the future. Each year, Scardapane involves his corporate staff in the strategic planning process. Involving the corporate staff allows the home-office work force to better reinforce the culture among the franchisees.
“Everybody has a chance to ask whether we have lived up to our values in the past year,” Scardapane says. “And we look at whether those values are reflected in our programs for the next year. So it’s basically us asking ourselves, ‘Do we still believe in our values?’”
Scardapane drives the discussion down to the franchisee level by taking selected franchise owners and putting them through the same process. To make a truly open forum where no opinion is off limits, he bans members of corporate leadership from the franchisee discussion.
“Nobody from the home office is there,” he says. “I have a consultant help them get through the process, but anything they say never gets back to the home office regarding who said it. Then we compare their strategic plan and what the franchisees think the strategic plan should be for the coming year to the one we did for the home office.
“That way, we have a home office strategy and a strategy from the field, from the people who are actually out there working in the stores. It does two things: It helps us understand what is going on in the field, and it gets the franchisees to buy into the company culture. We share the information in a PowerPoint presentation every year at our convention for all of the franchisees.”
If you need to build or revamp your culture, Scardapane suggests you do what he did: find a mentor and have that person analyze your business.
“There are a couple of books out there, like ‘Good to Great,’ but they won’t give you the details and development, how to actually put a plan together,” he says. “You really need some support and structure and someone to take you through the process. Once they’ve gone through once or twice and shown you how, you and your team can take the ball and run with it.”
Maintain your momentum
Scardapane has learned that without an established culture and empowered, educated work force, you’re going to find growing your company to be a difficult prospect. You may have the capital and manpower to grow, but you won’t be able to harness it in any meaningful way.
Once you’ve established a culture and have the right people on board, however, you need to become something of a maintenance man, with team members constantly on the ground in all of your locations, offering support and promoting accountability.
Scardapane keeps his cultural momentum strong with a team of business coaches who each oversee a handful of Saladworks franchises. It’s the coach’s job to maintain contact with their franchise owners and address any issues they might be having.
Finding business coaches and training them is an involved process in and of itself.
“We’ve found that even if you have experience in your field, even if I bring in a guy who has 15 years of experience in the restaurant, it takes about six months before he can go out and support franchises. He has to know everything possible about owning and operating a Saladworks store. He can’t just read the manual. You have to spend a lot of time in the store working as a business coach before you can adequately support the franchisees. It takes a lot longer than most companies realize.”
One of the continuous challenges facing Scardapane is how to maintain a growth support structure that can stay ahead of the rate of growth. He wants to have a system that is capable of continually absorbing new stores into the fold, which means committing people and dollars to support locations that haven’t opened yet, and doing it months in advance.
“You really have to bring in the structure before you expand,” Scardapane says. “If I know we’re opening 25 stores this year, I’ve already brought in two business coaches, and they’ve already been in the pipeline for four months. That’s why the whole system needs a lot of cash flow.
“Where companies fail is they go out and sell a lot of franchises, but they don’t have the infrastructure to support it. They’re trying to backfill the infrastructure, and they don’t have the people to support the stores that are opening.”
If you’ve built the system properly and everyone in your organization is adequately supported, your company will begin to develop its own momentum. Leaders will groom other leaders, the daily business of the company will be well-managed and you will be free to pull back and view your company’s course with a wide-angle lens.
“Once you’ve been doing it for a while, you can do more managing on a macro level,” Scardapane says. “Once you get used to the ideas of others paying off, and watch them start to grow future leaders, you start believing in people and you start giving them more responsibility. And you become more open because of that. You start to realize that you don’t have to do everything yourself. That’s important, because as a leader, you really have to recognize that you’re going to need the help of others, and that sometimes their ideas are going to be better than yours.”
Scardapane wants team members who are smarter than him in their area of practice. He doesn’t want to have to be the expert on everything in his company. He wants to know that once he’s defined the boundaries of the company playing field through the culture and strategic plan, he’ll have star performers on the field making plays.
It’s the only way to ensure the culture he established more than a decade ago remains strong and allows Saladworks to continue its rapid growth, carrying Scardapane well away from those salad days of old, when he was learning on the job.
“It’s about what the leader does once he’s built the infrastructure of core values and strategic planning,” Scardapane says. “Then, it’s time to let people grow and make their own decisions. My entire team knows that the only time I get upset is when they don’t make a decision. I don’t get upset over a wrong decision. I get upset when they make no decision.”
How to reach: Saladworks LLC, (610) 825-3080 or www.saladworks.com
The Scardapane file
Born: Camden, N.J.
History: I was a chef at a New Jersey country club in 1985 or so, and I could see our golfers were eating more salads than burgers. We had a section of the kitchen that would make these very attractive salads with various vegetables, and I started to have an idea for putting the salad concept into a food court environment. An opportunity came up to buy a location at the Cherry Hill Mall, and I brought the idea in there. But the people who ran the mall told me that salads wouldn’t be successful enough to pay the rent. They asked me to find another concept.
On the third try, they agreed to give me a chance if I’d sell sandwiches as well. They thought sandwiches would be strong enough in sales. I agreed, and opened my first store in 1986. The salads were so successful, we became the highest-grossing counter in the food court.
What is the best business lesson you’ve learned?
Our major tipping point as a business was bringing the culture into the corporate office and franchise system. So my most valuable lesson is you need to have a culture.
What is your definition of success?
Realizing our vision would be our success, and that vision is to be the greatest restaurant brand. What I love to do is build something great. I get a sense of satisfaction watching our home office people rise through the ranks and watching our franchisees become successful.
Maybe you’ve noticed that there are some members of your team who aren’t quite living up to their potential. Have you taken the time to figure out why, or whether these people should even be in these roles within your organization? To compound the problem, perhaps your top performers are starting to look restless.
If you’ve been delaying the task of getting your team in top-performance shape because you don’t know where to begin, the time to take action is now.
“Talent optimization is so important today because businesses and the economy are starting to recover, and now business leaders are challenged by a new concern: talent,” says Meghan Bilardo, director of Organizational Strategy and Assessment at Corporate College. “No longer are they cost-cutting and trying to survive; they’re really looking to innovate and grow, and that takes a new strategy and approach to talent.”
Smart Business learned more from Bilardo about what it takes to win the talent war in a make-it-or-break-it business climate.
Why is talent optimization so important?
To win this year and beyond, organizations need skilled and engaged employees. They can either build the talent that they have on their team through education, coaching and assessment processes, or they can work to recruit talent away from competitors. It’s so important this year — and especially with supervisory and mid-level managers — that people can innovate and that they have opportunities to develop and advance within an organization. Managers must understand their employees’ capacity for new and emerging skill sets in order to help the business reach its objectives.
What are the consequences businesses face by not paying attention to this?
Companies that are limited to the old hierarchical structures are becoming dinosaurs. We’re in a business environment that is more skills-based than ever and we know that talent drives performance. One piece of the puzzle is that organizations don’t understand where their talent lies, what people’s capabilities are, and what they need people to be able to do differently for their organization to win. Organizations must integrate talent optimization into their strategic planning process.
Another piece of the puzzle is the selection process, which includes everything from identifying the critical roles needed to meet business objectives, sourcing candidates and then hiring them. Many organizations do not have the processes and tools in place to be able to make that selection, so, again, they miss out on an opportunity to win.
How can businesses improve their hiring processes so they’re bringing in the right talent?
Begin with the end in mind. What are the organizational goals for this year? What skills, attributes and knowledge do your candidates need to have to meet and exceed those goals? Ensure that your job descriptions are up to date and accurately depict the tasks and responsibilities of each role. Job descriptions should clearly define what a person needs to do to achieve those goals.
Once you’ve identified qualified candidates, another best practice is using testing and pre-employment assessment tools. Using an assessment tool with high validity means that it’s got a greater predictor of success for certain roles, and would also be legally defensible since you’re using it for selection. The goal is to match a candidate’s capabilities with an organizational need. Assessment tools can help you identify knowledge or ability to apply skills, as well as analyzing and problem-solving abilities.
The next piece to focus on is the employment experience. Organizations need to develop a brand for what type of employer they are. Are they an employer of choice? Do the most skilled and talented people want to work there? With a strong brand you can attract talent from the competition and decrease your time to fill open positions.
Once hired, it is essential to orient new hires to your organization so they can hit the ground running. Managers have a responsibility during the first 90 days to educate, support and check in with new employees.
How will talent optimization help businesses attract and retain top talent?
It relates back to your employment brand. If you are known for setting clear expectations, coaching employees, rewarding high performance, encouraging professional development and delivering bottom line results, the most skilled employees in the market will want to work with you. The best employee talent base is always learning, so businesses must understand what their people need to learn, why they need to learn it and the ROI in terms of increased performance and employee retention. Alignment with training companies and community colleges that offer curriculum and courses is a very important component as well. The entire skill acquisition learning space is evolving very quickly, and if businesses don’t understand this then they’re going to have difficulty in being agile and responsive to the market.
Most companies will burn out talent, as if they’re disposable. The companies that are going to win are those that feed their talent and give them what they need to realize personal, social and economic gain through their organization. That soon becomes the reason a talented person wants to work there: they know that they’re going to have an opportunity to grow continuously and to do new work over time. Those are the kinds of things talented people are going to be looking for when they’re deciding where to work, and they also drive employee engagement. When engaged, employees go above and beyond, which of course leads to improved financial performance for the organization.
Having a good talent optimization system doesn’t mean you’re always going to win, but not having one means you don’t have a chance.
Meghan Bilardo is the director of Organizational Strategy and Assessment at Corporate College. Reach her at (216) 987-2800 or firstname.lastname@example.org.