You’ve just launched your product, which has taken months of research and development effort to bring to market. Soon after its debut you receive a notice that you’re infringing on an existing patent or trademark.
You’re now left with a decision: License the technology that you’ve infringed, which you may or may not be able to do, or wind up with a costly infringement suit. You could fight the suit, retreat and try to design around the patent, or scrap the whole thing and start again. Any of those choices come with substantial costs. All the while knowing that with a little bit of due diligence up front all of it could have been avoided.
“Don’t undervalue your business’s IP,” says Jeffrey N. Zahn, an attorney with Fay Sharpe LLP. “Do what’s required to make sure it’s protected and not potentially infringing a third party’s IP rights. This will help you protect your investment in your IP and avoid unnecessary third-party, IP-related expenses down the road.”
Smart Business spoke with Zahn about the intellectual property (IP) mistakes companies most often make.
What IP mistakes do businesses make most often?
The three biggest IP mistakes, in no particular order, are the failure of a business to adequately protect its IP, failure to avoid infringing the IP of other companies and failure to seek the advice of an IP attorney.
There are many ways a company can leave its IP exposed. Those include not using nondisclosure agreements when working with outside parties; forgoing patentability investigations to determine if a patent would suitably protect company technology; failing to file provisional and regular utility and design patent applications when appropriate; allowing trade secrets to leak; not ensuring employees, outsiders and third parties maintain the confidentially of the company’s critical technology; and failing to federally register trademarks to protect brands.
Another major problem is failing to avoid infringing on another’s existing IP rights. This is often the result of not conducting freedom to operate searches for issued patents, as well as published pending patent applications, and trademark clearance searches.
But the one mistake that often leads to all others is failing to seek the advice of an IP attorney. This is a critical aspect of due diligence and developing a solid and secure IP strategy.
Do large or small companies typically make these mistakes?
Smaller companies are more likely to make these mistakes. Smaller businesses often believe an IP attorney is a service they can’t afford, or one is only needed when filing a patent or trademark application. In most cases, it comes down to not recognizing the value of IP to their businesses.
In contrast, the larger a company is the more likely the company is educated about IP and has in-house counsel and/or a relationship with an IP firm to address these issues.
Is there a particular time when a company is more vulnerable to IP issues?
Businesses are typically more at risk during the early stages of their existence. That’s why companies should take stock of their IP and look into the market to identify the IP of the relevant third parties, such as competitors, early on. This can save a lot of time and expense if it’s done up front.
Companies are also vulnerable during the early stages of a product development cycle. Bringing a potentially infringing product to market may require the company to license the infringing technology or trademark, or rebrand or redevelop the product if the technology or trademark can’t be licensed. That’s why it’s critical to conduct freedom to operate searches and trademark clearance searches during the initial stages of a product’s development.
What can help businesses prevent these errors from happening?
The best tool is education and a proactive IP management program. Have conversations with those who know the issues — someone who works in the IP field regularly, whether that’s an in-house attorney or an IP attorney at a firm — because affected parties must be aware of IP issues. Then continue to talk with an IP attorney as your business grows, new products are developed and new markets are served. Many businesses would be pleasantly surprised how valuable an initial consultation with an IP attorney is relative to the expense.
An ounce of prevention is worth a pound of the cure. This is especially true in the area of product design and branding where a little due diligence to investigate third party IP rights can help you develop your product and brand strategy so it doesn’t potentially infringe existing rights. This can help you avoid potential infringement issues, such as a costly patent or trademark infringement suit.
Jeffrey N. Zahn is an attorney at Fay Sharpe LLP. Reach him at (216) 363-9168 or email@example.com.
Insights Legal Affairs is brought to you by Fay Sharpe LLP
Regardless of its size or sector a company works within, all businesses have certain common threads. For instance, the need to communicate effectively and efficiently — both internally and externally — is something every business deals with. However, it’s also important to note that every business has a unique communication DNA. A phone system that works for one company might not make sense for another.
“Every business is different,” says Alex Desberg, sales and marketing director at Ohio.net. “They shouldn’t be shoehorned into an off-the-shelf phone solution.”
Smart Business spoke with Desberg about the importance of customization, and how VoIP can be tailored to serve various industries.
How can VoIP be designed to fit different markets that have different needs?
Different industry segments have characteristics that are only seen within that space. By deploying a customized VoIP system, a company can gain advantages from certain functions that are designed to fit that industry’s specific needs. It’s important to avoid trying to fit a square peg into a round hole.
How can VoIP be tailored to serve the manufacturing sector?
Manufacturing facilities typically have two different components. First is the headquarters, which serves as the hub of communications and houses accounting, sales and administrative personnel. The sales team, which generally uses headquarters as their home-base, need a phone system that can help them keep in touch with their main facility while they’re out pounding the pavement. Then there are remote manufacturing and warehouse facilities that are often spread throughout the country or world. Not only is there a need for fluid communication at the administrative level, but the remote facilities must also be able to correspond effortlessly with headquarters. A VoIP system can be tailored to meet the disparate needs of a manufacturing facility, enabling that facility to become more accessible, and ultimately, more efficient.
How can VoIP support the needs of CPAs and financial institutions?
Typically, in these types of businesses, the staff are housed in a single location. If there are multiple locations, the phone needs are often identical. Employees are usually on the phone a good part of the day and there is a need for continual customer contact. The basic administrative functions are the most important components for such businesses. Because the workforce is stationary, there is rarely a need for remote or mobile applications.
How can VoIP streamline calls for the medical sector?
Most small to midsize doctor’s offices are structured so that during the day inbound calls go through a receptionist. During the evening, medical practitioners utilize absentee services where callers are redirected through phone numbers that lead to on-call personnel or forwarded to hospitals in the case of emergencies. A VoIP system can redirect, or triage, phone calls as needed.
How can VoIP allow a virtual company to appear as if they are well grounded?
More and more companies are shedding their brick and mortar locations in favor of having their employees work remotely. By having a front-end VoIP configuration, organizations can present a unified communications system that will give the appearance of a solid business. Functions like call forwarding, voice mail and conference calling are available so employees can stay connected without being tied to an office. Also, VoIP can eliminate the need for companies to utilize traditional phone lines and equipment, so overall cost savings and service enhancements can be significant. ●
Alex Desberg is sales and marketing director at Ohio.net. Reach him at firstname.lastname@example.org.
Insights Telecommunications is brought to you by Ohio.net
The environmental due diligence process can be time-consuming, which is why buyers should get started early when entering into negotiations to purchase property.
“Depending on when environmental due diligence begins, environmental issues might not be discovered until close to the end of the deal. That could result in a transaction not closing for months after initially planned, which was the case in a matter we had this year,” says Meagan Moore, a partner at Brouse McDowell. “Be ready to begin a Phase 1 assessment when you initiate discussions regarding a purchase.”
Smart Business spoke with Moore about Phase 1 and Phase 2 environmental assessments, and the protections they provide buyers regarding potential liability related to contamination.
What is the first step in the environmental due diligence process?
Hire an environmental consultant to perform a Phase 1 study. That will give you a better understanding about the property. Because of the way certain environmental regulations are written, even a purchaser that has no culpability for what is on the property could be responsible for cleanup costs. Therefore, it’s best to know what you’re getting in advance so you can plan for it during the transaction.
Phase 1 is a report intended to identify potential environmental issues associated with the presence of hazardous substances or petroleum products on a property. It involves a review of federal, state and local records, government databases, interviews with people familiar with the property and an on-site inspection by the environmental consultant. The review provides an overview of the property’s history and whether there is any information or visible signs of a release or contamination on the property.
Some sellers may conduct a Phase 1 study in order to expedite the transaction. It is important to note that Phase 1 is only valid for 180 days and typically the environmental consultant must grant third parties authority to rely on the report.
There are some environmental issues that the Phase 1 investigation does not cover, including whether the property has wetlands or the building contains asbestos. Those can be added to the scope of a Phase 1 if a buyer envisions potential issues with a property. Any documented or visible signs of contamination noted in the Phase 1 are considered a recognized environmental condition (REC).
If the Phase 1 report includes a REC, what should a potential buyer do next?
A Phase 2 assessment should be conducted, which typically involves a subsurface investigation. Soil and groundwater samples are taken for lab analysis to determine if there is hazardous material present. It’s not going to delineate the extent of the contamination, but it will confirm or deny the presence of hazardous materials.
If the contamination is confirmed, you’ll have to determine how it should be addressed — whether remediation should be done or if the material can be left in place.
All these concerns can be factored into the negotiation process with the seller. You could include indemnity agreements with the seller and establish an environmental escrow account to pay for any issues that arise.
Do any former uses require a different approach?
A Phase 1 assessment should be done for any industrial or commercial property. But you definitely need an assessment if there was a gas station, dry cleaner, auto repair shop or industrial use of the site. Phase 1 assessment requirements are the same no matter what type of business; it doesn’t matter if it was a textile plant or gas station. But if you’re looking at a property that had historical operations that could have led to contamination, a Phase 1 assessment is necessary to determine the condition of the property so you’re aware of what you’re buying. As a buyer, you want to know everything upfront so that can be a part of the negotiations and you can limit your liability. ●
Meagan Moore is a partner in the Environmental Practice Group at Brouse McDowell. Reach her at (216) 830-6822 or email@example.com.
Insights Legal Affairs is brought to you by Brouse McDowell
In continuation of the “Billion Back” campaign from the summer of 2013, the Ohio Bureau of Workers’ Compensation (BWC) has announced additional changes to come this year and in 2015.
“As we begin 2014, it is important for employers to be aware of impending changes and understand how they can further impact the protection of their workers as well as their bottom line,” says Randy Jones, senior vice president of Ohio TPA Operations at CompManagement, Inc.
Smart Business spoke with Jones about the upcoming changes and their potential benefits to the employers of Ohio.
What is ‘A Billion Back?’
‘A Billion Back’ is a one-time dividend equating to $1 billion for private employers and public taxing districts. It was made possible because the financially strong Ohio State Insurance Fund exceeded the target funding ratio of assets to liabilities established by the BWC Board in 2008.
Checks were released to eligible organizations in June 2013. For private employers that participated in a group retrospective rating program for the July 1, 2011, policy year, dividends were calculated and paid following the 12-month retrospective refund calculation that occurred in October 2013.
What other program benefits may employers utilize this year?
The BWC has also expanded its safety grant program from $5 million to $15 million to further promote workplace safety, workplace wellness and encourage investment in protecting Ohio’s workers. It has modified the program to be a 3-to-1 match with a maximum grant of $40,000 per employer. The BWC has also expanded the program to allow for various types of previously excluded equipment.
Now is the time to minimize your out-of-pocket expense for new equipment that may be eligible under the safety grant program. For example, your out-of-pocket cost of $13,333 would be matched with the BWC’s $40,000, which equates to a 300 percent return on your investment in safety.
According to BWC statistics, every dollar spent on safety equipment equates to a $3 reduction in claims costs.
What can employers expect in 2015?
The BWC will be transitioning to a billing system that will align it with a standard industry practice, enabling them to collect premiums before extending coverage. The transition will become effective July 1, 2015, for private employers and Jan. 1, 2016, for public employers. The BWC has indicated that a change to a prospective billing system could have an overall base rate reduction of 2 percent for private employers and 4 percent for public employers, and provide an opportunity for more flexible payment options of up to 12 installments.
The BWC envisions a few changes as it implements prospective billing, including:
- Earlier deadlines to sign up for incentive/discount programs. Beginning in the fall of 2014, employers wishing to participate in programs such as group rating, group retrospective rating or other discount programs will have to make those selections sooner.
- One-time credit. A one-time premium credit will be given in July 2015 to the average private employer to cover its August payroll report, which includes the January to June 2015 premium as well as the July and August prospective premium. Public employers will receive a 50 percent credit for 2015 and a 50 percent credit for 2016 within the March 2016 invoice.
- A new payment schedule. Private employers will receive their invoices in June and begin paying premiums before July 1. While that’s earlier than in the past, employers will be able to make quarterly payments, with some employers able to choose as many as 12 installments. Public employers will need to pay at least 50 percent of their annual premium for both 2015 and 2016 by May 2016.
- A true-up process. Since the BWC will be providing workers’ compensation coverage based on estimated payroll, it will ask employers to report their actual payroll for the prior policy year and pay any shortage, or receive a refund for any overage in premium. This begins in August 2016.
- Employers should contact their third-party administrator for workers’ compensation to discuss the transition process. ●
Randy Jones is senior vice president of Ohio TPA Operations at CompManagement, Inc. Reach him at (800) 825-6755, ext. 65466 or firstname.lastname@example.org.
Insights Workers’ Compensation is brought to you by CompManagement, Inc.
Rising health care costs have driven up insurance premiums, straining employers’ funds and leaving less money available to invest in their businesses, hire employees or award pay increases.
“Any time costs go up, there’s less money to spend on other things that are important to the growth of a business,” says Ross Farro, a principal at Benefits Resource Group. “It comes down to companies deciding how they will pay the increased expenses and continue to offer health care benefits.”
Smart Business spoke with Farro to learn about strategies employers can utilize to effectively deal with rising health care costs.
Are certain types of businesses hit harder by these changes than others?
Generally the size of the business determines how it’s treated under the Affordable Care Act (ACA). For instance, the new law means community rating is used to determine premiums for companies with fewer than 50 employees, which eliminates medical underwriting. This has driven up rates for companies with healthier workforces — sometimes as much as 50 to 120 percent. They are also obligated to provide minimum essential benefits to meet the plan design requirements under the law.
Also, employers that offer group benefits are being hit with fees and higher taxes that come with the ACA. Large employers are also still awaiting final U.S. Department of Health and Human Services guidance for measuring the eligibility of employees during 2014 for required coverage in 2015.
What are the most troubling issues for employers as health care costs rise?
Employers are concerned with controlling costs without reducing employee benefits. The taxes and fees that come with the ACA are substantial. This year, taxes and fees are roughly 5 percent of fully insured premiums, and are expected to increase next year. Employers paying $1 million for health care premiums will have $50,000 in associated fees. For many companies, that’s the equivalent of one potential new employee’s annual salary.
What should employers do to better control health care-related expenses?
Wellness plans and an emphasis on consumerism are two approaches that can help employers better afford the health insurance benefits they offer employees. Negotiating with or changing providers really doesn’t work. A better solution is to focus on things that can be changed, such as addressing obesity and chronic disease within your employee population since these are factors that increase costs. Wellness initiatives not only have an impact on insurance premiums over time, but can improve productivity and mitigate disability claims.
Health care consumerism is fundamentally about restructuring an employer’s health benefit plan into one that puts economic purchasing power in the hands of its employees. To leverage this approach, companies should consider programs such as a health reimbursement account or a health savings account paired with a high deductible that pays for health care expenses with pretax dollars from the employee, employer or both. Either strategy brings attention to the costs of services and prescription medications, encouraging employees to be more cost conscious.
Self-insuring allows employers to pay the costs of claims rather than pay for a fully insured premium, offering a more transparent look at costs. It also can substantially reduce the amount of new ACA fees and taxes. Self-insuring is becoming a viable option for employers with fewer than 100 employees, as insurance carriers are developing products for groups as small as 25 employees.
If employers do only one thing to deal with the challenge of rising health care costs, what should it be?
Employers need to work with a consultant, not a broker. It’s not only about shopping your benefits with other insurance providers; it’s about being creative and knowledgeable. You need a proactive consultant who understands the laws and can develop strategies to help you. As much as employers might want to wait to see if something comes along to derail the ACA, they must realize it’s not going anywhere at this time. ●
Ross Farro is a principal at Benefits Resource Group. Reach him at (216) 393-1820 or email@example.com.
Insights Employee Benefits is brought to you by Benefits Resource Group
Salespeople always have goals they need to meet. Giving them a road map on how to achieve these goals can help increase accountability and boost sales.
“We developed something to make salespeople a little more responsible. We put a program together that not only sets goals, but helps them achieve their goals,” says Rick Voigt, president of Today’s Business Products.
Smart Business spoke with Voigt about setting sales goals and how businesses can get better results by making employees part of the process.
Where did the idea originate and how does the program work?
The program came out of a sales management group; another company had great success with it, and we tweaked it to suit our needs.
We call it ‘Stand and Deliver.’ Salespeople were given quotas, which were broken down by quarters. Then they were asked how they intended to reach these goals. That included things like what customers they were going to get, their top 10 prospects and leads they were working on.
It makes someone more accountable than just giving them a goal of $1 million and letting them figure out how to accomplish it. We’ve given salespeople quarterly quotas, but never asked them to come up with a plan for how those sales would be achieved. This way they take more ownership of their goals.
It’s a road map to success. By making it very detailed, it’s easier to follow through on the results. If someone says they are going to call on these 15 customers and try to expand their categories — try to get them to add janitorial products, for example — a manager can follow up on that and see the outcome.
How was the plan presented to employees?
They were provided with an outline and a template to work with, as well as examples of how to create a road map. A spreadsheet was provided that had different tabs to be filled out, including a section on what salespeople needed from the management team to be successful.
There also was a SWOT analysis — they were asked to identify strengths, weaknesses, opportunities and threats, both internally and externally. That provided us with a chance to evaluate their opinions of the company and our customers.
Where there any surprises?
No, but there were things mentioned that are needed and we’re working on those, such as a new software program that will provide them with a mobile app to access customer information.
The process was very positive; they did a great job making their presentations and were well prepared.
The intent of doing the road map is to eliminate excuses. At the end of the quarter, if all steps of the process are followed, then everyone should meet his or her goals. We made sure goals were manageable, although there also are stretch goals for employees who go above and beyond.
What if a salesperson follows through on the plan and doesn’t get the desired results?
Quarterly goals are set, but there are still monthly meetings to go over sales and see where assistance is needed. It could be a matter of sending out another salesperson, manager or even the owner to help the salesperson.
If someone hits 95 or 97 percent of the goal, but is really working and giving everything, you work with them. You can also tell, however, if someone is falling short because of attitude or work ethic. If they’re calling in sick frequently, coming in late or are never around, if they’re not asking questions of clients, that’s a different situation.
If you train employees well and they help each other out, there’s no reason why someone would fail. Some salespeople liked the road map because they wanted that direction and structure. They thought it would help them improve sales.
This helps employees understand what they need to do. Some were doing something similar already. This program just creates a more defined process. ●
Rick Voigt is president of Today’s Business Products. Reach him at (216) 267-5000 or firstname.lastname@example.org.
Insights Customer Service is brought to you by Today’s Business Products
Companies are getting away from the old IT model of purchasing an on-site solution and having an internal staff working to solve problems. Instead, many companies are utilizing a professional service provider to handle tasks that are not directly related to core company business.
“That allows staff IT to focus exclusively on their lines of business — specific applications and training programs rather than a phone not working, a locked password, or more extreme, the data center/network being down,” says Karl Seiler, president of DataServ.
Smart Business spoke with Seiler about why companies are taking this approach and how professional IT service providers work as partners with businesses.
What IT services should be contracted to service providers outside of a company?
Things that are common to every organization: support, infrastructure, network, wireless, smart devices, collaboration architecture, security, help desk and inventory.
These needs are common across almost any organization and can be done from a professional service provider perspective rather than at an internal level. It allows for higher efficiencies and lets your team focus on its core business rather than solving remedial issues.
How does partnering for IT differ from building IT?
Building IT is the old approach. It’s slow to move and internal people may not have the skills to do a proper evaluation of return on investment or assess the real business fit within the environment. IT is often based on a person with a single mindset who provides the only view. And because CEOs and CFOs are often not the technology experts, that leaves critical decisions to one person who might not always have the knowledge or passionate team around them to proceed down the best path.
With IT as a service, a team of experts complete a comprehensive assessment for the organization. There are engineers who specifically understand infrastructure, applications, networks or collaboration. All that information is reviewed and analyzed to determine the best solution.
A professional IT provider knows how to partner with an organization and learns and develops an understanding of the company’s objectives, allowing them to build appropriate solutions. They become a trusted partner — not a vendor.
How can you tell if an IT service provider would make a good partner?
That’s part of the due diligence process. Vet companies and get a sense of how they work. Talk to references. Visit their workplace, talk with the leadership and see how they utilize the collaboration tools and other technology in their environment to grow their business.
Studies show huge challenges for businesses in terms of collaboration tools in the workplace. Millennials coming into the workforce are naturally collaborative and organizations are not structured effectively for that. Webconferencing, video technology and other services allow you to conduct business in real time. We provide a dashboard interface that shows who is available in our organization so we can connect with that person, see them on video, and effectively share information and data.
The workplace is everywhere now and technology needs to allow for collaboration whether someone’s at home, school, work or Starbucks. You have to build the architecture for your organization so that team members can collaborate from anywhere. Most businesses don’t understand how to architect a network — it’s just not their area of expertise. They have obsolete phone systems that do not work efficiently and are not connected to other company communication tools.
Another area of importance is your data. How do you organize the data (analytics) and build business intelligence tools in real time so you can make informed decisions and implement them faster? Applications have to allow for that level of integration.
Everything starts with finding a trusted partner and beginning the journey of unifying your technology. Effectively building a collaboration architecture begins with equal parts of culture, process and technology. That’s the most important area to address when growing your organization and business. ●
Insights Accounting & Consulting is brought to you by Skoda Minotti
There are myriad programs available to commercial and industrial real estate users that provide low cost capital and incentives for new investment. In addition to conventional financing, there are nontraditional sources of financing, tax deferral and tax mitigation strategies that can stretch your equity dollar.
Smart Business spoke with Bob Brehmer, CCIM, SIOR, principal at NAI Daus, about financial aid programs that can benefit commercial and industrial real estate users.
What are port authority conduit financing and construction savings programs?
If you are considering an acquisition of property, new construction or redevelopment of an existing structure, you should visit your port authority. It can direct you to financing and other programs that may be of benefit. For instance, one of its programs provides for state and local sales tax exemptions on materials for new construction and expansion projects. This can offer considerable tax savings that can be used to fund equity or be reserved for other investments.
Your port authority can arrange financing at higher loan-to-value ratios and can accommodate other structures such as conventional loans, grants, capital leases and operating leases. Bond fund programs allow borrowers to access capital markets and secure long-term fixed interest rates.
There is an ability to integrate other sources of financing such as those available through state, city and county programs, and other conventional financing methods. Eligible business can be industrial or commercial as well as 501(c)(3) and governmental entities. Funds can be used to acquire and renovate existing buildings or for land acquisition and new construction. The programs have been used to fund student housing, manufacturing facilities and redevelopment projects.
What is PACE and what is it used for?
The acronym PACE stands for Property Assessed Clean Energy. It is a method to finance energy-efficient and renewable energy upgrades to buildings by using special assessments. Cities, villages and townships are authorized to participate with property owners who want to install energy efficient improvements and upgrades.
A special assessment district is formed to finance eligible projects with special tax assessments. The assessments are placed on the property owner’s tax bill and are collected over five or more years.
If you are considering a solar, solar-thermal, geothermal or other customer-generated energy project, this may be a program to consider.
What other programs would you recommend?
The EB-5 program, for example, which allows foreign nationals to receive a permanent U.S. green card by investing in new or troubled U.S. businesses and New Market Tax Credits, can be utilized to help fund new and redevelopment projects. These programs are complicated, but have been used in this area for various high profile projects. Fortunately, we have a number of excellent sources and service providers in the area to assist firms using these programs.
One of the more dynamic, but lesser known, programs is the U.S. Foreign Trade Zone Act (FTZ). Created by Congress in 1934, the program is used as an incentive to encourage companies to keep jobs and investments in the U.S. A FTZ removes certain costs and barriers that do not exist in foreign locations.
FTZs also create a designated area that is considered to be outside the stream of international commerce. This allows certain types of merchandise to be admitted to the FTZ without being subject to customs, duties or some excise taxes. The benefits are numerous, including but not limited to the deferral, reduction or elimination of duties. An FTZ also permits activities such as testing, assembly, relabeling, repackaging and storage of goods. Northeast Ohio has two: FTZ 40 in Cleveland and FTZ 181 located in Summit County.
Your next project may be financed by your traditional lender relationship. You should, however, investigate the nontraditional sources of capital and financing available to business. You may end up receiving more flexible terms while retaining more of your hard-won capital for other investments. ●
Insights Real Estate is brought to you by NAI Daus
Developing and retaining talent is one of the most pressing challenges for middle-market companies. Estimates suggest that comprehensive training programs are the second most costly human resource initiative, costing U.S. companies $150 billion in 2012. A key problem for midsize firms with limited resources is how to advance employees quickly and efficiently when development programs appear to require a sizable time and money investment.
“In today’s complex, dynamic and fast-paced work environment, where most learning is occurring informally, traditional formal training and development initiatives alone are insufficient for developing employees,” says Alison M. Dachner, assistant professor of management in the Department of Management, Marketing and Logistics in the Boler School of Business at John Carroll University.
Employees are expected to be resourceful and creative when finding information and problem solving on their own. To successfully maximize human capital development, organizations must leverage informal, self-guided development behaviors with formal training and development initiatives.
“The informality of these practices rebukes the need for an expensive learning and development infrastructure, and instead places more attention on managers’ ability to create a supportive work environment,” she says.
Smart Business spoke with Dachner to learn more about self-guided development (SGD) and its affect on talent management.
What is SGD and why is it important?
SGD refers to proactive employee behaviors that are developmental in nature, such as the decision to voluntarily engage in self-identified development experiences. More specifically, SGD represents an actionable set of knowledge-, skill- or relationship-building activities that improve human capital, but are unstructured, voluntary and not operationally or administratively provided by the organization.
SGD can be carried out during work time or non-work time. Some examples include asking for feedback, reflecting on one’s strengths and weaknesses, taking on challenging tasks, watching a webinar and networking with influential people in the organization.
What SGD behaviors do employees engage in the most?
Employees tend to find information, learn and develop skills relevant to work the most from relationships and reflection. Employees most frequently depend on their colleagues and supervisors when they need answers to work-related questions. More specifically, the three behaviors that are used to the greatest extent when employees need to find information, learn and develop skills are:
- Collaborating with coworkers.
- Interacting with a supervisor.
- Talking with others.
Employees also frequently develop themselves internally through introspection by reflecting on their strengths and weaknesses, and considering ways to improve their work. This learning is retrospective and is likely focused on analyzing critical incidents or salient workplace events judged by the employee to require development.
How can organizations facilitate employee engagement in SGD?
Organizations can influence employee involvement in these proactive development behaviors by hiring the right people and promoting the right conditions for SGD.
First, hire and cultivate employees who are proactive, motivated, curious, social and dedicated. Employees should be primed to seize the initiative, eager to volunteer for fresh projects and try on new roles, and willing to accept responsibility for their own advancement. They should be naturally curious and should be comfortable around other people.
Second, acknowledge SGD behaviors as part of the job. Organizations can design work roles that are supportive of SGD by providing employees the opportunity to try different methods for conducting work and to learn from experimentation. Further, employees should be encouraged not just to seek help and advice but also to provide it.
Third, maximize interaction. The adoption of self-managing teams, open workspaces and cross-functional training can create fertile ground for interaction in many organizations. Companies should give teams autonomy to solicit resources and expertise from around the organization. Companies should also build into the workday more opportunities for employees to network with one another. Even giving people a few minutes to converse before rushing back to their desks after the weekly all-hands meeting can help.
Fourth, make time for reflection. To facilitate the use of more introspective SGD, organizations can encourage employees to reflect on their accomplishments, career direction, strengths and weaknesses, and performance. Companies may even consider using goal-setting initiatives as a way to encourage personal reflection as a method of proactive development. •
Alison M. Dachner is an assistant professor of management in the Department of Management, Marketing and Logistics in the Boler School of Business at John Carroll University. Reach her at email@example.com.
Insights Executive Education is brought to you by John Carroll University
American Roll Form Products
Phil Misch, president
(440) 352-0753 | www.arfpcorp.com
Lower labor costs elsewhere has made it difficult for companies with domestic manufacturing operations to compete on price. In order to remain competitive, American Roll Form Products President Phil Misch and his team decided to focus on value and find ways to cut costs along the supply chain.
By evaluating assembly drawings, parts and mating components, ARF can identify areas where material can be reduced and assembly costs cut, with potential savings up to 40 percent.
Working with Chamberlain, which sells garage door openers to many top retailers, ARF redesigned a structural bar section that performed better while saving $550,000 a year in materials.
Using prototype facilities to make samples of new sections and perform load tests, ARF designed a part made of new high-strength material that was stronger and 34 percent lighter, yielding an annual freight savings of $120,000.
Chamberlain also cut costs by working with ARF to develop reusable, “green” containers to ship products. The ability to recycle packaging materials reduced packing costs and eliminated disposal expenses.
ARF also has been a leader in innovating products for the solar market, designing piles used in solar panels that have reduced material and freight costs.
To better serve the solar and West Coast markets, ARF opened a 53,200-square-foot manufacturing facility in Las Vegas in the spring of 2013.
Even in today’s price competitive manufacturing environment, value outweighs cost. By embracing creativity and innovation, ARF found a way to create an advantage over its competition. ●
EYE Lighting International
Tom Salpietra, president and COO
(888) 350-7001 | www.eyelighting.com
EYE Lighting International, lead by President and COO Tom Salpietra, lets innovation guide its path to competition in the global marketplace. Realizing an increased demand for energy saving lighting solutions, EYE Lighting developed more energy efficient luminaires and lamps.
The company’s kiaroLED outdoor LED luminaire line of products has been recognized for its efficiency in controlling backlight, uplight and glare. In 2013, EYE Lighting launched its LEDioc brand of LED upgrade lamps, designed to allow for easy retrofit from an HID to LED light source in post-top and pendant luminaires.
To further strengthen its position in the LED market, EYE Lighting acquired all assets related to LED luminaire products from Aphos Lighting in November 2012.
Growth and innovation have led to increased production, including the July 2012 unveiling of a new design and assembly facility in Mentor. The 2,000-square-foot space was specifically designed for LED storage and assembly. The state-of-the-art cell manufacturing room features anti-static floors and fully digital workstations that have adjustable screens, which display interactive assembly instructions and a bill of materials.
EYE Lighting employees are cross-trained to provide flexibility — employees can be moved along different areas of the assembly line as additional support is needed. Employees may work in several parts of the manufacturing process in the same day.
The company supports engineering and business students through scholarships at Lakeland Community College and Cleveland Technical Societies Council. Employees participate in lighting association activities, including those of the Illuminating Engineering Society. ●
Fabrication Group LLC
Patricia B. Setlock, president
(216) 251-1125 | www.fabricationgroup.com
When the recession dried up sources for capital to fund commercial projects, the Fabrication Group went in another direction and developed a noncommercial product line that would provide balance to the seasonal highs and lows of making custom commercial products made of architectural metals.
The company, led by President Patricia B. Setlock, worked with a premise that the new product should be manufactured economically in the United States — due to import difficulties related to cost and size — and be easy to install.
Setlock, a graduate of the Goldman Sachs 10,000 Small Business program in Cleveland, included the launch of the Bright Covers patio line as part of a growth plan developed through the class. Initial processes were outsourced, enabling the Fabrication Group to unveil the new line of products in February 2013.
While the product was being developed, the company’s custom commercial area had rebounded and revenues doubled between 2011 and 2012. The patio cover line and continued growth of custom architectural work led to another doubling of revenue.
This growth period was supported by the company’s ability to improve processes and efficiency through lean manufacturing techniques, an efficient system for inventory management and vendor-financed consignment agreements that eliminated a need for outside capital or loans.
Plans call for two operations to be brought in-house in 2015, which will require additional capital and space. These operations will serve both the commercial and noncommercial lines and bringing them in-house is expected to provide excellent ROI and better quality control. ●