“Intellectual property is intangible property resulting from creativity,” says William Munck, chairman of the Dallas-based law firm of Munck Butrus PC. “IP describes a wide variety of property created by musicians, authors, artists and inventors.”
Smart Business talked with Munck to find out how a company can protect itself against challenges to its IP.
How do you protect intellectual property?
IP is protected generally by copyright, patent, trade dress, trademark and trade secret laws. These areas of law are designed to encourage the development of art, science and information by granting property rights to creative and inventive people. These rights allow artists, authors and inventors to protect themselves from unauthorized use and misuse of their creations.
What is the difference between patents, copyrights, trademarks, trade dress and trade secrets?
Patents are granted to inventors for new, useful and nonobvious inventions. A patent gives the inventor exclusive rights in the invention for a period of time, so that he can profit from the invention before the right to exploit it is available to the general public. Patents can be granted for plants, manufactured products, machines, processes and combinations of matter. A patent must be applied for from the federal government and will only be granted if the invention is unique.
Copyrights are exclusive rights granted to authors, artists, composers and publishers to create and publish their works. The work must be original and must exist in some tangible form; it cannot exist only in the artist's mind. A copyright arises automatically as soon as the work is made. However, registration affords owners of copyrighted materials additional benefits.
Trademarks allow businesses to protect the symbolic information that relates to their goods and services by preventing similar use by competitors. To receive trademark protection, a word or symbol must be distinctive and must be used in the marketplace so that it gains recognition with the public; this is called ‘secondary meaning.’ A trademark need not be registered, but if it is registered, the owner of the mark is afforded particular federal rights.
Trade dress is similar to trademarks and can be used to identify and promote the product or service. For example, the shape, color and design of a product or its packaging can be trade dress. Likewise, the decor and color scheme of a restaurant or store also can be the subject of trade dress protection.
Trade secrets protect competitively valuable information such as formulas, patterns, devices and compilations of information. A trade secret remains enforceable as long as reasonable efforts have been taken to keep it secret.
Can all IP be protected?
No. Each branch of IP has its own set of standards that need to be met before protection may be granted. To receive patent protection, for instance, the invention must be novel, nonobvious and useful. Copyright protection, on the other hand, must meet certain originality requirements.
Do they hold water legally overseas as well as in the United States?
It depends. Each country has its own rules and regulations governing IP, so an artist or inventor who wants to protect his or her rights in more than one country may need to make several filings. International treaties have streamlined some search and registration procedures.
Other than protecting specific corporate assets, what are some other advantages to legally protecting inventions or publications?
Intellectual property rights and other intangible property, when properly managed, can go beyond securing a business’s future it can also open new sources of value and revenue. With proper planning and the right legal team in place, your business secures its future and maximizes the value of existing and future intellectual property.
How does a company track and pursue violations of IP rights?
A company should consider having a competitive intelligence program in place. The program should not only conduct regular IP audits to monitor the company’s own IP but also that of its competitors (and for that matter, its potential competitors).
An IP audit primarily identifies IP currently owned by a company as well as IP not previously recognized. The results of a comprehensive IP audit typically improved the opportunity for a company to exploit, commercialize and profit from its intellectual property. For example, IP audits provide a ‘balance sheet’ of IP owned by the company, which may add value to the business in the event of a sale, investment or public offering. IP audits can also identify potential income streams from licensing.
WILLIAM MUNCK is chairman of Munck Butrus PC and its Intellectual Property Section. He concentrates his practice on domestic and foreign intellectual property procurement, exploitation, enforcement and counseling. He can be reached at email@example.com.
Often the purview of only the largest business-to-business banks, treasury management services today are increasingly offered by smaller banks that focus on small business and middle-market clients.
“The megabanks are competing for the Fortune 500 companies, so small to mid-size businesses may have trouble getting noticed,” says Robert Surko, director of treasury management at Plano-based ViewPoint Bank.
ViewPoint represents one of a growing cadre of smaller banks offering value-added treasury management services to small to mid-size businesses that before now could not avail these functions through their banks.
Smart Business spoke with Surko about the changing face of treasury management.
What is treasury management?
The term refers to a range of banking solutions to help businesses maximize their cash flow. These include remittance processing, cash disbursements, online banking services including review of check images, electronic funds transfer, overnight sweep investment options, remote deposit capture, positive pay to prevent check fraud and medical remittance imaging.
Some of it is simple cash flow monitoring what checks clear, what deposits have posted and other daily activity. But there are other things like managing the speed of money coming in and going out, and investing, securing and protecting the funds.
An example would be remote deposit capture a device that scans checks so
that deposits go directly into a customer’s account, eliminating the need to visit a branch or possibly use a lockbox. Businesses benefit from the technology because it puts money into their accounts faster.
What kind of business uses these services?
Just look at the Yellow Pages. Any business that needs its revenue proceeds to be deposited where they will be handled smoothly, timely and with appreciation, can benefit.
We count retailers, manufacturers, municipalities, staffing organizations, healthcare providers, property managers, transportation providers, homeowner’s associations … you name it.
Is technology the key selling point in choosing treasury management services?
Treasury management is more than technology. Sure, clients recognize the huge productivity gains from access to increasingly sophisticated technology. But one thing remains constant: everyone still wants to talk to a banker someone who can solve a need professionally and responsively.
And there are also simple services that can help businesses. For example, at ViewPoint we offer a courier service that will pick up checks from a business and deposit them in the bank for them. Nothing technological about that, but we think it’s a nice convenience to ‘bring the bank to them.’
The key is to listen to customers and get to know their businesses. By doing so, you deliver the products and services that provide them with a one-stop solution. Businesses appreciate a personal relationship.
What do you think is important for a small or mid-size business to know about treasury management?
You’re not too small for treasury management services. If you use a bank that caters to a small- to mid-size business, you don’t have to have hundreds of thousands of dollars to take advantage of the technology and services available, from basic online banking to your bank coming to you. It’s become very cost-effective to manage your cash flow through these services.
ROBERT SURKO is the director of treasury management at ViewPoint Bank. Reach him at firstname.lastname@example.org or (972) 801-5867.
Born: 1961, Oakmont, Pa.
Education: Pittsburgh Beauty Academy, 1980; also has attended various business management courses
What’s been your biggest business challenge?
Operating with insufficient infrastructure, which lacked people and resources during a mass expansion of our salons. Looking back on my years with the company, we went through a long period where we opened a lot of salons, but we had a very small, lean infrastructure. But it was lean to the point of needing more people and resources.
What’s the most important business lesson you’ve learned?
Surround yourself with great people. That is No. 1. ... It’s very important, because we operate as a team. Then, stay true to the core values and strengths of the business and be consistent, especially in executing the vision. Consistency is very important.
What is your personal work philosophy?
I believe in a win-win philosophy by encouraging others to set goals. I really believe that mutual respect is the key to success.
What is the best work advice you’ve ever received?
Never compromise yours or the company’s integrity by saying something you are not going to do.
What is the best business book you’ve read recently?
“The Ten-Day MBA,” (by Steven Silbiger), third edition. It is a step-by-step guide to mastering the skills taught in America’s top business schools. It’s phenomenal. I read the first edition, and now I’m reading the third, because it’s updated. ... Also, I am reading another one called, “In Your Hands: The Behaviors of a World-Class Leader,” by Phil Geldart. He does management training for corporations. It is a great book.
When David Kirk took over RF Monolithics Inc. in 1999, he had to downsize his work force from 600 to 200 to make the company leaner and stronger.
And while he knew it would be hard, he also knew communication would help ease the pain. He held a meeting to tell employees about the cutbacks so that there would be no surprises later, but he also gave them reasons why the cutbacks were necessary if the company were to remain competitive.
During the next two years, Kirk president and CEO of RF Monolithics helped workers find jobs elsewhere. And many were able to find work on their own, because he gave them more than just two weeks’ notice.
Smart Business spoke with Kirk about how he makes tough decisions and leads change in his $54.2 million wireless solutions company.
Q: How do you make tough decisions?
Look at the total picture for the company. If you get too focused on the short-term, meaning a month or a particular quarter, you can get yourself in trouble.
Keep looking further down the road one, two, three years. Take into account a lot of different areas in the company as far as what’s going on with people, facilities, a variety of different things. Benchmark what’s happening in the competitive arena.
You have to make a lot of different decisions, and it’s a process that never ends. Even though we had some good growth 17 percent last fiscal year you can’t sit back. You’re continually having to look at what are the next hurdles ahead of us.
Q: How do you lead change?
It really is putting together a strong, strategic business plan and challenging yourself. We call it being brutally honest with yourselves when you form that plan. The question you really don’t want to ask, you’re kidding yourself. Ask that question and challenge yourself.
Separate it from a regular weekly meeting. Take the time to really think long-term.
Looking at the challenges facing the company, start to formulate the pictures of how it’s actually going to happen. Benchmark and understand how that’s going to happen. Go through an entire process and start to build consensus by doing an analysis understanding what’s going to happen out there.
As the ball begins to roll, people see you’re having success changing the company. It’s a long, steady process. It’s not something you can say, ‘We’re going to change,’ and in three months, you’ve done it. It’s a building process and will continue to be.
The other thing is to openly communicate that business plan to the company and use your employees.
Q: How do you effectively communicate changes and plans to employees?
It’s not, we put a plan together, put it in a binder and put it away on the shelf, and then when we get an internal audit or some regulatory thing say, ‘Well, here’s our strategic plan’ and pull it off the shelf. It is a living document that we’re continually benchmarking and studying.
We communicate that plan a minimum of twice a year to all management and support people in the company. We then create a document from that, called a dashboard, that is given out by functional area. It lets each functional area know how they’re participating and proceeding toward supporting the company’s plan.
The dashboard is updated monthly and posted in their particular department so they could see. Then we hold regular all-hands meetings to communicate what’s going [on], as many as four to five meetings.
We try to avoid giving quarterly meetings. We want to make sure that we don’t just focus quarter by quarter. We want to focus on the bigger picture. Don’t just hold a meeting when there’s a significant event hold it on a more regular, even-keel basis.
Then it’s other things. Hold company picnics. Talk to people and have general conversations. Get to know them and understand them. A lot of good feedback can come from the people.
Q: How do you get feedback?
You build that over time. You can’t just walk out there and make one presentation and someone says, ‘Oh, I have to go talk to him.’ Build that in employee meetings. Go get yourself a cup of coffee. Walk around.
A key thing is to do what you say you’re going to do. We started to look for cost-saving ideas. We started a recognition program, and through that process, we received ideas for half-a-million in cost savings.
If you make suggestions, you get a $10 Blockbuster certificate. If your suggestion gets to the next level, where it’s getting considered and potentially implemented, it was a $50 American Express card.
Give a small reward for that idea generation. We had a committee that studied that suggestion, and following through with that showed them we were committed to trying to save costs. HOW TO
REACH: RF Monolithics Inc., (972) 233-2903 or www.rfm.com
Balance team and individual decisions. A team approach works best; however, I set aside certain decisions that need to be made by me or by my board of directors.
However, when I do that, I take it to my team, to my executive committee, and explain to them that decision is set aside and why. It makes them part of the day-to-day decisions and the large decisions.
Roll with the big dogs. I have a formula in my head. I give myself two minutes to immediately establish credibility by knowledge and intellect. Immediately jump in with what the purpose of the appointment is and then immediately go into points that are important in the industry. I’ll also go outside the specific agenda to talk about what’s going on in the market.
I immediately put the knowledge out there to establish the credibility, and from an intellectual standpoint, I’m on the same platform as the Wall Street firm. Once that credibility is established, then we’re on track.
Don’t build an ivory tower. Keep your finger on the pulse of the company. Being a CEO, it’s easy to not spend as much time going to see customers. When you do that, anything that your customer base is talking about or issues they have is always second-hand knowledge to you unless you’re there.
I was watching TV and [‘Today Show’ anchor] Anne Curry was on about the national campaign for literacy and the more you know, the smarter you grow. That’s the best advice.
You have to put time aside to spend with your people and to read about what’s going on in the market. You can’t let the ego get to you and get in this ivory tower-type mentality.
Roll up your sleeves and stay with your team. Go and see customers. Get out there and actually experience, and not just read about it in the paper or through reports. Reports are good, but outside of reports, there’s a live pulse going on that you have to keep your finger on.
Be patient. When you’re running a company, you get very passionate about it, and you want results immediately. Not all results can happen immediately.
You can get some immediate gratification, but for the most part, especially long-term decisions, you can’t ask every day how it’s going. You have to put some trust in your people and let it play out.
That comes over time. It’s easy to want to keep control on everything, but you’ll wear yourself out. You can’t do it.
I’ve learned to surround myself, and everyone on my team is company-minded. I’m not afraid to put intelligent people around me that could replace me someday. That’s the smart way to go. Some CEOs fear that they want to be the only person that can run that company, but that’s not a smart model.
You look better and are more effective if you’re surrounded by people who are talented. We have great ideas, we have creativity, and if I’m running the whole thing, then I’m going to stifle those ideas and that creativity.
Establish trust. That comes over time. I’ve been with the firm 14 years now, and I’ve worked up through the ranks, so I’ve been in other positions where people are already comfortable with me.
With trust, it’s just like personal relationships; you have to gain it. You can’t offer it out there and then not follow through. When I say I’m on your side, and your interest and the company’s interest are aligned, over time, it proves to be true.
Any CEO can destroy trust at any point in time. The way to destroy trust is to say one thing and do the other. You have to be consistent with your behavior. You have to be consistent with your message.
That goes into friends. That goes into children. It goes across the board. It’s a good policy to have.
Involve many people when hiring. It’s difficult for us to hire in our specific niche with the skills unless they come from a competitor, so we tend to grow from within.
We hire for a long period of time. If we’re going to put in all the effort to train and to grow, we want them to stay here for a long period of time. In the hire process, we’re going to spend time with that person and ask them questions outside of the norm just to see who that person is, what their personality is and if they’re trainable. What type of environment are you most comfortable with? Is it important to you that you enjoy your job? Is it something outside of just getting a check? We want this job to be a part of their lives.
That’s something that you have to get a feel for, and we’ll generally bring other people into the interview. If my sales manager is hiring, he’ll bring my CFO in to interview with a person or he’ll ask a training manager (to have) lunch with this person. That way we get a different perspective.
Throw new employees in. You learn faster that way. Sitting down and reading a manual is monotonous. Getting out there is exciting. It’s challenging. It keeps them interested.
If you do that on the onset, you’re going to get somebody on line with the company, whereas if you put them in a corner and give them a manual for three weeks, how does that align them? They feel somewhat ignored.
Stick to your guns. I’ve learned to just be me and not take the expectations of others. Be what works for you and what works for your company.
There’s a lot of expectations, and you can let those expectations drive you or you can drive. Once I let those expectations go and just be me, then people fall in line.
HOW TO REACH: Capital Institutional Services Inc., (800) 247-6729 or www.capis.com
There has been a great deal of discussion recently about the impact of federal elections on estate planning. After all, the Democrat and Republican parties do have differing philosophies about levels of exemptions, tax rates on the amounts above the exempted levels, the impact on different groups of wage earners, etc. But, regardless of which party is in power at any given time, people concerned about protecting their wealth should plan for their futures without trying to look into a crystal ball to guess what Congress will do or try to do to tax their estates.
Smart Business spoke with estate planning specialist attorney Robert McGuire, a partner with Godwin Pappas Langley Ronquillo LLP, to learn more about the impact of political philosophies and legislation on estate planning and what people can do to adapt to it.
Should people be concerned about the impact of the predicted changes in estate taxes based on the changeover in political power in the U.S. Congress?
The situation may not be as bad as a lot of people feared during the heyday of the Republican majority because 2011 is probably not indicative of what we are going to get now with the Democrat majority. Traditionally, the consensus has been that if the Republicans were to lose power, it would result in a severe increase in what is called the ‘death tax.’ Based on recent research about what has happened, that may not be the case.
Does speculation about changes in federal estate taxes play a role in estate planning based on the change in political power in Washington D.C.?
Not to a large extent. The documents involved in traditional estate planning pretty much allow for any eventualities. They tie the wording to whatever Congress decides the exemption level is going to be. So people should do estate planning as they normally would. Wealth management planners will set up plans that will take maximum effect of whatever the exemption level may be.
Will exclusion rates and tax rates above those levels change dramatically in the next few years?
Bear in mind that the exemption level is only one component of the estate tax. That is the exclusion amount that any individual can leave to an heir without estate tax. Right now, that is $2 million, and is scheduled to rise to $3.5 million by 2009. Then in 2010, the estate tax is scheduled to be repealed altogether and return a year later. In 2011, it reverts to a $1 million exemption, which is a significant decrease from what people are used to now.
The second component is the tax rate on the amount above the exemption amount. The Democrats’ strategy will be to impose significant tax rates on the amounts over the exemption level.
Who will those significant tax rates affect?
With the current exemption rates of $2 million per individual, significant tax rate increases above the exemption levels will affect only the top 2 percent of the U.S. population. Even that may go down, since there is some speculation that the Democrats may raise the exemption level to $3 million per individual and the tax rate on the amounts above it to as high as 55 percent. If that were to happen, only 3/10ths of 1 percent of Americans would pay an estate tax. In any case, the amount raised will only be about 1 percent of the overall income tax.
Remember, though, that both the exemption levels and tax rates on the amounts above them are subject to compromise between the two parties. Therefore, estate planning based on the proposed changes would be sheer speculation, which is not viable. That explains why people and their estate planning advisers should plan their wealth management strategies just as they normally would, rather than on what they think might happen.
What should people include in their estate plans to protect against anticipated changes in exemption levels and increased tax rates above those amounts?
The most important thing is to set up proper estate plans that will protect them from opening up their estates to taxes when none are necessary. For example, married couples with estates worth more than $2 million can set up simple estate plans that include Marital Bypass Trusts or Life Insurance Trusts, depending on how much life insurance they have. These trusts enable both spouses to get their exclusion amounts and therefore pass each of their exclusion amounts to their heirs.
If a husband and wife don’t set up a plan properly, then anything over $2 million will be taxed upon the death of the second spouse when it doesn’t need to be. The best way to make sure that doesn’t happen is to consult with estate planning specialists especially those who do not use crystal balls.
ROBERT MCGUIRE is a partner with Godwin Pappas Langley Ronquillo LLP in the Dallas office. Reach him at (214) 939-4819 or email@example.com
The goal of supply chain management is to balance supply and demand, profitably, for products and services.
Supply chain management involves many “rights,” according to Suresh Sethi, Ph.D., director of the Center for Intelligent Supply Networks (C4iSN) at The University of Texas at Dallas School of Management:
“The delivery of the right product at the right price to the right store in the right quantity to the right customer at the right time. Similar rights apply to services.”
Delivery of goods and services to customers in modern economies requires a network of enterprises. “It is not uncommon for a single customer’s request to be fulfilled by an average of 20-plus supply network partners,” says Sethi. “This increases the complexity of managing supply chains. Add other complexities such as demand uncertainties, supply risks, transportation hazards, product governance and environmental regulations, and the task of managing supply chains becomes enormously difficult.”
Smart Business spoke to Sethi about ways to improve supply chain management.
What is an intelligent supply network?
A supply network consists of all parties involved in fulfilling a customer request. An intelligent supply network is one that can adapt efficiently and profitably to unforeseen events. This is accomplished by designing flexibility into the network and the presence of software and hardware agents that enable the network to (1) detect shocks and modify decisions in response, (2) learn in the process, and (3) make better decisions in the future.
What are some of the current drivers for intelligent supply networks?
Global competition, outsourcing and poor visibility a firm’s ability to collect and analyze distributed data, generate specific recommendations and match insights to strategy have increased supply-and-demand risks. There is a tremendous need to transform static supply chains into adaptive ones to boost their operational agility.
Other drivers include lack of trust and coordination, and inability to allocate profits fairly. Many supply chain partners have conflicting goals and objectives. Solutions need to be explored in order to align those goals and objectives, perhaps in the form of incentives and contracts for the benefit of all members of the chain.
Why are today’s supply networks inefficient?
Supply chains are not well integrated. This happens when production cannot access real-time purchasing information. Up-to-date parts and component information is not available. Product design collaboration is made difficult because of incomplete CAD standards. Frequent supply shortages occur because of machine breakdowns or transportation hazards. Short product life cycles result in high demand variability and poor forecasting. Complexities are present due to globalization and outsourcing. High levels of inventories result from unforeseen events and poor visibility.
How can corporations improve supply chain performance?
Supply chain partners should treat supply chains as end-to-end entities. Focus not on components, but on the entire chain. Ensure visibility and proper coordination. Explore contracts and incentives that will align the supply chain partners. Ensure proper cash flows to align with the flow of products and services.
What are some of today’s most challenging supply chain problems?
When introducing new products in highly decentralized global supply chains, there is a need to align product life cycles with supply chain activities in order to bring high-quality products faster to market and at low cost. Use of technologies such as Radio Frequency Identification (RFID) and decision support systems may provide better visibility. Thus, methods have to be devised to evaluate investments in these technologies, including models for making optimal decisions when faced with poor information.
Additional challenges include: How to deal with risks faced by supply chains? What are the objectives to be maximized when faced with such risks? How do we coordinate supply chains so that the objectives of the various partners are aligned? Again, this requires the development of proper contracts and incentives, and methods of allocating profits to the partners.
How can schools help?
Schools such as UTD’s School of Management offer supply chain management concentration in its graduate programs and have high-quality doctoral programs devoted to supply chain management research.
Our C4iSN was created to help local industry improve supply chain performance, be the knowledge portal and thought leader for the supply chain community, and to advance scientific and operational knowledge.
SURESH SETHI, Ph.D., is director of the Center for Intelligent Supply Networks and Charles & Nancy Davidson Distinguished Professor of Operations Management at The University of Texas at Dallas School of Management. To learn more about C4iSN’s activities, contact Divakar Rajamani, managing director, at (469) 371-4300. Reach Sethi at (972) 883-6245 or firstname.lastname@example.org.
Making money is hard work, and raising the capital to get a business going can be equally challenging, unless you know how to package a loan application. The path to lending is strewn with stories of people with right intentions and none of the know-how of how to sell themselves on paper.
Organizing data, paying attention to details and demonstrating that you, the borrower, understand your business always appeals to a banker, says Patrick Ramsier, managing director of commercial lending at ViewPoint Bank. It’s all in the packaging, he says.
“It’s not a case of form over substance,” says Ramsier. “It’s a matter of being thoughtful, of giving the lender all the information needed to effectively assess the risk he or she plans to take on.”
Smart Business spoke with Ramsier about the do’s and don’ts of commercial lending and tips he could provide a prospective borrower to successfully obtain a loan.
The availability of financing is strong. How can this feature of the marketplace influence a borrower’s mindset?
It all depends on how sophisticated the borrower is. If he reads many business and trade publications, he might get the view that there is a lot of capital floating around and that obtaining financing should be easy. But he shouldn’t think this way.
A shrewd borrower will always want the best deal, and he will shop around for that. In doing so, he will go into a banker’s office prepared, having in hand a set of documents over and beyond a loan application one that convinces the banker of his business acumen and creditworthiness. What we look for is a detailed and organized presentation that makes our review easier.
How can a borrower demonstrate to the lender that he or she represents a good risk?
We’re often looking at more than the financial numbers. We’re also looking for subjective information, such as the history of the firm; rsums of the firm’s top officials and a summary of their industry experience; an overview of their long-and short-range marketing goals or a description of the demographics they are targeting. Such pieces of information help fill in the picture and help us to see whether the borrower makes a good risk.
In effect, the process we undertake is not much different than if you were to lend money yourself. Surely you would want to see some numbers as well as to learn the background of the person you’re lending to.
For example, a borrower could request money to cover a payroll. But if he does not fully explain the circumstances that create a shortfall in cash flow, I’m not comfortable with that presentation. Instead, if he was to explain in writing that he’s experiencing a timing issue with receivables from his biggest national customers that these clients, be they the U.S. government, FedEx or whomever, are paying every 90 days, for example then I’ll better understand the conditions he’s operating under. I’ll eventually come to learn that he has a solid business model, and that he could be a good risk.
Do borrowers sometimes get overconfident that having successfully secured loans in the past laying out the numbers every time is not necessary?
The bottom line is that the strength of a business is affected by its borrowing costs. Any time you can lower your borrowing costs, it’s going to be in your benefit. To do that, you need to be as prepared as possible, and that will help you get the best deal possible.
Sure, banking is a relationship business. But that fact should not make you overconfident that you’ll both get a loan and get it at the best price. Always be prepared to present the best possible picture of yourself and your business. For example, if your company has done better than expected and you show that you understand your business, say so confidently.
Banks want your business, but you want a loan that works for you. Your best chance at the best deal is to tell the banker the whole story.
How often do you see a poorly thought-out loan application?
We see it about 25 percent of the time. I can’t say enough about how a borrower is affected by sound loan package. It takes a lot of guesswork out of the equation when we see an application with relevant supporting documents. I don’t mean one that just looks pretty; it has to be something that speaks to the management of the business. It shows me that the borrower knows what he or she is doing and is determined to both grow the business and to pay back the debt.
PATRICK RAMSIER is managing director of commercial lending at ViewPoint Bank. Reach him at (972) 801-5832 or email@example.com.
Born: Dallas, 1950
Education: Attended North Texas State University [now the University of North Texas], Denton, Texas
What was your first job, and what did it teach you?
Delivering The Dallas Morning News at age 12.
Honestly, that’s a good question because one of the things the paperboy job did for me is that’s your own business. It launched my whole career as an entrepreneur, understanding the value of service, managing my time and my money.
It’s an incredible learning job for a brand-new person in business. My entire life has been spent as an entrepreneur. You are in business for yourself.
What’s the biggest business challenge you’ve faced, and how did you overcome it?
Bringing disruptive technology into a closed shop industry, like, for, instance what we’re doing right now. We are bringing the concept of wellness that is intruding into an industry called health care.
Health care doesn’t focus on wellness. It focuses on management of diseases. That’s a difficult thing to do because you are going against the grain.
What’s the most important business lesson you’ve learned?
To seek counsel, lean not on your own understanding. In legal issues, seek good counsel from attorneys. Interestingly enough, I found out that in terms of discernment of people, my wife probably has better discernment than anybody in the business, and she’s not in the business. Seeking counsel from people that have either the education, experience or the gifts has been a really critical thing for me.
What’s the best work advice you’ve ever been given?
Identify your purpose and use all of your skills to fulfill that purpose in life. Find what you think you’ve really been called to, and your skills will support that activity.
Instead of trying to find someone else’s career path, figure out what you’re really here for and use your skills to support that.
What’s the best business book you’ve read?
‘Good to Great’ [by Jim Collins]. That’s because it validated principles I believed in. The first book I read that I thought really was a good one and really insightful was ‘Doing Business God’s Way’ by Dennis Peacocke.
It’s not a religious book. It was a book that said, ‘Here are the principles, the fundamental truths in life.’ They are like gravity. You don’t have to agree with them. These are things like the laws of reaping the sowing.
You can do business in an unethical way, but ultimately, that does not pay off.
Ralph Hawkins knew it was important that his company, HKS Inc., have a clearly defined set of values. But instead of just imposing them, he enlisted the company’s employees to help document what the values should be. Doing so not only established the 10 values that employees felt had always been present but never formalized, it also gained grassroots support for the values. Once the core values were defined and communicated, Hawkins and management slowly weeded out those employees that didn’t reflect those values. As a result, the firm went from $1 billion in construction five years ago to more than $14 billion in construction last year. Smart Business spoke with the president and CEO of HKS about how he works as a servant leader to his employees.
Let values guide you. Allow individuals to contribute to the company. The way they learn to contribute is through our values, but they have to have access and support to make sure they’re out there building our business up.
We are a firm that has strong values. We support those values, and we hire and we fire on those values. We create a feeling of support and collaboration. We’re always competitive, but internally, we’re very collaborative.
It’s much like a family. If you all have the same values, you tend to strengthen each other... The values are the rules of the game. If the values reflect poor ethics, most likely you’re going to hire a bunch of people with poor ethics.
But if you have high ethical standards and you promote that as a value, you find that everybody has high ethics.
Get people pumped. What motivates people is exciting projects and a great, supportive atmosphere. You don’t have to do a lot of things to motivate a staff internally.
If you’re not doing great projects and you’re not making a lot of money and not doing a lot of the things that make a successful business, people tend to lose their morale. But if you stay focused on your business so the business is successful, and you’re bringing in exciting projects, it almost takes care of itself.
Recruit and nurture young people. Our biggest challenge is getting the very best people. The way we’ve addressed that is we actively recruit students. That provides a lot of energy and excitement to bring that young blood into the firm.
It wouldn’t be a smart thing to be exclusive. Be inclusive with the new generations coming up, and it’s important that you set the stage for them to enjoy and grow in their careers.
Keep them and support them. Our competitors have said, ‘The best people we can get are the ones that we can recruit from HKS after a year or year-anda-half.’ The reason is because they’ve had a lot of training. We probably spend $15,000 to $30,000 a person on training the first couple years, so it’s important that we retain them.
You have to be competitive salary- and benefits-wise, but go a step further. People stay at firms because they’ve built relationships at the firm. We do a lot of celebrating among our staff.
Every few months, we stop work and talk about everything we’ve accomplished over the last few months. We celebrate it, and we have a lot of fun. It bonds us together.
Communicate. If you ask anybody, communication is probably the No. 1 problem at any company. We try to be as interactive as we can with our communication.
We tell them what’s going on, but we also have focus groups. I sit down with 20 staff members and we talk about different issues that have come up, and I get their response. It’s tremendously helpful to feel the pulse of our company.
We also had a full-day retreat. We went through the employee survey, and we talked about the top challenges and the top attributes of HKS, and we got feedback on how we could improve the challenges.
When you ask these young people, they’ll tell you exactly what they think you should do and what they’ve heard works at other companies. It’s a great resource to make us the absolute best place to work. You can’t overcommunicate.
Know how to beat the economy. If the economy downturned, we’re prepared to have an exit strategy. We maintain a very close check on the go/no-go process of what jobs we should pursue and what jobs we shouldn’t pursue. There are jobs that are in a gray area that we choose not to go after because we think it’s not the best use of our staff.
Second, we’re collaborative, and we’ve been able to work with a number of minority firms by outsourcing some of our work. It gives them a great opportunity to learn how they can conduct their own business even better and, as a result, we’re able to do more work without hiring (more) people.
If workload did drop, we have about 10 percent of our staff on a contract basis that we could drop, so we would never have to lay off our staff.
If one building market is up and one is down, we balance it out. If oil prices are down in Texas, and Texas economy is a little slow, it might be up in Florida, or vice versa, so that geographic diversification is important, too. Diversification is our greatest strength.
Enable your staff. Being a servant leader is key in making sure your staff has the tools and resources.
If you give these people the tools and resources and education and training, they’re going to do great things. To sit back and watch it is phenomenal.
Be prepared to go global. Look at what services you’re providing and what your strategy is. If they’re in a growth strategy, which is a successful strategy, consider going global at some point and working international.
Our clients are beginning to take us globally. We did the Fidelity headquarters here locally, and they called us and said, ‘We need to do a facility in Bangalore,’ so we took off and we went to Bangalore.
Even if you’re not interested in working globally, you may have certain clients that take you globally before you know it, so you better be prepared.
HOW TO REACH: HKS Inc., www.hksinc.com