The company quickly outgrew its first office, which was located adjacent to its warehouse, so it moved office operations to a larger site while maintaining its current warehouse. However, the arrangement presented logistical challenges, and it began looking for a new site almost immediately.
PartsSource, a multi-manufacturer alternative parts supplier, found another location. But as it was gearing up for the move, the property purchase fell through in the final stage of the location inspection.
It was running out of office and warehouse space, so management launched a new search. It finally found a new site and succeeded in moving all of its parts and office materials to the new location without disrupting customer service.
However, PartsSource outgrew its new facility within 60 days. After setbacks with zoning approvals, it finally received the go-ahead and will break ground soon on its fourth building project on land adjacent to its current location.
With the setbacks in construction, PartsSource feared its growth would be stifled as the staff it had added would be unable to perform without space. As a solution, it hired outside sales staff to work in its largest markets. Although it was meant as a solution to a temporary problem, the company experienced more growth by using this sales strategy. PartsSource kept these outside sales representatives and created a new internal position to oversee outside employees and sales.
While the company quickly and continuously adapted to its rapid growth, its technology did not. The information technology staff realized it would need a new database to keep up with the increased volume, so it began upgrading and planning a transition. Just two weeks before the company planned to implement the new database and convert its records, the database began experiencing problem, sometimes erasing just recent orders, sometimes erasing an entire day’s worth of orders.
The staff began to do orders manually in order to keep up with the timeliness customers expected, and the company now has manual back-ups for all online functionality.
After persevering through many challenges and successes, PartSource is now more prepared to handle rapid growth and move forward.
How to reach: PartsSource, www.mypartssource.com
At its Reynosa plant, it reduced the set-up time on one press by 75 percent a week, freeing up nearly 500 hours of production capacity a year. The company’s production improvements don’t stop there, though it also installed a plasma welder, which has increased production from 150 pieces per hour to 800 pieces per hour.
Bettcher Amherst also made several changes that are saving it thousands of dollars a year. The company re-engineered its plant layout to improve the flow of material. In doing so, it also eliminated nonvalue-added handling.
In addition, it rearranged its tool room for easier use. So far, the company has experienced about 90 percent of the $40,000 savings it projected by doing this. It also implemented a new parts washer to the plant layout, which has helped move more product in less time and will save an estimated $80,000 a year.
In another money-saving move, the plant developed a more efficient repeatable leak test equipment procedure. Its customers approved it, and the company implemented it to eliminate a bottleneck test station. It anticipates a savings of $40,000 from this program.
While these changes have all saved money, one of the largest money-savers has come from implementing in process quality packs, or IP Packets. The program started for five customers with 300 parts, and the benefits include reduced scrap and reduced nonconformances and corrective actions. It has also improved on-time delivery and reduced overall quality costs.
To implement this segment, the company evaluated the skill sets of all of its employees who were involved in quality assurance and also provided internal and external training about the effective use of measuring instruments. Between the training and the checks, the company should save about $100,000 a year.
How to reach: Bettcher Amherst, www.bettcherllc.com
Art J. Falco and Jerrold F. Wareham worked together to form the Idea Center, which meets the needs of both Playhouse Square Foundation, of which Falco has been president and CEO for 14 years, and WVIZ/PBS and 90.3 ideastream, of which Wareham has been president and CEO for 12 years.
Playhouse Square Foundation is a not-for-profit organization that restored and now operates Playhouse Square Center, the nation’s second-largest performing arts center. The foundation strives to provide high-quality performing arts and entertainment programs and quality educational programs to the Northeast Ohio community.
Falco uses a unique management approach to propel Playhouse Square Center. He hires the best people for each area and allows them to run that area as they see fit in working toward the goals of Playhouse Square. The result is that Playhouse Square Center has become an economic power for the Theater District and downtown Cleveland.
WVIZ/PBS and 90.3 WCPN merged in 2001, forming ideastream, a multimedia public service that aims to provide thought-provoking programs and services to enlighten, inspire, educate and entertain its listeners and viewers. Wareham uses ideastream to connect people who want to learn with those who have knowledge to share.
He also strives for quality, creativity and diversity in the stations’ programming. Ideastream reaches about 2.8 million viewers and listeners through its public radio and television stations.
Falco and Wareham worked together to create the Idea Center to provide additional programming to meet the needs of viewers and listeners for WVIZ/PBS and 90.3. It also meets the needs of Playhouse Square Foundation by providing broadcast capabilities to allow its programming to reach more people.
By working together to form the center under one roof, Falco and Wareham were able to save $7 million and provide a model of how organizations can work together to strengthen the community and themselves.
In 1992, Main Street Gourmet started “Muffins for Mammograms,” a program to raise money to provide mammograms for women unable to afford them. The company hosts the week-long effort every year during October.
It works with Akron General Medical Center to bake, package and distribute muffins, cookies, brownies and breast cancer awareness literature to members of the business community. In recent years, Main Street Gourmet has also worked with Massillon Community Hospital and Lodi Hospital.
The efforts have raised more than $100,000 since the program started, allowing hundreds of women to receive potentially-life saving mammograms.
“Muffins for Mammograms” was nationally recognized in 1994 as a Bronze Award winner by the National Breast Cancer Board, and earlier this year, the Ohio Department of Health selected the program as an Ohio Cancer Control Model Program based on its creativity and impact on cancer detection and prevention.
Since 1995, Main Street Gourmet has supported the Workshop Program at the Weaver School, which works with people who are mentally challenged. Main Street Gourmet employs nine students from the school to perform duties at its corporate and production facilities.
In 1996, the Board of Mental Retardation and Developmental Disabilities recognized the company for its support of people with disabilities. It also received the 2004 Disability Employment Awareness Award from the County of Summit Board of MRDD.
Additionally, Steve Marks, co-founder and co-CEO of Main Street Gourmet, founded the Road Runner Akron Marathon. The annual event promotes health, fitness and community while also benefiting charitable organizations. The event attracts 5,000 participants, 2,500 volunteers and 75,000 spectators.
Main Street Gourmet also donates food to the Akron Canton Food Bank. Co-CEO Harvey Nelson is past president of this organization and serves on its foundation board.
Main Street Gourmet strives to better the community through its philanthropic endeavors and through economic development. It constructed a 60,000-square-foot headquarters and employs more than 100 people, boosting Akron’s economy.
Its combined development and service efforts have won it several awards and gained recognition for the company and for the city of Akron.
HOW TO REACH: Main Street Gourmet, (330) 929-0000, www.mainstreetgourmet.com
If someone told you that you could drop your operating costs by 40 percent, would you listen? If that same person said you could save between $70 and $150 per user per year in energy savings alone if you tried something new, would you try it?
A lot of companies are listening, and those same businesses are trying something new — cloud computing and software as a service (SaaS) — and reaping the many benefits, which start with the aforementioned cost savings.
“It’s about saving money, and there’s a tremendous amount of money to be saved, because if you look at IT budgets, nearly 80 percent of that budget, in many cases, is spent just to keep the lights on, which means the other 20 percent is the only money that’s actually able to be used to implement new technologies into the model,” says Jeff McNaught, chief marketing officer at Wyse Technology Inc.
McNaught’s company builds a device that replaces the PC, uses one-tenth the energy of a PC and connects you to the cloud. The device doesn’t make a lot of noise, but more important, it doesn’t cost a lot of money.
“When you look at cloud computing, operating expenses can drop by about 40 percent a year, and that’s real money,” he says. “These devices use one-tenth of the energy of the PCs. Now you’re really talking about saving real money.”
How cloud works
So the idea of saving that much money has caught your attention, and now you may be asking, “What exactly is this whole cloud computing thing anyway?”
Dave Hitz is the co-founder and executive vice president of NetApp, a company that sells enormous amounts of storage to people who need it. For example, Yahoo stores all of its e-mail accounts on his equipment, and the special effects for “Avatar” were stored on his equipment, as well.
“If you look at storage systems, they’re a lot like toilets — for two reasons,” he says. “No. 1, it’s where you put your shit. But No. 2, as long as they’re working, nobody cares. But when they stop working, they become the most important piece of equipment in the house or the data center. We don’t offer cloud services — we’re not a cloud service provider company, but if you look at the equipment that we sell, many cloud infrastructure environments are built on top of our storage as a foundation.”
From his perspective, Hitz sees two different definitions of cloud computing.
“Definition No. 1 of cloud computing is you no longer buy a computer,” Hitz says. “You access computing service over the Internet to somebody else’s data centers, and they spend the capital and they hire the people to build them and they do everything, and all you do is pay a monthly bill and access the service over the Internet. Style No. 2 of cloud computing is a completely technical definition, which has to do with if you’re going to build a data center, what does the architecture look like? And if the architecture has a lot of shared infrastructure, then people tend to call that kind of environment a cloud-computing environment.”
Using his first definition, cloud eliminates many IT headaches because how often do you have an overly positive IT experience?
“I imagine people would say their experience with IT has been less than optimum,” says John Dillon, CEO of Engine Yard Inc., a company that delivers an environment for software developers to write programs that run inside the cloud. “The reason is you spend so much money building all this infrastructure, that going the last mile, which is where you write the application that interfaces with the human, the user, doesn’t get the attention, doesn’t get the money and doesn’t get the investment.”
The idea of the cloud is essentially that you plug into the wall, and you get a whole data center.
“It’s IT as a service, just as you get electricity or water,” Dillon says. “In business, you, in most cases, don’t have your own power plant, you didn’t dig your own well, you didn’t build your own building, you don’t have your own fire department or police department. So why on Earth do we basically give power to a group to build something that has been built before in-house, and then hope it works?”
Dillon also points out that in the United States, capital expenditures are a huge expense. In fact, about 50 percent of capital expenditures in America are information technology.
“Unbelievable,” Dillon says. “How many people are getting the ROI on this? What’s happening with the cloud is some big companies are saying, ‘Look, I’ll build the data center.’ It’s changing who buys, why it’s bought, and it changes the capacity and the economic decision-making process around IT.”
When you look at how much money most organizations spend on their IT systems, these cost savings are a big driver and will, ultimately, be a game changer for business.
“Amazon, who is a leader in cloud technology, told me that they think it’s a $1 trillion a year potential business,” Dillon says. “So if there’s a trillion dollars at stake, that means every company within 50 miles of here is going to make a really big bet, and it’s so disruptive, because the buyers are going to change, and the sellers are going to change.”
The other benefit, aside from cost, is that you now have everything that is on your PC in one location that can be accessed from anywhere — not just from the PC itself.
“When you take your software and your applications and your data and you move it to the cloud, something’s happened,” McNaught says. “First off, the cloud is the data center of your company and you can always get to it. You’re connected to the Internet, so you can get there from home, from the conference center, from the airport. And guess what? Because it’s not on a PC with a hard drive failing and memory getting filled up, it’s protected. It’s backed up. It’s secure. So the cloud provides this real opportunity to take the things that make up our work life and, within five years, our home life as well, and move them to this one place where we can always find our stuff.”
The evolution of cloud
Dillon is amazed by cloud computing, and if you look at how it’s evolved and how it’s changing business, it’s hard to disagree with him.
“This cloud thing is the biggest thing that’s happened in technology since the IBM computer, and that’s pretty big, and at least as big as the Internet in terms of economic disruption, because it changes how and where we do our computing,” Dillon says.
He says to go back a few years and remember how every small and midsized business had a room with computers in it and maybe a server or two.
“As businesspeople, you probably didn’t understand what they were for, but you knew they were important and you wrote checks,” he says. “It was hard to be good at that, because you had a business to run, and presumably you were an expert at that business, and you used technology to be good at that business or best at that business, so it was a necessary evil.”
Over the last 10 to 15 years, a variety of things happened that became game changers. First, we got the Internet.
“Everybody is connected — not just a few people are connected — and we’re connected not just inside our companies but outside our companies,” Dillon says.
Second, access became ubiquitous with the advent of cell phones, BlackBerrys, iPhones and laptops.
Then access got cheap — almost free. It doesn’t cost you anything to go to Google and look up any information that you want.
“You think about that perfect storm that happened — we’re having an explosion,” Dillon says. “The applications that are being built today are no longer these little things you do inside the building. You don’t write a general ledger for 12 people — you’re doing something that interacts with employees, vendors, suppliers, and what you’re trying to do is provide those people with a wonderful experience.”
McNaught would add another element to that perfect storm — the PC itself. He asks if you really love your PC.
“I don’t mean what you do on your PC, but how many of you love the physical hardware incarnation?” he says. “The keys, the noise, the weight, the dragging it around, and, oh, by the way, if you drop it, it’s probably not useful the next day. It’s part of the business — people don’t want to buy these anymore. The cloud is really the place where you take the things that were on the PC, and you go put it there.”
McNaught says the data indicates that PC market share, which is about 94 percent now, will drop over the next decade to about 10 percent.
“It’s not because less PCs will be sold — maybe a few less, but it will lose its role as the core device we use to access our stuff,” he says. “You’ll see this huge proliferation has already started with tablets and mobile devices and mobile phones and the mobile Internet exploding now. The question becomes, how do I access my stuff? How do I access it securely? And how do I access it at the lowest cost?”
These are questions that most people would agree are incredibly important. In fact, these questions are reasons why cloud hasn’t been successful in the past.
“This had been tried before and it’s failed, because there were two things we couldn’t get right as an industry,” McNaught says. “Early on, we couldn’t make all the software that was important to your business work reliably. We walked into the hospital and the hospital says, ‘We have 400 applications, we can only make 350 work on the cloud. Where are the other 50 we need to execute?’”
The other factor was user experience.
“If you get, from the cloud, an experience that is the slightest bit less robust than the experience you get at home or the office today, what are you going to do?” McNaught says. “You’re going to go beat the living daylights out of the IT guy who suggested the cloud.”
But now, the technologies have changed, and these two pieces have largely been addressed. On top of that, security is stronger than with a PC, and that’s why companies large and small are now using the cloud.
“There’s an adage in the IT industry that when you introduce a technology that reduces costs, you’re giving up benefits, and if you introduce a technology that gives you big benefits, it costs you a fortune,” McNaught says. “The thing about cloud computing is that it fires on both cylinders — it reduces costs dramatically and delivers incremental benefits that you don’t get with the current model.”
With kinks being worked out to create a compelling and viable technology option, how companies do IT is starting to change.
“One of the big drivers of why this is happening and why all these benefits occur is because cloud computing is a lower-cost architecture,” says Brian Jacobs, founder and general partner of Emergence Capital Partners. “You can deliver more computing power to more users for less cost, and that is a compelling driver.”
How cloud can affect you
You may think this sounds great and believe that cloud computing is important to the future of business, but if you are skeptical, Hitz has a warning.
“I’ve had the opportunity to ask a lot of CIOs, ‘How is cloud computing affecting your business? How much cloud computing are you using?’” he says. “The most common answer I get is, ‘It doesn’t affect our business at all yet, and we’re not using it at all yet.’ I will tell you that almost all those CIOs are wrong. They’re already using it but not thinking right.”
He say that CIOs need to think differently and compares it to the early days of the transition from the mainframe to the PC. In those days, if you asked CIOs if they had a PC strategy, many said, “Oh no, that’s not part of what we’re doing,” but half the employees had PCs.
“When data started leaking out the door because somebody lost their PC, who do you think the CEO went to beat up?” Hitz says. “The CIO, and the CIO said, ‘Well, PCs aren’t really IT.’ Those are the CIOs that are gone. I predict the exact same thing is going to happen to the CIOs who think that cloud computing isn’t happening in their business. … There’s an enormous amount of work that CIOs need to start thinking about — how do I get my arms around all the cloud contracts that are being found in little places scattered around?
“It’s affecting a lot more than people are realizing, because they’re not defining it broadly enough. If they look at that broader definition, the stuff they’re already sort of doing or in denial about, that stuff is a pretty good road map to where the future is headed, just more.”
Not only is it affecting how your business will run, but it’s also going to change how new companies enter the market, meaning fewer barriers to entry for future competitors.
“Silicon Valley is very much a startup culture — there’s always something starting up here, and it’s important to note that cloud computing also changes the economics of a startup,” Jacobs says. “A startup today doesn’t need as much capital to get going because of cloud computing. A developer, who could be an independent contractor, an engineer who’s working at a day job and at night has a new product he wants to develop — he can log in to a platform as a service like Engine Yard, and they can start developing their product without a single dollar of investment. They can work for free developing the product until they’re at the point they can introduce it to the market.”
As a result, the venture capital industry is much different than it was 20 years ago. In fact, Jacobs’ company started in 2003 with the idea that more and more technology would be delivered as a service as opposed to being built by companies.
“Cloud computing and software service has really hit technology like a giant wave, and all of these business models are service providers — companies that are building technologies and not selling to their customers but operating it on behalf of their customers and charging their customers a monthly fee in exchange for that service,” he says. “That’s a different kind of venture capital and that’s the focus of Emergence Capital.”
Aside from all the ways that cloud computing will change business, it’s also changing how employees approach their jobs. While people can work from home in their pajamas, it’s often difficult, and in many cases, employees don’t have access to everything that they could if they were on their PC in the office.
“Cloud computing lets you access your work environment, and you’re on your couch — maybe in your pajamas — and you’re doing real e-mail and doing real work, and yeah, maybe your boss is getting a little more work out of you, but you’re doing it, quite honestly, voluntarily because you get to work in your environment, you’re not in the office, you’re not sitting in front of the computer in the office and you probably have better TV shows on,” McNaught says. “The technology that cloud computing provides is about saving cost and delivering additional benefits.”
To give you a real example, Hilton Hotels decided to close its physical reservation centers and send all of its reservationists home with devices that connected them securely to the Hilton system.
“What Hilton found was they could close all those buildings and save those costs of real estate, and they saved all the energy costs of running the PCs in the buildings, and they found the employees were happier, because they were working from home — maybe in their pajamas, but nobody could tell. They were working over secure devices, so Hilton didn’t lose any data, and they were working over a device that didn’t have the complexity of the PC, so they weren’t calling the IT staff out to their homes to fix this,” McNaught says. “Cloud computing allowed Hilton to save money in so many ways that satisfaction increased, and they found that people working at home would take a lower pay. They saved on all sorts of fronts. Cloud computing has a transformative effect on all kinds of business.”
Cloud computing is changing the way businesses start and operate, and if you recognize and embrace that, it can make all the difference in how successful your organization can be.
“The reality is, as companies try to find ways to grow and compete in an ever more challenging economy, you have to do something different to be different than your competitor,” McNaught says. “If everyone is using the same old client server architecture — the PC connecting to the server — you really don’t have many opportunities to compete.” <<
“In the beginning, you may overshoot and you may undershoot, but the more time and focus you can spend on it, you can then help drive the plan,” he says.
Despite his best predictions, Krubert reached a point where he was underpredicting, and in that six-month to a year time period, his job simply wasn’t fun like it had been.
“I was personally pulled too far,” he says. “Luckily, I go back to my training as an ER doctor, and many times in the ER, you’re pushed to the edge, and you can’t quit because someone will die or not die. That helped me in saying, ‘OK, focus on what you need to do here. Let’s simplify what’s going on and let’s have a plan,’ and then there was a light at the end of the tunnel.”
He became quite disciplined in his daily approach to the job — coming in each day, first making sure that clients were tended to, then ensuring his team was taken care of, and then spending the rest of his time doing the work that would help him out in a year.
“A lot of times managers will focus on what I have to get done today, and they don’t give themselves the two or three hours a day to spend on, ‘What am I going to do a year from now?’” he says. “It catches up if you don’t do it, and that’s where the discipline and proactive planning comes into place.”
This approach helped him stay ahead of the company’s revenue growth — which went from $90.2 million in 2006 to $261.6 million in 2009. After that kind of growth, the company is now able to better predict future growth.
“Now, luckily, we have four or five years of growth, and we know that if we’re calling X amount of clients, here’s usually what our close rate is, so we can get better at predicting,” he says.
Some of the keys that have helped Krubert successfully grow ApolloMD without falling on his face have been to promote the right people, build rapport with his clients and to put processes in place to ensure the organization’s service didn’t lag.
“If you don’t continue to service, the growth will stop,” he says. “It’s trying to keep the growth engine in line with the operational support, and that’s taken a lot of interviewing and meeting good people and hiring the right people and training them up and putting in processes and using IT support to support the growth that we’ve had.”
Promote the right people
It’s such a critical mistake, and Krubert admits he’s done it himself — hiring or promoting someone whom you really like but doesn’t have the skills to do the job.
“I’ve done it, and often, you’re very disappointed and so is the person that’s doing the job, and sometimes the likability goes away,” he says. “It’s less about who we like and more about who can do it.”
But you have to really know what you’re looking for in a position.
“It’s a disciplined approach to define the key characteristics of what you need in a person to do that specific job and completely severing the, ‘I like, I don’t like,’ and then tapping into other people’s sort of ratings on the same scale,” he says. “It’s pretty clear, hard work or not hard work. That’s almost a quantifiable type. There are ways you can define that and then ask other people who are in a similar role.”
Krubert uses a few key characteristics in determining if someone is suited for a position, and that includes the person’s work ethic, how he or she handles stress, his or her ability to provide good service and the ability to create relationships. To evaluate these characteristics, it’s not just a couple of interviews. Instead, new employees go through a two-year leadership academy in which they’re exposed to some of the best hospitals that ApolloMD operates, mentoring and apprenticeship programs, the Apollo way of doing things, and formal educational materials.
“In the end, those people have been exposed to almost all the problems,” he says. … “They’ve lived the experiences without having to worry about the mistakes.”
At the end of that training, when a new opportunity arises, Krubert is able to look at his top candidates based on the characteristics that he’s seen in their training to decide who gets a shot at running the show when the company signs on a new place.
“You get the good exposure,” he says. “You see them in multiple venues. You see them in a professional setting, and you see them in the clinical setting. One thing about working in the ER, you see them at their worst and best.”
He’s able to see employees when they’re tired, stressed and facing technical challenges. He also gets to see their personal side and how they work with patients and how they treat them and how responsive they are.
“It’s almost a little microcosm of a platform to say there’s a lot of transferable characteristics that would apply from working in an ER or a clinical setting that we could then say, ‘This person could probably apply those same skills to the management side,’” Krubert says.
Build client relationships
One of the biggest keys to ApolloMD’s growth is excellent service, and that relies on building relationships with clients.
“That doesn’t mean wasting their time with lunches every month,” Krubert says. “It might just mean when you’re there, using the valuable time to ask the right questions. Don’t spend all your time selling, because most of the time, they have you there because they already bought you.”
He says you should strive to understand their organization and help them to see how you’re able to bring value to them.
“First, what’s their vision for either their company or service line?” he says. “How will what we do specifically apply to that?”
For example, if the client’s goal is to grow its revenue base by 20 percent, how does the ER fit into those plans? What are the exact expectations that the client is building into its budget?
“You can’t ask those questions unless you have a personal relationship and there’s trust and credibility,” he says. “You have to know their language. … Then it’s understanding, ‘OK, ER, you budgeted in 20 percent growth in the ER. Here’s our plan to get you there, and does that seem in line with what they’re specifically trying to do?”
The key is to make sure you’re asking good questions so you can have the most and best knowledge.
“Ask probing, delicate questions to make sure that their vision is consistent with what our plan is and then update it periodically,” Krubert says.
It’s also important to make sure you understand the individual you’re talking to and get to know them as a person as well.
“There’s many times they may have their own personal challenges,” he says. “Their job may be on the line if they don’t hit certain metrics. If you can understand what their personal goals are, whether it’s job preservation or maybe specifically growing it so they can get their bonus.”
Krubert takes it a step further and aligns his people’s goals with those of his clients so that everyone has the exact same metrics.
“Now, when they all win, they’re all happy, and if they don’t win, they’re all going to cry together,” he says.
It eliminates politics or hidden agendas from one party or the other when everyone is striving for the same thing, and they’ve seen a true performance bump by taking this route.
Then the last element of building strong client relationships has been to be open and honest about expectations.
“It’s very easy to sell one thing and not deliver,” Krubert says. “Reputation is what drives us and growth, so make sure what you sell and what you promise can be done. Before you promise something, you may want to do your research if it’s a technical or very specific number. It’s important to ensure what you promise you can actually deliver on.”
It’s important to also discuss the risks with your clients so they’re clear about not only what could go well but also the chances that something could not happen as planned.
“Giving them specific data and having them trust that you say you’re going to do it, you deliver, that builds trust because the next time you come in and ask for it or they ask for something, there’s that trust element,” he says. “In our business, personal relationships are huge and your reputation is important.”
Put processes in place
When you’re seeing 2.5 million patients a year like ApolloMD’s staff does, 2 to 5 percent inefficiency can create a lot of problems, so Krubert has had to put processes in place to keep up with the growth and eliminate inefficiencies that could affect their service.
One of the biggest processes he’s implemented is with the physician credentialing procedure. When a physician works at a hospital, he or she has to go through the appropriate paperwork to get an ID number from Medicare in order to get paid for the work. If that doctor works at multiple hospitals, he or she has to have a number for each location. If the company picks up a new hospital, it then has to credential all of those physicians. The paperwork is long, tedious, has a lot of room for error, and once submitted, it could take months to get the approval. There are a lot of moving parts with it, and many companies have gone under because of not keeping up with it and being able to collect the money that’s owed them.
At one point, only 80 percent of ApolloMD’s credentialing was up to date, so 20 percent of the time, it was lagging, which had a huge financial impact. Krubert identified this one process as the most critical to the company’s overall success.
“Invest in data and metrics, not just metrics that your clients use but metrics internally, trying to make them simple but sort of poignant,” he says. “You have got to understand what is the key component that determines success.”
He says that this should be something that you measure or have a way to measure.
“You have to come up with ways to measure it, whether it’s technology or simplifying your process, but then monitoring it and benchmarking it and having historical data, so you can do a trend analysis and, when you’re pointing toward the worst direction, you can act,” he says.
“What I’ve seen is that companies, as they get bigger, it gets so complicated you don’t even know where to start in the day, so if you can simplify your business with a handful of measurable metrics, and then, more importantly, communicate that to your team and then align the incentives of your team with those metrics, those are the key elements that define success in whatever department.”
Krubert spent a lot of time studying lean and Six Sigma methodologies to implement processes to speed up this procedure.
“It takes senior management to really understand and know your business, to know all key elements of the processes that go in,” Krubert says. “If you don’t know it, either learn it or tap in to the expert person in your department and have them work closely with making it. Oftentimes, people who aren’t experts at all will come up with way too many things to measure in terms of key success or make it way too complicated rather than this is the one sort of statistically objective measure that will be directly aligned with the overall success of the organization. … It all has to be connected to the goal of the company.”
After putting processes in place to improve this one procedure, the company is up to between 98 and 99 percent successful credentialing, which means when a doctor sees a patient, the bill goes out that day instead of in three or six months.
“When we’re efficient and we’re low-cost internally, our administrative overhead expense is low, and we can pass that through to our client, which is a big deal in health care today,” Krubert says. “You can’t just be good and nice; you have to be low cost.”
How to reach: ApolloMD, (770) 874-5400 or www.apollomd.com
When Dr. Jeffrey Canose moved up into his role as president at Texas Health Presbyterian Hospital Plano, he didn’t have to worry about healing any major ailments in the organization. He didn’t need to lead a major turnaround. And he wasn’t dealing with disgruntled employees causing problems.
Instead, his 1,600-person hospital was at the top of its game and had been recognized for such, and the culture was one of high-performance.
“Probably the single biggest challenge was coming into an organization that already had a great culture and already had a track record of many notable accomplishments and creating a burning platform for change and transformation in that kind of [environment],” Canose says. “People are already very high-performing, already have garnered a lot of regional and national recognition, but have to get prepared for a multitude of challenges that face all of us in health care, even in places that otherwise have a stellar track record for clinical excellence and customer service.”
So despite having a great organization already intact, he wanted to take it to the next level by increasing efficiency, and he did that by promoting communication, getting feedback and fostering a culture of collaboration.Communicate effectively
Two jobs prior to his current one, Canose was in his first full-time hospital administration position in North Carolina and had come from the North. A patient had died unexpectedly on the operating table, and he was asked to explain to the board why the patient had died.
“The chairman of the board was this little raisin of a man who had been out in the sun way too long, and he was a retired ATF agent, who I later learned had proudly drawn his gun and used it on numerous occasions when he was chasing down moonshiners in the mountains of western North Carolina and eastern Tennessee,” Canose says.
As he explained to the board, he reached the point in the story where it was clear that the patient wasn’t going to live, and out of his mouth came the phrase, “And the patient started going south.”
“The entire boardroom got deadly quiet, and everybody just sort of looked at me, and it was like the cartoon where you have that little word bubble you wish you could reach out and grab and stick back in your mouth,” he says.
The chairman then broke the silence by asking, “Son, what do you mean by that phrase, ‘going south?’” Canose was quick on his feet with an explanation so he wouldn’t have to find a new job so quickly.
“I replied, ‘Closer to heaven,’” he says with a laugh. “That’s called when you’re in the South, get rid of your Yankee vocabulary.”
While it’s a funny story, it’s also an important lesson that he learned in communication during his career: You have to be careful in the words you use to communicate your message and how your audience will interpret them.
Another lesson Canose learned in communication came when he worked in Pittsburgh when he was still a practicing anesthesiologist but was also charged with running the operating room. It was a challenge because he was learning insight into the administration side while also still practicing, and it was during this time that he realized a problem in his communication.
“I spoke in tongues,” he says. “I had this whole new vocabulary that administrators used. When you go out and you sit in a room with bedside nurses or the guys that keep the boilers and the air conditioning working, they don’t speak that language, and it doesn’t connect with them, so knowing who your audience is and figuring out how to connect with them, how to be able to present the information in their context and help them connect the dots, I think that’s an acquired skill.”
By learning to eliminate administration jargon from his vocabulary, he was able to more effectively communicate with employees.
In addition to learning how to communicate his message in ways that his audience understands, he’s also learned that consistency is key.
“Like any communications theory, No. 1, the message has to be consistent,” Canose says. “You’ll hear me say that over and over and over again, but at the same time, you have to deliver it so many different ways to reach people who have different learning styles and who assimilate information in different ways.”
He does this both in written form via the company newsletter and verbally via town-hall forums, and he’s mindful to make sure that his message is the same in both venues.
“There’s no difference whatsoever,” he says. “That’s where I’m always very focused on making sure it’s the same message just delivered a different way. We really do want to make sure that the key messages are always clear, that the content is consistent, that we’re maintaining a focus on our priority goals and objectives.”Get feedback
The cheerleader pranced around the hallways of Texas Health Plano in her short skirt and white ribbons in her hair, but if you look a little closer, you’ll quickly realize that the cheerleader is actually Canose. He promised employees that if he got a high response rate on the employee satisfaction survey, he would put on the cheerleading gear, and when he got an astounding 87 percent response rate, he made good on his promise to dress like a cheerleader for both the day- and night-shift employees.
“I can tell you that that did more for employee morale this summer, just the willingness to dress up in that kind of outfit,” he says. “Now the most frequent comment I got was that I have great legs, which my wife has known for 37 years, but it was the first time the employees found out.”
Feedback is critical to successfully leading, so he knew he had to do something good to get what he was looking for. Clearly it worked. Employees were amused for the day, and he got answers to critical questions 65 of them in total that ask whether or not employees think their leaders communicate the most important information, that leaders listen to them and that leaders identify the things they need the employees to work on.
The results the last time around indicated that the hospital was between the 78th and 87th percentile on the majority of categories compared to the national average.
In addition to getting feedback for the annual employee survey, he also says it’s important to gather feedback in the moment. For example, after a town-hall meeting, instead of sending out an electronic survey, he asks those who attend to fill out a survey before they leave.
“If you get them done right there in the moment, you have the best chance of getting a good response,” he says.
While it’s not mandatory, he usually gets a 95 percent completion rate by doing it this way. Doing this allows him to see if employees actually understand what he says.
“We ask them whether they are experiencing a consistency in those messages and whether we are making it relevant to their daily work and do they feel like they’re getting the information they need in order to understand the strategic context for the very meaningful work that they do,” Canose says.Foster collaboration
When Canose gets up in the morning, there’s very little he can control for the day.
“I’m the first to confess that there’s not much that I control around this hospital,” he says. “I control how I act. I control how I react, and I control what clothes I wear when I come in in the morning, but aside from those things, there’s not a lot we can control.”
Because of this, instead of trying to control everything himself, he works to promote collaboration within the organization by knowing the right questions to ask and the right people to bring in to help solve a problem and achieve the hospital’s goals.
“It’s not a whole lot unlike when you’re practicing medicine and you recognize that there are people with specialty expertise who you need to consult to come in and help with the care of your patient, especially when they have a lot of complex co-existing medical conditions going on at the same time,” he says. “That’s my mental schema for how you identify what’s going on. You make an initial diagnosis. You figure out what kind of problem are we trying to solve. Then you decide who you need to bring in to that conversation in order to be able to solve the problem and create a sustainable solution and then move on.”
This is the approach he took when he realized that, at one point, the hospital had more than 90 committees. He knew he had to get that down to between 30 and 40, because far too much of his people’s time was being spent in meetings, so he brought in all of the involved parties and started a dialogue, asking what committees will help them achieve their priority goals and objectives and move the strategic plan forward. There are also others that are required by law. If a committee didn’t fall into either of those two buckets, it was gone.
In addition to having a team approach to reducing committees, he also took a team approach to changing the patient experience in the emergency room by creating three teams of front-line employees to redesign the whole experience. He started by bringing the right people together for those teams.
“We were looking at getting people involved who were sort of the doubting Thomases,” he says. “We wanted a number of them to participate directly in the process, because we wanted them to own it, and we wanted them to feel empowered to change it. We needed to know what their doubts were as we were going through this redesign project.”
He says to also look for your top talent, as well, so he found the high-performers across multiple disciplines but left management out. These people worked as a team to look at all of the processes and make recommendations to the management about how to improve. The implementation process took about 12 to 15 months to complete, and the result speaks for itself: The national average time from when you walk into an emergency room door to when you walk back out is four hours and nine minutes. At Texas Health Plano, it’s two hours and 30 minutes. At most hospitals, it takes hours of sitting in the waiting room until you’re assigned a room and seen by a doctor, and again, Canose can brag that his team does it in 18 to 20 minutes. Lastly, the average time it takes once you’ve been seen to get your discharge instructions and prescriptions is 67 minutes, but Canose’s team does it in 10 minutes.
“We didn’t try to make little incremental process improvements and see if we could make things 5 or 10 percent better. We made sure that we knocked Humpty off the wall, smashed him into 1,000 pieces and then put together three teams of front-line employees to put Humpty back together again and do it in a way that was focused on the patient’s experience and how we could help patients get in and out of the emergency room or get admitted up to the hospital as quickly as possible,” he says.
Canose has also seen other improvements that show he’s on the right track to raising the level of excellence. For more than a year, patient satisfaction scores in the emergency room have been consistently running in the top 5 to 10 percent in the country. Physician satisfaction scores are between the 82nd and 97th percentile, making the hospital in the top 20 percent in all categories and the top 10 percent in the country in things like the quality of care provided.
“That combination of patient, physician and employee engagement doesn’t happen by accident,” Canose says. “That means we spend a lot of time focusing on the kind of culture we have here in the organization, and I think it says that we’ve created an incredible environment for our professional staff to be engaged and empowered and energized to go do their professional best every day at the bedside, and it shows by the kinds of outcomes we’re seeing.”
But it’s not just the numbers that tell him he’s on the right track. He receives letters all the time, and the most meaningful one was from a Navy SEAL who Canose says was the size of an offensive lineman and as rough and tough as they come. He wrote a beautiful letter thanking Canose and his staff for the way they seamlessly worked together and didn’t panic and kept him calm when his wife had complications during the birth of their child. Both his wife and child were fine, but he was amazed at how the staff handled the one-chance-to-get-it-right situation.
“This can never be a command-and-control environment the success of patient care depends on collaboration and recognizing interdependency,” he says. “Some people would just come out and say that health care is a team sport, then my role as the head coach on the sidelines is once again to make sure everybody’s prepared when we go onto the field and to make sure that we’re communicating very clearly with each other and that everybody knows everything that they need to know and that they get that consistently, and we create that environment where they can do their professional best.”
How to reach: Texas Health Presbyterian Hospital Plano, (972) 981-8000 or www.texashealth.org
Imagine if you had more than doubled your company’s revenue and employee count over the last five years. Imagine if you had increased your customer base by 80 percent and increased your annual profitability by 800 percent in that same period. And if you’re a public company, imagine if your stock had appreciated 300 percent, as well.
These numbers are Sohaib Abbasi’s reality.
When he took over Informatica Corp. (NASDAQ: INFA) as chairman and CEO in July 2004, the data integration company was on its way to finishing the year with $219.7 million in total revenue and a net loss of $104.4 million.
“At the time, Informatica was pursuing two distinctly different market options data warehousing and, the second one, analytic applications and business intelligence,” Abbasi says.
Abbasi had plenty of experience growing an organization, as he had previously worked at Oracle for 20 years, which he joined when it was a 30-person startup and where he was instrumental in growing the business from $4 million to more than $9 billion in annual revenue.
Using his previous experience, Abbasi created a clear vision for Informatica, and from there, he created a focused growth strategy that has resulted in revenue growth and profitability. Employee count increased from 800 in 2004 to more than 2,000 today.
All of this during a period when most businesses have struggled to stay above water and laid off employees. Here are the keys to how Abbasi did it.Have a vision
Before you can grow your company, you have to first know what your company is trying to ultimately do.
“The first step that we took was to refocus the company with a very clear mission to establish Informatica as the dominant leader in data integration,” Abbasi says.
Based on his experience at Oracle, he knew you have to be a leader to succeed.
“[You have to be] focused on a single category where you are the leader; you are in a strong position to redefine that market,” he says.
Look at what your company does best.
“It starts by asking what is core to the company and what is beyond the core,” he says.
He applied that filter to every strategy the company was doing and considering.
Based on his previous experience, he saw that Oracle had been a leader in the early stage market for databases and, as a result of that, had enjoyed healthy growth. As it tried to expand beyond that, Oracle learned the complexities of going into other market categories.
“Applying that lesson meant that if Informatica refocused on its core market, it would be productive to focus on how we could expand the core market, so our decision was to refocus on the core market and try to challenge ourselves on how do we grow that market,” Abbasi says. “Specifically what we asked was, ‘In what ways are customers gaining value from Informatica, and how can we deliver more value?’”
By looking at research, he saw that Informatica’s technology was traditionally used to aggregate data from a variety of databases to get better information and analyze trends.
“It turns out that our customers need to integrate data for operational purposes, as well, and by moving beyond analytical warehousing to operational data integration, we were able to expand our market fivefold,” he says. “ … By refocusing on our core market, we were able to take advantage of our pioneering leadership, and we’ve been able to redefine Informatica’s market every year.”Create a growth strategy
Once you know what you’re trying to achieve, then you can move forward.
“The second step that we took was to develop a focused growth strategy,” Abbasi says.
The strategy was a three-prong approach: The first part was to expand Informatica across all major geographic regions, the second was to grow beyond the data-warehousing market, and the third element was to advance the company’s technology leadership.
“The first element of a growth strategy needs to be around customers,” he says. “What is your growth strategy in terms of attracting and acquiring more customers? Are you focused on particular geographic regions or specific verticals?”
For example, he saw that Informatica’s customer base outside of North America accounted for only 30 percent of revenue it was too dependent on North America. He compared his revenue mix to that of more mature companies and realized that he could grow the revenue much faster outside of the continent, so he worked to try to gain more customers in those places. As a result, in the second quarter of this year, the company was now up to 36 percent of revenue coming from outside North America.
“The second element of any growth strategy is, ‘What value do you deliver to your existing customers and how will you expand that to deliver more value and more business purposes for your customers?’” he says.
At the time, just 20 percent of his customers used the company for more than data warehousing. By focusing on ways to expand this area as part of the growth strategy, today more than 50 percent of Informatica’s customers do so.
“The third element of a growth strategy is, ‘What are the technologies and services and how broad based of a product offering will you deliver?’” he says.
Informatica started by focusing on one product offering, but by expanding the core to embrace other technologies, it now has eight.
He says, “If you are executing well, your core will continue to grow.”
Abbasi also advises that you be prepared to modify your growth strategy.
“It’s essential to not only have a road map but to continually update the road map based on your progress and the changing IT landscape,” he says.
That’s been especially true during the downturn, so as part of the annual planning process, Abbasi and his team look at the technology industry as a whole on top of the data integration market so they can adjust the strategy if need be.
“At times, the operational discipline needs to be adapted to the changing macroeconomic environment,” he says. “We went through some unprecedented times of uncertainty as part of the great recession, and in our experience, if you go through those times of uncertainty, it is critically important to, very closely, monitor the changing circumstances and adapt the processes accordingly. In other words, the operational discipline needs to adapt, and in some cases, you need to change the planning horizon accordingly.”Be disciplined
Once you have a strategy in place, then you have to set up the organization to stay focused on it and fully understand it.
“With that focused growth strategy, we aligned the organization around those three growth strategy elements by coming up with corporate objectives and by coming up with metrics that we could measure how well we were doing against that,” Abbasi says.
One key was making sure employees knew what the company was trying to do.
“Have a framework where everyone understands what are the key corporate metrics and how does everyone’s contribution influence that,” he says.
He has defined several corporate objectives such as financial, market, technology, customer services, employee satisfaction, etc. that make up the mission and strategy, and he communicates those to employees. Every quarter in an all-hands meeting, he provides metrics to show employees how the company is meeting those objectives.
“Lay out a very clear vision and make sure that everyone understands what that vision is and make sure you actually take the time to verify that,” he says.
Abbasi verifies by surveying employees to make sure that they understand what’s happening. Ninety-four percent of employees responded and said they believed in the company’s vision and mission.
“You have to get that kind of awareness for what the vision is and a belief in that mission,” he says.
But you can’t just tell them what’s going on.
“The second [objective] is to articulate a very focused growth strategy and to make sure that the corporate objectives are stated in a way that not only do people understand what the focused growth strategy is, but they understand what their role is and how to contribute to that,” he says.
For example, customer service is one objective, and the goal is to rank No. 1 in customer loyalty. They measure this both for their customers and their competitors.
“It’s important to rely on an objective party, and it is equally important to benchmark against others,” he says.
So if that’s the objective, each department also has its own objective that contributes toward that. Customer support strives to make sure it lives up to the standards that customers have for it in terms of responsiveness. Product development will work to make sure that every product it puts out is the highest quality it can be so customers are satisfied. The sales team will work to build strong relationships with customers to make sure they understand what they’re buying so there aren’t surprises later.
“Within each department, each employee knows what their role is, and they know exactly, in what way, do they influence their groups, which, in turn, would contribute to the department, which, in turn, would contribute to the company,” Abbasi says. “The framework we came up with is not just the corporate level objectives but also how does that relate to the individual department and then individuals within those departments.”
As a result, 96 percent of employees said in the survey that they understood how to contribute to the company’s success, and 92 percent said they had the skills and capabilities to deliver their goals.
“Having that kind of alignment is critically important,” he says.
By implementing these three elements into the company, Informatica has enjoyed growth and success while many others have struggled. The company has also delivered a product every quarter for 16 consecutive quarters, which has led to its compound annual growth rate of 18 percent over the last five years even during the recession. On top of the $500.7 million in fiscal 2009 revenue, operating margins have increased from 5 percent in 2004 to 25 percent last year.
“I would reiterate the importance of having a clear vision, a focused growth strategy and exceptional operational discipline,” Abbasi says.
“The clear vision, the focused growth strategy and the relentless face of innovation have worked extremely well for Informatica.”
How to reach: Informatica Corp., (800) 653-3871 or www.informatica.com
As a young lawyer, Terry Conner was simply trying to do the best job he possibly could and keep his nose clean, but as he saw Haynes and Boone LLP grow, he started to notice more of the nuances of the firm.
“In 1970, we had just a handful of lawyers, but to see how the firm was able to grow and have good lawyers and good clients in a market that was originally dominated by much larger firms, ... helped reinforce the cultural tenets. So probably by the time I was becoming a partner in the early ’80s, I understood the power of the client focus,” Conner says. At the 1,100-emplyoee law firm, success has come as a result of a relentless and singular cultural focus — focusing on the client.
“Culture is very, very key, and it’s very relevant to our people but also to our clients,” says the managing partner. “It’s not something that can be contrived or invented. It really has to be part of the fabric of the company or the firm. Ours is the product of 40 years of consistency and a culture emphasis.”
Conner says in order for Haynes and Boone to maintain its success and cultural focus, it’s critical to hire quality people who will fit with the culture and then continue to drive it.
“It’s not something that happens overnight,” Conner says. “It’s something that is built over time. We were fortunate that our founders began to create this culture 40 years ago, and it needs [to be] constantly reinforced and discussed.”
Hire quality people
One of the keys for Conner is to make sure that he brings in people who are going to enhance the client-centric culture and not overpower it.
He looks for people who can thrive in a team environment and also think entrepreneurially. That’s a tall order, but he says you can look at their experience to get an idea.
“You look at their background and things that they have done, and you ask questions,” he says. “Is this someone who has done things a little bit different? Who has spent time overseas? Who has helped in a community effort? Who has taken the ball and run with it in an organization? These are all indicators of someone who can be entrepreneurial and help you come up with new ways of doing things.”
For example, he recalls one job candidate who had lived in China for a while between undergraduate and law school. He had taken the time to learn the language and the culture, and that experience told Conner that he understood the global business environment and was willing to take the time to learn about such things in order to be more effective.
You also want to ask the right questions to get to the heart of that person.
“We don’t try to ask trick questions, but you ask questions that can’t be answered with a yes or no,” he says. “In other words, you want someone to talk about what they consider to be important, what they think their strengths are and how they think they can contribute to the organization. Those are things that give someone an opportunity to really express who they are and what’s important.”
He says it’s also important to hire people who will truly focus on your customers or clients.
“Is this someone who really takes to heart the importance of serving great clients?” he says. “The most successful lawyers in our firm are those that have gotten to know our clients, our clients’ business and our clients’ industries. Someone who has really vested that time and attention into clients is someone we really look to.”
Again, it’s important to ask the right questions to find out if they’re truly focused on customers.
“What you do is you talk about how the client relationship is developed,” Conner says. “If someone’s client is ABC, say, ‘Sally, tell us about how you got to know ABC, how your work has developed, how you got to know the executives at the company. Talk about what the challenges are for that company and how that practice has been aligned with the client’s goals in order to help the client achieve what the client wants to achieve.’
“Talk about particular client relationships and how they have developed over time, and you get a good sense to know if someone has that long-term relationship.”
He also looks for people who don’t only do what the job description requires.
“You’re looking for someone who has shown a consistent ability and willingness to go above and beyond,” he says.
For example, he looks for lawyers who have been active in speaking engagements or writing scholarly articles and for people who have been active in their communities.
Lastly, he wants someone who can work effectively on a team and also enjoys a collaborative environment.
“Ask questions about it,” he says. “When you’re going out to develop business or to work on a project, how often have you involved other team members in the firm?’”
This is central to how the firm operates. You can never be completely sure that you’ve hired someone who will be perfect, but by taking these steps and then seeing how they operate in real situations, you’ll quickly learn if they’re a team player.
“Seeing how someone responds under pressure is always a (really) good test for how well they work in a teamwork environment,” he says.
Focus on clients
With the right people, the firm can have a total focus on clients.
Conner creates teams of lawyers for each client so nobody can say a client is his and that he alone handles that client.
“The starting point for almost everything we do, when we’re doing it right, is what’s in the best interest of the client,” he says.
“Build teams and create teams for client service.”
For example, if a client has a project involving an investment operation in Mexico, he would want a team of lawyers with skill sets to help that problem — lawyers from both the U.S. and Mexico and those specializing in financial issues and any other practices related to the issue.
Once you can get people thinking in terms of a team, it becomes easier to actually focus on your customers.
“You learn a lot from clients from working with them on projects,” he says. “I think it goes beyond just the project. You need to invest time in the client relationship, and that includes spending time that’s not going to be billable to learn about the client’s business and learning about their industry — sitting down and talking to them about their goals, talking about the challenges they face.”
For example, Conner may sit down with a customer knowing that government regulations in his industry are changing, and he may ask that customer how he sees that affecting his business, what kinds of issues he thinks it will present and how that may change his legal needs going forward.
You also want to make sure you don’t dominate a client meeting by talking about only what you can do for his or her company.
“It’s talking first about their goals,” he says. “So many professional service firms want to come in and talk about what they do, but what we do has value only from the standpoint of what’s important to the clients, (what are) the clients’ goals, what are they trying to achieve strategically, what are some of the issues they feel like they’re going to encounter the next couple of years and how will changes in the global economy affect their marketplace?”
In addition to these, he says it’s also important to ask clients about topics that they typically may be intimidated to bring up, such as billing.
“We’re glad to talk about it,” Conner says. “Tell us what’s important from your standpoint about how billing is managed. Those are the questions to really start to assess what’s important to the client.”
In addition to talking to the client directly, you also want to gather information about the client’s industry yourself.
“It’s one thing to be able to identify what has already affected the client, but what we’re trying to do by focusing on business intelligence is really understand the changes that are coming,” he says. “That can be for a client, it can be for an industry, it can be for a practice. As you develop a good picture of how those changes — economic, political, legislative — are going to affect your clients, then you can begin to build a valid strategy that takes that into account.”
For example, he says it’s important for his team to understand how the expansion of international work between Asia and the United States and also between the United States and Latin America will develop over the next few years. He says many companies will be involved in or affected by these initiatives, so by having his team members well-versed on the topic, they can serve as an additional resource and help foresee issues clients may have surrounding these efforts.
Making such a strong focus on client service has helped the firm over the past few decades, but it has also helped it excel within the industry even in recent years, having been named as a finalist for the Dallas Business Journal’s Best Places to Work competition.
“The focus on clients as opposed to a focus on how much money have you made for me today is very liberating,” Conner says. “It’s something that our personnel can relate to, and it’s a higher mission than simply how much money did you make this quarter.”
But money hasn’t been an issue, as the firm generated $306.5 million in gross revenue last year.
“Obviously we’re in business, and we’re conservatively managed, and we have a strong balance sheet and do well financially, but I think our personnel really appreciate and respond to the fact that we put the interest of the client first and emphasize the teamwork culture and not just how much money have we made today,” he says. “It helps us to recruit, and it helps us to retain outstanding personnel, and I think also it’s in the best interest of the client, so it’s a kind of symbiotic relationship between culture and client focus.”
How to reach: Haynes and Boone LLP, (214) 651-5000 or www.haynesboone.com
On Paul Damico’s first day as president at Moe’s Southwest Grill, there were no meetings. There was no slowly easing into the business. There was hardly even time to talk. It was all hands on deck, and he had to roll up his sleeves and be prepared to help anyone and everyone in any way, even though he didn’t know what was going on.
It was Cinco de Moe’s May 5 and the burrito restaurant franchise company’s single largest business day of the entire year.
“I don’t know why that happened,” Damico says. “I didn’t know there was a Cinco de Moe’s, but I started on Cinco de Moe’s, and it was a little crazy in the office that day.
“It was a little overwhelming the first day, and it also brought to me the importance that this day has on the system and on the team.”
It was his first lesson in understanding the chain, which was struggling at the time. It had been acquired by FOCUS Brands from Raving Brands less than a year prior to him starting and was being run by the now chairman of FOCUS. The company had gone through rapid growth since its inception in 2000, but franchise sales at that time weren’t that strong, and franchisees and employees were uncertain about the future as they struggled to be a part of the new FOCUS Brands family.
“I brought some stability in the group and started to build a team that would take this brand, which had grown at an unbelievable rate through the first seven years; we were going to start to stabilize it because they had grown so fast they were playing catch-up,” he says. … “We needed to settle down and put some processes in place.”
Despite uncertainty on the part of employees and franchisees, Damico was confident. He had been part of the FOCUS Brands family previously as a Cinnabon and Carvel franchisee, so he knew FOCUS was a good company that would work well for Moe’s. He just needed to get the right people in place so he could go on to add better processes to stabilize the organization and poise it for more growth
“I like to say, ‘Put the right people in the right seats on the bus,’” he says. “Kind of cliché, but it was something that really needed to happen here, and it took every bit of a year to make that happen. We had to bring in some new talent. We had to shift some talent.”Get to know your people
To follow the guidance of Jim Collins by getting the right people in the right seats on the bus, Damico had to first know the people with whom he was working.
“The first step was really getting to know who the team is,” he says. “I spent a lot of time meeting with the team I had inherited.”
One of the keys to knowing people is to socialize with them.
“Don’t be afraid to have a social occasion with every member of the team, whether that is the clerk or the senior vice president of marketing,” he says. “Bring them together because we all have a common goal.”
Damico doesn’t just grab a burrito at the restaurant with his employees. Instead, he invites them into his home.
“That really takes down everybody’s guard,” he says. “It strips away everybody’s title, and it brings the team together in a comfortable setting. There’s nothing more comfortable than inviting people into your living room. If we can convey that to the team and the team can react to each other that way, maybe that’s what transcends into our restaurants at the end of the day.”
While social get-togethers were part of the puzzle, the biggest piece was having one-on-one meetings with everyone.
“I would ask everything from, professionally, what they were focused on, what they should be focused on, and what they thought they should be focusing on but weren’t focusing on,” he says. “Then the conversation delved into their personal lives do they enjoy what they’re doing? We talked about wives and husbands and kids and families. For me, it’s important to get to know people on a personal level.”
It’s also critical to find out if your employees are happy.
“Find out what people want to do,” Damico says. “If you were to poll any organization, you’d find that 50 percent of the work force are doing things they’re OK doing, but it’s not getting them excited.”
Instead, he wants his people to be fired up about their jobs.
“Don’t sit in a role where you are not going to be absolutely stoked to come to work every single day,” he says. “Don’t do it for the paycheck.”
You also need to recognize if people are more suited for another position, even if they’re content in the role they currently have.
“You get that through fairly direct interaction and direct questions. You find out fairly quickly what people are excited about and what their history is, what their professional history is, and I’ve had conversations where I was speaking to a person who clearly had the passion, the education, the experience in the human resources arena, but that person was running company operations, and that’s a bit of a disconnect,” he says. “That’s a big disconnect for me.”
And you also have to recognize when people are bad for your team.
“It’s less about the role and more about your management attributes, if you will,” Damico says. “We look at things like energy. We look at things like can you play in the sandbox with the team. You may be the best operator, and you could have 15 years of being the VP of operations, but if you can’t play in the sandbox with the rest of the Moe’s team, then you’re really detrimental to the team.”
By taking the time to speak to people individually, Damico was able to see the moves he would have to make to ensure he had the right people.
“Those one-on-ones revealed to me some of the challenges the individuals were going through with the acquisition,” Damico says. “It revealed to me some super talent we had on the team, and it also revealed to me some lack of talent we had on the team that we needed to shore up.”Fill in the gaps
Once he got to know the people, he recognized what internal moves were needed and which positions he needed to fill from the outside.
When he’s interviewing, he says one of the keys is to first make people feel comfortable talking with you. So for the first 15 minutes of any interview, before he asks any questions, he talks about Moe’s. Because he has a high level of passion for the brand, he allows that passion to come through in the way he speaks about it, which gets the interviewees excited. He also talks about his personal life to make them more inclined to speak about theirs.
“It gives them some time to get comfortable and relax and want to open up because I do it in my opening remarks,” he says. “I talk about my wife and my children and not only my management style but also my parenting style, and I may draw some correlations between the two.”
Once he starts asking questions, Damico has a specific approach to hiring that he takes because he knows what he’s looking for I″E4L″. The I’s stand for integrity and intelligence, while the E’s represent energy, energize, edge and execute. Then the L’s reference loyalty and leadership attributes. To learn if potential candidates embody these characteristics, he uses specific questions to get to the heart of their personality.
“A lot of things you can see in the body language when you’re talking to them energy and asking questions,” he says. “How do you energize? When you walk into a room, does the room light up or do people not even recognize you’re there? That’s an energizing factor, which brings a whole different level of excitement to a conversation.”
When interviewees respond, watch their body language to see if it matches their words.
“If somebody sits there, and I’m having a conversation, and I say, ‘How would you energize your team to accomplish a goal?’ and their hands are folded and in their lap, I’m not sensing they can energize the situation,” Damico says. “What can you do to take the flag and run up the hill, and when you get to the top, you’re not there by yourself that’s a lonely place. When I turn around, I want to see the Moe’s team standing there with me. That’s energizing a group of people.”
He says to also ask questions that get to the heart of these attributes.
“Always ask question that are tied to real-life experiences, and those real-life experiences I like to tie to [are] personal or family experiences,” he says. “Everybody that goes through an interview can recite the local buzzword, what the nomenclature is of the year, the things that let the interviewer know that you’ve got the business sense.
“But when you try to ground people and talk to them and ask them specific examples about how you raise your children in an environment where they felt comfortable to tell you what it is they’re doing in their life, you have to dig pretty deep,” he says. “So tailor the questions toward personal and life experiences rather than just the corporate buzzword and what you did in your last job.”
Overall, it took him about three weeks to conduct one-on-ones and a year to make all of the moves and hires to have the best team in place, but the time was well worth it. With the right people, he was able to then go on to make process changes and strengthen elements of the business that had been neglected or underutilized. As a result of his efforts, Moe’s had $323 million in net revenue last year, sold more deals in the first quarter this year than all of last year combined and is poised to add 100 restaurants next year to it’s already more than 400 locations.
“Today, as we sit here two years from when I started, we have all the right people, and they’re clearly all in the right seats, and if you look at what’s happening with what we’re doing from a marketing perspective, a culinary perspective, you look at our sales … there aren’t many companies that are doing that right now,” Damico says. “… There’s so many positive indicators of what’s happening with the brand.”
How to reach: Moe’s Southwest Grill, (404) 255-3250 or www.moes.com