Tornados, floods and other catastrophic events can have a devastating impact
on your business. In addition to possible damage to your own building or inventory,
there is the potential for loss of infrastructure services like power, water, or data
and telephone lines. Road closures or even
complete lockdown of devastated areas are
also common after a severe storm.
“The ability to repair, reopen or relocate
your business can be the key to survival,”
says Corry Novosel, director of Catastrophe
Claims Operations at Westfield Insurance.
Smart Business spoke with Novosel
about how to protect and preserve your
business when faced with catastrophes.
How can business owners mitigate risks?
A well-rounded insurance plan should
consider the possible catastrophic events in
your local geography. Tornadoes, floods
and even a terrorist event in a nearby city
can impact nearly any business at any time.
Until this year, Ohio business owners
would have laughed at the idea of being
affected by a hurricane, but the remnants of
Hurricane Ike struck large areas of Ohio on
Sept. 14, 2008. Winds as fast as 75 miles per
hour caused one of the largest storms in the
state’s history with damage estimates as
high as $1 billion.
How can you uncover commonly missed
areas of vulnerability?
First, you need to consider the ancillary
impact of a catastrophic event. What
impact would a tornado or flood have on
your supply chain or delivery? Would you
lose customer traffic or be unable to access
data, records or billing?
Next, you should discuss often-excluded
causes of loss with your agent. Flood damage, for example, is often not covered
under typical commercial policies. Loss
caused by the interruption of power to your
property or by road closures by municipal
authority may also be excluded.
Finally, think about business income coverage. In many instances, the loss of business income exceeds the cost of repairs to
the building. Even if you are a tenant, catastrophic damage to your building or your
area can result in suspending operations for
weeks or months.
What are the best ways to speed the recovery
Provide good contact information when
you turn in your claim; many times, it is difficult to locate individuals in the aftermath
of a catastrophic event. Also, don’t wait for
your claims person to contact you before
working on your own plan of action. The
sooner you have a plan in mind, the sooner
you can be advised on what is covered.
What are some important dos and don’ts following a storm?
- Do report your loss. Contact your agent
or the 800 number for direct claims reporting to your insurance carrier. The sooner
you notify your carrier of your loss, the
sooner you will be contacted and the
process of handling your loss started.
- Do take emergency measures to mitigate additional damage to your business. In
the end, you may not be covered for the cost of removing flood water from your
floor, but leaving it there for a week while
you await your carrier to call will not help
- Do document your loss. Taking photos
is always a good idea. Keep all receipts for
any emergency repairs. Your policy requires damaged property be available for
inspection. If you must throw out damaged
goods before your claims representative
arrives, be sure to document them before
they are hauled away.
- Don’t panic. Your policy is a contract
like any other. If you are covered for loss
caused by wind, you will be paid for covered damages caused by wind. The best
way for you to avoid coverage surprises is
to meet with your agent on a regular basis
and understand what is covered and what
- Don’t assume your claims person is
familiar with the details of your business.
While it is likely the person handling your
claim has an understanding of commercial
enterprises, you can help him or her by
explaining how this loss is impacting your
operations. Good communication can often
alert your claims professional to coverage
you may not realize you purchased.
What else should businesses know?
Most insurers understand that their
response to catastrophic events is an
opportunity to make a very positive
impact. Keep in mind, however, that the
intake of thousands of losses and the
movement of hundreds of claims persons
to an area that may have limited infrastructure available is, at best, difficult to coordinate. Initial focus is usually on making contact with all claimants and assessing the
most severe losses using the triage system.
Less severe losses may be handled later
with instructions to the insured to make
any necessary temporary repairs and begin
the process of finding a repairer who is
willing to come out and write an estimate
CORRY NOVOSEL is the director of Catastrophe Claims Operations at Westfield Insurance. Reach him at (724) 776-7200 or
email@example.com. Westfield Insurance provides commercial and personal insurance services to customers in 17 states.
Represented by leading independent insurance agencies, the product we offer is peace of mind and our promise of protection is
supported by a commitment to service excellence. For more information, visit www.westfieldinsurance.com.
An October 2007 report by technology market research firm The Radicati Group estimates there were 1.2 billion e-mail users worldwide in 2007. The same study states that the average business user sent and received 600 e-mails each week that year.
Apart from the technical burdens on companies to route and store all of those messages, companies must worry about what is contained in all those e-mails. This is particularly true when the companies, or their employees, become entangled in litigation and the e-mails become evidence.
Smart Business spoke with Tony Paganelli, a litigation partner with Taft Stettinius & Hollister LLP in Indianapolis, about what companies need to know to protect themselves from their employees’ own e-mail messages.
How have e-mails become potential sources of litigation for companies?
Every e-mail message has the potential to become evidence in a lawsuit because it documents a communication between people. This is especially important because people are often careless about what they put in e-mail messages. Since e-mails are time-stamped when they are sent and are difficult to alter, they can be very useful evidence. So I advise clients to be cautious in what they put in e-mails because they may be read by many people other than the intended recipients, including lawyers, judges and juries.
Is a confidentiality notice in an e-mail enough to ensure that what is contained in the e-mail is kept confidential?
No. Just because I put a confidentiality notice at the bottom of my message, that’s not binding upon someone unless he or she has agreed with me to keep our communications confidential. The bigger problem is when a message gets accidentally e-mailed to someone else or it gets forwarded. Someone who is a third- or fourth-level recipient has no obligation to me unless he or she has a separate agreement with me to agree to keep my e-mails confidential. And even if there is a confidentiality agreement, if someone is subpoenaed, the subpoena sometimes trumps the confidentiality agreement. (If you do have a confidentiality agreement, it would be wise to include in that agreement a requirement that the other party notify you that he or she has received a subpoena. That way, you get the opportunity to step in and oppose the subpoena.)
Do companies have an obligation to preserve e-mails or other electronic evidence when a lawsuit is threatened?
Yes. Once companies or individuals are sued or anticipate litigation, they have an obligation to preserve all relevant records including e-mail. The sanctions for parties who fail to do this can be staggering. If I’m involved in a lawsuit, if I think I’m going to be suing someone, or if I think there will be litigation brought against me, I have a duty to preserve relevant e-mail.
What proactive steps can a company take to ensure it avoids any litigation regarding e-mails?
There is no way to ensure e-mails won’t be part of a lawsuit. In fact, such a large percentage of business communication today is done by e-mail that it’s very unusual for e-mail not to be part of the evidence in a lawsuit. But there are ways companies can minimize their risks.
First, companies should educate their employees about e-mail and the potential uses to which their messages could be put. This education should start with a reminder to avoid the ‘reply to all’ button whenever possible. They must adopt policies to control what employees are writing in e-mail messages. The lesson that e-mail should be treated more like a thoughtfully drafted business letter than a watercooler conversation should be firmly instilled into employees’ minds. Employees should also be told that management reserves the right to review all e-mail messages sent or received on company e-mail accounts, and improper e-mailing can be grounds for discipline.
Second, companies need to adopt and enforce e-mail retention/destruction policies. Unless there is a compelling business need to save e-mail messages forever, companies should establish a reasonable period after which all e-mail messages will be permanently deleted (to the extent possible) from company computers and servers. But remember that these policies must be suspended when litigation is anticipated, since the duty to preserve evidence trumps even the most reasonable document destruction schedule.
What steps should a company take after a subpoena has been received?
Immediately upon receipt of the lawsuit, management and IT staff should sit down with their lawyer for a planning meeting to establish three things: One, which e-mail users’ accounts might have relevant e-mails? Two, where are those e-mail messages stored? On the server? On a backup tape? On a BlackBerry? On the user’s laptop? On the user’s home computer? And three, how can e-mails be gathered and reviewed most efficiently?
TONY PAGANELLI is a partner with Taft Stettinius & Hollister LLP in Indianapolis, who concentrates his trial and arbitration practice in business litigation, criminal defense and real estate/construction litigation. Reach him at (317) 713-3573 or firstname.lastname@example.org.
When Bill Corley needed help with part of a $170 million expansion, he turned to his employees.
Corley, president and CEO of Community Health Network, a $1.17 billion health care provider, was overseeing the expansion of his Community Hospital North facility. The patient rooms needed to be as functional and comfortable as possible, so he sought out employee input to help make that happen.
Rather than studying a pile of drab, lifeless blueprints, officials transformed a room at one of the company’s existing locations into a mock-up of the new accommodations. Employees were then asked to provide their feedback.
“You put furniture in it, you put a hospital bed in, you put where the oxygen outlets are going to be, and then you say, ‘What changes do you think we should make?’” Corley says.
Those who had proposed specific aspects of the room had a chance to explain the reasoning behind their idea to the board of trustees. When the project was completed, the pride of those who had taken part was clearly evident.
“We had over 1,000 changes, and they were little things, but they were suggested by employees,” Corley says. “When we had the open house, the employees were there. “When somebody has passion for an idea, I think you engage that person by just asking questions to try to get that employee to fully develop the idea or the concept. By showing that kind of interest and then using someone’s idea and giving them credit for it, you have an employee for life.
“If your employees are an asset, the point is you have to listen to them. When you listen to them, sometimes they have ideas. The question is: How many of the ideas or the improvements do you try?”
Tapping into the imaginations of your employees is a key step to building a healthy and fulfilling culture that will keep an organization moving forward.
“It’s the employees that build the reputation of the company,” Corley says. “A lot of leaders sometimes think it’s them. ... When you read the autobiographies or stories about various leaders, the message almost is that this person was bigger than life. Everybody in the organization helps the organization to be successful.”
By fostering a spirit of enthusiastic participation among his 10,700 employees, Corley has helped Community Health Network to be one of the top 20 integrated health care networks in the nation. Here’s how he does it.
Engage your people
You can talk all day about how passionate you are about your business and how others should feel the same way. But if you want to reach your employees and get them to buy in to your energy, you need to openly demonstrate your passion in everything that you do.
It’s not as objective as passing along information or learning to do a skill. In most cases, it’s not something you can talk about or send out an e-mail to describe.
“Passion comes from your heart,” Corley says. “People often say you can teach people to do things with their hands and you can teach people to do things with their head. The third thing is you need to be able to engage their heart.”
Consistency demonstrates your passion about the direction of the company and a conviction for the decisions you are making.
“In too many organizations, the values on the wall are not exhibited through the behaviors of the leaders on a consistent basis,” Corley says.
“If it’s written on the wall and you aren’t consistent or your behavior does not exhibit those values, then that’s where the culture of the organization becomes different than the values on the wall.”
For example, one of Community Health’s values is based on collaboration.
Corley uses small group meetings to get people to share ideas about how to improve the organization.
He also uses those small groups to pilot ideas before introducing them to the entire organization to see how they might work.
“We always say to people, ‘How can you make a difference today?’” Corley says. “There are situations that come up all the time. It’s a question that every business ought to be asking every employee: How can you make a difference, however small it may be, every day?”
The broader goal of idea generation is to get employees passionate about their jobs and how they can do them better.
“We’re trying to say to all of our employees, ‘Hey, you have two jobs,’” Corley says. “‘One job is to do your job well, and then two, it’s to improve your job or improve the service that you provide.’”
The important issue is you have to make them think it was worth their time to make a suggestion.
“The only way they are going to feel like they got something out of it is did you try it or did you consider the idea seriously,” he says. “If they never hear anything, how many more times do you think they will suggest something?”
One of the best things you can do to help your employees do their jobs is to provide them with good leadership at all levels.
“People leave organizations because they don’t get along with the people that they work with or their manager,” Corley says. “Our managers’ jobs are to make sure that the employees achieve their maximum potential. When the employees perform, they make you look good. Employees want to do the right thing.”
An effective manager needs to be able to relate to his or her people.
“The output of our work is important,” Corley says. “But we emphasize not only the quality of the care but the quality of the caring. Not just to the patient and their family but also to the employee. How do you know whether your organization cares about you as an employee? Do they listen to you?”
Community Health holds a regular twoday course on relationship development. The goal is to emphasize the importance of regular communication about what everyone’s role is in the company.
“It’s critical that people understand what their job is and what the expectations are,” Corley says. “We try to make sure that’s very clear.”
Those discussions about job and expectation should take place in multiple ways. Corley and his managers regularly eat in the company cafeterias in order to interact with employees in a more casual setting.
When new employees join Community Health, they take time to sit down with each group of rookies in order to get to know them a little better.
“It’s a commitment we’ve made,” Corley says. “It’s amazing the number of times people say, ‘You know, I worked for another organization for 10 years, and I never met the CEO.”
The point is to build a sense of team among your leaders and your employees through the sharing of information.
“Provide a lot of information to the managers and leaders because they are the ones who have day-to-day contact with the individuals,” Corley says. “They are the ones that communicate the information. You know that the culture runs through the organization when you hear that directly from employees. It’s when employees take the challenge of improving the exceptional patient and family experience or the exceptional physician or exceptional employee experience.”
Use stories to motivate
An e-mail or memo is useful for passing along the time for a meeting or the latest data to show how your company is performing. But it can’t convey the details that are required to feed the flames of passion needed to help your company grow.
“Stories are much more powerful than memos,” Corley says. “Just about every week, I will tell stories on our voice mail system to our employees about other employees and the significant impact they have had on our patients, other employees or physicians’ lives. The stories are very, very powerful.”
Corley recalled a time earlier in his career when he was a shareholder in a company that made stents for patients. It offered a lesson that stories can come from leaders but also from others both inside and outside the company.
“At an annual meeting of all the shareholders, who did they bring in?” Corley says. “Sure, the president and CEO talked, but they had either patients or patients’ loved ones talking about the stent that they made to save his wife’s life.”
You need to find ways to capture the good things that your employees do and share those moments with others.
“Tell those stories about how one of your employees handled this most difficult situation and turned it into a plus when it was headed for a minus,” Corley says. “It’s positive reinforcement rather than, ‘Oh, somebody did something wrong.’ No, it’s somebody did something right. It really is making sure you want to make this part of your culture and then communicating it to others.”
Developing a culture around storytelling and the sharing of experiences takes time.
“Don’t expect it to be a quick fix,” Corley says.
The key, once again, is consistency. Corley likens leadership to being a parent.
“If both parents are consistent, then there is not a lot of stress in the family,” Corley says. “Mom and Dad have talked about it and both agreed and so it doesn’t matter who gives the yes or the no. The no is going to be from Mom as well as Dad.”
The key to maintaining consistency across the organization is that each department follows the same goals of striving for the best experience for patients, their families, employees and physicians as well as strong growth and financial performance.
Those goals are posted in company materials and continually referred to in meetings and dialogue that take place throughout the organization.
Valuing the work your employees do is the key. “Your employees are your most valuable resource,” Corley says. “They are not a cost. They are a resource and an asset.”
HOW TO REACH: Community Health Network, (317) 355-1411 or www.ecommunity.com
Mark Hall has always thought of himself as a co-worker rather than as an executive.
Hall founder, president and CEO of PinPoint Holdings Inc., which does business as PinPoint Resources says that a business coach set him straight on that several years ago.
“You have to understand that you cast a very long shadow and where your shadow lands has big impact,” says Hall, whose work force solutions firm posted 2007 revenue of $8.1 million. “The attitude of the leader determines the attitude of the pack. It is a conscious choice.”
Smart Business spoke with Hall about the three strategies he employs to manage his staff.
Q. What are your keys to establishing a successful team?
Empower good people to do their job, communicate with them and get out of their way. If you create the stage for your people to be successful, more times than not, they’ll be successful. It’s not complicated.
When I was an employee, I used to hate being dictated to, so we’ve mutually set objectives. Nobody wants to have it slammed down their throat, so we talk about it rationally, look at it analytically, and at the end of the day, they have to make the decision because they’re the one that’s committing to it.
After we set the objectives, they come up with a plan as to how they’re going to achieve the objectives, and that plan is presented to the leadership group. When I approve it, then it’s time to execute. Every week, we have a checkpoint to see our performance against the plan. Plan your work, work your plan and hold them accountable.
Q. How do you measure the success of that empowerment?
Recently, we had two different camps of thought in our leadership group, and our COO played mediator. One side was a little farther left, and another side was a little farther right, and we ended up settling in the middle.
I didn’t have to inter-cede at all. To watch an organization’s leadership grow and arrive at conclusions right in front of you, it’s just incredibly rewarding.
My job is to work myself out of a job. If I have to be there, making all those decisions for them, why do I need them? And I don’t mean that in a cold way. I give them parameters to operate within, but I don’t give them carte blanche. I’m not going to let them go out and do something that’s going to have eternal consequences to the company that I built.
Q. How do you stay out of the way of your team?
It’s terribly hard because you want to be involved in everything, and you take exception at how they do it. I got caught up in the trap of, ‘You didn’t do it the way I would do it,’ and I realized that as long at they’re doing it with integrity according to the legal, moral and ethical values and principles of the organization it doesn’t mean it’s wrong.
That was a breakthrough for me. It helped me begin to let go and give more and more control over, breaking the entrepreneurial grip. If you don’t let go, you choke it off.
My office is physically located within earshot of sales and the guys putting request for proposal responses together.
There are times when I literally have to get up and shut my door because I’m so tempted to throw myself right in the middle of it.
I’m not abdicating the responsibility, but I’m not down in the details. When you have good people that are taking care of the details, you don’t need to be in them.
The way I look at it is, they have the livelihood of 200 families sitting in their hands, and one of those families is mine. If I didn’t trust my employees, they wouldn’t be working here.
Q. How do you communicate with your employees?
It’s all about building relationships. Start with taking one to lunch every single week. Start with the secretary and finish with the VPs, and when you’re done, go back and start again.
You’ll learn more from your secretary and your receptionist about how your business really runs than you will, oftentimes, from your executives because they’re on the front lines. They live it, and they see it.
You spend about 45 minutes just talking about kids and life and church and what they want for their life, and you actually end up spending just two to five minutes on how things are going at work. Employees have to know how much you care before they care what you know.
Employees have to feel as though this lunch is an environment where they aren’t going to be chastised or criticized for speaking their mind. They need to feel it’s OK to disagree.
HOW TO REACH: PinPoint Resources, (800) 371-1948 or www.pinpointresources.com
Many companies require the services
or goods of another company to
make their product or to run their business. As a business owner, your company may never experience a tragic loss or
damage, but what would happen to your
business if one of your suppliers experienced
such a loss? Do you have the proper insurance to cover your loss if your sole supplier
can no longer provide goods or service?
Business income provides for the business
what it cannot provide for itself. Dependent
property takes this coverage to the next level
to protect the business even if the loss happens to a third party on which it relies, says
William V. Reedy CIC, AU, The Learning
Group, Westfield Insurance. Business owners who understand the protection offered
with dependent property coverage and recognize their need are considered savvy insurance consumers and risk managers, he adds.
Smart Business spoke with Reedy about
the need for dependent property coverage,
how it can help protect your business and
how to evaluate your company’s risk to determine if such coverage is needed.
What is dependent property coverage?
Most businesses depend on other businesses to supply them with the raw materials or
finished products they will sell. Conversely,
supplier businesses rely on having other businesses that will buy their product. In both
cases, the business is dependent on another
entity to conduct its business. When a business cannot get the materials or product to
sell, it will experience indirect financial loss.
The fact that it is indirect does not lessen
the loss. Conventional business income
insurance reimburses a business for income
and expense after its own loss. Dependent
property coverage is used to protect a business when the loss takes place at a business
on which it relies.
Why is this type of coverage so important?
Dependent property coverage is extremely
important because the actual physical loss
(fire, wind, etc.) may happen to the business
you depend on and not your business. The
fact that this coverage responds on your
behalf relieves you of the financial loss you
would have had. These losses can be debilitating to a company.
Most business owners and insurance
agents readily identify buildings and business
personal property when they consider property exposures. Business income is sometimes overlooked in this process. Business
income coverage without the dependent
property endorsement will not respond to
the dependent property exposure. It requires
both business income along with the dependent property endorsement to make sure all
dependent exposures are addressed.
Who requires such coverage?
Any business that relies on another business is a candidate for dependent property
coverage. This coverage is especially important and most often provided when there is a
single or short list of key contributing or
recipient dependent property businesses.
For example, perhaps the insured business
makes wooden rocking chairs that are
known for their craftsmanship and quality. It
may only use one particular supplier of hickory that provides the best wood. Since the
chair company bases its reputation on quality, it is dependent on this particular wood
supplier. If the chair company added the
hickory supplier as a dependent property and
a fire occurs at the hickory supplier’s location
(rendering it unable to supply the insured
company with top-quality wood), it is considered a covered peril, since fire is a covered
peril under the policy.
The business income policy endorsed with
dependent property would pay the insured
company the amount it would have earned
until the wood supplier is back in business.
With dependent property coverage, the company is indemnified for the business it normally would have done, and it does not have
to resort to using inferior wood and potentially damaging its reputation for quality.
Are there different types of dependent properties?
There are four main categories of businesses that may require this coverage.
- Recipients: businesses that rely on others
- Contributors: businesses that rely on others to whom they sell their product
- Manufacturing locations: businesses that
sell a product on behalf of a manufacturer
- Leader locations: businesses that rely on
other businesses to draw traffic to their location. An example would be a card shop located near a large retail chain store. The card
store benefits from the traffic and would
experience a downturn in revenue if the
chain store were to close.
How can one determine risk of exposure?
If a business has a number of potential suppliers or available markets in which to sell its
product, then the need for dependent property coverage is not as great as if it depends
on a more limited and thus more important
few. The questions any business owner
should ask are: On what other businesses do
I depend? What would happen if they were
forced to shut down for a month, six months
or a year? Would I lose income as a result? If
the answer to these questions results in identifiable companies that would cause financial
loss if they were out of business, then one
may conclude that dependent property coverage is necessary.
WILLIAM V. REEDY, CIC, AU, is with The Learning Group, Westfield Insurance. Reach him at email@example.com or (330) 887-0859.
Tom Jackson enjoys the freedom that comes with running his own business.
But, he says, there is also a responsibility that goes hand in hand with that freedom.
“Most business owners like the flexibility and the opportunity to make good money,
but if you don’t have a plan in place, that’s going to dry up and you won’t have those benefits,” says the co-founder and CEO of Jackson Systems LLC, an HVAC manufacturing and distribution company.
To help him create that executive game plan, Jackson meets every other week with a business coach.
Smart Business spoke with Jackson about how those meetings — and the lessons he’s learned from them — have helped him grow his business to 2007 revenue of $8.2 million.
How does having a business mentor help you become a better leader?
You sit down together, and the coach’s questions drag things out of you. It makes you realize that if you don’t get your act together here, it’s not going to be a good thing.
My business coach is very into all of the proper things, whether that’s developing long-term goals, mission statements or core values statements. While sometimes people don’t like all that touchy-feely stuff, it makes you think about what you want to do. It doesn’t have to be touchy-feely if you don’t want it to be, but it makes you think about the long-term goals of the company, and that’s probably the most important thing.
In my case, I met my business coach through a colleague here at work, and the relationship developed that
way. My business coach is a small business owner himself, so he has a lot of knowledge to draw upon. Just sitting
down with him and having him ask me a series of questions is a good deal, and sometimes he has a specific topic that we cover, like increasing sales or how to develop the culture at work.
Having someone there to ask you questions, someone who’s an outside sounding board, is really important because
that person’s not there at your company every day, and that person can give you a different perspective over what everyone else in the operation sees.
What lessons have you learned to help you grow your company?
Have your goals written out — people who write out their goals are much more successful than those who don’t have them articulated on a piece of paper.
It’s just the power of the mind. If you take the time to write down the goals, and you review them every once in awhile, your mind just automatically starts working on those things. It knows that is the ultimate endgame, that you’re trying to get to this goal.
The other thing I’ve learned is being smart about borrowing money. We’re not over-borrowed in any way, but one of my goals within the next few years is to have no debt.
If times get bad and you have no debt, it’s a good thing. But, if times are really good and you want to grow the company a lot more, if you’re not saddled with a bunch of debt, you can grow even quicker.
Smart debt management is a key thing. The best thing that we’re doing is tracking it every day. My chief operating officer wrote scripts that automatically generate all of this data for me; every morning I get a dashboard report e-mail that shows me exactly how much money we have borrowed, our accounts receivables and our accounts payables.
We have very defined goals on how much debt we’re trying to get paid down each year, and it all ties back in. If you have the goal and you’ve written it down and everyone knows what those goals are, you start working toward that.
How do you share those goals with your employees?
Every quarter, we have a company staff meeting, and we have these little booklets that are our 10-year road map that we read together. It’s our mission, our values, our strategic position, our target customers, our themes and all of our visions.
We go through those every three months so everyone is in tune with what we’re trying to do. It’s got an objective of lowering debt, and we talk about how we’re doing. I don’t put up a bunch of financials for them to try to figure out, but everyone in the company knows that we’ve got money borrowed, and they know it’s one of our goals to lower the amount of money. Everyone knows what our sales objectives are and who we want our core customers to be.
In the beginning, there were a lot fewer people in our business so it wasn’t as big a deal to share those goals. It shows them that we’re sincerely interested in moving everyone forward in a positive way. It allows our employees to advance their careers and get raises and bonuses.
HOW TO REACH: Jackson Systems LLC, (888) 652-9663 or www.jacksonsystems.com
John Rowe has two basic rules when it comes to communication: Keep it direct, and keep it simple.
The president, managing director and co-owner of $24 million Cargo Services Inc., a global freight transportation provider, says effective business communicators put themselves in front of their employees be it in-person or via electronic means and offer straightforward messages that don’t get bogged down with excess language.
And they don’t stop delivering the message until they are certain everyone understands it.
Rowe says that a communication strategy built around understanding and plain language helps build trust between employees and management as workers begin to believe the actions of the company’s leaders will follow their words.
“Our leadership style is straightforward, and we are quiet and get out of the way. We let our folks know what is expected of them; we get out of the way and let them do the work,” Rowe says.
Smart Business spoke with Rowe about how effective communication leads to a sense of trust in an organization.
Communicate directly. The way we communicate is very fluid. What I mean by that is we communicate through different levels. We have monthly department meetings where we communicate quite a bit of company policy. But most of our communication is done directly via e-mail and face-to-face visits.
The No. 1 point is to be direct and communicate what you need to communicate as brief as you can make it. You want to be direct and to the point and don’t overspeak.
The second thing is to ask questions. Make sure you understand what we’re talking about, if you have any concerns, and make sure you listen.
We communicate in monthly meetings. If we’re in a meeting and I have something to communicate I try to communicate it very briefly, then ask if everybody understands or has questions or concerns. Then I’ll listen. We do the same thing in speaking with our associates on issues dealing with customers.
We just want to make sure they understand what the concern is, what our point is, then we are always asking if there is anything else they need to understand. I try to really gain an understanding that we see eye to eye and that there are no questions. That’s really important. If you go away and there are still questions, other problems might arise.
You want employees to realize that what you are saying is important. Whatever you’re communicating is important so they know that you’re there to communicate whatever issues are out there and help solve any problems that they might have.
We communicate to them upfront that we’re not here to do your job, but we’re here to help you do whatever you need to do, especially if you have issues and problems. We’re here to help you work through those without any repercussions.
If you have a culture of trust built up with your associates, where you know you can go out and speak to them about an issue, you know they’ll understand it, and you can trust that they’ll give you an honest answer.
Build trust from the beginning. When we bring someone in for an interview, one of the first things is that we give them a copy of our company vision and we go through it. We don’t just give them a copy and move on; we spend some time on it.
We go down each point and explain the reasons behind our purpose and our company principles. We ask questions. ‘Do you understand why we do this? Does that make an impact with you?’
As we go through the interview, we still gain further information about their qualities and how their personality would fit in the organization.
We also have department heads and directors interview, so somebody that we’re interviewing for a position speaks to a number of people within the company. Then we make sure we understand from our side what they think of that individual and if they’d fit within our culture. That’s one of the most difficult things you do where we’ve hired and then realized we made a mistake and then had to correct it.
But if you get more people involved in a hiring process and speaking to a candidate, you will have a better opportunity to find out what that person is all about.
Let employees take control. If employees take the ownership responsibilities in what they have, we want them to have the freedom to do what they think is necessary, take care of their duties and tasks and business.
We want them to take ownership in dealing with customers, vendors or suppliers, doing whatever task they have, and we want them to know that we’re very interested in them doing quality work. But we also want them to know that we’re not going to be looking over their shoulder crossing T’s and dotting I’s.
We want to give them the freedom to do the work and give the responsibility to have the ability to do the best work they can, and they know that we’re not always looking over their shoulder and making sure they do everything correctly. If you have a problem or concern, come speak to us. If you made a mistake, it’s no big deal. Let’s look at it, solve the problem, learn from it and move on. If you build that kind of trust with associates, that they can come to you with a problem and not get in trouble, that we’re going to learn from it, I don’t have that need to look over their shoulders and make sure they’re doing things right because I know that they are.
HOW TO REACH: Cargo Services Inc., (317) 244-9501 or www.cargos.com
Robert Laikin does not mince words when asked to explain the
significant slowdown in growth that Brightpoint Inc. experienced
from 1998 to 2002.
“It was my fault as the CEO,” Laikin says.
The wireless device distributor had grown swiftly in the years
prior, hitting $1 billion in revenue in 1997 and $1.5 billion in 1998.
The pace of growth slowed considerably over the next few years.
The industry was consolidating and markets were shifting as
Brightpoint sought to find its way through the changes.
When 2004 rolled around, the company was still looking to get
over the $2 billion mark in revenue.
When everything is going great and revenue records are constantly being broken, it’s easy to talk about the steps you took to
help your company reach those heights. But as the CEO, you need
to be just as upfront about the steps that didn’t work out.
“As the CEO, you have the responsibility to be the lead communicator of your company,” Laikin says. “Our customers know if
they have a problem, if our people aren’t doing what they promised
to do, they will get to the CEO who will either fix the problem or
be honest with them. ‘You know what, there was a weather problem with snow and there was nothing we could do.’ At least they
are going to get an answer.”
By looking beyond the numbers to find out both what drives his
employees to succeed and what they are lacking in their efforts to
do so, Laikin has good answers to give when the calls come in.
He makes it a point to stay in contact with his employees through
a variety of methods both in person and electronically. When the
media calls, Laikin makes time for interviews. When employees ask
direct questions, he provides them with a direct answer rather than
a response through his secretary.
Through it all, Laikin says he always speaks from his heart.
“If you don’t speak from your heart and tell people what you
stand for, you are going to be perceived that you stand for nothing
and that you are sitting in your ivory tower,” Laikin says. “Just
speak the truth. Speak what’s in your heart as CEO. If you do that,
you’re typically going to give the message of what you believe in.
If you can’t give the message of what you believe in, my guess is
the CEO doesn’t believe it himself.”
Sometimes, the message that Laikin wants to give doesn’t come
to him until moments before he speaks. Before a specific meeting,
Laikin and one of his trusted advisers, Anurag Gupta, will prepare
“I’ll get up to the front and get behind the podium, and I’ll look at
Anurag and I’ll smile,” Laikin says. “He’ll know what it means. That
means I’ve just taken the script and put it in a ball and I’m going to
shoot from the hip.”
While it’s from the hip, Laikin says the key is that it’s also from
By believing in Brightpoint and conveying that belief to his 3,300
employees, Laikin has kept the company moving forward.
Brightpoint took in $4.3 billion in 2007 revenue and now has a
presence in more than 25 countries around the world.
“I believe people do business with people, not companies,”
Laikin says. “We tell our story as people, not as the company. We
tell the story and tell people about Brightpoint.”
Reinforce words with actions
As the lead spokesman of your organization, it is your role to
communicate your vision for the company and for the execution that is needed to make it happen.
Your attitude about doing so can go a long way toward determining the success or failure of that execution.
“When we sit around the table, we don’t operate it as a dictatorship,” Laikin says. “It’s more of a collaborative working environment. We empower our people.”
People need to know what’s expected of them in order to do
their job. You can never communicate your company’s values and
behavior standards enough, whether it’s through an e-mail blast or
a quarterly newsletter.
“Things like the customer is always right,” Laikin says.
“Complete customer satisfaction is what we strive for. Focus not
only on your customer, but your supplier. It’s OK to negotiate as
long as you do it in a respectful manner. It’s OK to disagree with
your co-workers as long as it’s done in a respectful manner.”
You also reinforce your values by your behavior. When Laikin
travels around the world to his company’s international locations,
he makes it a point to do more than just preach from the lectern.
“I might present an overview of the company as a whole for
someone in Sweden, but we also have a lot of informal time where
people can approach me,” Laikin says. “At our dinners, I don’t sit
at the table typically with our country manager of Sweden. I’ll walk
around and talk to the people whether they are in sales and marketing or the warehouse or in finance. I move around a lot.”
Laikin also brings others along, such as his chief financial officer
or the company’s general legal counsel or a vice president, to give
their own presentations to the group.
Training should also play a role on how employees are supposed
to handle various situations. When a new office opens, the new
employees who will work there are often brought into the home
office for a series of training sessions.
When you have people going to work in a different culture, you
want them to be familiar with both your vision and the values of the culture to which they are traveling.
“When a key corporate person goes to the field, let’s say they go
to Sweden or Australia or India, they are briefed when they land in
the country by the country manager and or the regional management team,” Laikin says. “Typically, they’ll brief them on local custom.”
The bottom line is that you need to constantly reinforce your corporate values to your people if you expect them to buy in.
“We spend a lot of time communicating with the key folks in each
region and the key leadership teams as well as talking about the procedures of how you do it,” Laikin says. “Then communicating what’s
agreed to within the senior leadership to the broad employee base
in the different regions. We share a lot of what’s said and discussed.
We overcommunicate to the broad base of employees. That helps
people who are part of the leadership team say, ‘You know what,
what I said was heard. It was thought about, and it was considered.
Every two or three years, Laikin sends out an e-mail to every single one of his employees. He asks each employee to tell him what
he or she does at Brightpoint, how long he or she has worked for
the company and how the employee believes he or she has made a
difference at the company.
“Tell me what you would do if you were the CEO for the day,”
Laikin says, mentioning the final question he poses in the e-mail. “I
hit a global e-mail, and it goes to 3,000 employees, and I’ll get back
2,000 responses. I read every response, and I respond within 48
hours personally back to every person thanking them for the time
they took to e-mail me and also talk a little bit about what they
Laikin says he has received countless good ideas from the e-mail
blast. He learned about the potential for products from Garmin, a
leader in the navigation device market.
“That gave me the idea to reach out to the CEO of Garmin with a
cold call, which six months later turned into a distribution agreement with Garmin,” Laikin says. “I probably wouldn’t have priori-tized Garmin unless one of the people in the field had urged me to
Laikin says he sometimes gets flak from other CEOs he knows
about the time he invests in the e-mail correspondence.
“Friends of mine I’ve talked to told me I’m crazy,” Laikin says.
“‘Bob, you spend two days responding to 2,000 e-mails?’ I consider it a privilege I had that one-on-one contact with 2,000 individuals to tell them how I appreciated what they did for the company.”
CEOs who have a proprietary technology or who work in a
monopoly can afford to keep more to themselves.
“But if you are in any kind of competitive business, you have to
listen to all your people,” Laikin says. “I foster a culture where I tell
all our global employees it’s OK to e-mail me at any time. In certain
cultures, people are told never to e-mail the CEO. I try to foster a
culture where people know it’s OK to reach out throughout the
Laikin views himself as the key spokesman for his company. And
by initiating dialogue and making himself open to his employees,
he encourages them to talk about the company with others.
“People who are in the company tell the stories and see what is
happening and tell other people and bring people into the company,” Laikin says. “If you do a good job at telling your story in your
space and industry and in the public markets, people want to come
work for you.”
Employees need to know that the same rules apply to everyone
as far as the behaviors and practices that are acceptable and those
that are not.
Brightpoint has a whistle-blower procedure in which a third-party
service is used to handle calls from employees with concerns.
“Any employee can call and say, ‘I think something isn’t being
done correctly,’” Laikin says. “We investigate it, and we take everything seriously. When it’s appropriate, we take actions pretty quickly.
“We are all held to the same standards. We’ve had situations, like
with all growth companies, where you have different employee
issues, whether it’s harassment, etc. Employees know that it does-n’t matter if you are the CEO or a senior manager or an entry-level
person. When people don’t adhere to what is reasonable, typically,
they don’t last at the company.”
Through regular communication and by operating with as much
transparency as is possible, you give your employees a clear sense
of what your company’s values are. You also reinforce the idea that
everyone is on the same team working toward the same goals.
“It’s company newsletters and webcasts and getting your message
out there all the time,” Laikin says. “At the end of the day, we stick
to the message and we overcommunicate it, whether it’s on our Web
site or in e-mails or continuing education about what values and
ethics are. ... The commonality is that people want to be respected,
and they want to be treated with dignity.
“Some of the easy things are branding or strategy or financial
goals. Those are easy messages to get out there and to execute on.
The cultural parts about the right way to do business, the honest
way to do business, the legal way to do business and the way to do
fair business, those are the things you educate people on over time.”
HOW TO REACH: Brightpoint Inc., (800) 952-2355 or www.brightpoint.com
Rick Dennen answers his own phone, types his own letters and sets his own calendar and he expects his employees to do the same.
“Everybody in the company is involved in the leadership,” says the co-owner, founder, president and CEO of Oak Street Funding. “Everybody in this company contributes to the bottom line of this business.”
Declining to hire administrative staff is one way that Dennen, who founded the company in 2003, keeps overhead at a minimum at the commercial finance company serving the insurance industry. Today, the business has 36 employees and posted 2007 revenue of $15 million.
Smart Business spoke with Dennen about how he hires his staff members and fosters their leadership skills.
Q. What is the key to growing a successful company?
The key is hiring good, ethical, talented people and giving them all the resources that they need. That includes technology and proper training to accomplish their job in the best way they can.
Q. How do you find the best people?
Our most successful employees have come from referrals from other employees and from colleagues. If they’re good, we’ll find a place for them.
If you could find somebody through your own referral network, they seem to have a higher success rate. People can put a lot of different things on resumes, and it’s tough to validate that.
We try to have many people interviewing candidates. I try to at least walk in and introduce myself, if I know a candidate is in, and be a part of all that.
Q. How does having other employees interview candidates help you find the best people?
It’s important so they get a different perspective. I don’t want them hearing just my perspective on the culture. I might be a little bit biased, being the founder. I want other people’s perspective and honest feedback on what the job entails and what the dayto-day is like.
We undersell versus oversell. I don’t candy-coat what their job is going to be or how hard it’s going to be. I take the opposite approach; I tell them that it’s going to be more difficult so when they come in, they’re happy. If a company over-sells, they immediately have a dissatisfied employee.
Q. How do you ensure that a job candidate will fit into your culture?
We try to introduce them to as many people as possible, and we explain our family-based culture. That’s clearly a top priority for people when they come to work here.
They still have a job to do, but if they’re happy at home, they’re happy here. That goes a long way for job satisfaction, turnover and all those types of things.
People aren’t working 50, 60, 70 hours a week, but they’re going to learn the business and be around here over a longer period of time. Having that tenure in a company is more valuable than working people and blowing them out the doors every year.
Q. How do you invest in your employees’ futures?
We do leadership training once a quarter. We bring in an outside company and put together a long series of leadership classes.
We’ll shut the company down for about four hours and focus on leadership or team-building, something that’s going to make these people better. We also hand out a book for the employees to read after the class, like ‘The 21 Irrefutable Laws of Leadership’ by John Maxwell or ‘Good to Great’ by Jim Collins.
These books are tied into the training that we’re doing.
Q. How do you determine what the training will focus on each quarter?
We look at gaps that we have in the company. Maybe it’s a sales gap, communications training or just management leadership everybody being held accountable for their actions. Rarely is it technical. It’s more of the soft skills that you need.
Everybody needs to be a leader here, and everybody needs to have good skills. It makes things run better. The company is going to be more successful if everybody knows they have a job and knows that they have decision authority. They need to be a leader to make the company the best company it can be.
Q. How do your employees know they have that authority?
I communicate it to my people. My philosophy is, ‘It’s better to ask forgiveness than it is permission. My people know that, and I encourage them to make decisions. When people first come in, they are a little hesitant to take that approach, but a good leader will make the right decisions, and it speeds things up.
It’s good diversity for the company to have more than just one person making decisions. The business can’t grow if one person is making all the decisions because things just get bogged down. One person can’t be everywhere; they can do that when there are five people in the company, but as it grows, everybody needs to be making decisions.
HOW TO REACH: Oak Street Funding, (866) 625-3863 or www.oakstreetfunding.com
In 1995, Bob Peterson was one of the founders of Norcross Safety Products LLC. The company began with a single plant in Rock Island, Ill., which produced and marketed protective footwear.
NSP has successfully grown through organic growth combined with strategic acquisitions. Under Peterson’s vision, NSP has diversified into three segments general safety and preparedness, fire service, and electrical safety within the personal protective equipment market through acquisition of trusted, long-standing and well-recognized brands.
Key acquisitions, such as Morning Pride, North Safety Products and KCL, helped establish NSP as one of the most comprehensive product platforms in the personal protective equipment market and expand its global reach. NSP has continued to make acquisitions and, in total, has successfully integrated 12 companies into its operations.
The company is recognized as a leading provider and innovator of head-to-toe personal protective equipment. The company has 24 locations in nine countries throughout the world.
In addition to the successful strategic acquisitions, Peterson led the drive in 2005 to obtain additional financial resources through the sale of NSP to Odyssey Investment Partners, a private equity firm. This transaction provided valuable resources that allowed NSP to continue its successful track record of growth.
Peterson believes that NSP can continue to grow organically and improve its profitability through new product introductions, cross-selling opportunities, cost-savings initiatives and international expansion.
HOW TO REACH: Norcross Safety Products LLC, www.nspusa.com