Money Follows Excellence, by Bill Lamb (Excerpt, Chapter 2)

MONEYFOLLOWSEXCELLENCE

BILL LAMB

Butler Books

louisville

MoneyFollowsExcellence_final.indd 3 10/7/12 1:16 PM

Copyright © 2012 by Bill LambAll rights reserved

No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system,

without permission in writing from the author or his assigns.

ISBN 978-1-935497-58-5Printed in the United States of America

published by

Butler BooksP.O. Box 7311

Louisville, KY 40257phone: (502) 897-9393

fax: (502) 897-9797www.butlerbooks.com


Contents

Introduction 1

1 Money Follows Excellence 3 Mrs. Fields® Cookies 7 2 Create the Right Culture 11 Becoming an Employer of Choice 20 What It Means to Work Here 27 3 Hire the Right People and Do It Now 33 4 Forget About Being #1. Just Be the Best. 43 5 Don’t Tolerate Situational Integrity 53 6 No Excuses 59 7 Pay Attention to What Is Important 67 8 Accept Responsibility 75 The Other Type of Responsibility 81 9 40 + 20 Hours 87 10 Change the Game—Change the Rules 95 11 The Value of Teamwork 109 12 Out-Prepare And Outsell Your Competition—

Don’t Out-Price Them 117 13 Practice Creativity 127 The Morning Mix 128 14 Make Room for Mistakes 141 Thomas Alva Edison 145 Abraham Lincoln 147 15 Carve Out Time to Think 151


VI contents

16 Be a Teacher—Repay Your Mentor 157 17 Don’t Get a Job and Don’t Go to Work 163 18 Deliver Stunning Customer Service 169 Make Your Customers Feel Special 180 Identify and Kill Arrogance in Your Organization 181 Problems Can Create Opportunities 184 19 Don’t Listen Too Closely to Your Customers 191 Holiday Inn 196 Classic Prime Time Television 198

Wrap-Up 203 Bibliography 205 Author’s Bio 207


2 Create the right Culture

Every company has a culture. Culture is the way people think and act. The question each leader must ask is quite simple: is it a positive culture worth keeping and nurturing, or is it a toxic culture that stands in its own way of success? Every culture—whether it is wonderful, toxic, or something in between—has a direct bearing on the success of the company. No business can truly be a world-class organization if the culture isn’t right.

There is a tendency any time leadership changes for the new leader to toss out much of what the previous manager built and created. Ego has to be put aside long enough to recognize that the previous leader may have done a few things right, may have created a culture with good values, and parts of that culture should be retained. If you inherit a positive, vibrant culture, you have to protect it and enhance it, and many of the practices involved with changing a toxic culture can be applied to make a very good one better. But if you walk into a bad situation, you have to fix it.

I did not find a positive culture when I first joined two TV stations, WDRB-TV and WFTE-TV (now WMYO-TV), in Louisville, Kentucky, in 2002. I was immediately faced with an interesting challenge. The television stations in our company operate fairly independently without a great deal of corporate oversight. Broadcast is a small part of Block Communications, Inc.’s overall portfolio, and frankly, more attention was paid to the newspapers and the cable systems.


12 Money Follows excellence

In Louisville, the television stations our company owned generated good revenue, yet our profit margin was zero. The previous manager and his team simply spent every dollar coming into the company. Because Allan Block, the CEO, was frustrated that he could not get the local managers to reduce expenses, he decided to change managers. I was fortunate to be the one he chose to rectify the problem.

His first directive, and one he made over and over was, “You must change the culture at the stations. They have a culture of entitlement. Every manager feels entitled to spend, but no one feels compelled to return a profit to the company. You must change the culture, but it won’t be easy because this culture of entitlement has been in place for a long time.”

I won’t kid you. Changing a culture is heavy lifting and it won’t be done overnight. But there are some logical and progressive actions that can be taken which, if implemented properly, will lead to significant culture change in a shorter period of time than you might think. Culture change cannot be delegated. The leader must be the primary change agent, but must also gain support from his or her managers because the leader cannot do it alone.

The first step in culture change is to determine what kind of culture you want to have, and that is driven by the end results you hope to achieve.

Being new to the station and the company, I didn’t know exactly what was wrong with the present culture. I just knew some of the symptoms: too much spending, lax financial controls, too many managers running their own shops with little concern for the overall health of the stations, and a general lethargy.

An initial outline of ideals needed to be created that would foster behavior quite the opposite of what I could see happening. It was an idealized set of behaviors and objectives certainly, but it was a starting point. I wanted to create a culture where:

• our people trust each other and trust their managers;• we pull for each other’s success;


creAte tHe rIGHt culture 13

• we focus our energy against our competition rather than expending it internally against each other;

• we work hard toward common goals;• we share sacrifices when sacrifices are necessary;• we appreciate that our corporate shareholders are entitled

to a profit; and• we understand that we are the people who must make that

happen.

The next step in changing the culture was for me to meet with all my managers.

This initial meeting was important because even at this early stage I wanted to be as clear as I possibly could be about what change would look like. Lack of clarity can stop progress in its tracks because no one is confident about what they should do next or what their role is during this culture change. We needed to quickly move from the general, i.e. “We need to change the culture,” to the specifics of what that change might look like.

“As you can imagine, I was not brought here to maintain the status quo and I promise you that the old status quo is gone forever,” I said. “We have an obligation to return a profit to the shareholders of this company and we will do that.”

We then discussed in some detail where we appeared to be at the present time and what the new culture might look like.

Some people were excited about the new direction because they saw opportunity for themselves in the change I was promising. Some were afraid because change can be unnerving and could signal an end to their power base within the company. And others simply rolled their eyes and made it clear they could wait me out because they’d heard it all before and this just sounded like another flavor of the day for them. Those with the rolling eyeballs didn’t know it yet, but it was soon going to be “moving day” for them.

Accountability is a core principle of a healthy culture. And nothing creates accountability better than a clear plan, laid out logically and confidently. With clarity, people know what is



expected of them. Without it, they don’t see a sustainable plan worth expending their energy to support and they quickly revert to their own agendas, not the company’s. I told them that I was going to be much more hands-on than my predecessor and they would all be much more accountable than they had been in the past.

When you take over an operation that requires a change of culture, I believe you have to let everyone know that you are going to be holding the reins very tightly—that you’re going to be involved in every decision for a while. They need to know that you are engaged and serious about managing change.

Our business is small enough that I was able to tell them I would personally be approving every single expense over $200 whether it was budgeted or not. I wanted to approve all hires or ter-minations and interview all finalists for every position they were hiring, as well as approve the compensation packages they were offering. Several budgeted expenses were not approved that could be considered discretionary and therefore not vital. They needed to know that I was deadly serious about cutting expenses.

There was a need for a greater sense of urgency from them and their departments. We couldn’t afford for our journey to be a polite carriage ride on a sweet Sunday morning in the spring. It needed to be more like sitting atop a runaway stagecoach, racing frantically to stay ahead of the bad guys.

Then, we had a lunch (or dinner, depending on shift schedules) with every department or group of people in the station so I could communicate directly with every employee. Each was a similar meeting where expectations were made clear, but where we also got to know each other better. We would go around the table and each person would tell me a little bit about themselves, their interests, and their job. It was a valuable exercise to help me get to know people faster, but it was also important to listen closely for what they were reluctant to tell me. Then we talked about philosophy—much of which can be found in this book.



• I told them that together we were going to return our two stations to profitability, but it was going to take discipline, planning, and stringent attention to detail. It would require change and a different way of conducting business. Change can be difficult for some people, so I told them to be prepared.

• We were going to tear walls down between departments. No longer would each department operate like its own fiefdom, but would fully cooperate to help other departments reach their goals. Fiefdoms are not unique to the television business, by any means. Most businesses have them, but they are a mainstay in television stations. Almost every station has them, so tearing them down is difficult, and it doesn’t happen very often.

• We would improve internal communications. Every employee would be better informed about how the company was doing and what steps we were taking to return to profitability. We would start a bi-weekly newsletter and a suggestion program so we could exchange information on a regular basis.

• An employee-of-the-month program would be initiated for top performers. It would be more than a title, too. There would tangible rewards that went with the award. I wanted this to mean something to the employees and for it to be something they would actively strive for.

• Every employee was invited to come see me any time and ask me anything they felt they needed to know. In return, I promised to answer any question they asked except those pertaining to other people’s compensation. I even offered to be so transparent as to share with them our monthly financial statement if they asked. Doing so fosters inclu-



siveness, which leads to buy-in. Besides, why should the financial health of our company be a big, dark secret?

• Finally, I told them that some of them might not accept all of this because it was going to be different and tough. They were assured this was not a flavor of the week, but a sea change. Only those who “get it” and buy in would have long-term employment with us. For those who felt the need to leave, we would help them find new jobs by providing letters of recommendation. We would even make personal phone calls to potential new employers, but we needed everyone who worked at the stations to be all in.

It was an honest and fair exchange. When you lay out the ground rules clearly and emphatically, you have to monitor compliance and be prepared to enforce the rules. This will sound cold and calculated, but sometimes you need one highly visible employee to resist you early on so you can send a very clear message to everyone else. If you conduct a very visible “public execution,” you may be able to save a hundred more.

Our general sales manager (GSM) was that person. He had been the number two person in the building for years. Many people figured he pretty much ran the stations anyway. He was considered by many to be “fire proof.”

I zeroed in on him pretty quickly since my background is sales and I knew what an effective GSM should be doing. He was what I call R.O.A.D., which stands for “retired on active duty.” He delegated everything and spent a good deal of his day perusing the Wall Street Journal. When asked for a report, he would email the request to a subordinate, get the report back and simply forward her work on to me. He didn’t even pretend that he had done any work on it. He also made it clear that he didn’t really like having to answer so many of my questions. The previous general manager didn’t have a sales background, so this guy could pretty much run his own show any way he pleased. I was making him uncomfortable. He was sending



me a signal that he was going to continue to operate his department as a fiefdom on his own terms. He was definitely enjoying his buggy ride in the country, and he wasn’t interested in the exhilaration of riding on my runaway stagecoach.

One of the most important tasks a general sales manager has is managing the commercial inventory. If you price it too cheaply, you can oversell it, which is not good. If you price it too high, you can leave a bunch of it unsold. A pricing mistake either way will cost a station tens if not hundreds of thousands of dollars every month. I asked the GSM to show me what tools and systems he had in place to price the inventory. He called his national sales manager and local sales manager into the office because he had delegated the function to them. The problem was, he hadn’t trained them to do it—because he didn’t really know how to manage inventory himself—and they were not doing it well. It wasn’t their fault either.

It became clear a change had to be made quickly, but with that decision came an opportunity. This was a chance to show publicly the entire staff that no one was going to be successful resisting our cultural change. No one was going to be above our mission. And no one was going to be able to keep their fiefdom alive in this new culture.

When word spread that he had been let go, it sent shock waves through the building. At that moment, I really had everyone’s attention and they knew I was very, very serious about changing the culture in the company.

Not everyone got it immediately though. Our chief engineer was another guy who fought fiercely to maintain his personal empire. One way he did that was by withholding information. He was undeniably smart, but he believed his job security rested on being the only person in possession of certain knowledge. He wouldn’t teach his subordinates and seldom let them observe how he was fixing a technical problem. He didn’t like answering my questions and getting things approved. He thought he should be able to continue to operate independently and continue to purchase whatever he thought was necessary. He was a very smart, competent



guy and we had many discussions as I tried to turn him around and get him on the team because he could have been a big part of our future, but he was very stubborn.

One day, a couple of us were leaving the building for lunch and the chief engineer and his crew were out trimming an overgrown tree in our water garden area. I stopped for a moment to exchange pleasantries and then went on my way. When we returned an hour later, the entire tree was gone! Our chief engineer had made a unilateral decision that a healthy tree, in a downtown urban area, needed to be chopped down and disposed of. He didn’t get approval from the city first, nor did he ask me. It was his way of telling his staff that he was still making the rules, and the old culture was alive and well.

His dismissal, swift and sure, was another eye-opener to our employees. If they weren’t sure before, they were certain now that the culture was going to change. They would either get on board with it or they could take their old culture to another station.

While it is never pleasant to have to let someone go, I do subscribe to Jim Collins’s philosophy in his book Good to Great. You absolutely must get the wrong people off the bus, get the right people on the bus, and get the people in the right seats. Then you can really get things done.

It’s discouraging to good employees when they have to sit next to someone who is not able or willing to perform their job at a high enough level or who brings a lousy attitude to work every day. What’s even more discouraging is when the good employee feels management is tolerating subpar performance or attitudes. We owe it to our best and brightest to surround them with other people of the same caliber. That’s an integral element in changing a culture.

In Walter Isaacson’s biography of Apple founder Steve Jobs, it is clear Jobs saw a real danger to the culture in allowing people who were doing less than excellent work to continue to hang around.

“It’s too easy, as a team grows, to put up with a few B players, and they then attract a few more B players, and soon you will even have some C players,” Jobs said. “The Macintosh experience taught



me that A players like to work only with other A players, which means you can’t indulge B players.”

I don’t completely embrace the Jack Welch theory of identifying the bottom 10 percent of your workforce and targeting them for elimination every year through the employee appraisal process. After some time that becomes an unworkable and unsustainable strategy, but I do believe in replacing your weakest employees with better ones until you have no weak ones left. And in telling them up front you are going to do that.

At a station-wide staff meeting a few years ago, I cautioned every employee not to allow themselves to become the weakest link in their department “because to do so will leave you very vulnerable. If someone from the outside applies for work here and they are clearly superior to you, I am going to give them your job. Being the weakest link (or not) is something almost all of you can control, so if you let it happen I will still care for you as a person, but I’m not going to protect your job if you haven’t.”

Good employees actually appreciate straight talk that lays out the expectations as directly as that.

When we let the first person go and replaced her with a very competent outsider, the expected backlash didn’t happen. I actually saw morale improve and it happened for all the reasons I had hoped.

If a highly skilled person (let’s call her Jane) is sitting next to an underperforming co-worker, Jane is probably spending a good part of her time and energy helping the weaker person—sometimes even correcting or redoing the person’s work. If that continues for long after the initial training and orientation period, it can be very discouraging for Jane. But when the weak employee is replaced with someone as good as Jane is, she can now focus completely on her own work and her productivity goes up. If the new employee is better than Jane is, he or she can push Jane to be even better than she was before. That’s what we saw happen. Our employees “got” what we were doing and saw the value in it. And that’s why morale actually improved.

An effective leader must be aware of the culture that exists



within his or her company. Competently managing that culture is vital to being an effective leader because your culture is going to have a tremendous impact on your business. Either it will have a positive impact helping to create the results you desire, or it will be a toxic influence always blocking your success.

BECoMIng an EMPloyEr oF ChoICE

An “employer of choice” is a company that competitor’s employees desire to join and where employees desire to stay. Yes, it’s a place where the salaries and benefits are competitive, but it’s much more than that. It is a company well known in town or even within the industry where people are treated with respect, challenged, and recognized for their hard work. It is an organization where the best people serve as a magnet to attract more of the best people. Enthusiasm is contagious and everyone catches it at an employer of choice. Turnover is lower and positions are filled quicker at an employer of choice because there are people lined up to work there.

We made a decision early on that we were going to become an employer of choice which, when accomplished, would not only indicate that we had been successful in changing the culture, but would serve as a competitive advantage as well. An employer of choice has a clear and dynamic culture that employees can feel and articulate. Everyone feels like they are rowing in the same direction with a “we’re-in-this-thing-together” attitude.

There are at least 15 things a company must be, have, or accomplish to be considered a true employer of choice.

1. Expectations of high performance and a universal rejection of “good enough.” People want to feel that they are working on something special at an elite level (or are at least moving toward that goal). Like so many things, this attitude begins at the top, but it must go all the way through the organization.



2. Strong formal and informal communication channels reduce the need for rumors and gossip because employees have real information. Strong communication can take many forms, including a regularly published newsletter, open and honestly shared information in staff meetings, “management by walking around” (MBWA) as business guru Tom Peters espouses, a suggestion program, regularly scheduled evaluations, and an open door policy.

3. Attention to inclusiveness. Strong and constant com-munication as cited above helps employees feel included and key to the success of the company, because they are in the know. You have many great thinkers in your company and it benefits you to include as many people as possible in the thinking and planning process. When you do, it brings great satisfaction to your employees, too. And when employees feel included in the planning process, they will give you a lot more buy-in to make it work.

4. Attract and hire the best people. This is a constant process where the tough decisions to upgrade to better, more competent people are never deferred. Good people do not want to have to cover for or do the work for weaker people. Special emphasis has to be placed on the types of people you hire and whether or not they fit your culture (or the one you aspire to). Good people attract more good people. More on that in later in the chapter.

5. Emphasis on work/life balance. Employers of choice understand that work is only a part of a person’s life and balance between work and family is essential for a happy employee. Some companies allow/encourage job sharing, others let employees work from home, while still others offer childcare at work.



6. Strong foundation of ethics and trust. Employees need to know that their boss is ethically sound and completely trustworthy. If you have a talented but somewhat slippery manager working for you, you will never sit at the helm of a company that is truly an employer of choice. Likewise, you cannot tolerate deception or dishonesty from any employee regardless of how “indispensible” they may otherwise happen to be. Someone with “situational ethics” will destroy trust throughout the organization.

7. Focus on creativity and innovation allows people to stretch and dream. It creates an environment where they can freely “what if” with each other and bust the conven-tional walls down. It encourages them to think differently, to find unusual solutions to difficult problems. It gives them a whole new dimension of job satisfaction that they may not be able to get anywhere else.

8. Growth and development opportunities must be present so employees know they are never working at a dead-end job. If they do well, if they develop as you hope and demand, and if they produce as you believe they can, the quid pro quo is that they must have an opportunity to grow and develop their skills. If they desire more respon-sibilities and promotions, you must provide an avenue for them to achieve those goals.

9. Coaching and mentoring are essential. Real achievers never want to stop learning, and you must make sure they never do. You can provide formal training (either internal or external), frequent evaluations and performance reviews, role-playing, or “ride-alongs.”

10. Teamwork. Businesses are made up of many departments often responsible for diverse tasks, and although they all



may be working for a vague positive end result, the tasks may be so different individuals may not always see how the pieces fit together. There are few things that can boost moral better than to have everyone working on a very challenging task at the same time and seeing a positive result. In Chapter 11 of this book, I talk about our common task of pulling off Thunder Over Louisville, the single biggest telecast by a local TV station in the history of American television.

11. Transferable training must be part of the deal at an employer of choice. Employees must know that if they should ever leave, they will take excellent training with them provided by smart, talented mentors. They must also know that the training they are receiving in one department will somehow benefit them in securing a promotion within the company at the appropriate time.

12. Recognition and rewards are relatively inexpensive in cost but priceless in their value. Everyone likes to be singled out from time to time whether it’s just to be told they have done a good job, or to be held up in front of their peers as an example of living, breathing excellence. Financial rewards from spiffs to bonuses can and should be available to those who meet certain predetermined goals to help the company. There are a hundred ways to provide recognition or rewards. It’s important to pick a few and do them.

13. Competitive, yet sensible pay system. If you are meeting the intrinsic needs of your employees, and you’ve created an environment where they can grow both intellectually and experientially, you won’t have to pay the highest wages to retain the best people. But you shouldn’t and probably can’t be the cheapest either. Intrinsic motivation and quality of job life for your employees will take them a long way, but



good people do expect to make a fair wage. Money is still one of the key ways to “keep score.”

14. People challenge each other on a peer-to-peer level in ways that management simply can’t. Peer pressure is a powerful force and it doesn’t stop in junior high school. I’ve told my employees it is very important for them to watch those around them. We sometimes think we’re just corks bobbing along wherever the tide takes us in this economy. We may think ‘they’ may lay us off and we have no say in it. But every one of us can control our destiny to some extent. We do that by making sure everyone around us is working hard and smart. If we see someone slacking off, they could be putting our job (and our family’s income) in jeopardy, so it is appropriate to tell them to step it up. We don’t have to accept it. It’s not about employees spying on each other, but about watching for the obvious and nudging others to stay on their toes. I believe that we can all do our jobs so well that we can create more than the natural demand for our product. That alone can create job security. If we are successful, we have provided our best personal defense against layoffs and disruption of business, families, and careers.

15. People are having fun! Employees at an employer of choice simply have less artificial stress, are having more successes to enjoy, and find ways to make work fun. Debbi Fields, founder of Mrs. Fields® Cookies, says, “We combine intense work with spontaneous wackiness that keeps everybody loose and relaxed in the middle of tension.”

I believe we met the challenge our CEO put out there when he said, “You must change the culture.”

It didn’t happen overnight, but today we do have a dynamic



culture. We have very little turnover. We have talented, happy employees who want to be here and who want to contribute to something special. The term “happy employees” is subjective, but while we believed it was probably true, we tried to quantify that happiness with an anonymous employee survey in the fall of 2010. We asked our employees a series of questions, and they were given the choice to “strongly agree,” “agree,” “disagree,” or “strongly disagree.” To the question, “Based on what I know about all television stations in this market, WDRB is the best place to work,” 93 percent of our employees either “agreed” or “strongly agreed.”

A more substantive survey was sponsored by the Kentucky Chamber of Commerce and Kentucky Society for Human Resource Management, and was conducted by the law firm of Fisher & Phillips LLP in late 2011. The Fisher & Phillips website explains the project “is an initiative dedicated to identifying and recognizing Kentucky’s best employers. The selection process is based on an assessment of a company’s employee policies and procedures and the results of an internal employee survey.” Yes, they asked every one of our employees to complete an extensive (and anonymous) online survey asking how satisfied he or she was working for us. In January of 2012, the Kentucky Chamber announced their recipients and WDRB/WMYO was the only media company named one of “The Best Places to Work in Kentucky.” In fact, in their notification to us of this award, they stated, “This achievement confirms that you are indeed an employer of choice.”

A culture like this must be fiercely protected, beginning with the interview process. You do not want to let the wrong kind of person slip into the company and unravel part of that culture. It is important during the interview to see if the prospective employee’s skill sets and philosophies match the needs and culture of the company. At the same time, it is equally important for applicants to interview their prospective company to see if the organization matches up well with sensibilities and philosophies before they “hire” their next employer.



Many times when a real star walks through the door looking for employment, an employer can become enamored with the obvious qualities evident in the prospect. Often these stars will have more than one offer to choose from so, in an effort to be appealing to the prospect, the interviewer can have a well-meaning but dangerous tendency to twist or bend the true culture of the company to make the company appear to be a perfect fit with the prospect. When the prospect joins the company, they soon find that it was not exactly what they thought it was and the fit is not perfect at all. This dis-appointment can lead to an unhappy employee and eventually to more turnover as the employee leaves to seek the right cultural fit.

Younger workers in their twenties are especially fickle and have less hesitation than any generation before them to cut the line and move on to another opportunity if the current one isn’t working for them. So, what can an employer do to try to minimize this cultural misunderstanding and attract the right people who will embrace and contribute to the corporate culture?

During the interview process, when we find an applicant who we think has strong potential and to whom we may ultimately extend an offer, we give them a paper titled “What It Means to Work Here.” We try to establish from the outset who we are, the kind of company we are, what we aspire to be, and in short, the culture that is WDRB-TV and WMYO-TV. We want to establish from the beginning that we already have a culture we like, we are not interested in changing the culture that is working well for us, and the applicant needs to match up well with it or needs to know they don’t so they can move on to a company with a culture that better suits them. It is infinitely better to stop a hiring mistake dead in its tracks before it becomes a problem than to discover your mistake two or three months down the road and have to deal with it then. The following is the paper we give prospective employees.


Documents

Money Follows Excellence, by Bill Lamb (Excerpt, Chapter 2)