Bob Ketterer didn’t expect to get a lot of support from his board at HDA Inc. for his decision to give employees a pay raise in 2010. Board members were still a bit skittish about the slow pace of recovery from the global recession.
“I didn’t even want to bring up this 3 percent increase I gave across the board,” says Ketterer, president and CEO at the 1,695-employee book and magazine distributor. “I just did it because I didn’t have to get their approval. I didn’t give myself a raise because that is a board resolution. You say, ‘Well, why would you do that when you lost money last year?’ I’m anticipating that this will be a better year for us and I’ll make up for it.”
Optimism definitely has its place in Ketterer’s leadership arsenal, even if it has to be a little more cautious.
“Business is about risk,” Ketterer says. “A lot of people will say, ‘OK, it’s a tough time. I’m not going to risk anymore.’ That’s a mistake. I think maybe you have to pull in your horns a little bit, but you still better be prepared to gamble a little bit because you’ll be stymied and run over by your competitors if you don’t.
“My board of directors, they said, ‘We shouldn’t do this, and we shouldn’t do that.’ I said, ‘Wait a minute. We’re still in the business of managing risk.’ Every CEO has to do that. I’m not going to shut down operations and sit back as long as there is something I can do.”
Ketterer has led his company from $11 million in 2000 revenue to $257 million in 2009 by learning to bob, weave and adapt to the market. The business began by selling residential blueprints through magazines and catalogs and grew to become a seller of custom-made books in the home improvement sector.
Just as the market continues to evolve, Ketterer says so will his leadership style. What won’t change is his desire to turn problems and challenges into opportunities.
“It’s a mental attitude that has to be constantly reinforced that things will get better,” Ketterer says. “If you handle the business to a point where you can survive, and unfortunately, some guys aren’t going to make it, but if you structure it so that you can get through these tough times, the times will be better.”
Here are some of the key principles Ketterer follows in leading HDA that keep the company driving forward as a competitive force in its sector.
You may be tempted to hole up in your office when the times turn tough so you don’t have to face your employees and reveal your frustration about the latest batch of bad news.
That’s a big mistake.
“You don’t want to be paralyzed,” Ketterer says. “You want to be honest with your folks. That’s not to say you have to tell them everything that’s pending because half the things I find that I worry about, it’s gone tomorrow. I’ll worry about something else tomorrow. But you do have to give a sense to your people of what is happening in the business.”
You also have to give them a reason to believe that there is something out there worth fighting for and worth exerting their energy for.
“You don’t want to kid them,” Ketterer says. “Any sunshine that you have out there that you can substantiate, make sure they understand that. We might see this information and we’re not sharing it with our people. There’s always sunshine someplace. Even if you don’t have anything other than what you hear on the nightly news about oil prices coming down, you have to continue to communicate. If you don’t say anything to your people, that’s a scary thing.”
It doesn’t have to be news that you’re sharing. You can also try empathy.
“We looked at special situations like where a person is driving so much,” Ketterer says. “They had been with us for a number of years and had proven themselves, so we allowed them to work at home more than we did in the past. Some of the lower-level hourly folks, we looked at gas cards.”
In addition to delivering a positive message and showing empathy, you also may need to step up and combat negativity that may be festering with your employees.
“I had someone tell me the other day that housing starts, because this was a good and very profitable part of our business selling house plans, he said, ‘We’ll never see that again,’” Ketterer says. ‘He’s a senior guy in the organization and a smart guy. I said, ‘No, let’s look at the past 50 years of housing starts.’ What you find is that there were housing starts a lot higher than we had back in 2007 when the bubble burst.”
Ketterer’s point was that doomsday scenarios don’t help anyone and are often not completely true. You need to continue to be the voice of hope for your people.
“Certain things will change,” Ketterer says. “How many people are going to use e-readers? Does that mean books are going to go away? No. I know books aren’t going to go away.”
Fear can be a contagious and corrosive thing in your business. It’s up to you to dig deep and find real and substantial reasons why it’s worth continuing to push forward and then share those reasons with your people.
“I tell them, ‘We lost the Michaels account, but at the same time, we’re gaining this here and we’re seeing a positive coming up at Lowes with the how-to books,” Ketterer says. “Even Warren Buffett told his NetJet folks, ‘Guys, you better hunker down and wait this one through, because there’s not going to be a lot of guys wanting to fly private jets in the next couple years.’ There’s probably not a lot they could do, but I’ve seen that they have come up with other programs that are attractive to some people. You just have to keep looking for anything and everything you can do to improve your situation. It’s easier said than done, but you have to.”
Do you ever feel like you’re a teacher checking up on who did their homework when you step into the conference room? It can be a necessary step to ensure that your leadership team is doing what needs to be done to keep your business going.
“As you go around and you’re meeting with your people, are they prepared?” Ketterer says. “Have they taken the time to be prepared for this meeting? If you have metrics in place, look at those metrics. If you don’t have the metrics, at least have them report on their successes. If they can’t report on any successes, you know you have a problem there.”
Maybe you have a team of people who are self-starters and require no pushing to get things done. Maybe your leaders are procrastinators who constantly need a kick in the butt. The point is, you need to have a sense for what they are working on and what they are getting accomplished.
“If they are constantly giving you excuses why this isn’t getting done or that isn’t getting done, you almost sense it because their peers will give you a look like, ‘Oh, Joe didn’t get it done again this month,’” Ketterer says.
Take the time to get out and see what your people are working on.
“Walking the office is so important,” Ketterer says. “Just stopping and asking, ‘What’s going on? Give me a rundown.’ Where you can, be more fluid and check it out and see what’s happening. Just walking around and talking to your folks without a prepared agenda, you’ll find out all kinds of things.”
There is a danger, of course, in just relying on your observations and questions to get a read on your business. Your best course is to combine those observations with some type of measuring tool, whatever that may be.
“When you don’t have all the metrics in place, it’s difficult,” Ketterer says. “We have a lot of district managers with our field force. We have something like 28. There were a number of ones who we thought were rising stars.”
It turned out they were a lot better at talking about getting work done rather than actually getting that work done.
“You want to have good measuring tools so you’re not just rewarding the guys who talk a good story,” Ketterer says. “You can’t be buffaloed. I had a guy before who I thought was doing a great job and I found out he was stealing from me. He was selling product on the side. All I can say is, if you don’t have metrics, it’s a tougher thing. So get the metrics. Get something you can use.”
Share the burden
When Ketterer meets with his leadership team, he does not demand a seat at the head of the table. Maybe it’s a small gesture, but it helps reinforce the idea that he’s not the only one who makes HDA go.
“Even though I’m the president and CEO, I can sit at the table and let other people run the meetings,” Ketterer says. “It’s important they be given an opportunity to shine and show other folks what they can do. I do reserve the right to make the final decision, but I only exercise that right if I have some burning desire to exercise it. I just don’t think it’s that often that I feel I have to.”
Ketterer recalls a situation a few months back when the company was looking to hire a high-level position.
“We were down to two candidates,” Ketterer says. “It was my vice presidents and I that were making the decision. So it was five of us and the HR director. Five voted one way, I voted the other way. I went with their suggestion. It was after I agreed and thought about that evening that I said, ‘Now I guess you’ve got the right people. You trust them enough to go against your gut feeling.’”
The sharing of the leadership burden with others becomes even more critical when you’re going through a tough time. If you run yourself into the ground trying to do it all without anyone else’s help, or by trying to impose your will in every direction, you’re not going to be any good to anyone.
You need to keep your people engaged in the fight so that they feel part of it all and know that they play a key role in helping your business succeed.
“All of us, we can’t take this pressure day in and day out,” Ketterer says. “Take care of yourself. If you love to run, run. Don’t give it up because you feel you have to work 80 hours a week. Take the time off, a couple days, to relax. If you don’t, it’s just like when they say on the airplane when you’re sitting next to a child to put the oxygen mask on your face first and then put it on your child. Otherwise, you’re no good to anybody. That’s the same thing. All those things that can help your mental attitude are critical.”
How to reach: HDA Inc., (314) 770-2222 or www.hdainc.com
The Ketterer File
Born: Breese, Ill.
Education: Bachelor of arts in chemistry, Saint Louis University; bachelor’s degrees in biology and architectural engineering, University of Illinois
How did you find your career path?
My father was a surgeon and he wanted me to follow in his footsteps, so that’s why I went down the chemistry route, but I hated it. I finally told him I wanted to go into architecture. I built things as a kid and that’s how I got in the home plans business. [For example,] I took a glove box in my old car and I converted it into a refrigerator. I got eight cans of soda and put them in there and they would be so cold you could barely touch them. It wasn’t soda, of course. I was 18 years old. It was beer, and it made ice cubes, too.
Ketterer on his childhood: I was flying when I was 14. I got kicked out of school for three days because I was buzzing the high school when I was a sophomore. They saw the numbers on the plane and the FAA called up my Dad and said, ‘Dr. Ketterer, what are you doing buzzing the high school?’ He said, ‘I’m not, but I can tell you I know who did, and we’ll take care of it right away.’ Those are the kinds of things that are not uncommon for entrepreneurs, to be distracted about so many things and be inquisitive.
Who would you most like to meet?
President Obama. Every day I’m more impressed with that man. He has a lot to teach us. Coming up from essentially nothing to where he is to how he conducts himself. He’s a true gentleman. I’d just like to know how he was able to accomplish what he has with very little to begin with.