While our parents and grandparents likely had little if any health care coverage when they entered the working world, today’s employee expects, if not demands, a comprehensive health care plan as part of their compensation package.
“We’ve created in a very short period of time a huge sense of entitlement in this country,” says Tina Antram, vice president of Hilb, Rogal & Hobbs. “We expect our employers to provide health care, but nobody said how they are supposed to pay for it.”
Smart Business spoke with Antram about how employers can maximize their employee health care plan while keeping a close eye on controlling costs.
Where has the industry landed, and where does it appear to be heading?
Employers have stepped up to meet the sense of entitlement by providing health care. But until we grapple with what’s driving the costs, it may become an unrealistic expectation for the employer to continue to do that.
We’ve squeezed nearly everything we could out of managed care over the last decade or two. Employers started cost-shifting just as the government cost-shifts. But you can’t just cost-shift and expect to manage costs. I think employers have been and will continue to put efforts toward managing their plans. They need to perform a continual analysis of their networks, their level of discounts, and new concepts like the tiered networks we are creating based on costs and outcome.
How can employers better determine a global health care strategy?
One issue that should be addressed early is what they want their plan to accomplish. Employers should look at what they’re doing with the population and align their plan with desired behaviors. They should make sure it speaks to what they are trying to accomplish.
Do they want people to make healthier lifestyle choices? If so, are programs in place to help them? If they have a lot of smokers in the population, will they provide smoking-cessation programs? Do they provide 100 percent coverage for preventive care? Employers need to step back and look at this globally.
There’s certain due diligence that should be conducted by every employer to ensure that the provider network they’ve selected is effective in terms of cost and quality and is in line with their desired outcome. They need to manage the specifics where they can behavioral health, disease or case management, pharmacy plans and the network. They also need to understand how their vendors are interacting with the insurance company. A smaller employer can look at this through its vendor or insurance company just as a large company may have contracts out on its own or through a third-party administrator. The concept applies to all employers.
What about behavioral health and disease management?
Employers need to investigate these primary areas of health care. Behavioral health is a big component in terms of care management. We often find a huge co-morbidity between areas such as heart disease and depression, or between cancer and depression. It’s very common, and often the depression aspect isn’t being treated. Someone may have one of these diseases and still work, but the depression exasperates it to the point where he or she can’t work.
A disease management program can help reduce long-term costs. Different from catastrophic care, it targets conditions like asthma and diabetes that can be controlled and managed to a significant reduction of costs in the long run, but if left untreated and unmanaged can escalate into a substantial impact on the cost of a health plan. Chronic conditions make up roughly 50 percent of health care costs, but they are treatable conditions. These are areas that employers can help their population assess.
What tools should employers provide to maximize their health plan?
More than ever, an employer has the ability to support employees and help them make informed decisions when selecting benefits. Many health insurance companies now provide modeling tools for use with some of the new plan design options that are often referred to as consumer-directed plans. These tools help employees choose benefit levels for items like deductibles and coinsurance.
Additionally, employers can provide health advocate services to assist employees in researching and resolving claims issues, and many tools exist to support wellness initiatives. For example, employers can easily provide newsletters designed to help the population make better lifestyle decisions creating a healthier work force and ultimately impacting health care costs.
TINA ANTRAM is vice president at Hilb, Rogal & Hobbs in Tampa. Reach her at (813) 261-7979 or email@example.com.
Stop beating yourself at your own game. Many of you monitor your competitors for the wrong reasons. You see what they do. You do something similar or try to outsmart them with the same rhetoric. Take the furniture industry or the automotive industry even the office product industry; in fact, take any industry. Line up all of the competing ads and you can’t tell one ad from the next. There is absolutely nothing distinctive about them. There is no apparent competitive advantage. I call it “garbage-in-garbage-out” syndrome. If you find yourself considering such look alike messaging, make a u-turn and run like hell the other way.
Extensive research is involved in the process of understanding your audience. Don’t be afraid to get into the minds of customers to get the real deal; what influences their buying power and why do they choose one product or service over another? Through surveys, focus groups and other research components, your company can identify the wants and needs of current, potential and former customers. Then re-evaluate your strategies. After researching your customers’ opinions, you will be able to examine what your business should do to improve poor business practices or even create new strategies to focus on your target market.
Part of winning the game is understanding the players. Yes, customers are the voice of our businesses; however you also need to take note of your surroundings and be aware of what current and future competitors are up to. This will help you assess your business strategies and get a better grasp on how the industry is evolving. A basic method of examining the industry is simply identifying what in your market can threaten your company’s position. Find out who is out there in the industry offering the same product or service as you do. How is it different from your product or service? Who is offering a substitute product or service? Simply knowing your competitors and potential competitors enables you to find innovative ways to stay on top. Understand how your business fits into the whole scheme of things by asking yourself, what are my competitive advantages and how do I keep my competitive edge?
It is extremely important to commit to continuous research and analysis of your customers’ buying behavior to monitor your success and/or failure relative to your competitors. It’s not a one shot deal. You don’t conduct the research one time and continue to use the same results from survey three, five or 10 years ago, and applying it to today’s market. Ongoing research is essential to keep up with the competition, the changes in the market and the buying trends. Companies, products and consumer behavior change. Products evolve, and it’s up to you to make sure that you are aware of all of the trends and how your business fits into the evolving industry.
A company should take stock of where they are in the industry and be able to identify how or if they have improved over the past year; what can they do to increase success; how they rank among their competitors; are they catering to their target audience, and how are they received by their customers? Taking time to analyze your business successes and failures will help your company grow far beyond your competition. Constant awareness and action breeds success and you won’t have to hire a wizard to be successful.
MALCOLM A. TEASDALE is the principle and “Big Idea Catalyst” of Teasdale Worldwide, a strategic marketing firm headquartered in Tampa. Reach him at mat@ScreaminEyes.com. To obtain a new direction, increase revenue, and the expertise to facilitate customers’ UBAs, call Kathi Kasel at (813) 868-1520 or e-mail Kathi@MarketingofDistinction.com. To view additional articles, register at www.MalcolmOutLoud.com.
The furniture retailer was approaching its 100th anniversary and had a strong brand with good products, and there were ambitions to expand operations into additional states.
But brimming just below the surface were several issues that threatened to stall growth and disrupt the flow the company had experienced since after the Great Depression.
“It was kind of floundering a little bit, mainly because it hadn’t really defined its strategic objectives,” says Marks, president and CEO. “It had had a number of years of flat sales. We built a number of new stores. A lot of them were company-operated, and it really wasn’t what we were all about - we added a lot of costs.”
Prior to Marks’ arrival, the company had made efforts to keep those costs in line, but those efforts restricted growth by inhibiting investment into technology. Equipment had gotten old, and it would be expensive to modernize the company.
Then there were issues with the dealers.
“There hadn’t been particularly strong standards of who could become a dealer and who couldn’t,” says Marks. “There were also some dealers who didn’t invest in their buildings, and their buildings looked old and tired. In today’s retail market, the consumer is not going to give you an opportunity to show them how fabulous your service is and how warm and friendly your ... people are if they won’t walk through the door.”
While the company was certainly far from crisis, Marks had to do something to reverse sliding same-store sales growth and thwart the potential for unhappy store dealers.
“Rather than just do accrued maintenance, we said, ‘Look, let’s change our image and let’s make it a little more modern, a little more 21st century,’” says Marks.
He began by instituting a round of strategic planning - something the company had never done before.
“We got all of our management team and owners together and decided what it is we wanted to be,” he says.
They decided they wanted to find a way to continue to service their current client base the middle-class working citizen who typically needs credit while reaching out to other demographics. They came up with an idea to launch a new store concept called “Badcock Home Furniture & more” that would include a brighter, more spacious store display, a new logo and an expanded product line that would now also offer patio furniture, appliances, electronics, floor coverings and accessories.
“The Badcock & more concept was intended to make it a little more modern, bring in a younger consumer, bring in a little more affluent consumer without sending or telegraphing a message that we’d raised prices, because we never did,” says Marks. “We would like ... to attract that other customer without losing the core folks that brought us to the dance.”
The new image was also a potential way to solve issues with inflation and decreasing profit margins.
“The most difficult strategic challenge for the company is the fact that furniture has had no inflation in it in the last 10 or 20 years,” says Marks. “A $400 sofa 10 years ago is a $400 sofa today, while gasoline is up from 80 cents to $3.
“For our dealers ... their labor’s increasing, their insurance, their health costs, all of that. ... So our job has been to get customers to buy, instead of a $400 sofa, to buy a $500 sofa or to take business from our competitors.”
But Marks hadn’t forgotten about the lack of technology. The previous management had tried to keep profit and losses in line by reducing selling, general and administrative expenses.
“If you keep trying to cut money out of general and administrative expenses, eventually you start cutting through the fat and into the muscle,” says Marks. “We had 20-year-old IT systems, for example. The connectivity to our stores was very poor.”
Marks made the necessary investments to consolidate IT systems, as well as inventory, which had previously involved seven different systems. The result is better communication with stores and better functionality with dealers. Now, he’s focusing on supply chain issues.
“Eight years ago, 80 percent of our product was domestic and 20 percent was imported,” says Marks. “Today, 80 percent is imported and 20 percent is domestic. ... What it does is it takes our supply chain from three weeks to four months. So we have to plan out four months in advance, and if we get it wrong, we’re not going to get it fixed for weeks. So we can disappoint customers, which again, according to our business model, is the worst thing in the world that we can possibly do.
“The real strategic focus and the upside for us is being able to be better than anybody else at having the right product in the right place at the right time. I don’t think that the industry does that very well.”
But while Marks saw what was needed to keep the company from slipping further, coming up with a concept to revitalize its operations was only half the battle. Marks also needed a plan to get management and employees on board with the significant changes.
Getting people on board first meant getting them involved, and Marks used the strategic planning sessions as an important first step.
“We developed an action plan that had 14 key initiatives and 376 action steps in it,” says Marks. “What that did is it involved all of the management folks in the company. They each had a role. They each had a piece of those 376 things to do. So they had things that they could see immediate and direct results from, and that enthuses people.”
The next challenge was getting the rest of the employees to buy in. He realized that if the company was going to ask so much of employees, it should give a little something back as well.
“For example, we have a third week of vacation at five years here,” he says. “It used to be 10. It was a hot button with everybody, and when the company was successful and made more money, we had the dollars to be able to go out and offer that to our employees. It’s that kind of thing that keeps everybody engaged, when they know that there’s something that benefits them personally in addition to the company.”
He also started a profit-sharing plan, and in the years that Badcock beats its profit plan, the company gives an extra check to every employee.
“We just say, ‘Hey, look, we did better than we thought we were going to do, so we’re going to share it with you,’” he says.
But Marks still had to address issues with those who had perhaps the biggest stake in all this the dealers. Badcock’s dealer-owned stores operate similarly to franchises, but instead of the company collecting money from the dealer, the dealer receives a check for 25 percent of everything the store sells each month. The dealer pays for the store including maintenance and construction costs the labor and expenses, while Badcock pays for the furniture, inbound and outbound freight costs and warehousing.
Dealers who wanted to upgrade to the new “Badcock Home Furniture & more” concept were going to spend $150,000 on average to revamp their stores. With such a hefty price, Marks thought the dealers deserved a little incentive.
The company’s previous contract with dealers included a 30-day-out clause, with which either party could change their mind about doing business with the other after 30 days.
“If you’re a dealer and spent $150,000 on your building imaging it as a Badcock & more store, there’s no safety in that,” says Marks. “We felt that it was much better for the dealer and for us to have a term-limited contract. We set 10 years as the term, but it also has two five-year options. So as long as the dealer is in compliance, they ... have 20 years to recoup that cost that they put into that building.”
The increased level of commitment and enhanced growth opportunities provide a great incentive for dealers to convert to the new concept and also builds a stronger relationship between them and the company.
When Badcock was developing the new contract, it had a panel of dealers help write it.
“When we changed our whole contractual relationship with the implementation of Badcock & more, we actually had 12 or 14 dealers sit down with us and hammer that contract out,” says Marks. “So then when we rolled it out to the rest of the dealers, they were quite comfortable with it because they had had representation.”
So far, approximately 225 of Badcock’s 319 stores have converted to the new Badcock & more concept, and it hasn’t been in vain. Converted stores are seeing average sales increases of 20 percent to 25 percent their first year.
And the piece that ties the whole thing together is communication.
“You can’t communicate too much,” says Marks. “It’s just like advertising. Just when you think that you’re sick and tired of seeing your ad on television, it’s just beginning to break through to the consumer. The same thing goes with communication, particularly with regard to strategy.
“Does the average guy on our loading dock really care about a speech about strategy? Maybe, maybe not. But if you say, ‘Look, here’s what’s in it for you. We’re going to grow positions. You might get promoted. You’re going to get an extra week’s vacation in five years because the company made more money. I need you to help me do these jobs in order to continue this progress so that we can provide you other things that help you and your family,’ that works.”
The company also makes a committed effort to keep everybody updated on the company’s progress. Three times a year, Badcock holds a lunch for 300 to 400 of its employees, reiterating strategy and highlighting where the company is headed.
Twice a year, the management team jumps on a bus and travels to meet with dealers throughout the eight-state region that Badcock operates in, and twice a year, dealers are brought to headquarters for business review meetings.
The changes, as well as Marks’ strategies for implementing them, have allowed Badcock to return to an above-industry performance, with revenue increasing from $515 million in 2005 to $537 million in 2006.
While sales had started to decrease in the 1990s, there has been eight straight years of increases since Marks became president and CEO. Sales rose 8 percent in fiscal 2005 and 5 percent as of the fiscal year ended June 30, 2006, while the industry tends to average only 2 percent or 3 percent annually.
In July, the company opened its first store in Virginia and has plans to continue expansion in current states while keeping an eye on locations including Kentucky, Missouri and the southern regions of Ohio, Illinois and Indiana.
“There’s so much business out there in towns with 10,000, 15,000, 20,000 people that are not adequately covered,” says Marks. “We have a lot of opportunity. ... I believe this business can do a billion dollars with the business model that it has now.”
HOW TO REACH: W.S. Badcock Corp., www.badcock.com
What are the benefits of incorporating humor and other fun in your employees’ daily routines? They are more productive, more creative, healthier (less sick time) and you guessed it happier (less turnover).
Why? Because humor helps employees handle difficult situations, build teamwork, release stress and validate each other.
Jane Whitney Gibson agrees that having fun in the workplace serves up both personal and organizational benefits. She is a professor of management at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University.
Smart Business spoke to Gibson about the steps that lead to a corporate culture that embraces having fun on a daily basis.
What are some benefits to having fun at work?
On the personal side, having a good laugh releases endorphins and adrenaline, substances known to increase energy and boost creativity.
Personal well-being is not the only benefit, however.
Workplace enjoyment correlates to increased organizational creativity and productivity. Just ask the fun-loving people at Southwest Airlines, where employees are hired for their ready smiles and positive attitude, then trained for skills.
Stew Leonard’s stores in Connecticut and New York are other examples. Employees have fun at pie-eating contests, hayrides and ski trips. The popular retail chain has been referred to as ‘the Disneyland of dairy stores’ because of its costumed characters and scheduled entertainment designed to make shopping a fun event for customers.
And, by the way, both Southwest and Stew Leonard’s are extraordinarily profitable within their industries.
How do companies ratchet up their fun quotient without going through a complete cultural overhaul?
Most people know how to have fun, but they need permission to have fun at work without feeling guilty. Corporate managers can achieve that by being a P-A-L.
- P Pay for fun.
- A Allocate time for fun.
- L Lead the way.
Nothing reinforces a new activity like paying people to do it. DWL, a Toronto consulting firm, gives each employee $1,000 annually to go out and do something fun. A contest ensues when people bring in pictures of their activities to see who had the most fun. The winner receives $5,000 for the next year’s activity.
Meanwhile, at some places of employment, employees are often made to feel guilty if they leave their desks to eat lunch. Fun activities such as organized sports during work hours encourage people to take a break and come back refreshed and eager to face whatever tasks they have to perform. Likewise, a lounge with video games, aquariums and comfy seats or on-site gymnasium/workout facilities encourages healthy lifestyles and ‘get-out-of-the-rut’ breaks.
What do you mean by the ‘L’ statement above: ‘lead the way’?
Management cannot just send out a memo and expect the workplace to transform into a fun environment. Management has to model the behavior it wants from employees.
When Southwest Airlines CEO and president Herb Kelleher showed up in a hangar in the middle of the night dressed in a flowered hat and purple dress, employees couldn’t miss his ‘work-hard-play-hard’ message.
A recent United Nations study found that Americans work, on average, more days per year than employees in any other industrialized nation, so it only makes sense that organizational leaders should follow the PAL strategy.
The first prerequisite is for the leadership team to realize that fun is an effective business strategy. When employees start having fun, morale increases, loyalty deepens and teamwork is enhanced.
Work-hard-play-hard is a winning strategy for everyone.
JANE WHITNEY GIBSON is a professor of management at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, where she serves as editor of The Journal of Applied Management and Entrepreneurship. Gibson is the author of numerous articles and books, including “The Supervisory Challenge and Organizational Communication: A Managerial Approach.” Reach her at firstname.lastname@example.org.
How to get started
It all starts with the brand discovery meeting. Gather between five and eight employees for an interactive branding session. The objective of this discovery meeting is to determine those very special Unique Selling Advantages (USAs) that all good companies possess. Start by listing a series of facts about the organization: its origin, staff, and the products and services. The objective here is to distill these facts down through multiple steps to uncover the handful of USAs.
Now if you were to stop there, you would be like all of the other ineffective mainstream advertisers out there. You need to take it to the next level and uncover the Unique Buying Advantages (UBAs) as well.
UBAs tell us what’s most important to the customers from their viewpoint; it’s the customer’s perspective about the company or the products or services offered. UBAs include what the customer cares about the most, and the factors that motivate them to buy a product from one company over another.
USAs and UBAs are often very different because companies are not cued into what a customer wants or how a customer feels; they must understand what truly motivates customers buying power. A company must be conscious of why a customer is purchasing a product or service and the benefits they reap from the purchase.
Take the pulse of the company. The company far exceeds the executive team and is more than just the inclination of the CEO. Have someone from customer service, sales, someone from the warehouse if you have one; get a good cross section of employees who interact with customers. This is a formative process in which you begin with a broader view of the company and drill down to what the company feels is the list of selling advantages. Do not make the mistake that many organizations make by relying on the CEO and executives perspective only.
What do your customers want?
How do you find out what motivates your customers? You have to ask them. There is absolutely no way around not doing your homework, your research on your customers. It is essential that you obtain primary research and not rely solely on second hand information. Be brave enough to approach your former customers to find out how you failed them; what made them seek out another company? Utilize fundamental marketing research techniques to get to the root of what motivates and drives the customer, and what they are looking for in their lives that your product does or might be able to facilitate. From there you must compare what you think you want your product to communicate with what is meaningful to your customers and bridge the gap to create optimal results. Get through the noise and into the minds of your customers.
Taking the time to complete thorough research and identify with your customers will give you a far more competitive edge. Traditional marketing and advertising usually stops at the USAs. Very rarely do you see someone statistically and strategically stopping to question and compare every message. The best way to know that your USAs and UBAs are holding true is when your company is mentioned, your target customers can say, ‘that company knows me and what I want.’ This gives you the initial power to stand out from the competition, strike a nerve and impact your customers in a very meaningful and emotional way so that your product becomes desired and bought.
Yes the research is trench work, but it’s necessary work in order to determine the USAs and the UBAs; it’s where the power is. That is indeed what will form and shape your creative messaging because after all that’s what your customer wants. Rather than pander up to your own ego, why don’t you pander up to your customers needs? Identifying the USAs and UBAs will enable a company to get to the “Big Idea,” and that will catapult your company forward.
MALCOLM TEASDALE is the principal and “Big Idea Catalyst” of Teasdale Worldwide, a strategic marketing firm headquartered in Tampa, Fla. Reach him at mat@ScreaminEyes.com. To obtain a new direction, increase revenue, and the expertise to facilitate your customers UBAs, call Kathi Kasel at (813) 868-1520 or e-mail Kathi@MarketingofDistinction.com. To view additional articles, register at www.MalcolmOutLoud.com.
But soon after a radio ad aired for Portable On Demand Storage, he got the sense that the idea may have far more potential than originally anticipated.
“As soon as (it) finished, the phone started ringing, and we had two or three people say, ‘Tell me more about this PODS thing, I might want to rent one,’” says Warhurst, president and CEO of PODS. “Then we had three, four, five more people call and say, ‘I want to buy stock in your company, or I want to buy a franchise,’ “
Not a single container had even been rented yet, but it was obvious there was a lot of growth potential for the concept of a container that can be stored at a customer’s house or picked up and stored in a PODS warehouse.
Warhurst has parlayed that initial interest into 100,000 units for rent across 150 markets in 45 states.
PODS had 2005 systemwide revenue of about $200 million, including franchisee revenue, and has grown by 100 percent a year during the past seven years. This year, it is targeting $300 million in systemwide revenue.
“I wish I could tell you we were that smart, and we knew all along were going to be this multistate and location industry,” Warhurst says. “Really, creating a new industry is what we are doing.”
Despite being surprised by the success of his concept, the former fire chief and paramedic has carefully managed his company’s growth to keep it on the path to success. Here’s how Warhurst has conquered the challenges he’s met along the way.
Growth at a steady pace
Early on in the PODS venture, Warhurst was determined that the company’s success would not be its demise. He had already once experienced the drawbacks of growing too fast after creating 911-emergency routing and records management software with partners.
The software was such a hit that they eventually had no choice but to sell to Bell Atlantic.
“We were so successful and contracted for so many jobs and installations, we couldn’t get it done and didn’t have resources to get it done,” he says. “Unless you have the infrastructure around you, I would tell anybody to do what you can do comfortably.
“Don’t stagnate your growth, but build an infrastructure that allows you to grow at whatever pace you want it to be. Getting the systems and procedures in place makes it so much easier down the road. It does slow you down in the beginning, but ultimately, it will make you a much healthier company.”
Learning from the software experience, Warhurst was sensitive about not allowing PODS to grow by leaps and bounds in a short period.
“I wouldn’t let my franchise team sell a franchise west of the Mississippi,” he says. “I felt we weren’t ready to go that far. It exceeded our span of control. We made some good decisions to control our growth early on.”
With that mindset from the beginning, Warhurst was able to grow the company at a good pace, which benefited him in the long run and has made PODS an international company.
“Now, we have such a great infrastructure under us, we can open countries,” he says. “All of Canada is under contract or is going under contract. We just did our first cross-international delivery. We made the business decision to do Australia at the first of the year, and we’ll deliver PODS in October.
“By taking the time to build the infrastructure under us, our ability to grow and expand is a piece of cake.”
While growing may also involve change, Warhurst said he prefers the word “enhance” because PODS was the first of its kind. Trying to change and compete in other industries is not something he finds appealing.
“A couple of my franchisees and some people ask me, ‘Why don’t you go to an office POD and compete with GE?’ GE could crush us,” he says. “They’ve been doing modular offices for decades and that is not our core competency. This is our industry to own and continue to own and dominate.
“While I don’t want to deviate and change, I certainly want to continue to enhance and improve how we provide the service. All we have to do is stay focused on what we do best, continue to try and improve our services and continue to grow and don’t get stale.”
Warhurst was already in the storage business when the PODS idea was born. While looking around for more property to build another storage unit in densely populated Pinellas County, the light bulb came on about the possibility of having a portable storage unit at a home.
However, that meant developing a lift system known as Podzilla and a container to hold the storage, which turned out to be quite pricey. Banks weren’t necessarily seeing Warhurst’s vision, a problem with such a capital-intensive business.
“We were building a box that the bank said, ‘Hey, if you go under, who am I going to sell this thing to?’ he says. “There was no secondary market for this collateral we were trying to finance.”
Through different fundraising techniques, bank debt and partner contributions, the company took its first step to the fast track. However, with rapid success came the need for faster decision-making, rendering every decision more of a risk.
“We don’t have the luxury, in a lot of cases, to go out and do case studies and hire consultants to come back and tell us what we already know,” he says. “We do make decisions after some diligence, but my instructions are always, ‘Let’s monitor what we’ve decided. Let’s monitor how it’s progressing. If it’s wrong, then let’s not be ashamed to say it is wrong. If we can tweak it and fix it, then great, let’s tweak it, fix it and hopefully fine-tune the solution and resolve the problem. If it’s completely wrong, let’s not be too proud to say we made a mistake. We made 10 decisions in the last month and one went sideways on us, so let’s fix it.’
“The key is to monitor it. Since we aren’t spending a lot of time on the front end analyzing and doing case studies, the key is to monitor our decisions and to make sure they are going the direction we want them to.”
Warhurst says that for the last five years, his COO ran the day-to-day operations, but Warhurst still kept his eye on what everybody was doing.
“I made sure we were all aimed at the same bulls-eye,” he says. “We met and chatted and everybody knew what the other was doing. It’s important not to micromanage. I’ve driven a truck, I have built a pod and answered the phone and booked an order. I’ve done it all, but I’m not good at any of it.”
To add to the risk, Warhurst and his partners had no prior example to research the direction a company like PODS took for success. The idea was so original that there wasn’t even a mention of such a business on the Internet.
“Our competitors that are coming up now can look at what we did and how we did it and can pick and choose what they like of what we did,” Warhurst says. “We didn’t have anyone to follow. Building the first pod was a risk. Investing the hundreds of thousands of dollars to get off the ground and get the first pod rented was obviously a huge risk in an industry that we didn’t know if t here was an industry there to have or a market there to penetrate.”
Being forced to make quick decisions might actually be a benefit for Warhurst because he says overanalyzing a situation carries its own risks.
“Don’t get analysis paralysis,” he says. “Don’t get too bogged down in trying to overanalyze it. You’ve come up with an idea, and your gut and instincts tell you it’s a good idea, be willing to take the risk. But monitor the decisions you make and be willing to admit when you made a bad one and change it and fix it.
“You can’t be afraid of risk and you can’t be a control freak. You have to trust your instincts and believe in your own vision. If you don’t believe your own story, who else will believe it?”
Build a good team
Part of the decision-making process for Warhurst is realizing he may not always have the correct solution for a problem. Using a leadership style he describes as fairly liberal, he says he tries to point everyone in the same direction but spreads out the power.
“Early on, I was the management team,” Warhurst says. “Obviously, as we continued to grow, my span of control narrowed and wasn’t broad enough to be able to do all the divisions proper service. By bringing on quality talent and getting them to learn how I think and empowering them, I think it’s enabled us to grow much faster than if I micromanaged and did it all myself.
“Clearly, the only way we could grow at the pace we are growing is empowerment.”
Warhurst surrounds himself with talented people he trusts, and when he hires senior staff members, he interviews them with his COO over a two- to three-hour period to try to find the best fit.
“I look at education and historic background and what they’ve done,” he says. “Are they a good fit for the rest of the management team? I get great pride walking down our hall seeing two or three of my managers in a room at a whiteboard solving a problem or kicking a situation around and coming up with solutions.
“There is nobody that has all the answers, and there is nobody that has an ego that isn’t receptive to a peer’s idea or suggestions. It’s an extremely cooperative and friendly environment.”
And if he has a bias toward a solution, he tries to hold it to himself and let everybody else pitch their ideas first.
“Then I’ll throw my opinion in and see if it alters anything,” he says. “Nine out of 10 times, we can come to a resolution that we all get buy-in on, and we all agree this is the most logical of the solutions. On the rare occasion that doesn’t happen, then that is what they pay me the big bucks for. I make the final decision.”
Although it’s important to realize you don’t have all the answers, Warhurst says a leader needs to have confidence that the final goal can be reached.
“Believe in yourself, believe in your idea, and be sure you can afford your goal and objective and that you’re funded,” he says. “Most businesses struggle to raise capital to meet their full objectives, and they have great ideas, but they can’t fund it. It’s important that you have plenty of funding, and you know you can fund what you are getting into.”
How to reach: PODS, www.pods.com or 1-888-776-PODS
“It was pilot error,” says Bob Dickinson, Carnival Cruise Lines’ president and CEO. “The first thing we did was open the bar. The drink of the day was ‘Mardi Gras on the Rocks.’”
It was a troubled start for the company that would, less than 15 years later, become the largest cruise line in the world. While running aground may have given competitors fodder for jokes, Dickinson knew Carnival had a much bigger concern — there was a problem with the way the company was presenting itself to the world.
The brand was, ‘The Mardi Gras — The Flagship of the Golden Fleet.’ The problem was, there was only one ship, it wasn’t golden and “Fleet” was a brand of personal care products that included enemas. The ship sailed half empty and lost $8.5 million in the first year.
The brand obviously needed a major overhaul. And it didn’t take great inspiration, or a midnight epiphany to come up with a new brand.
“When I came down (from the parent company), I had the advantage — I was, among other things, the chief marketing officer,” Dickinson says. “I had the advantage of not knowing anything. I let the company run for a while and didn’t get too involved for a week or two and just studied — studied the other lines, the brochures, what else was going on.”
Those observations resulted in one of today’s best-known brand names: Carnival Cruise Lines.
Starting the voyage
Dickinson could have hired high-paid consultants or a prestigious marketing firm to come up with the new brand, but it wasn’t necessary. Instead, he just asked himself a simple question.
“What do people like on vacation? They all want fun,” Dickinson says. “They may define it differently, but they all want fun. That was the creation of Fun Ship. We started to brand that as early as January 1974. We kept developing the brand.”
Changing the branding of the cruise line wasn’t complicated because the old Golden Fleet brand had poor recognition among consumers.
“The good thing about that brand is nobody really knew it,” says Dickinson. “When we changed to the Fun Ship, there wasn’t a lot of retraining to be done. It wasn’t like Esso becoming Exxon, because everybody knew Esso.”
Dickinson never would have come up with the simple brand name had he allowed himself to get overburdened by the day-to-day drudgery of his job.
“When you are a CEO or a brand manager or a CMO, you need to spend a certain amount of time away from all the little things that the job entails,” he says. “You need contemplative time. I see a lot of people in the business. They have phone calls to return, they have e-mails, they have meetings. At the end of the day, at the end of the week, at the end of the month, even at the end of the year, a lot of their job gets trivialized, and the inmates run the asylum. Others are setting their schedules.
“Frequently what happens is that necessary planning and strategizing, that big-picture, looking-at-it-from-30,000-feet positioning, doesn’t take place because time is eroded by all the minutia.”
Removing yourself from the business is important to gain a clear perspective.
“There is a level of detachment that a CEO or a CMO should have from the day-to-day of the company,” says Dickinson. “Obviously, they can’t be detached all the time. It’s very, very important that they have unstructured time where they can think and they can meditate and they can manage by walking around.”
It’s not an easy change for some executives to make. It takes discipline and dedication.
“They have to start with a little bit of time management,” Dickinson says. “They have to carve out time to do this. Whatever the project, if you don’t create time for it, it never gets done.
“I liken my job as CEO to being the conductor of an orchestra. The conductor does not play an instrument when he is performing. He lets everybody else play the instruments. Whether it’s the winds or the percussions or the strings or the brass, they’re all working together. They’re all in harmony. That’s the job of the conductor. It’s also the job of the conductor to decide what’s going to be played. Where are we going to be?”
Dickinson recognizes that it can be difficult to make the change to that mindset because there is a stigma attached to a CEO who doesn’t spend most of his or her waking hours on the job.
“There are other executives I know in different businesses that kind of laugh at my work hours — I take time off, I take vacation,” Dickinson says. “I may not leave for work until a quarter to nine. I rarely stay past five. I want to get that jump on the road home, but we get the job done, and it’s not a question of working long hours. It’s a question of working smarter, not harder, and getting the right team around you.”
Defining the brand
Developing a great brand means understanding who you are and who the competition is, and targeting your message.
Dickinson see as his competition not just other cruise lines but the vacation industry in general. He wants one thing for his guests, and that is fun. To create a brand that’s fun at heart means looking at any place people might go to have fun, because that’s where the true competition lies.
“We consider ourselves to be in the vacation industry rather than the cruise industry, because cruising only captures only about 3 percent of the overall vacation industry in North America,” he says. “This year, there will be about 10 million North Americans taking cruises.”
That compares with some 90 million people who will visit Las Vegas and Orlando. And it is to those places that Dickinson turns to for inspiration for his fun-based brand.
“If you look at Las Vegas, it’s an attraction and resort destination,” he says. “Orlando is the same thing. Our other competitors are hotels and sightseeing destinations, such as New York, San Francisco or Los Angeles. You have to think about the business in terms of not just who might be your immediate competitors but what other competitors there are for the time and expenditure of money.”
You have to look at the entire competitive landscape to get an understanding of how you can gain marketshare with your brand.
“Who are your competitors?” he says. “If the money wasn’t spent in your company, where would it be spent? It may be a direct competitor, or it may be something indirect. If people don’t buy a Carnival cruise, they may buy a dining room set a year earlier than they need to, or turn in the car a year earlier, or buy a timeshare. They may go on another cruise; they may go to Las Vegas. They may visit Aunt Minnie. We’re talking about a product, in our case, that’s discretionary. Believe it or not, people don’t have to cruise, which is annoying, but true.”
Dickinson says it’s important to keep the brand focused on a simple concept to help present a clear message to consumers.
“I’m not trying to be everything to everybody,” Dickinson says. “I’m not a snake oil salesman. You have to put limits to what you are and market what you are and what you aren’t. That’s what delineation of a brand is all about.”
Maintaining the brand
A brand is only as effective as the people being asked to live it, so people are an important component of a brand. Dickinson contrasts the approach he wants his employees to take with that of a posh hotel.
“The Ritz-Carlton is a very nice experience,” he says. “You wouldn’t call it fun. It’s very nice. It’s very elegant. There’s not necessarily a lot of smiling there. There’s not a lot of interaction with the guests.”
For guests to be happy and have fun, Dickinson knows he has to keep employees happy.
“You have to treat the people very, very well,” he says. “The senior management and I have to be very tuned to the shipboard morale and everything else and be very, very confident that we’re doing the right things and treating everybody with respect and dignity. Could you imagine if that wasn’t the case? The CEO goes onboard a ship to face 900 crew members. He’d be in danger of his life.”
Dickinson doesn’t just rely only on anecdotal evidence to gauge crew satisfaction.
“Several years ago we introduced a crew comment card,” he says. “We asked the crew to evaluate everything — from me to the captain to the cooperation shoreside, their immediate department heads, the quality of their cabins, the crew area, the gym, the lounge, crew food, the vision of the company — everything. We get an evaluation twice a year and we can tell immediately what the issues are and then we can address them. We’re getting a formalized feedback from the crew, very systematic, very easy to put metrics around it.”
With that information in hand, the company can take immediate action.
“If we have a change in chef on a particular ship, and all of a sudden there is a huge amount of pushback on the food, we find out what the problem is — too bland or too spicy, too this or too that — then we get it sorted out,” he says.
Contented employees can more easily dedicate themselves to delivering on the brand.
“We have a guest focus; it’s all focusing on hospitality,” Dickinson says. “Everybody can do their jobs, but to do it with a smile and to bring warmth into the vacation atmosphere is so much more desirable.”
The company also uses programs run by a local university to help its more than 30,000 employees based on shore and across its 21 ships to learn to work better together to make sure the actual guest experience matches the experience the brand is selling.
The company also watches trends in the vacation industry to make sure the brand stays associated with quality and doesn’t fall behind its competitors.
“For example, two years ago we introduced Carnival Comfort Bedding, taking a cue from what was happening in certain segments of the hotel industry —Westin Heavenly Beds and so on,” says Dickinson.
A good way to understand how well your brand is being delivered is to experience it like a consumer.
“When was the last time you bought your product, you went on your Web site, you went to your retail store — whatever it was — through the eyes of a consumer?” says Dickinson. “What is that consumer experience? How does it compare to your competitors’ experience?”
The experience for Carnival’s customers has been a good one, and its financial results reflect that. Carnival Cruise Lines is part of Carnival Corp., which owns several independently operated cruise lines.
The parent company posted revenue of more than $11 billion last year, up from $6.7 billion in 2003. The company does not break out revenue for individual cruise lines, although Carnival Cruise Lines, which carried 3.3 million passengers last year, is the largest single contributor to that figure.
And Dickinson will continue to make sure that the passengers who walk down the gangplank will do one thing on board — have fun.
“What makes our brand come to life is, when you go on a Carnival ship, everybody is having a good time,” Dickinson says. “This is not a reserved country club at sea. This is not an elitist vacation.
“People are enjoying themselves. People in their 80s will be dancing, where you wouldn’t catch them dancing on another ship.”
And you may just see Dickinson on the dance floor with them.
HOW TO REACH: Carnival Cruise Lines, www.carnival.com
Now imagine putting a package together for a group of 3,000 employees. It can become a complex undertaking.
“We work to find a plan or group of plans that will satisfy the multitude of employees,” says Anne Carney, president of Hilb Rogal & Hobbs in Tampa. “Whether the employees are young or old, married or single, we strive to be able to offer competitive, affordable choices to the employee groups.”
Smart Business talked with Carney about finding the right plans as well as sufficient funding to pay for those plans.
How do you find the right packages for the right employee group?
We work to find planned solutions for our employer groups as well as funding solutions, whether it is fully insured or self-funded or a hybrid in between, where there is some sharing of risk for the cost of the plan.
We also determine who is going to share in the cost of that contract.
How difficult is it to plan benefits for large workforces?
It’s not that difficult. There are a lot of similarities in people; people are all different, of course, but you’ve got single people with one type of needs, married people with another, single moms, single dads, families, etc. In a group, even if you have several thousand employees, you probably have five or six different combinations of types within that group. Demographics such as age, type of business, pay scale and location may change the actual composition of a group, but the basic needs of most employees are comparable.
In many cases, it comes down to not only what kind of coverage they need but what kind of costs as well. People need to be able to afford their health care.
A lot can depend on geographic location. What kind of networks are in a certain area and how far do the participants have to drive to get there? If a population is scattered without much opportunity for communication, maybe a streamlined HMO is best.
How does the whole process get started?
We start by looking at what kind of coverage the workforce has today and how it got to that point. Is it appropriate and is it working? Is it something that evolved from an existing plan that was appropriate four or five years ago? What is the corporate culture? What are the employers’ goals and concerns?
Writing, planning and establishing an appropriate program isn’t done in a vacuum from the overall business enterprise. We have to look at what the business needs and the business strategies are for the next several years: Where is it going?
We look at the overall business strategy and then try and plan for the next two to five years and try and figure out how to get from where the employer is to where it needs and wants to be.
It’s important to look at the funding mechanisms and ask some important questions. Is the current plan fully insured? Has the population grown? Is the benefit package competitive? Is this a time when self-funding may be an option? We look at all of these variables and then examine the variety of plans available and get proposals from all of the entities. Then we analyze which plans, rates and networks are the best fit for that particular employer.
If the plan is more consumer-based and encourages the employees to spend the health care dollars as if they are their own, then we may propose a Health Reimbursement Arrangement or a Health Savings Account.
The impetus for all plans is to make sure the participants understand the drivers of health care costs and how they’re using the plan. Are they going to the doctor for every sniffle or calling a nurse-line and getting their medication over the counter?
How important are wellness plans?
We try to promote wellness in people’s behavior. In most plans you’ll find that 20 percent of the participants drive 80 percent of the costs. If you can keep these people healthier now, then you can prevent them from having to go to the doctor two years down the road. The more we can encourage people to eat healthy and exercise, the better off our health care plans will be when it comes to keeping costs down.
ANNE CARNEY is president of Hilb Rogal & Hobbs in Tampa. Reach her at (813) 289-7996 or email@example.com.
“It’s pretty remarkable that 68 percent of Florida workers surveyed report confidence in their ability to find new jobs an increase of 11 percentage points over May,” he says. “But with fast job growth and the low unemployment rate we’re continuing to experience in Florida, it’s not surprising. Conversely, if you look at the overall U.S. workforce, 56 percent report confidence in their ability to find new jobs and that’s down by four points from May.”
Smart Business spoke with Wajda about the latest Florida workforce survey and how employees are feeling about their jobs.
How confident are Florida workers in the overall economy?
The number of Florida workers who believe the economy is getting stronger dropped to 13 percent in June nine percentage points below May’s level. Those who believe the economy is remaining the same rose by five points to 46 percent almost half. This tracks somewhat with overall U.S. numbers, which declined by four percentage points in June to 19 percent reporting confidence that the economy is strengthening and 38 percent believing that it is remaining the same.
Confidence in the overall economy is just one indicator we measure, however, and some of the other indicators have increased to offset this drop most notably workers’ confidence in their ability to find new jobs should they choose to do so.
How do Florida workers feel about job security?
Seventy-six percent of workers in Florida are confident in the security of their jobs, which compares closely to 78 percent of the overall U.S. workforce.
Another positive indicator is that the number of Florida workers who do not believe their jobs are secure declined by four percentage points, and those who don’t feel strongly one way or the other increased by 10 points to 18 percent. In other words, the shift is toward greater optimism. We’re seeing this in terms of worker confidence in their employers’ futures as well.
Why do you think employees feel more confident about their employers’ futures?
Again, that could point to strong job growth and an unemployment rate in Florida that is much lower than the national average. According to the Bureau of Labor Statistics’ most recent state data, the Florida unemployment rate was just 3.2 percent in May, as compared to 4.6 percent for the overall United States. That’s certainly a cause for confidence among the Florida workforce.
How do Florida employees feel about the availability of jobs, as compared to the overall U.S. workforce?
Florida workers are more optimistic than their U.S. counterparts by more than 10 percentage points. In Florida, three-quarters of workers (73 percent) believe that job availability is strong or stable, compared to 61 percent of the overall U.S. workforce.
Where does this data come from?
These results are based on our June 2006 survey of working adults in Florida, as summarized in the June Spherion Employment Report for Florida. The surveys are conducted by Harris Interactive on behalf of Spherion Corp. and are part of the Spherion Emerging Work Force Series of employment surveys. Harris Interactive is widely known for The Harris Poll, one of the longest-running independent opinion polls, and for pioneering online market research methods.
How should area businesses and Florida employers react to these results?
Our recent surveys indicate that worker confidence continues to rise, placing them in the driver’s seat when it comes to employers filling open positions.
With a greater demand to fill jobs than there is a supply of available workers, employees are gaining a better sense of their value in the tighter labor market. We’re seeing this in areas such as customer service and call centers as well as in requests for financial analysts.
In times like these, employers should be prepared to make some adjustments in compensation, benefits, and work environment if they want to attract and retain the best talent in the market.
STEVE WAJDA is a district director at Spherion Corp. Reach him at (813) 623-6399 or firstname.lastname@example.org.
Be a strong communicator.
Communication is probably the single most important thing in any business. If you do not do a good job of communication, then it’s not likely that the individuals within your firm will be speaking in one voice and acting in concert with each other.
You cannot ever, ever, ever underestimate, nor can you overdo, communication.
When I first came on as president of the firm, the first thing we did was go around and individually speak with every single shareholder in the firm and talk to them significantly and in depth an hour or two-hour conversation. That took a lot of time, but was the most important thing that I did because it led to an understanding of what they felt the strengths of the firm were, what they felt the challenges might be and their ideas of how you might move forward.
That turned out to be so successful that we now do that every year.
You’ve got to be really open-minded. The world is changing every day. You need to be open to suggestion and comment, doing things differently than they may have been done before.
Change is a very difficult thing. There are times when people are concerned about change, so you need to see the greater good. It’s a matter of making a case for change.
It’s very easy to become complacent in anything that you do because it’s comfortable. If we are not aware of what’s going on and addressing those issues and, in some cases, guiding that change, we will wake up in the morning and have no business.
It’s a matter of understanding the changes impacting our clients, and therefore, changes impacting us. We need to be leading that. We need to have a culture that accepts change, not as a bad thing but as an opportunity to grow.
Make concentrated efforts to help your customers.
I go and meet with our clients, even if I’m not doing the work for them. I spend time with their CEO, saying, ‘We really care about your business. We want to know what challenges you’re having. How can we help you? How do we do it the very best we can?’
They come up with wonderful suggestions, which we bring back to implement. We have industry groups, client service groups, all of which are focused on an individual area: What’s happening in the law? What’s happening in agencies and legislative actions and communities and government, and how does that affect our client? What could we propose to help?
Sometimes it’s doing seminars for them. Sometimes it’s just giving them a heads-up. Sometimes it’s just keeping them up to date with our weekly e-newsletters.
All of those things are focused on giving them information, giving them the opportunity to focus on things before it becomes a crisis. When our clients are successful, then we’re successful. Our whole focus is on our clients.
Without them we wouldn’t have a business. As they are satisfied with our effort, and as they grow and they prosper, so do we.
Get buy-in before, during and after a decision.
Make a determination of the direction, and make sure you have buy-in from those individuals that are going to be tasked with carrying out the implementation.
Always be very straightforward with those that you’re speaking with. Make your decisions based on a lot of input from people and information.
It gives us a diversity of input. It helps with the buy-in. You can make a goal for a company, but unless you have everybody agreeing that that goal applies to them, the implementation becomes very difficult.
Empower them by having buy-in to the vision, because then you’re going to ask them to be responsible for some part of the implementation.
Keep your employees around for the long-haul.
Hire extremely bright, confident, innovative, proactive people. Once you’ve done that, you just turn them loose and let them do their job.
As they’re coming in to a firm, you really inquire into their character and capability. They will prove themselves to you, and as they prove themselves to you, you give them more and more opportunity.
One is making sure you understand what each individual might want for their own individual career. People’s needs and desires are very different, and that’s something you should explore very early on when you’re hiring so you don’t get a mismatch.
Certainly mentoring is important. When a new lawyer comes in, we have a supervising shareholder, peer coaches, as well as these training programs, that are really intended to help them along the way when they hit an area where they may be unsure or have questions on how to proceed, but also to recognize what their strengths are and how they might best be utilized within the firm so they get the most satisfaction out of it, too, and the clients get the best service.
Take risks, but maintain focus.
The success of a firm has a lot to do with the willingness to be innovative and to be forward-thinking, and to be always focusing on solutions and opportunities. If you don’t do that, you only get what’s left.
Focus on your goals. Then every step you take, you go back to your base goals and say, ‘What is it that has led me here?’ And make your decisions based upon what those goals are. Does it fit into the scenario or not?
HOW TO REACH: Fowler White Boggs Banker, www.fowlerwhite.com