THE LAST FULL MEASURE

A lot has changed since Herb Shear began leading GENCO Supply Chain Solutions more than 30 years ago.

For starters, the chairman, president and CEO of the reverse logistics company only had 15 people with him in the beginning.

"So, obviously, your leadership style for managing 15 people

versus an organization today that has 7,000 people in 100 different locations - it's significantly different," he says. "So, I had to evolve my leadership style and my leadership thinking over that 36-year period because if I was doing the same leadership style that I did 36 years ago, the company would probably implode."

One of the primary ways he's found to make sure everyone is staying true to the company's mission is by relying heavily on data.

"You can't manage a business without good, good data," Shear says. "If you continually manage from your gut, eventually you're going to have a problem. So, we like to make decisions based on our data. Sometimes, you don't have all the data, and you have to just go with your gut. But, we like to get as much data as possible to make our decisions with."

The goal at GENCO is to have great customer and employee satisfaction and to be a profitable company - and each one of those areas is measured to see just how well the company is doing.

"It's more than just words to us," Shear says. "We actually measure our customer satisfaction, our teammate satisfaction and our profitability. We only consider ourselves a successful company if we are doing well in all three. It's like a three-legged stool. If one of the legs is broken, we need to fix it."

Monitor progress

Shear makes it clear he wants GENCO to focus on the customer; and he makes surethat is happening through data.

The company surveys at least its top 75 customers once a quarter to find out how well the company is serving them.

GENCO takes the surveys one step further by not relying on some outside firm to do them but requires every senior manager in the company to conduct them. The surveys are made up of predetermined questions and are administered by phone by the managers.

"We want every senior manager talking to customers because sometimes you get so involved in other things you forget you have customers," he says.

"So, every quarter, we survey and database the results, and we monitor how we are doing with our customers. We're very proactive. So, if a customer says they have a problem or we aren't meeting their objectives, we don't want to call them again next quarter and have them say the same thing again."

Though Shear says you can be inundated with data, he says determining the information to pull from the surveys is easy. If something in the surveys tells Shear and his team that a customer is having an issue, they try to fix it immediately.

"You really have to pick what's significant," he says. "We've created what we called a balanced scorecard (from the survey results), which we put out once a month that's about one page for the overall company.

"On the balanced scorecard, we've identified the items that we think are significant to the company's long-term success. And then, it's like a dashboard. Things are either in red or green. Green means you're doing fine; red means we've got some issues - we've got to improve in that area."

While the scorecard process is always evolving, overall, the company sticks to its mission and values when determining what is significant.

"Every company has to decide that for themselves - what's really important for my long-term success'? What's the stuff I should be continually looking at?" he says. "It shouldn't be more than a page. It should be something you can do on a page or less."

Shear says a common misconception about customer surveys is that those surveyed will try to find something wrong even if they are satisfied with the service.

"When we first started surveying customers, everybody said, 'We don't want to do that. No news is good news, and if you ask customers if they have a problem, they are going to make up a problem,"' he says. "I think we found by being proactive and surveying our customers and having senior managers talk to customers that we tend to keep our customers longer than our competitors.

"Our longevity with customers is longer because we're going that extra mile to create a strong relationship with our customers and create customer satisfaction," he says.

Value your employees

Shear also uses surveys to focus on his employees as much as his customers - and for similar reasons.

"If we aren't creating a good work environment and we lose our valued teammates, long term, we're not going to be profitable," he says.

Part of retaining employees who fit into a positive culture is the timeliness in which you respond to those issues.

"If we see areas where we don't have a good work environment for our teammates, we don't say, 'Well, we'll deal with it six months from now,"' he says. "We deal with it now."

Shear creates an environment where people are motivated by providing incentives to employees who do well. The surveys of employees give Shear and his team an idea of how the majority of workers feel about the GENCO culture.

"We're asking teammates, 'Are we creating a good work environment - a place you enjoy coming to work?"' he says. "We ask questions: 'How are your working conditions? Are you happy with your benefits? Are you happy with your wages? Are you happy with the overall GENCO culture?"'

Shear doesn't do an annual survey with his employees because he wants a continual look at what's going on with his culture.

"Most companies, when they do employee surveys, they tend to do them once a year to once every two years, and they take a snapshot," he says. "We survey 9 percent of our teammates every month for 11 months, so every teammate does a survey. But we're doing a large enough random sample every month that it gives us an opportunity to see if there is change occurring in the work environment. Our goal is to keepimproving the work environment so we get monthly feedback as to how well we're doing.

"We have it on an individual facility basis so we can see where there might be places where we could do better in providing a better work environment and also monitor the places that are doing well."

The survey consists of scoring each question between 1 and 6, with Shear looking to achieve about a 4.8 or higher.

"We feel that rating, overall, we are creating a good work environment," he says. "Now, is everybody happy in that work environment'? Probably not. But, are the majority happy in that work environment? Yes."

Hold people accountable

Listening to and rewarding employees can lead to success, but you also need an environment where people are held accountable.

If data shows there is a problem, Shear will first sit down with his leadership team to discuss if they, as leaders, set up roadblocks that caused the problem. As soon as they remedy where they fell short or found there weren't any roadblocks caused by the leadership, the employee who is in charge of the department is shown the data and is responsible for fixing it.

"The way our structure is, we have about 100 different facilities located throughout the U.S. and Canada," Shear says. "So, if we have a problem at a particular facility, there's a customer service vice president that is responsible for that facility, and they get all these metrics. So, it's really their responsibility to get the issue fixed. So we just monitor it more from a senior level that the issues are getting fixed."

Letting employees know where they stand is an important part of creating a culture that wants to grow.

"I once heard a speaker say, and it resonated with me, that people come to work, and they are kind of lethargic at work," Shear says. "Then, after work, they go to their bowling league, and they roll the ball down and they get a strike or something, and you see them jumping up and down with excitement. He basically said, 'Why don't a lot of companies get that at work?' He said the reason is, 'Because at work, you tend to put a sheet up over the pins. When you roll the ball down, you hear the pins crack, but you never know how many went down.' So, we've tried to create an environment where everybody always knows where they stand all the time."

That includes sharing the high-end financials with workers to show them how the company is doing.

"Especially on the financial side, I think that companies think that if their employees know that they're making money, that they're going to say, 'Why can't I get more?' I actually find that generally people think the company makes 10 times more than it actually makes if you don't give them any information and that they actually like to have something they can judge how well they're doing. Financial success is certainly one metric of how well a company is doing."

According to the numbers, GENCO is doing well. The company had revenue of $514 million in 2005, $577 million in 2006 and $712 million in 2007.

He says, if the company didn't use data to measure the company's strengths and weaknesses, then GENCO wouldn't be as big as it is today.

"I think the company would still be here," he says. "We wouldn't have the growth rates that we have, and I think we'd be putting out a lot more fires. So, I think it would be a lot smaller company always struggling to put out fires."

GENCO has been in business for more than 100 years, and Shear wants a culture that will take them to 200 years in business.

"We're creating an environment for the long term," he says. "I've seen all kinds of management styles and all kinds of success with all kinds of management styles, but I think you have to look at the companies that stay around for the long term. I think those companies that stay around for the long term have a focus on the company, on their missions and what's important is the long-term success of the company."

The Shear file

Born: Pittsburgh

Education: Degree in finance and marketing, Southern Illinois University

What has been your greatest business lesson?

I think that, in our industry, customers are demanding continual improvement, so they're not happy with the status quo. So, we've learned in our company that just doing a good job for a customer isn't good enough. The job has to be continually better.

How do you handle failure?

That probably hasn't been one of my strong suits because I am a perfectionist. I hate failure. But, I think we have to learn from it. When we've had failures, we need to go and fix them. A lot of times, they are very costly, but we need to learn from them so we don't repeat them. To me, the biggest thing in having a failure is, did you learn from it so you don't repeat it again? If you didn't learn from it, and you repeat it again, that's not acceptable.

What advice would you give someone who is a perfectionist?

It's taken me awhile because, typically, you want to point a finger at somebody and blame somebody for the failure, and that's certainly one of my weaknesses. But, the bottom line is, you can't change what happened. You have to understand why it happened and get it fixed and learn from it so it doesn't happen again. If you don't learn from it and it happens again, that's really a bad situation in my view.

Shear on helping employees understand your mission and values: Keep it so that people can focus on it. If it's too complex, for example, if you have 12 values, that's great, but no one can remember 12 things, so, it never gets focused on. If you have a mission statement that is two pages long, that's great, but no one can really focus on it.