Robert O. Carr, CEO of Heartland Payment Systems, runs his credit card processing company from a comfortable office at 90 Nassau Street, overlooking the idyllic green in front of Princeton University’s Nassau Hall.
But, as he recounts in his just published corporate biography, “Through the Fires,” his path to CEO’s office was lined with considerable challenges. When Carr started his company, he operated out of his house, and his mother used a spare bedroom to run a call center to handle inquiries from customers. In Chapter 5 of his new book, Carr describes his reaction to a call center that had been established by some of his top executives at the fast-growing company:
When I walked into our Heartland call center in Indiana, a renovated bowling alley, it was supposed to be a celebratory grand opening, a moment of triumph for our company. I was appalled. I couldn’t believe what I was seeing.
In terms of growing and making a profit, our company was soaring. But when it came to the way we were treating some of our employees, we had taken a serious wrong turn.
With Heartland growing so rapidly, we were struggling to keep pace hiring enough new employees to answer calls from our clients.
The callers were typically merchants who had a problem — maybe a terminal had gone down — and our people were on the line to figure out a way to fix it, and fix it quickly.
For the call center, we had rented some space in the Youngstown Shopping Center in Jeffersonville, Indiana, just across the Ohio River from Louisville, Kentucky. The strip mall had several other tenants, including a Sherwin Williams paint store. Whenever a space would become available, we would snap it up to make room for our burgeoning work force. We eventually took over the adjacent bowling alley.
The directors of my board insisted that I start to do more delegating. It was hard to argue against that idea. The company was growing too large for me to try to manage so much. I needed help. So I hired a new president to manage some aspects of operations, including the demands of our call center.
He promised me that things would be running smoothly. He hired a manager, a real pro, he said, a guy with experience operating a big call center in the Philippines for our largest competitor, First Data.
When I checked on the progress, my president reported cheerfully that things were going swimmingly.
I had reason to believe otherwise.
We were losing about one-third of our new hires even before they had completed training. Another one-third were quitting before completing their first year at the company.
I scheduled a trip to see the remodeled bowling alley. My president and his call center looked forward to my visit. They were very pleased with the efficient, highly disciplined operation they had created. They were certain that I would be delighted, too.
I was nauseated.
When I walked into the place, I saw all those little cubicles, fitted together tightly, almost as far as the eye could see. People were working in what resembled tiny cages.
I looked up to the ceiling and saw rows of offices with smoked glass. The people inside them could see out. But the workers below couldn’t see in. It amounted to surveillance, and it was demeaning.
Behind the glass in these vaunted offices sat the supervisors, peering down on the minions, who were working their tails off on the telephones and, no doubt, worrying about being judged by their faceless taskmasters.
It shamed me. It was a perversion of what Heartland stood for.
Those workers on the phones, after all, were standing on the shoulders of Mary Frances Carr.
I was damned if any call center dictator was going to make a mockery of my mother’s guiding philosophy: No one is superior — and no one is inferior — to a fellow human being. I had heard those words when I was a little kid. Although she had now been gone for handful of years, her words still echoed.
I approached the president and the call center manager and asked some questions.
Why were the work spaces so small and narrow? Why were the supervisors spying behind smoked glass? And why were they looking down on our fellow employees?
They looked at me like I was some naive country boy, and responded in a condescending tone.
Look, we know what we’re doing . . . and anyway . . . what experience do YOU have in running a large call center?
I went off searching for another opinion. I asked for a perspective from one of the highest ranking executives in the company. He told me that the president and the call center manager were right. He seemed to suggest I was being soft.
Face it. These people are lucky just to have jobs.
It made me question myself. What did I really know? I had never worked in an organization of even half this size before. We had some very smart people telling me I was wrong. Maybe I was the problem.
I hired a management consultant in Philadelphia to do some research and give me some advice. I needed to get to the root of this dissension. I wanted her to get the views of half a dozen or so executives at Heartland and then make a recommendation to me about the course of action.
It didn’t take long for the consultant to deliver her findings. Sitting in my office, she rested her chin in her hand and looked at me inquisitively.
Bob, she asked, why is it that you don’t feel you have the right to fire people who don’t share your values?
She was right. The call center workers shared my values, not the top brass. The next day, I dismissed the president. And the expert who designed the glass prison fortress at the call center? He would be gone, too. He now works for a competitor.
After the personnel changes, I returned to the Jeffersonville center and arranged for an all-hands meeting. We rented a ballroom for a meeting with about 250 employees at the Holiday Inn in nearby Clarksville, Indiana.
Standing before my colleagues, I delivered an apology.
We are changing the model here, I said. We are going to stop hiring people and treating them like we don’t really like them.
I made it plain that I considered their jobs vital to the success of the company. They were doing important work that truly mattered in the lives of people. When a customer has trouble, our call center workers are coming to the rescue, making it possible for our clients to pay bills, support their kids, sleep peacefully. They were solving problems and changing lives for the better.
That is why, I reminded them, we needed to have our very best people taking phone calls.
And that’s why we would be increasing starting wages by 50 percent — as soon as we could meet our goals in improving efficiency and productivity. About six months later, pay for starting employees at the center went from $10 to $15, more than double the minimum wage at the time.
For a big share of the year, I returned to Jeffersonville for follow-up meetings with our call center team. I shared with the employees our plans to build a beautiful new service center, a place that would stand for the way we believe workers should be treated.
Fixing our problem required no management wizardry or consultancy brilliance. It was simply a matter of treating other people with the respect and decency they deserve.
I am happy to report that the bowing alley days are long gone. Our service center employees now come to work at a stately brick facility that looks like a sparkling new corporate campus. At 215,000 square feet, it dwarfs the size of most corporate headquarters, including our own.
The $85 million complex sits on nearly forty acres of rolling prairie and forested land. Employees look through huge windows that let the sun shine through. The land is dotted with oaks, maples, pine, and sycamores. From inside the service center, you can still see the silo and barn on the old dairy farm where the McCormick boys grew up years ago, as some of our employees with local roots can tell you. And from certain parts of our service center, you can see the skyline of Louisville. The center sits proudly on the road circling the center, Heartland Way.
On brick patios in the fresh air, colleagues at the call center fix themselves meals at gas grills. Our cafeteria, Food for Thought, provides plenty of healthy fare. Our library stocks publications that range from Rolling Stone magazines to the poetry of Kahlil Gibran.
We have a quiet room on the first and second floors, where employees who need a rest can retreat and restore. Research shows that employees often go home with a headache, but would probably remain at work if they just had a chance to lie down, close their eyes, and rest for 30 minutes or so.
Our fitness center, managed by my daughter, Corrie Nichols, is open every minute of the year. It has a full complement of treadmills and barbells. It is surrounded by a running track that measures one-twentieth of a mile. A personal trainer works Mondays through Fridays, and the fitness center staffs a massage therapist, too.
Our new office layout has no tiny cubicles or spying glass offices of the old days. We don’t have cubicles. We don’t even have offices. The desks are open and curved in a way designed to be ergonomically friendly. Teammates can turn around and speak with one another.
The people in charge work at desks, too, among everyone else. Marty Moretti, the manager of the whole operation, doesn’t have an office; neither does Jeff Nichols, the second-in-charge, who happens to be my son-in-law.
People are trusted to do a good job, without pestering. As one worker put it:
When you’re on the phone with your mother, and she’s telling you that she needs a ride to the doctor, you don’t have to worry anymore about a boss tapping you on the shoulder.
Our rate of turnover, meanwhile, has fallen to very low levels.
I see it as Herb Kelleher of Southwest Airlines sees it. A business has three sets of constituents: the employees, the customers, and the shareholders. A lot of businesses like to say the customers are the most important part of the equation. That’s not my view. I believe the employees are even more important.
If you have happy employees, they will take good care of the customers. Satisfied customers, in turn, translate to healthier corporate profits. That, naturally, will make the shareholders smile.