A few years back, a friend who runs a large hotel chain asked
Gordon “Butch” Stewart if he could help evaluate the problems
plaguing the franchise.
Stewart, founder and chairman of Sandals Resorts and Beaches
Resorts, took a tour of one of the hotels and sat in on some meetings. He immediately noticed a big gap in the little day-to-day
details that were slowing the hotel down, such as front-desk service, and the high-end conversation the executives were having.
“When we went, I saw what the problems were, and I didn’t really want to stick my nose in,” Stewart says. “But I was a little befuddled at how simple the problems were and how complex their discussion was. Eventually, I pulled my friend aside and said, ‘Why
not pull back and think about this in terms of simple fixes that cost
a lot less? What you’re trying to do is a lot cheaper than what you
think.’ I guess there’s merit in the saying, ‘Keep it simple.’”
Keeping strategy simple drives continued growth at Sandals and
Beaches, the all-inclusive Caribbean resort juggernauts, along with
their worldwide representative arm, Unique Vacations Inc., based
in Miami. With more and more vacation spots popping up, Stewart
doesn’t want to catch himself in the clouds overanalyzing problems. His success has been in the all-inclusive business, and it has
been based on a tireless focus on hospitality and improvement.
His driving force is to get that right, down to every little detail.
From his first hotel unit in 1981 to the 16 resorts and more than
8,500 employees he oversees today, Stewart focuses on getting the
basics right. He continues to move forward, with a concentration
on beating the competition by growing a company that’s well
ahead of the market. With that meticulous attention to the little
things shaping everything from how he makes improvements to
how he paces growth, Stewart has built a vacation empire.
Focus on the details
To Stewart, paying attention to often-overlooked daily details is
the easiest path to successful growth. You can have the best business plan in the world, but he knows that if you don’t keep a close
eye on the day-to-day operations, then there is room for fatal error.
Sometimes that means admitting to mistakes and starting over,
rather than trying to make something work just to grow.
“Compromise, I think, is the thing that hurts the most,” Stewart
says. “I’ve broken down concrete many times that turned out differently than we thought or planned it would be. I’ve sold beds as
soon as I can get replacements because they weren’t as good as we
wanted them to be. We’ve closed restaurants that are not performing. That list goes on forever. If something comes out wrong
or isn’t working, stripping it down to the carpet isn’t the worst
“If something is wrong, it’s wrong. You can go a lot further by fixing it early than not paying attention to it.”
While Stewart believes that growing in an industry is simple if
you really focus on the little details, he says there has to be a constant mindset to that attention to detail.
“If you’re going to be successful at any industry, then there has to
be a thought process where literally every moment of your life you
have to be thinking of things that you can improve upon,” says
Stewart. “It is true that people are going to recommend your product. To be happy enough to do that, you need to impress.”
That attention to detail can’t just be in projects, according to
Stewart. It has to be a company culture that runs from top to bottom. That enthusiasm for hospitality drives Sandals and Beaches,
and Stewart says that pushing that core philosophy is the key to
bringing in new people. If you don’t understand that hospitality is
job No. 1, then you don’t get in the door.
“We don’t announce the vision on a daily basis,” he says. “But we
know where we are going, and people around you know because
they see you living it. If you’re very strong with your fundamentals
and show that every day, then people know what’s happening and
see if they can fit in.”
And, in the same matter-of-fact manner that Stewart will rip
down a building and start over, he says that you have to be clear-cut with employees who don’t match the culture, instead of trying
to force a fit.
“Again, if it’s a mistake, level with the employee,” Stewart says.
“Tell them, ‘You’re in the wrong business. Now, you might be a
good scientist, but you don’t do a good job of making people
Your people, after all, are a big part of your brand. And, to
Stewart, paying close attention to that brand internally is essential.
“In the same way that you would protect your brand if somebody
is doing something to try to injure it, the biggest injury is likely to
come from your own internal, weak operation,” says Stewart. “If
you look at the whole spectrum, on one hand, you might have
some people out there that would like to do damage to your
brand. So you’re going to protect it, but really and truly, you can do
more harm to yourself than anyone else at the end of the day, so
you have to make sure you and your people are performing.”
Make it better
An eye for the daily details isn’t enough. Stewart says you have
to grow with that meticulous nature and drive to do better.
“We have never wanted to be No. 2, and we need to look over
our shoulder,” Stewart says. “We don’t spend our time copying or
imitating, we bring out product after product that, in three years
time, the rest of the gang catches up to in their own way.”
Sandals and Beaches continue to reinvent the brand, re-evaluating what the customer wants in luxury accommodations. Instead
of settling for something that hasn’t failed you, Stewart says you
have to be looking for something that will really catch the attention of the customer.
That push for innovation has led to a list of firsts in the resort
world. Sandals was the first Caribbean resort to use Jacuzzis, the
first to offer satellite TV and the first to use swim-up pool bars.
All of them have since become commonplace, so Stewart wants
to keep pushing the envelope to stay ahead of the curve.
“That’s a natural tendency,” Stewart says of making improvements. “You finish something and it’s better than the one you did
before, so there’s an excitement to do something better than that.”
Similarly, Stewart has no problem spending money to grow out
a resort that’s already successful.
In August 2005, for example, Beaches Turks & Caicos Resort &
Spa underwent a $100 million expansion to create the Italian
Seaside Village. The resort was doing well; however, the expansion
added not just 168 rooms but also included a water park and playground to improve on the family atmosphere.
“I think we have a formula, a way that we do things to ensure our
success,” Stewart says. “We have had so many situations that we
have rooms in a place or a product or buildings that really could grow into something more, and we are inclined to do that work to
update it and make it better for our customer.”
And that philosophy can be pushed to your staff. Sandals and
Beaches constantly update standards and use technology to measure performance. It’s not enough for Stewart to push a culture
where the little details are the focus, but he also wants to ensure
that it’s being done by looking at the measurables.
“We have put more accountability into standards in the last seven
or eight months than we’ve done in the last 10 years,” says Stewart.
“We use technology that generally rates the standards, and it breaks
down all the different standards of the hotels from the cleanliness to
restaurants. We measure every detail we can, from rooms to swimming pools, staff, it rates service, and it breaks that down in every
part of the hotel.”
Know your market
Stewart believes that there is no ceiling to a blossoming company’s growth potential, unless you are going in the wrong direction.
“Our limitations really are to the extent that we can replicate this
culture and keep our people excited and have guests satisfied with
our performance,” says Stewart. “If you find that you’re falling
down, then it’s time to haul back and take a pulse.”
That means you have to keep track of your core priorities when it
comes time to grow. Stewart is very clear on the fact that Sandals is
a luxury brand thriving in a niche market. To grow, he knows that he
can’t get too far from the path that made him successful.
“There are a lot of people building hotels right now. And we have
no intention of getting into the big 1,000-room hotels,” he says.
“That’s not where we are going. We are going with a unique and
diversified product. We are focused on our own independent standards and enormous luxury; we’re better at paying attention to
details like the matter in which a room is furnished.”
Keeping the market in mind, you can still take risks, but they
have to come in the proper context of what your company can do.
Sandals, the original brand, is a resort experience meant only for
couples. But Stewart realized that while the couples experience
was popular, there was a whole segment of the market that was
being shut out. That’s when Beaches was created for families, singles and couples. The attention to detail was not lost on the new
brand, but the focus of that attention shifted. Instead of focusing
on something like a romantic waterfall view for a room, Beaches
concentrated on the family element and built resorts with video-game areas for kids.
The move was a risk, but Stewart balanced it with knowledge
about his customer base. Sandals already had a solid return rate
for its guests, and there was feedback from happy customers that
there was room for more. The results of that effort have checked
in with success: Sandals and Beaches currently boast a customer
return rate of 40 percent.
“It started off in a manner where I have so much return in guests,
and a lot of them said to me, ‘Butch, I’ve been here 11 times. I have
a mother that is single, I’d like to be able to come back, but I’d like
to be able to bring her or bring the kids,”’ Stewart says.
That doesn’t mean that Beaches came into existence without taking some lumps, of course. But by keeping on a similar track and
incorporating feedback, Stewart grew out Beaches ahead of the
competition and with the same mentality he shared with that big
hotel chain, he wanted all the little details to be right every step of
the way — without compromise.
“We have our ups and downs trying to stretch out,” Stewart says.
“But what’s important is that you are willing to react to what people are telling you and admit when you make mistakes.”
Although he runs a network of community banks, Ernie Pinner says his company isn’t driving a Model T through a small town. In fact, he says it’s more like driving a very modern car through a small town. Pinner, chairman, president and CEO of CenterState Banks of Florida Inc., says the company’s goal is to give customers the satisfaction that comes from personal touches from a small-town bank. There’s nothing small about the 330-employee company’s growth, however. CenterState posted 2004 revenue of $36 million, 2005 revenue of $46 million and 2006 revenue of $65 million.
Smart Business spoke with Pinner about why you should treat your customers like they are your grandmother.
Be honest. Whether you’re in the banking business or selling shoes, reputation is important. The product I sell is money, and everybody deals with money. My money is the same color as anybody else’s, so it comes in the form of the way I deliver the service.
It’s a very focused push on integrity and honesty, dealt with a huge dose of humility. We tell people all the time, you can lie once, but that’s it. If you’re dishonest twice, you just can’t work in this business.
People are honest by nature, but you have to encourage that honesty to be visible. It’s just doing what’s right. It seems too simple, but we live in a world where somebody takes advantage, or you charge a little extra because you can get away with it, or you cut back on service because it’s not needed.
Treat customers like they’re your grandmother. You don’t ever lie to grandma, and you do what she says, how she wants it, and you do it with a great deal of enthusiasm. You do that, and the honor and integrity will show itself.
Get out of the way. My talent is attracting talent. Everybody who works for me is smarter than me. This whole company is based on pushing responsibility to the lowest level. It’s a decentralized banking operation, so each bank stands on its own. The local bank management runs the bank. My job is basically just to keep their powder dry.
They do all the work, they deserve all the recognition. If there’s an obstacle in their way, it’s my job to get it moved. And if they call for help, I come running. Other than that, I stay out of their way.
Don’t make it your way or the highway. Your employees won’t always do it right, they won’t always do it the way you want it done. But if they get to the end result and the customer’s happy, then let them do it their way.
That’s part of our culture push responsibility down to the lowest level. I may process your loan different than my buddy two doors down or the next town over, but as long as it’s being done in a manner that’s honest and the customer is happy, we don’t have to be alike.
Sometimes a CEO will delegate but then start telling them how to do it. You empower people, you give them the authority, you delegate, and you get out of their way. I have a tendency to want to get involved, and that won’t work.
Toss your employees in the deep end of the pool. You have to put people to the test before they’re ready. A lot of times we say, ‘Well, they’re not quite ready, they need more training, it’s a little bit over their heads.’ Put them out there.
Generally, people will learn in a crisis a lot faster than they will when it’s on automatic pilot. If you put me in charge and I’m over my head, I’m going to work a lot harder than if you put me in charge and it’s easy.
You empower people sooner than even you think they’re ready. Now, stand ready to bail them out, but get out of their way and let them flounder a little bit. In this business, until you’ve made a few bad loans, you’re not really a good lender. You don’t shoot somebody because they made a bad loan. It’s part of the experience.
So delegate and get out of the way, and delegate sooner than what you think is necessarily right.
Keep your culture fun. The greatest challenge is to keep young people coming into this business and to keep them motivated and enthused to keep it growing.
If we hire an employee from one of our competitors, the culture here is refreshing [for them]. We’re not Southwest Airlines, but I do buy in to that concept that if we’re not having fun, we are not doing our jobs.
There’s not a policy manual for that; it’s more of a culture, that over a number of years, the core of our team has developed. You pass it down in a traditional manner.
Grandma always cut the last two inches of ham off before she put it in the pan, and now mama did it, and now my sister does it, and now my sister is teaching my nephew and niece how to do it. So now four generations are cutting the end off this ham, and they don’t know why it was just passed down that way.
The culture that’s here, the core of us have acquired over a number of years. It permeates the space. You either adjust to this culture real quick, or you leave. It’s not a question of us running you off, it’s a question of, is this something you would like to do?
Encourage hard work. Many of today’s bankers, being in the age group of 45 to 60, they got in this business and learned it through a generation of hard work. We’ve lost some of that. It’s important that hard work whether it’s on the end of a hoe handle or whether it’s pushing a pencil should be honored and should be expected and even demanded.
If I go to work for you, I’m going to give you 40 hours without question. I want to walk out of there with you thinking you owe me for 45, even if I only worked 40. It’s important to encourage the spirit of work, especially with young people.
HOW TO REACH: CenterState Banks of Florida Inc., (863) 291-3900 or www.centerstatebank.com
How much thought do you give to the continuation of your business beyond yourself? What if someone expresses an interest in buying your business? What is your plan if a freeway or some other project displaces your business? These questions could go on for the rest of this page.
None of us live forever. We should be thinking of all types of contingencies. And we should know what our business is worth.
“Every business owner should be planning for how the business will continue beyond the founder’s dreams,” says Lara White.
The senior vice president and diversified commercial banking manager for SunTrust banks, Inc. says, “Selling a business is usually a very emotional event. It is best to remove all emotion from the process of an eventual sale.”
Smart Business talked with White for more of her insight on what business owners should consider as they evaluate their business.
When should business owners start considering the value of their businesses?
Early and often. All business decisions should be based on the future of the business. You want to be prepared for any opportunities that come up throughout the life of a business. An excellent opportunity might be missed because you were not prepared. You have to look at all options based on your goals. You might plan on working for 40 years and cashing out. Maybe your goal is to operate the business as long as you can and then turn it over to your children. You might want to merge with another business to optimize your combined strengths. Whatever your goals, you need to define them and plan in order to meet them. You need to make sure that you are positioning yourself for any and all options.
What are the steps in determining the value of a business?
The first step is to find and select a professional to assist you. You need people who are familiar with your market. They also need to know the ins and outs of mergers and acquisitions. They need to know the valuations of businesses similar to yours.
The next step is to gather the appropriate information. You need to have good, accurate financial records. You need to know how to tell the story of your business. You need to describe the business potential. You need to know how to present the numbers. You must know how to explain why you are entertaining options. You need to find out who might want your business. All of this will help you determine the right time to sell.
How do I know that I am getting the most for my business?
The experience of your professional will help provide the assurance. He or she can help you understand the buyer’s approach. The professional can provide good advice on negotiating with different types of potential buyer.
Strategic buyers and financial buyers are going to have different approaches. Strategic buyers are interested in buying your business, with little or no changes. They plan to continue operating it as is or integrating it into their existing business. Financial buyers would plan to make any adjustments they want to make the business more attractive and sell it at a profit. Either can be the right fit depending on your objectives.
What are the different ‘currencies’ used in acquisitions and what is the ‘value’ of each?
These include: cash, seller notes, earn-outs, equity, ESOPs and any other that might fit the situations and any combination thereof. Much will be determined by what the buyer, the business and the seller can do. Besides the asset value of the business, all of the intangibles must be considered. The currency used will be based on all of the various financial considerations of the acquisition.
How are professionals compensated for their expertise and time?
They typically receive a flat fee for their services. It is also common practice to pay a percentage of the proceeds above an agreed upon minimum sales price. These details are worked out during the exploratory discussion.
Another important discussion point is determining your objectives. Price, time and confidentiality are three important ones.
Once you have determined what is most important to you, your professional can help you keep the process focused and on track.
Your professional should also do all negotiating with the potential buyer’s representative. While you have put your heart and soul into your business, it is better to keep that emotion out of the eventual selling process.
LARA WHITE is senior vice president of SunTrust Banks Inc. and diversified commercial banking manager for SunTrust banks, Inc. Reach her at lara.white@SunTrust.com or (813) 224-2465.
No interview with a job candidate is foolproof. But Gary Sasso says he can get a sense of whom he’s talking to based on his own experience and judgment. Sasso, president and CEO of the 538-employee law firm Carlton Fields PA, asks questions of job candidates that will help him understand the person’s commitment to decency, honesty and teamwork. For example, he may ask an attorney seeking employment what he or she enjoyed from a previous work experience. If that person didn’t like an environment where it was everyone out for themselves, or he or she was distrustful of colleagues, that tells him it is important for the employee to be in an environment where that individual can trust colleagues. Smart Business spoke with Sasso about how to get employees to buy in through dialogue and how to develop a vision.
Develop a vision. That’s a process of talking to people inside and outside the firm and drawing on your own experiences being involved in the business, talking to people in the firm, gathering facts about the industry, giving a great deal of thought to where the firm is positioned in the industry and where and what competitors are doing.
Assessing the strengths of the business, putting that all together, and using your own instincts and judgments to develop a sense of where we should be going, then talking to others in the organization to get feedback on that to adapt and change it.
But once you have gone through the process of gathering information and thinking about direction, then you need to develop a good, clear sense of direction that can be articulated inside the firm. What we do is prepare a strategic plan that does communicate our vision to the people inside the firm.
I have frequent discussions within the firm with groups to talk about our vision and our strategic direction to have a dialogue about it, and also frequent communication by e-mail and otherwise within the firm to discuss what we are doing to execute on that strategic vision.
Get buy-in by participation. I spend a significant amount of time talking to people in the firm, sometimes one on one or sometimes in groups. It is very much a dialogue.
I learn as much as I communicate. I learn what people like, what they don’t like. I get a lot of good ideas that way. It helps shape my views about our strengths and where we need to go as a firm. At the same time, I try to communicate to others what is on my mind, what our challenges are, what the competitive environment is and ideas about where we are to go as a firm.
Then, I get a reaction to that. That does create buy-in because, ultimately, where we are going is a place where people understand we need to go and have often suggested where we need to go.
Get help with decisions. Whenever we are called on to make a decision, I try to get the lay of the land, which often involves talking to other people in the firm, sometimes talking to people outside the firm, gathering up whatever facts we can gather, maybe doing some reading or research.
Then I’ll start to form an idea of how we should address the issue and then I’ll test that with people, maybe key members of our leadership team who are particularly involved in that issue, and then I will chart out a plan for execution and I’ll test that with people. Ultimately, I want to make sure we have something that makes sense and wasn’t just a brainstorm I had late at night.
Be involved in the community. It’s very difficult. In some extent, it’s taking turns. This year, we may be very active in one cause and another year, another cause.
To some extent, it is up to the individual choice of our professionals and employees. Everyone has his or her own cause. As a firm, we do support a number of causes.
We do get requests for support for a number of different events. I will typically channel those to the managing shareholders of the office where the event may be held. That person will make a judgment on whether they have the budget to support that, or whether, given the priorities this particular year, should we be emphasizing this cause or some other cause?
If we are committed fully with respect to our budget in one year, we will keep in mind that cause for the following year.
Develop a good sense of what is taking place in your profession. I try to understand our competitive place in this market and profession, understand what other law firms are doing and how they are grappling with these issues.
I try to bring that information to our firm so they all can understand what we are dealing with and chart a strategy that enables us to progress and to succeed as a business while keeping our values intact.
Sometimes we are able to learn what other firms have done, but every firm has a different personality and history, so you can’t just take what some other firm has done or is doing and apply it to our firm. We have to do what makes sense for us and deal with our own strengths and minimize our own weaknesses.
Never breech the trust that the organization has given you. I presume that we all try to start with honesty. But, there is a question of being committed to the firm and putting the interest of the firm first and putting your interests somewhere behind that.
We have to earn the trust and loyalty of our attorneys and other employees at the firm by being as open, honest and direct as we can be with all our employees.
HOW TO REACH: Carlton Fields PA, (888) 223-9191 or www.carltonfields.com
The Health Opportunity Patient Empowerment Act of 2006 provides tax advantages for health care savings. Among its many provisions, it allows consumers with high-deductible health plans (HDHPs) to save pre-tax dollars in Health Savings Accounts (HSAs) for qualified, future medical expenses. The premiums for HDHP/HSAs are less expensive for employers, and employees benefit by building tax-free savings, all while gaining more control over their health care choices.
“When you combine an HDHP with an HSA, you create a triple tax advantage for the employee,” says Javier Mendoza, vice president, Strategic Marketing, Plans & Programs, AvMed Health Plans, Florida. “Employers should not discount these plans because of the words ‘high deductible.’ Instead, the plans should be viewed as tax-favored coverage with attractive ROI.”
Smart Business asked Mendoza how to successfully roll out an HDHP/HSA plan.
Provide an overview of an HDHP/HSA.
A high-deductible health plan is health insurance that meets IRS guidelines that allow it to be combined with an HSA. For 2007, an HDHP must have at least a $1,100 (single) or $2,200 (family) deductible, indexed annually for inflation. Out-of-pocket expenses cannot exceed $5,500 (individual) or $11,000 (family). HDHPs represent a move away from a pre-paid medical plan to one that protects against major financial loss.
HSAs are owned by the individual and are portable, so changing employers is not an issue. HSAs and qualified HDHPs have a triple tax advantage: they provide tax-free contributions, growth and disbursement for qualified medical expenses. If the money is not used, funds roll over from year to year. HDHPs/HSAs are evolving as a way to pay for not only short and mid-term health care costs, but also to save for health care costs during retirement.
Why should employers consider offering HDHP/HSAs?
HDHP/HSAs offer a long-term strategic solution to the continuing high costs of health care coverage and overall costs. HDHP/HSAs 1) reduce health care premium costs, 2) reward responsible employees who undergo preventive care, 3) increase employee awareness of health care costs, 4) motivate employees to change their personal behavior, and 5) give employers another way to contribute to the long-term, well-being of their employees.
Is the employer required to contribute?
No, but the most successful results will occur when both the employer and employee are contributing. There are many ways employers can contribute. They can 1) make flat rate contributions, 2) structure some type of match, 3) contribute based on salary range or tenure, healthy lifestyle choices, etc. All options should be explored with an independent insurance agent and a tax professional.
How can an employer determine whether an HDHP/HSA is a good fit for their organization?
Larger companies are currently testing the waters, introducing HDHP/HSAs as an option. Some larger companies but more smaller ones are jumping right in and deciding these are the only plans they are going to offer. It depends on the company’s philosophy as well as how informed and engaged their employees already are. The employer should test for readiness/resistance. Do employees talk ‘wellness,’ or are they still in the ‘$5 copay/$50 doctor visit’ mindset?
How should the employer evaluate potential vendors for a plan?
Partner with an agent that understands and is committed to long-term strategy and that can provide tax-advantage support. In addition to considering all the usual factors such as locality, size of network, cost sharing and client services, consider integration points factors that will make it easy for individuals to sign-up and self-manage. Is there user-friendly, non-financial-oriented Web support? Are there tools such as hospital and prescription cost estimators online, as well as reliable, personal assistance? Are targeted management programs available to help consumers with specific conditions not only lower their out-of-pocket expenses, but also improve the outcomes of their particular condition?
Once the decision is made to offer a HDHP/HSA how does the employer get buy-in?
Prepare. Prepare. Prepare. Start to build the case for change at least six months ahead of time and communication will be key to gaining acceptance. You are talking about a culture change, and if you spring this on employees, you’ll be met with resistance. Move away from words such as ‘benefits’ and ‘health plan.’ Position HDHP/HSAs as tax-favored health coverage. Know your audience and tailor the message. Target the benefits by knowing the strong points of interest for each group of employees.
JAVIER MENDOZA is vice president, Strategic Marketing, Plans & Programs, AvMed Health Plans, with offices throughout Florida. Reach him at (305) 671-4946 or email@example.com.
Business is good. Is it time to start looking at expansion? Should you set up new locations, expand your production lines, add to your product mix or open new offices to attract more clients? How do you determine what steps to take and when do you start thinking about expansion?
According to Jim Kimbrough, chairman, president and CEO of SunTrust Bank, Nature Coast, “Take care of today but plan for the future. Tomorrow is definitely going to provide different challenges and opportunities. This is especially true in a growth state like Florida. You never know when a door may open that provides an opportunity for corporate or personal expansion. You need to be ready.”
Smart Business talked with Kimbrough for more insight into areas a person should take into consideration as they think about expanding their business.
How important is it for a business to plan for growth?
It is critical for the most efficient growth of a business. Planning should reduce, if not eliminate, the problems of too little or too late. There are five things that you don’t want too little or too much of if you are going to successfully grow your business. They are inventory, staff, facilities, capital and debt. A good business plan, updated at least annually, can be a key ingredient to efficient growth. At the very least, it will eliminate some of the bumps. It is also imperative to be open to change as the plan and time evolve.
What are some of the basics to keep in mind as you ‘expand your territory’?
What is the forecast for the demand of your products or services? What is the economic forecast? Who is your competition? What have been the reasons for their successes or failures? What can you do differently to maximize your potential? What will be the cost of facilities? Consider land and building costs as compared to rental costs. Determine your options and how they fit your business plan. Also, will you be able to maintain your profit margins in the expanded territories?
How important is cash flow management?
It is a major key to the success of any business. You have to make payroll, pay suppliers, service your debt requirements and meet the demands of owners/stockholders. You have to cover the cost of inventory to supply demand. You have to be prepared to weather the storm during lean times and stock up during good times.
What are some strategies for restructuring debt to improve cash flow?
Identify idle company assets that might not be contributing to the business in the years to come. Outdated equipment, buildings, etc. should be sold to raise cash. Excess or outdated inventory also should be disposed of to help cash flow.
Re-amortizing or extending debt over an extended period or consolidating loans can have a substantial positive effect on your cash flow. Infusion of cash from owners may be needed. Sometimes this infusion of cash from owners may be the only way to grow the business.
Who should be involved in the decision-making as you plan for growth?
The CEO and other substantive shareholders. Those within the company should include the CFO, sales and/or marketing manager and others that might have responsibilities and insight on potential expansion. Outside advisers should include the CPA and company banker.
What does a loan officer look for when processing applications for growing companies?
Earnings history and the future outlook for the products or services are important. Credit rating, ownership structure, current debt to equity ratios, and how the company is handling past and current debt are reviewed. Diversification of assets, products or services, and client or customer base are all considered. The makeup of assets can be important. Last, but not least, the loan officer considers how prepared the company is to handle change.
Are there specific ways your banker can help as you consider growth potential?
The banker is going to look at what has fueled growth or been your catalyst for success to date. He or she can help analyze personnel to be sure that you have the right people on board and might be able to assist in finding the new people you need for expansion. They’ll help analyze your company finances and help determine if you have the money, can get it readily, or are willing to take on debt or find partners or additional owners.
JIM KIMBROUGH is chairman, president and CEO of Sun Trust Bank, Nature Coast. Reach him at firstname.lastname@example.org or (352) 754-5505.
Smart Business asked Wajda to share some of his insights into the evolution of the contact center, why companies choose to outsource their centers, how center performance is measured, and some of the trends Spherion is seeing.
What type of contact center does Spherion manage for clients?
We support both types of centers the inbound center that provides customer service and support, order-taking, appointment-setting and other passive transactions, and the outbound center that performs active sales and telemarketing functions, whose agents work on a base-pay-plus-commission basis.
What are some of the current trends you’re seeing?
We’ve seen an increased demand for multi-lingual agents, especially in the residential or consumer market and in the Tampa Bay area. The incidence of multi-purpose inbound calls is growing as well, which involves marketing additional services to a customer during an inbound call.
Shift work remains commonplace in contact centers, and consistency is very important in managing shift work. After putting a shift schedule in place, you need to hire to the schedule and train to the schedule. For example, you should not hire night-shift staff and expect them to come in during the day for a week of training.
Creative solutions are key to operating a first-rate contact center. For example, if you’re looking for ‘soccer moms’ to work in a center, consider offering a part-time shift from 10 a.m. to 3 p.m. so they can have their work time and still be there for their kids after school.
There is also a very positive trend to provide on-site, on-staff training expertise as a standard part of the cost of operating a contact center. This enables center management to develop quick refresher training as needed to fill gaps, respond to emergency needs, introduce new programs or offers, and turn on a dime to stay out ahead of the competition.
Finally, the trend in outsourcing contact center operations continues to grow, on both the inbound and outbound sides.
Why would a company outsource its contact center operation?
For one, experienced outsourcers are able to staff outbound and inbound centers quickly and less expensively than most clients can.
Two, outsourcing offers flexibility through the ability to staff for peaks and valleys and seasonal demands, and then ‘un-staff’ when the demand spike is gone without having to lay off the client’s permanent employees.
Three, outsourcing can also enable a client to avoid having to build facilities, purchase equipment, develop training, manage advertising and outreach programs and so on. And many companies that have been operating successful inbound centers find that trying to add an outbound operation, dedicated to acquiring new business by phone, is just too large and different an initiative for them to take on.
Finally, we’ve seen how important it is to be flexible. Using an outsourcing staffing provider can enable flexibility, whereas sometimes the policies that an in-house company center might have to follow could actually inhibit flexibility.
Can you monitor how well a contact center is performing?
Yes, and there are a number of key metrics that are central to performance. The basics for an inbound contact center include ASA, or average speed of answer, as measured in seconds or minutes; abandoned calls, when the hold time has become unacceptable to the caller; and blocked calls, or how many times a call reaches a busy signal due to call volumes. They would also include how many contacts are required to resolve an issue.
There should be a requirement for acknowledging receipt of an e-mail or online Web contact within a specified period of time, and a standard for resolving that inquiry. Other standards include forecast contacts versus actual contacts and occupancy rate, which is the number of incoming calls versus the number of agents to handle them.
In the outbound sales and marketing contact center, we might measure revenue, the number of decision-makers contacted, number of calls per day, and average talk time.
Finally, we review agent turnover rates and customer survey ratings to round out the picture and enable us to constantly improve the contact center experience for our clients and their customers.
STEVE WAJDA is a district director at Spherion Corporation. Reach him at (813) 623-6399 or email@example.com.
To participate in today’s complex litigation, companies must produce and obtain extensive electronic evidence. As a result, the federal government recently approved amendments to the Federal Rules of Civil Procedure governing electronic discovery.
“The new rules create a process that addresses the need to retrieve, restore or translate electronic stored information before it can be reviewed for relevance or privilege,” says C. Philip Campbell Jr., a partner at Shumaker, Loop & Kendrick LLP. “With the vast amount of business data being stored electronically, it is crucial that all companies implement an organized global document retention policy.”
Smart Business talked to Campbell about the December 2006 e-discovery rule changes and the importance of implementing a global document retention policy.
How do the recent e-discovery rule changes impact businesses?
The updated federal rules define a new category of discoverable information known as electronically stored information (ESI). The new rules also establish the process for the parties and the court to address issues pertaining to disclosure and discovery of electronic information.
The main consideration for companies under the new rules is implementing a global document retention policy that sets out how long information is kept and defines how and when paper documents and electronic data can be destroyed. This is crucial because a stipulation in the new rules includes a ‘safe harbor’ so if your company instituted and followed a reasonable document retention policy prior to identifying the likelihood of litigation, sanctions are unlikely if information is lost.
How are retention policies implemented?
The goal is to have a policy that allows you to conduct your business in the ordinary course. The first task is to decide what kinds of information should be retained and what kinds should be routinely destroyed. It must also be determined where the retained information will be stored, and who can access it. Companies should appoint either an IT person or perhaps in-house counsel to install the protocols and make sure the retention policy is in place and is periodically audited.
What steps should be taken if litigation is anticipated?
If you identify the likelihood of litigation perhaps in the form of a letter, a disgruntled employee or certainly if you’re served with a summons or a complaint you need to move away from your normal retention policies and put into place what is called a litigation hold. This means any information related to that potential claim or litigation should be segregated and protected to ensure it does not inadvertently get deleted or overwritten.
How is e-discovery defined in the event of litigation?
The new rules lay out guidelines for a court-mandated ‘meet and confer’ session (or series of conference calls) where all parties work through and hopefully reach an agreement about how to conduct the e-discovery process, including timeline and what information will be produced. Another consideration is to determine the ‘universe of information,’ or identify where this information is stored. Electronic information spreads far and wide and could be stored on company PDAs, office computers, employee laptops and home computers, or at outside resources.
The use of nonwaiver agreements are contemplated in the amendments. Non-waiver agreements allow parties to conduct a less rigorous privilege review prior to production, and if privilege materials are inadvertently produced, they can be reclaimed without waiving the privilege or confidentiality.
Can e-discovery interfere with normal business operations?
It certainly can, and the rule changes address this concern. The rules separate accessible from inaccessible information. Accessible information is typically data stored on hard drives, backup tapes, servers or hard drives. This is why it’s crucial to have your global retention policies in place, with mechanisms to best preserve information without impeding your ability to conduct business.
What resources are available to assist with e-discovery?
Outside document retention, implementation and forensic resources will provide experts to identify the information, determine what needs to be retained and in what format it should be stored. It may be more economical to tap these resources that are experts in the new e-discovery rules rather than trying to use internal staffing resources.
C. PHILIP CAMPBELL JR. is partner and head of the Litigation Department at Shumaker, Loop & Kendrick LLP. Reach him at (813) 229-7600 or firstname.lastname@example.org.
“Mentoring is a developmental, caring, sharing and helping relationship where the mentor helps the person being mentored,” says Bahaudin Mujtaba, D.B.A., an assistant professor for Nova Southeastern University at the School of Business.
Smart Business talked to Mujtaba about what it takes for an organization to implement an effective mentoring program.
What does a mentor do?
A mentor can be a person who offers knowledge, insight, perspective or wisdom that is helpful to another person in a relationship that goes beyond duty or obligation. A mentor creates opportunities for exposure, provides challenging and educational assignments, and serves as a role model and adviser.
How can mentoring programs help an organization?
The goal of a mentoring program should be to help leaders, managers, coaches and senior employees become highly skilled, self-aware, inclusive, energetic and creative, and to carry a zest for mentoring every day.
Effective mentors and leaders understand that developing others requires self-reflection, sensitivity, risk-taking, interdependency and teamwork among all parties. They also understand that such a synergy requires forging a partnership, inspiring commitment, growing both the mentor’s and mentee’s skills, promoting persistency and shaping the environment so all parties can achieve their goals.
In the business world, how do mentor/protégé relationships begin?
They often evolve informally, but managers can encourage and formalize them.
Effective mentoring requires listening, caring and other forms of involvement between mentors and mentees. According to experts, mentoring is often used to achieve the interests of special groups and populations, conserve and transfer special know-how, encourage contributions, bring employees together in a new social environment, help people reach their full potential, enhance the competitive position of a person or department, and develop better relationships around the globe.
What is the key to a good mentoring program?
Mentoring is a collaborative effort. Effective mentoring is a relationship built on trust, in which the mentee confides personal information and characteristics to the mentor and the mentor guides the mentored toward growth and learning opportunities.
A good mentoring program is usually focused on specific learning objectives, in which both the mentor and mentee receive training.
Many deliverables originate from a mentoring program, including easier talent recruitment, more rapid induction of new recruits, improved staff retention, improved opportunities, performance and diversity management, increased effectiveness of formal training, reinforcement of cultural change, improved networking and communication, and reinforcement of other learning initiatives.
Successful organizations recognize the value of mentoring programs as an effective way to address diversity, manage organizational knowledge, retain stellar performers and prepare for succession.
What roles does a good mentor play?
There are many, including teacher or tutor, coach, friend, counselor, information source, nurturer, adviser, networker, advocate and role model.
Regardless of the mentoring location, highly effective mentors and leaders share some of the same characteristics.
- They are experienced and respected in the field.
- They have current knowledge.
- They are trustworthy, confident and show high self-efficacy.
- They use transformational leadership skills.
- They willingly share their knowledge and guide others.
- They are approachable.
- They have great passion for their work.
- They know what, how and when to communicate, and how to help improve those they mentor.
- They connect well and challenge those they mentor to reach their full potential.
- They get extraordinary results using a variety of skills to bring about the needed behavioral changes in those they mentor.
BAHAUDIN MUJTABA, D.B.A., is an assistant professor for Nova Southeastern University at the School of Business. He is a former senior training specialist and manager of Publix Super Markets. Mujtaba recently authored a book entitled “The Art of Mentoring Diverse Professionals,” published by Aglob Publishing. Reach him at (954) 262-5045 or Mujtaba@nova.edu.
“While we all have to be aware of and follow all the various laws that affect our business, it is just as important to know what legislation is being considered that could potentially impinge on our business,” says Fred Dobbins, city president, Wealth & Investment Management, SunTrust Bank in Tampa. “It is much easier to help shape a bill than it is to change a law after it goes into effect.”
Smart Business talked with Dobbins for more insight on how we can be effective in making sure our thoughts are considered in any new legislation.
How do I find out what laws are being considered?
Don’t wait until bills are introduced. The earlier in the process your concerns are known, the better chance you have of influencing a positive outcome.
Get involved in your local Chamber of Commerce. It monitors business impacts by government at the local, state and national levels. Devote as much time as you can to finding out what issues are being considered by the various governmental entities. At least scan the newspapers and review your Chamber’s governmental summary. Know what committees are working on. Look for comments by legislators that might indicate their interest in passing new laws to solve a perceived problem that crops up from an event that has received media attention.
What are some additional ways to obtain this information?
Become active in local, state and national associations that represent your business segment. Talk to your business banker, express your concerns and enlist help through his or her contacts and associations. Subscribe to a good legislative summary service that is specific to your business. It should provide weekly or at a minimum monthly electronic updates to what is happening on the legislative level that might affect your business.
Encourage all employees, and especially key employees, to become active in associations that represent their business responsibility. Regularly obtain feedback from these employees on what they see on the horizon as far as legislation that could potentially affect your business.
How involved should I get in the legislative process?
It depends on the size of your business and the time you have available. You may only have one hour per week to build your knowledge, but start now and your impact will grow. Devote as much personal time as possible and supplement that with the assistance of your peers, colleagues and others with similar interests.
What should I do when I hear about legislation that could potentially affect my business?
Even before that, get to know your representatives at all levels. Also get to know the administrative officials that might be involved in implementing or enforcing regulations.
Officials elected, appointed or hired need to hear from their constituents. They want professional input that will help them. Even if they don’t agree with you, they’ll usually welcome your input and at least consider your thoughts, especially when you contact them in a professional manner. Attend public meetings and events to facilitate networking with these individuals. Talking to the legislators in their element will help you get to know each other on another level.
When legislation is being considered, contact your representative and express your thoughts. Attend public hearings or at least send a representative. Participate in political action committees. If there is not a PAC that represents your interests, you can form one.
Besides being keenly aware of how any particular legislation might affect your business, try to look at the big picture. When you know what legislators are thinking and why they have an interest in a particular bill, you’ll have a better chance of influencing them in a way that might help them come up with a solution that helps them, their overall constituency, your business and yourself.
SunTrust Private Wealth Management is a marketing name used by SunTrust Banks, Inc., and the following affiliates: Banking and trust products and services are provided by SunTrust Bank. Securities, insurance and other investment products are services are offered by SunTrust Investment Services, Inc., an SEC registered investment adviser and broker/dealer, and a member of the NASD and SIPC. Securities and insurance products and services are not bank guaranteed. They are not insured by the FDIC or any other government agency, and they may lose value.
FRED DOBBINS is city president, Wealth & Investment Management, SunTrust Bank. Reach him at (813) 224-2601 or email@example.com.