Indianapolis (1038)

Wednesday, 20 September 2006 20:00

Master planner

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 Several years ago, Lanny Wilhelm sat down with the senior managers of a newly acquired company.

“To my surprise, a number of their staff people had no idea how much revenue the company was doing,” says Wilhelm, president of Indianapolis-based Liquid Transport Corp., a tank truck transportation company. “I was absolutely stunned when I found that out. You can’t hold people accountable if they don’t know what they’re being held accountable for.”

For Wilhelm, accountability is a function of planning. Lay out a clear plan for everyone to follow, and then compare individual results to those goals to make sure your business stays on track for growth. Using this methodology, Wilhelm has grown Liquid Transport from $75 million in revenue in the mid-’90s to $105 million last year.

“All CEOs should have a good plan where they want to go on a year-by-year basis,” Wilhelm says. “They should have a method where they’re monitoring on a daily and a weekly basis that performance.”

And they need to share that information with the people who are expected to carry out the plan.

“If you have a management staff that works with you and they have no idea of what your goals are for the year, how much revenue you want to do, how much pretax, if they’re not part of that plan, they’re just operating from a blind position,” Wilhelm says. “If you share information with people, they know what the goals are from a corporate level and that their respective departments are going to be held accountable for a certain percentage of growth and profit and safe operations.

“They can work far better and be a lot more productive than those companies that just refuse to give people information.”

The process
Wilhelm has taken a dedicated approach to planning since he joined the company in the early 1980s.

“We felt if we focused ... and had the people that were very focused and shared the same vision, we would grow and be very successful as each year passed, and that turned out to be the case,” he says.

While the plan changes year to year, the guiding principles remain the same.

“In the mid to late ’80s, we sat down and knew we had to grow if we were going to be a survivor,” Wilhelm says. “But we weren’t interested in growing without being able to maintain a level of profitability.

“We’ve always been very conservative in managing Liquid Transport, but we also believed we had to take a certain calculated risk in growing Liquid. We were not going to go out and open up terminals throughout the United States, add expense and do things without first knowing we had good contracts in place, good people, and that these revenue bases we wanted to expand into would support those terminal locations and produce some profit at the end of the day for us.”

For Wilhelm and Liquid Transport, planning starts with the budgeting process during the fall.

“Every year in October, we ask our senior management staff to put together budgets for their individual departments for the upcoming year,” Wilhelm says. “Once those budgets are prepared, the CFO and I review them to make sure there is sound thinking behind those budget processes.”

The company’s goal is to grow revenue by about 10 percent each year. Budgets are compiled and compared to the goal.

“If the budgets fall in line where we’re going to produce 8 percent pretax (profit), then we approve the budgets; if they don’t, then we send them back to those managers and ask them to redo their budget plan,” Wilhelm says.

Discussion on the budgets continues from October into December. In mid-December, the plan is rolled out to the managers.

“One of the things I’ll always tell our people in December when we have our senior management meeting, ‘You tell me right now if this plan is workable. If you’ve got an issue and you don’t think what you’ve put in the plan is going to work, then let’s talk about it and make the necessary corrections,’” he says. “After December, when the plan is rolled out, there’s no turning back. Everybody will be held accountable for it. I do hold people very accountable for goals we set for the year.”

Accountability
Holding people accountable means the company must have systems in place to track performance.

“If you want a good company and to have a successful company, you have to be able to monitor and measure activities on a daily basis,” Wilhelm says. “A lot of companies don’t do that. They think they’re measuring, but they’re really not. They may be benchmarking three or four or five items they feel (are necessary) to make their company successful. They should be benchmarking maybe 15.

“We do a monthly P&L and a budget preparation. We benchmark actual performance against our budgeted performance.”

In a month’s time, things can go too far awry, so many of Liquid Transport’s metrics are measured weekly and sometimes even more often.

“We actually do tracking on a daily basis of certain things,” Wilhelm says. “We have a meeting with our senior staff once a month, and we review the prior month’s activities. We do a budget for every month. If something is skewed a little bit or the numbers come in high, then I ask that manager to tell me what caused that problem. Whatever the case may be, I ask him to correct that and have it back in line for the next month.”

The constant monitoring of the business gives Wilhelm a way to check the health of the operation.

“It enables us to react very quickly if the market changes or if we have a business drop,” he says. “If customers ask us to do special things ... that may cause us to spend more money on projects. We know very quickly how we can adjust our budgets based on what the current needs are. Monitoring that on a weekly basis and reviewing it monthly, we can respond very quickly to the market changes.”

The ability to move quickly is one of the things that allows Liquid Transport to continue growing.

“You may have a great program sitting on the shelf, but if you never get it off the shelf, it doesn’t mean anything,” Wilhelm says. “You have to get your program off the shelf and get it into practical use and hold people accountable for those things.”

There are no surprises. Everyone in the company knows what he or she is responsible for, and they have clear access to the information.

Information is broken down into specific categories. For example, traffic accidents are broken down into categories such as lane changes, rear end or crossing the centerline, so that safety or training initiatives can be targeted to correct trends.

“We do a number of different charts and graphs on a daily basis and a weekly basis — not only our safety performance but our overall performance,” Wilhelm says. “Are we giving our customer timely service and delivering loads on time? Are we not having any particular problems with the customer’s plan relative to equipment leaking and things like that?”

When managers do meet expectations, they are rewarded.

“We have a nice bonus structure for all of our personnel, and that’s keyed directly toward achieving pretax profits,” Wilhelm says. “We take a certain percentage of pretax profits, and everyone knows what that percentage is going to be for the year. If we achieve that level, then that bonus pool is divided up amongst all of our managers.”

Focus on the now
When Wilhelm joined Liquid Transport, the company was doing about $30 million in annual revenue. He set a 10-year target of $75 million. That was the last time he employed a long-term strategy.

“A 10-year plan would actually be worthless to us right now with the business base changing so dramatically,” he says. “We did a crystal ball of where we’d like to be in 10 years. We were pretty much on target. Back then it was easier to. You had customers that you had served for many years. The same people were in those (decision-making) positions.

“They could tell you, over the next three years, ‘We’re going to expand into a certain marketplace. If you folks want to go along with us, that’s fine.’”

That is simply no longer the case.

“Chemical companies are merging and closing,” Wilhelm says. “The business base is changing so dramatically from being (domestic to) a lot of the business base controlled outside of the U.S.”

The manner in which business is conducted has changed as well.

“Everything is done on bids today,” Wilhelm says. “The business used to be more on a personal relationship type business where you built a relationship over the years. That customer knew you very well. In today’s environment, that’s not really the case. People in the transportation functions of these companies change almost monthly. There’s not so much of a relationship basis as there used to be.”

The rapid pace of changes makes any in-depth long-range planning pointless.

“Two years from now, the plan you may have is so antiquated it’s not worth spending effort on it,” he says.

That said, Wilhelm does look beyond the coming year while making the yearly budget, but not with any great detail.

“We try to project for a three-year period, but we don’t go above three years anymore,” he says. “To be honest about it, it’s very difficult other than planning for terminal expansions and things like that. It’s hard to do even a three-year plan in this business anymore.”

While Wilhelm’s main plan focuses on the budget for the coming year, the process touches a lot more than just the numbers.

“No. 1, it’s having a strong base of customers that expand and that provide an additional source of revenue to us at (key) geographical locations around the country,” Wilhelm says. “Secondly, it’s having a good plan on the equipment that you’re going to have come in every year.

“You have to look out and say, ‘OK, we need to order 20 new trailers a year or 40,’ whatever the number may be, then budget those numbers. That’s going to generate that amount of revenue for you on an annual basis. You have to make sure that you’ve got the right people in place and a good source of drivers coming in.”

Having the right drivers is key to making the yearly 10 percent revenue growth plan work and is a factor the planning and budgeting process identified. It costs more than $6,000 to train every new driver, and with some 600 drivers, a high turnover rate could be a huge expense for the company, one that could cut deeply into the goal of earning an 8 percent pretax profit.

The trucking industry averages more than 100 percent turnover every year, while Liquid Transport’s turnover is only 37 percent. Because the success of the budget is so dependent on keeping drivers, Wilhelm has created training and development programs to keep turnover to a minimum.

“It’s a very difficult job driving a truck today,” Wilhelm says. “Those companies that don’t respond to the needs of their drivers and all of their employees are going to continue having a difficult time keeping those people.”

And it all stems from the plan.

“Start early in a process, really understand and analyze what you want to do as a company,” Wilhelm says. “Make sure you have a very good game plan in place. Know exactly what you want to do and when you want to do (it). So often you see where companies announce they’re going to do certain things — roll companies together, enter a new marketplace — and they really haven’t thought the process out very far. They don’t really understand the economic consequences of what they’re doing.”

HOW TO REACH: Liquid Transport Corp., (317) 841-4200 or www.liquidtransport.com

Wednesday, 30 August 2006 12:06

Systems integration

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Systems integration projects have been a key initiative in IT for years, and organizations still can’t seem to get it right with a high degree of success. We often read in the news about large IT projects that are dismal failures, and people wonder why millions of dollars were spent with nothing to show for it.

The process usually starts off as a great idea to build a new system to replace X, Y, and Z systems or to integrate these systems into one seamless system to meet a real business need. Key management becomes excited about the new system, a project is formed with proper support and funding, an implementation date is set, and then work begins on a project that “has a life of its own.” Then delays begin to occur, requirements are scaled back, and costs skyrocket. After a while, the project is so large that it can’t be canceled but it doesn’t do what was originally promised.

So why do these things happen? Where did the system integration and design fail? The original idea was good, it enjoyed endless funding and support, and it had teams of smart people working their lives away on it. There are so many resources, books and articles on “what to do to have a successful system integration project,” adding another one doesn’t make sense.

Smart Business spoke with Michael Wessler, the technical manager and a consultant with Perpetual Technology Inc., about some things to avoid, common pitfalls and warning signs with system integration.

What can a business do to mitigate the risk?
Start early, analyze well, and build a system and process architecture that makes sense with no-nonsense, proven technologies. Keep the focus on the goal of the project, not sustaining the project itself. The larger and more complex a project becomes, the more difficult this is.

Did you get the most impressive, well polished group of outside business consultants to define your new system requirements or did you use the inside people who actually know the system and its characteristics? Outside opinions and new ideas are critical, but make sure it is used in the right place.

Are you on the technology bleeding edge? If you are not working at NASA, then perhaps you should ask yourself why you are bleeding edge.

Two clichs are applicable here: ‘projects can take on a life of their own’ and people/projects ‘can lose sight of the forest for the trees.’ A large, long running project can lose focus of delivering a useful end product. When it becomes more important to follow the ‘rules’ then to do the job right and the next timeline or milestone is more important than the final objective, something has gone wrong. At this point management needs to say stop and refocus everyone on what’s really important.

How can a business ensure its program and system subcomponents are all compatible?
Until the system has been subjected to a real, end to end test, you can’t say for sure you have 100 percent compatibility. You have put a system through its paces to know what issues you will face. Today as larger vendors buy smaller vendors and repackage their code at a breakneck pace, no one can honestly say for sure that package X will perfectly interface with Y.

You can help yourself by using technologies you are already familiar with or can become familiar with. Be very wary of any system or product that promises to do everything for you ‘right out of the box’ or ‘with minimal configuration changes.’ On the other hand, don’t be afraid to be use new architectures and technologies in place of antiquated software, but be sure that what you are moving toward will actually work as promised.

Why is it important for projects to have established procedures?
Well planned, documented, and followed processes and controls are absolutely essential to a systems integration project; otherwise you will have chaos. Many projects attempt to meet various configuration management milestones which are important. These are dynamic over time and need to be adjusted when it makes sense.

What is the appropriate way to test a system?
Structured testing cycles and test events are key. Develop realistic and comprehensive test plans and implement them. Make sure these are factored into the timeline of the project and are not sacrificed to meet a deadline. How often do we see analysis and testing which are the most critical stages of any project get shortchanged because of times? This can be a fatal flaw. Don’t send a project on until to the next level of testing until it is ready.

MICHAEL WESSLER is the technical manager and a consultant with Perpetual Technology Inc. Reach him at (317) 510-2451.

Tuesday, 29 August 2006 20:00

Stan Bentley

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 Change. Few words in business are more powerful or more intimidating, and change is one of the inevitable factors that evy business leader will have to deal with, says Stan Bentley, president of Diversified Systems. In his 34 years leading the privately owned, 400-employee printed circuit board manufacturer, he has had to adapt numerous times in an electronics business as notorious for breakneck-speed evolution as it is for its market volatility. Change has taught Bentley that a CEO needs to have the strength to lead change, and the stomach to make the tough decisions that come with it. Smart Business spoke with Bentley about leading change and adapting to it.

Get everyone to buy in.
The way you get your factory side and your office professionals to buy in to change is radically different. When you’re dealing with the factory side, it is reduced to equations and very detailed statements of facts and numbers and quantitative things where people can look at the numbers and make a decision.

When you get to the professional side of the house, you get into qualitative and, in some cases, discretionary items that are open for discussion and debate. In that case, you can’t write as precise an equation of the anticipated result.

Consequently, it’s very difficult to sit down with a set of figures and show what should happen. You have to believe in the process and you have to believe in your tools, and our experience is that professional people don’t do this. As a result, you get a wait-and-see attitude from your professionals, which flies in the face of a team approach.

You must get them to buy into the process of change, which means you must get them to participate in the creation of the process, not hand them the process. So the most basic concept of, ‘Let’s send a team out to handle this problem’ and then have that core group tell a larger group, ‘Here’s what we’re going to do’ seems logical, but it is precisely the wrong approach with a professional work force.

In our case, we take a very small core team that thinks of the task in a global basis. The core group then looks at every step in the process and divides it into a series of very small increments, then involve the professional people in each of those areas, working on various increments while the top-level team tries to tie everything together.

Cut bureaucracy.
Some folks do two very human things when it comes to change. The first is they want to make it all about themselves. They want to take their small piece of the process and turn it into the most important piece of the process.

That, reduced to its essence, is bureaucracy. If each department does that, you have bureaucracy in an eyeblink.

What the company leaders have to do is continually evaluate the output of these departmental teams and look at it against the total objective. If those in the departments have added a process that makes no sense, we must find a way to get them to eliminate that step.

You must also face the very real possibility that there will be casualties during this process, that there will be people who simply cannot deal with this change. They might be very valuable people, but if you cannot get them to understand the need for the change and get them to sacrifice for the greater good, they will either leave the company or you will have to ask them to leave.

Once you start on this process of change, you must be committed to a successful conclusion. It can be hard and incredibly traumatic at times.

Keep communicating.
You must communicate constantly in a time of change. There has to be something that your employees see that convinces them that there is improvement happening, because they don’t always believe it.

The first element of change is chaos. Chaos, to a person who is resistant to change, is proof positive that change is a bad thing. So you have just written a prescription that seems to have no solution.

If chaos is the first and most necessary element of change, and yet a person who is resistant to change would use the chaos as an example of why the change is not good, how can you ever get past that?

It comes back to trust and communication. At the end of the day, those two tools are the things that will win or lose the battle. You must have both.

If there is mistrust, the communication is irrelevant. If the communication is not there, the trust will break down. Those two elements must be there to give you the highest probability of success in a time of change.

Know that you might lose customers.
There might very well be customers who will not make this transition with you. They may have liked it the way it was, but if you do the proper soul-searching, you have to come to the conclusion that if you are correct about the need to change the culture and the market of your company, and you have a customer that does not believe that is important, one of you is wrong.

If it’s you, obviously you’re going to take your company down the tubes. But if it’s your customer that is wrong, they won’t be around. So are you really losing a customer, or simply impacting the timing of losing them?

You have to be very pragmatic about determining where a customer is in their life cycle. If you’ve built the same component for a customer for 10 years and they build a standard product and this product is sold into a very stable industry that hasn’t changed in 10 years, I would contend that product is in the waning years of its life cycle. Projecting the next five years at the same revenue would be very foolish.

We look at where we think customers are in their life cycles, and it helps us determine if we think they’re going to be there as we move and change. We look at things in terms of a global market, and a mature product is probably not dealing with a global market.

You have to throw out a lot of the stuff that most of us were taught 20 or 30 years ago. One of the big terms was customer lifetime values, what the value of a customer will be over the lifetime you have them.

I don’t know if you can make that kind of analysis now, certainly in our business, because the market might change faster than they are able to. We might lose them for no reason within our control. They simply couldn’t adapt and survive in a changing market.

HOW TO REACH: Diversified Systems, www.divsys.com

Monday, 28 February 2005 19:00

Power play: Chrysler 300C SRT8

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The Chrysler 300 has received just about every accolade there is, including Motor Trend’s coveted Car of the Year award and inclusion on Edmunds' Editors’ Most Wanted list. With four model variations — from the entry-level 300 starting at a ridiculously low $24,000, to the top-of-the-line, HEMI-powered 300C at about $35,000 — Chrysler seemed to have every driver covered. But the automaker, reinvigorated under the leadership of German CEO Dieter Zetsche, wasn’t willing to rest on its laurels.

Figuring 340 horses from the 5.7-liter, V-8 HEMI wasn’t enough, Chrysler turned the 300C over to its Street and Racing Technology unit. Its first step: boring out the cylinders to provide 6.1 liters of displacement, a 6400 rpm redline and 420 pound-feet of torque at 4800 rpm. Oh, and another 85 horses. That brings the total to a whopping 425 hp.

Even more remarkable: The 300C SRT8 has a base price just south of $40,000 and should be in showrooms this spring.

Exterior
The SRT8 gets a number of exterior design changes to set it apart from the rest of the clan. Most obvious are the body-colored bumpers, door handles and mirrors, as well as special SRT badging. A more practical change comes in the form of redesigned front and rear fascia to provide air ducting for brake cooling.

Powertrain
Whoever said you shouldn’t mess with success didn’t work for SRT. The gang at Chrysler’s tuner division changed virtually everything about the already great V-8 HEMI that powers the 300C. From the block to the intake to the exhaust, everything gets reworked. All of these improvements get an anticipated 0-to-60 time under 5 seconds and a quarter mile in under 14 seconds, according to Chrysler. In a nice tip of the cap to the original HEMIs of the ’60s and ’70s, the engine gets an orange-painted cylinder block and black valve covers. The only transmission offered is a five-speed AutoStick providing fully automatic or manual shifting.

Suspension, Tires & Brakes
Lots of Mercedes-Benz technology went into the 300 from the outset. But all that extra power prompted some changes. The SRT team used larger anti-sway bars, Bilstein dampers and Brembo four-piston disc brakes fore and aft. The 20-inch forged aluminum wheels are shod with Goodyear F1 three-season tires. The overall ride height has been lowered as well.

Interior
For the price, the 300C already comes with a nicely appointed interior. It’s not exactly Mercedes quality, but Chrysler clearly is spending a few more bucks to upgrade interiors, something Detroit’s other two automakers could learn from. Upgrades for the SRT8 include suede seat inserts, an adjustable pedal cluster and textured leather trim on the steering wheel, shifter and door pulls. And a speedometer that reaches 180 mph.

FOR MORE INFORMATION: www.chrysler.com

 

Wednesday, 23 February 2005 19:00

Upping the ante

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When Bentley’s Continental GT debuted last year as the luxury automaker’s “entry-level” coupe, the fastest and sexiest Bentley ever was the hottest car on the market. It quickly sold out of its first-year production run, leaving such luminaries as addled rocker Ozzy Osbourne scrambling to buy one.

Even as dealers continue to talk of getting premiums on the new 2005 model, Volkswagen-owned Bentley is raising the stakes with a super-luxe treatment from its Mulliner custom coachwork division.

The new Mulliner Driving Specification package — which Bentley says was driven by customer demand for a sportier look — includes 20-inch, two-piece alloy sports wheels; sportier treatments inside; indented hide for the roof headlining; diamond-quilted hides for the seats, doors and rear quarter panels; and a choice of piano black or dark-stained burr walnut veneer.

The Continental GT lists at $155,990; the Mulliner treatment adds a mere $11,000. Here’s a quick look at what else you get with the Continental GT.

Exterior
Based on the VW Phaeton’s steel platform, the Continental weighs in at a hefty 5,358 pounds. Atop that frame sits a Bentley body like no other: a beautifully aerodynamic two-door that is thoroughly modern though retains Bentley styling cues from decades past. One look and you know wht they say you ride in a Rolls, but you drive a Bentley. This car screams, “Drive me!”

Interior
If the exterior has you fooled, just slip inside and you will know you are in a Bentley. With the Mulliner Driving Specification, the cockpit now features drilled alloy sport pedals and a new gear level featuring a Bentley-logo knob and aluminum surround. Exquisite leather also gets the full winged logo treatment, as well as the classic Bentley diamond-quilted hides found in the Arnage T.

Powertrain
The 6-liter, twin-turbo W-12 produces an impessive 551 horsepower at 6,100 rpm and 479 pound-feet of torque at a mere 1,600 rpm, more than enough to compensate for the car’s heft. If you want Ferrari-like acceleration look elsewhere; but if 0 to 60 in 4.7 seconds and a top speed of 198 mph is sufficient, then the Continental will get you where you need to be on time.

FOR MORE INFORMATION: www.bentleymotors.com

 

Tuesday, 22 June 2004 13:03

Keeping it in perspective

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Someone needs to tell you the truth about the economy. I need to put the economy in perspective by telling you that all the doom and gloom in the media is not the whole story.

There are cries of alarm as manufacturing jobs are eliminated and service jobs are sent overseas. This makes for great headlines, but it doesn't give you the whole picture.

Rising productivity is the root cause of much of the ruckus, generating higher profits, lower inflation and a strong housing market, and increasing stock prices. But productivity generates wealth before jobs.

Earlier this year, consumer net worth hit a new peak of $45 trillion -- up 75 percent since 1995. Corporate profits as a share of national income are at an all-time high, and so is the net worth of many individuals. So what's all the negativity about the economy?

According to Business Week, offshoring isn't really a problem. Unlike in most previous business cycles, productivity has continued to grow at a fast pace right through the downturn and into the recovery.

One percentage point of productivity growth can eliminate up to 1.3 million jobs a year. With productivity growing at an annual rate of 3 percent to 3.5 percent rather than the expected 2 percent to 2.5 percent, the reason for the jobs shortfall becomes clear: Companies are using information technology to cut costs -- and that means less labor is needed.

Of the 3 million jobs lost over the past three years, only 300,000 have been because of outsourcing to another country, according to Forrester Research.

As for those 3 million jobs, that number comes from a Department of Labor survey of mainly larger companies. This figure can be somewhat misleading because the department measures job loss in several ways. One survey of workers showed a job gain of more than 750,000 between January 2001 and January 2004. So it is reasonable to conclude that there may be 3 million jobs lost, but most are coming from large corporations.

Smaller and mid-sized firms are adding these employees back to the work force and driving the economy forward. It is the smaller enterprise that is the job-growth engine that hires the people Fortune 1000 firms cast off.

Don't believe the hype. The economy isn't as bad as it's made out to be. If your business isn't performing, then start looking for productivity gains before you fall hopelessly behind.

Wednesday, 04 February 2004 19:00

Kissing cousins

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For years, auto industry wags have called Volkswagen the German car you drove until you could afford the BMW/Mercedes/ Porsche that you really wanted.

If that’s truly the case, then the arrival last year of the VW Touareg and Porsche Cayenne comprises the perfect one-two combination. To keep costs down, the companies shared development costs, engineering resources and production efficiencies. While neither automaker would call the SUVs the same, they are certainly kissing cousins.

The new vehicles are big — and risky — bets by both carmakers. The Cayenne moves Porsche beyond its revered status as a premier maker of two-seat sports cars into the hottest auto segment, providing the added financial safety of a broader product line. As former Porsche Cars North America CEO Fred Schwab says, the Cayenne is a “bet-the-company SUV.” Working in Porsche’s favor: 40 percent of its customer base also owns SUVs. The Touareg, along with the upcoming Phaeton sedan, marks VW’s foray into the luxury car segment under its own badge (it owns Audi, Bentley, Bugatti, Lamborghini and Rolls-Royce). Maker of the world’s top-selling car — the decidedly unluxurious Golf — VW wants a piece of car buyers’ seemingly insatiable appetite for luxury.

For anyone who hasn’t taken the SUV plunge, the Cayenne and Touareg offer amazing performance along a remarkably broad range of price points. An entry-level 2004 Touareg starts at about $35,000 while the heartier — and recommended — V8 starts at $41,000. The 2004 Cayenne S starts at $55,000 while the ’04 Turbo can easily add up to $95,000 with options. Below we take a look at the Touareg, which has made just about every Top 10 list (including being named Motor Trend’s’ 2004 SUV of the Year) and the Cayenne Turbo, which is, well, a Porsche — and the fastest SUV on the planet.

 

Porsche Cayenne Turbo

Powertrain
The Turbo — a $33,000 price bump from the base S model — boasts a twin-turbo, 4.5-liter V8 delivering 450 hp at 6000 rpm, enough to get the Cayenne’s 5,100-plus pounds from 0 to 60 in slightly more than 5 seconds, just a step behind a nonturbo 911 Carrera. Top speed: 165 mph.

Exterior
While the Cayenne may lack a Porsche’s classic looks, from the front, the family resemblance is obvious. Ride height has a range from 4.56 inches up to a maximum ground clearance of 10.75 inches and automatically lowers as the vehicle’s speed increases (1.5 inches lower at 130 mph).

Interior
The exterior may be unfamiliar, but the inside is pure Porsche. Copious amounts of leather and suede are accented by aluminum trim and the familiar Porsche instrumentation. Five people fit snugly with room behind the rear seats for a modest amount of luggage.

Volkswagen Touareg

Powertrain
The entry-level model’s V6 delivers only 220 hp but is surprisingly responsive thanks to a sharp six-speed automatic transmission. Wisely stepping up to the V8 gets you the same 310 hp engine that powers the Audi A8. VW plans to offer a version with the Phaeton’s 414 hp W12 engine.

Exterior
The name may be silly (say TOO-regg), but the look is refined, taking cues from the Passat. Overall size is on par with far pricier offerings from BMW, Lexus and Range Rover. Underneath, you get 11.8 inches of ground clearance and the ability to ford 22.8 inches of water — for really rainy days.

Interior
Once inside, you are treated to a pleasing mix of real wood, aluminum, leather trim and sensible instrumentation. Don’t expect to haul the soccer team around: the Touareg seats only five. But it is still spacious, thanks to unibody construction, which allows for a lower floor.

 

Friday, 28 October 2005 12:16

Team work

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In 1997, Bruce Robbins founded TruStar Solutions, previously IIRC, and his brother, LeRoy Robbins, later joined the company to help grow it.

“My brother got the company going and got the concept up and running but needed someone to bring it to scale,” says Leroy Robbins of TruStar, a provider of customized recruiting solutions. “What he needed was exactly what my background was. He needed someone with leadership skills, had my HR experience and also my process skills.”

When Robbins joined TruStar in 2000, annual revenue was $1.3 million. By 2004 it had grown to $4.7 million — a 37.7 percent compound annual growth rate. The company is on track for its 2005 goal of $6.9 million, and Robbins is confident that there is more growth in TruStar’s future.

“We believe we can grow faster,” says Robbins, president and CEO. “There are some windows of opportunity in a couple of our markets that we want to take advantage of.”

Smart Business spoke with Robbins about the importance of a team environment and how he instills his core values in his employees.

What is the biggest obstacle that you have had to overcome as leader of a fast-growing company?
The biggest challenge is just keeping up with bringing in the talent that you need to have to be successful. Obviously, we are good at that because we work with our clients on that.

It’s also just challenging to have enough quality people as you grow. All of our growth has been internal. It’s been very measured, and we’re really beginning to pick up steam. The challenge now is to make sure that as we grow, we maintain those very strong core values that made us successful.

What are those core values?
One of the most important core values is being passionate about our clients. We ask everybody here, from myself all the way through the organization, ‘How do we operationalize being passionate about clients? What does that mean in the person’s role or my role? How does that manifest itself?’

In my situation, if I am really passionate about our clients, I need to have good relationships with most of our big clients. But everyone in our organization has to look at that and say, ‘So what does that mean for me?’

The next core value is being nimble and innovative. This recruiting space has grown so dramatically in terms of not only how people do it but what their needs are, how they change year to year and our ability to meet their needs all up and down that recruiting value chain.

Our goal is to customize. That’s one of the reasons we are able to get the business that we do.

What do you look for in employees and how do those characteristics benefit the company?
Talent is critical. We put people through a very stringent process that enables us to assess core values. Are they really resonating with our core values? Is their DNA similar to ours in terms of high integrity, being passionate about their client, being nimble and innovative, driving to succeed and wanting to grow their career? If they can resonate with those core values, then that is a good start.

We work within a team concept. If you can’t work within the team, you really can’t work at TruStar. The sum of our parts is always greater.

We have to have that synergy across people. The way we are able to do that is to make sure that people understand that during the selection process, we are evaluating them, but they need to know as much about us as they possibly can. It’s a two-way process.

Our way of thinking is that this is a covenant position. In this day and time, when people are leaving jobs left and right, we don’t want them to do that. We want them to want to stay.

I’m not nave enough to think that we are going to keep people for 20 or 30 years — that just doesn’t happen anymore. But while they’re here, we want them to be fully engaged and going all out in terms of applying their talent.

You have to give them meaningful work and a good relationship with their peers. Otherwise, you can’t keep them.

How do you communicate your team vision to your employees?
We try to live it. On the leadership team, it is a part of all of our evaluations.

Also, if someone is going out of their way and going the extra mile for a client, we want to recognize that in a public way. If someone is out there and does something that is nimble and innovative in solving a problem, we make sure people see that and they know that it is important.

We will walk away from business if we feel that integrity is a questionable issue there. If we feel that we can’t do the best job for them, then we won’t take it. We want their business, but more importantly, we want our clients to be successful.

HOW TO REACH: TruStar Solutions, (888) 547-4472 or www.trustarsolutions.com

Sunday, 30 July 2006 11:04

A premium audit survival guide

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If premium audit notifications fill you with dread, read on. You can stay calm, cool and collected by following this advice on how to properly prepare for and benefit from the premium audit experience.

“There is nothing more appealing than the silence of a properly executed premium audit,” says Rick Kuharik, director of risk services at Westfield Insurance. “An audit devoid of surprises, disputes and revisions allows the commercial insurance mechanism to operate in a tranquil, uneventful environment.”

A silent audit requires preparation, knowledge and communication. But investing time before an audit can increase the likelihood of estimated exposures matching actual audited figures, with additional premium audits paid or credited with virtually no incident. “The key is to reduce the chances for misunderstandings, which reduces the potential for problems,” Kuharik says.

Smart Business asked Kuharik how to prevent misunderstandings in the premium audit process.

Why is it helpful to have an auditor visit the site?
The auditor is more likely to correctly classify your situation when conducting the audit at your premises. The local accountant’s office may do a great job of summarizing your financial records and advising on high-level tax strategies. But it may lack the knowledge of detailed operations and employee job responsibilities. Ideally, the accountant can meet the auditor at your premises, especially during the all-important first-year audit. The auditor will often tour your premises to get a handle on your operation. A tour with the auditor can help ensure that classifications are based on facts and not on assumptions.

Who should represent companies during premium audits?
The contact person representing your company is critical to the success of the audit. This key assignment must be based on function, not convenience. Your representative should know the business from the operations to the financials. It is even more helpful if they were involved in determining the estimated exposures. In larger, more complex risks, two or three individuals such as the bookkeeper, plant manager and the principal may be required to accurately convey the data. Misinformation is the root cause of audit revisions, breaking the silence of tranquility.

Why is it important to have certificates of insurance on file?
Maintaining current files of certificates of insurance is one of the easiest ways to avoid ‘noise’ at audit. The auditor can simply audit the filing system to validate compliance. This works especially well for large contractors who retain scores of certificates. The auditor can assist in setting up an appropriate filing system with a systematic approach for obtaining and maintaining certificates.

How can businesses ensure that payroll and sales records don’t cause noise?
When classifying a payroll risk, the one manual classification that best describes the risk, not the employee duties, is chosen. Additional classifications are assigned, based on the physical separation of the operation as well as the division of payroll. Certain standard classifications cannot have split payroll, such as clerical, outside sales, drivers and draftsmen. For eligible positions, payroll breakdowns between two or more classifications for a single employee must be validated with a breakdown in the actual payroll records. A percentage split is not allowed.

Speaking of breakdowns, another ‘noisy’ topic is the sales code breakdown. The auditor must be able to validate the division between distinct product sales through record keeping. Not having a proper breakdown automatically places all of the sales into the highest rated manual classification.

Why is it important to conduct an exit interview?
The most effective silencer of audit noise is also the simplest: a robust, frank exit interview. The exit interview should be expected and strongly encouraged.

This is a surefire way to eliminate surprises when the adjustment statement is presented. The auditor will review the description of operations, classification additions or deletions, and the actual premium basis versus the estimates. This gives the company the opportunity to validate the auditor’s assumptions and correct any misconceptions. The auditor is not at liberty to discuss detailed billing or credits due to the limited information concerning endorsements or payments made to the account.

What are final assurances for handling audits?
Premium audit success begins with a reasonable, validated estimate and ends with an accurate measurement of your actual exposures. This success is dependent upon your preparation and cooperation to make the necessary arrangements. Thinking ahead tips the scales in your favor that you will enjoy fair, accurate, cost-effective, timely and silent audits.

RICK KUHARIK is director of risk services for Westfield Insurance. Reach him at (330) 887-0401 or richardkuharik@westfieldgrp.com. In business for more than 157 years, Westfield Insurance provides commercial and personal insurance services to customers in 17 states. Represented by leading independent insurance agencies, the product Westfield offers is peace of mind, and its promise of protection is supported by a commitment to service excellence. For more information, visit www.westfieldinsurance.com.

Friday, 30 June 2006 07:21

Injunctions as insurance

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In today’s fast-paced business world where companies are trying to beat the clock and competition and where executives buy out their competition’s best employees for the best ideas, you must protect your assets.

Employees often are asked to sign a nondisclosure agreement when they are working on a ground-breaking idea or project. This is meant to prevent a person from leaving one company and providing a second company with the first company’s ideas. There are still instances where these things happen, and they can be devastating to the future of a company.

Injunctions are a type of lawsuit used to protect both ground-breaking ideas and products. Smart Business spoke with Tony Paganelli, a partner at Sommer Barnard PC, about how to use this type of lawsuit.

How are injunctions used?
Injunctions are orders used to prevent a defendant from doing something that the plaintiff alleges will destroy or permanently harm its business before a lawsuit gets to trial. If a small computer company comes up with a new program and someone working on that project leaves the little company and leaks the idea to one of the larger leading companies in the market, the larger company will be able to use its power to introduce the product to the market first. This could in turn kill or shut down the smaller company completely.

This type of lawsuit is used when financial settlement is not good enough, because monetary value cannot be placed on the situation. It is also used when awarding money after a lawsuit is useless in saving a company.

Preliminary injunctions are used to freeze’the status quo while parties litigate their dispute. Permanent Injunctions are court orders that require a defendant to do something that it agreed in a contract to do, or prohibit a defendant from doing something such as infringing on a patent or competing with a former employer.

On what grounds can a company file an injunction?
Although the requirements vary from state to state, a party that seeks a preliminary injunction generally has to prove four things.

  • The existence of irreparable harm - This means whatever the defendant is doing is so bad or harmful that an award of money at the end of the case will not remedy the situation.

 

  • The likelihood of success at trial - A court will not give an injunction to a party who will likely lose the lawsuit in the end.

 

  • The balance of harms favors the plaintiff - Meaning the party on the receiving end of the injunction will not be hurt more by the injunction than the plaintiff would be if the injunction is not entered.

 

  • The public interest is favored by the injunction - The injunction sought by the plaintiff advances some public policy goal, such as the enforcement of valid contracts or the protection of patent rights, and the public will not be harmed by the injunction.

How does an injunction benefit a company?
A preliminary injunction protects a company that cannot wait until the end of a full-blown lawsuit to recover monetary damages. This occurs when the conduct by the defendants is so harmful that it will quickly kill or cripple the company. A permanent injunction protects nonmonetary rights such as noncompete agreements, patent rights or other trade secrets. It can also force a defendant to perform its contract obligations when other alternatives are not available.

Sometimes an injunction can indirectly determine the outcome of a trial in a shorter time frame. The plaintiff’s lawyer in a new or existing lawsuit files a motion asking the court to schedule an injunction hearing on a highly expedited basis. Much of the lawsuit is then compressed from 12 to 18 months into 30 to 45 days.

How can filing an injunction be a risk to a company?
A company that unsuccessfully seeks an injunction suffers a major loss of momentum in any litigation. Furthermore, the ruling on the injunction request is often a good indication of how the judge views the case, and may be preview of how the court can be expected to rule at trial. A fast-paced and intense schedule causes injunction litigation to be very expensive. The fast pace also does not allow for much time to prepare. Lawyers must devote all of their time to an injunction for it to be successful.

If a company is granted an injunction, it is required to post a bond that the defendant can collect from if, at the end of the case, it is ruled that the defendant was doing something legal and could have been making money during the period of the injunction.

TONY PAGANELLI, a partner at Sommer Barnard PC, concentrates his trial and arbitration practice in four areas: business litigation, criminal defense, real estate/construction litigation and bankruptcy/debtor-creditor litigation. Reach him at tpaganelli@sommerbarnard.com.