Innovation

Bright ideas!

Written by Rick Spence

Lease a fleet of Minis for your best people. Edit down your business plan. Make job candidates compete. Call Gen. Norman Schwarzkopf. Get up at noon. Clearly, you don’t get to be one of Canada’s Fastest-Growing Companies by doing business the way most people do.

To support their breakneck expansion, the PROFIT 100 are constantly searching for new ways to beat the competition and wring greater results out of traditional business practices. Some of these innovations may be brilliant, while others are not guaranteed to work for everyone. Still, the sheer breadth of these management tools, tips and tactics should inspire every business owner looking for better ways to get things done.

MANAGEMENT

Open your books

To increase employee alignment with company goals, IT services provider Dyrand Systems Inc. (No. 79 on the 2007 PROFIT 100) of Burnaby, B.C., has just adopted weekly staff huddles and open-book management. Dyrand follows a program called The Great Game of Business (www.greatgame.com), created by U.S. entrepreneur Jack Stack. The Great Game applies sports concepts (e.g., explain the rules, keep score) to teach employees about business and how their role affects profit and loss.

At an all-employee huddle every Tuesday morning, Dyrand CEO Trent Dyrsmid shares the latest weekly results—sales, cost of goods sold, profits, etc.—with his staff and then discusses how they can be improved. Each staff member assumes responsibility for one line item, from revenue to sales costs.

Since launching the program a year ago, Dyrsmid says his employees have begun thinking constantly about new ways to boost the business by improving the metrics for which they’re accountable. Example: one order-taking employee pointed out that Dyrand had begun performing IT services for some clients that had never been contracted—and were thus generating no revenue. By cracking down on “scope creep” and charging for those services, Dyrand is now recouping an extra $1,000 a week in pure profit.

Treat managers like entrepreneurs

André Couillard of Procom Québec Inc. (No. 48), a Montreal-based IT consultant, wants his top 16 managers to think like entrepreneurs by balancing opportunities against costs. “We push it as far as possible,” he says. “They’re set up like commissioned salespeople, but we also tie [their compensation] to expenses related to their activities. Any time they’re making decisions that affect the profitability of projects they’re driving, it’s going to affect them as well.”

Couillard admits it was hard at first convincing people to take responsibility for risks as well as successes. But once they realized they would control their own fates, they understood the upside. “If you make the right decisions,” he says, “you can make a lot of money.”

Make your business plan matter

Lots of companies have long, complex business plans that sit on the shelf. Toronto-based sales training firm Fusion Learning Inc. (No. 74) makes its strategic plan a well-worn business tool by keeping it short (the three-year plan fits on one page) and referring back to it at monthly staff meetings. Managing partner Kevin Higgins shares objectives and month-by-month results with his nine full-time employees, using a PowerPoint presentation with fewer than 30 slides. “We really simplify the plan and follow it,” he says. Making sure everyone on staff has “shared purpose” pays off, he adds. “For many small companies, it’s very tempting to change your direction. Every other week, someone comes to you and says, ‘Let’s do this, or try that.’ I’m a big believer in keeping it simple.”

Delegate!

An overworked entrepreneur is no good to anyone. “I used to be responsible for everything,” says Procom’s Couillard. “I was going crazy.” He recently realized he had so much on his plate that he was becoming unresponsive. So, he gathered his top seven executives, identified his 12 key responsibilities (including marketing, productivity, IT and office space), and then handed off all but one—employee training—to his subordinates. “They have to pull people together, brainstorm and delegate. Now, instead of problems coming to my desk, I get solutions.”

Besides, says Couillard, this new responsibility is a retention tool for his best people. “If they’re not going to grow here, they’re going to grow someplace else.”

HIRING

Poach for profit

When Matias Corp. (No. 78), a producer of computer cases and keyboards, needed a creative, energetic customer-service representative, it took the guesswork out of hiring by offering the job to a postal clerk in a nearby drugstore. Both Matias’s CEO and CFO had been dealing with her for years, noting how conscientious she was. “We didn’t know her personally, but you could tell she had a good attitude,” says Edgar Matias, CEO of the Vaughan, Ont.-based firm. “She’s great. It has worked out well.” He says fab employees are everywhere—in restaurants, offices and stores. “You have to keep your eyes open, so that when a good person shows up, you can pounce.”

Make your applicants sweat

To hire the best people for its software-development department, Vancouver-based CityXpress Corp. (No. 21), which sells online-auction services to newspaper publishers, has embraced group interviews. Candidates are first interviewed by the head of the department, then given a software test to gauge their skills. Anyone surviving those two rounds meets with the lead developer, and then gets an interview with the entire department, which could be 10 to 12 people. Staff are encouraged to probe both the person’s ability to do the job and his or her likelihood of fitting in with their team. The payoff? All of the department’s last 10 hires have worked out superbly, versus an average of only seven out of 10 before CityXpress broadened the process. That saves the company a lot of money. “In software, it’s going to be six months before you know if the person is going to cut it or not,” says president and CEO Phil Dubois. “Eight to 12 people spending a half-hour interviewing a person is a small amount of time invested in making the right hire.”

Try before you buy

Fed up with guessing people’s character from résumés, online retailer MediaWave Communications Corp. of Kamloops, B.C. (No. 49), took a new tack in recruiting a shipping/order-processing clerk. CEO Grant Robertson paid six candidates $20 each to work in the warehouse for an hour. Each rotated for 10 minutes through different workstations that tested their ability to read a shipping order, take inventory or package a product. Robertson also threw some curves: one task took only five minutes, so his staff could watch to see how candidates spent the rest of their time. In another case, the applicants had to walk over a broom “accidentally” left on the floor.

At the session’s end, MediaWave hired the only candidate who picked up the broom and put it away. Says Robertson: “I need people who can see what needs to be done and take the initiative to get it done.”

INTERNATIONAL EXPANSION

Climb the family tree

How do you get consulting work with multinational giants such as Johnson & Johnson’s Vistakon, the world leader in disposable contact lenses? Fusion Learning targets Canadian subsidiaries of international companies and then leverages those relationships to gain work at other divisions and in markets of the parent company. Fusion started out by teaching sales skills at Vistakon’s Canadian head office in Toronto, then used the contacts it gained to sell its services to Vistakon HQ in Florida. “We work hard at engineering referrals,” says Higgins. Without a pre-existing relationship, “we never would have called on a prospect in Jacksonville. The cost of sales is too high.” International clients such as Reckitt Benckiser (makers of Lysol) and pacemaker producer St. Jude Medical now generate 20% of Fusion’s revenue.

Be a night owl

Matias Corp.’s computer accessories are mostly produced in China. As time is of the essence, CEO Edgar Matias found a way to speed up communications with his suppliers in China. When a project is time-critical, he works through the night so he’s in his office while they are in theirs. Otherwise, the 12-hour time difference means that getting a response to an e-mail may take 24 hours. “A five-minute conversation can take you a week,” complains Matias. “If you can solve that, you can get problems fixed very, very quickly.” Working till the wee hours of the morning works, says Matias, “as long as I can wake up whenever I want.” Single with no kids, he says there’s one other advantage to holding down the night shift: “With no interruptions, I can get a lot of work done.”

Disappear the border

Halifax-based Armament Technology Inc. (No. 30) sells weapon-sighting systems, almost 30% of which go stateside. President Andrew Webber learned years ago that U.S. customers don’t mind buying from Canadians as long as they never see any paperwork, taxes or duties. “You want to make your service and your company look transparent to the U.S. customer,” he says. Armament subsidizes shipping by charging a $10 flat rate (about the same as shipping products across two or three states). It always ships by FedEx within two days, bills in U.S. dollars and looks after all export/import documents. When a customer is charged duty by mistake or hassled by paperwork, Armament jumps in and takes full responsibility, says Webber: “The customer shouldn’t have any surprises.”

MOTIVATION

Treat your culture well

Like most of the PROFIT 100, Vancouver contact-lens e-tailer Coastalcontacts.com (No. 18) is adding new people all the time—and trying to retain the culture that first made it special. “The only way to scale the company properly is to make sure the core values cascade throughout the organization,” says CEO Roger Hardy. Late last year, the company found a new way to do that: by creating a quarterly contest that sees one staffer from each of the company’s five divisions win the right to drive a company-branded Mini Cooper for free (including gas and company parking) for three months.

Managers award employees stickers or stars for acts that represent the best of Coastalcontacts’ core values—concepts such as bias to action, innovation and team play. Come up with a good idea and you get one sticker. If the idea is implemented, you get three. Any staffer who earns more than five stars in a quarter gets a free iPod, meaning almost everyone can be a winner. The program’s cost? “It doesn’t cost us more than renting two billboards in the city,” says Hardy.

Wear your ethics on your sleeve

When passion stirs people, there’s no limit to how far you can go. Just ask Steven Myhill-Jones, CEO of Latitude Geographics Group Ltd. (No. 35). His Victoria-based firm, which provides Web-based mapping services, only takes on ethical projects that will contribute to the well-being of people, the world and the management of natural resources, and it communicates those values to staff, clients and through its website. The firm even cites the Geneva Convention in its software-licence agreements. “If we feel that a project won’t leave the world better off than when we started, we won’t do it,” says Myhill-Jones. Such a commitment to core values goes a long way toward attracting and keeping ardent employees who are impassioned by social responsibility. And turning down off-mission projects doesn’t seem to have hurt Latitude: the company’s 2006 revenue hit $3 million, up 1,603% from five years earlier. “Being able to get up in the morning and feel proud of what you do is big,” says Myhill-Jones. “For the generation of workers that we’re trying to attract, that’s been really important.”

Pay—don’t delay!

Claybrooke Marketing Inc. (No. 58), a marketing services provider based in Oakville, Ont., conducts performance reviews of its team every three months and offers quarterly bonuses based on performance. CEO David Harvey says the fast pace “helps accommodate our growth, because people’s roles and responsibilities change so quickly.”

SALES & MARKETING

Call in the ARMY

Ottawa-based C-Com Satellite Systems Inc. (No. 102), a provider of mobile satellite-Internet services, wants to market to police, fire departments, emergency organizations and government agencies worldwide that don’t know its technology exists. To get their attention, it has just produced an infomercial introduced by U.S. Gen. Norman Schwarzkopf, hero of the first Gulf War. Besides C-Com’s website, the four-minute mini-doc will be shown on U.S. television, airline in-flight entertainment programs and YouTube. With Schwarzkopf’s high profile to attract attention, C-Com CEO Leslie Klein expects his message to reach 80 million viewers. “I think it will put the company on the map,” he says. “The price was very reasonable, and we got out of it a high-quality, professionally made video and DVDs which we can distribute and use.”

Make your clients rich

Happy clients are repeat customers is the mantra at CityXpress, so it goes the extra mile when it comes to service. With some 500 auctions under its belt, the online auctioneer burrows deep into its statistics to find out what sells and what doesn’t, and shares them with customers. The stats help media clients plan their sales campaigns by letting them know which vendors to approach, which items they should be asking to be put up for auction (e.g., appliances, electronics, golf packages) and which items to avoid. “We even send a training group into the market to help clients go out and sell,” says CEO Dubois. (He calls it the “four-legged sales call.”) Offering clients hands-on help boosts their sales results by 30% to 50%, he says, which solidifies the client relationship. Plus, since CityXpress’s fees include a percentage of sales, “the more we can do to help them succeed, the better off we are.”

Match sellers with what you’re selling

Bandwidth-boosting specialist BTI Photonic Systems Inc.(No. 5) deals with big-league telecom companies, so it puts its best foot forward. “We hire only very experienced sales executives who have worked in large companies selling systems-level products,” says CEO Lance Laking. “They have relationships and understand the process of selling what we sell into networks. We don’t learn as we go.”

Ottawa-based BTI doesn’t expect to do business with giants such as AT&T directly. Instead, it leverages existing relationships into referrals. For instance, in North America, BTI’s biggest distribution partner is Fujitsu, a long-standing supplier to major telecoms such as AT&T and Verizon. “That’s how we introduce our products to the major carriers,” says Laking. Among the big clients BTI has landed through its partnering strategy are Denver-based Qwest Communications and Philadelphia-based Comcast Corp.

Pour on the referrals

Collecting testimonials from clients and using them for referrals is easy. But few companies actually do it. CityXpress Corp. is among this select group. The company sells online-auction services to newspaper companies such as CanWest MediaWorks as a way of winning back some of the ad revenue lost to online media. But president and CEO Phil Dubois admits some of the company’s clients are wary of adopting new products and technologies. To combat that uncertainty, CityXpress offers prospects armloads of referrals—from newspapers and participating advertisers. Its website and sales presentations are awash in customer testimonials and “success stories” that include detailed client tactics and real revenue numbers. “We encourage clients to phone as many referrals as possible,” says Dubois. “The poor early adopters got lots of calls.” Today CityXpress has some 350 newspaper customers in 15 countries, including the Sydney Morning Herald, Dallas Morning News and El Tiempo in Bogata, Colombia.

Party with your partners

Disc Go Technologies Inc. of Langley, B.C. (No. 19) sells machines that repair scratches on CDs and DVDs. Its 15 distributors in Europe need attention and information, so Disc Go Tech holds a conference for them every spring. Day 1 is for listening to their concerns, while Day 2 covers Disc Go Tech’s new products and how to sell more of them to video stores and libraries. CEO Mark Chaplin says the conference of about 25 people, who will meet this year in Athens, generates relationship-building and feedback that electronic communication still can’t match: “When we get together, we hear about problems that just aren’t big enough to complain about from a distance.”

FINANCE

Drop your banker, call your buddies

Talk about your cash-flow problem: There can be 10 months between the time Matias Corp. pays for its computer accessories to be made by Chinese producers and the time Matias gets paid by Future Shop and other retailers. With the banks unwilling to help CEO Edgar Matias bridge the gap, he devised a program by which the company borrowed money from employees, family and friends at 10% annual interest. While the loans were unsecured, Edgar made it clear that any lender could ask for their money back at any time.

Matias Corp. just launched a second loan program. Lenders will lock in their money for a full year, at 10% interest, but it will be backed by actual inventory. While 10% sounds high, Edgar notes his products are pretty profitable—and that alternative lenders, such as the Business Development Bank of Canada, would probably charge him 13%. So far, he says, he’s had little problem raising $1 million this way: “We didn’t have to talk to too many people.”

Originally appeared on PROFITguide.com