An interview with CEO Ron Alvesteffer
The following blog is an interview with Ron Alvesteffer, CEO of Service Express Inc. (SEI), a provider of on-site data center maintenance services for mid-to-large enterprise companies across the US. They are headquartered in Grand Rapids, Michigan and have locations in 15 states.
Walk by the offices and workstations at Service Express, Inc. (SEI) and like almost any company, you’ll see the name plates listing the person who occupies that space.
In addition to their name, however, you will also see the list of that specific employee’s individual strengths based on the Strengthfinders 2.0 framework by Gallup, http://strengths.gallup.com/default.aspx.
It’s not just for show.
Ron Alvesteffer, CEO of SEI, has centered the company solely on helping employees achieve their personal, professional and financial goals. The Strengthfinders tool is one way they seek to improve the way they communicate, coach and position their employees for success.
Many CEOs think about employee satisfaction and success as a supporting objective and often secondary to revenues, profit and customer satisfaction. While nearly every business leader sees employee satisfaction as important, most see it as soft and challenging to connect it to results.
Alvesteffer views it the other way around. After more than 10 years after establishing this vision, it’s challenging to argue with Alvesteffer’s view when you look at SEI's impressive results:
- 98% customer retention rate
- 10% average employee turnover
- Average revenue growth of 20% over the past 10 years
- Recognized as one of the 101 Best and Brightest Companies to Work For
- Selected as one of Fortune's America’s Best Small Companies
- Named one of the 5000 Fastest-Growing Private U.S. Companies by Inc.
I had the opportunity to spend some time with Alvesteffer during a recent visit to hear more about the vision, the performance and how creating the right culture has been the key driver for success at SEI.
Here are the key takeaways helpful to any CEO looking to create a performance culture:
“The soft stuff is really the hard stuff,” Alvesteffer shared in regards to anyone who thinks investing in employee development and company culture is too soft.
SEI invests in people.
Strengthfinders assessments and training is one example of SEI’s commitment to their people. In addition, every employee at SEI is required to formalize their personal vision and create a “Vision Talk” that specifically outlines their personal, professional and financial goals.
This vision is reviewed with their manager at least twice per year. Alvesteffer asserts that knowing an employee’s goals allows for strategizing company opportunities that align with people’s vision goals and thus creates a powerful business dynamic.
Alvesteffer walked me through a training lab for their technicians that duplicates the data center environment and equipment they service and maintain for their customers.
Technicians learn and “play” within an environment that gives them real-world training and an opportunity to try new approaches to the typical and unique maintenance issues that their customers will face.
The investment in space, equipment and providing the technicians the time to hone their skills is significant, but supports the company vision and is a differentiator in terms of talent development.
SEI takes hiring seriously.
They have a detailed, in-depth hiring process and make a point not to establish hiring deadlines. As a part of that process they warn potential candidates early that it won’t be a speedy journey.
Alvesteffer wants both the company and the candidate to have taken the steps necessary to ensure a good fit. He believes that hiring deadlines increase the likelihood for poor decisions and that a bad hire is of greater risk to the business than keeping a position open a little longer until the right person is hired.
Clear objectives & measurement for all.
SEI has four core objectives that are clear to everyone:
- Employee satisfaction
- Excellent customer service
- Revenue growth
- Margin retention
No decision at SEI gets made without bouncing it off the four core objectives. If a decision can make a positive impact to all four objectives, then Alvesteffer feels confident it’s a good decision.
He and his executive team acknowledge that not everyone agrees with every decision, but having the four core objectives gives them a compass that can provide a clear explanation for how the decisions connect to those objectives.
Scorecards aren’t just for those in the management ranks at SEI, it touches every employee.
Alvesteffer believes in the adage, “What gets measured, gets done.” They’ve established a performance measurement system called SR5, which includes three components:
- Scorecards: Track goal achievement on a company and department level
- ROI's (Return On Investment): Track goal achievement on an individual level
- 5/15’s: Personal development plans for each employee outlining quarterly priorities tied to activities on results. SEI believes that each plan should take no more than 15 minutes to prepare and no more than five minutes to read.
SEI has also invested in systems that help to enable measuring what’s important and ensure everything is connected to achieving their four core objectives. As an example, large screen monitors are in clear sight within the inside sales team’s workspace showing individual and team progress toward objectives.
The team is measuring and celebrating as individuals and the team achieve key metrics that are tracked using a software application provided by LevelEleven.
Too much growth can be bad thing according to Alvesteffer. He believes there’s a real value in planning and managing to a 15 – 20% expectation for SEI so that the other core objectives can be achieved.
Growing too fast can outpace service and operational capacity, which over the long haul will take away from employee satisfaction and customer service – two of their four core objectives.
“I’m not interested in growth for the sake of growth,” Alvesteffer says.
Lead from where you are.
Alvesteffer shared that their best managers are those who volunteered to take the lead on key projects or initiatives before they were in formal management roles.
“It seemed whenever we promoted someone who wanted the title before they would take on additional responsibility, they wouldn’t deliver as we had hoped. Those who bring ideas to the table and are willing to take the lead before being promoted are far more successful,” Alvesteffer said.
“Whenever someone advocates that they should be a manager, we look for whether or not they’re already demonstrating leadership from the role they are in right now.”
Additionally, SEI invests in three leadership summits a year in which they focus on strategic planning and leadership development. Maintaining the vision for helping employees achieve personal, professional and financial goals requires managers and leaders who are well equipped to make that happen.
Communicate, Communicate, Communicate.
Incorporating a consistent and regular meeting cadence at all levels in the organization is a key driver to keeping the two-way dialogue flowing in the organization.
Alvesteffer and his team have a routine that incorporates daily, weekly, monthly and quarterly meetings that serve to reinforce their priorities and enable good decisions focused on their core objectives. Alvesteffer and his management team also recognize that good leaders empower their teams by getting out of their way.
“When we expanded our corporate headquarters we made a purposeful decision to get our offices (executive team) out of the mix with our managers so they could make day-to-day decisions without having us hover or jump in on the details we’ve trusted them to take care of,” Alvesteffer shared.
“They wanted us out of their hair and that allows us to focus on the longer range priorities for the business. This also allowed us to focus on the strategic initiatives we would need for the next 3-5 years.”
Despite the success, Alvesteffer remains humble and gives all of the credit to the team around him.
In their company handbook titled The SEI Way: Values and Practices of a Growing Company he writes, “We’re not saying that ours is the only way to do business – just that it is our way and it has worked for us.”
For more information on SEI, the SEI Way and Ron Alvesteffer, you can visit www.seiservice.com.
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