It’s All About Who by Mort Mandel
We ran a business that was principled, not opportunistic, always trying to do what was best for our employees and our customers. While most businesses focused heavily on the what and the how, we put our emphasis on the who—finding the best and most passionate people, getting them in the right jobs, and motivating them to higher levels of excellence. We placed special emphasis on two core objectives: first-class leadership and disciplined execution. Early on, we learned that if you found a customer need and filled it, success would inevitably follow.
When true wealth became a by-product of our success, we did not own that wealth but rather were merely its custodians, charged with using it for worthy purposes. We were taught the joy and obligation of helping others. This has made our lives more meaningful, and had an everlasting impact on my brothers and me.
My life’s goal is to light as many candles as possible to brighten the prospects of the less fortunate in this world. I’ve been very fortunate to discover that by giving back, I could find an extraordinary amount of meaning along the way.
I owe much of my sense of self-worth to my deep commitment and immersion in the nonprofit sector.
I’ve been completely devoted to hiring and keeping extraordinary people. My belief in the power of exceptional leadership is the most important principle I follow.
It’s why I also strongly believe in the ability of a single extraordinary person to change the world.
The great institutions of the world—whether they are for-profit or nonprofit enterprises—are defined by the quality of their leadership and the people who follow those leaders.
Exceptional people are likely to produce more growth and more benefits than people who are average and will work for less.
I have to rate a candidate as an enthusiastic yes to hire him or her.
What do I look for? Five key things, in third order: Intellectual Firepower, Values, Passions, Work Ethic, and Experience.
I always put brainpower first because intellect is the most important of the raw materials we work with. From intelligence comes thoughtful analysis, asking the right questions, good judgement, and better decisions. When I interview candidates, I will often ask them to bring me through their lives. I want to know what their family history is. I want to know whether they also reached beyond their academic achievements to demonstrate some leadership potential.
What challenges did that executive overcome to get something meaningful done? How did that person apply his intelligence to the job to make something happen?
All the intelligence in the world isn’t going to help a person who lacks basic integrity and compassion for other human beings. I am looking for honesty, decency, respect, kindness, generosity, and consideration.
I want people who have been inspired by others, who are generous in giving credit to those who made a difference in their lives, I am looking for people who want to help others in need, who have demonstrated kindness and consideration to the disadvantaged. This tells me a lot about a person’s purpose in life.
Passion is the level of enthusiasm and interest in work and life that makes someone stand out above the rest.
We want people who embrace work, who understands that it’s not something you do only to earn a living, but rather something that can help define who you are in this life.
You get that from learning they worked during high school and college, whether they worked weekends, what they sacrificed at times to work instead of play. At some level, work is about sacrifice: giving up some time with your friends or your family to perform your job at the highest possible level of excellence.
We can make a compromise when it comes to experience, but we will never compressive on the first four.
I want to be as sure as possible that the person I am hiring has all of these attributes. That requires patience and work.
I asked him how we could make our company grow faster. He told me to put my best person on my biggest opportunity.
In my view, what makes institutions great is all the soft stuff, which I think is the hardest stuff in business.
You have to remove people who can’t do the job well enough and who resist efforts to improve.
The secret of building an organization filled with A’s is commitment, the will to act. You have to make it your highest priority.
Always do what is right, and always treat others the way you want to be treated.
An ethical culture starts with the person at the top and how that person lives out the values he or she teachers. How a leader lives out a commitment to ethical behavior reaches more than spoken words or printed words. It’s not what you say. It’s what you do.
I have a cardinal rule, and that is never to abandon principles.
Building a positive ethical culture starts with hiring the right people and putting values high on the list of hurdles needed to get into an organization. Every leader has to then take an active role in clearly communicating his or her ethical expectations to employees. You are only as good as your actions and your words.
Being scrupulously honest is enlighten self-interest.
Our policy is unambiguous and straightforward: we discourage all gifts, no matter how small or large. If a gift from a customer or a supplier cannot be returned graciously, it gets sent to our human resources department, which will raffle it off to our staff. We thank the givers for the intentions, but more that our corporate policy forbids us from accepting any gifts.
Mort Mandel gets his own coffee. He doesn’t expect anyone to get him coffee.
We have a lunch program here under which a local restaurant is chosen every quarter. As an employee you can order lunch at a discounted price. Part of the cost is picked up by the company, and the lunches are brought here so you don’t have to leave the building if you don’t want to.
How important it is for a leader to ask questions first, make sure he or she’s getting both sides of every story, nail down the facts, and shoot later.
I have more respect for someone who says, “I don’t know, but I’ll get back to you,” than for someone who simply wings it and answers with a guess.
Don’t be indiscriminate with information that might be subject to misinterpretation or misuse. Respect your responsibility to protect confidential information.
Never discuss your pay or anyone else’s pay with anyone except your boss.
Avoid any activities that could detract from a good business atmosphere. For example, do not drink alcoholic beverages during regular working hours, during lunch or dinner, or at any other time when the business of our company is involved.
We immediately put in the rule that alcohol would never be served at any kind of company event.
Treat each person as an individual, preserving his or her dignity and self-respect. For example, never criticize a person in front of others.
Give credit where it is due. Where approximate, put it in writing. There is no limit to what we can do as a group if we don’t care who gets the credit.
Pinning the blame on a person does little in itself to solve the problem, and it may create bigger problems.
Exercise positive leadership by giving reasons for specific actions and by explaining and interpreting policies and practices.
If a person is not performing up to standard, blame yourself unless and until you have taken all steps necessary to help that person improve. It is your responsibility to help your staff develop themselves.
Evaluate people you supervise as fairly and as objectively as possible—being “protective” of them only hurts them, the company, and you.
Don’t gossip, and don’t accept gossip.
Don’t play favorites—control your actions so that they are impartial.
Recognize that only an individual’s boss can give direct orders to, or reprimand, that person.
I learned one thing: a board should ratify any agreement that is ever made in a corporate setting. Shaking hands isn’t useful unless both sides have the same values. That is a hard-earned lesson.
I was focused like a laser on hiring and retaining the best people and on achieving operational excellence by diving into the details of the business.
The lesson? The soft stuff counts. People, culture, and values bring competitive distinction. Yet almost all deals are put together on the basis of numbers, market possibilities, synergy, and the perceived benefits of scale. Too little consideration is given to people, culture, or values—when it’s those very ingredients that determine whether a deal will truly pay off over the long term.
In any organization, or in any merger, it’s often the so-called little things that make a difference. It turns out that the little things, if not well executed by the highest-quality people, aren’t little things at all.
Meet regularly with the “second- and third-level people” in the business and ask them: “What do we in top management have to know about your work, the company, and the market? What opportunities do you see for Premier? Where do you see dangers and vulnerabilities? And altogether what questions do you want to ask us? What ideas do you want us to think about?”
The ideas was to meet and greet the rank and file in a plant or office before you would meet with the management.
If you’re not in the trenches often enough, you’ll never be able to get execution exactly right.
Take an inventory of our top twenty people, listing what they have actually done well and in what areas they have potential or performance capacity. “The most important thing,” he wrote to me, “is to make sure that the major opportunities are staffed with your best and most productive people rather than try to worry about staffing everything perfectly—which no one has ever been able to do.”
“You try to protect your people and worry a great deal about what they cannot do,” Peter wrote. “Yet it is clear from your record that you must have an extraordinary number of people of very great performance capacity—a disproportionate number indeed. And so it might perhaps be better to ask what your people can do and simply take for granted that even a very good person rarely can do with real excellence more than one thing—one then has to supply what he lacks some other way, and one usually can do it.”
“I have learned not to allow my race horses to carry all the load they are willing to carry, simply because that very rapidly takes the last trace of ‘race horse’ out of them. You are putting a very heavy burden on very few people—maybe you have no choice just now; but watch out lest you ask more of them then they can give, or that anyone can give, for a prolonged period.”
But I wouldn’t stay in the kitchen. I’d spend fifteen minutes of each hour there, and forty-five minutes out front with the customers, making sure they were wowed. When they walk into my restaurant, I want them to see a place that is attractive, welcoming, and clean. It has to be a place where they want to be, an environment that makes them feel pampered and comfortable.
Take away the service and the atmosphere in a Starbucks, and the company would have to sell a cup for the same price as McDonald’s.
It’s not how much you do or how much you delegate. It’s what you delegate and to what extent. To my mind, you don’t ever delegate strategy or execution more than 95 percent.
In fact, it is a sound rule—both General George C. Marshall and GM’s Alfred P. Sloan, who certainly did the best job in judging men I have ever seen—never to promote a man who does things the way you, the boss, do it, never to consider it praise of a man that he is “very much like myself.” This is really condemnation. The greatest praise for a man in a large and diversified organization is “I don’t understand how he does it and couldn’t do it this way myself; but he gets splendid results.” This is a man who is doing his own work and doing it himself rather than depending on the boss and aping the boss.
Such leaders do not understand the magic combination of superior people and superior execution.
It is a leader’s job to identify the stats, personally, and to watch over them closely. Strategy and management development are the top priorities of the chief executive. Top management, he thought, must find ways to interface with lower level of the company and spend time with the brightest managers, asking them to define problems and opportunities, and learning their strengths.
Develop a feeling of responsibility in key people so that they can help draw the blueprint for the future.
How do we grow at a faster rate? Make sure all exceptional growth opportunities are led by your best people.
How do we set priorities? Find the difference between projects that build, and projects that merely eliminate sloppiness.
How can we improve people’s ability to judge other people well? Very few people can do this alone—do not expect it. Instead, install a group system to make it happen.
How do we manage a wide range of businesses? Determine the key factors for success in each business unit. This must be done by the general manager, which means this is a “must” skill in order for a manger to be a true GM.
How do we improve our approval system? Have at least two persons doing the appraisal and record a person’s performance against preset expectations.
How do we build entrepreneurship deeply into a management group? You can’t. Only top management can do this. When you find people with these interests and talents, move them into top management.
Why don’t many managers grow faster? Perhaps you keep their jobs too small and don’t distribute enough responsibility.
What is top management’s role? Deciding what business to be in; people decisions in depth; allocating capital.
How do we spot very high potential managers? Meet in structured but informal settings, with a mix of lower levels of management. Ask, “What do you think I need to know about your job; what do you see as opportunities? Problems? What should we in top management do that helps you? Hinders you?”
“You are a valued customer. We send you many shipments during the year. Most of it goes through smoothly, and we make a nice profit on it. When you need us, we’re there. And we don’t charge extra for that.”
Kill yourself for your customer.
We created a culture dedicated to service and found that there is a strong link between good employees and happy customers.
We understood that there were mainly two ways to sell things: on price or on service.
The profit margins are usually paper thin when you run a business on price. But a good margin in a business is what gives you room to pay competitive salaries and invest in improvements.
Then something that proved to be very profound happened: we decided to ask our customers, “What parts are you having trouble getting?”
Within two yers, we threw out 70 percent of the low-margin items were busy converting our product line to specialties. Our profits skyrocketed. But more important, we had hit on the idea that took us away from price. At the end of the first five years, we hired a mechanical engineer to go out and engage our customers to find out what else they were having trouble buying. He brought back dozens of ideas, and we managed to obtain our share of these hard-to-find items that would allow us to obtain above-average pricing.
We understood the power of “to find a need and fill it.” In each of our divisions, we always tried to find out what our customers wanted but had trouble getting, and sought to add those hard-to-find items to our product line.
Find a Need and Fill It and Kill Yourself for Your Customer became the two commandments of our culture. Over time, our customers became convinced that they could count on us—and that realization helped us hold both our margins and our customers.
I believe one way to differentiate what you do is to create a business model that includes superior customers services. Any organization that devotees itself to fully satisfying a customer it really in the business of exceeding expectations.
We were a company that believe in selling specialities, not commodities. We believed in solving a customer’s problem instead of just pushing product out there. We put the emphasis on service and quality. That was a key factor in the growth of our company. Our gaol included being very profitable, not pushing solely for volume.
To us, customer service is our main event. Killing ourselves for our customers was part of our path to success.
I had put together over the years strict guidelines for our investments. Two important ones: the need for transparency and the requirement that a fund be audited by a first-rate auditing firm.
The importance of policies and procedures to the pursuit of excellence in an organization. In business, written, enforceable policies provide comfort and direction. They unite all the members of the firm, allowing everyone to work in harmony with one another. Policies give you consistency.
Policies and procedures are vital if you strive for flawless execution.
Discipline is one of my best friends.
When things run like the proverbial Swiss watch, the people in the system achieve a better result.
When all is said and done, investing is a people business. So picking the right manager to invest with is all about who. The best insights come from one-on-one meetings with managers who like and trust you. Its important to understand the leaders and their motivations. So there’s a detailed set of questions we ask all investment managers: Precisely how much of your net worth is investing in the fund? Who owns equity in the firm? Have the key partners worked together before? For how long? What seniors have left the firm, and where did they go? Can we talk to them? Is there an experienced chief financial officer? Who is your independent auditor? For how long with the firm? Because of the importance we place on values and integrity, we will never invest with a manger if there are any concerns regarding character.
Principles make a difference.
Every manager I work with has a factbook. It’s a three-ring binder that breaks down a manager’s tasks into small, manageable steps. Such a factbook keeps you on top of the details and assures that there are no misunderstandings between managers and their subordinates. At its simplest level, the factbook is a tool that keeps you focused and disciplined about your work. It contains the minutes of meetings with your boss, all assignments, your progress against these assignments, and a twelve-month schedule of future meetings. If it’s put together carefully, the factbook is the place to go where your work life is both organized and crystal clear. So when I work with a colleague in regular planning sessions, typically once a month, my three-ring binder has the same tabs as he has in his. The tabs quickly get you to the minutes of the last meeting, a person’s prioritized assignments, and an update on what he’s accomplished since our last session. Each task stays on that assignment list until complete. Nothing is forgotten. That makes it easy to focus on the important things and never lose your place. Every assignment is there in black and white, staring at the person who is response for getting it done. He can’t forget about it. Just as important, the boss can’t forget about it, either. Too often, that’s exactly what happens.
Every business is fairly complicated system. If you’re leading an organization and seeking flawless execution in pursuit of excellence, the best way to stay on top of all the details is to have a clear accounting of them. The system reminds you of what’s important. It also imposes accountability on the boss and the subordinate to get things done.
A factbook can take away excuses. Most, the factbook can be the place where the details of your work are made the focus of how you do your work.
As the leader, I believe that typically you get what you inspect, not what you expect.
When I have meetings with people, I want a recap immediately after.
I believe in working shoulder to shoulder with my subordinates. I believe I’m their “partner.” I can’t be a true partner to them if I don’t know enough about what they do and how they do it. At the same time, the CEO’s challenge is to permit creativity and encourage the team to openly disagree when they believe another solution might be better.
Business is mainly about taking advantage of opportunities.
If you buy something of value, such as a painting by an established artist, or even a business, it’s okay to overpay a little if what you might get out of it is a lot. It can be much more painful to let it get away from you.
If I were running a company whose success was based on technology. I’d be scouring the market for acquisitions that built on our existing technology so as to extend and strengthen our current market position.
Undermanaged companies appeal to me. If you can improve the operations of an organization that has been poorly managed, you know you can make a difference. It’s the path towards taking an ordinary business and turning it into something extraordinary. Few companies have the structured, organized systems that ensure quality execution. The potential upside there creates considerable confidence that the right buyer can get more out of the company, its people, its customers, and its products. That’s why undermanaged companies offer big opportunities for disciplined management.
Undermanaged companies are rarely fanatics about customers service.
We bought niches, not size. We took only carefully calculated risks and never made a bet-the-company gamble.
Patience and understanding are crucial to getting a good deal.
Sometimes what you don’t do is more important than what you do. One thing we tended not to do was to try to consolidate a business segment by acquiring bolt-on companies. Putting competitors in the same business together is fraught with problems that can take years to overcome. If you buy a company that already has a strong market position, you should be able to grow the business from that solid base.
The most important part of making a deal successful is culture. Many mergers and acquisitions never realize their full potential because the cultures of the two companies fail to mesh. One company tends to suffocate the other. Once we bought a company, we tired to learn everything we could about the people who worked there. We didn’t want to cut the brains and heart out of the company. Instead, we spent months getting to know the top people. We would identify the A’s, B’s, and C’s during that time, and we would create a plan to keep the A’s, move around the B’s, and get the C’s out. You can’t do this overnight. It takes time and patience to get it right.
I learned what would become important to my ability to lead: to allow a group to come up with and help shape the ideas, not to personally dominate. If people feel ownership, there will be a better result. Involvement leads to understanding, and understanding leads to commitment. When everyone is given a chance to engage and participate, the result is inevitably improved. Working together, you end up with a stronger, better result than you could ever achieve on your own. That was a transformative leadership experience for me.
Living a life of meaning is one of the greatest gifts you can give to yourself. It’s a way to achieve major fulfillment.
Three principles in the corporate world—respect for the individual, superior customer service, and the pursuit of excellence—are core values that can deliver as much impact in the social world. These ideas work in all settings. They apply to all firms that serve people, whether they are universities, hospitals, charitable organizations, or multinational corporations. They are the essence of great leadership.
The belief that each of us can make a positive and powerful difference on other people and on society. You need to believe in the power of one.
Making something of yourself must begin with a moment of truth when you firmly believe that you are in control of your life and your fate.