Patrick Mayock

Friday, 26 October 2007 20:00

Tony Atwater

When Tony Atwater was advancing through the ranks several years ago, his father-in-law shared this wisdom: “There’s nothing new — just the undiscovered.” Today, Atwater has transformed that adage into ambition as president of Indiana University of Pennsylvania. In addition to managing a $209 million budget and 1,873 employees, the leader constantly re-evaluates the market and his own business practices seeking innovative ways to better serve his organization and constituents. The latest innovation is a multiphase construction plan to build the largest student residential facility in the United States. Smart Business spoke with Atwater about listening, evaluating data and why you need to do the who before the what.

Learn from the past. Organizations change just like human beings. You can look at your son or daughter; they’re not the same at age 25 or 30 as they were at 3 or 4. They’ve gone through experiences. Looking back at the history of your institution really provides a good education in terms of what has been tried and what needs to be tried.

Also, talking with other presidents and past CEOs and hearing the benefit of the challenges that they faced and the successes that they were able to achieve. See how you might utilize those contexts to build upon your performance and lead the organization.

Question your performance. Ask yourself one simple question: How do I increase my service to my constituents that are relying upon my service?

That’s an important question in terms of generating ideas on how new things can be done or how things can be done differently to improve overall services and performance.

Find out more of those things in terms of opportunities, methods and approaches to enhancing my service and contributions to base constituents. If I can find those new methods and new approaches and generate additional productivity and additional efficiency, then my constituents are being served through innovation.

Look at data in new ways. Use institutional research to generate data that will show what areas may be responsible for one method or one project not being successful.

If you are driving a car and all of a sudden your car stops, it’s being able to look under the hood and see whether it’s the carburetor or whether it’s the engine, and then finding out how to get the car back working the way that it should work.

We get a lot of data thrown at us as CEOs. Part of the challenge is having a good unit to provide analysis of that data and generate new ways of looking at it in various contexts so that it can be used productively.

You get the data, and you may get one impression of what it’s telling you, but there may be another message in that data that you missed.

We have an institutional research office here, and they’re doing that. They’re generating not only the numbers but also are able to provide qualitative analyses that help us to look at the data for its utilities in a number of contexts.

If you don’t have an institutional research operation, then it becomes very important for you to have an executive team that is also data-driven and that you provide venues for them to be able to have assistance for that kind of data generation. It then becomes an issue in terms of how they have access to data gathering, processing and analysis.

Being able to assess data qualitatively as well as quantitatively is extremely important, and that certainly helps in terms of making the right decisions.

Listen. You need to listen, not only to what is said but also to what is not said. You need to listen to concerns, to needs and to interests. By doing so, you are able to surmise what are the directions that an organization needs to go.

Of course, some of the input that you get may not be the most informed, but a lot of the feedback that you get by listening routinely can be utilized to advance your organization.

I have one-on-one meetings with my executive team, and we have an opportunity to exchange information and listen to one another. I also have a president’s cabinet meeting every week, where we have a pretty full agenda that allows us to discuss and talk about a lot of things.

I also entertain regular meetings with faculty members. I have breakfast with the faculty members routinely throughout a semester and discuss whatever they want to discuss.

I don’t think you will find and benefit from the listening if it’s not strategic and intentional. People say, ‘Well, listen. You have ears. Can’t you just listen?’ Well, listening goes beyond strictly having ears. You have to be intentional and strategic about gaining information that will be useful to you in terms of effecting positive change.

In the final analysis, that’s what good leaders really do: They effect positive change in a graceful fashion that lifts the institution or organization.

Do the who. A lot of leaders sometimes want to do the what before the who. The best leaders do the who and then the what.

CEOs need to take the time to ensure that their executive teams not only are capable but also are compatible. Sometimes it’s better to select someone who has a stronger compatibility with the leader’s vision — more so than the technical capabilities and skills.

It’s good to see the candidates both in small group contexts, when they’re interviewing with other people, but also being able to have a one-on-one interview process with that person — maybe even one that’s more informal in terms of either lunch or breakfast. Those give you a good feel.

It’s always possible that the person that you bring on board may not measure up. Strong leaders typically are going to be looking at what is it that the organization and its constituents need. If the person or persons on the management team are not allowing those people to be served in the way that you feel is satisfactory, then sometimes an adjustment is called for.

HOW TO REACH: Indiana University of Pennsylvania, (724) 357-2100 or www.iup.edu

Thursday, 04 October 2007 20:00

Understanding success

When traversing the chasm between client and firm, experience is crucial. The best executives are not only seasoned leaders of their own staffs, but they also share an intimate understanding of their clients’ situations and needs. However, in the field of clinical research, that intimate understanding can prove slightly harder to come by.

Take Victoria Tifft. Before founding and serving as president of Clinical Research Management Inc., she endured several bouts of malaria while working as an infectious disease control biologist for the U.S. Peace Corps in Togo, West Africa.

Upon returning to the U.S., she worked as a biologist for the Smithsonian National Museum of Natural History and later joined the staff at the Ronald McDonald House in Washington, D.C. Her time spent working with chronically ill children solidified her interest in disease treatment and prevention.

Such personal insight has proven an invaluable resource for CRM’s 210 employees. Over the past five years, Tifft’s shared knowledge and experiences have spurred a 50 percent, or $7 million, increase in revenue.

The company — which supports the development of FDA-regulated vaccines, pharmaceuticals and medical devices — has since emerged as a reputable player in the realm of clinical research.

Under Tifft’s guidance, CRM has also become a valued asset in Northeast Ohio. The company serves on or volunteers in numerous state, county and community groups, as well as educational boards and steering committees, such as The Medina County Economic Development Corporation.

The research firm has pledged $25,000 since 2005 for projects and training in local school science programs. Hinckley Elementary School most recently received a gift of $5,000 to provide a Science Resource Center to increase exposure to science at an early age. CRM also began hosting an intern from Brunswick High School in June 2007.

As CRM was expanding into other realms, Tifft realized overhead costs to government interests were increasing. To combat this trend, she launched M3 Clinical in October 2006. This sister company focuses on monitoring, auditing and data management for drug and device trials in commercial and academic areas. CRM now focuses solely on government business opportunities.

Given Tifft’s extensive experience, she will undoubtedly bridge the client-firm gap across whichever sector she chooses to explore next.

HOW TO REACH: Clinical Research Management Inc., (330) 278-2343 or www.clinicalrm.com

Sunday, 26 August 2007 20:00

Donnie Crevier

Donnie Crevier was never a privileged heir. Though his father and uncle founded Crevier BMW 36 years ago, he didn’t glide through a life ripe with undeserving spoils. On the contrary, his adolescence was an exercise in challenge and resolve. The admittedly “rough, little kid” spent time involved in various youth organizations, where he learned how to feel better about himself and the decisions he was making, he says. Now decades later, Crevier, president and CEO of Crevier BMW, is all about making others feel better about themselves. He is actively involved in the Boys and Girls Clubs of Laguna Beach and Santa Ana, as well as Career Beginnings and the Orange County Human Relations Council. In addition to his own efforts, Crevier encourages his 300 employees to get involved in various organizations and nonprofits, as well. This participation has not only benefited the community but has also helped drive his dealership to $269 million in annual revenue and 12th place on the Ward’s Dealer 500, a list of the nation’s 500 largest dealers. Smart Business spoke with Crevier about how to always stay on the lookout for “happy,” how encouraging community involvement benefits everyone and why the customer’s perception is everything.

Get involved in the community. For any of us that have had the good fortune of financial success, it’s our responsibility to give back and help support organizations that can strengthen our culture and young people and inspire people to be successful themselves.

Some of the most important things in many companies are character and commitment. I donate a lot of time and resources and try to demonstrate the kind of character and commitment in other areas that we’re hoping to drive in our team.

We encourage our people to get involved with nonprofits on their own. We want them to be on boards. We want them to help organizations because we think it helps them feel better about themselves, and we think it can also help their careers.

You’re going to meet people in these organizations. You’re going to be able to develop business through those meetings. It’s a networking system. It’s a winwin for everybody. The organization wins. The employee wins. They feel good about themselves, and they may also reap some business benefit. It benefits them indirectly because business might be better because of it.

People relate to people that they think are being helpful throughout the community. People like that and tend to support businesses that are supporting nonprofits and helping the community. A lot of it we’re doing because we want to do it, but it does have a positive impact on business along the way.

Exceed customer expectations. Have customer satisfaction indexes that every customer is interviewed and followed up with. We have ways of monitoring that and making sure that our customers are being taken care of the way that we want them to.

We get results from these surveys daily.

If there’s ever any issue with the way a customer’s been cared for that is not to the level that they’re entitled, then we take steps to correct it.

If customers have issues, maybe the issues are not really our responsibility, but they’re perceived as our responsibility in the consumers’ eyes. In most cases, we will make that customer happy as a result, in spite of our responsibility.

It’s not black and white here. It’s kind of how the customer perceives the situation. If the customer perceives that they were mistreated or something wasn’t done fairly here, we remedy it quickly. We do everything we can to exceed the customer’s expectations.

The happier the customers are, the better business grows.

Look for happy people. You constantly have to be trying to find the right people to grow. That seems to be the single hardest objective of all — to find the kind of people that fit in to your culture and are going to be able to represent you to your clients the way you want to be represented.

We look in all industries, not just our own. We look throughout all business industries for opportunities to find people with the right attitudes, the right character and the right commitment.

I’m after happy. I’m after happy people. People either see the glass half full or half empty. You’re happy or unhappy, and I don’t know that we as employers can change that.

Look for it on the surface, in people that just sort of breed or enthuse happy, and an ability to relate to people.

The initial thing would be just through your first interaction. Then have them interviewed by three or four (employees) and make sure everybody sees the same thing.

We want their input. Plus, we want them looking for those kinds of people every day, in every little thing that they come in contact with in their personal lives. If they come across someone in a different industry that has a wonderful way about them and the character and the attitude that we’re looking for, then we might reach out.

Your people are the assets of the whole operation. Finding the right people is a constant endeavor, and it’s not easy.

Look at every detail. Don’t assume things are going to operate smoothly. You’ve got to constantly keep an eye on everything. I know that sounds microish. To be very candid, I am a little microish. I measure and monitor continually. I watch every detail as close as I can without demonstrating micromanagement.

Have management meetings weekly. Constantly monitor progress and evaluate ways to improve progress and efficiency and customer relations and employee relations. Inspect what you expect continually.

It can be very tedious. That’s not the Harvard way, but I’m always working to improve the process.

HOW TO REACH: Crevier BMW, (714) 835-3171 or www.crevierbmw.com

Tuesday, 26 August 2008 20:00

The writing’s on the wall

How to communicate your vision to your employees

The walls in Robert Nickell’s office are floor-to-ceiling whiteboards. So are the walls of most of the offices at HNP Pharmaceuticals, a 100-employee pharmaceutical compounding laboratory.

“We started off with just a basic whiteboard that you’d buy from Office Depot,” the founder, president and CEO says. “It’s just not big enough. You can actually go to Home Club and buy the whiteboard material in 8-and-a-half-by-11-foot sheets, and it’s just like paneling on your wall.”

Now, when Nickell or his employees start brainstorming, they can literally write on the walls. The process has proven invaluable at the rapidly growing company, where revenue has grown from $3.2 million in 2003 to $8.6 million in 2007.

Smart Business asked for Nickell’s two cents on how to communicate a vision in a fast-growth environment.

Q. How do you communicate your vision to your staff?

The growth of the company is always due to the vision of the leader. My goal is to always be three steps ahead of my staff as far as vision so that they can understand what I’m trying to do.

Each one of your key staff people will comprehend it in a different way. The way my CFO thinks as opposed to my pharmacist in charge as opposed to my COO as opposed to my operations manager — they all think differently. The job of the CEO is to be able to explain it in their language.

I’m ... writing an entire outline and then including, ‘OK, so from an attorney’s standpoint, this is what we need to do. From a finance standpoint, this is what we need to do. From an operations standpoint, this is what we need to do. From a software standpoint, this is what we need to do.’ It kind of gives them a blueprint.

Q. What else do you do to make sure your employees understand your vision?

In some cases, I whiteboard it. It’s a teaching technique. We can be in the boardroom or in my office or in a meeting room and somebody can stand up with a marker and we can start drawing out a flowchart.

If your walls are white-boarded, you can draw a huge flowchart. Then what we do is we take a digital image of the wall, and we forward that image, or we save that image. So later on, if we’re having a meeting, and we’re like, ‘Wow, we flowcharted that before,’ we’re able to pull up the digital image and put it up on the big screen, and we can go back and review it.

Q. How do you hold people accountable for that vision once they understand it?

The way I did it was through e-mail. So I’ll track e-mails as far as deadlines.

The other thing we have is we have conference calls with action items: We need a new contract for this professional medical corp. Were they done?

If not, why not? Where are they? People know they’re going to be accountable, just like they do in school.

Q. How does that benefit your staff when you follow up?

It increases their comprehension. My whole goal is continue to push the level of comprehension until they can take it on their own. Once they get it, then they implement it, and it becomes part of their operational maintenance, and I’m off onto something else.

Q. Once you’ve successfully communicated the vision, where do you begin to look for new opportunities for growth?

You’re not always right. I try to keep at least 10 things going. Some of them are not profitable at all, and some of them end up being profitable. It’s similar to a venture capitalist who’s looking to invest in 10 biotech companies knowing that only two of them are going to be successful. I look for which opportunity is throwing out the highest profit structure, and that’s the one I’m going to focus on.

You just accept risk as part of the game. You can’t mitigate it. There’s going to be losses, which is again why you want to be in a high-profit opportunity. If you’re a 1 to 2 percent wholesaler, you can’t afford risk. But if you’re making 200 to 300 percent profit, you can afford risk.

That’s my goal. I try to go into businesses that have high profit, so you’re allowed to make mistakes.

Q. What advice do you have for other leaders who are seeking opportunities to spur rapid growth?

Don’t give up. They’ll fall, they’ll falter, they’ll be plain wrong. Everything that can go wrong will go wrong. In fact, that’s what I tell my CFO: ‘If we’re not operating at the brink of disaster, we are not pushing hard enough.’ They have to accept that that is the way the business works.

This is what happens in a growth-oriented company. It’s very, very difficult. Absolutely do not give up, and when you stop growing is when things will settle down. <<

HOW TO REACH: HNP Pharmaceuticals, (800) 272-4767 or www.hnppharmaceuticals.com

Tuesday, 26 August 2008 20:00

Firing up the idea machine

When Bill Burke was appointed president of Fire-Dex LLC in 1996, he stepped into what he bluntly refers to as a terrible situation.

“When my former partner bought the business in 1983, he thought he was buying a low-cost, Southern factory; it was only Southern,” he says. “For 13 years, we went through plant manager turnover to the tune of one every other year. We went through rank-and-file production employees to the tune of 50 to 100 percent per year.”

Burke was no stranger to the problems plaguing the manufacturer of firefighting turnout gear before assuming the role. He had joined the company way back in 1983, which at the time contained a separate, more successful entity. In his time there, he soon realized that part of the problem was that Fire-Dex’s manufacturing plant and corporate headquarters were more than 600 miles apart. There was no way to effectively manage the company’s day-to-day operations, so in 1998, he moved the manufacturing portion from Rome, Ga., to its current location in Medina.

“Having everything under one roof was phenomenal for Fire-Dex,” he says. “We had top manager and ownership involvement on a daily basis.”

By being able to walk the factory floor five days a week, Burke began to notice subtle areas where small changes could yield big improvements. For example, he realized his sewing team wasted considerable minutes changing between different colored threads on its machines.

“We were using six different colors of thread to make these suits,” he says. “I was standing by a sewing machine, and I see all these thread colors everywhere. I see the sewing machine operators stopping to change thread. It takes a while, like 10 minutes to change over. I went to the customers, and I said, ‘You currently buy a red suit. Do you care if it’s sewn in red thread? Would black be OK, or white?’ And the customer said, ‘Yeah, black’s fine. Actually, black kind of looks cool.’ So we went to two colors.”

Though seemingly isolated at the time, Burke’s simple change started an avalanche of improvements that have since been harnessed in a formal system of suggestions called Opportunities For Improvement, or OFIs. The program allows employees to submit ideas that are immediately reviewed and, more than 70 percent of the time, implemented.

“If it’s a good idea, we’re going to implement it,” Burke says. “Instead of just having one guy thinking — the president and CEO — let’s have the whole fricking organization thinking.”

Fire-Dex has seen positive growth every year since the inception of the OFI system. Previously a break-even business, the company reported revenue of $10.3 million in 2004, its first year over the $10 million mark. Last year, that number jumped to just under $17 million.

Here’s how Burke boosted revenue by encouraging employees to think of opportunities for improvement.

Share the wealth

While Burke may have initiated it, the avalanche of OFIs didn’t continue on its thunderous rush without some additional prodding. A few ambitious employees did offer suggestions right off the bat, but the majority was far less enthusiastic.

It wasn’t until 1999, when Burke tied the program directly into Fire-Dex’s newly instilled profit-sharing plan, that it really took off.

“We said to the employees at about the middle of ’99, ‘We’re going to have profit sharing; in order for you to be eligible, you need to write up one OFI. That’s it,’” he says.

Participation increased in a predictably dramatic fashion after the announcement. Even though Burke now requires his 105 employees to fill out eight OFIs per year — one per quarter individually and one per quarter with their departmental team — there has still only been one instance in which an individual chose not to participate.

“Most of them are like, ‘How simple is that?’” he says.

Whether you offer profit sharing or a similar form of encouragement, Burke suggests keeping the submission process simple. At Fire-Dex, for example, an employee need only fill out a one-page form describing the opportunity and its root cause. The OFI is then turned in to one of two employees who spend a portion of their time reviewing them.

Though Burke says that devoting so many man-hours to the program is a considerable expense, he also says the benefits you’ll reap are well worth the investment.

“It’s clearly an investment,” he says. “Fire-Dex has a couple of people that spend a portion of their life on OFIs. It’s probably equivalent to half a person at 30 to 40 grand plus benefits, but I think it’s phenomenally invaluable.”

To help weed out the good ideas from the bad, Burke also suggests giving employees some guidelines before they’re even submitted for review. First, is the suggestion more of a complaint than an improvement? Second, does the suggestion provide a permanent benefit to a process, product, work group or environment? Finally, will your customers benefit from the suggestion?

Other than that, the only distinguishing criteria involves pay and benefits.

“The only thing you cannot do on the OFI is you cannot change pay or benefits,” Burke says. “You can’t say, ‘Pay us all a dollar more,’ or, ‘We need free health insurance.’”

Once a given OFI gets approved, most are passed to the supervisor who oversees the department in which the suggestion will be implemented.

“Most of them, I don’t even see,” Burke says. “They’re just implemented on their own from a supervisor level. I can’t see them all

because there are too damn many of them.”

The supervisor must then check in with the employee who first came up with the suggestion to make sure he or she fully understands it: “‘All right, I think I got it. What you’re saying is that if we got this size box versus the size we have today, then this would fit perfectly, and we would save a half a buck a box or whatever. Is that right?’ And the person says, ‘Yes. That’s exactly what I meant.’”

If a certain idea would prove too time-consuming or costly, it must instead be passed up to one of Burke’s direct reports, if not Burke himself, to get the go-ahead.

“Supervisors can do $500,” he says. “Their boss can do a grand. Any of my direct reports can do 10 grand. There’s a chain of command and a process for approving. Anything over 10 grand, I’ll sign.”

Implement and review

A few months ago, Burke began his day announcing implementation of a substantial OFI at a companywide meeting.

“This was a huge one,” he says. “The OFI was go to four 10 [hour work shifts per week.] The employees will save 20 percent on their gas costs and wear and tear on the cars, and the customers will still get 40 hours of production. On Friday, we will shut down the factory, turn off all the lights, turn off all the air conditioning, and the company will save some energy costs.”

Burke already knew that not everyone was happy with the potential change in work hours. Before making the announcement, he first had each department supervisor conduct a survey with his or her team members to gauge whether or not they’d be opposed to the change. Though 93 percent of employees were in favor of the idea, it still left 7 percent of people who weren’t.

“Of all of our employees in production, they can’t all do that,” Burke says. “It’s not great for everybody.”

When you embrace a culture of change, certain people will always be unhappy with a given decision. As Burke explains, “Change isn’t comfortable. Most people don’t like change. There’s no way that 100 percent of everybody will be happy.”

That doesn’t mean you should carelessly implement any change as you see fit. Burke says conducting an informal survey within departments is a great way to avoid large-scale opposition when enacting a major OFI. And as long as the majority of employees are for it, you shouldn’t hesitate.

“It’s going to change,” Burke says. “Embrace it. Plan on it. Bank on it.”

Once you implement an OFI, regardless of its size, you should always go back to review whether or not it’s producing the desired results.

“The supervisor’s responsible for verifying that 30 days after implementation, that it’s doing what it was supposed to do,” Burke says.

Train for change

Burke was walking through the factory floor one morning when he literally ran into an OFI: “I’m walking by the table, and I hit the table with my hip. One of the girls standing next to me says, ‘I hit that thing all the time.’ I say, ‘Why don’t you write up an OFI to have it cut down?’ She wrote it up, and just before I took this call, the maintenance department was cutting it. It’s so simple. It’s a shelf on top of a table, and the shelf is screwed in, and there’s no way to move it, but you can cut it. It’s just a wood shelf, so we just trimmed it. She’s been running into the damn thing for a year. That’s empowerment.”

Though opportunities for improvement abound, that doesn’t mean your employees are always going to recognize them. They need training, examples and a model to follow. Just as Burke pointed out that OFI to his employee on the factory floor, you will invariably need to help your own employees identify instances where change can lead to improvement.

When an employee first joins your team, Burke says the best way to bring them up to speed is providing a plethora of examples from both ends of the spectrum.

“‘Here’s a colossal OFI — one that took six months to implement and has sort of changed the whole chart of this big ship,’” he says. “‘Here’s one that was a very simple, common sense thing where we just turned it this way instead of this way, and it happened to save us 12 seconds.’”

To strengthen the habits of new and old employees alike, Burke holds a monthly OFI meeting in which he reviews changes and shares the top three suggestions.

“Every month, we have a companywide OFI meeting,” he says. “It’s a state of the business, how we’re doing, what’s happening. ‘Let’s deal with some OFIs. We got in 52 or whatever that number was. We implemented 40. Let me give you three examples of three great OFIs, and then I’m going to tell you the OFI of the month.’”

Though each of these practices will better enable your employees to identify opportunities for improvement at your own company, Burke says the best way to hone their skills is to personally review their suggestions one-on-one. “I personally hand out the profit-sharing checks,” he says. “I review with the employee the OFIs they’ve submitted. In some cases, I might talk to somebody, and they might not have had any OFIs implemented. It happens. I say, ‘What were you thinking? Explain it to me. I think you got something there. Maybe if you did it this way; what do you think of that?’”

The practice clearly entails a bit of extra work, but Burke says it’s all worth it. By walking your employees through the process, they’ll become the agents of change who will continuously improve your business.

“Make the employees the change agents,” he says. “Give them the forms to make the change happen. ‘You don’t like something? Write it up as an OFI. We’ll look at it. What don’t you like? Let’s see if there’s a way to do it better.’”

HOW TO REACH: Fire-Dex LLC, www.fire-dex.com or (330) 723-0000

Saturday, 26 July 2008 20:00

The straight story

As president and CEO of The Johnny Rockets Group Inc.,Lee Sanders doesn’t have to go very far to enjoy a meal in a retro-style diner steeped in an Americana motif.

The restaurant group he oversees houses 1,530 employees in 220 such locations around the globe, including 35 right in his Southern California backyard. Still, when it came time to take his management team out for dinner, he chose to take them to a competitor up the street instead.

“I found out that only one of us has ever really eaten there,” he says of the other chain. “We (went) there for dinner as a group as sort of a field trip.”

Besides giving them an opportunity to scope out the competition, Sanders says the outing gave his team a chance to have fun and build camaraderie that would lead to better communication back in the office.

Smart Business spoke with Sanders about how to cut through the bull to get honest feedback from your employees and how to walk new employees through the decision-making process.

Cut through the bull. As a president and CEO, one of the bigger challenges is determining if you’re getting the data you need or if you’re getting filtered data.

 

It’s pretty easy to deal with good news. The bad news? I need that really almost more than I need the good news.

[To get candid feedback], admit what you don’t know. In other words, if you don’t understand the functional area very well or if it’s something you’re not familiar with, ask questions. Make sure that you get all your questions answered from whoever is the topic expert. Don’t assume you know what you’re doing if you really don’t.

Make sure that the person who’s giving you the information has done their due diligence: ‘Where did you get this data? What makes you believe this is the case?’ Push back on them a bit.

[If you do that], you’re making the most well-informed decision you can make, and you’ve probably enrolled people to support your program.

Hire candid team members. Use team interviewing. Each person on the management team is going to interview this individual. If you go through that with the senior people, they tend to start identifying if the person is giving the politically correct answer versus the candid answer.

 

It can slow down the process, but at the senior level, time is not the most important. The quality of the candidate is probably the most important.

Ask, ‘What is your greatest failure in your current position? On the greatest failure, what would you do different?’ It’s an odd question, but it’s hard to make believe that if someone’s in a position for a while they haven’t had a few failures.

If someone says, ‘Well, I’ve never really had a failure. I’ve always succeeded,’ that’s possible, but it’s starting to sound a bit like rose-colored glasses.

Within that context, ‘Identify the greatest underachievement and failure, and why do you think that happened, or what would you do differently?’ If they say, ‘The other department didn’t support me correctly,’ it begins to show if they’re deflecting or they’re accepting the responsibility. Candid people will accept the responsibility.

Walk new hires through the decision-making process. When there’s a decision to be made, I say, ‘You’re going to need to decide the course of action here.’

 

Clearly let them know the business objective or the results expected: ‘You need to accomplish these things. You need to have an EBITDA of 10 percent on this’ — whatever it is.

‘If I were sitting there making this decision, this is what I would look at, this is who I would talk to, this is how I would structure it, and this is what I would make as my decision to do this. It doesn’t mean you have to, but this is how I would approach it.’

Then I would say, ‘You should go talk to these other constituents who are involved in this project. Maybe it’s your subordinates, maybe it’s your colleagues, maybe it’s a vendor, maybe it’s a guest, maybe it’s a customer. Try to enroll your constituents and get the support and guidance from those folks.’

Then I would say, ‘If you are completely comfortable and you know what to do and it’s going to be no issue, then go do it. If you’re not, come back, and we’ll go back through it to make sure it’s refined to a point where you feel comfortable and you can go away and execute.’

They see the options. They see how to attack the problem. I helped them to understand the implications that are beyond their functional area of control and helped them understand every option has pros and cons.

Protect your brand. First of all, you have to protect it. In other words, once you establish it, you need to make sure that the key elements are followed. You don’t want deviations in the field.

 

We have field people that are in the restaurants, and they do the typical site visits. When we find that they’re not following culture, we give them information and say, ‘Look, if you do this, this will improve your business.’

We don’t like to invoke the contract or, ‘This is the Rockets way’ as much as, ‘If you do this, your business will be enhanced. You need to do this because the guests really love it, and it will improve your business.’

The benefit ultimately is that their sales will be higher. The indirect benefit is it reinforces the brand and the culture.

HOW TO REACH: The Johnny Rockets Group Inc., (949) 643-6100 or www.johnnyrockets.com

Saturday, 26 July 2008 20:00

Man on a mission

During his second year at Transplace Inc., Tom Sanderson had a bit of an identity crisis. This shouldn’t surprise anyone who’s ever accepted one of his business cards. His titles of chairman, president and CEO show that he does wear a lot of hats at the logistics technology and service provider, but the crisis in question had nothing to do with his particular positions at all. It had everything to do with the position of the company as outlined in its mission statement.

“The mission statement didn’t really communicate what it is that we were in business to accomplish,” he says.

Written well before he joined the company in late 2003, the one-sentence statement combined a vague declaration of service with enough company-specific jargon to confuse anyone without a lengthy in-house tenure.

“That statement was just ineffective in so many ways,” Sanderson says. “Unless somebody works here, it’s not something that’s going to carry any broad meaning to a customer or to a potential investor.”

A company with broad name recognition may be able to sidestep a similar lapse in communication. But for most businesses, the mission statement is as important an identifier as the inside cover is to an unfamiliar book — it tells the reader who the company is and what it hopes to accomplish. If written with enough skill, it can also serve as a road map to guide the behavior of every employee in the organization.

“It takes your mind off of the challenges of the day to day and [makes you] think about where you are heading,” Sanderson says. “What is it you want to become?”

As he looked over the old statement, Sanderson realized it didn’t accomplish any of those things, so he sought the help of a trusted colleague and got to work. By the end of 2006, the duo had written a new mission statement from scratch, and Transplace’s gross revenue has since increased approximately 10 percent to more than $900 million in 2007.

Do your research first

Sanderson’s decision to nix the old mission statement didn’t happen overnight. He was at Transplace for approximately two-and-a-half years before he decided it was in need of an overhaul.

Similarly, he says you shouldn’t rush to make revisions. Before you even begin to brainstorm, you should engage in a few exercises to help determine whether or not your mission statement is in need of a tune-up.

First, Sanderson says to put it through the laugh test: “If you read it, do you start laughing? Do you say, ‘That’s not our company? What does that even mean?’”

Though Transplace’s old statement still makes him chuckle to this day, Sanderson isn’t suggesting an ill-fitting declaration should have you doubled over in laughter. Rather, is your mission statement so misguided that you shake your head incredulously every time you read it?

For a more objective exercise, Sanderson says you can review four key questions every mission statement should answer: Who are we? What do we do? For whom do we do it? Why do we do it?

“If you look at your mission statement in that context and it does-n’t lend any insight into those questions, then that’s a pretty good indication that you need to rework it,” he says.

But just because you need to rework it doesn’t mean you should immediately begin to do so. Sanderson says you should do a little research first.

“The first thing is probably to read a couple of articles on different perspectives,” he says. “Get some different perspectives on what makes a good mission statement and what’s a bad one.”

Consult examples in the process. Sanderson says a simple Google search will give you plenty of statements from companies both inside and outside of your industry. Seeing the final products of your competitors can prove especially useful. Use them as a point of comparison to differentiate your mission for potential customers.

Looking at those examples will also help you gauge an appropriate length. The last thing you want is to overwhelm constituents with a novella. A good mission statement should be short enough to remember but long enough to answer those four key questions.

“You can have a full-page or three-paragraph mission statement that tries to get to many of the fine points of all the type of services that you offer,” he says. “Try to keep it short enough that it will resonate with people, and they’ll remember it and the key aspects of it. If you write too much, you risk having people pick up on the wrong pieces of it as being the most important elements.”

Submit a draft for feedback

Sanderson and his colleague passed numerous drafts back and forth before finally settling on a four-sentence mission statement that answered those four key questions. As with any major initiative, having someone to bounce ideas off proved an invaluable resource in that initial phase — but it still wasn’t enough. Before christening it the definitive mission of Transplace, Sanderson sought that extra feedback to fill any gaps and get the necessary buy-in.

When you’re ready to submit your draft for review, take your pride out of the equation.

“Some people are afraid to put that statement out there and get the feedback because it might bruise their ego a little bit,” Sanderson says. “The focus has to be on how do we get a good statement out there. I can’t let my thin skin get in the way of a better product.”

The next step is to determine from whom to get that feedback. Sanderson first presented the draft to members of his leadership team.

“Once we had the rough draft, we distributed it in an e-mail to the leadership team and asked for their feedback in writing,” he says.

When you send your draft via e-mail, it gives your team members more time to process the concepts and the phrasing than they would have if you simply sprung it up on them in a meeting. In a similar vein, the e-mail format grants them more time to reflect over their own feedback, which should ultimately make it that much more insightful.

One thing you want to avoid in the process, Sanderson says, is distributing the mission statement to everyone in the company.

“It’s a fine line to balance,” he says of the 550 employees at Transplace. “You don’t want to have a culture where the CEO is a know-it-all and unopen to any suggestions. On the other hand, you don’t want to have a culture where the CEO isn’t willing to go out on a limb and say, ‘Here’s the direction we’re headed.’ It is the responsibility of the leadership team to state that direction and hopefully to have enough experience and wisdom to craft it in such a way that you’ve at least gotten most of the people on board. You’ve got to just think about the employees in entirety.”

That doesn’t mean you should only think about your employees though. Sanderson says your mission statement must also address customers.

“It’s important to help the customer understand what we’re striving to do,” he says. “It helps them understand whether we’re a good fit and someone that they would like to do business with.”

As such, it makes sense to also look to customers for feedback. Identify some of your top clients — those people who you’ve been doing business with for years — and call to ask for their opinions.

“Call a customer and say, ‘I’m working on this mission statement; I’d really value your input,’” Sanderson says. “If you’re a valued supplier of theirs, they’re going to stop what they’re doing, and they’re going to take a little bit of time and have a conversation about that.”

Once you get a customer on the phone, he says to avoid a word-by-word read through. On the other hand, don’t ask for overgeneralized input.

“It’s too broad a topic to just call and ask them, ‘What do you think our mission should be?’” he says. “You invite criticism in that sense: ‘Wait a minute. Don’t you know what your mission is?’”

Sanderson says to talk about the key concepts you’ve developed instead. Customers will not only help you determine if they reflect an accurate representation of your organization. They’ll also help you sift through the kind of company-specific jargon that plagued Transplace’s mission statement in the first place.

“It makes more sense before you cast it in concrete and get it posted out on the Internet to get a gauge of how someone who’s not walking in your shoes is going to interpret that message.”

Display it for all to see

After Sanderson received responses from everyone on his leadership team and after he called each of his top customers, he was finally ready to sit down and polish the draft. He had enough confidence in his and his colleague’s writing abilities, so the pair simply spun it out together.

If the art of prose is a craft beyond your comprehension, Sanderson says not to fret. Look to a peer for help.

“What you need to think of is who has good written communication skills in your company,” he says. “Look to an outside colleague. Maybe it’s a faculty member at a university, or maybe it’s a boss you had in a former job, or maybe it’s an administrative assistant you had in a former job.”

Once they help you produce a final draft, the only thing left to do is share it for all to see. Sanderson suggests using multiple channels of communication when doing so. At Transplace, he shared it at his monthly teleconference call with the entire company. He published it on both the company’s intranet and the Internet. He even put it on a business card with the company’s annual goals and then distributed it to employees so they would have a copy on hand at all times.

Despite this multilatitudinal barrage, Sanderson says to avoid sensational proclamations of the dawning of a new age.

“You have to be a little cautious about overplaying it,” he says. “It’s absolutely important to what you’re doing, but it doesn’t mean that the day that, that comes out, the company is suddenly a new company.”

Sanderson says that approach would not only send mixed signals to employees, but it also may prove confusing to customers, as well. When it comes to these external constituents, it’s best to share the new mission statement throughout the course of your normal interactions. Include it in PowerPoint presentations. Display it prominently on the Internet. Include it in your business reviews. Just don’t hit them over the heads with it like a sledgehammer. If the mission statement is strong enough, you won’t need to force it down the throats of your constituents. Those three or four carefully crafted sentences will do most of the work for you.

That was certainly the case at Transplace, where Sanderson heard immediate feedback from his employees.

“The employees certainly felt it was much more meaningful that what it replaced,” he says. “There was a lot of positive feedback that, ‘It makes more sense to me as an employee. It makes more sense to our customers. It’s easier to talk about.’”

By conducting a little research, seeking the appropriate feedback and communicating it effectively, your mission statement should produce the same results for you. What’s more, it will serve as a guide for your company for years to come.

“You have to think about what’s right for your own situation, for your own company, for your own employee base and leadership team,” Sanderson says. “A well-crafted statement should stand the test of time. Everyone in the company will understand at a very basic level why the company is in business and what their activities should be focused toward accomplishing.”

HOW TO REACH: Transplace Inc., (888) 445-9425 or www.transplace.com

Wednesday, 25 June 2008 20:00

Talent agent

When Adam Miller delegates a task, he’s not handing away allresponsibility. As founder, president and CEO of Cornerstone OnDemand Inc., he believes that the onus is also on him to track performance and provide help when needed.

“The real objective of performance management is not to punish employees,” Miller says. “It’s to make people more productive and to help them do better in their careers.”

The task is something of a specialty at Cornerstone, which produces talent management software for companies across the globe. As a business philosophy, it’s also helped Miller lead the 145-employee company from 2003 revenue of $2.5 million to 2006 revenue of $6.7 million.

Smart Business spoke with Miller about how to get the most out of employees and how to gauge potential by using a tic-tac-toe-style grid.

Q. How do you get the most out of your employees?

Make sure that your employees respect you and you respect them. Give them the responsibility they earn or deserve, and monitor their progress to make sure they’re able to do what you’ve asked them to do.

In other words, give them enough rope but not too much.

Q. How do you find that balance?

One way is to have clear targets and objectives and to have some key metrics to monitor those objectives. In other words, don’t wait until the end of whatever time frame you gave them to determine whether they achieved or failed on that objective.

Have some milestones or metrics that you’re tracking along the way to make sure that they’re on track. If they go off track, step in or help remediate by giving them either more resources, more coaching or more help.

Q. How do you set those milestones?

In sales, it tends to primarily focus on revenue objectives. In other departments, it might be focused on specific objectives given to the employee by their manager that could be very finite. For somebody (in public relations), it might be to set up X number of press interviews or put out X number of press releases.

For other employees, such as in the tech area, we will have specific projects with due dates.

Those objectives should be set at whatever frequency makes sense for that particular position or that particular company. ... They should be reviewed not once a year but on an ongoing basis ... with the idea that if somebody is off track, you have the ability to proactively get them back on track.

Q. How else do milestones benefit employees?

People usually leave for one of two reasons. They feel like they weren’t developing in their career: ... The other reason is they weren’t communicating well with their manager: ‘I don’t see eye to eye with my manager. My manager was critical. My manager wasn’t supportive.’

Often, both of those things can be resolved by having better alignment of what the goals of the employee are and the goals of the manager are. If both the employee and the manager understand what the goals are and have clear expectations on success and failure, No. 1, you’ll automatically have better communication because you’re talking about the same thing. No. 2, to the extent you are performing, you’ll often get more responsibility and more direction and more support, which also leads to better career development.

Q. Are those milestones only meant to track performance?

Often, you can have a high-potential employee that’s simply in the wrong position. If they were either moved or developed — in other words, they got more training for what they’re doing — they would be a top performer.

Tracking potential is at least as important as tracking performance. A good manager ... is best at figuring out who’s performing well but also who has high potential and how to extract that potential from that employee, which also helps the employee because it means the employee is getting more responsibility in a job they tend to like more.

Q. How do you identify potential?

One way is to consider that employee relative to other employees at similar levels in the company and also relative to what you think the career progression might be. For example, could you picture that employee being a manager in a year, two years, five years?

There is some overlap between performance and potential. You can imagine almost a tic-tac-toe board. On one axis, there’s performance. On the other axis there’s potential. You take your team and you plot them in the graph. High-performance, high-potential in the top right; low-performance, low-potential in the bottom left; and everybody else is in between. That often tells you exactly what you need to do.

[If you fail to identify potential,] those are the employees that leave that you didn’t want to leave. It goes back to that lack of communication between the employee and manager.

HOW TO REACH: Cornerstone OnDemand Inc., (888) 365-2763 or www.cornerstoneondemand.com

Wednesday, 25 June 2008 20:00

The man with no title

When Mark Schwartz hands you his business card, you’re not going to find his title of CEO on it.

The same goes for his 100 employees at Product Development Technologies Inc.

Those missing qualifiers aren’t the result of a printer mishap. Instead, they represent a deliberate departure from the title-chasing political undercurrents that plague much of corporate America.

“We have a check-your-ego-at-the-door, flat hierarchy here,” Schwartz says.

That philosophy has paid off in big results at the product development firm that Schwartz co-founded in 1995, as revenue has jumped from $8 million in 2004 to more than $13 million in 2007.

Smart Business spoke with Schwartz about how to promote a flat structure by rotating roles without sacrificing the talents of natural-born leaders.

Q. How do you gain trust?

One way that people trust you more is when you don’t wear your title on a sleeve. We don’t have titles on our business cards.

You asked me what my official title was, and I told you, but I don’t have that on my business card. We try to keep everything on a level playing field.

Q. How do you maintain a flat hierarchy when certain employees are leading projects?

The way you do that is to turn over a lot of projects. You’re going to find yourself the head of one and the subordinate on another. You quickly learn that what goes around comes around just by the simple fact that you’re going to get the opportunity to lead, and you’re going to have the opportunity to be a team member. It just inherently builds in a structure of fairness.

If you’re assigned this project, you run it like a business. You run it so it’s per the budget, per the deliverables, per the quote. You manage the customer relationship. You manage the resources. You can be the head of a project and have two years of experience and be telling a guy with 15 what to do.

You may have a team that’s helping you, or you may be doing the work yourself. You’re not being told what to do.

It’s great when the employees feel a sense of ownership in the company. It gives them a sense of accomplishment and puts a spring in their step. It makes them enjoy their job.

Q. Some people naturally make better leaders. Do you take that into account when you rotate and put different people in charge?

What ends up happening is that the guys that are the most diverse, most experienced and best leaders end up leading the bigger projects. We might have a project that’s $500,000 that will tend to be one of those guys. But then you’ll turn around and have a $100,000 project that someone else might lead, and (the natural leader) will roll up his sleeves and be helping out.

I feel like I have 50 years of experience. That’s because you’re doing stuff at such a rapid pace so early, you’re really pushing your boundaries all the time. You get exposed to so much.

Q. How do you hold employees accountable when they’re leading a project?

You have to have some sort of central, enterprisewide tracking system. Everyone can access it from anywhere: from home, from a hotel room, from wherever you are.

It’s not something that allows us to micromanage someone. They track themselves. In other words, if someone is hanging themselves and you’re giving them too much rope, it becomes obvious to everyone. It’s not, ‘You’re not being fair to me. You’re not giving me big projects.’ You say, ‘No, it had become obvious at this point that maybe you can’t handle those bigger projects, and everyone’s on the same page.’

The measurement system is so public that everyone will be agreeing to it. It’s not unlike someone batting third and realizing, ‘I’m only batting .225. I should be moving down in the order to bat eighth. I realize that now.’

Q. How does such autonomy benefit employees?

There’s the old saying, ‘Give someone a lot of rope. They can either do good things with it or they can hang themselves.’ We inherently trust that people are going to take the ball and run with it and do a good job. We have systems in place to make sure that’s happening, but then someone doesn’t feel like they’re being micromanaged.

When you trust someone, people rise to the occasion to live up to that trust. That’s healthy.

A huge benefit is particularly to the youngsters. There are people with less experience. They get a taste of running something way before they would ever even touch it at corporate America. When I was at (another company), young guys would come in and they would work three, four, five years, and they would be lucky if they designed the case of a battery.

We’ve got guys here doing the whole cell phone — not right out of school, but pretty quickly they’re doing stuff way beyond their years.

HOW TO REACH: Product Development Technologies Inc., (312) 440-9404 or www.pdt.com


Monday, 26 May 2008 20:00

Leading with value

How do you align the viewpoints of 39,267 people toward a common goal? Ask Michael Drake, and he’ll tell you it all comes down to values.

In 2005, when he took over as chancellor of the University of California, Irvine — the third-largest employer in Orange County, with an annual budget of $1.5 billion — he realized he couldn’t just dictate his vision of the school to its 27,000 students and 12,267 faculty and staff. Instead, by using feedback from university constituents and by looking back on the values that had served him previously, he developed a set of core values to guide his decision-making.

By creating a description of the ideal person who would encompass the essence of the university, Drake settled on a number of values to present to key stakeholders in speeches and during meetings. He then gauged their reactions, made modifications and, with his management team, identified the seven values that have since guided the campus community.

Smart Business spoke with Drake about how to define the labels for your organization’s values and why you should wear them like an old suit.

Get feedback. It’s always important to elicit feedback for a couple of reasons. One, none of us knows everything. You can always learn more from others.

Sometimes, the way that you or I might describe something makes sense to us, but it does-n’t translate well to other people you’re speaking with. You can develop these values in a quiet, meditative space, but you have to take them on the road in speeches or in meetings or in other things.

At my first freshman convocation, I used these as themes, and then I would hear and feel how they would resonate with the audience or help us with the message or describe the kinds of behaviors that we were interested in.

Getting feedback from people you work with on which ones are very helpful, which ones are useful, which ones work, and places where you have to modify those things are critically important.

We did that at the beginning and refined and modified things. These are not the laws of the universe. One needs to feel free to add or subtract or modify or tune as you learn more or as you evolve forward. You want to be consistent and be true to the values, but they’re not rigid, immutable laws that couldn’t be improved.

Wear your values like an old suit. A professor of mine years ago quoted someone that said, ‘You should wear your traditions like an old suit of clothes rather than like a suit of armor.’

That means you want to be consistent, you want to understand where you’re coming from, you want to continue on that pathway, but you don’t want to be so rigid that you continue on the pathway even if it leads you in the wrong direction.

The more carefully worked out and the more thoroughly vetted the values are, the less frequently you would need to change them. If you find that you’re changing your values frequently, you really don’t have the right ones. They really ought to guide you rather than you guiding them.

I always want to hold out the potential for improving or refining or learning. We haven’t really changed ours much. That’s the way they should be.

We’ll have an issue that would come up, and I would say, ‘OK, if the values are right, then I ought to be able to take the values, apply them to this particular issue, and it should fit.’

Over and over again, I found that I didn’t have to change or modify or eliminate or add values. We just needed to make sure that we stayed true to the ones that we had already emphasized. That really helped us get through those situations. It was kind of reinforcing over and over again. Then, if we had things that weren’t working so well, it’s worked to kind of go back and say, ‘Where did we deviate, or how could we have followed the values more accurately?’

Don’t get too specific when labeling. You can use lots of different words to describe what might fit into a particular category.

We collapsed synonyms, so that the values are categorical. We have integrity or veracity or honesty — those are all sort of wrapped into one category of telling the truth. We have empathy and compassion and sensitivity, and those are wrapped into the one that we call empathy.

We would get different words that described one category of value, and we just settled on a word that exemplified that category of behaviors, rather than be too nitpicky about using every single word that might be a synonym.

That helps as well to sort of think of them as zones. Respect, for example, is a zonal term rather than a precise, specific thing. It’s a series of ways to behave and be feeling.

Let the values guide your behavior. One of the things about the values is that they ought to guide the behavior of the leader.

The leader ought to exemplify those values in a way that he or she conducts business in the enterprise and the way that people are rewarded in the enterprise, and the way that people are counseled or redirected in the enterprise. They need to be living, guiding principles that work for you. The leader has to be the best exemplar of them. You can’t say, ‘I value appreciation and tolerance,’ and be intolerant at all.

The values really have to be your guiding principles as you use them to help you guide the organization.

HOW TO REACH: University of California, Irvine, (949) 824-5011 or www.uci.edu