NEO Ernst & Young Entrepreneur of the Year
Retail and Consumer Products
founder and president
Brand Castle, LLC
The idea of Brand Castle, LLC, came to Jimmy Zeilinger while he was in a local bookstore and came across a cookbook aimed for parents who wanted to create cooking projects with their children.
Being a devoted parent, he immediately thought of the hassle it would be to obtain all the ingredients needed to complete a cooking project in that book and how a kit that included the ingredients would make the task so much easier. After consulting about the kit idea with his wife Andrea, he quickly discovered that he had a great idea on his hands.
Since selling its first Crafty Cooking Kit in February 2005, Brand Castle has become the leader in interactive baking kits for children and adults. However, that success didn’t come without its hurdles.
Brand Castle almost closed its doors after its first six months as a result of listening to market researchers who wrongly advised Zeilinger, who is founder and president, on the type of demand for his products. Relying on this information, he spent all his personal savings and borrowed from family to launch Brand Castle by “slotting” the products via the grocery channel.
Six months later, this strategy proved to be unsuccessful when the products were not selling as anticipated and national retailers began to close out the product. Instead of closing the business, Zeilinger decided to change the market strategy to embrace seasonality and elected a low margin, high volume approach when selecting retailers.
Brand Castle is now an international company with employees in the U.S. and China. What started with six products ranging from paint-your-own-brownie to a rainbow cookies kit has grown into a portfolio of more than 300 items sold under three different brand names and numerous licenses, including Crayola, Disney and Sanrio. Each Brand Castle product aims to help families create memories.
How to reach: Brand Castle, LLC, www.brandcastle.com
NEO Ernst & Young Entrepreneur of the Year
Retail and Consumer Products
president and CEO
Ball, Bounce and Sport, Inc.
In 1982, Jim Braeunig started with Ball, Bounce and Sport, Inc., a subsidiary of Hedstrom, as a factory manager. Through the two decades following, Braeunig moved up in the manufacturer of rubber balls to director of operations, vice president of operations and eventually general manager.
Although BBS historically was a profitable subsidiary of Hedstrom, the majority of the company’s other subsidiaries were not. As a result, Hedstrom went through a rollercoaster of private equity buyouts and bankruptcies in the late 1990s and early 2000s. When Hedstrom encountered its second bankruptcy in 2004, Braeunig and a couple of other local investors decided to purchase the company to focus on BBS.
Upon the purchase of BBS in 2004, Braeunig and his team immediately went to work. They hired back several employees previously let go as a result of the bankruptcy, formed a joint venture with a Chinese manufacturer, obtained the support of retailers such as Target, Walgreens and Dick’s Sporting Goods, and after two years of consistent efforts, began to collect on the receivables of BBS purchased from bankruptcy court.
Today, BBS is still connected to the Hedstrom name, doing business as Hedstrom. Braeunig made revolutionary changes to the company, taking advantage of global resources and developing strategic business relationships.
In 2010, BBS acquired Diamond Plastics, and in 2012, Bosu, New Wave Container and Regent Sports were acquired. As a result of these acquisitions, BBS expanded its product offering to plastic dumpsters and names such as Meiter and McGregor for its sporting good products.
Even though BBS is booming, Braeunig is not ignoring potential future challenges. With increasing labor costs and high inflation rate in China, the company has started to seek an alternative to outsource manufacturing of certain products back to the U.S. or Mexico.
BBS owns 98 percent of U.S. and Canadian rubber ball markets and a growing percentage of the rotational molding market.
How to reach: Ball Bounce and Sport, Inc., www.hedstrom.com
Companies using the Interest-Charge Domestic International Sales Corporation (IC-DISC) provisions of the tax code, which are intended to help U.S. companies compete internationally, already know that the incentive essentially reduces the top federal tax rate on certain income from qualified goods and services from 39.6 to 20 percent.
“What you may not realize is that the intended and allowable available savings are often much, much greater,” says Amit Mathur, CPA, director at WTP Advisors.
Rob MacKinlay, president of Cohen & Company, says, “Many companies use basic, aggregate IC-DISC calculation methods, though other allowable methods explicitly encouraged in the regulations yield a much higher result. This can be the equivalent of claiming a standard deduction on your individual tax return when itemized deductions are much higher. Many of our clients have dramatically increased savings with a transactional analysis.”
Smart Business spoke with Mathur and his industry peers about IC-DISC and how business owners can extract more value from its proper implementation.
How can IC-DISC savings be maximized?
Most companies utilizing the IC-DISC enjoy the reduced tax arbitrage for either 4 percent of their qualified export gross sales, which is limited to the taxable income from those sales, or 50 percent of the taxable income from qualified export sales. Many believe that these are the maximum amounts used to determine the IC-DISC commission, which is subject to a top rate of 20 percent, rather than 39.6 percent. In reality, these amounts should be considered the minimum commission that results from the two simplest, basic methods.
Truly maximizing the intended and allowable benefits from the IC-DISC requires a more in-depth calculation, but may not take much more time. Each transaction can utilize a choice of many other attractive methods explicitly defined and encouraged in the regulations. For instance, transactions that yield a loss can generate commission. Transactions for products with less-than-average profitability compared with their product group or line also may yield additional benefits.
An analysis utilizing the most beneficial of these methods for different transactions will yield higher results, often more than double, compared with using the basic methods at an aggregate level.
Steve Switaj, CFO of Three D Metals, a company that has used transactional analysis in conjunction with the IC-DISC for years, says, ‘While fluctuation in material prices and unforeseen costs are constant concerns, the increased IC-DISC savings that often results from such variability is a nice feature of the incentive, and enables us to compete in export markets more effectively.’
Can prior year IC-DISC savings be improved?
Re-determinations of IC-DISC benefits can be performed for any open tax years. As Jim Bowen, tax partner at Bober, Markey, Fedorovich & Company, puts it, ‘If the savings from a transactional analysis of IC-DISC benefits is significant, amending the results should be considered, particularly for companies under audit for given tax years.’
Are you overlooking the IC-DISC entirely?
Closely held manufacturers, distributors, growers, software producers, equipment leasing companies, and architectural or engineering firms should consider it.
Mark Klimek, head of the tax practice at McDonald Hopkins, LLC, says, ‘Manufacturers and distributors not fully exploring this incentive may be missing significant tax benefits from a relatively inexpensive to implement government incentive that does not disrupt business operations.’
If products and services are ultimately used outside of the U.S., they will typically qualify. The rules for component parts ultimately sent outside of the U.S. are even more generous — generally, they can even return to the U.S. after being incorporated into another product. Tod Wagner, of Libman Goldstine Kopperman & Wolf, says, ‘Because of the favorable rules defining qualified export property, many companies eligible to use an IC-DISC are overlooking the incentive entirely as they do not think of themselves as manufacturers or exporters. In reality, they may need not to be either.’
Amit Mathur, CPA, is a director at WTP Advisors. Reach him at (216) 292-6732 or firstname.lastname@example.org.
Ready for a complimentary analysis of whether your IC-DISC benefits can be increased? Call Amit Mathur at (216) 292-6732.
Insights Tax Incentives is brought to you by WTP Advisors
Much attention has been given to the fees and expenses of qualified retirement plans. Many questions are being asked about the reasonableness and quality of the current 401(k) landscape.
For decades, service providers have been charging excessive, and often hidden, fees to a countless number of plan participants. Similarly, plan investment options came under fire shortly after the 2008 financial crisis, which saw millions of workers lose significant portions of their retirement savings. This unfortunate combination — excessive fees and poor returns — was the driving force behind the recent regulatory changes.
Smart Business spoke with Eric N. Wulff and Christopher D. Bart, managing directors and principals at Aurum Wealth Management Group, about the Department of Labor’s (DOL) plan to address these issues.
What are some of the company’s fiduciary responsibilities relating to their retirement plan?
The three main concerns revolve around fees, service and investments.
On Feb. 3, 2012, the DOL issued a final regulation under the Employee Retirement Income Security Act of 1974 (ERISA). This regulation requires a 401(k) plan’s service providers to disclose all fee and compensation arrangements, effectively known as ‘full fee disclosure.’
From a service perspective, companies are required by the DOL to determine the reasonableness of fees. Industry best practices indicate the most effective means by which you can evaluate the reasonableness is to place the plan out to bid. Conducting a request for proposal process allows you to compare not only the cost and compensation arrangements, but also the nature and level of the service. If the service provider does not provide a level of service commensurate to its fee, it is the company’s fiduciary duty to terminate the provider.
As for investments, companies are required to maintain a documented process on the selection and monitoring of the investments in the 401(k) plan. Specifically, the DOL recently put out an advisory bulletin on target date funds requiring them to evaluate the absolute risk of these types of investments. Target date funds became a popular investment strategy because plan sponsors were given fiduciary relief if they offered them as a qualified default investment alternative. This turned out to be somewhat problematic when the market crashed in 2008 and 401(k) participants saw their investments drop by 20 percent or more.
How can companies minimize their fiduciary responsibility?
There are different types of advisers companies can engage to assist them with their responsibilities, and companies can do a better job understanding those options.
The two most common levels of fiduciary status under ERISA are 3(21) and 3(38). As a 3(21) fiduciary, the adviser serves as a co-fiduciary to the plan; in this role, the adviser monitors plan investments and makes investment recommendations to the plan sponsor, but does not have discretionary control of plan assets. As a 3(38) fiduciary, the adviser takes control of plan assets, makes all investment decisions and insulates the plan sponsor from fiduciary liability as it relates to plan investments. Hiring a 3(38) fiduciary is the highest level of fiduciary protection under ERISA.
Where do participants stand in all of this?
With most retirement plans, a big problem is that participants are not allocating assets correctly. So, many 401(k) plans are starting to implement more help features for participants. Studies show the average participant can earn an additional 2 or 3 percent per year by getting professional help. Unfortunately, the average participant tends to chase performance when determining their investment allocation.
Hopefully, these increased responsibilities on plan sponsors will continue to bring much needed change to help fix the nation’s structural problem with retirement savings.
Aurum Wealth Management Group is an affiliate of Skoda Minotti.
Eric N. Wulff is a managing director and principal at Aurum Wealth Management Group. Reach him at (440) 605-1900 or email@example.com.
Christopher D. Bart is a managing director and principal at Aurum Wealth Management Group. Reach him at (440) 605-1900 or firstname.lastname@example.org.
Insights Accounting & Consulting is brought to you by Skoda Minotti
NEO Ernst & Young Entrepreneur of the Year
Joel E. Adelman
founder and CEO
The Advance Group of Companies
In 1998, Joel E. Adelman established The Advance Group of Companies, which is dedicated to providing entrepreneurial staffing companies with the opportunity to flourish and grow. Advance not only provides capital funding to its clients, it also provides various back office services that include information technology, payroll and tax, and recruiting/search software.
Based on his experience and knowledge, Adelman, who is founder and CEO, intended to establish a business selling consumer products. However, his exposure to payroll services at a national staffing convention led him to uncover an underserved market. This fueled Adelman’s passion, and he became determined to create a new solution for the staffing industry.
Adelman combined several different services into one business, developing a company with few direct competitors. Advance offers entrepreneurs all-inclusive services and support.
The company recently introduced a new service, Workforce Solutions, which matches the demand and supply of labor. Adelman once again identified a need in the market and discovered a manner in which to capitalize on it, bringing together small and midsize staffing firms and introducing them to Fortune 500 consumers in need of their services.
As the largest independent provider of funding and leading provider of solutions for the temporary staffing industry, Advance has grown steadily. As to be expected, the company’s revenue declined during the recession. However, Adelman’s foresight and management decisions allowed the company to enhance its earning potential by expanding its service offerings.
When the economy began to improve and the demand for staffing escalated, Advance grew at 25 percent. Advance has maintained that 25 percent growth rate for the past three years and forecasts that it will continue to grow at this rate.
Adelman’s one-of-a-kind business offers fellow entrepreneurs an opportunity to realize their aspirations via technological and monetary support. As a result of his innovative and unique offerings, the supply of labor better matches the demand.
How to reach: The Advance Group of Companies, www.advancepayroll.us
The Patient Protection and Affordable Care Act, often called the Affordable Care Act or just Obamacare, represents one of the most far-reaching government overhauls of the U.S. healthcare system since 1965 when Medicare and Medicaid came into being. It will be phased in over time, with the majority of the changes taking effect in 2014.
The act focuses on increasing the rate of health insurance coverage for Americans and reducing health care costs. Here’s what some area businesses have on their minds about health care reform as the time nears for the full impact of the ACA:
- Steve Brubaker, chief of staff, InfoCision Management Corp.
- Craig Shular, chairman and CEO, GrafTech International
- Alan P. Jacubenta, president and CEO, Mango Bay Internet
- Rick Hull, president and CEO, Premier Bank & Trust
- Chuck Abraham, executive vice president/CFO, Hitchcock Fleming & Associates Inc.
- Rick Solon, president and CEO, Clark Reliance Corp.
- Andy Zynga, CEO, NineSigma Inc.
- Jodi Berg, president and CEO, Vita-Mix Corp.
1) How is your company preparing for changes associated with health care reform?
- With more than 4,000 employees, education is key and our priority is to make sure we provide everyone with the knowledge they need to make informed decisions. There are a lot of changes on the horizon and it’s important we communicate these changes in a timely manner. We are doing this though our internal communication channels such as our employee newsletter, employee intranet and face-to-face meetings.
- GrafTech has always provided an excellent health care plan to its team members. We are well-positioned to comply with the PPACA. Our plan is affordable for our employees; therefore, no one will be eligible for government subsidies and GrafTech will not be assessed a penalty.
- We are in constant contact with our benefits agent whom we have worked with for a number of years and have been very pleased with his knowledge and service. He attends all the latest classes and seminars available to keep us apprised of the latest laws. He will let us know what's changing with the different carriers and how it might have an impact on our current and future coverage.
- Most importantly, we are making sure we stay educated on the changes. It is important that we are able to answer our employees’ questions and also be supportive of their needs. Our budgeting process is robust, and we spend a lot of time in this area making sure we are making the right choices for our employees and our company.
- For more than three years, we have been learning about the requirements since the ACA was passed in March 2010. We will review our current plan design with our benefits consultants this summer. At that time, we will assess any changes that may be required for our 2014 renewal, including the possibility of adding a high-deductible option to our current plan.
- Our preparation for health care reform has consisted of our human resources staff reviewing the law with our health care providers and consultants. In addition, our legal counsel has reviewed our existing health insurance programs to insure compliance.
- We are working closely with our brokers, Oswald Cos., for frequent and regular updates regarding health care reform and the related steps of adoption. Oswald advises us of both milestones and compliance requirements so we can plan for and execute on each. Staying informed is most of the battle for us right now as we ramp up toward 2014.
- We have been educating ourselves regarding the elements of the law through articles, seminars and benefits affiliations. We offer a fairly comprehensive health plan to our employees today and are constantly monitoring the progress, changes and evolution of what is available in the insurance marketplace. So far we do not believe that the changes will have a large financial impact on Vitamix.
2) What are you doing specifically to contain health care costs for your employees?
- As a self-insured employer, we’ve always placed a high value on providing our employees with comprehensive health and wellness programs. Reducing our claims is a priority by ensuring our employees have convenient tools like on-site wellness clinics and fitness facilities to promote healthy decisions, and decrease employer out-of-pocket expenses. Where many companies are cutting back on amenities, we embrace the concept as a driver of employee engagement.
- GraFit is a company-sponsored wellness program that includes free biometric screenings and incentives to make healthy lifestyle choices.
We offer employees the opportunity to purchase fresh produce from a local vendor who delivers to our site every week.
Our leadership team helps shoulder the burden of health care costs too. Mid-level managers each pay an additional $150 per month for health insurance; senior-level executives pay an additional $200 per month.
- Every year, we go through a process to get health care quotes from different providers. We compare their offerings in order to get the best coverage for the best price. If a change is warranted and it is cost effective, we do it with the least amount of coverage change as possible. The current provider usually matches what we were able to find through quotes, decreasing the overall increase in price.
We have opted to continue to pay a larger portion of the overall cost rather than pass that on to the employees. In addition, we shop our benefits annually to make sure we are receiving the best possible coverage at the lowest cost possible. We continue to search for new tools to add to our offering that will allow the employees to have all the benefits they need. We also have a wellness program that is aimed at preventive care.
- Even though not required to at the time, our plan implemented coverage for Essential Health Benefits (basic preventive/wellness services), elimination of pre-existing condition exclusions, and an expanded definition of dependent. Additionally, we have tried to raise “wellness” awareness through a number of efforts: encouraging participation in the Heart Walk and other types of exercise, administering “weight-loss challenge” initiatives and sponsoring yoga and meditation classes at the agency. We also discuss regularly with our associates the importance of wellness, use of network providers, requesting generic drugs when available and proper use of urgent care facilities — in short, being wise consumers of health care.
- We started several years ago to educate our employees on the types of activities and choices that drive health care costs. We utilize our health care providers and consultants to propose innovative programs to help us control costs, and we have gone to a wellness program to promote individual health care improvement.
- We have a high-deductible HRA plan in place. We have taken the deductibles up to $5,000/$10,000 for premium reduction. We cost-share the premium with employees — the company pays 75 percent and the employees pay 25 percent of the premium. Further, within the high-deductible plan, we set a sub-deductible of $500/$1,000 for each employee, after which the company reimburses 80 percent of claims until the plan deductibles are met. It may sound complicated, but it’s kept us in the top quartile when compared to our peers for affordability of our plan to employees. We are also in the early phases of a wellness program, which we expect over time will help control/reduce cost increases. The biggest motivation for us to have such a plan is simply to provide resources that keep our employees feeling as healthy and energetic as they can, which we hope translates into more fulfillment while at work.
- We take a Total Wellness Approach to our employee benefit plans. We were early adopters of an outcome-based medical benefits coverage that encouraged positive healthy behavioral changes among our employees. Through a combination of biometrics, education, fitness programs, and financial incentives driven by wellness promotion, we will experience the benefit in overall reduced health care costs for the long term. We started a tobacco-free campus in 2012, and do not hire tobacco users. Vitamix still pays 100 percent of its employee medical premium; however, we have implemented a high deductible plan that employees can reduce to zero if they meet the criteria for modified NIH biometrics targets. For example, an employee who meets all target range biometrics for blood pressure, cholesterol, body mass index and smoking, along with participating in health education, training, or regular physical exercise, will incur no deductible for the year.
3) Do you foresee having employees pay a larger share of company-offered health care coverage?
- We’ve always taken a strategic approach to employee health and wellness. What that looks like right now is adapting our offerings to not only comply with the new requirements, but also to provide our employees with coverage that meets their family’s individual needs. We continue to monitor and will comply with all of the reform’s expanded coverage choices so we can provide our employees with effective and affordable options.
- That is not our current intention, but we will continue to monitor and evaluate if a change in the cost share model is required. Over the last 10 years, we have managed our program to an annual average inflation rate of 3.7 percent. This compares favorably to the national average of 6.3 percent over the same period. Our concern is that elements of PPACA do not lower insurance costs, but in fact cause the rates to go up.
- Things are unpredictable other than we know that there is a good chance that prices will continue to skyrocket. If we had to, we would ask our employees to pay a share of the expense for health coverage. It depends on what happens in the beginning of 2014 with community rates and what they offer versus staying with private insurance and the cost to the company.
- Not at this time. Our goal is to allow our employees continued benefits while keeping them affordable to the employee.
- Our goal would be to minimize having employees pay a larger share. Since we are in a service industry that relies heavily on high-caliber talent, our benefits plan is one of several tools used for recruitment and retention. Our goal would be to continue to make the health benefits as affordable and attractive as possible to our employees.
- We have always believed that paying a substantial portion of the health insurance premiums is helpful to recruiting the best people. We do not contemplate increasing the percentage that our employees pay.
- We pride ourselves with trying to have a healthcare plan in place that is affordable yet quality coverage for our people. While I think it is too soon to draw a line in the sand about the cost sharing, I can say that philosophically we are opposed to increasing the burden on our employees.
- We do not foresee this happening in the future; however, until the full impact of the ACA is discovered, we will reserve our opinion on the matter. Some pundits say it will definitely increase overall costs, while others say more competition will reduce costs long term. We are unsure what our health care insurers will do; however, our focus will continue to be on what we can control, and for now that is our wellness offerings and employee incentives toward better health.
Earlier this year, Facebook COO Sheryl Sandberg set off a renewed debate on an old question: Why aren’t more women in executive positions? The answer you get depends on whom you ask. Some say it’s outright discrimination, while others argue that it’s an aggressive, inflexible culture that limits women’s advancement or drives them to opt out.
Who is the CEO?
For anyone who questions that there is a problem, the evidence is quite clear. While research shows a correlation between a company’s financial performance and the number of women in its governing body, women held just 14.4 percent of executive officer positions at Fortune 500 companies in 2010.
More than a quarter of companies had no women in an executive officer position. And 48 percent of Fortune 1000 companies had one or no women on their boards in 2012.
As an entrepreneur and business owner for 30 years, I know firsthand many of the challenges that women face in the workplace. One of the most pervasive issues is this: a deeply entrenched belief that productivity and effectiveness are defined by the number of hours you spend at the office.
Any executive today knows that working at least 60 hours a week is standard. While technology has simplified our lives in many ways, it has also complicated it. We’re now expected to be on call 24 hours a day, seven days a week, ready to respond to requests at any hour of the day or night.
At most companies, the rewards go to those who are willing to put work above everything else, and to do it over the long haul. Those expectations are coupled with a complex and ever-changing global environment that make us — women and men — more fearful and stressed out than ever before.
With that kind of prevailing climate in many companies, it’s no surprise that people looking for a sense of equilibrium choose to leave.
Gender representation needs
Until productivity and effectiveness are redefined to allow and encourage contributions of varying levels, we’ll never achieve fair gender representation. Even worse yet, we’ll never get the best we can from each person. We need to redefine successful leaders not as those who work through the night, but as those who are empathic and balanced, those who cultivate productive and healthy people and work environments.
Eventually companies will have to heed the call to re-examine their work cultures, asking themselves hard questions about who is best served by maintaining the status quo. Finding a balance between work and life is gaining increasing importance and can’t be ignored.
Find the right balance
In a global study conducted this year by LinkedIn, entitled “What Women Want @Work,” 63 percent of respondents defined success at work as “finding the right balance between work and personal life.” To the question, “Would you like a more flexible work environment,” 65 percent answered that flexible working would better enable them to manage career and family.
If you’re wondering how to get started, open-mindedness and creativity are essential. You have to be willing to throw out the old to bring in the new. That means a willingness to redefine roles and responsibilities, focusing on what needs to get done rather than how it gets done.
People don’t need to work overtime or full time to be productive, and responsibilities can be divided in innumerable ways.
We must begin by deeply examining our prevailing notions of work and being willing to consider that people can be more productive and effective if we create more flexible, empathic work environments. Only then will we create truly productive, efficient, profitable businesses that add value to the well-being of individuals, families and communities.
Donna Rae Smith is a guest blogger and columnist for Smart Business. She is the founder and CEO of Bright Side Inc.®, a transformational change catalyst company that has partnered with more than 250 of the world’s most influential companies. For more information, visit www.bright-side.com or contact Donna Rae Smith at email@example.com
“A ship in port is safe, but that’s not what ships were built for,” is a quote that hangs in Brig Sorber’s office at Two Men and a Truck in Lansing, Mich. Sorber uses that quote to define the new direction in which his company has been moving.
“I love that quote because this ship, Two Men and a Truck, has been in port for too long,” says Sorber, CEO. “We’ve got to get this into deep blue water. There are a lot of challenges out there and a lot more risk, but that’s where business is done. We need to start moving forward and accept the challenges.”
Sorber and his brother, Jon, started Two Men and a Truck International Inc., a moving company, in the early ’80s as a way to earn money using their ’67 Ford pickup. Today, the business has x4,500 employees, more than x1,400 trucks, more than x200 franchises in x34 states, Canada, the U.K. and Ireland, and 2012 revenue of x$361 million.
“We did it to make beer and book money for college,” Sorber says. “We really never thought that it would get to this point.”
However, in getting to this point, the company had neglected to make necessary changes in order to keep the operation aligned and running well.
“One of the challenges we have had is going from a mom-and-pop-type business to having to grow up and become more corporate,” Sorber says. “We needed to bring in newer and stronger skill sets.”
Here’s how Sorber has helped Two Men and a Truck grow up.
Two Men and a Truck incorporated its first business in Lansing, Mich., in 1985 and began franchising in 1989. The company at this time was run by Sorber’s mom since he and his brother were in college.
Upon graduation, Sorber worked as an insurance agent and also operated his own Two Men and a Truck franchise. He returned to the company in the mid-’90s, became its president in 2007 and CEO, the title he carries today, in 2009. In that time the company had grown significantly, but it wasn’t running as well as it could be. Starting in 2007, Sorber’s job was to help restructure the business.
“We had to take a look at ourselves internally,” Sorber says. “There came a time that I just knew things were broken here.”
Because the company was growing so fast there was no organization chart. It was very loose on who reported to whom. It wasn’t that people weren’t working hard, but things were not getting measured.
“I had an epiphany that something had to change big time,” he says. “I made up something that resembled an org chart on a big piece of paper in my office. I brought in five people that I greatly trusted and had confidence in and gave them three markers — green, which meant that person or that job was important; yellow, which meant I didn’t have an opinion either way about this person or about this job; and red, which meant that this job makes no sense.”
Sorber used that as a starting point to help him identify where the company could restructure and cut costs.
“I wanted to give big bonuses to everyone at the end of the year and share the winnings, but we had to prime the pump first,” he says. “We went from 78 employees down to 51 employees after I went through that chart.
“That wasn’t because we were losing money. It was because by the time we realigned everything, there were some people here who weren’t doing anything.”
To avoid issues such as this, you have to have metrics that you measure to make sure whether you’re doing well or not.
“My metrics are No. 1, customer satisfaction,” Sorber says. “Find out how every one of your customers feels about their service. No. 2 is trucks and driveways. We want to put more trucks in more driveways every year.
“No. 3 is franchisees. Make sure your franchisees are profitable and have the tools to grow. No. 4 is giving back to the community.”
Metrics are a crucial aspect of success, but so is a mission statement that helps employees and customers know what the business is about. It also makes your decisions as a CEO simple.
“If your mission statement is strong, it should be limitless,” he says. “For us, we had our mission statement when we had 25 franchises, and now we’re well over 200 and it still applies. You also need core values that comprise what’s important to your company. Once you have those, you have to stay within the confines of your core values.
“When I was a younger executive I thought that was stuff you say to be nice. It’s something that’s serious. You can’t go into work and keep turning the wheel and expect better things to happen. You’ve got to maintain your mission statement, core values, measure what you’re doing, and then you have to look for ways to make things better.”
Bring in key people
As Two Men and a Truck went through these necessary changes, new employees and executives had to be brought in to give the company the right skill sets to continue growing.
“Sometimes we hold onto our executives too long, and we get comfortable with them,” Sorber says. “They may not question what you’re doing. Not all of them, but many of them can be fine with the status quo and as the world is changing they’re not forcing you as a CEO to question what you’re doing.”
You can’t settle for the people who are in your key positions. You need to find people with the right skill sets and make sure they stay within your mission statement and core values.
“Bringing in new individuals is kind of like working on an old house,” he says. “You think if you put new windows on the house it’s good, but then the siding looks really bad. The same thing happens in business when you get somebody that’s great in a department. You start to think, ‘What if I had someone like that in marketing?’”
Sorber brought in executives to fill his company’s voids, and they began offering all kinds of new ideas for the business.
“When I started bringing in these key executives, they wore my carpet out because they have fresh eyes for the business,” he says. “They asked why we did this or that. Many of the things we were doing were the right things, but it’s good for you to make your point about why you do it.
“The new executives will say, ‘That makes sense’ or ‘That’s different.’ Other times they’ll say, ‘OK, but did you ever think about doing this?’”
That is how your business goes through an evolution, and it starts bringing in more modern thinking and different approaches. A business will have a life cycle of only so long, and you need to continually reinvent it because your customer is changing. If you bring in new people they may bring the great ideas you need.
“It’s really important as a president or CEO to hire people who are smarter than you in their specific fields,” Sorber says. “Our job as president or CEO is to look more strategically at where we want the business, make sure the executives play nice together, ensure there’s harmony in the business and keep an eye on those important metrics.”
During the course of the past six years, Sorber has been able to successfully do all those things within Two Men and a Truck. Randy Shacka became the company’s first non-family member to serve as president in 2012. Now, Sorber and Shacka are looking at the future outlook of the business.
“We think we will be a $1 billion company by the year 2020,” he says. “In the last few years we’ve been doing a lot of internal work on fixing where we are broken and getting the right people in here. Now we want to be more than just a moving company. We want to be a company for change.”
How to reach: Two Men and a Truck, (800) 345-1070 or www.twomenandatruck.com
Many executives do not view the content they distribute as intertwined with their organization’s unique product or service. However, the two are interchangeable. Your product or service has differentiators that cause your clients to select you instead of the competition. Those same factors apply in content marketing.
If your goal is to engage prospects and ultimately lead them to conversion, you must create content that keeps them engaged. Success comes from creating consumable pieces of content that together form a singular thought leadership message and distributing those pieces across multiple channels. You never know through what channel someone will engage with your brand (or branded content), so the message needs to be consistent.
There are a few simple rules to doing this. Your content and what you’re selling should meet four criteria. It must be:
Useful means the content, as well as your product or service, has a defined use for a target audience. It addresses:
- How do I use this?
- How does this help me?
- What problem does this solve for me?
Here’s an example: According to a recent IDC Research report, 49 percent of the entire U.S. population currently uses a smartphone. By 2017, that number is expected to reach 68 percent. That means that within four years, more than two out of every three Americans — regardless of age — will be connected via smartphone. Therefore, a useful product a company might offer could be a solar-operated phone charger. And useful content to distribute to a target audience may include “How to make your daily life easier with these top five iPhone apps.”
To be Relevant, the product, service or content must be new and interesting, and mean something to the market or industry. Your audience will ask:
- What does this mean to me?
- Do I need this?
Let’s say your organization provides a website portal that connects insurance companies. New and interesting content that means something might be, “How your health care plan will be affected by reform . . . and what you can do to prepare for it.”
In a world filled with noise, you must demonstrate how what you do is Differentiated from competitors and explain:
- How does your content, product and service compare to the competition?
- Is it unique?
Let’s go back to the smartphone example. If you sell or service iPhones and Android-platform models, think about creating engaging content that examines the needs of today’s smartphone user, and then go beyond the basic functionality.
It’s also imperative to understand your target audience and the target audience for each product. Android-based smartphones are primarily aimed at businesspeople. iPhones, for all their bells and whistles, are not. This differentiation has led to a lot of confusion in the marketplace when consumers compare one against the other. Understanding this allows smart marketers to create engaging content such as “The top 10 needs of businesspeople: A comparison of Android phones vs. iPhones.”
Finally, your product, service and content must be Available and easily obtained in any channel.
If you run a benefits company that works with employers, for example, health care reform provides a timely opportunity to help clients make sense of the landscape. This might entail delivering a variety of consumable content that’s available to them 24 hours a day, seven days a week, through any channel.
This could include a video that explains the difference in options available to employers. It could be a social media campaign that outlines the top five differences between the health care insurance exchanges and employer-sponsored health care. Or, it may be a series of print mailers or webinars, or even a dedicated microsite that’s filled with content that details what employers need to know.
When your goal is creating engaging content, your ability to consider — and address — each of these factors may be what’s required to transform engagement into measurable conversion.
This is no fish story. Instead, this column is about one of the most important roles an owner or CEO must fulfill on an ongoing basis.
Leaders spend an inordinate amount of time dealing with the issues du jour. These range from managing people, wooing and cajoling customers, creating strategies, searching for elusive answers and just about everything in between. These are all good and necessary tasks and undertakings. Too frequently, however, these same leaders delegate this effort to others or ignore it altogether. To be “in the game,” you have to know when to fish or cut bait.
Successful fishermen know that to catch a fish they have to sometimes cast their lines dozens of times just to get a nibble or bite. The first bite might not result in reeling in that big fish. Frequently, a nibble is just a tipoff as to where the fish are swimming.
The same applies to reaching out — casting a line, if you will, to explore new, many times unorthodox, opportunities for your organization. These opportunities can be finding a competitor to buy, discovering an unlikely yet complementary business to partner with or snagging a new customer from an industry that had heretofore gone undiscovered.
All of this takes setting a portion of your time to investigate unique situations, as well as a healthy dose of creativity and the ability to think well beyond the most obvious.
Too many times even the most accomplished executives lack the motivation to look for ideas in unlikely places. Some would believe that it’s unproductive to spend a significant amount of time on untested “what ifs.” Just like sage fishermen, executives can also cultivate their own places to troll.
Of course, networking is a good starting point, particularly with people unrelated to your business, where sometimes one may fortuitously stumble onto a new idea that leads to a payoff.
Other times, a hot lead might come from simply reading trade papers, general media reports and just surfing the Internet. The creative twist is reading material that doesn’t necessarily apply to your own industry or to anything even close to what you do. New ideas come disguised in many forms and are frequently hidden in a variety of nooks and crannies. This means training yourself to read between the lines.
Once something piques your imagination, the next step is to follow through and call the other company or send an inquiry by email to state that it might be worth a short conversation to explore potential mutually beneficial arrangements. This can at times be a bit frustrating and futile. That's when you cut bait and start anew.
However, reaching out to someone today could materialize into something of substance tomorrow. The often skipped but critical next step, even after hitting a seemingly dead end, is to always close the loop with whomever you made contact. Even if there is no apparent fit or interest at the moment, it’s easy and polite to send a short note of thanks and attach your one-paragraph “elevator” pitch.
That same person just might be casting him or herself, be it in a month or even a year later, and make contact with a different organization that’s not a fit for him or her, but recall you because you followed through and created awareness about your story.
This just might lead the person with whom you first spoke to call you because you had had the courtesy to send that note. Bingo — you just got a bite all because of continuing to cast your line.
Good CEOs and honest fishermen also have one other important characteristic in common: humility. They know that when a line is cast it won’t result in a catch every time. But if nothing is ventured, it’s guaranteed there will be nothing gained. Don’t let that big one get away. Just keep casting.