“When you get high-performance people, egos get involved and that’s the beginning of poor leadership,” Elder says. “It’s not about you. It’s about the impact that you are having on the people that are around you that is really significant in this role.”
Elder has employed this thinking in his role as CEO to lead Legacy Energy Management Solutions to a 50 percent increase in 2006 revenue over 2005.
Smart Business spoke with Elder about the importance of respecting both your customers and your colleagues, and why it’s critical for a CEO to be humble.
Q: What contributes to a healthy culture?
Respect is a big piece. Respect for your customers in terms of how you are treating them, as well as respect for your peers within your organization. It really establishes a culture where people can grow and really enjoy where it is that they are working, which increases productivity and the success of the whole enterprise.
If you have a good, healthy work environment that is in a good place culturally, where people can just worry about the right things, their productivity is dramatically increased, as well as their job satisfaction.
We started out very early with making sure that the goals and objectives and the vision were established in terms of group meetings and taking the time to make sure that it became a part of the organization very early.
It’s always a part of the way that we all communicate. It’s very much an environment in which people are encouraged to look out for the best interest of each other and their customers.
Q: How can a leader cultivate a healthy culture?
Listen to other people’s ideas and do not be closed-minded or righteous to your own perspective on things at all times. Humbleness is incredibly important. It is what allows people to relate to you. People like to follow people that are real.
The head of the company is just another role. It is a key ingredient and it’s going to influence everyone. But once ego becomes a component of that role, it’s the beginning of a loss of effectiveness.
If you’re not willing to surround yourself with people that are being honest with you, then your effectiveness over the long term is going to be greatly limited.
Verbally communicate that that’s what you want to do. Tell them that you want to listen and you want to hear it. They have to see that in action. Then it becomes part of the culture and the expectations, and now you’ve got an environment that is really healthy from a leadership standpoint.
Q: How do you find employees that can work in this culture?
We’re looking for flexibility. They have to have the core competencies that you are looking for in terms of skills. But as important is will they fit in culturally in a high-performance environment in terms of working with the others in the manner that is demanded? The desire behind the individual is what is going to dictate how far they can go in our environment.
Q: How do you ensure that growth doesn’t spin out of control?
It’s all about communication. It’s something that has got to constantly be emphasized, or you’ll lose those battles.
The mechanics of how processes should work are always getting changed because a lot of other people have better ideas and improvements on my ideas. From a cultural standpoint, that gets to be my domain. That is the highest impact area that I can possibly have. That is a stake in the ground that is not changing. All the processes around it and how we deliver goods and products and services, those are all things that are constantly evolving based on lots of input.
It’s a constant journey in terms of communicating as much as you need to, trying to do it at the appropriate times and recognizing it’s not going to be perfect. Make sure that your people know your goals and objectives. They have to have a lot of trust in you that when they don’t understand what’s going on, or until they understand what’s going on, it’s all OK.
Q: What behaviors can stop a company from growing?
Arrogance and lack of humility, especially when you start to have some successes and you think you are a lot smarter than you actually are.
Don’t get too enamored with your title. It just means that you’re ultimately responsible for everything. Stay humble through the journey and keep a sense of humor, because you’re going to need it.
HOW TO REACH: Legacy Energy Management Solutions, (713) 524-0250 or www.legacyenergysolutions.com
The property insurance market was pretty easy to navigate in the Houston area until 2006. It didn’t require any special treatment from the insurance industry. Hurricanes Rita and Katrina have changed that. Now the area is considered on par with the coastal areas and has most of the concerns that go along with that distinction.
“The two main changes have been that premiums have increased by two or three times and deductibles now generally range from 2 percent to 5 percent of value,” says Rich Clark, managing director of Gallagher Hospitality Niche, Arthur J. Gallagher & Co. “Our crisis mode does not rival Florida’s. While premiums and deductibles have jumped, at least we haven’t seen the instances of coverage not being available.”
Smart Business talked with Clark for more information on the property insurance outlook in the Houston area.
What do you see on the property insurance horizon in the Houston area?
In general, property owners should budget for about the same property insurance costs as they paid in 2006 because the market is leveling off.
The exception to that would be for those whose premiums come due in the first quarter of the year. If they paid their premium in the first quarter of 2006, they probably got by without much of an increase. They will have to deal with a hefty increase this year.
Besides the premiums, property owners need to be aware of the potential exposure due to higher deductibles.
What can property owners do to alleviate some of the costs?
First of all, it is important to have a market-knowledgeable agent or broker. He or she needs to have experience in placing coverage on the type of asset you own to provide the best advice.
Secondly, ask your agent or broker to have a Probable Maximum Loss (PML) study done. Most lenders require that full replacement coverage be maintained.
Insurance companies want their premium based on full replacement cost. The PML study will show what the potential loss would be under various scenarios. It gives you a tool to negotiate with. Let’s say you have $100 million worth of property and the study shows that your maximum total loss would be $20 million from wind or flood damage. Then, if your lender agrees, you might only have to purchase insurance at the higher rate for wind or flood damage on $20 million and lower rates for $80 million coverage for fire, theft or other damages.
Is an appraisal necessary to determine coverage requirements?
As long as you can show the carriers that replacement costs are in line with industry standards, an appraisal should not be necessary.
With newer buildings, it is fairly easy to review various standards to come up with fair replacement values. With older buildings especially those with historical significance or those built before many of the current laws and codes were in effect higher replacement costs need to be considered.
You may have much higher costs to replace a building using today’s building codes. In these cases, be sure to talk to your agent about law and ordinance coverage.
What about flood insurance?
Houston has been remapped, so flood zones have changed. Flood insurance can be purchased through the National Flood Insurance Pool (NFIP). You can purchase this insurance whether you are in a flood plain or not. It is quite inexpensive, so it is usually recommended that property owners buy what NFIP insurance they can and then purchase supplemental commercial insurance to cover what isn’t covered by NFIP.
What is the most important aspect of a property owner’s insurance program?
People tend to look at the price of their coverage, but it is most important to review your coverage with your agent or broker. Make sure you understand what coverage you have and don’t have. This is another reason to deal with an agent or broker who specializes in your industry and understands your coverage needs. Only such a specialist is able to point out things that you do or don’t need to have covered and how best to obtain the coverage at a fair price.
Any other advice?
Be prepared. Every property owner should have a relationship with a first responder in the event of a major claim or catastrophe.
Also, identify a forensic accountant. Have your team in place before a catastrophe is imminent. When something happens, everyone should know who is going to do what, and when.
RICH CLARK is managing director of Gallagher Hospitality Niche, Arthur J. Gallagher & Co. Reach him at (713) 358-5930 or Rich_Clark@ajg.com.
It’s right there, at the top of Mark Wallace’s list of maxims on effective leadership: “Leadership always influences and determines outcomes, not some of the time, but all of the time.”
That one sentence has served as Wallace’s guiding statement as president and CEO of Texas Children’s Hospital for the past 17 years. Wallace says every decision a CEO makes will create a cascading effect throughout the organization, affecting executives, managers and employees alike, and the best CEOs never forget that.
He says it is his responsibility to set the tone for the entire Texas Children’s Hospital organization, which has 52 locations in the Houston area and posted just more than $1 billion in revenue last year. Wallace sees it as his duty to be positive, energetic, candid and forward-thinking so that his employees learn to be the same way. “A lot of it is being very visible in the organization,” he says. “I try to make sure that employees can see my presence, sense my presence and feel my presence. I’m always out and about when I’m at the hospital. I’m interacting with employees, I’m upbeat and attentive.”
Wallace says a CEO with a positive attitude can project that attitude to his or her employees, which is critical to getting them to buy in to your company vision. If you can clearly define your vision and enable employees who can carry out that vision, it can create the momentum that drives your company forward.
Finding the right people
Spreading your vision starts with developing people who can carry out your vision. And it isn’t just a matter of coaching; it’s also a matter of recruiting.
At Texas Children’s, recruiting starts not with the person but with the job to be filled.
“That’s the most common mistake organizations make,” Wallace says. “They don’t think through what is the leadership position all about, what are the characteristics, what are the skill sets and what are the characteristics I want from the person who will fill this position?”
Finding the right people the first time will not only increase the effectiveness of your work force, it will also reduce turnover.
“Jim Collins, the author of ‘Good to Great,’ said it best,” Wallace says. “He said, ‘If I were leading a Fortune 500 company, I would have one priority: Get the best people on the bus, get them seated on the right seat on the bus, and make sure they don’t leave the bus.’
“That’s been my goal: Attract great people, get them sitting in the right seat, and keep them here.”
Wallace tries to fit the right people in the right places with an involved process inspired by the hiring practices of Google.
“If you are just a regular applicant at Google, you will end up talking to an average of about 25 people before you will be selected to be hired,” he says.
Wallace calls it a “selective interviewing process,” and it requires managers from different areas of the hospital to interview a potential employee, many times asking the candidate the same question several different ways. Afterward, all of the managers who interviewed the candidate get together and compare the consistency of the person’s answers. Through that, Wallace and his staff can start to sketch a picture of how the person would fit in.
“No one bats 1.000 when it comes to picking people, but if you have that much commitment going on at the front end of the process, through good, interactive programs led by human resources, your average of picking great people goes way up,” he says. “That’s opposed to a lot of companies, where you might just have one HR person and one person from the unit the person is applying to work in conduct the interview.”
Wallace says he’s looking for a certain “it” within a person. That “it” lets him know a job candidate will embrace Wallace’s vision for the hospital and will be willing to work as a team player to make that vision happen.
Wallace says the characteristics that define “it” are subjective and depend on what the CEO wants. But he says that if you know where you want your company to go, you will know what you are looking for when you see it.
“It’s people that have energy, that project energy,” he says. “I’m not talking about someone who is loud or bubbly or has the personality of a cheerleader. The kind of positive attitude I want comes in a variety of personalities. Quiet personalities can be very positive, very energetic and very contagious.”
Wallace says getting hires right the first time is critical because the chances of changing the attitude of your employees aren’t very good. Most people, by the time they reach adulthood, have their general disposition set.
“You can’t teach attitude,” Wallace says. “People learn and develop their attitudes when they are children. By the time someone is an adult, their attitude is their attitude, and organizations can’t change that.
“That’s why, before you even make the decision to hire someone, you have a really good idea of the personality of this individual, are they driven, and do they have a track record of success.”
Driving down decisions
Wallace says that as a CEO, you need to learn who the most important people are to your company’s success.
And here’s a hint: It’s probably not you. It might not even be the people directly below you. The most important people in a company are what Wallace terms frontline managers. They are the people who interface with customers and provide the face of management to lower-rung employees. In short, any impression a customer or employee gets about your company, chances are it will come from your frontline managers.
As such, Wallace says the ability to enable your frontline managers to make decisions and communicate your vision is critical and should be one of your top priorities as a CEO.It’s a matter of smart delegation of authority and responsibility.
“Eighteen years ago, when I was being recruited by Texas Children’s Hospital, I told the board that if I come to be CEO, the last thing I want to hear from the board is, ‘Who told you that you could approve that?’” he says. “I told them that I wanted it to be very clearly defined as to what the board is willing to delegate to me in terms of policy regarding operational matters and financial matters.”
Upon receiving the job, Wallace drafted a comprehensive document outlining the levels of authority within the hospital. The document starts with Wallace’s responsibilities, then moves down to what he delegates to senior management, and then what senior management delegates to frontline managers and employees.
As the CEO, it is your prerogative how much of your authority you delegate to those beneath you. But Wallace says if you are going to delegate, make sure you are serious about sticking with it. “Our levels of authority document is now 18 pages long,” he says. “That’s where the proof is in the pudding. If you really talk a game of delegation and empowering frontline management, you have to operationalize it by making it formal throughout the organization. “You can’t just say it. You have to formalize it because, at least here, there are 10,000 decisions to be made every day. So everybody has to know what their levels of authority are.”
He says levels of authority go hand-in-hand with levels of responsibility. If you give someone a certain responsibility, you must also make sure that you have given them the authority to carry it out. If you don’t, bottlenecks develop in the decision-making process. “You need to make your organization as fluid as it can possibly be,” Wallace says. “One of the biggest bottlenecks in any organization is, ‘Well, it’s sitting on someone’s desk,’ or ‘So-and-so hasn’t approved it yet because they are stumped. They don’t know if they really have the authority to approve something like that.’ “You can’t be slowed down by slow decision-making. Your competitors will pass you by. That’s why, in these large organizations, it’s imperative that we push decision-making downward so that the best decisions can be made and the timing is right.”
Wallace says in many cases, the frontline managers are the ones most capable of making the right call if given the proper authority.
“What you are trying to do is get the decision-making down to the leader who knows the most about which decisions need to be made,” he says. “If you ask me to make a decision that is going to impact the radiology unit, I couldn’t tell you because I don’t work in radiology every day. The frontline leader in diagnostic imaging is going to be able to do a much more effective job there than the president and CEO.” Wallace says pushing decision-making capabilities downward is one way a large organization can maintain a degree of flexibility as marketplaces shift. The leaders on the front lines will be able to react to changes in the field far sooner than you will.
“One person can’t make all the decisions,” he says. “Ten people can’t make all the decisions. A hundred people can’t make all the decisions. It really takes an entire organizational structure, people who have been empowered to make a policy or financial decision.”
Through the grapevine
Texas Children’s Hospital is a health care facility, but the logistical hurdles it must clear aren’t much different than those faced by a software company or an auto component manufacturer.
While Wallace doesn’t oversee offices in China or Dubai, he still has more than four dozen locations around the Houston area that fall under his authority. Within those locations is a wide assortment of doctors, specialists, nurses, clerical staffers and other employees. They all come from different backgrounds, and they all need to have the same company messages conveyed to them.
In the world of the CEO, communication is critical. Without it, there is no vision, there is no mission, and employees never get empowered to make decisions.
It’s not about bells and whistles and grandiose statements. Wallace says it’s mostly about grinding away on the same messages, over and over, until everybody has heard it enough times for it to sink in. “Communicate, communicate, communicate, and that communication has to take many different forms,” he says. “Some people want to hear it from me. Others like e-mail and Internet messages a lot more.”
If you emphasize frequent communication, you will eventually find the right mix of print, Internet and in-person communication to reach all of your employees. But at first, that communication will involve a lot of message seeds that never take root. “It’s not that people don’t want to hear it, it’s that people are busy,” he says. “That’s why the messages have to be very repetitive and delivered in a variety of different forms. “It’s communicating in a plethora of different forms, and once you think you’ve communicated enough, you do it a bit more. I’ve been there myself. Some things I hear the first time, sometimes it takes me three times to really hear it and get it. It’s just because we’re busy and distracted. That’s why repeating your message is really, really important.”
HOW TO REACH: Texas Children’s Hospital, www.texaschildrenshospital.org
Maintaining the integrity of confidential proprietary information is critical to the success of any business. But the issue raises many questions in business owners’ minds. They wonder, for example, what constitutes “confidential proprietary information” and from whom they should protect it. The answers to the questions vary, but the reasons for it do not. The most significant answers are clear: protecting what are regarded as corporate secrets strengthens a company’s competitive advantage, protects its assets, and enhances its financial position.
Smart Business spoke with Dale Mellencamp, a partner at Godwin Pappas Langley Ronquillo LLP, to get some insights into protecting certain corporate information.
Why should clients be concerned with protecting confidential information?
Due to technical advances, vast amounts of confidential proprietary information can be replicated and stored on CDs, diskettes or flash drives. Such information can also be instantaneously transmitted as attachments to e-mail. In short, information has become more susceptible to intentional or accidental transmittal or removal from company offices or equipment. These developments increase the likelihood that a company’s carefully developed designs, plans, models and research will be obtained and used by the competition.
It is imperative that businesses regularly evaluate and improve their methods of protecting such information. Misappropriation often occurs as a result of disclosure by employees planning to leave the company or former employees who still possess or have access to the information.
Do former or current employees have responsibilities regarding the protection of proprietary information?
Yes. Employees are not entitled to give proprietary information to their new employers, even for their own purposes. Employers should do everything they can to make sure that when an employee is hired he is aware of such obligations. These obligations should be addressed in employment agreements and employment manuals and policy handbooks. Bulletin board reminders might be considered, and departing employees should be reminded of their obligations not to disclose or misappropriate proprietary information. Employers should address this in exit interviews and should require the return of all access codes, cards, laptops, CDs and other forms of confidential information before the employee leaves. Employers should try to obtain a signed statement that the employee has returned all proprietary information.
What constitutes confidential proprietary information?
Absent an agreement, protected information is often limited to that which constitutes a trade secret. A key to being considered a trade secret is the owner’s efforts to maintain the secrecy of such information.
An employer can protect the secrecy of proprietary information that may not be considered a trade secret if it requires the new employee to sign an enforceable agreement and takes the appropriate steps to maintain the confidentiality of such information. The information does not have to be patented or protected by copyright to be protected from misuse.
Of what significant elements of confidential proprietary information should companies be aware?
Proprietary information that can be protected generally includes information or data that is not generally known or accessible, and which gives the owner a competitive advantage. Such information is often developed over years with an investment of significant time and resources and is often accessible to a number of employees.
But the company must use reasonable care to maintain the secrecy of such information. If the company has not made reasonable efforts to maintain confidentiality, courts will be far less likely to enforce agreements or apply statutes that might otherwise prohibit disclosure or use of such information.
What benefits do clients derive from working with attorneys to protect their ‘secrets’?
While businesses are generally aware of their most vital secrets, they may not appreciate the extent and value of various procedures, policies, databases or practices until such information is misappropriated and used by a competitor. Attorneys can help businesses identify and protect such information.
Clients should involve counsel in the process before information has been placed at jeopardy. All employment agreements should be prepared by counsel who are aware of the requirements for enforceable agreements. Counsel can help develop procedures for exit interviews and retrieval of any information when employment is terminated. They can also provide advice regarding proper methods of monitoring or inspecting e-mails and hard drives to identify improper electronic duplication and transmittals. Counsel can also help determine the types of information that are likely to be considered worthy of protection by the courts.
DALE MELLENCAMP is a partner with Godwin Pappas Langley Ronquillo LLP in the Houston office. Reach him at (713) 425-7406.
Are businesses more or less confident these days? Robert Half Management Resources recently took the pulse of U.S. companies and discovered that 40 percent of chief financial officers (CFOs) were more confident in their companies’ technology capabilities today than three years ago. One-third (34 percent) said they also are more optimistic about the accuracy of their companies’ financial reporting, and 28 percent were more confident about the loyalty of their employees.
The survey, developed by Robert Half Management Resources, was conducted by an independent research firm and included responses from 1,400 CFOs from a random sample of U.S. companies with 20 or more employees.
“Four or five years ago, companies would not have responded this way,” says Cecil Gregg, president of Robert Half International’s Southwest District, based in Houston. “The economy has been doing well and businesses are benefiting. Overall, businesses can spend more to support their accounting and technology departments and also are able to compensate their employees competitively.”
Smart Business spoke with Gregg about the reasons companies are feeling a surge of confidence in the areas of technology, financial reporting and employee loyalty, and how businesses can best take advantage of this positive environment.
Confidence in technology ranked the highest in the survey (40 percent). What factors have contributed this?
With economic downturn in 2000 and 2001, there were many technology initiatives. The problem was that businesses were not in a position to be able to afford new technology. Today, not only is there a better economic environment, but advanced technology now allows for greater customization.
In years past, software firms would come out with a package that would be very generic, but now so many of the tools are expected to have the ability to be customized to an individual business.
Businesses have been able to drive this innovation, and there is no question that businesses have the money now to buy it. So as businesses purchase these customized tools, they are feeling more confident about the way technology is implemented in their companies.
Another factor is that companies are growing and they need to accommodate the increase in personnel, particularly in finance and accounting because of the increased need to meet compliance regulations brought about by the Sarbanes-Oxley legislation. As a result, there has been a need to upgrade computer systems.
How are companies improving to ensure greater accuracy in financial reporting?
Because of Sarbanes-Oxley, all public and some private companies have worked to improve best practices, including the way they handle and track purchasing, inventory, credit management, collection, disbursement and accounts receivables. Old processes have been meticulously reviewed and improved in order to avoid costly errors and fraud. This is happening across the board in not only a company’s internal network but with vendors and clients as well.
Why do you think 28 percent of CFOs are more confident about employee loyalty in today’s market?
Businesses are acutely aware of the increased competition for financial and accounting talent. In fact, the demand for these professionals has never been higher.
With that said, we are definitely seeing that more companies are becoming savvy in attracting and retaining employees and have increased pay and bonus packages, training commitment and working options (such as flex time and telecommuting). The 28 percent that do feel confident have stepped up to the plate and are doing what it takes to attract and retain the best people.
In light of the competitive employment market, how are employers improving their retention practices?
Employers are putting more measuring tools in place and giving enhanced recognition to outstanding performance. The recognition can be done in a number of ways for individuals, a team or departments, and can be given monthly, quarterly or annually. We are seeing employers offer more tangible rewards, such as iPods, cash and vacation getaways. We’re also seeing cash bonuses at year-end being enhanced or augmented.
Managers need to make sure their staff is not overloaded with work. Some companies bring in consultants to buffer the workload and augment the staff during busy or stressful times.
Having work-life balance is very important to today’s professionals, so offering benefits such as flexible schedules, telecommuting and additional time off can be an excellent retention strategy.
Another key practice is for company managers to sit down with their employees on a regular basis to make sure that job satisfaction is understood and supported.
CECIL GREGG is the president of the Southwest District of Robert Half International. Robert Half International (www.rhi.com) is the world's first and largest specialized consulting and staffing services firm with six branches in the Houston area. Contact Gregg at Cecil.firstname.lastname@example.org or 281-296-2812.
Education: Bachelor of arts degree, Davidson College; MBA, marketing, Xavier University
First job: Customer relations representative, Ford Motor Co.
What is the best business lesson you’ve learned?
There is absolutely no substitute for integrity and high moral values.
What skills can help a business leader succeed?
People skills and communication skills. But, more importantly, making clear to your people that you’re not asking them to do anything you wouldn’t be willing to do yourself.
Name one universal truth you’ve learned about leading a business.
You have to focus your entire organization on a couple of simple priorities. If you focus everyone on accomplishing two or three things, you’ll get it done. If you try to accomplish too many things, you’ll get nothing done.
What is your definition of business success?
Obviously, you have the metrics of profit growth and sustained ability of a business. But to me, when I leave, I want to leave this business with a team of people who can function just as well without me as with me.
You want to develop a business that is process-driven and not personality-driven.
Nearly half a century ago, long before Ralph Vasami came aboard, Universal Weather and Aviation was a fledgling company in an infant industry, providing weather plans for corporate flights. But as corporate aviation grew, Universal had to adapt, tacking on other services in a grow-as-you-go fashion. The result was more of a loose collection of departments than a unified company. When Vasami took over as president two years ago, he saw the need to unify Universal to take advantage of its size and experience in a market flooded with competitors. The steps he took have helped Universal become a global power in corporate aviation services, with 52 locations worldwide and more than $281 million in annual sales. Smart Business spoke to Vasami about how he communicates his vision and creates passion.
Get it together. We grew up extremely siloed in our history. Every division was doing their own thing, so trying to align the organization has really been a significant challenge.
For the first 10 years we existed, we did nothing but weather, so we kind of grew up on weather flight planning. Then we started adding a whole bunch of services as the market started to grow and the aircrafts themselves became more sophisticated and able to travel longer distances.
We just bolted on services as needed, with functional leaders over those services. Everybody just sort of took care of their own backyard. Then you wake up one day and everybody has different databases, different standards, different commitments to quality. One base isn’t talking to the other, one group is doing it this way, another is doing it that way.
In order to control costs and to really excel and differentiate in the market against an increasing number of competitors, we really had to align our efforts to take advantage of our touchpoints and size around the globe, to provide consistent service no matter where a customer ends up. You can’t do that unless you are aligned with some standards and consistencies.
Establish a reason for change. To change it, I’ve followed the principles of change management. You start with a compelling reason of why you have to change. In our case, that compelling reason was that there was no way Universal was going to take our service and our value proposition to another level unless we were united in our efforts. There is no way you can facilitate 52 locations around the world with standards and expectations of service and facilitate all of these third parties and variables if you’re not aligned.
Basically, we’re letting everybody know that we’re not going to move forward unless we do. So you had to create some compelling reason to get people off dead center.
How we did it was by creating a real vision and direction for the company. We aligned our corporate, division and employees goals to reach that vision. We tried to make it come alive in the organization by aligning everybody’s goals, daily work tasks, projects, you name it, to the achievement of that vision, that goal.
Measure your goals. We’ve taken our company goals from the 80,000-foot corporate vision level and tried to bring it down to a granular, operational level through employee “SMART” goals. It’s an acronym for a program we adopted two years ago, Specific, Measurable, Actionable, Realistic and Timely in all of our goal-setting.
The first thing we do is we share what’s working. What are our strengths, and what are our challenges? Then, from what is working and what are the challenges, we task our management to go off and come up with their goals in order to address how we’re going to handle weaknesses and address challenges.
We have a booklet that was distributed to all employees that shows them the vision, the corporate goals, how we’re aligning the organization through SMART goals, what is our value proposition. Every employee has this, even at risk of it leaving the building and ending up in competitors’ hands. We felt it was worth the risk.
We have one group that’s our largest group. They’ve taken it down not only to SMART goals, but to an actual scorecard. They’re having monthly meetings with management going through their specific scorecard, which also has their measurements built in.
There are other parts of the company that their SMART goals are still being reviewed with people. But it may not be monthly; it might be every six weeks, every two months.
Tell stories. Part of employee communication we’ve found very effective is turning this stuff into storytelling, real-life examples, ranging back from the founding fathers of the company and how they did it in the ’60s, to how we’re doing it in the early 21st century with all the technology and everything else.
That is one of the essential skills any business leader has to have, that ability to communicate the vision and create passion around it. Otherwise, it’s just words.
People can relate to the storytelling. I tell real-life stories of my customer service experiences I had working at the Ritz Carlton, and the point I make when I do it is, ‘What’s going to make someone pay $700 for a room versus $300?’
Every hotel you go to has a bed and a shower curtain. But it’s the people, and the service that really differentiates the Ritz Carlton.
When they hear that kind of stuff, and then you ask what customer service experiences you’ve had that either pissed you off or made you happy, now they can start to relate about how our customers feel when they work with Universal, versus just a bunch of theory and opinion. That kind of storytelling can be very powerful.
Value your relationships. The bottom line is everybody wants to make money, but the way we really define success is our strong financial results via customer and employee satisfaction and loyalty.
We’re willing to lose on a transaction, to be honest with you, to win the war versus a battle. Customer satisfaction and loyalty drive our financial results. We don’t look to make short-term profits at the expense of a long-term relationship with a customer.
The loyalty factor is so important. So whatever a customer wants, within reason, they’re going to get, even if we take a short-term hit on the financials.
HOW TO REACH: Universal Weather and Aviation, www.universalweather.com
Arbitration is becoming more prevalent as an alternative resolution dispute method in today’s employment environment. Business owners look at it as a cost-effective, simple and less combative way of resolving disputes with employees. A growing number are including arbitration clauses in their employment contracts and even making them a condition of employment for at-will employees.
It’s helpful for business owners to work with attorneys to craft arbitration agreements that courts will approve and that will help alleviate some misconceptions of the way the judicial system resolves disputes. Enforceable agreements must include some of the “savers” that make an agreement enforceable and exclude the “killers” that have the opposite effect.
Smart Business spoke with Amy Dunn Taylor, a partner at Godwin Pappas Langley Ronquillo LLP, about recent developments in the use of arbitration agreements within the employment law context and to gain more insights into arbitration “savers” and “killers.”
How are arbitration savers and killers defined?
In general terms, killers may mean that the client's arbitration agreement is not enforceable. Savers give clients the best chance of making advantageous, yet enforceable, arbitration agreements. For the most part, the killers are the corollaries to the savers. As long as clients include the savers, they can avoid the pitfalls that might render an agreement unenforceable.
What are the perceived advantages of arbitration, and are they a reality?
Arbitration is perceived to be cheaper, quicker, simpler and less combative. None of these ideas is necessarily true.
Realistically, arbitration can be just as expensive, or more expensive, than traditional litigation. It can take as long or longer, and it may not be simpler or less combative, because it involves human dynamics and interactions. Since it is a dispute, people can be less than cordial, particularly in cases where employees feel that the process puts them on unequal footing with their employers.
There is also the danger of runaway arbitration awards, just as there is with some jury verdicts. These factors are not always present, but ‘bulletproof’ arbitration plans can help allay the fears of parties to employee disputes and facilitate their equitable resolutions.
How does a client enhance enforceability?
The client has to communicate unequivocally, clearly and formally with employees about the terms of the agreement and should consider an outward act by the employees that signifies their acceptance of it. For example, employees can sign a written document signifying their agreement to arbitrate any dispute or use voting buttons, which are a common feature used in many e-mail applications nowadays.
Another way to assure even ground and fairness is to split the cost of arbitration in a fair manner. For instance, the client can limit the employee’s financial liability to paying only the cost of filing a traditional case in court.
Next, check the policy for all elements of enforceable agreement, such as the Federal Arbitration Act and applicable state contracts and arbitration laws.
Consider including a de novo review provision in the policy. Some courts allow parties to agree that a trial court could review an arbitrator’s award on a de novo basis, which means that trial courts have the power to review and set aside part or all of the arbitrator’s decision.
De novo provisions add a safety net to the arbitration process and help alleviate fears about out-of-control arbitrators. Arbitration agreements can also help control costs by limiting the amount of discovery that will be allowed. This is beneficial for both sides. It helps them realize the benefits of limitations on discovery if a cheap, quick and unbiased decision is handed down from an arbitrator with sufficient knowledge of the underlying facts.
What can an attorney do to implement an arbitration policy that a client cannot?
An attorney may offer objectivity, counseling and advice that a client might not readily have available. The extent of the attorney’s involvement sometimes depends on the nature of the dispute. For example, if the dispute is about the payment of overtime wages or a holiday employment policy, the client may be able to handle the arbitration with little or no help from an attorney.
But if it is about something more complex, such as ERISA benefits, a client might have a difficult time handling it alone. It is always advisable to have attorneys involved in the drafting stage of any written agreement. This will help clients avoid the pitfalls that can be arbitration killers.
AMY DUNN TAYLOR is a partner with Godwin Pappas Langley Ronquillo LLP in the Houston office. Reach her at (713) 425-7404 or email@example.com.
One of the top reasons businesses hire temporary professionals is to help protect the jobs of a company’s full-time work force, suggests a new survey by Accountemps, the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals. More than one-third of 150 high-level executives (35 percent) recently surveyed said the most important benefit of using interim workers is to help avoid the cycle of overstaffing followed by layoffs.
“This reveals that businesses are trying to avoid the costly consequences of over hiring, which include layoffs,” says Tyra Olson, branch manager of Accountemps in Houston. “It is a smart strategy to fill a short-term need with a short-term hire, rather than putting a full-time employee on board.”
Smart Business spoke with Olson about the various reasons companies should use temporary personnel, from avoiding gaps in productivity during peak periods, to evaluating prospective full-time employees.
Your survey revealed that companies are using temporary personnel to avoid layoffs. Is this a new way of using temporary help?
It is not a new way, but more companies are using temporary help for this purpose. Business executives are finding that crunch times when there isn’t enough staff to complete a project are not the best time to hire full-time employees. The workload often recedes after the project is over, and the company ends up with extra people on the payroll who need to be dismissed. This is not good for morale and does not make economic sense, since unemployment benefits often need to be paid for these employees.
Another factor is what these crunch times do to the employees of a company. If there isn’t enough staff, burnout is high and risk of employees leaving increases. Companies are finding that using tempo-
rary professionals during this time is an ideal arrangement. The company benefits from skilled professionals, and employees are happy because they can either work on a special project and their day-to-day duties are completed by the temporary help or the temporary staff does the special project and employees are not burdened by the extra work.
What other ways can temporary staff help a business?
Twenty-three percent of the executives surveyed said they use temporary help to, in effect, audition a potential new employee. This is a win-win for both the employer and the potential employee. At times, employers are hesitant to hire because while a potential employee may look good on paper and do well in an interview it is difficult to evaluate how that person will perform in a corporate culture, or how he or she will work under pressure. Hiring a person as a temporary professional is a perfect way to make that kind of evaluation. It is also a plus for the temporary worker, who can evaluate if the environment and work are a good fit.
What other ways can a business use temporary hires to ease staffing challenges?
Special project work is ideal for temporary professionals. They fill in where the company needs it most, leaving full-time employees free to either learn a new skill set with a project or work unimpeded at their job while the temporary worker takes on the additional project.
Another way to utilize temporary workers is to bring them in during a peak time of year, such as hiring extra financial personnel during tax season.
Temporary professionals can also help fill in for core employees out on medical or maternity leave, vacation, long-term disability or other leaves of absence.
What can managers do to help temporary workers better succeed at their jobs?
On the first day, it’s helpful if the manager reviews the temporary worker’s responsibilities and sets expectations. Other ways to ensure success are to discuss the firm’s culture and procedures, encourage questions and provide the temporary employee with the necessary resources to succeed. It’s important for managers to provide ongoing feedback and tell the employee if he or she performed well.
Saying thank you for a job well done goes a long way. There may be times when the temporary worker needs to hit the ground running at the start of an assignment, but making time for these steps will ensure a successful project and a happier, more productive work environment for all.
TYRA OLSON is the branch manager of Accountemps in downtown Houston. Accountemps (www.accountemps.com) is the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals, with more than 350 offices worldwide. Reach Olson at (713) 658-1772 or firstname.lastname@example.org.
Born: Freeport, Texas Education: Bachelor’s degree, finance, University of Texas; master’s degree, science and management, Houston Baptist University First job: Ticket salesman for the Houston Rockets. I sold season tickets in the boiler room on the telephone. I had to make 300 calls a day, they were the worst team in the NBA and they’d just lost Moses Malone. I worked on it for three months, I didn’t make one dollar and I didn’t sell any tickets.
What is the most important business lesson you’ve learned?
You need to be as open with people as you can. Assume people can handle the truth. You just need to be as open and transparent with people as possible.
Whom do you admire most in business?
My grandfather. He ran a small grocery store in Geneva, Texas, with his wife and kids for 40 years. He was honest and cared about the community and took care of his family and was just a man of incredible integrity.
What is a universal truth you’ve learned about leading a business?
The No. 1 characteristic of good management is discernment, making good decisions. People that consistently make good decisions need to be given more responsibility, and people that seem to have a pattern of making bad decisions need to be given less responsibility. Discernment is a rare skill, and it needs to be found and rewarded.