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Business Tips – Straight Up for the New Year

By Mark Larson

What are some of the philosophical cornerstones and key insights to keep your competitive edge in the New Year? Prosper queries some of the region’s savviest movers and shakers for their take.

    Bob Whitson is president/CEO of Roseville’s Sierra Logic, a chip design company of 70 recently bought by the publicly traded Emulex Corp (EMX):
    “Really stay focused. Decide what business you’re in and what business you’re not in.
    “People are the most important asset. Products only last three to five years. People are your source of lasting core competencies. Get good people and focus them. They have to buy into your values and your culture. We talk about our values all the time.
    “If you have people issues, deal with them. Don’t ignore them or they’ll only get worse.”
    “We support open and direct communication. If something’s wrong, don’t be disrespectful, but don’t beat around the bush.
    As for employees, “We want people to stand up for what they believe, and we have an open door policy. Sometimes people are too intimidated by positions of power to take advantage of it.”
    “Don’t design products and hope people will come, because they won’t. Design products with customers and take the risk out of the equation.
    “Several of our employees haven’t done well because there was confusion about their roles and expectations. We expect a lot.
    For employees that perform, “They need to know they’re adding value to the company.”

    Chuck Hansen is founder and chief of Hansen Information Technologies. The company, which makes a variety of government operations software, has acquired two companies since selling a majority of its shares to a San Francisco equity fund. It has 400 employees.
    “Number one, make sure you love what you do,” says Hansen. “If you love something, you’ve got a passion for it and you can communicate that to others. You can make them as excited as you are. Sometimes that’s the determination you need which makes the difference between success and failure.
    “Don’t be afraid of failure. We’ve tried doing an awful lot, and we’ve failed at a lot of it. All you need is a couple of home runs to win the game.
    “You can’t be afraid of letting people fail too, letting them know it’s OK.
    “Never take ‘No’ for an answer. If the business was easy, everybody would do it. You’re out there on your own, trying to do something. You may be in competition with one or two others, or 10 others. You have to challenge those other companies to get customers.”

    Estelle Saltzman, partner in advertising firm Runyon Saltzman & Einhorn Inc., in business in Sacramento since 1976:
    “Put as much thought as possible into hiring good people. That process often gets short shrift from employers and business owners. You’re only as good as the people that work for you.”
    “Hire good consultants, like accounting firms and lawyers. Research the market and find good ones and you’ll get good advice from them.
    “Try to have fun. Sometimes work doesn’t feel like fun, but you spend so much of your time at work, work has to be fun. If it’s all drudgery, you won’t be able to attract people to work with you.”

    Frank Washington, Sacramento-based investment entrepreneur:
    “You need integrity, in terms of how you deal with other people. Following through on what you tell people you’re going to do. The other part of integrity is to be able to look at a situation in the hard, cold light of day and see it the way it really is. Have a pure business state of mind. That means doing your homework to understand what it is you’re looking at. Don’t let some bias you bring get in the way of what the facts are.
    “I don’t care about whether I’m right as much as I care about doing right.”

    Steve Schroeder is CEO and co-founder of CoreLogic Systems, a fast-growing Sacramento based mortgage fraud detection system vendor:
“First and foremost I tell everybody joining the company to read ‘Raving Fans,’ a book about customer service. It’s about serving customers above and beyond what you need to do to get by. We started as a value added reseller and really quickly learned that service can win so many battles that nothing else can. Today, it’s a critical element of any success.”
     Schroeder recently had a customer tell him of a problem he needed solved, and Schroeder says he could have just told him over the phone what products would work. But instead he spent a half day at the company analyzing its operations, then recommended what the customer needed. It was less than what he could have sold him over the phone, says Schroeder, but the extra care brings customer loyalty. “It would have been easy to not take that extra step,” he says.
    Second, “Never be content with what you have, whether it’s a product or a service, because they’re never done. There are always those that build nifty products or services that then stop thinking about it.”
    And third, “Persistence. Never give up. There are always a lot of signals in markets. You can be No. 2 or No. 3 and feel like you’re losing ground, but No. 1 has issues. And if you’re not there being persistent, you’ll never know when they fail.”

    Tom Lacey, chairman and CEO of International DisplayWorks in Roseville, a liquid crystal display manufacturer which was recently purchased for $300 million by Flextronics:
    “Hire great people, set very clear goals and responsibilities, provide consistent feedback and have a maniacal focus on customer service.”
    Lacey elaborates: “Look for real strong team players with diversity in experience. Don’t hire someone just like yourself. You want a whole team that is stronger than the sum of any of its parts.
    “Let your people know exactly what it is they’re supposed to do. If you do, they’ll be successful. If not there’ll be a lot of confusion.
    “Give them feedback on how they’re doing, on things they’re doing well and any areas they need to improve on. Continually raise the bar in your organization, keep setting high performance expections and it will happen if they (staffers) improve.
    “Customers pay your paycheck. People sometimes lose site of that. You want the delight of the customer.”
   
    Mitchell Koulouris, president and CEO of Digital Music Group Inc., the newly traded company gaining capitalization, has boiled down his business philosophy:
     “Sometimes the best deals you do are the ones you don’t do.
    “Don’t put off until tomorrow what you can do today.” He elaborates: “The ‘I’ll do it tomorrow’ attitude really doesn’t work. There’s a very vicious, competitive world out there.” He adds: “Time is the most precious commodity, so if you’re spending a lot of time on something, make sure you’re doing it right.
    “People don’t follow titles, they follow leaders. A leader sets the example. If you come in late and leave early, people pick up on stuff like that. If you set the tempo of ‘I’m working late too,’ people tend to respond to that more than the other way around.
    “Most people are risk averse. You’ve got to have an entrepreneurial drive or spirit in order to be successful. The school of hard knocks certainly applies to every new business. You have to keep at it. Naysayers aren’t the ones doing it.”

    Gia McNutt is CEO and co-founder of Special Order Systems in Rocklin:
    “It’s critical for a business to know and understand their customers better than the competition. People who make and take phone calls are extremely enabled if they have a screen of all customer information. It breeds loyalty, you can make more sales and take less time doing it.
    “Make it easy for customers and staff to reach with a single universal phone number. Missed connections mean missed deadlines, project delays and customer frustration.
    “Do client appreciation cards and gifts other than at Christmas and the holidays when most other companies do it.”

    John Saca, developer: “Honesty and integrity in business are essential to success. You have to believe in yourself and what you’re doing or people will never believe in you. Tenacity will always pay off. Never quit. Those are words I live by.”
   
    Andy Beal, chief of MaxPreps, the fast-growing high school sports website: “Be extraordinarily persistent. Never give up. Always have a belief that there’s a way to continue to move forward.” Beal says that mentality enabled him to reposition his company, initially called WaveShift, when hit by the implosion of the tech industry in 2000-2001, into MaxPreps and into the success it has become. “It was real tempting to hang it up,” he says.
     Beal adds, “Seek help from those who have done it before. I’ve surrounded myself with people that have had success building businesses. And there are folks in the business community you network with who are always willing to lend some sort of a hand to someone trying to succeed building a business.
    “And don’t burn bridges, this is really important. It’s amazing in business how small the community can be. You always want to be able to go back and use the connections you built over time.”

    Longtime Sacramento developer Marvin “Buzz” Oates, 83, has been a businessman for 57 years or so. He started out working in a locksmith shop, then went into the building supply business. And for the last 50 years, he’s headed a successful real estate development business. A man known for his prodigious command of numbers, Oates is frank when asked about secrets to his success.
    “I don’t want to get religious on you,” he says. “But I feel that the Lord has taken care of me. That’s an important part of it.”
    As for specifics, he says discipline is a major part of his success. “I’ve never extended myself beyond what I could see at the end of the tunnel. I’ve never borrowed money that I couldn’t pay back. You’ve got to have some vision of what’s going to take place. But you’ve got to have some discipline or boundaries on where you think you can go.
    “I think people who have seen success in real estate are sometimes too young and don’t have the discipline to keep it under control. If you’re too young, you don’t know about the cycles of real estate.
    “You have to have honest, conscientious people around you. As one person you can only do so much. You need an organization working effectively for you.
    “Keep good relationships with people. They have to like you, and you’re actions have to be from your heart. It’s a salesman’s job, but it’s an honest salesmanship. You’ve got to be honest with people. If you’re not, you’re going to be in trouble.”

    Terry Hall, CEO of GenCorp, Aerojet’s parent: “You have to think about what’s the best thing for the business in the long term. You have to understand what your market is, how your own people define your company and what it is you do. You have to figure out how to put yourself in position to take advantage of the market.
    “We tried to put ourselves in position to get more NASA business. With Lockheed Martin we just won the Orion capsule, the new manned space program replacing the shuttle.
    “Also, what do you have to do to leverage the company in terms of skills, to have a chance to win those markets? Understand the capability of the people working for you and whether you need to add skill sets.
    “Understand what your costs are and if you can’t get to your long term goals because your costs are too high.”

    Amador Bustos, president of Bustos Media LLC in Sacramento. Bustos specializes in buying Spanish language radio stations and packaging them for sale to large Hispanic media companies.
    “I pay particular attention to three areas. First, customers. They have loyalty only to themselves so we have to earn their business every day.
    “Hire employees very carefully. It is easy to give a job, but it’s very difficult to fire people. Therefore I always check references and consult my intuition as to the person’s commitment to the job beyond their paycheck and their trustworthiness at all levels.
    “Choose your investment partners even more carefully than your employees. Because if you make a mistake here, you will pay a heavier price than you ever imagined for a lot longer than you ever expected.”

    Lucas Mageno, 38-year-old founder of Capitol LLC Digital Document Systems in Sacramento, has a national staff of 300, and has managed to consistently grow his company over the past 10 years:
    “The most important thing you can have is integrity. You have to do what you say you’re going to do. You need the same level of respect from the rank and file as your right-hand manager. That’s just crucial, even if they don’t have as big a role as others.
    “The key to being a good leader is to pull the best out of an employee by getting them to buy into and believe the company’s mission. You teach them with all the tools they need and then let them be accountable.
    “And I’m a big believer in having rank-and-file employees put a little money into stocks, and they should all own their own home. That means something to an employee that makes $25,000, to own their own little house. It’s hard in California. But if there’s some kind of ownership or investment, it gives them confidence and self-fulfillment when they see their stocks and mutual funds are going up.
    “With me, it’s always been about the employees. You take care of them and treat them really really well. Like today, I talked to one of my operating people. I typically ask him for numbers. Toda I told him I was grateful to have him, I appreciated him and that I hoped he was happy here. I told him if ever he wanted to talk, I’m available any time.
    “If your message is consistent people feel secure. You have to mean it, or they’ll know it’s a lie.”

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