If your company is interested in establishing or enhancing its collaboration with philanthropic organizations, Dan D’Armond, community and government relations director for BMC Software, offers some excellent observations and questions to ask as you review your involvement.
Here is my interview with him:
Deena: What are corporations typically asked about corporate giving and forming strategic partnerships?
Dan: One of the most commonly asked questions corporations receive from nonprofits is, ‘What is your giving strategy?’ Maybe the better question is, ‘Can a corporation afford not to collaborate with nonprofits as part of its strategy?’
Many nonprofits approach potential corporate partners with the promise of a short meeting as to not take much of the corporate giving officer’s time, and then go through a long list of information such as what they do, who they serve, events they have and the all-important, ‘What can we put you down for?’
In an attempt to keep on schedule, they forgot to do a vital task — listen.
A truly strategic partnership results from an actual discussion on goals and objectives.
What is it that the company views as strategic? What does a good partnership look like to them? What types of program elements are they looking for? What are examples of partnerships that have been successful and valuable?
Companies that are active participants in their communities do so for a variety of reasons — good corporate citizenship, cause marketing, community engagement, branding, building community credibility and so on.
Determine, ‘Why do we do what we do?’ and, ‘What do we hope to get out of our community partnerships?’ Having a clear mission statement on areas of philanthropic focus is the starting point.
Talk to sales leaders to find out where their customers are involved. Take the internal temperature on what motivates employees to become involved in volunteerism.
Each corporation must have these internal discussions so that it can effectively communicate its goals and objectives to the community partners and therefore select the best partnership programs.
Nonprofits need to ask these same questions first of themselves and then of the corporations. Nonprofits know the programs and value they provide to the community and to their clients. They also know the tools they have in their tool chest to deliver on a true partnership.
Deena: How do nonprofits and corporations measure success?
Dan: Having a clear and agreed upon set of outcomes and how they will be measured is critical to renewal of the program collaboration.
In the current climate of shrinking budgets, corporate giving officers must demonstrate the return on the investment of each of their collaborations.
I feel the most important element to building effective community collaboration is by knowing your audience — both internally and externally.
Both corporations and nonprofit organizations must know what success looks like to them inside and outside, as well as what the most important tools are needed to reach success.
The combination of these well-thought-out strategies and resulting collaboration will bring positive and lasting change to the communities that both organizations serve. ●
Deena Carstens Munn is the founder of the Houston Philanthropic Society. Deena has more than 10 years of experience in corporate philanthropy and over 20 years of experience working with nonprofit charitable organizations. She is the founder of, and also works for, IHS as a senior sponsorship manager for CERAWeek. Deena has enjoyed volunteering for Hospice of North Central Florida, Texas Children’s Hospital, the Greater Houston Partnership (Energy Collaborative), Houston Technology Center, Christian Community Service Center (CCSC), P.A.W.S. Houston and The Nature Conservancy. More is available at www.houstonps.org.
Learn more about the Houston Philanthropic Society at:
Top-quality health care procedures are readily available in the United States, but disruptive trends are challenging health care businesses. Renewed attacks on health care costs, demands for greater access, exciting research on personalized medicine, evidence-based medicine and medical tourism are transforming health care businesses.
Remarkably, these disruptive challenges are less about medicine and more about evidence-based management of health care organizations.
They are disruptive challenges that demand a business solution.
Why business? Why now?
The country began grappling with the need for health care reform and searching for potential solutions well before the advent of the Affordable Care Act. Health care organizations are increasingly rewarded for outcomes and efficiency rather than the numbers of procedures with expensive equipment.
For example, one reform instituted last October eliminated readmission reimbursements for hospitals. Now, hospitals are not reimbursed if a patient is readmitted for treatment of the same illness within 30 days. This incentive to “get things right the first time” will increase efficiency.
The challenge to provide the same, or better, quality of care with less is indeed a business challenge. Leaders and managers within the field who understand business models and can implement lean-style business systems are at a distinct advantage.
Strategic planning, big data, services marketing, life cycle cost accounting, continuous improvement and operational excellence are all familiar topics in business and critical to the future of health care.
In addition to understanding how the system can best function, being able to analyze additional challenges to the standard care platform, such as the increase in medical tourism or the rise of pharmacy clinics or further individualization of care through genometrics, is a skill that business leaders provide.
The bottom line
It’s no coincidence that leaders of many of the major hospital systems in Houston, home to the largest medical center in the world, not only have training in medicine but also in business. According to the Association of American Medical Colleges, from 2002 to 2011, combined enrollment in dual-degree MD/Ph.D., MD/J.D. and MD/MBA programs increased 36 percent.
CEOs of health care systems and hospitals, physicians within large organizations or practicing on their own, managers of accountable care organizations and those marketing insurance packages to consumers must understand business in order to be successful in this rapidly changing landscape.
The health care industry will increasingly need and seek leaders who can effectively create value, which is the fundamental goal of business. Those who can succeed will not only improve the health of their organizations, but also improve the very health of the health care industry. ●
Bill Glick is dean of the Jesse H. Jones Graduate School of Business at Rice University. Located in Houston, across the street from the Texas Medical Center, the school offers an MD/MBA degree with the Baylor College of Medicine, a concentration in health care and a graduate certificate in health care through Rice Executive Education. Reach him at (713) 348-5928 or firstname.lastname@example.org. More is available at www.business.rice.edu.
Learn more about Bill Glick at:
Houston is the fourth largest city in the United States, which often surprises visitors. Much like comedian Rodney Dangerfield, it seems like Houston “gets no respect.” But the growing recognition of Houston’s global business opportunities could change that perception.
The Houston Airport System has historically experienced strong passenger air service to Europe and Latin America. And now the Asian market has received a number of boosts, such as Air China Beijing’s direct flights to Houston four to seven times a week, United’s additional daily flight from Houston to Tokyo, daily direct flights from Istanbul to Houston on Turkish Airlines and direct flights from Seoul to Houston on Korean Air.
So how did Houston’s leadership grow these opportunities with China and other Asian markets?
Perseverance and vision
One of the reasons Houston is a great city is the perseverance and vision of its leaders. A direct flight from China to Houston had been discussed among community leaders since the early 2000s. It took the Houston Airport System working alongside business and government leaders to get a deal in place.
“We were very confident that the Houston-Beijing route would do well, primarily because of the strong economic and cultural ties that exist between the two destinations,” says Mario Diaz, director of the City of Houston Department of Aviation. “We knew that the demand existed, and we knew that Air China was capable of developing a strong, personal connection with the people of Houston.”
Preparation, timing and patience
Houston’s vibrant economy and cultural diversity played an important role in Air China’s decision to enter the Houston market in 2013 and expand its footprint in the city and the region as a whole.
“Strong demand from business and leisure travelers to China and destinations in Asia has accelerated the implementation of our growth strategy for Houston and the south central region of the United States,” says Zhihang Chi, vice president and general manager of North America for Air China. “The additional flights will provide more options and flexibility to international travelers, allowing them to have more convenient connections to cities within China and beyond via our Beijing hub.”
Establishing long-term relationships has been important throughout this process. The Houston Airport System has cultivated strong relationships with Air China, the Civil Aviation Administration of China, travel agencies throughout China and the media.
The Greater Houston Convention and Visitors Bureau has helped support airport efforts for many years. It’s managed the travel agency and media relationships overseas through their third-party affiliations in China, which included a training program for Chinese media and travel agencies to learn about Houston.
Support from the Greater Houston Partnership, the mayor’s office and various city council members during previous trade missions to Asia developed business connections that were helpful in establishing this new service.
Houston is an entrepreneurial city with limitless opportunities. The increase in international interest in the city is a sure signal of the city’s infinite possibilities. Onward and upward, Houston! ●
Linda Toyota is president of the Asian Chamber of Commerce, Houston. With more than 20 years experience in the nonprofit community, Linda has worked with a wide array of nonprofit organizations including the Holocaust Museum Houston, the Houston Technology Center, the Texas Heart Institute and the Houston Area Women’s Center. Reach her at email@example.com. Learn more at www.asianchamber-hou.org
Companies update their systems to replace outdated software and to modernize or streamline supporting IT resources. They also implement new systems in hopes of benefitting from internal efficiencies through added features, better workflow, etc. The problem is most companies that implement a new system do not achieve all of their objectives, and many fail miserably.
“Ultimately, the new system may be better, but if executives listed the top things they wanted to accomplish by implementing the new system, many times they don’t achieve those things,” says Brian Thomas, partner in IT Advisory Services at Weaver.
Smart Business spoke with Thomas about how to buck the trend of frustrating and failed system implementations.
What pitfalls occur with new system implementations?
Most companies don’t do a detailed analysis of day-to-day operations and assess how that translates into new system requirements. Management must ask, ‘What are the requirements we, as a unique organization, have of a system that will make it successful?’
Midsize companies often don’t have the time and/or don’t feel the need to formulate detailed system requirements. Executives may operate off of a high-level understanding about improvements they want to see, while calling on people they know to get perspective on what comparable companies are doing.
Also, almost everyone takes for granted how software users have shaped internal business processes based on the reports they generate. New systems mean new reports. If the new system doesn’t consider reporting, as well as how much old data to bring over, it can create back-end challenges. Then, companies are forced to either reconfigure processes or scramble to build new reports.
What’s the potential cost of these issues?
A lack of attention can drag out a project and lead to cost overruns. Management may run blind for a period of time if reporting requirements are not properly addressed before go-live, which hampers business decisions and company performance. Top management may perceive the software vendor as not delivering as promised. Delays and problems cause system users to have a tarnished view of a system, and could lead to employees building system workarounds, such as spreadsheets or databases on the side.
What steps do you recommend instead?
A new software system can substantially impact your company. So, it’s crucial to do the initial due diligence to determine whether the new system is capable of doing what management needs it to do the day it goes live.
Appoint someone internally or externally to build out detailed system requirements by working with users in each department to understand how their processes work. You can then provide these requirements to prospective vendors in an RFP-type format.
Vendors should demonstrate to decision-makers how their software achieves the requirements as part of the proposal process. If any are not fulfilled, which usually is the case, they should be able to articulate their plan for resolving the gaps. Management needs to analyze, ‘If this software does 75 percent of what we need, are we comfortable with the vendor’s responses or plans for what it doesn’t do? And if we have concerns, do we want to change how we do things or look at a different software product?’
It’s logical to expect this process to take a few months unless the system being replaced is a standalone product used by one department for a specific need. There are multiple vendors for a reason; companies must figure out what works best for them.
What about monitoring risks during implementation?
Once a vendor is selected, don’t turn over the keys. If the vendor made promises about covering gaps, the internal stakeholders need to remain involved throughout the project’s life cycle to ensure those things are actually happening.
An objective third party can work between the company and vendor to ensure everyone is accountable. They can even assess the risks of going live on the new software and let the company know when those risks have been brought down to an acceptable level. This helps the company avoid a failed implementation and protects the vendor from having a dissatisfied client. ●
Brian Thomas, CISA, CISSP, is a partner in IT Advisory Services at Weaver. Reach him at (713) 800-1050 or firstname.lastname@example.org.
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How Entrepreneur Of The Year™ winners from the Houston regional program are making their voice heard at the EOY national programWritten by SBN Staff
With 25 regional EY Entrepreneur Of The Year™ programs, making the cut to become a finalist in one of the 11 national award categories is tough — you’re competing against more than 200 of the nation’s top entrepreneurs. So landing three national finalists and one national category winner is something worth talking about.
Last year, the Gulf Coast Area region landed four of its 11 regional EY Entrepreneur Of The Year™ winners on the national stage: Steve Pate, chairman and CEO of Strike LLC; Kenneth L. Robison, CEO of Crest Industries LLC; Peter M. Duncan, founder, president and CEO of MicroSeismic Inc.; and David Dunlap, president and CEO of Superior Energy Services Inc.
Duncan was the 2013 national winner in the category of Energy, Cleantech and Natural Resources. Dunlap was a finalist in the same category. Pate secured finalist recognition in the Real Estate, Construction and Lodging category and Robinson was named a finalist for the Family Business Award of Excellence.
Smart Business caught up with Dunlap, Pate and Duncan to discuss innovation, overcoming challenges and the impact of participating in the EY Entrepreneur Of The Year™ program. You can read more of the interview online at www.sbnonline.com.
President and CEO
Superior Energy Services Inc.
How is your organization innovative?
Our company is comprised of businesses that have been acquired through the years — all within oil and gas services.
Rather than integrate, homogenize and sterilize these very successful entrepreneurial efforts, we have created an environment where the founders stay on board after selling their companies, and continue to provide leadership to the very businesses that they founded. This gives us what we describe as a “founders’ mentality” in which decision-making is largely decentralized and the businesses are given the freedom to form themselves in a way that is most acceptable to their local customer base.
We all agree to standards of governance, compliance, safety and environmental protection but field execution is a function of local customer requirements and the businesses are free to form themselves to suit the customer.
The result is an atmosphere of independence and even though we are a large company we retain the air of a smaller independent business.
Describe your involvement in the EY Entrepreneur Of The Year™ program and its impact on you and your organization.
I was pleased and surprised at the positive response in our organization to this award. We are all very proud of what we are achieving at Superior Energy Services and the Entrepreneur Of The Year™ recognition really helped to validate the progress that we are making.
Chairman and CEO
How do you approach challenges you and your organization face — such as economic shifts, market changes, etc. — in such a way that you’re able to adapt and overcome them to succeed?
All great leaders face adversity and obstacles. Over the course of my career, I have faced many unknowns, whether financial or legal in nature, which challenged my decision-making. I always stick to my core principles and the word impossible has never been part of my vocabulary.
Strike’s 58.4 percent year over year compounded annual growth rate (2009-2013) is testament to our ability to take risks during times of uncertainty. In 2009, while many companies were hoarding cash due to the instability in the market place, I gave approval to the IT department to invest significant resources in the creation of a state-of-the-art cost-tracking portal. This portal has proven to be a competitive advantage and differentiator for Strike as it provides complete transparency to our clients’ job cost.
Additionally, Strike launched Campaign for Change in 2012, representing Strike’s philanthropic endeavor. The primary purpose is to create approachable opportunities for employees to get involved in our community.
Campaign for Change exists to (1) raise awareness and educate Strike employees, family and friends on the significance of giving; (2) provide opportunities to give time and resources to local communities and throughout the world; and (3) to impact others by changing ourselves.
In 2013, the Strike family volunteered more than 11,000 hours in addition to financial support to make a difference in the lives of others. A collection of organizations supported include Habitat for Humanity, Freedom Place Shelter, WideAwake.org, Sky High for St. Jude’s, the U.S. Army, KaBoom and disaster relief efforts for the cities of West, Texas, and Moore, Okla.
I strive to take every opportunity, good or bad, to raise the bar higher.
Describe your involvement in the EY Entrepreneur Of The Year™ program and its impact on you and your organization.
My journey with the EY Entrepreneur Of The Year™ program began in spring 2013. It was a true honor to be named the EY Entrepreneur Of The Year™ 2013 Gulf Coast Region Award for Construction and Industrial Services. I am so thankful that God has given me the opportunity to lead the Strike team. A true success story is never only one person — I have six incredible partners and more than 2,500 talented and dedicated employees that have made Strike what it is today.
At the EY Strategic Growth Forum® in November, I was very impressed by the program that was presented. I was able to meet many leaders from other states and listen to inspiring and informative presentations. I was honored to be named a finalist in the category of Real Estate, Construction and Lodging at the National Awards Ceremony.
I am very thankful for the contacts I have made, the speaking opportunities that have come my way and the business ventures I have learned about from being a part of the EY Entrepreneur Of The Year™ program.
This program includes names of many highly regarded and successful individuals that I looked to for guidance and inspiration. It is an absolute privilege to be included in this program and recognized for my role in leading an incredible working family whose dedication makes a difference, not only in the energy industry, but in the lives of others as well.
Peter M. Duncan
Founder, president & CEO
How is your organization innovative?
We began with an innovation — hydraulic fracture monitoring using surface arrays. The legacy providers of this service said it could not be done, but I had done the math and believed it could.
For the first five years of our company we had a dragon to slay — the belief that fracture monitoring had to be done with downhole arrays. That mission drove us to innovate on field array design and data processing so that we could produce a superior product at a competitive cost, and then convert the clients to our vision, one geophysicist at a time.
The innovation was certainly technical, but there was also a marketing and messaging innovation required as we strove to convince the market that this “new” technology was not only real but an improvement over the old way of monitoring.
Describe your involvement in the EY Entrepreneur Of The Year™ program and its impact on you and your organization.
The EY Entrepreneur Of The Year™ program has had a huge impact on me personally and my management. I have attended two of the annual events in Palm Desert. These have been, without a doubt, the most inspiring, invigorating and instructive conferences I have ever attended. The “can do” atmosphere at this conference is so thick you can cut it with a knife.
There you are in the midst of 2,000 motivated business adventurers who don’t even know how to spell the word fail. Just networking with these individuals and sharing their stories of challenge and success is enough to justify the trip. But then there are the guest speakers and roundtables with hugely successful people who have “been there and done that” in all sorts of enterprises from sports to banking to, well, even yogurt manufacturing. Each session gives you a multitude of lessons to take away. After each event I have returned to my company empowered and able to empower my team to reach even higher. ●
Ravi Kathuria: How potent are your sales drivers? They could improve the efficacy of your sales forceWritten by Ravi Kathuria
Considering sales purely as a numbers game often leads to brute-force approaches that are rarely effective. Alternately, analyzing sales drivers and systematically maximizing their potency results in more sales with less effort.
Sales drivers are factors that influence the probability of deal-closure, deal cycle-time, deal profit margin and the post-sale risk of failure. Examples include a company’s reputation, notable product or service features, a salesperson’s skills and the state of the economy.
Common sales drivers are necessary for the deal to go through, and only the top drivers have the power to take the deal to closure. They are your cannons that blow through the resistance. While easy to list, identifying the top sales-drivers is challenging. So how potent are they?
You should systematically identify, analyze and relentlessly exploit top sales drivers, and continuously update the list of top drivers. They may change based on the prospect, the product, the market-segment and even vary based on each sales opportunity. The consistent identification of top drivers, overlooked by your competition, is the key to success in the marketplace.
Consider three examples of top-drivers for complex sales, which require clients to make significant changes in their organizations:
1. Compelling business event
If the prospect is not faced with a compelling business event that demands a strong action, the likelihood of closing the deal will be low regardless of the salesperson’s selling skills, product features or prospect interest.
By identifying, understanding and addressing compelling business events a salesperson can significantly increase the probability of closing the deal.
2. Executive-level internal champion
Deals involving significant change fail unless the salesperson is able to cultivate an executive-level internal champion in the client organization. Organizations need to buy into change at various points and levels.
As an outsider, a salesperson is ill-equipped to “work the organization,” and no amount of feature selling or pricing discounts can drive such a deal to closure.
3. Risk elimination
Change involves risk, and a prospective buyer’s foremost concern is the risk of failure. It may take significant time and a lot of work for the client to realize value from instituting change, while the risk introduced is often immediate.
Therefore, the prospect’s instinct is to maintain status quo. Hence, mitigating risk is a significant driver.
Identifying the top sales drivers provides salespeople specific guidance on what is absolutely necessary to close deals. Each deal/opportunity in the sales pipeline must be closely and continuously monitored to determine whether or not it is harnessing the power of the top drivers.
Measuring the opportunities that employ specific top drivers and their success rate provides critical sales intelligence. Collecting and measuring this data helps validate or invalidate the hypothesis of what comprises the list of top drivers and leads to active evolution of top drivers. Analyzing and exploiting highly potent sales drivers is a proven way to enhance sales productivity.
Name: Ravi Kathuria
Company: Cohegic Corp.
Quoted in The Wall Street Journal, Barron’s and WorldNews, Ravi is a recognized thought leader. Featured on the BusinessMakers show, CBS Radio, TEDx and PBS Nightly Business Report, he is the author of the highly acclaimed book, “How Cohesive is Your Company?: A Leadership Parable.”
Reach him at (281) 403-0250 or email@example.com
“HR bytes” refers to human resources technologies being developed, deployed and adopted at a breakneck pace. New and innovative software applications are making the delivery of HR services better, faster and simpler.
For years now, large Fortune 500 companies have invested in HR technology that streamlines back office processes, enhances learning opportunities and simplifies employee procedures. Now, though, progressive HR service providers are expanding their service offering beyond mere administrative and tactical HR to include more strategic services and the systems to support them, giving smaller companies access to these tools as well.
Time and labor management
Automated Web-based time and labor management systems are replacing antiquated time clocks and swipe cards rife with inefficiencies, and the potential for cheating. Web-based systems provide companies advanced online tools to monitor and manage their employees.
In addition to tracking employees’ time and attendance, some systems allow employers to tap into real-time labor data on demand so managers can assess immediate staffing needs and adjust employees’ schedules accordingly. Such systems can also seamlessly integrate with a company’s internal or outsourced payroll systems to streamline processes and eliminate inaccuracies.
Automated applicant tracking systems assist HR personnel by providing access to applicant databases, creating accurate job descriptions, screening applicants, assessing candidates’ skills and automatically communicating with applicants.
By streamlining this time-intensive process, these programs significantly reduce recruiting costs and help better identify candidates who are likely to contribute value to the organization.
Online benefit enrollment
Benefits enrollment, once a tedious and labor-intensive process, is now conducted mostly online. With 24-hour Web-based access, employees can log onto enrollment systems at their convenience and review plan options, compare features and pricing, and of course, make or change benefit elections.
This allows HR teams to focus on addressing employees’ questions and managing the more complex issues that may arise during benefit enrollment.
Employee self-service is perhaps the most prevalent advancement in HR technology. Web-based systems allow employees online access to their individual employee data, such as payroll information like tax withholdings or 401(k) contributions, so they can adjust withholding levels or contribution amounts as needed.
Self-service expands to supervisors too, allowing them to manage tasks such as scheduling or performance evaluations.
Technology is delivering fully integrated solutions that help businesses manage their employees from the time they are hired to the time they retire.
From training and career development to performance management and succession planning, talent management programs allow companies to be more responsive to their employees’ professional needs and improve overall retention.
Web-based training programs offer employees a wide range of options to further develop their professional skills. Employees can take convenient online courses when and where they wish and complete them at their own pace.
Some programs also offer the opportunity for cyberspace interaction with instructors and other participants through message boards and chat rooms. With access to the same advanced technology as larger companies, smaller businesses can optimize their workforce and their HR processes to enhance company performance and productivity. •
Name: John Allen
Title: President and COO
Company: G&A Partners is a Texas-based HR and Administrative Services company that manages human resources, benefits, payroll, accounting and risk management for growing businesses.
Learn more about the company at:
Deborah Cannon had to reconcile for-profit and nonprofit business strategies to rescue the endangered Houston ZooWritten by Adam Burroughs
Deborah Cannon understands how the world of private, for-profit business works. She was president of Bank of America for the Houston region before retiring with 30 years in the industry.
Courted out of retirement by a headhunter, Cannon took the helm of The Houston Zoo, becoming its president and CEO shortly after the floundering city property had undergone partial privatization in an attempt to reverse its financial atrophy.
“The zoo was, frankly, losing ground every year,” Cannon says. “The city was not charging adequate admission fees to be able to do all the things that needed to be done, so you had deferred maintenance that was building up. The zoo was getting worse, not better, every year.”
It wasn’t an issue that the zoo was spending too much money. It just wasn’t making enough.
“To me it was pretty obvious that we really had to increase revenues,” Cannon says, so she began floating ideas on how to generate cash flow.
“Coming from Bank of America ... when we said, ‘Here’s what we’re going to do, here’s why and here’s the impact it’s going to have on you,’ everybody got behind it and said, ‘Fine,’ because your bonus was predicated on this new change of course,” she says.
But that’s not the way things would work at the nonprofit zoo. Her message about raising revenues was met with resistance.
“I kept hearing people say, ‘Doesn’t she understand we’re a nonprofit.’ It took a while to get everybody at the same realization that we needed to have a lot more members, that we needed to have repeat visits, that we needed to be able to have more revenues,” Cannon says.
“I didn’t realize how slow change comes in a nonprofit and how important the consensus building among all the groups is before you can start affecting any real change.”
Beat of the same drum
“The single biggest difference we made early on was the change in our employees’ attitudes toward the guests,” Cannon says.
Much like the budget, employee morale at the zoo was sagging from years of working for an organization barely able to make ends meet. That dismal attitude showed up in the way staff treated guests.
She had to take employees from seeing guests as being “kind of a bother” to understanding their importance to the zoo’s future. Without positive employees, the zoo didn’t have happy guests who came back with their friends and spent money.
“That’s where guest experience came in, creating that really great guest experience so that people wanted to come back,” Cannon says.
To get staff focused on the guest experience, the zoo designed its own training program. It assigned new employees a “buddy,” a current staffer not in the department of the trainee, to get them acclimated to the grounds and begin to convey the values the zoo wants in its staffers.
It was also important for the staff to understand where the company was going, how it would get there, and what role they play in order to build consensus and get shared buy-in.
To do that, Cannon began gathering the entire staff together five times a year for a general meeting. The budget, conservation efforts and ongoing capital improvements are among the topics discussed, and staff is given presentations from departments ranging from development to elephants.
“So it’s just keeping people informed, keeping them part of the team,” she says.
The improvement in attitude from these changes has been noticeable, according to Cannon. Smaller, early morning meetings used to be a place where staffers would vent their frustrations. But now staffers offer suggestions on how the zoo could be improved.
“It was a very different kind of conversation,” Cannon says. “They were really looking at things from the guests’ side.”
Convincing, growing the base
Improving the guest experience at the zoo was critical, but more was needed in order to raise revenues.
Prior to privatization, admission prices at the zoo were low — 50 cents for children and $2.50 for adults. And the tax dollars from the city and revenue from concessions put constraints on the zoo’s income stream that left no room for additional investments, or even basic preventative maintenance.
“There just was vastly inadequate funding coming to run a good zoo,” Cannon says. “We were frankly in danger of losing accreditation if something wasn’t done.”
Generating more revenue through increasing membership and doing more special events happened fairly quickly. The harder piece, however, was raising money through donations.
“We needed to increase the number of donors we had,” Cannon says, which was a tough thing to do considering she was starting from scratch.
The zoo undertook a capital campaign to pay for the first phase of its African Forest. Cannon says it was originally estimated that the campaign would take two years to complete — it took more than four.
“It took a lot longer because we didn’t have a track record,” she says. “We hadn’t proven that we could do this and do it right and do it on time, on budget.”
The construction of the first phase of the African Forest on time and on budget made raising $27 million for the second capital campaign quicker, it took a little less than two years.
“We’ve established the fact that we’ve made money every year for the last eight years and generated a very good positive cash flow,” Cannon says. That along with seeing the physical improvements gave donors the positive track record they needed to believe in the zoo’s ability to make good on its promises.
Cannon was also seeking donors not for big capital but for the zoo overall. So the first donor club, called the Asante Society, was formed with an annual membership minimum of $1,200 per year. It grew from zero members to about 280 members today.
The zoo also started two additional donor clubs for younger professionals that sought intermittent donations, and used mailings to solicit new donations.
“We hired a completely different staff for our development office — we’ve got a really good staff right now. We have done some different things in terms of membership. So it’s a question of just continuing to build that brand and continuing to make contact,” Cannon says.
Because of these efforts more than $100 million has been invested in the zoo since privatization in 2002. This has meant new exhibits, a new restaurant, gift shop and restrooms. It’s also helped with the $29 million gorilla project and a $3.5 million bughouse, both of which are under construction.
Besides allaying the concerns of hesitant donors, Cannon and the zoo had other concerns to address related to the privatization — continued affordability for the general public.
Today’s prices are much higher compared to 2002 levels, with children’s admission costing $11 and adult admission at $15.
“We undertook some programs to ensure that even though we we’re raising prices, albeit slowly, we developed a couple programs so that people who really couldn’t afford to come could still come, and we built some support for that, too. So they realized that the zoo is really a zoo for all,” Cannon says.
The workforce at the zoo has more than doubled since privatization in all areas, growing from around 150 to almost 400, with a significant increase in rangers, a position totally dedicated to guest services.
It’s upped its marketing efforts online, dedicating a four-person team to take advantage of all the major social media channels. It has had particular success on YouTube where millions have viewed videos of a range of its animals, including two bathing baby elephants.
These investments have paid off. Annual attendance has improved from roughly 1.2 million visitors in 2002 to 2.15 million in 2013. And last year the zoo generated 26 times the cash flow it generated the first full year after privatization.
But the zoo is just getting started.
“We’re in process of doing design development, our schematic design, of two huge projects, which will probably total something north of $100 million, and that’s over and above the $7 to $8 million we will spend every year out of earnings that we make for rehabbing the existing facilities,” Cannon says.
The plan is to redo the front entry, move the existing sea lion pools near the entrance and enhance them. A restaurant would be built where the sea lions are today that would accommodate a number of public and private functions simultaneously.
Another piece of the project would transform roughly seven acres of the zoo into a series of exhibits featuring African animals to complete the African Forest area.
Reflecting on progress
When Cannon visited the zoo before being named its president, she says, “It was not a great zoo at that point in time.” But she was intrigued by the project and thought it was a great opportunity to build something really good for the city. If given the chance to go back in time and give herself advice at the outset of her involvement with the zoo, she would emphasize the need to build consensus.
“The fact that you can’t just change things overnight. The fact that you need to spend a lot more time getting people on board with what we needed to do,” she says.
“I don’t know that it would have made a big difference in the long run. I don’t know that we would have done it any faster. We just would have done it with a little less resistance.” ●
- Employee attitudes translate to customer service, good or bad.
- Investors need proof of success or they will remain hesitant.
- Shared buy-in is critical to implementing organizational change.
The Cannon File:
Name: Deborah Cannon
Title: President and CEO
Company: The Houston Zoo
Education: She began at Georgetown University and transferred to Southern Methodist University where she earned a bachelor’s degree in business administration.
Born: St. Louis, Mo.
If you could spend a day as an animal in the wild, which animal would it be? A lion. They’re less hunted than elephants and rhinos. They have fewer enemies, they’re not the prey of many animals other than people, and they’re really not shooting lions at the same rate that they are elephants and rhinos. I would be a male because females do the hunting and bring the males the food to eat first.
Which animal would you least like to be? The impala seems to be everybody’s dinner in Africa. They’re beautiful, but the impala and maybe the wildebeest; everybody eats them.
What about your perspective has been most affected since you took your position at the zoo? I have a much greater appreciation for the peril these animals are in in the wild. I had no idea how hunted and persecuted they really are.
What’s the one piece of advice you’ve passed on most often to others? I always tell people don’t burn bridges. It’s amazing how many people do that.
What’s one thing you love to talk about but never get the chance to? In Houston, people do not realize how much The Houston Zoo does from a conservation standpoint, conserving animals in the wild — animals and local people — helping local people find other means of supporting themselves than just slaughtering animals. So we need to find a better way to educate the Houston population about all that we’re doing to save animals in the wild and get people to help us do that.
Learn more about The Houston Zoo at:
How to reach: The Houston Zoo, (713) 533-6500 or www.houstonzoo.org
For most company buyers, taxes are a priority when negotiating a purchase price. However, if tax issues are neglected during the integration phase, the negative consequences can be serious. To improve the likelihood of a successful merger, it’s important to devote resources to intensive tax planning before — and after — your deal closes.
During deal negotiations, you and the seller will likely discuss issues such as deductibility of transaction costs and the amount of local, state and federal tax obligations the parties will owe upon signing the deal. Often, deal structures such as asset sales can benefit one party and have negative tax consequences for the other, so it’s common to wrangle over taxes at this stage, says Sean Muller, partner-in-charge of Houston Tax and Strategic Business Services at Weaver.
“With adequate planning, companies can be spared from costly tax-related surprises after the transaction closes and integration of the acquired business begins,” Muller says. “Tax management during integration can also help your company capture synergies more quickly and efficiently.” You may, for example, have based your purchase price on the assumption that you’ll achieve a certain percentage of cost reductions via post-merger synergies. However, if your tax projections are flawed or you fail to follow through on earlier tax assumptions, such synergies may not be realized.
Smart Business spoke with Muller about tax planning after the deal closes.
What is one of the most important tax-related tasks in a deal?
Integrating accounting departments is critical, and there’s no time to waste. The seller may have to file federal and state income tax returns or extensions either as a combined entity with the buyer or as a separate entity within a few months following the transaction’s close. Companies must also account for any short-term tax obligations arising from the acquisition.
To ensure the two departments integrate quickly and are ready to prepare the required tax documents, decide well in advance of closing which accounting personnel to retain. If different tax processing software or different accounting methods are used, choose between them as soon as feasible. Understand that, if your acquisition has been using a different accounting method, you’ll need to revise previous tax filings to align them with your own accounting system.
What are the major areas of concern for companies related to tax planning and operational synergies?
Before starting to integrate products, personnel and facilities, examine the tax implications of those actions. Major areas of concern include:
- Supply chain integration. Combining the logistical operations of both companies may make fiscal sense on paper, but there could be tax consequences. Say, for example, that you’re planning to close your seller’s main warehouse and fold operations into your company’s existing warehouse facilities. What if the acquisition’s warehouse is domiciled in a more favorable tax locale than your warehouse?
- Divestitures and sell-offs. Buyers often spin off unwanted divisions or products when they acquire a business, but from a tax standpoint such moves can be costly. For example, selling a segment could eliminate certain tax write-offs or protections. You also need to plan for the tax consequences of selling newly acquired assets.
- Global implications. International acquisitions can be a tax minefield. Companies should keep in mind the kinds of new exposures the deal carries, such as value-added taxes. Also, consider how a foreign purchase may affect your company’s effective tax rate. Be sure your M&A advisory team includes people who are knowledgeable about the relevant tax laws.
- Enterprise resource planning (ERP). If the two companies’ ERP systems aren’t merged and synchronized, data collection could slow or you could lose tax data. This could affect the accuracy and speed of the combined organization’s financial reporting.
When acquiring a company, your to-do list will be long, which means you can’t devote all of your time to the deal’s potential tax implications. However, the tax consequences of M&A decisions may be costly and could impact your company for years. So, if you don’t have the necessary tax expertise in-house, work with outside advisers that do. ●
Insights Accounting is brought to you by Weaver
Brave entrepreneurs step into the arena. If they are lucky, they are nurtured in the right environment. The landscape is littered with collapsed ventures launched in harsh environments. Even passionate entrepreneurs have failed.
The myth of great business leaders is that they are born with the right stuff, gifted with a revolutionary idea that fundamentally changes business. This thread of the special maverick who becomes a successful entrepreneur can be seen running through the narratives of many of our stories about great entrepreneurs — from Walt Disney to Henry Ford, Steve Jobs and Mark Zuckerberg.
But as Louis Pasteur said, “Chance favors only the prepared mind.” Contrary to popular belief, great ideas sprout within a context, not in a vacuum; collaboration with others is a necessary component; and key principles of entrepreneurship can be learned, practiced and implemented to great success. A little knowledge can make the difference between missing the market and growing fast; between yielding to vultures and great personal wealth.
So what’s the right environment?
Community with other players
Just as valuable as a groundbreaking idea, an environment that helps budding entrepreneurs formulate and nurture ideas is key. An entrepreneurial environment provides opportunities to learn from the experience and knowledge of others, to collaborate, to develop alternative business models and to test ideas.
Research and experience have demonstrated repeatedly that entrepreneurs develop more effectively within an entrepreneurial community with access to complementary resources and markets. Even among the top competitors from the premier global MBA programs at the Rice Business Plan Competition, we frequently see teams respond to feedback by pivoting four or five times until they find the right business model to commercialize novel technologies. Shark tanks, incubators and business plan competitions can provide entrepreneurs a safe environment in which to take a risk, test their business plan and make adjustments.
Education and opportunities
Cities play a crucial role in providing an environment that develops and nurtures entrepreneurs. Silicon Valley is famous for the environment it has created that nurtures technological innovation; Austin does the same for musicians. And Houston has created a wonderful environment for entrepreneurial activity. Each of these cities has great universities, and Houston is fortunate to have the top ranked executive MBA program for entrepreneurs at Rice University, several other top ten programs in entrepreneurship at Rice University and the University of Houston, and a rich mix of supporting organizations such as the Houston Technology Center, BioHouston, Houston Angel Network, TiE Houston, Houston Tech Fest, Start Up Houston, and many others. It’s no wonder Forbes recently listed Houston as the No. 10 Best City for Young Entrepreneurs and the No. 2 Best City for Female Founders.
Passionate entrepreneurs need to seek environments where they can learn from others, collaborate and take calculated risks to test their ideas. In these environments, entrepreneurial ideas have the greatest chance to take flight. ●
Bill Glick is the dean of the Jesse H. Jones Graduate School of Business at Rice University. The Jones School’s graduate entrepreneurship program, currently ranked No. 4 by The Princeton Review and Entrepreneur magazines, has been ranked as a top 10 program in graduate entrepreneurship for five consecutive years.