|
skip to main |
skip to sidebar
 TEC 33 member, Gary Wenzel, hosted a meeting of TEC 31 recently. TEC 31 is a new group going through the forming, storming and norming process. I asked Gary to host the meeting at his company to give the members of this new TEC group a glimpse of "the possible."
Gary Wenzel is president of Capitol Stampings Company. The plant is located at 27th Street and North Avenue in Milwaukee. Gary was part of an ownership group that purchased Capitol Stampings out of receivership in 2005. The plant was originally constructed by Steeltech in 1990. Steeltech went bust in 1999.
Capitol Stampings currently employs 85 full time workers. Most of the workers are from the neighborhood. The workers earn a family supporting wage. They have decent benefits. Their jobs, based on performance, are reasonably secure.
When Gary arrived in 2005, customers were rejecting 7000 Parts Per Million. Not good if you are trying to earn more work from existing or new customers. The people at Capitol Stampings worked to reduce bad parts to the current 500 PPM. 500 PPM is world class and low enough to garner an audience with some highly desirable OEM customers. More business followed. How did this happen? Gary explained several cultural shifts that occurred over the years at Capitol Stampings. They needed African Americans to work with Hispanics to work with Caucasians. The new management team set clear performance expectations. They started treating all employees fairly and impartially. They terminated some people who were unable to align with the new culture. The leadership team was consistent. And, they persisted when the inevitable challenges might have pushed them off course.
The "new management team" was comprised of several people from the outside, like Mike Krajna, Ron Zeronis and Scott Wise. It also included several people from the inside, like Dan Hewitt and John Willmering. Gary worked to find the right seats on the bus for this blend of the right people.
The members of TEC 31 were inspired by the blend of new technology; new and old equipment; and people....people who energized this factory on 27th and North. The place was rocking. They were making money. And, they were accomplishing a mission that had more to do with reviving a neighborhood than anyone who wasn't part of it could hope to understand. The Capitol Stampings story can be an inspiration to all of us who believe that business is one of the keys to creating "the possible." Well done to Gary Wenzel, his leadership team and the people of Capitol Stampings who are accomplishing this in-process transformation.
 I settled in to prepare for a meeting of TEC 44 last month. I intended to review the issues the group's members wanted to bring to the table and other agenda items that needed to be covered during our meeting.
As I got ready, I noted a flurry of e-mails suggesting the group had taken control of the agenda. Two members sent written copies of their "issues" to the group. One member advised he was ill and unable to attend. Two others sent their "accountabilities" from the prior meeting. Everyone sent their Z-Factor Score. I was left with very little to do.
At the TEC meeting the next day the members of TEC 44 continued to take control of the process. The group introduced a new accountability protocol. The members worked a remarkably difficult issue without much intervention from the chair. They remained after the meeting ended to discuss what they had experienced during the day.
TEC 44 had become "Armed & Dangerous." Armed & Dangerous is a concept developed by TEC Resource Specialist, Don Schmincke. Schmincke segmented TEC groups into three categories of health. The least effective segment, the "Seminar Club," almost totally relied on the leader to create value. An improvement was the "Shared Destiny" group which took a modicum of responsibility for its own performance, but continued to rely on the chair to provide value. According to Schmincke, the Armed & Dangerous group was the highest performing group, taking full responsibility for group health and effectiveness.
In addition to TEC groups, Don Schmincke's concept of group behavior applies to management teams and groups of all forms. If you are interested in an outline from Don Schmincke on how to create teams that are "Armed & Dangerous," please let me know. From a group leader's perspective, it is way less work and way more productive.
 I participated in three TEC meeting retreats with different TEC groups over the past three weeks. Each was an overnight meeting at a very nice resort. The members participating in the retreats knew each other to varying degrees. While the intended purpose of each retreat was similar, the actual outcome varied from group to group. One group secured the services of a noted outside facilitator. The agenda for this retreat was chocked full of group exercises. Pre-meeting homework was required of the participants. There was little down time. The TEC members in attendance got what they expected. Plenty of action. But not much of a retreat. I was the facilitator for the second meeting. The agenda was a bit more flexible. To be sure, this TEC group worked for the day and a half we were together. But there was sufficient "white space" during the meeting for unplanned and unstructured member interaction. An optional group activity - trap shooting - at the conclusion of the meeting, added a semi-competitive, fun event for participating members. Once again, I facilitated the third meeting. This meeting had several new TEC members in attendance. Our group activity - a canoe trip down the Wisconsin River - was planned for the afternoon of the first day of the retreat. It was not optional and created a unique environment to get to know people that dinner at a fine restaurant could simply not allow. Again, members worked during parts of the retreat, but the bonding opportunity was the key to the success of the event. Members of each group reported different degrees of satisfaction with their group retreats. The first group reported "too much stuff" on the agenda. The evening dinner for this group included a "working dinner" with a facilitated team building exercise. The fun meter was on low for this group. They got what they bargained for, but didn't totally appreciate the result. Group number two was better. But again, I allowed the agenda to become too crowded and was unable to get to everything that needed to be discussed. A special follow up meeting needed to be scheduled to address a member issue that was omitted from the proceedings. The third group got it about right. They worked. Had some fun. They got to know each other better on a beautiful sunny afternoon floating down the river. This group reported the highest member satisfaction with the event overall. Webster's defines a retreat as "a period of group withdrawal for prayer, meditation, study and instruction under a director." The corporate retreat is indeed good for the soul. The lesson learned here is to build in sufficient time for people to get know each other as people.
 Recently, a TEC member of mine promoted a bright young man to the position of General Sales Manager. The bright young man had performed well in a series of increasingly responsible positions within the company. The promotion gave him a significant opportunity in prime time. Within one month, under the direction of the new General Sales Manager, sales increased and margins improved. The second month was even better. During the third month the company achieved record sales and profits. Truth be told, after surviving the downturn in the business cycle, the company and the CEO needed a big time boost in top line revenue and Gross Profit. Unfortunately, the management style of the bright young man appeared to change after he was afforded more authority. His leadership style became directive. He created inter-department animosity with his new found command and control persona. In short, he became a bully. My TEC member had experienced bullies before. When he was about 8 years old, he recalled having to punch the neighborhood bully in the mouth to get him to go away. The bully never bothered him again. He also knew that the management style of the new General Sales Manager flew directly in the face of the team building effort on which he had been working for the past several years. The question was more sales, more margin and more money now or declaring "an intolerable." My member chose the intolerable. He told the bright young man the negative effect the intolerable behavior was having on the organization. He also told the story of the bully from his childhood. He made it clear....real clear....that this type of behavior would not be tolerated regardless of the short term gain. It was "an intolerable." The bright young man took it in stride. He said he understood. He would change his behavior. He was sure he could get the job done without the intolerable. Time will tell. TEC Resource Specialist, Pat Murray, describes the concept of intolerables in his presentation titled "Leadership...The Inside Moves." If you would like a CD copy of the presentation, please let me know. Do your people know The Intolerables?
 I was having lunch the other day at one of the trendy downtown hotel/restaurants. I was alone, sitting at the bar. A young man, probably born between 1965 and 1984, came in and asked to see the manager. The manager appeared. The two young men talked for a couple of minutes. I wasn’t intentionally eavesdropping, but I did overhear that the Xer who requested to see the manager was representing another trendy downtown hotel/restaurant. The manager, also probably born between 1965 and 1984, brought the bartender into the conversation and finished by saying something like “give him all the information he wants.” Next, the bartender, probably born after 1985, starts poking the touch screen on a near-by cash register. The Xer from the competing hotel was working from a list and asking the prices charged by drink by the trendy downtown hotel/restaurant. Grey Goose? $11.00. Check. Johnny Walker Red? $9.00. Check. Glenlivet? $13.00. Check. And on and on and on they went until they ran through the entire drink list of the trendy hotel/restaurant. Check. The 111th Congress was still seated at the time, but I doubt it repealed the Sherman Act of 1890. This was horizontal price fixing, right there in front of my Caesar Salad. Simply exchanging prices with or without intent could have been a criminal offense if the exchange of pricing information affected the prices these two competitors set. Will the Xer manager who authorized the exchange, receive pricing feedback from his trendy downtown hotel/restaurant competitor? Check. Generation X has been maligned for everything from an inability to consume enough to an arrogance that comes naturally to really smart, highly educated people. But somewhere behind these Xers was another trendy hotel/restaurant manager – a Boomer…who should have known better. Rule of thumb. It is okay to talk to your competitors. Glean as much competitive information as you are able. But never talk about prices.
 Do you know how they train hunting dogs these days? A TEC member told me the story the other day. It involves “technology.”
Well, it also involves humans….and that is where the story gets interesting.
My TEC member is an avid outdoors man and dog trainer. He uses a shock collar to assist him in the training process. A shock collar of this nature is capable, if necessary, of blasting the dog with 20,000 volts of electricity. A police issued stun gun carries 50,000 volts. You get the idea. My member has been trained extensively in training dogs and the proper use of the collar.
My TEC member tells me that some people are untrained or just plain stupid when it comes to the use of the collar. He can tell the dogs that have been mis-trained just by watching them. The dog will walk slower, with its head hung low between its shoulders. Mis-trained dogs can be very aggressive, when given the opportunity. They tend to develop all sorts of exotic diseases. They die prematurely.
My member said his dogs actually like it when he attaches the collar. The well trained dog knows it is going to go outside and hunt…run around, chase birds, have some fun.
My member told me the story because, over the past two years of a business downturn, he had the feeling of a mis-trained hunting dog with a shock collar. He did not know from where the next economic/financial/regulatory shock was coming. But he was pretty sure that the repeated blasts without warning were taking their toll on him mentally and physically. Cumulative stress is a killer.
TEC Resource Specialist James Newton has suggested the following prescription relative to relieving long term, cumulative stress.
- Eat better. Healthy food. No sugar. Simply stated…eat real food.
- Exercise very regularly. Like 6 out of 7 days a week.
- Clean up the “ankle bitters.” Finish that nagging project.
- Recreate. Newton pronounced it “re-create.” Have some fun. - Take a vacation. . On October 13th The Wall Street Journal promoted a similar approach to dealing with the effects of long term stress in an article titled “Slumping at Work? What Would Jack Do.” The Jack, in this case, was Nicklaus. Much of the article had to do with relaxation and positive visualization.
Business leaders in today’s environment may not be able to remove the shock collar entirely. There will always be weird things that happen in a highly competitive, increasingly regulated marketplace. Leaders can, however, mitigate the adverse effects of long term stress exposure. Indeed, they owe it to the people they lead. Take action. Relax.
 At the request of a TEC member, I met recently with a former business owner. Dave, the former owner, had run a successful business for nearly 30 years. He was now a former owner because he was “blindsided” over the last two.
Dave’s company was forced into bankruptcy after a series of bad decisions. One or two of these decisions might not have been fatal. A string of poor decisions, however, ended with tremendous personal loss in terms of the number of lives affected. These poor choices would have been caught by an astute mentor, a trusted advisor, an advisory board or a TEC group. Someone needed to cover Dave’s blindside like Joe Theismann needed a Michael Oher.
As the story played out, the series of some of the questionable decisions looked like this…
- Dave decided to expand aggressively heading into the downturn in the business cycle. TEC members had been advised by TEC Resource Specialists such as Brian Beaulieu to plan on a recession in 2007. The macro-economic outlook was clear, according to economist Beaulieu, three years in advance of the actual recession. TEC members prepared in advance.
- Not only did Dave take on substantial debt to finance the ill-timed expansion, he added significant fixed costs that were difficult to shed when the downturn became apparent. The balance sheet was now leveraged for the first time in years and the company was hemorrhaging cash, when hording cash was the order of the day. Once again, TEC members were being advised of the exact opposite strategy heading into the recession.
- Dave decided to change banks. Typically not the end of the world. But in this case, the change in lenders appears to have been made without appropriate due diligence. Perhaps the regulators became more inquisistive. But when sales and profits began to deteriorate, the new bank grew increasingly nervous…and aggressive.
- The new bank told Dave it would be better if he would agree to a personal loan guarantee for the preciously unsecured debt arrangement. Dave eventually agreed, even though he had significant personal assets available at the time. No TEC group on the planet would have allowed this to happen. Ever.
The end of the business story is the bank called the loan, liquidated the business and took substantially all of Dave’s personal assets to cover the personal loan guarantee. The end of the personal story is that after running a nice successful business for almost three decades, Dave was left with, quite literally, nothing. Furthermore, this basically good (business) man ended up dazed, confused and embarrassed. And it didn't have to be.
If you are running a business, the question is…”Who has your blindside?”
 I was talking with a TEC member the other day during our regular One On One. My member was feeling more inadequate than normal. CEOs are like that sometimes. He stated he really wasn’t a very good manager. He was trained as an engineer and liked engineering very much. This managing stuff was very difficult for him. He wasn’t trained in it, wasn’t good at it and didn’t expect much in terms of improved performance as a result.
We talked about the role of managers. Among other position objectives, managers are required to organize the work, staff the organization and train the workers. While CEOs are generally more interested in the “leadership component” of being the Chief Executive, managing necessarily comes into the equation. This did not help my member get over his current disenchantment with his job.
Fortunately, his TEC group participated in a presentation by Resource Specialist Jim Cederna at a recent TEC meeting. Jim brings a wealth of business knowledge and some extremely practical management tools to TEC members who work with him based on his years of running substantial companies – most of them in troubled situations when he arrived.
One of the most interesting tools in Jim’s toolbox is a simple process that replaces the dreaded performance evaluation. It puts the manager in the role of coach, rather than boss. It allows the employee to set their own performance plan based on his or her understanding of what success looks like. It provides feedback to the worker. The process minimizes the need to “manage” people. No defensiveness. No hard feelings. No stress. Just coaching.
The analogy is a good one. Great coaches expect high performance, but only to the level expected by the athlete themselves. Great coaches know when to give their player a pat on the back and when to give them a kick in the butt. Coaches never take the field. All work must necessarily be done through others. Micro-managing is not possible. Effective delegation is mandatory.
My TEC member felt better about being a coach. He experienced great coaches in his earlier years as an athlete. He agreed to take some of the Jim Cederna tools and put them into practice in his company. My member felt certain his "management results" will be significantly better based on his new coaching frame of reference.
What do you think? Would you rather manage people or be a great coach? If you would like more information on the Jim Cederna coaching process, please contact me at dennis@globenational.com.
 I returned from a week’s vacation today. Relaxed, recharged and relatively ready to go back to work. We spent the week on Silver Lake in Wautoma, Wisconsin. After taking the time off, I wonder why we don’t do more of it.
We all know taking time off is healthy, both personally and professionally. The evidence is more than adequate that time away from work is good for you and good for your business. The research is also clear that CEOs are the worst offenders when it comes to “down time.”
While on vacation I had the opportunity to play golf with a TEC member who has a beautiful home on Silver Lake. He and his wife use it regularly, mostly on summer weekends. My CEO TEC member was playing relatively well through about the first 13 holes. Then, his cell phone rang. He answered it. Handled some business…it was Friday afternoon, after all. Then, he went to the tee box to hit his Big Bertha on 14.
The CEO hit his tee shot into the woods. His recovery shot hit a tree on its way out. He hit a worm burner on his third whack at it. Eventually, made eight on a relatively easy par 5.
I wondered how well the CEO might have played had that cell phone call not come in. I wondered how much of a distraction the little electronic device contributed to the sense of frustration he felt after seeing a nice round of golf turn to dog do. I wondered about work-life balance and how we’re all caught up in it, in one way or another.
One final TEC principle about CEO time off. If you take your spouse, it is a vacation. If you take your kids, it’s a trip. Vacations or trips, take the time. It is good for you and your business.
 The downturn in the economy left many employees dazed, confused and mistrusting of management. With the economy working its way out of the recession, how can business leaders repair the damage done and rebuild a healthy, productive work environment? In short, how do we address the basic emotional job-security needs of our workers?
Several years ago, when a company I co-owned was dealing with some difficult labor-management issues, our attorney suggested a little book called Discipline or Disaster: Management’s Only Choice. The book outlined four principles that served us well then and apply now at every level of employment.
First, tell your people what is expected of them in terms of job performance. This rule goes well beyond the gobblygook of the classic position description. Force yourself to ask, in clear terms, do my employees know exactly what they are expected to do on the job? Metrics help.
Next, advise your people whether or not their job performance is meeting expectations. This is not the annual performance evaluation. This is direct, personal, regular, face-to-face feedback. While managers tend to avoid these potential confrontations, employees actually welcome the accountability. They want to know where they stand.
Treat all employees fairly and impartially. People know when one person is held accountable and another is given a pass. They also know that something is wrong with the system.
Finally, base your judgments on facts rather than opinions. Metrics help here, as well. But application of the principle still requires management judgment – judgment based on facts, not opinions.
As companies begin to hire once again, your best workers – those who may have been staying in a less than ideal situation out of fear – will have other options. Companies that meet the emotional job-security needs of their people will have a significant competitive advantage.
 I hate losing money. I hate it when TEC members lose money. It is even worse when reasonably bright CEOs come up clueless on where the money comes from to absorb such losses. After two years of consecutive losses, I actually had one CEO explain away the problem as “paper losses.” The ensuing conversation went something like this.
TEC Chair: Where do losses come from?
CEO: Well, our expenses exceeded our income.
TEC Chair: Okay, where does the money come from to cover these losses?
CEO: We drew down our line of credit to fund the loss. We also let some payments to our suppliers drag out.
TEC Chair: Do you intend to repay the bank? And, by the way, it would be fraud if you didn’t intend to pay them back.
CEO: Well, of course, we intend to pay the bank back. And, we’ll get our suppliers caught up as soon as we are able.
TEC Chair: So, what you’re telling me is the money that was lost is not coming from the bank or hapless suppliers. They are going to get even. So where does the money come from to pay for losses?
CEO: I guess at the end of the day, it comes from the shareholders of the corporation. You know, shareholder’s equity.
TEC Chair: Who are the shareholders of the company?
CEO: My wife and I own the company.
TEC Chair: So you are telling me the money literally came out of your pocket? Out of your wife’s checking account? Out of your kids’ college education fund? Out of your own retirement account?
CEO: Well, yes, I guess so.
TEC Chair: There is no other source. The money came out of your pocket. And, it is gone - forever. It’s not an investment, unless the loss was caused by significant depreciation charges. The money that paid for the loss is not coming back. Ever. It is forever “lost.”
CEO: I hate losses.
 ABOUT Dennis J. Ellmaurer
Dennis Ellmaurer is a management consultant working primarily as a TEC chairman, leading three CEO mastermind groups in southeastern Wisconsin. In addition to his work with TEC – The Executive Committee, Dennis does executive coaching and is president of Globe National Corporation, an advisory and consulting firm assisting owners of small businesses with Exit Strategies and Succession Planning.
Dennis has over 25 years of management experience. He started his career in business-to-business marketing and sales with a division of the $1.5 billion Reliance Electric Company. He moved to Valuation Research Corporation - an appraisal firm specializing in Mergers and Acquisitions, becoming Vice President of Business Development. In 1982, Dennis became president of a small manufacturing firm with a proprietary product line and strong distribution channel. The company evolved into a marketing and new product development concern. The firm grew aggressively, eventually selling the assets of the business to a division of Mattel Inc.
Dennis majored in Marketing and Finance, earning a Bachelor of Business Administration from the University of Wisconsin – Milwaukee. He is a past Chairman of the Legislative Committee of the Metropolitan Milwaukee Association of Commerce. Dennis serves on the advisory board of Central File, Inc.
Dennis is a member of the Vintage Sports Car Drivers Association and enjoys driving a ‘69 Corvette on sunny weekends. His direct telephone number is 414-271-5780. He may also be contacted through TEC – The Executive Committee at 800-236-9832 or via e-mail at dennis@globenational.com.
|
RSS Feed