Born: Wilmington, Ohio
Education: Bachelor of science degree in business administration, The Ohio State University
Firsts: Carnahan joined Cintas in 1979 as a staff accountant. Since then, she’s been the company’s first female treasurer, first female vice president and first female president and COO. For 17 years, she’s been Cintas’ highest-ranking woman.
On her greatest leadership challenge: The only way I’m going to be successful or this company is going to be successful is having the right people attracting, training, motivating energized teams of people. As easy at that sounds, probably the biggest challenge that any executive has is to make sure you have the right people on your team and that you provide challenging opportunities for them in order to achieve their personal goals and career aspirations.
What is your definition of success?
To me, success isn’t defined by my own personal achievement. I am only as successful as my team, so I measure my own success based on whether my partners are meeting their professional goals. I also define success through my ability to ensure my people have satisfying careers and are achieving their own professional goals.
Whom do you admire most in business and why?
The person I admire most in business is Cintas founder Dick Farmer. Dick was the person who greeted me when I first interviewed with Cintas in 1979, and he has been a tremendous leader and mentor ever since.
One of the things Dick used to always say was the true success of a company was understanding the front-line partner, the person who’s out there in the trenches, day to day. They understand our company, they understand the trials and tribulations of executing the business, and we must respect that. When I joined the company as a staff accountant, I felt that he had the same respect for me. So that’s what I try to emulate every day to be a leader that people look to and people say, ‘She understands me, she understands my trials and tribulations, and she realizes the true potential of my contribution to this company.’
Not long ago, cyber liability insurance was unheard of, but today, it has become critical to any company dealing with personal data that could be used to commit identity theft.
Jonathan Theders, president of Clark Theders Insurance Agency Inc., says that the word ‘cyber’ doesn’t necessarily have to mean computer-related, as the insurance has evolved to include data privacy and network security risk.
“Cyber risk or breach of data can be loosely thought of as anything that can create a vulnerability to the theft of information that jeopardizes a company’s mission, fulfills its clients’ needs or maintains some measure of trust,” Theders says.
Smart Business spoke with Theders about how companies can use cyber liability insurance to protect their customers’ data and protect themselves from lawsuits.
How has cyber liability coverage evolved?
Here’s an example: Let’s say my laptop was stolen out of my car, and it has all sorts of personal information on it. Chances are, the thief just wanted the laptop and not the personal data inside, but what was on that computer? It could be Social Security numbers or credit card information. If that data is stolen, you have a duty owed to protect that data.
The coverage has evolved from solely computer-related data to data in all forms. It could be paper versions; it could be electronic. It started out as a requirement of HIPAA, in which people were required to keep personal information confidential with a heightened level of security.
Five years ago, some people were very electronically driven, but the majority of business wasn’t. Everything was filed on paper. If I wanted to steal information, I’d have to walk out of an office with stacks of paper and files.
Now I could walk in with a thumb drive that you would never know I had and I could extract thousands of records without your knowledge. It’s made data theft a whole lot easier if that data’s not protected the proper way.
What types of threats to data are there?
When you think of cyber threats, you think of a brainiac sitting in a bedroom hacking into computer systems. That concern will always be there, but there can also be the frustrated rogue employee, the one who is thinking about leaving, who wants to gather this information to use it at their next job or who just really wants to hurt the company before leaving. Or the person may want to sell that information because it has value to somebody else.
It doesn’t always have to be this third-party hacker off in the distance; it could be one of your own employees who has legal, granted access to that data. The insurance coverage should pick up not just third-party but first-party and employee actions, as well.
How do you get coverage to protect your company’s data?
To secure insurance coverage, you have to do an assessment of your computer systems. It forces you to look at the areas in which your systems can be penetrated. That makes you a better company because you’re forced to fill in the gaps of potential penetration.
Not everybody has to have an assessment, but any business that is dealing with and holding customer information can have an exposure. In certain businesses, people feel very comfortable with the controls in place and may not need to do a physical assessment. But if the underwriters feel you could have a significant loss, they would require their insurance company to do an assessment of your systems. They use an in-depth questionnaire that tries to find holes in that particular network.
Or you can hire a third-party company, not just to assess your system but to try to hack it and break the system to try to find those potential holes before someone who wants to cause the business harm finds them.
How can data coverage protect you from litigation?
Think of the example of the laptop stolen out of a car. Part of the coverage would be a year or two of credit monitoring for the people who may be affected. Chances are that none of their records will ever have credit problems, but you have a duty to protect that credit information.
If data is stolen and it is used in a harmful way to the person they have loans taken out in their name or credit card bills run up and it has affected their credit scores, leading to collectors hounding them the indemnity would not only make those people whole, but it would give them expenses toward fixing their credit. Most insurance also includes a partnership with a PR firm that can help you regain the faith of your customers.
Also, forensic computer specialists can be hired to determine what was lost. If there was litigation or a class-action suit or someone was adversely affected because his or her identity was stolen and used by someone else, the coverage would pay third-party indemnity.
There can also be regulatory defense fees, so if you have broken some rule of HIPAA or some governmental body and they fine you, the coverage can potentially pick up the fines related to that.
One of the things that matured in the last few years is ransom demands. If someone stole your data and held it for ransom, you can also purchase insurance that would pay that ransom.
Jonathan Theders, CPIA, is the president of Clark Theders Insurance Agency Inc. Reach him at (513) 779-2800 or firstname.lastname@example.org.
Navigating a workers’ compensation claim can be quite confusing. You may question if the claim is valid or if the treatment is necessary, or you may not understand much of the medical terminology. By working closely with a Managed Care Organization (MCO), you should be able to answer all these questions.
Your MCO should be able to help you understand if the injury and allowed condition(s) “make sense,” based on the injured worker’s job description and description of the injury. Your MCO should take care of all medical management and assist in returning your injured workers to work as soon as possible, and keep you informed regarding progress in the claim. Since all state-funded employers in Ohio are mandated by law to use an MCO, you should make sure that the one you choose provides you with all these services.
“It gives employers the medical experts and expertise at their fingertips,” says Karen Conger, CEO of Ohio Employee Health Partnership. “The MCO helps the employer through all of the medical components of a workers’ compensation claim, and works with the providers returning injured employees to work.”
Smart Business spoke with Conger about the role an MCO plays in a workers’ compensation claim and how to choose a good MCO.
What are the benefits of using MCOs?
You have access to medical experts who are involved in every aspect of the claim, from the date of injury to date of closure. A good MCO will contact and educate you to explain what’s going on medically with the injured worker, and will work to be sure that appropriate medical care is provided in order to help injured workers recover and return to work as soon as possible.
Over time, you should see a reduction in your premium to the Bureau of Workers’ Compensation (BWC), as well as fewer days that injured employees are out of work.
What kind of interaction takes place between the MCO, employer and injured worker?
MCOs are neutral parties, and work with employers, providers and injured workers to improve medical care and return employees to work. A good MCO coordinates all medical aspects of a workers’ compensation claim, and is responsible for reviewing every treatment authorization for reimbursement. A case manager is assigned to each claim to help everyone navigate through what can sometimes be a confusing medico-legal system. MCOs provide identification cards to injured workers, to be presented when visiting their treating physicians. You need to make sure your employees know whom to contact at your MCO, and encourage any injured worker to talk with the MCO case manager about any questions because it is important that the injured worker takes an active role in his or her recovery.
What are some key things employers need to understand about using MCOs?
You should understand the MCO’s role regarding medical management and payment of providers. Your MCO should be communicating with you on these aspects. Work with your MCO long before an injury happens to make sure everything goes smoothly when needed. In this regard, workers’ compensation is a lot like health insurance. You may not know what’s on your health plan until you need it, but you know it’s there. With your MCO, it’s better to know ahead of time whom to contact if an injury happens.
What kind of information needs to be laid out for the relationship between the MCO and employer to be successful?
Be aware that MCOs can also help you create a safer environment to prevent injuries. MCOs can educate your supervisors and employees. MCOs can review injury records and track trends in your work environment. For example, if one department tends to have a lot of specific injuries on a certain day, you can work with the MCO to investigate possible causes and solutions.
You can also work with the MCO to set up an aggressive but safe return-to-work program. With workers’ compensation you have both medical and indemnity (lost wage replacement) expenses. Working with your MCO to make sure the injured worker is back with modified duty will impact your indemnity expense. It’s also medically better for the injured worker to be at work instead of at home, worrying about paying bills and wondering about whether he or she still has a job. Develop your return-to-work program with your MCO’s help prior to a claim occurring.
You can also work with your MCO to find a quality health provider to suggest to injured workers. An employee is able to go to any physician who is BWC certified, but many times your employee will not know where to go right after an injury has occurred. Working together with the MCO on this can make a big difference in the quality of care your injured workers receive.
Make sure that your MCO is one of your first touch points once an injury happens. The sooner you let the MCO know that the injury has occurred, and get on top of it, the better it is for everyone.
What should you look for in a good MCO?
You should ask yourself four questions when choosing an MCO:
- Does the MCO understand my company and what I do?
- Does the MCO give me timely information when an employee is injured? You should choose an MCO that will communicate with you in whatever format is best for you, whether that be through the Internet, on paper, or by phone.
- Can the MCO case manager meet with you in person and come out to your site to see exactly what your employees do?
- Does the MCO put an emphasis on safe and timely return to work for the injured worker?
Karen Conger is the CEO of Ohio Employee Health Partnership.
Shortly after the opening credits of the film “Tomorrow Never Dies,” James Bond received a cell phone from the Q Branch of the British Secret Service. The phone was able to transmit incoming and outgoing calls, of course, but it was also able to scan, analyze and transmit fingerprints, and pick locks with a stylized antenna. And it could also fire away as a stun gun.
Not bad for 1997.
A little less than 13 years later, there is nothing that lethal anywhere in the world of telecommunications. There are, however, plenty of developments, especially regarding Voice over Internet Protocol, or VoIP, that might make you feel a little bit like 007. And cut a chunk of money from your monthly expenses.
Developed in earnest during the first Internet boom of the early 1990s, VoIP utilizes the Internet to make inexpensive, if not free, phone calls to just about any number around the world. All you need is a computer, broadband Internet access and a voice on the other end of the digital line. For years, media and industry experts trumpeted VoIP as the next big thing, but the Internet capabilities lagged behind the technology, leading to garbled conversations and snowfalls of static.
With the rise of faster and more efficient Internet access during much of the last decade, VoIP increased in scope and performance. Dartmouth University installed a network across its campus in 2003. Oprah stumped for a popular VoIP service last year. Even the government is starting to take advantage of the new technology, with the Social Security Administration in the process of converting to a VoIP network at its more than 1,500 field offices.
All of that combined means that VoIP is not the next big thing. It is the now big thing.
“The entire industry has gone beyond the experimentation phase,” says Tom LoFrisco, executive director of business product management, AT&T. “Carriers, manufacturers, everyone is headed in the direction where they will be able to supply Voice over IP.
“It’s decided. It’s a business standard.”
Make technology work for you
What makes VoIP so special is what it is able to do for you, for your business, for telecommunications as you know it.
There are the audio and video calls, which are available for either nothing or next to nothing on a number of popular Web sites. But if you choose to rely on those sites and the public Internet to run your business, industry experts say that you will leave yourself susceptible to many of the problems common to insecure data networks, including hackers, spyware, malware and any number of viruses.
A better option might be to install a VoIP network through a larger carrier to ensure that your voice and data will be secure. The cost to install a new network is high — normally between $20,000 and $30,000 for businesses with 50 or so lines, though quotes and actual costs vary case by case — but the savings can add up thanks to the 20 to 30 percent that most industry experts say you can save on your monthly bill. And besides, you will have plenty more tools, the kinds once thought limited to secret agents, to enhance how you do business.
“There are just a slew of new features that existing networks don’t have,” LoFrisco says. “There’s ‘Find Me Follow Me,’ where calls can ring your different assigned handsets simultaneously. There’s integration with other voice applications. And the key is that most of those features can be provisioned and managed at the user level.”
Many of the features provided by larger carriers have been available for more than a decade but at a far higher price. As recently as a couple of years ago, only Fortune 500 companies and the like were able to afford IP features, including unified messaging, where your voice mails are converted to text and arrive seamlessly with your e-mails, and secure access to the company network for employees working anywhere in the world.
Your employees can even work from home with the same equipment, technology and access available to them at the office. Just hand them a VoIP phone, tell them to take it home and plug it in, and they will be able to work and sound as if they are at their desk. This feature is ideal for call centers and companies that offer 24-hour service because it opens the door to hire remote workers. It will also benefit employers who might want to decrease the size of their office and the amount of their rent, but maintain the size of their work force, or smaller companies that want to appear bigger to customers.
“Typically, those are VPN phones that are set up at an employee’s home where they can have all the same features and functionalities that they have at the office,” says Jerry Black, chief operating officer, MVD Communications. “Your clients will never know they’re not sitting in the office, and they’ll have the same access to your database through the phone. That allows you to save money on infrastructure, obviously, because you don’t need as many desks and seats, and it also allows you to spread your base. You can have people in New York and L.A. working, so you can offer service during more hours, and it allows you to hire more employees without them having to physically report to the office.”
Think about the future
Though VoIP networks might initially seem like some sort of futuristic technology that will be difficult to install and more difficult to understand, it will likely be an easier transition than rotary to touch-tone or analog to digital. You might not even need to install new phones or schedule much time, if any, to train employees how to maximize use of the new features.
“With any new technology, it’s always recommended that the end users receive ample training so they can use it,” Black says. “The technology is only going to be as good as those who understand it and use it on a day-to-day basis. That said, if the client is sticking with equipment from the same manufacturer, often the training is minimal.”
If you can figure out how to use your remote control to flip channels, record your favorite shows and insert a DVD with the push of three buttons, you will probably be able to figure out a few additional features on your phone, especially if they help you run your business more efficiently.
Of course, a VoIP network might not be necessary for all businesses. If you have only one office and a handful of employees who never work in the field, if you receive far more calls than you send or if you want to install the newest technology just to say that you have it, you probably have little need for VoIP. But if you have offices in multiple cities, even multiple states, to tie together with one network or if you have any employees out in the field, a VoIP network might be a sound investment.
“In the data world, you can connect anywhere at anytime more quickly,” Black says. “You don’t need a dedicated network. There are a lot more features that a VoIP network allows a user to use that aren’t standard for traditional telecom networks.”
Retirement plan fiduciaries play an important role in plan management, but they also face risks along with those responsibilities.
Mitigating those risks requires constant due diligence, proper documentation of all processes and adherence to basic conduct standards, as fiduciaries who do not follow these standards may be held personally liable for losses to the plan. They may also have to restore any profits made through improper use of plan assets.
“Ongoing due diligence, prudent processes, documentation and consistency are fiduciary best practices and will mitigate any potential areas of risk,” says Stephanie M. Spaccarelli, vice president and regional managing director at Fifth Third Bank.
Smart Business spoke with Spaccarelli about the responsibilities of fiduciaries and how to create good relationships among fiduciaries, plan providers and plan participants.
Who is considered a fiduciary?
A fiduciary is any person who exercises discretionary authority or control over the administration or management of an employee benefit plan or its assets.
The Employee Retirement Income Security Act requires that every employee benefit plan have at least one named fiduciary so that participants know who is responsible for the operation of the plan. The named fiduciary can be identified by title or by name, and could be the employer or an administrative committee appointed by the board of directors. The employer as a named fiduciary may hire outside professionals to manage some of these responsibilities.
What key things should someone be aware of when taking on fiduciary responsibilities?
Fiduciaries should be concerned about:
- Due diligence in the selection of service providers and/or consultants
- Fee and expense structures
- Operational and compliance procedures
These responsibilities include acting solely in the interest of plan participants and their beneficiaries.
Fiduciaries must carry out their duties prudently, follow the legal plan documents, take responsibility for diversifying their plan assets and pay only reasonable expenses.
What risks does a fiduciary face, and how can that person mitigate those risks?
One of the biggest areas of risk is potential fiduciary liability. Most individuals who are plan fiduciaries do not realize that they can be held liable for losses to the plan.
The best way to demonstrate that those responsibilities have been carried out is by properly documenting processes. It’s important to conduct ongoing due diligence that ensures continuous monitoring, evaluation of administrative fees and the overall effectiveness of your plan in providing retirement benefits.
How can a fiduciary create strong relationships with plan providers?
Designing an effective retirement plan can be a daunting task. Plan sponsors are often confronted with complicated rules, an overwhelming array of choices, and the requirement to evaluate and understand plan costs.
Employers with plans of all sizes need someone who can offer objective knowledge and support to help make informed decisions on how to structure a competitive, cost-effective retirement plan.
A good partner should help minimize fiduciary burdens and liability that the plan sponsor may incur, as named fiduciary, by using a documented process for reviewing asset options. The partner should also use innovative approaches to plan design, recordkeeping and administration.
In addition, partners can help when new laws and legislation are enacted, which can have a widespread impact on a plan and its participants. Fiduciaries need to ensure that they are working with a person who can help them make educated, rational decisions in response to these changes.
How can a plan sponsor, as named fiduciary, communicate with plan participants and create relationships with them?
Reaching out to the employees participating in the plan is not always easy, and a plan sponsor needs help so that employees may achieve their retirement dreams. The employer should work to develop and implement a comprehensive education and communication plan. This education program should offer dynamic and engaging content in the form and time frame that the employees desire.
A fiduciary should also provide participants with tools to help achieve retirement readiness by offering options to help build their portfolios and prepare for the future. Plan participants often lack the knowledge and may fail to proactively manage their accounts. A solution endorsed by the recent Pension Protection Act is the utilization of a managed account solution.
By uniquely blending these approaches with personalized plan data and leading industry knowledge, a managed account program can create risk-controlled, competently designed retirement solutions, which can help optimize plan outcomes for both the plan sponsors and plan participants.
Stephanie M. Spaccarelli is vice president and regional managing director at Fifth Third Bank. Reach her at (513) 534-0696 or Stephanie.Spaccarelli@53.com.
Employee usage of company vehicles, while convenient and sometimes necessary, can create costly exposures if the proper policies and procedures aren’t in place.
Jonathan Theders, CPIA, president and COO of Clark Theders Insurance Agency Inc., says there are three main vehicle uses that should concern business leaders: driving personal vehicles for work-related purposes, driving company vehicles for work purposes and driving company vehicles for personal purposes.
“Typically, the focus has always been on company use of company vehicles,” Theders says. “Very little is spent on the things that fall outside that.”
Smart Business spoke with Theders about how to protect your company from the risks associated with employee driving.
What issues can arise from personal use of company vehicles?
Some businesses don’t allow people to take their vehicles home, but a lot of businesses do. Think of a contractor who has a pickup truck that’s used at job sites. It’s not necessarily convenient to always come into the office in the morning before going to the job site, so the employee takes the vehicle home.
Then, if the contractor’s friend needs help moving something and he has the pickup, he can find it hard to refuse to help. Or, he may not have an extra car, so he takes the company vehicle to the grocery store, or his spouse uses it.
There are many different factors that should concern a business because insurance and liability always follow the vehicle. So if you allow an employee to take a vehicle home and that person allows a spouse or child to use it, or he or she uses it for another purpose, that liability comes back to the owner of the vehicle the company. There is no escaping that liability on a company-owned vehicle.
How can a company protect itself from these situations?
You need to make sure the company has a driver policy. The company needs to qualify who will be allowed to drive its vehicles. While drafting the policy, the company’s decision-makers need to say, ‘If we allow personal use, it’s only going to be the employee driving for personal use.’
Some companies allow the spouse to drive for personal use. If you do that, you need to do the same due diligence on the spouse that you would do for an employee because that person is riding on your liability. So if someone has three DUIs and takes the company truck to the neighborhood pub, that liability is going to come back to the company, even though it’s an employee’s spouse, not the employee.
More times than not, companies just don’t have a policy for personal use of company vehicles. They don’t think about it because they’re more concerned about driving to and from the job. It becomes a nuisance for some people because they don’t see that as a great exposure. But when you think of the range of liability for the company, it can be quite amazing.
What should be covered in a company’s driver policy?
When you set up criteria for a vehicle operation policy, you want to make sure all your drivers are evaluated and that you discuss if the policy will affect only employees. If you’re going to allow personal use, will you allow other members of the family to drive? If you allow other members to drive, how are you going to do due diligence to make sure they are safe and tracked? Are you going to put a restriction on how far they can drive? Are you going to stick to within 50 miles of their home, or will you allow them to take it to Florida for the family vacation? I’ve seen kids take company cars on spring break, and the company ends up bearing the burden of that claim for what never should have happened.
Another risk factor that should be addressed is the use of vehicle restraints like seat belts. You also need to deal with potential driver distractions, whether that is the use of cell phones, text messaging or other drivers on the road.
All these issues can be written into policies, then communicated to your employees. Provide training to keep your drivers safe while they are operating motor vehicles under the scope of their employment.
Your employees have to realize the risks to which the company opens itself by allowing these things to happen. Maybe the executives are comfortable with that, maybe they’re not. Maybe your insurance company is comfortable with it, maybe it’s not.
The involved parties need to have these discussions ahead of time rather than get into a situation and wish they had addressed it (proactive versus reactive).
How can your company’s driver policy affect the amount you spend on insurance?
These decisions certainly have an effect on exposures and rates from an insurance company especially if you have incidents.
When you are working with underwriters who are pricing the risk, you need to realize that they only know what they have been told. You can draw a better picture for them if you can say, ‘This is the policy we have in place. We don’t allow personal use of the company vehicles.’
Whenever you draw a clearer picture, it makes them feel more comfortable, which gives them a reason to lower rates.
Jonathan Theders, CPIA, is president and COO of Clark Theders Insurance Agency Inc. Reach him at (513) 779-2800 or email@example.com.
From franchisee to franchisor and from both sides of the Atlantic, Jim Hunter has seen all the faces of franchising.
Through it all, the president and CEO of the handyman franchise operation House Doctors, has observed some secrets to success that are steady across oceans and industries.
“Most successful franchisees have energy and enthusiasm and pride in their business,” says Hunter, a native of Scotland who oversees the national operation made up of around 450 employees in 103 territories. “If you get that in your office and in your team, then that overflows.”
So Hunter starts with enthusiastic franchisees. Then he accelerates the training process to get them up and running before their energy has time to fade.
Since he started this “Fast Start” program, his franchisees are opening their operations 70 percent faster than before. And last year, the program paved the way for both the fastest-growing and the highest revenue-generating franchises in House Doctors’ history.
Smart Business spoke with Hunter about how to build enthusiastic franchises.
Find enthusiastic candidates. I’ve seen some great franchisees who have built a fantastic business and went on to create great wealth. All of these very successful franchisees had three main traits: One, a very strong determination to succeed that enabled them to overcome any challenges that they had. And they had a real energy and enthusiasm and pride in their business and what they were doing. Finally, all of the really successful franchisees are able to work in partnership with franchisors and follow a proven system.
[We] always start with a discovery process where the franchisor is learning as much about the candidate as the candidate is learning about the concept. It’s very much a two-way interview process, first by telephone and then when we meet during discovery day at our home office.
As part of our discovery day, we have the candidate complete a personality profile questionnaire. We compare the results to existing successful franchisees and look for similarities. We’re not only looking for the personal traits like determination and enthusiasm for the concept but also certain business skills based on their work history.
We start off with an overview of the company: how it started, where it came from and where we’re going. The vision and the buy-in really start with the discovery day. [You can see] they’re excited and they’re giving a response like, ‘Oh yes, I see what you mean,’ and, ‘Yeah, I agree with that. Wow, that’s the way to go.’ They’re giving positive responses to what we are telling them. If they didn’t, then we wouldn’t award them a franchise.
Get details out of the way. Training starts before the actual classroom training. We have to prepare the new franchisee for business ownership. The Fast Start program is made up of over 100 items on a checklist, and we go through every step with new franchisees over a four- to five-week period before they come to classroom training.
It covers everything from putting together your business plan to ordering your first van.
The Fast Start includes things like, ‘Have you got an accountant?’ and helping them set that up, right through to starting to do their business plan and the marketing plan.
It’s all in order of when you need to get it. For example, you can’t get your fliers or your business cards printed until you have your telephone numbers.
A CEO probably has had the experience setting up a business or being involved in these types of things before. But you’ve got to imagine that the new franchisee may not have. Based on our experience of what’s needed as someone sets a business up, we started right from the basics. It could be something as basic as registering your computer and ordering fliers that are going to go out after you open. But they’ve all got to be thought of and done prior to you starting the business. If you start up your own business without something like this, then possibly you could forget something.
Attention to details is important and getting the details in the right order. We’ve done a lot of the details before our training so when they’re coming to train, they’re already enthused.
Involve your team in training. When they go into the classroom training, it takes them right from the basics to completing their business plan, completing their marketing plan, completing their budget, and everything to do with personnel to marketing their business to dealing with customers. We term it as, ‘How to run your business.’
We use all our internal staff because these are the guys and gals who will be working with them. Obviously, the marketing manager comes in and does some marketing. The graphic designer will come in and do the stuff on controlling the logo, for example. We have the legal department tell them about insurance and trademark stuff.
Each member of our team takes part in the training. We don’t have a trainer, per se, but that’s good because it obviously gets them familiar with the people who they’ll be dealing with.
Hit the ground running. Everything is aimed at opening them as soon as possible after training because we don’t want to lose the vision. We don’t want them losing excitement. We want them to get out into the marketplace fresh with what they’ve learned.
We intend them to go straight from training. ... They have everything they need to start their business as soon as they finish their training.
Other franchise systems struggle with getting their people out and up and running quickly after training. They would be sitting in training and still trying to organize their company, still trying to organize the fliers and still trying to order their van. They’d be coming out of training still trying to do these things.
By doing that Fast Start, they’ve done all that stuff before they go into training. During the training, they’re focused. And then when they finish training, they can actually hit the ground running.
How to reach: House Doctors, (800) 319-3359 or www.housedoctors.com
After all, he’s in charge of protecting those who protect us. As the president of the Security & Survivability division of global defense contractor BAE Systems, he provides products to keep government officials and military personnel safe in high-threat areas. Russell heads three lines of business that produce vehicle armor and restraints, protective materials, and personal gear.
To do that, he has 4,000 of the parent company’s 106,400 employees under his wing.
And, as if those responsibilities didn’t demand enough of his attention during regular office hours, Russell also took his senior staff on a recent tour of all 10 locations — including one in Germany — to conduct town-hall meetings at each office.
So with all that weight riding on him, Russell’s schedule is understandably packed. But no matter how busy his day is, he makes time for one thing: his employees.
“You’ve got so much on your plate,” he says. “It creates anxiety as a leader because you’ve got this long list of things you need to attend to. If somebody comes in, you spend time with them. You’ve got to force yourself to do that.”
After seeing other leaders bark out orders like a commander-in-chief, Russell knows the difference that interaction can make. When you take the time to listen to employees’ viewpoints, you make them contributors rather than just assets.
Whether employees come to him to share ideas or receive their evaluations, Russell espouses the philosophy of listen first, talk second.
“In my career, I think what’s helped is listening to people,” he says. “That’s one of the key leadership aspects that has been important.”
But a listening ear is just the beginning. Russell also engages employees in conversations to explore all the facets of an issue and eventually land on the same page.
The time Russell spends listening to employees manifests in improvement all around — whether it’s their development, his growth as a leader or the overall sense of buy-in that comes from understanding each other’s perspectives.
“I very much rely on key talent around me to help me make good decisions,” Russell says. “If you don’t have people around you that you trust to give you advice that you can take, then you’re just a very limited leader.”
Give questions, not answers
The quickest way to get employees pointed toward your desired outcome is to simply tell them how to get there. But Russell has learned that the best way to rally his troops is to take the time to guide them toward the answer — not just hand it down as an edict.
“There is a cliché, old-school style of pound the fist on the desk and demand results and yell and scream,” he says. “It might get people to jump for a little while, but ultimately, it generates a lack of respect that, in the long run, doesn’t work toward good results.”
Like many others, Russell has reported to those leaders in the past. Before you even finish explaining the problem, they start spouting their solution.
A more motivating approach requires not just a patient ear but actually engaging in a two-sided dialogue. After you discuss their ideas, take time to explain your own.
“Listening is engaging people in the process,” says Russell, who takes the same disciplined approach when making family decisions at home.
Even if you don’t adopt employees’ ideas, you can still achieve agreement. Focus your efforts on bringing them on board with the direction you do take.
“It’s certainly easier just to say, ‘Well, I’m the boss. We’re going this way,’” Russell says. “Then they may not be fully engaged behind the idea.”
Employees want to be involved in the creation of a solution — even if it’s your solution, not theirs. To get their buy-in, give them questions instead of answers. Approach it like a gentle debate, presenting information and counterarguments to help them see a perspective other than their own.
Russell, who doesn’t like the connotations of conflict carried by the term “debate,” thinks of it more as a realization process.
“Obviously, turning back to them and saying, ‘OK, so what do you want to do about this?’ is a good thing to do,” Russell says. “[Ask,] ‘Have you thought about it this way?’ Bring up points that they may not have thought about.”
Of course, you won’t have to personally lead each employee to a revelation. While some of them are conditioned to present an issue and immediately ask for direction, others will offer their own suggestions without a nudge. In those cases, you’ll just serve as a sounding board while employees arrive at the solution unassisted.
Regardless of how involved you are as a guide, the sequence should always be the same: Listen first; talk second.
“Generally, I try and give people the opportunity to chime in [and] give their idea before I give mine,” Russell says. “You’re anxious to move on to other things but spend the time to listen to people. The biggest reason is it motivates them. It empowers them.”
Reflect on employees’ progress
Thanks to his busy schedule, Russell doesn’t have time to evaluate every employee’s performance on a daily or even per-project basis. But that doesn’t mean he neglects his employees’ development altogether when their personal development review comes around every year.
He does, however, rely on them to carry some of the weight. The process begins with their self-assessment. Russell asks employees to come to their review prepared with their own list of personal strengths and weaknesses. After they evaluate themselves, he steps in.
Instead of keeping track of an employee’s every high and low, Russell takes the time to review their big-picture strengths and weaknesses a few times a year. It’s sort of like throwing the spaghetti on the wall and seeing what major issues still stick after several months.
“It’s only when you sit back and you reflect that you highlight more high-level positives and negatives,” he says. “Sometimes you deep-dive into a project or a program and how somebody behaved or specific incidences that have occurred, but it’s just a reflection.”
Even though hindsight is 20/20, you can’t rely on memory alone to judge an employee. For example, plenty of performance-measuring data and feedback from others feed into Russell’s reflections. Engaging these other resources not only saves you from having to know everything about each employee, but it also provides a more complete assessment than you alone could.
“Tangible measurements are a good thing,” Russell says. “Unfortunately, not all businesses are set up to provide tangible measurements to all functional areas.”
“Some people you can hold directly accountable, especially if they’re running a business and you’re looking at profitability or customer satisfaction metrics,” he says. “But it’s the functional support areas that are a little bit tougher to get tangible measurements on.”
So when specific data is lacking, yo
u can make up for it by turning to the people around that employee for their input.
Throughout the year, their feedback comes informally as either complaints or kudos. But Russell also asks for it directly through 360-degree evaluations of directors, vice presidents and other managers. Colleagues above, below and beside those employees are asked to rate them on topics such as performance, customer focus, interest in developing others and teamwork skills.
“When the person who’s doing the assessment isn’t known — a discreet type of evaluation — you’ll get more honesty,” says Russell, who lets employees choose whether they want to leave their names on the online form.
Even if you’re not doing every aspect of the assessment yourself, the combination of cut-and-dry data, employees’ own observations and evaluations from co-workers will give you enough fodder for a conversation. Even meeting with your direct reports — and having them do the same with the employees under them — illustrates that the leadership cares about the development of its team members.
Don’t rush through reviews
Employees who walk into Russell’s office for their personal development review shouldn’t expect to stay at the receiving end of the table. Instead of rushing through the process, he uses their assessments as a quid pro quo opportunity, opening his ears to their criticisms so he can improve, too.
“That’s another one of those old-school approaches: a superior fills out an assessment, you go into a room for 15 minutes and the superior tells the employee what they did bad and good, and that’s the end of it,” Russell says. “It’s got to be much more than that. There’s got to be open dialogue, not just a one-way assessment.”
But it’s not as easy as simply asking them to evaluate you. Thanks to the innate hierarchy of corporations, you have to create an environment where they feel comfortable pointing out their boss’s flaws.
“Humbling yourself goes a long way,” he says. “People are typically nervous sitting across from a superior. When you let that person know that you don’t know it all, you’ll generate an openness.”
You can tell employees frankly that you welcome their feedback. Russell, for example, opens the meeting by saying the review is as much about their improvement as his own. But that won’t erase the apprehension if employees are scared to point out a superior’s weaknesses or prepared to only play defense and justify their job.
They’ll be more likely to follow your initiative than your invitation, so you have to set a pace that shows you’re receptive to criticism.
“One of the biggest things to do is get somebody to relax, because a review is worthless if they’re intimidated,” Russell says. “One thing that you can do is point out things that you know that you need improvement on yourself.”
When they hear you admit that you don’t know everything, they’ll see you as a leader who’s willing to learn and eager to improve. If you take the first crack at yourself, they won’t be as intimidated to offer their observations.
Russell reiterates to employees that he relies on their support because he rose through the organization so quickly, riding the wave of a series of acquisitions. Most recently, for example, he held the position of senior vice president of Armor Holding Inc.’s Ground Vehicle Survivability Division. So he had already proven himself capable of running a billion-dollar business by the time BAE acquired Armor in 2007.
Still, he realizes that the experiences and observations of his employees can make him an even better leader as the company grows. Taking the time to hear employees’ praises and criticisms is a small price for the payoff: the opportunity to improve yourself and your leadership style.
“I just may not have as much experience as somebody else who’s been doing this for a lot longer,” Russell says. “I would be foolish not to take the advice of a bunch of smart people around me.”
How to reach: Security & Survivability, BAE Systems, (513) 881-9800, (800) 697-0307 or www.baesystems.com/sss
Basic insurance covers direct damage to your property and its contents in the event of fires, hurricanes, freezing pipes and many other perils, but what about the money your business would have been making during that time?
Business interruption insurance can help your company keep making money — even when it’s physically impossible to do business.
Rick Theders, CEO of Clark-Theders Insurance Agency, Inc., says this coverage should be part of a comprehensive property insurance program that encompasses loss of income as well as the extra expenses that result from a business interruption.
“The intent of business income insurance is to keep you in the same place you would have been in if your business had not been interrupted by a responding insurance peril,” Theders says.
Smart Business spoke with Theders about how this coverage can help you stay in business.
How does business interruption coverage work?
If your building is struck by lightning and catches on fire, your insurance is naturally going to pay to repair or replace the building and the contents that were damaged. The extension of coverage to loss of business income is going to continue the income that you would have had if the business operations had not been interrupted by damage caused by the lightning strike.
If you are a manufacturer that produces items for your customers, the lightning strike may have caused you to call your customers and say you were going to deliver items to them tomorrow, but now the business is temporarily shut down. The customer might wait for you to get back in business, but more than likely, it will cancel its order with you and take its business elsewhere.
In that regard, your business would be impacted because of your customer’s decision to take its business elsewhere. Business income insurance would pay for that loss of income.
The intent of the insurance is to cover the cost of your profit and overhead that you count on to sustain your business. It wouldn’t cover the cost of raw materials that you didn’t use to not make that product or the energy costs. But it would cover payroll of key employees and lease or mortgage costs you’ve committed to pay. That’s important because your bank might say, ‘I am sorry you had that fire, but you still owe us your monthly payment.’
Also, it would cover your estimated profit. If you would have made a 20 percent profit generating those products to customers, it would pay for that loss of profit.
How can you cover the extra expenses that can result from business interruption?
Business owners can get a combination of loss of business income coverage with extra expense insurance. In the same situation with the lightning strike and fire, the manufacturer’s extra expenses to generate the product and deliver it to the customer are covered, including relocating to a new space, moving equipment that was not damaged to that location and changing the utility services to the new location.
The customer still receives the product it ordered from you, but it’s much more expensive to generate because you couldn’t do it at your primary business location.
You can even subcontract that part. Ask a friendly competitor to make the item, or ask if you can use its facility after it closes for the day. You’ve incurred extra expenses to maintain your business elsewhere.
The extra expenses are money that insurance makes available to continue operations and not be forced to pay the loss of business income because you are still going to make income off your business practice.
This same insurance applies for all types of businesses, not a particular industry. You still need to see customers. Your customers might be able to go to a temporary location and the insurance would pay to advertise to them, to send out special mailings and to pay overtime for staff.
This combined coverage is the broader, better form of insurance. It says to the insurance company, ‘Just help me stay in business as best as I can during this misfortune.’
How can you develop a plan for business interruption?
You should develop a risk management process. Your insurance agent should ask you, ‘What keeps you up at night? What would the consequences of an event to your business be that would just devastate you? What makes you most vulnerable?’
If that is an earthquake, then here’s earthquake insurance. If it’s losing electrical power, here is some insurance that is going to respond to that concern. Part of that is asking, ‘What other plan can we work with you to put in effect so you have continuation of power?’ You can invest in a generator in the back of your business, so if power is interrupted, you start up your personal power generators to continue your business.
Another peril of insurance that you can choose to buy coverage for is utility service interruption. That takes care of the same loss of business income and extra expense losses but also includes damage done to the utility service of electric power. You can also purchase coverage for overhead transmission lines.
Try to plan ahead. Find that critical thing that would cause financial distress or concern. Then find out what you can do to buy insurance to reimburse you for that concern or, better yet, help you continue your operations.
Rick Theders is the CEO of Clark-Theders Insurance Agency, Inc. Reach him at (513) 779-2800 or firstname.lastname@example.org.
Mark Sneider has been watching competitors expand in an attempt to combat the down economy. They’re offering discounts and looking beyond their core markets for business.
But Sneider knows he doesn’t have to do anything new to succeed. Instead, he zooms in on best practices his employees have been using all along.
“It’s all about staying true to approaches that have been effective and adopting new approaches that we know have been effective for others,” says the founder, owner and president of RSW/US and its sister company, Lead Architects. “It’s staying true to your core. The last thing you want to do is look scattered, not focused and not value-added.”
Sneider encourages employees — nearly 20 between the two lead generation and business development consultancies — to share their best practices to add value to the company. That approach has led RSW/US to double-digit growth since its 2005 inception.
Smart Business spoke to Sneider about instilling a value-added mindset in your employees and encouraging them to learn from each other.
Establish a value-added mindset. When new employees start, I tell them there’s one thing that they need to remember, and that one thing is adding value. Tell your people to constantly add value to your existing client base. Add value when we reach out to prospects, and then the last value-added dimension manifests itself internally — let’s think about ways we can add value to our own organization by finding new ways to improve processes.
Adding value is a hard thing to do because it’s easy just to take the staid and set course of action. The hard thing to do is to take the step back and think about what extra step can I take to improve this situation.
It’s really just showcasing the variety of ways beyond the expected that you can bring value. I tell prospects that we don’t like to think of ourselves as just a lead generation firm. By positioning ourselves that way and talking about all the other things that we can do, that’s how we set ourselves apart.
Showcase and share best practices. Get your salespeople to think about ways that they can add value to the prospects’ world. It could be things as simple as find an interesting article and push it out to that prospect. If they happen to click through to that article, use that as the mechanism to then circle back with that prospect and try and engage with them. It’s giving them a reason why they should sit down with you. It’s fairly 101ish kind of stuff, but people forget about it when they’re in desperate straights. Learn what their needs are, and then showcase how the solutions that we’ve provided for our clients parallel their situation.
You’re going to have salespeople that just follow the predictable course of action. And then you’re going to have some salespeople who are constantly adding value — they’re probably selling more than anybody else. Let’s find out what they’re doing and how they’re talking about it. It’s getting them together to brainstorm, to speak to all of the things they do for their clients. The salespeople need to be talking about those other things. Then draw those that we think present the greatest value and package them to help others figure out how to talk about them.
One of our good performers … put together a whole PowerPoint presentation and presented her ideas to the organization. The organization knows that she’s one of the star performers, and they know that the benefit to them in mirroring some of those approaches is going to be of value to them in their own selling efforts.
It’s easy to say they shouldn’t feel threatened or like less of a salesperson because of it. The key is getting a peer to make those presentations versus having management push those things down.
There was some collaboration between this woman before she made this presentation and myself, making sure that she was sending messages consistent with the messages that I wanted to be sending to the rest of the organization.
Mandate practices to get results. Then make sure that we’re following through on those things, whether it be managers managing these salespeople or weekly status meetings talking about what’s going on, how programs are going — as long as they know that the intent is not to single out and punish but to get them to a better place. So I think a lot of it has to do with how it’s positioned, and it’s got to start at the top.
If you’ve got some butthead running the organization who focuses more on mistakes and doesn’t applaud successes, then that’s going to be a tough thing to effectively move forward to an organization. So if you recognize you’re the butthead, maybe you have other people kind of manage that through the process and follow through on it, people that are a little bit more forgiving.
You have to be able to show results, certainly. Like in our case, [employees] clearly see the success that this person has achieved as a result of the work that they’re doing. Some of it has to be forced upon [others] in order for them to see results. So there are certain things you just have to mandate and make sure that they’re following through on.
Every quarter, we set specific objectives for the team as a whole. It’s just going back and reviewing those objectives, making sure that what we’re doing is helping us achieve them, having open dialogue about the things that they’re doing, the tools that they’re using.
It’s communicating that there’s some basic requirements that have to be set up upfront, that, ‘These things have to be done this way in order for this organization to move ahead. We have data points that suggest if it’s followed through on the way we’re suggesting you follow through on it, here’s what it can do for you. You can sell more. You can get more commission. You can have happier clients.’
How to reach: RSW/US, (513) 559-3101 or www.rswus.com