To put that in perspective, more than 2 billion people around the world live on less than a dollar a day. It should not come as a surprise that more than 90 percent of aid to the rest of the world comes from America.
We are very generous as a nation on an individual and corporate basis. This prompted me to think of some questions about giving. What makes people give? How do they decide who they will give to? How do we decide how much we'll give? What will we give?
Here are some thoughts.
* What makes people give?
People give based on a sense of duty for their fellow man. They tithe based on religious beliefs of Judeo-Christian principles. People give based on the overflow of their wealth because of their gratefulness. They want to give something back.
As the demand for help increases, so does the giving.
* How do people decide where they will give?
A person or organization might have a specific need. Or an organization might have the same political, religious or social agenda. People give based on a personal relationship experience, or where they feel like they can make a difference.
* How much do we give?
Affordability is an obvious issue. People might give to meet a specific need. Our gut feeling may tell us to give a certain amount. Religious beliefs might dictate a certain percentage.
* What will we give?
Money can be used to buy supplies such as food or medicine. Time can be given to help build a house or bring someone a meal. Talent can be donated to help a person or organization achieve goals.
We need the continued assistance of the community's business leaders and corporations to provide advice, personal involvement and financial commitment. As the world's wealthiest nation, it is our responsibility to continue to share that wealth with others.
As we help people throughout the world, don't forget those close to you like your family, friends and members of your community. These are people that you can help and see an immediate result.
Think about your giving -- both as an individual and as a corporate leader -- and the reasons behind it. You might be surprised by the answers.
This is not the kind of leadership that requires you to be in control of everything, make all the decisions or have all the answers. This is the kind that is self-sacrificing and responsive to other people's growth. It develops people who initiate, take responsibility and become accountable for their actions.
Servant-style leaders are willing to lower themselves to humbly serve another person and put the best interests of others before their own needs. In return, this style reaps success by developing great employees.
How often do we see this leadership style today? Rarely.
Servanthood and leadership are compatible. Great leaders do not force people to follow them.
Servant leadership has proven to be the most successful over time. Look at who I consider to be the greatest leader of all time: Jesus Christ. He was born more than 2,000 years ago and had 12 people who followed him in the beginning. His ministry only lasted three years, he had no marketing budget and he died young, but today, he has 2 billion followers.
What you believe about Jesus is irrelevant. The shear number of followers shows that he is the greatest leader of all time.
This servant leadership style is what we need more of today. There are too many examples of executives who didn't live up to the responsibilities of good leadership and who have violated the trust placed upon them. They didn't serve anyone but themselves.
Ask your employees what they think of your leadership style. People take their employees for granted, and that's a big mistake. By serving their needs with a better management style, everyone wins.
Leadership is not to be taken lightly. The more you care about your people's needs, the greater the chance you will be the person leading them tomorrow.
Even when you think your employees are wrong, if you listen carefully, they're probably telling you something about your business that you could learn from. Take care of them, and they'll take care of you.
Have you ever stopped to think about what this means? The customer is the lifeline of a business. Besides employees, customers are the greatest asset a company can have, and they must be treated accordingly.
For many companies, this has been a difficult time. People are waiting it out and treading cautiously through this first quarter, keeping purchases to a minimum. However, some companies have prepared for a time like this and are in a position to stay on the offensive and press forward.
Those companies took careful measure of their return on each investment, assembled the best management team and are quick to adapt to new circumstances. They instill confidence in their customers.
For customers to continue to make investments, they have to be reassured yours is one of those companies.
Here are four principles customers look for before making an investment with you.
1. Innovation. Are you leading or following? Find new ways to set yourself apart from the competition.
2. Value. Give customers more for their money. When people receive more than they expect -- in goods or services -- they place more perceived value on that transaction, which leads to higher customer satisfaction.
3. Sound leadership. Good leaders make good decisions. Evaluate whether you have the right leadership to keep your company on top.
4. Customer service. Service doesn't end after the transaction is done. If you want to keep customers happy, stay in contact after the purchase. Stay up-to-date on their needs and find out what they like and dislike about your product or service, which will help you fine-tune it for the next customer.
Even when you think customers are wrong, if you listen carefully, they're probably telling you something about your business that needs correcting.
In the current economic climate, you can't afford to ignore them. If you and your staff remember the customer is always right, you'll never go wrong.
We should all be striving to create win-win relationships, but unfortunately, some people are only interested in themselves. A win-win relationship makes you and your client happy, leading to a long-term relationship.
I believe in the old adage that what comes around goes around. People who are out for themselves will always end up in a win-lose relationship that will eventually turn into a lose-lose relationship.
In business, we negotiate every day. Some thrive on it and others avoid it at all costs, seeing it as potential conflict. Don't look at it as conflict, but as communication.
Here are five keys to ensuring a win-win relationship.
1. Patience. Good things come to those who wait. In business, we want it and want it now, but a win-win relationship doesn't come easy. It takes time, and if you strive to do your part, the rest will fall into place.
2. Research. It's important to be knowledgeable about the subject matter. Learn about the person and his or her business needs before going in. The more you know, the better you'll be able to focus on the issues.
3. Vision. Don't only look at it from your own viewpoint. Put yourself in the other person's shoes. Try to see the issues from their perspective, and you might be able to work out a better deal for everyone.
4. Partnership. You can put magnets together two different ways: One way they will come together naturally, the other way takes force. Force never works. If you encounter resistance, you may need to approach the problem in a different way.
5. Gratitude. Show gratitude regardless of what side of the negotiations you are on. When other people sees this, they will want to go out of their way to make you happy.
Past relationships may not have not ended as win-win. Take a few minutes and send letters to these people to let them know you'd like to restore the relationship when they are ready.
They might be hurting your business without you realizing it. This gesture will go a long way.
Everything in the universe was created with a sense of order to it.
God created us all with a purpose and for a purpose. Some people are born with gifts and talents that other people don't have. Untapped, these talents go to waste, possibly leaving our purpose unfulfilled.
Recognizing the gifts that we may not yet be aware of is important if we want to reach our fullest potential. Here are several ways you can explore what it takes to recognize your natural talents .
1. How you view yourself. Write down your unique gifts and talents. These might be a particular skill in a sport or simply good hand-eye coordination. It might be a subject you excel in, like history or math.
By taking the time to identify what you are good at, you may realize you have strengths in areas you didn't notice before.
2. How others view you. Sometimes others notice things about us that we don't.. Ask people close to you what they think your gifts or talents are and compare them to what you identified.
If they're different, the ones you identified may be talents you haven't fully tapped into.
3. How you would like to be viewed. You are what you think you are. Sometimes we limit our thinking, and thus, what we are capable of doing.
Don't put yourself in a box. Decide what strengths you want to utilize and act on them.
4. Who you aspire to be like. This would be a mentor or role model. We shouldn't idolize anyone because we are uniquely created for an individual purpose, but this doesn't mean we can't learn from others. Watch how others apply their gifts and maximize their abilities.
Don't assume your talents and gifts will flourish naturally. It can take a lot of practice to get the most out of what you have. But if you identify your strengths and watch how others maximize their talents, you'll be better prepared to reach your fullest potential.
There seems to be no turnaround coming in the near future. Consumer debt is at an all-time high, job growth remains stagnant and there is uncertainty about terrorism.
What does this mean? It means you have to get your company faced in the right direction to survive the downturn. Here are four things you need to do to turn your company around.
* Have a flexible plan. This plan will detail how you'll get from where you are to where you want to go. Once the plan is complete, it should be reviewed and approved by others with experience. Too many companies operate from the seat of their pants, going from one fire to another.
* Be patient. It's important to have realistic expectations. The economy is slow and business is hard to come by. Don't expect in a bad economy the same sales you had before the recession or you'll be setting yourself up for failure. Set realistic goals and do everything you can to help your employees reach them.
* Work hard. The Book of Proverbs says the diligent hand brings forth wealth. You have to outwork your competitors to survive. There aren't any easy dollars anymore. Set an example for the rest of your company to follow.
* Innovate. Differentiate yourself from your competitors. Don't get caught in a commodity battle that bogs down into a price war you can't win. Highlight the advantages of your products or services and deliver more than the customer expects in both service and value. Customers are looking for a good price, but also want service. Show them you can deliver both.
Don't assume the economy will suddenly improve and turn your company around. Take control while you still can.
You have to set the direction your company will travel and do everything possible to stay on that course. It won't be easy, but with the right attitude and hard work, success is assured.
I decided to start the new year in February this year.
It's always been a ritual for me to lay out my New Year's goals and objectives over the holidays. While I usually have a fairly complete list of goals to ponder come New Year's day, they're not the kind of goals that have been carefully planned and plotted. The rushed holiday season just doesn't allow the time or the mindset to put together well thought out, quality plans. Therefore, this year, I decided to take the whole month of January to do diligent planning with my management team.
I came to this decision after reading an article a friend sent me. I was so inspired I decided to use it as a template to move forward with my goals and objectives for 1999. The article was about the turnaround of Continental Airlines, published in the company's December 1998 in-flight magazine.
It was a story of how a corporate turnaround specialist, working with the airline's new president, turned Continental around from losing more than $600 million in 1994 to making a profit of $224 million in 1995. The main advantage the new leadership had is that it came into the company with a fresh perspective. The new people didn't waste their time making excuses or blaming each other for the company's poor performance history. They simply went to work with the knowledge that the company was heading for a nosedive if they didn't turn things around, fast.
"We saved Continental because we acted and we never looked back," wrote Greg Brenneman, the turnaround specialist who is now the airline's president.
While most companies may not be on the brink of failure, an action plan geared toward efficiency and profitability is something we can all benefit from.
At Continental, the two leaders started by making a list of everything that was wrong with the company. It was a very long list. They then organized the solutions to those problems into a strategy they called the Go Forward Plan.
Once I read this article, I knew that I and every other CEO could learn a lot from it. This was a story about how a company that was dead last in its industry and about to file for bankruptcy for the second time, turned into a profitable industry leader-in about a year.
I took this article to heart and scrutinized my company for the New Year. I sat down with my top management and we made a list of all the problems we saw in SBN. Knowing that it's arrogant to think any company doesn't have problems, we scrutinized everything.
But we had two basic ground rules: We had to view each area with a fresh perspective and we weren't allowed to lay blame or point fingers. The purpose was to be solutions-oriented and look forward. Our goal was to reinvent SBN and stay No. 1 in our niche.
We decided to take this long list of problems and break them into four areas, similar to the Continental approach. The areas we looked at were finances, product, market and people. Like Brenneman wrote, "...saving Continental wasn't brain surgery."
Once we targeted all the problems in these areas, we split them up among us to come up with solutions for each one. Those solutions became part of our own Go Forward Plan.
Our mission was simple: to come up with a strategy that everyone in the company could understand. It is important to share your vision so there is unity and cohesiveness within the working environment. Also, it's important to have values on which to base your plan. These are ours:
1. To operate with honesty, trust, dignity, and respect.
2. To treat all people fairly.
3. To have a united team.
It is too early to tell you how the plan is going at this time. However, I'm looking forward to sharing our progress with you. By now, you should be able to assess how well you're meeting your own New Year's goals. If you're like most, and you're realizing you didn't spend enough time on them over the holidays, consider spending this month putting together your own Go Forward Plan.
Fred Koury is CEO of Small Business News. He can be reached at email@example.com.
SBN magazine is all about visionaries. In 1999, we had our first Innovation in Business Conference, which recognized area leaders for their innovation and vision in business. Winners in the visionary category were leaders who recognized trends such as how the Internet would change how books are sold; how software could be broken down and sold as components; how competition in the cable industry would create a need for marking cables; how interactive media could enhance retail sales; and using franchising in a nontraditional industry to grow.
These are all people with the uncanny knack of knowing in which direction their industry is headed before everyone else. Needless to say, the conference was a smashing success. People want to learn what it takes to acquire these skills and apply them to their own businesses.
Here are several questions to consider:
- Would you consider yourself a visionary?
- How important is it to be a visionary if I am in a leadership position?
- How can I tell if I am one?
- How can I become one if Im not?
- What will happen if I never become one?
Here are the four steps it takes to become one. This exercise can be helpful regardless of how you answered the questions above.
1. Think like one. Dont operate in a vacuum. Get educated on your industry and understand what is happening around you. With the right information and research, you can pick up on trends before anyone else. It is important to know what your competition is doing and how it is doing it. Think long term and get away from the daily crisis mode that too many of you operate in. Establish goals and work toward them.
2. Talk like one. Delegate responsibility to free up more of your time for long-term strategic planning. Spread the message throughout the organization so everyone knows what the goals are. Continue to reinforce the message.
3. Act like one. Implementation of your plan to reach your goals is up to you. Youve done the research, identified the trends that will affect your company and established goals to make your company the leader.
4. Be like one. Results will speak for themselves. If you are successful in being a visionary, revenues, earnings and market share will increase. Your hard work and visionary skills will have paid off.
To be a true visionary, you have to keep moving forward. Like a high-profile coach, you are only as good as your last game. Once youve reached one set of goals, you need to formulate your plan for the next ones.
Failing to be a visionary can hurt your business. If you dont have a vision, it will be hard to retain your top people. With no clear goals, theyll see the company as stagnant and move on to more promising positions.
Without a vision, its hard to convince bankers and investors to give you enough capital to grow your business. As you remain stationary, your competition will pass you by with visions of their own.
Become a visionary now, before your competitors do.
Fred Koury (firstname.lastname@example.org) is president and CEO of SBN.
Plenty of fortunes are being made today by growing companies at e-speed the blinding pace of the Internet economy but at what potential cost?
It is very important that we always evaluate our motives and measure our potential loss compared to our potential gain. If things are not done for the right reasons, youll get nothing but trouble for your efforts.
People have many reasons for wanting to grow a company at e-speed. Some primarily want to go down in history for making a name for themselves, some are looking to get rich quick, and still others are trying to be a good steward of their money.
So whats the right answer? Consider this:
There have always been people who have wanted to make a name for themselves in history, such as Alexander the Great, Napoleon Bonaparte and Adolf Hitler. All died a miserable and lonely death regardless of what they conquered in life.
Some business people of our time, including Henry Ford, Walt Disney and Andrew Carnegie, have a name that is equated with success, but what price did each of them pay?
In get-rich-quick schemes, everything tends to be built on sand. There is hardly ever a solid foundation, as all energies are put toward the accumulation of wealth. Other important factors that play into the success of the company, including employees, product or service and customers, become secondary, which can ultimately lead to disaster. Its important to think of the potential outcome in advance, because you may not get a second chance.
We are told to be good stewards of our money. This reminds me of the parable of the talents: A man going on a journey called his servants and entrusted some of his wealth to them. To one, he gave five talents of money, to another, two talents, and to the last servant, one talent, each according to his ability. He then went on his journey.
The man who received five talents went at once and put his money to work and gained five more. The one with two talents gained two more. But the man who received one talent went off, dug a hole in the ground and hid his masters money. When the master returned, he generously rewarded the first two for their faithfulness.
However, the last servant, who was afraid to risk his masters money and buried it in a hole, was forced to return it to his master. This shows we are not to be lazy with our talents and should make the best use of them.
I feel growing a company today at e-speed is fine if it is done with the right intentions. Here are five steps to ensure success when growing a company at e-speed:
Think of the customer first. Create a demand by offering a superior product or service. You will build loyalty, and success is sure to follow. The customer is the foundation of your business.
Think of your investors. It is important to be good stewards of your money. Your reputation is everything. When you stay true to you word, you can always go back for more.
Think of your employees. When you have a great team of people, it will allow you to achieve your goals.
Think of family. Quite often, family members can be affected the most. Dont wait until its too late and you grow apart to put a value on them and the relationships you have.
Think of yourself last.
This is a sure recipe for success, even at e-speed. The rules might have changed, but the principles are still the same.
Fred Koury (email@example.com) is president and CEO of SBN.
Whether you are a bricks-and-mortar business or a dot-com, all owners of growth companies need to attract, retain and motivate key management to elevate their businesses to the next level.
As a growth company, using large amounts of cash to achieve this is often not an option. One alternative being utilized more and more is stock options.
There are two types of stock options -- qualified (e.g., incentive stock options, commonly referred to as ISOs) and nonqualified. There are numerous factors to consider prior to adopting either type to ensure that both the company granting the options and the employees receiving them can take advantage of the corresponding tax benefits.
There are advantages and disadvantages associated with both. Here are a few of the major differences, including key factors to consider when deciding which type of option to adopt.
Qualified options (ISOs)
- Recipients of the options are taxed at the time of the ultimate sale of the stock acquired on exercise, not at the time the option is exercised, delaying tax liability.
- Recipients are taxed at the capital gains rate rather than at the ordinary income rate, assuming the minimum statutory holding requirements are met.
- ISOs are limited in the amount of stock that can become exercisable in any calendar year.
- These are not limited in the amount of stock that can be awarded on an annual basis.
- They allow the company issuing them to take a tax deduction for employee compensation.
- Recipients are taxed on the appreciation in value of the stock at the time the option is exercised, rather than at the time of the ultimate sale of the stock. This may leave the employee with an income tax liability with no means to pay for it if the stock is not sold at the same time the option is exercised.
- Recipients are taxed at ordinary income tax rates on the appreciation.
Regardless of the type of plan implemented, there are several issues to keep in mind when evaluating and adopting a stock option plan.
Size of the option pool. While there is no hard and fast maximum amount, many companies typically set aside 10 to 20 percent of the equity to be granted to key management and employees. When calculating the total percentage to be allocated for the option pool, don't forget to account for future employees who will be hired to round out the management team.
Awarding the options. Typically, options are awarded based on performance measures that will result in the company achieving its overall business strategy and growth/profit goals. The primary goal of options is to use equity ownership to align the interests of employees with those of the company and to motivate employees to reach the company's long-term goals.
Vesting of options. Typically, options will vest (become exercisable) over a period of time. By utilizing a vesting schedule spread over several years, companies can lock in key employees. However, the plan or the option should also include forfeiture provisions in case an employee leaves before the options vest.
Stockholders' agreement. Recipients of the options should be required to execute a stockholders' agreement at the time of exercise of the options. This may contain a number of restrictions on the stock (e.g. forfeiture provisions, buy-back provisions for the company, restrictions on transfer, etc.) and virtually any other terms the company desires within the bounds of the law.
Noncompetition/nondisclosure agreement. When adopting and implementing a stock option plan, business owners are presented with the perfect opportunity to have their key employees execute a noncompetition/nondisclosure agreement. As a potential stockholder in your company, following exercise, recipients of options will have access to valuable and proprietary corporate information. The noncompetition/nondisclosure agreement serves to protect companies from the potentially damaging scenario of losing a key employee and his or her intellectual capital to a competitor.
Numerous factors and laws govern stock option plans. A company's decision to implement a plan should be made only after careful consideration of its circumstances and financial position and consultation with legal and tax advisers.
Whatever the route, employers should feel out their key management and employees to see what will motivate them. Employers and employees often have opposite views on this subject.
The goal is to motivate, not aggravate. The good news is that the "options" are many. Lee Koury (firstname.lastname@example.org) is an attorney at Arter & Hadden LLP and a member of the firm's E-Group and Growth Group. The Growth Group is a multidisciplinary group of attorneys which focuses its practice on entrepreneurs and emerging growth companies. He can be reached at (216) 696-5677 or through the company's Web site at www.arterhadden.com.