John Stroup was not taking over a company in trouble when he was named president and CEO at Belden Inc. in late 2005. The electronic cable designer and manufacturer provides cables for a variety of industries and was doing a good job, with revenue hitting the $1 billion mark in 2005, up more than $350 million from the year before.
But Stroup saw a flaw that he believed needed to be addressed.
“The thing that has been my greatest challenge at Belden and continues to be my greatest challenge is really creating consistent alignment within the organization and being able to execute on what we believe to be important on a daily basis,” Stroup says.
What separates the average companies from the great ones is often the discipline and focus they give to the things they do best. Each fall, Stroup noticed that employees just don’t seem to have the same focus on company priorities that they had in January and February.
“Other things creep in that people want to work on,” Stroup says. “People are well-intended and it’s not like these ideas are bad ideas. But in any organization, and most notably a company, it’s not so important to determine what you’re going to work on. Often it’s more important to figure out what you’re not going to work on, because you just don’t have endless resources.”
Stroup wanted to find a way to keep his 7,500 employees focused on the things that mattered most to the success of Belden.
The answer was to start using hoshin planning, which is a systematic planning methodology that was developed in Japan.
“It allows a company to literally on one piece of paper be able to identify the key breakthrough priorities that are important to us,” Stroup says.
All he needed to do now was determine which key priorities would make it onto that paper, develop a plan to achieve those goals and do it in a way that Belden’s employees would support.Get to what matters
When you’re trying to bring order to your business and devise a strategy for how to get things done, it’s crucial that you do things in the right sequence.
“The execution of your plan is entirely different than the development of your plan,” Stroup says. “Those two things really need to be done separately and they need to be done sequentially. Otherwise, you’re going to have great execution but on the wrong things, or you’re going to pick the right things, but you’re not going to execute any of them very well.”
Your first step should be to pull in your critical thinkers and get down on paper the most important things that matter to your business. Make an agreement that this list will not include personal pet projects that don’t serve the greater good of the business.
“It’s not about, ‘Here’s the thing I want to do,’” Stroup says. “It’s really got to be a very thought-based process with as much data as you can possibly get to be able to accurately identify those things that are truly strategic.”
Be purposely divergent in the beginning to allow for the consideration of all ideas that fit this mold.
“Then I ask each one of those people to dive into more detail in their specific areas, which allows them to involve others in the process,” Stroup says. “We have eight to nine different things we’re really looking at in detail and within each of those eight to nine teams, we probably have no more than eight to nine people. So in our company, we probably have nearly 100 people that are involved in the process. But we have nine to 10 people who have oversight in the final decisions of the working of the plan itself.”
As you’re selecting people, be thoughtful about how the experience will help the individuals chosen.
“The company may benefit from an individual being on a particular subject, but that individual might actually benefit more from being on another subject because that’s an area where they really need to develop,” Stroup says. “So we really try to take both into consideration when we develop the teams.”
At some point, you need to change from being divergent to convergent and get your list boiled down to the essentials.
“The process you use to converge can be as simple as voting around the room or as authoritarian as the CEO saying, ‘Look, these are the three things we are going to work on,’” Stroup says. “It sort of depends on the style of the leader and the style of the company.”Stick to it
A business plan is the equivalent of a personal exercise plan: If you don’t act on it, nothing happens.
“If we all ate well and exercised every day, our health care costs would be cut in half,” Stroup says.
Sticking to a business plan requires that same type of daily commitment.
“It’s all about a culture of discipline,” Stroup says. “I don’t think there’s any way to do it quite frankly if you don’t have a CEO that embraces and lives that culture of discipline. If the CEO doesn’t, you create an opportunity for everybody to feel like it’s OK that they took Wednesday off or took Friday off or they felt it was OK not to follow up.”
It comes down to setting expectations for everyone.
“The limited amount of time you have with any individual means you have almost no opportunity to observe and follow up on how they spend their time,” Stroup says. “I start by setting expectations. If my expectations are not high enough, then people are going to have tons of opportunities to waste time. I try really hard to make sure my expectations are such that there isn’t a lot of free time.”
While you can’t establish tight bonds when you have thousands of employees, you do still need to have conversations and be out there with your people and talking to them about how they are doing.
“You can find out pretty easily whether or not somebody really is trying and struggling to perform as opposed to somebody that isn’t performing but isn’t really trying very hard,” Stroup says. “That’s a pretty easy thing to do if you invest the time with people.”
To make sure everyone sticks to the plan and is making regular progress, Stroup has his employees develop their own metrics that are specifically tailored to their responsibility at the company.
“Operations have had metrics for years,” Stroup says. “Whether it’s quality, on-time delivery, productivity, safety — the operations team has had metrics forever. One that is a little bit less straightforward is human resources. But of all the groups we have in Belden, I’d say the human resources group has done as good a job as anyone, if not better, of identifying really good metrics to determine whether the things they are doing are making a difference.”
The solution for the HR team was tracking employee engagement — how good is each employee at understanding the things he or she does and how the employee connects to the company’s goals.
“It really tries to get at just how effective and engaged our employees are,” Stroup says. “Our human resources team has a measure for that every month and they measure it every month.”
Employees who struggle or slip on their metrics are not going to be punished just for ha ving a bad day, week or month.
“It’s OK with us if you are behind plan because we purposely create stretch objectives,” Stroup says. “Reaching our objectives is very difficult and it’s OK if you fall short. But it’s not OK if you are not vigorously trying to figure out why you fell short and what you feel you need to do differently to get yourself back on track. That’s what we’re focused on.”
Making the metrics public provides a little extra incentive and instills some competition in the effort to get better.
“There’s one thing that everybody wants to know and that is, ‘What’s the score?’” Stroup says. “I know I always tried a little harder when the scoreboard was on. I’m a big believer that everybody needs to have a scoreboard and they all need to be turned on.”
Stroup wants his employees to always be trying to win.
“It’s not OK just to go out and work hard,” Stroup says. “We want to win and when we don’t, it sort of irks us a little bit. We want to figure out what we didn’t do or what we did do that mattered.”Don’t quit
Stroup has received confirmation as to the success of his plan each year at the company’s annual board meeting.
“Every year, we’ve revisited the list of strategic issues and opportunities,” Stroup says. “We have not changed any of our issues and opportunities. We have exactly the same list. It gives our associates confidence that we are working on the right things. And if we continue to execute well on those things, we’ll continue to deliver the kind of improvement we have over the last three or four years.”
Under Stroup’s guidance, Belden’s revenue has risen from $1.25 billion in 2005 when he took over to $2 billion in fiscal 2008.
Even though the company has made great strides, Stroup says you have to always be pushing for more.
“We can only declare victory if two things happen,” Stroup says. “One, there is really a process that has been developed that is sustainable. And secondly, it’s in fact delivering the expected result. You cannot have just one. If you get the results without the sustainable process, you haven’t really done what you needed to get done. And if you develop a process, but it’s not giving you the desired results, then again, you’re not going to be happy.”
How to reach: Belden Inc., (314) 854-8000 or www.belden.com