Daniel G. Jacobs

Saturday, 28 October 2006 20:00

Remote deposit capture

When Bill Grodin calls customers to see if they’ve sent a payment, he may still hear, ‘The check is in the mail,’ but at least now he can make that call earlier than he did before.

“I had been using a lock box service” from Key Bank, says Grodin, president of 87-year-old River Recycling Industries Inc. “We were getting checks in the lock box and checks at our address. The information at the lock box would always get deposited that day, but I wouldn’t have the information as to who paid me. I wanted to resolve that issue so we can make our collection call on a more-timely basis.”

Grodin found his answer in a remote document capture system, which scans checks and then, through a broadband connection immediately deposits the money into the client’s account.

“Now the checks all come here,” Grodin says. “We’ve closed down the lock box. The minute the mailman arrives, we know who has paid us. It’s helped me in my collection efforts.”

Remote deposit capture has been available for about a year-and-a-half and has been one of the most quickly adopted value-adds ever offered by Key Bank, says Key’s Joe Cornelius, vice president, senior product manager, global treasury management.

“We rolled the product out in June of ’05,” Cornelius says. “This is probably the most popular product in the market. It’s created quite a buzz within the industry.”

Not only can clients check with customers about payments more quickly, they can also save hours a week in travel time to and from the bank. Grodin estimates his company receives more than 250 checks a month.

“One of the large costs that I saved is we don’t go to the bank anymore,” Grodin says. “The bank is 10 minutes from here. You have 20 minutes’ commute time. You have a minimum of five minutes at the bank. Maybe I’ve saved a half hour a day.”

The one down side is that the checks must be from the United States and drawn in U.S. dollars. Foreign check must still be delivered to the bank.

“They made it sound like it was going to be a little bit difficult and there would be a learning curve,” Grodin says. “It was probably a one-day learning curve. It was very simple. I wish they had had this years ago. This is one of the best innovations they’ve come up with. It’s similar to doing Internet banking in terms of its efficiency.”

Key’s Cornelius says there are five major benefits for customers.

  • Users can deposit checks from the convenience of their own offices.

  • Users save money by eliminating trips to the bank or courier fees.

  • Users improve cash flow because deposits at some banks can be made after the branch has closed and still credited to the account that day.

  • Some users see reduced banking fees because organizations with many locations that had several bank accounts now need only one.

  • Users can save on transfer fees with a concentration of funds into one account.

Depending on the bank and the service, remote deposit capture can cost anywhere from $50 to $150 per month and include renting or buying a scanner.

One of the nice things about the service, Cornelius says, is that it can benefit a company of any size.

“A lot of treasury services go to the big companies and then it trickles down,” he says. “This one, half our sales have been to middle-market companies, and about 20 percent to small business companies. It’s very successful in the range of the lower- and middle-market small business.”

HOW TO REACH: River Recycling Industries Inc. or (216) 459-2100; KeyCorp, (800) 539-2968

Wednesday, 20 September 2006 20:00

Changing channels

 For four years, Dawn Ostroff worked to make UPN the network for 18-to-34-year-old television viewers, battling a larger, more entrenched competitor in The WB Television Network.

That battle ended in January, when the parent companies of both networks announced the competing entities would join forces and become The CW Television Network.

Ostroff found herself with nine months to turn the rivals into a single entity while bringing new solutions to both advertisers and viewers clamoring for something different in a crowded marketplace.

“We came into this new company with a certain amount of knowledge about what worked and what did not work at both The WB and UPN,” says Ostroff, president of entertainment for The CW Television Network. “We were really anxious to hear from our other constituencies — our advertisers and the viewers — what they were looking for in a new network.

“What the advertisers were saying, ironically, was the same thing that the viewers were saying. It was very, very clear to us: They are both looking for something new, something that doesn’t conform, something bold, something that is daring, something that takes the new media opportunities and makes them part of the new network from the foundation so we’re not retrofitting.”

Ostroff had to deliver those opportunities and at the same time bring the best of both networks into the new entity. That meant finding the right people, giving them a set of objectives and encouraging them to find new ways to solve old problems to meet the demands of advertisers and viewers.

“There were great advantages at being at UPN, being the underdog and trying to climb up,” Ostroff says. “There were great advantages at being at The WB and having achieved a certain brand and a certain place in the broadcast business. Both companies really achieved their success in their own way, although there were failures on some level, and they both had made a mark.”

The four Ps
The first challenge Ostroff faced was figuring out what to bring from each of the two networks. Although she won’t share exact figures, estimates put the UPN around $253 million in revenue and the UPN at $715 million. Both companies were targeting the same audience, so there were some redundancies that needed to be eliminated.

Ostroff and John Maata, The CW’s chief operating officer who held the same position at The WB, had to determine what was worth keeping and what needed to be changed.

“He and I sat down and strategically made a list of all the different departments that needed to be dealt with in terms of planning the organization,” says Ostroff. “Obviously, each company had run in a similar manner because we were both doing the same thing, but the way in which our companies were set up were quite different.

“We first spent some time organizing each of the departments, not necessarily the way The WB did it or the way UPN did it, but the way we felt would be most effective for this new entity moving forward, not only in terms of what we had learned in the past from these two separate networks operating for 11 years, but also in looking toward the future. (What) are the next 10 years going to be like for the broadcast network business, and what opportunity do we have for growth and change?”

It took several months to figure out the organization and make deals with employees who were asked to stay and put together severance packages for those who weren’t.

Ostroff was looking for employees who have three traits: passion, persistence and patience. Those were the kinds of people she thought she could build a winning organization around.

“First and foremost, you have to have passion about something,” Ostroff says. “I’ve always loved TV. I still wake up at 4 o’clock in the morning excited about getting to work. I love marketing and I love being able to reach young audiences, 18-to-34 -year-old audiences, and learning everything about them, what makes them tick and how they approach life. For me, that is a total passion. It’s never lapsed. When you have that fire in your belly, I really believe you can get anywhere.

“Everybody’s got to have that excitement. You’re only as strong as your weakest link. You’ve got to have everybody excited about what they’re doing, excited to be on the team, and it goes from the assistants to the heads of the company. Everybody’s got to be able to have that kind of enthusiasm for what they’re doing and want to win that badly.”

When that energy is applied consistently, the odds of success increase.

“You have to be persistent about whatever it is that you want to achieve, whether it is in your career or where you see your company,” Ostroff says. “You need to be absolutely persistent and never give up. No matter how many times you get kicked down, you brush yourself off and pick yourself up. You have to see something so clearly and want it so badly that nothing is going to stop you. That’s what it takes when you’re a leader. You absolutely cannot let anything derail you.”

The final P is patience, something that has not always been easy for Ostroff, particularly following the announcement of the merger.

“There is a certain amount of patience that you have to have in everything you do,” she says. “We’ve had to be patient on certain levels. We’re still not under the same roof yet. We’re waiting for our space to be built. There is an eagerness to get this network on the air. There is certain level of patience, but it’s amazing how much we’ve had to get done in just eight months.

“It doesn’t happen overnight. Nothing happens overnight. If it does, it’s a fluke. You have to be prepared to work really hard and really long, and it will come.”

Creating a culture
When The CW’s parent companies, CBS Broadcasting Inc. and Time Warner [the C is for CBS and the W is for Warner], announced the merger, Ostroff had less than a year to figure out how to turn rivals into teammates.

“The opportunity that we have at The CW is really to create a new culture and embrace it, which is 90 percent of (success),” she says.

Creating a new entity and the culture that goes with it means laying out goals so that everyone is moving in the same direction.

“You have to have a clear vision of where you want a company to go and where you want to see the company in three years, five years, seven years,” Ostroff says.

Her vision is simple: Ostroff wants the CW to be the No. 1 network with the 18-to-34-year-old demographic.

“We think about what our goals are and what we need to do to achieve the goals,” Ostroff says. “You’ve got have to have the best team. You have to have a clear vision and you’ve got to have a good organization. If you have at least that foundation, then you clearly can set everything in motion.”

To make sure the goals are clear, Ostroff holds town hall meetings each quarter with everyone in the company.

“There, you really get to communicate everything that is happening to the company and they can feel they are a part of everything,” she says. They can “get excited about all of the successes that we have and be very clear about what the immediate goals are, what the priorities are for the upcoming months.

“At the same time, it’s about making sure all the department heads, who (I) meet with on a weekly basis, communicate to their staffs what is important, what the goals are and what the successes are. It’s all about having great leadership in the company. As long as you have great leaders working with you, there’s a pretty good chance it will trickle down.”

Ostroff also uses those meetings to breed a sense of community.

“We also encourage everybody to feel like a family,” she says. “When you’re doing a start-up, being able to create a certain environment that is encouraging and makes everybody feel like they’ve got a win, they’re headed in the right direction and clear about their goals, is the only way you can really get things accomplished.

“We see this as a huge opportunity to create a new culture. What we really want is for the employees to feel innovation, participation, connection and community. It is good for us to be able to use those words as part of our culture — not as the culture, but part of it. It keys in to what our brand is and keys in to what we want our employees to feel.”

Seize new opportunities
The same four words that are an important part of the company’s culture — innovation, participation, connection and community — are a direct reflection of the values Ostroff wants the new network to demonstrate to the outside world.

“We use those words when we talk about what we want the viewer to think about when they hear about The CW,” says Ostroff. “When we use those four words in terms of our corporate culture, it really does bring to light what we want this company to stand for. We want all of our employees to be innovative. We don’t want them to feel like they’re stuck inside of a box.”

Thinking outside the box is what will set the new network apart from its competition, and research provided the clues for where it needed to go.

“We went out and spoke to probably 10 different advertising agencies and clients,” Ostroff says. “We sat down with them and said, ‘What are you looking for? What do you expect to see? What would you want to see? What would your hope be for a new network in this day and age?’

“Then we did the same thing with viewers. We did all this research about the 18-to-34-year-old lifestyle, about how they get their entertainment, how they watch their television, what they’re looking for, what their attitudes are, so that those attitudes can be reflected in our shows and in our branding for the network. We tried to figure out ways to be different.”

One way The CW is distinguishing itself is through the use of “content wraps.”

“Instead of having a lot of commercials, which we call clutter, and it’s hard to get your message (across to viewers), we’ll have a show around our show,” Ostroff says. “Each of the breaks will be two minutes long — three segments — a beginning, a middle and an end, so that there is a reason to stay tuned throughout the show, in order to get to the end of the content wrap.”

For example, a content wrap might involve a blind date between two viewers. The first segment the audience will meet the girl and watch her makeover. The second gives the boy’s story and the third is their date.

The mini-stories give advertisers a new, subtler way to present their message and give viewers a chance to interact by voting online whether the couple should meet again.

“It’s going to be a great experiment,” Ostroff says. “If it works, it could revolutionize the way we advertise on TV.”

If not, she’ll turn to her team to come up with another innovation to reach the company’s goals. It’s all part of her unique outlook on running an organization.

“There are a lot of people who go into companies, and the objective is to get the company to stop hemorrhaging, because there are a lot of losses,” says Ostroff. “Sometimes people are brought into companies simply to cut costs. Maybe they have a passion for cutting costs and making all the pieces of the puzzle work.

“There is another way to gain that success, and that is having somebody who has a lot of vision for what that company is doing and figure out how to make them successful, creating a product, manufacturing a product or making something that is in high demand.”

HOW TO REACH: CW Television Network, www.cwtv.com

Tuesday, 29 August 2006 20:00

Darioush Khaledi

 Darioush Khaledi knows that companies — like fine wines — can improve with age. And he has the patience and the experience to grow both grapes and businesses. In his role as proprietor of Darioush, a Napa Valley winery, Khaledi waited years as the grapes were grown, picked, squeezed and stored in barrels. He waited longer still for the first vintage to be released, and his patience has been rewarded — the vineyard now grows seven varieties of grapes and brings in between $7 million and $8 million a year. Meanwhile, in his role as chairman and CEO of the 30-year-old K.V. Mart, Khaledi has updated the look of his 23 Los Angeles-area grocery stores. K.V. Mart, with about $250 million in revenue, operates stores under the Top Valu Market and Valu Plus Food Warehouse names, and employs more than 1,500 people. Smart Business spoke with Khaledi about how he makes sure his employees are having fun and maintains a company culture.

Enhance your leadership ability.
Ninety percent comes from (within) you, and then you can enhance it 10 percent. You can do that through a variety of courses and looking at the biography of your ideals.

It’s like playing violin; you either have (talent) or not. Of course when you have talent, you have to practice and you have to learn to do it.

Don’t micromanage.
My style is hands off. I encourage them to do things, to make decisions and make mistakes. You learn from it.

That’s the investment that you do. (But) they know if they make mistakes twice in the same manner, then they’re going to have to talk to me.

We have a self-pressure system. Everybody is in charge of their own department. They feel they own the work, that they are the entrepreneurs of their own department.

There is no pressure from above. The pressure comes from within.

Know your role.
If you ask me what I do as the CEO of the company, all I’m doing is keeping the culture and keeping people entertained and happy.

You have to always create excitement about growing. Employees like the company growing.

They see opportunity for their growth when the company grows. I’m constantly doing something in the company, either remodeling the store, finding new locations or talking about new formats.

Selling groceries is boring, anyway. That’s how I keep them happy, motivated and looking for growth.

Keep the culture at the forefront.
Unfortunately, there have been many, many failures in the past 10, 15 years of corporate takeovers.

I can give you many, many examples in our neck of the woods that because they didn’t respect the culture of the smaller company, they’ve ruined the whole company.

Make sure your employees are laughing.
If you are going to a party with a bunch of friends, you are excited while you are driving because you are going to meet all your friends and have fun together. It is the same atmosphere we have here.

We have six or seven meeting rooms; all of them have a glass door. When I pass by, I can see the meeting. I’ll open the door (and say), ‘I don’t hear any laughing. What’s going on? You are getting too serious for me.’

They like to work with each other as a team. It’s like a basketball team or a football team. They have fun together when they are playing.

Measure what’s important.
In the United States, the bottom line is 100 percent the standard. In companies in other countries, it is not 100 percent measured (by) just the bottom line.

When you walk into our headquarters, we have written on the wall, ‘We at K.V. Mart have two objectives, to make money and have fun.’ That’s all.

Treat people as more than employees.
The best advice I can give is to love your teammates. Trust them. Let them do the job.

Know your challenges.
In the wine business, there is not too much competition. We have a line of luxury (wines). Not too many wineries are in that (niche).

We constantly have inventory problems, not marketing. We are always in short supply with the demand. In eight years we have not been able to (meet) the demand. The biggest challenge that we have in my winery is expanding the vineyard so we can produce more wine.

On the grocery side we have 23 locations. Our biggest challenge is the competition. They keep opening stores. Twenty years ago, the only stores in the inner cities were our stores.

Now there are so many other independent (stores) and so many other supermarkets and new formats. They come up with new formats every month. That is my biggest challenge.

Take advantage of opportunities.
As long as we have room to grow, we’re going to grow. When we started (the winery) eight years ago, we only had 30 acres of vineyard.

Now, we have 90 acres of vineyard. I don’t work any harder. I never worked more than 30, 35 hours anyway. I usually come in the morning and by lunch, I go to the golf course.

The winery is more of a challenge because it is a smaller company with fewer resources and fewer layers of management, so I have to work harder. It’s a small company, but I like to produce something to be unique.

HOW TO REACH: K.V. Mart, (310) 816-0200 or www.kvmart.com; Darioush Winery, (707) 257-2345 or www.darioush.com

Saturday, 29 July 2006 18:19

Why buy?

Annette Dockus explains very simply why leasing is attractive.

“It was a newer model with some extra bells and whistles that we needed,” says Dockus, director of operations for Superior Tool Co. The purchase price “was a little more than we wanted to go for. Leasing has worked for us in the past. If it’s not broke, don’t fix it.”

Leasing is an option that companies chosen in increasing numbers in the past decade, with an annual 12.5 percent growth rate.

“There are several reasons a corporation looks at a lease versus traditional term loan,” says Chris Karwoski, senior vice president with National City Bank. “It’s a lower after-tax cost for equipment. We, oftentimes, are a more efficient user of tax benefits than the lessee. We will finance 100 percent of the asset. Last, in terms of technology types of equipment, whether it’s MRIs or data processing equipment, there is oftentimes an obsolescent protection.”

For Superior Tool Co., which manufactures and assembles plumbing hand tools, it was the desperate need for a new vehicle.

“The truck was wearing down after six years of use,” Dockus says. “We use it every day, almost all day long, taking a forklift on and off. The use of that, after six, seven years, you get into high maintenance costs. That’s one of the reasons we do lease. It gives us the option at the end.”

Leasing also gives the company more flexibility as it grows, she says.

“Some companies are just unable to use or efficiently use depreciation,” Karwoski says. “For instance they are carrying a potential loss during the terms of the lease or they might be in the alternative minimum tax where depreciation is a preference item. A corporation the size of National City is a high tax bracket, federal income tax payer. We typically will buy those tax benefits and exchange them for lower lease payments.

“We’ve done, through our small-ticket leasing program, something as small as a $5,000 server up to something in excess of $100 million for Great Lakes freighters and large rail-car consortiums.”

National City bills out 35,000 invoices monthly to corporations and companies throughout the United States and Canada. That represents nearly 2,500 leasing clients; most companies have multiple leases.

Karwoski recently completed a deal with a tool-and-die company for $1.5 million worth of computer numerical control machines.

“They needed off balance sheet treatment,” he says. “Certainly a term-loan wouldn’t provide them with that. In addition, they were looking for the lowest after-tax cost. Leasing did provide them with both of those.

“Our lease was approximately 90 basis points lower than the traditional term debt option, and that’s over the life of the lease.”

Those kind of savings explain why four out of every five companies will lease equipment this year, totaling $229 billion in leases.

“Our leasing portfolio at National City is about a $5 billion portfolio,” Karwoski says. “We’re one of the fastest-growing bank-owned leasing companies in the U.S., if not the fastest.”

Superior Tool leases only its truck, but with each new deal, the company improves the relationship with its leasing partner.

“We end up with a long-term relationship with the leasing company,” Dockus says. “We have better negotiating (experiences). They know who we are. We are using our leasing company to do our maintenance on it. That helps maintain the relationship.”

HOW TO REACH: Superior Tool Co., (216) 398-8600 or www.superiortool.com; National City Bank, www.nationalcity.com

Saturday, 29 July 2006 18:10

Outsourcing sales management

As companies grow, the natural tendency is to take the best salesperson and make him or her the sales manager. The problem is, the company has then turned its best producer from a revenue generator to a cost.

That was one of the issues facing David Charlton, owner of Rice Oil, which provides consulting and field service to production companies. Charlton found his solution at Sales Concepts Inc., which provides coaching and training for sales teams.

With the company’s help, Charlton developed and implemented an online management tool that allows business owners to quickly assess how well individuals and the company are doing compared to their goals, eliminating his need for a sales manager.

“I’ve got five businesses, and my goal is to be very entrepreneurial,” Charlton says. “I’m not very good with details. I don’t want to work in a business; I want to be able to work on it.”

Charlton uses an online solution that lets him track the most vital information about his business any time of day. He compares running a business to the description his brother-in-law, a former fighter pilot, gave of how the military trains pilots to concentrate on critical data under stress.

“When the fur was flying up in the air, he was going through a dogfight, there was so much going on,” Charlton says. “They train them to look at a panel that has five things called cross checks. (If) they focus on those five things — with all the other stuff going on - then they’ll land safely and fly another day.

“With all the businesses going on here and all the customers and all the things that we should be tracking and measuring, it’s hard for me to stay focused on the most important stuff. (The program) allows me to go online and see how our company is doing at any moment in time.”

Charlton is able to track a variety of key metrics including sales, revenue, gross profit, profit margin and even the company’s credit line through the program he helped develop, MyCrosschecks.

“We have the ability to (measure) visually instead of quantitatively how people are doing,” he says. “If they’re not hitting their numbers, it’s red; if they’re 5 percent off, it’s yellow; and if they’re nailing them, it’s green.”

Using the program as a sales management tool means Charlton can keep his best salespeople selling instead of managing.

“The other problem with the sales manager is they’re spending the majority of their time working with the weakest salespeople,” says Keith Strauss, president of Sales Concepts. “They’re always working on the problem child, so the good ones, who could be even better, just sort of sit there and coast, feeling nobody appreciates them.

“We’re using some technology, and now the time the sales manager used to commit to managing is being freed up to go back and sell, which is what he was really good at in the first place, and the people are getting better. The other issue is, just because they’re good at selling doesn’t mean they know why they’re good at selling, nor does it mean they have the skill-set to manage other sales people.”

Charlton makes the benefit very clear.

“I was in a lot of pain,” Charlton says. “I want to grow, be an entrepreneur and start businesses, but I’ve got to have a way to stay in touch with the ones I already have.”

HOW TO REACH: Rice Oil, 800-589-RICE (7423) or www.nofriction.com; Sales Concepts Inc., (440) 575-7000 or http://www.nofriction.com

Saturday, 29 July 2006 07:37

The Bedford file

Born: 1961, Clearwater, Fla.

What is the most important business lesson you’ve learned?
Make Jesus the CEO. I can’t say that’s something I’ve always practiced. It’s certainly been reinforced to me here.

When you rely on Jesus to make the big decisions, it takes a lot weight off your shoulders. There are some burdens that no one person should have to carry.

What is the most difficult business challenge you’ve faced, and how did you overcome it?
9/11 — it was not just an attack on U.S. soil, it was an attack on what we do, our way of life, using aircraft as a weapon of mass destruction. Emotionally and psychologically, it was very damaging to everybody in the business.

It was profoundly impactful to our company, our industry and our people.

Within two weeks, it was very clear that our short-haul turbo business, which we intended to exit anyway but had intended to do it in a much more orderly, long-term fashion, meant those markets became huge cash flow burners. Those markets were all over and done with. As a result, we grounded a huge chunk of our turboprop fleet.

We had to eliminate 25 percent of the jobs in this company in two weeks. Thankfully, within seven or eight months, we were able to bring all those people back. It was the worst month of my life, for sure.

Republic Airways’ vision statement:
We believe that every employee, regardless of personal beliefs or world-view, has been created in the image and likeness of God. We seek to become stronger from our diversity. We seek personal respect and fulfillment from our work. Most of all, we seek to recognize the dignity and potential of each member of our Republic Airways Holdings family.

Thursday, 29 June 2006 20:00

Team captain

At the age of 17, Jim Irsay was well on his way to becoming a leader of the Baltimore Colts, the NFL team his father had bought four years earlier and would eventually relocate to Indianapolis.

“It was a moment that connected my youth with the future,” Irsay says. “My dad went in the locker room after the game and took (then head coach) Ted Marchibroda to the woodshed — basically firing him and Ted resigning in front of the team. Bedlam broke out.”

The young Irsay felt compelled to mollify the difficult situation.

“It was almost like your big brothers getting in a fight with your dad,” he says. “There was a lot of yelling and high emotions. I left the locker room and walked out onto the empty field. I just had a calling, a calling to leadership where something in you says, ‘How can I stand up to make this situation better?’”

A few minutes later, he walked onto the team bus.

“I apologized for my dad’s actions and tried to mend the fences,” he says. “I started crying, breaking down a little bit from the pressure of the moment. Ted Marchibroda got up and said, ‘It’s OK, Jimmy, you should go with your dad. It’s going to be fine.’ It was hard; I was tearful, but it was a calling. You hear that calling and you don’t shy away from it.”

Irsay felt something needed to be done and mustered the courage to be a leader on that day.

“Courage is not the absence of fear,” Irsay says. “Courage is being fearful and still doing the right thing. A lot of people think when you’re courageous, you’re fearless, and you’re not. It’s somehow mustering the mettle and having faith deep inside you that you’re willing to stand in those tough storms that blow.”

Irsay makes a distinction between being fearful and showing fear.

“It’s very important: You can’t be a leader and wear a crown of fear,” he says. “Fear is not a good thing. Caution is a good thing.

“People become very fearful when there is a lot of money at stake. Besides your life being on the line, money is right up there. You have to (lead an organization) as a team, as a partnership. You don’t control as much as you think you control.

“A lot of people would like to think that they have this mastery, control over things. The term ‘self-made-man’ is one of the most spiritually arrogant statements anyone can ever make.”

When his father bought the team when he was 12, Irsay knew what he was going to be when he grew up. But that day on the team bus is when everyone else knew it, too.

“They were always very fond of me and looked after me and mentored me as a younger brother,” Irsay says of the players and coaches. “It was a maturation process they could see before their eyes. They didn’t expect me, at 17 years old, to get up before them and address them. That had an impact.”

Irsay began training for the leadership role at the feet of his father and other team executives, moving through nearly every level of the organization. He gained insight and experience and became CEO and sole owner of the franchise when his father passed away in 1997.

At an age when other owners are just coming into the league, Irsay, now 47, has spent 35 years learning about, building and running a National Football League organization. He has learned a thing or two along the way about leadership, success and building a winning organization.

Listening skills
Whether it’s been dealing with poor-performing teams or supporting members of the Colts family during difficult times, Irsay has honed his innate leadership skills by learning from the experience of others.

“I asked a million questions,” he says. “You have to listen and be open-minded and absorb what people who have been there can share with you. I still do this; I take a little bit from everyone.

“I was going to owners’ meetings and observing my dad and all the other owners at a very young age. That was such a big benefit for me. I was keen to observe and absorb the type of lessons that were to be learned in the early part of the journey. It’s awfully hard for some guys when they’re 55, 60, 65 years old, and all of a sudden they come into the NFL. It’s very different.”

One thing that never changes, though, is the responsibility an executive has to employees.

“People are very intuitive and have their antennas up (and pointed) toward the boss, the CEO,” Irsay says. “You’re always being observed and always on the radar screen of others. You can’t mandate leadership. For people to respect you and really follow you with their hearts and not just because you sign their checks is critical.

“Your footsteps have to do more talking than your words. People get a keen sense of what kind of person you are and where you’re heart is at and those sorts of thing. There are a lot of individual moments where you have a chance to engage people that work for you, and they have a chance to connect with you.”

Irsay’s long history with the organization has given him ample time to learn to connect with its member. Where other CEOs provide sympathy, Irsay offers empathy.

“I understand what the business office is going through under certain stressful times,” he says. “I understand what the equipment manager is dealing with if it’s a terribly rainy day and he has to deal with four different types of cleats for players.

“I understand the pressures on all the scouts during draft times because I was one of those people; I did that job.”

Getting the right people
Irsay does not shy away from the spotlight and takes responsibility for building the organization, but he knows he can’t do it alone.

“It’s really critical that a leader understands how to surround himself with the best people and not look over his shoulder [concerned] that this person will get too much credit,” Irsay says.

Once he identifies the best candidate available, Irsay goes after the person.

“I don’t like a lot of question marks,” Irsay says. “You can’t always come up with that individual. If you like someone, you’d better get him. Forget about how much it costs. You’d better be aggressive, and you’d better get that person if he’s going to be a key player in your organization.

“People set certain boundaries in terms of ‘How aggressive are we going to be?’ Sometimes they don’t go in with the mentality of, ‘I’m hiring this guy, and that’s it, and I’m going to figure out a way to get it done.’ There are not enough good people out there. That is the problem.”

Irsay’s reasoning is simple: If you want a successful organization, you’ve got to find the people who can make it happen.

“Good decisions beget good decisions,” Irsay says. “Bad decisions oftentimes have a ripple effect and domino in the other direction. So, you have to be very careful that you put together the foundation of your organization.”

In 1997, Irsay found the new president of his organization in Bill Polian, who at the time was under contract with the Carolina Panthers. Irsay has known and observed Polian for more than 20 years, and the two worked on the NFL’s collective bargaining agreement when Irsay was the 24-year-old general manager of the Colts.

“He was a multiple executive-of-the-year winner,” says Irsay. “He had built the Bills team and Carolina. I knew I didn’t have to ask myself, ‘Is he good enough to be general manager and president of the team? Does he have the organizational skills to run the draft?’”

Irsay calls Polian and head coach Tony Dungy two of the pillars of his organization, the supports that provide the foundation for the rest of it.

“The critical pillars — you have to get it right,” he says. “If you don’t, it can lead you down a long track of failures. You can spend a lot of time trying to correct the poor decisions.”

Once you’ve got the right people in place, get out of the way and let them do their jobs.

“Give them room to be creative,” Irsay says. “Always be there to support them and ask them the difficult questions to play devil’s advocate. That part of leadership is essential.”

But you can only do that with the right kind of people, those who have a passion for what they do.

“What I try to look for is someone who has a real passion for the job,” Irsay says. “I want someone who is extremely enthusiastic and motivated to come to work, that they understand working in the National Football League really is a privilege, and you have a chance to be part of the greatest game and be part of something that is so important and so loved by so many people in this country.”

Humility
During his time with the Colts, Irsay has had ample opportunity to learn not just from executives in the organization but from other owners around the league. But no matter what executives pick up as they travel up the corporate ladder, Irsay says there are certain innate qualities of leadership that can’t be learned.

“It’s something that you’re born with,” he says. “As we’re searching for a new commissioner now, these questions of what you look for do come up. Intelligence and experience, combined with humility, can equal wisdom. The key ingredient is humility. The greatest leaders are the ones that are vulnerable, the ones that are humble.”

Leaders must take their egos out of the equation.

“It’s amazing what you can accomplish when it doesn’t matter who gets the credit. Humility is not thinking less of oneself; it’s thinking about oneself less. People are very intuitive. They’re very tuned in to who the boss is more than you can possibly know. Whatever your true colors are, they’re going to come out.”

Irsay looks at it as a servant leadership approach. He cites outgoing NFL Commissioner Paul Tagliabue as an example.

“His interest was always in the interest of the game and of the owners and not his agenda,” Irsay says. “Leaders must remember that they are trusted servants.”

Many executives make the mistake of confusing leadership with domination.

“I don’t believe in that,” Irsay says. “You’re serving others with your skills and your leadership, and you can’t forget that.”

Part of that is remembering that employees are more than their jobs.

“I’m a very spiritual person, and that’s the most honorable aspect of human interaction,” Irsay says. “It’s important to me to know if someone’s father or mother is ill, or if there is an issue with the child of one of our children’s families or any of those things. It’s a family-type atmosphere that I like to have.

“This is a second-generation family business. It’s a company I own 100 percent of and is private. It’s very important to me that people feel that spirit of family in our organization.”

Besides succeeding on the field, the team that was valued at $227 million in 1998, a year after Irsay took over, was valued at $715 million last year, according to Forbes magazine.

As a child and a young man, Irsay learned his leadership lessons by watching and listening to others. Even now, he is still one of the younger owners in the league and is at a stage where he can provide a new generation of owners with some advice.

“Elder statesmen in the world of business and life are extremely important,” he says. “When you’re younger, you don’t understand that as much. You don’t realize what that experience means. You’re as smart — maybe smarter — you have a lot of energy, but you just don’t realize what the experience factor does mean.”

HOW TO REACH: Indianapolis Colts (800) 805-2658 or www.colts.com

Thursday, 29 June 2006 07:19

Manufacturing improvements

Kinetico treats its employees well, but Vince Slusarz says there is always room for improvement.

“We’ve been a healthy company since our founding,” says Slusarz, vice president of manufacturing for Kinetico Inc. “Like any company, you can always improve, but we didn’t have a burning bridge type of situation here where there was a crisis and we needed to do rapid change.”

Encouraged by Fulcrum ConsultingWorks President Rebecca Morgan, Kinetico’s management has embraced a philosophy of continuous improvement. One area the company has worked to improve is the shift change.

“Rebecca has been very instrumental in encouraging us to adopt simpler solutions, simpler communication solutions — visual aides that tell people where we’re at, the status of production,” Slusarz says. “You go to virtually any department and see what is going on that day, what issues there are. We take what we’ve learned and stand on it ourselves.”

It is also important, Slusarz says, to know where you want to end up.

“If you’re trying to improve a process, you need to define what success looks like,” Slusarz says. “If you don’t do that, how do you know whether you’ve improved it or not? You have to keep examining it.”

It all begins with communication. Not all companies have the strong relationship Kinetico’s management has with its production team, and those with poor communication skills between the office and the production floor are destined for trouble.

“Manufacturing companies are facing global competition,” Morgan says. Every “manufacturing company, unless they’ve got one heck of a niche market and a proprietary product with which nobody can compete — and I don’t know anybody that fits that description — needs to deal with, ‘How are we going to get every employee working to make us better?’”

The office and the production floor may have the same goal but differ on how to get there.

“It’s not unusual for there to be different understanding of what we’re doing or how we try to do it,” Morgan says. “It’s not unusual for production workers on the floor to feel left out of some key things going on in the office.”

While communication has always been good at Kinetico, Slusarz wanted to make it better.

“Now, the supervisors are doing a walkaround, and there is a bit of an overlap in our molding department,” Slusarz says. “With the new shift coming on, they’ll go to each press, and each operator will talk about how their press is running, how this part is running.”

Another part of improving that communication is keeping doors open. Closed doors are a sign of poor communication and send the wrong message to employees, Morgan says.

“Some people pay attention to body language,” she says. “I pay attention to flow within an operation. When I see doors shut, I see that as a potential interruption to flow — of information, of respect. I need to look at that and see if there is a legitimate reason that door is closed all the time.”

If it’s a lack of trust that keeps the doors closed, Morgan says the company is in trouble.

“They’ll likely go out of business,” she says. “When there are only five or 10 people, whether it’s management or office workers or whatever who are trying to make thing better and the rest of the people are challenging and questioning every single move, it’s just not going to work long term.”

HOW TO REACH: Kinetico, www.kinetico.com

Wednesday, 26 April 2006 10:06

Accounting for your accountant

Randy Myeroff made a number of cold calls when he opened the Akron office of Cohen & Co. 17 years ago, and one of his first visits was to a tire importer that seemed more than happy with its current accounting firm.

“We met this client through a banker,” says Myeroff, now president and CEO of Cohen & Co. “They were paying $2,500 for an audited financial statement. We were very quick to say, in the best possible cases, a certified audit for a company (their size) is going to be $20,000 or $25,000. We already knew there was some mismatch.”

That company didn’t listen, not at first, anyway. But during the subsequent year, internal personnel issues created some complexity in the company’s accounting records.

“A year later, they showed up at our office ... and said, ‘We think we ought to talk to you guys,’” Myeroff says.

It’s something Myeroff has seen many times. Many companies look to accounting firms simply to fill in the blanks on their tax return once a year. But business owners should expect more from their accountant, starting with a long-term relationship — like the one he developed with that tire importer years ago.

“We ended up being very involved in helping them set up proper internal controls,” Myeroff says. “We were extremely involved in a succession plan because there were a father, two sons-in-law and an outsider running the business. We helped strategize from a tax standpoint, from a structural standpoint, how the father passed the wealth to the next generation, who was going to manage what kinds of things. That was 10 years ago. We’re now talking about succession amongst the three there.”

Any number of accounting firms are more than capable of handling the average tax return, but Myeroff says they can do so much more. And Northeast Ohio offers a great deal of opportunity.

“Sitting in Cleveland, we’re pretty lucky,” Myeroff says. “We’ve got some great firms in town. The bar should be high. People should expect a lot out of their firm. They should expect it going in, and they should keep pushing to make sure they’re getting value of the relationship.”

That value includes more than just business knowledge. It also means offering business advice in a proactive way.

“The first issue is, do you have a meeting of the minds?” Myeroff says. “You don’t know if somebody did a good job for you unless you had some sense and they had some sense for what it is you wanted to accomplish.”

That comes from meeting on a regular basis. A company should expect to hear from its accounting firm several times a year. Often those meetings have no agenda, Myeroff says — accountants visit with clients just to get an update on the business and the issues going on in the lives of owners and managers. Through those meetings, an accountant can get a feel for clients’ needs.

“Most of the time it couldn’t happen in an hour meeting,” Myeroff says. “There are times when a client will meet for half an hour and say, ‘OK, let’s get started.’ We may be the ones to back up a little bit and say, ‘Let’s make sure we really truly understand what it is you need before we presume we’re the right firm for you.’”

It often takes a great deal of time to develop the right relationship.

“We are more than just bean counters,” Myeroff says. “It’s easy to say and very hard to execute on. Sometimes relationships will blossom. They take time. We’ll bring on some clients where we know they need more than they think they need. You don’t want to push them into something they don’t understand.

“We’re very long-term thinkers. We think 12 months is too short of a time to measure almost anything. We’re looking for longer-term trends. We’re looking for the retention of our people, retention of our clients, the depth of our expertise.”

HOW TO REACH: Cohen & Co. Ltd. (216) 579-1040 or www.cohencpa.com

Friday, 24 March 2006 06:16

The White-Longworth file

Born: 1969, Anderson Education: Bachelor’s degree, business management, Indiana University, Bloomington

What is the biggest business challenge you’ve faced, and how did you overcome it?

That would have been the change in leadership within the company. I overcame that with a lot of support from the GasAmerica team. [White-Longworth was COO at the time.]

What is the most important business lesson you’ve learned?

When you’re making a decision, if you choose to do the right thing, you’ll always be able to sleep at night.

White-Longworth on family enterprises: It’s helpful if you have a longstanding history and can talk about culture. I’ve seen other companies where that is a struggle. We’re very fortunate; our family gets along incredibly well. We each know our jobs and responsibilities within the company. We’re all very open and give each other our opinions.

Sometimes we don’t agree. When we don’t agree, we fall back on, whose responsibility did we put this into begin with, and that’s whose decision will override when there are disagreements. Overall, the trust and atmosphere that it gives you is a plus.

White-Longworth on succession planning: Succession planning is always something you always have to be aware of. We do have a very thorough contingency plan. If anything should happen in the short term to any one of us, the company would be fine. This is a family business, and we hope to leave the opportunity for future family generations.

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