Wednesday, 04 January 2012 09:12

How Lowe’s has impact and you can too

I am in the process of doing a lot of remodeling and have been spending some of my free time at Lowe’s. As I was coming out of the restroom, I noticed a number of employee lockers and a big sign that read, ‘The IMPACT Model.’ I got a little closer and really concentrated on their IMPACT Model and what it meant.

I — Initiate contact

M — Make assessment

P — Provide assistance

A — Add on sales

C — Close the sale

T — Thank the customer

I really liked the IMPACT concept. I like what it stands for. Doesn’t their model work for every company?

Initiate contact

Walking into a restaurant, retail store, stadium, dentist office, auto body shop or thousands of other businesses, don’t we all want one thing? Initiate contact? Most of the time I walk into a store, I have a question — whether it’s that I want to know if my friend that I am meeting has arrived, where I can find an item or if I need to fill out any paperwork while I wait for the doctor. Initiating contact is very critical to every business, and the quicker someone greets us, the better off we feel.

Make assessment

It’s very important, especially in a restaurant or retail establishment. Can I help this customer? Do we have what he or she is looking for? If not, do we have an alternative that we have that can solve this issue?

Provide assistance

It’s a must-have for every business. All of us want our staff to provide assistance. How many times have you called a company or visited a retail store and been bounced around from one person to the next? Sound familiar? It does to me, and when it happens, I take my business elsewhere. Do you do the same thing? If so, how do you think your customers feel if it happens to them?

Add on sales

Wow, talk about creating revenue and increasing the bottom line. You have customers — what else can you sell them? What else do they need for the project? Is there anything that I can add on that I know they will need to buy? This is very critical. My cousin owns a Knockouts franchise (upscale hair salon for men), and he has developed a very creative sales process for his staff to sell hair products after his customers get their hair cut. By putting this in place he has increased revenue eight months in a row.

Close the sale

In the movie, “Glengarry Glen Ross,” Alec Baldwin makes a reference to ABC — which is, ‘always be closing.’ I will admit I may not have liked the language around what he was saying, but if you can get past that, the message is solid. You always need to be closing. Sometimes the message is soft — like when you leave the dentist office and the front office person will ask to schedule your next appointment — but any way you look at it, they are closing by setting up a future appointment, which increases revenue.

Thank the customer

Yes, yes, yes! Consumers have more choices than ever. The economy is very challenging and customers these days really want to be treated well, fairly and yes, thanked. I still make calls and send handwritten notes to first-time clients. I have heard from a number of them who said it made them feel very special that we really cared about their business. Do you have similar things in place for your customers?

How much impact does your company have?

Merrill Dubrow is President and CEO, M/A/R/C Research, located in Dallas. The company is one of the top 25 market research companies in the U.S.  Merrill is a sought after speaker and has been writing a blog for more than four years. He can be reached at or at (972) 983-0416.

Published in Dallas
Tuesday, 03 January 2012 15:16

Market in mood to sell

Private equity firms owned more than 6,100 portfolio companies when 2011 reached its halfway point, according to a report by Pitchbook and Grant Thornton. One-third of those 6,100 companies have been held for more than five years. The result of this oversupply of tenured portfolio companies is a large exit strategy from private equity groups. With strategic buyers’ enormous cash holdings, low earnings on interest and acquisitive behavior in 2011, private equity groups are seeing an opportunity to sell. PE firms also need to appease limited partners by deploying capital and increasing returns, which will ensue through an exit strategy.

Private equity firms still have ample capability to perform acquisitions with an overhang of capital close to $400 million. However, the current market appears more situated for private equity groups to exit rather than acquire. So far in 2011, private equity acquisitions made up just more than 10 percent of total deal value, as compared to 2006 and 2007 where private equity acquisitions accounted for approximately one-third of total deal value. It has been difficult for private equity groups to compete for companies as strategic buyers continue to offer aggressive cash bids and continue to maintain lower borrowing costs.

The overall merger and acquisition market has remained rather flat the last few months due to uncertainty in the global market. However, in Northeast Ohio, private equity groups have become very active in November with The Riverside Co. doing multiple acquisitions and exits, and Blue Point Capital Partners making multiple acquisitions. Expect to see a lot more activity from local private equity groups as exiting portfolio companies becomes more advantageous and capital overhang continues to linger.

Albert D. Melchiorre is the president of MelCap Partners LLC, a middle-market investment banking firm. He is also a director on the ACG Cleveland board. For more information on MelCap Partners, please visit For more information about the Association for Corporate Growth, please visit

Deal of the Month

The deal of the month is awarded to Blue Point Capital Partners for the company’s two acquisitions in November. On Nov. 1, Blue Point announced that its portfolio company, Quality Synthetic Rubber Inc. would acquire Wisconsin-based Quadra Inc., a manufacturer of custom-molded silicone products. Blue Point’s portfolio company QSR, locally based in Twinsburg, is a manufacturer of highly engineered, molded rubber components. QSR’s acquisition will expand the company’s medical business and diversify the current customer base.

On Nov. 16, Blue Point completed its second acquisition of Selmet Inc., based in Albany, Ore. Selmit is a manufacturer of complex titanium castings for the aerospace and defense industries. Blue Point acquired Selmet because of the company’s growth prospects as the aerospace industry moves more towards lighter weight products. Selmet produces many lightweight titanium products, including engine, airframe and other aircraft components.

Published in Cleveland

Ralf Drews doesn’t fit the profile of your typical company president or CEO. He doesn’t have a background in marketing or finance or sales or operations. He is an engineer and has spent many years working hands on developing new products. A day on the job for Drews doesn’t involve looking over spreadsheets or contemplating sales figures; it involves being out in the field at an oil pipeline or under the street in a sewage canal because that is where his customers work.

While Drews may not be concerned with sales figures and operating numbers, he does know product development and innovation, which is what drives his company forward. Drews is president and CEO of Draeger Safety Inc., a $1 billion manufacturer of gas detection equipment, air quality monitors, masks, and other safety and emergency products, and employs 400 people here in the U.S. and 3,800 worldwide.

Since joining Draeger more than 20 years ago, Drews’ product development leadership and innovative outlook has been responsible for 90 percent of the company’s product portfolio today.

“What innovation needs is people who can challenge each other,” Drews says. “Conflict must be wanted. New things must be wanted. Change must be seen as something positive, and if you generally have a good change DNA or change culture within your company, innovation is not an enemy but will support that.”

Drews’ drive and attention to innovation has helped create an environment that makes Draeger Safety’s products category leaders.

“The question always is when you come up with innovations, will there be customers who appreciate what you invented and come up with?” Drews says.

Here’s how Drews utilizes best practices for high-level innovation to ensure customers want and need Draeger’s products.

Understand your arena

In the 20 years that Drews has been developing products at Draeger, the one thing he has come to find is that innovation doesn’t just happen. You have to understand who you want to innovate for.

“What I have learned in my time as R&D manager is … many people thought that ideas are just coming out of the blue,” Drews says. “You just need to watch and observe and all of a sudden you get a sign from the universe and a new idea or new invention is born. This may happen in smaller businesses … but I believe in more mature organizations you need more structure around innovation and how to create innovation, because I think innovation does not happen by accident. Process, people and culture are the three elements that have to be designed in a way that they come together and then innovation can happen.”

If innovation is a key component of your business and you want to build your company around it, you need to have a focus for it.

“What you need to understand first of all is your market,” he says. “The blue ocean approach is one approach (that) clearly supports the logic to understand which arena you want to play. What’s your customer and what’s not your customer? You really need to draw the line. The first and most important step, and for most companies the most difficult step, is clearly focus where you want to go.

“That’s probably one of the most difficult things to do for people, because if you do that you also automatically exclude other applications. But what that gives you is a very clear focus and by having that focus you have a very good chance and a high likelihood that you can come up with something great. Whenever you want to do everything with one product the likelihood is very, very high that you come up with an average product or even with a loser product because that’s simply impossible.”

As soon as you determine who you want to serve, you can start to truly understand the customer’s needs — even the ones they don’t know about.

“A truly powerful innovation approach is to find out what are the articulated, but even more importantly, the unarticulated needs from a customer standpoint,” he says. “There are articulated needs — every customer knows this is a problem, it has been a problem that’s not been solved. There are also unarticulated needs. That’s where the problems would potentially lead to the biggest wow factor or to the biggest innovation.”

The key question is how much more value does a solved problem provide for your customer if it were solved.

“Does it enhance productivity?” Drews says. “Does it reduce costs and how much cost would there be? How does it impact the cost of ownership? What is the concrete value? We always try to attach a dollar tag to it. The second aspect is how expensive would it be for you to solve this problem? What we look at is actually the value from the customer perspective and how much R&D money we have to apply to solve the problem. Those are the two key questions.”

In Draeger’s case, the product is the spearhead, so it’s important for the company to understand how to innovate products.

“The market has to be very structured, very clear, and then basically, we send out people who observe and interview customers to really find out what are the needs and what are the demands,” he says. “Hopefully, they are able to find some unarticulated demands and needs, which could potentially lead to innovation.”

Create a voice of the customer

To find those unarticulated needs of the customer you have to get out in the field and see firsthand how customers work and how they use your products. That is exactly how Drews developed his latest innovation, the X-zone 5000 gas detector.

“I went out into the field and watched some practices in oil and gas and also in sewage,” Drews says. “Instead of talking to people, drinking a cup of coffee and eating some cookies, you really get into the dirt. You really want to understand how the people are dealing with your equipment. I went into the pipelines and into parts of the Hamburg sewage canals and I talked to the workers; the people who spend 80 percent, 90 percent of their work life underneath the street. They don’t really know what they don’t know, but by observing them and by looking at them and asking very specific questions you will find out whether there is something to improve with your product.”

Drews interviewed the person responsible for monitoring a manhole while people were working in the sewage canal pipes. This guy had to constantly draw samples of air from the canal because it can be toxic or have combustible gases.

“This guy used a small gas detector, and I was asking him what could be improved with this product,” Drews says. “He said, ‘Oh, this product is perfectly fine; there’s nothing that you could improve.’ I asked, ‘Why do you have this cable drum?’ He said, ‘The reason is very simple. It has happened in the past that the gas detector gets kicked into the canal because people walking by didn’t see it. What we do now is we connect the gas detector to this small cable drum so people can see it.’ I also asked him what he does when it’s raining because he is just standing there next to the manhole. He said, ‘Yeah, that’s a problem. Whenever it’s raining, I cannot get into my truck because the visual alarm is not bright enough and the audible alarm is not loud enough.’”

By asking a few key questions and watching what this guy had to do, Drews realized there were several ways to greatly improve the gas detector by making alarms brighter and louder and the unit more visible.

“Some of those questions we asked did lead to the X-zone, so we were basically discovering a problem, which he could not really articulate, but he was aware of,” he says.

In addition to research in the field, it is beneficial to create a voice-of-the-customer group to look at customer touch points, needs, and ways you can innovate and create more value.

“I recommend that companies create and build their own dedicated voice-of-the-customer groups within their companies because this is something completely different to a regular product management job,” Drews says. “If you want to be a good voice-of-the-customer marketing person, you really need to have some psychological skills, you need the ability to look behind the scenes, you really need to have the passion for interviewing people, and you have to have a passion for going into the real life environment.”

A critical part of the VOC process is assessing your competitors.

“What’s a target competitor in that specific region, vertical and application?” he says. “What’s the strongest competitor? Where does the competitor’s product really excel? And how do you want to compete against that? You have to make a conscious decision to focus on the strongest competitor in your target arena.”

Once you have found the needs of your customer and areas that your competitors overlooked, you have to find out if customers like the product concept.

“What you do at the end of this voice-of-the-customer study is you pre-sell your product,” he says. “At this point in time you have not even created a product development team, you don’t even know whether you want to develop that product. What you can do with all the things you found out in the voice-of-the-customer process is prepare a sales pitch like you have that product already. You present the features and the benefits your product has in a very nice way. Then you look into the eyes of the customer and if you don’t see the sparkles in their eyes and if they don’t ask, ‘When can I have it?’ You might not have a winner.”

Have an innovative environment

When Drews presented his concept for the X-zone, customers lit up and saw the value in owning the product. The success of this whole process is due in large part to Draeger Safety’s innovative environment.

“I don’t believe you just put people in a room and make sure they have a lot of fun and then finally they come up with an idea,” he says. “They might come up with an idea, but not necessarily addressing the problem you want to solve.”

To produce innovation in a very structured way people have to be focused and work together as a team.

“They have to be smart,” he says. “They have to know their stuff and they should be coming from different cross-functional areas. They should be very open-minded in their discussions. You have to have quick thinkers and problem solvers.”

These sessions should not be one day or two days long. They should be short one- to three-hour sessions.

“Don’t give them too much time,” he says. “They have to be efficient because ideas come up fast or they don’t come up. You’d rather repeat that. After you have pulled the people together and you have not come to a solution, do it again the next day or later that same day, but don’t give people too much time to come up with high-level innovation.”

High-level innovation starts with the culture. An innovative culture needs a lot of contradiction and people who can challenge each other but who can also admit when others have a better idea.

“What it needs is a culture of conflict, which means I must try to disagree with someone as long as it is for the right reason, which is to fault this product or problem,” Drews says. “One of the sayings I’ve heard a long time ago is, ‘Conflict is a lever for innovation.’ I really truly believe in that because if you have a challenge coming from the production side and that contradicts with purchasing and that contradicts with what marketing wants or that contradicts with what R&D is able to do and there’s people in the room who can discuss that and can accept each other and are open for dialogue and they really truly respect the other people’s opinions, perspectives and needs, then as soon as you put all of that together with people who are problem solvers, who are open-minded, who are quick thinkers and are smart and really know their stuff … you really get things going within an hour or a few hours.”

To keep an innovative environment and process flowing smoothly and successfully, it has to be supported by the entire organization.

“Whenever you have the people in one room I just described, that is really, really powerful. That’s something I would describe as culture and of course that goes all the way up, not just on an engineering level, marketing or product management level, but this has to be supported by the top management because culture is really driven from the top down.”

Once you have all these innovation processes working together all that is left is getting customers to see the value in your product.

“All the things which we have come up with from the VOC approach before we started the product development are basically reflected in what the customer feedback is and that’s pretty cool,” Drews says. “That tells you that you have a very robust innovation process and no longer is the result of your R&D process the result of hope and no longer do you rely on very talented or genius product managers, but you can make it a very structured approach to innovation and this process is sustainable and reproducible. It really works if you do it well.”

HOW TO REACH: Draeger Safety Inc., (800) 858-1737 or   


-         Understand who and where you want to focus your innovation strategy towards

-         Get into the field and observe and ask questions of your target customer

-         Create a structured, creative and contradictive environment

The Drews File

Ralf Drews

President and CEO

Draeger Safety Inc.

Born: Hamburg, Germany

Education: Engineering degree from the University of Luebeck

What was your first job and what did you learn from that experience?

My very first job was when I joined Draeger in 1991. I became a mechanical engineer, and what that job taught me was that I gravitated pretty fast to a leadership role. I was promoted just eight months after I joined Draeger. I also learned that my passion was not to design all the details but actually create ideas.

Who is somebody that you admire in business?

One guy I think very highly of is Steve Jobs. What he brings to the table is an outstanding empathy for customers. His understanding of customers is very good and that together with a very good understanding of complexity management and an ability to bring great talent to his company makes him strong.

What is your favorite business book?

‘Good to Great,’ that’s the only management book that has been a role model for me or has given me great guidance.

What Draeger Safety innovation are you most proud of?

The X-zone, definitely. A lot of that product goes back to my personal ideas and one of the most important patents is owned by me. Also, it’s a product that was relatively strictly developed in accordance with our VOC approach. This is not something that was an accident. It is something which was thought through very thoroughly and validated at each stage.

Published in Pittsburgh

Retained surgical sponges in patients are one of the most frequent and most costly surgical errors among hospitals, as well as the most commonly reported.

Each year hospital infections add an estimated $30.5 billion to the nation’s hospital costs, according to the Committee to Reduce Infection Deaths. More than 100,000 deaths occur each year from preventable hospital infections, according to The Institute of Medicine. That number is more than the yearly deaths from AIDS, breast cancer and auto accidents combined.

David Palmer, president and CEO of Pittsburgh-based ClearCount Medical Solutions Inc., a medical device company focused on patient safety solutions, has developed technology called the SmartSponge System to track surgical sponges, making hospital surgeries more efficient and reducing extra costs.

Smart Business spoke to Palmer about how this technology can benefit hospitals nationwide.

Where did this idea come from?

The original idea wasn’t from us, it was actually an operating room nurse who back in the mid-’90s had seen this reconciliation angst on a recurring basis and thought there had to be a better way to do this. Along with her husband, they came up with the idea that radio frequency identification technologies would be a great tool to help solve the problem. In 2004, ClearCount came about.

What are the inefficiencies your product is addressing?

There is a study published that one in 1,500 intra-abdominal surgeries results in a retained object. That gives you the magnitude of the problem that we’re addressing. Currently today, there is a manual reconciliation process that is performed in every surgical procedure. The purpose of that reconciliation is to make sure that they account for the number of things at the beginning of the surgical case, throughout the case, but most importantly, at the end of the case, to prevent that one in 1,500 intra-abdominal surgery event from occurring.

What happens is, whenever there is a miscount that occurs, there is quite a bit of time spent in the operating room trying to correct that situation. They’re trying to find that missing sponge by maybe digging through the garbage or recounting to make sure they didn’t make an error. There are a lot of things that are happening that impact the efficiencies when the count is off. That’s what we really prevent. We automate what is now an error-prone manual process in the operating room. We address both the patient-safety side of it, and through our automation and accuracy, we add efficiency to the operating room.

How does it work?

There is a radio frequency identification chip which is comparable to a tic-tac and that is sewn into the surgical sponges when they are manufactured. Each sponge has a tag which contains a unique identifier on it that allows that sponge to be counted. Before a case begins, the sponges are quickly scanned into the counting process and all those tags are read and they establish an in-count and then during and after the case, the sponges are discarded and that’s where they are counted out and there’s a display screen that shows the ins and outs and how many are missing. It tells you not only how many sponges, but the type of sponge. Then there is a wand attached to the device which allows the nurse or the physician to scan the patient or use it in the room to find a sponge as well.

Are hospitals looking to use this technology?

It’s a very immature market right now. I think the level of awareness clearly increased over the past 12 to 18 months. That’s the awareness that technologies are available to help the problem. The problem has been well known and documented. The solutions have been less well known, and that’s the reason for the relatively underpenetrated market. What we’re noticing now is that many hospitals are actually proactively looking for technologies to help with this problem.

What are the advantages for hospitals to adopt this technology?

First off, we offer to our customers an additional financial backing and we have a special policy that stands behind our products in the event that a hospital would incur an incident while using our technology.

There is also the advantage of the efficiency in the operating room. Because our product is so easy to use and not only includes the ability for the nurses to get an accurate count, but in the event that there is a missing sponge, we have the ability to find it as well. We are the only technology that can both count sponges and detect them.

HOW TO REACH: ClearCount Medical Solutions Inc., (412) 931-7233 or  

ClearCount Medical Solutions Quick Facts:

City: Pittsburgh.

Founded: 2004.

Founders: David Palmer and Steven Fleck.

Goal: Uses RFID technology to prevent medical errors and make hospitals more efficient.

Published in Pittsburgh

Gregory Ebel has operated in a business environment of uncertainty and constant change for too long. He has worked hard to be at the forefront of his industry, helping people understand the important factors and circumstances in his business.

Ebel, president and CEO of Spectra Energy Corp., a Fortune 500 natural gas infrastructure company, operates in a regulated industry where things might not always go his way. Ebel makes numerous trips to Washington D.C. to be face to face with the legislators who set regulations and helps them understand how Spectra and other energy companies do business to allow for regulations that are fair and sensible for all involved.

“In a regulated business, obviously, what’s going on in Washington D.C. and in lots of states from regulatory overreach is our biggest challenge as a business and the uncertainty that that creates for our ability to invest,” Ebel says. “The pipeline business is a business that invests for 15, 20, 25, 30 years at a time. When you’ve got regulatory uncertainty and you’re trying to determine how good of an investment it’s going to be over time, that makes it very difficult.”

Spectra Energy employs 5,500 people, had operating revenue of $4.94 billion in 2010 and has $26.7 billion in assets, so it is critical that Ebel and the other Spectra executives fight the regulations that unnecessarily harm the business.

Here’s how Ebel communicates and educates his employees, legislators and others in the industry to help improve the uncertain environment.

Engage people in your business

Spectra is currently building a pipeline into New Jersey and New York that is critical to reduce the cost of energy for the people in that region and bring in new gas sources.

“It is only 15 miles long, and it will, from the time we sign the contract with the customers to the time we put it into service, take four years and cost $1 billion,” Ebel says. “If it was allowed to start and we’re two years into this, it could produce more than 5,000 jobs today without government support. Yet it is very difficult. In a country that needs a lot of jobs, in a country that needs cheap energy, in a country that is looking for clean energy, it’s amazing to me and I think a lot of people in different industries, how long it takes to get approvals.”

While there is no desire to get away from following good procedures and good regulation, the issue is the cost of regulation is far outstripping the benefit.

“That’s the big concern and the fight we have to have with the regulators and try to do it in as positive a manner as possible,” he says. “The natural gas industry in North America is undergoing extraordinary growth thanks to technological developments that have given the country a 100-year supply of natural gas at a time that it needs domestic energy, at a time that it needs domestic jobs, at a time that it needs cleaner energy, and that is a huge, huge game changer for the industry. Being able to manage within that is what it’s all about right now.”

In order to overcome the challenges of regulations facing certain industries, companies and CEOs need to be willing to speak to people about their businesses and talk about the issues they are facing and ways to make things better.

“I would say we do three things: engage, engage, engage,” Ebel says. “There are three elements to that. We engage with our employees. We’ve spent a lot more time in Washington D.C. making sure that legislators understand our business and the third area of engagement is our industry groups. We belong to things like the Interstate Natural Gas Association or the American Gas Association. We make sure that either I directly or other executives in the company are trying to muster the forces within our industry groups to make sure we are delivering a consistent message from the industry to government to prevent this regulatory overreach.”

It is that constant education of what’s going on inside Spectra, around the country, and in the energy industry that helps how government handles regulation and how an entire industry can work more efficiently.

“That’s been really critical,” Ebel says. “Generally, CEOs do not like spending time in Washington or state capitals, but it’s critical now. You have to engage with politicians who frankly, don’t seem to have a lot of foresight when it comes to creating regulation or understanding what’s truly going on in the economy.”

Spectra has been spending a lot of time educating not only politicians but its own employees, as well.

“We have what we call an ambassador program so that we can ensure that our employees have the best facts and the best information about the natural gas business and the really exciting changes and the jobs that we produce in the country, and we run a lot of employees through that,” he says. “So whether they’re at a cocktail party or rotary club or women’s auxiliary, they can speak about the company and the industry.”

No matter how you educate your employees or politicians about your industry, one thing has to remain the same: your message.

“You have to be consistent with your message to employees and be consistent with your message to government,” he says. “You need to constantly repeat that message and you have to engage. CEOs don’t like spending a lot of time dealing with government because it doesn’t generate revenue, but it really can generate speed to market. Speed to market for us means building projects faster, on time and on budget to serve our customers and that can be grossly restricted by regulations. So there is value in it, although it’s hard to see. More and more CEOs and C-suite executives need to spend time with our politicians to tell their story. We all like to stay below the radar and deal with our businesses, but when government is so much in your face and has so much regulation, it becomes a real necessity to be successful.”

You don’t have to fight regulations on your own. It is a huge advantage to join industry associations that have similar goals.

“Other than a few companies like GE, Ford, Dow, Microsoft or Berkshire Hathaway, if those companies say something, it might get picked up, but most companies, of which there are thousands and thousands, need the bulk of similar type companies coming together,” Ebel says. “For us, the biggest one we’re involved with is the Interstate Natural Gas Association, which is a group of companies with similar interests in a similar industry that come together. Because of that heft and the number of employees you represent, the amount of gas pipelines you represent, and the energy sources that you represent, you can have a bigger impact by speaking with one voice and one consistent message.”

Ebel became chairman of the INGAA this past October. It’s these types of connections that can make a big difference when you need it.

“We need more and more CEOs to be involved in those industry associations if they’re going to be effective in Washington. If you show your 80 percent of the industry a position on a policy or regulation, that has real resonance whether it’s with the White House or Congress; that’s why those associations are important. That’s why we put time into them and money and I think more CEO’s need to use their industry groups to mobilize an entire industry to get positive change.”


When it comes to getting people and, most importantly, employees to understand anything that is going on in your business, it is critical that you communicate and communicate often.

“The biggest thing is our ambassador program, which is educating our employees on what our business does,” Ebel says. “It’s amazing when you have thousands of employees, how many, through no fault of their own, don’t know exactly what you do. Everybody’s got a job inside the company and it’s good that they stay focused on that, but giving them a whole picture of what you do, they can become very valuable and powerful advocates for you.”

To get your employees more involved in your company you can’t make things complicated or they will lose interest. You have to make things simple and straightforward.

“We have a phrase here called the KISS method — keep it simple, stupid,” Ebel says. “We say, ‘Keep it simple, Spectra.’ We try to communicate very short and specific goals and messages for the employees. Most employees would know that we are trying to lead in three areas: safety and reliability, customer responsiveness, and profitability. By the end of 2012, we want to be leading our industry. That has been incredible in terms of focusing employees both in the field and in office positions. I think most CEOs know this, but we sometimes forget. Keep things very simple and have three to five messages and goals that the employees across the entire company can pursue and connect with. That’s a pretty valuable tool.”

Getting your message out to your employees is critical, but that message has to also go out to legislators who regulate your industry in order to create change.

“Most CEOs, no matter what industry you’re in, there is some form of federal government regulation,” Ebel says. “If you’re a public company, it’s the SEC. If you’re a company like Spectra, it’s the Federal Energy Regulatory Commission, which determines how quick your projects get approved, which determines how quick you build them, which determines how quick you take capital and turn it into revenue and serve customers. That’s a huge issue for us.

“Safety is our key license to operate. Particularly in this environment post-BP and oil pipeline spills, all of those often lead to knee-jerk reactions by government. So make sure that you are telling government your story and your safety standard is critical in terms of avoiding unnecessary regulation and there again meeting those goals of safety reliability, customer responsiveness, and profitability.”

Spectra doesn’t just express opinions every so often to legislators, the company has people full-time in Washington D.C. to really make its presence felt.

“We have an office in Washington,” Ebel says. “We have various consultants in Washington and many of us spend time in Washington, not just with politicians, but regulatory bodies too making sure they’re informed about what we do and being an adviser of choice to the government so when they’re thinking about issues they pick up the phone and ask Spectra, ‘What do you think about this?’ And they know they’re going to get relatively unbiased opinions, that they’re going to get constructive views and they’re going to get information that will be helpful for them to make policies. The worst thing is when government makes policies without having all the facts.”

It’s not enough to make a phone call to a politician or write a letter. You have to meet with legislators face to face and treat them like they are another customer.

“You have to go see them,” Ebel says. “You have to spend time with them. You’ve got to try and understand where they are coming from. What political pressures are they under? What public pressures are they under? Regulators are just another form of customer. What are their needs? What are they trying to achieve? How do you help them achieve their goal while at the same time making sure you achieve your goal? Treat the regulators like you treat your customers and try to get win-win solutions. That doesn’t mean you don’t have disagreements, because you have disagreements with customers every once in a while, but making sure you understand what their view point is gets you a lot further down the trail.”

HOW TO REACH: Spectra Energy Corp., (713) 627-5400 or


-         Engage people in your business

-         Join associations and groups that have similar interests

-         Communicate your company’s message in order to create change

The Ebel File

Gregory Ebel

President and CEO

Spectra Energy Corp.

Born: Ottawa, Canada

Education: He received a BA from York University in Toronto, Canada, and is a graduate of the Advanced Management Program at the Harvard Business School.

What was your very first job, and what did that experience teach you?

My first job as a kid was a paper route. It taught me how to market and how to expand and how to make sure you bring in more revenue. That marketing to customers was a huge part of it.

Who is somebody you admire in business?

I’m fortunate to have an entire board of former CEOs. They have consistently over years provided great advice and between them, they have launched at least 20 CEOs.

What is your definition of success?

From a professional perspective, it’s seeing the families that work for Spectra continue to grow as individuals and be able to achieve their dreams for their families. If we can do that at Spectra safely, consistently and profitably, that’s success.

What is your favorite thing about the energy industry?

It’s constantly changing. I like that and the fact that it serves people quietly and consistently year in and year out.

What’s something that you are excited about for the future of energy?

I’m excited by the fact that North America has an opportunity now to achieve energy independence with a clean abundant fuel that just a few years ago we weren’t sure would be around as a foundational fuel.

Published in Houston

Business for Stephen Webster was going well, but not well enough. The president and CEO of IT consulting and data center services firm, StratITsphere, needed something extra to give his company more business.

The company, which has more than 50-employees, had strictly been a consulting company since it started and was explicitly focused on the Fortune 500 market.

“Our focus was kind of providing technology, strategy, architecture design and security assistance for those clientele,” Webster says. “Although the consulting business is a good business with high margins, it comes in waves or cycles. We looked hard over a year and decided we had to do something to diversify ourselves.”

Webster and his team decided to enter into the data center services market. The big driver for diversifying the company’s offerings was to get some business that had monthly recurring value.

Smart Business spoke to Webster about how he made the leap from IT consulting to data center services to help diversify StratITsphere.

Diversify to your strengths. We did not enter into this business lightly. We did a lot of research and a lot of market research. We looked at what market segment we wanted to address and the pros and cons and the risks of entering this business very closely. It was probably an 18-month process for us to decide to do this. Make sure you do all of your homework.

Anybody who is going to diversify has to look at what you’re doing in your business today and make sure if you’re going to diversify, you’re going to diversify into a business that you have competencies in and are complementary to your core business. This data center managed services business is very complementary to what we were doing already. We had lots of experience in the business, so it was a very good fit. I’m a firm believer of you can’t be all things to all people. You need to have a business that’s got a strong focus — both a market focus and a product focus if you’re going to be successful. We’ve seen some companies out there that want to diversify or want to do something different and they enter into a business that they really don’t have a lot of experience with, it’s not complementary to their core business and it becomes an albatross quickly.

Avoid mistakes. In our technology business, cloud computing is all the rage. Everybody wants to be a cloud provider. We want to be a cloud provider, but that business is a very new business and people are just trying to understand it. The market is very immature and product sets are very immature. Too many other businesses jump in when they see the hype and they see the promise of additional revenue and they jump in without understanding what all the real market dynamics are, what the drivers are, what the real potential for opportunity is.

You look at the hype in the cloud computing market; it’s supposed to be a $150 billion business by 2015. You can easily get wooed into thinking, ‘Wow, I’ve got to get some of that right now.’ It’s a hard trap to avoid. Being an early entrant into that market space isn’t necessarily the right thing to do.

That’s the strategy we’ve taken, which is a much more conservative strategy. Let some other people rush in and let’s see how the market is shaping up and we’ll learn from their mistakes and get in afterwards. Too many folks get tempted into jumping into something that looks like it’s going to really impact their business.

Understand what you want to accomplish. Everybody has to look at their business and decide, ‘What’s the real problem we’re trying to solve? Is it part of our business strategy that we want to diversify into a different business? Is our core business just not operating properly?’ Maybe you’re better off trying to re-engineer your core business?

Make sure you’ve taken a very hard look at your core business and you know your numbers inside and out. That will help lead you to what are we trying to do. The second thing to do is go to your customers. That was part of what drove us to our expansion into this business. We talked to our customers and we asked them, ‘If we went into this line of business, is that something you’d be interested in?’ Your customers are your most powerful tool. You need to be close to your customers and you need to understand what they’re looking for and what they want.

It’s a CEO’s job to be as close to your customers as you can. Talk to your peers. Talk to your mentors. Talk to other people in the industry to get a sense for what they’re doing. Don’t try and do it in a vacuum. I think too many CEOs these days are out there and think they have to make this decision on their own or else they’re not an effective CEO. Nothing could be further from the truth.

HOW TO REACH: StratITsphere, (888) 316-4191 or

Published in Houston
Saturday, 31 December 2011 19:06

The takeaway: A tale of two logos

Before you hand out your first business card, before you set up the most bare-bones website, and before you minimally introduce a new venture to the market, you need to have a logo.

A graphic has the power to make a quick and indelible impression, and a good logo can give a start-up an early advantage. Just ask Nike. Just ask Apple. The same is true in reverse. A poorly conceived and poorly executed logo suggests to anyone who sees it that the company just isn’t ready for prime time.

So it was pretty early on when we realized that we needed a logo. As an early-stage start-up, we at Summit Data Communications wanted to look like a professional, confident and dependable company, not a handful of rattled guys taking the biggest risk of their careers. Yet while we knew enough to know that getting our first logo right was a big deal, we still managed to fail at it spectacularly. Here’s how it happened.

We got the first part of the process right: get a good designer. Through one of our partners, we engaged a designer with a good reputation and a portfolio of previous quality work. We then shared with him the collective and unfiltered thoughts of the seven of us, including our favorite colors, shapes and typefaces. Although not one of us had any design experience or training, we provided detailed feedback through multiple iterations. The result was our company’s first logo, which came to be known as “the river of blood,” is reproduced here for the first and last time. In the end, the designer in question refused any compensation for the logo, asking only that we never, ever associate his name and good reputation with it. This was entirely fair because the problem wasn’t him — it was us. We wouldn’t make the same mistake again.

We knew we had a serious problem and we set out to solve it. Conveniently enough, another partner knew another designer, one untainted by a previous relationship with us. He initially agreed to help us out in a few weeks. When he saw the logo, he realized that our young company was a critical case and our image was in imminent danger of irreparable damage. “I’m on it stat!” he said. Just two days later, we had a new logo, pictured here for comparison. This time, only two of the partners knew the project was going on, and the result was delivered not for comment but as a fait accompli.

The takeaway:

Our company got far more from this process than just a respectable logo. I also gained a few valuable management lessons:

  • It’s not enough to hire the right people. You have to let the right people do their jobs. If you hire a pilot or a brain surgeon, you tend to afford them a fair bit of autonomy. The same should be true for engineers, writers, and yes, designers.
  • We all know that too many cooks spoil the broth and that the camel is a horse designed by committee. Still, it’s easy to forget this, particularly when you are on a new team and you are building confidence and relationships. Feedback is great, but acting on every opinion isn’t.
  • Lastly, everyone makes mistakes. The difference is what you do in the aftermath. Successful organizations identify errors early, correct them quickly and learn as much as they can from them. You’re going to fail sometimes, so the key is to fail fast.

Ron Seide is the president of Summit Data Communications Inc., a wireless technology company headquartered in downtown Akron. Reach him at

Published in Akron/Canton
Saturday, 31 December 2011 19:01

Jerry McLaughlin: Making memories

Type “customer loyalty” into Google and you’ll get more than 8 million hits. Search for it on Amazon and you’ll find more than 13,000 titles. Selling the concept of customer loyalty is big business in the business world. Call me disloyal, but I say customer loyalty is a myth.

Loyalty is being unswerving in allegiance, unwavering in devotion. The implication in business is that loyal customers should stick with a vendor, no matter what — even when they’re aware of better options.

Is that reasonable to expect, much less realistic? I don’t think so. Instead, it’s better to keep our eyes on the prize: profitable, reliable, repeat business.

It’s imperative to understand that the cornerstone of any successful repeat strategy is memory itself. It starts with your brand promise. You’ve got to offer something worth remembering — something unique that solves a specific problem or meets a particular need a particular way.

Yet being worth remembering isn’t enough. You also need to find a way to make sure that you’ll be remembered. After all, what’s the difference between you and a competitor who has never served your customer before? If your customer doesn’t remember you: nothing. You have to win the person over, all over again.

But if you do have an account in your customer’s memory bank, then you are with that customer all the time. The next time that person is in need of whatever product or service you offer, he or she already knows where to go. The best brands become synonymous with the service or solution they provide — think Kleenex, Xerox and Google. In a world of overwhelming choice, you can be your customer’s default setting.

And that is why memory belongs at the heart of your repeat business endeavors. If you want repeat business, your goal should not just be to make a sale but to make a memory.

But how? Here are four tools you can use to help ensure your product or service gets remembered. I call them the grand SLAM: story, leadership, alliteration and music.

Story: Our minds are hardwired for narrative. Wrap your offering in a story, and it will be easier for your customers to recall. For example, if I say, “turkey sandwich,” do you know what business I’m thinking of? How about if I say, “Jared”? Stories have lasting appeal.

Leadership: Being the original is an aid to recall. As market strategists Al Ries and Jack Trout once wrote, “It’s best to have the best product in your field. But it’s even better to be first.” If you’re offering something specific and unique in your category, then you can make a leadership claim. Authenticity beats imitation every time.

Alliteration: Repeating the sound of an initial consonant makes simple phrases stick. Think “Dunkin’ Donuts.”  “I’m cuckoo for Cocoa Puffs.”  “Every kiss begins with Kay.” Ever wonder why the Geico spokes-creature is a gecko, not a chameleon? Alliteration is pleasing to the ear. It rents room in your customer’s brain.

Music: Catchy tunes get replayed in our heads, helping messages take root. I bet most readers born in the 1960s like me can still sing all the words to the jingle, “My Bologna Has a First Name.” That commercial aired in 1973. Remember anything else from 1973? Set the words to music and help make the memory last.

Most importantly, to win repeat business you first need to deserve it. As Walt Disney once said, “Do what you do so well that they will want to see it again and bring their friends.” It’s no accident that Disney and his successors have positioned scores of shutter-snapping photographers around their theme parks. They’re creating enduring, take-home, share-with-friends-and-family souvenirs.

I’ll say it again: if you want repeat business, don’t just make a sale. Make a memory.

Jerry McLaughlin is CEO of, the world’s largest and lowest-priced online promotional products company. Reach him at

Published in Northern California
Saturday, 31 December 2011 19:01

Dan Lubeck on defending private equity

Until a few years ago, when I met with prospective partners, I would joke that before I was a private equity principal I was a lawyer, “but please don’t hold that against me.” That line has stopped getting laughs.

In fact, I’m hearing business owners respond that they would much rather deal with a lawyer than a private equity guy. Ouch!

So, what happened? When and why did private equity get a bad name?

Private equity had noble beginnings. Modern U.S. private equity took root after World War II to help fund new businesses for returning servicemen and foster technological advances to compete against the Soviet Union. The industry grew tremendously. By 1980, approximately $5 billion was invested in private equity. Today, that number is estimated to exceed $500 billion. Many great companies and iconic brands were founded with private equity investment and partnering including: Apple, Genentech, Electronic Arts, Federal Express and Minute Maid. Many private equity individuals and firms have generated very large and highly publicized returns on their investments.   

The visible, monetary success of private equity was met with some general concern, skepticism and, perhaps, envy from the business community and seeded the pervasive negativity of today. These attitudes were then heightened by the sometimes-questionable and widely publicized practices of well-known private equity professionals like Michael Milken of Drexel Burnham Lambert, who drove tremendous merger and acquisition activity with junk bonds, T. Boone Pickens generating fortunes with greenmail, and Carl Icahn’s ruthless corporate slashing. 

At this point, the term “private equity” was firmly embedded in business and the public’s dialogue, and the connotation was not good. 

The public’s concern about private equity was cemented during the golden age of private equity, from 2003 to 2007. These years saw unprecedented levels of investment activity, investor commitments, debt deployment and the formation and growth of thousands of private firms and companies that support their investing. During that period, 13 of the 15 largest buyouts in history occurred, and three of the largest private equity firms went public, creating tremendous wealth for their general partners. 

During the golden age, many owners of small- and middle-market companies, and much of the public, started considering private equity investors to be greedy abusers of debt, willing to do whatever is necessary to generate a quick return, even to a company’s detriment. Unfortunately, that perception was not unfounded. Fortunately, there are many great private equity firms that do not operate that way.

Private equity is like many industries (and political parties) where a highly visible portion sets the public’s perception of the whole. There are, in fact, many private equity firms that don’t fit the stereotype, and they can be great partners to business owners and management teams.

Reputable private equity firms focus on creating returns though growth and improvement of the companies they invest in. They develop transaction structures that align their needs with those of the selling parties, as well as the company and its employees. They use appropriate leverage. They develop well thought out incentive plans for company leadership and employees. They support management in developing and executing a strategic plan that will satisfy stakeholder expectations and realize the company’s full potential. They bring resources to bear that the ownership and management wouldn’t otherwise have access to. Finally, they are valuable sounding boards and guides. They add value.

Don’t assume all private equity firms — or lawyers for that matter — are the same. If you are considering a transaction, talk to a few firms, interview them and find a great partner. They definitely exist.

Dan Lubeck is founder and managing director of Solis Capital Partners (, a private equity firm headquartered in Newport Beach, Calif. Solis focuses on disciplined investment in lower-middle market companies. Lubeck was a transactional attorney and has lectured at prominent universities and business schools around the world.

Published in Los Angeles

Brigette Jackson is a Detroit native, but when she took over as the vice president and general manager in charge of T-Mobile USA Inc.’s Michigan/Indiana region last January, she didn’t allow that fact to become a justification for making assumptions about the market she was going to serve.

“I had been gone for a number of years,” she says. “I had some experience of my own, from things I had gathered on return visits, but I hadn’t been a resident.”

Jackson quickly saw the need for a market strategy that could help her and T-Mobile’s 620 regional employees connect the company’s products and services with customers in Michigan and Indiana. To make the concept a reality, she needed to build a leadership team with detailed knowledge of the region, and enable them to develop branding and marketing strategies that would increase T-Mobile’s profile in Michigan and Indiana.

Smart Business spoke with Jackson about how to construct a go-forward strategy and how to construct a team to help carry it out.

Define your goals. I think the No. 1 challenge was bringing us together as one leadership unit and really identifying our business goals, making sure we’re completely aligned in retail and partner sales, and our business sales channel. Then, it was creating marketing strategies, implementing operational tools [and] strategy systems that would allow us to work as one entity and one group. That included reporting, financial data and really bringing us together. It was important for me that everyone was knowledgeable about everyone’s business, so that when we sat down together as a team, we could make the right decisions.

That took about 30 to 45 days for everyone to pull this together. We had a strategy meeting in Chicago, and we stayed true to our strategy based on everyone’s knowledge of the market. So that has been a huge win for us overall.

Build your team. When I was hiring for my team, I looked for experience, but I also looked for someone who had a pretty diverse background in sales. It didn’t have to necessarily be in retail or just partner sales or business sales. I wanted someone with a generally strong background of sales success and the ability to drive for results through people. I also looked for someone who had a proven track record through strategies or different programs that they’ve implemented or created, where they could really show success from those programs.

I looked for folks that would complement the region overall, someone who has a working knowledge of both Michigan and Indiana, so that they could make the right decisions for the area, because we’re here to really get the word out and share what we’re doing. And because we’ve spent a tremendous amount of time on our network, we have an engineering team here as well. We brought them in and worked with them, too.

Analyze the market. We had some market analysis completed prior to my arrival, which was a great place for us to start, along with the knowledge of the team.

We sat down and we looked at some of the market analysis, and we combined it with the knowledge of the team and built a strategy off of that around who is our customer, who is our customer base, what are they looking for, what is important to our customers, and also make sure we have a strategy from a brand recognition standpoint to really get the word out to our customers as to who we are and the products and services that we offer. We have targeted areas and specific plans and strategies to attack them. We have some work to do yet, but we have been successful so far.

Company facts:

Name: T-Mobile USA Inc.

Headquarters: Bellevue, Wash.

Michigan/Indiana regional headquarters: Detroit

Products and services: Cell phone and wireless Internet service, cell phone and wireless Internet device sales.

How to reach: T-Mobile USA Inc., (800) 866-2453 or

Published in Detroit