For my interview series on influential leaders, I had the pleasure of interviewing Norm Merritt. Norm is the CEO of the world’s largest software testing company, Qualitest. Norm has had a storied career in business services — driving excellent performance and world-class client service. Norm has experience growing businesses through organic growth and through acquisitions, running large BPO companies like iQor with a revenue of $700M, as well as later stage start-ups like ShopKeep, an ISV in the payments space. He has also worked closely with private equity firms, such as Marlin, to help grow and develop businesses.
Thank you for joining us Norm! What is your “backstory”?
Ithrive on creating value, driving results and marshalling a team to accomplish big things.
Very early in my career I figured out what my true calling was. After I received my degree in accounting, I started to work for one of the biggest accounting firms — Arthur Andersen. Two weeks into my job there I realized that I had made a career mistake. Accounting is focused on history and on chronicling what happened as opposed to making things happen. I wanted to spend my time doing the latter.
After making this known to the senior partner at Arthur Andersen, he assigned me to the Emerging Business division, so that I could help smaller businesses and be involved in management decisions. I would help companies prepare for financings, work on computer system integrations, drive profit improvement projects — in short, making things happen vs. accounting for what happened.
That theme has persisted through all of my career choices, starting at my first job right out of college, and continuing through my next job working in Walt Disney Company’s strategy and operational planning group. I chose to focus on the theme parks and resorts division, because it was the only division in the company that was growing only in single digits — it seemed there was an opportunity there to make things happen.
How have you used your success to bring goodness to the world?
I have a personal daily devotion, in which I always ask for the ability to be a force for good in the world. As an example, I’m the vice chair of a group called GOSO (Getting Out, Staying Out) for which I apply my expertise and experience of figuring out how an operational structure can work better and how to drive organizational change in a way that creates value. GOSO focuses on young men, 16–24 years old, who are part of criminal justice system and in prison. The organization’s goal is to get them out of prison and help them to stay out.
The recidivism rate in the US for 16–24-year-old men who have been involved in the criminal justice system is about 67 percent. Meaning, two thirds will be back in prison within two years. GOSO’s goal is to break that cycle utilizing licensed social workers who work with those young men. They focus on emotional intelligence and help them get their GEDs or high school equivalency. We also get them paid internships that we pay for, so employers don’t bear any hiring risk. Our recidivism rate at GOSO is around 15 percent because we break the cycle.
I bring my operational expertise to help GOSO improve its processes and measurement mechanisms to attract more capital and donations from big donors, which allows us to extend our reach and increase the number of young men in the program and ultimately have a bigger positive impact.
What do you think makes Qualitest stand out? Can you share a story?
Qualitest prides itself on bringing very precise solutions to our clients. We don’t use a cookie-cutter approach to testing; we understand the situation and tailor the right solution.
A big issue for one of our major clients, a large theme park company in Orlando, Florida, was managing transportation. They needed to have the buses in the right place, at the right time, to pick people up. They applied artificial intelligence to their bus scheduling system — their biggest issue was how to test that their AI system was actually driving the right results. They were unable to figure it out so they came to us. We looked at our Precision Matrix, which is a catalogue of the skillsets we have around the globe and deployed one of our engineers from Israel who had previously worked on an AI-driven geolocation project. We sent him to the company and within three weeks the client remarked, “What other company on the planet could have produced exactly the right combination of skills and talent for our specific need?”
Qualitest is known for precise solutions for our clients’ specific needs.
What are your “5 things I wish someone told me when I first started”?
1. It’s better to be relationship oriented than transactional
I wish I had understood earlier in my career that as a leader there’s a difference between being transactional when interacting with people (i.e. what are you going to give me and what will I give you in return) and being relationship oriented (i.e. how are you doing and how can I help you be better). What I found is that when I’m transactional with people, I get what I’m asking for, but when I’m relationship oriented, I get much more than I expected because people give me their energy, creativity and dedication.
2. There’s real power in what’s called “Marginal economics”
Looking at every situation in terms of the incremental cost and incremental benefit of the next behavior, and completely ignoring sunk costs. Anything that happened before today is irrelevant. It doesn’t matter how much you’ve spent on a project, because it’s spent. So, the points going forward are: What’s the incremental cost? What’s the incremental benefit? If you can begin to parse the world in that way, you make much smarter decisions. This way you’re not caught up in something with historical baggage. Instead, it’s about moving forward and achieving incremental impact through decisions I can make and things I can do today.
3. Your do/say ratio needs to be 1:1
If I’m going to say something, I better do it. If I promise something, I better be able to deliver it. Early in my career, a partner at Arthur Andersen made sure to drill into me the fact that I should not make a commitment to a client unless I can deliver. He was trying to protect the image of the company, but I took a deeper lesson from it. I learned from that experience that if I’m going to commit to something and want credibility, then I need to be able to make sure that I deliver and dedicate the time, resource and effort to accomplish that. I found that maxim to be very important in business and it has helped me career-wise, but I also found it important in my relationship with my kids, my spouse and my community. If you’re consistent doing that, it’s amazing how it creates positive vibes everywhere you go.
4. Appreciate everyone, regardless of their role
Early in my career I was a relatively junior employee at the Walt Disney Company, but in a position of power. I was with one of my bosses, who I very much admired, late one evening working on a very important and strategic project for Walt Disney Attractions. As we walked out of his office and onto the elevator, we ran into the cleaning lady who was pushing her cart. I was in the middle of a conversation with my boss when he stopped me and addressed the woman. As the elevator doors opened, he held the doors while she rolled her cart inside and began to converse with her. When we got on the elevator, I tried to continue to talk to him about the project, but he stopped me again and turned to the woman and told her that he really appreciates what she does and thanked her for keeping the office clean.
In that short elevator ride, as a young executive, I learned a lot; I learned that everyone is important, even those doing the least glamorous tasks in the company. As a leader, if you don’t recognize this fact, so people know you appreciate what they do, then you’re missing a great opportunity to lead and inspire.
That’s the way I try to drive how I lead companies too — I want to make sure everybody knows that I put my pants on the same way as they do, that I’m not special and that I appreciate them because they make the company what it is.
5. Be a shepherd, not a sheep herder
While it is important to try to exude confidence among the people you’re leading, it’s much better to be more like a shepherd than a sheep herder. A sheep herder relies on fear and moves the sheep by cracking the whip, while a shepherd is out in front saying ‘follow me.’ I often say, ‘it’s not what you expect, it’s what you inspect.’ You have to hold people accountable; they have to know that you’re serious and you’re not a pushover, but at the same time you can achieve that with respect.
We’re all smart adults in a work setting. As a leader, you need to recognize that what’s best for the people, personally and professionally, is also best for the company. It’s important to understand the individual and what motivates them to figure out how you tap into what is important to them and put them in a place where they’re able to shine.