The Most Impactful Things I learned as a President/CEO – Part 1 – A Unique Focus on People

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Preparing for a company meeting, we had a canvas wall covering made for the event.

I spent 30 years as a senior executive running software/service businesses. During those years I experienced almost everything imaginable from taking a tiny business from 8 to 100 employees in 5 years while going public and making INC 100 to rolling up a series of competitors to become a market leader.

During my last 15 years or so before retiring as President/CEO I made major changes in my own thinking which resulted in a complete business makeover. Most of this I learned not from seminars, books or consultants, but from my own employees and customers. They taught and I listened!

Unique Focus on People. Outsiders would always ask, what is your #1 priority, the obvious executive answer would be “the bottom line”.  I would always surprise them with “my people”. Sooner, rather than later, the success of a business will come down to its people. Over 30 years technology changed many, many times, we had multiple business cycles like the pre-Y2K boom only to then experience the 2000 market crash. Much of this was beyond my control, what I did control was our strategy and how we treated employees.

It was always my job to make sure that our managers were empowered to hire people that would fit our culture. I wanted to hire executives reporting to me that were smarter than me, at first I thought it was a little intimidating. I learned that if I was going to be the smartest person in the room, we were in trouble, I needed smarter people.

We gave people real jobs, held them accountable, and allowed them to do things they felt were “fun”. Our employees were programmers, business analyst, consultants, sales people and admin. By the way, we had NO secretaries or “assistants”! You wanted coffee, get off your butt and go get it!

Traditional turnover in technology is quite high. However, our average employee had been with the company for over 13 years, we had almost no turnover. Over the years we actually hired back many people who had left the company and wanted to rejoin. We weren’t the highest paying company, although our average salary was mid-upper 5 figures. In order to keep talented, high-performance people, we had a “fun factor”. We would ask an employee, what do you consider “fun work”, and then find ways to match them up with a job closely aligned to what was “fun” for them. If you just couldn’t have “fun” within our company, you belonged somewhere else.

It’s also about the environment, even first level managers could order pizza for their staff anytime they wanted. Every Friday was a company breakfast or lunch day. Once a month we had an “all hands” company lunch meeting across all locations with dial-in conferencing. Each department proudly presented their accomplishments, I provided the company’s complete financials, we had no secrets. I remember our annual kick-off meeting in January 2009, employees all knew friends and neighbors who were being laid-off, we were in a major recession. I told the company I had no plans for a lay-off, however they had to find a way to meet our profit goal for the year. You see, we had a profit sharing program (except executives), the employees got their profit share, before executives (including me) got our bonuses. My concern wasn’t the executive bonuses, but that the employees would earn their profit share that year.  Guess what, under difficult conditions, we again had a record breaking profit year, and the employees were very proud of the profit share distribution they earned. Employees came first, our #1 priority. Lesson learned, great employees will always make the CEO look good!

Annual Meeting of Staff. Every year we celebrated people who “stayed with the company”. You’ve probably experienced an after work party where a well-liked employee would leave the company and everyone would go out for drinks. I just could never get it, we are celebrating you quitting the team. I didn’t attend many of these events in my career. We did however throw an annual bash to honor those employees who “stayed with the company”. For every 5 year milestone with the company you were awarded a valuable gift that evening. This was always a catered event and it was a time for fun and games. The employees ran the event, I of course was always invited. Each year the teams would select a theme months ahead of time and then plan how every employee would get a novel award. We had a “Survivor” night after the TV show, a number of “super heroes” nights, etc. Each event was memorable.  Even our remote working employees were welcome to fly in and get honored. We would also invite the Chairman of the Board of our holding company and other holding company presidents. It was a fun time to “roast” our out for town executive guests. What was the message? We celebrate the people who stay with the company! I didn’t invent the Annual Meeting of Staff, but I made sure that ours was always memorable.

Awards
Years after retirement, I still cherish Annual Meetings of Staff “awards” I received.  

Training Clients & Employees.  I believed the more training people had the more they would excel and the happier they would be, and the same with my clients. The cost of training can be quite high, but there were ways to manage the costs and turn it into an investment. A key element of employee training is to first have well defined processes and procedures. People feel much more comfortable when they clearly understand the requirements of their job. We empowered employees and their managers to “own the process”. Here is what we need as the “output”, now tell us how to achieve it, let the team write their job descriptions and procedures.  Top down instructions are nowhere near as effective as teams just taking responsibility.

You will notice that I mentioned “training” clients, might sound a little strange, right. Not at all, we “trained” our customers what to expect from us, how to trust us. The customers knew that our teams would work around the clock, if necessary, to solve problems. Most of our projects were complex, yearlong engagements. These were major, mission-critical software implementations and detailed data conversions. We billed these clients both fixed fees and a lot of billable hours, but we didn’t “nickel and dime” them. I had a “no surprise rule”, if a client had a critical problem I wanted to first hear about it from my own staff, including our plan to resolve the issue. If a client ever felt the need to “call the president”, they would be impressed that I was already aware of both the issue and our plan of attack. I use to tell our customers, “if you ever get a bill from us that you think is unreasonable or a surprise, you call me immediately”! I seldom got calls, and we billed aggressively. Why no calls, the clients knew we were honest, hardworking people. The final proof of my happy-client story is that over the years we changed our terms of sale to be “payment by ACH – Debit by the 15th”. Meaning that we emailed bills to clients or they could download them from our web site, and on the 15th of the month we would reach into their bank account and pay ourselves for the entire amount of the invoice. Almost 50% of our cash flow came from ACH payments. We carried almost no accounts receivable. How many businesses could implement this program? You can if you have clients that trust you!

Perfect Attendance – The “Carriers”.  Many companies have “sick days” and the employees look at them as another form of “vacation days”. Have you heard, I think I’ll take a sick day today? Probably not sick, just needs some personal time off.  We didn’t have “sick” days, if you were sick, stay home. Yes, if you totally abused the policy the manager would come talk to you. We did provide a generous vacation policy. The costs to a business of employees being out “sick” can be pretty substantial. So, we invented the Perfect Attendance Club. If you had perfect attendance for the quarter you’d get a free lunch with the president in a conference room at one of the offices. The 2nd consecutive quarter the lunch got a little fancier, the 3rd quarter, we’d go out to a local restaurant for lunch. Now, if you had a full year of perfect attendance you would get recognized at the Annual Meeting of Staff and invited out to a very nice restaurant for an evening of “anything you wanted to order” and nice drinks. It was a major event. I use to enjoy my trips around the country doing these Perfect Attendance dinners.

The most amazing thing happened, people weren’t sick anymore! Every year we had a very high percentage of employees who made it to the Perfect Attendance Club. It was pretty much the same people every quarter and every year. We got the name “The Carriers”, we never got sick, we just “carried” the germs to all the others. In my 20 years with RainMaker I never took a sick day! If I was that sick, I’d use a vacation day, no way was I missing out on the “Club”! By the way, the costs savings to the business were substantial!

So what should a CEO’s #1 priority be? People!

They will teach, you just have to listen.

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