“Focus on the stuff that really matters.”
It might seem like an obvious statement to you, but Dave Warren
says there is more to it than meets the eye.
Warren, the co-founder, president and CEO of Energy Alloys
LLC, a company that provides an array of products and services
primarily to the oil field industry, says that in the day-to-day multi-tasking a leader has to perform, he or she can easily get bogged
down with things that don’t ultimately affect the business.
That’s why Warren makes a conscious effort to focus everyone at
Energy Alloys on the principles that drive the business: customer
service, finding new applications for core competencies and creating a culture of teamwork.
“We really talk to our team a lot about focusing on what matters
to the business and not as much on the things that don’t really
affect our ability to service the customer,” Warren says. “In business, there is a tendency to get into processes that spend a lot of
time where (the main goal) is to not impact the process in a negative way or to get a quote off a desk without really providing a solution to the customer.”
He says the foundation for a well-focused organization is communication, and it’s even more important as a business grows. If
you do not encourage the right mindset when your company is relatively small, it will be exponentially harder to change once your
company is a labyrinth of departments and your ability to adapt to
serve your customers could be hindered.
“We want to continue to develop and grow the business, and the
only way to do that is to listen to our customers and react and
respond to the things we hear from them,” he says. “So if there are
certain things that come up, if they’re not directed at the customer or
at the ability to provide solutions to the customer, they’re probably
not as important.”
Using this philosophy, Warren has grown Energy Alloys from a startup in 1995 with five employees to a $300 million operation with 350
employees and offices in five countries.
Here’s how Warren identifies and focuses on the tasks that are
essential to growing his business.
Deliver what you promise
You never want to put your business in a position where it can’t
deliver on the promises you make. Warren says that is the essential
reason why the people within a business need to know the company’s capabilities and how management wants them to employ those
capabilities to serve customers.
At Energy Alloys, Warren uses the interaction his employees have
with customers to paint a picture of how the market is changing. He
takes note of the services his customers want from their customers
and develops a strategy based on that chain of demand.
“Our service company customers are under more and more pressure from their customers to deliver enhanced technology or service capabilities,” he says. “So we want to continue to develop and
grow the business, and the only way to do that is to listen to our
customers and react and respond to the things we hear from them
that fit our core competencies or skill sets.”
For instance, Warren says that as his customers have grown internationally, they have needed faster supply service for materials and
more responsive service. Based on that, he decided to take what
Energy Alloys was already providing and build on it.
“Especially internationally, we developed additional internal
competencies that let us be more responsive, let us control capacities service to the customer and meet his needs with faster turnaround times and faster delivery,” he says. “So we took something
we were already doing and kind of built on that experience.”
Warren says a growing business should always consider new
ways to employ core competencies. It is much easier to scale what
you know your company already does well. The more prominent
risk is branching off into new areas in which your business doesn’t have a background.
He says it can be extremely damaging to a business to take on a
challenge it is ill-equipped to face. That’s why, when considering a
growth opportunity, Warren says performing an adequate amount
of due diligence is essential.
There usually isn’t a definite, across-the-board line between a
good risk and a bad risk, but he says that once you gain enough
experience with growth opportunities, you start to learn to gauge
what is an acceptable level of risk.
“If it’s something we have absolutely no experience with, we’ll
certainly take a more rigorous look at it,” Warren says. “If it’s an
extension of something we’re already involved in, then we may
look at it and ask if this is something we want to continue to develop … to go to the next stage of that particular product or service. So,
for us, the biggest line is that if it’s new, we’re probably going to be
a lot more cautious in our evaluation from a risk-return standpoint.”
When vetting a new opportunity, Warren brings people together
from all parts of the company. Anyone who can bring a different
perspective to the table is asked to join the conversation.
“We’ll look at what we know and what we don’t know,” Warren
says. “Then, we’ll kind of scale the opportunity and make a determination at that point if it’s something we want to continue to put
resources, time and energy into, and see if it makes sense for us or
not.”
If no one in the company can bring an expert’s knowledge to the
table, Warren and his managers bring in outside resources and
consultants to gain a better understanding of what the growth
opportunity would require.
“If they’re available, we like to bring in (consultants) to round out
the evaluation team,” Warren says. “We sit down and say, ‘OK, do we
have enough of an understanding of what the timeline is, what the
resources required would be, what is the risk and return within
some relative range?’”
Warren coaches his team to err on the side of caution because he
knows his company, like any, can only take on so much work. If your
company’s capacity is consumed by tasks it cannot efficiently perform, you are wasting time, labor and money.
“With every company, there is a limitation as to the amount of
capacity, energy and resources,” he says. “To divert or distract that
capacity into an area that is new or developmental, you really have to
be rigorous and disciplined in making sure that you don’t go down
rabbit trails, that you don’t chase things that have a limited chance of
success.
“Companies can only focus on a limited number of things at a
time, so it’s very critical that you not try to focus on too many
things and end up diluting your resource pool, and end up with
less-than-adequate results in all areas.”
Adapt your vision
Forming a vision for a company isn’t terribly difficult, at least in
concept. You decide where you want to take your company in the
coming months and years, then you put it in writing and distribute
it throughout your company.
But turning that vision into something that lives in the minds of
your employees can be considerably harder.
At Energy Alloys, Warren has stood by the same vision the company has had for its 13-year existence — a vision centered on
smart growth, customer relationships and a strong company culture. But just because the basic pillars of a vision stay solid, it does-n’t mean that you never have to adapt areas of it to changing conditions.
He says it’s especially true when you broach new markets.
“The basic premises stay where they are with regard to our values, the way we want to build relationships, the kind of work environment we want to have,” he says. “But in each market you are
involved in, your customers because of their particular challenges,
you have to be adaptable within each environment.”
Warren says the leader of the business unit is the most important
bridge between the company and the market. In each of Energy
Alloys’ markets, Warren seeks out strong leaders who understand
the industry and the markets they will be serving. If he can promote someone from within who understands how Energy Alloys
does business, it’s a plus.
But he says the common denominator has to be a willingness to
adapt the company vision to the needs of the market.
“Some of the areas we do business are more open to rapid
change,” Warren says. “Some of them are in early stages of
their development, so some of their needs are different, and
they might not be totally sure of what the needs of their customers are. So there has to be a willingness to adapt the
approach and, at the same time, keep those fundamental things
fundamental.”
Warren says each customer need creates a void, and that void
will be filled — either by your company or by another.
“Every customer need that’s not being met creates a void that
will be filled, especially going into new areas,” he says. “It’s not
that you need to understand everything from Day One, but what
you want to do is at least put enough of a compelling solution
proposition in front of a customer that you start building the relationship and continue to understand those needs and ways to fill
those needs.”
Warren says an ability to adapt stems from companywide stability, which goes back to having a consistent, disciplined
approach rooted in growing with a purpose, then getting everyone involved in forming and refining that approach.
To accomplish that, he says there is no substitute for consistent
communication around your core principles.
“We have to have a consistent, cohesive voice,” Warren says.
“We want to have the same kinds of conversations with all of our
stakeholders regardless of customers, suppliers or co-workers,
whether we’re in Canada or Dubai.
“What we try to have is regular conversations among our leadership team. Then that team is encouraged to have regular conversations with their teams. We bring in the leadership team on a
fairly regular basis to have discussions that are not only around
issues but to revalidate who we are and what we are and what we
are going to be. We’re establishing corporate goals that cascade
down through the organization.”
Through those conversations, Warren asks everyone in the
organization, from the top managers to the workers on the operational floor, to identify how his or her job contributes to driving
the business forward. Energy Alloys has a numbers-based incentive program that rewards people who contribute to advancing
the company’s vision and goals.
In the end, Warren says that if someone within your company is
not helping move your company forward in the right direction,
that person isn’t helping at all.
“If someone doesn’t understand our vision and values and
they’re responsible for bringing in new employees, they’re not
going to have the same criteria in evaluating and motivating
those candidates because they’re evaluating through a different
filter,” he says.
“It’s critical that a company as a whole understands those fundamental things and speaks with one voice when it comes to
developing the business.”
HOW TO REACH: Energy Alloys LLC, www.ealloys.com