As the president of the traveling exhibition company, American Exhibitions Inc., Marcus Corwin knows that creating the “blockbuster” exhibitions that the public wants to see involves creativity and ingenuity. But it also takes a lot of patience and upfront research.
“You don’t get Broadway successes overnight,” says Corwin, who joined the Boca Raton, Fla.-based exhibition company in 2006. “Most of them don’t make it. So how do you create something that people are going to want to see, that they’re going to be excited about, they’re going to be engaged?”
The company must develop new products all the time that it knows will resonate with customers. Corwin says that step one is figure out what fascinates and excites your potential audience — a million-dollar question for any business. This was the goal he had in mind when the organization developed its Mummies of the World exhibition, which focuses on a topic that has fascinated people for centuries.
“When Pepsi or Coca-Cola go to design a new soda, they’ve gone and done some focus groups, they’ve done some development, spent money on marketing,” he says. “And as good as they are, sometimes they get it wrong. So with regard to how do you find a product that you want to bring to market … sometimes we have it in our gut.”
Part of creating a hit with customers is having a sense for what the public wants by doing your homework and knowing who your customer is. By looking at similar exhibits that resonated with consumers, for example, Corwin was able to recognize trends toward subject matter such as human anatomy. The fact that these exhibits were extremely popular with consumers around the world evolved into the concept of mummies.
“Our thought process was what else would be people interested in seeing, because people are always interested in their history and the cultures that came before them,” Corwin says.
From there, it’s finding out how much they like it, what aspects resonate and most importantly whether they will pay and how much they will pay for it.
“We went and we had focus groups here in Florida,” Corwin says. “We had focus groups in Boston, Mass., and we had focus groups in Philadelphia — all which helped us identify the public’s perceptions of mummies and the public’s needs of why they choose an exhibition to come to, why they chose a museum to come to, how they spend their money and what are their trigger points in coming to see an exhibition like mummies.”
With focus groups, it’s important to examine a variety of feedback. Corwin specifically wanted to know which points of interest appealed to the majority of the audience, what price points could turn that interest into business, and which marketing materials were inviting versus frightening.
In the end, the company was able to put together the largest collection of mummies ever assembled in history from Egypt, South America, Asia and Oceania.
“We’ve had over 500,000 people see the exhibit already,” Corwin says. “Over 85 percent of them liked the exhibit a lot and would recommend the exhibit to their friends, family and relatives.”
Corwin says that when you have a product that’s successful, you need to then be asking yourself questions such as “What is our progression of additional product?” and “How do we continue to grow?” so you are always building on success.
Since the company opened the exhibit, it has done exit surveys at every location to determine what drove customers to attend and what they did and didn’t like so they can continue to improve the product. Now that it has built this brand and knows that people like mummies, Corwin says the next venture is to create sequels, such as Mummies II.
“From my company’s viewpoint, it’s almost like being at the helm of an ocean freighter,” Corwin says. “When you’re at the helm of an ocean freighter, you are looking way ahead, because it’s going to take you a period of time to shift the direction and speed of the ship. So I’m looking not one year out, but where am I going to be two, three, four, five years out with our company.”
How to reach: American Exhibitions Inc., (561) 482-2088 or www.americanexhibitions.com
In any kind of strategic planning, budgeting is very important. When you’re putting on a nationwide exhibition for thousands of people, it’s critical to map out your budget as clearly as possible so you can deliver for your partners and customers.
“The budget and forecasting is the premise of why you’re going forward with a project,” says Marcus Corwin, president of the exhibition company American Exhibitions Inc.
This was the greatest difficulty for Corwin and his team as they planned for “Mummies of the World,” especially because the economy is so uncertain.
“Sometimes we’re in a strong economy,” he says. “Sometimes we’re in a weaker economy. You can only make the best effort that you can do, but sometimes with the outcome, you are powerless.”
Once the budget and forecast make sense, being able to execute on that successfully involves a number of factors. One of the most important things to keep in mind is not getting carried away with ideas that haven’t been thoroughly vetted and can end up draining more resources or money than you have available. By making sure you are effectively planning and managing the costs, you can deliver your product at a better cost and profit.
“You have to deliver your product within those parameters,” Corwin says. “We found like typical in all worlds, designers have great ideas. And sometimes those ideas are pie in the sky and you have to be able to make sure that those ideas work, those ideas work within a budget and that the exhibit can be produced within that budget.”
When Punit Shah saw that people were no longer paying premiums for completed real estate development projects in 2008, he knew that his company needed to get out of the construction business.
“We saw where the market was going and we had to take reactive measures to make sure that our future was protected and the future of our employees was protected,” says Shah, the president and COO of Liberty Group of Cos., a Clearwater, Fla.-based real estate company with 400 employees.
To keep the company profitable, Shah has implemented a new business strategy to grow through aggressive acquisition of existing properties.
Smart Business spoke with Shah about the keys in investing in growth through acquisitions.
What is your approach to new acquisitions?
Any acquisition that we’re buying has to have a value-add component to it and have a big upside that we can conservatively rely on to have a long-term gain in.
One thing that really makes us different is our ability to analytically look at every piece of information upfront. That makes it a lot easier for us on the back end, because we know what we’re getting into and we know how to proactively deal with whatever is coming our way.
So it’s something that we think may tie up equity or capital for a really long time and then have minimal returns, we usually pass on that deal, because we want to make the most and highest return that we can on our equity. We also want to make sure that it’s a safe investment, because right now is not the time to be making risky investments. Now is the time to be making investments that you are 100 percent confident in and that you’ve got a reasonable return on the money that you are putting at risk.
We’re not forecasting tremendous numbers with a forward-looking basis. We’re buying what we deem to be profitable as-is right now. As the market improves overall, as the economy improves, as our management team goes in there and adds more professionalism in overall management of the asset, we see that all as value-add opportunity.
What criteria do you use to evaluate investments during due diligence?
The most primary thing is location and demand generators. We want to be conservative and consider all different options, whether if there is a terrorist attack, what that would do to the core business of the hotel, during recessions, what happens during peak periods. So we look for diverse demand generators. We look for location of course. Then we look at the physical plans of the hotel or whatever the asset is. We look at the long-term intrinsic value of the asset itself but also the submarket and the overall region. We want to know if this is something that is going to be sustainable and is there going to be a demand generator for this property 10 years from now. As far as my ranking, it would go in that order.
We’re looking just for the best products that we can find, and we’re filtering out anything that doesn’t meet our core criteria. We’ve been very diligent about establishing that criteria upfront and knowing what we’re pursuing.
What mistakes can you make when pursuing acquisition opportunities?
The biggest thing anyone can do if they’re getting involved in what we’re doing is make sure they spend the time, money and resources on the due diligence. It’s almost turning into the height of the market again on a different scale, because people are just buying things sight unseen, guns blazing and not necessarily knowing what the repercussions are because there are a lot of legal complexities when dealing with distressed assets. I’ve seen a lot of people who are just jumping in all at once without understanding the risks involved with those investments. The other thing is real estate and cash-flowing businesses are still businesses and you have to have great management and employees to make those investments profitable. You can’t just buy an assisted living facility or hotel and expect just because you got a good deal on it, it’s going to turn profitable. It’s not like land. There is an inherent business component to it, and a lot of people fail to realize that when they are looking at these types of deals.
How to reach: Liberty Group of Cos., (727) 866-7999 or www.libertyg.com
In the United States, workers’ compensation insurance is the second biggest cost for employers, representing a $50 billion marketplace nationwide. So when Steve Mariano built a company focused on sales of workers’ comp insurance, he knew that there was opportunity for long-term growth.
“Workers’ comp insurance — it’s not a really sexy area, but it’s been around for a long time,” says Mariano, founder, chairman, president and CEO of Fort Lauderdale-based Patriot National Insurance Group. “It’s kind of like this small brother compared to health insurance.”
But since the credit crisis, it has also become more difficult to compete in this type of insurance business. In the last three years, declining payrolls and cost cutting at many companies has inevitably affected sales for Patriot and other workers’ comp insurance providers.
“It was always a tough business, but it’s gotten a lot tougher these days,” Mariano says.
To grow, Mariano has stayed true to many of the same principles that the company was founded on in 2003, specifically a commitment to finding and developing a team of unparalleled talent.
“That’s probably been the biggest reason why we’ve been successful,” he says. “We’ve been able to attract the talented people and their skill sets and we’ve been able to train the people to do the business, follow the procedures and protocols and leverage technology the way that we at Patriot do it, different than other companies.”
As a result, the organization has had some of its best sales years despite the recession. Here’s how Mariano develops Patriot’s team of 425 employees to excel in the workers’ comp business.
Grow talent in stages
Prior to launching Patriot, Steve Mariano founded two other companies. From experience, he knew that it would be difficult to attract many strong employees with the skills they needed to grow before they got a foothold and developed a reputation in the business. To create a deep bench of talent from the beginning, it’s important to be patient about growth and not bring on people that you don’t truly need yet.
First, develop a core team of people local to your business and who you can trust to get your business off the ground.
“You’ve got to get your business plan up and running with a couple of core people in your management team that you know and have experienced working with them,” Mariano says.
Once you see growth in your business plan after a couple of years, then you have a story to use to attract corporate talent from around the country and from other fields. Bring on a strong core group and grow initial sales and then bring on a strong secondary senior team to continue to grow them.
“With each cycle that the company grows and evolves, you have to balance your ability to sell your product along with your costs,” Mariano says. “This may not be perfectly in tandem — but you can’t have one or two major years of losses coming from the expansion without balancing it out.”
By growing in stages, you can build the infrastructure to support a larger and larger team. That way, you ensure that as you go through hiring cycles that people will see you as a stable employer with a track record of growth. In addition to bringing people from out of town with certain skill sets to the corporate office, the organization has also hired hundreds of employees locally, including about 300 people in the Fort Lauderdale area.
“Once you get to a certain size, it becomes easier to attract talent because, number one, talent starts looking for you,” Mariano says.
By 2006 and 2007, the company’s sales growth put it in the position to hire the senior talent it needed to pull from outside of South Florida. As you add new talent, finding people who are fair and also have good ethics is equally important to finding the right skill sets. You want to hire people who are talented but also people who are ethical and going to fit within the company’s culture, much like a professional sports team.
“You can have the best talent, but if they don’t work together in the same culture, they’re not going to win,” he says. “You’ve got to find the right people that fit within the organization. It’s not just asking who is the best talent, but who is the best talent for our company.”
Mariano says that growing responsibly sometimes means taking it little bit slower than you’d like to make sure that you bring everybody with you. That’s not just in expenses but also growing the culture in a way to make sure it permeates the entire company as you add more and more people.
“Sometimes that just means taking a step back, whether it’s three months, a quarter or two quarters, and focusing back internally on the company and having internal parts of the company like accounting and legal really catch up to the growth of the company,” he says.
But while he tries to be deliberate about growing in stages, Mariano doesn’t place limits on how big the company can become as it continues to scale.
“If you pigeonhole yourself into not thinking of things as big as they can be, you’ll never get there,” he says. “You’ve got to really think about the potential and not sell yourself or your ideas short.”
Invest in training
Employee training is an area that not all business leaders invest in equally, especially in the insurance industry.
“In the insurance business, there is very little training that goes on these days, and I think it’s because of cost overhead and other things,” Mariano says. “Insurance companies don’t have the same type of training programs for young people as they used to.”
Yet training talent is an area that Mariano cites as one of the most critical elements in facilitating Patriot’s sales growth. Fundamentally, the company has had certain departments training on an informal basis for years. An example is the company’s claims management program that started in 2008.
“That type of training and that type of culture that’s been built around our business has allowed us to be successful,” Mariano says.
When you don’t invest in growing people’s skills, they could feel undervalued or feel that they don’t have a long-term future with your company. This can result in higher employee turnover, which in the end, sucks up more time and resources as you hire and train new people.
Retention is a major factor in why Mariano readily invests in employee training that others might find an unnecessary expense. Investing in your people helps your emloyees be more successful, which in turn helps your company be successful by developing and retaining talented employees.
Last year, Mariano introduced Patriot University, the company’s first formal, full-time training program to provide employees with cross-training enhance their core competencies and develop their skills. The company also collaborates with South Florida colleges to put together training opportunities for people who are interested in working for the company and want to learn some skills in advance. This creates a local pipeline of talent so that when the company hires in the future, it has a pool of candidates who already have some key skills.
“We’re proactive now in making sure that we have more than enough talent and with these training programs, making sure that we’ve got the talent and the internal operations ahead of time ready for the next big expansion,” Mariano says.
“There’s no question that we’re going to continue to grow and hire most of our people locally moving forward. That’s only gotten a lot easier.”
Because of its efforts to nurture people up through the ranks of the company, the organization now has one of the best retention rates in its industry.
“If you don’t train people, then you’re not going to keep them,” Mariano says.
“We know if you churn employees, you hire and then fire, hire and fire, it really increases your costs as a company. It’s cheaper to retain them by training them in their job functions and cross-training them in other department skills, so that as one department grows maybe faster than another, we can use their skill sets in different departments.”
In an industry with a lot of big players, Patriot’s entrepreneurial culture is one of the reasons many job seekers are drawn to work there. When you have a culture that allows people to have a more direct impact on your business, you can attract the kind of innovative thinkers that can help you grow.
“We have procedures and protocols too, but we’re always looking for our employees to find a better way to do something and to innovate within their organization and within their departments,” Mariano says.
Having an innovative culture that embraces new ways of doing things tends to attract those with the desire to succeed.
“Talent is looking for a way to put a fingerprint on the company they’re working for,” Mariano says. “If you come to work for a company like us, you can really put a fingerprint in your area and be able to look five, ten years from now and say, ‘I really had something to do with this part of the business plan and help with the building of the company.’”
By not having just standard ways of doing things, Mariano says you make it harder for employees to just come in, check a box or work a 9-to-5 just to pull a paycheck.
“We’re looking for ideas of how to better our company in all areas, from the mail room all the way up to the top financial parts of the company,” Mariano says. “If there is a better procedure and protocol or a way to innovate it to service our customers better or make us a better profit, then I ask for those types of things and very much support that type of thought process.”
As a result, the company has been a leading innovator in its field, specifically when it comes to technology. It was among the first to spearhead the use of iPhones, iPads and mobile technology to video stream information for surveillance. Being able to use the mobile devices and video streaming tools nationwide gives insurance adjusters, investigators and legal teams the ability to help employers evaluate compensation or compensability issues and make faster decisions in fraud cases.
Because fraud makes up about 20 percent of the workers’ comp cost in the United States, these advances make a big difference in helping the company differentiate itself for growth.
“Very few workers’ comp competitors really use that kind of Apple innovation on the front end to be able to be out in the field getting this information,” Mariano says.
“It’s billions of dollars being wasted each year in fraud. If you can just stop a small piece of that going on in your own companies, then that is a big thing.”
As a result, Mariano says that the company is planning its biggest expansion in the last three years. Investing in a culture and training to engage employees has helped it attract new talent as well as capture market share from its larger, but less nimble, competitors. It recently opened up offices in the Los Angeles area as well as major cities including Sacramento and St. Louis, and in 2011, the company added 85 new jobs to downtown Fort Lauderdale.
“So we’ve been an innovator,” Mariano says. “We’ve been able to come in, leverage new technologies and really come into the marketplace with a fresh set of ideas and reduce costs for the employers.”
How to reach: Patriot National Insurance Group, (954) 670-2900 or www.pnigroup.com
1. Be patient in your talent search.
2. Create formal training for employee development.
3. Nurture employees’ engagement in innovation.
The Mariano File
Chairman, founder, president and CEO
Patriot National Insurance Group
Born: New Jersey
Education: Georgia Tech and Ursinus College — graduated with a degree in economics.
What would your friends be surprised to find out about you?
Most people don't know I read a new book just about every week. There is so much information out there, so many experiences to benefit from.
What is one part of your daily routine that you wouldn't change?
My morning workout. Mental and physical shape are linked, and the time I spend every morning at the gym helps me clear my head, set my priorities for the day, and build the energy I need to take on the day's challenges.
What’s the toughest business decision you’ve ever had to make?
At our prior company right after 9/11, the marketplace for insurance really shrank, and I was in a situation where I had to eliminate about 85 to 100 employees just because the business model wasn’t supporting it. To me, any time you have to eliminate a position or you have to fire someone, from a leadership position, you haven’t succeeded. Any time you have to let someone go, that means you either didn’t train them correctly or they weren’t able to deliver what you thought they would be able to deliver. Or in the case when you just have a bad event like 9/11 — you just have no control over it – it’s even harder because as a CEO you have great people sometimes and there’s just nothing you can do about it.
What do you see for future growth in Florida?
I think South Florida and Florida will do a lot better over the next couple of years. I know it’s been very tough for the state in a lot of areas … and I think just given the amount of business that we’re doing with Latin and South America, and just how wonderful a state this is — no state income tax and all of that — there’s a good balance for its growth. We’re really bullish that there’s going to be better times ahead, and we look forward to being part of the community here.
The fact that Tom Strauss sees some major flaws with the national health care system shouldn’t just raise eyebrows for hospitals or the patients in them. As CEO of one of the largest integrated healthcare delivery systems in Ohio — employing 10,000 people and more than 1,000 physicians across seven hospitals — Strauss knows the problem is one that affects every person in the country.
“I think everybody would admit that what we have in health care in this country today is unsustainable,” says Strauss, the president and CEO of Akron, Ohio-based Summa Health System. “When you’re spending $2.5 trillion, 17.6 percent of the GDP on health care and the health premium now for a family has exceeded what a minimum wage worker makes in a year — think of that … it’s going to affect the way that we do business.”
The glaring problems with the current care model have been compounded by the increasing number of people without health insurance, which creates a shrinking base of patients from which hospitals can generate any income — the sick ones.
“We’re really a sick care system, which means when we get paid traditionally in hospitals, it’s only by treating a bunch of sick patients,” Strauss says. “So if a good flu season rolls in … our beds are full and we’re billing a lot of revenue, but we have a lot of sick patients. There’s something wrong with that picture.”
With mounting costs, anticipated reimbursement declines and payment model that rewards based on sickness rather than health, Strauss and his team finally said enough is enough. After spending two years devising a new vision for the organization to evolve and improve the system, Summa Health launched a pilot program for an accountable care organization, called NewHealth Collaborative. In January 2011 it moved 11,000 patients in its SummaCare Medicare plan to the new collaborative.
“Some of these places are holding onto the revenue as long as they can because they believe there is a way to survive that,” Strauss says. “We don’t think there is.
“So with us, it’s what do you do to transform yourself to focus differently to create true value in health care.”
Here’s how Strauss has led the implementation of the accountable care vision across the seven hospitals.
Because Summa Health is one of the first organizations in the community to create a prototype for accountable care organizations, Strauss knows it will be an example for future organizations in the way it implements its vision and strategy. To make sure the shift toward population health management is successful, one of the first steps is putting in place the right tools, processes and infrastructure to support it.
“You’ve got to know where your vision is, where you’re going and what your objectives with the strategy are and then put in place the executing tactical plans to make that happen,” Strauss says.
Strauss says that a key problem with the old system of that care was it could be very fragmented. With different physicians in charge of different services, handing off tasks and having limited knowledge of a patient’s needs, an estimated 30 percent of what is conducted in health care and in hospitals today is unnecessary.
So part of the transformation has been changing the organization’s siloed infrastructure to create multi-disciplinary approach to services, eliminating the overtreatment of patients and saving costs by keeping everyone on the same page, including the patient.
“People like me have to start to prepare ourselves structurally to be able to do these things for population health and population management,” Strauss says.
“What’s nice is it’s easier to do the right care, the appropriate care, and eliminate this 30 percent that’s unnecessary than to not do it. So we’ve made it easier for physicians to do that.”
Frequently inefficiency is the result of lack of communication and knowledge-sharing. So a critical step to becoming more organized and efficient is looking for ways to improve your technology.
“Some organizations are used to living on very high revenues,” Strauss says. “When you realize that eventually that is going to go away, you have to reposition your organization to be able to function at lower rates of reimbursement.”
Strauss says that the organization is investing $80 million in IT over the span of five years. It has already added a new call center so physician’s phones roll over to the 24/7 call center with care nurses during off hours. The system’s Akron City and St. Thomas hospitals also became some of the first in the country to have computerized physician order entry so physicians can access and manage orders through a portal at any time.
The other piece was implementing new evidence-based medicine protocols and procedures in the care delivery process to integrate the 10 service lines for increased efficiency.
By structuring your organization for more effective collaboration, you can align the people on shared goals and your new vision. At the same time, you give people a clearer idea of how their role contributes to the big picture of your mission and vision.
“Those are the kinds of structures that you have to have in place to be able to thrive under this new health care reform move towards population health and population management,” Strauss says. “So it’s more than just technology.”
Be an open book
Once they came up with the model, Strauss and his leadership team presented it to the physicians and the board and held retreats to walk employees through the vision, its benefits and how the transformation would occur.
“I think most physicians understand that the old way of doing things is not very effective,” he says. “The days of fee-for service — the reimbursement is just going to be cut and cut and cut. It will be death by a thousand cuts. They understand they can’t survive the way that it is today, so we have to do something differently.”
With most people on board, the real challenge was making sure the 400 physicians and other employees involved could understand, execute and share the vision. Developing strong partnerships among the hospitals and other care providers requires strong alignment on goals as well as new patient care protocols and procedures. So for Strauss, the key to success has been having the organization be as open as possible with employees about the vision, what it involves and any changes being asked of them.
“It’s creating a vision for the future and getting people to understand what that vision is and then educating the components to engage in that process when it might be different than what they were used to in the past,” Strauss says.
“If you don’t, and they don’t believe in where you are going you will be unsuccessful. So for us, we really took the time and even after it was implemented went back to reinforce the vision of why this is so important.”
By explaining how a new vision complements your organization’s core values, mission and culture, you can get more buy-in by aligning people behind shared goals as well as a shared culture. So aside from instituting training and education programs for employees, Strauss has spent a lot of personal time working to put the vision into a clear framework. His efforts include teaching a class for employees called “The Philosophies of Summa,” speaking at monthly new employee orientations and hosting monthly “Talks with Tom” for several hundred employees with representatives from each department.
“There are no secrets,” Strauss says. “I give them financials. I talk about what’s happening good and bad and ugly, and it’s been very effective. It’s information. It’s listening. It’s being by their side and nurturing them when they are down.
“We believe that the employees that work here are the soul of the firm. Your employees represent your greatest strength or your greatest weakness. So they have a culture that supports them — servant leadership — and it says if I’m not serving that patient I’m going to serve you.”
Strauss says that another goal of the open communication is to reciprocate the attitude and culture he wants to drive in the system, which is one of servant leadership and mutual caring.
“The moment of truth is the first 15 seconds when you come in contact with a patient in need, and it’s how you seize that moment to make the difference to satisfy their needs,” he says.
“If you’re too busy or you’re having a bad day or the Browns lost or the Steelers lost, and you translate that at work to your patient, we will fail as an organization.”
To strengthen the mindset they want all employees to have, Strauss has charged managers to be more active in talking to employees and patients to see what their needs are and helping them carry out the vision for accountable care.
“If you’re engaging your work force to go after a vision, then you need to give them as much information as you can about the reason for that vision,” he says. “That’s one of the pieces that I love to do.
“We’re actually making a concerted effort to do rounding with a purpose. You’re going to see every leader at Summa being out more on the floor talking to patients, talking to employees both on satisfaction and safety.”
But once you give people the information, you then want them to drive its success as much as possible. To help employees feel like they have a stake in that vision so they will drive it with enthusiasm, Summa Health has tied more employee financial incentives to the positive patient outcomes it’s seeking from the new care protocols and procedures.
For example, all employees in the system receive a bonus each year based on the company’s financial performance and levels of patient satisfaction.
“We’ve paid out millions of dollars to the employees,” Strauss says. “This is beyond managers. This is all of the employees. We want them to feel like if they produce, if they work with us, if they exceed the expectations of the patients — that’s the definition of quality — they will benefit, their organization will benefit, and we will be the provider and employer of choice.”
Eventually, seeing the positive results of changes helps employees realize that your vision is a viable one.
As a result of its technological innovation, the NewHealth Collaborative received 2012 certification from the federal government for its ability to meet standards of meaningful use guidelines. Its Akron City and St. Thomas Hospitals will acquire $5.1 million in federal incentives, which will be distributed to the hospitals and its doctors.
“In the old days you would just throw services out there and market those services and try to grow this population of sick patients,” Strauss says. “Now we’re going to get paid on the population’s health.”
Although he’s been with Summa Health for 13 years, Strauss believes that the organization is just starting to scratch the service in the excellence it can achieve by transforming the community’s health. Despite the uncertain future of health care reform, he sees more and more people are now realizing that action needs to be taken to change the industry.
“When you deliver that kind of quality and safety and you see the savings we’re starting to generate, you realize that there’s an answer here,” Strauss says.
How to reach: Summa Health System, (800) 237-8662 or www.summahealth.org
1. Put the structures in place to implement your plan.
2. Help infuse the vision with transparency and an open-door policy.
3. Offer employee incentives to drive results.
The Strauss File
President and CEO
Summa Health System
Education: Duquesne University for undergraduate and graduate schools. B.S. in pharmacy in 1975 and a doctorate of pharmacy in 1978
What do you like most about working in health care?
That you are caring for patients at their most vulnerable time, you can make a difference in every patient’s life and you can make a difference in employees’ lives. We’re the largest employer in five counties, so for us we take that pretty seriously. And improve the health status of the communities, not only once you educate and take care of patients but you can go out into the communities and you can make a difference.
What mistakes can you make in a growing business?
The first thing you’ve got to realize is that you can’t make everybody happy. That’s the hard one, especially for somebody like me who really prefers to have people holding hands singing ‘Kumbaya.’ The other area is trying to micromanage. You cannot in this environment micromanage. You’ve got to empower your people and let them go. They will make mistakes and that’s OK as long as they learn from their mistakes. I would think trying to stay in the old system, trying to stay in the old ways was a mistake that got us starting to transform toward population health and population management.
What’s the best business advice you’ve received?
Love what you do. If you think about the hours we all work, that gets pretty challenging if you don’t love what you do because I probably put in as many hours here as I do at home, unfortunately. So that’s one. Make sure you love what you do, and if you don’t love what you do, go find something you will.
Imagine your country is experiencing a terrible drought. You’re forced to drop out of school because there is no money to cover the basic school fees. Reading a book in the local library, you discover that windmills can generate energy. So what do you do? If you’re 14-year-old William Kamkwamba, you resolve to build a windmill in your village. Undeterred by age, lack of formal education or resources, Kamkwamba spent months building a windmill out of scrap materials. As he worked on his project, the villagers mocked him and told him he was crazy, but he refused to let that stop him.
Keep in mind Kamkwamba had never seen a windmill in real life. He could have easily decided that building one was too challenging or even infeasible. But he was convinced that if someone, somewhere had built one, he could do it too. And he was motivated by necessity. He understood the great benefit a windmill would have for his family and village.
Reading Kamkwamba’s story I thought about what makes great experimenters and innovators:
Curiosity. Curiosity fuels learning and drives experimentation.
Need. Experimenters and innovators identify unmet needs. They look for ways to create new things or improve on what already exists. They don’t settle for the status quo.
Belief. They believe in their ability to create something better.
Perseverance. They aren’t deterred by what others say or think, and they never quit, even in the face of ridicule.
As leaders, one of our jobs is to promote experimentation and innovation in ourselves and in others. We create conditions where employees are supported to be curious, identify unmet needs, believe in the outcome and have the courage to follow through.
How can you create an environment where experimentation flourishes?
Here are a few ideas.
Assess and respond.
A necessary first step is to assess your organization’s current “experimentation climate.” Begin by asking yourself some questions, such as:
- Do I (and other senior leaders) make it easy for people to introduce new ideas?
- Does the company have a process for idea review, evaluation and feedback?
If your assessment reveals that you aren’t doing enough to promote experimentation, identify a few concrete behaviors that you can use to energize the environment. Set personal and team targets for idea generation. Post the numbers of ideas generated on a daily basis. You might also set a challenge for increasing the number of ideas submitted on a daily basis for the first week. Be bold when you set your targets. Whatever number that first comes to mind, raise it higher.
Sponsor a contest, create innovation spaces and showcase great innovations to send the message that you’re serious about experimentation.
Use personal, positive reinforcement.
One strategy for overcoming negative, discouraging self-talk is to say to yourself and others, “I have a hundred more ideas where that one came from.” If one approach doesn’t work, you’ll figure out ways to modify it or reorient it, and you’ll keep doing that until you find the approach that does work.
One common characteristic of the world’s most innovative organizations is that they celebrate success. Recognize and reward all ideas and act on the good ones.
Ask yourself and others questions.
- What could we do to make this process or product even better?
- What would I, as the customer, want this product/service to do more of, less of or differently?
- How could we reduce the cost?
- How could we increase the value for customers?
Post these types of questions around your facility to stimulate ideas. Then encourage people to respond to them on a flip chart or internal website or blog.
New and improved ideas and products are born out of an intentional desire to improve ourselves and the world around us, an enthusiasm for the possibilities and a willingness to try and try again until we get it right. You may not be facing the kinds of challenges Kamkwamba was up against, but that’s no excuse to rest easy. Start applying the behaviors of experimentation and innovation personally and watch the positive impact on your business results.
Donna Rae Smith is a guest blogger for Smart Business. She has forged a career, enterprise and an applied discipline on the practice of teaching leaders to be masters of change. She is the founder and CEO of Bright Side Inc., a transformational change catalyst company with an emphasis on the behavior-side of change. Bright Side®, The Behavioral Strategy Company, has partnered with more than 250 of the world’s most influential companies. For more information, please visit www.bright-side.com or contact Donna Rae at email@example.com.
Yoh Services was a boutique shop in a bind.
Nearly three years ago, when Lori Schultz joined Yoh Services LLC as its president, the company was enduring the hardships of the recession, like just about every business in America. But the work force solutions company — a 5,200-employee subsidiary of Day & Zimmerman — was dealing with another layer of inefficiency on top of the recession’s effects.
“Yoh had 12 different brands, operating very fragmented out into the service delivery model,” Schultz says. “We were operating very much in a boutique fashion. So, for example, IT ran separate, engineering ran separate, health care ran separate. They all ran under separate leadership, no synergies between any of the groups.”
It was a model that had worked at one time, but the market started changing in the first years of the new millennium, and the recession accelerated the pace of change to warp speed.
“The boutique model was very much a model that made sense in the ’90s, with higher margins and delivery service to the client,” Schultz says. “However, a lot of the transformation in our business really led to having more bundled services, more streamlined. Specialization still existed, but you still had a very streamlined delivery model to clients.”
Schultz had to spearhead an effort to consolidate Yoh from 12 specialized brands to one full-service brand containing a number of product and service offerings. Conceptually, it all made sense. In practice, it wasn’t nearly as clean of a transition. Schultz and her leadership team had to convince 5,200 people that the old system was outdated, the new system was the way of the future, and the time was right to make the change.
“That was the biggest challenge on my plate,” she says. “To get the buy-in at the management level, make sure we had the right teams in place, and that this was something that we had to do; then, to take that and get buy-in throughout the whole organization.”
Learn the process
Before Schultz could change anything, she needed to understand how Yoh’s system worked — or didn’t work. She needed to understand the inconsistencies and inefficiencies in the boutique operating system in order to sit down with her management team and build a system that better addressed the needs of the current marketplace.
Gaining that understanding meant getting out of the office. Schultz traveled throughout Yoh’s footprint, talking with associates and gaining a better knowledge of the company’s product and service delivery model to its clients.
“I needed to understand some of the unique challenges our people in the field faced,” Schultz says. “That was step one.”
The second step was to identify areas in which Yoh could build synergies among various operating entities. To comprehend that, she needed to develop relationships with the managers leading the various operating units.
“Part of the dynamics is making sure I have the right leadership team in place,” she says. “I can’t get this done without having the right leadership team in place. As all of this transformation is happening at the same time, I’m looking at my leadership team, making changes in some cases, and in other cases, bringing in new talent from the outside.”
Schultz needed a leadership team with excellent communication skills and complete buy-in with the new company direction, and she needed the entire leadership team in place, empowered and on board before anyone at Yoh corporate headquarters could even think about rolling out the new vision to the company at large.
Lead your leadership
Schultz didn’t change the composition of her leadership team all that much. But she did make major changes to how the people in place operated.
“The key was really spending some time with them and learning, No. 1, what their level of competency was, and then where they had been with the company, then how they fit into the new direction of the organization,” Schultz says. “We got a lot of feedback from them, too, about their history and what they wanted in terms of a future.”
As Schultz spoke to her leaders, she began to form an idea of how her leadership team could be constructed to provide the best possible leadership framework for the reconstructed Yoh organization.
“With some of our leaders, we made some dramatic changes to their existing roles,” she says. “We needed to put them in a role that I felt best suited them for the new organization. At the same time, we still left some of the team in their existing roles.”
The alterations to the leadership team cascaded down to the field leadership, where the dynamics needed to change in order to better respond to client needs in a comprehensive fashion.
“In the field, we made major changes because we were a very strong delivery model organization,” Schultz says. “We were very good at serving our clients, but we were not a sales organization. So we had to change the dynamic in terms of delivery and sales. We brought in new people to serve in some of those roles. The result, and what I have today, is a kind of hybrid leadership team. I have a mix of existing people who were here when I joined Yoh and some new talent as well. I would say it’s about a 50-50 mix now.”
With a blend of new and established leaders, Schultz faced another challenge: developing cohesion among leaders who were either used to the old way of doing things or completely unfamiliar with the internal workings of Yoh. It was a battle that Schultz had to fight simultaneously on two fronts.
“Getting the new people engaged in the new vision and strategy is easy, because they came to work for you because of that very reason,” Schultz says. “You lay out the strategy, vision and direction, and that is why they come to work for you.
“The biggest challenge was really changing the direction of my existing team, because for about a year, we really had to oversee a change management issue. When you change an organization, you really blow it up and start from scratch. You are changing everything about the direction of the organization, and if you have an existing team, you need to get buy-in regardless of what you do.”
With an existing team that has to be convinced that the new way of doing business is going to be better than the old way, getting them to a point where they completely accept the new direction and mesh with new team members is a process governed by time. It takes communication, persuasion and patience to get your existing team members on board.
“Change management takes time,” Schultz says. “You have to really recognize that some of your people need more time from you to really understand the vision and the direction. You need to listen to them, listen to how they feel about being a part of a new direction.
“Then you need to be able to continuously communicate where we’re going and what is in it for them. Even then, you end up having people who revert back to the old way, and you have to come back and try to refocus them on the future and what is in front of them, not what is in the past.”
If you encounter reluctant adopters, the level of patience you show with them will likely be in direct proportion to their importance to the organization. But if a person has been in a significant role for a long time and is well-known and respected throughout the company, the extra effort will be worth it.
“If you think this is going to be a leader who is vital to the future of your organization, then you’re going to need to spend the time because it is a trust situation,” Schultz says. “If you’re coming in as a new president or CEO, and the person has been in the organization, say, 17 years, you need to build that relationship and trust. If you’re in that person’s position, trust is a difficult thing to have when a new leader is coming in and doing all these transformational things.
“You need to remember that it’s not just about you talking to them and trying to get them over the fence. You need to understand where they are coming from, too. It will benefit everyone if you can build that trust because the information they can provide to you with regard to history is important.”
Roll it out
Once Schultz developed a satisfactory level of cohesion among the leaders at Yoh, she then had to turn her attention to rolling out the new direction to the company at large.
When dealing with thousands of employees, you can’t concern yourself with the adoption of the plan by every individual. What you want is to hit for the highest possible average.
Schultz attempted to improve her batting stats by holding companywide calls to brief all employees on the progress of the transition.
“I would use those calls to communicate the direction and the vision, and how it impacted them,” Schultz says. “Moving forward, I’ve found that also has to be carried through on a quarterly basis. If you don’t continue to carry that message to the leadership team, it starts to lose a lot of value.”
Yoh’s training modules also became important buy-in tools to use on the company at large. The leadership staff at corporate headquarters initially went through a 3.5-day training session that covered the future strategic direction of the company, along with breakout sessions on the company’s new business models. From there, management worked together to build training programs for the company at large.
Though the training process is going to depend largely on the type of organization you want to build, Schultz says there is almost always a need to implement some form of a cascading training program that successively engages each level of the organization.
“It does depend a lot on where you are financially as an organization, but if you are starting with a flat organization as we were, you have to look at the leader and the people who are doing really well to put together a committee to build some of the training programs for you. Then, you look to execute and implement the training.”
Any time you can implement training in a peer-to-peer format, it’s another way you can help the buy-in process when training for a new organizational direction.
“That is one of the reasons that I think we had the most buy-in,” Schultz says. “In a lot of cases, the training was done by peer groups, and people who are recognized throughout the organization as having excelled in the field in which they are training. It was really about training that was more reality-based versus training that was more or less fluff. We were able to leverage relationships that already existed in the organization and roll it out regionally, versus having to spend a lot of money on having a few people travel everywhere and do all the training.
“The key is, if you want to do something like this, it is all built internally and rolled out through internal processes.”
How to reach: Yoh Services LLC, (215) 656-2650 or www.yoh.com
The Schultz file
Education: Psychology and business degrees from California State University, Northridge
Previous position: Senior vice president for Ajilon Consulting and for Adecco’s Engineering & Technical and Medical & Science divisions for the western U.S., responsible for overseeing all field sales and operations and developing and executing new growth strategies to sustain and increase revenue within both lines of business.
What is the best business lesson you’ve learned?
The best lesson I’ve learned is that when you come into a new organization, you want to come in and make an impact quickly, and have success quickly. But you also want to do a reality check and make sure that you’re not outpacing the rest of your team as you’re trying to get things done. Because then, you might not be listening as much as you should as you’re just trying to keep up. At times, you need to maybe slow down and recalibrate your expectations a bit.
What is your definition of success?
To get genuinely excited about contributing. I think excitement drives your success. And when that happens, you can spread the excitement around and find other people who want to contribute and want to be heard. That means success for the entire company.
Forget the rabbits. Hunt the big game.
The one-time advice of a colleague has become a guiding philosophy for Andrew Littlefair in his role as president and CEO of Clean Energy Fuels Corp., a company that is trying to turn natural gas into the commercial vehicle fuel of the future. But to make a real impact in an emerging industry, Littlefair has needed to thing big — he’s needed big thinkers, big goals and big customers to raise the profile of his business.
In short, he’s needed to hunt for elephants.
“One of the best pieces of advice I ever got was “You guys need to be hunting for elephants,” Littlefair says. “Don’t chase rabbits. That is why we needed to develop a good understanding of what our value proposition is to our customers. We needed to focus on fleets, and fleets that use a lot of fuel, so we really tried to carefully design around those markets. Then, we have stayed laser focused on going after those. We focus on airports and vehicles that operate out of airports, refuse trucks, transit buses, and now heavy duty trucks.”
To continually hunt for elephants, Littlefair needs to reinforce what Clean Energy is as a company, who the company serves and where the company needs to go in the future. Then he needs to enable his people to achieve those goals. With Littlefair’s philosophy as a main driving force, Clean Energy has risen from $91 million in 2006 revenue to $211 million in 2010 revenue.
“Ultimately, we’re faced not only with running a business, but also creating an industry,” Littlefair says. “That is kind of a significant, ongoing and important challenge that we face. Moving people to a new fuel has all sorts of new stuff associated with it. It’s easier today than it has been in the past, but it has been a challenge and it will continue to be a challenge that keeps us on our toes.”
Find your customers
Most leafy plants grow toward a light source. Your business, in that sense, really isn’t that much different from the potted plants on your windowsills at home. Your light source is the revenue provided by your customers. Where the most revenue can be generated is almost certainly where you’ll grow your business.
About a decade ago, Clean Energy scored one of its biggest and longest-standing contracts with Waste Management. At the time, there was a governmental push to reduce emissions from city service vehicles throughout Southern California. Littlefair and his staff saw an opportunity to convert diesel garbage haulers to natural gas. Waste Management was among the first sanitation companies in the region to hop aboard the natural gas bandwagon.
It was an ambitious project for company that was just entering the space, but it was a critical win for Littlefair and his team, and taught the leaders at Clean Energy a great deal about retaining a major client.
“We really didn’t have the right product at the time, so we worked with a company that was doing vehicle conversions, and we went out and got the grant money to pay for the conversion of their diesel trucks to natural gas,” Littlefair says. “Then we went out and built a station on Waste Management’s property to dispense fuel, and worked out a long term fueling contract. That started out 10 years ago with seven trucks, business has changed a little bit over time, and today we now have a national operation and management agreement with Waste Management. We work very closely with them on building their stations, even providing the equipment and doing the maintenance.”
But getting from converting the first garbage trucks to natural gas to maintaining a longstanding and strong relationship with Waste Management was a process that took years. It took a great deal of listening, adjusting and Littlefair doing whatever it took to continue to build the relationship.
“Early on in the business, utilities were involved, and they built stations,” he says. “But it was sort of a ‘build it and they will come’ theory. There were no natural gas vehicles out there to speak of, so it was sort of like building a station and looking for a needle in a haystack. So what we did was really start to analyze the markets, figured out what we really wanted, and started to identify customers that had what we wanted. We wanted companies with a lot of vehicles, and vehicles that used a lot of fuel, and preferably vehicles that operated as return-to-base vehicles, where they always came back to a central area for refueling and maintenance.”
Over time, Littlefair and his team began to identify the customers that met those criteria, including Waste Management, and began to reach out to them. Reaching out, in this case, means doing research and gaining a deep understanding of what the customer needs.
In Clean Energy’s case, Littlefair even hired a former Waste Management senior manager as a member of his executive team.
“I ended up hiring a senior guy from Waste Management as a vice president because he knew the refuse business and he spoke the lingo,” Littlefair says. “You always have to be talking to the customer, listening to the customer, and doing whatever you can to understand how you can best serve the customer. That is how you develop the strategy for how you are going to serve the market. In our case, and in the case of many businesses, you put a lot of that connection in the hands of your sales team. You listen to them, you empower them and you motivate them. You still lead them, but they’re your ears and eyes in the field, so you delegate that customer interaction to them and hold them responsible, because you as the leader can’t do it all.”
Listening to your customers is a great start. Defining the goals of your business, and rallying your people around those goals, is essential to long-term growth. But none of those initial steps will mean anything if the seeds you planted don’t take root.
Your vision grows roots through discipline. You need to execute each day on the systems and processes you have put into place, which are aimed at allowing your company to achieve the goals that you and your leadership team have set.
It’s a maintenance task that every business head has to perform. If you aren’t setting the tone from your position, you can’t expect others to maintain the course you have set for the company.
“I’d say ‘discipline’ is the right term,” Littlefair says. “You just have to stay disciplined. I’m a pretty good motivator and leader, and a pretty good communicator, so we’re always trying to make sure that we’re doing things to ensure that we all stay on the same page. Businesses change, we add and we adapt, but you still want to make sure everybody is with you and all on the same mission. That is all really key.”
A big part of communicating and reinforcing goals is measurement. Littlefair says the long-held business belief that an ability to measure something equals an ability to manage it is still correct. The nature of how you measure and what you measure might change over time, but the need to quantify results is always present.
“How do you develop the discipline? Part of it is you need to measure you success, take stock of where are and whether you are doing well enough or not,” Littlefair says. “You had better know what you are aiming for and you had better set some goals to get there. Sometimes, I get criticism from within the company that I set goals too high. But I feel like you need to set goals that are a reach to obtain. Anybody can hit a low goal. I want to keep the organization striving for something outside their reach.”
Ambitious goals do prevent a treadmill mindset from taking hold, in which your employees become complacent and content to do the same job at the same level of competency every day. That is a recipe for stalled growth, backsliding and getting left in the dust by your competition.
But you still need to find the sweet spot between ambitious and unattainable. If you set goals that are too far beyond the capabilities of your people, you’ll overburden them, stress levels throughout the company will rise sharply, and the overall effect will be damaging to your collective morale.
It’s a tightrope that Littlefair has repeatedly walked as he continually tries to serve the needs of bigger and more demanding customers, while still staying within the capabilities of his team.
“It’s harder for me, because I am a sales-oriented individual,” he says. “I do have to check myself on that. If you set goals that are too far out of reach, the goal no longer becomes significant because you can’t attain it. What I’ve found over the years is that the organization counterbalances. If there is somebody in the organization who is too optimistic, there is somebody else who is more realistic. Any good leader is going to have to end up balancing that. You listen and take into consideration the various points of view. Not that you’re going to run your business by committee, but you can take the information from your management team, and that ends up being pretty important as you finalize your goals.”
Finding that balance as a leader is not an exact science. A great deal of balancing aggressive optimism with pragmatic realism comes from knowing the people in your organization, the customers you serve and the conditions of the market.
“There isn’t a recipe, but that is what you need to do,” Littlefair says. “You need to have an optimistic viewpoint. Sometimes being too realistic is too pessimistic. So I think a good leader takes all these inputs and puts them into place, and work that out. And you don’t do it in a vacuum, you get a lot of that from your company and from the people who work with you.”
Ultimately, growing your business and broaching new markets takes vision and a willingness to take calculated risks. But making those changes stick is a far less glamorous and far more mundane task. You need to connect with customers, serve their needs and ensure that everyone in the company is maintaining the discipline to do the same. Much like Thomas Edison’s often-referenced description of the invention process, it’s 1 percent inspiration and 99 percent perspiration.
“My job as the leader is to coalesce the vision, getting it approved by our board and developing that with our senior management,” Littlefair says. “I’m kind of the chief communication officer and the chief motivator. There are certain things I have to do that no one else has to do and vice versa. But I think what a good leader does is set the vision and the implementation, hold people accountable and make the adjustments necessary for that to happen.”
How to reach: Clean Energy Fuels Corp., (562) 493-2804 or www.cleanenergyfuels.com
The Littlefair file
History: I was born in Detroit, and we moved to California in 1963. I grew up in Torrance, Calif.
Education: B.A. in political science, University of Southern California
Littlefair on constructing a clear message: Like most companies, we have an annual strategic planning process. And we’re still small and entrepreneurial, so don’t confuse our process with what might happen at some place like IBM. But our managers gather information from well down in the organization, we have a series of one or two-day meetings, we started out with a larger group and break it down to a smaller group, cover a lot of areas, and we begin to sort new business opportunities, existing opportunities, reflect on past goals. It’s kind of a living process that goes on for a couple of months.
And through those several meetings, you ask people to embellish on their thoughts and different ideas, and what they think we need to pursue. As you develop a plan, and a lot of these things will end up being in the plan, that is part of communication, just the participation in the plan begins to bring everybody along. Of course, it doesn’t necessarily mean that everybody is together. When you finish the plan, they’re kind of 75 percent or 80 percent along the way, you need to make sure you have a plan to disseminate the goals, and you can’t do it too late in the year. You have to do it early and often, and you have to empower your team and managers to disseminate the plan, and if your company is small enough, you’ll try to do as much of that as you can personally.
Littlefair on developing a value proposition for customers: I think it is trying to stick to your knitting, understanding what it is you do well and what the proposition is that you have, and why you are better than others. Then stay damn focused on it, but realize that it sometimes takes longer that you think. One of the things I think as an entrepreneur or a business leader is that sometimes these things take longer than you think. Occasionally, you just have to kind of stick with it and through the thick and thin sometimes. That's the key, and that's what anybody really has to do in business.
In late 2008 and early 2009, the recession was sending many companies into survival mode. The customer base was drying up, and even if you still had a substantial portfolio of customers, your ability to produce and ship products was likely crippled by skyrocketing energy costs.
But through all the turmoil, Sunil Agrawal saw an opportunity for his business, Nova Consultants Inc.
“If you remember back when crude oil hit almost $150 a barrel, we were sitting in our office thinking about how one third of the GNP in this country was going toward energy, and all this money is going to the same countries which we are trying to fight against,” says Agrawal, Nova’s founder, owner and president. “So we tried to think, what is the one thing we will always need in this country to live on? And we thought that it would be energy. So let's develop ways to save energy, to harness energy which comes from non-carbon sources.”
Agrawal decided to enter the solar energy market. It has been a challenge for the company to keep up with the ever-changing face of solar energy technology, but Agrawal and his team have been able to master the market enough to generate $10 million in 2011 revenue.
Smart Business spoke with Agrawal about how Nova was able to adapt, and the importance of flexibility in the world of business.
How did you identify solar energy as a good direction for the company?
We have on our key staff chemical engineers and electrical engineers. In 2008 and ’09, the Obama Administration was talking about alternative energy, about coming up with a program for alternative energy, so we thought we might have some opportunity in that field. Three or four engineers in our offices started attending conferences and reading journals, reading books, because there was no formal program at that time that could train someone in solar engineering. So we had the time, the guys were there, they were getting paid, they were very interested, they wanted to do something different, so we decided to give solar energy a try to see how it works.
What else in the company's infrastructure allowed you to capitalize on the opportunity?
Raw materials were not needed. It was all intellectual material that was needed. We had plenty of intellectual material to make it happen, and we used it quite a bit. All the investments that we made in 2008 and 2009 paid off in 2010 and 2011. We now have a number of multimillion-dollar contracts. We have positioned ourselves well for growth.
What would you tell other business leaders about defining a new direction for company?
What happens is that when things are going good, people don’t look for new opportunities. They don't look at the future; they are happy with the way things are going. Even though solar energy is developing a presence here in the United States, we are 10 years behind everyone else. It is because things were going good in this country as far as energy is concerned. So we developed it and gave to other countries such as Germany, Japan and Spain. For example, in Germany, 30 percent of the power comes from solar.
So I would say to other CEOs, look to the future. Don't get too caught up in the present. Look in the future and see what is coming toward you. You have to deal with the present but prepare yourself to deal with the future.
Is there still a way to keep that future-focused mentality when times are good?
If you want to grow, keep growing. You have to maintain that, you have to look to the future. If you don’t, then what will happen, everything that you are doing now is going to become routine, and you will lose your edge. Without an edge, without a core competency, you cannot survive in the future.
What is the danger of getting complacent?
The danger is pretty high, because you become an antique then. You are done, and by the time you try to catch up, the technology has already moved on. In our own field, what we are doing right now, engineering energy, these fuels are changing on a weekly basis. The solar panels that we used three months ago are obsolete now. The efficiency and power is increasing that rapidly. So in our field, either you are in or you are out. You don’t have the option to get in and sit back. You have to keep moving with the times.
How to reach: Nova Consultants Inc., (248) 347-3512 or www.novaconsultants.com
Ryan Maibach had a solid background when he stepped into the president’s role at construction firm Barton Malow Co. A construction engineering graduate of Purdue University, he had been working at the firm in various capacities since 1997, most recently as operations vice president for the company’s industrial group.
One of several Maibach family members on Barton Malow’s leadership team, he had worked alongside his father, chairman and CEO Ben Maibach III, preparing for a larger role within the company.
Maibach was about as prepared as any person could have been to take over as president. But when the promotion came in April 2011, he still found himself challenged to take a $1.3 billion company, with a nationwide presence of 1,500 employees all trying to navigate a still-sluggish economy, and get it ready for future growth.
“Early on, I was just trying to understand what all is in play, especially coming into the position at a pretty challenging time for our industry,” Maibach says. “The biggest challenge was trying to figure out how we best cope with a lot of economic and industry realities, and how we continue to grow and thrive despite some of those.”
Maibach quickly isolated his single biggest need as a new leader: he had to connect with the people at Barton Malow, regardless of what job they performed or where they were stationed within the company’s footprint. He had to engage them in dialogue, solicit feedback on the vision, values and policies of the leadership team and use the employee input to define future goals for the company, both over the short term and long term.
“It was a lot of asking questions, and more often than not, asking open-ended questions,” Maibach says. “When you leave things open-ended, people are going to take the conversation where they want it to go. More often than not, it’s what you need to hear, though not always what you want to hear.”
As operations vice president for the industrial segment, Maibach had overseen one of Barton Malow’s five business units. Along with the heads of the four other business units, Maibach had served on the company’s board, interacting and developing relationships with his peers on staff. Maibach says that fact did help him in his transition to the president’s role.
“The process was a little easier because there is a good degree of interaction with your peers,” Maibach says. “It’s not as though I was coming into a situation that I was completely unfamiliar with.”
Like any new leader has to, Maibach used the advantages he had to help smooth the transition, both for himself and the rest of the company. With a degree of stability already established with the management level, Maibach leveraged it to reach out to people at all levels and locations within the company, attempting to build relationships and a sense of familiarity, and rally people around his vision for the future.
“It might sound cliché, but I think the success and failure of a company is directly related to how effective our people are,” he says. “It’s in direct proportion to how solid our people are, how effective and informed they are as employees. So, in the time I’ve been in this position, it has been about trying to reach out and engage a broader segment of our employees, the people that I hadn’t had as much of a chance to interact with one-on-one in my previous position.”
There wasn’t any magic to it. Maibach got on a plane and logged thousands of air miles, travelling to Barton Malow locations and job sites from coast to coast, as far south as Florida and as far north as the Upper Peninsula of Michigan.
“I wanted to reach out, talk to them and understand their view of the company, their role in it and what they see,” Maibach says. “What are their challenges and obstacles, and how best to start working down that list, and getting everyone aligned on the company’s goals and objectives.”
Maibach wanted to provide positive reinforcement for his people, but as he traveled the country during his first months on the job, his people provided him with a great deal of positive reinforcement, too. Maibach discovered that he had a work force with a desire to perform at a high level, people who believed in the company and wanted to continue driving it toward success.
“You hear a lot of the loyalty and passion that people feel for the company,” Maibach says. “You see a lot of the appreciation that people have for certain values, namely the integrity of the company and the associated trust that a lot of individuals have in the company. You also hear from a lot of people the desire to be a part of something big, to be a part of the bigger picture. That, as a leader, is what drives you to provide more opportunities for people to be engaged and be a part of something more than their particular project or their particular role in the company.
“That is really the desire as we look out into a new era. How do we provide opportunities for some really great people to play a role in charting a course and setting a direction for what they are going to experience in the future?”
All of the time Maibach spent travelling as the new president amounted to a good first step in establishing rapport with employees and focusing them on the company future goals. But if it had ended there, that’s all it would have ever been — a good first step, a nice initial gesture, and little else.
For your actions to have any meaningful impact over the long haul, they need reinforcement. You reinforce by continually encouraging the behavior you preached, and hopefully demonstrated, in the first place.
In Maibach’s case, he sowed seeds of engagement. Now, when engaged employees come forward with ideas and input on the company’s future direction, Maibach needs to take the ideas seriously and offer constructive feedback — whether the company can use the idea or not.
“I got an e-mail from a young project engineer who I helped to recruit,” Maibach says. “He thought he had this terrific lead for new business, but it was in a location that is not so much a target for us. He sent us a 12-paragraph e-mail on why this was such an awesome idea, so it was obvious that he really believed in it and believe it was a good idea for the company. In that situation, it would have been very unfortunate if the response he received was ‘No, you are wrong.’ It takes a bit more time, but I firmly believe that every individual in the company has a right to as ‘Why?’ in any circumstance. If the idea that they submitted doesn’t make sense for us, part of your response as a leader has to tell them why it doesn’t make sense.”
Responding to feedback in an open, truthful fashion is an example of actions following words. If you preach about your company’s open culture, and how employees’ opinions are valued, you have to demonstrate it. By demonstrating your words through your deeds, you build an increased level of trust with your work force.
As an incoming executive, developing trust was one of the most critical tasks Maibach had to accomplish. If employees receive any whiff of what they think is hypocrisy or an aloof attitude from the members of upper management, your culture will suffer and the flow of ideas can slow to a trickle, or stop outright, which can damage your company’s ability to innovate and adapt in a fast-changing business climate.
“Trust is imperative,” Maibach says. “I can’t imagine not having a barometer for doing the things you say you are going to do. I can’t imagine intentionally looking to mislead. I will readily admit that I’m far from perfect, and I don’t think anyone in the organization would disagree, but if there is any erosion in the trust factor around here, it is not due to lack of trying. There are so many proverbs and idioms out there about doing what you say you’re going to do, and the golden rule of doing to others as you would have them do to you. But really, it is as simple as that. And if you can’t do something, explain why.
“You can’t fake concern or compassion. You either genuinely feel it or you don’t. If you genuinely do, people pick up on that and it helps to build trust. People will then feel like you are looking out for their best interest, and they are going to be a lot more game to engage you.”
Many over-the-counter medicines have an active ingredient. It makes the headache medicine cure your headache; it makes the cough syrup quiet your cough. When developing a culture that values employee ideas and feedback, and encourages open dialogue throughout all levels of the organization, the active ingredient is a set of well-defined and compelling goals for the company.
The goals should have their roots what you believe in as a leader, and the values you want everyone in your organization to embrace.
“The purpose, firmly, is that everyone should understand why we’re here, what we’re all about, what is it we want to look to try and accomplish,” Maibach says. “Then, you want to have that resonate throughout the company. It’s centered on your values. What is it that you truly believe in, and how have you acted and functioned over the past several years? It’s not just aspirational values, but what is it that you truly and genuinely hold dear?”
Translating values into goals means turning them into actionable items that are aimed at the achievement of a definite outcome.
“The values have to translate into specific actions,” Maibach says. “How we expect people to engage certain situations, and how to act and behave in those situations. You can talk about broad concepts, like integrity, but what does that really mean. You need to get more specific on that. It’s important to be credible and do what you say, and act in a manner that is consistent with what you preach. To do that, you have to be able to take what you believe and where you want to go as an organization, and put it down on paper.”
Everything Maibach has done in his first year on the job as president of Barton Malow has really boiled down to one word: presence. He developed a presence with his employees, maintained that presence with an ongoing dialogue, and ensured that his presence was tied to the messages he continued to communicate, focusing employees on the values and goals of the company, both now and moving forward.
“Face-to-face presence is certainly the best, but the reality is that when you are as spread out as we are, you simply can’t be physically present everywhere. So you continually communicate, even if it’s just a quick call or note, and hopefully that presence is felt. You’re trying to dive deeper into the organization and understand the things that are in play for everyone. It’s not just presence for the sake of presence. It’s trying to convey the care and concern for individuals, and for their well-being.”
How to reach: Barton Malow Co., (248) 436-5000 or www.bartonmalow.com
The Maibach file
Education: B.S. in construction engineering, Purdue University
What is the best business lesson you’ve learned?
I had the opportunity to work for a really fantastic superintendent, and he taught me that in order to have an understanding of your role as a leader, you have to develop an empathy and understanding, to some degree, of the people who work for you. So he used to send me out to set blocks or rake concrete or lay tile. It was really a fantastic experience. It helped me to understand and have a tremendous appreciation for everything that goes on at a construction site, and what it takes to execute the work that clients are hiring us to do.
What traits or skills are essential for a business leader?
Any leader is going to have to have the ability to set a direction, then to get people to rally around that direction, and encourage others along the way. You have to manage the resources that you have, play the hand you are dealt. And anyone in a leadership position is going to have to be able to articulate a vision.
What is your definition of success?
There are different buckets of success. Individually, it’s accomplishing goals and objectives related to the vision for what we are trying to accomplish. For the company overall, it’s to have every person understand their purpose, realize what they are trying to accomplish and what they hope to achieve. Success in an organization is really when you can take all of those things and align them on a common purpose and vision, and structure it in a manner where success for the organization and for the individual are one and the same.
Inclusion of minority and women-owned companies isn’t just the right thing to do – it’s the smart thing to do to economically benefit the region.
That’s the message from the Northeast Ohio Economic Inclusion Forum Series. The series aims to engage the public, private and nonprofit sectors in creating a targeted, comprehensive economic inclusion action plan for Northeast Ohio.
“A lot of growth in the economy comes from small businesses, and minority small businesses are an important part of that fabric,” says Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland. “It is very important to our economic growth, both from a region and a country, to have every individual, every part of the workforce, fully engaged.”
The March panel for the third phase of the series, “Perspectives from the Private Sector,” discussed the role larger companies can and should play in fostering economic inclusion, and how this benefits their business.
Create a diverse staff to foster innovation
Inclusion begins internally with the hiring of a diverse workforce, says Chris Connor, chairman and CEO of Sherwin Williams. This ensures you can provide relatable service to your customer base.
“We look to hire, recruit, train and develop the leadership of our company from this broad spectrum of different folks so that we can, in fact, emulate and look like our customers,” Connor says.
A diverse staff also fosters innovation and creativity by bringing together diverse perspectives.
“Diversity of ideas is critical to better decision-making,” Pianalto says. “We made it a part of our strategic direction almost 10 years ago to make sure that we had a very diverse and inclusive organization and culture.”
To ensure an inclusive culture, inclusion must be embraced, communicated and incentivized from the top down.
“This is a topic that gets discussed in the boardroom; it’s a goal that I’m measured on by my board,” Connor says. “There are compensation and incentive goals on this topic of inclusion, so it’s on everybody’s hearts and minds. We just made this a business prerogative as opposed to a check-the-box, to-do project.”
How you can help
Although Pianalto says bank lending is on the rise, the current economic state makes it difficult for small companies to gain access to capital. That’s where larger companies can step in to help their client companies.
Paint manufacturing companies commonly support professional painting contractors by selling them the equipment and materials they need on credit. This enables the contractors to begin work, hire others and generate cash flow.
“You’re seeing more businesses step in in a very focused, strategic segment of supporting customers in providing some of that financial quota to get these things going,” Connor says. “We’ve done a lot of that for minorities, and we’ve been richly rewarded by that.”
Larger companies can also ensure smaller companies are able to do business by “unbundling” large projects, breaking it down into smaller pieces so that people have the chance to bid on types of business that they’re capable of handling.
This method was adopted in the building of Cleveland’s Horseshoe Casino, with a point scale used to evaluate potential contractors’ levels of inclusion.
“It takes a little bit more coordination on the front end, but at the back end, the rewards, the mentality, the excitement it creates within the job of people that would have never been afforded this opportunity before is immeasurable,” says Jeff Cohen, CEO and founder of Rock Cos. and vice chairman of the Cleveland Cavaliers and co-visionary of the Ohio Casino Initiative.
While this unbundling can help small companies on a local level, Warren Anderson, president and general manager of Anderson DuBose — the 17th largest African American-owned industrial services company in the U.S. — says this unbundling can hurt growing minority and women-owned companies by making a job too small.
“If you’re a small-to-medium company like mine, a small contract is too small,” he says. “But a national contract with a bundled approach across the country is too large.”
With that in mind, companies can also take another approach to inclusion by giving big contracts to prime contractors that are capable of handling the magnitude and encouraging them to partner with smaller subcontractors for local materials and labor. Cohen says such partnerships added value to potential contractors on the casino project’s inclusion evaluation scale.
Women- and minority-owned firms have an obligation to earn business through top-notch service, says Anderson.
“I compete for contracts based on superior price, service and personnel,” he says. “So to me, in terms of running my business, it’s about being as good as anybody and being attractive … for companies to award contracts to, so I’m included in the bids.”
Successful women and minority-owned firms also have an obligation to help other women- and minority-owned businesses with their growth.
“We encourage those who have been successful to turn around, reach back and lend a helping hand to those who have not been as fortunate,” Cohen says. “You need to provide those opportunities, because in many instances, that’s all it’s about — being given the opportunity to perform.”
For more information:
Watch “Rachel Talton of Synergy says economic inclusion action plan will benefit northeast Ohio”
Watch “Jodi Berg of Vitamix Corp. says inclusion promotes innovation and inspiration”
How to reach: The Northeast Ohio Economic Inclusion Forum Series, http://theciviccommons.com/issues/neo-economic-inclusion