Jeff Heintz isn’t bragging when he says the legal firm where he is managing partner, Brouse McDowell LPA, made it through the recent recession without missing a beat ? it’s a matter of fact that the firm only had a few scratches.
“We did OK because we stuck to what we did best; I think our reputation served us well,” he says.
Once Heintz realized that the 92-year-old company’s brand was the best weapon in his arsenal to fight the recession, he instilled a way of thinking to bolster that premise for the 120 employees.
“We adopted the philosophy that we are going to control the kinds of things we can control,” he says.
The first premise pertains to the quality of work, an obvious aspect that can be controlled.
“If you work hard, and you have high character, and you behave in a manner that is befitting of things like ‘A Lawyer’s Creed’ and ‘A Lawyer’s Aspirational Ideals,’ good things are going to happen to you,” Heintz says.
“If you develop skills that enable you to help your client as a technician and develop the feelings that enable you to discern how best to direct your client, whether or not a particular strategy has short-term or long-term benefit, then you can become a trusted adviser,” he says.
“There’s no better feeling in the world than being a trusted adviser, somebody who works hard, develops a business and builds it into something grand, and it is the centerpiece of that person’s life and perhaps that person’s family,” he says.
Place a high premium on community involvement, and feel an obligation to give back to the extent you can by participating and furthering the efforts of nonprofits and volunteering because it is the right thing to do.
“It also gives your people an outlet other than just coming in and putting on their miner’s helmet and cracking away at work. It keeps them fresh, focused and gives them some perspective.”
Dedication to clients can also be controlled.
“We’ve had relationships with clients that go back decades,” he says. “We’ve been through tough times with clients and we’ve been there for them. This time it was tough times for everybody.”
With a relationship that has developed trust and understanding over the years, there are often mutual benefits.
“You and your clients benefit from the strength and depth of your relationships because businesses across the board were facing issues that they never faced before, having to consider choices that they never considered before, and I think it is a considerable comfort to them to know that when they would pick up the phone to call their advisers, it’s a number that they have been calling for 30 or 40 years.”
One of the tools that may serve you in being open with clients is what Heintz calls the “sneaky direct approach.”
“You just sit down with them, and you tell them the truth,” he says. “You let them know even if you can’t lay out for them chapter and verse what will happen, you lay down for them as best you can your belief about what will happen and what steps you are taking to control what can happen. I think people tend to react well to that.”
Another factor to control is the seriousness with which responsibilities are taken.
“Take that commitment of trust very, very seriously,” Heintz says. “One of your first thoughts should be how is this going to benefit your client ? not how much money can you make, not how quickly can you get this job done, not how much personal goodwill can you get from this.”
As a final matter, protect yourself as best as you can against the things you can’t control.
“Ignore a lot of the chatter for things that happen at the federal level ? the preoccupation with the recent Washington gridlock, for example ? as difficult as it is,” Heintz says.
How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com
Availability is king
It’s been said that no matter recession or economic growth, your ability to succeed in business is only limited by your availability to your customers.
Jeff Heintz, managing partner of Brouse McDowell LPA, believes in that. In fact, he has his home phone number on his business card.
“If you make your clients know that you are available to them pretty much 24/7, they appreciate the commitment and are very conscientious how they use it,” he says.
Likewise, cascade that premise of availability throughout your staff, from top to bottom.
“If you are accessible, that’s a talisman of your commitment to your clients,” Heintz says.
“Don’t tell them, ‘You need to get a hold of me between 9 a.m. and 5 p.m. on Monday through Friday because I’m not going to look at my mail over the weekend, and I’m not going to answer my phone.’
“Not everything’s an emergency, and there are people out there that live their lives at general quarters ? and everything’s an emergency ?but there are emergencies out there, particularly as we increasingly get to a global economy where it may be 7 p.m. on Friday night in Akron, Ohio, but 9 a.m. elsewhere on the globe where people are at work when you are at play. But most people use their best judgment, and they have the ability to discern between what’s an emergency and what’s not.”
How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com
When Hittle Landscaping Inc. lost 30 percent of its revenue during the recent housing market crash, President Jeremy Hittle had some difficult decisions to make. The first one was how to bring the $10.4 million family-owned company out of the funk. That took teamwork and some painful choices.
But equally as tough was to decide whether or not to hire a pricey leadership coach who could teach the Hittle management team the skills needed for long-term prosperity.
“It was expensive and it was difficult to spend the money in times like those, but it had to be done,” Hittle says.
“When the housing market crashed, we had to react to it quickly. Getting the upper management team together to fight the fight was a lot better than me just fighting it myself.”
The decision to hire an executive coach often requires considerable discussion. A business must tie it to an analysis of expenses, how to increase revenue and how to increase efficiency.
“You need to discuss what’s a better way to manage your business, manage your people, manage your customers,” Hittle says. “The lists will get very long and very hard to manage. How can you ask the employees to work harder? You can, but what’s that going to get you? So better leadership skills are a great way to improve efficiency, morale and communications. That’s where efficiencies come from. Efficiencies don’t just come from working harder.”
Hittle asked consultants to suggest a coach, and he hired one who had also written a book on leadership. Weekly and biweekly sessions helped the management team set goals and provided different ways to think about situations.
“It really makes a difference,” Hittle says. “There is a lot of frustration today in leadership. Frustration just doesn’t help. It’s kind of like carrying around baggage when you’re trying to be a leader.”
The personal leadership development benefits can be significant.
“It’s been great. It’s fascinating when a person does decide to consider his own leadership style, develop upon that and grow on what he’s found,” Hittle says. “I know it’s been huge for me, and I have had several employees step back and say, ‘Wow, I better understand my job now. It’s not just to tell people what to do. It’s about being supportive. It’s about accepting better who you’re managing.’”
The term “supportive” is a key operative word that is stressed in the leadership sessions.
“Employees need to know how valuable they are to the organization,” Hittle says. “You don’t want them to feel like they are employees ? you want them to feel like business owners. They all should feel like they have their own small business that they run beneath them. They feel like those beneath them are the employees that they employ, that they support, encourage and direct.”
That support helped the company reclaim 60 to 70 percent of the revenues that were lost and racked up near-record profitability for 2010.
Compassion is another focal point of leadership training.
“Listening, understanding what they want, and giving it to them,” Hittle says. “It’s not being a leader by directive. That’s not what to shoot for. Shoot for trying to nourish their needs, and your needs become their needs.
“A lot of leaders don’t quite understand it because they just want to have the first and the last say-so, and they expect it to be done that way. I don’t believe that works very well.
“Usually people that excel to a leadership position are firm-minded thinkers,” Hittle says. “They don’t realize that you have to open up, be a little vulnerable, and ask for some help and do some self development ? to try to pass along the message that we can all be better.”
How to reach: Hittle Landscaping Inc., (317) 896-5697 or www.hittlelandscape.com
Trimming and pruning
With a significant portion of its business tied to the housing industry, when the market hit bottom in 2009, Jeremy Hittle and his management team had their plates full learning how to be better leaders while they trimmed and pruned Hittle Landscaping’s operations to weather the storm.
“It was my job to not give direction but to convey a message,” says Hittle, president of the 140-employee company.
“The message was that we are in trouble, and we need everybody's help. I spent a lot of time in 2009 making sure that nobody thought otherwise. I tried to make sure that they knew that the company’s challenges were their challenges ? that we were all in it together.”
The solution was plain and simple: Everyone needed to be in concert and do some brainstorming.
“The only possible way to get out of a downturn like that was to come up with 50 ways that would help,” Hittle says.
“Obviously we had to lay off some employees, and we changed things around,” Hittle says. “Nobody worked any overtime. We worked four days a week instead of five. We saved on travel.”
Steps taken to recover from the downturn are lessons that likely will be retained.
“We are constantly working on reorganization. Even today, it’s about how we are going to change today to deal with tomorrow, just like we did back in 2009.”
How to reach: Hittle Landscaping Inc., (317) 896-5697 or www.hittlelandscape.com
On the surface, Chad Hallock’s situation seemed contradictory: generate more business while spending less money.
Hallock, the CEO and one of five co-founders of Budget Blinds Inc., was forced between this rock and a hard place by — not surprisingly — the economic recession. As a manufacturer and installer of custom blinds, shades and drapery, Budget Blinds’ customer base took a hit as the economy took a nosedive in late 2008, slashing new housing starts and halting remodeling projects in the process.
That made it much harder for the company’s 800 franchises — employing about 2,000 people — to drive business and turn a profit. Up until the recession hit, the company had been growing by about 100 franchises a year, with a failure rate of approximately 3 percent. Once the economy began its freefall, Budget Blinds was opening 60 franchises a year with a 10 percent failure rate.
“The challenge was to keep our franchisees in business and thriving in spite of the situation,” Hallock says. “When things are great, you can get very little in the way of new business and still be successful. When the housing market goes, so does the lead flow they were accustomed to.”
Hallock and his leadership team had to re-evaluate how they were marketing the business, where they were spending money and how they were going about beating the bushes for new potential customers. With the economy crumbling throughout the end of 2008 and into 2009, Hallock and his team came to the conclusion that large, high-cost marketing campaigns paved a path to the poorhouse.
“You really have to take a look at how you’re generating those leads,” he says. “You can do things like a mailer, a magazine ad or a television ad. But those cost money. So we quickly realized we had to plug this hole another way, and that’s when I said we had to focus on the Internet.”
Over the next several years, Hallock and his team structured and rolled out a two-pronged plan: Get to the top of the main search engines without spending money on sponsored links and provide franchisees with support for their grassroots sales efforts, tactics intended to build up the customer base through personal relationships.
Don’t make them scroll
As a company with no storefront locations, Budget Blinds is completely reliant on networking and mass marketing to find new customers. By reducing the company’s emphasis on print advertising and moving toward the Internet, Hallock made it a necessity to get Budget Blinds to the top of all relevant Web searches, which meant he needed to partner with people in the growing marketing area of search engine optimization, or SEO.
Hallock had used the Internet as one tool in his marketing belt for about a decade, but now he needed it to become one of his main sales-driving vehicles.
“Over the past six or seven years, the Internet has given us the best bang for our buck,” Hallock says. “It’s called CPL, or cost per lead. Once you see that the Internet is helping to drive a certain amount of business, how can I improve that? How can I spend my money and time on things that I can improve?”
At the top of most Internet searches, the user will find a set of sponsored links. Those links are paid advertisements. The company pays a fee to get their link at the top of the page. Hallock wanted keywords and key phrases to do the pulling to the top of the search, not the marketing funds he was feverishly trying to conserve. But he was wading into the deep end of the SEO pool with e-commerce companies that are specifically designed to market and sell on an Internet-based business platform.
Though Budget Blinds markets over the Web and does not have a brick-and-mortar retail presence, the company isn’t designed to be an e-commerce outfit.
Hallock went to his Internet marketing agencies, which he has been working with for about a decade and began to map out a plan that would allow Budget Blinds to venture into the fray with e-commerce companies.
“We had a bunch of meetings, all the agencies getting together in our conference rooms and talking about the challenge,” Hallock says. “Just because they’re e-commerce doesn’t mean we can allow them to show up and place higher on the searches than we are. Before we solved that problem, several years ago, we weren’t showing up well at all on the free part of the searches. Now that we have worked together to address the challenge and solved it, according to recent searches, we’re the second-highest company in terms of SEO in our space. The company ahead of us is an e-commerce company, and they’re one of our key accounts.”
The key to mastering SEO, Hallock says, is to learn how large search engines such as Google, Yahoo and Bing work. The big search engines know who is searching for what. Once you have uncovered who is searching for your product or service, when they’ll search for it and how often, you can build a strategy that can help maximize your Internet visibility.
“We can go to Google and find out, for example, how many people tomorrow are going to search the term ‘blinds,’” Hallock says. “How many are going to search for ‘window company’ and ‘window treatments.’ Google has the ability, with the way they built their system, to see what type of searching is going on. There is kind of a fundamental math equation that says if all these searches are going on and I’m in the one through three position on the search results, I’m going to get X amount of traffic. And if I can convert on that X amount, it will generate a given amount of revenue. You put a profit percentage to it, and you decide what it’s worth to go after. How many resources and dollars should I spend if this is the potential outcome?”
If you’re going to make a large commitment to SEO and Internet marketing, one place you will need to spend money and resources is with your personnel. Despite a shrinking revenue base over the previous several years, Hallock has still invested money in beefing up his IT team.
“Over the past three years, our IT team has grown to 22 people,” he says. “We’re not an e-commerce company, but we have grown our IT team and we have specific, exclusive agencies that handle our Internet, because of the level of commitment we’ve made. I am in meetings constantly, all focused on how we can improve our Web presence, how can we improve the lead flow.”
Lead the way
The Internet is a useful tool for marketing, but you can’t lean entirely on Web searches if your company isn’t structured strictly for e-commerce. You still need a personal touch, and that means putting power in the hands of the employees who develop relationships with your customers, and that’s where the second prong of Hallock’s strategy comes in.
You have to educate employees and back up their training with resources. At Budget Blinds, Hallock and his leadership team have worked for the past several years to give franchisees a ready-made jump-start in driving new business.
From the corporate office in Orange County, Hallock and his team have spent the past several years negotiating partnerships with major homebuilders around the country. The partnerships allow Budget Blinds to attain status as the exclusive provider for window shades and treatments in new homes.
“We’re working with a number of huge companies now, doing tests to see of they’ll be able to add us as one of their suppliers,” Hallock says. “With those kinds of deals in place, our franchisees don’t have to go out and generate leads. They automatically get a book of business when they start out with the Budget Blinds brand.”
If you’re going to ask a lot of your workers in the field, you have to provide them with a lot of support. You have to lay the groundwork before your people can excel. Hallock used his franchise system as an example of how to support employees in the field.
“The struggle with being a franchisee as the economy backslides is, I’m the franchisor and I’m asking, ‘What have you done for me lately?’” Hallock says. “But if you can start giving your people, the day they move into their franchise territory, some great opportunities, you’ll put them in a much better position for success.
“If, for instance, a franchisee knows that the brand is going to have a presence in all the big box retailers in their territory, that’s a big deal when you consider all the customer traffic that the different big box stores get. If you can negotiate deals to get into those stores, then when a franchisee signs on with you, they know they’re going to get all of that big box store’s traffic. They’re going to have a display in those stores.”
As a corporate leader, your job isn’t on the grassroots level. Your job is to hire the right work force to conduct operations in the field, and then leverage your resources to make them better at their jobs. Hallock has fully embraced the notion that he and his leadership team are the main support staff for the company’s franchisees.
“The franchisees are on the grassroots level,” he says. “They’re the ones we’re teaching to go knock on doors, go to meetings, do all the networking. That’s not corporate’s role. We have all the contacts, we meet with the vice presidents of the departments and work with them on a much higher level than grassroots.”
You need to maintain a global perspective on your business because you need to develop an accurate picture of how to best utilize your resources. Some employees, divisions and regions in the field will bear more fruit than others, for a variety of reasons. Hallock says that when you’re deciding where to distribute your corporate-level resources, it’s often best to aim toward the middle of the pack — toward the areas that are performing adequately, but could do much better. That is where the potential is often the greatest.
“Don’t always focus on the worst performers,” Hallock says. “I’ve seen people who want to focus all their time and energy on the worst part of their business, and you’re going to spend all of your resources and effort on trying to help them to be successful, and it won’t work. Instead, focus on where you think you can get the biggest return.
“The people in the middle, they’re responsive. They react when you give them sales tips, when you help them. You want to go where people will make a change, and the help you give them will put them over the top to where they’ll become more successful than they ever thought possible.”
Hallock’s multifaceted approach to driving new business has allowed Budget Blinds to weather the recession in relatively good shape. The company has remained in growth mode with a long-term goal of 1,500 franchisees. Budget Blinds generated $240 million in revenue last year.
“Just remember, don’t put your eggs in one basket,” Hallock says. “As you grow, probably eight out of 10 things won’t work the first time, but the two that do work make up for the eight that don’t. If you try only one thing at a time, when that one thing doesn’t work, you’re six months behind the eight ball again. You’re in an even worse position. That’s why you need to have that multifaceted approach.”
How to reach: Budget Blinds Inc., (714) 637-2100 or www.budgetblinds.com
The Hallock file
Name: Chad Hallock
Title: Co-founder and CEO
Company: Budget Blinds Inc.
What is the best business lesson you’ve learned?
Never let the failures get you down, because success always seems to be right around the corner. I can’t tell you how many times that happened. I work on things all the time that don’t work. But if I quit, I’ll never find the one thing that does work. When you’re hearing ‘no,’ you never know how close you are to a ‘yes.’
What traits or skills are essential for a business leader?
If you ask me, transparency is the one word I’ll come back to. They have to see your heart, your integrity, and your ability to take the bad with the good.
What is your definition of success?
Freedom. When I hit 1,500 franchises, and the franchisees are successful, I’ll have hit every goal I’ve wanted to achieve. That is what everyone bought into. And with that comes freedom. Freedom from worry over what is going to happen today.
When Millard Choate was an 8-year-old growing up on a cattle farm outside of Nashville, he and his dad built their family’s home. As he continued to grow, the family developed two cattle farms and built barns and facilities, as well. So from an early age, he knew he wanted to be a construction superintendent because of how much he enjoyed seeing things built.
In 1989, that dream was realized when he started his own company, Choate Construction Co. But the economic landscape at that time was challenging, so he had to really dig in to make the company succeed. As the child of Depression-era parents, frugality and positive outlook had been built deep down inside him at a young age as physical buildings were built up tall around him. These characteristics helped him establish his firm and ultimately grow his business despite the tough times.
So when the most recent recession hit, it may have sent shockwaves through many organizations and forced a lot of them to completely revamp their game plan, but Choate simply relied on his upbringing and experience and was able to take it in stride.
“What we have now is reminiscent of when I started the company in ’89,” the president says. “These times are kind of tempering and testing times, and it’s taken us back to our roots to focus on aggressiveness, focus on searching out all types of different projects, focusing on the core values of the company, which includes our procedures.
“Blocking and tackling is a big focus.”
Additionally, he relied on his upbringing and initial experiences founding the company to help him through.
“It’s a tough time,” Choate says. “It’s like people who went through the Great Depression. It can be tough, but it gives people an opportunity to improve, to sharpen both our individual skills and company skills. These times, due to the declining revenues and fees, force us companies to become more efficient. It promotes efficiency and frugality on a company basis as well as on an individual basis — it inspires people to improve themselves and become more and more of an indispensible component of the firm.”
Taking this approach has helped the company weather the storm when revenue dropped from a peak of $738.9 million in 2007 to $358.6 million in 2009.
“[It’s] just thinking and planning and focusing — focus on your core competencies and what you do best and also leveraging those competencies and the types of projects you’ve done,” Choate says. “I believe that’s really the key to it and just keeping the faith. An old coach one time said, ‘When you’re up against a massive team — I was a lineman — just keep your legs moving and keep your legs turning.’ That was true then and in business today. Just keep on plugging and keep on going. Don’t give up.”
That’s exactly what Choate has done. As a result, revenue climbed last year to $429.8 million. The company also has no debt and is focused on the future.
“We feel very confident,” he says. “Our backlog is higher than it’s been in two years, so we see glimmers of improvement, and we see a few more opportunities picking up, and we get a lot because of our reputation. … I feel positive. Reputation is everything, and that’s what keeps us going, so I feel positive in that regard.”
Here are the principles that Choate used to help him not give up.
Meet client needs
Scrounge. It’s often a negative word, but Choate doesn’t see it as such.
“Beat the bushes. No project too large, no project too small,” he says.
In other words, he’ll chase all sorts of projects instead of limiting himself to just a few types, and he’ll do whatever his client needs. It’s a tough market, and the competition is struggling and making things difficult for him.
“What we struggle with as a contractor is we will, at times, have to compete with firms that are really in tough shape that will price warp at a loss just to generate cash flow,” he says. “We can’t do anything about that. We just have to demonstrate that we have the right numbers.”
Not having any debt also helps assure clients that Choate is a good company to do business with.
“There are firms that are really on the ropes and some clients have concerns — will they be around?” Choate says. “Both clients and subcontractors are very nervous because typically the money flows through the general contractors to the subcontractors, and both the subcontractors and the owners are nervous that the contractor could go defunct and the money would have to be paid twice by the owner or the subcontractor doesn’t get paid. That confidence is a key in all parties.”
In addition to establishing the firm as one that can be trusted, he says he also makes sure to respond when customers — or anyone for that matter — calls.
“Anytime they should communicate or call or whatever, instant response is key,” he says. “They can rely on that. Just doing a great job and making sure that they have the confidence that we are protecting their interests at all times; I preach that over and over to our people. Clients trust us to spend millions of their dollars wisely. That’s a trust that we have to maintain.”
To better do that, you have to know what’s important for your customers.
“You have to understand what your client’s hot buttons are, what his interests are,” Choate says. “It’s not just always revenues. Each client has his own nuances so just customize your approach to that client and make sure you’re taking care of them and promote that you’re looking out for their best interest.
“You talk to them. You sit down with them at the inception of the relationship of the project.”
He has an expectations meeting to talk about what they want to see and includes all the key stakeholders — the architect, engineers and anyone else pertinent to the project — and he’s found clients are very positive and forthcoming in those meetings.
“Sit in a room and just go around the table and say, ‘What do you expect out of this job?’” he says. “Then, ‘What are your hot buttons, and what really bothers you in previous projects?’ You’d be amazed what comes out of that — just communicating and actually talking.”
He also says that not every CEO has to personally be involved with that level of intimacy with the client, because it’s just not feasible, especially the larger your organization grows.
“We have different groups here, but the division manager of that group, I expect to have a personal relationship with every client,” he says. “It boils down to that type of relationship.”
Focus on the positive
Years ago, when Choate’s computer would boot up, a short message used to pop up right before the system started — “Get pumped up!”
“Being enthused and going at it tooth and nail is good advice,” he says. “Going at things with a lot of enthusiasm and energy helps dispel gloom and doom anyway.”
He tries to keep employees motivated in the middle of all the negativity they see in the industry. One way he does that is by updating them on how projects are going. He shows photos and announces any new awards, which gets people excited and instills confidence in them. He also expects his managers to be positive, as well. For example, if the Choate Interior Construction group gets a project, the manager of that arm of the business will get on the intercom and just say one thing — “Wahoo!”
“That’s all he says,” Choate says. “Over time, people know what that means. That’s positive.”
He also tries to recognize people’s individual accomplishments, so if someone becomes LEED certified, he recognizes that person. He also recognizes people for accomplishments in their personal lives when he hears about them. For example, one employee received a national award from the Cystic Fibrosis Foundation, so he called that employee out for the accomplishment in front of everyone.
“It’s not only positive, but it’s two birds with one stone — it lets people know their individual efforts are recognized,” he says.
Choate understands that being positive isn’t the natural reaction for many, and he knows that you can’t control everything in business, but the one thing you can control is the way you look at what’s going on.
“Be thankful,” he says. “Realize what blessings you’ve got. Look at your blessings and appreciate the positive side.”
For example, while his volume may be down significantly, he knows that his business is still much larger than it was 10 years ago, so that gives him something to be thankful for in spite of the tough times. By taking a more positive and thankful outlook like this, it sends a positive message to employees so they can stay more upbeat and sets an example for them, as well.
“It’s good to realize that everything you have is a gift from God, and that’s who you really ought to give credit to in the first place,” he says. “That would help set the stage very quickly.”
Look at data
While Choate maintains a positive outlook in life and in business, another key to success through the recession has been not taking a Pollyanna outlook. You have to balance that positivity with being realistic or people won’t think you understand the situation.
“The other thing is being a realist,” Choate says. “I’ve recognized cycles for many years. The curve can’t always be on an upward trend. The growth rate absolutely can’t continue that unsustained climb. It has to, in some cases, decline. It’s a fact of life.”
By degree, Choate is an economist, so looking at data comes naturally to him, but often it’s something leaders tend to neglect.
“I encourage people to analyze the markets,” he says. “What are the coming trends? What are the needs going to be, not just today but six months to a year from now? Try to anticipate where to deploy your resources to produce the maximum return.”
For example, he says that most people recognize that government work and health care are bright spots right now, and condominiums are a more diminished market. Seeing that, he wouldn’t deploy resources to building condos but would focus on those other areas that will be growing and providing opportunities.
Choate saw his volumes increase every year of his business until two years ago, but because of the realistic outlook he had, it didn’t crush him when they declined. It may have been frustrating, yes, but devastating, no.
“It’s almost like the seasons of the year,” he says. “You may wish it was summer all year long, but you just accept the fact that you have fall and winter, but you have faith it will come back next year.”
How to reach: Choate Construction Co., (678) 892-1200 or www.choateco.com
Millard Choate, founder and president, Choate Construction Co.
Education: Vanderbilt — bachelor’s degree in economics and business with a minor in engineering
What was your first job?
I could go way back. I moved a pile of bricks for a neighbor when I was 5 years old. It took about two weeks, and I got 25 cents for that. My first real job was making concrete pottery and birdbaths and benches for a little company in Nashville, and I worked 40 hours a week — hard, hot work — and I made $40 a week. I was rich.
What’d you learn from that job that still applies?
Being frugal. Handing it well. Keeping a job and just doing the best you can possibly do. Be as productive as you can be. The man and woman who owned the store, those people became great references for me. Reputation is everything. That’s what I learned from it.
What’s the best advice you’ve received?
Trust your intuition and your gut-feel. I haven’t always obeyed that but I wish I had. Your gut-feel generally will often tell you or validate your perception of something or some event. Trust your innate gut feel.
What’s your favorite board game and why?
My family plays a game called Pictionary, and the reason I like it is it forces you to laugh at yourself. You can laugh at yourself and each other. Honestly, it’s taught my children to be able to laugh at themselves. Don’t take yourself too seriously.
Merv Dunn was having a moment of truth with himself. He realized he was frightened to go global with his company, Commercial Vehicle Group Inc. At that time, the company was only in the United States and had 95 percent of its business in one area with only two customers.
“I was afraid to start with it,” says Dunn, president and CEO of the vehicle component manufacturer. “But I was afraid of failure if I didn’t. I looked at my biggest competitor. I saw that they had stayed in North America, and they weren’t developing as the kind of company that I wanted to be. I was afraid if we did not go, we would not be successful, and we would dry up.”
There was another problem. The economic downturn of 2008-09 threatened not only the company’s health but its five-year strategic plan. The plan’s vision for growth and diversification geographically and in market use was at risk.
The first step was to start at the top, then work through the company to pare expenses.
“I took a 10 percent pay cut and so did my direct reports,” he says. “Then we put in a 10 percent pay cut across the board. In some cases, it was furloughs. They worked four out of five days a week. Some people we had to let go totally ? that was our last choice.”
And above all, the work continued. The team stayed true to the strategic vision. Global projects undertaken during the recession began to bear fruit.
When the 2010 sales figures came in, CVG tallied $598 million, up 23 percent from 2009. The company is in eight countries now.
Here are some tips on how Dunn helped stabilize the company as it gained strength to venture overseas.
Stay in focus
Dunn knew it was important to follow the strategic vision.
“Two years ago, there were a lot of people who didn’t think we were doing well,” he says. “They were questioning the strategy and they were questioning even internal management. When you started explaining your strategy and why you’re making these certain moves, then the overall company sees it. You may have pockets that still disagree, but once you can get them to understand why you’re making moves, I think then you get the buy-in.”
The vision needs to stay in place in good times as well as bad times.
“First of all, if you withdraw and pull everything in, you might as well tell everybody in the company that you’re closing,” Dunn says. “If you’re not working hard during the down cycle, then they lose confidence that you’re going to be here when the up cycle comes.”
Keep an eye on your competition because if they go under, you have a chance of getting their business. Develop contacts that could pay off with tips for new business.
“We get calls from customers who say, “We can’t get deliveries out of these guys. They seem to be having financial problems. Will you look at their product and quote it for us?’”
It’s not uncommon that if you follow those steps, you’ll see the benefits in more ways than one.
“It’s not unusual to pick up the business, and it’s not unusual to get a little better price for it because you’re going in with a product from a company that’s known to have a technically superior product and is known to meet its commitments ? and also does it in a consistent manner, and is honest,” Dunn says.
Hold on to staff such as the research and development department and assign them to develop new products or services.
“We developed three new products,” he says. “When you’re doing that, your people have confidence that they’re doing the right things and that you’re leading them the right way. In coming through an economic downturn and surviving that stronger, people kind of have confidence in that we know what we’re doing.”
Successes will encourage the employees, boosting their energy. Dunn used it as a rallying point.
“To come through it like we did, people are kind of walking on a cloud, saying, ‘Hey, you know, we’ve got a good game plan. Let’s keep after it,’” he says. “The successes that they’re seeing right now, it’s just tremendous, with the growth, and the different markets, the different customers. There’s just an excitement level. It’s like a basketball or football game. You start scoring, and your competition comes out with different plays, and you’re still scoring on them. People get pumped.
“You don’t always have to have what some people would consider the best team or the best captain, but if he’s winning, they get confidence in him quickly and they get excited.”
Be honest, consistent
The approach to take when expanding globally is really not that much different from the tactics you would take when building here at home.
“First of all, you’ve got to be honest,” Dunn says. “You’ve got to be competent in your abilities, you’ve got to trust your abilities, and you’ve got to be consistent. If I go there and they ask me to do something, and I don’t think there’s a chance in hell that I can do it, I tell them I can’t do it.”
People want honesty, no matter how hard the news is, and no matter which country is involved.
“If I tell them I’m going to deliver, when I’m going to deliver it, and I deliver it ? news travels. If I don’t deliver it ? news travels.”
Another important consideration about global expansion is to make sure the customer wants you to be there.
“A lot of people have had the attitude over the years, ‘Build it and they will come,’ or ‘We’re not going to build it until we know for sure we have customers,’” Dunn says, noting that finding a middle ground often works.
Go in small, and then with your technology, and quality and delivery systems, grow the confidence of the domestic market.
“That gives you the ability to start growing in leaps and bounds very quickly,” Dunn says. “But you have to be there in some form or you’re not going to get business because they don’t want somebody they can’t talk to.”
Do your homework. Get yourself in the geographic areas where your customers need you and learn about the country.
“You have to know the culture of the country that you’re in,” he says. “I would want people to get to know my culture if they were coming and putting a plant in my country, because to be able to turn my plants over to them, I need to know the culture, and I need to have trust in them.”
Gaining trust also involves patience. Subtleties in conversation can be misunderstood, for instance, when agreements are made. Be aware that some cultures place importance in not disappointing the other person.
“You’ve got to keep asking the same question and peel the layers of the onion back,” Dunn says. “See how consistent it is because many times you have to sort out the fact from the perception.”
When it comes to managing sites overseas, look at various options. You may find someone who already works for you that shares the culture and who could be given a management position.
“Usually, we can find somebody in our company that speaks the language,” Dunn says. “We’ve grown people either through acquisitions, we’ve selected the best talent, and if that talent was better than someone else we had in our company, we’d put the other person in a different role and we’d put this guy in the lead role.”
Ensure quality and buy-in
Concerns about quality are not limited by geography, and by following a simple rule that workers should treat a product like they were going to purchase it, many problems can be avoided.
“I think there are concerns about quality of products made in any developed country let alone an emerging country,” Dunn says. “Treat it like it’s a product that you’re going to buy. Do you want to be hassled taking something back that doesn’t work?”
The labor force in emerging countries can be trained just as in any other country.
“The people have to learn how to work in a factory when they’ve not been used to doing that,” he says. “Those lessons you’ve got to teach, and you’ve got to teach them until it’s second nature.”
You can do your global expansion alone, or take on a partner. Either way, make sure your reasons are solid.
In one country, Dunn built his own plant.
“I didn’t want to go in there and worry about that I might have a partner who didn’t see the same strategic vision as we had and the same commitment to the customer that we had.”
But in another country where CVG had already had some business dealings, it may be another story.
“I probably will have a partner, because we’ve been using engineering services,” he says. “We’ve had a strong relationship with someone over there that I feel has the same commitment to customers and the same commitment to innovation and to the employees and to the leadership.”
Once quality is secured, you also need employee buy-in.
“I believe in honesty,” Dunn says. “If a customer calls me with a problem, I don’t try to figure out whose fault it is. I want the problem fixed, and then we’ll deal with whose fault it is. It’s important to fix the problem, but it’s more important to fix the problem than to fix the blame.”
Not only does that lead to successful customer service, but it sends a message to the employee.
“Once you have a win, your team looks at kind of why you win. If they look at it and can see it was because you made the right strategic decisions and you make the correct day-to-day calls in the huddle, they buy in pretty quickly,” Dunn says.
Buy-in is something that needs to be addressed constantly with the staff, at all locations.
“If they don’t have confidence in the decisions that you are making and the outcomes that are happening, then they lose focus real quick and lose interest,” he says.
Give the employees the straight story no matter if it is something you don’t want to be honest about.
“Sometimes when you’re standing in front of a group and you get questions, you’ve got to say, ‘I just can’t discuss it right now.’ And, there are sometimes when you’ve just got to say, ‘Look. That’s not going to happen.’ Then there are sometimes you can go, ‘Yes, we agree with it and that’s what we’re going to do.’ You’ve always got to be honest. You’ve got to be consistent. You’ve got to trust your abilities. And you have to constantly stay in contact with the customer. Those are the kind of things that I push from my leadership role.”
If the leader can show his human side, the effects can be immeasurable. Dunn puts a high value on the experiences he has had with employees, even when a plant closing was imminent.
“I said, ‘We can’t be competitive here, and the customer is not happy,’” he says. “We’re in an economic depression with our end market, and we’re just not going to be able to keep it open. And I’m standing there, and I am thinking, ‘Oh God, how long can this take? I don’t want to do this. I don’t want to tell these people, but I’ve got to.’
“And at the end of it, there were these two older women who came up to me and said, ‘We’ll be OK. We’re worried about you, because we know how stressful this is on you. We know how hard this was for you to do. But we’ll be OK, so don’t worry about us.’ Two men said, ‘Is there anything we can do to help? Can we do anything to save it?’ I said, ‘Well, we can try. But I don’t think there’s any way to, to be honest,’ and they said, ‘We know how hard you have worked to keep it open. And we’re going to keep on working.’
“You know, that damn plant is still open. It doesn’t have near the employees it had, but they’re still adding to the bottom line. And they made it through the worst economic depression in this industry. The competitor liquidated and they got the business back after all these years. So it taught me that being honest with everyone is critical.”
How to reach: Commercial Vehicle Group Inc., (614) 289-5360 or www.cvgrp.com
The Dunn File
Born: Dayton, Ohio
Education: Eastern Kentucky University, master’s degree in operations management
What was your first job?
My first job was at 11 on a tobacco farm picking tobacco blooms. It was a buck an hour. That was a lot of money with my dad not able to read or write and my mom with a third-grade education.
What was the best business advice you were ever given?
I was fortunate enough when I got out of college to end up working for a guy that I had strong admiration for. One thing he always stressed to me was, ‘Try to think through your decisions. Don’t make them emotional. And most of all, be honest. Be honest with yourself more so than anyone else. And be true to who you are.’ My whole life I’ve competed against Harvard grads, MIT grads, and I have an undergraduate degree from Eastern Kentucky University. You’ve got to have something else to go along with it. I think being able to handle confrontation and being straightforward are probably the things that he taught me that I’ve stuck to. Have confidence in yourself. He said you’re here for a reason. You’ve got the job for a reason.
What’s your definition of success?
I consider success that as a person, when I see that my family is successful and then I look at my company and I see the people that are here are being successful, we’re being successful because the customer wants us, and to be wanted is a success. For me, seeing my company come out of this crisis, and people want to be part of my company, I consider that a success. It has to be wanted to be a success.
On taking risks: I don’t want to be 85 sitting on a front porch saying, … ‘I wished I’d tried that!’ I left a great company where I was president to jump out on my own in private equity. I screwed up, got with the wrong partners, lost a lot of money, started over again, did the same thing and won ? came out with good success because I learned from my failure. I think it’s always go
In a span of six months, K.B. Chandrasekhar found himself in the position of having to reduce his company’s headcount from more than 250 people to a handful of employees between its India and California operations. For the 24 months leading up to 2000, the party had been nonstop, but when the dot-com bubble burst, Chandrasekhar suddenly had to keep the doors from closing on his business.
“So we know for the next two to three years nothing would happen, but you have to keep the lights on and keep the engineers motivated and other people motivated in developing the product,” says Chandrasekhar, chairman and CEO of the cloud technology company, Jamcracker.
“The question is, at that time, how do you move from the party binge to develop a sober mode and still keep the core employees? But at the same time, you have to go through the painful exercise of probably reducing the company size to a fraction of it was before, then grow back up in a manner that positions itself for the market to come back and then take the leadership.”
After reducing head count, it can be just as hard to convince people who are invaluable to your company to remain loyal and stay motivated.
“I think the challenge is constantly looking at what kind of people you need to stay ahead,” Chandrasekhar says. “Our business is all about people business. If they are great people, we know we can scale great heights.
“Many of the times, I think this is where the leadership comes into play, because you have to lead from the heart at that time, in terms of the vision and the conviction and why this is going to be big in the future. In the near term, it’s why we all have to sacrifice. At the same time, keep the faith at a heighted level so we are sustained for success.”
To do this meant opening up the channels for honest and open communication about how Jamcracker would move forward. Because people can see every day what is happening in the company and outside, hiding news just erodes employee trust, so transparency for Chandrasekhar was critical.
“In tougher times, people want to ensure that they hear from you a little more regularly, and you also use electronic communications whenever possible,” he says. “So a judicious mix of the two helps you stay in front of your crowd.
“It is being upfront about it rather than trying to sugarcoat it. But at the same time keep emphasizing the vision, and where we are going and why this is a great opportunity as the next big thing.”
When people’s jobs are vulnerable, it’s critical that a leader demonstrates to the people that he or she is also willing to make sacrifices to commit to the long-term vision.
“I must be willing to put myself up to say, ‘Here is my resignation letter,’ if I’m not performing to what I said I would perform,” Chandrasekhar says.
Even though the company was losing money, Chandrasekhar was passionate about getting Jamcracker back on track. So he invested his own money to show his team his renewed commitment.
“We bought out all the other investors to bring in my own money, because we said this is going to take a longer time and other investors may not be around to make it happen — or rather, may not have the appetite to make it happen,” he says. “That boosted the confidence of all employees by reminding people that, ‘Chandra believes in it.’”
By keeping the vision at the forefront, Chandrasekhar has successfully built Jamcracker back from a low of 11 employees to 200 people in 2011.
How to reach: Jamcracker, (408) 496-5500 or www.jamcracker.com
In addition to empowering your team, K.B. Chandrasekhar, CEO and chairman of Jamcracker says successful growth requires leaders to sense when to let go of conservatism and know when to move into high gear.
Here are Chandrasekhar’s tips for how to prepare your company for when the market turns.
Set a scalable structure.
“Most times companies implode because they are not able to scale effectively. The key is to put in a structure that will enable a company to scale successfully when the opportunity is in the market.”
“Second is what I call the willingness to change the rules as the situation demands, because you are not the only stakeholder in the company. There are a number of stakeholders in the company, which means you must know when to really take risks and when not to take risks. You are constantly juggling between growth, value, creation and just management.”
Feel it out.
“If you are an early stage company and entrepreneur, you may not have all of the parameters to back up everything that you do, which means you are going to rely a lot on your intuition, on your gut and your perception of where the market is going. It’s important to have that third dimension of that.”
Like most business leaders, Frank Napolitano Jr. has a recession story.
His company, Global Affiliates Inc. — which does business as GlobalFit — saw a decrease in the number of consumer products sold. So the $20 million fitness solutions company, which Napolitano heads as president and CEO, needed to pull back from the consumer market and find new ways to provide fitness-oriented services.
Natpolitano’s company didn’t completely reinvent itself, but it certainly developed a new perspective on driving revenue.
Smart Business spoke with Napolitano about how to get creative when it comes to finding customers in a challenging economic climate.
How did you minimize the negative effects and capitalize on the positives?
The only thing you can really do when outside forces are driving prices down is sell fewer of those products and more of the others. We certainly worked to expand the number of gyms we worked with that gave us an opportunity to sell more, even though we were making less on each.
That is the way we mitigated the negative. On the positive, consumers were not so excited about spending money, and while prices on consumer products were largely declining, we found that companies were more interested in buying programs for their employees. We shifted our focus toward getting companies engaged in buying products that would help prevent employees from getting sick, injured or overweight in the first place.
What would you tell other business leaders about mitigating the negative and focusing on what the business does well?
The lesson every leader learns is that when you’re in the middle of battle, when things like a major recession occur, sometimes it’s hard to think strategically because you’re just trying to keep your head above water. If you do look at any of those situations from a strategic perspective, there is pretty much always something good mixed in with all the bad. The key is to find it, grab it and make the most of it.
How do you scan the market to figure out the best way to serve it?
Accumulating information about what is going on in your market is absolutely critical. It is important that you never lose sight of the competition, but it’s also important that you don’t let them drive your strategy.
You can’t put your head solely in your business. You have to be out there participating in the community, and in the community of your business. There are a fair number of organizations that bring together industry leaders trying to establish what they want and what they need, to help their employee populations and their insured populations be the healthiest they can be. It’s by participating in those outside activities that you learn a great deal about what they want and need. From there, you develop products and programs to meet those needs in order to have the greatest chance of success.
But you don’t want to be a lemming. Just because everyone is heading in one direction doesn’t mean it’s the right one, and it’s usually the creative idea, the one that is not the same as everyone else’s, that produces the greatest return on investment.
How do you lead the market instead of following?
That has to be the hardest question in the history of the world. The reason why there is always one person that has to end up making the final decision when the many options are presented to them by their senior staff is because part of that decision is made based on the facts available. But part of it is always based on your instincts, and you rely on your instincts. As imprecise as that answer is, it’s probably as good as it gets.
How to reach: Global Affiliates Inc., (215) 751-1992 or www.globalfit.com
(Reuters) ? Perkins & Marie Callender's Inc, owner of the Perkins and Marie Callender's restaurant chains, filed for bankruptcy in a Delaware court on Monday, citing a slump in sales due to weak economic environment in its primary markets.
Perkins & Marie Callender's, which is owned by New York-based investment firm Castle Harlan Inc, said in its filing it witnessed a sharp decline in restaurant sales in the Midwest, Florida and Pennsylvania, where it primarily runs its restaurants.
High unemployment and foreclosure rates in Florida and California led to a decrease in discretionary income for many historically loyal customers, resulting in a decline in customer traffic, the Memphis, Tennessee-based company said.
The company listed total assets at $290 million and liabilities at $440.8 million in its Chapter 11 petition. Eleven of its affiliates were included in the bankruptcy filing.
Perkins, which was formerly known as The Restaurant Company, operates or franchises around 600 restaurants in the United States, Canada and Mexico, court papers show.
The company was formed after the Perkins Restaurant & Bakery chain was merged with Marie Callender's Restaurant and Bakery in 2006.
“I felt adamant about not laying anyone off, not cutting wages and still supporting our community,” Penzone says. “With these three areas needing to remain, we had a tremendous amount of work and strategy to figure out. “
Her team worked together to eliminate unnecessary spending and were challenged rethink every aspect of business. As a result, the Penzone Salons support and create career paths for more than 520 professionals and their families in the local business community.
Penzone was named one of the 2010 Smart Leader honorees by Smart Business and Blue Technologies. We asked her how she overcame that challenge, how Penzone innovates and the importance of giving back to the community.
Give us an example of a business challenge you and/or your organization faced as well as how you overcame it.
Everything that we had planned on accomplishing my first year totally changed. Luckily, we realized early on that we needed to immediately make changes to every area and budget for the year. Our team successfully worked together to streamline the processes and eliminate unnecessary spending to allow us to cope with the economic issues. I realized that if our team could navigate through these challenging times, we would be able to face the future with conviction that our brand and our team are strong.
Also, as the leader of the organization, it was very important for me to inspire and reassure our team that we would be able to change and adapt to move our company forward. The team morale was very important because they are hands-on with our guests. We had to educate them on the changes in our world economy while at the same time empowering them to see the value of their service. While many competitors started to discount their brands we remained committed to believing that especially in these times our services are even more needed and we continued on without cutting prices.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
During this time, we brought in outside consultants to help us reimagine our brand, strategy and marketing plan. The research helped us to think outside the box and challenged us to see new opportunities. Our reimagine projects included launching a new website with an updated online booking system, videos, social media and a new brand campaign. We also reimagined our services, training and customer service.
How do you make a significant impact on the community and regional economy?
We support and create career paths for over 520 of our professionals and their families. We are very committed to our community by volunteering hands-on, giving back by fundraising and donating our services for events. Through these very difficult times, I made the choice to make sure we were still there to support our many nonprofits because I knew, now more than ever, they needed our support and help. I realized that this would be the area many companies would immediately cut out of their budgets. Our team pulled together to continue to give and help others.
How to reach: Charles Penzone Family of Salons, www.charlespenzone.com
Surviving this economy has been a challenge for all companies, especially those in commercial real estate like Casco Contractors Inc. But it’s not the biggest challenge on President Cheryl Osborn’s mind.
Her sights are set higher – on not just surviving, but maintaining stable growth through the downturn. She achieves this by creating open lines of communication to stay in tune with her employees’ workloads and putting technology in place to manage projects and keep everyone in the field informed, as well.
These processes have helped the firm, which specializes in Commercial Tenant Improvements, keep efficiency, quality and consistency first. And now, Osborn is looking forward to projected 2011 revenues that nearly double last year’s.
Because of this, Smart Business, ThinkASG, IBM and Union Bank named Osborn to the class of 2011 Smart Leader honorees. She shared how she maintains quality during growth and applies innovative technology to better manage her team.
Give an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Stable, managed growth is probably the biggest challenge that we have faced. Maintaining stringent quality standards can be challenging when a company is growing quickly, but our reputation has been built on the quality of our service, so quality control is something we take very seriously and always have in mind every step of the way. To maintain quality:
- I provide my employees with every possible tool to help them manage their responsibilities.
- I maintain open lines of communication to stay aware of workloads. And when someone is struggling, I work with them to determine if they are actually overloaded or if perhaps they need help managing time and resources better.
- When I deem necessary, and once I’ve assessed that the company volume can support it, I hire additional people to fill positions at various levels of management or support.
Surviving in a struggling economy (is another challenge). I take pride in the fact that I have been able to maintain my workforce with no layoffs, even when the economy has taken a serious dip and other companies were closing their doors. We have done this by adapting – not only our services to our clients, but internally adapting the way we do business. By shifting responsibilities and rallying everyone to pitch in, even if it sometimes means handling tasks that aren’t generally in their job descriptions, we’ve managed to weather leaner times and keep our valued employees on our team.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
We have created processes for the field and the office that specifically focus on efficiency, quality and consistency. We also use technology to improve communication and ensure that everyone involved has the latest information – something that is critical in an industry where changes are frequent and not having the correct information can cause major setbacks to both the budget and the schedule. Our superintendents all have e-mail via BlackBerrys, access to high-tech cameras, and we can send them drawings electronically – which is something that is very cutting edge.
Our in house team uses a specialty software program to manage our existing workload, our pending projects and our projects in closeout, which helps keep our coordinators organized and able to handle all the “balls in the air.”
We communicate with our clients constantly using technology, which helps give them the peace of mind that the projects are going well. Communication is key, and technology is an amazing tool for that process.
How do you make a significant impact on the community and regional economy?
By maintaining a stable workforce, I provide my employees with job security and an excellent benefit package that we continually work to improve. By providing employees with the peace of mind that comes with job security and good benefits, they are more confident about their spending capability and ability to support their local businesses. I also offer them flexibility with their hours so they can implement my “family first” ideal, which furthers their performance and the company’s success.
I also encourage and support charitable work throughout the community by funding causes employees bring to my attention, allowing employees to take time off for charitable causes in order to make a difference. I am a huge believer that giving back is a definitive fueling mechanism for the local economy.
How to reach: Casco Contractors Inc., (949) 679-6880 or www.cascocontractors.net