Paul R. Harvey

Businesses cannot overestimate the importance of a well-planned transportation infrastructure. Easy commutes for employees build morale and productivity. Faster response times for mobile service crews produce loyal customers. And gas prices circling $4 per gallon impact the bottom line.

For Shermco Industries — a thriving company specializing in electrical power system and wind generator repair — proximity to airports, highways, customers, and comfortable and diverse neighborhoods for employees to live in were all keys to its corporate relocation success story.

“Relocating to Irving – Las Colinas provided us with an extensive network of highway systems and transportation options that help us meet and exceed our customers’ expectations for timely arrival, and allow us to attract and keep top talent,” says Lonnie Mullen, vice president of operations for Shermco Industries.

Smart Business spoke with Mullen about how the thoughtfully planned infrastructure of the Greater Irving — Las Colinas area enticed his growing company to relocate its operations from Dallas.

What factors make Irving — Las Colinas a great place to do business?

The cost of doing business in Irving has a respectable value compared to the surrounding cities, and Texas real estate in general has maintained its value despite the recent downturn. Irving is an established, business friendly city, centrally located in the Dallas-Fort Worth Metroplex. More than 10,000 businesses call Irving home, including Fortune 500 companies ExxonMobil, Fluor, Kimberly Clark, Celanese and Commercial Metals.

Irving is regarded highly as one of the top cities for business in the nation, and recently was ranked one of the nation’s Top 50 Best Places to Live. Not only is Irving a great place to work and build our company, it’s also one of the best places for our employees to reside and raise their families. Irving had exactly what we were looking for.

We were established in Dallas, a short drive from Irving. In 2000, our success demanded that we move to a bigger facility, and Irving offered the business solution we were looking for with a selection of cost-effective and functional real estate opportunities. We settled on a great building in an ideal location within an industrial complex where Frito Lay — one of our customers — is also located.

How has the move impacted Shermco’s bottom line growth?

When our customers need us to work on their equipment, they need help right away. Having easy access to Irving’s transportation infrastructure, including several highways, two major airports, commuter rail and the planned light rail service, is a great value to us as well as our customers.

The transportation infrastructure in and around Irving is a very important function for our company. We are an international provider of testing, repair, professional training, maintenance and analysis of rotating apparatus as well as electrical power distribution systems and related equipment for the light, medium, and heavy industrial base. A lot of our business is service-oriented, so time truly is money.

Since relocating to the city of Irving, our business has continued to flourish. When we moved to Irving we had 100 employees. Today we have 425 employees, including 280 at our Irving location. We are very proud to be consistently recognized as one of the Best Places to Work by the Dallas Business Journal. In 2011, Shermco was ranked as one of the best midsize companies to work for in the Dallas-Fort Worth area. This is the fifth year we have been ranked as such.

Another factor driving our growth is Irving’s Economic Development Partnership group. The group is engaged in both the business and governmental sides of our city. It’s extremely helpful in a sense that I’m able to ask the same group of people questions that involve either subject, essentially speeding up the process for our business to make a solid decision. And it gives you a sense of pride to know you have a partner that’s invested and supports your success.

How does the city’s transportation infrastructure help attract top talent?

To be the best you have to attract the best talent. In Irving, we have access to a workforce of more than 3.1 million people within a 30-minute commute. Being established in a city like Irving that offers an excellent quality of life, an affordable cost of living and reasonable commutes has allowed us to attract and maintain our valuable employees.

Our employees and their families have access to many culturally diverse activities in and around Irving, including the Irving Arts Center, the Dallas Arts District, Six Flags amusement park, several water parks, and professional sporting venues including the Dallas Cowboys, Mavericks basketball, Stars hockey and Rangers baseball.

What are some of the best-kept secrets of doing business in Irving?

There are none. The city and the Greater Irving — Las Colinas Chamber of Commerce work very hard to make sure there are no secrets. They are truly invested in business and they want all the businesses in Irving to succeed. Come to Irving and you’ll quickly find out the city is very pro-business.

The Greater Irving — Las Colinas Chamber of Commerce comprehensively helps businesses large and small with plans to relocate their headquarters or expand operations to Irving. The Chamber is prepared to guide companies through a comprehensive process including business development strategy, strategic site selection, community demographics, expansion management, location selection, site consulting, corporate real estate management, corporate office relocation, location analysis, corporate site selection, corporate real estate strategy, corporate headquarters relocation, business relocation, and corporate relocation management.

Lonnie Mullen is vice president of operations, Shermco Industries. Reach him at (972) 793-5523 or

Visit the Greater Irving-Las Colinas Chamber of Commerce at

Insights Economic Development is brought to you by Greater Irving-Las Colinas Chamber of Commerce

Friday, 25 September 2009 20:00

The rules of engagement

What if you could pay four employees and get a fifth for free? Since it’s estimated that highly engaged employees outperform their disengaged co-workers by about 25 percent, building a highly engaged work force is like adding virtual employees.

A Gallup survey of more than 1 million Americans showed that nearly 75 percent of all workers are disengaged. And while employee engagement can be an elusive goal, there are plenty of strategies to empower your employees and boost engagement.

“The old Golden Rule will take you a long way in this world,” says Jeri Gooding, human resources manager for Southern Manufacturing Technologies. “You know what makes you feel good, what makes you feel bad and what makes you work, so if you want to increase engagement, treat people the way you would like to be treated.”

Smart Business spoke with Gooding to find out how to assess employee engagement, what employees really want and why the Golden Rule may lead the way to improved employee engagement.

How can an employer tell if employees are properly engaged?

There’s not a test you can take or a measurement that you can use. I look for low productivity, somebody who makes many mistakes, grumbling, complaining, absenteeism, tardiness, voluntary terminations — people who choose to go down the street to make the same wage or a quarter an hour more. When people cease to function as a team, quit interacting with their managers and their co-workers, show a ‘don’t care’ attitude or even make threats of quitting or hurting their supervisor, it’s indicative of low employee engagement.

Beyond fair compensation, what are employees seeking from their work experience?

The one thing that stands out is that employees want recognition, even above money. They want to know that you see what they do and that you appreciate what they do. Next, they want to be held accountable themselves, but they also want the goof-off to be held accountable. Another need is responsibility. People want to go home with a good feeling that they have really accomplished something. Next is security. They want to know their paycheck is coming, but they also need a sense of security with their manager and a feeling of belonging to a unit. People also want to feel like they can advance in the company. That’s why internal job postings are essential. Give people the opportunity for training and career advancements.

How can leaders best assess the unique needs of individual employees to increase their engagement?

It’s proven that knowing your employees is a huge deal. I know a regional HR director for a worldwide company who tells every new human resources manager she hires that there are three things they have to know, including the names and spellings of every employee, the shift and the pay rate of each, and enough about them to converse with each employee. You’ve got to listen to your employees and let them know you have an interest in them. Sometimes we’re so busy talking, we forget to listen. It is easy to have this interaction and it buys you the engagement your company needs to survive. Finally, ask questions. Maybe you already know the answer, but it makes people feel more engaged and more like you are interested.

What tactics can managers employ that lead to empowered and successful employees?

We have a referral program and a suggestion box where you can earn money for giving a suggestion. We use Wow Awards, which is a $25 gift card the managers can award for something above and beyond the call of duty. We also begin each day with a huddle, starting with the managers, to talk about birthdays, anniversaries and the hot jobs — really general things. Then each manager goes back to his or her group and they have a huddle, so it trickles down.

Beyond the little things, people need a sense of belonging. Maybe it’s on a social committee, an audit team or a safety team — but if you can meld them into a team, they’ll have a sense of being appreciated as part of that group. Finally, you should give employees all the tools they need, and not just the physical tools like calipers and computers. It’s also subjective things like good working conditions, training and retraining, and a pleasant environment. If you go to bat for them and get these things, they’re going to remember that when you ask them to do something that is not in their job description.

What can the management team do to engage employees?

First, if top management doesn’t engage the supervisors that are below them, they’re not going to get the engagement of the people. The ball lies in the supervisors’ court for making the employees they supervise engaged, from top management on down. And building rapport is the single most effective tool. You need to take a good look at each employee — every day — and when you see changes, investigate. It’s also important to treat every employee the same but different. The rules are consistent, but tactics that work for one don’t necessarily work with another. Also, remember to say ‘thank you.’ These two little words provide recognition and appreciation. Finally, remember the Golden Rule of engagement: treat others the way you would like to be treated. It’s a very simple philosophy but if managers, bosses, teachers and parents would all adhere to that, our world would be much better.

Monday, 26 January 2009 19:00

Healthy, wealthy and wise

While some companies trek to Washington in search of bailout cash, most are being forced to look inward for survival. What’s clear, however, is that all business leaders must take a harder stance on extraordinarily high line items like health care costs.

Consider General Motors, in the limelight of late due to its inability to compete, which spent about $5.6 billion in 2006 on health care for its employees or, by some estimates, $2,000 per car produced. These are crippling costs.

“While we spend the most on health care, the health of Americans is worse than other Organization for Economic Cooperation and Development (OECD) countries,” says Govind Hariharan, chair and professor, Department of Economics, Finance & Quantitative Analysis, Coles College of Business, Kennesaw State University. “This implies that, in terms of return on investment in health, we as a nation, and our companies, are less efficient than many of our competitors.”

Smart Business recently spoke with Hariharan about why more companies would be wise to partner with employees and insurers through wellness initiatives to build a healthier, wealthier and more competitive country.

In what ways does the high cost of U.S. health care impact our global competitiveness?

A healthy citizenry is perhaps the primary engine for economic growth and prosperity. Healthy individuals are more productive at work, have lower absenteeism rates and generally are happier. The cost savings to the economy from healthy citizens is huge.

The overwhelming majority of individuals in the U.S. receive coverage through their employer, and health care coverage, which makes up 12 percent of benefits, is the most expensive employer-provided benefit. According to the Council on Foreign Relations, the United States spends in excess of $1.9 trillion on health care annually, which is 134 percent more than the median for OECD countries. Competing in a ‘flat world’ mandates that companies are cost competitive and efficient.

How are companies working to offset these extreme health care costs?

One way is to reduce the reliance on workers. Robots don’t require expensive benefits. The problem is that this results in unemployment, and robots and automation cannot handle every job. A second way is to increase insurance costs borne by employees, which at best is a short-term solution. The third and perhaps best approach is to encourage better health among employees. Companies such as Lockheed and providers such as Wellstar are increasingly adopting wellness programs that emphasize exercise, better nutrition and smoking cessation. General Motors’ Life-Steps health promotion program, for instance, is estimated to have obtained a return on investment of $2 to $3 per dollar spent on the program, while others such as Citibank have seen an ROI of well over $4 per dollar spent on wellness programs.

What actions can insurance providers take to help reduce health care costs?

Insurance companies have long been blamed for everything and especially for not encouraging prevention. Insurers have come to the realization that in addition to adopting technology to reduce errors and waste they must lead the charge for better health awareness and preventive care for the uninsured. In Georgia, for example, Humana’s wellness solutions provide services that help build a culture of wellness through health assessments and health coaching. These wellness initiatives drastically improve the ability to identify diseases before they become more advanced and costly. Through appropriate incentives in the form of lowered premiums and through wellness information and resources, preventive health is becoming central to the health care system in the U.S.

What can individuals do to help lower their employer’s health care costs so the company remains viable?

During tough economic times, preventive care and wellness often take the backseat. This is a big mistake. The only way for us to become competitive again is to have a healthy work force. While employers can provide the incentives and structure, employees must take it upon themselves to take better care of their health. Doing so not only helps them, it also helps their employers and their country. It is the patriotic thing to do.

How would government-mandated universal health coverage affect the current health care environment?

While much has been discussed in terms of the current system versus universal coverage, the debate is moot as far as health costs and resultant global competitiveness of U.S. companies are concerned. Whether it is paid for through taxes or by the employer, the costs ultimately come out of the same pocket, the citizen’s. Some efficiency gains can be wrought out of hospitals and other providers, but is unlikely to make a major dent in costs. Increased emphasis on wellness and preventive care and appropriate incentives to bring it about is the only way, in whichever system we adopt, to generate the needed healthy work force and a competitive economy.

GOVIND HARIHARAN, Ph.D., is chair and professor, Department of Economics, Finance & Quantitative Analysis, Coles College of Business, Kennesaw State University. Reach him at (770) 423-6580, or

Tuesday, 25 November 2008 19:00

New CPA requirements

On July 10, 2008, Governor EdwardRendell signed into law Senate Bill 838,making Pennsylvania the 49th jurisdiction to pass the 150-Hour EducationRequirement for CPAs. Business methodsand tax laws continue to become more complex, and proponents of the law’s newrequirements contend that a five-year degreewill better prepare candidates for the CPAexam and for the expanded role they willplay once they enter the profession.

“The new legislation offers a very promising future for CPAs, employers and business,” says Elizabeth Kolar, MBA, CPA, chairperson, Business Administration Department, Delaware Valley College. “Previousstudies indicate that five-year candidatespass the CPA exam sooner, advance morequickly within the firm and earn significantlymore income over their careers than four-year candidates.”

Smart Business recently spoke to Kolarabout the new requirements and the impacton students, colleges and business.

What factors led to the new requirements?

First, CPAs are required to be knowledgeable of significant changes in accounting,auditing and tax regulations and businessmethods, and environments are becomingmore complex. Second, technologicaladvances continue to impact financial reporting systems and internal control structures,and CPA firms are developing and usingsophisticated IT audit techniques. CPAs arerequired to possess strong technical, communication and analytical skills.

What key changes instituted by Senate Bill838 will take effect Jan. 1, 2012?

The new legislation will require candidatesto possess a bachelor’s degree and at least150 credit hours, including 36 semester credits of accounting-related subjects, to becomecertified. The subjects include accounting,auditing, finance, taxation and business law;candidates can meet the 150-credit-hourrequirement with undergraduate and/orgraduate level coursework. Pennsylvania hasdecided to allow candidates to continue to sitfor the CPA exam with a 120-credit-hourbachelor’s degree. However, candidates will be required to obtain the additional minimum30 credits to be licensed. Candidates will alsobe required to complete 1,600 hours or oneyear of work experience within five years ofthe application date to be certified. In orderto be grandfathered under the old legislation,candidates must pass at least one part of theCPA exam before Dec. 31, 2011.

How will an additional year of trainingimpact colleges and accounting students?

Many colleges and universities have beenpreparing for the new legislation for years bydeveloping MS and MBA programs with concentrations in accounting. These new programs require more experienced faculty andadded costs. Now, colleges and universitiesare facing a significant decline in the numberof qualified Ph.D. candidates in accounting.They will need to consider how to attract andkeep qualified faculty to meet the growingdemands of these programs and also developflexible degree programs to accommodatean evolving student population.

Students can combine an undergraduateaccounting degree with an advanced degree at the same school or another institution orenroll in a combined five-year bachelor’s andmaster’s degree program. While the additional education will result in higher salaries forstudents, the education comes at a price. Notonly will students have to pay for the additional tuition at higher graduate rates, butthey also have to consider the opportunitycost of not going to work after four years.

What role will employers play in smoothingthe transition to the new rules?

Employers should encourage accountingstudents to complete their fifth year of education before starting a career in accounting.Students can partially finance their fifth yearof education through internship programs,where they can receive valuable work experience that will count toward the fulfillmentof work experience requirements to becomecertified. Firms will, in turn, be able to satisfytheir staffing needs during the demandingbusy season. Employers may be tempted tohire out of four-year programs, expectingtheir new hires to pursue the additional credits part-time, but many employees will findthe workload too demanding. Employersshould also expect to be offering higher starting salaries to students graduating from five-year programs.

What long-term benefits will the new rulesbring to CPAs, employers and businesses?

Employers can expect their five-yeardegree candidates to be able to focus ontheir careers sooner and perform better,both immediately and in the long term.Pennsylvania CPAs will qualify for substantial equivalency, giving them the ability topractice across jurisdictions easily.

We expect significant changes in the globalbusiness environment. The SEC is considering the adoption of global accounting standards — International Financial ReportingStandards (IFRS) — by U.S. companies by2014. This and recent developments in theglobal economy reinforce the need for moreeducation of our future professionals.

ELIZABETH KOLAR, MBA, CPA (NY), is chairperson, Business Administration Department, Delaware Valley College. Reach her at (215)489-2374 or She recently received the Pennsylvania Institute of Certified Public Accountants OutstandingEducator of the Year Award and the Distinguished Faculty Member of the Year Award from Delaware Valley College.

Tuesday, 26 August 2008 20:00

Innovate or wither

While some executives debate the meaning of innovation, many have made it one of their top three initiatives for 2008.

The use of innovation as a competitive advantage continues to evolve as more companies tap their own creativity, think differently than competitors, and build new models and ways of doing business. Companies who successfully tap their creative capital have discovered that innovation really is a cultural attitude. But to build this culture, a number of obstacles may need to be overcome.

“The top three barriers to innovation are resistance to change, lack of time and fear of risk-taking,” says Dr. Gary Selden, associate professor of marketing and professional sales, Center for Business Innovation and Creativity, Center for Professional Selling, Coles College of Business, Kennesaw State University. “It’s up to the CEOs and presidents to remove these barriers and supply the driving force behind the innovation culture in their companies.”

Smart Business recently learned more from Selden and Professor Harry Vardis, co-director, Center for Business Innovation and Creativity, about how to look inward for creativity and how to create a culture to mitigate the employee fear factor.

Why is it important to mine your staff for new ideas?

In today’s hypercompetitive environment, the only real advantage may be to be more creative than your competition, not only around new products but also around processes, ways to go to market, positioning, project management and more. People are the key to creative solutions. What better source for new ideas than your own staff, people who understand who you are and what you do well? A good example of how to mine your staff for new ideas is Cargill, a meat packing company. Cargill is in a business that, you would think, might be a difficult incubator for employee creativity. But it is a very innovative company. The company listens and selectively harvests the best ideas from their staff. This simple act is responsible for ownership, support and newness coming from inside the box and not always from the outside.

What can go wrong if employees’ innovation and creativity are hindered?

You will wither away and die. Innovate or die is a very appropriate way to explain what happens to companies who are not willing to innovate. You can get innovation from outside resources, but you better make sure they have your best interests in mind.

In companies where employee innovation is hindered, research shows innovation initiatives will be limited. People need to grow in order to meet the needs of corporate America. They also need to grow to meet their own needs, and their greatest potential for growth is through utilizing their creativity for new ideas and to take new approaches to living.

What are the consequences if an employee’s ideas don’t work out?

Who says that all of an employee’s ideas are going to be right and that all ideas work out? Thomas Edison failed a thousand times before he invented a light bulb. His comment after a thousand failures was, ‘Well, now we know a thousand ways not to make the light bulb.’ The point is not whether the ideas work out or do not work out; the point is that by listening to ideas and by collecting them, you can select those that might work. And then, through trial and error or some other process, and by using the right criteria, you can arrive at the winners.

How do you entice employees to come forward with ideas?

Our most recent study has a lot on this.

You’ve got to make sure you have the right culture and a CEO who is willing to listen. Next, you’ve got to have a willingness to take risks, and a process that rewards and recognizes the value of an employee who has a good idea. It’s also crucial to foster support from your group and hire people who are creative. Companies seeking the innovation culture must have metrics in place to measure the results of innovation efforts and also must utilize good communication models. You should have lines of communications established at all levels to deal with risk or failures so your employees do not feel threatened.

How can innovation and creativity enhance a company?

Creativity and innovation are now core competencies in growing organizations. It helps to think of creativity as the process and innovation as the end product. If by enhancing we are talking about making the company richer, here is the question to ask yourself that will provide the answer: Can you survive by always selling the same identical product without any innovation? Most likely, you will say no. So you have a choice — either you innovate or someone else will do it for you, and then you’ll have to copy that innovation. So innovation is the survival lifesaver of a company and also the way to move into the future. Creativity is merely the engine that gets you moving.

DR. GARY L. SELDEN is associate professor of marketing and professional sales, Center for Business Innovation and Creativity, Center for Professional Selling, Coles College of Business, Kennesaw State University. Reach him at or (770) 499-3191. PROFESSOR HARRY VARDIS is co-director, Center for Business Innovation and Creativity. Reach him at (404) 285-1086 or

Monday, 26 May 2008 20:00

Don’t be the last to know

When a poor leadership style is revealed by climate surveys or 360 feedback, ugly symptoms like frequent turnover and low morale may already have a foothold in the company.

There are many ineffective leadership styles — from being too collaborative, too analytical, too controlling or too slow — that can send employees running to the exits.

“One of the most difficult styles for teams is when the leader is perceived as arrogant and self-serving,” says Linda Miller, global liaison for coaching, The Ken Blanchard Companies. “This style often results in a team that is demoralized or stalled in its development toward self-reliance because the leader wants to be overly involved.”

Smart Business recently spoke with Miller about how executive coaching, if properly sold and embraced, can help struggling leaders recognize behaviors like arrogance that, when changed, create opportunities for exponential personal and team growth.

How is an executive best sold on a coaching program?

Especially with high-level leaders, it’s important to position executive coaching as an investment, based on wanting them to progress upward in the company. Even when behaviors need to be addressed, positioning coaching as an investment rather than as a punishment creates higher buy-in from the leader.

One of the first areas to address with arrogant and self-serving leaders is their level of self-awareness. Often with arrogance, the level of self-awareness is low, even though the leader may not agree that it’s low. Denial might be another way to put it. Getting this leader’s attention is a first step, and this can occur through multirater (360) feedback tools. Part of the purpose and goal of coaching is to get agreement that the leader is behaving in a way that is having an unintended impact. If the leader doesn’t agree that behaviors need to change, it limits the success of the coaching. The success of the coaching improves when the leader is fully engaged with the process and recognizes that behaviors must change.

What happens in the early phases of the coach/leader relationship?

In the interview and early phases of coaching, rapport and credibility must be established within the first few minutes. Whether the initial coaching contacts are by telephone or face to face, there has to be a sense that there is a good connection and partnership for a working relationship. Part of this is establishing a clear agreement about what coaching is and is not, what to expect, logistics, etc. It’s also important to establish the leader’s level of buy-in. For example, is the leader complying with the coaching because he or she was required to be coached, or does the leader want to be coached, knowing that he or she is engaging in the process as a choice for his or her own development? Once this is determined, it’s time to identify and clarify the focus for the coaching. Identifying at least two to three clear objectives for coaching, based on feedback, is best. Many leaders decide to invite their leader or HR professional into this conversation to ensure the correct objectives are being addressed — for the leader as well as the organization.

How do accomplished leaders first react to the coaching experience?

There are a variety of responses. Many have no idea what to expect. Some don’t want the truth and are reluctant or defensive. Others embrace the coaching eagerly. I’ve been asked, ‘What makes you credible to coach me, and why should I talk with you?’ Another commented, ‘I have no idea what coaching is or why I’m here. Am I in trouble?’ Another said, ‘I know where I want to go in this company, but I’m not getting there. I’m committed to moving forward.’ In a best-case scenario, the leader will be open with the coach and express concerns, skepticism or hope so that the responses can be addressed early.

What benefits await leaders who make the commitment to coaching?

Leaders who embrace coaching can find themselves growing exponentially. Remember, we are talking about high-functioning people. When they embrace coaching, they often recognize behaviors or results they hadn’t seen before, and they can use this to make substantial changes in their team.

A great example is the senior leader who knew he was going to be tapped for an executive position, and coaching was offered to him for his development. Many years before, this person had seriously offended an executive leader in the organization and now this executive was blocking his promotion. As part of the coaching, the leader decided that he needed to clean up this old mess, and he spent several coaching sessions planning his approach. When he called the executive and took responsibility for the situation that had occurred, he was amazed at the executive’s response. Several months later, the leader was tapped for the executive position and ultimately found out that his former adversary had become one of his biggest advocates. This is just one of the prizes that can await those who embrace coaching.

LINDA MILLER is global liaison for coaching at The Ken Blanchard Companies and co-author of a new book entitled, “Coaching in Organizations: Best Coaching Practices from The Ken Blanchard Companies.” Reach her through The Ken Blanchard Companies Web site at

Friday, 25 April 2008 20:00

The best bosses

Take a moment to remember your favorite boss — the person who most inspired you to be your best. Have you ever examined further the traits you most admired in him or her? Looking past that person’s awards and successes, you’ll likely uncover a caring leader, skilled in relationship management.

So what creates the foundation for a caring and effective style for leading people to be their best?

“It’s all about healthy, successful, effective relationships,” says Ann Phillips, senior consulting partner, The Ken Blanchard Companies, in San Diego. “And it’s our relationships — positive or negative — that determine the outcomes and results we get.”

Smart Business recently spoke with Phillips about certain key concepts explained in Ken Blanchard’s book, “Whale Done,” including “best boss activities” and the three keys to positive relationships.

What is putting even more focus on leadership activities?

According to a 2002 study by The Conference Board, just over half of all workers in the U.S. are satisfied with their jobs, compared to 59 percent back in 1995. So today’s leaders have to develop strategies around increasing employee retention and keeping the best talent. We talk a lot about improving service to your team members and customers because employees who feel appreciated and fairly treated take better care of one another and your customers. Ken Blanchard said, ‘The one thing your competition can never steal from you is the relationship you have with your people and the relationship they have with your customers.’

What is the basis for a good relationship-building strategy?

There are three keys to positive relationships, including building trust, accentuating the positive and redirecting the energy when mistakes are made. To build trust, your team should perceive that you mean no harm. For this to happen, you need to be visible, with a physical presence. Another key is to make yourself known by sharing some personal experience with your followers and engaging them in meaningful dialogue. And you’ve got to follow up this dialogue by maintaining consistency between your words and your deeds. Finally, the best leaders are always asking themselves, ‘How can I help people grow?’ You’ve got to create a framework to educate and train in a scenario that allows risks and encourages experimentation.

Should leaders focus on improving negative behavior or accentuating the positives?

One of the most effective ways to improve negative behavior is to focus on positive behavior. You absolutely need to accentuate the positives, with the mindset of catching people doing things right or at least almost right. You first may need to undo your ‘gotcha’ history. Do you make time to talk? Do you thoroughly explain the changes you wish to make? And are you patient with yourself and others?

The groundwork for effective praising starts with immediately telling people exactly what they did right or almost right, why you care, and what the impact of their actions was. This also is a great time to ask why they did it and learn their motivation. Finally, encourage them to keep up the good work and remember that the reward for good work should not be more work.

How should leaders respond to mistakes?

Leaders often struggle with this: How do you redirect the energy when mistakes are made? Discipline should be reserved for ‘won’t do’ behavior, not ‘can’t do’ behavior. Positive consequences and sustainability strategies are important because 85 to 90 percent of what impacts future behavior comes from consequences — what happens after somebody does something. Leaders need to learn that sustaining performance requires learning the effect of four consequences: No response, negative response, positive response and redirection. We find that most leaders focus on the first two, when the biggest impact really comes from the last two.

How is behavior best redirected?

It’s important to describe the error or problem as soon as possible — clearly and without blame — and describe to them the negative impact of their actions. If it’s appropriate, take the blame for not making the task clear. Go over the task in detail and make sure it is clearly understood, and express your continuing trust and confidence in the person’s ability to master the task.

What are proven ‘best boss’ activities for leading people to be their best?

Try looking back at how you became the leader you are today. Think of a person you believe was your best boss and ask yourself what made that person your best boss. Did he provide tools and resources? Did he praise and recognize? Was she a visionary? Did she challenge you? This person may have had those and many other admirable qualities, but if you look more closely, you will realize he or she genuinely cared about you as a person, not only as an employee. The journey to improving relationships and leading people to be their best may not always be easy, but it will surely be worth it when they look back and remember you as their best boss.

ANN PHILLIPS is a senior consulting partner with The Ken Blanchard Companies in San Diego. Reach her through The Ken Blanchard Companies Web site at

Sunday, 24 February 2008 19:00

Operational vs. strategic

It’s no accident that companies like Microsoft, Starbucks and Southwest Airlines are giants in their industries. They continue to grow because people get charged up to work in the cultures these organizations present.

“Whenever you talk to people at companies who are chasing some kind of industry leader, they always think the other company has a better strategy,” says Scott Blanchard, executive vice president, Client Solutions, The Ken Blanchard Companies in San Diego. “But what these leading companies typically have is a better run organization, and their strategy involves people.”

Smart Business spoke with Blanchard about the functions of strategic leadership and operational leadership and how their impact on employee happiness and customer loyalty cannot be ignored.

When do the two sides of leadership emerge?

In the beginning, the founders’ visions have to be crystal clear to form the organization. Most of the energies have to be around strategic leadership — entrepreneuring, or inventing, the business. As a company grows and develops and starts to create some volume, they then need to up the focus on operational leadership. It’s not necessary in the beginning because it’s so small and so flat, but as the organization grows in size and complexity, operational leadership becomes more important. You have to be careful though that you don’t kill the entrepreneurial spirit. Look at Google and eBay — they’re big companies, but growth hasn’t killed their cultures of spirit and creativity.

What variables do the two sides of leadership affect?

When we took a comprehensive look at the research and studied how everything related, we discovered that there were, in fact, two kinds of leadership out there, and categories that we originally called employee success, customer success and organizational success were actually much broader than we thought. So we created new labels — buckets or catch-alls — for all kinds of different measures of the three variables.

We found that operational leadership has a direct, positive and/or negative effect on hard and soft measures of employee passion or employee success. It matters to the way people feel about the company, the way they think about the company, and the memories and the meaning they create working there. It also has a very strong impact on customer success because the operational managers make decisions around the products and services you offer, and they’re the ones ultimately responsible for the quality of the service and the customer experience. Operational leadership has less of an effect on organizational vitality or success because that primarily comes from your customers and employees.

What is the most important connection between the two sides of leadership and the variables?

The connection between employee passion and customer devotion is two-way and is so strong that any prudent business leader cannot ignore it. Many organizations are run as if those dynamics don’t matter very much. Leaders need to understand how important it is to create the right kind of culture, hire good managers, and provide those managers with the skills and abilities to make employees happy, productive and loyal — instead of seemingly doing the opposite.

It starts with strategic leadership. If there’s not a declared value — an imperative within the company that says we are going to be a really healthy company — then by default, the natural dynamics of humans in organizations emerge. I often say that the only natural things that happen in an organization are fear, frustration, inefficiency, friction and political mayhem. If you want to make something positive happen, you need a clear vision and a plan, and you need to stick to the plan.

How do the two sides of leadership impact each other?

They have to support each other. It’s a cascading model — the vision and direction set at the top need to cascade down to the senior leaders, middle managers, managers who run the business, supervisors and down to the people at the front lines. When those people get information, they need to share it, and that information needs to flow back up to the top. In companies that don’t work, there is a block in energy, information and influence that goes down and up. That’s where companies like Sears ran into so much trouble because there were nearly a dozen layers between the president and the store manager.

What should CEOs ask themselves about their organizations?

I often refer to 13 questions that CEOs should consider. Some of the toughest questions include: Are your leaders and managers held accountable for employee morale? Do your employees feel and know their work is meaningful and important? Do your employees perceive that top management believes, communicates and behaves as if people are critically important to the organization’s success? Answering no to these questions may indicate your organization is out of alignment — with energies spent on things like politics and resource allocation instead of delivering better products and services to your customers.

SCOTT BLANCHARD is executive vice president, Client Solutions, with The Ken Blanchard Companies in San Diego. Reach him through The Ken Blanchard Companies Web site at

Tuesday, 29 January 2008 19:00

Follow the leader

Winning growth initiatives depends heavily on employee buy-in. Leaders often start strong out of the blocks by communicating the results they desire or even the process they want used. But when an initiative is handed off to the team, things get a bit more complicated.

So how do the best leaders gain buy-in from their followers?

“It’s really about creating a belief that everyone has an opportunity to fit in and contribute,” says Sheb True, Ph.D., director of Graduate Business Programs, Coles College of Business. “In the short term, you can have unhappy followers, but in the long term, you need happy followers, and successful leaders understand where that happiness comes from.”

Smart Business spoke with True about how the best leaders resist the urge to overcontrol behavior, work hard to surface employee concerns, and promote a framework of dialogue and collaboration.

What symptoms within an organization hint at poor leadership?

A sure sign of leadership deficiencies is when there’s no sense or understanding of the values of your organization. Everyone needs to understand the common values in terms of what you’re trying to accomplish, why you’re trying to accomplish something or even how it will be tackled. I think another symptom is when leaders focus too much on the controlling of behaviors, or micromanagement, rather than forging a synergistic orientation where employees at all levels perceive they can and they do contribute to growth — whether it’s from new ideas, new initiatives or continuous improvement. Low morale is a symptom tied to these leadership deficiencies.

What builds good morale?

If there’s low morale, you can point to a lot of bad behaviors within the organization, but the buck stops at the leadership level. It’s not to say that everyone should be happy all of the time or you have to cater to every need. High morale occurs when your stakeholders understand where they fit in and believe what they’re doing is important. It’s different for each function, level and department, but each follower still needs to understand where he or she fits in. You’ve got to know what they need so they want to contribute in the long run.

How can leaders transition to new growth models and get others to buy in?

You can grow in terms of sales, you can grow in terms of quality, and you have to give your people the opportunity to grow, as well. Growth naturally allows more opportunities to contribute, and that’s where buy-in comes into play. You should communicate the value of growth and how it represents opportunities for everyone — from compensation, growth of responsibility and the intrinsic value of knowing that everyone has the potential to contribute. If you can do that, employees will be asking, ‘How can I bring more to this organization and contribute to our goals and values?’

Are the best leaders rigid or sensitive to how their actions impact others?

The quote, ‘With great power comes great responsibility,’ tells the tale. You are responsible to those who follow you. Leadership is about making decisions, about making choices and putting those choices into action. You have to be sensitive to how your actions are going to impact others, including the environment, society, customers or your employees. Initially, you do need to be rigid to the organizational values, but that implies you were very careful in how you determined and established the values of the organization. At the same time, you must be flexible in terms of how the organization can accomplish something because others may have different approaches to achieve the same goals. And that’s where you have to be open to new ideas.

How can leaders surface and mitigate concerns?

Leadership is about communicating and fostering communication throughout the organization. You need discourse and dialogue — and not just with upper management. It allows you to surface concerns and creates an environment of collaboration to solve them, as long as the shared goal is to solve them and not just talk without taking action. You have to trust the organization’s ability and desire to solve the issues.

What are tips to improve leadership skills?

The big ones are around fairness and communication because improvement in these areas will build trust. Fair doesn’t necessarily mean equal, but you should work to improve a sense of fairness in the organization. Communication skills can always be improved. Look at your communication model — you should see clear channels of communication from the leaders to the followers, followers to leaders and productive dialogue between your followers. Promoting fairness and communication will create that trust, improve your credibility, and lead to follower buy-in and more successful growth initiatives. <<

SHEB TRUE, Ph.D., is director of Graduate Business Programs, Coles College of Business, Kennesaw State University. Reach him at (770) 423-6076 or

Wednesday, 26 December 2007 19:00

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Some business buzzwords make a big splash and fall quickly out of favor. But when they denote sound practices or improved processes, they can gain traction and lead companies to new ways of doing business. Such is the case with “econometrics.”

“Econometrics utilizes statistics, data collection and economic theory to observe and implement real world application and analysis,” says Don Sabbarese, Ph.D., director, Econometric Center, Kennesaw State University. “We chose the name because it defines the essence of what we do.”

Smart Business spoke with Sabbarese about how economic centers like Kennesaw State University’s supply economists and purchasing managers with crucial indicators.

What are the Econometric Center’s main purposes?

Our niche is collecting, analyzing and disseminating important economic data and information to the private and governmental sectors to enhance their decision-making. The center is a valuable resource to businesses and governments from the local, state and Southeast region. In addition, it increases the access these entities have to the broader resources of the faculty of the Coles College of Business.

How does the Econometric Center interact with the businesses in the region?

The center provides businesses in the region — through various news media outlets and direct presentations — with analyses of the current economic environment, including seven monthly Purchasing Manager Index Reports for Georgia, Alabama, Florida, Tennessee, Mississippi, Louisiana and the Southeast. The reports track and analyze trends and activity of new orders, production, employment, supplier delivery time, finished goods inventories and commodity prices. It provides purchasing managers and economists with one of the earliest indicators of cyclical change and direction. It, like the National Index, leads other related data releases by four weeks. In addition, the Econometric Center has conducted biannual manufacturing industry studies in conjunction with the Georgia Industry Association, Georgia Quick Start and Habif, Arogeti & Wynne LLP.

What is PriceQuantics and how does it assist purchasing managers?

Understanding the commodity price trend is critical for any business or government analyzing commodity price movements to control the cost of inputs used in its production process. Historical, current and future commodity price information enhances the ability to identify trends and conditions for better decision-making. PriceQuantics offers users a valuable resource for commodity price trends and forecasting.

We’re currently working on the second version of PriceQuantics. Its new, Web-based infrastructure intelligently collects, analyzes and forecasts price changes by applying advanced statistics and computing to a database of 5,000 commodities and products sold in the U.S. It offers decision-makers, such as purchasing managers, quick access to the information.

What commodities are tracked?

There are more than 5,000 products and commodities downloaded from various online sources including the Bureau of Labor Statistics and the Commerce Department. It’s a huge array, and not just raw commodities. For example, we track the prices on different types of steel. We’re trying to design it in a way that meets the needs of people who require that kind of information.

What types of companies are prime candidates for a partnership with the Econometric Center?

Small- to mid-size companies, which lack the in-house resources for the types of services the Econometric Center offers, are more typical partners. However, the center’s expertise is available to partner with any private sector or government institution.

How are the students involved, and how has the center impacted hiring trends?

The Econometric Center has utilized student interns in the past. Student involvement is typically tied to a specific project. Upon request by businesses, the center will occasionally assist to identify and recommend qualified students.

What are future goals for the center?

We’re working to strengthen ties with the supply chain community in the Southeast. Besides the PMI report and PriceQuantics, we plan to include other studies and services tailored to the community’s needs that demand econometrics and/or advanced statistics. Another interesting niche to work for includes industry groups and associations. As the center builds up its knowledge base and information infrastructure, we will be able to prepare monthly industry analyses based on sales, inventories, prices and economic indicators.

DONALD SABBARESE, Ph.D., is director of the Econometric Center, Coles College of Business, Kennesaw State University. Reach him at (770) 423-6094 or

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