New direction Featured

7:00pm EDT December 26, 2008

Brenda Newberry was so serious about planning for future growth at The Newberry Group Inc. that she created an employee stock ownership program and implemented it until the IT consulting company was 100 percent employee-owned.

“An owner has to ensure they have a solid succession plan,” she says. “Some people start companies just so they can sell it to some buyer, make mega-bucks for themselves and leave. Our goal was to ensure we created something that had a legacy beyond us.”

Newberry is founder, chairman and CEO of the company, which posted 2007 revenue of $19 million.

Smart Business spoke with Newberry about why it’s important to start planning early for your departure and the keys to effective leadership.

Q. What are the keys to effective leadership?

Read, feed, lead and proceed. You have to read, and you have to be learning constantly — leadership books, the Harvard Review, books on technology in our case and periodicals.

Then feeding, which is trying to make sure you give your team as much information as you can, from a coaching standpoint as well as handing them copies or sending them e-mails of the articles that you read.

Then, leading by example. Make sure you have strong character, that you are willing to make difficult decisions. We actually have walked away from contracts because they were not being executed in an ethical fashion. In one case, it was a five year contract, for $5 million per year. Walking away for the ethical reasons spoke volumes to the team. Leading means you take a look at what is going on — you try to coach, you show by example to the greatest extent possible. And you don’t violate basic values and character.

Then proceed — that is basically expecting execution. Executing those things you are responsible to execute and assisting your team in moving forward to executing on their own.

Q. What pitfalls can stop leaders from being effective?

One is thinking that it is all about them. Some executives view their team as subjects instead of educated, capable adults that have insight if you use it.

If you allow people to use their brains, they would probably prefer to do so.

You can avoid that pitfall by remaining humble and remembering where you came from. You have to understand that you are human. It’s just like when I was talking about ESOP — denying that I was going to one day get old and sick was not a way to ensure the company was in a solid position and had a great foundation for the future. When you first do something like an ESOP, you’re going to have some challenges. It would have been ridiculous for me to wait five years to do this and then say, ‘OK, see ya. Bye!’ without helping them through that transition.

When you are a leader, it is critical to take your team through the transition.

Q. How do you build a strong foundation?

Solid infrastructure is one thing. We’re a technology company, and we have the advantage of being so. What that means is our infrastructure from a technology standpoint is extremely strong.

Try your best to hire the best people you can at the time. You walk into some firms, and people aren’t taking care of the environment. Part of the foundation is making sure you have a good environment with your team and a good environment when your customers come through the door.

It doesn’t have to be looking like the Oval Office. But it should be clean and well kept. It should have a peace about it — the infrastructure, resources, organization and tools.

Also, we have goals — and not just corporate goals but all the way down to every employee. And, every quarter, there is a presentation by each person of how they stand with regard to their goals.

Of course we start with corporate goals, business unit goals, internal service unit goals, and then each individual within each of those areas has their own goals. All of those lead up to supporting the corporate goals.

Q. How do you measure progress toward those goals?

The goals must be smart — we call them S.M.A.R.T. They have to be specific, measurable, attainable, realistic and timely.

Basically, you might have a corporate goal of meeting a certain revenue. That’s fine, but how does marketing contribute to that? One of the metrics they use is the number of earned media placements. That certainly doesn’t have a direct correlation, but if you had no visibility in the marketplace, you would probably get no business. Our recruiters, they have to make a certain number of phone calls and/or a certain number of interviews. Business developers are going to have financial goals of their own, but then they bring that down to tasks, like they are going to make X number of visits or trips, etc.

Each of those goals feed into the total, but it is directly related to what that person’s job might be.

HOW TO REACH: The Newberry Group Inc., (636) 928-9944 or www.thenewberrygroup.com