Mind Your Business

Mind Y ur Business

Dr. Rich Roberts: Loyalty Begets Loyalty

By Yitzchok Saftlas

Every Sunday evening since July 2015, Yitzchok Saftlas, CEO of Bottom Line Marketing Group, hosts 77WABC’s “Mind Your Business” show on America’s leading talk radio station. The show features Fortune 500 CEOs, CMOs, and top business leaders where they share their business knowledge and strategic insights on how to get ahead in today’s corporate world. Since Q2 2017, the 77WABC “Mind Your Business” show has remained in the coveted Nielsen “Top 10” in New York’s highly competitive AM Talk Radio market. Guests have included John Sculley, former CEO of Apple and Pepsi; Dick Schulze, founder and Chairman Emeritus of Best Buy; Beth Comstock, former vice chair of GE; and Captain Sully Sullenberger, among nearly 200 senior-level executives and business celebrities.

TJH will be featuring leading questions and takeaways from Yitzchok’s popular radio show on a bi-monthly basis.

On a recent 77WABC “Mind Your Business” broadcast, Yitzchok Saftlas (YS) spoke with guest Dr. Richard H. Roberts (RR), M.D., Ph.D., medical doctor, doctor of biophysics, and former pharmaceutical industry CEO for 24 years (URL Pharma).

YS: Could you please discuss the process of hiring new people?

RR: Hiring is one of the most critical areas of a business. It depends what kind of position you’re looking for – there are obviously very different qualifications that are needed for different roles. Then you need to try to sort through all the applications and figure out if you’re actually getting that right person. If you make a mistake and you get the wrong person, it could be a whole lot of headaches and potentially legal entanglements. So, hiring is really, really critical.

Let’s just talk about the basic hiring of people. You must know what you’re looking for and you need to write a somewhat detailed job description. Don’t bypass this. If you’re looking for someone who’s going to work in your warehouse and is going to be able to pack boxes, that’s one skill set. If you’re looking for someone who’s going to run finance, that’s an entirely different expertise.

Then you’re going to get in a resume for this position. First of all, look for how long this person has stayed in previous jobs. If you find someone has changed jobs many times and they’ve been in five different jobs in the last ten years or less, that’s a real warning sign. Now they’re going to tell you all the reasons – this management team didn’t know what they were doing, that company is going out of business – everybody’s got an excuse, but it’s a real warning sign. Did they not get along with people? Did they talk a good game, but then when it came to performing, they really didn’t perform? Are there other skeletons? Is there theft? Is there fraud? I’m not saying it can’t be good. And there are some people who switch jobs every couple of years because they are on an upwardly mobile path. With those people, you’ll see that they were a supervisor, and became a manager, and became a director, became vice president. But even with that, if someone’s trumping jobs all the time, there is no loyalty. So that’s one warning sign, when you see them changing jobs a lot.

Another thing to do is to question them on the details of their resume, especially as you get to higher levels of capability and expertise. If you don’t have the expertise yourself, have someone in the room who does. For example, if you don’t know research and development, make sure you have somebody from R&D in there. Look at what they put on the resume, and find out if they really know the things they claim to know.

YS: Another question that has to do with the resumes. What’s your take on the references that someone lists on a resume? RR: Generally, the references on a resume are worthless. If someone applying for a job is even mildly capable, they’re going to make sure that they spoke to these people first. These are their supporters. When looking at the references of the resume, it’s helpful because it tells you who not to call.

However, you must check references, so call the companies the person worked for. Or you can speak to the references listed and ask them for names and numbers of other people who worked with this guy. And then you go to them and that’s how you get information.

YS: Do you have any advice on what to look out for during the actual interview?

RR: When I would hire people – this was at any level – I would see what they look like during the interview. Are they sitting back in their chair or are they sitting forward looking bright-eyed and bushytailed, ready to go, high energy? You want someone who’s ready to charge forward. No matter what the job is, you really want to get someone who’s bright-eyed and bushy-tailed.

Additionally, when I would hire people at higher levels, the one question I would ask them is: what jobs

are below you? And if there’s anything that’s below them, I didn’t hire them. Now, I’m not hiring somebody at that level and paying them that amount of money to mop the floor. But let’s say we have a big customer coming in and the floor has to be mopped and nobody’s around. If they’re not willing to do it, I don’t want them. It’s not because I need that floor mopped it’s because they have an attitude and arrogance.

YS: Let’s move on to loyalty. If the CEO is being a mensch, most people will be menschlech because it starts at the top. That being said, let’s dig into building loyalty to the point where people stay, they’re enthusiastic, there’s low turnover…

RR: I’ll tell you a little story. In 1997, our company was potentially facing bankruptcy. At one point, we were three weeks from bankruptcy and everyone in the company knew we were in bad shape. It’s important to tell your employees the truth, tell them what’s going on, except in certain circumstances where senior management has to be willing to take the anxiety and take the heat and protect the people from being too worried.

When we were about three weeks from bankruptcy, we had an investor group – Elliot Associates, one of the largest hedge funds in the country – come in. They had someone representing them in this deal to buy into the company, give us money, and who would also be on the board of directors. And at one point I told them, “This is a closed meeting. The employees are not around. Everyone here knows that we’re in severe financial straits, all the employees here know that I love them and that I care about them. And I pledged to the employees that I will not get a raise until they first get a raise. I don’t know if we’ll survive or not. But I’m telling you, if we do survive and if we become successful and eventually, we can sell the company or go into the stock market and get money. Every employee must get stock options now so that they will profit from that, from their loyalty to me.”

This group agreed, and they ended up buying in. The deal was done twenty-four hours from bankruptcy. Three years later, we got back to break-even. And the representative for Elliott Associates said, “I want to tell you something. The ultimate reason why we did this deal is when we saw how you stood up for your employees behind closed doors, we knew that we could trust you with our money when we’re in Manhattan and in Wall Street and you’re here in Philadelphia running the company.”

I didn’t tell them this, because I thought it would help them to invest – that didn’t even occur to me. It was just a case of showing true loyalty. You can expect your employees to be loyal to you if you’re going to be loyal to them. And by the way, it’s not enough just to be loyal to them and to care about them. You have to tell them that you care about them. You have to tell them that you’re loyal to them. YS: We’re going to talk about the very sensitive topic of moving people off the bus when necessary. Firing. It’s not a pleasant subject, but it’s something that all too often companies struggle with and they hold on to the wrong people for too long. Dr. Roberts, you could be as open as possible about the very delicate subject of when a company has to fire an employee.

RR: OK, there’s many, many issues when it comes to terminating an employee. Some cases are very easy. You know, we had one guy who was dealing crack out of the men’s room – that wasn’t so hard. And there are a few other times when some people were stealing narcotics, and we had to run undercover investigations, one actually in coordination with the Drug Enforcement Agency (DEA), so those are not complicated.

Then you can have an employee who is just not doing the job that they’re supposed to do, coming in late, leaving early, not coming back from lunch break on time, performing poorly. If you don’t have an experienced human resources manager or director, you need to work with the human resources attorney. You first give the person a verbal warning. You always want to have two people on

“When we saw how you stood up for your employees behind closed doors, we knew that we could trust you with our money.”

your side to witness it. You must write a memo detailing who was there and what you told them the issues were. Then, if they don’t correct them, you have to give them a written warning. If they’re really just not up to getting the job done for whatever the reason is, you can then go to either a final warning or a performance improvement plan where you say we’re going to give you three months or whatever it is to improve. They need to achieve this and this objective, in that period of time. And if not, then they’re going to be terminated from the company. You would do this always in consultation with an attorney; you will not send any such memo without the attorney reviewing it first. And you might have to accelerate the process depending on how bad the employee is in many cases.

In some cases, you find an employee is badmouthing the company. They’re stirring up discontent among the employees and poisoning the environment. And in that case, you may just have to terminate their employment.

If you pay a severance package, only with a human relations lawyer guiding you, create a separation agreement in which there will be things like non-disparagement clauses, where the employee agrees not to say anything bad about the company and employee agrees not to go to another company and try to hire your key talent away or those types of things. And by the way, a very good way to pay these things out is at their normal rate of pay. So, in other words, if you’re going to end up giving them three months of salary, and they get paid every two weeks, you’re going to continue to pay them their severance once every two weeks until the three months are up. That way, if they do start disparaging the company, doing something to hurt you, that’s against this agreement, and you just stop the payments.

YS: This is an unfair question I’m going to ask, but perhaps

you could share some final

takeaways with us?

RR: Be very careful. Do the work when you hire, and you have to manage people. Remember, if you’re the president of a company, a CEO of a company, people are going to look at you as an example.

I was determined I would be hardest working person in the entire company. Nobody would outwork me. And you set that example. You set the example for honesty, you set the example for loyalty, and your employees will emulate it. And if you set the example in the opposite direction, expect your employees to emulate that also. You don’t do it because it’s good for the company, you do it because it’s the right thing to do.