One of the primary functions of management is to understand what is actually going on in an organization, as opposed to what is supposed to be happening. However, for monitoring to be truly effective, there must first be good communication, a culture that promotes ethical behavior and a solid understanding of the particular organization’s risk factors.
“Organizational monitoring is not just about protecting a company from fraud,” says James P. Martin, CMA, CIA, CFE, managing director at Cendrowski Corporate Advisors LLC. “Monitoring systems can help ensure quality, that customer needs are being met and that the company is doing everything else that is necessary to achieve its goals.”
Smart Business spoke with Martin about how management can understand what is truly going on within the business.
What are the steps to an effective organizational monitoring plan?
First, the company must clearly define its goals. What is it trying to accomplish and how will it accomplish those goals? Second, what risks does it face? What can get in the way of the company accomplishing those goals? Third, what type of early warning system does the company need? How will it know if and when a risk has occurred or if someone has not performed as expected?
What impacts are electronic monitoring systems having?
Electronic monitoring systems have been around awhile but are drawing increased attention now with more severe penalties and potential outcomes for violations under Sarbanes-Oxley. Electronic monitoring systems are similar to a car’s dashboard. When trigger points, predefined events or hurdles are detected, ‘warning lights’ appear on the manager’s desktop.
While electronic monitoring is useful, it cannot — and should not — replace human involvement. The most important thing managers can do is be involved with operations on a day-to-day basis by walking around and talking with employees, holding regular meetings, receiving regular reports and phone calls, etc.
How are trigger points identified?
An organizational assessment of risk will help management identify areas that have more robust monitoring needs. Examples might include finance, everything related to potential issues arising with cash, or vendor management, such as notification every time a vendor’s address changes. Triggers also can monitor quality metrics, supply chain issues, personnel issues, etc. The system should be proactive so that management can address issues before they get out of control, preventing a crisis management situation.
It’s important to note that a monitoring system is more holistic than the definition of trigger points. The single biggest factor is people — what they will do in a given situation. The overall culture needs good communication systems and a clear understanding of management expectations.
Monitoring techniques need to continuously adapt to consider potential changes in behavior. There are a lot of examples of companies that had defined monitoring procedures, but creative people were able to identify and exploit areas that were not considered in those procedures.
How do private equity firms monitor the activities of the companies they invest in?
Private equity firms have to monitor the operations of the portfolio companies, not to the extent of detail that internal management does, but they do need to define risk. These companies have expectations, and if they identify certain events on the horizon, they can be prepared to take certain actions. Like the companies they monitor, private equity firms also must define their own particular trigger points.
Any tips for improving a system?
Make sure you’re monitoring the right areas. There may be areas you’ve historically monitored that have now changed, which is where the internal audit function comes in. The board’s audit committee must understand what is critical for the upcoming year. In examining the ‘audit universe’ — the model that defines every auditable event within the organization — areas of risk are identified, and then prioritized for audit. It's management’s responsibility to determine how many resources to invest in each given area of risk.
James P. Martin, CMA, CIA, CFE is managing director at Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or email@example.com.
Insights Accounting is brought to you by Cendrowski Corporate Advisors LLC
When you go to the dictionary to look for the definition of focus, you will see such lofty things as:
“the point where the geometrical lines or their prolongations conforming to the rays diverging from or converging toward another point intersect and give rise to an image after reflection by a mirror or refraction by a lens or optical system.”
“a point at which rays (as of light, heat, or sound) converge or from which they diverge or appear to diverge.”
Luckily, for those of us that are not physicists, I did find one definition that makes sense when trying to understand the meaning of focus:
“a point of concentration or directed attention.”
What do you concentrate on the most with your business? Where do you direct your attention? These are the questions of focus. Over the years in my coaching and speaking, I have found them to be of utmost importance to the success of those in the workplace.
Let's look at 5 tips for improving your focus as a busy professional.
1. Stop doing what you are doing.
If you struggle with focus on a daily basis and you continue to think and act in the same manner – you need to stop and stop right now.
The quote that is often attributed to Albert Einstein speaks to us here: “Insanity is doing the same thing over and over again and expecting different results.”
Stop. Breathe. Assess. Evaluate.
This leads us to our second tip.
2. Determine what needs your concentration and attention.
In the workplace, too many people “fly by the seat of their pants” when it comes to what needs to get done. In most instances, it is pure laziness that sustains this way of doing things. It takes work to stay focused and be successful.
As I said above, you will need to assess and evaluate in order to determine what needs your directed attention. Hopefully you have goals in place for yourself and your team. Let those goals be the defining line for your focus.
This leads us to our third tip for improving your focus as a busy professional.
3. Clear all unnecessary distractions.
Once you have determined the areas and actions that need your concentration, it is time to laser target your focus. In order to do this, you must clear away anything that would disrupt, distract or lessen your laser focus.
- Cell phones
- Social Media
- Instant Messaging
- Tasks that could be delegated
Make a list of all the things that you must stop doing in order to stay focused. This is the opposite of the normal to-do list. It will make clear what needs to be cut out from your daily routine.
Some distractions are going to be hard to give up because they have imbedded themselves as habits – and habits take time to change. Development of laser-targeted focus does not happen overnight, but it must be practiced daily in order to achieve its mastery.
4. Work in 60- to 90-minute blocks of time and provide yourself a reward.
Do not expect too much from your focus. Saying that you are going “to work until it's done” is an overload for most of us. It is also too vague and not goal-oriented.
Set aside a specific amount of time for a designated task. Studies have shown that we do well when we block off 60- or 90- minute time frames. This allows you to see the light at the end of the tunnel and know that a break is coming.
As we work, our alertness drops off, increasing the lure of distractions. Set a timer and take a break at the end of each cycle.
How about a reward? We all like rewards in one form or another – even if we are the one giving the reward. Say to yourself, “After this 90 minute session of work I am going to take a 10 minute break and walk around the building.”
Other possible rewards are:
- A snack (be careful not to overindulge and get sleepy)
- Text messaging
- Fresh air
5. Learn to say no.
I mentioned delegated tasks earlier. Many busy professionals struggle with delegation. We tend to hold the old attitude of“if you want something done right, do it yourself.”This might be true in the here and now, but in the long run it will lead to lack of focus and, ultimately, exhaustion.
Learning to delegate is a form of learning to say no. “No, not me, not now.” When we learn to say no, we are truly saying yes to our focus.
There are many other tips that one can use to stay focused. These are the five that I have found to be the most useful. Take the time today to try one, two or all of them. Your goals deserve your focus. Your team deserves your focus. You deserve it as well.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” Contact her via email at firstname.lastname@example.org or visit her website at www.delorespressley.com.
The ultimate endgame in any marketing strategy is conversion.
While conversion means different things to different industry sectors, the actions of reaching conversion are universal. In retail, for example, it means searching for and buying a specific product online or in a store. In business-to-business, conversion could be when a prospective client reaches out with their contact information or and requests more information to engage with your services.
Conversion is a multitiered journey that consists of navigating through three steps — awareness, interest and engagement.
Awareness, essentially developing a brand message that resonates across all channels (such as Web, offline, print, mobile and video) is relatively straightforward if you have the proper brand strategy. You must define two things: who you are and what it is you’re trying to say.
However, converting awareness into interest, and eventually engagement, is where organizations most often lose their way.
I personally see this problem regularly manifest itself during a review of an organization’s website. Often, there are too many words and screens of text to sift through, and those words are either clichés or don’t really mean anything to the organization’s prospective — or current — clients.
The bottom line: The organization gained my awareness but lost my interest. Conversion is less likely a potential outcome.
This, however, is easily solvable.
One way to turn awareness into interest is by creating more consumable content, which is defined as providing, in a simple and nonoverwhelming way, the key points that will grab someone’s attention to learn more about what you do and what you offer.
Think of it this way: Develop clean, concise copy that clearly defines what you do and why you’re different from the competition and that articulates your value proposition, without being wordy. You should not have to scroll down more than one time on a Web page to accomplish this goal.
When you look at traditional advertising, the same problem exists. Review your current ads and ask yourself these questions: Are you running an ad that truly reflects your brand? Does it articulate your intended message and your brand through a series of a few choice words? And is there a defined call to action?
Now consider how you’re messaging to your prospects live, such as through your organization’s presence at trade shows.
At your booth, are you presenting a video reel that drones on for five or 10 minutes and includes every aspect of your company? Why waste a lot of money producing a corporate video that is too long, boring and that no one will watch? You will never see an ROI for your efforts.
Instead, determine whether you can develop a short experience at your booth that captures your desired audience’s attention. For example, combine a simple one-page handout with a brief video — no more than a minute long — that uses powerful imagery, focused messaging on your differentiators and a series of client icons that demonstrate who you work with.
You can always expand upon that brief overview video through a series of short complementary videos that are focused and highlight different segments of what your organization does and how it does it.
Let your prospect choose which area of your business he or she is interested in and wants to learn more about — whether it’s through your website, in print or in person. When someone chooses to learn more, it’s a safe bet that he or she is engaged.
The initial goal of all of this should be to generate interest rather than make a sale. The time for conversion is later, but you’ll never get there if you don’t generate interest and engagement first.
Dave Fazekas is vice president of digital marketing for Smart Business Network. Reach him at email@example.com or (440) 250-7056.
What if the leaders at IBM had stuck to making punch card equipment? What if after making the transition to the personal computer market, they had stayed entrenched there?
Punch card equipment is long gone, and with recent PC sales numbers significantly in decline, the leaders of IBM have stayed ahead of monumental changes in the market and kept the company moving forward for decades.
An open mind.
Too often, CEOs place self-imposed limitations on themselves, both in business and personally. The status quo becomes acceptable and new ideas become verboten. When this happens, growth is stifled — a dangerous situation. Many business gurus will tell you that you are either growing or dying. A stagnant company sees itself as not losing ground, but as its competitors move forward, its relative position in the market fades, even though it views itself as standing firm.
The only way to avoid this is to keep an open mind. CEOs need to constantly grow and learn from a personal perspective — so they constantly improve their leadership and people skills — and also from a business perspective — so new ideas are allowed to push the organization forward.
While there are many approaches to keeping an open mind, here are three ways to get started.
- Embrace trial-and-error. Finding success might require experiencing a dozen failures. Whether it’s a new way of running a meeting or trying to find the next innovative product, accept the fact that success has a cost. Don’t eliminate an idea because it goes against what the company has always done.
- Seek knowledge. As a professional, a CEO should never stop learning. There should always be a curiosity about your industry that drives you to seek an understanding of the latest trends and strategies, but you should be constantly looking at other industries as well. Often, best practices in one industry can be applied to another. If you are the first to make the move, it will give you an advantage over the competition.
- Find a mentor. The right mentor can make you aware of your blind spots. Without someone to offer a different perspective, it is easy to fall into familiar ways of thinking, thus stifling the chance of new ideas taking root.
The longer a CEO runs a business, the easier it is to fall into the trap of doing what worked yesterday or last week. When this goes on long enough, the business ends up with an overall strategy that is several years old.
You would never say, “Let’s use the same strategy we developed five years ago,” but because of a closed mind, that’s what ends up happening by default.
Be vigilant about your search for knowledge. In the end, it will make you a better leader and improve your company’s chances for success.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.
When you flip a light switch, turn on the water or start your car, you expect reliability every time. For employees, it’s just as mandatory that they be reliable, by showing up on time, completing the tasks at hand and basically doing their jobs time and time again.
By the same token, your employees expect you, as their leader, to be reliable. This means when you say you’ll do something, you do it, when they need direction, you provide it, and when the chips are down, you’ll be there for them.
Being reliable is good, but being too predictable — not always. In fact, being too conventional can make your company a “me, too” organization that only reacts to what the competition does, rather than taking the lead. It can be a bit more daring to set the trend, but if managed and controlled correctly, the rewards dramatically outweigh the risks.
Warning signs that your leadership has become too predictable occur when your subordinates begin finishing your sentences and know what you will think and say before you utter that first word on just about every topic. Compounding the problem is when your employees begin to perpetuate the negative effect of you being so darn predicable by believing it themselves and telling others, “Don’t even think about that; there’s no point bringing up your idea about X, Y or Z because the boss will shoot you down before you take your next breath.” This bridles creativity and stifles people’s thinking and stretching for new ideas.
It’s human nature for subordinates to want to please the chief. Under the right circumstances, that can be good, particularly if you are the chief. But it can be a very bad thing if you are looking for fresh concepts that have never before been run up the flagpole.
Uniqueness is the foundation of innovation and the catalyst for breaking new ground. George Bernard Shaw, the noted Irish playwright and co-founder of the London School of Economics, characterized innovation best when he wrote: “Some look at things that are and ask why. I dream of things that never were and ask why not?”
The “why not” portion of this quote is the lifeblood of every organization. A status quo attitude can ultimately do a company in, as it will just be a matter of time until somebody finds a better way.
As a leader, the first step in motivating people to reach higher is to dispel the image that you’re exclusively a predictable, same-old, same-old type of executive who wants things a certain way every time. There are dozens of signals that a boss can give to alter a long-standing image and dispel entrenched mindsets. You can always have a midlife crisis and show up at work in a Porsche or Ferrari instead of your unremarkable Buick. This flash of flamboyance will certainly get people questioning what they thought was sacrosanct about you. The cool car might also be a lot of fun; however, the theatrics might be a bit over the top for some, not to mention a costly stage prop just to send a message.
A better solution is to begin modifying how you interface with your team, how you answer inquiries from them and, most importantly, how to ask open-ended questions that are not your typical, “How do we do this or that?”
Another technique is when somebody begins to answer your question, before you’ve finished asking, particularly in a meeting, abruptly interrupt the person. Next, throw him off guard by stating, “don’t tell us what we already know.” Instead, assert that you’re looking for ideas about how to reinvent whatever it is you want reinvented or improved in giant steps as opposed to evolutionary baby steps. If you’re feeling particularly bold, for emphasis, try abruptly just getting up and walking out of the meeting. In short order, your associates will start thinking differently. They’ll cease providing you with the answers they think you want. Some players will hate the new you, but the good ones will rise to the occasion and sharpen their games.
If you want reliability, flip the light switch. To jump-start innovation, you could begin driving that head-turning sports car. Better yet, get your team thinking by how you ask and answer questions and by not always being 100 percent predictable but always reliable.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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The enterprise risk management process helps businesses identify hidden dangers. If used correctly, it could also uncover opportunity. James P. Martin, managing director for Cendrowski Corporate Advisors LLC, shares how risk management is beneficial.
Q. How might risk affect company value?
A. Risks are uncertainties in the business environment. Alone, they do not degrade a company’s value. Degradation of value often comes from management making poor decisions based on incomplete or erroneous information. Sometimes, this is from long-standing assumptions about the business or the competitive environment that are not founded in fact.
The objective of enterprise risk management is to engage the entire organization in a continuous and proactive discussion about risk, about what could go wrong, and to proactively plan to mitigate risk and perhaps even capitalize on risk events.
When implementing an enterprise risk management process, it’s important to include participants from all levels of the organization — people throughout the organization will have a different perspective on risk and about how things really operate. Senior management will tend to focus on strategic issues, while process operators will tend to focus on process anomalies and nonconformances. The enterprise risk management process should bring these perspectives together.
For example, senior management may have a strategic initiative to increase customer satisfaction scores by a certain percent. The process operators with direct knowledge of customer order fulfillment, including knowledge of complaints and processing issues, would have vital information to help accomplish the strategic initiative. Too often, without a process to gather, analyze and organize such information, companies overlook the wealth of information they have within their own organization. The enterprise risk management system should help facilitate this information flow and allow everyone within the organization to understand their role in accomplishing organizational objectives.
James P. Martin, CMA, CIA, CFE, is managing director for Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or firstname.lastname@example.org.
Can you imagine a world without Oreo cookies? Anyone who has taken one and dipped it into a glass of milk before popping it into his or her mouth to savor the flavor would shudder at the thought of such a scenario.
But when Irene Rosenfeld returned to Kraft Foods in 2006, she found that the company was on verge of delisting the Oreo brand in China.
“We took a U.S. product and jammed it down the throats of the Chinese consumer,” Rosenfeld says. “We were losing money, and it was a very unattractive proposition. We had a $60 million factory in Beijing, which was sitting empty because sales had not materialized. So we were about to delist the product.”
Rosenfeld and her team at Kraft decided to reach out to people in China before taking such a drastic move. They asked what it would take to make the Oreo brand a success in their country.
“They very quickly told us that the product was too big and too sweet for the Chinese consumer,” Rosenfeld says. “When we allowed our local managers to redesign our product for the local taste and local customs, we had a phenomenal turnaround.”
The Chinese Oreo is smaller and less sweet and actually comes in a green tea flavor. It’s not at all what American consumers want when they open their package of Oreos, but different cultures have different tastes. Rosenfeld knew in that case she needed to adapt to earn the business of the Chinese consumers.
The effort has paid off thanks in part to China’s own Yao Ming, a former star basketball player in the United States.
“Who is the best symbol in China but Yao Ming?” Rosenfeld says. “He’s our spokesman, and we actually go to the local guy. It has been a phenomenal business in China with almost $800 million of the $2 billion business from Oreo worldwide,”
The willingness to adapt played a large part in the move completed last fall to split Kraft into two groups. Kraft Foods Group now holds the company’s North American grocery business, which is led by iconic brands such as Oscar Mayer and Maxwell House.
Kraft Foods Inc. is now Mondelez International Inc. and will focus on high-growth global snacks.
“Our dream for this company is to create delicious moments of joy,” says Rosenfeld, chairman and CEO for Mondelez. “The opportunity for us is to create a $36 billion start-up. It’s an opportunity to take an incredible roster of brands that are household names, brands like Oreo, Ritz, Chips Ahoy, Trident and Cadbury, and put those together.”
Getting to the market fast
Rosenfeld does not go so far as to say that the grocery side of the business was holding back snacks. But the two sides did require a different approach, and that created a challenge for leadership.
“North American grocery needs to be managed for cash and for margin,” Rosenfeld says. “There is a big focus there on maintaining the moderate growth but making sure it’s a very cost-focused company.
“Our global snacks business is all about growth. So the focus is on global platforms for each of our brands. The focus is on capabilities and the supply chain and sales, which will drive these products more rapidly around the world.
“The opportunity for us to be able to scale up very quickly if we are properly structured and have the proper communication from one part of the world to another is the main idea for our new company.”
The ability to make smart acquisitions of new brands and make strong connections in emerging markets will go a long way toward determining the ultimate success of Mondelez.
“The rate of consumption in the emerging markets is a fraction of what we see in developed markets,” Rosenfeld says. “So that whole investment thesis behind Mondelez is this idea of a growth company because of our geographic footprint and our category participation. It’s really depending on explosive growth, and we’re growing at a double-digit rate in these emerging parts.”
Focusing on health
It’s hard to talk about snacks and the love that people have of them without talking about obesity. Rosenfeld says the problem of people being overweight and out of shape is big in the United States, but it’s also a concern in other parts of the world.
“It’s every bit as challenging in India, and it’s on its way to markets like China,” Rosenfeld says. “It’s an issue we take quite seriously, and we look to address it in a couple of ways.”
The first part is looking at calorie intake. Efforts are ongoing to formulate products in a way that they taste good but can be enjoyed without guilt or risk to your future health and well-being.
“We continue to focus on taking things out like calories and sodium and sugar and replacing them in our products, as well as increasing the level of fiber,” Rosenfeld says. “We’re not pretending chocolate is going to be something other than it is.
“What we’re doing with products like that is to make sure the consumer has portion control. We’re making more of our candy bars scored so you can break off a piece at a time. We have resealable packaging. We’re doing a lot more single-serve products, which is good for price value and consumption.”
As for burning calories, Rosenfeld says she and her company will always do what they can to promote exercise and an active lifestyle for consumers young and old.
“We have been working very actively in partnership with organizations like KaBOOM! and with playgrounds in inner cities in this country and in programs like Healthy Schools in the U.K.,” Rosenfeld says. “We’re helping to educate children about good nutrition and the value of exercise.”
The key to being successful in providing nutritional foods to consumers, whether it be children, college students, young professionals or senior citizens, is easy to understand. But it’s often a lot more difficult to achieve in actual practice.
“Healthier products like Triscuit and Wheat Thins are growing at twice the rate as the base products,” Rosenfeld says. “There’s a clear business opportunity as well as the social responsibility. It’s not a tough sell, but what’s hard is to make sure these products taste delicious. Because at the end of the day, if it doesn’t taste good, the rest of it doesn’t matter.”
Staying in touch
From the outside, it seems like it would be a nearly impossible task to manage 100,000 employees. And while Rosenfeld has a proven track record of effective leadership and is regularly named one of the most influential leaders in the world, she agrees that managing that many people is impossible.
“The fact is I can’t manage 100,000 employees,” Rosenfeld says. “What I can do is inspire as many of the leaders of the company, then, in turn, to inspire their teams. It’s a cascading process.
“The single biggest role I play is in communication and talking about where we are going, why we are going there and what it is I need the organization to do. Then I really need the leaders to grab that and translate that mess into what it means for their folks on the ground.”
Rosenfeld spends about two-thirds of her time on the road meeting with employees and assessing whether they have what they need to succeed.
“I spend an enormous amount of time thinking about talent,” Rosenfeld says. “I look at our key roles, and I want to make sure they are operated by our top talent and that we have good career paths for those individuals as well as good succession plans behind them.”
The name change from Kraft to Mondelez has required a restating of what it means to work for this new organization.
“A lot of the work we’re doing right now is creating an employee value proposition and being explicit about what Mondelez can offer you as the prospective employee that you might not get elsewhere,” Rosenfeld says.
Empowering women to grow and succeed is another area of focus for Rosenfeld. Half of her management team is female and a third of her board is women.
“For many companies, they can legitimately say they have no one in the pipeline because they didn’t focus on that,” Rosenfeld says. “It’s a multilayered process, and it has to be a commitment from the top. I’m very proud of the progress we’ve made and we continue to talk with peers about what sort of actions we’ve taken that have contributed to our success.”
If you ask Rosenfeld for advice on how to succeed in life and in work, she says to just be yourself.
“If you’re not comfortable in the environment that you’re in, get out of it and do something else,” Rosenfeld says. “We all work too hard at what we do to not be comfortable and to feel like we have to be somebody that we’re not.”
The Rosenfeld File
Name: Irene Rosenfeld
Title: Chairman and CEO
Company: Mondelez International Inc.
Education and memberships: Rosenfeld holds a bachelor’s degree in psychology, an MBA and a doctorate in marketing, all from Cornell University. She is active in a number of industry and community organizations including The Economic Club of Chicago. She also serves on the Grocery Manufacturers Association board of directors and Cornell’s board of trustees.
The path to Mondelez: She began her career in consumer research, later joining General Foods, which itself became part of Kraft Foods. Rosenfeld led the restructuring and turnaround of key businesses in the United States, Canada and Mexico. She served on the team that spearheaded the company's IPO in 2001, and successfully integrated the Nabisco, LU and Cadbury businesses.
Rosenfeld took a short break from Kraft Foods in 2004, serving for two years as chairman and CEO of Frito-Lay. While there, she accelerated growth in better-for-you products and health and wellness offerings.
She returned to Kraft Foods, the predecessor to Mondelez International Inc., in June 2006 as CEO and became chairman in March 2007, following Kraft’s spinoff from Altria Group.
How to reach: Mondelez International Inc., (855) 535-5648 or www.mondelezinternational.com
The biggest misconception in corporate America is the thinking that vulnerability and weakness are synonymous. They couldn’t be more opposite. If you don’t think so, think about the kind of managers
you want to work for and respond yes or no to the following:
- Has all the answers.
- Does not ask for suggestions on the ability to lead more effectively.
- Refuses to confront sensitive interpersonal issues.
- Frequently keeps office door shut with a sign on it that says, “Not Now!”
This last one may seem like a joke. It isn’t. At a particular organization, this is promptly displayed for all direct reports and those who pass by to see. Yikes.
To clarify, vulnerability in leadership is not reflected by managers who are quivering bowls of insecurity that freak out twice a day, questioning themselves out loud on every decision. Vulnerability is demonstrated by managers who have both the confidence and courage to make tough choices.
Yet, in the process of these choices, they are willing to reach out for help, because it’s in the best interest of the organization as well their continued development.
The following are five areas that demonstrate the strong, vulnerable leader. Do a quick self-assessment as to how you measure against these:
Ask the opinion of those lower in rank.
Many managers view their competencies as milestones they passed, no different than a child who has learned to crawl then walk. Why look back? Yet, the perspectives of those under you not only builds morale and makes team members feel valued, managers may learn a fresh perspective they never considered.
Be willing to apologize and admit fault.
No one wakes up and thinks, “I can’t wait to screw something up so I can make a public apology!” Yet, the well-managed ego of a leader knows that both trust and character is on the line when it comes this one.
Get feedback from direct reports.
This is a distinction as the strong, vulnerable leader proactively seeks specific areas to be more aware and effective. This willingness to be enlightened is paramount for modeling continuous improvement.
Ask customers to critique your service.
Verbal critiques are best here so dialogue is involved. We have a propensity to bristle when those not making or selling our products or services chirp up. But the perch from which they view our approach to service not only offers a different vantage point, but one that may increase future business and referrals based on the openness of that relationship.
Tell colleagues to hold you accountable.
Empowering a circle of trusted advisers, above and below you in rank, creates a positive environment, one that knows higher trust, support and stronger likelihood of better performance outcomes.
Which one of these qualities resonates with you most? If you immediately have a couple in mind, that’s a good sign. If you are willing to openly discuss these with those you work with, that’s a great sign. Stay vulnerable, my friends.
Joe Takash is the president of Victory Consulting, a Chicago-based sales and leadership development firm. Joe is a keynote speaker for executive retreats, sales conferences and management meetings and he has appeared in many national media outlets. His firm, Victory Consulting, coaches executive teams and individual leaders, helping them maximize strategic execution. Learn more at www.victoryconsulting.com.
Annual physicals can lead to early detection of serious health problems and set a course for better outcomes. Companies need to take the same mindset concerning HR and benefits compliance audits, says Meghann Guentensberger, Director of HR Services at Benefitdecisions, Inc.
“Don’t wait until something ‘hurts’ to try to figure out how to respond,” she says. “It’s better to know ahead of time so you’re protected if there is a disgruntled employee who files a complaint.”
Smart Business spoke with Guentensberger about HR and the benefits of compliance audits.
What areas are covered by HR and benefits compliance?
Compliance is two-pronged: There is the benefit piece, which encompasses the Employee Retirement Income Security Act (ERISA), Health Insurance Portability and Accountability Act (HIPAA), COBRA, etc. There is also the HR side, which deals with regulatory compliance such as federally mandated forms and notice postings, and making sure an organization has proper procedures in place to address and resolve discrimination issues and complaints.
Many companies fall short on compliance with the Fair Labor Standards Act regarding employee classification — whether employees are exempt or nonexempt, or are a contractor or employee. There are best practices and risk management considerations such as having all I-9 employment eligibility verification forms filled out correctly and filed separately. The penalty can range from $1,000 to $10,000 for a form that is incorrectly completed. Employers also must ensure that any protected health information documentation is not co-mingled with other employee-related documentation in the employee personnel files.
What is involved in a benefits and compliance audit?
There are three steps — discovery, evaluation, and assessment and recommendation. In discovery, you determine which areas may present the most risk. A third party conducting an audit will interview HR employees, evaluating practices and processes to determine if they are in compliance with the law.
In the evaluation stage, select policies or a random sampling of employee files are reviewed and compared to standards. This often provides insight into hiring, interviewing and employee relations procedures. Common problem areas include employment applications that contain impermissible questions. This can lead to a claim of discrimination by a candidate who was not hired for a position. Employee handbooks often contain sections that provide unnecessary risks to the employer. An audit can ensure that it provides the same information to all employees.
For the final step, a scorecard is developed that shows risks and potential associated costs of noncompliance, or savings as a result of compliance. The scorecard also identifies areas to improve.
How do you determine an audit’s value?
Some savings derived from audit findings are soft costs, because fines would only be paid if an institution such as the U.S. Department of Labor (DOL) conducts an audit and finds violations.
One of the more significant values of an audit is in showing employees they matter most. Staying compliant shows you’re providing best-in-class service and indicates the moral values of the company. It also can be very powerful when dealing with a complaint from a disgruntled employee.
How often should audits be conducted?
Conduct an audit at least annually, although non-discrimination testing for Section 125 cafeteria benefit plans should be reviewed twice each year.
Many companies establish policies but don’t review them. That’s fine until you have a scenario where a disgruntled employee files a complaint with the DOL.
Regulations change all the time, so you have to stay on top of compliance issues, which can be difficult. Small and midsize businesses would benefit most from hiring an independent third party to perform an audit because you need someone who knows what you don’t know.
Meghann Guentensberger is director of HR Services at Benefitdecisions, Inc. Reach her at (312) 376-0449 or email@example.com.
For additional Insights topics and events, visit Benefitdecisions' website.
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A fully insured business will shop around with different health insurance companies for the best value, including a good network. However, self-funded health plans — which are growing in popularity — contract with a rental network that administers benefits with the help of a third-party administrator.
Smart network provider contracting will maintain lower costs and access to care for members. Many employers only look at the discounts for services in the contract, but there are other methods just as important when evaluating a network.
“There are always some things out of your control, but you try to manage the network and build in predictability to make sure you have control over it rather than the providers,” says Jamie Huether, regional vice president, Network Management, at HealthLink, which rents its network to self-funded entities.
Smart Business spoke with Huether about what to consider when evaluating a network contractor.
How can a network provider maintain lower costs?
A network provider employs a number of contracting methodologies to help health plan clients achieve the best rates. One is having as many fixed rates and as much charge master protection as possible, which limits exposure to provider changes. So, for instance, if a health care provider bills $3,000 for a procedure, and then increases it to $4,000, the network provider’s fixed charge of, say, $900 remains the same.
The alternative is reimbursement methodologies that pay a percentage of the billed charge, which rise as the bill increases. This fully exposes whoever is paying the claim to whatever the providers want to bill.
Why is the network with the highest discount not always the best option?
When evaluating networks, focus not only on the network discount but also the unit of cost, or what the service actually costs. Although the discount can look good, it doesn’t tell the whole story because providers don’t bill the same. Typically, hospitals owned by for-profit entities have a higher billed charge structure than not-for-profit hospitals. So, an appendectomy at a for-profit hospital may have a 75 percent discount for a final procedure cost of $15,000. However, the same appendectomy at a not-for-profit hospital might only have a 30 percent discount but just cost $9,000.
In addition, facilities make charge master — the master list of what they bill for services — changes throughout the year, depending on financial goals. These increases aren’t across the board because some service lines are bigger revenue drivers.
How does the network contractor work with self-funded businesses?
A self-funded plan sponsor contracts with a rental network to help manage costs and plan ahead. For example, one rental network used multi-year contracts to limit uncertainty and keep costs low. By offering stability to the health care providers, who also are trying to budget, it could mean a cost break.
A network contractor shares management reports with self-funded entities to show what they are spending at each facility and the average cost per day. The rental network also can report upcoming negotiations and cost increases that are locked in, giving businesses greater control.
When looking for a health network, what should you ask?
Health plan sponsors need to look for stable, broad networks with good geographic coverage. You don’t want to contract with a network where providers are coming in or out, or that doesn’t include one of the area hospitals. Businesses should ask:
- How much turnover is there in your network?
- Do you anticipate any major provider terminations in the next 12 months?
- What is the network doing with respect to transparency around costs for certain procedures, as well as being able to provide answers about quality?
Another factor is size — a network provider that does a lot of business can use that to leverage better rates from health care providers. Ask about additional services, such as customized directories, and how much help the network will provide to resolve issues related to the pricing of claims. Finally, determine how flexible the network is in addressing issues important to you.
Jamie Huether is regional vice president, network management at HealthLink. Reach her at (314) 923-6756 or firstname.lastname@example.org.
Learn more about HealthLink's broad network of contracted physicians, hospitals and other health care professionals on their website.
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