Chicago (1685)

Wednesday, 26 May 2010 20:00

Identity master

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What’s in a name? Quite a bit if you ask Daymond John, founder of clothing manufacturer FUBU and star of the hit TV show “Shark Tank.”

“Having a strong brand, whether corporate or personal, always creates a halo effect,” John says. “A lot of time, that’s the only thing that separates you from everybody else.”

Standing out from the pack was John’s intent when he named his nascent company FUBU, an acronym for “For Us, By Us” that conveyed the business’s original, largely African-American target market.

John has since stretched the FUBU brand to reach a broader market and expanded into entertainment-related products and services. Yet, he has always remained true to serving the company’s core customer.

“It always comes back to the mission statement and the base,” he says. “Like a building, if you have a weak base, the building will crumble. Whatever the identity and the product you’re building, you have to stay true to that first.”

John’s new book, “The Brand Within,” hit bookshelves in April. In it, he explains how branding relationships have become integrated with everything we do — from buying products and services to determining which television shows we watch, what music we listen to and the food we eat.

Smart Business caught up to John, the 2003 Ernst & Young Entrepreneur Of The Year Award winner in the retail category of the New York City region, and discussed the importance of personal brands, how to nurture a company’s identity and why you better sum your identity up in three words.

Q. How can a company benefit from having a strong brand?

In a tough time like this, when everybody is holding their purses and wallets very close, (what) they will end up spending the money on are the brands they are comfortable with because the brand is portrayed as something that gives them a comfort level.

Q. Should CEOs view their brand identity as an asset that can be managed, nourished, invested in and leveraged?

A lot of people or companies try to chase the market. If you chase the market, then you’re behind the market. ... So you always have to stay true to your customer base and what you created, but you have to come up with innovative ways and take those leaps and bounds and chances to improve the brand you have.

I believe that every brand should be able to be spoken about in three words. Whether it’s BMW — fine German engineering — or any other company, you need to be able to wrap up your whole mission statement and identity in three words.

Q. In your book, you detail how people are brands just as much as companies are brands. What does that say about the power of a personal brand?

A personal brand is actually more effective than a corporate brand because everything starts with a person. Think about it. If Steve Jobs gets sick, the brand itself, the stock, goes down 20 percent.

As a personal brand, you’re judged hundreds, thousands and, if you’re on television, millions of times a day. You’re selling every single action you take and every single word you speak. You’re selling yourself, and that is the brand you represent or own. That’s why that’s more important than anything else.

Q. Are there warning signs you’re stretching your brand too far?

Yes. Once you put it out there in that space — and you have to find creative ways to put it out there these days — and people just don’t like it, support it or ... are appalled by it.

The days of focus groups ... are over because you have the Twitters of the world. These people don’t owe you anything. You’re trickling it out there and putting out test balloons and seeing what happens.

You can’t have thin skin. People fall in love with their brands and ideas and don’t want to listen to anyone else and hear that they do have an issue. ... Egos have taken down way too many companies.

How to reach: Daymond John, www.daymondjohn.com

As the regional winners from Ernst & Young’s Entrepreneur Of The Year Awards are announced later this month at awards recognition banquets across the U.S., it’s not too early to be thinking ahead for the CEO invitation-only Ernst & Young Strategic Growth Forum 2010, which will be held Nov. 10-14 in Palm Springs, Calif.

This program convenes more than 1,500 of the nation’s top CEOs, entrepreneurs, advisers, investors and other senior business leaders and is the country’s most prestigious gathering of high-growth, market-leading companies.

The forum delivers leading business advice designed to help entrepreneurs master strategies for company growth, discuss ideas on the transaction market and available capital, learn the critical success factors of mergers, acquisitions and IPOs, hear inspiring stories from game-changing entrepreneurs, and meet potential customers, investors, partners, acquisition targets and buyers.

It concludes with the 24th national Ernst & Young Entrepreneur Of The Year® awards, the largest gathering of entrepreneurs in America, hosted by Jay Leno.

This year’s speaker lineup includes a who’s who of business, such as:

  • Muhtar Kent, chairman and CEO, The Coca-Cola Co.
  • A.G. Lafley, former chairman of the board, president and CEO, Procter & Gamble
  • Deepak Chopra, co-founder, The Chopra Center for Wellbeing
  • Tom Adams, CEO, Rosetta Stone
  • Arthur Levitt, former chairman of the United States Securities and Exchange Commission
  • Jeffrey Joerres, chairman and CEO, Manpower Inc.
  • Rob Enslin, president, SAP North America
  • Christina Lampe-Onnerud, founder and CEO, Boston-Power Inc.
  • Debi Fine, president and CEO, Direct Brands
  • Greg Norman, professional golfer and entrepreneur

Learn more at www.ey.com/us/strategicgrowthforum.

Sunday, 25 April 2010 20:00

How to compete in a global marketplace

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Markets are becoming global. This can present great opportunities with extreme rewards. However, customers and entire markets can be won and lost in the blink of an eye. In order to reap the rewards and manage the risks, a business first needs to understand the global forces affecting supply and demand.

“Customers, vendors, partners and shareholders no longer live in isolated pockets and are becoming more interconnected. Physical market boundaries mean very little nowadays. This is the core of globalization,” says Paul Prabhaker, Ph.D., associate dean of Graduate Programs in the College of Business at Northern Illinois University. “Globally efficient markets relentlessly drive human resources, capital and materials. These markets do not respect national boundaries, traditions or cultures.”

Smart Business spoke with Prabhaker about how businesses can deal with these interconnected marketplaces and globally networked supply chains to stay competitive in a furiously evolving marketplace.

What are some key things business leaders need to understand about doing business globally?

Be aware of the underlying trends driving the two sides of globalization: the supply side and the demand side. You ultimately need to proactively place bets around the future you want. This means you’d better understand the fast-changing global trends well enough because the future of your business is at their mercy.

Understand and accept that these global trends affect not just large, multinational firms, but, in fact, present greater risks and rewards to small local businesses. Be intentional in adapting your business on the supply side and demand side. Do you wish to serve markets locally by leveraging the efficiencies of a global supply chain? Or do you wish to serve markets globally by leveraging the nimbleness of a local supply chain?

How can companies deal with the interconnected marketplaces and the rise of networks?

An interconnected world creates customers who are at least aware of what other markets have access to. This awareness is heightened by the proliferation of technologies that provide information on demand to the global population. People all across the world are touched by the same information — information co-generated by providers and users simultaneously. It’s then just a matter of time before behavior starts becoming similar.

For example, teenagers in Asia want to look and act like Western teenagers. They mimic television programs and movies and align their purchases and behaviors to the Western model. Awareness is everywhere now, and that’s the difference. Because people are more aware, their behavior conforms to the new global model.

Markets are also no longer respecting national boundaries. Capital increasingly flows in the direction of wherever the market returns are higher. Human and material resources also do not have much respect for national boundaries, for example, the shift of technology skills and manufacturing skills from the West to the East. Businesses now have to rethink their capital-sourcing and human resource management strategies for a global marketplace.

What factors drive global business trends?

A number of significant paradoxes are occurring. The first is that the power distribution has shifted substantially. Currently, the world’s total output is around $40 trillion, with one-quarter of that generated in the U.S. The United States used to generate two-thirds of the world’s output and was viewed as the global economic power in the 1950s.

Thus, the rules that govern the world markets have changed from a predominantly U.S.-centered model to a model centered around multiple countries. Businesses need to understand that the sociopolitical dimensions underlying economic markets are fundamentally different now.

Another paradox is the shift from free-market, open-economy models that create wealth to state-directed economies. The notion that government-directed markets are inefficient is being directly challenged as countries such as China, India and Russia rapidly move up the global economic ladder. As a business, you will need to align your future around these markets that grow in newer economic systems.

There’s also data that show that substantial wealth has shifted from the West to the East over the last 20 years and that this trend is not abating in the near future. This is usually a predictor of where future demand will be. U.S. businesses need to emotionally accept this, even though it is hard to give up years of legacy and history. Once you accept it, you can implement your practices around this new phenomenon.

How can business leaders help their companies stay competitive and win in the global arena?

Stay vigilantly aware of the rate at which globalization is happening. Leverage every global development on the supply and demand sides of your business. Track customers and understand how they make choices in this global marketplace. Watch your suppliers and vendors closely and align your business with those who have the flexibility and scale to extract maximum global supply-side gains.

A contrarian way to success in this relentlessly globalizing world is for businesses to stay strong in their own corporate character and business model. This helps your customers and shareholders understand who you are and provide that all-important confidence in your products and business practices, and what you stand for.

The challenge for businesses is to either keep riding the powerful globalizing waves, with the ups and downs, or set their own standards and character, and choose the less-trodden path to success.

Paul Prabhaker, Ph.D., is the associate dean of Graduate Programs in the College of Business at Northern Illinois University. Reach him at (815) 753-6176 or prabhaker@niu.edu.

Sunday, 25 April 2010 20:00

The Allen file

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Born: Kokomo, Ind.

Education: B.S. in accounting, Ball State University

What was your first job?

I started with Crowe Chizek right out of college in 1975. It’s a funny story — I came to Crowe because it was a small firm in a small town (South Bend, Ind.) and I didn’t have to travel. And so now I find myself living in Chicago and leading this large organization and traveling nonstop. But the firm’s values and mine were aligned then and now.

Whom do you admire most and why?

Paul Volcker comes to mind for his strong leadership historically — first as chairman of the Federal Reserve and currently as an adviser to the president — and his unwavering support of our country without anticipated reward for his efforts.

What’s the best business advice you’ve ever received?

The best business advice I ever received came from a client I worked with over a period of probably 20 years: Make a decision and then move on. If the decision wasn’t necessarily the right decision, you don’t look back and point fingers and blame people, but you move on and you make the next decision. I was impressed with his ability to be always thinking about the future, not the past. Certainly, you learn from your mistakes, but you don’t look back and question the past. You don’t cry over spilled milk; you move on.

Your workday is off to a bad start. How do you turn it around?

I tend to start off the days pretty well. You know what I do? I try to exercise and read first thing in the morning, and that’s kind of a jolt to my day. If I can do that, I do not start any day badly.

The fiduciary shield doctrine is an equitable doctrine that can protect individuals from litigation for actions they take on behalf of their employers.

It allows courts to decline to exercise personal jurisdiction over nonresident defendants sued for acts performed in their capacities as corporate agents. And absent personal jurisdiction, suits against nonresident, individual defendants can be quickly dismissed.

The rationale for the fiduciary shield doctrine is rooted in concepts of equity and fairness — whether it would be fair to sue a nonresident in Illinois for acts carried out on behalf of his or her employer.

Generally, agents are not personally liable for acts they carry out for their employers, but this doesn’t always protect employees as planned, as they can still be sued, says Andrew D. Campbell, a partner at Novack and Macey LLP.

“While the doctrine of limiting the personal liability of agents is alive and well, it still doesn’t stop litigants from naming officers or agents of a corporation as defendants,” says Campbell.

But a motion to dismiss asserting the fiduciary shield doctrine can quickly extract individual, nonresident defendants from a suit, says Campbell.

Smart Business spoke with Campbell about the fiduciary shield doctrine and how to protect your directors, officers and other agents from litigation.

Does the law generally protect directors, officers and other agents from liability for actions they take on behalf of their employers?

For the most part, yes, but exceptions apply to the rule of limited liability, and getting to a determination of nonliability can be time consuming and expensive.

While exceptional cases can sometimes have merit, corporate agents are often parties to suits because plaintiffs perceive tactical benefits in suing them. These perceived benefits can include increasing the settlement value of a case, intimidating the individual litigant or saddling the individual with the time-consuming and expensive tasks of litigation.

Also, naming directors and officers can trigger D&O insurance policies, thereby increasing the pool of funds available to settle the suit or pay a judgment. The fiduciary shield often can be raised in a motion to dismiss early on, thereby nullifying these perceived benefits.

How does personal jurisdiction affect the application of the fiduciary shield doctrine?

To have jurisdiction over a defendant, whether it’s a corporation or an individual, a plaintiff must show that the court can exercise its power over that defendant. So, for a court in Illinois to assert jurisdiction over someone from Wisconsin, for example, there must be an Illinois statute allowing for the exercise of jurisdiction, and constitutional requirements must be satisfied.

In Illinois, the ‘long arm’ statute provides that jurisdiction may be had over a person for any basis permitted by the U.S. Constitution and the Illinois Constitution. The U.S. Constitution allows for personal jurisdiction as long as that person has ‘minimum contacts’ with the state. And it is rather easy to establish these minimum contacts.

Assuming there are minimum contacts, a court must then consider whether exercising personal jurisdiction would be fair and just. The fiduciary shield doctrine is an outgrowth of this inquiry.

What is an example of how the fiduciary shield doctrine applies?

It often comes up when a corporation and one or more of its officers are being sued. For example, suppose a Wisconsin corporation was hired to construct a building in Illinois and a lawsuit is filed in Illinois arising out of the construction project. The corporation would certainly be subject to personal jurisdiction in Illinois, but what about the officers — Wisconsin residents — who negotiated the contract and entered into the deal on behalf of their employer?

Entering into a contract for a construction project will often involve lengthy negotiations and will require the builder’s employees to travel to Illinois. But is this enough contact with Illinois to render them subject to being sued here in their individual capacities?

In a recent decision, with similar facts, the court dismissed two officers from a suit under the fiduciary shield doctrine. It found that one officer, who signed a construction contract and participated in telephonic meetings about the project — but who never traveled to Illinois — was not subject to jurisdiction here. Likewise, another officer, who did come to Illinois to attend progress meetings, but never for personal reasons, was also not subject to personal jurisdiction.

Are there circumstances under which courts are less likely to apply the fiduciary shield doctrine?

The doctrine is discretionary, so a court can decide whether to apply it based on the circumstances presented.

Courts often will refuse to apply the fiduciary shield doctrine to someone who is a high-ranking company officer with a direct financial stake in the company. A direct financial stake typically doesn’t mean an officer who holds shares as part of a retirement plan. Instead, courts are generally concerned with substantial shareholders, for example, those owning 20 percent or more of the company. But, monetary incentives aren’t the only thing courts consider.

Although less common, personal motives — spite, vindictiveness or maliciousness — have, at times, led courts away from applying the fiduciary shield doctrine. Further, where there are allegations that a corporate entity was merely a ‘sham’ utilized for an individual defendant’s personal benefit, the fiduciary shield doctrine is less likely to apply.

These exceptions notwithstanding, utilizing the fiduciary shield doctrine at the outset of a case can be a powerful tool in extracting nonresident agents from lawsuits during their initial stages.

Andrew D. Campbell is a partner at Novack and Macey LLP. Reach him at (312) 419-6900 or acampbell@novackmacey.com.

Friday, 26 March 2010 20:00

The Davis file

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Born: St. Charles, Ill.

Education: B.A. economics/social studies, 1971, and Master of Health Administration, 1973, University of Iowa

What was your first job, and what did you learn from it?

My first job was to be a waitress at a little diner in West Chicago. I learned to multitask and to remember — and I still carry this with me to this day — to be kind to any server I ever have in any restaurant.

Whom do you admire most and why?

I admire Gandhi because I think he demonstrated that an individual person can make a difference.

What’s your definition of success?

Feeling proud of the work I’ve done and having good fun and family who love me.

What’s your favorite part of your job?

That every single day is different and it requires problem-solving skills that are never routine or rote.

What’s the best business advice you’ve ever received?

Be resilient.

Your workday is off to a bad start. How do you turn it around?

I will get out and walk around. I’ll go to the neonatal intensive care unit where the babies are and that always makes me feel better.

When you were little, what did you want to be when you grew up?

When I was young, I wanted to be a ballet dancer, but I can’t really say that at this age.

Tuesday, 23 February 2010 19:00

Helping the helpers

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While many stories have been written about the struggles of businesses, few detail the hardships hitting the nonprofit sector.

Private donations to charities doubled from 1987 to 2007 but dropped 6 percent in 2008. Some charities, such as human service organizations, saw donations fall nearly 13 percent last year. Foundation endowments and giving are down across the board, and many state and municipal governments facing deficits are reducing spending on social programs.

Further compounding the problem is a general decrease in government spending. Many nonprofit organizations are facing a changing funding environment coupled with a rising need for services in the communities they serve. The past decade saw a proliferation of new nonprofits, increasing competition for an ever-shrinking pool of funds.

“Overall, nonprofits are being forced to re-examine their operations in order to continue fulfilling their missions or just to stay above water,” says James P. Martin, CMA, CIA, CFE, CFD, CFFA, managing director at Cendrowski Corporate Advisors.

Smart Business spoke with Martin about nonprofits and the challenges they’re facing.

How do nonprofits contribute to the economy?

For many years, the nonprofit sector reaped what seemed like an ever-increasing level of donations each year. Moreover, the threshold to establish a nonprofit was rather low. These two factors together allowed the number of IRS-registered nonprofits to double in the past 15 years. In fact, nearly 10 percent of all U.S. employees work for a nonprofit organization, although this number appears to be falling as nonprofits struggle in the current economic environment.

Significant organizational changes need to be made in order for many nonprofits to survive.

What issues do nonprofits face today?

Most nonprofits today realize that they must focus on maximizing the amount of funds received by grantees. In previous years, some nonprofits believed part of their mission was to employ people in the community, but this belief appears to be going by the wayside. More and more donors want to see their dollars go directly to the causes of their choice, not to overhead costs internal to the nonprofit itself.

This can cause issues for nonprofits that have suffered greatly from a downturn in donations. These organizations might possess an internal cost structure that, today, just isn’t sustainable.

Additionally, nonprofits are facing pressure to provide measurable proof that the services they provide have an impact on the communities and populations that they target. Donors and the general public want evidence that nonprofits are effectively and efficiently doing exactly what they set out to do. Checks and balances such as these are essential; however, it is causing nonprofits to spend more time and energy on accountability, which can take attention away from their main goals and mission.

Do you see any differences in the struggles of large nonprofits and those of smaller ones?

Yes. I’d say that the economic headwinds have, in fact, widened the gap between the strongest nonprofits and those that are finding today’s operating environment difficult. Large nonprofits often have immense name recognition that keeps them going. Smaller nonprofits have to compete with millions of similarly sized organizations for a smaller pool of dollars, which is a difficult task in any environment.

How long will this pattern of decreased funding continue?

Unfortunately, it will probably continue for some time. It’s well known that charitable contributions fall in tandem with wages and earnings. However, it’s amazing how certain events can create a large outpouring of donations. The latest crisis in Haiti has created a tremendous influx of donations for many big-name nonprofits.

But, such crises, unfortunately, often have a reduced impact on smaller foundations and nonprofits. These foundations will likely have to wait a longer period of time before they see their donations rise again.

What strategies can you suggest for struggling nonprofits?

Many nonprofits today are examining potential mergers, in some cases combining entities with similar missions or, alternatively, dissimilar missions. Such mergers allow nonprofits to expand their mission, reach greater groups of individuals in need and help minimize organizational costs.

However, not all mergers go smoothly. Some nonprofits have experienced significant hardships in merging with other entities. It’s hard for nonprofits to combine their missions or to change course operationally. It is, nonetheless, a necessary part of being a nonprofit in today’s world.

What if a merger is out of the question?

If a merger is definitely out of line, nonprofits should consider spending the dollars they have on building name recognition within their communities, vocalizing their successes and providing visible services to the community.

Using this three-pronged strategy can help donors learn about the nonprofit, understand its mission and physically witness the benefits it provides. There’s nothing more compelling to donors than the ability to watch their donations have a direct impact on the community.

James P. Martin, CMA, CIA, CFE, CFD, CFFA, is a managing director of Cendrowski Corporate Advisors. Reach him at (866) 717-1607 or jpm@cendsel.com.

Tuesday, 26 January 2010 19:00

Find opportunity in distress

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The current economic turmoil is giving businesses more opportunities to benefit from competitors’ and vendors’ financial troubles, but there are also increased risks.

When you venture into this Wild West of distressed asset acquisitions, you need guides who know how to navigate this complex territory. In the world of distressed asset acquisitions, deals close in days and transactions that would typically include 60 pages of documentation are sealed with something much less.

“It’s important to know your exposures and liabilities,” says Steve Roemer, president and CEO of Solid Asset Solutions, LLC.

Steven M. Weiss, a partner in the Corporate Practice Group and the Restructuring & Insolvency Service Group at Levenfeld Pearlstein, LLC, adds, “If you do everything the conventional way, deals just can’t be done with speed, and you won’t be seen as an experienced buyer.”

Smart Business spoke with Roemer and Weiss about how to prepare for the unique challenges of distressed asset acquisitions so you don’t end up with no deal, or, worse, a bad deal.

What are the biggest mistakes businesses make in distressed asset acquisitions?

Worst case scenario: Choosing the wrong structure. Take, for example, the story of an inexperienced buyer who went into a deal with inexperienced counsel. They started with a seller-financed deal that had great potential. But because of their mutual inexperience, they chose the wrong structure (an equity purchase agreement instead of an asset purchase agreement) and unknowingly exposed the buyer to assuming liabilities that were not contemplated by the deal. As a result, each month the buyer had a costly reminder of the mistake when he had to fulfill the lease obligation for a building the company didn’t occupy. If the deal had simply had a different structure, the buyer never would have assumed that liability.

Are there times when companies should consider a joint bid with another firm?

There are times when finding a partner for the deal may help get the transaction done and also reduce risk. For example, if both inventory assets and intellectual property assets are for sale, the seller may view a bid for both more favorably than a higher bid for a single asset class. So to be the winning bidder, you may need to partner with a firm interested in buying another portion of the assets.

When joint bidding occurs in a conventional transaction, the two companies negotiate a joint venture agreement and generally form a new legal entity for the purpose of the transaction. But when two parties approach a joint bid in a distressed situation, standard operating procedures often change. Often the joint venture consists of nothing more than a general partnership (with no state law charter and liability protection) and a short-form partnership agreement.

What financial preparation can help prevent you from losing a deal?

If you have a successful bid, you may need to fund the entire purchase price in cash within days. That means that prior to the deal, you need to prove financial wherewithal and make sure the funds are available for immediate transfer. If you don’t, you could lose the opportunity.

Why is due diligence so critical, yet so difficult, to conduct in distressed asset acquisitions?

When a company faces dire financial difficulties, it can overlook the proper maintenance and safeguarding of assets, or, worse, internal problems can lead to fraudulent activity. During the due diligence process, buyers or their representatives need to scrutinize the book values and make sure they feel extremely comfortable with the assets to be purchased. In almost all of these deals, all sales are final. That means no practical recourse for post-closing issues, whether in the form of indemnification, set-off or otherwise.

Due diligence in these situations requires special agility, skill and resources. Buyers can make due diligence requests with extensive checklists and hope that the seller will provide them with meaningful information. But buyers can’t guarantee that sellers will respond, particularly on such a compressed time frame.

We always recommend you contact your legal and financial advisers as early in the process as possible. Your advisers need some lead time to order and analyze searches on UCC filings, tax liens, pending litigation and the like. If the seller is in bankruptcy, counsel must review the bankruptcy docket and relevant filings and understand the procedures of the applicable bankruptcy court.

What should happen immediately following the purchase?

If you don’t safeguard your investment, it could disappear. Make quick arrangements for the shipment and storage of assets — this helps ensure that you receive the full value of what you bought instead of items disappearing through the back door. In liquidations, you may need to vacate a leased facility within a short time frame.

Make sure you can meet those deadlines or work out an arrangement with the landlord to avoid hefty per diem penalties or disputes. When possible, put a 24/7 security service on the premises after you complete the transaction.

In a distressed asset transaction, conventional deal-making protocol may not necessarily get the deal done. However, buyers who can act swiftly and intelligently in this opportunistic context can reap significant rewards. With the right advisers, those who understand the nuances of this market, you can turn other businesses’ losses into gains for your business.

Steven M. Weiss is a partner in the Corporate Practice Group and the Restructuring & Insolvency Service Group at Levenfeld Pearlstein, LLC. Reach him at (312) 476-7503 or sweiss@lplegal.com. Steve Roemer is the president and CEO of Solid Asset Solutions, LLC, a firm that provides expert navigation services for distressed asset acquisition opportunities, as well as liquidation services. Reach him at (847) 353-1361 or steve@solidassetsolutions.com or www.solidassetsolutions.com.

Tuesday, 26 January 2010 19:00

The Heaney File

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Born: Chicago

Education: B.A. in communications, Loyola University

At Addus: Heaney was named president and CEO in May 2008. Previously, he served as vice president and chief operating officer. Prior to joining Addus in 1985, he worked for Staff Builders Inc., a national home health service company.

What was your first job, and what did you learn from it?

Fry cook at a drive-in restaurant. I learned to work hard.

Whom do you admire most and why?

I admire Abraham Lincoln because of his intellect, sensitivity, wisdom, humility and for his sense of what is right.

What’s the best business advice you’ve ever received?

Do the right thing.

Your workday is off to a bad start. How do you turn it around?

I organize.

If you weren’t in your current position, what might you be doing instead?

Teaching history and coaching girls softball

Heaney on customer service: The first and most important quality an organization has to have in our business to achieve density is excellence in customer service. We have a phrase, it’s, ‘Keep your promise.’ If you keep your promise, you will get a disproportionate number of referrals or new consumers. If you keep your promise, they’ll stay with you longer or forever. And if you keep your promise, the community realizes that’s what you do and so your business builds by reputation.

Addus by the numbers:

  • More than 12,000 employees
  • Serving more than 23,000 consumers
  • 120 offices in 16 states

Saturday, 26 December 2009 19:00

Social liability

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LinkedIn, Facebook and Twitter have made it possible for anyone, anywhere, to distribute information about who they are and what they’re doing to hundreds, if not thousands, of individuals. If you want people to know what’s happening in your business, this means opportunity. If you’d prefer to keep some things quiet, it could mean danger.

“It’s important for employers to set social networking policies because with the benefits of social networking come significant risks,” says Laura Friedel, a partner in the Labor and Employment Service Group at Levenfeld Pearlstein, LLC. “Employees will use social networking sites regardless of whether their employers want them to or not. By putting a policy in place, and following it, employers help control their risk in this area.”

Smart Business spoke with Friedel about some of the areas of risk for employers and how to proactively address them.

How do companies benefit from having a social networking policy in place?

Having a social networking policy not only protects you, the employer, but also helps employees to understand the expectations and the implications of their actions. Explicitly outlining your policies — and including them as part of training — puts everyone on the same page. If you haven’t updated your policies recently, make that a priority. With the rapid development of new social networking tools, policies can quickly become outdated. If your business’s computer policy is more than a year old, it’s quite possible that it does not adequately reflect the electronic issues that are facing your company right now.

How should a social networking policy address employee monitoring and privacy concerns?

A policy should clearly state that the company may monitor activity on social networking sites and on the Internet, and that employees should have no expectation of privacy in statements that they make in these forums. Having this position in writing puts you in a far better position if you uncover electronic information that you want to use. This is a critical point because cases frequently turn on whether the employee had a reasonable expectation of privacy in the communications at issue.

How should your social networking policy address harassment?

In certain circumstances, the interactions of your employees online could be considered harassment. Employees should be made aware that the company’s prohibitions on harassing, discriminatory and retaliatory conduct in the workplace also prohibit that type of behavior online to the extent that it relates to the workplace or those associated with it. Companies should investigate claims of Internet or social networking harassment as they would other harassment that relates to employees or the workplace. Finally, because discrimination and harassment issues are particularly troublesome when they involve managers and subordinates, companies should consider prohibiting managers from becoming ‘friends,’ ‘followers’ or ‘contacts’ of their subordinates.

What role do social networking sites play in pre-employment screening?

Looking at social networking sites can provide you with useful information about the professionalism of candidates, among other things. But you need to consider the risks involved with how you find this information.

Companies considering using social networking sites for pre-employment screening should think carefully about how they are going to use this tool and, in particular, about which candidates they are going to screen and the type of searches they are going to conduct for each candidate. Consistency is important, as is an understanding that not everything you find online is necessarily true. In no situation should a company access information that it is not authorized to access.

Much of the risk in using social networking sites for pre-employment screening is that the company will learn information that it can’t legally rely on in making hiring decisions. One strategy that can work for some companies is to have someone other than the hiring manager do the social networking research and only pass on relevant information to the person doing the hiring. That way, the hiring manager doesn’t learn about a candidate’s children, religious affiliation, sexual orientation or union activity.

It also prevents the hiring manager from seeing pictures (for instance, of a woman with two young children) that could sway how he or she looks at the candidate and his or her commitment to the position. Any company considering using social networking to learn more about a candidate should also consider revising its employment application to indicate that such screening may be conducted and should confirm that it is complying with the Fair Credit Reporting Act and other applicable laws.

What safeguards do you recommend employers put in place to make sure employees don’t post trade secrets and confidential information online or take it with them when they leave?

Even seemingly innocent comments such as, ‘I’m traveling to New York to meet with a potential partner,’ or, ‘I’m so stressed about the big deal coming through at the end of the month’ can leak confidential information. To avoid inadvertent disclosure of business information, discuss social networking and Internet postings as part of your confidentiality policy and train your employees on what types of statements could lead to problems.

Social networking can also raise issues when it comes to keeping customer, vendor and business partner information confidential. Employees who use social networking as part of their work duties should be encouraged or required to adjust the security settings on their social networking accounts. Companies should also consider requiring these employees to maintain separate business accounts that the company can access.

Laura Friedel is a partner in the Labor and Employment Service Group of the Litigation Practice Group at Levenfeld Pearlstein, LLC. Reach her at (312) 476-7510 or lfriedel@lplegal.com.

Saturday, 26 December 2009 19:00

The Johnson File

Written by

Born: Cincinnati, Ohio

Education: Indiana University, bachelor of arts degree in criminal justice; double minor in business and sociology

President of Fidelitone Logistics since 2004

What was your first job? What lesson did it teach you that is still useful today?

I delivered pizza for Spooners Pizzeria. The job taught me that no matter how fast you drive, you can’t make up for leaving late. In other words, spend the time planning and do things right from the beginning.

Whom do you admire most and why?

My father, the consummate man of his word, who always had the actions to support his words. No matter the time or circumstance, my dad carried out his actions with a positive attitude and at full throttle.

If you could be one superhero, which one would you be and why?

I would be Green Lantern. I admire the story behind it. The inspirational vision of the common person being the real hero of the planet. I believe the same is true today: It’s the real-world doctors, military personnel, volunteers, teachers, etc., that are living, breathing heroes.

What’s your definition of success?

To me, success in its simplest form is feeling good about an accomplishment, be it personal or business. Picking a goal and achieving it and being proud of that achievement is success in its purest, most satisfactory element.

Your workday is off to a bad start. How do you turn it around?

If you let a bad start keep you down, you should not be running a company in the first place. This is typically not an issue for me, but if there is a situation that I need to talk through with somebody, I can always rely on my wife.

If you weren’t in your current position, what might you be doing instead?

Sales or law enforcement, in many ways, very similar to what I’m doing today.