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How Robert A. Reynolds Jr. cultivated a strategy at Graybar by engaging his team in the process Featured

8:00pm EDT September 25, 2010

Robert A. Reynolds Jr. faced a number of challenges in the wake of the Sept. 11 terrorist attacks. He had been president and CEO at Graybar Electric Co. Inc. for just more than a year and would soon add the title of chairman to his responsibilities.

Graybar certainly wasn’t the only business to be affected by Sept. 11 as the entire economy plummeted in its wake. But Reynolds had a number of other issues that were threatening the 6,900-employee company’s continued success.

“We spent a lot of money implementing a strategy that was not executed well,” Reynolds says. “We had systems that needed to be replaced. We had a souring economy made even worse by 9/11. The other thing we needed to look at as we went forward in the company was having the talent available, trained and ready to step in when needed.”

The most pressing concerns in the eyes of Reynolds were the large amount of debt Graybar had taken on and the aging systems that needed to be replaced.

“We needed to make a decision,” Reynolds says. “Do we go forward and put in a new system that we think would help us work on the balance sheet but, at the same time, would have an impact on the balance sheet because it was expensive?”

Reynolds wanted to work with his team to find a solution to the dilemma that was facing the electrical and communication products distributor. He wanted to develop a strategy that would upgrade the company’s operating systems without leaving the company in financial ruin.

“It was a little riskier,” Reynolds says. “But it was one we had to move forward on. We really didn’t have a choice.”

Get others involved

It’s up to you to put a strategy in motion and explain to your board how it will solve your company’s problems. But that doesn’t mean you can’t seek out help in putting the plan together.

As Reynolds began looking at how to solve Graybar’s problems, he quickly got his management team involved in the process.

“I can’t lock myself in my office and work real effectively,” Reynolds says. “I need to be out listening to people and talking to people and finding out what’s going on in the world. What’s going on in our industry? What’s going on with our competition? You try to pull all that together and figure out where the company needs to go to be better than what the others are doing.”

One of the first steps to any good strategy is research. A lot of research.

“You have to get other people involved in leading the effort,” Reynolds says, before thinking back to the first time he led the development of a business strategy.

“Everybody looked to me and said, ‘You’re the leader. You need to put this strategy together,’” Reynolds says. “You put the strategy together and then you’re all done and things start getting better and people say, ‘Well, we don’t have a strategy.’ I sat there and I said, ‘What do you mean we don’t have a strategy?’ Then you have to go back and rework it and say, ‘OK, what did I miss here?’

“What I learned is that for that strategy to be effective, it can’t be your strategy; it has to be everybody’s strategy. It has to be management’s strategy. Then it can’t be you taking that strategy out alone. It has to be management taking the strategy out with you. Everybody needs to have ownership of it. Everybody needs to buy in to it. Everybody has to communicate it as a team strategy, not as a Bob Reynolds’ strategy.”

Reynolds says he doesn’t follow a step-by-step process in developing a strategy. It’s simply a product of conversations he has with his management team.

“You’re waiting for that moment when it clicks and you say, ‘Aha, I got it. Let’s put it down. Let’s see if this rolls,’” Reynolds says. “You can’t sit there and try to force it.”

Talk to your people as you’re building the strategy. Don’t sit in your office and draw it up and then bring them the finished product.

“You’re getting buy-in as you go along,” Reynolds says. “You’re building it not just with your ideas. You’re building it with the ideas of others.”

One of the key conflicts at Graybar was figuring out how to improve the company’s operating systems without overwhelming a balance sheet that was already in bad shape.

“How are we going to improve the company while we’re growing the company?” Reynolds says. “How are we going to keep the balance sheet in good shape as we continue to do that?”

Reynolds led the meetings that were held to discuss these important issues. But he was never the first one to offer his opinion.

“When you contribute early, it shuts down everybody else,” Reynolds says. “As the leader, you want to be the last one to contribute. You want to be more a listener than a speaker. You can lead the meeting, but let everybody else provide their opinion. Once you provide your opinion, it shuts everything else down. They feel your mind is made up and you’re going forward. In essence, that’s not what you’re saying. You’re just trying to contribute like everybody else.”

Test the strategy

As the strategy begins to come together into a tangible form, you need your people even more. Reynolds prefers to take his management team and meet for a couple days to, as he says, take the strategy and “tear it apart.”

“Once you determine what that strategy is, you need to go out and test it,” Reynolds says. “I don’t like to say you sell it through because you don’t want to force it through. It has to be right. People have to believe in it or else it’s going to be very difficult for people to buy in. If they don’t buy in, it’s going to be very difficult to implement and execute.”

Be blunt and ask people if they think the strategy you are looking at makes sense.

“Can we make this work?” Reynolds says. “Will it work within our industry? Do we have the tools to make it happen? Do we have the people to make it happen? Do we have the finances to go forward doing it? You have to test every department. You have to take the strategy and see how every department fits into the strategy and then make sure it’s going to take the company in the right direction.”

By asking these questions and initiating these conversations, you’re demonstrating trust to your people that you believe their feedback is valuable to the process.

“We challenged each other regularly on this program,” Reynolds says. “You have to allow people to challenge you. You’re one individual, and one individual doesn’t have all the answers. You have to trust the people you have.”

If you’ve worked with your team from the beginning, you shouldn’t have a lot of divisiveness in the process. But it still occurs from time to time, and you need to hear it out.

“But if they’re not strong enough opinions or they’re not fact-based opinions where they can sway the group, I would expect them to get on board and not block the process,” Reynolds says. “Sometimes they do sway the group and we make changes.”

Reynolds recalled a situation with the logistics strategy that wasn’t working like it was expected to after it was implemented.

“If you’re not getting the results, you have to dig in and say, ‘Why aren’t we getting the results?’” Reynolds says. “Where is the flaw here? What isn’t happening? Why isn’t this going the right way? You need to be honest with yourself and ask questions and get input and see what their feelings are.”

If you don’t promote an air of openness, then concerns, such as those that arose with Graybar’s logistics strategy, will never come to light.

You can’t be afraid of confrontation and conflict in helping you get to a strategy that works for everybody.

“We always have challenges in there,” Reynolds says. “Some will feel that makes sense. Others won’t. So you sit there and you kind of battle through it until you come to a decision. Then you start implementing based on the decisions you made.”

There is another scenario that can occur with objections. While they may never be heard, the objections may instead fester with people who hold a grudge that they never had a chance to express how they felt.

“You need to communicate not only to those who are in charge of implementing the strategy, but to those who it’s going to impact,” Reynolds says. “They can fight it and never allow it to happen if they’re not included or at least have an understanding of where the company is going. You have to explain what you’re doing, why you’re doing it and here’s why it makes sense. Once they buy in and understand it, then they move forward with it.”

Be flexible

Even when he began releasing the strategy to the rest of Graybar’s employees, Reynolds says it wasn’t written in stone.

“We drew it up after we got all the details and presented it to everybody,” Reynolds says. “I took it out via field visits and teleconferences to the entire organization. We had posters made up. It takes a long time for people to realize you have a strategy and what a strategy is.”

You need to realize that while you’ve been spending long days and nights working on the strategy, it’s still new to many in your company.

“You think you have it, you go out and talk about it and people say, ‘I don’t know our strategy,’” Reynolds says. “You just have to keep reinforcing it. Listen to what people are saying and watch for verbal clues of whether they are buying in or not. Let them challenge you on what you say and why you’re saying it and what you do and why you’re doing it. Make it clear to them the role they play. The most important thing with a strategy is to let people speak.”

One of the challenges to getting feedback from regular employees is often a reluctance to speak up, something Reynolds readily acknowledges.

“If I walk into a meeting and say, ‘Does anybody have any questions?’ we’re going to have 15 minutes of mandatory silence before anybody starts opening up,” Reynolds says. “I don’t think it’s because I’m intimidating. It’s because the position is intimidating.”

Reynolds attempts to conquer that problem by giving employees cards on which they can write their questions anonymously.

“[On] those cards, it says, ‘This is your ticket to the meeting and everybody has to come with at least one question,’” Reynolds says. “That really opens up the communication because they don’t need to sign the card. They don’t even have to hand me the card. Nobody is put on the spot. It’s the group that has come together and the group that I’m speaking to, not individuals.”

Reynolds feels like his approach at fostering inclusion and collaboration has resulted in a more defined strategy for Graybar. In addition to being more definitive, the strategy developed after Sept. 11 was also kind to the company’s budget.

While some tough decisions had to be made in the way of employment and other costs, the $4.4 billion company was ultimately able to weather the storm.

“We’re in a much better financial position than we’ve been in for years,” Reynolds says. “We also have better systems in place, which have helped us.”

But even the most well-conceived strategy requires a little tweaking from time to time.

“It’s the same thing as any strategy you put in,” Reynolds says. “You need to go back and keep revisiting. You can’t put it in the drawer and pull it out at the end of the year and say, ‘Did we hit it?’ It’s not the plan and it’s not the results. It’s the execution.”

How to reach: Graybar Electric Co. Inc., (800) 472-9227 or www.graybar.com