Driving a High Performance Culture

1. Driving a High Performance Culture Jeff Gau | CEO | Marco

2. About Me • United States Air Force • University of North Dakota Graduate • Joined Marco in 1984 as a sales representative • Corporate Sales Director • Appointed President/CEO in 2004 

3. About Marco • 1930 • 1973 • 1975 • 1985 • 2001 • 2002 • 2005 • 2010 • 2013 • 2014 • The Typewriter Shop • Marco • Copiers • Voice and Data Networks • 100% ESOP • Audio/Video Systems • Document Management/Workflow • Managed Services • Lean Continuous Improvement • Cloud and Carrier Services • Managed Video Conferencing Corporate Headquarters - St. Cloud, Minnesota

4. Local, Regional and National Sales, Service and Support Marco Locations • South Dakota • Aberdeen • Pierre • Rapid City • Sioux Falls • Watertown • Iowa • Cedar Rapids • Decorah • Des Moines • Fort Dodge • Mason City • Quad Cities • Sioux City • Waterloo • Wisconsin • Eau Claire • La Crosse • Madison • Minnesota • Alexandria • Bemidji • Brainerd • Detroit Lakes • Mankato • Marshall • Minneapolis/St. Paul • Rochester • St. Cloud • Thief River Falls • Willmar • Worthington • North Dakota • Bismarck • Dickinson • Fargo/Moorhead • Grand Forks • Minot

5. Marco’s 10-Year Growth (2003-2013)Average Annual Growth Organic Growth - 55% of Total Revenue Acquired Growth - 45% of Total Revenue Employee Growth:2003: 141 employees Today: 750 employees - 165 sales representatives and 430 certified systems engineers and technical representatives

6. Building a High Performance Culture What does good look like... • Industry – Are you performing in the top 10%? • Financially – Are you achieving double digit top and bottom line growth? • Strategic Focus – Are you growing in the “right” areas? • Employees – Are you attracting and keeping good people? • Customers – Are you adding and retaining good clients?

7. Here’s How We Drive Performance ❶ Stack the Bench ❷ Validate Performance ❸ Look Around Corners ❹ Execution ❺ Fail Forward Faster 

8. ❶Stack the Bench • Understand yourself first so you can understand others better • Play to your strengths • Sales driven, innovation and execution • Augment your weaknesses • Operations and processes, information systems, finance and admin • Create careers – not jobs • Provide a career path for every single employee • Develop a talent management and mentoring system

9. ❶Stack the Bench • Always be recruiting • Even when you don’t have a position • Restaurants, sporting events and social activities • Pay matters • Pay at the top quartile – it’s actually cheaper • Consistently assess compensation (third party and employee survey) • People value work-life balance

10. ❷Validate Performance – Employee Satisfaction Best product, best service and best price Q#29: I have pride in what I do. 604 of 624 employees agreed or strongly agreed Q#40: My supervisor trusts me to do a good job without watching over my shoulders. 590 of 624 employees agreed or strongly agreed Q#56Management is competent at running the business. 609 of 624 employees agreed or strongly agreed

11. ❷Validate Performance – Employee Satisfaction Here’s our report card: 2014 Results Best in 26 Year History (with 86% response rate) Satisfied Employees = Satisfied Customers

12. ❷Validate Performance – Customer Satisfaction • Our survey process: • Keep it short – 12 questions • 2. Mail the survey; don’t email it • 3. Follow-up with personal phone call • (83% response rate) • 4. Respond to issues and improve (CAR) • 5. Consistently track, review and share results 91% Recommend

13. ❸Look Around Corners • Develop an attitude toward growth and opportunity • Be active in your industry and peer groups • Get in the field and listen to customers • Pay attention and listen to people in their 20s • Influencing decisions • Changing the way we do business

14. ❸Look Around Corners • Be innovative – it could be right in front of you • Take a play from Amazon • Package something you do differently (Managed Services) • Try something new (Cloud and Carrier Services) • Stay current with communication and adapt • Twitter is the new newsstand • Texting is today’s conversation • YouTube is the #1 search engine • Video is the new voice • Allow social media in the workplace

15. ❹ Execution … the Hard Part • Promote a culture of bold ideas – and actually do it • Everyone has good intentions • Talking about it does not get it done • You don’t need to know every detail to move forward • Managed Print Services • Managed IT Services • Be willing to make upfront investments • Put the cost in front of the revenue • Managed Services call center

16. ❹ Execution … the Hard Part • Pay people (consultants) to hold you accountable • Training • Marketing • Service • Strategy • Best efforts vs. Determined results • Customer satisfaction metric dropped to 88% recommend • Determined to get to 90% recommend

17. ❺Fail Forward Faster • Widely known philosophy of mine and the company’s • Failure is a part of business and leadership • You’re going to screw up, might as well be okay with it • Just don’t do it all the time • Part of building a culture of innovation • Been there, done that; doing it again • Help Desk – 1980s initially • Telemarketing • Training • Take risks, but never risk the company • $1.2 million acquisition before $10 million acquisition • How have we failed at Marco?

18. Failure: Retail Storefront • Marco was going to be the next Super Store (late 80s) • Retail office supplies, office furniture • Moved corporate headquarters to Division Street storefront • Weren’t very good at working nights and weekends • Zero experience in retail • Didn’t fit our go-to-market strategy • Decided to exit and never looked back

19. Driving Performance - Takeaways • Stack the Bench • Evaluate your talent - who is missing and who could be promoted? • Validate Performance • Prove employee and customer satisfaction; share and leverage results • Look Around Corners • Get involved in your industry; pay attention to the millennials • Execution • Don’t just talk about it, do something • Fail Forward Faster • You’re going to fail, get over it

20. More on Leadership • Check out my blog on Leadership Culture:ALeadershipCulture.com • Some Posts of Interest: • Fail Forward • Get Comfortable Being Uncomfortable • 5 Ways to Tell You’re Not a Leader • Do you Carry a Briefcase or a Backpack? • For employee or customer survey example: jeffg@marconet.com

21. Thank you!