When it comes to leading his auto parts distribution company, Rick Keister turns to the basketball hardwood for guidance.
“I remember hearing a number of years ago someone talking about the Duke University basketball coach, Coach K [Mike Krzyzewski],” Keister says. “He said, ‘You can’t teach a winning team anything, so you have to take advantage of every loss to help them learn.’”
Keister, president and CEO of Pomona-based Keystone Automotive Industries Inc., says success breeds a feeling of satisfaction in a work force. While you want the success and the satisfaction that goes with that, it’s also very difficult to make your team members improve when they already think they have everything on the ball.
Failure brings about the gut-check moments when you can coach your employees on how to make themselves better. In the short term, failure might be a step backward, but in the long term, it can open up new doors and prevent complacency if you take the time to regroup, educate your employees, and refine your vision and strategy.
Keister says it is imperative to take every opportunity you can get to define and emphasize your company’s direction so that you can adapt to changing markets.
The company that stays stagnant is the company that will lose ground and eventually die out. At Keystone — a distributor of new and recycled auto parts that had $628 million in sales in 2006 — the object is to use the ideas of both employees and customers to identify and capitalize on emerging markets so that the wins outpace the losses and those gut-check moments that Coach K was talking about are few and far between.
Entrepreneurial spirit
Keister says employees will naturally come up with ideas for improving and adapting a company, and the most important thing you can do as the head of the company is to nurture that type of culture. “If you have a company with an entrepreneurial basis, people naturally do not want to conform and do things the way everybody else does,” he says. “It’s about trying not to quash that spirit, which starts with listening to their ideas and really paying attention.”
Listening is an extremely important part of the communication process. Keister says employees will share what is on their minds if they believe management will take their ideas seriously.
At Keystone, Keister places a strong emphasis on the the ease of accessing him and his senior management. Whether he is in his office, roaming the halls or in the field, he says he frequently communicates his accessibility team members, “It’s a matter of making yourself available,” he says. “Every e-mail I send out has my office and cell phone number on it, and they know that any e-mail that is sent from the field, I will respond to it. I think that it’s just that people experiment, and if they know they have an audience, they will continue to pursue it.”
Communication is a two-way street, however, and while ideas can start at the bottom and well upward, a culture that promotes innovation and adaptability needs to start at the top and work its way down. “A culture is always a challenge and must be created every day,” he says. “That starts with communicating effectively, and communicating effectively starts with your top team. You must communicate your vision and strategy to them so they can communicate it with their team. “Top management’s job is to be out there on location every day, visiting with their teams and making themselves available to every team member no matter the level.”
He says creating an open-minded business culture is a great thing, but before you can get your lower-level employees on the same page, your management team must be on the same page. At Keystone, that starts with the formation and frequent evaluation of a strategic plan.
Keister says that employees can come up with tons of ideas for new products and new markets to broach, but that’s not going to propel your company ahead if those ideas don’t fall in line with your strategic goals.
Keister’s management team puts much time and effort into a five-year strategic plan, along with a detailed budget and operating plan that paints a comprehensive picture of where management wants to take the company in the coming years. “It’s pretty easy to say, ‘We want to go somewhere,’” he says. “But then the question is, once you have the vision and understand the culture, then you need to have a strategic plan. That plan needs to be filled with actions that roll all the way down to everyone in the company. We’re not quite there yet, but at some point, we want to have all 4,000 people in the company have a little piece of what we’re trying to accomplish as their personal goals.”
Management evaluates Keystone’s strategic plan at least once a year, Keister says the plan must be adaptable. If your plan isn’t adaptable, your company won’t be adaptable, either. “In any good business, you have to be flexible and innovative,” he says. “If the world is changing, you can’t just completely stick with your plan. You have to say, ‘OK, we have got to move in this direction,’ and at least the plan helps you keep your overall focus.”
Knowing the score
Employees want to know where they stand in relation to the company’s goals. In order to be able to accurately gauge employee performance, Keister says you must give them clearly stated, attainable goals and create metrics to measure those goals. Once you’ve done that, you need to give employees access to their performance indicators so they can see how they are doing. At Keystone, Keister and his senior leadership have implemented a “scoreboard project.” Scoreboards are placed throughout the various departments at Keystone’s locations, and each day, employees in that area see how they stack up in a particular category in relation to the company goals, or in relation to other locations in the company.
Keister says it’s a way of creating positive competition while keeping team members in the know.
“At every location, you are part of a team that has a scoreboard,” he says. “Most scoreboards have six documents that have some sort of metrics that apply to that group. We change those metrics, so each day, there is a new, one-page document to view. Those six documents are rotated. It tells each member where their team stands relative to their goals, and in some cases, relative to other locations.”
He says you never want your employees flying blind with regard to their goals or where they stand in relation to the company goals. Telling your team where they stand is a great motivator. “I like to talk about people going bowling with a sheet in front of the bowling pins,” Keister says. “How long would you bowl if the sheet stayed there and you heard the pins fall, but you didn’t know what the score was or where to roll the ball? So really, it’s about making the business fun by keeping score. “For the most part, so many employees around the world don’t know what the score is. They don’t know how they are actually doing because there is no feedback system. What you want is a very objective feedback system in place so that good people can really rise and be recognized, and maybe the poor performers in a lot of cases need to find something new that they can get excited about.”
Forming goals
Keister says forming goals is an extension of the innovation process. In much the same way that good employees want to innovate and adapt, they also want to set their own goals.
Employees will naturally form a vision for what they would like to accomplish. As the CEO, it’s up to you to make sure their goals fall in line with the company’s goals and to make sure their goals are realistic and attainable. “For the most part, people will establish their own goals,” Keister says. “If you ask them, they’ll tell you what they’d like to accomplish. If anything, what you need to do is make sure they’re not so stretched that they’re likely to fail. You usually don’t have to push people into higher goals if they are good workers, but you do have to make sure they are realistic when they set them.”
Keister relies on the history of an employee’s work and related metrics to make sure that person is not either overestimating or underestimating what can be realistically accomplished.
Experience is usually the best teacher when it comes to goal-setting, however. When in doubt, Keister says to err on the conservative side. “You really need to have some history,” he says. “When you don’t have that history, you are better off setting the goal so that it is achievable, then staying close to that person and seeing how much more they could achieve beyond the goal if it was set too low.”
If there are others performing the same job throughout your company, you can use the performance of those employees as a cross-reference tool. Keister says their performance should set a pretty accurate standard for goals associated with that position. When employees meet and exceed their goals, it is important to reward them. He says rewarding employees gives them a sense of value and re-affirms their belief in the goals and mission of the company.
Keister says that the reward process should be democratic, offering the same opportunities to everyone in a certain level of the company. When he joined Keystone in 2004, a small percentage of the company’s general managers, regional managers and vice presidents were eligible to become part of a President’s Club for high achievers, the perks of which included an annual weekend getaway. “I said, ‘Why shouldn’t we have 100 percent of the people eligible to make the President’s Club?’” he says. “We need to set the goals so that 100 percent of the (general managers) are eligible to make it. We don’t want just 15 percent of our team to feel successful.”
Keister says if your employees feel successful, they will produce successful work, and ultimately, the company will be healthier as a result of the gratitude you showed. “You need to challenge your team to achieve goals they may not have thought possible,” he says. “Through their achievement of goals, they become much more confident in their ability to achieve greater successes in the future. Encouraging that is really the CEO’s role in fostering a culture of growth and innovation.”
HOW TO REACH: Keystone Automotive Industries Inc., www.keystone-auto.com
