As businesspeople and business leaders, we have full plates. Whether it’s balancing work, home, community, social obligations, aggressive business targets, strategic initiatives to sponsor/support/implement, unwelcome external influences, or customers expecting more for less, prioritizing all of that can be a daunting challenge.
Prioritize and focus are the business vernacular terms we always hear. We smile grimly, mutter “uh huh,” and return to our overwhelming pressure cooker without changing a thing about what we do or how we are approaching our work.
But those words really are the key to managing our crazy world of over-commitment and under-capacity — when combined with two more words: critical few. Prioritizing and focusing on the critical few results, products and people who truly matter more than others is job No. 1 for executives.
How to look at it
The facts: You have a critical few customers, without whom your business would dramatically suffer. Ensure that your organization serves those customers disproportionately well. That does not mean ignore the others; ideally, all customers would be served flawlessly.
You have a critical few products/offerings that make up the 80 percent in the 80/20 of your business. Ensure you get them flawlessly right. Your brand is set by those core products or services. If you get it wrong there, the rest may not matter.
You have a critical few employees/direct reports who play a disproportionately impactful role in the success of your business. Your time should reflect that understanding. It doesn’t mean ignore everyone else; it simply means that you cannot leave to chance that your key people are sufficiently directed, motivated, feeling challenged by their work and appreciated.
They are people you can build the rest of the organization around. You’ve got to get it right with these folks above all others and then rely on their help to reinforce and motivate the rest of the organization.
Optimize and organize
So clearly, identifying your critical few customers, products and people is job No. 1 for results. How do you optimize your short list of the critical few? Simply answer these three questions:
? What are the critical business results you need to deliver?
? Who are the key performers who will deliver those results?
? What are the critical few behaviors that your key performers must do?
That reads like common sense, and it is. But achieving it isn’t so simple.
Don’t forget reliability
You know your critical results and key performers right now, but what about those all-important critical few behaviors that people must do to make it work? If people don’t do the right things, you won’t get results.
Many initiatives are designed to get those critical few behaviors to occur — behaviors that we think should automatically happen, but they don’t. How do we get people to do the right things reliably?
It’s not about making people happier at work. Many happy workplaces go belly-up. It’s easy to be distracted by things that create fun and do little to improve performance.
It comes down to (1) pinpointing those actions, which if performed reliably, will move the needle for your organization and (2) ensuring there are reinforcing consequences for those critical few behaviors and corrective consequences for behaviors inconsistent with what you need. That alignment is necessary, and it is often overlooked.
So in a nutshell: Ensure focus on the critical few results, people and behaviors. Don’t allow yourself or your organization to be distracted. Without the critical few happening well, you will spend many more hours fixing things than growing your business. ?
Great Lakes Science Center, one of the nation’s leading science and technology centers and home to Northeast Ohio’s NASA Glenn Visitor Center, has named Dr. Kirsten Ellenbogen as president, starting May 6.
Ellenbogen brings more than 20 years of experience as an informal educator, learning researcher and senior leader to her new role as the third president for the science center. Her energetic leadership during the last two decades has advanced informal science, technology, engineering and mathematics (STEM) education through four centers with a national or international scope and a combined funding of more than $30 million.
Glenmede, a privately held and independent investment and wealth management firm, announced that Andrew W. Kirkpatrick joined the firm as vice president of wealth advisory in the firm’s Cleveland office. Kirkpatricks’s areas of focus include specialized fiduciary matters and client service with an emphasis on multigenerational trust administration and estate planning.
Ulmer & Berne LLP is pleased to announce the addition of Laura McBride as a partner in the firm’s litigation department. Based in the firm’s Cleveland office, McBride will be the co-chair of the firm’s Energy, Natural Resources and Utilities Practice Group.
Her experience includes public utilities and public law litigation, federal and state contracts and regulatory matters, and business litigation of all types. She also has significant experience in health care and life sciences matters.
Howard Hanna has recently announced that Howard Hanna IV, president of Howard Hanna Ohio & Michigan, was named to the Leading Real Estate Companies of the World (LeadingRE) board of directors. LeadingRE is a network of 550 top independent, local and regional brand-name international brokerage firms in residential real estate. The board of directors reads like a who’s who of real estate, with some of the best minds in the business guiding the organization.
Collection Auto Group is pleased to announce that, for the seventh consecutive year, Mercedes-Benz of North Olmsted has been recognized as one of the country’s top Mercedes-Benz dealerships.
Since 2006, the local dealership has received the prestigious Best of the Best Dealer Recognition Award every year from Mercedes-Benz USA. The local dealership is one of only a handful in the U.S. to receive the honor for seven years in a row.
Welty Building Company Ltd. has announced the appointment of Donald Lydon as group president of Welty Facilities Services. In this role, Lydon will be responsible for overseeing the facilities management to extend the life of facilities and equipment, reduce operating costs and improve energy efficiency for Welty customers.
Lydon comes to Welty after 20 years with Zaremba Management Co. where he was vice president, commercial properties, and was responsible for land acquisition, development and construction for the company’s offices and industrial building portfolio. l
In January 2002, Theodore Zampetis took over as president and CEO of a struggling Shiloh Industries Inc. The leading manufacturer of advanced metal product solutions for high-volume applications in the North American automotive, heavy truck, trailer and consumer markets was $290 million in debt and the banks would not finance the company any further.
Zampetis had only a few weeks to either file a 10K with the SEC or file for Chapter 11 bankruptcy. Rather than roll over and give in, he began to execute a strategy, and he had to do it quickly.
“I got together with my president and my plant head and said, ‘Here’s what I am going to do. Here’s how I’m going to reduce cost and start creating cash flow tomorrow,’” Zampetis says.
Most people had all but kissed Shiloh Industries goodbye but not Zampetis. He knew he could turn the company around.
“We held a teleconference with the banks and all 12 entities were in on the call, and we explained the plan,” Zampetis says. “‘Here’s what is happening, here’s why it’s happening, and here’s what I’m going to do in the next 15 days, 30 days, three months, six months,’ and on and on.”
With time being of the essence, everybody started signing on quickly. Zampetis went around to each customer and plant to tell customers and employees what has happened, why it has happened and what the company’s plan was.
“I told them, ‘You will look back in six months and be proud of what you accomplished,’” Zampetis says.
Here is how Zampetis nursed Shiloh Industries from the edge of bankruptcy and brought it back to life.
Stop the bleeding
Once Zampetis made everyone aware of the dire situation the company was in, he began to focus on stabilizing the business.
“It was execution in three areas: No. 1, I’ve got to stabilize the company because the company was sick, demoralized and it was dying,” Zampetis says. “Once we stabilized the company, the next thing was figuring out what was the root cause of the problem.”
Zampetis had to understand where the company made money, where it lost money and why it was making or losing money.
“Once we started characterizing the process at each plant internally and focusing internally, it became clear to me what the priorities were in the bigger picture of the company and what I had to do,” he says. “Yes, there were a thousand problems, but I didn’t care about the thousand problems. I only cared about the top 10 problems and how I could attack them quickly one by one.”
At the same time, there were external pressures. For instance, one of Shiloh’s main customers had good news for the company. It still had a multimillion-dollar program with Shiloh that it wanted to continue with the organization. The only problem was that Shiloh had no cash to fund the program.
“I said … ‘We are going to the customer and let me talk,’” Zampetis says. “The next day, we were at the customer talking to the highest level in purchasing, and I told him that, in my 31 years in the business, I never thought I would go to the customer and politely, but with tears in my eyes, tell him that he’d better take the contract he awarded to us and give it to someone else, because we simply have no cash.
“‘Under your terms and conditions, we cannot do it. However, if you help us, we can probably do it and do it better than anybody else in the world.’”
With the banks unwilling to budge because the company was $290 million in debt, Zampetis and the executive director of purchasing at the customer company negotiated back and forth until they agreed to help Shiloh Industries fund the program for them.
“I knew one thing; even though this would be a battle going forward, there was only one way to go, and that was up,” he says. “From that point on, Shiloh Industries started climbing and generating cash flow and applying that cash flow back into the company to protect our critical skills and technologies.”
Shiloh’s critical technologies were devastated. The company needed to understand how to bring them up to be best in class and, at the same time, not to let any program down or make any customer dissatisfied.
“We started generating cash flow and applying it intelligently and above all, started deleveraging the company,” he says.
Once the company began to slowly recover, Zampetis had to make sure to communicate throughout the organization so people stayed focused and kept moving forward strategically.
“If we are going to reinforce a culture of transformation, we have to communicate and we have to communicate not only our problems but give our employees, from top to bottom, an idea of what is the source of the problem,” he says. “You have to have a disciplined mind to characterize the process quickly and identify and measure the impact and analyze.”
Moving forward, Zampetis made sure that any decision he made was strategic.
“When the company is in deep trouble, you’ve got to make decisions strategically about all the wonderful ideas that got you into the problem to begin with,” he says. “The old management team did not learn their lesson.”
Shiloh had three objectives: No. 1, to stabilize the company and start generating cash flow, No. 2, to apply that cash flow to deleverage the company and rebuild the company internally, and No. 3, to develop its people to be disciplined so such past situations never happen again.
But just as the company was regaining its footing, the recession of 2009 hit. Chrysler and GM, which make up 60 percent of Shiloh’s business, filed for bankruptcy.
“Everybody thought we were done,” Zampetis says.
As signs that the economy might be in trouble began to spread, Zampetis and Shiloh Industries were taking precautionary measures.
“If you look at our records and look at what happened in November 2008, I took my salary down to almost nothing because I knew there was going to be a disaster,” Zampetis says.
Shiloh’s sales went down 53 percent, its variable manufacturing cost went down 49 percent and its fixed cost, including Zampetis’ salary, went down 39 percent. However, the company made sure to protect its critical skills during the recession.
“I showed our leadership that in a moment of crisis I wasn’t thinking about lining my pocket,” he says. “I told them, ‘We are suffering and sacrificing right now, but at the end of the day, you will look back and be so proud.’”
During 2009 when all of this was happening, Shiloh Industries ended up generating $18 million extra free cash flow and reduced debt.
“In 2010, we were expecting the industry to start picking up because some of our competitors went bankrupt in 2009, and we picked up a lot of their business,” he says. “Our sales revenue from 2009 to 2010 went up 69.7 percent.”
The company’s productivity nearly doubled, its technology became extremely efficient, quality was exceptional and the employees were pumped up about the company’s progress.
“The year 2011 was a wonderful one, and 2012 was a very good year,” Zampetis says. “We now are a clean-balance-sheet company. We have advanced technologies that are the best in the world.”
Today, Shiloh Industries is a $600 million company with 1,400 employees. With the company back to pre-crisis levels, Zampetis decided to retire as president and CEO in December 2012. However, he left the incoming leadership with a very stable company.
“It will be a two-point approach,” he says. “One is to maintain all the good disciplines and don’t water them down because that would be a big mistake. But then the company’s mission looking forward is growth.” ?
How to reach: Shiloh Industries Inc., (330) 558-2600 or www.shiloh.com
Bernie Moreno has always had a great love for cars. They had to be in his life. So as a 25-year-old, he went to work as a general manager of Herb Chambers’ Saturn dealership in Boston. During the course of 12 years there, he became Chambers’ vice president.
Moreno’s success caught the attention of Mercedes-Benz who asked Moreno if he would move to Cleveland to run a Mercedes-Benz dealership. Moreno agreed.
“I came in to Cleveland to see what this dealership was all about before I bought it,” Moreno says. “I pulled up here with my wife, I saw a salesperson, and I told him I was thinking about either a Lexus or a Mercedes — and I’m moving to Cleveland.
“The salesperson said, ‘I don’t understand why you’d want to move to Cleveland. This is the worst place on Earth to live. The people suck, the weather sucks, the economy sucks. I was born here and I’ve been trying to leave here since I came out of the womb.’ This is what the guy said to me.
“So I said, ‘People don’t buy Mercedes here?’ He said, ‘This is a blue-collar town. If we sell 10 to 15 cars a month, that’s a great month. If we sell 20, we’re dancing on the tables.’”
Moreno could have been discouraged, but he wasn’t. The dealership had been selling 200 cars a year before Moreno took over. He came in and set the goal high for the new dealership team.
“We came in, and I said to myself, ‘We can’t live selling five cars a month,’” Moreno says. “In our first sales meeting, May 13, 2005, I said, ‘We’re going to sell 100 cars a month.’
“We knew we had to do that because if we didn’t sell 100 cars a month, I couldn’t pay me, let alone my staff. I had to succeed because if I didn’t I would be in big trouble because I just committed my entire life to this endeavor.”
Here is how Moreno, president of Collection Auto Group, took one Mercedes-Benz dealership and built it into the Collection Auto Group that we know in Cleveland today.
When Moreno was working in Boston prior to 2005, he was helping run what was the sixth-largest privately owned dealership group in America with $1.5 billion in annual sales. In early 2005, he took over a dealership that sold only 200 cars a year.
“The difference is this one is mine and that one I just worked for,” Moreno says.
At that time, Moreno’s focus was to establish the dealership in the Cleveland area and create the right culture within the company.
“What helped in that tremendously was the fact that 12 guys moved from Boston to Cleveland with me,” he says. “That was a huge help, because when you’re establishing a culture, you need a critical mass of people who feel the same way that you do philosophically.”
Moreno says his desire to create further opportunities for the business fueled the dealership group’s growth the most. This, in turn, created opportunities for his staff.
“You can’t have all these guys in one store and challenge them and keep them growing,” he says. “All of them now have their own dealership that they run or a larger position within the company, which is great.”
In 2005, the dealership sold 24 cars between Jan. 1 and May 11. From May 12 to May 31 that year, it sold 80 cars. From that point on, Moreno and his team have been hitting their goal of 100 cars a month and then some.
“Our focus right now is really managing our growth,” he says. “We started with one dealership. We took over a small 200-car-a-year Lexus building. We finished the building in September 2008 right after Lehman Brothers collapsed. We used the opportunity to grow, and that growth was somewhat tame versus what we are doing today.”
Recently, Moreno has been expanding his business almost exponentially. Within the past year alone, the company has opened a Volkswagen dealership, a second Infiniti dealership, a new Nissan dealership, is building a new Mercedes-Benz dealership in Cincinnati and has been renovating several properties.
Moreno has plenty of projects to keep him busy. He has to buy the land for the new dealerships, build the dealerships, meet the individual car company’s requirements and hire people to run the dealerships. On top of all of that, Moreno still has to look after the other dealerships he has in operation.
Today, Moreno runs a collection of 24 dealerships, which led to the name, Collection Auto Group. The company is a more than 400-employee, $350 million car dealership group that sells Acura, Aston Martin, Buick, Fisker, GMC, Infiniti, Lotus, Mercedes-Benz, Nissan, Porsche, smart, Spyker, Vpg, Volkswagen and Maserati brands.
“It was never the intention to move to Cleveland to have a small little dealership,” Moreno says. “That wasn’t what I wanted to do. I didn’t necessarily think I was going to have 24 dealerships in seven or eight years, but I knew it wasn’t going to be a small dealership.”
Moreno may have been worried about car sales when the dealership first started, but in 2012 alone, Collection Auto Group sold 6,500 cars companywide.
“It’s is a big change,” he says. “Managing growth is like blowing up a balloon — you want to make sure you manage it properly, because otherwise you’re going to do it too fast.”
There are several factors that have helped Moreno and Collection Auto Group in its growth trajectory, but above all else, it comes back to the fact that Moreno loves cars.
“No. 1, you have to do what you love because if you’re not doing what you love, then you’re never going to be as successful as you can be,” he says. “For me, cars have always been a passion since I was a little kid.”
Another thing Moreno says has aided in his success is that he didn’t chase money. In fact, Moreno was making more money in Boston before he moved to Cleveland, but he wanted the opportunity to be his own boss.
“The biggest mistake people make is they follow money,” he says. “They’ll take a job because it pays more or they do this business because they’ll be rich. Money follows; money doesn’t lead.”
While people may make a certain move because it means more money, people will also find excuses for reasons that they can’t do something due to a lack of capital.
“If you have a great idea and you have passion, money will find you,” Moreno says. “When I bought Mercedes-Benz North Olmsted in 2005, I bought it with every dollar I had ever saved in my life. I joke that if I could have put a mortgage on my socks, I would have. It was never a scenario where I worried about getting the money to put this together.
“You have to ask yourself, ‘How badly do you want something? How badly do you believe that it can succeed? And how much do you believe in yourself?’ If the answer to all of that is at the top level, money will find you.”
Lastly, Moreno’s success has been made possible by the team he has put together at Collection Auto Group.
“You have to give people reason to follow you and be with you,” he says. “Why would somebody leave a job if not for the opportunity for personal growth, career advancement and learning? That’s the promise you have to deliver.”
Define your business
Once Moreno and his team started to get settled in Cleveland, the focus had to shift to creating a strong culture and one that would define how the business operated.
“You have to define your business,” Moreno says. “What business are you really in? A lot of my peers would say, ‘We’re in the car business. Look around, it’s a bunch of cars that we sell and service.’
“If you define that you’re in the car business, it’s an extraordinarily narrow definition. If you ask any employee in our company, whether it’s a receptionist, a car wash kid, a technician or a salesperson, they would say, ‘We’re in the customer service business.’”
Collection Auto Group sells cars, but it’s in the customer service business, and as a result, everybody understands that nothing is more important.
“When a customer walks through that door you should treat them like (they’re) the reason I’m here today, not like an inconvenience,” Moreno says. “My door is always open. If I’m willing to do that, what does it mean to everybody else in our organization?”
Moreno’s attention to clients goes far beyond making sure he gives them his time when they need it. He wants to change the car-buying experience.
“Some people hate buying cars,” he says. “But people love to buy iPhones. What’s the difference? The difference is that car dealers have made it painful for customers to buy cars. Car dealers have made the buying process completely unenjoyable, and it should be the complete opposite.”
Before Apple, people hated buying computers too. Now, people often just go to the Apple store to hang out because they made it fun and interesting.
“In the car business, it should be the same way, and the biggest thing that gets in people’s way is this fear when you walk through the front door that you’re going to be taken advantage of,” Moreno says. “Knowing that, we try to create a culture that says, ‘Let’s get rid of that anxiety.’”
Collection Auto Group tries to be extraordinarily transparent to make the negotiation process quick and easy. That transparency helps attract customers.
“If a customer walks in and they are looking at a Mercedes-Benz C300 and the sticker price is $42,500 … and their trade-in is worth $20,000, you have to ask yourself how much effort you are willing to put into this thing,” he says.
“How much are you willing to battle and let me wear you down? How much time do you want to spend wearing me down and are you willing to invest two or three hours to make that happen? Let’s say you do. At the end of three hours of going back and forth, how much do you really enjoy your car now? You hate it.”
Moreno utilizes the fact that customers these days are well-informed about car prices and what their trade-ins are worth; transparency and honesty with the customer saves time and effort.
“You know that I’m going to sell you the car for the price that’s going to be more than fair,” he says. “That creates a customer for life because they know that we will take better care of them than anybody else.”
Today, Collection Auto Group is well-established in the Cleveland market and sells all the car brands that it wants without any brand competing against another in the portfolio.
“Now that we’ve built this thing, we can take it for a drive and really expand exponentially with the brands we have right now,” Moreno says. ?
How to reach: Collection Auto Group, (440) 716-2700 or www.collectionautogroup.com
Do what you love and believe that you can make it successful.
Create a culture that separates you from competition.
Treat customers with respect and honesty and success will come.
The Moreno File
Collection Auto Group
Born: Colómbia, South America, but he grew up in Fort Lauderdale, Fla.
Education: Went to University of Michigan and received his undergraduate degree in business.
Goal: To be the chairman of the board of GM
What was your first job and what did you learn from it?
At 12-years-old, I delivered newspapers at 2 a.m. in Fort Lauderdale. My mom also owned three real estate offices so after delivering newspapers I went to work for her and ran the bookkeeping at 14 or 15 years old. That taught me that family businesses are a challenge, and it wasn’t something I was interested in.
What got you into cars?
When I went to Michigan I worked for Automobile magazine.
What was your first car?
A Honda CRX. I saw it on the cover of Car & Driver.
What was your favorite car you have owned?
I had an ’89 Ford Mustang GT. That was the coolest car.
If you had to choose a car to own off one of your lots, what would you choose?
Cars are like your children — you’re not supposed to have a favorite. But for me, Mercedes are the cars that I’m most passionate about. If I had to buy one car, it would be a S63 Mercedes.
Michael Kaufman has the people who made his company. And he has the people who will make his company.
It’s Kaufman’s job to know the difference.
“Can the heroes of the past become the heroes of the future?” says the president and CEO of Specialized Education Services Inc. “You have to assess if you need the heroes of the past around anymore or if they can become the future of the company.
“It’s hard, because you might really like and respect somebody, but they might not be able to come with you on the journey you’re beginning. It’s tough to move someone along because it’s just not working anymore — especially when they were there to help you grow from the beginning.”
With approximately 1,000 employees throughout the SESI organization — which conducts programs for special-needs students in public school districts throughout 11 states and Washington, D.C. — Kaufman and his leadership team have an ongoing task as they continually analyze the people within the SESI organization, determining what puzzle pieces they have and how they can best fit together to strengthen the organization moving forward.
“When you hire someone, you want to start from day one thinking not only that you hired them for a job, but you start thinking about what they can do here in their career,” Kaufman says. “You start thinking about their leadership trajectory. If people see and feel that, they’re going to want to work for your organization.”
Determining the trajectory of people within the organization means evaluations of their strengths and weaknesses, ways that the strengths can be optimized and ways the weaknesses can be neutralized — either through skill compensation from others or skill enhancement of the individual via training.
“To me, that all comes with building relationships,” Kaufman says. “You need to be very comfortable talking to people about what they’re good at and what they need to work on. If you spend time with people, you can tell them that tough feedback, because they’ve seen that it’s in their own best interest. You want them to do well.”
Assess your people
Not many people like performance reviews. Whether they’re monthly, quarterly or annually, no one relishes the idea of sitting down with their boss and having their work critiqued.
You might not like the fact that your company has to conduct performance reviews. Depending on how many employees you have, it can become a lengthy process involving many different people. It’s man-hours that could be put to use running the business instead of making sure your employees are doing their jobs at an optimum level. But standards have to be maintained.
That’s why Kaufman and his team try to navigate what can be a less-than-pleasant process by continually coming back to the concept of continuous improvement. At SESI, performance reviews focus on the positive aspects of an employee’s work as much as the areas for improvement. Any need for improvement is phrased in the context of the employees’ growth as an individual and a professional.
“We have different areas we look at to assess how a person is doing,” Kaufman says. “Since we are an educational company, we call it ‘A-plus performance.’ That A-plus performance comes around different things that we look at and test. It could be students growing from the beginning of the year to the end. It could be staff assessments of the leaders, district satisfaction surveys or financial targets. We communicate around those regularly.”
In all cases, Kaufman wants his employees to buy in, which makes what he and his staff communicate and how they communicate it vital to the continuous improvement of the organization and the people who work in it.
“I feel that if you create rules and goals from the beginning and you can create buy-in, and you can assess the progress against those goals, nobody feels that they’re getting cheated,” Kaufman says. “It’s very fair.”
One of the ways Kaufman facilitates communication is by creating a sense of ownership between an employee and his or her progress. He doesn’t want supervisors simply dictating an employee assessment. He wants employees to take an active role and look within.
“I love to do self-assessments,” he says. “You ask someone to assess how they are doing, and it’s interesting to see how most people will be tougher on themselves than you will be. It’s great to get someone to look at themselves and acknowledge what they need to work on before you even need to tell them yourself.”
Individuals are often their own worst critic, so in some cases, you need to paint a realistic picture. You don’t want to sugarcoat your assessments, but you don’t want employees to develop an excessively negative view of their performance. It’s something Kaufman reinforces when he brings the leaders of his organization together at meetings.
“When I bring our leaders together — and that’s all our middle and senior leaders, which I do a few times a year — I really try to teach them that communicating with employees is all about authenticity with affinity. You have to be authentic, but you have to have affinity for the person.
“I used to be a big sugarcoater. I only wanted to tell people the positives, and I realized that people liked me, but their respect for me was somewhere in the middle. I found out the more honest I got, it’s what people wanted.
“If a person doesn’t feel like you know them, it feels like criticism when you give them feedback. The glass is only going to be half-full if they know you want them to do well. And you should want them to do well. Your company is only successful if your employees are successful. If they can’t perform, you’re not going to look good.”
Develop new leaders
The practice of assessing the skills, strengths and weaknesses of your team members will only matter if you put your findings to use. Your assessment methods can help identify areas of focus for training and improvement, but it is also going to help you find individual roles that will allow your company to best leverage the skills and talents that each person brings to the table.
Great talent can look less than stellar if people in your company are utilized in roles that don’t properly suit their skills or personality.
“We had one of the most credible people in the company running a school,” Kaufman says. “He was outgoing and gregarious; he loved people and loved the company. But he really struggled with giving tough feedback. If someone was struggling, he would pretty much ignore it and only highlight the positives. That led to a bit of a free-for-all at the school.
“But as far as the school districts, he was amazing. He’d check up with them to see how they were doing, and the people who ran the districts absolutely loved him.
“So I created the position of outreach director for him. It was really where he needed to be. He was so good at it; we’ve added other outreach directors in other parts of the country. He basically created the position by assessing his strengths, and we were able to work with him and find a suitable role in the organization.”
If someone is struggling in their current role, you may or may not have another place for that person in your organization. But before you cut ties with a mismatched piece, you should always step back, look at the landscape within your company and see if there are other places where a given person might make a better fit.
Cutting good talent loose should only come as a last step. Once it’s gone, it’s gone, and if your company gains a reputation as an organization that treats employees as interchangeable pieces, you’ll have a more difficult time attracting good talent and making quality hires in the first place.
“You really are only as good as your employees,” Kaufman says. “You have to look at that and find ways to develop them. As a CEO, if you’re going to grow and you want to have more operations, you have to create a replicable model that can be run by other people besides the CEO. That’s why the best gift you can give to somebody is to believe in them before they believe in themselves.”
You believe in your people by giving them the structure to improve their skills, move up in the organization, and continually learn — both in formal training and on the job. You often learn on the job by making mistakes, which is why you can’t be quick to punish someone who commits an error.
“You have to be extremely generous with praise and really allow people to do their jobs,” Kaufman says. “Don’t micromanage them. Allow mistakes.
“If you can find an incredible talent who believes they were put on this planet to do what they’re doing right now and you can get them to see that they are capable of even more than that — that they can become an amazing leader creating more leaders — that is the whole idea of believing in someone before they believe in themselves. It’s the greatest gift I ever got as a leader.
“And it really is the greatest gift you can give to someone in the business world.”
How to reach: Specialized Education Services Inc., (215) 369-8699 or www.sesi-schools.com
Assess the competencies of your people.
Critique with the goal of improving your people.
Identify and develop new leaders.
The Kaufman file
President and CEO
Specialized Education Services Inc.
What is the best business lesson you’ve learned? To create leaders from within. Always make sure you are doing that. When you interview somebody, don’t just interview the person for the position that you’re seeking. Interview people for all they can be.
What traits or skills are essential for a leader? You need strength, compassion, accessibility and accountability. You need to be someone who is well-rounded and understands what it takes to lead an organization. You need to be able to look at the numbers. Don’t run from them, and don’t make excuses. Let everyone know what is going on in the organization, because there shouldn’t be any surprises for anyone. The strongest leaders are transparent. Don’t act differently based on whoever is in the room.
What is your definition of success? If someone thought I was an incredible CEO, that’s nice, but the real question is whether I lived my life with dignity and class, and have I earned the respect of others. Not just that I got respect because I ran an organization, but that I earned it because the people knew I had the best interests of the organization at heart.
The biggest misconception in corporate America is the thinking that vulnerability and weakness are synonymous. They couldn’t be more opposite. If you don’t think so, think about the kind of managers
you want to work for and respond yes or no to the following:
- Has all the answers.
- Does not ask for suggestions on the ability to lead more effectively.
- Refuses to confront sensitive interpersonal issues.
- Frequently keeps office door shut with a sign on it that says, “Not Now!”
This last one may seem like a joke. It isn’t. At a particular organization, this is promptly displayed for all direct reports and those who pass by to see. Yikes.
To clarify, vulnerability in leadership is not reflected by managers who are quivering bowls of insecurity that freak out twice a day, questioning themselves out loud on every decision. Vulnerability is demonstrated by managers who have both the confidence and courage to make tough choices.
Yet, in the process of these choices, they are willing to reach out for help, because it’s in the best interest of the organization as well their continued development.
The following are five areas that demonstrate the strong, vulnerable leader. Do a quick self-assessment as to how you measure against these:
Ask the opinion of those lower in rank.
Many managers view their competencies as milestones they passed, no different than a child who has learned to crawl then walk. Why look back? Yet, the perspectives of those under you not only builds morale and makes team members feel valued, managers may learn a fresh perspective they never considered.
Be willing to apologize and admit fault.
No one wakes up and thinks, “I can’t wait to screw something up so I can make a public apology!” Yet, the well-managed ego of a leader knows that both trust and character is on the line when it comes this one.
Get feedback from direct reports.
This is a distinction as the strong, vulnerable leader proactively seeks specific areas to be more aware and effective. This willingness to be enlightened is paramount for modeling continuous improvement.
Ask customers to critique your service.
Verbal critiques are best here so dialogue is involved. We have a propensity to bristle when those not making or selling our products or services chirp up. But the perch from which they view our approach to service not only offers a different vantage point, but one that may increase future business and referrals based on the openness of that relationship.
Tell colleagues to hold you accountable.
Empowering a circle of trusted advisers, above and below you in rank, creates a positive environment, one that knows higher trust, support and stronger likelihood of better performance outcomes.
Which one of these qualities resonates with you most? If you immediately have a couple in mind, that’s a good sign. If you are willing to openly discuss these with those you work with, that’s a great sign. Stay vulnerable, my friends.
Joe Takash is the president of Victory Consulting, a Chicago-based sales and leadership development firm. Joe is a keynote speaker for executive retreats, sales conferences and management meetings and he has appeared in many national media outlets. His firm, Victory Consulting, coaches executive teams and individual leaders, helping them maximize strategic execution. Learn more at www.victoryconsulting.com.
It’s a fairly common approach when taking on a new job to talk to those people who have been there for a while to learn what the company is all about. Harold Edwards tried this approach at Limoneira Co., and he didn’t like what he was learning.
“To be pretty direct, a lot of complacency and apathy had crept their way into the organization,” says Edwards, president and CEO at the Santa Paula, Calif.-based grower and provider of lemons. “We literally had situations where the people who had worked for the company for the longest period of time were probably doing the least amount of work.”
As Edwards looked at the financial numbers, he could see that the company wasn’t really on the upswing. But it was the attitude of senior leaders at Limoneira that concerned him even more.
“Most evident when I showed up was just a lot of senior-level managers and people who had been with the organization for a long time were not only not aligned with the objectives of the organization but also were very clearly and very evidently complacent about their day-to-day duties and responsibilities,” Edwards says.
The work culture and environment had become a big problem. Edwards needed to act swiftly to get things turned around at the company, which employs 226 people and has been producing lemons since 1893.
“The area where a lot of companies go wrong is they don’t stay current with their dynamic environment and they don’t consistently go through and define those objectives and focus on the alignment or realignment of those objectives every year as the environment continues to change,” Edwards says. “That’s where many companies fall down.”
Edwards hoped his plan would keep that from happening at Limoneira.
Laying out a new course
The changes on the leadership team were first up for Edwards. They were not easy moves to make.
“There were some pretty strong and big power struggles that had bred themselves within the organization,” Edwards says.
“One of my first orders of business as I was building my senior management team was to attempt to eliminate those power struggles. I wanted to get everybody’s full commitment to the vision of the organization and the new, very decentralized structure that we were putting in place to foster better teamwork.”
Edwards made it clear that he wanted to identify new growth opportunities and assess what was working and what wasn’t working to help Limoneira function to its full potential.
“We never had the vision that maybe the way to manage the company in a better way would be to really focus in on the growth of the business,” Edwards says. “And by growth, I mean really make it our business to transition from our focus from just being a producer into becoming a supplier of lemons.
“Surround ourselves and our assets not only with our own fruit but eventually with the fruit of other growers that would allow us to take advantage of our strong brand reputation in the marketplace.”
Those who weren’t committed to pursuing this new path didn’t stick around long, which turned out to be a good thing.
“In a way, it was very emancipating and helpful for the overall organization because as some of those people who were hanging onto their turf exited, you could almost hear the overall organization breathe a big sigh of relief,” Edwards says. “It was viewed as very empowering for many of the other people who were in essence held down or oppressed by some of these former managers.”
To those who feared they might be ousted by this new leader, Edwards worked hard to get them to see that he wasn’t there to conquer Limoneira. He was there to give people the freedom to help the company grow.
“My style is not to micromanage anybody on my team,” Edwards says. “It’s really just to position myself as an enabler and a supporter and to try to see that each one of these individuals is able to have success with the objectives that they’ve laid down for themselves and their teams.”
Building communication channels
The next step for Edwards at Limoneira was not a painful one, but it was a big challenge. His goal was to have his managerial team identify the top five objectives for the entire organization.
“They weren’t financial goals,” Edwards says. “They were more specific strategic objectives. Once they were created, we methodically went through each person in the senior management team, down through the management team, down through every salaried employee and then down through the rank-and-file employees.
“When the exercise was complete, the goal was everybody in the company had their own top five objectives that if they were successful accomplishing, the organization would have the best chance of achieving its top five objectives.”
It’s obviously a lot more challenging in practice than it is on paper. You have to accept that while there may be some hiccups along the way in developing all these objectives, they will lead you to a better outcome if you stay disciplined with the process.
“It really takes a commitment,” Edwards says. “Not all organizations are able to embrace that. There is a downside to innovation. There’s a downside to being really entrepreneurial and, in this case, intrepreneurial. It can be very disruptive. But if you’re willing to embrace some choppiness and disruption to do things better, it will work.”
With everyone committed to pursuing new growth opportunities, Edwards says the past five years have provided a consistent flow of new ideas from employees who previously weren’t involved in such talks.
“We have laid down very specific and very measurable growth targets that have really helped us smooth out the cyclicality and volatility of our business,” Edwards says.
“It’s also gotten all the employees who are involved in this part of our business very specifically focused on what their role and responsibility is. We can determine if we were successful or not. That is a specific objective that really has helped us transition the company and helped us grow.”
Edwards says it’s a message he repeats over and over again that great ideas at Limoneira do not have to begin in his office.
“Encourage people to think outside the box and come up with ideas about how to streamline efficiencies and how to get things done in a more efficient way,” he says. “Don’t just assume or accept that there is only one way to do things.”
Stick to it
When you think you’ve finally driven home the idea that you want employees to feel empowered to share their ideas, you need to resist the urge to stop talking about it.
“Part of the performance management program has a quarterly evaluation process that makes each employee better connected with a greater sense of consistent purpose with his or her manager,” Edwards says. “That allows them to do a better job of determining when an employee is getting it done and when they aren’t.”
Most employees want to make their supervisors and managers proud and want to do their part to help the business. But you have to maintain the dialogue and keep talking about it to make it work.
“The skill of the manager is to make sure that the things that aren’t going to be good objectives and goals, that those aren’t implemented,” Edwards says. “The ones that will really drive the organization forward are used.”
The discipline is not just a means to keep employees on task. It’s to help keep you and your management team on task as well.
“It’s very easy to see if we didn’t stay vigilant and diligent on quarterly evaluation and the communication of those evaluations, that it could very easily become just another thing that the organization was doing and the whole purpose would really be lost,” Edwards says.
One of the final pieces of the transformation at Limoneira has been to make sure the board of directors and company leaders understand the difference between management and governance.
“Part of the board’s responsibility in good governance is to help define and lay out good strategy for the organization as it moves forward,” Edwards says. “What had happened was the board had begun to get involved in personnel decisions. It had actually started micromanaging certain managerial posts sort of at the expense of the authority of the CEO of the company.”
Edwards shared his thoughts that the board needed to focus on strategy and let leaders like himself deal with day-to-day operations.
“By getting the board back to being a part of the governance structure and the management team really focusing in on the management of the company and keeping those roles and responsibilities separate and distinct and very disciplined, we’ve allowed both to operate at excellent levels that have really pushed the company forward,” Edwards says.
The result is a business that has grown consistently, with revenue leaping from $52.5 million in 2011 to $65.8 million in 2012.
“It’s much clearer the level of collaboration and teamwork that is necessary in order for all the employees to be successful,” Edwards says. “It’s forced people to play their roles and responsibilities more in concert as a team rather than as individuals. It’s that new alignment and fostering of teamwork that really set the company in motion.”
How to reach: Limoneira Co., (805) 525-5541 or www.limoneira.com
The Edwards File
Name: Harold Edwards
Title: President and CEO
Company: Limoneira Co.
Born: San Francisco
Education: Undergraduate degree in international affairs, Lewis and Clark College, Portland, Ore.; MBA in global management, Thunderbird School of Global Management, Glendale, Ariz.
What was your very first job?
Working on a ranch in Santa Paula. It was physical labor. I was hewing weeds, chopping suckers off trees or laying down mulch and fertilizer. I’m five generations deep in one of six families that represent the largest shareholders of this company. I grew up on one of the ranches that is one of different 15 ranches that the company manages.
What do you enjoy about the work?
I’ve sort of committed myself to making the world my canvas and taking opportunities to be living in a global world that produces and distributes product all over the world. The part of my job that gives me the greatest level of satisfaction is to, in a very small way, play a part in feeding the hungry world.
Why do Europeans consume so many more lemons than the United States?
You correlate it with obesity and the quality of our diets here versus the diets in other parts of the world. Then you look at life expectancy and health and you start to see some trends that are very compelling. If we were just to reach parity with Europe in terms of their lemon consumption, we don’t grow enough lemons here in the United States to accomplish that today. So we spend a lot of time trying to convince people to use lemons in their everyday lives here in the United States. So far we’re starting to see the results of a lot of these efforts take place.
Be clear about your intentions.
Build channels to communicate.
Stay disciplined with your plan.
It wasn’t your typical corporate relocation when Cartridge World Inc. moved its North American headquarters from California to Illinois in 2011.
For starters, most of the employees who had worked at the Emeryville, Calif., headquarters were not making the trip to the new offices in Spring Grove, Ill.
“Institutional knowledge disappeared if it wasn’t retained in the system,” says William D. Swanson, CFO of the global ink and toner printer cartridge retailer and CEO of North American operations.
“Even then, it might be in the system, but it’s not in the minds, hearts and thoughts of the people coming on board. So that was interesting. It was one of the most difficult challenges to overcome when we came here.”
It was difficult, but it was a challenge that Swanson and the leadership team at Cartridge World felt needed to be tackled. The company had slumped during the recession and found itself struggling to get back on its game.
“We ended up in a situation where as a company, we had significantly more expenses than were sustainable based upon our revenue stream,” Swanson says. “So it was really taking a company that was stuck and creating negative cash flow and then creating positive cash flow and, more importantly, value for its constituents.”
Making the situation even more interesting for Swanson was the fact that he, too, was new to Cartridge World, which is owned by Wolseley Private Equity in Australia. He joined the company in May 2011 as global CFO and didn’t become North American CEO until July 2012.
So the task was rather daunting.
Swanson needed to get himself up to speed with what the company was all about while at the same time, he worked to integrate new employees into a new culture in its new home that would enable the company to generate better financial results. He also had to engage franchisees at the company’s 650 stores across North America. The company has about 2,275 store employees in North America and 50 corporate employees.
Fortunately, Swanson brought a lot of confidence to this seemingly difficult mission.
“If you have good, compelling arguments and a good, solid vision that people can buy in to and understand, you get people to move forward in that direction,” Swanson says.
Build your team
The move to Illinois wasn’t just about rejuvenating the business. It would put Cartridge World in a more central location with which to work with its franchisees since two-thirds of its U.S. locations were east of the Mississippi River. It would also provide closer proximity to the company’s technology partner.
But those are physical details. The act of building a new culture from the ground up that would help the company start growing again wasn’t going to be as easy.
“You don’t know what you don’t know,” Swanson says. “That can be a very difficult place if you’re going down fat, drunk and stupid and you don’t know where you’re going. Any road will take you there. You better get clarity and you better help the new team understand that clarity.”
Swanson looks for three things to help determine if someone can be a strong member of his team.
“First of all, I make sure everybody has a consistent view of what success looks like,” he says. “Where are we trying to go? What does success look like both tangibly and intangibly? Paint that picture. Create specific numbers and reinforce that. Ask them to repeat it so that I can gauge their understanding.”
The next is one-on-one time with the person talking about his or her place in the company.
“I have a formal one-on-one session with my direct reports on a weekly basis, but informally, we meet and chat in the morning or sometimes we’ll be here late,” Swanson says. “It really is making sure I can gauge how they view their responsibilities, the tasks they are working on and the judgment they are exercising as they make decisions and take action.”
Finally, Swanson wants to know what kind of initiative they have to get things done and make things happen.
“Some people might see opportunities and others wait for those opportunities to be pointed out to them,” Swanson says. “Some take action and some wait for action to be assigned. When we have a company where staff has been reduced by 50 percent, I need people who can take an initiative and exercise good judgment moving in the direction that we need to move in.”
The goal is exactly the opposite of creating drones who will follow his every word. He wants people who see success the way he does and have the desire and energy to achieve it. But he has no problem if they have a different way of making it happen.
“They are more likely to achieve success when they get to choose the path that they are going to go down, as long as it’s consistent with the vision, and I know they can exercise good judgment,” Swanson says. “If they try to go down my path, they are not going to completely understand it, and they’re probably never going to do it exactly like me, so I’m not going to be thrilled by it.”
As important as it was to get his leadership team on board with his plan, Swanson very much needed to have a good relationship with his franchisees if Cartridge World was to succeed.
The key to a good relationship with any group of people is to be respected.
“When you’re dealing with franchisees, what you have to know is a lot of them put up their life savings to be in this, and they’ve committed their financial resources to the success of the business,” Swanson says. “That has to be understood. They have to know that you respect them and what they’re doing and how they are going about it.”
You owe it to them to listen to what they have to say when they have opinions about how the business should be run.
“It doesn’t mean I’m going to agree with them,” Swanson says. “I may, I may not. If I disagree, I’ll present it in a way that maintains their esteem and doesn’t put them down but rather presents another issue. I like to think of it as though we’re all businesspeople around the table. The issue is on the table; it’s not with any of us around the table.”
When you establish that foundation of respect, you can then move more easily into addressing some of the things that may be holding your business back.
“If you see things that are happening in the business that aren’t consistent with what it is you as a business are trying to accomplish, then you have to say, ‘Why are we doing these things?’” Swanson says. “What might seem like a good idea in the short term because maybe you had some high-priced consultants or you had something that convinced you as a company that this is the direction you want to go in, maybe it just wasn’t a well-thought-out idea. Those things happen. They happen everywhere.”
When you jump right into a decision without gaining the understanding of what your people are seeing and experiencing and any other pertinent variables, you run the risk of making a big mistake.
“Stephen Covey said it in one of his seven habits,” Swanson says. “‘Seek first to understand before being understood.’ I’m not sure all leaders do that. It can be a struggle to not jump in and say, ‘No, do it this way.’ Now certainly, if you’re going off a cliff, you’re going to stop that from happening.”
Cartridge World was struggling, but it wasn’t going off any cliffs. So Swanson took the patient approach.
“It’s constantly learning and taking a look at what you did yesterday,” Swanson says. “What went well and what didn’t go well? What did we learn from it? How do we take yesterday’s or today’s experiences and use that to shape what we’re going to do tomorrow?”
One thing Swanson does not do as he is guiding the company is step on the toes of people who hold leadership positions at Cartridge World.
“I have an open door, and if anyone ever wants to talk to me, they’re always welcome to talk to me,” Swanson says. “But I’m not going to go around my leadership team if I don’t need to. I respect them and what they’re doing.”
The results of recent changes have begun to pay off. With a redefined sense of roles and responsibilities, the company is back on a growth trajectory. In 2012, it launched Cartridge World Express, a mobile business that offers more than 400 ink and toner products for every major brand of printer, copier, fax and postage machine. It also expands the company’s mission of recycling to keep printer cartridges out of landfills.
“You have to be firmly committed to the direction you’re going and why you’re going in this direction and you can’t be short on communicating the vision and direction and the reasons why decisions were made,” Swanson says. “That has served us well.” ?
How to reach: Cartridge World Inc., (815) 321-4400 or www.cartridgeworld.com
The Swanson File
Name: Bill Swanson,
Title: CEO, North America
Company: Cartridge World Inc.
Education: Bachelor’s degree, accounting and business administration; CPA, Augustana College, Rock Island, Ill. I’m also certified in cash management.
What was your very first job as a kid?
My first job was caddying. I went to the golf course and the caddy master said, ‘Well you’re a little too small. Why don’t you come back next year?’ I came back the next week. He said, ‘Weren’t you here before?’ I said, ‘Yeah, I was. You told me I was too short. But I think I can do it, and I’d like the opportunity to show you.’ So I did and I was able to caddy for a couple years before I turned 16 and could get a real job.
Who has been your biggest influence?
I was in public accounting and then I left and worked in private industry for three brothers for around 20 years. One of the brothers, Arnold Miller, was just fantastic. That’s where I developed the way I think about business, running a business and the values that I have that are very important to me.
Who would like to meet and why?
Warren Buffett or Sam Walton; both of them for their purity in running a business and saying, ‘What is it we’re trying to accomplish? Keep all the self-serving stuff out of the way.’ Both of them are very successful in understanding what it is they are trying to accomplish and then to be able to do it by focusing on the fundamentals that it takes to get done. Not on wishes, not chasing rainbows, but truly understanding the fundamentals of what it is you’re trying to do. Work utilizing those fundamentals. If you do that, good things will happen.
Know what you’ve got.
Always show respect.
Never stop learning.
Most leaders understand that it’s critically important to collaborate regularly on initiatives with their employees, but are they getting all they can out of these interactions?
What leaders may be missing is a new paradigm for employee engagement and competitive advantage.
Many of them are working from an old style of management in which business decisions are made at the top and leaders follow a hierarchy of authority. Senior executives must still set strategy and manage for results, but they can likely achieve better outcomes by letting go.
Authors Craig Schreiber and Kathleen M. Carley explain that adapting a participative-style leadership environment allows people and the business to co-evolve into higher levels, enhancing personal responsibility, accountability, collaboration, innovation and business outcomes.
To do this, leaders need to empower employees to collectively make decisions that drive results and train employees to work in this model.
Employees on the front line are often in the best position to see trends and market opportunities.
Leaders can help drive businesses in new directions and enhance their bottom line by giving lower-level managers and line employees the support and encouragement to assume a much higher level of accountability and responsibility.
Information creation and sharing based on trust are critical components of innovation, according to author R.E. Miles. As they feel more engaged, employees are also more motivated to contribute and add value.
To achieve this, leaders must create an environment where risk within certain boundaries is rewarded so that employees feel comfortable enough to act on their abilities and instincts.
Leaders can support employees by encouraging ideas to grow and flourish among employees rather than through the manager. This will allow employees to identify and pursue opportunities that benefit the company.
The most important — and often most challenging — aspect of leadership is constant follow-through. It is important to discuss leadership techniques with employees and provide training.
Talking through leadership strategies with employees calibrates the group to be more in alignment. It also increases follow-through from employees who feel a part of the process.
Leaders can do this by:
? Discussing best practices among participants
? Identifying leadership needs
? Generating solutions that fit with the needs of the group
? Sharing best practices of employee collaboration throughout the company
? Recognizing work among employees and outcomes
For example, a bank executive wanted leadership training for her front-line managers. Her goal was for them to be able to work out problems and challenges independently or as a leadership group without constantly seeking guidance.
For 10 weeks, we challenged the managers to take more risk and encouraged them to make more decisions at their level. Through group coaching meetings, the employees helped each other consider best alternatives and the executive learned how to manage by letting go. The managers reported feeling more encouraged and engaged, which considerably enhanced results.
Jay Colker, DM, MBA, MA is core faculty for the master’s in counseling and organizational psychology program at the Adler School of Professional Psychology. Colker also maintains a human capital consulting practice and may be reached at firstname.lastname@example.org or at (312) 213-3421.
It would have been easy to hold off on salary raises just a little longer and wait for a clearer sign that the economy had turned a corner.
But Joe McKee and Keith Wolkoff were unwilling to wait. They believed that their employees had worked hard to help Paric Corp. through the recession, and they deserved to be recognized for it.
“The questions do get asked,” says Wolkoff, president at the 234-employee design-build firm. “Is it prudent? Or should we continue to invest in the business? We asked a lot of our people during the very difficult times. It’s just as important to reward those people when you’re starting to see a little more fluidity in the marketplace. It’s the right thing to do.”
The decision was based on the leadership team’s commitment over the past two years to a long-term view and a belief that you can’t let fear guide your decisions, says McKee, Paric’s CEO.
“When you have a crisis, you can circle the wagons or you can choose to move forward,” McKee says. “Most of the times I know when people have circled the wagons; it hasn’t really worked out well for them. Our attitude was to keep moving and be nimble and quick.”
Both leaders wanted to focus on the core things that Paric did well, believing that those skills would be desired by customers even in a tough economy. As they developed a strategy to maximize those qualities and began to see the potential become reality, it became an easy decision to reward the team.
“It was a very painful period in the industry,” Wolkoff says. “But as odd as it is to say, we’re a lot stronger for having gone through it.”
The numbers reflect that assessment. Paric’s revenue grew from $200 million in 2010 to $240 million in 2012. Here’s a look at how the company bounced back so strongly from the recession.
Recalibrate your position
The path to Paric’s better future began with a blunt assessment of what the recession had done to the economy.
“What many people try to do in that environment is to get up and ignore the reality of what’s happening around them, and they don’t speak frankly,” McKee says. “It’s a little bit like what happens when a dog senses your fear. You lose all credibility and bad things happen. So it starts by being brutally honest and by making tough decisions.”
McKee and Wolkoff didn’t hold back in talking about the difficulties the company was facing. They also talked about those opportunities that they believed they could take advantage of. The key is they talked and kept talking to their teams whether the news was good or bad.
“In the absence of us communicating what actions we were taking and how we were addressing the economy, people were going to come to their own conclusions,” Wolkoff says. “We just refused to allow that. We were meeting if not every six weeks, then every eight weeks to give everybody a debrief on, ‘Here’s where we’re headed, here’s what we see and here’s what we’re doing about it.’
“Maybe all the information wasn’t pleasant. But at least everybody knew what was going on. There wasn’t all that chatter that can just be counterproductive.”
The crux of the new plan was to focus on the strengths and stop doing the things that weren’t making the company any money.
“When you have limited resources, there are some things you’ve always done because that’s the way you did it,” McKee says. “You need to figure out what those things are and quit doing them. What do we need to work on to move the organization forward?”
Preconstruction services were going to be a big part of Paric’s offerings to customers. Another was going to be the core markets that the company worked in, such as historic renovation, urban development, senior living and interior construction.
“We don’t service everybody,” Wolkoff says. “We go where we can bring value to our customers. Even in bad times, that’s going to prevail.
“It took a little bit of reinforcing from leadership to say, ‘Let’s hunker down, let’s pick our spots, let’s be smart, and let’s continue to invest, and we’ll be fine when we come out the other end.’ Are you going to cover 10 opportunities with your limited resources or are you going to cover three opportunities and increase your hit rate?”
McKee says you go with the three.
“You get two out of those three versus focusing on 10 and you only get two,” McKee says.
Know who you are
In working through the plan and defining what set Paric apart from the competition, Wolkoff says the company’s leadership unearthed a problem that they felt needed to be addressed.
“We started to ask ourselves, how do we define our business as it looked at that point in time,” Wolkoff says. “While we all had great things to say about ourselves, none of us were telling the story exactly the same way. And it really caused us to question, ‘Well, if we’re having that much trouble defining who we are, what are our customers saying?’”
It was with that thought in mind that Paric’s leadership team set out to interview customers, vendors and employees. The goal was to hit on a theme that would accurately and clearly define what the company is all about.
“In everything we do, every opportunity we have to touch each other, at a meeting, even if it’s an outside social event, there needs to be a consistent theme in how we talk to each other,” Wolkoff says. “Every company meeting we have, it has to be the central talking point over and over again.”
After talking to people at all these levels, the theme they arrived at was “Experience Excellence.”
“It doesn’t mean we’re perfect, but we strive for perfection, and that’s the piece we hit on,” Wolkoff says. “At every station we touch, whether it’s a client, vendor or internal employee, we have to strive for that perfection and that excellence.”
When money is tight with customers, the key to making a sale can be the perceived extra value that the customers believe they are getting with your business.
“You could say on the one hand that a building project is a very daunting task,” Wolkoff says. “But it shouldn’t be. If you have the right partner, it should be something that is exciting. It’s changing your organization. So we have to make sure that everybody who touches it from our end makes it the most satisfying experience it can be.”
The goal was to take these words that could easily become a cliché or something that is forgotten soon after it is brought up and embed it into the company’s culture.
McKee compares it to a quote he remembers from retired Denver Broncos quarterback and NFL Hall of Famer John Elway.
“He said on a Super Bowl winning team, they hold each other accountable,” McKee says. “If the guy next to you wasn’t doing his job, the guy to the right of him would say, ‘You better get with it and do your job.’ The coaches weren’t telling him. The players were doing that. We work really hard to try to create that kind of culture with people to where it’s a real team environment.”
When you’re just trying to get a motto or slogan like that to sink in, you can just ask the question.
“With a younger person, you might say, ‘What have you done today to create experience excellence?’” McKee says. “They’ll look at you the first couple of times like you have two heads. But after a while, they’ll begin to understand what you’re getting at. It’s about that discipline to do it right every day.”
One of the things that Paric began during its battle through the recession and has continued to this day is a weekly senior leadership team meeting. It consists of five people: Wolkoff, McKee, the company’s CFO and the senior vice presidents of sales and operations.
“That’s the one meeting that doesn’t get moved off people’s calendars,” Wolkoff says. “It’s the most important meeting we have in a given week.”
The challenging of opinions and belief is not only accepted, it’s encouraged, says Wolkoff.
“There are five people sitting in that room and if one of the five is not voicing an opinion and challenging something, you need to consider, ‘Do they need to be in the room?’” he says. “We’ve been fortunate that there are five very strong leaders in the room.”
The idea isn’t to create tension but to make sure every angle is being explored so the company can make an informed decision. Once the meeting is over, the conflict, if there is any left, must stay in the room.
“Once we leave the room, we’re unified,” Wolkoff says.
McKee says the elimination of secrets and unspoken concerns is one of the keys to success in any business.
“If you’re going to lose, lose doing the things you think you need to do rather than getting to the end and thinking, ‘I wish I would have done that,’” McKee says. ?
How to reach: Paric Corp., (800) 500-4320 or www.paric.com
The McKee and Wolkoff Files
Joe McKee, CEO, Paric Corp.
Born: St. Louis
Education: Bachelor of science degree, civil and environmental engineering from Vanderbilt University; MBA, Washington University, St. Louis.
Did you think about becoming a CEO some day?
I always knew I wanted to build, so that much I knew. But I’ve succeeded well beyond my wildest dreams. I was the kid who designed the clubhouse and treehouse and built go-carts. That’s what I love doing, besides hunting.
Who has been your biggest influence?
It starts with good parents. My parents were absolutely amazing. After that, Rick Jordan helped me a great deal and the current chair of our board, Larry Young. They are both on our board and have been good mentors to me through the years.
Keith Wolkoff, president, Paric Corp.
Born: St. Charles, Mo.
Education: Bachelor’s degree in architecture, Washington University, St. Louis.
Did you think about becoming a company president some day?
No way; it was the furthest thing from my thoughts. I thought more in the now and whatever I was doing, I wanted to do it to the best of my ability. When I saw an opportunity, I had the mindset that I’d rather try and fail than not try at all. By some good luck and some hard work, I find myself where I am today.
Who has been your biggest influence?
Very early on I had an English teacher. Maybe my spelling wasn’t always the best, maybe my attention wasn’t always the best, but I was always a good writer, and I enjoyed it. That particular teacher focused on what I was good at and that empowered me to excel in other areas.
Don’t sugarcoat your problems.
Know what you stand for.
Keep looking to do it better.