Humility could be Gary Olson’s middle name. As the president and CEO of St. Luke’s Hospital, Olson is under no illusion that he could do it all himself.
Olson says that in his 30 years of working for the Chesterfield organization, he’s learned that it takes a team effort to create a strong institution where employees enjoy coming into work every day.
“I’ve been given the opportunity, and if I use the talents of the people here, the skills that they bring to the table, that’s what moves this organization forward, not one individual whatsoever,” he says.
Olson leads his 3,000 employees at St. Luke’s with an emphasis on collaboration, and in fiscal 2007, the organization reported $363 million in total operating revenue, an increase of 7 percent over the prior fiscal year.
“Being surrounded with outstanding individuals makes you want to perform better with them,” he says. “Not for them but with them.”
Smart Business spoke with Olson about steps you can take to make your organization a great place to work.
Define your ideal workplace. For me, an ideal workplace would be a place where you can enjoy coming to work, actually have some fun and accomplish the specific goals that have been assigned to you. This is a place where you can be proud of what you’re doing your efforts as well as the results and it would be an A effort.
An ideal workplace here is an environment where people like to work with you and be around you, and you feel like you’re all working toward the right things for your patients. This work-place provides the resources and tools that a person needs to be able to do the things they’re trained to do. It’s an atmosphere where you can actually have friendships beyond the work-place, if that’s your choosing.
You’ll pull together if something unexpectedly becomes a challenge, and you’ll want to be a part of solving it. Employees will want to contribute to the success of the organization. It’s a place of teamwork as opposed to individual successes.
Start with communication. Business leaders can begin by going out into the different parts of their organization, visiting with staff and having significant amounts of communication accepting and receiving feedback and explaining to individuals why decisions are made so that there’s full understanding.
I want whoever brings me a concern to be able to state it clearly, and I ask that they also state the potential solutions to the concern, as opposed to just handing it to me. Their decisions impact others so, where possible, input should be sought before bringing the final recommendations to me. If they feel comfortable, I would let them make the decision and not have to bring a recommendation to me.
A title can define somebody’s authority, but more importantly, a person’s performance over time defines their authority. They know what they can decide on their own or with their staff, and they know what they should run by management for input before proceeding. When you allow employees to make decisions on their own, it demonstrates that you value their thoughts, their opinions and their potential resolutions to concerns.
Maintain corporate culture. Provide an atmosphere that allows your employees to use the skills that they’ve learned and let them apply those and feel good about them. They have to see results for others, more so than for themselves, and they have to know that they were a part of those positive results or outcomes.
In health care, it comes down to doing things not only with great care but with a caring attitude. Success can be defined as feeling good about what you’ve accomplished and knowing that you’re not done you need to do more each and every day.
Leaders should provide an environment that is constructive, collaborative, communicative, friendly, and all of those fall under the umbrella of high quality.
Solicit feedback. We measure these things through employee opinion surveys. We use an outside firm to do that every 12 to 18 months. When we receive feedback, we share the results with the employees. We priori-tize the results and then develop action plans to improve our performance where it’s appropriate.
If you’re going to ask employees for feedback, you have to be prepared to act on whatever it is. If it’s a positive, we want our fellow employees to know that these are the things we think we’re doing well. If there are some things we could do better on, we’re going to work on a plan with them to improve on those things.
Turn the negatives into positives. As concerns are identified, they have to be addressed. First, identify the employee’s concern and get a good understanding of it. Since the survey is anonymous, you want to give the concern back to the area from where it might have come, and if you can, bring in individuals that identified that concern and ask them to further elaborate on it.
Hopefully, the people identifying the concerns can be part of the solution, as opposed to them saying, ‘Here’s the problem. Now you fix it.’ Then, they’ll work with the employees who have the ability to help rectify those concerns.
Get that group to develop a game plan and identify expected results that everyone can be happy with ... and then monitor the success. You want to give that A effort. Sometimes you have great efforts and the results aren’t there, but the efforts matter.
HOW TO REACH: St. Luke’s Hospital, (314) 434-1500 or www.stlukes-stl.com
Business owners and executives who do not allot the time and budget for valuations could suffer unexpected consequences, including tax penalties and lack of compliance with financial reporting rules.
“Post Sarbanes-Oxley, auditors are taking fair value measurements and related requirements seriously,” says Donna Beck Smith, who leads the financial advisory services (FAS) practice at Brown Smith Wallace LLC.
But, before enlisting a professional for a valuation, check for certification and, for highly specialized or regulated industries like health care, banking or insurance, be sure the individual is experienced in those fields.
“Valuations require extra training and experience, and it’s risky if you consult with someone who does not have that expertise,” says Brad Pursel, a principal in the FAS practice at Brown Smith Wallace LLC.
Smart Business spoke with Smith and Pursel about how to prepare for a valuation and how to select a reputable appraiser.
When should business owners or executives call on a professional for valuation services?
Closely held businesses cannot easily convert their interests into cash equivalents for gifting to individuals or charitable organizations. A proper valuation establishes the worth of interests so owners can pursue estate tax planning. To comply with tax and financial reporting rules, there are requirements related to the granting of stock-based compensation. Those grants must be at fair value or the recipient and grantor may suffer negative tax consequences. Valuation frequency will depend on how often the company grants equity-based compensation but the valuation must not be more than 12 months prior to the grant date. Additionally, whenever a company makes an acquisition, financial reporting rules require a fair value analysis of assets and liabilities acquired as part of any transaction. Valuations are also necessary when a company owner wants to buy out a partner or invite another individual to take ownership in the company.
How should you prepare for a valuation?
First, a valuation professional will ask for audited financial statements, and if those are not available which is often the case with smaller, privately held companies the owner will be asked to supply past tax returns. Owners should prepare to discuss their projections for the future and goals. Where do they see the business going? What are the company’s cash flow drivers? Who is its customer base and supplier base, and who are key industry competitors? Common mistakes business owners make is waiting until the last minute to find a valuation professional and choosing a service provider based on price. In most instances, owners should really plan on a minimum of four weeks for a proper valuation. Six weeks or more is even better. Rather than shopping price, find a professional who is best qualified to work up a valuation that will withstand scrutiny. Getting an inferior product that might be lower-cost can have serious implications down the road if the IRS reviews the valuation and assesses penalties. For valuations necessary for financial reporting purposes, an inferior work product may lead to increased accounting and valuation fees if the company’s auditor finds problems with the methodologies and/or assumptions used by the appraiser.
What due diligence is necessary before performing a fair value measurement?
Start by checking credentials. Valuation experts should have a long history of relevant experience. They must keep abreast of changes in the appraisal and valuation industry, which is ever-changing. Valuation should not be an area of occasional practice. With evolving financial reporting rules, there is a pretty good chance that an accountant moonlighting as an appraiser will overlook details. That said, find out if the person you want to hire for the valuation is a member of the American Institute of Certified Public Accountants, the American Society of Appraisers or the National Association of Certified Valuation Analysts. These organizations require a course of education with written exams, field experience and continuing education to maintain accreditation.
What do business owners need to watch for in the financial reporting world?
There are new standards that will be effective at the end of this year that could have significant implications for companies that make acquisitions and the financial reporting consequences associated with those acquisitions. In the past, companies have not had to value certain contingent considerations that were included in the transaction. If the seller was eligible to receive an earn-out based on post-acquisition performance, in most instances, there was no recognition of the earn-out as of the acquisition date. Going forward, companies must value such contingent considerations of the acquisition date and any changes in value will flow through the income statement. In this situation alone, the scope of valuations will increase.
Also, as baby boomers that are running privately held or family businesses begin to pursue succession planning, there will be greater ownership turnover and, as a result, demand for valuations to ensure fair measurement of company interests. You know the saying about being ‘penny wise and pound foolish’? That applies to valuation. You may be enticed by a low-priced valuation service, but on the back end, after you go through an IRS review, you may rue the day you made the decision to go with a less qualified purveyor.
DONNA BECK SMITH leads the financial advisory services practice at Brown Smith Wallace LLC. BRAD PURSEL is a principal in the FAS practice at Brown Smith Wallace LLC. Reach Smith at DSmith@bswllc.com or (314) 983-1259. Reach Pursel at BPursel@bswllc.com or (314) 983-1344.
When renewing a lease, getting a quality tenant rep involved early can pay huge dividends, according to Piers Pritchard, senior associate, and Jay Holland, senior vice president and principal, both of Colliers Turley Martin Tucker.
“Your landlord is in the real estate business; brokers level the playing field,” Pritchard says. “Brokers provide expertise so you can concentrate on your core business.”
Smart Business spoke with Pritchard and Holland about what services tenant reps provide, the importance of making contact early and what types of savings can be realized.
What benefit does a quality tenant rep bring to the table?
A quality tenant rep provides a broad spectrum of services. It’s not as simple as just showing buildings there is a wide array of knowledge that is necessary for every aspect of a transaction. This includes accurate and up-to-date market information, construction expertise and a detailed knowledge of lease documents. In addition to identifying properties and providing expertise in the negotiation process, a good tenant rep will provide a comprehensive financial analysis that allows their clients to compare alternatives on an ‘apples to apples’ basis. By utilizing the services of a quality tenant rep, a company can reduce occupancy costs, increase profitability, mitigate lease risks and minimize time invested. A quality tenant rep will also interview architects on behalf of tenants. If a tenant is going to move or renovate its existing space, it will need an architect to design the space. A good tenant rep interviews architects and negotiates architectural contracts at no charge.
How can a tenant rep help a company gain leverage during the negotiation process?
When negotiating, it’s critical to have as much leverage as possible. When conducting real estate negotiations you gain leverage through a number of factors. Some of those include using market comparables knowing what other deals the landlord has done, what the market dictates, what the landlord acquired the building for, upcoming lease expirations and if the owner has any intentions on selling the building. All of these factors affect a lease renewal and good brokers will use this information to gain leverage with a landlord, whether it’s an existing landlord or potential relocation.
At what point should a company contact a tenant rep?
The lead time necessary is dependent on the size of the tenant. The largest tenants need to engage a tenant rep several years prior to lease expiration so new construction can be considered. For smaller tenants, it’s important to contact a tenant rep at least 12 to 18 months prior to a lease renewal for several reasons. One, the lease renewal/relocation process, when done properly, simply takes that much time. Secondly, and more importantly, in order to properly assess all of a client’s options it’s imperative to review, explore and negotiate any relocation options before a tenant hits renewal option dates.
Typically, tenants will have the option to renew their lease with an option time between 6 and 12 months before the lease expires. It’s important that market research is completed before that option date, because if it’s not, you’re exposed to your existing landlord. Tenants that pass through renewal options are often treated differently than those with options as their ‘parachute.’ Landlords can stick tenants with above market deals simply because the tenant does not have enough time to move. Being ahead of the curve is critical.
What types of cost savings can be realized by utilizing a tenant rep?
There are two types of savings, quantitative and qualitative. Quantitative savings include how much you lowered the rent, how much the construction allowance was increased, and how much free rent a tenant received.
Perhaps even more significant and where a good broker can drive value are the qualitative items, which are more difficult to measure. That’s where you really see the benefit of having a strong tenant rep. Items in leases like renewal option language, operating expense caps and exclusions, termination and expansion options, white-box definitions, subletting rights and code compliance are hard to quantify upfront because you can’t associate a dollar value to them. But over a three-, five- or 10-year period whatever your lease might be you are certainly going to have to reference the lease for certain items. Qualitative items are hard to identify upfront, but often provide the biggest benefit in the long run.
What questions should be asked when meeting with a prospective tenant rep?
First, make sure the rep has adequate experience with similar types of tenants and transactions in the market. Secondly, ask a prospective tenant rep to answer the most important questions upfront, including: Specifically how are you going to save me money? How are you going to reduce my occupancy costs and increase my company’s profitability? What do you know about my building and landlord? Every good broker should think from the landlords’ perspective. What keeps them up at night? What specific issues are they having in the building? Are there other tenants with leases expiring in the near future? Are there tenants moving out? If there is a tenant moving out, the landlord will be more sensitive to your lease they’re already losing one tenant and certainly don’t want to lose another.
PIERS PRITCHARD, senior associate, and JAY HOLLAND, senior vice president and principal, are both of Colliers Turley Martin Tucker. Reach Pritchard at (314) 236-5477 or email@example.com. Reach Holland at (314) 236-5446 or firstname.lastname@example.org.
“There is always something unknown that is going to pop up,” Reeve says. “Even though you plan so much or so well, there is always going to be something that you don’t have control over.”
Five years ago, it was the cost of insurance that skyrocketed after the terrorist attacks in the United States. More recently, it’s
been the rising cost of fuel that has forced companies, such as MMS — A Medical Supply Co., to tighten their budgets.
Reeve, the co-owner, president and CEO of MMS, says the key to good leadership through uncertain times is having the ability to respond to a situation both promptly and without panic.
This is much easier to do when you share the leadership of your business. By spreading the responsibility for running your company to others, you open the door to a wealth of solutions you may not have come up with on your own.
“You can have the greatest quarterback in the world, but if you don’t have a team, that line will never protect him,” Reeve says. “Business is no different. If you have a good team surrounding you, a lot of problems are handled long before they hit management.”
Reeve has taken MMS from a $35 million company in 1996 to $336 million in 2007 and now has 450 employees.
As the company has grown, he has not only had to assess how involved he should be with day-to-day problems but also whether the people under him are the right ones to keep the company moving forward.
The key to managing through such growth is to stay in touch with what your business needs. By doing so, you’ll know which of your employees have what it takes to grow with you.
“In some cases, you’re going to have to end up rocking the boat,” Reeve says. “You make some decisions and you move ahead.”
Here’s how Reeve abdicated many of his day-to-day responsibilities to focus on long-term strategic decisions and used his own knowledge of his people to figure out where they fit in the big picture.
Don’t try to be a hero
One of the employees who perhaps had the most difficult time adjusting to the significant growth at MMS was Reeve.
“I was actually running myself ragged,” Reeve says. “I handled the insurance, banking, sales, operations, purchasing of equipment, negotiating our leases, and our acquisition team was really one person. I couldn’t keep up anymore. It was impossible. That’s where I had to be flexible.”
One of the first steps was to hire Tom Harris as his executive vice president.
“Tom came on board, and I shifted a tremendous amount of things to Tom,” Reeve says. “At this point, my job is much different than it was five years ago. I still handle our leases, and I do a lot of the financials and still have relationships with the banks, but it’s much different on the day-to-day stuff.”
The hard part for Reeve was staying away from many of the tasks that had been his responsibility.
“It’s relatively easy to pass it off, or at least, it was for me,” Reeve says. “The hard part was staying away. Once I passed it to Tom, then it was hard for me not to say, ‘Wait a minute, you ought to be doing this,’ or, ‘I would do [it] this way.’ That was probably the most difficult thing. To keep telling myself, ‘If I get involved, then I might as well not even have given it up. If I’m going to continue to do all those things, it doesn’t mean we still can’t sit down.’”
As the CEO, you may have to literally remind yourself that you have other employees and a management team and a staff for a reason. It’s not all on you to make your company go, and once you delegate, you have to let your people do their jobs.
“If you really want to give something up, you have to let somebody else go with it or else they will never attain the ability to even do it,” Reeve says.
And just because you’re turning over a task or two to another person, as the CEO, you still have every right to ask questions and be in on the discussion of key issues.
“You’re always going to be there,” Reeve says. “If I see us wavering from where we’ve all agreed to go, at that point, it doesn’t mean I won’t say something. There are always two roads to get to the same place.”
Shifting responsibility is a gradual process and works better if you don’t just dump a job on another person without any support or orientation to the new duties.
“You work with them a little in the beginning, and as you go along, you just go ahead and, more or less, give them the responsibility and back away,” Reeve says. “It’s a continuing process. We try to empower people to make a lot of their own decisions. If they make bad decisions, you rein them in. But if they are making good decisions, we’ve empowered them to move ahead.”
Show you are flexible
Once his own role in the company was more clearly defined, it was time for Reeve to figure out who among his employees had what it took to be part of his growing and evolving business.
“You’ve got some loyal employees that helped you grow from one level to the next, and they either have to be let go or have to be moved into different positions,” Reeve says. “We’re almost like a family company. Initially, it was very difficult for us.”
Some people were allowed to continue on, resulting in mistakes being made along the way.
“That’s probably one of my shortcomings,” Reeve says. “I probably give them too many chances. In some cases, I’m being critical of myself, and I knew the decision had to be made, but I just wanted to give them another chance — and then I wanted to give them another chance.”
If you do it right, it’s OK to give people a chance to prove themselves. One of the best ways to do this is by witnessing the the failure to demonstrate the initiative to improve.
“If that person wants to be in that department and doesn’t really show that they want to grow, there’s no way we can,” Reeve says. “If that person shows a little initiative, it’s looked at, and they’ll be given opportunities to grow.”
Oftentimes, an employee just isn’t in a role that suits his or her talents and needs to work in a different area.
“You sit down with the party that you are having the problem with and lay out what’s going to be happening,” Reeve says. “There’s opportunity for everyone. We’ve taken service reps and they’ve become our star salespeople.”
You’ll have a better awareness of what your employees can and can’t do if you get out of your office regularly and talk to them.
“I will have lunch in the employee lunchroom probably three days a week,” Reeve says. “Communication is important in any company so everybody knows where you’re headed and what you’re doing.”
The idea is to instill in your employees that you want their input and their feedback about how the company operates.
“By nurturing that flexibility, everybody is always looking for a better alternative,” Reeve says. “If somebody comes up with something that’s a little different, you don’t slam it and say, ‘God, how stupid is that idea?’ If they come up with an idea, let’s discuss it and talk about it. Maybe the next time you come to a meeting, give us all a set of those ideas in advance so we can do a little thinking before the meeting.”
If it becomes clear that a given employee is not going to fit and is not capable of filling a role in the company’s future, you need to be honest and make a change.
“If that salesperson doesn’t have the desire to go out on their own, maybe that person, for whatever reason, doesn’t have some of the skill sets to do that or the discipline or personality or self-confidence to do that,” Reeve says. “Maybe there will be somebody else who has all the skill sets, and they will move very smoothly right into it.”
Reeve says it’s tough when you’re talking about an employee who has been with the company for a long time. He says he felt the respect among his staff for giving second and third chances to personnel searching for a new role.
“But I think had I gone further, I think I would start losing respect,” Reeve says. “Sometimes, if you’ve given too many chances, at some point, they have to step up and do something.”
Show that you care
One of the ways you gain respect and the buy-in of your people is to show that you care about them as people in addition to the fact that they work for you. At MMS, there is Employee Appreciation Day.
“We have little cards made up, and all the managers get them and they are supposed to write a little note to all their employees,” Reeve says. “In it, we’ll throw in a little gift card. We try to make all our employees feel important because they are.”
Part of feeling appreciated is being kept in the loop about what’s happening. MMS makes use of its marketing department to communicate not only to media and people outside the organization but also to its own employees.
“One of their functions is to take the information in the newsletter and make sure that employees understand what is happening,” Reeve says. “It’s no different than it is for advertising. We work with our own employees and make sure they understand what we’re doing, so nobody is in left field and they don’t know.”
By being open and communicative, you can help break down the barriers that may exist between you and your employees.
“A lot of times, the problem with being the head of a company is everybody treats you a little bit different,” Reeve says. “You build a trust level with certain people.”
Have your managers sit down with employees in groups and discuss company strategy. Set goals and objectives and implement bonus plans for employees who strive to meet those targets.
“A manager will sit down with employees and say, ‘OK, what do we need to do within our own group or department?’” Reeve says. “All those goals and objectives will be in a master plan to help the company continue to grow. ... People know there is a difference between when you are genuine and when you aren’t. Try to do things with the employees in mind as well as the bottom line.”
As far as analyzing his own role in the company, Reeve says he will always be his own worst critic.
“I think I’d be a terrible judge of myself,” Reeve says. “I won’t say it’s bad. But I try to do things well. I work harder to do things than I’d ask somebody to do for me.”
But in his new, more team-oriented role, there is an adage that Reeve tries to live by.
“Pigs get fat and hogs get slaughtered, so don’t try to take on too much,” Reeve says. “Because that can bring you a whole new set of problems.”
HOW TO REACH: MMS — A Medical Supply Co., (314) 291-2900 or www.mmsmedical.com
When making a real estate purchase, many details must be scrutinized. Failing to exercise proper care and planning prior to the completion of a transaction can be potentially catastrophic. That’s where due diligence comes into play.
Independently verifying all representations made by a prospective seller and uncovering relevant information that has not been disclosed but is important to the buyer can help you avoid expensive mistakes.
“Due diligence is a buyer’s investigation of an income-producing property during the sale process,” explains Marla Maloney, a senior vice president and principal with Colliers Turley Martin Tucker.
Smart Business spoke with Maloney about due diligence, common mistakes made during the process and the importance of a strong team of professionals.
How do you make the most of due diligence?
It is important to complete the physical inspection early in the process to ensure there is adequate time for inspectors to submit their reporting. If there is additional research that needs to take place, a structured timeline will allow the buyer to dig deeper. It is also important to manage the documentation flow so that there is time to review the materials.
How long does the due diligence process usually last?
Typically, the buyer and seller agree to a 30-day period. If the buyer finds significant deferred maintenance, if there is a hiccup with financing or if the seller is not diligent in handing over applicable materials leases, surveys, the last elevator inspection, contracts that are placed on the property for services, etc. the buyer will likely ask for an extension to have time to analyze and review the documentation as it relates to the property’s commitment.
What are some common mistakes that are made during the process?
There is so much exposure for buyers if they don’t fully understand the implications of code compliance and deferred maintenance. Let’s say a space has been vacant for a number of years. The previous tenant might not have been required to have a sprinkler system, but now it is mandatory. Maybe the building only has risers, it doesn’t have sprinklers on that floor, so the previous owner could have gotten away with it. However, if the code has evolved the new owner may no longer be grandfathered and may not be reflecting that cost in its pro forma, which could significantly affect the deal.
Sometimes, buyers assume unnecessary liabilities by failing to utilize professionals to complete their inspections. For example, a garage consultant should be hired to do core samplings of the parking garage. In the Midwest, there is a lot of deterioration of parking structures from deferred maintenance because of salt and chemicals that penetrate through the membrane into the actual structure of the garage. Perhaps on the outside it looks physically sound, but it could have a significant amount of deferred maintenance that will require the parking garage to be out of service for an extended period of time.
What type of research should be conducted in regards to current tenants?
It is important to examine leases and rent rolls as well as the payment history and creditworthiness of the existing tenants. It is a good idea to interview current tenants because you want to make sure they are happy and you can learn a lot about their future plans. A tenant may say it loves the building and its space, but the building is 100 percent leased and it is a growing company, so when the lease expires in two years, it will need an additional 10,000 square feet. The writing seems to be on the wall that the tenant will be relocating so you need to note this in your pro forma.
How can a company benefit from professionals when going through the due diligence process?
The benefits far outweigh the costs. Professionals understand and are aware of building codes. If you are engaging professionals, they can mitigate potential cost and help you understand the risks involved with the property.
Who should be on the professional team?
A real estate professional will act as a fiduciary on your behalf. An attorney will pore over the leases and identify the commitments that have previously been made to tenants. Due diligence includes an analysis of the incoming revenue stream. A tenant may be paying $22 per square foot in years one through three of its term, and in year four, the rent may go down. Without an attorney physically going through the documents this might have been overlooked. Also, in most cases, an environmental consultant, garage structural engineer, electrical engineer, mechanical engineer, surveyor, insurance broker and appraiser should be involved.
MARLA MALONEY is a senior vice president and principal at Colliers Turley Martin Tucker. Reach her at email@example.com or (314) 746-0342.
Tom Fleming is proud of his roots and the traditional upbringing that he received from his parents.
Growing up on the not very mean, but also not very wealthy, streets of St. Louis, he was taught that those things in life that are worth having are also worth your own blood, sweat and tears. Fleming paid his own way to attend a private high school and also bought his own baseball glove.
“I had my first job delivering newspapers,” Fleming says. “It was safe for an eight-year-old to be walking around delivering the local newspaper on a Saturday night. You develop that understanding that if you want something, you work for it. That’s built into me.”
It’s also built into the way he runs Supplies Network, a private wholesaler of information technology consumables like ink, toner and CDs, which generated $345 million in revenue in 2007. But he has learned that being a good leader means accepting that not everyone is wired exactly the same way that you are.
“I’m a traditionalist at 63,” says Fleming, the company’s founder and CEO. “I have a tendency to say, ‘This is the way it is, this is the way it was for me, and I have a work ethic, and this is how I dress, and this is how I think.’”
The trick for a CEO is to take your people of differing backgrounds and build a cohesive group that will enthusiastically follow your lead. And you need not look any further than what parents do for their children to learn how to do so.
“The best example of leadership in this country is good parents,” Fleming says. “Not only do they have unconditional love, but they have an unconditional sense of responsibility.”
In other words, a good leader is constantly focused on taking steps to make his or her employees better rather than basking in the glow of being the CEO.
“You can sit down with the child and say, ‘Look, this is the way it is, and this is what smoking will do to you,’” Fleming says. “‘I don’t care whether you like me or not because I love you and you’re going to get the best I can give you as far as my advice.’ We can do it as parents, and we need to do it as managers and leaders.”
The best way Fleming knows to serve his 185 employees is to show up each and every day, work hard and set a solid example for them. So when he recently decided to step back a bit from his responsibilities by taking Fridays off, he took a 20 percent pay cut to support his reduced workload and to show he wasn’t above his employees.
“You have to have a single standard of behavior,” Fleming says. “I can’t expect my leadership team to behave any differently than I behave. If I don’t demonstrate strong leadership skills, not only will they not follow me, but someone will probably try to take over as alpha.”
Here’s how Fleming has grown Supplies Network by earning the respect of his employees by both respecting their differences and engaging them in his contagious work ethic.
Show them that you care
Each morning when Fleming arrives at work, he makes sure to notice the cars that are parked outside the office.
“I have 185 employees, and of those, probably 130 or 150 are here,” Fleming says. “There’s 130 cars out there that need payments. You realize everybody does something with their paycheck. They send their kids to school. They buy clothes for their kids. They make a mortgage payment and a car payment. You see all those automobiles staring you in the face, and it’s scary. That’s a huge sense of responsibility.”
It’s also a quick and easy way for Fleming to remember that he’s not the only one that makes his company go. As a CEO, you need to remember this, and you need to make sure your employees know it, as well, if you expect them to keep following you.
“I have to make sure the people see me, that I’m a full-time employee,” Fleming says. “I walk around the building; I stop in their offices once in awhile and ask how they are doing. They have to see me at meetings. They have to know that their leader is here with them and engaged in the business and understands the challenges of the business.”
Fleming and his executive team meet quarterly with employees to discuss the state of the company, whether it’s good news or bad news.
“We share where we are with the goals and objectives in the company,” Fleming says. “The basis of all that sounds kind of corny, but you really have to have a mission statement and employees need to know what the mission statement is. It basically says this is the business we are in and this is how we’re going to accomplish success in this business. ... If they don’t know, how are they going to help you?”
One of the challenges to remaining in touch with your employees is growth. Supplies Network now comprises an operations group, a product management and marketing group, and a sales group.
Fleming says it’s OK to let each group or division have its own experiences once in awhile to help its members bond in their own way.
“They can go to a manager’s house for a barbecue,” Fleming says. “I like that stuff. A lot of companies don’t like that. They don’t want the manager inviting their department over for dinner or a barbecue at the house because they are concerned about what they are doing. Are they creating a microculture within the organization? If you trust your managers, that’s not going to happen. If you don’t trust your managers, then get rid of them.”
To keep everyone attuned to the broader company they all work for, schedule some functions for the entire group of employees once in awhile.
“Give them an opportunity to get to know people in other departments,” Fleming says. “You can still keep some sense that we are one corporation, but we have satellite groups within that corporation.”
When Fleming delivered papers when he was younger, he felt the responsibility of getting each of his customers what they had paid for. That sense of accountability to the task at hand is something he has tried to instill in his employees at Supplies Network.
“You have to write good job descriptions,” Fleming says. “They need to understand what their job description is. ‘This is what I want you to do. Can you commit to this? Do you have the ability to do this? Do you have the personality and the characteristics to do this? Do you understand what I want you to do?’”
To drive home the importance Fleming places on accountability, senior managers at Supplies Network are each tasked with drawing up a company dashboard under the watchful eye of Fleming and his chief operating officer.
The dashboard is a one-page document filed every month in
which senior managers report on everything that is going on in their department.
“It’s the report on their responsibilities and the result of their responsibilities and those become part of our executive conversation,” Fleming says.
The act of composing the monthly report puts the onus on the senior managers to get their work done.
“They will realize themselves before you even have to talk to them that they didn’t accomplish something that month they were supposed to accomplish,” Fleming says.
These accountability failures will be fewer in number if you offer support and encouragement that they will bounce back.
“You establish rules and goals and then you have to allow them to make mistakes,” Fleming says. “If they are afraid you are going to jump down their throat every time they make a mistake, they’re never going to grow. You allow them to make mistakes and then you measure their execution.”
Peer pressure can also play a role in reducing mistakes. By sharing the reports at executive committee meetings and laying out everyone’s goals and objectives in an open manner, the burden of accountability becomes even more keenly felt.
“If the development side of I.S. is behind on programming and because of that, we’re having a difficult time in one of our distribution centers, the director of logistics is going to bitch about it,” Fleming says. “They hold each other accountable.”
As your business is meeting its goals and experiencing success, you can’t ever take anything for granted.
“The question I always ask ourselves, and I tell my dealers to ask themselves is, ‘Are they important to their customer? Are they important to their supplier? If they went out of business tomorrow, would anybody care?’” Fleming says.
“We live in such a prolific society that there is always an alternative. If McDonald’s is shut down, we can go to Burger King. There’s always an alternative. How do we as business owners, whatever business we are in, how do we remain relevant, fresh and important?”
The answer is to constantly be ready to reinvent what you do and be able to communicate the changes that you make.
“That’s the hardest time when things are going really well,” Fleming says. “You have a tendency to fall asleep at the wheel. You sit back and you say, ‘We’re good. Our business model is really cranking, and people really love us.’ I’ve developed the ability to get more scared when things are going good than when they are going bad.”
When times are tough, people fear for their jobs and arrive for work early and leave late. Everyone is asking what the major problem is and what needs to be fixed.
“Everybody is working their ass off when things are going bad,” Fleming says.
Conversely, when sales are up and profits are on the rise, there is a natural tendency to relax.
“You have a lot of selling days,” Fleming says. “If we had a bad day today, we’ll make it up tomorrow. You can never make up yesterday.”
You need to always be trying to improve. And when things are going well, you need to study why it is that your business is succeeding.
“Many times, things are going good for a corporation because of an exterior influence,” Fleming says. “It has nothing to do with us. There’s a lot of companies right now that sell to the federal government that are having wonderful years. War is good for some businesses. It has nothing to do with them.
“It’s a supply and demand situation. When things are going good, I’m always more scared because I realize the wind has our sail and the wind is going to stop, and when it stops, you better start rowing.”
By being open with your employees and regularly setting goals and tracking your progress toward those goals, you can help ensure you are ready when the wind stops blowing.
“If you want to be an island, be an island,” Fleming says. “Go back to being a proprietor and you are your own employee and you can live by whatever rules you want. The minute you incorporate the help of other people, you have to be very understanding of who those people are. We’re all different.”
HOW TO REACH: Supplies Network, (636) 300-4001 or www.suppliesnetwork.com
Is your organization one that embraces people from all backgrounds and realizes that you have much to gain by doing so?
“A diverse workplace or institution is one where diversity is not only recognized but embraced regardless of ethnicity, creed, color, age, disability, sexual preference, etc. with respect and dignity, through a lens that is open to everyone,” says Dorothy Davis, director of transfer recruitment and co-chair of the diversity committee at Fontbonne University. Davis explains that “strive” is a key word when working toward diversity.
“Diversity will never be a completed process,” she says. “There is no period at the end of the sentence. You’re always building. It’s a spiral process that keeps turning and turning.”
Davis emphasizes that diversity is truly all about inclusion not exclusion. Organizations that are willing to look to and learn from others will have a competitive advantage in the years to come.
Smart Business asked Davis how companies and institutions can create environments where the differences in others are appreciated.
Why is diversity in the workplace so important in today’s business world?
Diversity lends a sense of uniqueness to a company or an institution. We can think of diversity as being a woven quilt a beautiful work of art. Patches and stitches that represent differences in one another, such as color, ethnicity, religion, age and other important factors. Diversity in the workplace provides a distinct advantage in an era when we need flexibility and creativity in order to have a competitive advantage.
What should all CEOs keep in mind as they strive toward diversity?
Striving for diversity is an evolution we must always remember that our society is diverse. Diversity in the work place is eminent companies and institutions should focus on making diversity a top priority. Striving for diversity is about change, growth and understanding the world around us. Our environment is competitive whether we’re hiring employees or recruiting students.
What are some things top management can do to ensure a diverse work population?
The commitment starts at the top by developing a diversity action plan a company-wide initiative. It should be a plan that is developed in collaboration with human resources (HR), but not separate from HR’s primary responsibilities, which often lie in hiring practices, compliance regulations, etc. Diversity in the work place focuses on maximizing the ability of all employees so that they can contribute to the organizational goals and objectives. The bottom-line of having diversity in the work place is the bottom-line.
How does diversity on campus benefit students and their future employers as they enter the work force?
Diversity on campus benefits students in so many ways. It’s important that students recognize and appreciate the contributions that other groups have made in our society.
Does diversity matter? Yes! It is the responsibility of a university to exhibit leadership by providing an environment that is inclusive for all. Universities must take the initiative to incorporate diversity throughout their curriculums by expanding campus-wide activities that offer inclusion, engagement and participation. Institutions need to create a learning environment that fosters intellectual and social growth among all students. Diversity broadens the educational experiences of all students so that they are prepared to meet the challenges and opportunities of a global society. A university should be where students go to prepare to become leaders of tomorrow.
Looking forward, what challenges will tomorrow’s work force bring?
I wouldn’t say challenges, but opportunities opportunities that are exciting! We have baby boomers changing careers; a very vibrant population that has a great deal of offer. There are new immigrants that will help shape our society by offering us new cultural perspectives. We must realize that diversity is threaded through every aspect of our lives. We must be willing to challenge and change the practices that present the barriers that individuals and groups experience.
Companies and institutions must be willing to provide resources to train new and current employees. Our society is global our neighbor next door no longer looks exactly like us. Remember that diversity is a beautiful work of art a woven quilt with unique patches and colorful threads, and one that’s stitched together to make one large masterpiece.
DOROTHY DAVIS is director of transfer recruitment and co-chair of the diversity committee at Fontbonne University. Reach her at (314) 889-1475 or firstname.lastname@example.org.
Born: St. Louis
Education: Bachelor of arts, history, Princeton University; Juris doctorate degree, Washington University in St. Louis
What is the best business advice you’ve ever received?
How important the combination of critical listening and understanding the point of view of the other person involved is. There is a book I particularly like, ‘Difficult Conversations,’ by Douglas Stone, Sheila Heen and Bruce Patton.
When you go into a difficult conversation, there is a point of view or a perspective from the other person that you need to try to understand. It’s not all about going into that and being there with your perspective and knowing what the right answer is at the end and arriving there.
It’s much more about trying to communicate your perspective effectively and listen to them and realize the real truth about why you’re having that difficult conversation. It’s not about placing blame. There’s blame on both sides.
It really changes your perspective on difficult people and difficult situations.
When I’m listening to somebody talk about an issue, one of the things I have to decide is, ‘Is this something that needs to be fixed or is this something that just by listening and being empathetic, that’s what the resolution is?’
My analogy is to my marriage. I have learned that more than half of the time, if not 80 to 90 percent of the time, it’s not about fixing the problem. Guys want to listen and their first inclination is, ‘Let’s fix that.’
Their spouse is not looking for a fix. It’s very much the same in business. Is this something that I should be fixing? Or by listening and understanding where they are coming from, is that what the real need is?
If the thought of giving presentations or speeches leaves you breaking out in a sweat, rest assured that you don’t have to be a natural to be an effective speaker.
“With preparation and practice, anyone can give an effective presentation,” says Heather Norton, Ph.D., associate professor of communication at Fontbonne University. “Presenting yourself well in the workplace is critical, especially because it is so difficult to build credibility, yet so easy to lose it.
Although good communication skills have always been important in the business world, Norton surmises that expectations have grown during the last few years.
“Good communication skills are one of the things employers look for most in new hires,” she says. “Quite often, people with good communication skills move up more quickly through an organization.”
Smart Business spoke with Norton for some tips and hints on getting and holding your audience’s attention.
What can be done beforehand to ensure a successful presentation?
Too many times people think ‘good’ presentations just happen, so they wing it, and then wonder what went wrong. The key is to prepare and practice beforehand, and to follow these tips:
- Know your purpose. What message or main point do you want to get across? What is your ultimate goal?
- Know your material. You will be much more persuasive and effective if you are familiar with the product, the research and your pitch.
- Know your audience. Understand their level of familiarity with your topic so you can target your message effectively. You don’t want to tell them things that they already know, nor do you want to talk over their heads.
Consider the best way to convey your information to a specific audience. Do you really need to do yet another PowerPoint presentation? Can you just be clear about the points you are making, perhaps by using sign posts in your speaking?
Next, organize the material in logical ways (e.g., steps they can take). Don’t just jot down your thoughts. What information does your audience need first? Finally, do a verbal run-through of your presentation ahead of time. Practice it out loud sitting in your office or talk it through with someone not familiar with the subject matter who can tell you if there are any unclear areas.
What is the most important thing someone can do moments before a speech?
You’d probably think it was to reread your notes, but it’s not. Sit quietly, breathe deep, and smile! How can the presenter make sure he or she looks comfortable? Nonverbally, fake it. Most times no one can tell you’re nervous. Move away from the podium. Walk about, but don’t pace. Use natural and fluid hand gestures. These things will help you look confident and will also help eliminate physical jittery nervousness. Verbally, have the confidence to stop on occasion to ask questions at logical points. Let the audience believe you really want them to ask questions. Avoid using filler words, such as ‘like,’ ‘uh’ and ‘um.’ Take audible pauses. Don’t read off notes or a PowerPoint.
How can a presenter use verbal and nonverbal techniques to engage the audience?
Verbally, offer an effective attention getter. Stating a quick fact is a good way to begin a fact that surprises them and/or establishes the importance of the topic will let your audience know that the presentation is worth listening to. The fact should be related to the topic don’t just come in and flip the lights off! People don’t ‘come in late well’ to speeches. You have to get their attention from the beginning. Be careful with humor. Don’t start with a joke unless you really know your audience well, and you really are funny. Use a clear tone of voice and a volume that is appropriate. Women tend to speak more softly than men. Audiences tend to tune out people who speak too softly.
Nonverbally, the most important thing you can do is make eye contact. Don’t look over their heads. You don’t have to look at every person but look at segments of the audience. This will convey that you care whether they are ‘getting it.’ And if you are paying attention to them, it makes them pay attention to you.
What’s a good way to end a presentation?
First, signal that you are moving to the end, and then proceed. Don’t go on for 10 more minutes. Next, remind the audience of the main points covered. End with a memorable statement or leave them with something to consider. If it is a persuasive presentation, provide a call to action. In business, many times you want the audience to do something (e.g. ‘take these three steps’). Tell them what you want them to do. Be specific.
HEATHER NORTON, Ph.D., is an associate professor of communication at Fontbonne University. Reach her at email@example.com or (314) 719-3641.
Born: Kirkwood, Mo.
Education: Bachelor of science degree, civil engineering; master’s degree in business administration, University of Missouri
Riney on starting a business: I think a good rule is never underestimate how long it’s going to take for a business to get off the ground and be successful. Always have probably twice the money set aside that you thought you needed, maybe three times as much, in case things don’t progress as planned. Most of us are too optimistic about our ability and about the public’s reaction to whatever service we’re going to provide them.
Riney on patience: If it doesn’t happen in six months, you’ve got to be just as enthusiastic in 12 months. And if it’s not happening in 12 months, you need to reformulate your offering a little bit. Hang in there and have the passion and stick-to-itness to continue to modify it until you get something that does resonate and work. If you give up too quickly, you probably will give up a loser.