Every day, there are millions of possibilities as to how Jim Davis could spend his time. As president of Chevron Energy Solutions Co., a wholly owned subsidiary of the $221 billion Chevron Corp., he recognizes time is limited and that he has to make choices each day.
“There’s an endless list of things I could be working on, but the challenge is determining what are the critical few that are going to be the most impactful to the organization to drive it forward and to achieve its goals,” he says.
Davis says that as the leader of your organization, you have to choose three to five initiatives to focus on. Everything else needs to be delegated.
“One of the good asset tests is saying, ‘What would keep me up at night if it went really poorly?’” he says. “That’s a real good indication that you’re on the right track to determining what your key metrics are.”
But once you determine what keeps you up, you have to actually stick to focusing on those few things and not get caught up in all the other possibilities. To do that, Davis relies on his 400 people to carry out the rest of the tasks.
“Getting the right people in the right roles and then empowering them to perform in those roles goes a long way to meeting that challenge,” he says.
Hire the right people
Davis starts by making sure that he gets result-oriented people for his organization from the beginning.
“You want to look for people that are always driving for results because, at the end of the day, that’s what business is here for — to produce financial results — so finding productive people that can help toward those financial results will really be a strong attribute of candidates,” he says.
“Look at how they’ve managed their life and their academic career and whatever working career they’ve had, so there’s proof that they’ve demonstrated,” he says. “Achieving results is one of the key things that leaders can use to determine whether or not this person is going to have success in your organization.”
To get an accurate picture of their results beyond what they put on their resume, you have to ask them to talk about their past.
“One of the things I like to do is have them tell me stories about their career,” Davis says. “Tell me stories where they’ve succeeded, where they’ve failed. Hear them tell the story of their life and career, and typically, you’ll learn an awful lot about an individual by how that story plays out.”
This strategy has helped Davis find out about some candidates’ characteristics outside of the office, including volunteer and philanthropic efforts or the challenges in caring for family members.
“They really prove the mettle of that person in a completely different way than perhaps what their GPA or the highlights of their career might be,” he says.
Some stories have also made him realize that some employees don’t have the values or work ethic to be successful within the organization. Additionally, if they can’t give you examples of their successes, that’s a sign that they don’t have a record of achievement.
In addition to results-driven, successful people, Davis also wants passionate employees in his organization.
“The keys are that people are passionate about the business,” Davis says. “I always look for people who are passionate about what our mission is, what our vision is and passionate about our customers.”
In order to gauge whether someone is passionate or is just putting on an interview face, Davis asks him or her what he or she is passionate about, and instead of leaving it at that, he probes further.
For example, if someone says he or she is passionate about the environment and saving the planet, he’ll ask that candidate to talk about examples in his or her life about what he or she has done to support the environment. He says good answers could range from how the person recycles and conserves energy at home to organizations that he or she is a member of to projects or programs that he or she initiated in college.
“If someone comes up short and says, ‘Well, I’m going to get started as soon as I come to work here on saving the planet,’ I know I’ve been tossed an interview answer.”
Put people in the right roles
Once you have the right people in your organization, you have to look at where they’re at.
“A real critical part of a leader’s role is to make sure that they have the right team in place in the right roles, so you can delegate critical initiatives to them, so that you’re not trying to carry the weight of the whole company on your shoulders,” Davis says. “The collective strength of that leadership team can be leveraged exponentially further than an individual strong leader can.”
The biggest challenge you need to be prepared for is recognizing when someone isn’t working.
“The real challenge for a leader is if you recognize that, that person is not in the right role, to act and to make a change,” he says.
He sees it frequently in other organizations, and he also sees leaders afraid to make any changes.
“My advice is to act and to act swiftly —not irrationally but act swiftly — to get that person out of that role and into a role where they can succeed and be productive for your organization,” Davis says. “Letting people flounder and fester in the wrong role can be cancerous to an organization.”
You have to look for the signs of trouble from people both inside and outside your organization.
“Typically, you’re going to get lots of different feedback from that person’s peers, possibly from their supervisors, possibly from their customers or suppliers,” he says. “You may even observe it yourself in meetings and interactions.”
The difficulty becomes that leaders tend to put off unpleasant things and hope the problem will resolve itself.
“It’s like a warning light on any dashboard— whether it’s an automobile or an airplane, you better pay attention when that red light comes on,” Davis says. “Business is the same way. You have warning lights tha
t come on, on your financial dashboard or in terms of managing your people, and it’s just like the warning light on an airplane — you better pay real quick attention to it because something really bad might happen if you don’t deal with that right away. Rarely does a warning light come on and it’s good news.”
When you see the warning signs, it’s important to point them out to the person who’s struggling.
“Gather the information and the facts, and then you sit down behind closed doors with that individual,” he says. “You’ll find quickly that, that person also recognizes that they’re in a difficult role that may not be the ideal fit for them.”
For example, Davis teams his business development people with engineers to go out and collaboratively develop large capital project opportunities for customers. A lot of times in a small team environment like that, the engineers will look across the table thinking they can do sales and want to switch. Oftentimes they do, but just as often, when they get on the other side, they struggle to meet their sales quotas and to make cold calls, and they realize it’s not all it’s cracked up to be. In those situations, rather than letting them flounder, the managers will move them back into the engineering side.
“If you react early enough, oftentimes, there’s not permanent damage done, so you can work with that individual to manage them out of that role and into a new role,” Davis says. “The problem is when you let it fester, and suddenly, there’s damage done to that person’s career, reputation, relationships internally as well as the damage that might be done through your organization as well as to your customers, suppliers and financial results.”
If you let it get to that point, then it’s too late. “You’ll find it’s too late to manage that person into another role in your organization,” he says. “It might mean that you’re left with nothing other than to manage that person out of your organization. That is, in many cases, the fault of that person’s leadership in ignoring all the warning signs and ignoring the distasteful or difficult thing to do and letting it get to the point where there’s no other recourse.”
Empower your people
Once you have all the right people and they’re in the positions best suited for them, you have to work to empower them in their roles so you can focus on your three to five most important initiatives. It starts with laying out expectations.
“It’s setting clear performance expectations, being very clear about what their responsibilities are, what their authority levels are, and then basically giving them confidence and the encouragement,” Davis says.
When you tell your employees what their responsibilities entail, you also have to explain to them how you’ll hold them accountable.
“Have the right metrics and the ability to check in on interim results — where you can check in on the right frequency,” he says.
In most cases, that doesn’t mean daily, and probably not even weekly, but it needs to be regular depending on the job.
“There are times when people are working on things that are so critical that maybe it is appropriate to check in every day, but in general that’s something that the supervisor or leader has to work with each of their direct reports on and say, ‘Here are the responsibilities I’ve given you,’ and, ‘OK, here’s an appropriate interim check-in.”
When you’ve discussed what the best interim check-in is, it helps you make quicker adjustments.
“You can do the fine-tuning easily that way, so there isn’t some major overhaul that needs to be done because you didn’t check in frequent enough,” he says.
Once you’ve set expectations and explained how you’ll hold them accountable, then back off and leave them alone to do their jobs.
“Where organizations and leaders get in trouble is when they feel the need to micromanage their employees to where they’re constantly looking over their shoulders, constantly checking in, almost henpecking them,” he says. “Not only is it most likely demoralizing to that employee, it also says, ‘This company doesn’t trust me.’”
While you have to hold people accountable and make sure they achieve the results you need, you also have to provide encouragement, as well. When you combine accountability with encouragement, your business will find success, and you, like Davis, will be able to focus on those top priorities.
“One of our jobs as leaders is to be the biggest fan of our employees,” Davis says. “The most effective coaches tend to be the biggest fans of their players. Oftentimes, you’ll have leaders who aren’t fans of their employees. That employee or that player picks up on that, so you have to cheer them on and encourage them and support them.”
HOW TO REACH: Chevron Energy Solutions Co., (800) 982-6887 or www.chevronenergy.com
When Ken Blanchard was a
college professor, he was always being “investigated by
some of the best faculty committees” because on the first
day of class, he would pass out
the final exam.
“The other faculty members
would say, ‘You’re supposed to
teach these kids, but don’t give
them the questions from the
final,’ and I’d say, ‘Not only am
I going to give them the questions to the final, what do you
think I’m going to do all semester? I’m going to teach them
the answers so when they get
to the final exam, they get A’s.’”
Blanchard’s “The One Minute
Manager” and other best-sellers
written by him are on executive
bookshelves worldwide, and he
plans to explore the final-exam
concept in his next book, “Don’t
Mark My Paper — Help Me Get
an A,” which he is co-authoring
with WD-40 Co. President and
CEO Garry Ridge.
In his “spare time,” Blanchard
leads 293 employees as co-founder, chief spiritual officer
and “chief cheerleader” of The
Ken Blanchard Cos., an international management training and
consulting firm that posted
2007 revenue of $55.5 million.
Smart Business spoke with
Blanchard about how to encourage your employees to thrive.
Get your ego out of the way. The
biggest addiction that most
chief administrators, managers
and presidents have to deal with
is their ego, which I describe as
‘edging God out,’ and somehow
thinking you’re the center of the
universe. When you do that,
you’re pushing and shoving for
money, recognition, power and
status. You forget you are there
to serve rather than being
When leaders want everything
running up the hierarchy, they
create a duck pond. You end up
talking to a duck that goes
‘Quack, quack. It’s our policy.
Quack, quack. I just work here.
Quack, quack. I don’t make the
rules. Quack, quack. I’ll have to
talk to my supervisor.’
In an empowered organization, you’ll be dealing with
eagles, and they will say, ‘I’ll
take care of it. I’ll give you a call.
Consider it done.’ And when
they do that, then you will go
crazy as a customer because
you’re not used to it.
Make a plan to succeed. The first
part of empowering your
employees is performance planning. At the beginning of every
fiscal year, the leaders at WD-40
sit down with each of their
employees and they create a
final examination with goals
If they hit those kinds of numbers, they’re going to get an A.
If the employee doesn’t get an
A and the manager says, ‘I think
I’m going to have to get rid of
this person,’ Garry [Ridge, WD-40 president and CEO] asks,
‘What did you do to help him
get an A?’ If the manager can’t
tell him, he fires the manager,
not the poor performer.
Stay in the loop. The second part
of empowering employees is
day-to-day coaching. Your job as
the leader is to help your employees get an A when you’ve agreed
on what the goals and objectives
are. That’s where you turn the
pyramid upside down with your
people because you’re really
working for them now.
In so many organizations, they
have these normal distribution
curves that you have to screw a
certain percentage of your people. Or, you take the Jack Welch
philosophy and rank-order your
people. None of that builds trust.
Day-to-day coaching means
that you are in the information
loop with your employees on
their performance. You’re there
to praise their progress or redirect them if they’re off. Part of
your agreement in performance
planning is not only the final
exam but how the supervisor is
going to be kept informed on
how well the employee is doing
so the supervisor can be there
to help when the employee
You don’t want to be out of
the loop. So many managers set
goals, and then they abdicate.
The difference between delegation and abdication is that, in
abdication, you’re out of the
information loop and that creates the most familiar management style in our country —
seagull management. Seagull
managers aren’t around until you
make a mistake, and then they
fly in, make a lot of noise, dump
on everybody, and then fly out.
Be the people’s partner. Every
manager in an organization
should meet once every two
weeks for 15 to 30 minutes with
each of their direct reports. The
employee would be in charge of
the agenda, and that person
would talk about anything that’s
on his or her mind.
You can’t exceed 30 minutes
with the meeting because then
it’s going to be a drag, and people are going to start saying, ‘I
don’t have time to do this.’
For instance, if you’ve got
10 or 12 people working for
you, and you can’t afford six
hours with them over a two-week period, then you’ve got
your priorities out of whack.
You’re going to too many meetings, and you’ve forgotten your
Most bosses don’t know what
their people are doing because
they’re running around playing
politics and spending more
time sucking up the hierarchy.
They’re not focused on the
achievement of their people.
Review the results. The last part
of empowering employees is
performance evaluation. If you
really work with your people to
help them accomplish the goals,
the goals help the organization
achieve its goal. When the water
goes up, all the boats rise.
You empower people by making sure that they know what
they’re being asked to do, and
then you’re there to help them.
As they get more and more
experienced, they’re going to
need less and less help, and
that really drives them to do
HOW TO REACH: The Ken Blanchard Cos., (800) 728-6000 or www.blanchardtraining.com
Michael Siegal holds a special place in his heart for people.
Although he’s now chairman and CEO of Olympic Steel Inc., big
business wasn’t always his aspiration. Instead, as a young man, he
went to school for and earned his degree in education.
“People were always important to me,” he says. “Teaching was
always important to me.”
Although his path shifted and he’s now the leader of the steel
processor and distributor, he ensures that while the materials he
makes are hard, that his heart stays soft for the ones that handle it.
“Steel’s neutral ...” Siegal says. “Steel doesn’t care. The truck
doesn’t care, but the truck driver has to deliver it well. The guy
who loaded the truck has to load it to the customer’s specifications. If the person doesn’t care if we loaded the truck wrong, we
look like an idiot to the customer. ... It’s not that the steel was
loaded wrong — it’s someone loaded it wrong. It’s always been
Olympic Steel was founded more than 50 years ago on that
employees-first principle. That focus still holds true today, as its
1,200 people have garnered some handsome results — $1.03 billion in net sales last year, up from 2003’s $472.5 million, while
also earning five years on the NorthCoast 99 list, which recognizes the top places to work in Northeast Ohio. Siegal says the
key to creating and maintaining a culture as solid as steel lies in
articulating your company’s values, hiring and advancing the
right people, getting feedback, and rewarding people.
“At the end of the day, all that matters is people,” he says. “People
say, ‘Oh, the CEO says that — they’re supposed to say that,’ but the
reality is everything else you do is neutral.”
Articulate your values
It’s a simple illustration — 10 jigsaw pieces interlocking to a centerpiece and forming a circle. The centerpiece reads “Olympic
Steel,” and each of the other 10 has a different value on it. The illustration represents the ideas that are most important to the company
“Every corporation has a values structure, and the company has
the opportunity to articulate their own value structure, and if you
don’t do that yourself as a corporation, then the employees will
determine what that value system is,” he says.
To clarify Olympic Steel’s values, Siegal took his management
team off-site, and he told them to think of anything that they
thought the company stood for and put it up on a blackboard. That
resulted in about 70 values, and from those, the team had to cut
them down to 10.
“We said, ‘God came up with 10 commandments, so that’s a
workable number,’” he says.
They started with the easiest cuts.
“It’s more that you’re eliminating the duplicates of words that
maybe had the same meaning or weren’t the accurate expression
that we wanted to make,” he says.
For example, some liked the word “honor,” but others thought that it was difficult to understand what it really meant.
“If you’re in the military, you understand honor,” Siegal says. “If
you’re the everyday person, honor is a difficult construct as
opposed to integrity and respect.”
Then you have to look at values and see which ones embody
what you believe but are also going to reflect well on you to external constituencies like customers.
“Should you tell your customer that, gee, you actually do make a
profit?” Siegal says.
In this case, “financial stability” made the cut as opposed to just
The process was collaborative, and it promoted debates that
would yield group decision-making and consensus; however,
sometimes you also have to overrule the group. Siegal had to force
in one value that others didn’t agree with because he knew it was
important. He won’t say which one though, because he says that
it’s just as important as the other nine, even if he had to force it in.
“The good news is organizations aren’t necessarily democracies,”
he says. “You basically say, ‘Look, this is one that has to be here. We
don’t all have to agree on it, but it is one that Olympic Steel stands for,
and that’s the end of the debate, and let’s move on.’”
Once you identify the values that your organization embodies,
you then have to get buy-in for them.
“It starts at the top,” he says. “There has to be a buy-in always at
the top. If there is hypocrisy, employees will see it.”
In order for employees to understand the importance of buying
in to the values, they need to see that management buys in to them
and lives them every day.
“You have to be, both in good times and bad times, consistent,”
he says. “Certainly, in good times, it’s easy to be consistent, but in
more difficult times, you have to act with consistency around the
value structure because you’re always going to be challenged on
your integrity in business — profit versus doing the right thing.”
For example, safety is one of the company’s values, and it’s one
of the most evident ones to employees.
“It’s easy to say, ‘Well, maybe we don’t have to buy safety equipment in the periods of time where you’re not doing well financially,’ and the answer is, ‘No, that’s not a sacrifice we can make,’”
Siegal says. “We have to constantly be sure that the things that are
valuable are always reinforced, regardless of the circumstances of
Lastly, the way you communicate the values is also important.
“We list them alphabetically, not in order of importance, because
they’re all equal,” he says.
Once you tell them what the values are, you then have to go a
step further so they’ll hop on board.
“You have got to tell them why,” Siegal says. “‘Why are we doing
this?’ is as important as ‘What are you doing?’ but if you’re just saying, ‘Come to work every day, work really hard, and trust me,’
that’s the mouse on the wheel. ‘Why? Why would I trust you? You
can’t tell me why I’m doing this, then I’ll give you my minimal
effort, and I’ll go home and do what’s important to me.’”
Hire and advance the right people
Once the values are in place, you need the right kind of people to
integrate them into the culture.
“In the cycle of the employee development, it starts with a good
hire,” Siegal says. “That good hire means, are they capable of doing
the job you hire them for?”
Siegal says he has a constant struggle with one of his managers, who consistently hires really nice people, but really nice
people who aren’t qualified for the positions he’s putting them
in. So first check a person’s qualifications and make sure they
match with the job for which you’re hiring.
Once you’ve established that, then you need to find out what’s
important to the job candidates. Siegal says it’s crucial that people
who join Olympic Steel care about something.
“If you can’t say, ‘I care about something,’ you probably aren’t going
to care about your job, so the first priority is caring,” he says.
During interviews, Siegal will bluntly ask job candidates what
they care about. It may be their family or it may be the environment, but regardless of what it is, if they can’t articulate something,
then that’s a sign they may not be committed to your business.
“We’re happy to invest in you as long as you’re willing to invest in
yourself, but it’s a partnership,” he says. “I’m not going to invest in
you if you don’t care.”
Once you’ve hired someone who is qualified and cares, then you
have to advance that person through the organization if he or she
is a top performer. Choosing the right people to advance can often
prove challenging, but Siegal says to start with the people who buy
in to your values.
“If you share our values and perform, you have no issues,” Siegal
says. “If you perform, but you don’t share our values, you probably
won’t have a sustainable job here.”
Once you’ve identified someone, then you have to see if that person is ready for the next level.
“Put new people on projects, and see how they perform,” he
says. “If they’re saying, ‘I don’t have time,’ or, ‘I’m too busy,’ or,
‘I’m coaching my kids in softball,’ or, ‘I have life issues,’ or, ‘My
parents are sick,’ at a certain point, we keep asking you, and you
keep saying no, you’re not going to get a lot of chances.”
It’s also important to communicate to your employees why it’s
important to take the opportunities the company presents.
“You tell the younger people who aren’t experienced, ‘Look, if I
ask you to do something, and you say no, it’s a test. It’s a test of
who I can count on and who I can trust,’” he says.
Once you have someone who is both aligned and has stepped up
to the plate, then you need to talk to that person about his or her
“They have to say what they want,” he says. “If you cannot tell me
what you want for your career, it’s very hard for me to meet your
standards. Start off with, ‘What do you want? How do you see yourself? Where do you see yourself when you’re 45 years old?’ If you
can’t articulate that vision, then I probably can’t help you get there.”
If someone says that he or she wants to have a full career and
wants to stay with you, then that’s a person you want to invest in
and help get to the next level, so point out what needs to be done
to get to there.
“Here’s the skills you need to get there — you don’t have
them yet,” Siegal says. “Here’s how we can help you get there,
but it’s going to take commitment for you to go back to school,
go to seminars. You’re going to have to do things at night.
Homework doesn’t end when you graduated high school or
college. It goes on. The stuff you do at home is a lot more valuable than just doing homework. It’s doing lifework.”
It’s also important to identify what an employee isn’t willing to do to reach the next level.
For instance, Siegal says that if someone refuses to leave
Cleveland, then he may not be able to advance that person
because the next opportunity may never come up here, but it
might come up in Georgia or Minnesota.
“You have to go out to the world, and then you can come back,
but the world is not centered in Cleveland, Ohio, so you have to be
able to also be willing to commit to your career as much as the
company is willing to commit to you,” he says.
Get employee feedback
You might think you’re doing a good job in your culture-strengthening endeavors, but it’s best to go straight to the source to find
Start by building relationships with employees so they feel comfortable talking to you.
“You can’t have relationships if you don’t have any time with people ...” Siegal says.
“If you make the statement that people are our most important
asset, then you can’t say that people are my most important asset
but never go visit your physical facilities. ‘Oh, I’ve got to go see the
customer. Oh, I’ve got to go see the shareholder. Oh, I never have
time for my employee — but my people are my most important
asset.’ I have to be visible to them.”
Some leaders may say they spend time with employees because
they have every fancy teleconference gizmo there is, but Siegal
says you can’t rely on virtual communication.
“It’s not how fast the Internet can go — there are no relationships
there,” he says. “Relationships are spending time, building a personal relationship, so that when you have to pick up the phone, the other
guy on the other end of the phone actually picks it up.”
Siegal’s also realistic about how much information he can gather
in those conversations.
“You can’t get to everybody when you have 15 or 16 locations, so [a
survey] is a great tool to use to essentially communicate and let the
employees communicate back.”
Olympic Steel administers surveys electronically and in person
to all of its employees.
“We do opinion surveys with the employees every year, regardless of the market, because we want the feedback from the
employees,” Siegal says. “The employee opinion survey is predicated around the value system. We get feedback from all of the
employees, and you get the good, the bad and the ugly.”
When you administer surveys, it’s important that the feedback is
“If you ask people, they generally will tell you if they feel there is
value to and respect to their opinion, and that’s why we do it blind
so they don’t feel threatened if they have something negative to
say,” he says.
Once the surveys are complete, that feedback goes to an external
source for processing, and it’s important that it’s external as opposed
to someone internally. Siegal has seen firsthand situations where
internal people try to hide information.
“Sometimes, you have an individual who may sanitize the information if they think there may be something negative about them,”
When you get the survey results back, keep in mind that the goal
isn’t to get mad at requests or to find people to tattle on.
“You get the constant, ‘I want more money,’ the constant sort of
stuff that you expect, but there’s lots of valuable information, and it’s
not a witch hunt,” Siegal says. “The purpose is to find out, are we
being competitive in our universe. Are we doing things the way
we’re suppose to all the way down the line?”
Armed with information, you then have to gauge what is and isn’t doable.
“You sort of absorb between the ‘need to haves,’ the ‘want to
haves,’ to the ‘Boy, we better because it really is telling us something we’re doing wrong,’” he says.
To make those decisions, Siegal says to view each suggestion and
decision as if it were part of a three-legged stool.
“You really serve three different constituencies,” he says. “You
serve your shareholder — that’s true in a public company, but it’s
also true in a private company because you serve yourself if you’re
100 percent owner — but you serve the shareholder. You serve
your employee, and you serve your customer. That three-legged
stool can never be out of balance.”
For example, your employees may want you to double their
vacation time, which would be a great perk for them, but then you
wouldn’t produce as much product, so you may not be able to fill
customer orders and you won’t make as much money, so both the
customers and the shareholders would be hurt. Weigh suggestions
against all three constituencies to make sound decisions about
what to move and hold on.
“If you see the elastic band pulling too far in one direction, it will
snap back, whether you like it or not, and if you pull it too far, it
Olympic Steel gives out several awards to recognize attendance,
safety and company culture efforts as well as performance. It is
also active in the Make-A-Wish Foundation and awards college
scholarships to employees’ children. All of these programs and
rewards are important to building a strong culture, but you also
can’t deny the power of showing people you care with the almighty
“There’s rewards, there’s recognition, there’s all kinds of stuff along
the way,” Siegal says. “Money matters. People will tell you that money
doesn’t matter, but they’re kidding you. ... People will tell you the pat
on the back goes a long way — it goes a long way, it really does — but
at the end of the day, money also matters. A pat on the back is great,
but I can’t fill my gas tank up with a pat on the back.”
If you create a program to financially reward your employees,
those pats on the back will go much further.
“The key is, everybody rewards their sales guys,” Siegal says.
“How do you reward your administrative people?”
To do this, the company has a profit-sharing program for everyone.
The more money the company makes, the larger the percentage of
profits people get.
“Now everybody says, ‘How are we doing, and how can I help
you make more because if we make more as Olympic, I make
more’ ... and your administrative people go, ‘Gee, business doubled; I’ve got twice the paperwork, how come I don’t get any
upside of this?’ Well, you do,” Siegal says.
Rewarding people communicates that you care about them and
helps them better buy in to the values you established. When people
buy in to what’s important to the company, your business will grow to
“Have a vision and focus and a strategy that says, ‘If I have the
right people to execute on that, we’ll get there, and there’s something for everyone at the end of the rainbow —not just me but for
everyone at the end of the rainbow,’” Siegal says. “I’d rather have
the momentum of 1,000 people moving in that direction than one.
The energy, mass and force will get you there. You could be the
best rower in the world, but give me the physics of 1,000 people
saying, ‘I get it, I know what’s in it for me, and I’m willing to buy
HOW TO REACH: Olympic Steel Inc., (216) 292-3800 or www.olysteel.com
Joe Bento’s chief information officer had all the goods: talent,
intelligence, experience and leadership — just what the global
freight division of CEVA Logistics needed in an executive as Bento,
the division’s new president, looked to expand his division’s global
But something was missing, and it didn’t become evident to Bento
until he saw his CIO on the job.
“We have our chief information officer of global freight management, and when I first took the role on, one of the issues I had with
him was that we had spent all this money hiring a really smart guy
to run our systems and help us evolve so we could be a very effective logistics and transportation company, and he wasn’t accountable,” Bento says.
“We had this great person, and everybody in the business
was on board except for him. So it became evident that the
person responsible for the systems needed to develop a plan
to get everyone in the group to understand, and that’s essentially what I did by position.”
It was a revelation for Bento. You can’t motivate and involve
employees without a culture that values teamwork, and you
can’t build a teamwork-oriented culture without good communication from the top.
Bento says it’s not a light switch, however. You can’t automatically turn your employees on to teamwork and give them
a feeling that their work affects the greater good of the company.
“They have to know and feel that,” Bento says.
It’s something that requires constant maintenance from the
top of the organization.
Bento says that as the leader of your organization, it’s your
responsibility to make sure everyone is on the same page and
his or her roles are well defined. That’s where good teamwork
starts, and that’s exactly what Bento has set out to accomplish
Here’s how Bento uses his perch to ensure that CEVA’s $3.82
billion global freight business remains a well-oiled machine
operated by motivated employees.
Define your expectations
To give employees a sense of purpose, you must first define
the expectations you have for them.
At CEVA, Bento centers his entire freight management organization on a four-pegged operating process.
“We call it ‘operations excellence,’ and we believe it’s a market differentiator for us,” he says.
The pegs are zero-defect start-ups for new business, 12 communication-based “smart solutions” and lean initiatives.
“You do those three, and then you just measure the hell out
of them,” Bento says. “You put global metrics behind them and
then you have a definition of how you can communicate what
the expectation is.”
The four-pegged operating strategy does two things: One, it
is meant to focus everyone in the company on what CEVA
does best, which is essential for making sure employees can
live up to the expectations you and your managers set.
“When you talk about how to do business around the globe
and define that operationally, you have to be able to say, ‘This
is what we’re good at,’” he says. “This is what the company
should be known for; it helps the operations to know how they
could execute against that. It’s much easier than trying to be a
jack of all trades and trying to do everything for everybody.”
Second, Bento says any operations strategy issued by management is also a means of holding management accountable
to keep opening doors for employees, removing barriers that
might prevent employees from doing their jobs optimally.
He says there is one overarching rule that everyone in a management position should remember: The higher you go in your
company, the more people you are obligated to serve.
“You have to be someone who is willing to step across the
line and eliminate any type of bureaucracy,” he says. “The
ability to lead by example really differentiates good leaders.
Sometimes, you don’t realize that as you take on more
responsibility, you serve more people. You don’t think about
it in terms of that — that, that really has to be on a leader’s
mind, serving the people that work for you.”
Motivate the troops
What makes your employees want to come to work at your
company every day, beyond their paychecks? It’s a question
you need to become aware of as you are trying to achieve
buy-in from your work force as you move your company
Bento and his management team divide employees into two
basic groups: those who want to become exceptional performers at one specific job and those who want to scale the
Employees work with their managers to outline goals aimed
at building their particular career path, and each employee’s
performance is measured periodically against performance
indicators. Rewards such as recognition, bonuses and promotions are based in part on meeting and exceeding goals.
“One of the techniques we’ve done here that has been adopted by the global CEVA organization is to really be developmental with our employees as to what are their career aspirations,” he says. “We are doing more in terms of performance
appraisals. Not saying, ‘Here is a 5 percent raise,’ but asking,
‘How are we helping you to become a better employee?’ So my
human resources director is working with the global HR director to create a performance management arc for the organization that can help foster and develop that contribution —
whether it’s the night-shift employee moving cargo in Hong
Kong or someone working in distribution after hours, they
know how they are making a difference.
“These things over time do make a difference, that you are
making performance and performance management a part of
your organization’s culture. It can’t be once a year that I’m
telling someone they’re doing a good job.”
No matter where they work in the organization, they need to
hear and see communication from the top often and in multiple forms.
“You have to be able to give verbal communication or a pat
on the back,” Bento says. “You need to recognize what your
employees do in a group setting, in big settings. Anything you
can do along the lines of reinforcing the behavior in a positive
way, it costs you nothing.
“Recognition makes people feel great. An ‘attaboy’ goes a
long way. So we’re trying to reinforce that; we have things
we’re trying to evolve in terms of the involvement and the rewards for doing a very exceptional job. I’m a big fan of recognition, and it doesn’t cost you anything to do it.”
The key indicator for employee satisfaction and fulfillment
is your level of turnover.
If employees are leaving at a higher rate than you anticipated, it’s a signal to delve deeper into the issue.
“Your turnover will always be an indicator,” he says. “If you
can say, ‘Shoot, I have heavy turnover,’ well, why? Maybe
you’re not communicating the message very well. Maybe you
don’t have a good way to bring on new employees and teach
them the business in a way where they’re feeling like they can
make a contribution, so they quit.
“But the other side to that is, if you have areas in your company where you have a good methodology to developing people, where those people are the ones getting promoted, you’ll
populate your organization with employees who are doing
effective work outside of where they started.”
Keep everyone connected
Even if you have everyone in your company motivated and willing to work, it doesn’t necessarily mean they’re working together.
Preventing silos within your company takes constant and consistent communication, not just from you but from leaders
throughout the organization.
Bento says the best way to bring different divisions and departments together is in meetings. Even if gathering your managers
into the same room on a frequent basis isn’t practical for your
company, there are still benefits to doing it as often as possible.
At CEVA, Bento’s entire senior staff meets monthly, while the
executive team meets each Monday.
“Because there is so much interdependency in our business, we
have to keep together on things,” he says. “We meet as an executive team every single Monday just to keep a pulse on the overall
business, where are the hot spots and whether we need to rede-ploy resources to solve a particular issue.
“Our monthly senior staff meetings enable the staff functions
within freight management to be tuned in to what is going on
with the overall business as well as their functions in supporting
what needs to get done.”
Bento says your ability to engage your people in person is a critical element to keeping everyone connected and working toward
the same organizational goals.
“Everything we say (as leaders) has meaning,” he says. “If you
can’t be trustworthy in your position, you’re doomed. In an interdependent business like ours, communication is foundational.
You have to be able to deliver on your promises.”
With that in mind, Bento says communication and getting out
among his people takes precedence over most of his other
administrative responsibilities, and it shows on his appointment
“Just to give you a flavor for it, in the last two months, I’ve been
to appointments in Zurich, Glasgow, Dublin, Birmingham,
London, Tokyo, Bangkok, New York, Chicago and Los Angeles.
So what I try to do is prioritize that as best I can. In terms of
administrative functions, I try to do those after I’ve had a chance
to go out into the work force.”
HOW TO REACH: CEVA Logistics, www.cevalogistics.com
Robert D. Hays was thrilled when his employees defended their
flag football title this past season. While he was happy to see people at King & Spalding LLP having fun and building relationships
with each other, he wouldn’t have been so enthused if that was
done at the expense of the clients.
“It’s work hard and play hard, and when you’re a high-performing organization, that’s sometimes hard to do to remain both
high-performing and also have a collegial, collaborative, fun environment because there are businesses that are one or the other
but not both,” he says.
It’s this dual expectation that has gotten the law firm where it is
today — 2,000 employees across 10 global offices, which collaboratively earned around $600 million in revenue last year.
Everywhere he looks, success is obvious, but beyond the numbers, Hays often asks clients why they chose his firm when they
have so many options, and they consistently say it’s because of
“They often say it is because you will give us world-class legal
work, and we enjoyed the relationship, and we like your people, and we think you’re able to maintain perspective and a
sense of humor,” he says.
When clients are happy, they’ll continue coming back, so as
chairman and managing partner, Hays recognizes that the only
way for this to not only continue but also grow is to hire
increasingly better people and have those people build
stronger client relationships.
“They’re all personal relationships in this business,” he says.
“It’s people in the organization and interfacing with people outside the organization.
“It begins and ends with people — that’s all we are.”
Build relationships through
Relationships are built on solid communication and trust. To
make sure clients are happy with the work you are doing, get
their input by genuinely communicating that you want them to
be upfront and honest. But as simple as it sounds, it’s not easy.
Hays says you have to convince your customers that you are
sincere about getting honest feedback before you’ll get a true
picture of how well you are doing.
“You have to compel them to a place of candor with you — in
particular, when they’re talking to you about what you do or
what your firm does or what people who work for you do,”
“Explain your own commitment to responding to [feedback],
and credibly explain to them your own belief that their unvarnished candor is truly a great business value to you in the long
run. Once they see that and understand that you’re sincere,
that you’re unemotional and objective about the input, then
they, as people, are much more likely to be candid and objective in the discussion.”
Hays suggests not sending the person from your company
who is most involved with the client.
“Let’s say I am the person who does principle work for your company,” he says. “If you and I are friends, and I go up and ask you to
give me a candid review of what we’re doing and suggestions and
how you perceive us and people who work for me, even if you were candid — and you may not be — if it’s not flattering, it’s
something I don’t want to hear, I may delude myself about what
I’m hearing, and that information is not high quality and doesn’t do
us any good. People often hear what they want and then report it
even more favorably than they heard it.”
It’s also important to talk to several people at the company.
“You’re more likely to get the honest feedback,” he says. “...
What one person at the client may feel or know or see is quite
different than another one, but they’re both right because they
both represent a much larger enterprise, so you have to get
reports from all corners of that enterprise.”
Once you get feedback, you then have to determine what to
do with it.
“The world we live in is filled with opinions and advice and
often stated with great conviction in a way that would suggest
they’re never wrong, but they are,” Hays says. “There’s just a
lot of noise obviously in any business, and you have to be rigorous about your focus so that you block out a lot of that
Go through the information, and don’t discard anything without careful consideration.
“You can often get diametrically opposed opinions on the
very same issue from seemingly knowledgeable people, so you
have to do a great deal of sifting,” Hays says. “Part of that is to
take your time with it. You cannot make snap judgments.”
The key to sifting effectively is to push back on those conclusions, and Hays’ trial law background helps him do just that.
“In the courtroom, you always question all opinions because
everyone has one,” he says. “As I used to tell juries, opinions are
useless. The only things juries should listen to is reasons for opinions — what are the (bases) for those opinions? Then the people
on the jury make a determination based on the validity of the conclusion.
“That’s not dissimilar to what you have to do here, to a degree.
You have to probe constantly. Push to another level of analysis —
why do you believe that? What’s your basis? You keep pushing
and pushing. Often people are sincere in what they’re attempting
to convey, but they’re just imprecise of their expression of it. In
that kind of a dialogue, you often get to a better place than where
And once you begin to get to the reasons behind opinions,
look for recurrences.
“Almost nothing will you get uniform agreement on, but you
can find patterns,” Hays says. “If there are clusters of similar
responses and similar input, be it favorable or unfavorable,
you better pay attention to it.”
Those patterns tell you what things you need to address and
what things to keep doing. Without that feedback, you would
have no idea if what you’re doing is effective, and without that
knowledge, you can’t effectively improve and grow.
“We don’t produce widgets,” Hays says. “We are only the people, so that really involves two buckets of people — one are
the people internally here, who we hire and work together for
the clients, and the other are the people at the clients. You constantly have to be connected and listen to input from both
groups, and it changes, and it will continue to change.”
Build relationships with talent
Strong relationships with clients will help you build toward
long-term success, but you also need a top team to keep growing.
Hays says to find quality people, you have to know your company and not lower your standards.
For example, data shows that, in general, lawyers tend to be
type A personalities who are skeptical, less resilient than most
of the population, afraid of failure and less risk-oriented. To
make sure his firm stays ahead of the competition, he targets
people who don’t necessarily fit that profile.
“I’m a big believer that good is the enemy of the great,” Hays
says. “Good is not good enough. You have to have great people
— and to do that, you have to insist on greatness and have high
standards across the board.”
Getting great people starts in the interview process, and
whether you’re hiring senior people or entry-level folks, the
principles always apply.
“You need to have in these interview processes some skeptics —
some people whose jobs are to ask hard questions because you
want people to appear to be desirable — that will be the instinct,”
Hays says. “When you get into recruiting mode, it’s a groupthink
mentality that takes over, and marry that with what if the people
you’re interviewing are just telling you what you want to hear, and
the next thing you know, you don’t really have the kind of rigor that
you need to have to make quality decisions to grow that’s consistent with high performance.”
You may have a team member who’s naturally skeptical, but
if you don’t, then you need to appoint someone else or deal
with it yourself. Hays remembers one situation in which he
was interviewing a small group of people that looked great on
paper, but he doubted whether or not the candidates were
committed to the high-performance aspect of the firm’s culture, so he asked them some further questions.
He says that if they liked the line of questioning, they would
be fine with the culture, but if they didn’t like it, they probably
wouldn’t work out.
“I asked them, and it turns out they didn’t like it,” he says.
“That, to me, was a win-win all the way around. They learned
something, we learned something, and we didn’t go forward
The way you ask questions is also critical. To avoid having people tell you what they think you want to hear, Hays says to have
multiple teams of people ask questions to get historical data and
reduce some of the doubt in the hiring process.
“You ask people to prove that rather than state it,” he says. “What
is it about what you’ve done to date that demonstrates that you’re
committed to these values?”
While you’re asking a lot of questions, you also need to have
some honest conversation by laying out expectations to avoid
“You have to tell people that this is what’s expected,” Hays says.
“If you don’t, they won’t get there on their own, and they will
engage in mental gymnastics to avoid that conclusion if it’s convenient for them.”
You also need to make sure you’re not trying to sell the position to
them. Instead, clearly articulate the mission and let them decide if it’s
suited for them. For Hays, it’s about the balance between high performance and a fun culture that is most important.
“If you can’t look in the mirror and say, ‘I’m truly committed to
both of those things,’ that they’re not in tension with each other,
then it’s the wrong place,” Hays says. “If you build on that and
insist on that on a day-to-day basis, then you’re likely to develop a
culture and pass along an ethos within your organization that
attracts other people that are committed to the same value system,
and then it feeds on itself.”
On top of everything, you have to be patient and resist the
pressure to just fill a position.
“Just hiring good people will solve short-term immediate
needs, but it’s a mistake long-term, frankly.” Hays says. “No
one’s immune from having done that before, but you learn the
Hays says the easy way is almost always the wrong way, so
just say no, which is easier if you keep your standards at the
“The firm has to constantly increase its standards — not only
keep them where they are but increase them,” he says. “If
you’re committed to constantly increasing your standards at all
levels, then that’s an antidote to the seductive temptation to
making the short-term immediate decisions of hiring people
who might be good enough.”
Your people shape your culture, and that has to match up to
your clients if you want to succeed.
“Our culture is important to our business because if it was not consistent with what we heard from our clients or if we were not committed to aligning our culture with our business model, then I don’t
think we would ultimately be successful, as we are.”
HOW TO REACH: King & Spalding LLP, (404) 572-4600 or www.kslaw.com
There was a time when Rodger Riney interviewed each and
every person that came to work at Scottrade Inc.
“I had the privilege of being in on the hiring of probably the
first 500 or 1,000 people that we brought through here,” says
Riney, the company’s founder, president and CEO. “I could be
very careful and use my intuition as to whether I felt someone would fit in our culture.”
One of his most important qualifiers is the type of ego that
a job candidate brings to the table.
“There have been people that I interviewed where I just got
this feeling that they felt somewhat superior or had maybe a
little bit too much ego to fit in,” Riney says. “We succeeded in
the early years maybe on who we failed to hire as much as
who we did hire.”
These days, with nearly 2,000 employees and 2007 revenue at
$1.03 billion, Riney no longer interviews everyone who comes
to work at Scottrade. But his culture of teamwork and family
remains a key component of the online stock brokerage firm.
Your ability to convey the importance of a consistent and
healthy culture and identifying people who fit that culture is a
key factor in achieving lasting success. Riney still has a large
role in defining the culture to every one of Scottrade’s new
employees. At least once a month, he meets with a new batch
of employees in a session that allows both parties the chance
to get to know each other on a personal level.
“We have each new associate tell a little bit about themselves
so that everybody can get a feel for the type of people that
we’ve hired, their previous experience and the job they do now
for us,” Riney says.
He returns the favor by talking about his own background
and the early days of Scottrade.
“We really try to set the cultural tone early in their employment,” Riney says. “After you get the person in the door, we
have not just ‘meet the president,’ but we also have (an orientation program) that gives the associate a nice first few days
with the firm. We tell them a lot and go over a lot of stuff about
how the firm works and try to give them a good insight as to
what Scottrade is all about.”
By focusing on bringing everyone together and promoting a
sense of teamwork, Scottrade was rewarded with being
named to the Fortune 100 Best Companies to Work For List
for the first time.
Bring everyone together
One of the biggest challenges to maintaining a consistent and
healthy culture during a time of constant growth is the distance that often exists between the home office and other locations in the company.
“When you have 200 or 300 offices around the country in 47
states, it’s a real problem to keep quality evenly distributed,”
An intranet site where company news and new procedures
and policies are posted can be an effective starting point to
helping everyone feel like he or she is part of the same company and are working toward a common goal.
“Our intranet is a major conduit of information that we use to
keep people up to date on what the firm is doing and how we
think,” Riney says. “I think that helps in distributing the culture
over a period of time. We have daily input that gives us an ability to let people know some things they might otherwise not.”
Intranet technology can be a great way to offer your employees continuing education opportunities. The advantage of
doing the courses online is that everyone has the same opportunity, regardless of their location.
“We decided to either purchase or develop our own classes
that we can host on the intranet, and our employees can take
those classes either in our branch offices or they can log on
from home,” Riney says. “We encourage them to take as many
classes as they have an interest in or feel would further their
personal career or their Scottrade employment.
“It’s over 200 classes. While there will be classes we feel people in certain job categories should study and take, for the
most part, it’s voluntary. They pick and choose what they think
would be of value to themselves at the firm.”
It’s important to track which employees are taking what
courses in order to gauge the knowledge that your people are
getting through the training courses and what they still need to
However you choose to do it, whether it’s continuing education or just regular correspondence, it is critical that you keep
employees throughout your company current with what’s
going on in the organization.
“We have a quarterly newsletter for employees where we try
to make everybody aware of new employees and new things
we are doing,” Riney says.
You should also have regular training sessions at the home office
and bring managers in from the satellite offices and have a face-to-face meeting to go over any major changes in company procedure
that have been made. They can then take back that information to
their employees and pass it on in a face-to-face manner.
“Our brokers in the branches are brought in periodically to
do the same thing,” Riney says.
One tool that Riney does not have a lot of faith in for promoting a team-based culture is a suggestion box in which
employees anonymously drop in their thoughts on the company.
“Most people here, if they have an idea, if they have something that is going to make us a better and stronger firm or
result in higher associate satisfaction or better customer service, they’ll tell somebody,” Riney says. “They’ll be happy to go
to someone and give them their ideas and feelings. It seems to
work better for us that way.”
Promote a sense of team
When people think of culture, they most often think of the
atmosphere or environment at the office or the way that
employees interact with each other.
But Riney is a firm believer that culture has an impact on
employee interactions across the board.
“One of the main glues that holds the culture together in the
firm is the emphasis that we put on our customer service and
our customer satisfaction,” Riney says. “If you hire people that
can embrace that culture of customer service, you’ll find that
not only do they practice that with your individual customers,
but that same care and feeling of giving great service and great
satisfaction extends to their fellow workers, as well.”
And that’s where making sure people with big egos aren’t
hired in the first place can really help your cause.
“When I interview people, I look for their ego, and if there
is too much ego, I tend to run for the door,” he says. “I think
a modest ego is important to me in the people that we hire,
and it’s always been important. By screening out the huge
egos, I think I’ve saved myself a lot of heartache and perhaps made the company successful.”
If the job candidate does have an oversized ego, it’s unlikely you’ll be able to change the person at your company.
“They either have it or they don’t,” Riney says, referring to
team-focused employees. “The value proposition, the caring
and professional pride, is either built in or it’s not. If it’s not, I
don’t think we’re going to be able to be very successful in stimulating it or creating it.”
For those that do have it, constant interaction is a key to reinforcing your culture on a constant basis. At Scottrade, Riney
promotes continuous communication between his company
and its clients.
“We do things all day through our branch network where we
call customers, and we advise them of things that are happening or reorganizations that are taking place with securities in
their account,” Riney says. “We’re being proactive advising
them when events are occurring with their account. We’ll try to
make sure the customer has a great experience with us.”
While this is obviously good for client relationships, it also
pushes the culture just a little bit further into the mindset of
“It’s not just for the end customer,” Riney says. “It’s how you
treat and interact with your fellow employees. That’s why it’s
extremely important that we continue to hire individuals that
can embrace a true customer service emphasis.”
Riney says a human resources department can play an important role in finding and keeping the right people for your culture.
“It’s an integral part of decisions and communications with
our associates,” Riney says. “It’s embedded in every area of the
firm. It’s not just a department off in the corner that you go to
deal with problem employees or ask a technical question about
health benefits. It’s a department that cares very much about
all the employees here.”
Riney handled HR duties for the first seven or eight years of
Scottrade before turning it over to Jane Wulf, his chief administrative officer.
The philosophy remains the same under both leaders: Treat
employees individually and do not look at them as a whole.
“You’ve got to treat them like family,” Riney says. “We will go
way out of the way to be sure we treat associates in a fair and
respectful way. They take great care to try to hire good people
that will fit in and to make sure we are paying our people competitively. Sharing the wealth is an important aspect of having
a healthy company culture.”
If the success is to continue and the culture is to be maintained, Riney knows he will need to continue to work at it.
“If a CEO is smart, they will try to continue to obsess with the
details and make sure that the company doesn’t start cutting
corners and try to take the easy way out — trying to deliver
less value for more money [and] less satisfaction for more
profit,” Riney says. “If you are on top of that and you make sure
honesty and integrity are a priority and the customer-comes-first ideal continues to resonate, I think the culture probably
takes care of itself.”
HOW TO REACH: Scottrade Inc., (800) 619-7283 or www.scottrade.com
Anne Sweeney likes to think about how taking a risk on a cartoon mouse can turn into a $35.5 billion entertainment juggernaut.
That keeps Sweeney, co-chair of Disney Media Networks and president, Disney-ABC Television Group, from getting a big head about how Disney and ABC programs like “Hannah Montana” and “Grey’s Anatomy” have taken over the television world. Instead, she focuses on how The Walt Disney Co. was created by a man with the ingenuity to borrow $500 to start a company in his uncle’s garage with nothing but a few drawings.
“That’s really how the company started was with great risk and seizing opportunity, being experimental,” Sweeney says. “You have to look back at Walt Disney and think, why did he believe that theme parks for families would work, why did he believe that these little animated films that starred a mouse would captivate people? Everyone that signs up to work for Disney has signed up to be an innovator and has signed up to explore new tasks.”
So Sweeney, who is responsible for the entirety of Disney’s global entertainment and news television properties — which includes, among other things, the ABC Television Network family — has pushed the envelope by growing through innovation. Disney has stayed ahead of the consumer curve, creating outlets for its programming through high-tech toys, like iTunes and its own Web content, while also expanding franchising capabilities.
“I decided a long time ago that not only is change good, but I’m not afraid to change,” she says. “I think the greater danger for companies and human beings is not making the changes and maintaining the status quo.” Refusing the status quo has kept Disney surging forward. Since Sweeney took her role in 2004, her group has exploded, growing from $11.2 billion in ’04 to more than $15 billion in ’07, equaling roughly 42 percent of Disney’s overall revenue.
Keeping the momentum behind that much growth isn’t easy, so Sweeney is constantly pushing new angles for fresh ideas on what consumers want next. Here are a few strategies Sweeney uses to keep that mentality.
Make employees tinker with toys
Don’t feel intimidated by the fact that Sweeney is on Forbes’ and Fortune’s short lists for the most powerful women in business, you still want to work for her — especially if you want to play with the world’s latest toys.
That’s because Sweeney keeps employees thinking fresh by sending them home with the latest technology and asking them to apply it to their business.
“It really has been a great thing for our team to make sure that they have technology in their hands and are using it as it comes out,” she says. “This dates back to when TiVo and (ReplayTV) came out, I distributed them to my [executive] team and said, ‘Take them home, play with them, understand what the technology is and does, and think about it in the context of your business,’ and since then, they’ve taken home PSP [PlayStation Portable] players, and I think they were the first kids on the block with both the video iPod and the iPhone.”
The result from giving employees the latest business technology creates an interesting cycle.
“The initial reaction is, ‘Wow this is great,’” Sweeney says. “Then they take them home and, by the next weekly staff meeting, the ideas are absolutely flowing and it’s, ‘OK, can we do this,’ or, ‘What if we did that.’”
When Sweeney passed iPhones out to her top people before they became a national sensation they instantly came back with ideas on how to get Disney in on the innovation. “Now, you can get the ABC News widgets on your iPhone, and that really came out of people taking the phone, falling in love with it, using it and thinking about their business,” she says.
Not every business can use technology as fun as an iPhone, but Sweeney’s point remains: Putting the industry’s latest technology in the hands of your decision-makers and asking them how it can fit your business creates an advantage in your evolution. “It’s an absolute game changer,” she says. “To finally hold it and tinker with it is the thing that really gets people thinking. I look back on the countless meetings and conversations I had about the digital future of television as recently as three years ago, and all we ever did was talk about it, and suddenly, iTunes happened to us, and we were the first company in there with‘Lost’ and ‘Desperate Housewives.’ It really changed the culture of our company, and we were living that change. We weren’t just talking about it; we were figuring it out.
“I see how excited people are by the opportunity that new technologies have given us as outlets, and the great lesson and the thing people talk about the most is, what’s going on with our viewers. That’s the greatest opportunity for everybody here.”
Update your grassroots communications
Sweeney has another interesting take on technology: It can be added to old-fashioned forms of communication to spark growth.
She likes brainstorming sessions with small groups of people and personal connections, but therein lies the rub: When every group under her charge is in production, she has roughly 15,000 employees. So she has to pepper in improving communication outlets in her goals.
“You need your culture to be fully informed on what’s going on,” Sweeney says. “That’s the reason our company is growing as fast as it is. “My favorite thing to do is make sure people are educated, and my approach is really very grassroots, it is to bring people together in small and large groups, to walk the halls. We have a little series called ‘Coffee with Anne,’ and I pulled together 20 to 25 people.”
Those smaller groups started out as educational opportunities, but Sweeney quickly found that conversations about what was happening led people to throw out additional ideas. Now, whenever she’s traveling, they double as brainstorming sessions. She then gives every idea a chance by sharing the thoughts from one session with other groups and knows there’s life to one when she sees instant interest.
“I’ve actually funded some of the projects that have come out of that,” she says. “It’s promoted a lot of good cross-divisional work and ideas, some people have actually moved from division to division because they were inspired by someone they met at the coffee or someone they heard or something they wanted to work on next.”
Sweeney also keeps an open e-mail box where any employee can shoot an idea her way. Some ideas will fall flat when she brings them up to others, but to keep generating creativity, technological and personal outlets have to be available.
“It’s my job to start the conversation,” Sweeney says. “We don’t have a culture where people are punished when things don’t work out; we have a culture where experimentation is highly encouraged and celebrated. “I do something every day; it could be eating lunch in the commissary, it can be picking up the phone and calling a few people into my office to discuss a new idea.”
Sweeney spreads this agenda continuously to make a large company feel a bit smaller. She regularly puts videos of her presentations up on Disney’s internal Web site and hosts town-hall meetings when she travels. Each time she communicates Disney’s energy in a smaller setting, she is giving employees who might be reti-cent to speak more encouragement to come forward with ideas.
“It’s about making yourself available,” she says. “It’s about engaging them in larger conversations so they begin to learn what the company’s about, so they begin to understand the goals in a real way. It’s leaving the door open so they can wander in and say, ‘I have this huge idea, but I don’t know if it’s right for us.’ And it’s really developing a relationship where that idea can be on the table, rolled around, and, whether we end up doing it or not, everyone leaves feeling, ‘Well, that was great for the floor,’ and maybe that’s something that resurfaces a few months later, and its time has come. It’s encouraging a high level of communication and making sure people are constantly being educated about what our successes are, where our failures have been, where we are in our different business and what our expectations for growth are.”
Make sure you have a life
While you may want to work in a culture that generates ideas the way Disney does, Sweeney may not want you — unless you have a life.
“While I want to work with smart, innovative people in every single division and every single field that we touch in this company, I also want to work with people who have a life, who have interests outside of work,” she says. “We are a company that touches so many consumers in so many different ways; we really want to work with people who are a part of that, people who are living in their world, who have interests, who have hobbies and who are different from each other.”
Sweeney takes this philosophy into interviewing. When the standards for the position are met, the thing that will separate the creative employee is vigor for life.
“Yes, I want them passionate about Disney, absolutely,” she says. “But I also want them passionate about their own lives. “You can just talk about why are you here, here’s the job, here are the responsibilities and, sometimes, it’s as simple as, ‘What is your passion?’”
Sweeney remembers an early conversation with one of her key executives where he mentioned how passionate he and his future wife were about wine. Subsequently, he came out with his own wine.
“What do wine and television have to do with each other?” Sweeney says. “At the end of the day, I have a very creative, driven, passionate executive here who is driving our success for ABC and prime time.”
Pushing that drive for a life is something that has to come from the top. If employees see Sweeney working 80-hour weeks, many will follow suit.
“I have to take vacations; I can’t just tell people to take vacations,” she says. “I have to be judicious about sending e-mails out on weekends. I do have a fair amount of insomnia, and I’d get up at 3 in the morning and turn on my computer and go through my e-mails, and people were waking up at 6 and having an e-mail from me at 3 a.m. Then I started to see that I was getting responses back at 3:30, 3:45, and I realized that I was the problem, I was now giving people insomnia. Unless it’s terribly urgent, I now save those things as drafts in my mailbox and send them out at a more appropriate hour.”
Sweeney has found that creativity at Disney isn’t sparked by overtime but by people who have a work-life balance.
“The important thing that I’ve learned is that when you have a life, and you’ve truly encouraged your team to have a life, the results for your company are much stronger than if you ask them to give you 24-7, and the work becomes a grind,” she says. “I find that we have real surges in creativity when people have been able to get out in the world and step out of the zone that we’re in Monday through Friday. They come back refreshed with a million ideas. My favorite day with every employee is the first day back from vacation, where you can just feel that every light bulb is lit, and they’re fired up, and they’re just ready to go.”
HOW TO REACH: The Walt Disney Co., (818) 460-7477 or www.disney.go.com
Edward Crawford’s father passed away when he was young,
and at that point, he didn’t know where life would take him or
what he would do, but he was sure of one thing — he wanted to
“I hadn’t determined how I would be successful or what the
success would mean or how it would ultimately play out,”
He started his first company when he was 21 and had fun with
that, but after 30 years working in the private sector, he decided
he wanted the challenge of growing a public company, so in
1992, he joined Park-Ohio Holdings Corp. as chairman and CEO.
Little did he know that he’d be the one to take the diversified
logistics and manufacturing business from $119 million in revenue his first year to nearly $1.06 billion in 2006.
“It’s been fun,” he says. “It’s been quite a challenge. It is different, and when I think back about all the motivation at the beginning of my life to be an entrepreneur and be successful, nothing
in the tea leaves at that time pointed to the fact that I’d be sitting
here as the chairman of a $1 billion, publicly traded company
with plants all over the world.”
Crawford has learned a few things on the road to success. He
knows how to handle rejection, how to be honest hiring people
and then empowering those people without setting them up to
fail, and if you can master those things, it will serve you well in
successfully leading your own business.
Deal with rejection
Before you can do anything successfully in business, you have
to understand that there are going to be setbacks at certain
points, so you have to learn how to deal with negativity.
“If you can train someone to do anything, you have to
explain to them that every person in life personally and in the
business world, there’s going to be rejection,” Crawford says.
“The more you try to accomplish, the more there’s going to
They key is learning how to accept it and turn it into a positive
“First, you’ve got to realize that most rejection is not really
aimed at you personally,” Crawford says. “When people are
saying things that are, in essence, rejection, in most cases, it’s
not personal — it’s just their reaction to what they’re seeing
... you have to understand that most of these things are things
people believe, but they don’t really know you.”
When you recognize that it’s probably not anything personal
against you, then reframe your thoughts to prepare yourself to
deal with it emotionally.
“It’s a confidence thing,” Crawford says. “You just have to
say, ‘First thing I’m not going to do is when someone says
something negative to me, I’m not going to start moping. I’m
not going to let this knock me down, knock me off my feet. I’m
not going to let that happen. At best, it’s going to be a negative,
but it will not hurt me. Yes, I’ll feel bad about it for a moment, but I won’t let it affect my performance, my goal, where I’m
The next step is then using that rejection and transferring it
into a source of energy.
“There are certain people that are so devastated by rejection that they can’t get their balance for a period of time,”
Crawford says. “Rejection comes mostly when you have time
to handle it, but some rejection comes when you have to
make an instant decision ... I have to keep the big picture in
mind — where I’m going, where I’m trying to go, back to that
dream and being successful and executing it.”
If you can take this approach, it helps you stay cool in
stressful situations and allows you to make better decisions
and maintain a long-term view, focusing on knowing that this
too shall pass.
“I refuse to allow a negative moment upset me to the point
where it would affect my judgment and affect my will,”
Crawford says. “I just choose not to let that happen. I think
people, if they face the fact and think about it for a moment,
they can use rejection as a wonderful tool, but it takes some
Be honest when hiring
When Crawford started his first company, he was pretty honest
with the people he was hiring to work for him.
“I don’t have the money to pay you,” he told them. “I’m hiring you and the idea is we’re going to get some steel and
make it into pales, and Friday, we’re going to get paid, and
I’m going to come back and pay you. I hope it works out how
I think it is. This is a terrible building, and it’s hot, but we’re
going to make it out of here. OK?”
Despite the unknowns that faced the company, people respected his honesty and came to work for him anyway.
“Boy, when you’re honest with people, and they find out you’re
going to work as hard as they’re going to work, wonderful things
happen,” Crawford says.
Flash forward 46 years, and that honesty still guides him and
helps him get the best employees to help his company grow.
When Park-Ohio gets down to its final candidates for a certain
position, all of the candidates interview with Crawford, but
instead of getting the standard interview questions, Crawford
instead elects to have a frank discussion with them.
“You’re obviously qualified, so I don’t want to go into this,”
he tells a candidate. “Can I take the time to explain what the
atmosphere is like around here and what I think is important?”
By trusting that the people on your team have found the
most qualified people and not grilling them with more questions, it opens the door to get the right person when you can
get into the nitty-gritty details of expectations, work environment and atmosphere.
“Part of the job isn’t the mechanical aspects of doing the job,”
Crawford says. “It’s will you be happy; will you fit in here?”
Crawford describes to the candidate how he’s looking for
someone who wants to win and can meet the demands of a
growing organization. After describing the work environment
and expectations with the candidate for an hour or two, he
then tells the person to go home and think about it and to call
him the next day.
“That’s the way to do it because that’s the way you get the
players,” Crawford says. “They’re going to say, ‘Oh this is
good,’ or they’re going to go home to either their wife or
boyfriend and say, ‘Wow, now I know why they’re successful
over there. It’s a mentality — talk about will to win! This is all
about winning to these people. It’s fun, it’s a scoreboard, but
I’m not going to be able to succeed there unless I can have this
His approach has paid off because many times candidates
will call him and tell him that they almost talked themselves
into taking the position, but after thinking about what he had
said, they realized it either wasn’t a commitment they were
willing to make or didn’t match with their interests or skills.
“It takes a tremendous amount of effort and emotion to get
people on the team,” Crawford says. “Let’s get people on the
team, so let’s tell them where we’re going and why, so they
could tell us. I could ask you questions for weeks, and I would
still not know ... I can take an interview and I can make them
answer the questions so they’ll be successful in the interview,
but why would I do that? I want to tell them exactly what I
think they’re up against and let them decide. A lot of people get
hired because nobody’s willing to make it clear of the expectations, and it’s not fair to the person being interviewed.”
When the leader of one of Crawford’s plants passed away a
few years ago, he wasn’t sure who would replace him, but
when one of his long-time administrative assistants called with
a suggestion, he listened.
She went on to tell him that one of the young bookkeepers at
the plant had been there for six years and wanted the opportunity to run the plant.
“You know she’s talented, so will you consider her?” the
“Of course, I’ll consider her,” Crawford replied.
They had her come up for an interview, and his team convinced him she was the right person for the job. Three years
later, he was going to be in the area of her plant, so he called her
up and asked if they could meet since they hadn’t seen each
other in awhile. While catching up, Crawford asked if he could
come say a few words to the employees of her plant after their
lunch break, but she hesitated.
“Mr. Crawford, when Bill passed away, it’s taken me three
years to build up in everyone’s mind that I really run the company, and I take that very seriously,” she said to him. “I think
I’ve been successful, but if you go back over there, it’s going to
destabilize everything. They’re going to think there’s been a
change. We only have 80 employees or so, but they think I’m the boss, and I’m in charge, and I know everyone, and I know
their families, and I’ll do what you want, but you can see how
I’ve spent a long time making them feel that way.”
“OK, take me back to the plane then,” Crawford responded.
And that’s what Crawford wants because he knows he won’t
get anything from his people if he doesn’t give them something
“You can have a dream — a big dream, a small dream, an offthe-wall dream, but ... this can only be accomplished at this
level or any level with the support of other people and how you
treat them and how you frame the model of where you’re going
and what you present to them in return for their commitment,”
he says. “You have to really share something with them or give
them something in a form of leadership that will allow them to
When people feel that ownership, Crawford can rest easy and
not have to micromanage every aspect of the business because
he trusts his people to run their parts as best they can.
“In this company, it’s real, and it’s intense, and there are people out there running these plants that think it’s their business,
and they’re happy with that, and I’m thrilled because I don’t
have to worry about it, and if they need help, they call,” he
Giving people ownership allows them to buy in to his goals
and makes them more excited, which will help them work
harder and make the company more successful.
“This is all about the fun of building something,” Crawford
says. “There is a scoreboard — you have to be measured, but
it’s fun to be in the game, and it’s fun to be in with a lot of people that enjoy every minute of it. They don’t have to be the
quarterback. They can play another position. It’s like having
guards on a football team. Unless the guards are there blocking for the running back, they will not be successful, but they
have to be happy guards.”
Know people’s limits
Crawford once gave a job to someone he had known for a
long time, but after some time, it became evident that he had
to let him go from that position. Later he was having dinner
with his mother and reflecting on the situation in a sort of
befuddlement as to what went wrong, but his mom saw
things much clearer than he did and helped him see the light.
“Ed, you’ve known Chuck your entire life,” she said to him.
“You gave him more responsibility than he could handle. You
gave him a bigger job than he could handle, and you knew he
would fail. Maybe you didn’t think he’d fail, but you knew he
definitely wasn’t qualified. This isn’t his problem — this is
The light bulb went off over Crawford’s head, and he realized that his mother was correct.
“One of the biggest mistakes a leader can make running a
company ... is you have to be careful about putting people in
just because you like them, just because they’re fun and putting them in things they can’t do,” he says.
While it’s important to give people responsibility, it’s also
important that you don’t set them up to fail.
“You’ve got to put them in positions where they can win,”
Crawford says. “They have got to learn to win, and after
they learn to win, they can continue to win. You don’t learn
much from failure other than failure. Maybe people think
that’s a good experience, and I’ve had plenty of failures, but
the only thing I learned from failure was I didn’t like it.
There is an experience connected with it, but it’s about
being very objective and trying to figure out and trying to
move people to where they can be successful, and you’re as
good a judge of that as they are.”
Also realize that some failure is part of the learning
process, so you can’t be afraid to give people responsibility
just because they might fail. The key is to minimize their
“Just give them responsibility and let them fail,” Crawford
says. “That’s one good way. Cut the failures down to the
point where it doesn’t hurt the company that much. It’s a
process. There’s always going to be mistakes. We make mistakes. The company makes mistakes. You just have to overcome them.”
Maintaining that outlook has helped Crawford weather
the challenging times and strengthened his relationships
with employees over the years and gives them all hope for
the future of Park-Ohio.
“I think the people and that relationship will allow us to
sustain ourselves for a very, very long period of time,”
Crawford says. “As long as we don’t go away from that, and
we keep building the talent we have in this company, at
every level, the dream will go on because it’s their dream
now. We want everyone to dream.”
HOW TO REACH: Park-Ohio Holdings Corp., (216) 692-7200 or www.pkoh.com
Perception might not be reality in the world of business, but it
can sometimes precede reality. Steve Harman learned that lesson
when he became president of Shell Lubricants Americas in
As the president of Shell Lubricants’ Western Hemisphere operations, Harman oversees a roster of various products and brands.
Many of them are related to car care, but none of them really
crossed the line into car accessories or auto parts.
Then came Rain-X.
For years, Shell Lubricants manufactured Rain-X window treatment, which is a spray-on coating designed to make water bead on
a windshield, aiding a driver’s vision in rainy conditions.
The trouble is, market research showed most consumers didn’t
think of that when they thought of Rain-X.
“In the research that came back, many customers thought Rain-X was a wiper-blade product,” Harman says. “We weren’t even into
Harman and his management staff were faced with a choice:
They could either attempt to focus the public’s attention on the
Rain-X window treatment product, or they could take the Rain-X
brand in a new direction by making consumers’ perception of the
brand a reality.
After reviewing the research, Harman chose the second option.
Rain-X introduced a line of wiper blades, and they have become a
smash hit with car owners. He says Rain-X is now Shell Lubricants’
top brand in the car-care business.
Introducing a line of Rain-X wiper blades fits Harman’s philosophy
in leading Shell Lubricants: Take a strong company and make it even
stronger by relying on your big guns.
And in the case of Shell Lubricants, Harman says his big guns are
his brands — which also include Pennzoil and Quaker State — and
Harman has grown Shell Lubricants into a top performer under
the Shell Oil umbrella, with annual revenue of more than $3 billion
and more than 3,500 employees.
Here’s how he’s tackled some of the challenges of growth.
Maximize the odds
As a former college golf player and a horse-racing fan, Harman,
a native of Durham, England, says he is a competitor and a “betting man.”
Any time you place a bet, be it at the racetrack or in the world of
business, Harman says it is imperative to know where your
strengths lie and what factors are going to give you the best chance
It’s the reason why, upon being named president of Shell
Lubricants, Harman wanted to quickly ascertain the areas in which
his company performs the best, and then find ways to increase the
company’s presence in those spaces.
Walking around the streets of Houston during the first few weeks
of his new job, Harman says it quickly became apparent to him
that one of Shell Lubricants’ biggest strengths is its brand recognition.
“I was really impressed just walking around the streets and seeing how many good products and brands we have,” he says. “It’s a
nice problem to have.”
Harman spent the next few months traveling in the field, talking
to customers, distributors and stakeholders, and getting their
impressions of Shell Lubricants’ brands. The feedback he received
solidified his belief in the company’s brands.
“You have to get out and see how potentially strong your businesses are, talk to customers, talk to sales staff, and really understand how big these opportunities could be,” he says. “I still do that,
I spend a great deal of time in the field. I still value more than anything what our customers feel and what our prospects feel. To me,
that’s the most important thing in running any business.”
Harman says you need to look at the star performers when identifying what it is your company does the best, which are those
areas of your business that are strong with regard to research and
development, that have strong growth prospects, are well-backed
financially, are supported by a solid infrastructure and appear to
project as stable in the long term.
“You look at what already has an established track record,” he says.
“For example, with Quaker State and Pennzoil, we already had an
extremely strong distributorship throughout the U.S. So you look at
what is already strong and make it stronger.”
The best bet, he says, is believing that what is performing well
today can be performing even better tomorrow with the right
The flip side is business that doesn’t really match well with your
organizational strengths. If you don’t have the personnel to succeed within a certain space, Harman says don’t assume you’re
going to be able to quickly turn that around.
“If you have businesses that are struggling, where you might not
have the right skill set and putting that skill set in place might take
too long, those businesses are dying, and they might just need to
be tipped over the edge,” he says.
Stay in touch
Communication with customers is vital as you center your business on what it does best. At Shell Lubricants, Harman has built
lines of communication between customers and the company’s
Because face-to-face communication is generally the best kind of
communication, Harman frequently organizes customer focus
groups aimed at encouraging interaction between the people who
design the products and the people who sell the products. He has also
instituted an anonymous feedback system in which an employee can
submit his or her idea for review, and customers can anonymously
give their impressions.
Harman personally involves himself in the feedback process on
“Every three to four weeks, I personally hold sandwich lunches,”
he says. “We typically have groups of seven or eight staffers. We
look at what’s going well, what’s not going well. That’s an extremely useful way of getting feedback.”
Before anything else, Harman says communication with employees and customers alike needs to be highly personal. If you want to
harness the true strength of your business, you need people to buy
in to what you are saying, and if you want that, you need to be visible and genuine as a leader.
“I’ve always been taught that personal communication is huge,”
he says. “I’m not one of those people who spends a lot of time in
the office. So it’s being highly personal, highly visible and being in
front of people as much as possible. That has to be a top priority.”
If your business has many different locations, it might be nearly
impossible for you to travel around and gain personal input from
everyone in your company. That’s why, aside from a philosophy
centered on personal communication, Harman says you need a
structure to carry it out even when you can’t be there.
“You can’t just go on a plane or a train or bus and see everyone
in your business. You have to have good mechanisms in place, and
part of that is having good leaders in your organization who can
become effective communicators.”
Communication should flow downward through your managers
to your employees, he says. But making it candid and structured isn’t
the entire battle. You also need to make it interesting.
Few things will make employees tune out faster than dull, repetitive messages from headquarters. Though you might need to hammer away at the same points on many occasions, Harman says you
need to change up your means now and then.
“It’s not just sending out e-mails with ‘Here is the latest status of
the business,’” he says. “It’s about being imaginative with your
communication. We have sort of celebratory events; we use Web
casts. You need to find ways to be imaginative with your communication.”
Harman says he isn’t a cascade-style communicator, at least not
in the traditional sense. While he does promote his vision and a set
of core values throughout the company, he says he doesn’t believe
every aspect of his business needs to think and act alike.
If your business exists in different regions and different countries, he says you need to allow your managers in those field locations to tailor your company’s messages to that location’s circumstances
“I think it’s sort of a 1960s, hierarchical, ‘Here is what we believe,
now go do it,’ and I’m not like that,” he says. “We encourage our
leaders in whatever you are talking about, be it Colombia or
Venezuela or Seattle, to develop their own flavor of the message,
to conceptualize it for the businesses they are running in that area.
“I do encourage local leadership to make it very plausible for
their local situation.”
Attack in force
If you are going to pursue a growth opportunity, whether it’s in
your present space or in something totally different, Harman says
you must be willing to back it 100 percent with your company’s
If you haven’t given a growth opportunity the best chance to
succeed, he says there is no point to having pursued it in the first
He says it’s not a guarantee that the opportunity will ultimately
be a success, but if you have to kill the idea, at least you will
know your company gave it its best shot, didn’t bail prematurely,
and you won’t be left wondering about what might have been.
Harman calls it the “A-team” test. But this one has nothing to do
with ’80s prime time action show starring Mr. T.
By “A-team,” Harman means the best talent your company can
muster for the job. When Harman approaches a new opportunity,
or is trying to give a struggling venture one last chance for success,
he puts the best people he can find on the job and gives them whatever resources they need.
“You put the best people on it, and you give them unconstrained
pull, whether it be money or people,” he says. “It’s like a football
team that’s not doing very well. You put a new coach in, you
replace some of the players, and see if you can get them to win. If
you can’t, it’s possibly time to get out of the game.”
For every Rain-X growth opportunity that fits like a puzzle piece,
there are many others that simply don’t make the cut. If you’ve
tried and tried, and your best people and resources can’t turn a failure into a success, it might be time to cut your losses.
Harman says he has experienced both sides of the growth coin
firsthand at Shell. Many times, he says, failure is a matter of finding out that the opportunity didn’t match as perfectly with your
company’s strengths as you originally thought.
“Several times in my life at Shell, we’ve had a go at a business just
to see if we could do it,” Harman says. “We’ve given it the best people, the best teams, the best tools, and we found quickly it didn’t
The more quickly you can come to the conclusion that a growth
opportunity isn’t working, the better off your company will be.
That, he says, is why keeping lines of communication open with
customers and field employees is so vital. If anyone is going to see
the end of the road coming for a particular venture, the troops in
the trenches dealing with customers will probably see it first.
“You need to make sure there is clear understanding of what you
should move for and what you should not move for,” he says. “We
have an operations group here on a 24-hour basis, where if something comes in, they make the call as to whether we should move
on the matter or leave it where it is.
“Having a 24-hour operational response availability is very important to us, because having a nimble operating structure in place is
one of the most important things in a big organization.”
HOW TO REACH: Shell Lubricants Americas, www.shell.com/us/lubricants
In the airline industry, just running a company in the black is an accomplishment. But somehow, Colleen Barrett, president of Southwest Airlines Co., has found a way not only to operate in the black but to expand the airline’s reach and grow, as other airlines are filing bankruptcy, cutting service and even folding. Barrett and the company’s two other top managers, Herbert D. Kelleher, chairman of the board, and Gary C. Kelly, CEO, have done this by building a culture of employee warriors who help them look out for the company’s best interests. “We tell our employees over and over and over that if they want to continue to enjoy job security, which is very rare in our business, and if they want to increase their personal welfare from a financial standpoint, the only way we can continue to do those things is if we make more money,” Barrett says.
Southwest’s legendary warrior spirit started in the early days of the airline’s epic fight for the right to fly planes. The company spent three-and-a-half years in court fighting just for the right to put a plane in the air.
From those early days, everyone has been ready for a fight, always understanding that the airline’s very survival was at stake, every single day, with every single customer. With that attitude, employees have helped build the airline into a company that brings customers back, time and again, because it has taken flights beyond functional to fun.
Since its founding in 1971, Southwest has grown to 32,000 employees and reported $7.6 billion in revenue in 2005. Drawn to the airline by low fares and high customer satisfaction ratings, some 88.4 million people flew Southwest in 2005.
Since 1987, the airline has maintained the fewest overall customer complaints as published in the Department of Transportation’s Air Travel Consumer Report, according to Southwest.com, the company’s Web site. In 2005, Southwest ranked first in customer satisfaction. In 1973, the airline adopted the first profit-sharing plan in the U.S. airline industry. Through this plan and others, employees own at least 10 percent of the company stock, increasing the employees’ ownership mindset.
Barrett says that early fight was the basis for how the company thinks and operates today.
“The competition and the arrogance of people who didn’t think we should be there caused us to want to be there even more,” Barrett says. “I’ve often thought that if they had just left us alone, we probably would have been out of business in a year or two. Every step we took, they tried to block, and that built up a fire in the belly, and a ‘By God, nobody is going to do this to us’ sort of mentality that I think created what we now call our warrior spirit.”
So how exactly do you engage your employees in helping grow your company? Barrett says it starts with hiring the right people.
Southwest has defined what kind of personality matches nearly every type of job within the airline. For a customer service representative, the company looks for proactive extroverts who won’t be afraid to lean toward customers when talking to them. “We have learned over many years how to talk to people,” Barrett says. “It doesn’t matter what the subject. When they answer us, words that they use in their answers will give us certain kinds of personality characteristics that will be a good fit for each job that we have profiled. We have profiled almost all jobs at Southwest.”
Conducting interviews in a group setting is one way Southwest both culls applicants at a quicker pace and sees how applicants deal with people they don’t know. Some 50 to 60 people are interviewed at one time for similar jobs. “In a group setting, we are really looking for the superstars,” Barrett says.
The main interviewer has the participants play a few games to warm the group up and tells them they are expected to be respectful of each other. The interviewer then asks individuals to answer questions in the midst of the group and watches not only how they answer but how others in the room react to them. Are they looking at the person who is speaking? Do they laugh when the person says something funny?
Barrett says the company also sometimes watches how applicants act when they go to lunch in the Southwest cafeteria. Do they talk to others while they are in line? Do they sit in a group with people they don’t know and converse easily? Or do they find a quiet corner and sit alone, hoping to be unnoticed? The better fit for Southwest, in most cases, is the natural extrovert.
In the book “Nuts! Southwest Airlines' Crazy Recipe for Business and Personal Success” by Kevin and Jackie Freiberg, the authors tell the story of a pilot being interviewed for a job at Southwest who is rejected because he is rude to several employees during his trip to the interview location. His credentials were sterling, but his personality was all wrong, so he was not hired. “If you are not a warm-spirited, touchy-feely person, you are going to feel so out of your element that you are not going to be happy here,” Barrett says, which is even true for the company’s managers. Barrett recalls one comptroller whom she helped find a new job after he confessed he didn’t like the warm-and-fuzzy culture.
After employees are hired, Southwest has to deprogram them. At most traditional companies, employees strive to be professional, which is often interpreted as suppressing humor and personality. “That’s the craziest thing I ever heard,” Barrett says. “One of the most important and significant freedoms we allow our employees is the freedom to be an individual. I have to stress, particularly with new hires, and particularly with pilots, do not spend your first year as you would at any other company not wanting to be known and just being low-key until you get off of probation. If you do that, you are wasting the very first year of your life at Southwest Airlines. “Good grief, we hired you because of who you are. We didn’t hire you because you filled a mold.”
Southwest has handbooks and guidelines that employees are given to help them handle tricky situations with customers. But those are only guidelines. Barrett wants employees to make their own judgments on how to best handle a customer. “I can’t sit here in Dallas, Texas, and write a scenario for every single thing our employees will run into, so they have to use some common sense,” Barrett says. “I don’t want people using rule books as reasons not to help customers, or each other.”
Southwest encourages its employees to have fun. The airline has a book of games that circulates among flight attendants that gives them ideas for how to keep customers entertained. Southwest employees contribute their own ideas to it, and the book is changed about once a year so the games don’t get old.
Among the games flight attendants have used is one that gives a prize to the person on board with the oldest penny. The prizes aren’t usually anything special — it’s whatever they can find on the plane, including luggage tags and extra snacks. But it’s basic psychology, again, that aids Southwest: People love to win. “People will do anything to compete,” Barrett says. “It doesn’t matter how silly the prize. ... It’s unbelievable what you can get grown adults to do.”
And Barrett trusts that Southwest is hiring people who know how to judge when it’s the right time to play a game.
“You have to know your audience,” Barrett says. “A bunch of businessmen taking a 6:30 a.m. flight from Dallas to Houston reading The Wall Street Journal, they don’t want you playing games with them. But on Friday afternoon, when it is the end of a long week and they are loosening their ties and having a cold beer and they are on their way home, then it is probably OK. You learn that sort of thing from your peers, and you learn it from their body language.”
Barrett also applauds efforts to diffuse difficult customer service situations with humor. For example, a ticket agent in Houston was faced with an upset customer claiming he was a big shot and entitled to special treatment. “He really was all over her about, ‘Don’t you know who I am?’” says Barrett. “So she got on the speaker and said, ‘Ladies and gentlemen, I have a problem. Maybe you can help. This gentlemen in the blue suit and green tie, he doesn’t know who he is. Can anybody help him?’ Eventually he was falling down laughing at it. You have to know if you can pull it off.”
And what if the customer doesn’t laugh? Barrett says she might visit with the employee and talk about what went wrong. But she is careful not to scold unless it is warranted, because she wants her employees to take chances. “I’m OK with failure as long as they learn from their mistakes,” Barrett says.
Not only does Southwest trust the employees’ judgment on the best ways to handle customers, Southwest considers those employees experts on how to save money. Its pilots know the shortest routes that save the most jet fuel. And, also recounted in the book “Nuts!,” a flight attendant once suggested the company stop buying special trash bags imprinted with the company logo for collecting trash at the end of a flight; use regular garbage bags instead. It saved Southwest thousands of dollars. And a computer technician told the airline he could build the computers it needed much more inexpensively than it could buy them, so the airline took him up on his offer.
Little things matter
What keeps employees wanting to work so hard for their employer is, in part, self-interest in keeping Southwest in business so that they can reap the rewards of ownership. But Southwest also works hard to take care of its employees, creating the kind of place they want to stay.
Barrett has a seven-employee internal customer care team that keeps track of every single employee’s birthday, significant anniversaries, the birth of children and other important events, and makes sure that cards go out for nearly every occasion. Barrett’s office sends out about 75,000 cards annually, and she knows it is meaningful to employees because she hears from them if she misses something.
“You really have to be good about it,” Barrett says.
What may be the key for Southwest is sincerity. Barrett says no company can sell employees on a fun family culture if it isn’t practiced, and believed in, from the very top down. The message from management has to be the same for both employees and customers, and it has to be honest and sincere. “We’ve always underpromised and overdelivered, and we’ve always kept it simple,” Barrett says. “We do not purport to be all things to all people, and we don’t make any bones about who we are and what we stand for. We talk openly, both internally and externally, from the same mouth, if you will. We don’t worry a lot about inconsistent messages because we don’t use them. Sometimes we’ve been ridiculed, and we’ve been the butt of many jokes, but it works for us.”
HOW TO REACH: Southwest Airlines Co., www.southwest.com