When Frederick Minturn became MSX International’s CEO in 2009, he inherited a company with declining revenues, poor ?nancial performance and customer satisfaction and 3,000 employees spread all over the globe. To make matters more complicated, the outsourcing business was looking at some of the worst economic times since the depression.
Although many would ?nd it hard to see a bright spot for the company on the verge of bankruptcy, Minturn knew MSX could restore its ?nancial and operational health by growing its business in the right strategic areas. So he focused the company’s resources on enhancing two key segments: building out its retail consulting business, Retail Network Systems, as well as providing recruitment process outsourcing and technical staf?ng, using Human Capital Systems.
Leading MSX’s talented people and technology resources to better meet customer demands, these steps allowed Minturn to reinvigorate the company’s vision, right-size its cost structure and drive top-line growth in just his short time as CEO.
As the company’s ninth CEO in the span of just 16 years, Minturn brings clarity to the company’s vision and mission. He believes that it’s easy to keep everyone at a company focused on the key objectives if you empower your team. So at MSX, each business unit stands on its own. By having compensation tied directly to key ?nancial and operation performance indicators aligned with the company’s objectives, Minturn encourages team leaders to think as entrepreneurs, strengthening their commitment to executing the company’s goals.
Thanks to the best practices and systems implemented under Minturn’s leadership, MSX is now the top global provider of outsourced business solutions, with operations in 48 countries and 4,500 employees.
HOW TO REACH: MSX International, www.msxi.com
When Donald Hicks pitched a new software product to the CEO of the small consulting company he worked for in 1995, he was told it wouldn’t work. However, he decided to trust his instincts and spent the next six months creating the product, called SimRunner, which became the ?rst off-the-shelf simulation-optimization package.
Then in 1998, Hicks developed his company, LLamasoft, and its ?agship software, Supply Chain Guru, which is now a leading supply chain design and predictive analytics application.
Fast-forward to 2008, and LLamasoft found itself in the midst of the recession. President and CEO Hicks called his employees together with an innovative idea. He said, “Ask our customers what they want, and if you think you can deliver it, say yes. Then do it.”
As a result of this ?exibility and can-do attitude, LLamasoft grew during the recession. The company did not need any layoffs and actually added new jobs. The strategy has paid off immensely in terms of market share, innovation and employee dedication.
As an industry leader, Hicks is constantly thinking of ways to push the company to new heights and solve bigger problems for customers. LLamasoft has a coaching and training offering to teach users everything they need to know about its software applications. The company has also begun developing enterprise solutions that focus on knowledge capture, sharing and collaboration.
Hicks and LLamasoft are also leaders in the community. The United States Agency for International Development selected LLamasoft as its supply chain software provider to ensure drugs and medications get to sub-Saharan African people with diseases such as HIV/AIDS, malaria and tuberculosis. The company does not provide the services free of charge, although it often charges a reduced rate.
HOW TO REACH: LLamasoft, www.llamasoft.com
Traveling and working abroad often comes with risks, and savvy employers recognize that having employees overseas heightens their corporate liability. By protecting employees against the risks of global travel, employers can manage risks to their business, finances and reputation.
“In today’s litigious society, corporate governance and duty of care are paramount to a company’s crisis management strategy,” says Justin Priestley, executive director for Aon Crisis Management. “Businesses need to react to incidents in a timely and consistent manner, protecting their people, assets, balance sheet and brand reputation.”
Smart Business spoke with Priestley and Kevin J. Pastoor, CPCU, managing director of Aon Risk Solutions, about how to keep your employees safe abroad.
How can businesses ensure that they are meeting their duty of care requirements?
There is a lot of complicated case law on this subject, but the issues are simple. There are three things businesses should consider, and by doing so, they will meet their duty of care.
The first step is actively trying to understand what the risks are for your people, and that means doing a formal assessment of risk. If you say you didn’t know about it, that’s not good enough. You could have tried to find out.
The second thing you need to do is come up with appropriate risk management measures that are matched to the risks you think exist. You need to demonstrate that the plan you are coming up with is appropriate for the risks your employees are facing.
Third, organizations should have a plan and discuss it. Talk about appropriate levels of insurance and how employees are going to get to the airport if there is a problem. Broadly speaking, those steps together provide organizations with a much better opportunity to demonstrate that they are meeting duty of care.
How can businesses ensure they are prepared for travel emergencies?
An adviser can match what it delivers to what it thinks are the main pillars of activity. So up front, it would provide information to travelers so they are aware of the risks in a particular area. An adviser can also provide some basic-level training for travelers.
Another thing a consultant can do, if people are traveling to an elevated risk location — somewhere like Mexico or India — is conduct an independent risk assessment of that proposed journey. It can be done quite quickly; it’s not some long, laborious process. It provides the concerned organization with a third-party independent review for a journey before it is booked, which backs them up in their assessment.
What type of training and education should employers provide for traveling employees?
There are two types of training. E-learning allows organizations to show that people have done the training. We also do an elevated risk course, which is instructor-led.
That course tends to be more specific to a particular client. Another option is an elevated risk course, in which the threats and risks are determined for where someone is going, and then travelers are trained to understand them. For instance, if you are in Central America, kidnapping is one of the major risks, and this is how it happens.
Then a consultant can offer advice on situational awareness. Many people understand what to look for and how to notice if something suspicious is happening. There is some really basic advice on risk mitigation strategies, like not wearing your Rolex watch if you’re traveling in more interesting parts of the world.
It’s important to focus on sensible, pragmatic advice that businesspeople need to understand.
What innovative services can help business travelers?
Mobile technology enables a traveler to see a country’s risk information on the go. Putting that information in people’s pockets is actually quite useful.
It doesn’t produce 20 pages of data on each country. It’s short, concise and condensed. Most people don’t want to read for 30 minutes to understand an issue. They want to read it in two minutes.
Second, there is a nice travel management system for risk managers or corporate security that enables them to know at the push of a button where their people are on a day-to-day basis and what the risk exposure is for those people.
Aon WorldAware, our online country information service, grades risks by looking at what is going on in that country, the capability of the terrorist organizations and their modus operandi. It gives ratings of 1 through 5, on a daily, weekly, or monthly basis, and they can print a report showing how many people they have in low-risk countries, or Level 4 or 5 countries, how many incidents they have had and where those incidents occurred.
It is an independent assessment. A partner has people constantly reviewing every country. There are 10 factors, including terrorism, civil disobedience, kidnap and ransom, street crime. All 10 factors for every country are assessed and scored 1 through 5.
Countries rated 1 through 3 are appropriate for routine business travel. For countries 4 and 5, you have to consider the risks a bit more. To put that into context, Level 5 countries like Iraq, Somalia, or Afghanistan have extreme risks.
The system monitors what happens in the world on a daily basis, and the countries are updated as the risk profile changes.
Justin Priestley is executive director for Aon Crisis Management. Reach him at 44 (0)20 7882 0478 or firstname.lastname@example.org. Kevin J. Pastoor, CPCU, is managing director of Aon Risk Solutions. Reach him at (248) 936-5346 or email@example.com.
Insights Risk Management is brought to you by Aon Risk Solutions
There has never been a more challenging time for employers dealing with the dual problem of rising health care costs and declining employee health. As such, employers need to be thinking very differently about how they approach health care, says Jim Winkler, a senior vice president and large employer segment leader at Aon Hewitt.
“Employers need to actively, directly and candidly talk with employees about the need to change behaviors for better health,” says Winkler. “You need to build in the right combination of rewards so that employees understand that if they want to spend a large amount of ‘house money’ on health care, they have to follow ‘house rules’.”
Smart Business spoke with Winkler about the challenges and solutions surrounding health and benefits, and how to address them.
How can employers begin to have a conversation with employees about health care?
You first have to understand how consumers think about health care. Our Consumer Mindset 2011 research tells us that they understand that the system is broken, they understand the political dynamics and they know what they need to do in terms of health. Everyone knows they shouldn’t smoke, they should eat better and they should exercise. However, the messages that employees react best to are those that make navigating health easier and more personal.
Don’t talk to them about the company’s costs. Instead, talk about how a lack of health may be getting in the way of teaching a grandson baseball. You need to make it meaningful to employees so they understand the results of good health.
You also need to deploy more than just one tactic. You can’t just have a great communications strategy, and you can’t just have a plan design or incentive strategy. With consumer-driven health plans, consumers understand that you want them to be better consumers, but if all you give them is that design mechanism, you’re just going to frustrate them because they don’t understand the cost of specific health services. You have to give them the tools and information to navigate a broken system and help them see how their exposure to potentially higher out-of-pocket costs is going to enable them to make healthier decisions. You have to connect those pieces.
For example, if you have a consumer-driven plan, don’t just put employer money in the savings account. Instead, say, ‘If you complete a health risk assessment and you know your biometrics, then we’ll put money into your account.’ Make it very clear that you want employees to be successful under the benefits plan and to have access to more of the employer’s money, but you need them to do something in exchange.
People don’t always like that, but they can see very clearly how the actions they take can lead to good things and how inaction can result in a less satisfactory benefit plan.
How can an employer target better health for employees?
There are two starting points. First, as an employer, you want to have your arms around your data. Maybe you’ve done a health risk questionnaire and you have medical claims data in such a way that you can stratify it to say that, of the eight greatest risk factors (such as smoking, lack of health screenings, poor diet, etc.) and the 15 most prevalent chronic conditions, these are the ones that are most prevalent in your population. From that, you can target those two or three greatest risk factors that will lead to the best improvement in health status and a lessening of the frequency and severity of chronic disease.
If you don’t have that data because you’re a smaller company or you haven’t performed a health improvement strategy yet and have no real insight into company-specific risks, the three areas to target are poor diet, physical inactivity and lack of health screenings.
Your real opportunity for impact is to get after weight, as more than two-thirds of the U.S. population is either overweight or obese, and physical inactivity. With health screenings, you begin to build a baseline, and the more screenings you do, the more you understand risk in your population. And screenings are an early identifier of risk and disease, so you start to put a dent in high-cost conditions. If people wait until they’re diagnosed, then they’re likely to be on medication for life and have a higher cost outcome.
How do you address concerns about employers being involved in employees’ health care?
As an employer, you have to start with the basic premise that your current cost environment, the way you’re running your benefits program today, is not sustainable. If you’re going to change the status quo, can you continue to do the things you’ve been doing, like plan design changes that shift costs to employees and changing your medical vendor? Is it reasonable to assume the same tactics will produce a different outcome?
No, so you have to take a different approach. There are two paths you can take. One is the path of house money, house rules. Be candid with employees and share that the reason you’re talking to them about their health, and their behavior, is that you’re spending a lot of money on health care, so the organization has a vested interest in managing health care costs more effectively.
Second, in a challenging global economy, you need a healthy, present, high-performing work force. What percentage of your work force is out because of health issues? What if you could cut that number in half? You add nothing to your payroll costs, you spend less on medical coverage, and you get people back to work who are more productive to the business.
It’s in your best interest to drive business results to spend less on health care and have a healthy work force, and the way you’re going to get that is by engaging people around their health.
Jim Winkler is senior vice president at Aon Hewitt, the global human resource solutions business of Aon plc. Reach him at firstname.lastname@example.org. Linda Van Howe is senior vice president at Aon Hewitt, Detroit practice leader - Health and Benefits. Reach her at (248) 936-5238 or email@example.com.
Insights Risk Management is brought to you by Aon Risk Solutions
The automotive aftermarket and repair shops have undergone great changes over the last decade, forcing suppliers to those markets to anticipate the changes and adapt to them. SPX Service Solutions, led by President Tanvir Ar?, has done these things well.
As a result, the company got through the recession relatively unscathed, remaining pro?table throughout, despite a short-term revenue drop of 30 percent and with two of its top ?ve customers declaring bankruptcy. A prime example of SPX Service Solutions’ anticipation of market changes was when it developed its electric vehicle infrastructure business, EV Solutions. When the company started devising its plans for the new business, industry standards for electric vehicle power had not been created, and the industry was skeptical that electric cars would be accepted by consumers. So it became apparent to the company’s leaders that the business plan would have to be selffunded. The venture was successful, and EV Solutions is now recognized as the industry standard.
Innovation is the force driving SPX Service Solutions’ growth. A decade ago, the use of computers in vehicles started becoming prevalent, and as a result, the mechanical repair of engines and transmissions in service garages and dealerships started to shrink. If the company had continued to rely on its traditional line of mechanical tools and equipment, its business would have withered.
But SPX’s management team anticipated the trend and began executing a transformation ahead of time. Today, 70 percent of the company’s business comes from electronic products, software, data content and services.
This transformation has made SPX Service Solutions a global leader in the design, manufacture and service of automotive diagnostics and data content, tools and equipment, and services for dealerships, independent garages and DIY consumers.
HOW TO REACH: SPX Service Solutions, www.servicesolutions.spx.com
When Chip McClure joined Meritor Inc., in 2004, he quickly put the company on a new path to ensure its long-term growth and success.Considering the company’s historical position in the commercial vehicle market, McClure, chairman of the board, president and CEO, led the development of a plan called the “3R” strategy. That stands for rationalize, refocus and regenerate, which included divestitures, acquisitions, product innovations, international expansion and technical advancements. He refocused the company, which designs, develops and manufactures integrated systems, modules and components for original equipment manufacturers and the aftermarket for the commercial vehicle, transportation and industrial sectors, to become a world-class global supplier. McClure believes it’s the duty of the CEO to provide a culture in which diversity of thought encourages successful innovation so people feel good about being part of the company and contributing to its success.
So when the recession hit and automotive sales began to decline signi?cantly, McClure modi?ed his plan, and the company sold its automotive business in chunks. Borrowing from his earlier training as a leader in the U.S. Navy, he also reduced payroll, downsized operations and simpli?ed performance metrics to steady the ship on unsettled waters. His quick foresight and action enabled the company to grow and produce strong ?scal results in 2010 and 2011, with 2012 looking to be another great year.
In addition to leading his company in producing successful results, McClure also leads an employee volunteerism effort named “Power of Volunteering.” He has set a goal of 40,000 volunteer hours annually from Meritor’s employees. Additionally, he formed a women’s business resource group to advance women in management. His dedication to community has become a focal point in engaging employee involvement and differentiating Meritor from its competitors.
HOW TO REACH Meritor Inc., www.meritor.com
Christopher J. O’Connor is no stranger to challenges. He still serves as a senior of?cer in the U.S. Army Reserves and has experience leading some of the nation’s biggest businesses. So when he was asked to turn around First Technology Safety Systems, he was not intimidated a bit.
The company manufactures the crash test dummies used to make vehicles safer. When O’Connor came on board, he found a business that needed to become more ef?cient. O’Connor quickly set out to consolidate worldwide operations, reduce costs and develop a strategy to help the company achieve stronger growth. As he did that, the possibility of merging with a competitor began to come into play. If integrated successfully, the two previously independent companies would form one full-service global business that would more effectively serve its clients. The integration of the companies into what would become Humanetics Innovative Solutions would not be easy. As president and CEO, O’Connor would need to develop a new management team and get employees to function as one cohesive team.
One of the keys to its success would be the discipline to stick to very rigid training standards to make sure employees were working at the top of their game. The work Humanetics did would help save lives, and O’Connor wanted his team to understand that and embrace the responsibility that came with it.
O’Connor listened to leaders of the safety industry and worked together with his people to develop a common product that could produce more reliable and consistent data. The new dummies began to ship in 2012, but O’Connor is not resting. He’s still pushing his team to ?nd even better ways to do their work.
HOW TO REACH: Humanetics Innovative Solutions, www.humaneticsatd.com