The internal audit: It’s a necessary part of conducting business that, done right, can at once assess operations, identify areas for improvement, manage risks and help maintain compliance. Now more than ever, audit committees, chief financial officers and other stakeholders need greater assurance that internal controls and risk management procedures are effective and efficient.
Internal auditors can help restore stakeholder confidence and reduce the cost of the audit process by adopting four key principles of a more progressive internal audit model, says Larry Rieger, a partner at Crowe Horwath LLP.
Smart Business spoke to Rieger about deriving greater value from an internal audit function that is more central to building financial and operational excellence with confidence.
What are the main concerns that may not be addressed by current audit models?
Crowe Horwath LLP and partner organizations commissioned a set of three surveys to determine whether companies’ internal audit groups were meeting current business needs. In the survey, stakeholders indicated that internal auditors excelled in reviewing financial controls and transactions and testing past events; what was lacking was the ability to inform stakeholders of the company’s current status and what should be done to improve in the future.
Most audit committee members (75 percent of the respondents) echoed the stakeholders’ concerns by stating that risk management practices were an integral part of a company’s ability to avoid and/or plan for surprises. The ideal audit model would not just provide for traditional compliance audits but would address these concerns surrounding assurance, business performance processes and risk management efforts.
What specific changes should internal audit departments make?
Auditors will need to be smarter about where they spend their time by relying more on automated tools and using workflow methods that allow them to focus on the high-level controls.
- Leveraging the work of others is one way that internal auditors can be more efficient with their processes and time. They can rely on the monitoring metrics and reporting that business managers are already using to manage their operations. Internal auditors can determine which of these reports they can accurately use during assurance audits and home in on the areas where problems are indicated.
- When businesses are better managed, process owners can be held accountable for developing and owning controls at the business level and the internal auditors are unburdened. Internal auditors are then able to focus more on the principles of the new internal audit model.
- Audit executives must focus resources on the constant review and enforcement of the four principles. Managing resource demands wisely allows for internal auditors to address areas of high and emerging risk while also providing continuous coverage to the principles of the new audit model.
What are the four principles of a progressive internal audit model?
Compliance: This traditional internal audit role can be streamlined through closer collaboration with management. Audit departments can save time and resources when testing past events and transactions to determine compliance with laws and regulations by taking advantage of reports that managers already use to monitor controls in their unit.
By relying on the work of business unit managers as a starting point, auditors can focus on the issues that are red-flagged during the audit of the control processes. For example, reports generated by a business’s IT department can help auditors to determine whether control processes in place sufficiently safeguard security and adequately provide for an appropriate segregation of duties.
Assurance: Continuous monitoring systems generating real-time reports allow anything outside the bounds of tolerance to be detected as early as possible. By regularly reviewing control reports generated by a system, auditors can provide a level of continuous assurance that supports stakeholder confidence that everything is under control at all times. For example, if expenses in a certain business unit are out of line, the monitoring system at the business-unit level would send an e-mail to the appropriate person. Or, the accounts of delinquent customers could be flagged so that no new sales would be made to those customers.
While a continuous monitoring system does require an upfront investment, it pays off by lessening the burden on the internal auditors’ resources, allowing them to focus on the high-level items.
Business performance improvements: An area that is often lacking in the audit function is the ability to actually improve business operations. By identifying problems, and then taking it a step further by recommending ways to improve, the internal audit can and should add value to the organization as a whole. Comparing their reports to benchmarks and best practices, auditors have the knowledge to support such recommendations as shifts in resources or operating procedures, or new technology investments.
Risk identification: Again, auditors can tap into information that already exists in business units — this time regarding each unit’s own risk-management activities that are already in place. This makes the process of ongoing monitoring of risk less time-consuming and more integrated. Key risks are always changing; stakeholders require as much knowledge as possible concerning the company’s risk exposure as a whole within a business environment that is constantly in flux.
Larry Rieger, CPA, is a partner at Crowe Horwath LLP. Reach him at (214) 574-1000 or email@example.com.
With the vast array of telecommunications choices and unproven technologies available to businesses, how can they determine which solutions will work to meet their unique operational needs and be the most cost-effective?
“The variety of options available to large companies only adds to the complexity. There are too many competing carriers and technologies,” says Shane Heise, president of Simplify Inc., a firm that helps large multi-location corporations simplify and optimize their communications lifecycle management. “It makes for a world where companies are forced into being reactionary and devoting too many resources to deal with the chaos. This is the opposite of any best-practices approach; but it’s the norm that the industry creates.”
Smart Business spoke with Heise about how to make the right choices that fit your telecommunications needs.
What telecommunications challenges are companies facing right now?
There is a lot of uncertainty in the marketplace right now when it comes to telecommunications. Much of that is due to consolidation in the industry. Additionally, the traditional way of buying telecommunications (local, long distance and data products) has changed because of different technologies available today, some to which people have never before had access.
Most companies today hear buzzwords like VoIP and SIP, but they don’t have anybody on staff with the expertise to even know if those are the best strategies for them. Are they going to save you money long-term? What is the return on investment? Could going to one of these new technologies increase productivity?
Can you really rely on your carrier for these answers? They aren’t going to give you an honest appraisal of their products compared to those of their competitors. The key is opening your mind and saying, ‘I do have those challenges and I know there are a lot of technologies out there, but I don’t know how to uncover what’s best for me.’
How are companies dealing with these challenges?
The traditional telecommunications provider’s tactic is to lock you up in a long-term contract, or try to consolidate all your spend with them as a single provider. They tell you that the more you spend, the better your price points.
However, that’s not necessarily true. You don’t have to give everything to one carrier to get the best price. You don’t have to sign high-commitment, long-term contracts with a single provider. You can consolidate everything into a handful of companies and still get the best solution at the best price, while still doing what is right for your business instead of just doing things the way they’ve always been done.
How can this be done?
Instead of working with an account representative that proposes the same old contract renewal with a few minor changes, consider using a dashboard that identifies trends and assesses your current situation. Then take action to improve technology, reduce cost, etc. You can proactively identify, assess and take action, or reactively work within the constraints of a traditional contract renewal. Which would you rather do? We recommend using a strategic solution process that puts together short- and long-term technical, cost-effective solutions.
How does an executive team ensure that they are optimized?
Great question. You need a collaborative process that leads to a strategic solution. The telcos are not invested in your business. They aren’t meeting as a team and brainstorming new solutions for you. They are proposing options that benefit them but not necessarily you. They may cooperate, but they can’t collaborate. Instead of being in reactionary mode, renegotiating and renewing each contract, companies can ensure optimization by peeling back the layers, assessing all of the telecom spend and bringing an objective voice into the conversation. It’s about collaboration. Ultimately, contract negotiation is part of the process and some renewals may be appropriate. The question is whether you arrive at your strategy based on objective input from a collaborative partner or merely a price quote from a cooperative vendor. The difference is vast. We’re trying to open the eyes of executives to what a collaborative relationship looks like and can mean to the bottom line.
How can you be sure the approach you are taking is truly strategic?
The heart of it is having the right analytics, the right insight into the provider world, and a commitment to an over- arching, specific direction. The dynamics of the industry are continuing to evolve and new technologies are available, but who has time to test all the options? Ultimately, you need to know players in the industry who have both the insight to provide guidance and the accountability to be responsible for the direction they suggest. This goes beyond the average consultant. Companies need a trusted adviser. Most successful executives wouldn’t dare go through life without a trusted wealth manager. Why would they allow the business to go without a trusted adviser for such a critical service as communications? Executives don’t just need a consultant. They need someone whose neck is on the line for any solution they suggest. They need a trusted adviser.
As a young lawyer, Terry Conner was simply trying to do the best job he possibly could and keep his nose clean, but as he saw Haynes and Boone LLP grow, he started to notice more of the nuances of the firm.
“In 1970, we had just a handful of lawyers, but to see how the firm was able to grow and have good lawyers and good clients in a market that was originally dominated by much larger firms, ... helped reinforce the cultural tenets. So probably by the time I was becoming a partner in the early ’80s, I understood the power of the client focus,” Conner says. At the 1,100-emplyoee law firm, success has come as a result of a relentless and singular cultural focus — focusing on the client.
“Culture is very, very key, and it’s very relevant to our people but also to our clients,” says the managing partner. “It’s not something that can be contrived or invented. It really has to be part of the fabric of the company or the firm. Ours is the product of 40 years of consistency and a culture emphasis.”
Conner says in order for Haynes and Boone to maintain its success and cultural focus, it’s critical to hire quality people who will fit with the culture and then continue to drive it.
“It’s not something that happens overnight,” Conner says. “It’s something that is built over time. We were fortunate that our founders began to create this culture 40 years ago, and it needs [to be] constantly reinforced and discussed.”
Hire quality people
One of the keys for Conner is to make sure that he brings in people who are going to enhance the client-centric culture and not overpower it.
He looks for people who can thrive in a team environment and also think entrepreneurially. That’s a tall order, but he says you can look at their experience to get an idea.
“You look at their background and things that they have done, and you ask questions,” he says. “Is this someone who has done things a little bit different? Who has spent time overseas? Who has helped in a community effort? Who has taken the ball and run with it in an organization? These are all indicators of someone who can be entrepreneurial and help you come up with new ways of doing things.”
For example, he recalls one job candidate who had lived in China for a while between undergraduate and law school. He had taken the time to learn the language and the culture, and that experience told Conner that he understood the global business environment and was willing to take the time to learn about such things in order to be more effective.
You also want to ask the right questions to get to the heart of that person.
“We don’t try to ask trick questions, but you ask questions that can’t be answered with a yes or no,” he says. “In other words, you want someone to talk about what they consider to be important, what they think their strengths are and how they think they can contribute to the organization. Those are things that give someone an opportunity to really express who they are and what’s important.”
He says it’s also important to hire people who will truly focus on your customers or clients.
“Is this someone who really takes to heart the importance of serving great clients?” he says. “The most successful lawyers in our firm are those that have gotten to know our clients, our clients’ business and our clients’ industries. Someone who has really vested that time and attention into clients is someone we really look to.”
Again, it’s important to ask the right questions to find out if they’re truly focused on customers.
“What you do is you talk about how the client relationship is developed,” Conner says. “If someone’s client is ABC, say, ‘Sally, tell us about how you got to know ABC, how your work has developed, how you got to know the executives at the company. Talk about what the challenges are for that company and how that practice has been aligned with the client’s goals in order to help the client achieve what the client wants to achieve.’
“Talk about particular client relationships and how they have developed over time, and you get a good sense to know if someone has that long-term relationship.”
He also looks for people who don’t only do what the job description requires.
“You’re looking for someone who has shown a consistent ability and willingness to go above and beyond,” he says.
For example, he looks for lawyers who have been active in speaking engagements or writing scholarly articles and for people who have been active in their communities.
Lastly, he wants someone who can work effectively on a team and also enjoys a collaborative environment.
“Ask questions about it,” he says. “When you’re going out to develop business or to work on a project, how often have you involved other team members in the firm?’”
This is central to how the firm operates. You can never be completely sure that you’ve hired someone who will be perfect, but by taking these steps and then seeing how they operate in real situations, you’ll quickly learn if they’re a team player.
“Seeing how someone responds under pressure is always a (really) good test for how well they work in a teamwork environment,” he says.
Focus on clients
With the right people, the firm can have a total focus on clients.
Conner creates teams of lawyers for each client so nobody can say a client is his and that he alone handles that client.
“The starting point for almost everything we do, when we’re doing it right, is what’s in the best interest of the client,” he says.
“Build teams and create teams for client service.”
For example, if a client has a project involving an investment operation in Mexico, he would want a team of lawyers with skill sets to help that problem — lawyers from both the U.S. and Mexico and those specializing in financial issues and any other practices related to the issue.
Once you can get people thinking in terms of a team, it becomes easier to actually focus on your customers.
“You learn a lot from clients from working with them on projects,” he says. “I think it goes beyond just the project. You need to invest time in the client relationship, and that includes spending time that’s not going to be billable to learn about the client’s business and learning about their industry — sitting down and talking to them about their goals, talking about the challenges they face.”
For example, Conner may sit down with a customer knowing that government regulations in his industry are changing, and he may ask that customer how he sees that affecting his business, what kinds of issues he thinks it will present and how that may change his legal needs going forward.
You also want to make sure you don’t dominate a client meeting by talking about only what you can do for his or her company.
“It’s talking first about their goals,” he says. “So many professional service firms want to come in and talk about what they do, but what we do has value only from the standpoint of what’s important to the clients, (what are) the clients’ goals, what are they trying to achieve strategically, what are some of the issues they feel like they’re going to encounter the next couple of years and how will changes in the global economy affect their marketplace?”
In addition to these, he says it’s also important to ask clients about topics that they typically may be intimidated to bring up, such as billing.
“We’re glad to talk about it,” Conner says. “Tell us what’s important from your standpoint about how billing is managed. Those are the questions to really start to assess what’s important to the client.”
In addition to talking to the client directly, you also want to gather information about the client’s industry yourself.
“It’s one thing to be able to identify what has already affected the client, but what we’re trying to do by focusing on business intelligence is really understand the changes that are coming,” he says. “That can be for a client, it can be for an industry, it can be for a practice. As you develop a good picture of how those changes — economic, political, legislative — are going to affect your clients, then you can begin to build a valid strategy that takes that into account.”
For example, he says it’s important for his team to understand how the expansion of international work between Asia and the United States and also between the United States and Latin America will develop over the next few years. He says many companies will be involved in or affected by these initiatives, so by having his team members well-versed on the topic, they can serve as an additional resource and help foresee issues clients may have surrounding these efforts.
Making such a strong focus on client service has helped the firm over the past few decades, but it has also helped it excel within the industry even in recent years, having been named as a finalist for the Dallas Business Journal’s Best Places to Work competition.
“The focus on clients as opposed to a focus on how much money have you made for me today is very liberating,” Conner says. “It’s something that our personnel can relate to, and it’s a higher mission than simply how much money did you make this quarter.”
But money hasn’t been an issue, as the firm generated $306.5 million in gross revenue last year.
“Obviously we’re in business, and we’re conservatively managed, and we have a strong balance sheet and do well financially, but I think our personnel really appreciate and respond to the fact that we put the interest of the client first and emphasize the teamwork culture and not just how much money have we made today,” he says. “It helps us to recruit, and it helps us to retain outstanding personnel, and I think also it’s in the best interest of the client, so it’s a kind of symbiotic relationship between culture and client focus.”
How to reach: Haynes and Boone LLP, (214) 651-5000 or www.haynesboone.com
In the 10 years since she founded Enseo Inc., Vanessa Ogle has relied on her vision and drive to build her company into a leading provider of hardware and software solutions for the digital media engines used in hotels, stadiums and digital signage systems.
While Enseo’s products are cutting-edge innovation, Ogle says Enseo is really an engineering-focused firm, with more than 70 percent of its staffing allocated to engineering design and development activities.
When she founded the company in 2000, her goal was straightforward: assemble a team of experts who could imagine, create and market high-tech products for specific vertical markets. And, because of this focus, Ogle’s company has since been able to roll out such products as retail digital signage, cinema digital signage systems (ads, menus and preshow displays), interactive kiosks, stadium and arena displays, airport flight departure and arrival displays, hotel systems’ video-on-demand and pay-per-view systems, as well as HDTV tuners for hospitality organizations.
Enseo’s success is in the results: The company has more than 250,000 product installations of HD media controllers in the U.S. and 20 other countries worldwide. It has become the largest provider of commercial HDTV tuners with numerous display manufacturers, including Panasonic, LG, Samsung and Sharp. More than 6,000 screens in digital cinema use Enseo’s products. Hotel rooms worldwide are served by the company’s video-on-demand hardware and software. Thousands of retail outlets use Enseo-based signage systems. And dozens of stadiums and teams are clients, including American Airlines Center and the San Jose Sharks.
For Ogle, this is merely the beginning. She says the company’s capabilities and innovative culture position it well for market growth in nearly every sector it serves. Because technology is ever-changing, Enseo’s evolution will mirror consumers’ demand for new products and services.
Among Ogle’s long-range vision is her goal for Enseo’s set-top box to be the TV infrastructure for all major TV display companies in every major sports arena, hotel, transportation station, cruise line and school around the world.
How to reach: Enseo Inc., www.enseo.com
After researching new business opportunities for two years, Ed Bowman finally took the plunge in 1995 with a lofty goal to consolidate a highly fragmented industry and develop a winning business model that didn’t exist before.
His big idea was to create the first national single-source provider of document management services, beginning with a roll-up IPO and then followed by an industry consolidation through acquisition. He made approximately 30 proposals to target companies but most were rejected. Finally, seven companies agreed to be acquired concurrently if the money could be raised to acquire them.
In 1996, Bowman secured the funds, plus capital for future acquisitions, and in a single day, he transitioned from a concept with no operations into a $48 million public company with operations in seven metropolitan areas and multiple services.
Dubbed SOURCECORP, Bowman subsequently completed 65 additional acquisitions, executed an aggressive integration program and transformed into a group of strategic business units.
By 2002, SOURCECORP was on a lightning-fast growth curve and Bowman adjusted the company’s strategy to become a business process outsourcing and consulting business, which led to the difficult decision to divest a group of noncore companies that did a combined $130 million in revenue.
Further focused on six core markets, Bowman wasted no time in finding ways to go wider and deeper with clients, making SOURCECORP the go-to business in class-action claims settlement and administration, acute care medical record coding, labor and employment legal economic consulting, BPO imaging and workflow services, statement processing, and LIFO tax processing.
Over the next four years, Bowman continued to grow the company. Then in 2006, he, his management team and a private equity firm took SOURCECORP private. Today, the company employs more than 4,400 people and contractors in 40 locations in the U.S., Philippines, Mexico and India. And, it is a key partner to clients in the health care, financial services, government, commercial and legal industries.
How to reach: SOURCECORP Inc., www.srcp.com
chairman, president and CEO, Comstock Resources Inc.
CEO, American CareSource Holdings Inc.
managing partner, Heidrick & Struggles
John M. Matheson
board member and former president and CEO, Global Power Equipment Group Inc.
president and CEO, Parago Inc.
president and CEO, GENBAND
managing director, NASDAQ OMX Group
president and CEO, Warrior Group Inc.
Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession, but perhaps no industry was affected more since the turn of the millennium. About a quarter of a million manufacturing jobs were lost over the course of a decade, the large majority of them prior to 2008. As the recession spread from one industry to another, manufacturers often still let go of the most employees.
The cycle was vicious, and it continued month after month.
How is it possible, then, that less than two years after the economy turned, manufacturing is on the rise again? Manufacturing activity increased again in May, according to the Supply Management’s index, the 10th straight month of growth. And even though that growth has started to slow a bit, growth is still growth. Were the 2008 levels just so low that any growth is significant? Or is the sustained increase in manufacturing a sign for the rest of the economy? Nothing is certain, but all of the indicators do point up, however modest, rather than down.
“Texas was about nine months behind the rest of the country, so we were kind of latecomers to the party, I guess,” says Randy Gregg, assurance partner, BDO USA LLP. “But over the last few months, the recovery appears to have started, although it has been tentative and slow, and there are some mixed signals out there. Many companies appear to be generally optimistic about 2010 and thinking that it will turn at the end of the year and they will be able to get back to business.”Prepare for more change
What was normal two years ago will almost certainly not be normal during the second half of 2010 or even during the first months of 2011. What was normal then, in fact, might never be normal again. Even though it might be a cliché, change really is the new normal in manufacturing.
Among those changes are the new gaps in the supply chains of some larger original equipment manufacturers, the result of smaller companies closing, which might cause delays and problems in receiving supplies in a timely manner. A number of industry experts say the availability of credit will also likely change, what with banks starting to somewhat relax their requirements. But the biggest change might be the addition of manufacturing jobs.
“Manufacturing is now the only business sector that has been adding jobs for five months,” says Emily Stover DeRocco, president, The Manufacturing Institute. “Manufacturers have added 126,000 new jobs.
“But the focus is going to continue to be more on what we call mass customization, as opposed to mass commoditization. This reflects, again, the industry’s response to globalization, which is that U.S. manufacturers, in order to maintain their global leadership, have had to move to a higher quality and a higher value product.”
And that higher quality product will almost certainly lead to more changes in the way manufacturers and so many other companies plan and do business, the ripple effect across industries.
For example, if you have not already reassessed your vision and your plan for your company, that should move to the top of your priority list.
“Control costs,” Gregg says. “Take a hard look at your business process to make sure you’re as efficient and as lean as possible. Work with your tax advisers and make sure you’re taking advantage of all the tax breaks that are available to you. The (Hiring Incentives to Restore Employment) Act gives some breaks for hiring new employees. Those kinds of things have really helped some companies out. Making sure they are taking advantage of everything that is available to them, I think that is important.”Keep the long term in perspective
Two years ago, few manufacturers were prepared for the recession. But you can prepare for the ascension, however slow and modest it might be and whenever it does become more noticeable, by being smart during these coming months and years.
You might think about diversifying your product lines into other markets, so you aren’t as dependent on single-source customers, and, more generally, diversifying your portfolio. You might also research how to best tap in to loans, grants or tax credits that are available from various departments of federal, state and local government. And you will likely want to consider your risks, especially over the long term.
“This is not a time to blink,” Gregg says. “This is a time to really focus on the business and really try to manage as best you can with the best advice you can get.”
Technology and education, as would be expected, can also play a role in increasing your business. Several experts discussed how the advantage of U.S. companies is U.S. technology. Domestic manufacturers continue to be at the forefront when it comes to utilizing technology in their processes. To ensure that the technology is operated correctly and efficiently, workers should be more educated than they were 40, 20, even 10 years ago, and with so many quality workers still unemployed, there is a deep talent pool from which to hire.
Most important, though, is to do everything with the long term and that refers to years and decades, not just months and quarters in mind.Ask questions
As you prepare for 2011, it will be important to keep any number of questions in mind. What those questions are will depend on your industry, your goals and your financial standing at the moment, but there are some questions that all businesses need to be asking right now. And those are: What is happening in your industry? Is it expanding or contracting? Is your company expanding or contracting? Where do you see your company in 2015? In 2020? Is your company in the right market? Is it in the right position in the market? What are the strengths and expertise that your company has that could be adapted to another market or product line? Where can you turn to think through your situation? Will your company be able to receive a large enough line of credit during the next year? Will you be able to fund your growth? How sustainable are the current demands? And, the great unknown, how will global events affect your company?
“Because of raw material increases, I know a lot of companies are trying to spend more resources to try to find the best deal out there, to get good pricing, and then when they do find it, trying to buy in bulk to try and get quantity discounts and so forth,” Gregg says. “And that is helping their costs actually going forward and I think that’s going to pay dividends in the future.”
With all of that in mind, you will also need to think about innovation as much as ever. How will you move ideas from the collective mind of your company to the drawing board to the marketplace? Live in the present but remain focused on the future.
“Eyes on the future,” DeRocco says. “But remember the volatility of this market.”
Corporate commitment to diversity and inclusion enables companies to better serve the needs of customers, their employees and the community. Not only is it the right thing to do, but it also is the smart thing to do from a business standpoint.
Embracing diversity in your work force, through your supplier base and within your community creates a competitive advantage by broadening your perspective as well as your business opportunities.
Smart Business spoke to Leslie Sabbath of Comerica Bank about why companies should make a commitment to diversity a priority in today’s economy.
How can a commitment to diversity increase my company’s bottom line?
As a key focus of an organization and a part of the corporate culture, diversity and inclusion practices can add to a company’s bottom-line in many ways, including:
- Employee recruitment, engagement and retention
- Enhanced solutions by bringing diverse and innovative ideas to the decision-making process
- Increased market share and customer satisfaction
We live in a highly diverse nation and world. It is important that companies recognize that to thrive, they must utilize and embrace diversity in their corporate culture.
By recruiting a work force of diverse talents, your employees mirror the communities you serve and you are better able to meet the needs of those communities.
Learning from the different points of view and perspectives of employees allows companies to fully understand the wide-ranging needs of customers.
Are there benefits to having a diverse supplier base, as well?
Yes, there are many benefits of supplier diversity, which should be incorporated into a company’s regular planning.
Generally, the term ‘supplier diversity’ refers to corporate business programs and initiatives designed to increase the utilization and support of businesses that fall within certain classifications deemed as underutilized or underrepresented. Working with minority- and women-owned businesses encourages the establishment and growth of these companies, which will lead to a stronger economy.
By supporting, mentoring and using diverse suppliers, you’re not only helping them succeed and your company prosper, you’re also bringing new ideas and resources to the table.
How can a company reach out to a diverse public in a meaningful way?
Try forming market segmentation initiative teams, such as Hispanic, African-American, Asian/Pacific Islander and South Asian which is what we have done quite successfully. Be sure to include groups of your company’s colleagues who are committed to joining one another with the primary purpose of reaching out to and building sustainable relationships in this diverse Dallas market.
It’s really crucial to a company’s survival to understand the needs of diverse markets and reach out to them in a meaningful way through sponsorship and involvement with diverse professional organizations, chambers and community organizations, support of community nonprofits and the development of relationships with centers of influence, community leaders and referral sources.
How can a company ingrain diversity into its business practices?
Companies can build diversity into their business practices by incorporating it into their value system and strategic plans. Ideally, diversity should be viewed as an important pillar of an organization’s foundation. Diversity scorecards can be used to help measure company progress in meeting diversity goals.
Companies also can require each employee to complete a diversity education course, for example, which can be Web-based, in-person or a combination of both. These courses focus on building an understanding of diversity and inclusion, and helping employees develop skills that are required in a multicultural environment. They encourage all employees to embrace and celebrate the differences among diverse employees and to create an atmosphere of inclusion. Senior-level executives and others also can be required to include diversity goals and objectives as part of their performance plans.
How can I tell if my company truly embraces diversity?
An obvious way is in the improvement in the hiring, retention and development of diverse colleagues. You also can tell if your company truly embraces diversity if it:
- Effectively utilizes and values similarities and differences in people to create a broad, richer work environment that encourages creative thinking and solutions
- Recognizes and leverages the benefits realized from a broad range of ideas, viewpoints and cultures working together to produce superior products and services for a diverse marketplace
- Embraces the inclusion of all talented and qualified individuals, regardless of differences in beliefs, experiences, backgrounds or physical characteristics
- Treats all colleagues, customers and vendors fairly and with dignity and respect
How will I know if my company is making a difference with its diversity program?
At Comerica, diversity is a core value and a key business driver. As a result, our bank has been nationally recognized for its diversity focus and commitment. Recognition is not the reason to have a diversity program in place, but it does serve to remind employees, customers and others with an interest in your company that diversity is a priority.
Leslie Sabbath is senior vice president for employee relations at Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Inc. (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/FortWorth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands. Imagine an office where employees snack on fruits and nuts rather than candy bars, drink water instead of another can of soda, and have managed to kick that pack-a-day habit.
Imagine an office where health and wellness are a priority.
Is this anything like your office? Perhaps it will be during the months and years to come.
There is little doubt that health and wellness are hot topics. Just turn on the television and watch reality shows about weight loss, or pick up a magazine and read the articles on wellness published recently in Time and The New York Times Sunday Magazine. Or turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.
Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise, and our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.
“You really need to think about your overall strategy and culture,” says Michael Nadeau, president and chief executive officer, Viverae Inc. “If somebody is going to improve their personal health, they need to change their lifestyle. If a business is going to change their health, they need to change and improve their culture and incorporate health and wellness management.”
If you don’t have a program at your business, why should you bother to install one now? If you do have a program, why should you aim to improve it as we continue to move through 2010? Well, plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. And there is an impressive return on the investment, especially after a year or two.
But you have to plan and install the program first.Take the first step
Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are important and relevant questions. If the answer to any is yes, you’ll want to consider a wellness program.
The question you have to ask yourself, though, is why do you want to install a program?
There are no wrong answers, but if there is no why, the program will flounder.
“You need to determine what your budget is per person and whether you want to do executive wellness, as well,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “Then interview several companies and see what fits in that budget.”
And if you and your executives don’t support the program from its first breath, neither will your employees. So take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.
“Screening usually involves biometric testing, which is blood pressure and body fat analysis, screening blood work,” Schnur says. “This is what I call an M.D. review, which is where someone actually reviews the screened blood work and the biometric testing.”
HRAs, which are often free online or cost between $5 and $25 per employee if performed in person, and biometric screenings, which cost between $50 and $150 per employee, highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.Consider your employees
Because of the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your wellness program remains in compliance.
“Running these programs is difficult,” Nadeau says. “There’s a lot of work that goes into coordinating it and making it all happen. And it’s just as easy to coordinate a program for 1,000 employees as it is for 50 employees. That’s why the spend tends to be a little higher per employee for smaller companies.”
No matter your choice on that matter, your employees do need to feel a sense of inclusion in and perhaps even some sliver of ownership of the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible and allow them to participate.
The key to increased participation is to offer incentives, especially now as we continue to recover from the recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.
“You need to show someone you’re thinking about their health,” Nadeau says. “This is where you need to provide the right information at the right time and at the right frequency, because you need to have specific programs designed for a specific population.”Monitor your results
The fruits of an effective wellness program will take time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as the culture changes.
Over time, you can measure the collective pounds lost and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.
The program might also pay for itself during that first year thanks to employees being able to work more hours and to a possible decrease in health care costs but you’ll likely have to wait until at least the second year to see any real positive return.
“Usually, you have a 60 percent return on investment in the first two years,” Schnur says. “You probably reach around 100 percent in years three or four.”
When that change starts to filter in, you’ll likely see the average wellness program will be worth about $3 for every $1 you invest. Some experts say you can expect more than that $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.
“At the end of the day, our health care costs are trending up 7, 8, 15, perhaps even 20 percent per year for smaller companies,” Nadeau says. “The question I always pose is, ‘What are you doing about it?’ If your rent went up 10 percent per year, you’d move. And around 70 percent of all that money is lifestyle related; it’s preventable.
“When you put it back in those financial terms, doing nothing is not working. Health care rates will continue to go up if we do nothing.”
Millions of Americans have their identities stolen each year. That is why it is important to take extra steps to protect your personal information. As the nation recovers from the most severe economic crisis since the Great Depression, it is crucial to stay on top of your financial health.
In recent years, identity theft has risen to be one of the most popular crimes committed against the average consumer in the United States. The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year.
Smart Business spoke to Denise Owens of Comerica Bank about how to avoid becoming a victim of identity theft.
So, what exactly is this crime that is gaining so much traction?
Identity theft is a type of fraud in which a scammer or thief obtains your Social Security number or other sensitive personal information and uses it to open accounts or buy goods and services without your knowledge. Often, victims of identity theft don’t realize that their personal information has been stolen until they are contacted by a collection agency for a debt of which they are unaware, and, by then, there could be several debts in their name listed on their credit bureau report.
How do fraudsters obtain personal information about someone?
Thieves can use a variety of methods to obtain your personal information, ranging from rummaging through your trash to an online scam called phishing that seeks to steal credit card numbers, account information, Social Security numbers, passwords and other sensitive information. Phishing uses fake e-mails, fraudulent Internet addresses, imposter Web sites and ‘pop-ups’ to impersonate your financial institution and trick customers into disclosing their personal data.
What can people do to protect themselves?
Fortunately, there are several simple steps you can take to prevent identity theft:
Protect your Social Security number. Never carry your Social Security card with you. Memorize the number and store the actual card along with any other important documents in a secure place, such as a personal safe or safe deposit box. Additionally, never give your Social Security number out over the phone or to someone that you do not know. Banks will never ask for this information via phone or Internet, so don’t be fooled by a solicitor claiming to be from your financial institution. When in doubt, hang up and call your bank immediately to report such a query.
Reconcile your financial statements. When you receive your financial statements in the mail, be sure to reconcile them immediately and report any discrepancies to the company.
Check your mail daily. Each day, we are inundated with preapproved credit card applications, banking statements, credit card statements, etc., through the mail. All these highly sensitive documents are like gold to a would-be scammer. If you do not get a financial statement that you are expecting, contact the issuer to check that your address has not been changed without your knowledge. You should sign up for electronic statements when possible.
Shred all financial documents. You should shred all financial documents bank statements, tax returns, etc. that you don’t need. Don’t throw them in the trash. In addition, shred any documents that contain personal information, such as name, address, date of birth, when they are no longer needed. A household cross cut shredder can be an affordable and effective tool to protect your identity.
Be on guard when using the Internet. The FTC cautions that, while the Internet can give you access to information, entertainment, financial offers and countless other services, it can also leave you vulnerable to online scammers, identity thieves and more. For practical tips to help you be on guard against Internet fraud, secure your computer and protect your personal information, visit www.OnGuardOnline.gov.
Select intricate passwords. Another good point from the FTC: Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your Social Security number or your phone number, a series of consecutive numbers, or a single word that would appear in a dictionary. Combinations of letters, numbers and special characters make the strongest passwords.
Store information in secure locations. Keep your personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your house. Share your personal information only with those family members who have a legitimate need for it. Keep your purse or wallet in a safe place at work; do the same with copies of administrative forms that have your sensitive personal information.
What else should someone consider?
Be cautious about mystery inheritance letters and offers to earn money by working from home. Usually you are aware if money is coming your way. Many of these schemes promise a large monetary gain for little work or effort. Know what the deal is and with whom you are dealing if you agree to participate. As the old adage says, ‘If it sounds too good to be true, then it probably is.’
Denise Owens is vice president, Fraud Services for Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/Fort Worth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.