Ronald L. Stewart had advantages some other senior leaders didn’t have. When he was CEO of five-year-old FS-Elliott Co. LLC, he didn’t have to deal with all of the levels of management and rank that other companies develop as they get older.
Instead, Stewart used a free-flowing organization where ideas were exchanged without hierarchy or positions getting in the way.
“Older companies, they have a lot of older structure and bureaucracy,” says Stewart, who was recently promoted from CEO of FS-Elliott to vice president of Fu Sheng Machinery Division, the parent organization of FS-Elliott. “We try to minimize that. We try to break down the walls and not create silos. When I see departments trying to set up barriers to doing things, I try to break them down. We want to keep a small, loose organization, keep a minimum management staff to cut out the bureaucracy because, as companies grow, they just, by nature, create bureaucracy, levels of management and things in my mind that stop decision-making.”
Because of the more open structure at the company, which manufactures air compressors, Stewart was also able to urge his 200 employees to think outside the box more easily than an older company that is already stuck in its ways.
Such was the case when the company was looking to fill engineer and shop employee positions. The company had no luck with search firms, and advertising in the paper was a waste of time. Through a brainstorming session, the company came up with the idea of putting up a billboard on major thoroughfare.
The billboard was similar to a “wanted” poster, which directed interested candidates to the company’s Web site, where they could apply.
They found quality people to fill the positions and created some buzz about the company, but it also exemplified the type of success you can have with an open-management style. “Companies that get too rigid, that’s where they get in trouble,” he says. “Obviously, as the company gets bigger, you have to have more of that structure in place. But at our size, I think it’s critical to have a very open management.”
Stewart is doing his best to drive that open management style that has so far helped FS-Elliott double its revenue from 2006 to 2007, when Stewart and his team pulled in $107 million.
Here’s how Stewart used that management style to grow FS-Elliott.
Interact with your staff
Analyzing your employees to make sure you understand their needs is an important process for Stewart. He sees the benefits in having annual reviews to keep employees informed on how the company is doing and how each employee is producing, but you have to have continuous discussions with your workers to really get the point across and see their capabilities.
“You have to get down in the trenches sometimes,” he says. “I go out in the shop every day and try to talk to people. Some people, when they get to higher positions, they kind of think they are a little above everybody else, and that starts creating walls.”
Stewart doesn’t get to talk with every employee on a daily basis, but talks to his staff and the staff below his staff every day.
“Obviously, today, with the market conditions the way they are, we talk constantly about our business,” he says. “That’s one of the advantages of having a smaller company, I can be more proactive and deeply involved in the workings of the company.”
While interacting with staff seems as simple as making the time and approaching the employees, you have to create an environment where they feel comfortable speaking with you.
One way Stewart creates that environment is having luncheons in his office with about 10 people.
“We do this once a week, and so in about six months, we get to talk to everybody in the company,” he says. “I found that to be a very effective way to get people to open up. Sometimes, you have to kind of break the ice a bit. Once you get people talking, even the entry-level people in the shop, they’ll start talking about their concerns, about rumors they hear. I found it’s been a very, very effective and inexpensive way to communicate with a company.”
Stewart breaks the ice by talking about the Steelers or the Penguins, the weather, or anything that will get people talking, before getting into the business side of things.
Someone in the management staff also has lunch with the group, and Stewart and the manager take notes about ideas and topics discussed.
“We try to get back to that person and say, ‘Here’s what we’re doing in that particular case,’” he says. “They may have a concern about their computer or about why we did something a certain way. We try to say, ‘Well, here’s how we do it. There is a reason for it.’ Or, ‘Hey, you have a good idea; let’s try it.’”
The input they get at the luncheons also helps to create buy-in for ideas. If someone gives you a good idea, keep the person involved in the process.
“If you come up with an idea, you have to help implement it,” he says. “You can’t just throw out ideas and walk away. Try to set up a team and figure out how to do it. Sometimes the ideas are good; sometimes they’re bad. But we’ll kind of let them run loose on that until they determine themselves if it’s a good idea or not. Then we give them the support to do it if it’s a good idea.”
During discussions with staff, don’t be the one doing all the talking. To be able to really analyze your employees and understand their needs, you need to listen more than speak.
“Listen to people around you, listen to customers, listen to your cohorts, listen to the people that report to you — make sure you get a full understanding of what is going on to get the real message,” he says. “Obviously, you have to be considerate of others and respectful of their opinions. But at the same time, you have to still be a leader and control them. To me, being a good leader is being very open.”
Interacting with employees also gives you a first-rate way to make sure the staff understands the focus of where the company wants to head.
“I get that message out constantly right down to our floor, our manufacturing floor, to make sure everybody understands what our main objectives are,” he says. “Our objectives are to grow our business and obviously make a profit for our shareholder and to have the right image with our customers.”
Staying in touch with all levels of employees is important.
“You have to engage all your employees, right from the person sweeping floors up to my level,” Stewart says. “They are equally as important, and they all have an important job to perform.”
Part of having an open structure is delegating tasks down the line, which can be a challenge for you.
“In our size company, you have to be pretty deeply involved, but you can’t micromanage your staff,” he says. “You have to get them to the point where they make their own decisions. But I have to be involved enough that I feel we are going in the right direction.”
The challenge in delegating can come down to the fact that you might be able to complete a task more efficiently than those below you.
“That’s a dangerous thing to do,”
he says. “You have to keep pushing it down and let them try. They’ll fail sometimes. You have to help them get through it — why they made the bad decision. But delegating is very important. You can’t run a business … and do everything yourself. It’ll kill you, and it doesn’t grow other people in the company either.”
Stewart says he sometimes even falls into that trap when he knows it’s not the best way to lead. With a background in sales, he sometimes starts to think he can do it better than one of his employees, but he has to remember to back off. Stewart learned that lesson from watching previous bosses become involved in negotiations with clients and then end up trapped.
“If you have a negotiation, you don’t want the top person there because you have no place to fall back on,” he says. “If I want to go, I know I can’t. If you do have a problem in negotiations, there’s no place to go.”
When a delegated task doesn’t get completed or is done incorrectly, Stewart deals with the manager because the lower-level employee might be more reticent to talk about a mistake or failed task.
If someone who Stewart works with directly is having problems delivering, he speaks with that person directly. If you’re in this situation, avoid the typical office setting where you are behind your desk and your manager is called in to explain the situation. Stewart finds getting out of the office is a better way to handle a problem with a manager.
“It has to be more personal there,” he says. “We have to keep discussing again what our objectives are so they understand it. It’s again much more personal.
“We go outside for a drink, get outside the building or go out in the evening sometime, and we’re talking business, trying to get to the heart of the problem.”
Getting outside the building can help ease what could be a tense situation, which could lead to a better discussion.
“You get a little more informal, and you get a little more openness in people,” he says “A more formal office environment, people will lock up a bit. It’s a little more difficult.”
At the end of the day, whether you are dealing with a managerial problem or you have to make a decision on a policy, you are the one who will be held accountable. But to create an open structure and stop walls from forming, you have to continually stay in touch with employees and give them responsibilities.
“I try to push down, as much as possible, decision-making where it belongs,” Stewart says. “I don’t want to get involved in a lot of the day-to-day things that lower managers should be able to handle. Some people are reluctant to make decisions so one of our challenges always is to make sure that you understand that and don’t be afraid to make decisions. I don’t have a problem if they make a mistake. I want them to learn from it. I don’t want them to repeat that mistake. Obviously, we’ve all made mistakes here, and we look at them and say, ‘We messed that up.’ Let’s go back and fix it and go on. We don’t want to dwell on it and try to attack people.”
How to reach: FS-Elliott Co. LLC (724) 387-3200 or www.fs-elliott.com