Michael Perry not only believes in leadership by example, he lives it.
If you encourage employees to join community organizations or to serve on nonprofit boards, Perry says it is your responsibility to do the same. Perry, who serves as president of H.B.D. Construction Inc., a full-service general contracting firm, says the best way for leaders to communicate their corporate vision is through their actions: If they believe in something, they should pursue it. And it’s a philosophy he lives each day at H.B.D, a full-service general contracting firm that reported $128 million in 2007 revenue and employs 130 people.
Smart Business spoke with Perry about how to delegate responsibility, communicate with your staff and create an environment of positive attitudes.
Allow employees to think on their own. Delegate responsibility where applicable. You do that by assigning responsibilities throughout your process to your managers and holding them accountable for the performance of their project. We have review meetings, whereby the projects are analyzed on a monthly basis. We have yearly reviews for all staff, including administrative, and that’s where compensation comes into it.
I’ve only been president for four years, and delegating was a little difficult at first, only because I worked my way up through the chain here at the company and was, at one time, a project manager. When you realize that there’s way too much to do it all yourself, you’re forced into delegating, and you learn quickly.
When a person is first hired, give them small amounts of responsibilities, and then quickly ratchet that up as they perform. You wouldn’t have hired a person if you didn’t trust them out of the chute.
Our company has an established set of checks and balances on virtually every operation the way our costs are handled, our schedules, our procedures so I rely on those checks and balances. If a person is not representing my company well, I will certainly hear about it quickly.
Constantly communicate. When you have a problem, 98 percent of the time you can trace the source of that to either a mis-communication or a lack of communication between the two parties. To avoid those problems and to have smooth projects, you have to communicate internally and externally.
The best way to do that is to avoid sitting in the ivory tower, letting your employees handle all the problems. When a problem exists that your employees can’t handle, I want them to bring it to me, and then we’ll work toward a solution. To do that, you have to listen to your employees and allow them to bring things to you and not be fearful.
The proof is in the pudding. If you run around screaming at everybody and firing everybody, that will get out pretty quickly as your method of operation, and that’s not a successful one.
I believe in keeping things at a civil level. When problems arise, we learn from them, not only individually but as a company, and then we share those with each other and use them as a tool rather than a reason to get rid of somebody.
Any good leader needs to be a good communicator. If you can’t communicate with folks, you’re probably not going to be leading a company. If you’re a good communicator and you have an employee who’s not communicating well, focus on that with them and help them improve upon it.
Keep the ideas flowing. You can foster teamwork by having regular assemblies of your management team and fostering an idea-sharing environment, as opposed to working individually and not gaining knowledge from each other. I always say that our business is constantly learning because it continually evolves. Things change in business, particularly through technology; there’s always improvements made, so you need to keep up on those.
It’s too big of an arena for one person to think they’ve learned everything, including myself. You foster that by getting together and giving everybody the opportunity to speak up about things they’ve learned, problems they’ve had, and hope that you gain as a company from that.
Practice the art of positive thinking. No. 1, steer away from negative people and associate yourself with positive people.
No. 2, when you have a negative situation, create a way to turn it positive. You don’t want to have rose-colored glasses and walk around saying everything is wonderful when it’s not, but when you’re faced with a negative situation, deal with it, and then move back to a positive mode of thinking.
I was a bit of a negative thinker in my younger years, and I changed that around as I got older. I was preparing myself to take on a bigger role in our organization, and I realized that I was going to be faced with more problems and challenges than I had in my former position.
I did a checkup on myself, and that gave me a wake-up call: The business was the same, the company was the same, the only thing that changed was me.
Positive thinking has helped me to deal with things, and I try to pass that on to my employees. Positive attitudes are contagious.
HOW TO REACH: H.B.D. Construction Inc., (314) 781-8000 or www.hbdgc.com
One size does not fit all in the world of insurance coverage. The commercial market provides packaged programs that work for some companies, but there are limitations on the type of endorsements and changes you can make to those policies.
If you pay $1.5 million to $2 million or more in annual premiums and “pre-made” programs aren’t meeting your business’s insurance needs, it’s time to consider starting a captive insurance company.
“If you want to get the specialized coverage you need for your business, it’s better to set up your own insurance company than to find those coverages in the marketplace,” says Larry Pevnick, CPA, member of the insurance and reinsurance services department at Brown Smith Wallace LLC.
A captive insurance company is essentially a mini-insurance business a subsidiary corporation established to provide your organization with a tailored insurance program. There are many benefits to this arrangement, including potentially significant tax savings.
Smart Business spoke with Pevnick about captive insurance companies, how to start one and how they can save you money.
What are the hallmarks of captive insurance?
Because you are creating your own insurance program for your own company, you can design it to meet your specific needs. You have greater control over your program and coverage because you do not have to choose a cookie-cutter offering from the commercial marketplace. You also have more control over claims, and your employees are more likely to embrace safety programs and other initiatives at your business to reduce those claims. There is a larger incentive for cost and loss control. If you own the company, you are motivated to keep a clean loss record so premiums do not increase. Every dollar you don’t have to pay toward premiums or claims goes back into your pocket. This is a powerful tool for businesses in all industries, given the right circumstances.
What companies are best suited for this?
Companies that have a lot of exposures benefit most. For example, a $20 million manufacturing firm would have higher premiums than a $20 million accounting firm. The first question to ask yourself is: Do we have a high level of exposures that we are currently not insuring? Or, is the cost of insuring those exposures out of control? A perfect example is a contractor who must pay an exorbitant amount for workers’ compensation coverage. A captive insurance company can be put in place to control workers’ comp costs. Then, the contractor can give employees safety incentives, which further controls costs. Savings compound over time. Insurance captives are especially attractive to closely held businesses that have an incentive to reduce costs and increase profit. Captives are a mechanism of protecting organizations from external exposures.
How does a captive help reduce costs and increase profit?
The IRS gives insurance companies a tax break that other businesses don’t get. Insurance companies set aside reserves to pay for claims. They can deduct the value of those reserves before claims are paid. Most corporations can only take deductions after expenses are paid. If you own a captive, you can use this tax deferral technique to build wealth. Also, captives are estate-planning tools if you, the owner, assign a family member as the president of your ‘internal’ insurance company. As wealth is generated through the captive by way of tax-deferral strategies and savings due to decreased exposures and lower premiums, that ‘profit’ can be protected while being transferred from one generation to the next.
What are the steps for starting a captive insurance company?
First, you should enlist a CPA or insurance broker who is experienced in captive insurance. It is particularly important to work with someone who understands the nuances involved with qualifying the captive as an insurance company for tax purposes. The professional will review the pros and cons of setting up a captive, and review your current coverage. This person will get to know your business inside and out, identifying risk exposures and areas where your insurance needs are not being met. The adviser will review the organizational structure of your company and learn how and where your business operates. Then, he or she will work with you to design a program. The whole process can take three to six months.
Why don’t more closely held companies utilize captives?
There’s a myth that you have to be a big, public company to start a captive insurance company, but this simply isn’t the case. While candidates are generally in the $25 million to $100 million revenue bracket, any closely held company in any industry that pays $2 million or more in premium costs per year should consider a captive. Another reason captives are not buzzed about more is because many CPAs and business advisers are unfamiliar with them and, therefore, do not recommend them to their clients. This is a highly specialized field, and starting a captive necessitates seeking out a professional who is well versed in how to design and manage a suitable program for your company.
LARRY PEVNICK, CPA, is a member in charge of the insurance and reinsurance industry group at Brown Smith Wallace LLC. Reach him at firstname.lastname@example.org or (314) 983-1247.
If you have an executive or senior management role, chances are you haven’t given much thought to what would happen if you suddenly had to step down from your position. Would relationships with clients continue on a good note? Would projects continue to run without a hitch? If you can’t answer an unequivocal “yes” to these questions, you are not alone.
According to a recent survey, nearly four out of 10 (39 percent) of advertising and marketing executives feel uncertain that someone in their company could fill their shoes if they had to leave. The national poll, developed by The Creative Group, a division of Robert Half International (RHI), included 250 responses from advertising and senior marketing executives from the top 1,000 largest firms in the United States.
“While the majority of ad and marketing executives in our poll reported having a succession plan in place, what is troublesome is that many still do not,” says Carrie Muehlemann, branch manager of The Creative Group in St. Louis. “By taking proactive steps, a manager's departure becomes a workable issue rather than an imminent crisis. You need a plan so that someone can step into a role without massive panic.”
Smart Business spoke with Muehlemann about the importance of creating a succession plan, and how to develop one.
What are the benefits of creating a succession program for not only advertising and marketing firms, but all companies?
Succession planning lays the groundwork for a smooth transition when a manager moves on, or in the event he or she leaves unexpectedly. It is not only good ‘disaster prevention’ in case of an employee’s sudden departure, but it is good for everyday occur-rences, such as vacation or sick leave. A succession plan helps employees feel secure that there is a plan in place for the business to run as usual, even if key personnel are missing either temporarily or permanently.
What are some common reasons companies don’t create succession programs?
Many managers are simply caught up in the present dealing with daily activities, putting out office fires and have trouble making time to plan for the future. Plus, the idea of creating such a plan can be daunting; who really wants to think about and create a plan to replace themselves? A better way to think about succession planning is to look at it not only as a plan of replacement if something happens to the manager, but as a succession plan for when employees are promoted.
What do managers stand to gain from succession planning?
For managers, having a trusted replacement to cover for them while they’re away from the office can relieve some day-to-day stress. It certainly diminishes the pressure of what to do during vacations or any leave of absence they may need to take. Managers can rest assured that things will be under control and handled, and work will not be piled up when they return. They also may feel better about accepting a new role either within or outside the organization if there is someone ready to fill their shoes.
In addition, a succession plan helps instill loyalty among employees who are groomed for the next step, as well as the managers who are grooming them.
What qualities should managers look for in potential succession candidates?
Strengths executives may look for in succession candidates are strong leadership skills, communication skills, strategic thinking, commitment to the company and the initiative to execute change. One thing to keep in mind is that a successor may not necessarily be the next in line for that position. It should be an employee who shows leadership abilities, is able to make good decisions, and is ready to take the next step on the career ladder. But that person once identified needs to be moved up to second in command in order to avoid resentment among co-workers. The successor should preferably be someone within the company (as opposed to recruiting new staff) since promoting from within breeds loyalty. Succession also flows more seamlessly from within the company since the employee already understands the corporate culture.
How can managers help candidates grow into leadership roles?
Once a successor is identified, managers need to let that person know immediately. This not only reinforces to the employee that he or she is on an upward career track, but it also offers the chance for the person to decline, if he or she so chooses. Managers may want to include protégés in strategy meetings and discussions to help them acquire planning and leadership skills, as well as a broad vision of the company and its goals. The successor should start to gain ongoing knowledge of the role for the day he or she may need to jump right in. Managers should also provide regular feedback, plus offer perks or incentives to keep these future leaders engaged and committed to their career paths and the company. A trial run, which can occur during the manager’s vacation, is a good way to assess if the successor is ready for the job.
CARRIE MUEHLEMANN is branch manager of The Creative Group in St. Louis. Reach her at Carrie.email@example.com or (314) 621-8367. The Creative Group (www.creativegroup.com), a division of Robert Half International, is a specialized staffing service providing marketing, advertising, creative and Web professionals on a project basis.
Born: Kansas City, Mo.
Education: American University, bachelor of arts degree, political science; minor in urban affairs
What is the greatest challenge you have faced?
Being son of the boss. You’re rightly guilty until you are proven innocent. There is the rightful assumption that you only got where you are because of what your last name is. That’s something I still constantly strive to overcome. I think self-deprecating humor is my greatest strength.
What is the most important business lesson you have learned?
Nothing breeds failure like success. Don’t believe your own PR.
Whom do you admire most in business and why?
Herb Kelleher, Southwest Airlines. He didn’t take himself too seriously, and he has a great sense of humor.
Epsten on the challenges of growth: The challenge of growing a business is a matter of always staying one step ahead worrying about tomorrow’s problems as much as the problems of today. We do it by first making sure that we are successful in the short term, which gives us the luxury of planning for the long term. A lot of times, it involves spotting trends, looking at related industries or businesses that may be further along the curve than we are and also looking at other markets and seeing if there are any issues that might become applicable to our market in the future.
A lot of times, it’s as simple as asking questions of our constituencies, our suppliers and our customers. It also can be as easy as reading, whether it’s industry publications or general business publications to see what’s going on. It’s paying attention to the trees at the same time you are paying attention to the forest.
Before any business or company hires another entity to build something for it, great pains are taken to spell out what is expected from each side and what the rights are of all the parties involved. Yet, despite contracts that are drawn up and signed before any work begins, oftentimes those parties will find themselves in court, battling over negligence or a perceived breach of contract.
“Although there certainly are statutes and regulations that apply to various aspects of design and construction, the rights of the parties are also defined in the contracts that they sign,” says Richard R. Hardcastle III, an officer for Greensfelder, Hemker & Gale, P.C. in St. Louis.
The law firm won the longest civil jury trial in the history of St. Louis County when it defended the Cross County Collaborative against Metro, the bus and light rail agency, in an $81 million civil damage suit.
“Disagreements over the meaning of those contracts can lead to litigation,” he says.
Smart Business asked Hardcastle what parties on either side of the equation can do to avoid having to go to court.
What steps can both parties take to reduce the chances of ending up in court?
The first step to avoiding litigation is a thorough review of the contract so that our clients know where they stand going into the project. Almost all construction litigation is based on either a claim that somebody breached the contract or a claim of negligence. A big part of our construction practice is devoted to helping our clients avoid the time and expense of litigation. The best way to do that is to work with them upfront with contract reviews, where you can help the clients identify and, perhaps, shift some of the contractual risks or point out problematic or unfair clauses, things of that nature.
Once the client enters into the contract, the next step to avoiding litigation is to have a hands-on working relationship with the client. We stay advised and abreast of all issues as they arise and resolve those issues as the construction or design is proceeding, rather than letting them pile up until the end when there is a greater risk of a blow up. If you tackle the smaller issues as you go instead of waiting for them to accumulate you have a much better chance of avoiding litigation.
While in the process of tackling those small issues you’re also helping the client document their position, making sure they are following their contractual obligations to the letter so that at the end of the job, if it looks like litigation is on the horizon, your client is in the best possible legal position. And frankly, if the other side has not done the same, oftentimes, just by being prepared you can avoid litigation by showing the other side it’s going to be a losing proposition for them going forward.
Sometimes, however, litigation is simply unavoidable; it’s the type of society we live in. When that happens your clients want to be sure they have lawyers who understand the business and the nuances of construction law and who know how to present or defend a claim. One of our strengths is we have a large department of people experienced in construction law who know the law, the business and how to present a case.
With so much spelled out in the contract, what could be left to fight about?
What’s often left are the nuances: What does this word mean or that clause mean in this context? Or, this clause seems to contradict that clause. Believe me, there’s no shortage of things to end up arguing about. The more clearly you can state the obligations in the contract, the less opportunity there is for litigation down the road.
How can a company best cover its clients’ interests?
A couple of ways. We think that a contract that is reasonable, clear and well written is the best service that we can provide for our clients. We also counsel our clients to consult with their lawyer as the project progresses so that simple things like notice letters and things of that nature are not overlooked. There is nothing more discouraging for a client to hear that they may have waived a legitimate claim by having failed to provide the requisite notice or meet the applicable deadline. We help make sure that never happens.
RICHARD R. HARDCASTLE III is an officer for Greensfelder, Hemker & Gale, P.C. in St. Louis. Reach him at (314) 516-2675 or firstname.lastname@example.org.
Fraud will never happen at your company, right? You have passwords, anti-virus software, even a dedicated IT staff that manages this portion of your business so you’re not worried. But you should be.
This not-at-my-company approach to securing your information systems is downright dangerous, says Ron Schmittling, CPA, CITP, CISA, CIA, leader of Brown Smith Wallace LLC’s IT Security & Privacy Practice.
“Every organization has critical or sensitive information, whether financial information, trade secrets, intellectual property or confidential employee data,” he says.
This accessible digital information is stored electronically, leaving it vulnerable to hackers, viruses and even your own employees.
Smart Business spoke with Schmittling about the challenges business owners face concerning information security.
Why aren’t businesses being protected?
First, there are a lot of myths surrounding information security, such as: ‘We are a simple company and not very high-tech,’ or ‘I trust my IT group to know what needs to be done,’ or ‘My outsourced provider takes care of that stuff.’ Most companies are not as secure as they think they are. At the other end of the spectrum are companies that look for security products rather than developing a process. They purchase software, layering several programs with the mindset that more is better. But without a well-defined system, these companies could actually create more security ‘holes.’ For all these reasons, managers should develop a process for securing data. Information is the lifeblood of any business. Therefore, securing that information is a senior management issue and not just another job for the IT department.
How does security affect the bottom line?
Many companies fail to understand how information security will help their profit margins because security is not tangible. It isn’t tied in neatly to the linear cost and profit concept. But, in fact, security affects businesses in ways they never expected. Business activity can be disrupted, resulting in lost time and angry customers. Privacy can be violated, which will erode customer trust. Reputations can be damaged, spoiling future opportunities. On a more direct level, financial information that is not secure puts companies at serious risk for fraud or espionage.
What’s the first step to addressing security?
From a bottom-line perspective, there are four key points to remember when developing an information security system. One, start with a top-down approach, involving business managers, to find out what areas of the business contain security ‘holes.’ Two, adopt a 24-7-security attitude. Protecting your systems should be top-of-mind all the time, not just before an annual security audit. Three, enlist experienced security personnel, either in-house or through a third party, who can help you develop a tight system based on your company’s vulnerabilities. Four, constantly re-evaluate your system, via independent penetration tests and vulnerability assessments, and then tweak it to accommodate your changing business.
What issues should business owners address to secure their information?
It is critical to consider confidentiality, integrity and availability of information. Confidentiality involves enforcing a necessary level of secrecy at every data-processing juncture to prevent unauthorized individuals from accessing your data. Integrity refers to the accuracy and reliability of the information your system provides. Information should be protected from unauthorized changes to ensure the users can rely on it. Availability concerns ensuring data is accessible when requested. By addressing these three issues, your business can reduce its risk of various information attacks, which can be placed into four categories: one, criminal attacks like identify theft, ‘phishing’ and theft of information or intellectual property; two, destructive attacks such as denial of service, cyber terrorists and employees who are trying to harm your business; three, ‘explorers’ who hack for fun; and four, in the worst-case scenario, your business may be subject to espionage if competitors can mine your data for trade secrets and valuable information.
How can vulnerabilities be managed?
We’re more vulnerable today than ever, but security spending accounts for less than 10 percent of most companies’ IT budgets. An information security policy should be in writing a ‘tone at the top’ policy that trickles down through the organization.
Start by defining what systems you currently have in place. What information do you need to protect? Next, consider physical security. What are you doing to protect yourself from people walking up to your business and collecting information? Where do servers reside, and are they well protected? What about your desktop environment? Next, implement user-access controls like user IDs and passwords, user agreements and acceptable-use policies. Enforce access to your systems with network protection like firewalls and system log-on interfaces. Finally, monitor the compliance of your plan. How is it working? You may enlist a third party to run penetration and vulnerability tests, essentially checking how easy it is to break into your system without actually breaching your security. Your system won’t be put into place overnight but you should set goals and work toward constantly improving your security. No business can afford to ignore it.
RON SCHMITTLING, CPA, CITP, CISA, CIA, leads Brown Smith Wallace LLC’s IT Security & Privacy Practice in St. Louis. Reach him at email@example.com or (314) 983-1398.
Entry-level accounting and finance professionals are rarely taken under a mentor’s wing, a new survey suggests. According to a poll developed by Accountemps, a specialized staffing service for temporary financial professionals, the majority (58 percent) of the 1,400 CFOs polled said that it is uncommon for newly hired employees to be matched with mentors, either formally or informally, within their organizations.
“Mentoring is one of the best ways for a business to get a new employee up to speed, but it is a practice that is rarely implemented in business,” says Melinda Alison, St. Louis regional vice president of Robert Half International, the parent company of Accountemps.
Smart Business spoke with Alison about the reasons businesses should put a mentoring program in place and the benefits it can offer a company.
What are the benefits of a mentoring program, from both from the mentor and protégé point of view?
For the newly hired, having a mentor within the company is a wonderful way for the person to feel secure, supported, and guided on what it takes to be successful in the organization. It also helps employees enhance their own skill sets, which makes them more valuable to the company. For mentors, it allows them to hone their own leadership and communication skills. It is also a huge form of flattery for top workers to be identified as strong employees who are good role models. What this means to the business, ultimately, are happy employees who are, in turn, loyal employees.
Why aren’t more companies providing mentors to entry-level staff?
The best explanation is that the benefits of mentoring programs are not yet on many businesses’ radar screens. It is not expensive to implement a mentoring program, but it does take time and planning.
What steps need to be taken to create a mentoring program?
Identify the employees’ needs. What do your newly hired employees need? Some might need a mentor on technical aspects of the job. Others might need help on communication or leadership skills. Identify the categories of employees that need mentoring. Often, it’s not only new employees who need mentoring. See if mentoring can reach other areas of your staff, such as administrative or newly promoted managers.
Identify the mentors. Don’t pair an employee with his or her supervisor this does not make for a comfortable mentoring situation. Instead, find employees in another area of the company who have proven track records in managing or coaching employees. The mentor does not necessarily have to be in a leadership role, but, instead, should be a person who has characteristics that you want other employees to learn and emulate.
Get a mentor agreement in writing. You might want to contact your HR department for help on writing up a formal agreement. Identify a timeline for the mentor program with specific goals and objectives.
Track success. Discuss the mentoring program at monthly management meetings and share success stories with the rest of the company.
What can professionals do to find a mentor when their employers don't provide them, either formally or informally?
Some employees who are very career-focused and want to move up within the organization will sometimes seek out informal mentor opportunities on their own. Professionals may need to be proactive in their search and give potential mentors good reasons for wanting to spend time with them. Networking with industry-specific organizations can also pinpoint mentors outside a company.
No one person knows it all, and it's perfectly acceptable to work with more than one mentor at a time. Perhaps one individual might help you hone technical skills, while another provides management expertise or industry knowledge. An experienced mentor can also provide insight into areas that aren't taught in school but are essential to career success, such as office protocol and how to handle sensitive situations. Your number one priority should be to maximize what you can learn from a mentor.
Employees both those in need of mentoring, and those that feel that they have the capacity to become mentors should discuss the benefits of formal and informal mentoring opportunities with their supervisor or HR department.
The death of Maritz Inc. Chairman Bill Maritz in 2001 meant the loss of 40 years of experience at the very top of the company’s hierarchy. The tumult that followed as the 113-year-old family business struggled to deal with the loss of its patriarch, combined with the economic fallout from the Sept. 11 terrorist attacks, presented plenty of challenges for Steve Maritz, the new chairman and CEO.
“During his tenure here, the company had grown substantially into what it is,” Maritz says of his father’s legacy. “It is not unusual in families, much less businesses, that the death of the patriarch often triggers some consternation and squabbling amongst the next generation.”
With $1.45 billion in revenue in fiscal 2007 and more than 4,100 employees, Maritz Inc. is the largest source of integrated performance improvement, travel and market research services in the world.
Founded in 1894 by Edward Maritz as a fine jewelry manufacturing company, Maritz Inc. has evolved over the past century to a business that helps its clients find ways to understand, develop and motivate their employees. The company is now composed of seven divisions under the Maritz brand: Incentives, Interactions, Learning, Loyalty Marketing, Research, Rewards and Travel.
Steve Maritz took on the role of CEO in 1998, but his father continued to work actively as the company’s chairman until his death.
The challenge for Maritz was to ensure that as the company moved forward under his leadership, and hopefully continued to grow, that both its vision and culture would remain aligned.
“Vision is a funny thing,” Maritz says. “People tend to think that visions are arrived at mystically. I’m not sure that’s really true. ... I think it starts with a lot of listening. Listening to employees, listening to customers and listening to outsiders so that you can understand the history and why you are where you are. You can understand what your strengths are but also what your weaknesses are, so you can check out different hypotheses and potential approaches that might work.
“It’s something you have to pay consistent attention to. Just being aware of it and acting true to it. One of the keys to having a well-known strategy is that it allows you to say no to a good idea. There’s a ton of good ideas, but you really don’t want to do them all. Knowing what your strategy is helps you determine which of the good ideas you want to pursue.”
As he looked at where his company needed to be to continue growing, Maritz says he sought the input of employees at all levels of the organization.
“I shared the problem and that got everyone engaged in helping with the solutions,” Maritz says. “I was quite honest with all our folks about the challenges we faced. I was quite open to thoughts or ideas about how to fix them. You get a lot of thoughts and ideas that are in different directions. But as you work those through with people and you explore them, you start coming around to best approaches and best ideas, and you go after them aggressively.”
One of the key elements of any ongoing dialogue about change is to create a sense of common purpose among the groups with which you are talking. Taking this step helps ensure that the company’s vision is aligned with its culture and that everyone buys in to the plan and is working toward its fulfillment.
Maritz says he uses many forums to disseminate information and to gather input. Sometimes it’s as simple as a brown-bag lunch meeting. Other times, a town-hall meeting is more effective or maybe an online chat. Communication also takes place through the publication of an internal company magazine and a variety of small- and large-group meetings.
“I try to eat lunch in the cafeteria and talk to people and listen to people and see what they are up to,” Maritz says. “I try to spend a lot of time with customers and talk to them. Hopefully, through all that, we get on the same page.”
The company makes use of employee and customer surveys to gain feedback from both groups in an attempt to align the company around their needs, challenges and objectives.
When the feedback is returned with concerns about the direction that the company wants to go, it is important that they be heard and addressed.
“You can’t shoot the messenger,” Maritz says. “Nobody likes to hear bad news. But I like to hear the real news and the truth, whether it’s good or bad. There is nothing worse than bad news that festers into terrible news. The sooner you deal with those problems, the better able you are to deal with them effectively. The sooner they are dealt with, the smaller they are.
“You don’t want to be the emperor with no clothes. Every CEO needs haberdashers around who are willing to tell them when they are naked and help clothe them. You need a CEO who is willing to listen so when you tell them they are naked, they don’t say, ‘No, I’m not.’”
Maritz says he is also aware that while he is the CEO, his voice is not always the one that commands the most attention from employees.
“While people like to hear from the CEO, the most powerful communication to employees comes from the immediate supervisor,” Maritz says. “Their immediate supervisor, whoever that might be, is the one who they are in the most contact with, perhaps the one who has the most influence over their day-to-day life. What that immediate supervisor is or is not saying about the vision, the strategy, what’s required to get it done, what the plans are, is likely to carry the most weight with the people.”
Show you believe
The vision carries even more weight when the leaders who are conveying it demonstrate confidence in the plan.
“You’ve got to believe it,” Maritz says. “A lot of vision statements are so general and/or vacuous that they are meaningless. If that’s the truth of what the vision is, the first thing you have to do is work on the substance of it rather than the communication of it. If you’re comfortable with the substance of it, that it really is right and believable and the right thing to do, then communicating it should show up every day in your words and your actions.”
“(You need) a sense of common purpose and a sense of perspective about what the vision is or what the job to be done is,” Maritz says.
This means creating alignment between the vision and the organization’s communication and reward systems to get employees focused on a measurable form of performance and then rewarding them for achieving their goals.
“You line all those things up with your communication strategies and your overall objectives, and you try to tighten up the line of sight so that employees are working on things and being recognized for things over which they feel they have some control,” Maritz says. “Then people can get really engaged in your mission. Part of what we do for our customers and for ourselves is to translate business objectives into individual objectives, and then align reward systems and communication systems around that. So that when people are doing the right things right, the business wins and the people win.
“The negative cultures tend to be characterized by a lot of selfish behavior and parochialism. Oftentimes, it is people who think they are doing the right thing or they are doing the right thing for themselves or their own group, but they are sub-optimizing for the whole. It’s the same thing you see on a sports team: selfish players. Business is a team sport. Certainly, you need talent. But you need that sense of common purpose, and you need teamwork not blaming the other guy but helping the other guy.”
When incentives are introduced into the culture to encourage employees to follow the vision, a focus on the task at hand is often achieved that improves both employee performance and the performance of the company overall.
“Reward systems are very, very powerful motivators,” Maritz says. “It’s what capitalism is built upon.
“We use recognition to recognize a job well done or a series of jobs well done for an individual. An incentive or a reward is something that is promised. It’s, ‘Do this; get that. If we achieve X, we will get Y.’ And Y can be anything from a celebration to points or a big-screen TV or a trip to Hawaii, depending on who the person is and what the situation is. We use that mix of recognition for recognizing everyone from top performers to simply saying thank you for a job well done.”
The effort that Maritz Inc. put into its own vision and cultural alignment is something that it looks to do for its clients as well as through the division, Maritz Incentives. Company leaders who do not see the value of incentives should ask themselves if they are getting the highest level of performance out of their workers.
“I’ll bet most of those managers who say that have some form of incentive compensation themselves,” Maritz says. “I always find it remarkable that they think it’s good for them, but it’s not good for anyone else. If you’re getting all the performance you think you should get with that style of management, great. If you think you’re leaving some on the table, maybe you ought to try something different.”
Have fun along the way
When Maritz looks at his company today, he sees an organization that is more honest with itself.
“We’re more together,” Maritz says. “From a purely business standpoint, we’ve repositioned ourselves in some ways. We bought some businesses and sold some businesses to better position our portfolio for future growth.”
While it may not seem very technical, Maritz says the best companies almost always have one common attribute in their vision for success: They have fun in their work.
“Fun is an important part of our overall mix,” Maritz says. “In our vision of where we want to be, it’s to be the best in the business at everything we do. It’s to become our client’s most valuable ally and it’s to be fun to work with. The fun to work with, in my opinion, is very strong. It’s something I believe in. Fun to work with at its core is about performance. ... We should be able to enjoy each other’s company with a sense of good cheer and camaraderie and work like hell to get the job done and satisfy our customers. That is going to make work more fun for everybody.”
HOW TO REACH: Maritz Inc., (877) 462-7489 or www.maritz.com
By Matt McClellan
Kimberly Boyer’s employees own their own destiny. The knowledge that their input can actually change the direction of Adamson Advertising has helped create a culture of ownership at the 60-employee firm, which had 2006 billings of $60 million.
Boyer, president of Adamson, says she gives her employees the leeway to maneuver independently, and she attributes the firm’s success to that freedom.
Smart Business spoke with Boyer about how giving employees freedom allows them to be creative and to excel.
Q. How involved in the day-today operations should a leader be?
Most people who are promoted to a position like mine come from the trenches. When you become a leader, you have to slowly but surely let go of a few things.
Occasionally, when you’re doing changes, it varies. If you had a speedometer and one side of the speedometer is high involvement and the other side of the speedometer is low involvement, it will vary by the individual you’re working with. The goal would be to get everyone close to the middle.
As a leader, there’s no reason for me to be involved in every single detail. If that were the case, we would not grow. I can’t do everything, and I don’t have all the good ideas.
Occasionally, a leader has to be deeply involved just to show commitment. But you have to know when to get out of the way to let your people have the freedom.
It varies by team, the individual, and the goal would be to let people have enough freedom to move forward and not constrain them.
Q. How do you empower employees?
We empower them by asking them to set objectives for their teams. We’ve gone through an entire reorganization this year. We went through some small group meetings, and I laid out the objectives on where I wanted the company to go.
I asked the team leaders to discuss and decide the process how we would reorganize our company in order to meet the coming challenges. By doing it as a group, they owned it. By owning their own destiny, that empowers them.
If you’ve read the book ‘Good to Great,’ I totally agree with (Jim Collins) that you can’t motivate people; they have to be motivated from within. With that type of thinking, we create a culture where people can aspire to creativity.
Our mission is a freedom to be creative and excel. I don’t have to do a lot of it; they inspire each other.
If we can give people the freedom to work together and come up with the best ideas, that’s how we create a quality product. By evolving the culture into that environment, it will help us in the future.
Q. How do you create that culture?
We’ve doubled our training budget this year. When you expose your staff members to new ideas and give them new opportunities to learn, that inspires people.
Great ideas can come from everywhere. So, we’re now training everyone from accounting to receptionists. Sometimes when we have idea sessions, we involve people who aren’t in the roles we’re having ideas about because you never know where a good idea might come from.
The more they know about our business, the better. Training is a key for that.
Q. How do you achieve growth?
You pick and go after new business. And you have to pick the right things to go after things that you as a team have strength in, and that you can absorb within the company.
Sometimes you can get new business and not have to hire anyone. That’s easy.
When you have to add staff, that’s more challenging, but if you have a good sense of the type of people who fit well in your company, it’s easier to manage.
The individual is the key to achieving and managing business growth. If you hire the best employees, you’ll do it successfully.
Q. How do you attract the right employees?
We looked at the personality traits and characteristics of the individuals we all wanted on our teams. So we put those together in a list, and when we presented the plan to our staff members, we told them the characteristics a successful team member will have. The way to attract additional quality employees is by first creating a culture your own staff members love, then they will spread the word.
When we interview people, we have various team members interview them. If you don’t have people who love the company interviewing, then you won’t be able to attract great employees. So our goal is to keep the team members we have now motivated and happy in a culture they enjoy.
Then they, themselves, will attract great employees. We’ve hired excellent people, and they know excellent people.
HOW TO REACH: Adamson Advertising, (314) 727-9500 or www.adamsonadvertising.com
Born: Elgin, Ill.
Education: Bachelor of arts, DePauw University; master’s of business administration, Washington University, St. Louis
What is the greatest business challenge you have faced?
It’s an ongoing challenge. Finding the right people to share the work with and to share the profits. Finding the right people is the only limitation to the growth of any organization. Admit your mistakes. When you find someone who isn’t a good fit or can’t do what’s being asked, address that. That’s tough to be sure. But address it as quickly as you can and as professionally as you can.
What is the best business lesson you’ve ever learned?
Listen to your customers. They will tell you everything you need to know.
Whom do you admire most in business and why?
We worked for years with Peter Drucker. He referred to himself as an adjunct member of top management. How valuable it was for not only that individual but for the person they are responsible to, to have a clear understanding and agreement. What are their primary responsibilities and what are the outcomes of their work? The measures of their performance. How do you continue to help that person to grow and to make an even bigger contribution? He was all about respect for the individual. An awful lot of what I’ve talked about today in terms of our values and culture, it was a part of Edward Jones, but we have so crystallized and we understand it better because of the mentoring and coaching we received from working with Peter Drucker. I believe he has had a bigger impact on our firm than anyone else. And if you read his books today, they are absolutely as good as they were 30 and 40 and 50 years ago when they were written.