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Building a first-rate management team.

"Why would anyone that good want to work for me?" Sound familiar? It's a common lament among thousands of emerging businesses struggling to snare contracts, meet tough deadlines and break new barriers without the caliber of employees they really need to get the job done. Unfortunately, for most entrepreneurs identifying, wooing and training top-notch talent is not a priority. Overwhelmed by keeping the business afloat, harried business owners often neglect to hone in on the most important element of a successful business-human capital.

That's why smart entrepreneurs are taking a cold hard look at their management teams. And that's true for businesses with family members or nonfamily members in the top slots. Companies in business for the long haul must learn to play the human resources game very seriously. That means investing the time to plan for growth and longevity, and recruiting and developing managers smart enough and skilled enough to help power the company through the '90s and into the 21st century.

For Cecil B. Willis Sr., founder and CEO of Peninsula Pontiac-Oldsmobile in Torrance, Calif., putting people first is exactly how he built his dealership into a $92.9 million BE AUTO 100 company. When Willis opened his auto store in 1979, identifying experienced employees was critical to his plans for growth over the next decade. Since then, every new employee gets a position profile that clearly outlines his or her job duties, expectations and performance indicators. "I personally meet with each new hire after his first few days on the job to discuss the company's philosophy and to make sure he's being treated right and is feeling at home.

Samuel J. Metters, PhD., president and CEO of Metters Industries Inc., a $26.8 McLean, Va-based systems engineering research and development firm, offers ongoing training for his engineers and managers. In fact all new first-line managers must attend two weeks of training at company headquarters, before takin gon managerial duties. There, everything about the company's management structure and philosophy is discussed and explained, from company policies and budgets to how to participate in bid proposals.

Although neither man is ready to throw in the towel just yet, both Willis and Metters have addressed the somewhat touchy issue of succession planning. Maybe it's easier for these CEOs because both have adult daughters in the business, poised, trained and ready to take over once their dads decide to slow down. For emerging businesses without a family base, succession planning is equally important and, unfortunately, equally as touchy.

Like Willis and Metters seem to understand, any company planning to progress into the 21st century intac must first take inventory of the following essential management issues:

* Does the CEO think like an entrepreneur or an executive-incharge?

* Is there a clear corporate vision?

* Does the company have a well-trained, enthusiastic work force?

* Does the company have fair and equitable written policies?

* Is there an ongoing succession plan?

* Is the business run by the best and brightest management team the company can afford?

A recent survey by BDO Seidman in New York titled the "Pulse of the Middle Market" reported that 39% of 2,201 mid-size business owners said "recruiting good workers" was their greatest human resource concern. (Mid-size firms have annual revenues from $2 million to $100 million.)

According to Craig Aronoff, Ph.D., a management professor and the Dinos chair of private enterprise at Kennesaw State College in Marietta, Ga., ambitious small business owners must develop a deep concern about attracting, retaining, motivating and compensating key nonfamily managers.

"Entrepreneurs always ask: 'Why would anyone that good want to work for me? "Aronoff says. "I tell them that they deserve the best managers, and that they can get them. Look around. There has never been a better time to pull in top management talent."

Aronoff is absolutely right. Now is the time to take advantage of the availability of thousands of out-of-work executives and managers looking for employment. Victims of company streamlining to improve the bottom line, many of these highly trained experienced professionals are no longer willing to continue their careers as anonymous cogs in a big corporate wheel. Instead, an increasing corps of former corporate stars are setting their sights on much smaller perations.

But recruiting is the easy part, say most small and mid-size business consultants. "The greatest obstacles to business success are attitude, modesty and misplaced concerns," Aronoff says. Getting past those obstacles starts with the the owner's vision of the business and the CEO's determination to turn that vision into reality.

The first step in building a first-rate management team is for the CEO to become a thinker, not just a doer, says Esther Crawford, director of the Small Business Center at Chicago State University. "Sometimes the 'owner' mentality limits an entrepreneur's thoughts to what has to be done to get through the day. While filling customers' orders, answering phones and paying bills may actually be what keeps the business open, a business owner must think about where these activities are supposed to lead-and what can be done to get the job done sooner or more productively."

Crawford advises entrepreneurs to heed Louis Pasteur's observation that "chance favors the prepared." Isabelle Conda, director of a self-employment training program at Chicago State's Small Business Center, tells entrepreneurs to "learn everything they can about their industry, competitors, buying trends and technologies. Read trade journals and business publications every day. Take advantage of low-cost seminars offered by the Small Business Administration, your local chamber of commere, local colleges and trade or professional associations designed to help business owners become more effective managers."

When Cecil Willis started his auto dealership, he opened his company with three experienced managers and immediately positioned his store as a quality-service provider, well before competitors jumped on the service bandwagon. Willis' commitment to quality service and belief in his employees is why his dealership sold more than 7,000 cars last year.

Recruiting For Strategic Hires

More entrepreneurs must learn to take Willis' lead--hiring experienced individuals and giving them the authority to make decisions can transform a fledgling business into a major player. Unfortunately many emerging companies go out of business trying to grow with a second-string management team leading the way. Sure money and perks are important in attracting top talent, but according to management consultants like Iris Randall, president of New Beginnings in New York City and Danbury, Conn., "experienced personnel can be lured by a grander title, greater responsibility, closer access to the CEO or a more creative or visible role in making a business grow. But even unemployed professionals are still looking for a good salary and decent pension, stock or profit-sharing package."

Although Metters Industries recruits most of its engineering talent from historically black colleges and universities, when the company needs a strategic player to head a new project or division, raiding companies such as Unisys and TRW is the only answer.

"We can't compete head-on with an IBM, but we do offer a good, industry-competitive package. We make up any differences in salary with hidden benefits such as job security, more responsibility, and more involvement in decision-making," says CEO Samuel Metters, whose company maintains and upgrades computer software and systems for the military and several private-sector clients.

Such benefits have attracted several heavy hitters to Metters. "The really good news is that once you pull in one winner, it's that much easier to attract the next one," Metters says.

At the Philadelphia Coca-Cola Bottling Co., President Ron Wilson, who came up through the ranks, generally looks for managers from within the company--often an easier and equally satisfying route for certain businesses.

"If the person shows leadership skills, is goal-oriented and aggressive, he's got a good shot at becoming a manager here," says the head of th $256 million BE 100s firm. "Once in, part of his job is to help identify new management potential, the idea being to groom a successor so he's free to move up to the next level."

Most experts agree that whether theh management talent is home-grown (developed through the ranks) or imported (hired from outside), the goal is to get the best and the brightest that money can buy.

Iris Randall also cautions CEOs to "look for someone who will be comfortable with the position, who seems excited about the prospect of working in the company and who shares the CEO's vision."

Put People Management First

How well a company manages its work force today will determine what kind of work force, including its management team, it will be able to attract. Owners who still believe in the "just be grateful you have a job" approach to management will soon suffer the consequences of high turnover and low morale. Recruitment for these types of companies is often a nightmare for the firm's personnel professionals.

Willis credits the supportive atmosphere at Peninsula for the relatively low turnoever rate of its salespeople. "When someone leaves, it's never because they felt mistreated," says Willis, whose dealership enjoys a retention rate that's three times the industry average.

Experts advise business owners to implement human resources policies as soon as they hire their first employee. In addition, the boss should set the tone of the company's corporate culture by serving as an example of how he or she wants his managers to work.

"Smart CEOs set a good example by showing up early, leaving late, respecting their own rules and policies, doing business ethically and with a smile, keeping commitments and following up to ensure customer satisfaction," Aronoff says.

Family business consulted Ed Johnson of Topeka, Kan., adds that no growth-oriented company should be without performance planning, coaching and counseling, annual evaluations, career development and reward and incentive programs in place. Johnson, whose clients include BE 100s companies, insists that managers and family members be reviewed to check just how well he or she performs these key human resources appraisals. Individuals who consistently miss the boat must be coached or removed from people-management responsibilities.

The experts also suggest that companies concerned with turnoever problems or low morale in the work force need to conduct confidential employee surveys that solicit candid comments about the firm's management policies and styles.

Growth Through Training

Answering the urgent call to prepare workers for the 21st century, American companies are beefing up executive, management and technical skills to the tune of $30 billion a year. According to a recent report from the American Society of Training and Development in Alexandria, Va., businesses purchase $9 billion worth of training from outside sources, including academic institutions, training companies and consultants, and professional, trade and labor organizations. The remaining $21 billion is invested in designing, developing and delivering in-hourse training.

But like any business practice, management training has evolved over the last decade in an almost trendlike fashion. From participatory management and quality circles in the mid-'80s to improved customer service, diversity and team-building today, companies continue to search for a magical formula to help managers manage more effectively. Why? Because companies that insist on operating with a "hire the person now, fix him later" mind-set will find themselves left behind as the competitive spirit intensifies.

Unfortunately, too often the company's top brass puts too much emphasis on the manager's business or technical expertise and not enough on his basic understanding and appreciation of people, leadership skills and the willingness to handle conflict.

"I look for a good mix of skills in my managers: 40% technical and 60% interpersonal," says Samuel Metters, whose company has 417 employees. "If the person can relate to people, then we can bring his technical skills up to speed."

At most high-tech companies such as Metters Industries, staying current in a constantly evolving industry is the only way to stay competitive. To Metters, training is really the "foundation for upward mobility" for both the company and the individual. According to Bob Kutcher, Metters' director of human resources and administration, 2.5% of Metters' yearly revenue is allocated to training and development.

"We might send a staff member to a low-cost seminar being held at a local hospital to learn about employee assistance programs. On the other end of the scale, we'll bring in a leading consultant to help us improve our technical proposals," Kutcher says.

Technical vitality for the engineering staff is extremely important at Metters. Kutcher describes a total quality management program piloted at the company's Camarillo, Calif., field office where inhouse experts conduct "brown bag" seminars during lunch or after work aimed at revitalizing technical, business and interpersonal skills. "Attendance is voluntary, but those who complete the course receive a certificate and a notation in their personnel jackets," Kutcher says.

In addition to the intensive two-week orientation and training program for first-line managers, a new executive joining the staff from the outside will start by following Samuel Metters around to learn the ropes.

Along the tour route through each function. Metters quotes the Bible to underscore his management philosophy. He uses the Scriptures to review the basic principles on which this company was founded. "This isn't a Sunday School lesson, but the Scriptures stress the importance of integrity, ethics and other values in our management duties. I believe strongly in avoiding the gray areas when doing business," Metters says.

All In The Family

A family-oriented culture often fosters a sense of camaraderie in emerging businesses, but too much family can be a turnoff both to customers and outside talent. Symptoms of the too-much family syndrome are too much family and personal business discussions on company time; too much commingling of personal expenses and business funds; too much formality in communications, creating an us-against-the-outsiders atmosphere; and too much of the family's personal interests and achievements on display.

A primary concern of outside staff members is the question of opportunity for professional growth and development. (See sidebar, "Not In The Family.") Family business consultants, like Ed Johnson of the African-American Family Business Center in Topeka, Kan., often ask their clients to imagine being the outsider working in an environment where only family members hold all the top jobs.

"Opportunities for outside managers often depend on who's hiring. If the CEO or founder has made the choice, other family members may be angered by the high-level access this person probably will enjoy. If a family member brings on a professional manager to assist him or her, that person may be pigeonholed into that handholding position," Johnson says.

"No matter who they bring aboard, families really don't want to give up any power in the business. That's why it is crucial to clearly define everyone's responsibilities and range of authority. Outsiders must know their boundaries before they begin any job. And family members must share all of the policies, procedures and unspoken practices with newcomers and each other. A company can't run on phantom rules and regulations, Johnson adds.

Take Edward G. Gardner's BE 100s family business, Soft Sheen Products Inc. Founded in Chicago in 1964, this $87.9 million hair care concern employs three siblings: Gary Gardner, president of Soft Sheen Products; Terri Gardner, president of Brainstorm Advertising and Sales Promotions, which serves Soft Sheen and other outside clients; and Guy Gardner, president of Bottlewerks, the company's bottling subsidiary. Gary's wife, Denise, is vice president of marketing. The senior Gardner is chairman of the board and his wife. Betti Ann, co-chairman.)

According to Gary Gardner, who has an MBA and a law degree, his wife and his siblings are well-trained for their positions. But the high-caliber management talent certainly doesn't stop there. The firm with a staff of 537, also employs 23 African-American MBAs heading various brands and functions throughout the company.

"Since 1983, we have put a premium on recruiting experienced managers to help us put our systematic brand management program in place. Right now we have nine different brands to market with our longtime winner Care Free Curl still No. 1 and the Optimum Care products closing in at No. 2," says the 37-year-old president.

Gardner continues: "We took advantage of corporate America's ongoing streamlining to recruit some really good people. To help them make the transition from big companies, we taught them the values of an entrepreneurial business. We helped them understand that every dollar counts, and it's really important to listen to our customers and to our employees. And above all we gave them a chance to make things happen. Our top people don't have to stay behind the scenes and issue reports. In turn, we learned certain marketing, finance and management disciplines from our seasoned professionals. Without them, running nine different brands would be very difficult."

Passing The Baton

Making the transition from one generation to the next is often sensitive for entrepreneurial families. Choosing a successor is never easy, and CEO parents are certainly not willing to pass on the business to just anyone, even sons or daughters. A quick review of a few of the next generation of BE 100s CEO underscores the belief that it will take more than bootstraps to keep these businesses growing. (See "Dynasties" in this issue.)

Linda Johnson Rice has contributed to her father's $261.4 million BE 100s company, Johnson Publishing (Ebony, Jet and Fashion Fair Cosmetics) after earning a graduate degree in business. C.H. James III worked for Continental Bank for two years after receiving his MBA. Now he runs the oldest company on the BE 100s, C.H. James & Co, a wholesale food distribution started by his great-grandfather in 1883. (See "109 Years Old And Going Strong" in this issue.)

According to Aronoff, the successor should be familiar with each function of the business such as finance, marketing and production, before taking the top post. "The current leader should delegate more and more specific, concrete authority as time goes on. For example, this year, the successor will have authority for sales and marketing. In two years, add responsibility for production or operations."

Thirty-four-year-old Kim Metters began as an administrative assistant when she joined her father's company three years ago. Now the former medical student is senior vice president of corporate affairs, where she oversees finances and hiring and evaluates company programs and policies. Kim frequently accompanies her dad to client meetings and works closely with him and other kep players on special assignments. Her father figures she'll be ready to assume leadership in the next two or three years.

Keenly aware of being the boss' daughter, Kim works hard to earn the respect of her coworkers. "As a woman in a male-dominated company, I had to develop a thick skin. Not everyone is ready for a woman CEO."

Auto dealer Cecil Willis of Peninsula, Calif., has spent the past 12 years grooming his daughter, Tamara Willis-Parker. By working her way through every operation and receiving highly specialized dealership training from General Motors, Willis-Parker, now general fleet sales manager, has become knowledgeable about every aspect of the business and has been approved by Pontiac-Oldsmobile to be Willis' successor.

Succession planning is certainly not for multimillion-dollar enterprises only. Any business that wants to thrive beyond the founder must put a plan of action in place.

Carl Sharif, founder of Alpha Presentations Inc. in Newark, N.J., is not taking any chances on the future of his 8-year-old graphic design and public relations firm. Sharif is setting his sights on grooming his newest employee, his son, Eric P. Dawson, 29 a former graphic designer who worked for the City of Newark. Serving as an account executive for Alpha, Dawson has already started taking over more of his dad's design and marketing duties, freeing Sharif to explore new video technological avenues. "Eric has been great. He has a highly acute sense of what the client wants," Sharif says.

"Because Eric is a strong candidate to succeed me, I hold him to a tougher standard than the other employees. I press him hard, evaluate him strictly--but I listen to his ideas. The ultimate success of the business, at this point, depends on what he knows, how well he knows it, and with what tenacity he applies it," Sharif says he would consider an outside person to manage Alpha, which did $750,000 in business last year, if that person were an outstanding candidate. "However, I have Eric and six other children, seven grandchilren and lots of brothers and sisters. So, I'm sure we can keep this thing in the family."

Before making any decisions about the next CEO advises Roger Fritz, an organization development consultant in Naperville, Ill., parents should assign a mentor to the heir apparent. "However," he explains, "families must be impartial enough to fairly judge the mentor's recommendations. It may be that the designated successor isn't the best person for the top spot. The final decision should be based on what's ultimately best for the business."

For more information on management training programs and seminars designed specificaly for small and mid-size businesses contact: The American Management Association in New York (212-903-8219) or the American Society for Training and Development in Alexandria, Va. (703-683-8183).
COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Ayres-Williams, Roz
Publication:Black Enterprise
Date:Jun 1, 1992
Words:3502
Previous Article:Quality pays off.
Next Article:Dynasties.
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