Many Northeast Ohio companies receive raw materials or components from European suppliers, or ship their finished products to European customers. The cargo is transported by truck or rail to New York or Baltimore, and then loaded onto ocean-going ships bound for Europe — a longstanding logistical process for Midwestern businesses. However, this route is also expensive, slow and has lengthy delays, especially at the Port of New York.
An innovative concept is being developed to solve these problems. Small, Seaway-sized ships could be loaded at the Port of Cleveland, located next to FirstEnergy Stadium. The Spliethoff ocean carriers then begin a dedicated round trip to Antwerp, Belgium. Dubbed the Cleveland-Europe Express, its service is scheduled to begin in April 2014.
Smart Business spoke with Bradley Hull Ph.D., Associate professor and Reid Chair, Department of Management Marketing and Logistics, John Carroll University, who together with the Dutch Consul laid the groundwork for this project, to learn more about this project and what it could mean for local businesses.
What are the business advantages of the Cleveland-Europe Express?
The advantages are the savings that could be realized in time and money. The Cleveland-Europe Express takes four to five fewer days to make the trip to Europe than the existing route. This makes the Cleveland-Europe Express ideal for Just In Time manufacturers or anyone needing quick deliveries.
Money can also be saved using the new route because water is inherently the least costly form of transportation. The existing route incurs excessive costs from the unnecessary and expensive overland transport to the East Coast, double handling at the East Coast port, expensive ocean carrier rates to Europe, and lost time due to East Coast congestion. The Cleveland-Europe Express is all-water and as such avoids many of these problems and costs.
Companies also gain more control over their cargo since this method relies on fewer people handling the products. Businesses are no longer dependent on long distance overland transportation and handlers in New York. This means companies face less risk of loss or damage.
The service will run on a reliable fixed schedule. Initially, the service will run once per month to Europe. As business grows, the service could become bi-monthly or weekly.
What could the establishment of the Cleveland-Europe Express mean to Northeast Ohio?
Companies contributing to the success of the Cleveland-Europe Express help create jobs in Northeast Ohio. Ports are ‘engines of job creation.’ As business at the Port increases, the downtown area becomes a more attractive location for distribution centers and manufacturers that would benefit from prime transportation access. If successful, the Cleveland-Europe Express could contribute to the revitalization of downtown Cleveland and ultimately Northeast Ohio.
How was the Cleveland-Europe Express developed?
For the past eight years there has been a strong feeling that such a service could be economically viable. John Carroll University and the Dutch Consul have conducted analyses, held four Seaway conferences, partnered with Erasmus University of Rotterdam to get a European perspective of the project’s practicability, given numerous presentations to local and regional groups, and organized a trade mission to the Netherlands was held this past summer. There is much excitement building for the potential of this shipping route to revitalize Northeast Ohio and increase the viability of Northeast Ohio companies. ●
Bradley Hull Ph.D., Associate professor and Reid Chair, Department of Management Marketing and Logistics, John Carroll University. Reach him at (216) 397-4182 or firstname.lastname@example.org.
Insights Executive Education is brought to you by John Carroll University
No company is immune to fraud. You may have stringent internal controls, and rigorous hiring and training programs, but still employees may find ways to violate standards.
“It is not enough to have a strong personal ethical code. It needs to be communicated and enforced to become corporate culture,” says Mariah Webinger, Ph.D., an assistant professor of accountancy at John Carroll University. “When it comes to enforcement, you need to proceed cautiously to make sure you are achieving your goals.”
Smart Business spoke with Webinger about dealing with employee fraud.
What should you do if you suspect an employee of fraud?
First, sit down, take a deep breath and think. It is never a good idea to confront a suspected employee right away. You probably don’t have the evidence you need to prove either innocence or guilt. Confronting the employee puts them on guard and makes it even less likely you can get that evidence.
Secondly, you could be wrong. Accusing a suspected employee can be very demoralizing to your workforce and creates an atmosphere of suspicion, forcing bystanders to choose sides.
Third, you never want to interview a suspect when you are emotional. Acting on emotion rarely makes good business sense, so give yourself a break to cool down before you make any decisions.
Finally, communicate the issue and the consequence internally, and perhaps to external stakeholders. When you do, try to stick to the facts and avoid value statements about the employee or the situation.
Does the type of employee misconduct affect consequences and communication?
All types of employee misconduct should be handled thoughtfully and not emotionally. However, the type of conduct will influence the consequence, which in turn will influence how it is communicated. If it is a minor policy infringement, it may be acceptable to have a reprimand as a consequence and an internal memo for communication.
Embezzlement or fraud should result in termination, regardless of size, since these violations are willful and never accidental. Also, fraud indicates an internal control weakness. These weaknesses need to be rectified and should be communicated.
Should a fraud perpetrator ever be retained as an employee?
The short answer is ‘no.’ Usually two reasons are given for wanting to retain an employee after a fraud: The fraud was a small amount or the person is a great employee. All frauds start small. Keeping a dishonest employee on the payroll sends a message to your other employees that fraud is acceptable as long as it is small or if you are a valuable employee. No employee is as irreplaceable as your corporate culture. If they are a good person and a talented employee they will have a great career elsewhere. The consequences of violating an ethical code might be the most important business lesson they will ever learn.
When should you pursue legal action?
Collect your evidence first. Law enforcement is usually overworked and generally not an expert in business. It is unlikely that they will pursue something unless there is a very tight case.
When do you need to hire a forensic investigator?
Generally your current employees will be more efficient at collecting evidence than an external expert because they are more familiar with your company. However, if the issue is contentious or involves office politics, it is helpful to have an independent investigation.
Also, that the fraud was perpetrated suggests there is a weakness in the internal skill set. Usually fraud involves accounting and/or information technology. If you don’t have internal experts in those fields, try to hire a forensic investigator with that expertise.
Where can you find a forensic investigator?
Avoid the yellow pages. It is hard to differentiate between a good forensic investigator and an imposter. Ask your auditor or accountant. They may not be able to do the work for you because of independence issue, but they can usually refer you to someone who can. Also ask your attorney. Most likely they have worked with forensic accountants or business experts and can recommend someone. If all you have is a Web search or the phone book, ask for references and check them. •
Mariah Webinger, Ph.D. is an assistant professor of accountancy at John Carroll University. Reach her at (216) 397-4225 or email@example.com.
Insights Executive Education is brought to you by John Carroll University
One of the toughest challenges facing managers is how to plan for profitable growth in an uncertain future.
Look back ten years at your customers and their needs, your employees, market structures, delivery systems, regulatory policies, social systems, the economy and technology, and it’s clear how much things have changed. It’s a safe bet that at least that much change can be expected in the next ten years, but what kind of change will occur?
Compounding the uncertainty is the necessity to keep managing current activities for efficiency and growth while planning for a future that may call for different activities altogether.
Smart Business spoke with Dr. Jaume Franquesa, visiting assistant professor of strategic management, and Dr. James Martin, associate dean and professor of marketing, both at the Boler School of Business at John Carroll University, about ways businesses can position themselves to take advantage of tomorrow’s opportunities.
How do you get started?
Success in the long run is all about marshaling the right capabilities and resources and using them to create sustainable competitive advantage for the future. Start by identifying and assessing your current capabilities. Generally, there are two categories of capabilities that allow you to do both the day-to-day activities and plan for an uncertain future.
The first category is operational capabilities, which are the things you currently do that give you a competitive advantage in your current markets. That is, the skills, competencies and resources that you use to try to satisfy your current customers’ needs better than competitors or at a lesser comparative cost, leading to higher profit.
The second category is dynamic capabilities, which are the capabilities that will help you to plan for the future. There are generally three types of dynamic capabilities.
The first is the ability to do environmental scanning and sensing. Being able to identify and track trends, and understand how they might be important to your business is a critical competency to develop.
The second dynamic capability is being able to turn the trends that you identified as important to your business into opportunities that can be pursued further. Innovative thinking is the cornerstone of this capability.
The third dynamic capability is being able to quickly re-configure your internal resource base in a way that creates a sustained competitive advantage for pursuing the opportunity. Understanding which resources are valuable, along with adaptive resilience and flexibility in your organization are key ingredients for this capability.
The stronger you are at each of the dynamic capabilities, the better your strategy and its implementation.
How can a manager foster adaptation and flexibility with regard to long term strategic direction?
As you think longer term, the uncertainties about investments in strategic direction can cause significant anxiety. This is really tough, but it is at the heart of building an organization for the future.
One useful approach to navigate this uncertainty is to apply ‘real options’ logic to investments for the future. Instead of making early choices under uncertainty and committing significant resources to a particular strategic direction, consider engaging in multiple directions that will keep several windows of opportunity open. In this way, you can delay commitment to any of them until more information is available and some of the uncertainty is resolved.
To do this, you must design the program of investment in each strategic initiative as a series of sequential experiments, with a continue/discontinue evaluation point at the end of each experiment. That is to say, at the end of the period you have the option of continuing to invest as planned, narrowing the scope of the project, or abandoning the project.
The goal is to create and manage a portfolio of alternative strategic options. You do this by investing in multiple stage-gated projects designed to seed the development of new capabilities or to explore potential new markets. The keys to the management of this portfolio of strategic options are:
- Project selection.
- Design of investment stages in a way that maximizes learning while minimizing the cost of each strategic option.
- Portfolio diversification.
The dynamic capabilities that you develop give you the foundation for creating this portfolio of
strategic options. ●
Dr. Jaume Franquesa is a visiting assistant professor of strategic management at the Boler School of Business at John Carroll University. Reach him at firstname.lastname@example.org.
Insights Executive Education is brought to you by John Carroll University
Are you “results-oriented?” Do you have a “proven track record?” Would you consider yourself a “problem solver?” According to LinkedIn, these are some of the most overused buzzwords on profiles across the popular professional social network.
A problem in today’s saturated marketplace is finding your unique place as a professional. Whether you are a self-employed entrepreneur or an executive at a large corporation, you are in charge of your own career. A successful brand relies on its unique positioning in the marketplace. Likewise, a successful businessperson must understand the importance of crafting a personal brand. Your unique identity sets you apart from the competition and contributes to the overall success of your company, says Jenna Drenten, Ph.D., assistant professor of marketing, Department of Management, Marketing and Logistics, Boler School of Business, John Carroll University.
“We choose one product over another because it offers something special. The same is true for today’s professionals,” says Drenten. “In today’s competitive marketplace, business professionals must perfect the art of what I call personal branding — developing a unique personal brand and actively promoting that brand to others. Personal branding is not only beneficial for your own career, it also benefits your company’s brand image.”
Smart Business spoke with Drenten about the importance of branding yourself and key strategies for managing a successful personal brand.
What does it mean to brand yourself?
Branding yourself means to develop a unique professional identity and coherent message that sets you apart from others either in your company or in your industry. If you are a CEO or an entrepreneur, you may say, ‘I have enough on my plate by building and managing my company’s brand, much less my own.’ But branding yourself is just as important, if not more so. Think of business leaders like Steve Jobs and Oprah Winfrey. Their personal brand images are synonymous with their companies. Regardless of your career status, you must commit to being the brand manager of your own personal brand.
What is your unique selling proposition?
In branding yourself, the goal is to differentiation from others but consistently within your message. What specific characteristics and field-related expertise do you have that others may not? Try to develop a personal positioning statement. It should be a concise, one- to two-sentence statement that reflects your unique value as a business professional. Consider creating a short tagline for yourself that captures who you are and what sets you apart.
What is your personal brand management strategy?
Once you have pinpointed your unique brand, you need to communicate it to others. Your goal is to actively promote and manage your personal brand. Branding yourself involves creating a unified message across all outlets. Consistency is crucial, especially in today’s digital age. If someone were to search your name on the Web today, what would they find? Take control of your online brand image by creating a personal website outlining your achievements or by starting a blog that allows you to share your distinct industry-related ideas. Your personal brand management strategy should be proactive and should reflect your natural capabilities. For instance, if you excel at face-to-face communication, attend networking events and schedule coffee meetings.
How does branding yourself benefit your company?
In marketing, a phenomenon called the ‘halo effect’ suggests consumers make more favorable judgments of a particular product because of positive biases toward associated brands or people. For instance, consumers are biased toward brands endorsed by their favorite celebrities. The same is true for personal branding. If you develop a unique personal brand, your company gets included in the positive halo of your success. The connections that you make and the network that you develop can be transferred to your company.
How does branding yourself benefit your career?
You are the product and your employer is the customer. Branding yourself allows you to market your skills to meet the customer’s needs. Regardless of the stage at which you are in your career, it is important to stay marketable by creating a unique brand for yourself, separate from your identity within your company. This gives you more opportunities for mobility both within and outside of your organization. As your personal brand awareness increases, you may be invited to speak at industry events, contribute to industry related stories, and so on not because of your status within a company, but because of your branded expertise within the wider industry.
Jenna Drenten, Ph.D., is an assistant professor of Marketing in the Department of Management, Marketing, and Logistics in the Boler School of Business at John Carroll University. Reach her at email@example.com.
Any business that leases anything for an extended period of time — generally, more than one year — will be impacted by a proposed new accounting standard.
“This may appear arcane to some, but the new rules will have a major impact on the reported financial position of many companies. It has been estimated that this may add hundreds of billions of dollars to the existing liabilities on businesses’ balance sheets nationwide,” says Gerald Weinstein, Ph.D., CPA, a professor and chair of the Department of Accountancy at the John Carroll University John and Mary Jo Boler School of Business.
“Therefore, it is likely that your firm’s financial statements will be affected. At a minimum, expect to see changes in the ways in which leases are being conceived of for recognition and measurement purposes,” says Weinstein.
Smart Business spoke with Weinstein about what the proposed accounting standard would do and how businesses can prepare for the change.
What do you need to know?
Under existing Generally Accepted Accounting Principles (GAAP), leases that are in essence purchases of all of the inherent value of a leased asset are capitalized. Capitalization requires both that the leased asset and related liability for future lease payments be recorded onto the balance sheet. GAAP dictates use of four indicators, any one of which is considered evidence of a so-called capital lease.
Leases that do not meet at least one of the four criteria are operating leases, and are not capitalized. Operating leases are accounted for by expensing the lease payments as they accrue. An example is leasing an office inside an office building owned by another entity.
An operating lease is generally favored by businesses, as it makes the accounting simple in that it avoids recording the liability and depreciating the underlying asset. Further, not booking a liability can improve a company's debt related ratios. Users, however, would prefer to know about all liabilities the entity has and hence want these liabilities booked. These cross-purposes are being resolved in the proposed standard by essentially requiring all leases to be capitalized.
What will the new standard change?
What defines a lease as a capital lease is changing under an exposure draft (ED) issued jointly by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on May 16, 2013, and the four indicators noted above will no longer apply. Everyone will be affected if this becomes a final standard in 2014.
All leases, with one exception, would be recognized with a lease liability for the present value of the payments, which must be made over the lease term. As lease payments are made, the effective interest method is to be used to accrete the liability. An asset would be reported and written off to expense over time.
The ED defines the manner of write-off. It depends on the type of asset of which two are defined. A Type A asset is personal property whereas Type B is generally real property. Type A assets are amortized on a straight-line basis unless another method better represents the pattern of use. For Type B leases, the amortization would be the difference between the annual straight-line expense and the interest incurred on the liability.
The most notable change in terms of the direct financial impact is that what has previously been accounted for as an operating lease will now be treated as if it were an owned asset, even if title to the asset will never transfer to the lessee. An office suite leased inside an office building would be accounted for as a balance sheet asset and subject to annual amortization.
What is the exception?
Lessees can elect a policy wherein leases with a maximum possible lease term including options to renew of 12 months or less, are accounted for using a method like that currently available for an operating lease.
How is a leased office akin to an asset purchase?
Leases are being redefined as a contract that conveys the right to use an asset for a period of time in exchange for consideration. The contract must depend on the use of an identified asset and convey the right to control its use. The use of the asset can be either explicit or implicit, such as the lease of a floor of a building. ‘Right to control use’ is slightly different from existing GAAP, which calls it the ‘right to use’ an asset.
Why should you care about recording such a lease as an asset?
Companies should be concerned because booking the asset also means booking the liability. For most businesses, this will have a negative impact on solvency ratios, including debt to assets and debt to equity. This change in the standards could cause your bank loans that have covenants requiring certain solvency ratios to go into technical default.
What can you do to be ready?
Companies should determine which leases they have that will now need to be capitalized, prepare pro forma financials, and determine the impact your solvency ratios. If the new accounting rules cause your debt ratios to deteriorate, consider contacting your lending institution to see if you can re-negotiate the covenants.
While the final standard may undergo some tweaking, changes to lease accounting have been in the works since 2005 and professional accountants expect the standard to be finalized in its current form. The comment deadline on the ED is Sept. 13, 2013.
Gerald Weinstein, Ph.D., CPA, is a professor and chair of the Department of Accountancy at the John Carroll University John and Mary Jo Boler School of Business. Reach him at (216) 397-4609 or Weinstein@jcu.edu.
Insights Executive Education is brought to you by John Carroll University
Without question, entrepreneurship is the hottest thing going today. Rarely will you pick up a paper or magazine that does not either feature a fabulously successful entrepreneur or talk about some of the literally hundreds of programs or courses being offered to help you become that entrepreneur.
But, what is it really? In part the interest is a reaction to today’s younger generation – 75 percent of high school seniors do not want to work for a large organization. This is a reaction to the re-engineering of American business that has taken place during the past 20 years. These young people have seen the impact on their immediate families and they want to do something that will afford them more control of their lives.
Educational institutions, ever mindful of changing demographics, have jumped on the band wagon. The Internet revolution and the many successful IPOs of Web-based entrepreneurial firms have heightened the visibility of entrepreneurship. There is an increasing interest in entrepreneurship among the general population, but particularly among younger adults. As a result, colleges with formal Entrepreneurship centers have grown from a handful in 1990 to more than 200 today.
Smart Business spoke with Mark Hauserman, director of The Muldoon Center for Entrepreneurship, about common myths about entrepreneurship and what traits are common in successful entrepreneurs.
Are entrepreneurs necessarily young men and women?
You may be surprised to learn that a recent Kauffman Foundation research study revealed that the average age of the founders of technology companies in the U.S. is a surprisingly high 39 — with twice as many over age 50 as under age 25. With the average life span increasing and more ‘necessity entrepreneurs,’ those who start businesses because of the scarcity of job availability at existing companies, being created every day, this number will probably increase.
When you gain experience, you probably know a lot about a lot of things. If youth is the answer, why are so many venture capitalists over 50? And most of the better ones are over 60. Don’t short change your experience. Investors get a lot more comfortable if they know you have been around the block a couple of times.
How is entrepreneurship learned?
The best start for an entrepreneur is to gain experience. This often means working for a company that may not have the biggest buildings on the block, but has an entrepreneurial attitude and will challenge you to spread your wings and continually take on new tasks.
While all jobs consist of ‘things you must do,’ the better businesses are also continually looking for better ways to serve their customers and markets. Every business owner responds to ideas that will make the company more money. You may not think you are an important cog, but the owner will sit up and take notice when you offer better solutions to the existing business strategy.
Don’t be afraid to make mistakes. I have heard Edward Crawford, Chairman of Park Ohio and self-made entrepreneur, say that the common denominator in entrepreneurship is failure. Not every idea you have will be a winner, but people will respect you if you get up after being knocked down and get back in the game.
The younger entrepreneurs get it. A healthy 44 percent of young entrepreneurs feel that business failure is perceived as a learning opportunity.
How will you know when you have arrived?
In most cases, there was no ‘grand plan.’ The entrepreneur just started working and as they solved more and more problems, work became fun. The classic sign of an entrepreneur is they cannot let it go. Unlike the idea in the popular culture that they are looking for the big score, they love what they do.
I played golf with a guy a couple of years ago who had just been offered $8 million in cash for his company. I am afraid I jinxed the deal when I asked him what he was going to do in a month after a long vacation and a shopping spree; no answer and ultimately no deal. He was only 42 at the time, so he will eventually sell, but it was way early and he was having too much fun.
Mark Hauserman is director of The Muldoon Center for Entrepreneurship. Reach him at (216) 397-4572 or firstname.lastname@example.org.
To learn more about the Muldoon Center and our programs, visit: www.jcu.edu/Muldoon.
Insights Executive Education is brought to you by John Carroll University
Business owners and managers are working longer hours these days in the face of mounting competition, trying to achieve superior results in a constantly changing environment. Many of them consider entrepreneurship as some elusive strategy that moves the billion-dollar idea from the pizza parlor to the IPO. In other words, says Mark Hauserman, how does this affect me?
Smart Business spoke with Hauserman, director of the Muldoon Center for Entrepreneurship at John Carroll University, about things to consider when determining your strategy.
What is the first thing to consider?
People often believe that entrepreneurship is the province of the young and gifted, particularly when it comes to intellectual property. However, the average age of the successful start-up entrepreneur is 38. If you think that seems old, consider that a recent study by the Ewing Marion Kauffman Foundation says that ‘in every single year from 1996 to 2007, Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20-34.’ This is also supported by the findings of Charles Eesley and Edward B. Roberts in their study titled ‘Entrepreneurial Impact: The role of M.I.T.’’
Would you rather have a bright idea or experience?
Experience will win out every time. Good ideas come mostly from people who have experience. Jay Brand, Ph.D., an expert on creativity, supports Malcolm Gladwell’s (Outlier,s Brown, Little & Company 2008) thesis that 10,000 hours of experience is the best preparation for achieving that ‘breakthrough’ result. Follow the money. Few venture capitalists invest in ideas; instead, they invest in people, and the best ideas are nearly always backed by experience.
Is entrepreneurship a learned behavior or the result of natural selection?
The question we are most asked in the academic environment is, ‘Can entrepreneurship be taught?’ The fundamental building blocks of entrepreneurship can definitely be learned. A working definition we use for entrepreneurship is ‘seeing an opportunity that others did not see, and taking action.’ Long before entrepreneurship became a buzzword, our institution was churning out successful private sector business owners. In the five counties surrounding Cleveland, there are more than 500 companies owned or run by our graduates. How did we do it? By leveraging a 125-year history of teaching students to think critically, one of the hallmarks of Jesuit education, and a building block of entrepreneurship.
What is the role of change in your business and how do you use it to your advantage?
At a recent meeting, I asked successful business owners to raise their hands if they were doing the same thing they did five years ago. As you might expect, no hands went up. So how do you get out in front of change? A key element is opportunity recognition, fostered by your experience. There are few people who have the experience you have and who know more about your business than you do.
The first two courses in our entrepreneurship program are Creativity, Invention and Innovation and Idea Development. Freshmen and sophomore college students usually don’t know enough to realize that their crazy idea just might work. We encourage them to think of solutions to problems they see right in front of them. One instructor uses the ‘bug list,’ asking students to walk around the campus and come back with five to 10 things that bug them. Then they are asked how they would solve the problem. Do your customer service people know what bugs your customer? Do you have a way to mine these nuggets?
Remember that profound change is often incremental. You do not have to turn your business upside down to leverage your team’s great ideas. By the way, the student idea is rarely ready for prime time. This is where your best, most experienced associates need to weigh in.
Tips to help you create a good environment for this strategy:
- Don’t have functional fixedness; if you spend too long on a single problem, all solutions may start to look the same.
- Avoid surveillance while working, Micromanagement will kill most good ideas.
- Don’t constrain your own choices, for example, ‘The budget will not support it.’
- Don’t predetermine the result by your method of evaluation.
- Don’t do what the competition does. They might be good, but they don’t know everything.
Mark Hauserman is the director of the Muldoon Center for Entrepreneurship at John Carroll. His undergraduate degree in business administration is from John Carroll and he is a Beta Gamma Sigma graduate of the M.B.A. program at Indiana University. Hauserman joined his family’s business, the E.F. Hauserman Co., in 1974 as a member of the corporate financial staff. After transferring to sales, he held a series of positions of increasing responsibility in both sales and sales management, working in Atlanta, Ga.; Rochester, N.Y.; and Cleveland, Ohio. In 1984, he bought a subsidiary, Decorative Veneer, from the company. In the 1980s and 1990s, he helped to develop a diverse group of smaller companies in information management, consumer marketing, office furniture and coating technologies by assembling the management teams and providing strategic direction and capital. He has now divested his ownership of these companies. In October 2004, he was hired as the executive director of the Entrepreneurs Association at John Carroll University and in 2006 he became the director of the Muldoon Center for Entrepreneurship.
John Carroll students are given many opportunities to develop their entrepreneurial talents through the University’s Edward M. Muldoon Center for Entrepreneurship. The university’s multidisciplinary program can help open doors for students who gain entrepreneurship skills and knowledge from both business and liberal arts faculty, and through hands-on experiences with ‘real life’ entrepreneurs who are members of the university’s Entrepreneurs Association that also volunteer to coach John Carroll students. John Carroll’s entrepreneurship program has been recognized by Bloomberg Businessweek as the 18th best program in the nation and the best undergraduate entrepreneurship program in Ohio. This marks the second consecutive year JCU has made the list; the program rocketed from 43rd in the nation last year.
Visit www.jcu.edu/muldoon for more information.
Insights Executive Education is brought to you by John Carroll University.
Fast forward to the day you step down from your post. How will you be remembered by those left to continue the work? Will your name be thought of fondly, or will people be cheering your departure?
A leader’s legacy depends on how those who follow think about leadership. Likewise, it depends on what they value in a leader. Like an Olympic athlete, your job is to make the most difficult of tasks look easy and graceful. At least that’s what people want, but this is a tall order, says Scott Allen, Ph.D., assistant professor of management, Department of Management, Marketing and Logistics, Boler School of Business, John Carroll University.
“On what are you being judged?” says Allen. “In actuality, leadership is in the eye of the beholder. However, there are some leaders who rise above the rest and truly stand out. This is not magic, nor are people born with it. It boils down to five core elements, which make up a ‘leadership scorecard’ of sorts. Great leaders – the Olympians – have succeeded in five core areas, which I call the 5 Ps: personal attributes, position, purpose, processes and product.”
Smart Business spoke with Allen about the 5 Ps and the best practices of leaders.
What are the personal attributes of a leader’s scorecard?
These are your traits, knowledge, values, skills and abilities. Are you credible? Ethical? Trustworthy? Intelligent? A ‘no’ on any of these will be a difficult pill for many to swallow. People may not know what you know, but they know how you make them feel. So in many ways, personal attributes are all about what you bring to the role. Of course, each one of us brings great strengths and areas for development. The question is, do you have an eye on both, and who is providing you with unfiltered feedback?
How do you use the position of leader?
Is your power used to develop and build others? Or are you perceived as an individual who hoards his or her information and power? Likewise, do you use the position and your authority in a consistent manner, or do you play favorites, lack consistency and abuse your discretion?
How does the leader’s purpose answer the question, ‘Leadership for what?’
Leaders are clearly aligned around a cause or purpose and influence others to follow. Another way to think about purpose is strategy. Is your vision and the strategy behind it one that motivates and resonates with others? Some leaders inspire a shared vision and have the ability to manage that vision into reality. Others fail to inspire the troops. Think about the last time you spoke to, the masses – did they leave energized? Did you?
What practices/processes does a leader use?
The practices/processes of leadership describe how you achieve your purpose and how you move the group, organization, or community from point A to point B. For instance, is your style a democratic one where many feel a part of the endeavor, or is it coercive and autocratic?
What is the end product?
Some wonder if the success or failure of the leader can be determined prior to knowing the final result. In the end, people will determine if they feel that they are better off because of your efforts. Has your time been filled with growth, innovation, and exciting ventures? Or, have your efforts failed to achieve desired results?
Why do all five Ps matter in leadership?
As a leader, you and your senior team need to have an eye on each one of these items. You may have great success and three of the five, but fail in two, and the result is that you are not perceived as a strong leader or leadership team. For instance, you could have the first four Ps in place but lack results and suddenly your job is in jeopardy. Likewise, you could have the last four Ps in place but be perceived as unethical, untrustworthy, and unapproachable. Again, your legacy is tarnished. Just think of all the CEOs and politicians who struggled with one or more of the 5 Ps. Who stands out from your own career? Who did all five well? Who did not and how did it impact their career?
How do you better manage your legacy and ensure that each of the 5 Ps are well balanced?
First, have the 5 Ps on your radar and critically analyze your current state. How are you perceived, how do you use your position, how do you inspire a vision, and do you have systems in place to ensure results? An open and honest conversation between you and your team will likely reveal a great deal. If this culture does not exist, build it.
Next, develop outlets and access to unfiltered feedback. You may not always agree with the feedback you hear, but at least you have a pulse on how you, your vision and your team are perceived. If you are viewed as a person open to positive and negative feedback, you will have access to more information. However, if you are perceived as a person who holds grudges, or responds negatively or even abrasively, then it is likely people will avoid sharing information and honest feedback.
Finally, implementing a simple continuous improvement cycle where you and your team can receive feedback/coaching, gauge progress, identify gaps, and then adjust can take you to the next level of leadership.
Monitoring the 5 Ps will create buyin for your vision, develop trust in you as a leader, ignite employee enthusiasm and productivity, solidify your legacy as a leader and create a system of continuous leadership improvement within your organization. Leaders have a responsibility to help create a culture that is engaging, innovative, and productive. Isn’t that where you would like to work?
Scott Allen, Ph.D., is assistant professor of Management, Department of Management, Marketing, and Logistics, Boler School of Business at John Carroll University. Reach him at email@example.com.
“What is it that makes budgeting for marketing so much more difficult now than it used to be?” James H. Martin, Associate Dean, Director of Graduate Business Programs and Professor of Marketing at John Carroll University, has been hearing this question a lot lately. To learn more, he spoke with a panel of experts including Sara Stashower, Visiting Professor at John Carroll University; Jason Therrien, CEO at Thundertech; and Tom Bernot,CMO at Optiem. All three had similar perspectives on this problem. They all said that there is a fundamental shift in thinking about marketing from the traditional view to a new perspective, but not all companies have made the shift yet.
Smart Business learned more from Martin about their collective insight.
What is the traditional view?
The traditional view of marketing communications has the primary objective of pushing out a non-interactive campaign message that gives the marketer total control over the communication process. This happens in three basic steps:
- First, you create a campaign message you think your target market ought to hear.
- Second, you select those media that will allow you to tell that message to the most people in your target market at the lowest cost per impression.
- Third, you evaluate the success of the campaign based on changes in sales (or awareness levels, or knowledge, or brand attractiveness, etc.).
Because technology has added what seems like a tidal wave of options for media and performance metrics, the task of allocating a marketing budget across communication channels has exponentially increased in complexity.
From this view, allocating marketing resources has become a much more complicated problem simply because there are so many more options from which to choose.
Is there a better way to think about it?
The traditional view of marketing is based on the premise that communication is a controlled one-way process and media represent efficient mechanisms to get the message out. Unfortunately, this frames the problem in a way that doesn’t match the real value of the new media. You need to re-frame your strategic thinking from the traditional view of marketing communications to a new way of looking at the problem.
This new view has an entirely different premise regarding marketing communications. The new approach is based on developing opportunities for conversations with your customers on topics that are important to them and that you can contribute to because of what you do. Engaging your customers in conversations brings them closer to you. It builds trust and confidence in your brand. It creates an affinity to you that the old approach simply cannot accomplish. And that’s the real value with the new media.
But, to do this well means you have to want to talk with your customers, not at them. You must want two-way communication. You provide your expertise and they provide their input. It's about which media are the best conduits for those conversations, not which media are the best at pushing your message to your customers. This is not just a different way of saying the same thing. This is a different way of thinking.
How do you know what conversations to have?
In which conversations you engage depends entirely on who you are and on who your customers are. But, here are some pointers. Start with your expertise. Then think about who your customers are and what they want to know about.
Having trouble figuring out what your customers want to know about? Whether your customers are OEMs, suppliers, distributors, retailers or consumers, customers want to know about things that will improve their lives. They want to know how to experience less uncertainty, they want things to be easier, they want problems solved, they want to be healthy, they want to grow as a person or as a company, they want to feel connected to others, they want to feel like they are part of something important, they want a life fulfilled, they want to understand, they want to feel like they can make a difference, they want fewer hassles, they want job security, they want to do their job better, they want to be successful, they want to be entertained, they want to learn...
Conversation topics are limitless. As a company, you have expertise. How can you use this expertise to add to any of these conversations?
How do you have these conversations?
This question has a different flavor from the traditional question of how to allocate budget across media. The question is now about the best venue for creating a conversation and how to connect across media to engage and continue the conversation. The answer is a function of what conversation you are having and with whom you are having it. You want to construct a network of conversations that engage your customers in a way that builds affinity with you and your brand. The result of this engagement is that customers will want to go to your website for your expertise.
Ultimately, marketing communications is about sales, but the more direct question now is about the effectiveness of the conversations you have with your customers. Engaging customers with content that matters to them and inviting them to participate in that content will bring your customers closer to you.
James Martin, Ph.D., is Associate Dean and Professor of Marketing, Boler School of Business, John Carroll University. Reach him at firstname.lastname@example.org.
Pick up the newspaper these days and serious economic turmoil, widespread political unrest and, frankly, just some weird weather patterns are pervasive.
How do you prepare your organization for the future when confronted with the challenge of perpetual doubt about how that future is going to look? How do you lead your organization when the path ahead is so uncertain? Your work force is one of your best hedges against an uncertain future, but it has to be developed into a resilient, adaptive and creative problem-solving team.
Although it is tempting to pull back from employee development efforts to reduce costs during periods of high economic uncertainty, investing now in your employees will have a big payoff down the road.
Smart Business spoke with Scott Allen, Ph.D., Assistant Professor of Management, Boler School of Business at John Carroll University, about how developing employees puts businesses ahead of the competition during any economy.
So where do you start?
First, preparing your work force for the future means you have to think differently about your employees. Every employee should be seen as a potential leader on any given day, which means developing leadership capabilities in each of them. Sending employees back to school, providing on-site training, or providing in-practice development opportunities become important mechanisms for developing the kind of work force you need.
Although it’s tempting to look at these mechanisms as costs that can be cut, these should be seen as opportunities to invest in a resource that can protect your organization from the economic and political stormfront you are faced with today. Second, as an expert in leadership development, I suggest four primary areas for developing a team-oriented culture in an organization: 1) skill building, 2) personal growth, 3) feedback opportunities and 4) conceptual understanding.
What are the future skills needed for a resilient and adaptive problem-solving team?
In addition to the obvious functional business knowledge and industry-specific content knowledge, the following skill sets are high on the list of just about every leadership development expert.
Communication Communication is always critical in an organization. As technology continues to change the way we can communicate, people in a team-oriented organization will have to be versatile and effective in every communication medium.
Analytics There are mountains of data available to everyone in an organization and the quantity of data available will increase in the future. The ability to translate data into usable information will create a work force that will mean the difference between being able to adapt to a rapidly changing environment and being left behind.
Language and culture Developing among your employees the skills and sensitivity for successfully working with people from other countries and cultures will substantially increase your organization’s effectiveness moving upstream or downstream in supply chains of the future.
Creativity and innovative problem-solving Economic hard times and global uncertainties produce myriad challenges for finding growth and sources of increased efficiencies. Once the ‘low-hanging fruit’ is gone, companies that have developed a culture of creativity and innovative thinking among employees will continue to grow and prosper through better problem-solving.
How can an organization enhance personal growth?
In our book, ‘The Little Book of Leadership Development: 50 Ways to Bring out the Leader in Every Employee’ (Scott Allen & Mitchell Kusy), we discuss leadership development in the new economy — leadership development that aligns with the flow of the organization and not against it. This approach develops leadership ability in real time while real projects are being completed. Creating a resilient organization in this economy means innovatively developing the next generation of corporate leaders on a dime, and on the fly. For personal growth, the trick is helping front line managers build a system of continual development that takes individuals and their team to the next level each and every day.
Think about your own organization for a moment. Are managers intentionally assigning their team members with challenging assignments, giving them opportunities for the personal growth that is essential for being able to adapt to changing environments? Each employee needs assignments, tasks and activities that take their knowledge, skills and abilities to new levels.
Where is the payoff for creating ongoing feedback opportunities for employees?
Consider the struggle your employees face when deciding what to behaviors to practice or what skills to develop. Are your people practicing the right stuff? Providing real time feedback means getting your employees where they need to be faster. Also, if you want employees to develop and grow, then the feedback should be provided in a way that encourages reflection. Just as football players watch videos of the game and the Army conducts After Action Reviews upon completing a drill, are there ‘de-briefing’ sessions that connect the dots, make sense of failures and celebrate the wins? If not, a learning opportunity has been missed.
What is meant by conceptual understanding?
Part of being resilient and adaptive requires a ‘big picture’ view. Too often, we define jobs as a set of tasks and then set the employee to work on those tasks. A resilient and creative team will need to see where their work fits in the bigger picture for the organization. Employees need to see how everything fits together. Companies who provide this ‘big picture’ find that their employees are a tremendous resource for problem solving during critical challenges.
Scott Allen, Ph.D., is Assistant Professor of Management, Boler School of Business at John Carroll University. Reach him at email@example.com.