Maureen Herrmann believes that knowledge is power, and she wants all her franchisees to believe that, too. Herrmann is co-founder and co-president of Ageless Remedies Franchising Co. LLC, which combines a medical skin care treatment center and a retail apothecary into each of its stores.
Herrmann and Jennifer Curtin, also co-founder and co-president, have developed a comprehensive training program that prospective franchisees must take to receive certification. Then it’s their job to pass that training down to employees.
Since founding the company in 1999, Herrmann and Curtin have grown it to 11 locations in five states with more than 100 employees, all of whom have a voice in the company.
Smart Business spoke with Herrmann about how to ensure your employees have a voice at your next management meeting.
Q. How do you train your leaders?
Jen and I started the original store; we learned a lot from having that business. We worked internally to where we felt we could create management by inspiring our workers to work as a team. One of the important things within that was to support ongoing learning and study for them in almost a mentor environment.
So if we brought someone on, we’d really want to mentor them and really create that teamwork and that learning environment. Everyone learns from everyone.
We also want our leaders to direct others in ways that make the brand more cohesive. So it’s important our leaders all incorporate a certain belief, value and knowledge of the brand.
We also support a lot of communication. Our leaders need to influence people by communicating and incorporating them into the team.
Q. How do you make the brand more cohesive?
They have to really understand the vision and what we like our leaders to share to understand our vision. Not everyone works together on a daily basis, all the employees from other locations or other regions. That’s why it’s important for us to come together through workshops or conference calls, so we can really keep to the core of the vision.
That’s what I mean by cohesion: The leaders at the top like to communicate together so the cohesion of the overall brand stays consistent.
Q. How do you make sure your message filters down through the ranks?
We have trainings and workshops at the management level on down. The leaders direct to the managers, and the managers are the ones who hand the information to the team. They work together.
It’s important that our managers work for the team and the employees not the other way around. This allows our employees to excel and feel as if they are part of the company. It is the managers in the individual stores who actually take the information, take our vision and incorporate it into each individual center.
We encourage them to motivate and empower the individual employees by mentoring them and [through] effective ongoing training to help them gain the new skills and keep the promises we put in place.
Q. How do you empower your employees?
Allowing them to have a voice within the system has empowered them. We include them in the decision-making process. That allows them to make a difference, and we really encourage feedback from them.
If they have concerns or ideas, we are very open to that. If there is a consensus from a lot of the different centers, we do make changes. If it’s an effective change, we will strongly consider it.
Q. How do you attract and retain quality employees?
We’ve put together an employee manual that creates a very positive working environment, and we expect our franchisees to follow that. The intense training and professionalism that our concept and vision incorporate really helps us to retain employees.
We definitely look at talented, empowered human capital as a prime ingredient of any organization, as far as success, and it is very costly. We understand that cost when we bring on employees and lose them.
So what we try to do from the front is create incentive, a very fair, aggressive pay scale and growth system for them to do really well in. Then we provide a good amount of training and skill to employees.
We’ve created this environment in such a positive way, that it would not behoove them to leave unless they want to relocate because the location was too far away. We have a strong retention rate for employees because we listen and we support them. We try to make it a win-win for both Ageless Remedies and our employees.
HOW TO REACH: Ageless Remedies Franchising Co. LLC, (404) 816-7550 or www.agelessremedies.com
It used to be that employees who decided to leave a company were given a farewell lunch and a hearty handshake on their way out the door. These days are now gone, as the termination decision merely ushers in a new phase in an ongoing relationship.
A good separation agreement sets out both parties’ obligations in a clear, easy to understand manner and is more likely to be upheld in courts, says David E. Gevertz, shareholder with Baker, Donelson, Bear-man, Caldwell & Berkowitz, PC in Atlanta.
Smart Business spoke with Gevertz on what comprises a good separation agreement and why separation agreements are essential in today’s business environment.
Why have separation agreements garnered so much attention of late?
As the cost and consequences of employment litigation have increased over time, employers have increasingly conditioned severance payments on the execution of agreements that release claims for harassment, discrimination, personal leave and the like. Plaintiffs’ attorneys, in turn, have increasingly raised arguments that such releases even when signed and paid for are unconscionable or otherwise defective, such that their clients can keep the monies provided and still sue their former employers. At the same time, governmental agencies, such as the Equal Employment Opportunity Commission, have aggressively argued that employers cannot use releases to prevent departing employees from bringing complaints to their attention for investigation.
In the absence of clear guidance from the Supreme Court on these issues, the lower courts are split on a number of these issues, creating a confusing and potentially costly patchwork of rulings concerning what claims employees can be asked to waive and under what circumstances.
Why are good separation agreements important for a company to have?
In addition to most employers’ obligations to continue health insurance via COBRA and/or pay unemployment insurance or accrued bonuses to departing employees, businesses must also consider the likelihood that a departing employee may go to work for a competitor or even reapply for employment some time in the future. In this environment, good separation agreements are essential to setting expectations for the relationship going forward much the way an employee handbook does at the beginning of the relationship. Separation agreements provide the ideal forum for the parties to negotiate where the employee may or may not work next, how the employer will handle reference inquiries, and whether and when an employee may reapply to return to work at the company.
What are some of the dos and don’ts that go into a good separation agreement?
First and foremost, a good separation agreement sets out both parties’ obligations in a clear, easy to understand manner. The use of descriptive headings before each paragraph and initial lines at the bottom of each page are important. Where a release of age discrimination claims is being sought, federal law requires that employees be given at least 21 and sometimes 45 days to consider the agreement as well as seven days to revoke their waiver. Further, certain claims, including those for unpaid wages and workers’ compensation claims, are only valid if they’re presented to and signed off by a court or appropriate administrative agency. Agreements that implicitly or explicitly impede an employee from filing a charge with certain state or federal agencies are not only invalid, they may actually provoke a lawsuit by the government. Also, while it’s often desirable to impose confidentiality obligations on employees who receive money or other benefits in order to prevent an air of expectation about such payments, it’s critical to avoid imposing unduly ‘punitive’ sanctions on employees who violate those obligations, lest the entire confidentiality obligation be overturned by a court.
Do courts generally side with those terminated from employment or the companies that terminate them?
While the past few years have definitely seen an uptick in decisions overturning overly broad and/or vague restrictions, courts continue to uphold separation agreements that clearly set out employees’ obligations and steer clear of the increasingly complex minefield of claims that cannot be released and post-employment activity that cannot be restrained. That said, parts of the country have long been perceived as being more ‘employer-friendly’ than others. Georgia courts, for example, are widely perceived to be straightforward in their analysis of releases while simultaneously zealous in their scrutiny of noncompete and nonsolicitation provisions to ensure that they’re fair to departing employees. Consequently, it’s always a good idea to clarify which state’s law governs the agreement as well as to include a severability clause to prevent a court from striking large parts or all of the agreement in the event one provision is found to be noncompliant.
DAVID E. GEVERTZ is a shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC in Atlanta. Reach him at (678) 406-8716 or firstname.lastname@example.org.
When Timothy Hall, founder, president and CEO of Digital Blue Inc., was getting his fledgling company off the ground in 2002, he didn’t think he could spare five minutes to breathe, let alone enough time to develop a five-year strategic plan.
But he made the time, and it was time well spent. Hall’s start-up which partners with brands including Disney and American Idol to target the tween and teen audience with products such as cameras, microscopes and binoculars has grown into a $20 million company. And although its products and marketing strategies have changed since Hall created the plan, having it helped him deal with basic growth issues, such as capital, infrastructure and resources.
Smart Business spoke with Hall about how he’s grown his company by learning to suppress that impulse to tell everyone else what to do.
Q: What are some pitfalls CEOs should avoid?
When you hire new managers, there’s a tendency to tell them what to do. Don’t take your managers and tell them what to do. Ask them to recommend what they should do. Challenge and understand their recommendation and either support it or redirect them.
That’s pretty hard for CEOs to do. A lot of us are type-A personalities, who are used to ordering people and telling them what to do. We know it, we can do it faster ourselves, but we could certainly get the job done faster if we just tell someone what to do and they go execute what we asked. If that happens, you still can’t grow a company beyond a certain limit.
But if you start challenging them and mentoring the way you’re always looking at the subordinate for a recommendation, either the subordinate gets really good at that and becomes able to mirror the type of behavior you would do yourself, or they leave and you get somebody better.
Q: How do you make sure you’re hiring the best employees?
A major pitfall is when people don’t really dig in on the recruiting and really spend a lot of time in an organized process recruiting new people. When you’re busy in start-up mode or early growth mode, you’ll hire somebody who fits the bill and put up with that.
That’s a pitfall to be avoided because the people you put on the bus are the most important thing in the company more important than the product.
We won’t hire a senior person unless we’ve interviewed them three times in different settings. We spend a lot of time with their reference checks and really dig into what they’ve done in the past that suggests they can succeed at a job here. We want to make sure they’ve done this job somewhere else and can hit the ground running.
Avoid the pitfall of recruiting too quickly and grabbing the first candidate who does well in a one-interview setting.
Q: What is the biggest business challenge you’ve faced?
The big change from being an executive at a public company to being in a start-up, then going from a start-up to a rapid-growth company was a second set of challenges.
I had to relearn how to do my job when I went from being a line executive with a couple hundred people beneath me to being a line executive with just a golden retriever at my feet. I had to relearn how to spend money wisely and watch the cash.
Entrepreneurs who start as entrepreneurs do this better than guys like me who come from public companies to do a start-up.
Then when we go from start-up to growth to a rapid-growth company, you have to relearn how to professionally run a company. When I left the public company, I said, ‘I’m so glad to go to a company where everything’s efficient, and we never have to have meetings, and everything is decided on the fly.’
That works really well up until your first $20 million in revenue, but then you have to go back to structure. You have to go back to having meetings. You’ve got to have human resources and vacation schedules and all sorts of things you associate with traditional companies.
Q: How do you deal with those changes?
My team had to talk me into having regularly scheduled meetings again. I always though that was anathema. In a public company, you’d have these ridiculous staff meetings that nothing got accomplished in. In a small company, we’d accomplish 10 times more in the hallway.
But, once you start having two-, three-dozen people, that doesn’t work anymore. Communication doesn’t flow from hallway meetings, so you have to have meetings that have agendas and carefully constructed reasons for being there and minutes to distribute.
As long as you keep those efficient, you can stay lean and mean and move quickly. You don’t have to get bogged down just because you have meetings.
The challenge to the CEO is to adapt to that world and run the company in a professional way.
HOW TO REACH: Digital Blue Inc., (888) 800-0502 or www.digiblue.com
Mark Tuchmann measures success by the happiness of his customers, his team and their spouses. As founder and CEO of BeavEx Inc., a $110 million courier service operating in 30 states and Washington, D.C., Tuchmann knows that success depends on his team getting everything perfect every time, and because customers rely on his team getting things to them quickly and safely, Tuchmann ensures that happens by hiring the best people and keeping them around. Smart Business spoke with Tuchmann about how to be a shepherd.
Be a shepherd. It’s all about the people. If you treat people with respect and let them build themselves and everything out, you get a lot more out of them instead of coming down with the hard stick and whacking them to get them to do things.
One person said to me, ‘You can be a shepherd or a sheepherder.’ The shepherd holds out his stick and people follow. The sheepherder goes and whacks them and pushes them along.
I’ve always tried to be the leader and have people look at me and really want to do it, not that they have to do it. They see the energy that I try to portray or do, and it’s really easy for them to get on board to that.
Trust people. You can’t do it all yourself. Most entrepreneurs start their own business, and they strangle it and never give it a chance to grow because they feel like they can’t trust anyone else. Let go. Trust.
You definitely have to surround yourself with some really good people that have that same vision, but it’s hard. I don’t think I have enough hands to count how many times I’ve been burned, but the opposite of that is our company has grown from $100,000 in sales in 1989, and we’ll probably do $135 [million] or $140 million in sales this year, so obviously, there’s a lot more positives that came out of that than negatives.
You have to trust your people and give them the authority and the leeway, and before that, you have to find the right people. And you’ll never know that until they’re either producing or they’re not.
Hire good people. It really comes down to intuition. I’m looking for someone who can multitask, and they don’t take themselves too seriously. They have a good sense of humor, and you can tell that they have a good common sense.
You look at the degrees and at all the other things they may look at in HR, and I kind of discount that. I would take a guy who went to a community college who has common sense, a good heart and a fun-loving attitude over a Dartmouth or Yale grad.
We give them a personality test, and it’s uncanny how many times that it’s right on. Tools like that really steer us in the right direction.
It’s really just, how’s that person going to operate in the real environment? My gut can, maybe seven out of 10, get it right. I don’t think anyone out there can get 10 out of 10, but it’s like a batting average if you can hit .300, you’re doing good, and that’s only hitting three out of 10.
Retain employees with positive reinforcement. People need to feel good about themselves and their place in the company. If they feel like they’re part of it and the growth and success of the company, that’s more important than money. That’s probably the No. 1 thing.
They need to look at the senior management and align with that whole process. If they don’t respect and think that the senior people are doing things right, then they’re more apt to get disgruntled, and then you have a bad situation on your hands. It all flows from the top down. The top has got to mirror the bottom, and that’s not always the case.
Give them the opportunity to succeed. It’s really hard, as the company grows, to keep everybody happy about where they’re going in the company and what they’re doing. They need the positive reinforcement, and in that fast-paced environment, managers aren’t given that. When they’re not given that, then people don’t think they’re appreciated, and when people don’t feel appreciated, then all the rest of the things start happening.
Just keep bringing it to the front of their mind this is important that you’re on time, you did this, you did that, but don’t forget the people that made that all happen.
Don’t be afraid to fire people. If someone hasn’t worked out, you owe it to them and to yourself to cut the cord. That’s the hard part, so if I have to fire somebody it’s really bad.
I usually give everybody the benefit of the doubt, and if they’re not making it in that position, I’m looking for something else for them to do. The last resort is letting somebody go.
Sometimes I use the analogy of a boyfriend and a girlfriend you know it’s not going to work, but you feel bad, and you don’t want to hurt someone’s feelings, and sometimes you drag it on too long. Every situation has a different time length. You really have to look at it, and look at that person’s abilities, what they can do, their personality and all the rest.
It’s like the three-strike rule, where you can coach and teach them, but if they’re at two strikes and they haven’t got it, they’re probably not going to get it. Give people the two chances, and if they can’t get it, then you want to cut the cord.
That’s a lot easier said than done. You try to rationalize it, and you look at it and go, ‘Well, we were going through this and this, and this person wouldn’t have done this if they knew enough,’ and you go around and around about that. People have to make decisions and act right then. It’s hard because people like to think about things and they want to analyze it. In our business, that analysis equals paralysis. You’ve got to look at the situation and make a decision. Good, bad, indifferent make the decision.
HOW TO REACH: BeavEx Inc., (800) 403-7738 or www.beavex.com
For most people, dealing with their own taxes is as much fun as going to the doctor for an annual checkup. Similarly, the only time taxpayers truly get involved is once a year in early April as the filing deadline looms. Unfortunately, by that time, there is very little they can do to reduce their taxes for the prior year.
Planning ahead often leads to the discovery of otherwise overlooked opportunities that may be used to improve your financial well-being. By considering specific tax-saving strategies now, you may be able to reduce your tax bill before it is too late.
While tax planning must be customized to an individual’s particular circumstances, there are several tactics that everyone should consider as the year’s end approaches.
Smart Business learned from Brent Saunier, CPA, tax manager with Tauber & Balser, P.C., some fundamental tax-planning techniques.
What are some of the tax-planning fundamentals an individual should know?
Your tax bracket: A good way to begin your planning is by estimating your 2007 and 2008 adjusted gross income (AGI). This simple step is essential because many tax breaks are tied to or limited by your AGI. Knowing your tax bracket allows you to better predict the effects of certain tax-planning strategies.
Defer income: In potentially high-income years, consider deferring some income. If your employer will agree to defer payments into 2008, those salary and bonus amounts would not be taxed to you until 2008. If you expect to be in a higher income tax bracket next year, you may be better off accelerating income into the current year.
Installment sales: An installment sale allows you to defer capital gains on most assets. You can defer your overall tax burden by spreading the gain over several years as you receive the proceeds.
Timing capital gains and losses: Consider deferring the sale of appreciated stock until January to postpone gain recognition. Likewise, sell depreciated stocks before the end of the year to offset other gains you may have incurred.
Bunching miscellaneous deductions:
Consider bunching miscellaneous deductions investment expenses, job hunting expenses, tax preparation and unreimbursed business expenses into a single year to increase the amount that exceeds the 2 percent AGI limitation.
Accelerate deductions: A simple example of accelerating deductions is your state tax deduction. Your state income tax payments are an itemized deduction against your federal taxable income. If you make an estimated state tax payment before Dec. 31, you can deduct it this year rather than next year. The same approach could be taken in regards to paying your real estate taxes prior to the year’s end. Be sure to consider the alternative minimum tax (AMT) before accelerating these deductions.
Retirement contributions: Consider contributing the maximum amount to retirement arrangements whether employer-sponsored or an IRA. The contribution limit for traditional and Roth IRAs increases to $5,000 for 2008. A ‘catch-up’ provision permits an additional contribution of up to $1,000 by individuals who are at least age 50.
What are some of the tax-planning techniques for businesses?
Consider business structure: The differences in tax treatments of different entity structures may provide planning opportunities. For example, to reduce the 2.9 percent Medicare tax, S corporation shareholder-employees may want to maintain reasonable salaries and increase the distributions of company income.
Depreciation deductions: In lieu of depreciation, business taxpayers can expense up to $125,000 of the cost of equipment or other tangible personal property placed in service during the year. Claiming an all-at-once deduction may be preferable to depreciating the asset(s) over time. The maximum amount will increase slightly to $128,000 in 2008.
Maximize tax credits: Tax credits reduce your business’s tax liability dollar-for-dollar. Several tax credits that had expired at the end of 2005 have been extended through 2007, including the empowerment zone and the research and development credits. Don’t forget to examine the state credits allowed in your jurisdiction.
Accounts receivable: If your tax return is prepared on the accrual method of accounting, you are paying tax on sales when they are transacted, not when the cash is actually collected. Analyze your accounts receivable to determine if there are accounts that are uncollectible. The write-off of uncollectible accounts will prevent you from paying tax on ‘phantom’ income.
Cost segregation: Commercial property is generally depreciable over a 39-year period using the ‘straight line’ method. However, certain components of a building may qualify for significantly shorter depreciation periods and an accelerated method of depreciation. Keep this in mind if you are buying, building or renovating a property.
These are only a few of the many techniques and considerations taxpayers should contemplate when doing year-end tax planning. There are many other strategies and techniques that may be employed to lower your taxes. Year-end planning must be done prior to Dec. 31. Once the year ends, you can only plan for the next year.
BRENT SAUNIER, CPA, is a tax manager at Tauber & Balser, P.C. with more than 10 years of experience in accounting operations and financial management. He has worked extensively in industries such as distribution, heath care, manufacturing, professional services, retail service and trucking. Reach him at (404) 814-4960 or email@example.com.
You invest in the proper insurance protection for your business assets and liabilities. But have you considered your potential risk from the work completed by subcontractors and vendors? If these parties don’t have insurance, you could end up paying dearly for their mistakes.
“It is important that business owners know that the people doing work for them or providing products and services have insurance,” says Bob Wood, manager of the Underwriting Practices Group at Westfield Insurance. “If an uninsured contractor causes injuries or damages during a project, the owner might have liability for the contractor’s actions. This responsibility comes from the fact that the work was done for the benefit of and on behalf of the owner.”
You clearly want to reduce the risk of having your insurance company pay for the actions of other businesses that work with you. Spending a little time investigating contractors’ insurance status before you sign a deal can save you from spending a great deal of time and money after an incident.
Smart Business spoke with Wood about certificates of insurance and their role in business owner risk management practices.
What are certificates of insurance?
Certificates of insurance are documents that insured businesses can obtain to give evidence that they have insurance coverage. These certificates include information about the effective dates of the policy, the limits of liability, the insurance company providing the coverage and the certificate holder, or the entity requesting the certificate. These certificates are different than the policies that insured businesses have as a guarantee of their coverage. Businesses don’t use certificates to negotiate benefits with their insurance provider; instead they have them as a way to show other parties, like hiring companies, that they have the appropriate coverage. If the certificate of insurance and the actual policy contain different provisions, the insurance coverage will follow the specifications outlined in the actual policy.
What are potential consequences when business owners don’t collect the certificates?
As noted before, if an accident occurs and the subcontractors or vendors do not have insurance, the business owner could end up incurring the liability. This would mean additional expense for the company and potential increase in its premiums. This situation can be avoided if businesses require that the people working for them prove that they have insurance coverage.
Even if entities working for a company do have insurance coverage, not collecting certificates of insurance could still cost a business owner. When hiring companies choose not to keep records of these certificates, they are not following good risk management practices. When their insurance company audits their policy, it might charge additional premiums for the increased potential loss exposure incurred by not verifying proof of insurance. Not having a certificate of insurance doesn’t invalidate any insurance that contractors or subcontractors might carry, but it does show that business owners are exposing themselves to preventable additional risk.
How can companies obtain certificates of insurance?
Business owners can easily obtain certificates of insurance by requesting them from the subcontractors or vendors that want to work with them. These entities can, in turn, access the documentation from the insurance carrier that provides their coverage. Hiring companies should insist that they receive the certificates promptly so they can review them prior to authorizing the contractor or subcontractor to start work. Once businesses have allowed third parties to start work on a project, the contractors have less of an incentive to follow through with the documentation. Also, if uninsured businesses even begin work on a project, business owners have opened themselves up to unnecessary liability. Business owners need to use reasonable care in reviewing the certificates, but generally, they don’t need to validate the certificates of insurance.
What else should owners know?
If a contractor will perform a significant amount of work for an owner, the hiring firm should secure additional protection. Business owners should discuss contractor, subcontractor and vendor insurance requirements with their attorney prior to signing substantial contracts. The attorney can provide advice regarding limits of insurance and other terms and conditions.
One of the common recommendations for owners entering large deals with contractors is that owners should ask to be added as an additional insured on the contractor’s policy. This goes one step beyond the risk reduction provided by simply collecting a certificate of insurance. This distinction assures that the policy of the party most in control of the losses applies first. This protects hiring parties by preserving their own insurance limits and reducing their risk of loss. The certificate of insurance should outline the owner’s additional insured status.
BOB WOOD is manager of the Underwriting Practices Group at Westfield Insurance. Reach him at firstname.lastname@example.org or (330) 887-6883. In business for more than 158 years, Westfield Insurance provides commercial and personal insurance services to customers in 17 states. For more information, visit www.westfieldinsurance.com.
When Tom Crawford took over as president and CEO of Crawford & Co. in 2004, he was the fourth CEO in six years.
“That in itself is very destructive to the stability and the communications and visions of a company,” Crawford says. “You cannot change leadership at the top that many times in that short period of time and expect a company to move forward.”
Crawford & Co., which provides claims management solutions to insurance companies and self-insured entities, had previously excelled at investing in people but that focus had dissipated, and its training institute had been disbanded. Without the proper training, quality levels had slipped, so where it once was a quality leader, it now lagged behind.
Seeing the state of the company, Crawford could read the thoughts rolling through every employee’s mind.
“Realizing there had been such a turnover at the top of the organization, no matter what my background had been or successes had been, I’ve got a group of people looking at me wondering, ‘Well, how long is this person going to be here, and why should we pay attention to him?’” says Crawford, who is not related to the Crawford & Co. founding family.
He realized if he wanted to get the company moving forward again, he needed to refocus on its people, but he couldn’t just make changes and expect the employees to blindly follow him. So he committed to improving one of the most basic business fundamentals out there communication.
“The value of communication as you make change is far more important than any one thing you’re doing,” Crawford says. “Certainly, visions and objectives are important, but for them to be effective, you have to communicate them, and you have to explain them, and you have to get, to the best degree you can, buy-in. It’s that important, and I think it’s fundamental for a successful CEO.”
Crawford says it’s fundamental because management and employees can’t work together if they don’t know what the other is thinking.
“Over a period of time, I think you will fail,” Crawford says. “In today’s world, where there is a distance that has been built over the years, I think on average in businesses in our country, there is a disconnect between leadership and the associate. The companies that have (communication) are winning. The companies that don’t have it may win for a short period of time, but I do not think that sustainability of bringing your vision and your objectives to life in a company will ever materialize long term.”
Crawford began his career as a clerk in a hardware store. It was there that he first observed that people in the lower ranks were a lot smarter than management gave them credit for.
“They have vast amounts of knowledge of what’s wrong, and when things are wrong, they have a good knowledge of what it is,” he says. “They touch our clients and customers every day. Leadership does not.”
Crawford wanted to tap into that knowledge base so he instituted Friday morning breakfasts every other week with 10 associates from the field who weren’t managers. He flew them into headquarters and met with them to ask if the company was doing what it said, what they saw changing, how they thought communication was and other topics.
Following the breakfasts, the employees would have their picture taken and be sent back to their respective locations with an additional title ambassador of the company.
“What the people say carries incredible weight of how this company or any other company is viewed on the street,” Crawford says. “My voice gets to a few, but their voices get to hundreds of thousands of people, so the more they believe in their company, the better off we are.”
He also conducted town-hall meetings every quarter and gave employees the opportunity to ask about 10 to 12 questions from the floor at each one. Those questions aren’t pre-screened they come just as people think them up at the meeting.
“That builds credibility over a period of time because there are some really tough questions that come out when you open it up to the floor,” Crawford says.
He also visited offices, and whenever he did, he’d have a short meeting with all the employees to give them yet more chances to ask questions.
“That pays great dividends in strengthening our communications and letting people get things off their chest that they drive home wondering about,” Crawford says. “They get the CEO standing in front of them, and all I ever ask is, ‘Ask the question in a professional manner, and you’re going to get a professional answer.’ If I don’t have the answer, we’ll get it for you as long as it’s something I can communicate within the SEC [Securities and Exchange Commission] bounds.”
Additionally, he started monthly management control meetings with all of his direct reports. It’s an 8 a.m. to 5 p.m. meeting, and each report gets 45 minutes to update him. Each person can bring a guest too, so this allows employees to see the inner workings of management. At the conclusion of these meetings, the managers take that information back to their people and communicate it down the ranks.
The breakfasts with his employees then let him know just how effective these communication efforts are.
“It’s interesting when you call 10 people into the room every other Friday that are below the management level, and if you listen, you’re going to know if that message is getting out in the field,” Crawford says.
Lastly, he started holding managers accountable for their communication with employees via performance evaluations. When he started, between 600 and 700 employee performance reviews were late, and now that number is just 16. If employees don’t know where they stand, they can’t improve and move to the next level, so the business can’t move to the next level.
“Those things are just fundamentals in my eyes, but when you walk into a company where they don’t have things like that, it becomes not just a business fundamental, it becomes crucial to turning something around,” Crawford says.
Surveying the staff
Throughout his career, Crawford has seen how helpful employee surveys can be to gauging the company’s progress and promoting open communication.
“You’ve got to establish benchmarks when you get into a company, and that’s one of the biggest benchmarks I’ve been working from is our own employees’ evaluation,” he says.
He instituted a 25-question survey where employees ranked each question on a scale of one to five. The back was blank for them to write any comments or concerns on, as well.
“There are two things people say on a survey,” Crawford says. “They say, ‘If I say what I really think, they’ll get me,’ or No. 2, ‘We’ll say what we think, but they won’t do anything about it.’
“Those are the two things that you have to convince people of that it’s anonymous and you never allow it to be anything other than that. If you do, it’s worthless to do. It’s death to your program.”
To prove these things to people, he took their responses and went back to them as a group.
“You must respond with their results, as they state them, and what you’re doing about them,” Crawford says. “If you don’t do those things, don’t do the survey.”
It’s also important to share not just the areas that scored well, but also those that aren’t doing well. Honesty will help people buy in to what you’re trying to do, and continuously tracking and showing people the feedback helps others understand the state of the company.
“We measure everything in graphical form,” Crawford says. “I’m convinced, as a person that’s come up through the ranks, that when they showed me graphs, if the line was going up or down, I knew we had a problem. I think people can identify with measurements when you paint that picture of the key measurements of the company.”
Since that first survey, the company has done three more, and Crawford is listening to what people say. When people said that one personal day wasn’t enough, they increased it to two, and now employees have three.
“You don’t change it all at one time, but it’s touchable,” Crawford says.
While some things are implemented and transitioned to gradually, surveys also help reveal more serious problems that require more immediate action. When several people from one department wrote in that their supervisor had treated them dis-respectfully, Crawford and his team looked into it. They found that this person had indeed been mistreating the employees, so he removed the person from the job.
“That’s dramatic,” Crawford says. “That doesn’t happen often, but you have to react if someone takes the time. If you have a 50-person unit and 30 of them write comments very negative about who’s leading them, then you have got a problem.
“It also lets the management know that we’re very serious about doing what we say don’t be out there operating in the culture you established, which is outside the culture that we have.”
While the thought of figuring out a survey system may seem overwhelming, Crawford says it’s quite easy to do, but instead of talking about it, you have to just plunge forward and do it.
“Put it in place,” he says. “There are a lot of companies you can hire that will do the survey for you electronically. It’s not hard to do it, but be serious about it. Don’t say it, and then not give them the feedback.”
Only half of Crawford’s employees responded to the first survey, and one question that asked if they would recommend someone else to work at the company scored below a three. Now 82 percent of employees complete the survey and every score has improved. That same question now scores above a four, on average.
These survey results tell Crawford that he’s on the right track, but he cautions that it’s also important that once you choose what to measure, that you stick to it and not change those measurements or how you define the measurements, otherwise you’ll not be able to accurately gauge how the company is performing.
While the surveys have revealed that communication and employee satisfaction are up, the numbers also say Crawford & Co. is moving in the right direction. Since 2004, total revenue has increased nearly 11 percent to $900.4 million last year.
As Crawford & Co. continues to rebuild its employee initiatives, Crawford will continue striving to bridge the communication gap between employees and managers, and in doing so, he knows the business as a whole will improve.
“I do what I think has to be done, and I thought clearly the culture of communications and building connectivity between associates and the leadership was vitally important to this company,” Crawford says. “That’s a judgment you make as a leader. We started acting upon it, and we were right. You have to know when you’re doing a right thing. When you believe you are doing the right thing, you have to go for it. Communication to every level of the company is the right thing to do.”
HOW TO REACH: Crawford & Co., (800) 241-2541 or www.crawfordandcompany.com
Technology makes call centers tick. It is natural for a business owner on the North Coast to wonder whether his or her call center vendor has the right technological tools in its toolbox.
Michael White says that having the right tools for the job is an ever-evolving process. “We typically find, or create, four to five new tools every year to keep our call centers agile and able to respond to the challenges of today’s marketplace.”
White and his team are responsible for all of InfoCision’s internal IT infrastructure and call center technology.
Smart Business asked him what technology tools he employs to keep his call centers competitive.
What tools does a call center need to be successful?
These days the most successful call centers take advantage of every opportunity to keep their work force productive. Part of keeping a work force productive is being able to give them different types of work depending on the demand. A true inbound/outbound blending solution gives call centers the ability to present their workers with inbound calls when the volume of incoming callers is high and seam-lessly transition them to placing outbound calls or doing other work when the incoming call traffic is light.
One of the most significant aspects of blending is the ability to receive consolidated reporting to help manage the time spent in each activity and to be able to make informed staffing decisions. The most successful call centers can achieve 45 to 50 minutes of productive time out of every hour.
What other tools might call centers use?
The best way to ensure effective communication is one on one, but oftentimes, there is a need to provide information messaging or to allow customers the opportunity for self-service. E-mail, fax and Interactive Voice Response (IVR) technologies all offer effective means of communicating with your customers. IVR technology is a perfect cost-effective solution for giving customers an informational message when they contact your call centers by phone. You can optionally invite them to speak to a live person if their needs are not met in the IVR message. IVR applications can also be much more sophisticated — to the point where they take an entire order and even offer context sensitive promotional offers depending on what products have been selected.
Can you give an example of where an IVR application has been successfully blended with a live operator solution?
Several of our TV ministry clients offer free products during their broadcasts, which can generate thousands of calls in a matter of minutes. To accommodate the influx of calls, we will often employ an IVR application to handle the free product offer. We present the caller with an initial menu of choices. For example: Press 1 for the free product offer that you just heard about; Press 2 for customer service; Press 3 for prayer requests.
Those who are interested in the free product are directed through the IVR application and asked a series of questions, using their touch-tone phone for the response. The first prompt is typically, ‘Please enter your home telephone number.’ With the home telephone number, we are able to reach out to a national database and look for the address that is associated with that phone number. If there is a match, we use text-to-speech technology to speak the address we’ve found, and we ask the caller to confirm whether or not that is the correct address.
The next prompt asks callers to speak and spell their first and last name, which we will either record or use speech recognition to input into a database, along with the rest of the caller’s order. Any time during this process we give the caller the ability to opt out and speak to a live operator. Also, the initial menu options would allow the caller to be sent directly to a person.
We’ve found the use of IVR to be a cost-effective solution for our clients and can help our call centers manage the high call volume situations that may not require one-on-one interaction.
Which tools have helped you to better manage your call centers?
Work force management tools can help to develop staffing models based on the historical trends of incoming calls. These tools work in conjunction with an automated call distributor (ACD) to look at the number of employees who need to be on a given shift, based on the number of calls that are expected that day or a specific hour of the day.
Scripting tools can significantly reduce training time and provide a consistent presentation that the operator can follow, as well as offer answers to FAQs (frequently asked questions) and context-sensitive product information.
Operator performance and productivity reporting tools are essential to successfully manage any call center effectively. Call center managers must constantly manage the need to keep their work force busy, along with the return on investment and performance goals of their clients, to ensure there is a win-win situation for everyone involved.
MICHAEL WHITE is senior vice president of information technology infrastructure and call center technology at InfoCision Management Corp., Akron. Reach him at (330) 668-1400 or email@example.com. In business for 25 years, InfoCision Management Corporation is the second largest privately held teleservices company and a leading provider of customer care services, commercial sales and marketing for a variety of Fortune 500 companies and smaller businesses. InfoCision is also a leader of inbound and outbound marketing for nonprofit, religious and political organizations. InfoCision operates 31 call centers at 12 locations throughout Ohio, Pennsylvania and West Virginia. For more information, visit www.infocision.com.
When recruiters hit the college circuit in search of America’s most talented graduates, applicants with previous and targeted business experience certainly stand out on their radar.
Enter the development of student managed investment funds, or SMIFs, to help future job seekers better connect business theory with real world practice.
Through SMIFs, “students have the opportunity to apply the theoretical paradigms acquired through their business curricula to the merciless reality of financial markets,” says Dr. Stefano Mazzotta, assistant professor of finance, Kennesaw State University, and faculty mentor for the SMIF. “The skills they develop working for the SMIF will contribute to defining the future leaders of society and are particularly attractive to potential employers.”
Smart Business recently spoke with Mazzotta about how participation in the SMIF is allowing students to more quickly integrate their skills and education with the needs of today’s companies.
How are schools adapting to more closely match real-world demands?
I think from the companies’ perspectives, training is a huge issue. Firms want people that can function in a relatively short amount of time in whatever role they have to take. So, schools need to provide not only a solid education based on life-long, lasting core skills, but also a preparation so that students entering the job market will need relatively shorter training. This is challenging for schools. Real world activities like student managed investment funds are helping to bridge this gap.
What are SMIFs?
Student managed investment funds are a broad type of initiative that provides individuals with experience that they can promptly use and the ability to deal with difficult and technical material. At the same time, these programs promote learning from the humanistic level, including interacting with and leading other people.
The students here at Kennesaw are building the fund as a start-up venture an actual LLC with real money to be invested, and the need for management. The Henssler Financial Group donated the seed capital, and we look forward to expanding the network of donors and investors. That’s the beauty of this kind of project: The largest part of the work for the students is to manage themselves and see how their efforts directly determine the growth of the fund.
How will the fund operate?
It will operate like any other investment fund, but students will research companies and industries, write reports and then manage and invest the money. To purchase or sell a stock, students will make a sales pitch to their student body, which will vote for the purchase or sale of a security, at a certain price, in a certain timeline. As the adviser, I will review their motivation and, if it’s sensible and they have done diligent research, I will endorse the transaction. At that point, the investment advisory board, comprised of faculty and members of the business community, will have the opportunity to review the proposed transaction. If no objection is raised, then the trade is executed. However, the investment advisory board and I have an oversight function. We’re more like a safety net. The students should be free to make their own mistakes and take credit for the good things they do. However, we think it would be unfair to let them do this without the opportunity to hear the opinions of more experienced people.
What kind of training do the students receive?
The experience is designed to provide the maximum benefit to students who stay in the fund for the last two years of college. Some groups of students are trained in a more quantitative fashion and look at different companies’ market data using state-of-the-art econometrics software and financial economics models to design allocation strategies with an ex-ante superior probability of beating the S&P 500 benchmark. Some other groups look at investment prospects more from a fundamental angle, examining accounting data, strategy, industry and management, and develop a more traditional stock selection craftsman-ship. This dual approach and the interaction among groups help to broaden their perspective.
How are students selected to participate?
It’s more natural for business students to apply for these types of programs, but we are expanding our horizons with respect to any other student in the university with a strong interest. What makes somebody a successful investor sometimes is not only the knowledge of investing, but also some field-specific knowledge. The student managers also recruit their fellow students to provide new resources for when others graduate. They have to share their learning and coach the next core group of students.
How is the business community responding to the SMIF?
The SMIF experience makes these students a little bit special, and they get more interest from employers. Even though we are a nascent group, we have already had very good responses from employers: Firms such as Morgan Stanley and ING have hired our undergraduates, and one of our graduate students is working in New York as a hedge fund auditor at Rothstein Kass, a well-known accounting firm. We are always seeking new collaboration with businesses that might want to become involved with the SMIF at different levels.
STEFANO MAZZOTTA, Ph.D., is an assistant professor of finance in the Department of Economics, Finance and Quantitative Analysis at Kennesaw State University. Reach him at (770) 423-6341 or firstname.lastname@example.org.
Education: University of South Carolina, bachelor of arts degree in advertising with a minor in marketing
What has been your greatest business challenge?
The largest challenge I had was selling Dun and Bradstreet software. I closed on a brand-new, big house I had built in Atlanta in November, and I was told in December they were going to publicly auction the software business. It started Jan. 2, and we didn’t sell the company until November of that year.
I had a role of selling the company, and I had a role of keeping the employees as well-informed as we could, most of which I couldn’t tell them. At the same time, we were trying to drive the business forward, and nobody knew who was going to buy us, so customers were hesitant to invest in our products.
We tried to inject a lot of humor. We had a studio in our offices, so every Thursday night I would write a script, and every Friday morning, I would do a taped voice mail message because I could blast it across the world to every employee. We always had people from out of town, so I had them as our roving reporters, and we had sound bites and talked about who got married, who had babies, what customers went live, what new customers we added and poke fun at the executive team, and then use that as a vehicle to communicate as much as I could about what was going on. That was a long, draining process.
What’s the best business lesson you’ve learned?
Everybody will tell you, you are what you hire, and I believe that. There is no substitute, period, for hiring people that are brighter than you are, that have more capabilities than you do, and then turning them loose and letting them have the freedom to perform.
Understand what you don’t know, and then hiring people who do what you don’t do well has had a tendency to keep me out of trouble in my career, so I think it’s the willingness to admit what you don’t know.
What was your first job ever?
I worked in a bank in a training program. It was awful. It was my job right after college. I tell you what, it was awful. I made $8,000 a year, but I was miserable.
What’s your favorite board game and why?
Oh, Monopoly are you kidding me? Monopoly because it’s play money. And I get to compete with my kids and my wife, and I probably lose more than I win, but you get to roll the dice with somebody else’s money that isn’t real, and they can’t fire you if you lose it, so it’s just fun, you know?