Zack Schuler was reading a book about leadership when a stat struck him — 25 percent of a CEO’s time should be spent recruiting.
Schuler can’t argue. Hiring is crucial as his company, Cal Net Technology Group, continues growing. In 2007, he added nine people to the then 40-person IT consulting company, spurring 20 percent growth in one month.
“Unequivocally, the No. 1 challenge is finding the right people,” says Schuler, founder, president and CEO. “If you have the wrong people, it’s devastating to the organization. You cannot achieve sustainable growth without paying a lot of attention to your recruitment process.”
Cal Net, which has offices in Northridge and Anaheim, almost doubled its revenue between 2005 and 2009.
Create a process. We’ll screen 200 resumes [for a network engineer position]. We’ll boil that down to 10 people that we talk to on the phone. We’ll boil that down to three or four people that we bring in for an in-person interview. Then we’ll boil that down to one or two people to send through our lab, where the engineer spends eight hours building a small network environment.
We’ve implemented similar practices within (other) parts of the company. For example, when it came to hiring our controller, we hired our CPA firm to administer an accounting exam, which took three or four hours to complete.
If they don’t score well on the exam, you can take them out of the race. It actually shows somebody’s interest in the position if they’re willing to go through hours of interviewing and test-taking in order to come on board with us.
Several candidates have said, ‘Are you going to pay me to go through the exam?’ at which point, we chuckle and say, ‘No, we’re not, and as a matter of fact, you’re not even going to be taking the exam now for asking that question.’ When you tell somebody, ‘You’ve got to take an exam,’ you can gauge their attitude. [If] they’re like, ‘Great, I’d love to show you how well I can perform,’ that’s the kind of person we want to hire.
Inspect resumes. If somebody says something [on their resume] like, ‘Possesses experience with server operating systems,’ that’s not good. I want to see: ‘Expert in Windows Server 2008 R2.’ I want them to list out their skill sets in detail. (Frequently,) the candidate could be qualified for the position, but their resume is just too thin to attract my attention.
Another thing I love to see is where somebody will have received promotions and they’ll have dates listed like, ‘From March of ’07 to February of ’08, I was at this company in this position. Then from February of ’08 to December of ’09, I was at the same company but in this position.’ First, I like the fact that the person was promoted. The second thing that I like about it is that they remembered when they were promoted, and if they remember that, it means that job growth is important to them.
If somebody shows up and they have a list of references ready instead of, ‘References available upon request,’ that’s a positive. It’s like, ‘Hey, I’m good. Call these people and ask them.’ I also love to see references of former bosses as opposed to a peer. It’s like whatever the departure was, it wasn’t bad.
Start conversations. They can be the best technical people in the world, but if they don’t know how to interface with our client, it’s just not good. The skills come through in our exam. But if they don’t have the attitude, they won’t even make it to the exam. The first thing that we’re going to hire on is attitude.
It all boils down to, when they show up for the interview, if they’re a good conversationalist. One of the questions that we ask is, ‘Tell me about your last vacation.’ We want to ask a question that they don’t have a prepared answer for. It gives us an opportunity to see what their dialogue skills are like. They don’t have a canned answer for it because nobody asks that question. We’re able to figure out how well this person’s going to do [with clients] just through their process of communicating with us through the interview.
How to reach: Cal Net Technology Group, (866) 999-2638 or www.calnettech.com
Back in 2002, when Peter Shaper joined the company that is now known as Harris CapRock Communications, the business looked much different than it does today. At that time, 80 percent of the company’s business came from the United States, mainly from energy customers who needed communications and network services for their critical operations.
Then, thanks in part to 2007’s acquisition of Arrowhead Global Solutions — which became CapRock Government Solutions and produced double-digit growth — and last year’s acquisition by Harris Corp., CapRock tapped into new growth avenues. The Houston-based company is expanding the services it offers, the vertical markets it serves and the geographic footprint it reaches. For example, it entered and provided service in 35 countries in 2009, shifting the balance so that 70 percent of CapRock’s revenue today stems from outside the U.S.
“The reason we have continued to grow even during the recession is by creating more breadth, by diversifying the verticals we’re in, diversifying the geographic markets we’re in, diversifying the services we deliver,” says Shaper, group president. “That diversification has made a difference.”
CapRock has seen 202 percent growth in the last three years alone, rocketing from 2006 revenue of $119 million to 2009 revenue of $359.3 million. That pattern landed the company on the Inc. 5000 list of the fastest-growing private companies and Space News’ list of the top 50 companies in the space industry, and it earned Shaper the distinction of Via Satellite’s Satellite Executive of the Year for 2009.
But accolades aren’t a reflection of rampant, unchecked growth. Shaper sticks close to the company’s core to evaluate new ideas and opportunities. That keeps CapRock growing in the right direction and stabilized for the future.
“Not all markets, not all parts of the world go into recession at the same time, and so by having the real breadth, we get some areas that are countercyclical so they’re growing when others are not,” Shaper says. “It’s rare that we find all areas of the world, all markets, all services growing at the same time, but as long as we have some that are, we can continue the overall growth.”
Set the course
For CapRock to grow in alignment with its core, Shaper has to lead the way with a clear strategic vision for the course.
“Have some vision for the future for reaching that next state or reaching a new height or a new goal,” Shaper says. “Share that with other people so they can see it, too, so they can all really work toward that same goal.”
Shaper starts with five imperatives encompassing the company’s vision. Because they’re considered competitive differentiators, those aren’t publicly shared — but they are certainly repeated internally as often as possible. Shaper takes every opportunity, from new employee orientation to quarterly all-hands meetings to strategic planning sessions, to align his 757 employees around CapRock’s vision.
“We tell all of our people that your activities need to be working toward those strategic imperatives, and they better be either growing revenue, growing margins or growing the team,” Shaper says. “Be able to communicate that strategy to (employees) … being very clear about how those goals are aligned with where we’re going strategically. It’s that repetition of the message that allows people to really start to get it.”
The goal in communication is consistency, and the key is relentlessness. It may get tiring for you, but repetition will keep employees motivated and keep you focused.
“To a certain extent, they are hearing the same old thing over and over again. To the extent that we are energetic and enthused about it, then people don’t mind hearing the same thing over and over again,” Shaper says. “Sometimes you feel, ‘Boy, do I really need to go repeat this again?’ The answer’s always yes because there are always people who need a refresher on what we’re doing and where we’re going and why. It’s a great refresher for us, the management team that’s presenting the same imperatives over and over again, because it keeps us focused on what’s really important.”
Communicating your course also predetermines a compass to measure potential moves. By articulating your differentiators ahead of time, you set the filters that opportunities must pass.
“Any new product, any new market, any new service, anything new we want to do, we measure against: Is this really playing to our strategic objectives? Does this further where we really want to go in terms of our long-term vision of the business?” Shaper says. “If it’s not helping us along that path, then it’s probably not something we want to do.
“If it’s not our core strength where we have some reason to have an advantage, I’d rather not invest our time and our money that way. Where can we really compete in an advantaged way such that we have a good chance of winning and growing and being successful in that market?”
When you stick consistently to that core measuring stick, it’s also easier to communicate course adjustments to employees. You know how to explain a move into a new sector if it passes through your core filters.
“Here’s a new market we’re moving into — the maritime market. Here’s why we’re moving in,” Shaper would tell his employees. “If you look at our strategy, it fits squarely into where we’re going and what we want to do. Folks who are in remote and harsh conditions need mission-critical communications. They’re on a global basis that can leverage our scale. By lining up the strategic elements that make it make sense, it allows everybody to understand why we’re doing it.”
Shaper’s job would be easier if all he had to do was communicate the vision and then stand back as opportunities rolled in. Obviously, a lot more legwork has to happen before the company decides to pursue an idea.
He shares that workload with employees by equipping them to vet opportunities before they get to him. The constant communication serves to educate employees about the evaluation process they should use.
“We have to teach folks who are going to champion new ideas, new products, new services and new geographies how to evaluate them,” Shaper says. “Make sure they understand the strategy and where we want to go and how we’re going to measure whatever ideas they bring, so that the people on the front lines are filtering these out themselves.”
Some champions get more specific training because their positions involve finding ideas to turn into products. Some CapRock employees, for example, are tasked with geographic expansion, and others in R&D, engineering and development are responsible for ushering potential products and services to Shaper’s desk.
“Generally, for it to get any legs, someone has to decide, ‘I like this so much I want to be its champion. I’ve heard it; I know three or four other people who’ve heard it. I’m going to go out and do a little investigation. I’m going to put together a presentation and say, “Here’s something that we should do,”’” Shaper says. “Whether it’s a new product or service or changing something we have today, without a champion nothing really ends up getting (done).”
Depending on the opportunity, Shaper has different expectations for a champion’s preliminary research. A brand-new product or service would obviously require the most prep, ranging from customer discussions to market sizing and economic viability tests. A simple cost-saving idea, on the other hand, might not need as much background analysis.
The champion’s responsibility is then presenting the case to management.
“That champion will push the idea up the chain,” Shaper says. “Eventually, the executive committee will look at it, talk about it, push back, maybe ask for more information and say, ‘Well, that makes sense. It fits in our list of priorities to invest in. Here’s the capital to go make something happen.’”
Continuous communication indirectly paves the way for this pass-off. You can’t expect employees to present an opportunity to you if they don’t have an established connection. Interacting with employees regularly will make them more comfortable sharing ideas.
“By (communicating) often, doing it frequently, getting out and meeting people so it’s not the first time they’ve talked to me face to face, doing it in a casual setting — either walking around the office or at office events — it just will make the executives more real, more approachable,” Shaper says. “Really connecting with the employees is critical to be able to lead them. That consistency in forming connections with employees is what builds the bridge and allows them to be very courageous and transparent in bringing things to you.”
Run field tests
If opportunities are still standing after the champion brings them to Shaper’s executive team, then they have to face the field. The next test is how CapRock customers react.
“We will always take these ideas and go out to some key customers — typically key customers who we would like to be the initial buyers — and we will make sure we spend time with them on, ‘OK, this is what we’re thinking about doing. Here’s the need we think it solves. Is this something that you would buy, and where does the price point need to be?’” Shaper says. “We’ll have customers come in and help us develop what the end solution is so that we’ve already got a known market by the time we’re ready to go to market.”
You could conduct general market research and read articles about the state of the marketplace, but Shaper prefers listening to the voice of the customer. In addition to regular one-on-ones between customers, salespeople and management, CapRock sends out surveys and sets up additional events to solicit feedback, such as the Customer Advisory Board, or CAB. CapRock invites a broad cross-section of customers from different markets, different areas of each market and different functions within client companies to achieve a diverse spectrum of perspectives.
“We run the CAB as a forum for them to talk and us to listen,” Shaper says. “We facilitate the discussion, but we try to do as little of the talking as we can because that’s where we get the real value — it comes from listening, not from talking.”
To get open feedback, CapRock keeps itself out of the conversation until the end. The two-day session starts with an objective focus on customer needs before shifting into a company-specific evaluation.
“Our core focus at our CABs is usually what’s coming next,” Shaper says. “What challenges are you facing? What opportunities do you see? We have discussions all around the future — what they see coming and what’s happening.
“We specifically carve off a separate section where I stand up and ask them, ‘What are we doing well at CapRock, and what are we doing poorly?’ so that the discussion around the marketplace and the challenges and opportunities doesn’t become colored by commentary around CapRock. … Using their challenges and opportunities at the end of the two-day meeting, they help us prioritize: Here are the most important places for us to spend our development dollars. Those next products, services, capabilities that we should be investing to generate are based on the two days of discussions that they just had.”
If done correctly, customer feedback solicitation is continuous. You’re constantly gathering input from meetings with customers, survey results, advisory board sessions and quarterly marketplace reports. Keep your ears perpetually perked for patterns.
“It’s a steady stream, and you’re always listening for trends within that stream,” Shaper says. “(We) all sit down and discuss what are we hearing, what’s going on, and the trends will start to come up: ‘Well, I’ve been hearing this three, four, five times. We ought to think about acting on this.’ As you start to hear the consistency and something becomes a trend, then you start to believe that it might be real and you take action.”
Shaper relies on this process for testing ideas against CapRock’s core-centric success, separating growth opportunities into pursuits and passes. Throughout the process, he also gets employees on board with the direction they end up taking.
“We want to have those opportunities to really kick ideas around, discuss them with some emotion and then know that we’ve got to make a decision,” Shaper says. “Once we make a decision, we understand why it wasn’t just a random decision but we’ve got some rationale why and we’re all going to back that.”
How to reach: Harris CapRock Communications, (888) 482-0289 or www.caprock.com
The Shaper file
Harris CapRock Communications
Education: Master of business administration degree from Harvard University and bachelor of science degree in engineering from Stanford University
What was your first job, and what did you learn from it?
My first job was a summer job when I was in high school, and I was a gofer. I literally drove a truck, picked things up, dropped them off, drove things all around town, picked up equipment, supplies. The most important thing it taught me was that I wanted to be one of the guys who was working in the office, not one of the guys who was working out on the manufacturing floor.
Whom do you admire most and why?
I admire children most because they have such a fantastic positive outlook on life and none of the weight of negative attitude and bad things having happened to them. That’s just such a wonderful way to go through life. I wish I could still have a child’s attitude.
If you could have any superpower, what would it be and why?
It would clearly be the ability to control time. One thing I definitely don’t have enough of is I never have enough time. So if I had the ability to slow time down and create more for myself, that would be my superpower.
If you could have dinner with anyone from any time, who would it be and why?
I would probably choose Jesus because so much of world history since then has been dominated by differing religious views; the crux of them all is during his lifetime, from the Jews before and after, to the Christians, to what that did to the Muslims. I just think that’s a fascinating crossroads in the history of man.
What’s your favorite stress relief?
It’s exercise — playing basketball.
What’s your favorite local spot for a business lunch?
I love going different places all the time so I guess my favorite spot is always the next one that I haven’t tried.
Every morning, Jim McCann awakens with one goal in mind: to move his company, 1-800-Flowers.com, forward.
“We are in a constant state of reinvention,” says McCann, the company’s CEO. “It’s like Andy Grove’s book, ‘Only the Paranoid Survive’; we’re very uncomfortable when we’re not moving forward. The most uncomfortable state for us is if we’re status quo. If we’re status quo, the world is continuing to change and we’re just not changing.”
That’s because innovation seems to come naturally for McCann, who parlayed a single flower shop in Manhattan into the world’s premier florist and gift shop. He accomplished this by thinking differently about how to interact with his customers and employees, along the way rewriting the definition of what a flower shop looks like.
In the 30-plus years since McCann started the company, he and his brother, Chris, who serves as president, have expanded through organic growth and acquisitions to become a public company with thousands of employees and annual revenue in excess of $700 million.
Beyond the well-known 1-800-Flowers.com brand, McCann’s holdings are widespread and include Cheryl & Co., The Popcorn Factory, Fannie May, Harry London, Ambrosia, BloomNet and 1-800-Baskets.com.
Smart Business sat down with McCann to discuss the power of innovation and how to build meaningful relationships with customers.
Q: What are some of the ways you applied innovation to adapt during the recent economic downturn?
We looked at this as a great opportunity, especially to find talent, but we did some other things as well that helped the company. We made sure that we were able to know the customer and serve them well. We took care of the finances and preserved our cash position. And we decided to invest for the future. The investments we made were in talent, technology and new business lines.
What a great opportunity to attract people that we otherwise might not have been able to attract. We also put money into video, social networking and mobile applications. And, we launched new businesses — Celebrations.com, a social network, and 1-800-Baskets.com. People thought we were crazy to do this in the midst of a recession, but they’ve proven successful.
Q: You’ve also been on an acquisition spree, not just in recent years but over the past decade. What’s been your strategy there?
The idea of following a strategic planning process is important to building your business. There may be things that are easier and quicker, but they don’t fit into the diagram that we’re developing to build 1-800-Flowers.com. We’re a public company, so the challenge is that the outside world may not understand why we’d buy rather than build. At that point, we tell them to trust us. We can’t detail the whole plan, but we explain to them that this piece isn’t just willy-nilly; it’s part of something larger.
That may scare away some investors in the short term, but those longer-term investors who have seen us make moves and watched them come to fruition will make their own judgment and, hopefully, trust us that we know what we’re doing.
We can’t not do things because some people don’t understand. We have to keep thinking ahead and looking at good opportunities for the company to grow and become better.
Q: How do relationships fit into the equation of interacting and serving your customers?
We have 30 million customers, and we still spend a lot of time trying to create relationships. You can measure relationships, but it comes down to the quality. You’re measuring the quality of a relationship. When we look at a relationship with a customer, the more engaged we can be with a customer, the better the relationship is.
I need a lot of help running our gift shop at 1-800-Flowers.com, and if I get the help from customers, that makes my job easier. It makes my input better, and I think it makes it more interesting and more fun for our customers to be part of the process.
I’ve been trying to do that for my entire life. Today, we’re doing this through technology, and it’s been getting easier every day because of the evolution of the new technologies. Whether that’s Facebook or Twitter, it makes that engagement not only easier and possible, but if you’re not doing it, you’re missing the boat. I want my life to be fun, more interesting. I want to have more and better relationships, and technology allows me to expand the realm and depth of relationships with vendors, staff people and customers. It’s all about the relationships.
Q: So how do you build those relationships?
Here’s one practical example of how we do things. About two years ago, a lady in Ohio wrote to me and said, ‘My sister tried to make this floral arrangement for my other sister’s bridal shower. You can see from the photographs [that] it’s a mess. But I bet you can figure this out.’
So I worked with some of our talented florists and we came up with a terrific design for a margarita bouquet. We took one of those 2-foot-tall margarita glasses and we did a flower arrangement, color appropriate, with attachments, and made a margarita display for the wedding shower.
Well, as we did this, other people both inside and outside the company heard about it, including friends of the bride, friends of the woman who asked for our help, members of our staff and several of our customers. They all got involved to help. When we were done, there ended up being this whole group of people conspiring and collaborating on these designs. And it was a great success.
So we saw an opportunity for a new product, and when we decided to take it to market as another idea for the company, I went back to the same group of people and engaged them. I said, ‘How should we market this? What should our advertising be? What should we say on the ads?’ So our customers suggested the product, designed the product, suggested the marketing platforms, designed them, contributed to copy and made the single biggest floral introduction in the flower business. And it was all customer-generated.
Q: In what ways have the customer service systems you’ve built played a part?
First, I challenged our people who were dealing with our customers to handle any issue that comes up in such a way that the customer is inspired to write to me about you and what you did and how you did it.
It’s not so much what you do as much as how you do it and how you empathize and directly connect with that customer. So I tell our people to handle it like you want to inspire that customer to, on their own, write to me about how you handled their issue.
The second thing I tell employees is that if you aren’t sure what to do, read this book, and I hand them a book that’s a set of binders filled with letters customers had written to me about the wonderful customer service treatment they received from a driver who brought a package, for a telephone customer service person or online help service person who helped them with something. It’s not like it hasn’t happened before, so I tell our people to read through this ledger and it will inspire you to do something above and beyond for the customers.
Q: You’re known for your innovation. Technology certainly is an area where the company has flourished. So how do you use social media and Internet marketing to push the company forward?
We’re using technology to get more intimate and personal with other customers. It sounds like a contradiction, but it isn’t. It’s true. How else can we get to know our customers well and learn how to serve them better? How can we recreate the personal relationship I had with our first 30 customers in our 700-square-foot store in Manhattan that we had 30 years ago? Thirty years later, we have 30 million customers, and the only way we can learn about them, to serve them better, to engage them, to get them to help us, is to use technology.
(A customer) might not be that interested in helping us design a new product and she might not be interested in helping us to come up with a new saying, but she really has an interest in promotional things because it’s an area of work she’s interested in. If we give her the opportunity to not be bombarded in the areas she’s not interested in but tickle her to see if she’d like to get involved in helping with promotional pushes, we engage her on something she’s already told us she might be interested in and benefit from her thoughts and outside-the-box thinking. It’s a good way to engage a customer without having to sit down across the table from her in her kitchen and talk about the ideas.
Every day we figure it out a little bit better; we take three steps forward and, hopefully, take only one or two steps back. We weren’t part of Twitter two years ago, but it’s a big part of our life today. What a great opportunity we all have to interact with our audience and find out what’s going on in their world while sharing what’s going on in our world.
Q: Let’s talk about being entrepreneurial. In what ways have you kept a culture of entrepreneurship in the company even as it has grown?
When people think about entrepreneurial cultures, it’s difficult for us to get our arms around that. But as I think about that and some of the more entrepreneurial people and organizations I know, such as the Ted Turners and Ted Waites (Gateway) or Wayne Huizengas of the world, those entrepreneurial heroes of mine, did they make (fewer) mistakes than other people? No, they probably made a lot more. The remarkable quality they had and that we try to embody is, when we take that shot to the stomach, it hurts, we fall down, but we dust (ourselves) off and get back up. That’s what it’s all about. We don’t worry about a mistake we made four years ago but instead worry about whether the mistake we make tomorrow is one we don’t get up from and learn from. We just have to keep moving forward.
How to reach: 1-800-Flowers.com, www.1800flowers.com