“We believe that technology and business leaders can begin to address the implications of a ‘flat world’ for their companies by defining a business vision that includes shared services as a key strategic resource for the company,” says Greg Adkins, vice president for Avvantica Consulting LLC.
Smart Business spoke to Adkins about the opportunity companies have to use shared services to drive significant benefits for themselves.
What are shared services, and what companies and business functions are good candidates?
The overall concept behind a shared services organization is to leverage the functional and technological competencies of one organizational unit to deliver cost-effective, high-value services across an entire company.
Ultimately, all businesses compete on cost and service levels, and shared services can help companies of all sizes begin to leverage existing technologies and capabilities to address these competitive issues.
Typically, companies are good candidates for shared services if they are decentralized or multidivisional. Business functions such as finance, accounting, human resources, customer support, procurement and IT are all potential candidates for shared services. Shared services are not only cost-efficient, which has been the traditional focus, but are also tools for competitive advantage. Companies can use shared services to take strategic advantage of the specific functional and technological competencies they have.
What benefits are there in moving to shared services?
Companies can recognize several significant financial and operational benefits, including economies of scale/cost reduction, standardization of business process and technologies, improved quality and service levels, increased business control, improved management reporting and better corporate governance.
How should a company approach implementing shared services?
Successful shared service implementations begin by developing a comprehensive business vision for the future. Shared services may be the focal point or a piece of a larger overall vision.
Many of the most successful visions have had shared services positioned as a strategic tool or resource, combining the best processes and technologies with the best people to achieve world-class service levels and processing efficiency. This can provide a competitive advantage.
Shared services organizations are often launched as a separate business unit and run as their own entity. They should always be seeking to deliver the highest quality of services while being the lowest cost provider.
The key differences between shared services and traditional centralization is a focus on defined service level agreements (SLAs) and more emphasis on governance. In terms of implementing shared services, companies typically go through three stages of evolution: process/system standardization, centralization, and shared services (adds SLAs and governance to a centralized process).
What best practices have you seen in successful shared service implementations?
Every shared services design and implementation is different. The existing state and the business’s vision of the future drive many of the key decisions in each implementation.
In our experience, several recurring themes have made the transition to shared services more effective and successful. Those themes include a clear, compelling business vision that includes shared services; strong, consistent leadership/executive support; a robust implementation program with a strong project management approach; detailed business cases and project plans; comprehensive and effective communications throughout the company; the constant pursuit of process and technology standardization; and a desire to change the corporate culture to be service oriented.
In terms of operational best practices, successful shared services implementations include comprehensive, detailed SLAs; robust management reporting; and strong shared service governance. We have seen some shared services organizations go as far as issuing their own ‘annual report’ to customers, detailing their business strategy, plans, operations and financial performance.
GREG ADKINS is vice president for Avvantica Consulting LLC. Reach him at (214) 379-7903 or GAdkins@AvvanticaConsulting.com.
The company does subsurface mapping for oil and fuel companies and grows by adding crews of new equipment and about 45 people. With such a hefty price tag for each expansion, this president and CEO has to keep his finances in check and cultivate his 468 employees so they’re ready to step into new positions when clients require more crews.
His leadership skills are paying off. The company added three to four crews in the last year and a half and grew its revenue to $30.9 million last year, a 53.7 percent increase over 2004.
Smart Business spoke with Whitener about how he keeps his employees and finances in check to lead growth.
What most inhibits a company from growing?
When you look at the real problems out there, it’s market conditions and having qualified personnel.
When the market’s good, it’s much easier to be on a growth or a steady pattern. When demand is down, there’s not a lot we can do about it.
Your hope is to keep the very best that you have of the personnel. You have to call on your more experienced and better people to carry more of the load to keep costs down through difficult times.
How do you maintain morale during hard times?
We just buck up and work our way through it and still keep some of the rewards for the personnel that are doing the job, even though it is tough times. You still have to let the employees know that you appreciate what they are doing.
Even though you’re not in a very high money-making mode, what they’re doing is keeping the company going for the time in the future when we have the opportunity to make a good return on the revenue.
How do you financially prepare for growth?
You have to really balance your debt. Hopefully your business is at such a level that internally you’re generating cash and you’re not overextending yourself in the growth mode that shadows either one of these, whether it be the borrowing or using up all your cash to generate the growth.
There’s a fine line there balancing all three of those in order to keep the growth going and keep enough cash to make sure you don’t have any cash problems and do just enough debt if things turn, you can manage that debt.
How do you maintain that balance?
Every time an opportunity becomes available to us, we weigh all three of those. We have to review where we are cashwise, where we are debtwise and whether we want to take on additional debt or if we have enough cash being generated internally to at some point go out and say, ‘OK, six months from now, we anticipate this cash expenditure putting out this new operation and we feel we can do that without taking on additional debt.’
How do you make decisions regarding growth?
Take advantage of the opportunities when they become available. If the business is there, you need to make the decision quickly and take advantage of it.
You want to look at the positive side of it on what opportunities are there for the company? What opportunities are there for the personnel? And what opportunities are there for the investors?
On the other hand, you have to look at if there’s a downturn eight months from now, where will we be? Can we service this debt? What will we do with the personnel? What will we do with the equipment? You have to weigh the pluses and minuses.
How do you get employees to buy into your decisions?
That’s the simpler part. You have your plan laid out, and you present it to them. ‘This is what we’re doing. This is what’s happening. This is when we’re going to do it.’ People have enough faith that they’ve seen it in the past that this is what’s going to happen, so everybody just moves forward.
If you went in there and started asking employees, ‘Well what do you think? What should we do?’ not a lot would get done. As a CEO, you have to formulate the plan for the company, take responsibility for that plan, and go in and get the employees to execute that plan for you.
How does that leadership style help the company grow?
Being able to lead the company in the right direction is critical. A lot of times, even in our market right now where demand is very high, people get complacent and say, ‘I’ve got all that I can handle right now. We’re doing great.’
It takes the CEO to step up and say, ‘Well look, we need to do more. We need to step out here. We need to put another crew out. We’re going to do it by such and such a date, and this is how we’re going to do it.’
Get everybody in the frame of mind that this is what we’re doing and we’re moving forward and keep the company moving.
HOW TO REACH: TGC Industries Inc., www.tgcseismic.com
Portmann, president and CEO of Stream, an inbound call center company offering technical support and customer service, needed to accommodate the growing demands of her client, Sirius Satellite Radio. To do that, she needed to hire several thousand people and have them trained and ready to handle calls on Christmas Day.
Sirius anticipated correctly that many people would receive a Sirius radio and its service as a holiday gift, largely thanks to popular shock jock Howard Stern’s move to the service from traditional broadcast radio beginning in January 2006.
Many of these new customers would pick up the phone immediately to ask questions about how to operate the system, and even though it was Christmas Day, it was important to make sure someone was there to help them.
Portmann had four call centers ready to go and all of the workers lined up; she even hired 18 percent above projections just to make sure Stream had enough people on hand. But she wanted to do something else to encourage people to show up, so she decided to have all of the company’s top management answer calls themselves that day. They trained on the same script as other workers, and she dispersed them among the four call centers.
On Christmas Day, the centers handling the Sirius calls had absentee rates of about 11 percent, which made Portmann ecstatic. Calls were answered, Sirius was happy, and Portmann had proactively solved what could have been a crisis.
And yes, Portmann herself was one of those workers taking calls from gift recipients on Christmas morning. The company even set up a Web camera to show workers in other locations that their president and CEO was working in her cubicle. Portmann says the experience provided a bonus for the executives, as well, giving them great insight into how the company operates from the ground up.
“It was so wonderful because a lot of us had never known what the real job was like and to sit there for eight hours,” Portmann says. “We all work hard, but we don’t sit still for eight hours slammed with volume.”
Action, not reaction
Portmann uses proactive thinking to look at problems, and her solutions to the most pressing issues don’t necessarily focus on what someone else should be doing or who to blame when things go wrong. She prefers to think about what she can do to ensure that a situation turns out the best way possible.
In the case of the Christmas Day dilemma, she thought about potential problems such as a high absentee rate, and then led by example by manning a phone.
That sort of thinking has brought the company phenomenal growth since Portmann became president and CEO of Stream’s predecessor, ECE Holdings, in 2002, and is a big part of what has made Stream a $400 million company today.
Under Portmann, ECE blossomed due in part to a merger with the much-larger Stream in 2004. Portmann’s philosophy on growth is to buy companies that have what her company needs rather than try to build from the ground up. It’s faster and easier to do it that way, Portmann says.
“We had a grand vision at the time,” Portmann says. “(ECE) had four centers in the U.S. and one in Dublin, and that was it. We said, if we’re going to make it, we have to be international and global. We had this vision of what we needed if we could have an open checkbook. We shared that with our equity owner, and lo and behold, Stream comes on the market.”
Running inbound call centers is challenging because of high turnover rates, but Portmann takes a proactive approach to recruiting and retention issues, too. Some jobs require technical knowledge to support a client’s product or service, but hiring the smartest person isn’t always the smartest move.
“The very best techies are sometimes the very worst for our company,” says Portmann. “They hate dumb customers, they hate answering the same questions five times, so we always say, ‘Hire heart and train to technical.’”
She also thinks ahead when it comes to call center employees.
“You have entry level jobs, so you’d better have really good processes,” says Portmann. “When a person comes in and interviews, what I want to do is train her, get her on the phone and milk her and get her productive for as long as possible. We have built models that say we plan for attrition.
“We know that the average tenure in Dallas, Texas, is nine months, so we know that when we get to six months, we’d better start building another class. ... You can’t be nave about it. You have to plan for it and accommodate it.”
Rebuilding the spirit
To build the new Stream, company leaders started by re-energizing the company with a new mission statement, colors and other things designed to give the company its spirit back. The work was done by Portmann and two key executives no consultants involved.
“We literally rebranded, remissioned, reimaged, remessaged the entire company, and we did that within the first 90 days,” Portmann says. “We called it the new Stream, and our whole mantra was, let’s put the spirit back in.”
Portmann’s goals after that were to create new processes to make sure that no matter where in the world a call was answered, it would be handled the same way, mostly in terms of the attitude of the person handling the call. One large client, Portmann says, has calls answered at 12 call centers around the globe, and Stream needs to handle all of those the same way.
“Wherever you go in the globe, if Stream is the one doing the support, it’s the exact same support model, whether it’s India or France or Italy or Spain or Germany or Canada or the U.S.,” Portmann says.
Stream created a list of 18 specific behaviors and practices it wants to see modeled in those who answer phone calls. The company looks for those behaviors during the hiring process but also spends considerable time and energy on ongoing training on those behaviors.
Managers listen in on calls and give feedback to employees, focusing on those traits. Also, Stream requires each of its 24 call centers in 14 countries to spend 15 minutes every week discussing one of the core behaviors the company wants to see in employees, and employees are invited to share experiences as to how they’ve implemented the behavior on the job.
After standardizing the way the company handles calls, Portmann began thinking of ways to differentiate Stream from its competitors. With some 4,500 companies offering tech support services, Portmann wanted a way to draw companies to Stream and help the company grow.
One avenue that’s helping Stream bond to its existing customers and lure new ones is a program Portmann calls “The Voice of the Support Professional.” Once a year, she asks all of the agents in the call centers what feedback they would give to their clients about their products. Those comments are passed back to the client for evaluation.
“It’s so cool,” Portmann says. “The clients now say, ‘When are you going to do the Voice of the Support Professional? We’re going to fly people in for that.’ If you think about it, we talk to their most important constituent every day, and that’s their customer.”
Another strategy is a program called RGM, or Revenue Generation Management. Portmann says it is changing the way her clients are thinking about their tech support operations.
“When you call for help, you come into my store,” Portmann says. “We have programs, at the end of any technical support call or customer service call that cross-sell, upsell or pitch something that might generate revenue. ... It has transformed the call center from an expense to a revenue-generating channel.”
The program also generates revenue for Stream.
“Americans love to buy,” says Portmann. “It works better with the Americans than anyone in the U.K. We’ve done correlation of the data, and customer satisfaction is higher when I ask you to buy something. It’s amazing.”
For the future, Portmann sees chat support growing, even more so than e-mail support, as chat is instantaneous. Right now, chat and e-mail support comprise about 15 percent of the company’s business.
“It’s starting to get its own rhythm,” Portmann says. “We are literally starting to staff chat like we do voice. ... I think there will be continuous movement in chat.”
Portmann’s proactive strategies are working. In 2004, before the merger with Stream, ECE had about 1,500 people employees and $70 million in revenue. Today, Stream projects 2006 revenue of $400 million and 12,000 employees. Portmann anticipates revenue growth of 20 percent a year as the company hones its focus, bonds with clients and uses new tools to bring in new technology-related clients.
Asked for five-year revenue goals, Portmann says that’s too far down the road to project in the technology business. But she’s always looking for growth opportunities, both through new clients and through buying other call centers.
“The additional opportunity for us is expansion into geographic markets and finding better, faster, cheaper ways to do things so that we can eke out higher levels of profitability,” Portmann says.
How to contact: Stream, www.stream.com
If you listen to global-warming advocates, you would think that global warming results primarily from gases spewed into the atmospheres by manufacturers and autos. That is not even remotely true. The fact is that 97 percent of the global warming gases are water vapor. Manmade hydrocarbons (CO2), per federal research reports, compose less than half of 1 percent of global warming gases. Again, regardless of the facts, the controversy rages and businesses are in the middle.
Smart Business spoke with John Barnes about the hydrocarbons and their possible connection to global warming in the context of the effect on U.S. businesses and business’ response to it.
Do you believe that global warming is a byproduct of manmade hydrocarbons?
Global warming may be real, but most of it is a natural phenomenon. And the influence of manmade hydrocarbons as a harmful factor in it is theory, not fact. The data supporting the theory is heavily suspect, and a lot of evidence exists to refute it.
Keep in mind that without some global warming, humans couldn’t survive here. Temperatures would average somewhere below zero. From the historical perspective, consider that, 12,500 years ago, Earth experienced a double-digit increase in global temperatures at a time when no automobiles or manufacturing plants were around to cause it.
What evidence exists to refute the idea of a global warming threat to the planet?
The Earth has more ice right now than 100 years ago. It is true that the thin Artic icecap and a small peninsula in Antarctica are melting, but the Antarctic has 90 percent of the world’s ice and 70 percent of the world’s fresh water. The Antarctic ice cap has, in fact, thickened overall over the past few years.
If you look at the 100-year temperature surveys that global-warning proponents use for evidence, almost all were conducted in or around large cities. Global-warming proponents believe that average temperatures in those cities have risen because of the increase in industrial gases. If they have and variations are small one must factor in that concrete, asphalt and sun-reflecting skyscrapers create more heat than the grass, dirt and trees they displaced. Around smaller cities that have not grown significantly with a lot more concrete, asphalt and skyscrapers, temperatures have not risen.
Evidence for or against the role of manmade hydrocarbons in global warming notwithstanding, the concept has enough momentum to harm U.S. industry.
Harm U.S. industry how?
Potentially and this is significant with carbon taxes. It’s likewise significant that the global warming theory began as a political issue in Europe. Given that the United States has the most productive economy in the world and is the biggest energy user, some Europeans look at global warming as a way to cripple their competitor’s economy and improve their own.
For people outside the United States and some within it, the global warming theory is a pretext for raising taxes massively or requiring permits for energy use so-called carbon taxes or permits for technologically advanced countries. Such taxes or permit requirements don’t exist yet, but the Kyoto Treaty, which the U.S. has thus far refused to ratify, calls for them.
How would the Kyoto Treaty affect U.S. industry if our government were to ratify it?
The treaty is designed to mitigate the effects of global warming by some small fraction of the one half of 1 percent of the global warming effect of CO2 that’s all and raise taxes in multi trillions of dollars. The treaty’s carbon taxes would transfer a massive amount of wealth. That might have a major impact on U.S. businesses, but a small impact on perceived global warming. Meanwhile, large developing nations like China and India would go unaffected by it.
What can U.S. business people do about the possible impact of global warming legislation?
They can always push to revive focus on alternate energy sources and use the alternatives available now.
They can attempt to offset negative media reports. Bad news sells, and global warming is one of media’s major current causes clbre.
Business professionals must look past the media’s stories and know the facts for themselves. Business owners must also monitor governments’ reactions to the issue of global warning, stay current on where legislation may be heading, and work with other business owners to keep the debate centered on balanced facts, not media-driven frenzy.
JOHN BARNES is chairman and CEO of B&R Energy LLC. Reach him at (972) 934-3800 or jbarnes@BandREnergy.com.
Lack of proper attention to employee benefits programs can put employers in the position of incurring adverse legal exposure. This can happen in numerous ways, including being put out on a tax limb without support, having a pension plan that is not qualified, or having an executive comp arrangement that doesn’t meet its purpose or produces adverse tax consequences. One way to avoid these scenarios is to work with competent consultants.
Smart Business talked with Gary Lawson, a partner at Godwin Pappas Langley Ronquillo LLP, about how employers can get the most out of their employee benefits programs and partner with experienced lawyers and consultants to guide them in the right direction.
Will the same employee benefits plans that apply to executives work for rank-and-file employees?
There are generally substantial differences. Executives usually participate in all the basic benefits a business maintains for their rank and file, such as a pension plan, 401(k) plan, or stock purchase arrangement and health care benefits. But they may require additional benefit arrangements, ranging from nonqualified deferred compensation, incentive stock options and phantom stock plans to special travel arrangements such as access to a company plane.
Employer interests are best served by providing adequate plans to all employees, and by making sure everyone knows and fully appreciates their plan details.
How can employers make sure employees appreciate their benefit plans?
Employers might conduct surveys to determine what employees think about their benefits, which ones they consider more than others, what additional benefits they would like to see, etc. But be careful in shaping the questions so you don’t create expectations that you cannot afford to deliver. Following up on such surveys shows employees that companies take their benefit plans seriously.
Employers also have to remember that it is a lot easier to implement programs than it is to get rid of them, so they must carefully consider changes.
Another way is to get employees involved in their benefits plans. Rather than just presenting employees with a finished plan, give them some choices. Within the confines of your acceptable plan alternatives, let them design what will work best for them in the long run.
Should employers try to implement and maintain benefit plans without outside guidance?
No. Employers should be concerned with two questions when offering or amending benefit plans: are we getting our money’s worth?, and can we afford it? A prudent way to answer both questions positively is to team with qualified employee benefit lawyers and consultants, preferably with strong experience. Employers should choose carefully because choosing the wrong consultant can cost employers tens of millions of dollars.
How do employers choose qualified consultants?
It’s a matter of due diligence. Check candidates’ references and degrees, consider their past experiences and how they related to your specific issues with previous clients. Visit with current and past clients, review any publications they have written on the subject, check to see if they have been rated by their peers, and inquire about their involvement with organization such as bar associations. Verify their litigation history and know that such experience in the ‘hot seat’ often makes someone a better counselor.
In general, employers will get better results from consultants who have actually been involved in court proceedings, rather than those who have just read about employee benefit programs.
Are there any trends in employee benefits that employers might consider in evaluating their individual plans?
The Internet allows employers to gather more information about employee benefits than was available only a short time ago. They can often access retirement modeling programs as well, to try to predict what their future needs might be.
They can look at social changes that may affect defined benefit plans, such as dealing with disability laws, coverage of people not related directly to employees, and shifting costs brought about by union contracts that can create unique legal complexities.
Monitoring trends can help employers in the long run as they and their employees try to get the best out of their benefit plans.
GARY LAWSON is a partner and chair of ERISA, Pension, Employee Benefits and Executive Compensation Section with Godwin Pappas Langley Ronquillo LLP in the Dallas office. Reach him at (214) 939-4870, or email@example.com
(A. G. “Gus” Fields, a former chief of the Employee Plans Technical Branch of the IRS National Office, Washington, D.C., and Lawson’s colleague for many years, contributed to this article.)
Education: Bachelor of business administration degree, University of Texas at Austin, 1979
What’s the biggest business challenge you’ve faced?
A very substantial contract with an international software company that went sideways on us. I was executive vice president at the time and had responsibility for that in the enterprise.
You really don’t know someone until you see how they fight. That’s really where people display their character and competence. As the situation was unwinding, I interjected myself into the process to diligently coach our contractual partner on what’s going on and how it could be fixed.
And then things continued to move sideways, and the partner that we had said the contract will not be valid, and we need more money, and you’re going to get less than you were getting under the original contract. My position on that was, ‘Hey, we’ll be fair, but we don’t do the hostage thing.’
We ended up filing a lawsuit for breach of contract, and over the course of the next year and a half, I got together with the CEO of that company and reached a mutually agreeable resolution.
What is the best work advice is you’ve ever been given?
That comes out of the third chapter of the book of Colossians, verse 23: ‘Whatever you do, work at it with all your heart, as working for the Lord, not for men.’
What is the best business book you’ve read?
The Old Testament book of Nehemiah is an excellent business book. That’s where the foundational concepts of passion, focus and competence come from.
I think people do well in business when they are working on something they have a passion about. They can then focus, and their competence soars.
Sepulveda on accounting:
Accounting is the language of business. If you are interested in business and you learn accounting, then that will be very helpful to you as you interface in any kind of business you get into.
Or are you? You know the skills necessary, but what personality type is likely to be successful? What behaviors should you focus the interview process around? What is the “emotional intelligence” of your next superstar? Just as important, how will you know it when you see it? Smart Business sat down with Mike Porter, vice president of TNS Partners and a proponent of the concept of “total evaluation.”
Could you explain what you mean by the concept of ‘total evaluation?’
‘Total evaluation’ speaks to going beyond the qualifications, experiences and competencies and ensuring that the candidate aligns with the client in terms of values. Skill-set mentality gets you about halfway through the evaluation process. Going deeper into the personality helps you determine whether or not the future executive will succeed within the environment, culture, team and structure.
Isn’t that what the skill set is supposed to help you find?
Yes and no. Defining the necessary skill set helps you determine where to go to find the person. The skills also become part of the scorecard to evaluate them against. Behavior in terms of how one leads, communicates and interacts and sense of team is critical to a person’s overall effectiveness as an executive. It is our experience that more executives fail and are terminated due to the lack of emotional intelligence and behavioral competencies as they relate to the organization than due to the inability to perform the assignment.
Is emotional intelligence (EI) the same thing as intelligence quotient (IQ)?
Not at all. In fact, for a long time people thought they were inverses of one another. IQ is generally regarded as a fixed capacity for cognitively processing data. EI is a set of learnable skills, mostly based on feelings or thoughts, for decision making and connecting well with others.
It can be a lot more complicated than this, but generally speaking, people with a high EI perceive emotion in themselves and others better, and because of this ability, they are capable of processing emotional information better. This high EI often translates to better decision making and problem solving and more effective collaboration and leadership.
So personality is more important than skill set?
No. But given two people that have the same skill set, the one that is better behaviorally aligned with the organization is much more likely to succeed.
That being said, behavioral considerations must be a primary concern for anyone attempting to add to their team. The more important the position, and the higher level of interaction involved in the role, the more important soft skills become.
Is it hard to find the right soft skills?
It is, but there are many different data points that can be used often, the more the better. First and foremost, providing a broad cross-section of the organization to interact with potential candidates early in the evaluation process is critical. Also, your team can use behavioral-based interviewing techniques to uncover these often hidden variables.
Personality assessment can be an extremely effective tool to assist the management team in quantifying an individual’s emotional intelligence.
Reference checking is critical to get a sense of how the individual has interacted in the past. Not just including former supervisors, but also peers to demonstrate teamwork, subordinates to demonstrate leadership and even outside vendors and customers to validate partnership.
Is this a role for the executive search firm?
Having done search work for decades, we have become proficient in many of these areas. But we also frequently retain the services of organizations that specialize in psychological assessments to validate what we observe during the course of our evaluation process. Because EI is the most likely indicator of individual’s success or failure in an organization, it is an absolute necessity that its evaluation be a priority in any search process. Every company must either develop the internal expertise necessary to capture this critical data or partner with an external firm capable of delivering it. Quite possibly, they should do both.
MIKE PORTER is vice president of TNS Partners in Dallas. Reach him at at (214) 369-3565 or firstname.lastname@example.org.
Women face different circumstances than men in the world of business because of the demand placed on them in their personal lives, says Camille Ussery, vice president of business banking for ViewPoint Bank in Plano. Women's lives are typically spread thinner, and, I believe, the pressure is greater because of it.
Smart Business spoke with Ussery about the time-crunch challenge businesswomen face and how they can make sure that business opportunities don't fall through the cracks while living their full, busy lives.
What are some of the unique challenges females face when starting up and running business?
Women are making decisions in the board room, and then making decisions about what's for dinner, child care, and who will pick up a child from the track meet. While there have been many changes in the way men help out with household responsibilities, the reality is that the burden of the house and child rearing fall, for the majority, squarely on the woman's shoulders. As a result of this, many women feel they are barely able to keep their heads above water. While we tend to do a great job in multitasking, the result may be that business opportunities can and do fall by the wayside. Then there is the added challenge of competing in a male-dominated business world.
What is the solution to the unique challenges that women business owners face?
Because women are making a huge economic impact in the marketplace, many outstanding organizations have formed to provide education and resources for women in business. These organizations from the local Chamber of Commerce to the Office of Women's Business Ownership at the U.S. Small Business Administration offer special courses, workshops and programs just for women who are either starting their own business or already own a business.
How can women make sure that they are doing all they can to help their business succeed?
One thing that many successful business owners do male or female is to create and maintain business relationships. If a woman business owner does one thing to help her business, she may want to consider organizations and clubs that can help her develop business relationships. Because of the time factor, this is one business opportunity that is often overlooked.
However, it's important for women to stay visible in their industry and in the community. Adding networking to the to-do list could be as simple as attending one Chamber event per month. But without realizing its importance and adding it to the calendar, networking can be one of those important business activities that will fall by the wayside.
What else can women business owners do to network?
Women should continually take advantage of the educational opportunities that are available in the community. There are a host of seminars, workshops and courses that a woman can take to not only learn but to also fulfill the goal of networking. Many of these workshops are provided as a community service and are very useful in developing marketing techniques, effective sales strategy and time management.
Many times business owners only consider a banking relationship as a source for working capital. However, business bankers who specialize in meeting the unique needs of a business can provide much more. With ever changing technology, your business banker can provide resources and ideas to help manage the day to day transactional needs to maximize the flow of cash within a business. They work directly with business owners in many industries and can often provide financial solutions to meet diverse needs as well as networking opportunities for increased business.
Other than increasing networking opportunities, how else can women improve the way they conduct business?
Businesses frequently have limited working capital. They need to have all the right financial components of a business and to learn about cash flow and contingency plans. Because without money, the business will fail. The best thing a woman can do is to educate herself, learn as much as she can about the elements of a successful business, and reach out to people in her industry and community for help and advice.
CAMILLE USSERY is the vice president of business banking for ViewPoint Bank of Plano, Tex. Reach her at (972) 578-5000, ext. 2354 or mailto:Camille.email@example.com..
He knew those were the things he needed to get the company back on track, so he chose to invest even more in them and found other areas in which to reduce costs.
“Getting the right people and making sure they have the right resources and environment is the primary way you orient for that growth,” Brewer says.
His strategy paid off, and the company ended 2005 with $56.4 million in revenue, a 49 percent increase over 2002. Smart Business spoke with Brewer about how he invested in his 125 employees to grow Adams Golf, a designer and distributor of premium golf clubs.
How do you prepare for growth?
It’s having the right people in the right places and allocating resources to those areas, because resources are never unlimited. Quality people are never as plentiful as you like, so you cherish every quality employee you can get.
Then you make decisions about how you’re going to allocate resources and what areas you’re going to focus on because you can’t focus on everything. If you do, you’ll be average at a lot of things, and if you chase every opportunity that runs at you, you might not catch any of them.
What do you look for in potential employees?
It’s hard to find good people because that’s such a key resource. It’s a challenge of any growing business, and it’s one of those classy problems that you like to have. We look for passion, integrity, drive, intelligence, a fit with the culture here.
We’re a relatively small business. Friends and friendships have developed, and you don’t want to interfere with that based on the quality of hires. We’ve had some people come through that were clearly bright people and excellent backgrounds, but they didn’t appear to fit with the culture. I wouldn’t support us hiring those individuals because the negative effects would outweigh what they could provide.
We’re better off to keep looking until we get that perfect fit. Getting the right people into the organization is probably the most important thing.
The only thing I know in my heart of hearts that I’ve done a good job at is attracting good people early on and retaining them during the bad years when the business was really struggling. We were able to keep and motivate some good people, so when we got our financial act back together, got our product line back together, those individuals were still here.
They were battling hard by then, and that allowed us to move forward.
How do you retain employees?
It’s about trust treating them well, open environments. In a time of crisis, everybody wants leadership and direction, but you also need to identify and trust the individuals. It was mutual. They knew how highly I felt for them and how much respect I had for them, and trust, even though none of our results were that good at the time.
We would talk openly about the difficulties that we faced and what the other opportunities were for them, both personally and professionally, and we agreed to stay and stick it out together.
How do you differentiate your products from those of the competition?
We play two basic product games in our business. We play leapfrog, which is where there is a clear technological trend in the industry, such as the size of driver heads, and we try to use our size as an advantage to be faster to the market in the next evolution just try to stay one step ahead of the competition.
The other area, which is more exciting and rewarding when you get it right, is delivering true innovation. Being the first to enter that category gives you a significant advantage.
We’ve identified a niche, innovated to deliver better product into that, moved aggressively into it, and we’ve committed fully.
How do you drive innovation?
We’re relatively aggressive. We will take some risks. We will push. We don’t want to take a lot of time and come out with a product that matches others. That isn’t the key to success. Each product we do has to have a clear reason why it exists in the world because the world doesn’t need another me-too product.
You have to make sure you put the resources in the right area. Product is a key area that we try to differentiate our business, and if you look at how we’ve spent our money, R&D is the primary area where we’re constantly funding.
How does investing in people and resources help you grow the business?
Happy consumers and market share, which then turn into top line and bottom line growth for the business. You can feel inside the organization when we’re getting stronger organizationally. You can tell when you’re on the right direction the quality of people, what they’re working on, their attitudes.
Sooner or later, that turns into product and tour count growth. That turns into e-mails coming in from people who are using your product, and from there to market share, and from there to financial metrics.
How to reach: Adams Golf, www.adamsgolf.com
Along with crude oil, North American natural gas has reached its peak. From this point, dwindling supply ultimately could affect the U.S. as critically as crude oil, given that importing natural gas is more difficult.
“We’re past the North American peak on crude,” says John Barnes, chair and CEO of B&R Energy in Dallas. “The U.S. has crested, and Canada seems to have just about passed its highest point. Current supply is barely even with demand on the rise.”
Smart Business spoke with Barnes about natural gas prices, its availability after two hurricanes in 2005 and alternative energy sources.
Why is natural gas so popular as an energy source?
For the past 15 years, as new electric utility power plants have been built, natural gas was abundant, cheap and cleaner than other types of energy. But those dynamics are changing. Today, 1,000 cubic feet of natural gas contains 1 million BTUs and costs around $7. Equivalent BTUs in coal sell for about $2.50. So, by the BTU, the price of coal is cheaper. The problem is that a coal-based plant costs five times more to put in. And natural gas is still cleaner and friendlier to the environment.
Where does the United States get its natural gas, and why is the supply weather-dependent?
The U.S. produced 80 percent of the natural gas it consumed until last year, with the rest being imported, primarily from Canada. After hurricanes Katrina and Rita hit the Gulf of Mexico last summer, much of the Gulf production was damaged and most of the treatment plants were destroyed. Before gas can be sold and run through pipelines, it must be treated liquids and vapors removed, along with butane and propane gases. Twenty percent of the country’s supply comes from in or around the Gulf Coast, and it took five to six months before the platforms were back up and running online, and able to produce again.
How did the weather affect the supply and price of natural gas?
Since late last year, the price of 1,000 metric cubic feet (mcf) of natural gas actually dropped 50 percent. Just before the hurricanes hit, the price was $7/mcf to $8/mcf; after the storms, prices jumped into the teens. Today they’re back down to about $7/mcf. Several chemical manufacturing plants along the Coast depended on the natural gas, and many of those plants felt forced by the high prices to take their production overseas.
This year’s warm winter saved us from exhausting our stored supply of natural gas, which unquestionably would have sent costs sky high. We likely would have had to price-ration gas to places such as chemical and fertilizer plants and eventually schools and businesses and brought on serious economic dislocation.
On the residential front, we must maintain home gas supplies. You can’t shut down gas supply to homes. Therefore, severe conservation adjustments would be required based on limited supplies and increased costs. One can only hope residents would voluntarily adjust their thermostats to conserve energy and prevent heating “brownouts.”
Could liquefied natural gas (LNG) replace some natural gas?
You hear talk in this country about building LNG terminals that can buy overseas gas as LNG, but that takes time and money. Similar expensive plants must be built in a foreign country to convert natural gas to LNG. After LNG is converted into gas, putting it in the pipeline invites considerable expense of building huge specialized ships able to hold the LNG and keeping it highly pressurized and extremely cold. None of these is an overnight project and everyone faces the NIMBY (not in my backyard) factor. To further complicate the situation, everybody is competing trying to buy the same LNG. A couple of years ago, for example, Australia discovered two new fields with more than a trillion cubic feet of gas in each: China bought both fields.
What are some alternatives to natural gas?
For our economy to grow, we need to find more sources of energy and be more efficient with what we find. As different forms of energy reach their limits, we need to explore different supply mechanisms. Coal can generate electricity, but we are still a ways from developing clean coal. Renewable energy technologies including biomass power, geothermal power, hydropower, ocean power, solar power and wind energy should factor in the equation.
Like any other situation, the difference between a problem and an opportunity is how a person reacts to the situation. Whoever can direct their solutions to this problem is going to win. You can be the victim or the victor.
JOHN BARNES is chairman and CEO of B&R Energy. Reach him at (972) 934-3800 or firstname.lastname@example.org.