How the CEO Can Encourage Employees to Speak the Language of the Business

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The leaders from MultiPlan, Ares Management, Chesapeake Midstream Partners, and INOVA Diagnostics on:

How the CEO Can Encourage Employees to Speak the

Language of the BusinessMark H. Tabak

Chief Executive Officer, MultiPlan Inc.

Bruce R. Cohen Senior Partner, Ares Management

J. Mike Stice Chief Executive Officer, Chesapeake Midstream Partners

Roger Ingles Chief Executive Officer, INOVA Diagnostics Inc.

If employees are not exposed to the realities facing the business (i.e., its mission, history, financial performance, market share, challenges, etc.), they will not fully understand why they are

doing what they are doing. Without this knowledge, they will not be able to contribute effectively to the company’s growth. In order to encourage employees to “speak the language of the business,” the authors of this ExecBlueprint believe there is no such thing as providing too much information about the company. Employees who understand their companies’ strategic direction also have a clear vision of how they contribute — and what is expected. The authors recommend several strategies for enhancing employee understanding and they all begin with frequent communications via town halls, e-mail, performance reviews, and personal meetings. Further, discus-sions should not be only one way. If asked, employees can provide invaluable input on improving processes. One author probes even further: What three things would you like to see changed? What would you like me to do? What are you afraid that I’ll do? n

Action Points

I. What Employee Qualities Will Give Your Company a Competitive Edge?Although you may require specific technical or other expertise for certain jobs, your organization will excel if a majority of your employees possess particular “soft skills” that can make or break a sale. In addition to treating customers courteously, these include prioritizing effectively and relishing the challenges of solving unforeseen problems.

II. The Bottom LineEven maintaining (not advancing) your position in the marketplace requires a commitment to continuous improvement because if you’re not getting better, you’re probably losing market share. To gain a more comprehensive picture of progress, compare EBITDA, customer base, operating expenses, cash flow, etc., to past levels.

III. Must-Have Processes for Establishing and Executing Company GoalsWhile CEOs and their senior managers develop the company’s strategic plans to meet overarching goals, the plans need to be shared with the entire company to ensure that members’ efforts will be appropriately aligned. Important steps include identifying proper task sequences, assigning the right people, and assessing progress regularly.

IV. The Golden Rules for Communicating With EmployeesThe importance of sharing information may seem like a cliché, but there really is no more effective way to increase employee engagement with the business. Provide training to new hires on your company’s business model, then reach out frequently via town halls and e-mail. However, you should also plan to listen. Ask: What new ideas can they offer?

V. Essential Take-AwaysEmployees will only be able to speak the language of the business if they understand the business (i.e., its customers, products/services), and how they specifically contribute to the overall goals and mission. Involve employee teams in solving problems and share progress often. Then, make sure everyone is accountable and reward exceptional work.

Contents

About the Authors . . . . . . . . . . . . . . . . . . . . . p.2

Mark H. Tabak . . . . . . . . . . . . . . . . . . . . . . . . . p.3

Bruce R. Cohen . . . . . . . . . . . . . . . . . . . . . . . . p.6

J. Mike Stice . . . . . . . . . . . . . . . . . . . . . . . . . . p.9

Roger Ingles . . . . . . . . . . . . . . . . . . . . . . . . . p.12

Ideas to Build Upon & Action Points . . . p.14

© Books24x7, 2012 About the Authors ExecBlueprints 2

About the AuthorsMark H. TabakChief Executive Officer, MultiPlan Inc.

Bruce R. CohenSenior Partner, Ares Management

J. Mike SticeChief Executive Officer, Chesapeake Midstream Partners

Roger InglesChief Executive Officer, INOVA Diagnostics Inc.

Mark Tabak has been an executive at MultiPlan Inc., since 2000, and became its chief executive

officer in 2002. He brought to MultiPlan an 18-year track record of developing health care organizations, beginning in 1982 with HealthAmerica, where he served as President of HealthAmerica Development Corporation. He later founded Clinical Pharmaceuticals Ltd., which was merged into a division of McKesson Corporation, and sold to Ely Lilly in a multi-billion

dollar transaction, turned around Group Health Plan which posted record growth and income gains after a six-month period of rejuvenation, entered AIG into the health care market with creation of AIG Managed Care, Inc., and founded International Managed Care Advisors (IMCA) and Healthcare Capital Partners Ltd.

Early in his career Mr. Tabak served as a commissioned officer in the U.S. Public Health Service, providing policy analysis

for the Assistant Secretary for Health and Secretary of Health, Education, and Welfare. He has also served in a variety of volunteer positions including for the United Cerebral Palsy Foundation Telethon, the Democratic Congressional Campaign Committee (DCCC), and the Democratic National Committee (DNC).

Bruce R. Cohen joined Ares Management in August 2011 as a senior partner in the Real Estate

Group. Prior to joining Ares, Mr. Cohen was chairman of the board and chief executive officer for Wrightwood Capital, where he was responsible for overseeing the firm’s investment activities, portfolio management, new product development, and investor relations.

He is a member of the Urban Land Institute, the Pension Real Estate Association, the Economic Club of Chicago and the Real Estate Roundtable, where he formerly served as the co-chair of the Real Estate Capital Policy Advisory Committee and chair of the Research Committee. In addition, Mr. Cohen serves on the Board of Managers’ of Wrightwood Capital and on the Real Estate Advisory Board of the

Kellogg School of Management at Northwestern University.

J. Mike Stice is chief executive officer of Chesapeake Midstream Partners, president of Chesapeake Midstream

Development, and senior vice president of Natural Gas Projects for Chesapeake Energy. In his executive duties, Dr. Stice is responsible for overseeing Midstream-related endeavors and managing corporate natural gas projects.

Prior to joining Chesapeake, Dr. Stice held a variety of technical and managerial positions at ConocoPhillips in exploration, production, midstream, and gas marketing from May 1981 to October 2008. Dr. Stice

served as president of ConocoPhillips Qatar in Doha, Qatar, from November 2006 to October 2008, and was responsi-ble for the development, management, and construction of natural gas liquefaction and regasification (LNG) projects.

While at ConocoPhillips, he served as vice president of global gas LNG, as presi-dent of gas and power, and president of Conoco Energy Solutions, in addition to other roles in ConocoPhillips’ midstream business units. Dr. Stice also served as President of Conoco Asia Pacific Ltd, based in Singapore, and as managing director of

Conoco Australia, a Conoco subsidiary in Brisbane, Australia.

Dr. Stice is a member of the University of Oklahoma Board of Visitors for the Mewbourne College of Earth and Energy and the College of Engineering, and a member of the American Institute of Chemical Engineers.

Roger Ingles has 14 years of leader-ship experience in the biotech field. He joined Biokit S.A., a Werfen

Group company, in 1998, as area manager. During his tenure with the company, he has worked with European and Latin American distributors, as well as with Biokit’s U.S. affiliate. In 2006, he was appointed as the company’s key accounts manager.

In February 2008, he became the CEO at INOVA Diagnostics, a San Diego-based company that was acquired by the Werfen Group.

Mr. Ingles hold a bachelor’s degree in Business Administration from the European Business and Management School, a degree in International Business

from Oxford Brookes University, and an M.B.A. from EADA, in Barcelona.

☛ Read Mark’s insights on Page 3

☛ Read Bruce’s insights on Page 6

☛ Read Mike’s insights on Page 9

☛ Read Roger’s insights on Page 12

© Books24x7, 2012 Mark H. Tabak ExecBlueprints 3

Mark H. TabakChief Executive Officer, MultiPlan Inc.

Stanford University ExperimentForty years ago, Stanford University did an experiment: they gathered four-year-old children and offered them a marshmallow. The children were told that if they waited 20 minutes before eating it, they would get an additional one. Some of the children gave in to the temptation of eating the marshmallow; others did not. They resisted by closing their eyes, turning it around, play-ing with it like it was a toy, and treating it like a pet, but only about one-third of the group succeeding in waiting the 20 minutes to get the reward of another marshmallow.

The university then followed these children 10, 20, and 30 years later and discovered that the chil-dren who had been able to resist the temptation were psychologi-cally better adjusted, more dependable, higher achievers in high school and college, and more successful in their careers. The differ-ences were measurable across their lifetime. If one can control their impulses and the ability to delay gratification for a higher reward — which I think is an impor-tant factor — then one can develop success and enjoy sustainability.

Qualities of Employees Who Can Speak the Business LanguageThe above-mentioned research is important because, as a company, we value the ability to focus and prioritize. I want our employees to know how to prioritize effectively, which does not mean ignoring everything else. It means knowing what comes first. We like people who enjoy what they are doing;

successful employees have fun and relish the challenges of work. We see the world as a set of problems ready to be solved, so we want people who have the courage and commitment to find a solution and carry it through to completion. However, this does not mean being reckless. It means that once they have a goal, and once we provide them with the necessary resources and tools, they will carry it through to completion.

At the end of the day, our com-pany’s success is based on customer experience. Every year we focus on a singular theme that is embraced by every one of our employees at MultiPlan. For example, this past year we focused on capturing and re-pricing more claims, controlling expenses, reducing errors, and maximizing opportunities. We then communicate the importance of staying on course and focusing on these core deliverables.

I cannot stress enough the impor-tance of continuous improvement. We truly believe that if you are not getting better than your competition, you are losing ground. We tell people that they have to work smarter, not necessarily harder. We embrace a results-based culture

rather than activity-based culture; once we have made a decision, we focus on the outcome. This metric could be our report card, and it is the language of the business, if you will. For MultiPlan, it is all about delivering on the customer experience.

The Company Vision and MissionWe have a saying here: “You plan your work, and you work your

If we get the right people, put them in the right positions, train them appropriately, and give them the information they need, then we will reap an efficient and effective culture.

Mark H. Tabak

Chief Executive Officer, MultiPlan Inc.Mark H. Tabak

Chief Executive Officer MultiPlan Inc.

“We standardize work tasks to minimize errors, and we aim to get it done right the first time so we send a clear message and vision, which is an important precursor to the desired results.”

• With company since 2000; CEO since 2002

• Previously founded Clinical Pharmaceuticals Ltd. (since sold to Ely Lilly)

• Brought AIG into health care industry with AIG Managed Care, Inc.

• Master’s degree, Health Planning and Administration, Johns Hopkins University

Mr. Tabak can be e-mailed at [email protected]

Mark H. TabakChief Executive Officer, MultiPlan Inc. (continued)


plan.” This is such an important focus for the company, because we are very disciplined and focused on the outcome. Although the journey is of considerable importance as well, we always keep the destina-tion in sight so that we do not become burdened with extraneous detail along the way. We believe that aggregating data, analyzing it, and assessing the impact will lead to success.

We run a very intense project management program where we organize our projects and deliver-ables in such a way that we never miss a deadline. We construct inter-disciplinary teams so people can work together to simplify the proj-ect into smaller tasks and set accurate, realistic dates for comple-tion. We will use a white chart to schedule all of the required tasks and identify the proper sequence, and then we keep a team chart that assigns the right people to the right tasks. We try to address any minor issues before they grow into larger problems because we have learned that attention to detail is important. Little things matter.

Molding EmployeesIn order to get employees to think of tactical activities in a more stra-tegic manner, we must ensure that everyone has a set of challenges and problems to unravel. We must then address those challenges and problems with the necessary resources and ensure that there is a commitment to follow through to completion.

To motivate workers to remain business-minded, it is important to ensure they enjoy what they are doing and that their set of controls

and processes inspire and lead them to perform. We provide conceptual support and believe that the work each employee does is meaningful because we ensure that their efforts are tied back to the overall success of the company.

Employee AccountabilityInstilling accountability in employ-ees throughout the organization goes back to communication. We have an interesting program at MultiPlan. I meet with individual employees or groups of employees and ask them what three things they would like to see changed, what three things they would like us to keep as-is, what they would like me to do, what they are afraid I might do, and if there is anything else they would like to talk about while

they are with me. Many times, this gives employees the opportunity to come up with new ideas. Often, people who are closest to our operat-ing policies and procedures come up with ideas about how they can be dramatically enhanced or modified.

My direct reports believe that the culture of our organization is an entrepreneurial culture; it is about people, information, and processes. If we get the right peo-ple, put them in the right positions, train them appropriately, and give them the information they need, then we will reap an efficient and effective culture. Operational excellence is about the people, information, and processes throughout the various depart-ments in the organization that are under my direct reports.

The CEO to Employees: ‘What Do You Think?’Innovative Program at MultiPlan Seeks Employee Feedback

What three things do you want to see changed?

What three things do you want us to keep as-is?

What do they want the CEO to do?

What are they afraid the CEO will do?

Do they have any ideas for enhancing or modifying policies and procedures?

What else do they want to talk about?

Mark H. TabakChief Executive Officer, MultiPlan Inc. (continued)


Employee CommunicationsWe communicate the strategic direction of our business to our employees through town hall meet-ings. We want our employees to be the first to know and receive feed-back on the performance of the company. We engage in a host of regular meetings, which are of course supplemented by other means. There is no such thing as overcommunicating; in other words, I don’t think you can pro-vide too much information. Information is truly power. It tells us where we have been and where we are headed.

Sharing this information helps employees understand and main-tain a clear vision of what their role is in the organization, along with a clear understanding of expectations and timeframes. Getting something done right the first time is impor-tant, so we have to act responsibly.

Benchmarking SuccessWe are the market leader in the industry, so we use our perimeters as our reference point for bench-marking. We look to make sure we are improving and that our net-work continues to grow. We bench-mark to ensure we are increasing savings, and we always make sure that we are maintaining high quality.

We compete with a pricing for-mula method, and get paid when we save the payer and patient money. We have what I would call

a “pay-for-pay culture”; if the client does not save any money, we do not earn any revenue. Our rev-enue is based on the percentage of savings we deliver, so our interests are aligned with the patients, pro-viders, and payers. If we save patients, providers, and payers money, then we generate income for ourselves. If we save nothing, we earn nothing. n

Establishing Goals

We do a bottom-up budgeting process every year — usually between Labor Day and December. We have a plan for our revenue growth that includes the expenses and investments that will result in earnings. We then evaluate how to get those earnings to where we want them to be. It is a bottom-up plan that involves the entire organization. If we can increase revenue and control expenses, then the earnings will follow, and that is an important part of a business.

© Books24x7, 2012 Bruce R. Cohen ExecBlueprints 6

Bruce R. CohenSenior Partner, Ares Management

What Is the Language of the Business?Understanding the language of the business is about knowing who your customers are and how the products and services you deliver are of value to them. By simplifying the business around defining the customer, the products and services you offer, and the means by which you are doing something that uniquely meets their needs, you provide organizing themes around which your team can pro-cess all information flows.

Focusing on Soft Skills to Provide Competitive AdvantageCompetitive advantage derives from a number of soft elements such as trust and goodwill. It can even be as simple as the reception-ist being thoughtful, responsive, and professional when answering the phone or greeting those that visit. Employees should be convey-ing a positive experience to our customers. At my previous com-pany, we spent considerable time developing what we called the “Wrightwood Experience.” We had difficulty with the concept because people did not understand it or know how to define it; it was more of a soft skill. However, it is fre-quently those soft attributes that can influence the buy decision. In the case of the receptionist, that is the first person the customer sees

and it sets the tone for the overall customer experience. Those are rallying cries to your team.

The Importance of the Whole TeamExpectations of EmployeesRegardless of their rank in the company, we expect our employees to be willing to be “best in class” and to feel a sense of duty and responsibility to the community. In this regard, “community” has a number of definitions for us. Clearly, our employees represent one community, where they have a responsibility to work together and find ways to be innovative and deliver creative solutions to do things better. Other communities include the constituencies we serve such as our shareholders, investors, and the customers who use our capital.

At Wrightwood, we established a system that if one employee saw another doing a great job at some-thing, they could send an e-mail to Human Resources and that person would receive a cash award. We would also nominate people who go above and beyond their basic job so that we could then recognize them at our quarterly meetings, including providing them with a meaningful check. We like to do things like this, not because people are motivated by money, but because they appreciate the acknowledgment of doing a great

job or going above and beyond their responsibilities. We want employees to feel that there is a value proposition in extending themselves beyond their basic duties.

In order for our employees to understand the business, they need to understand our customers and what it is we do. That is the only way that they can align their con-tributions with the overall goals of the organizations. To ensure we maintain clarity and transparency in what we’re trying to accomplish and to determine how we’re per-forming against our key metrics, we engage in regular communica-

We want employees to feel that there is a value proposition in extending themselves beyond their job description.

Bruce R. Cohen

Senior Partner Ares Management

Bruce R. CohenSenior Partner

Ares Management

“Employees need to see how their efforts help drive the collective performance.”

• Previously chairman of the board, CEO, Wrightwood Capital

• Published in the Institutional Real Estate Letter, Commercial Property News, and the Real Estate Finance Journal

• B.A., Tufts University

• M.B.A., University of Chicago

Mr. Cohen can be e-mailed at [email protected]


Bruce R. CohenSenior Partner, Ares Management (continued)

tions through town hall meetings, quarterly meetings, the Internet, or e-mail. The most important thing is to communicate consistently. The priorities of the organization should also remain stable so that everyone is going in the same direction, able to be “best in class,” and moti-vated to contribute.

Qualities of Those Who Can Speak the LanguageBusiness is not brain surgery. While there may be some highly technical sectors that require particular insight from employees, we find that the language of our busi-ness simply starts with a commitment to understand what we do, who our customers are, what our products and services are, and how those are delivered. Our employees do not need to be specialists, but simply need to learn enough to understand the corpo-rate goals and how their department and individual efforts contribute to those objectives. If they can see those connections then they can

speak the language whether or not they are also able to speak knowl-edgably about profitability or our products. They only need to under-stand how their efforts contribute to our overall goals and mission, and to the experience for our constituencies.

That is why goal setting becomes important; goals provide a tangible means to communicate specifically what the organization is trying to accomplish, how each department supports that effort, and, corre-spondingly, how each employee role and contribution fits with that.

Establishing Goals at WrightwoodThe fourth quarter is our period for planning. The senior members of our management team come together in a series of sessions to fashion our collective goals. Each member is responsible for building out the business plan for their func-tional areas of responsibilities which in turn contribute to the overall corporate goals. Through planning sessions, they communi-cate their responsibilities and met-rics so that everyone can ensure there is alignment between their

Best Practice for Employee Communications

One of the best practices for communicating with employees and encouraging them to remain focused on the strategic direction of the business is to have regular check-ins (certainly no less than quarterly) so that everyone can see whether they are achieving the goals and objectives from a corporate, department, and individual perspective. The performance review can also serve as a conventional tool in this process. Because these tend to focus on an individual’s behavior rather than goals and objectives, you need to make sure that they also include updates on any shifts in individual or departmental goals and objectives, as well as on how the employee is doing in terms of advancing their personal goals and objectives.

Teaching Employees the Language of the Business

• What the company does• Who its customers are• What its products and services are• How they are delivered

Then specific goals are articulated about:• What the organization is trying to accomplish in a given period• How each department supports that effort• How each employee’s efforts contribute to the whole process


Bruce R. CohenSenior Partner, Ares Management (continued)

respective goals and objectives. We also communicate the business plan one level beyond the senior man-agement team to ensure they have buy-in as well, and then the plan is presented more broadly to the entire company.

Each member of senior manage-ment also meets with their team to make sure they understand the goals and objectives and how their

particular efforts contribute to that plan. We then check in throughout the year to make sure we are mov-ing in the direction that we set, identify any road blocks that might be standing in our way, and deter-mine what we need to accomplish in the next quarter to continue moving the ball down the field as a team. This is easy for us because our company is small, but the

larger your company is, the harder it becomes. It then requires even more clarity, communication, and recognition to convey the idea that all individual or department goals and objectives will not be achieved unless they are done in alignment with those of the over-all organization. n

© Books24x7, 2012 J. Mike Stice ExecBlueprints 9

J. Mike SticeChief Executive Officer, Chesapeake Midstream Partners

Introducing Employees to the BusinessAll employees who join our com-pany participate in an orientation, which is a process that is intended to bring new hires up to speed on our company goals, vision, and mission. Following this orientation, new employees join a one-year training program called “Midstream Essentials.” This program provides the framework of our business, which is categorized into 10 differ-ent modules. These modules pro-vide employees with the language they need to understand not just his or her individual role in the busi-ness, but everyone else’s role as well, and how the pieces of the puzzle all come together to form an integrated business model. With typically 20 people per class, this kind of training creates a network that encourages people to learn from each other and to learn col-lectively. The CEO teaches the first and 10th module, and other leaders teach two through nine.

This process is important because, although employees typi-cally learn and understand their own individual responsibilities quite easily, they are rarely given the opportunity to interact with others to understand the business on a larger scale. The onboarding process, town hall meetings, and ongoing visits provide employees with the opportunity to ask ques-tions about the business and learn. Communication is so essential to

this process, and it is not just about talking to your employees, either. Listening to what is important to your employees is a key part of the equation as well. Two-way conver-sations allow both the employees and management to take appropri-ate actions to drive business success.

Establishing Goals and Tracking SuccessWe have a simple model for devel-oping goals. We begin with a con-versation about the current state of the business, which should be con-ducted at multiple levels. It is important to begin this conversa-tion at the regional level by request-ing each regional manager to come to the leadership team and present his or her business plan. Each plan has to begin with a fair assessment of their current state, including top-ics such as profitability, regional standing, operating costs, revenue streams, staffing, and core value performance.

Once we have received a fair assessment of our starting point, we can have a quality conversation about our future to determine how we can grow, improve productivity and efficiency, and reduce costs. We always plan according to a five-year period, which I find to be an ideal frame time. It is not too long to be immeasurable, but it is not too short that you become micro-focused on next week’s results. The key to setting goals is to develop

strategies that bridge the gap between your current and future state, and then drive the business based on that strategic direction.

The key to tracking the success of strategies is simply making sure that every regional manager takes personal ownership in the business. Then you review their progress every quarter. This feedback is important as it gives them an

Two-way conversations allow both the employees and management to take appropriate actions to drive business success.

J. Mike Stice

Chief Executive Officer Chesapeake Midstream Partners

J. Mike SticeChief Executive Officer

Chesapeake Midstream Partners

“Our onboarding process provides all employees with a common language and understanding. To build on that foundation, we then provide continuous job-specific training and development.”

• Concurrently serves as president, Chesapeake Midstream Development, and SVP, Natural Gas Projects (Chesapeake Energy)

• Previously held technical and managerial positions at ConocoPhillips

• Chemical Engineering degree, University of Oklahoma

• Master’s degree, Business, Stanford University

• Doctorate degree, Education, George Washington University

Mr. Stice can be e-mailed at [email protected]


J. Mike SticeChief Executive Officer, Chesapeake Midstream Partners (continued)

opportunity to come to you to explain how they are performing relative to their plan. If something has changed or is not performing, then corrective actions can be taken to deliver on the plan. Regional managers should be constantly evolving their strategies and adapt-ing to their environment so that they can achieve that future state. Financial expectations are not altered from the original plan but sometimes the means to achieve them are altered. This level of

commitment to achieving a measur-able future state is critical to organizational success.

Instilling Accountability Among EmployeesInstilling accountability among employees is one of those things that trickles down, and as a result must start at the top. CEOs must have certain expectations for those individuals who report to them, and they in turn have the same sort

of expectations for those employees directly below them. Rigorous per-formance reviews of management twice per year reveal the individu-al’s contribution and relative per-formance of their particular responsibilities. They also allow for immediate feedback and coaching, which ensure success.

If management is not exhibiting our desired values, we inevitably part ways, which is why you must constantly look at the individual’s

1. A multi-level conversation about the current state of the business is provided by regional managers who present fair assessments of their current state that include: • Profitability • Regional standing • Operating costs • Revenue streams • Staffing • Core value performance

2. The CEO engages in a quality conversation about the future to determine how the company: • Can grow. • Improve productivity and efficiency. • Reduce costs.

3. A five-year plan is then developed that bridges the gap between current and future states, and that will drive the business based on that strategic direction.

4. Progress is reviewed every quarter with regional managers: • Performance against plan is assessed. • Corrective actions are taken if necessary. • Regional managers are encouraged to evolve strategies and adapt to their environment. • Financial expectations are not altered from the original plan.

A Model for Developing — and Achieving — Goals


J. Mike SticeChief Executive Officer, Chesapeake Midstream Partners (continued)

performance at every level includ-ing the manner in which they are accomplishing results. Accountabil-ity must include accomplishing financial goals within the confines of our core values.

Thinking in Terms of ROICEOs must consider the bottom line (including the income state-ment, balance sheet, and cash flow considerations) and through those essentials, we teach the staff about return on investments. We take these important concepts down to the regional level, and then the region takes it down to the func-tional level, and finally the functions make unique contribu-tions to the bottom line.

For example, if a measurement technician is responsible for our cash register, he or she knows that measurement accuracy results in dollars in the bank, which

ultimately results in the company’s success or failure. Employees are held accountable for metrics associ-ated with their day-to-day work, so they know whether they are per-forming well or not. If the loss is within plus or minus 0.5 percent then they have done a great job. If it is 2 percent then they have

immediate feedback that something is not going right and they need to be doing something differently. Creating such a line-of-sight metric enables all employees to under-stand what impact they have on the broader scale. n

Internal Benchmarking

When looking at internal benchmarks within Midstream, we review EBITDA (earnings before income tax, depreciation, and amortization) on a monthly basis. Special attention is placed on operating expenses, revenues, tariffs, and capital productivity. “Capital productivity” refers to what dollars are spent in capital versus new volume that is added to the system.

When assessing monthly performance, we find that it is equally important to look at staffing quality and levels with special attention to the numbers of involun-tary turnovers (i.e., people that left because we asked them to leave) and voluntary turnovers (i.e., those that left that we would have preferred to keep). Reviewing the number of hours spent training and developing people, and the number of hours we spent in the communities providing philanthropic services are also important. Finally, it is important to measure progress toward our financial goals and make sure that we are on track to generate the anticipated scale, profitability, and free cash flow.

© Books24x7, 2012 Roger Ingles ExecBlueprints 12

Roger InglesChief Executive Officer, INOVA Diagnostics Inc.

IntroductionINOVA Diagnostics is a biotech company that produces in-vitro diagnostics tests that help detect autoimmune diseases in blood sam-ples from patients. Typical autoim-mune diseases include rheumatoid arthritis, celiac diseases and lupus. Some of them are extremely rare diseases that have severe implica-tions for patients’ quality of life.

The acquisition of INOVA Diag-nostics by the Werfen Group has been, for the current managing team, a challenging process that started in 2008. The company has undergone many changes since that moment, both in its culture and structure.

Ensuring Employees Have a Strong Understanding of the BusinessINOVA Diagnostics was, before the acquisition, an independent company owned and managed by five scientists who were involved in day-to-day management, and responsible for making all of the decisions. They shared very little about the market reality or the company’s situation with the employees.

The reality the company faced in 2008 was one of lost market share and sales, along with an image of a leader company that delivered the most novel and

innovative products. This may be difficult to understand, but custom-ers’ needs had changed from sourcing diagnostic kits to looking for suppliers that would provide them with not only reagents, but also automation and software that would help their efficiency and accuracy. INOVA Diagnostics’ pol-icy was, until it was acquired, not to provide automation or software along with the kits. This decision affected its ability to compete in the marketplace.

When employees have not been exposed to the reality of the busi-ness, it is difficult for them to understand why they are doing what they are doing, and thus hard for them to contribute effectively to the company’s growth. Since the acquisition, we try to share with our employees and collaborators the realities of the market, and how we and our competitors are react-ing to them. We want the employees to understand that the field of bio-tech has a real impact on peoples’ lives.

If we are able to develop and sell a diagnostic kit, we improve peo-ple’s quality of life. But if, in addition, we provide instrumenta-tion that helps with the processing, or software that helps manage and deliver the data in a more accurate way, we are also helping the labs to be more efficient and effective, and to avoid mistakes that can lead to

decisions that have implications for patients’ lives.

The Goal-Setting Process (Two Versions for Different Needs and Moments)In 2008, after the acquisition, the senior management team defined the most critical objectives to revert a situation that was not pleasant

When employees have not been exposed to the reality of the business, it is difficult for them to understand why they are doing what they are doing, and thus hard for them to contribute effectively to the company’s growth.

Roger Ingles

Chief Executive Officer, INOVA Diagnostics Inc.

Roger InglesChief Executive Officer INOVA Diagnostics Inc.

“Understanding our business and industry not only involves economic realities, but a focus on human needs and on the impact that work at INOVA Diagnostics can have on people’s day-to-day lives.”

• CEO at INOVA (a Werfen Group company) since 2008

• 14 years of leadership experience in the biotech field

• Previously key accounts manager, Biokit S.A. (Werfen Group company)

• Bachelor’s degree, Business Administration, European Business and Management School

• Degree, International Business, Oxford Brookes University

• M.B.A., EADA (Barcelona)

Mr. Ingles can be e-mailed at [email protected]

© Books24x7, 2012 Roger Ingles ExecBlueprints 13

Roger InglesChief Executive Officer, INOVA Diagnostics Inc. (continued)

for the company. And we had to do most of this work with a reduced number of people, and make sure that the objectives, tactics, and actions we had decided to do were implemented in a timely way, and the deliverables were met. This was an emergency situation that required drastic decisions and very little margin to maneuver. The result of these actions is described in the sidebar.

In 2011, we have started to define the mission, vision, values, and strategic objectives of INOVA Diagnostics over the next five-year period. These objectives have been communicated to some select employees, and they have worked in teams to develop actions and tactics that, from their point of view, will help the company to achieve them.

The senior management team evaluated their proposals and chose which ones will be implemented. The same teams will be in charge of the implementation and com-munication of all the actions throughout the organization. This exercise has helped many of our employees understand the chal-lenges of the market, and develop their skills and knowledge to help the company maintain its leader-ship position. It has been mostly

well appreciated by all employees, and has been instrumental in unify-ing the concepts and language around our strategies, tactics, and needs.

Valuable Employee QualitiesIt is extremely important to us that our employees are transparent and willing to learn and grow. These qualities are essential in helping our company strengthen and grow when confronted with challenges. We did, however, face a very diffi-cult situation when our director of production resigned. The three managers reporting to this director learned of and responded to the situation with great openness and efficiency, and I think their direct, proactive approach greatly bene-fited us. They really took on the

challenge and went the extra mile in responding to a difficult situation.

When it came time to replace this director, we decided to hire someone from another company rather than promote internally, and we explained why we made this choice. For me, it was important to make sure that the employees understood how they could benefit from this new addition in the areas of their own personal and profes-sional development. By focusing on transparency and growth, we man-aged to handle a sticky situation that could have led to a loss of tal-ent within the organization. Today the managers are in a professional development process that is bene-fiting both them and INOVA Diagnostics. n

The Reality Today

After a process of explaining the reality, setting expectations and goals, and undergoing a lot of effort and teamwork, the situation today is very encouraging. INOVA Diagnostics is, for the first time, launching two proprietary systems that complement the diagnostic kit offer. Along with these instruments, and in synergy with another company of the group, we have also developed a piece of software that improves labs’ data management. We are enjoying a leadership position in the market, and continue to be a resource not only for the novel diagnostic kits that we produce and sell, but also for the most advanced technology that goes with these reagents.

© Books24x7, 2012 Ideas to Build Upon & Action Points ExecBlueprints 14

Ideas to Build Upon & Action Points I. What Employee Qualities Will Give Your Company a Competitive Edge?The success of most businesses — even if they are not consciously conceived “entrepreneurial” cultures — is heavily dependent on the knowledge, talent, and effort of their people at all levels. This is why many CEOs believe that if they can find the “right” people, put them in the right positions, train them appropriately, and give them the information they need, they will perform effectively. But what characteristics distinguish these “right” people from the rest of the herd? In this report, the authors discuss the importance of. . .:

• Treating customers thoughtfully, responsively, and professionally

• Knowing how to prioritize effectively

• Enjoying the challenges of the work

• Responding to unforeseen problems with openness and efficiency

• Possessing the courage and commitment to find solutions, and carry them through to completion

• Controlling impulses and delaying gratification for the greater reward

II. The Bottom LineCEOs generally cannot stress enough the importance of continuous improvement because if you’re not getting better, you’re probably losing ground to the competition. Of course, your EBITDA (earnings before income tax, depreciation, and amortization) provide the gold standard for assessing progress — and they are generally attained by increasing revenues and controlling expenses. However, even before analyzing your end-of-quarter or end-of-year numbers, other benchmarks to examine more regularly include:

• Is your customer base growing? How well are you fulfilling their needs?

• Are you maintaining (or increasing) quality levels?

• How do your operating expenses compare with previous periods?

• Is your cash flow sufficient to sustain daily operations?

• What are your staffing and voluntary turnover levels?

• How many hours are you spending training and developing people?

• How productive are your employees?

• What innovative products and/or services have you recently developed?

III. Must-Have Processes for Establishing and Executing Company GoalsSome of the most productive companies embrace a results-based (as opposed to activity-based) culture that focuses on the implementation of specific outcomes and does not become burdened with extraneous detail along the way. However, such an orientation requires disciplined goal-setting processes that articulate specifically what the organization is trying to accomplish, and how each department — and individual — can support that effort. Key steps in this approach are to:

• Meet with department managers to develop collective objectives that will address major company goals over the next five years.

• Together, assess the company’s current state, including profitability, regional standing, operating costs, revenue streams, staffing, and core value performance.

• Ask the managers to communicate their responsibilities and metrics to ensure alignment between goals/objectives across the company.

• Develop strategies that will bridge the gap between current and future states, and ensure that all managers are taking ownership.

• Share the plan with the entire company.

• At the department level, construct interdisciplinary teams that simplify projects into smaller tasks.

• Identify the proper task sequence, and set accurate, realistic dates for completion.

• Assign appropriate people to each task.

• Address minor issues before they grow into larger problems.

• Check in periodically to assess progress against goals/objectives.

• Be prepared to evolve strategies and adapt to the environment without compromising financial expectations.

IV. The Golden Rules for Communicating With EmployeesIn order for your employees to speak the language of your business, they need to understand at least some of the realities facing your business. This requires communication, and it should not only be one-way; listening to what is important to your employees can help increase their sense of engagement. What’s more, those performing the work can often offer valuable input on enhancing or modifying policies and procedures. Effective practices for reaching out to employees include:

• Developing training programs for new employees that provide education on the company’s structure, and encourage people to interact with others across the business

• Holding town hall meetings

• Sending regular e-mail updates

• Conducting periodic reviews that not only assess employee performance, but also provide updates on departmental goals and objectives

• Offering ongoing job-specific training and development

And, once in touch, important areas to explore are:

• What three things would they like to see changed?

• What three things would they like to keep as is?

• What would they like the CEO to do?

• What are they afraid the CEO will do?

• What new ideas can they offer?

• How are they doing against their own goals and objectives?

V. Essential Take-AwaysUnderstanding and speaking the language of the business is about knowing who your customers are and how your products/services meet their wants/needs. As CEO, you set the standard for how this information is conveyed to employees at all levels so that they can use it to inform their daily work and interactions with customers in effective ways. You can inspire employees to take ownership of their role in your company and perform at their best by:

• Regularly sharing information related to the company’s strategic direction and financial performance

• Informing everyone how their work contributes to the company’s overarching mission, goals, and success

• Giving everyone a set of challenges and problems to unravel — and the necessary resources to accomplish the task(s)

• Encouraging frontline staff to conceive of innovative ways that processes can be improved

• Eliciting employee involvement in developing and implementing actions and tactics to help the company meet its strategic objectives

• Instilling a culture of accountability (reinforced by performance reviews) that begins at the top

• Demonstrating the value of exceptional work through recognition and incentives n

© Books24x7, 2012 Ideas to Build Upon & Action Points ExecBlueprints 15

Ideas to Build Upon & Action Points (continued)

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10 Key Questions and discussion Points

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1 What qualities do you value in employees who can effectively “speak the language of the business”? What expectations do you have for your employees, regardless of rank?

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What is the vision and mission of your organization? How well do employees understand and embrace this mission? How do you measure their engagement with the company’s message? What process do you use to ensure employee actions adhere to the company’s vision?

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How are goals established at your company? How does the process for establishing short- versus long-term goals differ? What role do you, as CEO, play in the process? How does the goal-setting process encourage employees to stay business-minded in all interactions?

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What challenges do you face when encouraging employees to remain business-minded? How can you simplify these challenges for employees? How many of these challenges resolve themselves based on time/experience with the organization?

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As CEO, what are your best practices for instilling accountability in all employees in the organization? What is measured? How does accountability vary by rank and experience?

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What role do managers play in driving the culture of the organization and encouraging their direct reports to speak the language of the business? Are mentoring opportunities offered? As CEO, how do you work with respective managers to ensure that all employees are challenged to think strategically?

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What are the top benefits of operating a business-minded workforce? How do these results compare to companies where employees are more focused on tactical results? How can a business-minded workforce provide a competitive advantage?

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What are your best practices for communicating with employees and encouraging them to stay focused on strategic direction? Have you seen a change in employee understanding in the past two years? How do you solicit employee feedback regarding the direction and progress of the company?

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As CEO, how do you encourage employees to think in terms of ROI? How do you encourage them to place their actions in context of the bottom line? Is this always the most important focus?

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How do you encourage employees to conduct business with a global mindset? What important international differences should employees be aware of? What cultural factors do you need to consider when setting goals at these sites?

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Documents

How the CEO Can Encourage Employees to Speak the Language of the Business