Corporation as CEO: Character based leadership

For most leaders the following situation is all too familiar: a senior and valued employee comes into your office to announce that he is leaving, having found a better-paying position elsewhere.

For many leaders, this is just an unlucky day or even an expected part of doing business. For Precision Biologic CEO Michael Scott, though, this is the time to ask some tough questions: “Why didn’t I see this coming?” “Why wasn’t I closer to this person to understand that something was up?” and “What does this say about the culture I am creating if an employee does not feel comfortable raising a salary concern with me?”

The employee was not leaving because he disliked his job. Quite the contrary. He loved the company and wanted to stay, but he needed more money to support his family and felt the other job would give him a fairer wage for his
skills. This particular employee started with the company at a more junior level than his back- ground would have suggested. His rise within the company was very quick, but his salary had not kept pace. The company had failed to notice; it was a serious oversight.

Naturally Michael, like any good leader, tried to turn the situation around. The employee was offered a more suitable salary, based on current research, and competitive with the other company’s offer. But it was too late; he had already made a commitment to his new employer and was set on leaving.

Which brought Michael to another tough question: “Because of our oversight, we underpaid this employee for some time. What is the right thing to do now?” His conclusion was unusual. Realizing that the discrepancy between the fair salary and the actual salary was the company’s mistake, Michael decided to compensate the departing employee retroactively. There was no legal obligation to do so. And it was already clear that money would not buy the person’s loyalty back. It was simply the right thing to do.

“We treat our employees in a similar way as we treat our customers – this philosophy enables employees, in turn, to treat our customers in a respectful and creative way, which gives us product and service-innovation advantages.”

Michael Scott
CEO, Precision Biologic

Naturally Michael, like any good leader, tried to turn the situation around. The employee was offered a more suitable salary, based on current research, and competitive with the other company’s offer. But it was too late; he had already made a commitment to his new employer and was set on leaving. Which brought Michael to another tough question: “Because of our oversight, we underpaid this employee for some time. What is the right thing to do now?” His conclusion was unusual. Realizing that the discrepancy between the fair salary and the actual salary was the company’s mistake, Michael decided to compensate the departing employee retroactively. There was no legal obligation to do so. And it was already clear that money would not buy the person’s loyalty back. It was simply the right thing to do.

Brisk growth through engagement

Founded in 1983, Precision Biologic Inc. (PBI) specializes in developing, manufacturing and marketing diagnostic products used to assess blood coagulation disorders. Over the past fifteen years, growth has been dramatic: gross sales have increased at an average annual rate of 20%, and the number of employees has more than doubled from 24 in 2003 to 54 in 2010.

The PBI office and manufacturing site is stylish and serene. After passing the Japanese garden, you enter into a museum-like display of the vials of the company’s anti-coagulation products followed by traditional business
metrics of sales forecasts and customer ratings. This means that we put a lot of emphasis on building relationships – with customers, collaborators, partners – but we leave the creativity of how to do this to people’s unique approach and character.