As a business partner, a lender should understand your business and its needs, says Mike Dalton, vice president of commercial lending at National Bank and Trust. But often business owners don’t consider other banks until they have a problem.
“In a lot of cases it just gets to be old habits. ‘This is what I’ve done since when I started my company. I see no reason to change.’ But quite often there is a reason to at least look at another bank,” Dalton says.
Smart Business spoke with Dalton about how to evaluate your banking relationship to determine if you should switch banks.
What should you consider when choosing a bank, and how often should you re-evaluate where you bank?
There are three categories you need to look at:
- The relationship you have with your contact person.
- Do the products and services the bank offers fit your company’s needs?
- The stability of the bank, both from a financial standpoint and its direction.
At least every few years you should look at some options. If you have specific concerns with your bank, then that’s always a reason to re-evaluate.
What questions should you ask when reviewing a bank?
The important thing is to go back to those three things previously mentioned. You want to look at the relationship you have with the individual you’re going to be dealing with because your lender is truly your business partner. You need to have a good communication stream. Look at his or her background and experience. Does he or she have experience in your industry?
How do you determine what you need from a bank?
That falls back to the relationship; a good lender is going to ask you about your business. If you have a lender that’s just an order taker, that wants to ask you if you want fries with that Big Mac, then you’re probably with the wrong person. You need somebody that’s going to ask you about what products and services you use, what kind of pain do you have in your business. If there are needs that aren’t being met, a good lender can come up with solutions — a product or service that would make something easier for you and your company.
For example, a prospect comes in, wants a loan and provides financials. He or she may be overextended or can’t get what he or she is looking for, so the prospect and the banker need to have a conversation. The banker should tell the prospect, ‘We can’t meet that request right now but here’s a path to get there.’ Commercial lenders especially need to be an adviser for your company, by saying ‘Here’s another way of doing it.’ Or, the lender could help with a plan to get your balance sheet or your income statement in the condition it needs to be in.
The first thing a commercial lender should do with a new customer is sit down with the business owner. Financials aren’t always discussed in the first conversation. It’s more about developing the rapport and getting to know each other. For the banker, it’s about learning the business that you’re in and what you’re looking for in a bank.
What should you look at when evaluating a bank?
A majority of banks are publicly traded companies. Look at their annual reports, the balance sheets, etc. If they’re not a public company, go into the bank and ask to see their reports. The best way is to consult your CPA or attorney and ask for a referral. Your CPA is always a good referral source in that aspect and a good first step.
How do you know a bank will stick by you in tough times?
That’s an impossible question to answer, unless you know someone who has been a client at that bank and gone through a hard time of their own. No banker is going to tell you that if it’s tough times they’re going to ask you to leave the bank, but there are certainly some banks with that history. Ask your individual lender if they have other clients that are experiencing difficult times; how did they interact with them and what was the result of that transaction? Any commercial bank will have had a couple of different clients that have been through some very tough times in this down economy; so, did they work with them or find a way to get rid of them?
How important is it to have loan decisions made locally?
It makes a big difference, as opposed to an underwriter halfway across the country strictly looking at the numbers. When you deal with a local bank, local people who know your market and conditions make decisions. If there are questions they can come out to your facility and sit down with you, rather than you having to go to them.
Should you start a banking relationship before you have a pressing need?
When someone comes to a bank with pressing needs for equipment or an expansion, it could be a red flag. It may seem as if the company wasn’t planning ahead for this need. Or, maybe the bank it was with didn’t want to finance the project. If you think you might have a need coming up that your bank can’t meet, start looking. Think about how often you talk to your banker. If you’re not having regular conversations and they’re not meaningful conversations, then you probably have an issue. As banks, we like to do business with people that we know, so developing a relationship is important.
Mike Dalton is vice president of commercial lending at National Bank and Trust. Reach him at (937) 382-1441 or firstname.lastname@example.org.
Insights Banking & Finance is brought to you by National Bank and Trust
Family businesses typically enjoy employee loyalty and deep-seated pride because the family and the business are one and the same. However, with those advantages come certain risks.
“I tell people often, family business is the best and the worst form of business,” says Jonathan Theders, president of Clark-Theders Insurance Agency Inc. “You’ll do anything for family. It’s always amazing to me how family businesses aren’t run like typical businesses.”
Theders says 90 percent of the businesses in the U.S. are family businesses — a massive segment of the economy.
Smart Business spoke with Theders about the unique risks these businesses face and how to mitigate them.
What unique risks do family businesses have to consider?
One is an informal or complete lack of company policies or business plans. You should document your responsibilities and expectations for each family member in a family charter, but it is rarely done. It might be called an employee handbook in a typical business. If someone doesn’t perform in a regular business, you remove him or her, but it’s hard to do that with a family member.
At the end of the day in a typical business, the employees go home. But you can’t always separate the family business from the family. On holidays or birthdays, it is still business. You also know more of what’s going on in their personal lives than you would know with regular employees, which can pose challenges.
The majority of a family’s assets are tied up in the family business. Everything links to it, and it’s the source of all good and frustration. Divorce, illness and financial hardship normally create productivity issues for employees, but in a family business, it’s more complicated. You have to consider who owns shares of the company and the valuation of those shares. Maybe the business was worth $100,000 when the founder got married, but now it is worth $1 million and a soon-to-be ex-spouse is entitled to half of it. Where is that half million coming from? It’s probably coming from the sale of the business because the founder doesn’t have half a million in cash to pay off the divorced spouse.
If you have HR policies and procedures for general staff for sick days, absenteeism, behavior and dress and a family member is not adhering to those same standards, it also creates problems.
How do you handle special treatment concerns?
You have to be extremely cognizant of how you treat and compensate family and non-family employees. Make sure you are consistently selecting the most qualified individuals to fill roles in the company. This is a huge problem, because most of the time companies fill holes with family members that are not performing as well and other employees subsidize that. Take the family aspect out of it, and it could be easier to have the right people on the right seat on the bus.
How can you mitigate the risk of unhappy employees who are also family members?
If a normal business’s goals don’t match up with an employee’s personal goals, that employee can find a new job. It’s not as easy in a family business. It’s difficult to tell a parent you’re leaving or tell a child, ‘You’re not right for the business.’
That added family dynamic makes failure much more intense, and why it’s important to devise a plan that balances the family goals and business goals. For example, one family business had 70 employees; 36 were family members. The matriarch mom believed everybody with the same last name should be compensated equally whether they were pushing a broom or the president of company. That causes major problems when you have such differences in roles and responsibilities and abilities. Everybody wants mom’s wish to be true, but it doesn’t make good business sense.
How can you stop family conflicts from bleeding over into the business?
The adage ‘Leave your personal problems at the door’ doesn’t apply in a family business. It’s too difficult to separate family and business conflicts.
There’s a lot of sibling, and even cousin, rivalry. You grew up fighting for the last piece of chicken or the last point on the basketball court, and it continues on when you come into the business.
It’s unrealistic to believe that all family conflict can be removed from business, but you have to work harder at establishing those boundaries. Understand the potential family conflicts that can come up and try to address them ahead of time.
Family decisions are often extremely emotional and irrational. One recommendation is family council meetings that encourage members to get together and talk about where the business is, estate planning and other long-term issues. A third-party moderator often needs to be involved because it is so emotional. Another way is involve your board of directors or advisers, which brings an objective view to company performance and future strategy.
How are the transition risks different in family businesses?
The failure rate of businesses moving to the second generation is very high. Statistics show that 85 percent of family businesses don’t make it to the third generation. That’s often because the first generation has trouble letting go or hasn’t prepared the second generation to take it to the next level.
Often, family business owners do not have succession plans or an exit strategy. At 70 or 80 years old their entire personality, their every breath is related to the company; they’ve put 40 to 50 years in, through hard times and good times. They don’t know how to get out, but they are not the ones to lead it into the future.
Jonathan Theders is president of Clark-Theders Insurance Agency Inc. Reach him at (513) 779-2800 or email@example.com.
Insights Business Insurance is brought to you by Clark-Theders Insurance Agency Inc.
This is Part 2 of two articles addressing the trials and tribulations of a company’s growth and development. Part 1 described how the gun slinger role helps drive growth in the early stage of a company’s evolution. The gun slinger is the person who challenges the status quo, the one who takes risks to blaze new trails. They are often the one who leads the company through challenges or troubled times.
In Part 2 of the story, William F. Hutter, president and CEO of Sequent, describes what happens as a company matures and grows.
“When the original entrepreneurial spirit begins to wane, the gun slinger is no longer welcome,” he says. “Questions emerge that spark a re-evaluation of what led the company to where it is today.”
Smart Business spoke with Hutter about how the trailblazing gun slinger might no longer be welcome in a company leadership role.
How does a company’s growth affect leadership?
After a company’s early-stage success, the leadership often begins to question ‘what got them here.’ This questioning and re-evaluation process usually leads to a revelation: ‘We need to move from an intuitive approach to one that is more prescriptive.’
This shift toward structure requires different skills. As a result, what had been the company’s strength is now seen as its weakness, and the early-stage leaders start to look like a bunch of rookies. So the re-evaluation questions begin to foster a need for change, which in turn produces two separate and distinct outcomes — one that is intended, and one that is not.
What is the intended outcome of the growing company’s re-evaluation?
Committees are formed to bring together seemingly disconnected pockets of knowledge from different functions or different departments around the company. The objective is simple — to create the most efficient operation between each of the moving parts of the company. In order to break down barriers and miscommunication, each function identifies how to best do its job as a way to complement other departments or to help the next stage of the process by making sure its job is complete. The process of identifying the skills, talents, and responsibilities of each person and/or department can be a long-term commitment for any organization. This effort helps document and validate the business systems that have materialized out of necessity. The systems and processes that have allowed the company to get to this point in its growth are now challenged and possibly changed in this reconstruction stage. It is at this point that the following questions could emerge:
- How can we improve?
- Why does this or that happen?
- Do we need more forms?
- Shouldn’t everything be consistent?
- How does this business delivery system meet compliance standards?
- Who can we get to help us?
All the while the business has not stopped, new deals are made, clients are serviced, inventory is delivered and bills are paid. But now there is a group of people from around the company trying to analyze the existing systems and processes while getting the day-to-day work done. It begins to look like a group trying to change a flat tire on a moving car.
So, who participates in the reconstruction process? Certainly not everyone can participate. It is usually just a select group that begins to determine how to improve existing systems and processes, documents the suggested improvement (changes), and communicates the same to the various people and departments impacted by these improvements.
Sounds like a perfect scenario, right? People are coming together working on a common goal to improve the organization. But there can be a dark side. Those who are not included in the reconstruction process begin to question and wonder, ‘What are they talking about? How is it going to impact me? Why is he or she in the meeting?’ Then the unintended outcome happens.
How can creativity unintentionally dwindle with this kind of reconstruction?
The reconstruction process is the intended outcome that companies often see as they transition from the early stages of development. However, there’s an unintended outcome — the death of creativity.
This unintended outcome doesn’t just happen one day, it occurs gradually. Over time, the activity of identifying and defining the systems and processes begins to create structure for the company. Management uses this structure to evaluate employees against a standard of processes and systems. However, in the business environment, especially within the service sector, it is very difficult to establish a standard because the variables are constantly changing. Customers are continually challenging the standards. While this looks great on paper, service providers need to constantly change to meet their customer’s needs, which often results in a continual process of customizing to meet those needs.
With this loss of creativity, how are company gun slingers impacted?
It is nearly impossible to build a system or process for every situation or circumstance. When a company tries to do this, it affects the accountability of the individuals in that culture. This leads to a culture where decisions are oriented around risk, not service. The result is a culture built on ‘do’s and don’ts’ driving decisions rather than a culture that embraces creativity and thought leadership to guide decision-making.
I’ve seen this many times — it’s the companies where the people with the strongest voice are the people who follow the system, not those who lead. A fear of voicing an opinion, asking a question or taking leadership fuels an undercurrent of negativity and squelched creativity. And, in the end, it’s the gun slinger, those who aren’t afraid to question the system and challenge the status quo, who pay the ultimate price of this new approach. In the end … the system kills the gun slinger.
William F. Hutter is president and CEO of Sequent. For more information, visit www.sequent.biz. Reach Hutter at (888) 456-3627 or firstname.lastname@example.org.
Insights HR Outsourcing is brought to you by Sequent
James Wendle and EQM Technologies & Energy Inc. are largely reliant upon government spending to drive business. However, with the lack of funds and resources from the government recently, Wendle has had to resort to alternative ways to keep the company flush.
EQM is a $75 million, 240-employee sustainable solutions company that provides consulting and technology to business and government. Wendle became EQM’s president and COO in 2010 after the board brought him in to help grow the business.
“What I bring to the table is accountability and know-how in the construction and the engineering world and growing more on the engineering side and developing that part of the business to get us more diverse,” Wendle says.
That diversity is what Wendle expects will ease EQM’s reliance on government spending. His acquisition strategy is to find companies that will get EQM into different aspects of the environmental and engineering industries. Most recently, EQM, which at the time was Environmental Quality Management Inc., merged with Beacon Energy Holdings Inc. in 2011 to become EQM Technologies & Energy Inc.
“The Beacon merger was a reverse merger,” Wendle says. “Beacon Energy gives EQM an added benefit that wasn’t there before.”
EQM has five different divisions that give the company a wide range of capabilities. Now Wendle is searching for the next company that will bring added value to the business.
Here is how Wendle is diversifying EQM through mergers and acquisitions.
Look for opportunity
EQM was looking to broaden its business and get into an industry that it wasn’t in yet, but one that was similar to the work it did. The company came across Beacon Energy Corp., a biodiesel production business.
“The plant was sitting idle, and we had a strategy that we were going to restart the plant, which we did, and be in the biodiesel business, which we are, and the plant is running now,” Wendle says. “It helped diversify us.”
Wendle and EQM put together an acquisition strategy that focused on finding companies in the engineering business and environmental services business that would help the company grow.
“Growth is an expectation,” he says. “It’s not something that you just do by mistake. Growth of companies is what’s expected, and it’s expected by our board. Growing organically can be difficult, and I think a lot of companies are experiencing that.
“So with our equity partner, we have a company that is an expert at it. They’re on a constant search, and raising the capital to make the acquisitions is something that they do every day and they’re very good at.”
In today’s market, if you’re going to grow, you have to look at growing both through acquisition and organically. If you grow through acquisition, you have to understand the business you’re interested in.
“We set up a model of companies that are in a certain range of what their revenue is, what their margins are, how we can be more of a strategic acquisition and what synergies there are,” he says. “If we merged, how can both firms benefit from it? It is something that we need to know something about. We’re not going to buy a company we have very little knowledge about.”
The other part of acquiring a company is what leadership comes with it.
“That is just as important as the company itself, because we are constantly looking for leaders and leadership,” he says. “When you acquire a company, you also acquire the leadership and you have to look at how those leaders can help you grow in other areas.”
One of the most challenging aspects of the acquisition process is not losing sight of your current business.
“You have to align yourself with a private equity company that can assist you in your search, because it can be very distracting, not only for the buyer but for the seller,” Wendle says. “You have a business to run while you’re doing all this and you want to keep your eye on the ball.
“I’ve seen sellers particularly get so distracted through the process that they don’t watch their business. You have to stay focused and keep your eye on the ball. Don’t get all consumed in an acquisition potential.”
Wendle understands how difficult a merger process can be, so he makes sure he is as helpful to those involved as he can be.
“That’s the way I develop a relationship with the people, because it is a relationship,” he says. “If the process goes well, then the closure is going to go well. It can’t be adversarial. It needs to be very friendly and very professional. Instead of looking at it like you’re out there buying assets, you should look at it as you’re being an advocate of the seller’s and you’re helping them sell their business.”
Integrate the merger
Once a deal is made to move forward with the merger and you’ve gone through and agreed on terms and produced a letter of intent, then you need to go through due diligence.
“We’re really trying to understand more and more about the company and they’re trying to understand more and more about us,” Wendle says.
“The integration actually starts in the due diligence process. You want them to learn as much about you as you learn about them. You want them to learn about what your benefits program is. The key for owners selling is how are my employees that I hired going to be treated.”
EQM gets its HR department involved to look through the merging company’s benefits program and matches it up with theirs.
“Typically ours is going to be overall in a better position, so the new employees are going to benefit from it,” he says. “Then it’s integrating the financial packages or the business systems. How do we communicate financially? Rarely do the new companies coming in have the same types of systems that we have.
“From there, we really try not to make changes. Any changes we have to make we want them to go slowly. What’s working obviously has been working and the last thing you want to do is keep it from working. You want the leaders and the employees to keep on doing what they’re doing.”
In a merger process, there are two sides: a legal side and an emotional side. The due diligence process focuses primarily on the emotional side.
“The legal side is pretty cut and dry,” Wendle says. “The emotional side is more cultural. What kind of culture are they coming into and how comfortable do they feel with it? I start explaining that once I first meet a potential acquisition candidate.
“For someone who’s going to sell their business, it’s a very emotional process and they have to be very comfortable with it. You have to pay attention to how you get the cultures to integrate and whether they feel they still have autonomy.
“That’s the one thing about running your own business that’s good, but now they’re part of a much larger organization and they have more potential for growth.”
Making this transition successful relies on strong communication between the two companies, specifically among leadership.
“You cannot communicate enough,” he says. “We have town-hall meetings. We have staff meetings every week. Each business unit has staff meetings every week and you’re just trying to keep the lines of communication open. It really comes down to employee engagement and whether the employees feel that they have a say and whether they’re being listened to.”
While cultural alignment is a big part of making a merger successful, there still has to be a good fit in other aspects of the business.
“Cultural alignment isn’t necessarily more important, but it is as important,” he says. “There still has to be intrinsic value and what the company brings to the table as far as net income. There has to be value-added services that customers want to buy. What I find is if employees have the right attitude and they’re happy, then they have a pretty good customer base. They walk hand in hand.
“If the employees are not happy, customers are going to hear about it because there are close relationships between the employees and the clients. And vice versa, if our client’s employees aren’t happy, we hear about it.”
EQM’s strategy is to leave the incoming company alone to continue the work it was already doing. You have to make a judgment call whether or not to make any changes to a company you’ve acquired.
“There are two aspects of it,” Wendle says. “When we look at a company we look at the brand. Most the time the companies that we acquire have a good brand and we want them to keep that name and that brand and operate it as a subsidiary, unless it is parallel to one of our business units and our brand may be stronger than theirs.”
Develop a strategy
The key to being successful at acquisitions and mergers and with the growth of your business in general is to have a strategy with goals that you hope to achieve.
“I think the business changes so fast that you can have a five-year plan, but to really put tactics behind that strategy is very difficult to do because it changes so fast,” Wendle says. “It’s been my experience that if you look in two to three years, you’re going to have a better chance of meeting your goals and putting more realistic goals out there. We’re in a different climate now than we were in four or five years ago. We’ve all managed downturns and now we’re trying to grow.”
Wendle is looking to keep EQM doing more of the same it did with Beacon Energy Corp. He is focusing on the private side more so than the public side.
“My belief system is that private industry is not investing in itself right now so there is a pent-up demand for capital improvement and industries are hoarding cash,” he says. “And I don’t think it’s going to matter who the president is, companies will start spending money on capital and start investing in themselves again. The first companies that private owners spend money on are environmental and engineering companies. We are going to be positioned to be there when companies start spending on themselves again.”
One of the biggest aspects of laying out any kind of growth strategy is the need to constantly change to stay ahead of competition.
“Presidents and CEOs have to constantly be looking to reinvent themselves and reinvent their companies,” Wendle says. “I think that the business moves so fast in the world we are in that you cannot restrict yourself geographically and you really have to reinvent yourself every three years.”
Part of that reinvention is attracting entrepreneurial people to your business to keep ideas fresh.
“To really look at new services, one of the keys is hiring entrepreneurial leaders in your company and creating a culture and environment that allows people to think freely and say their mind and be able to put strategies together without being frowned upon,” he says. “You have to create that kind of culture of growth … and have the right kind of people to create that culture.” <<
How to Reach: EQM Technologies & Energy Inc.,
(800) 229-7495 or www.eqm.com
- Acquire companies that will allow you to grow.
- Integrate the acquisition by developing a relationship.
- Develop a growth strategy with two- and three-year goals.
The Wendle File
President and COO
EQM Technologies & Energy Inc.
Born: Alton, Ill.
Education: AAS degree in architectural engineering and a B.S. degree in construction management from Southern Illinois University.
What was your first job and what did you learn from that experience?
When I was 10, I swept hair in a barber shop and I also had a paper route. I was raised by parents who were born in the Depression. I was taught that if you worked hard everything would be fine. So I always had a job and I always had money. It’s about the work ethic. I knew I could get a job if I could prove I could work hard. People would want to hire me.
Who is somebody you look up to in leadership?
Abraham Lincoln. The man failed so many times. He had no way of becoming president of this country because of all his failures, but he did and he was the right president at the right time. Another man that had so much against him at the time was Winston Churchill.
What is the best advice that someone has given you?
I was taught by the CEO of the first professional job that I had to be friendly and be professional, but don’t be abused. Don’t let anyone treat you poorly. Stand up to it no matter what.
If you could do something dangerous one time without consequence, what would want to do?
I would ride my Harley through the Alps.
I recently received a very pleasant note from one of Cincom’s new customers who spoke of the software buying cycle he had just helped lead his company through and offered some words of thanks to the team of Cincom employees with which he had worked.
This customer had read a portion of my writing, which focused on a sales process as a “buy cycle” and being a “servant seller,” which I’ve discussed in previous columns. He also let me know that he saw the main values that I hope every Cincomer embodies — character, competence and commitment — in the employees with which he worked.
We have framed the following value statement at several places at Cincom, and we want all Cincomers to exhibit it:
“Character to act on our beliefs, competence to achieve our goals and the commitment to see them through.”
These core values drive productivity, resulting in profitability and sustainability for the benefit of Cincom and our customers. As an employee or an employer, they are essential minimums. But what do they really mean?
Character includes trust, honesty
Character is embodied by the behaviors and values that elicit trust and commitment. It is doing the “right thing” in a professional manner.
We make these demands of each Cincomer as it promotes an emphasis on seeking solutions instead of casting blame. It leads to a culture of saying “yes” instead of “no” when working toward a solution.
Hiring people with a good character allows you to foster an environment where honest communication is encouraged and differences of opinion are allowed. This is great for internal employees, but it also helps your customers because your dedication to seeking solutions will allow you to provide a high level of service.
Competence is business acumen
Competence is the business acumen and the knowledge required to manage the various functions of any organization.
A truly disciplined organization will continuously learn and consistently apply the best methods to achieve its goals. I’ve strived to make Cincom one such organization over the past 44 years by encouraging entrepreneurial ventures and allowing people to have the opportunity to grow and learn both in their positions and in other areas of the company in which they may be interested.
It is important to allow employees the freedom to fail. To truly have an initiative of self-growth in an organization and live up to the value of competence, employees must feel safe when proposing new ideas or attempting new skills.
You drive with commitment
Commitment may be the most important of the three core values. While it alone cannot be a measure of success, committing to a goal or idea provides the drive or force that will compel a company forward.
I’ve always looked at the value of commitment as a promise to do what has been asked and provide whatever assistance is required to meet a shared commitment.
This commitment can be a pledge to fellow co-workers, the community in which your company is located, or your customers and prospects. It is part of the character of saying “yes” first and always seeking a solution through competent business acumen.
As you can see, each of these three core values is a great trait to possess on its own, but the three work best together. A truly successful organization will be composed of committed individuals who have the competence to continuously seek to learn and the ethical integrity to work in an honest way.
I have been lucky enough throughout my career to employ hundreds of amazing people who embody these values to the fullest. And their importance cannot be summed up by more than that customer who wrote to me: Products don’t win sales cycles, people do.
Do you have the right people on your team? <<
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. Website: tomnies.cincom.com/about/
You’ve probably heard the expression that when you have a hammer everything looks like a nail. That is where we are in social media.
Most social networks have given us hammers or tools to use to grow our business with social media. Facebook has given us pages to use to promote our brand, Twitter has given us accounts and hashtags to theme conversations, and LinkedIn has given us company profiles.
As social networks give us the tools, we jump in and bang away. We use the tools they have given us and try to pound out results. The problem with this approach is that you don’t only have a hammer and everything isn’t a nail.
You don’t only have a Facebook page, and getting interactions on your page isn’t the only way to use Facebook to grow your business.
We are at a point in social media where we’ve been programed to use the tools that the social networks have given us, and we’ve missed the point of what we were doing to begin with.
Every year, I train companies on how to use social media to grow their business, and the most common questions I get are, “How do I get more Twitter followers?” and “How can I drive more interactions on my Facebook page?”
These are the wrong questions.
The questions should be, “How can I use Twitter or Facebook to achieve my objectives?” It may be to drive more sales, get more leads, generate awareness or build brand equity. The problem is that we are asking the wrong questions about our social media marketing and we’ve forgotten why we were there to begin with.
For example, I was working with an organization that runs an event in my neighborhood. They asked me how to get more followers on Twitter. Their problem isn’t getting more followers — it is getting more people to attend the event. The best way to get more people to the event using Twitter isn’t to painstakingly attempt to get more followers. It is to get other people, who already have an audience to talk about the event and encourage their friends and followers to attend.
The point is that it isn’t about getting followers or fans; it is about using the medium to grow your business. Not everyone wants to like you or follow you on social networks. Not even your biggest fans.
Let’s face it, now that everyone is on social media, consumers don’t have an interest in liking or following every single business that they interact with.
For example, I love the Swiffer SweeperVac (and not just because I used to work at P&G). I love recommending it to people because I think it is amazing. I don’t “like” Swiffer on Facebook, and I don’t want to see cleaning tips and random cleaning status updates. Despite not wanting to “like” the Swiffer on Facebook, I talk about it periodically and recommend it to my friends and family.
The reality is that my recommendations and conversations on Facebook with my friends probably lead to more awareness and sales for Swiffer than a passive “like” of its page. Driving word-of-mouth and encouraging conversations can be a better way to achieve Swiffer’s objectives than asking people to “like” its page.
I’m not saying that pages, followers, likes and interactions aren’t important — the point is that these tools are not the only way to grow your business on social networks.
Stop missing the point of social media marketing. Stop asking how to get fans and followers, and start with a blank slate. Once you have knowledge of the social media tools and you have defined your marketing objectives, ask yourself how each social network can be used to achieve your goals.
Don’t worry about the tools that social networks give you. Think first about how each social network could actually drive your business. In most cases, the answer is more about inspiring conversations, activating enthusiasts and driving word-of-mouth than it is about getting people to like your status updates.
On November 28, the 2012 Midwest Social Media Summit will be held at Executive Caterers at Landerhaven in Cleveland, OH. This one-day-conference will offer tips and insights from social media experts and top business leaders who will help you reconsider your strategy or validate your approach.
For more information and to register, click here.
And as a special bonus to our Smart Business readers, we're giving away five FREE tickets to the event! To enter the contest, simply do one of two things:
- Visit the Smart Business Twitter page and follow us. Then just send out a tweet that says, "I don't want to be anti-social. I want to attend the 2012 @Smart_Business Midwest Social Media Summit!"
- Visit the Smart Business Facebook page and like us. Then post to the page, "I don't want to be anti-social. I want to attend the 2012 Smart Business Midwest Social Media Summit!"
We'll draw the winners on Monday, Nov. 19.
For additional information, please contact Anne Hydock at email@example.com or (440) 250-7041.
A good board of directors can be a great support for a top executive regardless of company size. The most common type of board offers advice; however, other boards act as fiduciaries, which have legal liability for the company’s practices – and thus are much more actively involved in overseeing the company. In either scenario, before establishing a board of directors, a small business owner needs to be clear about why he or she wants a board and what the owner is prepared to do to get maximum value from a board.
These steps can help with developing your board of directors:
1) Get prepared. Write down what you want them do, how much time they will need to commit monthly, how long you want them to serve, where you and the company need the most advice, and what are you willing to provide as compensation to board members – if anything. Many nonprofit boards don’t offer payment beyond lunch, but for-profit entities typically provide a quarterly stipend or payment.
2) Choose broadly. Many business owners draft friends and industry colleagues to sit on their boards initially. However avoid picking carbon-copies of yourself. Look for board members with diverse backgrounds and perspectives. It is useful to have board members from a wide range of fields, including legal, finance, accounting and marketing. Organizations such as the U.S. Small Business Administration’s SCORE program of retired business executives and The Alternative Board can connect groups to potential board members.
3) Orient the board. While board members may be familiar with your organization or products, they may have only a broad understanding of your operations. Therefore, it may be useful to provide orientation for incoming board members to cover organizational structure, functional duties for each division and division head, a brief description of each product/program/service that includes its target market, as well as pie charts that display major revenue streams and expenses.
4) Share authority. Many entrepreneurs conceive and build a company according to their liking and their understanding of the customer. Owners and managers should run the day-to-day operations in alignment with the board policies. A good board will encourage the development of processes for rationally researching, analyzing and assessing all aspects of the company. Moreover, few board members want to give up their time to meet to essentially rubber-stamp every executive decision.
5) Reassess your board periodically. What you need today to help your business flourish may not be what you’ll need in three or five years. As you periodically conduct mid-term strategic planning, you should review the skills and resources presented by each board director in light of where you want to take the company. Don’t be afraid to disband and redesign your board.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s Entrepreneurial Winning Women, one of Enterprising Women Magazine’s Enterprising Women of the Year Award and the SBA’s Small Business Person of the Year for Region VI. Her company, Zeitgeist Wellness Group, offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgroup.net.
"Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness.“ W.H. Murray
Last month we discussed how to make the right choices in life and business. We talked of positioning ourselves as business leaders in such a way that we make good, solid choices.
This month, I would like to follow up that article with one concerning commitment and business. Will the two topics complement each other? I believe the answer is yes. In fact, I see the topics as dependent on one another.
Here is my premise: When we work through the process of making a choice and we lack commitment to that choice, ineffectiveness is sure to follow.
First, a few assumptions I hold related to commitment:
- Commitment is more than a head game.
- Commitment is positive.
- Commitment itself is a choice.
- Commitment flows from powerful leaders.
- Commitment is the driving force needed to push our choices into reality.
Now let’s fledge out each of these assumptions.
Commitment is more than a head game.
While our commitments start as a thought process, they cannot stay in our head. One way to state this is:
Commitment is a verb – it’s an action word.
Deciding to commit to a choice is only the beginning – now comes the real work. We must act on our commitment to that choice or, as I said earlier, ineffectiveness is sure to follow.
Commitment without action is worthless. When we have done the due diligence and made a right choice, we must act for that choice to have:
Commitment is so much more than a head game. It involves action.
Commitment is positive.
When business leaders decide to make a commitment to a goal, plan, strategy or new direction, they have made a positive decision.
Let me try to draw the timeline out a bit:
The leader has painstakingly worked through all the considerations needed in order to make a right choice.
The leader now makes a conscious commitment to that right choice and moves out in action related to the commitment.
The choice and the commitment are going to have a meaningful, powerful, results-oriented impact on the leader’s business.
That is positive. When we follow this series of actions, no matter what the outcome, the result is positive. This realization can help us as leaders to see our role and our work in a very different light.
Commitment itself is a choice.
This might seem obvious, but it is important for this reason:
Not committing to a choice that has been deemed “right” is a sure and certain way to open the flood gates of ineffectiveness in our business. Not committing is a choice we make to not do the right thing, the best thing, and the needed thing to move our business forward.
Simply put: committing or not – we make a choice – the difference is very important when it comes to good business.
Commitment flows from powerful leaders.
This is true, but the statement does not go far enough. In my estimation, real, powerful leaders are the ones that can make a choice, commit to that choice and take direct, intense action related to the choice.
This ability flows naturally from powerful leaders. It is second nature to the way they conduct themselves, their teams and their business. It is fun to watch it unfold.
Commitment is the driving force needed to push our choices into reality.
Each time we make a choice we are setting a goal that wants to be achieved.
As Mack R. Douglas reminds us that the good news is:
“The achievement of your goal is assured the moment you commit yourself to it.”
Commitment is the vehicle—the force—that drives our choices from concept to reality. The power of a simple commitment has transformed many leaders and their respective businesses. Without that power, I have seen business after business and leader after leader flounder and fail.
I think commitment is lacking in so many areas in our society these days. In developed and free nations, people are blessed with the ability to make choices, but often we lack commitment.
In business we are confronted with the need to make right choices on a minute-by-minute basis. Each leader and team member is charged with making choices as a significant part of their daily activities. Those choices then require a commitment. This is the game we play in the workplace and in life.
The process is really simple if you think about it: Make a choice. Commit to the choice. Act.
Are you ready?
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email firstname.lastname@example.org or visit her website at www.delorespressley.com.
Lois Kelly is the author of “Beyond Buzz: The Next Generation of Word-of-Mouth Marketing.” She offered her ideas about the top types of stories people like to talk about. If you’re pitching your company to investors, customers, partners, journalists, vendors or employees and you don’t use at least one of these storylines, you probably have a problem. And, most likely, you’re too close to what you’re doing, so you think that you’re uniquely “patent-pending, curve-jumping and revolutionary.”
1. Aspirations and beliefs. More than any other topic, people like to hear about aspirations and beliefs. (This may be why religion is the most popular word-of mouth topic, ever.) Aspirations are helpful because they help us connect emotionally to the speaker, the company and the issues. They help us see into a person or company’s soul.
2. David vs. Goliath. In the story of David and Goliath, the young Hebrew David took on the Philistine giant Goliath and beat him. It is the way Southwest Airlines conquered the big carriers, the way the once unknown Japanese car manufacturers took on Detroit and the way social media is taking on the media giants. Sharing stories about how a small organization is taking on a big company is great business sport. Rooting for the underdog grabs our emotions, creates meaning and invokes passion. We like to listen to the little guy talk about how he’s going to win and why the world — or the industry — will be a better place for it.
3. Avalanche about to roll. The mountain is rumbling, the sun is getting stronger, but the rocks and snow have yet to fall. You want to tune in and listen to the “avalanche about to roll” topic because you know that there’s a chance that you will be killed if caught unaware. This theme taps into our desire to get the inside story before it’s widely known. It’s not only interesting to hear someone speak about these ideas, but they also have the ingredients for optimal viral and pass-along effect.
4. Contrarian/counterintuitive/challenging assumptions. These three themes are like first cousins, similar in many ways but slightly different. Contrarian perspectives defy conventional wisdom; they are positions that often are not in line with — or may even be directly opposite to — the wisdom of the crowd. The boldness of contrarian views grabs attention. The more original and less arrogant they are, the more useful they will be in provoking meaningful conversations.
Counterintuitive ideas fight with what our intuition (as opposed to a majority of the public) says is true. When you introduce counterintuitive ideas, it takes people a minute to reconcile the objective truth with their gut assumption about the topic. Framing views counter to how we intuitively think about topics — going against natural “gut instincts”— pauses and then resets how we think and talk about concepts.
Challenging widely held assumptions means that when everyone else says the reason for an event is X, you show that it’s actually Y. Challenging assumptions is good for debate and discussion and especially important in protecting corporate reputation.
5. Anxieties. Anxiety is a cousin of the avalanche about to roll, but it is more about uncertainty than an emerging, disruptive trend. Examples of anxiety themes abound: 1.) Financial services companies urging baby boomers to hurry up and invest more for retirement: “You’re 55. Will you have your needed $3.2 million to retire comfortably?” 2.) Tutoring companies that plant seeds of doubt about whether our kids will score well enough on the SATs to get into a good college. Although anxiety themes grab attention, go easy. People are becoming skeptical, and rightly so. Too many politicians and companies have bombarded us with FUD (fear, uncertainty and doubt) with no facts to back up their point.
6. Personalities and personal stories. There’s nothing more interesting than a personal story with some life lessons to help us understand what makes executives tick and what they value the most. The points of these personal stories are remembered, retold and instilled into organizational culture.
7. How-to stories and advice. Theoretical and thought-provoking ideas are nice, but people love pragmatic how-to advice: how to solve problems, find next practices and overcome common obstacles. To be interesting, how-to themes need to be fresh and original, providing a new twist to what people already know or tackle thorny issues like how to get IT and marketing organizations to work together despite deep culture clashes between the two.
Here’s a good exercise for your team. Have them read this column and then answer the question: What storyline does our marketing currently use? Then, if you’re brave enough, ask the question: What storyline should our marketing use?
Guy Kawasaki is the co-founder of Alltop.com, an “online magazine rack” of popular topics on the web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of ten books including Enchantment, Reality Check, and The Art of the Start. He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through www.guykawasaki.com or at email@example.com.