Investing in IDEAS

Smart Business Detroit, Sep 2008 by Cassano, Erik

It's no secret that the downturn in the automotive industry has meant a downturn for the economy in Michigan. When the Big Three automakers can't make money, it's usually difficult for most other businesses in the state to make money.

Jim Kreutzer is the regional managing director for Merrill Lynch in Detroit, and though he has the clout of one of the most well-known financial planning firms in the world on his side, it hasn't absolved him of having to negotiate the murky waters of Michigan's economy like every other business leader in the state.

So far, Kreutzer has been able keep growing in spite of the economy. By focusing on growing areas in which Merrill Lynch has historically excelled, such as retirement planning, Kreutzer has been able to buck the negative trend, growing his portion of the company by approximately a 12 percent rate during the past three years.

"We've really committed to growing our presence in the state," he says. "We've grown our sales force by about 5 percent per year over the last three years statewide. We've opened up some new offices in some of the growth markets while still staying committed to some of the more traditional areas of Michigan, such as downtown Detroit. There is still a lot happening in Michigan, is just happening in different ways than it did in the past."

This is how Kreutzer has grown Merrill Lynch's presence in Michigan - where Merrill Lynch had approximately $440 million in revenue last year - by tailoring his company's services to his clients' needs and by making sure his employees are always ready to use to the demands of a growing company.

Start a learning process

To keep Merrill Lynch able to adapt and serve its clients in Michigan, Kreutzer first has to put everyone on the same page with regard to goals and the company mission. That's accomplished through frequent communication, performed in person as often as possible.

"It happens in a variety of ways," Kreutzer says. "We do hold training events, we have different types of partner meetings where we help people understand what the initiatives will be for the upcoming period.

"We also communicate electronically and via newsletter. We really try to use all means because people learn differently and people react differently to different kinds of mediums. But my preference is face to face and in more of a dialogue setting than simply giving a speech."

During face-to-face dialogue with groups of Merrill Lynch employees, Kreutzer and his senior leaders attempt to drill down to what truly motivates people to serve clients. Some financial advisers want to focus on a specific aspect of financial planning, such as retirement planning or asset management. Once specific areas of interest have been identified, the senior leaders segment the work force to best leverage advisers' skills and interests.

"We will segment them via their level of business experience and bring them together for recognition as well as training events and really allow them to have dialogue with us and with each other," he says. "Because we are a large organization, it has really been a benefit to bring people from Lansing to work with people from Dearborn in the same workshop."

The workshop approach has been extremely useful for Kreutzer as he has attempted to ready Merrill Lynch to respond to a heightened need for retirement services, as more baby boomers approach retirement age in the coming years.

Recently, the retirement services specialists in Michigan were divided into 21 teams. Each team was assigned to an educational workshop where it worked with a peer who had more experience in providing retirement services.

"That (peer) gave the teams the ability to ask specific questions on how to do something," Kreutzer says. "When we're trying to transfer skill sets, we'll use small groups and peer-to-peer training as well as our national resources, which will come in from New York and also train them on some of the capabilities of the firm."

While it's cost-effective to bring many employees to a central location for meetings and training, it's not always practical. Kreutzer says that when you are trying to relay a message to employees spread across a wide geographical area, it is sometimes better if you can simply take your act on the road, communicating it on your employees' turf and on their terms.

"We'll also do meetings in every office so those who couldn't travel get the same message, albeit in a different way," he says. "We try to communicate where they sit as opposed to making them travel. It's better to communicate in their environment, where they might be more comfortable to share some of their thoughts and experiences."

Ask great questions

Employee feedback is one of the most important ingredients in successful growth. In order to get a reading on the pulse of the markets you serve, you need to solicit and process input from the front-line people who deal directly with your customers.

As Kreutzer conducts meetings and travels across Michigan, it provides him with not just an opportunity to educate, but for Merrill Lynch's eyes and ears in the field to provide him with insight.