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Have you read the ancient Indian story about the elephant and the six men? The story holds an important lesson for organizations.

In the story, six friends blindfold themselves and play a game where they try to identify objects they come across. As they venture out, they come across an elephant. As the story goes, none of them had seen an elephant before. Each one of them proceeds to feel different parts of the elephant.

After careful analysis, the first man declares the object is a large drum. He was touching the elephant’s stomach. The second man objects vociferously. It is a rope, he asserts as he feels the tail. The others vigorously forward their assessments: the trunk of a tree, a fan or a curved stick.

Finally, when they cannot agree on their assessments, they take off their blindfolds to discover that the object they were envisioning and the real object are starkly different. While their individual assessments were based on valid information gathering and analysis, they realize they could not have been more wrong.

Different points of view

The different teams and departments in a company more often than not act like the six blindfolded men. They view the company and the issues it faces from their distinct perspectives, which leads to different assessments of what is important or what is urgent and, unfortunately, sometimes a lack of respect for the viewpoints and capabilities of the other teams.

For instance, in many companies, sales and operations departments do not share a high opinion of each other. The operations team may feel the sales team makes unrealistic promises to customers. The sales team, on the other hand, may feel the operations team is unable to deliver the quality and timely performance necessary to thrive in the marketplace.

The issues exist at all touch points and involve all the teams. While teams have their heart in the right place and want to contribute, they are caught up in their way of thinking and fail to see the big picture. Their hard-nosed assessments do more harm than good.

Re-engineering and realigning perspectives

As a leader, you must recognize the severity of the problem and address the issue diligently. Ensuring that your teams develop a broader perspective and solve problems from a company perspective rather than a departmental perspective is a crucial component of your job.

Changing the perspectives of successful departmental leaders who have a good measure of self-esteem (read it as ego) is an excruciating task. To encourage a company perspective, invest heavily in cross-functional, companywide initiatives. For instance, develop, crystallize and propagate a detailed and meaningful mission to unite the teams. A strong mission would serve as a higher purpose than individual departmental interests and concerns.

Emphasize improvement and performance themes that are cross-functional in nature and scope. Hoping that the teams will just rally around companywide goals is not a good strategy. Generate a vigorous discussion with all the teams present so they can appreciate the goals and develop joint ways of achieving them.

For example, achieving revenue goals cannot be the sole responsibility of the sales department. If it is perceived that way, the probability of success is lower.

Similarly, efficiency cannot be a goal of the operations team alone. All the other teams, from sales to customer service, HR, IT and accounting have to understand and respect the value of operational efficiency and provide their full support, ideas and active cooperation and contribution.

Help your team members recognize and appreciate the elephant so they are not lost in their individual parts. ?

Quoted in The Wall Street Journal, Barron’s and WorldNews, Ravi Kathuria is a recognized thought leader. Featured on the “BusinessMakers” show, CBS Radio, and “Nightly Business Report,” he is the author of the highly acclaimed book, “How Cohesive is Your Company?: A Leadership Parable.” Kathuria is the president of Cohegic Corporation, a management consulting, executive and sales coaching firm, and president of the Houston Strategy Forum. Reach him at (281) 403-0250 or feedback@cohegic.com.

One of the biggest differences between running a business on the side and quitting your job to run it full time is that you lose the security of a steady paycheck. That loss of income and the uncertainty as to whether it will ever come back is enough to make anyone pause and reconsider quitting their day job.

But what if your part-time venture is beginning to pick up steam, and you earnestly believe that it needs your full, undivided attention? While it can be scary, there are steps you can take to make such a leap less daunting.

Get organized

When you begin your business in earnest, take time to reduce your clutter. Working out of a messy office will eat much more time than it takes to get everything organized.

Speaking of time, making the transition to full-time business owner means also becoming much more self-motivated and coordinated. There is no one to remind you to clock in or to hound you about being late.

It’s great to go about the day without being micromanaged, but be careful. It’s just as easy to slip into a state of complacency. Organize your space, set a schedule and stay disciplined.

Protect yourself

There is always going to be some element of risk involved in whatever you decide to do next. But there are also actions that a new full-time business owner can take to reduce some of that risk.

As a part-time owner, chances are high that your business is a sole proprietorship — sort of the default business structure. Unfortunately, that means that you are responsible for your business’s debts, and if things go south, debt collectors may start trying to take your personal assets to pay for those business debts.

When you jump to full-time, consider forming an LLC or S corporation. There are different advantages and disadvantages to these structures, but they will help protect your personal property by separating you and your business’s debts.

Make saving a priority

Take full advantage of that steady paycheck for as long as you have it and save. Anyone looking to branch out and start a business has to use every cost-cutting measure out there so they have breathing room when trying to get their new business to turn a profit. Advisers typically recommend having enough saved up to pay for four to six months of living expenses. Luckily, if a business is being run part-time, it may be pulling in money already.

There is no magic number for saving — it just needs to be enough so that you don’t have to dig for change to pay your electric bill. Meet with an accountant, crunch the numbers and make sure you’re comfortable with the recommendations they give on budgeting and working with your financial situation.

Part-time owners know their company can draw customers, sell a product or service and bring in money since it has already been doing just that. This insight makes it very tempting to throw caution to the wind and jump into full-time ownership without making the necessary preparations.

But don’t take a huge leap without ensuring your fall is cushioned. Take your time, get everything in order, protect your assets and meet with an accountant to solidify a plan. Next, take a deep breath and put in your two weeks’ notice — you’re now a full-time business owner.

Deborah Sweeney is the CEO of MyCorporation. Find her online at mycorporation.com and on Twitter @deborahsweeney and @mycorporation.

Business owners have exposure to financial fraud for all payment methods.

In 2011, 66 percent of businesses faced attempted fraud, according to a survey by the Association for Financial Professionals. Although three-quarters didn’t have losses, the remainder had an average loss of $19,200, which can be devastating to small or middle market companies.

“This tells us that business clients in particular need to take measures to prevent fraud — whether it’s internal or external,” says Kacy Karl Owsley, senior vice president and treasury management sales manager at Cadence Bank. “Businesses should work with a financial institution that can offer solutions and best practice recommendations to help them mitigate theft.”

Smart Business spoke with Owsley about fraud risks and preventative measures businesses can take to avoid being a victim.

Describe today’s fraud landscape?

Sophisticated database technology, online information exchange and mobile access devices make payment fraud a global issue that can be completed anywhere. Checks, despite their declining use, continue to be the leading target for paper and electronic fraud, primarily because each contains relevant financial information — account and routing numbers.

A business only has 24 hours to dispute an electronic transaction after the debit hits its account or funds might not be recovered. Fraud often is directed at business accounts for the larger available balances and transaction volume.

What solutions can banks provide?

Among the products banks offer to protect accounts from electronic or paper fraud is business online banking, which allows accounts to be viewed daily to ensure only intended debit and credit transactions are made.

Positive pay operates as a fraud prevention system, allowing businesses to export check registers so the bank can match checks through an item-processing network or at the teller line. If there’s a problem, the bank alerts the business, usually via mobile device, and the employer decides to pay or return the item.

Automated Clearing House (ACH) positive pay or block works much the same way to prevent electronic fraud. Business owners can set up approved vendors that are automatically paid, as well as maximum dollar filters. Other transactions generate an alert, so employers can make a quick decision within the 24-hour window.

Businesses can utilize credit cards to eliminate sharing bank account information. Cards have cash rebates and point systems, and allow for integration to post to an accounting system.

Through lockbox services, businesses can accept payments directly at their bank rather than at their business location. Banks can manage payment processing, data entry and deposit preparation, and help prevent internal fraud by segregating these duties.

Finally, with account reconciliation services, banks assist in payment reconciliation to ensure timeliness and swift detection of suspicious activity.

What internal controls or preventative measures should a business implement?

A bank’s treasury management team can consult with clients on financial transaction best practices. Some suggestions are:

• Separation of duties for those creating versus signing checks.

• Having a dual control process for vendor acceptance or setup, as well as any financial transactions.

• Ensuring financial transactions are done on a dedicated computer.

• Downloading a software application like Trusteer Rapport™, which many financial institutions offer free of charge. It’s an additional layer of malware or anti-virus monitoring that notifies the bank and business when a PC downloads a virus. And the bank can instantly disable the user login.

• Knowing your employees by doing background checks, and pursuing any unusual behaviors or transactions.

• Setting up tight policies around email and Internet usage. Also, keeping anti-virus software up to date.

• Hiring an external firm to run a mock attack to test anti-fraud measures to ensure they cannot easily be broken.

• Conducting an annual audit, review or compilation.

Kacy Karl Owsley is a senior vice president and treasury management sales manager at Cadence Bank. Reach her at (713) 871-3917 or kacy.owsley@cadencebank.com

Insights Banking & Finance is brought to you by Cadence Bank

 

In August 2012, the Securities and Exchange Commission (SEC) issued a final rule regarding the conflict minerals disclosures mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Act). Public companies will be required to disclose whether they use conflict minerals such as tantalum, tin, tungsten and gold in their manufactured products — and whether the minerals originated from one of the “covered countries” defined by the Act.

“This rule could be very broad reaching, with the SEC estimating approximately 6,000 issuers will be required to provide new disclosures under the rule. Many private companies may also be impacted,” says Dale Jensen, partner-in-charge of Weaver’s SEC practice.

Smart Business spoke with Jensen about how to prepare for compliance.

Why do companies need to be concerned with supply chains now?

Hundreds of products contain conflict minerals, from cell phones and laptop computers to jewelry, golf clubs, drill bits and hearing aids. The SEC estimates that thousands of public companies will have to provide the new disclosures, and many private companies that are part of the impacted public companies’ supply chains may also be affected. Additionally, they estimate the initial compliance costs to be $3 to $4 billion, with subsequent costs of more than $200 million annually.

Who is impacted by this new rule?

Public companies, foreign private issuers, emerging growth companies and smaller companies must all comply. Packaging essential to the product’s function, such as a tin can, is also covered, but materials purchased or inventoried before Jan. 31, 2013, should be outside the rule’s scope.

Retailers are not required to report on products bought or resold, only manufactured or contracted to manufacture. When contracting, the retailer’s degree of influence determines compliance, though it doesn’t need to be substantial.

What’s involved with complying?

First, a company should determine whether any products it manufactures or contracts to be manufactured contain conflict minerals necessary to functionality or production. If the minerals are necessary, but they didn’t come from covered countries or are from scrap or recycled sources, the company’s inquiry method and conclusion has to be annually disclosed on SEC Form SD. This information must also be posted on the company’s website.

However, if there’s reason to believe the minerals originated from covered countries, their origin is unknown, or they may not be from scrap or recycled sources, the company must perform due diligence on the source and chain of custody of the minerals.

After due diligence, if the issuer determines that its conflict minerals are from a covered country and not from scrap or recycled sources, the company will be required to file a Conflict Minerals Report as an exhibit to Form SD. An independent audit of the Conflict Minerals Report is required. The SEC estimates that 75 percent of companies subject to the Act will need to develop a Conflict Minerals Report and have it audited.

What is the timing for compliance?

The first filing isn’t due until May 2014 for the 2013 calendar year, but complying may require substantial preparation for public companies. Companies will also need to file a new Form SD annually by May 31.

What are some next steps for companies?

Management must determine whether the new rule impacts the company, prepare cost estimates for compliance and put a plan in place. Companies should identify products that may contain conflict minerals as soon as possible, keeping in mind that they must comply even if the product contains only small traces of a mineral. Companies should be prepared to report results on a product-by-product basis. Finally, they should work with advisers to develop policies and procedures for supply chain vetting, filing Form SD, and if needed, conducting due diligence and preparing and auditing Conflict Minerals Reports.

Dale Jensen, CPA, CFE, is partner-in-charge, SEC Practice, at Weaver. Reach him at (972) 448-9283 or Dale.Jensen@WeaverLLP.com.

Blog: To stay current on audit, tax and advisory issues that may impact your business, visit Weaver’s blog.

Insights Accounting is brought to you by Weaver

 

Decent bosses typically try to lead by example. As a leader, you must model appropriate behavior to promote the greater good and to send a constant message with teeth in it.

The French term “esprit de corps” is used to express a sense of unity, common interest and purpose, as developed among associates in a task, cause or enterprise. Sports teams and the military adopt the sometimes-overused cliché, “One for all and all for one.” “Semper Fi” is the Marine Corps’ motto for “always faithful.” We commonly hear, “We’re only as strong as our weakest link.”

However, the real test of team-building and motivational sayings is that they are good only when they move from an HR/PR catchphrase to a way of doing business — every day.

As soon as you put two or more people in the same room, a whole new set of factors comes into play, including jealousy, illogical pettiness and one-upmanship, all of which can lead to conflicts that obstruct the goals at hand. Certainly, much of this is caused by runaway egos. Perhaps a little bit of it is biological, but most of it is fueled by poor leadership. Everyone has his or her own objective and it’s the boss’s responsibility to know how to funnel diverse personal goals in order to keep everyone on track. This prevents employees from straying from the target and helps avoid major derailments. Essentially, it all gets down to the boss leading by example with a firm hand, understanding people’s motives and a lot of practicing “Do as I say and as I really do myself.”

Communicating by one’s actions can be very powerful. A good method to set the right tone is stepping in and lending a hand, sometimes in unexpected and dramatic ways. This shows the team that you govern yourself as you expect each of them to govern their own behavior. In my enterprises, I constantly tell my colleagues that the title following each person’s name boils down to these three critical words: “Whatever it takes.” Certainly, I bestow prefixes to this one-size-fits-all, three-word title, such as vice president or manager, but I consider these as window dressing only.

After speeches, when I explain this universal job description, I always get questions from the audience about how I communicate this concept. I follow with a real-life experience that played out in the first few months after I started OfficeMax. As a new company, we had precious, little money, never enough time and only so much energy, which we preserved as our most valuable assets in order to be able to continually fight another day.

In those early days, too frequently, I would see what looked like a plumber come into the office, go into the restroom and emerge a few minutes later presenting what I surmised to be a bill to our controller. I knew whatever he was doing was costing us money and probably not building value. The third time he showed up, in as many weeks, I immediately followed him into the restroom (much to his shock and consternation). I asked him what in the world kept bringing him back. He then proceeded to remove the john’s lid and give me a tutorial on how to bend the float ball for it to function properly. That was the last time anyone ever saw this earnest workman on our premises. Instead, after making known my newly acquired skill, whenever the toilet stopped working, I became the go-to guy.

This became an object lesson to my team about how to save money. At that time, 50 bucks a pop was a fortune to us. It got down to people knowing that all of us in this nascent start-up were expected to live up to their real, three-word title. This was our version of how to build esprit de corps. Others began boastfully relaying their own unique “whatever it takes” actions, and it became our way of doing business.

The lesson I learned in those early days was that it wasn’t always what I said that was important but rather what I did that made an indelible impression. A leader’s actions, with emphasis on the occasionally unorthodox to make them memorable, are the ingredients that contribute to molding a company’s culture.

Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at mfeuer@max-wellness.com.

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This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.

Beating the competition is never easy. That’s why it requires a benevolent dictator.

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Also available wherever books and eBooks are sold, and from Smart Business Magazine and www.SBNOnline.com. Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.

Steve Jobs was the master of spotting trends and the opportunities that go with them. He was so good at it that he could see trends when they were still in their infancy. This allowed him to create products that kept his company at the front of the waves of change and ultimately drove massive profits and stock growth for Apple.

While not many people possess the uncanny sixth sense that Jobs had, it’s important to spend time studying your industry and what’s happening at various levels, from customers to suppliers to competitors.

You need to recognize when the trend is pushing positive growth and when it’s not. The additional challenge is to know the difference between a trend and a fad. A trend is more long-lived and drives a lot of long-term opportunity, while a fad tends to burn out quickly. This isn’t to say that trends last forever, because they don’t. An important part of studying trends is to know when to jump off the wagon and find the next opportunity, because if you ride a trend too far, you may find yourself in a rapidly declining industry or an area of waning interest.

For example, Y2K was a fad. For those who don’t remember, the Y2K boom was caused by old computers that only saw years as two digits instead of four, and widespread computer issues were predicted if systems weren’t upgraded. A giant boom in computer consulting and sales resulted from this issue, but it was short-lived. The moment 2000 rolled around, the need for Y2K upgrades dried up.

The dot-com boom, which was partly fueled by Y2K, was a trend. For a number of years, a ridiculous amount of money was being thrown at any project that contained the word “Internet,” regardless of its business model or competitive factors. While it was active, there were plenty of online growth opportunities for businesses to take advantage of.

Those who recognized the trend were able to capitalize on it, and more importantly, those who recognized the end of the trend were able to cash out before it went bust. Not every trend will be as big as the dot-com boom, and depending on your industry, they may not be so obvious.

Finding and recognizing trends starts with studying your industry. You need to stay in tune with what’s happening with competitors and constantly read about not only your industry but related ones as well. Talk to suppliers and vendors to get their opinions as to what direction your markets may be headed. But the most important thing may be to have an open mind. Don’t assume that because something hasn’t changed for 20 years that it isn’t ever going to change.

With an open mind, you are more likely to recognize an emerging trend before everyone else has rushed to capitalize on it, putting you ahead of the curve. Once you are exploiting a trend, you have to be equally diligent to know when it’s going to end, and that’s done in a similar fashion to identifying it in the first place: Stay plugged in to your industry.

These are exciting times and change is all around us. Look for the hidden clues that can lead you to the next big opportunity, and never stop challenging your own beliefs. The CEOs who do the best over time are the ones who don’t accept the status quo.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or fkoury@sbnonline.com.

Wednesday, 27 February 2013 14:37

The evolving impact of health care reform

Written by

When the Supreme Court upheld the Patient Protection & Accountable Care Act (ACA) last year, the implementation of sweeping changes that will result from health care reform kicked into high gear.  With many ACA provisions taking effect in 2013 and 2014, businesses and individuals can now better understand the impact of the law.

Access to care

ACA includes several new avenues for individuals to access care, including expansion of state Medicaid plans, incentives for employers to offer health care coverage and access to insurance exchanges for individuals who do not qualify for Medicaid and are not covered at work.

ACA removes the ability for insurers to deny coverage due to pre-existing conditions but also requires all individuals to have coverage or face a penalty.

Business impact

The most significant impact for businesses is the requirement to provide employer-sponsored health coverage or pay a penalty.  In general, starting in 2014, any business with more than 50 full-time employees is required to offer affordable health coverage that meets minimum coverage criteria.  If a business does not offer coverage, or offers coverage that is not affordable, the penalties would be as follows:

  • If a business does not offer coverage, the annual penalty is $2,000 per employee in excess of 30.  (That is, if a business has 100 employees, the penalty would be 70 x $2,000, or $140,000.)
  • If a business offers coverage that is deemed unaffordable, the penalty is $3,000 for each employee who receives a premium credit to access care through an insurance exchange.

As businesses prepare for these changes, they should determine which full-time employees must be offered coverage, ensure that premiums charged to employees are low enough to be affordable and be sure benefits offered under the plan meet ACA minimum requirements.

While small employers are exempted from many of these provisions, they are encouraged to offer coverage in exchange for a health insurance premium credit.  In general, employers with 25 or fewer full-time employees whose average pay is less than $50,000 can receive a credit of up to 50 percent of health insurance premium paid, as long as they pay at least 50 percent of the cost of the single premium for their employees. 

Impact on patient care

While most ACA provisions do not directly impact an individual’s health care choices, many patients will notice changes in the way doctors and hospitals deliver care.  For many years, most payments to providers have been based on the volume of services provided.  ACA creates a significant focus on quality of patient care and outcomes, rewarding or penalizing providers based on these factors.  These changes are driving hospitals, physicians and insurers to align so they can better manage the care of a patient population, via organizations called Accountable Care Organizations (ACO).

The goal of an ACO is to reduce the cost of patient care by managing the way care is provided, mainly by ensuring it is provided in the right setting.  ACOs often include patient navigators or gatekeepers that help patients access the right type of care, ensure that chronic conditions are treated appropriately and coordinate care from different providers to limit duplication of services.

Patients participating in an ACO can expect more direct contact from caregivers and will be asked to take ownership of their health care outcomes.  Employers may be asked to offer more wellness benefits and encourage healthy habits to aid in the success of an ACO.

Paying for ACA

ACA’s $940 billion cost is paid for through several means, including payment reductions to providers and increased taxes.

Tax provisions include numerous business taxes, such as excise taxes on high-cost health plans and medical device manufacturers, annual fees paid by insurance and pharmaceutical companies and limitations on certain corporate income tax deductions.

For individuals, taxes include a 0.9 percent Medicare tax on earned income in excess of $250,000 for joint returns ($200,000 for other filers) as well as a 3.8 percent Medicare tax on net investment income.  Other individual provisions include:

  • If an individual does not purchase the minimum level of coverage required by ACA, then a penalty equal to the greater of 1 percent of income or $95 applies in 2014.  This increases to 2 percent or $325 in 2015 and then 2.5 percent or $695 in 2016 and after.  The ACA includes premium assistance credits that can be used to offset this cost for qualifying taxpayers.
  • Pre-tax contributions to a health flexible spending account will be limited to $2,500 per year.
  • The threshold for deducting medical expenses as an itemized deduction was increased from 7.5 percent to 10 percent of adjusted gross income.

Conclusion

Although most of these provisions will be effective in just nine months, there are many details yet to be finalized.  For example, most state and federal insurance exchanges are not functional yet, so the manner in which individuals will enroll is not clear.

Also, while Medicaid expansion was a key component of ACA, it is voluntary on a state-by-state basis.  Certain states may elect not to expand Medicaid, which could impact patient access to care as well as the financial health of hospitals.  (Certain payments to hospitals are being reduced in anticipation of increased Medicaid volume.  If a state does not expand Medicaid, the payment cuts still occur.)

Businesses and individuals should closely monitor the final rollout of ACA and contact advisors to be sure they are making the right choices to limit the financial impact of these changes.

This information was written by Brad Monahan,  partner of BKD’s Houston practice. He can be reached at bmonahan@bkd.com or (713) 499-4600. Applying specific information to your situation requires careful consideration of facts and circumstances.  Consult your BKD advisor before acting on any matter covered here.

Article reprinted with permission from BKD, LLP, bkd.com.  All rights reserved.

 

 

Niloufar Molavi is now facing a challenge that she hadn’t seen in her years with PricewaterhouseCoopers LLP — acquiring and retaining talent for the accounting firm in the light of fierce competition. The complicating factor is that thanks to a heavy presence of energy companies, young talent in the Houston area is in high demand and supplies are low.

Molavi, Houston market managing partner for PwC, is realizing that you have to pull out all the stops to have an edge over the competition.

It’s no secret that PricewaterhouseCoopers over the years has developed comprehensive internship and management development programs that attract desirable young talent. Molavi is betting on those programs to make a difference.

“The average age of our workforce is 27 — so that will give you a sense of how much we rely on and focus on young talent such as college interns,” Molavi says.

“The students like to have an experience while they are in college, and they really don’t know what to expect ultimately when they come out of school, so we just give them that glimpse,” she says.

But more importantly, the interns will get to know PwC, which hopefully will lead to their choice of PwC for employment.

“It has been a great tool for us to not only recruit but they will see what it is like before they have to make a decision that will have an impact on their long-term careers,” Molavi says.

Here is how Molavi uses internship and management programs at the Houston location of PricewaterhouseCoopers to help fill the 1,069 seats at the table and keep those seats occupied.

Look and listen

The practice of finding and hiring qualified job candidates has grown more sophisticated for most companies in recent years. Such was the case of PwC some years ago when it started its internship program, now a well-entrenched fixture.

With the competition to secure talented individuals, it is essential to look for the skills that clients are demanding.

“It’s important to sit back and make sure that you have identified not only the technical skills in people you hire but, more importantly, the soft skills or the intangible skills that you are looking for in people,” Molavi says. “Identify what those are, and recognize over time those change — just because we know today what we are looking for may change over time. We live in an ever-changing environment, and you need to revisit that as often as you can to ensure that those intangibles haven’t changed.”

Once you sound out your clients, you’ll have a better opportunity to know what will best match their needs.

“The most important thing is listening,” Molavi says. “Spend a lot of time with your clients to make sure that you are listening to their issues, issues that are important to them, issues that they are dealing with, challenges and opportunities that are at the forefront of their minds.”

There are several key qualities that should be “must haves” on the intangible resume of an internship seeker.

“Adaptability — someone who’s willing to come in and adapt to new opportunities and a new environment,” Molavi says. “It’s someone who comes with flexibility of different ways of doing things.”

Equally as important is the attitude that learning is a dynamic procedure that lasts an entire career.

“Another important element is the ability and the desire to continue to relearn; when you are in an environment that’s changing all the time, you need to be comfortable that you are always learning, and it doesn’t really matter what level in the organization you’re at,” Molavi says.

If the desire to learn is kept burning, it can help establish a long-term interest in a particular field. The possibilities of advancement are many.

“Even as a leader, you can continue to have opportunities to learn new things every day,” she says. “For me, that’s exciting. That’s really what’s kept me in the industry and at PwC.”

Find the right fit

It’s been said that in the military as well as other sectors, the age group of 18 to the mid-20s make the best soldiers or workers if properly trained. And those who are even more well-trained do even better.

While the business world can’t really compare its stresses to those of the military, the advantages of young recruits are unmistakable — and similar in both fields.

“Our clients are always interested in our talent because we bring in the young; we help develop them,” Molavi says. “Our talent gets to see a lot of different opportunities and things and they learn pretty quickly on the job because of the exposure they get to our clients. So they are in high demand in the market. And we know that; that has been something we’ve been dealing with for years.”

With a focus on young talent, new entry-level candidates coming right off the college campus, it’s critical to look at their abilities and what they’ve learned on campus and their technical skills.

“First of all, try to find the right fit for the organization,” Molavi says. “At that entry level, spend quite a bit of time not only in the interview process on campus but spend time with those individuals over a two- or three-week period to get to know them and build that relationship — and then offer the best ones an internship.”

A typical internship lasts 10 to 12 weeks. It’s an opportunity to get to know the interns and see how they can work in the environment — and is a great opportunity for them as well to see what opportunities they may have.

“Look at a lot of those intangible qualities in individuals,” Molavi says. “Teamwork is huge for us. We work in teams. We do not do anything alone. So watching the interns work in teams and how they perform is important. Relationships are very important, both within our organization as well as with our clients, and watching how they develop those relationships and their abilities to learn in that area is essential.”

An internship is also a type of probationary period. It’s time to spot any red flags.

“I have had at least one person who interned with us, and at the end of the internship, she and I sat down together — she realized that accounting wasn’t for her and had never really been her passion,” Molavi says. “She had made certain decisions to go into the accounting field, and although she did a great job, she decided that her passion was somewhere else.”

Remember that interns are still students. Most will still have another year of college to finish.

“Internships happen generally right after their junior year for most individuals, so we don’t expect them to come in and know everything,” Molavi says. “We are not testing them on the technical knowledge that they are bringing to the table on day one, but you want to really look for those qualities for a good fit. Then put them on jobs that you would as brand-new associates so they get to experience what it’s like when they join as a full-time hire.”

One of the more important steps any organization needs to consider when you bring in interns is if you will have the opportunities for them to learn and develop in that short period of time.

“If they come in and they are not getting those opportunities, then it is going to be difficult,” Molavi says. “I think any business needs to look at how it is structured and what opportunities it can offer to an intern.

“I know that many of my clients even use internships to give students a sneak peek of an industry by bringing them in over a summer period and rotating them through various parts of their organization.”

Focus on the basics

It’s a serious undertaking for an organization to operate an effective internship program. But it doesn’t have to be expensive. PricewaterhouseCoopers’ program, while a significant commitment for the company, looks at it more as on-the-job training.

“On-the-job learning and development is really important,” Molavi says. “We do that quite a bit, and it’s easy too. I mean it doesn’t cost you a lot of money; you’ve just got to make sure that you are paying attention to it.

“You take the opportunity as you would a project — you stop and make sure that your team understands what you’re doing, why you are doing it, why it is important to your client, what they are going to learn from it so that it doesn’t just become a task; rather, it becomes a learning opportunity.”

As you develop your training programs over the months and years, design as much on-the-job training into it as possible, and it will help pay dividends.

“When we look at our training programs, about 70 percent of it is actually on-the-job training — every day on projects, at clients, real-time feedback and learning,” Molavi says.

PwC’s program has evolved over time to its current configuration: Each intern is mentored by three colleagues.

“One, they will have a buddy,” Molavi says. “They will have an associate who is closer to age and in experience to them, someone they can go to from day one with any questions they may have. They could be administrative, technical or industry questions. The buddy is someone with whom they can engage on a day-to-day basis.”

In addition to a buddy, each intern has a mentor who is a manager/coach.

“The manager ensures that they are getting the experiences, the exposure, the developmental opportunities,” she says. “The managers are responsible for their assignments during that period and help the interns through that.”

The last is a mentor who will nurture what are often called soft skills.

“The interns also get a relationship partner so they will actually have a mentor who will be engaging with them and spending the time to talk about opportunities in the profession, and more importantly for our interns, the opportunities at PwC that they will have in the long term,” Molavi says.

“The program involves quite a bit of investment but again it has become a very important source for our full-time hiring, and we believe the investment ultimately pays off both for us and the recruits.”

Another aspect of an internship program is shadowing. Interns are given the opportunity to shadow a partner for one day to get a glimpse into a day of a partner’s life.

“Because they see us in bits and pieces, the interns probably don’t really realize everything in which a partner may be involved,” she says.

“One of my interns a couple of years ago had the opportunity to shadow me,” Molavi says. “She had a fantastic experience. It just happened to be one of those days where I was doing a lot of different things. We started off the day when I was actually in a coaching session with one of my ‘coachees,’ and moved on to an interview that I was doing that day with a publication. She got to sit in on that.

“We went to lunch with a client. We had a client meeting that she attended with me. Then we came back and dealt with some of my internal roles.

“She was just amazed at what I touch in one day and saw things that she would be very interested in down the road. So hopefully those kinds of looks give the interns a little bit more in terms of what a day could be as they go through a shadowing process.”

Develop new leaders

If your organization has made it a practice to have an internship program, it needs an employee advancement plan to get the most advantage of the intern program.

Tapping outside talent for management posts is not an easy process today, and it is beneficial to promote from within, not only to recognize that individual but to prepare in case a manager should leave. Talent that started as interns is an excellent source for management positions because of the familiarity with the company and work records that show advancement through the ranks.

For example, PwC uses a global leadership development program called Genesis Park for employees who are approaching some nine years of experience — a senior manager or director. This is a 10-week residential program for about 50 people, three times a year, which moves around the globe.

“You bring in individuals from around the world so every one of these 10-week residential programs is very global and very diverse,” Molavi says. “You are bringing people together who have never worked with each other — to work with each other.

“It takes individuals through what I call real-life experiences. This is not a situation where they’re going to role-play. It gives them the opportunities to work on real projects for either a particular territory, PwC territory or a global issue that our global leadership is dealing with.

“They’ll have the opportunity to work on that project and come back with solutions and thoughts. So they are really learning and having that experience of working with individuals they didn’t know before, bringing different talents together, putting their minds together and driving innovation to come up with solutions.”

Programs such as Genesis Park allow employees to not only continue to develop professionally but personally, as well, with leadership skills.

“My coachee who went through came back out in some ways a different person,” Molavi says. “The most important change that I noticed was the self-confidence that she gained from being part of that team and part of that opportunity, and knowing that, she exhibited an attitude, ‘Wow, I did this, and I was able to have a very different experience, and it felt good, and I learned a lot.’”

How to reach: PricewaterhouseCoopers, www.pwc.com or (713) 356-4000

 

The Molavi File

Niloufar Molavi

Houston market managing partner

PricewaterhouseCoopers LLP

Born: Tehran, Iran

Education: University of Texas at Austin, with both my bachelor’s in business administration and master’s in accounting

What was your first job?

My very first job that I got paid for was working during summer school at Houston Memorial High School, and I helped the staff in the office, running a lot of different errands.

What has been the best business advice you ever received?

To be willing to take risks. In terms of my career development, this has been the best advice that anyone could give me — the fact that someone took the time to sit me down and talk about the fact that unless you take risks, you’re not going to learn, you’re not going to develop, you’re not going to see new opportunities. You need to step out of your comfort zone and do it often.

When you become complacent and you’re getting comfortable with something, it’s time to do something different. So that is something that has certainly stuck with me. My sponsors early on pushed me and gave me those opportunities, opened those doors for me to step out of my comfort zone and do different things. It certainly has been very important to me, and I have seen it help me in my career and in the advice that I give others.

Who do you admire in the business world?

There are a lot of individuals who have accomplished great things, so maybe the way I would put it is not so much the individuals but those people who going back to what I was taught who had been authentic. They are not trying to be someone who they’re not. They are authentic leaders. They have at times put their necks out there and done something different that was not conventional, taking the risk, and then been successful at it.

Those are the people that I look to, those individuals who aren’t always going to be sitting at the top of organizations. They’re not necessarily going to be the CEOs but individuals who have had significant impact on success with an organization, for-profit or nonprofit as well.

What is your definition of business success?

For me, I think it is really simple: if you think about the success and the legacy that is behind, to be able to have clients who would say, ‘Well, she was our business partner and she was able to help us achieve our business goals.’ Being a tax practitioner, it is important to make sure that we are helping our clients achieve their goals. I think that would be to me a great legacy to leave behind if I could look back at the number of partners I have personally made so that they could be successful.

It’s an age-old debate: Is character determined by DNA or upbringing? Nature versus nurture? 

Most would argue that character evolves from both. What about companies and their cultures? Is a company’s culture merely a composite of the executives and employees who work there or can a culture be nurtured?

If left to chance, a corporate culture will evolve naturally, but stronger, healthier cultures are nurtured along the way. That doesn’t mean you can manufacture one. At its core, a culture is how a company gets things done. Executives can’t invent an ideal culture that doesn’t align with the way the company actually operates. However, you can help refine your company’s culture and character. Start with the following three steps.

Identify your company’s core values.

A strong company culture, good or bad, reflects the values of the company, its leaders and its employees. What values define your company? What matters most — profits, philanthropy, innovation, safety? If you don’t know, poll your employees. They will have a pragmatic perspective of how things get done.

Once you identify your company’s core values, prioritize the three to five values that are most important.  What do you want to be known for — quality, integrity, or just plain fun?  Keep in mind, this is not what you do; it’s how you do it.  An orthopedic surgeon may be skilled at fixing broken bones, but he gets referrals because of his genuine concern for patients.

Align your actions to your values.

It’s not enough to identify your company’s core values. You also have to walk the talk. Tiger Woods enjoyed a reputation for being a remarkable athlete with extraordinary discipline and sound ethics. However, when revelations of his extramarital affairs surfaced, his reputation was forever tarnished. He’s still considered a great golfer, but no one believes he’s the man he portrayed himself to be.

In the same way, you can’t promote your company as being fair and then challenge your partners at every turn. You’d be better off acknowledging that your company is aggressive. If you try to pass your company off as something it isn’t, you’ll ultimately damage trust with customers.

How can you help ensure that team members model your company’s values day after day? Institute practices that promote your values and the behaviors you want your employees to emulate.

Google, for example, is known for creativity, and its leaders practice what they preach. Google encourages developers to dedicate the equivalent of one day a week to innovative projects outside their job descriptions.

Engage your employees.

The most important, and perhaps the trickiest, piece to this puzzle is engaging employees. Jack Welch, former CEO of General Electric, once said, “The soft stuff is the hard stuff.” The touchy-feely, people side of business is often the most difficult for leaders to manage well, but it is critical to a company’s success. Employees who are satisfied and truly engaged in their work will perform at a higher level and contribute to greater success and higher profits.

Engaging employees is easier said than done (in fact, it’s never “done” — it requires continuous dedication and focus). There are, however, some practical tactics that can help.

For starters, communicate openly, include employees in the decision-making process whenever possible, and seek and provide continuous performance feedback. Show your employees that you care what they think and that you want them to succeed.

Can you nurture your company’s culture? Absolutely, but it has to emanate from your core values and employees have to model those values. The result will be engaged employees who reflect your culture because it’s simply how your company gets things done.

John Allen is president and COO of G&A Partners, a Texas-based HR and administrative services company that manages human resources, benefits, payroll, accounting and risk management for growing businesses.  For more information about the company, visit www.gnapartners.com.

 

 

 

Thursday, 28 February 2013 19:12

How to deal with counteroffers and when to make them

Written by

Though overall hiring is still sluggish, highly skilled candidates are still in demand and the counteroffer can be a factor in retaining them.

“Recently, because of the economic uncertainly, it’s a little bit harder for us to get candidates to change jobs,” says Michael Stanley, a recruiter at The Daniel Group. “They’re a little less willing to make a move if they are fairly comfortable in their current position.”

Conversely, many companies are willing to make a counteroffer to retain existing employees, often because it’s cheaper and easier than replacing them, he says.

Smart Business spoke with Stanley about using counteroffer strategies to acquire and retain employees.

What steps can you take to avoid losing a job candidate to a counteroffer?

You can’t prevent a counteroffer, but you can prepare candidates to expect one. Throughout the interview, when speaking with candidates currently employed elsewhere, gauge their likelihood of making a change by asking, ‘What would your current employer have to do to keep you?’ This shows where they stand and gives insight into what an acceptable counteroffer looks like.

Also, ask about their true motivation for leaving, which can be easier to find when working with a recruiter. Candidates are usually more guarded with future employers, whereas conversations with a recruiter are much more open. It’s also important to get a full picture of their current benefits and total compensation so you know how that aligns with your company’s offering.

Additionally, it’s absolutely imperative to stay in contact with candidates because they typically provide their employer with a two-week notice before leaving. Keep them engaged during this time to lower the chances of a successful counteroffer by their current employer. Have an itinerary of the onboarding process, such as when you’re sending an offer letter and paperwork and doing background checks. It’s also a good idea to have the job candidate’s future manager take him or her to lunch.

Once a job candidate tells you about a counteroffer, what should you do?

Ask a lot of questions, such as the nature of the offer and how likely they are to accept it. Open up the lines of communication. This is when you can leverage your initial conversation that uncovered their motivation for making a move. If the candidate said there was no room for advancement and the counteroffer gives a 10 percent raise, you can start putting holes in the offer by pointing out the disconnect.

What if you can’t give more compensation to counter the counteroffer? 

Use your knowledge of the candidate’s motivations, current benefits and compensation to tailor a nonmonetary incentive. Some examples are a flexible schedule, more vacation days or a guaranteed pay review after six months. An employee’s decision to leave is rarely based solely on compensation.

It’s important to know what the market is currently dictating for the open position and to not go outside of that range. If you overpay on the front end when hiring, you may not be able to provide expected raises down the road. A staffing firm, which is dialed in to compensation and benefits, can help with this.

If a current employee is leaving, should you make a counteroffer? 

If the reason the employee is leaving is easily addressed, it may make sense to make an offer. But ask yourself, ‘Is this something for which I could justifiably make a concession?’ You also might learn something, as the employee leaving is likely not the only one who feels that way. In such cases an organization-wide change could improve employee morale, such as using flexible scheduling to improve work-life balance.

However, counteroffers should be used sparingly as they can create a toxic workplace environment. If other employees find out someone was given more money to stay, they may resent management and could threaten to quit. Additionally, if underlying issues aren’t resolved, you have just postponed the inevitable and the employee may end up leaving anyway.

Michael Stanley is a recruiter at The Daniel Group. Reach him at (713) 932-9313 or mstanley@danielgroupus.com.

Insights Staffing is brought to you by The Daniel Group