“When you get married, you usually spend a lot of time with your future bride learning about her family and her beliefs and everything about her before you make up your mind that you’re going to spend the rest of your life with her,” Steinback says. “Getting married with partners is the same thing.”
Unfortunately for Steinback, he didn’t learn that lesson until after he and his partners had started CSI Leasing Inc. nearly 40 years ago.
“I didn’t do much due diligence on my partners,” says Steinback, the company’s co-founder and chairman. “I didn’t court them and figure out what they were all about and where they came from. I just knew they were people I worked with or people I just knew and I ended up going into business with them.”
Today, CSI Leasing is one of the largest independent IT leasing specialists in the world, with more than 650 employees and $367 million in fiscal 2008 revenue. Back in 1972, it was a brand-new operation with a team of leaders that couldn’t work together.
“We started the business as basically a partnership,” Steinback says. “Shortly thereafter, I realized you can’t run a business as a partnership unless you have leadership, especially when you’re all equal.
“I took over the leadership role early on because you couldn’t have four partners doing the same thing and duplicating each other’s efforts and stumbling over each other. That was quite honestly what happened the first couple years we were in business until I realized it doesn’t work that way. Equal partnerships just don’t work.”
Steinback feels like the lessons learned from his problems at the start of CSI have made him a better leader today. The experience has given him a better sense of how to build a strong and cohesive leadership team and how to get that team to work with him as the company’s leader.
“That is the reason why my entire management team has been with me for well over 20 years and we’ve had very little turnover within the company,” Steinback says.
Share the wealth
Steinback believes it’s one of the smartest things he’s ever done, and a key to his ability to develop his own leadership authority and keep everyone happy at the same time.
“It’s called ownership,” Steinback says. “The smartest thing I ever did was open up the ownership. A lot of people that started in this industry in the early days, some of them that were in and out of the business, the reason they left the business was because their bosses took all the money and ran.”
Steinback wanted to prove to his team that he wasn’t that type of individual and that he could be trusted as the leader. He also knew that the problem in the company’s early days was not with who owned what but with who was in charge.
So how do you convince people to follow you?
“Someone has to take the helm and create an organization and create an infrastructure and create a chain of command,” Steinback says. “Whatever your stock percentage is has nothing to do with your management responsibilities.”
Steinback decided to continue sharing the role of ownership of the company. He would fill the role of leader but share the role as owner of the business with his leadership team and other employees at CSI.
By sharing the profits or losses with those people who were putting in the hard work to make the company go, his goal was to put employees in a better position to respond to his authority as the leader of the organization.
“We have an infrastructure that says, ‘Here is the organization,’ and because there are 80 stockholders or whatever it is, that doesn’t mean they run the company,” Steinback says. “That just means if a dividend is paid, they get paid a dividend based on how many shares they own. They get a bonus based on what their job is. That’s the way it is run, which is the way any company should be run as far as I’m concerned.”
Give employees a stake in the economics of your business and they’ll have a better feel for how the company is doing and how their role contributes to that outcome. Spell out very clearly what the parameters are of their ownership so that there is no confusion.
“They all participate in the ups and downs and they like that,” Steinback says. “That wasn’t given to them. They bought in to it. Every key employee has a stock ownership in the firm.”
There are obviously other things that contribute to an employee’s level of satisfaction with an employer. But giving them a chance to own even a small part of the business is a good place to start toward earning some of that contentment.
“We built an infrastructure and built a foundation of good people that all participate in the wealth of this company,” Steinback says. “I haven’t, as the largest stockholder, raped this company and taken everything out of it. Now they are the ones that are going to sit around along with me and reap the rewards.”
Get people involved
Steinback knew buy-in from employees wouldn’t come strictly because they owned stock. He needed to show them that he could create a team that could work together for the betterment of the business and that those on the team would be valued for their efforts.
“If you respect and believe that the person on your management team is qualified and good and is someone you want to retain, you have to support them and challenge them and work with them,” Steinback says. “Give them responsibility. We engage them in what we want to do and we make sure they do it.”
You have a leadership team for a reason, to help you run the business. And while you may position yourself as the leader, you still need to use your team to help you guide your business.
“Involve the entire leadership team in all the operational and strategic meetings that the company has,” Steinback says. “When we talk about planning, monthly planning, semiannual planning, long-range planning, they are part of that. When it’s new product development or new plans or new marketing approaches, they are part of it. You have to have buy-in and everybody has to understand it.”
So how do you avoid the problems that Steinback had previously, where there was bickering about the direction of the company?
“The difference was none of my employees are equal partners or equal stockholders,” Steinback says. “They don’t have a say.”
While they don’t have a say in ultimately making decisions, they do, and should, have the ability to contribute their thoughts to how those decisions should be made.
“Keep on challenging these people and keep giving them responsibility,” Steinback says. “You just have to do it. You have to give up a little bit of that day-to-day responsibility of your own and just have a little more oversight on them.”
If you operate with authority that isn’t cloaked in secrecy, you’ll stand a better chance of gaining support.
“We have them buy in to everything and have them understand what the hell is going on,” Steinback says. “That’s what it’s all about. There’s
a lot of employees that don’t disclose anything to their employees and half the employees don’t know what the hell to do. We don’t do it that way.”
Leave some room
Steinback is happy to attend a ballgame or some other leisurely activity with any one of his employees. He says there’s no problem with doing this, as long as you maintain a certain level of distance in your relationship.
“If you’re the guy signing this guy’s paycheck, you have to be careful,” Steinback says. “You have to separate most of your personal life from your business life.”
That doesn’t mean you should be afraid to talk with other employees when you’re away from the office. Just don’t get into the hot-button issues of politics and religion.
“If you’re a Republican and I’m a Democrat or vice versa and you start the conversation by saying, ‘What do you think of the health care plan?’ before you know it, you can be at odds over what we each think,’” Steinback says. “We don’t talk about that. We leave that out of the business, which eliminates a lot of the issues. I don’t tell you how to believe. You can believe whatever you want. Everybody is entitled to their own thoughts.”
What you’re trying to do as the leader is to leave yourself an opening to provide criticism of an employee, if it is ever needed. If you become too close personally, that becomes more difficult.
“I’m out on a sales call with one of our salesmen that’s worked for me for 25 years,” Steinback says. “I know his wife. I’ve been on incentive trips. I know them very well. … I went on a sales call, and I didn’t like what I heard. Either he didn’t handle the call well or he said some things I didn’t like or I thought he had a bad attitude. I always position myself so that I can sit there and say, ‘You know what Mr. Salesman, I didn’t like this, and here’s what I didn’t like.’ It’s constructive criticism. I’m not screaming at him. I’m upset because he might have misrepresented me.”
It’s just a matter of making sure you keep the roles of boss and friend separate.
“I always leave myself enough room so that I can talk to those people and tell them what I think,” Steinback says. “If they don’t like it, that’s the aspect of my job.”
And Steinback believes it’s his ability to relate both personally and professionally that has enabled CSI to succeed.
“We respect each other’s turf and what everybody is responsible for,” Steinback says. “We give everybody the opportunity to interact and be social. … I don’t think people would stay around and be as participatory as they have been for 20-plus years if they weren’t happy campers. It’s their whole life.”
Steinback says he has changed as a leader since those early days when he had problems with his partners.
“I’m probably much more tolerant today,” Steinback says. “Probably in the early years, I was much more of a micromanager than I am today. There’s a time and a place for both of those. I’m not suggesting those are bad. But when I was more aggressive in terms of my management style, I could be very irritating and intimidating to people and I don’t think that gets you as much as behaving courteously and letting people know where they stand.”
How to reach: CSI Leasing Inc., (800) 955-0960 or www.csileasing.com