View from the Top

I invest a good percentage of my time in three different Executive Networking Groups. On a monthly basis I participate in a group with Renaissance Executive Forums (REF) here in the Tampa area. Then a couple of times a year I travel to participate in the Chief Executive Network (CEN).  And on the second Thursday of every month, I have a breakfast meeting with the CEO Council of Tampa Bay (CTB). All three groups are different and I get different value out of each one of them.

In REF it’s a pretty steady consistent group of 12 of us, all CEO’s and almost all company owners. We’ve gotten together for years and know each other’s businesses pretty well. We’re a very diverse group too – just a couple of manufacturers, some Distribution companies, Finance, Construction, etc… We share everything as a group and we get a lot of feedback and direction from each other. Many important business decisions are run by this group to “test” their validity and effectiveness before presenting them to our team at Accuform. We occasionally have a speaker or educational component, which is often helpful, but make no mistake about it; this group’s value is in the members themselves. We have a good facilitator in Walt Hardenstine who keeps the group on task and who personally helps you stay committed to your goals.

My traveling group, CEN is awesome because they bring together CEO’s from all manufacturing companies. None of these companies are direct competitors with us either. The information here is so pertinent because we are all manufacturing something. While the CEN group is large, we spend several hours in breakout discussion groups. We may bring up any topic here – but it is always a lively and educational discussion. For example, at our last meeting we discussed best practices for holding a Strategic Planning Session. I come away with pages of notes from these sessions and always have at least one significant takeaway that pays for my time. Like REF, we often have a short educational component and hold ex-officio board sessions where the other members of our group act as unofficial board members who will give you advice on any topic you present to them. Talk about awesome feedback!

The third group, CTB is a larger, more established group of CEO’s in and around the Tampa Bay area that get together for a breakfast, networking, and usually a high quality speaker. Last month we had Penelope Trunk speak to us on “motivating Gen-Y employees”. This group, by contrast to CEN, has very few manufacturers, but has ton of valuable business experience to share. We have CEO’s from companies that are $5 million to $5 billion in the same room and they are all open to exchanging ideas. 

So here are my top 5 reasons why you need to belong to 1 or more of these types of groups:

1. Networking. You get to know hundreds of executives who are facing similar challenges to yours. And by the way, do you think there’s a chance they may need some of what you sell sometime? 
2. Education. This is an inexpensive and time efficient way to download some of today’s best and current business trends.
3. Resources. Your group can be an effective resource even when you’re not at a meeting.  For example, I am able to send an email to all of our members and ask for advice, suggestions, and comments on any subject you could imagine.
4. Leadership. You’ll get a chance to witness great leadership up close.
5. Relationships. The members of these groups are not just people I see at a business meeting. These are my friends as well. We play golf, go to sporting events and have dinners together. Without these groups I would have never had these relationships.

At Accuform, we’re focused because we have a clear mission, but we’re even more focused because our mission is supported by our clearly defined values. 

They haven’t always been written down or perfectly clear – in fact our executive leadership group put them to paper only a few years ago, but they have always been the values that we used to lead the business; even though we didn’t have them written down. You’ve got to decide what’s important. People who have heard me speak, know that Accuform values our employees FIRST, our customers SECOND, and our shareholders LAST. In most companies that order is reversed. Sure, you hear people say “our customers come first”, or “the customer is always right”, but when it comes to crunch time – company policies get in the way of putting the customer first. And, after all, company policies are created to protect the bottom line for the shareholders.

At Accuform, our philosophy has always been to take care of our employees, empower them, and give them the tools to be happy about where they work. Only happy employees will take care of customers, and happy customers will take care of shareholders. Our main tool we give our employees? The NO RULES book. When it comes to making a customer happy there are no rules.

Our values are built around four main areas as outlined below:

1.       Experience – best summed up by “We understand it is the goal to create a WOW experience for our customers”.   The whole experience of working with Accuform should be a pleasant one, and not one that makes you shake your head in disbelief.

2.       Opportunity – best summed up by “We earn our business everyday through a VOLUNTARY exchange with our customers”. Accuform associates recognize that every day we have an opportunity to be the best supplier our customers work with but that we have to work hard to earn that right.

3.       People – best summed up by “We act with honesty and integrity in all that we do. Silence means ACCEPTANCE”. We are graced to have a wonderful staff with almost non-existent turnover. Accuform has become the “employer of choice” in our region because of the way people are treated with respect, and because of the environment that encourages education and growth – personally and professionally.

4.       Technology – best summed up by “We pursue the innovations and ideas that can change the world”. This is an unusual value, but technology is such a vital part of our culture it belongs with us. At Accuform we are not afraid to take an informed, responsible risk to embrace a technological advancement. In many areas of our company we are on the “bleeding edge” of technology – often being the first implementation of new ideas and enabling them to provide a significant ROI.

So, if you’re starting a business decide what your real mission is and then set aside the values that you won’t sway from on your road to success. It’s OK to change the mission down the road – but the values you establish and live by will become the culture of your company. Choose wisely.

I’m intrigued by what has happened in the world of pricing. At first the JC Penney ads featuring people screaming at price tags had me annoyed yet left me wondering – what is this new campaign all about? But then I realized as I recalled any recent shopping trip – does anyone ever pay full retail?

In a recent Advertising Age article Ron Johnson, (no, not my Dad) the CEO of JCP says “He found that only one in 500 items sold at full price, while 72% of revenue was derived from selling products at 50% off or more.” This phenomenon is played out in every shopping experience imaginable in the B to C marketplace. Half Off, Two for One, Buy One, get Two Free, etc…I wonder “Is it really half off or did they just inflate the selling price to two times what they really want, so they can sell it for 50% off?” Do you think that really wealthy people actually pride themselves about buying things that aren’t on sale? I do. Certain luxuries rarely go “on sale”. For example, the world’s finest hotels don’t show up on Priceline. And those coveted first class seats are always the full price – (right up until the flight is ready to leave with them empty).  And, did you ever try to negotiate the price of a Ferrari? (I haven’t – I just assume you can’t).

So it begs the question – When does it quit being about price and instead about cost, and what does it say about the companies that are willing to discount their products so low in order to sell them? 

I believe that well run companies have strategic pricing programs in place and don’t vary from them to get short term sales. The days of getting someone’s attention with a quick sale or a temporary low price are over. People don’t have time to figure out what the best price of the day is – or to shop everything. After all, if it was truly all about price I would have our buyers buy everything online where we could quickly compare dozens of sellers’ prices and go with the cheapest price. But we don’t do that because we know that the price is just part of the cost of the products we purchase. Our suppliers are too valuable to us to be swayed by a quick temporary sale here and there. We count on our suppliers to be an extension of our business – to bring us a wide variety of products, to be solutions providers, to be on time and consistent with deliveries and quality, and to break the rules when we need them broken.

That’s why we pick the companies we partner with – how about you?

Metrics are all the buzz these days in the life of a CEO. And there are companies that exist simply to bring them to your desktop in brilliant color with graphs and charts in the form of dashboards. I rarely attend a conference where there isn’t some discussion on what metrics I should be watching. And if the people that create all these metrics had their way, I suppose that's all I'd do, all day long.

But here are three important metrics I do watch every day. And they lead right to the health of any successful company.

1. SAFETY METRIC. In our company this is where everything starts. We track and measure Days Without A Recordable Incident, and Days Without a Lost Time Accident. Dan DiMicco, CEO of Nucor Steel says that, "The behaviors it takes to be safe are the exact same disciplines it takes to operate a quality organization and a profitable one too.” You see it takes discipline to be a safe company. And if you get safety right, then odds are you'll get a lot of other stuff right, too. Look at the list of America’s Safest Companies. This is pretty good company, if you're part of this elite group. As I write this, we are currently at 114 Days, but our previous record was 665 days. We’ve got a long way to go to break that record, but everyone is focused on working safely. I am confident that we have the attention and awareness as part of our company’s culture. By the way, safety is also a key part of our company’s values. You won’t attend a meeting where either my brother Dave or I don’t talk about it. Nothing is more important than safety.

2. QUALITY METRIC. You’ve got to measure this to be sure you are getting it right. And just like safety, if you don’t stay passionate about it, the quality of your products and services can slip. We have a term around here we use (not a lot) called OOPS. An OOPS is created when a customer notifies us we've shipped them something incorrectly. Our process for handling these is that the original order is pulled from our paperless system and the OOPS is documented. An email alert is triggered to our entire Executive Leadership Team as well as our Production Managers. See, too many of these and someone’s going to notice. Fortunately, I've only seen two in one day, or less -ever. This isn’t too bad, since our quality rating YTD is over 99.85% accuracy. We ship between 25,000 to 30,000 line items a month AND at least half of them are CUSTOM. Meaning, we've never made that sign before. Every associate’s pay is tied to quality, too. I believe that if you pay attention to only these two things (Safety and Quality) you will be successful, but there’s a third metric that also needs attention.

3. ON TIME PERFORMANCE METRIC. In Manufacturing, it’s called On Time performance. In distribution, it may be your Fill Rate. In the service industry, it may be your Service Level. Whatever it is, it should be a telling metric to how your company is doing and should tell you how well you are meeting your customer’s expectations. When it comes to On-Time you don’t have to exceed their expectations, just be consistent with meeting them. Be careful with this metric because if you consistently exceed the required date, you will raise expectations that you may not be able to fill down the road. At Accuform Signs, we consistently monitor and measure our ability to promise dates. As crazy as it sounds, there is a finite capacity of production that our plant can complete each and every day, but the inbound booked orders don’t flow in nearly as consistently. That's why one of the most important positions in our company is our production planning and scheduling group. They're able to route jobs to the most open line – and they have the ability to “gang” like jobs and move the production schedule around to account for spikes in booked orders. But what sets us apart is that every associate has access to the production schedule and can move up a job when they have to. That is how we create a culture of YES WE CAN in our organization.

You may have you own metrics you watch every day. If these three aren’t included, try adding them, and see how your business will excel!