8751 W. Broward Blvd., Suite 506
Plantation, FL 33324
? Post diversity jobs
? Apply for diversity jobs
1201 Brickell Ave., Suite 630
Miami, FL 33131
? Business recruiting
? Recruits to meet business needs
Navigant Consulting Inc.
255 Alhambra Circle, Suite 810
Coral Gables, FL 33134
? Business consulting
? Helps access risk management, including employee issues
Allegis Group Services
7301 Parkway Drive
Hanover, MD 21076
? Work force management solutions
? Human capital consulting
Compliance Training Group
8132 Firestone Boulevard, Suite 862
Downey, CA 90241
? Trains to address differences in the workplace
? Recruiting for diversity
2001 Bryan St., Suite 3600
Dallas, TX 75201
? Business consulting
? Supply chain solutions
Concord Center, Building 1
1301 State Route 36, Suite 102
Hazlet, NJ 07730
? Talent management software
? Pre-hire and post-hire solutions
Novations Group Inc.
Brighton Landing West
10 Guest St., Suite 300
Boston, MA 02135
? Diversity consulting
? Teaches how to measure diversity success
PRISM International Inc.
First Sanford Tower
312 West First St., Suite 301
Sanford, FL 32771
? Consulting and training services
? Maximizes wealth of skills in work force
Today, many Americans are feeling nervous about opening the envelope containing their 401(k) or IRA statements. No matter what type of assets you hold in your 401(k) or IRA, more than likely they have fallen in value during the past year. That is why it is important to allocate your assets in a variety of investment types.
“Many people who were approaching retirement did not change their asset allocation and, as a result, the performance in their 401(k) plan was poor,” says Mark F. Rhein, senior vice president of The Private Bank at Fifth Third Bank, Tampa Bay. “They’re now questioning whether they’ll be able to retire or have to continue working.”
Smart Business learned more from Rhein about how asset allocation can lessen investors’ overall portfolio risk.
How does asset allocation help to mitigate investment risk?
Investing in broad groups, such as stocks, bonds, commodities and real estate investment trusts (REITs), may have lower risk than putting all funds in one asset type. Generally, one of these investment types is going up in value or holding its value, when others may be going down in value during a business cycle. That is the basis of diversification. Investors then trim gains and reinvest the proceeds periodically to take advantage of varying price moves for the long-term betterment of their portfolios.
What should investors remember in this environment?
We have heard from many clients saying they have lost sleep because of their 401(k) or IRA accounts. The assets to help them retire five, 10 or 20 years down the road are now worth substantially less. In an attempt to recoup some of the value of their assets, they reallocate often in reaction to the markets and hope for the best. However, that type of ‘trading on emotion’ is one of the most common mistakes individual investors can make during this time. Investors will try anything to stop the hemorrhaging in their 401(k) or IRA. Unfortunately, there is no quick fix in restoring confidence to financial markets, which has been eroding over the past two years. Patience is truly a virtue during a period of contraction.
They should be asking themselves, ‘What are my long-term goals and objectives? Are they still the same? If they are, what is happening with the market as it relates to its impact on my IRA and 401(k)? What does that mean in terms of how I should change my overall strategy?’ As people get closer to retirement, they should be looking at their asset allocation and reducing some of the risk.
What can investors do right now?
Now is the time to go back to the basics with your 401(k) or IRA account. Given the stress of the financial market, it is advisable to take another look at your overall financial plan and how your 401(k) or IRA fits in to it.
- Step back and look at your time horizon. When do you want to retire? With
your 401(k) or IRA losses, will you have
to add another three, four or five years to that horizon in order for your assets to
rise in value?
- Look at your risk tolerance. How
much are you willing to risk? If you are up
at night fretting about how much you have
invested, you are risking too much. Seek
to comfort yourself mentally by incrementally shifting your asset allocation.
- Look at your asset allocation ranges.
A conservative rule of thumb is to hold
your age in fixed-income securities. For
example, a 40-year-old should invest 60
percent in equities and 40 percent in fixed
income. Conversely, a 60-year-old should
invest 40 percent in equities and 60 percent in fixed income. This is only a general guideline; a different allocation may
better suit your specific situation.
- Have a deliberate rebalancing approach in mind. At Fifth Third Private Bank, we are finding most people are falling into two categories: trading just to trade or not trading at all. Seek to rebalance your portfolio on a semiannual or annual basis to instill discipline in your investment decisions and take advantage of the benefits of diversification.
What else should investors know?
Do not hesitate to ask for advice. A qualified financial planner/professional should give individual investors professional, unbiased assistance that will help them through business and investment cycles. We believe the next few years will likely see a reincarnation of the markets and the financial system, and a wealth management adviser should be able to help you make the most of it.
Once again, these financial times are extremely unique. Being deliberate and incremental in decisions involving asset allocation will help individual investors sleep a little easier during turbulent market conditions.
MARK F. RHEIN is senior vice president of The Private Bank at Fifth Third Bank, Tampa Bay. Reach him at (813) 306-2492 or firstname.lastname@example.org.
It’s not many bosses who dangle the possibility of an annual cruise in front of employees for a job well done, but that’s one way Dave Zillig ignites performance at DAZSER.
Zillig and Stephen Roesch — who founded DAZSER to operate JaniKing International Inc. franchises — have found it’s easier to motivate employees when there’s a bright light — or, in their case, a cruise ship — at the end of the tunnel. To keep the eyes of DAZSER’s 60 employees on the ball, the pair has devised a goal-setting and monitoring system with daily objectives.
“How do you define a good or bad month? It’s very hard to be objective about it,” says Zillig, who serves as president. “We wanted a more objective way about it.”
He attributes DAZSER’s growth to outlining a clear framework of objectives for employees to work with and closely monitoring the results. In 2008, the franchisor of the commercial cleaning company posted revenue of $40.8 million.
Smart Business spoke with Zillig about how to set and monitor goals.
Define a target. You have to have the end in sight. First, what do you want to accomplish, and then work backward.
Most business owners know what the target is. We knew what we wanted to accomplish each year, and we worked backward form that, what that would require in terms of activity levels. All of this can be regulated to formulas.
Take the target, the goal, and break it down to the lowest common denominator, down right to what’s going to have to be done on a daily basis to achieve that.
We’ll track each day as to how many proposals were delivered by each rep, how many quote calls were made, how many sales in terms of contracts and dollars.
If we don’t think it’s important enough to measure it, (the employees) are not going to think it’s important.
Get every employee involved. Whatever the goal is, everyone has to contribute to that result. It can’t just be sales. Whatever the target is, I think you’ve got to involve multiple departments; otherwise it just doesn’t achieve that sense of teamwork you’re trying to accomplish.
Sales, operations, regional manager, customer service — they all have measurable results that we can determine.
Everybody buys in because it’s very doable. It gives them a structure, a framework to work within that they know if they follow that plan, they’ll be successful.
Don’t set the bar too high. I’ve seen some team goals set that were sort of pie in the sky. I think they became demotivating because people hadn’t come anywhere close to achieving it in the past.
It becomes counterproductive because people just made a decision that it was not realistic. Realistic is everyone has to do their job.
Most people might think you take all of the individual goals and add them together and that’s a team goal. We look at it a little bit differently. Just take people’s quotas. Quotas are the minimum level of performance to keep your job.
There’s quotas, and there’s target. If we were using targets, we would probably be setting it too high because then what we’re saying is, we want every person to be a star in order to hit the team goal. But not everyone is going to be a star. I think that’s what makes it unreachable.
We just took the group goal and said, ‘Listen if everyone does their job … hits their quota, hits their objective, that’s what we used as a team goal. It doesn’t sound like we’re setting the bar too high, but what we took into consideration is there’s turnover — there are new employees that will take a while to ramp up.
By taking everyone’s individual quotas and working that through the numbers, that’s a healthy team goal because everyone did their job for the whole year.
Monitor your results closely to stay on target. We’re going to go back to what we used to do, which is getting back to more daily accountability and weekly. We have monthly reviews and monthly recaps, but you really can’t affect the month when you’re always looking back on it. Success happens in what you do each day.
We want our sales managers to have daily recaps with their salespeople. Brief, just talk about what transpired the previous day and what you have today and get back to more managing the results one day at a time rather than a month or a quarter looking back, which is always sort of retrospective, and it’s too late.
There’s a sense of urgency when you’re looking at what was accomplished each day. I think that carries through to the entire staff.
They have a daily recap that they’ll review with their sales manager. That feeds a weekly recap, the weekly recap is what the regional director will see and myself. Then the weeklies feed the monthly.
The monthly goes into our formal statistic book that comes out every month. It’s a comprehensive book of everything that happened in the office that month broken down to even how many calls each telemarketer made, how many appointments they set, how many proposals, how many appointments didn’t turn into proposals. Every aspect of our business we can dig deeper to find out what went right or wrong.
We share that with all the regional directors and they share that with their staff. Then we talk about what we’re going to accomplish the next month.
How to reach: DAZSER, (727) 797-7744 or www.dazser.com
The million-dollar question about making an investment in diversity is: Will it pay back?
While experts say diversity in the work force is a business imperative, defining diversity by employees’ physical attributes won’t foster a functional or profitable environment.
In fact, the definition of diversity is always evolving. Twenty years ago, the word spurred thoughts of gender issues since men held a high majority in the work force, while today the gender gap is narrowed and is less of a concern. Diversity’s definition has expanded, and diversity of thought, education, socioeconomics, religion and life goals are only a few of the seemingly endless list of terms people use when defining the term for themselves. These differences in your employees can make or break your business. If you foster an inclusive environment, where all employees can contribute thoughts and plans to improve your product or service in confidence, you will improve your bottom line.
A February 2009 Groundbreakers report by Ernst & Young defines diversity as an equation for success and notes that research has proven diverse groups outperform homogenous groups even in cases where the nondiverse groups have heightened abilities. Scott Page, a professor of complex systems at the University of Michigan at Ann Arbor, created the diversity prediction theorem, which says the collective ability of any crowd is equal to the average ability of its members plus the diversity of the group, claiming diversity is a sure way to attain a strategic advantage.
“Diversity is an important consideration when hiring new employees,” says Bahaudin G. Mujtaba, chair and associate professor of management, H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. “Managers should look for the best candidates first; try to create a team that brings diverse skills and characteristics as to complement the existing knowledge and abilities of the group in the department. Assess what the company already has and hire to fill gaps.”
Still, the return on investment is the hard evidence you want to justify devotion of time and money. Some say it’s difficult to quantify diversity ROI, but metrics are attainable. If you start with a plan that establishes your company goals and maps out a strategy, you can document the benefits and obstacles of a diverse team’s functionality that will best benefit your business.
Why it’s important
Since the country’s demographics are continually changing, a failure to branch out and move past your comfort zone when hiring and communicating with employees will ultimately result in financial punishment for the business.
“Consumers want someone they can communicate with,” says Rob Steward, vice president of sales, LatPro Inc. “LatPro.com is a niche job board for Hispanic and bilingual professionals — we post positions and network so employers and those seeking employment can connect. These types of sites are increasing because the population is changing in the U.S. Don’t stop recruiting even if there’s a hiring freeze. Gather a group of diverse candidates you’d like to employ — and be honest with them, noting your interest in connecting in the future.”
U.S. Census Bureau reports show Hispanics are the fastest-growing population, with an increase of 121 percent since 1999. The Asian population nearly doubled since 1990 and the African-American population is predicted to increase to 65.7 million strong by 2050, an increase of 15 percent since 2008.
“The demographics are changing,” says Amparo Bared, vice president of human resources and talent management at Ryder System Inc. “You need to play a key role in accountability and ownership and that means being flexible enough to have employees that can best serve your customers. Create deliberate initiatives and goals that support your strategy.”
Affinity networks — employer-recognized employee groups who share a common race, gender, national origin or sexual orientation — are a great way to attract and retain diverse employees. Networking by affinity groups reduces turnover and gives companies insights to consumers they otherwise may have never understood.
General Motors Corp.’s People with Disabilities Affinity Group has been a consistent resource for providing input and support relative to accessibility of products and services. The group played a role in helping OnStar develop the addition of TTY capability, the text telephone for the hearing impaired, for OnStar-equipped vehicles. Another example of diversity was witnessed in PepsiCo Inc.’s Hispanic professional organization called Adelante. Its Hispanic employee network provided insights that resulted in the development of the guacamole chip. In the first year of distribution, PepsiCo’s Frito-Lay division sold $100 million in Lay’s guacamole chips.
“If you have a Spanish-speaking customer base or want to reach a specific demographic, it would be smart to have staff that can effectively communicate with them,” Steward says. “With Web sites being used so frequently for daily business function, companies can do business anywhere they want. Having a diverse team will provide insights to reaching people around the globe. Age diversity is equally important. In an interview, you’re not allowed to ask a person’s age, but they’re gender and race are very apparent. Try not to allow age to have a negative impact on your decision because your customers are old and young.”
What you need to know
Diversity isn’t about being politically correct; it’s about keeping your business competitive.
“If you are playing catch up, you’re behind the eight ball,” Bared says. “You want to see diversity all of the way into your management ranks. Even if diversity isn’t a requirement or necessity, it’s good business sense. It will help your company grow by doing a better job.”
Keep in mind the customers who you want to attract and then investigate opportunities in markets in which you want to expand or improve business. If you’re interest is in attracting a broader customer base, employees should mirror the communities in which you want to expand. Forge relationships with diverse community organizations and let them know about opportunities in your organization. Sponsoring events that interest diverse groups makes your company more attractive to diverse candidates. For example, host events in coordination with Cinco de Mayo, Chinese New Year or Disability Awareness Month, and make your business’s diversity interests and job openings known.
If you’ve established affinity groups within your company, they can also help with recruiting. They may be able to give you suggestions that will help your business attract more diverse candidates and offer ideas of where to post positions.
Starting an affinity group is easy.
“Once you have a diverse team, you’ll want to utilize their skills,” Steward says. “Having affinity groups is the best way to encourage brainstorming among employees. You can provide employees with a specific project that you need help in reaching the customer. In an affinity group, employees may feel more relaxed to speak their ideas, too — then as a group, they can present the consensus on how to approach the issue, which makes employees feel they’ve helped their community and employer, while the company can potentially profit.”
Hiring managers also need to keep in mind how to motivate and manage their staff as part of a recruiting plan. Experts encourage incentives for staff contributions to a diverse work force, considering employees’ job satisfaction can be your best advertising.
“Diversity when managed effectively, can be beneficial for all industries in all departments,” Mujtaba says. “Diversity should be seen by customers and integrated behind the scenes for critical decisions regarding product manufacturing, marketing, expansions, strategies, recruitment and human resource development. If you don’t take advantage of the benefits of a competitive work force, your competitors will.”
Michael Perlman sees a lot of similarities between being a football coach and a CEO.
“I’ve always assumed a head football coach would probably make a great CEO because you have to get everybody fighting together toward the same common goal,” says Perlman, president and CEO at BrandsMart USA, a $1 billion electronics retailer with 2,500 employees. “If they are fighting each other, you have a problem.”
In football, it’s common for a strong offensive team to blame a porous defense for not holding a lead or for a stellar defense to get frustrated with a futile offense that can’t score any points. In the business world, the ideas of teamwork and camaraderie are just as essential to success.
Your job is to remind everyone that it takes all their contributions to make the company succeed and then prove it to them. The challenge is in establishing that proof and selling them on their value to the company.
Perlman looks to his leaders to convey the knowledge he has provided them to their direct reports. The process then continues on down the line until everyone has received it.
“If you do that, you wind up with an organization where everybody thinks alike,” Perlman says. “An organization of like-minded people will always win.”
It’s similar to the way that a veteran player on a football team will take a young rookie under his wing and show him the ropes.
It’s not that you’re looking to create a group of clones that are similar to you in every way. The intent is to encourage ingenuity while moving forward together toward a common goal.
“Like-minded people believe in the same goals, but aren’t necessarily structured by the same methods of getting there,” Perlman says.
Here’s how Perlman has developed a group of employees that can put their own unique skills to use toward the common goal of helping BrandsMart USA serve its customers.
Provide learning opportunities
The effort to teach employees has to start at the top. You need to take an active role in giving people chances to learn and coaching them to become more productive workers.
Perlman has found success by engaging employees in troubleshooting missions. He’ll assign a similar task to two or three individuals at different levels in the company and see how they handle it.
“I can tell an operations person and a store sales executive both to go out and build a table shopping the competition on what they are doing for delivery charges,” Perlman says.
“You get these different protocols back and then you figure out what’s the real right way of doing things. The key is you have to challenge people now and then and allow them to come back to you to ask questions when necessary.”
The idea is to get employees to open their minds about a specific issue and put their own skills and talents to use to find a solution rather than passively relying on your direction.
“If you take a 25-year-old and say, ‘Here’s your job and here’s how you do it,’ he gets bored,” Perlman says. “You take a 25-year-old guy and say, ‘Here’s your job and this is how we want the end result to look like. Why don’t you do it how you want to do it and then we’ll discuss if your way is better or worse than the normal way.’ If you challenge people, you can really drive creativity.”
Perlman says your ability to read people will help you be better able to tap into that creativity.
“If I come out with a new concept, I’ll say, ‘Does anybody have an opinion, good, bad or indifferent?’” Perlman says. “‘Does everybody agree with this? If you don’t agree, tell us what your issues are.’ If everybody is sitting there, giving you that blank stare, that’s not good. If they are sitting up in their seat and looking up at you, that’s a good thing. Reading people is very important and if you’re not good at it, start playing poker. Even if you lose a little money, you’ll make out in the long run.”
It’s through this constant communication that you will develop a fluid list of ideas to toss out to your people for consideration.
“They’ll tell you where the problems are and what the customers are saying,” Perlman says. “It can sometimes involve just asking people, ‘This is how we do this, this is how we’ve been doing it, what would you do differently?’”
When you get an answer that seems to make sense, listen to it.
“Most people tend to not listen to the people who they have assigned various tasks,” Perlman says. “The larger you get, the more you have to delegate. In turn, you then have to really listen to what your people tell you.”
Make employees feel valued
You hire employees to do a job and fill a role in making your organization work. In order for them to buy in to your leadership and give their all toward their work, you need to show them that you value their efforts through positive reinforcement.
“My experience is that 75 percent of all people need positive reinforcement every 90 days,” Perlman says. “Without that, their world crumbles.”
He likens it to being a parent who is trying to encourage a child.
“If you tell them to do their homework in September and you don’t come back again until November or December, you think they did their homework all the way through?” Perlman says. “Probably not.”
The lesson is that you need to constantly provide this reinforcement, whether it’s an e-mail, a pat on the back or a commendation at a company meeting. One of the best times to do it can be when business is a little slower.
“When business is very fast, you don’t have the time to work on those things,” Perlman says. “We’re doing something called the ‘wow factor’ now, which is where we want the store upper management to do something that is above and beyond for the customer every day. It could be anything. From the head store manager carrying a package out to a customer’s car in the rain to almost anything. We use e-mail and send them around talking about these wow factors. Then they compete with who has the best wow factor this week. When the store manager does it, the guy underneath him does it and that’s how that works.”
But showing value is more than just saying, “Good job.” It’s following through on commitments that they agreed to follow when you hired them.
Perlman recalled a young employee who had worked hard to earn a promotion and done everything he had to do to make it happen. The only thing left was Perlman’s authorization to make it official.
“He already had all the documentation on file,” Perlman says. “I was unable to do it the first day it came in. I went to do it the next day. He called me the next morning and said, ‘Why haven’t I been approved yet?’”
Perlman promptly took care of the authorization and the promotion went through. The lesson learned was just as he might need to give a little boost to employees to get things done, sometimes he needed a boost, too.
It’s the idea that everybody operates under the same set of rules that provides a level of comfort for employees to know what to expect.
“If you have a name-tag rule that everybody has to wear a name tag, certainly the top executive better be wearing a name tag,” Perlman says. “It can be simple things like where employees can park. We have a health care plan and the same plan for an hourly warehouse guy is the sam e plan that I’m on. There’s no unfair deals. I may get paid more than that person, but I don’t have a different 401(k) plan. I don’t have a different medical plan. If it’s good enough for you, it should be good enough for your people.”
Reinforce the fact that while some employees may work in different departments, you do all work for the same company. Getting to know their names is a good place to start.
“There was a time when I knew everybody in the company,” Perlman says. “I haven’t been there in years. But there’s a familiarity that you can develop with your people that’s important. Know as many people by first name as you can.”
Everybody would like to work at a company where nothing bad ever happens. Unfortunately, that’s just not realistic. Bad things do happen every day and problems arise and people have disagreements about how to deal with them.
As you work to bring everyone on track with your goals for the organization, you need to be sure you are creating an environment where employees can raise concerns and questions without fear of punishment.
“Let’s say I walk up to a guy in the warehouse and say, ‘How is this going,’” Perlman says. “‘Are we having any problems with a particular brand of big screens?’ He may look immediately toward his boss who is the warehouse supervisor, who may look to the guy who runs the warehouse who may look over to the store manager to see if he is getting anybody in trouble. But you still want that guy’s response.
“He’s scared of saying something that could get somebody else in trouble and, in turn, get himself in trouble. The reality is, you’re looking to put somebody at ease.”
The key is to not penalize people for raising concerns.
“The famous comment on that is the old production line that allowed anybody to stop it if they saw a problem,” Perlman says. “But if the guy did stop it, he got in trouble because it slowed down production. Here they go and they develop this great system that any one person can stop a line if there is a problem. On the other hand, the guy has to be absolutely positive he is right. Otherwise it could really affect the company’s productivity.”
You have to make it clear that someone who is raising a concern is not a bad guy and should not be viewed that way.
“Whenever I speak to people as a group, one of the things I’ll always say is, ‘Within the company, we may disagree with one another every once in awhile, but there are no bad guys in the company. The only bad guys I know are the competitors,’” Perlman says. “ Get everybody focused on the bad guys, which are the competitors. If you can get everybody thinking that we’re the good guys and they are the bad guys, that goes a long way toward getting that concept across.”
Today’s low mortgage rates and home prices have provided a silver lining to first-time homebuyers or those looking to refinance their current mortgage. While it may not be a good time for all (such as those who want to sell their home or those who do not have enough equity to qualify for a loan), these low rates are still providing substantial opportunities to homeowners.
“If you need a house and it’s your house for the next three, five, seven years, it’s a great time to be looking and getting yourself into home ownership,” says Carmen Inclan, residential lending division area sales manager, Fifth Third Bank, Tampa Bay.
Smart Business spoke with Inclan about how getting a mortgage loan has changed, why now is a good time to refinance your mortgage and what to do if you might already be in trouble with your mortgage.
How can new homeowners get a loan today, and has anything changed with the process?
All the complex, sophisticated types of mortgage financing that were around a few years ago during the real estate boom are not available today. The banks and agencies have placed restrictions to keep from falling back into some of the questionable lending practices that were rampant throughout the United States. Though the process has not changed, the criteria have been adjusted, and it is now more difficult to qualify for a mortgage loan. A few years ago, if you had good credit, you could get a loan with minimal paperwork. Today, we are back to the requirements that were in place in the early 1990s. A down payment, consistent income for a two-year period, and a good or excellent credit rating are required. Welcome back to traditional financing, where debt-to-income ratios have been lowered to 1990s levels.
Is this a good time for homeowners to refinance their mortgages?
This is a fantastic time to refinance a mortgage. Rates are at 40-year lows. I’ve seen rates hit these levels, but they didn’t last that long. If anyone can save at least 1 percent or more on his or her mortgage, this is definitely a time to discuss refinancing opportunities. Have your banker complete an analysis, discuss how long you plan to own your home and determine your housing objectives for the next several years.
What should people who are already in trouble with their mortgage do?
Troubled mortgage borrowers should call the bank where they send their mortgage payment, ask for the loss mitigation department and speak with a loss mitigation specialist to see if there are any hardship programs available to restructure their existing mortgage. It sounds easy to do, but it depends on what company owns the mortgage note, as not all mortgage servicers own the mortgage notes that they service. When making the call, know that the company may not necessarily have the decision-making ability to renegotiate your loan. The servicer must contact the mortgage note holder to determine if modification is an option. This is where a lot of people are slipping through the cracks. They are having a hard time reaching someone at a lending company who has the authority to discuss loan modifications. If homeowners are sending their payment to the same company that owns the note, they are going to have much more success finding someone to help them restructure their loan.
How long should we expect these low rates to last?
We will know in the next six months how much longer this cycle of price depreciation in housing is going to last. When Congress performs activities to stimulate the economy, it doesn’t happen from one day to the next; it takes time for those activities to take hold in the marketplace. Once the stimulus packages are executed by Washington, we should have a better idea of how far ahead the light at the end of the tunnel will be.
CARMEN INCLAN is residential lending division area sales manager, Fifth Third Bank, Tampa Bay. Reach her at (813) 306-2585 or email@example.com.
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Installs automated telephone systems
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Offers all business related training
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Provides consulting services for a variety of business needs
Sponsor webcasts and events
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Teaches best business practices
Hands on Technology Transfer Inc.
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IT training to improve customer service
Covers 60 skills areas
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Web-based customer service training and development
Leadership and management training
Tens of thousands of people belong to hundreds of private clubs in the state of Florida. Yet, few club members are aware of the fact that their rights and obligations as members are subject to change.
For some members, changes are understood as progress and improvement. For others, change can be disconcerting and can undermine their investment plans.
On the other hand, the club directors feel that modifying club bylaws and other governing documents is critical to a club’s survival and its ability to overcome adverse economic cycles and demographic changes.
“It is important for an applicant to a private club to understand that the privileges and obligations of membership are subject to change by a process that can itself be changed,” says Michael D. Katz, a shareholder with Katz Barron Squitero Faust.
Smart Business spoke with Katz about private clubs and the legal issues involved in their internal changes.
Do private club members have vested rights that protect against membership changes?
The concept of vested rights means that members have certain rights related to their club memberships that cannot be changed or taken away. There are few, if any, vested rights in most private clubs. This is because the documents that create the members’ rights can be amended. The courts have generally held that membership rights (and obligations) are subject to change as the governing documents themselves change. If the procedures for amending the governing documents are followed, the changes apply to both existing and new members.
What are the procedures for amendment of the bylaws and other club documents?
It depends on the requirements of each club’s documents. If the club was created as part of a residential community and if the developer is still active in that pursuit with a retained board presence, the right to amend will often repose solely with the board of directors and may require a super-majority vote, which allows the developer to block the amendment as a defensive matter. Super-majority voting may be limited to matters that could negatively impact construction or sales, but more often it is not, at least until the development is sold out.
In club communities where the developer has exited, most amendments will require approval by the board of directors. Others may require approval by the members, such as those modifying limiting provisions of club documents concerning the imposition of capital assessments. Super-majority votes may be required at the board level, the membership level, or both, on key matters such as sale of the club property. In cases where clubs suffer financial distress or, over time, find their real estate to be in great demand for redevelopment, clubs have lawfully sold excess land, golf courses and other amenity parcels for redevelopment.
What kinds of changes can be made to the club documents?
There is no limit on the changes that can be made. While most clubs take pride in preserving their character, they also recognize the need to adapt to what their members want and the economic model required to achieve it. Clubs are inevitably in competition with one another and may need to evolve their membership structures to attract and retain the most desired members.
Bylaw changes can involve minor procedural matters or the members’ substantive interests. For example, a club can change the terms of admission or resignation. The classes of membership and privileges appurtenant to each class may also be changed by amendment. Bylaw changes may alter voting rights and the ways and means of imposing capital and operating assessments.
Incidentally, condominium and homeowners’ associations have the same latitude to change their governing documents. For example, Florida courts have upheld amendments that restrict or prohibit owners from leasing their units on a ‘rule of reason’ analysis. The amendments are binding on existing owners who are leasing their property as well as on new owners. The ‘vested rights’ assertion has been rejected in those cases.
What if there is a disagreement over the meanings of the club documents?
Florida courts grant very broad authority and discretion to the board of directors of a private club to determine if a governing document is ambiguous and, if it is, to determine its meaning. Generally, as long as the interpretation is not patently arbitrary or unreasonable, the courts will not interfere.
The courts have also declared themselves hands off where disciplinary processes are concerned. The club itself is the sole judge of what conduct warrants sanction, which can take the form of monetary fines, suspension or even expulsion. As long as there is notice and an opportunity to be heard, and any other requirements of the club documents are observed, the outcome of the disciplinary process is not subject to review by the courts. Mention should be made that the opportunity to be heard is not necessarily the equivalent of a ‘hearing,’ and that club policy may not allow a member the right to be represented by counsel, nor do rules of evidence or civil procedure apply.
Also, it is important to understand the relationship of real estate ownership in a private club community to the club itself, as well as any master community association. Such communities provide unique amenities and wonderful lifestyle experiences, but come with the risk — and often the necessity — of future change.
MICHAEL D. KATZ is a shareholder with Katz Barron Squitero Faust. Reach him at MDK@katzbarron.com.
Mohammad Abu-Ghazaleh had a tough story to sell. At the time that Abu-Ghazaleh led his company to the purchase of Fresh Del Monte Produce Inc. in 1996, the producer, marketer and distributor of fresh and fresh-cut produce had reaped some rotten returns. Not only did the purchase come with the assumption of $300 million in bad debt, but it also came with a criminal record — or, rather, two criminal records. First, the company, which had been a part of the Polly Peck International family, fell on hard times when that company’s chairman, Asil Nadir, fled as it folded under financial pressures. In the fallout, Fresh Del Monte was taken over by Carlos Cabal, a Mexican businessman with his hand in banking, hotels and insurance. Within two years, Cabal became a fugitive of the Mexican government, accused of embezzling $700 million from his own banks. To this day, charges hang over the heads of both men. Meanwhile, Abu-Ghazaleh was left with an internal and external mess.
“The company was like a ship without a captain in the middle of the ocean, and it was really a miracle the company had gone through these two dramatic episodes and was still floating,” Abu-Ghazaleh says.
And then, it’s only natural that everybody was a little suspicious of Abu-Ghazaleh, the company’s chairman and CEO, when he started to tell the story about how the company was planting seeds for brighter days.
But Abu-Ghazaleh, the son of a famed fruit importer and businessman, believed that if he could restore faith both internally and externally he could turn the company around. The story wouldn’t sell overnight, and maybe some people would never believe it, but he began healing the company one day at a time.
First, he established a new relationship between management and employees and external people by setting a new tone for ethical behavior and keeping promises. As he began to establish that credibility, he improved on it internally by taking his tale on the road, visiting all of Fresh Del Monte’s locations after doing his homework to understand where the company was headed.
Here’s what he learned along the way.
Set the example
Abu-Ghazaleh doesn’t have to think long about where the financial troubles that plagued many of the nation’s former powerhouse companies in late-2008 stemmed from. His own experience with Fresh Del Monte taught him how important leadership integrity is to long-term success.
“The whole thing transcends from the top down,” he says. “We see it now in the market today, this whole turmoil with many of the financial companies and other companies in things like the insurance industry. The problem is actually management and leadership, in my opinion. It’s greed in one aspect, it’s self-interest, it’s short-term vision, so many factors play into this.”
Abu-Ghazaleh had that in mind when he began digging Fresh Del Monte out from scandal. The basic first step you can take when people — be they internal or external — are having trouble trusting a company’s management has to do with reining in your promises. It’s easy to set high expectations and tell investors, employees and your customers that you are going to do several great things. It’s much harder to live up to that. Since he first took over, Abu-Ghazaleh has been obsessed with keeping his promises. Rather than promising people a full turnaround of the troubled company, he first promised that the faith of investors and employees would be rewarded with steady growth. While he could have promised an immediate turnaround to bring money to the company and fire up employees, he knows that would mean nothing two years down the road if the company didn’t follow through.
“If you go back to all of our statements and my conference calls over the last 12 years or so, you will see we have been very clear in our message,” he says. “I was always saying that I will never try to drive the stock myself through wishful thinking and through ambiguous maneuvers or misstatements. For me, with all due respect to all the analysts, the investors, to everybody, I will not do something just to please the analyst or investor by saying or doing things that will be counterproductive or not in the interest of the shareholders. If you can start with that, you’ll always be successful at the end of the day.”
Beyond being careful about people’s expectations, Abu-Ghazaleh believes you can be the internal motivation for your company by simply knocking out the idea that the boss is out of touch with reality. Television bosses always show senior executives as detached people who come down from corporate to dictate orders before going golfing. It’s a stereotype, but you may be helping to feed it. Remember that everyone is watching you, so if you just told someone to cut expenses, you better have your own expenses listed as No. 1-A on a public audit list.
“It’s the way you act, the way you behave, I mean your day-to-day transaction of business and how you conduct yourself, how you conduct your business,” he says. “You cannot tell people, ‘Save money, don’t waste, don’t do that,’ if you are not an example of this. This is just one thing. You cannot tell people to work hard, and they see you taking vacations throughout the year on the beach and different places in the world — you have to be an example. And you cannot tell them to be honest when you are trying unlawful things or doing things that are not ethical.”
And Abu-Ghazaleh says his rules are there for businesses of every size. Big or small, you have to know that everything you do is documented by your employees and weighed against what you ask them to do.
“These are simple basic examples of conducting business or even a lifestyle,” he says. “It’s simple. I believe that regardless of how big, be it $10 billion or $50 billion or $1 billion or a $100 million operation, it’s just translates to the same way of conducting the business.”
Expand your credibility
Building credibility begins with basic trust, but if you want to dig out of a hole like the one Abu-Ghazaleh was facing, you also need to make a personal impact with every level of your company.
“I personally don’t have any problem meeting with the high-level executives as well as the middle-level management as well as the people in the field, which I do regularly,” he says. “I have to have these relationships with the top people in the business as well as in the field. An employee has to see your face and know that you exist. You have to transmit confidence; this gives them a kind of association or identification. They identify with this company, they feel they are part of this company, we are one team, and there’s not a big boss sitting at the top not even close to the people in the field. These are very important issues that one has to take in to consideration.”
The first part is taking the time to regularly be in front of your people. If you have two locations, you can obviously do more of this than if you have 200, but the point is you have to make the visits and meet with every level of employee.
“I do make visits every year, at least once, to visit these operations, and I meet with the people in the back office or the field and do have dialogue with them and look at the operation in the field,” Abu-Ghazaleh says.
Each visit isn’t just shaking hands. Restoring employee faith in leadership means that you have to show employees that you know your stuff. Abu-Ghazaleh makes sure he has real conversations with people about what their group is doing and how it measures up with similar groups in the company. Creating that type of conversation comes from doing your homework ahead of time. Abu-Ghazaleh has each of his centers send a weekly report on where production is, how that meets with its goals and what problems, if any, have slowed production. You don’t have to get every detail of every day’s work, he says, but you have to have a basis for where that group is headed.
“If there is a problem today, we have to correct it by tomorrow,” he says. “Our business cannot wait six months. We are in a business where everything is perishable, and you have to make decisions on a daily basis.
“I’m not just reading reports. From my background, which is in agriculture and farming, I do know more or less the obstacles, the challenges and the solutions that can be found for our operation, and that helps. When you know the business, it’s easier to speak with people.”
Abu-Ghazaleh says the more you can make these types of visits, the more you’ll have to take to the next meeting. In fact, if you can have these engaging conversations with employees, you will build up a knowledge that creates a benefit for both ends.
“It’s a mutual benefit,” he says. “It’s not only that (employees) take something from me or from the COO, which we are often on these trips together, but we learn from them. We learn that if we see something wrong we can rectify it immediately, and the only way you can really learn if the business is going right is by being on the spot, by being in the field. And when I say field, it doesn’t mean you have to be at a farm, it means you have to be at a distribution center or a factory. When you are there, with the knowledge one builds, you can even read behind the lines, you can tell if things are right and if something is not right.”
But if you’re looking to turn a company around, you can’t just go through this process once. You have to stay on top of each unit’s reports and continue to make visits. Building up confidence in the short term will quickly be forgotten if employees no longer have a touch point with you the instant the company starts to improve.
“You are not coming every six months to look at this report, you are reading it every week, and you are watching the macro environment,” Abu-Ghazaleh says. “You have to be aware of what’s going on around the world, what’s going on with the raw materials, fuel, so many factors, and you have to put this picture all together ... so it takes time, it takes effort, but if that’s what it needs, then that’s what you have to put in.”
It’s been more than a decade since Abu- Ghazaleh took on the challenge of changing Fresh Del Monte’s story. But from a company with $300 million in bad debt, Fresh Del Monte has been able to see solid fruits to its labor, pushing beyond $3.36 billion in sales in 2007, along with $179.8 million in net income. To Abu-Ghazaleh, a majority of the company’s resurgence is about rekindled faith in management.
“I think at least 50 percent comes from that because all the players adapt to that kind of mold and you have to build respect between the top management and the middle management and the lower management,” he says. “Big company, small company, middle-size company, news spreads around very quickly. If there is something wrong, it spreads even faster. So it’s very important the image and the attitude you portray to people at the end of the day. In one word, ethics in everything in life, that is the most important thing.”
HOW TO REACH: Fresh Del Monte Produce Inc., (800) 950-3683 or www.freshdelmonte.com
If you’re looking at your budget and considering cutting back on support for customer service, you might want to reconsider. About 96 percent of unhappy customers don’t take the initiative to tell you they’re unhappy with your service, but they will tell nine other people and not return.
Customer service should be as important to you as it is to your customer, and customer service is second in importance only to product quality when it comes to satisfying customers.
The difference in today’s market is that brand loyalty isn’t what it used to be. Businesses are making a new promise every day without credible reasons for the consumer to believe the promise. Customers make purchases because they believe you’re selling something they need, but they also know they have many options. A single bad experience with you can result in your customers making purchases from the vendor down the street next week. The products may be similar but the quality of your customer service can be why they prefer to make purchases with you.
“The quality of your customer’s experience is one of the most important sustainable advantages a company can have, particularly in a competitive environment,” says Andy Bodea, senior vice president of global operations, Equifax Inc. “Senior leadership must be behind the initiative in order to provide the right tools and all elements of providing customer service need to be adopted throughout the company for it to work well. It’s OK to admit that you’re not perfect with customer service, but you should have an execution focus on how to make it happen.”
If customers have a good experience with your business, they’re more likely to return and spend money again. Positive word-of-mouth is one of the cheapest and most effective means of growing your business. It’s also much less expensive to retain a customer you already have than to attract new ones.
“Customer service overall is mediocre and inconsistent,” says Adolfo Perez, vice president of worldwide reservations, Carnival Cruise Lines. “One day you may have an incredible experience when dealing with a company, and the next time, you have an issue [and] the experience causes a headache and heartburn. You wonder how those very different people could be working for the same company. The work force has changed over the past few decades. Things an employee might say to a customer or even a supervisor today would never have occurred 20 years ago. It seems that there is an overall lack of respect in the work force, but this can be harnessed with the right mix of salary and environment.”
Customer service in today’s market entails doing business where and when your customers want. The trick is to cut costs while being flexible with your ways of improving customer service quality across all avenues, including online and by phone.
There’s an easy formula for this, yet it’s not utilized. It starts with paying better wages. Then you have to invest in your employees’ ability to perform through education and train them to respond to customer needs.
Why a customer service program is important
Your customer service representatives have unlimited access to your customers, products and equipment, yet they’re largely considered dispensable and are often treated as such. This is the wrong approach. You can’t personally know who your regular customers are or what their preferences entail, but your employees do, so it’s important to retain them. Investing in customer training and rewarding them with a pay increase upon completion of the course or offering another benefit, such as time off, makes for a more enthusiastic employee.
“Salary increase isn’t the main motivator for employees,” says Jason Few, senior vice president of smart energy and residential for Reliant Energy. “The most impactful incentive is having an ability to move forward in the company. Survey your employees in the same fashion in which you survey customers to get a snapshot of their satisfaction level and make changes where necessary to improve their job satisfaction.”
Although many customer service positions are considered entry level, giving the employee the option to advance within the company will be an incentive for the employee to stay and can help you reduce employee turnover, which on average costs businesses 20 percent of an employee’s annual salary to replace that person.
“If you have different levels of customer care positions in your business, those who are working at the lowest level get bored easily because their job entails performing simple tasks,” Bodea says. “These positions are typically filled by the newest hires and have a 20 to 60 percent turnover rate. The next tier requires more knowledge and has a lower turnover rate. The third tier is considered specialists that have special knowledge of the company’s workings. This position has less than 5 percent turnover.
“If the workers are interested in advancing and given the opportunity, they will make the best employees because they’ll have gathered the most information on your business and your customers. These employees are very valuable and may not be with the company if not provided the opportunity to advance.”
When you are looking at data, make sure you are getting the whole picture.
“When you are considered a provider, you must maintain communication while meeting and exceeding expectations,” says Robert Smith, senior vice president of marketing and membership, American Management Association, a professional development firm. “You must always take into consideration that your actions are being done profitably, but when speed is the only measure you are looking at when analyzing an employee’s performance in solving a customer’s problem, you’re looking at the situation wrong.
“If an employee gets off the phone with a customer in three minutes but hasn’t answered all of his or her questions, good customer service wasn’t performed. The customer may have to call back or decide not to use your services again. Another error is customer service representatives asking the customer if there’s anything else they can help them with. For the most part, the employee should be able to provide the customer, without him or her asking, everything they can offer them to resolve the issue. What do you train your employees to say if a customer asks, ‘I don’t know, what else can you do?’”
You may see investing in customer service training as a luxury in today’s economy, but experts warn that not doing so could lead to your company’s demise.
What you can do
The biggest error you can make is getting too caught up in cutting costs and other internal workings to see your business from the customer’s point of view. Customer service is what keeps the lifeblood of your business customers coming back. Even when inevitable mistakes are made, customers return if the error is handled properly.
“Make it easy to do business with your company,” Perez says. “Layers upon layers of rules, multiple layers of escalation, poorly trained and unempowered employees make for a poor customer service experience and negatively affect your sales. Simplify your business process and obsessively train your staff upon hire and on a reoccurring basis. Empowered employees can handle customer’s issues directly. You don’t have to give up all the control, but it’s better to trust your employees, than manage exceptions.”
Another mistake is investing money in loyalty programs focusing on drawing in new customers, while losing focus on appeasing your current customers. If you don’t ask customers about their experience with your business, they’ll likely not tell you but they will go home and tell others. If you stay flexible and listen to what they say by acting on their feedback, you can best design a customer service program that works for you.
“If you get to know your customers like Amazon does, for example, you’ll be able to make suggestions to them on purchases based on their past experience with you,” Smith says. “Customer service has improved dramatically over the years in the sense that businesses have a better idea of how to understand their customers and the competition to win their loyalty, [which] makes it an essential business practice.”
What many companies don’t understand is that good customer service is rare. If you already have brand recognition, you can further your competitive advantage by listening to customers’ concerns and acting on them. You need to define what good customer service means to your specific set of customers before you can best meet their expectations. This can be achieved by polling them in a variety of ways comment cards, e-mail or an online form.
Even with well-trained employees and a list of customer recommendations, you still need your managers to be an integral part of your program. They should point out positive behavior and not just the negatives. Successes should be noted to encourage employees to do more than the bare minimum, and negative incidents should be handled immediately instead of waiting for an evaluation.
“Employees may repeat a behavior they’re not aware is undesirable,” says Liz Tahir, an international marketing consultant and speaker. “Having the proper communication with employees is essential. If you treat them well on a regular basis, they won’t react negatively when a manager points out an area that needs improvement.
“Employees treat customers the way you treat them. Ask yourself if you greet employees enthusiastically, interact politely and try to accommodate them in their requests.”
Making sure employees have the correct set of tools to perform their jobs is another important step in ensuring good customer service. Proper training and empowering employees to handle customers’ concerns or problems will build employee confidence while expediting the customers’ requests.
“Always putting yourself in the customer’s shoes when determining how to best resolve issues or respond to a request is the best way to resolve issues,” Tahir says. “All of the great companies have incorporated customer service in their core business philosophy, helping to brand their business as one known for great customer service.”