Niloufar Molavi is now facing a challenge that she hadn’t seen in her years with PricewaterhouseCoopers LLP — acquiring and retaining talent for the accounting firm in the light of fierce competition. The complicating factor is that thanks to a heavy presence of energy companies, young talent in the Houston area is in high demand and supplies are low.
Molavi, Houston market managing partner for PwC, is realizing that you have to pull out all the stops to have an edge over the competition.
It’s no secret that PricewaterhouseCoopers over the years has developed comprehensive internship and management development programs that attract desirable young talent. Molavi is betting on those programs to make a difference.
“The average age of our workforce is 27 — so that will give you a sense of how much we rely on and focus on young talent such as college interns,” Molavi says.
“The students like to have an experience while they are in college, and they really don’t know what to expect ultimately when they come out of school, so we just give them that glimpse,” she says.
But more importantly, the interns will get to know PwC, which hopefully will lead to their choice of PwC for employment.
“It has been a great tool for us to not only recruit but they will see what it is like before they have to make a decision that will have an impact on their long-term careers,” Molavi says.
Here is how Molavi uses internship and management programs at the Houston location of PricewaterhouseCoopers to help fill the 1,069 seats at the table and keep those seats occupied.
Look and listen
The practice of finding and hiring qualified job candidates has grown more sophisticated for most companies in recent years. Such was the case of PwC some years ago when it started its internship program, now a well-entrenched fixture.
With the competition to secure talented individuals, it is essential to look for the skills that clients are demanding.
“It’s important to sit back and make sure that you have identified not only the technical skills in people you hire but, more importantly, the soft skills or the intangible skills that you are looking for in people,” Molavi says. “Identify what those are, and recognize over time those change — just because we know today what we are looking for may change over time. We live in an ever-changing environment, and you need to revisit that as often as you can to ensure that those intangibles haven’t changed.”
Once you sound out your clients, you’ll have a better opportunity to know what will best match their needs.
“The most important thing is listening,” Molavi says. “Spend a lot of time with your clients to make sure that you are listening to their issues, issues that are important to them, issues that they are dealing with, challenges and opportunities that are at the forefront of their minds.”
There are several key qualities that should be “must haves” on the intangible resume of an internship seeker.
“Adaptability — someone who’s willing to come in and adapt to new opportunities and a new environment,” Molavi says. “It’s someone who comes with flexibility of different ways of doing things.”
Equally as important is the attitude that learning is a dynamic procedure that lasts an entire career.
“Another important element is the ability and the desire to continue to relearn; when you are in an environment that’s changing all the time, you need to be comfortable that you are always learning, and it doesn’t really matter what level in the organization you’re at,” Molavi says.
If the desire to learn is kept burning, it can help establish a long-term interest in a particular field. The possibilities of advancement are many.
“Even as a leader, you can continue to have opportunities to learn new things every day,” she says. “For me, that’s exciting. That’s really what’s kept me in the industry and at PwC.”
Find the right fit
It’s been said that in the military as well as other sectors, the age group of 18 to the mid-20s make the best soldiers or workers if properly trained. And those who are even more well-trained do even better.
While the business world can’t really compare its stresses to those of the military, the advantages of young recruits are unmistakable — and similar in both fields.
“Our clients are always interested in our talent because we bring in the young; we help develop them,” Molavi says. “Our talent gets to see a lot of different opportunities and things and they learn pretty quickly on the job because of the exposure they get to our clients. So they are in high demand in the market. And we know that; that has been something we’ve been dealing with for years.”
With a focus on young talent, new entry-level candidates coming right off the college campus, it’s critical to look at their abilities and what they’ve learned on campus and their technical skills.
“First of all, try to find the right fit for the organization,” Molavi says. “At that entry level, spend quite a bit of time not only in the interview process on campus but spend time with those individuals over a two- or three-week period to get to know them and build that relationship — and then offer the best ones an internship.”
A typical internship lasts 10 to 12 weeks. It’s an opportunity to get to know the interns and see how they can work in the environment — and is a great opportunity for them as well to see what opportunities they may have.
“Look at a lot of those intangible qualities in individuals,” Molavi says. “Teamwork is huge for us. We work in teams. We do not do anything alone. So watching the interns work in teams and how they perform is important. Relationships are very important, both within our organization as well as with our clients, and watching how they develop those relationships and their abilities to learn in that area is essential.”
An internship is also a type of probationary period. It’s time to spot any red flags.
“I have had at least one person who interned with us, and at the end of the internship, she and I sat down together — she realized that accounting wasn’t for her and had never really been her passion,” Molavi says. “She had made certain decisions to go into the accounting field, and although she did a great job, she decided that her passion was somewhere else.”
Remember that interns are still students. Most will still have another year of college to finish.
“Internships happen generally right after their junior year for most individuals, so we don’t expect them to come in and know everything,” Molavi says. “We are not testing them on the technical knowledge that they are bringing to the table on day one, but you want to really look for those qualities for a good fit. Then put them on jobs that you would as brand-new associates so they get to experience what it’s like when they join as a full-time hire.”
One of the more important steps any organization needs to consider when you bring in interns is if you will have the opportunities for them to learn and develop in that short period of time.
“If they come in and they are not getting those opportunities, then it is going to be difficult,” Molavi says. “I think any business needs to look at how it is structured and what opportunities it can offer to an intern.
“I know that many of my clients even use internships to give students a sneak peek of an industry by bringing them in over a summer period and rotating them through various parts of their organization.”
Focus on the basics
It’s a serious undertaking for an organization to operate an effective internship program. But it doesn’t have to be expensive. PricewaterhouseCoopers’ program, while a significant commitment for the company, looks at it more as on-the-job training.
“On-the-job learning and development is really important,” Molavi says. “We do that quite a bit, and it’s easy too. I mean it doesn’t cost you a lot of money; you’ve just got to make sure that you are paying attention to it.
“You take the opportunity as you would a project — you stop and make sure that your team understands what you’re doing, why you are doing it, why it is important to your client, what they are going to learn from it so that it doesn’t just become a task; rather, it becomes a learning opportunity.”
As you develop your training programs over the months and years, design as much on-the-job training into it as possible, and it will help pay dividends.
“When we look at our training programs, about 70 percent of it is actually on-the-job training — every day on projects, at clients, real-time feedback and learning,” Molavi says.
PwC’s program has evolved over time to its current configuration: Each intern is mentored by three colleagues.
“One, they will have a buddy,” Molavi says. “They will have an associate who is closer to age and in experience to them, someone they can go to from day one with any questions they may have. They could be administrative, technical or industry questions. The buddy is someone with whom they can engage on a day-to-day basis.”
In addition to a buddy, each intern has a mentor who is a manager/coach.
“The manager ensures that they are getting the experiences, the exposure, the developmental opportunities,” she says. “The managers are responsible for their assignments during that period and help the interns through that.”
The last is a mentor who will nurture what are often called soft skills.
“The interns also get a relationship partner so they will actually have a mentor who will be engaging with them and spending the time to talk about opportunities in the profession, and more importantly for our interns, the opportunities at PwC that they will have in the long term,” Molavi says.
“The program involves quite a bit of investment but again it has become a very important source for our full-time hiring, and we believe the investment ultimately pays off both for us and the recruits.”
Another aspect of an internship program is shadowing. Interns are given the opportunity to shadow a partner for one day to get a glimpse into a day of a partner’s life.
“Because they see us in bits and pieces, the interns probably don’t really realize everything in which a partner may be involved,” she says.
“One of my interns a couple of years ago had the opportunity to shadow me,” Molavi says. “She had a fantastic experience. It just happened to be one of those days where I was doing a lot of different things. We started off the day when I was actually in a coaching session with one of my ‘coachees,’ and moved on to an interview that I was doing that day with a publication. She got to sit in on that.
“We went to lunch with a client. We had a client meeting that she attended with me. Then we came back and dealt with some of my internal roles.
“She was just amazed at what I touch in one day and saw things that she would be very interested in down the road. So hopefully those kinds of looks give the interns a little bit more in terms of what a day could be as they go through a shadowing process.”
Develop new leaders
If your organization has made it a practice to have an internship program, it needs an employee advancement plan to get the most advantage of the intern program.
Tapping outside talent for management posts is not an easy process today, and it is beneficial to promote from within, not only to recognize that individual but to prepare in case a manager should leave. Talent that started as interns is an excellent source for management positions because of the familiarity with the company and work records that show advancement through the ranks.
For example, PwC uses a global leadership development program called Genesis Park for employees who are approaching some nine years of experience — a senior manager or director. This is a 10-week residential program for about 50 people, three times a year, which moves around the globe.
“You bring in individuals from around the world so every one of these 10-week residential programs is very global and very diverse,” Molavi says. “You are bringing people together who have never worked with each other — to work with each other.
“It takes individuals through what I call real-life experiences. This is not a situation where they’re going to role-play. It gives them the opportunities to work on real projects for either a particular territory, PwC territory or a global issue that our global leadership is dealing with.
“They’ll have the opportunity to work on that project and come back with solutions and thoughts. So they are really learning and having that experience of working with individuals they didn’t know before, bringing different talents together, putting their minds together and driving innovation to come up with solutions.”
Programs such as Genesis Park allow employees to not only continue to develop professionally but personally, as well, with leadership skills.
“My coachee who went through came back out in some ways a different person,” Molavi says. “The most important change that I noticed was the self-confidence that she gained from being part of that team and part of that opportunity, and knowing that, she exhibited an attitude, ‘Wow, I did this, and I was able to have a very different experience, and it felt good, and I learned a lot.’”
How to reach: PricewaterhouseCoopers, www.pwc.com or (713) 356-4000
The Molavi File
Houston market managing partner
Born: Tehran, Iran
Education: University of Texas at Austin, with both my bachelor’s in business administration and master’s in accounting
What was your first job?
My very first job that I got paid for was working during summer school at Houston Memorial High School, and I helped the staff in the office, running a lot of different errands.
What has been the best business advice you ever received?
To be willing to take risks. In terms of my career development, this has been the best advice that anyone could give me — the fact that someone took the time to sit me down and talk about the fact that unless you take risks, you’re not going to learn, you’re not going to develop, you’re not going to see new opportunities. You need to step out of your comfort zone and do it often.
When you become complacent and you’re getting comfortable with something, it’s time to do something different. So that is something that has certainly stuck with me. My sponsors early on pushed me and gave me those opportunities, opened those doors for me to step out of my comfort zone and do different things. It certainly has been very important to me, and I have seen it help me in my career and in the advice that I give others.
Who do you admire in the business world?
There are a lot of individuals who have accomplished great things, so maybe the way I would put it is not so much the individuals but those people who going back to what I was taught who had been authentic. They are not trying to be someone who they’re not. They are authentic leaders. They have at times put their necks out there and done something different that was not conventional, taking the risk, and then been successful at it.
Those are the people that I look to, those individuals who aren’t always going to be sitting at the top of organizations. They’re not necessarily going to be the CEOs but individuals who have had significant impact on success with an organization, for-profit or nonprofit as well.
What is your definition of business success?
For me, I think it is really simple: if you think about the success and the legacy that is behind, to be able to have clients who would say, ‘Well, she was our business partner and she was able to help us achieve our business goals.’ Being a tax practitioner, it is important to make sure that we are helping our clients achieve their goals. I think that would be to me a great legacy to leave behind if I could look back at the number of partners I have personally made so that they could be successful.
It was 2008, times were tough, and Ruscilli Construction Co. Inc. saw that many contractors were submitting rock-bottom bids just trying to keep their heads above water. While it may have been tempting to follow suit, the family-owned company refused to throw away what four generations had built into a total construction resource. It was a calculated risk.
“There was a lot less work out there to go after, and as a result, we witnessed a lot of our competitors change their approach to the business and their culture,” says Lou Ruscilli. “They were doing this in an attempt to survive.”
Before 2008, the business of Ruscilli Construction was hitting record highs as far as the volume and the number of projects. Then it appeared the plug had been pulled.
“In our industry, just like a lot of other industries then, we all took a lot of things for granted,” he says. “I hate to say that the phone would ring, and you would pick it up — don’t pass up the opportunity. We were always providing fantastic customer service. But how that was communicated down to the project level and how we evaluated our project teams, as it relates to how that experience was for the client, I don’t know if we were drilling down quite that far.”
The company, operated by Jack Ruscilli, chairman, his son Lou, CEO, and his nephew Tony, president, took a frank look at its culture, saw what needed to be done and is now actually back to pre-recession levels in terms of volume.
“We feel that our company is busier than the majority of our competitors,” Lou Ruscilli says. “The work that we have is good work and with very good clients. In 2012, we were in five states. In 2013, we will be in at least 10 states. Our increased workload has allowed us to attract very talented professionals from all over the nation.”
Here’s how drilling down farther brought substantial benefits for the 72-employee company, which tallied $100 million in revenue for 2012.
Find the right route
Once a recession hits and business drops off, a business has to act — and fast if it wants to cut its losses. But the knee-jerk reflex action may not be for everybody.
“Our competitors tried to keep the same number of people, the same number of volume and just go after just about everything,” says Tony Ruscilli. “It became more of a conflicting relationship than a team relationship. That wasn’t the approach we wanted to take.”
“We made a very conscious decision at that point not to change the way we did business but rather to find new ways to bring value to our clients,” Lou Ruscilli says.
If a company has been around for some time, looking at its history may give a clue about how the current problem could be handled. Take for example when Ruscilli Construction drew up its core values in response to some concerns during the 1980s when the company saw a big growth spurt.
“We probably had hired about 100 people,” Jack Ruscilli says. “I remember sitting at a table with the managers, a lot of people I didn’t personally hire. I saw a leaking culture, and I didn’t like it.”
This was an opportunity to lay down the company’s core values, what is called The Ruscilli Way. The values include safety, integrity and honesty, but more importantly, they are what the company stands for.
“We had some people who didn’t have the same values that we did,” says Jack Ruscilli. “They came from other companies, and we weren’t doing things in unison. But today, The Ruscilli Way is used when we are hiring someone. It is discussed with them to make sure we are up front, that they understand how we intend to do business.”
Customer satisfaction would be something that was openly discussed throughout the company and constantly reinforced.
“You have to go out and challenge your associates to enhance your clients’ experience, primarily through better communication and responsiveness,” Lou Ruscilli says.
To do that, one of the most effective methods is to create a sense of ownership.
“That meant our project managers, our project engineers, superintendents and field labor had to take ownership as if they were owners of the company and were responsible for how the clients would be treated,” Tony Ruscilli says. “Go the extra mile; do whatever it takes.”
Focus and communicate
Communication in any form motivates people. That’s an accepted observation inside and outside the business world. The key to using it effectively to achieve your goal is narrowing your focus to find the most effective forms of communication.
Once Ruscilli Construction realized its best route out of the recession was through a refocus on its core values, it was a simple but extensive task.
“It really started with communicating with our associates — sitting down with them, taking them to lunch and really making sure that they understand our definition of client satisfaction and that they understand our definition of responsiveness,” says Lou Ruscilli. “And the folks who didn’t understand it, well, they pretty much are gone.”
To achieve that understanding, a key point to make is that it is a win-win situation.
“It is much easier to manage and be a part of the team that is a team working together for the same goal,” Tony Ruscilli says. “We are all working toward the same end, and it is more of a team atmosphere than it is an adversarial relationship. So for them, it’s an easy buy-in, an easy way to say, ‘Hey, this is the way I always want to be a part of any project or any team.’”
There is one point to remember about customer satisfaction versus making money — profit isn’t everything.
“Stress to your associates so they all understand and appreciate that profit isn’t the No. 1 driver around,” Lou Ruscilli says. “It is customer satisfaction. It is relationships. You satisfy those two criteria, and at the end of the day, the profit will come — even more so, in the form of repeat clients.”Ruscilli Construction didn’t panic as the recession roared and now has pre-downturn volume levels to show for it
A new emphasis on core values, as it were, can repair broken links in the chain of success.
“As we started building the volume again, we just have had a wonderful selection of other new hires that have come to work for this company because of the fact that it’s really a revitalized company and it’s progressing and doing more and more business,” says Jack Ruscilli.
Happy customers mean more business. One of the best tools to determine customer satisfaction is a client survey. Ruscilli Construction makes note of accolades or beefs about its managers and associates with surveys throughout the entire project. If there is something that is a problem, it can be addressed at the time.
“All throughout the project we give them a chance to say, ‘Hey, I don’t like this, or should we consider this?’ says Jack Ruscilli. “The objective is that when we are done, we have a perfectly happy client. And if there is something that comes up wrong, it is addressed, and it is taken care of immediately so there is no excuse for us or the client not to have a great project.”
If your company is serious about improving its perception among clients, you should be able to accept criticism given in a survey or by other means.
“I can remember one engineer saying, ‘You mean you would actually put yourself up to that kind of scrutiny?’” Jack Ruscilli says. “And we said yes! You want that. You cannot improve if you don’t know what you are doing wrong. You want to nip problems in the bud, and that’s what we to do on the job site, every step of the process.”
The results of the refocus on Ruscilli core values have been beyond expectations.
“It has been amazing,” Jack Ruscilli says. “I have had some of our associates even say that it has affected them at home; they are taking a different look at how they are acting and how they are treating people.”
To carry that one step further, re-examine the prospective clients.
“Now we are looking for those same values in our clients,” Lou Ruscilli says. “We are more selective today than we probably have ever been with these types of projects that we pursue the clients who we want to.”
Keep in mind that relationships build over time, and can be lost in a second.
“With any organization, when you engage with your client, you are making at some level some sort of investment in that relationship,” Lou Ruscilli says. “What we have learned over the years is that the folks you have interacting with that client need to really understand what their expectations are and how they are going to be evaluated. You need to be caring for those same requirements, those same beliefs, to your clients or to the people you are working with. If they are not going to appreciate the investment you are making, it is probably not the right arrangement.” ?
How to reach: Ruscilli Construction, (614) 876-9484 or www.ruscilli.com
The Ruscilli File
Jack Ruscilli, chairman
Lou Ruscilli, CEO
Tony Ruscilli, president
Born: All are from Columbus.
Tony: I went to Michigan State University and received a degree in business.
Lou: I went to Clemson University and earned a degree in construction management.
Jack: I went to Findlay University and graduated with a degree in marketing.
First job: All worked for the company as teenagers. Jack started at 12, Lou at 14, and Tony at 15. Jack: We all had experience in the field. There probably wasn’t anything that I asked somebody to do that I probably hadn’t done myself.
What was the best business advice you received?
Jack: Mine is probably from my grandfather, Louis Ruscilli Sr. Years ago he would see me as a young man struggling with a big decision, and I can always remember him in his common way saying, ‘Hey, you do the best you can. You be honest. And don’t worry about it. Quit worrying about these things.’ In his way, he was saying do what you can do and back off. One of the things I remember my father always saying is, ‘Little profit is no loss.’ I remember when he first said it. I thought what is the big deal about that? What he was really saying was, ‘Don’t be greedy. Treat the customer right and ask for a fair profit and everything will work out.’
Lou: When I first got in the business, I would get nervous a lot. We were going into a meeting with a client, or we had an important meeting coming up and my father would always say to me, ‘Just be yourself. At the end of the day, just be yourself and everything will work out.’
Tony: My dad, Bob Ruscilli, was vice president, and he kind of oversaw all the guys in the field, So having worked with him for many summers as a kid growing up, I saw that he was willing to get in and do whatever he needed to do to make things happen. If it meant getting in the trenches, he would get in the trenches. So as my uncle alluded to earlier, the one thing he taught me was, ‘Don’t ask somebody to do something that you are not willing to do yourself.’ I’ve lived by that pretty much all through growing up and watching him.
What’s the secret of a family business success?
Jack: I think it is straightforward honesty. We all tend to be pretty blunt, myself and Lou in particular; Tony sometimes is the mediator. But we put it out on the table and walk away, and we are still family.
Tony: I would say one of my Uncle Jack’s strongest attributes is he embraces family and finds ways to bring us all together as a group.
Lou: I would just reinforce what both my father and my uncle said. It is about communication, and it is about, at the end of the day, we are family. We all have to look out for each other’s interests and that’s what we do. There are no divided lines in this. We are going to succeed as a team or we will fail if we are all individuals.
Jim Litten has a saying that sums up his approach to operating F.C. Tucker Co. Inc.: “We are a success today, but nothing is guaranteed for tomorrow unless we have our game face on.”
But it’s not the only line of attack that helped him guide the largest Indianapolis-area residential real estate agency through a real estate market that dropped 32 percent between 2007 and 2009.
“Look at most businesses; if their business was off 32 percent, that would require monumental change to everything they do,” says Litten, president of F.C. Tucker. “Do you quit matching on the 401(k)? Do you put a hiring freeze on? Do you evaluate every single expense line that you have? We went through all those different processes, and as we saw the market continue to contract, we continued to cut. If we saw the market dropped 10 percent, we cut 10 percent.”
While cutbacks were necessary, it was disheartening for Litten to make them and to see his family of agents suffer as a result. Nevertheless, he knew he had another job on hand — to keep up the spirits of his employees.
“As a CEO of a company, you have to be realistic about what’s going on, but you can’t be pessimistic,” he says. “In a sales-driven organization, there has to be a cheerleader that keeps the organization moving forward.”
Litten’s 40-year career in real estate sales has taught him that he needs to keep his associates focused when facing challenges. He says that means not backing off and staying engaged.
“And it’s letting the agents know that we were in it with them,” he says. “The downturn wasn’t something that was their problem; it was all of ours.”
Here’s how Litten leads 1,500 agents across Indiana to stay engaged, focused and on top, with more than $2 billion in annual sales.
Empower, but don’t micromanage
Many leaders understand the value of empowerment. You give your employees more responsibility, they have more control of their position, and they start looking for solutions rather than making excuses.
With empowerment, however, comes the ability to delegate. It doesn’t work if the leader is a control freak. Litten says that he doesn’t micromanage the company’s business units or their leaders. When someone is hired to run a unit, the first thing he tells that person is that he expects him or her to run the operation as if it were his or her own. That doesn’t mean that Litten is unwilling to answer questions or offer guidance.
“But if I have to come out and micromanage it for you, I’ve got the wrong person in the seat,’” Litten says.
While empowerment means more authority for employees, it also means more responsibility — and being accountable. Leaders need to have quarterly reviews with each of the division heads and branch managers and review metrics to evaluate where they are, where the market share is and the growth they’ve experienced in the position. Litten also discusses every agent in the office with their managers to see how they are doing and find out where they may need help.
He says that one of the best indexes of performance is productivity, and if your managers keep an eye on individual productivity, they will be able to manage more effectively where it is needed most.
“You may get fooled by some who can sing a pretty good song,” Litten says. “But the reality of it is just productivity. When I look at the offices, are they doing comparable to what they did the prior year? If not, why not?”
In a smaller office, if there are just a few big producers and they are having an off year, it can impact the entire office. A leader who is tuned in to what is going on will be aware of why that office’s sales are off, and instead of thinking it may be a leadership issue in that office, will be aware that agents are simply having an off year.
“You’ve got to know what is going on in your business,” Litten says. “If levels of management just go through the motions, those days are numbered for them because you can’t do it anymore. You’ve got to know what is going on, what the trends are, what the strategic issues facing you are and how you are going to deal with them.”
Communicate, but don’t hover
While it may seem to be at odds with the practice of empowerment, staying in frequent touch with employees is vital to a company’s success. However, the leader needs to draw a fine line, because if it appears he or she is hovering, employees will not feel truly empowered.
Litten says that coaching is critical. Spend time with associates not only to help them but to simply check in and see what is going on with them. If you fail to do so, it may send a message that you don’t really care enough about them to ask or that you are making assumptions about their situation.
“The worst thing that you can do is to assume that somebody is OK,” Litten says. “You have to touch them regularly. Often, unless you are checking in with them, you really don’t know if there is something going on attitudinally on which you need to work with them or just be a good listener to them and let them come in and vent.”
Your leadership team, and thus the company as a whole, needs to understand what the fuel is that runs the engine. In the case of F.C. Tucker, that fuel is the agents, which is why Litten says it is critical to be plugged in to their needs.
In any business, employers try to retain their top performers. Litten says doing so is even more critical in real estate, as the top performers are usually independent contractors with the option to go elsewhere. Litten uses a sports analogy to make his point.
“Imagine the Indianapolis Colts having a stable of superstar players, with virtually no contracts with them, and those players have the ability to take their talents to any team in the NFL,” he says. “As an owner of the team and coach of the team, you would make sure that you bring value to them every day in what you do and the systems that you put in place, the platform and the tools of differentiation that you give them.
“In our case, if an agent doesn’t like what management is doing, he or she can pick up and move across the street in a New York minute. You don’t want that. Our only real asset is our sales force.”
Use tools to be proactive
Businesses today have to be proactive, says Litten. If they just react to what’s happening around them, it can be fatal.
“And never, ever, ever, ever be satisfied with the status quo,” he says. “One of two things happen in life: you grow or you die. The same thing happens in business. You either grow or you die.”
Business is continually evolving, and if a business tries to rest on its laurels, it will find itself left in the dust, because there is always someone behind you looking to take your market from you.
“Certainly it would be nice to be able to sit back and catch your breath, but business today is just so competitive that if you back off, you become vulnerable.”
To help agents stay on top of trends, changes and sales techniques, F.C. Tucker Co. established Tucker University to offer tools of differentiation for the agents who are interfacing with the consumer and keep the management team’s skills at a game-day level. Tucker University recently started a new sales training class. During classes, Litten usually talks to agents about the company culture, its values and its belief system. He also tells them that the only things they can really control are their attitudes and their activities.
He says that if you can control those two things, you are going to get your share of the market that you are operating in. But if your activity level isn’t top-notch and your attitude is bad — whether it’s because of the economy or worrying about what will happen if the mortgage interest deduction goes away — you will find yourself struggling.
“And if you play the best you can play by being on top of your game every day, you’re going to win,” Litten says. “If you don’t, shame on you; you are going to lose.” ?
How to reach: F.C. Tucker Co. Inc., (888) 588-2537 or talktotucker.com
The Litten file
F.C. Tucker Co. Inc.
Born: Dayton, Ohio. I was raised in a small town called Martin’s Ferry. It’s on the Ohio River by Wheeling, W.Va.
Education: I went to Ohio University on a football scholarship. I studied physical education and was going to be a football coach. When I tell people that, they look at me and say, ‘You’re doing what now?’
What was your first job?
When I was 15, I delivered groceries for a small grocery store in Bridgeport, Ohio. When I became 16, I could drive, so I could go further on the route. I was very blessed. My dad was a salesman for an oil company, and he had a tremendous work ethic. Every morning by 7:30, he had his suit and tie on and was out making calls to steel mills. I also think athletics instilled a discipline in me so that if I were going to get ahead, there were no shortcuts.
Whom do you admire in business?
I have friends in the Realty Alliance. There is a man named Ron Peltier who is president of HomeServices of America, a Berkshire Hathaway company. Ron and I have been friends for 25 years. He’s a good businessman and an exceptionally good person. I have a friend who is a U.S. senator from Georgia, Johnny Isaacson. He used to run a real estate company in Atlanta. I have tremendous respect for Johnny. He is a very, very bright and a very compassionate individual.
What is the best business advice you ever received?
Our office used to be in the OneAmerica Tower (formerly AUL Tower) in Indianapolis. When we bought the company, we were on the 25th floor. My mother and father came up to visit, and my dad was always scared of heights. He walked into my office and looked down. It was shortly after we bought the company. We were sort of all starry-eyed about it, and he looked at me and he said, ‘Son, be nice to everybody on the way up because on the way down, you're going to need friends.’ He was holding on to the side of my desk and looking out the window at the time. My father was just a wise, wise man and just a very good person.
What is your definition of business success?
To be respected by the people who you serve and to be respected by your competitors. You go about doing things the right way, and you treat people the way they are supposed to be treated.
Just because someone holds a position of leadership doesn’t mean he or she is an effective leader. Although there are many analytic evaluations and theoretical assessments that offer insight into leadership ability, many ineffectual “leaders” maintain their positions. Why? Leadership change is hard on everyone. Maintaining status quo is often the easier route.
Here are a few ways to identify real leaders.
? Leaders need vision, character and integrity. Those who do not have these qualities cannot inspire teams or performance or generate sustainable value.
? Performance talks louder than promises. Someone who has consistently experienced success in leadership roles has a much better chance of success than someone who has not.
? The best leaders are keenly aware of how much they don’t know. One of the hallmarks of great leaders is their insatiable curiosity, especially as it relates to their organization.
? Great leaders communicate well, both up and down the ranks.
? Real leaders bear the blame and bestow the credit, not the other way around.
? True leaders also develop, mentor and prepare talent for the future.
For a true test of leadership, give someone some responsibility and see what that person does with it and test their organizational skills.
Develop your inside talent
Do you have someone leading “inside talent development” within your company? If not, you should and for several important reasons.
Companies that build a reputation for aggressively developing their talent keep motivated, effective individuals from looking outside the company for their next promotion. That keeps your organization moving forward, helps prevent employee stagnation and saves money, since bringing new people on board is much more expensive than you may realize.
Someone whom you trust should be spending at least one day per week thinking about, tracking, scheduling, sourcing and driving talent development within your firm.
In growth times, the smartest leaders will look beyond hiring and focus on making the most of their existing talent.
The skinny on meetings
True leaders also hold organized meetings.
I’ve been consistent about my feelings about meetings for as long as I can remember. Simply put, I detest them. Why? Let me make this short, because I have to go to a meeting.
1. No clear agenda. Every meeting should have a clear agenda and a few simple objectives. When you leave the meeting, everyone should know his or her responsibilities.
2. Most meetings delay decisions. You meet, you mull things over, you kick the big decision down the road or, worse, await buy-in. Ridiculous. If you are that afraid to make a decision, you shouldn’t be in management.
3. Too many people. Most don’t need to be there: The evidence? The folks checking their messages and responding to emails.
4. PowerPoint presentations: A waste of time and resources. Almost always a way for someone to show off his/her knowledge. And always too long.
5. Too long. Come together, bring up what’s relevant and decide what works and what doesn’t. Move forward. In most cases, you don’t even need to sit down.
Is there a place for meetings? You bet, provided the result of any meeting is to make your business better.
Are your meetings doing that? ?
David Harding is president and CEO of HardingPoorman Group, a locally owned and operated graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted as one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at email@example.com. For more information, go to www.hardingpoorman.com.
Mark Carr was operating Christian Brothers Automotive in Houston when a Chevy Suburban driven by a woman from Michigan gasped its way in to the repair shop. It was giving off the telltale knock, knock, knock that even novice mechanics know means the engine is dying.
But what infuriated Carr was not the sad shape of the rusted-out vehicle but the fact that the woman had just paid $750 for repairs at another shop, and the engine was still clunking. He smelled a fresh rip-off for the unlucky victim.
“Her husband was disabled, and she was on disability,” Carr says. “She was trying to take care of her husband and was crying. She said, ‘I just paid $750 to get my transmission fixed and the car’s making the same noise that it did before.’ So I patted her on the hand and said, ‘Come on; let me take a look at it.’”
His diagnosis was on target. She needed a new engine.
“But this guy took $750 that this poor woman didn't have to fix a transmission instead,” Carr says. “I got in the car and I drove down to the guy and I said, ‘You know what? The guy who sticks a gun in your ribs in an alley is more honest than you are because at least you know he is stealing from you. I don’t know how you get up in the morning and look yourself in the eye in the mirror. You disgust me. I am going to tell everyone that I know not to come here. I don’t know what you are going to do for this woman because I can’t control that, but you should refund her money.’”
The man just stood there, not knowing what to do with Carr.
“And I left,” he says. “But that is how I stuck up for her. That’s not the only time that I have done that for my customers.”
Did she get her money back?
“I don’t know if he gave it to her or not,” he says. “But I hope he did; I hope I shamed him enough to give the money back. How would you like somebody doing that to your mother, and there was nobody to stand up for her?”
The incident is a reflection of the simple but powerful mission Carr has for his company — love your neighbor as yourself. With Christian Brothers Automotive, Carr’s goal is to distinguish his company in a field in which a number of lesser shops have often taken their lumps for poor customer service.
“A lot of times, you get a customer who walks in the door, and he thinks that you are a crook,” he says. “He may even say it before you even touch his car. It was a challenge for me to change that person’s mind, to show that that wasn't true.”
In 1997, the company began selling franchises that promoted family values. Today, there are 750 employees and 109 franchises in 14 states, and 25 more are in the planning stages.
“I did start out with a partner, and I bought him out about two years into it, so that is where the ‘Christian Brothers’ came in, using my Bible study,” he says about one of the most frequently asked questions.
Here’s how Carr, president and CEO, set Christian Brothers apart from other companies in a field that is often viewed suspiciously and how he generated $160 million in revenue in 2012.
Walk in another’s shoes
Not every company is founded upon what you might call a divine “nudge,” and other types of inspiration have led entrepreneurs to found enterprises. But no matter where the inspiration comes from, if that nudge becomes the heart of your company — and if you believe the company will only continue through a strong connection to that inspiration, superior customer service and a spirit dedicated to strengthening the community — you will be successful, Carr says.
He founded Christian Brothers Automotive in 1982 with the help of fellow church members, after he spent months praying about how he should change his life. One of the first steps he took to stand out above the rest was to take inventory of market perceptions of the industry.
“I sat down and I made a list of 20 reasons why people hate to get their car repaired,” he says. “I went through every one, checked off all 20 on that list and said I can solve every one of those.
His first goal was to be a light in the community. To do that, establish your operation as fair and reliable, he says. When you make honesty and integrity the foundation of your business, word gets around. Word-of-mouth is everything, and it spreads rapidly, be it positive or negative.
“People are talking about us, which makes me proud in a good way,” Carr says. “It’s all about, ‘Love your neighbor as yourself.’ That is our motto. Whatever race, color, creed, country — no matter where you’re from, everybody wants that.”
Another “image lifter” was a new design scheme. Carr created a positive culture shock when he installed an upscale home-charm décor that includes hardwood floors, leather couches, artwork and decorative lighting in the waiting rooms. The scheme was a hit among women, who had a negative perception of dingy auto shops and the possibility of questionable practices.
Don’t skimp on training
Training is a large part of jobs today, and few organizations can afford to skimp on educating their carefully selected employees. In service-related businesses such as car repair, a business often comes out ahead if it starts with a manager or executive who doesn’t have skills in the service field but instead is strong in business operations, Carr says.
“We do not want any of our franchisees knowing anything about cars,” he says. “If they know about cars, they can be in the running, but 90 percent of the time, we turn them down. We turn down by probably a 2-to-1 ratio.”
Instead, for his company’s franchises, Carr looks for businesspeople who know how to manage people and manage money. To get around their lack of knowledge of the industry, Christian Brothers hires all the employees for the new franchisee because that person doesn’t know what to look for. Then, after about a year, that person will have a better understanding of what to look for, says Carr.
Because no amount of training can address every possible task or situation for a new manager or executive, the education process has to be as thorough as possible.
“We go through extensive training with these people,” Carr says. “I actually have an exact replica of what my store looks like inside my office. It’s got the lobby and all the point-of-sale software so they are in the environment that they’re going to walk into. It is exactly the same — the waiting room, the counters, the whole thing.”
Carr has employees play the roles of customers during training sessions, both good customers as well as mean ones.
“We banter with the trainees to see how they are going to handle that particular situation,” he says. “We are in a lousy business. People are already walking in thinking we are crooks if they are a first-time customer. You just try to deal with it the best you can. If we screw up the car, you say that you were wrong, you take it back in, you fix it.”
Build an image of a cheerful giver
Companies that have become a better corporate citizen in the community are not likely to abandon those efforts, as the good will they achieve can’t be bought at any price. That good will can be especially beneficial in an industry segment that has taken its licks over the years.
And while Carr says a company can offer any number of promotions, those that have staying power in a consumer’s mind are optimal.
“I have a tremendous heart for single moms,” he says. “We hold a nationwide day for free oil changes for single moms. We served over 1,000 people last year. We hope to make it double what it was last year.”
Such events build the image and the brand of your company, but it can’t just be the event. Your core values of honesty and integrity have to be woven into the event or it may come across the wrong way and damage your image more than it will help it.
“It is not to get business,” Carr says. “It’s just to show who we are as a company and who I am as the leader of this company.”
Hosting philanthropic events making contributions and donations to the community result in positive feelings about the company not just from the community but from the employees, as well. Carr says Christian Brothers give away 10 percent of what it grosses across the entire company, donating to charities and other organizations.
“On the 30th of the month, when I call the controller and ask how much money do we have in the account to give, that’s the day I am the happiest,” Carr says. “I love it. I just love it.
“If you give from your heart, He blesses you 100-fold, and that’s what He has done with me.”
How to reach: Christian Brothers Automotive Corp., (281) 870-8900 or www.cbac.com
The Carr File
President and CEO
Christian Brothers Automotive Corp.
Born: Syracuse, N.Y.
Education: I barely made it out of high school. There were 32 kids in my class and I graduated in the top 30. I skinned out, although I did get accepted at three of the top art schools in the Northeast.
What was your first job?
I had a paper route when I was about 10. I used to clean toilets in a bar before I went to school in the morning, and I was a garbage collector on the back of a truck because I refused to collect unemployment. I also delivered fuel oil in upstate New York in 20 degrees below zero weather.
Whom do you admire in business?
Herb Kelleher of Southwest Airlines is one of the smartest businesspeople that I read about. The guy is so smart. All his planes are the same. The maintenance is low. He treats people well. It’s not flying first class, but they treat you well. The customer service, everybody’s got a smile. Nobody likes to fly anyway, but I just think that his whole philosophy, his whole concept of business and his making it so practical in the industry – he’s the only one out there that’s profitable. I also admire Lee Iacocca. He took something that was a mess and turned it into something that was good. I think that is why I like what I do. I’m trying to take something that is really crummy and make it into something decent. And it works so far.
What is the best business advice you have ever received?
My dad said to me, ‘Mark, credit is everything. Pay your bills, pay your employees and pay yourself last.’ I think that’s been really good advice. The credit has gotten us where we are – never defaulting on any loans. He was right. I have paid myself last, and not very much. There wasn't much left. But it took care of the employees.
What is your definition of business success?
It’s not size. It’s getting to a point where you don’t have to worry about paying your bills, you don’t have to look over your shoulder to worry that something is going to come up that you did dishonestly. You really enjoy getting up in the morning and going to the office. And if it is one employee or 1,000, it doesn’t really matter. Just because you are bigger doesn't mean you are more profitable – if you make $1 million a year and your expenses are $999,999, you didn't make any money.
Kent Clapp CEO Leadership Award Finalist
Continental Office Environments
(614) 262-5010 | www.continentaloffice.com
Ira Sharfin helped pioneer the Project Mentor program, which is a collaboration between the Columbus City Schools and Big Brothers Big Sisters of Central Ohio, in the Columbus area, and in its first year, he and his company, Continental Office Environments, enlisted 18 mentors in the program, which seeks to mentor students throughout the Columbus City School System.
That number reflects more than 20 percent of Sharfin’s in-office staff, which is one of the largest percentages of associate involvement in the program in the Columbus area — and additional staff members have joined the program in subsequent years.
In 2008, Continental Office Environments had the unique opportunity to host all of the company’s mentors and mentees from Mifflin International Middle School at the Ohio Governor’s Residence.
In addition to meeting then-Gov. Tom Strickland and his wife, the Continental team planned a special lunch that included educational activities and a tour of the residence grounds. Continental’s staff provided each child with a disposable camera to document the visit and take pictures with mentors and the governor.
After the event, Continental arranged for each student to receive a photo album with prints of his or her developed pictures, and a signature from the governor, as a keepsake.
This past year, Continental’s Project Mentor volunteer mentors saw the students in the inaugural class graduate from high school. It was a proud moment for Sharfin — who also serves as a mentor — and his staff, and it was a time to reflect on the tremendous relationships that have been created.
Pillar Award Finalist
president and CEO
(614) 246-2400 | www.rockbridgecapital.com
RockBridge has a long history of commitment to serving its community and helping those in need. The hotel investment firm’s philosophy is that the strength and success of the community in which its employees live and work is highly dependent on the support of local businesses. As such, RockBridge prides itself on the level of involvement in and commitment to a variety of charitable causes in Central Ohio.
Through volunteer activities, financial and in-kind contributions, and board involvement, RockBridge and its employees are dedicated to helping ensure that the Central Ohio community is a place of continued prosperity and growth.
Headed by CEO James T. Merkel, RockBridge and its employees have been recognized for many contributions to the community, including Big Brothers Big Sisters of Central Ohio’s 2010 Milton Lewin Legacy Award, Big Brothers Big Sisters of Central Ohio Corporate Partner of the Year Award, 2006, Salesian Boys & Girls Club Board Member of the Year, Ken Krebs 2005-2006, Boys & Girls Club of America Jeremiah Milbank Society, Business First Columbus Corporate Caring Award, 2004, and Business First Columbus finalist for the Corporate Caring Award, 2005 and 2006.
A good example of RockBridge’s community service is the involvement of the company and its employees in Pelotonia and the fight against cancer. In 2011, RockBridge recruited 14 riders who raised a total of $32,000 to support this cause. For 2012, with donations still coming in, RockBridge’s 68 riders have raised $130,000, making RockBridge, which has fewer than 50 employees, one of the organization’s top 12 fundraisers.
Pillar Award Finalist
Jordan A. Miller Jr.
president and CEO
Fifth Third Bank
(614) 744-7661 | www.53.com
As a long-standing supporter of the Columbus community, Fifth Third Bank — led locally by President and CEO Jordan A. Miller Jr. — has shown its commitment to the community by investing in local businesses, organizations and efforts that promote economic growth and financial education.
During the past year, the Fifth Third Central Ohio Affiliate has targeted investment in high-impact, community-based organizations, developing local and statewide alliances and partnerships, supporting philanthropic efforts within the Central Ohio community, supporting leadership development for both women and youth, and strengthening its network of leaders advocating for the community.
In the past year, Fifth Third Bank entered into a three-week campaign called “Growing Together: Make a Meal.” The campaign was held in partnership with the city of Columbus and the Franklin County Board of Commissioners, in cooperation with the Institute for Active Living, the Columbus Foundation, and Franklin Park Conservatory and Botanical Gardens.
The bank’s staff also committed itself to fighting hunger by devoting its annual May 3, or 5/3, celebration to volunteering. More than 90 employees volunteered at the Franklin Park Conservatory to help load cars with mulch, soil and other items needed by local groups to start gardens.
Overall, the Central Ohio affiliate of Fifth Third Bank contributed more than 22,000 meals to its cause through a variety of activities, also including monetary donations, food drives and other forms of volunteering.
Throughout its entire footprint, Fifth Third Bank provided more than 340,000 meals to those in need.
Taseer Badar was a fledgling entrepreneur in his mid-20s and ruin was staring him in the face. He had invested between $4 million and $5 million in four gas station/convenience stores in the Beaumont, Texas, area, and his company, the predecessor to ZT Wealth Inc., was leasing the properties to earn income. But when he chose the lessees, he failed to do an in-depth background check.
Within six months, all four stores had gone through their entire inventory and the lessees had siphoned the gas out of the tanks and disappeared. Badar closed the locations and started looking for a way to avoid bankruptcy.
He approached a wholesaler to help him restock his shelves to reopen, but he got a bonus in the form of some important business advice.
“He said, ‘You’re never going to get your money out of these stores unless you have an owner running them,’” Badar says.
As the owner, Badar gave it a shot, but his business was in Houston and the stores were 100 miles away. The experiment was short-lived.
“I was horrible — it was horrible — and I didn’t know what I was doing,” Badar says.
The wholesaler found people to operate the stores and advised Badar to give them an opportunity to own. With that opportunity ahead of them, the potential owners increased sales 50 percent, and within a year, he had sold all the stores at a premium.
Getting employees to buy in through ownership proved a valuable lesson to Badar, who went on to grow ZT Wealth and founded Altus Health Management Services, which provides support to medical facilities in administration, marketing, human resources and cash management.
Here’s how Badar, who serves as president and CEO, takes the promise of ownership a step further and engages the 700 employees at ZT Wealth and Altus Health Management Services to help generate $130 million in annual revenue.
Badar uses the analogy of an airplane to describe how to manage a company and its growth.
“Make sure that you don’t fly too high,” he says. “You take off in an airplane, and there is nothing underneath you. If it crashes, you can’t save the plane most of the time. When you grow too fast and you don’t have a foundation underneath you, it’s the same thing.”
That foundation needs to be more than statements describing the company’s core values or its mission. Instead, it should reflect a real knowledge and awareness of what is going on with your employees. Managing employees requires a bit of psychology to understand your employees, be successful and grow your business. And to do that, you need to consider the way employees view their jobs. Badar says it’s important to remember that you are dealing with human beings and their emotions, and by extension, you are also dealing with what’s going on in their families and their home lives.
You also need to understand your employees’ motivation for why they do things the way they do.
“If you understand that, you can work within the skill set of everybody,” Badar says. “And you can manage growth that way. If you come to terms with people’s skill sets, you really can manage and motivate them.”
The ownership card
The challenge for entrepreneurs after laying the foundation of their businesses is to build the first floor, the second floor and each successive one after that. If you have done your homework and discovered what makes your employees tick, the next step is to find out how to keep them motivated.
Badar says that motivation is not always about the money. Instead, it is often about the urge to keep the business growing. And the key to getting your employees to buy in is ownership, according to Badar.
“If you give someone ownership — not just options hoping that a stock price may hit one day — that will make someone work around the clock,” he says.
Then when you, as the leader, are not available and a client comes in, the employees treat the company — and by extension, the client — as their own.
Badar has given about 40 employee partners ownership in the company, and with ownership comes monthly dividends. After two years on the job, he has a pretty good feel of who is going to make it, who isn’t and who is going above and beyond the role of an average employee. If people aren’t going to rise to that role of ownership, you need to tell them so they can make the decision of whether they can be happy in their current role or if it is time to move on.
Badar says that each year, he chooses a few employees to share in ownership. And while some leaders may have difficulty giving up part of their business, he says you need to look at it another way in order to gain the long-term benefits.
“Don’t think about giving up anything,” Badar says. “You are gaining an asset by bringing an owner in. The shares that you give up mean you may just have a smaller piece of a bigger pie.”
Ensure a team approach
Once an employee becomes an owner, there often are immediate signs that the new arrangement is working. Employees become more engaged and take more initiative and begin working evenings and weekends. But underneath that new engagement remains the necessity of teamwork.
“You are as good as your people,” he says. “There is no ‘I’ in team. It’s very important. You’ve got to think ‘we,’ not ‘me.’”
When employees feel that they are in the business as part of a team, it discourages gossip and encourages employees to work together. And that should be a part of the company culture, with activities such as gossip discouraged in company policy. Badar has set a policy that identifies discussion of salaries and positions during the workday as cause for termination.
“Politics, for me, is the worst thing in a company environment,” he says. “There are politics in every company, including ours, obviously. But I have tried to shy away from it. The work environment is very important to me and kissing butt doesn’t work in our company.”
Instead, it is the engagement of employee ownership that leads to the success of the entire company.
How to reach:ZT Wealth Inc./Altus Healthcare Management Services, (713) 627-2000 Galleria office; (832) 230-8100 Pearland office or www.ztwealth.com
The Badar File
co-founder, president and CEO
ZT Wealth Inc./Altus Health Management Services
Born: Lahore, Pakistan. I have been in the U.S. since I was 11 months old.
Education: Texas A&M University. I have a degree in entrepreneurship management and finance.
What was your first job?
Mowing lawns. I learned how to ask for a sale. And if you didn’t get the edging right, someone wouldn’t pay you. I learned you have to do a good job or otherwise they wouldn’t pay you.
Whom do you admire in business?
I had a mentor who really taught me what to do and what not to do. His name was Ghulam Bombaywala. He had some 80 restaurants, he was a rags-to-riches person, and he has lost a lot of money since, but he still does OK. I learned a lot from him on how people interact.
As far as somebody that I admire in business, I would say who has leveraged a lot of relationships and who is a minority businessman is Magic Johnson. He is a great business leader. I don’t know him personally, but he is the first African-American athlete ‘near billionaire.’ Trying to help his community, doing things to give people a sense of an opportunity — that was his claim to fame.
What is the best business advice you have ever received?
Never burn your hut looking at someone’s palace. Stay within your own. Don’t try to compete with anybody. That washes away what you are good at. You’ll get there one day.
What is your definition of business success?
Contentment. Being financially free, paying off your loans and, thus, getting a great income. Business success is employing people, making a difference. But I think financially free is very important. Business is a risk. If you can mitigate that risk and still make that kind of money by employing people, that’s the success.
In executive roles at Baker & Daniels LLP over the past 10 years, Tom Froehle had weighed in on some 20 inquiries from other law firms about possible mergers with Baker & Daniels.
However, none of those led to serious discussions until the economy began its downward spiral.
“What we saw during this downturn was that clients wanted to look much harder at value,” says Froehle, who was, at the time, chief executive partner at Baker & Daniels. “Law firms were consolidating, and quite frankly, clients were consolidating in terms of using fewer law firms and looking for firms that had more extensive depth and breadth. We told ourselves that rather than be reactive, we have to try to be proactive.”
That meant going on the offense to find the right partner to create a successful merger. So the Baker & Daniels team started sorting through offers to narrow down the prospective suitors. While doing so, they came upon a firm called Faegre & Benson, located Minneapolis. Froehle said Baker spent a great deal of time trying to identify a partner that it thought would be a good fit, although the leaders could only do so much in terms of looking at websites and seeking out information. They also turned to anecdotal information that they heard from people familiar with the firm. Then they spent a lot of time evaluating and talking with the Faegre & Benson leadership team about the firm’s culture and strategic vision to ensure, before they made a move, that there would be alignment.
Here’s how Froehle, now chief operating partner, and his team scored a win at the newly merged Faegre Baker Daniels LLP, in operation one year now.
Finding a fit
When the topic of a merger comes up, the process can often seem overwhelming, especially when companies of considerable size and expertise are involved. To make the task less intimidating, start by looking at companies in complementary markets to yours, those that occupy the same market position and that serve at the top of their market.
Comparing those statistics gives you a better chance of finding the right fit, and every place in which similarities are identified increases the odds of success. After determining which factors would make or break the deal for your company, it’s time to go through the list to match potential suitors with your company.
“We looked at firms that appeared to have a similar qualitative excellence,” Froehle says. “There is some pretty good data in terms of rankings in those things that can help you identify companies from a qualitative standpoint.”
Then it’s time to look at culture to determine whether there is a good fit.
“On the cultural front, some things will stand out,” Froehle says. “Baker & Daniels was founded in 1863 and Faegre & Benson in 1886. So you had two very long-standing firms. Both firms had histories of civic involvement, with people committed to the community; they did pro bono and were diverse, and we saw really similar cultural values there.”
The next step can command the most time of anything else in the process. It’s time to get beyond the facts and figures and meet with the players face to face.
“A lot of it is just spending time with people; certainly both leadership teams should spend a lot of time together,” Froehle says. “We had what turned into an opportunity when we started discussions in 2010, but there was a client conflict situation that we just couldn’t resolve. That client conflict went away in early 2011, and we recommenced discussions. I think the fact that we had a pretty extended amount of time to spend with each other and to get other partners involved in those discussions helped us figure out whether we thought there was going to be a compatible culture.”
Froehle says it is valuable to flush out concerns early, rather than to wait until after the merger vote occurs. The goal was to combine the firms and the way they did things, so a lot of time was spent early in the process talking about how to develop the best governance structure for a new firm. But instead of taking one thing intact from one firm and another thing from the second firm, they instead approached it to determine what made the most sense so that they could tell the partners what the new firm would look like.
In effect, they built a model of the new company.
“By having that in place, and then being able to share with partners at both firms, ‘OK, here is what this new firm looks like,’ was really helpful in terms of allowing people to deal with the hard part about change, the uncertainty. Although we still have plenty of uncertainty, we tried to provide a real framework of what this is going to look like.”
Working it out
The last task is to determine the mix. This may be the most important task as you discuss common goals to reach a consensus.
“There were those who wanted to do something to not just get bigger but to actually help us serve clients better, and we saw some real synergies and opportunities to combine strong practices that would make even stronger practices,” Froehle says.
“Look for opportunities to complement and supplement strengths in each firm. We had no geographic overlap. Sometimes when you have offices in the same geography, it causes real friction in terms of how you deal with that. We didn’t have any of that, and so we had a lot of additive benefits. I think when people saw that and saw the opportunities to work together, they found that they like each other.”
Froehle says one of the fundamental underpinnings of the merger was the ability it created to serve clients better by providing broader and deeper expertise across a wider range of services. Helping employees understand that and the positive opportunities created has been an important piece of helping them get comfortable with the new organization and create a culture of excitement about being able to better serve clients. Even before the combination was complete, Froehle and his team set in writing what the expectations were of the partners.
“It has been a way for people to buy in to, ‘Here’s what we all expect of each other,’ and that’s been very useful,” he says. “This year, we are in the process of doing a similar thing for our associate lawyers in terms of trying to be much more definitive about what those expectations are, and that is going to be something that was necessarily different from what we had in either of the legacy firms.”
The other issue to address is the clients, as they need to be reassured that their relationships with the firm will not be changing for the worse.
“We went to our top 100 clients over the course of a year to talk about the combination,” he says. “It was interesting to share feedback with other folks in the firm about what we were hearing. Many clients were excited to hear about the new capabilities that were part of the combination. That has been really positive.”
Spread the good news
After the dust has settled and a single company is arising, the task turns to communication and feedback. Sharing positive news goes a long way toward reinforcing the common culture that is being developed.
“We try to open every meeting we have of any kind of group with a sharing of good news,” Froehle says. “These are things that are happening across the firm and with a real focus, at least this first year, on things that involve collaboration of people from the two different legacy firms.
“Those examples have been really helpful to others, who may say, ‘Wow! Somebody I know down the hall has been working with somebody I don’t know and that’s been a really positive thing that will help me be more inclined to step out of my comfort zone.’”
Froehle says that the effort to share good news about effective client collaborations, an additional focus on travel to allow people at the different locations to meet one another and other communication about what was happening across the firm were geared to help people recognize that there was a developing sense of a singular, combined culture. The feedback from those who have had those interactions and the opportunities to connect with each other have all been very positive and have helped to reinforce the internal message.
While recognizing that it would have been easier in some ways to maintain the status quo, Froehle says the long-term benefits of this approach are going to be very positive for the 1,600 employees.
“Obviously, it required the people and the leadership teams from both firms to have that mindset going in, but once they got that mindset, it became really exciting to think about creating something new.”
How to reach: Faegre Baker Daniels LLP, (317) 237-0300 or www.faegrebd.com
The Froehle File
Chief operating partner
Faegre Baker Daniels LLP
Born: Grand Forks, N.D., but I really only lived there for a couple of years. I grew up in and had all my schooling in Bloomington, Ind.
Education: Undergraduate degree at Indiana University in Bloomington and my JD from the University of Michigan in Ann Arbor.
What was your very first job?
My dad operated a small store that sold hockey equipment, so from the time I was about 12 I worked there. My dad ran the business and I sort of helped. I really just learned a lot about customer service, how important each individual customer was and how you could really make an impact on each individual customer’s experience by how you responded. The individual experience of working with customers was really valuable.
Whom do you admire in business?
I really admire John Lechleiter, Ph.D., who is the CEO of Eli Lilly and Co. I admire his vision and his ability to help people in the company to understand what an important role they can play in the world in terms of a pharmaceutical company. I often think people are not all that excited about that but he really has talked about innovation and how they are helping change lives. I think he has done just a really marvelous job of doing that.
What has been the best business advice you ever received?
Two things. One, communication is important. Somebody once told me that no matter what you think, it probably takes you 10 times to say something before people really hear it, listen to it and understand it. The second is to remember that everything you do sends a message to those people around you. That is something I think we often forget.
What is your definition of business success?
Because it is a little bit different, the organizational hierarchy, I think a big part of my view of success is when my partners feel like they have succeeded or at least when they feel like they’ve been a material part in achieving that success.