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How Robert Pasin dug deep to help Radio Flyer evolve its brand and its products
It was a bitter pill for Robert Pasin to swallow.
Radio Flyer Inc. had spent decades producing millions of its iconic red steel wagons for children across the United States. The children who grew up with them had bought them for their children and those kids bought them for their kids. It was a tradition that could go on forever, or at least that's what the company had let itself believe.
But as the 1990s began, a new wagon, one made out of plastic, had begun appearing in stores and was an instant hit with consumers.
The part that was most painful to accept for those who worked at Radio Flyer was that they had not made this new plastic wagon. Even worse, as they looked at the way their company was set up, they weren't even capable of competing by making a plastic wagon of their own.
"We were a manufacturer, a steel stamper, and that's what we were really good at," Pasin says. "The way we were running the business was we were looking at what we could make in our factory and then figuring out if we could sell it."
This mindset led the company to start a line of wheelbarrows and garden carts in the 1950s to go along with its wagons, all of which were made out of steel.
"We weren't in touch with the external environment as much as we needed to be or should have been," Pasin says. "So we weren't talking to consumers. We weren't asking moms what they wanted in a new wagon. That's why we were really caught off guard.
"If we had been doing those things, we would have known that this is something that consumers wanted."
This was the challenge that faced Pasin, grandson of company founder, Antonio Pasin, less than a year after taking over the company as its CEO.
"There was justifiable fear," Pasin says. "We were scared that we weren't going to stay in business."
Accept the challenge
The fear was palpable around the offices of Radio Flyer. Complacency had played a role in where the company now found itself, but Pasin and his team had to find a way to get past that. They needed to act quickly if they were going to save this company that had become such a symbol of 20th century Americana.
"We had to come out with a plastic wagon if we were going to stay in business because this was where the market was going," Pasin says. "The challenge was that we really never had sourced a product before. Everything we had ever done, we made it ourselves. We didn't have anybody in our company who knew anything about plastic, and we didn't really have a product development team."
Pasin didn't try to sugarcoat the daunting challenge that Radio Flyer faced.
"We were just really honest, and we said, 'Here are the facts, here's what we're going to do, and we're going to keep treating people here as well as we possibly can,'" Pasin says.
It was an urgent time, no doubt about it. But Pasin didn't feel it was time to panic, and he wanted to make sure his people didn't feel it either. Plastic wagons were on everyone's mind, but Pasin was also thinking about mission, vision and values. These things would play a big part in the company's approach to making plastic wagons.
"We went through a process that included everyone in the company," Pasin says. "The best way to achieve change is to involve everyone in the change as much as possible. In our case, we were changing the culture, and we asked everyone a lot of questions over the course of a year.
"We had a companywide discussion and it started with, 'What was the company like on the first day you started?' We got vastly different answers from people who had been here for 40 years and people who had been here for months. But while the answers were different, there were these recurring themes that kept coming out."
Those themes were integrity, passion and excellence. Radio Flyer had indeed dropped the ball by not staying in touch with its customers as their needs and desires changed. But the products the company was making were as well-made and strong as they ever had been. And that was something to build upon.
"It just became very evident that we had this great bedrock of a culture to build on, and it was really powerful," Pasin says. "No matter what, there's got to be some gem in a business or hopefully more than one gem. Otherwise, you'd be out of business. There's got to be something good in there. The task of the leader is to find that gem. Figure out what's unique or different about it and then build on it."
Pasin saw how strong his team was and the talent that each person brought to the table. He just needed to figure out how to take all of those pluses and use them to build a process to make plastic wagons and then stay in touch with consumers to be more proactive and less reactive about the next big thing.
"If the leaders can go through in a very methodical and thorough way and unearth all that information, it becomes very clear what needs to be done," Pasin says. "It doesn't mean what needs to be done is easy. It's very difficult or it already would have been done."
Set clear goals
Pasin wanted goals to be much more structured and clearly stated at Radio Flyer. It would help the company make a great plastic wagon, and it would ensure that, decades later, the company would not find itself in a similar situation of being out of touch with its consumers.
"Everybody in the company has five goals," Pasin says. "Those five goals line up with the team goals and the team goals line up with the company goals. So there's tremendous line of sight and alignment throughout the company for what we're working on. 'Here's what I'm working on and here's how it's impacting the success of the business.'"
As a business, when you set goals, it's critical that they align and that they be meaningful. Otherwise, what's the point?
"They have to meet the SMART criteria," Pasin says. "S is for specific. M is for measurable. A is for achievable. R is for return on investment. T is for time-bound. We work really hard to make sure everybody's goals are smart in that way."
There were some people in the company who provided evidence that they weren't a good fit for what needed to be done going forward.
"I had a couple of guys say, 'OK, now that we're going to have these goals, how much more am I going to get paid?'" Pasin says. "I said nothing. These goals are not above and beyond. They are not extra. This is the most important stuff you're supposed to be doing in your job. Those people aren't in the company anymore."
Make tough decisions
As the company got into the details of making plastic wagons, Pasin gradually began to realize that a big change was going to have to be made: Radio Flyer was no longer going to be a manufacturer.
It happened over a period of years, but it was clear if the company was going to make plastic wagons and branch out into tricycles and scooters too, something had to go.
"There is no way a company our size can be great at all those things," Pasin says. "One of the questions we asked ourselves to help us get clarity was if we weren't doing this today, would we start doing it? And the answer was so clearly no."
Pasin wanted to build relationships with design firms and have product development teams that would have their fingers on the pulse of consumers. In order to do that the right way, manufacturing would have to be cut.
"What are we passionate about?" Pasin says. "What can we be best in the world at? What drives our economic engine? Those three questions are huge questions. We decided that what drives our economic engine is profit per product. Not profit per product line. We had a lot of products we were losing money on.
"We decided we're not going to do that anymore. We're going to be much more rigorous on making sure that here's a revolutionary idea for the business. We're going to make money on everything we sell."
Twenty years after the company faced its demise, Radio Flyer is flying high. Sales that were only $20 million in 1992 now top $100 million and the 70-employee company's debt is minimal.
Pasin credits the success to a methodical approach that has the company positioned better than it's ever been to continue growing.
"I would just sit down and list out on paper what I thought all the biggest problems in the company were and then I would do a ranking of what are the biggest problems," Pasin says in offering advice to other leaders who find themselves in a tough spot. "Usually the biggest problems relate to the biggest opportunities. Then I would go to my team and say, 'Hey guys, here's what I think are our biggest problems and how we can make them opportunities.'" ?
How to reach: Radio Flyer Inc., (800) 621-7613 or www.radioflyer.com
The Pasin File
Born: Chicago
Education: Bachelor's degree in history, University of Notre Dame, MBA, Kellogg Graduate School of Management, Northwestern University.
What was your very first job?
My first job was working on the packing line in the factory. I was 18.
Did you see yourself becoming the CEO?
I would say no. I was starting to get very interested in the business, and I saw myself working in the business, but not necessarily as CEO.
What one person would you like to have met in the world and why?
The first person that comes to mind would be my grandfather — I could have lunch with him and talk to him about what's happening in the business and ask him questions about his early experiences. I never got a chance to do that while he was alive. I think it would be fascinating at this stage of my life to be able to do that.
Pasin on building a good team: The most important thing is are the people committed to where the company is going and are they highly committed to doing a great job. If I were ever to go into a turnaround situation, that's the first thing I would do. For the ones who aren't, move them out of the company as fast as possible. It's the best thing for the company and it's the best thing for those people. If they are not committed and into their jobs, they are just dying a slow death of meaningless work. I'd much rather have them do that somewhere else or find meaningful work that will make them happy.
How two friends turned their love of transportation into a successful business enterprise
[caption id="attachment_59634" align="alignright" width="200"] Artur Wagrodzki, president, Artur Express Inc.
Artur Wagrodzki and Tomasz Tokarczyk were surprised at what they found upon arriving in the United States from their native Poland. They were just teenagers, but they still had an image of what America was like, and Brooklyn wasn't really matching up with what they had envisioned it to be.
"I thought it was going to be palm trees everywhere," Tokarczyk says. "In Brooklyn, you have concrete going all over. That was my first impression."
The childhood friends and future presidents of Artur Express Inc. grew up as neighbors and eventually went to work for a limousine company in the New York City borough. It was there that they found their love for the transportation industry.
"It was a black car service and they took bankers and people like that around the city," Wagrodzki says. "We worked in different departments, but we basically were dispatching drivers, picking up phone calls and doing customer service. In some respects, it was a little bit similar to what we do now. We just move freight instead of people."
The numbers show Artur Express Inc. does a very good job moving that freight. The transportation and logistics company was founded in 1998 and grew to $28.1 million in 2008 revenue. Revenue reached $54.9 million in 2011.
"When we started this business, we were really young," says Tokarczyk, who serves as president along with Wagrodzki of the 50-employee company. "So maybe that gave us a big advantage. We took it upon ourselves to build the business, and we just did what we felt was right. We ran with it and did everything in our power to make it work and help the company grow."
The business partners have led with a mix of instinct and collaboration. They don't worry so much about what the leadership textbooks say you're supposed to do. But they understand the importance of building a strong culture where employees are committed to doing their job to the best of their ability in order to satisfy the customer.
"A lot of the loads that we haul are for very important customers and it's very time-sensitive," Wagrodzki says. "You can give a driver the wrong ZIP code and he's going to end up in a different state. It's that crucial. So we need very accurate data and we need everybody to do their job."
Here's a look at how Wagrodzki and Tokarczyk work together to lead Artur Express and make sure their employees know exactly what needs to be done to keep the company on top of its game.
Share your responsibilities
One of the biggest changes at Artur Express in recent years has been the influx of technology into every aspect of the company's business. Whether it's tracking loads or the drivers who deliver them, technology has led to a different way of doing things in the company and throughout the entire transportation industry.
"The main key for our operation is to develop and use all the different technology that is out there to be able to perform and control the different problems that we have and give that information to the customer," Wagrodzki says.
Everybody can benefit from technology, of course, but you've got to know how it can help you. To just implement something because everybody else is doing it or because it's shiny and new is asking for trouble.
Wagrodzki says they are careful to incorporate technology that helps them and helps their customers. They have the advantage of having been with the company since the beginning.
"We've worked hands-on in the business from day one and we know the ins and outs of it," Wagrodzki says. "We know exactly what we do on paper and then we just convert all those different ideas to our computer system. It's not just bells and whistles. It's something we can really use."
That conversion process is handled by an IT department that is usually pretty tuned into what Wagrodzki and Tokarczyk are looking for. That type of connection is obviously important.
"All they need is an idea of what we want," Wagrodzki says. "It takes a while to put it together, but once it's in place, it becomes a very easy process that you can access any time, which helps gets us get the information to the people it needs to go to."
It's those connections that you have with your IT team and with your employees that make or break the integration of things such as technological tools to help you track volume and the status of deliveries.
If you're not speaking the same language, you're not going to get what you want or what your company needs.
So Wagrodzki and Tokarczyk make sure they are accessible.
"Employees know if they have an idea, they don't have to put it out to us or management in some fancy form," Tokarczyk says. "They can just shoot us a quick email and we react instantly. Every idea they send to us, we try to make it better. Some of the good things we've done, that's how they have been developed."
It's that partnership that makes the difference between a business that can grow and one that is limited by the capacity of the entrepreneur. Wagrodzki says he and his partner knew enough to hand off some of their work as they grew to allow the company to gain more customers and take on more work.
"When we started the company, we did it all from accounting to billing to dispatching," Wagrodzki says. "You name it, we did it. It's helping us now to be able to meet up with the managers, meet up with the staff and give good pointers on how we used to do it. Maybe it was on a smaller scale, but the factors are still the same.
"If you have 50 trucks or 500 trucks, you have to apply those same rules. We try to treat our employees and our independent contractors on a very personal level. That definitely helps."
Keep looking for talent
Hiring is always a challenge for any business because you just never know exactly what you're going to get, Wagrodzki says.
"You're going to take a gamble when you hire somebody," Wagrodzki says. "They try to be perfect in the interview and you follow the rules and follow your steps of having them interview with multiple people. I would say 85 percent of the people we hire turn out pretty good."
But it's that other 15 percent that can cause a problem. It's why Artur Express is always in recruiting mode to some degree. With the growth that the company has been experiencing, Tokarczyk says they can afford to bring in talent that has untapped potential.
"We try to find people who can grow with us and are motivated," Tokarczyk says. "They do have management potential, but maybe that potential needs to be discovered a year or two years from now."
If you're looking for more experience in your new hires, it pays to keep tabs on others in your industry. In these difficult economic times, there are often companies that don't make it or have to let people go whom they otherwise would prefer to keep.
"Sometimes we're able to get those good people from different companies that were bought out or are no longer in business, "Tokarczyk says. "These people have been there for 15 or 20 years and they're looking for another strong company where they can set their roots for a while. That's how we were able to get a lot of the good people that we have."
Whatever way you go, when you do bring someone in, give strong consideration to having more than one person interview the candidate if you don't already do that. It will give you a variety of perspective that can help guide your decision.
"We try to have them interview with at least three or four different people," Tokarczyk says. "This way, we have an idea where they would best fit in the company."
One thing that Tokarczyk always asks candidates when he interviews them is why they like transportation.
"You can get all kinds of answers," Tokarczyk says. "Sometimes, you get an answer like, 'Hey, my father used to drive and he took me on a trip.' Some of the customer service girls that we hire, those were the answers we got. So there's always an aspect of transportation in our employees' lives, one way or the other. That's always good to hear. You have to be in it to love it."
Manage your relationships
Artur Express relies on about 400 independent contractors to deliver freight for clients rather than its own employees.
"They are our partners in this business," Wagrodzki says. "It's a 50/50 responsibility. If they don't make the delivery or if they don't deliver on time, we're not going to be able to use them again with this customer. They know it's a one-time shot."
One of the things Wagrodzki looks at to determine whether the company is doing well or trending in the wrong direction is the fleet of independent contractors.
"There are always guys who come and leave," he says. "That's normal. But once you see that nobody has left for a month or two, you can feel good that the company is doing well. We are providing the service that our customers need.
"You might have other times where something is not working and all of those independent contractors are leaving. Now there is something you need to react to."
In an attempt to be proactive about relations with the contractors, Artur Express has created a team of people who check in regularly to address questions and concerns before they become a big problem.
"They are constantly on the phone with those contractors asking questions," Wagrodzki says. "What are we doing wrong? What can we do better for you? That's a key in this business. We match up contractors and customers, and we manage the process of them picking up the load on time and delivering it on time. Once we have those two parties happy, we're happy."
The recession has provided a bit of a challenge in this area as Artur Express has worked hard to help both parties understand what the other is dealing with.
"In some cases, customers don't want to pay too much and drivers want a lot," Wagrodzki says. "You have to talk to drivers. 'Hey, this is the industry right now, this is the market.' And if the market goes up, you have to go to customers and say, 'We bid this business for the last two years, but we need an increase now.' Most of the time they do understand because we move a lot of freight and we know from one customer to another there's not that big of a difference."
The key is approaching all relationships with a good attitude and not being afraid of a little conflict that is always going to come up from time to time.
"We never look for a perfect project or for a bulletproof opportunity," Tokarczyk says. "We're always looking to take some type of risk. But we've learned over the years that you can sit on the sidelines and play it safe or you can play the game. If you play it right, you usually end up on the good side." <<
How to reach: Artur Express Inc., (800) 487-4339 or
The Tokarczyk and Wagrodzki Files
Tomasz Tokarczyk, president, Artur Express Inc.
Born: Kamienna Góra, Poland
Artur Wagrodzki, president, Artur Express Inc.
Born: Zielona Góra, Poland
Wagrodzki on managing through the recession: If we had to give customers little breaks on the business, we did it. We were able to convince our drivers that we will have the business, and it will be steady. We were lucky enough to make sure our business was diversified. We were working with retail, home goods and a lot of food companies.
Wagrodzki on word-of-mouth recruiting: We were able to hire more independent contractors because the contractors that we had, they talk a lot out on the road. Word-of-mouth is a big deal for transportation. The drivers drive and they talk and if you have good customers and you pay the drivers on time, they can't ask for more. They just want to join your team and haul your freight.
Wagrodzki on bonuses: We have all different bonus programs set up for our employees and they are revenue-driven bonuses. Retention is a big factor in our business, so we have customized bonus programs for dispatchers and for load planners and all different types of tiers in our operation. Our employees feel that they own a piece of this company. If the company succeeds, we're going to succeed as well.
Let your people help you run your business.
Don't ever stop looking for talent.
Make managing relationships a constant priority.
How Richard Chambers got comfortable with his new job at Molina Healthcare
Richard Chambers spent 36 years working for organizations that were always operating under the watchful eye of the taxpayers. Anyone who knows anything about how things work in the government sector understands that a great deal of patience is usually required.
When he moved into his new role as president of Molina Healthcare of California in August, much of that went away. Instead of reporting to taxpayers, he was now reporting to shareholders.
"The challenge was being able to adapt to everything I had learned in the previous positions and adapt it to help Molina and to learn the private sector," Chambers says. "What does it mean to be in a publicly traded company and meet those expectations?"
It's not easy when you step into a new organization as the CEO. You face all the same challenges that any new employee has to deal with, such as where is the copier, who do I talk to about getting some business cards and where does everyone eat lunch?
But in addition to all of that, you're the CEO. You may be new, but you've got employees looking to you as their boss and expecting you to act accordingly.
Chambers says it's best if you don't give it too much thought and just try to be yourself.
"People are very forgiving," Chambers says. "They don't have to think you're the smartest guy or the coolest guy on the block. They just want to know you're attempting to do your job and that you do want to listen to what they have to say as employees."
So that's what Chambers has done. Molina is part of Molina Healthcare Inc., which generated $4.77 billion in revenue in fiscal year 2011. Chambers has spent his first months on the job getting familiar with his employees and what they do and working to identify areas that with improvement could make his 259-employee division even better.
"When you first come in, you have to understand the culture of the organization," Chambers says. "You have to get to know the staff that works for you and your leaders to gauge their knowledge and abilities and understand how the company operates."
One thing he won't do as he gets more comfortable with his new position is make assumptions.
"People step in and they assume that because they have so much experience doing the same kind of work, they assume that they know it all and they want to impose what may have worked in previous positions on the new organization very quickly," Chambers says.
Here's a look at why that approach doesn't work and how Chambers has gone about gaining the respect of his new team.
Be a good listener
Before you try to put your foot down and make a big impression on your company, you need to know whether that impression actually needs to be made.
"Sometimes there are situations where change needs to happen pretty quickly because it's a broken organization," Chambers says. "But oftentimes as you step into the organization, you're coming in as a new leader for the future, but the organization is not broken."
The latter situation is one when you need to keep your thoughts to a minimum, ask a lot of questions and listen to the responses. To do otherwise causes a lot of stress.
"It usually creates a lot of havoc and uneasiness about the transition," Chambers says. "As a leader, you have folks who work for you and they become distrustful of what your agenda is. What's the security of their positions?"
You need to take advantage of the attentiveness that you have in those early days as a leader. They say that when a new president takes office in the White House, he or she never has a higher approval rating than during those first 100 days. You usually get a similar kind of honeymoon period, albeit on a smaller scale, as a new CEO.
"People look to you as the top leader," Chambers says. "They want to respect you, believe in you and follow you. It's important for leaders to capitalize on that. People will give you a lot of room knowing that you're learning the organization. But you have to step into that expectation and run with it."
Running with it doesn't mean making across-the-board changes that show you're in charge. It means talking to the people who have been there about what has been working what needs to be tweaked or maybe even completely changed.
"Most of the time, you're inheriting a senior staff that has been around for a while," Chambers says. "They know what's going on, what's broken and what needs to be fixed and what you as a new leader can help them do. You need to listen to them."
It's not that you're taking off your CEO hat as much as you're going in with a sense of trust and hoping that the trust is reciprocated. If you find that it's not, you can do what needs to be done.
"You're learning if you can trust that senior leadership team," Chambers says. "Pretty quickly, you can evaluate who you can trust and who you might need to watch a little more closely as to what they are informing you about. Be a good listener and a quick study. Attend meetings and understand how the organization works."
Don't limit yourself to the senior management team as you get familiar with the company. Make an effort to talk to people at all levels.
"The leaders aren't the only ones who probably know what needs attention from you as the leader," Chambers says. "It doesn't take much time before you can figure out where you need to spend your time and intervention in the short term as you figure out what you're going to do in the long term to help the strategic direction of the company."
Just do it
If you're the kind of CEO who struggles with relating to your employees on a personal level, especially when you're a new CEO, Chambers says you need to get over it.
"They'll respect you for whatever your personality is, whether they know that you're totally comfortable or not," Chambers says. "The key is that you engage in the effort to listen to what they have to say. Schedule meetings, make yourself visible, walk around. It may not be the thing that a leader is naturally comfortable doing.
"But it certainly does make a big impression and does help the staff commit to following you as a leader who they think wants to try to connect and understand what they are going through as employees of that company."
You won't be able to get to know everybody in a close way in your first month or maybe even in your first year on the job. But if you keep working at it and keep talking to people, you'll make an impression.
Molina has three regional offices outside of Los Angeles County and has made it a point to visit each office and help employees get to know him as he gets to know them.
"I got introduced, talked about myself and my background and what I hoped to achieve being the new president," Chambers says. "Then I got a chance to meet them individually in those meetings, who they were, how they ended up here and how long they had been here. So it was a good opportunity."
Even if you're not a new CEO, regular opportunities to interact with your people are a good idea to keep the lines of communication open between you and your staff.
"We'd have a lunch about every three weeks in which 10 to 12 staff would come in and we'd bring in lunch and we'd sit for 90 minutes with those staff," Chambers says. "It was an opportunity to talk very openly and candidly. I'd talk about what was going on in the organization, but it also gave the staff opportunities to ask questions in a very safe environment."
Encourage success
When you do find areas that you feel are in need of change, you want people to believe that you're considering change to make things better and to increase the odds of a successful outcome.
If you get people who think the old way is the best way and shouldn't be changed, you need to take a constructive approach.
"I like to challenge them by asking, 'Are you getting the results that you want with the way you're doing it today?'" Chambers says. "Here are some examples that I have used in other companies I've worked for and it seems to have worked. What do you think about that? How about if we try changing what we're doing now? You get them off of, 'That's the way we've always done it and that's the way we want to do it.'"
In these ongoing difficult economic times, many people view change through the prism of how it might affect their job security. Chambers is confident that his team feels secure and knows his primary goal is to ensure that his people have the resources they need to do their jobs.
But he understands why employees get nervous about their future. He says the best way to ease those fears is to encourage employees to work hard.
"What we always emphasize is there are no guarantees for anyone in any job," Chambers says. "It's important to work hard and try to develop yourself and learn new skills and have opportunities to progress in the organization. That's really on them. They have to demonstrate their worth to the company.
"If you do a good job and show up every day and do all the right stuff, it's pretty assured that you're going to be valued by the organization. That's what everybody should do as they approach every day at work. How can I help the organization and work as hard as I can?"
It's a question you need to ask yourself too. And as you're getting around and talking to people and making things happen, you can't forget to give yourself time to do your job.
"It's finding balance in your schedule," Chambers says. "If you find you're doing nothing but putting out fires every day, you're really not serving the goal of forward-thinking. I read a management book once and one of the biggest recommendations was there have to be chunks of time in your schedule every day in which you get time to think."
In other words, if you're always in a meeting or on the phone or analyzing a sales report, you could be neglecting a big-picture topic that you need to be thinking about. You have a leadership team for a reason.
"Sometimes you have to leave it up to them to be the ones who are doing the day-to-day management," Chambers says. "There's no way the president or CEO of the company can do both of those. Otherwise they are doing a disservice if they are not focusing on what their leadership role is for the organization." <<
How to reach: Molina Healthcare of California,
(888) 665-4621 or www.molinahealthcare.com
Richard Chambers, president, Molina Healthcare of California
The Chambers File
Born: Quincy, Mass.
Education: Bachelor's degree in psychology, University of Virginia.
Why did you choose psychology?
I was feeling my way through and decided psychology sounded like something I was interested in. I was going to go on to law school after my undergraduate degree, but I ended up deciding to go work for the federal government and stayed for 27 years.
My whole working career has been working on the Medicaid program and health care for low-income populations.
Who has had the biggest influence on your life and why?
I would say my father. It was integrity and honesty and the importance of working hard. One of the things I always remember is he said it doesn't matter what you do in life for a job, just make sure that when you're finished doing it, you've made it better than the way you found it. That's what I've tried to do with every organization I've been in. When I leave or change jobs, I want people to say it's a better place for me having been there and people are better for having been there.
What one person would you really like to meet?
President Obama. He's the leader of the United States and has probably the toughest job in the world. I'd love to understand what it means to sit in that position, what it means to be a leader and what lessons I could learn from him.
Listen before you act.
Don't worry so much about being cool.
Get people excited about opportunity.
How Gary Rabine uses his passion to exceed customer expectations at Rabine Group
Gary Rabine has been trying to please people ever since his father questioned whether he was smart enough to go to college.
"He's always been kind of envious of the college education or threatened by it," Rabine says of his father. "He didn't believe in it. The reason I started my business back in 1981 was the fact that I wanted to earn enough money to put myself through college."
Rabine didn't make it to college, but it wasn't due to a lack of intelligence. He had that along with the drive and determination to succeed. Instead of going to school, he ultimately decided to focus on building his business paving driveways, along with the landscaping he did for his father and the patio work he did for a concrete guy he knew.
"I did whatever I could to make a buck," Rabine says.
As time went on, Rabine's business kept growing. There were moments when things didn't go so well too, but Rabine persevered and his company, Rabine Group, began to earn a solid reputation for its paving skills.
"As you make mistakes and experience failure, it's not a bad thing as long as you learn from those mistakes," Rabine says. "Early on, I held grudges with my dad. But it's a waste of time and energy to be teed off for more than a few minutes. It's a waste to have envy.
"I had friends of mine that always envied the rich guy. Those friends of mine still envy the rich guy and they are not as good of friends with me anymore."
Rabine didn't worry about the past and he didn't dwell on what he didn't have. The positive attitude helped him take a company that he started with his own blood, sweat and tears and turn it into a $184 million business with about 350 employees.
But it was that idea of trying to please everyone that proved to be one of the biggest hurdles he had to overcome in order to achieve such a high level of success.
Focus your efforts
It was right around 2003 when Rabine took an honest look at his customer base and didn't like what he was seeing. This was one of those low points for his company, and he wanted to figure out what had caused his business to drop off.
"The rewarding customers were those who owned property that had to maintain it on an annual basis," Rabine says. "The non-rewarding customers, the ones I was losing money with, were the one-time shots. These were the general contractors who were doing a building in your market for the first time and the last time ever. Or the developers who were trying to nickel and dime you and at the end, only pay you 60 or 70 percent of the job because they didn't care about the long-term relationship."
What Rabine began to understand was that not all business was good business. Not all customers were good customers. The reward he got from all his effort wasn't worth it with customers who didn't value his strong work ethic and commitment to do the job right.
"Up until that point, I thought I had to work for everybody and anybody as long as they were breathing. I thought I had to do business with them," Rabine says. "But I began to understand how to fire bad customers and service the heck out of the best customers."
He gives a lot of credit for this revelation to Victoria Knudson, a facilities manager for a property management company he had done business with in Chicago called Trammel Crow Co.
"She was very tough to work with because she was very demanding," Rabine says. "But she was very fair. She looks at every property like it's her own and she cares about them a lot."
It's easy to look at a demanding client and see the headaches and stress that often arise in dealing with them. But look beyond that and you'll probably find a customer who really values your service and is just pushing you to provide the best product or service you can.
When you return that passion, you're likely to build a relationship that will benefit both you and your client for a long time.
"My thing was to rise to the occasion," Rabine says. "If I can please this company and this person and I can market for that person with the programs and solutions we develop to make ourselves better for that person, now we can go after the pickiest, choosiest customers there are where there is going to be less competition."
Knudson changed Rabine's outlook on achieving success. Working hard had never been a problem. But now he realized that his best plan of action was to find customers who valued his hard work and desired a great result just as much as he did.
"I had to figure out ways to differentiate my business," Rabine says. "We came up with the slogan, 'Discover the Difference.' It pushes our customers to ask the question, 'What does that mean?' Here's how we differentiate with value-added solutions that you won't find from anyone else."
Step up your game
The slogan was just a start for Rabine. Now he had to go after those customers who value commitment and hard work and prove that it was more than just talk.
He decided one way he could do that was by guaranteeing not only the end product but the work that went into it.
"We're the only company we know of in the country that not only warranties the product, the labor and the materials, but we also warranty the engineering specifications on the job at no extra cost," Rabine says. "If there is a problem with engineering specifications, it's on our back."
Rabine hired engineers that had specific expertise in paving. He believes it gives him a crucial edge on his competition. The mindset of being the best and doing whatever it takes to satisfy customers and solve their problems is one that begins with him and has to become contagious to his workforce.
"My conversation with everybody on our team is we don't accept complacency," Rabine says. "We want you to challenge everybody around you. We want you to challenge yourself and challenge everybody around you to get better. If you care about the people and care about the company, you're going to care about challenging old ways. You're going to care about making a difference and being part of an improved business model."
It was a dual process of selling his team on the idea of hard work and going after the customers who wanted a company that would apply that hard work toward their needs.
"Most often 20 percent of your customers deliver 80 percent of your revenue and your business," Rabine says. "So you look at that 20 percent. Who are they? What are their expectations? Why do they like us? How come we are serving them? What do they look at? What do they read every day? How do we become their experts?"
Whatever industry you do business in, you can always do more to connect with your customers. Maybe it's joining an industry association or becoming more active in one of which you are a member. Make an effort to get to trade shows and keep up with what's happening out in the field.
"Give back to them and serve them and they are going to serve you," Rabine says.
As for the customers who do more harm than good, that has a way of working itself out as you spend more time with your valuable customers.
"If you just say, 'I have to raise my prices to serve this group,' you're going to lose a big chunk of those guys just by raising prices because they're going to be price-driven and not relationship-driven," Rabine says. "You've spun your wheels with these customers that you're not making a profit with anyway. Take that same energy and use it to market to that target market that appreciates you. I believe that's when we became much more successful."
The results of Rabine's commitment to excellence were crystallized when a friend who happened to see a patch job Rabine's company was doing in the Chicago area told him about it. The friend didn't know that Rabine's company was doing the work, but once he found out, he had to tell Rabine about what he had seen.
"He called me all excited one day," Rabine says. "One guy had left some pebbles in the curb and gutter. The other guy said, 'Come on, that's not world class.' The first guy said, 'The rain will wash it away.' And the other guy said, 'That's not world class. Clean it up.' And sure enough, they cleaned it up and left the job in impeccable shape.
"It's fun when you get everybody on board and passionate enough to care. If that message doesn't carry all the way through, we can't be the same company we are."
Rabine is realistic and doesn't expect his employees to completely buy in to the ideals that he preaches every day.
"But if you have 75 to 90 percent buy-in across the board compared to one leader or a couple of leaders saying, 'This is where we're going,' it's a lot easier," Rabine says. "Our growth in the last nine years has been about clarity of vision and hiring awesome people who will carry out that vision."
He says the goal of continuous improvement and of finding a better way to serve those great customers that do business with you is one that should always be a target for you, your team and your business.
"We have strategic planning that goes on for a couple of weeks at the beginning of every year," Rabine says. "We get feedback from everyone who has new ideas. We love when we have people on our team come up with, 'Hey, you know what, this works, but this could work better. This really doesn't work worth a darn. This could really work well if we do it.'
"Those are the people in our business who will continually grow in our company. They are the ones who are consistently thinking outside the box and the ones who are pushing the envelope to change things. That's who we look for."
When you find those people and bring them in on what your plan is, your odds of success become so much better.
"If you can get every employee to understand a good day from a bad day, you're going to be successful because 98 percent of the population wants to go to work and they want to have a good day," Rabine says. "They want to be successful and they want to create profits for the company they work for." <<
How to reach: Rabine Group, (888) 722-4633 or
Gary Rabine, CEO, Rabine Group
The Rabine File
Born: North Chicago, Ill.
Rabine on the importance of metrics: Measurements are the key to success. The year I lost money, it was because I didn't pay attention. When I first started my business and I did a driveway a day and four or five driveways a day, I knew every day, every job within minutes if I was profitable or not, if it was a good job or a bad job, a good day or a bad day.
As I grew, I got complacent. I kind of lost track. I wasn't keeping track as well as I did early on. Instead of understanding in a couple hours of doing a job if I was successful or not, I wasn't paying attention. So at the end of an 8-month season, I thought I made money and I lost money. I didn't have the measurements in place and the dashboards in place that I had early on.
If I had continued to operate like that, today I'd be out of business. If you don't have clear measurements and dashboards that everybody understands, you're setting yourself up for failure.
Rabine on challenging his people: You're going to get some people who like being part of it and others who think it's too much of a challenge. They want to be in a more relaxed environment. You create clarity in the vision and the people who are excited to be on board are passionate and excited and they know what's coming. It's a lot better than the alternative where you don't know the direction, you don't know what your job is or what your opportunity is and you lack direction.
Focus on people who want to help you.
Never stop looking at how you can exceed expectations.
Bring your employees in on your plan.
How Neil and Gary Jaffe collaborate to solve problems and help Booksource serve its customers
[caption id="attachment_58348" align="alignright" width="200"] Gary Jaffe, CEO, GL Group Inc.
Like any pair of siblings, Neil and Gary Jaffe each view the world very differently. While Gary is focused on people and the quality of dialogue he has with his leadership team at Booksource, Neil tends to look at things from a more strategic perspective.
"I think about the challenges we have faced as a company in the industry," says Neil, president of Booksource. "A big one was our transition away from the bookstore market, which historically has been our largest revenue stream, and focusing on the school market."
The brothers are looking to keep Booksource, which is owned by GL group Inc., in a position to drive maximum revenue. The move to the educational market is part of that, as is the integration of digital media and e-books.
Managing such a transition is not easy, and that's where Gary's biggest challenge comes in. When he took over as CEO at GL group a couple of years ago, it was important to him to have the right people in place to help him with the transition process. Unfortunately, that wasn't the case.
"They weren't giving me any advice and guidance when it came to some of the decisions we had to make as a leadership group," Gary says. "It was getting the proper feedback that I was looking for that those people weren't giving me."
As Gary viewed the situation, he was confident his leadership team knew what he wanted from them.
"We have a saying around here to give people explicit expectations," Gary says. "Those people knew their role. They knew what we wanted. But for whatever reason, they just didn't have the business acumen to give me the proper answers."
Both Neil and Gary needed to find a way to solve their problems if Booksource was to perform to its full potential. The best course of action was to attack both problems and move ahead with a renewed sense of focus.
"If you have to do this and you have to do that and then you have to do this, why not just do it all at the same time?" Neil says. "People are going to be going through change. At the end of it, it's all done."
And so the brothers set out to make the changes they believed would put Booksource in a better position to grow.
Assess your team
Gary was very frustrated with his leadership team and the lack of feedback it provided. But despite that frustration, he still found himself questioning whether it was really a problem.
He got with his business coach and told her that one of his key people was doing his own job quite well. He just wasn't offering much in the way of guidance to Gary.
"He's just not giving me advice," Gary says. "And she turned it around and said, 'By all means, I feel like he is hurting you. You're not able to get what you need from him, therefore he is hurting you.' And I totally agreed with that. The person can be hurting you if they are not doing the extra that we are expecting them to do."
Neil is quick to add that Gary is not lacking in the ability to do his job or make decisions on his own. Rather, it's one of his strengths that he is eager to gather feedback and use that to make even better decisions.
"Gary always has a natural inclination to listen a lot," Neil says. "Unfortunately, he wasn't getting helpful answers. That's where he recognized what needed to change. When he asked, he needed to get much better answers from people who were engaged or thoughtful or had different ways of thinking about things."
Leadership is a very fluid process. If you're not at least thinking about how you interact with your team, you're not using that team to the best of your ability.
"You have to make changes with people who don't listen enough or don't lead from engagement among the staff," Neil says. "You can either listen too much and not get the feedback and have a problem or you cannot listen enough and have great people giving you feedback, and you're not moving things forward."
In Gary's case, it was the former and that needed to change. Once he made the decision that he had to replace some of his people, he had to determine what qualities and attributes the replacements would need to have.
"It's the qualities that you are searching for that are most important," Gary says. "Determine what those criteria are. That's more important than having the person available that you've picked out."
In other words, you can't just pick a person who is different than the one you're trying to replace. You've got to take time to know what qualities you are looking for and then go out and find that person.
"You've got to listen, you have to have this person meet other people and you have to get other people's feedback and opinions to see if it's really the right fit," Neil says. "Get a lot of feedback from a lot of different people. Make sure you look at the criteria and go off the job description. Do all the things you would normally do when hiring."
As he proceeded with his changes and found people who had the qualities he was looking for, Gary learned that he wasn't the only one who had noticed a problem on the leadership team.
"One of the guys after he was terminated, one of the guys who worked on his team came up to me and said, 'I knew it was only a matter of time. I've worked with you for 15 years, and I know you can only take so much,'" Gary says.
It's OK to try to help a person to try to get them to provide you with what you need. But trust your gut when you think you've gone far enough and reached a point where it's not going to happen.
"For me, it's always a matter of, 'Have I done everything to get this person to understand what I'm looking for when it comes to giving me feedback?'" Gary says. "If my gut is saying, 'I'm not going to get them to understand,' it's time to make the change."
Engage your team
As the personnel issue was being addressed, both Gary and Neil were assessing Booksource's strategic direction. It was key that everyone be part of the changes that were occurring and be kept apprised of what was happening.
"If you're strategically focusing on the right stuff, it's going to make the staff better too because they will have less to worry about," Neil says. "They are all focused and engaged and passionate about the right thing that is leading to good rewards. A busy facility is an energetic place and it creates a morale boost, a staff boost, an engagement and they feed off of each other."
Booksource had always been open with its financial data and numbers, but Neil wanted people to feel like they had a real part in affecting those numbers.
"The first step is to get people engaged," Neil says. "If you have the potential to get a bonus, you're going to work a little harder to make sure that we as a team achieve that goal. 'If we achieve that goal, I might get a little more money.' It teaches the staff that a big order is a good thing."
Neil says there is a lesson to be learned for management when incentives are introduced into an organization.
"It teaches the owner that that bonus and that engagement and showing them the number and giving them a goal and a target is a very positive thing for the organization," Neil says. "People will work harder and faster and you need less people, and it all builds on itself.
"There are dozens of other ways to open the books to give people an opportunity to see what's happening and to participate. Start small with opening it and providing some kind of incentive to people and then you'll see the benefit."
You've got to follow up beyond introducing incentives and sharing information. If you just do it once and let it fade away, your people will lose a lot of faith in you as their leader. But if you steadfastly follow up and stick to it month after month, year after year, you'll earn strong loyalty.
The key is setting expectations and then meeting them.
"I want to know what the end result that is my expectation is going to be and try to figure out how to get there," Gary says. "What would it mean? What would it look like? We do a lot of follow up to see if the decision we made is right or wrong. If it is wrong, what do we need to do to go back and get it on track and get to that desired end result?"
Meetings are held with management, and then quarterly with employees to provide updates with how the company is faring in meeting its goals.
"They can look and ask questions and say, 'Oh yeah, at the beginning of the year, you said you were going to do 40 brochures, three new catalogs and this, that and the other,'" Gary says. "They know what we said we were going to do. The staff has to OK the plan from the managers."
Getting your team involved in what you're doing can only help you as an organization.
"It all goes back to that involvement issue," Gary says. "Listening and taking feedback. We don't feel you can make a better company if it's straight from the top down. We need it both ways."
Transparency also puts pressure on you to really think about the decisions you're making for your business.
"You're showing yourself so if you're not doing everything right, people might realize, 'Oh my God, they're going to see my weaknesses,'" Gary says. "We all know we have weaknesses. That's why we need the support of others to figure out how we can get over those weaknesses."
As Neil and Gary look at Booksource today, they see a company that is much more focused on and much more engaged in what needs to be done.
"We're having one of our busiest months in the history of the company," Neil says. "And we're renovating the big break room that we have, so there are tables out in the warehouse and a refrigerator out there, but it's all tremendously organized. People don't complain about it, people don't grumble about it. They just have a tremendous amount of engagement and it's because of the changes we made."
Gary says employees feel just as much a part of the success or failure of the business as management does and that's a good thing.
"By understanding it and getting people involved in reporting those numbers, I'm not responsible for the budget," Gary says. "We all are responsible for certain areas of the budget and people have to watch it. They are accountable for it." <<
How to reach: Booksource, (314) 647-0600 or
The Jaffe Files
Gary Jaffe, CEO, GL group Inc.
Neil Jaffe, president, Booksource
Gary: St. Louis
Neil: St. Louis
Gary: Bachelor's degree, human development and family life, University of Kansas.
Neil: Bachelor's degree in marketing, University of Illinois; MBA, Washington University in St. Louis
What was your very first job?
Gary: Camp counselor. It was a sports camp. This was their summer, and I needed to make sure that they enjoyed it. If the activity wasn't engaging, we'd change that activity to find something that was fun for these kids.
Neil: My first real job was a busboy at a hotel restaurant. It taught me that you have to wake up early and work hard.
Who has been the biggest influence on your life?
Gary: No. 1 is my dad. I've been around him so long and I've listened to these stories and he's preached these things over and over again, and I've had 30 years of training from him. It all boils down to character. He's shown the character that Neil and I have taken not only in our jobs, but in our family life as well.
Neil: It would definitely be my father, but I would also say my older brother, Gary. He has taught me a lot about life and leadership.
Who would you like to meet, or have met from the past?
Gary: We spend a lot of time at Disney World and it was in the '60s when Walt Disney had the vision of a place where families can go. I'd love to see what his reaction would be today.
Neil: George Washington. I'm reading his biography now.
Know what you want from your leadership team.
Get your people involved in meeting company goals.
Be accountable to your employees.
How Bob Bellack's relentless pursuit of progress drives his team at Newegg North America
Bob Bellack got an early start in the entrepreneurial game. Selling golf balls and lemonade, mowing lawns, cleaning gutters and washing windows were just a few of the jobs Bellack took on before he had even turned 10.
"Anything I could do to make a buck," Bellack says with an air of confidence. "I was driven by the need to do things independently and have money of my own to get what I wanted when I wanted it."
Flash-forward to 2012 and you'll find that Bellack, now all grown up, is still in a hurry to achieve success as quickly as he can make it happen. He's the CEO of Newegg North America, an e-retailer with an offering of more than 3 million products and roughly $2.5 billion in annual sales.
Those are great numbers, but Bellack says they won't cut it in tomorrow's world. He explains that as the market continues to evolve, so must the products available for purchase at Newegg.
"We have to be faster, smarter and more nimble in what we do," Bellack says. "Not in everything but in what we do. Newegg did a great job getting to where it is today. But where it is today isn't where we need to be. We need to keep changing the business. There's a lot of change that's going to happen in the next 12 to 24 months."
You won't find pingpong tables, brightly colored walls or slides for employees to swiftly glide from the second floor to the first floor at Newegg. Bellack says it's a different approach than that of other companies in the tech industry, but it's one that suits him best.
"When people come here, they have to be people who don't look to see what it is," Bellack says. "They see what it could be. That's the biggest challenge is finding people who have that vision. What we're doing is we're going to change and evolve Newegg to another stage in its life. To do that, you have to have those people."
Aim high
It's not that Bellack is trying to be coy about his company's future when he says prospective employees need to visualize it for themselves. It's more like he views the future as a picture that hasn't been painted yet.
And if you're not confident enough, or brave enough, to come along for the ride and help him paint that picture, Bellack says you're not going to be a good fit at Newegg.
"Innovation is not going to come from me," Bellack says. "It's going to come from them seeing opportunities to do a job better or see what somebody else in their realm is doing and make change and drive change.
"It's not going to be from me telling them to do it. If that's the culture you have, you cannot be competitive. Amazon has 50,000 employees around the country trying to figure out how to be better than everybody else. If you think I'm smart enough to beat 50,000 people, that's absurd.
"We have to build a really strong group of people who are creative, independent thinkers and risk takers who are willing to take risks and change things."
The big question is how do you find those talented people, and then once you find them, how do you get them to mesh all of their talents together for the betterment of your organization?
"I do a lot of interviews," Bellack says. "I talk to three or four people a week and then sometimes more. When you reach a certain point of your career, a large part of what you do is recruiting and finding new people and finding new skills. You learn things from people who you interview and people you talk to. That's one way you stay current with what's going on."
Talking to people is only scratching the surface of what you need to do, of course. Anybody can find people and engage in conversation, but that alone is not enough to bring you the talent you need.
The key is your ability to set your ego aside and not set barriers as to who you're willing to talk to or consider bringing into your business.
"Don't be afraid to hire experts or to hire people who know a lot more than you do," Bellack says. "Shoot for as high as you can get. If you don't, the last thing you ever want to be in any leadership role is the smartest guy in the room."
If you have a problem hiring people who are smarter than you, you have to ask yourself what your goal really is with your business. Is it to achieve personal glory? Or is it to build a successful business?
"It's not about people or personalities," Bellack says. "It's making sure people understand it's really about the ideas and the business. It should never be personal. It should be very focused on what is our business objective. Our business objective is to make the place better."
Give someone a sense that they can be part of a big success story and achieve growth on a personal level and they're more likely to buy in, even if you don't yet have a clear sense of where it's going. They'll see it the same way you do, as a challenge and an opportunity.
"The person you hire has certain expectations," Bellack says. "Pay is one of them. That's kind of the ante to be in the game.
"What they really want is to work with smart people that they are going to learn from. They want to do things that are unique, different, cutting edge and innovative. They want to be able to have a career path or development path, maybe in the company, maybe out of the company.
"But at the end of the day, they want to be at a place where they like to get up and go to work every day."
Focus on the big picture
When Bellack talks to people about coming to work at Newegg, he engages in every conversation with the hope of learning something from it. If he's lucky, it will be something that he can apply to his plan for growth at Newegg.
"I'm looking for someone not just to say, 'I had $1 million to spend on marketing, I bought search keywords on Google and my click-through rate is ABC,'" Bellack says. "What I want to know is they actually had a bunch of different ideas on how to bring customers in and they executed those plans in a unique way, one that I hadn't thought of before."
Bellack is particularly interested in where people have gone who have worked either for or with the people he is interviewing.
"Tell me where the people are who worked for you," Bellack says. "Where did they go? What jobs did they take? Have they been successful in their career? One of the guys answered, 'Well, I'm not sure what they've gone on to.' That was about over and we were about done.
"That tells you the kind of people that they bring in. The people I've brought in to work for me, a lot of them, I wish I had taken the jobs they took. They did far better than I did in many cases. But I'm happy for them. I think people should pick people who are smarter than they are and have the confidence they can hire good, smart people."
In Bellack's mind, it needs to be all about the business. If everyone is focused on the business and on making it better, all the other things will come. The personal growth, the personal rewards and the opportunity for everyone to experience a lot of success — it will all be there if everyone has the same goals in mind.
"I want to hear good ideas," Bellack says. "I want to hear that they have recruited and developed good people and I want to know that they have concrete things they have accomplished.
"I want to know that they could work together with others to accomplish a goal. Personally, there is no incentive or benefit to me for self-promotion among the people who work for me. The only way I win is if this company creates more value."
Put it all together
The final piece is to take those ideas and talents and potential and put it all together to build a better business. It's not always easy as even people who work well with others and enjoy collaboration have days when they don't agree with their colleagues.
"When you start bringing in a lot of people who have strong views and vision, I think the biggest challenge becomes what the alchemy is when you put them all together," Bellack says.
"Part of my job is to try to make sure what we make here is constructive and that people work together. The people who were here before and the new people, what I don't want is conflict and confusion. I want people who are creative, and I want people to debate and challenge things. But at the end of the day, you need people who can work together constructively."
One of the most important things you need to do when you're building a team is to set expectations. If you're a business that is still shaping its future, that's fine. But you and your people still need a road map of how you're going to do it.
"If you set the ground rules and you tell people how to behave and you set the culture where people behave in that way, generally it works," Bellack says. "I can't say it always works. But I believe most people want to do a good job. They just want to know what the rules are and how best to work in an environment."
Bellack takes personal pride in helping the people he hires become successful. In the same way he looks for stories from interviewees about people they have developed, he wants to have stories he can share about talented people he helped grow and succeed.
"My role is to make sure the people I bring in are as successful as they can be," Bellack says. "What we need to do is make sure we identify employees with unique skills and capabilities and make sure we set a climate and environment where they can be successful.
"Sometimes they can't do other things, but they can do one thing really well. Part of management is figuring out where those people are and finding the right spot where they can excel and make the company successful."
As Newegg continues to grow and rack up more awards for its ability to meet and exceed consumer expectations, Bellack says he'll continue to try to do it even better.
"You should never stop asking the question, 'Are we doing the right thing?'" Bellack says. "At the end of the day, that drives you to continuously get better."
While Bellack pursues growth relentlessly, he doesn't let himself get overwhelmed by all the moving parts that make up Newegg.
"I cannot worry about whether someone in Shanghai or New Jersey is doing the right thing," Bellack says. "I will never know that. I can never know that and it's somebody else's job to know that. But if they understand how they link back and how the goals and metrics are tied back, then we shouldn't worry." <<
How to reach: Newegg North America, (800) 390-1119
or www.newegg.com
The Bellack File
Bob Bellack
Newegg North America
Born: Chicago
Education: Bachelor's degree in accounting, DePaul University, Chicago. MBA, Kellogg School of Management — Northwestern University, Evanston, Ill.
Who has had the biggest influence on your life?
My father. He was an entrepreneur, a musician and a music publisher. He did all kinds of things. He was basically a very successful guy doing lots and lots of things. He fostered a climate of independence and entrepreneurialism in our family.
What is the best piece of advice you've been given?
My father told me to not be afraid to make mistakes. He told me when I played percussion, I had the cymbals, and he said, 'Don't be afraid to hit them hard.' Let me tell you, when you have those cymbals, if you're not on the right time, you're going to be singled out as the guy making the mistakes. But that's true of anything. You learn every time you do something.
What one person would you like to meet now or have met from the past?
Steve Jobs was a very interesting guy. He is somebody who went through a lot of pain. He had some unbelievable successes, but he is somebody who was criticized and challenged. He made the world's most valuable company. He went from Michael Dell telling him to give the money back to making the world's most successful, valuable company. It's more his spirit, his ability to be successful despite a lot of challenges. Some were self-inflicted; some were not. It would be interesting to hear his innermost thoughts about how he felt at different points in that experience.
Know the kind of people you want to hire.
Look for people who have helped others succeed.
Set the expectations for what you want to achieve.
How Gordon Hunter successfully led Littelfuse Inc. through a series of pivotal changes
Gordon Hunter expected that a few minor problems might arise in Littelfuse Inc.'s effort to move its headquarters in 2008 from a manufacturing facility in Des Plaines to a high-rise near O'Hare International Airport in Chicago.
He got a lot more than he bargained for when the global economy went into a recession that fall.
The corporate headquarters relocation was a small part of a larger effort to restructure the footprint of the 6,000-employee company, which develops components used in a variety of electrical, industrial and automotive products.
The goal was to transform Littelfuse into a business that would be more responsive to customers and more efficient with respect to its expenses. The whole effort was quite necessary, but it was also quite a lot of work.
"It's a major financial cost and time distraction for salespeople to work with customers on qualifying a different plant where the product is made," says Hunter, the company's chairman, president and CEO. "It means the salesperson is not hunting for new business. It's a cost to the company."
Hunter felt strongly that the restructuring was essential to the company's future and something that needed to go forward, even with the recession that was creating a lot of doubt and uncertainty about the future.
"Keeping our team on track with all of those big structural changes while cutting expenses and managing the business in the short term was fairly challenging," Hunter says.
He and his leadership team decided the best course of action was to attack the restructuring initiative head on with a boldness that let employees know decisively that the company's plan for the future had not changed.
"I think everybody looks back and says, 'Wow, that was a tough couple of years,'" Hunter says. "We spent so much time with our heads down trying to juggle so many things, and we didn't have a lot of time to reflect on it. But when we look back, we say, 'We really got through a lot.'"
Build a plan
It's largely the continuing convergence of technology in Asia that led Littelfuse to move out of its manufacturing facility in Des Plaines and transition from 16 small plants around the world to six large plants that are more strategically located.
"A plant in Ireland can't have the same cost structure being on the other side of the world from its customers," Hunter says. "The customers have moved to China. The competitors are in China. The cost structure is a Chinese cost structure. We need for business reasons to do this rather than to just close the business down."
On paper, it would have been easy to close plants in Europe and open new ones in Asia. But when you have an 85-year-old company that has a rich heritage and culture of hard work and high integrity, you've got to do it with respect.
"People are very straightforward, incredibly honest, very engineering-focused, very incremental and very data-driven," Hunter says. "All of this is a great foundation on which to go through restructuring."
Hunter felt that if he approached the big changes the right way with trust and respect, his employees would be willing to follow him through a lot.
"Get people to know very early and with a lot of lead time," Hunter says. "There's nothing worse than being told, 'Well, you've heard some rumors. We're going to close the plant. It's going to happen next month.' You tell people, 'Look, 18 months from now, this plant will close, and it will impact some of your jobs. In that time, we want to work with you and we want to help you. We want your help.'"
Hunter knew that some plants would need to be closed and others relocated to get the company to where he and the board of directors wanted it to be. But he needed to work collaboratively with his leadership team to reach informed conclusions.
So before he even brought up the idea of closing plants with his employees, he met with his executive team in hopes of developing a sensible and fact-based plan that they would buy in to.
"If you're a new CEO and you haven't got a good team around you, I'd spend your time developing a good team before you go off and try to do dramatic things like restructuring," Hunter says.
If you've got a good team in place, put team members to work. Each person should have expertise in a certain aspect of how your business operates. Lay out the situation you're looking at and what information you need team members to provide.
"Get your team together and figure out what's the data that you need," Hunter says. "What data do we not have today that we need for comparison? What modeling do we need to be doing to back this up with real data?"
Rely on your leaders for expertise in their area, but ask them to bring a broader view to the discussion as well.
"I expect at this level for people to be able to wear two hats," Hunter says. "Be the expert in their own functional area of the world but also be able to understand the corporate strategy, understand the goals of the company and be able to participate across any discussion on something as important as restructuring the company and moving plants."
Create a sense of urgency so that people understand that just because you're talking strategy, it doesn't mean there are no deadlines.
"It requires a lot of communication," Hunter says. "A lot of explaining to people that if we don't set the path for ourselves, someone else will. Our competitors will. So there's a lot of communication involved."
Do what is right
It's likely that you have your own ideas in mind for the best way to proceed with changes such as plant restructuring. But you have to be ready to accept that sometimes your team won't agree with you.
"You have to be prepared to say I'm going to do something that wasn't my idea," Hunter says. "I'm going to be prepared to listen to that and say, 'Well, that's not what I would have done, but I'm prepared to go along with your idea on this.'"
Think about your role with the company and where you think you are at in your tenure with that company.
"If I just arrived here and I'm 40 years old, I might have a different view about what we should be doing over the next five years," Hunter says. "But when the company is in this enviable position of being very healthy and we've done a lot together, it's sort of time to have the next generation be more vocal about the future."
Hunter quickly adds that he has no immediate plans to go anywhere away from Littelfuse. But his point is that you can't just think of yourself when you're making important decisions for your company.
"It's being prepared to say to people, 'You're a great guy. I'd like you to be with the company 10 years from now in a bigger role,'" Hunter says.
As much as you appreciate your people and the need to treat them with respect, you just have to keep in mind the company that you, your team and your employees are all a part of and why it needs to always take priority.
"If you don't do what's right for the business, there won't be a business," Hunter says. "The business has been very successful for 85 years. We've got to protect it and grow it for the future. The world is much more global and things that worked 20 years ago don't work today."
In addition to keeping the company's best interests in mind, you need to make sure that you and your team are all on the same page once the decision has been made.
"It's like running a play in a game," Hunter says. "You need a team to all be coordinated. Some may not think it's the right play at the right time. But you need them at some stage to say, 'I'll commit to go along with it.'"
When it comes down to actually making the decision, don't expect that everyone is going to be happy about it. That will be the case no matter how up front and honest you've been about the moves before they are officially announced.
"There is going to be some resistance," Hunter says. "It's making sure we've thought it through to the best of our ability before we make the announcement, making it clear that we've really given it a lot of thought and that there is a rationale for doing it."
Talk to people
Throughout the process of transforming Littelfuse, Hunter made sure he was visible to his people, even the ones who live and work far away from the Chicago headquarters.
"People like to see the CEO come to their location," Hunter says. "Most of the senior management does reside here in Chicago, but they are very open to spending time and listening to people in China or the Philippines or Mexico or Europe. Getting out personally to those places is very important and that's a critical part of my job."
Have a plan when you head out to distant locations to meet with people from all levels of the organization, not just the top management.
"A lot of the time, I'm listening to people present what they've been working on, the outcome of a project, and that requires time," Hunter says. "It requires going to plants and talking to people at different levels. It could be junior people in the customer service organization in the Philippines showing how they have really improved going about how they do their work."
When you have a situation where plants are closing or people are being relocated, do what you can to help them through the situation. If that means there isn't a place for them at your company any longer, help them land on their feet somewhere else.
"Help people with basic things like interview skills, writing a resume or helping them get contacts with other companies," Hunter says. "There are a lot of things for people who have not moved jobs in their career that they need some basic help with. It's being able to help get people over their bad news and work with them and communicate with them. Demonstrate that you're not going to cut corners and you're going to be respectful."
One of the best ways to show respect is to just be truthful.
"In many cases for us, the plants were sort of technology specific," Hunter says. "There weren't as many degrees of freedom. The idea of closing Ireland, it was a special technology. That business with that technology just would not survive with that cost structure. So it was very specific to be able to explain it."
As Hunter looks at Littelfuse today, he sees a company that is in a much better position to compete. Net sales increased from $430 million in 2009 to $665 million in 2011. But the strategic planning is ongoing and will be a key to maintaining the company's success.
"It's setting the right things we want to work on, putting the right people on the teams to work on it and giving them good direction," Hunter says. "Good things happen if you have the right people." <<
How to reach: Littelfuse Inc., (773) 628-1000 or
Get a solid plan in place.
Make the best decision for the business.
Be visible to your people.
The Hunter File
Gordon Hunter
Chairman, president and CEO
Littelfuse Inc.
Born: Newcastle, England
Education: Electrical engineering degree, University of Liverpool; MBA, London Business School. Part of that time in my MBA, I studied at Helsinki School of Economics (Aalto University School of Business) in Finland where I lived for four years.
What did you think of the way England handled hosting the Summer Olympics?
I got quite captivated watching the opening of the Paralympics. It seems to have really engaged people. People realize that people who have handicaps in the past may just not have been openly recognized and made visible.
They are really being brought to the front. It's quite tremendous. That's even more important because the momentum of the Olympics, it became a bit of a show. But what they are doing now with the Paralympics, I'm really impressed.
Who has been the most influential on your life?
I certainly look at several of our board members as being people that I go to for counsel and have a lot of respect for. This company had a very good board before I came to the company. I do think that's a critical part of having a successful company.
Whom would you like to meet and why?
Probably Nelson Mandela. I did go to South Africa two years ago and spent some time there. What he has done in his life is quite remarkable.
How an open mind and a clear plan helped Tony Mercurio build the new Vanliner Insurance
Tony Mercurio had a lot on his mind just a few months after he became CEO at Vanliner Insurance Co.
He had a group of employees who were looking to him for both direction and for answers to their many questions after his employer, National Interstate Corp., had bought their company.
In addition, Vanliner had been purchased from UniGroup Inc., which just happened to be its largest customer. To make it even more fun for Mercurio, UniGroup was now his landlord at Vanliner's offices in St. Louis.
"Their CEO is down the hall from me," Mercurio says, referring to the CEO of UniGroup. "That entered into the perspective of how we went about the first six to eight months managing and changing the company."
The due diligence process took a little under a year and confirmed to National Interstate that the acquisition of Vanliner was a good idea. But that was on paper. It was up to Mercurio to make it happen in the real world and seamlessly blend the things Vanliner did well with the practices that worked best for National Interstate.
"Neither culture or approach to the business was good or bad, per se," Mercurio says. "But the way we run our business, certainly the way we've run it out of Ohio and now how we do it in St. Louis was very different than how old Vanliner had handled its business in the past."
Tough choices would need to be made as Mercurio worked through those differences to build one cohesive organization. Personnel redundancies were one of the first issues to be addressed, but there were other concerns that he faced in trying to bring everyone together at the company, which now has about 125 employees.
It was enough to leave him feeling a little scared but not enough to make him question for even a moment his ability to make it all work in the end.
"It's OK to run scared a little bit," Mercurio says. "Sometimes people think it's the opposite of confidence and it's not. I was running scared, but I decided if I just kept getting up every morning and going to bed late at night and kept putting the time in, as long as I didn't skip my 4-mile run because that's where I kept my sanity each day, as long as I did all that, we'd get through it.
"In hindsight, I don't think I'd do it any other way. I'm glad I was afraid. Being afraid to fail and having that be your motivator is not always a bad thing. I felt it, absolutely I did."
Live your plan
As Mercurio saw the uncertainty in the eyes of his employees a few months into the integration process of the new Vanliner, he remained confident. He had a plan in mind for how the new company would come together, and he believed in it. He just needed to convince everyone else that it would work.
"I had a seven- or eight-page outline that I did that took us all the way through Dec. 31, 2011, down to what our final results would be on the first full year of ownership," Mercurio says.
"Several things changed along the way, but if you don't set the expectations, if you don't have the objectives, if you don't write them down and if you don't hold yourself accountable, it's much harder to achieve the success you're looking for."
Despite the extensive planning, he knew that success wouldn't be easy to achieve. If anyone understood impatience, it was Mercurio.
"It's not in my personality to stay patient," Mercurio says. "I feel urgent about performance and about accomplishing our objectives. But this was a situation that needed time. It wasn't going to be years, but it needed to be months to let it play out and let the people here who I knew, ultimately, we could trust and depend on see it and feel it and be part of it as we steered it in a different direction."
Mercurio made two promises that he felt very confident could be fulfilled.
"Hollow promises are about the worst thing," Mercurio says. "Making a promise that you can't pull through if you have a group that is looking to you to be their leader, that's about the worst thing that can happen. The promises we made were pretty calculated."
Mercurio wanted to put something on the table that his people could point to and shoot for that would make all the work and struggle they were going through in the transition process seem worthwhile.
The first promise involved a new targeted alternative risk solution for moving agents aligned with the Allied Agents Association. He promised that this new product would be a success and make the company better.
"The other thing I promised was that within six months, the workload and results, the numbers, would improve if everybody hung in there and believed in what we were doing," Mercurio says. "That was at the same time that we took away flex hours and did some other things that were just different organizationally. So it was hard to get people to buy in. There were a few sleepless nights as you make promises like that."
Fortunately, the new product and the idea that things could get better soon proved to be great motivators and a great way to identify who was truly on board with Mercurio's vision for the new company.
"The best people love to be challenged and love to be pushed to what they believe are their limits," Mercurio says. "Sometimes, they do not give themselves enough credit to know that their limits are higher than where they have set them. I'm not just talking about workload. I'm talking about being challenged to be creative, to take a little risk and get outside of their comfort zone. Those kinds of things, especially when the results go along with it, are rewarded in our system."
Give people a chance
Mercurio had the power and wherewithal to take over this new company and fill spots with his own handpicked employees brought over from National Interstate. They would be people he worked with before and was comfortable with and he wouldn't have to spend time getting to know them.
But that couldn't be further from the approach that Mercurio took in this particular situation.
"We only brought four people from the National Interstate office to the Vanliner Insurance Co.," Mercurio says. "We needed to leverage the talent that is here. A lot of people on the staff had several years of moving and storage experience and the people from Cleveland had zero. We had other insurance experiences and captive alternative risk transfer experiences to bring.
"But we decided that we weren't going to integrate with 30 people."
Mercurio knew he had talent at his disposal that had worked for the previous Vanliner entity. Who was he to come in and tell people they didn't cut it just because he had never worked with them before?
"We brought in the claims vice president from the parent company to help interview and assess the claims people," Mercurio says. "We brought in the IT management and project management people to help assess the IT people. We did that in every area. My background is marketing, underwriting and sales, so I took that lead. But we had other folks I knew we could count on assess individuals as we went through the first six months of the tenure."
His philosophy in appraising the skills of these people was to find out what they could do for the company. Mercurio gave them a chance to sell their skills or their ability to learn new skills and took that into consideration when decisions needed to be made.
"The way to empower employees, whether they've worked for you for three days or 13 years is let them write their own objectives," Mercurio says.
"Let them tell you what they're going to do for the organization. You may have to tweak them and you sit down and go through a collaborative effort and you get to the end result that both believe would be the right set of objectives for the year.
"But let them take the first crack. It's amazing how people own what the objectives are and hold themselves accountable if they are the ones who get to come up with it."
He adds that you might be surprised how similar your list is with the list of objectives your employees will come up with, if you give them the chance to do it.
"You'll be surprised as to how close the two lists are if they've lived in your culture for even a short amount of time," Mercurio says. "But secondly and more importantly, the ownership level goes way up. Too many managers miss that. They tell people what they have to do instead of letting their people tell them what they are going to do."
By taking this approach, Mercurio was able to find jobs for people in the company who didn't fit in their previous roles.
"So instead of them going elsewhere to seek employment or us letting them go, we decided because they were talented, because they were eager and we felt like they were motivated and objective-driven, we put them in a different role," Mercurio says. "They are flourishing. They love it, and we're getting from them the effort and result we need to be successful."
Take responsibility
Mercurio did not miss many opportunities to get in front of his people and in front of potential clients and customers to talk about the future of Vanliner Insurance Co.
"I did most of the large sales calls with some of our salespeople with me, I did all the shareholder presentations to the various Vanliner boards, I was the speaker on most of the agendas at the conferences for the major moving van lines in the country," Mercurio says.
"I was the one out shaking hands. It certainly wears on you, and ultimately, I probably could have spread a little bit of that out. But we were going to have a certain complexion in the marketplace and I wanted that to be my responsibility."
It's one thing, of course, to be exuberant and excited about your company and polished in your speaking style. If there is no substance behind it, no results to match your promises, it will wear thin with your people very quickly.
So if the pressure had not eased and the work had not gone from overwhelming to just busy as Mercurio had promised it would, he would have had a problem. Fortunately for him, his vision came true.
"The claims group really had it tough for a while," Mercurio says. "But we just asked them to hang in there and it was like clockwork. Once we reached that six-month mark, the number of new claims coming in was dropping dramatically and the number of files that were closing was going up dramatically. It was shrinking by the day and they could feel it. They felt the relief."
As he looks ahead, Mercurio says he prefers "urgent" over "running scared" when describing his philosophy on how he and his employees get things done.
"If you're urgent about what you're doing, you'll succeed in our organization," Mercurio says. "We have a saying that I've used for a lot of years. Effort keeps you in the lineup. If you work really hard, you'll stay in the lineup. But results move you up in the batting order."
How to reach: Vanliner Insurance Co., (800) 325-3619
or www.vanliner.com
The Mercurio File
Tony Mercurio, CEO, Vanliner Insurance Co.
Born: Lorain, Ohio
Education: Bachelor's degree in business and economics, University of Mount Union, Alliance, Ohio; MBA, Cleveland State University
Who has been the most influential person in your life?
My father, who passed away a few years ago. He was never afraid to take a risk. He ran a lot of different kinds of companies and tried a lot of things. He was never a 9-to-5 guy. It was a different time and different types of businesses that he ran. It was probably more that I saw him be excited about what he did for a living all the time and live it.
I don't mind being defined at least somewhat by who I am at work and what I do for a living. That was my biggest lesson. You can enjoy what you do and be successful at it, even if it wasn't being the starting left guard for the Cleveland Browns.
What did you love about playing football?
Football is hard. I love that not everyone could do it. Everybody has a different role on each play. They all have different steps to take each day but in the end, if we want to score more points than the competitor, everybody has to do their job.
How do you relax away from work?
My wife and two kids, that's just been a blessing. I married up. Beyond that, just a couple of personal things.
I used to think I was an athlete back in my college years and maybe my first few years after college. These days I don't feel that way, and I don't care necessarily if I run fast. It's the mental release and the confidence that I get out of exercise.
Take the time to get your plan in writing.
Don't underestimate the abilities of your people.
Don't promise what you can't fulfill.
How fatherhood helped Adam Miller get serious about helping Cornerstone OnDemand reach its potential
Adam Miller could not afford to waste any more time at Cornerstone OnDemand Inc. He had just become a father, and if he was going to spend time away from his first child, he decided that it had better be time well spent.
"I realized while I was out with the baby that we could keep trudging along or we could try to make this into something meaningful," says Miller, the company's founder, president and CEO. "It was at that point that I decided we were going to try to really grow the business and not just limp along."
Cornerstone was launched in 1999 as a technology company and now provides cloud-based talent management software solutions to users in 180 countries. The company grew gross revenue from $10.9 million in 2007 to $75.5 million in 2011.
It's been a success story, going from 150,000 subscribers to 8.2 million. But it took the birth of Miller's son in 2005 to get him to realize that, up to that point, his company had not lived up to its full potential.
"You have to say you're either going to do this or you're not going to do this," Miller says. "It was pretty severe. We made a lot of changes to the business in that year. We kept the same basic format of what we were doing and we kept the same product, but we made a lot of organizational changes, and those are things that we would not have done had this not happened."
One of the biggest changes was a complete replacement of the company's sales team.
"It was just the wrong people for what we were trying to sell," Miller says. "We realized to be effective, we needed to be doing solution-selling, and we didn't have the right skills or people to do that kind of solution-selling."
So what's the key to taking the big idea and the significant changes that you have in your head and making them a reality in your business? Miller says it comes down to making sure you don't blindside your people, even when you're doing something as big as replacing your entire sales team.
"If you suddenly come in one day and you start acting completely differently and you start making all these changes without conveying why you're doing it or how it's happening, all you're going to do is create massive confusion and create essentially a culture of fear," Miller says. "People won't know what's going on or why it's happening. You don't want to do that. You want people to be supportive of what you're doing."
Here are some of the things Miller did to get people to support his plan and help take Cornerstone to greater heights than it had ever achieved.
Don't take shortcuts
It may seem like it takes too much time to sit down and talk with people about your ideas, especially when you're so charged up to put those ideas in place to see how they work out. But it's something you've got to make the time to do if you want a cohesive team.
"A big part of leadership is taking the time to get the buy-in to support your objectives, even when you don't have a lot of time and it seems like perhaps a waste of your time or an inefficient use of your time," Miller says. "In the long run, it's an excellent use of your time. If you take shortcuts at the beginning of that kind of change or strategic reorganization or reprioritization, you're going to pay for it over the long term. If you take the time, you get the benefit over the long term."
That doesn't mean you have to talk to every last person in your organization. If you have a smaller business and that's possible, go for it. But if not, focus on the key people who hold positions of influence in your company in the areas you're looking to affect change.
"Those could be the direct reports to the CEO or those could be people much further down in the organization who have pivotal positions or are somehow critical to the organization, but it's incredibly important to take the time to get buy-in from all of the key players," Miller says.
"That is typically the critical mistake people make. They don't take the time to get buy-in and people don't understand why changes are being made or feel like the management team is being arbitrary and that leads to lack of support, lack of focus and ultimately lack of execution, which causes the strategies to fail."
When you sit down with people, don't just make it about whether or not they like your plan. Talk to them about how it might affect them and use the opportunity to gauge how they feel about their role in the company at that point in time.
"You have to know enough about the person to understand how to have that conversation," Miller says. "You have to know, what are their personal interests in what you're talking about? What are their career aspirations? How does what they want connect to what you're talking about? How does what you're working on connect to what they're working on? How do they fit into this model that you're proposing?"
You've got to take the time to show employees what's in it for them. Don't just make it about the company and how your idea is going to help your company make more money. Even if you try to have a culture in which it's not your company, but it's their company, you've still got to make it personal for your people.
"You need to understand the employee's motivations," Miller says. "Why would they support the idea? How does it impact them? Does it mean that they have to work harder or less hard? Does it mean they'll be able to move closer to their career aspiration? Or does it take them further away from that? If you're talking about reorganization, did one of their peers get promoted and they did not. Do they view that as something good for another person or bad for them?
"There are a lot of different and often competing motivations and perceptions that people will have about something. Trying to walk in their shoes and understand how it's going to really impact them helps you to better present what you are proposing."
Be approachable
It was more of a symbolic move than anything else, but it did send just the right message to his employees. As Miller embarked on his big change plan for Cornerstone, he began by firing himself as CEO.
"I came in one day and said, 'Let's pretend that I'm the new CEO,' even though I was also the old CEO," Miller says. "But I started thinking about the business as if it was my first day on the job with no preconceived notions, loyalties, expectations, anything. At that point, I was able to really transform the business because everything was up for grabs."
Miller didn't want the perception to be out there that he was blaming his employees for the company's complacency. He wanted them to know that he held himself as responsible as anyone for what the company had failed to achieve.
So his move to fire himself drove home the message of Miller admitting his faults and looking for a second chance to succeed. And it helped make him more approachable in the eyes of his people.
"You need the organization to support what you're doing or you won't be successful," Miller says. "There are some organizations that succeed in spite of their leader. But a true leader is able to get buy-in and commitment to achieve their vision."
That commitment is achieved when you take steps to make people feel more comfortable about coming up to you and talking to you about their jobs or the business as a whole.
So if you request a meeting with an employee, don't be mysterious about what you want to talk to them about.
"If you IM somebody to come into your office, it's like getting called to the principal's office," Miller says. "It creates panic. Explain in the IM why you're asking them to come to your office.
"Spend the time to get to know your people and also listen. Hear the feedback. Understand what other people think about things.
"Some of buy-in is letting them participate in the strategy and participate in the tactics and objectives of what you're trying to do. At the end of the day, no company is run by a single person."
You'll also go a long way toward earning support from your employees if you follow up with them and show that their meeting with you wasn't just for show, but that it actually meant something to you.
"Follow up," Miller says. "Check in. Sometimes a check-in can be very quick and simple: a quick email or a phone call or drop by in person just to ensure that the people are still committed and to answer any questions or get any feedback on ideas."
If you take the mindset that your people are there to help you and your business and that they have talents that can help you, you'll be a lot better off.
"Everybody, regardless of their position, can have good ideas and have creative suggestions that can be very useful," Miller says. "So everybody's input is important. Just because somebody is in a junior role doesn't mean they don't understand the business or the strategy or can't contribute to the business or the strategy. A lot of it is just about respect."
As much as you focus on respect, you've also got to bring your enthusiasm to the office every day.
"It's impossible to be an entrepreneur and not be an optimist," Miller says. "So you have to remember the reason you started the business and the reason you've had the success you've had is because you've been able to maintain discipline and stay positive, even when things looked a little more difficult or even when everyone else says no.
"Being able to stay positive is a key factor of success because not only do you have to stay positive, but you have to keep your people positive. If you're going to have doubts, you should have those doubts in private. Keep people focused on the potential for success."
Hopefully, those setbacks are few and you have more opportunities to demonstrate enthusiasm and use that positive energy to sell your plan.
"Persuasiveness is an incredibly important job of a leader, to get people to buy in to the strategy and buy in to the tactics to get it done," Miller says. "I just view that as fundamental to leadership — being able to paint a vision for people and getting them to support that vision." <<
How to reach: Cornerstone OnDemand Inc., (888) 365-2763 or www.cornerstoneondemand.com
The Miller File
Adam Miller, co-founder, president and CEO, Cornerstone OnDemand Inc.
Born: New York
Education: Bachelor of science degree, Wharton School; Bachelor of arts degree, University of Pennsylvania; juris doctorate degree, UCLA School of Law; MBA, Anderson School of Business; certified public accountant
What was your very first job and what did you learn from it?
I was a stock boy at A&P, the grocery store. I was 16. The summer before I went to college, my dad was a controller at a steel company. He had me work in the steel factory so that I knew what would happen if I didn't do well in school.
It was a very interesting experience. I got really involved on the labor side and became a big advocate for the workers in the factory. I thought that was a really interesting experience. That taught me a lot about everybody being important to the organization.
Who has been the biggest influence on you?
I would probably say my parents, but I haven't had a single mentor the way I think some people do. My parents have always been extremely supportive and that's given me both the sense of optimism that is important in being an entrepreneur and the willingness to take risks.
What would you say has been the best part of being a father?
I love being a father. I have three kids, two boys and a girl. My favorite part is watching them learn and being a part of their learning and experience.
Don't be afraid to make dramatic changes.
Get feedback on your plan.
Make sure your people know where they stand.
How Victor Ciardelli stays ahead of fast growth and helps his people thrive under pressure
Victor Ciardelli had become accustomed to fast growth and all of the challenges that come with it: hiring new people, finding new office space, making sure everyone has a working computer and phone line. It's all part of the deal when your company is taking off.
And then along came 2012.
"This year is when we really exploded," says Ciardelli, president and CEO of Guaranteed Rate Inc. "We took over multiple companies in the past 24 months. We went from having 30 to 40 offices to now we have 130 offices across the country."
Revenue jumped from $180 million in 2011 to an anticipated $400 million this year. Ciardelli found himself in charge of a mortgage company that was bursting at the seams with more than 1,500 current employees. Nowhere was the growth more evident than with personnel.
"Hiring is a major, major issue," Ciardelli says. "The struggle is when you're hiring at this pace, you have to make sure you can continue to keep up the hiring process. You've got to hire quality people that fit your culture. And then once you hire them, another huge struggle is the training process and making sure that you have the on-boarding process working well."
When you're hiring 25 new salespeople a month and attempting to train them from scratch, it may not always be easy to stick to your protocols. You want them to get in and get going as quickly as possible because there is plenty of work for everybody to do.
But if you want that fast growth to lead to more fast growth and enduring success, you've got to find the time to do it the right way. If you don't take the time to make sure everyone is meshing and is working for common goals and common objectives, it can all come crashing down in a heap much faster than you think.
Know what you do
Fortunately for Ciardelli, he thrives on pressure and frenetic activity. He loves the fact that Guaranteed Rate is hiring 15 to 20 new people every week and is constantly looking for more space to quickly put them to work.
It's not just his personality that allows him to stay calm during extended periods of hyper-growth. Ciardelli takes confidence from the fact that he has a plan for his business. He wants Guaranteed Rate to be the best mortgage company in the industry with top loan officers who can provide the best service to customers.
No matter how quickly the business grows, he's got that plan. From there, it just becomes a matter of making sure everybody he's bringing on board knows what it is.
"I started my first company when I was 24 years old," Ciardelli says. "I didn't know anything about the mortgage business. I was hiring pretty much anybody who would agree to come and work for me. I had to build it up from that and then continue to keep upgrading. It was awfully painful."
Ciardelli soon learned that prospective employees, at least the ones worth hiring, are interviewing you just as much as you're interviewing them. They want to be part of a winning team with a leader who has a clear sense of where he wants to take the business.
"You have to have the right core business principles and you have to build your culture and build your company," Ciardelli says. "Everything about it has to be about the right thing for your customers. It's all got to be around excellence in order to be able to attract the right people. If you do not have the right core business, you cannot attract the right people."
It begins with knowing your customer. You've got to know who that is and what it is you're offering them so that your employees know it when they're out contacting potential customers on your behalf. If they don't know that, it's not going to reflect well on you or your business.
It's got to be something that your people both can and want to get behind.
"There are numerous businesses that are out there and they are struggling to survive because what their offer is to the customer is not the best," Ciardelli says. "It doesn't have the best value proposition for the customer as their competitors and that's why they are struggling."
Ciardelli brings up successful companies such as Apple, Google and Amazon as examples of businesses that have clear value propositions and consistently strive to be the best at what they do.
"They are offering the best product and best service to their customer and the best price compared to any of their competitors," Ciardelli says. "Because they are doing that, the best employees out there want to work with the best. So it's the whole best of the best philosophy and best of the best model. To try to find employees who are winners, you have to have a winning formula in order to attract winners."
You take that formula and tout it when you're talking to people whom you're interested in hiring. Sell them on what you do and how well you do it and back it up with data that shows you're not just making it all up.
"You have to sell the company and you have to sell the position," Ciardelli says.
Know who you want
Hiring obviously is a regular topic of discussion these days at Guaranteed Rate. Ciardelli meets with his managers and department heads regularly to talk about personnel needs and what will need to be done in the month ahead to meet those needs.
"I'll be in a room with 40 people every other week and we talk through what we need to do," Ciardelli says. "We talk about volume and how we stay up on it. How many people do we need to hire? Do we have the right management structure? What kind of service are we providing to our employees as well as to our customers?"
With his goal of being the best established as the backdrop, Ciardelli and his team can move forward to identify how many people they need to hire. For him, it's important that the number be precise.
"We definitely lean toward knowing the specific position we want to fill and then looking for somebody to fill that position," Ciardelli says. "You're clear on what you're being hired for and when you come in, you know exactly what the expectations are."
Ciardelli says he believes it's inefficient to simply collect talent and find a place for it later, as some entrepreneurs try to do.
"I just don't have time to do that," Ciardelli says.
It really comes down to a matter of time. You can invest much time searching sources for potential candidates to work for you. You could then engage in a series of interviews to learn about the candidates and see who you like and whittle it down to a smaller group before you make your selection.
But when you're a fast-growing business, do you really have the time to do that? It's Ciardelli's belief that you probably don't, and more importantly, you don't even need all that time to make a good decision.
"Most good CEOs and department heads can identify a strong candidate within minutes of an interview versus hours of talking to somebody," Ciardelli says.
It's an ability that you should be able to find in others on your management team as well so you don't even have to conduct those interviews. Take the time during those regular meetings to make sure people are clear on what you're looking for.
Use the same detailed approach to provide information to job candidates. Those who are worthy of being hired will take heed and be ready to deliver what they're all about in a brief and concise manner.
"They are coming in ready to go and ready to deliver whatever they want to say within the interview," Ciardelli says.
Help your new people
Guaranteed Rate has about 600 employees in its corporate office, and as was stated earlier, it is adding more than a dozen new people every week. It would be easy for those new people to get lost in the shuffle of those who already know what they're doing and those still looking to find their place.
It's for that reason that Ciardelli started a concierge service that provides new employees with a place to go for answers to any questions that they might have.
"Every time there is a new hire, they reach out to them and greet them into the company and make sure they have everything that they need," Ciardelli says. "They give them an idea of what it's going to be like when they come in."
The key to making this kind of system work is having people on the concierge team who are well-connected and know who to contact for answers when there is a problem.
"Those people who are on the on-boarding process know everybody," Ciardelli says. "So they would just pick up the phone and go, 'Oh, no problem. Let me call marketing and make sure they take care of that for you. And I'll make sure they call you and get back to you.' They're not necessarily doing the work themselves. They are just making sure that the person is taken care of. From an employee standpoint, it makes them feel better."
Like everything else, Ciardelli says success in employee integration is all about having a plan and then following through on it. You and your team need to each constantly have that vision in mind of the goal you're striving to reach and stay in touch about how to reach it.
"Evolution on your management team, building structure and continuing to add people and structure to your management team is absolutely critical to take you from being a small company to a midsized company to larger than a midsized company," Ciardelli says. "If you don't have that and you don't have the managers within your departments that have your cultural beliefs and have your vision and have your back, you need to get rid of them. They are the wrong people."
Thus far, the numbers would suggest that Ciardelli has made some wise personnel moves. His company continues to grow and he continues to look for more space to put all of the new people.
"What I'd love to do is find one 100,000-square-foot or 150,000-square-foot building where I could move everybody into," Ciardelli says. "So I am looking for a long-term solution."
In the meantime, he will continue to rely on his goals and the dedication of his team to reach those goals to keep the company moving up.
"Constant communication with your employees and letting them know about your success and your growth and where you're going and what your intentions are is so important," Ciardelli says.
"Communication with your management team and with all your employees and, most importantly, the people really driving your business, your top salespeople or whoever it might be in that company — communication with those individuals is critical so you can withstand bumps and bruises if you have to." <<
How to reach: Guaranteed Rate Inc., (866) 934-7283 or www.guaranteedrate.com
The Ciardelli File
Victor Ciardelli, president and CEO, Guaranteed Rate Inc.
Born: Chicago
Education: Majored in business, minored in history, Columbia College, Columbia, Mo.
What was your very first job?
I was a busboy at the Carlisle Banquet Center. You're carrying out trays of the salads for the servers to serve. You're cleaning up, busing tables and taking stuff back and forth. A real glamorous job. I was a young kid and wanted to make money at an early age.
Who has been the most influential on your life?
The person that I feel I connect with more so than any CEO is Jack Welch from GE. When I read his books, philosophically we are exactly on the same page. How he manages and how he deals with people connects completely with me.
The other person would be Wayne Huizenga. My dad bought our house from Wayne in Oakbrook, Ill. when Wayne lived out there when he was building Waste Management.
There is a massive influence of Wayne on my life.
The thing that kept resonating with me was seeing what Wayne was able to do from being a garbage man to building not only one massive organization in Waste Management, but then going over and doing it with Blockbuster Video, with Auto Nation USA, with Discovery Zone and all these other businesses. He was definitely an inspiration. I figured if he could do it, why can't I?
Who would like to meet or have met from the past and why?
My grandfather on my father's side. I never met him. He was born in Italy, fought for the Italians in World War II. He seemed like an extremely interesting gu, and I would love to have met him and know more about him.
Have a clear plan.
Don't go to excess interviewing.
Help new people off to a good start.