Carolyn LaWell

Wednesday, 25 November 2009 19:00

Training opportunities

Charlotte A. Martin hates the word mistake.

“We want people to take risks, so you can’t very well hang them up to dry for a mistake if you want a culture of risk-taking and constant improvement,” she says.

The president and chief operating officer of Gateway EDI LLC refers to herself as the chief cultural officer, and in that role, she fosters an environment of risk-taking and idea-suggesting in order to develop employees and, ultimately, the company. Essentially, instead of bringing negative attention to mistakes, the company uses “training opportunities” to identify steps that could have been taken and ways employees can learn from the incident.

The positive spin has helped the electronic data interchange provider’s 260 employees generate $39 million in 2008 revenue. Now, not only are employees taking risks and responsibility for their actions, a Process Improvement Team has been created to encourage employees to take the lead on their ideas for company improvements.

Smart Business spoke with Martin about how to develop employees through a culture of learning.

Live the culture you want. The first thing I think that you have to do is make it an environment where people feel comfortable admitting that they made a mistake. Our whole culture is around customer satisfaction, making improvements, and so you want to create an environment where people don’t feel that they’re going to commit career suicide by admitting a mistake.

You have to do that first, and then you have to provide an example of people high up who admit mistakes and learn from it. Talk about it so that people at all levels feel comfortable. If I’m willing to do it, then other people will [be willing] too.

It sounds really simple, but it really has to be a culture from the top down, and it has to be a live-the-values-type thing every day. It can’t be, ‘Oh, this week, I’m going to do this, but in all other parts of my life here, I’m not going to live those values.’ It has to be the values that you show and live every day.

You don’t want to do this if you aren’t prepared to sift through a few failures. You have to be careful that you don’t have a culture of blame because if you start encouraging people to step forward and admit mistakes, and then learn from them and try to make improvements, if you punish people for that, it will never work.

Identify opportunities and work through solutions. Let’s say that somebody is working on a project and either that outcome doesn’t go well, or let’s say somebody is working on the front line and there is a miscommunication and a customer is upset and it escalates.

A supervisor gets information about this issue. So what they would do is have a conversation with that person and ask them, ‘Tell me what happened.’ You want to hear the whole (story). After you listen to them, you continue to ask them questions about, ‘You’ve thought about this. If you had it to do over again, what would you do differently? What could you have done to (make) this better? What preparations could we have made to handle this differently?’

If the person finds something that’s great, they’ll usually say to you, ‘Oh, I should’ve done such and such, and so I already went back to so-and-so, and I said this and this and this and that; now everything is fine.’ And they feel good about it.

If it’s a big enough issue … like an issue that affects a lot of people, we try to get employees to talk about it in their staff meeting. ‘Here’s what happened. Here’s what I did that I should’ve done better. Here’s how I fixed it. Here’s what I learned.’

But let’s say they don’t find anything that they could’ve done better, that it’s just sometimes things happen and you do your best and there isn’t any resolution. We really try hard not to blame people. We have what I would say a learning environment because it helps people grow and take risks. If you put their head on a totem pole, they’re going to keep it down.

Use specific language to reinforce your message. You don’t say ‘I,’ it’s always ‘We.’ Things are very much nonpersonalized so it’s ‘a plan’ or ‘the plan’ or ‘we did this.’

You never really single somebody out for any kind of negative reinforcement. You’ll single people out for positive reinforcement when they do something good, things that you wanted them to do. But if things don’t go well, you’re very careful not to do that.

Now, if somebody makes mistakes every day, they’re going to get reprimanded and we’re going to take care of it, but in general, people make mistakes because they don’t have enough information or because there was a misunderstanding on what they were supposed to do.

For us, if you look at it positively, then that’s the training opportunity.

Involve employees in positive opportunities. One of the ways, if an idea comes up, without scaring the person half to death — this is the old, parent-teacher-organization (model) — if you bring up an idea, you’re usually in charge of it. A lot of times, people won’t bring up ideas because they’re scared to be in charge, but along that line, if people bring up ideas, you want to encourage them to find a way to break it apart small enough that they feel good starting to take it on. There’s another training opportunity.

If someone has an idea, then you start asking them questions about, ‘Well, what do you mean? How would that work? How would that affect our customers? How would we move forward with it? Have you thought through those sorts of questions?’ You get people comfortable with solving problems and just sort of logically thinking through issues and ideas that they have.

There’s a lot of people with ideas, but that doesn’t mean a lot unless people know what to do with them.

How to reach: Gateway EDI LLC, (800) 969-3666 or www.gatewayedi.com

Friday, 25 September 2009 20:00

Space exploration

Savvy CEOs are taking advantage of the slumping commercial real estate market by evaluating whether their space meets their needs while the cost to buy or lease is low.

Commercial real estate prices fell again in the second quarter, showing an 18 percent national decrease compared to the previous quarter, according to Massachusetts Institute of Technology Center for Real Estate’s index. The drop placed the price index 39.2 percent below its 2007 second-quarter peak.

Clearly, the market is experiencing volatility, but opportunities are present.

“It’s a very good time to get out and move to a different building,” says Burt Follman, executive managing director, Solon Gershman Inc., an ONCOR International affiliate. “This is a very good time if you’re in a class C building to be able to move up to a class B building for little if no money, and the same is true for a class B to a class A.”

Whether you’re searching for a new property or hoping to reconfigure space for efficiency’s sake, cost savings can be yours. The first course of action is to connect with an experienced commercial real estate broker to weigh your options because there are plenty of them.

Debate to buy versus lease

The decision to buy or lease property has less to do with the current state of the market and more to do with each company’s individual circumstances.

Think about your industry, your strategic plan, your company culture, and what those will look like five or 10 years from now; then add the amount of capital you have for discretionary spending. Most companies lease to stay adaptable.

“If you’re someone who’s going to buy a building to use it for your own company, I think you can find a very advantageous acquisition now because of the conditions in the market and because supply is exceeding demand,” Follman says. “As far as leasing office space, vacancies have increased.”

One of the bigger challenges facing the market today is that the capital markets are at a standstill, leaving few lending opportunities. The loan-to-value ratio has changed dramatically. Once, you were putting 10 percent to 30 percent down for a loan; today, it might be as much as 50 percent.

It’s important to work with your broker to analyze your options and ensure the best deal, especially because prices and volatility vary by market and even within markets. Renting sublease space may even be the way to go because it’s cheap, but be sure to investigate the leaser’s financial standing before signing anything.

No matter what your decision, you’ll more than likely see savings because sales prices have fallen and landlords are becoming more and more creative with incentives to retain and attract tenants.

Renegotiate your lease

If your lease has been tucked away, dust it off and read the fine print. Renegotiating your lease can lead to immediate savings and even allow you to get better use out of your space. Again, the returns may vary based on your landlord’s willingness to bargain, but your market insight can be used as leverage.

Before you go to your landlord, there are a few questions to ask yourself. First, how much time do you have left on your lease?

“The economic downturn has created much stress among landlords, which has created opportunities for tenants to restructure existing leases prior to their lease expiration in return for an extended lease term,” says Scott Bazoian, principal and senior vice president, Colliers Turley Martin Tucker. “In most cases, landlords are anxious to renegotiate a lease term, which may have two to three years remaining in order to secure and extend an existing loan that (may be) due to expire shortly.”

Second, how much time do you commit? If you discuss the popular blend-and-extend deal, where you sign a lease extension in exchange for reduced rent, you have to think about whether the space will continue to meet your needs for that length of time.

Third, can you give back or add space? If you’re cash-strapped or your company has reconfigured its employee base, maybe you can work the renegotiation in a way that better uses your space, such as adding or subtracting square footage.

Fourth, use your broker to research your landlord’s financial position, such as insight on how large the mortgage is and whether your landlord has good credit. The information can be an insight on how your landlord is weathering the economy.

Fifth, research your options in the marketplace. Even if staying makes the most sense, at least you can present your landlord with the possibilities that wait should you leave. Some landlords are offering free rent, moving allowances and increased improvement dollars to attract new tenants.

“We’re seeing it all the time,” Follman says. “Companies who are tenants either independently or with a broker are going out to look at other choices in the market, and then using that market data to put leverage on the existing landlord.”

Consider more than just costs

Before you sign next to the X, take into consideration more than just the monthly dollar amount you’ll be paying. The general checklist for picking property once emphasized location, employee driving time and amenities. Those concerns remain important, but the current state of the economy has also brought to light the need for efficiency, flexibility and sound deals.

Working with a broker will allow you to receive the best bang for your buck, meaning fair market value, tax breaks, relocation incentives, landlord concessions and operational costs, while making sure it’s a strong deal.

The real estate crisis has left landlords hurting. Work with your broker to determine whether your landlord is currently facing or could face financial distress and how that affects the tenant improvements or possible free rent he or she promised.

Nonetheless, you should take the time to work agreements into your lease that protect your rights as a tenant if your landlord forecloses on the property and the lender takes over. Time and savings might also be found in the long run with contraction, addition and termination agreements for flexibility.

Flexibility is key for surviving this economy — and that includes your real estate. Your broker will have a space planner who can help you efficiently design the space you’re in or determine which space best suits your company. Companies are saving money by going to open floor plans, narrowing cubical sizes and hoteling, which supports employees working outside the office and sharing desk space.

“Companies should focus more on the total occupancy cost associated with each building and not just the base rent,” Bazoian says. “There are many other factors which impact the total cost of occupancy, such as the efficiency of the space.”

Whether you’re planning to buy, lease, move or stay, make sure you give yourself ample time — at least a year — and consult a broker to ensure you’ve settled on the best choice for your company.

“I think having a licensed, quality professional represent a company for any requirement is something that companies should do because the experience and the knowledge of the market through trying times like this is going to be worth its weight in gold,” Follman says.

Friday, 25 September 2009 20:00

Space exploration

Wednesday, 26 August 2009 20:00

Risky business

This economy probably has your company facing heightened risks — risks that you might not be prepared for and that could ultimately cripple your business.

The global economy is the No. 1 risk businesses say they face today, according to the Aon 2009 Global Risk Management Survey. But the survey points out that less than 66 percent of respondents have formally reviewed their major risks or have plans in place to deal with them, including the economic downturn.

Now is a crucial time to have a detailed risk management program in place. After all, budgets are tight, you’re looking for savings and managing risk can directly influence your bottom line.

“Going back to the economy, it’s huge for our customers today,” says Kelly O’Leary, senior vice president and Pennsylvania regional manager, Chubb Group of Insurance Cos. “They really need to have a strong handle on the exposures that they have. By putting the proper insurance program in place, it can help them alleviate any financial hardship they may encounter if it’s not properly managed through an insurance mechanism.”

Hiring an in-house executive to focus on risk may financially be out of the question. But a good insurance broker can help you put the puzzle pieces in place, starting with the questions that will lead to true solutions.

Identify potential exposure

Like anything in business, a true commitment to risk management starts with the company’s leadership. Set aside time for your organization’s key players to sit and outline the different risks you might face, such as financial, property and casualty, and legal.

There are a number of assessments you can do — such as risk mapping or enterprise risk management — depending on the amount of detail and commitment you want your program to include. Regardless of what direction you are going, you should include your insurance broker in the conversation. Odds are his or her experience, benchmarking data and outside eye will lead to valuable questions. A good broker has dedicated risk management and claims services and will go through a checklist that will bring your risks to light.

Once your risks have been identified, your broker can help you develop a strategy to quantify your risks and determine whether you should mitigate or transfer the risk.

“Insurance obviously plays a key role in helping companies transfer the risk that they are unable or unwilling to avoid or self-assume,” says Steven J. Reiss, senior vice president and regional executive officer, Mid-Atlantic region, ACE USA. “A comprehensive approach to risk management really calls for an insurance program that is highly customized and tailored to an individual company’s risk exposures and their own individual tolerance for assuming some of their risk.”

The process is fairly systematic, but it’s also continuous. A true risk management plan involves constant monitoring. It’s worth the effort to work with your broker to match a timeline of monthly musts with your plan. Especially in volatile times like today, your company could face different risks than it did six months ago.

“Risk management is a daily requirement of running a successful business,” says Robert Ivey, Pennsylvania regional vice president, property and casualty insurance, The Hartford Financial Services Group Inc. “As your business grows and develops, you should be engaged regularly with your insurance carrier and agency to make sure products and services provided by your carrier address the needs of your business.”

Review risks

Your risk analysis is a great guideline for your specific needs, but there are a few areas of coverage the economy has made more relevant. And today’s evolving risks can be enhanced by geography and industry.

“There are both new risks and risks that have become more significant as a result of an economic downturn,” Reiss says. “But the changes in the economy may have a very different impact on different types of businesses, so it really has to be a case-by-case review.”

Business interruption and trade credit insurance are two areas to review. If a client can’t pay or your operations are halted, how will those scenarios affect your balance sheet if you’re already strapped for cash?

Insurance executives are warning that desperate times produce desperate people. If you’ve decreased your work force or plan to, keep in mind workers’ compensation and employee discrimination claims tend to rise in a down economy, as do employee crime and cyber theft.

“Insurance coverages that businesses are starting to explore now due to the economic situation include employment practices liability and directors and officers liability coverage,” O’Leary says. “Also, business owners might be buying increased crime insurance limits because they feel they have a greater exposure. These are the coverages that insurance carriers are really talking more with customers about today.”

Find cost-saving solutions

Insurance is one line item that hasn’t been immune to budget cuts. But before you start scaling back coverage, keep this in mind: We’re still in a soft commercial insurance market — meaning insurance is a cheap form of risk capital.

A 2009 benchmark survey by the Risk and Insurance Management Society Inc. shows a lower average in premiums contributed to a 9.4 percent drop in the average total cost of risk per $1,000 of revenue.

If you’re worried about the size of your insurance allotment, call your broker now, review your contracts and review your risks. You don’t have to wait until your renewal in order to find savings or renegotiate your contract. Just remember, before you can responsibly lower costs, you need the details of what you are and aren’t covered under.

Immediate savings can be found by passing risk to others, such as tenants or vendors. You also can play around with increasing deductibles to lower premiums or scaling back nonmandatory insurance. If the latter two are options, first weigh whether you can financially assume the risk or if the cost of managing the risk is cheaper.

One of the only ways to decrease the costs you can control is by reviewing your claims. You should have regular claims review meetings with your broker to see where prevention methods can be put into place.

“Risk management does not always mean a cash outlay; it could be as simple as setting a tone of safety with employees that leads to a safer work environment and lower workers’ compensation losses,” Ivey says. “Your insurance carrier can assist, along with your agent, with developing a risk management plan.”

Some brokers say clients recently have seen cost savings of 20 percent.

Part of the answer is building a long-term relationship with your broker and even carrier. Share with them details of your operations. Invite them to tour your facility. The more your broker understands your business, the better he or she will be able to provide holistic advice. And a lasting relationship with an insurance carrier can mean more flexibility and negotiation.

“What you find is the insurance carrier and the company get to know each other much better,” O’Leary says. “We have a stronger understanding of the company’s operations and what their needs are both from a service and coverage standpoint. A long-term relationship helps the carrier look to the customer’s future needs and, perhaps, design a service for the customer or modify their coverages in a unique way.”

Philadelphia

Special Report

Sunday, 26 July 2009 20:00

Balance of power

You’ve probably met with your executive team and members of your staff to devise ways to weather this economic cycle on sound financial footing. But you may have forgotten to invite a key player to the table: your banker.

Whether you’re seeing red or thriving during this volatile time, it’s always helpful to ask for input from an outsider. Now is the time you should be thinking beyond just the products your bank offers and see your banker in the role that he or she aspires to be — your trusted adviser.

“There are many things that a financial institution can do to work with a client during a down economy,” says Tory Nixon, executive vice president and president of the San Diego Division, California Bank & Trust. “We are advisers to our business clients in addition to our common duties of managing our clients’ cash, providing liquidity and financing fixed assets.”

Many businesses don’t think to communicate with their bank on a regular basis, which means missing out on a valuable, free resource, according to industry experts. Think of your bank for ideas and solutions for efficiency, especially now when you’re probably looking for answers.

To take advantage of your bank’s true role as a consultant, you must start by forming and maintaining a strong relationship around trust and communication.

Introduce yourself and your business

The first step in using your banker as an adviser is allowing time for him or her to get to know you and your business. Even if you’ve been partners for decades, invite your banker to your office or place of operation for a meeting.

While it’s important for the bank to learn about your operations, over time, it’s necessary for you to return the favor. A good relationship banker will introduce you to managers and key decision-makers in the bank, but if the introductions aren’t offered, take the initiative and ask for a meeting. The more people you know at the bank, the more likely your company will become a household name, the more likely you’ll know who makes the decisions and how they’re made and the more likely a smooth transition will occur if your contact leaves or is promoted.

“You want to broaden your contact base within the bank and within the company,” says Ken Pickle, vice president and San Diego regional commercial banking manager, Bank of the West. “You want to know your relationship manager; you want to know the manager. You want to have multiple contacts within the bank so that you may have one primary contact who coordinates the relationship, but you want to have multiple alternative contacts so that if there’s a change in management or a change in relationship manager that your business is not brand new, not brand new to the bank.”

Once the initial contacts are made, work to maintain those relationships with open and candid communication. Ask your banker how often he or she wants to hear from you. Is it once a month or once a quarter?

If issues arise in the meantime, don’t be afraid or intimidated to call your banker. One thing all bankers will tell you is that they hate surprises — both good and bad. The more they understand your financials, strategic plan and any changes in the company’s overall operations, the better they’ll be able to provide products and solutions to keep you on the right track.

“If something turns drastically in a business, let your banker know,” Nixon says. “Again, good frequent communication is imperative for any relationship. One of California Bank & Trust’s internal mantras is ‘Good news should travel fast, and bad news … faster.’ It’s just a good business practice period for a bank and its clients.”

Use your bank for regular counsel

Like your lawyer or accountant, use your banker as a true consultant. Whether you’re trying to stay afloat or even rapidly growing, your bank can help in navigating through this economic downturn and in planning for the future.

Once you’ve established a relationship and your banker understands your business and your industry, ask him or her to review your business plan. It’s one of the best ways to utilize your bank’s resources. And if you don’t have a plan, create one.

Your banker has a true advantage of having a national, regional and industry-specific perspective on economics.

“One part of our underwriting and client management process is dissecting the company’s past performance and financials and comparing or benchmarking them to industry averages and best-in-class companies,” Nixon says. “With this said, businesses should be prepared to ask their relationship banker about these performance benchmarks. This consultative process is a real revelation for some clients and provides some areas for our clients to focus or improve upon if they so desire.”

There are a number of questions about your plan that you should be able to bounce off of your banker. Are the assumptions of your business plan reasonable for the current economic environment? How does it compare with other companies in the same industry? How can the plan be improved? What type of contingency plan should be in place? And finally, what products and solutions can the bank offer to help meet your company’s needs?

“Generally, in terms of questions, are the assumptions reasonable given our prior experience, and are they reasonable with the economic outlook and other companies in the industry and the competition in general?” Pickle says.

Take advantage of products and services

At least once a year, you should sit down with your banker to review the products you’re using. Perhaps you’re paying fees for a product you rarely use or technology has advanced and greater efficiency can be had.

A relationship review with your bank can help you tackle ways to save money and save time.

“During that review, (businesses) typically discover services that they may be using or that they are being charged for that they’re not using actively,” Pickle says. “Some of those services can be turned off. There might be new services to improve efficiencies and reduce costs that can be turned on.”

One of the main priorities right now is maximizing cash flow. Among popular products today are rapid deposit solutions, a desktop scanner that allows you to automatically deposit checks into your account.

While you might be thinking short term, ask your banker about options that will help you now and in the future. Interest rates have dropped — perhaps you can capitalize on a new loan or refinance. Discuss with your bank how long you’ll need to borrow on a loan and how much money you’ll need to borrow to structure a plan and lock in fixed interest rates while they’re low.

But once again, banks seek to be an adviser. Some banks offer seminars and informational Web sites as additional resources to finding efficiency. And many banks, if you’ve maintained honest communication with them, will honor your need for them to be flexible.

“Generally, a good banking relationship is much like any other personal relationship or marriage in that it is in the tough times you see the value and the quality of the relationship,” Nixon says. “Both parties need to invest time and work at the relationship for it to be prosperous in the long run.”

Sunday, 26 July 2009 20:00

Balance of power

You’ve probably met with your executive team and members of your staff to devise ways to weather this economic cycle on sound financial footing. But you may have forgotten to invite a key player to the table: your banker.

Whether you’re seeing red or thriving during this volatile time, it’s always helpful to ask for input from an outsider. Now is the time you should be thinking beyond just the products your bank offers and see your banker in the role that he or she aspires to be — your trusted adviser.

“The most important thing that we can do is stay close to our customers and help them through this hard recession,” says Stephen R. Callow, senior vice president and business banking regional manager, Southwest Bank of St. Louis. “And the more we know about our customers’ businesses, the more we can be value-added, helping through this difficult time.”

Many businesses don’t think to communicate with their bank on a regular basis, which means missing out on a valuable, free resource, according to industry experts. Think of your bank for ideas and solutions for efficiency, especially now when you’re probably looking for answers.

To take advantage of your bank’s true role as a consultant, you must start by forming and maintaining a strong relationship around trust and communication.

Introduce yourself and your business

The first step in using your banker as an adviser is allowing time for him or her to get to know you and your business. Even if you’ve been partners for decades, invite your banker to your office or place of operation for a meeting. It will better help the bank provide you valuable products and solutions.

“What we do as relationship bankers is we go out and we meet customers and prospects, and we get to understand their business,” Callow says. “We don’t lead with product, we don’t push product, we try to understand and figure out what their needs are before we ever even talk product.”

While it’s important for the bank to learn about your operations, over time, it’s necessary for you to return the favor. A good relationship banker will introduce you to managers and key decision-makers in the bank, but if the introductions aren’t offered, take the initiative and ask for a meeting. The more people you know at the bank, the more likely your company will become a household name, the more likely you’ll know who makes the decisions and how they’re made and the more likely a smooth transition will occur if your contact leaves or is promoted.

Once the initial contacts are made, work to maintain those relationships with open and candid communication. Ask your banker how often he or she wants to hear from you. Is it once a month or once a quarter?

If issues arise in the meantime, don’t be afraid or intimidated to call your banker. One thing all bankers will tell you is that they hate surprises — both good and bad. The more they understand your financials, strategic plan and any changes in the company’s overall operations, the better they’ll be able to provide products and solutions to keep you on the right track.

“It’s not unusual when a company is maybe struggling in a down economy for the communication not to be as good as it probably should be with a bank, but I would tell you that almost all bankers are going to work better with a company if there’s a lot of communication, if the financial information is plentiful, and that the discussion is candid about where that company thinks it’s going,” says Jack Schreiber, president and COO of the St. Louis region, Commerce Bank.

Use your bank for regular counsel

Like your lawyer or accountant, use your banker as a true consultant. Whether you’re trying to stay afloat or even rapidly growing, your bank can help in navigating through this economic downturn and in planning for the future.

Once you’ve established a relationship and your banker understands your business and your industry, ask him or her to review your business plan. It’s one of the best ways to utilize your bank’s resources. And if you don’t have a plan, create one.

“Allow your banker to sit in on your planning strategy sessions,” says Michael Scully, St. Louis regional president — commercial banking, U.S. Bank. “Ask for input. Always consider that a well-qualified banker benefits from exposure to many different successful business relationships and has no doubt identified strategic best practices.”

Your banker has a true advantage of having a national, regional and industry-specific perspective on economics.

There are a number of questions about your plan that you should be able to bounce off of your banker. Are the assumptions of your business plan reasonable for the current economic environment? How does it compare with other companies in the same industry? How can the plan be improved? What type of contingency plan should be in place? And finally, what products and solutions can the bank offer to help meet your company’s needs?

“One of the most important things is to test the assumptions that are the underpinning of a business model,” Callow says. “They need to be tested and compared to other businesses in the industry to make sure that those underlying assumptions are valid and will stand the test of time because then that makes that business model or business plan a viable business plan.”

Take advantage of products and services

At least once a year, you should sit down with your banker to review the products you’re using. Perhaps you’re paying fees for a product you rarely use or technology has advanced and greater efficiency can be had.

A relationship review with your bank can help you tackle ways to save money and save time.

“Banks have hundreds of products and services,” Scully says. “Clients should expect and deserve to be exposed to only those products (that) can earn them a positive return, reduce overhead, minimize fraud and generate adequate returns on their liquidity.”

One of the main priorities right now is maximizing cash flow. Among popular products today are rapid deposit solutions, a desktop scanner that allows you to automatically deposit checks into your account.

While you might be thinking short term, ask your banker about options that will help you now and in the future. Interest rates have dropped — perhaps you can capitalize on a new loan or refinance. Discuss with your bank how long you’ll need to borrow on a loan and how much money you’ll need to borrow to structure a plan and lock in fixed interest rates while they’re low.

But once again, banks seek to be an adviser. Some banks offer seminars and informational Web sites as additional resources to finding efficiency. And many banks, if you’ve maintained honest communication with them, will honor your need for them to be flexible.

“It’s relationship banking, and it works both ways,” Callow says. “If a business is struggling, the best thing that we can do is sit down and talk things through, find out where they’re at and where they’re going and what we can help them do to get there.”

Thursday, 25 June 2009 20:00

Multiple choice

Let’s face it, when you’re in a budget crunch you’re looking to slash any line item that doesn’t show an immediate return. In today’s recession, training is becoming that item more and more.

The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, according to research firm Bersin & Associates. The average training expenditures per employee fell 11 percent from 2007 to 2008, and small and midsize businesses were hit the hardest, averaging 33 percent fewer training hours per employee.

You may think trimming or even axing training is justifiable — training takes time and money and doesn’t usually have an immediate return on investment. But educators say now is a prime time to enhance your employees’ skills, whether it’s taking advantage of slower business to cross train employees or supporting your employees in the additional responsibilities that they took on following company layoffs.

“As we get smaller in our organizations, and we’ve probably heard this for decades, people need to do more with less,” says Joe Shapiro, dean of the College of Extended Studies at San Diego State University. “I like to say we have to work smarter, not necessarily harder. We, in essence, have to increase in our efficiency and increase our effectiveness, and doing that requires some kind of education training. Sometimes it’s through universities, sometimes it’s through online training, but certainly you need to invest in people.”

Eliminating your training or education budget can be detrimental. But there are ways to maintain productivity with fewer dollars, and it starts and ends with efficiency.


Track your spending and its returns

One place to start is looking at the training or education you’ve done in years past. Did you see results that directly improved your bottom line? If not, look closely at what you’ve spent money on. Maybe you’re paying for employees to get advanced degrees that are useless to your company or maybe you lack the resources needed for your staff members to fully implement what they learned in training.

There are multiple ways to track training, the most popular being pretesting and post-testing to grasp the change in employee knowledge. Whether or not you measured your employees’ change in skills, a follow-up assessment to gauge retention and whether more training is needed can provide positive feedback. Questions to think about are: Did they learn something from the training? If they learned something, can they apply it on the job? If they can apply what they learned on the job, did it have a positive financial effect on the company?

“One of the really key elements is to be certain that you solicit input from the people who are going to be trained, before, during and after the training so that they have an investment in making sure it’s successful for them, as well,” Shapiro says about effective training techniques.

If you haven’t seen the results you were hoping for, don’t continue to throw the same training program at the problem and hope for a different outcome. It’s important to remember that training isn’t always the solution and that people learn in different ways. The best thing to do is either sit down with a training provider or internally spend time evaluating the best solutions moving forward.


Find solutions now, while planning for the future

Effective training that gets to the core of the problem starts with an analysis of what the issue is and having a sense of what you want to accomplish through training. A common mistake is assembling training for a particular reason but never defining the why and a quantifiable outcome.

An internal training department can outline the company’s objective, but you can always look to the experts at consulting firms, colleges and universities to do a needs assessment and align an educational plan with the results.

External providers can offer objective advice to what your company’s priorities should be when it comes to training and carryout implementation. And while you may be thinking short term in this economy, a long-term plan is essential to be a step ahead of your competition and execute successful training.

The best ways to assure you’re meeting your company’s needs and spending your money wisely are to link training to your strategic plan and your performance management system — each job description and employee annual review. That guarantees a regular evaluation of your training program and your employees’ skills, and if you’re working with a provider, it keeps them abreast of your company’s future plans, which can lead to identifying problems and solutions earlier and faster.

To form a successful training regimen, you should conduct needs assessments annually and implement training programs that meet employees’ needs based on those assessments, says Teri Safranek, director of work force and community development at Palomar College.

“Look at the company’s five-year plan and determine what skill sets employees will need for the future growth and development of the organization,” she says. “Budget training dollars on a per-employee annual basis and understand that training of any type is never a waste of resources.”


Determine training that suits you and your budget

There’s a plethora of external sources to partner with, whether it be sending administrators to pursue master’s degrees or training employees on communication techniques. Colleges and universities tend to be the best bang for the buck, offering a one-stop shop with consulting, full implementation and a broad range of courses.

When it comes to training, the costs that add up are flying in topic experts, sending employees to out-of-town conferences or even holding training off-site. If you’re hoping to trim your training budget — and it seems many are — then think locally. Look at the office training and online services offered by local community colleges and universities.

Tough times call for creativity. Think about internal and external resources that lend themselves to free training. Check professional associations for round tables and seminars. Survey your employees on their areas of expertise and hold brown-bag lunches on those topics. If you’re bringing training in-house, just make sure you’re using a variety of techniques to meet each employee’s learning styles.

“One of the things that you need to look at as a company is which of these modalities makes some sense to you in terms of your own organization,” Shapiro says. “The size of your organization makes a big difference. Bigger organizations have more opportunities, more resources. Some of them are probably doing their own training in many areas but probably still need some outside consulting in many areas.”

And look for funding sources — federal, state and local organizations offer training grants, whether it’s the U.S. Department of Labor or one of your local economic development corporations.

If you’re thinking about dramatically cutting your budget, first think about why you have training in the first place: to improve your retention, customer satisfaction, corporate culture and the overall growth of the company.

“I think it is important for companies to remember that the economy runs in cycles, and investing in the professional growth and development of their No. 1 asset (their employees) is critical to the success of the company’s future,” Safranek says.

Thursday, 25 June 2009 20:00

Multiple choice

Let’s face it, when you’re in a budget crunch you’re looking to slash any line item that doesn’t show an immediate return. In today’s recession, training is becoming that item more and more.

The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, according to research firm Bersin & Associates. The average training expenditures per employee fell 11 percent from 2007 to 2008, and small and midsize businesses were hit the hardest, averaging 33 percent fewer training hours per employee.

You may think trimming or even axing training is justifiable — training takes time and money and doesn’t usually have an immediate return on investment. But educators say now is a prime time to enhance your employees’ skills, whether it’s taking advantage of slower business to cross train employees or supporting your employees in the additional responsibilities that they took on following company layoffs.

“First off, skills very quickly become obsolete,” says Robert D. Stokes, assistant vice president for academic affairs for part-time and continuing studies at Villanova University. “You need to continue to upgrade the skills of your employees so they can handle the new types of tasks and activities that they’ll be involved in. Also, I think that employee productivity this day and age is one of the key factors for organizations to improve and grow, and I think that cutting education is hurting the organization as a whole.”

Eliminating your training or education budget can be detrimental. But there are ways to maintain productivity with fewer dollars, and it starts and ends with efficiency.

Track your spending and its returns

One place to start is looking at the training or education you’ve done in years past. Did you see results that directly improved your bottom line? If not, look closely at what you’ve spent money on. Maybe you’re paying for employees to get advanced degrees that are useless to your company or maybe you lack the resources needed for your staff members to fully implement what they learned in training.

There are multiple ways to track training, the most popular being pretesting and post-testing to grasp the change in employee knowledge. Whether or not you measured your employees’ change in skills, a follow-up assessment to gauge retention and whether more training is needed can provide positive feedback. Questions to think about are: Did they learn something from the training? If they learned something, can they apply it on the job? If they can apply what they learned on the job, did it have a positive financial effect on the company?

If you haven’t seen the results you were hoping for, don’t continue to throw the same training program at the problem and hope for a different outcome.

“Sometimes I think what happens is training is sort of viewed as a cure-all,” Stokes says. “Someone hears a great speaker at a conference and says, ‘We’ve got to bring this person in,’ and everyone goes to the training, and they’re happy about the training. And then, a week later, everything drops off. You want training that is relevant to the problem that is occurring and that it’s a proper solution.”

It’s important to remember that training isn’t always the solution and that people learn in different ways. The best thing to do is either sit down with a training provider or internally spend time evaluating the best solutions moving forward.

Find solutions now, while planning for the future

Effective training that gets to the core of the problem starts with an analysis of what the issue is and having a sense of what you want to accomplish through training. A common mistake is assembling training for a particular reason but never defining the why and a quantifiable outcome.

An internal training department can outline the company’s objective, but you can always look to the experts at consulting firms, colleges and universities to do a needs assessment and align an educational plan with the results.

“You would need to conduct a human resource inventory to know what current knowledge, skills, abilities your employees have,” Stokes says. “Also, your organization would need to know what’s the mission and strategy of the organization, and is there a gap between the future and current employees that you have.”

External providers can offer objective advice to what your company’s priorities should be when it comes to training and carryout implementation. And while you may be thinking short term in this economy, a long-term plan is essential to be a step ahead of your competition and execute successful training.

The best ways to assure you’re meeting your company’s needs and spending your money wisely are to link training to your strategic plan and your performance management system — each job description and employee annual review. That guarantees a regular evaluation of your training program and your employees’ skills, and if you’re working with a provider, it keeps them abreast of your company’s future plans, which can lead to identifying problems and solutions earlier and faster.

Determine training that suits you and your budget

There’s a plethora of external sources to partner with, whether it be sending administrators to pursue master’s degrees or training employees on communication techniques. Colleges and universities tend to be the best bang for the buck, offering a one-stop shop with consulting, full implementation and a broad range of courses.

When it comes to training, the costs that add up are flying in topic experts, sending employees to out-of-town conferences or even holding training off-site. If you’re hoping to trim your training budget — and it seems many are — then think locally. Look at the office training and online services offered by local community colleges and universities.

Tough times call for creativity. Think about internal and external resources that lend themselves to free training. Check professional associations for round tables and seminars. Survey your employees on their areas of expertise and hold brown-bag lunches on those topics. If you’re bringing training in-house, just make sure you’re using a variety of techniques to meet each employee’s learning styles.

“Organizations can form strategic partnerships,” says Waverly Coleman, assistant dean for the Division of Business and Technology and executive director of corporate solutions for Community College of Philadelphia. “Instead of one company providing training for five people, those companies can form a collaborative (program). And even though I know that they may be ‘competitors,’ there’s certain skills and types of training that all of their employees need. It can be much more effectively provided and efficiently provided if they were willing to pull together and offer that training.”

And look for funding sources — federal, state and local organizations offer training grants, whether it’s the U.S. Department of Labor or one of your local economic development corporations.

If you’re thinking about dramatically cutting your budget, first think about why you have training in the first place: to improve your retention, customer satisfaction, corporate culture and the overall growth of the company.

“The best way to summarize it would be to say that employee education and training really is about increasing the intellectual capacity and the potential contributions that individuals can make in terms of being productive members of organizations as well as being productive members of society ,” Coleman says.

Thursday, 25 June 2009 20:00

Multiple choice

Let’s face it, when you’re in a budget crunch you’re looking to slash any line item that doesn’t show an immediate return. In today’s recession, training is becoming that item more and more.

The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, according to research firm Bersin & Associates. The average training expenditures per employee fell 11 percent from 2007 to 2008, and small and midsize businesses were hit the hardest, averaging 33 percent fewer training hours per employee.

You may think trimming or even axing training is justifiable — training takes time and money and doesn’t usually have an immediate return on investment. But educators say now is a prime time to enhance your employees’ skills, whether it’s taking advantage of slower business to cross train employees or supporting your employees in the additional responsibilities that they took on following company layoffs.

“People are taking on more responsibilities in companies when times are lean,” says Susan Brooks, senior vice president of work force and economic development and general counsel at Ivy Tech Community College. “Well, doubling up on duties might not necessarily mean they have the skill level, and so by training that person, it can improve the efficiency of a company. Labor is the single largest investment of nearly every company and trying to ensure that your labor, the folks who work with you, are trained to their highest level really affects a company’s productivity and bottom line.”

Eliminating your training or education budget can be detrimental. But there are ways to maintain productivity with fewer dollars, and it starts and ends with efficiency.

Track your spending and its returns

One place to start is looking at the training or education you’ve done in years past. Did you see results that directly improved your bottom line? If not, look closely at what you’ve spent money on. Maybe you’re paying for employees to get advanced degrees that are useless to your company or maybe you lack the resources needed for your staff members to fully implement what they learned in training.

There are multiple ways to track training, the most popular being pretesting and post-testing to grasp the change in employee knowledge. Whether or not you measured your employees’ change in skills, a follow-up assessment to gauge retention and whether more training is needed can provide positive feedback. Questions to think about are: Did they learn something from the training? If they learned something, can they apply it on the job? If they can apply what they learned on the job, did it have a positive financial effect on the company?

If you haven’t seen the results you were hoping for, don’t continue to throw the same training program at the problem and hope for a different outcome.

“One of the biggest problems that I run into in my experience is that I’ll go into an organization and the people at the top, who are in a position to hire me as a university-based consultant, think they know what the organizational problem is that needs to be solved,” says John Beeson, executive director, Office of External Relations and Professional Development, Indiana University. “A lot of times businesses will go out and hire somebody who they think has the expertise to provide the training that they’re sure will solve the problem … but because training wasn’t the answer to the organizational problem, the problem persists.”

It’s important to remember that training isn’t always the solution and that people learn in different ways. The best thing to do is either sit down with a training provider or internally spend time evaluating the best solutions moving forward.

Find solutions now, while planning for the future

Effective training that gets to the core of the problem starts with an analysis of what the issue is and having a sense of what you want to accomplish through training. A common mistake is assembling training for a particular reason but never defining the why and a quantifiable outcome.

An internal training department can outline the company’s objective, but you can always look to the experts at consulting firms, colleges and universities to do a needs assessment and align an educational plan with the results.

“Companies should look for vendors or trainers who will customize material and make it very relevant to them, not just taking the canned product,” Brooks says. “By having professionals come into the business and identify the business’s biggest issues — what are their toughest business issues — then trying to find what is the costs of those issues, it is a good way to calculate return on investment for that solution and then to close that gap through training intervention.”

External providers can offer objective advice to what your company’s priorities should be when it comes to training and carryout implementation. And while you may be thinking short term in this economy, a long-term plan is essential to be a step ahead of your competition and execute successful training.

The best ways to assure you’re meeting your company’s needs and spending your money wisely are to link training to your strategic plan and your performance management system — each job description and employee annual review. That guarantees a regular evaluation of your training program and your employees’ skills, and if you’re working with a provider, it keeps them abreast of your company’s future plans, which can lead to identifying problems and solutions earlier and faster.


Determine training that suits you and your budget

There’s a plethora of external sources to partner with, whether it be sending administrators to pursue master’s degrees or training employees on communication techniques. Colleges and universities tend to be the best bang for the buck, offering a one-stop shop with consulting, full implementation and a broad range of courses.

When it comes to training, the costs that add up are flying in topic experts, sending employees to out-of-town conferences or even holding training off-site. If you’re hoping to trim your training budget — and it seems many are — then think locally. Look at the office training and online services offered by local community colleges and universities.

Tough times call for creativity. Think about internal and external resources that lend themselves to free training. Check professional associations for round tables and seminars. Survey your employees on their areas of expertise and hold brown-bag lunches on those topics. If you’re bringing training in-house, just make sure you’re using a variety of techniques to meet each employee’s learning styles.

And look for funding sources — federal, state and local organizations offer training grants, whether it’s the U.S. Department of Labor or one of your local economic development corporations.

“We often encourage companies in communities to consider training consortiums, meaning they will come together and fund a training course,” Brooks says.

If you’re thinking about dramatically cutting your budget, first think about why you have training in the first place: to improve your retention, customer satisfaction, corporate culture and the overall growth of the company.

“The only thing that can actually increase in value with minimal investment, all things considered, are the people that work for an organization,” Beeson says. “That’s why (education) should be done, no matter how challenging the times.”

Thursday, 25 June 2009 20:00

Talk ain’t cheap

Marcie Zlotnik co-founded StarTex Power in 2004, so she knows the company well, and stepping aside to give her growing employee base a say has been a struggle.

“It’s a lot easier for me to go up to them and say, ‘Well, why don’t we do this?’” Zlotnik says. “That’s not how you build a company.”

As the electricity provider that she founded with her husband, Robert, has grown to 82 employees and revenue of $136.7 million in fiscal 2008, Zlotnik has improved the company culture and delegated responsibilities simply by asking employees more questions. To empower employees, StarTex had a feedback program called Block and Tackle, in which employees could recommend ideas to save time and make money.

Zlotnik says empowerment starts with encouraging discussion, listening to employees’ ideas and making sure they understand what it is you’re trying to communicate. And that, she says, can be as simple as asking them, “Hey, what should we do this month?”

Smart Business spoke with Zlotnik about how to empower employees through conversation.

Encourage discussion. You have to listen and promote discussion and encourage dialogue to empower employees. You’ve got to listen to what they’re saying. If your answer is always no, you’ll never get any ideas brought to you or any suggestions.

I have a rule with people. Just because I said no to you the first time, if you really believe strongly in something, go back, regroup your thoughts, put something else together and bring it back to me.

Don’t come back to me with exactly the same thing, but if you think you could have presented it differently, then try again.

Be visible. Make yourself available. I don’t think it is at your desk. Who is going to walk into the chairman’s office and say, ‘Hey, I want to talk.’ It’s not going to happen.

But we’ve had bowling alley parties, we’ve had putt-putt tournaments. That’s where you develop the rapport with employees.

My office is right in the middle of the office, and I make sure whenever I leave the office, I go one way and I come back the other way so I have an opportunity to walk by everybody’s office and desk, and I try very hard to stop and say something to someone.

It’s amazing what they’ll tell you in their environment, not yours.

Meet them on their level in an environment that they’re comfortable in, which is at their desk. Any time I say to someone, ‘Can you come into my office?’ the red flags go up. That is never a good sign, even though many times it is.

Talk to somebody. Talk to them when you see them walking down the hall.

I want to go up and ask them something that is poignant to what they’re doing. For example, customer service: ‘What have you seen today in calls?’ It’s personal. It’s not just, ‘Have a great day.’

Know what your employees do to help you better understand what they’re saying. You listen by understanding what they do. I believe that aside from a couple of the jobs in the office — I can’t program a computer — I could do most of the jobs at the company, and people understand that, so they’re comfortable talking to me about a problem.

You have to really know your business to be able to listen to criticism about the business because you realize then it’s constructive, not destructive.

Go and actually perform those jobs for a day and sit. For example, if you were to be at my office, most employees … have to sit in customer service for at least a day and listen.

They don’t have to answer the calls, but they have to sit and listen all day to what the customers think before they go into their job.

We’ve brought on two new senior VPs, and that’s where they start. The successful senior VPs have been the ones who have literally said, ‘OK, that’s great, but how did you get this? Where did you come up with this?’ Not, ‘OK, this looks like it reconciles.’

Make sure employees understand what you’re trying to communicate. You ask them — instead of saying, ‘So what did you think?’ because the answer is, ‘Oh yeah, I agree with you,’ — ‘Before you walk away, Suzie, what is your gut feeling? How do you think you’re going to implement this?’ Or you ask such open-ended questions as, ‘How would you apply what I just said?’

You can’t leave having done all the talking. You can learn Excel, but until you really do some Excel worksheets, you really can’t learn it. You can read all you want in the books, but you’ve got to go through two or three days of doing it to really learn it.

So if I’m doing and explaining how better to deal with customers, well, that’s great, but let’s put it in place, let’s have a role-playing between two employees.

We do a lot of training: ‘Hey everybody, come in, and in a particular area, let’s go through this example live. How would you do this? What do you think went wrong here?’ [That’s] rather than an e-mail: ‘Dear so and so, next time you need to do this.’

I like most learning environments to be question and answer, and I like for me to do most of the question asking. ‘Well, how would you handle that situation? What do you think could have been done differently?’

I think all of us have that school mentality of there’s only so much you can listen to; you’ve got to be able to do something creative with it.

How to reach: StarTex Power, (713) 357-2800 or www.startexpower.com