How To Lead: One Longtime CEO’s Letter To His Children

The Two Keys to a Successful Turnaround

Being thrown into turnaround situations is both a blessing and a curse. Such a challenge can be both intellectually and emotionally draining, but the rewards can also be quite large. I was often given assignments where the trajectory of the unit’s performance needed a large upward adjustment. The three biggest turnarounds I had were the Bryan-College Station Eagle, Gray Communications, and Jamison Door. The San Angelo Standard Times, Harte Hanks Community Newspapers in Dallas, and Garden State Newspapers also had certain similar characteristics.

My belief is that a successful change in a bad situation requires two basic steps: First, listen to what the regular employees have to say. They generally understand what needs to happen and they want to be heard. Secondly, fire somebody at or near the top who everybody knows needs to be gone but nobody thought the “new guy” would actually take that step. Firing that person does a couple of things. It gets rid of an expensive non-performing person. More importantly, it gives the new person instant credibility as one who has good judgement and who will take action and make necessary, important decisions

Any Dumb Bastard Can Fire Somebody

One of my favorite people at Harte-Hanks was Jim Lonergan, an eloquent, silver-haired gentlemen who was a most impressive figure. He was publisher of the Wichita Falls Times and Record News. He had a number of sayings, of which this was one. His view was that it is easy to off-load somebody but that it took a skilled manager to save people and get them to significantly improve their performance.

Obviously some workers are simply incapable of performing at the required level. But some people can be led, coached, and encouraged to raise their game. Most people want to do well, but some need some special attention in the form of training, more specific guidance and letting them know we believe in them. Jim’s view was that saving an employee was far more difficult than just firing them, but the rewards were worth the extra time and effort required.

I Am Just a Human Chemist

When living in Bryan-College Station, Texas, as publisher of the local paper I was invited to tour the state prison in Huntsville, about 30 miles away, by W.J. Estelle, the head of the Texas Department of Corrections. Mr. Estelle was one of the two most charismatic people I ever met. His prison housed some of the most dangerous felons. For example, not long before our visit a prisoner had taken hostages and ended up killing one or more in his escape attempt. Mr. Estelle had a high profile in the state at the time and was considered a tough but fair corrections officer. On our tour he frequently stopped to visit with inmates and seemed to enjoy a mutual respect with them. In the course of the day I asked him how he saw his job.

His reply was that he was just a human chemist, trying to put the right people in the right situations so they could function competently and effectively together as a team to run a model prison system. Although a subsequent federal lawsuit by an inmate precipitated a federal judge’s essentially fundamentally changing the way the system was run and caused the departure of Mr. Estelle, his understanding of his role has always been an important one to me.

Are You a Salesperson or a Consultant?

“Maybe I made your ad too goddamn big!” This was another Jim Lonergan statement. Newspaper advertisers would occasionally say their ads didn’t work and blame the newspaper. Ad sales people could be stymied and not know how to respond. Jim’s answer was the phrase above and he would cite a one inch by one column ad that ran in newspapers nationwide for years that simply said: “Feet Hurt?” and then sold a salve that helped relieve pain. The ad had been successful because it communicated a simple message briefly and effectively to people who had foot discomfort.

So Jim would verbally confront a complaining advertiser with that statement and say his newspaper wasn’t on trial here because he knew it worked. It could sell houses and cars and bicycles and fill jobs every day. He then worked with the advertiser to look at the items in his ad and their prices, the layout of the ad, the store hours, and the whole marketing and sales strategy of the merchant. The next step was to design an ad that would be effective in communicating the appeal and benefits of the items being marketed. The ad sales people became consultants to the businesses they served.

Jim’s approach can be used in many situations. Jamison Door sales people often hear that our doors are too expensive. In those cases when we can fully understand the client’s needs, we can frequently overcome that objection because initial cost is a small part of the total cost of owning and operating a door. When the total cost to own a door over its life is calculated including repair and maintenance, energy costs, downtime costs and other operational expenses, Jamison doors are quite inexpensive. Most of our competitors sell only one type of door. The old saying that when all you have is a hammer everything looks like a nail applies here. Because we have a line of doors we can suggest whatever product makes the most sense for the customer. Our most effective folks become consultants rather than just sales people.

Who’s Watching Your Store?

Another Jim Lonergan story told about the two furniture stores that were across the street from each other. When Store A would put up banners on his store announcing a sale on outdoor furniture, Store B would quickly respond with a similar promotion. Time would pass and Store A would have a sale on floor lamps which Store B would match. Then Store A would promote couches and Store B would respond in kind. And on and on it went. It wasn’t long before Store B went out of business.

Store B’s owner, once he had padlocked his business, walked across the street despondent and asked the owner “What did I do wrong? Every time you had a sale, I matched it. Yet you are prospering and I’m out of business. What did I do wrong?” The owner of Store A said “It’s really pretty simple. We had two people watching my store and you had nobody watching yours.” The moral is obvious: each organization must certainly be mindful of the competition but must have its own strategy and implement it well if it is to be successful.

At Jamison we are knowledgeable about our competition and our long term strategy recognizes how we fit in our industry and can take advantage of the weaknesses of others. We have had two competitors try to copy some or all of our business plan and both have failed to be successful doing so.

Next page: Why businesses must choose suppliers of all types and the power of an unconventional answer.