The Weekends Only Furniture Outlet that you see today isn’t the same one that CEO Thomas E. Phillips Jr. saw when he did a thorough assessment of the company in 2005.
In the six years leading up to 2004, the company had grown from three employees to 300 through several store openings, but in 2004, the business had an unprecedented loss. He found the company in financial turmoil and he was also at personal financial risk. So Phillips assessed the structural deficiencies that had been masked by the company’s earlier growth. He found troubling symptoms unconscious leadership, lack of purpose, silos that prevented teaming, widespread lack of engagement, negativity and fear, and a pervasive lack of trust.
He knew he had to act. He knew before he could change the business that he had to change its culture, and to change the culture, you have to change its leadership. He brought in an outside consulting firm to conduct structured assessments on himself and his leadership team and a 360-degree evaluation to identify blind spots. As a result of their findings, he recast his leadership team and began developing himself and the vision for the company.
He created and rolled out the mission and values that weave through everything in the company today. This new culture has resulted in growth every year, totaling 47 percent since 2004. Under Phillips’ leadership, Weekends Only has become an agent for human growth, formation and happiness and a sustainable organization of value. Today, the company, which specializes in discount pricing and is only open on Fridays, Saturdays and Sundays, is recognized as the No. 1 home furnishings retailer in the market, and his goal is to become a top 50 home furnishings retailer in the nation.
How to reach: Weekends Only Furniture Outlet, (314) 447-1500 or www.weekendsonly.com
Since 1999, Jeffrey Stroburg has served as CEO of one of the nation’s largest farmer-owned cooperatives, West Central, the predecessor to Renewable Energy Group.
Stroburg’s strength lies with his innate curiosity and ability to frame issues in group brainstorming sessions that foster massive idea trades. He surrounds himself with good people and asks for their input.
His thinking manifested itself in the form of Renewable Energy Group. With a growing biodiesel business, the West Central leader was faced with creating a strategic model for a business without a proven concept in an unproven industry. Based on market data and internal expertise, West Central formed the nation’s largest fully integrated biodiesel company, REG, where Stroburg serves as chairman and CEO.
Key to the REG business model is leveraging internal core competencies while building external partnerships. Under Stroburg’s leadership, the company has designed and constructed five commercial scale multiple feedstock biodiesel plants. It also completed $100 million in private equity financing.
Stroburg’s vision for the company is directionally correct for the macro trends of the agriculture and energy industries. He fosters innovation through the creation of additional green-collar jobs, putting more money back in the pockets of American farmers and adding value for the company’s shareholders through continued utilization of core and partner competencies.
His business model also emphasizes environmental responsibility. Throughout his tenure, the biodiesel industry has improved its energy balance ratio from 1-to-3.5 to 1-to-5. REG’s technology efficiency innovations continue to improve the industry’s overall sustainability model.
How to reach: Renewable Energy Group, (515) 239-8000 or www.regfuel.com
When Richard M. Vohs took the helm of Iowa Network Services Inc. as president and CEO in 2002, the group of rural independent telephone companies was feeling its first financial strain. The wireless communications portion of the business a statewide network that connects customers to a central telecommunications hub was quickly evolving. But Vohs’ steadfast vision steered INS toward profit, paving the way for a company that is debt-free, financially sound and growing.
Vohs came to the company in 1993 with a background in both communications as a TV news director and government as a press secretary for the Iowa governor. As he advanced to the top seat, his quiet personality and egalitarian leadership style built up his staff’s trust.
He inspires employees and customers alike to keep striving for the next level of service. His business plan, which is tweaked every two years with a constant focus on the future, forces that forward thinking. He is always preparing for what the customer will need in five to 10 years, not just right now. For example, INS is currently positioned to provide 10-gigabit Ethernet services, but Vohs is looking ahead to secure 40- and eventually 100-gigE connections.
Vohs’ vision for the future, paired with a healthy balance sheet, allows the company to invest in innovative technologies and progressive business plans for the next generation of communication services. Judging by the growth in number of services provided and types of customers served, that’s been an effective strategy.
Meanwhile, Vohs supports the future of Iowa communities with Ripple Effect, a portfolio of financial and technical assistance programs for business and community development. His program recently financed a new grocery store and MRI equipment for a hospital and helped plan a youth sports complex and a community center.
How to reach: Iowa Network Services Inc., (515) 830-0110 or www.IowaNetworkServices.com
Mike Binnette, Stacey Goldman and Steve Hunt each had an idea about how they would run an advertising agency if they were in charge. It wouldn’t be run like the agency they had called home for 10 years that was now being run like any other business.
It would be built on a foundation of strong business principles, but it would also embrace the limitless potential of imagination and enthusiasm. More than six years later, the trio is living that dream as partners at Cannonball Advertising and Promotion.
Since opening in 2004 with eight employees, the firm now has 49 employees and a roster of clients that includes: Enterprise Rent-A-Car, Ameristar Casinos Inc., Schwan’s Consumer Brands North America Inc., Nestlé Purina PetCare Co., Bayer Lawn & Garden Division and Anheuser-Busch Cos. Anheuser-Busch has been with the firm since its inception, a partnership that has created many memorable Super Bowl TV commercials.
Binnette is the firm’s creative director while Goldman serves as chief operating officer and Hunt is chief creative officer. Each one of them brings a dogged tenacity and humility to the firm that they created, and both attributes have spread to the employees and everyone else who comes in contact with Cannonball.
By giving back to the community and doing pro bono work for local charities, the focus of the firm is clear: Do your best on every project and do it with spirit and passion.
How to reach: Cannonball Advertising and Promotion, (314) 445-6400 or www.cannonballagency.com
It would have been easy for Pack St. Clair to just quit after experiencing such failure. He and his team at the brand-new Cobalt Boats traveled to the Chicago Boat Show in 1968 with high hopes of making a lot of money.
They came with a variety of products from runabouts to high-performance cruisers and outboards. Some of the boats were actually finished en route to the show, but St. Clair was excited about his prospects.
Instead, he and his team walked away from the show without making a single sale. But the experience had provided a valuable lesson. The quality was not as high as it could be for many of the boats at the show, and St. Clair realized this was the opening he needed to capture the market.
His company would focus on quality and would make sure its boats were above and beyond customer expectations in terms of appearance and reliability and overall performance.
But it wasn’t just St. Clair who led the company to success. An overwhelming majority of the associates at Cobalt come from a farming background and that has meant a lot to St. Clair, who is Cobalt’s chairman. With their strong work ethic and improvisational skills, farmers have helped St. Clair take his company to the top of the boating industry.
As the economy has struggled during the past couple of years and many companies have lost money and even gone out of business, St. Clair has stayed afloat. By running an efficient and innovative organization that focuses on customer satisfaction and attention to detail, Cobalt Boats has continued growing and expects such growth to continue in the future.
How to reach: Cobalt Boats, (620) 325-2653 or www.cobaltboats.com
Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.
Imagine an office where health and wellness are a priority.
Is this anything like your office? Perhaps it will be during the months and years to come.
There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.
Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds, but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.
“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way that it is valuable, that you want to retain your highly valuable and efficient people you want to allow people to be at their job and functioning well.”
If you don’t have a program up and running pun intended at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there’s an impressive return on the investment, especially after a year or two.
But you have to plan and install the program first.Take the first step
Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.
But why do you want to install a wellness program?
There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.
“Do you want to build benefits? Or, as the management team, is your goal to affect claim costs? Is it a combination of the two?” says Sally L. Stephens, founder and president, Spectrum Health Systems, Indianapolis. “Senior management, or whoever initiates it, needs to ask what they want to accomplish by putting a wellness program in. Too many people think it’s a solution but don’t think through clearly what their goals are.”
And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.
Those highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.
“Some employees hesitate to give all their personal information to the insurance company,” Stephens says. “They don’t want the insurance companies to know they smoke or any of these other things. Working with a third-party provider ensures 100 percent confidentiality. They manage all the data, they manage the security, and the employer doesn’t have to worry about the data management.”
HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.
That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All of those figures are available and can help lay the groundwork for what you need to know to start a wellness program.Consider an outside company and your employees
When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.
But you might not want to keep that plan under your own roof.
Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?
“Running these programs is difficult,” says Michael Nadeau, president and chief executive officer, Viverae Inc., Dallas. “There’s a lot of work that goes into coordinating it and making it all happen. And it’s just as easy to coordinate a program for 1,000 employees as it is for 50 employees. That’s why the spend tends to be a little higher per employee for smaller companies.”
No matter your choice on that matter, your employees do need to feel a sense of inclusion in and perhaps even some sliver of ownership of the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.
The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.
“You need to show someone you’re thinking about their health,” Nadeau says. “This is where you need to provide the right information at the right time and at the right frequency, because you need to have specific programs designed for a specific population.”Monitor results and look forward
The fruits of an effective wellness program will take some time to devel op and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.
Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”
Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.
“Where all the cost is in the system is for people who are at risk for either a chronic illness or acute episodes,” Martino says. “Those are the people who cost all the money, so if you point programs at them, it’s much easier to get a return on the investment. If you look at people who are your working well, generally about 80 percent of the population, those are the people who, because they aren’t sick and don’t have as high a risk for illness, they naturally have lower costs.”
And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.
Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year thanks to employees being able to work more hours and to a possible decrease in health care costs but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.
“Improvements in health can take a little longer,” Stephens says. “But what we say an employer should expect is stabilization of their health care claims within three to five years meaning their claims will trend below industry average, assuming they don’t have a lot of outliers like cancer or automobile accidents, things that a wellness program isn’t really going to impact.”
When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.
“If you believe in the value of your human capital and you want to keep the people who are healthy now healthy in the future, then keep them engaged,” Martino says. “Keep them happy at work.”
RehabCare Group Inc. had just acquired its second-biggest competitor, Symphony Health Services LLC, in a deal that would nearly double the size of one of its most important divisions.
“We were very automated and we used handheld technology for all of our clinicians,” says Short, president and CEO at RehabCare Group. “They were paper-based, so we could see there was substantial value in moving them from paper to our technology.”
Both companies specialized in post-acute rehabilitation services. The problem for Short was that many employees at the newly acquired Symphony Health were quite fearful of computer technology.
“A substantial number of them felt much more comfortable with paper than they did with PDAs and technology,” Short says.
Others didn’t just feel uncomfortable with computers; they didn’t even know how to turn one on.
“We had about a third of them that had to ask us, ‘Where is the on/off switch?’” Short says.
Clearly, this was not good news. It did not bode well for the plan Short had developed to seamlessly integrate Symphony Health both into his company, which had more than $600 million in revenue at the time, and into the company’s skilled nursing and rehabilitation services division that stood to double in size.
“Any change management plan you come up with will probably not survive the first implementation test,” Short says. “You read about that in change management books and MBA school. But when you’re knee-deep in it and the alligators are coming for you, it’s a whole different deal.”
So what’s a CEO to do? Short says you need to quickly ask yourself two questions: “What are your guts telling you? Do you have the time to find out whether this version of the plan will really work?” Short says. “The biggest challenge you’ve got is recognizing when things aren’t working or aren’t working well enough. It’s letting go of Plan A, B, C, D or E and getting on to Plan F and recognizing there will probably be a Plan G. It’s nerve-wracking.”
It was also essential if Short was to keep this deal from completely falling apart.
As bleak as things may have looked to Short, he had at least prepared himself over the years to deal with adversity.
“You should never be comfortable,” Short says. “If you’re comfortable, you’re missing stuff. This is one of those cases where age and experience works for you. Age and experience typically give you scar tissue from really stupid mistakes and that makes you a lot more humble and a lot more sensitive to the fact that you can really screw up. Those screw-ups have real consequences to real people. If that isn’t enough to terrorize you, then you’re in the wrong business.”
Short knew his plan wasn’t going to work and that he would need to come up with a new course of action to integrate Symphony Health into RehabCare. Fortunately, he did have one thing going for him. While there were some novices, not all of the employees at Symphony Health shuddered at the sight of a computer.
“We had roughly a third of these folks that immediately turned on the computer, got out the manual and we hardly had to talk to them,” Short says. “They figured it out, they were moving and they were asking great questions.”
When you’re in a bind, your inclination is to grasp onto anything you can find that will pull you out of trouble. Short knew these knowledgeable computer users could help him begin to get things back on track.
“We thought we were going to be able to train each site as a group,” Short says. “What we ended up doing was getting the people that were computer literate, training them and having them go back and train their colleagues. That worked out a lot better.
“We said, ‘Look, our plan is not going to work this way. What do we have to do to make it accessible and successful for the folks that are going to have to change?’ You express a lot of humility and indicate that, obviously, you don’t have all the answers because you don’t have the answers to this deal. You empower them to take the lead. It’s pretty easy to tell them what the vision is and where you want to end up. The hard part is how to get from Point A to Point B.”
It was pretty easy to pick out the people who knew what they were doing from the ones who did not.
“You just grab them and say, ‘OK, we have an exciting new challenge for you,’” Short says.
Give them an ego boost by showing them that even though you’re buying their company, you really need their help to make it work.
“First explain the rationale of what you’re trying to do and why,” Short says. “That satisfies a segment of the group. At the same time, you have to identify processes and approaches that they do better than you do and implement them on your side so they can start thinking, ‘Wow, these guys really do value us.’ We treated them as equals and showed them that we were not perfect and we did not have world-class processes everywhere. In fact, in several areas, they did stuff better than we did and we started using their folks to train our folks. It became more of a team integration rather than, ‘You guys don’t know anything. We’re going to teach you how to do this.’”
Short ended up accomplishing two things at once. He was expanding the knowledge base of his new employees and simultaneously integrating them into RehabCare’s culture.
So what about the people who really don’t get your way of doing things or don’t want to get it?
“People identify themselves pretty rapidly if you’re looking for it,” Short says. “If they’re giving you the basic, ‘I’m not going to do this,’ the faster you recognize it and segue them out, the better it is for them, for us, and for their colleagues and management.”
Start at the bottom
As he was putting out one fire, Short still faced the challenge of trying to integrate as many as 3,700 employees from Symphony Health into his organization.
“The first thing you do going in is forgive yourself for making the mistakes you’re going to make because you’re going to make mistakes,” Short says. “Just get over it. We sent letters and had personal phone calls with every one of the 3,700 employees within the first three days we did the deal, telling them either there was absolutely no change contemplated with their job or, on the other side, there was a change and here’s what it looked like.”
He began this seemingly overwhelming task by putting together a communication plan.
“We’re in a pyramid,” Short says. “I have to sit down with 10 folks. Those 10 people have to make their 10 calls and the layer below them makes their 10 calls and it’s not nearly as onerous as you might think. You only have four or five layers there and you cover everybody.”
Short brought even more order to the process by having people make calls to their counterparts at Symphony Health.
“Have the HR guys talk about the HR issues,” Short says. “You have the CFOs talk about finance issues. A healthy fraction of the discussion is, ‘Do you want to stay? Who that reports to you should we keep? And why should we keep them?’ Then you go through an initial set of interviews and it doesn’t take long to decide actually.”
When you begin the process of sitting down conducting interviews with people about their future, you should start at the bottom of the organization and work your way up.
“Those are the most important people,” Short says. “Those folks pay my check, so I have to keep them happy.”
You also shouldn’t be the one doing the interviewing of people at these lower levels.
“It doesn’t do any good for me to do that,” Short says. “People will tell me what they think I want to hear. So you really have to get their supervisor, who typically has not only an employer-employee relationship but also a friend-colleague relationship to have that discussion. Do it in a way that is as nonthreatening as possible, including making it clear that there is no problem if they’re not comfortable. If they want to leave, do everything you can to assist their leaving.”
Remove the uncertainty
There is an obvious question, of course, if you’re starting at the bottom in evaluating employees to remain in your organization: What happens if the supervisor conducting interviews with his or her direct reports doesn’t have a place in your future?
“I would love to tell you this is a perfect process,” Short says. “We tend to do it simultaneously because speed is of the essence. Are we going to make mistakes? Sure. Are people going to mislead us? Sure. But if you get people comfortable that you’re not going to fire them tomorrow, they’ll be pretty up front about, ‘I can do this, I can’t do this, I don’t know if I can do this.’”
It’s uncertainty that you’re trying to remove from the equation. The quicker you can do that, the better off you’ll be.
“A third of the time, they’ll come up to you and say, ‘I don’t feel comfortable working with another company. I want to leave,’” Short says. “Another third of the time, they’ll say, ‘I really want to stay. Is there a role for me?’ Then you get the people in the middle that are trying to think about it. The big thing is, as long as you can give folks at any level a soft landing so their decision is not distorted by, ‘My God, I’m going to be on the unemployment line tomorrow at 8 o’clock,’ you typically can get pretty rapidly what their desire is.
“Successful integration is speed, speed, speed. People want to know, ‘What is my future?’ The faster you can answer that question for every individual in the other company, the better off you’re going to be and the better off they are going to be.”
When it comes time for you to meet with your counterpart, the CEO at the other organization, you can never go wrong by following the Golden Rule.
“Treat him or her exactly the way you would want to be treated if the roles were reversed,” Short says. “Make sure you show a lot of respect for what he’s done. Make sure he has a soft landing if he hasn’t already gotten one built into his agreement with the prior owner. Engage him intellectually in the challenge. At that time, we’re all type-A personalities. So it’s really not hard to engage him unless you piss him off.”
If you find other people on your counterpart’s leadership team who seem reluctant to stick with you, let them move on.
“If they are avoiding your eyes and won’t make eye contact, if they fidget or are nervous, if they’re very evasive when you ask them direct questions, they’re probably not going to survive my management style anyway,” Short says.
The honest, upfront approach helped Short keep the acquisition on track and move past the initial problems that threatened to derail the whole thing.
“It had a great ending, but we sure look at acquisitions very differently than we did back then,” Short says. “Because every acquisition is going to require a culture change. The thing that we learned was the plan we had put together was based on our 10-year experience with technology. We assumed everybody knew as much as we did. What we quickly learned was we shouldn’t do the plan. We should take the people we’re trying to change and train and have them develop the plan. They are the ones that are going to be affected by it.”
The 18,200-employee company recorded $869.4 million in operating revenue for 2009 and Short says humility will be a key to being able to take that figure even higher.
“I know I’m going to mess some stuff up,” Short says. “I’m mature enough to say, ‘I’m sorry,’ and get to work on fixing things that I messed up in the first place.”
How to reach: RehabCare Group Inc., (800) 677-1238 or www.rehabcare.com
Born: Irvington, N.J.
Education: Bachelor of science in economics, Fairleigh Dickinson University, Madison, N.J. MBA from Harvard Business School
Whom do you admire most in business and why?
Warren Buffett. (Note: MiTek is a Berkshire Hathaway company) He is just exceptionally analytical, very down to earth and unassuming. The beauty of being around Warren is, A, you wouldn’t think he had 5 cents, and, B, he is never, ever condescending and he listens and learns.
So a guy who has done all he has done, that’s a great role model for all of us. And lastly, despite his age, he would tell you he tap dances to work every day. That’s a direct quote from him to the world. His enthusiasm for business is contagious. Let’s be honest, you can’t be good at what you do unless you like what you do.
If you could sit down to dinner with any three people from history, whom would you pick and why?
Howard Hughes, Steve Jobs and Ronald Reagan. Hughes was a fascinating character. He’d be a great guy, and he’d be enjoyable if he’d open up and tell some stories.
Reagan, because I think he was the great communicator. He was a great CEO because I think, from what I heard, he took a nap every afternoon.
And with Steve Jobs, I know Bill Gates and he’s phenomenal and I’ve had dinner with Bill. So I think Jobs would be an interesting character. You saw what happened when he turned his business over to somebody. He was able to come back in. He’s a creative, innovative guy and, in my mind, probably a superb salesman.
When Rick Pogue came on board at Arrowhead Building Supply Inc., there were a lot of people in the wrong positions and some employees whom the company didn’t even want.
For the son of the building supply company owner, he quickly learned that if you don’t have the right people in the right positions, it’s going to hurt your company.
To better situate the company, Pogue devised a system to analyze each position and weed out those who didn’t fit the culture.
“We create the goals for the company, then we build the people around those goals,” Pogue says. “There’s a plethora of different things that have to work. You have to have the right attitudes, the right personalities, for each individual position.”
Getting the right 100 employees was the first step of many that has allowed the company to capitalize on the market. Arrowhead recorded record growth in 2009, reaching $30 million in sales revenue.
Smart Business spoke with Pogue about how to get the right people in the right positions.
Recognize needed changes. Ask yourself four questions about your employees: Do my people really care if my company grows? Are they overjoyed, giving each other high-fives when we get a new customer? Do they stay after work to finish projects, or is there a giant gust of wind through the front door at closing time? What motivates my salespeople money or success? Remember, success breeds money, but money breeds the desire for more money.
If achievement motivates your people, then you will all reap the monetary rewards from your accomplishments. If money is all that motivates your people, then that’s all they will focus on, and every 90 to 180 days, you’ll be talking about pay raises for no results.
Restaffing a company can be a scary concept. However, you have to be serious about change, and your people must believe in your willingness to replace them. Otherwise, in effect, your employees will be in charge of your company and you.
Assess each position. We look at every position individually and we come up with a set of goals for the position.
If it’s inside sales, what do we really want our inside salespeople to do. Do we want them just to sit there and wait for the phone to ring and then answer the phone and then take the order? Because that’s what I call an order taker, and you can pay those people about $9 an hour. We want inside salespeople to be salespeople.
What we do is we have very detailed job descriptions for them, and when we train them, we show them exactly what we want them to do. For the inside sales position, their job is to produce new sales via any avenue possible, cold calls, fax, landline, they all have cell phones.
(To assess the workload,) I put myself in the position and that helps me. I don’t ask anything from anybody that I wouldn’t do myself, so I put myself in that position and I say what I would expect out of myself if I were doing that job. That’s basically where I get the standards.
We have started in recent years, probably the last two years, we started testing. I can have a prospective employee or even an existing employee that might be in the wrong position (tested) they can take a personality test.
That has been very beneficial to us. That has helped us assess things that I can’t pick up on my own just by talking and observing. This test helps flush some of those weaknesses and strengths out.
Put weight on attitude. No. 1, for me, is attitude. Absolutely attitude is No. 1 for me because if the person has the right attitude, they’ll be successful.
I first look at their attitude, and then their skill set would come in second to me.
I’m not one who believes you have to have a four-year college education to be the best bookkeeper for a company. I don’t hold everybody to that standard because we have people here that never went to college that I wouldn’t trade for somebody with a doctorate.
I don’t think that has enough of an effect on a person’s abilities to discount them as a quality employee.
Look for person/position mismatches. I look for efficiency in that position. Usually that will jump out at you.
When you look at everything, all aspects of the business, you can see where the weak spots are. Maybe the weak spots are in bookkeeping because credits are not being issued properly, whether they’re given too many credits or not enough credits, tickets aren’t being processed correctly.
Usually the inefficiencies jump out at me first. It’s like a red flag. Then I say, ‘OK, what’s going on here.’ Then I delve a little deeper in there.
Leave out personal convictions. You have to set feelings aside. I’m the nicest guy in the world and I want everybody to love me, especially my employees, but you have to set the feelings aside.
If you have a person that’s been working for you for 10 years but they’re the wrong person in that job for whatever reason maybe they have a bad attitude, maybe they don’t work well with others you have to set your emotions aside.
‘Oh, they’ve been here 10 years, just deal with it.’ I don’t believe in that. I don’t believe in telling my other employees, ‘I know they’re difficult to work with. … I know they have a bad attitude, just deal with it they’ve been here forever.’
When I say assess every position individually that’s what I’m talking about. Do I have the best person in that chair that I could possibly have? If not, then that position is a work in progress. That’s how I view it.
How to reach: Arrowhead Building Supply Inc., (636) 970-1976 or www.arrowheadbuildingsupply.com
“When you get married, you usually spend a lot of time with your future bride learning about her family and her beliefs and everything about her before you make up your mind that you’re going to spend the rest of your life with her,” Steinback says. “Getting married with partners is the same thing.”
Unfortunately for Steinback, he didn’t learn that lesson until after he and his partners had started CSI Leasing Inc. nearly 40 years ago.
“I didn’t do much due diligence on my partners,” says Steinback, the company’s co-founder and chairman. “I didn’t court them and figure out what they were all about and where they came from. I just knew they were people I worked with or people I just knew and I ended up going into business with them.”
Today, CSI Leasing is one of the largest independent IT leasing specialists in the world, with more than 650 employees and $367 million in fiscal 2008 revenue. Back in 1972, it was a brand-new operation with a team of leaders that couldn’t work together.
“We started the business as basically a partnership,” Steinback says. “Shortly thereafter, I realized you can’t run a business as a partnership unless you have leadership, especially when you’re all equal.
“I took over the leadership role early on because you couldn’t have four partners doing the same thing and duplicating each other’s efforts and stumbling over each other. That was quite honestly what happened the first couple years we were in business until I realized it doesn’t work that way. Equal partnerships just don’t work.”
Steinback feels like the lessons learned from his problems at the start of CSI have made him a better leader today. The experience has given him a better sense of how to build a strong and cohesive leadership team and how to get that team to work with him as the company’s leader.
“That is the reason why my entire management team has been with me for well over 20 years and we’ve had very little turnover within the company,” Steinback says.
Share the wealth
Steinback believes it’s one of the smartest things he’s ever done, and a key to his ability to develop his own leadership authority and keep everyone happy at the same time.
“It’s called ownership,” Steinback says. “The smartest thing I ever did was open up the ownership. A lot of people that started in this industry in the early days, some of them that were in and out of the business, the reason they left the business was because their bosses took all the money and ran.”
Steinback wanted to prove to his team that he wasn’t that type of individual and that he could be trusted as the leader. He also knew that the problem in the company’s early days was not with who owned what but with who was in charge.
So how do you convince people to follow you?
“Someone has to take the helm and create an organization and create an infrastructure and create a chain of command,” Steinback says. “Whatever your stock percentage is has nothing to do with your management responsibilities.”
Steinback decided to continue sharing the role of ownership of the company. He would fill the role of leader but share the role as owner of the business with his leadership team and other employees at CSI.
By sharing the profits or losses with those people who were putting in the hard work to make the company go, his goal was to put employees in a better position to respond to his authority as the leader of the organization.
“We have an infrastructure that says, ‘Here is the organization,’ and because there are 80 stockholders or whatever it is, that doesn’t mean they run the company,” Steinback says. “That just means if a dividend is paid, they get paid a dividend based on how many shares they own. They get a bonus based on what their job is. That’s the way it is run, which is the way any company should be run as far as I’m concerned.”
Give employees a stake in the economics of your business and they’ll have a better feel for how the company is doing and how their role contributes to that outcome. Spell out very clearly what the parameters are of their ownership so that there is no confusion.
“They all participate in the ups and downs and they like that,” Steinback says. “That wasn’t given to them. They bought in to it. Every key employee has a stock ownership in the firm.”
There are obviously other things that contribute to an employee’s level of satisfaction with an employer. But giving them a chance to own even a small part of the business is a good place to start toward earning some of that contentment.
“We built an infrastructure and built a foundation of good people that all participate in the wealth of this company,” Steinback says. “I haven’t, as the largest stockholder, raped this company and taken everything out of it. Now they are the ones that are going to sit around along with me and reap the rewards.”
Get people involved
Steinback knew buy-in from employees wouldn’t come strictly because they owned stock. He needed to show them that he could create a team that could work together for the betterment of the business and that those on the team would be valued for their efforts.
“If you respect and believe that the person on your management team is qualified and good and is someone you want to retain, you have to support them and challenge them and work with them,” Steinback says. “Give them responsibility. We engage them in what we want to do and we make sure they do it.”
You have a leadership team for a reason, to help you run the business. And while you may position yourself as the leader, you still need to use your team to help you guide your business.
“Involve the entire leadership team in all the operational and strategic meetings that the company has,” Steinback says. “When we talk about planning, monthly planning, semiannual planning, long-range planning, they are part of that. When it’s new product development or new plans or new marketing approaches, they are part of it. You have to have buy-in and everybody has to understand it.”
So how do you avoid the problems that Steinback had previously, where there was bickering about the direction of the company?
“The difference was none of my employees are equal partners or equal stockholders,” Steinback says. “They don’t have a say.”
While they don’t have a say in ultimately making decisions, they do, and should, have the ability to contribute their thoughts to how those decisions should be made.
“Keep on challenging these people and keep giving them responsibility,” Steinback says. “You just have to do it. You have to give up a little bit of that day-to-day responsibility of your own and just have a little more oversight on them.”
If you operate with authority that isn’t cloaked in secrecy, you’ll stand a better chance of gaining support.
“We have them buy in to everything and have them understand what the hell is going on,” Steinback says. “That’s what it’s all about. There’s
a lot of employees that don’t disclose anything to their employees and half the employees don’t know what the hell to do. We don’t do it that way.”
Leave some room
Steinback is happy to attend a ballgame or some other leisurely activity with any one of his employees. He says there’s no problem with doing this, as long as you maintain a certain level of distance in your relationship.
“If you’re the guy signing this guy’s paycheck, you have to be careful,” Steinback says. “You have to separate most of your personal life from your business life.”
That doesn’t mean you should be afraid to talk with other employees when you’re away from the office. Just don’t get into the hot-button issues of politics and religion.
“If you’re a Republican and I’m a Democrat or vice versa and you start the conversation by saying, ‘What do you think of the health care plan?’ before you know it, you can be at odds over what we each think,’” Steinback says. “We don’t talk about that. We leave that out of the business, which eliminates a lot of the issues. I don’t tell you how to believe. You can believe whatever you want. Everybody is entitled to their own thoughts.”
What you’re trying to do as the leader is to leave yourself an opening to provide criticism of an employee, if it is ever needed. If you become too close personally, that becomes more difficult.
“I’m out on a sales call with one of our salesmen that’s worked for me for 25 years,” Steinback says. “I know his wife. I’ve been on incentive trips. I know them very well. … I went on a sales call, and I didn’t like what I heard. Either he didn’t handle the call well or he said some things I didn’t like or I thought he had a bad attitude. I always position myself so that I can sit there and say, ‘You know what Mr. Salesman, I didn’t like this, and here’s what I didn’t like.’ It’s constructive criticism. I’m not screaming at him. I’m upset because he might have misrepresented me.”
It’s just a matter of making sure you keep the roles of boss and friend separate.
“I always leave myself enough room so that I can talk to those people and tell them what I think,” Steinback says. “If they don’t like it, that’s the aspect of my job.”
And Steinback believes it’s his ability to relate both personally and professionally that has enabled CSI to succeed.
“We respect each other’s turf and what everybody is responsible for,” Steinback says. “We give everybody the opportunity to interact and be social. … I don’t think people would stay around and be as participatory as they have been for 20-plus years if they weren’t happy campers. It’s their whole life.”
Steinback says he has changed as a leader since those early days when he had problems with his partners.
“I’m probably much more tolerant today,” Steinback says. “Probably in the early years, I was much more of a micromanager than I am today. There’s a time and a place for both of those. I’m not suggesting those are bad. But when I was more aggressive in terms of my management style, I could be very irritating and intimidating to people and I don’t think that gets you as much as behaving courteously and letting people know where they stand.”
How to reach: CSI Leasing Inc., (800) 955-0960 or www.csileasing.com