One day, Derek Glanvill was part of a construction industry that was achieving record growth. Seemingly the next day, the sector was caught in a downward spiral that appeared to have no bottom.
“Our industry doesn’t have 9 percent unemployment,” says Glanvill, president and COO at McCarthy Building Cos. Inc. “It has 20 to 23 percent unemployment in the construction trade. From 2006 to 2007, the construction economy was at its highest that it had been in any of our lifetimes. The fact that we’re now in a very different economy, it’s the contrast of that high to this low that is so stark and amazing.”
The recession was quite the game-changer in the real estate market as the country went from a building boom where new homes and businesses were being built on every street to an environment where every neighborhood was being overwhelmed with property foreclosures.
It left many business leaders trying to plot just when this economic plunge would reach its bottom. Glanvill wasn’t interested in being a prognosticator.
“You don’t predict it,” Glanvill says. “You do everything you can to right-size your company. You look at your cost structure. You make sure you get rid of any excess costs. You stop doing things that don’t add value. You take a strong look at your company and you prepare to operate it for as long as it takes in that environment.”
Glanvill preaches strategic thinking at every level of the 1,500-employee company. He wants his employees thinking every day about how they can do their jobs more effectively. By doing so, he’s confident that McCarthy will always be in a strong position, whether the economy is heading up or going down.
His approach has helped McCarthy weather the storm pretty effectively. The employee-owned company had more $2 billion in revenue before the recession hit and it still does, with $2.5 billion recorded for 2010.
Here’s how Glanvill makes strategic thinking a priority and keeps McCarthy poised for whatever the future might bring.
Make it routine
Glanvill didn’t want his employees to feel any differently as they strategized during the recession compared to when they met during the boom times. Strategic thinking should not be a big event at your company. If it is, Glanvill says you’re not doing it enough.
“You can’t just show up one day and say, ‘Let’s be strategic today,’ and have it be the first time you ever thought about it,” Glanvill says. “How do you get them to show up on a Friday afternoon and put their creativity hat on? Now all of a sudden, they are being forced to think completely differently than what they’ve been trained to do and wired to do. That’s a challenge for any organization to suddenly expect people to switch from one mindset to another.
“The answer is creating that expectation that even though I’m doing my day-to-day job and I’m working my way through it, I’m doing so in a way that constantly requires me to be planning.”
If you make strategy and planning a part of everyone’s job responsibility from day one, it’s not viewed as a burden. It’s just part of what they do. It’s a little different at McCarthy because it’s an employee-owned company. But Glanvill says the principles work just as well in any type of business.
“The key to doing it is to get people talking about it and empower them to come up with ideas and then be ready to implement them,” Glanvill says. “One thing that will infuriate your employees is if you ask them their opinion and then you don’t do anything about it. You need to report back on results.”
The accountability must work both ways. As important as it is for you to respond to ideas, you need to impress upon your people the importance of bringing ideas to you for consideration.
“Every employee is expected to come with a way of strategic thinking, not only when we put the plan together, but all the way through it,” Glanvill says. “We’re always in the middle of executing an existing plan or inventing a new plan. It’s cultural. You build that expectation into peoples’ minds. It’s not a static approach where you just ask for ideas.
“Planning underscores everything. We plan for safety, quality, profit, client relationships, everything we do around here. It’s that idea that every project we do has a margin plan, a site-specific quality plan and a site-specific safety plan. The idea of planning is a core part of what we do. It becomes not automatic, but it becomes something they are used to doing.”
Create an environment where everyone is thinking, ‘What could I be doing to help the company improve?’ and you’ll get ideas like the solar project McCarthy has launched in the southwestern United States.
“It came from an indepth study on renewable energy that two of our operating groups got together and did,” Glanvill says. “They said, ‘Let’s go ahead and take a look at that.’ Nobody asked them to do that. They did that on their own. Their leaders of their divisions did it because in their businesses and because of the tough geographical markets they are in, they could use it as a way to change their business.”
It will take some time to implement strategic thinking in a company that hasn’t really focused on it, but Glanvill says that’s OK.
“I still keep asking myself, ‘Does this add value or not? Does this have a good outcome? If I do these things, what’s going to happen?’” Glanvill says. “If I have a good plan, I can assess the risks and opportunities within that plan. Even though it appears to be a day-to-day grind, it sets the mindset of everybody incrementally improving.
“Take 1,500 people and incrementally improve them while they are doing their day job, it makes a strategic leap. It makes the creative planning meeting they have to go to a whole lot easier. Create some strategic examples of how things could be done differently. Oftentimes, if you give people a couple ideas and start them in the direction and you challenge them with some key questions, they tend to want to roll up their sleeves and solve it.”
Set high expectations
It’s not too tough to sit in a room and throw a bunch of ideas up on the board of what you could do. But if those ideas don’t ever go anywhere, what was the point? Glanvill wants employees to know that they need to do their homework when they’re thinking about ways to help the company.
“You have to have somewhat of a formal approach where there are certain areas of questioning and answers that need to be provided with each idea,” Glanvill says. “It’s by making people go through the legwork of a formal process of filling out a couple pages of written information that forces them to really flesh out the idea. You’re not making it too bureaucratic where they feel like it’s burdensome. But you have to force people to think. Great ideas are wonderful. But if you can’t articulate how they are going to apply to the business or you can’t measure the value, they aren’t great ideas. They might sound good, but you have to have a real formal way of accepting and vetting.”
When someone on your team has clearly put in the effort, recognize him or her for it, even if it’s not something you can act on at that moment.
“I had a young gentleman present a white paper on why we weren’t doing more business in India,” Glanvill says. “I commend him a lot for coming forward and having a lot of great ideas and doing the research. The right approach is to sit down and listen to him, even if you know it’s an idea that’s not going to fly. Sit down and listen to him and make sure he feels like he’s been heard.”
If you show through your actions that you’re holding people accountable to come up with solutions and not just ideas, the quality of those ideas will improve.
“When the idea is vetted and is brought forward and challenged, the employee knows they need to bring not just the idea, but a certain level of solution. By allowing them to be part of it, it’s absolutely key to setting the stage where people believe if they do come up with an idea, someone is going to act on it.
“It’s a great idea to go to India, but we don’t have the people that want to go there. It’s a great idea, but we don’t have the resources. If anybody steps up and says, ‘I’ll do it,’ you have to be prepared to clear the path for them and allow them to do it.”
The vetting process is obviously key to sorting through ideas and moving the ones that can work on down the line. Glanvill relies on a panel of 10 leaders that he keeps in touch with on a regular basis. He wants to make sure they are doing their job fielding and discussing ways to improve the business.
“You have to spend a lot of time with your key leaders to know who is good at it and who is not,” Glanvill says. “The process you need to put in place is have a report-out process fairly often. If you’re going to lead a strategic initiative, you have to be accountable for it. It means you have to present the ideas that you’ve collected, present status and progress reports.”
If the people coordinating ideas aren’t meeting expectations, make changes.
“Sometimes we have changed the leaders because we’ve had those complaints,” Glanvill says. “You’re not engaged enough or you’re not listening enough. It’s being able to recognize those folks who are good at it and those who are not good at it.”
Glanvill preaches strategic thinking whether McCarthy is operating in a good economy or a bad one. But he does recognize that his people have other day-to-day responsibilities.
“You don’t want to be doing strategic planning 40 hours a week,” Glanvill says. “You don’t want your employees sitting there thinking that you’re asking them to be creative every minute of the day and you’re losing their core work. It always gets back to that planning culture and people knowing that when they do have a great idea, it will be heard and they will be able to participate in the right way.”
Glanvill keeps his eyes open so that when people are ready to take on more responsibility and fill the leadership roles needed to make things happen, it’s a fairly seamless process. He wants people to always be thinking about where they might in to the company’s future and then feel they have a path to get there.
“Strategic planning and leadership development go hand in hand because you need to have a talent management process that identifies who the top talent is,” Glanvill says. “They become the leading advocates for your strategic planning process. You get the right people identified, you get them on the right path, you empower them to become strategic, you empower the whole organization to become better at planning and with a little bit of formal process overlay, but not too much bureaucracy, you clear the way for people to do the things they are good at doing.”
You need to create a culture where people are always thinking about what the company might need in the future.
“We have a strong culture of everybody needing to name two people who could take their job,” Glanvill says. “So everybody in the organization is constantly trying to identify talent.”
When business units at McCarthy meet, they must bring in their organizational charts.
“It’s color coded in terms of people who are doing well and people who are emerging leaders and people who are ready for advancement,” Glanvill says. “We not only force them to do it on what today’s environment looks like, but we get them to show a future org chart three years from now and what it’s going to look like. Who are the potential candidates to fill those roles?”
Glanvill wants employees to be thinking strategically about both the business and about the personnel who will conduct that business and plot the direction of the company.
“You have a process that migrates talent in the organization and it creates opportunity,” Glanvill says. “Identification of the high-potential people that are in the funnel, you have it on a spreadsheet and you talk about it often. One of the columns that needs to be filled is, what is their next development step? Where are they going next?”
How to reach: McCarthy Building Companies Inc., (314) 968-3300 or www.mccarthy.com
The Glanvill File
Born: Johannesburg, South Africa
Education: Bachelor of science and master’s degree, civil and structural engineering, University of Natal (University of KwaZulu Natal), Durban, South Africa
What is the best advice you ever received?
Treat others the way you would like to be treated. Work very hard by setting the example. You set the tone; you set the work ethic. And then with a few other leadership qualities like listening and being able to make decisions, trust your partners to make good decisions.
Glanvill on leadership: The key to being a strong leader is to be able to articulate a good set of behavioral values and you have to be able to put them into action. There are certainly those who are born with natural leadership skills. But leadership can be taught and it can be learned. There are many people who have learned it who are not necessarily as effective as those who have natural skills. But I don’t think that all great leaders have natural skills.
Glanvill on the benefits of employee ownership: People are a whole lot more interested when it’s their company. I look at our ownership structure and I look at our culture, and you’ve got 1,500 people all incrementally trying to be 10, 15 or 20 percent better and owning their own development. You create that expectation in them. You can take another 1,500-man team that is publically traded, family owned, management owned, and we’d beat the socks off of them. Just by definition, we’ve empowered so many people to the outcome. The reward is personal because of accountability.