[The following is the full raw transcript for a LEADx Podcast interview, which has been lightly edited for clarity.]
Kevin Kruse: Hey everyone, Kevin Kruse here. Welcome, to the LEADx Show, where we are helping you get just a little bit better every single day. Now don't forget, you can get a free management, or productivity video course every single day over at LEADx.Org. Why wouldn't you tell all your employees about it? Today on the show I talk to a man who went from janitor to CEO, of what is now a 1.3 billion dollar company. He talks about creating a great place to work culture, one on one meetings with no agenda, and they actually have 300 open positions. Need a better job? Hmm, pay attention.
Our challenge of the day inspired by his failure story is, go fire someone. Alright, maybe not literally. But if there is a decision you've made that isn't working out, today make it the day you end it. You reverse it, you shut it down. Muster up the professional courage, and let go of that person who is not working out. Shut down that marketing experiment that isn't generating high enough returns. Cancel those meetings next week that you know you really shouldn't be involved in. Shut it down.
Our quote of the day, “I am not a product of my circumstances, I'm a product of my decisions,” Stephen Covey. Our guest today is the CEO of Kronos, a company that provides workforce management software. He joined right out of college in 1979, when there was just a few employees. And today, he leads the company, which has over 5,000 employees, does 1.3 billion dollars in revenue. Kronos has been named a best place to work by The Globe and Mail, The Boston Business Journal, and The Montreal Gazette. He's personally one of the highest rated CEO's on Glassdoor, and recently won the Ray Stata Leadership and Innovation Award. Our guest is Aron Ain.
So Aron, I believe failures are stepping stones, there's no win or lose, only win or learn. I'm hoping you're going to tell me a story about one of your best failures, and what did you learn from it?
Aron Ain: Oh gosh, given in my career, I've had so many failures. You're going to force me to pick one? We could have this whole conversation about Aron's failures. I would say that on one dimension, it's our ability to hire great people, and there was one particular position when I was the CEO, where I needed to hire someone to fill a super senior level position, managing a group of about 1,000 people at the company. And, spent about seven months evaluating the market, looked really carefully, got to finalists, interviewed finalists, did references, did backdoor references, made an offer. The person started, and it was clear after a couple weeks that the person wasn't what we thought they were.
I had a conversation with the person, thought we got realigned. It still wasn't working out, and six or seven short weeks later, someone who worked directly for me, I had to say, “This just wasn't working.” I consider that to be a colossal failure given how important this position was.
Now, the learning from it was, I then proceeded to call up each of my board members individually to tell them and apologize that this happened. Basically their response surprised me. Their response was, “Gosh, I wish all our other CEO's would go and make decisions as quickly when they recognized they made a mistake.” I viewed it as a real failure for a really important position, having spent so much time to recruit the right person. And, they viewed it as positive that I went and did something about it so quickly. Not only is this an example of a failure, but how failing and doing something about it ended up representing a positive thing. Not just to my board members, but also to the team members who were within this part of the organization that had this person that wasn't working out.
Kruse: You know, there's so much to learn there, but I think so many of us our non confrontational, and we hope the person works out, and we don't want all of the work of having to recruit someone from scratch, and we put off that decision often far longer than we should. Even we know we've made the wrong decision, it's not a right fit, or whatever. Still, we often delay that don't we?
Ain: Yeah, we do. Courage, being a great leader, takes tremendous courage. And courage is defined as making these touch decisions, particularly when they deal with people. I think as leaders the better we can do in having courage, and it does take courage to be a great leader. Nobody likes having conversations that are difficult, and particularly when they impact people around us. You'll be a better leader and a better manager.
Kruse: Now Aron, in the show intro I shared the incredible success of Kronos, and your personal career path. Your brother was one of the Founders, and you joined the company in 79 I believe, when there was just a few people on board at the time. Tell em about those early days. What was it like when you first joined the company?
Ain: Oh gosh, we were all young and didn't really know what we were doing. We knew we had a good idea, but how to do it exactly, we were exploring. It was like a six, seven day a week job. We all worked every Saturday, and most of us worked on probably every other Sunday, and trying to get the company going. And everybody did everything. There was no such thing where you just were in a functional discipline. For me, I was doing sales, I was doing service, I was doing support, I was doing finance, I was doing marketing, I was cleaning the bathrooms. I was first on the alarm list at 2:00 in the morning when the alarm would go off. It was fun, and it was invigorating. We got to know each other. It was a wonderful learning opportunity for me.
Kruse: Anything you miss about those early days?
Ain: I don't know if I miss things about it. I like Kronos better as a bigger company, 'cause we have more resources to do things, that help us be more effective in taking care of our employees, and taking care of our customers. I didn't know what I didn't know back then. It wasn't as if I was striving for something that I had seen somewhere else, but I actually like Kronos better as a bigger company than I do as a smaller company. I think we can be more effective.
Kruse: And indeed, today you're the CEO and Kronos is a much bigger company. 1.3 billion global software company, over 5,000 employees. You're one of the highest rated CEO's on Glassdoor. 87% of Kronos employees are engaged at work, far higher than the Gallop 33% number for North America. You've won numerous best place to work awards, so you're doing the leadership stuff right, and clearly your managers are doing the leadership stuff right. What's the secret, how are you getting so high engagement levels in such a large organization?
Ain: It starts with communications, it starts with asking our people what's motivating them, what's upsetting them. Then it's take that information we get, and doing something about it. The reason we have over 90% employee participation in our engagement surveys when we ask employees about it, they say, “It's because you do something about it. We can tell if we gave you feedback, that my manager sits down and talks to our group about something that came from our area, and then we take action to correct it, and do better going forward.” That's very motivating for people.
We also clearly understand that to be a great company, we have to have great people who work here. To have great people who work here, we need to be the kind of environment that people want to come to work at, and stay here. We deeply focus on these areas, and that includes trust, and collaboration, and transparency, and communication. It also includes being successful and making good decisions. Truth and honesty is a big important part of what we do, and perhaps most importantly, I believe people join companies because they hear about the company, but they leave companies because they're not happy with who they work for. We have a high premium on our manager effectiveness. In fact, we survey that on a regular basis. We have a Manager Effectiveness Index, we call it MEI. We hold our managers accountable to that, we reward the ones who do really well. We focus on all these dimensions that Kronos being a great place to work, and all the things that make that possible.
Kruse: How often are you measuring the MEI?
Ain: Twice a year.
Kruse: Twice a year. Part of that would be engagement of their team members, but then there's other, I'm assuming, business results metrics in there as well?
Ain: Right. So we ask traditional engagement questions, say 30 to 40 questions that deal with loyalty, and benefits, and compensation, and would you recommend Kronos to other people. Then we ask 14 additional questions, which we custom design for our purposes, which focus specifically on their relationship with their manager. Does your manager understand what your goals and ambitions are, do you have conversations with your manager about functional strategy? You know, these type of things that are important. Then we hold the manager accountable to those results.
Kruse: On this topic of communication and manager effectiveness, I know my world changed for the better when I started doing weekly one on one meetings with all of my direct reports, to dive into some of these things. What are your own thoughts on manager one on one's, how often to do them, any tips for doing them well?
Ain: Yeah, so let me move it up a little. I think communications is critical, and how you choose to communicate with the people who are on your team can be done in different ways. But you have to find a way to communicate. I tell people at work that silence is not an effective form of communication. You need to communicate, have conversations. For me personally, even though I have very senior people who work for me, I have scheduled one on one's every week with my direct reports, no agenda.
Ain: We just come in and catch up with each other. In addition, I have a scheduled group meeting of my executive leadership team once a week, where we sit around the table. Again, no agenda, catch up with each other. It's a form of communicating, so we make sure that we're aligned with each other in what's going on, so there's no surprises. It's very informal, but from my perspective, very effective.
Kruse: That's great. When it comes to Kronos, what are you most excited about these days?
Ain: I'm excited about where we are today, I'm excited about where our investments have brought us today, and I'm most excited about what our future is. Look, we've run the company for 40 years with a basic model that goes something like this. We want to grow our revenue seven, eight, nine percent. We want to grow our earnings, or our operating income 11, 12, 13%. And we want to take everything else, and plow it back into the business. What that allows us to do is run the company's not for today, not for tomorrow, not next week, but in fact for next year, and three years from now, and five years from now.
We're always thinking about what the future looks like, and I think in particular right now, with Workforce Dimensions, our new Flagship Enterprise Product that we've spent three years, 600 people, 150 million dollars developing, whose intent is, to revolutionize the workforce management business. All indications from the release of the product recently, from our customers, and prospects, and partners, and employees quite frankly, is that we have hit a home run. Not just a home run, but a grand slam. People are very excited about it.
I'm particularly motivated, and really excited about what this product will represent not just for our company, but for the workforce management business. This product that we've built that's future ready, I describe it. That's built for a modern Cloud, that uses things that haven't typically been seen in applications like hours, around artificial intelligence, and machine learning, and responsive development design, and all these other areas. Very excited about that.
Kruse: That's good.
Ain: Also, excited about what we're doing in the small and medium business. At times, most enterprise software companies do really well either at the high end, the enterprise level, or the small and medium end. We are in a good little run here doing well in both dimensions, so excited about that.
Kruse: That's tremendous, and it really does explain a lot about your philosophy of the long term. For a software company that started before the internet, was really around and known. To be so successfully this many decades later is really remarkable, and it's great to have that focus. So how can our listeners find out more about you and Kronos?
Ain: Well certainly we're active in all forms of social media, on Facebook, on Twitter, on LinkedIn, Instagram. Please come visit us at our website, or else give us a call. We'd love to talk to you, we have over 300 job openings right now, focused on always looking for great people to come join our organization. If you're someone who's interested in our products, look us up and we'd love to come talk to you about what we have to offer, and what we do. There's lots of ways to do that, or else even if we're not perfectly aligned as a potential employer, or someone you're not perfect for our product but you just want to follow what we're doing, or you have ideas about what we can do better, follow us as well there. I think we're doing a lot of interesting things today.
Kruse: That's exciting to hear. Aron, thanks for coming on to the LEADx Show.
Ain: Okay, very good. Thank you for this opportunity, and good luck.