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How Dan Croft lays it all on the line when he interviews job candidates
Dan Croft doesn't train his employees as much as he should at Mission Critical Wireless LLC. It's a fact he freely admits, but he just doesn't have the time to do it.
"If somebody tells me I don't train them enough, I say, 'I agree with you, I don't train you enough,'" says Croft, the 100-employee company's founder, president and CEO. "I will tell a prospective employee, 'Do not accept a position with us, even if we offer it to you, if you are not absolutely passionate about wireless, because I cannot pay you enough and train you enough to know what you need to know. You have to take an incredible amount of self-initiative.'"
Croft operates in an industry that is changing by the second. Mission Critical helps clients find the right wireless mobility solution for its needs. Five years ago, the most common answer centered on a BlackBerry. Now, he and his clients have a whole range of products to choose from, and those clients expect Croft to help them make the right choice.
"We have to be ahead of the curve in terms of our knowledge and experience with mobility technology," Croft says. "That means you can never sit still."
So Croft's challenge is to find people who have technical expertise as well as the ability to relate to people and help clients get to the root of their needs.
"I can't hire somebody off the street and put them to work the next day," Croft says. "We've developed our own battery of technical competency tests that we use as predictors of their capacity to get down the learning curve. But we will also probe them during the interview process just looking for signs that in their life, they were always curious and looking to gain knowledge beyond what the basics of the job required."
When he interviews prospective employees, Croft tries to see if they have what it takes to thrive in a business that is constantly changing.
"I'll ask a prospect, 'Give me an example of something you learned outside the company that you brought into the company,' as opposed to, 'Did the company train you properly?'" ne says. "Tell me about the most difficult client you've had to deal with and give me an example of how you dealt with them when they were very upset and unhappy. I'm not necessarily looking for whether what they did was the proper thing to do.
"What I'm looking for is were they able to think outside the box? Were they able to really determine the source of dissatisfaction and come up with creative ways to address the root cause of why a customer or client was unhappy? See how they respond under duress. When you are in the services business, I guarantee every single client is going to have something they are concerned with."
The key to having a work force that does what you need them to do is your ability to articulate your expectations before you make the hire.
"If you don't instill in the individual that, ultimately, they own the responsibility to be as knowledgeable about what we do and the product space that we participate in, if they don't own that responsibility and take it seriously, they will never be successful," Croft says.
It's a cliché for many companies, but for Croft, the importance placed on achieving great customer service seems to make sense.
"I only have my service," Croft says. "If I don't do this well, if I don't service you well, I'm out of business. That's all I have. There is no other measure of my success."
How to reach: Mission Critical Wireless LLC, (866) 629-7070 or www.missioncriticalwireless.com
Don't be the hero
Dan Croft doesn't want to be the smartest guy in the room in the eyes of his clients. His goal is to make the people who lead the businesses his company serves look good in the eyes of their employees.
"One of our challenges is always that our clients view us not as, 'Well, we're going to use them because we're not capable of doing this,'" says Croft, founder, president and CEO at Mission Critical Wireless LLC. "If that's the basis of the relationship, there's always going to be some friction that you really don't want to deal with.
"We work very hard at letting them know that when they engage with us, they're picking up their own staff. It's their staff. We work for them."
Croft is proud of the expertise his 100-employee wireless mobility company provides, but he doesn't hold it over his clients.
"Our goal is to make our clients — and typically our client is an IT manager or a director or a CIO — our goal is to make them heroes and to make them look great," Croft says.
How a methodical approach helped Thomas Moran settle in at Addison Search
Thomas B. Moran felt the weight of expectation when he arrived at Addison Search for his first day as the professional staffing firm's new CEO. Some of the expectations were good, some were bad and others were mixed.
Call it par for the course when there's a new sheriff in town.
"Any time a new CEO comes in, the automatic thought processes change," says Moran, who took over as CEO at the 1,000-employee company in October. "Oh, he or she will change everything. In some cases, that's true and sometimes you have to do that. But in reality, that's more of a thought process than anything. The challenge is making sure you manage everybody's expectations through a lot of communication."
One of the first things Moran had to deal with at Addison Search was the fact that some employees weren't happy about his selection as their new leader. Add that to the pile of everybody else's curiosity about how he was going to lead the business and suddenly, Moran was dealing with a lot of pressure.
But he didn't see it that way. There was no way he could address everyone's concern and answer every question on his first day on the job. So he didn't even make an attempt to do that.
"The biggest mistake a lot of people make is because you're the CEO, you have to show instant change to say you've done something on day one," Moran says. "I've done that in the past and it's come back to burn me. Understand your landscape, learn and stay quiet for the first 30 to 60 days so the first decision you make is a powerful one, a well-educated one and one that people realize is well-thought-out."
Moran chose to take a methodical approach to his new position. The first step was to begin building relationships with the people who were now working for him.
Get to know people
One of the first requests that Moran made when he became CEO at Addison Search was to get a copy of the company's organizational chart.
"I wanted to know what was in every office and at every layer of the organization, whether it was front office or back office," Moran says. "Then you select individuals as you travel within those groups. You can't meet with everybody. So you make sure when you travel, you know what is in the offices and you're tackling every aspect and touching different levels for every group."
You need to ask open-ended questions and ask them with a tone that reflects your desire to learn, rather than dictate.
"The first question you always ask is, 'Just tell me a little bit about yourself,'" Moran says. "'What do you do for the company? Tell me about your background. Why did you join the organization? Do you still feel the same as the day you started? Why or why not?'"
The key thing about all these questions is they show your employees that you're interested in what makes them tick.
"They are more toward the individual rather than, 'Tell me what's broken in the company,'" Moran says. "'Where do you want your career to go? Where do you see yourself in this organization?'"
This effort to build rapport was even more crucial with the people who weren't happy about Moran being their CEO. You shouldn't confuse "getting-to-know-you" questions with avoiding the topic at hand, however.
"Tell me the truth," Moran says, of his first words to the people who were unhappy. "I understand you're not happy. That's fine. You have a right to be. I'm new. Ask them straight out, 'Tell me why. I can't address you until you look me in the eye and tell me why.'"
Even if you're not a new CEO, you certainly have faced or will face a situation where people working for you aren't happy with you. The same principles apply. You can't just be a bully. You need to try to soften the conflict and solve the problem that exists.
"It's all in your word choice," Moran says. "'Hey, I understand this is uncomfortable for you that there is some change here and that's normal. I completely get that. A new CEO comes in and you may have some past things, I get that. All I would like to know is why you feel that way so I can understand how to work with you in the future. I value your opinion.' It's all in the word selection."
Take the approach that you're there to learn, and not dictate, and you'll make a lot more progress with whatever group you're trying to make connections with.
"I want to learn as much as I can about the organization, and I'd love your advice," Moran says. "I'd love your input to help me learn. Right there, that makes me feel more comfortable if I'm that person. There's no wrong or right answer. This is not a political environment. You can tell me whatever you want to tell me. You can feel as comfortable as you want to feel."
Pick your battles
A good way to demonstrate that you really are interested in what your people are telling you in these conversations is to take notes. If you're talking to 40, 50 or 60 people over a period of a few weeks or months, it will help ensure you don't forget what the third person told you and remember only what Nos. 69 and 70 had to say.
But it will also help you identify common themes in all that you are hearing.
"You may take pages and pages of notes, but it usually comes back to every individual honing in on three or four of the same things," Moran says. "And so you start to hear it more often. I gather it all and look through my notes and I really start to understand where the business is functioning. So you take what you've learned and put that into a scenario of where you want it to drive the strategy."
As you begin to pick up on themes of areas that need to be addressed in your business, you again should take a moment to remember that you can't do it all at once.
"You start implementing on some of the more blatant areas that need to change right away," Moran says. "We haven't had coffee in our office. The next day, I call my secretary and say, 'I want coffee delivered to that office and paid for right away.' They see you listened. You implemented something quickly. Then it leads to some of the bigger changes that aren't going to be as popular with most people."
As Moran met with more people, he sensed that employees at Addison Search were looking for leaders who could do a better job of making decisions and getting everyone engaged in helping to get things done.
His solution was to implement what he called a "bottoms-up budgeting process."
"Everybody would be tied to the goals of the company down to every desk," Moran says. "Each manager worked backward to get the goals of each individual rolled up to the next manager that rolled up to the next manager that rolled up to the VPs that rolled to us at the CFO and CEO level. Now everybody is tied to the same goals."
Moran wanted to show that he heard his peoples' request for engagement and he understood their desire and willingness to help things get done. He was now giving them an opportunity to make it happen.
"So now I'm going to hold you accountable to those goals and numbers," he says. "So that was communication, that was accountability and really that was everybody saying, 'We want to know what we're accountable for and tell me what I'm expected to do. Well, you're expected to hit this to help us hit the 2012 budget.'"
The result of hitting the budget would be the opportunity to approve more employee requests.
"If everybody focuses on hitting the 2012 budget, we can afford more," Moran says.
When employees requested more insurance benefits, Moran could look at the budget and if people had stepped up to meet their goals, he could pursue more benefits.
"I've got them tied into the accountability and growth of the organization," Moran says. "Oh and by the way, if you don't hit those numbers, maybe you shouldn't be here. So now everybody understands what they are accountable for."
Build a foundation
In order to be successful implementing new initiatives, you need to have a strong rapport with your leadership team. So as Moran was getting to know people at all levels of Addison Search, he was also looking to build relationships with his fellow leaders in the company.
He did a lot of listening, but he also talked about his own leadership style and what had worked and hadn't worked in past experiences.
"Here's where I am," Moran says. "Here's how I've been successful. Here's how people work best with me as managers. People that weren't successful with me, here's what happened and why. I let them know that all at the same time."
Moran shared with his team his desire to make Addison Search an employer of choice and added that he wanted to work with the team to make it happen.
"I set that tone in the beginning and then I say to them, 'How do we do that together?'" Moran says. "How do you want to accomplish that? How do I want to accomplish that?"
In all these various conversations you have, you're looking to build a foundation upon which you can conduct the business of your organization. Sometimes that will be good business and sometimes it will be bad. You and your team need to be ready to collectively handle both.
"You have to fix the problems," Moran says. "Don't always be a leader that runs to the good side. You have to go to the bad side. I like leaders that go to where the issues are, not one that is going to run up and tell me how great they are doing all the time. Every company has issues."
Fortunately for Moran, while there were some issues he had to address at Addison Search and some people who weren't sure about him as their leader, there were a lot more people who wanted to do whatever it took to help him succeed.
"I was thoroughly impressed with the staff we have, the talent level we have and the motivation that they have to be successful," Moran says. "That was surprising, to be honest with you. But even more important, it was a breath of fresh air from the jobs I've taken in the past."
Had he not taken a patient approach, he may not have given himself a chance to appreciate the quality of his team.
"The worst thing you can do is go in and change something when you don't even know what you're changing," Moran says.
How to reach: Addison Search, (312) 424-0300 or www.addisonsearch.com
The Moran File
Thomas B. Moran, CEO, Addison Search
Born: Chicago
Education: Economics degree, Illinois State University
What was your first job?
It was when I was a junior in high school. I worked for the high school, and I basically just did summer maintenance mowing lawns, turning dirt, cleaning the bottoms of desks, painting fences, raking the baseball diamond.
The main thing it taught me is the value of money and the understanding that you have to work for a living.
I learned what responsibility meant and that it doesn't just mean for me, but it's for people or a group of people that you report to. The guy you are working for is counting on you to get it done and not only get it done, but get it done right.
Who has been the biggest influence on your life?
Helen Becker. She was one of our top performers in my first job out of college, which got me into the staffing industry. I was a sales producer and so was she, but she was much more seasoned. She was an older woman.
I used to watch her produce. She was a mentor and she taught me what relationships are about in our business. She helped me realize that our business is about developing good relationships with clients and providing them good service and realizing that you need to stick with that relationship and make sure that you always cherish it because everybody is out to take it from you.
She took that seriously. She had cancer and went through chemotherapy in the morning and would come into work in the afternoon. She probably didn't have to work but she loved her clients and loved her job and loved coming to work.
Frank Porter approaches change with caution at Central Cadillac
Frank Porter wanted to get people more engaged in the key decisions that had to be made at Central Cadillac, but he found that employees and even department heads weren't as eager as he thought to be brought into this circle of trust.
"They were used to funneling information up the chain and waiting for a decision to come down," says Porter, the car dealership's president. "It took a long time to embrace the fact that you've got all the facts there in front of you and as a department head, while you can certainly discuss it with me, I would expect you to make the decision."
Central Cadillac was founded by Porter's grandfather about 70 years ago and he was then followed by Porter's father, who took the helm in the 1960s. His father brought an authoritarian management style to the job that was not a fit in any way with Porter's personality.
Porter was surprised, however, that his attempt to bring collaboration and open discussion into the mix at the 75-employee company was met with such anxiety.
"I thought this would be something that would be a couple meetings and we would just sail out," Porter says. "I thought this was what my department heads were looking for. I found that we had to change the entire culture, the whole way they had been brought up and managed up to that point. So no, it was not easy. I was surprised at how tough it was."
The big hurdle to transforming the car dealership's culture was instilling enough confidence in his leaders to be willing to make decisions without seeking out his help and advice.
"They wanted someone else to make the decision," Porter says. "They didn't feel at all comfortable sitting down with employees and talking through an issue and talking through a potential solution and getting their buy-in."
Porter's initial lesson to his leaders was that you can't fear making a bad decision.
"If I make a wrong decision, I'm not going to get blasted for it," Porter says. "That's part of the learning process. Sometimes, wrong decisions are better than no decisions. Usually they are. It was a whole process that we went through with all the department heads."
If you're trying to transform a group of employees who haven't had a lot of input up to that point, create situations where they can offer their feedback.
"We revamped our mission statement," Porter says. "That was done by an interdepartmental group of employees that put it together and worked it. They came up with some basics as to how to guide our employee group in making decisions."
Take part in those meetings, at least at first, and demonstrate and actively encourage people that it's OK to offer their opinion, even if they don't fit in with what the leaders at the top believe.
"You have to bring out in those meetings that it's alright to discuss a problem," Porter says. "It's alright to criticize your manager. It's the only way we're going to move forward."
Porter sees leadership as less about removing obstacles from his employees' path and more about showing his employees how they can take part in removing those obstacles.
"I think we clear obstacles as a team," Porter says. "If we've got things running in the right direction and if we have people who are self-empowered and working collaboratively within both their department and in the organization, I should be able to get out of their way and let them run. There are always going to be situations that pop up where you have to sit down and say, 'OK, we're faced with this issue. How do we best address it?'"
If you create a collaborative environment, your people will have more answers than questions about this concern.
"Give people an opportunity to have some control over their own destiny," Porter says.
How to reach: Central Cadillac, (866) 733-1822 or www.centralcadillac.com
Talk about it
The only thing worse than leading an organization and not giving your people any control over their own destiny is misleading your people into believing that they have control over that destiny.
"There's nothing worse than having the responsibility and no authority," says Frank Porter, president at Central Cadillac. "In that situation, your people kind of throw their arms in the air and say it's never going to get solved."
One of the challenges for Porter at Central Cadillac was convincing his employees that he really did want to give them more authority and more power in how the 75-employee car dealership operates.
Success with this or any other operational problem often comes down to your willingness to sit down and talk it out.
"If there's an issue that is more outside the framework of what they have experienced in the past, I might say, 'Why don't you get your facts together on that and let's sit down and discuss it,'" Porter says. "We can talk through the situation and the issues. If they need more assistance in making that decision, there may be other resources I can bring to bear that would help them."
Craig Shular helped GrafTech International take hard steps toward growth
Craig Shular is an upbeat guy, but even he accepts that things had gotten pretty ugly at GrafTech International Ltd. in the early 2000s. Debt had surged to more than $1 billion despite net sales in the $500-million range. Shareholders couldn't flee the publicly owned company fast enough.
"Most people had written us off," says Shular, chairman, president and CEO at the manufacturer of carbon and graphite products. "The banks had frozen all our facilities. Suppliers were making us pay cash on delivery. It was that kind of environment."
Big problems often require big cutbacks and this situation was no different. The company ended up going from 10 graphite electrode plants to five and reduced its employee count from 5,000 to about 2,200. Benefit programs had to be completely redone.
"Brutal," says Shular, when asked to describe the steps that had to be taken at the company's low point. "A very tough process."
The challenge for Shular was that in the midst of all this turmoil, he had to find a way to get the employees who remained at GrafTech to buy into his plan to get the company back on its feet.
He had a vision he hoped reflected an optimistic view of the company's future, but he had no way of really knowing if it could be fulfilled. It was something to work toward, and so it was up to him to take that optimism and build off of it.
"Unless you have a very clear picture at the senior management level and you can articulate that to all your teammates everywhere around the world, you're going to have a tough time propelling the team forward," Shular says. "The team is not going to be able to embrace the types of changes you're asking them to make. That very clear vision that is very well-articulated to every team member is fundamental to enabling and embracing the type of changes that have to happen."
Shular firmly latched onto that optimism and hoped his employees, who he prefers to call teammates, would join with him and do the same.
Lay it all out there
Shular needed to make it clear to his leadership team how deep the company had sunk and he had to do that before he could move forward with his recovery plan. In that situation, you really can't afford to sugarcoat the truth.
"Do not hold anything back," Shular says. "Give the team the exact, blunt, clear picture of your current reality. Here's where your customers are. Here's the quality of the product. Here's what the balance sheet looks like. Here's what your cash flow looks like. All the various metrics you use to drive your business. Here's what we look like today and make very clear how that's just not going to be able to continue. It's not going to allow us to be successful."
Shular didn't stop at his leadership team. He wanted employees throughout the company and around the world to understand that the leadership team was not in denial about the need for change at GrafTech.
"So when someone in South Africa or France or Brazil goes home at night and their spouse says, 'Gee, what was your day like? What's going on in the company,' that individual can articulate the current reality,'" Shular says. "Here's what it looks like."
As the cuts were announced, the climate at GrafTech was quite bleak. It was a necessary condition, but not one that Shular wanted to persist for too long. He needed to act with compassion, but also with a bit of urgency.
"If you continue to roll those out over a period of time, you're going to get a team that is constantly looking over their shoulders," Shular says. "What's going to happen next? When is it me? When is it my family? So another very important part of any turnaround is to the maximum extent possible, lay out your plan and roll it out all at once."
Shular wanted people to understand where the company was and the steps he was now forced to take. But he also wanted them to see a picture of where he felt the company could get to in its recovery.
"What we told everyone was that this was what we have to get done," Shular says. "If we can get this done, and it will take months and in some cases a couple years to execute on all these, then we have a very good shot of getting to our vision."
When you're in a situation where you're making significant cuts, you've got to keep the plan in everyone's mind. The idea that they might lose their job doesn't fade easily from the mind of your employees.
"You're going to have to continue to overarticulate the vision and articulate where you are on the milestones," Shular says. "Having some short-term milestones where the team can be successful and acknowledging them, highlighting them and celebrating them will help the team toward more of a view forward."
It's those little victories that can start the momentum you need to achieve bigger victories, or at least instill a little more confidence in your people.
"Preferably, they are some shorter-term milestones where the team can start to see two months from kickoff, 'Oh, look what we did,'" Shular says. "So you've got to have some near-term successes that you believe you can knock off early in that game to continue to build the confidence in the team. Then you have to celebrate the hell out of those successes. Highlight them, celebrate them, have fun. If you don't have fun in a turnaround, you're going to lose a lot of people."
Get in front of people
Shular couldn't meet with every one of his employees around the world in the time period he needed to.
So he had to make the visits he could make really count and then rely on technology to fill in the gaps to ensure everybody had a clear idea of the direction he wanted to take. To that end, it wasn't just meeting with top management at each location and having a catered lunch in the executive conference room when Shular arrived in town.
He wanted to interact with as many people as he could at the locations he visited, even it took all day and night.
"Don't go in and just meet the day shift," Shular says. "There are two other shifts. The other two shifts are going to get the message with or without you and I think it's much better if they hear the message directly from the CEO. I have found that there is nothing more powerful than being on the third shift as the CEO is on the plant floor conducting a town hall."
If you don't have second and third shifts, the philosophy still applies. You've got to meet with people from throughout your company if you want them to believe that you value their place in the organization.
"Walk the plant floor and spend time with the operators, the men and women who actually make the products and provide services to the customer," Shular says.
Take the time to field questions and do it with an attitude of patience, not one that conveys a feeling of being late for your next appointment.
"It gives you some direct feedback on maybe how the message is not coming through clearly or is not playing clearly in these countries," Shular says. "They misinterpreted it. It lets you see that and get it rectified."
One aspect that you might overlook in delivering information to your people is the mode of travel that you use to get to those meetings. At a time when someone's good friend at the plant or in the office has been laid off, first-class airfare and fancy rental cars can easily become an example of insensitivity on your part.
"Everybody flies economy," Shular says. "When you're in a facility asking them and challenging them to drive continuous improvement every day, whether it's productivity, quality, on-time delivery, inventory turns, it's important that not only the CEO, but the entire leadership team walk that talk. So for the CEO to pull up in a big full-size rental car, that doesn't work for us. I'm going to be in the cheapest, smallest car I can get. I'm going to arrive in economy. You'd be surprised how clear those messages trickle through the entire team."
To help drive that message home, Shular instituted a policy where no one, himself included, would fly anything other than economy no matter how far or long their flight might be.
"Because of our global network and all the travel we have, for us, that was over a $6 million savings a year to get everybody in economy," says Shular, who says he flies about 150,000 miles a year.
If you're trying to balance the cost of travel with the importance of face-to-face communication, Shular says look at what you're trying to gain from the trip and think about the message you want to convey to your people.
You can't be ruled by cost but you also can't be limited by it if it could help your business. It's often a tricky line to navigate.
"Are we growing customers? Are we taking care of customers? Are we penetrating new markets? Is it going to allow us to be more successful in the future? Is it going to drive cash flow and profitability?" Shular says.
"As a business person, we would weigh those kinds of decisions all the time. We are very careful not to get to a place where we're so driven by cost that we lose the view and drive toward what is propelling growth. Propelling profitable growth is our No. 1 mission. So the day that we let cost become the decider or the overriding decider, we won't be in a good place."
Focus on family
Shular hoped to instill optimism with his people at the same time he was delivering bad news through his approach, particularly with pay cuts.
"We cut salaries, but what we did was all that money that was cut, we put it into our global bonus plan," Shular says. "What we said to the team was if we hit 1 ½ times target for that year's goals, we'll pay out all the bonus money plus all the salary money that had been cut. In addition, we said all the officers' salaries, which were cut 10 percent, they can never get that money back. That will go into the pool and it will be paid out to all the other teammates if we hit 1 ½ times target."
Shular wanted to show people that he wasn't just slashing to reach a number and that things would never be the same again. He wanted to provide a sense of hope that if people worked hard, they would be rewarded for it.
He also wanted to show a sense of understanding that a recession and cutbacks are generally tougher on employees than they are on management.
"Significant portions of the management team cannot get any bonus unless the people get a bonus," Shular says. "We don't have a situation where the senior management team made a pretty nice bonus and the rest of the team got nothing or a very meager bonus. We all sit in exactly the same bonus pool and we all have the same metrics and we're very much aligned. Having the right well-aligned incentive compensation program is very important to driving teamwork."
As it turned out, his people did work hard and did earn that money back.
"The team that year hit 1.8 times target," Shular says. "All that money, including the officers' money, got paid out to all the teammates."
If you show yourself to be an ally of entry-level employees and middle management as well as top management and the leadership team, you'll fare a lot better earning support for the things you want to do. And you'll probably find the results are better too.
Shular recalls something one of the employees said at a meeting he had with the third shift at a plant that GrafTech had acquired as part of its turnaround.
"He stands up and says, 'Gee Craig, do you think we could get our fishing competition back?'" Shular says. "And I say, 'Fishing competition? How is that work? What's that all about?'"
Shular discovered that employees at this location at one time had an annual redfish competition that had become a company event. The previous owner had let the event fade away, and Shular was being asked if he could help get it back on the calendar.
"I said, 'As long as you invite me,'" Shular said with a chuckle. "And so we reorganized and reinstituted it. It was last October. We have 150 teammates at that site and 78 joined the competition over a weekend. … It's important that leadership drive fun. Work should be a fun process. When you think about it, we spend a majority of our time at work. In my view, the only reason we all work is for our families. If you don't believe that, look at any individual that gets a promotion or a success at work or accomplishes a hard-fought goal. The first person they call is somebody back home. So we're all here because of our family."
Keep driving forward
One area that wasn't touched during the company's recovery was research and development.
"In fact, we grew R&D," Shular says. "It was so paramount to us that we would have to invest in R&D and spend a lot of time on innovation that we moved our global headquarters here to Parma to be right next door and under the same roof as our R&D operation."
The relocation of headquarters, along with the acquisition of several companies that broadened the expertise and capability of GrafTech, was evidence that the company wasn't just looking to recover, but that it was looking to continue growing.
GrafTech had made some significant strides. The banks were looking at the company much more fondly and the company's market cap had jumped to $3.2 billion.
But Shular was already thinking about the next downturn and what could be done to lessen the blow it and keep the growth momentum going.
"We knew a recession was going to come eventually, they always do," Shular says. "I don't think anyone knew when, but one of our mantras each day was, 'We're a day closer to the next recession.' So we didn't want complacency to fall into the company. We had done a great turnaround and everyone was patting us on the back. We didn't want to fall into the usual trap of, 'Hey, we're pretty good.' So we kept a mantra that we need more new product development, more patents, more innovation and continued relentless drive on cost structure and productivity."
The next recession did come, of course, and it was a big one. Net sales took a dive from $1.2 billion in 2008 to $659 million in 2009. But sales got back over the $1 billion mark in 2010 and GrafTech reached $1.32 billion in 2011 with a market cap of $1.9 billion.
The company is also back up to 3,181 employees.
"Today, we sit with almost 800 patents and patent-pending operations, one of the largest in our space," Shular says.
"So that's the turnaround, that's building a spectacular balance sheet and that's having a great balance sheet and a great team that is very, very nimble in the trough and can still play offense. So we expect as these economies continue to recover to emerge with a bigger, better and stronger business model and be the clear low-cost producer in our industry with a lot more science, technology and patents than when we entered this recession."
How to reach: GrafTech International Ltd., (216) 676-2000 or www.graftech.com
Takeaways: Be honest about your problems. Consider costs. Always prepare for the next recession.
How Darryl Jones found a new way to make his business work and stay competitive
Darryl Jones has watched each year as the number of convention attendees who travel to St. Louis drops a little bit more. Jones is managing partner at D&D Concessions LLC and is responsible for food service at the America's Center Convention Complex in St. Louis.
"Now that we don't have the 20 million people coming in, we may have six or seven million people coming into St. Louis," Jones says. "It's a challenge. So in our business, what do we do? We have to look outside the box because we can't get the big conventions here anymore."
In short, Jones had to reinvent his business. It was either that, or close up shop for good, and he wasn't prepared to do that for his 350 employees.
"You have to have the presence to always look at the landscape and see how it's changing," Jones says. "At one time, we depended on X amount of conventions to generate 80 percent of our revenue. Now that number is only generating 50 percent. So how do we make up this gap?"
The simple answer is you look for other means of generating revenue. But you take caution to not make every idea out to be the grand solution to all your problems.
"You try to win people over by saying, 'OK, look. Let's just try it like this. Let's tweak it a little bit.' You try to compromise," Jones says. "If it doesn't work or we don't see any change, we can always go back. There's nothing wrong with going back. There's nothing wrong with saying, 'Hey, we made a mistake.'"
You may not even have to trot out a new idea if one of your competitors has tried a new initiative to get their business going again.
"Instead of reinventing the wheel, you look to see what they've done and you try to tweak that," Jones says. "Very rarely will you have that one person to jump out there. If that person has jumped out there, you look at it, analyze it and you say, 'OK, we can tweak this just a little bit better. They may not have thought about this. They've changed the landscape a little bit, but let's take it a little further.'"
The key is to take a measured approach to change. If your idea works, great. But if it doesn't, your people will still be ready to follow you with the next option.
All this relies, of course, on your ability to get out there and get engaged with your people.
"If you're the CEO that's always behind closed doors and you're always meeting with senior staff and you never engage the junior staff and the hourly folks, you may have a problem," Jones says. "You're going to become like an untouchable."
Get to know your people and let them get to know you. Not the polished and controlled you that only engages in small talk. Be the leader who really gets to know what your people are all about and what they like about their work and what they find challenging about it.
"You have to know them," Jones says. "Once you engage them, you have just as much passion about their families as they have. Once you buy them over, they will do it for you. It will be a place where they think, 'Hey, I can go to the boss's office anytime I want to.'"
You may be thinking to yourself, 'I always talk about my open-door policy.' But if you don't have anyone coming through your open door to see you, maybe you're putting other signs out there that convey the message that you really don't want to hear from your people.
"If the hourly employees can see you get out there and you sit down and you put that pattern together and you say, 'Hey, this is how you're supposed to do it,' they're going to say, 'Wow, this person really knows what they are talking about,'" Jones says. "They will do anything for you if they know you care."
How to reach: D&D Concessions LLC, (314) 429-3400
Stay hip
If you're feeling out of touch with your customers, Darryl Jones has a suggestion on how to reconnect that you may not have thought of before. But he insists it will produce results.
"You can probably incorporate any business you have when you start looking at fashion magazines," says Jones, managing partner at D&D Concessions LLC. "Those guys are always on the cutting edge. The auto industry didn't get to where it is by saying, 'Hey, we're going to go with the same old-style look. They started looking at those fashion magazines and saying, 'Hey, you know what? These are the colors people are looking at.'
"They are looking at tech magazines and saying, 'We need to incorporate these things. These young adults, they want this type of experience in a car.'"
Jones believes much can be gained from the younger generation that is establishing itself and setting the trends for the future.
"You'll pick up a lot," Jones says. "What do you like? What type of atmosphere are you looking for? What types of colors do you like? Talk to the younger generation because that's your next source of revenue."
And everyone should be taking part in that dialogue.
"It's everyone's responsibility," Jones says. "From the guy sweeping the floor to the guy signing the checks, it's everyone's responsibility because everyone is traveling in different circles."
How Lynn Britton gave his employees at Mercy hope when they needed it the most
Lynn Britton saw the weather reports on the evening of May 22, 2011, and knew Southwest Missouri was going to get hit hard. But there was still no way he could be prepared for the tornado that struck Joplin, Mo., and completely destroyed St. John's Mercy Hospital.
"I don't think there is ever a perfect disaster plan or disaster drill," says Britton, president and CEO at Mercy, a 38,000-employee company which operates hospitals in more than 200 communities, including Joplin.
"You can't anticipate every single kind of scenario that is going to emerge in a unique situation. What you have to do is be sure that the leaders you count on have been effectively groomed and mentored in your organization and that you're confident that in the moment, they can make thoughtful decisions."
That moment had arrived for Britton and his entire team. He was home when he got the call that Sunday evening from Michael McCurry, Mercy's COO and executive vice president, that erased any doubt as to how real and how devastating the situation was.
"He told me a tornado had hit, a direct hit to the hospital," Britton says. "While he didn't have complete information because there was such a challenge on the ground in Joplin, he had enough to know we had probably lost the hospital, and he was worried as I was on that phone call about the work force, our co-workers and patients."
Instantly, Britton faced a nearly impossible task. The list of problems running through his head seemed to be endless and every issue seemed more important than the last.
"There was so much that needed to be sorted out all at once," Britton says. "We had our own work force, co-workers and physicians that we needed to be concerned about and interested in understanding how the tornado impacted them. We had our patients, those that we care for, who had ongoing needs that we needed to very concerned about. And then the broader community.
"Mercy is a not-for-profit organization. We exist solely for the purpose of serving the health care needs of the community. I can't think of a greater time when those kinds of needs were present than in the tornado. The challenge was how do you focus on such a broad-based need and address it in very specific ways to all those different constituencies simultaneously?"
If the hospital and its staff had been untouched by the tornado, they would have had a massive job ahead providing care to all those who had been victims. But the hospital was gone. So there were still all those needs for all those people, plus so many others who needed help, and seemingly no capacity to assist with any of it.
That's not the way Britton saw it, however. He had to convince his team that in the midst of all the devastation, there was still reason for hope.
Create a sense of purpose
Command centers were already up and running in Joplin late Sunday evening to provide immediate care. So Britton began preparing for his trip to the site the next morning by doing a little research on other recent disasters.
"I asked a couple of team members to do some quick research for me to see if there were any lessons learned from the other communities who had been through this sort of thing," Britton says. "What happened to help the community come back strong? What happened to help companies that were really devastated by the disaster? What didn't work? What were some of the lessons learned?"
Britton came away with an important piece of insight that would guide his decision making in the hours and days ahead.
"With Hurricane Katrina, most of the medical community did not have any continuity of jobs," Britton says. "So they left the community, went to other places and established a new life. By the time the health care providers and hospitals wanted to try to rebuild, there was no medical work force to operate them. So they really struggled at bringing back to full operation the medical resources in New Orleans. I thought a lot about that and what we had to do to prevent that from happening with the Mercy work force."
The Mercy hospital in Joplin had about 1,880 workers and Britton had a message for each of them: The hospital would be rebuilt and when it was ready to open, they would all have jobs.
"Even though it was going to take three years or more to build the hospital, they were going to stay employed," Britton says. "We needed them to be flexible with us and we had to find ways to keep their skills in use. But we couldn't reopen a hospital in three years if we didn't have any current medical skills."
It was certainly a message that offered hope for the future. But in the immediate aftermath of what was happening, it wasn't much more than that.
"The local management team — you could imagine what a daze they were in," Britton says. "They had lost their hospital, the very place that they come to work every day. The place they got their identity. At the same time, a number of people from the corporate office had descended on them to take control. The local team was in a fog and we were stepping in. It occurred to me on Monday night that wasn't a good thing. I had to get that local team re-energized and refocused."
Like everything else, that was going to be a challenge too. There was no conference room to gather in, no e-mail network to use to deliver his message and in most cases, no accessible phone lines.
Before he could energize this team, he had to find a way to get them all in one place.
"If your facilities are destroyed, as our's were, we had to rent space at the Holiday Inn convention center," Britton says. "We had to create a command center and get the word out that that was the gathering place. There had to be a place, one place, where everybody could come together. You just have to have a gathering place where people can begin to reconnect to each other."
Spreading the word to everyone he could, Britton worked to gather his team. He then explained that he wanted a temporary hospital set up by the following Sunday, just one week after the tornado had struck.
"I gave them a number of big, hairy, audacious goals that they needed to see to," Britton says. "One of them was we wanted to have an acute care presence back within a week in Joplin. I gave that job to the chief nurse and chief physician. I wish I could describe the look on their faces."
Not surprisingly, it was one of great shock. But it was quickly followed by one of purpose and appreciation at being given a meaningful job to do.
"It's an important responsibility for leaders to find that strength and demonstrate it to their team," Britton says. "They needed to latch onto something like that to try to figure it out. When they first got that assignment, they were sort of shocked and unsure. But by about 3 o'clock in the afternoon, I could see they had a spring in their step and a sparkle in their eye and they were coming to me saying, 'We think we've got an idea how we can do it.' They did it and it was evident why people need challenges."
The team traveled to nearby Branson and asked a disaster team if it could move its field hospital to Joplin.
"We brought it there and it was the beginning of a recovery for that team," Britton says.
Be inspirational
As Britton tried to give his people meaningful things to do and as much normalcy as he could provide in such a devastating situation, he also made an effort to be compassionate to the great stress everyone was feeling.
He began listening to stories and sharing those stories with as many people as he could.
"The maintenance worker who came in and had to walk the last mile because of the debris and risked his life to shut off a gas line because gas was leaking into the hospital — he had to crawl through debris carrying a 3-foot long wrench so he could turn off the main valve to the gas line," Britton says. "Story after story and I made sure I told them over and over to help that team appreciate what an amazing job they had done."
He told of how the hospital had been evacuated in 90 minutes, with 183 patients, two surgeries in progress and a number of patients in the ICU.
"That's that moment where you have to find within yourself that strength to be inspirational," Britton says. "They just lived through a devastating experience and you have to relate that experience to them. You have to be present."
There were an endless number of decisions that Britton had to make, but it was his presence that was the most important thing he could provide at that time.
"If you're decisive and you have all the right intent and righteous cause for what you're doing, I don't think people are going to remember a decade from now the nuance of one or two decisions you have gotten wrong," Britton says. "What they'll remember is whether or not you acted and tried to look at the bigger picture and to do the right thing. You do those things and people will remember that. They'll remember that you stood for something and you made a difference in the lives of people at a time when they were vulnerable and they needed you the most."
Think of your people
As the days began to pass and the immediate crisis began to ease a bit, of course, people's concerns turned back to their job security. Britton had promised that everyone's job would be protected, but many still didn't believe him.
"I had to answer 1,000 times, 'What does it mean that I still have my job?'" Britton says. "I would say, 'Were you worried about your job before the tornado?' They would say, 'No.' So I would say, 'Well, then don't worry about it now. You have your job.' They'd say, 'Well, when does the paycheck stop?' All that sort of stuff. You just had to really be present and patient and continue to repeat the messages over and over and over again."
So how did Britton put his people to work when their place of employment was a pile of rubble?
"You have to call on others to help you," Britton says. "When we announced we were keeping all the co-workers on the payroll, we knew those other hospitals would grow their business for the short term because that displaced volume had to go somewhere. So we called each one of them and said, 'What if we shared our talented work force with you? You pay us whatever hourly rate you would pay for the same skill and we'll keep them on our payroll and pay their benefits to it helps defray the cost."
Britton credits the tenacity with which everyone at Mercy shared the stories of how they were getting through it all for the strong response from other hospitals and businesses from other industries.
"It was a great testament to how once we had rallied around the work force and the community, that everybody rallied around us to really help us through it," Britton says.
Britton admits that he wasn't approaching decisions in the immediate aftermath of the tornado from a purely business perspective. Missouri Gov. Jay Nixon noticed just that when he met with Britton the Wednesday after the tornado hit.
"His worry was that the board of directors would somehow be upset with those decisions," Britton says. "I said, 'Governor, I'm fine.' He said, 'Well, what does the board think of all this?' I said, 'I haven't talked to them. They don't know these decisions. We haven't taken the time to convene them or have that conversation. But here's what I do know.'"
Britton proceeded to talk about his confidence that the board would back his decision to support the Mercy employees and help Joplin recover, even if there was substantial financial risk involved.
"If I went in there and said, 'Board, let's take the insurance money and run,' they'd fire me on the spot and they should," Britton says. "I absolutely felt confident I'd have their support around it. And, of course, I did when the time came."
The people of Joplin and of Mercy have begun to recover. What remained of St. John's Mercy was demolished in January and ground was broken on the new hospital earlier this year.
As Britton looks back, he says overcoming seemingly impossible situations requires a leader who can step down from his pedestal and truly feel what his people are going through.
"You need to think about the situation you're going into and how people are reacting," Britton says. "Think about how people are reacting to their trauma and put yourself in their shoes. Think through what you can do to be compassionate and supportive and help them out of that dilemma."
How to reach: Mercy, (314) 251-6000 or www.mercy.net
The Britton File
Lynn Britton, President and CEO, Mercy
Born: San Angelo, Texas
Education: Bachelor's degree in business, Abilene Christian University; MBA, Oklahoma City University
What was your very first job?
My family owned a hardware store and I was a salesman on the sales floor when I was 9 years old. I had my own clientele. They would come when I was going to be there after school, and I was the only one they wanted to wait on them when they came into the store. It would be all about something they wanted and what assortment of things we had. and I would talk about the features of this or that product. Or they needed to solve a problem in the house and I'd help them with that.
How did you gain all this knowledge?
I always give my dad a lot of credit. He was the kind of father who taught you that you start at the bottom and you have to work your way up. So I did that and we had lots of dinner conversations about how things went at work. He was also president of the chamber of commerce and president of the school board and all those kinds of things.
He would let me go with him to meetings, and I was always fascinated how it was he would choose to give someone an assignment or why he would pick a certain position on something. So we'd talk about that on the way home after those meetings. It was a tremendous learning opportunity. It formed me as a young man.
I give him a lot of credit. We lost him about 20 years ago and I miss him greatly. There are still times where I'll do something and I'll think for a split second, 'I have to tell Dad about this.'
How Dana Roberts recruited employees to help him get C.W. Driver growing again
Dana Roberts could not place all the blame for his company's problems on the recession. As the end of 2009 drew near, C.W. Driver had a few issues of its own that it needed to work out if it was going to remain a leader in the construction industry.
"There were projects out there, but we kept missing them," says Roberts, the $500 million company's president and CEO. "We got wind of the projects when it was too late. We were way behind the power curve from the standpoint of our contacts in the industry. We just needed more people out there knocking on more doors and being more aggressive to get the information about what's coming out."
Roberts' hope had been that 2010 would serve as a springboard to better business growth in 2011. But he began to understand that even if things had worked out that way and the recession had ended in 2010, his company still needed to get more focused on what it was doing in order to achieve that growth.
"We want to be able to look at 10 projects and pick out three and say, 'OK, we're going to pinpoint this one, this one and this one,'" Roberts says. "We didn't have that information. The reason we didn't have it was our whole business development group wasn't organized in such a way to do that."
It was a reality that led him to make a risky decision.
"In a recession era, most businessmen say, 'OK, we need to start cutting overhead,'" Roberts says. "We did just the opposite. We expanded our overhead and we looked at it as an investment in the future."
Roberts wanted to get more people involved and engaged in helping the company grow. He felt the move to make significant investments, despite the recession, would demonstrate his commitment to the task.
"How do we keep our people motivated?" Roberts says. "How do we keep our people, our most important asset, well engaged? It's by trying to do new things and trying to make things happen, not waiting for the economy and our market area to come around."
Get to your best ideas
Roberts set out to use the vast and relatively untapped knowledge base of his employees and use it as a resource to identify those opportunities they were missing and make C.W. Driver a more effective and more efficient business.
"It's not only reorganizing the business development and marketing group," Roberts says. "It's also getting every employee engaged in being aware of what's going on out there in the neighborhoods they live in and the communities they live in so the entire company is involved in the business development effort."
Roberts got a good response as people had numerous ideas about how C.W. Driver could expand into new markets and broaden the company's reach. The challenge in this case wasn't getting people to open up.
It was taking all those suggestions and narrowing them down to the few really strong ideas that really have a good chance of success.
"We may have 50 or 60 different things that we start with, but we narrow it down to a few initiatives and we develop a plan that everybody gets behind," Roberts says. "If they can't get past that, they're going to dilute their efforts. You've got to narrow it down. You just can't physically do everything. We've been through that and we've tried to do too much. We find that in our business planning sessions, it's got to come down to two or three things, maybe four things at the most, that you are trying to accomplish. It's really spending the time to build the consensus."
Roberts opens the process to whittle the list of ideas to a select few by admitting he probably be won't be the one providing the best suggestions.
"I tell everybody, 'Look, I come up with some of the stupidest ideas in the company,'" Roberts says. "People tell me, 'That is a bad idea, Dana.' I'm the president and CEO. I want that kind of environment in the company. I want people to speak their mind. I don't want them to tiptoe on eggshells around everybody. We're open and honest, and we do it with respect and integrity."
It's important that you set expectations before you go into a brainstorming session. Give your people an understanding of how things are going to work instead of jumping right into idea generation.
"We have a whole set of ground rules within our senior management group on how we conduct our meetings," Roberts says. "Everybody knows you have to get down to two or three good ideas. Otherwise, you're sunk. You're going to take a shotgun approach and you're not going to accomplish anything. It takes a day or two, but you get there."
If there are people who are unwilling to let go of the old way of doing things and help with what you're trying to build, you may have to let them go.
"The one person or two people that didn't agree with it or didn't get a fire under their butt to get behind this whole program and to understand the urgency of it are no longer here," Roberts says. "I don't like to say I fired them, but it no longer became a fit. We had a change that we were going to make that we needed to make and they weren't of the mind to be part of it.
"We want people that are out in front charging hard all the time as opposed to dragging other ones along. It's very important that we build consensus and that everybody is in agreement and doing their part to make the change work and operate in the new environment."
Seek outside help
Roberts isn't afraid to seek outside help when key decisions need to be made at C.W. Driver and this particular instance was no different. He doesn't view it as a lack of confidence in his own abilities to lead the company and adds that his team doesn't see it that way either.
"Not once has anybody criticized anybody bringing in an outside consultant," Roberts says. "Smart people won't do that. We don't let the consultant run the business. We make our own decisions, but we get input from him and other things and then we make our own decisions."
The third-party input that comes from an outside facilitator can be invaluable when you're trying to move from the information gathering stage to the implementation and execution phase of a transition.
"You can find consultants to do anything out there," Roberts says. "You just have to look in the right circles. You have to understand too that you don't know everything. I may be president of the company, but there's a lot I don't know. So I look for a lot of input."
Roberts stresses that the involvement of outside consultants is a demonstration of strength by a leader, a willingness to do what it takes to get the job done.
"If companies try to do it themselves, they're not going to end up where they want to be," Roberts says. "They need somebody in there to facilitate them and guide them. It wasn't like, 'Oh, we can't agree on anything. Let's get a consultant in here.'
"It's like trying to fix your own car. I'm just going to get all the manuals and read the manuals and I'm going to fix it. But you get somebody who does that every single day and you realize you really need that outside type of knowledge. If you've got a big ego, you're going to have to get over it."
There are, of course, good practices to follow when it comes to using consultants. Perhaps most importantly, especially when you're trying to encourage engagement and teamwork, is to make sure everybody likes the consultant you're bringing in to help.
"Don't you select him and then he comes in and everybody hates him," Roberts says. "That's the first consensus you want to build. Hey, we all like this guy. The key is finding somebody that everybody relates to and everybody likes and has really good credentials coming in the door. See who he has worked for and where he has been. Talk to his references and talk to his other clients. Find out the plusses and minuses for him."
Consultants don't come cheap, but Roberts says when you find the right one, it will be well worth it.
"It's a big expense," Roberts says. "But it's worth every dime."
Take action
There were a couple big changes that C.W. Driver made to better respond to market demands. One was to form a special projects group that would handle smaller projects.
"We had clients that we had done big projects for, but now they only had small projects to do," Roberts says. "And we had clients we were trying to establish a relationship with, new clients, but their projects were too small for us to compete on."
This new segment would be able to take on those projects and free up the bigger company to handle projects it was more suited to take on.
"The people that work in this group get paid a little less so they can compete on smaller projects," Roberts says. "So instead of waiting until the market turns, we decided to take more aggressive action and say, 'OK, how can we compete in a market and maintain these relationships and gain new relationships for big Driver? So we opened small Driver.
"The other one is the for-rent housing market. We decided that in order to compete in that market, we have to have a separate company that focuses on for-rent housing, student housing, senior living and possibly extended stay hotels."
The smaller companies are part of the C.W. Driver brand but can operate in a way that better fits them.
"They can operate just like a small company, but we can give them all the support of a big company without the bureaucracy," Roberts says. "So far it's worked out, and we've built a backlog of about $20 million over the last seven months."
When you embark on a remaking of your company, you've got to move smartly, but quickly. Your employees demand it of you, even if they don't always openly tell you that.
"They want to see that the company is moving forward and doing something to maintain its growth and maintain its level of business activity," Roberts says. "They don't want to lose their jobs. They want to know if they are going to have a job next year. That's the most important thing in everyone's mind right now. Are we going to have a big layoff? Are we going to lose our benefits? Is our pay going to be cut? What is the company doing to sustain itself or increase its business? They are looking to senior management to come up with those answers."
They are looking for answers and then they are looking for follow through and execution on what you've talked about.
Roberts was committed to preserving jobs and finding ways to remake C.W. Driver without having to do layoffs. It's often viewed as the harder way to go, but that may not actually be true.
"You can't just do these wholesale layoffs because if things turn around, then you have to hire people back and that is an incredible cost," Roberts says. "Find new people, hire them, train them and get them involved."
You'll probably find that your people are more receptive to change than you think if it means their position with your company is secure.
"There's very few people saying, 'I don't like working on this project. I want to work on this project,'" Roberts says. "I think everybody is really happy to have a good job, have good benefits, not have their wages cut and have a company that really has a lot of empathy for its employees."
How to reach: C.W. Driver, (626) 351-8800 or www.cwdriver.com
Dana Roberts, President and CEO, C.W. Driver
The Roberts File
Born: Los Angeles
Education: Bachelor's degree in economics, Utah State University; master's degree in civil engineering, University of Southern California.
What was your very first job?
I had a paper route when I was 9 years old. It was called the Valley News and Green Sheet, which is now the Los Angeles Daily News. I had 120 papers I delivered and people would pay for it on a voluntary basis.
It was 65 cents a month and I would have to go and knock on doors and say, 'I'm collecting for the Green Sheet.' They'd say, 'I don't want it; that's a rag.' Or they'd say, 'Oh, we love that paper,' and they would give me 65 cents. One lady, she gave me a dollar. And I would go to give her the change and she'd say, 'Keep the change.' I got a 35-cent tip. She never failed to give me that 35-cent tip.
Who had the most influence on you?
There were two things my father said to me. He said, 'Son, I can't afford to send you to college. But I can give you a job.' So that's how I got through school. Then he said to me when I became an owner of the company, he said, 'I've reached the pinnacle of my career. I've got my kid signing my paycheck.'
He was a great influence on me. The respect he had for people. Not only the people who worked for him but the people he worked with and worked for.
How Perfection Spring took a patient approach to help get its marketing mojo back
David and Joshua Kahn placed a lot of faith in the strength of the automotive industry, but now it was coming back to bite them. As the recession of 2008 took hold and brought automakers, among other businesses, to their knees, sales volume at Perfection Spring & Stamping Corp. took a big hit.
"Our greatest challenge was twofold," says David Kahn, president and co-owner of the precision metal formed component supplier. "One was to grow sales and two, to further diversify the sales base so that if another downturn did come down the road, we wouldn't be impacted as greatly by the automotive industry."
The Kahns concluded that their stale marketing strategy was a big part of the problem at the company, which has more than 100 employees.
"The only people that knew us were the people that knew us," says Joshua Kahn, co-owner and executive vice president of sales. "In order to increase market share in our current markets and also obtain new markets, we needed to refocus our marketing and sales strategy."
Joshua felt the company wasn't doing all it could to support its existing customers, nor was it doing enough to obtain new customers and expand the business. The company's failings at marketing were most evident on its website.
"At the time it was built in 1993, it was really about photos and fluff rather than being a user-friendly site with information that customers would go back to time and time again," Kahn says.
He decided to get out and attend industry association meetings to learn more about what other companies were doing with their sales and marketing strategies. But before he actually went to those meetings, he met with his management team and ironed out exactly what Perfection Spring was looking to achieve.
"I made a list of all the different marketing strategies that we could come up with as a management team and then went to these meetings with eyes wide open to learn," Kahn says. "If I were to offer one piece of advice, it would be to understand what you want to do, then go ahead and do your own research. Many things introduced in the meetings, after I came back and did research, I found were not necessarily for us.
"It was a great platform to really review our entire marketing strategy. But you still have to be wise and figure out what's best for you, for your business and for your customers."
Kahn says it's easy to go to a conference or hear from an expert and simply buy in to everything that this one person is trying to sell you. But it may not be a good fit for you.
"We started doing trade shows as a result of the conferences," Kahn says. "We redid our website. We changed our sales organization internally. We did quite a number of things. But we didn't jump into anything."
In fact, after attending conferences in the summer of 2009, Kahn and his team took several months to digest what they had heard and plot a new strategy for the business.
"We wanted to make sure we did it right," Kahn says. "Not fast but correctly."
One thing that has become very obvious to David is the need to get in front of customers on a regular basis.
"We supply parts, but we don't supply standard parts," Kahn says. "Everything we supply is custom. So we are in essence a service provider. The greatest service we can provide our customers is engineered solutions to their problems, not only from a design standpoint but, more importantly, from a cost reduction standpoint."
The deeper connections that are being formed between Perfection Spring and its customers are showing results. The Kahns give a lot to credit to Thomas Industrial Network for helping them to develop an effective web strategy.
"The actual design of the website has certainly played a big role in obtaining prequalified leads and new key customers," Joshua Kahn says. "It has let us expand into markets that we were never in before."
How to reach: Perfection Spring & Stamping Corp., (847) 437-3900 or www.pss-corp.com
Eliminate waste
One of the most important changes made at Perfection Spring & Stamping Corp. is the effort to create a website that would enable the company to prequalify sales leads.
"Just as we are prequalifying prospects, they are prequalifying suppliers," says Joshua Kahn, executive vice president at the precision metal formed component supplier that has more than 100 employees.
"When they put in their search terms, they are finding us and we are finding them. By the time we get a quote request, there is a good match. We go through a detailed qualification process after we get a quote request to make sure our company is on the same track with their company."
When it comes to websites, you've got to know what you want since there are so many directions you can go.
"The first thing we did as a management team, we listed everything we wanted and we literally wrote it down," Kahn says. "We brainstormed. Then when we met with the various vendors that could provide us with those services; we were sure to ask them all the same questions. Then when we met again and reviewed the answers from all the companies, very clearly as our management team saw, there were certain companies that would meet what we expected and others that would not. A website is a living, breathing thing. Even though we went live, we are constantly changing it."
How keeping it simple helps Lettuce Entertain You Enterprises continue to delight customers
Kevin Brown looked at Grand Café and he didn't like what he saw. The French bistro in Chicago's Lincoln Park neighborhood was still a nice place to eat, but it had lost that special something that once made it a destination place.
"We had let some chefs play with the menu a little bit and it had lost its soul about what it was," says Brown, president and CEO at Lettuce Entertain You Enterprises Inc.
Lettuce Entertain You operates more than 80 restaurants across the country and with the responsibilities that come along with each of those locations; it would have been easy for Brown to look for someone else to tackle the problem of Grand Café.
He certainly didn't have enough time to take on the task himself, right?
Whether he did or not, Brown made the time to do a thorough review of every aspect of the restaurant's operation. Company founder and Chairman Rich Melman and several talented chefs in the company joined him in the effort.
"We went back and I think we were closed for about three weeks," Brown says. "We redid the floor plan, redid the look of the menu and we changed the name to Mon Ami Gabi, which was 'my friend Gabino.' We just went back to basics and made it a great French bistro again. We worked on the onion soup and the salad frisée and the steak frites. We just went back and said, 'This is what this business is meant to be.' We reignited its soul."
More than a dozen years later, Mon Ami Gabi remains one of the company's most popular eateries with five locations, including a particularly successful restaurant in Las Vegas.
Brown credits the attention to detail that has been embedded in the culture at Lettuce Entertain You for allowing the transformation from Grand Café to Mon Ami Gabi to take place.
"Leaders, a big part of their job is to solve problems," Brown says. "That's what we do. We inspire people. We take chances and try to solve problems. We take risks. Risk creates opportunity. Whether you're fixing something that is not working or creating something new, you have to attend to the details. The details are what build the engine to make it fly."
It's not always easy to stay in touch with those details as your company grows. Lettuce Entertain You has come a long way since June 10, 1971, when Melman and Jerry Orzoff opened their first restaurant in the same Lincoln Park Neighborhood.
But Brown says finding a way to maintain the spirit that the company had when it had only one restaurant is crucial to the effort to stay on top.
"Culture is the glue of an organization," Brown says. "It fills the gaps where nothing else can fill. It's the passion and the culture and the drive to do what we think is right and the drive to do things because that's the way we believe they should be done. That's our primary motive."
Here are some of the ways Brown works with his team to help Lettuce Entertain You and its collection of restaurants remain a favorite for customers.
Stay true to your culture
Brown quickly one-ups anyone who shares with him that their job is just never the same from one day to the next.
"My job isn't the same every hour," Brown says with a chuckle. "It's a wonderfully stimulating business. You get to taste a lot of really great food. You get to work with design and you get to work with music. But at the same time, you have to think about how do we run a $400 million company with 91 restaurants?"
The first step for Brown is to not look at this task as if he were being asked to build a new company from scratch. Lettuce Entertain You has been around for 40 years and history shows it has done a lot of things right.
"We have a very entrepreneurial organization with a dynamic founder," Brown says. "The challenge of my leadership is to help bring the second generation along so we can keep it going. How do I maintain it and keep it going as we continue to drive new ideas? At the same time, how do I structure and help organize and create accountability in the organization to ensure that along the road, we're healthy?"
One of the keys to his company's success is the belief that culture is more than just a sign that is posted on the wall or a card that employees are asked to carry in their pockets.
Culture is made through every action you take and every word you speak.
"Your philosophies from the way you want to treat people, the way you want to manage people and the way you view your business, culture is built every single day," Brown says. "It's the way you react on the spot to your employees and to your guests and to your vendors and the decisions we make on how we want our restaurants to be run. It's a day-in and day-out process.
"So when you're pushed on something and you've having to make a decision or something, that decision, if you look at the decision you're making and it's a long-term decision or it's a tough decision, that says something about your culture. I believe it's those decisions that reinforce the culture. It's those conversations and those choices. I would hope we continue to make choices in our organization that reinforce our culture."
Brown prefers not to think of his job as leading 5,500 people a philosophy, which makes it easier to maintain the company's open culture and easier to tackle fixes like the transformation of Grand Café.
"We don't focus on the entire company at once," Brown says. "We focus on one store at a time, one problem at a time and we try to fix things. Now there are multiples of us trying to fix and improve one area at one time, obviously, at our size. That's how we operate. We don't think big. We think small. We believe when you think small you can get things done. When you think big, it can be overwhelming. We don't view ourselves as big."
Brown and Melman didn't approach the situation at Grand Café with panic or a sense that the fate of the company was hanging on what they did next. The calm approach gave them the freedom to do what needed to be done.
But even if you are facing a significant problem, you still can't afford to panic.
"You have certain things that come across your desk that you have to deal with," Brown says. "Most of the things, if you're trying to fix something, it's unlikely they got where they are quickly. And it's very unlikely they are going to be fixed quickly. So the recovery is going to be somewhat similar to the reaction to what actually happened.
"You have to be intense, you have to be persistent and you have to keep working at it. But at the same time, just know that some issues you go to tackle are going to require smaller steps to solve. You want to try to solve things so that they are solved, not just a Band-Aid."
Respect your employees
No matter how great you think your company and its culture are, you need to make sure employees have a clear outlet to express concerns.
"This is not an easy business," Brown says. "There are guests who are rude, and management's job is to support employees. Back them up if there is a rude guest. Let them know that is not acceptable. Any service business unfortunately can be the brunt of other's emotions that really sometimes have nothing to do with where they are at the time. Sometimes we're the brunt of something that happened to them three hours earlier or something that is going on their life. That's just the nature of being in the service business. You want to be supportive of your staff."
Hopefully, there aren't a lot of situations where you have conflict between your employees and your customers. In more typical interactions, the way you treat your employees is often most evident through your actions rather than your words.
"They know when it's real," Brown says. "You can't say it, you have to reinforce it. It's decisions that you make every day. It's how you treat people. You can't say you care, but then don't back it up. You've got to put substance behind it and make people believe that we want this to be a great place for people to work."
If you're a company that touts itself as providing world-class customer service, you may want to look in the mirror and ask yourself how well you treat your employees. Is there a difference between the two?
"If you expect your guests to be well taken care of, you had better take great care of your people, because they take care of your guests," Brown says. "We like to work with a high level of recognition for our employees and high respect. What we ask of them and everybody that works for us is we want them to care. We want them to care about their guests, their food and care about each other. We want them to care about the job they are doing."
Develop your emotional side
If you're a leader who has read every piece of advice offered on how to succeed in your industry, Brown gives you kudos. Just don't think that you've reached the finish line and now know all there is to know about effective leadership.
"Sometimes leaders try to read a lot about getting more technical savvy in their business, which don't get me wrong, is important," Brown says. "But as leaders, you always have to be developing your emotional side. You have to be developing your ability to lead, your ability to motivate and your ability to read a situation. That's our job. Our job is to continue to develop ourselves. If you continue to develop yourself in all aspects of leadership, it can be quite fulfilling."
It's easy to get hung up on perfecting this process or working on your sales pitch or making the next version of your widget better than the last. But it can't be all about the nuts and bolts of your business.
"We have a lot of employees," Brown says. "We as an organization have to fill their financial needs and their job security needs, but there is a certain amount of emotional needs we have to fill with them also. We have to give them a good workplace. The hierarchy of needs, that's all real. But it's not a formula; it's a practice.
"You have to constantly be committed to developing yourself in all aspects of leadership. A developing leader and a growing leader generally speaking will have a developing and growing organization. If I stop growing and I stop developing, it's kind of hard for people around me. Why should I keep going? Why should I keep pushing?"
Brown says the blueprint for effective leadership is really not that tough to understand. The execution isn't always easy, but the steps are pretty straightforward.
"You give them as many tools at the management level as needed when they go on the floor to know how we feel service should be and how the guests should be treated," Brown says. "Once they continue to progress, then it's just reinforced on the day-to-day decision-making and leadership they see from the rest of the organization. As long as we say it, the proverbial 'walk the talk,' as long as we tell people what we're doing and then we back it up, then it's believable. If we say what we're doing, but we don't back it up, it's not particularly believable. I won't say we're perfect, but we really strive to do the right thing."
How to reach: Lettuce Entertain You Enterprises Inc., (773) 878-7340 or www.leye.com
The Brown File
Kevin Brown, President and CEO, Lettuce Entertain You Enterprises Inc.
Born: Pittsburgh
Education: Bachelor's degree, hospitality management, Michigan State University
What was your very first job?
My father had a very small boat dock on the Ohio River. It docked about 30 boats and it had a snack bar. My brother would be out pumping gas and would be on the boats and loved to water ski. That didn't interest me. I was real interested in what was going on in the snack bar. My father was also the manager of a lot of townhouses that had a pool and a snack bar. I ran that also. There was something in the back of my brain that I like serving food and I like taking care of people.
Who has been the biggest influence on you?
Founder and Chairman Rich Melman and second would be Steve Phillips. The Phillips family owns Phillips Crab House in Ocean City, Md. It's a large family, and they have a big crab-packing company and 15 or 20 restaurants. I had an opportunity to work there in Ocean City. I wanted to work at the beach, and it sounded like a fun job.
Well, I went into a 1,400-seat restaurant and said, 'This is the coolest thing I've ever done,' and six weeks later, I transferred to Michigan State University for the fall. Steve Phillips was driven and intense and cared about quality and took care of his people. Fortunately, I went from Steve Phillips to Rich Melman and he exemplified the exact same thing and both of them have helped mold me into who I am.
What would your last meal be?
Traditional spaghetti and meatballs
How Rakesh Sachdev stepped up when Sigma-Aldrich needed his leadership the most
Rakesh Sachdev did not see this day coming. Sure, he and Jai Nagarkatti had talked about leadership transition and succession planning at Sigma-Aldrich Corp., but that was years down the road.
Sachdev insists the thought of being CEO of the 7,890-employee life science and technology company had not crossed his mind for even a moment.
"Obviously, this came as a surprise to all of us," Sachdev says.
The "this" Sachdev is referring to is the unexpected death in November 2010 of Nagarkatti. He had been with Sigma-Aldrich since 1976 and had served as CEO since 2006 and chairman since 2009.
"It was hard for me to know we had lost somebody like Jai the way we lost him," Sachdev says.
It was perhaps even more difficult at that moment because everything seemed to be going so well with the company.
"We had been implementing a lot of initiatives, so we pretty much had a game plan of what we wanted to do for our customers, with our products and with our facilities," Sachdev says. "We had also been embarking on more acquisitions as part of the company's plan to grow inorganically. That was all going on."
And now this. Sachdev found out while on a plane preparing to fly back to St. Louis.
"It was Saturday morning and I got a call from our general counsel to inform me of what had happened," Sachdev says. "It was a very brief conversation because I had to shut my phone off. There were a lot of things racing through my mind as I flew back to St. Louis. By the time I landed, I wanted to call the board and discuss it with the board, which I did. To the board's credit, they had already met and they had made some decisions. I spoke with the board late into the night and we had a plan. That's what happened."
The plan was in place and the very next day, a news release was sent out reporting that Sachdev had been elected as the $2.3 billion company's new president and CEO. A conference call was scheduled for that Monday to address the situation publicly.
The next step would rest with Sachdev. How would he address any concerns that employees might have about what had happened? How would he respond to customers or other stakeholders in Sigma-Aldrich who might be concerned? Suddenly, this was all his responsibility.
Show your strength
Sachdev may have had a few moments of anxiety about his sudden ascendance to the top at Sigma-Aldrich, but he didn't let anyone know that.
"For the most part, I felt pretty confident," Sachdev says. "I felt confident because I knew that we had a company that had great people. It's not just about the leader, although that's important. We've had an outstanding team here. So I never had any doubts that the future or what we were going to do with this company would be any different. I think we were on pretty solid footing."
Dealing with the unexpected, including tragedy, is something that you've got to be prepared for. There's too much at stake for you to think, "Oh, that would never happen to us."
"Just being prepared is the mark of a great leader," Sachdev says. "I look at my own career and I say this to a lot of the young people here. You have to step out of your comfort zone if you want to do big things and great things. I've always done that. I've changed industries. I've lived in different geographies. To me, that's very fascinating to put yourself in an uncomfortable situation and try to wrap your arms around it as quickly as possible. I think that's helped me personally."
By putting himself in situations where he didn't initially know exactly what to do in every situation, Sachdev says he learned to adapt.
"When you do have an incident like the one we had with Jai's passing, having stepped into difficult situations, I guess I was quite prepared," Sachdev says. "I would say, be prepared and be organized in terms of working the things that are going to be really important. You can really get defocused. Being focused at a time like this is very important, as you were pointing out. Who are you going to talk to? Why are you going to talk to them? How are you going to communicate? Have the communication story. What is said and how it's said is very important to a lot of these people."
In the aftermath of Nagarkatti's death, Sachdev knew he needed to talk to people. Initially, it was to serve as a sounding board for their grief. But it was also to give them reassurance about the company's future.
"There's a professional side and a personal side anytime something like this happens," Sachdev says. "They want to be reassured that a transition like this is not going to have any adverse impact on them or the company. Giving that reassurance is very important, not just for the employees, but most of the stakeholders. The other thing is there's a human side when this happens.
"Given that in Jai's situation, he had spent over 30 years with this company and given a lot, they want to hear how the company is thinking about a leader who has just passed away and just passed away suddenly. We had a lot of conversations with our employees about the great memories they have of Jai as a leader. You have to address both the human side and the professional side. That's what employees want to hear."
As you're talking to your employees, you also need to think about the people outside your company who want to be contacted and informed about what's happening in the wake of this difficult situation.
"All our stakeholders are important, but there are some very important stakeholders we have and you want to make sure the message got out to them immediately with me calling them," Sachdev says. "Typically these calls are pretty short, so we were able to arrange these calls. This is not a very long conversation. We prioritize who we were going to call. We had an agenda for hour by hour what conversations were going to take place with the employees and where and with customers and with whom and even with suppliers and community leaders."
You should use your gut and go with it to help determine who gets a personal phone call and who can be informed through other means. The key thing is not to try to rush through it to get back to your normal day-to-day routine.
"Unless there is a crisis in a company, which was absolutely not the case at Sigma-Aldrich, my advice to any leader would be take the time," Sachdev says. "You're stepping into a new role and even though you think you know the company, it is a new role. Now you're responsible for the business and all the employees and their future. Err on the side of listening."
As time marched on, Sachdev says he found the planning that Sigma-Aldrich had done to be ready for change was paying off in a big way.
"This incident happened in mid-November of last year and I think we had a period of I would say a couple weeks where we went through a lot of communication," Sachdev says. "But I would say after a couple weeks, we were back in the saddle and running hard."
Be prepared
Indeed, planning did pay off for Sigma-Aldrich. Sachdev says it's something every company should do no matter how the leadership team views its situation.
"Succession planning isn't only about succeeding in events like what happened with Jai," Sachdev says. "It's about succeeding in the event someone were to leave the company or where we actively develop people by moving them into other positions so you have somebody to succeed behind them."
You're trying to build cohesion and camaraderie during the quiet times so that when the unexpected happens, you already have a foundation on which you can work and get things done.
"As the CEO, I had a very supportive board," Sachdev says. "I was able to pull the whole senior management team together. We were all very aligned, so it worked. If you have your support system that isn't well-aligned, that just adds more complexity. That's why it's important for senior management and boards to be thinking about being prepared and having alignment so when an incident like this happens, you don't find yourself in a situation where there is misalignment.
That would be a very difficult situation. You have a situation happen in a company where there wasn't alignment in the first place, something like this just opens up a huge crack. I would be more concerned about that. That would be fairly destabilizing in an event like this. Because we had done such good work in the alignment around the strategy and what we were going to work on, that was not the issue."
Another thing to keep in mind, however, is that it's not just your chair that you need to be concerned about.
"That's true for many critical positions in the company," Sachdev says. "We go through this process at Sigma-Aldrich and we embrace it. Every year we go through a very detailed succession planning process that oversees the top several hundred people. We try very hard to identify if someone were to leave or if something were to happen, we have a plan to put someone behind that in fairly short order."
Keep moving forward
Of course, there does come a time when the business of the company must take priority once again. It's then when you need to talk to your people about what makes your company great and get them energized about work.
"It's creating excitement with our customers and when people come here to work every morning, they're absolutely enthusiastic that they are working for the right company and they are making a difference," Sachdev says. "Sigma-Aldrich has always been a company where employees come and feel they are working for an enterprise that is making a big difference for mankind. We are a science-based company and we do lots of interesting things. So as CEO, it's my job to make sure that enthusiasm not only stays, but becomes infectious and that we're able to get all our people fired up about what they are doing."
You won't get this kind of response if you're the type of leader who only issues commands and doesn't look deeper into what your people do each day.
"You have to make the effort," Sachdev says. "You cannot as a CEO be a desk pilot and fly the plane from your desk. You have to get out and you have to be with the people. I enjoy it, because it gives me the ability to understand what our people are really thinking about. It's very important."
Sachdev moved Sigma-Aldrich forward in part by getting everyone focused on assisting the company's customers. The fact is that while many of his employees mourned the loss of their leader, many of Sigma-Aldrich's customers had no idea who Nagarkatti was.
"They are looking for value, product, reliability and getting things that help them succeed, not that help us succeed," Sachdev says. "At the end of the day, it's all about how do we as a company help our customers succeed. If we see it that way, it's not important about individuals in our company such as the CEO or anybody else."
And in the end, no one likely understood that fact better than Nagarkatti himself.
"As I told our people, Jai himself would have wanted us to be back on the agenda," Sachdev says. "That was the kind of guy he was. We paid a lot of respect to Jai. He did great things for the company. But very quickly, we moved on to the agenda of the company and doing the things he or anyone else would have wanted us to do."
How to reach: Sigma-Aldrich Corp., (314) 771-5765 or www.sigmaaldrich.com
The Sachdev File
Rakesh Sachdev, CEO, Sigma-Aldrich Corp.
Born: Ratlam, India.
Education: Bachelor's degree in mechanical engineering, Indian Institute of Technology, New Dehli, India; master's degree in mechanical engineering, University of Illinois; MBA from Indiana University, Bloomington, Ind.
What was your very first job?
Growing up in India, you don't have the opportunities that kids have here to do part-time work. Basically as a student, you just end up studying and you don't work for money. You don't have part-time jobs. My first job was really when I was in college. I worked as an apprentice to overhaul Airbus engines at the airport in Calcutta.
Who has been the biggest influence on you?
My dad was an incredibly hard-working guy. He had very humble beginnings and he worked his way up to a fairly significant position with what he did. Hopefully I picked up a lot of the good qualities of just seeing the way he worked.
What is the best advice anyone has ever given you?
Be proactive and be focused and just get things done. We all have only so much time in a day. What I talk to the people here about is to just try to focus on what's important. Don't procrastinate. Be proactive and get it done. You'll be surprised how much you can actually do.
What one person would you like to meet and why?
I would have liked to spend time with Steve Jobs, who, of course, is no longer here. But he was somebody who was creative with guts and was very focused. And as I was saying, he got a lot of done in one lifetime. I have a lot of respect for people who can accomplish a lot and not just be a flash in the pan with one success.