The current economic conditions can be scary, but several changes have been made in the banking arena to provide a safety net to business owners and consumers worried about their finances. The Emergency Economic Stabilization Act, passed in October, temporarily increased the basic amount of Federal Deposit Insurance Corporation insurance for checking, savings, CDs, negotiable order of withdrawal accounts and self-directed retirement accounts, while an additional increase for noninterest bearing transactions was made two weeks later.
“A lot of people can be hurt in times like this when they make irrational decisions,” says Jim Paul, senior vice president of retail administration at Fifth Third Bank. “And understandably so when it’s a dynamic market like it is, people do react. Get all the facts and information before you make any decisions around your finances.”
Smart Business spoke with Paul about how to sift through these changes, how to educate employees and customers on these changes, and how to prepare for changes in the future.
What are some of the major changes made to FDIC, and why were they made?
The FDIC extended the insurance on its accounts temporarily from $100,000 per depositor per bank to $250,000. Those cover checking accounts, savings, CDs and self-directed IRA accounts that people would deposit within an institution.
The second one is an additional increase that gives noninterest accounts, checking accounts, unlimited insurance. The FDIC did extend that through Dec. 31, 2009, where at that point it will evaluate the state of the market and where things are. Those two changes were important at the time because of what was happening in the financial market. There were a couple of failures — the IndyMac failure was one of the larger ones, and that’s where things started to unravel a bit. This helps to create more consumer confidence, because the last thing you want is for folks to do things irrationally, like take their money out of the bank and keep it themselves at home or somewhere else. When you see bank failures, people start to think that way, but it’s unsafe to do that.
How do these changes affect businesses?
From the standpoint of people over that $100,000 range, it gives them additional comfort that those funds are insured, in the case that something would happen to the institution they’re depositing with. By giving unlimited coverage to checking accounts, that was something that business customers felt a little lost in the initial FDIC move, because the larger amount of funds that a business has are usually in a checking account. Usually corporations and nonprofit organizations will have some specific guidelines that are mandated by their boards in terms of how they invest excess funds outside of their operating accounts. When the FDIC was able to give unlimited insurance to the checking account, where typically a lot of businesses will move money out of the checking account, they had to decide whether they wanted to keep more money in the checking account in the immediate future because of the insurance aspect of things.
How should businesses educate their key employees and customers about these changes?
FDIC has an excellent Web site (www.fdic.gov), and that’s what we offered up to our customers. It walks you through the process step by step and answers questions. It has an 800-number you can call where associates will pick up immediately and answer questions. The second piece is with businesses; it’s probably a good time to review what your investment strategies are and the policies for the company and make sure that everything is in line with some of the changes that have happened this year.
Should businesses expect more changes in the future if the economy continues to go downhill?
I would say yes, from the standpoint that the FDIC and the government are proactive and ready to react to economic conditions if they see the need. So being ready for change is paying attention to what is happening and using resources, specifically around the FDIC. There are a lot of changes out there from economic conditions that are nonfinancial-market-related that companies are going to have to pay attention to and do. General preparation for businesses is the key. The FDIC and the Fed themselves show that they’re prepared to act if necessary, to make sure that the economy is as stable as it can be in a situation like this.
JIM PAUL is senior vice president of retail administration at Fifth Third Bank. Reach him at (813) 306-2511 or firstname.lastname@example.org.
Brian Cescolini says that it’s sometimes hard for leaders to listen to others because they’re passionate about their jobs and growing their companies.
“Sometimes CEOs or higher-ranking executives just have their eye on the ball, and that’s where they’re going to go,” says the chairman and co-CEO of Universal Services of America LLC.
Cescolini recalls a conversation with one of his employees, who told him in the organization that his 7,041 employees didn’t know how to handle. By listening to the employee, Cescolini was able to reach out to them and help solve the issues.
Listening to his employees and creating a trust with them has helped Cescolini grow the building services company to 2007 revenue of $167 million with four divisions: Universal Protection Service, Universal Building Maintenance, UPS Fire/Life Safety Services and UPS Security Systems.
Smart Business spoke with Cescolini about how to listen to your employees and get them involved in your company.
Listen. It’s something that is learned. The more that you listen to the feedback from your employees, the more understanding you have for the culture of your company.
If you don’t listen and don’t share the passion with each other, then I don’t think that you succeed in having a great company. You just have to make it a priority to communicate with your employees, listen to what they say and actually act on some of the suggestions that they may have, because there are good ones.
If you don’t listen to your employees, that there’s a tendency to have a different perspective of how the company is running versus what the employees think.
Part of listening is open discussion and getting action items on the list. If someone has a good idea, they discuss it in meetings, and if it is something the team thinks could contribute, it goes on the action list. The initiatives on the action list are scheduled with due dates, and someone is selected to drive the process and report back to the committee in the next meeting.
Sometimes an executive can listen to an employee, but if he is too busy to do anything about it, then it is perceived that no one listens. I try to push the idea back onto the team so they drive the process, things can get done, and the employee feels satisfied that he or she contributed to the company.
When a CEO or president listens to the employee, whatever level of the position they might have, that encourages the employee to want to stay and work for the company as long as they can.
Get employees involved in the development process. When you create a vision, you have to make sure that everyone is on board. In order to do that, it involves them taking part in the decision-making and creation of the vision.
If they’re part of it and involved in actually creating the policies and procedures and hiring the right people and so forth, then they own it.
Empower them, make sure that you identify the right accountabilities for the employee and that the employee understands what they’re accountable for and what they’re not, and also provide incentives for success. If the organization reaches its goals, then the employee should be rewarded handsomely for their efforts and leadership.
It’s like a big train. If everybody behind you is on the same track, then the momentum is going to flow. That creates energy, it creates synergy, and it creates good morale. With those three things, then it allows the company to maximize its ability to accomplish any goal that it sets forth, because everybody is on the same track.
Hold employees accountable. We have chosen the five most important things that the employee is supposed to be responsible for. And those five things are the most important things to the company.
There are always going to be, these things happen and those things happen, but they have to perform on five major facets of their job. It allows the employee to not concentrate on all the little issues but to keep their eyes focused on the five most important things the company wants them to do.
And it’s simplified — rather than make it 10 things or 20 things or whatever, (it’s) the five most important things, and to us, that drives the culture and the vision. These five things for this employee pushes into the five things for the next person in the level above them and five things for the person above that person, and pretty soon, we accomplish and reach our goal.
It’s a matter of taking their job description and mixing it with their actual [job], which is funny because job descriptions don’t always match up to the actual job an employee does. Then there’s an evaluation of what are the five most important things that this person has to accomplish in a quarter’s time.
Every job is different, but we pick the five most important things that that person is supposed to do in their job.
We all expect our employees to perform, but some of us have to nitpick to find fault in things. Employees have hundreds of things to do. But what is important is the five most important things they do that make this company prosper.
Forget about the other small stuff; it wastes too much time. Get them to perform on the important issues and make them feel important and part of the success.
HOW TO REACH: Universal Services of America LLC, (714) 619-9700 or www.universalpro.com
Jason Levin says that to be successful in business, you first have to figure out what your purpose is. Working in the flower business he founded as Gringo Ventures LLC which does business as Dos Gringos Levin says that his purpose is to sell products that make a difference in the lives of his customers.
Understanding your purpose can help you create a vision and mission that your employees can achieve.
“The vision gives your team something to strive for,” he says of his 150-employee, $20 million company. “Ideas are cheap; it’s teams that win. So when the whole team is working together toward that vision, great things can happen.”
Smart Business spoke with the president and owner of Dos Gringos about how to create a successful vision and mission that give your employees something to work toward.
Q. How do you create a vision?
Your vision is what you see for the company down the road. You get the team involved in the whole process. And from there, it’s making sure that everyone is making decisions consistent with that every day. That’s where the importance of the mission comes in is what we’re doing right now getting us closer to the mission, is it consistent with our mission?
It stems from the core culture that you have open-door policy and making sure that you’re open to ideas from everyone. It drills down from me with my leadership team to the management team to all the way through having an open-door policy.
At one point, we had a mission that was four paragraphs long. We realized there’s no way that we can get all of us to know a four-paragraph mission, so we needed to narrow it down to what’s that key thing that we do.
It doesn’t have to be big and formal, it’s just one sentence ... and narrowing it down and getting everybody’s idea for what do we do to make this world a better place.
Q. How do you narrow your mission statement?
What do you do that makes the world a better place was how we approached it. It’s just that one or two sentences that are key to driving your business forward that you can lean to when you have to make difficult decisions what is it, and to ask that question over and over again.
If this was our mission and we were faced with this difficult situation, could we go back to our mission and ask ourselves, ‘Is this consistent?’
Q. How do you create an open culture?
If you want an open culture, you have to be open yourself. This means communicating relentlessly with your company.
I start my day by walking through the plant entrance ... and saying good morning to all of my teammates. If you want to find out what’s happening at your company, go to the front line and just listen. The more you listen and follow up with action items, the more open your team becomes to communicating ideas with you on how to make the organization better.
You always want to be sharing. For me, it could be a quick e-mail to the entire staff, it could be just out on the sales or plant floors talking to people. There are lots of ways, but I’m rarely sitting behind my desk, I’m always out communicating, talking and finding out what’s going on in each department, and just keeping the team informed.
It’s the personal connection. You’re learning about them as an individual and key things that are going on with them that help you connect. As I’m walking around or communicating, I’m trying to see, are there any roadblocks getting in the team’s way, and what can I do to eliminate those for them?
Q. How do you encourage teamwork so that employees are working toward the vision and mission?
You’ve got to have great people ... and then it’s making sure someone’s doing what it is that they do best. Then always communicate to them what’s going on in each department so that they can feel the momentum.
We look for solid character and a history of success in life at some point. ... It could be from having raised great children to captains of their college sports teams to loyalty to past companies. I always say the coach of the San Diego Chargers doesn’t hire a field goal kicker without watching them kick field goals under pressure situations time and time again. So you’re looking for something in the past that is a leading indicator to what type of person they’re going to be for you on the team. You’re looking for examples and verification of that example.
You either hire smart or manage tough, and it’s far too time-consuming to manage tough. The benefit is you don’t have to manage tough, yet if you hire smart, you can give people rope, let them flourish, support them and spend time leading the team without having to be a tough manager.
HOW TO REACH: Gringo Ventures LLC dba Dos Gringos, (760) 477-7999 or www.dosgringos.com
David Decker says that all leaders, at some point, will learn that their success or failure depends not on what they do but on what their people do.
And when that happens, you will be better able to engage your employees’ loyalty and set them up for success.
“Then you have to respect the loyalty that you are able to develop in people who work for you by not placing them in situations where they can’t succeed — so establishing realistic expectations for people,” he says.
Decker follows these rules with his 960 employees at Franklin University, which has an operating budget of $52 million and three campuses in the Columbus area.
Smart Business spoke with Decker about how to respect your employees and set expectations that they can achieve.
Take time to say thank you. You have to honestly believe that the contributions that people make at all different levels are important. People don’t have much difficulty in identifying false opinions and reactions, and they can do that from a leader just as easily as they can with anyone else. If you don’t actually believe in the value of the contributions of others, then that will become evident.
You have to make a conscious effort to say thank you a lot more than almost anyone else you’ll ever meet. Thanking people, and complimenting them in public, is important in engaging their loyalty. There’s a promptness aspect to this — when people do something good ... you ought to acknowledge that when it happens and not six months later. There’s a value in being current and prompt in your expressions of gratitude.
It’s also important to people to have their peers hear the thanks that are expressed to them by people above them in the organization. You want the people who you work with to know that what you’ve done is appreciated by the leadership. Complimenting people openly and in front of others has a multiplier effect.
Establish realistic expectations for employees. You want to establish goals that represent a challenge, but at the same time, you don’t want to establish goals that are just not achievable.
There’s a trap in all of this. ... If you ask people to set goals for themselves, often they will set goals that are too aggressive. Sometimes, of course, they do the opposite — they set easy goals for themselves. It’s the responsibility of the leader to adjust those.
You have to have the ability to recognize when someone has put out a goal for themselves that they can’t achieve, and you then have to gently and sometimes indirectly adjust that so it’s a goal they can achieve.
Learn how your employees work.
Some people are steady and methodical workers, and they’re working their way calmly and steadily through everything and keeping their nose to the grindstone. Other people work in spurts — they put out huge output for a few days or weeks and then go for some time when they’re not doing much of anything.
If you have someone who’s steady and methodical, then you set goals that are consonant with that. You set a large number of intermediate goals, so they’re always working toward the next one.
Whereas with people who work in spurts, sometimes you’re better off just giving them the general objective and time frame and letting them use their own waves of energy to tackle this thing. I don’t think it’s a good idea to try and jam everyone into the same cookie cutter.
You have to observe their behavior. Sometimes they’re aware of it themselves, but oftentimes they’re not. You might have some person who’s in the second category ... and they might not even think of themselves that way.
You have to be conscious of the actual behavior and performance of people, rather than relying on their own self-assessment or presentation of themselves and their work habits. Everybody wants to present themselves as steadily working and never having any down-time, and of course, we know that’s not true; only a small number of people are like that.
Create an open atmosphere. If somebody feels they can’t get something done by the time they thought they could, they will tell you that well in advance. If you give someone a project and say you’d like to have the project done in two weeks, there’s a big difference between them coming to you after the two weeks are up and saying, ‘I wasn’t able to get it finished, and it’s going to take two more weeks,’ that’s one thing. Another thing is for them to come to you after three days and say, ‘I looked at this and scheduled it all out, and there’s no way it can be two weeks, I need four.’
You’re better off knowing that earlier than later. If people think that they can’t honestly tell you about what their capabilities are and what they think they can do, then they won’t tell you, and you’ll be scrambling at the end.
If people see that’s what happens when you honestly say you need an extension on a project, then of course they won’t ask for one. You have to refrain from doing those things.
You have to convey the message that if somebody honestly says that they need to change the schedule of something that they’re working on, you need to have it be seen and known that they get credit for that.
HOW TO REACH: Franklin University, (614) 797-4700 or www.franklin.edu
When John S. Yi came to the U.S. from Korea as a teen, no one gave him a free ride, and he had to work hard for everything. Yi even spent 10 weeks while a student at the University of California San Diego living out of his car because he didn’t have enough money to pay for both tuition and room and board.
That experience ingrained in Yi the importance of hard work, and he has instilled this value in his nearly 200 employees at Koam Engineering Systems Inc., a defense contractor company that provides information technology and logistics services to government and commercial customers.
“I want to make sure that when people work hard and try to do better, they are rewarded and appreciated,” says the founder, president and CEO of KES, an $18 million company.
Smart Business spoke about how to get the right team and provide a good environment that encourages them to work hard.
Q. What are the keys to growing a company?
It’s all about people. Making sure that you provide an environment for people to try to reach their best level professionally as well as creating a culture where you are challenging them to reach that highest level of their capabilities and not try to penalize them when they do make mistakes.
When you do that, you attract people who are aligned with what the company feels is absolutely needed to grow the business by growing themselves personally; by doing that, they’ll be able to grow the company, as well.
Q. How do you create a good environment for your employees?
It’s leading by example. It starts with me and the fact that I always don’t do the right things or say the right things. Having enough confidence to recognize that what you’re doing may not be the best for the company and trying to listen and be an active listener. By showing that I think they know that I’m not sitting on some kind of pedestal or soapbox and trying to tell them something I won’t and can’t do for myself.
You need have the patience and always seek the speaker’s perspective when you are having a conversation. Demonstrate your appreciation and respect for the speaker’s perspective, even if you disagree.
I tell my staff that little disagreements are healthy and productive as long as it allows us to fully understand what we are trying to address.
Your job is to create those environments and make sure that it’s OK to make small mistakes as long as it’s not catastrophic failures. It’s kind of like rearing a kid you would not give a sharp knife to a small child.
As the child grows, you want to constantly challenge them to learn new things. They’re going to fall, and you want to make sure to pick them up and say, ‘Hey, you tried something; it didn’t work, try it again.’ The value of having that kind of attitude is that they feel like they can try things and be entrepreneurial, they can think a little bit outside the box and won’t be penalized.
Q. How do you lead by example?
Set up an environment where they feel comfortable asking questions. If I don’t know the answer, I will tell them I don’t.
You can lead by treating people with respect or can look at people as just another resource, and that’s the important differentiator. Really looking at people and giving them an understanding that what they’re doing is critical to the success of overall company’s performance in terms of not just creating opportunities for people and creating value for customers but for the company.
You must talk the talk and walk the walk. Do simple things first, like showing up to work before anyone else. Always be sincere in what you say, and deliver more than what you say. Don’t compromise your ethics and value for a quick return.
Q. What qualities do you look for in employees to fit into that culture?
Teamwork, the ability to work in a group. I would rather have above-average individuals working well in a group than one or two prima donnas who could part seas and walk on water. Teamwork is critical because no one can do everything.
More importantly is their attitude toward what their responsibilities would be. They may be incredibly brilliant, but if they have a wrong attitude, if they have a negative attitude toward what they’re asked to do, then you’re obviously not going to be able to fit.
Q. What are the benefits of having a good team and environment in place?
The fact that you have a good group of people creates a good environment where you want to come to work and you feel important. The importance of having a culture is that people are generally happy to come to work, and happy employees are productive. And happy employees, productive employees are ultimately great for top line and bottom line. ... I want them to have buy-in and to be successful.
HOW TO REACH: Koam Engineering Systems Inc., (858) 292-0922 or www.kes.com
To grow a successful company, you have to take risks, even if they don’t always pay off, says Herb Engel.
“Sometimes, you just have to look at it and say, ‘Sometimes, they work; sometimes, they don’t,’” the president of Marine Group Boat Works says.
The full-service boat and yacht repair facility founded in 1986 as an offshoot of a boat yard business founded by Engel and his brother, Art has grown despite facing several challenges along the way: The company reached 2007 revenue of $13.3 million an increase of 88 percent over 2006 and has 50 employees.
Smart Business spoke with Engel about the keys to growing your business and how to learn from mistakes with growth.
Q. What are the keys to growing a company?
Analyze your market and look at what’s out there. Look at what the existing market is. We put together a business plan at the beginning of every year and sit down and look at the markets, what’s available in the segments and figure out how much we think we can do. As we go each year, then we get better and better data that we can go back on and track ourselves and see how we’re doing.
The biggest thing is to know what your market is. You’ve got to go ahead and know your market and what you think you can pull out of the market and plan accordingly.
Keep in touch with your industry. You look at trade journals and magazines. You go to trade shows, keep up to date with industry happenings and contribute to organizations that benefit your trade. Networking and keeping in touch with contacts that you have made is also key.
Passive involvement has no advantage, but if you take initiative with the affiliations you make and actively seek to collaborate with these people or businesses, you’ll know what’s going on, and it’ll help make you an expert at what you are doing and what your competitors are doing.
Q. How do you communicate the plan to employees?
We let people know how we’re doing, and it’s just part of the whole philosophy. They don’t have to know numbers; the main thing is, they know the philosophy is we want to grow and move forward.
The people who own it and manage it, it’s their mindset. Our plan is built by key people.
We get input from managers and employees on a regular basis. They provide us with insight as to what works and what does-n’t, and we take their input and incorporate it into other forms of research, such as examining past experiences, following current and future market trends, and seeing where we can be along those trends.
Feedback helps us find more efficient ways of doing things, and when that happens, everyone is much more motivated to integrate it into their practices.
Q. How do you manage growth?
You’ve just got to get in there and get it done. You have to staff up and get in and get the work done. It’s always a concern to say, ‘Let’s take as much as we can take,’ but a lot of times, that can cause you problems. There are times you have to just come around and say, ‘Boy, that would be a nice job, but we can’t do it.’
If you’re trying to grow a company and grow it quickly, look into different areas such as new or niche markets within an existing market. Spread yourself out. But make sure you look to your goals and resources to determine what is attainable.
At the same time, spreading yourself out doesn’t mean spreading yourself too thin. Don’t try to bite off more than you can chew.
Q. You said that taking risks can sometimes result in mistakes. How do you overcome those and use them as a lesson for future growth?
Look before you jump, make sure you understand what you’re jumping into, and make sure you understand the market. A couple of the businesses that we got into that didn’t work out well, I don’t think we understood that market.
If you look at what the market is and understand it ... these other businesses we had problems with were not related back to what our key business is ... so we understand that market and that industry.
Sometimes, people think because they do one thing ‘I was great at this business; I can do anything’ and then they get off and into something that they don’t understand the business, and the next thing you know they’re in trouble.
HOW TO REACH: Marine Group Boat Works, (619) 427-6767 or www.marinegroupbw.com
Ron Petnuch follows three basic rules that have helped guide his professional career, first in law and now as a president and CEO.
“There are three basic roads you can take in any business,” he says. “One, you keep your integrity in place at all times. You have to be committed to what you’re doing, and committed to me means being a student of the game. The last big thing is that you have to add value.”
Following these three rules has helped Petnuch grow InterTECH Security LLC, an electronic security systems integrator company with 121 employees.
Smart Business spoke with Petnuch about how integrity, commitment and adding value can help you grow your business.
Q. What are the keys to having integrity?
Integrity, the way it was explained to me by one of my mentors was, if you do something wrong, if something doesn’t work out, it’s like putting a rock in the knapsack on your back. Every time you do something like that, it’s like putting another rock in your knapsack, and eventually, that will weigh you down.
If you get a rock in your knapsack, stop and take the rock out. Admit the problem, have the discussion with the client, have the discussion with the person you wronged and then move on. If you allow it to keep building up, it will take you down.
If something goes wrong, you admit it and fix it, but you keep your integrity, which is your trust, in place at all times. If I get something wrong here, as the CEO, I’m going to admit it.
Why would I not tell my employees, ‘Hey, that was my mistake.’ If I do that, if I have that kind of integrity, don’t you think my employees would have that type of integrity with me and their fellow employees?
When you treat your employees that way, they tend to treat you that way.
Q. How do you make sure you are committed to your business?
If you’re going to be in business, you have to do it to the best of your abilities — study it, work at it, and practice at it to become good and proficient. Be committed, and commitment’s nothing more than a compass; it keeps you pointed in a direction.
That keeps you pointed in a direction of how you handle customers, engineer jobs and perform the work. If you’re doing things that aren’t consistent to that mission, why are you doing it?
If you’re doing something that’s taking you in a different direction, then you have to ask yourself, ‘Why am I doing something that’s not consistent with that?’
Q. How do you add value to an organization?
You have to add value to your client and customers, because if they don’t see value being added, you’re not going to get far. We also have to take that view with our employees and one another.
Am I adding value to my management team? Am I adding value to my employees? Is my being here making them better, creating more opportunities for the company, etc.?
Each employee has to look at it that way relative to their teammates they’re working with and to the company. Am I adding value to the company? If the answer is no, if you’re just telling them stuff, then we’re not going to get anywhere. You then, at that point, commoditize whatever product or service you’re selling.
If the client sees value to what you’re doing, you’re providing them with solutions and solving problems, whatever it might be, that’s a good arrangement. If they just see you as a source to buy widgets and they’re looking for the cheapest price for the widget, you’re not adding value in that process.
Ultimately, that’s what comes back from the client. When your client tells you, ‘Good job, you’ve added value. How do I help get more business? If you ever need a referral, you just call me because I will talk to whoever it is you’re selling to; you guys are good.’ That is the ultimate reward; that means we’re doing what we set out to do. That’s a little vicious circle in and of itself, because the more work you do, the more you get referred, and the more you get referred, the more work you get, and you grow your company that way.
Q. What are the benefits of living by these three rules?
The company grows its revenue and maintains its margins and pricings, which makes you profitable. That’s the scorecard at the end of the day of running a company. If we’re profitable and growing our company, that means we can hire more people, provide a good work environment and be a member of our community in a positive way.
They all link to one another.
HOW TO REACH: InterTECH Security LLC, (724) 742-4900 or www.intertechsecurity.com
Several times a year, the employees at Columbus Fair Auto Auction Inc. stop working for a couple of hours to enjoy lunch and each other’s company.
These lunches also provide an opportunity for them to share ideas with Keith Whann, CEO and general counsel, and the company’s other top management.
Whann says the nearly 700 employees are sometimes surprised that management wants to hear their ideas on how to improve things at the wholesale auto auction company.
“We’ve had some of the best ideas, including how we park cars to routing traffic in and out of our recon shop, come from employees who say, ‘Why do we do it this way?’ ‘Because we’ve always done it this way.’ ‘Because it would work better if you did it this way,’” Whann says.
Listening to and acting on employee ideas has helped the company prosper and grow, and in 2007, it posted revenue of $38.5 million.
Smart Business spoke with Whann about how to really hear employees’ ideas and how to get the right people in the right positions to succeed.
Get the right people in the right positions. Experience is not the most important thing; the most important thing is to get a good person. You want someone who is a good person, somebody who wants to treat people right, wants to be nice to their fellow employees and customers and wants the job.
I’d take that any day over somebody who’s going to be a problem child and have a load of skills and talent, because you can work with the person who wants to learn more ... where as the other one is going to be destructive.
Make sure you get them into the right job. Give them the training and support on a dayto-day basis to be able to grow in that position and develop within that role. When possible, you promote from within. Then they get the team concept and think they’re part of something bigger.
You’re more efficient; you’re more effective at everything you do. If the right people are in the right positions, they tend to do better at their jobs; therefore, they like their jobs better, and there’s more satisfaction.
Remain open to employee ideas. You realize rather quickly that you can’t possibly do it all or even most of it. You have to be accessible. You can’t just say it. ... You have to actually act that way on a day-to-day basis.
Let them know no matter what job they have that you know they exist and understand their role in the success of the company. You’re going to have people with different levels of expertise and responsibility, but no matter what level they’re at, you have to trust them to do their job and do that correctly.
That doesn’t mean you don’t manage them, you don’t have oversight, but you have to believe that you’ve hired the right people and trained them well enough to do their job. If you haven’t accomplished that, then as the management team, you’ve failed. You’ve got the wrong people for the job, and you’re going to have problems regardless.
Recognize employees for their good ideas. The most basic thing is just going up and telling them, individually and in front of their peers, recognizing them for the job they’ve done.
Everybody wants a pat on the back and to be recognized for what they do. All too often in business, you focus on the problems or the areas you need to improve and don’t stop to take the time and recognize the things we do well.
For companies to succeed today, you have to do a lot of things well most of the time. What you have to do is not take that for granted. We’ve all seen situations in departments where you may have 20 people who work there, and one is the problem, and you’re constantly talking about the problem and coming up with rules or situations to deal with the problem, but you’ve got 19 people who are working hard and doing a great job. Make sure that you stop and recognize a job well done, thank those people and make them feel good about the effort they’re putting forth.
When you have the problem, you have to deal with it. It’s not fair to the people who show up every day on time and work hard to let people slack within the company and not have to work; that sends the wrong message.
Lead by example. It starts from when you show up to work to when you leave, what you wear, how you act and how you treat fellow employees. You can’t expect people to do things that you don’t do, and the easiest way to let them know the things you think are important is to do those things.
When you have 700 people, you can’t know them all by name, but you know as many as you can you stop and say hello to people. It’s not just a perfunctory hello, because that’s what you do as you walk by, but you stop and talk, find out about them, what’s going on in their life and what’s important. If they have a problem, issue or concern, you stop and help with it, even if it’s not your responsibility.
If they see the boss is out there helping a customer or taking him to find something ... if it’s important to me to do, it’s important for them to do. If you start breaking down the barriers between what is and isn’t someone’s job, and you’re leading by example, then everyone realizes that the job is to get the total job done, and we’ll succeed or fail as a team.
HOW TO REACH: Columbus Fair Auto Auction Inc., (614) 497-2000 or www.cfaa.com
Take a look at your company, and think about the hardworking employees who help your company succeed.
What would you do if you found out that one of them stole from your company, be it supplies or money?
This scenario is one that plays out at businesses across the country. Fraud can happen in thousands of different ways, and experts estimate that companies lose about 5 percent of revenue each year to fraud.
“The typical scenario we see is where the owner or management relies too much on trusting a couple of individuals rather than relying on business controls,” says Kevin R. Krencisz, senior manager at Barnes Wendling CPAs Inc. “My usual response is, ‘Hopefully, you trust who’s working for you, otherwise I would hope you wouldn’t keep them on the payroll.’ You have to go further than that. People can’t feel like they have the opportunity to commit fraud.”
You can help prevent fraud at your company by putting some key controls in place. Krencisz says that brainstorming with management and with key employees can help you identify the ways that fraud could happen at your company and then implement controls to prevent it.
Beyond that, Krencisz says that you should pay attention to gut feelings. If something doesn’t feel right, follow through with the right people, such as your accountant, to uncover whether something is wrong.
“You don’t want the people you suspect to know you suspect something, because they could start getting rid of documents or covering their tracks,” he says. “The worst thing is, whether it’s a couple months or years down the road, you say, ‘Something didn’t seem right, and I should have checked up on it.’ A lot of times, the hunch can go a long way.”
Knowing how fraud occurs can also help you detect and prevent it, and your accountant can educate you about fraud that has occurred at other companies and what to look for to keep it from happening to you.
Defining fraud and setting up a comprehensive code of ethics and conduct for employees to follow will make it clear to them that theft is unacceptable. Krencisz says that because fraud can be defined many different ways, you need to create a definition that both fits your company and that is easy for employees to understand.
Despite taking all these precautions, you may still find yourself a victim of fraud. Once discovered, you need to deal with it swiftly and explain to other employees what has happened so that they understand you are serious about it not happening again.
“If I knew a colleague who stole from the company or lied and they weren’t terminated, I might say, ‘Well, maybe I can do the same thing and get away with it,” Krencisz says. “I encourage people to be vigilant and have a no-tolerance policy, and when it’s caught, it needs to be dealt with.”
And by being upfront with employees about the situation, you are also giving them the opportunity to share information they may have about suspicious activity.
Krencisz says that employers might take fraud more seriously if they took a hard look at the numbers involved.
“I sort of imagine if there was a line on the income statement that said ‘fraud expense,’ and it totaled 5 percent of revenues, that would be eye-opening to someone to say, ‘Can’t we control that somehow?’” Krencisz says. “Ultimately, it could take a few changes within the internal structure to get that 5 percent back. Companies sit back and think of ways to cut costs ... and here some of that is right at their doorstep and can be done easily.” <<
How to prevent fraud
Fraud can happen in thousands of ways, says Kevin R. Krencisz, senior manager at Barnes Wendling CPAs Inc. Here, he offers tips on how to prevent it from happening at your company.
- Have the bank statement
sent to someone off-site. That
person is then looking at the
cancelled items and statement
independent of the cash
- Limit access to company
credit cards. Krencisz says providing access to company credit
cards can be like giving employees approval to make unauthorized transactions. Make sure
those who do have access provide reconciliation within a week
of a transaction.
- Prepare a budget for actual expense items. Krencisz says
you can see a lot through this,
especially if there are fluctuations from one period to another. And be sure to get explanations for these fluctuations.
- Examine journal entries
and adjustments made to the
accounting. Krencisz says that
those in accounting who want to
bury something can cover up a
- Give employees a forum to bring information to you. Krencisz says a lot of fraud cases are uncovered by employees, so you need to have a way for them to anonymously communicate these issues to you in a way where they know they are not going to be punished. Follow up on this information and make sure it’s not just a case of an employee making a false claim against an employee he or she does not like.
HOW TO REACH: Barnes Wendling CPAs Inc., (216) 566-9000 or www.barneswendling.com
Building and maintaining relationships is an important element at S&V Industries Inc. and has also been a key to its growth during the past several years. CEO Senthil Kumar, who started the company in 1993, wants customers for the long term and works hard on creating solid customer relationships.
Kumar has placed a focus on customers throughout the company by including it in the company’s core values. He encourages employees at all levels to build and maintain relationships with customers. Kumar strengthens those relationships by identifying and anticipating customer needs and addressing those effectively and efficiently.
Kumar has designed the company to be a one-stop shop for customers, offering a full range of products and services.
Employees are equipped with the latest hardware and software to provide the best solutions to customers.
The Akron-based company is a market agent and logistics solutions provider to major U.S. original equipment manufacturers that provide manufacturing parts produced by global suppliers. The company has more than 50 OEM customers in the U.S., Canada and Mexico and partners with numerous manufacturing facilities in India and China.
The focus on relationships has resulted in substantial growth for the company. Revenue has risen throughout the years, from $9,205 in 1995 to nearly $25 million in 2007, with revenue expected to be between $28 million and $29 million in 2008. The company has already seen a 36 percent revenue increase in the first half of this year compared to the first half of ’07.
The employee force has also grown, from five in 2003 to 23 today, spread between the United States, India and China. The growing number of employees has resulted in the need for the company to move into a larger location in the Akron area later this year.
Kumar has built an open culture where employees are empowered to make their own decisions. He is always open to new ideas as well as learning and implementing best practices for the company.
Kumar hopes to continue the growth and success at S&V Industries and hopes to reach revenue of $200 million by 2017.
HOW TO REACH: S&V Industries Inc., (330) 253-1986 or www.svindustries.com