August Movers and Shakers

Bob Seaman, C.C. Hodgson Architectual Group

Bob Seaman, C.C. Hodgson Architectural Group

SS&G recently announced the promotion of Jim Dannemiller, CPA, to managing director of its Akron office.

Dannemiller will focus on growing the Akron office, mentoring new staff, building the firm’s presence in the community and will continue to serve clients. He will be co-managing the office with Mark Goldfarb, CPA. Dannemiller joined SS&G in 1993.

SS&G’s Akron office also welcomes Ilona Aronov as a senior associate in the tax department. Prior to SS&G, Aronov worked as a tax associate at PricewaterhouseCoopers LLP.

SS&G has also announced three new employees to its Cleveland office.

Courtney Ockenden joins as a senior associate in the entrepreneurial services group. Ockenden worked as a senior accountant at Zinner & Co. LLP before joining SS&G.

Mario Ciclone joins as an associate in the tax department. Prior to SS&G, he worked as a staff accountant at Hobe & Lucas CPA Inc.

J. Ryan McNutt, C.C. Hodgson Architectural Group

J. Ryan McNutt, C.C. Hodgson Architectural Group

Steve Newton joins as an associate in the IT department. Newton worked as an IT service specialist at Progressive Insurance before joining SS&G.

 

First Federal of Lakewood recently announced that Rebecca Ruppert McMahon has been appointed to the board of directors, and Jeffrey Bechtel has been named senior vice president and commercial banking senior lender.

McMahon has devoted nearly 20 years to building a successful legal career in both the public and private sectors. Most recently, from 2009 to 2012, she served as general counsel for Cuyahoga Community College.

Bechtel, a 25-year industry veteran, will lead First Federal’s efforts to establish a broader commercial banking presence in Northeast Ohio, with a focus on traditional commercial and industrial banking opportunities.

 

Michael Gyure, Director and Senior Analyst of Forensic Accounting, Janney Montegomery Scott

Michael Gyure, Director and Senior Analyst of Forensic Accounting, Janney Montgomery Scott

C.C. Hodgson Architectural Group continues to expand with the announcement of the addition of architects Bob Seaman and J. Ryan McNutt.

Bob Seaman brings more than 25 years of experience as a project manager for a variety of building types, with a specialized focus on the design and management of large health care projects. Most recently, Seaman served as director of health care architecture for the Cleveland office of URS Corp.

J. Ryan McNutt has 13 years in the business, most recently serving as Project Manager for Ewing Cole/Belson Design in Cleveland.

 

EYE Lighting International, a leading manufacturer of lamps, luminaires, controls, and related lighting products, is pleased to announce the addition of Suzanne Beatrice as the director of HR.

In her new role, Beatrice will be responsible for expanding organizational development goals for all employees as well as leading recruitment, hiring and on-boarding activities for new employees and managing personnel transitions.

Beatrice has worked for more than 20 years in the HR field, most recently with Airgas USA LLC.

 

Janney Montgomery Scott has announced the hiring of Michael Guyre as director and senior analyst, forensic accounting at the firm’s Cleveland branch office. Guyre, CPA, joins the firm with more than a decade of experience on the sell side as a forensic accounting analyst. He began his career at Arthur Andersen.

How Turner Construction built the Global Center for Health Innovation and Cleveland Convention Center ahead of schedule

John Dewine, Vice President and Construction Project Executive, Turner Construction Co.

John Dewine, Vice President and Construction Project Executive, Turner Construction Co.

John Dewine looks out his window on the ninth floor of the Standard Building in downtown Cleveland at the construction project he has been leading — The Global Center for Health Innovation (GCHI) and Cleveland Convention Center (CCC). Dewine, a Turner Construction Co. vice president and construction project executive, is no stranger to construction as a 37-year Turner veteran, and no stranger to Cleveland either, as he worked on both the Key Tower and Quicken Loans Arena projects.

Turner Construction, a design/build contractor, brought Dewine to Cleveland to head the project, which the firm completed three months ahead of schedule and on budget in June this year with the help of URS and LMN Architects.

“We got hired in early May 2010,” Dewine says. “From May through the end of 2010 we worked with the designers, engineers, Merchandise Mart Properties Inc. (MMPI) and the county to conduct a series of budgetary estimates and checks to make sure that the project design was staying on budget, providing the programming needs and scope that the county wanted.”

The GCHI (formerly known as the medical mart) and CCC are a $465 million Cuyahoga County project being developed, managed and marketed by MMPI. GCHI brings buyers and sellers together at the world’s first market facility designed specifically for the health care industry.

The state-of-the-art facility integrates permanent showrooms with convention and conference facilities to uniquely meet the innovation, education and commerce needs of the medical marketplace. GCHI showrooms will feature the latest technology from the world’s premier health care and medical manufacturers while the convention center is designed to host health care industry trade shows and conventions.

“The GCHI will be occupied by companies such as GE Healthcare, Cleveland Clinic and Invacare,” Dewine says. “There will be areas for collaboration, which Cleveland Clinic CEO Delos ‘Toby’ Cosgrove hopes will help yield next generation innovations for the medical field.”

The build

The GCHI and CCC project had numerous engineering feats and challenges that Dewine and his team, along with the help of 168 small business enterprise contractors had to overcome.

“On Jan. 3, 2011, at midnight, Armageddon took downtown Cleveland when we started to put in barriers and fencing to corner off three city blocks,” Dewine says.

The GCHI and CCC is located at the corner of St. Clair Avenue and Ontario Street. Before any structure was put in place, a lot of prep work was done to prepare the area for the new buildings.

“In downtown Cleveland the geology is such that the bedrock is almost 200 feet down,” he says. “For heavily loaded buildings, caissons or drilled shafts are imbedded into the rock, and it’s a very unknown-type process. We have an idea of what we’re going to encounter, but you don’t know until you’re drilling the hole.”

Dewine and his team encountered a lot of methane gas, so much that they installed a permanent methane venting system in the facility. But that wasn’t the only issue the Earth’s crust offered.

“The structure and strength of the clays that you drill through are such that if you drilled a hole and left it overnight it would squeeze shut,” he says. “That’s not a good thing, because if it squeezes shut it creates a void somewhere else, maybe under another building. So we had to put steel casings down as we went to prevent the walls from caving in. Getting through that caisson process was huge.”

Besides the groundwork, Public Auditorium and the old convention center provided several challenges for Dewine and his team.

“In the 1960s when they built the old convention center, they successfully incorporated a lot of mechanical and electrical equipment from the convention center to help service and feed Public Auditorium,” Dewine says. “We had to unhook and separate Public Auditorium from the convention center so we could tear the convention center down. Public Auditorium stayed in service, so it was very specific as to what we could and couldn’t do until we had enough of it isolated.”

The other thing that was a real challenge during the build was that the old convention center’s loading dock was at the same elevation as the floor. To create a true loading dock where the trucks are lower for ease of loading in and loading out, Turner had to lower the existing floor by 8 feet.

“As the loading dock goes underneath Lakeside Avenue, we had to lower the subgrade within 2 feet of a 99-inch brick sewer that was installed in the 1880s,” he says. “That took some extra precautions and measures to ensure something catastrophic didn’t happen.

“We had to make sure we didn’t collapse Lakeside Avenue in the process. We had to shore up Lakeside Avenue, remove the columns that supported it with temporary means, dig it out and lower it, put new foundations in and new columns back in, and then release the loads.”

Dewine says the real success of the project and the reason it was completed ahead of schedule was due to a very positive preconstruction period. Turner and its partners were able to sequence the 17-acre site and attack it from a number of locations at the same time.

“I believe the project got completed early because of how successful we were in sequencing the work,” he says. “When we put our guaranteed maximum price schedule together we had about 350 items in the schedule. At the end, we we’re well over 4,000.

“As items became identified and determined in the schedule, we could micromanage it so that you measure and know what you have to accomplish each week. What you don’t accomplish you have to have a recovery plan for how you get it done the next week. It takes a tremendous amount of communication.”

Turner had a general project manager/superintendent meeting every Thursday morning. In addition, the different areas — north of Lakeside Avenue, south of Lakeside Avenue, the GCHI and Public Auditorium — each had their own separate meetings as well.

The result of all those meetings and the hard work done by thousands of people is a finished project ahead of schedule, on budget and without any major accidents. Dewine is happy to now look out his window across the street at a completed GCHI and CCC.

“It’s a real good feeling,” he says. “It’s the successful result of a lot of efforts from a lot of good people. We were blessed with the contractors that ended up being successful in bidding and being awarded the project. We’ve had well over 6,000 employees take home paychecks as a part of this project. The level of cooperation has been unsurpassed.”

By the numbers

The GCHI and CCC is located in the nation’s medical capital, home to the largest concentration of medical leadership in the U.S. More than 230,000 health care professionals, including 43,000 at Cleveland Clinic and 25,000 at University Hospitals, along with more than 600 biomedical companies are located within the region.

Building Size — 1,003,000 million square feet

  • Site Area — 14.6 Acres
  • LEED Certified Silver

Global Center for Health Innovation

  • 235,000 square feet
  • 100,000 square feet of permanent show room space
  • 11,000 square foot junior ballroom
  • 2,000 square feet of retail space
  • Outside windows pattern evokes strips of DNA

Cleveland Convention Center

  • 767,000 square feet under Malls B and C
  • 230,000 square feet of high-quality exhibit hall space
  • 60,000 square feet of high-tech, flexible meeting room space
  • 32,000 square foot column-free ballroom
  • 17-truck capacity loading dock
  • 90-foot interval columns to carry a load equivalent to a 65-story building

How Timothy Yager led a strategy to get Revol Wireless winning again in the prepaid provider space

Timothy Yager, President and CEO, Revol Wireless

Timothy Yager, President and CEO, Revol Wireless

When Timothy Yager started at Revol Wireless in the fall of 2011, the company had been losing customers every month for an extended period of time. Late 2009 through the first half of 2011 were tough years for the organization — rumors of bankruptcy and new ownership were being floated around and the wireless communications provider was in desperate need of change.

“The company was having some financial issues,” says Yager, president and CEO. “So my arrival was a chance to hit the reset button for Revol, not only for our customers, but for our employees and say, ‘It’s a new day. The ownership change has happened and they’ve brought in new management and we’re going to focus the company on winning.’”

When Revol was first launched, it was a more than 300-employee, $100 million company. It had a reputation as being on the cutting edge of the prepaid wireless industry.

“Revol had a lot of success early on because it offered unlimited voice and those kinds of things on a prepaid platform,” Yager says. “They were the only provider in the footprint offering that type of service.”

In 2008 and 2009, other prepaid providers started moving in and the competitive forces grew. In a hypercompetitive industry such as wireless, Revol wasn’t as competitive as it should have been and it quickly began to fall behind.

“They needed some help getting the business turned around,” Yager says.

Here’s how Yager reinvigorated Revol Wireless with a strategy to get the prepaid provider winning again.

Evaluate the business

Prior to Yager’s arrival, Revol’s strategy and day-to-day operations were hindered by its capital structure, which brought about a slow-to-react atmosphere. Once the company was free from that structure, there were a lot of people who were looking for strong guidance, enthusiastic leadership and setting of general objectives to get the company back on track.

When Yager was first introduced to the team, it was a transformation in enthusiasm, direction and general motivation. Everybody suddenly had a place to go and a job to do. Yager brought a lot of that enthusiasm and direction to the table, and that’s exactly what people needed.

“Those first few days and weeks were really about analyzing the team that was here and where the strengths and weaknesses were,” Yager says. “The other thing was trying to change the focus and mindset of the company.”

Yager wanted to instill a strategy that said the company was in it to win it. It didn’t happen overnight, but employees started to recognize that there was a new philosophy.

“Revol had gotten mired in the minutia and a lot of times in companies that are struggling, people retreat from making decisions,” he says. “One of the biggest things I did was come in and start making decisions.”

Simple things like “yes and no” decisions went a long way toward starting to improve morale and helped employees realize there was a new sheriff in town. Yager represented new ownership, new direction and new thought.

“I think people started to feel empowered to be successful,” he says. “In a turnaround situation, one of the biggest things you’ve got to do is make decisions. So often companies get polarized with the fear of making the wrong decision that they make no decision, and I firmly believe that sometimes a wrong decision is better than no decision.

“If people are just constantly treading water and they don’t know whether they’re going up, down, right or left, it zaps the life out of a company.”

People respect leaders who come into a company and lay out a plan of attack, are upfront about the plan and who are forceful.

“I can remember that first meeting and saying, ‘I’m not going to do everything right and I’m not going to pretend to do everything right, but we’re going to make decisions, have short meetings, focus on what needs to get done and we’re going to get it done,’” Yager says. “In our wireless industry, where it is so competitive, we don’t have the luxury of taking six months to analyze everything.

“Sometimes you’ve got to look at the facts, make a decision and move on.”

Be decisive

Revol started 2012 losing customers every month, just as it had been the year prior, but with Yager on board the wheels were in motion for the company to move forward.

“When I came in, one of the first things I did was put some extra incentives out there to our dealers to sell some phones,” Yager says. “I was trying to buy some enthusiasm from our partners to get reinvigorated about selling the Revol brand.”

Another key decision Yager made was to get out in the field and visit a lot of the company’s owned doors and indirect doors to help get the message across that it’s a new Revol and a new day.

“Those were things that didn’t cost a lot of money, but helped move the business forward because it put a face with a name they were starting to see on emails,” he says. “It also gave them a chance to meet me and realize that I’m a relatively aggressive guy.

“When you’ve got five to eight competitors in a marketplace, you’ve got to be aggressive, and by people meeting me and realizing that I wasn’t just saying we were playing to win, they could tell by meeting with me that we want to win the game.”

One of the most crucial issues that Revol and Yager identified that needed to be changed was their network.

“Revol was still operating on an older technology called 1X and had slower data speeds,” he says. “In today’s world of smartphones, Androids and everything else, data is key.”

Shortly after Yager joined the company, the board approved a plan to upgrade the network to a 3G network.

“Our key initiative in 2012 was the company deploying 3G,” he says. “We launched that service in September last year and noticed an immediate uptick in our sales to customers as well as a stickiness of our existing customers.”

Move forward

Yager’s key to helping Revol right the ship was his ability to deliver on his decisions. He was careful not to promise too much.

“I came in and made a few simple promises — two or three key things and then I spent a year beating the drum on those things to do it,” Yager says. “Too often people come in and make a laundry list of 26 items they’re going to promise. No one can get that done in a reasonable timeframe and you lose credibility. Pick and choose what needs to get done and then deliver on it.”

In 2012 Revol was all about getting 3G launched. In 2013 the company is all about selling phones and keeping customers happy.

“When we launched our 3G network we saw an immediate turnaround to our gross sales and our net sales,” he says. “We have more than doubled our sales in January 2013 from January 2012. We’ve really seen that the successes are bearing out.”

Everyone at Revol had to put in the hard work to get the pieces in place, but now that that’s done, the company has seen noticeable improvement. To continue to see those sales and revenue numbers increase, the company has to keep a focus on growing its customers.

“I’m happy to report they are growing,” Yager says. “I’m excited about what we can achieve this year. Last year we had a hard time competing from a sales perspective because we hadn’t upgraded the network. This year we’ve got those key ground-level type things in place, so I’m looking forward to being able to execute and win.

“We have almost a singular focus in 2013, which is to grow the business. There’s really only one way to grow the business, and that’s to be successful in adding new subscribers and keeping existing subscribers.”

How to reach: Revol Wireless, (800) 738-6547 or www.revol.com

Former franchisee turned franchisor, Wan Kim reinvigorates Smoothie King as CEO

Wan Kim, Global CEO, Smoothie King Franchises Inc.

Wan Kim, Global CEO, Smoothie King Franchises Inc.

Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.

In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.

Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.

“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”

Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.

“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”

Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.

Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.

Understand all areas of your business

Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.

“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”

Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.

“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.

“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”

While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.

“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.

“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”

Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.

“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”

Prepare for growth mode

Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.

“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”

Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.

“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”

When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.

“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”

The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.

“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”

One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.

“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”

Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.

“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”

How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com

Andrew Liveris leads Dow Chemical by finding and developing talent that can achieve both short-term and long-term goals

Andrew Liveris, chairman, president and CEO, The Dow Chemical Co.

Andrew Liveris, chairman, president and CEO, The Dow Chemical Co.

This past November, Andrew Liveris went to the White House for a meeting with the president. That in and of itself is a pretty significant life event, but in Liveris’ case, it was as much about the journey as the destination.

Liveris is the chairman, president and CEO of The Dow Chemical Co. A native of Australia, he’s held numerous positions at Dow over the span of nearly 40 years — roles that have taken him to places such as Hong Kong and Thailand, before eventually moving to Dow’s Midland, Mich., corporate headquarters, where he became CEO in 2004 and chairman in 2006.

As the head of a $57 billion corporate giant, Liveris was among a group of influential CEOs invited to the White House to take part in a meeting on jumpstarting American business with President Barack Obama.

The Australian who came to America by way of Asia now sat in a room with the leader of the free world, among those tasked with helping to chart a course to rebuild key economic drivers as the country — and world — continues to recover from the recession.

“The conversation we had, with a dozen CEOs across various business sectors, it felt like a different meeting than any previous we have had,” says Liveris, who spoke as part of a presentation at the 2012 Ernst & Young Strategic Growth Forum.

“The president has had a lot of things written and said, and he takes it pretty personally when he hears that he doesn’t know business. Frankly, the evidence over the past 3½ years is that he doesn’t work with business and doesn’t know business.

“So in this meeting, he didn’t talk all that much,” Liveris says. “He let us give it to him, and we let him know what it would take to create a growing America again.”

For Liveris, it was an opportunity to step back, reflect on where his company had been over the past few years, and where it was headed —  and what steps he and other influential business leaders would need to take to ensure that their companies, and the whole of American business, would remain strong into the future.

Understand the landscape

By his own admission, Liveris was kind of naïve in his first couple of years as a CEO, particularly when it came to the business community’s relationship with government.

“I thought I would go to Washington, talk about the things that matter to my company, then I would leave and something would happen,” Liveris says. “That clearly did not work.”

After a number of trips to Washington with little progress in developing the business-government relationship to the point that it produced results, Liveris realized that no one on either side truly had a grasp of the game they were playing.

“I remember when I was watching TV and hearing about how American manufacturing had to die, how it had to move overseas because of labor costs,” he says. “That’s when I realized that absolutely no one was getting this.

“No one understood innovation, technology, or how one invents. No one understood the business models of creation, of new wonderful things that help humanity, things that are an American right.

“We have done this for over 200 years and yet we’re saying we should no longer manufacture, and we should just be a service economy,” he says. “If you want to be a service economy, go to the U.K. and see how it worked for them.”

Liveris says Silicon Valley is a hub of innovation, in large part because it is full of big companies who try to maintain a small-company mindset. If you can marry the resources of a major corporation with the flexibility and creativity of a smaller enterprise, you can hit an innovative sweet spot. It’s a position Liveris has tried to assume at Dow.

“Silicon Valley is an intersection of incredible academic institutions and entrepreneurs inventing, innovating and allowing startups,” he says. “That’s what I do. I have $1.7 billion in R&D, and I’m doing that every day. I’m innovating and trying to scale up. That is manufacturing.”

Liveris wants Dow to set a tone for innovation throughout the country. He wants companies, both large and small, to think in terms of innovation and developing ideas.

“This country needs dozens of Silicon Valleys,” he says. “It needs innovation hubs throughout the country. That was recommendation No. 1 from the meeting with the president. The president will give legs to an advanced manufacturing partnership, within which we have identified 11 technologies that America can win on a global basis.

“We have picked the technologies where America can win, not by creating winners and losers among companies, but by designing an innovation hub so the best minds in America can participate, including entrepreneurs, big companies and some government money to stimulate creativity and scale things.”

Invest in human capital

Innovation needs fertile ground. It needs companies that invest in the resources that enable innovation. It needs executives and managers that sustain a culture capable of promoting innovation. You need programs that reward and promote innovative thinking.

But those factors alone won’t drive an innovative mindset. You need to recruit the talent to innovate.

Even if you don’t budget for R&D the way Dow does, Liveris says innovation-minded talent is a must for any organization that wants to grow and evolve.

“I am a great believer that rigor mortis sets in unless you create a burning platform,” Liveris says. “People get comfortable and complacent quickly, especially the larger you get as an organization. You have to change things.”

When Liveris was named CEO of Dow, he called up a number of successful CEOs who had succeeded in driving large-scale change throughout major enterprises, asking for advice on preventing complacency and enabling innovation.

“One of them gave me this great piece of advice,” he says. “It had to do with the phases of change that cause the human pipeline, the talent pool, to respond and be its very best.

“It’s about the moon shot, the mission. If I can be inspired by the mission, be energized by that, that’s the key. I have to create that dynamic inside the top and middle ranks of the organization, and more importantly, the front line people.”

To Liveris, leaders get elected every day. Each day is an opportunity to create buy-in throughout the organization, an opportunity to inspire employees to follow the path blazed by leadership.

“You lead change,” he says. “You build a team around change. You have to do it with the long vision in mind, but with the idea that the short-term needs have to be met. We all suffer from ADD.

“We have become an ADD society where everything is breaking news, so the dynamic around a company — particularly a public company — can kill the long vision. You have to deliver in both the short-term and the long-term, and if you live those two paradigms, you need a unique type of human talent.”

Liveris calls it “living intersections” — finding and developing talent that can achieve both short-term and long-term goals.

“No longer do we do single-lane highways,” Liveris says. “We’re living intersections all the time. The intersections between the short-term and long-term require a unique type of talent — sometimes we call that change manager a change leader but that’s too high level.”

The managers you bring in to help spur change and formulate a vision for the future while delivering short-term results have another important set of opposite-end factors to master: They must understand the business from a global level, while still grasping the effect of the vision and goals of the organization on individuals working at ground level.

“You do still have to get down to the three-foot level,” Liveris says. “What does it mean to the person on the floor? What does it mean to the R&D leader? What does it mean to the salesperson?”

And no matter what position a given person fills, that person’s talent will only reach its potential if you can tie their individual and department goals to the overall goals of the organization, and then reinforce innovation-centered values that emphasize a willingness to create, experiment and learn from mistakes.

“You can’t box people into something and say, ‘Go invent,’” Liveris says. “You have to give them a chance to fail. You have to let them be a part of the entrepreneurial activity. You need to motivate them to see how their project, their work, can change humanity.”

How to reach: The Dow Chemical Co., (989) 636-1000 or www.dow.com

The Liveris File

Liveris on Dow’s history of success: We’re actually one of nine companies that are still around from the inception of the New York Stock Exchange. There are only eight others who were there since the beginning. We’re not afraid of change. I didn’t get this gray hair easily; it came hard. We have in our DNA the willingness to face reality and take the change and bet the company. To be companies of size, that’s a lot of heavy lifting. I’d like to say we’re in the seventh inning … from a portfolio point of view. We have the technologies. We have the weapons but we’re in the second or third inning from a cultural point of view.

Culture is every person in the company, and Dow has a value proposition at the personal level. As a young chemical engineer, I had a lot of offers, but I chose to leave my great country of Australia to live in this great country, not because I think you’re greater but the company called Dow has a better value proposition to a human being. I was attracted by the people.

Liveris on sustainability: One day Dow Chemical won’t be known as Dow Chemical; it will be known as Dow. Dow sticks to the brand of the diamond (logo). The brand will stand for … our commitment to sustainability, but not sustainability as a noun, sustainable as an adjective. Sustainable business, sustainable profits, sustainable planet are the same things. How you actually marry the intersection between environment, economy, society, business, government, society.

Takeaways

Understand your industry.

Value innovation.

Find and retain great talent.

Kailesh Karavadra is focusing on culture and talent to deliver outstanding results at EY San Jose

Kailesh Karavadra, managing principal, EY San Jose

Kailesh Karavadra, managing principal, EY San Jose

Kailesh Karavadra didn’t always want to be an accountant. In school he studied electronic engineering and later decided he wanted to try his hand at accounting. He fell in love with the profession and first joined EY in the U.K.

A few years later, the $24 billion accounting firm asked Karavadra if he’d be interested in moving to Silicon Valley.

“With my background in engineering and computers and business background in accounting, it made a lot of sense with what the Valley was going through in the early ’90s,” says Karavadra, managing principal of EY’s San Jose office. “So I came here, and I loved it, and have been here ever since.”

Karavadra has been with EY for more than 20 years, but it was in early 2012 that he was named managing principal for the 750-employee San Jose office, an announcement that coincided with the firm’s 50th anniversary of its presence in Silicon Valley.

“When we wake up every day and we put on our EY uniform and we come to work, our heart and soul is in building a better working world,” Karavadra says. “Over the past year I’ve had the chance to talk to almost every one of our employees, from our partners to our staff, and connect with them and listen to what’s on their minds and understand some of the complexities and challenges we work with.”

Karavadra has been focused on continuing to foster a strong culture at EY as well as continuing to recruit and retain top talent that will help the firm in its goal to build a better working world.

Here’s how Karavadra is making sure EY San Jose is prepared for the future.

Start with culture

Karavadra has been with EY for 23 years. He’s been with the firm for so long that when he speaks with young professionals today they’ll say, ‘Twenty-three years! Aren’t you bored?’

“I laugh because I have never had a single boring day,” Karavadra says. “The one differentiator is our culture and our people value that a lot.”

EY has been named to Fortune’s best companies to work for list for 15 consecutive years.

“That comes from our inclusiveness and flexibility and that we really empower our people,” he says. “For our employees, every day they show up for work it’s about choices. What we try to do is cultivate a culture that empowers them to make the right decisions, leverage the information that’s available in our culture and have diverse thinking to do the right things when serving our clients and our firm.”

Karavadra and the San Jose office encourage and empower employees to drive their own bus. “There are so many opportunities within our firm to drive their careers, to learn so many things, to be able to experience many things, and that’s the culture we want them to be able to feel,” he says. “Our employees are excited, they’re energized, they’re enthusiastic, and they’re passionate about what we do.”

One of the things that EY is very proud of is inclusiveness and that is something that Karavadra heard loud and clear from his people as something they value.

“This isn’t just about ethnicity and gender and those things that many organizations like ours do a great job around, but it’s the diversity of thought,” he says. “We encourage our people to bring that diversity of thought, to bring the different thinking and look at the problems we’re trying to solve for our clients and the value we’re trying to add to our clients in different ways.”

Developing a culture such as what Karavadra has in San Jose and what EY has bred around the globe hasn’t happened overnight.

“There’s a great saying out there that I personally believe in, which is, ‘People don’t care what you know until they know you care,’” he says. “At the foundation of our culture is the caring. We treat ourselves as family.

“One way we foster that culture is through our alumni and our retired partners. We did several events last year where we bring our retired partners back, and it’s amazing to me the pride, passion and excitement they have for our firm. We have almost 1 million alumni that have gone through the EY culture. During these events we invite our alumni to reconnect with each other, as well as reconnect with current employees.”

Another way Karavadra helps foster EY’s culture and helps to build a better working world is through five things that he constantly talks about with his team.

“No. 1 is that we really do contribute to the success of the capital market,” he says. “No. 2 is that we truly help and improve as well as grow businesses. The third is we support entrepreneurs. Fourth is we are incubators for leaders. Fifth is giving back to the community.”

Find and retain top talent

Those five things are important aspects of the EY culture, but they also help drive why employees love to work for the firm and why potential employees are attracted to working there as well.

“There’s a saying by John F. Kennedy Jr., ‘Some people see the world the way it is and say why, others see it differently and say why not,’” Karavadra says. “When we go on campuses we see a lot of very young, talented people who want to make a difference, who want to contribute and have a sense of belonging.”

Karavadra makes sure to talk a lot about the firm’s family culture, team atmosphere and sense of empowerment.

“We also bring our current employees because we want them to be the voice and they will shoot from the hip and give an honest view and opinion of what it’s like working here,” he says.

Karavadra also goes on these campus visits to speak with potential hires. He wants to make sure he understands what those candidates are looking for in a company and in a job.

“What they tell me is they want to work in a dynamic environment,” he says. “They love the innovation, entrepreneurial spirit and the teaming aspect of an organization.”

Focusing on recruiting strong talent is important, but all that energy is wasted if you don’t also focus on retaining those great candidates once you have them.

“It’s not only important to hire good talent and keep them here, but for our clients in the markets at-large it means that when people have energy, enthusiasm and they believe that we’re doing the right thing, they’re going to provide exceptional client service,” Karavadra says.

“They’re going to be a part of the highest performing teams and when you add our global strength and structure to the local empowerment in our local offices, that’s a real strong recipe for people to have a successful career.”

Karavadra believes that above all else, trust is one of the biggest factors for retaining talent in an organization.

“I truly believe in my DNA, that trust is at the heart of it,” he says. “Young people these days are incredibly smart, incredibly connected and talented.

“But when we’re out there talking to people, the most important thing that I share, whether it’s for recruiting or with employees, there is nothing more important than making sure you hold the ethics, reputation and integrity of yourself and our firm at the highest level. Nothing should compromise that.”

Whether you’re on campus recruiting or trying to attract experienced hires, establishing trust is the most important thing.

“They need to feel that this is an organization with honesty, trust, integrity and teaming. Where employees feel there are common goals and we work together,” he says.

While trust is a big reason employees will remain with a company, a second big reason is training and the ability to develop new skill sets.

“We put in 2.7 million hours of training last year for our people,” Karavadra says. “We really want our people to be the very best they can be. It is important for us to make sure we provide all of the latest and relevant insights to them, whether it’s classroom training, industry training or leveraging our web-based technology tools. The San Jose office is the global technology center, so we have a lot of our thought leadership around the world that we develop right here for our technology clients.”

Training at EY is not the only formal training team members get, they also get to take advantage of the firm’s apprenticeship model.

“What I learned when I started as a staff member 23 years ago is that I looked at people around me and there were mentors and coaches who took an interest in me and cared about me,” he says. “They would take me aside and say, ‘You just did this inventory account, this cash reconciliation, and looked at this tax document. Here’s why it’s important for us, why it’s valuable to the client and the impact it could have.’

“Right away from the first day, the training climatizes you to understanding the importance and the accountability that we have on the work that we do. It’s not just showing up every day to put in your number of hours and then we clock out. There’s a real importance to that training.”

How to reach: EY San Jose, (408) 947-5500 or www.ey.com

 

Takeaways

Work on establishing a culture that is attractive to employees.

Devote time to recruiting the best talent for your organization.

Provide training resources to help retain your best talent.

 

The Karavadra File

Kailesh Karavadra

Managing principal

EY San Jose

Born: Kampala, Uganda

Education: He studied electronic engineering and received a master’s degree in engineering from University College of North Wales in Bangor.

What was the first job you had and what did you learn from it?

I delivered newspapers. I used to get up at 5:30 a.m. before school and do it again after school. So it was twice a day, six days a week. I was always inspired by working hard and taking my responsibilities seriously, because you’re accountable for the things you are doing. Hard work will always get you a reward.

Who do you look up to?

I have five mentors that I am in constant connection with who are across five different continents. That has happened because of the years of experience here and the networking. I can call them anytime and pick their brains and they try and make sure they support what I am doing.

If you could speak with anyone from the past or present, with whom would you want to speak with?

The one person who has shaped me more than others is Mahatma Gandhi. I have always been incredibly inspired by the willpower he had. He was someone who realized that something needed to change and he was willing to take the first step.

Michael Catanzarite combines competitiveness and a family atmosphere to keep Darice atop the craft industry

Michael Catanzarite, CEO, Darice Inc.

Michael Catanzarite, CEO, Darice Inc.

“A Pat Catan’s Company” reads the sign in the lobby of Darice Inc. where Michael Catanzarite greets his guests. Catanzarite, or Catan for short, is the son of Pat Catan and is CEO of Darice Inc., a premier wholesale distributor in the craft industry.

That lobby sign is a symbol of the company Catanzarite’s father started in 1954 with $200, basically creating the craft industry.

“It’s a unique story because how the hell would you get into the craft business?” Catanzarite says.

Pat Catan was a pilot instructor during World War II. When he returned from service the only place to get a job in Cleveland was at NASA. As a new guy living in Cleveland walking around, he saw a need for supplying decorations for decorators of store window displays.

“Back then, department stores’ biggest form of advertising was the window decoration itself,” Catanzarite says. “He started supplying products for that. It evolved into material for making your own flowers for displays and floral arrangements for your house and grew from that point.”

In 1954 Pat Catan’s was just one single store. By the mid-’70s, the company had six or seven stores.

“He was a pioneer in the industry, because there really was no craft industry,” Catanzarite says. “In the early’70s, we came up with the name Darice. Darice is our wholesale name and that’s the majority of our business. If you go into any big box store like Wal-Mart, Target or Michael’s, you would see the Darice brand in there.”

The wholesale division started in the 1970s. Catanzarite entered the family business following his graduation from high school in 1976.

Catanzarite knows the ins and outs of Darice. He knows the names of virtually every employee and can quote his father’s sayings and other inspiring messages that line the walls of the Darice office.

But what else would you expect from a man who has worked at the company for his entire life?

“My dad was my idol, my hero,” Catanzarite says. “I enjoyed being with him and I enjoyed working with him. Why did I come into the family business? I hated school.”

Catanzarite has been CEO for nearly 20 years, but he isn’t the only family member working at Darice. In fact, there are 22 family members who work full time in the business. His office contains nearly 100 photos of family and items like his dad’s old briefcase and jacket, which help motivate him and serve as a symbol of who started the business.

From 1954 to today there have been a lot of changes within Darice and the craft industry itself.

“The difference between today and yesterday is the speed to market and the speed of business,” Catanzarite says. “You better be at the wheel every day and have your foot on the gas 100 percent or you’re going to be left behind.

“Today, we are fortunate because of our employees and their hard work, we’re the largest in the industry at what we do. Being the largest has its challenges in that you’re always a target for competition.”

Here’s how Catanzarite keeps a family feel at Darice while also pushing the company to remain an industry leader.

Fight the competitive forces

Darice Inc. today has 1,800 employees and is one of the top privately held companies in Ohio. The company supplies craft product lines such as craft basics, jewelry making, paper crafting, bridal, floral design, fine art supplies, kid’s crafts and licensed products to retailers such as Wal-Mart, Target and Michaels.

“We’ve made it a priority in our company that we are going to be product-first people and product-innovation focused,” Catanzarite says. “That’s our business: creativity and products. When we do that, everybody in this building understands that our goal is to find the next best product to make sure we’re to market quick and can respond to a call from Target or customer X to have a presentation done in a week.”

Anything that Catanzarite does to be successful is a result of the company’s mission statement and that his employees work on it every day. It requires the right kind of people to live the company’s mission.

“Do we have the right people and the free thinkers for that?” Catanzarite says. “That’s how we take something from concept to reality. In any company, if you just talk about stuff and you don’t make it a priority with the facility and the people, you’re not going to get anywhere.

“If you say you’re going to do something, but all you have is an idea on a piece of paper, well, what the hell good is that? You’ve got to give it substance.”

Catanzarite spends a lot of his day motivating and counseling employees and trying to figure out what areas Darice needs to improve.

“You’re constantly changing and trying to upgrade, but not because the people are bad, successful companies merge new ideas in with the old ideas,” he says. “We never really focus on the competition. We just try to be as good as we can be.”

Part of making the company better is continuing to get products to market quicker than anyone else.

“Here, we do things quickly,” Catanzarite says. “We get stuff to market in half the time of our competition. We react to our customer faster than anybody. That’s the only way you’re going to beat the competition because everything is so fast and everybody is trying to increase their margin to go around you.

“Today, you better be the best at everything or you’re going to get run over. We’re focusing on how we do that.”

A big reason for Darice’s success is due to its employees and the culture Catanzarite has helped foster over the years.

“The people part of the business, which a lot of people shy away from, is really the most important part of the business,” he says. “It’s what’s driving the company. You have to motivate them to do what’s next.”

Catanzarite fosters this kind of culture through commitment, consistency, being honest with his organization and devoting the time to it.

“I always compare it to being a parent,” he says. “The biggest component to being a parent is that children need your time. There’s nothing, as you raise your children, that’s more important than time. Your employees are the same way.

“If your boss came in today, sat with you, had a cup of coffee, and was nice to you, that would make your day. But a lot of people are just so busy going to the next meeting that they don’t carve out that time.

“You’ve got to spend time on relationships. That’s how you get the trust. My goal is for people to do good because they want a paycheck, but also because they like me and they don’t want to fail me.”

Eliminate family politics

In a family business, it’s easy for family members to develop office politics and destructive habits that can destroy a company. Darice and the Catanzarite family follow a simple motto to squash any of those possibilities.

“Faith, family and friends is our motto,” Catanzarite says. “We live by it. There’s nothing more important than faith, which drives our family. Once you’re my friend, I’ll never get rid of you. We have 22 full-time family members that derive their full-time income from working at Darice. How do we deal with that? We try to eliminate politics.”

If a family member wants to come to work at Darice, the most important thing Catanzarite does is find the right job for that person.

“Are you going to make a guy who’s good with his hands and likes working on cars a salesman at Wal-Mart?” Catanzarite says. “You may, but his chance at failure is much greater.”

Catanzarite’s family members let him have the ability to place them where he thinks they’re best served within the company.

“So far everybody still comes over on Christmas,” he says. “But with 22 family members, if somebody gets mad, they go home and tell their spouse and they tell her mom who might be my sister, so you have to have the openness and honesty.”

Not every family member works full time inside the company. There are others who play outside roles.

“Even if you’re not internally in the building, most everybody else is in the business,” Catanzarite says. “The guys that are outside play such an integral part that if I lost them, it would be like I’m losing somebody internally. It’s good the way we mesh that.”

To keep the family atmosphere in a company that has gone from three employees to 50, 50 to 100 and 100 to 1,800, it takes openness and transparency. Most importantly, someone needs to take charge.

“There are a lot of families that have trouble even sitting in the same room to meet,” he says. “As a company you need a plan and unfortunately there could be five to 20 relatives in there, so you need a boss.

“There has to be a single leader in the family and the family has to be committed to supporting that, otherwise you’re going to fail,” he says.

Darice is currently undergoing a succession planning process so that it is prepared for the future. The company has also brought in people from outside the family for integral leadership roles.

“A lot of family businesses struggle to bring in professionals in executive positions,” Catanzarite says. “We were the opposite. Our president is a non-family member. Our CFO is a non-family member. Our IT director is a non-family member. Our head of marketing is a non-family member.

“Long term, one of our decisions will be that we always want an outside president and CFO. In family businesses, it’s tough for people to do that sometimes. They say, ‘I’ve been doing this forever; I know everything.’ I may know more about crafts than anybody, but I don’t know more about selling to Wal-Mart and Amazon. I’m not an expert in distribution.

“Bring those people in and allow them that ability. Having those outside positions in a family business helps the rest of your employees too, because they see that it’s not just Catanzarite’s running the company.”

Every decision Catanzarite makes about the future of Darice is done so with his family and employees in mind and how that decision is going to make everybody feel.

“My focus is on continuing to grow this business to be a premier company in what we do and taking it to the next level and seeing the employees flourish,” Catanzarite says. “I’m driven by the goal that my dad wanted a great company for his family, and if I don’t finish that, I failed. I’m not going to fail. You’ve never met a guy so driven to make something successful for the benefit of his family.”

How to reach: Darice Inc., (440) 238-9150 or www.darice.com

Rodger Roeser: Get out of my social media sandbox

It’s a new marketing communications argument — which “discipline” should manage the new medium of social media? Should Twitter, Facebook and LinkedIn be handled by PR, advertising, HR or something else?

Agencies are springing up that specialize in social media management and any manner of blogging, tweeting, Facebooking and the like. It’s become a verb. We need more friends, more likes, more this and more that.

“Who” is managing your social media is far less important than “what” is being managed. You are trying to engage, to enlighten, to share. You are not trying to sell, although long term and softly that will be the ultimate reward. Social media, by its very definition, is controlled by those who are engaged and those who are sharing their thoughts and their views on any manner of issues or challenges we face as consumers or as businesses. So why the fight as to who “controls” it? Money and power.

The debate brews

Certainly, advertising agencies believe they should manage the discipline because it must be creative and part of your overall marketing mix of clever hooks and fresh ideas. However, your PR agency believes it should manage this as it is the master of sharing a story and providing clarity to your consumers in the written word. Both will invoice you fairly for their time, effort and strategy, and will provide good ideas and fresh thinking to drive traffic.

What you truly need is insight, and the confidence and ability to trust in yourself or that so-called “expert.” Who really “controls” social media? If you’re smart — it’s the 3Cs — clients, customers and constituents. You control your social media, whether you’re hiring a firm or you attempt to manage it in-house.

A good agency, regardless of being PR or advertising, will advise you to craft a solid brand and brand communications strategy, then utilize the virtually unlimited universe of social media and its many outlets to share that brand and tell your story. From there you engage your publics to some desired form of action or activity.

Manage the infinite?

Managing social media is, by my definition, attempting to manage the infinite. Rather, you must discuss what your end goal is and how that particular social media tactic will fit into, support and drive content from your overall marketing communications objective. It is not the answer; it is an option.

Should your business, regardless of what that business is, “do” social media? Of course! The question and the strategy is why are we doing social media and what exactly are we trying to achieve. How does it support our branding initiatives? How does it help our sales team? How does it make our candidate or our issue more accessible?

Social media allows you to fulfill the most basic and sacred tenant of public relations — the ability to have open, ongoing and one-to-one communications directly with your publics in an attempt to foster a shared conversation and engagement.

You want to hear from an unhappy customer so you can fix it, not spin it. You want to offer ideas and specials and promotions to those that value it most. You want your business to be the best it can be so you value the ideas, conversations and suggestions of your target publics and foster that.

Stop worrying about who manages your social media. Most likely it’s you. It is your choice to do or not do, to engage or let others talk about your business without your response. Social media happens regardless of whether you want it to or not. If you lack a social media strategy, it’s time to get a social media plan of action.

 

Rodger Roeser is owner, president and CEO of The Eisen Agency. He is also the national chairman of The Public Relations Agency Owner’s Association and works with other PR firms across the country to assist in their operations and profitability. He can be reached at [email protected]

Stephan Liozu: Managing this, that and the other thing

Stephan Liozu, Founder, Value Innoruption Advisors LLC

Stephan Liozu, Founder, Value Innoruption Advisors LLC

A 2010 global survey of more than 1,500 CEOs conducted by IBM revealed that 60 percent of top executives face an increased amount of complexity in their business. Seventy-nine percent of them expect an even greater level of complexity over the next five years and only 49 percent of them estimate that they will be ready for it.

The questions then become: Are you ready to face more complexity? How good are you at managing complexity? Can you leverage this complexity to create differentiation and competitive advantage?

Complexity can be good and bad at the same time. There are four types of complexity in business and it is important to break them down to be able to understand them and eventually address them:

Imposed complexity is coming from regulations and mandatory compliance guidelines both at industry and governmental levels. It is typically not controllable and manageable so it is best to prepare for it and find a way to minimize its impact on the business.

Inherent complexity is structural complexity, which is inherited and well rooted in the business. It can be addressed by making deep structural changes that might be painful but beneficial to the future of the business.

Designed complexity is based on purposefully designed strategies and programs to support the long-term vision for the firm. This complexity is based on managerial choices aimed at creating competitive advantage.

Unnecessary complexity is the result of legacy management design and structure that might not have been updated, eliminated or refreshed. It is unnecessary because it brings no value to the business and it solely exists because no one is paying attention to it.

As a leader of your organization and in the face of resource constraints, I highly recommend you start paying attention to these four types of complexity. Assemble a process and team to review complexity and engage in the design of strategies that will leverage complexity to bring differentiation to the market. Here are some quick tips on how to do this:

Design positive complexity to create differentiation.

This should be the main focus of your critical actions and priorities. Can you create complexity that differentiates your supply chain processes, your customer service experience levels and your digital marketing strategies without overwhelming your customers? Can you create unique value selling propositions based on unique internal designs and systems?

Quickly kill unnecessary complexity while reassigning resources and skills.

Unnecessary complexity might be inherited from legacy management designs or decisions. They might bring zero business value and need eradication. Be decisive and free up resources for something else.

Transform internal complexity into simple value propositions.

Remember that internal complexity has to be transformed into simple offerings for customers. If you propose something to your customers, do it by absorbing complexity and acting as a consultant for your customers.

Focus on pockets of value-creating complexity for customers.

It is all about value. Complex designs have to bring value to customers. If not, they should not be implemented. As a leader, make sure value is real and can be monetized through pricing. You might have the best supply chain management process, but will customers see the value in it and be willing to pay for some of the services?

Assign your best talent to manage complex problems and initiatives.

Complex problems need mindful problem-solving. The business world is changing in front of our eyes. What are you doing to change with it while remaining nimble, easy to do business with and focused on value? Are you leveraging complexity to create sustainable competitive advantage?

 

Stephan Liozu is the founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management.  He earned a doctorate in management at Case Western Reserve University and can be reached at
[email protected] For more information, visit www.stephanliozu.com.

Bill Byham and Development Dimensions International have no lack of good ideas for the R&D process

Bill Byham, chairman and CEO, Development Dimensions International Inc.

Bill Byham, chairman and CEO, Development Dimensions International Inc.

Bill Byham holds a doctorate in industrial/organizational psychology — but that’s not the only way to define him. While he is not only considered an expert in the scientific study of employees, workplaces and organizations, he was one of the first in the world to use a groundbreaking hiring technique called assessment centers.

Some 35 years ago, Byham worked for J.C. Penney Co. when he began using simulated on-the-job techniques to find the most qualified potential employees.

“Assessment centers are a way of evaluating people by putting them through simulations where the people can show what they can do rather than just conducting an interview,” Byham says. “It’s like picking a basketball player — you wouldn’t interview them, you would put them out on the basketball court to see what they could do.”

Byham had great success with these assessment centers at J.C. Penney and wrote an article in the Harvard Business Review that made him famous, gaining the interest of many big companies looking to use this technique.

It wasn’t long until an entrepreneurial opportunity was born. He partnered with Doug Bray of AT&T and started Development Dimensions International Inc., which today is a leader in talent management, leadership development, hiring and talent acquisition.

“We help companies make the most of their employees,” says Byham, chairman and CEO. “We help organizations be more successful in hiring people by teaching interviewing skills. We are very big in the training business, particularly at the supervisory level, where we train more than 500,000 people a year.

“We also have a big business to help companies determine who will be their fast trackers and how to develop them for higher-level jobs.”

Since Byham started DDI, a 1,100-employee, $200 million organization, the company has trained upwards of 20 million people. Today, his focus is on the continued R&D of products in training and development techniques.

Here’s how Byham goes about R&D to keep DDI in front of its customers and on the cutting edge of its industry.

Generate ideas

DDI places a great deal of energy into its R&D process. As a global company, DDI offers its products in as many as 20 languages. Rolling out changes to an existing product or developing a completely new one is a big cost. Costs and language aside, however, to remain an industry leader, you need to have plenty of ideas, and good ones.

“We do so much R&D here,” Byham says. “A problem that we do not have is a lack of good ideas. We have more good ideas than we know what to do with.

“So the first problem is trying to slim down the list of projects because all the projects are in the multimillion dollar range.”

In order to develop all these good ideas that DDI brings to the table, the company fosters a sense of empowerment among its employees.

“The whole company is built on empowerment — that is to empower people to own their job and feel responsible to make decisions,” Byham says. “If you treat your employees so that they feel empowered and they treat their job like they own it, then people will always want to improve and come up with ideas.”

In addition to a sense of empowerment, DDI prides itself on having a management team that is very open to new ideas and has a willingness to make changes.

“That’s one of our big problems — we make so many changes all the time because people come up with new ideas,” he says.

The management team works to narrow down the options.

“We have a series of meetings to cut them out and usually it’s not hard to get it down to eight,” he says. “But then to get it down to two or three new projects is tougher. R&D to us is brand new, game-changing products, or a big change in what we’re doing.”

DDI’s biggest product is called Interaction Management, which is a supervisory training program that is among the best-selling of its kind in the world.

“We try to update it every six or seven years,” Byham says. “That essentially becomes a new product.”

DDI recently finished a new middle management training program. The concept rethinks how middle managers get trained, including what they get trained on and how their skills are developed and what happens after that in the company to make sure they really learn it and apply those new skills.

“It’s not just coming up with a new idea,” he says. “It’s coming up with the whole pathway to learning and change, which starts out with a better understanding of their needs.”

Focus your R&D efforts

Part of having a strong R&D process is being able to not only take suggestions from your customers for products and develop those, but also being able to develop products out in front of what your clients want before they know they want it.

“You have to look at R&D in that sense as a 50/50 balance,” Byham says. “We do a lot of customer surveys. We’re out with our customers a lot and they’ll say, ‘We want a training program on this.’ However, I think it was Steve Jobs who said, ‘If you only give your customers what they ask for, you’ll always be behind.’

“What I’ve always noticed is you have to be out in front of the customer because sometimes it takes us several years to develop these things. If you just try to keep up with that hot topic, we won’t get it out until it is no longer a hot topic. So we have to anticipate needs and then be ahead of that.”

DDI has had instances where it was ahead of customers on products. Just a few years ago DDI developed a product to help companies prepare for retirements and how to handle an older workforce.

“We’ve been way ahead of our contemporaries and competitors on that,” he says. “The bad side is the whole thing is built on the assumption there is going to be a huge amount of retirements. With the economy being what it was until recently, a whole lot of people who were going to retire decided not to. We’re still ahead of the tide there a little bit.”

The R&D process isn’t just about finding the next new product, but also devoting some effort to keeping well-performing, existing products up-to-date.

“The more products you have, the more it costs you to keep the old products good,” he says. “The ratio for us is around 60 to 70 percent old products and 40 to 30 percent new. You have to look at the sales of the old product. If you’re still going up with the old product, you will want to keep investing in it.”

Byham likens it to Tide for Procter & Gamble. There have been 20 new versions of Tide and they’re still making money on it. They’re going to keep that product and put it in front of customers.

“If you really have an excellent old product, like we have with Interaction Management, you would not want to let that go, but you still want to be out looking for new things,” Byham says.

Plan for the future

Byham’s biggest focus may be on R&D, but another forward-thinking area he is keeping in mind is succession planning. Byham is 76, and very aware of his age. He knows that anything could happen at any time requiring someone else to lead the company.

“There’s never been a company more ready for retirements because the whole company is so dedicated to growing our own leaders,” Byham says. “We practice what we preach.”

One of the keys to succession planning that DDI lives by is that you can’t develop everyone for high-level jobs.

“If you try to spread your money out evenly across people, you don’t have any effect by it,” he says. “The first big thing is to define who are the people who have the most raw talent to be developed. Then you have to look at how you accelerate their development.

“You keep on developing everybody and you keep on promoting people, but there are certain people you promote faster who are being accelerated up the ladder.”

DDI also believes that you don’t aim people at high-level jobs. You aim people at a level of jobs, like the C-level, but you don’t name the job specifically because companies today are too dynamic.

“We preach that companies should do away with the old succession plan, which was to take an organizational chart and move people up who are next in line,” Byham says. “We have done all kinds of research that proved that did not work.

“Instead you should get a pool of people who are the most talented and get them to aim at a level within the organization rather than a particular job. Then when the job is open, you choose from that pool.”

How to reach: Development Dimensions International Inc., (412) 257-0600 or www.ddiworld.com

 

Takeaways

Foster an environment that breeds idea generation.

Focus R&D on a mix of customer demands and brand new ideas.

Think about the future of your company and who’s going to lead it.

 

The Byham File

Bill Byham

Chairman and CEO

Development Dimensions International Inc.

Born: Parkersburg, W.Va.

Education: He received his bachelor’s and master’s degrees from Ohio University and a doctorate from Purdue University.

What was your first job and what did you learn from that experience?

My family was in the undertaking business. If you work in a funeral home, there’s a lot of work to do. My early job experiences taught me the importance of good interpersonal skills.

How would you describe your work habits?

I value creativity a lot, but at the same time, I have a strong scientific orientation of proving it and challenging and doing research. I’m pretty good about coming up with new ideas, but I’m also very good about punching holes in new ideas and doing research to make sure they really work.

Who is someone you look up to in business?

I looked up to my father. He was an entrepreneur and owned his own company.

What is your favorite DDI product?

It would have to be our supervisory training program called Interaction Management. We have trained millions and millions of supervisors.