Maintaining a team of loyal employees who are dedicated to the company and can turn conflicts into creative

solutions is a key strategy for business success. This article profiles a successful manager who understands how to prevent problems from becoming disasters.

Profile: John Heaton

Leading an Organization to Prevent Disruptions in Your Team
Richard Cummins

New Science, Margaret Wheatley quotes a friend as saying, "Power in organizations is the capacity generated by relationships." Clearly, leaders who build relationships build the power needed to keep their organizations out of trouble and on the road to sustainable success. Such is the case with John Heaton, president of Pay Plus Benefits in Kennewick, WA, who was named one of America's 15 "Best Bosses" by Fortune Small
Business Magazine. Out of 210

n her book, Leadership and the

agents who are good role models, who can create and articulate a clear vision for an organization, who empower followers to achieve at higher standards, who act in ways that make others want to trust them, and who give meaning to organizational life." Heaton clearly fits this definition. He is a master at adapting the company's culture to achieve its strategic aims.
The Company

nominees, Heaton's award was the only one for a Washington state business. P.G. Northhouse defines transformational leaders as "change
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Founded in 1991, Pay Plus Benefits is a professional employer organization that provides compensation and benefits services to its clients, including administration of payroll, benefits management, and retirement and workers' compensation administration.

Essential Co the company's success is the operation of that a great variety of work styles exist. His ultimate its 24/7 online client resource center that provides aim is to create a work environment where employees' access to accurate, valuable employee data. performance can be outstanding; that's more As a human resources outsourcing business, the important than establishing rigid operational rules. company's success depends on a combination of "At a normal workplace, if an employee walks in at reliable service and innovative technolog)'. The company eight or nine in the morning, he/she would be asked, has received a wide variety of awards, including being "How come you're just getting here? The way we have recognized as an Inc. 500 fastestit set up at Pay Plus Benefits, growing company, receiving you probably would be /c./Cisco's "Growing With Heaton believes in empowering embarrassed if you asked that Technology Award," and attaining question. You could expect to and augmenting the lives of first place in Washington CEO's find out that there had been employees; engaging them annual competition for "Best a major problem the night Companies in Washington to before, and those employees in work; and encouraging Work For." had been at work until freedom, self-discipline, and At last count, this company of midnight. Here, you can the right to fail. 18 employees provided outsourced assume that employees have a HR services to organizations job that they have to get done ranging in size from small and that they will get it done." companies operating in one location to huge businesses Heaton shares the case of two brothers who work with 50,000 employees all across the country. "We now for the company. "They've been through many projects have in our data farm 300,000 employees and 9,000 with me. One of the brothers is just finishing a project individual companies," Heaton commented. "We were that has been under way about three years. His work nearly invisible at national meetings in the early days, isn't high-speed, but he never quits. In contrast, his but now we command a substantial amount of respect." brother wanders around all through the day, chatting Strategically, the firm also leverages its employment with other people, and then works at night. Their styles practices to demonstrate how clients' employees will be are quite different, but they both get the job done to treated. The F*ay Plus Benefits Web site notes, "One of the benefit of the company." the best measures of how the company will treat your Breakthroughs in the company's services depend employees is the track record of its own employees' on a staff of computer "geeks" who reprogram the performance and satisfaction with their jobs." business' systems on a regular basis, using intelligence and creativity. They participate fully in developing Freedom, Self-Discipline, and the Right to Fail the means that realize the company's required ends, Heaton believes in empowering and augmenting so the freedom they are afforded must be concomitant the lives of employees; engaging them in work; and with self-discipline. It is Heaton's job to ensure that encouraging freedom, self-discipline, and the right workers are held accountable in this largely unrestricted to fail. He also enhances productivity by harnessing environment. conflict to attain creative insights. His compelling Heaton admits that he learned the power of failure humility and sense of humor empower others in ways at a visceral level through his business experiences prior that positively influence both the company's bottom to starting Pay Plus Benefits. He sums up his perspective line and employees' lives. on the value of learning through mistakes by saying, Heaton observes many people do not understand the "R&D is nothing more than the process of elimination concept of freedom in the workplace. "Not everyone of what does not work; when you start a project, you can work in a culture that embraces freedom," he says. first eliminate what does not work. Most people see that "Some people have left Pay Plus Benefits not because as a failure. Many cultures don't like failure. Because no they didn't like freedom; they actually didn't like other one wants to be known as a failure, people are afraid people's freedom." to step out and take chances. You've got to keep trying For example, employees at Pay Plus Benefits are new approaches or you'll never know when you have free to set their own hours because Heaton knows eliminated that last thing that does not work.

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stand up in front of all the techies at the meeting, make a presentation, and impress everyone else in attendance. I won't be the one standing up there, but because I'm not, they will be so pumped when they get home! It's a small sacrifice." In fact, Heaton remarks that his real reward comes Knowing When to Get Out of the Way out of "the respect I get from others because these As a role model, Heaton is understated, saying that employees work for me. They get job offers all the he starts his day typically between 4:00 and 4:30 a.m. time. I get credit for having put the team together." "If I'm going to do any bragging about myself," he comments, "it's that IVe learned how to keep just oneHeaton tells many stories that illustrate his remarkable step ahead of our employees." He views his primary humility in working with these talented employees. One job to be mapping out the business' strategy and then 16-year-old college student was hired as an intern. He getting out of the way of its talented staff. was brilliant, but he possessed all of the downsides that an adolescent boy brings to work. Heaton tells the story of one employee whom he describes as "one of the more brilliant minds west of "We had recently purchased our first laser printer, the Mississippi." At one major turning point in Pay and it jammed. I walked over to it, acting like 1 knew Plus Benefits' history, how to fix it. The intern several competitors (that elbowed me back, and Heaton says that he spends a good part were more than 100 times took over. I was totally larger) failed to meet elated becau.se I didn't have of his CEO time working to get each the industry's needs for to show iny ignorance. He group feeling respected and empowered. improved information took the printer apart, got technology. Heaton it unjammed, and put it His organization's resources skills challenged the technology back together. Then, the and talents are intellectual capital, director, "The big boys young man says to no one pure and simple. The intelligence and wanted this and couldn't in particular, 'I'm beginning do it. Now you get to understand all the jokes creativity that employees bring to work your shot." The staffI've been told about upper each day are the keys to the business' challenged, respected, management.' empowered, rewarded success, not its computer equipment "When I tell this story responded with a series of at conferences, the crowd and lifeless database. programs and processes always perks up," continues that have made this small Heaton, "Because it is such a beautiful story. People always laugh. Then I tell them company the leader in software development for its to flash forward four years. Thar intern is still working entire sector of the national economy. with us, and now he's our chief software engineer. He's An important aspect of the company's culture is grown up ^\'ith us." how Heaton builds community through ethical and empowering treatment of its employees. His ability to keep his own ego in check helps employees to feel Life Isn't Always Rosy valued and results in incredible loyalty to the company This is not to say that everything is always perfect and Heaton himself He recognizes that his personal at Pay Plus Benefits. Heaton spends much of his time drive for achievement can overpower other people; with keeping the team together. There is a constant tension seasoned self-aware ness, he has learned how to mentor between the programmers who continually remake young people in productive ways. the company's services and systems and the staff that Here's an example of how he garners satisfaction is charged with docimienting all of these changes. without having to be the center of attention or a knowThis tension sometimes causes gaps between the it-all. "Three of the company's young staff leaders will organization's core values and how people behave. be fiying to Texas shortly, and one will be staying here Heaton illustrates the strain with this story. "A to maintain the home front. These 'kids' are going to programmer will race up to my office with news about

"I've had new employees come to me with their head down and say, 'I've really screwed up.' My comment back to them is, 'Why should you be so lucky? I've never done anything right the first time in my life."'

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a project that he's said couldn't be done eight months ago. He's never rested since that time and progress has been made. The answer is in the back of his mind, but he's totally turned our development schedule upside down. He's doing his job, but I've got a department upstairs that writes the documentation, and they want to be able to Rnish their work. They have as much pride as the programmers, but they can't write the documentation until the software is finished being developed. 1 have to do a really quick mental adjustment and get involved." Heaton says that he spends a good part of his CEO time working to get each group feeling respected and empowered. His organization's resources skills and talents are intellectual capital, pure and simple. The intelligence and creativity that employees bring to work each day are the keys to the business' success, not its computer equipment and lifeless database. The company's ability to bridge the gaps between those resources and what customers demand is limited only by Heaton's ability to attract and retain the brightest minds that can be found, which come in all shapes and sizes. He understands that employees' morale is positively correlated to their productivity. "The programmers need autonomy and respect for their creative processes, and the documentation specialists need to be recognized and rewarded for their patience and generosity," he explains. "Both groups need to be effective despite such a disruptive creative process." Much of Pay Plus Benefit's daily strains are caused by the documentation people's need to finish work today, and the programmer's and CEO's need to keep pushing creatively into tomorrow. "Conflict within and betvi'een organizations often stems from differing perceptions of the present and future," according to the American Psychotoffst article by Brett, Goldberg, and Ury. Heaton's job is twofold in this sense: He builds the business strategy in a dialectic process in which programmers push the limits of the possible toward emerging products, and he is the ethical glue that binds

the opposing human resource elements of the company together. Recognizing that conflict is an inevitable part of work, he believes in the comments of Brett, et al., that, "If successfully managed, conflict can produce high qualit)', creative solutions that lead to innovation and progress." Heaton understands that service-leadership creates better lives for him and his employees while adding to the bottom line. As Bottom and Lenz uncovered in their research, adding to the growing evidence that servantleadership motivates the highest levels of performance, "Tremendous savings can be gained in cost and schedule by team building rather than the traditional adversarial relationship among owner, designer, and constructor." >X'hen asked to summarize his overall approach to effective management, Heaton stared. "If you don't have two winners, you have two losers."
References
Brett, J. M.. S. B. Goldberg. & W. L. Ury, (1990). "Designing Systems for Resolving Disputes in Organizations." American Psychologist, 45, (1990), pp. 162-170. Northhouse, Pctet G., Leadership Theory and Practice. (London. UK: Sage Publicacions, 2004), p. 198.
Spears, Larry C, Insights on Leadership: Service, Stewardship, Spirit and

Servant-Leadership. (New York, NY: John Wiley & Sons, Inc., 1996), p. 164. Spragins. Ellyn, "The Best Bosses" [Electronic versionl. Fortune Small Business, September 2004. Wheatley, Margaret, leadership and the t^ew Science. (San Francisco, CA: Berrett-Koehler Publishers), p. 39.

johr\ Heaton can he contacted via e-mail at john^payptusbenefits-com. Richard Cummins is vice president for instruction at Columbia Basin College and previously served as a dean and member of the faculty. He co-authored the book,

Reading, Writing, and the World Wide Web.

He may be contacted at 509-S47-0S11 ext. 2379 or by e-mail at rcummins@columhiabasin.edu.

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