Employers are scrambling to figure out the impact of the Patient Protection and Affordable Care Act (PPACA) on their business and whether it makes sense to “pay or play” when it comes to providing health insurance coverage for employees.
“Pay or play regulations were released Dec. 28, so we’re all trying to digest this. Employers want to know what the rules mean for them,” says Dwight Seeley, vice president of Employee Benefit Programs at Sequent. “I have several meetings scheduled to review the math of the penalty phase with companies so they know where they stand.”
Smart Business spoke with Seeley about the pay or play provisions under PPACA and what employers need to do in preparation for the Jan. 1, 2014, start of health care exchanges.
How do companies prepare?
They need to determine answers to these questions:
- Do they have a general understanding of pay or play?
- Are they considered a large employer?
- Will any employees receive federally subsidized exchange coverage?
- Does the company plan offer minimum essential coverage?
- Does the plan provide minimum value?
- Is the plan affordable?
- What penalties could apply and what is the potential cost?
First off, pay or play applies to employers with at least 50 full-time or full-time equivalent (FTE) employees, so you have to determine if that applies to you. PPACA rules are different from those of the IRS. Under PPACA, a full-time equivalent is considered 120 hours per month, 30 hours per week. There’s a fairly detailed structure for measuring FTEs based on employees with variable hours, seasonal employees, etc. Companies that have variable schedule employees, part-timers or a lot of seasonal employees are going to be challenged to determine how many FTEs they have.
If you have 50 or more FTEs, what do you need to do to avoid penalties?
Businesses can avoid penalties by providing minimum essential coverage with a plan that offers at least minimum value and is affordable. No guidance has been given on minimal essential coverage but there’s a general idea of what it’s going to look like based on industry standards.
Once you’ve established that a plan provides minimal essential coverage, you then look at whether it meets the minimum value requirement and if it’s affordable. It’s considered poor if it pays less than 60 percent of total benefits under the plan. To be affordable, it has to cost less than 9.5 percent of an employee’s household income.
What are the potential penalties?
If you do not offer coverage and at least one full-time employee receives a federal subsidy, the tax is $2,000 per the number of full-time employees minus the first 30. An employee can get a subsidy if their income is between 100 to 400 percent of the federal poverty level — about $92,000 for a family of four.
If you offer coverage that’s considered unaffordable and at least one full-time employee receives a federal subsidy, the annual tax is the lesser of $3,000 per subsidized full-time employee or $2,000 for all full-time employees.
Should some employers drop health care coverage and pay the penalties?
Studies corroborate the fact that a lot of employers feel they still need to offer health insurance as a differentiator and as a recruitment and retention strategy. What they want is to get the numbers straight in order to make an informed decision. That means going through the penalty scenarios and working out the math. Any penalties will not be deductible or tax favored, whereas the health insurance you’re providing is tax favored, so you have to calculate the impact from pre-tax and post-tax perspectives.
One other challenge that’s not being talked about is the cost companies are going to incur to implement the administrative changes required by the law. They’re going to have to put in new processes to allow easy access to data the way it is defined by the PPACA, such as an ongoing way to monitor the number of FTEs.
The published regulations contain many detailed examples so there has been an attempt to provide direction. Still, the sheer volume and complexity make it a lot to absorb.
Dwight Seeley is a vice president, Employee Benefit Programs, at Sequent. Reach him at (614) 839-4059 or firstname.lastname@example.org.
Save the date: Learn about the changing landscape of health care reform. Register for the March 19 Pay or Play Webinar at http://bit.ly/XFjwB3.
Insights HR Outsourcing is brought to you by Sequent
When I meet with business-to-business and professional service clients to discuss their marketing strategies, one comment that consistently arises is “No one buys professional services through the Web.”
While that may be true — you don’t typically buy an accountant online as you would a product through e-commerce — how your brand is perceived most definitely will impact a prospect’s buying decision.
Decisions to work with professional service firms don’t happen overnight. They take time. And because of this, any B2B organization must ensure it is “seen” in the strongest possible light before the sale actually occurs.
In fact, it’s just as important to not lose prospective customers because your organization is perceived as weak or subpar as it is to convert a prospect into a client.
The simple truth is that you never know at any given time who is researching your brand and through what channel. Having a consistent brand message, whether they’re looking to engage you now or somewhere down the road, helps you to not lose them before they need your solutions.
To accomplish this, you must get your brand messaging across in a consistent manner across multiple channels.
So how do you that?
First, a solid marketing strategy must include a website that clearly articulates the brand message and value proposition of your services — and it has to be on the home page.
It also should include supporting content that allows a prospective customer to quickly understand who you are, what you do and why you’re different.
For example, let’s say you’re an accounting firm. Being able to articulate why you are the best at providing risk management solutions for clients can help you differentiate yourself in the marketplace.
Providing and highlighting content that explains your service, along with case studies and client examples that include measurable results, is a smart move. It allows prospects and site visitors to get a feel of what it would be like to work with you.
Additionally, your website should offer prospective clients an easy way to contact you — either through a phone number or a simple contact form that includes a name, email address, phone number and short explanation of the prospect’s business problem.
Beyond your website, other channels to consider include social media, which includes LinkedIn, Facebook, YouTube and Twitter. In these social media channels, you need more than just simple company pages. Instead, you should offer visitors relevant and current content that consistently supports the brand message and your organization’s value proposition, along with company information and executive profiles. And it’s extremely important to continually be “active.”
Using the same accounting firm as an example, it could utilize consistent content around recent changes to government policies, updates on recent business wins or sharing a solution that helped one of its clients overcome a business challenge across all social media channels.
And when that information isn’t timely, something as simple as new hire announcements or employee promotions will show visitors and followers that there is activity within your brand — and your organization. It makes you “active,” which makes you more attractive to prospects.
Other channels to think about include mobile or tablet experiences, print marketing and event sponsorship. Every channel you can imagine should be used to express your organization’s brand message because there are always people watching.
So while your clients may not choose or buy their professional services online, they will evaluate your brand even prior to consideration. And while it’s impossible to measure what clients you may lose by not having this strategy in place, it is clear that a solid marketing strategy of this type can save you from losing consideration — even when you don’t know you’re being considered.
David Fazekas is vice president of digital marketing for Smart Business Network. Reach him at email@example.com or (440) 250-7056.
According to The Business Dictionary, attitude is: “A predisposition or a tendency to respond positively or negatively towards a certain idea, object, person, or situation. Attitude influences an individual's choice of action, and responses to challenges, incentives, and rewards (together called stimuli).”
The words that jump out as important in this definition are:
- Positively or negatively
In light of this, we can say that when we respond to things with a positive attitude, that response influences positive action in us and others. We can also say that the opposite is true.
We could end this article right now by simply saying – As a leader, manager or executive in business; do the former and not the latter. But if you are like me, I bet that you could use some “how to” examples and tips.
Here they are, six tips for having a positive attitude in business:
1. Keep an open mind. Always be open to the possibility that a life change you have refused to consider might be the key to transforming your life for the better.
This type of attitude impresses your colleagues. Why? Because most of them have been faced with the same challenge and chose to not change. Their attitude towards the change has been clouded with self-doubt and lack of courage.
When you are willing to keep an open mind, you are responding positively to the challenge of a life change that has the possibility of a great reward.
Be different than those around you. Be open.
2. Be proactive, not reactive. A reactive individual is at the mercy of change. A proactive individual sees change as a part of the process and takes action to make the best of it.
Having a proactive attitude requires work. You must be able to think ahead and anticipate. It involves being involved.
In business (and life) you cannot simply sit back and let things just happen as they will. In truth, you could, but that attitude is a negative response that influences negative action, namely, reaction.
Do a little mental work beforehand. Get in the game and be proactive.
3. Go with the flow. Present an easy, casual and friendly attitude that shows your flexibility, yet at the same time portrays your persistence in the face of obstacles and adversity.
This is not the negative “sit back and let things happen” attitude described above. Persistence in the face of obstacles and adversity is what sets it apart.
Having an attitude that is easy and casual, without stepping outside the bounds of proper etiquette and being friendly, is some of the best advice I can give to leaders in business.
Be persistent while going with the flow.
4. Think big. If you think small, you will achieve something small. If you think big, then you are more likely to achieve a goal that is beyond your wildest dreams.
When we allow ourselves to have an attitude that pushes boundaries and explores possibilities, we draw in people who have the same attitude. In other words, by thinking big we find big thinkers.
Want to have a team full of big thinkers? Want to have meetings where ideas are shared and positive plans are made? Want to grow leaders out of your team and promote them to new heights in their career? It all starts with your big-thinking, boundary-pushing, dream-inspiring attitude.
Go ahead – think big.
5. Be persuasive, not manipulative. Use your persuasive talents to persuade others of your worth. Don’t use it to convince someone that others are worth less than you.
Have you ever had a manipulative boss? Have you ever had a persuasive boss?
6. Enter action with boldness. When you do something, do it boldly and with confidence so that you make your mark. Wimping out is more likely to leave you stuck in the same old pattern and immune to positive change.
In the end it’s all about getting things done – with a positive attitude. As leaders, we need to be able to move and work with a certain sense of boldness. A boldness that inspires us and those around us to reach for new horizons in all we do.
It’s obvious, action is better than no action – but bold action that leaves a mark is what we should be doing in our life and business.
Do something and do it with a bold attitude.
Attitude really is everything in business. It is the force that empowers us to respond positively to the challenges we face on a daily basis. It allows us to enjoy what we do as we do it. It builds us and our teams.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email firstname.lastname@example.org or visit her website at www.delorespressley.com.
Should hard-nosed, thick-skinned, ice-water-running-through-their-veins executives who live and die by facts and profit and loss statements believe in things they can’t totally understand and certainly can’t explain?
We have all been there. At various times, for virtually inexplicable reasons, an undertaking that has been struggling suddenly takes a 180-degree turn and begins an upward trajectory. There was no indication from the numbers, substantively nothing extraordinary was changed, but all of a sudden, it’s as if the sun, moon and stars all aligned and you are heading toward Fat City.
Of course, we’ve all experienced the converse, when everything seems to be jelling and all of a sudden out of the blue your project takes a nosedive, plummeting to earth faster than the fastest falling star — or the stock market crash of 2008.
Even though you fancy yourself as tough as nails, you must hope against hope, experiment with unusual fixes, devise out-of-the-box solutions — do just about anything, including making promises to a higher power, along the lines of, “Let me get through this, and I’ll never ______ again.” (You fill in the blank as it is best kept between you and the great power in which you believe.)
Don’t get me wrong I don’t really believe in the good fairy or the ability to make everything better with the wave of wand, but I do very much believe what the famous New York Yankees manager Yogi Berra once said, “It ain’t over till it’s over.”
There is “magic” when some inexplicable ingredient kicks in that enables the best leaders to continuously generate “what if I try this” scenarios and then, out of nowhere, one of those ideas turns sure defeat into a salvageable success. Is this skill and intelligence at play? To a certain extent, yes, but there is more to it than that. The only thing I believe about unadulterated pure luck is the explanation from that overused phrase, “The harder one works, the luckier he or she gets.” The real answer more likely is a combination of knowing how to run a business: using your head, your heart and your gut to tackle a dilemma, recognizing that on any given day one of these faculties will get you through a difficult issue. On a great day when all three kick in, it’s almost as if it were magic, and you start hearing sounds that become music to your ears as the needed solution suddenly emerges.
In reality, the “magic” is having faith in the people with whom you work, maintaining a strong belief that for most of the seemingly insurmountable questions there are answers, trusting that good things do happen to good people, and knowing that every once in a while the good guys do win. This doesn’t mean becoming a naive Pollyanna. Instead, it all gets down to not throwing in the towel until you have exhausted all possibilities and logically and systematically explored all the alternatives, some of which may be very nontraditional.
This approach is also a direct reflection of positive thinking and mindfulness, which is the practice of purposely focusing your attention on the present moment and ignoring all other distractions. In essence, some psychological studies have shown that when one is committed to success and has the discipline not to let the mind travel down a negative path, the brain can focus on producing unique solutions. Using positive psychology techniques can result in intense absorption that can lead to coming up with unlikely fixes. Some shrinks call this increasing mental flow. I call it a little bit of magic.
My simpler explanation for this phenomenon, which I’ve written about many times, is that success is achieved when you combine preparation, persistence with a bit of perspiration, along with a few ingredients that can’t always be explained, including having a little faith.
My advice is don’t always worry about your image of being a buttoned-up, corporate type. Instead, when the going gets particularly tough, it’s OK to become a Dorothy, as in the “Wizard of Oz,” click your heels twice and quickly repeat to yourself, “I believe, I believe.”
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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Also available wherever books and eBooks are sold, and from Smart Business Magazine and www.SBNOnline.com. Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.
Effective content strategies empower you to get the right message to the right people through the right channel at the right timeWritten by Dustin S. Klein
Everybody’s telling you that you need a content strategy, but what exactly is content strategy?
An effective content strategy coordinates all of your organization’s messaging — internally and externally — and gets the right message to the right people through the right channel at the right time.
When it works, people are motivated to interact more with your company. You attract new prospects. And you increase opportunities to secure new clients and expand existing business relationships.
Your content may consist of feature stories, press releases, videos, Web content, blog posts, books, whitepapers and even case studies. Essentially, it is everything and anything that discusses your business, professional expertise and ability to solve clients’ problems. It includes news about your organization and human-interest stories that feature your employees.
You can deliver your content through traditional media (newspapers, magazines, radio or television), a corporate website, YouTube channel, Facebook page, e-book, TV show, movie or social media. It is quite literally every single way you digest information online, offline and on the go.
Any content strategy starts with understanding your audience. Learn who that audience is, what different groups are in it and what messaging resonates most with each group.
Every audience comprises two unique segments — those who support you, such as vendors, investors or employees, and those who use your services, including clients and engaged prospects.
It’s also important to take a hard look at this list and ask, “Who is missing from this picture?” By doing so, you may identify new prospect streams to target that you previously had overlooked.
Next, identify your key messages. What is it that you want people to know about your organization and why?
Start at the most macro level so that your brand message becomes part of the content — the part everyone receives. Then get into the specifics. As you do this, you create a series of customized messages for each specific group in your audience.
Third, recognize that not everyone digests information the same way. Learn the best channel or channels to use for each group. Some like to read it — in print or online. Others prefer to watch or listen to it — live in-person or through a mobile video. And still others prefer their information delivered in 140 characters or less.
What works for your website visitors doesn’t necessarily resonate face-to-face with people at a trade show or conference. And print ad messaging may not be aimed at the same people who devour industry whitepapers or read thought leadership articles in trade publications.
The actual format of the content won’t matter as long as it provides the “why” people should care about your organization, frequent your establishment, buy your products or services, or use your solutions. If you accurately match message with audience and channel, you’ll do just fine.
Effective content strategy can quickly become a powerful tool in moving your business forward. Treat it as you would any highly critical strategic business initiative.
Dustin S. Klein is publisher and vice president of operations of SBN Interactive, publishers of Smart Business magazine. Reach him at firstname.lastname@example.org or (440) 250-7026.
When the economy dips into a recession, companies have two basic responses: hunker down to weather the storm or be aggressive by attacking weakness in competitors and opportunities in the market. I have always preferred the latter approach.
During the past two years, our company made several important acquisitions and recruited top talent to forge a new business that positions us as a leading provider of a full range of marketing services for clients ranging from manufacturers and professional service firms to nonprofits and consumer products companies. I am pleased to announce the official launch of SBN Interactive, our content-driven interactive marketing firm.
SBN Interactive is the culmination of months of planning and hard work. It combines our long-standing expertise in creating award-winning content with our intimate knowledge of the latest marketing trends and tools. More importantly, it allows us to leverage our expertise in offline and online marketing to drive measurable business results for our clients across the full range of marketing channels: Web, mobile, video, social and print.
Today, customers move seamlessly across online and offline channels and expect the experience to be consistent, connected and available when they want it and how they want it. What does that mean in practical terms? It means that businesses need to deliver a consistent brand across the spectrum of marketing channels that their customers use. Some prefer print, others video, still others social media. Regardless, marketers need to present the right message to the right customer through the right channel.
Our team of interactive marketing strategists, content strategists, content creators, designers, developers, optimization experts and technologists understand and embrace this. They collaborate to develop strategies and solutions that meet the specific business goals of our clients. From custom magazines and website content optimization to social media strategies and fully outsourced marketing services, they have the expertise — and dozens of proven tactics — to help move the needle for a business.
At the heart of everything we do is our core competency: content. Content drives differentiation, and there are few organizations that exist or are organized in a way to efficiently deliver relevant content in the context of the connected world we live in. But we, at Smart Business, live and breathe content on a daily basis.
We have spent more than two decades working with and writing about some of the most successful business people in America, from iconic business builders like Wayne Huizenga and Les Wexner to maverick billionaires like Ted Turner and Mark Cuban. Now, we are putting those same skills — and many more we have developed over the years — to work for other companies.
We will still continue to bring you management insight, advice and strategy from the best and brightest business minds in the pages of Smart Business. However, thanks to SBN Interactive, we now have a more direct way to help businesses like yours meet their goals and prosper.
I invite you to learn more about SBN Interactive by visiting our website at www.sbninteractive.com or by contacting me directly at email@example.com or (440) 250-7034.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.
Whether it’s a major event such as Hurricane Sandy or simply a snow day, businesses need to be aware of the wage and hour implications of weather-related absences.
“It is important to have clearly defined policies in place that address the many pay-related issues that are involved with a weather-related closing,” says Jenny Swinerton, general counsel at Sequent. “In addition, it’s always a good idea to implement a contingency plan that identifies essential personnel who are vital to the continued operations of the company and establish procedures for communicating with employees regarding emergency closures.”
The same issues apply in cases when businesses close because of an outbreak of the flu.
“This is expected to be one of the worst flu seasons we’ve had in years, so it’s a good time for businesses to review their existing policies to ensure that they address all of the various issues that arise when an employer is forced to close for any reason.”
Smart Business spoke with Swinerton about weather-related absences and how the Fair Labor Standards Act (FLSA) dictates pay requirements.
What happens to employees’ pay when a business closes because of weather?
Employees are treated differently under the FLSA depending on whether they are classified as nonexempt or exempt. Briefly, nonexempt employees are those who are entitled to overtime pay. Exempt employees are those who are paid on a salaried basis and also meet specific legal requirements to be exempt from the overtime pay requirements.
The FLSA requires employers to pay their nonexempt or hourly employees only for those hours that the employees have actually worked. As a result, if a nonexempt employeed are unable to come to work or the office is closed, the employer is not required to pay them.
Exempt employees generally must be paid their full salary for any week in which they perform work. So, if an employer closes the office because of inclement weather or other disasters for less than a full workweek, the employer must pay the exempt employee’s full salary for the week. The employer may, however, require the exempt employee to use vacation or paid time off.
Does the length of a shutdown determine how you handle absences?
It really doesn’t matter for nonexempt employees because they’re paid only for hours worked. So if you shut down for a week, you don’t have to pay nonexempt employees during that time. With salaried employees, unless an employer suspends operations for an entire workweek, they must be paid their regular weekly salary regardless of the number of hours they worked. This becomes tricky with telecommuting because an exempt employee is often going to be checking email or responding to phone calls even while stranded at home during a storm. If exempt employees work for a small portion of the workweek, they must be paid for the entire week.
If you make deductions from exempt employees’ compensation for absences attributed to inclement weather, you may jeopardize the employees’ exempt status and incur liability for any overtime they may have worked.
What happens if an employer’s business is open, but exempt employees don’t show up?
If the employer remains opens during or after a natural disaster and an exempt employee cannot report to work, the Department of Labor considers this to be an absence for personal reasons. But deductions may only be made from the exempt employee’s salary in full day increments. However, it is important to remember that if a salaried employee performs even a little bit of work during the day, employers are still required to pay the employee’s full day salary.
What else should be considered?
Employees who are instructed to remain on call during inclement weather and who cannot use the time for their own personal benefit must be compensated for this time. Additionally, if employees are performing job duties outside their normal scope, such as sweeping the floor, they may be considered a volunteer and do not need to be paid for that time.
Read Sequent’s blog — frequent posts from a wide range of Sequent experts regarding HR, technology and consulting.
Jenny Swinerton is general counsel at Sequent. Reach her at (614) 410-2362 or email@example.com.
Insights HR Outsourcing is brought to you by Sequent
Jim Litten has a saying that sums up his approach to operating F.C. Tucker Co. Inc.: “We are a success today, but nothing is guaranteed for tomorrow unless we have our game face on.”
But it’s not the only line of attack that helped him guide the largest Indianapolis-area residential real estate agency through a real estate market that dropped 32 percent between 2007 and 2009.
“Look at most businesses; if their business was off 32 percent, that would require monumental change to everything they do,” says Litten, president of F.C. Tucker. “Do you quit matching on the 401(k)? Do you put a hiring freeze on? Do you evaluate every single expense line that you have? We went through all those different processes, and as we saw the market continue to contract, we continued to cut. If we saw the market dropped 10 percent, we cut 10 percent.”
While cutbacks were necessary, it was disheartening for Litten to make them and to see his family of agents suffer as a result. Nevertheless, he knew he had another job on hand — to keep up the spirits of his employees.
“As a CEO of a company, you have to be realistic about what’s going on, but you can’t be pessimistic,” he says. “In a sales-driven organization, there has to be a cheerleader that keeps the organization moving forward.”
Litten’s 40-year career in real estate sales has taught him that he needs to keep his associates focused when facing challenges. He says that means not backing off and staying engaged.
“And it’s letting the agents know that we were in it with them,” he says. “The downturn wasn’t something that was their problem; it was all of ours.”
Here’s how Litten leads 1,500 agents across Indiana to stay engaged, focused and on top, with more than $2 billion in annual sales.
Empower, but don’t micromanage
Many leaders understand the value of empowerment. You give your employees more responsibility, they have more control of their position, and they start looking for solutions rather than making excuses.
With empowerment, however, comes the ability to delegate. It doesn’t work if the leader is a control freak. Litten says that he doesn’t micromanage the company’s business units or their leaders. When someone is hired to run a unit, the first thing he tells that person is that he expects him or her to run the operation as if it were his or her own. That doesn’t mean that Litten is unwilling to answer questions or offer guidance.
“But if I have to come out and micromanage it for you, I’ve got the wrong person in the seat,’” Litten says.
While empowerment means more authority for employees, it also means more responsibility — and being accountable. Leaders need to have quarterly reviews with each of the division heads and branch managers and review metrics to evaluate where they are, where the market share is and the growth they’ve experienced in the position. Litten also discusses every agent in the office with their managers to see how they are doing and find out where they may need help.
He says that one of the best indexes of performance is productivity, and if your managers keep an eye on individual productivity, they will be able to manage more effectively where it is needed most.
“You may get fooled by some who can sing a pretty good song,” Litten says. “But the reality of it is just productivity. When I look at the offices, are they doing comparable to what they did the prior year? If not, why not?”
In a smaller office, if there are just a few big producers and they are having an off year, it can impact the entire office. A leader who is tuned in to what is going on will be aware of why that office’s sales are off, and instead of thinking it may be a leadership issue in that office, will be aware that agents are simply having an off year.
“You’ve got to know what is going on in your business,” Litten says. “If levels of management just go through the motions, those days are numbered for them because you can’t do it anymore. You’ve got to know what is going on, what the trends are, what the strategic issues facing you are and how you are going to deal with them.”
Communicate, but don’t hover
While it may seem to be at odds with the practice of empowerment, staying in frequent touch with employees is vital to a company’s success. However, the leader needs to draw a fine line, because if it appears he or she is hovering, employees will not feel truly empowered.
Litten says that coaching is critical. Spend time with associates not only to help them but to simply check in and see what is going on with them. If you fail to do so, it may send a message that you don’t really care enough about them to ask or that you are making assumptions about their situation.
“The worst thing that you can do is to assume that somebody is OK,” Litten says. “You have to touch them regularly. Often, unless you are checking in with them, you really don’t know if there is something going on attitudinally on which you need to work with them or just be a good listener to them and let them come in and vent.”
Your leadership team, and thus the company as a whole, needs to understand what the fuel is that runs the engine. In the case of F.C. Tucker, that fuel is the agents, which is why Litten says it is critical to be plugged in to their needs.
In any business, employers try to retain their top performers. Litten says doing so is even more critical in real estate, as the top performers are usually independent contractors with the option to go elsewhere. Litten uses a sports analogy to make his point.
“Imagine the Indianapolis Colts having a stable of superstar players, with virtually no contracts with them, and those players have the ability to take their talents to any team in the NFL,” he says. “As an owner of the team and coach of the team, you would make sure that you bring value to them every day in what you do and the systems that you put in place, the platform and the tools of differentiation that you give them.
“In our case, if an agent doesn’t like what management is doing, he or she can pick up and move across the street in a New York minute. You don’t want that. Our only real asset is our sales force.”
Use tools to be proactive
Businesses today have to be proactive, says Litten. If they just react to what’s happening around them, it can be fatal.
“And never, ever, ever, ever be satisfied with the status quo,” he says. “One of two things happen in life: you grow or you die. The same thing happens in business. You either grow or you die.”
Business is continually evolving, and if a business tries to rest on its laurels, it will find itself left in the dust, because there is always someone behind you looking to take your market from you.
“Certainly it would be nice to be able to sit back and catch your breath, but business today is just so competitive that if you back off, you become vulnerable.”
To help agents stay on top of trends, changes and sales techniques, F.C. Tucker Co. established Tucker University to offer tools of differentiation for the agents who are interfacing with the consumer and keep the management team’s skills at a game-day level. Tucker University recently started a new sales training class. During classes, Litten usually talks to agents about the company culture, its values and its belief system. He also tells them that the only things they can really control are their attitudes and their activities.
He says that if you can control those two things, you are going to get your share of the market that you are operating in. But if your activity level isn’t top-notch and your attitude is bad — whether it’s because of the economy or worrying about what will happen if the mortgage interest deduction goes away — you will find yourself struggling.
“And if you play the best you can play by being on top of your game every day, you’re going to win,” Litten says. “If you don’t, shame on you; you are going to lose.” ?
How to reach: F.C. Tucker Co. Inc., (888) 588-2537 or talktotucker.com
The Litten file
F.C. Tucker Co. Inc.
Born: Dayton, Ohio. I was raised in a small town called Martin’s Ferry. It’s on the Ohio River by Wheeling, W.Va.
Education: I went to Ohio University on a football scholarship. I studied physical education and was going to be a football coach. When I tell people that, they look at me and say, ‘You’re doing what now?’
What was your first job?
When I was 15, I delivered groceries for a small grocery store in Bridgeport, Ohio. When I became 16, I could drive, so I could go further on the route. I was very blessed. My dad was a salesman for an oil company, and he had a tremendous work ethic. Every morning by 7:30, he had his suit and tie on and was out making calls to steel mills. I also think athletics instilled a discipline in me so that if I were going to get ahead, there were no shortcuts.
Whom do you admire in business?
I have friends in the Realty Alliance. There is a man named Ron Peltier who is president of HomeServices of America, a Berkshire Hathaway company. Ron and I have been friends for 25 years. He’s a good businessman and an exceptionally good person. I have a friend who is a U.S. senator from Georgia, Johnny Isaacson. He used to run a real estate company in Atlanta. I have tremendous respect for Johnny. He is a very, very bright and a very compassionate individual.
What is the best business advice you ever received?
Our office used to be in the OneAmerica Tower (formerly AUL Tower) in Indianapolis. When we bought the company, we were on the 25th floor. My mother and father came up to visit, and my dad was always scared of heights. He walked into my office and looked down. It was shortly after we bought the company. We were sort of all starry-eyed about it, and he looked at me and he said, ‘Son, be nice to everybody on the way up because on the way down, you're going to need friends.’ He was holding on to the side of my desk and looking out the window at the time. My father was just a wise, wise man and just a very good person.
What is your definition of business success?
To be respected by the people who you serve and to be respected by your competitors. You go about doing things the right way, and you treat people the way they are supposed to be treated.
Just because someone holds a position of leadership doesn’t mean he or she is an effective leader. Although there are many analytic evaluations and theoretical assessments that offer insight into leadership ability, many ineffectual “leaders” maintain their positions. Why? Leadership change is hard on everyone. Maintaining status quo is often the easier route.
Here are a few ways to identify real leaders.
? Leaders need vision, character and integrity. Those who do not have these qualities cannot inspire teams or performance or generate sustainable value.
? Performance talks louder than promises. Someone who has consistently experienced success in leadership roles has a much better chance of success than someone who has not.
? The best leaders are keenly aware of how much they don’t know. One of the hallmarks of great leaders is their insatiable curiosity, especially as it relates to their organization.
? Great leaders communicate well, both up and down the ranks.
? Real leaders bear the blame and bestow the credit, not the other way around.
? True leaders also develop, mentor and prepare talent for the future.
For a true test of leadership, give someone some responsibility and see what that person does with it and test their organizational skills.
Develop your inside talent
Do you have someone leading “inside talent development” within your company? If not, you should and for several important reasons.
Companies that build a reputation for aggressively developing their talent keep motivated, effective individuals from looking outside the company for their next promotion. That keeps your organization moving forward, helps prevent employee stagnation and saves money, since bringing new people on board is much more expensive than you may realize.
Someone whom you trust should be spending at least one day per week thinking about, tracking, scheduling, sourcing and driving talent development within your firm.
In growth times, the smartest leaders will look beyond hiring and focus on making the most of their existing talent.
The skinny on meetings
True leaders also hold organized meetings.
I’ve been consistent about my feelings about meetings for as long as I can remember. Simply put, I detest them. Why? Let me make this short, because I have to go to a meeting.
1. No clear agenda. Every meeting should have a clear agenda and a few simple objectives. When you leave the meeting, everyone should know his or her responsibilities.
2. Most meetings delay decisions. You meet, you mull things over, you kick the big decision down the road or, worse, await buy-in. Ridiculous. If you are that afraid to make a decision, you shouldn’t be in management.
3. Too many people. Most don’t need to be there: The evidence? The folks checking their messages and responding to emails.
4. PowerPoint presentations: A waste of time and resources. Almost always a way for someone to show off his/her knowledge. And always too long.
5. Too long. Come together, bring up what’s relevant and decide what works and what doesn’t. Move forward. In most cases, you don’t even need to sit down.
Is there a place for meetings? You bet, provided the result of any meeting is to make your business better.
Are your meetings doing that? ?
David Harding is president and CEO of HardingPoorman Group, a locally owned and operated graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted as one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at firstname.lastname@example.org. For more information, go to www.hardingpoorman.com.
In executive roles at Baker & Daniels LLP over the past 10 years, Tom Froehle had weighed in on some 20 inquiries from other law firms about possible mergers with Baker & Daniels.
However, none of those led to serious discussions until the economy began its downward spiral.
“What we saw during this downturn was that clients wanted to look much harder at value,” says Froehle, who was, at the time, chief executive partner at Baker & Daniels. “Law firms were consolidating, and quite frankly, clients were consolidating in terms of using fewer law firms and looking for firms that had more extensive depth and breadth. We told ourselves that rather than be reactive, we have to try to be proactive.”
That meant going on the offense to find the right partner to create a successful merger. So the Baker & Daniels team started sorting through offers to narrow down the prospective suitors. While doing so, they came upon a firm called Faegre & Benson, located Minneapolis. Froehle said Baker spent a great deal of time trying to identify a partner that it thought would be a good fit, although the leaders could only do so much in terms of looking at websites and seeking out information. They also turned to anecdotal information that they heard from people familiar with the firm. Then they spent a lot of time evaluating and talking with the Faegre & Benson leadership team about the firm’s culture and strategic vision to ensure, before they made a move, that there would be alignment.
Here’s how Froehle, now chief operating partner, and his team scored a win at the newly merged Faegre Baker Daniels LLP, in operation one year now.
Finding a fit
When the topic of a merger comes up, the process can often seem overwhelming, especially when companies of considerable size and expertise are involved. To make the task less intimidating, start by looking at companies in complementary markets to yours, those that occupy the same market position and that serve at the top of their market.
Comparing those statistics gives you a better chance of finding the right fit, and every place in which similarities are identified increases the odds of success. After determining which factors would make or break the deal for your company, it’s time to go through the list to match potential suitors with your company.
“We looked at firms that appeared to have a similar qualitative excellence,” Froehle says. “There is some pretty good data in terms of rankings in those things that can help you identify companies from a qualitative standpoint.”
Then it’s time to look at culture to determine whether there is a good fit.
“On the cultural front, some things will stand out,” Froehle says. “Baker & Daniels was founded in 1863 and Faegre & Benson in 1886. So you had two very long-standing firms. Both firms had histories of civic involvement, with people committed to the community; they did pro bono and were diverse, and we saw really similar cultural values there.”
The next step can command the most time of anything else in the process. It’s time to get beyond the facts and figures and meet with the players face to face.
“A lot of it is just spending time with people; certainly both leadership teams should spend a lot of time together,” Froehle says. “We had what turned into an opportunity when we started discussions in 2010, but there was a client conflict situation that we just couldn’t resolve. That client conflict went away in early 2011, and we recommenced discussions. I think the fact that we had a pretty extended amount of time to spend with each other and to get other partners involved in those discussions helped us figure out whether we thought there was going to be a compatible culture.”
Froehle says it is valuable to flush out concerns early, rather than to wait until after the merger vote occurs. The goal was to combine the firms and the way they did things, so a lot of time was spent early in the process talking about how to develop the best governance structure for a new firm. But instead of taking one thing intact from one firm and another thing from the second firm, they instead approached it to determine what made the most sense so that they could tell the partners what the new firm would look like.
In effect, they built a model of the new company.
“By having that in place, and then being able to share with partners at both firms, ‘OK, here is what this new firm looks like,’ was really helpful in terms of allowing people to deal with the hard part about change, the uncertainty. Although we still have plenty of uncertainty, we tried to provide a real framework of what this is going to look like.”
Working it out
The last task is to determine the mix. This may be the most important task as you discuss common goals to reach a consensus.
“There were those who wanted to do something to not just get bigger but to actually help us serve clients better, and we saw some real synergies and opportunities to combine strong practices that would make even stronger practices,” Froehle says.
“Look for opportunities to complement and supplement strengths in each firm. We had no geographic overlap. Sometimes when you have offices in the same geography, it causes real friction in terms of how you deal with that. We didn’t have any of that, and so we had a lot of additive benefits. I think when people saw that and saw the opportunities to work together, they found that they like each other.”
Froehle says one of the fundamental underpinnings of the merger was the ability it created to serve clients better by providing broader and deeper expertise across a wider range of services. Helping employees understand that and the positive opportunities created has been an important piece of helping them get comfortable with the new organization and create a culture of excitement about being able to better serve clients. Even before the combination was complete, Froehle and his team set in writing what the expectations were of the partners.
“It has been a way for people to buy in to, ‘Here’s what we all expect of each other,’ and that’s been very useful,” he says. “This year, we are in the process of doing a similar thing for our associate lawyers in terms of trying to be much more definitive about what those expectations are, and that is going to be something that was necessarily different from what we had in either of the legacy firms.”
The other issue to address is the clients, as they need to be reassured that their relationships with the firm will not be changing for the worse.
“We went to our top 100 clients over the course of a year to talk about the combination,” he says. “It was interesting to share feedback with other folks in the firm about what we were hearing. Many clients were excited to hear about the new capabilities that were part of the combination. That has been really positive.”
Spread the good news
After the dust has settled and a single company is arising, the task turns to communication and feedback. Sharing positive news goes a long way toward reinforcing the common culture that is being developed.
“We try to open every meeting we have of any kind of group with a sharing of good news,” Froehle says. “These are things that are happening across the firm and with a real focus, at least this first year, on things that involve collaboration of people from the two different legacy firms.
“Those examples have been really helpful to others, who may say, ‘Wow! Somebody I know down the hall has been working with somebody I don’t know and that’s been a really positive thing that will help me be more inclined to step out of my comfort zone.’”
Froehle says that the effort to share good news about effective client collaborations, an additional focus on travel to allow people at the different locations to meet one another and other communication about what was happening across the firm were geared to help people recognize that there was a developing sense of a singular, combined culture. The feedback from those who have had those interactions and the opportunities to connect with each other have all been very positive and have helped to reinforce the internal message.
While recognizing that it would have been easier in some ways to maintain the status quo, Froehle says the long-term benefits of this approach are going to be very positive for the 1,600 employees.
“Obviously, it required the people and the leadership teams from both firms to have that mindset going in, but once they got that mindset, it became really exciting to think about creating something new.”
How to reach: Faegre Baker Daniels LLP, (317) 237-0300 or www.faegrebd.com
The Froehle File
Chief operating partner
Faegre Baker Daniels LLP
Born: Grand Forks, N.D., but I really only lived there for a couple of years. I grew up in and had all my schooling in Bloomington, Ind.
Education: Undergraduate degree at Indiana University in Bloomington and my JD from the University of Michigan in Ann Arbor.
What was your very first job?
My dad operated a small store that sold hockey equipment, so from the time I was about 12 I worked there. My dad ran the business and I sort of helped. I really just learned a lot about customer service, how important each individual customer was and how you could really make an impact on each individual customer’s experience by how you responded. The individual experience of working with customers was really valuable.
Whom do you admire in business?
I really admire John Lechleiter, Ph.D., who is the CEO of Eli Lilly and Co. I admire his vision and his ability to help people in the company to understand what an important role they can play in the world in terms of a pharmaceutical company. I often think people are not all that excited about that but he really has talked about innovation and how they are helping change lives. I think he has done just a really marvelous job of doing that.
What has been the best business advice you ever received?
Two things. One, communication is important. Somebody once told me that no matter what you think, it probably takes you 10 times to say something before people really hear it, listen to it and understand it. The second is to remember that everything you do sends a message to those people around you. That is something I think we often forget.
What is your definition of business success?
Because it is a little bit different, the organizational hierarchy, I think a big part of my view of success is when my partners feel like they have succeeded or at least when they feel like they’ve been a material part in achieving that success.