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How Paychex keeps hitting the numbers

Walter Turek:
How Paychex keeps hitting the numbers

Seventeen years ago Walter Turek started to turn Paychex Inc.’s sales force into a precisely calibrated instrument for generating revenues.
Turek designed the instrument to function when powered by hundreds of well-chosen salespeople and their supervisors, carefully trained and motivated to deliver ever-greater numbers of new accounts to the company each year. The target now is 95,000 new accounts.
Paychex is the second-largest payroll-processing company in the country. Its success at persuading small-business clients to spend money and hand over payroll, tax and 401(k) hassles has taken on an aura of destiny rather than strategy. After all, the company has posted record earnings in each quarter since 1991 and has seen its growth falter only once since going public 15 years ago.
But it still is a relatively young company–young enough for senior managers to remember when Paychex was a collection of franchises without a managed sales force to speak of.
Turek “really took these businesses from the ground level to a new level,” says Lori Weber, the firm’s telemarketing director.
He created a system with “a high level of consistency and predictability within a very narrow range,” Paychex Chairman, President and CEO Thomas Golisano says.
Indeed, Turek set up an organization in which salespeople typically win new accounts with amazing predictability–a range of 48 percent to 51 percent over the past 10 years. A salesperson who falls much below that success rate is doing something wrong, sending a signal that prompts a sales manager to help him or her identify the problem and correct it.
Turek’s focus on consistently delivering new accounts is reinforced by a strong sense of integrity and a desire to see employees succeed–not for the Gipper, but for themselves.
And when colleagues talk about him, they do not describe a cold taskmaster. Instead, they use words like “charisma” and “passion.”
Diane Rambo, vice president of Electronic Network Services, runs the department that makes many of the products sold by Turek’s people.
“The one thing about Walter is you know when he walks into a room,” she says. “He just emits personality and sunshine.”
Turek is a tall, youthful 45-year-old with wavy hair that goes blonder in the sun. He carries himself with an easy self-confidence as he strolls through the company’s gleaming Penfield headquarters.
He grew up, the oldest of three children, in the Buffalo suburb of Tonawanda, his father a welder and his mother an Internal Revenue Service employee, who helped give him his solid work ethic. He never was a strong student, instead enjoying the social life and working while in school. In 1972, he earned an associate’s degree in business from Monroe Community College.
After college Turek began working in the marketing services division of the Dun & Bradstreet Corp., a firm that researches credit ratings and helps businesses define and sell to their targeted customers. Turek received training there to become a market consultant, learning about prospecting and research while working with clients like Bausch & Lomb Inc. and Corning Inc.
While at Dun & Bradstreet in the mid-1970s, he met Golisano, a client, who was working with the franchises and joint ventures that eventually were consolidated to become the Paychex operation.
At the time, Turek did not see a future in the payroll-processing business. He thought the personal-computer revolution would eliminate the need for outside payroll processing. Yet he was impressed by Golisano.
“Through the years I got a lot of respect for him because he did everything he said he was going to do,” Turek says.
Golisano told him he had an operation in Southern California for which Turek might like to set up a sales organization. Turek made the trip to Orange County, and he liked the area and the opportunity.
Turek brought his family and savings to California. Golisano sold him 5,000 shares of stock at a par value of $1.85 each, an incentive to grow the organization.
But Turek’s salary was only a bit more than half what he had earned at Dun & Bradstreet, and in a year he went through his savings and began to live on credit. His focus was trained on work, though. He hired sales managers and created a reporting system for salespeople in Paychex offices in California.
“I was like a kid in a candy store,” he recalls.
He had to teach himself about tax laws and the payroll-processing business. As he hired salespeople, he set up a weekly activity reporting structure to ensure they were setting goals and making calls.
At 32, Turek earned the title of zone manager and began to handle the organization west of the Mississippi River. His ideas for setting quotas and adding sales managers were being implemented all over the country.
And Paychex, which went public in 1983, was adding products like direct-deposit and tax-payment services.
In 1989, Turek became vice president of sales. It was a time of tremendous growth and change for the company. He was adding new zone managers to oversee the sales managers, and the growth and restructuring were costing money.
At the end of the year, Turek and his new zone managers went to Rochester for a meeting. That night, Golisano corralled the group in a conference room and peppered them with questions about turnover ratios and other performance measures until 3 a.m.
“He was making sure that we were doing all the right things,” Turek says.
But the growth in costs outpaced the revenues salespeople were bringing in, and in fiscal year 1990 earnings dropped. It was a difficult time, but Turek had the support of the other top executives, and he knew he was following the right path.
“It was the only year Paychex blipped,” he recalls. “I always knew in my heart that we were doing the right thing.”
The next year everything started to click and revenues began to surge.
“We blew away our number and we have been on that ride ever since,” he says.
For a time, Turek flew back to Rochester every second week while supervising the sales operation out of San Diego, where his family had moved from Huntington Beach.
Eventually, Golisano and Turek decided he should return to Upstate New York full time. Turek’s oldest child, daughter Jaimee, was a sophomore in high school, and it was hard for the family to move. But they came back to the area in 1991.
“To do the job, I had to be here,” he says. “I wasn’t needed in the field. I was needed here to find corporate resources for the field organization.”
Now, 660 Paychex salespeople report to 75 managers. The middle managers report to 11 senior sales managers, who are supervised by two area vice presidents. Those two report to Turek.
In addition, Turek is in charge of major markets. He sells services to significant clients in 13 cities using a new type of software, called Preview. The software, for which Paychex acquired the license three years ago, helps the company cater to the needs of clients with 50 to 2,000 employees and more sophisticated payroll requirements.
Turek tends to make a strong impression on everyone he meets. When she first encountered him, Bobbie Goheen, now the firm’s training and development manager, had moved to Southern California to work for Paychex.
Her first impressions have been the truest, Goheen says. She immediately knew he was a risk-taker and an innovator.
“He sees the future and also accomplishes his goals,” she says. “How many people have built a sales force for a company?”
The elements of his sales methods also find their way into Turek’s life outside Paychex, where he has coached Little League for the past dozen years.
His athletic skills were never superb, he admits. Instead, he drills the Pittsford players in the technical skills that will make them successful, “kind of like what I do in business.”
His goal is to “help the kid have the confidence to come back the next year,” he says. “Kids in sports are at such an impressionable time of life that bad coaching is just about the worst thing that can happen to them.”
Motivating people to do their best is what Turek likes best. Three years ago, he learned of a Paychex salesman who seemed to have lost the point.
In order to make his month’s quota, the salesman set up a phony business with himself as the sole employee. Then he sold an account to himself.
It was unethical and the salesman was fired. To Turek, the incident signaled that someone had not gotten the message.
“What Paychex offers is the opportunity for people to maximize their potential. It really serves as a stage for people to do that,” he says. Not just to make a number or to please a boss, but for themselves.
So in a one-day video-recording blitz, he made the “Believe in Yourself” tape. In the kitchen, he exhorts people to follow a balanced diet–while he prepares and appears to drink a “health” shake that includes milk, sardines and parsley.
In other segments, Turek is seen running on the track at Pittsford-Mendon High School, lifting an improbable amount of weights at a gym, and reciting affirmations to himself while gazing into a hand mirror and wearing a silky robe.
The video was a big hit and still is shown to groups of trainees before they embark on their careers as Paychex salespeople.
“I wanted to get people into a mind-set,” he says. “If this is what you choose to do, do it for the right reasons. Do it for fun. Do it because you enjoy it.”

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