Paul R. Harvey

Friday, 26 October 2007 20:00

Business process Rx

A business process is a lot like driving to work. You’re trying to get from point to point in the most efficient manner but traffic, construction and detours often hinder your trip. Having a road map and navigation technology can help manage the trip.

Business process management, or BPM, is about making critical business processes more agile and efficient by improving or automating these processes.

“There are a lot of business processes that are not addressed by the way of their ability to be improved or automated,” says Bill Russell, executive vice president, Allegient. “The emerging business process management tool kits are targeted at that.”

Smart Business spoke with Russell about how the emerging BPM tool kits are improving business process performance and making a significant difference in closing the gap between a company’s business and IT sides.

How do you define BPM?

In its broadest context, BPM refers to a management discipline targeted at improving business performance or agility by understanding, improving and reporting about or controlling the business process environment. That includes the application of technology in order to automate parts of it, including workflow and business rules. It’s a business-process-centric solution model.

How is BPM success measured?

It’s measured by improved business performance or business value, and that usually translates into a set of key performance indicators (KPIs). In other words, you have to be able to tell yourself how your business is running. BPM gives better insights as to the how or what a company does or is actually operating, which then leads to improvements like cycle time reductions, cost reductions, higher output and greater innovation.

If mapping identifies areas for improvement, what are the next steps?

Process-mapping is about the as-is or current state. Modeling exercises define the tobe or future state or how you might improve a process. You then need to implement those improvements and make sure there is a feedback mechanism that measures how those improvements are doing and your ability to control them. Now you can evaluate emerging tool kits or automated technology to implement the improvements.

Where are the biggest opportunities for BPM and the new tool kits?

BPM is really a big step forward for all businesses. Big companies typically already have implemented a business process improvement method, such as Six Sigma or Total Quality Management, but not necessarily applied technology yet because of cost or technical constraint. BPM is effective for the types of processes not addressed by the big, static software systems that people have put in traditionally. There are a lot of business processes not yet automated by older software systems or unaddressed by technology in small- to mid-size companies. BPM introduces new technology capabilities by way of integrated tool kits that make it possible to address these manual processes.

What are tool kits?

Tool kits are a collection of integrated engines that form a base platform. There’s an engine for mapping, one for modeling or optimizing, and one that can take the model and convert it to a software language and then to a module of software code that can actually be executed. Also included is an engine for reporting the metrics of how a newly executed process is actually operating and the results that come out at the end.

Why are the new tool kits gaining popularity?

One of the reasons BPM is getting so much traction is because of the emergence of a new class of tool kits called Business Process Management Suites. They’re not vertically oriented, so any company can buy them and configure them according to its industry or needs. They are fairly generic in that they can address a wide range of different business processes. But the biggest reason is that they are being built to an emerging set of standards. As examples, the modeling standard is called BPMN for business process modeling notation. The language it gets converted into before software code is called BPEL, or business process execution language. When the tool kit has to hook into other systems and other data, it uses as its integration layer a set of Web services standards like XML.

Who initiates and implements BPM?

Both the business side and the IT side collaboratively should be involved in the initiation and the implementation. The business side should own it, but they need the help and assistance of the IT organization for two reasons. First, whenever you do BPM, the business side provides the knowledge around the workflow and the business rules. But the IT side can provide the information that may come out of other systems or the data model that’s required to really support that process. Second, IT can guide whether or not you should apply new technology against either the improvement or the business process itself. In reality, BPM and the emerging tool kits are forging a new collaboration between IT and business, closing the gap that’s prevalent in many companies.

BILL RUSSELL is executive vice president of Allegient. Reach him at (317) 564-5701 or

Friday, 26 October 2007 20:00

Leading-edge leadership

Today’s preeminent leaders are beginning to look far beyond just their organization’s bottom line.

Such a narrow vision neglects a number of key issues that might differentiate a company from the rest of the pack.

“Because of the continually changing landscape in which organizations operate, the need for transformational leaders is more intense than it ever was,” says Timothy S. Mescon, Ph.D., dean of the Coles College of Business at Kennesaw State University. “Leading-edge leadership is being embraced, and it describes an agenda in many organizations today.”

Smart Business spoke with Mescon about how a commitment to internal and external stakeholders and a drive for innovation and creativity is defining a new and necessary level of leadership in today’s organizations.

Is leadership getting a closer look in this changing business environment?

I think it continues to be interesting, provocative and one of the singular great challenges for the domestic and global corporate world. Leadership is a topic from an organizational perspective that will never go out of favor. Competitive global markets, changing demographics and the increasing complexities in the marketplace and in the corporate world are putting really unique challenges on C-level executives in organizations.

What are hallmarks of today’s finest leaders?

First, I think what is driving many great organizations today is a commitment both internally and externally to their key stake-holders. That starts with employees first, and then obviously with customers and the supply chain. If you’re not taking care of your own employees initially, then those issues will reflect externally, as well. I think great leaders are certain to take care of their own employees early on. Additionally, the best leaders today have recognized that communication must occur on a right-to-know basis versus what historically has been a need-to-know basis. Great executives hide little — it’s all about collective decision-making and focus, and I think that characterizes great organizations today.

The intense focus on stories like Enron and WorldCom that impacted both employees and public stakeholders have raised new issues around integrity, candor and transparency, and these have become hallmarks of today’s great executives.

How can leaders break away from textbook skills and forge new initiatives?

There’s a lot of focus and excitement in the academic venues around coursework and programming in innovation and creativity. For a lot of organizations, a continuous commitment to innovate and create — whether it’s with products, services or processes — will differentiate the world class from the also-rans. Academic programming and executive education programs are acknowledging that the great leaders today have this obsessive commitment to innovation and creativity.

There’s another dimension that has become incredibly hot among leading organizations today, and that is around the creative use of data. Companies are collecting data and information and using that to differentiate their organization in a tough, competitive marketplace. All of a sudden, historically mundane areas like market research and customer demographic studies have risen in their value to organizations. Obviously, the Internet provides much greater access to real-time data. But is the leadership in the organization poised to use that data effectively to morph its strategy, and then to respond to the needs of the market?

What are the key factors for leading by example?

Leadership must make sure it’s absolutely clear that the tone is set at the highest levels of the organization. An outstanding illustration of this is the transformation that has taken place at Delta Airlines. Departing chairman and CEO Gerald Grinstein has transformed an organization that was on a corporate respirator. He turned it around, recrafted its strategy, built employee and stakeholder commitment in the organization in the face of incredibly challenging odds, and did it in nanoseconds on a corporate timetable. He recreated this airline from a historically domestically focused airline to one where 50 percent or more of its business will depart on international flights. In doing so, he demonstrated all of the attributes of today’s great leaders: commitment to the organization that starts with the people in the organization, belief in the stakeholders and the role of their customers and suppliers, and the need to be innovative and creative and to use data effectively.

How do great leaders measure their success?

Ultimately, the barometer for many organizations is still an ROI and providing appropriate returns to the shareholders. But, I think today many more organizations are looking at multiple impact points. One very hot topic among corporate leadership is the social impact. Another impact point for appropriate industries is the long-term commitment to the environment. That’s another dimension where organizations are looking to move the needle in terms of positive impact. Third, you can never forget that classical metrics like financial metrics and market share continue to be hugely important to great organizations.

TIMOTHY S. MESCON, Ph. D., is dean of the Coles College of Business at Kennesaw State University. Reach him at (770) 423-6425 or

Sunday, 26 August 2007 20:00

Software application testing

Software companies are continuing their move toward decoupling, building component sets or services that work with other packages in a much more complex model.

“Testing is taking on an increasingly important role,” says Bill Russell, executive vice president, Allegient. “But a lot of companies minimized their testing competency while they were implementing the big, monolithic software packages.”

Smart Business spoke with Russell about how a dynamic testing strategy, the right team and the latest tools can lead to quality assurance and a seamless transition for end users.

When should application testing strategies first be considered?

The axiom around testing is the earlier you catch the defect, the less expensive it is to fix. Testing strategies should be considered as early as possible, and certainly when the requirements are being elaborated and as the design of the overall system begins to take shape. For more complex implementations, particularly those with a number of interfaces or conversions from an old system, additional testing is required and, therefore, you’ll need to start developing your test strategy even earlier.

What are the key components of an application testing strategy?

A test strategy is composed of very high-level, broad sets of guidelines that define how you’re going to conduct the testing. The different phases of testing are testing strategy, testing plans, test scenarios or test cases, test scripting, test execution, and test results management.

Test plans lay out the approach to take for specific components of the application, like the functions, integration, interfaces and conversion of old data. Each plan delineates test scenarios or test cases that represent the functionality, or system assurance, you’re trying to validate. Specific test scripts define what the tester will actually do, step by step, to validate that the software does what it’s supposed to do. Any defects discovered are handled through a test results management plan.

You can’t test everything. A test strategy and test plans are very much based around picking out which application or system parts are critically important and must be tested. If there are 100 different possible paths through a software package, with a much greater amount of permutations of resulting data, you can’t test all 100. So are you going to test 50? And if you are going to test 50, which 50 are you going to test? What is your acceptable risk?

Aren’t packages pretested by the manufacturer?

Yes, to some degree. They’re tested straight through the optimal path with everything working great; what we refer to as the happy path. But they’re not testing any client-specific configurations or any client-specific interfaces or data sets. That’s why planned testing is still required and very important.

What areas of testing cause companies the most pain?

Any kind of testing that’s not well planned because without a documented plan that defines what you are testing, it’s not going to be reasoned relative to the amount of risk. It becomes ‘guerrilla testing,’ where the enterprise doesn’t really know what has been tested and what has not.

Many companies also run into trouble when they don’t test for performance. They often test only the graphical user interface and say, ‘Is it working the way we think it should?’ You’ve got to do some performance testing to ensure the software will scale. Can it do 1,000 functions at the same time and continue to run? That’s how you identify your break points.

If testing exposes problems, how are they mitigated?

This is called test results management. Once the tester documents a defect, it is sent back to the software team for triage. They determine in which part of the code the defect occurred and assign it to a configuration software engineer, programmer or developer for repair.

The corrected code is then reintroduced, and at this stage it becomes critical to run regression testing to make sure the fix didn’t break something else. This can be onerous, so automated frameworks with testing tools can be applied to run some of those scripts. These tools also help keep track of the defects and trace them back to the requirements they didn’t meet.

How can software be tested with the least inconvenience for end users?

Optimally, you should establish an independent test environment that is separate from your development and production environments. Next, employ those testing tools to help organize and manage the testing process. A professional test team should be assembled to perform the functional testing, regression testing, integration testing and performance testing. Eventual users, in the final step of user acceptance testing, can also be tapped to catch anything the test team didn’t find and identify anything that doesn’t look right.

BILL RUSSELL is executive vice president of Allegient. Reach him at (317) 564-5701 or

Thursday, 26 July 2007 20:00

Healthy, wealthy and wise

The onus to supply quality health care seems permanently bestowed on employers, and surveys show employees consider it the single most important benefit.

“All employers are looking at ways to mitigate health care plan costs, and wellness is one of the best ways to keep costs down, keep claims down, and maintain a healthier population,” says Anne Carney, executive vice president, Hilb, Rogal & Hobbs. “A lot of people are talking about wellness, but not as many are willing to put the resources or funds behind it,” adds Martha Vinas, vice president, business strategy.

Smart Business recently spoke with Carney and Vinas about how a comprehensive wellness initiative in any company can help reduce health care benefit costs and create a healthier and more productive workforce.

What is driving health care costs?

Vinas: Individuals with chronic conditions typically generate 50 percent of employer health care costs. Data shows that 10 percent to 15 percent of those costs could be eliminated with better management. Heart conditions, lung conditions and diabetes always seem to top the list of high-cost claims that can be reduced with better management.

Carney: In general, 20 percent of plan participants drive 80 percent of the overall health care plan costs, usually due to those lengthy chronic conditions that have significant ongoing costs to maintain. In many of those high risk/high claimant costs are costs and conditions that came about through lifestyle choices like smoking, excessive drinking and poor eating habits.

How are wellness plans delivered?

Carney: Most health plans sponsored by national carriers have wellness programs included, such as health risk assessments, disease management coaching and complex case management. For plans that are fully insured, the claim liability belongs to the carrier, so it’s in the carrier’s best interest to keep their covered population healthy and well – and those same wellness programs are also offered to employers who self-insure their plans. Beyond that there are an increasing number of wellness vendors that offer a wide range of services; everything from taking biometrics and tracking individual participant’s health improvements, to sponsoring smoking cessation and/or weight loss programs.

Vinas: When you do your due diligence on selecting an appropriate health care package, you need to determine what kind of wellness programs are included so you’re not spending money on additional resources you may not need. Companies often overlook or don’t fully access and utilize these wellness resources. There’s also a wealth of online tools for employees.

How are companies enticing employees to participate in wellness?

Vinas: It depends on the size of the employer and the resources they are willing to dedicate for wellness. The most common incentive has become a reduction in payroll deductions for employees who participate in healthy behaviors; this lets the employee see a direct correlation between his/her behavior and their costs. We’ve also seen employers lower the copay, or eliminate it altogether, for certain medications for chronic conditions. Other creative initiatives include supporting fitness by providing pedometers and using online tools to track exercise or simply changing the vending machines in the cafe-teriato include healthier items.

Carney: Wellness committees, especially when they are made up of a cross-section of employees – can also help design and promote appropriate campaigns, and encourage interest among their co-workers. Often, team incentives like movie tickets or an early dismissal encourage workers to help each other reach their health goals.

What first steps should companies take toward a new or improved wellness initiative?

Vinas: Companies, either internally or through a consulting partner or vendor, need to identify if they’re even ready for a program. Factors that should be gauged include the expected support from senior leadership and support from the employees who will actually be taking advantage of what the program will offer. Working with a consultant gives you access to resources and they understand how to track data, set up programs and measure success.

Carney: Companies are starting to grow their business strategy around wellness. Putting in a smoking cessation program is a noble goal, but a better goal would be putting in a smoking cessation program that includes a lower payroll deduction next year if the employee remains smoke free. Implementing a two- or three-year strategy helps people see that it’s to their own benefit in multiple ways to participate, and that the company has a commitment to a healthier workforce. Rolling out a wellness plan to feel better is great, but rolling it out to have a strategy around a healthier workforce is even better.

ANNE CARNEY, CEBS, is executive vice president, Hilb, Rogal & Hobbs in Tampa. She can be reached at (813) 289-7996 or MARTHA VINAS is vice president, business strategy, Hilb, Rogal & Hobbs in Tampa. Reach her at (813) 864-2744 or

Saturday, 26 May 2007 20:00

Investing in a banking relationship

Any beneficial relationship involves a lot of give-and-take on both sides. If the scales tip too far one way, the relationship cools and important benefits get left on the table.

Unfortunately, when it comes to the business/banking relationship, the bottom line today too often comes down to the lowest bid and the lowest rate, making it difficult to drive the maximum value out of this crucial partnership.

“The key to a long-lasting and beneficial banking relationship is the free flow of information from both sides,” says Robert H. Friend, senior vice president at FirstMerit Bank, Columbus. “The biggest element is to limit surprises so when something unexpected happens, both the banker and the company can work through the problem together.”

Smart Business spoke with Friend about how companies and banks can work together to build stronger and more versatile long-term relationships that ultimately benefit both sides.

How would you describe a healthy banking relationship?

At the end of the day, we’re all selling money and we’re all collecting money. The key is how a bank services its customers, makes sure they are comfortable, and how the bank meets their needs when they have an issue or a concern. The key to a healthy two-way relationship is communication and give and take on both sides. It’s the banker’s responsibility to continually inform the company of any changes in the bank’s personnel or changes in attitude or corporate culture.

Conversely, a company should inform its banker of issues it might be encountering. The goal is to minimize surprises and maximize the relationship through collaboration.

How does a good banking relationship mitigate turnover and change?

Both sides should be willing to foster multiple touch points within their respective organizations. The banker should get to know the company’s owner, chief financial officer and chief operating officer. The company should aim for tight relationships with the bank’s lending officer, the officer’s manager or market president, the banking assistant and possibly one of its underwriters. In this case, if someone on either side leaves, there are still two or three solid touch points or ties available to the respective organization.

How does this free-flowing information create opportunities?

All too often, companies think of their banking institution simply as ‘the place I put my deposits or satisfy my lending needs.’ But most banks have numerous other products and services to assist a company, such as special benefits for employees with workplace banking, private banking and wealth-management services, or corporate needs like cash flow management and company-sponsored 401(k) plans. It’s the banker’s job to bring these valuable services to the table.

The most underappreciated and least-tapped service a banker can provide is expertise and advice. For instance, when a company is considering a new line of business or geographic expansion, the banker can be right alongside saying, ‘Hey, we’ve seen other people do it. Here are some of the issues they’ve had and here’s how they went about gaining success.’ In addition, the banker can make introductions to these other companies or other advisers.

Can a solid banking relationship actually supplement hard financial data?

Absolutely. It is easy to come to a conclusion on a course of action based strictly on the numbers, but that decision may not be in the best interest of the bank or the company. The reality is that numbers — good or bad — are only a part of the story. The developed relationship enables the bank to understand the reasons and actions that led to the numbers. The developed relationship enables the company to have a better feel for how the bank is likely to react. Most importantly, an established relationship fosters a positive environment that encourages the parties to work together to resolve a problem or issue in the best interest of both.

How can the bank/business relationship be maximized?

Companies are always going to shop and compare prices, but if they are often shopping numerous banks, it can take the relationship aspect completely off the table. Long term, that does not foster good feelings from the banker’s perspective.

In reality, both sides are often much better off maintaining what they have and building a mutually beneficial relationship that might not always provide the absolute lowest cost to the company or highest return to the bank. Considering the expenses, to set up new systems involved when a company changes banks — and the costs that banks incur when bidding to gain new customers — it would seem sensible, to find the right fit and work on maintaining a healthy and profitable relationship for both parties.

ROBERT H. FRIEND is senior vice president, FirstMerit Bank in Columbus. Reach him at or (614) 545-2763.

Wednesday, 25 April 2007 20:00

Portals for the masses

A byproduct of the dot-com explosion in the late ’90s was an exciting but unfinished technology that offered a promising glimpse into the future business climate — one where smaller companies could more easily stand toe-to-toe with the industry giants.

This technology was dubbed an Internet “portal” implementation. A portal is a Web-based virtual doorway to a business that consolidates multiple Web sites into a common, integrated platform, allowing a business to satisfy multiple constituents.

“Because of developments on the technology front and the emerging industry standards, portal implementations are now viable for small- and medium-sized companies,” says Bill Russell, executive vice president of Allegient. “Portals are quickly moving from a luxury enjoyed by large companies to a requirement for competing.”

Smart Business spoke with Russell about what factors are making portal implementations both affordable and necessary for small- and medium-sized companies.

How do portals help level the playing field for smaller companies?

Today, even a small company may have as many as a dozen individual Web sites that can be a distraction due to technical constraints, maintenance and related costs. Portals suggest that these separate Web sites can become a common, integrated platform that allows businesses to satisfy any of their constituents, from customers to suppliers to employees — to even partners and shareholders.

An additional key benefit to a portal is speed. Portals allow a company to quickly and specifically serve the right people with the most current information and utilize a process for completing a business transaction. A business can, in almost real time, answer the questions: How are we doing? How are sales? What are our costs? How are we dealing with our clients?

How are portals utilized?

Portals are moving from pure content-oriented, or information-centric, sites into comprehensive higher-value ‘environments’ where a company can serve more of its constituents’ needs through collaborative interactions, transactions or applications. Portals are beginning to embed the business processes, along with the relevant information and people, so they can collaborate, share judgments and make decisions. This allows faster decision-making and timely direction changes.

Self-help applications are popular first initiatives and provide a fast return on portal investment. For instance, a portal application can allow online bill payment or provide a site where employees can view their W-2s, manage medical benefits, etc.

How have portals evolved into a viable technology for almost any company?

Portals have gone from an entry-level cost of $250,000 or more to less than $25,000 due to evolving technology and the industry’s recent drive for standards. Emerging portal standards are based in part on a family of standards called Web Services, or WS-I. And big players like IBM, Microsoft and others are holding true to the standards and are not making their versions so proprietary that you can’t interact or interface with them.

The standards also opened the door for software developers to build small applications or ‘portlets’ that can be easily connected or integrated with a portal. These portlets increase portal value and help better serve constituent needs.

What challenges accompany portal implementations?

Portals can cross the traditional functional roles or departments inside a company. To succeed, a portal implementation should be tied to a strong governance model. This includes a division-of-labor type approach for assigning responsibility and accountability. As an example, a product manager is able to post information about a product on a portal very quickly, with approval review by the legal department, marketing, etc. But ultimately the product manager controls that content. In a bad governance model, no clear accountability is established or no recognized embedded approval process is established, and new information is slowed due to functional ‘turfism’ or individual interests.

Security is another big challenge, which is being addressed by the new standards. Portal providers are quickly evolving in two major areas, including authorization/ identity management, as well as information security.

How can companies move to implement portal technology?

The basic platforms can be purchased, but most small- to mid-sized companies would be better served by first bringing in experts in portal implementation and business solutions.

It’s crucial to first determine the business solution definition or value for what you want to accomplish. Once that is identified, it can be translated into how the technology will be deployed. The technology is secondary to the business need.

BILL RUSSELL is executive vice president of Allegient. Reach him at (317) 564-570 or

Monday, 26 March 2007 20:00

Go public ... stay public?

It’s a question that many growth companies find themselves debating again and again: Should we take the company public? Since 2002, additional layers of compliance and expenses are leading many companies to stay private and some public companies to head back to the relatively safer, slower-paced and more economical waters of private ownership.

“Sarbanes-Oxley compliance and the increased capital available in the private sector have presented critical factors for today’s companies to consider, relative to either going public or going private,” says Darrel C. Smith, managing partner for Shumaker, Loop & Kendrick LLP’s Tampa office. “The difference between a being a profitable company and a nonprofitable company could come down to the significant costs associated with and continuing as a public entity.”

Smart Business spoke with Smith about the risks and benefits of taking a company public, and what factors are driving some companies back to private ownership.

Why should a company consider going public or staying public?

The No. 1 reason for going public is that it can be a good source for less expensive capital to quickly grow a company. Additionally, it can create greater visibility and enhanced corporate reputation.

Owners, investors and employees can benefit by owning shares with a ready public market to liquidate them. Finally, it’s easier for a public company to establish its valuation.

What benchmarks indicate it may be time to go public?

IPOs offer a unique ability to obtain significant capital at a lower cost with fewer restrictions compared to traditional loans and private equity, but only if the company has a solid track record of profitability and high gross margins within a healthy market sector. Additionally, the company should have significant growth opportunities available to it, strong management and infrastructure, and a need for substantial funding to grow the business.

It’s critical to understand that going public doesn’t suddenly add value to a company. It can actually reduce the company’s value because of the increased expenses.

A number of factors may indicate that it’s too early to take a company public. Obviously, if your company does not meet the criteria to list shares for trading on NASDAQ, NYSE or AMEX, or if the offering will result in too few public shares — or, in other words, not enough public float — it’s probably too early to consider going public. A lack of public float can lead to an illiquid market and difficulties attracting necessary institutional analyst coverage and active market-makers necessary to create a market for your shares.

What are the obvious and hidden costs of going public?

The obvious monetary costs are substantially increased organizational costs, and audit and legal fees. Some other obvious costs include printing fees, increased directors and officers insurance premiums, and SEC and exchange fees.

Hidden costs include ongoing professional fees and the continuing costs of being public and ensuring compliance. These costs run well more than $1 million a year, regardless of the size of the company.

There are also substantial hidden costs for in-house GAAP (generally accepted accounting principles) expertise and public and investor relations. It should also be noted that nuisance lawsuits often increase for publicly traded companies because folks believe there is a deep pocket.

A nonmonetary cost is the diversion of management’s attention to going public and dealing with compliance matters. This can create an opportunity cost because it takes them away from running and growing the business.

What is leading some public companies back to private status?

Some are smaller companies seeking to get out from under the cost of SOX (Sarbanes-Oxley) compliance. Others are being lured by the ready availability of private equity and loans at rates that can be competitive to public financing and opportunity to get out of the quarter-to-quarter pressure of being a public company.

Some are seeking the increased flexibility and reassumption of control in running a private business, as well as the ability to grow the business for the long haul instead of managing just to meet short-term market expectations.

What key drivers should be considered before going public?

First, do you have a strong balance sheet and financial history? Second, will you be able to attract one or more reputable investment banking firms to underwrite a public offering, offer coverage of your company and provide market-making support? Third, do you have high-growth potential with a need for significant capital?

A thorough legal review of the regulatory steps and considerable financial obligations related to going public may help decide the ongoing debate about taking your company public. An experienced securities law attorney can help guide a company through the evaluation of whether going public or private is the right move.

DARRELL C. SMITH is managing partner of Shumaker, Loop & Kendrick LLP’s Tampa office. Reach him at (813) 227-2226 or

Monday, 26 March 2007 20:00

Being aggressive

There may be no better example of the domino theory than a severe work-place injury claim that becomes amplified by ineffective claims management.

Severe workplace injuries can become powerful detractors that can impact employee morale, reduce company productivity and bottom-line profits, and even damage public or investor relations.

“If an employee is injured on the job so severely that he or she is not able to return to work, other employees have to pick up additional responsibilities,” says Connie Harding, vice president of Hilb, Rogal and Hobbs. “Unmanaged, this may lead to additional injury claims and soft costs, and produce a costly workers’ compensation experience modification.”

Smart Business spoke with Harding and Christina Butz, who is HRH’s Southeast Region vice president of claims, about strategies for aggressive claims management and proactive loss prevention.

What is the status of Florida workers’ compensation insurance?

Harding: The workers’ compensation market is soft. There have been solid legislative changes over the past several years that positively impacted rates, including legislation to lower overall claim costs. There are loss-sensitive plans available that can lower premiums or produce dividend returns. Cost savings from Florida’s lucrative workers’ compensation programs could help offset the high costs of other lines of insurance in the state.

What errors are being made with respect to risk management?

Harding: Most companies today have comprehensive safety manuals and good commitment from management. An area for improvement lies within the claim management process. Once a claim occurs, it is critical to share information with the adjuster. Companies often do not appoint somebody with authority, and with knowledge of the adjusting process and statutory experience, to stay in contact with the claims adjuster to share information.

Adjusters can only do their job according to the information they have in hand.

For complex risk management accounts that meet certain premium requirements, risk management and insurance services firms can implement licensed specialists that liaise between the insured and the claim adjusters to ensure that the adjusters are aggressively managing claims and keeping communication flowing between the client and the insurance company.

What strategies should be considered for companies with poor loss histories?

Butz: Any strong risk management program begins with top management and should be woven into the company’s culture and policies. Risk management, including reducing the frequency of losses and claim costs, must be a priority, much like producing a quality product or service.

Harding: Companies with complex claims will benefit from tapping their insurance services firm’s expertise and programs. These firms’ specialists first would conduct a thorough review of the company’s claims history for the past five years, looking for trends on similar types of losses. Once a trend is identified, a plan can be designed to help eliminate these types of claims.

Second, a review of the company’s safety manual, safety procedures and management’s commitment to safety may expose problem areas.

A third, critical step is a review of hiring and screening practices.

Finally, there is an assessment of the current claims management process.

What are other proactive strategies to be considered?

Harding: A strategy that produces good results is a safety incentive program for employees. The program can tie a good safety record to getting an end-of-year bonus. The financial reward helps create a buddy system so employees are watching that other employees use safe practices, even if supervisors aren’t on hand to oversee.

For companies with non-English speaking employees, a bilingual staff member should be trained to properly communicate safety issues and loss prevention policies, and to assist with the claims process.

How does risk management impact other company functions?

Harding: A severe loss takes management and employees away from their main responsibilities. It can also become emotional because many employees have become friends. Additional claims can occur as fatigued employees must pick up additional responsibilities and may not be paying close attention to or are not familiar with added safety practices. This all translates into the loss of additional dollars or ‘soft costs.’ Like the domino effect, a poorly managed claim can lead to a loss of production in many areas of the organization.

Butz: A responsive workers’ compensation program provides injured employees with prompt medical attention and assistance following an on-the-job injury that expedites their return to work. It also demonstrates the employer’s commitment to valued employees.

CONNIE HARDING is vice president, Hilb, Rogal & Hobbs. Reach her at (941) 554-3113 or CHRISTINA BUTZ is Southest Region vice president of claims. Reach her at (954) 714-6000 or

Monday, 26 October 2009 20:00

Talent magnets

When a down economy finally shows signs of recovery, companies typically can expect a period of higher turnover as the balance of power shifts between those hiring and those seeking employment.

But as companies position themselves to capitalize on the turnaround, they’ll first need a preemptive strike against turnover. One way to reduce a talent exodus during recovery is building an extensive total rewards strategy, or employment value proposition, that’s so magnetic employees will not only stay, they’ll drive themselves toward new levels of loyalty and engagement.

“Incentives play a powerful role in an organization’s compensation strategy,” says Robert Hoyland, vice president/general manager, USAA. “Well-designed programs provide both a strong attraction ability to get qualified candidates in the door and then a strong motivation factor for employees to perform while on the job.”

Smart Business recently sat down with Hoyland to learn more about the role of incentives in today’s workplace, and why employees highly value a company’s commitment to their health and well being through world-class benefit programs.

How has the role of incentives changed in today’s workplace?

A total compensation package encourages high levels of individual performance as well as commitment to your company’s overall success. In addition to highly competitive compensation, benefits that begin on the first day of employment, and other perks like tuition reimbursement, a retirement savings 401(k) plan, business casual dress code and state-of-the-art fitness and recreation programs now are huge motivating factors for employees. Today’s incentives even include a host of on-site conveniences including cafeterias, post offices, child development centers, company stores, free covered parking, and wellness programs like free annual health risk assessments and clinics, flu shots, preventive care benefits and many more.

Is non-salary compensation a motivator for every employee?

For many employees, it is. However, the extent to which each component of a company’s total rewards package motivates employees is unique to each employee. A graduate fresh out of college will certainly be motivated differently than an individual with a family who is saving for children’s college educations and retirement. You should strive to provide a comprehensive total rewards package that can motivate all employees, including baby boomers and Gen Y-ers.

What programs may entice employees to accept less financial compensation for better benefits and incentives?

Really, there shouldn’t be a need to choose. You should have both highly competitive compensation and world-class benefits. However, with all of the news on the country’s health care debate, a company’s medical plan certainly comes to mind. Retirement programs are also a strong component of an organization’s total rewards package. Depending on an employee’s particular situation, either one of these may be more highly valued than the base salary.

Programs promoting work/life balance are also highly valued by employees. You should understand that employees have lives outside of work and sometimes it is difficult to juggle all of the personal demands that come from being in a dual-career family, a single-parent, or part of the sandwich generation that is caring for children and older parents while working. Here, we have some unique resources to help. Child and elder backup care can provide a temporary solution for care of loved ones while employees need to be at work. Our ‘My Helper’ program is available to assist employees and their family members with errands, reservations and special events planning. Finally, approximately 25 percent of our employees choose to either work remotely or have a flexible work arrangement like four 10-hour days, four-and-a-half days or a 38-hour workweek, flexible start and stop times, or work part-time schedules.

Are incentive programs good ways to retain top talent regardless of market conditions?

Certainly, even in a down market, incentives can provide a strong retention hook for an organization’s top performers. Highly skilled, high-performing individuals, regardless of market conditions, will always be in demand. Almost all companies understand this fact. The challenge for a company lies in the proper design of its incentive plans.

How is corporate culture tied to effective incentive programs?

A company’s culture is unique, and the metrics that determine success should be directly linked to that culture. Leaders need to be able to articulate an incentive plan’s measures of success so that all employees understand what they are being measured on and how to achieve success. From the moment an employee comes to work at your company, that person should be keenly aware of whom he or she serves. In our case, that’s the men and women of the U.S. armed forces. We routinely showcase in our internal communications employees who embody our mission and core values and demonstrate our ‘My Commitment to Service’ principles. We know that our employees truly connect with our members and our mission because we’re consistently recognized for our exceptional member service. These awards are given to us because of our engaged, dedicated and loyal employees, who focus on meeting members’ needs, not selling them products. Building an extensive total rewards strategy is one key to building the loyalty and engagement needed to outperform your competitors during this recovery period and beyond.

Robert Hoyland is vice president/general manager of USAA. USAA, which employs approximately 1,700 people at its Tampa office, is a leading provider of insurance, banking and financial services for the U.S. military and their families. This past June, USAA was the recipient of Tampa Bay WorkForce Alliance Business Excellence Award for the Growth Business Award. Reach him at (813) 615-5701 or

Wednesday, 26 August 2009 20:00

Energized environments

Today’s businesses face many challenges, perhaps more than ever before, including fast-changing technology, varying consumer appetites, and threats to brands from the fast exchange through social media networks, not to mention a downward spiraling economy.

These trends are not lost on employers, who are doing whatever they can to engage and motivate their work forces for continued loyalty and productivity.

“Today’s executives are taking the temperature of their employees in terms of where they are and what they are trying to accomplish,” says James Blount, vice president of service support for Tampa Bay WorkForce Alliance.”

Smart Business spoke with Blount to learn more about how to build a high-energy workplace through leadership by example and consistent and transparent communications.

How does a lack of motivation from a single employee impact the organization as a whole?

Motivation essentially comes from within, and the lack of such does impact your company to the extent that employees are not willing or able to put their best foot forward. If employees are not motivated, they generally are not as productive as they could be because they’re not motivated to achieve common goals and they cannot align themselves with the goals of the organization. Unmotivated employees can have an effect on other associates and can be quite infectious to the detriment of business or team objectives.

How can a company assess their employees’ specific needs to increase motivation?

It’s incredibly important that employees feel an internal drive to be successful. Much of that depends on their personal and professional goals. Employees’ contributions will correlate to how they advance along those goals. Companies that focus on employee programs that include training, mentoring, community service and employee wellness may fair better in motivating employee productivity.

What are important aspects of a positive work environment?

No. 1 is communication. A positive work environment ensures open, honest and lateral communications with leadership. Consistency and transparency are just as important. Employees who are engaged in healthy communication and receive frequent communication have more buy-in and are stronger advocates of the brand.

A positive environment also allows employees to make mistakes, with the comfortable expectation of correcting them in an appropriate way so they’ll not fear for their jobs and not fear for being human. You should celebrate these opportunities for improvement and celebrate when employees get it right. Everybody should have the same opportunities to have their circumstances addressed in the same way.

What are ways to instill a sense of mission and purpose in employees?

There are several no-cost intrinsic ways to reward associates. I practice consistent praise a great deal because I’ve found there is nothing better than shaking the hand of a colleague and announcing that he or she has done a great job. Peer recognition programs may be appreciated even more than recognition that comes from leadership. It’s acknowledgement from your coworkers that your contributions to the team are valued.

There also are some low-cost extrinsic awards, including perks such as parking spaces or assigning a larger cubicle space. Or brown bag lunch sessions may serve as praise and recognition for associates who are doing a great job.

What are the end results of creating and growing an energized work environment?

It’s very challenging for organizations these days to make sure there is dedication to purpose and cause. But it is no secret that associates tend to support those things they helped create, and they tend to enjoy those things they understand and care about.

Associates who care about an organization feel appreciated, feel as if their opinion counts and understand their place in the organization and that their contribution to the cause will be more productive because they don’t have to worry about making an error that will be fatal to their career, or worry if their ideas are going to be viewed in a negative way. All of this leads to higher retention rates, because people like to become part of success.