Todd Shryock

Monday, 22 July 2002 09:47

Obesity bias

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There are many factors that may affect a hiring decision, including ones that, by law, are not supposed to be considered, such as race or sex. But there are other biases that may creep into a decision as well, including a bias against an obese person.

SBN talked to Paula Popovich, an industrial psychologist at Ohio University, who has studied this topic.

Q: Is an obese person less likely to get a job than an average-sized person?

A: There is evidence of stereotyped beliefs and discriminatory behaviors against the obese in the workplace. Some is anecdotal and some is experimental. Experimental evidence usually involves providing people in a study with information about a job applicant, including their weight or photo, and assessing whether this has any effect on hiring or other personnel decisions.

Q: Is this bias a conscious or subconscious factor — do employers “know” they are not considering a certain job candidate because of his or her weight?

A: It is probably a conscious factor for some people, but not in others. In our research, we found that those subjects who tended to have negative attitudes toward obese persons were more likely to allow these biases to affect their personnel decisions. Although we did not ask for reasons, I would suspect that, if questioned, these subjects would probably be aware of their choices and justify them — such as they really do not believe that an obese person could be a health club manager.

Q: In your opinion, why does this bias exist?

A: There are a number of theories that are used to explain bias. One of my favorites is that we use biases as shortcuts to understanding the complex world around us. When we meet another person in any setting, including a selection situation, we are faced with processing an enormous amount of information.

As humans, we have limits to our cognitive processing abilities, so we use shortcuts, including stereotypes, which allow us to think that we know a lot about a person by virtue of the group we can place them in, such as race, sex, age, weight, hair color, etc.

Some of us are able to process more information than others, so we are less prone to use these biases. However, no one is immune, so research like mine is designed to help make us aware of these biases, so that we can make more accurate decisions.

Q: Does the bias only appear in jobs requiring manual labor, or only those where physical appearance is important, such as sales?

A: Our research showed that the bias against the obese tended to show up most in jobs that were high in physical activity. Interestingly enough, other researchers have speculated — but not tested the assumption — that obese persons were hired for less visible jobs. Our research did not find that to be true.

Q: How does the Americans with Disabilities Act factor into all of this?

A: The ADA is rather general in describing disabilities, and has been open to interpretation. It includes criteria such as “physical impairment” that “limits” the person’s ability in “major life activities.” There have been some attempts in organizations, the media and in the courts, to show that obese persons fit these criteria.

If obesity is recognized as protected by the ADA, it would then be unlawful to discriminate against someone in any personnel function — hiring, evaluations, promotions — based upon his or her weight. As is true of any discrimination case, the organization would then have to show that body weight is a valid predictor of job success — a bona fide occupational qualification.

Validity, however, is something that is not just based on an assumption, it must be supported with empirical evidence. That is, we might assume that an obese person cannot be a successful health club manager, but unless there is evidence that is true, then the validity of that assumption is questionable.

Q: What advice for employers do you have?

A: As an industrial/organizational psychologist, my advice is always to make sure that your selection instruments, including interviews, are reliable and valid, which should help to reduce the influence of biases.

In the case of characteristics like obesity, it is also useful to be aware of the potential for bias, and to recognize that stereotypes, while appearing to make processing information a bit easier, do not always lead to an accurate decision.

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:47

In-house solution

Health care is a difficult benefit to manage in any business. It’s expensive and complex to administer, and switching plans usually means complaints from employees as they may have to switch doctors.

When a service that’s intended to be a benefit becomes a concern, productivity and morale fall.

That’s why some employers have taken health care into their own hands. These businesses, mostly bigger operations with a large employee base, are building their own health clinics and contracting directly with physicians to provide services on-site.

These health centers offer occupational health care as well as primary care. In some cases, they even have pharmacies. Many employers extend the benefits of the facilities to dependents and retirees.

Employers will usually outsource the operation of the clinic to a third party, who provides staffing.

One advantage to an employer-provided facility is the medical staff is working directly with the work force on issues such as workers’ compensation, safety and certifications. The staff becomes familiar with the particular industry and job site, and is able to tailor its services and recommendations accordingly.

Examples of care provided at facilities include:

  • Acute and chronic illness and injury care;

  • Routine examinations and immunizations;

  • Minor outpatient surgery;

  • Radiology and mammography;

  • Preventive care and wellness programs;

  • Utilization management;

  • Physical therapy;

  • Laboratory and other services.

A business should have at least 500 employees for on-site occupational services and 1,500 for a primary care center. The cost to build a center is substantial — from $300,000 to $1.5 million to develop and operate annually. According to Corporate Health Dimensions, a third-party staffer of corporate clinics, the payback can be considerable and quick.

At CHD sites in 1996, the average cost per visit for primary care was 40 percent less than in the community, and occupational health costs per visit were almost 25 percent less. Pharmacy costs were also less than the community average. At one site, workers’ compensation costs were reduced by 70 percent.

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:45

One-stop learning

Imagine that you had the equivalent of Yahoo! or Lycos on your desktop, but instead of searching the Web, it only searched the knowledge in your company. If you didn’t find what you were looking for, the search could be broadened to industry publications or general Web sites.

This is becoming reality with the deployment of Enterprise Information Portals.

“An EIP is a single gateway to all the information assets of an end user or an organization,” says Rodney Bienvenu, president and CEO of SageMaker, an EIP developer. “It’s a single point of access for your information requirements.”

A hardware store owner might need information on hammers, such as competitor pricing, supplies, industry trends, new products or nationwide demand. The owner needs the knowledge to make various business decisions.

“In order to do that, the person needs to know a lot about how to find and extract information from various sources,” says Bienvenu.

This may mean navigating Web sites, filling out membership information, then being issued a password; then another search within the site begins to extract the information needed.

“There has been no actual work done yet other than searching for the information,” notes Bienvenu. “You skip all that with an EIP. It simplifies the whole process to a single step.”

This is made possible by all data being tagged with information that tells a computer what it’s about. It’s essentially a card catalog entry, with a subject, author, how often it’s updated and other data. EIP companies have run into problems in some areas, because, for example, net income in the United States is calculated differently than net income in the United Kingdom, so there’s no universal comparison.

As a result, EIP firms have evolved along industry specific lines.

SageMaker has set up its EIP software to filter all the information from Web sites and elsewhere into a set of basic page designs so you don’t have to learn to navigate each new source of information.

Passwords to proprietary content have also been streamlined. Once you sign into the SageMaker system, you have access to all the sources you are paying for without having to enter each individual site and remember the password for each of the possible 7,000 information sources.

The product can also be customized, so once you decide what is most relevant to you, that vital information will appear on your start-up page so you don’t have to search for it each time.

Users have the option of paying only for the sources they need, and SageMaker subscribers range from individuals to large corporations with thousands of users. Internal company data can be coded in the same fashion as general data to be included in any internal search.

Systems can also be set up to alert you of certain occurrences. For example, the owner of several stores could have employees entering in specific data from several locations. If a certain number of “no sale” transactions exceeded the average for that store, an e-mail warning would be sent to the owner.

“A portal is only as good as the content and applications available,” says Bienvenu. “It is only a container. It comes to life only when you have useful content.”

How to reach: SageMaker, www.sagewave.com

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:45

Going live

If you are interested in a product, you might search the Web. You find something similar to what you are looking for, but still have several questions, so you send an e-mail to the address on the site.

And wait.

Several days pass, but still no reply. In the meantime, you find a competing product at a local tradeshow and purchase it. What’s happened here? The company that spent so much effort putting together a Web site that’s easy to find and does a good job of selling its product lost a potential sale because of slow response time.

You wouldn’t expect your customers to walk into a retail store and write down questions about your products and wait several days for an answer. The sale would be long gone. The same holds true with your Web site.

Enter live e-tailing from LivePerson. Live e-tailing enables customer service agents to solve problems, answer questions and close sales immediately using real-time dialogue through pop-up windows. You can provide the same level of service on your Web site as many stores do at the retail level. Customers needing assistance simply click on the LivePerson icon.

Operators can either be employed by you, or provided by LivePerson. They are more cost effective than 800-number operators, because online, each operator can handle up to four simultaneous conversations. By talking to your customers one-to-one, you also gain insights into your product design, pricing, customer needs and user expectations.

There is no hardware or software to install; the entire process is through any Web browser. No browser plug-ins are required.

Pricing for LivePerson is a one-time setup fee of $500, plus $250 per month for each operator.

One operator can handle up to 200 to 225 calls per day, so companies should look at the number of phone calls and e-mails they get daily and make a judgment about what they need based on that.

The number of inquiries will be affected by not only the complexity of the product, but also by where the link is placed on the site. Some companies put a link to live help on every page, while others put it only in certain areas of the customer service section to limit questions to only the most serious.

How to reach: LivePerson, www.liveperson.com

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:44

Crops phone home

You’re driving through a rural area on your way to your next appointment when you decide to check in with the office.

Little did you know that the apple orchard to your left is checking in with the farmer asking for a fungicide spraying, while the corn to your right is requesting additional irrigation.

OK, the corn isn’t actually calling the farmer, but the technology isn’t that different from what you use to call the office.

“The system uses radio communication to collect remote data from different sites in near-real time,” says John Mascoe, sales manager North America for Adcon Telemetry, manufacturer of the product.

Data, including moisture and soil information, is collected using solar-powered sensors located at various points in the crop. This information is relayed using wireless technology to a central computer located as far as 60 miles away that analyzes it.

“We are trying to maintain the best soil-water-plant relationship,” says Mascoe. “You don’t want too much water or too little. The computer looks at each individual site.”

The farmer can take this data and selectively apply the right amount of water to each individual site within his crop. The system also allows for a more effective use of fungicides.

“To have disease, you have to have a host, the correct environmental conditions and a pathogen,” says Mascoe. “We’re assuming the host and pathogen are present. Our software monitors the environmental conditions. When the optimal conditions for a particular disease are met, an alarm is triggered.”

The farmer can then selectively apply the expensive fungicide to only those areas that are most susceptible to the disease.

“Traditionally, farmers would spray crops on a calendar basis,” says Mascoe. “We are finding out that is not the best way either environmentally or economically.

“We’re not reinventing the wheel, we’re just putting rubber on it. This technology allows growers to collect information they want and process it in real time. They don’t have time to go pull moisture sensors from the field and check them manually.”

The number of wireless sensors needed for each crop depends on topography. If the fields are located on a level plain with similar soil conditions, fewer sensors are needed, because the data is probably going to be the same for all locations. If the fields are on rolling terrain, more sensors are needed, because soil temperature and moisture levels will be different. The sensors themselves are small, only about 10 inches high by 6 inches wide.

“We do get cases of ‘tractor blight’ (farmers running them over with their tractors), but they’re marked effectively,” says Mascoe.

The information from the main computer is presented in a graphical format with adjustable settings for various alarm levels. You can even it set it to page you when an alarm is tripped.

“This is a management tool, not a silver bullet,” says Mascoe. “We never advocate blindly following the system. It’s a tool for them to pinpoint problems. It will never replace a human taking a look at what’s going on.”

Farmers can buy their own systems or work with a local distributor — usually the local ag retailer — to lease a system. With a lease, the central computer is at the ag retailer, with individual farmers accessing their information via modem.

How to reach: Adcon Telemetry, www.adcon.com or (561) 989-5309

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:42

Buying habits

Manufacturers of products sold to other businesses have often ignored consumer buying habits. This was the domain of the retailer or reseller, and was of little importance to those on the upper end of the supply chain.

But consumers — your customers’ customers — can yield insight into issues that directly affect original equipment manufacturers (OEMs).

“For example, businesses who make tags, labels or packaging will be in a better position to plan capacity issues if they watch consumer trends,” says Michael Cacicio, president and COO of USA Chicago Inc., a marketing communications firm.

There is already research predicting what brands and packaging types will do well in various parts of the country. A bottle cap manufacturer, by researching consumer habits, might find that wide-mouth bottles are becoming very popular in certain parts of the country. It can then make capacity and tooling decisions based on this data.

“Research can help predict where products will fall and where they will grow,” says Cacicio.

This same research might reveal that certain colors or shapes are more popular for a specific product, or in a specific region.

“From a differentiation standpoint, it’s very useful,” says Cacicio. “If you make product labels, how are you going to differentiate yourself from everyone else? All the label companies are doing the same thing you are. But if, through research, you find that for products in the southern United States, bright labels work better, you can use that.

“When you’re talking to a potential customer, you can advise them to not just buy a bulk amount of labels, but to buy a specific color for that region.”

The data allows you to take on a consultative selling approach with your clients. When you know as much about their customers’ buying habits as they do, you can better sell your products and develop a better sales relationship with them.

“You shouldn’t just be meeting with people, but helping them understand their market,” says Cacicio.

With research in hand, your arguments for certain products will be based on empirical evidence of customer habits rather than the old “ours is better than theirs” mentality.

If your product is used by someone who sells to consumers, examining research can be beneficial.

“There are a lot of research companies out there,” says Cacicio. “Start with the well-known ones, and by asking questions such as what data do they use and where do they get it.”

An industry trade group or publication in your customer’s field is often a good place to start. Once you have the sources, you can determine which one offers the best information to help your business.

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:41

Value added

Everyone would like to know what their company’s worth, but not too many want to pay a few thousand dollars to have an accounting firm review the numbers — especially if you’re not planning on selling anytime soon.

Now, with some basic information, you can get a pretty fair evaluation of just how much the company might sell for at Capital.com — and it won’t cost you a cent.

“This tool grew out of our years of experience as an investment bank,” says Mark Opel, chief operating officer at Capital.com. “It allows a company to do a sophisticated valuation, online, free of charge.”

The mechanics behind the valuation tool were the same ones the company used to make its own valuations.

“It is grounded in basic financial principles,” says Opel. “We just migrated it to the Web. We think it’s the best valuation tool on the Web, period.”

As with any valuation, the numbers at the end of the process are only as good as the numbers you put into it, both historical and projected.

“There is a certain amount of art in any valuation, but you will come away with a sophisticated and detailed report,” says Opel.

The entire site is geared toward companies with annual revenue of between $1 million and $200 million. There are two methods of valuation to choose from, discounted cash flow and public company cash flow, depending on which one best matches your company. Once all the data is entered, the site calculates a valuation in about a minute.

“You are getting a very sophisticated tool that up until now was entirely in the domain of investment banks and intermediaries,” says Opel. “It wasn’t available without having to pay. This gives people the power to go to the Internet and get a valuation for free. We hope people use it once, then continue to update their numbers. A CFO could incorporate into a report how the company’s valuation has changed from year to year.

“We don’t represent that the valuation is a final number, but it’s a real good start.”

Capital.com, owned by American Capital Strategies, is using the valuation tool to attract people to its site and introduce them to its other finance products.

“We’re taking the knowledge we’ve gained over the last 15 years and bringing it to bear over the Internet,” says Opel.

How to reach: Mark Opel, Capital.com; www.capital.com

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:41

Incubating success

The Internet start-up is one of the riskiest business ventures there is. Profits could be years — sometimes many years — away, technology pitfalls abound and operating capital can dry up in a nanosecond.

Add in the normal hazards of operating any business, and you have an extremely difficult road to success. Business incubators have been created to help alleviate some of these problems, but one company has taken the idea one step further: Take all the companies, including the ones which have already achieved success, and set them up to work together.

“I-Group is an Internet incubator that aggregates the portfolio companies with others to do things like provide access to potential customers, marketing partnerships and services,” says Jennifer Chrisler, director of operations for the Boston-based I-Group.

The incubator has a 25,000-square-foot facility to house the start-ups that need space. The incubator staff guides companies through the start-up pitfalls and provides something called “mentor capital.”

“This is a one-on-one relationship with someone who has been successful in building a billion dollar business,” says Chrisler. “This person walks with them as they walk, and helps them avoid mistakes they might make on their own.”

The incubator is a partnership between Softbank and the Intercontinental Group. Softbank has clients such as Yahoo and Buy.com in its portfolio. As a result, a company in the incubator that has products or services that might appeal to either of these huge Internet success stories has an inside track to getting the appointments with the right people.

The facility is located near Harvard and MIT, so there is no shortage of brainpower. There’s also enough technology support in-house that ideas can be implemented in days instead of months — a critical factor in being successful on the Internet.

Many of the normal day-to-day operations are handled by an outsourcing firm, which takes care of human resource issues, payroll and even recruiting. Furniture and phones are provided, giving business leaders more time to focus on the core concept.

With such a backing of expertise and money, getting into the program isn’t easy.

“We are selective and want the deals that are the next hot thing,” says Chrisler. “We often look for that first-mover advantage.”

The organization sees about 800 potential companies every quarter. The capacity of the incubator is about 10 to 12 companies, with participants “graduating” after six to 12 months.

“One of the hardest things when you start up is finding people to solve problems so you don’t make mistakes,” says Chrisler. “Here, we have access to people who have been there and done it, and with 130 portfolio companies, someone has seen the problem or been there before.”

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:41

E-service matters

If you think e-commerce is about dealing with anonymous customers in a cold, uncaring environment, you can forget about online success.

“In our experience, customer service for a Web site is just about everything,” says Dennis Sinclair, CEO of Virtualsellers.com, an e-commerce solutions provider. “If you want to retain the customer, if you want to keep them happy, you have to have some way to follow up from the Web and talk to them if something goes wrong.”

People are switching from catalogs to the Internet. If there are problems, customers should have an 800 number to call for help.

“They should also receive an order confirmation e-mail if ordering off the Web,” says Sinclair. “They should get an e-mail after it’s delivered asking if everything is OK and what it is claimed to be.”

One of the most important factors in customer service comes down to a site control issue. A good site focused on the customer needs to have the ability to do things like put up “out of inventory” signs, take down items no longer offered, keep prices up to date and match up price changes with special offers.

“This has been a huge administrative problem with Web sites,” says Sinclair.

Too often, sites are maintained in two different areas — one on the client side and one on the server side. While the sites might mirror each other, changes made might not be reflected to consumers right away.

A bloated chain of command for a site might have the marketing department creating ideas, which then have to be taken to the IS department, which assigns it to the Web master, who has to make changes to the client side. Eventually, the changes originally conceived by the marketing department will show up to the customers.

There are too many hands on the Web site, which creates a lot more customer service needs,” says Sinclair. “The second problem is customer service is not focused on the completion and satisfaction of the transaction. If a credit card is denied, call them and ask them for another form of payment. Complete the process manually if you have to.

“The main thing is, most Web sites from the retail side are dealing with existing customer bases. Try to think of dealing with customers just like you would in a real retail environment. You are not dealing with digits, you are dealing with people.”

Another common error companies make is cutting costs in the customer service area. They’ll spend thousands, and in some cases millions of dollars, to get a site online, but won’t spend the money to train customer service people on how to interact with customers on the phone.

How to reach: Dennis Sinclair, www.virtualsellers.com

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:41

Beeping boxes

At one point, it seemed everyone had a little black box clipped to their belt.

But beepers are disappearing, replaced by wireless phones that carry many of the same features in a slightly larger package. So is the beeping box history?

Not quite. In fact, it has a fairly promising future, albeit in a somewhat modified form.

“The paging industry has two main assets, a local distribution network of radio frequencies with a backbone terrestrial distribution network; and a channel for distributing pagers to people,” says Mark Plakias, director of voice and wireless commerce for The Kelsey Group, an industry research firm. “The backbone distribution network is becoming IP-based, and therefore is able to evolve into a wireless data infrastructure. This gives it a place in the merging wireless data world.”

The distribution channels at the retail level give it a basis for distributing new handheld devices that are capable of receiving content that originates on the Web and is filtered for distribution to one-way and two-way pagers. Web giant AOL obviously thinks there is some future, because it has announced a major initiative to sell AOL-branded pagers for receiving its personalized content and messaging services.

Backlash against cell phones lends some advantage to pagers, but it’s not an overwhelming one.

“The earache that is cellular is not shared by pager users,” says Plakias. “We see the two as highly complementary, with two-way pagers equipped with small keyboards being the preferred — and discreet — way to send near-realtime messages without annoying your neighbor. However, there are hands-free environments where pagers must take a back seat to the cell phone.”

The hybrid phones that encompass some of the same functions as a pager hurt the industry in some ways, but there are many factors involved. Mobile messaging is a highly segmented market; there are certain people with certain device propensities and situations who favor handsets, pagers or PDAs.

“Network connectivity is one aspect of the issue, and more fundamentally, addressing is another,” says Plakias. “Most wireless Web users do not know their phone’s e-mail address. Pagers have a universally understood addressing scheme.

“Wireless data networks, such as Weblink Wireless or the generic CDPD network used by Palm, are spotty in terms of coverage.”

It’s not just about the device, but the network coverage for messaging that comes with it.

And what about the lowly, one-way beeping box that created the mobile-messaging craze — does it have any future in a high-tech world?

“I believe so, but increasingly, it will be restricted to controlled, highly structured environments — hospitals, security guards in large structures, etc.,” says Plakias. “In these instances, the application is a simple notification, a call to action. With so many options available, the number of instances where a simple beep will suffice is dwindling.

“Even Manhattan bike messengers have sophisticated two-way radios these days.”

How to reach: The Kelsey Group, www.kelseygroup.com

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.