Last month’s ii2P Insights article described the initial steps that small and medium-sized businesses (SMB) should take, considering that implementing a self-service platform is both strategic to improving customer intimacy as well as reducing overall costs.
This month, Steve Carter, president and CEO of ii2P, describes one of the easier elements companies can implement to transition to a self-service model — automated self-service password reset solutions.
“If you peel back the covers and examine the monthly call volume coming into IT support help desks across all business environments, easily 25-40 percent of the reason employees call is because they’ve forgotten a password or locked themselves out of something,” Carter says.
Smart Business spoke with Carter about why self-service password management is something SMBs should take a hard look at.
Why is password management so important to SMBs?
Intellectual property theft is significant — it compromises an SMB’s oftentimes thin competitive edge. SMBs should be proactive when it comes to password management. After all, the cost to implement a secure solution is a fraction of what could be lost in intellectual capital.
Many SMBs look to cloud-based IT solutions to run their businesses and lower their costs. However, this sets them up for the greatest opportunity for IP theft. While some cloud companies do provide stringent security controls, it can be a bit alarming to have all your company IP centralized into the cloud.
Cloud based solutions offer convenience, but this is not the top priority for an SMB — security is. The SMB needs to understand that both convenience and security can be obtained. If you have spent money on a tool and are still calling a service desk for help, you are spending too much. It’s important to build a solution that is convenient for your end users and is also secure.
How big a problem is ineffective password management?
I’ve been in the IT industry for 30 years and password management consistently accounts for 25-40 percent of all calls that come into a help desk. This is a huge number. The loss of productivity for an end user is significant. It’s not just the office user, but also remote travelers who have to call the help desk to get their passwords so they can do their presentations. Every year, millions of dollars are spent answering customer reset problems.
If you bring the right solution to the table, you can reduce overall IT costs significantly. If end users adopt your solution, you are going to increase your security, decrease your costs and protect your intellectual capital. It’s important to begin the process by automating the password reset in a manner in which the end user will actually use.
By implementing the right technology security solution you can remove the exposure of the end user, who is the weakest link in the chain, and enhance your security by gradually making it more complex.
What are some of the available solutions and which ones are best for the SMB?
There are a lot of cloud-based solutions that cater to one key element: convenience. SMBs who utilize cloud-based solutions are susceptible to security breaches. My recommendation is to tailor a token-based solution. Countries in Europe, the Middle East and Asia are already accepting the smartchip, token-type approach. This solution is not as prevalent in North America yet, but will become more and more common.
There are smartchip, token solutions out there now that have been engineered from the end user’s perspective. This ensures that the change in the business application of password management does not reside at the help desk, but with the end user. Also, when you use this approach you are able to build a solution that is tailored to your specific environment and is able to expand as your business grows.
How can SMBs benefit from self-service password management?
Password management is an ongoing and growing concern. The ability to secure passwords should be a priority for every business, whether it is small, medium or large. You should focus on the end user, making sure that they embrace the solution you provide, rather than ignoring it. If you choose the right solution — which in my opinion is a chip-based, token solution — you are going to realize four key benefits:
1) Increased security
2) Increased end user compliance
3) Increased end user productivity
4) Reduced cost for support
Steve Carter is president and CEO of ii2P. Reach him at (817) 442-9292 or email@example.com.
Insights Technology is brought to you by ii2P
Voice over Internet Protocol (VoIP) involves sending voice information in digital form rather than by using the circuit-based protocol of traditional telephone networks.
VoIP can mean different things to different people, says Alex Desberg. “We define VoIP as delivering voice services across a network. It could be Internet-based, it could be private-network based. Such services have been strategically designed to replace traditional telephone services.”
Smart Business spoke with Desberg about VoIP, the cost efficiencies such a platform provides and how it can lead to increased productivity.
What’s new with VoIP?
Ohio.net adapts VoIP to accommodate virtual businesses. People are getting rid of brick-and-mortar offices and setting up telecommuter or remote environments. In the past month we’ve had several of our VoIP customers realize that they really can have everyone work out of their homes and get rid of their offices. One company we work with has 26 employees working remotely, but all working together as if they were sitting in their office.
When you can front-end a business with what sounds and acts like a traditional phone system, but nobody is sitting in the same building anymore, it really makes sense. A VoIP system helps a company become more cost effective by eliminating the need for a facility, not to mention rent expenses, power expenses and commute costs for employees.
What are the benefits of VoIP?
One of the key benefits is the release from traditional telecom. There are inherent geography issues associated with traditional telephony. Plus, people get wedded to legacy phone systems that keep perpetuating the need to be upgraded or repaired. This becomes costly. By moving away from legacy equipment, you can take advantage of a hosted environment for your phone system. You won’t be responsible for upgrading your software anymore or making sure the rollout of a new feature is integrated into an existing system. A VoIP system is more of a service-based model: as long as you are subscribed to the service you can take advantage of all the upgrades, changes and benefits that the provider offers.
Are there any drawbacks?
VoIP is like any business technology, if we are poor managers of technology, we might be a poor manager of a phone system in a VoIP environment. You have to pay attention, just as you do with any other technology. If you use questionable or problematic Internet service, then you will have questionable or problematic phone service as well.
A lot of it depends on the provider that you choose. The VoIP environment has been a little volatile. Some entities want to become a phone company overnight without realizing the impact they can make on a customer by not providing a quality service or not understanding the market properly. It takes a history and understanding of the traditional telecom world to do well in the VoIP market.
If you’re going to choose this type of technology, you have to do the research. There are plenty of VoIP providers available online, but I’m a big believer in working with a local company that is close and can support you. You don’t want to have to buy service from a company in Denver that is down due to a power outage or snowstorm while you’re still working and trying to do business.
What advice would you give about implementing VoIP solutions?
We have three areas that we really stress to new customers. First, it’s crucial to select the right hardware. Some people believe they can go with inexpensive voice equipment. However, quality hardware on a quality network really makes a difference to the end user’s experience.
Training is also very important. We have a staff of trainers that help with the implementation of a new phone system to ensure that everyone knows how to use it when it’s launched and that they have the proper resources. Finally, there should be a go-to team available if any problems are encountered once the technology is implemented.
How can VoIP translate into increased productivity?
Let’s say you have an office in Cleveland, an office in Kansas City and an office in Florida. With VoIP we can tie these together like they are one. With traditional telephony you can’t easily do that. Also, you can work with one provider so you have one telephone company and one bill for as many locations as you have. Finally, the upgrades, additions and changes that are made for the phone system are service-driven so you don’t have to buy a phone system every 10 years, or live with outdated technology until you can afford it.
Why is investing in new technologies like VoIP so important?
If your organization is going to run on antiquated equipment, then you are going to be an antiquated business in about five years because technologies change so often. What is big with VoIP today is not going to be the same thing that drives people in five years. We see the growth of mobile phones being integrated into VoIP today. Five or six years ago, we didn’t even have that on the radar. Most people thought that VoIP would just replace landlines. Now companies have field teams that are armed with smart phones but still need a VoIP system so they look like legitimate enterprises, rather than giving everyone’s cell phone number to do business.
Alex Desberg is a twenty-year veteran of launching and marketing Internet technology. Most of his technology tenure has been with regional and national providers. At Ohio.net, a wholly owned subsidiary of Doylestown Communications, Desberg has been the development spearhead of a mature VoIP product line designed for business application and brings his support and knowledge to the B2B environment.
On April 24-26, Corporate College will bring the nation’s best legal and technology experts to Northern Ohio. There will be multiple continuing legal education (CLE) sessions offered each day, so attendees can earn all of their annually required CLE credits at one time, in one place. Plus, the latest in legal and technology-related products and services will be presented at the accompanying trade show.
Julie Savarino, managing director of Business Development Inc., will be presenting two nationally acclaimed sessions: “Mastering the ‘Sales’ Process for Lawyers,” and “Secrets of Success from Leading Women Lawyers.”
“Law is a practice, you have to practice constantly. If you want to maximize your strengths and further your career, these are great programs to attend,” says Savarino.
Savarino is an attorney and a nationally renowned expert in client and business development for lawyers and law firms. Throughout her 25 years of practice, she has helped thousands of lawyers and firms generate millions of dollars in new business through her nationally renowned training, coaching and consulting services.
Smart Business spoke with Savarino about the Continuing Legal Education Summit, who should consider attending the event and what types of sessions are available.
What is the purpose of the Continuing Legal Education Summit?
The purpose is to pull together an exciting roster of CLE programs. Some of the best CLE sessions in the country will be offered at one time, under one roof.
In addition to the programs, I’m also very excited about the location. Corporate College is an undiscovered jewel. It is a great venue, with beautiful property and excellent meeting facilities.
Who should consider attending the event?
Professionals who should consider attending include attorneys, legal marketers, legal administrators and IT directors from Ohio, Pennsylvania, Indiana, Illinois and West Virginia. The summit also will be beneficial for court reporters and paralegals because they need CLE as well.
What will the ‘Mastering the “Sales” Process for Lawyers’ workshop consist of?
‘Mastering the “Sales” Process for Lawyers’ is a workshop designed to help lawyers become the best rainmakers they can be. It is a full day and an exciting day. In the morning we cover the six key steps in the sales process for lawyers, which is very different than the sales process for typical business entities because of the ethical rules attorneys must abide by and the relationship foundation of the legal business.
A key feature of the afternoon portion of the workshop is the two in-house counsel who serve as instructors. During the afternoon, participants prepare for and have the opportunity to ‘pitch’ the two in-house counsel while gaining their direct, candid and invaluable feedback. This doesn’t happen in real life. In real life when you pitch them, you leave the room and they talk about you behind your back. The workshop provides the opportunity to gain feedback about your approach, your skill set, and where you might want to enhance your techniques. It is somewhat comparable to lawyers actually listening in on jury deliberations at trial — which of course is not allowed.
This program has been delivered hundreds of times around the country and achieved excellent results for law firms and lawyers.
How can participants benefit from the sales workshop?
Lawyers don’t learn the steps of the sales process in law school. We have a prohibition against solicitation. There’s a phrase called ‘ambulance chasing’ which we can’t do. We can advertise to some degree, but you can’t call someone and ask for their business — solicitation is prohibited in all 50 states. This is one-stop shopping for learning how to ethically and appropriately sell.
How would you describe the ‘Secrets of Success from Leading Women Lawyers’ program?
‘Secrets of Success from Leading Women Lawyers’ will feature a panel of successful women lawyers employed in various capacities. This will be an outstanding program because the panel of women lawyers comes from various sectors. Not all practice at law firms; some practice in the public sector, some in education. The fact is that women lawyers — just like women businesspeople across the country — are still not equally paid or equally rewarded for their work. The women on the panel are going to share some of the secrets to their success.
Why should women consider attending this session?
Parity is still a struggle for most women lawyers no matter where they work and this panel is designed to share tips and techniques on how to fuel their career. For example, one panelist is a lawyer who works as in-house counsel at American Greetings and another is an up-and-coming young woman lawyer from a large law firm.
It’s very hard to be a successful woman lawyer. It’s a very demanding profession and law is a jealous mistress. To have children, a family, a life and be a successful lawyer is challenging and difficult. This program is going to showcase that there are a lot of alternative career paths, not simply working at a law firm and billing 2,000 hours a year.
Julie Savarino is managing director of Business Development Inc. Reach her at (734) 668-7008 or Julie@BusDevInc.com. To register for the CLE Summitt, visit www.corporatecollege.com/cle or call (866) 933-5167.
Last month’s ii2P Insights article described how small and medium-sized businesses (SMB) are facing a “perfect storm” in terms of balancing costs and customer intimacy. This month, according to Steve Carter, president and CEO of ii2P, SMBs that have decided to take action should follow some tried-and-true guidelines.
“By clearly understanding the objectives for your enterprise, you can make certain that your implementation of an end user or customer self-service platform actually becomes the end users’ preferred method of receiving support,” he says.
Smart Business spoke with Carter about implementing a self-service platform and the benefits of providing value to end users.
What should be the first step in implementing an effective self-service platform?
If there is a single step that misleads a company worse than any other, it is not getting the setup right at the start. Most of the time, executives deliver the mandate for someone to implement a self-service solution, thinking that they understand the issues. Nothing could be more detrimental than starting out with the wrong calibration.
Companies need to understand the real objectives of self-service. It is not just about trimming costs. It is about creating a true change in human behavior that drives and motivates more intimate end user experience between the customer and the company.
The objective should be to attract and retain solid, powerful end user participation with the value that you are trying to extend. The objective should be about developing a lasting platform for customer intimacy.
What would be the next step?
Once the fundamental objective is established for implementing an effective self-service platform, then it’s time to determine the true opportunity for your customers to help themselves. Another frequent error is thinking that self-service is limited to helping users ‘fix’ their own problems, such as ‘how to’ questions, or ‘fill in something.’ While these are certainly common and often easy to incorporate, that’s not the limit of effective self-service.
Quantifying the true level zero (self-service) opportunity is going to be more expansive than you typically first believe. Credit your smarter customer for that.
What do business owners need to include in their self-service platform?
Customers, especially in this day and time, are looking for self-service interactions that yield more value and independence. It’s becoming more of an environment of, ‘I want to track this,’ or ‘I want to compare these two products,’ or ‘I want to manage the entire buying or fulfillment process on my own.’
Along with the fixes and the finds, it makes great sense to consolidate many of the functional interfaces that your users are using today. A great example is expanding the IT self-service site to also serve as the gateway to other business functions, such as human resources, or information review (relevant news feeds).
Tying your customer-facing self-service site to your fulfillment tracking (such as Fedex or UPS shipping), albeit seemingly insignificant, is huge when it comes to adding value to the self-shopper.
Finally, it’s important to find a way to collect measurements of customer experience with your self-service site transactions. This correlation is going to be the most valuable information you can harvest. It will help drive ongoing improvement to the site.
What are some of the best-suited and easy-to-implement aspects of end user self-service solutions?
Avoid making the site too cluttered, but at the same time, there are some relatively common-sense elements to include. Certainly, have a strong search engine tied into a well-maintained knowledge base of solutions specifically created for self-service. One horrific mistake many companies make is placing a massive technical knowledge base in front of general purpose users and telling them, ‘Have at it!’ I call that, ‘where angels fear to trod,’ and nothing disenchants a user more than that. It is intimidating, and many times users won’t return once they experience that.
Bring any enabling technology to the site, such as self-service password reset technologies, or the ability to create a service ticket, or check the status of an existing one. Users don’t want to have to call someone to do those simple things. Make that available.
Allow users to submit requests for common services, or even new information. One caution here — someone needs to monitor and respond to those requests. If users ever sense that no one is minding the store, they will quickly lose confidence in the site, and revert back to labor-intensive methods. It’s hard to regain their confidence at this point.
What is the most important thing about implementing self-service?
This is big: Don’t succumb to building a ‘portal to nowhere ’. Standing up the self-service site that is an afterthought or an also-thought will fail. There is a proverbial bone-yard of customer self-service sites that have ended up there.
If you are not going to implement these three elements of a successful self-service platform — effective technology, solid business practices and committed managerial disciplines — save yourself the time and money and wait until you can.
Self-service is an investment to growing customer intimacy and loyalty. Done properly, it will change human behavior and deliver lasting benefits.
Steve Carter is president and CEO of ii2P. Reach him at (817) 442-9292 or firstname.lastname@example.org.
Many companies are expanding their marketing presence in social media outlets. However, not all companies are taking appropriate steps to ensure that they “own” their social media accounts when the employees who create them leave, says Richard Douglass, a partner with Novack and Macey LLP.
“It is important for companies that use Twitter or other social media as part of their marketing campaign to clearly define what rights, if any, the employees who tweet on their behalf have to the social media accounts and content,” says Douglass.
Smart Business spoke with Douglass about who owns a social media account and how to protect your business when social media employees depart.
What ownership rights are there in a social media account?
A social media account has two parts. First is the account itself. This includes login information and the people who have signed up to receive messages posted to the account. It is this aspect of an account that typically provides most of the value to the owner. For example, a Twitter account with 10,000 followers should be worth more than an account with 1,000 followers because 10 times as many people are reading the messages.
Second is content, messages posted to the account by an employee to share with the public. Rights to the content are generally governed by the same copyright principles that govern other written material produced by an employee. A question surfacing now regarding corporate Twitter accounts is not who owns the content but who has the right to control the account.
Have the courts decided who owns that right?
Not yet. The issue of who controls user rights to a Twitter account has not been widely litigated, but two decisions rendered last fall provide guidance.
A U.S. District Court in New York issued a preliminary injunction requiring a former employee to turn over to her employer all passwords and other login information for the company’s social media accounts that she used during her employment. The court relied on a fairly generic copyright work product agreement to support its decision. And, probably because of the agreement, the employee did not dispute that the employer owned the accounts.
Because ownership was not disputed, the court did not have to engage in an in-depth analysis of whether the user rights to the accounts and the subscribers were covered by the work product agreement. This decision signaled that courts will likely be willing to enforce agreements requiring former employees to turn over the keys to social media accounts when they leave.
On the other hand, a U.S. District Court in California was faced with a dispute over the ownership of a Twitter account, but it appears the employer and employee did not have any agreements concerning ownership of the account or the content. As such, the employer was forced to rely on other legal theories to assert control rights.
While employed by the plaintiff, the employee used the account to promote the plaintiff’s website to increase traffic and increase advertising revenue. When he left, the Twitter account was alleged to have 17,000 followers. The employer claims it asked the employee to turn over the account after he left, but he refused. Instead, he changed the name on the account to remove reference to his former employer and now uses the account to post messages on behalf of his new employer. As of February, the account had more than 24,000 followers.
Without a written agreement as to ownership and control over the account, the employer is asserting claims based on other legal theories. First, it claims the list of account followers is a trade secret. This argument seems doomed to fail given that follower lists are available on Twitter’s website. The employer also claims the account password is a trade secret. That, too, seems to be misguided, as the employer does not gain value from the password itself and it could be changed at any time by the ex-employee.
Second, the employer claims the ex-employee is interfering with its business relationships by not turning over the account. This claim, however, does not seem to answer the relevant question — who owns the user rights to post messages on the account. These claims start from the assumption that user rights belong to the employer and assert that the ex-employee wrongfully refused to turn them over. Yet, if the ex-employee owns those rights, then he did nothing wrong. The employer’s claims have survived motions to dismiss, but the litigation is likely far from over.
How can companies protect their rights to social media accounts after an employee leaves?
Express agreements defining who owns company social media accounts. The New York case shows that courts likely will enforce agreements over the rights to access, just as they enforce agreements governing ownership of the intellectual property rights to the content.
In essence, the collection of people subscribed to the account is a direct byproduct of the content, so one could argue that an agreement regarding content also covers the account. Nevertheless, the account itself is a sufficiently unique asset that it should be separately addressed.
The easiest solution is to require employees using social media on behalf of their employer to sign an agreement granting all user rights to the accounts to the employer, specifying that it will retain such rights after the employee leaves. The agreement should identify the accounts for which the employee is responsible and state that, when employees leave, they will turn over account passwords and relinquish all rights to access subscribers.
Taking this precaution at the start of an employment relationship should avoid disputes later. And, if disputes do arise, they put the employer in a strong position in any litigation.
Richard Douglass is a partner with Novack and Macey LLP. Reach him at (312) 419-6900 or email@example.com.
For many business leaders, effective teamwork is viewed as the ultimate competitive advantage that can deliver excellent results. Imagine what you could accomplish if you could improve the performance of your teams: increased market share, enhanced employee involvement, continuous improvement, innovation and reduced waste.
However, true teamwork, with skillful members working towards a common goal, is very rare. We’ve all learned from first-hand experience that not all teams are created equal. So why do some teams produce more excellent results than others?
“It takes more work than just grouping people together and calling them a team,” says Meghan McHale Bilardo, director of Organizational Effectiveness for Corporate College, who cites “The Wisdom of Teams” by Jon Katzenbach and “The Five Dysfunctions of a Team” by Patrick Lencioni as valuable resource tools.
Smart Business spoke with Bilardo about critical components for developing effective teams, common challenges and best practices.
What are the critical components to having an effective team?
There are three critical components. The first is that people working on a team need to have complementary skills. Hiring or selecting the ‘right’ team member is crucial. Members should all be able to relate in terms of their technical proficiencies that they bring to the table. Think about the best performing teams in professional sports, each member is highly capable and well trained. Selecting skilled team members and maintaining their skills over time is essential.
The second critical component is that they have a clear and compelling set of goals. Winning teams have a defined purpose that members rally behind. They break the broader purpose into smaller goals and align each person’s efforts to specific tasks for which they are individually responsible. At Disney, for example, the mission of each employee is aligned with the mission of the larger organization — ‘Make dreams come true.’ This goal underlies all decisions made by teams at each of the Disney resorts.
The last critical component is mutual accountability. These are the promises that team members make to each other, starting with the leadership. Leaders should demonstrate accountability and respond to the lack of it on their teams. It is important to create a culture of responsibility, obligation and support to foster accountability. The best teams define who is responsible for what and track individual and group progress. Productivity is rewarded and celebrated. When individuals are struggling, the team provides support. The team creates a positive pressure to deliver results and members do not want to disappoint each other. Southwest Airlines has collective responsibility to ensure flights depart on time and to identify the root cause of a problem when flights are delayed.
What are some of the common challenges teams face and how can these challenges be overcome?
Even the most talented teams face obstacles. The first challenge has to do with building trust, a necessary foundation for a high performing team. With high levels of trust teams are more productive, have a great sense of unity and are supportive. The difficulty here is that trust requires time. In order to speed up the process an outside facilitator can guide your team through activities that help people gain new insight into each other, which builds trust. The second challenge that many team members face is conflict. It can be difficult to disagree with and debate members of your team. The Thomas-Kilmann Conflict Model, which we use at the college, helps members build assertiveness skills and understand how conflict can be productive and useful to a team. The third hurdle is a lack of accountability. The more ambiguous leaders are about goals and progress, the easier it is for people to be unaccountable. The best way to foster accountability is to be S.M.A.R.T when setting goals, to publicly post progress on goals and promote ongoing team dialogue on accomplishments and setbacks.
How do you know when you have a high-performing team?
Members of a high-performing team produce excellent business results. When you observe them you will see open-ended dialogue and group participation in meetings. You will witness ongoing and public tracking of their performance, regular evaluation of their processes, innovation and continuous learning. You will observe public rewards and group support for team members that aren’t able to deliver. At the end of the day you will see a collective result.
What are some common best practices to promote team development?
All teams move from forming, storming, norming and performing as they develop (Bruce Tuckman’s Stages of Team Development). Their needs are different in each stage.
- When ‘forming’ a best practice, hire an outside facilitator to establish the team’s purpose, set performance goals and lead strategic planning. In addition, the facilitator can create a team charter, which helps members understand how they will work together.
- ‘Storming’ is when teams most often struggle with conflict. Group learning in communication and social style workshops help people build their assertiveness and conflict resolution skills so they can have productive debates and ongoing dialogue with their new teammates.
- The ‘norming’ stage is when a team begins to build a sense of unity so it’s best to review their progress and revisit their ground rules in the team charter. Professional development workshops for leaders are also recommended to help them learn proven strategies for increasing employee ownership and pride.
- ‘Performing’ is all about productivity and knowing how each member can best contribute. Evaluate performance and reward members who are delivering the biggest results.
Meghan McHale Bilardo is director of Organizational Effectiveness for Corporate College. Contact her at (216) 987-2800 or Meghan.Bilardo@tri-c.edu to learn how you can build an effective team that delivers business excellence.
Last month Steve Carter, president and CEO of ii2P, challenged small and medium-sized businesses (SMB) to take a look at investment decisions around their current support models. This month, he stresses the importance of adopting a strong sense of urgency to avoid upcoming challenges.
“SMBs worldwide are projected to spend $1 trillion on IT by 2014. But unless something drastically changes, that spending could be like a heavy weight on a vessel headed into a perfect storm,” says Carter. “We want to stop, take a pause, and not repeat history by spending money on technologies without really looking for a composite solution.”
Smart Business spoke with Carter about the challenges SMBs face, how to avoid common traps and the importance of managing cost pressure while strengthening customer intimacy.
Why do you feel there needs to be a heightened sense of urgency around creating change this year?
There are two fundamental problems facing the SMB market space: 1) cost pressures to stay competitive; 2) customer intimacy is in jeopardy. All companies with products and services wrestle with relieving cost pressures to maintain competitiveness. However, the most significant challenge I see is declining customer intimacy. This is an aspect that has been ignored. In order to sustain and grow market share, maintaining customer intimacy is paramount. Overall, a quality customer experience is missing, which shows up in lost market share.
What factors do you feel are causing these challenges?
A perfect storm is described as having multiple conditions that are colliding at the same time. There is a perfect storm in the SMB market today. First, all too often we see both cost and customer intimacy elements are chained to an archaic standard support model. Such a model is actually designed to cost more to interact with the customer. Historically, this has been why companies scrambled to find ways to cut back on support costs. This standard model is also designed to drive customer interactions out because it costs so much and reflects pure overhead. What this does is create an environment for the SMB that says, ‘Use it less, find a way to reduce calls for support.’ Sounds like a good thing, but it is deceiving. It’s a death trap for the SMB.
At the same time the demographics of the end user have changed considerably and it is imperative that you respond to their wishes. Our clients have grown up in the technology world and favor what I call the ‘preferred end user support model’ — they prefer to satisfy the needs themselves rather than call a support center for help.
Lastly, by not considering and committing to a holistic approach when installing new technologies into your business, you are actually burdening your organization with incomplete and ineffective solutions.
How can the SMB know if it is facing the perfect storm?
There are some clear, obvious indicators that every SMB should use as beacons:
? Check your specific market growth. Has your business grown at a healthy rate? If you are not growing at a healthy rate, the storm will ultimately catch you.
? Check your client retention. This one is big. You can’t glaze over client loss as being a result of some external factor. Truth is, if you are losing clients, your model is working against you. The two key components are your cost competitiveness and your ability to be intimate with your end users.
? Check your profitability. This one should be obvious, but can be deceiving. If your margins are falling, for example, don’t automatically blame costs of raw materials. The cost of your support model is a more obvious culprit.
What options does an SMB have if it determines it is facing a perfect storm?
There are three options that always apply, and the first two are the most common traps that sink businesses. The first option is to do nothing. Keep steaming straight ahead, believing the situation will improve. The second option is planning to do something in the future. While this one doesn’t sound quite as bad as doing nothing, it has the same result: the longer you wait, the more you lose ground.
There is a third option: Do something new. Now is the time to face the perfect storm.
How should an SMB go about implementing a new approach in order to avoid the perfect storm?
The thing to remember is that surviving the storm requires a balance between the two elements I spoke of earlier: managing cost pressure while strengthening customer intimacy. The first step to bailing water out of your boat is to analyze and optimize your current support model. Then establish a clear strategy and create self-improving client intimacy through customer-facing self-service.
We’ve all made the mistake thinking that just purchasing technology is the answer. Take a new holistic approach that will bring technology, process and management disciplines as a complete and total solution. Examine the investment in current IT expenditures and make the hard assessment: ‘Am I getting real return on investment?’ If not, make a change. Finally, establish committed continuous improvement processes that focus on balancing the customer intimacy mandate with prudent cost management. With these approaches in place, clearing the perfect storm is simply a matter of having your clients use your new model more.
Steve Carter is president and CEO of ii2P. Reach him at (817) 442-9292 or firstname.lastname@example.org.
As a business owner, you may think that a national or large regional bank can best serve your business. But as a smaller business, it’s easy to get lost in the shuffle.
Community banks may be a better option — they are locally owned and operated, serving their hometown communities. The money deposited in a community bank is reinvested in ways that drive local economies, such as in the form of loans to local residents who want to buy a home or small business owners looking to open a business on Main Street, says Don Mann, former deputy commissioner of banking for the state of Michigan, regulatory liaison with the Community Bankers of Michigan and a bank consultant for a number of community banks.
“By banking locally with a community bank, you can rest assured that your banking needs will be taken care of and that your money will be put to work where it belongs — in your community in the form of loans to local residents and business owners,” says Mann. “It’s a hometown investment.”
Smart Business spoke with Mann about community banks, their importance to the Michigan economy and how they differ from credit unions.
Why are community banks important to Michigan’s economy?
Michigan’s banking industry has experienced a significant change in the past 40 years. Most cities were once lucky enough to have their own locally owned bank doing business on Main Street. In 1970, there were approximately 560 chartered banks in Michigan and more than 75 new banks have chartered since then. Today, the total number of banks is 130.
Where did all the banks go? In 1971, the Michigan legislature changed the law to permit corporations to own bank stock. Previously, only individuals or partnerships were allowed ownership. With that and other changes, bank holding companies were organized in Michigan and allowed to acquire banks, as were bank holding companies located in other states, resulting in a massive bank-buying spree.
Then large banks began buying locally owned banks, and by 2000, the number of banks was 188. Twenty-five banks also failed during this time, although due to FDIC protection, no insured deposits were lost.
The concentration of banking deposits controlled by out-of-state banks is noteworthy. Michigan’s banking deposits, which include consumers, businesses, schools and governmental units, as of June 30, 2011, totaled $158 billion. Out-of-state banks doing business in Michigan control $110 billion, or 70 percent, of all deposits. The top six out-of-state banks hold 57 percent, or $90 billion, of Michigan’s deposit dollars. Decisions regarding how to invest or lend this money are made by individuals and boards of directors located in New York City, Dallas, Pittsburgh, Charlotte, Cincinnati and Columbus.
As we have seen during the recent recession, too many times, the deposits these banks collect from Michigan residents and institutions leave the state to be invested in distant communities far removed from the interests of the local account holders.
What is the makeup of community banks?
The ownership of the bank is generally made up of individuals who work and reside in communities they serve, and this extends to the board of directors, as well. Their local knowledge of the market area provides a significant advantage for the bank and its customers, as they can react more quickly to changing market conditions and customers’ needs.
Unlike the big banks, their business is relationship based, not transaction based. Community banks continue to maintain a tradition of community service, whether financing local business and municipal projects or participating in and sponsoring local events.
What is the difference between a community bank and a credit union?
Community banks and credit unions generally offer the same type of products and services, with the exception of business lending. Credit unions once had membership restrictions, which are rare today, but they still have limits on business lending and are currently lobbying to expand those powers.
Unlike banks, credit unions are not as heavily regulated, are not subject to the Community Reinvestment Act, a federal law designed to encourage banks to help meet the needs of borrowers in all segments of their communities, and do not pay taxes. In fact, a single minimum wage worker pays more federal income tax than the entire credit union industry. Community banks invest in their communities. The taxes they pay support their local, state and federal governments, and they are a key supporter of a community’s infrastructure, making it a better place for all residents to reside.
What are the challenges and opportunities facing community banks today?
Because of the downturn in the economy since 2007, all banks are facing increased regulation and supervision. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. This 5,000- page act brought the most significant changes in financial regulation since the Great Depression. The act creates significant implementation issues and will be costly to both community banks and their customers.
Where the federal government was quick to bail out ‘too big to fail’ banks, most community banks were left to fend for themselves. Fortunately, because of their traditional, conservative management practices, most community banks remain among the most financially sound banks in the country.
As many consumers consider switching to a new banking relationship, they need to look no further than around the corner. The local community bank is a safe haven from impersonal bank practices. Community banks only thrive when their customers and communities do the same, so taking care of their customers and looking out for the best interest of their community is ingrained in the way they conduct business. By banking locally, consumers and businesses make a hometown investment they can be proud of.
Don Mann is former deputy commissioner of banking for the state of Michigan, regulatory liaison with the Community Bankers of Michigan and a bank consultant. Reach him at (517) 285-7758 or email@example.com.
In this country, unlike many others, litigants — win or lose — generally pay the attorneys’ fees they incurred in litigation. This rule, known as the “American Rule,” can be frustrating for the winner. After all, if you have won the case, why shouldn’t the loser pay? Nevertheless, the American Rule is the default rule in our legal system.
As with most rules, there are exceptions. Some contracts, statutes or codes of civil procedure trump the American Rule and provide that the loser is obligated to pay the winner’s reasonable legal fees. Given the American Rule’s sting, lawyers keep a keen eye out for such exceptions, hoping to recover fees for their clients.
Most lawyers know that, when the exceptions to the American Rule apply, courts will allow businesses to recover reasonable fees paid to outside counsel. But some do not know that many courts will allow recovery for a client’s in-house counsel as well, says Christopher Moore, a partner at Novack and Macey LLP.
Smart Business spoke with Moore about how to maximize chances for the recovery of in-house legal fees, the importance of detailed time records and how such fees are calculated.
Can a business recover for the legal services rendered by an in-house lawyer?
Most courts say yes. That might seem counterintuitive because an in-house lawyer typically is paid a salary, which would have been incurred whether he or she was involved in a particular litigation or not. Thus, the money paid to an in-house lawyer can be viewed as ‘overhead,’ rather than costs incurred as a result of litigation. And, while some courts have denied fee recovery for in-house counsel on that basis, that is, because a business incurs no added attorneys’ fees when in-house counsel assists it in litigation, many courts do not. As the Seventh Circuit has recognized, ‘every hour spent on a case by an in-house lawyer is an hour that he or she could have spent for the business on some other matter.’
What can a business do to maximize its chances of recovering for such services?
Just because a court may allow a business to recover for the services provided by its in-house lawyer does not mean that all — or even any — fees attributable to his or her work are recoverable. For example, litigants seeking legal fees have to show that those fees were reasonable, and this principle applies with equal force to businesses seeking to recover fees for their in-house attorney.
Reasonableness aside, businesses face an additional hurdle when they try to recover fees for work done by their in-house lawyer: They have to show that the in-house lawyer ‘actively participated’ in, or ‘substantially contributed’ legal services to, the litigation. Fees are not generally recoverable if the in-house lawyer was acting merely as a ‘liaison’ between the business and outside counsel.
What this means in practice is not always clear. However, a business’s chance to recover is maximized when that lawyer performs the type of work that is often associated with litigating a case. Examples include preparing discovery documents, outlining deposition questions, examining witnesses, or participating in tactical trial decisions. Obviously, it helps if in-house counsel files an appearance, presents argument, or appears in court at trial.
Conversely, fees will not be allowed when in-house counsel acts more like a client by, for example, merely keeping the business up-to-date on the litigation, transmitting progress reports to the business, or communicating the business’s views on litigation strategy to outside counsel.
What kind of time records should be kept?
Because fee recovery depends on demonstrating that the fees were reasonable and that in-house counsel was actively participating in a case rather than acting as a liaison, it is vital that in-house counsel keep detailed records of their work. At a minimum, those records should not only show the time devoted to each litigation task but also describe specifically how the work performed was work for which courts allow a business to recover. Courts have denied recovery when time records lacked such detail and thus failed to demonstrate that in-house counsel was substantially contributing to the litigation, rather than acting as a client liaison.
How are in-house fees calculated?
There are various ways that courts could measure recoverable fees for in-house counsel, but two principal approaches seem to have emerged.
In one approach, courts accept the view that the work performed by a salaried, in-house attorney is recoverable, but they are mindful that such work can be viewed as part of a business’s overhead. As such, a business seeking to recover fees needs to show these courts how much of its overhead can be allocated to the litigation at hand. The calculations needed to make such a showing can be complex. Still, courts favoring this approach, or something similar, are concerned that a different approach could permit litigants to recover more than the costs actually attributable with in-house counsel’s work, and thereby result in a windfall to the victorious litigant.
In another approach, courts have awarded fees for in-house litigation work based on a ‘market rate.’ Essentially, this is what non-in-house lawyers in the same market would have charged the business for the same services. Courts favoring this approach see at least one advantage: It avoids the need to make the complex inquiries and calculations that the first approach and similar methods require. Moreover, courts favoring this approach believe that the market-rate approach likely produces a fee calculation roughly equivalent to that given by the first-described approach. This is because, among other things, time devoted by in-house counsel to a particular litigation is time he or she could have spent on some other task.
In the end, courts favoring the market-rate approach reason that such time is no less valuable than what a business would have to pay outside counsel to do the neglected work.
Christopher Moore is a partner at Novack and Macey LLP. Reach him at (312) 419-6900 or CMoore@novackmacey.com.
Think back to your first day as a manager. You’ve been praised as a high-performing associate for quite some time and becoming a manager is the next step in your career. However, upon assuming the reigns of leadership you quickly learn the skills you’ve employed to accomplish your own work aren’t so effective now that you’re leading a team of individuals with their own work styles and goals.
“Individual contributors are expected to execute work themselves and suddenly, once promoted to the role of manager, they are expected to execute work through others,” points out Sarah Eppink, Leadership Program Manager for Corporate College. “This can prove challenging to high performing individuals who have rightfully been praised for being accountable for their own good work.”
In order to ease the transition from being an individual contributor to a strong leader, organizations should provide support for new managers throughout the training process.
Smart Business spoke with Eppink about why new leaders struggle, what competencies should be developed, and how to choose appropriate training providers.
Why do most new leaders struggle?
Managers oftentimes are promoted through the ranks of their organizations as high-performing individual contributors with expertise in their field. This is important, as you certainly need a leader to have technical expertise and a solid frame of reference. However, these newly promoted managers tend to lack the soft skills that prove crucial to leading a team and managing relationships.
Another challenge can arise when a newly promoted manager is leading a team comprised of former peers. It can be difficult for teams to accept a former peer as a new boss because that person ‘used to be one of us.’ A manager doesn’t usually just receive respect because of a title, especially not in this situation. To gain acceptance, a new leader needs to leverage their relationships within the team and accomplish quick wins. Organizations must adequately support these new managers through training and reinforcement during this challenging transition.
What competencies should new leaders develop?
Individuals new to managing others should look to develop behaviors that would help them tackle both day-to-day tasks, as well as more strategic thinking. A solid training program for new leaders addresses the following competencies: leadership styles, building trust, communication, delegating tasks, developing and coaching others, change management, conflict management and decision making. Programs that focus on skill development in these areas can effectively minimize the learning curve of new leaders. You might be wondering why I didn’t mention skill sets like building a team and acquiring talent. New managers typically inherit a team and don’t have the luxury of hand selecting the talent they will lead. Depending on the organization, some new managers may not have a need to acquire new team members for quite some time. When the need arises to develop these skills, this training should be made available.
In addition to training, what are some resources organizations should make available to new leaders?
One can’t possibly master a new behavior through classroom learning alone. While training will provide you with new knowledge, it is our experiences that shape us. Be sure to provide new leaders with the space to demonstrate new skills. Ensure that the new leader’s direct manager is fully engaged with this person throughout their new leader training program. Their direct manager should act as a sponsor for them — developing goals as they go through the program, and assisting with identifying current projects for which these new skills can be utilized.
Mentoring can provide a tremendous learning opportunity for new leaders as well. Align new managers with seasoned, well-respected leaders within the organization. A mentor is invaluable when you’re starting out and can benefit from someone else’s learning curve.
What are the risks to organizations if new leaders are not developed correctly?
Frontline supervisors are the primary driver to higher levels of employee engagement, as they interface with more employees than any other level of the organization. The reverse is also true — frontline supervisors with inadequate leadership skills can decrease levels of employee engagement, leading to low morale, turnover, etc. It can be a slippery slope. If you’re a manager in a revenue-generating area of your organization, low employee morale on a team may also lead to profit loss.
How do you choose the appropriate provider to help create a new manager program?
Not all training is created equally. Make sure whatever curriculum you choose is industry-recognized for presenting quality content. Professional organizations such as the American Society for Training and Development (ASTD) and the Society for Human Resource Management (SHRM) can point you in the right direction of a reputable training provider. A training provider should meet you where you are in identifying the appropriate solution, which should assess what the aforementioned new leader competencies look like in your organization. For example, what does it look like for a new leader to manage change in your company? For some, it may mean communicating change to employees and coaching their teams through changes passed down by upper management. For others it may be having a seat at the table to create change within the organization and facilitating change for their team. Learning activities delivered around these competencies should address what successful demonstration of these behaviors looks like in your world.
Be wary of any provider that does not offer solutions other than a host of classroom-based courseware. Learning occurs in different ways. A good provider will offer blended learning solutions, leadership coaching, assessments and consulting.
Sarah Eppink is Leadership Program Manager for Corporate College. Reach her at (216) 987-2917 or firstname.lastname@example.org.