The last full measure Featured

8:00pm EDT April 25, 2008

A lot has changed since Herb Shear began leading GENCOSupply Chain Solutions more than 30 years ago.

For starters, the chairman, president and CEO of the reverselogistics company only had 15 people with him in the beginning.

“So, obviously, your leadership style for managing 15 peopleversus an organization today that has 7,000 people in 100 different locations — it’s significantly different,” he says. “So, Ihad to evolve my leadership style and my leadership thinkingover that 36-year period because if I was doing the same leadership style that I did 36 years ago, the company would probably implode.”

One of the primary ways he’s found to make sure everyone is staying true to the company’s mission is by relying heavily on data.

“You can’t manage a business without good, good data,” Shearsays. “If you continually manage from your gut, eventually you’regoing to have a problem. So, we like to make decisions based onour data. Sometimes, you don’t have all the data, and you have tojust go with your gut. But, we like to get as much data as possibleto make our decisions with.”

The goal at GENCO is to have great customer and employee satisfaction and to be a profitable company — and each one of thoseareas is measured to see just how well the company is doing.

“It’s more than just words to us,” Shear says. “We actually measure our customer satisfaction, our teammate satisfaction and ourprofitability. We only consider ourselves a successful company ifwe are doing well in all three. It’s like a three-legged stool. If one ofthe legs is broken, we need to fix it.”

Monitor progress

Shear makes it clear he wants GENCO to focus on the customer,and he makes sure that is happening through data.

The company surveys at least its top 75 customers once aquarter to find out how well the company is serving them.

GENCO takes the surveys one step further by not relying onsome outside firm to do them but requires every senior manager inthe company to conduct them. The surveys are made up of predetermined questions and are administered by phone by the managers.

“We want every senior manager talking to customers becausesometimes you get so involved in other things you forget you havecustomers,” he says.

“So, every quarter, we survey and database the results, and wemonitor how we are doing with our customers. We’re very proactive. So, if a customer says they have a problem or we aren’t meeting their objectives, we don’t want to call them again next quarterand have them say the same thing again.”

Though Shear says you can be inundated with data, he saysdetermining the information to pull from the surveys is easy. Ifsomething in the surveys tells Shear and his team that a customeris having an issue, they try to fix it immediately.

“You really have to pick what’s significant,” he says. “We’ve created what we called a balanced scorecard (from the surveyresults), which we put out once a month that’s about one page forthe overall company.

“On the balanced scorecard, we’ve identified the items that wethink are significant to the company’s long-term success. And then,it’s like a dashboard. Things are either in red or green. Greenmeans you’re doing fine; red means we’ve got some issues —we’ve got to improve in that area.”

While the scorecard process is always evolving, overall, the company sticks to its mission and values when determining what is significant.

“Every company has to decide that for themselves — what’s really important for my long-term success? What’s the stuff I should becontinually looking at?” he says. “It shouldn’t be more than a page.It should be something you can do on a page or less.”

Shear says a common misconception about customer surveys isthat those surveyed will try to find something wrong even if theyare satisfied with the service.

“When we first started surveying customers, everybody said, ‘Wedon’t want to do that. No news is good news, and if you ask customers if they have a problem, they are going to make up a problem,’” he says. “I think we found by being proactive and surveyingour customers and having senior managers talk to customers thatwe tend to keep our customers longer than our competitors.

“Our longevity with customers is longer because we’re going thatextra mile to create a strong relationship with our customers andcreate customer satisfaction,” he says.

Value your employees

Shear also uses surveys to focus on his employees as much as hiscustomers — and for similar reasons.

“If we aren’t creating a good work environment and we lose ourvalued teammates, long term, we’re not going to be profitable,” hesays.

Part of retaining employees who fit into a positive culture is thetimeliness in which you respond to those issues.

“If we see areas where we don’t have a good work environmentfor our teammates, we don’t say, ‘Well, we’ll deal with it six monthsfrom now,’” he says. “We deal with it now.”

Shear creates an environment where people are motivated byproviding incentives to employees who do well. The surveys ofemployees give Shear and his team an idea of how the majority ofworkers feel about the GENCO culture.

“We’re asking teammates, ‘Are we creating a good work environment — a place you enjoy coming to work?’” he says. “We askquestions: ‘How are your working conditions? Are you happy withyour benefits? Are you happy with your wages? Are you happywith the overall GENCO culture?’”

Shear doesn’t do an annual survey with his employees becausehe wants a continual look at what’s going on with his culture.

“Most companies, when they do employee surveys, they tend to dothem once a year to once every two years, and they take a snapshot,” he says. “We survey 9 percent of our teammates every monthfor 11 months, so every teammate does a survey. But we’re doinga large enough random sample every month that it gives us anopportunity to see if there is change occurring in the work environment. Our goal is to keep improving the work environment sowe get monthly feedback as to how well we’re doing.

“We have it on an individual facility basis so we can see wherethere might be places where we could do better in providing a better work environment and also monitor the places that are doingwell.”

The survey consists of scoring each question between 1 and 6,with Shear looking to achieve about a 4.8 or higher.

“We feel that rating, overall, we are creating a good work environment,” he says. “Now, is everybody happy in that work environment? Probably not. But, are the majority happy in that work environment? Yes.”

Hold people accountable

Listening to and rewarding employees can lead to success, butyou also need an environment where people are held accountable.

If data shows there is a problem, Shear will first sit down with hisleadership team to discuss if they, as leaders, set up roadblocksthat caused the problem. As soon as they remedy where they fellshort or found there weren’t any roadblocks caused by the leadership, the employee who is in charge of the department is shownthe data and is responsible for fixing it.

“The way our structure is, we have about 100 different facilitieslocated throughout the U.S. and Canada,” Shear says. “So, if wehave a problem at a particular facility, there’s a customer servicevice president that is responsible for that facility, and they get allthese metrics. So, it’s really their responsibility to get the issuefixed. So we just monitor it more from a senior level that the issuesare getting fixed.”

Letting employees know where they stand is an important partof creating a culture that wants to grow.

“I once heard a speaker say, and it resonated with me, that people come to work, and they are kind of lethargic at work,” Shearsays. “Then, after work, they go to their bowling league, and theyroll the ball down and they get a strike or something, and you seethem jumping up and down with excitement. He basically said,‘Why don’t a lot of companies get that at work?’ He said the reasonis, ‘Because at work, you tend to put a sheet up over the pins.When you roll the ball down, you hear the pins crack, but younever know how many went down.’ So, we’ve tried to create anenvironment where everybody always knows where they stand allthe time.”

That includes sharing the high-end financials with workers toshow them how the company is doing.

“Especially on the financial side, I think that companies think thatif their employees know that they’re making money, that they’regoing to say, ‘Why can’t I get more?’ I actually find that generally people think the company makes 10 times more than it actually makesif you don’t give them any information and that they actually like tohave something they can judge how well they’re doing. Financialsuccess is certainly one metric of how well a company is doing.”

According to the numbers, GENCO is doing well. The companyhad revenue of $514 million in 2005, $577 million in 2006 and $712million in 2007.

He says, if the company didn’t use data to measure the company’s strengths and weaknesses, then GENCO wouldn’t be as big asit is today.

“I think the company would still be here,” he says. “We wouldn’thave the growth rates that we have, and I think we’d be putting outa lot more fires. So, I think it would be a lot smaller companyalways struggling to put out fires.”

GENCO has been in business for more than 100 years, and Shearwants a culture that will take them to 200 years in business.

“We’re creating an environment for the long term,” he says. “I’veseen all kinds of management styles and all kinds of success withall kinds of management styles, but I think you have to look at thecompanies that stay around for the long term. I think those companies that stay around for the long term have a focus on the company, on their missions and what’s important is the long-term success of the company.”

HOW TO REACH: GENCO Supply Chain Solutions, (800) 677-3110 or www.genco.com