Is the confidential information on your network safe? That’s a question every organization should ask itself because network security breaches are common and becoming even more prevalent.
Kristen Werries Collier, a partner with Novack and Macey LLP, says organizations must acknowledge this risk and vigilantly monitor and evaluate their cyber-security safeguards and protocols to minimize it.
Smart Business spoke with Collier about network security breaches and the steps companies can take to mitigate or eliminate them.
How common are enterprise security breaches?
Most large and mid-sized companies have confronted a cyber attack at some point. Network security attacks are a reality you must confront head on. The threats to your network posed by unauthorized access — and the damage caused by a successful attack — will only continue to rise.
Can you prevent a security breach of your network?
While you may not be able to prevent a breach with absolute certainty, you can certainly deter one by proactively assessing and addressing your network’s vulnerabilities. If you don’t have the in-house expertise to do that, consult a security adviser. You want to invest your money in safeguards that deter — if not prevent — the attacks you are likely to face, and a security adviser can identify those for you.
Keep in mind that no system is ironclad because hackers adapt as security measures evolve. Accordingly, you must routinely monitor your layered security measures to make sure you are keeping up with determined hackers. Avoid being the easy target.
What should you do if, despite your precautions, a breach happens?
Undertake these best practices:
- Act fast. Perform a post-attack forensic analysis to determine the ‘who, what, when, where and how’ of the breach. You’ll need to preserve this information to evaluate the damage, mitigate the fallout, structure appropriate remedial measures and build a case against the hacker.
- Promptly notify anyone whose sensitive information may have been compromised.
- Update your intrusion detection and prevention systems and other safeguards to deter future breaches.
- Assess what your legal obligations are in the wake of the infiltration.
What is the potential fallout if your network is breached?
Breaches expose your organization to legal claims and undermine its competitive advantage. As for the legal claims, the law mandates the protection of certain types of information like consumers’ personal and nonpublic financial information, Social Security numbers and medical records. Your organization could potentially face claims predicated on an array of legal theories, including negligence; breach of contract; the Fair Credit Reporting Act, which subjects certain organizations to liability if they fail to safeguard consumer credit information in their possession; and Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive practices affecting commerce.
While you may defeat such legal claims on a motion to dismiss or ultimately at trial, it will cost you money to do so. From a business perspective, a security breach may have financial and competitive repercussions by publicly exposing your organization’s highly confidential or propriety information and by eroding consumer confidence in doing business with you.
What, if anything, is the government doing to crack down on hackers?
The government is cracking down by charging hackers with crimes carrying potential years of imprisonment and hefty monetary fines. However, the deterrence effect of this crackdown is somewhat limited given that numerous hackers operate outside of the U. S., making prosecution difficult, if not impossible. This is yet another reason to deter, if not prevent, a breach of your organization’s network in the first place and quickly mitigate the fallout if one occurs despite your best practices.
Kristen Werries Collier is a partner at Novack and Macey LLP. Reach her at (312) 419-6900 or email@example.com.
Insights Legal Affairs is brought to you by Novack and Macey LLP
Integrating a comprehensive behavioral health plan into the medical health plan your company sponsors is a win-win. Employees are able to improve their health mentally and physically, and the employer can track cost savings related to direct health care costs and indirect costs through more productive, healthy employees.
“One out of every four adults will experience a mental health disorder in a given year,” says Tom Albert, manager, Behavioral Health Services at HealthLink. “I think few people, in general, realize the rates are that high.”
Smart Business spoke with Albert about how integrating behavioral and medical health allows employers to better coordinate their members’ care.
How do behavioral and medical health impact employers?
The rate of one in four adults experiencing a mental health disorder annually goes even higher for those with chronic medical problems. Furthermore, employees with untreated psychiatric or substance use disorders can be at a higher risk of on-the-job injuries. This can lead to missed time from work, expensive treatment and a decrease in quality of life for the individual.
Absenteeism is not the only concern for employers. Presenteeism, or the loss in productivity of employees who come to work sick, can also be costly for employers. The Institute for Health and Productivity Studies at Cornell University found that depression and other mental health problems are among the illnesses that have the most significant decrease to productivity.
What’s the advantage of integrating behavioral and medical health management?
Ninety-three percent of Americans believe a health care plan should cover behavioral health treatment, according to a National Association of Psychiatric Health Systems survey. Some workplaces don’t cover behavioral health. Other employer groups cover it but carve out the management, which makes it difficult to coordinate care.
Having one organization manage both medical and behavioral health benefits is gaining popularity among employers. With integration, the health plan’s medical and behavioral clinicians collaborate and ensure that individuals and their families have access to care that best meets their needs.
What are the overall goals of utilization and case management for behavioral health?
Utilization management ensures that health plan members have access to the care they need; that care is delivered in the right setting; that the quality of care meets high standards; and that resources are used efficiently in order to help control costs.
Case management involves case managers communicating directly with members and their families to assist them in navigating the health care system; addressing any obstacles to accessing treatment; and empowering members and their families to maintain an optimal level of health and functioning.
Case management helps the member to stay well so he or she doesn’t have to keep using the same services and missing work.
What is the Mental Health Parity Act?
The Mental Health Parity and Addiction Equity Act of 2008 doesn’t mandate that employers of 50 or more employees offer behavioral health coverage, but it does require that if the health plan covers behavioral health services, the financial requirements and treatment limitations are no more restrictive than medical and surgical benefits.
Prior to parity, employer groups often relied on treatment limits to control costs by limiting the number of days in a hospital or the number of visits for outpatient mental health treatment. Parity is good because the limits often were arbitrary, but it does mean the best way to control costs is to ensure care is only approved when medically necessary.
What are the results of formalized behavioral health management and review?
A Milliman case study of a large private manufacturer found a 10 percent reduction in members with chronic medical and psychological conditions saved $1 million annually and another $750,000 from reduced absenteeism, fewer and shorter disabilities, and increased productivity. An effective behavioral health management organization ensures members receive the right treatment in the least restrictive setting, which reduces costs and time missed from work, while improving overall health.
Tom Albert is manager, Behavioral Health Services, at HealthLink. Reach him at (314) 923-6288 or Thomas.Albert@wellpoint.com.
Insights Health Care is brought to you by HealthLink
Microfilm does the job of preserving your company’s documents and publications for up to 500 years. But content digitalization offers an archival-quality storage method that allows convenient, searchable access to these materials.
“Digitalization allows you to unlock the potential of the content,” says Natraj Kumar, general manager of Business Process Outsourcing (BP0) Services at HTC Global. “The Financial Times, for example, already has the content and most is available in physical form. They wanted the content posted on their website so people can access it and they can make revenue from it.”
Smart Business spoke with Kumar about the process of transferring content to digital form, the value it provides and the types of companies that are benefitting from digitalization.
What businesses are utilizing content digitalization?
The companies that are transferring content to digital form are e-research businesses like ProQuest and Gale, which is part of Cengage Learning. They maintain databases of reference content used by libraries, schools and businesses. Their revenue is based on a subscription model, so they want to have their content on the Internet.
Another set of customers is national libraries, like the National Library of Australia or the Library of Congress.
Content digitalization helps anyone with a huge amount of paper or a large library. When the Enron and Arthur Andersen scandal hit, quite a few legal firms had to go through the paperwork and find liability and assets. The contract to convert that into digital form was for $25 million, so you can imagine how many pages were involved.
How is content digitalized?
Normally, material is scanned from books and microfilms. Sometimes it’s also from digital content. We’re working with National Geographic magazine and they send PDFs of issues.
But conversion from scanned to digital form is only part of the story. The indexing and granularity of the content is the engine behind the digital archive. Scanned images are fine, they’re still accessible, but if the indexing is good it helps people locate their content of interest quickly.
Indexing is a painstaking process; when it’s scientific, medical or biology related content it’s important to have people with degrees in those fields read through the material and do the indexing because it’s not just about English, it’s about subject knowledge. You have to know which terms to index.
What are the advantages of going digital?
Looking up all pictures of Mount Everest that appeared in National Geographic magazine would be a tedious task if you have to sift through 50 years of magazines. With the type of metadata utilized and the indexing that is done, a search brings out all of the details. These photos are not available on Google; this is copyrighted material and not available in the public domain.
It makes research materials so much easier to find. For example, Cengage has a platform featuring different content sources. When you search the term ‘Wall Street crash of 1989,’ you’re going to get articles from The Economist, the Financial Times and quite a few newspapers that they are hosting.
What should you consider when choosing a company to transfer content to digital form?
There are a lot of companies that offer this service and throw people into the job. It’s important that the company apply technology wherever possible, because of the cost benefit and speed to market. The typical archiving project runs from 750,000 to 1.5 million pages. If the project takes two years, your product could become irrelevant. You need a company that can get the job done in six months.
The company also needs to know what they’re doing to the extent that they will not be asking a lot of questions and tying up your employees. In short, they need the capability to deliver good quality and a large volume in a short period without engaging most of your resources.
Natraj Kumar is general manager of BPO Services at HTC Global. Reach him at firstname.lastname@example.org.
Insights Technology is brought to you by HTC Global Services
Businesses must change in order to maintain a competitive advantage.
However, employees at any level can become an impediment to change as John Kotter noted in a 1995 Harvard Business Review article on leading change and why efforts may fail. The problem is employees might not understand why they need to do things differently and what the benefits of the change will be.
Here are some steps you can take to ensure that your entire organization supports necessary change:
Understand the dynamics of change
Be aware of the stages that people tend to experience throughout the change process so you can effectively guide your employees. Jeanie Daniel Duck noted the following significant stages in her 2002 book, “The Change Monster.”
* Getting stuck in old thinking
* Recognizing the need to change
* Preparing for and implementing
* Following through with gains made
Unless you address feelings and concerns of employees in each of the above stages, any desired changes will likely fall short.
Adopt effective leadership approaches
Leaders who tend to take a nonproductive approach, such as what we’ll call “The Winner” or the “The Avoider,” have to be aware of how their actions can affect their employees’ ability to accept the change.
The winner will take an attitude of winning at any cost and impose his or her authority on employees. It is better, instead, to focus on the process of building and maintaining relationships with employees. This approach will highlight the importance of the change and build collaboration.
On the other hand, the avoider will not want to make any waves. This risk-averse approach discourages employees who want to align with a progressive organization. Be up front and straightforward with employees about the upcoming transition.
Keep employees informed
As you develop your leadership strategy for the change, remember that open communication is crucial. Employees at all levels need to see and hear from senior executives to believe the change is important.
Employers should continue to promote and discuss the change, even after there is support from employees. This will help sustain the high level of energy and excitement needed for the change to be successful.
Align people of influence
Though it’s your responsibility to lead the change, it’s not all on you. Employers should engage respected leaders and other influential team members. If leaders take the time to sell the value and the benefits of the change to influential people, their support can help lower resistance from more hesitant employees.
Don’t assume which leaders will easily accept the change and which ones will combat it. The employees whom you think are least likely to accept the change might become your best allies.
Make the change sustainable
Finally, if you do not build the change into processes that ensure a consistent and routine approach, then old habits might resurface. It is important that employees do not see this change as the flavor of the month, but rather as a lasting one that will improve the long-term success of the company.
Change won’t happen right away. But with dedication, focus and clearly outlined strategies, you can cross the finish line with your employees at your side.
Jay Colker, DM, MBA, MA is core faculty for the master’s in counseling and organizational psychology program at the Adler School of Professional Psychology. Dr. Colker also maintains a human capital consulting practice and may be reached at email@example.com or at (312) 213-3421.
It was a bitter pill for Robert Pasin to swallow.
Radio Flyer Inc. had spent decades producing millions of its iconic red steel wagons for children across the United States. The children who grew up with them had bought them for their children and those kids bought them for their kids. It was a tradition that could go on forever, or at least that’s what the company had let itself believe.
But as the 1990s began, a new wagon, one made out of plastic, had begun appearing in stores and was an instant hit with consumers.
The part that was most painful to accept for those who worked at Radio Flyer was that they had not made this new plastic wagon. Even worse, as they looked at the way their company was set up, they weren’t even capable of competing by making a plastic wagon of their own.
“We were a manufacturer, a steel stamper, and that’s what we were really good at,” Pasin says. “The way we were running the business was we were looking at what we could make in our factory and then figuring out if we could sell it.”
This mindset led the company to start a line of wheelbarrows and garden carts in the 1950s to go along with its wagons, all of which were made out of steel.
“We weren’t in touch with the external environment as much as we needed to be or should have been,” Pasin says. “So we weren’t talking to consumers. We weren’t asking moms what they wanted in a new wagon. That’s why we were really caught off guard.
“If we had been doing those things, we would have known that this is something that consumers wanted.”
This was the challenge that faced Pasin, grandson of company founder, Antonio Pasin, less than a year after taking over the company as its CEO.
“There was justifiable fear,” Pasin says. “We were scared that we weren’t going to stay in business.”
Accept the challenge
The fear was palpable around the offices of Radio Flyer. Complacency had played a role in where the company now found itself, but Pasin and his team had to find a way to get past that. They needed to act quickly if they were going to save this company that had become such a symbol of 20th century Americana.
“We had to come out with a plastic wagon if we were going to stay in business because this was where the market was going,” Pasin says. “The challenge was that we really never had sourced a product before. Everything we had ever done, we made it ourselves. We didn’t have anybody in our company who knew anything about plastic, and we didn’t really have a product development team.”
Pasin didn’t try to sugarcoat the daunting challenge that Radio Flyer faced.
“We were just really honest, and we said, ‘Here are the facts, here’s what we’re going to do, and we’re going to keep treating people here as well as we possibly can,’” Pasin says.
It was an urgent time, no doubt about it. But Pasin didn’t feel it was time to panic, and he wanted to make sure his people didn’t feel it either. Plastic wagons were on everyone’s mind, but Pasin was also thinking about mission, vision and values. These things would play a big part in the company’s approach to making plastic wagons.
“We went through a process that included everyone in the company,” Pasin says. “The best way to achieve change is to involve everyone in the change as much as possible. In our case, we were changing the culture, and we asked everyone a lot of questions over the course of a year.
“We had a companywide discussion and it started with, ‘What was the company like on the first day you started?’ We got vastly different answers from people who had been here for 40 years and people who had been here for months. But while the answers were different, there were these recurring themes that kept coming out.”
Those themes were integrity, passion and excellence. Radio Flyer had indeed dropped the ball by not staying in touch with its customers as their needs and desires changed. But the products the company was making were as well-made and strong as they ever had been. And that was something to build upon.
“It just became very evident that we had this great bedrock of a culture to build on, and it was really powerful,” Pasin says. “No matter what, there’s got to be some gem in a business or hopefully more than one gem. Otherwise, you’d be out of business. There’s got to be something good in there. The task of the leader is to find that gem. Figure out what’s unique or different about it and then build on it.”
Pasin saw how strong his team was and the talent that each person brought to the table. He just needed to figure out how to take all of those pluses and use them to build a process to make plastic wagons and then stay in touch with consumers to be more proactive and less reactive about the next big thing.
“If the leaders can go through in a very methodical and thorough way and unearth all that information, it becomes very clear what needs to be done,” Pasin says. “It doesn’t mean what needs to be done is easy. It’s very difficult or it already would have been done.”
Set clear goals
Pasin wanted goals to be much more structured and clearly stated at Radio Flyer. It would help the company make a great plastic wagon, and it would ensure that, decades later, the company would not find itself in a similar situation of being out of touch with its consumers.
“Everybody in the company has five goals,” Pasin says. “Those five goals line up with the team goals and the team goals line up with the company goals. So there’s tremendous line of sight and alignment throughout the company for what we’re working on. ‘Here’s what I’m working on and here’s how it’s impacting the success of the business.’”
As a business, when you set goals, it’s critical that they align and that they be meaningful. Otherwise, what’s the point?
“They have to meet the SMART criteria,” Pasin says. “S is for specific. M is for measurable. A is for achievable. R is for return on investment. T is for time-bound. We work really hard to make sure everybody’s goals are smart in that way.”
There were some people in the company who provided evidence that they weren’t a good fit for what needed to be done going forward.
“I had a couple of guys say, ‘OK, now that we’re going to have these goals, how much more am I going to get paid?’” Pasin says. “I said nothing. These goals are not above and beyond. They are not extra. This is the most important stuff you’re supposed to be doing in your job. Those people aren’t in the company anymore.”
Make tough decisions
As the company got into the details of making plastic wagons, Pasin gradually began to realize that a big change was going to have to be made: Radio Flyer was no longer going to be a manufacturer.
It happened over a period of years, but it was clear if the company was going to make plastic wagons and branch out into tricycles and scooters too, something had to go.
“There is no way a company our size can be great at all those things,” Pasin says. “One of the questions we asked ourselves to help us get clarity was if we weren’t doing this today, would we start doing it? And the answer was so clearly no.”
Pasin wanted to build relationships with design firms and have product development teams that would have their fingers on the pulse of consumers. In order to do that the right way, manufacturing would have to be cut.
“What are we passionate about?” Pasin says. “What can we be best in the world at? What drives our economic engine? Those three questions are huge questions. We decided that what drives our economic engine is profit per product. Not profit per product line. We had a lot of products we were losing money on.
“We decided we’re not going to do that anymore. We’re going to be much more rigorous on making sure that here’s a revolutionary idea for the business. We’re going to make money on everything we sell.”
Twenty years after the company faced its demise, Radio Flyer is flying high. Sales that were only $20 million in 1992 now top $100 million and the 70-employee company’s debt is minimal.
Pasin credits the success to a methodical approach that has the company positioned better than it’s ever been to continue growing.
“I would just sit down and list out on paper what I thought all the biggest problems in the company were and then I would do a ranking of what are the biggest problems,” Pasin says in offering advice to other leaders who find themselves in a tough spot. “Usually the biggest problems relate to the biggest opportunities. Then I would go to my team and say, ‘Hey guys, here’s what I think are our biggest problems and how we can make them opportunities.’” ?
How to reach: Radio Flyer Inc., (800) 621-7613 or www.radioflyer.com
The Pasin File
Education: Bachelor’s degree in history, University of Notre Dame, MBA, Kellogg Graduate School of Management, Northwestern University.
What was your very first job?
My first job was working on the packing line in the factory. I was 18.
Did you see yourself becoming the CEO?
I would say no. I was starting to get very interested in the business, and I saw myself working in the business, but not necessarily as CEO.
What one person would you like to have met in the world and why?
The first person that comes to mind would be my grandfather — I could have lunch with him and talk to him about what’s happening in the business and ask him questions about his early experiences. I never got a chance to do that while he was alive. I think it would be fascinating at this stage of my life to be able to do that.
Pasin on building a good team: The most important thing is are the people committed to where the company is going and are they highly committed to doing a great job. If I were ever to go into a turnaround situation, that’s the first thing I would do. For the ones who aren’t, move them out of the company as fast as possible. It’s the best thing for the company and it’s the best thing for those people. If they are not committed and into their jobs, they are just dying a slow death of meaningless work. I’d much rather have them do that somewhere else or find meaningful work that will make them happy.
How often do you go to market without a solid business strategy? Probably never, right?
The reality is that if you’re like most organizations, then you’re doing this right now — and you don’t even know it.
That’s because most organizations do not have a well-thought-out marketing strategy. Instead, most are doing what somebody told them they should do. This includes creating a mobile website, engaging in social media and advertising.
All of these are “smart” marketing initiatives. But if they’re done in a vacuum, there’s no way to measure what results those initiatives are intended to accomplish. Worse, you’re chasing tactics instead of delivering results.
There is a significant difference between marketing tactics and marketing strategy. Marketing tactics are ways to bring channels to life. This could be a new website or a mobile-optimized version of your site. Or it could be creating new sales collateral. Tactics should be used to bring your brand message and value proposition to life.
Unfortunately, if they’re not tied to a cohesive strategy, you will not achieve the results you desire.
A marketing strategy, however, allows you to understand the results you should achieve. It also keeps everyone aligned with what you’re trying to accomplish and where you are in the process.
As an example, there are three main reasons for a website: to verify your organization’s brand message to potential customers, to deliver your value proposition and conversion.
Conversion can mean different things for different industries. In retail, it might mean picking out a product, putting it in your shopping cart and making the purchase. In business-to-business, conversion might mean picking up the phone to contact the company, providing a name, email and phone number, or signing up to receive a newsletter.
Without understanding how consumers behave, you may be selling your marketing efforts short. You might not be providing enough information to clearly articulate your brand message or value proposition or you might not be offering users an easy experience that allows for conversion. So how do you ensure that a consistent brand message, value proposition and the ability to target customers converts across all marketing channels?
First, understand who the target consumer is and their needs, attitudes and behaviors. This can be discovered through research, including focus groups or through industry-based segmentation.
Then, conduct a deep dive to understand your business goals and objectives. In retail, this might be the number of sales you want to drive. In B2B, it could be increasing the numbers of prospects in your pipeline.
Finally, evaluate your company’s existing marketing tactics — your website, marketing collateral and overall brand message.
Only then will you be well-equipped to evaluate your overall tactics and compare them to marketing best practices and the competitive landscape. This results in recommendations that include expected business results and return on investment.
Prioritize these by measuring the highest impact against investment levels, and then create a timeline to implement them over a one- to two-year period. Share this strategy throughout the entire organization so everyone understands what will be accomplished and what the expected results are.
Without strategy, and an understanding of everything that goes into it, any money you pour into tactics tends to be money poorly spent. Done correctly, your marketing strategy suddenly becomes your organization’s key driver and leads to tangible and measurable business results.
Dave Fazekas is director of digital marketing for Smart Business Network. Reach him at firstname.lastname@example.org or (440) 250-7056.
What is the best way to motivate employees? Some successful CEOs treat employees as friends, while other equally high-achieving leaders regard employees as merely hired hands, giving them a day’s pay for a day’s work and nothing more.
What’s the best approach to produce the best results for the company, the employee and the employer? Much of the issue lies with one’s definition of a friend and the culture of the organization. Many companies boast that their employees are like family. This sounds great, but can it work?
If either party crosses the fine line that separates the difficult-to-define business and personal space, both employer and employee can become disenchanted or worse. One way to think of it is that friendship is more unconditional. We accept a friend for what he or she is or isn’t. On the flip side, the reality is that most bosses embrace or reject employees for what they do on a consistent basis.
The military has its own way of handling fraternization between officers and the enlisted by making it a possible court martial offense. This stance is predicated on the belief that socializing between these two levels is “prejudicial to good order, discipline and partiality.” It is well recognized that business relationships without boundaries can produce too much drama.
Perhaps what we need is a new definition for a nonemotional, congenial, enjoyable and productive day-to-day relationship between leader and follower. This moniker could be employee-friend, or “e-friend” for short. “E-friend” isn’t an app but would describe an employer/employee relationship where there is mutual respect and a genuine appreciation of one another, underscored by an understanding, albeit perhaps unspoken, that when the time for talking is done, the boss has the final word on matters that occur between 9 a.m. and 5 p.m. Using these ground rules, both sides can have it both ways by using good judgment and treating each other as they would want to be treated if their roles were reversed.
The employee should expect from the boss that, when the chips are down, either on a business basis or when the employee has a personal problem, he or she knows that the boss will be there for him or her, providing understanding and advice and, when requested, helping the employee maneuver through rough patches. From the employer’s perspective, the employee would be someone who, through thick and thin, is there for the company and can temporarily put personal needs aside when there is a business issue that can’t be postponed.
The e-friend boss should know as much about the employee as the employee wants the boss to know, which can include sensitive professional problems or even family or medical issues. In a good relationship, the boss could certainly know, as one example, what the subordinate’s kids are up to in their lives and be the first to say to the employee that it’s more important for him or her to go to an offspring’s ballgame or play, rather than putting in extra time on the business project du jour.
Instinctively, employees know if a boss truly cares or is just going through the motions to be politically correct. They know if the head honcho is sincerely concerned about them as a person, not just another set of hands.
Not everything and everyone in the workplace are created equal. There will always be a pecking order; however, there is nothing wrong with truly enjoying the people with whom you work every day and sharing meaningful experiences, all of which lead to a more fulfilling role for both the employer and the employee. The best criterion to avoiding problems is using generous doses of plain common sense. There is a much-quoted line from the 1987 movie “Wall Street,” starring Michael Douglas as the ruthless tycoon Gordon Gekko, who proclaimed, “If you want a friend, get a dog.” This provoked both laughs and sighs, but in the real world, this attitude makes for a very lonely Ebenezer Scrooge-type life for the boss and a shallow existence for employees who must spend more than half, at the very least, of their Monday through Friday waking hours working.
At times, people can be difficult, both to work for and with. However, it’s the people who make the company and relationships that combine respect and a form of e-friendship that can make the real difference.
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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Richard Branson is full of big ideas. The man who founded six companies that each rake in more than $1 billion annually dares to think big. For him, it’s all about the experience, making a difference and not doing things the same way as the competition. An idea captures his imagination and he sets out to turn it into reality.
For him, it’s not about the money. It never has been.
When he sees a situation where he thinks he can make a difference in people’s lives, he looks for a way to make a difference. He understands that “why” he is doing it is more important than the “what” or the “how.”
Author and consultant Simon Sinek agrees (see video link). He explains that Apple is wildly successful at what it does not because it can build computers better than anyone else but because it understands “why” it is doing so. It’s not that the competition doesn’t know what it is doing or that it doesn’t have talented people creating good products. It’s just that Apple understands why it is in business and focuses its message on that instead of what it does — which is build electronic devices.
Sinek says that people like to do business with people who believe what they believe, so they buy more on the “why you do it” rather than what you are actually doing. Notice that profits are secondary. If you do things the right way for the right reasons, profits come naturally.
You might already have a big idea for your business, but it will most likely never reach its full potential unless you understand why you are doing it. Have you ever stopped to think about why you are in business or why you are doing what you are doing? It can be an enlightening exercise.
With the demands of daily business, we seldom stop to think about the reasons behind our actions, and if we do think about it, the answer is often “to turn a profit.” But to what end?
When you understand why you are trying to make a profit and the answer goes beyond simple wealth, then you are getting to the heart of what differentiates a good business from a great one. Maybe the reason why is a social issue, such as eliminating hunger, or maybe it’s a medical issue, such as curing a disease. But it doesn’t have to be grand. The “why” can be something like “making computers easy for everyone to use.” The important part isn’t the scope; it’s understanding your business’s basic reason for existence.
When you’ve taken the time to understand that, your business will have the potential to do great things because employees and customers alike can unite around a common understanding.
It’s why Apple is a great company and it’s why Richard Branson is wildly successful. If you’re already doing it, you’re on your way. If not, take the time to think about it.
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.
According to Merriam-Webster, management is “the process of dealing with or controlling things or people.” While “controlling” is a bit harsh in my book, the definition is correct in it's focus on management of people. To be a good manager or team leader, you have to have an above average interest in people. Success in management is found in the relationship developed between leader and team.
The best managers see themselves as catalysts. They become that agent or force that provokes or speeds significant change or action. These managers get things done quickly by leading with solid people skills.
Here are 4 people skills that every good manager must possess:
1. Understanding the right way to give a critique.
The worst thing you can do if you want to get someone to listen to you is to criticize.
As human beings, we hate to be criticized. When we feel attacked, we usually attack back – even when we are in the wrong. Many of us fall into the trap of thinking “I know I am right and I am going to prove it to you.”
Over the years I have learned that this way of thinking simply does not work.
A good manager has the self-control and presence of mind to put aside the needs of his own ego and say “I've got a problem, will you help me?” Enlisting cooperation in this manner will always lead to better results.
2. Understanding the need to help.
If someone comes in to criticize you or to raise your game, under what circumstances would you be willing to accept the critique?
The answer for me is simple. If I think someone is really trying to help me, then I'll engage and listen.
On the other hand, if I feel that the person is just trying to get the job done or make himself look good, I may listen, but my heart will not be in it. My interest and creative energies will be lost.
The truth of the matter is: Managers will only have influence over their people to the extent that their people think they are sincerely trying to help them. It is simply the way human beings work. Good managers truly care about their team and work hard to help them.
3. Understanding no two people are the same.
As a manager, you do not influence everybody the same way. People do things for their own reasons – not for others and not for you.
Inspiring people to your company vision happens best when you help them to see what's in it for them. This varies from person to person. It is your job to discover what things motivate each member of your team.
Some people are motivated by a challenge, some by money and others by recognition.
It is about reading their needs, desires and wants and then leading in such a way that ensures their success at obtaining them.
4, Understanding the best way to get tasks completed.
An effective manager realizes that each time he has an interaction with someone about a task, there are two things going on:
a. A discussion about the task and how to get it done.
b. The way in which the interaction affects the managers relationship with the collegue.
The first is pretty straightforward, but it's success is determined by the tenor of the second.
It must be said that the task should not be sacrificed for the relationship at all costs. It must also be said that winning on the task is not good if the manager ruins the relationship. Both are important and the manager must do well in each area.
I refer again to the need for the manager to develop relationships with the team in order to understand the best way to get things done according to individual members needs, desires and strengths.
In the end, good managers know how to use their influence and power to help others achieve beyond their wildest dreams.
I like management guru Tom Peters' definition of power:
“My definition of power is understanding that all of managing — and this comes out of the old grade school book — is the notion of doing more than you and I can do by ourselves; that is, doing things through other people.”
He goes on to say:
“If you are interested in getting things done effectively and imaginatively through other people then what you're trying to do in the workplace is exactly what you're trying to do on the football field – which is to get people who work with you to achieve beyong their wildest dreams.”
Workplace managers understand that good people skills determine their success. They work hard to develop the skills needed to lead in ways that shows their interest in people.
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 helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email email@example.com or visit her website at www.delorespressley.com.
Cost segregation studies are an effective component of any cash management strategy for a business that owns buildings or other depreciable real property for business use. The strategy involves the deferral of income tax liabilities to later years through the identification of property having a shorter cost recovery period for federal income taxes, which even the IRS acknowledges as an appropriate deferral method.
Smart Business spoke with Walter McGrail, senior manager at Cendrowski Corporate Advisors LLC about using cost segregation.
Why are cost segregation studies effective?
The benefit is the ‘present value savings’ attributable to the deferral of federal and state income taxes. The actual savings is the reduction in current tax payments now, with resulting increases in taxes payable in subsequent periods, i.e., the ‘time value of money’ attributable to tax deferral. As with any treasury cash management program, a property owner’s cost of capital is typically the appropriate discount rate to measure the ‘present value savings’ of deferring cash charges for income taxes.
How does it work?
First, cost segregation studies identify categories of costs that have a shorter cost recovery period for income tax purposes. Buildings typically have a depreciable life of either 27 or 39 years, while the depreciable lives of furniture and fixtures ranges from five to seven years. Though the total amount of cost recovered is the same regardless of the recovery period, the shorter it is, the sooner the resulting tax savings occurs.
Second, shorter life property generally qualifies for accelerated depreciation methods. Buildings are depreciated under the straight line method, which results in the same depreciation expense during each year the building is owned. Shorter recovery life property identified in a cost segregation study may be depreciated under accelerated cost recovery methods. For example, depreciating property with a five year life using accelerated depreciation on the same five year property results in more than 70 percent of the cost being depreciated during the first three-year period. There are also new Treasury regulations that permit immediate deduction of qualified repair costs. The professional conducting the cost segregation study will be able to apply the new expensing regulations, as well. The tax savings occurs for both federal and state income taxes. Current federal corporate income tax rates are 35 percent and states’ are typically are around 5 percent.
How is a cost segregation study conducted?
Studies must be properly conducted to withstand IRS scrutiny, which requires not only professionals trained in the proper classification of assets for federal depreciation purposes but also personnel with engineering and construction experience to properly classify the components of a structure. Key to a successful audit defense are documentation of findings and expert personnel.
What businesses might benefit from this?
Cost segregation studies can be conducted on new construction, rehabs, recently purchased properties, or even properties held for a period of years. For newly constructed property, and to some extent rehabilitated properties, shorter life depreciable property may qualify for bonus depreciation. Bonus depreciation rules permit a first year depreciation deduction equal to 50 percent of the cost of identified qualifying property. Bonus depreciation and more favorable capital expenditure expensing elections will expire after 2012.
What is the time frame to conduct a study?
In order to make a claim for the 2012 calendar year, the study must be conducted before the extended due date of the 2012 returns, typically Sept. 15, 2013. Sufficient time should also be permitted to coordinate the findings of the study with the business’s preparation of its 2012 income tax returns. For properties owned prior to 2012, the IRS has provided a relatively straightforward means to claim the resulting difference in depreciation expense before and after the study is conducted.
Walter McGrail is a senior manager at Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or firstname.lastname@example.org
Insights Accounting is brought to you by Cendrowski Corporate Advisors LLC