Houston (992)

What would it take for a company to succeed if its leader could effectively do only one of the following: innovate, instigate or administrate? We all know that an innovator is the one who sees things that aren’t and asks why not? The instigator sees things that are and asks why? The administrator doesn’t necessarily ask profound questions but, instead, is dogged about crossing the “t’s,” dotting the “i’s” and making sure that whatever is supposed to happen happens.

Ideally, a top leader combines all three traits while being charismatic, intellectual, pragmatic and able to make decisions faster than a speeding bullet. Although some of us might fantasize that we are Superman or Superwoman, with a sense of exaggerated omnipotence, the bubble usually bursts when we’re confronted simultaneously with multiple situations that require the versatility of a Swiss army knife.

Business leaders come in all shapes and sizes with various skill sets and styles that are invaluable, depending on the priorities of a company at any given point in time.

Every business needs an innovator to differentiate the company. Without a unique something or other, there isn’t a compelling reason to exist. Once those special products or services that distinguish the business from others are discovered and in place, it takes an instigator to continuously re-examine and challenge every aspect of the business that leads to continued improvements, both functionally and economically. It also takes an administrator — someone who can keep all the balls in the air, ensuring that everyone in the organization is in sync and delivering the finished products as promised to keep customers coming back.

As politicians and pundits of all types have pounded into our heads in recent years, “It takes a village to raise a child.” All who practice the art and science of business have learned that, instead of a village, it takes a diverse team working together to make one plus one equal three.

On the ideal team, each member possesses different strengths, contributing to the greater good. The exceptional leader is best when he or she is an effective chef who knows how to mix the different skills together to create a winning recipe.

In many companies, however, leaders tend to surround themselves with clones who share similar abilities, interests and backgrounds. As an example, a manufacturer may have a management team comprised solely of engineers, or a marketing organization could have salespeople who came up through the ranks calling all the shots.

If everyone in an organization comes from the same mold, what tends to happen is, figuratively, one lies and the others swear to it. This builds to a crescendo of complacency and perpetual mediocrity.

There is a better way. Good leaders surround themselves with others who complement their capabilities, and savvy leaders select those with dramatically different backgrounds who will challenge their thinking because they’re not carbon copies of the boss. This opens new horizons, forges breakthroughs and leads to optimal daily performance.

Strange bedfellows can stimulate, nudge and keep each other moving toward the previously unexplored.

To have a sustainable and effective organization, you can’t have one type without all the others. While everyone on the team may not always agree, each player must always be committed to making the whole greater than the sum of the parts.

The single most important skill of the leader who has to pull all the pieces and parts together is to have the versatility of that Swiss army knife — selecting the precise tool to accomplish the objective at hand. ●

 

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. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at mfeuer@max-wellness.com.

More than 800 years ago, medieval philosopher Maimonides outlined eight levels of charity, the greatest of which was supporting an individual in such a way that he or she becomes independent. In Maimonides’ view, support was defined as a gift or loan, entering into a partnership or simply helping that person find employment.

Few things are more powerful than philanthropy — especially when its end goal is to better the lives of others. These days, philanthropy, and corporate philanthropy specifically, has assumed a broader role in society.

Today, companies give back more strategically than ever before. They align themselves with nonprofits that foster missions they believe in. The wealthiest people on the planet have even coordinated the Giving Pledge (www.givingpledge.org), where they’ve committed to dedicate the majority of their wealth to philanthropy.

At last count, more than 115 people had taken the pledge. Warren Buffett and Bill Gates may be the most prominent names on the list, but others include Spanx Founder Sara Blakely, Cavs Owner Dan Gilbert, Progressive’s Peter Lewis and Netflix Founder Reed Hastings.

Last month, one member, David Rubenstein, CEO and co-founder of The Carlyle Group, discussed the importance of philanthropy during a presentation at EY’s 2013 Strategic Growth Forum.

In his pledge letter, Rubenstein explains why: “I recognize to have any significant impact on an organization or cause, one must concentrate resources, and make transformative gifts — and to be involved in making certain those gifts actually transform in a positive way.”

One way Rubenstein is being transformative is through “Patriotic Philanthropy.” He has given $10 million to help restore President Thomas Jefferson’s Monticello home and underwrote renovations to the historic Washington Monument. Yet Rubenstein’s most noteworthy initiative is the whopping $23 million to acquire a rare copy of the Magna Carta, ensuring it remained in the United States. After its purchase, Rubenstein gifted it to the National Archives.

Not everyone has Rubenstein’s vast resources. But every organization and any individual can make their own impact.

In the workplace, for example, organizations that give back elevate their status perception-wise among competitors and peers. It doesn’t take much. But by being a company that cares, prospective employees want to work for you. For your existing team, deliberate and well-organized corporate philanthropy programs quickly take on a life of their own, becoming a rallying point.

Think strategically and get started by finding your cause. We all have them. They exist at our very core, forming the belief system we live by every day. So why shouldn’t our philanthropy follow that same course? Consider aligning your giving or volunteerism with something you personally believe in or care about; something that fits with what your company does or something that is close to your employees’ hearts.

Most important, get involved and just make a difference. It really comes down to that. One initiative that has always impressed me has been the annual CreateAthon event undertaken by WhiteSpace Creative, a member of the Pillar Award class of 2005. You can read a first-hand account of this year’s program here.

Being a good corporate citizen goes well beyond making good business sense. When you align yourself with causes you care about, whether big or small, you make a difference in someone’s life. And the bottom line is this: It is all of our duties to get involved. It’s no longer a question of if, but rather of what, when and how. ●

 

Dustin S. Klein is publisher and vice president of operations for Smart Business. Reach him at dsklein@sbnonline.com or (440) 250-7026.

In 2012, the energy sector spent $17.9 billion on global research and development, more than $6.6 billion of which was conducted in the U.S. Assuming small and midsize businesses perform 20 percent of the U.S. energy sector’s R&D, these companies could incur up to $1.3 billion in R&D expenditures, the benefits of which may not be fully realized because they underutilize the R&D tax credit, says Robert Henry, a partner in Tax and Strategic Business Services at Weaver.

In addition, the R&D tax credit represents a permanent tax benefit; it reduces the overall effective tax rate as presented in generally accepted accounting principles basis financial statements.

Smart Business spoke with Henry about new ways to utilize R&D tax credits.

What is the R&D credit?

The federal R&D tax credit is a mechanism to spur technological advances and hiring in R&D fields. It has expired and been extended multiple times, but has most recently been extended through 2013. With support in both political parties, it is likely to be continued.

In addition, many states offer R&D tax incentives in the form of state income, franchise, or sales and use tax credits and exemptions. Texas’s R&D credit will come back into law effective Jan. 1, 2014. Texas HB 800 provides a sales and use tax exemption or a franchise tax credit related to qualified R&D activities taking place within Texas. This will greatly increase the potential tax benefit available to taxpayers conducting their R&D within Texas.

How is qualifying R&D activity defined?

Internal Revenue Code section 174 describes research and experimental expenditures as activities intended to discover information that will eliminate uncertainty concerning the development or improvement of a product. The activity must:

  • Be related to the development or improvement of a product, inclusive of a technique, invention, formula or process.
  • Address uncertainty regarding the appropriate method or design for the product.

Activities deemed eligible by section 174 qualify for immediate tax deduction. They also may qualify under section 41, where they must:

  • Be technological in nature, based in hard sciences, such as geology or engineering.
  • Contain a sufficient degree of development uncertainty.
  • Contain the process of experimentation.
  • Have a permitted purpose that improves a business component, which includes a product, process, software, technique, formula or invention.


What oil and gas activities may qualify?

‘Wildcat’ exploration, the drilling of a well, the development of logistical infrastructure — really the entire exploration and production process — may qualify for the R&D credit. That also includes improved analytics and software that enables more accurate interpretation of reservoir studies. A pipeline company in the industry’s midstream sector may be more efficiently monitoring flows of oil and natural gas or overcoming adverse field conditions in placing a pipeline. Downstream companies may benefit from improved processes for purifying or refining natural gas or oil.

What costs are eligible for the credit?

Wages for employees engaging in qualified research, directly supervising qualified research or supporting it are eligible. A company may also deduct 65 percent of contract labor costs associated with qualifying R&D activities.

Tangible property costs used in the R&D process or in the construction of a prototype can be qualifying expenditures. Supply expenses, though, cannot include land or land improvements, or property subject to depreciation. Expenses for royalties, shipping or travel also cannot be included. In addition, special considerations apply for internal-use software.

In order to capture all eligible credit when R&D activities are identified, companies must track and record labor costs of internal employees, contractor and vendor expenses, and supplies or materials costs. A business that is aware of the manner in which these costs are tracked and accounted for will more accurately define what it can claim for an R&D tax credit.

Robert Henry, CPA, is a partner in Tax and Strategic Business Services at Weaver. Reach him at (800) 332-7952 or robert.henry@weaver.com.

Insights Accounting is brought to you by Weaver

Wednesday, 30 October 2013 11:57

How top executives procure success

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Twelve years ago, EY decided to go global with its Entrepreneur Of The Year awards and establish the World Entrepreneur Of The Year program — and the results have been, shall we say, an international success. The conference, held annually in Monaco, features Entrepreneur Of The Year country winners competing for the World Entrepreneur Of The Year title.

Assembling business leaders from around the world in one place to be honored is a huge accomplishment — the wealth of experience, as well as the variety of successful leadership styles, is outstanding.

Here are some thoughts from the collection of the world’s most accomplished entrepreneurs — innovators, futurists, turnaround specialists and problem-solvers — about leadership styles. ●

 

“I built the company based on people, not on experience from before. They were willing to learn and try anything. We had a bunch of people who had never done this before. None of us had run companies. None of us had worked in high levels of companies. None of us were from Fortune 500s. Chobani not only became a business that grew, but Chobani was like a school to us, including myself.”

Hamdi Ulukaya

founder, president and CEO

Chobani Inc.

Entrepreneur Of The Year 2012 United States

2013 Entrepreneur Of The World

 

“Early on, the business was centered on me, and I had to make all the decisions alone. Now I share those decisions with my 10 main directors. If there are differences in opinion, I make the last decision.

The other thing is that I have had to ensure that the people who are invited to work here are people with principles, values, integrity, responsibility and passion. If I don’t see a person with passion, they don’t hang around the company very long.”

Lorenzo Barrera Segovia

founder and CEO

Banco Base

Entrepreneur Of The Year 2012 Mexico

 

“I’m a very passionate person, which will never change. When you grow, you gain more experience and the kind of problems you face change. As you grow, you need to grow with your organization.”

Martin Migoya

CEO

Globant

Entrepreneur Of The Year 2012 Argentina

 

“In the startup days, you have to be very innovative, hire and retain talent, refine your business as you deploy in the marketplace, and you learn things from it. Today, with a solid track record of business success, I can focus on what’s next and think more strategic and long-term than you’re allowed to in the early days. My style has evolved as the business has matured.”

Jim Davis

President

Chevron Energy Solutions

 

“Entrepreneurship and leadership is about always having ideas, knowing that it is possible even though everyone says it is too difficult. Maintain the positive and always have new ideas.”

Mario Hernandez, founder and president, Marroquinera

Entrepreneur Of The Year 2012 Colombia

 

“To keep the entrepreneurial spirit and entrepreneurship alive once you've got past the startup base, I think it is making sure people understand why they are there. There are always things you can do to improve your business. You should be rethinking and retooling it every chance you get. The key thing is to make sure everybody in the organization understands the story, where are you going — how are you going to get there? And the belief that you are doing the right thing —people want to know their purpose. Keep the energy going, keep a strong sense of purpose.”

Dr. Alan Ulsifer

CEO, president and chair

FYidoctors

Entrepreneur Of The Year 2012 Canada

 

 

“The skill sets of an entrepreneur involve understanding how to create business. Why not work with kids who need it the most and actually teach them and help them to be entrepreneurs? That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”

Amy Rosen,

President and CEO

Network for Teaching Entrepreneurship

 

“I like to be involved. I want to know everything that is going on. But I have to delegate to my team. That was the biggest adjustment for me, and it’s not an easy thing to do. It’s that delegating to others, trusting them and reinventing yourself. Now that we’ve grown, I put more responsibility on my team and rely on my team more than I once did.”

Corey Shapoff

President and founder

SME Entertainment Group

 

“If someone makes a mistake, what do you do? You laugh with them. You don’t yell at them. You laugh. It just keeps things light and lively and people want to do their very best. You let them know they screwed up, but you also let them know it’s OK.”

J.C. Huizenga

Founder

National Heritage Academies

Wednesday, 30 October 2013 11:46

Listen, learn and lead

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Leaders often talk about how the traits of accountability and transparency helped make them who they are, but to retired Navy Adm. Mike Mullen, who served as the chairman of the Joint Chiefs of Staff for four years under President George W. Bush and President Barack Obama, leadership is quite simply how you listen, learn and lead.

It’s not just a coincidence that communication is as important in the war zone as it is in an organization — and that’s where Mullen emphasizes listening to what his team members have on their minds.

Smart Business talked with Mullen about the challenges of being in command:

Q. What do you see as the most important trait that any leader must possess?

A. Integrity. Be true to yourself, and obviously true to your values. The value of integrity intrinsically has been a driver for me since I was a midshipman at the U.S. Naval Academy. It has served me exceptionally well.

Integrity encompasses being honest, truthful and consistent — both publicly and privately in leadership positions — and representing that in every situation. It is most evident in the toughest decisions you have to make.

Q. And how can you ensure integrity is present in leadership?

A. What I loved about command was the responsibility and authority that came with it. But more than anything else, the other piece was accountability — accountable leadership. That is not just having someone hold you accountable, but having enough strength yourself as a leader to hold yourself accountable.

I just found that even with those decisions that can be very unpopular, if you are true to that value of integrity, even if it may not seem to some to be the best decision, it [integrity] holds you in the best stead as a leader over the long term. And because of that, it becomes incredibly supportive of those very, very tough decisions.

Q. So what can help a leader make those tough decisions more effectively?

A. As a more senior leader, I learned to keep a diversity of views around me. The more senior I got, the more diverse the people, the recommendations and the discussions had to be in order for me to make the right decision.

I had people around me who were willing to say, ‘Hey, this is when you got it wrong,’ as opposed to the opposite, which is isolation, where nobody will tell the emperor [he] doesn’t have any clothes on.

Q. You’ve mentioned the importance of listening to others in order to help you become a better leader. How did you do that?

A. Everywhere I went, whether we had a town hall meeting or we could call an all-hands meeting, I would take questions from the audience. So, for example, when a young enlisted man would give me a question of which I didn’t know the answer, I said, “I don’t know the answer, but give me your email address. I will go research it and get back to you.”

I did that. I went back and looked at whatever their concern was. And some of those concerns generated significant changes in the military, or in the particular service they were in. For me, as chairman, that was a vital part of trying to understand what I was asking them to do, and then taking that feedback and trying to fix the problem that they raised — if it made sense to do it.

A good leader can make such a difference, and create something out of nothing, whereas a bad leader is unable to do that. The ingredient that makes a difference is leadership. ●

 

Retired Navy Adm. Mike Mullen served more than 43 years in the Navy, having served as the chairman of the Joint Chiefs of Staff from 2007 to 2011, and as chief of naval operations from 2005 to 2007. He will be the keynote speaker at the Dec. 5 American Red Cross Hero Awards. Learn more about the Hero Awards at www.clevelandheroes.com.

Wednesday, 30 October 2013 11:42

Beyond conversion

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Consider this business scenario: You’ve landed a big account for your company by converting a highly prized prospect into a valuable client. The new client has hired you to handle a specific scope of work and is counting on your team’s ability to deliver work that goes above and beyond.

While nothing is more important than delivering great customer service to satisfy the client, you may not realize that you’re probably overlooking unrealized opportunities to forge a stronger relationship with your customer.

In today’s business landscape, most large companies offer an array of products and services. More often than not, however, your clients use you for a specific service or skill set. And unfortunately, in this scenario, most companies focus solely on the task at hand — delivering what they’ve been contracted to deliver — failing to take ample time to think about the bond they’re creating with the client and what could be next.

In more simple terms, it is one thing to provide service that keeps a customer; it is another to keep that customer and expand the relationship to become a trusted partner.

Provide value in a deliberate way

The good news is that this is an easy fix. Establish a content marketing program that allows you to distribute thought leadership to your clients.

A content marketing program will help you provide value that other service providers may not, and when clients see you as an informational resource and partner, it will be easier to expand the relationship.

Take this example into consideration: You are an insurance provider and your main product is life insurance, therefore most of the communication you have with your clients surrounds that topic.

With a comprehensive content marketing program in place, however, you can educate your clients on the recent trends in the insurance industry and how that affects the individual. At the same time, you can give them an overview of your company’s wellness program and let them know that if they joined, they could reduce their monthly premiums.

As you can see, you’re not just providing your client with the original service, you’re also providing them with both your thought leadership — aka value — and additional offerings.

Personal connections payoff

Aside from providing value to the client with the content you distribute, a strong content marketing program allows you to showcase your brand’s personality. Clients will be able to connect with your brand on a more personal level.

Providing continually updated content through the right channels to the right clients enhances your day-to-day communications. Clients start seeing you as thought leaders and partners instead of just service providers.

It will help you expand relationships and, as a result, generate new business through more products and services.

Show them more than just what they see on the surface — show them how active you are in the community, or how much fun you had during a recent company outing. If may sound trivial, but your clients do similar things, and seeing you connect with the community and/or employees will help forge a more personal connection. You never know; you and your client may support the same charity, organization or team.

Open communication also will help strengthen relationships to the point where you can capture a premium price and eliminate price-jumping clients. Clients will pay more for a valuable relationship than simply look to get the lowest price elsewhere. ●

 

David Fazekas is vice president of marketing services for SBN Interactive. Reach him at dfazekas@sbninteractive.com or (440) 250-7056.

Wednesday, 30 October 2013 11:37

Watch your margin

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You would think someone like Douglas Merrill would be a heavy multitasker, with multiple devices in hand, fielding several conversations — both real and virtual — simultaneously.

But you would be wrong.

Merrill, who was the CIO at Google until 2008, doesn’t like to multitask. He says that when you do it, you aren’t using your brain’s full capacity and aren’t as effective. He recommends focusing on one thing at a time.

Billionaire Mark Cuban has his own time management strategy. Cuban, owner of the NBA’s Dallas Mavericks, says you should completely avoid meetings unless you are closing a deal. Otherwise, he says, they are a waste of time.

Both of these proven leaders have learned that how you manage your time is paramount to your effectiveness.

As a CEO, you are swamped every day with calls and emails from people wanting a piece of your time. Some are internal, some are charity requests, some are from friends or family members and others are from service providers.

To help wade through this sea of information, it’s important to have a system in place to help you free up time to think about your business and the things that matter most in life. These open times are what author Richard Swenson refers to as “margin.” They are the spaces between ourselves and our limits that are reserved for emergencies.

But for many business leaders, there are no spaces left.

The way out of this trap is to set clear goals and values for yourself and your organization. Once you do that, you will have a filter through which to evaluate everything. Everything will have an immediate yes or no answer, eliminating the “let me think about it” category completely.

The key is to establish what your goals are first and then prioritize what is important. With your priorities straight, you will find more time to put toward important things on your goals list, but don’t forget to leave time on your daily schedule. There is no way to foresee all emergencies, so by leaving yourself some margin, when something unexpected happens, you already have time built in to deal with it.

Once you have margin built into your life, you have to have the discipline to stick to it. There will always be the temptation to take every meeting or answer every email. But if you use your goals and priorities as a filter, those requests are easily either accepted or declined based on where they fall on your priority list.

If you want a life where you can experience more peace and joy and less anxiety, start looking at your priorities and establish some margin in your daily schedule. ●

Wednesday, 30 October 2013 11:26

Is your next big thing built to last?

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My 7-year-old son Cole recently gave me a Rainbow Loom bracelet, which is made of linked rubber bands. It is today’s school-age children’s craze, and Novi, Michigan-based Choon’s Design LLC is churning out the kits at a record pace.

With more than 1 million units sold in the last 24 months, Rainbow Loom is the brainchild of Choon Ng, a former Nissan crash safety engineer who invented it while working on a craft project for his daughters.

And Rainbow Loom, it turns out, isn’t its original name. When it was created, it was called Twistz Bandz.

Timing is everything, and Twistz Bandz may have sounded a bit too much like Silly Bandz — the last “wrist” craze that swept the nation. Between November 2008 and early 2011, every school-age child in sight was wearing layer upon layer of Silly Bandz on their wrists. It was as hot a product as anything since Beanie Babies.

Twistz Bandz’s arrival, it seems, happened just as Silly Bandz ran into what every hot new product eventually faces: competition. Look-a-likes with similar-sounding names began flooding the market. They were cheaper, and you could buy them more readily at more retail locations. The core brand quickly diluted. So Ng did what any smart businessperson would: He changed the dynamics of the situation.

Thus, Rainbow Loom was born.

Enter social media

Within a few months, the product — which allows its young owners to custom-create bracelets — was gaining attention. Much of this was due to a full-tilt social media blitz, including videos on YouTube and an engaging Facebook page, where users could share their designs.

More recently, Ng has become vigilant in protecting his patent and U.S. trademark — battling all wannabe competitors from launching similar-sounding products and flooding the market to dilute his own brand.

His success — or failure — is yet-to-be determined. But his efforts will prove fruitless if he’s not already looking ahead to the next product. This is the dirty little secret to any hot toy craze and the core dilemma every business leaders faces: How do you remain relevant as consumers’ wants, needs and desires ebb and flow — sometimes as swiftly as the wind changes direction. 

Get beyond being a fad

Success in business relies upon building a sustainable operation that will outlast any cyclical “must have” product explosion.

There needs to be the creation of an idea continuum — an innovation factory, if you will. Innovative leaders must review, measure and adapt a company’s products, services and solutions to the changing whims of the marketplace. You need to talk to customers, vendors and prospects. And you need to regularly take the pulse of the market.

If you haven’t taken at least some of the gains from today’s success and invested it into research and development for tomorrow, you’re already losing ground. Today is today, and just like the disclaimers for financial investing warn — past performance does not indicate future results.

In the end, the only thing that matters is this: Is your next big thing built to last? Or, like every other craze that’s every hit the market, will your opportunities to remain relevant long into the future fade away after the competition creeps in and dilutes your market? ●

 

Dustin S. Klein is publisher and vice president of operations for Smart Business. Reach him at dsklein@sbnonline.com or (440) 250-7026.

Paul Sarvadi wanted to launch his company’s rebranding from Administaff to Insperity in the right way — in a big way. So he and his team rented Minute Maid Park and invited all 2,000 employees, some friends of the company and guests. Forbes publisher Steve Forbes was the guest speaker and NFL sportscaster Jim Nantz served as emcee.

If all that fanfare wasn’t enough, the rebranding also leveraged the company’s 25th anniversary into the message.

“It was a very high energy and exciting event,” Sarvadi says. “But at the same time, the rebranding was a little unnerving. It was kind of like your foundation was changing. It was like every one of us was having our first day on a new job the next morning.”

By the time employees got back to the company’s 57 offices, the new brand was in effect — not only a new name that better defined what the HR and business services company provided, but also a solidified lineup of the company’s expanded services.

“The reason for the rebranding was partly because of the limitation of the old brand,” Sarvadi says. “Administaff had a connotation of being in the temporary staffing business, which we never were, and we found that it limited our ability to get in the door because people presumed that was what we did.

“However, people who knew us well loved the name because it was our identity. We served customers well for so many years, and we had a lot of advertising that supported that brand. It was a very positive brand in the marketplace among those who knew us.”

But the real reason behind the $10 million rebrand was that Sarvadi needed something that went past the core service that the company originally offered.

“We were known so well for that one product — Workforce Optimization™ — and it was very difficult to use that brand to ever do anything else beyond that,” Sarvadi says.

“So we needed kind of a bigger vessel, something that could really allow us to extend our competencies into other product offerings and into other markets.”

While the huge but short-lived event heralded the arrival of Insperity, the impact was that the company could now take care of customers for life. Here’s how Sarvadi lead the rebranding process for the company that capped a complete business transformation over the last several years.

 

Transformation precedes the rest

Rebranding often arises out of a negative event that happens to a company; for instance, a scandal or faulty product the company wants to put behind itself. But in the case of Insperity, it came out of the desire to improve how the company performed in the past, and to leverage the strength developed over 25 years of existence.

“We had to make some serious changes,” Sarvadi says. “We really didn’t have cross-selling in our DNA. Now we do. Now we have the ability to look at a customer for life: when they are first in business, when they find out where they are, and then help them as they move through different stages with different solutions that are appropriate for them.”

For most of its life, Administaff sold one product to a perfect-fit customer at just the right time. Customers were receiving administrative relief, better benefits, reduced liability, a technology platform and a systematic way to improve productivity.

“We had been in business for 25 years, and we had tremendous success as a company,” Sarvadi says. “But the one issue that we had was, ‘Why hadn’t we grown faster? Why weren’t we larger? I know $2 billion is pretty good but why weren’t we $10 billion, $20 billion?’

“We just felt like there were a lot of companies that we could have assisted if we had some way to help them get started rather than to just take the leap to the full comprehensive service.”

The first step in such a transformation is to develop complementary businesses that serve as stepping-stones toward the full-service product.

“For example, we use what we call a Build by Partner strategy to either build our own new service offerings or build out of what we had already been doing,” Sarvadi says. “For example, we now do payroll on a standalone basis, recruiting on a standalone basis and retirement services.

“We also bought some companies that helped to fill a gap in our service offerings such as expense management, time, attendance and organization planning.

“So for me as an entrepreneur, it was like entrepreneur heaven because now we had a dozen or so new businesses in different stages of development that were all part of the new brand.”

 

 Start with a name

Once Sarvadi had the package to offer, it was time to brand it. The company went through a two-year process to evaluate the current brand and conduct internal and external studies.

“There was literally a full year before a decision was made to rebrand or not,” Sarvadi says. “Then it took another six months to pin down the approach we would take.”

Administaff hired Addison Whitney, a rebranding company out of Charlotte, N.C., but also did a lot of branding work in-house.

The first step centered on the new name and the promise that went with it.

“We decided to hone the mission of the company even further,” Sarvadi says. “Our mission is to help businesses succeed so communities prosper. With the recent economic upheaval and reversal, you could see the opposite effect that when businesses were not succeeding, the community suffered.

“We chose the word ‘inspiration,’ which is so important in entrepreneurship — having that inspiration about a new product, a new service or a new company to provide an improvement in the marketplace, that particular inspiration in the business owner — and the desire to find ‘prosperity,’ not just financially but to be successful to achieve, to create.

“We took those two words, and we put them together into Insperity.”

Once the name was established, extensive planning was made for all the people involved in the process. A small group within the company had to be fully aware of what was going on because it handled implementation.

“Planning is so important,” Sarvadi says. “Having some advice from people who have done it is always a good thing. We were so deliberate about the process and the steps and the communication, and that is really what paid off most. We could demonstrate the ‘why.’ You know, people want to know what we are doing, but they want to know why we are doing it too. The better you can articulate the need for change and what change you are trying to drive and why that is important, then the more accepted it is.”

The company went through a full education process over the time period.

“We held monthly company meetings,” he says. “We took another step to kind of demonstrate where we were and where we were going, and eventually toward the end of that process, why a new brand was not only necessary, but represented a huge opportunity.” 

 

Know when it is time to get on board

It takes a tremendous amount of communication to nurture people in a rebranding, giving them a chance to come on board and then ultimately just saying this is the way it is.

“At some point, you just have to say, ‘This is what we are doing,’ Sarvadi says. “People normally are going to stay in their comfort zone absent a significant reason to get out of it. So after you try all the different positive ways to do that, eventually you just have to say, ‘You know what? The train is leaving the station. If you’re staying on it, you’ve got to get with it. If you’re not, the best to you, and thanks for your contribution.’ But at some point you have to get on board.”

While Sarvadi and his team did have a few bumps along the way, trying to make sure that a company could still have consistent predictable results while going through a massive transformation like this was no small feat.

“I’m not sure it could have been done faster, but my gut is if we would have spent more time with the field leadership people to get them along faster, they could’ve helped us get to the frontline people faster, but that’s all under the bridge, and you just got to go from there now,” he says.

“It was almost like we were refueling an aircraft in midair, or changing the tires while we were going 60 miles an hour.”

The rate of unaided awareness was one of the sure signs that the rebranding was working.

“We developed some very powerful television commercials to have a big impact initially to get the brand out there, and the effort has been very successful,” Sarvadi says. “In fact, in about a year and a half, the old brand disappeared. It was amazing how much work we had to put in on an ongoing basis just to keep that brand alive. The new one almost doubled the recognition in 18 months.”

 

Takeaways:

  • Transformation often precedes the rest.
  • Start with a rebranded name.
  • Know when the train is leaving the station. 

 

The Sarvadi File 

Name: Paul Sarvadi
Title: Chairman and CEO
Company: Insperity 

Born: Aurora, Ohio

Education: I attended Rice University and the University of Houston, but I never completed college. I got the entrepreneurial bug about halfway through and never finished — much to the chagrin of my mother. But I think she got over it.

What was your first job and what did you learn from it? The first one I would call a job was caddying. My brother was the caddy master, so that taught me never to work for your brother. But the other thing was that you learn to serve people. With caddying, you actually learn a lot about personalities and people when you are watching them play golf. Golf has a way of bringing it all out of you. You learn the value of service, and I think that is always a very important thing for young people to learn.

Who do you admire in business? There have been a lot of folks that I have admired over time. Early in the development of our company, I was particularly intrigued with Compaq. They had been the fastest growing company, $1 billion at the time. Rod Canion ran that business, and he really spent a lot of time and effort on the culture of the company and getting discretionary effort and creativity. He had kind of a consensus-style management that works a lot, but depending on different times, it can be effective, or not as effective.

What is the best business advice you ever received? I think the best advice any business owner could have ever received is about persistence and perseverance — you just can’t give up. Believe me, when you own a business, the thought of giving up does enter your mind periodically when the challenges are great. That is really why we started our company, because I felt like the success equation for business owners was going the wrong way. It was getting harder to be successful, both in the level of success, the degree if you will, and the likelihood, and we wanted to provide services and support to improve that success equation.

What is your definition of business success? The beautiful thing about business is that there is a report card — financial success is certainly an integral part. But I don’t agree that is the only part that makes you successful. I think you can be successful financially and leave a wake behind you, if you will, that was not of benefit. And that to me is not success, just having financial results without making something better. You have to make your community better, help employment, help individuals be successful. To me business success means that you contributed in your community in a way that has been uplifting. You have provided a good product and service, your customers benefited, your employees benefited, your shareholders benefited and all of them throughout your community.

 

How to reach: Insperity, (866) 715-3552 or www.insperity.com

After nine successful seasons, NBC’s “The Office” called it quits earlier this year. Catch an episode in syndication, though, and the administrative missteps of Dunder Mifflin’s branch managers and the valiant efforts of the paper company’s downtrodden HR guy to counsel his misguided bosses will still leave you laughing. HR mishaps and insensitive gaffes make for timeless television comedy, but in reality, a disregard for employees’ rights can be high-stakes drama.

Government regulations dictate how companies treat their employees and potential employees. A systemic disregard for these regulations, or “noncompliance” in HR-speak, can have costly consequences. Below is a sample of some common violations along with their consequences. 

Wage Payment

A small business owner works her hourly, non-exempt employees nearly 50 hours each week, but only pays them for 40 hours. A competing business owner also works his employees 50 hours each week, and although he pays them for 50 hours, he only pays the regular straight time rate rather than incorporating any overtime pay.

Consequences: Several employees file Wage and Hour charges, which in turn lead to audits of all payroll records. Both employers are found to be non-compliant under the Fair Labor Standards Act. One is required to repay two years of back pay, while the other is required to repay three years of back pay because it was determined that the violations were knowingly and willfully committed. 

Unemployment Compensation

A small company terminates an employee for work-related misconduct. The company, however, never provided the employee with an employee handbook, so he never signed a policy and procedure acknowledgment. In addition, the company neglected to maintain a written file of the employee’s misconduct.

Consequence: Because the company cannot present documented evidence of the employee’s misconduct or demonstrate that the employee should have known of the company policy, the company is charged with a wrongful termination claim that it cannot dispute.

Hiring

During a job interview, an owner of a small business casually asks the applicant if he has children. The applicant is not hired, and he assumes it is because he responded that he has three small children.

Consequence: The applicant files an EEO charge and ultimately a suit against the business. The business owner is forced to pay extensive legal fees to defend against the suit.

Harassment

A supervisor at a midsized manufacturing company continually makes sexist comments and tells subordinates off-color jokes that offend a number of employees. One employee complains, but the company does nothing and the negative behavior continues.

Consequence: The employee files an EEO charge, and later, a harassment suit. After incurring sizable legal fees, the company ultimately agrees to a significant settlement.

The most effective way to ensure your business is complying with today’s complex employment laws is to retain knowledgeable HR professionals. Whether you hire in-house or outsource HR, having access to experts whose job it is to stay current on HR issues and help train and monitor your managers can help you avoid costly pitfalls and prevent poor practices that could damage your company’s reputation. If you think you can’t afford a professional HR adviser, ask yourself whether you can afford not to have one, because the cost of noncompliance is no laughing matter. ●

 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, 

visit www.gnapartners.com.