Street Smarts

by Norm Brodsky

  Meanwhile, my accounting department did a complete turnaround. Before, I could never get enough information when I wanted it. Afterward, I would get more than I needed—from the same people. I’d always blamed the head of the department for the problem, but it turned out that I was the real culprit. She reported to me. Al she needed was more structure and a new boss, and she became a star.

  Indeed, most of our employees thrived under the new regime. Morale was higher than ever. The reason was obvious: People wanted structure.

  They wanted to know what the rules are, and they wanted the same rules applied evenhandedly across the board. They didn’t want us to deal with each case individual y, as I used to do it. They actual y worked better when they believed everybody was getting equal treatment. If you’d told me that before we started the process, I’d have said you were crazy, but I couldn’t deny what I saw with my own eyes.

  Granted, there were some exceptions. We lost our head dispatcher, for example, a guy who’d been with us for thirteen years. I felt sure he’d make it, but he couldn’t handle the changes. He just walked out one day with no warning. I was shocked. To my managers, I’m sure, the biggest surprise was that I stayed committed. They made it easier for me by keeping me wel informed. I could see they were making intel igent decisions—

  maybe not the ones I’d have made, but intel igent ones nevertheless.

  And in the end, there was a big payoff. As time went along and I gained confidence, I had the satisfaction of knowing that my business was in good hands and would continue to grow without my direct involvement. As a result, I had the freedom to do the things I loved and to live the kind of life I wanted. I can’t imagine a better reward.

  The Bottom Line

  Point One: As close as you may be to your employees, neither you nor they should forget that it’s a business relationship and needs to be treated as such.

  Point Two: If you, like most entrepreneurs, prefer sel ing to managing, remember that you can hire other people to do management. You don’t have to do it yourself.

  Point Three: The way to deal with employee theft is to improve your systems, not to stop trusting people.

  Point Four: When the time comes for you to step aside and turn day-to-day operations over to your managers, get someone you trust to help you with the transition, and find other ways that you can contribute to the business.

  CHAPTER THIRTEEN

  The One Thing You Can’t Delegate

  It goes without saying that great employees are a blessing to any boss and any company, and I feel as though I’ve been more blessed than most in that regard. I certainly wouldn’t have had the business success I’ve enjoyed, or the wonderful life I’ve led, without the extraordinary people who work for our companies. It took me quite a while to put the team together. When I started my first business, I knew I wanted to have a great team, and I thought that assembling one was a fairly straightforward process. You just had to hire the best people and then take care of them—pay them wel , provide good benefits, offer various perks, whatever.

  But like many ideas I had back then, that one proved to be an il usion. For openers, I discovered it’s very hard to tel in advance who the best people real y are. After making more hiring mistakes than I can count, I came to realize that no matter how sharp your instincts are, no matter how many people you have interview each candidate, no matter how diligently you fol ow up with reference cal s, you simply never know how an individual wil do on the job until he or she is actual y working for you. Some of the most promising candidates we hired turned out to be duds. Then again, the president of CitiStorage is a guy who nobody thought would last when he first started working for me.

  That’s the rule, not the exception. More often than not, I’ve learned, first-rate employees turn up unexpectedly. Al you can do is to make your best guess in hiring people and then give them a chance to perform. Some wil disappoint you, and some wil exceed your expectations. Either way, it wil be months or even years before you know exactly whom you have. But I’ve also learned that assembling a great team isn’t al a matter of luck.

  The most powerful recruitment tool you have is your company’s culture, over which you have a substantial amount of control. Every day you have opportunities to shape that culture, and it’s important not to let them slip by.

  Let me tel you about Elsa the cat, who lived in one of our warehouses. Our people took care of her, and in return she helped with pest control.

  She also liked to hang out with the cat in the warehouse across the street, as we discovered one day when she showed up with a whole litter of kittens. Only then did we realize she’d been pregnant.

  Our employees loved the kittens—who doesn’t love kittens?—and many expressed interest in adopting one. We decided that, when the kittens were old enough, we’d hold a raffle to see which people would get them. In the meantime, Elsa kept the litter firmly under her control. She tolerated no interference from humans, hiding the kittens in spots around the warehouse the employees couldn’t find.

  Then one morning Elsa showed up in the warehouse office clearly distraught. She was crying the way cats do and would not be consoled.

  Obviously, something had happened to the kittens. That afternoon we received a phone cal from the records manager of a law firm that uses our services. One of our drivers had left off some boxes containing records that the firm needed. “You’ve just delivered us a box of kittens,” the records manager said.

  The word spread like wildfire through the company. Everybody wanted to know where the kittens were and what we planned to do about them. I would have sent the driver back to pick them up, but we had no way of contacting him. He was already headed home, and he didn’t have a phone in his van. From a financial standpoint, it made the most sense to leave the kittens where they were until we made our next delivery. But we’ve worked hard to build a culture based on the needs and concerns of our people, and at that moment their greatest concern was for the welfare of the kittens.

  So I decided to send another driver to pick the kittens up.

  The round-trip took about two and a half hours. By the time the driver returned, there were more than one hundred employees—plus one cat—

  gathered around the loading dock. As the box with the kittens was placed in front of their mother, everyone cheered. It was a smal event in the life of the business, but it wasn’t an insignificant one. If nothing else, it reinforced the people-oriented culture that distinguishes our company from most of our competitors.

  That culture has been by far the most important factor in our ability to build a great team over the years. To be sure, money plays a role, as do benefits, but you can’t hold on to the best people with financial incentives alone. For one thing, it’s too easy for other companies to come along and offer something better. Nobody is loyal to a compensation package. People are extremely loyal, however, to a company that they’re proud of—that competes fairly; that does right by its customers and suppliers; that gives back to its community; and that cares, real y cares, about being a great place to work. Not only wil such a culture bind your current employees to your business, but other people wil notice, and the quality of your job applicants wil rise.

  So how do you create that kind of culture? I believe there are three essential ingredients. The first is mutual trust, which requires clarity about the rules. People need to know what is expected of them and what they can expect in return. My principal rule is simple: I want my employees to give me an honest day’s work. Period. As long as they do so, it’s up to me to make sure they have jobs. That, I believe, is an employer’s primary responsibility. If people do everything you ask of them, they should be able to have confidence that you’re going to keep them employed. Without that assurance you can’t have mutual trust, and without mutual trust you can’t have a healthy culture.

  The second ingredient is appreciation for the contributions that employees make. You have to recognize that al the good things you get from the
business come as a result of the efforts of others, and you need to show your gratitude. We do that in as many ways as we can. For example, there’s our box game that provides each employee with a cash bonus whenever we hit a new milestone in the growth of the business. We also buy movie tickets in bulk and make them available at a deep discount to our employees, most of whom come from the inner city and couldn’t afford to offer their families such treats without our assistance. In addition, we have season tickets to local sports franchises—the Yankees, the Mets, and the Knicks—but instead of giving them to customers, we use them to reward employees for outstanding work.

  We have dozens of ways of showing our appreciation, and many of them are unplanned. When New York City raised subway fares from $1.50 to $2, we immediately gave everyone an additional $5 per week. And then, of course, there was the case of the missing kittens.

  The purpose of al this is to remind our employees constantly that they are valued members of a community—which is the third ingredient of a strong culture. I want people to feel that they are part of something bigger than themselves, that their work has a higher purpose. To be sure, part of that purpose is to provide excel ent service to our customers, but I don’t think that’s enough. I also want people to believe that they belong to a community, and that their community is doing good in the world.

  A few years ago, for example, we asked our employees to vote on what they wanted to do with the money we had traditional y spent on a big holiday party in December. By an overwhelming majority, they said they’d prefer to use the money to help a local charity. We set up a committee, which contacted a nearby school for autistic and mental y chal enged children about the possibility of our providing them with Christmas presents.

  The school officials were thril ed. Like most of our employees, the children came from poor areas of Brooklyn. Any gifts we gave them would, in many cases, be the only ones they’d receive.

  The teachers put together a list of the gifts that the children wanted—everything from bicycles to computers to giant toy animals. My wife, Elaine, recruited a group of employees to do the shopping. Then we set aside space in our corporate offices where our people could assemble and gift-wrap the various presents. On the appointed day, we headed off to the school with a contingent of employees from al parts and al levels of the company. There we split up to distribute the gifts and play with the children.

  What happened next was amazing. The atmosphere in the room was electric. You could see the excitement in the eyes of the children, and the pride in the faces of our employees. It dawned on me that most of our people are not in a financial position to do much charity work, and they relished the opportunity to bring some happiness into the lives of the children at the school. I did, too, but I enjoyed equal y the happiness of the employees. It was a wonderful bonding experience al around.

  Thereafter, we went back to the school every year, and the experience was always repeated. It never failed to give me a tremendous sense of fulfil ment and satisfaction. It also reminded me of the most important benefit we get from our culture: the opportunity to work with some of the finest people I’ve ever known.

  Ask Norm

  Dear Norm:

  My wife and I have been married eight years, and I love her to death. A couple of years ago, we started a consulting company, which is doing well, but the challenge of living, working, eating, playing, raising children, and sleeping together is taking a toll on both of us. It’s hard to keep business and personal considerations separate. How can spouses run a company and still maintain a great relationship?

  Rich

  Dear Rich:

  I also work with my wife, Elaine, who is our vice president of human resources. We tried working together shortly after we were married. She quit after one day. Twenty years later, she decided to give it another shot, and things have gone extremely wel . “You have to establish guidelines,” she says. “There has to be a clear division between work life and married life. You have to figure out what you can talk about and when; how you’re going to function in each role; what’s acceptable behavior and what isn’t. But that type of arrangement won’t work for everyone. I’m not sure you’ve been married long enough to pul it off. Eight years into our marriage, we would never have been able to do it. If you can’t set down clear guidelines both at work and at home and stick with them, maybe you should think about having separate businesses.”

  —Norm

  The Evolution of a Culture

  That’s the culture we have now. The culture of Perfect Courier, my first business, was very different. In the beginning, I didn’t even recognize that we were creating a culture. Entrepreneurs seldom do. The one you wind up with isn’t planned; it just happens. While everybody is focusing on something else—making sales, providing service, paying bil s, sending out invoices, and so on—a little community springs up, and it has its own unspoken customs, traditions, modes of dress and speech, and rules of behavior. By the time you become aware of it, the culture is often wel established. You can only hope that you’l like it, because it wil probably be a reflection of your personality.

  I would describe Perfect Courier’s culture as tough but fair. Back then, I was a hard-driving entrepreneur, in a big hurry to build a $100 mil ion business, and I yel ed a lot. I yel ed when people did things I considered stupid, or careless, or misguided. I yel ed when they didn’t anticipate problems I thought they should have foreseen. I yel ed when we lost an opportunity because we didn’t move quickly enough. Whenever we made a mistake that could have been avoided, I’d blow my top. Not that I was intentional y trying to make people feel bad. I was simply frustrated. I was impatient. I wanted the thing done right and done fast. Fortunately, I usual y calmed down before I did any serious damage, and I didn’t carry grudges. The storm would pass, and I’d let it go.

  People in the company, or at least those who stayed, came to accept these episodes as a fact of life. Maybe I’m naïve, but I don’t believe they held my temper against me. They realized that I almost always had cause to be upset. They also knew that it wasn’t personal. I might generate a lot of noise, but I paid them wel , treated them fairly, and didn’t make unreasonable demands. As long as they held up their end of the bargain, they knew I would hold up mine.

  And the culture at Perfect Courier reflected al that. It was hard-driving and intense, and it involved quite a bit of yel ing. People were brusque with one another. Nobody put much energy into figuring out what anybody else was feeling. The general attitude was, “We’re here to do the job, so just do it, get it right, and shut up.” Some employees thrived in that environment. They liked the intensity. They found it exhilarating. To be sure, it was important that they also shared our values. As tough as we were on ourselves and on people who crossed us, we insisted on absolute honesty, and we tried to be fair to everybody we did business with. For employees who felt comfortable in that kind of culture, Perfect Courier was a great place to work. Those who felt uncomfortable didn’t last.

  I should emphasize that none of this happened consciously. At the time, I was oblivious to the relationship between my personality and my company’s culture. I was much too focused on getting Perfect Courier as big as possible, as fast as possible, to think about such things. It was not until my wife, Elaine, joined the company in 1994—after Perfect Courier had emerged from Chapter 11, and we’d started the records storage business—that I began thinking seriously about culture, mainly because her style was so different from mine. It was, in fact, the opposite of mine.

  Where I was brusque, she was understanding. Where I tended to focus on the employees’ obligations to the company, she focused on the company’s obligations to the employees. Where I just cared about getting the work done, she wanted people to be learning and having fun as they worked.

  But I’m a pretty open-minded guy, and I always attempt to do what my wife wants, so I let her try things, even when I was skeptical that they would have an effect. It turned out that they did hav
e an effect—a huge effect. The whole atmosphere of the place began to change, and customers noticed the difference. They told us that our employees seemed happier than our competitors’ employees, that our people smiled more and went out of their way to be helpful. It didn’t take me long to conclude that CitiStorage would be better off with Elaine’s culture than with mine.

  That realization had important implications. To begin with, I had to modify my own behavior. I couldn’t change who I was, but I could make sure I didn’t undermine what Elaine was doing, first, by staying out of the way of the managers and letting them run the company on a day-to-day basis. In addition, I needed to look for opportunities to show everybody that Elaine had my ful support. For example, she introduced a bunch of games in which people would guess when we’d hit the next level of boxes stored, or they’d compete to lose weight, or they’d try to grow the most beautiful Amaryl is. I almost always took part either as a participant (weight, Amaryl is) or as an awarder of prizes (box game).

  Beyond that, it was my job as the top banana to enforce the culture, a particularly important responsibility if you have a warm, nurturing, people-friendly company. There wil always be a few doubters and malcontents who wil take every positive thing you do and turn it into a negative. They’l refuse to attend meetings. If you insist that they come, they’l act bored and distracted. Behind your back, they’l bad-mouth the company and accuse you of hypocrisy. In the worst case, they wil actively undermine you. We had a few people who were like that. We talked to them, heard them out, explained what we were doing, and urged them to get with the program. If their behavior didn’t change, I would eventual y cal them into my office and tel them I had great news: henceforward they wouldn’t have to feel so angry and miserable because they wouldn’t be working for us anymore. They were free to find a place where they’d be happier. Not only did we thereby get rid of some negative energy, but we also showed the other employees that we meant what we said.