The Best Bosses
These 15 leaders, all MASTER MOTIVATORS, know how to win the race in fair or foul weather.
(FORTUNE Small Business) – Fans of Thoroughbred racing like to say that there are horses for courses: Some run best on firm turf; others love the mud. But what about when a sloppy track is just starting to dry? That's the kind of economy small-business owners confront right now. It requires an all-terrain boss—one who can motivate employees through a rough patch of continued belt-tightening and also plot new ways to exploit the growth opportunities that are just emerging as the economy warms up. To succeed in this environment, says Jay Mattie, a top consultant at PricewaterhouseCoopers, "you have to be really good at the strategic side and probably even better at the people side."
Such leaders are rare, but we've found some excellent examples in FSB's second annual Best Bosses competition. In collaboration with Winning Workplaces, a nonprofit organization in Evanston, Ill., that helps small businesses adopt successful workplace practices, FSB reporters combed the country for six months and identified 210 nominees. We asked about their employee tenure, benefits, management challenges, and metrics for measuring success. From their responses, FSB editors and Winning Workplaces executives selected 35 finalists, who answered a second set of questions about employee training, financial incentives, and information sharing.
FSB interviewed employees, advisors, accountants, and attorneys who were familiar with the finalists. Then, to evaluate the finalists, we enlisted a panel of distinguished judges:
• Ed Gubman, co-founder of Strategic Talent Solutions in Northfield, Ill.
• Myra Hart, an entrepreneurship professor at Harvard Business School who was a founding officer of Staples.
• Rosemary Jordano, founder of Children-First, a provider of corporate-sponsored backup child-care coverage and one of last year's Best Bosses.
• Mary Clark and Ken Lehman, executive director and chairman, respectively, of Winning Workplaces.
We emerged with a roster of 15 outstanding leaders. Several have been tested by crises—from the sudden loss of a major revenue stream to increasing competition from powerful rivals. Success—and in some cases survival—depended upon making calculated bets that leveraged their employees' loyalty and talents.
For example, when the economy turned down in 2001, Pohly & Partners, a producer of custom publications in Boston, needed to cut $400,000 from its budget. Instead of laying off any of her 39 employees, CEO Diana Pohly, 47, persuaded six senior managers to swallow 15% pay cuts, while reducing staffers' salaries by 10%. Pohly held negotiation classes so that employees could help reduce costs. The company eked out a small profit in 2002 and then a profit of about $400,000 on sales of $10 million last year. "Our story is one of survival built on trust, teamwork, and group sacrifice," says Pohly.
Several of our Best Bosses used creative methods to coax extraordinary performance out of their employees in daunting circumstances. Ron Huston, CEO of Advanced Circuits, a maker of custom-printed circuitboards in Aurora, Colo., motivates his 185 employees with generous bonus and profit-sharing awards. What makes his approach unusual is that he steers employees with constant numerical feedback about every aspect of his business, which he posts on the company's intranet. To boost the quality of the firm's circuitboards, Huston once let employees take a sledgehammer and whack at a $200 junk car every day that errors were held below a certain rate. Such incentives have helped Advanced Circuits' revenue to grow at a double-digit rate for the past seven years—while most competitors have shrunk or gone out of business as overseas competition intensified.
The past few years of uncertainty about the economy and national security has made business leaders' jobs tougher but has also moved many employees to demand more purpose in their work and a deeper connection to their workplace. "People want more human, more real, more sensitive leadership than they were getting," says Kerry Bunker, an organizational psychologist at the Center for Creative Leadership in Greensboro, N.C. That doesn't mean workers want hugs and free massages: They will accept change and sacrifice if they feel that the boss is leveling with them and that they will share in the rewards when things turn around. If our Best Bosses prove anything, it's that there are lots of ways to develop the kind of allegiance that keeps a company running through the slop and poised for acceleration.