The future is all about digital, and the companies that will come out on top will have the most outstanding user experiences, Amy Buckner Chowdhry says.
The CEO and co-founder of AnswerLab, a consulting firm that helps many of the world’s leading brands build user experiences across digital platforms, focuses on client research to help guide companies throughout their product development process. Founded in 2004, the firm of 30 has worked with clients such as Google, Facebook, Microsoft and Honda.
Smart Business sat down with Buckner Chowdhry at the 2011 Ernst & Young Strategic Growth Forum to discuss how AnswerLab works to create and implement user experiences that meet the needs of both company and customer.
Q: What was the impetus behind AnswerLab?
My co-founder Dan Clifford and I both worked at a company called Vividence, and Vividence provided a piece of software that would allow you to measure and benchmark the customer experience of websites. That was one method of many that could help clients improve their digital experiences. Having built some knowledge there, we felt we wanted to offer the whole tool kit — that no matter what a client’s business question is when they’re developing a digital product, we wanted to be able to offer the right research methodology to answer it.
Q: How is bringing in an outside firm beneficial to the development process?
In your average organization, you don’t have one person who’s that decision-maker. You have multiple people, and what happens is that the competing needs of each of the groups can result in an experience that gets watered down.
It’s incredible to see how easy the user experience within an organization can go south because there are too many stakeholders — there are too many people involved in making the decision around what gets launched.
When you bring in an outside, independent and objective research firm to help in your process, you can get back to what the voice of the customer is.
Q: How do you engage the customer to identify their needs?
It typically involves recruiting them into a research environment where we’re engaging with them one on one or in a group setting.
We can start with a database or a list that our client has of their customers. We reach out to them for a particular research study and maybe do focus groups with them. We may visit them in their homes to watch how they use a product, bring them into the lab environment and watch them behind the mirror as they try to use a product, or bring them in to do something on a page to track their eyes to see what they’re looking at on the page. Do they notice the fad or do they not notice the fad?
Q: What process do you have to turn a good idea into a tangible product or service?
The day to day is about getting these projects out the door to clients. That’s what most of our teams focus on. But we need to also be innovative in taking what our services and research are and taking them to the next level. We go through a rigorous strategic planning process where our entire management team meets quarterly.
We do a SWOT analysis and we sit down and look at what are the opportunities here. When a new product will help address some of the items that come up on our SWOT analysis, we turn that into a strategic priority for the quarter and we track against it.
If we identify that a specific threat may be that a competitor has a competing product or if we identify that there’s a huge opportunity on the table to basically grab this unmet need from our clients, then that becomes a product or a goal that we drive through as a strategic priority. We take the results of strategic planning process and put it into a one-page plan ... and that’s on every single person’s desk in the office.
We have an online tool that we use. Everyone has to log in to on Friday and update it, and it shows our progress toward implementing these strategic priorities. So there’s the goal to get this product launched, and there are all the tasks associated with it and all the people who need to help make sure that happens.
Q: When you’re developing a digital experience, do you try to go that extra step to surprise users with something unexpected?
(There’s) a big difference in our world of user experience between a game user experience and your traditional user experience on the Web. One is called usability, which is your traditional ‘Can you pay this bill online without getting confused?’(or) ‘Can you register for this website?’
In a traditional usability experience, you could have elements of delight, but you want to avoid elements of shock.
(Another user experience is) what we call playability, which is ‘How easy and enjoyable is it to engage with this game?’ And in a playability sense, it’s OK to have a surprise. It’s good to have gaming elements that are discovered as you go, and it’s important for that game overall objective to be clear to you. And it’s OK for things to be difficult.
Q: What is the difference between a surprise and a shock?
The difference between a surprise and a shock is that surprise delights you.
Sometimes it’s just making an assumption, skipping a step for you so that you don’t have to think about extra steps as you go through the process. If it adds to ease of use, satisfaction, delight with a product, then that’s a great surprise. The bad surprise is what often happens with user experiences, which is actions that you take that have unintended consequences. You have an expectation that you click X or add Y to your shopping bag then Z’s going to happen, and it does not.
A really great surprise has to delight and not take someone for a loop.
Q: How do you stay motivated and keep creativity flowing for yourself and for your organization?
Our company works with the innovators. We are able to see incredible products or ideas for products before they go live.
Simply by doing our jobs, we stay incredibly energized and feel creative because we’re part of this process or this energy ... around building something new and creating something new. We get to see it first, and we get to have input into it.
We focus a lot on trying to ensure that our team can get the right professional development that they want. We have a series of learning luncheons that we set up where we’ll bring in outside speakers to talk with the team and keep them engaged. We’ll watch a ‘Ted talk’ during lunch together. We’ll have individuals within the company present on the work that they’ve been doing.
Q: How do you recruit new hires?
For our research team, who are day in and day out connecting with our clients and consulting with them and doing the research, we typically recruit straight out of school. They’ve just got a Ph.D. in cognitive science or cognitive psychology, human-computer interaction or computer science, and they’ve done a lot of work in their academic field. They’ve done a couple internships. Then we put them through AnswerLab University. And we do an exercise with them when we’re going through the recruiting process to make sure that they can think on their feet. We give them a very quick assignment to do that they have to turn around to make sure that they will be able to adapt to our environment coming out of academia. So they have a great foundation, and then we help put on the rest, the consulting component.
When I think about growing AnswerLab, a lot of that is focused on ‘How do I create opportunity for everyone there?’ And it’s not growth for the sake of growth. It’s growth for the sake of every person within the company having an opportunity to learn a new industry, try a new product, build a new skill set, move into a different role, open a new office.
Q: What was your biggest barrier for growth in the early days?
The biggest barrier truly for me was not stepping out of the day to day. If I could start all over again, I would have hired our smartest, most senior people first and had them run the rest of the business while I stepped out of it and focused on growing it and setting the vision and the strategy for it. I spent a good couple years still doing the front-line research myself until we got big enough, then slowly but surely started hiring people.
How to reach: AnswerLab, (415) 814-9910 or www.answerlab.com
Finding a new location for your business isn’t as simple as picking out a nice building and moving in. There are many factors that go into the decision, and working with a professional can help ensure that you take advantage of all that a location has to offer, says Rick Hughes, executive director, Cushman & Wakefield of Texas Inc., who recently worked with Allen Economic Development Corp. to locate one of his clients to Allen, Texas.
“A commercial real estate professional is very valuable in locating the right place to operate your business,” says Hughes. “The demographics of an area, where employees are located, logistics, right to work issues, workers’ compensation obligations, unemployment insurance costs and other issues all come into play. It is significantly more complicated than saying, ‘This city looks like a nice place to run a business.’”
Smart Business spoke with Hughes about how to find the right location for your business, and why Allen may be a great choice.
What are the benefits of being located in Allen?
In the Dallas area, professional and college-educated populations are generally north of downtown, with cities that have good school systems and that are very attractive places to be and to raise a family. Good schools, good fire and police support, and cost effective living are some of the attributes that make Allen attractive.
The city also has a number of corporate headquarters, which businesses can potentially use to their advantage.
What should a business owner look at when trying to determine a new location?
One important thing is the availability of certain kinds of labor. What is the profile of labor? What kinds of businesses do well in that area? Where are those people working? Where do they live? Look at the demographics and determine whether the available labor pool will meet your needs.
What else should a business consider?
If you are a manufacturer, for example, and are making something that needs to be distributed efficiently, you don’t want to be in a congested area. But you do want to be close to the Interstate highway system, so there are logistics to consider.
Also look at where ‘the Boss’ lives. A company will always say that is not a factor, but invariably, the chosen location is closer to his or her home than to those of other employees, so consider where the management team lives or wants to live.
The quality of schools is also a factor. A business wants its employees to live close to work, and schools are a part of that. If an employee has to leave work to go to the school, you don’t want them to have to drive an hour each way.
Some businesses are also sensitive to the company’s address. They want a corporate address, and they want it to be in a particular city. But for the most part, the labor profile, the location of the management team and what kind of building the company wants to be in are key.
How can an outside adviser help a business make the right choice and take advantage of available incentives?
The adviser can act as an insulator in negotiations. If a company is acting on its own and meets with a city, and the city offers it $500,000 to move there, that may sound like a good offer. But if you have that go-between, he or she can bring the offer back and the company doesn’t have to respond on the spot.
An experienced adviser can also tell you how each potential city is going to respond to each opportunity. That person knows which cities are looking for high-paying jobs, and which are not as interested in the quality of jobs as they are the number of jobs. Some are more interested in the capital and infrastructure commitment a company is going to make. For example, the city of Allen in very keen on having corporate headquarters move to the city, and an adviser will know that and can help you leverage that.
How can an economic development corporation assist a company in determining where to move?
A company and its adviser can send out a profile. “Here is the capital investment that we are prepared to spend if we move to your city. Here are the number of employees and jobs that we are going to bring to your city. Here are the wages and benefits of these jobs, aggregated.” Then ask what the economic development corporation can do to help mitigate your costs. For example, it might say, ‘If you move here, we will offer property tax abatement on your real and personal property, or we will give you a grant of $500,000, paid out over two years, if you commit to move.’
After you’ve looked at the proposals, then look at available real estate to see if there is a building in that city that works for this company. Look at the incentives and determine if they help mitigate the costs of moving. Look at the demographics to see if it is a place where not only do your employees live, or would want to live, but at whether the profile demographic contains the kinds of people you will want to hire.
What is the state of incentives, given today’s economy?
In some instances, states are taking economic incentive funds and moving them into budgetary items. Other states, such as Texas, understand that, long term, in these economic times, when there is huge budgetary pressure at the state level, that states need jobs more than ever. They are investing in jobs, as opposed to taking money away from attracting and recruiting jobs, and adding money to economic development. Those are the states that businesses are going to want be in because they are investing in the future.
States that aren’t doing so are being very short-sighted by reducing the funds they have in their tool chest to attract businesses.
Rick Hughes is executive director at Cushman & Wakefield of Texas Inc. Reach him at (972) 663-9601 or Rick.Hughes@cushwake.com.
Insights Economic Development is brought to you by the Allen Economic Development Corporation, strategically positioned in the Dallas/Fort Worth metro.
Scott Wise admits it’s difficult to find and keep good employees for the seven restaurants he operates. But despite that, he knows he’s doing something right ? Scotty’s Brewhouse grew from $11.6 million in annual revenue to $18 million between 2008 and 2010, a 55 percent increase.
“It’s important to keep growing our company so everybody’s fire continues to burn, so everybody feels they have another place for them to move forward,” says Wise, founder, president and CEO of the 1,000-employee company.
“Your employee is No. 1, not your customer,” he says. “If your employee is not happy, your customer is going to know that and is probably not going to come back.”
Smart Business spoke with Wise about how Scotty’s finds workers and stokes the fire within them.
What does it take to find a good employee?
Gosh, it’s hard. It’s tough. It starts all the way from the beginning. From the minute you hire them, you’ve got to hold hope that your manager has done his job. We try to put a lot of effort into the manager who’s doing the hiring so that he or she can find the right person. You absolutely have to recognize the right person, see through the bullshit and make sure that someone is not just saying things you can say to get hired. So it starts with that.
But from watching over my entire company, I would say just the generation we are dealing with right now, I don’t want to blame anybody or blame a generation, but it’s just, I hate to say weaker, but I think every generation gets a little weaker in some respects. Maybe they have been a little more overprotected or they need to know a little bit more about why ? “Why do I have to be there at 10 o’clock instead of 10:30?”
They ask a lot more questions. They want to know why they are doing this, or what’s in it for them if they sell these different food items or these different drink items.
I think that the toughest challenge is to always keep all your staff motivated, content, happy and, obviously, as the end result ? pleasing your guests.
What solutions are you taking to address the challenges of Gen Y workers and others?
It takes proper training. If you don’t train them correctly, they won’t want to stay with a company that doesn’t train them properly. The employees won’t feel like they know what they are doing, and they feel uncomfortable where they are, and they are not going to want to stay there.
To follow up, the chief executive needs to personally send an e-mail to every new trainee that comes into the company and tell them, ‘Hey, here’s my e-mail address. This is really me typing this e-mail. If you ever have a question or you feel like someone is saying something rude to you or anything, you need to e-mail me here.’
It all takes good training. We actually have two directors of training in our company so we try to put a lot of emphasis on them and making sure that they have proper training manuals and everything in place.
What are the responsibilities of the two directors?
One travels to the restaurants and actually goes to each store and talks to staff and the training manager.
The other one, who is the main director of training, manages the entire database and stays back to make sure everything is put together. Then she gives out information to him to transfer to the restaurants. They work together in the training.
What types of perks are successful with employees?
Try to just take a little bit extra effort to show support to all employees: Christmas parties, summer baseball games, anniversary cards and gym workout memberships are a few.
You don’t want them to be giving 80 hours a week at work and just killing themselves with that.
You want people to have a good work/life balance. That’s kind of my philosophy. I really think that helps.
How to reach: Scotty’s Brewhouse, (317) 759-6336 or www.scottysbrewhouse.com
If you’re an employer who sponsors a 401(k) plan, April 1 is a date that you should circle on your 2012 calendar. This is the deadline for plan sponsors to obtain from plan advisors newly required disclosures stating specifically what services they’re providing and the cost of each.
To some sponsoring employers, this may sound like a bureaucratic requirement of little consequence. This is decidedly not the case. Beginning April 2, plan sponsors who can’t show that they met the April 1 deadline for disclosures — and the best way to do so is to get them in writing, with signatures — will be subject to federal fines, disqualification of their plans and employee lawsuits aimed at their personal assets.
This requirement is among many stemming from new rules from the Department of Labor (DOL) that go into effect in 2012. The intent of the rules is to protect participating employees from unreasonable service provider fees that shrink their 401(k) accounts. Unbeknownst to employees and many plan sponsors, many plans have long been charged excessive fees. Until now, disclosure of all fees has not been expressly required by federal rules.
In addition to obtaining the fee and service disclosures, the new rules also require sponsors to determine whether plan advisors are fiduciaries — a legal/regulatory status meaning that these advisors always put clients’ interests ahead of their own. (See “The 401(k) regulatory tsunami.”)
The combined content of the new advisor disclosures will have profound implications for sponsors’ compliance burdens stemming from new DOL rules, which expand or amplify longstanding requirements of the Employee Retirement Income Security Act (ERISA) of 1974.
Under ERISA, plan sponsors are themselves fiduciaries, with all of the attendant responsibility, accountability and liability. Many plan sponsors have always believed that their long-time advisors are fiduciaries, but this simply isn’t true. Typically, the dominant advisory role in a 401(k) plan is played by a broker, yet precious few brokers are fiduciaries.
Though ERISA rules prohibit non-fiduciaries from advising on the suitability of specific investments in these plans, enforcement over the years has been lax, allowing many brokers to cross the line between providing employee education and actually advising on the suitability of specific investment options.
Thus, they’ve engaged in the quintessential advisory role — one reserved by law for conflict-free fiduciaries who can share legal responsibilities with sponsors. By contrast, brokers may have conflicts of interest, such as business relationships with financial institutions that provide investments for the plan.
It is critical for plan sponsors to understand how the dynamics of these disclosures will put an increased regulatory and legal burden on them as fiduciaries: By making it a matter of record whether an advisor is or isn’t a fiduciary, the new DOL rules mean that sponsors will have no credibility in telling regulators that they believed they were outsourcing their own fiduciary responsibilities.
In many cases, details of the new advisor disclosures will trigger epiphanies for sponsors concerning fundamental inadequacies of their plans, bringing a growing awareness of some of the rigors that they must undergo to assure that these plans comply with the new DOL rules.
From the point of view of plan sponsors using a broker to service their plans, this epiphanic moment will often go something like this:
– The sponsor, aware of the importance of these disclosures, does some research and learns what services non-fiduciary advisors can and cannot legally provide.
– In disclosures from the broker, the advisor lists the fees that his or her company is charging and the services provided for these fees: selecting mutual funds for the plan’s investment options, making educational presentations to employees and enrolling them in the plan.
– The broker states unequivocally that he or she is not a fiduciary.
– The sponsor realizes that because plan-education presentations typically involve answering questions about specific investments, they can easily involve advisors’ rendering advice on investments — an activity prohibited for non-fiduciaries.
– Further, the sponsor realizes that this advisory scenario is even more likely at enrollment meetings.
– It dawns on the sponsor: The plan is getting far less actual service than previously believed. Hence, fees for the actual, legitimate services being provided are far higher than the sponsor thought.
These disclosures are intended to serve as a wake-up call for companies who may be paying far too much for far too little, so they can take steps to change their plans.
When doing so, sponsors should be careful not to make the same mistakes that got them into trouble in the first place. When non-fiduciary advisors pitched them business, they likely said, “We’ll be standing right behind you.”
By having fiduciaries as their plan advisors, sponsors can be assured that these advisors will be standing with them shoulder to shoulder, sharing their exposure to any incoming regulatory or legal fire.
Anthony Kippins is president of Retirement Plan Advisors LLC, a Cincinnati-based financial services company that provides retirement-plan fiduciary services and employee-benefit solutions to small companies. Kippins holds the AIFA (Accredited Investment Fiduciary Analyst) designation. He can be reached at email@example.com.
Together, yet separate. Unified, yet unique.
It’s the quandary of seemingly polar-opposite circumstances that David McKinnon — and any CEO in charge of a company that oversees multiple brands — faces each day.
The brands are what the customers see and trust, so they each have to maintain a strong presence on their own. But the brands can’t become more important than the company as a whole, so corporate management has to maintain a tight grip on the reins of the central entity.
McKinnon moved from Canada in the 1980s to co-found the company that would become Service Brands International LLC. As chairman and CEO, he has grown the company to $239 million in 2010 revenue across four household services brands — Molly Maid, Mr. Handyman, 1-800-DryClean and ProTect Painters. Each brand has its own president, its own revenue streams and its own customer base. But none of the four would exist, as least in its present form, without the contributions of the other three.
“When you have multiple branches, multiple divisions, it’s all about keeping the leaders focused on accomplishing the goals that they have to accomplish for their brand, but to do it while working with the other brands cooperatively,” McKinnon says. “For example, we have shared resources for IT, shared resources for marketing, shared resources for legal support. So it’s a give-and-take of understanding that, at a given time, some other brand’s priority must be ahead of yours, or vice versa. As the leader of all that, it’s often my biggest challenge to manage that process. It requires a high degree of communication, a high degree of letting people know why things are important at a given point in time, and trying to get understanding from everyone in all of that.”
In short, McKinnon needs to set the expectations of himself and his corporate leadership team, and manage the expectations on the brand leadership level. Ultimately, everyone in the company needs to promote the brands while respecting the role the brands play in the advancement of the whole company.
Earn your stripes
One of the most important hats McKinnon wears is more like a striped shirt — of the black-and-white zebra variety. McKinnon has to be the referee, officiating any disputes that might arise between brands over allocation of resources.
The relationship between the brands at SBI isn’t contentious, but it is competitive. That can be good to a point. McKinnon’s job as referee is to determine when the competitive atmosphere moves from constructive to detrimental, and prevent the leaders of the brands from crossing that line.
It comes down to a lot of talking and trying to appeal to the inner diplomat in each of the brand presidents.
“Let’s say there are two demands by two separate brands for a new IT project,” McKinnon says. “One is for one brand and one is for the other. We don’t have enough resources to get them both done at the same time, so I ultimately have to decide which one of the brands goes first and which goes second.”
McKinnon gathers the information for his decision by getting the presidents of the involved brands in a conference room along with any other involved parties, and facilitate a discussion.
“We try to figure out together which project is going to have more value or which project is going to provide more customer satisfaction, and try to make a decision based on as much data as I can gather,” he says. “When we decide which brand has to wait for their resources, I try to keep that brand’s leaders assured that their turn is coming next, then communicate that bluntly and openly with employees and franchise owners. It’s managing that process, which requires tons and tons of communication.”
Just because you appeal to your team’s sense of reason doesn’t necessarily mean that everyone is going to be happy with the decision you make. Don’t expect total satisfaction, but do expect willingness to compromise. McKinnon doesn’t want everyone to leave the conference room happy, but he does want them to leave with a sense that the fair and proper course of action was taken.
“It is a difficult process at times,” he says. “But again, you make it easier through how you communicate with people. You share your decision and the process by which you went one way as opposed to another. You try to develop understanding around that, and also develop willingness on the part of everyone to live with the consequences. I take the hit when there is bad news to report and give the credit to everyone else when there is good news to report.”
Stick to your principles
A willingness to work for the good of the whole is fostered through developing a culture that values collaboration and teamwork as guiding principles. That type of culture has to be carefully cultivated, starting with the top levels of the company. You have to set the tone for what is acceptable and what is not acceptable; what cultural principles you want to see emphasized throughout the organization.
“Principles, I’ve found, are lived out,” McKinnon says. “We have a manual, but the principles of the culture are created and evolved by the leader. The leader sets the pace for how fast the altitude and the aptitude of the organization grows. When you have a culture of ‘Let’s get this done now,’ and a bias toward serving our franchise owners because that’s why we exist, we realize that our job is to serve them and make their businesses better. That is the bias by which we have to look at the business and judge the culture we have created.”
If the leader is doing a good job of demonstrating the cultural principles through communication and actions, a number of employees should soon begin to adopt the culture throughout the company. Those early adopters are critical to the success of the culture, because those are the employees who set the example on a peer level.
At SBI, McKinnon wants the culture to filter downward, from corporate leadership to the leadership of the individual brands, then down to the departments within the brands. If each level has adopted the culture, the level below — the direct subordinates — should adopt at a much faster and higher rate.
If the message is consistent and predictable, the process of adoption should go much smoother than if you bounce around with your messages and are inconsistent with your communication level.
“The brand presidents and department leaders are people I hold to a pretty high standard,” McKinnon says. “I hold integrity and predictability at the top of my list. I demand it of myself, and I ask it of everyone else in the company, as well. I don’t think there have been many times where people have heard me say something that they didn’t already expect. The best thing a leader can do for an organization, for it to maintain its health, is to make sure that it is stable, that it’s predictable, and there are not a lot of surprises.
“There are times when changes have to be made, but when changes are made, you want as many people as possible to have expected it because that’s how you always communicate. By making an environment that is predictable, by highly valuing integrity, each brand president knows that they have to be the coach on those matters, and keep everyone informed.”
A culture of collaboration starts at the top, but the task of finding the pieces that can fit the culture starts in human resources. At SBI, McKinnon’s team gives potential new hires an education in the company’s culture from the time they sit down for their first interview — and even beforehand.
“It is part of our recruiting process,” McKinnon says. “We try to demonstrate to all potential candidates that this isn’t the easiest environment. They’re going to have to work with multiple bosses on multiple given projects. It is driven by high performance, and you work with multiple bosses, but it is a lot of fun and a lot of teamwork that we believe outweighs the traditional structure of having just one boss.”
McKinnon believes that collaborative workers who are willing to work for the good of the whole can be molded to an extent, but it is largely a product of someone’s personality.
Working in a team is either a strength or a weakness, and it is up to McKinnon and his team to determine between the two.
“I want to see if a job candidate is able to thrive in an environment like this, so if I’m interviewing a person for an upper management role, I’m asking them to give me examples of ways they’ve been collaborative,” he says. “Maybe it isn’t even an example from a work environment. Maybe it’s raising children, or other things they’ve taken on in their lives. But we’re looking for the type of experience that demonstrates that they are team players.”
Being a team player means you understand your role in enough detail to grasp how it fits into the larger puzzle of the organization. So once a person has passed enough scrutiny to warrant a job offer at SBI, the test doesn’t end there. McKinnon and his team want to see the new hire’s collaboration abilities in action. One of the main ways McKinnon gets all employees involved in a collaborative effort is through the company’s strategic planning process. Each person in the company, from the franchise owners up to the top, is asked to define their roles, and how they believe their roles affect the organization as a whole.
“We start by collecting information as to what each person believes their role is, and we start laying out goals. We ask each person what they think their contribution will be. There are no numbers assigned at that point, there is no resource allocation yet. It is strictly the beginning of the process.”
The answers to those questions are fed upward to the brand president, then to McKinnon and his leadership team, and ultimately become a part of the large-scale strategic planning process for the whole company.
Ultimately, McKinnon says collaboration is rooted in engagement, which is why people are immersed in the culture from their first interview. You have to build those bridges early and keep them maintained on a constant basis.
“The future of your company should be more preferable than what you have today,” McKinnon says. “You should want to move from here to there. That is really what helps motivate people to do their jobs better. When they understand that the reward is better than what they have today, people will pull on the rope harder.
“That creates buy-in, and when you get buy-in from employees, you get commitment. The person feels personally obligated to contribute at a higher level because they were part of the process that came up with the initiative. The employee feels that their voice was heard and their input values. And if you have produced a predictable, safe environment, they feel more willing to risk bad ideas. The more willing people are to throw ideas out there, knowing they’re not going to get thrown under the bus for having an idea that gets rejected, the higher the level of engagement will be, and you’ll be able to better sustain a collaborative culture.”
How to reach: Service Brands International LLC, (888) 700-6177 or www.servicebrands.com
The McKinnon file
Education: Accounting and finance degree, Seneca College of Applied Arts and Technology, Toronto
History: I moved around a bit because my parents were missionaries. I was born in Fredericksburg, Va., and grew up on Tortola, in the British Virgin Islands. Eventually we moved to Canada, and I finished high school in Toronto.
What is the best business lesson you’ve learned?
Everything is a risk, so as a leader, you have to be involved, you have to know who is important and you have to know who is going to be on your team during the tough times.
What traits or skills are essential for a business leader?
You need integrity, vision, enthusiasm and credibility. And you have to stay in front, too. It’s kind of like being a good flight attendant. If you’re in an airplane, you hit a pocket of air and drop 30 feet, everyone is going to look at the flight attendants. If they panic, everyone panics. If the flight attendants are calm, everyone stays calm.
What is your definition of success?
To achieve the goals that were set. We thought them through. We know they are reasonable. We know the effort that will go into accomplishing them. But success isn’t an end point. What is successful today isn’t necessarily successful tomorrow. It keeps going.
Bill McCarthy thinks the construction industry still has some difficult days ahead.
The recent recession really belted the segment on the chin, and in some locations, half of the area’s construction workers were unemployed. Depending on the region, there have been some sparks of activity, but a return to previous levels is still in the distance.
“When people ask, we really don’t see the construction economy returning to some sort of normal until 2014 or 2015,” says McCarthy, president of Pepper Construction Co. of Indiana. “There are still tough times for the industry.”
During a downturn, it’s a chance to learn some things about your company, develop some new strategies, build better relationships with your customers ? and even reinvent yourself.
“What we’ve tried to do is use this opportunity to go back and reinvest in the company so that we are a better company coming out of this economy than we were going into it and positioning ourselves for long-term growth,” he says. “That’s really been our kind of mantra and what we’ve done.”
To start looking at matters from a strategic planning standpoint, McCarthy had a SWOT analysis done at the senior level of the company that involved a significant portion of the employee population, questioning what were the company’s strengths, weaknesses, opportunities and threats and posing what should be done about those findings.
“We developed from that a kind of a reinforcement to continue working on some ongoing strategic initiatives and develop some new ones, some of which I’d say are more tactical and short-term things that really look at the challenges that we have right now with the economy and being able to address those in the more immediate term,” he says. “Most of what we do, however, is really focused on the long term.”
Here are some of the major initiatives McCarthy is using to engage employees, weather the tough times and give Pepper Indiana a larger share of the market.
Reinvest in employees
With 150 employees and 2010 revenue of $227 million, McCarthy was feeling the need to groom future leaders from the existing work force. But at the same time, he needed to build up the existing management team if the company was going to grow its market share.
“I was trying to come up with a plan to strengthen and invest in developing emerging leaders,” McCarthy says. “One of our good clients and friends ? Bob and Doug Bowen of Bowen Engineering ? recommended a program.”
McCarthy instituted a leadership development series with their advice. At Bowen, the program had been done three times already and had resulted in phenomenal success.
The heart of the 18-month effort at Pepper was the book and program, “The Leadership Challenge,” created by Jim Kouzes and Barry Posner. The program takes the approach that when leaders are at their best, they follow five practices: model the way, inspire a shared vision, challenge the process, enable others to act and encourage the heart.
One of the most effective methods to optimize the benefits of “The Leadership Challenge” was to involve senior management in the teaching efforts.
“We asked pairs of our senior leaders to teach a session, and it was really engaging, very successful,” McCarthy says. “That old idea that you really don’t learn something until you have to teach somebody about it is very powerful.”
In addition, exercises which expand the comfort zone of the participants were beneficial.
“We paired up one of the senior leaders in a better protégé relationship with one of our emerging leaders, so you couldn’t have a direct reporting relationship with that person,” he says. “It was only people who didn’t work directly with each other. The protégés chose the mentors and again ? a highly successful and kind of career development and coaching resulted ? and I think it was really good for our senior managers as well because it indirectly created some accountability for them.”
You might consider driving the program to levels lower that those at the leadership level.
“Also, develop a program as sort of a companion to this for your project assistants, the old word would be secretaries, who are vital communication elements for your projects between your client and all the other superintendants ? they are like the critical hub in all of that and could really benefit from this,” McCarthy says.
Another effort to get employees involved included obtaining a volunteer leadership position. McCarthy adapted this idea from one the Bowens developed. You need a certain size of management if you really want to let everyone do their job and also teach, but with some tinkering, you can find a way that works for your size of company.
“Ask each of the participants to find something they are passionate about in the community and take a volunteer leadership position,” McCarthy says. “It gave people the extra nudge to take that extra step to lead the baseball league.
“You can imagine it’s enriching for the person, it’s great for our company to get our people out in the community, and it was really a nice add-on to that program. You get to put into practice some things that maybe you don’t get an opportunity to do every day in your work life or your personal life.”
Do 360-degree feedback reviews of each participant and map those on the leadership challenge traits to measure those against the key leadership traits that authors Kouzes and Posner developed through their research.
“As we got to the end of the program, we redid the 360 and saw in a composite as we looked at each participant really significant improvements in all the measured areas,” McCarthy says. “For some of the individuals, some outstanding improvements occurred.
“In a competitive work environment, as we come out of this recession, I also think we’ve got people more engaged here than they have been. I’ve got lots of little stories that I’ve seen happen, but for me, it has really helped me in my leadership to go through the program. I think it has really been transformational to our company and will continue to be.”
Use peer teaching
While McCarthy was pleased with the leadership development progress, he needed to find a way to engage more employees to help grow market share. Using the peer-to-peer teaching method again, he put into effect a type of mentoring that would teach junior employees some of the knowledge senior employees have learned.
When some employees suggested a quarterly education session at job sites, McCarthy liked the sound of the idea and furthered reasoned that if a good suggestion such as this was put into play, that very act would help with engagement and buy-in.
This involves the junior employee who is at a job site who would give a mini-seminar to fellow junior employees about a special aspect of the job, or there might be a subcontractor come in and describe a procedure. The education session ? an opportunity to network with fellow younger employees ? is followed by a mixer or other event at the end where some of the more senior employees are invited to join in.
“I love it that these guys had the moxie to come and propose this thing and then go run it,” he says. “We’ve now handed it off because the two guys who thought of it are moving up a little bit, so they recruited two new young guys to do it. It is something that I think has been pretty neat for our company.”
This mentoring type program uses two effective tools to increase knowledge and build better teamwork: the peer method of teaching and the advantages of networking.
The peer method uses employee who are on the same skills levels to help create bridges to span gaps in learning. Since the peer teacher is on the same level, he or she can relate to other peers on a different level than would a manager, using examples that have a relationship with the job at hand.
For the peer teacher, he or she has to have the correct information to teach, and thus benefits are seen from the extra preparation. Formal lines are not likely to exist between peers as they do between a teacher and a student, and with less inhibition, information is more likely to be shared.
The benefits of networking are well-known: making yourself known and learning what others have to offer through a relationship you build and deepen over time.
One example of a mentoring opportunity involves using a tablet computer, such as an iPad, on the job site to check off quality completion points. Instead of sheaves of paper blueprints, builders work with computer files ? and up-and-coming employees as well as any employees can learn the latest methods from a peer tutor.
“Some of our young guys are using a lot of new technology; they have iPads, they have Internet-based programs that they are using to track what’s going on, and it’s just a great opportunity to explain to the other guys what are we doing on this project that could have application to our other jobs,” McCarthy said.
Reward the ideas
In an industry such as construction, there are many opportunities where an operation can be improved or a process can be altered to save time and money. McCarthy wanted to encourage innovations and reward the best ones while also making use of others that were proposed. If the ideas were coming from the frontlines, market share would increase as innovations cut costs and improved efficiency.
A quality group led by two journeyman project managers holds an annual quality concept of the year competition that recognizes the best innovative ideas. Winners are chosen by secret ballot among the employees.
“It says: that’s what happens when you innovate,” McCarthy says.
The competition is open to all employees. This year’s winner was a 25-year-old engineer who designed a device that could be put in windows being replaced from the time the current window is taken out to the time the new window went in to keep the area weather-tight.
While not only recognizing the idea, the process of innovation may open doors to other possibilities.
“Another interesting thing that happened over the course of this, the engineer came to my partner and said, ‘Hey, I would really like to switch career tracks into more of a field supervision career track,’ and I think part of it came from his experience on that project,” McCarthy says. “So we’ve switched him over to working with one of our senior guys on a large project where he’s developing his skills there.”
The winner for the previous year also moved up the ladder. He re-engineered the entire concrete process used at a hospital construction site.
“I remember when he won this thing, he stood up and said, ‘Boy, I think I’m winning an award for messing with something,’” McCarthy says. “So, it was great to see how that went. That guy is now one of our quality leaders. It’s impressive how that develops.”
As for the ideas that don’t win, their value is recognized, and they are distributed throughout the company as alternative valuable concepts. About 50 entries were received this year.
“Even though they didn’t win, they’re good ideas,” he says. “It’s amazing. Many of them were inspired after we had a challenge, after something didn’t work right or what did we do in the face of some adversity or difficult challenges. People are stepping back and saying, ‘OK, what can we learn from this so that we do get better?’”
How to reach: Pepper Construction of Indiana, (317) 681-1000 or www.pepperconstruction.com
The McCarthy File
Pepper Construction Co. of Indiana.
Born: Chicago, Ill. I worked for 15 years for Pepper Construction there. We had started a large hospital project and wanted to really to expand our presence in Indiana, so the CEO of the company at the time, Stan Pepper, asked if I would move here with my family to have a more full-service presence. So I moved here in 1995, and I absolutely love it. We had three boys at the time; we now have four. This is home to us. We absolutely love it. I visit Chicago probably once a month because that’s where our corporate headquarters is, my wife’s family lives there and so forth. But we just love Indiana, and it’s been a wonderful move for us.
Education: University of Illinois, degree in architecture. I also have a master’s in business from Northwestern University, from the Kellogg School of Management.
First job: I was a paperboy at age 11, and I loved it. My first professional job was with Pepper. I started with the company right out of college.
Who do you admire in business?
David Pepper. He is the CEO of our company. He’s a very different kind of leader than I am. I really admire that. To use a ‘Good to Great’ term, he is probably a Level 5 leader. He’s very authentic. He is a humble man, a very humble guy; down to earth. He doesn’t look like he’s a CEO out of central casting, but he’s a terrific leader. I think he does that by empowering others to lead. He always has an opinion on things, but he lets other people say their piece and gets some consensus out there before he puts his foot down on things. I think he does that extremely well. I think he has been a great leader.
What is the best business advice that you ever received?
Probably one of my more admired leaders is Richard Pepper. He has been involved in the company for probably the last 60 years, so he started with the company right out of college. He always says if you focus on the customer and serving the customer, that will lead to repeat business, and repeat business will make sure that you are profitable. It’s such a simple concept, but it’s one that really just says it all. So I would say in tough times that what I think is even more meaningful is to continue that level of commitment to client service.
What is your definition of business success?
Doing the right thing and meeting and exceeding the expectation of our clients. A job well done, win or lose, is what counts. We try to make sure that regardless of our challenges in meeting their expectations or meeting our own financial requirements that we first deliver the best job we can for them, because I think that’s what we owe everybody. Sometimes, even on a job that is a very successful job for us, there are other jobs I can think of that financially weren’t very successful but the client viewed them as successful.
Managers waste a lot of money hiring the wrong people.
For a hiring, estimates range from 1.5 to three times the salary for the full costs including things such as benefits, taxes, equipment, training, office space, etc. But, it is even more expensive to hire the wrong person. The position becomes open; you place ads, search, hire and train. The person starts and you realize he or she isn’t a fit, let him or her go and start the process again.
That can easily waste a year, yet it happens all the time.
Taking your time is crucial
The most important thing you can do when hiring a new employee is to take your time. Finding qualified people who are a near perfect “10” match for your company does indeed take a lot of time. Anything less than a “10” will drag down your business. More times than not, when a position becomes open, managers very often hire quickly. Why is that?
Some managers really dread the interviewing process. It’s expensive, it’s a hassle, it’s an add-on to your busy day, and it’s tempting to move someone into place quickly to get the job done. No matter what the excuse, nothing is more important than hiring the right people. There are many ways to make sure you hire “right.”
Pre-employment profiling is one very valuable tool. When you Google “pre-employment profiles,” there are more than 7 million results. Pre-employment profiles tell you potential employee tendencies (something you are not likely to find out in a regular one-on-one interview). Profiles can detect characteristics such as sociability, fit, how likely the candidate is to stick it out in a demanding work situation, leadership traits and the like. Really good stuff to know.
You can also have top candidates take more than one profile. Your management team should also take a profile “to match up” with potential hires. In fact, many profile companies will profile your managers free of charge in hopes of getting more business.
When we’ve gone against a profile because we suspected it was wrong, we regretted it later. Profiling is a great way to get hiring done right. It’s much more accurate than your gut.
Check background and credit
Background checks are another way to determine whether or not to hire someone. If a person is having trouble with their life outside of work, it’s likely that will cause issues at work. Background checks are on a par with drug testing.
Here’s another idea: Why not do a credit check? Anytime I’ve mentioned this, people have questioned whether it’s right or not. If they have trouble managing their personal finances, they likely will have issues at work. But there may also be extenuating circumstances ? such as a divorce or illness in the family. Use credit checks to help get the “complete picture” of a person — and give them a chance to explain anything about the report they wish. Sometimes you can learn a lot by how a person explains or rationalizes.
There are also many online companies that will provide specific tests that can help you determine a person’s knowledge. For example, you could have a potential accounting person take a bookkeeping exam. The testing company will grade the exam and provide feedback. Or, you could create your own test detailed to the job requirements.
Break bread and talk
Take the candidate to lunch. You’ll learn more about them, and it helps to get away from the workplace atmosphere. They will open up and you will, too. Have them drive. Is their car a mess? This might show you how they will keep their workspace and whether or not they are detailed-oriented.
Let their future co-workers meet with them, too. The co-workers may see something you don’t, and it gives the candidate a chance to hear about your company culture.
When you hire the right people you have so much more time to work on the business instead of in the business.
David Harding is president and CEO of HardingPoorman Group, a locally owned and operated graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted as one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at firstname.lastname@example.org. For more information, go to www.hardingpoorman.com.
The challenges facing small businesses regarding health care is a daunting one. Many are struggling to maintain health coverage for their employees while their bottom line suffers. Still others are unable to find cheap insurance quotes and are forced to reduce coverage or have had to drop health benefits altogether. This crisis has spurred action by the Obama Administration to reform the current health care infrastructure.
The Patient Protection and Affordable Care Act (PPACA) reforms many previous practices of private and public health insurance with the intention of making health care more accessible and affordable. The Act is intended to expand access to health insurance to millions of Americans, increase national spending of health services while lowering Medicare spending and remove many of the current limitations for pre-existing conditions, which otherwise would exclude coverage for many in need of it. It is hoped that the Act will help to answer many of the concerns that small business employers have for their employees and in turn, concerns the employees have for their families.
The legislation is welcome news for many, but there are a number of roadblocks to full realization. For one, complete implementation will be done in stages over several years. Secondly, legislation may be subject to extensive revision or even repeal, due to the many detractors of and federal actions against the Act. In addition, many small businesses are not happy with overall benefit to their own businesses, citing that the Act doesn’t provide enough to benefit their company or that they weren’t eligible. Still others state that they hadn’t heard of the credit at all. As a result, many employers are understandably reluctant to embrace any part of the benefits and search for a cheap insurance quote comparison, to no avail. While these and other issues are under debate, you can still help your employees with their health care and keep your costs in check:
• Gear Up for Compliance
Whether the Act is repealed or goes under significant changes in the future, employers should take steps to comply as much as possible with the PPACA’s current requirements.
• Get On Board
Taking advantage of all of the tax credits available is just plain good business sense. For employers who provide health care coverage, a tax credit of 35 percent bumps up to 50 percent in 2014. This will go a long way to offset insurance costs.
Co-ops allow for businesses to pool together resources to obtain health insurance, which increases buying power for small businesses while reducing overhead. A number of co-ops exist for employers to get a cheap insurance quote comparison.
• Workplace Wellness Program
Small businesses that begin a wellness program for their employees can take advantage of over $200 million in grants.
Many small companies cannot afford even cheap insurance quotes, so seeking government help where it’s available can do a lot to keep costs down and employees insured.
Olivia Wilkinson is the Senior Consultant for CheapInsurance123.
How will you transition your business to the next generation when it’s time to leave? If you are like more than 70 percent of closely-held business owners, you’ve put off making this important decision. However, without preparation, most family-owned businesses are not successful in making the ownership change when the time comes. In fact, nearly 70 percent of all family firms do not reach the second generation, and 88 percent of family firms do not reach the third generation.
Much like a scheduling a routine physical or creating a will, succession planning is critical, but not urgent, so it continues to be pushed lower on your to-do list. Resist the urge to put off doing this crucial task. Just do it! Here’s how.
Step 1 - Making the Decision
Making the decision to create a succession plan is the first step in the process for transitioning your business. Set a deadline of nine months to one year to complete your succession plan. Schedule four to eight hours each month into your calendar to work on your succession plan and dive into the process.
Remember that establishing a succession plan won’t tie you to one solution for exiting your business. It is understood that the plan will be a “living document” that you will definitely revise as your life circumstances change and as the marketplace changes. Having this ‘roadmap’ in place will make it easier to react to these life changes — and choose which fork in the road will best meet your needs. It certainly beats being lost in the wilderness with no map or GPS to guide you.
Step 2 – Know the Value of Your Business
Will the business you’ve worked so hard to build help carry you to retirement? Typically 50-70 percent of a business owner’s net worth is tied up in the business. Having solid data on what your business is worth will help you make management decisions that help you grow your biggest investment — your business — over time, just as you would grow the funds in your stock portfolio.
This “investor’s mindset” might include identifying potential risks and minimizing them, looking for sustainable growth in your product or service lines and keeping a close eye on cash flow. Certainly the earlier and more frequently you conduct a valuation of your business, the better informed you’ll be when making management decisions that will impact your company’s value.
Your business value becomes even more important as you get closer to transitioning it. Having the valuation information will greatly help you and your financial team plan for tax implications and investment strategies as you go through the transition.
It is easy for a business owner to develop an idea of what they think their business is worth. However a valuation that reviews financial statements and comparable businesses can result in a realistic, but totally different, number. Don’t be blindsided by unrealistic expectations. Invest in a business valuation and use it to make management decisions that will enhance the value of your business before and during the transition process.
Step 3 – Know All the Options Available
The best option for transitioning your business will depend on your goals and what is most important to you when the transition is completed. The options can include:
Giving It Away
- A popular option for business owners ensuring the continuation of the business through family members can include gifting all or part of the interest in the business to family members or employees, selling the company to family members or employees or a combination of both.
- Advantage: The legacy of the business continues.
- Disadvantage: Results in less cash, can be impeded by estate tax.
With today’s discounted business values, now is a great time to gift interest in the business. You’ll be able to gift a greater percentage of ownership (than during times when business values are higher), and the recipient will get a greater gift tax exemption through 2012.
- Employee Stock Ownership Program (ESOP) — for businesses with no family to transition it to.
- Advantage: Ensures the continuation of the business, provides employees with a greater interest in its success.
- Disadvantage: Can be costly to implement.
- Sell the business outright to either a financial or strategic buyer.
- Advantage: Strategic buyer, so owner normally achieves the maximum price.
- Disadvantage: Strategic buyer, so if purchased by a supplier, competitor or ancillary business in the marketplace, will often decrease duplication which may cut jobs, could be differences in culture for existing employees.
- Maintain interest in the business but walk away from the day-to-day duties.
- Bring in a professional management team.
- Allows owner to receive economic benefits while leaving the headaches to someone else.
- Owners maintain ownership until return on their investment can improve.
No plan can mean liquidation. If you don’t have a plan for the transition of your business, the final result can mean liquidation of the business and its assets upon your death. This often results in the lowest value for the business and can have a devastating effect on employees.
Step 4 – Assessing Where You, Your Family and Your Business Are
When you own a family business, it can be easy to put off having those important, strategic discussions with your family about the future of your business. However, communication between you and your family becomes an essential ingredient of a successful business transition.
Begin by answering some very specific questions. Determine what the goals are for the business. If the goal is to transition the business to your children or other family members, ask them their goals and desires. If they share your interest in the business, begin to plan how they can participate, how they will be trained and how you can help them become successful. Develop policies and criteria for hiring family members into the business. Will they be required to go to college? Work outside the business for a few years? Address family members who do not wish to be involved in the business. How will they be treated fairly in the estate?
Laying every family member’s goals and desires out on the table is extremely important for the succession planning process and for the future of the business. But it’s not always an easy process. Often family relationships can bring sensitive issues to planning sessions. Using an outside advisor that you trust can help you facilitate this meeting and keep the discussion focused on the future of the business and working toward meeting everyone’s mutual goals.
By developing a well-defined family strategic plan that is interwoven into the business strategic plan, you can build communication and consensus on common goals. This can lead to increase productivity and better management decisions.
Step 5 - Setting a Course of Action Involves Communication, Timing
Communication is a key element of a successful business transition. The sooner you determine your course of action and share it with your family and key personnel, the more quickly everyone can work together toward the goals.
Each person involved in the business must understand the chosen plan of action and clearly understand the one thing he or she must do, above all else, to make the plan successfully hit its targets. Each key member of the team must be committed to the plan’s success.
Timing of the transition is a second crucial part of a successful business transition. If you intend to sell your business, the best time to do it is when the economy is in an up cycle. But if you want to gift your stock in the business to others, make your gift when the business value is at its lowest.
Analyze key indicators such as economic conditions, interest rates, industry trends, buyer activity and your company’s performance and overall organization — and take the appropriate action at the most opportune time.
The merger and acquisition market is depressed in the current economy and activity has remained low for an extended period of time. If your transition plan involves selling your business, allow enough lead time to enhance your profitability and make the business more attractive to a buyer now. Then, you’ll be prepared to sell when the tide rises on the next economic wave.
Step 6 – Executing and Reassessing Your Plan
Your succession plan is a fluid document. Things don’t always go as you planned. Economic conditions may change, new regulations may impact your products or services, key personnel or family members may leave or change their mind about their role.
The key is not to give up or retreat. If conditions change, reassess your plan and determine alternative ways to reach your goals. Hold quarterly meetings with key personnel and family members that focus only on succession issues. These meetings offer an opportunity to remind everyone what the plan entails and how each key person contributes to the success of the plan.
Determine if the plan still makes sense under current conditions and take the opportunity to change tactics if the situation warrants. For example, the tax package that Congress recently passed makes the next two years the perfect time to gift interest in your business if this is one of your transition goals.
You, as the business owner, must commit to the plan and schedule time to make sure it is executed properly. If you don’t believe in the plan or don’t take it seriously, it’s hard to expect the people around you to help you execute it.
Building and implementing a succession plan for your business isn’t easy. It takes a strong commitment and a lot of time and attention. However, the process pays off in several ways. You’ll have peace of mind that comes from determining a logical exit plan for yourself, and you’ll know that all those around you know and understand your plan and willingly work to help you succeed.
You’ll know that the future of the business you worked so hard to develop has been determined, and the tactics to help reach that future are in place. And you’ll be better able to make strategic decisions about your business that may impact both current and future plans.
As the old saying goes, failing to plan is planning to fail. Improve the chances that your business will be successful into its next generation by beginning the succession planning process.
Tim McDaniel, CPA/ABV, ASA, CBA, is a principal with Rea & Associates, Inc., a regional accounting and business consulting firm. He specializes in business valuation and succession planning and also consults with family businesses regarding family integration and succession planning. He can be reached at (614) 889-8725 or email@example.com.
Safe to say, companies want to acquire the best talent who brings as much to the table as possible for a given position. To this end, it is appropriate and necessary to create a job specification that represents the ideal/perfect hire for your business. At the same time, it is important to be realistic with your expectations and be flexible to recalibrate the position requirements if necessary as pertinent information shows itself in the process. As you work to define the job specification, a management team needs to examine existing conditions and market variables (data) that could have an impact on the search. This data is critical in determining if the job specification is realistic. How you react to the data can determine your ultimate effectiveness in the search.
Proper due diligence prior to conducting the search is a smart practice. Knowledge about trends in your market, competitor data, compensation and where the talent sits geographically can prevent frustrations before they become realities. As an example, if your company requires a unique industry expertise for the role and your company is unique to a region for this industry, relocation is something that needs to be addressed prior to beginning the search. The management team needs to evaluate and prepare for a relocation package that will compel the right candidate to make the move to your city. If you are based in Cleveland and that talent pool is largely based in larger cities outside of this region, compensation and relocation become touchstones.
Ensure that you are utilizing the relevant data that you uncover in the search process and use that data to advance your search. Track things like response rates, salary data, bonus, medical premiums, org charts and even perspectives on your business that the sourced talent may share with you in the process. The answers to challenges in the search are almost always in the information collected if you pay attention. If salary data for the right talent is higher than your range overall, a decision has to be made on whether to upgrade the salary, downgrade the role or to continue to keep your fingers crossed in hopes that someone with the right background will actually fit your compensation range.
The candidates who make it into the interview process represent great calibration points. Actually assessing the talent in an interview can cause managers to rethink what is most important for their roles. It may even open their eyes to a new way to approach the talent need, causing the company to redefine the position. A test candidate can be the means to have a tangible that can be used to help build clarity and consensus specific to the role. Managers should have a level of patience with their human resources department knowing that the human resources person is not the expert in their functional area and despite a highly defined job specification, it still may be challenging to make the match. Managers should be willing to invest their time early in the process to assist human resources in focusing their search efforts.
Whether you are sourcing for a role relying on internal resources or utilizing a third party search firm, candidate flow needs to be tracked. If response rates and candidates moving into the interview process are low, one has to ask why and possibly adjust the strategy. Talent may be passive and not looking at a job posting, the internal recruiting staff may be overwhelmed or ineffective and/or the third party search firm may be missing the mark. The need for calibration can fall on one or more components of the process. Clearly, keeping your finger on the process and being flexible to alter the requirements and/or the search strategy based upon market variables and your process metrics can bring the search on track.
I heard it best from a CEO of one of our region’s major corporations. Perfection is the enemy of progress, meaning it is better to be moving forward at 80 percent than to be paralyzed waiting for 100 percent. I know that this person was not settling or advocating subpar performance. It is all about the moving forward and being able to see the true value in the 80 percent while recognizing other areas that may satisfy the 20 percent.
Chris Carmon is the founder and president of CGI (The Carmon Group, Inc.). You can find out more about CGI by going to their website at www.carmongroup.com.