Commercial property owners in Cuyahoga, Lake, Lorain, Portage and Stark counties received a triennial update of property reassessment in the mail in December. Every six years, Cuyahoga County does appraisals -- the last one was in 2000 -- and reassessments are done every three years.
Kieran Jennings, partner with Siegel, Siegel, Johnson & Jennings LPA, says the fundamentals surrounding real estate value (net operating income, occupancy and other key financial factors) have declined since peaking in 2000. By increasing assessments established in 2000 the county may be over assessing taxpayers in a declining market.
"I can't imagine the county ever decreasing their tax base on an overall reappraisal. The fact that they only raised it a few percentage points lets us know, and the counties also know, that there has been basically no appreciation in the market for 2003 in Cuyahoga County," Jennings says.
However, even with a slowing in commercial property market values, he suspects many owners could be overassessed in this year's tax bill.
If commercial property owners believe their assessments are too high, they have the option of filing a complaint with their county's Board of Revisions. The deadline is March 31, after which an owner forfeits the right to appeal for 2003.
Once the complaint is accepted, commercial property owners must produce evidence that the assessment is incorrect and proof of the property's actual value.
The property owner is not the only one who can dispute a valuation. In Cuyahoga County, it is almost a given that the Board of Education will file a counter complaint to protect the current assessment, and may even seek to increase the value of the property after further review.
"Three months from now, you might get a letter from the Board of Revisions saying the Board of Education has filed a complaint against your valuation, and you're going to need to defend that," Jennings says.
Jennings says commercial property owners should know whether they are truly overassessed before filing a complaint.
"Once you file the complaint and the board files the countercomplaint, you would need the board to withdraw their complaint for you to actually back out of the case," he says.
Decisions can be appealed to the Board of Tax Appeals in Columbus, where it could take years to be resolved.
Owners need to be aware of the value of their real estate. Some believe valuations will naturally go up with each new assessment, but that's not always the case.
"It's not true that property -- commercial property especially -- always increases over time," Jennings says. "Industrial property quite often can decrease over time. There's a lot of obsolescence in older building."
If commercial property owners have reassessment questions, Jennings suggests consulting a qualified appraiser or property tax attorney who can look at the reassessment from an unemotional, third-party perspective.
"The reason you want to hire someone like that is that when all is said and done, you need someone not only who can tell you what the value of the property is, but who can testify, and the two do not always meet," Jennings says. HOW TO REACH: Siegel, Siegel, Johnson & Jennings LPA, (216) 763-1004 or www.siegeltax.com; Cuyahoga County Auditor's Office, (216) 443-7010 or auditor.cuyahoga.oh.us/auditor/repi/default.asp
A major uh-oh
Commercial property owners in Cuyahoga, Lake, Lorain, Portage and Stark counties have until March 31 to file a reassessment complaint with their county's Board of Revision. Kieran Jennings, partner with Siegel, Siegel, Johnson & Jennings LPA, warns that the complaint form is "riddled with technical pitfalls."
Improperly filed complaints are thrown out, and property owners are not permitted to refile within the three-year period of the assessment unless the property was sold, there was a casualty loss, there was a 15 percent change in occupancy or there was substantial improvement to the property.
"If you file it on time but fail to do it properly, not only do you lose the ability to contest for the year that you filed and got dismissed on, but you can't file for 2004 or 2005. It's a serious thing to screw up a complaint," Jennings says.
Some common mistakes to avoid:
* Using the wrong filing name. In a 1999 case, a company with the legal name Burger King Corp., Buckeye Superior/Euclid Inc. filed only as Buckeye Foods Inc. The complaint was thrown out because there was no entity named Buckeye Foods.
* Filing the complaint if you're not an attorney. The Sharon Village Ltd. v. Licking County Board of Revision case of 1997 determined that filing a complaint is a practice of law. "Your president can't sign this form. The attorney's going to sign it," Jennings says. "If you don't do that, it will get thrown out as jurisdictionally defective."
Jennings warns not to misjudge the complexity of the form. It appears to be simple to fill out, but any mistake will render it void.
Achievement Centers for Children
Sometimes a leader makes such an impact on an organization that it's hard to believe he's only been serving on the board of trustees for four years.
That's the way Arthur Anton, president and CEO of Swagelok Co., is regarded by the Achievement Centers for Children (ACC), which offers children with disabilities and their families services such as rehabilitation, education, family support and recreation.
Shortly after joining the ACC board in 1999, Anton was elected treasurer and chaired the finance committee. During his three-year tenure in that position, he and his committee reviewed and revised the ACC's endowment and investment policies.
He was a vigilant, educated advocate in meeting and communicating with the ACC's investment managers to ensure the best possible outcomes for earnings. Anton and his committee also reviewed options for financing the ACC's $8 million facility, and he oversaw the implementation of these financing decisions.
He joined the steering committee for the capital campaign and later became chair of the campaign. He was an active solicitor on the campaign cabinet, making his own financial contribution and pledging $50,000 from Swagelok.
Anton led a two-year search for a new ACC location and, as a member of the facility committee, helped find a construction manager. He later served as chair of the facility committee.
Braving a harsh economic environment, Anton was a co-chair of the ACC's Signature Event in November 2002 and solicited corporate and individual support. This event raised $275,000, the greatest amount raised in a single event in ACC's history. Today, he continues his involvement, working to identify potential board members through his participation on the governance committee and helping to lead the executive committee.
William E. Conway
Cleveland Botanical Garden
Heralded by Mayor Jane Campbell as a one-of-a-kind majestic attraction, The Cleveland Botanical Garden is a 73-year-old nonprofit public garden in University Circle.
The garden's board adopted a Vision 2004 plan in the early 1990s to transform the garden into a year-round center for education, environmental preservation, community outreach and recreation. As a board member, beginning in 1998 and as 2001-2002 board president, Bill Conway has played a major role in making the ambitious vision a reality.
The rejuvenated garden and expanded facility opened July 15. They are expected to attract 400,000 visitors each year and bring an additional $20 million into the local economy.
As the developer of Sandridge Golf Course, which earned the coveted designation as an Audubon Course, Conway understood the importance of vision. As CEO of Fairmount Minerals Ltd., he understood the changes needed to sustain the growth envisioned by the board. As a corporate executive and trustee of a family foundation, he understood the board's responsibility to investors.
Known as a senior statesman within the business community, Conway gave credibility to the changes that needed to be made at the garden and served as a leader to encourage financial support for the $50 million Campaign for Cleveland's Garden. He worked with the garden's directors to develop an administrative infrastructure and install policies to ensure sound financial management.
He also worked to restructure pension plans and health care benefits to accommodate a fivefold increase in the garden's work force and to provide for the long-term security of the employees and the institution.
The garden has grown from an organization with a $1 million annual budget and 20 employees to one with a $9.8 million annual budget and more than 100 employees.
Alexander M. "Sandy" Cutler
United Way Services
One of Alexander "Sandy" Cutler's colleagues recently said Cutler was "dialing for dollars again this morning" while making calls seeking gifts to United Way's 2003 campaign. This was said in jest, but it's evident that the dedication of the Eaton Corp. chairman and CEO to United Way Services includes more than just serving on committees.
Even before relocating to Cleveland, United Way played a role in Cutler's life, and for the past eight years, he has been active in the volunteer-driven organization that privately funds health and human services in Cuyahoga and Geauga counties. Cutler, who serves on United Way's board of directors and is chairman of the organization's 2003 campaign, began his United Way work serving on the organization's strategic planning committee.
He soon agreed to chair United Way's Scorecard project, which has since been institutionalized and refined to produce quarterly findings against objectives and quantifiable targets.
As chairman of the aggressive 2003 campaign, which has a goal of $50 million, he calls for new approaches to address new challenges. Instead of starting with last year's totals and factoring out losses from one-time gifts, Cutler worked with his campaign committee to set a "top down, not bottom up" goal, with a 12 percent goal increase to meet growing community needs.
Eaton Corp. provides matching dollars through its charitable foundation, using a formula that provides 50 cents to 55 cents on the dollar for United Way giving, as well as for education, arts and cultural entities. Demonstrating his personal engagement in the campaign success, Cutler pledged Eaton as an early pacesetter, running its campaign during the summer.
The team set a goal of $1.35 million, including employee giving, corporate gift and special events. As of early September, Cutler reported Eaton was exceeding the goal and had reached nearly $1.4 million, a figure that was still growing.
The Littlest Heroes
Anthony Fatica is owner of AMG Advertising and Public Relations, but he also serves as board chairman of The Littlest Heroes, a nonprofit that provides free spiritual, emotional and psychological support services to Northeastern Ohio children with cancer.
Fatica is responsible for and directly affected by the substantial monetary and nonfinancial contributions made to The Littlest Heroes both personally and as a corporate business owner. He donates the use of his 25-plus professional marketing and public relations staff to The Littlest Heroes with no restrictions.
His company provides Web site design, production, hosting and continual updates, and has donated more than $40,000 in Web site services alone. Donated marketing and public relations services -- averaging $3,000 to $6,000 per month -- help enhance community awareness of The Littlest Heroes' efforts.
Fatica also was responsible for the success of The Littlest Heroes' Inaugural Golf Outing at Signature of Solon last July. AMG donated $5,000 as a corporate sponsor, produced signs for the event and purchased nonstaff produced signs valued at more than $3,000. He pursued committee involvement, recruited five corporate sponsors and one-fourth of the attendees, recruited five substantial auction items and personally donated other auction items.
Fatica is always ready to lend a hand during special events. During last August's Cleveland Browns Foundation pregame celebration, which included families served by The Littlest Heroes, he was asked to represent the organization in place of its executive director, who was out of town.
Not only did he attend, he purchased and produced T-shirts for the family members and arranged for media and photo coverage of the celebration.
Thomas D. Ganley
Crime Stoppers of Cuyahoga County Inc.
Tom Ganley understands the meaning of the phrase "giving back to the community."
The CEO of Ganley Auto Group serves on the boards of directors of Independence Bank and Boromeo Seminary, chairs the fund-raising committee for St. Peter Chanel High School and acts as spokesman for the "Buckle Up Cleveland" seat belt campaign. He has also funded an inner-city youth basketball team, coached by Cleveland Police Commander Marvin Cross. The team competes in several cities and came in second place in its league in the United States last year.
Ganley also serves as chairman of Crime Stoppers of Cuyahoga County Inc., a nonprofit that provides cash rewards for anonymous tips that result in felony arrests. Through his work with Crime Stoppers for the past four years, he has added a number of prominent corporate citizens to the board of directors and increased the number of rewards from 15 to 20 each month to 60 each month.
He was also instrumental in the publishing of weekly crime accounts in Sun Newspapers.
Bowers, president and founder of Service Sales Institute, and a former executive and economics professor, has spoken to thousands of CEOs and at trade associations and corporate conventions, flustering decision-makers with his take on the future of business.
Like a corporate Dr. Phil, Bowers has a home-spun business sensibility that shocks and goes against long-standing business traditions. But there's something about what he says that rings true.
According to Bowers, the business world has changed and the focus has moved from being on how we sell to consumers to how consumers buy products.
And this leads directly to the Internet.
"To deny e-commerce is to deny the telephone ... The Internet is where (products and services) are going to be bought and where you need to learn to buy," Bowers says. "Your buying skills will be your competitive advantage."
He says a company's No. 1 management team member should be the head of the purchasing department because that person's buying skills can lower the company's fixed costs.
Selling to consumers
To find the lowest prices, consumers are researching products online before they buy. Since customers don't need to be "sold" in the traditional sense anymore, Bower says some companies can lower fixed costs by eliminating their sales force.
"(CEOs) aren't willing to come to grips with the fact that the salesperson isn't necessary," he says. "The customer's decision has already been made. Take the cost of the salesperson out of the way."
Bowers adds that when companies get rid of salespeople, they do away with the cost of sales, salaries and commissions. The costs of travel and entertainment that went hand-in-hand with sales are also erased when companies do business online. Why pay for an afternoon of golf or dinner at a fancy restaurant when the customer already knows what he or she wants to buy?
"In a purchase economy, you need to take the cost of the relationship out of the equation," he says. "You have to turn from a selling company to a negotiating company."
Value-added is a concept that adds services to a product, and it sounds good in theory. But Bowers says most businesses that offer value-added services have to raise prices so much that they take themselves out of the equation when consumers compare prices. "It will drive more businesses under than any other concept ... It's a death spiral," he says.
He suggests companies simply offer their product at the lowest possible price. If customers ask for additional services, tell them up front they will have to pay for them. Bowers calls this "unbundling."
He says companies should offer customers "just enough" -- not more and not less -- so the customer chooses that company over another.
Winning the game
To win a sale, CEOs should focus on their company's marketing and branding rather than on cold-calling, Bowers says. And after the customer chooses your company as its supplier, focus on providing top-notch delivery, logistics and follow-up.
The key to re-engineering a company, Bowers says, is to provide products better, faster and cheaper than its competitors.
"The game has changed," Bowers says. "It's a cold, hard, cruel world. It's called competitive business." How to reach: Service Sales Institute, (704) 365-0542
The eight worst manager types
We've all had them -- bad managers. If you've ever wanted to put a name with the bad behavior, Gary S. Topchik can help, with "The accidental manager: Get the skills you need to excel in your new career."
In his book, he outlines the particulars of each type of bad manager.
* Noncommunicators: Aren't interested in exchanging ideas; secretive; have a closed-door policy; avoid holding meetings; walk as if in a trance
* Management knockers: Ridicule their role; tease higher-ups that they aren't doing "real work." The company could do better with managers who are respected by their teams.
* Task mongers: Micromanage and expect everyone to agree with their unilateral decision-making
* Best friends: Ignore when procedures aren't being followed; avoid confrontations; don't take anything too seriously
* Limelight takers: Like being the center of attention; take credit for their department's success; seldom give credit to deserving employees.
* Wafflers: Procrastinate; ask for others' opinions; become busy with other projects to avoid having to make decisions
* Braggarts: Genuine braggers know quite a bit and are entitled to some bragging rights; others tell everyone how great they are when, in reality, they aren't.
* Deceivers: Don't want to face company issues, don't know what is happening and need to respond in some way, or like to see others' emotional reactions
Hattie Larlham Foundation
George Chandler II, director and executive chairman of Sky Bank Financial Group and Sky Insurance, has been board president of the Hattie Larlham Foundation for 17 years. The foundation's fund-raisers allow Hattie Larlham agencies to care for children and adults with severe and profound mental retardation and medically fragile conditions.
Admired for his business sense and generosity, Chandler is committed to advocacy, charity, volunteerism and service. He is described as the kind of man who spends five hours sealing invitations to a fund-raiser to make sure they go out on time and as the embodiment of excellence in board leadership.
Katherine C. Pender
Therapist Katherine Pender, president of the Beech Brook board, has spent more than 40 years sharing her professional skills and supporting this organization. Last year, Beech Brook celebrated 150 years of providing effective, innovative services for children and families in Cleveland.
Following the death of their adopted son, she and her husband, Jim, established a foundation in his memory, which supports children's organizations. The couple sponsored a Beech Brook exhibit and video at the Western Reserve Historical Society, and Pender was co-chair for Beech Brook's Hearts of Hope Gala, which surpassed its goal of raising $150,000 for the agency's adoption program.
Fred Rzepka, president and CEO of TransCon Builders, has been Cleveland Metroparks' commissioner since January 1987, making him the second-longest serving commissioner in the parks' 86-year history. His business expertise and community passion have positioned Cleveland Metroparks as a distinguished U.S. park district, which received the National Gold Medal Award in 1995 and 2001 for excellence in park and recreation administration.
Under Rzepka's leadership, Cleveland Metroparks adopted a 1995 plan to expand and enhance services to Cuyahoga County and Hinckley Township. That same year, voters endorsed a $100 million, 10-year tax program for the Metroparks with 75 percent approval.
Gary S. Shamis, CPA, M.Ac.
North Coast Community Homes Inc.
SS&G managing partner Gary Shamis became involved with North Coast Community Homes 19 years ago as an outside accountant and auditor for the agency. His interest in NCCH stems, in part, from a brother with disabilities who died after years of care in an assisted living facility.
Shamis turned over his responsibilities to another firm in 1997 and joined the NCCH board. Under his trusteeship over the past six years, NCCH has doubled its number of trustees, developed new properties, initiated a volunteer program, expanded its community outreach and increased the number of contributors and size of their contributions.
Robert C. Smith
Greater Cleveland Growth Association
With his experience as chairman of the Council of Smaller Enterprises, Robert Smith brings a fresh perspective to his role as chairman of the Greater Cleveland Growth Association. The president of Spero-Smith Investment Advisers Inc. is also the first Growth Association chairman to come from small business, which shows his ability to connect businesses of every size in the region.
Smith has played an important role in bringing Team Northeast Ohio to life, and during his chairmanship, the Growth Association was named "Best Chamber in the Nation" and honored with the 2002 Award of Excellence from the National Association for Membership Development.
Jerry Sue Thornton, Ph.D.
Cuyahoga Community College Foundation
Not only is Dr. Jerry Sue Thornton president of Cuyahoga Community College -- the largest community college in Ohio -- she is also the director of the Cuyahoga Community College Foundation.
Through Thornton's strong leadership, the foundation has completed its first major gifts campaign, raising more than $20 million for program development and student scholarships.
Thornton has forged partnerships with numerous local and national organizations, including National City Corp., American Greetings, NASA, The Cleveland Foundation and W.K. Kellogg Foundation to support projects such as the Center for Nursing and Health Careers, High Tech Academy and Visual Communications Center of Excellence.
Many more are living with the disease and are unsure where to receive support for themselves and their families. Kelly Tomblin, executive director of Stewart's Caring Place, is working to relieve that problem. Currently working from two donated office spaces, she is planning to open a one-stop wellness center in Akron in May 2004 in memory of Dr. Stewart Surloff, a beloved community leader who lost his battle with cancer in 2001.
Although Surloff had the financial means and the support of friends and family, Tomblin says it was difficult for him to find one place to go with his wife and daughters to deal with the impacts of cancer. Stewart's Caring Place is being designed to provide services free of charge to cancer patients and their families to supplement their medical attention and round out their holistic mind-body-spirit care.
Proposed services include a resource library; peer, children and spouse support groups; an educational series; bodywork; creative expression; yoga; meditation; bereavement counseling; and babysitting.
The program has a first-year operating budget estimated at less than $300,000 and its search for a location to house Stewart's Caring Place is ongoing.
Smart Business spoke with Tomblin about the difficulties of starting a nonprofit in these tough economic times.
With health care costs rising, how will the services at Stewart's Caring Place help fill the gap?
At Stewart's Caring Place, we want to look at an integrated approach to the impacts of cancer. While we will not be able to fill in the gap of chemotherapy and medical care, for instance, we can fill the gap with regard to information.
With medical care pressures, there often isn't time to talk about what it means to have cancer, the different types of cancer, what it means when they say you have breast cancer in level 4.
We help people sift through the information and make choices about what they want that health care to be. We supplement and complement the medical care through services that address emotional, social, psychological and physical needs. ... These concepts have been tested at centers like The Gathering Place in Cleveland, the national Wellness Community organization and Gilda's Club.
How do you raise funds in the current economic environment?
Dedicated people give their time, but more importantly, give their money and ask other people to give theirs through private networking. We do publicity and advertise in the Akron Beacon Journal. We have several committees, including a community outreach committee with an interfaith council.
We're also sending out a little army to make presentations to corporations. Our soft fund-raising includes foundations and small events, but person-to-person solicitation really gets people to understand this need.
The IRS recently recognized Stewart's Caring Place as a 501(c)(3) company, retroactive to June 5. What does that mean for your organization's future?
People won't be concerned about giving big donations because the contributions will be tax deductible. Foundations have wanted us to apply (for funding), but we couldn't do it before because they required a 501(c)(3) determination.
Why do individuals and businesses contribute to Stewart's Caring Place?
Cancer has impacted them and they want to create a home so their experience of isolation and confusion isn't repeated. Also, a lot of people knew Stewart Surloff, and they want to support his memory and his legacy.
For a lot of people, supporting this project is appealing because there seems to be an obvious gap in a community that has so many services and so much going for it. Other people like the idea that we're looking at people's health as a mind-body-spirit experience.
The American Cancer Society supports us wholeheartedly and is helping with our research needs. We're reaching out to Visiting Nurse Services, hospice and all the hospitals. We're starting to work with the nutritional and therapeutic communities. We have oncologists and therapists on our board and advisory committee.
I also volunteer at The Gathering Place in Cleveland because I care about it, and it's given me great insight. Eileen Saffran, their executive director, acts as my mentor, which has been invaluable.
Where will Stewart's Caring Place be located?
We're trying to figure out the best place to settle that has the best price we can afford because we intend to lease for a year or two before we buy. We should have that determined by the end of the year.
We want our facility to be wheelchair accessible and on a bus line. We need a flexible space for all of our services; just having an office space won't work. We need 3,500 to 5,000 square feet.
Anything else to add?
I'm surprised how generous the Akron community is with their time and money. I have learned how pervasive cancer is, how people have dealt with its impact and how they are willing to give back from that experience.
Many of our volunteers have had cancer; they tell me it's a healing experience to be involved in this project, and that makes us very happy. It's an honor to hear what they've gone through and how they've emerged on the other side, and it's a privilege to be involved with it. HOW TO REACH: Stewart's Caring Place, (330) 835-0014 or www.stewartscaringplace.org
According to Ray Dunkle and Paula DiVencenzo, senior managers with Bober, Markey, Fedorovich & Co., there are key economic and psychological factors business owners must face when deciding the proper compensation for family-member employees.
DiVencenzo says the emotional component of these situations makes it harder to place a value on family member compensation relative to that of other key employees, so it's best to start with what the market pays.
"If you follow the market approach and those key employees know about your compensation structure, they know that any family member coming into the environment is working at market rates," says Dunkle.
Dunkle suggests investigating market rates by contacting an industry trade organization or using a salary survey, like those the IRS uses from Economic Research Institute. These numbers will give a base line for compensation levels.
Another problem DiVencenzo sees is when one family member employee is being paid too much while the owner is being paid too little. Businesses can find themselves in trouble for that and other reasons regarding overpayment and underpayment, and a lot rests on how the company is organized.
To avoid paying more taxes, C Corp owners pay out more in wages and less in dividends and distribution, which are taxed twice -- as a profit by the company and as income by the individual. But this can send up a red flag for the IRS and signal an audit.
S Corp owners attempt to let more income flow through and take less compensation, which also causes the IRS to take notice.
"With S Corps, most of the time, the IRS will come in and say, 'You're being undercompensated.' And on a C Corp, it's the opposite," says DiVencenzo.
Constantly monitor and re-evaluate compensation packages in order to stay within IRS standards.
Sometimes bringing a new family member into the company creates a great opportunity to re-evaluate the compensation packages of current family and other key employees.
"What they need to be concerned about is, there is good chance there will be some resistance to change," says Dunkle.
On the other hand, equal pay can create a sense of teamwork among family members.
"For example, you have three siblings working for Mom and Dad," says Dunkle. "They all know they're getting paid the same. No one feels slighted; no one gets a big head because he or she is getting paid more. They're all in the same boat, so they work together."
The downside is that not all siblings are motivated to the same extent.
"If you do have equal pay, and some people are working harder than others, that can definitely create some animosity," says Dunkle. "Having a bonus system in place to make up the difference in effort can make sense for family business owners."
The most important step for owners of family companies is to develop a compensation philosophy that articulates what they believe. That philosophy should be shared among the employees, especially among the family members.
"Whether their compensation philosophy is geared around generating profits for the business or to reward productivity or to fund the next generation, communication is key," says Dunkle. How to Reach: Bober, Markey, Fedorovich & Co., (330) 762-9785 or www.bobermarkey.com
Debby Bleier, vice president of development and executive chef of Woo City Ice Cream, says finding the right celebrity to endorse a product is all about making a good match. That's why she chose Wally Amos, formerly known as "Famous Amos," to represent her line of handmade ice cream, sorbet and tofu desserts.
Using a product spokesperson has a long tradition in the retail market, but as much as a good spokesperson can be a credit to a brand, those relationships can also backfire.
"For example, you may not want Mother Theresa to do a cigarette commercial," Bleier says. "It's important for the celebrity sponsorship to make sense with the product, that the celebrity and the company support each other. You have to know that the celebrity can carry you to the next level, and you have to be aware of your company's responsibility to the celebrity."
Tracee McAfee Gates, president of Diversified Concepts, which represents Amos, says a celebrity spokesperson must believe in the product he or she is endorsing.
"When the occasion arises, they should talk about the product that they represent. They should also be responsible to the company they represent with their good reputation and behavior," she says.
Over the years, she has discovered that once celebrities start promoting a brand, they often look for other products to endorse, especially if there is a backdoor incentive.
"They get very excited because now they're involved in an entrepreneurial venture versus a production venture," she says.
McAfee Gates says there are several ways celebrity sponsorship promotes company growth.
* It raises brand recognition. "It opens opportunities to network in areas you haven't thought of before, because celebrities have networks of friends and fans."
* It gives credibility with vendors. "If you call a vendor and say, 'I need something special done (with a product they have)' -- you might get some resistance. If you call and say, for example, 'I've got (this celebrity) working on this project,' it steps up your vendors to a new level and gets a lot more respect."
* It receives more attention. McAfee Gates says shopping channels are hungry for brands with celebrities attached. "You definitely get easier access to the press if there's a celebrity attached to a product."
McAfee Gates says celebrities are more entrepreneurial today than they used to be. They spend more time promoting brands on home shopping channels because it's a way to generate income that's not as brutal or grueling as shooting films or television shows.
"I believe in the power of celebrity," McAfee Gates says. "Television marketing is a huge opportunity today, and I think more people and more companies need to know about it." How to Reach: Diversified Concepts, (330) 477-2100; Woo City Ice Cream, (330) 262-2435, www.woocity.com
Celebrities of all types appear on the small screen day and night, promoting their signature cookware, exercise equipment, makeup, designer clothing and more. Tracee McAfee Gates, president of Diversified Concepts, offers tips for getting a celebrity to endorse your product.
* Don't give up. "If you ask them to promote your product and they say no, they might say yes six months later -- so be persistent," she says.
* Be prepared to educate the celebrity. "Don't take your product to the celebrity and say, 'Pitch my product.' You have to show how it benefits that celebrity, as well as your company."
* Have a cohesive plan. "Don't just toss your product out there. Make sure that you've thought long and hard about all of the details -- what their reimbursement will be, how they'll be taken care of when they are traveling on the road, what are your expectations of them. Remember to focus on the whole image and what you're going to try to build with them."
* Get them involved. "Make it a team effort versus, 'We need you for our product.'"
* Don't treat them like a piece of what McAfee Gates calls talent meat. "Most celebrities don't like to think they're a mouthpiece or a spokesperson. They like to think that they're part of the brand or a part of the company, and it's their choice to endorse the product."
He'd been speaking to attendees nonstop for two days, his pockets were overflowing with business cards handed to him by professionals he'd met during this conference for African-American executives and entrepreneurs -- and there was still another day to go.
You'd think he'd be exhausted after all the handshaking but when he explained the importance of networking in the life of a corporate mover, his burst of energy revealed his passion for his work.
"Businesspeople spend 14 percent of their time developing relationships at work, home and community," he says. "Successful businesspeople spend 54 percent of their time developing their relationships at work, at home and in their community."
Fraser is the author of "Success Runs in Our Race: The Complete Guide to Effective Networking in the African American Community" and "Race For Success; The Ten Best Business Opportunities for Blacks in America," and the creator and publisher of "SuccessGuide, The Networking Guide to Black Resources."
After spending 17 years in management with Procter & Gamble, United Way and Ford, he has learned that business deals are made first on an emotional level, then backed up by facts.
"The deciding factor when doing business is, who do I like the most," he says. "You have to be nice to people, you have to smile and treat everyone with respect. You have to network up and down the chain -- from janitors to chairmen, everyone's important."
Fraser has traveled the world, speaking to about 150 groups per year, from college students to corporate professionals. He says most decision-makers tell him the hardest part of business is networking with someone you perceive can't help you.
"How do you know a person can't help you? You have to respect everybody," he says. "Building a relationship is not a waste of time on any level. Relationships can occur almost anywhere. I have formed relationships standing in an elevator."
As founder of FraserNet, an online community of the African American networking movement, Fraser recommends conferences and workshops as perfect opportunities to network. But he says many businesspeople attend without planning ahead -- they may know the topic but have no idea who will be speaking.
"You need to know who's going to be there so you can meet those people," he says. "I suggest volunteering to work at the conference, for example at the registration tables, so you can get inside access to people you might not normally get a chance to meet."
He also stresses the importance of flexibility when attending a business conference.
"My advice is, don't go to a conference with 57 buddies," he says. "An opportunity may come up to connect one-on-one with someone of a like mind, and if you have to drag 57 buddies along, you'll have a problem. If you go to a conference by yourself, you'll have more flexibility if the opportunity presents itself."
Above all, Fraser believes decision-makers should put more emphasis on effective networking because "life is about relationships. If you have no relationships, you have no business." How to reach: FraserNet, http://frasernet.com
Ford's "Virtuous Circle"
Ford Motor Co. founder Henry Ford had a controversial idea in the early 20th century -- equal pay for equal work.
It was a concept that encouraged the migration of African-Americans from the rural South to the industrial North. George Frame, executive director, dealer development at Ford, says creating a diverse work force is an ongoing goal at Ford through its two-tiered program.
He says through Ford's 300-plus minority suppliers in the United States, it sources $3.2 billion in goods and services, which is the first tier. For the second tier, those suppliers source $1.2 billion in goods and services to other minority suppliers. This equals $4.4 billion in the hands of minority suppliers .
"We haven't lost anything by funding these programs; we've created an industry of individuals who take profits from their business and then hire people from their communities who spend money in their communities," Frame says.
He calls it "The Virtuous Circle."
"It's about reciprocity, reinvesting in the community, keeping money in minority communities and creating wealth. Many companies are waking up to the fact that the economic boom will come from ethnic minorities," Frame says.
Ford understands that. Minority dealers make up 5 percent of the industry average; at Ford, 7 percent of dealers are minorities. That's 370 dealers and more than 39,000 jobs.
Ford teamed up with FraserNet for the "Empowerment Through Entrepreneurship" symposium at the second annual PowerNetworking Conference in Cleveland. This is the fourth year Ford has showcased this symposium at an African-American regional convention. How to reach: Ford Supplier Development programs, www.fordmsd.com; Ford Dealer Development programs, www.dd.ford.com
If you were a jet pilot who just learned that there was a nuclear device on board and the jet would blow up if you landed it, how would you react?
That is one of the hypothetical questions that Kevin Hell’s interview team at DivX Inc. asks potential management employees, and Hell says the boldness of the candidate’s answer speaks volumes about that person’s character.
“We need to be able to think creatively and boldly about where the market can go because we are pioneers as a company in this space,” says the CEO of the 341-employee company. “From a leadership perspective, we’ve got to be able to look at things completely fresh and not accept certain things. That’s an important aspect in the leadership team.”
Hell, whose digital media company posted 2007 revenue of $84.9 million, has assembled a leadership team whose experience levels and skills represent every area of the company.
Smart Business spoke with Hell about how to organize your managers to move your company forward.
Combine experience and fresh thinking. We have a mixture of a couple of guys who’ve been here from nearly the beginning and some new leadership that has joined more recently over the last year or so. It’s a good combination of deep knowledge of the space and continuity, plus some new folks who really have some tremendous world-class backgrounds.
It gives our company the best of both worlds. Having people here who’ve been with the business from the very beginning — and who know all the ins and outs of the business — is very helpful, but also bringing in some new talented management, as the business scales, allows us to continue to improve our processes and the overall focus for the company.
Do your homework. Over time, we’ve added more members to the team and did some specific searches around bringing in people who had the right background. It meant finding people who had the right cultural fit. Culture is a very important part of what makes a company successful.
We have a cultural part of the interview process. We bring some folks in — and they can be fairly junior people in the organization — that are trained to do cultural interviews to assess the fit aspect. We’re looking for certain dimensions and certain attributes that the interviewees will have that are similar to what we do here.
Being able to work as part of a team and being bold and willing to take risks, these are the things that we look for in individuals that make this a successful place over time. We ask a variety of questions about how people approach life in general to try to get to how they think about culture, and it’s worked pretty effectively.
Make teamwork your priority. One of the most important things is being able to work as part of the team to achieve a higher goal. That’s one thing that I hold very high just because it makes us successful. If people are thinking about how we as a team can succeed, versus how the individual can succeed, it makes a big difference in terms of the outcomes.
Teamwork is incredibly important. When I see people working together to solve problems, we can do a lot of stuff. When people are working against each other, it prevents us from moving forward. You can spend a lot of energy internally not moving forward.
We’re in a business where we’ve got some big competitors — Microsoft and Apple — so we’ve got to be able to react quickly. It requires a concerted effort, and we all need to be going in the same direction with a clear vision and clear teamwork.
Look for brain power. The other thing that we look for in the cultural interview is just a certain amount of pure smarts and competence. We have to be able to manage a fairly complex ecosystem and to make a market, much like Microsoft did in the early days.
Being able to do that requires some pretty smart people, and so all of the management team needs to get our business and understand the complexities of our business. Above and beyond just generic management skills, it requires people who are very smart.
Balance boldness with accountability. As a pioneer and as a leader, we’re solving a problem that nobody else has solved yet, and we’re trying to create this interoperable ecosystem of devices that allow you to consume digital media.
To do that, we’ve got to be able to think creatively. We’ve got to be able to think dynamically about the market, and that requires a certain breed of individual to be successful.
The company’s leaders need to understand the complexities of the market we operate in and how the market will respond to various things that we’re doing. It requires judgment and a deep understanding of the market. If a job candidate has those things, then that person is better able to take smart risks ultimately so that they pay off.
One thing we can do is take a risk, but then, do we actually execute properly to give the risk the best chance of being successful? That’s been a big emphasis for us as we’ve continued to mature and get larger as a company.
HOW TO REACH: DivX Inc., (858) 882-0600 or www.divx.com
Jan Cetti, who serves as president and CEO of San Diego Hospice and The Institute for Palliative Medicine, says good business leaders, like orchestra conductors, know the score, get the right talent in the right seats, inspire people to achieve their best and then ensure that all the applause goes to the soloists.
“The job of the leader is to make sure that we have a common, shared vision of what we’re trying to do in this business — what’s the purpose?” she says.
With a 2007 budget of $76 million, the organization’s 800 employees and 500 volunteers serve more than 1,000 patients a day throughout San Diego County.
Smart Business spoke with Cetti about how to adapt your management style to fit the issue at hand while maintaining a steadfast vision.
Be a situational leader. As a situational leader, you’re really mixing up the different styles according to what people need. It’s being able to be flexible — whether it’s a telling style, a selling style, a participating style or a delegating style — so that it’s not stuck in one style.
I’ve been with this organization for 12 years, but I’ve tried to develop that style over the past 20 years or so. I’m really interested in organizational theory and organizational development, and I read a lot about management and management styles.
Being a situational leader is a comfortable style for me, in that it allows me to stay on my toes in terms of what’s needed, making sure that I’m using the right style, getting the best out of people and keeping the business on track.
Balance flexibility with constancy. What keeps the situational style from being confusing is that there’s a great predictability around principles. It’s important for people to know what they can count on from the CEO.
The employees understand the principles of how the business is being led and how we deal with the people and the customers in the business. It becomes very predictable, and employees can be free enough to make decisions and know that those decisions will be supported because they are in alignment with the philosophy.
It’s having that constant, ‘This is what we’re going to do, and these are the principles by which we do it.’ All of that gets set out in terms of the organization’s mission, purpose, vision and direction — all of the common things that people can depend on.
Situational leadership works because you’re not just swaying all over the place without any kind of plan or boundaries. You’re trying to get the best out of people, depending on a particular task, and making sure that the direction that you’re giving is correct.
Stay focused on your goal. As the leader, you know what your destination is or what you’re trying to achieve. If you’re on the road and you run into traffic, you’re able to alter the route a little bit, and your employees don’t think you’ve abandoned the overall goal of where you’re trying to go.
You have to have that constancy around the purpose; that is a nonnegotiable skill for leaders in business. You’re just not going to get anywhere if you don’t set the direction right and make it known to everybody.
I’m a believer that your strategic plan needs to be very alive. It should be a very short document that clearly talks about these elements: the goals, values, mission and purpose of your organization.
What you have written down is one thing, but what you live is the most important thing, and that’s day-to-day and in every way. That’s the way you make your plan live within an organization. There’s that constancy around, ‘This is important, and this is why.’
Practice your art. The style issue is really the art of management. You can read about all the different theories — that’sthe science of management — but when you apply it, you’reable to be eclectic. You’re able to pick and choose the different styles in order to be effective. That’s sort of a continuous learning process for leaders.
So much of leading and management is learning. I’ve often said it’s a hobby of mine, but it’s also a passion — how people work in organizations, how people work together, how leaders bring out the best in people to accomplish the goals of the business. My advice to other leaders would be to constantly learn.
A lot of times, there’s some stretch in your vision. You’re not dealing with exactly what things are today; you want to have that dream able future of what you believe could be the maximum that you could achieve in this business.
You have to get your vision to where you can inspire people by talking about it. People have to understand the vision so they know what their job is and how it fits with what you’re trying to do for the customers, what you’re trying to do for the future and how to get the business to thrive.
Building the shared vision is communicating your goals, values and mission so they become so deeply ingrained and shared throughout the organization that it binds people together around a common identity, a common sense of destiny and a shared picture of the future.
HOW TO REACH: San Diego Hospice and The Institute for Palliative Medicine, (866) 688-1600or www.sdhospice.org