By now, you’ve heard the tales of workers who head to the roof with baseball gloves for a quick game of catch when they hit a creative roadblock, employers who allow dogs in the office and companies where everyone has shed the traditional shirt and tie for more casual attire.
Some view these as case studies in inefficiency, but Kenneth Kovach and Gary Bunch of Cleveland-based Creative Stages argue that exactly the opposite is true. Design a flexible workplace attitude, they say, and you will inspire creativity and productivity in your employees.
“People are begging to bring in their pets and some companies are allowing that,” Kovach told a crowd of business leaders at the October Employee Resource Council’s annual meeting. “Pets and Ping-Pong do have an impact on productivity.”
But creating a casual workplace attitude, and still getting work done, is a bit more difficult than simply buying a pool table for the break room. Workplace flexibility must be carefully designed to walk the fine line between stodginess and anarchy.
Even if you’re not ready to let dogs into your office just yet, Kovach and Bunch offer pointers for creating a more flexible and productive company.
Set the tone
If you want to create a flexible work environment, take the old advice about leading by example. A relaxed atmosphere must be developed in the top office and filter down through the work force.
“Be flexible if you want employees to be flexible,” says Bunch “Don’t expect employees to just be flexible. It is not the real world.”
Break old habits
Part of shedding an uptight office atmosphere is breaking the old patterns of work that have contributed to a stressful environment. If there is not significant change in the physical part of the job, Kovach argues, employees will not buy into the shift in attitude
“As long as we have the old pattern thinking going on, we’re never going to be able to break out of it,” he says. “Our brains respond to novelty and incongruity.”
That may mean giving the boot to stodgy company meetings or changing the physical environment of your workplace to reflect its change in personality. The more change that is fostered, the more creative and productive your work force will become.
Draft some rules
Dress-down days have been adopted by many business, but Bunch warns that even the most relaxed companies have rules to make sure their office space is conducive to work no matter how at ease they want employees to feel.
“Draft some guidelines to casual clothes,” he says. “Companies often find they created a policy to create more flexibility and they’ve created a monster. Sometimes what people wear is so incredibly bizarre it makes matters worse instead of better. Obviously, you have to have some compromise. Anything goes is not the answer.”
Stoke the fire
The reality of such a fundamental change in a company’s culture is that it will not stick unless there is a sustained and concerted effort on the part of management to feed a creative approach to work.
Bunch says there is an 80 percent chance that companies that try to change their workplace will end up reverting back. If there is good communication within an organization, the odds of it reverting fall to about 60 percent. However, Bunch, who along with Kovach makes his living helping businesses become more creative, say nine out of 10 of their clients usually see long-lasting change.
“We can take it up to a 90 percent chance when we continue to come in on a regular basis,” he says.
How to reach: Creative Stages, (216) 921-0900
Jim Vickers (email@example.com) is an associate editor at SBN.
Those people are called entrepreneurs, and each year, the most successful among them are chosen for the most prestigious honor in business: Ernst & Youngs Entrepreneur Of The Year Award, sponsored by SBN, McDonald Investments, Bowne, USA Today, Nasqau/Amex, Kauffman Center for Entrepreneurial Leadership, CNN and CNNfn.
The EOY program was developed to recognize outstanding entrepreneurs whose achievements place them among the leaders in business.
Nominations for this years program are being accepted through April 7. Finalists will be honored at a banquet in June. Winners announced at that banquet will be inducted into the Entrepreneur Of The Year Institute at a national conference in November.
Requirements: To be nominated for Entrepreneur Of The Year:
- The individual must be an owner/manager responsible for the recent performance of a privately-held company; and
- The company must be at least two years old.
- Founders of public companies are eligible, but must still be active in top management.
- Individuals who have assisted others in becoming successful through business or academic support may be nominated for the Supporter of Entrepreneurship award.
To nominate yourself or someone else, contact Ernst & Young at (800) 755-AWARD for an Entrepreneur Of The Year nomination kit.
Businesses with 100 employees or fewer can borrow up to $50,000 at an annual interest rate of 2 percent for up to seven years. The loans must finance improvements that reduce the use of or reuse raw materials, reduce the production of waste or make a significant reduction in energy consumption. The pay-back period for the improvements must be less than the term of the loan.
Examples of projects that may qualify include the purchase of energy-efficient equipment, reductions in chemical use, closed-loop cooling or process water systems.
The program is administered by the Pennsylvania Department of Environmental Protection and the state Department of Community and Educational Development. Up to $2 million is available annually.
How to Reach: Loan forms are available by calling the Department of Community and Educational Development at (800) 379-7448, at the DEP Web site at www.dep.state.pa.us or at the ENVIROHELP Web site at www.pa-envirohelp.org.
Local businesses looking for new markets might find them in China, says Ann Dugan, executive director of the Institute for Entrepreneurial Excellence at the University of Pittsburgh.
Dugan traveled to China as a delegate to a conference for more than 300 Chinese economic development specialists interested in setting up programs similar to the small business development centers in the United States.
Their small business economy is beginning to swell, and they need the knowledge to guide and foster those entrepreneurs, says Dugan.
Some of the best opportunities in China for U.S. companies are for chemicals, telecommunications equipment, computer software, consumer-oriented franchises, plastic materials and resins, pharmaceuticals, pollution control equipment and certain agricultural goods.
With Chinas economy well on its way to becoming the second most powerful in the world, you may have good reason for getting into this huge market.
Building relationships with the Chinese people is time-consuming, Dugan says, but the payoff will be well worth it in a country of such enormous possibilities.
How to reach: Katz Graduate School of Business, (412) 648-1544 or at www.pitt.edu/-sbdc/
There is a Chinese saying, When you drink the water, remember the source. To remember the source of many of our finest qualities is to remember those who mentored us.
Akron Beacon Journal Vice President and Editor Janet Leach recalls the mentors who inspired her enthusiasm for leadership and passion for journalism. The dizzying pace of her daily executive duties is regularly infused with the lessons of her mentors.
As a rising star at the Cincinnati Enquirer, mentoring by people like her editor, Larry Beaupre, took the form of bringing you into something youve never done before, she says. Other mentors taught her the difference between leading and managing and the vital importance of thinking big.
Gender has been neither a barrier nor an issue in the quality of mentoring Leach continues to thrive on.
Mentoring crosses the boundaries of industries. Larry Parsons, CEO of Brewster-based Wheeling & Lake Erie Railways, provides for his succession leaders the same type of mentoring he receives from lifelong mentors such as octogenarian and railroad guru William Holtman, who spends a week every year getting Parsons business perspective on new tracks.
As an emerging mentor, Leach says good mentors are generous with their experience, have the ability for deep listening and demonstrate an intuitive belief that this person will succeed.
For Parsons, mentors give a sense of direction and a presence you wouldnt have otherwise.
They subscribe to the philosophy that business growth depends on the growth of its leaders. Mentoring is not only an effective talent and knowledge retention strategy, it becomes a tool for growing the leadership that grows the business.
One of the more potent media for talent development is peer mentoring, a hot feature of The Executive Committee, known as TEC the 47-year-old international association of local professional networks for executives.
According to Dennis Sabol, a TEC chairman in the greater Akron area, the committee provides resources to executives with robust personal, professional and business development agendas. Select executives in small local groups provide confidential and powerful peer mentoring.
TEC members trade probes, provocations, resources and support they might not get from their spouses, partners, accountants, or yes-saying staff. Sabol says members, who represents diverse levels of achievement, get direct value from deriving quality mindshare with their peers and mentors.
This is mentoring at its best: an effective accompaniment to the kinds of mentoring Leach and Parsons provide and enjoy.
Mentoring relationships can be just-in-time and ongoing. What seems clear a lesson for wanna-be mentors is that no one is a mentor on everything.
It takes a whole village of mentors to raise great leaders.
Jack Ricchiuto is a management consultant and author. He can be reached through his Web site at www.newpossibilities.net.
One-stop shopping has truly arrived. So much so that the ability to offer a full spectrum of products and services for business and personal use is often what sets one small business apart from the rest.
In order for small businesses to be competitive and fulfill this now-common consumer demand, they often need to expand quickly. Shige Moroi, owner of M-Corporations, knows all about that. His three affiliate companies M-Telecommunications, M-Engineering and M-Retail offered complementary services to clients, but were located in different areas of Columbus.
To make his company more of a one-stop shop, Moroi set out to buy facilities that could house all three affiliates in one area. To maintain cash flow, Moroi wanted to secure financing with a low down payment. He did it with help from his bank and the nonprofit Columbus Countywide Development Corp.
Using a U.S. Small Business Administration 504 Loan and a 10 percent down payment, Moroi purchased two adjacent buildings to consolidate M-Corporations operations in a central location. Huntington National Bank financed 50 percent of the loan, as is typical with the SBA 504 program and Columbus Countywide financed the remaining 40 percent. The SBA 504 loan program offers loans to healthy, growing small businesses for land, buildings, machinery or equipment.
Other lending programs offered by Columbus Countywide include:
- Ohio 166 loans through the Ohio Department of Development. Like SBA 504 loans, the Ohio 166 Loan Program requires a 10 percent down payment. Columbus Countywide uses state dollars to finance 40 percent of the loan, while a local bank chips in the rest. Ohio 166 loans focus primarily on helping manufacturing businesses grow by financing land, buildings, machinery and equipment.
- SBA Pre-Qualified Loans. Under this program, Columbus Countywide helps businesses acquire a loan guarantee from the SBA as an initial step in the financing process. The owners can then use this guarantee to obtain a traditional bank loan. This program targets rural, women-, minority- and veteran-owned businesses and exporters; and helps businesses that lack collateral or a lengthy credit history finance a loan. Owners put up a down payment of between 10 percent and 30 percent, depending on their banks requirements.
- Central Ohio MicroLoans. This program offers financing for pre-bankable businesses, those that are too small or too new to secure a traditional bank loan. These loans can be used for equipment purchases and working capital such as inventory, receivables and operating funds. All borrowers must write and submit a business plan to be considered for a MicroLoan.
- The Columbus Growth Fund. This loan program is specifically designed for existing businesses in the city needing financing to expand.
Columbus Countywide also offers seminars on business plan development. It holds ongoing business management classes for MicroLoan borrowers and other interested small business owners to ensure sound fiscal management.
Since 1981, Columbus Countywide has helped more than 600 small businesses obtain financing. It has approved more than $160 million in loans, which have created more than 9,000 jobs and stimulated more than $350 million in new investments in the 13 counties it serves.
For details on Columbus Countywides loan programs visit www.ccdcorp.org or call 645-6171 in Franklin County or (888) 756-2232, toll-free, from elsewhere.
Brad Shimp is interim director of Columbus Countywide Development Corp.
Much like free agency in professional sports, offering signing bonuses to highly skilled professionals in the ordinary work force is becoming a larger and larger bargaining chip to attract the brightest and best minds.
The positions most likely to be offered the increased bait are those in information technology, engineering, cost accounting and management, according to Tim Burkhart, a certified professional consultant or headhunter, as some would call him for the Adecco Employment Agency in Columbus. A business matchmaker for 17 years, Burkhart insists this latest recruiting hook is nothing more than the simple economics of supply and demand.
Ohios unemployment rates are at unprecedented lows, with some counties, including Franklin and Delaware, averaging between 2 and 2.5 percent, according to estimates by the Ohio Bureau of Employment Services. The key is finding the right lure, especially when someone isnt really looking to change jobs.
A sign-on bonus is an incentive to take action, Burkhart says. Its validation of your worth in the marketplace.
Approximately one-third of the positions Burkhart fills offer sign-on bonuses, he says, adding that the standard perk runs between $2,000 and $4,000. Adecco had one client in the last year, however, that offered an automotive professional a $15,000 to $20,000 bonus to switch employers.
Most sign-on bonuses are paid immediately upon hire, although some companies delay payment until after 30 to 90 days of employment, or, in the case of nurses in some assisted-care living facilities, after two weeks of perfect attendance.
As the labor pool gets leaner and leaner, you have to get creative, Burkhart says. You need to bring in a sign-on bonus to sweeten [the deal].
Such bonuses are usually more prevalent with a lateral move or a small increase in base pay, he adds.
Its not as common when its icing on icing, he explains.
But when youre trying to entice higher-caliber programmers, plant managers or accountants from one of the Big Five accounting firms, thats when a stronger enticement is required. Jennifer Bisciotti, director of human resources at Deloitte & Touche LLP says she's seen signing bonuses in the industry for 15 years, but not to the degree shes seen lately.
The major thing thats increased is the frequency of when theyre offered, she says. Its pretty much across the board. The top talent is in great demand.
Signing bonuses are not a given for every offer we extend, but its a strategy and a recruiting tool to attract and retain the top talent, she adds. It helps to lead the field.
Bisciotti declined to pinpoint a monetary range for bonuses, saying it was decided on a case-by-case basis, depending on the competition.
Megan Wolfe, assistant manager at CVS Pharmacy on Sawmill Road, says shes seen signing bonuses for registered pharmacists as high as $5,000. And she expects the payroll pendulum to continue swinging in employees favor, particularly with national accreditation and postgraduate standards for pharmacists gradually being increased to include additional years of schooling, according to Dr. Ken Hale, assistant dean at The Ohio State Universitys College of Pharmacy.
Nobody works for free, and a sign-on bonus can really get their attention," Burkhart says. Its a nice tool to motivate someone to take the leap of faith.
To avoid losing your own employees to the allure of big sign-on bonuses elsewhere, another incentive is quickly emerging in the marketplace: lucrative stay-on bonuses. These have become especially popular for retaining computer programmers, Burkhart says.
Theyre real and designed to keep people in their seats when its critical, he says.
Forrest Clarke (firstname.lastname@example.org) is a free-lance writer for SBN Columbus.
Tim Thompson, president of Thompson Building Associates Inc., joined a networking group to share ideas with his peers, but hes come out with a bonus.
He and nine other restoration-work industry executives around the United States developed software to help manage their businesses. They were so successful theyve formed a company to sell the software to even more peers in their industry.
The need arose because, in the course of repairing buildings damaged by the likes of fire or natural disasters, Thompson Building Associates must provide insurance companies with detailed records, such as timelines.
For years, our company had looked for a database that would do all this and hadnt found one, Thompson says.
Through his national peer group, Business Networks, Thompson discovered he wasnt the only one struggling with the issue. So the 10 companies formed a partnership SWATware Information Solutions and hired a software developer to create their own industry-specific software program, SWATtrac.
The software allows Thompsons employees to keep track of case-by-case details and deadlines a task Thompson called a nightmare when it was done by hand.
Now we know when an estimator went out and inspected the job, when the estimate was submitted to all parties, when the estimate was accepted or denied, the scheduled date for work, when the work actually began, when the work was complete, Thompson says, just beginning to describe the litany of details included in the software.
While the program helps Thompson Building Associates quickly provide such information to insurance agencies, it also challenges the company to meet daily deadlines.
Every employee that logs into SWATtrac knows what their goals are supposed to be for today: You have three estimates where the submittal date is due today. Not only does that pressure them to meet the goals, but it allows me to look at the reports at a glance and see if this estimator is doing reports quickly and this estimator isnt, Thompson says. So I can monitor their standards and help the customer.
He also believes SWATtrac helps him get on preferred contractor lists compiled by insurance agencies. When an insurance representative recently asked Thompson if he could meet certain parameters, the SWATtrac program let him prove it by showing previous projects records.
Developing SWATtrac cost between $150,000 and $200,000, Thompson says a value when divided among the 10 original companies.
I had spent $40,000 or $50,000 in other directions without good results, he explains.
Costs grew, however, as the member companies realized the product could be marketable and thus required more investment. All told, the 10 companies invested between $50,000 and $200,000 each, depending on their ability to contribute to the project. The partners share in profits from software sales will have the same ratio as their contribution; Thompsons is about 10 percent.
In the first year of selling the program, approximately 40 companies are using it. Because of recent changes in the software, the partners are in the process of recalculating how many programs they need to sell to turn a profit.
In addition to SWATtrac, Thompson has benefited from his Business Networks group by sharing concerns about topics such as financial statements and keeping a closer eye on whats happening in his industry.
Anyone in a network together, he says, ought to explore any ways to share costs and invent the wheel together instead of separately.
Joan Slattery Wall (email@example.com) is associate editor of SBN Columbus.
At one point, he pleads, Just tell me what you want. I can do everything for you! To this, ODonnell replies, If you really want to please me, go paint my house!
How many times have you been pursued by sales reps or presented with marketing campaigns claiming to offer a total solution? And how many times has a total solution been what you really needed?
Too often, businesses assume their prospects want it all at once. Here are common examples of total solution providers pushing their whole product line at the same time:
- Telecommunications companies that offer phone, cellular, e-mail, pager and voice mail services.
- Banks that advertise checking, credit cards, investments and mortgages.
- Internet service companies that promote strategy, design, hosting and fulfillment services.
The fatal flaw of offering everything
Besides the fact that it is very difficult to present many products all at once, it usually doesnt work for the customer. Customers want to test a companys ability to deliver one product at a time. In other words, they want to date before going steady.
Customers also have specific needs. There is almost always a product or service they would choose to try before others. If forced to take it all or leave it, a customer may buy a total solution. But at the first sign of disappointment, remorse will overflow.
Does this mean, then, that it is foolish to offer customers a variety of products to meet their individual needs? No. Instead, try this three-step process:
1. Understand your customers typical buying patterns.
Analyze what your customers buy from you. That will help you determine which products or services are the first ones they buy, the ones that encourage return purchases, the impulse purchases that dont lead to more and the ones that existing customers buy.
An example is telephone companies, which promote long distance deals to attract first-time buyers, friends and family deals to lock them into a long-term relationship, telephone equipment as impulse purchases or personal 800 numbers to existing customers.
2. Offer your products and services in the right order for your customers.
Sequence and stage your products and services. Offer conversion products that turn prospects into first-time buyers, then offer reorder products which prompt first-time buyers to become regular customers. Finally, offer logical products that cause first-time buyers to expand their relationships with a vendor.
When I served as a product manager for the Bank of Boston, we offered CDs to attract prospects with funds to invest, created rollover programs to encourage CD customers to reorder our product and advertised checking products to build long term relationships with CD buyers.
3. Market your products and services in the right order for your customers.
Create sales and marketing programs that offer products and services in the correct order and to prospects and customers who are ready to buy them. Here are some recent examples:
- Sprint Telecommunications offered a hotline pre-selling Rolling Stones tickets to anyone willing to switch over its long distance.
- Progressive Insurance does a magnificent job of telling its less attractive customers that their policies would cost less if they switched to the competition.
- Amazon.com provides topical newsletters to customers based on their previous purchase history, correctly assuming they can be upsold or cross-sold.
It is possible to offer a wide range of products and services to customers without overwhelming them, but the effort must be organized and presented in a systematic process based on how and when customers buy.
Do not try to sell products and services on your schedule. Instead, understand your customers behavior and adapt your companys approach accordingly. In other words, perhaps Rosie ODonnells overzealous admirer should have taken her advice, and first painted her house!
Andy Birol (firstname.lastname@example.org) is president of PACER Associates Inc., a Solon-based consulting firm that works with companies to focus on their best ways to find, keep and grow customers. He can be reached at (440) 349-1970 or www.pacerassociates.com.
Individual Retirement Accounts (IRAs) and qualified retirement plans are designed to encourage saving for retirement during your working years. Contributions are generally tax deductible and assets grow tax-deferred.
But because assets can grow quickly, they sometimes far exceed the needs of their owners and become inheritance plans.
While the plans are great ideas, they can create significant estate planning problems with a dramatic tax impact. Retirement plans can be bad assets when they end up in an estate, because combined federal, state and estate taxes can consume up to 75 percent of the value of these assets, leaving a fraction for heirs.
Given the virtual certainty that tens of thousands of people will pass away with large retirement plan balances, the need for strategies is extremely high.
First, list your assets and liabilities to determine the net value of the estate in current dollars. The investment assets should be categorized as either retirement plan assets (IRAs and qualified retirement plans) or nonretirement plan assets, those held in taxable accounts. This allows you to determine a hypothetical estate tax.
Next, review the beneficiary designations for each retirement plan account. Keep in mind that assets held in retirement plans pass to the named beneficiaries under contract law regardless what any will might provide.
One way to stretch out the income taxes to be paid by the beneficiaries as they receive distributions from inherited IRAs is to use a multigeneration or stretch IRA. Heres how it works: When the plan participant dies, the surviving spouse, as the beneficiary, rolls the proceeds into different IRAs, each one with a child, grandchild or charity as the sole beneficiary.
When the surviving spouse reaches age 70-1/2, required minimum distributions must be made from each IRA. However, the distribution period is calculated based on the joint age of the spouse and beneficiary (maximum l0-year differential). When the surviving spouse dies, the distribution period is recalculated based on the beneficiarys life expectancy.
While the multigeneration or stretch IRA allows the IRA to continue to grow tax-deferred, it does not reduce the estate taxes due or replace the wealth lost to income and estate taxes. It simply defers the payment of the income taxes due on the distributions from the IRA.
If you want to replace the wealth lost to taxes, consider an irrevocable life insurance trust (ILIT). If the ILIT is properly drafted and managed, it will result in significant insurance policy death proceeds distributed to family, both income and estate tax-free.
A second-to-die life insurance policy, usually a universal life policy, is acquired by the ILIT. The beneficiaries of the ILIT can be children or grandchildren. Annual distributions are made from an IRA or qualified plan in an amount sufficient to pay the income tax due on the withdrawal and to fund a gift to the trust equal to the annual insurance premium due. This gift qualifies for the annual gift tax exemption.
Upon the death of the insured, the death proceeds are paid to the trust, which in turn distributes the proceeds to the beneficiaries of the trust, free of any estate or income tax. In effect, the death proceeds from the insurance policy replace the reduction in value of the decedents estate due to estate and/or income taxes.
This is an effective means of bypassing the estate and transferring wealth to ones heirs.
There are many other ways as well, and any financial investment consultant can outline which may work for your situation. The bottom line is this: It is important to recognize the potential problems inherent in retirement plans and take the steps necessary to preserve the wealth that has been accumulated in these plans. The method you choose is up to you.
Arthur Weisman is an investment consultant with First Union Securities. He can be reached at (216) 574-7317.