Business owners need to be aware of the tax implications of recent federal legislation, including President Obama’s extension of former President Bush’s tax cuts and changes to the estate tax exemption.

“There are a lot of potential advantages on the plate, but there are also a lot of unknowns,” says Mona Sarkar, J.D. MTax, a Vice President, Client Advisor and Wealth Team Manager for FirstMerit Bank. “Some things have changed and some have stayed the same.”

Smart Business spoke with Sarkar about how to prepare for the implications.

What has changed and what has stayed the same?

On one hand, the new legislation extended tax cuts with regard to dividends, capital gains and rates on ordinary income, for another two years — through the end of 2012. On the other, the estate tax situation was modified.

Over the past  decade, the estate tax had an increasing exemption amount, which peaked in 2009 at $3.5 million, with a maximum tax rate of 45 percent. In 2010, there was no federal estate tax. Legislators then passed a $5 million exemption and a maximum estate tax rate of 35 percent for 2011 and 2012. In addition, the lifetime gift-giving exemption was capped at $1 million, while the estate tax exemption continued to increase.

Now, the new estate tax exemption and the gift tax exemption are the same. Someone can pass away with an estate of $5 million and pass federal estate tax-free to beneficiaries, or they could literally give away $5 million of assets during their lifetime and pay no gift tax. It’s an either/or for the next two years.

The real question now is will the higher estate tax exemption be made permanent or will it revert to lower previous levels? As a result, you have a two-year window of advantages capped with uncertainty.

What should businesses expect over the next two years?

There is a drumbeat of concern about taxes wiping out a lifetime’s worth of building a business. The people pushing to make the estate tax exemption permanent say it will save the American small business.

Small business owners are saying ‘If my spouse and I each have a $5 million exemption, that will ensure our business passes on to the next generation without having to be sold to pay taxes.’ I expect there will be an attempt to make it permanent prior to the national election in 2012.

What do business owners need to know about the changes in the estate tax exemption?

There are business owners with a succession plan in place, who have already given away $1 million of stock in their business, but were kept from giving any more because they would be paying out-of-pocket on gift taxes.

Now, they have the opportunity to re-examine their plan. They’re able to make larger gifts or pass the business down to the next generation, without extraneous tax penalties.

Most estate planners are educating their clients as to what’s currently possible in the given environment. Our job is to be sure the consumer is educated as to the possibilities, so they’re able to make an informed decision Not everything in life can be driven by taxes, but it’s important to be aware of the tax situation.

As we get closer to the end of 2012, push will come to shove. Depending on whether lawmakers are considering making the changes permanent or if they are facing pushback, people will either sit back or there will be a race to accomplish major gifts in the last quarter of 2012.

How should existing estate plans be handled?

People should look at the documents they have in place, just to make sure that if something were to happen between now and 2012, or if in fact the new exemptions became permanent, their estate plan still works the way it’s intended.

While the documents fit at the time they were created, the current estate tax situation could turn that plan into a mess if it isn’t managed carefully.

If you have a document that is more than five years old, we recommend talking to your attorney to find out if it still works. Many factors can impact an estate plan: premarital agreements in the case of second marriages or children from previous marriages, etc. So when there are major changes in exemption amounts, like we’ve seen this year, it’s critical to examine your plan to make sure it still works.

While you may not want to engage in any major gift-giving now, you still have to make sure that if something happened to you tomorrow,  you would still get the right result.

It’s a two-sided coin — on one hand it could impact your plan if you do nothing, and on the other hand, are there advantages you should take because of the exemption?

What other tax implications should businesses consider?

The income tax part of it simply extended the tax cuts that were already in place in terms of dividends, capital gains and ordinary income  rates overall. To the extent that those were allowed to expire, you would have higher income taxes paid on dividends and capital gains and higher overall income tax brackets for ordinary income.

In terms of real actual revenue dollars, the estate tax is not a big item in the federal budget. Income taxes, capital gains taxes, and taxes on dividends are a much bigger concrete number. While they are not as high in any given situation, there are more people paying them.

Also, for anyone inheriting from an estate or beneficiary of estate for someone who passed away in 2010, there are elections that can be made. Talk to your attorney about it.

Mona Sarkar, J.D. MTax, is a Vice President, Client Advisor and Wealth Team Manager for FirstMerit Bank. Reach her at 1-888-384-6388 or

Published in Chicago

In his latest Smart Connection video, Joe Takash, the president of Victory Consulting, discusses building breakthrough business relationships.

If you have to work with people in any capacity — whether you actually like people or not — you are in the relationship business first. Takash highlights three key components for building breakthrough business relationships.

1.  Attitude and passion

2.  Engaging

3.  Recognition

Watch the video in its entirety here.

Joe Takash is the president of Victory Consulting, a Chicago-based executive and organizational development firm. He advises clients on leadership strategies and has helped executives prepare for $3 billion worth of sales presentations. He is a keynote speaker for executive retreats, sales meetings and management conferences and has appeared in numerous media outlets. Learn more at

Published in Chicago

Yoh Services was a boutique shop in a bind.

Nearly three years ago, when Lori Schultz joined Yoh Services LLC as its president, the company was enduring the hardships of the recession, like just about every business in America. But the work force solutions company — a 5,200-employee subsidiary of Day & Zimmerman — was dealing with another layer of inefficiency on top of the recession’s effects.

“Yoh had 12 different brands, operating very fragmented out into the service delivery model,” Schultz says. “We were operating very much in a boutique fashion. So, for example, IT ran separate, engineering ran separate, health care ran separate. They all ran under separate leadership, no synergies between any of the groups.”

It was a model that had worked at one time, but the market started changing in the first years of the new millennium, and the recession accelerated the pace of change to warp speed.

“The boutique model was very much a model that made sense in the ’90s, with higher margins and delivery service to the client,” Schultz says. “However, a lot of the transformation in our business really led to having more bundled services, more streamlined. Specialization still existed, but you still had a very streamlined delivery model to clients.”

Schultz had to spearhead an effort to consolidate Yoh from 12 specialized brands to one full-service brand containing a number of product and service offerings. Conceptually, it all made sense. In practice, it wasn’t nearly as clean of a transition. Schultz and her leadership team had to convince 5,200 people that the old system was outdated, the new system was the way of the future, and the time was right to make the change.

“That was the biggest challenge on my plate,” she says. “To get the buy-in at the management level, make sure we had the right teams in place, and that this was something that we had to do; then, to take that and get buy-in throughout the whole organization.”

Learn the process

Before Schultz could change anything, she needed to understand how Yoh’s system worked — or didn’t work. She needed to understand the inconsistencies and inefficiencies in the boutique operating system in order to sit down with her management team and build a system that better addressed the needs of the current marketplace.

Gaining that understanding meant getting out of the office. Schultz traveled throughout Yoh’s footprint, talking with associates and gaining a better knowledge of the company’s product and service delivery model to its clients.

“I needed to understand some of the unique challenges our people in the field faced,” Schultz says. “That was step one.”

The second step was to identify areas in which Yoh could build synergies among various operating entities. To comprehend that, she needed to develop relationships with the managers leading the various operating units.

“Part of the dynamics is making sure I have the right leadership team in place,” she says. “I can’t get this done without having the right leadership team in place. As all of this transformation is happening at the same time, I’m looking at my leadership team, making changes in some cases, and in other cases, bringing in new talent from the outside.”

Schultz needed a leadership team with excellent communication skills and complete buy-in with the new company direction, and she needed the entire leadership team in place, empowered and on board before anyone at Yoh corporate headquarters could even think about rolling out the new vision to the company at large.

Lead your leadership

Schultz didn’t change the composition of her leadership team all that much. But she did make major changes to how the people in place operated.

“The key was really spending some time with them and learning, No. 1, what their level of competency was, and then where they had been with the company, then how they fit into the new direction of the organization,” Schultz says. “We got a lot of feedback from them, too, about their history and what they wanted in terms of a future.”

As Schultz spoke to her leaders, she began to form an idea of how her leadership team could be constructed to provide the best possible leadership framework for the reconstructed Yoh organization.

“With some of our leaders, we made some dramatic changes to their existing roles,” she says. “We needed to put them in a role that I felt best suited them for the new organization. At the same time, we still left some of the team in their existing roles.”

The alterations to the leadership team cascaded down to the field leadership, where the dynamics needed to change in order to better respond to client needs in a comprehensive fashion.

“In the field, we made major changes because we were a very strong delivery model organization,” Schultz says. “We were very good at serving our clients, but we were not a sales organization. So we had to change the dynamic in terms of delivery and sales. We brought in new people to serve in some of those roles. The result, and what I have today, is a kind of hybrid leadership team. I have a mix of existing people who were here when I joined Yoh and some new talent as well. I would say it’s about a 50-50 mix now.”

With a blend of new and established leaders, Schultz faced another challenge: developing cohesion among leaders who were either used to the old way of doing things or completely unfamiliar with the internal workings of Yoh. It was a battle that Schultz had to fight simultaneously on two fronts.

“Getting the new people engaged in the new vision and strategy is easy, because they came to work for you because of that very reason,” Schultz says. “You lay out the strategy, vision and direction, and that is why they come to work for you.

“The biggest challenge was really changing the direction of my existing team, because for about a year, we really had to oversee a change management issue. When you change an organization, you really blow it up and start from scratch. You are changing everything about the direction of the organization, and if you have an existing team, you need to get buy-in regardless of what you do.”

With an existing team that has to be convinced that the new way of doing business is going to be better than the old way, getting them to a point where they completely accept the new direction and mesh with new team members is a process governed by time. It takes communication, persuasion and patience to get your existing team members on board.

“Change management takes time,” Schultz says. “You have to really recognize that some of your people need more time from you to really understand the vision and the direction. You need to listen to them, listen to how they feel about being a part of a new direction.

“Then you need to be able to continuously communicate where we’re going and what is in it for them. Even then, you end up having people who revert back to the old way, and you have to come back and try to refocus them on the future and what is in front of them, not what is in the past.”

If you encounter reluctant adopters, the level of patience you show with them will likely be in direct proportion to their importance to the organization. But if a person has been in a significant role for a long time and is well-known and respected throughout the company, the extra effort will be worth it.

“If you think this is going to be a leader who is vital to the future of your organization, then you’re going to need to spend the time because it is a trust situation,” Schultz says. “If you’re coming in as a new president or CEO, and the person has been in the organization, say, 17 years, you need to build that relationship and trust. If you’re in that person’s position, trust is a difficult thing to have when a new leader is coming in and doing all these transformational things.

“You need to remember that it’s not just about you talking to them and trying to get them over the fence. You need to understand where they are coming from, too. It will benefit everyone if you can build that trust because the information they can provide to you with regard to history is important.”

Roll it out

Once Schultz developed a satisfactory level of cohesion among the leaders at Yoh, she then had to turn her attention to rolling out the new direction to the company at large.

When dealing with thousands of employees, you can’t concern yourself with the adoption of the plan by every individual. What you want is to hit for the highest possible average.

Schultz attempted to improve her batting stats by holding companywide calls to brief all employees on the progress of the transition.

“I would use those calls to communicate the direction and the vision, and how it impacted them,” Schultz says. “Moving forward, I’ve found that also has to be carried through on a quarterly basis. If you don’t continue to carry that message to the leadership team, it starts to lose a lot of value.”

Yoh’s training modules also became important buy-in tools to use on the company at large. The leadership staff at corporate headquarters initially went through a 3.5-day training session that covered the future strategic direction of the company, along with breakout sessions on the company’s new business models. From there, management worked together to build training programs for the company at large.

Though the training process is going to depend largely on the type of organization you want to build, Schultz says there is almost always a need to implement some form of a cascading training program that successively engages each level of the organization.

“It does depend a lot on where you are financially as an organization, but if you are starting with a flat organization as we were, you have to look at the leader and the people who are doing really well to put together a committee to build some of the training programs for you. Then, you look to execute and implement the training.”

Any time you can implement training in a peer-to-peer format, it’s another way you can help the buy-in process when training for a new organizational direction.

“That is one of the reasons that I think we had the most buy-in,” Schultz says. “In a lot of cases, the training was done by peer groups, and people who are recognized throughout the organization as having excelled in the field in which they are training. It was really about training that was more reality-based versus training that was more or less fluff. We were able to leverage relationships that already existed in the organization and roll it out regionally, versus having to spend a lot of money on having a few people travel everywhere and do all the training.

“The key is, if you want to do something like this, it is all built internally and rolled out through internal processes.”

How to reach: Yoh Services LLC, (215) 656-2650 or

The Schultz file

Education: Psychology and business degrees from California State University, Northridge

Previous position: Senior vice president for Ajilon Consulting and for Adecco’s Engineering & Technical and Medical & Science divisions for the western U.S., responsible for overseeing all field sales and operations and developing and executing new growth strategies to sustain and increase revenue within both lines of business.

What is the best business lesson you’ve learned?

The best lesson I’ve learned is that when you come into a new organization, you want to come in and make an impact quickly, and have success quickly. But you also want to do a reality check and make sure that you’re not outpacing the rest of your team as you’re trying to get things done. Because then, you might not be listening as much as you should as you’re just trying to keep up. At times, you need to maybe slow down and recalibrate your expectations a bit.

What is your definition of success?

To get genuinely excited about contributing. I think excitement drives your success. And when that happens, you can spread the excitement around and find other people who want to contribute and want to be heard. That means success for the entire company.

Published in Philadelphia

Forget the rabbits. Hunt the big game.

The one-time advice of a colleague has become a guiding philosophy for Andrew Littlefair in his role as president and CEO of Clean Energy Fuels Corp., a company that is trying to turn natural gas into the commercial vehicle fuel of the future. But to make a real impact in an emerging industry, Littlefair has needed to thing big — he’s needed big thinkers, big goals and big customers to raise the profile of his business.

In short, he’s needed to hunt for elephants.

“One of the best pieces of advice I ever got was “You guys need to be hunting for elephants,” Littlefair says. “Don’t chase rabbits. That is why we needed to develop a good understanding of what our value proposition is to our customers. We needed to focus on fleets, and fleets that use a lot of fuel, so we really tried to carefully design around those markets. Then, we have stayed laser focused on going after those. We focus on airports and vehicles that operate out of airports, refuse trucks, transit buses, and now heavy duty trucks.”

To continually hunt for elephants, Littlefair needs to reinforce what Clean Energy is as a company, who the company serves and where the company needs to go in the future. Then he needs to enable his people to achieve those goals. With Littlefair’s philosophy as a main driving force, Clean Energy has risen from $91 million in 2006 revenue to $211 million in 2010 revenue.

“Ultimately, we’re faced not only with running a business, but also creating an industry,” Littlefair says. “That is kind of a significant, ongoing and important challenge that we face. Moving people to a new fuel has all sorts of new stuff associated with it. It’s easier today than it has been in the past, but it has been a challenge and it will continue to be a challenge that keeps us on our toes.”

Find your customers

Most leafy plants grow toward a light source. Your business, in that sense, really isn’t that much different from the potted plants on your windowsills at home. Your light source is the revenue provided by your customers. Where the most revenue can be generated is almost certainly where you’ll grow your business.

About a decade ago, Clean Energy scored one of its biggest and longest-standing contracts with Waste Management. At the time, there was a governmental push to reduce emissions from city service vehicles throughout Southern California. Littlefair and his staff saw an opportunity to convert diesel garbage haulers to natural gas. Waste Management was among the first sanitation companies in the region to hop aboard the natural gas bandwagon.

It was an ambitious project for company that was just entering the space, but it was a critical win for Littlefair and his team, and taught the leaders at Clean Energy a great deal about retaining a major client.

“We really didn’t have the right product at the time, so we worked with a company that was doing vehicle conversions, and we went out and got the grant money to pay for the conversion of their diesel trucks to natural gas,” Littlefair says. “Then we went out and built a station on Waste Management’s property to dispense fuel, and worked out a long term fueling contract. That started out 10 years ago with seven trucks, business has changed a little bit over time, and today we now have a national operation and management agreement with Waste Management. We work very closely with them on building their stations, even providing the equipment and doing the maintenance.”

But getting from converting the first garbage trucks to natural gas to maintaining a longstanding and strong relationship with Waste Management was a process that took years. It took a great deal of listening, adjusting and Littlefair doing whatever it took to continue to build the relationship.

“Early on in the business, utilities were involved, and they built stations,” he says. “But it was sort of a ‘build it and they will come’ theory. There were no natural gas vehicles out there to speak of, so it was sort of like building a station and looking for a needle in a haystack. So what we did was really start to analyze the markets, figured out what we really wanted, and started to identify customers that had what we wanted. We wanted companies with a lot of vehicles, and vehicles that used a lot of fuel, and preferably vehicles that operated as return-to-base vehicles, where they always came back to a central area for refueling and maintenance.”

Over time, Littlefair and his team began to identify the customers that met those criteria, including Waste Management, and began to reach out to them. Reaching out, in this case, means doing research and gaining a deep understanding of what the customer needs.

In Clean Energy’s case, Littlefair even hired a former Waste Management senior manager as a member of his executive team.

“I ended up hiring a senior guy from Waste Management as a vice president because he knew the refuse business and he spoke the lingo,” Littlefair says. “You always have to be talking to the customer, listening to the customer, and doing whatever you can to understand how you can best serve the customer. That is how you develop the strategy for how you are going to serve the market. In our case, and in the case of many businesses, you put a lot of that connection in the hands of your sales team. You listen to them, you empower them and you motivate them. You still lead them, but they’re your ears and eyes in the field, so you delegate that customer interaction to them and hold them responsible, because you as the leader can’t do it all.”

Develop discipline

Listening to your customers is a great start. Defining the goals of your business, and rallying your people around those goals, is essential to long-term growth. But none of those initial steps will mean anything if the seeds you planted don’t take root.

Your vision grows roots through discipline. You need to execute each day on the systems and processes you have put into place, which are aimed at allowing your company to achieve the goals that you and your leadership team have set.

It’s a maintenance task that every business head has to perform. If you aren’t setting the tone from your position, you can’t expect others to maintain the course you have set for the company.

“I’d say ‘discipline’ is the right term,” Littlefair says. “You just have to stay disciplined. I’m a pretty good motivator and leader, and a pretty good communicator, so we’re always trying to make sure that we’re doing things to ensure that we all stay on the same page. Businesses change, we add and we adapt, but you still want to make sure everybody is with you and all on the same mission. That is all really key.”

A big part of communicating and reinforcing goals is measurement. Littlefair says the long-held business belief that an ability to measure something equals an ability to manage it is still correct. The nature of how you measure and what you measure might change over time, but the need to quantify results is always present.

“How do you develop the discipline? Part of it is you need to measure you success, take stock of where are and whether you are doing well enough or not,” Littlefair says. “You had better know what you are aiming for and you had better set some goals to get there. Sometimes, I get criticism from within the company that I set goals too high. But I feel like you need to set goals that are a reach to obtain. Anybody can hit a low goal. I want to keep the organization striving for something outside their reach.”

Ambitious goals do prevent a treadmill mindset from taking hold, in which your employees become complacent and content to do the same job at the same level of competency every day. That is a recipe for stalled growth, backsliding and getting left in the dust by your competition.

But you still need to find the sweet spot between ambitious and unattainable. If you set goals that are too far beyond the capabilities of your people, you’ll overburden them, stress levels throughout the company will rise sharply, and the overall effect will be damaging to your collective morale.

It’s a tightrope that Littlefair has repeatedly walked as he continually tries to serve the needs of bigger and more demanding customers, while still staying within the capabilities of his team.

“It’s harder for me, because I am a sales-oriented individual,” he says. “I do have to check myself on that. If you set goals that are too far out of reach, the goal no longer becomes significant because you can’t attain it. What I’ve found over the years is that the organization counterbalances. If there is somebody in the organization who is too optimistic, there is somebody else who is more realistic. Any good leader is going to have to end up balancing that. You listen and take into consideration the various points of view. Not that you’re going to run your business by committee, but you can take the information from your management team, and that ends up being pretty important as you finalize your goals.”

Finding that balance as a leader is not an exact science. A great deal of balancing aggressive optimism with pragmatic realism comes from knowing the people in your organization, the customers you serve and the conditions of the market.

“There isn’t a recipe, but that is what you need to do,” Littlefair says. “You need to have an optimistic viewpoint. Sometimes being too realistic is too pessimistic. So I think a good leader takes all these inputs and puts them into place, and work that out. And you don’t do it in a vacuum, you get a lot of that from your company and from the people who work with you.”

Ultimately, growing your business and broaching new markets takes vision and a willingness to take calculated risks. But making those changes stick is a far less glamorous and far more mundane task. You need to connect with customers, serve their needs and ensure that everyone in the company is maintaining the discipline to do the same. Much like Thomas Edison’s often-referenced description of the invention process, it’s 1 percent inspiration and 99 percent perspiration.

“My job as the leader is to coalesce the vision, getting it approved by our board and developing that with our senior management,” Littlefair says. “I’m kind of the chief communication officer and the chief motivator. There are certain things I have to do that no one else has to do and vice versa. But I think what a good leader does is set the vision and the implementation, hold people accountable and make the adjustments necessary for that to happen.”

How to reach: Clean Energy Fuels Corp., (562) 493-2804 or

The Littlefair file

History: I was born in Detroit, and we moved to California in 1963. I grew up in Torrance, Calif.

Education: B.A. in political science, University of Southern California

Littlefair on constructing a clear message: Like most companies, we have an annual strategic planning process. And we’re still small and entrepreneurial, so don’t confuse our process with what might happen at some place like IBM. But our managers gather information from well down in the organization, we have a series of one or two-day meetings, we started out with a larger group and break it down to a smaller group, cover a lot of areas, and we begin to sort new business opportunities, existing opportunities, reflect on past goals. It’s kind of a living process that goes on for a couple of months.

And through those several meetings, you ask people to embellish on their thoughts and different ideas, and what they think we need to pursue. As you develop a plan, and a lot of these things will end up being in the plan, that is part of communication, just the participation in the plan begins to bring everybody along. Of course, it doesn’t necessarily mean that everybody is together. When you finish the plan, they’re kind of 75 percent or 80 percent along the way, you need to make sure you have a plan to disseminate the goals, and you can’t do it too late in the year. You have to do it early and often, and you have to empower your team and managers to disseminate the plan, and if your company is small enough, you’ll try to do as much of that as you can personally.

Littlefair on developing a value proposition for customers: I think it is trying to stick to your knitting, understanding what it is you do well and what the proposition is that you have, and why you are better than others. Then stay damn focused on it, but realize that it sometimes takes longer that you think. One of the things I think as an entrepreneur or a business leader is that sometimes these things take longer than you think. Occasionally, you just have to kind of stick with it and through the thick and thin sometimes. That's the key, and that's what anybody really has to do in business.

Published in Orange County

Ryan Maibach had a solid background when he stepped into the president’s role at construction firm Barton Malow Co. A construction engineering graduate of Purdue University, he had been working at the firm in various capacities since 1997, most recently as operations vice president for the company’s industrial group.

One of several Maibach family members on Barton Malow’s leadership team, he had worked alongside his father, chairman and CEO Ben Maibach III, preparing for a larger role within the company.

Maibach was about as prepared as any person could have been to take over as president. But when the promotion came in April 2011, he still found himself challenged to take a $1.3 billion company, with a nationwide presence of 1,500 employees all trying to navigate a still-sluggish economy, and get it ready for future growth.

“Early on, I was just trying to understand what all is in play, especially coming into the position at a pretty challenging time for our industry,” Maibach says. “The biggest challenge was trying to figure out how we best cope with a lot of economic and industry realities, and how we continue to grow and thrive despite some of those.”

Maibach quickly isolated his single biggest need as a new leader: he had to connect with the people at Barton Malow, regardless of what job they performed or where they were stationed within the company’s footprint. He had to engage them in dialogue, solicit feedback on the vision, values and policies of the leadership team and use the employee input to define future goals for the company, both over the short term and long term.

“It was a lot of asking questions, and more often than not, asking open-ended questions,” Maibach says. “When you leave things open-ended, people are going to take the conversation where they want it to go. More often than not, it’s what you need to hear, though not always what you want to hear.”

Take stock

As operations vice president for the industrial segment, Maibach had overseen one of Barton Malow’s five business units. Along with the heads of the four other business units, Maibach had served on the company’s board, interacting and developing relationships with his peers on staff. Maibach says that fact did help him in his transition to the president’s role.

“The process was a little easier because there is a good degree of interaction with your peers,” Maibach says. “It’s not as though I was coming into a situation that I was completely unfamiliar with.”

Like any new leader has to, Maibach used the advantages he had to help smooth the transition, both for himself and the rest of the company. With a degree of stability already established with the management level, Maibach leveraged it to reach out to people at all levels and locations within the company, attempting to build relationships and a sense of familiarity, and rally people around his vision for the future.

“It might sound cliché, but I think the success and failure of a company is directly related to how effective our people are,” he says. “It’s in direct proportion to how solid our people are, how effective and informed they are as employees. So, in the time I’ve been in this position, it has been about trying to reach out and engage a broader segment of our employees, the people that I hadn’t had as much of a chance to interact with one-on-one in my previous position.”

There wasn’t any magic to it. Maibach got on a plane and logged thousands of air miles, travelling to Barton Malow locations and job sites from coast to coast, as far south as Florida and as far north as the Upper Peninsula of Michigan.

“I wanted to reach out, talk to them and understand their view of the company, their role in it and what they see,” Maibach says. “What are their challenges and obstacles, and how best to start working down that list, and getting everyone aligned on the company’s goals and objectives.”

Maibach wanted to provide positive reinforcement for his people, but as he traveled the country during his first months on the job, his people provided him with a great deal of positive reinforcement, too. Maibach discovered that he had a work force with a desire to perform at a high level, people who believed in the company and wanted to continue driving it toward success.

“You hear a lot of the loyalty and passion that people feel for the company,” Maibach says. “You see a lot of the appreciation that people have for certain values, namely the integrity of the company and the associated trust that a lot of individuals have in the company. You also hear from a lot of people the desire to be a part of something big, to be a part of the bigger picture. That, as a leader, is what drives you to provide more opportunities for people to be engaged and be a part of something more than their particular project or their particular role in the company.

“That is really the desire as we look out into a new era. How do we provide opportunities for some really great people to play a role in charting a course and setting a direction for what they are going to experience in the future?”

Utilize feedback

All of the time Maibach spent travelling as the new president amounted to a good first step in establishing rapport with employees and focusing them on the company future goals. But if it had ended there, that’s all it would have ever been — a good first step, a nice initial gesture, and little else.

For your actions to have any meaningful impact over the long haul, they need reinforcement. You reinforce by continually encouraging the behavior you preached, and hopefully demonstrated, in the first place.

In Maibach’s case, he sowed seeds of engagement. Now, when engaged employees come forward with ideas and input on the company’s future direction, Maibach needs to take the ideas seriously and offer constructive feedback — whether the company can use the idea or not.

“I got an e-mail from a young project engineer who I helped to recruit,” Maibach says. “He thought he had this terrific lead for new business, but it was in a location that is not so much a target for us. He sent us a 12-paragraph e-mail on why this was such an awesome idea, so it was obvious that he really believed in it and believe it was a good idea for the company. In that situation, it would have been very unfortunate if the response he received was ‘No, you are wrong.’ It takes a bit more time, but I firmly believe that every individual in the company has a right to as ‘Why?’ in any circumstance. If the idea that they submitted doesn’t make sense for us, part of your response as a leader has to tell them why it doesn’t make sense.”

Responding to feedback in an open, truthful fashion is an example of actions following words. If you preach about your company’s open culture, and how employees’ opinions are valued, you have to demonstrate it. By demonstrating your words through your deeds, you build an increased level of trust with your work force.

As an incoming executive, developing trust was one of the most critical tasks Maibach had to accomplish. If employees receive any whiff of what they think is hypocrisy or an aloof attitude from the members of upper management, your culture will suffer and the flow of ideas can slow to a trickle, or stop outright, which can damage your company’s ability to innovate and adapt in a fast-changing business climate.

“Trust is imperative,” Maibach says. “I can’t imagine not having a barometer for doing the things you say you are going to do. I can’t imagine intentionally looking to mislead. I will readily admit that I’m far from perfect, and I don’t think anyone in the organization would disagree, but if there is any erosion in the trust factor around here, it is not due to lack of trying. There are so many proverbs and idioms out there about doing what you say you’re going to do, and the golden rule of doing to others as you would have them do to you. But really, it is as simple as that. And if you can’t do something, explain why.

“You can’t fake concern or compassion. You either genuinely feel it or you don’t. If you genuinely do, people pick up on that and it helps to build trust. People will then feel like you are looking out for their best interest, and they are going to be a lot more game to engage you.”

Define goals

Many over-the-counter medicines have an active ingredient. It makes the headache medicine cure your headache; it makes the cough syrup quiet your cough. When developing a culture that values employee ideas and feedback, and encourages open dialogue throughout all levels of the organization, the active ingredient is a set of well-defined and compelling goals for the company.

The goals should have their roots what you believe in as a leader, and the values you want everyone in your organization to embrace.

“The purpose, firmly, is that everyone should understand why we’re here, what we’re all about, what is it we want to look to try and accomplish,” Maibach says. “Then, you want to have that resonate throughout the company. It’s centered on your values. What is it that you truly believe in, and how have you acted and functioned over the past several years? It’s not just aspirational values, but what is it that you truly and genuinely hold dear?”

Translating values into goals means turning them into actionable items that are aimed at the achievement of a definite outcome.

“The values have to translate into specific actions,” Maibach says. “How we expect people to engage certain situations, and how to act and behave in those situations. You can talk about broad concepts, like integrity, but what does that really mean. You need to get more specific on that. It’s important to be credible and do what you say, and act in a manner that is consistent with what you preach. To do that, you have to be able to take what you believe and where you want to go as an organization, and put it down on paper.”

Everything Maibach has done in his first year on the job as president of Barton Malow has really boiled down to one word: presence. He developed a presence with his employees, maintained that presence with an ongoing dialogue, and ensured that his presence was tied to the messages he continued to communicate, focusing employees on the values and goals of the company, both now and moving forward.

“Face-to-face presence is certainly the best, but the reality is that when you are as spread out as we are, you simply can’t be physically present everywhere. So you continually communicate, even if it’s just a quick call or note, and hopefully that presence is felt. You’re trying to dive deeper into the organization and understand the things that are in play for everyone. It’s not just presence for the sake of presence. It’s trying to convey the care and concern for individuals, and for their well-being.”

How to reach: Barton Malow Co., (248) 436-5000 or 

The Maibach file

Education: B.S. in construction engineering, Purdue University

What is the best business lesson you’ve learned?

I had the opportunity to work for a really fantastic superintendent, and he taught me that in order to have an understanding of your role as a leader, you have to develop an empathy and understanding, to some degree, of the people who work for you. So he used to send me out to set blocks or rake concrete or lay tile. It was really a fantastic experience. It helped me to understand and have a tremendous appreciation for everything that goes on at a construction site, and what it takes to execute the work that clients are hiring us to do.

What traits or skills are essential for a business leader?

Any leader is going to have to have the ability to set a direction, then to get people to rally around that direction, and encourage others along the way. You have to manage the resources that you have, play the hand you are dealt. And anyone in a leadership position is going to have to be able to articulate a vision.

What is your definition of success?

There are different buckets of success. Individually, it’s accomplishing goals and objectives related to the vision for what we are trying to accomplish. For the company overall, it’s to have every person understand their purpose, realize what they are trying to accomplish and what they hope to achieve. Success in an organization is really when you can take all of those things and align them on a common purpose and vision, and structure it in a manner where success for the organization and for the individual are one and the same.

Published in Detroit
Wednesday, 04 April 2012 11:06

The importance of being empowered

At CGI, we have conducted hundreds of searches for a wide variety of businesses from Fortune 100’s to small, privately-held companies. Despite the ever-growing need for efficiencies, we still see examples of where the human resources function is perceived as a cost center and not positioned strategically in the organization. This can lead to greater hiring challenges, missed opportunities and what I call a “groundhog day” scenario that repeats itself over and over.

Reflect back on when you were hired by your current company or a previous employer. Was it a great process that made you more motivated to pursue the opportunity, or was it one that raised questions? If it raised questions, the company is fortunate that you did in fact pursue the position. Candidates often include the talent acquisition process as part of their evaluation of the opportunity. They pay attention to the flow and efficiency of the interview process and whether or not the company’s talent team is on the same page. A weak HR structure can be revealing about the overall business. When a candidate engages with an HR professional who is well informed about the business and fully empowered, it makes the right first impression for the candidate.

At times, a hiring manager can take a myopic approach and “plug a hole” without taking into consideration the long-term objectives of their department and the business as a whole. They may not recognize that top talent is not lined up outside the door and eager to join the business. In engaging HR, they must understand the manager’s objectives as it relates to talent, have the ability to look forward from an organizational development standpoint and finally, be given proper resources and budgets to successfully attract and retain top talent. As a result of this, the empowered HR professional on the front end of the talent acquisition process can be instrumental in a positive hiring experience.

On the other side of the fence, HR professionals need to be sensitive to the challenges their internal hiring managers are facing and be effective in partnering with that manager to drive results. HR needs to be empowered to stop a search process if it is setup to fail from its onset or be accountable to increase resources if a search is falling behind schedule. If these areas are lacking, it can quickly drive a wedge between HR and the businesses hiring managers, causing a regression in the talent acquisition process.

All businesses want to make a great hire and ensure that talent is moving forward. To accomplish this, HR professionals need to invest their time with executives, managers and other stakeholders to truly understand talent requirements for the business. Conversely, hiring managers need to be willing to invest their time to ensure that HR is informed, empowered and that clear processes and protocols are in place for the talent and on-boarding process. Communication and calibration are paramount and need to flow in both directions throughout the search process. Keep in mind that talent acquisition will always have a human component and as a result, will never be a perfect science. The hiring team should be able to openly and quickly convey challenges they encounter in the hiring process and recalibrate as necessary to keep the process moving forward.

Continued commitment to empowering and integrating the HR function will save money for any size organization where an HR function exists. Strategic milestones of the business will be better met and the business’ brand to the talent pool will be elevated. Candidates will experience a cohesive management team and in the talent acquisition process can serve as a greater allure to the opportunity, giving greater clarity about their future within the business. As I have stated before, one of the best measures of success in talent acquisition is ultimately who is gaining and retaining the talent … you or your competitor?

Chris Carmon is the founder and president of CGI (The Carmon Group, Inc.). You can find out more about CGI by going to our website: Carmon can be reached at  (216) 328-9060, ext. 1001, or Connect with Carmon on LinkedIn at

Published in Cleveland
Tuesday, 03 April 2012 14:51

Unmatched client service at BKD Dallas

Led by Managing Partner Tom W. Watson, CPA, FHFMA, BKD Dallas was established in June 2009 when Dallas-based KBA Group LLP joined BKD. The office consists of 95 team members, including eight partners, who offer focused experience in audit, tax, risk management and transaction advisory services for public and private companies in a variety of industries.

BKD Dallas is located in the nation’s ninth largest city and is surrounded by many sites and recreational opportunities, including Six Flags over Texas, SpeedZone — a racing track that includes four kinds of racing, mini golf and other activities — the Dallas Zoo, Dinosaur Valley Park where visitors can hand feed roaming animals and Nasher Sculpture Center that features modern art, in addition to a host of shopping and dining options.

Smart Business spoke with Watson about BKD Dallas and how the organization innovates and impacts its community.

Give us an example of a business challenge your organization faced, as well as how you overcame it.

The Dallas office has a deep history of working with private equity funds and their related portfolio companies. When the economic crisis in 2008 started, many of the funds we worked with stopped doing deals, causing a potential slowdown in our business. We recognized the need to diversify our Dallas practice office to cover more industries. A benefit of being with BKD is lots of experts around the firm in lots of industries. Government/non-profit and health care were two of the areas we knew BKD was deep in but that had not been developed in Dallas. We were able to identify two top BKD partners in each of these niches who had a desire to come to Dallas and build these practice areas. We’ve had great success in these areas, adding multiple governmental and health care clients over the last two years. As a result, we’ve been able grow our business despite the economy and create rewarding career options for our employees.

In what ways are you an innovating leader, and how does your organization employ innovation to be on the leading edge?

There are a number of CPA firms that are technically competent to provide audit, tax or advisory services to companies. We believe that the innovative firm is the one that provides highly technical solutions with unmatched client services. We wrote a book about our client service, which we share with every employee and many of our prospective clients. It’s a big step to put a very high set of client service standards in writing and then tell our clients to judge us on those. By following through, we believe we really differentiate ourselves from other firms, resulting in long-term satisfied clients. Even though our book was written a few years ago, it continues to be time-tested and useful in virtually every business setting.

What is the greatest lesson you’ve learned, and how have you applied it?

It’s funny how the lessons you learn early in life seem to have applicability throughout your professional career. Telling the truth is one of these, and it’s as valid in a business environment as when you are in grade school.

When working with clients, integrity and honesty are paramount. It includes being honest and upfront about meeting deadlines and not setting expectations that cannot be met. It also means addressing issues quickly, whether its good or bad news. Clients expect us to be upfront with them, and as part of our client service standards we practice that every day.

How does your organization make a significant impact on the community and regional economy?

Being part of the community is important for both BKD’s partners and employees. We are active members of the North Dallas Chamber of Commerce, and we regularly support their initiatives to improve the business environment in the north Texas area. We have a number of our partners and staff involved in charitable organizations and community events. We encourage our staff to participate in coordinated charitable activities, such as supporting the North Texas Food Bank.

Through our charitable arm, the BKD Foundation, we’ve initial corporate sponsor of the First Tee of Dallas. This is a great organization that impacts the lives of young people by providing educational programs that build character, instill life enhancing values and promotes healthy choices through the game of golf. We also support numerous other charity activities, including Go Red for Women. The foundation’s main goal is to support causes in the communities in which we work, and we’ve tried to do that.

How have you added “value” to the products and services you provide to customers and clients?

One of our client service standards is true expertise. One way we promote this is having our staff become true experts in a particular industry early in their career. The fact that we have partners, managers and in-charges on nearly every project who have significant industry focus — whether it be energy, banking, health care, manufacturing, government or real estate — brings value to the product.

We also operate under the idea of principled innovation — we bring innovative solutions to clients with a principled base. We do not let innovation lead us into new, untested, unproved or unprincipled solutions; we try to retain true professionalism in the solutions we offer.

What is your philosophy on going “above and beyond” for customer service?

Client service is at the heart of everything we do. We have a service contract with our clients that says we will offer the five core tenets of our philosophy:  integrity first, true expertise, professional demeanor, responsive reliability and principled innovation. While it seems on the surface to be a pretty simple concept, in practice it isn’t executed by very many people as well as it should be. We live those concepts every day, and it shows in our client service.

Tom W. Watson, CPA, FHFMA, is the managing partner of BKD Dallas. Reach him at (972) 702-8262 or

Published in Dallas

More often than not, CEOs and business owners place workers’ compensation near the top of the list of cost drivers for their company.

Last year, the Ohio Bureau of Workers’ Compensation (BWC) looked to ease this burden with several  initiatives designed to reduce red tape and a base-rate reduction that resulted in more than $86 million in premium savings  for public and private employers. The agency also saved an additional $80 million by cutting its own biennial  budget by 12 percent.

Now, BWC is focusing on making workplaces safer and improving return-to-work rates. The agency’s leaders

believe improvements in these areas will bring further reductions in workers’ compensation costs for Ohio  employers.

“Over the past four years, the number of injured workers getting back to work after sustaining a workers’ compensation claim has fallen from 75 percent to below 69 percent here in Ohio,” explains BWC Administrator/CEO Steve Buehrer. “Additionally, we’ve seen medical and indemnity costs rising faster than the national average.”

Destination: Excellence takes on troubling trends

With these statistics and trends as a backdrop, BWC created Destination: Excellence – a package of new and existing BWC programs – that allows companies to design a risk-management plan that suits their business needs.

Destination: Excellence’s program options:

  • Address safety and accident prevention through on-site consultation by BWC experts, industry-specific training, rebates for safety council participation and help with implementing a drug-free program;
  • Provide assistance with developing transitional work and vocational rehab programs, including grants to help develop these types of programs;
  • Help save companies money on premiums through adoption of best practices and meeting certain performance

requirements. Additional savings are also possible for effective policy maintenance, such as doing business online and keeping current on premiums.

“We designed Destination: Excellence to align with our top priority of preventing injuries and getting injured workers healthy and back to work sooner,” Jeremy Jackson, BWC’s chief of public policy & strategy, explains. “A quick return to work has the dual benefit of saving money but, more importantly, increasing the chances of a positive outcome for the injured worker.”

From helping to review and develop a transitional work program to on-site safety and health consultation, BWC has experienced staff members to assist employers with all of the elements of Destination: Excellence. There is no additional cost to employers for these services.

BWC offering financial assistance with workplace wellness

In addition to Destination: Excellence, BWC recently unveiled its Workplace Wellness Grant Program for Ohio employers that want to improve the health and wellness of their workers through wellness programs. Developing workplace wellness initiatives can help employers control the escalating costs of health care by proactively addressing risk factors.

BWC will provide a grant over four years to implement wellness programs addressing health risk factors, such as obesity and chronic disease. Health experts often point to obesity as a key contributor to conditions that include hypertension, diabetes, stroke, coronary heart disease and cancer. These conditions, in turn, can complicate workers’ compensation cases and returning injured workers back to work.

Visit for more information about Destination: Excellence and the Workplace Wellness Grant Program.

BWC opens door to safety for Cincinnati manufacturer

Cincinnati-based Champion Door Manufacturing, which produces custom windows, doors and patio rooms, needed to develop better methods for finishing and packing products that could weigh as much as 600 pounds.

Mark Giordano, a BWC ergonomics consultant, visited with Champion’s management and staff to assess the company’s processes and to pinpoint particularly troublesome areas. Giordano and company officials decided work tables that could lift the mammoth doors and other products to an ergonomically correct height would greatly benefit workers.

With help from Giordano, Champion applied for 2-to-1 matching funds through BWC’s SafetyGRANT$ Program and received financial assistance to purchase five ergonomically correct work tables.

For more details about Champion’s partnership with BWC, visit the BWC Ohio channel on YouTube.

Published in Akron/Canton

Alfred P. West Jr. sums up his company’s ongoing challenge in one sentence:

“You can’t stay still, you have to continually innovate or you’ll die.”

West is the chairman and CEO of SEI Investments Co., a wealth management solutions business he founded more than 40 years ago. He has grown the company entirely through organic methods, meaning he has relied solely on the intellectual fuel of his employees to power his company’s engine. Organic growth has lifted SEI to $900 million in 2010 revenue, after posting revenue totals in the billions prior to the recession. But the recession’s effects, coupled with an ever-changing industry, has driven home to West and his team that SEI needs to remain responsive to client needs — and to do it, they need to stay a few steps ahead of industry trends.

“We always have to be watching where our clients’ problems are coming from,” West says. “We really have to stay ahead and keep track of emerging needs, and be able to sort out today’s needs from the needs that are going to be emerging, because most of the time, a client or somebody in the market, if you ask them, they’ll tell you what they need right then and there. But usually it’s not much that you can build on. By the time you get the product developed and built, particularly if it’s a technology product, the need is no longer there.”

West has needed to make innovation a key component of the culture at SEI by promoting the development and exchange of ideas, but also ensuring that new ideas stay true to the mission and vision of SEI by managing the innovation process on a macro level. The balance between freedom and setting boundaries is something that West has needed to master over the course of decades.

“We seem to innovate every 10 years,” he says. “We’re in an innovation phase right now, which has lasted longer than 10 years, thanks to the external environment that we are going into. It’s a much bigger change at the end of the day than we probably anticipated.”

Manage the process

When it comes to innovation, and innovating to serve customer needs, West says companies tend to do four things — and three of them are bad.

Companies will do the right things right, the right things wrong, the wrong things right or the wrong things wrong.

“When you do the right things right, you’re doing the things that are really critical to get done, and the right thing to do, and doing those things correctly,” West says. “You can also have the things that really need to get done, but maybe you don’t do them so well. That’s doing the right things wrong. Those are the tasks that you’re continually trying to get into the ‘right things right’ category.

“Then, you can do the wrong things right, where it just kind of creeps up on you. Maybe it was the right thing to do at some point in the past, but times have changed and whatever you were doing doesn’t fit anymore. You have to continually work to find those things out.

“Finally, doing wrong things wrong is the worst. You’re doing something you don’t need to be doing, you’re doing it poorly and you’re upsetting clients and customers.”

Innovation is all about taking the intellectual power of your team and harnessing it in a way that propels your business forward. At SEI, West encourages his team to think beyond the prescribed procedure for how to arrive at a solution to a problem, to challenge themselves to create new concepts and come up with new, more effective and efficient solutions that will allow the company to better serve its clients.

“A good example of questioning the process was when we had this very large report for one of our largest clients,” he says. “It took two hours a night, one night a week to run the report. It was so large; we were running out of space to finish all the rest of their work and get everything up and running by the morning. So finally we went back to our source and said ‘Can we do something about this report?’

“They said, ‘We don’t need that report? Who are you even doing that report for?’ And yet, they were receiving this report on a weekly basis. It illustrates how you need to figure out the things you really need to be doing for your clients, and how you might be taking up resources on a needless task. That is the biggest source of doing wrong things right.”

You can promote innovation in the form of new products and solutions, but often, the best innovations weed out inefficiencies inside your own organization, which has a direct effect on the service you can provide to your customers. West says you need to follow the chain of where your resources end up. As a business with finite cash reserves and a certain number of employees, you have a set amount of resources from which you can draw. Designing new processes that improve your company’s performance has a cascading effect that can carry your ability to improve the products and services your customers purchase from you.

“You follow that chain of where your resources are going,” West says. “If something is wrong, you do an analysis. We call it a root-cause analysis. Sometimes, the analysis will come back and show us that we don’t need to be doing the task in question anymore. Sometimes it comes back and shows us that we’re not doing it as right as we could be, and there are some changes that we could make.”

Ultimately, managing the innovation process comes back to effective change management. You want to position your processes and your people to move quickly and produce ideas that will help your company take advantage of business opportunities when they arise — which can be a hard-to-predict game.

“It all starts with the culture, because most things do start with the culture,” West says. “A big part of it is pushing collaboration, which starts when you hire an individual. A collaborative mindset is one of the most critical characteristics we look for because creating new innovations is a process that takes more than one person. So you start there and set the ground rules that everybody’s ideas are the same and have the same value. You tell your people that you need to have these ideas come forth, no matter where they are in the organization.”

West promotes the idea of collaboration leading to innovation through, among other things, the structure of SEI’s offices.

“We have no offices and everyone sits at the same desks,” he says. “I sit in the middle of the floor at the same type of desk as everyone else. You cannot tell hierarchy in the company by just looking around. It sends the message that you don’t have to go into this big office to tell someone your idea, and you don’t have to be intimidated by someone who is higher up in the organization than you are. It sends a message that everybody here is equal in terms of their ideas.”

Listen for innovation

Managing the process of innovation is only part of the equation for building an innovative culture that can leverage the brainpower of your team members to meet customer needs. You also need to create opportunities for dialogue with your employees and customers.

At SEI, West and his management team use multiple channels to spur everyone to talk about, and listen for, innovative ideas.

“We recently produced a site called ‘SEI Ideas,’” West says. “It is a social media site that has so far been very successful in ferreting out a whole lot of ideas, and then having people pick up on those ideas kind of virally. We are getting a lot of traction on ideas with methods like that. It has been far more effective than comment boxes or simply pushing for ideas through team leaders.”

The use of social media is part of an overall philosophy of collaboration that West has fostered. Because the best innovations often come as the result of multiple employees putting their heads together, West tries to ensure that employees are meeting and sharing ideas on a regular basis.

Ideas often cross-pollinate throughout the organization when someone with an idea and the passion to promote the idea is able to connect with others who are open to new ideas but might bring a different perspective to the table that allows the idea to be further shaped and refined.

“When we organize groups, we usually go through the process of finding people who are keen on the idea, and they bring it forth,” West says. “We have multiple segments or business lines with all of them trying to grow their business, and in doing so help to inspire innovation. So through that, we’re pushing for innovation on an everyday basis.”

Listening to customers is another key to a well-built innovation strategy. To know how you can best leverage your ideas to serve customers, you should talk to the people who will be using the products and services that are spawned from your employees’ initial ideas.

It’s an area that West says SEI needs to work to improve.

“We don’t do as good of a job as I would like to do on that,” he says. “We certainly get our clients involved in the prototyping stage. But it also helps that, if an idea is initially marketed, that you do have clients who are innovators as well. We call them ‘early adopters,’ and we usually take things by them.

“But what is even better than that, and what we haven’t been able to do, is actually put a client on the team. You can talk to them, but if you can take it a step further and actually have them put a representative on the innovation team, that way, if something goes a little wrong and you need to correct it, you can do that sooner rather than later. A lot of times, things go wrong during the process because you didn’t understand what the customer wanted as well as you could have. That is a concept we are working on.”

Building customer representation into the innovation process can help you, as West calls it, fail quickly. If there is a mistake in the design or implementation of a new product, you can find out and correct it in short order.

“Innovation really is a process of learning by failure,” West says. “A fear of failure is often what squashes an innovative culture. That is why you want to promote the idea among your people that it is OK to fail, and fail quickly. You push it, fail quickly, fix it, fail quickly and fix it again. If the failure is the result of trying to do something, you learn from your mistakes.”

Learning from mistakes, and doing so in rapid-fire fashion, is the best way to speed the process of turning wrong things done right, and right things done wrong, into right things done right.

“The reason you want to fail quickly is if you drag a failure out, it costs you a lot more,” West says. “You probably found out it was a failure pretty early. The people who hang on do so because they are afraid that this was their only chance to prove themselves, so if they admit failure, they basically feel like they’ve lost their job. You can’t allow people to feel that way, or you’ll never have any innovation.”

How to reach: SEI Investments Co., (610) 676-1000 or

The West file

Born: Brooksville, Fla.

Education: Aerospace engineering degree from Georgia Tech; MBA from the Wharton School, University of Pennsylvania

West on what it takes to build an innovative culture: You first have to be dedicated to it. We only grow one way, and that’s organically. We really have nothing that we can hide behind so by definition in our business, we have made it a very important thing to do. I know there have been other organizations, 3M has always been, as has Google — and Apple was probably No. 1 — that are held up as great innovative companies. And it is all about doing things that have never been done before, but meeting a need.

Apple is a great example. They met needs that people didn’t even know they had. That is the definition of emerging needs. If you innovate properly, you end up doing that. We’re doing things that are much more mundane with investments and investment technology, but we still have to look out and ask where is all this going. Most of the time, people won’t know that it is a need.

What you’re doing in marketing terms is creating a new category. And new categories are tough to bring out. Because we can come up with a new category, people didn’t know they needed it, but once they tried it out, it really does have an exponential curve if it is a successful innovation. It turns out we have successful innovations every year, but we have a major innovation about once every 10 years.

West on predicting the future needs of customers: We look at industry trends. They’re usually predictive of some major changes. When it looks like something new is coming, that is when you gear up to design new products. You have to keep your ear close to the ground in one sense, but also looking out for good ways, and you are definitely looking at trends.

One big trend we caught in the ‘90s was advisers who were moving from commission to fee-based visits. That changed an awful lot in that industry, and we came out with an offering that moved in to fee-based, and we did very, very well for a period of time. That was the case of a big industry trend where you could see the handwriting on the wall, but a lot of the people doing day-to-day business were not willing to give up a commission-based business model. It wasn’t until later when they had to give it up.

Published in Philadelphia

Carl Camden’s company finds jobs for people. That in and of itself could have served as a buffer against most recessions.

As the economic crisis caused untold numbers of positions to vanish at companies all across the country over the past four years, you might have thought that Kelly Services Inc., which Camden leads as president and CEO, would have had an increased demand for its services as people looked for employment and companies living hand-to-mouth looked for short-term staffing solutions.

But this wasn’t just any recession. This recession’s impact was so severe and hit so many companies across virtually every industry; it took a big bite out of Kelly Services as well. People needed jobs, but companies weren’t looking to hire, even for temp positions.

The company had to cut 1,900 positions as it lost money for the first time in its history.

“Our sales went down by a third during the recession,” Camden says. “The demand for our services was actually sinking with the recession. The whole definition of what we were as an industry changed. In coping with the recession, we had to open new product lines, new services, new types of relationships with customers.”

Camden and his leadership team had to fundamentally restructure Kelly Services as a more centralized organization, renew his employees’ focus on customer service and ensure that multiple lines of communication were accessible to everyone in the company, so that everyone was able to speak with upper management and stay informed on the progress of the changes the company was implementing.

At the same time, Camden had to react to the recession’s fallout, while maintaining a proactive approach regarding what Kelly Services would look like, and operate like, after the recession.

Form a plan


First responders in an emergency, such as a natural disaster, say their training takes over in a crisis situation. They immediately know what steps need to be taken first and what gets moved to the top of the priority list.

CEOs aren’t completely unlike first responders when dealing with a financial crisis that threatens their business.

As the recession deepened in late 2008 and early 2009, Camden and his team surveyed the situation and immediately recognized that the company needed to reduce expenses and get more efficient — with an eye toward maintaining those efficiencies after the recession.

“You first have to reduce your expense space, obviously,” Camden says. “But one of the things we tried to do in that time when we were reducing our expense space was to do it in a way that yielded structural advantages to the company, advantages that could remain as something permanent as we came out of recession.”

The solution that Camden’s team formulated was to shut down several branch locations and transfer those capabilities to a central location.

“We could then serve more customers and do it anywhere they happened to be,” he says. “They’re not reliant on a branch within the network. It was an opportunity to reduce costs and an opportunity to increase our services while we did that.”

Camden likens it to how banks have evolved. Several decades ago, banks were entirely based on a brick-and-mortar infrastructure. Now, banks offer more services to consumers, but with fewer branches.

“Growing up when I did, you had banks every two or three blocks,” he says. “Today, you can drive for quite a while without seeing a bank branch, because we do more banking with ATMs and call centers. We were able to centralize a significant part of our business in much the same way, decreasing the number of our branches while increasing the number of services we provide to our temporary employees and customers by using automated systems, online service centers and call service centers.”

In a time of head-count reductions and major change, morale can trend downward in a company. However, those who survive the cutbacks and are willing to adapt to the organizational changes can actually become more productive in the short term. Camden relied on that uptick in production to help expedite the transition for Kelly Services.

“People get very focused very quickly on what it is going to take to survive and do well and keep the customers happy,” Camden says. “I think a time of extreme economic turbulence is a better time to make the changes we made because people put aside petty territoriality or the belief that we’ve always done it this way so we should always do it this way and get a lot more focused on what needs to be done right now.”

But you can only ride that wave for so long. Those who survive the cutbacks will initially exhibit relief that they’re still employed and a willingness to do whatever it takes to keep their jobs. In any time of upheaval, there will still be an element within the company that is resistant to change, and if those who were initially on board with the change don’t see a long-term point to what is going on, over time more and more of them will become skeptics, and then outright cynics. Some can’t stay with the company.

“Of course, there is going to be some resistance,” Camden says. “There always is. Any time you are asking someone to change the nature of their job, there is always resistance because people like things to stay the same. Every time you go through a big change, you’ll have, within the normal array of responses, some people who have to leave the company because they don’t want to do what is going to be required.

“Eventually, some of those people might come back because they figured it out and understand it,” he says. “But the notion that you can make everybody wholeheartedly embrace the change is not an effective notion because they don’t, they won’t and you waste a lot of time trying to convince the ones who don’t want to believe in what you are doing. You’re better off letting them leave, and maybe they’ll come back.”

Make change interactive

If your employees are going to see a long-term benefit to the changes you are making, you need to get them involved with the change. You need a culture in which their opinions are valued and mechanisms within the company that allow your employees to share their ideas and concerns.

Camden, as a general principle, doesn’t like business meetings. But as the recession tightened its grip, he held more meetings to begin facilitating discussions that helped improve the flow of information throughout the company. Out of those meetings, Camden and his leadership team developed and emphasized a policy to solicit input from throughout the organization, on all topics.

In any time of change, employees are going to be primarily concerned with the future of their jobs, and if they retain their positions, how their job description might be altered. But employees will also be concerned with what type of company they’re going to be working for in the future.

“That is why we really opened up the company and asked people to start sending us their ideas, big and small,” Camden says. “We received lots of great ideas, many perhaps not sweeping in nature, but all contributing to an ability to simultaneously reduce our expense ratio and build more capability.

“They were as small as ways to change the time that cleaning crews are working and as big as the types of travel we engage in, and how we might be able to hold meetings across different geographies in a manner other than face to face, using more electronic types of communication. Even as the economy starts to recover, I still see a strong desire for people to have more contact with each other, but while having fewer face-to-face meetings.”

One of the ways Camden has bridged the communication gap without herding all key members of the company into the same room is by using social media platforms. Kelly Services utilizes both external, public platforms, such as LinkedIn and Facebook, and custom-made internal platforms specific to the company’s needs. Camden says social media has not only increased his ability to get messages out to the entire company, it has also improved the ability of individuals to directly address another individual within the company, making communication more of a personal matter.

“The social media platforms really promote themselves,” Camden says. “I find that the over-50 and under-30 people are the two groups that are most quickly growing in the use of social media. They’re the ones who let all of their fellow employees know what is going on. With no promotion, it’s on a nice, rapid adoption curve inside the company. Personally, I find myself able to communicate with thousands of Kelly employees via social media platforms, whereas if I had engaged them via traditional hierarchical methods, I’d be communicating to a much smaller number of people, and probably using typical, boring speeches.”

Set the stage

If you are going to increase your accessibility via different communications platforms, you also have to remember that you are being watched, all the time. As the leader of the company, everyone else is going to take reaction cues from you in a time of uncertainty. If you are panicky, other will panic. If you are calm, others will remain calm. If you dodge questions, others will fill in the blanks, often with inaccurate information.

“Your tone matters,” Camden says. “People are listening to your tone as much as, if not more so, to what you are saying. Staying calm is not incongruent with having a sense of urgency. People are looking for whether you remain calm and have a perspective on how we’re going to find our way out of the situation.”

Along with that, as you pilot your company through the change, your people are going to be looking for indications that your words follow your actions. If you don’t adhere to the mission and core values of the company in your behavior and the decisions you make, you will add to the feeling of instability and damage your ability to achieve buy-in with your employees.

“They will be looking to see that you are not changing who you are just because of the financial contingencies of the moment,” Camden says. “You have to maintain a sense of real transparency, because people don’t want to be surprised. If they read about it in a magazine before you tell them what is going on, the result is going to really suck for you as a leader. You need to step up and be as transparent and quick in your communication as you can.”

The organizational change and communication strategies implemented by Camden and his leadership team have helped aid in Kelly Service’s recovery. The company posted $4.95 billion in 2010 revenue, up from $4.31 billion in 2009.

“In a crisis, one part of my job is to assure the investment community and the banking community, along with the customer community, that all was going to be fine, and not only that, it was going to get even better,” Camden says. “But the second part of my job has been internal. To send an internal message, a culture message, to make clear what it is we are migrating to so that the response to a crisis is seen not just as a reaction but rather a proactive opportunity to take steps toward a set of improvements. You want to focus everyone not just on where you are, but what you are evolving into, what you are in the process of becoming.”

How to reach: Kelly Services Inc., (248) 362-4444 or

The Camden file

Born: Dover, Del.

Education: Bachelor’s degrees in psychology and communication, Southwest Baptist University, Bolivar, Mo.; master’s degrees in communication and clinical psychology, Central Missouri State University (now University of Central Missouri), Warrensburg, Mo.; doctorate degree in communication, The Ohio State University

Camden on soliciting critical feedback:

You keep around yourself unpleasant people who tell you that you are messing up. Actually, I'm kind of serious about that. I often tell HR that I am not going to promote somebody because they never disagree with me. You don't want to have people high up in the company who haven’t found at least one thing you're doing that is stupid. You have to have a group of people around you who are willing to challenge you.

Camden on tuning out negative news during the recession:

You can’t disassociate the two. What you have to make clear is how does what is happening in the outside-of-the-walls part of the world influence or link to what you do. To try and separate the two and say, "Don’t worry about the man behind the curtain."  Not many people are that great in compartmentalization.

You have to say, "This is how what we are doing affects us." I would say there are a whole lot of people out there who are desperate for jobs, and are looking to us to enable them to live the way they want to live. We have to step up our game to help those people find the ability to make a living. So I would disassociate myself from the realities of the economy, I would create a sense of urgency around it, in the sense of the good we can do in people's lives.

Published in Detroit