Chris Montague says that to create a clear vision, you have to prioritize, really understand what the important activities are and stay focused on those.
If you don’t, the vision can easily become so complex and involved that the execution of it would become difficult to manage, says Montague, managing partner of Plante & Moran PLLC’s Chicagoland offices, which posted 2008 revenue of about $25 million.
“If you, at the outset, lay that groundwork, you have the opportunity to stay focused,” he says.Smart Business spoke with Montague about how to create a vision to move your company forward.
Q. How did you create your vision?
It would have been a combination of the leaders of the practice here in Chicago along with several of the firmwide leadership group. It would have been a series of meetings where we would have started with growth objectives, focusing on the industries and services we feel we really bring a unique solution to and that are well aligned with the Chicago market.
Then we matched that up against resource needs, which, in our case, is typically people, and then laid out a plan on how to both grow the practice and attract and retain people over that five-year period.
Then, that plan and not all but many of the key initiatives would have been shared with the staff in the office so they have a clear idea of where we are headed.
It would not be things that we don’t want to share with them; it would be things that we think aren’t really all that meaningful to the direction and the larger objectives. It’s important to keep it simple and straightforward. It’s just making sure we are focused on the most important activities. There’s a real talent to being able to condense your message and your vision to the bare bones.
Q. How do you communicate your vision and make sure the employees understand it?
We have a very clear goal of doubling in size in the next five years. We have created a vision around that objective of what we’ll look like in five years, including what our strategies and key initiatives will be.
That vision includes both quantitative metrics and also some qualitative goals that we think are important to our firm and our firm’s success and our firm’s culture.
That vision and those major initiatives had been shared with the entire team, all 150 people. We keep that vision and those initiatives in front of the team through our annual planning process where, each year, we are going to establish goals and objectives that are aligned with the vision. Then we review that plan and results on a very regular basis with the members of the team.
Q. How do you keep the vision simple?
You need to understand your organization’s strengths. Wherever possible, you need to align your vision with the things you do well or with those things you think you can get good at in a very reasonable amount of time. Then, execute against those.
The other thing is, you need to be realistic in your assessment of your organization and the market. You need to be realistic in your assessment of your resources and then what you can accomplish.
Q. How do you monitor the vision?
I think being appropriately hands-on. Being engaged with your team throughout the day, throughout the week, continuing to share the vision and then understanding what is going on to make sure it’s in alignment with what you are trying to accomplish.
Being accessible to employees and staff at all levels is important, and being responsive. When someone comes to you for help or looking for assistance in one of these activities, you are responsive and available.
Maybe another way to say it is consistency in terms of message, consistency in terms of availability, and consistency in terms of follow-up and monitoring.
Q. How do you identify your strengths?
Leaders need to be involved in client service. The leadership throughout our firm and I would be included in that still have client responsibilities.
That allows us to stay in touch with what our clients are looking for, what we need to be doing in terms of service delivery, what we need to be doing in terms of value proposition.
That gives you the opportunity to identify and understand what your strengths are.
The other side of it is in knowing your internal resources. So I have the opportunity to interact in those client service situations with staff and other partners.
Just by having an active role in client service, a leader then gets to have an … understanding of how people are performing and where maybe we need additional resources or where we think we can leverage those we already have.
How to reach: Plante & Moran PLLC’s Chicagoland offices, (312) 899-4460 or www.plantemoran.com
Whether you call it downsizing, “right-sizing,” a layoff or a work force reduction, one thing remains indisputably true: Letting employees go is one of the toughest things an employer ever has to do. Before moving forward with a reduction, employers need to consider all alternatives.
“Setting up a framework to consider a work force reduction is necessary; look at all these planning factors first,” says Kerry Davidson, an attorney in the Labor & Employment Service Group with Levenfeld Pearlstein, LLC.
Smart Business spoke with Davidson about how to ensure the reduction process runs smoothly.
How do you plan for a work force reduction?
The key is to never lose sight of the business reasons for the change. Is a business reacting to something short term? Is there a possibility of less drastic alternatives, such as reduced work schedules, unpaid leave alternatives, voluntary separations, hiring freezes, wage freezes or delayed capital expenditures?
First, trace the work flow. Determine what work is being affected without even thinking about what individuals could be impacted. Trace the flow of that work to see what job positions touch the work. Then, determine the impact on those particular positions. You may need to eliminate a single position, or you may have a flow of work that affects parts of many different positions.
What is the next step?
Determine how the remaining work will be done. Once you have considered all the positions that are directly and indirectly affected, then you can look at the individuals in those positions and define the relevant population of employees.
Next, you should consider your selection criteria. This may be based on seniority or ‘last in, first out,’ which is often the easiest and most defensible criteria. On the other hand, you may find this does not meet your business needs because you want to retain your best performers. Many employers then look to performance.
What are the possible mistakes business owners can make during a reduction?
One of the most common mistakes is failing to define your legitimate business reasons before looking at the relevant employee population. You can also have problems if you do not conduct due diligence to make sure your personnel documentation supports your selection criteria.
Additionally, you can run into trouble if you react too quickly or fail to consider alternatives. For example, there are state and federal laws that require prior notice of larger reductions. There are wage and hour laws governing termination payments. You may have contractual obligations based on a union relationship or written policies. If you want to pay severance in exchange for a release of legal claims, special waiver requirements may apply. Lastly, don’t forget that the key to effective rightsizing is retaining the appropriate work force.
How do you make sure company morale remains high despite the downsizing?
Morale is one of the challenges that employers face in rightsizing and downsizing. First, treat your departing employees with dignity and respect. So many lawsuits are filed not because an employer did anything wrong but because of the way the individual was treated at the end of the relationship. Second, poor morale can spread among your remaining employees if you fail to treat employees in a way that is perceived as fair or shroud your business decisions in mystery.
Communication is absolutely essential. What you say may need to be tempered by various laws and individual confidentiality concerns. On the other hand, you should be keeping people in the loop and giving them as much guidance and hope as possible, without making promises. If you’re doing reductions in several different waves, you should communicate when one wave is over and when you expect the next wave will be. In some cases, employers need to consider retention bonuses if there are key employees they really do not want to lose.
How can a decision-maker avoid making mistakes in the reduction process?
Employers need to see downsizing and rightsizing as part of ongoing succession planning. They need to ensure that it is part of their long-term goals.
Because so many reductions are based on performance or skill and ability, it’s key to document and stress performance issues when they arise. If there are performance issues, you should address them. If employees are not meeting your expectations, they should be warned. If they don’t respond to warnings, then they may not be the right employees for those positions. One of the keys to finding your ‘right’ size is to have the ‘right’ people doing the work.
The last way to avoid mistakes is ensuring that you reach out to an expert who understands the many laws that may apply and how these laws intersect and who has the practical experience to understand the many factors at play.
KERRY L. DAVIDSON is an associate in the Labor & Employment Service Group with Levenfeld Pearlstein, LLC. Reach her at (312) 476-7596 or email@example.com.
Prairie City Bakery may be a bakery, but it operates like a traditional manufacturer, doing everything a manufacturer does – from product development to taking that product to market. Bill Skeens, Prairie City’s president, and his team produce more than 65 different bakery items, each made to Prairie City’s specific specifications.
“We are always looking for new ideas and ways to satisfy the customer and always ask ourselves, ‘Is there a better way to do this?’” Skeens says.
Though the company, itself, has a total of 11 employees, Prairie City’s impact on employment goes well beyond that. Last year, the company sold more than $20.5 million in bakery goods that were produced in seven separate bakery operations — primarily in the Midwest and Canada — that employed more than 500 people.
Skeens was named one of 2010 Smart Leader honorees by Smart Business and U.S. Bank. We asked him how he overcomes challenges, innovates and gives back.
Give us an example of a business challenge you and/or your organization faced, as well as how you overcame it.
Three years ago, a major account of ours was looking to develop a private label program in a very short period of time. On a Thursday, we met with their buyers and got specifically what an ideal product line would look like from a quality, packaging and pricing standpoint. The following Friday, we came back with live product, packaging and pricing and laid out 25 alternative products, two different packaging designs and pricing on all items in their conference room.
This was a total company effort involving and coordinating with all of our suppliers, creative packaging designers and financial people to deliver this is just over a week. We were in competition with much larger companies, and because we delivered, we ended up producing 15 of their 18 private label items and continue to deliver on this business today.
In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?
Our people are all empowered to ‘Do what is right for the business.’ When I worked for a large bakery manufacturer, we only sold what we could make, and this often was not what the customer wanted. With the Prairie City Bakery model of outsourcing of manufacturing, this is a huge advantage because we want to sell what the customer wants to buy.
We do not have blinders on that say, ‘This is the only way we can do it.’ We look to solve problems and provide a solution, and then we get our reward of selling the right product that provides us with revenue.
Customers ‘vote’ with their dollars every day, and we are always looking for creative solutions that set us apart, add value and makes customers not only want to buy from us but to recommend us and to be and advocate of Prairie City Bakery.
The Smart Leaders Class of 2010
In October 2010, Smart Business and U.S. Bank recognized 10 business leaders for their commitment to business excellence and the impact their organizations make on the regional community. Treated to a keynote address by Middleby Corp. CEO Selim Bassoul, these 10 leaders comprised the honor roll:
- Jason Beans, founder & president, Rising Medical Solutions
- Dave Brittsan, CEO, DB Aviation
- Joel Fruendt, GM, Clarke Mosquito Control
- Rob Jessup, CEO, Jessup Manufacturing
- Amanda Lannert, President, Jellyvision Lab
- Scott Morey, president and CEO, Morey Corp.
- Larry Neibauer, CEO, CEO Deliveries Co.
- Nancy Ruscheinski, president and COO, Edelman U.S.
- Jim Signorelli, CEO, ESW Partners
- Bill Skeens, President, Prairie City Bakery
The next time you’re feeling a bit blue, don’t call Mitchell Feiger if all you want is to be cheered up.
Feiger is going to tell you the truth about what’s going on — even if that truth is quite bleak.
He’s not doing it to bring you down. In fact, he’ll be sure to put it in the appropriate context for you so that you understand where things have to be done and why. Take his feelings on the problems many businesses have in a down economy: “The mistake that a lot of small or midsized business owners make is they don’t reduce expenses fast enough when sales decline,” says Feiger, who is president and CEO of MB Financial Inc. “I understand, you’ve got a business, you’ve got 42 people working at your company … you know their families and now sales go down 25 percent and you’re losing money and your capital cushion is being eroded, and yet, you don’t want to release people. But they’re your biggest expense, so it’s really important to face reality and protect your company.”
It might be painful, but he says you have to own up to a resolution.
“I don’t think you do anybody a favor by keeping them on the payroll when you can’t afford it,” he says. “That may mean eight people out of that 42 you really can’t afford to have anymore, but if you decide for whatever reason you’re just going to keep them on and hope that something else comes along … well, what you’ve done is you’ve risked the jobs of the other 34 people.”
Partly because of that honesty, Feiger hasn’t had to deal with anything that drastic with his 1,400 employees at MB Financial, the holding company with $8.6 billion in assets that’s parent to MB Financial Bank N.A. MB Financial is holding strong — it reported net income from continuing operations of $15.4 million for 2008 — and Feiger is happy to share all the good and bad with his people. To him, it’s all about managing your company through communications. If you help employees understand where they can help the company, Feiger says they will.
Here are a few tips from Feiger on how to open up candid communications to push your company through good times and bad.
Create multiple touch points
OK, truth time: Have you ever skipped over an e-mail when you were busy? There’s no shame in it, and Feiger knows his people do it from time to time. The fact of the matter is, creating effective communications is more repetition than anything else.
So the next time you think about getting an important message out, consider a product advertisement that caught your attention recently. Feiger says the odds are you didn’t pick it up the first time you heard or saw it.
“To communicate with the most people most effectively, they need to receive the message in different ways,” he says. “A good analogy is multimedia marketing campaigns where you may see a company send a message in the print media and then send the same message on radio, TV, billboards and bus signs all at the same time, and that’s the most effective way to reach an audience.”
So MB Financial thinks like Nike or Pepsi when it has a message. The company uses conference calls, wall posters, an intranet, newsletters, internal e-mails, a company culture committee and an “Ask Mitch” e-mail option where people can send Feiger messages that are personalized or anonymous.
Plus, like any good campaign, MB Financial has a launch point everyone knows about that is short but sweet.
“Every Monday morning at 8:35, everybody in our company who is available is on the phone listening live to a conference call that I usually lead where I can bring everybody up to date,” Feiger says. “And it’s an amazing thing how you can convey so much information in just a 10-minute conference call.”
The call’s brevity is its strength. A brief overview will give people a starting point, and subsequent messages can flesh out details. A regular touch point allows you to be topical and gives you a chance to tie your messages around a theme.
“A lot of times, we’ll talk about things that we’re thinking about before we’ve made the decision so that they can understand where we are in the decision process, and that then makes them make better decisions for themselves and their clients,” Feiger says. “Then, oftentimes, we’ll try to coordinate the messaging that’s coming in those calls in newsletters or e-mails or in posters or in other ways.”
MB Financial has another way that these communications are similar to a marketing campaign: The calls are recorded so that the company can keep track of how many phones tune in live and later to make sure they’re making an impact. Feiger also tests message effectiveness from time to time.
“Every few months each year, I ask people to e-mail me back with some idea or some thought about some subject matter,” he says.
Now, you won’t have the time to sort through 1,400 ideas every time you need to make a decision, but Feiger has his people do it occasionally when he needs a good brainstorming session.
“Having 1,400 people ponder an issue is a powerful thing,” he says. “And if you have an effective way to solicit feedback from 1,400 people, which we do, you can get some really good ideas. It gives me a little bit of real-time feedback about our people listening to the calls — are they taking them seriously, do they consider what we’re talking about? And it’s remarkably effective, and to tell you the truth, I’m not sure why more companies don’t do this.”
Beyond measuring the effectiveness of your communications, you can also help give them a boost by being responsive. If you’re smart, you can address a commonly asked question to everyone at once and help ease some concerns.
“Every single person gets a complete response,” Feiger says of e-mails sent to his Ask Mitch account or responses to internal e-mails. “If somebody brings up something, good or bad, that I think would be of interest to more than just a handful of people, I’ll either talk about it in a Monday morning call or we’ll put in a regular newsletter or we’ll put an answer out on our intranet. I’ll give you an example: A week ago or so, I got an Ask Mitch about the safety of our people’s money in our 401(k) plans. So we responded the end of last week with a lengthy explanation of how we think people should be managing their money in this economic downturn and where they need to be cautious and where they may not need to be cautious.”
Put your message in context
Keeping up communications with your people has a tricky element to it — sometimes you’ll have employees reaching for antacid rather than calming their fears. But good, bad or indifferent, your people need to have the ability to properly place what you’re telling them.
“Look, sometimes by being honest with the staff, you can raise their level of worry,” Feiger says. “I think what you want them to have is an appropriate, realistic amount of worry, not an unrealistic one. In the absence of communication, people would fear the worst or worse than the worst, and we want them to understand what reality is. So I can’t say that we’ve lessened their anxiety, I think some days I’ve increased their anxiety.”
But while he admits to occasionally creating anxieties, he always does so in an appropriate context. He doesn’t just say things are bad in a market and the company is hurting when business is down, and he doesn’t say just the opposite when things are up.
“My general feeling is the more they can understand about what we do, the better,” he says. “Even in a public company, probably 99.9 percent — or 99.99 percent — of what I know and what the senior management knows, the rest of the company can know and probably should know. A lot of companies think that only the senior management team is capable of understanding things that are going on and making decisions; I feel the opposite. I feel that virtually everybody in this company is capable of understanding what we’re doing and why, and so the more they know, the better informed they are, the closer they feel to the company, the better they can understand when we make hard decisions why we’re making them. And I think frankly it gives people more confidence that the management team here at least has some idea that they know what they’re doing.”
And even though Feiger leads most of those Monday calls, he also brings in the appropriate experts and asks them to deliver commentary on things like the market, the company’s competitors and where they are against the yearly plan.
“Once a quarter, our chief financial officer, Jill York, leads the call to report to our employees about our performance,” he says. “And there will be times when we’re explaining a particular financial issue that she’ll dig down a little deeper and explain here’s how this works and why and its impact on us. Through those calls, I think we’re able to elevate the general level of financial intelligence or banking intelligence that our people have.”
Besides giving an overview of where the company is financially, Feiger thinks it’s important to put in place the context of competitors and the market. Talking about where you are gives your employees some context, but measuring it against your top competition shows people your highest and lowest point while also helping them see where the company can take advantage in any kind of market.
“The more knowledgeable they can be about our competitors and how they’re doing or what their weaknesses are or what our competitors are trying to accomplish, the better armed they are when they go to battle against those competitors for a client — be it a current client or a prospect,” Feiger says.
And whatever your message is, make sure you mark the beginning and end dates appropriately. Don’t just tell employees one thing is important for a quarter and then never go back and celebrate your success or comment on your failures.
“We tell it the way it is pretty much in any report that we give about our company, quarterly report or otherwise; we say, ‘Look, it typically goes like this in a quarter. Here’s how much money we made, here’s why, here’s the things we did well in the quarter, here’s the things we didn’t do so well in the quarter,’” Feiger says. “For example, in 2008, one of our high-level goals was to increase low-cost funding, low-cost deposits. So we report back to them, here’s how we did, and in the third quarter, we did incredibly well, and they were very interested in knowing about that.”
To Feiger, having all of his people understanding where the company is going, what challenges it’s facing and how it’s going to face those challenges is the foundation to keeping a company that can maintain in any economy.
“My thing is, the front-line people, they make more decisions than anybody else for our clients and the better that they can understand what we’re trying to accomplish as a group, as a company, the better decisions they’re able to make. So we’ve sent a very strong message that what we’re interested in doing is building a premier banking franchise here in Chicago. … I think that’s worked out pretty well,” he says. “The client base here is absolutely top flight, really strong companies, really good businesspeople and really good individual customers, as well, and a lot of that has to do with just trying to play it down the middle in good times and bad.”
In January of 2009, more than 560,000 U.S. jobs were slashed. Companies in nearly every industry have had to cut back on labor costs, typically their most expensive line item. But when remaining employees are stretched to their limit, it soon becomes clear to management that, even in a downsized company, the work still needs to be performed by someone with the right skill set. For many businesses, temporary employees are the answer to cutting costs without hurting the bottom line.
“During this downturn, many large companies are turning to staffing firms for temporary workers,” says Rob Wilson, president of Employco Group, a division of The Wilson Companies. “They’re supplementing their work force without the additional cost of benefits and other expenses that go along with permanent employees.”
Smart Business asked Wilson about the advantages of working with a staffing firm to bring in temporary workers in tough times.
Is now a good time to partner with a staffing firm?
Absolutely. The market has changed and so has the temporary staffing trend. For example, Carlisle Staffing, a division of The Wilson Companies, does a fair amount of temporary placement for myriad companies in the traditional sense of cyclical work; if a warehouse has an influx of goods and now needs extra employees that is a short-term fix. But what we’ve been seeing quite a bit in this economic environment are publicly traded companies and other large privately held national companies working with staffing firms after layoffs. Once they save through trimming wages and eliminating the vacation time, holiday pay, sick time, health insurance and 401(k) match expenses that go along with those employees, they often find that they have eliminated too many jobs to function efficiently. Savvy companies are turning to staffing firms to fill the gap.
Besides the reduction in benefits expenses, what are other advantages of using temporary staff?
You get a lot more flexibility with a temporary employee do you need the person 30 hours a week or 50? You couldn’t really do that with your employee base before. When working with a staffing firm, if you don’t like the person sent to you, you can just call for a replacement and continue to do so until you find the perfect match for the position.
There are many quality people in this market who are willing to work for less than their previous salary. In some cases, you many end up hiring your old employees back through the agency on a temporary basis, but this time without the added costs for vacation time or benefits. There is always the option to rehire them back as permanent employees when your company is in the financial position to do so.
How else can staffing firms save time and money?
Hiring an employee at $16 an hour from a staffing firm with a 40 percent mark-up would end up costing around $22.40 an hour or $44,800 for a 50-week year at 40 hours a week without paid holidays or vacation. If a company were to hire that same employee on its own, after adding in taxes, workers’ compensation premiums, FICA, health insurance and other employee costs, that $16 becomes $19.20, which is $44,936 a year. Even though it might appear to be more cost-effective to hire the individual on your own, consider the fact that you now also have flexibility on the number of hours worked per week. In such a competitive market the person who wanted $16 an hour might work for $15 instead temporary employees become part of a cost-effective strategy.
In addition, since the staffing firm handles all the recruiting and interviewing, those expenses can be eliminated and you are provided with multiple candidates from which you can select the most qualified. Further, if a temp doesn’t report for work, you can just call the agency for a same-day replacement, which results in minimal lost time. If you are pleased with the employee but can’t afford to hire him or her until the market recovers, chances are by then the employee has been with you through the agency long enough that the conversion fee is either waived or very minimal.
Staffing firms will also handle I-9 immigration requirements as well as all other compliance issues. Where most firms only require two forms of ID, reputable staffing firms will require three forms of ID and absorb all the costs associated with background checks and drug testing, if required by the client.
Is there a downside of using temporary employees?
Companies should make sure to check the agency’s references and make sure it provides quality employees for their job assignments. A staffing firm should test all prospective employees and, especially in this marketplace, look for workers’ comp fraud and other areas of potential fraud. In the case of the workers’ comp claim, you have to pay temp employees as if they were full-time-like employees. So you want to make sure the staffing firm has a good recruiting department, and that it has proper insurance coverage.
ROB WILSON is president of The Wilson Companies, which handles human resources outsourcing, staffing and insurance for 400 small and medium-sized Midwest companies. Reach him at (630) 286-7345 or firstname.lastname@example.org.
The employees of Navman Wireless North America are spread out all over the country, which can make communicating with them a challenge. So, Renaat ver Eecke, general manager of the North American division, which employs about 50 people, has to do a lot of traveling to stay in touch, but he says it’s worth it because that type of communication is so important.
“I lead a lot by being there, going out, understanding what the challenges are from the distributors and really making sure that I consistently say the same message from a communications standpoint, not only internally but externally,” he says.
Smart Business spoke with ver Eecke about how to communicate effectively in a growing company.
Q. How can a leader consistently communicate when employees are widespread?
One of the things I did and it gets a little bit more challenging as you grow because the ability to do it as frequently as you want becomes more challenging but if you’re in a smaller company and you’re just starting to lead, I think giving monthly updates.
When I first started taking over the U.S. business, I did monthly updates for the entire team.
It was an all-hands meeting. I talked a lot about, ‘Here’s how we are from a revenue perspective. Here’s what we’re doing. Here’s why we are trying to grow these things.’ Any major changes that were coming up, I would communicate why we are doing it. Because, in my opinion, the things that confuse organizations are not that changes are being made or that ‘this’ is coming, it’s ‘why’ that people don’t address very well.
There was a lot of remote stuff. So, we used the latest technology to empower everyone to be on the same page.
Every single person that reported in to the organization had to be on this call, and they knew it even the salespeople.
I said, ‘Look, when is the best time where you are normally at home? It’s not going to disrupt sales.’
They knew it every month. They had to block off (that time).
They wouldn’t make appointments there. I found it very effective on keeping everyone on the same page. As the business has grown here, I do that, but I now do that on a quarterly basis. I don’t do it monthly. I do a communications out via e-mail monthly, then I do an all-hands quarterly meeting.
Q. How did you deal with the challenge of transitioning from monthly meetings to quarterly meetings?
Again, I think this is where you’ve got to get out. For me, I find if you get out of your office and go talk to people all the time I do that, even within my office, in the different parts of the business within my office, twice a day.
I heard from them. They were asking, ‘I really liked the monthly updates. Getting it through an e-mail doesn’t necessarily give us a chance to do Q and A. So, I took the opportunity for the next quarterly meeting to talk about why we made that transition. Again, and this goes back to my thoughts on, it’s not necessarily that you’re doing it; it’s much more important to talk about why you are doing things.
I just communicated that, ‘We are getting really big. The ability to coordinate and take out the time every month is impacting particularly our sales organization.’
Q. What is a pitfall to avoid when trying to be a good communicator?
Disengaged leadership is something everyone talks about, but it’s really easy to fall in to the pitfalls of just staying in your office.
It seems so obvious, but you can get bogged down in reports and, ‘Hey, I need to send this to our board,’ or, ‘I need to fill out this,’ or, ‘I need to do this analysis.’ There are only so many hours in a given day where your people are there and the business is really humming to get to understand what are the problems of the business. The biggest pitfall is people staying in their office.
They don’t engage in their different departments and walk around and really hear what the problems are and talk to people who are perhaps two or three levels below and engage them. That is something that I’ve heard from everyone that works in my organization as something that they really like about my style.
I think it brings a real understanding of problems. So, when the problems come to you, you don’t just throw them out as, ‘Hey, that’s not that big of a problem.’
You will have heard it and already identified it. So, it might be something that you, again, discuss in the quarterly actions. So, these things all fit in to a nice plan and process that can evolve over time.
HOW TO REACH: Navman Wireless North America, (847) 832-2367 or www.navmanwireless.com
Given the ever-growing requirements, expectations and demands among today’s logistics shoppers, customer service has become much more than merely scheduling a pickup, expediting a shipment across the country or rerouting the delivery of your customer’s commodities on a moment’s notice.
Its link to logistics can best be defined by proactive communication — keeping customers constantly apprised of shipment time-lines, status updates, service options and transit times. Exercising effective communication practices also means ensuring that you are notifying customers of any potential service failures or delays before they are informed by their own customer or consignee.
“Engaging in a detailed discussion with customers about their cost parameters, delivery requirements and commodity considerations is a critical component in defining customer service,” says Jim Couch, customer service manager for AIT Worldwide Logistics. “Not only does this dialogue demonstrate how much you value their business, but probing them about their needs also drastically minimizes any potential pitfalls in forecasting and designing their transportation plan. What do they need, how do they need it and when? The more you know about your customer and his or her various logistics needs, the more your relationship is respected and valued.”
Smart Business sat down with Couch to discuss how customer service practices can make or break your logistics business.
Describe key concepts related to customer service and the overall logistics organization.
One of the most pivotal concepts involves communication integration within the entire organization. Internal information flow is equally as crucial as external information flow. All departments — operations, claims, sales, finance and marketing — must function as one cohesive unit in order to accurately, efficiently and consistently update all internal operating systems. Customer service levels have an incremental impact on your company’s overall revenue, logistics costs and profitability.
Regardless of our job descriptions and titles, every single aspect of a transportation and logistics company involves some fundamental element of customer service. The sales pitch within our industry doesn’t involve a tangible product; instead, we are selling our service excellence in transporting commodities along the global supply chain. Our goal is ultimately the same: to collectively develop flexible, comprehensive and well-crafted logistical solutions that satisfy the needs and expectations of our customers, vendors and partners.
The mantra I frequently use with my team is, ‘If we don’t service the customer, someone else will.’ In essence, customer service has got to be the No. 1 competitive point of differentiation for your business.
Describe the positive and negative impact a customer service representative has throughout the life cycle of a shipment.
Your team has the entire impact on a customer experience — more often than not, the power to keep customers coming back lies in your employees’ hands. In speaking with customers on a daily basis, you are essentially attaching a familiar voice to your corporate identity and personalizing your company’s marketing brand. Therefore, it is absolutely critical to maintain a proactive, polite, friendly and can-do attitude. Engage in a little personal chitchat — ask them about their holidays or weekends. Remove the word ‘can’t’ from your vocabulary — instead, tell the customer the very best you can do for him or her.
Making assumptions frequently leads to making mistakes. For instance, assuming that your partner’s shipping facility closes at 5 p.m. when it really closes at 3:30 p.m. — you have just missed out on the delivery date that was originally promised to the customer.
Your treatment and follow-through with customers in damage control or crisis situations is also a determining factor on whether or not their experience is a positive one. If their commodities are delayed at origin or sitting on a warehouse dock somewhere, notify them immediately. Be straightforward and honest. Offer multiple alternative delivery options and give them the decision-making power to determine the next course of action.
How can customer service performance be measured?
I strongly feel that because this is a teachable business, there is not a direct correlation between our industry and education — just because a particular candidate holds a college degree in logistics doesn’t mean he or she is the most qualified person for the job.
Train and empower intelligent, hardworking and outgoing self-starters to do the job and to do it well. If you find yourself in a position where you are constantly monitoring their progress, spot-checking their quotes, micromanaging their desks or operating with an ‘iron fist,’ so to speak, it ultimately becomes a reflection on your job and not theirs.
I have discovered that the most effective way to motivate and encourage employees to excel and find a sense of value in their jobs is by operating under the adage, ‘Praise publicly, reprimand privately.’
JIM COUCH is the customer service manager for AIT Worldwide Logistics, Inc., headquartered in Itasca, Ill. Spanning numerous nationwide locations and an ever-increasing network of international partnerships, the global transportation and logistics provider delivers tailored solutions for a wide variety of vertical markets and industries. Reach him at email@example.com or (800) 669-4AIT.
If you have a business method patent or want to apply for one, you need to know about Bilski. The U.S. Court of Appeals for the Federal Circuit’s decision in this recent case could have a major impact on your patent.
“Not only has the standard changed for obtaining a business method patent, but the standard for determining the validity of existing business method patents also has changed,” says Marc E. Fineman, partner in the Intellectual Property Service Group at Levenfeld Pearlstein, LLC.
Smart Business asked Fineman about the theory behind business method patents, the recent Bilski ruling and how you can protect your business methods today.
Historically, what has been the scope of business method patents?
The U.S. Patent and Trademark Office (PTO) generally classifies business methods as ‘data processing: financial, business practice, management or cost/price determination.’ While the PTO has suggested that business method patents have existed for as long as the patent system itself, business method patents as we know them today really got their start with the explosion of computer technology and the Internet. Today’s business method patents often cover new types of e-commerce, insurance, banking or tax-related inventions, and they typically include the use of a computer to accomplish at least one of a series of steps in a process.
How has computer technology influenced these patents?
In the 1980s and 1990s, the growth of computer technology and the Internet resulted in patent applicants seeking protection for new methods of doing business involving the use of computers and/or the Internet. As the PTO began issuing more and more patents protecting these business method innovations, the courts were soon full of cases challenging these patents.
The case that really opened the floodgate for business method patents was the 1998 decision of the U.S. Court of Appeals for the Federal Circuit in State Street Bank v. Signature Financial Group. In this case, the court confirmed that methods of doing business are patentable subject matter if they produce a ‘useful, concrete and tangible result.’ This created a large increase in business method patent applications filed with, and issued by, the PTO. Some of the more notable patents issued around this time were Amazon.com’s ‘1-click’ patent and Priceline’s reverse (Dutch) auction patent.
What was the Bilski decision, and how could it impact future litigation?
On Oct. 30, 2008, the U.S. Court of Appeals for the Federal Circuit issued its long-awaited en banc decision in re Bilski, regarding a process of hedging risk in commodities trading. In the Bilski case, the Federal Circuit affirmed the decision of the Board of Patent Appeals and Interferences, finding that Bilski’s claimed invention did not qualify as patentable subject matter.
In its decision, the court established a new ‘machine-or-transformation’ test for the patentability of processes, including business methods. Under this test, ‘a claimed process is surely patent-eligible under §101 [of the Patent Act] if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.’ Bilski’s business method claim failed this test.
In adopting the ‘machine-or-transformation test,’ the Federal Circuit explicitly held that the ‘useful, concrete and tangible result’ test from State Street Bank was inadequate and should no longer be used. Importantly, the Federal Circuit made clear that business methods are still patentable. However, it is not yet clear what type of ‘particular machine or apparatus’ will satisfy the test or whether transformations of certain types of data will qualify as ‘transform[ing] a particular article into a different state or thing.’ Therefore, it will be months, and perhaps years, before we know the full impact of the Bilski decision, especially if an appeal is filed with the U.S. Supreme Court.
In light of these rulings, what should businesses do now?
The most important thing to realize about the Bilski case is that it does not eliminate or overrule patent protection for business methods. Instead, the Bilski case provides some guidance on what types of business methods are protectable under the patent laws and, implicitly, how patent applications should be written to obtain such protection.
Therefore, it is as important as ever for businesses to invest the time and resources into properly identifying and protecting their innovations. Businesses should work with their patent counsel to write policies and procedures and to develop training sessions to help employees identify and report intellectual property they may create.
Patent experts can also provide guidance in developing new business methods, assessing the validity of third-party business method patents, and reviewing current patent portfolios in light of the new standards set in the Bilski case. Businesses may need to consider filing reissue and/or continuation applications, particularly with respect to any patents that might be enforced in the short term.
MARC E. FINEMAN is a partner in the Intellectual Property Service Group at Levenfeld Pearlstein, LLC. Reach him at (312) 476-7558 or firstname.lastname@example.org.
Born: California. I lived there for about four months. My father was in the Marine Corps, so I moved around a lot, but most of my life was spent in Virginia. I consider myself a Virginian.
Education: Bachelor’s degree, George Mason University; MBA, Duke University’s School of Business
Very first job: Either mowing lawns or delivering newspapers
Whom do you admire most?
One of the guys, having spent a lot of time in the U.K., is Richard Branson. The reason I admire him is he’s very creative, innovative, and he doesn’t take no for an answer. And he uses every failure as a steppingstone for where he wants to be.
Kelly on continuing recruiting during hard times: There’s a lot of uncertainty out there, and you have a lot of organizations not willing to spend the resources on recruiting because they’re worried about increasing their cost base, which I view as a complete mistake. The successful organizations going forward, and those who are going to make money, are those that use this as the once-in-a-lifetime recruiting opportunity that it is, and there are already organizations saying this is fantastic, I can get individuals right now to move fro m firms. Everyone’s stock is down, so it’s not like you have to pay millions of dollars in unvested stock options. So you have the ability to attract talent you otherwise wouldn’t be able to. Not looking at this as an opportunity would be one mistake.
If you could be one superhero, who would you be and why?
Flash, because I think he can get around the globe much faster than I could on an airplane and probably not have the jet lag.
More Kelly: Kelly is the author of the book “CEO: The Low Down on the Top Job,” published in 2008.
Change is coming. Both a change in the presidency and a change in tax laws add urgency to estate planning.
If you don’t take action now, you could miss out on millions of dollars of exemptions.
“In this turbulent financial environment, it is important for our new President and Congress to address estate tax legislation and play a vital role in stabilizing the estate-planning world,” says Sheri Warsh, partner in the Asset Planning & Preservation Service Group at Levenfeld Pearlstein, LLC.
Smart Business asked Warsh what changes to expect and how to protect assets now.
What’s the current status of estate tax legislation?
In 2001, Congress passed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which established gradually increasing exemption amounts while simultaneously reducing the estate tax rates through 2009. In 2009, the exemption will rise to its highest level at $3.5 million with a maximum 45 percent tax rate. In 2010, the estate tax will be repealed. Without congressional action to reform the existing estate tax laws or make the estate tax cuts permanent, in 2011, the estate tax scheme will revert back to the 2001 levels of a $1 million exemption and a top tax rate of 55 percent.
What kind of exemption and tax rate changes could happen under the Obama administration?
During Obama’s campaign, he proposed freezing the estate tax exemption and rate at 2009 levels. His proposal sets the exemption at $3.5 million per person or $7 million per couple with a corresponding tax rate of 45 percent. This would result in about 8,000 estates per year owing taxes, or the equivalent of a mere .3 percent of all descendants.
Portability of the exemption between spouses is another area of contemplated change by the Obama administration. Under the current law, when one spouse dies without having used the estate tax exemption, it is lost and cannot be used by the surviving spouse. The proposals would allow a spouse to transfer his or her exemption amount to the surviving spouse without setting up trusts to shelter the exemption amount. This could drastically change how estate-planning documents are currently drafted.
What are potential changes in permissible legal structures?
A Democratic-controlled White House and Congress, coupled with the current economic climate, have caused rumblings of additional estate tax reforms. One such change limits the availability of family limited partnerships and limited liability companies as a method of gifting assets to younger generations at discounted values. Another possible modification is the elimination of the zeroed-out Grantor Retained Annuity Trust (GRAT), which allows an individual to transfer assets to a trust without a resulting gift while receiving an annuity for a fixed number of years. Legislation could mandate a taxable gift upon creation of a GRAT equal to percentage of the assets gifted to the trust. One last rumored reform is restricting or abolishing the use of split interest charitable gifts. A split interest charitable gift allows an individual to make a gift today, while retaining an interest in the property and receiving immediate and longer-term tax benefits.
How soon could these laws come into effect?
It is possible that major tax legislation will not be introduced until the second half of 2009 or even 2010. However, if Obama does not want to let the estate tax be repealed as scheduled in 2010 or allow the estate tax regime to revert to a $1 million exemption and 55 percent tax rate, tax reform will need to be addressed by the end of 2009.
What legal strategies can help safeguard assets?
I recommend taking these actions as soon as possible:
? Take full advantage of both spouses’ estate tax exemptions through the use of available credit exemption and marital deduction planning.
? Maximize the use of the $13,000 annual gift tax exclusion. This allows all taxpayers to give $13,000 ($26,000, if married with spousal consent) per donee. You can have an unlimited number of donees, and they don’t have to be relatives.
? Make gifts on behalf of any individual for education or medical care. These payments, as long as paid directly to the service provider or educational institution, are unlimited and do not reduce your gift tax annual exclusion or estate tax exemption amount.
? Establish a GRAT, especially in light of today’s low interest rates.
? Utilize family limited partnerships and limited liability companies to manage family wealth and sell or gift interests to take advantage of valuation discounts.
? Set up an irrevocable life insurance trust to provide liquidity to pay estate taxes.
? Establish charitable remainder trusts or charitable lead trusts.
SHERI WARSH is a partner in the Asset Planning & Preservation Service Group at Levenfeld Pearlstein, LLC. Reach her at email@example.com or (312) 476-7513.