To err is human. How well we recover — and learn — from our mistakes, however, can mark the difference between success and failure.
SBN often asks business leaders to divulge how their biggest missteps impacted their companies. Our reason for doing so is simple: Often there’s more to learn from a mistake than a success. And, for some reason, lessons learned the hard way tend to stick with us longer.
That’s why, for the second year in a row, we’re devoting our cover story to the topic of business blunders. Based on the feedback we got last year, you learned quite a bit from the stories local CEOs were willing to share with us last time around.
So read on and find out how some of the best and brightest leaders in corporate Columbus — taken from our SBN Power 100 list published in February — have learned from their mistakes.
If you own it, act like it
Business was going well in 1993 when J.F. “Jeff” Keeler, chairman and CEO of Fishel Co., decided an expansion was in order.
He acquired an Indiana company called Johnson Brothers, making it a division of Fishel but leaving it with its own operations and its own identity rather than changing its red and white trucks to Fishel’s signature yellow and making its employees Fishel “teammates.”
Keeler’s mistake: his decision not to “Fishelize” the new acquisition. It took more than five years to recover.
Over the years, Keeler has built his family business into a proven success by strictly following the Fishel culture. For 10 years prior to the merger, “teammates” had been sharing in the company’s profits — one-third before taxes, in fact. By that year, Keeler was sharing more than $700,000 with employees, who received about four weeks pay as their cash profit sharing.
“Some of my friends say, ‘Keeler, you’re crazy to be sharing that much,’ and my answer is, ‘I’m not crazy. It makes the pie bigger and there are more teammates that care about the health and the profitability and the quality of the company,'” he says.
Johnson Brothers, however, which was a 100-employee carbon copy of Fishel’s telecommunications and utility construction services, was doing well on its own. Keeler decided to leave it alone rather than change something and risk problems.
“What happened is you let it alone and it floundered. It was like a ship without a rudder,” he says, noting that the owner stayed on with the company but didn’t provide much direction after the acquisition.
“Their employees never really felt like they were Fishel teammates. And they didn’t take leadership or direction very well,” he says.
The acquisition lost money five years in a row, totaling several hundred thousand dollars.
“It took us about five years to do something about it, and basically that was to put a Fishel teammate in charge,” he says.
“We painted the equipment yellow, put (the employees) in our benefit plans and our training programs. And we made it part of Fishel Co. instead of a division of it. We changed the name and called it Team Fishel instead of Johnson Brothers,” he says.
The turnaround was almost immediate, once the employees’ attitudes changed. Profits returned within about two years.
Keeler says he learned two lessons from the experience.
“When you buy it, you really own it, and you need to integrate it into your existing business,” he says.
He’d immediately “Fishelize” any future acquisition.
That day hasn’t come yet, though, mainly because of the second lesson he learned.
“We would buy a company that would not be in the exact same business that we’re in, but that would be a specialty subcontractor with a set of skills we don’t already have,” Keeler says. “If we know how to do it, we’ll start it ourselves.
“We’ve opened an office since then in the Washington, D.C., area, and in Orlando, Denver, Houston, and we’re in the process of opening one in Tucson. We’re doing that all with homegrown, Fishelized teammates, and it’s a lot less expensive than buying into the marketplace.”
Keeping with the Fishel culture and maintaining the profit sharing practice has not only been successful for the $265 million company, it has brought personal satisfaction to Keeler.
This spring, he had what he calls “the thrill of a lifetime” when, at a quarterly meeting with 650 teammates in Phoenix, he passed out $1.3 million worth of profit-sharing checks in one hour.
“That was a new record for me,” Keeler says, “and it was a thrill to look out in the audience and see that many people that were part of the team and contributing to help make a profit.” How to reach: Jeff Keeler, 274-8100
Hire people with the right passion
Samuel Gresham Jr. will never forget the time he entrusted an employee to plan a big event for the Columbus Urban League and the caterers showed up wearing toga-esque outfits.
“I told him to go ahead and plan it, just show me the agenda and I’ll give you that freedom,” says Gresham, president and CEO of the urban league, of the young, male employee who coordinated the event about eight years ago for the league’s Center for Change and Leadership (now known as the Center for the Study of Urban Life).
“What he did is he hired the Hare Krishnas to prepare the food, and I had all these straight-laced people coming in in suits. I tend to deal with community people who are very conservative. And here we have these bald-headed people with white sheets wrapped around them serving the food. That was embarrassing. He said he had a caterer for the food. I didn’t ask to see all the details.
“I trusted him to that extent. Obviously, his expectation and his understanding of what is acceptable in a business setting, and what isn’t, was very different from mine.”
Gresham eventually fired the employee — but not just because of that incident. It was clear to him that this young man’s true passion wasn’t in event planning or public policy or even advocacy, which were the key elements of his job at the urban league, a $5.6 million organization.
“He had a master’s degree,” Gresham says. “He was great for writing papers and doing the analytical work, but he just had a quirky personality. He went off a little farther than other people would go. During staff meetings, he would quote Shakespeare. It would irritate people. We’re in here talking about how we’re losing money or struggling because we’re not meeting goals and nobody wants to hear Shakespeare.”
Gresham says this former employee is now pursuing a career in teaching literature.
“That’s probably a more fitting position for him,” he says.
Figuring out the true interests of job candidates has since become an essential element in Gresham’s hiring process at the urban league.
“The biggest mistake I make with people is I don’t find that passion,” he says. “People come in because they want a job. What I try to find out is what their passion is: What do you really like to do? What gets you upset? What makes your juices flow? I try to make sure what they’re applying for is really what they want to do.”
That’s why Gresham’s screening process also includes multiple interviews.
“I won’t hire a candidate unless I’ve met with them three times,” he says. “Once in the morning, early, to see if they’re going to be on time. Why? A 10 o’clock meeting is not hard. A 7 o’clock meeting is hard.”
The second meeting is always over lunch, to see how they handle discussing business during a meal.
“If you set them down to do a deal and they eat like a pig and they chew with their mouth open and they don’t know how to use the napkin, people say, ‘Yuck,'” Gresham explains.
The third meeting involves making a presentation to Gresham on a topic he tells the candidate to research.
“A lot of people get upset because they don’t think they should have to do that,” he says.
But it shows Gresham the candidate’s drive, research skills and analytical abilities — along with his or her composure in making a presentation.
Besides, Gresham adds, job candidates can put on a happy, polite demeanor the first couple times you meet them, but by the third time, they’ve let down their guard.
“You see things in that person they can’t hide anymore,” he says.
Another screening tool he uses to help identify the true abilities and interests of potential hires is to ask them about the last book they read or movie they saw. That, he says, can offer some interesting insights.
Gresham uses some of the same techniques with the league’s 65 employees to make sure their jobs continue to be well matched to their interests.
“I manage by walking around,” he says. “That’s when I pick up most of my information about what’s going on with people. They don’t have to tell you. You know just by being around them. If they’re unhappy, they’re not going to be productive.”
For example, he once had an administrative assistant who outgrew the position.
“I moved her to senior vice president of development, and she’s flourishing,” he says. “You just have to figure out what their passion is.” How to reach: Samuel Gresham Jr., 257-6300 or [email protected]
Find your true identity
Ask Sandy Harbrecht about her biggest business mistake and the conversation quickly turns to regrets: about not being bold enough or tough enough; about seeing her gender as a hurdle to overcome in the business world; about not publicizing her company’s accomplishments aggressively.
But the more she talks through the challenges she’s faced in the past 15 years as president of Paul Werth Associates, the more her regrets begin to center around one specific oversight, which — if not pointed out to her by a couple astute clients — might have left her company floundering in the midst of a serious identity crisis.
Harbrecht cannot pinpoint when the real problem began — and that, in itself, reveals the potential gravity of the situation. She only knows that about eight or 10 years ago, she suddenly realized her firm had gone off in a direction that more closely resembled consulting than public relations — and nobody seemed to know it.
“It was a natural evolution for us to move the company into a consulting and strategic organization,” she says, noting that her firm even developed a specific research model to help clients more thoroughly explore what their real internal and external communication issues were and how to best address each of them. “But we really didn’t talk about the model or let the marketplace know we had a particular point of view.”
Because of that, corporations were still coming to Paul Werth for brochure and other typical mainstay PR services. That wasn’t the kind of work Harbrecht wanted to do anymore.
“We’re really much more of a business adviser,” she says.
Still, she had trouble turning those jobs away. Her inability to do so fed the misconception that Paul Werth was still a traditional public relations firm.
Fortunately, her clients soon realized the change and began pointing it out to Harbrecht.
“Our clients would say, ‘I didn’t know you did that,’ or ‘You’re more of a management consultant,’ or — How did he put it? — ‘Meeting with you once a month, I don’t need a psychiatrist.’ That’s when it really became clear to me that we were different,” she says.
“Because it came so naturally, I didn’t realize it. It didn’t feel like a value. It took a few clients to discover it for me.”
Yet even after the realization struck her, “I still was reluctant to promote it,” she says.
It’s the old story of the cobbler’s children who have no shoes. Harbrecht always put promoting her firm at the bottom of her list. Her clients took priority.
“Here we had something unique and, if our clients had something unique, we’d tell our clients to tell the world, but we weren’t telling the world,” she says. “It definitely was hurting us.”
Although Harbrecht says, “It took some courage to say we’re different,” she also acknowledges that not addressing her firm’s divergence from traditional PR work could’ve hurt her company even more.
That’s why Harbrecht is focusing on talking more about her company’s consulting, strategy and research work now.
“We are using case studies, which we really wouldn’t have done before,” she says. “It gave us a greater appreciation for how we are unique and how to articulate that. Now clients aren’t just coming to us for a Band-Aid solution, but for a real in-depth look at how communication can help take them to new levels of performance and success.
“Discovering all this has really changed the business — to the point that I’m not sure that we’re a PR firm anymore,” Harbrecht says. “I think we’re much more of a management consultant.”
A name change is even under consideration for the $4.84 million firm.
“We’re working on that now,” she says. “I think we’re going to change the way we describe what we do. There’s been a lot of angst over, ‘What do we call ourselves?’ But whatever we decide, it’s going to be evolutionary. I’m not going to hold a press conference and say, ‘This is our new name.’ It will simply evolve into different language.”
As part of her company’s rebirth, Harbrecht is correcting another past mistake. She’s learning it’s OK — even smart — to turn away business.
“It would’ve saved a lot of sleepless nights if I’d learned earlier to say, ‘We’re not going to take on this client,’ or ‘We’re not going to respond to this RFP.’
“It helps the whole organization to have a common sense of what we want to do and what we don’t — and to have the courage to go after what we want to do based on who we are.” How to reach: Sandy Harbrecht, 224-8114 or [email protected]
About three years ago, Tim O’Dell learned one of his biggest business lessons: Ask questions before you make assumptions about your customers.
The president of Fifth Third Bank, Central Ohio, says the bank made a critical error when it merged with State Savings Bank.
The significance of the merger wasn’t lost on Fifth Third’s Columbus area management: The bank’s assets went from $1.6 billion to $2.1 billion after State Savings came on board. What they failed to realize, O’Dell says, is how the merger would affect customers.
“The mistake we made was we didn’t realize how important it was to the State Savings customers that they retain their existing account numbers for their State Savings accounts,” he says, pointing out the bank’s well-established, long-term customers had grown accustomed to their accounts after years of loyalty.
“We asked them to change. Instead, we should’ve changed to be more accommodating to them,” he says.
He doesn’t think the bank lost customers over the mistake, but it sure started the relationship off on the wrong foot.
“We created a bit of irritation, a bit of a rub there, that could’ve been handled better,” he says. “And we heard about it.”
O’Dell won’t make the same mistake again, and Fifth Third Bancorp’s brass in Cincinnati also learned from the experience. In Fifth Third’s latest merger, this one with Old Kent — which is adding about 1 million customers to the bank — Fifth Third will be more flexible and allow customers to keep their account numbers.
Now, he’s also doing a better job of listening.
“Before we would make any changes like that, we would sit down with a sampling of our customers and get their reaction,” he says.
Every month, he personally reviews the several dozen customer survey cards received by the bank; the majority are responded to personally by the appropriate person. The cards are mailed to customers and are available at all banking centers. Retail, commercial, mortgage and general banking customers all have the opportunity to give input.
“It allows us to be able to applaud the great customer service and to address any glitches we may have in customer service,” O’Dell says.
In addition, in early 2000, the bank initiated the Community Advisory Forum, in which about a dozen representatives of the community meet quarterly with O’Dell and all bank division heads to discuss how Fifth Third can better serve the community at large.
One change put into action as a result of a suggestion from the group: a church lending specialty at the bank that provides services such as treasury management and lending for expansion. Making the community and customers a part of the process, O’Dell says, creates better support for the bank.
“The biggest mistake is assuming that we have all the answers,” O’Dell says. “If we just ask for input and do things in a collaborative effort, there’s a lot of power in that.” How to reach: Tim O’Dell, 223-3909 or timothy.o’[email protected]
Sometimes you just have to let go
When Sue Doody started Lindey’s Restaurant 20 years ago, firing unsatisfactory employees was a task she avoided at all costs.
“I think it was like severing a relationship with a family member. You felt like they were part of the group, and you were reluctant to say, ‘It’s time for you to move on,'” she says.
She wanted, after all, to run the business like a family.
“I wasn’t in the restaurant business before,” she points out. “I was a homemaker and mother of four and bought this place because I love to cook and love great food and knew how restaurants didn’t always have the best food.
“As I told all my managers: I want it run just like my house,” she says of the roughly $5 million, 120-employee business. “If you have company coming into your house, you want to do everything possible to make their stay a fun, nice, enjoyable experience and cook the best food and everything else.”
A few years into the business, she got an unexpected reaction when she fired a waitress who just wasn’t putting forth her best effort.
“She was such a wreck when she was waiting on tables, and when I let her go she came to me and was relieved. She wanted to succeed but she wanted to succeed for me and not herself. I was letting her (let) go of that tension,” Doody says. “It really wasn’t her cup of tea.”
Later, Doody fired a long-time member of her managerial staff who obviously wasn’t happy enough in the job to perform well.
In both cases, Doody had waited weeks before making her move — a decision she now realizes should’ve been made as soon as possible.
She discovered she needed to focus on hiring and keeping staff who would buy into the theory of how she wanted the business run and how she wanted the customers treated. Others would simply have to go. Doody couldn’t risk the possibility that guests would be reluctant to come back because they had an experience with an employee who wasn’t congenial.
Still, for a time, she had to adjust to the idea.
“It was hard because I build up a good relationship with my employees, I think, and try to be interested in their personal lives as well as their lives at work and their best development,” she says. “It’s hard because you’re kind of torn, but you feel like you’re doing the best thing for yourself as well as for them — but change is tough.”
Doody always had a general manager who took care of hiring at the restaurant, but now she’s added even more levels of scrutiny.
“Now we screen candidates much more carefully,” she says, adding that she typically does not hire people who are going into food service for the first time.
In addition, several people, rather than just one manager and Doody, now interview candidates, and there’s an orientation period when Lindey’s management can find out more about the employee and the employee can learn more about the business.
“It works from both sides,” Doody says. “If they aren’t going to be happy here, then it’s not going to be good for us or them.” How to reach: Sue Doody, 228-4343
Nancy Byron ([email protected]) is editor of SBN Magazine in Columbus. Joan Slattery Wall ([email protected]) is associate editor.