Andrew Berlin used straight-up leadership to turn around a struggling packaging company and baseball teamWritten by Mark G Scott
Alco Packaging was a troubled company when Melvin Berlin purchased it in 1988. At the time, he offered his son, Andrew, the chance to be part of the negotiating process and then serve as general counsel and director of marketing at the newly acquired company. Within a year, Andrew became the company’s president.
A second-year associate at a Chicago law firm, Andrew had grown up soaking in every bit of knowledge he could from his father about how to succeed in the working world.
“I didn’t know he was my mentor at the time, I just knew he was my dad, and I looked up to him and respected him greatly,” Berlin says.
“The thought at that time was we would be in this company together and would turn it around, make it a nice company and flip it in a few years,” he says. “But here we sit 25 ½ years later, and I never got around to flipping it.”
When the Berlins bought Alco, sales were at $69 million. Today, the company — now known as Berlin Packaging LLC — is pushing $800 million in sales and has 535 employees.
“I give my father a lot of credit,” says Berlin, who now serves as chairman and CEO. “He had a lot of faith in me, gave me the opportunity and trusted me enough to do what I felt needed to be done to turn the company around and not only make it profitable, but turn it into a juggernaut.”
For many leaders, the success Berlin achieved rebuilding the packaging business would be enough to leave behind an impressive legacy. But it wasn’t enough for Berlin.
In 2011, he bought the South Bend Silver Hawks, the Class A affiliate of the Arizona Diamondbacks.
Based a little more than an hour away in South Bend, Ind., the team was another troubled organization that needed an infusion of strong leadership and passion to get things turned around.
Berlin, who is also a limited partner with the Chicago White Sox, was confident he was just the man for the job.
“What I provide is a lot of money and a lot of tyranny,” says Berlin, the minor league baseball team’s chairman and owner. “And tyranny is with a small ‘t.’ It’s not really tyranny. I just have a lot of great ideas.”
Put your cards on the table
When Berlin got his first taste of leadership at the company that would soon become Berlin Packaging, he had two things working against him.
“I was young and I was a lawyer,” Berlin says. “It was very difficult, but the company was sinking, and we had to make dramatic changes. But I learned how to be a good recruiter. I focused on creating a sense of Camelot where you could finally do and be and behave and accomplish the things and engage in your dreams in a way you never could before.”
The key component of Berlin’s turnaround plan was the psychological contract he made between the company and its employees. It would later become the subject of a case study in the book, “The Human Equation: Building Profits by Putting People First” by Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business.
It lays out a series of promises that the company will make to its employees. In return, there is a list of expectations to which the company will hold employees accountable.
“It’s a deal we make on day one,” Berlin says. “I promise to give you these things and you promise to give me all these things. This is how we’re going to govern and measure our relationship.
“At the end of the day, we didn’t hold any patents where nobody else could sell the product we were selling. It was a very competitive industry. So we had to create a competitive advantage through our people.”
Here are the five things Berlin promised his employees:
- Outstanding compensation — “We’re going to pay you superior compensation, not competitive compensation. I’m talking about significantly more pay for the same job than anyone else.”
- Growth — “We will give you a chance to grow in your position, your compensation, your title and intellectually, we will help you grow as a businessperson.”
- Strong leadership — “This company is going to invest dollars, time and energy in making sure not just that good leaders are in the executive suite, but at every level of the organization.”
- A helping hand — “We’ve had instances where family members passed or someone needed help with money or their home burned down, and we wrote them a check to help them replace their wardrobe overnight without expectation of being paid back.”
- Skill development — “We’re going to invest in training. That won’t get cut because it’s important you be better the next day than you were the day before.”
In return for these promises, Berlin laid out his own expectations for his team.
“I expect you to help us increase our profit,” Berlin says. “You either have to help this company sell more, reduce our operating expenses or improve our productivity. Those are the only three ways to be more profitable.”
As an employee, you are also expected to be productive, be a contributing member of the team-oriented culture, embrace innovation and be 100 percent loyal to the organization.
“Only when there is trust can you criticize each other,” Berlin says. “You can fight with your friends and your family, and it’s alright, as long as you trust each other. If you don’t trust each other, that conflict can get pretty ugly.”
The numbers would support the notion that Berlin’s contract with his employees has been a smashing success, but like anything in life, it hasn’t been perfect, and it has required significant effort.
“In order to pull this off, you need good leaders to believe it, teach it, intellectualize it, communicate it and hold people accountable to it,” Berlin says. “The process and the policies and the leadership around this T-chart took a lot of work to create. What a lot of companies get focused on is the short term.”
Berlin has never forgotten a saying from his father about the fleeting nature of great ideas such as the one he had for a contract between his company and its employees.
“My father once told me that anyone who has ever had a shower has had a good idea,” Berlin says. “Every company has a bucket full of good ideas. The difference isn’t the good ideas; it’s whether or not you’ve found the right person to execute them. Did you train them well? Do you have a retention strategy to keep them there?”
And are you willing to accept that all great ideas don’t need to originate with you?
“Don’t let anybody believe you think you’re the smartest guy in the room,” Berlin says. “You’re not. You just have a unique perspective. The best ideas in our company don’t come from the executive suite. They come from the people who are really doing the job and making things happen.”
Berlin found strong leaders at the packaging company, and he took a similar approach when he bought the Silver Hawks. He hired a strong team president named Joe Hart and let him do his job while keeping the focus on being the best. He figured out who had the best ballpark hot dogs, who played the best music and who had the most lovable mascot, and quickly adopted each item or concept for his own team.
And to gather names and contact information for a customer database, Berlin launched Flat Screen Fridays. At each Friday night home game, the team would giveaway a flat-screen TV every inning. Fans would fill out their contact information on each entry form and in less than two years, Berlin had more than 200,000 names that he could call on to see how he was doing in satisfying his customers.
“It’s doing everything first-class,” Berlin says. “It’s really focusing on that customer thrill, that surprise and delight and being able to measure it, quantify it and change the way you do business to get people to want to do business with you and to promote you, which helps you grow.”
Berlin looks deeply at each touch point in his business. At Berlin Packaging, it’s the conversation with a sales person, the delivery and the response when there is a problem. For the baseball team, it’s what you see when you drive up to the ballpark, what you smell on the concourse and what you hear when you’re sitting in your seat.
It all begins with a healthy relationship between you and your employees.
- Set clear expectations.
- Build trusting relationships.
- Be the best.
The Berlin File:
Name: Andrew T. Berlin
Title: Chairman and CEO, Berlin Packaging LLC; chairman and owner, South Bend Silver Hawks
Born: Highland Park, Ill.
Education: Bachelor’s degree in political science, Syracuse University; law degree, Loyola University Chicago.
Who has had the biggest influence on you? My father. He taught me the measure of a person is not based on a W-2. It’s based on a warm heart and a kind soul. To that end, I begin every relationship with the expectation that until someone gives me a reason not to, I believe in it.
Berlin on working hard without results: If you have an employee who is putting in the effort, usually you can find a way to turn that effort into profit and help them work smarter. Someone can work 10, 12 or 14 hours, but I’m not sure all of that work is smart. What are you doing during your day? Let’s do timesheets together to break into categories over the next couple of weeks what you’re doing, and how you’re doing it. Together, we might discover some activities that aren’t yielding results.
Berlin on creating value: If you’re going to do something, do it first class. I hate value engineering. I like going in and doing everything just so because I think my customer or my fan is going to appreciate that they get a first-class experience at a very fair price. That’s what leads people to say, ‘I’m spending this money on this, but I feel like I’m getting something really great in return.’
Joseph James Slawek - Six areas you need to be cognizant of when planning the future of your businessWritten by Joseph Slawek
Strategic succession is essential in every work group within an organization, not just CEOs. It touches all aspects of the business: family ownership responsibilities, boards, executive teams, management teams, work groups and even new employee on-boarding.
Here are six key areas that make up a complete and successful succession at any level.
The transfer of knowledge, skills and abilities
The first step in succession is to systematically move competency to the next generation of owners, leaders, managers and workers. This is done through targeted education, new work experiences, exposure to positive and negative results, individual coaching and thoughtful mentoring.
Keep in mind that real succession means that we will have to accept occasional — hopefully brief — periods of reduced performance in order to have a greater future gain.
The transfer of income and wealth
A well-planned upfront compensation program lubricates the wheels of succession. Clarity is important not as a carrot on a stick, but as a marker on the succession track.
The question, “What is in it for me?” is a legitimate and honest one. Planning the compensation transfer in advance keeps engagement high and avoids the distraction of ambiguous promises. With respect to ownership, it includes the well-planned generational transfer of wealth.
The transfer of authority, control and accountability
In the case of a newly appointed department manager, the transfer of the departmental budgeting and expense process must be complete. In the case of the newly appointed CEO, the transfer of the strategic planning process including authority, control and accountability must be complete.
The transfer of these three dimensions truly ensures that the ownership for the work is also fully transferred.
The transfer of roles and responsibilities
Oftentimes, roles and responsibilities are cultural. For example, who opens the meeting? Who sets the agenda? Who speaks first or last? These cultural markers are very important tools that stabilize the culture.
You want the company to improve, change, grow and prosper. At the same time, you want a very strong and steady culture that remains healthy and integrated. Roles, especially cultural roles, become traditions and offer people stability despite the changes that succession brings.
The transfer of people, things and money
We are entrusted with the duty to care for three important “others.” Author Dennis Peacocke says, “We grow by caring for other people, things and money.” I have found that this caring for other people, other people’s things and other people’s money is what best builds our character and is an important action to transfer to the next generation of owners, leaders, managers and workers.
The transfer of risk management and risk elimination
Succession isn’t complete until the risk management and elimination — of both seen and unseen risks — has been transferred to the next generation. Either the successor becomes the risk manager and eliminator, or the succession has not been completed.
Joseph James Slawek is the founder, chairman and CEO of FONA International, a full-service flavor company serving some of the largest food, beverage, nutraceutical and pharmaceutical companies in the world. For more information, visit www.fona.com or call (630) 578-8600.
Ohio is now viewed as one of the leading states in the asset protection arena, thanks to the passage of the Ohio Legacy Trust Act, says Marcia Kendle, Senior Vice President and Chief Fiduciary Officer at FirstMerit Bank.
The law, which went into effect March 27, 2013, as part of Ohio House Bill 479, allows for the creation of self-settled irrevocable trusts – also known as domestic asset protection trusts (DAPTs). These trusts permit the transferor of assets to also be the beneficiary of the trust. An Ohio DAPT provides a high level of protection from creditors dependent upon certain factors, says Kendle.
“A qualified Ohio DAPT is different from a standard irrevocable trust in that it serves as a means to protect assets -- with a few statutory exceptions -- from creditors,” she says. “The Ohio Legacy Trust Act puts Ohio at the forefront.”
Trusts of this kind, which provide an alternative to potentially riskier offshore trusts, are gaining in popularity. With trillions of dollars ready to pass from one generation to the next in the coming years, DAPTs are becoming an increasingly attractive option. As legislatures nationwide consider similar asset protection measures, Ohio joined 13 other states -- most notably Alaska, Delaware and Nevada -- that permit domestic asset protection trusts.
If you’re thinking about creating an Ohio DAPT, here are some things to consider"
Who can benefit from an Ohio DAPT?
Due to the complexities of the act, you should discuss your individual circumstances and goals with an experienced trust attorney, financial planner and/or wealth management professional to determine if an Ohio DAPT, or perhaps another asset protection planning strategy, is in your best interest. The act generally presents considerable benefits to those wanting to protect their wealth, as well as individuals in professions with high exposure to litigation (e.g., business owners, accountants, attorneys, medical professionals, executives, etc.). For individuals considering a prenuptial agreement, an Ohio DAPT is viewed as a viable option for an individual yet to be married.
What are the requirements and restrictions associated with creating an Ohio DAPT?
An Ohio DAPT must, amongst other items, be written and irrevocable, have spendthrift provisions, state that Ohio law applies and appoint at least one qualified trustee, who is either an Ohio resident, a bank, or a trust company, such as FirstMerit Bank, authorized to operate in Ohio. The statute also mandates that the transferor of an Ohio DAPT cannot serve as trustee of the trust.
Residents of any state may create an Ohio DAPT, providing that some of the trust assets are held in Ohio and that other regulations of the Ohio Legacy Trust Act are fulfilled.
What rights and powers can the creator of an Ohio DAPT retain?
The transferor retains the right to receive income from the trust, receive and use assets (within the trustee’s discretion) in the trust, remove a trustee and appoint a new trustee, appoint a protector of the trust, be the investment advisor to the trust, retain the power to change the beneficiaries of the trust (per restrictions detailed in the statute), provide for the use of trust income or assets to pay income taxes generated by the trust, pay debts after death and veto distributions from the trust.
How does the creator of the trust obtain full protection that might be available under the Ohio Legacy Trust Act?
When transferring assets to an Ohio DAPT, the transferor is required to execute an affidavit, consistent with the timing of the transfer of assets stating, among other things, that he or she is not insolvent and is not considering filing for bankruptcy. There are additional steps that should be taken as detailed in the Act and as unique circumstances of a creator may dictate.
Are all debts and payments protected under the Ohio Legacy Trust Act?
No. Exemptions include child support, spousal support or alimony (unless an Ohio DAPT was validly set up prior to marriage), as well as IRS obligations. These exceptions are consistent with DAPTs in most other states, although other states may include additional and more far-reaching exemptions in their DAPT statutes.
What about claims from creditors?
The current untested consensus is that the provisions of the Ohio Legacy Trust Act make it difficult for creditors to challenge an Ohio DAPT and prevail. For example, according to the Act, a creditor has the burden of proving, through “clear and convincing evidence,” that a transfer to a DAPT was made with “specific intent to defraud the specific creditor bringing the action.” Additionally, a creditor must file an action to void a transfer within the later of 18 months after a transfer, or six months after a creditor should have reasonably known a transfer occurred.
Marcia Kendle is the senior vice president and chief fiduciary officer at FirstMerit Bank
The information contained herein is being provided as general information of an educational nature and is intended for current and prospective clients of the Trust Department of FirstMerit Bank, N.A. Also, this information has been derived from sources believed to be accurate and reliable and FirstMerit Bank, N.A. makes no representation as to its’ completeness and acknowledges that due to the complexity of the subject matter relevant information is not complete. This information is not intended to be legal, financial or tax advice and is not a covered opinion as defined by the IRS Circular 230. For advice that is specific to your circumstances, you should consult a qualified financial, tax and/or legal adviser.
If you were to assemble some of the world’s outstanding business leaders in one place and ask them their secret to sleeping well at night amid the pressures of running a successful business, you might think you’d collect the best tips to handling anxiety in the business world.
The truth is that top business leaders often don’t have a secret to reveal — they rely on the strength and confidence they’ve developed over the years.
At the EY World Entrepreneur Of The Year conference, held earlier this year in Monaco, EY Entrepreneur Of The Year country winners assembled to compete for the World Entrepreneur Of The Year title.
We took the opportunity to collect the thoughts of the world’s most accomplished entrepreneurs — innovators, futurists, turnaround specialists and problem solvers — about dealing with worries. ●
“There’s nothing that keeps me up at night. I sleep very well. The challenge we have as a company is to keep delivering the culture we have created and expand it, keep evolving at the speed our customers expect us to evolve and keep creating value for them as we have for the past 10 years.”
Entrepreneur Of The Year 2012 Argentina
“The main thing is to make sure that we are always looking for new, creative ideas that keep our business updated with new technology and creativity. The other thing is making sure we are working faster than before.”
Lorenzo Barrera Segovia
founder and CEO
Entrepreneur Of The Year 2012 Mexico
“Business has its highs and lows, because let’s face it, it’s not easy. It has its challenges. They asked Steve Jobs what was the most important thing in business and he said, ‘Passion.’ If you don’t have passion you would give up when things get difficult. We have so much passion and love for what we do that it becomes a part of our life.”
founder, president and CEO
Entrepreneur Of The Year 2012 United States
2013 World Entrepreneur Of The Year
“What if the stock market crashes? What if there is some unknown thing that happens? What if there’s another 9/11 type of situation? Companies need to carry on, but maybe they don’t need to do events. Maybe they cut back on entertainment and speakers. The worry is what happens if something happens that I can’t control.”
President and founder
SME Entertainment Group
“We are in recovering times. I feel very positive about the economy in general, but I’m still very worried about Europe. And while we are recovering, it’s still choppy and choppy times are times when there are more needs out there.”
Retired global chairman and CEO
"I guess there is a point in my life where I thought it is all about me, and I am going to be the guy that guides everything and controls everything. What I have learned is that the best thing that I have done for our business is learn to let go and learn to get people who are better equipped to manage specific areas, do their thing and not get in the way."
Dr. Alan Ulsifer
CEO, president and chair
Entrepreneur Of The Year 2012 Canada
“Nothing keeps me awake at night becase my work is solid.
My father married at 60 and my mother was 23. They had four children. Then he died, and we quickly had to start thinking about what to do. There was no money — nothing. We had to leave the little town we lived in because of violence there. Thanks to that, I am where I am right now because I still could be on the streets of my village selling tobacco. There is no wrong that can do good. That's what I have to teach people.”
founder and president
Entrepreneur Of The Year 2012 Colombia
The idea of driving aimlessly seems glamorous in movies and songs. In reality, few of us get in a car without knowing how to reach our destination. We’ve created smartphone apps, GPS devices and satellite mapping to make our trips as efficient as possible and to avoid what we know to be an inconvenient, expensive outcome — getting lost.
I bring up this idea because many companies using social media have inadvertently become lost drivers. They start using social platforms with the goal of reaching some number of likes, retweets or shares, but as they embark on their social media strategies, many experience a disconnect between the content they post, blog and tweet and their progress on measurable business goals. These companies are driving without a roadmap; they just don’t know it.
Sound familiar? If social media isn’t working for you, your social media approaches may be missing a fundamental component: an effective content strategy. Here are three ways a solid content strategy will enhance your company’s social media success.
A like is just a like
All social media engagement is not created equally. To be successful, the social media activity that you generate needs to support your marketing goals — whether you want to improve employee engagement, boost customer conversions or build interest in a new product.
Creating a content strategy before you engage in social media will help your business clarify the specific marketing goals you want to achieve through content, as well as what messages you need to communicate to reach those goals. This process will ensure you get the right likes, shares and retweets from social interactions.
Social is a vehicle
Social media is a vehicle for sharing compelling content with your audience, and it doesn’t work if you don’t know what issues, topics and trends your audience finds compelling. Part of developing a content strategy involves learning how those you are trying to reach want to be talked to. Where do they go for information? How much time do they spend online? What kind of content are they looking for from your industry?
By getting to know the interests and pain points of your audience (customers, employees, shareholders, etc.), you can develop tactics to reach your online audience more effectively, saving you time and enhancing your company’s social influence.
Relevant content is meaningful
Kings of social content don’t become that way by luck. They use strategic tactics to connect with their audience through the right channels at the right times. More importantly, they make these connections meaningful and memorable by posting and sharing strategic, relevant content that their audiences desire.
When you deliver social content that your audience members find valuable or interesting, they’ll reward you by sharing your content, engaging with your business and, ideally, helping to promote your reputation as a thought leader in your business or industry. A content strategy allows you to do that by providing a roadmap for what kinds of informative, helpful, educational or creative content you need to make meaningful interactions.
As a recent Huffington Post article put it, the golden rule of the web is clear: “To know us better is to sell us better.” Ultimately, being successful in the social media space means taking the time to map out what success looks like. In this sense, a solid content strategy is not only an important component of any social media strategy, it’s the key to driving the results your business wants.
Michael Marzec is chief strategy officer of Smart Business and SBN Interactive. Reach him at firstname.lastname@example.org or (440) 250-7078.
When Albert “Chainsaw Al” Dunlap was the CEO at Sunbeam in the late ’90s, he had a reputation for ruthlessness. Besides massively downsizing the company, he was also known to intimidate everyone around him and resort to yelling and fist pounding.
While extreme, Dunlap’s behavior is an example of the type of “dictator” leadership that used to be fairly common in the C-suite. Rules were rules, there were no exceptions for anything and people were just a line item on a budget. Need to cut thousands of jobs? Don’t think twice about it.
On the other end of the spectrum is the Christ-like leader. This leader focuses more on building people up rather than tearing them down. This type of leader understands that there are rules, but sometimes to do the right thing, the rules need to be broken. For example, during the economic downturn, some Christ-like leaders went well beyond what was called for to make sure laid-off employees were taken care of.
They made sure they had the use of office resources to look for a new job and did everything they could to lessen the hardships. They weren’t required to do this; it was just the right thing to do. They saw employees as human, not just numbers on a spreadsheet.
Does it cost money to take the more humane route with your leadership? Yes and no. From a short-term, bottom-line perspective, it probably does cost a few more dollars to help people through a hardship. But long term, it can pay dividends. By treating people with respect and doing the right thing, it helps eliminate animosity toward you and your company from both the ex-employees and current ones. Maybe there are some good employees who you wanted to keep, but couldn’t afford. By showing compassion, when the economy turned around, they were far more likely to consider coming back than if they had just been shown the door with little regard to their well-being.
And what happens when these ex-employees end up in key positions in companies that could be customers? Do you think an ex-employee who you mistreated is going to buy anything from you or recommend your company to someone? It’s a small world, and what goes around often comes around, so it’s always best to treat people as best you can.
You can lead like a dictator and still get results. But do the ends justify the means? Will you conquer all, only to find yourself alone with no friends, the equivalent of Ebenezer Scrooge in “A Christmas Carol?” Or will you have an epiphany and realize there’s a better way to do things?
During this holiday season, think about your leadership style and the long-term effect it has on people’s lives. If this exercise makes you uncomfortable, then maybe it’s time to change how you lead. ●
What would it take for a company to succeed if its leader could effectively do only one of the following: innovate, instigate or administrate? We all know that an innovator is the one who sees things that aren’t and asks why not? The instigator sees things that are and asks why? The administrator doesn’t necessarily ask profound questions but, instead, is dogged about crossing the “t’s,” dotting the “i’s” and making sure that whatever is supposed to happen happens.
Ideally, a top leader combines all three traits while being charismatic, intellectual, pragmatic and able to make decisions faster than a speeding bullet. Although some of us might fantasize that we are Superman or Superwoman, with a sense of exaggerated omnipotence, the bubble usually bursts when we’re confronted simultaneously with multiple situations that require the versatility of a Swiss army knife.
Business leaders come in all shapes and sizes with various skill sets and styles that are invaluable, depending on the priorities of a company at any given point in time.
Every business needs an innovator to differentiate the company. Without a unique something or other, there isn’t a compelling reason to exist. Once those special products or services that distinguish the business from others are discovered and in place, it takes an instigator to continuously re-examine and challenge every aspect of the business that leads to continued improvements, both functionally and economically. It also takes an administrator — someone who can keep all the balls in the air, ensuring that everyone in the organization is in sync and delivering the finished products as promised to keep customers coming back.
As politicians and pundits of all types have pounded into our heads in recent years, “It takes a village to raise a child.” All who practice the art and science of business have learned that, instead of a village, it takes a diverse team working together to make one plus one equal three.
On the ideal team, each member possesses different strengths, contributing to the greater good. The exceptional leader is best when he or she is an effective chef who knows how to mix the different skills together to create a winning recipe.
In many companies, however, leaders tend to surround themselves with clones who share similar abilities, interests and backgrounds. As an example, a manufacturer may have a management team comprised solely of engineers, or a marketing organization could have salespeople who came up through the ranks calling all the shots.
If everyone in an organization comes from the same mold, what tends to happen is, figuratively, one lies and the others swear to it. This builds to a crescendo of complacency and perpetual mediocrity.
There is a better way. Good leaders surround themselves with others who complement their capabilities, and savvy leaders select those with dramatically different backgrounds who will challenge their thinking because they’re not carbon copies of the boss. This opens new horizons, forges breakthroughs and leads to optimal daily performance.
Strange bedfellows can stimulate, nudge and keep each other moving toward the previously unexplored.
To have a sustainable and effective organization, you can’t have one type without all the others. While everyone on the team may not always agree, each player must always be committed to making the whole greater than the sum of the parts.
The single most important skill of the leader who has to pull all the pieces and parts together is to have the versatility of that Swiss army knife — selecting the precise tool to accomplish the objective at hand. ●
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at email@example.com.
More than 800 years ago, medieval philosopher Maimonides outlined eight levels of charity, the greatest of which was supporting an individual in such a way that he or she becomes independent. In Maimonides’ view, support was defined as a gift or loan, entering into a partnership or simply helping that person find employment.
Few things are more powerful than philanthropy — especially when its end goal is to better the lives of others. These days, philanthropy, and corporate philanthropy specifically, has assumed a broader role in society.
Today, companies give back more strategically than ever before. They align themselves with nonprofits that foster missions they believe in. The wealthiest people on the planet have even coordinated the Giving Pledge (www.givingpledge.org), where they’ve committed to dedicate the majority of their wealth to philanthropy.
At last count, more than 115 people had taken the pledge. Warren Buffett and Bill Gates may be the most prominent names on the list, but others include Spanx Founder Sara Blakely, Cavs Owner Dan Gilbert, Progressive’s Peter Lewis and Netflix Founder Reed Hastings.
Last month, one member, David Rubenstein, CEO and co-founder of The Carlyle Group, discussed the importance of philanthropy during a presentation at EY’s 2013 Strategic Growth Forum.
In his pledge letter, Rubenstein explains why: “I recognize to have any significant impact on an organization or cause, one must concentrate resources, and make transformative gifts — and to be involved in making certain those gifts actually transform in a positive way.”
One way Rubenstein is being transformative is through “Patriotic Philanthropy.” He has given $10 million to help restore President Thomas Jefferson’s Monticello home and underwrote renovations to the historic Washington Monument. Yet Rubenstein’s most noteworthy initiative is the whopping $23 million to acquire a rare copy of the Magna Carta, ensuring it remained in the United States. After its purchase, Rubenstein gifted it to the National Archives.
Not everyone has Rubenstein’s vast resources. But every organization and any individual can make their own impact.
In the workplace, for example, organizations that give back elevate their status perception-wise among competitors and peers. It doesn’t take much. But by being a company that cares, prospective employees want to work for you. For your existing team, deliberate and well-organized corporate philanthropy programs quickly take on a life of their own, becoming a rallying point.
Think strategically and get started by finding your cause. We all have them. They exist at our very core, forming the belief system we live by every day. So why shouldn’t our philanthropy follow that same course? Consider aligning your giving or volunteerism with something you personally believe in or care about; something that fits with what your company does or something that is close to your employees’ hearts.
Most important, get involved and just make a difference. It really comes down to that. One initiative that has always impressed me has been the annual CreateAthon event undertaken by WhiteSpace Creative, a member of the Pillar Award class of 2005. You can read a first-hand account of this year’s program here.
Being a good corporate citizen goes well beyond making good business sense. When you align yourself with causes you care about, whether big or small, you make a difference in someone’s life. And the bottom line is this: It is all of our duties to get involved. It’s no longer a question of if, but rather of what, when and how. ●
Dustin S. Klein is publisher and vice president of operations for Smart Business. Reach him at firstname.lastname@example.org or (440) 250-7026.
When trying to learn about an individual, many companies turn to online background checks. However, this could be a mistake as much of the available information may not be fully verified, which is why many businesses turn to a licensed investigator to help provide a more complete and accurate picture.
Smart Business spoke with Theresa Mack, CPA, CFF, CAMS, CFCI, PI, a senior manager at Cendrowski Corporate Advisors LLC, about working with a licensed investigator to help your business uncover the information you need.
Why hire a licensed investigator?
Most online or database-driven background checks are actually ‘record checks.’ In other words, data from records are compiled and the quality of the source information is not thoroughly verified.
This cursory check may be sufficient in some cases. However, depending on the information found, the nature of the background check, the check’s intended use and the access to confidential/proprietary information that a potential employee may have, a complete background due diligence investigation by a licensed investigator may be warranted.
An investigator uses multiple resources to verify data accuracy and corroborate information. Thus, background due diligence investigations help reduce the risk of client reliance on false information.
How do investigators perform background due diligence activities?
An investigator generally works on a six-step methodology: prepare, inquire, analyze, query, document and report. This methodology is highly applicable to background investigations. An accurate and comprehensive investigation is based upon existing, determined and verified information, leaving no rock unturned.
Investigators will tailor their activities to suit the needs of their clients, which typically include attorneys, businesses and individuals. Client needs will define both the records checked by the investigator and the type of documents that can be released to the investigator and the client.
Where does an investigator begin?
An investigator often begins by examining open-source information, which refers to sources that are overt and publicly available. These are available through online data warehouse applications, which house data from disparate sources.
Open-source information includes public documents that are created throughout a person’s lifetime, allowing the investigator to follow a paper trail leading to a complete history of the individual being searched. These may include court filings, property tax documents, vehicle registrations and social media sources. Open-source intelligence is a form of intelligence collection management that involves finding, selecting and acquiring publicly available information and analyzing it to produce actionable intelligence.
How does an investigator evaluate sources?
Any record is only as good as the chain of events involved in its creation. Online record checks simply provide information on an individual. Investigators go further by evaluating the veracity of the source data.
Record maintenance, storage and dissemination procedures can often impact the accuracy of the information. Typos, misprints and mistakes introduced by human error can also affect the accuracy of records. These latter items are often seen on personal credit reports, criminal convictions and even civil litigation histories. While these are official records, they can contain errors nonetheless.
Processes for updating records can also compromise the accuracy of information, as records are only as accurate as their frequency of updates. Some records are never updated and may provide stale data if the user is unaware of this underlying issue.
Finally, the method that data warehouses employ for acquiring information critically impacts information integrity. For instance, the provider may have purchased information from a secondary source. In such an instance, it is essential that the provider have accurate retrieval processes and is knowledgeable about handling special data items.
An investigator evaluates each of these issues over the course of conducting background due diligence activities. ●
Insights Accounting is brought to you by Cendrowski Corporate Advisors LLC
You spent hours working on a new contract for your business, negotiating terms and swapping drafts of the agreement. But time was of the essence and in your rush to get started on the real work, once the terms were set, you and the customer neglected to exchange signatures on the contract.
The project started well enough, but then circumstances changed. The customer wants out of the deal and claims that there is no contract. You want to hold the customer to the agreement. That’s when you realize you don’t have a signed copy of the contract. What now?
Smart Business spoke with Christopher Dean, an associate at Novack and Macey LLP, about how to enforce an unsigned contract for services.
What is a services contract?
A services contract is, as the name suggests, any contract for the performance of services, as opposed to the sale of goods.
Does the distinction between services and goods matter?
It does. Almost every state has adopted a version of the Uniform Commercial Code (UCC), which contains provisions applicable to the enforcement of an unsigned contract. The UCC, however, generally applies only to the sale of goods, not to the provision of services.
If the UCC doesn’t apply, is the contract claim dead in the water?
Not necessarily. An unsigned services contract can be enforced in certain circumstances. The biggest hurdle is proving that a binding agreement exists, despite the absence of a signed contract.
Ideally, you’d have a fully signed document — it is close to irrefutable evidence that you and the customer agreed to the terms of the contract. But even if you don’t, the existence of a contract can be shown in other ways. The trick is gathering as much evidence as possible to show that a contract was formed.
What sort of evidence is useful?
Evidence will differ from case to case. Generally speaking, however, any writing tending to show that an agreement had been reached will be useful in proving that a contract had been formed.
For example, emails, memoranda, notes or even text messages might contain admissions from the customer such as, ‘We’re fine with these terms;’ or an unsigned copy of the contract with a note reading, ‘Here’s the final version.’
Of course, a writing signed by the customer is best, but even a writing by you concerning the contract can have some value. This is particularly true if it was the type of writing that invited — but did not result in — an objection from the customer, such as an email from you to the customer confirming the terms of the contract.
Is there any other evidence that might be useful?
Testimony from people with knowledge of the contract negotiations also may be useful. Testimony, however, is often treated with skepticism, especially when given by someone with a personal stake in the outcome. The key is to be as specific as possible in describing the negotiations and discussions that led to the formation of a contract.
In addition, performance can be strong circumstantial evidence of the existence of a contract — the longer the performance, the better. So, if it’s the case that you performed for only a day before the customer attempted to get out of the contract, the performance may not be very powerful evidence. But if you spent six months performing under the contract without objection from the customer, the customer will have a harder time denying that a contract exists, particularly if you were paid for your efforts during the period according to the contract terms. ●
Insights Legal Affairs is brought to you by Novack and Macey LLP