If Jacob Beckel has the opportunity to bring in talent to help AnazaoHealth Corp. do its job more effectively, he’s going to do it.
“I always ask my team, ‘If you’re a professional basketball team and you’re the coach and you have an opportunity to pick Michael Jordan, are you going to pick him or are you going to play in that spot?’” says the founder, chairman and CEO. “The question is, ‘Do you want to win or not?’ If the response is, ‘No, I just want to play,’ OK, then you’re not going to be a world championship team.”
The lesson is hard to grasp for leaders who feel easily threatened by others with unique abilities.
“That A player brings people that can potentially be A players up to the A level,” Beckel says. “The question is, ‘How do you attract them?’”
Beckel needs strong players who can help AnazaoHealth in its mission, which is to create better ways for medication to help people. The 140-employee company took in $30 million in 2008.
Smart Business spoke with Beckel about how to find talent and use it effectively.
Bring in the best. I grew up in northern Minnesota. There was a football coach named Bud Grant who coached the Vikings and almost every year they’d have a winning season, and the question they always asked Bud Grant was, ‘What is your philosophy on picking players?’ His theory was, ‘I’ll pick the best player available.’ He might have five linebackers and the next guy in the draft was a linebacker and he’d pick him. And they’d go, ‘You don’t need a linebacker.’ And he’d say, ‘I don’t today, but he was the best person available.’ And sure enough, six months later in the season, someone would go down or he would trade that linebacker for a tight end or somebody. It would always look like, ‘How did he know to do that?’
People will come to me looking for a job and I’ll say, ‘You know, I really don’t have that opening,’ but I knew the guy or girl was a really good team member and I would hire them in a different position, knowing they would eventually end up in a position I needed them in.
Find the A player first. When Tony Dungy built his whole defense around Warren Sapp, that’s basically what I have done. I found that one key person. He came in as chief operating officer, but now is the president and chief operating officer, and he had skill sets that I did not have at all.
We built the team around his skill set. I had not done that in prior companies properly. First of all, they have the skill set, but No. 2, they are morally and ethically on the same page with you.
A company prior, I had a guy with the skill set, but he was morally and ethically bankrupt, and ultimately, that absolutely destroys a company when times go bad, and it did. That was my mistake. I blame no one but myself for that. That hire was the key hire.
Mold your team. What I’ve tried to do is sit down with the individual as they come in and say, ‘This is the vision for the company. It’s not lip service. This is really where we want to go and what we want to do.’
Probably in this job market, that new employee just wants a job and they’ll say, ‘Yeah, OK, I’ll play the game.’ That will be the toughest thing to discern. Is that employee genuine or not? Are they just on the team because they need a job or do they really buy in to what that job is? Time will really tell.
You don’t know until you see the interplay of the team how someone is going to work out. You have to hire for the talent, but long term, you keep them because they buy in to the vision and the goals and they fit on the team.
Support your team. There have been decisions by the team that have been made that I’ve gone along with when I thought it was probably not the best decision at the time. And it has sometimes turned out that I probably should have steered it in a slightly different way.
But the flip side is when the senior management team buys in to a decision, everybody starts rowing in that direction. The team going in the same direction is more important than getting the exact nuance of what I may have thought would have been the best way to get there. That has happened numerous times.
You have to let the team learn. Sometimes they can make a wrong decision and it’s not going to damage the company too much and you say, ‘All right, let’s see where that goes.’ If it would have really been an important thing, you would have said, ‘No, we’re not going there.’
Learn to hold back. Early in the game, I would put too much input into the team. This was four years ago. They would say, ‘OK, Jake wants to go in this direction; we have to do that.’ I had to learn to back out of putting my decisions on the table until the very end. I pretty much let the team decide now what’s going on.
I will add input because occasionally there are some pieces either from past experience that I’ve had that they didn’t know or they didn’t have anyone else on the team that could put those couple of pieces in.
When we’re doing an acquisition, because I’ve done a lot of them personally, there are some skill sets that I have that no one else on the table really has. Do you understand this could be a potential issue or this could be a potential regulatory issue or this could be something else? But I really don’t want to skew the input unless it’s going in a really crazy direction that isn’t going anywhere good for anybody.
I tend to sit back and let the interplay of the team members decide the direction. They come up with some great solutions.
How to reach: AnazaoHealth Corp., (800) 995-4363 or www.anazaohealth.com
Jeffrey Foreman is never too far from his BlackBerry. So if one of his lawyers who is working from home calls him with an urgent question in the middle of the night, he’s accessible.
Foreman, president and one of the founding partners of Maltzman Foreman PA, strives to make himself approachable. To do that, he’s torn down the ivory tower that sometimes separates employees from their leaders.
“As soon as you start isolating yourself from your employees, then you become vulnerable,” says Foreman, who guided the law firm to 2008 revenue of $6 million.
Foreman gets on the same level as his 45 employees by holding himself to the same expectations, staying accessible and interacting socially outside of the office.
Additionally, when there’s a dispute, Foreman avoids stepping in to dictate the resolution. Instead, he lets employees handle it themselves.
Through it all, he maintains an environment of open communication at the firm.
Smart Business spoke with Foreman about how to knock down the walls of hierarchy and be approachable to your employees.
Lead by example. First of all, we show them the vision and show that it’s achievable and show them our achievements. [I do this by] leading by example and never asking an employee to do something that I wouldn’t do myself. If I’m not willing to do it myself, then I shouldn’t expect others to do it. If I expect somebody to bill 2,000 hours, then I’m going to bill 2,000 hours.
So by me setting the bar, it shows that that bar can be accomplished by somebody. I’m not asking somebody to do something that’s incapable of being accomplished, and I show that by doing it myself.
I’m not going to not come into work or bill no time and expect my employees to do all the work. It makes it hard to ask them to do something and creates resentment.
So when you have a new employee, if they were to say, ‘Well, I can’t bill that many hours,’ you say, ‘Well, you can because I do it, and everybody else here does it.’
Keep the lines of communication open. I have an open-door policy. I am accessible 24 hours a day, seven days a week, except if I’m on an airplane when I don’t have access to my phone or BlackBerry. Anybody that works with me knows that they can pretty much get me. As long as somebody’s not calling me at 2 in the morning to say hello but they’re calling me at 2 in the morning because they have a question that’s work-related, I don’t mind being woken up if I happen to be sleeping.
To have a successful firm that is essentially dealing with clients around the world, I recognize that you have to be accessible and sometimes provide answers at any hour of the day.
Interact outside of the office. Some people build a wall and there’s that fictitious wall where somebody may feel that it’s inappropriate to contact the CEO. So I think that interacting, even on a social level with all of the employees regardless of their social position, [is key].
So even if it’s sitting down in the employee cafeteria and eating lunch with them, it’s building the relationship and making them feel comfortable first talking to you face to face. Then that builds the comfort and the assurance that they can call you whenever they need to if there’s a problem.
One of the things that we do, for example, with our lawyers is we might take them on a retreat out of town so we’re out of the office and we build that comfort with them. It could be anything, whether it’s taking them out on a boat on a weekend and letting them know that it’s OK to joke around, to drop the formalities. If they feel comfortable with you, they’ll feel comfortable talking to you.
You spend so much time working with the people around you. I just think that it’s better if you know where everybody’s coming from, their life outside of the office. It makes it easier to understand each individual and what makes them tick.
Don’t butt in to disputes. Occasionally, there may be a difference of opinion, difference of personality. Let’s say an associate would come to me and say, ‘I can’t work with Partner A anymore.’ What we would try and do is if we felt that that individual was a good talent, if we couldn’t reconcile the two of them, then we might consider making a change.
But everything is not done arbitrarily. I don’t just say, ‘OK, this is what’s going to be.’ I listen.
Being a good listener means keeping an open mind, hearing what the employees are saying to you, whether it means acknowledging what they’re saying during the conversation, whether it means contemplating it and then thereafter making a change.
I sit down and listen to what everybody has to say, and I usually will try and get everybody else to come up with a solution. If everybody else signs on or buys in to that decision, then they’re going to be happier than if I just say, ‘OK, you’re going to work here and you’re going to work there, like it or not.’
[To get] everybody to talk out in the open, ask them, ‘What would you like? What would you like? What’s the solution?’ If it’s something that works for the firm, then they’ve made the decision.
If you are arbitrarily making decisions that affect others within the company, then inevitably you’re opening the door for unhappiness. Somebody is going to be unhappy with the decision.
If you [let] all that are involved come up with a resolution with my assistance or on their own, you’re going to have less unhappiness, less dissension. I think that they appreciate it more than me just saying, ‘Look, I heard you. I’m going to side with him,’ or, ‘I’m not going to side with you,’ or, ‘I’m not going to side with either of you. This is what’s going to be.’ Then you have unhappiness.
It comes down to, ‘If you guys can’t work it out amongst yourselves, then we’re going to have to make a decision, myself or the firm’s executive committee.’
How to reach: Maltzman Foreman PA, (305) 358-6555 or www.mflegal.com
As the founder of Angie’s List, Angie Hicks not only runs her own business, she gains valuable insight into how other leaders run their businesses.
Hicks, who co-founded Angie’s List in 1995, has grown her company from a Columbus, Ohio, neighborhood to an Indianapolis-based nationwide forum that provides reviews on consumer services. About 750,000 consumers use the information collected by the company, which generated $36 million in 2008 revenue.
Along the way, Hicks has learned that there are some common themes among successful businesses that consistently provide good service for their customers. Namely, successful businesses stay focused and communicate well. Those qualities are even more critical in light of the current economic downturn.
“Now is really the time to stay laser-focused on your core business, really understand it and grow it,” Hicks says. “That comes from direction at the top of the organization, and that needs to move down as you communicate with your employees.”
Smart Business spoke with Hicks about basic business principles and how they can help you succeed in spite of the economy.
Connect with your customers. The key here is to really keep in touch with your customers, stay abreast of all the metrics in your business. One of the things we’ve heard a lot from the service writers on the list is that now is a time to really improve your game on customer service. It’s something that customers are looking for.
Work with your customers on payment terms and things like that. The service companies on our list have been doing things like that to improve receivables. It’s really kind of homing in and focusing on your core business. This is a time to really go back to basics. What I always advise people to do is make promises that you can live up to. If in a typical turnaround time, you promise to make a callback within 24 hours or less, do that. Always make sure you can exceed their expectations. That will certainly win you favor with your customers. You also need to be in constant conversations with your customers to be sure that they’re satisfied with the project that you’re doing for them. Any time you can focus on a project like that is a time that you can really hit a home run with regard to customer service.
Don’t complicate things. One of the things that is challenging when running a business is staying focused on your core capabilities. A common theme you hear is don’t drown in a sea of opportunities when it comes to directions you can take your business, especially in an economy like this. You need to stay focused as a business. Employees need to clearly understand the key objectives of the business and where you want to take it at this point in time.
One of the biggest factors in success goes back to having a clear understanding of your business, the metrics and how it works. You have to be very rigorous in how you’re marketing, the expense side of the business, understanding receivables and understanding all of those basics that are so important in a business. It may not seem as important in good times, but as the economy has slowed down, you quickly see that the difference between companies that are struggling and companies that aren’t struggling is the attention paid to those details.
Build a foundation of communication. The foundation for good communication with employees needs to happen in the good times, too. You can take action when times are tough right now, kind of right the ship, but having a culture where you’re talking to employees regularly, sharing the direction of the organization and encouraging feedback, it’s going to help your business continually improve. That’s a habit that will carry over and help you during difficult times, as well.
Share as much as you can. That helps front-line people understand why decisions are being made. If they don’t understand why decisions are being made, sometimes the interpretation and implementation can be fuzzy. Employees understand what is going on with the economy and how it affects them, and it’s good to share with them what steps the company is taking to focus on the core competencies of the business, why it’s important, so they’ll be much more motivated to accomplish those goals.
How you communicate depends on the size of your company. It might be that they have a morning meeting before they head out for the day, they can gather all in one room. That’s great, because they can ask questions. That has to be part of the culture — can I walk up to someone and ask questions. That is as important as being able to ask questions in a meeting setting.
That is an aspect of the culture that you have to work hard at creating. There are several ways we do that here. Management is very approachable. We sit in cubes just like everyone else sits in cubes. We don’t have offices. We also interact with all of the employees regularly, including a suggestion box, regular meetings where they can ask questions.
You need a philosophy in which every employee has a right to ask a question and get a real answer. Then, when you get suggestions, you have to give feedback on that. It can’t just be a suggestion that goes unanswered. If you do that, it will hurt the culture because employees will think their efforts are futile. You need to offer feedback, even if it’s a suggestion you can’t really implement. You reinforce that through your actions. It’s how you demonstrate it, how you receive that feedback and what you do with it. If you don’t pay attention to it and you don’t act on it, it won’t work. You can talk about being a company that has an open-door policy, but if you’re not doing anything with it, it won’t sustain itself.
How to reach: Angie’s List, (888) 944-5478 or www.angieslist.com
Mark A. Carr admits he can be lazy. However, that isn’t necessarily a bad thing.
“Lazy people are very good delegators,” says the founder, chairman, president and CEO of Christian Brothers Automotive Corp., an automotive repair business.
But with that delegation, he expects his employees to be accountable at the company, which posted more than $60 million in 2008 revenue.
If employees ask him a question that they should be able to answer on their own, he tells them to figure it out themselves.
“But, when they come with a legitimate question, ‘OK, I’ve got this thing here, and I’m not sure if I should go this way or this way. What do you think?’ I love those questions,” he says.
In addition to asking questions or seeking advice, he also loves when employees ask him for a chance to try something different, which is a way he identifies sharp workers.
Smart Business spoke with Carr about how to delegate to employees.
Delegate. You evaluate the company and you see the sharp ones and you say, ‘OK, you are the head of this department, and this is your responsibility to run this. My door is open. Every time you have a question, rather than try to solve it on your own, come in, talk to me, and let’s solve it together.’ Eventually, they stop coming in. My son works for me, and I got into a tussle with him. I said, ‘Donnie, why don’t you come to your father and ask him how to solve a problem?’
He said, like I’ve had other employees say, ‘Well, I want to do it on my own to prove to you that I can do it.’ I said, ‘I invented the wheel, why would you want to invent it again, make the wheel a bicycle and run down the road with it?’
So, that’s my philosophy. I’m very open and I compliment my guys for asking questions, rather than trying to solve it on their own. No. 1, it takes twice as long and you run the risk of making a mistake.
Get a feel for employees. My real estate guy, you couldn’t offend him if you took a stick to his head. But, you have other employees that are very sensitive. Again, that’s a read. You have to treat everyone different in those regards.
I use the rule where if I have to discipline them, I compliment them first on the things that they need complimenting on. I hit them with the things that they need to fix, and at the end, I tell them how much I appreciate them.
Reward employees. Projects are important. You have a certain project you need done and (an employee) gets it done or the department gets it done very well and very quickly, you can bonus them. But never set it in stone. All the bonuses come across my desk, and the only one that makes that decision is me. It’s totally discretionary.
When you structure it and say, ‘This is what you are going to get,’ they take it for granted.
I’ll put it on the store level. You take your guys and you buy them lunch every Friday. All of sudden they expect it. Well, if you skip a couple of weeks and they really hit a home run and do $40,000 in a week on a Wednesday, you buy them steaks instead of that routine thing. The bonus structure is the same way. ‘OK, if this store closes, I know exactly what I am going to get.’ Well, that gives you no incentive to push harder. If it’s to my discretion and I can see you are really working and putting in the time, I’m going to give you more, and I’m going to give the other guy less.
Know your weaknesses. The first thing you need to do is be honest with yourself and be honest with the others around you. Because the guys that try to run a company and try to be everything, they usually get to a plateau or they fail. I would recommend you take a personality test. And see where your weaknesses are. And be honest with yourself. They are weaknesses, and people don’t change. You have to recognize that about yourself. ‘OK, I see the weakness; I need to work harder on that.’ But in four months you’re still not doing a good job because you have all these other responsibilities.
Find out, if you’re walking into a company with 50-plus employees, find out who runs those areas better than you do. Watch them and see if they are doing a satisfactory job or a spectacular job. Either get them off the bus or help them grow, but give them freedom. You’ve got to give them freedom. If you are going to give somebody responsibility and you look over their shoulder on everything, it’s just a frustration to people. It’s not fair to that person that you gave the authority to because he really doesn’t have any.
Stay in the know. There’s only 22 of us in the office, so I have a pulse on the things that are incredibly important that we have to carry out by deadlines and that sort of thing. I know what those projects are, so when I come in the morning and walk down to my office, I’m hitting it and saying, ‘Where are you on the Web site, what’s happening, why aren’t you done? OK, you IT guys, you’re designing this infrastructure, and I want to know where we are with it and these important things after the infrastructure. What are our deadlines; what are you looking at for timelines on that?’
How to reach: Christian Brothers Automotive Corp., (281) 870-8900 or www.cbac.com
Adelbert “Chip” Marous remembers the feeling of having to succeed or fall flat on his face.
It was 1980 and Marous and his brother, Scott, had just founded their own company, and the two young carpenters were the only employees.
That experience taught Marous how to be aggressive and adjust on the fly. And adjust he did. Today, Marous Brothers Construction employs up to nearly 600 people during peak seasons and has grown into a contracting powerhouse.
But Marous, the company’s president, hasn’t forgotten the lessons he learned while figuring things out for himself, so he grows the company through similarly strong-willed talent. That brings in a lot of aggressive mindsets, but that also drives growth.
“We have more type-A personalities in this company than probably any other company in the United States,” Marous says. “But that’s why we’re aggressive. That’s why we’re high energy here.”
Smart Business talked with Marous about how you reward hard work with opportunities and why you throw young talent into the frying pan.
Make sure you reward hard work with opportunities. In this business, and in life, it’s called respect. You have to respect your people. We respect our people; we give them opportunities. We understand it’s a two-way street: You work hard, we work hard and good things happen and opportunities happen, and people grow and move up to different levels. And as the company grows, you need more managers, you need more people to be responsible, and that creates that good culture of growth and aggressiveness. We’re very aggressive here, and those types of people gravitate toward us. It’s amazing. We hire people who have been in the business for many years, we hire people coming out of college, too, but there’s people that have come here that have worked other places for 10 to 15 years and they come here and say, ‘This is unreal. I’ve been in the business 15 years and this is like getting on the autobahn every day.’ It’s high energy and that’s what creates opportunities and that’s why we’re successful — it’s because of our people. And it’s a lot of young people, and they’re aggressive and they work hard, and that’s the culture. Those people gravitate to us, and the people that don’t want to work hard, they kind of deselect themselves.
Find your talent, then throw him or her into the frying pan. You can tell when you sit in a meeting with a young guy and he sits back and he’s a sponge and he’s absorbing things, but he understands exactly what’s going on. He’s not the one guy sitting there being a Mr. Know-It-All, and you can look at those traits and personalities and if you see those people, stick them into some management training and make sure those people are getting thrown into the frying pan and can handle pressure.
So those traits come out early, but through our career, it’s also amazing when you see a guy, you say, ‘That guy’s pretty quiet; I don’t know if he could ever be a manager,’ and the next thing you know, he’s got a couple years under his belt, he really matures as a young adult, and he wants to take on the responsibility — because you’d be surprised how many people out there want to be a manager but they don’t want the responsibility. You have to want that responsibility.
(Once you find talent), it’s very important that you communicate to them. And as a good manager, you have to let them fail and learn from their own mistakes, but don’t let them hang themselves. So we’ve grown this company by throwing people in the frying pan and seeing how they react, and that’s how we were taught the business. Nobody taught us the business. We were very aggressive and threw ourselves in the frying pan, and you’d be surprised how quick you learn what’s expected out of you.
But make sure you tell that person, ‘I’m going to give you more responsibility; I will put you in the frying pan, you’ll have a safety net, but you know what, I don’t want to use it.’ So you communicate to them and make sure that you say, ‘You’re underneath the microscope, buddy, and we’re going to back you but …’
You have to make sure you watch them. Managers have to watch them. In our business, you have project managers, project engineers, project superintendents, so not one guy is ever controlling the job. And those other team members, because they’re dedicated to the company, they’re not going to want to see a guy fail, either. So what happens is they kind of self-police each other. So they help shore those guys up, and if there is somebody who is weak and not doing their job, somebody raises their hand and says, ‘Hey, we need a little help over here because we might be in trouble.’ That’s how we grew this company. We said, ‘Hey, everybody makes mistakes. Let’s look at the mistakes, let’s help each other out and let’s move forward.’ So that’s how you police that in making sure the guy doesn’t hang himself.
Make new people aware of growth opportunities. We don’t do all the hiring any more because we’re big, but I’ll sit in on interviews still, and it’s good to hear the managers talk about, ‘where I was 10 years ago and where I’m at now.’ Our managers are people that have walked in the door coming out of college and are now running a huge division for us. So it’s not just an owner saying there’s opportunity here, it’s actually people that have been through these opportunities and they’re communicating that to the people that are coming on board, and on top of that, if you look at the history of this company, there’s definitely growth, so growth is automatically opportunity. You’d have to be almost blind to not see the opportunities, so it’s good to see the managers because they’ve had those opportunities and they’re willing, just like we were, to give everybody an opportunity.
How to reach: Marous Brothers Construction, (440) 951-3904 or www.marousbrothers.com
If Paola Schifino had any doubts that the advertising agency she had co-founded would bounce back from a devastating fire, she didn’t reveal the fears to her employees.
“We got up and running very quickly due to our tenaciousness,” says Schifino, who is a principal at Schifino Lee. “We didn’t lose any of our data, and we didn’t lose any of our people, so it was all good in the end.”
It’s that philosophy of tackling challenges head on and moving through them as quickly as possible that has helped the 30-employee agency be successful through challenges. That includes the April 2007 fire that scorched one of two agency buildings and the ongoing economic recession.
“It’s keeping people going because they are stressed and fearful,” Schifino says.
Smart Business spoke with Schifino about how to assemble a strong team and work with that team through challenges.
Always be looking. We continuously interview whether we have a hiring need or not because it’s just great to stay connected. So whether there is a position open or not, if I see a good resume come across my desk, I will interview that person.
Last year, my partner and I hired someone and we really had no work for him. We just knew if we got him on board, within six months, we knew there would be an account for him. Don’t bypass great talent. Every single resume that comes across my desk is usually unsolicited.
It’s a result of research they have done in the Tampa Bay market. They all looked at our Web site. To have a high-quality Web site that sets the standard for who you are and the work that you produce and who your clients are, that’s extremely important.
Learn before you hire. The question I always ask is, ‘What role did you play in this particular project?’ They might have been part of a huge project or a very successful project. They might have been the one that made the copies. Sometimes it will come out that they actually played a very small role in a particular project or they were the one that spearheaded it. That’s a key question to ask.
It tells me a lot about the person and whether or not they are honest. I’d rather somebody be honest and know that they did little. I think there is more value in that.
Assess cultural fit. Just because someone has the right skill set, that doesn’t mean they are culturally the right fit. They have to fit in with the culture of the company. Interview them multiple times with multiple people. Get lots of references.
Just before we make the hire, we take (job candidates) to lunch. If you can relax and have a good time and behave professionally and socially at lunch, to me that’s a key component to being able to work with customers. We don’t hire the person at lunch. It’s more like, ‘This is the person we want to hire, the top candidate.’
That’s one of the skill sets that you have to have. You have to be able to communicate with clients whether you’re having a working lunch in the conference room or taking a client to lunch and working through lunch. You have to be able to do that.
It’s also just a good test of personality, instead of giving them the written personality test.
Stay busy; avoid fear. Communicate with employees optimistically but also realistically. We’re pretty open on where we stand. They have a clear understanding that new business opportunities are extremely important and have to have as much focus as current clients.
That equals harder work and more hours because we cannot lose the client base that we have today. Recently, we had a whole slew of people working over the weekend to get pitches out. While in the past, they might have taken several days off to make up for the time they worked over the weekend, that’s just not acceptable anymore.
Don’t command, empower. Our people have a tendency of including me on every single e-mail, and at one point, you realize it’s not necessary for me to be in on every e-mail and at every meeting. It’s a great sense of pride to be independent and successful. It kind of helps them grow their own skills and their own style.
You develop that by letting them handle clients from start to finish. Empowering employees is letting them know all their ideas and improvements are welcome. That’s one of the things we say when we make a hire.
We let them know, ‘If you see something that you do not like and that you think we can do better from an operational or a customer perspective, please let us know.’ If it’s a great idea that will benefit both the customer and the company, we let them run with it.
They become charged. They decide whether or not it’s really important. We’ll let them know, ‘If you want to make this change, you need to spearhead it. You need to put a committee together and you need to run it.’ I always ask, ‘What are the benefits? How does it benefit the customer and how does it benefit Schifino Lee? How much does it cost?’ That’s the proof on whether or not they believe it is a worthy change.
Share great news. We give a lot of praise when we win an account or when a great job went out the door. Some parts of the team might not even know what was just completed or they might not have worked on a pitch, so we share that with the entire company. It’s sharing successes and giving people praise and making them feel proud of working with each other. Take the time to do that.
‘Hey, this is what we’ve done in the last two months. What have you been working on?’ That way everybody kind of stays connected.
How to reach: Schifino Lee, (813) 258-5858 or www.schifinolee.com
Christopher Cabrera could almost hear the questions before they were even asked.
Xactly Corp. had just acquired Centive, a move which was going to result in a significant overlap in job responsibilities in the merged organization.
“So in this already challenging time where people are concerned and a little bit scared, we had this other event happen, which caused people to be even more concerned,” Cabrera says. “So we were very direct and very clear telling people what was going to happen. There was some overlap, and there would be some reduction in force as a result. But we didn’t let it linger on.”
Time will tell how this move ultimately affects the 150-employee provider of sales performance management services. But Cabrera’s ability to push the right buttons with Xactly’s culture helped it achieve an 87 percent increase in revenue from 2007 to 2008.
“If you have (employees’) hearts and minds, you can get through tougher times,” says the company’s founder, president and CEO.
Smart Business spoke with Cabrera about the keys to managing a healthy culture.
Don’t dwell on cuts. We’ve talked plain and simple and clear. We’ve laid out time frames. We’ve said, ‘These next two weeks, we’re going to decide where the overlaps are and we’re going to announce the cuts, and that’s going to be it.’
We stuck to our guns and to our time frame, and we communicated that.
Employees are part of and are sharing in the success or failure of the business. They’ll understand that times are tough, and in order to preserve the golden goose for tomorrow, we need to do something today that might be a little uncomfortable.
As long as you are direct and you share that with them, and whatever cuts you make are not disproportionately affecting the employees and not the executives, my experience has been they understand that.
If these cuts are adversely affecting your culture or core values, you’re going to find yourself in a death spiral and you’re going to kill the golden goose.
Set the stage. People who think leadership is about dictating a culture don’t understand culture. Culture is driven by the people below. It’s driven by the rank and file. All the leader can do is set the stage as to what collectively we think our values are.
Xactly One is a foundation that today has shares of stock in it and today drives a lot of corporate activities and events around philanthropic activities. We give of our time, and we do food drives and soup kitchens and every kind of thing we could imagine to help the communities.
Employees really like that because it ties into what I said about our core values. It’s not just, ‘Oh guys, we care about the community.’ We’re saying we care about the community through our actions, not because leadership is saying it’s important.
Empower your people. One of the biggest problems I’ve always seen at companies that don’t have a great culture is that there is a fear that if I do something wrong, I’m going to get fired. I just had a conversation with an employee yesterday and I kept saying, ‘Why wouldn’t you come talk to me about this?’ The response was basically that they were scared. It bothered me because that’s exactly what I’m talking about.
We need our employees not to be scared and for them to truly understand that it’s OK to make a mistake, as long as you’re trying. You’re never going to get in trouble for trying.
Anyone in the company should feel comfortable coming in with an idea or a complaint or an issue or concern and talk to anybody in the company.
If a manager is ever uncomfortable with that person going around them, they are the wrong manager for this company. Now a case in point was this employee I talked to yesterday. Not everybody feels good walking into the CEO’s office and lodging a complaint because they think there is going to be some backlash.
The challenge is convincing them there isn’t and living and breathing that. So when that does happen, there is no retaliation and nobody is in trouble for doing that.
Dare to be different. Weak leaders tend to hire people who look and seem and act just like them and probably have similar backgrounds to them. It’s an area we strive very obviously to avoid. Look at our executive team. What you’ll see is a real amalgamation of people from very diverse backgrounds, ethnically but, more importantly, experientially. That is critical to having a thriving culture.
That is true not only of our executive team but throughout the company. I don’t know any other way to do it. That’s just always the way I’ve done it throughout my entire career. It’s always paid such huge dividends because you get such diverse and different thoughts and ideas.
Don’t be afraid to change. The old-school way is, ‘Hey, we can have these employees’ bodies here from 8 to 5, maybe even longer.’ I would try to convince them that I don’t care at all about having their bodies here from 8 to 5.
I care about having their hearts and minds. If I can get their hearts and minds, then you’ll see e-mails popping in at 10 at night or on a Saturday or a Sunday. It’s not a time-clock environment.
Try not to get hung up on who is doing what when but measure them on the quality of their work. In this day and age, that’s how you’re going to get people’s hearts and minds.
How to reach: Xactly Corp., (408) 977-3132 or www.xactlycorp.com
The one constant in business is that nothing ever stays constant. Jeffrey Tinsley has firsthand experience on that front.
In February, Tinsley relaunched the former Reunion.com as MyLife.com Inc., a brand that better reflected the company’s growth from a high school reunion site to a broader form of social networking.
But with the launch of MyLife.com, Tinsley — the founder, chairman and CEO of the company that generated $52 million in revenue last year — was faced with a multitude of transitional tasks, not the least of which involved bringing the company’s 120 employees on board with a new brand and new strategy.
“That is really the one constant here in any business, that things are going to change and evolve, and we’re always going to try to evolve the business in a positive way,” Tinsley says. “We had to coordinate a number of teams and people across this entire organization to make it happen over many, many months. It wasn’t just something that happened overnight.”
Smart Business spoke with Tinsley about how you can focus your employees on common goals.
Hire to evolve; train to evolve. It starts with new people joining the organization. I have an orientation meeting with new people to start, and within that meeting, we do a number of things. We talk about the business, the opportunities of the market and what we’re going to focus on. We take people through the individual departments, how they impact the business and drive us toward the goals of the organization. We even get down right into values, what do we believe in here. We believe in open, honest communication, collaboration, yielding the best possible results, the best possible opportunities, and we believe in evolution, that things are going to change and that we’re going to embrace change.
It really starts with good, solid orientation that shows what the company is about, your opportunities and how you’re going to operate as a business. It’s a really great way to get people on board.
Show your purpose. When anyone joins a company, one of the important decision-making factors in joining that company is feeling like you are joining a business that is providing a great product or service and a business that has the chance to be successful. For the people who are part of this business to know that the work they’re putting into making this business successful is actually paying off is something that is very positive. It reaffirms for many people why they joined up in the first place. Nobody wants to be a part of an organization that is struggling. They want to be a part of a company that is making consistent progress and is winning in their particular category.
That’s what we’ve done. We’re making consistent progress, even with the state of the economy, and we want to share that with our people so that they continue to be excited that they are a part of a growing, thriving business.
Facilitate communication. You have to communicate, which is what we really believe in here. That starts with helping people on a broad basis understand the thinking behind the change. Reiterating to the whole company what you’re focused on as a business, where the opportunities lay and how making the shift will better position your company for achieving the goals of the business. It’s very important to help the teams and different individuals in the company understand their roles in that evolution and helping them understand how they impact your progress against your internal objectives.
The leaders have a very important role in helping their pieces of the organization understand the overall objectives of the business and how they relate to the areas of responsibility in that group. They’re obviously breaking down to another level of detail what the priorities and actions are that are going to drive toward the overall goal. Those leaders need to provide the feedback necessary that shows how the team is progressing in relation to the overall company goals. They’re taking the higher level messages of upper management and bringing it to another, more consumable level for the individual team members. Our leaders are no different. They consistently communicate with their groups. Some groups in the organization are meeting on a daily basis.
It goes back to making it part of our culture and making it a natural part of the way we operate here.
You just can’t be open and honest and direct enough. It’s another one of our values that is part of our entire intake orientation process. We talk about the importance of open, honest communication, even if it hurts sometimes. As long as that communication is done respectfully, people need to share openly and not look back. At the end of the day, people are trying to make the business and make each other successful, and the way you do that is by working well together. And you do that by sharing openly and without hesitation.
Give employees their say. You also need to develop feedback channels for employees. At a minimum, within the monthly meetings we’re sharing everything we possibly can about the progress, from a key metrics and financial perspective to the external feedback from consumers, analysts and others that are having conversations about the business. All of that is communicated in these monthly meetings.
Taking it to another level, each of the teams within the business are looking at detailed feedback mechanisms, which include customer feedback and actual key metrics that they’re tracking on a daily basis. I actually do involve myself on a consistent basis with various teams across the board, just to check in and make sure that every group has their questions answered as to our organizational direction.
How to reach: MyLife.com Inc., (310) 571-3144 or www.mylife.com
Bill Schrom learned very quickly that anyone in a company could have a good suggestion.
“Myself, my COO and CFO, we worked for a much larger company in the past, but we all worked out in smaller field operations,” he says. “So, we understand that when you are this poor guy just trying to get a job done and all you need is this little thing done for you that … if you do it, it’ll make that person more efficient.”
Schrom hasn’t forgotten that lesson, even though he is CEO of Geotrace Technologies Inc., a reservoir services company that posted $58.4 million in 2008 revenue.
“Our backgrounds have made us very open to thoughts from the guy on the line who is actually performing the work,” he says.
Smart Business spoke with Schrom about how to get the most out of your employees and their ideas regardless of their position in the company.
Listen to employees. We have an open-door policy myself, my COO, my CFO, we have our doors open. We don’t have a secretary brigade blocking people or anything like that. People can come in and voice their opinions, which you’ve got to be cognizant of.
If you want to have a policy where people believe that you are listening, then you’ve got to act like you are listening. You’ve got to be willing to not just say, ‘Well, that won’t work.’ Say, ‘OK, let’s think about that. What about this? What about that?’ You’ve got to have a reasonable amount of discourse with people, and it kind of goes beyond just being open to your own employees.
You’ve got to be open with your customers and listen to what they’re saying because a lot of times they’re trying to say, ‘Guys, this is what we really need. No matter what you’re pushing and trying to sell, this is what I need.’
The other place we get some good feedback is often vendors. (They say), ‘We see you guys are trying to do this. If you want to do it faster, have you thought about doing it like this?’ What I try to get everyone to do is not say, ‘Oh, no, no, you aren’t part of this process.’ I’d rather say, ‘Let’s get your ideas and let’s hear it.’ Because those are often people that I would consider to be out of the box that have a different perspective and a different view.
Choose the best ideas. (You) look at the commercial applicability of it. Then, it may be an idea that may not look profitable on the surface, but is there a way by, if you can say, ‘Is there a market for this? Now, how do I make money with it?’ So first, you’ve got to have some level of demand for it.
People come all the time with ideas, but if nobody’s out there willing to buy them, you’re wasting their time. If somebody is willing to buy them, then you’ve got to start saying, ‘How can I make money with it?’
First, talk to the people who are interested, in terms of your clients. Often, you’ll find that somebody who sees a technology that will solve a problem for them may be willing to pay a little bit more for you to apply that technology in their case.
(Second,) I’ve surrounded myself here with very good people who understand the intricacies of the science and can say, ‘Yes, Bill, we can do this and do it in this kind of time frame.’
Engage employees. When we have a new technology, we’ll get people down into a big conference room and go over, ‘Here’s what we’re doing and here’s why we are doing it. This is the company strategy on this point.’ We do things called ‘lunch and learns’ with the employees where (we say), ‘We’re going to start running this process. Now you come in and we’re going explain it to you.’ We serve them a lunch so they kind of get comfortable with it.
We do a number of events with employees. Last year, we had a few great quarters, and we took everybody to a baseball game so a lot of the interactions. I don’t sit in my office. I’m not a guy who sits in his office all the time. I like to wander the halls and see what is going on.
I always try to engage people, talk to them, give them the opportunity to give me their thoughts. We’ve had a number of times when a great suggestion has come from just a routine guy who’s just trying to do his job. I’ll walk in to somebody’s office, and they’ll be struggling with something, and they say, ‘Gosh, if I had two terminals in here, I could see this data better and do this better.’ We usually respond to that kind of stuff. Most people have multiple terminals on their desk. It’s not because I decided that. It’s because they said, ‘I could do my job more efficiently if I had it.’
Stay positive. There’s a few people here who see me in a pretty bad mood at times. But, generally, if I am out walking the halls, I’m upbeat and positive and willing to talk to somebody. I guess I’ve got a good memory in terms of people’s names, spouses’ names or children’s names. So, it’s nice that you know a little bit about them.
We do a number of employee events and you get to know the people. I’m sure at some stage, if we become a $200 million company, it will be tough to know. But when I go to our offices overseas, I spend some time, every visit, walking around, sitting down with people trying to understand what they are doing and how they feel about the company and telling them what the company is doing and telling them about, ‘Here is where we are trying to go. Here’s what we are doing, and here is why.’
How to reach: Geotrace Technologies Inc., (281) 497-8440 or www.geotrace.com
You could ask Mark Symonds how he plans to grow Plex Systems Inc. Or you could just ask his customers.
Symonds, the president and CEO, relies on their feedback to spur innovation in the company, which makes software solutions for the manufacturing industry.
He builds feedback mechanisms into the software but also provides an option for more intimate interaction by assigning main contacts to each customer.
“The nature of our whole business model is that we’re in tight contact with our customers,” he says.
Symonds also gets involved in customer organizations — even serving on the board of the Precision Metalforming Association — to hear firsthand what his customers are facing.
To keep Plex Systems pointed in the right direction, he continually aligns customer requests with the company principles and initial project objectives.
“The customer is usually right,” says Symonds, who led 130 employees to 2008 revenue of more than $20 million. “But you have to make sure it’s an interactive discussion.”
Smart Business spoke to Symonds about how to get ideas from your customers.
Go where customers go. Customer needs change; the marketplace changes. So being able to listen to what customers need and then rapidly innovate, that’s what you need to do to grow. Not keep doing the same old thing but rather come up with new ways to address problems.
Find a way to stay close. It’s getting involved in industry associations so you hear the regulation issues, the financial challenges and so on facing your customers. Go where the customers go.
Don’t be trapped in your office. There’s so much to do that there’s a real temptation to be trapped in your office. Get out and visit customers and then follow up. When I hear about an issue, I dog it until it’s done, and I keep the customer informed of those issues. That builds trust and credibility. But it’s not easy. It’s getting out, driving a few hours to see customers. You can always think of something else you’ve got to do, but that’s absolutely critical.
Bring customers in. A customer advisory board [is] one way to stay close to your customers and ensure that they have a forum to be heard.
We put together a customer advisory board, a means of focusing the input from our customers. The customer advisory board meets every three or four months, and it tends to be more strategic issues, like how do we communicate to our customers. They’ve suggested improvements to our support process.
We had a lot of discussion as to what this one should look like. Should it be our biggest customers? Should it be a cross section? Should it be the most avid users? Should it be across industries or focused on one?
People are most interested in things that affect their industry. If they’re going to talk to somebody, they want to talk to somebody who understands their industry. So for instance, the first one we selected was automotive. We selected a cross section: our biggest customers and our oldest, big and small. But the people we invited are those that are passionate about their business, passionate about improving their business and about how [we] can help them improve their business. So that was the yardstick that we used to select customers to participate.
I bring in the key people [from our company] who need to hear firsthand what customers are saying. It’s really top-level involvement so our customers know we’re taking it seriously and they see the action and the follow-up.
Create an outlet for input. On every screen in our [software] system, there’s a button [customers] can click on and then fill out a user support request. They can direct it to anyone in the company or just into the general pool where it gets evaluated and triaged and scheduled. They can make it a critical/urgent, in which case it goes to everybody in the company. If the main people working on their account are on vacation, then somebody will jump on it because it goes to everybody in the organization.
It goes into a database with a priority — critical, nice to have, that kind of thing. Our team leaders get notified the instant those go in the database so they can continually look at the number of requests in a given area and start to draw conclusions about, ‘Boy, this topic is very popular and important to a number of customers. Let’s focus on that.’
Likewise, the sales team uses the same system to put in requests for changes to the product to support things they’ve learned about in the sales process. So we capture all those requests in a database and then our team leaders review those requests, determine which ones are most pressing and most valuable to our customers and then pursue those.
If a customer is willing to pay for an enhancement, that’s a good signal that it’s important to them. So that’s one measure. Then the sheer frequency and the priority of the requests from the customers are the next indicator. If 10 customers are saying, ‘It’s absolutely critical to my business,’ that’s a higher priority than two customers saying, ‘It’d be nice to have.’
Keep customer requests in perspective. The biggest reason for failure is a failure to manage the scope, meaning once people are into it, they say, ‘Oh, it would be a great idea to do this, this, this and this.’ If they pursue all of those ideas, they’ll never get done. That’s the most common failure. Our team is really focused on what are the business objectives and let’s stay focused on that. Get that achieved, then we’ll look at other opportunities for improvement.
Identify critical success factors at the start of a project. We try to manage expectations on how the project will go and what kind of pitfalls can come about. So addressing that upfront really helps down the road.
When you’re in the heat of battle, you’re midway through the project, you can fall back on those agreements and those guidelines that you laid out upfront. [It’s a] reminder as to what the implications are of not watching the scope, not managing the project carefully.
How to reach: Plex Systems Inc., (248) 391-8001 or www.plex.com