In his book “What the CEO Wants You to Know,” Ram Charan shares the universal laws of business success that it doesn’t matter whether you are selling from a fruit stand or running a Fortune 500 company, the same basic fundamentals dating back to his days working in the family shoe shop in India still hold true.
At Clark-Reliance, we focus on sharing concepts from the book with our employees with the goal of helping our team understand the basic fundamentals that drive business results. Every member of Clark-Reliance becomes a leader when the basic fundamentals of business are promoted and executed.
There are three things to hone in on in any business in order to be successful: cash generation, return on assets and growth. We want our team to understand these important concepts individually and the relationships that exist between them.
Charan tells you right up front ... you don’t need a formal education and it does not matter what size your company is, you still need to think about your company in the simplicity of a street vendor. He stresses the importance of keeping the entrepreneurial spirit that he learned on the streets of India and shares his sage advice:
Cash generation — Cash is generated when the inflow of revenue exceeds the outflow. The cash that goes out applies to salary, taxes and supplier costs. Cash in is generally payment from customers. Cash is the business’s oxygen supply.
If you do not have cash, nothing makes business sense. The underlying goal is to make sure that everyone is involved in the daily thinking of, “How can I generate cash?” Simple things such as getting invoices out on time by assuring mailroom efficiency will help with cash generation.
Return on assets — Return on assets measures how well you are using the capital you have invested in your business. You may use capital to buy equipment, plants, computers, inventory and more. What kind of money is being returned to you through the use of those assets? How fast do raw materials go through a factory and become finished goods and then get sold?
The velocity or speed with which you turn your inventory into sales has a great impact on your return. Within the return on assets calculation lies gross margin: your sales dollars less your costs of producing the product. Watching and evaluating your costs to produce your product gives you valuable clues to your competitiveness and material costs.
Growth — The question you have to ask is, “Are you growing profitably?” How do you continue to encourage growing profitably? The customers are critical to this analysis. You have to make sure that you are going to produce a product that the customer base knows that they can use to reduce their costs and expenses.
You also want to assure that your engineers design the product with the customer’s needs in mind. The customer’s satisfaction with design, performance and price directly affects the basic fundamentals of your own growth, return on investments and cash generation.
This book is a tremendous tool to get everyone in the business to grasp, understand and to drive good results moving forward. The best methodology that we have utilized is to give employees something they can read and go back and answer questions and use examples to implement in our industry. ●
Matthew P. Figgie is chairman of Clark-Reliance, a global, multi-divisional manufacturing company with sales in more than 80 countries, serving the power generation petroleum, refining and chemical processing industries. He is also chairman of Figgie Capital and the Figgie Foundation.
Rick Solon is president and CEO of Clark-Reliance and has more than 35 years of experience in manufacturing and operating companies.
To learn more about Clark Reliance, like its Facebook page www.facebook.com/clarkreliance
Connect with Clark Reliance on LinkedIn www.linkedin.com/company/clark-reliance-corporation
Small and middle-market companies aspiring to land national accounts may have advantages over larger competitors by offering more flexibility, greater efficiencies, better service and faster turnaround.
But often that’s not enough to win the business of the biggest and best brands, and the benefits that smaller organizations bring to the negotiation can be offset by downsides such as lack of buying power, fewer resources and limited national and international licenses.
Benefits of client profit sharing
One breakthrough strategy for attracting and retaining major clients is to share profits with them. Client profit sharing can do the following:
■ Turn a customer into a partner with common goals.
■ Increase client engagement and loyalty.
■ Lower the cost of doing business.
■ Increase revenue and net income.
■ Drive information sharing and entry into new markets.
■ Spur innovation and developing new products.
■ Bring products and services to market quicker.
■ Grow referrals to potential clients.
There are several critical factors for analyzing client profit sharing viability.
First, the supplier should assess the opportunity not just from its own position of strength and financial interest, but also from the combined competitive advantages that both companies bring to the market. The assumption of profit should, however, be backed by mutual due diligence.
At the same time, there should be adequate margin in the individual profit to insulate the supplier from breaking even or losing money in the case of unanticipated cost increases. The shared profit model should also be competitive overall with the supplier’s lower-volume business, so the incentive to fulfill orders or provide services is equal.
The price of the product or service for which profit is being shared should be set at fair market value. The price shouldn’t be raised just to retain the supplier’s usual margin before the split at the potential expense of losing business to overpricing.
Forging a custom contract
Another benefit to profit sharing is forging a custom contract that safeguards the supplier and client in a way that typical agreements usually don’t. By detailing specific rules of engagement that include regulatory compliance, the interests of both partners are best represented and protected, and the doors to opportunity open wider.
Ongoing evaluation is essential to stakeholder satisfaction. Profit sharing agreements usually renew annually, but continuous appraisal is vital to optimum performance. Uphold deliverables and discuss modifications that can improve outcomes. Likewise, monitor the commitments of your partner to ensure equity and goal achievement. It takes two to make it work, but only one to break it.
Whether you’re a service company or manufacturer, prospects for creative client partnering abound. When two businesses merge their unique competencies, the synergies can result in mutual benefits well beyond a one-way transaction. Reciprocity is the key to endurance.
If you’re a small or midsize enterprise looking to push through the barriers for doing business with national firms, proposing profit sharing could be the attention-grabber that gets you in the door. Even if the concept doesn’t materialize, the points you get for trying may be high enough to turn the heads of decision-makers.
If nothing else, it shows potential or current client that your company is innovative, nimble and genuine about being more than a supplier. With a business commitment of any type, these are the ideologies of a lasting, productive relationship.
Eric Lofquist is co-owner, president and CEO of Magnus International Group Inc., an award-winning sustainable global products company. He is a regional and national EY Entrepreneur Of The Year™ whose business has ranked No. 1 on the Weatherhead 100. Contact him at (216) 592-8355, ext. 223 or firstname.lastname@example.org. For more information, visit www.magnusig.com.
Connect with Eric Lofquist on LinkedIn www.linkedin.com/in/ericlofquist
Cle clm 0314 chuck fowler “Resource-ful”
To learn more about Fairmount Minerals, like its Facebook page http://on.fb.me/1iDeVLC and follow on Twitter @FM_Sand.
ART: 134777189 ; 123262324 ; 157149536 ; 109907015
Sustainable development pays
At Fairmount Minerals, one of North America’s largest producers of industrial sand and resin-coated products, we believe that an investment in sustainable development — our people, our environment and the communities where we operate — is an investment in our organization. Daily the Fairmount Family brings to life our motto of “Do Good. Do Well.” by embracing sustainability.
In 2010, we began calculating the impact of our Sustainable Development program as a result of cost savings or cost avoidance and termed it, “SD Pays.” This program encompasses both tangible and intangible value as determined by each of our 13 sustainable development teams. Tangible value is calculated on a monthly basis with the goal of an annual dollar summary. For projects that span multiple years for implementation and where the scope remains the same, savings are credited and applied to each year.
Savings outpace expenses
In our first year, we spent less than $5.8 million on the program, but recorded more than $11 million in savings. This included one of our most successful ongoing projects for the Sustainable Value Chain team. The project entails switching from cardboard box packaging to a reusable and recyclable bulk bag. It saves us more than $650,000 annually and hundreds of thousands of pounds of packaging avoid the landfill.
Some areas we consider include material cost reduction, reduction of resources and increased operations efficiency. Intangible value is also important to meeting our people, planet and prosperity goals. Documentation takes the form of qualitative stories and anecdotal evidence. Examples include such things as social license to operate, talent attraction and retention, improved community relations and improved employee work/life balance.
Annually, we measure and manage how much the program “pays” as well as how much the program costs. The costs include items such as sustainable development team expenses, department expenses and community investment spending.
Another successful project resulting in SD Pays comes from the Sustainable Mobility team. Its goal is to maximize tonnage loaded in railcars, utilize barging when applicable and capitalize on Fairmount’s logistical and distribution network by shipping via unit train when applicable. In 2013, savings for this team totaled more than $8.6 million from a reduction in fuel consumption, which also results in a reduction in carbon emissions.
Carbon footprint improvements
Finally, the last project we would like to highlight comes from the Quest for Eco-Efficiency team. Fairmount Minerals is focused on ways in which we can improve our carbon footprint, and one of the ways we have identified is through increasing our use of renewable energy.
Building upon our successful solar array project at our Best Sand facility in Chardon, we again partnered with Bold Alternatives, an alternative energy firm, to install a solar array at our Menomonie, Wisc., facility in 2011. The array currently supplies 1 percent of the facility’s total energy draw, as well as completely offsets the energy usage for the office building.
While this may not seem like a significant contribution to our energy needs or SD Pays, we anticipate a three- to four-year payback on the project, which will allow us to continue to invest in alternative energy opportunities. In addition, the solar array represents an important intangible SD Pays. As part of the installation, we hosted students and the community as an educational tool so they could observe and participate in the process. This project illustrated our “Do Good. Do Well.” motto in action.
While we calculate the ways in which “sustainable development pays” to help quantify the value of our efforts for the Fairmount Family, our investors and other stakeholders, we also do so with the hope of inspiring other companies — helping them to see that sustainability supports economic value creation. We can definitely say, without any question, that SD Pays. ●
Chuck Fowler is the retired CEO of Fairmount Minerals. He is a longtime proponent of sustainable business practices and actively encourages environmental, social and economic responsibility. For more information, visit www.fairmountminerals.com.
Northern Ohio is known the world over as a major hub for medical innovation. From the cutting-edge research, clinical trials and promising breakthrough treatments developed at our hospitals, to the new Global Center for Healthcare Innovation, our region continues to play an instrumental role in shaping the future of health care.
Lesser known, but just as important, is our region’s contribution to the development and advancement of end-of-life care.
Hospice movement sprouted here
Hospice and palliative care is a philosophy that includes pain management and symptom control for the patient and emotional and spiritual support for the patient and family. It has become an important part of the health care continuum — and the seeds of the hospice movement in the United States were sown and nurtured right here.
Hospice of the Western Reserve was founded in Lake County in 1978, known as Cancer Family Services at that time. Today, the community-based agency has grown into one of the nations largest and most respected nonprofit hospice providers, with 900 employees and 2,000 trained volunteers. The agency is headquartered in Cleveland, and serves a nine-county area.
We care for people of all ages, with any serious illness, and we have extensive expertise in the areas of cancer, heart disease, COPD, HIV/AIDS, dementia, chronic kidney disease and pediatric end-of-life care. Hospice of the Western Reserve believes that quality will be the strategic differentiator between hospices, and the most important tool for patients and families to choose a hospice program.
For this reason, Hospice of the Western Reserve strongly advocates for a single database of quality scores for hospices across the country, and we are committed to providing absolutely unsurpassed quality care at end of life in our community.
How can hospice care help you and your employees?
■ It can reduce the overall cost of health care.
■ Many of your employees are caregivers for their own aging parents or grandparents, placing an added burden on their health and productivity. Hospice supports the caregivers as well as the patient, giving them peace of mind and respite.
■ Hospice can provide bereavement and workplace grief support.
Myths persist, but hospice is not about giving up. In fact, it’s all about living life as fully as possible when time is measured in weeks or months, rather than days. Palliative care helps people who are in the midst of life-prolonging and curative treatments to manage the pain and symptoms of complex illnesses.
Hospice ensures life at the end of life. It recognizes death as a natural process and focuses on a holistic approach in providing care and services. The physical, emotional, spiritual and psychological aspects of each individual are addressed, placing a special emphasis on symptom control.
As a leading advocate for dignity and choice at the end-of-life, hospice and palliative care will continue to grow in importance as the population continues to age. More than 1.5 million patients are currently receiving hospice care in the U.S.
Sometimes, as a disease progresses, curative measures are no longer available or effective. Hospice care can change how a person approaches the rest of his or her life. The focus becomes different. Hospice is about giving individuals choices, comfort and dignity in the final stage of life. It needs to be considered an integral part of the health care continuum. ●
William E. Finn is CEO of Hospice of the Western Reserve and has served in that role since February 2011. He has been in the field of hospice and palliative care for 28 years. For information, visit www.hospicewr.org.
There’s no question that a fair amount of confusion exists about the Affordable Care Act — including the lack of clarity about the differences between private insurance exchanges and public exchanges.
Beginning now, individuals are, as a result of the ACA, required to either obtain health insurance or face penalties. Most people are covered by employer-sponsored medical plans, but many are not covered and have even previously been deemed uninsurable. Not any more.
Examining the public exchanges
The ACA’s public exchanges were intended to help make insurance more affordable and enable the uninsured to be covered regardless of existing health conditions.
The health plans offered on these public exchanges are labeled platinum, gold, silver and bronze, reflecting the levels of coverage and the cost to consumers. All these plans offer the same core benefits, or minimum benefit sets, and are offered by insurance companies through the public exchange mechanism.
The public exchanges offer only major medical coverage to participants and as a result, voluntary benefits such as vision or dental must be sought elsewhere. Fourteen states have set up their own, state-run public exchanges, and 36 states have chosen to rely on the exchange established by the U.S. Department of Health and Human Services.
Thus far, consumers have had varying experiences in the public exchange marketplaces, state or federal, including reporting delays and glitches on a widespread basis.
Understanding private marketplaces
Private exchanges or marketplaces are different. They are open to consumers, whether individuals, employers or groups of affiliates. Private marketplaces make it possible to get information, examine alternatives, decide which plans are best and manage the process directly without any delays or bureaucratic interference.
Private marketplaces have particular appeal to employers who are striving to manage the costs of offering health benefits, while providing an exceptional experience to employees.
Employers can give employees a set amount of money, directing them to a private exchange, or they can utilize the more traditional defined benefit plan.
Enrollees also will be eligible for an array of voluntary benefits such as dental, life and various forms of gap coverage to bridge the difference between the deductible amount and out-of-pocket expenses.
Private insurance exchanges make it easier for the participant to take charge of health and benefit programs.
Consider the Ohio Benefits Marketplace
With this in mind, the Ohio Chamber of Commerce, in partnership with CieloStar, has established a private health care marketplace available to Ohio employers called the Ohio Chamber Benefits Marketplace, www.ohiochamberbenefits.com.
This marketplace website provides an easy and cost-effective way to shop for health care benefits. Whether you are a company of one or 1,000, we have various benefit options that can be tailored to the needs of your employees.
In addition to major medical plans, the Ohio Chamber Member Benefits Marketplace also provides a comprehensive suite of ancillary health benefits such as dental, vision, life and other insurance options. Through the website, employees can craft a package of health care benefits that fits their needs, not someone else’s.
And most importantly, shopping for health care benefits on our website is easy. In just five steps, companies can be on their way to offering competitive employee benefits at an affordable price. ●
Beau Euton is vice president of membership at the Ohio Chamber of Commerce. To contact the Ohio Chamber, call (614) 228-4201 or visit www.ohiochamber.com.
William Mehus is the executive chairman of CieloStar. CieloStar and CieloChoice are trademarks of OutsourceOne Inc., a Minnesota-based corporation. For more information, visit www.ohiochamberbenefits.com.
Outcomes, not inputs / Thomas F. Zenty III leads University Hospitals toward a new model for health care deliveryWritten by Dennis Seeds
It was 11 years ago this month that Thomas F. Zenty III took over as CEO of University Hospitals. Since then, he’s stemmed the bleeding from a row of financial losses and turned the operation around. While he’s quite proud of that achievement — for his team and himself — it’s not the only accomplishment that makes him beam with pride.
It has to do with people.
“From a leadership standpoint, one of the things I am proudest of is that many of the people who preceded me are still here today,” he says. “So many times you come into an organization, and there has to be wholesale, massive management changes. We didn’t do that here. In fact, virtually everyone who was here prior to my arrival is still here today.
“I didn’t think we really needed to focus on that, and I think history proves us right.”
But that’s not to say the health care industry hasn’t — and isn’t — going through major changes.
“We are going through some major transformational changes, but the work that we do hasn’t really changed: our focus on the patients, our mission, all the things that we need to do to make certain that people receive world-class care in our industry and in our organization.”
Just as the assembly line changed the automotive industry forever, the health care industry is at a crossroads. Change, in fact, may well be the health care industry’s middle name.
Zenty doesn’t fear change. He racked up experience prior to arriving at UH with leadership roles at health systems in California, Arizona, New Jersey and Connecticut.
While some CEOs can’t deal with the pain change brings, the reluctance to “get with the program” is often fueled by fear of the unknown. It’s the product of well-established habits and it’s a conviction that things will get back to old familiar ways — that the CEO will be seen as a sagacious knight in shining armor.
Ready to break those concepts, Zenty felt confident that the health care being delivered at University Hospitals was not the problem. Coming in the door he knew there were four things that he needed to identify as major areas to concentrate on. Not surprisingly, change had to occur in each area — quality, efficiency, transparency and focus.
“There were a lot of business elements that had to be addressed, but the mission, the vision and the clinical capabilities that we had were second to none,” Zenty says.
Here’s a look at how Zenty leads his team to be unthreatened by change at the $2.3 billion health system with more than 24,000 employees and physicians.
Assess who is delivering the quality
Getting a clear picture of any problem is the first step in finding out what changes need to be made.
The analysis doesn’t need a lengthy study, and while all CEOs obviously don’t have the same executive microscope to examine personnel, there are some universal techniques to use.
“I think there is a fair amount of instinct that goes along with leadership style, and whether or not there is a fit, both with the organization and with how leaders really should comport themselves,” Zenty says. “I look for content; I want to make sure people are content rich. I found a lot of very, very intellectually gifted people with a strong understanding of the industry — people very committed to the organization, and that was abundantly clear all along.”
The workforce assessment took Zenty 30 days, during which he had in-depth meetings with all the senior staff. He adopted the concept that UH needed to make certain its business acumen matched its clinical acumen and could deliver the quality for which it was known.
“We have an extraordinary team of people; we have an extraordinary organization in terms of our commitment to the communities that we serve.
“I knew we had the right people,” he says. “But it wasn’t so certain that we were properly cast in our roles.
“There will always be fabulous physicians, and outstanding nurses and other clinicians and caregivers. What we are really going to have to reorder is the way that we think about how we take care of patients.”
Zenty and his team began to draw up a comprehensive plan to address these and other issues.
Take quality and efficiency measures
The words quality and efficiency often appear in the same sentence when describing how to align people and systems to deliver a continuous stream of value to the customer and eliminate waste and inefficiencies at the same time. Sometimes that means transformational change.
The health care industry in general is undergoing such a change, away from a volume to a value equation, Zenty says. That viewpoint has been growing in acceptance, and UH in 2005 decided to launch a five-year plan called Vision 2010, made up of multiple components to affect the necessary changes.
“It’s no longer being paid for each thing that we do, but rather being rewarded for outcomes — not just for inputs,” Zenty says.
“Vision 2010 included a focus on quality; it included some new buildings, service-offering sites,” he says. “We now have about 21 ambulatory sites and a number of hospitals, depending upon how you count them. We have a broad distributed network now of physicians in an eight-county region. We have great relationships with about 2,000 private practice doctors, and on the main campus, we have about 900 faculty members.”
What it all translates to is that UH started with one concept of Vision 2010 as a major institutional construction project, but it resulted in having a whole new way of doing business.
“We thought, ‘What are the components that go along with making Vision 2010 a true, community-based project?’” Zenty says. “How are we going to engage community members as part of our overall decision-making process and engage them in meaningful ways that they have not been engaged before?”
To accomplish its Vision 2010 goals to make the local region economically better while growing the UH footprint, the organization turned to its commitment to community responsibility.
“Not only did we create Vision 2010 for the needs of the communities that we serve, but during the course of it, we focused on things like the quality of care that we provide,” Zenty says. “Quality was our No. 1 priority, like investing in the communities by doing a project labor agreement, evidenced by our commitment to local spend, female business spend, minority business spend — we set these goals out early in the process of Vision 2010, and we set them without the need to do so.
“At the time, they were sort of ceiling goals but now they are foundation goals. In addition, if you look at what we did with our project labor agreement, that has now become the foundation for other major projects that have taken place in Northeast Ohio.”
As a result, the community as a whole has become the most important stakeholder.
“Vision 2010 was a point-in-time issue, meaning that we knew we had to position our organization with a broader footprint, bigger geography, with several areas of focus. And we created our strategy. You stay with the four themes — quality, efficiency, transparency and focus — and we were rather relentless on how we approached what we needed to do in those regards,” Zenty says.
“Vision 2010 was the product of so many people that nothing pleases me more than when everyone took credit for making it happen. And that to me is what leadership is all about. It’s about shared ownership, shared responsibility, shared accomplishment — and shared recognition.”
No matter what kind of entity you manage, an integral component of your brand is trust. One of the most effective ways to build that trust is often through transparency. This is especially the case when your organization is facing a crossroads.
For UH, it realized some time ago that the hospital industry, in terms of the laws of supply and demand, was moving from an environment of supply-induced demand to demand-induced supply.
“These are the same words, rejiggered, but fundamentally changing the way we as an industry need to think about this,” Zenty says. “We have 5,500 hospitals in the United States all having to rethink how we are going to be delivering the best quality care we can in the future.”
This creates a priority in matters such as pricing. It is more important than ever for patients to be able to compare the cost of medical treatments.
“Transparency — transparency around co-pays, transparencies around deductibles, transparency around expected outcomes — things that we have all been focused upon here for the past seven or eight years will be expected and frankly demanded by the consumers,” he says.
Among those demands is the rate of “product recalls” — or in the health care industry, rates of readmission.
“At University Hospitals, we don’t have a problem with readmission rates because we do well in this particular category,” Zenty says.
“For example, we had a fairly large population of sickle cell anemia patients with high rates of readmission. We found ways to focus on activities that ameliorate that need to be readmitted; instead, being taken care of either in an ambulatory environment or better, at home.
“It’s like the old management dictum: What gets measured gets managed.”
Hospitals are all examining readmission rates as an industry in far more detail than before.
“We are finding many solutions to problems that have a relatively straightforward solution that we didn’t think about before because we automatically got paid for readmissions. But that is no longer the case.
“So when we think about the financial benefits where detriments that go along with health care today, things like wrong site surgeries, high readmission rates — we need to be focused on what we are doing with patients and their families as an industry, not what we are doing to patients and their families,” Zenty says. “We need to make sure that we are taking care of the entire needs of patients.”
Getting — and staying in — focus
If your goal is to deliver quality efficiently and transparently, many businesses find the fundamental solution is to become a values-driven organization.
“Values-driven leadership teams have enormous leverage opportunities that we need to make certain we continue to focus on in the future,” Zenty says. “For example, when we put Vision 2010 together, that wasn’t one person’s thought process. The idea of having a single individual who has all the right answers is an outmoded paradigm.”
UH espouses the values of excellence, diversity, integrity, compassion and teamwork.
“In each of those, we have shown extraordinary progress,” he says, noting the many awards the health system has achieved for excellence, a diverse workforce, ethical operation, compassionate care and teamwork at every level.
“When you are a values-driven organization, and you measure your performance in the values of quality, efficiency, transparency and focus, it makes an enormous difference in your success,” he says.
Strategic planning meetings on a regular basis can keep the organization on track.
“We have quarterly strategic planning meetings where we talk through what we think is going to be happening in health care in whatever defined period of time that we select,” Zenty says. “So for example, our strategic plan is a three-to-five year view. Then we create annual operating plans in which each of our entities has annual operating performance goals required.
“We involve a lot of people in our strategic planning process. It is very iterative. We do it internally; we don’t have outside experts who are preparing our strategic plan for us. We do it all through our strategic planning office.
“What matters is having an engaged group of people who are all pulling in the same direction. These are mission-driven people who believe in the organization that they work for — people who believe in what we are and what we do.” ●
How to reach: University Hospitals, (216) 844-8447 or www.uhhospitals.org
Find out who can deliver quality.
Make transparency a priority.
Teams with a sharp focus will contribute to the success of the entire organization.
The Zenty File
Name: Thomas F. Zenty III
Organization: University Hospitals
Birthplace: Jermyn, Pa., “The Birthplace of First Aid in America.” I mean you’ve got to be known for something.
Education: Bachelor of science in health planning and administration from Pennsylvania State University, a master’s degree in public administration from New York University, master’s degree in health administration from Xavier University and an honorary doctorate of laws degree.
What was your first job and what did you learn from it?
I was a farmhand at the age of 14 on a dairy farm. You milked the cows twice a day whether you wanted to or not. But you learn a lot when you work in an environment like that. You learn about responsibility, you learn about commitment, you learn to be self-sufficient. You learn that you have to work your way out of problems because there aren't many people around to ask for help. And you learn that you have to be very thoughtful about everything that you do in an environment like that because it is hazardous — it's hard work. You also learn to figure out how to fix things, do things that you might not otherwise do. You grow up quickly. I was driving a truck when I was 14 years old, a tractor, and all those things. It forces you to become self-sufficient and to be your own mechanic. There was always something breaking on the farm, whether it was a baling machine, conveyor belts, milking machines, whatever it was. It was a good education.
Who do you admire in business?
Two books that I read rather consistently transcend business, and they are focused more on leadership. One is called “The Art of War” by Sun Tzu, and it was written around 500 B.C. The other is “The Prince” by Machiavelli. I read each of those books from time to time to transcend the issue of business, but really, I read for the great discussions about leadership. So for example, one of Sun Tzu’s famous quotes is, “Imagine what I could do if I could do all that I can.” That's very impressive when you think about it. He talks about the importance of taking care of people. He talks about when to advance and when not to advance, about the circumstance under which you make decisions and about the importance of business intelligence. “The Prince,” of course, was written in a different time and place, but nonetheless there are always some interesting lessons to be learned from reading it. In terms of business, Peter Drucker probably would be the singular person I would note because he is the father of modern American business, but I have admiration for so many other people as well who are successful in the business world.
What is the best business advice you ever received?
My first mentor was someone in whom I had great admiration. This was right after I came out of graduate school. Her point was basically something that Sun Tzu said: “Strategy without tactics is the slowest route to victory. And tactics without strategy is the noise before defeat.” In effect, that is what she said to me. She said focus on the strategy, but don't lose sight of the tactics. Be strategic in everything you do, but don't overlook the details. That to me was terrific business advice. She also said to surround yourself with the best people that you can find, it’s the only way you are going to leverage yourself to success.
What is your definition of business success?
Success in business to me arises when you are able to accomplish your mission and accomplish your vision in a values-driven environment in which people matter most. That's my simplest definition. The good news is that our mission statement is very easy to remember and repeat: “To heal, to teach and to discover.” We work on this every day, and that's why our values are so important to us.
University Hospitals – A decade of accomplishments
Beginning in 2003, under the leadership of new CEO Thomas F. Zenty III, University Hospitals dramatically improved its financial health and set upon a journey to expand its heath care offerings.
2004: UH experiences its first operational profit in more than a decade, due to a solid strategic plan, cost management initiatives and the closure or divestiture of unprofitable business lines and facilities — an important milestone that UH is now building upon as the system continues to strengthen its financial position.
2005: UH launches Vision 2010, a five-year $1.2 billion strategic plan, which includes building a freestanding 120-bed cancer hospital, UH Seidman Cancer Center; Center for Emergency Medicine and Marcy R. Horvitz Pediatric Emergency Center at UH Case Medical Center; and Quentin & Elisabeth Alexander Neonatal Intensive Care Unit at UH Rainbow Babies & Children’s Hospital. The strategic plan also includes building UH Ahuja Medical Center, a 144-bed hospital and outpatient medical building in Beachwood, and several outpatient health centers throughout Northeast Ohio.
2006: The University Hospitals Health System name is shortened to University Hospitals as part of a broad strategy to build a strong UH brand. As part of this process, University Hospitals of Cleveland becomes University Hospitals Case Medical Center, reflecting the primary affiliation with Case Western Reserve University School of Medicine. The new UH name and bold red logo were designed to clearly and consistently communicate the system’s identity to patients, families and the communities UH serves. The logo reflects the UH brand promise of patient-centered care.
December 2006: UH announces a $30 million gift from Monte and Usha Ahuja and family; in honor of the gift, UH names the proposed UH Ahuja Medical Center in their honor.
January 2008: The City of Cleveland, UH and the Cleveland Building & Construction Trades Council announces the signing of an historic project labor agreement for UH’s Vision 2010 construction projects. UH is awarded the Economic Impact Award from the Cleveland Commission on Economic Inclusion in recognition of the groundbreaking project labor agreement.
Summer 2008: UH receives one of the largest financial gifts in its history — $22.6 million — to establish the UH Harrington Heart & Vascular Institute. The donation, believed to be among the largest in the country given to a cardiovascular institute, is unique in that it is earmarked for development of innovative technologies and clinical advancements for the early diagnosis and prevention of heart disease.
Spring 2009: The Quentin & Elisabeth Alexander Neonatal Intensive Care Unit opens.
June 2010: Case Western Reserve University and UH Case Medical Center establish the Philips Healthcare Global Advanced Imaging Innovation Center in partnership with Philips Healthcare. Through the nearly $40 million center, which has established Cleveland as a worldwide hub for imaging equipment, the latest Philips Healthcare imaging equipment is brought to UH Case Medical Center for development, validation of clinical efficacy and product release.
2010: UH launches its first Accountable Care Organization. The UH ACO service line continues to grow and now includes three ACOs with more than 170,000 self-insured, commercially insured, Medicare and Medicaid members and beneficiaries in addition to UH employees and their dependents. UH’s ACO is among the nation’s largest, and one of the few providing coordinated care, disease management and case-management services to all populations, from infants to senior citizens.
November 2010: UH announces the launch of Discover the Difference: The Campaign for University Hospitals, with a goal of $1 billion. The campaign’s public phase is launched with the announcement of a $42 million gift from Jane and Lee Seidman. In honor of the gift, UH renamed the Ireland Cancer Center to UH Seidman Cancer Center.
2011: UH completes Vision 2010, which had more than $750 million in construction projects. Openings that year include UH Ahuja Medical Center, UH Seidman Cancer Center and Center for Emergency Medicine.
February 2012: The Harrington Discovery Institute at UH Case Medical Center is launched as part of a $250 million national model to accelerate the development of medical breakthroughs by physician-scientists into medicines that benefit patients. Included in the model is the independent Cleveland-based development company BioMotiv. The Harrington Discovery Institute is supported by a $50 million gift to UH — the largest donation in the health system’s history — from the Harrington family, recognized entrepreneurs and philanthropists in Cleveland.
July 2012: UH Case Medical Center receives the American Hospital Association-McKesson Quest for Quality Prize as the nation’s top hospital for leadership and innovation in quality improvement and patient safety.
December 2012: UH achieves its ambitious Discover the Difference campaign goal of $1 billion. This extraordinary result was made possible through the generosity of esteemed benefactor Rainbow Babies & Children’s Foundation, which committed $32.5 million in support of the campaign. As a result, the health system expands the fundraising campaign to $1.5 billion — the largest campaign in the history of Northeast Ohio and one of two major health systems in the nation engaged in a campaign of this magnitude. The campaign has drawn gifts from more than 65,000 donors.
March 2013: UH opens the UH Rehabilitation Hospital, a joint venture with Centerre Healthcare. The UH Rehabilitation Hospital is a state-of-the-art freestanding acute inpatient rehabilitation hospital in Beachwood.
April 2013: UH was ranked No. 1 on the Hospital Systems Specialty List of the 2013 DiversityInc “Top 50 Companies for Diversity.”
July 2013: UH Case Medical Center is named one of only 18 hospitals on the U.S. News & World Report prestigious Honor Roll of America’s finest hospitals, and ranks among the nation’s 50 best in all 12 methodology-ranked specialties.
Fall 2013: UH announces record investment in Community Benefit programs totaling $273 million in 2012, up more than $100 million since 2007. This significant contribution represents 12.41 percent of the health system’s total operating expenses in 2012, which is above the national average of 8.4 percent, according to the most recent data (2009) published by the American Hospital Association.
December 2013 -- Parma Community General Hospital and EMH Healthcare of Elyria join the UH health system.
January 2014: UH announces letter of intent with Robinson Memorial Hospital of Ravenna.
Vision 2010 projects
Quentin & Elisabeth Alexander Neonatal Intensive Care Unit
University Hospitals Rainbow Babies & Children’s Hospital
11100 Euclid Ave., Cleveland
Opened spring 2009
Center for Emergency Medicine
UH Case Medical Center
11100 Euclid Ave., Cleveland
Opened July 2011
Landscaping (includes Schneider Healing Garden and 1.5 acre urban park along Euclid Avenue) $7 million — opened July 2011
UH Seidman Cancer Center
UH Case Medical Center
11100 Euclid Ave., Cleveland
Opened June 2011
Breen Breast Health Pavilion
UH Case Medical Center
11100 Euclid Ave., Cleveland
Opened June 2011
UH Ahuja Medical Center
3999 Richmond Road, Beachwood
Opened March 2011
Visitor parking garage
UH Case Medical Center
11100 Euclid Ave., Cleveland
Opened fall 2010
UH Medina Health Center
Opened spring 2010
UH Sharon Health Center
5133 Ridge Road, Wadsworth
Opened spring 2010
UH Concord Health Center
7500 Auburn Road, Concord Township
Opened July 2009
UH Geneva Health Center
870 West Main St., Geneva
Opened November 2008
UH Twinsburg Health Center
8819 Commons Blvd., Twinsburg
$18 million (plus $2.4 million new ED opened spring 2011)
Opened fall 2007
It can be more than a full-time job to keep up with technology as it evolves, and smaller and midsize entities that tend not to have dedicated technology staff can face even more acute challenges.
So many changes occur, it’s hard to know what’s available, says Paul Karlin, M. Ed., director of Education Technology & Services at Blue Technologies Smart Solutions. Also, you must train staff and invest in maintenance to keep technology from sitting around unused or broken.
At the same time, organizations need to continually budget for change.
“They’ll say, ‘OK, we’re done. We’ve got a great network and computers,’” Karlin says. “They don’t realize that it’s going to be three, four or five years, and then they have to do it all over again. It’s an ongoing need that has to be budgeted for every year.”
Smart Business spoke with Karlin, who helps schools integrate technology into classrooms and buildings, about how all entities can stay on top of technology needs.
How are schools and classrooms using technology today?
Schools like any organization use technology to conduct business — from keeping track of attendance and grades to payroll, accounts receivable, marketing and communication. And like the corporate world, the right technology maximizes efficiency and employee productivity, while reducing costs.
In addition, whether your classroom is in the educational world or corporate America, technology can improve learning. It’s a vehicle for direct instruction, such as Internet research, educational software or apps. Another use is assessment. In schools, based upon Common Core Standards, groups of states are adopting national tests given on computers, driving schools to update bandwidth.
Technology also is used as a tool to solve problems, create things and be more productive. This higher-level learning, when educating students or employees, isn’t just reading material and taking a test. For example, when learning about global warming, a science teacher challenges students to come up with energy-saving devices, using computer modeling and 3-D printers to develop prototypes. It goes beyond comprehension to becoming part of the dialog of how to make the world better.
What do you recommend as the way to best keep up with technology changes?
There are two overarching strategies. Entities can invest in their own technology staff. If they are large enough and have the resources, it’s a good way to go. But the technology field is very competitive, with IT people moving from job to job. If your key tech person puts in his or her two-week notice, it can leave you scrambling.
The other strategy is to build technology partnerships. Your technology partner can use proven business practices, which in IT includes monitoring, providing a help desk, having disaster recovery, ticketing systems to track problems, etc. You don’t have to worry about retention, and there’s no knowledge gap. You’ll get regular updates on what’s working, what’s not and what’s coming to help inform your decision-making.
Technology partners usually don’t just consult; they deliver products, and provide equipment, services and training. Their middle name has to be accountability, because if they don’t get it done, they aren’t going to be around anymore.
How can organizations prioritize updates or new technology?
The latest technology fad shouldn’t drive updates. For example, organizations are implementing one-to-one computing, where there’s a computer for every person. But if that takes too much attention away from instructors in an educational setting, it may not be a good fit. First, understand organizational goals and needs, and then match those to updates or new technologies.
Consider how to improve efficiency and reduce costs. You may save money by introducing a new technology like server virtualization — five servers function as 20, via software, to reduce support and energy costs. Also, determine if introducing a software package or process will save time or allow staff to focus on their core roles.
Whether it’s technology change or any other change, don’t jump on the bandwagon. Start with the need, problem and/or goal before you come up with solutions. Technology is not going to fix everything; it’s just a piece of the answer. ●
Insights Technology is brought to you by Blue Technologies
Q: The U.S. economic expansion appears to be continuing at a moderate pace into 2014. Are you surprised?
A: Not at all. We switched from negative to positive on the economy back in the Spring of 2009 and have not wavered since then. The key to our confidence has been the message from our proprietary Recession Signals Checklist (the RSC).
Q: That doesn’t sound like the name of a “quantitative econometric model”!
A: That’s correct – however, each factor on the RSC does have a quantifiable level that causes it to toggle on/off. We tested dozens of economic data series and chose 10 that represent major economic sectors and interest rates. Our “back-test” period for the RSC covered 1980-2006, which included recessions in 1980, 1982, 1991 and 2001. In each of those instances, 9 or 10 of the RSC data series reached the quantified levels that signaled a high risk of recession. Equally importantly, we did not want “false positives” every time the economy slowed significantly, so we focused on the 1985 and 1995 mid-cycle slowdowns when many economists feared a recession was imminent. No more than 3 signals toggled on in those instances.
Q: How has it worked in real time since then?
A: To paraphrase the golf adage, “Back-tests are for show, but real-time is for dough!” Thus far, the RSC has been very helpful to us as it strongly signaled recession as the Great Recession developed in 2008. Per the title of this interview, many economists were surprised when the economy avoided falling into a double-dip recession in 2010, 2011 and again in 2012. The RSC held at 2 or 3 signals most of that stretch, but hit a rather nerve-wracking 4 of 10 in 2011. Overall, these low RSC readings gave us confidence in the economic expansion. While it’s nice to make accurate forecasts, the payoff was the support the forecast gave to our bullish investment strategies.
Q: What is the RSC telling you now?
A: Currently, NO signals are toggled on which supports our sanguine economic outlook for 2014.
Q: Are there additional factors that encourage optimism on the economy?
A: Absolutely. We see several factors that could lead to better growth, including: 1) reduced drag from Government spending cuts (state & local spending is already growing and the year/year impact of Federal sequester spending cuts has dropped), 2) an improving global economy helps export demand (Europe and Japan are coming out of recessions and emerging economies continue to outgrow developed), 3) low U.S. energy costs (fracking means North American natural gas costs are fractions of global levels), 4) consumers and businesses alike will benefit from improved balance sheets and renewed credit growth, 5) steady jobs growth (finally, a new high in jobs in 2014) will help consumer confidence and incomes, and 6) the U.S. “manufacturing renaissance” .
Q: That last factor sounds meaningful for our region –can you elaborate on it?
A: The era of “offshoring” of production seems to be reversing into re-shoring as the U.S. holds its position as the #1 or #2 country in the world in terms of manufacturing output. Shifting dynamics of global labor markets are playing a role in this, as is the advantage of lower domestic energy costs, but technology is a huge factor. Digitization and robotics have played a significant role in the massive productivity edge U.S. manufacturers hold over emerging market competitors. That advantage is a two-edged sword in terms of jobs in our region, as the automation-related jobs pay better. However, they require more education and technical training and are less numerous than the repetitive tasks of days gone by.
So to conclude, we have not been surprised by the growth of the U.S. economy and we remain optimistic that the pace of GDP growth is finally escaping the “terrible twos” and headed toward the more “pleasant threes!”
Disclosure: This message does not constitute individual investment, legal or tax advice. All opinions are reflective of judgments made on the original date of publication and do not constitute a guarantee of present or future financial market conditions.
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