Meredyth McKenzie

Wednesday, 26 August 2009 20:00

The perfect spot

The key to a successful meeting is having the right location. If you’re just meeting for training, you want a place where your employees will be strictly focused. If you’re having a multi-day conference, you may want to break up the meetings with activities and give employees some recreational options.

Bottom line, picking the wrong meeting destination can lead to many problems.

“You’ll have extra costs and unnecessary expenses,” says Margaret Bartlett, groups and meetings manager at Professional Travel Inc. “There can be wasted travel time if the location is too far or inconvenient for employees to reach. This may cause your meeting to be longer, because of the extra travel time incurred.”

Smart Business spoke with Bartlett about the key factors in selecting the right meeting destination and how employee input and feedback can help in the selection process.

What key factors need to be taken into account when selecting a meeting destination?

There are six key factors:

  • The time of year
  • The length of the meeting and how many days will be spent in meetings
  • Travel time, either driving or flying
  • The meeting agenda and requirements
  • Time for miscellaneous activities outside of the meeting, team building activities, group and award dinners, etc.
  • The budget

You have to take into account the time of year and see what destination will best fulfill your needs. This will help determine which destinations are available and which activities you can do. Weather also plays a factor, because you may not want to have a meeting in a place where you will be worried about a possible blizzard or hurricane.

You also have to look at the meeting length. It may be for just one day, several days or even as long as a week. You need to take travel time into account, and the location needs to be feasible, whether employees are flying or driving.

You also want to determine what type of activities, if any, you want during the meeting. You may want to golf or participate in water sports, so you want to pick a location conducive to these activities.

Having a budget is important, even if you’re just having a one-day meeting where employees are driving to the location. This will give you something to base the planning on and help in the destination decision. You can use the relationships you’ve developed in the past with various travel vendors to get deals on transportation, hotel, and other venues or activities.

How do you determine your meeting needs and stay focused on those?

Determining your type of meeting will help in picking the proper destination. If you’re in training, you want your employees focused and not distracted by other activities. You don’t want your employees in some luxurious location thinking about what they’re missing outside the meeting room. The best destination for training will be somewhere remote without activities or other areas grabbing employees’ attention. You may want to make sure there are some other activities at night, but employees may not even be interested in that after a long day of training.

If the meeting is several days or a week, you may want some type of team-building or group activity one night during the week — perhaps some type of dinner or group get-together. The best destination for a longer meeting will have some type of activity to allow employees to refresh their minds and refocus for the rest of the week. Plan a day to go play golf or tour the destination.

How important is employee input, and how can you use that feedback in selecting your next meeting destination?

You can develop an employee committee to help determine the location. The committee will look at the meeting agenda and needs to make sure the right location is chosen. The committee will make sure employees are not just picking a vacation destination for the meeting, because they don’t want them distracted during the training or meeting. Board members will usually get involved when picking the location for a companywide meeting or conference.

Feedback is always important, because you know whether or not the location was reliable. Employees are the ones sitting in meetings and interacting with the surroundings, so they have a better idea of whether the location worked or not. Feedback will also let you know if the location kept employees focused on the meeting or not. If an employee tells you he or she had a great time and loved the location and it was an intense training session, you want to definitely consider this location for a future meeting.

You will also want to hear if things worked with transportation and accommodations at the location. The meeting could be successful, everything could be wonderful, but there may have been major problems with the surroundings, so that’s something to consider for the next meeting. Getting that feedback is important.

What are the benefits of picking the right meeting destination?

You’ll be able to keep within your budget and even see cost savings. There will also be no wasted time for the traveler getting to and from the meeting destination. You will also want to return to the destination for future meetings, saving you time in the planning process.

Wednesday, 26 August 2009 20:00

Establishing your network

If Chicago earns the nod on Oct. 2 to host the 2016 Summer Olympics, businesses will have great opportunities to get involved in the event.

Organizing an event as large as the Olympics creates the need for a network, which provides companies with opportunities that include developing long-term relationships and gaining media exposure.

“Becoming part of a mega event network gives you a competitive edge against other organizations in your industry,” says Christine Mooney, assistant professor of management in the Department of Management at Northern Illinois University. “You are associated with that network and have access to other organizations and their resources.”

Smart Business spoke with Mooney about the opportunities and risks of joining a mega event network.

What is a mega event, and how do they function?

A mega event is any large, international cultural event that requires lots of resources and has a huge impact on the community. The Olympics is clearly one, but other events are the Indianapolis 500 and FIFA World Cup.

There are six characteristics that differentiate mega events. The first is how often the event happens. Some events happen every year, while some only happen once. The second is the location — is it the same each year, or does it change? The third is the governance structure. All mega events have an organizing body, which sets rules and exerts varying levels of control. In a typical network, organizations deal with one another, but in a mega event, you have one organization in charge.

The type and amount of media coverage is also a factor, along with how connected organizations are within the network. Do you have direct contact with other organizations or contact only through the organizing body?

You need to understand what value the network will bring your organization before joining. You have to understand the organizing committee, who’s involved and what the rules of membership are.

What opportunities does a mega event network present to businesses?

Participating firms can fill a huge need for resources, organization, knowledge and work in a short period of time. You also have access to other organizations’ resources and can become connected to other organizations and continue business with them in the future.

In addition, you can learn the established routines and processes from the organizing body and how it creates a large event in a short period of time. You can also gain complementary resources. For example, if you have superior marketing but not technology, you can link with companies with superior technology and create a partnership.

What are the risks of joining a network?

One is the sharing of resources. You get access to other resources, but you also need to share yours. You have to make sure your ideas will be protected during the sharing process. You may risk giving up some of your competitive assets because of the power discrepancy between firms and the governing organization associated with the governance structure.

There are also risks with the relationships. If another company produces shoddy products or there’s some controversy in the event, you’re associated with that. Media attention is another big risk. For an event like the Olympics, which is covered extensively, any mistake you make will be huge.

But media coverage can also be a protection because it increases the likelihood of effective governance structures. The International Olympic Committee won’t want to mess up because it could impact future Olympics.

What does a company need to consider before joining a network?

Joining a network isn’t valuable for every organization, so you need to understand the network, the risks and the possibilities. You need to understand the connectivity and how the relationships work. The more direct connections you have, the more you will get out of the network.

Dedicate resources to building trust so those relationships will continue after the event. You can’t assume they will continue just because you worked together.

Understand membership rules. How many resources will you be expected to share? How will membership in the network be enforced? Will the network police unofficial event sponsors, or will your company need to do this yourself?

You also have to understand the network’s future benefits. It’s easy to get involved in a mega event and see benefits immediately, but what will the future benefits be? Is there future value to building relationships with other organizations? Then you must assess the costs of membership now and whether the benefits outweigh the costs. Finally, you have to manage the relationships, establish trust and stay connected in order to realize those future benefits.

How do you measure the success of joining a network?

Typically you measure success by profits, but tying future profits to network relationships is difficult at best. Some direct outcomes could be future contracts, publicity that brings in profits or increased legitimacy. It’s difficult to measure.

You need to determine the immediate and future costs, risks and benefits you will see from joining the network. The more you can identify and quantify specific items, the better you can measure success.

Christine Mooney is an assistant professor of management in the Department of Management at Northern Illinois University. Reach her at (815) 753-6308 or

Wednesday, 26 August 2009 20:00

Weathering the storm

The challenge for business leaders during these times has turned to trying to keep the business afloat rather than taking risks that can either advance the company or sink it.

“Leaders tend to have less of a focus on how to act, because they feel they can’t control as much in challenging times,” says Dr. Paul Lopez, member of the graduate faculty and lecturer in the department of management and entrepreneurship at Kennesaw State University’s Coles College of Business. “You also are not as clear on whether a decision is right or wrong, so you don’t make a decision at all or put the decision off.”

Smart Business spoke with Lopez about how sticking to several key values and principles can help you get through challenging times, how to implement a personalized leadership model, and how to focus on opportunities and threats.

What values or principles do leaders need to adopt to get through challenging times?

There are some principles that I have found effective in running a business in the financial services industry. You need to LEAD — Lead by example, Encourage and care for your team, Achieve time-based targets you set, and Dedicate yourself to results. Once you have those elements in place, it’s easy to actually act. When you are constantly moving around and don’t know what you’re grounded on, action becomes inaction. If you have values, you’re sure about what you care about, how you want to act and where you’re taking the business. It makes it so much easier to come in each day and say, ‘I’m in control.’ When you’re not in control, you tend to feel worse and days are more pressing and depressing than ever. And that will happen more often in turbulent times.

How can you put those principles and values in place in your business?

Having a personalized leadership plan around these characteristics is important. Your plan should determine the key opportunities and threats and then ground itself on the foundation of leadership values, which should be relatively constant. You will need to develop your personal leadership principles and goals, pick specific leadership actions, and work on the measurable actions with timelines and supportive tactics to achieve those objectives. It’s a personalized leadership model that you revisit, and it changes based on the environment. You’re looking at the opportunities and threats a little more rigorously and more often because of the changing and challenging environment.

You have to make sure your values are written down and that you actually follow them. If someone were to ask you what your personal and corporate values were, could you quickly give them an ‘elevator speech’ about those values? Are your values grounded? Can you look at yourself in the mirror, week after week, month after month, year after year, and say, ‘I’m living up to my values when I go into work every day’?

How can you implement a personalized leadership model?

Way too often, we spend more time laying out a vacation plan than planning and implementing the leadership actions that make a lasting impact on the business and those around us, especially in a challenging environment. First, you have to document a written leadership plan and preferably share it with an accountability partner. Second, create a systematic approach to implementing the plan; develop the key action steps and how you will communicate to and involve others who will help you as a leader to get these done. Finally, put a feedback mechanism in place so you can determine how you are doing on a regular basis.

Many times, leaders don’t put time aside to think about their leadership plan, but you have to make time for this, especially when the environment is turbulent. And follow the SMART principle for your plan: make it Simple, Measurable, Achievable, Relevant and Time-specific.

How do you focus on the opportunities while also focusing on the threats?

You can either look at the glass as half-full or half-empty. Opportunities and threats are the ying and yang of business. On the opportunities side, you look at the internal and external factors that represent opportunities. The threats side focuses on what you can and cannot control.

Get input from those people in your organization whom you trust so you build a common environmental picture of the opportunities and threats surrounding your business. Then decide what the specific actions are that you can take as a leader, based on the specific principles and values that you live by, to achieve desired business goals.

How can you show your values to employees and encourage them to develop their own personalized leadership model?

Employees want to know that you’re the same leader in good times and bad, and that you have a foundation of values that they can depend on. The Jekyll and Hyde leader is one of the hardest ones to work for, because employees don’t know which side they’re seeing that day.

Communicating these values comes from the top, followed by living those values by example every day.

Dr. Paul Lopez is a member of the graduate faculty and lecturer in the department of management and entrepreneurship at Kennesaw State University’s Coles College of Business, and executive vice president of Element Funding ( Reach him at (770) 604-6026 or

Sunday, 26 July 2009 20:00

Ensuring you are insured

Most officers and directors of companies will face litigation at least once during their careers, and 95 percent of Fortune 500 companies maintain directors and officers liability insurance to protect themselves from numerous forms of lawsuits. You need to be prepared for this possible litigation, and understand what type of D&O insurance your company has.

“You don’t want to be caught off guard,” says Scott Sherman, of counsel with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. “Generally, you cannot prevent lawsuits from occurring. For example, when the stock of a public company drops a significant degree after information is disclosed by a company, you will typically see class action and derivative lawsuits to follow. What you can and should do is at least understand what situations may arise and what insurance covers you so that you understand what insurance protection you have.”

Smart Business spoke with Scott Sherman about how the economy has affected D&O liability litigation, recent D&O cases, new products or tools that will help with litigation, and the different situations where D&O insurance covers a director or officer.

How has the economy affected D&O liability litigation? Are there certain sectors in which litigation has become more prevalent in recent years?

The current state of the economy has impacted the state of D&O insurance and continues to make it a prevalent part of securities cases across industries. In the securities arena, these types of cases include securities class actions and derivative litigation. Notably, in the last year, securities cases have once again been on the rise.

Have there been any recent major cases involving D&O liability litigation?

There have been some recent cases in Delaware that show that directors have to be careful in what they do, but that, overall, legal defenses such as the business judgment rule are still potent defenses to claims by shareholders in derivative actions or otherwise that directors have breached their fiduciary duties to a company.

A Delaware court recently ruled in a derivative litigation brought by Citigroup shareholders that directors will not be held accountable for taking business risks in the normal course of the company’s business. Risk is part of a director’s job, as is making business judgments, and the business judgment rule is designed to protect the directors from having to look over their shoulder every time they make a business decision on behalf of the company.

Have any new products or tools emerged to meet the needs of certain markets related to D&O liability?

There’s been a re-focus by the insurance industry and companies about the different types of coverage available and the right type of coverage for the company’s directors and officers. Although insurance companies use different terms, many insurance companies’ traditional coverage has Side A, B and C, with Side A coverage for directors and officers, Side B for reimbursing the company to the extent it indemnifies the directors and officers, and Side C for the company’s coverage. Some insurance companies include Side C coverage as part of Side B coverage.

There has been a lot written recently about stand alone Side A coverage, which is additional coverage for directors and officers if the company’s coverage caps out because there is, for example, not an order of payments provision that states directors and officers are covered first under the policy before the company. So sometimes without an order of payments provision, you could end up with no coverage left for the directors and officers, even though Side A coverage exists. Stand alone Side A coverage would be useful in that case to provide additional assurances that the officers and directors have insurance in case of a lawsuit.

There is also individual director liability insurance available for independent directors, which is similar to stand alone Side A coverage. A lot of outside directors look at this for additional coverage.

When does D&O insurance cover a director or officer?

In the securities arena, the most typical kind of cases it will cover in my practice are shareholder securities class actions and derivative lawsuits. Traditional insurance policies will cover defense costs, i.e., attorney fees, up to policy limits. The insurance will also cover settlement payments or dollar judgments rendered against the insureds up to limits set in the policy. The deductible can be negotiated into the policy so that the company, rather than the directors or officers, pay that amount.

It is, however, important to understand when the insurance may be excluded. For example, typical insurance policies have fraud and intentional misrepresentation exclusions. If, for example, the directors are involved in the submission of financial statements to the public that a court finds contained materially misstated information and finds that the directors and officers knew about it, that is where insurance companies may argue that these exclusions apply and the directors and officers will not have insurance for the claims.

Other exclusions that may apply include coverage for derivative litigation, regulatory investigations and internal investigations. You must understand what kinds of situations are excluded from your policy, because the last thing you want is to be in a situation where an investigation or litigation arises and you find out after the fact that an exclusion in the policy prevents the directors and officers from using any insurance money to defend themselves. Make sure to ask questions before taking a position as a director or officer, just so you are not caught off guard when or if litigation arises. In short, you want to make sure you understand the insurance will be there to protect you and your personal assets.

Scott Sherman is of counsel with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. Reach him at (404) 443-6706 or

Thursday, 25 June 2009 20:00

Evaluating potential hires

You’ve just interviewed the perfect candidate for an open position at your company. He or she is outgoing, charismatic, and personable. You then conduct a criminal background check on the candidate, just to make sure everything checks out before you offer him or her the position. The check, however, leaves you with some surprising news — your perfect candidate has a long criminal history.

While most job applications include questions regarding felony convictions, about 90 percent of people with a criminal history lie about it on their applications. The criminal past is not discovered until a background check is run.

“Background checks allow employers to recognize a record of past criminal activity, which should be a major deciding factor about a person during a job interview,” says Jessica Ford, director of sales and operations with Ashton Staffing. “There’s usually a significant chance for the applicant to commit crimes in the future.”

Smart Business spoke with Ford about the problems you face by not doing background checks, how a staffing agency can help in the criminal background check process and how to use the results from a background check during the hiring the process.

What problems do you face by not doing criminal background checks?

Companies that hire employees without properly screening them can face many problems. Acts of violence against coworkers are on the rise, and no matter how small the act is, it can create havoc among employees. Another problem is lost revenue and productivity if an employee is dishonest. Employers have to be careful of who they allow to access confidential information because of identity theft. Companies who manufacture goods must be especially vigilant about monitoring for theft.

Criminal background checks can also be useful in regard to workers’ compensation claims. About $90 billion is lost every year in medical bills, equipment damage and lost production time for workplace accidents. More than 70 percent of fraudulent worker’s compensation claims are reported by employees with a criminal history.

What are the different types of criminal background checks available, and how do you use these checks?

Each state offers a free criminal background check through the Department of Corrections, but it only checks for offenders who have been incarcerated. Database checks can also be done through third-party vendors. This isn’t always 100 percent accurate, because some of the smaller rural counties don’t regularly update their information in the system. So there might be records from six months ago that haven’t been uploaded into the system.

There is also the seven-year history check, where database and county by county checks are done based on where the applicant has lived over the past seven years. Fingerprinting is done for anyone working in a school, medical facility and other specific fields.

How can a staffing agency help in the criminal background check process?

Companies can save time and money. Not every staffing agency requires criminal background checks as part of their hiring process, but the agencies that do require it run thousands of criminal background checks each year, depending on the size of the firm. The agency representatives are experienced in running a check, handling the paperwork involved, entering the information and interpreting the results, which isn’t always easy because of the different kinds of reporting.

And if you decide not to hire an applicant based on the information from a background check, the Fair Credit Reporting Act requires you to notify the applicant. This process can be quite difficult and time-consuming. Your staffing representative would be responsible for any adverse action correspondence, which sometimes can be tricky, and has to be handled carefully because of the liabilities involved.

How do you use the information received during a criminal background check during the hiring process?

There are certain situations where some types of criminal backgrounds would not do well, because it would just be too easy for that person to offend again. For instance, if you are hiring for a bank teller and receive results that the candidate has a history of fraudulent checks and theft, then that would not be a good position for him or her. If you manufacture goods, sometimes there are small items that are easy to steal, so a company would not want to hire someone with a history of theft.

Every company should have a written policy in place regarding what is acceptable regarding criminal backgrounds. The best thing to do is to be consistent. Companies can require anything from a squeaky clean criminal background to only prohibiting acts of violence on their records. Employers should review their job descriptions and determine what fits best for their company. What type of information or goods their employees have access to will dictate how stringent employers need to make their hiring

Jessica Ford is the director of sales and operations at Ashton Staffing. Reach her at (770) 419-1776 or

Tuesday, 26 May 2009 20:00

An open environment

In difficult times, Eric Maryanov strives to maintain a direct connection with his 32 employees at All-Travel.

“The core message of an organization and its core factors do have stability in this ever-changing world,” says the company’s founder and president. “You need to apply the message in all aspects and communications.”

Focusing on his message and on open communication has helped Maryanov grow the company, which he founded in 1984, to 2007 sales of $38 million.

Smart Business spoke with Maryanov about how to maintain open communication and how to set the tone at the top.

Q. How do you develop a message for employees to follow?

By open communication and their ability to query back, so that if they’re sensing, ‘Wait, that’s not the message I heard last time,’ their ability to question it, so I am able to either redefine or reclarify it. Listening to the staff and all of their input is a huge part of success. They know more of what is happening on the customer level. And not listening to only one member of the staff but getting information from all staff and multiple perspectives of the same questions.

It’s regular and consistent communication and consistency in your message, be that through e-mail, staff meetings or one-on-one conversations. The consistency of the tone and message has to be there. It’s not one of those things that just happens once in awhile; it’s ongoing, daily, it’s a reinforcement of the message.

The tone comes from all aspects of everything you do. Sometimes we don’t realize the staff watches our every move, motion and attitude, and it’s an awareness that we have to have at all times.

Q. How do you keep the lines of communication open?

Make sure that sometimes you’re out and about in the office. E-mail is a wonderful tool, and I spend a good amount of my day on e-mail with staff, being accessible to them, raising questions to them to trigger back their response and keep a dialogue going back and forth.

It’s being responsive and at least acknowledging. I try to encourage most of that communication to come in the form of e-mail. But also what fosters that is, at times, sharing the positive with the staff. By receiving a commentary e-mail, when you’re able to put it in a positive light, it’s easier to respond not only to the person who sent it but share it with a greater segment of the staff with a positive response and/or explanation. But if you always start with, ‘That was a good question, and here’s why,’ or, ‘That’s something we should give some further thought to,’ and letting everybody hear that response, it doesn’t give people the fear factor of coming forward with their own comments or ideas.

(You learn about) trends in the marketplace, trends within the business itself, and oftentimes, it’s the first source of finding out if there’s an employee problem. It’s important to treat employees as individual people and recognize that everybody’s needs are different and their individual needs change over time. Show an honest interest in the basics and fundamentals of their life.

Q. How do you treat employees as individuals and not just as employees?

It’s listening and paying attention. People will usually share with you far more if you listen, and that’s how you know the highlights of what’s happening in their world. And then periodically ask about those issues — be it the person who’s expecting their first grandbaby or somebody whose child is getting married or somebody who’s dealing with an ailing parent. Pay attention to those factors and ask about it.

Pay attention to one’s own words. Don’t apply a cookie-cutter approach to everybody in the company. They are, in our case, 35 different individuals, and just like no two people are alike, you just can’t communicate necessarily the exact same way with all of them. You need to recognize how best to communicate with them individually and what levels they need themselves. My most important clients are the staff — if I take care of the staff, they’ll take care of the customer.

Q. What is the benefit of keeping the lines of communication open?

Our most important asset is the employee. It’s the relationship they establish with the clientele, and that’s our best way of knowing what is of interest to the client, what we’re doing right for the client and where the trends may be in the marketplace.

Treating the employees as individuals is the way we want them to be treating our clients. If I’m not treating them as individuals, how would I expect them to treat our clients as individuals and to build that same relationship with the client individually on some level as I look to build with them.

How to reach: All-Travel, (310) 312-3368 or

Tuesday, 26 May 2009 20:00

Safe practices

While travel is an integral component for continued business growth, there are risks to be aware of. Travel puts employees in unfamiliar environments where incidents may occur. They may be in locations where they stand out from the local population and are unfamiliar with the local health risks, culture and customs.

Travel risks affect not only your current employees but also future employees and your company’s security and operations. It’s important to be prepared for any type of risk that may happen and to manage those risks appropriately.

“There is much more emphasis placed on health and safety procedures in the permanent workplace than on travel, even though travel brings a greater risk potential,” says Tracy DeBarr, a corporate account manager at Professional Travel Inc.

Smart Business spoke with DeBarr about how to develop a travel risk management plan and communicate it to your employees.

What risks can you run into while traveling?

There are five risks to be aware of:

n Risk to personnel — Crime, civil unrest, terrorism, illness and weather conditions.

n Risk to corporate reputation — Failure in duty of care, unethical behavior by employees and misuse of travel expenses.

n Risk to data/equipment/productivity — Protecting data carried by employees while traveling; lost, damaged or stolen baggage, equipment or personal items; protecting employee’s personal travel data; and failure to meet immigration requirements.

n Legal risk — Duty of care, data protection regulations, failure to comply with tax laws and illegal activity by travelers.

n Financial risk — Penalties for legal risk and misuse of travel expenses.

Are employers responsible for travelers?

It is your legal duty to protect your employees, whether they’re working in your facility or traveling off site. New laws, such as the Corporate Manslaughter Act, hold you responsible for anything that happens to your employees while on business in Europe. It provides a more effective means to prosecute companies for corporate manslaughter in England, Wales and Northern Ireland and corporate homicide in Scotland. The law punishes corporations for failure to properly manage the health and safety of employees and toughens the duty of care responsibility toward employees. The organization is held responsible for travel incidents instead of individuals within the organization. This applies to any work-related death or injury, regardless if the company is based in the United Kingdom or not, and is not limited to business travel.

What benefits will you see from the right approach to travel risk management?

The six benefits you’ll see are:

n Effective travel budget management.

n Better tracking of travelers.

n A plan of attack that allows you and your employees to respond quickly and effectively.

n Reduced liability and lawsuits.

n A more secure future. There were 24 employees from one company on the flight that went down in the Hudson River in January. If that event were fatal, it would have caused a catastrophe for that company.

n Employees know you are concerned about their safety.

How do you develop a travel risk management plan?

Many companies have a risk management department or policy, but oftentimes, it does not include travel. You need to mitigate travel risks and assist travelers so they are able to do their jobs. First, assess the risk levels of all scenarios associated with travel. Then determine which threats you can handle internally, which you can transfer to an outside company, such as an insurance agent, which you can eliminate, and which you can tolerate with little risk to the company. From there you develop a travel risk management plan that will be effective for your employees, corporate image and bottom line.

Your travel management company should play a crucial role in your plan. It should assist managing, communicating and enforcing your travel policy as well as maintaining traveler profiles to track and assist in case of an emergency. It should also provide pretrip, destination-specific, traveler-specific, high-risk destination and intelligence reporting to employees.

How do you communicate the plan to your employees?

The plan should be readily available through your intranet, employee handbook, human resources department and department managers. Everyone should be clear on what his or her responsibilities are. Depending on the level of crisis management, the plan may need to be rehearsed ahead of time to make sure it runs smoothly. You don’t want to realize that kinks need to be worked out during an emergency. Meet with your employees after a rehearsal to gather feedback on the process to make sure situations are handled correctly in the future.

Review your travel policy and travel risk management plan at least once a year. With constant changes in the travel industry, your business, and economic, social and political issues around the world, what worked last year may not be the best practice for this year.

What are other ways employees can prepare for travel to unfamiliar places?

Be aware of your surroundings. Don’t wear expensive jewelry or carry expensive luggage. Also, don’t let anyone meeting you use a card bearing your name, company name or logo. Choose your luggage carrier and cab driver yourself, and always look for the nearest exit in case of emergency. Research your destination prior to arrival. Being prepared is always a good thing. Finally, do not carry more cash or credit cards than necessary and never check valuables or travelers checks in your luggage.

Tracy DeBarr is a corporate account manager with Professional Travel Inc. Reach her at or (440) 734-8800 x4096.

Tuesday, 26 May 2009 20:00

Future planning

Many changes to estate tax planning may come about during President Obama’s first term, including legislation that would reverse the scheduled “zero estate tax” in 2010 and instead continue the 2009 exemption and rates.

It appears that the 2009 estate tax exemption of $3.5 million and 45 percent tax rate will likely be made permanent. Very few in Congress would like the rates to return to pre-2001 Tax Act levels — a $1 million exemption and 55 percent tax rate.

The estate planning focus will continue to change, as people realize they will likely face smaller estate tax bills or none at all due to the increased exemption and the economic downturn. The focus is shifting back to estate planning basics.

“For years, estate planning was driven by estate tax planning,” says Roger L. Shumaker, member of the estate planning and probate department at McDonald Hopkins LLC. “As taxes have becomes less of a concern, clients can get back to the underlying issues of estate planning — developing a plan to leave a legacy for family members, friends and favorite charities.”

Smart Business spoke with Shumaker about the basics of estate planning and how federal and Ohio estate tax planning have been affected.

What are the basics of estate planning?

It’s looking at what you want to accomplish during your life via a wealth transfer plan, and determining how to complete those objectives. Then, based on estate assets and whether state and federal taxes are anticipated, you can see what is available and how much should be left to your beneficiaries. There might be room to give to a charity instead of leaving everything to children and grandchildren.

There are some complexities at the higher levels of wealth involving generation-skipping transfer tax planning. You can set up a trust that provides benefits to your children, but the estate taxes are skipped for that generation and passed down to the grandchildren or great grandchildren.

How have federal and Ohio estate taxes been affected?

The federal estate tax exemption is now at $3.5 million. Most of the bills introduced in Congress have the exemption at $3.5 million or above, while one puts the exemption back at $2 million and another at $5 million. It will likely be at least $3.5 million with some rate adjustments or other subtle tweaks to make it easier to plan, although some suggested changes in the 2010 Obama budget could make planning more challenging for wealthier individuals.

While Ohio has an exemption of $338,333, allowing a married couple to eliminate Ohio estate tax on $776,666 with proper planning, assets exceeding the Ohio exemption will be taxed at about 7 percent.

The Ohio tax on the gap between the federal exemption at $3.5 million and the Ohio exemption may exceed $200,000 in the estate of the first spouse to die. With proper planning, this tax can be deferred until the death of the surviving spouse.

How do reduced interest rates and lower market values affect estate planning?

It’s one of the best times to gift or sell assets to family members. You’ll probably get an attractive appraised value for the gifts or sale of an interest in a family business because the earnings multiples are at low levels. Of course, the transferred property would be taxed as a capital gain when sold by the recipient later on.

Reduced interest rates are also important in setting the interest rate that’s charged on an intra-family loan, for example, where the parent as the property owner agrees to finance the sale of the property by making a loan to the family member or a trust. Those rates are at near historic lows, and even for a long-term loan, the minimum required rate is between 3.5 and 3.6 percent.

The rates are so attractive that existing promissory notes with higher interest rates can be renegotiated to the current lower rates. Proper planning can enable you to take advantage of these circumstances, but the principles also work with other properties.

Should I change my existing documents in light of the larger estate tax exemption?

If you haven’t done anything with your estate plan since 2001 or 2002 when the federal exemptions were enacted, you should probably review the plan. It is possible that different planning strategies will reduce taxes and ensure proper distributions to a spouse or other family members.

It is also possible that the larger exemption may result in property being held in trust and not as fully available to a spouse or children than was intended when the exemption was smaller.

What other changes might affect your existing estate plan?

Even people who don’t think they have a tax problem need to keep an eye out for changes in family circumstances, such as health or marital statuses of children. Also, as grandchildren arrive, you may want to give some of your wealth to them.

When many people see their adult children becoming more mature, they often revisit the issue of the estate executor and trustee. People don’t want to place this burden on their young children, so they look outside of the family for an executor and trustee. But as children get older, they might be able to better handle those roles.

Nevertheless, trusts may last for generations so institutional trustees are often the best choice. If clients haven’t looked at their estate plans in several years, it would be a good idea to revisit them to see if any changes need to be made.

Roger L. Shumaker is a member of the estate planning and probate department at McDonald Hopkins LLC. Reach him at
(216) 348-5801 or

Tuesday, 26 May 2009 20:00

Looking into the future

Businesses face major changes when the economy sours, disasters occur or the political atmosphere shifts. The challenge for business owners, then, is to learn how to sustain their business through boom-and-bust cycles and plan for the many unknowns that may happen.

“The known part of the business environment is the platform that’s used for formulating strategy,” says Paul Prabhaker, associate dean of the College of Business and marketing professor at Northern Illinois University. “The unknown part, it can’t be wished away — it’s there — but that’s where sustainability comes in.”

Smart Business spoke with Prabhaker about the practices that can inhibit a business’s long-term health and how to adopt the processes to make your company more sustainable.

What are the keys to creating a sustainable future?

Short-term businesses are meant to generate immediate-term rewards to stakeholders, while sustainable businesses will put that second. If you want to be sustainable, you need to reprioritize your corporate interests and move away from instantaneous gratification, whether it is immediate customer satisfaction or market rewards such as overnight stock price increases.

A long-term business will be driven by a top-down mission and vision, while a short-term business has more generic statements so they can be customized to every business opportunity. Sustainable businesses stay the course, regardless of short-term financial metrics. The biggest challenge is not what you should be doing but what you should give up. This means prioritizing your long- and short-term plans and determining who your real stakeholders are.

Why is it important for business owners to address sustainability?

There has been exponential change and an increasing uncertainty of the future. As you get better at what you do with your knowledge and your capabilities, in shorter and shorter cycles, and get rewarded for this with better returns, the temptation is to do more of the same. Hopping from one bubble to another seems obvious. It becomes easier and easier for you to ignore long-term sustainability — until the bottom falls out.

With sustainability, you have to listen to a number of different voices and not give in to one voice alone. When you listen to just one voice, you return to that vicious cycle, which gets faster and faster and leads to an unpleasant ending.

What characteristics does a business need to have to remain sustainable?

n A well-defined corporate character

n A willingness to prioritize customers who are aligned with business sustainability

n Champions of customer delight, beyond excellence and process improvements

n Co-creation with customers and other stakeholders. The customers and company are melded together, even in a shifting marketplace.

n Flexibility. The organization aligns with the market to blend into the environment while staying true to its character and belief system.

n Collaboration and knowledge sharing, which leads to the redefinition of ownership

Understanding sustainability and seeing it in others is not difficult, but practicing it is. When looking at a company’s corporate behavior, look at what is not influenced by the environment and short-term trends (i.e., long-term focus) and then at what products or services the business has that are designed to meet instantaneous market needs (short-term focus). These easily reveal which way the firm is weighted.

What practices can inhibit a business’s long-term sustainability?

This is where you understand the true drivers of markets — every product becomes standardized, all organizations slow down, all customers become smarter and all markets become saturated. Every market will decay, and every customer will get smarter. From there, products, customer satisfaction and company market values also decay, unless you put strategies in place to prevent or minimize that decay. Short-term market opportunities are a powerful temptation. This instantaneous ‘microwave’ mindset that drives some business strategy can be the death knell for an organization.

How can a company begin to adopt the ideas of ‘sustain-ability’?

First, sustainability is not a strategy but rather an ability or a character attribute. It involves long-term, embedded business practices. Corporate character counts as much as business strategy. Second, corporate strategy needs to be tied to new metrics and intangibles that can stand up to change. It’s not as easy as simply prescribing tactics to move from short-term to sustainability; it involves a fundamental shift in corporate philosophy. Most organizations are quick to implement opportunistic strategies to cash in on boom cycles and then attempt to wait through the bust cycles; some organizations ignore the boom-and-bust cycles and stay content.

Sustainable organizations are those that balance the two missions by blending corporate character and business strategy.

Third, focus on business strategy that drives sustainable performance versus opportunistic performance.

Fourth, learn your Sustainability Index (a tool that measures how sustainable a firm is). What portion of your business’s ROI comes from stable, sustainable performance and what portion from cyclical, opportunistic performance? Audit your profits, revenue and sales using this index. Combine these, and you have your Sustainability Index.

Remember, corporate character and business strategy combined judiciously result in organizational sustainability.

Paul Prabhaker is the associate dean of the College of Business and a professor of marketing at Northern Illinois University. Reach him at (815) 753-6176 or

Tuesday, 26 May 2009 20:00

Best practices for new hires

You’ve survived the interview process and hired a new employee. But the work doesn’t end there. As the new employee enters the company, you need to make sure he or she understands your corporate culture, what is expected of him or her, what is appropriate and what is political suicide.

If you cannot help the new hire become acclimated, you face higher turnover rates and personnel costs. Repeating the hiring process over and over can also distract you from daily business duties. But if you can get that person to stay at least a year, there’s a strong likelihood he or she will remain at the company for a longer period of time.

“You need to have a strong mentoring and orientation program,” says Jessica Ford, director of sales and operations at Ashton Staffing. “You also need to find out new hires’ expectations of themselves and your organization, both for the short and long term. This will allow you to retain and better engage your employees.”

Smart Business spoke with Ford about how to set forth expectations for new hires, how to educate new hires on office policies, politics and appropriateness, and how a good mentoring program can help the new employee fit into the company.

How can you set forth expectations for new hires?

A common problem for new hires is that their job hasn’t been well-defined. If you can’t define what you want the new employee to do, it’s difficult to give him or her feedback. If you don’t understand the individual’s job description, how can you evaluate whether the employee is a good fit or not?

Many new hires falter on the job and leave quickly because they weren’t clear about your expectations. You may be too busy to create business plans and job descriptions, but these items can make life a lot easier as the company matures.

Every position in an organization should have a job description that is reviewed in detail with the employee during orientation. Make sure the new hire’s direct supervisor also reviews the job description since he or she will be measuring that employee’s performance. The new hire can also take this time to discuss his or her goals and

How do you educate new hires on office policies?

Every company, no matter what its size, should conduct a thorough orientation with all new hires at every level. A good orientation program should include a company history, the organization’s short- and long-term goals, basic office policies, and specific job goals and objectives. Every employee should know your company mission statement, slogans, awards achieved and your unique, distinguishing factors. Office policies, such as dress code, Internet tracking and payroll information, are essential to an employee fitting in and understanding the corporate culture.

Test your new hires on what they have learned once you complete the orientation. Some employees may feel uncomfortable during their first few weeks asking their trainer to explain something if they do not understand it. Test results show you areas that you might need to cover again with the new hire. At the end of orientation, the employee should feel valued and that you care about his or her future.

How do you educate new hires about appropriateness and office politics?

Appropriateness is closely tied to corporate culture. You need to understand whether polite chitchat before a meeting is proper etiquette or if it’s just considered a total waste of time.

Office politics is an issue that increases in importance as you move up the corporate ladder. A new hire needs to know whom to trust in the organization, the types of alliances to build and the people to avoid.

What should be included in a good mentoring program?

A strong mentoring program can help new hires learn the ropes about appropriateness and office politics. On-boarding is a process that pairs a new hire with a peer within the company who might come from a different department or discipline within the same unit.

The experienced employee should serve as a guide and mentor between six months to a year, depending on the new hire’s role and the corporate culture. The mentor explains where the minefields are and how to avoid them and encourages the new employee to meet promptly with his or her boss to clarify key objectives that will determine performance rating and incentive pay.

Assigning a mentor can be tricky. You may want to assign the new hire to the employee who has time available, but that can be a mistake. You need to choose your best employee for this role. If your best employee doesn’t have the time, make on-boarding part of his or her key performance objectives. Make sure to check back periodically with the mentor for feedback and make corrections if the program is not going as expected.

Jessica Ford is the director of sales and operations at Ashton Staffing. Reach her at (770) 419-1776 or