The way children are accessing Highlights for Children’s products have changed, which has changed how the company thinks about the Web and uses digital platforms.
“Of course, the children today have so many more choices across a bunch of different platforms. But to take it to the higher level, I think we’re competing for time — we’re competing for children’s time today,” says Shelly Stotzer, executive vice president and chief marketing officer for Highlights For Children. “Anything that’s a use of their time, whether it’s after school activities, sports, books, apps, computers, TV, all the things that children do today, we hope that they find the time to engage in positive products and stories, things that we reflect in our product experiences.”
Highlights believes there is a place for all its different products, but it’s important to make sure the company reaches children with the content that is right for them in a format that is good for them.
“Sometimes they want to play on a computer,” Stotzer says. “I have a 7 and 9 year old, and sometimes they want to read on their Kindles. Sometimes they want to play on my PC. But sometimes they want to snuggle in their bed with a book, and sometimes they want to read a magazine in the car, and sometimes they want to do a puzzle book at the restaurant. “We believe there is a place for all these things.”
So, how can companies re-position themselves to meet customer needs through all of the different platforms available today like Highlights recognized it needed to do at least a decade ago?
First, Stotzer says it’s important to recognize that the consumer, the customer is in control.
That’s especially true with technology, which changes so quickly. Understanding the needs of your clients — in this case, children — is imperative.
“If they don’t have a positive consistent brand experience, they have a lot of influence. They have a lot of control. They have a lot of opportunity to help you or hurt you,” she says. “I think finding your advocates is important, and listening to those who have some feedback for you is important — adjusting and learning along the way, putting the customer at center, so they have the control.”
Then, start with what you’re trying to accomplish. Don’t think of all of these social channels as one big channel. Twitter has a different place than Pinterest, which has a different place than Facebook and even a different place than Instagram and all the other unfolding new technologies, Stotzer says.
Ask yourself: why are you there? What do you want to accomplish? And that’s what really should drive what you do.
“In our case we have great people who care about kids engaging in our content. It’s a little different than what I’m guessing a different type of organization — a b2b organization, or an organization not focused on consumers or an organization not focused on children — might do,” she says.
Opportunities in social media
The social media space is another chance to have more dialogue with customers. And your social media strategy needs to consider numerous angles, such as engagement, customer service and sales, before launching into it.
Highlights doesn’t see social primarily as a sales channel. It’s about building a relationship, building really positive interactions with customers and being in a space where you are top- of-mind with them.
“If you move beyond just Facebook and you think about Pinterest and other sources as well, there are a lot of families engaged in that space,” Stotzer says. “What we’ve found is that the followers we’ve obtained, or the friends that we’ve earned are very, very engaged in our brand and in our social media content.
“We focus a lot on making sure we’re giving them good content, good information, engaging them through jokes and riddles, getting them to participate by getting pictures and their thoughts on things. We’ve found that the customers who we are engaging with seem very appreciative and it’s growing, it’s growing at a substantial rate.”
Legal and privacy challenges
Stotzer says there always studies coming out to tell Highlights what should be done at different ages and how much times online is good for children. The company wants to be conscious of that as it decides what to launch and in what format.
“We do what’s right regardless of what government regulation says — what I mean by that is of course we’re not going to break law, but in fact we might be more strongly self regulated than the law would require,” she says.
“We always put the children and the family and the long-term customer experience at the forefront of our decisions. And so we are very careful in that space. I want to wake up every morning and feel like I’m doing the right things regardless of what the law says.”
For example, Highlights was one of the first COPPA certified websites, which relates to children’s privacy and ensuring companies aren’t collecting inappropriate information on kids.
“We adopted that way before most because we knew it was the right thing to do,” Stotzer says. •
Find out how Highlights for Children is leveraging customer data to provide great experiences worldwide
Learn more about Highlights for Children, at:
When Gordy Opitz talks about ComDoc Inc., he starts at the beginning, explaining matter-of-factly that Walter G. Griffith founded the business equipment sales and service company in Akron in 1955. He traces its financial growth into the millions of dollars and outlines its industry’s evolution.
But the part of the story that elicits the most enthusiasm from Opitz involves the ComDoc employee stock ownership plan, which took 21 years to make its 615 employees 100 percent owners.
“We took an unbelievable amount of pride in being able to say to people that when you are working with ComDoc, you are working with people who own the company,” says Opitz, the company’s president and CEO. “That was an incredibly exciting time for us.”
Those exciting times, however, would come under threat. ComDoc was facing two serious obstacles in 2008: The great financial chill that had befallen the economy, and the loss of its largest product supplier, Ricoh, which was acquired by ComDoc’s biggest competitor, ostensibly pitting the former partners against each other.
Here’s how Optiz lead ComDoc through a turbulent period by ignoring the noise that could have silenced the company.
As ComDoc was moving toward 100 percent employee ownership, it was keeping its eye on Xerox, the industry leader, benchmarking with it to determine a fair share price for its own stock.
“As long as we could stay within 5 to 7 percent of that share price, we were going to keep it as an employee-owned company, which we were able to accomplish,” Opitz says.
ComDoc, at the time, was generating about $125 million in annual revenue. It had a great 2007 and was having a great 2008 when mid-year, Xerox inquired about ComDoc’s interest in being acquired.
Xerox’s midmarket customers had been a target for ComDoc. According to Opitz, “We built our business by going after Xerox placements.” But Xerox adjusted its strategy.
“Xerox recognized that the independent dealers, the ComDocs of the world, were closer to the street, closer to the customer, more effective, more efficient, had better billing processes and better service to their clients — all the things that we had done in building ComDoc,” Opitz says.
Simultaneously, the economy was cooling and ComDoc’s primary product supplier decided to sell direct to the customer. It was then that Xerox made its offer.
“Xerox put something in front of us and we knew it was our fiduciary responsibility to do the right thing for all of our shareholders,” Opitz says. “And we sincerely believed, given the circumstances in front of us, that making sure that our people who had been a part of this organization for many, many years were going to be secure. And that’s exactly what happened.”
ComDoc agreed to be acquired by Xerox, and the deal was finalized in February 2009.
It was a difficult decision to let go of the ESOP the company had worked so long to achieve, Opitz says, but the acquisition had a strong appeal.
“Our employees never had to worry about whether that stock price was going to decrease by 15 or 20 percent in one year, and how long it would take to recoup that drop,” he says.
Xerox was going to allow ComDoc to operate within the culture it had developed over the years, though it was under the new corporate ownership. The move, however, wasn’t without some turbulence.
“As we made the transition, I would say for the leadership group, there was angst involved because we had built succession plans moving forward for the future. Many of us on the leadership team had worked together for 20-plus years. We had been excited about what the future held for ComDoc,” he says.
For the most part, the company was able to retain its key people. Though there was some loss.
“I could probably count on one hand how many people ended up leaving ComDoc because of the transition,” Opitz says.
The hardest transition
While it was able to retain most employees as it transitioned from ESOP to corporate ownership, ComDoc was still facing the loss of its No. 1 product supplier, Ricoh, which, at the time represented about 80 percent of ComDoc’s business.
IKON Office Solutions, a multibillion-dollar company, and ComDoc’s biggest competitor bought Ricoh. Having lost its primary supplier, ComDoc got to work learning the product line of its new corporate owner, Xerox.
Technicians on the service side of ComDoc’s business were somewhat accustomed to servicing different products because there had been many iterations to the company’s product line, which foundationally was 3M, transitioning through Harris 3M, Lanier and Ricoh.
“So we had been used to selling and servicing different products. It was always at our speed, though. In this case, the race came to a quick halt in February 2009, and we could no longer sell Ricoh, so we immediately had to switch to the Xerox product line,” Opitz says. “That was the hardest transition, and I’m going to call it the learning phase — learning the product and then training all our service technicians in being able to service it.”
The task of servicing a brand new product line in a very short time was daunting. Coupled with the company’s sagging morale and the challenge was even more difficult. To get his company headed in the right direction, Opitz had to help his employees manage the problems individually and keep the lines of communication open.
“If you think about communication, it isn’t about all the times when things are going right, it’s also about finding out how people are feeling, what they’re thinking, being able to listen to them and help them understand and provide perspective,” Opitz says.
By having those conversations, he found that what was an issue to some people was irrelevant to others.
“But you’d never know unless you really stopped and asked the question,” Optiz says.
The next step was to reduce all the challenges the company faced into manageable tasks.
“You can’t allow it to become so overbearing that it consumes your thought process,” Opitz says. “We’ve always approached business that way — break it down into its simplest form and take these factors as they’re given to you. What are the pluses? What are the minuses? How do we sort through it? What are the strategies and tactics to push through it? And when you really break a task down, it sure becomes a lot easier to get after it.”
Learning to walk again
That philosophy was applied to training. Service technicians learned the product line at ComDoc’s service training center where they’d work on the product for three to five days to become proficient, and then follow up on their training in the field.
To train its sales force, the company utilized training webinars and developed matrixes of e-learning for each product.
“We would set matrixes up for each of our people with the products. They could do e-learning two hours a night from 5 to 7 p.m. So there was a lot of personal pride, there was a lot of time commitment by our people to get that accomplished.
“We had more than 200 technicians who had fully trained on certain products. I believe the first year we had more than 12,000 hours of training,” he says, which includes both the sales and service sides of the business.
“We had a big vision of what to do and we continued to break that down into small tasks, small focus areas, and we just made our mind up that we weren’t going to let external things influence our company,” Opitz says.
Though it’s a simple philosophy, it was still a very difficult transition. The year the company was acquired was flat compared to the prior one. But once the company started to understand Xerox and its product line, it started to expand, seeing its managed print business grow exponentially during that period.
ComDoc increased its revenues and profitability every year between 2009 and 2013. It grew from $125 million to $155 million in revenue during that time frame and its employee count has increased to 675 employees. ComDoc’s customer base continued to renew and grow year-over-year.
“And every year we just continue to challenge ourselves to continue to get bigger and stronger,” Opitz says.
A tough lesson
Once a company suddenly has the odds stacked against it, there are some simple steps to take to address the issue.
“Communicate early and often with your people,” Opitz says. “Make sure you have shared buy-in for what you’re trying to accomplish, and help people break down their challenges or tasks into small pieces and work hard at getting a resolution to them.
“Don’t let people become overwhelmed with what they believe might happen or what they believe might change.”
Opitz says he just tried to do the best he could every day and tried not to make the circumstances out to be an alarming issue so his colleagues didn’t become overly concerned.
“In my mind, at that time, ComDoc had more than 20,000 customers that had been great, loyal, ComDoc customers who knew our people personally,” Opitz says. “And if we were doing all the right things by our customers while in a product change, I just truly believed in my heart of hearts, that our people would find a way to work through it.” ●
- Communicate early and often.
- Breakdown challenges into manageable tasks.
- Do what’s best for the company and its employees no matter how difficult.
The Gordy Opitz File:
Name: Gordy Opitz
Title: President and CEO
Company: ComDoc Inc.
Birthplace: Meadville, Pa.
Education: He received a bachelor of arts in education from Westminster College.
What did you learn from your days as the assistant general manager for the Atlanta Braves AA team? It’s very simple. Be willing to do anything. I was a shortstop and third baseman for the Westminster Titans. The front offices for minor league teams 30 years ago were small, so, when I say be willing to do anything, I mean there were some days where we did all the marketing for the club. There were days we helped sell tickets. There were days that if it rained we helped cover the field. It was a ton of fun. I realized it doesn’t matter what your title is. If the job needs to be done, you’ve got to figure out a way to go accomplish it.
Who has done the most to inform your perspective on business? Retired ComDoc Chairman Riley Lochridge and former ComDoc President and CEO Larry Frank. They taught us the business, and all the things I’ve talked about before — let’s make sure we continue to do things the right way, make sure we continue to attract and retain the right people in the organization. And ask, ‘Are we building a culture that is going to allow us to grow and sustain our growth?’
How would you like to be remembered at ComDoc after you retire? I’d like to be remembered as somebody who helped make a difference and helped make ComDoc become a better place; somebody who helped fulfill our vision of being a great place to work and a great place to be a customer.
Learn more about ComDoc at:
Richard Carpenter, professional surveyor and president of Accurate Technologies Inc., can’t understand why 3-D laser scanner technology, used in industrial surveying to create accurate 3-D models of objects or environments, isn’t more prevalent in the U.S. — but he has a few ideas.
“We don’t jump on new technology,” he says. “Some of the people who come out of college in mechanical engineering are lucky if they even took one 3-D CAD class. Some of the architects coming out of school haven’t had a full semester of 3-D CAD. So we’re a little bit slow to get on this, but it’s an incredible technology.”
Carpenter should know. He has been running his own industrial surveying business since 1987, having worked in The Timken Co.’s steel mill engineering facility for 10 years, where he learned the mechanical aspects of surveying.
“Years ago, most industrial firms had their own engineering departments and they provided most of their own services. They really didn’t go to outside people,” he says. When Timken, and other industrial companies, reduced staff in their engineering departments, the mechanical surveying that had once been provided in-house wasn’t available. “It went from a market where 90 percent of the work was done in-house to probably 90 percent of the work now is subcontracted.”
That’s when Carpenter started getting calls to do mechanical surveying work.
“I started getting enough part-time work that within a few months I was busy full time,” Carpenter says.
Finding a niche
When Accurate Technologies first got started it mainly helped install equipment to achieve the higher accuracies that the industrial firms were demanding. The company would work with mechanical equipment installers to put in mill equipment. The contractor would get the equipment within 1/16 of an inch, and then call Accurate Technologies to get the final alignment.
“When you’re dealing with moving parts, heavy equipment and high horsepower motors and gearboxes, misalignment creates problems,” Carpenter says. Misalignment could damage product as it comes off the machines, which means a company could be scrapping product because the equipment is not aligned right.
“And that’s the No. 1 reason people call us,” Carpenter says. “For us a good project is when someone says they’re scrapping 6 to 7 percent of what they run, and we get done and they’re scrapping 0.5 percent or 1 percent. That happens to us quite often with steel mill equipment or any industrial equipment.”
Matching people with technology
In order for the company to grow with the work that was available, it had to train employees to do industrial surveying from within because people with those skills weren’t prevalent in the market.
Land surveyors, those who have the closest skills to industrial, are taught to make ground measurements that are accurate to 1/8 of an inch, far from the 1/1,000 of an inch accuracy needed in industrial work. In addition, much of the equipment and processes used by land surveyors isn’t suited for industrial survey work. Now, with laser trackers and scanners, it’s especially true — the equipment is very different.
The 3-D laser trackers employed by industrial surveyors use laser systems to “draw” surfaces it comes in contact with. It provides 3-D coordinates that translate to 3-D positions in space.
In addition to the tracker, industrial surveyors also have 3-D laser scanners. The equipment can shoot 900,000 points per second for every 1/16 or 1/8 of an inch, and each point has an XYZ position. This results in a point cloud — billions of points interpreted by software that analyzes common features in the points. These commonalities could translate into cylinders, flat surfaces, piping, etc. The result is a 3-D drawing of all the elements of the space being shot.
“Jobs that used to take me one month I’m doing in two days with this scanner, and giving 100 times the information I had before, if not 1,000 times,” Carpenter says.
In the past it took a high-precision surveyor to do industrial work because everything was done with optics. Optics means using traditional instruments — a surveyor’s transit — and relying on a surveyor’s ability to read a scale to 1/64 of an inch.
“But maintaining accuracy with the optics is very difficult,” he says. “When you deal with optics you have to have two instruments, you have to have a transit to shoot a straight line and an optical level to get the elevations. So whenever you’re using optics you’re really not in a 3-D world.
“Probably 90 percent of industrial work is still done with optics. But the laser tracker can far exceed the work you can do with optics. The speed and the ability to 3-D document what you’re shooting versus handwriting things in field books is quite a difference.”
Seeing into the future
The largely digital technology is allowing Accurate Technologies to undertake projects for engineering firms in Canada and Germany. One of its projects, a steel mill, was scanned entirely so it can be designed on three different continents.
“They’re going to have different engineering people all over the world looking at that information and designing it in unison,” says Carpenter.
“I know this is the future,” he says. However, he says not enough people are being trained properly to enter the field.
“We’re going to be in a 3-D CAD world,” Carpenter says. In the bigger picture, he expects the floor plan of a building and its utilities will get interpreted through geographic information systems, or active 3-D models.
Architects and engineers of the future may walk though a 3-D model of a building and see it in its entirety as it exists. It also allows the user to attach databases, drawings and spreadsheets so he or she can access any information about a facility.
“And there’s already software out there that makes that happen in 3-D. If you had a 3-D model of your facility you could have the ability to look up, down and around and see everything in a model. I think we’re really going to get to that 3-D world fast.” ●
Having a job or a career can be central to a person’s self-confidence. Coleman Professional Services Inc., a nonprofit provider of behavioral health and rehabilitation programs, works to find jobs for those who may have more trouble finding a job than most — those who are mentally challenged or physically disabled.
CPS offers job placement, training and temporary work for those with barriers to employment while helping employers connect to this segment of the workforce through recruiting and outplacement. When successful, it means getting people off entitlements and helping them become more productive members of the community.
Smart Business spoke with CPS’s President and CEO Nelson W. Burns to learn more about the organization and the impact it has on those it serves.
SB: Where is CPS headquartered and what geographic areas does it serve?
NB: Coleman is headquartered in Kent, and serves individuals in seven Ohio counties that include Trumbull, Portage, Stark, Summit, Allen, Hardin and Auglaize.
SB: Whom in the community does CPS seek to help with its employment services?
NB: Coleman’s employment services are designed to serve any adult more than 17 years of age who has a disability.
SB: What services do you offer these individuals and what do you hope is the end result of their involvement?
NB: Our employment services work to support a final outcome of employment. However, Coleman might provide a wide variety of services to help facilitate employment. These services might include skill training, job experience, education support and employment aides such as clothes or transportation vouchers. Coleman operates businesses that actually hire people with disabilities. Coleman employs more than 80 people with disabilities in its Coleman Data Solutions business, a document management service.
SB: How would individuals with barriers to employment be affected if these CPS services suddenly vanished?
NB: These individuals with employment barriers would rarely be able to find employment or keep employment. Without employment, individuals with disabilities would remain on entitlement funds and less likely to contribute to their families and the community.
SB: What misconceptions does the organization spend much of its time overcoming?
NB: Many people think that people with disabilities are lazy or ignorant. The truth is that many of these individuals are very reliable and loyal employees.
SB: How do you quantify the benefits a community (business and social) experiences when these individuals are able to get jobs?
NB: The key benefits from employment are reduction of entitlements, active participation in the community without idle activities, proper model behavior for their families and more discretionary money to participate in the economy.
SB: What does it mean to someone who otherwise might have trouble getting a job to be employed?
NB: Employment is an important factor of our self-concept. With a job, people feel more confident about themselves and their contribution to the community. In a recent testimonial, a woman of 40 years of age commented to me how her unemployment resulted in deep depression and hospitalization. These conditions can lead to broken families, mental illness, addictive behavior and expensive health care.
SB: Other than funding, what is CPS’s most critical need?
NB: CPS continues to have challenges in helping people navigate through complicated systems of public aide, Medicaid and a complex system of governments and fellow nonprofit organizations.
SB: Why should a company consider employing individuals with the disposition(s) you serve?
NB: Companies can hire a reliable individual who will remain in employment. Our clients have a history of loyal and focused work experience. A company can win in business as well as helping a person and helping the community.
SB: How can companies get involved with CPS?
NB: Companies can call on CPS’s employment services for their special needs in their business. ●
How to reach: Coleman Professional Services, (800) 673-1347 or www.coleman-professional.com
Employers are trying to encourage their employees to save more for retirement, but the numbers aren’t in plan sponsors’ favor. According to the U.S. Census Bureau’s 2010 census, 73 percent of our population will struggle financially during retirement.
Why are employers so interested in employee plan participation? Discrimination testing plan sponsors must go through has encouraged the drive to make sure participation is adequate for non-highly compensated employees. If participation and deferral percentages are low for non-highly compensated employees, highly compensated employees can’t defer the maximum contribution amount, which leads to refunds at the end of the year.
“To make a plan financially healthy for all employees, good participation is needed across the board,” says Linda A. Cahill, a principal at Benefits Resource Group.
Smart Business spoke with Cahill about ensuring you have adequate participation in your retirement plan to maximize its impact for all employees.
How does discrimination testing affect employer plan participation levels?
Although individual situations can vary, the general rule of thumb for discrimination testing is that highly compensated employees (HCE) are only able to contribute about 2 percent more than the average of the non-highly compensated employees (NHCE). For instance, if a company’s average HCE is deferring 7 percent and the NHCEs were only deferring 4 percent, it’s possible that the company could fail the discrimination test and the HCEs would be given refunds. These refunds can end up costing HCEs thousands in potential retirement savings, so it’s important for a company to encourage plan participation among all employees.
How can employers boost plan participation?
Employers are adding plan design features such as automatic enrollment to boost engagement. Survey data shows that about 47 percent of all plans have an automatic enrollment feature, and 89 percent of those employers use auto enrollment for new hires. This automatic enrollment is also being used to bring in nonparticipants, allowing employers to ‘refresh’ enrollment.
Many plans have increased their automatic enrollment amount from 3 to 6 percent. In 2010, 7 percent of all plans used 6 percent contribution. Now it’s 10 percent. That’s the direction things are headed.
What aren’t more employees participating in or saving enough for retirement?
It’s a lack of education and communication regarding the importance of saving and starting early. Fortunately, there’s been an increase in communication to employees regarding retirement plans. More than half of plan sponsors surveyed indicated they’ve increased their employee communication. This takes the form of group and one-on-one sessions. Some are integrating a retirement income calculator in these sessions to project if an employee is on track to meet his or her retirement goals.
Technology is the key to driving participation, but it’s underused because of a lack of communication and education. There are tools that can dial-up deferral or contribution levels and determine the outcome, but participants must be made aware of these in order for them to be useful.
How can employers help employees know if they’ll meet their retirement goals?
Employees should sign up on the Social Security Administration’s My Social Security (www.ssa.gov) site to determine their estimated benefits and double-check salary data. Using that information with current account balances and a retirement income calculator gives a pretty good estimate of what income a person has for retirement.
It’s good to have an annual review with the plan sponsor to determine if employees are participating, if they’re invested appropriately or if they are paying attention to details, because with a 401(k), participants are responsible for their own retirement outcome. They need to look to make sure it’s doing what they want it to accomplish.
People spend hours planning their vacations, but don’t spend the same amount of time planning their retirement, which is potentially the longest vacation one will ever take. Get people to think about these things today rather than allowing them to continue to delay planning until it’s too late. ●
Linda A. Cahill is a principal at Benefits Resource Group. Reach her at (216) 393-1812 or email@example.com.
Insights Employee Benefits is brought to you by Benefits Resource Group
Highlights for Children might be best known for its Highlights magazine, which many children — and before them their parents and their parent’s parents — get at school or thumb through in doctors’ and dentists’ waiting rooms across the U.S.
While it’s proud of its past, the company has invested heavily in its future, propagating its brand internationally to reach children across the world. As it grows its presence and its products, the company is studying its customers and consumers, adapting its processes, expanding digitally and aligning its focus on the customer experience.
“We’ve definitely shifted from being a magazine-focused company to putting the customer at the middle of our thinking; we like to think of ourselves today as a family media brand,” says Shelly Stotzer, executive vice president and chief marketing officer for Highlights For Children.
Highlights breaks its audience into two segments: its consumers, who are the children from ages 0 to 12 who use its many products, and its customers, who are “almost anyone who is part of the village of raising a child,” Stotzer says. That includes parents, grandparents, aunts and uncles, teachers, doctors, caregivers and anyone else who is helping raise a child.
“We see people who buy from all demographics, all backgrounds, all different types of professions,” she says. “We definitely have a very diverse market.”
The company has a stronghold in the U.S. market, and has spent the past four years working to establish its brand across the globe. Today the company has a presence in Korea, Brazil, Ireland, India, Poland and China, putting some 4 million products in the latter country this year, compared to a few thousand in years prior.
Reaching all those countries means the company has had to expand its infrastructure, working with local partners in foreign markets to adapt its products to each one’s specific culture and people.
“We find great partners who we trust, we work closely with them to make sure we stay true to our mission, and then we adjust to make sure we’re appropriately meeting expectations and needs,” Stotzer says.
Highlights has also expanded its digital presence, providing children’s content on the Web for the past 10 years, and launching apps as far back as five years ago.
“Each day we learn something new,” she says. “The technology is changing so quickly. It wasn’t long ago that there weren’t many children’s books available in e-book format, but there are today.
“Children are not only downloading them but they’re also borrowing them from the library in a digital format.”
That means the company has had to keep its eye on the market to understand the needs of its consumers.
Putting customers first
Monitoring customer behavior serves multiple purposes for Highlights, such as helping its shift in philosophy from product-centric to customer-centric, in part to improve customer service.
“When we were product-centric, we were focused on how to increase sales or improve the experience within that product experience,” Stotzer says.
The company’s more recent customer-centric approach focuses entirely on the purchase and service experience.
“It says regardless of which product you buy or which channel you buy it through, we want to make sure that the infrastructure we’re putting in place, the processes, the experience is consistent and positive across that entire experience,” Stotzer says.
Illustrating the difference from one approach to the other, she says if someone bought a book from a retailer and they had a question about it, they could call an 800 number. But if that same customer on the same call had a question about a different product, they would need to be transferred or call another number. Today, one customer service staff at one number serves all its products.
“I believe that repeat buyers come from good customer experiences, good brand impressions. What necessitated it was recognizing that if we want to be as successful 60 years from now as we are today, if we’re going to get into all these new products and markets, we need to make sure we do it well.
“Simply saying if I’m a customer of Highlights, this is how I want to be treated, and if I want customers to come back this is what we should expect,” Stotzer says.
This approach is particularly important as the company continues to grow its product offerings from magazines into toys, merchandise, books and mobile apps while simultaneously building on its direct marketing approach by adding e-commerce and retail, all along with developing strategic partnerships in foreign markets.
“By doing so we needed to really pause and make sure every interaction, how we made decisions, how we set up our teams, how we engage the customer really reflected what we wanted it to reflect, which was a consistent, positive, customer experience,” Stotzer says.
Gaining greater insight
Taking that time to reflect led Highlights to establish its customer insights team, which was put in place to not only help the company provide better customer experiences, but also to leverage customer and market data differently.
“We have always done a good job of doing market segmentation for direct marketing,” she says. “We’ve always done a good job of understanding the profitability of our sources.
“But our customer insights team kind of flips that information on its side and allows us to look at who are our best customers across all the different channels we sell through — all the different product formats that we sell, who our best customer is, who is most likely to buy another product once they’ve bought our Hello magazine, who is most likely to transition into our High Five and into our Highlights, but then who also might be buying an app or some other type of product that we have to sell,” Stotzer says.
Highlights’ marketing database tool enables the company to better understand its customers’ experiences and life cycles across all of its products.
“So with the new database, it is structured in a way that the customer view is the first view that we see,” she says. “It provides a lot more flexibility in slicing and dicing that information so we can make good decisions. It also allows us to effectively target the right message to the right customer at the right time through the right channel and allows us to track that in a very visual way.”
The database further allows Highlights to track customer purchases and marketing, which permits more trigger and automated marketing that makes it easier to follow up with the right transactional, sales or content touch point at the appropriate time.
Chasing a vision
The customer insights team also fielded Highlights’ first brand study this past spring. The study was an effort to understand not only what customers think, but what potential customers who aren’t engaging with Highlights today think and how Highlights might change their perceptions over time.
It’s also a step toward helping the company transition from being known primarily as a magazine for children in the U.S. to an international family media brand — “A customer-centric, global, multichannel, family media brand,” Stotzer says.
She says the study was a starting place that established where the company was and compared it to where it wanted to be.
“We really put ourselves up against brands that we looked to as family media brands,” Stotzer says. “In the study, we did not put us up against brands that we felt were our historical competitive set where we might have been the leader in the group. We really wanted to create an aspirational set that would help us understand where we sit compared to those.”
She says she was happy with the results.
“I’m quite proud of what we’re known for. If you look at the characteristics that people think of us, they are right where we want them to be. We’re known as wholesome. We’re known as good for children. We’re known for being respectful. We’re known for a lot of the characteristics that we’ve strived to be known for.”
Highlights will repeat the study annually to track its progress against its benchmarks.
“We have a lot to build from, and that was helpful because there’s so much noise in the world today, you’re not sure where you really sit, but it was really helpful to know that we have a great foundation to build on,” she said.
The company is looking forward to spring boarding from that foundation to the next level.
“The world is a big place,” Stotzer says. “We have plenty of countries and plenty of children all over the world who we can reach with the products we have, and we’re also continuing to add several products a year to our portfolio.
So we need to do all those things while also keeping an eye on the changing digital market and the changing needs of children.” ●
Find out how Highlights for Children is creating a comprehensive Web and social media strategy for all digital platforms
Learn more about Highlights for Children, at:
You’ve just launched your product, which has taken months of research and development effort to bring to market. Soon after its debut you receive a notice that you’re infringing on an existing patent or trademark.
You’re now left with a decision: License the technology that you’ve infringed, which you may or may not be able to do, or wind up with a costly infringement suit. You could fight the suit, retreat and try to design around the patent, or scrap the whole thing and start again. Any of those choices come with substantial costs. All the while knowing that with a little bit of due diligence up front all of it could have been avoided.
“Don’t undervalue your business’s IP,” says Jeffrey N. Zahn, an attorney with Fay Sharpe LLP. “Do what’s required to make sure it’s protected and not potentially infringing a third party’s IP rights. This will help you protect your investment in your IP and avoid unnecessary third-party, IP-related expenses down the road.”
Smart Business spoke with Zahn about the intellectual property (IP) mistakes companies most often make.
What IP mistakes do businesses make most often?
The three biggest IP mistakes, in no particular order, are the failure of a business to adequately protect its IP, failure to avoid infringing the IP of other companies and failure to seek the advice of an IP attorney.
There are many ways a company can leave its IP exposed. Those include not using nondisclosure agreements when working with outside parties; forgoing patentability investigations to determine if a patent would suitably protect company technology; failing to file provisional and regular utility and design patent applications when appropriate; allowing trade secrets to leak; not ensuring employees, outsiders and third parties maintain the confidentially of the company’s critical technology; and failing to federally register trademarks to protect brands.
Another major problem is failing to avoid infringing on another’s existing IP rights. This is often the result of not conducting freedom to operate searches for issued patents, as well as published pending patent applications, and trademark clearance searches.
But the one mistake that often leads to all others is failing to seek the advice of an IP attorney. This is a critical aspect of due diligence and developing a solid and secure IP strategy.
Do large or small companies typically make these mistakes?
Smaller companies are more likely to make these mistakes. Smaller businesses often believe an IP attorney is a service they can’t afford, or one is only needed when filing a patent or trademark application. In most cases, it comes down to not recognizing the value of IP to their businesses.
In contrast, the larger a company is the more likely the company is educated about IP and has in-house counsel and/or a relationship with an IP firm to address these issues.
Is there a particular time when a company is more vulnerable to IP issues?
Businesses are typically more at risk during the early stages of their existence. That’s why companies should take stock of their IP and look into the market to identify the IP of the relevant third parties, such as competitors, early on. This can save a lot of time and expense if it’s done up front.
Companies are also vulnerable during the early stages of a product development cycle. Bringing a potentially infringing product to market may require the company to license the infringing technology or trademark, or rebrand or redevelop the product if the technology or trademark can’t be licensed. That’s why it’s critical to conduct freedom to operate searches and trademark clearance searches during the initial stages of a product’s development.
What can help businesses prevent these errors from happening?
The best tool is education and a proactive IP management program. Have conversations with those who know the issues — someone who works in the IP field regularly, whether that’s an in-house attorney or an IP attorney at a firm — because affected parties must be aware of IP issues. Then continue to talk with an IP attorney as your business grows, new products are developed and new markets are served. Many businesses would be pleasantly surprised how valuable an initial consultation with an IP attorney is relative to the expense.
An ounce of prevention is worth a pound of the cure. This is especially true in the area of product design and branding where a little due diligence to investigate third party IP rights can help you develop your product and brand strategy so it doesn’t potentially infringe existing rights. This can help you avoid potential infringement issues, such as a costly patent or trademark infringement suit.
Jeffrey N. Zahn is an attorney at Fay Sharpe LLP. Reach him at (216) 363-9168 or firstname.lastname@example.org.
Insights Legal Affairs is brought to you by Fay Sharpe LLP
Rising health care costs have driven up insurance premiums, straining employers’ funds and leaving less money available to invest in their businesses, hire employees or award pay increases.
“Any time costs go up, there’s less money to spend on other things that are important to the growth of a business,” says Ross Farro, a principal at Benefits Resource Group. “It comes down to companies deciding how they will pay the increased expenses and continue to offer health care benefits.”
Smart Business spoke with Farro to learn about strategies employers can utilize to effectively deal with rising health care costs.
Are certain types of businesses hit harder by these changes than others?
Generally the size of the business determines how it’s treated under the Affordable Care Act (ACA). For instance, the new law means community rating is used to determine premiums for companies with fewer than 50 employees, which eliminates medical underwriting. This has driven up rates for companies with healthier workforces — sometimes as much as 50 to 120 percent. They are also obligated to provide minimum essential benefits to meet the plan design requirements under the law.
Also, employers that offer group benefits are being hit with fees and higher taxes that come with the ACA. Large employers are also still awaiting final U.S. Department of Health and Human Services guidance for measuring the eligibility of employees during 2014 for required coverage in 2015.
What are the most troubling issues for employers as health care costs rise?
Employers are concerned with controlling costs without reducing employee benefits. The taxes and fees that come with the ACA are substantial. This year, taxes and fees are roughly 5 percent of fully insured premiums, and are expected to increase next year. Employers paying $1 million for health care premiums will have $50,000 in associated fees. For many companies, that’s the equivalent of one potential new employee’s annual salary.
What should employers do to better control health care-related expenses?
Wellness plans and an emphasis on consumerism are two approaches that can help employers better afford the health insurance benefits they offer employees. Negotiating with or changing providers really doesn’t work. A better solution is to focus on things that can be changed, such as addressing obesity and chronic disease within your employee population since these are factors that increase costs. Wellness initiatives not only have an impact on insurance premiums over time, but can improve productivity and mitigate disability claims.
Health care consumerism is fundamentally about restructuring an employer’s health benefit plan into one that puts economic purchasing power in the hands of its employees. To leverage this approach, companies should consider programs such as a health reimbursement account or a health savings account paired with a high deductible that pays for health care expenses with pretax dollars from the employee, employer or both. Either strategy brings attention to the costs of services and prescription medications, encouraging employees to be more cost conscious.
Self-insuring allows employers to pay the costs of claims rather than pay for a fully insured premium, offering a more transparent look at costs. It also can substantially reduce the amount of new ACA fees and taxes. Self-insuring is becoming a viable option for employers with fewer than 100 employees, as insurance carriers are developing products for groups as small as 25 employees.
If employers do only one thing to deal with the challenge of rising health care costs, what should it be?
Employers need to work with a consultant, not a broker. It’s not only about shopping your benefits with other insurance providers; it’s about being creative and knowledgeable. You need a proactive consultant who understands the laws and can develop strategies to help you. As much as employers might want to wait to see if something comes along to derail the ACA, they must realize it’s not going anywhere at this time. ●
Ross Farro is a principal at Benefits Resource Group. Reach him at (216) 393-1820 or email@example.com.
Insights Employee Benefits is brought to you by Benefits Resource Group
Companies invest significant resources developing products and services that are intended to generate revenue. The ability to prevent competitors from copying these new products and services utilizing intellectual property (IP) protection is essential.
However, many companies fail to fully protect all of their resources. Or, by failing to educate their workforce on the vulnerability of unprotected assets, unintentionally spoil the outcome of products in development before they reach the market.
Smart Business spoke with Sean M. Weinman, an attorney at Fay Sharpe LLP, to learn what companies at various stages of their lifecycle must do to protect their IP.
What are some common mistakes young companies make when it comes to their IP?
The most common mistake young companies make is failing to protect their intellectual property (IP). Some companies choose not to protect their IP because they don’t believe that IP protection is available. Others choose to protect IP but file for such protection too late, while some avoid seeking protection because of cost concerns.
One common mistake is thinking that patents are the only IP that matters, which ignores the importance of copyrights, trademarks and trade secrets. Failing to protect all types of IP can have devastating effects on a company by leaving the door open for competitors and customers to access and copy vulnerable IP.
What mistakes do more established companies make when it comes to IP?
A common mistake more established companies make is mismanaging their IP. Protecting IP can be expensive. Therefore, an IP strategy needs to be developed with an understanding of how IP ﬁts into an overall business strategy. A good strategy should at least consider which assets should be protected, the extent of the company’s investment in pursuing IP protection, and how IP can support the company in achieve its business goals.
More established companies often fail to perform an IP audit to check that all IP is being protected properly. A review of all existing products and those in development should be performed annually to ensure that all potential IP is being protected and valuable rights are secured. IP audits also help ensure the right IP is being protected. Many companies waste thousands of dollars protecting the wrong IP. Protecting products and assets that have little potential can negatively affect a company’s bottom line.
Along with having a strong IP strategy, it is important to understand competitors’ IP to avoid costly lawsuits and ensure up-and-coming projects have strong market potential. Not knowing the scope of your competitor’s IP protection could impede your own product development if you incorrectly assume it’s too close to something your competitor is developing, even when a lucrative opportunity exists.
How can companies avoid these mistakes and gain a better understanding of IP?
First, hire an IP attorney who has experience developing IP strategy and protection, ideally in the technology domain of the company. You want to find a lawyer who will work with your company and who understands your company’s business, strategy and plans for the future.
Include confidentiality and IP provisions in agreements with employees, contractors, suppliers and other parties. A premature public disclosure of a new product can negate future IP protection. In many cases, foreign patent rights are lost if an invention is publicly disclosed or offered for sale before a patent application is filed. Additionally, all employees, contractors, and other parties working close to your IP should be required to assign any and all IP to the company. It is important that non-employees include similar provisions assigning IP rights to the company.
Further, make sure your entire company is educated about IP. In most cases, only management and engineers understand IP protection. However, other groups of employees are also associated with the IP of a company, such as marketers, salespeople and technicians. Educating an entire company about IP can help ensure that IP rights are not lost because valuable IP isn’t identified, a public disclosure is made prematurely, or protection is filed too late to be effective.
Clark David Baker, president and CEO of the YMCA Of Greater Houston, doesn’t have to dig deep to find an example of how the YMCA assists future business leaders in the region.
Benton Love, former president of Texas Commerce Bank, and Gerald Hines, founder and chairman of Hines, one of the world’s largest real estate companies, both share something in common besides success in their respective fields: Both at one point lived in housing provided through a Houston YMCA residential program.
“We’re a people organization,” Baker says. “Therefore, we don’t make widgets; we build people.”
The 37 YMCAs that comprise the organization that has been a part of Houston for 127 years serve 100,000 people weekly through its programs, which are lead by 6,000 full-time staff and 13,000 volunteers. Houston, however, is not the same city it was more than a century ago — in order to cater to this generation of residents, you have to understand them.
“Back in the day when I was coming along, we threw a couple of basketballs out in the gym and everybody just came and played. Everybody got along, everybody looked the same, everybody was lower-middle income,” Baker says. “You come to Houston, Texas, (today) and we’re the most diverse city in the country. We speak 23 languages here at our YMCA.”
While the community the YMCA serves has changed, the organization’s mission hasn’t.
“Our core values are the same. Our core programs are the same,” Baker says. “But in Houston you’ve got to be sitting on the edge of your chair because of this multicultural community — one size doesn’t fit all.”
Here’s a look at how the YMCA has evolved with the times, placing an emphasis on getting a diverse, qualified staff to serve a diverse population.
Building the leaders of tomorrow
The key to serving that diverse community is finding the right people for the job.
“One of the wisest men I know told me there are only two things that can get you in trouble: You’ll run out of money, or you’ll run out of talent,” Baker says. “Spend your time on the talent, and you’ll never run out of money. So we hire passionate young people who want to make a difference in the community.”
According to Baker, the YMCA’s professional-level jobs offer competitive pay, resulting in 20 to 40 applicants for each opening.
“We’re a great place to work,” he says. “We’re a great service to our community and people want to work for us. So we do not have a staffing shortage or a crisis in getting talent.”
Volunteers primarily come from the families of the children served by the YMCA. He says 73,000 kids played youth sports last year, all coached by volunteers.
While filling positions seems to come easily, developing the organization’s future leaders gets special attention.
“One of my jobs is to recruit, train and retain the best and the brightest people available. We have a serious commitment to training,” says Baker.
To that end, the YMCA makes a significant investment in preparing its staff to advance, as evidenced by the $3 million it earmarks for training out of its $115 million annual budget. It also has a 35,000-square-foot training center located in the center of its service area, which will train about 2,000 people this year, according to Baker.
The two-story YMCA Center for Leadership Development has conference and training rooms and a computer lab through which webinars and other online training programs are hosted for those who can’t be there in person. It also houses Springfield College, which assists the YMCA with leadership development.
“We grow our own leadership,” Baker says.
The YMCA also uses career mapping coupled with a personal development plan for all full-time staff that plots where the employee wants to get in the organization and helps him or her understand how to get there. Testing is conducted to see where employees excel, and gap analysis is used to see what skills the employee lacks. Each employee’s career development plan is reviewed every two to three years to track progress.
The YMCA also utilizes external quality measures to rate performance, such as the Net Promoter Score, which is used to gauge customer satisfaction. The staffers who run YMCA programs get measured regularly through the NPS, and from that each staffer’s gap analysis data is gathered.
Baker adds that the Houston YMCA has 10,000 donors who give annually to keep the organization’s work going. Satisfaction, then, can be measured by how many of those donors return to give the next year.
“And, thank heavens, we have about 90 percent of the people who give to us give annually for years and years and years,” Baker says.
But does all this training work?
“I would suggest that we have very low staff turnover. Our jobs are coveted. If we open a director’s job at one of our Ys, we have three or four of our staff who are qualified for that, and we’ll get them in front of a local board, which has a lot to do with who we hire,” Baker says.
Additionally, Baker says during his 57-year tenure he’s helped develop 23 staffers whom are now CEOs leading YMCAs around the country.
“You want to be known as a good person to work for. And I like to think I’m a good person to work for. I want them to come in and have a joyful experience; they’re all going to work hard. But I think your measure of success is who did you train and how well are they doing,” Baker says.
However, before a CEO can be placed, he or she has to be discovered.
“The simple answer is you want to find passionate people who believe in your mission,” Baker says.
He looks for people who “have a head for the business and a heart for the mission. There’s no mission without money, so you’ve got to be a good manager, you’ve got to know how to do a budget, you’ve got to know how to stay in a budget.”
Find value in a homegrown product
Baker himself is no stranger to the YMCA’s method of growing its own leaders. He’s been with the organization since he was 12 years old and was recognized by the director at the time as having a potential future with the YMCA.
“The joke is I went to the Y one day and just never went home,” Baker says. To keep the YMCA membership he received as a gift from a neighbor when he was 10 for a third year, he needed to work for it, so he started mowing the YMCA’s yard.
“At 12 years old, I could mow the grass with the best of them. I was a good edger with the old hand clippers. I used to pride myself on squaring the corners when I mowed. I got recognized by the (YMCA) director who told me if I took as much care with my job as I did with that yard, I had a future working there.
“So he gave me my first job. I was a gym attendant — I put the balls out and kept score at the games and kept order in the gym,” he says. “That’s how I started. So I literally started at the bottom and worked my way up.”
Baker stayed with the YMCA, working during his two years at Vincennes University.
He went on to Covenant College in Georgia, where he graduated with a bachelor’s degree in recreational management, before spending three years in the Army as a personnel specialist.
He says the Army gave him the chance to work with many different people from many different places.
“The Y and the Army are very similar in that regard. We’re a melting pot. We work with everyone. The end of our mission statement has two words, ‘For all.’ In Houston, Texas, that means the haves and have nots, both sides of our community.”
Baker was back in the U.S. in 1970 and was offered a job at the YMCA as youth director.
“And that was my first real job — you have a lot of jobs, but when they give you benefits and put your name on the letterhead you’re a real staff member then,” he says.
The job paid $5,500 a year with $100 a month to buy health insurance.
“The YMCA and the United States Army are the only places I’ve ever worked. I love the Y, and I love the job. You never made a lot of money but you always felt good about the money you made,” Baker says.
Telling the story
Before electricity, bug spray, air conditioning and the telephone appeared in Houston, there was a YMCA, according to Baker. And with its wide reach through all levels of class and culture and its aim of inclusion, the YMCA touches many Houston residents.
“Our business model is to charge those who can pay, and let those who can’t come in free. That’s a terrible business model, but it’s a wonderful human service model. We still deny no one service due to their inability to pay,” Baker says.
The Houston YMCA is a 4-Star Charity, according to Charity Navigator, which rates nonprofits based on financial health and their accountability and transparency. According to the site, among the more than 6,000 charities evaluated by Charity Navigator 30 percent obtained a four-star rating.
It seems many people recognize, utilize and appreciate what the YMCA brings to the Houston community. But making sure the story gets told and the brand’s strength is maintained takes work.
“Back in the day Santa Claus, Coca Cola and the YMCA were the three most recognized names in the world. Everyone you talk to loves the YMCA, but they don’t all know why,” Baker says. “My job and our marketing people’s job is to tell people why they need to love us.
“We’ve got the audience; we just have to tell the story. The best way to tell the story is to let them tell the story. So we believe in T-shirts, we believe in bumper stickers.”
The organization also has “mission moments,” which are stories told about what the YMCA means to somebody, what happened in someone’s life because of YMCA classes and programs.
The Houston YMCA has been telling its story since 1886 when the city had 12,000 people, and has managed to stay successful, much like its leader.
“It’s been a great career, a great opportunity,” Baker says. “It’s not a job. It’s a real ministry. You get up every day and you help people. It’s been good to me, and I hope I’ve been good to it.” ●
How to reach: YMCA of Greater Houston, (713) 659-5566 or www.ymcahouston.org
Foster homegrown leaders.
Utilize leadership development programs.
Measure progress to support personal growth.
The Clark Baker File
Education: Bachelor’s degree in organizational management from Covenant College in Lookout Mountain, Ga.
Born: Washington, Ind.
Hobbies: Baker is a pipe organist, which he says can be a difficult hobby to keep. In order to have access to the instrument he says, “You’ve got to become friends with pastors.”
Being friends with pastors also helps Baker with another hobby of his, attending estate sales and collecting antiques, particularly of the religious type. His best pick is two prie-dieux items from a church that closed in his hometown.
Baker is also a boater, owning a Carver 33 Mariner. “It’s old but it’s faithful, like me,” he says. “Boating is family and friends — you can always find somebody to go out with you.”
What’s one thing you’d love to talk about but never seem to get the chance? Probably my military service. People never ask what I did in the military. I was able to travel to 15 countries in Europe and abroad. For a little boy from Southern Indiana, those are big stories.
What’s your advice for burgeoning young leaders? Distinguish yourself in some way. Be known for something. There are too many people in the crowd; how are they going to know it’s you?
Who contributes most to your worldview? Malcolm Gladwell. He’s really an anthropologist helping us understand how we live today, why we do things we do today. I find since I work with people and since people are what I believe in I need to read books about people and their thoughts and their ways.