National (1572)

Saturday, 26 December 2009 19:00

3 Questions

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Monty Ferdowsi has more than two decades of experience in the telecommunications industry and has more than five years of experience as president of Broadcore, a nationwide provider of hosted unified communications services. He has worked with VoIP development for much of the last decade, both as a professional and as an educator.

Q. How might business owners and executives be able to benefit from installing a VoIP network?

One of the benefits of being able to have IP is geographic independence. The IP network allows you to take your phone to a larger network, perhaps over the Internet. The traditional network, the TDM (time-division multiplexing) network, isn’t as portable. You cannot easily take that out to a remote site; it isn’t transportable. The IP network gives you that transportability.

Q. How have you seen your customers take advantage of that portability?

Customers can take their phones outside of the managed network — they can, for example, take it home and hook it up to their cable modem or to their DSL — and that allows businesses to be very productive. They can take home a phone if they need to because of the flu virus or because of traffic. Maybe it would be a good idea to allow people to work from home for a short period of time.

Q. What are the security concerns and dangers of a VoIP network as compared to a traditional network?

Once your voice hits the public Internet, if somebody is sniffing the Internet, they can get not just your voice conversation but any information that you have on the Internet. So it’s not so much that somebody is entering your network — that’s what a firewall does, it keeps people out — but when you’re trying to communicate with the outside world, you’re actually sending packets out, and if somebody has the capability to come in and sniff it, your information is out there. For small and medium businesses, I don’t see how that can be an issue. But if you’re taking your phone over the public Internet, obviously, anything on it can be monitored.

Saturday, 26 December 2009 19:00

Phoning it in

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Let’s face it, there’s a lot of business being done out of the office.

I’m not talking about lunch meetings, golf outings or mixers. I’m talking about the little device that’s most likely attached to your waist that you couldn’t possibly live without. It allows you to leave the office without leaving your business behind. E-mails find you no matter where you are, stock prices stream directly to you, and people can call you when something big happens. And the gizmos are also pretty good at helping you kill time at the airport.

The problem is that the technology is advancing so fast that it’s hard to keep up with what phone is best for your needs. Maybe you find the phone you need, but will the network it’s on give you the coverage to keep you from being out of touch with your business?

There are a lot of questions to sort through to find the right device. For instance, up until a few years ago, BlackBerry was the business standard. But it won’t integrate with every business’s network, which can be an inconvenience. The iPhone has come on strong, but is it a consumer device with spotty coverage or a can’t-live-without-it handset with no problems? Depends on who you ask. What about the other phones that are out there? Would they be a better choice for what you use it for? Droid is generating a lot of buzz; would it be the best choice?

For all of these questions, if you query 10 different people, you’ll get 10 different answers, and they’ll each point to a “must have” function that only comes on one phone or another. And if you wait 10 minutes, the technology will change again.

I just got used to my old phone, but now it’s outdated. Navigating through this technology maze to find a new phone takes time and effort, and there are no clear answers. Some people simply give up and use two phones because they can’t find one that has all of the features and coverage that they need. The industry is advancing so quickly that it’s almost impossible to catch up. By the time you find what you like, the next great thing has arrived on the shelves, and everyone has moved on.

But if you want to be efficient and have the convenience of being in touch with the office no matter where you are, you are going to have to take the time to do a little research to find the phone that best fits your needs.

Look at all the features available and prioritize what’s important to you. For me, I focus on the basic function of the phone — making phone calls. I don’t want to miss an important call while I’m out of the office. But be wary, because the best “business” phone with its multitude of features may not necessarily be the best phone for making and receiving phone calls.

Go to a store and try out anything you are considering. Some of the phones have buttons and keyboards that look like they were designed for elves instead of humans. If every time you try to dial you are hitting four different numbers simultaneously, is this really helping your efficiency? Touch screens are cool, but are you comfortable using one?

The key is to narrow down your choices with some basic research, then go out and give your finalists a test drive before committing to one. While it might be difficult to figure out which phone, which network and which applications are for you, in the end, it’s all about staying in touch in a way that works for you.

But no matter what direction you decide to go, don’t forget the most important feature of all: Can you make a phone call on it?

Wednesday, 25 November 2009 19:00

Dollars and sense

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You might not think of your accountant as some sort of bean counter, better suited for the Dark Ages than for the Age of Information. Most folks, after all, recognized the error of that thought years ago.

You also might not think of that same accountant as a trusted business adviser. But you should.

Gone are the days when your accountant would just sit down with the company ledger and crunch numbers. An accountant is able to offer so much more now, especially in this economic state.

Need to evaluate your inventory turnover, to analyze what is selling, what is not and why? An accountant can do that.

What about an examination to make certain that all available credit lines are being used or that capital needs are being met? An accountant can do that, too.

And, of course, there are taxes, an area where there has been so much evolution that one industry expert says he estimates the number of allowable tax incentives and minimization techniques has more than doubled during the quarter of a century since he analyzed his first set of financial reports. Another expert says the number has more than tripled during that period. Whatever the actual amount of exponential growth, there is no doubt that accounting is more complicated, and more important, than ever.

“In a down economy, companies are focusing typically on making decisions about costs and expenses,” says Drew J. Sutter, partner in charge of audit and enterprise risk services, Deloitte. “They are evaluating their overall business strategy, evaluating their processes and service lines and products.

“Because we work with many different companies to help them tackle their business challenges, to help them analyze issues and implement leading practices, I think we’re well positioned to bring a broad range of knowledge to the individual client and be a business adviser.”

Talk with your accountant

The key to bringing your accountant into your proverbial inner circle is communication. Nothing is more important, just ask an accountant.

“We might be talking with our clients on a weekly basis or even multiple times per week,” Sutter says. “That personal interaction really let’s me get to know them as people and establish that trust that I want to have as an auditor.”

Without some level of constant and consistent communication, your accountant cannot know the full spectrum of activity within your company and, in turn, might be unable to offer constructive criticism and potentially prosperous ideas and suggestions. The more communication between you and your accountant, the more opportunity and the higher the possibility you will receive a far more favorable result.

Many industry experts recommend you plan to get together with your accountant for at least three or four formal meetings per year, though multiple variables might swing that number higher or lower, including the size of your business, the challenges you are facing now and expect to face during the course of the next year, and the strengths and weaknesses of your internal financial team. Others recommend more casual meetings or phone calls in order to communicate on a regular basis.

Whether you meet around the boardroom table or over beers at your favorite bar, take advantage of that time to ask your accountant important questions, like how can you best utilize your accountant? What should you do internally? Externally? And what are your priorities for the next year?

A high level of communication with your accountant can also lead to you becoming more comfortable around each other. Your accountant should be familiar with many of the folks on your upper management team, and you should be familiar with many of the folks who play top roles for the firm.

“The mutual value to the accountant and company relationship is maximized when professional service providers have a clear understanding of a company’s strategy, business imperatives and issues,” says Mark Stephens, managing partner, San Diego office, Ernst & Young LLP. “Executives should meet with their accountants as often as necessary, especially in these volatile times.”

Take advantage of financial opportunities

The reason so many accountants prefer to be so involved is because the more information they know about you and your company, the more areas they will be able to explore in order to save dollars and cents. And saving dollars makes sense.

“The more the accountant knows about the company, the more value he or she can add on important business issues,” Stephens says.

But the burden of trimming the budget lies not only with your accountant — you need to do your part, too. So be organized, be prepared, be proactive and be accessible.

Just consider the average audit. If your files are scattered around your office, stacked in piles that are toppling over, an audit performed by your accountant might last far longer than it should. In order to avoid a heftier bill, keep your internal financial team on a schedule to update your books regularly, perhaps even every day. Exorbitant costs for an audit — or even just a review or a compilation financial statement — are normally only incurred when you are not organized and prepared.

“A comprehensive financial statement close process is very important,” Stephens says. “Businesses should take the time to close their books properly and review their accounts for accuracy and integrity. The company’s executive team should meet with the auditor early in the planning session and ask for a comprehensive assistance guide to fully understand what’s needed by the auditor, and in preparing for the audit, the company should identify the need to apply new accounting standards and conduct research, gather facts and prepare a memo proposing recommendations.”

If you are particularly strapped, you might even consider consulting with your accountant and other business advisers to consider altering the end of your fiscal year from the end of the calendar year to the end of another quarter. That would allow your accountant to work with you less during the peak months of January through April and more during the off months, when rates are far less expensive. And though such a shift is filled with internal and federal paperwork, the potential savings of such proactive measures can reach more than 20 to 30 percent.

There are even extreme situations where you might be able to save hundreds of thousands of dollars because you and your accountant are both accessible and open to conversation.

Several years ago, one industry expert was working with a client who had installed defective materials in a sewer and storm drain system, and lost thousands of dollars. Though the client was able to file a claim against the manufacturer, the expert was also able to find a case law that allowed for the property loss to carry back 10 years, a far longer retroactive period than the standard two or three years. The result? The client received $500,000 in large part because the expert had been involved in the situation from the start and because the two sides were accessible to each other.

“Our goal is to be a trusted business adviser to our clients,” Sutter says. “Any time there is an important business event or an issue pops up, the company will be talking to us so that we can help them.”

Wednesday, 25 November 2009 19:00

Do you work to live or live to work?

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Is your work the means to an end or the epicenter of your life? Most businesspeople, on a conscious or subconscious level, want superiors, peers and other constituents to believe they are one of those unselfish corporate types who do whatever it takes for the good of the company. Everything comes in second place: family, friends and one’s very existence, including creature comforts such as adequate sleep and eating three square meals at a table, not a desk. If that is you, then you have checked the “live to work” box.

But wait a second, does this really make a modicum of sense?

When I interview management candidates, after I have determined the interviewee might be a fit, I always ask: “What comes first, your family or your job?”

Those who immediately respond “my job” move down multiple notches on my scale of suitability if, in fact, I believe this is their permanent sentiment.

For a chance to play in the big leagues, most wannabe executives will do whatever it takes to make the lineup. The smart ones, however, know that just like a good novel, a business career has a beginning, middle and, hopefully, an abundance of exciting last chapters.

When aspiring managers begin ascending the corporate ladder, many work as if the clock has no hands. Toiling away at their desks from early morning to the wee hours of the night is an investment in the future to gain experience, a means to accomplishing meaningful objectives and, yes, to a certain degree, an opportunity to obtain face time, sometimes even vying for the coveted corporate appearance trophy. Those who go for appearance alone, without the meat on the bones of accomplishment, are easily unmasked as having a “big hat but no cattle.”

However, hitting the trifecta of experience, accomplishment and the ability to showcase a “get it done” work ethic makes for the complete package.

Once a manager reaches a certain midpoint in a career and has a few good people working for him, he moves from the role of solo doer to that of teacher and navigator who can successfully direct others along a process from point A to point B. Appearances are secondary at this point, as the key is what is in the package, not the wrapper.

During this stage, the middle manager should have that “aha” moment recognizing that business is not an all-or-nothing proposition and he can get a life. I admired any employee working for me who without equivocation would state he could not meet with me at a time that I requested because of another important commitment, which could be attending a kid’s ballgame or a first school play. This communicated volumes to me about the manager’s character and ability to balance priorities and make appropriate choices that fit the circumstances.

On other days, however, I would see this same manager looking like death warmed over the next morning because he just pulled an all-nighter to get the needed task done.

A real game-changer occurs when one reaches the ranks of senior executive with a team of players in the anteroom who are more than ready, willing and able to answer the bell. This gives the leader the opportunity to plan rather than just do, calling the signals instead of responding to them. Priorities change as the executive becomes a dreamer — a visionary who can look beyond today to tomorrow, identifying the future challenges and opportunities, and positioning the organization to respond to them.

In many respects, this is both the best of times and the worst of times. The best is that the leader has others to do the heavy lifting. This provides the executive the time to make other contributions, not just to the company but to his family and community, as well. The worst-of-times component is that the buck stops at the leader’s door. Important decisions have to be made daily, and that pressure can take a toll both mentally and physically. At this point in a career, the need to balance becomes something that is just not nice but necessary to endure the pressures at the top.

An all-time best fast-food jingle positively asserted, “Hold the pickle; hold the lettuce. Special orders don’t upset us,” with the payoff line of “Have it your way.” The secret of having it your way in business is learning when and how to balance a career with a fulfilling personal life.

Michael Feuer co-founded OfficeMax in 1988. Starting with one store and $20,000 of his own money during a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling it for almost $1.5 billion in December 2003 to Boise Cascade Corp. Feuer is CEO of Max-Ventures, a retail venture capital/consulting firm, and co-founder and co-CEO of Max-Wellness, a new health care product retail chain concept that is launching in 2009. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at mfeuer@max-ventures.com.

Monday, 26 October 2009 20:00

Firm commitment

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Paying a lawyer may be the last thing you want to think about. But when it comes to keeping your company afloat, seeking counsel can be your life vest.

During troubled times, you need an adviser who understands your business and your leadership personality. While many CEOs see trips to the lawyer’s office in terms of dollar signs, keeping ahead of the legal curve will pay off in the long run.

“Sometimes people, especially in a difficult economy, don’t want to spend upfront on legal fees, but it really does save in the long run,” says Kevin W. Alexander, managing partner of San Diego office, Gordon & Rees LLP.

Your attorney can be a valuable member of your cabinet who provides strategic advice to boost your bottom line. By viewing your lawyer as a business partner — and his or her fee as an investment in your company — you can capitalize on your lawyer’s legal training and experience.

Develop an effective relationship

By understanding where you’ve been and where you’re headed, your attorney can help you navigate the corporate waters and avoid legal icebergs. But the only way he or she is going to acquire that knowledge is through open discussions.

“If you don’t talk to your lawyer, you both can really lose touch with what’s going on,” says Dick Kintz, San Diego/Del Mar managing partner, Sheppard Mullin Richter & Hampton LLP.

While some matters, such as tax tips, can result in tangible savings, others may not show an immediate fiscal return. Still, it’s hard to image what costly bumps you may encounter without the foresight of a seasoned professional.

“It’s sometimes painful to have to pay a legal expert upfront, but it will save a lot in the long run because you avoid lawsuits and disputes,” Alexander says.

The best advice at the right time can save a bundle. However, you can’t be shelling out for unnecessary discussions. Thinking through an issue before calling your lawyer makes the best use of his or her time and your money. Routine situations, such as hiring matters, may be handled by your human resources department, where more complex situations, like harassment claims, require immediate legal attention.

If a matter requires a meeting with your lawyer, prepare notes, gather documents and create an agenda in advance. Sending information to your attorney ahead of time lets him come prepared to address the issue. Ensuring that the appropriate people are in the meeting or available on-call can avoid a costly follow-up.

“I like to be prepared when I go into a meeting and know what we’re going to talk about,” Kintz says. “If I’m totally unprepared, I may have to say, ‘Let me get back to you,’ and I can be more efficient than that.”

Investing in appropriate communication builds a long-term partner. However, it’s important to trim away excess chatter. Designating one contact person in your company eliminates the chance of your lawyer giving the same advice twice. If you have a recurring document, such as a purchase agreement, ask your attorney to approve a form you can use repeatedly, without getting his or her OK each time.

“You can cut down legal fees by using templates a lawyer has given you,” Kintz says. “Then, when you have a real deal that will close, have the lawyer come in and bless it at the end.”

If you are hesitant to call your lawyer for fear of being charged by the hour, you may find relief in negotiating a flat rate for some services. Flat fees work best with a finite project, such as trademark filings. With many companies anxious to budget their costs, most attorneys will discuss alternative fee structures.

“It’s much more common now, particularly for transactions and certain types of repetitive work where we know what steps it will go through,” Alexander says.

The billable hour makes sense when it is unclear how much attention the matter will require, such as litigation. In hourly situations, it’s wise to ask for the person with the lowest billing level who can perform the work well. A junior associate can handle smaller issues in exchange for a slimmer bill. With complex matters, it is more efficient to pay a higher hourly rate for a fast-working, experienced partner.

“Too many clients call up and say, ‘What is the hourly rate?’” Kintz says. “You tell them and they’re shocked. I think the mistake they make is they go to the firm with a lower billing rate, but they don’t talk about staffing. One or two very knowledgeable people can be much more efficient at higher billing rates than five or 10 people working on a matter at lower billing rates.”

No matter the billing structure, be sure to get a written contract that includes not only the services and the rate but also builds in checkpoints where the lawyer will call to discuss progress.

When your business is moving along, it’s beneficial to check in with your attorney at least once a year. Such interactions make you a household name in the firm and can result in better overall service.

“They should meet once a year, and it doesn’t have to be a long meeting,” Alexander says. “If they have an annual meeting, make sure the lawyer at least knows about or is involved in some way.”

Find the right fit

Before you turn over your spreadsheets, make sure your attorney complements your style. You may be eager for your day in court, but your attorney is best in settlements. Being on the same page is imperative to long-term success.

But finding a legal mind that matches your corporate spirit is no small task. As with other services, it’s wise to get recommendations from your colleagues. Referrals from your current professional team, such as your banker and accountant, can be especially helpful. Also consider the lawyer’s role in the area.

“If you can find a lawyer who is exceptionally qualified and is doing great work for someone you know and respect, you saved yourself a whole lot,” Alexander says.

Consider where others in your industry get their legal advice. Intimate knowledge of your market is priceless when it comes to staying on top of regulatory changes. And the legal relationship is bound by attorney-client confidentiality, so you can sleep easy knowing your company’s dark secrets aren’t being broadcast.

“The best way is to talk to people in the business community who are successful and whom you respect and ask them — even if it’s your competitor,” says Alexander.

Once you’ve identified a few lawyers, schedule brief meetings with each. While many firms can handle the technical work, it’s important to find someone you feel comfortable with. Ultimately, the better you and your lawyer know and understand each other, the more hazards you can avoid.

“I think most lawyers try to keep their clients out of problems,” Kintz says. “If the company heeds the advice of the lawyer … they can avoid some hot water.”

Monday, 26 October 2009 20:00

Understanding IATs

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As the number of Automated Clearing House (ACH) payments continues to climb — more than 3.8 billion in the fourth quarter of 2008, 5 percent more than the fourth quarter of 2007 — the National Automated Clearing House Association (NACHA) has had to ramp up the rules and regulations that govern these types of transactions in order to align the NACHA operating rules with the Office of Foreign Asset Control (OFAC) compliance obligations.

A NACHA ruling, which took effect on Sept. 18, is quite noteworthy and will affect businesses across myriad industries. The ruling introduces the International ACH Transaction (IAT) Standard Entry Class code, which will impact every financial institution in the United States, as well as any foreign or domestic organization that sends payments into or receives payments from the United States, provided that the payments are processed through the ACH Network.

An IAT is a payment transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the United States. An office of a financial agency is involved in the payment transaction if it holds an account that is credited or debited as part of the payment transaction; receives funds directly from a person or makes payment directly to a person as part of the payment transaction; or serves as an intermediary in the settlement of the payment transaction.

“In other words, an IAT is an ACH payment transaction that is either originated by, processed through or delivered to a non-U.S. bank,” says Darla K. Mick, the first vice president of treasury management sales at Comerica Bank.

Smart Business learned more from Mick about IAT and how to prepare your business for the changing regulations.

Why has the IAT regulation been implemented?

Post Sept. 11, the OFAC recognized the need to end anonymity and promote traceability in international electronic payments, regardless of how many borders were crossed. Due to the potential terrorist-financing threat posed by small wire transfers, countries are aiming for the ability to trace all wire transfers and minimize thresholds, taking into account the risk of driving transactions underground.

Before IAT, it was difficult for depository financial institutions to identify domestic transactions that may have had international parties involved. They need to know this to comply with U.S. law. Foreign countries have different laws and rules governing electronic payments that may impede a U.S. bank’s ability to reverse or recall erroneous transactions or extend the time frame in which transactions can be returned. This can expose the bank to risks, including the exchange rate risk that domestic ACH payments do not present.

What is the ‘travel rule’?

The Bank Secrecy Act’s ‘travel rule’ requires the originator’s bank to include the name, address and account number of both the originator and the beneficiary. The travel rule detail must accompany transactions.

What might happen if businesses choose to do nothing?

Your payees may experience a disruption in service. Transactions that may have previously appeared to be domestic but are now considered international under the new IAT classification may be returned or delayed. Rules violations related to these transactions can result in significant penalties imposed by OFAC.

If my payroll needs to be sent as IAT, could my employees’ availability be affected?

Yes, for two reasons. First, IAT credit entries delivered to the receiving financial institution by 5 p.m. on the day before the settlement date are not required to be available to the receiver at the opening of business on the settlement date. The transaction posts on the settlement date, but it could settle as late as the close of business.

Second, if the IAT were found to be suspect during the OFAC review, the transaction must be held until the issue is resolved and the item is either cleared or identified as an OFAC violation.

As a corporate originator, what type of due diligence do I need to do with my employees to determine if they are sending their funds out of the country and if we should be coding their payroll as an IAT?

You should have procedures in place to notify employees about IAT and inquire if they are sending their paycheck out of the country. NACHA has created a sample document that you can provide to your employees and vendors so they can inform you whether IAT may be required for their payment. This document is posted on NACHA’s Web site.

What other considerations are there concerning IAT?

It is important that all businesses have a strategy for how they will handle transactions going outside the U.S. To help develop this strategy, NACHA has many tools for corporations on their Web site, as well as a series of Webex sessions to prepare business for IAT. For more information, visit www.NACHA.org.

Darla K. Mick is a first vice president of treasury management sales at Comerica Bank. Reach her at dkmick@comerica.com or (408) 556-5959.

Monday, 26 October 2009 20:00

Remember your purpose

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“And I still haven’t found what I’m looking for.”

Does the chorus of this well-loved song echo a message that’s always playing somewhere deep inside you? I don’t mean on the surface. On the surface of your life, you’re busy — so busy that questions like this can frustrate or even anger you. But even if you’re frustrated, stop and think for a moment. Is the message there?

I know it is because it’s there for me, too. And I know from personal experience that throughout even the happiest, most fulfilling life, you can still feel a calling to something more, a sense of purpose that pulls you forward.

You’re conscious of this calling when you’re doing something that feels especially right.

You might be writing in a journal or dabbling with watercolors and canvas. You might even be teaching a group of students or solving a complex problem at work. Whatever it is, when you’re doing it, you lose all sense of time and you feel a level of energy and peacefulness that seem to elude you in your day-to-day routine.

For me, these moments always came in my professional life when I was teaching. As an executive, I consistently created situations where I could deliver a passionate message, usually to those in leadership. A close friend once remarked that he thought running a company was simply the price I paid for the opportunity to teach the leaders. I didn’t realize it then, but he was speaking a great truth about my calling.

You’re also conscious of your calling when it’s absent.

Have you ever noticed in a special moment — a moment when everything else in your life is going well — that you still feel something’s missing? When you feel this, you may berate yourself for never being satisfied with things as they are or some similar inner criticism. But often, something far more powerful is at work.

A homing pigeon can be placed in a container with no ability to see, taken hundreds of miles away, and when released, it will fly directly home. Like the instincts of a homing pigeon, these moments confirm that there is a vision inside you of the life you were born to live. And in every moment of every day, they are guiding you home.

You may not always be aware that you’re searching.

The pull of your deeper calling can come and go, sometimes disappearing for entire seasons of your life. Often, it can seem to haunt you, bringing pain and frustration, and make you determined to put it behind you once and for all. But still, it returns. And in returning, you are reminded again that you were born for a purpose.

Today, I spend my professional life doing what I love most: teaching others about leadership and life. And I can say without any hesitation that every experience of my life has led me to this moment, that I have never been happier and that I know there is still more to come.

The challenges of these times are hard and may have caused you to do whatever was necessary to sustain your life in the short term, for yourself and for those you support. But you must not give up. The greatest human tragedy is to abandon the search for what lies in the deepest part of your heart.

Remember that you have a purpose.

The larger story of your life is still being written. When it is finished, your current challenges will be little more than a footnote, but following the constant calling of your heart will have led you home.

Jim Huling is an executive consultant, a national keynote speaker and a professional coach. His leadership experience spans more than 30 years, including a decade as CEO of a company recognized four times as one of the “25 Best Companies to Work For in America.” Jim is also the author of “Choose Your Life! a powerful proven method for creating the life you want.” He can be reached at jim@jimhuling.com.

Friday, 25 September 2009 20:00

3 Questions

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Brian Mulvaney has specialized in commercial real estate in the San Diego region for more than 22 years. As a senior vice president at Voit Real Estate Services, he has extensive experience in owner/landlord and buyer/tenant representation as well as investment and consulting services. Mulvaney is the Certified Commercial Investment Manager San Diego Chapter president.

Q. What opportunities face the commercial real estate market?

Traditionally, a business in a landlord’s market would have to go out to the market and likely relocate or negotiate a deal similar to what they can find in the market. Today that could occur, but it’s going to be at a lower value for the tenant, a better value for the tenant. They’re going to be able to do one of a couple of things: They’re going to be able to save money in their existing location or they’re going to be able to move up into a better space, a higher quality space, which allows them to maybe attract better employees, have a better business environment.

Q. How can you save money on real estate?

Really the way to save money on real estate today is consider moving or renewing early to take advantage of things we’ve been talking about, the lower rent, but also other concessions that may not have been available over the last couple of years. These concessions are free rent, refitting allowances or tenant improvement allowances that are above and beyond what a landlord was paying in the past. The second would be consider buying a property at the now lower values. … We have seen a decrease, a fairly substantial decrease, probably 20 to 30 percent so far in the asking prices of properties.

Q. When should you renegotiate your lease?

If you have a lease, especially if it’s expiring in the next six to nine months, you definitely want to renegotiate now and take advantage of this because it’s going to be a tenant’s market for who knows how long without a crystal ball, but its certainly going to be six, nine, 12 months.

Special Report

San Diego

3 Questions

Brian Mulvaney, senior vice president, Voit Real Estate Services

Brian Mulvaney has specialized in commercial real estate in the San Diego region for more than 22 years. As a senior vice president at Voit Real Estate Services, he has extensive experience in owner/landlord and buyer/tenant representation as well as investment and consulting services. Mulvaney is the Certified Commercial Investment Manager San Diego Chapter president.

Q. What opportunities face the commercial real estate market?

Traditionally, a business in a landlord’s market would have to go out to the market and likely relocate or negotiate a deal similar to what they can find in the market. Today that could occur, but it’s going to be at a lower value for the tenant, a better value for the tenant. They’re going to be able to do one of a couple of things: They’re going to be able to save money in their existing location or they’re going to be able to move up into a better space, a higher quality space, which allows them to maybe attract better employees, have a better business environment.

Q. How can you save money on real estate?

Really the way to save money on real estate today is consider moving or renewing early to take advantage of things we’ve been talking about, the lower rent, but also other concessions that may not have been available over the last couple of years. These concessions are free rent, refitting allowances or tenant improvement allowances that are above and beyond what a landlord was paying in the past. The second would be consider buying a property at the now lower values. … We have seen a decrease, a fairly substantial decrease, probably 20 to 30 percent so far in the asking prices of properties.

Q. When should you renegotiate your lease?

If you have a lease, especially if it’s expiring in the next six to nine months, you definitely want to renegotiate now and take advantage of this because it’s going to be a tenant’s market for who knows how long without a crystal ball, but its certainly going to be six, nine, 12 months.

Special Report

San Diego

Friday, 25 September 2009 20:00

H1N1 preparations

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It should come as no surprise to any business owner that the world is facing the very real prospect of an H1N1 (also known, although not appropriately, as “swine flu”) pandemic this coming flu season.

Employee health-related absences always present a challenge to employers, and this challenge will become that much greater depending upon the eventual severity of the outbreak. In a survey recently published by the Harvard School of Public Health, researchers found that a mere one-third of businesses believed they could sustain their operations without severe disruptions should a significant segment of their work force be out sick.

“Everyone from the Center for Disease Control (CDC) to President Obama to Sesame Street’s Elmo are offering advice on dealing with H1N1,” says Peter B. Maretz, a shareholder with Stokes Roberts & Wagner ALC. “Wash hands frequently with soap and water or at least use hand sanitizer, cough into your elbow, stay home if you’re sick, keep your distance from people who are sick, etc. In other words, use common sense.”

Smart Business spoke with Maretz about H1N1 and what you can do to make sure your company is prepared.

What are the first steps to take to minimize the risk of H1N1?

In terms of steps you can take to minimize the risk of H1N1 running through your workplace, common sense should prevail. Of course, make hand sanitizer available around the office; tell people to go home if they appear sick; provide information on vaccination sites and allow people time off to get vaccinated; or, better yet, arrange to have flu shots administered at your workplace.

Get a sense for what your absence levels are typically like for past flu seasons, so you can better gauge if you are reaching abnormal levels. Look for opportunities to cross-train employees to better cover critical positions when key people are out. This is particularly critical when it comes to functions such as payroll. ‘My paymaster was sick’ is no defense to a late payment claim.

How can you educate employees on H1N1?

Make it clear to your employees that they should not come to work if they feel sick, and confirm to them that there is no penalty or retaliation for taking this time off. While there is no legal requirement to provide paid sick days, it does make for a good practice, so if your business does not afford its employees that benefit, consider extending it in advance of the flu season.

There is a fair amount of flexibility in how these policies are crafted. To avoid the problem of employees using them for every bump or bruise or, as is more common, nursing a hangover, consider making the first sick day unpaid, and then the sick days immediately following paid. Along similar lines, consider requiring a doctor’s note for it to count as a paid sick day and/or a doctor’s note to return to work. Some agencies are suggesting suspending the requirement of a doctor’s note should medical facilities become inundated with patients, so be mindful of that. Absent a doctor’s note, according to the CDC, a flu patient is safe to be back in the workplace 24 hours after his or her fever breaks.

Are there other ways employers should alter their time-off practices?

Oftentimes, sick leave is lumped in under the broad category of ‘paid time off’ along with leave such as vacation. While that may make it easier on payroll and accounting, there is no requirement that unused sick days roll over each year. So-called ‘use it or lose it’ policies are permissible. Such policies are not, however, permissible for vacation days. If you lump sick days in with vacation days, they will roll over and accrue from year to year (with some capping permissible) like vacation days.

Finally, clarify that sick days can be used to care for children or spouses who are sick, or to care for children if schools are closed due to the pandemic. Of course, there is a potential for abuse, but the impact of an employee getting away with a sick day is minor compared with the risk of a truly sick employee infecting the rest of the workplace.

Are there any time-off concerns under the Family Medical Leave Act?

Yes, you have to be mindful of the parameters for leave under the Family Medical Leave Act (FMLA). As of this year, for leave to qualify under FMLA, the employer has five days to request the employee to provide medical certification of his or her condition, and then five days to notify the employee whether the requested leave qualifies for FMLA. The employee’s condition must be ‘a serious health condition,’ which, under FMLA, means he or she must miss at least three consecutive days of work, go to the doctor within seven days of onset of the condition, and then their doctor must call them back for follow up within 30 days. While some employers may choose not to strictly follow these parameters during the flu season, understand those same employers may be stuck with those lax standards or face discrimination or disparate treatment claims should they try to tighten things up once the flu season is passed.

Is an H1N1 outbreak truly possible?

To be sure, the hope is that the fears of a pandemic are overblown, much like the Y2K doomsday predictions. Nevertheless, you have to be prepared for anything. Let common sense be your guide, and administer policies consistently from employee to employee.

Peter B. Maretz is a shareholder with Stokes Roberts & Wagner ALC. He regularly advises businesses on all aspects of employment law. Reach him at pmaretz@stokesroberts.com or (619) 237-0909.

Friday, 25 September 2009 20:00

Recruiting circuit

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Bob Akins says the goal of Cymer Inc. is to take tomorrow’s technology and commercialize it today.

It’s not all that different from their goal when it comes to human resources.

Akins, the co-founder, chairman and CEO of Cymer, is charged with finding tomorrow’s great talent and getting those people to sign up with Cymer before a competitor lures them away.

Much like the ongoing evolution of technology — a familiar theme at Cymer, which manufactures laser components for integrated circuits — the race for the best and brightest performers is constant and requires Akins and his leadership team to be ever-vigilant in their recruiting and retention efforts.

“It’s the biggest challenge I’ve had in leading Cymer,” Akins says. “We need to attract and retain really great people who can thrive in this environment of high-speed technologies. We need to take technology, mature it, package it and get it to chip makers who are producing their products around the clock. To do that, we need to find the people who really enjoy doing that, keep them here and keep them motivated. And those kinds of people tend to be rare.”

To make it happen, Akins needs more than talent. He needs talented people who can grow with Cymer, embrace the company’s mission and values, but still bring different perspectives to the table, particularly on the subjects of innovation and global growth. He needs team players who are individual thinkers.

Recruiting and retaining top performers is far from an exact science, but there are a number of steps you can take to improve your standing, even as the economy continues to falter. These are some of the ways by which Akins attracts and keeps people at Cymer, which generated $459 million in revenue last year.

Recruit globally

Cymer’s perspective on business is global in nature. With a headquarters in San Diego and a marketplace largely within Asia, Akins and his management team spend a great deal of their time interacting with people from different parts of the world.

The experiences have taught Akins a lesson about team building: Different people bring different perspectives to innovation, problem solving and other issues. It’s something Akins has used as a recruiting principle over his years at the helm of Cymer.

“I have been in many meetings in my history where a group of people are all of one basic type or background,” Akins says. “They all came from one area; they all went to the same two or three universities. They think the same way; they have the same thought culture. As a result, in the face of a problem, they may run into a brick wall where they can’t move forward because they’re all thinking the same way.

“It takes someone from a place like India, someone who has a completely different educational background than everyone else on the team. If you stick that person in the room with everyone else, you might find out five minutes later that the group is on their way to a new solution path. With that basic concept, we have hired from all over the world and tried to create a cross-cultural environment within the company, a culture that can circumvent some of these more common problems.”

Creating an international perspective requires developing a recruiting presence in the countries you want to tap. Akins and his leadership team establish relationships with business partners overseas, and through those networking relationship, find much of their international talent.

“We usually find our talent through some kind of direct contact or reference from individuals that we know,” he says. “To that end, you need to develop presences all over the world. We’re heavily participative in the industry through direct contact with our customers and suppliers as well as participating in various conferences.”

Once the talent has been secured, it needs to be integrated. Akins focuses on creating global teams, which starts with aligning them around the company’s mission and strategy. The mission, vision and strategy of Cymer are frequently reinforced to all employees so everyone in the company is building from the same foundation.

“You try to get high levels of alignment, and that means having an open and often-discussed vision and strategy for the company, so there is no question as to what needs to be accomplished and by what set of rules you’re going to play,” Akins says. “When we staff cross-functional teams for the execution of some major project, we get to know each individual personally, their strengths and weaknesses. From there, a project manager will identify the individuals they need to best execute a project within the company. It’s a working cooperation to make sure that you get appropriate staffing across a number of programs.”

To get to know employees’ individual characteristics and attributes on a more personal level, you need to plant the seeds during the recruiting and interviewing process by drilling down in your questioning and compiling extensive background information. But even with that aspect in place, Akins says there is still no substitute for having a would-be project team member in the company for a period of time prior to installation into a team.

“It gives you time to ascertain their strengths and weaknesses as well as the cultural fit,” Akins says. “But in the end, we kind of believe in a sink-or-swim approach to integration. We don’t allow people much time to get the feel of the road here. It’s very common that people here almost immediately find themselves in a critical path or developing some kind of new program.

“I find that by throwing people in, putting them headfirst into major projects, it’s ultimately the best way to see what they can really do. And it’s also a measure of what kind of mentality they’re going to bring to your company. Here, we need people who are just fighting for the chance to do something important.”

Focus on core values

In addition to focusing employees on your company’s mission, vision and strategy, another key component to attracting and retaining the best talent is your company’s core values.

Your core values are central to your culture. Employees need to know what your company stands for and, in turn, what they need to embody when representing the company to outside entities.

At Cymer, Akins was a part of the founding team that sat down and put the company’s core values in writing. The values are part of the personal belief system of everyone who founded Cymer.

“Over the course of several weeks, we sat down to discuss and write down the values that we shared personally as the company founders,” Akins says. “We took those, determined which were most applicable to the corporate team environment, and made a list of values that everyone has placed on the wall of their office or cubicle.”

New hires are given a set of five values that they are expected to embrace and represent in all corporate activities: integrity, teamwork, driving innovation, passion for success and balancing work with humor. They are values that form the backbone of many organizations, but just because they are commonplace does not mean they can be taken for granted. You can’t simply assume that new hires will completely understand or practice all of your core values from their first day on the job.

“Obviously, integrity is the most critical value,?

D; Akins says. “When I talk to my employees, I basically say that at the end of your working career, you’ll be sitting on your front porch in a rocking chair. You may or may not have made a lot of money, but the most valuable possession will be your reputation. If you were financially successful but did not maintain a high level of respect, you’re not going to be very satisfied. You need to keep integrity in mind in everything you do. People will respect a company they can trust, a company that operates with a high sense of integrity.”

Fun and humor are becoming an important staple of modern business culture, but it might be less popular as a stated ingredient in a cultural foundation. The reason Akins made humor a core value at Cymer is because it’s no different than integrity, teamwork or passion — you need to work at it in order to make it a success.

“We work extremely hard to support this fast-paced global business, and we use humor to blow off steam and kind of center ourselves individually and corporately as much as we can,” Akins says. “I tell our people that even if they’re in a serious meeting with a customer that has been going on for hours, don’t be hesitant to work in a little laughter. If you can think of something funny to say that is in good taste, use it. You need to break the ice sometimes.”

With the values established and introduced, you need to let them take root with your employees. Building the values within your work force takes top-down communication from your office but also a great deal of lateral communication among employees.

Akins conducts quarterly management meetings that bring the management team together for three to five days. The first half-day of those meetings are spent reviewing the mission, vision and core values of the company.

“I’ll take some time during those sessions and talk a little bit about the importance of the vision of Cymer,” he says. “As management grows over time, you might gain people who don’t have some of the history of the company. By having some of the less-experienced people in that kind of a meeting, getting them involved and allowing them to ask a few questions, people will start to take more of a personal ownership of the values.”

Once or twice quarterly, Akins and his leadership team take the vision and values to the Cymer masses with a large teleconference involving all of Cymer’s locations around the world. On top of that, Akins and other Cymer leaders frequently travel to reinforce the message on a face-to-face basis.

“I and all of our senior management team travel frequently,” he says. “Whenever we’re in various regions, we always take advantage of that time to not just visit our customers but to visit our own facilities and sit down with our people. We’ll have a face-to-face review of the state of the company, where we’re going and why, and how we’re going to conduct ourselves in the execution of that.

“In the end, if you can do that and you can conduct yourself in a way that is consistent with those values, if people can observe that behavior from you, you’ll go a long way to helping the culture take root with all your employees. Our industry is cyclical, but even when we have a reduction of force, I still talk to our employees specifically about how important it is that we treat each other with the utmost respect and sensitivity.

“When people do leave the company, oftentimes individuals will come by my office, shake my hand, and thank Cymer for their employment here and thank us for the help we provided in finding new job opportunities.”

How to reach: Cymer Inc., (858) 385-7300 or www.cymer.com