Retained surgical sponges in patients are one of the most frequent and most costly surgical errors among hospitals, as well as the most commonly reported.
Each year hospital infections add an estimated $30.5 billion to the nation’s hospital costs, according to the Committee to Reduce Infection Deaths. More than 100,000 deaths occur each year from preventable hospital infections, according to The Institute of Medicine. That number is more than the yearly deaths from AIDS, breast cancer and auto accidents combined.
David Palmer, president and CEO of Pittsburgh-based ClearCount Medical Solutions Inc., a medical device company focused on patient safety solutions, has developed technology called the SmartSponge System to track surgical sponges, making hospital surgeries more efficient and reducing extra costs.
Smart Business spoke to Palmer about how this technology can benefit hospitals nationwide.
Where did this idea come from?
The original idea wasn’t from us, it was actually an operating room nurse who back in the mid-’90s had seen this reconciliation angst on a recurring basis and thought there had to be a better way to do this. Along with her husband, they came up with the idea that radio frequency identification technologies would be a great tool to help solve the problem. In 2004, ClearCount came about.
What are the inefficiencies your product is addressing?
There is a study published that one in 1,500 intra-abdominal surgeries results in a retained object. That gives you the magnitude of the problem that we’re addressing. Currently today, there is a manual reconciliation process that is performed in every surgical procedure. The purpose of that reconciliation is to make sure that they account for the number of things at the beginning of the surgical case, throughout the case, but most importantly, at the end of the case, to prevent that one in 1,500 intra-abdominal surgery event from occurring.
What happens is, whenever there is a miscount that occurs, there is quite a bit of time spent in the operating room trying to correct that situation. They’re trying to find that missing sponge by maybe digging through the garbage or recounting to make sure they didn’t make an error. There are a lot of things that are happening that impact the efficiencies when the count is off. That’s what we really prevent. We automate what is now an error-prone manual process in the operating room. We address both the patient-safety side of it, and through our automation and accuracy, we add efficiency to the operating room.
How does it work?
There is a radio frequency identification chip which is comparable to a tic-tac and that is sewn into the surgical sponges when they are manufactured. Each sponge has a tag which contains a unique identifier on it that allows that sponge to be counted. Before a case begins, the sponges are quickly scanned into the counting process and all those tags are read and they establish an in-count and then during and after the case, the sponges are discarded and that’s where they are counted out and there’s a display screen that shows the ins and outs and how many are missing. It tells you not only how many sponges, but the type of sponge. Then there is a wand attached to the device which allows the nurse or the physician to scan the patient or use it in the room to find a sponge as well.
Are hospitals looking to use this technology?
It’s a very immature market right now. I think the level of awareness clearly increased over the past 12 to 18 months. That’s the awareness that technologies are available to help the problem. The problem has been well known and documented. The solutions have been less well known, and that’s the reason for the relatively underpenetrated market. What we’re noticing now is that many hospitals are actually proactively looking for technologies to help with this problem.
What are the advantages for hospitals to adopt this technology?
First off, we offer to our customers an additional financial backing and we have a special policy that stands behind our products in the event that a hospital would incur an incident while using our technology.
There is also the advantage of the efficiency in the operating room. Because our product is so easy to use and not only includes the ability for the nurses to get an accurate count, but in the event that there is a missing sponge, we have the ability to find it as well. We are the only technology that can both count sponges and detect them.
HOW TO REACH: ClearCount Medical Solutions Inc., (412) 931-7233 or www.clearcount.com
ClearCount Medical Solutions Quick Facts:
Founders: David Palmer and Steven Fleck.
Goal: Uses RFID technology to prevent medical errors and make hospitals more efficient.
A colleague of mine recalls the time he switched jobs and found himself having a tough time adjusting to a new corporate culture. He went from a culture of collegiality and warmth to one of competition and hard edges. Every time he walked into his new office, even the different smell of the building made his stomach sink as he was reminded of what he had left behind — people he enjoyed being around who supported each other in serving their clients.
You may have had a similar experience, though perhaps you prefer a driven, internally competitive culture. As a leader, one of your roles is to determine what type of culture you want to create, encourage and reinforce. In doing so, you need to address questions such as, “What type of culture will help us achieve the results we promise to our clients?”
In her book, “Animals Make Us Human: Creating the Best Life for Animals,” Temple Grandin offers some interesting observations about animal environments and how they can offer clues to creating better working environments for people.
Admittedly, using the findings of animal research may seem like a strange place to begin in trying to understand human needs in a corporate context. However, what Grandin calls to our attention is the fact that animals, such as our pets, have the same core emotional systems in their brains as we do. Here’s an example of what to do and what not to do in your business.
Do: Stimulate seeking, care and play
This is the basic impulse to search, investigate and make sense of the environment. Grandin describes it as a combination of constructs people usually think of as being different: “Wanting something really good, looking forward to getting something really good and curiosity.”
Within a corporate context, one might think of different ways to apply these. Wanting something could be connected to setting goals. What does an individual or group want to achieve? According to Grandin, having goals is one way to encourage mental and emotional well-being.
Grandin describes “looking forward” as the “Christmas emotion.” One could think of this in a corporate context as getting a bonus or having a pizza party or winning a trip to Hawaii. It’s something you anticipate or get excited about.
Curiosity is connected to seeking what is new. It’s wanting the bright, new and shiny thing. In today’s world, it’s often the latest technological development.
Suffice it to say that when employees believe that leaders care about them and the work you do for clients, the sense of well-being will be higher. When you add elements of fun in the workplace, these enhance our sense of belonging, as well.
Don’t: Allow rage, fear and panic
Let’s explore rage in some depth since it might be hard to easily translate this to a corporate setting in a way that is meaningful. In animals, rage occurs when they are captured and held immobile.
In an organizational setting, we see frustration when people micromanage us or exhibit behaviors characterized as that of “control freaks.” It’s that mild form of rage that sparks the slamming phone when someone crosses the line to tell us how to do our job.
Of course, any time there is fear, our brains can freeze up and we can shut down. We’ve all experienced that. And panic refers to our social attachment system. It’s what kicks in when employees feel a sense of loss when a beloved colleague or leader leaves. There can also be a sense of loss during a time of change as we move into the unknown, especially when, as leaders, we don’t prepare people well.
Regardless of the specifics of the culture you want to encourage, there is value in creating an environment that promotes seeking, care and play and minimizes rage, fear and panic. Making your organization a place that is aligned with what we know about human nature can only make it a more effective organization for you and your clients.
Andy Kanefield is the founder of Dialect, Inc. and co-author of “Uncommon Sense: One CEO’s Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity. To explore how to better align your culture, you may reach Andy at (314) 863-4400, by e-mail at email@example.com or at www.dialect.com
Gregory Ebel has operated in a business environment of uncertainty and constant change for too long. He has worked hard to be at the forefront of his industry, helping people understand the important factors and circumstances in his business.
Ebel, president and CEO of Spectra Energy Corp., a Fortune 500 natural gas infrastructure company, operates in a regulated industry where things might not always go his way. Ebel makes numerous trips to Washington D.C. to be face to face with the legislators who set regulations and helps them understand how Spectra and other energy companies do business to allow for regulations that are fair and sensible for all involved.
“In a regulated business, obviously, what’s going on in Washington D.C. and in lots of states from regulatory overreach is our biggest challenge as a business and the uncertainty that that creates for our ability to invest,” Ebel says. “The pipeline business is a business that invests for 15, 20, 25, 30 years at a time. When you’ve got regulatory uncertainty and you’re trying to determine how good of an investment it’s going to be over time, that makes it very difficult.”
Spectra Energy employs 5,500 people, had operating revenue of $4.94 billion in 2010 and has $26.7 billion in assets, so it is critical that Ebel and the other Spectra executives fight the regulations that unnecessarily harm the business.
Here’s how Ebel communicates and educates his employees, legislators and others in the industry to help improve the uncertain environment.
Engage people in your business
Spectra is currently building a pipeline into New Jersey and New York that is critical to reduce the cost of energy for the people in that region and bring in new gas sources.
“It is only 15 miles long, and it will, from the time we sign the contract with the customers to the time we put it into service, take four years and cost $1 billion,” Ebel says. “If it was allowed to start and we’re two years into this, it could produce more than 5,000 jobs today without government support. Yet it is very difficult. In a country that needs a lot of jobs, in a country that needs cheap energy, in a country that is looking for clean energy, it’s amazing to me and I think a lot of people in different industries, how long it takes to get approvals.”
While there is no desire to get away from following good procedures and good regulation, the issue is the cost of regulation is far outstripping the benefit.
“That’s the big concern and the fight we have to have with the regulators and try to do it in as positive a manner as possible,” he says. “The natural gas industry in North America is undergoing extraordinary growth thanks to technological developments that have given the country a 100-year supply of natural gas at a time that it needs domestic energy, at a time that it needs domestic jobs, at a time that it needs cleaner energy, and that is a huge, huge game changer for the industry. Being able to manage within that is what it’s all about right now.”
In order to overcome the challenges of regulations facing certain industries, companies and CEOs need to be willing to speak to people about their businesses and talk about the issues they are facing and ways to make things better.
“I would say we do three things: engage, engage, engage,” Ebel says. “There are three elements to that. We engage with our employees. We’ve spent a lot more time in Washington D.C. making sure that legislators understand our business and the third area of engagement is our industry groups. We belong to things like the Interstate Natural Gas Association or the American Gas Association. We make sure that either I directly or other executives in the company are trying to muster the forces within our industry groups to make sure we are delivering a consistent message from the industry to government to prevent this regulatory overreach.”
It is that constant education of what’s going on inside Spectra, around the country, and in the energy industry that helps how government handles regulation and how an entire industry can work more efficiently.
“That’s been really critical,” Ebel says. “Generally, CEOs do not like spending time in Washington or state capitals, but it’s critical now. You have to engage with politicians who frankly, don’t seem to have a lot of foresight when it comes to creating regulation or understanding what’s truly going on in the economy.”
Spectra has been spending a lot of time educating not only politicians but its own employees, as well.
“We have what we call an ambassador program so that we can ensure that our employees have the best facts and the best information about the natural gas business and the really exciting changes and the jobs that we produce in the country, and we run a lot of employees through that,” he says. “So whether they’re at a cocktail party or rotary club or women’s auxiliary, they can speak about the company and the industry.”
No matter how you educate your employees or politicians about your industry, one thing has to remain the same: your message.
“You have to be consistent with your message to employees and be consistent with your message to government,” he says. “You need to constantly repeat that message and you have to engage. CEOs don’t like spending a lot of time dealing with government because it doesn’t generate revenue, but it really can generate speed to market. Speed to market for us means building projects faster, on time and on budget to serve our customers and that can be grossly restricted by regulations. So there is value in it, although it’s hard to see. More and more CEOs and C-suite executives need to spend time with our politicians to tell their story. We all like to stay below the radar and deal with our businesses, but when government is so much in your face and has so much regulation, it becomes a real necessity to be successful.”
You don’t have to fight regulations on your own. It is a huge advantage to join industry associations that have similar goals.
“Other than a few companies like GE, Ford, Dow, Microsoft or Berkshire Hathaway, if those companies say something, it might get picked up, but most companies, of which there are thousands and thousands, need the bulk of similar type companies coming together,” Ebel says. “For us, the biggest one we’re involved with is the Interstate Natural Gas Association, which is a group of companies with similar interests in a similar industry that come together. Because of that heft and the number of employees you represent, the amount of gas pipelines you represent, and the energy sources that you represent, you can have a bigger impact by speaking with one voice and one consistent message.”
Ebel became chairman of the INGAA this past October. It’s these types of connections that can make a big difference when you need it.
“We need more and more CEOs to be involved in those industry associations if they’re going to be effective in Washington. If you show your 80 percent of the industry a position on a policy or regulation, that has real resonance whether it’s with the White House or Congress; that’s why those associations are important. That’s why we put time into them and money and I think more CEO’s need to use their industry groups to mobilize an entire industry to get positive change.”
When it comes to getting people and, most importantly, employees to understand anything that is going on in your business, it is critical that you communicate and communicate often.
“The biggest thing is our ambassador program, which is educating our employees on what our business does,” Ebel says. “It’s amazing when you have thousands of employees, how many, through no fault of their own, don’t know exactly what you do. Everybody’s got a job inside the company and it’s good that they stay focused on that, but giving them a whole picture of what you do, they can become very valuable and powerful advocates for you.”
To get your employees more involved in your company you can’t make things complicated or they will lose interest. You have to make things simple and straightforward.
“We have a phrase here called the KISS method — keep it simple, stupid,” Ebel says. “We say, ‘Keep it simple, Spectra.’ We try to communicate very short and specific goals and messages for the employees. Most employees would know that we are trying to lead in three areas: safety and reliability, customer responsiveness, and profitability. By the end of 2012, we want to be leading our industry. That has been incredible in terms of focusing employees both in the field and in office positions. I think most CEOs know this, but we sometimes forget. Keep things very simple and have three to five messages and goals that the employees across the entire company can pursue and connect with. That’s a pretty valuable tool.”
Getting your message out to your employees is critical, but that message has to also go out to legislators who regulate your industry in order to create change.
“Most CEOs, no matter what industry you’re in, there is some form of federal government regulation,” Ebel says. “If you’re a public company, it’s the SEC. If you’re a company like Spectra, it’s the Federal Energy Regulatory Commission, which determines how quick your projects get approved, which determines how quick you build them, which determines how quick you take capital and turn it into revenue and serve customers. That’s a huge issue for us.
“Safety is our key license to operate. Particularly in this environment post-BP and oil pipeline spills, all of those often lead to knee-jerk reactions by government. So make sure that you are telling government your story and your safety standard is critical in terms of avoiding unnecessary regulation and there again meeting those goals of safety reliability, customer responsiveness, and profitability.”
Spectra doesn’t just express opinions every so often to legislators, the company has people full-time in Washington D.C. to really make its presence felt.
“We have an office in Washington,” Ebel says. “We have various consultants in Washington and many of us spend time in Washington, not just with politicians, but regulatory bodies too making sure they’re informed about what we do and being an adviser of choice to the government so when they’re thinking about issues they pick up the phone and ask Spectra, ‘What do you think about this?’ And they know they’re going to get relatively unbiased opinions, that they’re going to get constructive views and they’re going to get information that will be helpful for them to make policies. The worst thing is when government makes policies without having all the facts.”
It’s not enough to make a phone call to a politician or write a letter. You have to meet with legislators face to face and treat them like they are another customer.
“You have to go see them,” Ebel says. “You have to spend time with them. You’ve got to try and understand where they are coming from. What political pressures are they under? What public pressures are they under? Regulators are just another form of customer. What are their needs? What are they trying to achieve? How do you help them achieve their goal while at the same time making sure you achieve your goal? Treat the regulators like you treat your customers and try to get win-win solutions. That doesn’t mean you don’t have disagreements, because you have disagreements with customers every once in a while, but making sure you understand what their view point is gets you a lot further down the trail.”
HOW TO REACH: Spectra Energy Corp., (713) 627-5400 or www.spectraenergy.com
- Engage people in your business
- Join associations and groups that have similar interests
- Communicate your company’s message in order to create change
The Ebel File
President and CEO
Spectra Energy Corp.
Born: Ottawa, Canada
Education: He received a BA from York University in Toronto, Canada, and is a graduate of the Advanced Management Program at the Harvard Business School.
What was your very first job, and what did that experience teach you?
My first job as a kid was a paper route. It taught me how to market and how to expand and how to make sure you bring in more revenue. That marketing to customers was a huge part of it.
Who is somebody you admire in business?
I’m fortunate to have an entire board of former CEOs. They have consistently over years provided great advice and between them, they have launched at least 20 CEOs.
What is your definition of success?
From a professional perspective, it’s seeing the families that work for Spectra continue to grow as individuals and be able to achieve their dreams for their families. If we can do that at Spectra safely, consistently and profitably, that’s success.
What is your favorite thing about the energy industry?
It’s constantly changing. I like that and the fact that it serves people quietly and consistently year in and year out.
What’s something that you are excited about for the future of energy?
I’m excited by the fact that North America has an opportunity now to achieve energy independence with a clean abundant fuel that just a few years ago we weren’t sure would be around as a foundational fuel.
“The teacher could be wrong. Think for yourselves.”
A sign with these words used to be placed in British classrooms. It is an interesting idea that any school would remind their students to challenge their teacher’s authority of the material they are teaching.
There are many trappings you can fall into when trying to think thoroughly and knowledgably about a subject or plan. Becoming entrapped in thoughtless thinking or deluded ways of thinking can cause great plans to falter and subpar plans to be pursued with gusto.
For example, when the Japanese bombed Pearl Harbor, many Japanese leaders believed that an attack on American soil would dishearten the American people and cause them to not want to enter World War II. Very few dreamed that the opposite could be true and the Pearl Harbor attacks would galvanize the American spirit and war effort and perhaps cause the United States to enter the war sooner than they might have originally.
There are six particular follies of thinking that have a way of easing into boardrooms, informal meetings and organizations. Recognizing these six follies is the most important step to eliminating them and achieving clear and informed decision-making. Do you make any of these mistakes?
Overgeneralization is probably the most common, most seductive and potentially most dangerous of all of these fallacies. Aristotle was well aware of the dangers of overgeneralization, calling it “reasoning by example,” meaning too few examples or not enough to specificity. While generalization is an important reasoning skill, overgeneralization is a danger.
Attacking the person instead of his logic or position is a very common trap — especially in legal issues or American politics. If you can’t beat someone else’s argument, attack and abuse the person who advances it.
This fallacy, meaning “thou also” or “you are another,” consists of rotating a charge upon your accuser. Instead of addressing an issue, an arguer will launch an irrelevant counter-attack.
The formal term “post hoc ergo propter hoc” means when one event precedes another event in time, the first is assumed to be the cause of the second. This fallacy can be seen prominently in medical history. For example, malaria baffled scientists for many centuries. It was observed that those who went out at night developed it, so it was wrongly reasoned that malaria was caused by night air.
This fallacy of false analogies or insufficient reasons is particularly troublesome because analogies are quite helpful. However, no analogy can conclusively prove anything. The best an analogy can do is help bring an event or topic to the magnitude of the ordinary experience. The fallacy occurs when we use an analogy in lieu of proof.
This trap, the appeal to revered authority, is embodied by our starting thought encouraging students to think for themselves. Teachers and authority figures may provide great thoughts and reinforce some ideas, but the danger here is when one ceases to think or analyze situations for themselves.
Right thinking, thinking right
So how do you think right? Simple. Observe the situation. Listen and question others.
Analyze the pros and cons. Think for yourself. Make a decision and act. The problem with this lies in the analysis. For it to lead to right thinking, right decision-making and right action you need to insert the following step.
Stop and take a deep breath. Disconnect from all media — TV, radio, the Internet, your mobile phone. Everything. Find a private, quiet spot.
If you do it right, you will hear an odd sound. It’s called silence. It’s what you need for a right-thinking analysis. Envelop yourself in that odd sound called silence. And eliminate the six meretricious follies of thoughtless thinking to achieve clear and informed decision-making. Right thinking is thinking right. There is only one way to do that; think for yourself.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. For more info visit tomnies.cincom.com/about/
Last May, John Sensiba was elected to his second term as managing partner at Sensiba San Filippo LLP, a CPA firm with approximately 100 employees. Having been in the role for a little more than three years now, Sensiba has come a long way since he first transitioned from the practice side of the business to take the top spot.
“It has been a dramatic change,” he says.
One of the first lessons Sensiba learned was that he needed to be more confident in the strategic decisions he made and recommended to the firm. It was tempting to be overly participative in decision-making, but by taking a more laissez faire approach in everyday decisions about activities and investments, he realized he was freed to focus more on setting policy and strategy.
“In a professional services firm, the more that you involve the partners in those decisions, usually the better, because they are a bunch of smart people,” he says. “But sometimes you can do it to the point of distraction. Then you might wonder, ‘Why do you have a managing partner if the decisions are all made by a group?’”
While a leader should be able to make some decisions without too much input, Sensiba says you need a way to gain honest feedback on your choices. That becomes increasingly difficult the higher you get in an organization.
“Regardless of the fact that you know folks and you feel like you are approachable, you get different and filtered feedback when you are in the top position in an organization,” Sensiba says.
He now frequently looks outside of the organization to get critical feedback about his leadership and the business from other leaders.
“I learn a lot just talking to people who have been in different roles not within the profession but just in a variety of different businesses or nonprofit enterprises,” he says.
“It may not be the kind of praise that most of us would like to hear all of the time, but it can be really productive to hear things from somebody, and you change your behavior.”
That communication goes both ways. Sensiba found out the hard way that as a leader there is no such thing as overcommunication.
When he first took over as managing partner, he would very carefully craft communications and messages to the firm and for meetings only to have people approach him later on and be frustrated that they hadn’t received the information.
“I thought, ‘Ugh, can I go back to your e-mail for you and show you where I sent it to you?’” Sensiba says. “You get that frustration and sometimes that would come through in my communication.”
Sensiba knew it was damaging for the culture to show frustration with his people, but he admits it was a good lesson to learn early on. He shared his irritation with one of the other managing partners about how his efforts to communicate seemed to be futile.
“He said, ‘If for some reason they didn’t hear it, it’s still your fault,’” Sensiba says. “‘If you said it 10 times, maybe you need to say it 11, but the market is never wrong. Your people are never wrong.”
If people are not getting the message, you can’t blame them. As a leader you need to look at the way you are communicating and do something differently.
“You just cannot put the message out there enough,” Sensiba says.
That goes for communicating day-to-day info and strategy, but also communicating the everyday vision to inspire future leaders of your business. That has been the key to maintaining the firm’s 92 percent client-retention rate.
“My role is to continue to build leaders at every level within the firm — to convince people that you lead from the day you start in a business — you are a leader,” he says.
How to reach: Sensiba San Filippo LLP, www.ssfllp.com or (408) 286-7780
For John Sensiba, retaining clients and generating new business at Sensiba San Filippo LLP is a matter of executing a simple and popular principle.
“It goes back to the golden rule,” says Sensiba, the firm’s managing partner. “Treat people the way you’d like to be treated.”
How does this apply to business? Sensiba gives the example of going to a mechanic to work on your car’s transmission, only to find out that it was your fuel injectors that needed work. Even though the mechanic might do an OK job, it’s not that person’s specialty.
“He might say, ‘You know what, it’s your fuel injection and I’ll work on that for you.’” Sensiba says.
“But I would have much more respect for that mechanic if he said, ‘It is your fuel injection and here is my business partner who does nothing but fuel injection, and he is the guy that you need to talk to.’”
While you may lose some business referring customers elsewhere, you earn their trust by showing them that you are looking out for their best interests.
“If you come to me with something that we don’t have the expertise for or we’re not passionate about it, we’ll tell you ‘Call my friend from X, Y and Z firm. They really focus on that. They will do a great job.’” Sensiba says. “Because that is what we would like people to do for us.
“Our growth is built on a very stable client base that tends to stay with us and refer us business. It’s a very good upward spiral when you do good things for people.”
How to reach: Sensiba San Filippo LLP, www.ssfllp.com or (408) 286-7780
William Wang believes in the power of optimism. As Vizio Inc. endured the darkest days of the recession, Wang continued to believe that the brainpower of his 340 employees would be the ultimate separator that would allow his company to not only survive the recession but flourish after its end.
With that in mind, Wang has been relentless about creating a positive mindset throughout his company, starting with the example he sets.
“I believe that what goes around is what comes around,” says the founder and CEO of Vizio, a consumer electronics manufacturer. “I feel that I’m innovative as a leader, and the rest of the company follows me. Innovation isn’t just about the products we make, it’s about the way we operate. So we get our suppliers to move faster, we get our trucks to pick up merchandise faster, all the little details here and there. We’re a young company, so innovation is actually a pretty common thing within our walls.”
Wang founded Vizio in 2002, and has grown it to a company that generated approximately $3 billion in revenue during 2010. To keep Vizio’s people focused on what’s next for the company, Wang needed to engage his employees through many different avenues of communication, continually spread the basic principles of the company’s values and mission, and continually keep his long-range vision for the company at the front of everyone’s mind.
“I have to act as the cheerleader for the company,” Wang says. “There is nothing we can do about turning the economy around, so we’re going to focus on what we can do within the company instead of changing the economy around. Let’s just focus on the things we can improve ourselves, and remember that we have a good track record. If we keep on doing the same things we’ve done before, we can counteract a lot of the negative news in the environment.”
Set a common goal
If you want to develop a central focus within your organization, you need to form a central goal and put it in front of each person. No matter what task each employee performs within your organizational structure, they are helping the company achieve its goal.
In Vizio’s case, Wang wanted the innovative power of his employees leveraged to create products that are not just on the leading edge of technology, but affordable — and produced in an efficient manner that reduces process waste and gets products to market as quickly and simply as possible.
“Our business was fortunate in that it did not get impacted as much as some of our other competitors by the recession, and affordability was something that was of an even stronger focus as we accommodated the weaker demand in the consumer electronics sector,” Wang says. “That’s why our business is still hanging in there despite the economy, due to our strategy to make products affordable. For example, we recently launched a tablet computer, and instead of fighting with companies like Apple, we came out with a product in the $300 price range. Hopefully by doing that, we’re trying to create traction for Vizio in a new marketplace.”
To Wang, efficiency in the production process is another form of innovation that ultimately affects the consumer. The end user might never see the process by which a product is conceived, tested, produced and brought to market, but efficiency plays a large role in Vizio’s ability to offer electronics at prices below many of their competitors.
“We still have maintained our strategy the same way, regardless of how weak the economy has been,” he says. “In a weaker economy, you have to be super-efficient to be able to pass the savings on to the consumer. That’s how you grab market share away from your weaker competitors.”
Wang’s plan for recession survival is based on basic principles that just about every manufacturing business has employed in some form. Streamline operations and try to get your product to marketplace with a competitive price attached to it. That in and of itself isn’t where you need to expend most of your energy as a leader. Where you need to do most of your work is in your capacity as a communicator.
At Vizio, Wang believes the best innovation comes from employees who realize that they are, in some way, a part of the company’s brain trust. They might not be in the boardroom making large-scale, strategic decisions, but they are constantly challenged to come up with ideas — new products, new spins on established products, new processes, new policies.
All of the ideas can’t be used, but the bigger issue is employee engagement. Your people need to be enabled to think for themselves. For Wang, it comes back to setting the example himself, and getting others to follow his example. Wang can’t afford to communicate simply to hear himself talk. The company won’t advance if he is the only person doing the pulling. Wang needs other employees to provide momentum, as well, by facilitating their own communication opportunities.
“It’s all about teamwork,” he says. “In order to build a team, you can’t just tell people what to do. At some companies, the leadership will tell people, ‘Go do this and do that.’ But that doesn’t always work. People have to be able to know each other. So it is critical in my opinion to have that lateral communication. I encourage that by trying to do it a lot. I walk around the building all the time and try to talk to as many people as I can. It still helps that we only have 340 people. It used to be extremely easy for us, because when you have 30 people, you know everyone by their first name. But we still try to spend a lot of time sharing ideas.”
Wang believes that setting the example for engaged, motivated employees isn’t something you can talk about. It’s something you have to do. The only way employees will follow the path you’ve laid down is if they see it demonstrated in actions instead of words.
“I don’t plan for communication,” Wang says. “I just do it. I like to communicate with everybody. I think it’s something you have to do and make part of your culture. It’s the communication age, you have e-mail — though I really don’t like e-mail because it’s a one-way form of communication — and you also have the opportunity to call each other, get out into the office and talk with each other. And especially if you are in a smaller company, you should take the opportunity to walk around and talk to people.”
Be a coach
The best CEOs are often like the best sports coaches. They set the goals, they forge a path to meet those goals, and they teach the principles that will allow their charges to walk the path. Beyond that, you have to trust that the lessons have taken root and your people will take the principles that you have taught and run toward the goal with them.
In other words, you have to delegate responsibility and accountability to the appropriate level. In Vizio’s innovation-centered culture, that means Wang sets the parameters within which employees can innovate but tries to exert very little control over the process beyond that.
“I want to be a coach,” Wang says. “I don’t want to be a player. If every once in a while someone goes off in a wrong direction, I have to point them back to the way I see fit. But once you decide to delegate, you don’t bring that responsibility back. I don’t spend a lot of time challenging them on what to do.”
If you are in Wang’s position and have either founded your company or been a key player since early in the company’s history, you might be used to certain processes. But as the company grows, you should learn to rein that in and, as much as possible, allow employees to come up with their own ideas and their own processes for trying out those ideas. As long as they aren’t innovating their way off into left field, away from your company’s goals and mission, you should allow room for the mistakes and trial by error that is inherent to the innovation process.
“I used to be more of a micromanager, but I don’t do that anymore,” Wang says. “I found it is a lot more effective if I find capable and willing people to help me execute on the goals of the organization. I don’t believe I can do it all, so I focus more on the vision and delegate the details to the great group of people that we have here.”
Your main roles in the delegation process are to hold your direct reports accountable for reaching the goals that have been established and to ensure that the goals are realistic and reachable. It is not an exact science, but it involves setting a balance between where you want to grow the company and the capabilities of your people. You want goals that are aggressive, yet can be attained without stretching your manpower and resources to the breaking point.
“Everybody has to have a common goal, but the goal has to be reachable,” Wang says. “I see a lot of CEOs set out in pursuit of impossible goals that their people will have a hard time reaching. You have to make sure the goals are achievable, which is why our goals as a company are approved by myself and my top management.”
Wang also points to incentivization as a way to ensure that goals are reached. If you put an extensive rewards program in place that include bonuses, recognition and other gifts, you will make the goals of your organization more personal for your employees.
It’s not wrong to ask your employees to be motivated by serving the greater good of moving the company forward, but personal gain is still a powerful motivator in just about any company.
“Ultimately, we’re in a business situation, so the rewards for us are going to come in the form of money, bonuses and profit sharing,” Wang says. “We do quarterly profit sharing, so the more the company makes, the more the individual team members receive. I believe that when people come to work, the single biggest reason is to make more money — that, and to fulfill their desire for achievement.”
To get the most out of your employees, you need to strike a balance between motivating them through personal gain and motivating them through serving the greater good of improving the company’s outlook. Wang says that stimulating innovation has elements of incentivizing, promoting employees to greater levels of responsibility and large-scale goal-setting.
“Money might be the No. 1 motivation for employees, but it doesn’t mean it’s the number one motivation for them to do their jobs right,” he says. “Our goal of being No. 1 in the U.S. in our industry is a great motivator, not only to give people a reason to work hard, but also to associate themselves with a company that is growing in spite of the economy.
“But it still starts with the person at the top. You have to be willing to give them an incentive first before the positive reinforcement takes place. People have to know that I want to share in our success, then people will work hard and want to come to work. If they have coworkers who share the same values, that is really how you start to get a family-type atmosphere in the workplace.”
How to reach: Vizio Inc., (949) 428-2525 or www.vizio.com
The Wang file
Born: Taipei, Taiwan
Education: Electrical engineering degree from the University of Southern California
What is the best business lesson you’ve learned?
My best lesson is to learn how to delegate, which I learned through years of experience as an entrepreneur.
What traits or skills are essential for a business leader?
The business leader has to be inspirational, has to have charisma and provide people with hope, and they have to be willing to share with everybody. A business leader has to be generous.
What is your definition of success?
Being in a position where you can come to work every morning with a smile on your face.
While many famous quotations turn out to be apocryphal, there is one attributed to Albert Einstein that I like even if he didn’t actually say it. It went something like this: “If I had an hour to save the world, I would spend 59 minutes defining the problem and one minute finding the solution.”
Whether you are saving the world or just responsible for designing a new product or service, that allocation of time spent thinking versus doing still pertains. So I like to reshape Einstein’s attributed quip this way: If you have an hour to create a product or service, spend 59 minutes figuring out how it will elegantly solve a customer’s problem, then spend a minute designing it.
Designing new products and services for customers takes a great deal of courage. Those of us who are tasked with that responsibility know that we are risking our reputations, and generally a great deal of our company’s money, recommending a particular design. But there are some simple ways to improve our odds of producing a design that will be a success.
First, remember that great design springs from creativity. Your goal is to delight your end user. Yes, I said delight. Your goal is not merely to meet a need. Your goal is to so gracefully address a need that you delight your customer. This requires creativity. And according to at least one expert on the subject, design creativity requires four essential qualities: empathy, intuition, imagination and idealism. Now, these probably don’t sound like qualities you will find in the average engineer — but they are critical to creative thinking. So, as you bring together your team to develop products and services that elegantly solve your customers’ problem or problems, be sure that at least some members of that group are empathetic, intuitive, imaginative and idealistic people. And listen carefully to what they say because their input is as close as you are likely to get to hearing the voice of your customer within your corporate office.
In speaking of that, we frequently are tempted to seek the opinions of our customers when designing a new product, but unless the product or service you are designing is an improvement to or an extension of an existing one, this generally is not a good way to find creativity.
Be bold. You know what is technologically possible for your company and how to best leverage that technology.
Second, keep in mind the words of one of my strategic planning mentors: Strategy is less about what you choose to do than what you choose not to do. When it comes to designing products and services, this is better stated slightly differently: Great design is less about how much your product or service does than it is about how simply it does it. This is sometimes called “the complexity of simplicity” and it frequently is described by reference to the iPod.
I prefer to point to an earlier creator of beautiful and simple designs that performed incredibly complex functions in a way that delighted customers. Danish radio and TV manufacturer Bang & Olufsen’s elimination of nearly all buttons and knobs from their equipment made us first realize that, in the area of design, less is almost always more.
Perhaps your life and designs are a little more ordinary than those of late visionaries Steve Jobs and Peter Bang. But focusing on creativity as the driver of innovation is entirely relevant to every design process. Whether you are creating a new handle for a kitchen peeler or revamping the system screens used by your company’s call center personnel, creativity and elegance mark the difference between useful designs and delightful designs.
Frank Napolitano is the CEO of GlobalFit. Before joining GlobalFit in 2006, he ran strategic planning for the largest gym chain in the Northeast. Napolitano has held corporate leadership roles since 1984, including CEO positions at five different companies. Before that, he practiced law and public accounting with two national firms. Reach him at firstname.lastname@example.org.
Mergers are difficult when you conduct them from start to finish. They can be even more challenging if you find yourself in Robert Bazemore’s position.
Bazemore became the president of Centocor Ortho Biotech in March 2010, about a year after the company was formed from the merger of prescription drug developers Centocor and Ortho Biotech. Both companies were primarily driven by one drug line each — Centocor by Remicade, which is used to treat autoimmune disorders, and Ortho by Procrit, which is used to treat anemia in patients with kidney disorders.
The newly combined company was positioning itself to launch a new series of drugs in the immunology and oncology arenas, meaning a more diverse array of products and the subsequent potential for high growth. But it also presented a new problem for Bazemore.
“Our business was changing pretty dramatically, and the organization had changed because we brought these two companies together,” Bazemore says. “We recognized that we needed to define for the future how we were going to continue to sustain the growth of a business that had been growing at double digit rates for the past 13 years.”
In June, Centocor Ortho Biotech — a subsidiary of Johnson & Johnson — was renamed Janssen Biotech Inc. and added to Johnson & Johnson’s portfolio of Janssen pharmaceutical companies. The name change has served to underscore the direction in which Bazemore wanted to take the company. He wanted to take steps toward a total unification of all the company’s resources and focus the work force of 1,100 on the welfare of the whole organization.
In short, Bazemore wanted a healthy company, not an underperforming company with healthy product brands.
“I realized it would have been easy, considering we were going through these transitions and launching new brands, to allow our whole company focus to move toward the brands and how to make the brands successful,” he says. “My concern was, if you step back and do that, is anybody looking at the long-term health of the business? We could have gotten to a point where the brands were doing great, the launches are great, but no one is paying attention to the fact that we’re not growing over the long term at the rate we wanted or expanding into the areas where we really had an opportunity.”
Bazemore had to seize control of the situation, making in-flight adjustments to the company’s culture to ensure that the values and goals he and his leadership team wanted to emphasize were the values and goals at the forefront of the company’s collective consciousness.
Lead from the front
Bazemore says a company leader needs to play three roles in piloting their business through a time of transition: You need to define your company’s growth aspiration, you need to shape the company’s business strategy, and you need to define and shape the culture that supports the company’s goals.
“The growth aspiration is the answer to the question of what it is you want to be,” Bazemore says. “What are you holding the organization accountable for? If you don’t set that, you will get to wherever your product takes you, but that might not necessarily be the aspiration you have for the company or the employees. The business strategy, in our case, means therapeutic areas of strategy that we have decided to pursue in both the areas of immunology and oncology. But it doesn’t stop there, because the leader has to be willing to personally champion those ideas and initiatives that are most critical to achieving your strategies.”
The third element — culture — might be the hardest to achieve. A company’s culture needs to be rooted in a long-term philosophy that is designed with less concern for immediate results and more concern for the company’s health over the long haul.
“It is perhaps the most important role of the three,” Bazemore says. “A company’s culture will evolve either intentionally or unintentionally, and it will either strengthen your ability to achieve your goals or damage your ability to achieve your goals. The leader has to be proactive in shaping the culture in a way that supports the vision.”
It’s why, upon taking the job, Bazemore made culture an immediate priority. Bazemore and his leadership team hit the road, performing town-hall-style meetings throughout every region in the company’s footprint. He talked with employees about the company’s finances, future brand growth and some of the other areas of interest and concern for employees.
The meetings were meant to address the surface issues. But Bazemore and his team had a deeper motive. He wanted to create an ongoing dialogue that would help build trust among all levels and geographies in the company, and subsequently aid in refocusing and strengthening the culture.
“This was all about how to build a sustainable culture that would make us a healthy company for the long term,” he says. “We felt like there were parts of the culture that we really needed to build on in order to make the company a success.”
Once the round of town halls were complete, Bazemore and his leadership team gathered all of the information they had accumulated and took it to an off-site management-level meeting, where they analyzed the input and began to structure a series of pillars around which the culture and vision for the company would be constructed moving forward.
The end product was what Bazemore calls the “four big bets.”
“They define four things,” he says. “They define how we’ll select and develop our employees. They define how we’ll serve the needs of our customers. They define how we’ll produce unexpected growth from the two franchises that we work in, and they define how we’ll behave as leaders in the markets where we do work — not follow what other companies do, but actually act and play as a market leader.”
Once the four big bets were organized in rough draft form, Bazemore and his leadership team went back to the employees, holding a series of meetings Bazemore dubbed “quest meetings.” He presented the objectives for the company and the goal each objective was meant to accomplish. Bazemore then listened to round after round of feedback.
“We wanted feedback on whether we had gotten this right,” Bazemore says. “Were these the four things that would be really critical to the success of Janssen Biotech? The response back was overwhelming. I think, first of all, people were really delighted that we had created the four areas of focus. With a company as large and complex as ours, focus is very important. If you don’t find three or four things that you want to focus on, you really don’t have much of a focus at all. You have to narrow it down. But I think people also agreed that those four areas were the right four areas to focus.”
Leadership frequently checks in on the organization’s progress with regard to the four big bets. Bazemore and his team review the objectives and what has been accomplished relative to them. It is an opportunity for the Janssen Biotech leadership to take a snapshot of the company as a whole, and learn on the job.
“We’ll check in and ask ourselves what we have learned along the way, because these objectives are still relatively new for us as a company,” Bazemore says. “We’ll talk about where we’ve been successful, what those successes have yielded and what we want to accomplish for the rest of the year. They’re very open conversations that we have as a leadership team, and about how we’re doing against those objectives. We come back to the fact that the four big bets aren’t a short-term initiative for us. We recognize that in some cases, it’s going to take a longer term for us to fully realize the vision.
“The other thing that is big about this is now, since we are a part of the Janssen family, these four big bets are also tied directly into the strategic imperatives for Janssen Pharmaceuticals. So we create absolutely no confusion about what the priorities are.”
Build from within
As the leader of the company, you set the wheels in motion regarding the future direction of the organization. But you can only generate so much momentum by yourself. Which is why, on top of promoting and reviewing the cultural imperatives himself, Bazemore also emphasizes the need to hire and groom more cultural change agents throughout the managerial ranks of the Janssen Biotech system.
“One of the things I’ve learned as a leader is that one of the most important decisions you will make is regarding the people you select to help run your business,” Bazemore says. “It is one of the most important areas in which you can spend time, because your people will set the direction for their teams and they are the ones responsible for hiring the leaders that will run the individual parts of the business.”
Bazemore has hired about 60 percent of his managerial-level team members, which has given him an opportunity to construct a team of people who embody the traits that he wants emphasized in the Janssen Biotech culture.
“I look for, in terms of criteria in hiring new members of my leadership team, diverse business experience,” he says. “The U.S. health care environment is changing faster than I’ve ever seen, and some of the issues I’ve never dealt with before. That’s why I’ve seen the value in hiring people who have experience that is complementary to those who are already on my team.”
To find the candidates with which you’ll be able to build the best possible leadership team, you need to not only find the best possible resumes, but also ask the best possible questions in the interview process.
“When I’m asking questions in an interview, I’m not only looking for results, I’m looking for how they got to those results,” Bazemore says. “I’m looking for the process they followed. That tells me about their judgment, their process for thinking through things, for putting together lots and lots of information to get to a decision. Do they have a standard way of sifting through lots of complex information and quickly get to a point where they feel comfortable making a decision?”
Bazemore’s cultural principles, and his largely self-constructed leadership team, have helped Janssen Biotech remain a key cog in the Johnson & Johnson machine, rolling out an assortment of new drugs in the immunology and oncology fields. However, building a leadership team that can sustain and promote a culture isn’t a one-time task. Even a reliable leadership team of self-starters needs maintenance — and some people will inevitably depart for other positions, so you will need to find replacements.
Bazemore says you need to make your leadership team an area of focus from your first day on the job, and always continue to make it a priority.
“It has to be an area of focus for any leader,” Bazemore says. “You can’t short-change yourself on that. One of the key things I’ve learned is that no leader, no matter how well-intentioned they are, can run an organization by themselves, and expect to remain healthy and growing. You need a leadership team around you that shares your vision and your passion, and has the skills and abilities to run that business. Because if you’re not there and key decisions still need to be made, you want to know those decisions will be made in a way that will benefit the business.”
How to reach: Janssen Biotech Inc., (800) 526-7736 or www.janssenbiotech.com
The Bazemore file
Born: Savannah, Ga.
Education: B.S. in biochemistry, University of Georgia; MBA, Tulane University
First job: I grew up on a farm, so my first job was everything that goes along with working on a family farm.
What is the best business lesson you have learned?
That a leader has to have a vision and passion for what they do, and the trust of the people around them. With all of that, you can accomplish amazing things.
What traits or skills are essential for a leader?
After having gone through selecting a number of team members, I’ve found that the ability to develop a good alliance with other team members is critical. Those alliances will help you get through the worst crises. You also have to have integrity. There is simply no substitute for your integrity, and it will follow you no matter the circumstance.
What is your definition of success?
For me, it’s the ability to have a noticeable, positive impact while doing something you enjoy.
Every CEO would agree that a fully engaged and motivated work force translates to high company productivity and is more likely to quickly develop creative solutions to issues that threaten to derail a company’s progress toward its defined goals. It is also true that a disengaged or demotivated workforce can really put a damper on a company’s performance.
What are the keys to keeping a work force motivated and, on the flip side, to recognizing and avoiding behaviors and actions that might prove demotivating to employees?
In my experience, sensitive, compassionate, high integrity leadership virtually assures that a work force will remain highly motivated, even when times are tough. Such leaders routinely communicate both good and bad news to the organization in a timely manner, make sure that they are especially visible to employees and clearly in control during any company or industry crisis, and are careful to provide the rationale behind any business decision.
In many ways, the leadership practices I’ve just described are not only motivating because people feel informed and confident in their management but also head off one of the leading causes of discontent among employees — the spreading of rumors. It appears to be human nature that when people are uninformed they assume the worst, so frequent and honest communication is an important weapon in management’s arsenal.
Leaders earn the respect of subordinates when they consistently act in a way that serves these critical employee needs while failure to serve these needs is a sure way to destroy motivation. Note that I said “consistently act.”
I’ve learned that people interpret what you say by observing what you do. Modeling the behaviors that you say you value and are important to the company is the best definition I can come up with for “walking the talk.”
Any modern-day leader understands the importance of treating people with respect and can probably list the things that he or she does in that regard. But can he or she define “meaningful work” in the way that their subordinates would define the term? They would probably define it as job responsibilities that directly support the achievement of measureable team, or department goals that are aligned with the goals of the company. Employees feel valued when they are recognized for their contribution toward the achievement of those goals. Having mastered the methods and behaviors that serve these first-order critical needs, leaders can further engage and motivate employees in the following ways:
- By providing education and training in problem solving and process improvement tools and methods at non-traditional levels of the organization, and
- By encouraging and supporting risk-taking at levels of the organization below those where decisions are traditionally made.
In the first case, employees appreciate the investment in the development of their skills and view the investment as a validation of the value they bring to the organization. In the second case, empowering employees to take risks can unleash a level of creativity and employee commitment sufficient to enable an organization to outrun its competitors. There is a danger, however that these initiatives can backfire resulting in a workforce that becomes disenchanted and risk averse if the organization is not fully convinced of their benefits and fails to properly support their implementation.
It is the responsibility of the CEO to ensure that his or her management team models the behaviors that will result in a fully engaged and motivated work force. Although not every CEO is cut out to be a great communicator, he or she should be able to build an employee relations staff, as well as a communications department, to both keep his or her finger on the pulse of the organization and to assure that employee communication is timely, widespread and relevant.
George Perry has more than 40 years of experience in engineering, operations and executive management. He retired as president and CEO of Yazaki North America Inc. in December 2009. Reach him at email@example.com.
Acquisitions left Omnova Solutions Inc. with a fragmented IT platform composed of 27 disparate systems several years ago, complicating communications for the emulsion polymer specialty chemicals and decorative and functional services company.
Omnova decided to standardize and streamline its platform using lean Six Sigma in its process improvement efforts, eventually choosing a new platform with SAP. This change cut costs and improved communications for the 2,300 employees among its facilities in America, Europe and Asia.
Chairman, President and CEO Kevin McMullen served as a panelist at the October Smart Business Toolbox Series presented by Hyland Software, speaking about lean manufacturing initiatives to drive success in a global economy. Below is an excerpt from the Q&A session.
What are keys for operational efficiencies?
It starts with a culture that is embedded with continuous improvement mentality. In everything you do, there’s an opportunity to improve it tomorrow better than you’re doing today. If you don’t have that as a culture, then a lot of the other things fall short of the mark.
Secondly, you clearly need to have solid leadership and solid capability for people to work on solving problems and improving process.
Third, it’s a framework. We chose lean Six Sigma as our primary framework for problem solving and operational excellence. It allows us to get a lot of people involved — the people that are closest to the action who know the most about any individual process.
What are the initial steps that need to be taken to get initiatives off the ground?
Are you really defining the problem that needs to be solved? Or are you trying to solve a symptom of the problem? Getting to the root causes of what the problem really is, and getting a very clear definition of the problem that you’re going to charter a team to go solve, is job one. You need to involve a lot of people to get a lot of different perspectives on that to ensure you have the right problem.
One technique in lean Six Sigma is called the ‘five whys.’ We don’t do anything until we’ve asked the question ‘Why?’ five times to try to get to root cause.
After that, it’s making sure that you have the right team in place and the right resources in place to do it. Make sure that they understand what the business case is for — ‘Why is this worth me spending my time doing this? What are we going to achieve if Fraunhofer F we’re wildly successful?’ — so that everyone who’s involved in it understands what the goal is.
Who decides what the problem and goals are?
We will have top-down ideas of areas we think that there’s opportunity. We will then charter a team to study that and potentially redefine the problem but working in that area.
We will have a framework of what we think the improvement can be. We’ll ask the team as they are getting chartered and getting set up to reaffirm that ‘Yes, in fact, after we looked at this, we believe that this is the right problem to solve. Here are the metrics we think we should be held accountable for.’
Surprisingly enough, the metrics that they come up with are frequently tougher than the metrics we had from our top-down standpoint, because they’re closer to the issue and they believe that they can achieve things at certain rates.
How do you get buy-in for initiatives?
Once you really nail what the issue is and what the impact will be on your enterprise if you’re able to go from here to there, once you get that and you are able to communicate that effectively to people, all of a sudden buy-in becomes a lot easier.
I’ve seen a lot of situations with organizations where someone is promoting going one direction or another and they don’t really have a strong business case. People are questioning, ‘Why do we want to do that? Is this motivated out of some other reason?’
The biggest detractors of saying, ‘There’s no way we should do that,’ you want to get them involved. Maybe they have a great idea that’s actually going to help improve what you’re going to do from A to B.
If they’re involved in coming up with the answer, they’re very enthusiastic about seeing it through.