Another year of EY’s Entrepreneur Of The Year Awards has come and gone, but the stories told and the lessons learned are far from over. Each year EY’s entrepreneurial programs get bigger and better and the entrepreneurs involved are getting more creative and leading more impressive companies than in prior years.
For instance, Hamdi Ulukaya, the founder and CEO of Chobani Inc., was named Entrepreneur Of The Year 2012 U.S. He went on to win 2013 World Entrepreneur Of The Year, making him only the second entrepreneur from the U.S. to win the world award.
This summer Smart Business caught up with a few of EY’s leaders, Herb Engert, Americas Strategic Growth Markets Leader, and Bryan Pearce, Americas Director of the Entrepreneur Of The Year Program, to discuss how these programs have evolved and talk about some new ones that are being developed.
It should be noted that EY itself is going through a leadership transition with the retirement of Jim Turley, global chairman and CEO. Smart Business spoke with him as well to understand the future direction of the company.
Here’s what we learned.
How are you effectively developing a seamless global leadership transition?
Turley: We announced Mark Weinberger was going to be my successor well over a year ago, probably 14 or 15 months ago. It was interesting because unlike many of our competitors who do this very quickly, we realize this is a really important transition.
The reason we gave ourselves 15 months of transition is because we’ve got 170,000-plus people around the world. So we take our time; we do this well.
How do you see your legacy?
Turley: If there is a legacy it’s our people culture. We’re a special place. More experienced folks join EY from our competitors than ever leave us to join the competitors. They come and they say it’s because of the culture we have.
What is one of the greatest marketing challenges moving forward?
Turley: Everybody has realized now, much later than we realized some 34 years ago, that the growth driver in the world is coming from entrepreneurs. They are the ones driving economic growth. They are the ones driving job growth.
I think we have to keep investing in and keep recognizing their strengths. But we don’t do this for our own marketing. We do this because of the impact entrepreneurs are having in the communities where they live, and they weren’t getting the attention in the press when we started the program some 27 years ago. Increasingly they are getting the visibility they need.
How did the issues discussed at the WEOY program relate to what’s going on in the U.S.?
Engert: They’re directly correlated. Everybody is talking around the issues and challenges in the world economy, which is growth, jobs, investment and innovation.
When I think about innovators and some of the companies that have come through the EY programs, they are companies that are disrupting, or said in another way, addressing a need, demand or service. In some cases in emerging markets they are replicating what might have already been met in another developed market.
That whole concept of replication and foreign direct investment, at the root of it, is what entrepreneurs are all about and it’s going to bring parody to the global world. A stage like WEOY puts it in perspective and how it’s all tied together.
Pearce: The companies that are here have been successful in growing their companies perhaps in their domestic or regional markets and this gives them a great opportunity to meet counterparts that are operating in other parts of the world. At a minimum, they may learn a little bit more about those markets. Ideally, they may meet people who are potential partners, strategic relationship candidates or people who could help them in some way to expand their own business into expanding foreign markets.
How do you plan to apply the information gained in the WEOY program into the Strategic Growth Forum this fall?
Pearce: The WEOY and the series of strategic growth forums that we do around the world are definitely part of getting knowledge to entrepreneurs as well as networks to entrepreneurs. When you bring those two things together, they learn more about how they can grow their business, run a better business, access capital and develop their people.
It’s a focus on the five important pillars around customers and growth: people, operating effectively, capital and managing risk. You get insights into that here and you’ll get insights into them at strategic growth forums.
How has the program content developed with WEOY?
Pearce: We have added a lot of content to what has historically been a program only focused on awards. That knowledge and greater focus on networking with each other obviously has been well received by the entrepreneurs. They came to WEOY to meet their colleagues, but also to learn and so we had people coming in as keynote speakers and panelists.
We have also created a series we are calling E exchanges, which are groups of 10 to 15 people sitting around the table with common issues. These E exchanges will be very helpful for people to get to know each other and to really get into some of the down and dirty, nitty-gritty of what they are doing to tackle problems in their own business.
Are there any particular countries where you see big opportunity?
Engert: I have been tracking where I see money going. Where is the most foreign direct investment happening? Africa is clearly one. In South America, Colombia has been coming much more into its own, as have Indonesia and parts of Southeast Asia. Those are some of the markets you’ll start to see. Mexico is another one you have to watch because it’s close to the U.S. and its leaders have had change in their political landscape to be more pro-business. It’s the No. 7 GDP nation in the world.
What does the Entrepreneurial Winning Women Program mean to EY and how is it developing?
Engert: The Winning Women Program is a recognition program, but it is so much more. It really is a development program. We really focus on recognizing the women and giving them an award, but we’re putting them into an EY incubator where we give them the opportunity to participate in a lot of different aspects of thinking about the strategy of their business, their financial plans, how they approach media, branding, PR and investors.
We’ve learned a lot in the last five years of this program, and I’m proud to say we are expanding that around the globe.
Pearce: One of the recognitions that we had was that women are 48 percent of business owners in the world. They’re starting up businesses at a rate more rapid than men right now. But part of the challenge is scaling. You don’t tend to see the women-led businesses scaling as rapidly as others do.
What I think has really been the strength of the program is that there is more than just an award. There is ongoing education. They are recognized through the awards program, but also get mentoring and other skills to help them build better businesses. And then we bring them to events like WEOY.
We will have virtually all of them at the Palm Springs event in November. So they have that opportunity to get integrated in with our EOY award winners and other great entrepreneurs and find partnerships and boards of advisors and directors and various other things that can help them to scale their business.
So we began that in the U.S. We are now rolling that out to Canada and Brazil this year and looking at more rapid rollout into other countries because it is certainly a great opportunity to help support these women as they grow these businesses around the world.
What about the addition of a family business component?
Engert: The Family Business Award was put in place because family businesses are the bedrock of communities. They’re the unsung heroes.
Most private companies are family-owned businesses and a lot of public companies are actually family-owned businesses as well. A significant amount of them are multi-generation family businesses and it creates a focus on that market segment.
It’s a totally different class of business with different needs and attentions. So we are trying to celebrate family business, which will provide a lot of great learning and perspective for us.
Pearce: Our definition is that families are those at least in the second generation or beyond. Not only do you have all the same challenges that another company, private or public, would have in growing the business, but now you have this added dimension wrapped around it of family dynamics.
We try to bring them together with each other so they can learn from other families how they are handling those same kinds of challenges around family integration, succession, fundraising, liquidity, and all of those kinds of things, and then we are able to provide services to them as we look at managing through those same issues.
Across the 25 programs regionally in the U.S. we had more than 200 nominees this year that want to be considered for the family business award, which was a great start.
Can you explain a little bit about Endeavor?
Engert: We have a partnership with Endeavor. They are focused on building a better working world themselves and investing in and promoting entrepreneurs in emerging markets around the globe. The Endeavor model is wonderful because it’s entrepreneurs who are opening a local chapter, but have strong ties to the global connections of Endeavor that help bring entrepreneurs and perspectives to bear.
Endeavor is a great program and we’re proud to be partners with them. I look forward to Endeavor expanding further around the globe because they are a key difference in some of those emerging markets.
Pearce: In many of the countries that they operate in, particularly in the Americas and in Latin America, we’ve got strong relationships with our EOY program.
For example, this year is the first year that we’ve had EOY in Uruguay, and that really began as a partnership between Endeavor Uruguay and one of our former partners who is on the board. We were able to team together and the initial EOY gala was combined with the Endeavor gala. We had more than 800 people attend in year one. So it shows you the power of entrepreneurship and certainly the power of the partnership between Endeavor and EY.
Nothing is more frustrating than missed opportunities — except when those missed opportunities were completely avoidable. For example, you and your organization put in the time and effort to drive prospects through the marketing funnel toward conversion. And then, when the prospect is engaged and reaches out to you, you’re not equipped to provide a timely follow-up response.
This happens entirely too often. But basic prep work on the front-end can help you avoid becoming one of those organizations whose well-planned marketing strategy is wasted.
Conversion means different things to different people. In retail, it may mean going to find a product — either online or in person. But in a different industry, it may mean that someone just wants to talk to you about helping to solve a specific problem.
Regardless of your conversion definition, the singular commonality is your ability to immediately follow up and act on the potential conversion. This is because when someone reaches out to buy a product or for help with a service, it is an emotional decision. He or she is claiming that they either need something (a product) or help with an area they do not have the expertise in.
The importance of this step in the marketing funnel is critical. Like it or not, we live in a world of instant gratification — both personally and professionally — and you must tailor your marketing efforts to accommodate it. When someone winds their way through that funnel by becoming aware of your services, having interest, and then being willing to engage and dig deeper to learn who you are, nothing kills those marketing efforts faster than failure to respond to that person.
Too often, we see conversion points that consist of a basic “email us” link on a website. It sends a note to a general email address that nobody regularly checks. Or, the company lists a phone number that reaches a general voice mail account that is rarely checked. In both scenarios, all the work required to lead a prospect to conversion is rendered moot.
Take steps to ensure conversion
So what can you do to reverse the trend and build systems that allow for more immediate conversion? Among the easiest to implement are
■ A phone number that connects with somebody who is dedicated to following up.
■ Online chat capabilities in real time
■ Marketing, through a website or other sales materials, that guarantee a 15-minute response time.
■ A well-designed form on your website that asks for four components: name, email, phone number and reason for the inquiry (any more information than that may cause prospects not to convert).
Keep it simple and swift
Many organizations simply fail to take the direct route, and as a result, they swing and miss.
Initiatives such as putting a map that points to your location as your prominent website “contact us” looks great, but how many people will actually get in their vehicle and drive over to see you?
Also, don’t underestimate the importance of offering multiple ways for people to reach you for a swift response. When it comes to today’s marketing funnel, there is no effective one-size-fits-all approach.
For example, let’s say you’re looking to refinance your house or buy a new one. This is an emotional decision. You do your research and find a company that you believe will offer the best possible rates. You reach out to them. And then, you don’t hear back for days. What happens? You lose interest.
But now, consider the result when you reach out to a company and get a return response within 10 to 15 minutes.
First, you get the information you need to make a decision. More importantly, though, that company has forged an emotional connection with you because they were responsive to your needs.
It is this emotional connection that can be highly effective in closing the final piece of the marketing funnel — conversion. And, if your organization’s marketing strategy includes optimizing your marketing spend, why would you ever overtly waste money by failing to have an effective — and immediate — follow-up process in place?
David Fazekas is vice president of digital marketing for Smart Business Network. Reach him at firstname.lastname@example.org or (440) 250-7056.
Calm down … those two letters in the headline are not what you might be thinking. However, it got your attention, for this leads to an important subject.
When you, or those with whom you work, don’t follow the principles of these two letters, problems occur. Not doing what these initials represent can be the difference between success and failure, cost big money, create disappointment and actually ruin relationships.
Hopefully by now you’ve figured out that F.U. stands for Follow Up. This skill is central to achieving objectives, supporting your people or customers, and maintaining your credibility. Too many people just don’t get it and consistently fail to make F.U. a part of their business regimen.
Words are cheap, but it’s action that makes the difference. Many promises are made every day such as: “I’ll get the answer and return your call soon,” or “My person will call your person so that we can get together.” Good intentions aside, if one does not make note of it, the call just might never happen.
Fortunately, only a relatively few get hit by locomotives because trains are big and people see them coming, but many are stung by bees. That’s the same with following up. Virtually no one would forget to pick up the big order, or neglect to attend a huge meeting, but too many let the smaller, yet important, matters slip through the cracks. This not only affects the person who didn’t receive what was promised, but also could significantly impede productivity.
As an example, an associate is to provide needed information first thing in the morning. Breakfast comes and goes and as the lunch hour approaches people along the line are sitting on their hands waiting. Do the math; count up what that could cost your business day in and day out. Frantically, and with a high degree of disgust, you track down the tardy offender and are appalled by the response, “Oh, sorry, it just slipped my mind. I forgot to write it down.” Sure, this can happen once but by the second or third time it becomes a pattern and the credibility of the perpetrator can be lost.
Following up is a reflection of respect. When people don’t have the courtesy of doing what they say, you begin to wonder if they can ever do it. In my companies, all those with whom I work quickly become aware of my sacrosanct F.U. policy.
Essentially after every meeting, whether a one-on-one or with a group, I assign a date for my own purposes of when what was discussed is to take place. If it was a task of significance, the date would be agreed upon with those who had to do the work.
When new employees receive a memo from me, with the unexpected “F.U.” initials in the bottom left-hand corner, many are initially stunned, thinking I’m giving them a crude ultimatum or don’t think much of their work. Fortunately, those with a modicum of common sense quickly realize that these two letters are not a pejorative as they are always followed by a numeric string that even a newbie can figure out represents a date.
I remind my team that I do not want to be their father or their baby sitter. Instead, when I ask that something be done by a certain date, and everyone involved agrees, it must happen.
Alternatively, the person assigned the task could always come back and say he or she can’t meet the deadline, don’t know how to do what was being asked, need help with the issue, or had figured out a better alternative. What could not happen is for the person assigned the task to pretend that no follow-up was required, or worse, that the covenant was never agreed upon.
Because so few follow up as promised, this presents your business with an outstanding opportunity to rise above others and create a rock-solid reputation for saying what you’ll do and then doing what you say. All it takes is a little discipline and respect for those with whom you work. It’s better to carry around a little string for your finger than run the risk of finding the proverbial rope around your neck as a result of errors of omission.
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 email@example.com.
Thinkers solve problems.
Mark Zuckerberg found a better way to connect people with friends and family through Facebook. Larry Page and Sergey Brin invented a better way to search the Internet by creating Google. Steve Jobs showed us a better way to obtain and listen to music through the invention of the iPod.
None of these examples happened by luck. Each of these great thinkers spent a lot of time working to perfect their ideas. Great thinkers are not born, they are made.
To create great products and services, you have to develop the habit of expanding your thought processes and critical thinking skills. Why? Because the human mind tends to be lazy. It tends to repeat the same thoughts unless it’s trained to explore new ideas. Great thinkers put in the effort to analyze things in new ways and not accept the norm.
We live in a negative society where bad news trumps good news and the potential downsides of an idea outshine the potential rewards. It takes a lot of effort to retrain our minds to focus on the positives and the solutions rather than the ramifications of a failed idea.
Becoming a great thinker requires an investment of time; there are no shortcuts. You have to be organized and plan for it. Take time to think about the problems unique to your business or industry. Work through the pros and cons of any idea, looking for a way to make it work. Study competing companies and leaders and gain an understanding of how they think. It’s also helpful if you always do your heavy thinking in the same location, and it doesn’t have to be anything fancy. Some people do their best thinking in the shower or over a cup of coffee at a cafe.
But there is one major pitfall to avoid: Don’t equate change with new thinking. Just because you are changing something does not mean you are being a creative thinker. There might be several “accepted” ways of doing something within your industry, and changing from one of the accepted ways to the other isn’t doing anything different. The goal is to identify new ways of thinking and as a result, find a new solution to a problem that no one has thought of before.
Finding these unique solutions won’t be easy, but success never is.
When Paul Murphy was named CEO of Cadence Bancorp LLC, a merger of three financial institutions, he knew the staff would be asking, “Who is this Murphy guy who just bought the bank, and what is he all about?”
But he was not taken aback. He had prior experience as the CEO of Amegy Bank of Texas for 10 years, and the task of building one culture out of three was not an insurmountable one for him.
Murphy’s challenge was to bring Cadence Bank, a 127-year-old institution; Encore Bank of Houston; and a failed bank all under one nameplate. He believed it was first a job of gaining trust among employees.
“People are willing to give you the benefit of the doubt, but to really become committed and trusting, you’ve got to pass the time test,” he says. “You have to get to know them by sharing past experiences, background, how we approach business from big picture things like what type of culture are we trying to create; also in smaller things involving execution and delivery of service and the customer experience.”
While in such a situation you can’t expect that all three entities would have stellar company cultures, you can take the best of what there is and build on it.
“All three banks had elements of good cultures that we wanted to merge,” Murphy says. “But we wanted to raise the level of commitment to values and goals in all cases. We really wanted to hammer home the importance of customer service. We tried to do that in a way that is engaging and memorable.
“I think we are making great strides; we are generating a lot of new business and new revenue.”
With annual revenue of $240 million and 1,400 employees, Cadence Bank is showing the benefits of a strong company culture.
Here’s how Murphy, who in 2011 was named chairman of Cadence Bank N.A., fashioned a new culture by living it, meaning it and being committed to it.
Make it a good place to work
Murphy had previous experience with a merger when he helped found Amegy Bank in 1990 as Southwest Bank of Texas. With the bank chairman, he bought other institutions, including Klein Bank & Trust and Lone Star Bank and melded them into the fold. It gave him an edge when it came to Cadence Bank, but it still took some hard work.
“It is a combination of spending a lot of time together sharing ideas,” he says. “Credibility is of paramount importance. And communicate, communicate, communicate. You’ve got to bring the words to life. That creates the environment for the culture.”
Driving culture requires talking about it from the top, but it also can occur in situations like conference calls while you look through the nitty-gritty processes to be sure you aren’t micromanaging.
“Have adequate controls, but allow people still to be empowered and able to get their job done — in a sensible and timely fashion,” Murphy says.
Building a company culture is a long-term process that has to be nurtured constantly.
“To me, the culture is much more than posters on a wall,” Murphy says. “It is what you do every day. And when your company’s culture aligns with your personal values and your shared values, adoption is really quite simple.”
To determine the best aspects of the culture to save and nurture, look for those that make the company a good place to work.
“It’s about taking care of employees, providing them with opportunity and chances to advance, grow and expand their careers,” he says. “I think the customer service focus and intensity is something that really worked in all our three cases to be even more responsive — better products, bigger investment in technology and providing tools to customers. That makes that a more robust product offering.”
Have a culture with a can-do attitude
In a merger, you may have to hire anew to fit the culture you’re creating. That is often a silver lining in the dark cloud.
“We have been fairly aggressive in terms of hiring commercial lenders, for example,” Murphy says. “Where the prior banks had small, almost nonexistent commercial lending competency, we have hired about 65 bankers with extensive commercial experience. That’s the most fun part of the job because you have new talent that is excited about being here, and they are on fire; they can’t wait to get to work. That’s pretty cool.
“We have been really successful in that regard.”
Murphy says he feels Cadence Bank’s culture plays a part in attracting new talent.
“For a highly motivated team of bankers, this is something that they would value, and they’re choosing where they want to be,” he says. “All these people who have joined us to help grow the business — the talent inflow has been phenomenal.
“There’s one man I have been trying to hire for 20 years. He was well placed and doing well. His bank went through a series of transitions. To be part of something that is freshly, strongly capitalized, that has a great board of directors, a good management team and to have a culture with a can-do attitude — so yes, this is something that a superstar team saw as a different place to work, a better place to work where I can do a better job for my customers and be more successful and be happier.”
If you’ve hired a new team, the employees’ first thoughts may be about the sincerity of the new company they’ve just joined.
“People are first going to say, ‘How sincere are these people about this mission? This goal? Who are they; are they really sincere? Are they genuine? It sounds good. I am going to give them the benefit of the doubt,’” Murphy says.
“But as time passes, you've got to be consistent,” he says. “Then you circle back the second time and the third time. And then people will say, ‘You know, they seem to be really committed to this. They talk about it all the time. Maybe they do mean what they say.’”
The bottom line of a good culture is that it drives revenue and profitability.
“One of my favorite sayings ever — how your employees feel is eventually how your customers will feel — leads to a kind of enlightened self-interest,” Murphy says. “Your employees feel good, and know that this is a good place to work. The company cares about its customers and is sincere about doing a good job.”
Put a focus on attitude
While companies talk about enjoying your work and having fun at your job, Murphy knows there are realistic limits.
“It just can’t be ‘rah rah’ throughout the day,” he says. “I like enthusiasm, but I like sincerity and thoughtfulness as well. If you could put all of those together, then you have something that people can really take hold of.”
If you draw a flowchart about company culture, those three attributes should be radiating from one database called “attitude.”
“Attitude is a huge part of culture,” Murphy says. “Give me a person with a great attitude and a good work ethic and I think the sky’s the limit. But someone with a difficult attitude who’s not willing to be flexible — it’s going to be much harder for that person to be successful.”
While you may expect some employees to step right up to the company culture and engage to the fullest, others will be less likely to engage. It’s important to discover the attitude. Subpar attitudes can weaken the culture.
“That is when you have to hold people accountable,” Murphy says. “Accountability is an important part of our culture. If we are not getting the job done, we need to address the issue and find the root cause. If it is that people aren’t well placed, we have to address the issue. Turnover is never easy, but it is sometimes required.”
Murphy has found that by weaving the aspect of company culture into the annual employee evaluation process, it sends two messages to the employees. The first one involves the employee’s engagement with the culture and the second one communicates the point that the company places a high value on company culture.
“Our annual evaluation process is subjective: ‘Do you embrace the culture? Do you show a good attitude? Are you on board with what the company is trying to accomplish?’” Murphy says. “It is intangible in terms of how it is numerically rated.
“I think they see that if we are putting this into their evaluation, it must be meaningful to them [the bank] or we wouldn’t be going on about it so much,” Murphy says.
“Culture is a commitment of time and energy and training materials. But I think it is worth every penny. I think it is one of the best investments that you can make in the future of a business.”
Down the road, the company culture should continue to be a big part of the leader’s job, Murphy says: “Just continue to communicate, to live by example and to follow-up and follow-through on the little things around customer service to be sure that you are getting resources to people who can resolve customer service issues.”
How to reach: Cadence Bank, (800) 636-7622 or www.cadencebank.com
Make it a good place to work
Have a culture with a can-do attitude
Put a focus on attitude
The Murphy File
Cadence Bancorp LLC
Cadence Bank N.A.
What was your first job?
My first job was washing windows at the bank that my mother worked in. I am from a banking family. Some of my uncles, my mom and my grandfather were bankers. I was probably 13 or 14. I also had a lawn-mowing business where I had several neighborhood lawns. What did I learn? I think the motivation to generate revenue and have more spending money and more impact on your quality of life or work ethic. I think I learned early of the importance of having a good work ethic, of being responsible for taking some financial responsibility for myself as a young person — that was a very good thing for me.
Who do you admire in business?
I love entrepreneurs. These people go out and start businesses, risk their own capital and walk away from a good job and safety net to create jobs, to bring new ideas to market, to change the world. I think the folks who are willing to do those things are extremely impressive, and we should celebrate entrepreneurs more than we do.
What was the best business advice you ever received?
Work hard. Be persistent. I think a big part of success in life is being consistent, persistent and effective and follow through on the task ahead. I think that is really from my mom, Sally Wailes. What I learned from her is to be flexible, to not take yourself too seriously, and to have a good attitude even when things are not going your way. Look for the positive things in life; look for the bright side and persevere.
What is your definition of business success?
I think it is a couple of elements. One, to be financially comfortable would be a measure. Doing a good job for customers and creating value for your customers. A tight ship comes to mind. Being well-run, being accountable to shareholders, regulators, all the third parties and vendors. You want to be a good partner with all those groups that you encounter, and being a place that has high integrity and consistency.
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com
Recently, I had the privilege of attending the EY World Entrepreneur Of The Year conference in Monte Carlo. I’m back to report that entrepreneurship is alive and thriving around the globe!
It was a whirlwind of a trip, packed with networking, thought-provoking panel discussions and personal interviews. We heard from a remarkable panel of speakers including Kofi Annan, former Secretary General of the United Nations and Nobel Peace Prize recipient; Sir Timothy Berners-Lee, inventor of the World Wide Web; John Cleese, award-winning actor, author, humorist and Monty Python legend; and many more.
I also had the opportunity to sit down with some of the world’s most accomplished entrepreneurs. These business leaders come from more than 60 countries that combined represent a staggering 94 percent of the global economy.
In this issue and in the months to come, you’ll learn what the world’s greatest entrepreneurs have to say about leadership, innovation, overcoming challenges, bringing their visions to life and much, much more. You’ll also hear from the leadership at EY as to the importance of celebrating entrepreneurship.
Transforming vision into reality
“Be careful about making assumptions. Those assumptions can lead you down a pretty dangerous path. It is OK to make assumptions and have confidence but you had better do your due diligence as well. An assumption is having those critical for the business make sure it is happening. I am very trusting of people and in the past have had some unfortunate instances where I did make assumptions about something and they were completely the wrong assumptions.”
Dr. Alan Ulsifer, CEO, president and chair of FYidoctors
“Growth obviously continues to be a challenge. The markets demand growth if you are a publicly traded company, and growth is a metric of how the business is doing. If you want to continue to attract the best people, attract the right sources of capital to your business, you have to demonstrate that things are going well and growth is one measure that people look to. I think that if you are a business in an established market, growth can be a challenge because those markets by and large are growing more slowly. So in order to get more rapid growth, many companies are looking at emerging markets and trying to figure out what their strategy should be for emerging markets, those that have double-digit growth potential.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group EY
“One of the toughest things for me was that people have a certain image of my country, Colombia. They don’t trust a company there to have good quality and do good work, but I am very proud to offer those qualities from Colombia. It is not easy but it is something that you can accomplish. I have been down a lot of times, but the good thing I have noticed is that every time something like that happened, I have been able to obtain positive things out of it. I have been broke multiple times, but from being broke I have been able to learn from it and rebuild.
Mario Hernandez, founder and president, Mario Hernandez
Jim Turley leaves his post as Global Chairman and CEO for EY with deep admiration for the entrepreneurs who continue to use their vision and spirit of innovation to change the world.
“They have got this wonderful ability to think outside themselves, to look at the world outside these windows and see the needs that exist out there,” says Turley, who officially retired on July 1.
“Then they’ve got a vision to create a product or service or an idea to meet the need they have seen. They have got the courage to risk everything and they are as persistent as can be. Most of them fail the first time out. But they get up, clean themselves off and do it again.”
“Work carefully with a few people who get a twinkle in their eye. If you talk about your idea, some people will respond with excitement because they get it, but not everybody. Maybe you talk to 300 people and three people will get it. Work with those three people. The web took off because a few people all over the world got it. You get the support from a few people who get it and then it builds from there.”
Sir Tim Berners-Lee, creator of the World Wide Web
Corey Shapoff has a job that many would envy, booking well-known musical acts such as Maroon 5, Katy Perry, Christina Aguilera and Kelly Clarkson for live concerts and private corporate events. But he doesn’t take much time to stop and think about all the famous people on his call list.
“I’m a grinder,” says Shapoff, president and founder of SME Entertainment Group. “I’m the kind of guy who is always looking to what’s next. You’re only as good to me as your last deal.”
It’s that instinctual drive to always try to do it better that is embedded in the true entrepreneur and allows the next vision to become a reality.
“It’s hard for me to turn it off and say, ‘That’s great,’” Shapoff says. “I’m always thinking about tomorrow. You just can’t take things for granted in our business.”
“The skill sets of an entrepreneur involve understanding how to create business. So if you’re going to give back, 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
“When you’re an entrepreneur you feel like you have never met a deal that you didn’t like. You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”
Jim Davis, president, Chevron Energy Solutions
“It’s important that you have teamwork and all your top players are well motivated with passion, principles and values. We make sure that people know where we are going and what our main objective is for that year. We promote teamwork inside and outside the company. Our directors have to make sure they are sharing our company values and principles with each of their team members.”
Lorenzo Barrera Segovia, founder and CEO, Banco Base
“For entrepreneurs you get a great idea, you start your business and then you have to keep focused. Keep executing that idea if that idea is big enough. Never fall into the temptation of getting out of your business or change it unless it’s strategic. Secondly, try to get financing as late as you can. Never get financing as soon as you can. Thirdly, create a great team and culture, because that’s what will prevail and create value for shareholders and your community. That’s how you scale your business. The last one is to dream big.”
Martin Migoya, CEO, Globant
“It was nothing but a gut feeling. The only thing I knew was there was a big opportunity in yogurt. I grew up with yogurt. Being from Turkey yogurt was a big part of our diet. I wasn’t sure if I could do it – break through in the world of yogurt in retail.
The category was owned by two major companies; Dannon and Yopliat owned about 70 percent of the market, and they had been there for years. As a startup you go to the specialty stores first. That’s how you start and you grow and once you reach a certain level then you go to the big retailers.
I didn’t want to do that. I wanted to go to the big retailers and be in the regular dairy aisle. That was a crazy idea and nobody thought that would go, but at least we tried. When we tried, we convinced one retailer in New York, ShopRite. The result from that was we were able to expand to a couple of other retailers. After the second or third customer that we had success with for our yogurt, I knew it wasn’t going to be about selling, it was about making enough.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
One of my favorite business books, which also made it as a Broadway play and a big-screen movie, is “The Wonderful Wizard of Oz,” written by L. Frank Baum in 1900. My hero in this story is not the young orphaned Dorothy, nor the Cowardly Lion, the desperately in-need-of-some WD-40 Tin Man, nor even the Scarecrow in search of a brain.
Instead it is the Wizard. To understand why the dubious Wizard is my favorite character, one must get past the portrayal of him as scheming, phony and at times nasty.
To appreciate the man behind the curtain, recognize that he is a very effective presenter, though at times this ex-circus performer behaved a bit threatening. OK, he was a jerk, but the point of this column is to take you down the yellow brick road on the way to the enchanted Emerald City and corporate success.
From this tale there is a lesson that one can say all sorts of things, not be visible, and yet still have a meaningful impact.
Another takeaway is that playing this role provides plausible deniability. This absence of visual recognition is particularly beneficial in negotiating when you, as the boss, use a vicar, aka a mouthpiece, to speak on your behalf. This allows you to have things said to others that you as the head honcho could never utter without backing yourself into a corner.
Another plus is you can always throw your mouthpiece under the bus if necessary, of course, with his or her upfront understanding that sometimes there must be a sacrificial lamb. This is not only character-building for your stand-in, but also many times presents an unprecedented opportunity for him or her to learn in real time.
Perhaps the Wizard was the first behind-the-curtain decision-maker, but today this role is used frequently in business and government. In a similar vein, the “voice” of Charlie from the well-known 1970s TV series “Charlie’s Angels” was always heard, but he was never seen.
Frequently there is much to be said for using anonymity to float a trial balloon just to get a reaction. Think about a son having his mom test the waters by talking to dad before the son tells him he wants to drop out of junior high school to join the circus. Maybe that’s even how our former circus-drifter-turned-Wizard-of-Oz got his start.
In the negotiating process it is important to have a fallback when the talks hit a rough patch by instructing your vicar to backpedal, saying that he or she has just talked to the chief and the benevolent boss said, “I was overreaching with my request.”
This also serves to build a persona for the boss-behind-the-curtain as someone who is fair-minded and flexible. All the while, of course, it’s the boss who is calling the shots and maneuvering through the process without getting his or her hands dirty.
The value of using this clean-hands technique is that it enables the real decision-maker to come in as the closer who projects the voice of reason, instead of the overeager hard charger who at times seems to have gone rogue.
It actually takes a bigger person to play a secondary role behind the curtain rather than always be in the limelight. It also takes a hands-on coach and counselor to maneuver a protégé through the minefields to achieve the objective.
However, accomplishing the difficult tasks through others is true management and the No. 1 job of a leader who must be a master teacher.
After you have guided a handful of up-and-comers a few times through thorny negotiations, you will gain much more satisfaction than if you had done it yourself, while engendering the respect and gratitude of your pupils. They in turn will have learned by doing, even though they were not really steering the ship alone.
The final step is to let the subordinate take credit for getting the big job done. This will also elevate you to rock star status, at least in his or her eyes. Soon those who you’ve taught will emerge as teachers too, and the big benefit is that you will populate your organization with a stellar team of doers, not just watchers.
So, forget about the Wicked Witch of the West and move backstage for the greater good of the organization.
“America likes cheap gasoline,” says Sandra Dunphy, director of Energy Compliance Services at Weaver. “But as much as we want cheap gasoline, we also want clean gasoline and clean air — and they are not necessarily mutually exclusive.”
In the balancing act between the two, Renewable Identification Numbers (RINs), which are attached to gallons of renewable fuel as it is produced, have become very valuable to the oil companies required to own them.
“If you bought 1 million RINs on Jan. 1, it would have cost you about $70,000,” Dunphy says. “Today, that same purchase would cost about $1 million.”
Because there’s so much money in RINs, there’s also the potential for fraud. After a handful of fraud cases rocked the market, the Environmental Protection Agency (EPA) has stepped in with a solution — Quality Assurance Plans (QAPs).
Smart Business spoke with Dunphy about the EPA’s Renewable Fuel Standards program and how QAPs fit in.
How do RINs and the RFS program work?
Congress passed the Energy Independence and Security Act in 2007 to introduce fuels with lower greenhouse gas emissions, reduce dependence on foreign oil, and promote domestic agriculture and employment. This act spawned the EPA’s RFS regulations that encourage biofuels beyond corn ethanol — those made from non-food sources like used cooking oil, wood chips and algae.
Oil refiners and importers of gasoline or diesel are required to own a certain amount of RINs at year-end. The RFS requirements will increase annually from about 16.5 billion gallons in 2013 to about 36 billion gallons by 2022.
Why have RINs become so valuable?
We are hitting the blend wall. When this law passed, Congress anticipated that the volume of gas and diesel we consume would increase each year. But demand has fallen with fuel-efficient vehicles and fewer driving miles, and now there’s nowhere to put additional renewable fuel into the declining gas and diesel pool. Anticipating higher mandated renewable fuel volumes, and a possible shortage of RINs, many oil companies are buying RINs now to use in 2014 — 20 percent of RINs can be carried forward from one year to the next.
Why did the EPA create the QAP program?
Since 2011, a few RIN fraud cases have shaken the market’s foundation and made oil companies nervous about buying renewable fuel or RINs, after the EPA penalized oil companies who used fraudulent RINs for their annual compliance needs. As a result, many oil companies started buying only from the biggest renewable fuel producers who had the ability to replace bad RINs, and small fuel producers suffered.
The QAP program seeks to address the concerns of invalid RINs in the market and tries to level the playing field.
How does the QAP program validate RINs?
There are three options available to a domestic renewable fuel producer or importer with this program. The first option is to maintain the status quo, where oil companies do their own due diligence reviews.
Second, under the QAP-B program, the producer hires an auditor to audit its paperwork and conduct an engineering visit quarterly to ensure the energy and mass going into the plant are equivalent to the energy and mass going out. It reassures those buying the RINs that the producer is doing everything it is supposed to. The oil company has an affirmative defense against EPA penalties if they use a QAP-B RIN for compliance. They just might have to replace bad RINs if the producer cannot.
Another option is the QAP-A program. It’s the same as QAP-B, but the scrutiny is more ongoing. In addition, the auditor must hold an insurance policy. So, if a producer makes an invalid RIN and can’t replace it, the auditor is responsible.
What’s the timeline for the QAP?
The EPA has not issued the program’s final regulations. That is likely to happen in the third or fourth quarter of this year and become effective beginning in 2014. However, the EPA is encouraging producers to get started now. A renewable fuel producer’s purchasers will probably dictate what type of QAP the producer will need, if any.
Sandra Dunphy is director of Energy Compliance Services at Weaver. Reach her at (832) 320-3218 or firstname.lastname@example.org.
Follow up: Weaver has been pre-approved to perform U.S. EPA RFS Quality Assurance Plan audits. Contact Sandra Dunphy if you’re a domestic producer or importer of renewable fuel and would like to learn more.
Insights Accounting is brought to you by Weaver
A few years ago, one of my friends embarked on what he deemed an ambitious, yet simple plan: Write a New York Times Best Seller.
“Ed” had reason to be optimistic: His first two books had sold well and he had successfully leveraged them to launch a burgeoning consulting practice. Ed also had a nationally known book publisher to handle distribution for this book, and he had developed a comprehensive marketing and promotions plan for the launch.
Ed felt all the pieces were in place and was sure he would succeed. His goals were two-fold: break out from the pack and grow his business, and hit the New York Times Best Seller’s list. While his head told him the first goal was more realistic, his heart was set on the second — publicly claiming it was his only true benchmark of success.
Needless to say, Ed’s book didn’t make the list. Few books do. That doesn’t mean Ed’s book was a failure. Quite the contrary, it was a huge success.
As a result of Ed’s book, he landed numerous speaking engagements with organizations and companies around the world. He began to command four- and five-figure speaking fees from those engagements, and his book was purchased and distributed to every attendee.
Further, Ed’s speaking engagements lead to dozens of private companies hiring him to provide one- and two-day seminars, where he taught executive teams how to implement the ideas he espoused in the book. Ed was also presented with numerous business opportunities for new and existing clients to tackle initiatives beyond the book’s subject matter that he had not previously considered but were related to his expertise.
Finally, Ed did sell thousands upon thousands of copies of his book in bookstores nationwide and online through booksellers like Amazon.com and BarnesAndNoble.com. His book was in the hands of the right people — and lots of them — and he had established a national profile.
Viewed through this lens, there is little doubt that Ed’s book was wildly successful — even if it wasn’t a New York Times Best Seller and even if it didn’t stack up to his primary benchmark.
This is the reality of book publishing. Each month, I speak with dozens of entrepreneurs and CEOs about their nascent book ideas and the possibility of having Smart Business Books handle development and publication of their stories and manuscripts. I begin every conversation the exact same way: “If your goal is to have a New York Times Best Seller, we’re not the right option for you.”
That’s because you should write books for the right reasons. If your only goal is getting on a best-seller’s list, then your ambitions are off the mark. Writing and publishing a book is not like a professional sports team’s season — there isn’t one winner who takes the championship and a bunch of losers who fall short. Publishing a book is not an all-or-nothing proposition.
This isn’t to say you shouldn’t aim high with your goals, and having your book become a best-seller is certainly one way to measure success. Setting reasonable expectations, however, is essential.
So why write a book?
One of the most important questions you should be able to answer when thinking about writing a book is, “Who is going to read it and why?”
As Ed’s story demonstrates, a book is a very useful business development tool. It is an immediate conversation starter, an excellent credibility builder and one heck of a leave-behind. If you’re engaged in marketing, why not capture your expertise through a book?
Another reason is to celebrate a milestone or establish a legacy piece. It could be for a 50th or 100th anniversary, or to recognize the history of an organization upon the founder’s retirement or death.
And, if you are interested in helping others succeed, a book is a great way to share your expertise or what makes you and your organization special. For example, if you’ve built an amazing corporate culture where productivity blossoms and innovation flourishes, the “how” and “why” are good subjects for a book. And if you’ve been involved with several mergers and acquisitions, consider sharing what worked and what didn’t, and the lessons learned along the way.
Whatever your story, the key is having a reason to share it with others. The bottom line: It’s your story. Make it count.