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Fostering leadership: confessions of a mega-company founder

(Business Entrepreneur) Fostering leadership in your company or team can be a tremendous challenge, but the founder of a multi-billion dollar company tells us how their brand has done just that.

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Fostering leadership in your organization

After a distinguished military career, Dr. Ernst Volgenau founded SRA International from his basement, which is now a multi-billion dollar company with over 5,300 employees and endless awards for their innovation. SRA offers IT solutions for big government and professional organizations, solving some of the biggest tech problems today – security, big data, business intelligence, analysis, and more, all while emphasizing honesty and service at every turn.

To discover how a company like this grew to be so tremendously successful, we tapped the mind of Dr. Volgenau who outlines below how to foster leadership in your organization:

For about three decades my company (SRA International) was very successful. We grew rapidly from one person to about $1.7 billion and had a successful IPO and growth on the New York Stock Exchange. The reason for our success was good leadership. Later when we faltered, it was because our leadership declined. Here are a few things we did right and wrong.

One of the first principles of leadership is to communicate to employees precisely what you expect of them. We started with an excellent corporate culture and a good simple business plan. All our successful leadership principles flowed from this basis. The values and culture of SRA have always made it a special company. The basic ethic is Honesty and Service which implies high integrity in business, caring about customers and employees, and giving to society. These values and the resulting culture attracted capable people who led to the company’s success.

The business plan was not a long complex document; it was brief, focusing our energies where we had a market edge. SRA is a professional services company specializing in business analysis and information technology. Our key managers knew that part of their job of leadership was to solve customer problems and to do such a good job in the process that they would get more work from existing customers or references that they provided.

We began with orientations for every new employee and often renewed these discussions after people had been with the company several years. In the meetings we discussed the implications of Honesty and Service. We emphasized leadership obligations, particularly taking care of their people.

We rewarded executives well for success

While their salaries were at the median for the industry, they could get generous bonuses and stock options if they performed well. Although we were privately held company for 24 years, our plan was to go public and we valued the stock periodically so people could see the payoff from owning equity.

All our senior executives (at times more than 100 people) had performance plans. Each plan consisted of two parts. One part was quantitative showing objectives for revenue growth, profit, and new orders. Another part was qualitative, describing objectives for leadership in supporting the corporate ethic. Two key factors were helping their employees to succeed and supporting SRA organizations in addition to their own. The qualitative portion was graded by the supervisor of the executive and a final judgment was made by the CEO. The scores for the quantitative business success and qualitative performance were combined and the total was used to determine bonus and equity awards.

We often held leadership courses led by our most capable executives and including stimulating outside speakers, seminars, and teambuilding exercises. We emphasized various leadership aspects of our culture. Most importantly a good leader must be ethical. Our continuous reminders about Honesty and Service ensured that everyone understood this principle. We sometimes spoke of noblesse oblige, which means roughly the obligation of the nobility to serve society. Our nobility was the most senior people in the company.

“Walk the Talk”

Another precept was “Walk the Talk.” A leader does more than emphasize good principles. He or she demonstrates them through actions. An additional principal was that “the best ideas win.” A good leader listens to the views of his or her employees in order to make the best decisions. By implication a good leader has humility; however this quality cannot stand in the way of decisiveness.

For a few years our company faltered. We were never in danger of going out of business, but our performance was nowhere near as good as it had been. There were several reasons. One was a poor decision regarding an acquisition. Another was the market, which had been vibrant and growing during most of our existence but began to falter. However the most important reason by far, was our lack of emphasis on leadership. The problem was not due to any single decision; rather it was lack of attention to daily details: walking the talk, caring about people, soliciting their views, and many other measures.

An example is career management. SRA had many large computer systems jobs. When each one ended, there was the danger that people would be laid off. Therefore, we established advocates who helped employees find jobs within the company. This was important because our people knew that the company cared about their careers. However, as the company declined, these positions were gradually eliminated to save money. Some employees began to believe the company no longer cared, and attrition increased. The result was probably a far larger cost than if we had not eliminated the positions.

Thus good organizational leadership is much more than a few pronouncements by executives. It requires continuous attention by the senior management team, and then a good deal of patience and determination in maintaining a healthy corporate culture.

The chairman founder, and former CEO of SRA International, Dr. Ernst Volgenau just released his new book, Geeks, Mush Heads and the IT Revolution: How SRA International Achieved Success over Nearly Four Decades.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

Business Entrepreneur

Amazon on a collision course with politicians as they strengthen their monopoly

(BUSINESS) E-commerce has come a long way in the last decade, specifically led by Amazon, but are their controlling ways putting them on a collision course with regulators?

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In March, Amazon stopped replenishing weekly purchase orders for tens of thousands of vendors in a move that has stirred up some trouble. The tech giant has once flexed its power over first-party sellers over their platform. And it’s not the first time.

Amazon originally sent out to vendors as an automated message citing the hold up in orders as a technical glitch. The following day, vendors were told the change was permanent. The affected vendors were categorized as making $10 million or less in sales volume per year and not having managers at Amazon. Vendors selling specialized goods that were difficult to ship were also a factor.

The effects can have remarkable effects on the market as Amazon’s algorithms decide who is able to sell what to whom via their near-ubiquitous platform. According to John Ghiorso, the CEO of Orca Pacific, an Amazon agency for consultation and manufacturers representatives, the decision is driven by financial data such as total revenue, profitability, and catalog size.

In a response from an Amazon spokesperson, the change was made in order to improve value, convenience, and selection for customers. The mass termination of purchase orders and the delayed response from Amazon herald the transition to the One Vendor system, putting vendors in an exclusive relationship with Amazon. This system will merge the current Seller Central and Vendor Central.

Amazon’s message is loud and clear: they will do what’s in their best interest to mitigate the market for their convenience. One may be reminded of the anti-trust lawsuit against Microsoft in 2001.

The lack of warning didn’t do them any favors either.

While smaller businesses need to change for Amazon’s program, first-party business will revolve around larger brands like Nike with whom Amazon is maintaining a relationship.

Despite the streamlined platform Amazon is going for, the company wields power over vendors and customers alike. Capitalism is one thing, but monopolies are a whole other ball game, and politicians are finally paying attention.

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Business Entrepreneur

Culture Codes is the guide you need for company culture questions

(BUSINESS ENTREPRENEUR) One of the biggest sellers of a company to a prospective employee or customer is their culture. Culture Codes has compiled some the biggest companies cultures in convenient decks for you to study and align with.

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Organizational culture is a hot button of conversation. While a variety of definitions exist, one way of defining Culture is the way businesses exist – a summary of values, rituals, and organizational mythology that helps employees make sense of the organization they work in.

Organizational cultures are often reflected in Mission, Vision, and Value statements of organizations.

What many entrepreneurs or new organization struggle with as well, is how to create a culture from the ground up. What kinds of statements and values do they advocate? What are areas of focus? Who are our competitors and what can we do to create a service, product, or quality advantage?

Building a strong culture can be challenging, but a good place to start is looking at the best cultures around.

A new resource by Tettra, Culture Codes, has everything you could want to know on different companies their cultures available for you to study up.

Over 40 companies employing over 280,000 employees have created culture decks and collected core values and mission statements. Companies like Spotify, Netflix, LinkedIn, and NASA have all contributed information.

This information is great for young companies or entrepreneurs to start building a schema about what kind of culture they want to create.

Or existing established companies can look towards peers and competitors and help decide what statements they want to engage culture change on.

For job seekers, Tettra can help potential employees gauge if they are a fit for an organization, or discover that maybe an organization they dream about working for has a culture they may not jive with. And perhaps most valuably, transparently showing off your culture and allowing it to be compared means that organizations can better compete in the talent market.

Recruiters should be obsessed with talking about culture – because it keeps people in the door.

The reasons why people leave employment: work/ life balance, poor treatment, lack of training, or relationship issues with a supervisor or boss; in many ways are a by-product of organizational culture. If you want to compete in the talent market, make culture a selling point and show it off in everything you do.

Even consumer’s benefit from learning about an organization’s culture – values that indicate a commitment to excellence in ethics make consumers feel good about supporting an organization.

It pays to have a good culture. I encourage you to head over to tetra.co/culture-codes and see how companies like Etsy are keeping it real, every day.

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Business Entrepreneur

Simple, inspiring growth hacks from successful startups

(ENTREPRENEUR NEWS) Growth hacks – they’re not the end all be all of tech startup success, but they’ve certainly helped give a major boost to many companies that are thriving today.

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Growth hacks – they’re not the end all be all of tech startup success, but they’ve certainly helped give a major boost to many companies that are thriving today. If you don’t know, a “growth hack” refers to a strategy used, often by tech startups, to rapidly sell products or memberships, and gain lots of exposure and a big following right off the bat. Growth hacks are usually clever, creative ways to maximize social networks, digital or literal, to gain customers quickly.

Quora recently listed a round-up of the “most ingenious” growth hacks. Let’s review three killer examples of growth hacking success:

Groupon remains one of the most obvious growth hack success stories.

In order to unlock Groupon discounts, you have to share them with your friends to reach a minimum number of people buying in.

Merchants can afford to give massive discounts, even losing profits, in exchange for the huge amount of exposure their brand gets.

Groupon and the brands offering coupons both win.

Airbnb’s business model has a built-in growth hack – literally anyone can list their apartment or house, meaning that the growth of Airbnb’s user base knows no bounds.

What is even more ingenious is that when you list a property on AirBnB, you have the option of also posting it on Craigslist.

You’d think more companies would have tried this hack by now, but apparently it took some pretty crafty coding for AirBnB’s tech geeks to figure out how to piggyback onto Craigslist’s audience.

One fabulous growth hacking idea comes from Dropbox. Refer a friend on Dropbox and get free extra storage space.

The storage space is relatively cheap for Dropbox to provide, but the referral is valuable.

This is exactly how I myself got into Dropbox, and every time I want to share a file with a friend, I recommend that they download Dropbox. As a file sharing platform, it makes sense for me to want the friends I share files with to be using the same platform.  This model has worked out so well for Dropbox that other companies are now offerings freebies in exchange for referrals.

Growth hacks won’t save a company without a solid business plan and sound investments behind it – but they can be a great way to utilize social networks to boost growth and establish a broad audience right from the start.

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