With a Google search, there are two sets of results — paid and organic.
Yi He, Ph.D., assistant professor in the Department of Marketing & Entrepreneurship, College of Business and Economics, at California State University, East Bay, says her advertising management students were surprised to see how many people click on the paid ads.
Her students participate in the Google Online Marketing Challenge, where they are given $250 to run a three-week online advertising campaign for a business or non-profit, which is developed using Google AdWords and Google+.
This type of search engine marketing (SEM) truly benefits small companies.
“For smaller companies, in the past, there was no way to compete in the conventional media with big companies. Now, they can differentiate themselves using SEM, just by spending their advertising dollars in a relatively cautious manner,” she says.
Smart Business spoke with He about why small companies are turning to SEM.
Why is SEM so important today?
Most Internet users don’t want to remember a website URL. Eighty-five to 90 percent of people are guided to websites by search engines, such as Google. Also, people usually just look at the first five or 10 search results, and many of those are advertisements. So, once you start running ads, you generate more ways to reach Internet users.
How are SEM and conventional advertising different?
With conventional advertising, print and broadcast, it’s hard to measure whether your ad campaign was effective. However, everything is measurable with SEM — you can calculate how much ROI is generated from every advertising dollar spent.
Conventional advertising also requires a specific set of skills. But a business owner can run a SEM campaign by opening a Google AdWords account and be up within minutes. It may not be a great campaign, but it’s not like creating a TV commercial.
How does SEM differ from Facebook ads?
With SEM, the only way to target ads is geographically. So, a San Jose restaurant owner can specify that he or she only wants the ad to show up for a ‘Thai food’ search in a 15-mile radius from the downtown San Jose area. Google doesn’t charge for the number of times the ad shows up, or the impression, but by cost-per-click. With Facebook display ads, ads can be targeted by age, gender, marital status, interests, education level, etc., and are charged by both the click and impression.
On average, of the 10,000 times a Facebook ad shows up, only five people click on it, because in a social environment you don’t want to be interrupted to buy something. With a search engine, people are looking for a solution to a problem. A search result, whether organic or paid, is like you’re in a retail store and someone offers a helpful recommendation. With Google’s marketing challenge, my students can get a click through rate (CTR) that is 100 times higher than the Facebook average.
Why is SEM more useful for small business?
Smaller businesses typically aren’t as visible on the organic results or with the extremely popular keywords. But they can run a SEM campaign to generate Internet traffic and increase visibility. There’s no entry barrier, too, so they can get started right away.
SEM also can help figure out demand. For example, one student ran two ad campaigns for a local Chinese restaurant and discovered that ‘Chinese dining’ was not popular in either impressions or CTR. However, ‘Chinese takeout’ led to more people clicking the restaurant’s website and calling, which increased takeout orders dramatically.
What ethical concerns come up with SEM?
We don’t know exactly what data companies have on consumers, and what they do with it. All impressions, clicks through and transactions can be tracked. For example, you might go to a website to look at a few items but not purchase anything, and over the next few days you see similar items on your Internet pages. In addition, some argue that precisely targeted results deprive people of the total available information.
Public policymakers have been pushing to protect consumer information with something like the ‘do not call’ list. A ‘do not track’ list would enable people to sign up to keep their Internet Protocol addresses from being recorded.
Yi He, Ph.D., assistant professor, Department of Marketing & Entrepreneurship, College of Business and Economics, at the California State University, East Bay. Reach her at (510) 885-3534 or email@example.com.
Insights Executive Education is brought to you by California State University, East Bay
In this day and age, only a small number of businesses can function without a network of computers. Unfortunately, there are inherent risks to computer usage — hackers, viruses, worms, spyware, malware, unethical use of stolen passwords and credentials, unauthorized data removal by employees with USB flash drives, or servers crashing and bringing productivity to a halt. Owners of small to midsize businesses have to be cautious of cyberattackers, and depending on your industry, your business many be an easier target than larger businesses.
With cyberattacks on the rise, Smart Business spoke with Jalal Nazeri, a certified information systems auditor at Sensiba San Filippo LLP to discuss what business owners can do to protect themselves.
What is the first step toward protection?
The first task in creating a secure network is to draft a security policy, which, if carefully managed, can lower the risk of these threats.
When drafting a policy, consider every perceived threat, no matter how unlikely it may seem. Communicating and monitoring these policies regularly will lay the groundwork for compliance in defense of your network.
There are a number of core ideas to consider in implementing a policy. First, you will need to do a risk assessment to identify risks and determine the best methods to prepare for them. Then you will need to classify data by sensitivity level and develop access restrictions. Consider what the security requirements are of an authorized user and assess the possible risk, both logical and physical. In addition, create a plan to back up each user’s data. Finally, ongoing monitoring and maintenance of your risk assessment and the underlying policies and procedures is a must.
How do you manage employees’ usage of company computers?
An acceptable use policy is a common element to include in your security policy. The acceptable use policy restricts users by giving them guidelines on what they can and cannot do on your company’s network. Adding these restrictions can place an inconvenience on the end user, but it’s imperative to have them in place for the protection of your organization. The end user can be an organization’s weakest point.
Once a user reviews the policy and accepts the restrictions in place, it’s important that he or she sign the policy. Users should be made to re-sign the policy whenever it changes, and at regular intervals even when unchanged. Some companies set a six-month timeline, others vary. The value of the policy depends on the communication and monitoring of compliance. Without enforcement, its value is greatly reduced.
What are other tools business can use?
A few other key items a business can use are firewalls, content filters, encryption, virus protection, and accounts and passwords. Business owners need to maintain these tools, not just put them in place and forget about them.
Firewalls act as a barrier to the internal network, blocking unwanted traffic, while content filters restrict material delivered on the network and control what content is available to users on the Internet. Encryption is becoming more vital for transferring and storing data, whether it is for regulatory compliance or customer protection from theft.
Anti-virus software is a must on all your servers and workstations. A scheduled virus scan should never be missed, and always have automatic updates turned on.
Never use generic passwords or account names, and restrict users to using only their own login. Passwords should follow a complexity requirement, like the use of a mix of letters, punctuation, symbols and numbers, and should also have a limited lifetime and a rotation.
What is the value of taking these steps?
With small to midsize businesses, budget is always a major consideration in what is plausible in obtaining the most secured environment. With a good policy in place, identification of priority spending can be determined and can reduce the need for excess software and hardware.
Cyberattackers look to gain access to networks that have the least amount of resistance. A good security policy protects data against potential threats. Without one, the company may incur significant remediation costs, lose productivity and even lose clients.
Jalal Nazeri is a certified information systems auditor at Sensiba San Filippo LLP. Reach him at (925) 271-8700 or firstname.lastname@example.org.
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Every Company is a Media Company. It’s a phrase coined some eight years ago by tech journalist Tom Foremski to describe the impact of technology on marketing.
From the Internet to Wi-Fi to smartphones, a tectonic shift has taken place with technology forever changing the landscape of marketing, just as radio and television did before.
Only this time, it’s different. This time, the power has shifted from the hands of a few hundred powerful media outlets to the hands of billions of consumers.
At the same time, companies like yours have been handed powerful tools and an unparalleled opportunity to engage with customers like never before. It’s not just in the obvious new places like mobile websites, apps and the media. Technology has made it easier and cheaper to communicate through video, live events and, yes, even print publications.
Like it or not, you are a media company.
So what’s a media mogul like you to do? You need to do one thing: create content. And you need to do it well. You need to create content that generates interest among your target customer base and engages them with your organization.
It might sound easy, but it’s not. Most business leaders know that effective communication is one of the biggest challenges any company faces. When that communication is what sets you apart in the minds of your customers and prospects, the stakes are all the higher.
Here are a few important points to keep in mind as you set about embracing your new role as a media company.
Be where your audience is
Content comes in many forms. Most of us 40- or 50-something business executives are more comfortable reading printed material. Flipping through your brochure, newsletter or even your own custom magazine is comfortable for us. So hand us something.
But younger VPs and 20-somethings — many of whom do the heavy lifting of researching company buying decisions — are more comfortable gaining intel online. They scour videos on YouTube, mine infographics on visual.ly and peruse PowerPoints on SlideShare. So take the time to figure out which of these is the right channel to reach your target customer.
Share knowledge, not platitudes
Yeah, we get it. Your people are smarter, their customer service is better and their breath smells fresher longer. But that’s not why we might be interested in your business.
What we want to know is how you’re going to solve our problems and make our lives easier. We don’t want you to tell us you are smarter; we want you to show us you are smarter.
Thought leadership articles, white papers and blog posts showcase your knowledge of industries, issues and tactics. They differentiate you from your competitors and position you as a subject matter expert in your market.
Talk about customers more than yourself
The best communicators are great storytellers. Stories resonate. They connect us. They are, simply, what we remember.
Sharing client success stories is one of the best ways to tell your own story. The tried-and-true case study is one of the most effective forms of content in a marketer’s arsenal. If you show us how you can make our businesses faster, better, stronger, we will do business with you. It’s that simple.
And if you have particularly well known and respected clients, you get the added benefit of basking in their reflected glory. Welcome to the media business. Now go tell your story.
Michael Marzec is chief strategy officer of Smart Business Network and SBN Interactive. Reach him at email@example.com or (440) 250-7078.
When Ted Turner launched CNN, there were plenty of people who said a 24-hour news network would never fly.
But Turner saw a problem: He enjoyed watching the news, but his busy schedule typically had him missing the standard news broadcast time. That’s when he got the idea: What if the news was on all the time? He couldn’t be the only one who was unable to fit a regular broadcast into his schedule, so he knew the demand was there.
The next step was to dream big. What if the news was on all the time, not just locally, not just regionally, but nationally and even internationally? The result was the first 24-hour cable news network. It took a lot of effort to get CNN to where it is today, but Turner’s dream was realized. His big dream yielded a big result.
People need to dream big. If you never take the time to dream big, great things probably aren’t going to happen for you.
We have the power to visualize our future. A professional athlete visualizes hitting the game-winning shot so that when the time comes, he or she expects to succeed. As CEOs, we must also visualize ourselves and our organizations achieving great things. We must see where we want to be and then convince those around us to help us get there. When you can articulate the vision in a way that makes it as clear to them as it is to you, your goals will be easier to accomplish.
Here are four steps to achieving great things:
- Have you dreamt big enough? If you aren’t visualizing your business achieving all its goals and growing the way you want it to, it might be holding you back.
- Take time to reflect on the dream. Let it simmer as you consider the obstacles that will have to be overcome to achieve your dream.
- When you are comfortable that you have thought it through, share the dream with people you trust. They can point out challenges you may have overlooked or offer encouragement to keep you moving.
- Get started. Big dreams don’t happen without hard work. Lay out the steps that will get you from where you are today to where you want to be and start working toward your goal. You won’t get there overnight, so focus on taking small steps toward your vision each day. Sell others on your dream so they can help you get there.
Don’t be satisfied with small achievements. Visualize your potential and the potential of your organization. With hard work, you can turn it into a reality. Dare to dream big.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800)988-4726 or firstname.lastname@example.org.
This column is not a how-to painting guide for business executives — I’ll leave that to the experts at Sherwin-Williams. Instead, I offer a few suggestions on preserving ideas for future exploration and innovation. Let me explain further.
Hindering creativity typically rears its inhibiting, ugly head when you make definitive statements, either verbally to others or in the confines of your own mind, and too quickly dismiss new ideas as being too farfetched. We’ve all been there. How many times have you said, “Not on my watch,” or, “I’m drawing a line in the sand on that matter,” and sometimes adding for emphasis, “That will happen only over my dead body”?
Eating your words, even years later, can likely cause severe indigestion and can sometimes result in choking that could bring on a premature demise of that next big thing. Littering the bottom of the corporate sea are concepts with promising potential that executives, with the flick of the wrist, pooh-poohed. Most times, that was simply because there wasn’t enough time to deal with the unknown or because of myopia and the lack of an inclination to push the envelope. It doesn’t take much talent to say no, but it takes leadership and creativity to take a germ of an idea to the next level. And it takes true vision to shepherd a new anything through the difficult trial-and-error gauntlet.
Close-minded responses to the unproven are not just limited to management. Politicians particularly have a unique knack of painting themselves into a corner with unlikely promulgations that frequently come back to haunt them in November after the opposite occurs. Backpedaling is probably the method most politicians use to get their exercise.
In a 1966 Time Magazine print edition feature story, this then-prestigious publication asserted, “Remote shopping, while feasible, will flop because women like to handle the merchandise and, with so much time on their hands, want to get out of the house.” Someone might want to email Time and ask the publisher how to spell Amazon.
There are alternatives to summarily stymieing thoughts, dreams or unproven methods. Certainly, there is a time and place for everything, and frequently, you or your team may not have adequate resources, at a particular moment, to pursue every idea that comes down the pike. Instead of saying no, a more fitting response is to say or think, “Let’s put that idea on a back burner so that we can for the moment focus on more conventional solutions, at least, for the shorter term.” This leaves the door open for continued research and refinement of an idea that could ultimately evolve into something meaningful.
Here is where the bucket from my headline comes in to preserve an incomparable yet promising notion that, at the moment, might be superfluous to the task at hand but, at the right time and place, proves to be a killer idea. I use the word bucket as a euphemism for a holding place or repository for things that I may want to explore when the time is right. Certainly, one cannot investigate every idea ever pondered, but at least by retaining all such ideas in one place, they are always there for future consideration when either more is learned about the subject matter or when comments begin surfacing in the media or elsewhere touching on that similar idea you’ve kept tucked away.
Your very own bucket can also become a temporary refuge merely to take your mind off other, more thorny problems or a simple respite from the day-to-day grind when you’re looking for a new inspiration. Alternatively, at the end of the year, remove the mothballs from your bucket and review what you’ve deposited. A fresh look just might ignite a former idea, which then takes on a new life of its own.
Anyone who has ever painted a room already knows not to wind up in a corner, lest they may never get out. Worse yet, more open-minded competitors could use that bucket to throw cold water on an idea that you had earlier but never capitalized on it while they did.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises.
"The Benevolent Dictator," a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available online at: www.thebenevolentdictator.biz. Reach him with comments at email@example.com.
In order to succeed in business you need to have inner confidence - that state of feeling certain about and trusting in yourself. You can have confidence in your goals, your team, your system and your family, but if you lack self-confidence, you are missing the main ingredient for success.
Lack of confidence makes it harder to:
- Make sound decisions
- Lead others
- Perform tasks and duties correctly
- Get a raise or promotion
Today I will provide you with 5 confidence tools that you should use on a daily basis in your business and professional life.
Let's get started!
Confidence Tool #1 - Focus
As I mentioned last month in 5 Tips for Improving Your Focus as a Busy Professional - over the years in my coaching and speaking, I have found focus to be of the utmost importance for success in the workplace. Too many professionals try to "fly by the seat of their pants" and lack any ability to direct their attention.
To use the tool of focus effectively, you must first determine the things that need your concentration and focus. Take the time to assess and evaluate them. What should come first, second and so on.
Once you have things evaluated and set out, laser-target your focus and do not allow yourself to be swayed away from the task at hand.
Knowing what needs your attention and intently focusing on those needs helps free the mind of distractions that lead to second-guessing and lack of confidence. This builds motivation that in turn leads to building a positive energy that helps you remain calm and focused during times of stress.
Focus prepares the mind for action.
Confidence Tool #2 - Mentorship
Anthony Robbins and others have talked a lot in recent years about modeling the success of successful people. The idea is to find someone who is successful in your area of work or expertise and do what they do - modeling their successful behaviors.
While I agree that this is helpful, I have always felt that simple modeling comes up short. When I model, I am left to my own devices. I am forced to determine just what it is that has made the person successful. In essence, I have to guess.
Mentorship overcomes this shortfall. Mentoring involves working directly with someone who can help you find your strengths and weaknesses in business. Mentoring takes the guesswork out of the process.
Find someone in your area who is a leader - someone who has achieved a level of success and ask him or her to mentor you. Work with their schedule to find times where you can meet and discuss your needs and desires related to your business.
I have found that many leaders enjoy the ability to mentor others.
Can you see how this tool can help with your inner confidence? It is powerful!
Confidence Tool # 3 - Attitude
You can become the smartest, well-trained and mentored individual with the absolute worst attitude and that attitude will lead to your demise.
Zig Ziglar said it this way:
"Attitude, not aptitude, determines altitude."
How high you fly in the world of business is determined not by how much you know, but by the power of your positive attitude.
Ziglar was a trainer and teacher for dozens of years; he was not speaking against you learning new things and being mentored by the best. It's a matter of perspective.
Truly confident people - not those who think confidence is made up of simple arrogance, are those who have a great attitude toward business, work and life. These are the ones that co-workers want to follow.
Attitude moves your action forward.
Confidence Tool #4 - Exercise
In her article: Get Ahead at Work: 5 Ways to Increase Your Confidence In Business, Kelly Lynn Adams talks about the role exercise plays in developing confidence in business.
"Exercise has been shown to improve both mental health (by releasing mood-improving endorphins) and physical wellbeing (by reducing the likelihood of illnesses) while also improving the way you feel about yourself. So, whether you prefer to dance, go to the gym, run outside, bike, take a yoga class or box, get moving. It may just pay off, literally!"
I could not have said it better!
Exercise provides strength for action.
Confidence Tool # 5 - Action
I have been hinting all along in this article that there is one very important tool that must be used in order develop the confidence needed to achieve true success in business.
That tool is action.
We must get up, get moving and get out there on a daily basis. Actual hands-on doing is a powerful provider of self-confidence. Action defines the muscle of confidence. Consistent, daily action makes that muscle strong.
When focus, mentorship, attitude, and exercise bolster action, inner confidence no longer becomes a struggle we face.
Use these tools and develop the confidence you need to achieve your wildest dreams in business.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” Contact her via email at firstname.lastname@example.org or visit her website at www.delorespressley.com.
Additional Medicare taxes went into effect Jan. 1, 2013, for high-income earners, but many may not consider these taxes until they start filing their 2013 returns — and writing the checks.
“You want to take the time to go through this now, and lay the groundwork, because the decisions you make will have ramifications for next year,” says Chris Paris, regional tax leader of the Greater Bay Area at Moss Adams LLP.
“We’re spending a considerable amount of time dealing with this. People are asking: How is this going to impact us? Is there anything we can do to structure around it?”
Smart Business spoke with Paris about the impact of these taxes and what you need to know.
What are the new Medicare surtaxes?
The Unearned Income Medicare Contributions Tax (UIMCT) is a 3.8 percent tax on net investment income for higher income individuals. The other surtax is a 0.9 percent tax increase on wages and self-employment earnings for higher income individuals, for a combined employer/employee tax rate of 3.8 percent.
The taxes are designed to help cover about half the cost of the Patient Protection and Affordable Care Act, passed in 2010.
How does the IRS define higher income individuals?
Both taxes apply to individuals that meet an income threshold of $200,000 or more, or those married and filing jointly that meet a threshold of $250,000 or more.
If a taxpayer earns wages in excess of $200,000, his or her employer is required to withhold the 0.9 percent, in addition to the 2.9 percent previously taken out (1.45 percent for the employer and 1.45 percent for the employee). However, the 3.8 percent on net investment income is a new type of tax that may take some by surprise.
What’s so unusual about the UIMCT?
This is the first time the government has taxed net investment income to pay for the cost of Medicare. Net investment income includes interest income, dividends, royalties, rental income, and income flowing through passive investments like private equity funds, hedge funds and venture capital funds.
Rental income is going to be a big factor because many higher income earners own a lot of real estate, don’t qualify as real estate professionals and will be subject to this tax. It also could impact middle market companies where the owner of the business owns the real estate, although there may be ways of grouping activities together to reduce the impact of the tax. Further guidance regarding these issues is anticipated in the final version of the tax regulations.
How can those affected by these taxes plan?
First, be cognizant of the fact that it’s happening, so you can factor it into your 2013 tax planning. Estimated taxes are usually based on what you owed the prior year, so your figures may now be too low.
Secondly, you can potentially reduce the impact of the UIMCT by recharacterizing passive income subject to the 3.8 percent tax to ‘Trade or Business’ income, which is not subject to the surtax. For example, an individual who owns multiple businesses or rental properties may be able to group the multiple activities into a single activity by making an election pursuant to Revenue Procedure 2010-13. However, the activities must also rise to the level of a trade or business, a requirement that currently lacks clarity in the proposed regulations. Further guidance may be provided when the final tax regulations are released. The grouping election is particularly attractive if you haven’t filed your 2012 extended return because you can put the IRS on notice now to be in a better position to potentially reduce the UIMCT next year.
Questions also remain about whether certain people qualify as a real estate professional — whose rental income may not be subject to the UIMCT— which is another reason to reach out to your advisers now.
In addition, it may be time to discuss choice of entity, how you operate your business. An LLC with two active owners in the maximum tax bracket could be looking at a combined 43.4 percent federal tax rate on income, whereas a C corporation has a maximum tax rate of 35 percent. However, any dividends from the C corporation would also be taxed, hence there could be double taxation. Further, tax consequences alone may not be enough of a reason to switch, and exit alternatives such as asset sales need to be considered.
Some taxpayers are exploring alternative investments, such as tax-exempt interest income like municipal securities, non-dividend paying equities in certain rapid growth companies, tax-deferred annuities and investments, as well as considering capital gain planning, loss harvesting, installment sales and more.
Whatever strategy you decide to undertake to help control what you pay, don’t wait to plan — or you may not have the most desirable result.
Chris Paris is Regional tax leader, Greater Bay Area, at Moss Adams. Reach him at (415) 677-8352 or email@example.com.
Insights Accounting & Consulting is brought to you by Moss Adams LLP.
PFSweb, a growing business providing e-commerce solutions to many major retailers, was courted by several communities when it was looking for a new location for its professional staff of more than 400 employees.
The company ended up opening its new facility in April 2012 in Allen because the city and the Allen Economic Development Corporation best understood its needs.
“The entire economic development group listened well in terms of what our needs and requirements were. The city’s been great,” says Mark Layton, founder and former CEO of PFSweb. “One year in, I don’t have anything negative to say about our experience in Allen.”
Smart Business spoke with Layton, who recently left PFSweb to pursue other business opportunities, about the factors that led to the move and a 10-year lease in Allen.
Why was PFSweb looking to leave its Plano, Texas facility?
We had been there about 20 years and there were growth issues, as well as a parking problem. Our real estate professionals encouraged us to take a broader look at the market and it became apparent that there was an opportunity to create competition.
The challenge was that we had two distinct uses — a worldwide data center and a call center operation — that potentially required different types of facility solutions. Vacancy rates had been so high in downtown Dallas that it was cost effective to relocate to a space that also gives us significant ability to expand and contract to meet our needs.
The city of Allen didn’t have a suitable site for the call center, but obviously played a part in relocation of our headquarters and technology development lab.
What separated Allen from the competition?
The building our commercial real estate representatives and the economic development corporation brought to us had some great amenities and potential. The owner offered flexibility in configuring the space correctly for us, building out a corporate park with a running track, basketball courts, horseshoe pits, etc. He also allowed us to be single tenant even though the space was bigger than what we needed — he delayed a requirement for us to lease the space for several years, giving us room to grow.
What role did the city and Allen Economic Development Corporation play?
Their help regarding financial supplements was very important. Dallas, Richardson and Frisco were also aggressive in trying to lure us, particularly when the call center piece was separated and we had about 400 relatively high-paying jobs that were very attractive.
The city of Allen and its economic development group showed a lot of awareness and understanding of our challenges relating to accounting regulations and how the incentives could be shown on our books to help reduce overall expense. Accounting regulations want you to take incentives in a lump sum; our profit and loss statement would have shown a higher rental through the entire 10-year term and a big financial windfall in the final quarter.
Other economic development corporations handed us a standard contract and didn’t show a desire to change the terms and conditions. With Allen, they had dealt with these issues with other public companies, and their familiarity was a breath of fresh air. We didn’t have to do a lot of education as we did with the other groups. Language needed to be structured correctly and it required flexibility as their legal group worked with our accountants. That was a differentiator for us.
Would you recommend the city to other companies looking to relocate?
Certainly, from my standpoint it has been a great experience. The only drawback is that Allen doesn’t have a large inventory of buildings, although the city is addressing that situation and there is land that can be developed if companies want to build to suit.
It’s been a great relationship and the economic development corporation did a wonderful job for us. We would absolutely recommend Allen to other companies looking for this type of office space.
Mark Layton is the founder and former CEO of PFSweb. Reach him at (972) 881-2900 or firstname.lastname@example.org.
Reach the Allen Economic Development Corporation at www.allentx.com or call (972) 727-0250.
Staying relevant. It’s why companies close old divisions and start new ones, why they introduce new products, make acquisitions, diversify their portfolios and invest in R&D. And for IT companies like Groupware Technology Inc., it’s the reason to complete one transformation, only to pause, and do it all over again.
The need to change was something that IT industry veterans — owners Mike Thompson, Scott Sutter and Anthony Miley — understood well when they acquired Groupware, an IT solutions provider that was on the verge of going belly-up in 2005. They recognized from day one that the company’s survival was dependent upon Groupware’s ability to transition outside its roots of
“systems and storage” and make a name in for itself in IT’s fastest-growing segments: big data, cloud computing, virtualization and data security. It’s a process that’s taken involved two restructurings in seven years.
“It’s a brand-new organization from the company that we acquired,” says Thompson, the company’s president and CEO. “We took a company that was doing at the time of the acquisition $1.7 million, and we turned it into almost $150 million with our company. We injected life into the organization by creating relevancy within the marketplace … and within the customer base.”
Here’s how Thompson and his co-owners have taken Groupware from struggling IT reseller into a leading systems integrator.
Look for an opening
Groupware’s broad customer base includes SMBs all the way to Fortune 500 companies. This means the company’s IT solutions must meet a wide range of technology needs. Delivering solutions that are on the leading edge of today’s systems and storage technology is the only way to stay relevant for customers.
“At the rate that technology is changing — it’s pretty amazing the acceleration that it’s going through — we need to stay in the forefront in regard to what technology is out there,” Thompson says. “It’s having business conversations with our customers to understand what pain points they’re trying to solve for and where they’re trying to take their business.”
Nobody knows the needs of the market better than your customer base. So one of Thompson’s first steps as CEO was to ask customers, “What’s going on in the marketplace?” and “Where do you want to take your business?” to see where Groupware should be investing.
“Understanding what’s going on around cloud computing, big data, next generation data centers and having the expertise to be able to deep dive into those types of opportunities and conversations with customers has allowed us to remain in the forefront,” Thompson says.
“It’s having conversations with our end users in regard to what business issues they are trying to solve and then understanding how we can help them solve those issues, and not just for today.”
What Thompson and his partners realized quickly is that businesses buying IT products also wanted in-depth knowledge and advice from their providers. They began working on a strategy to transform Groupware into a services-led business, which could provide both products and support for its customer’s technical capabilities.
As it turned out, the challenges in the down economy — more companies began seeking IT workarounds to help them manage with more limited resources —gave the company an “in” to present its new solutions and services to the marketplace.
“Customers looked to us to offset some of the reductions that they had in place because business has to go on,” Thompson says. “You still have to solve these business issues. You’ve just got to find new ways to address the business models out there.”
While competitors scaled back, Groupware doubled down on IT investments, including its service segment, which Thompson and his partners believed would propel demand moving forward. The company also invested heavily investments in its labs and engineering capabilities — especially engineering talent.
“Where there is change and uncertainty, there is opportunity,” Thompson says.
“As we went through it, we saw that people were going to pull back. Our opportunity was to go invest heavily to have resources available to [businesses] and to create value out in the marketplace that our customers could leverage from us to continue to be successful in their operation.”
Start tough conversations
By the time the recession began bottoming out in 2010, Groupware had nearly doubled its business, a sign that new investments were paying off. Still, the business transformation also forced Thompson and his executive team to restructure certain areas of the company to make room for those investments.
It was important to engage people in “adult conversations” about why the changes were happening and what they meant.
“I think too often we let niceness get in the way of the truth. You need to have those conversations and not delay the hard conversations, acting decisively based on that and moving forward. I’ve been in situations where the executive team has been slow to make changes and it became irrelevant really quickly by not acting and not executing. It’s critical to have those conversations and then act on them appropriately.”
Groupware has now gone through two restructurings since 2005, a transformation process that’s involved rearranging certain departments, eliminating remote offices and consolidating operations. These strategic moves have helped drive the company’s investment in “rack and roll” solutions — complete technology solutions designed to be rolled into the data center and quickly put into production, generating higher returns for Groupware.
For Thompson, the ability to have honest conversations with team members has helped him keep the company accountable to progress, but also to earn employee respect. People prefer to do business with people that they like, but they’ll also follow a leader who they respect, he says.
“We need to have those hard conversations and get everybody on board with the investments that we want to make as an organization,” Thompson says.
“You can move too quickly, but if you set the goals and hold accountability level, you can make minor changes to that if you need to, or you can pull back.”
That said, building a dialogue with employees is also important in helping you monitor your investments. Strong internal communication gives you a continuous feedback loop to know where your investments stand and what kind of returns they are generating so that you can know when to pull back.
“It goes back to where you place your bets, making bets and then understanding the return, setting expectations associated with those bets and managing toward that,” Thompson says. “If you don’t see the return or you don’t see the return coming, you need to be able to take those resources back and double down where you do see return on those investments coming from or where you believe you can get a greater return.”
Share in excellence
Today, Thompson continues to invest heavily in the company’s core competencies — networking, security and storage — as well as its services practice, its fastest-growing division. Smart investments combined with open and honest communication are two building blocks in a foundation that helps Groupware stay relevant with customers, and the marketplace.
The third is collective ambition, or a shared commitment by employees to the company’s success.
“I’m a firm believer in building winning teams, having the right people in the right positions at the right time,” Thompson says. “Then you’ve got to empower them to go out and execute.
One way Thompson drives collective ambition at Groupware is by creating an environment where employees want to come to work.
“I’ve always felt that it’s our job from a leadership perspective to put our employees in a position to be successful,” Thompson says. “When they drive home that night, we need to give them a reason to come back in the office the next morning.”
What makes a great work environment? At Groupware, it comes down to living the company’s three core values every day.
“The great thing about this transition is that we’ve remained true to our core values of customer service, excellence and fun,” Thompson says. “My belief is that you keep those core values intact and you create an environment where employees can be successful and understand the consistency of the model that you’re bringing to the marketplace.”
An example is the fact that Groupware invites every employee in the company to its national kickoff — an event that many businesses limit to their sales teams.
“It’s customer service,” he says. “It’s the pursuit of excellence and it’s having fun. Those three complement each other.”
Getting employees together for the kickoff is about showcasing the company’s values and vision; but it’s also about “getting everybody to fill part of the success of the company,” Thompson says.
Driving this culture is also why Groupware expanded its focus on collective ambition in 2010, when it rolled out a corporate program around the concept. The goal of the program is to help employees understand their role in serving the purpose of Groupware and better explain to employees how all departments participate and work in harmony to help the company succeed.
“Once you have buy-in and you have collective ambition by multiple individuals in the organization, you can propel the business in the direction that you want to take it,” Thompson says.
How to reach: Groupware Technology Inc., (408) 540-0090 or www.groupwaretechnology.com
The Thompson File
President and CEO
Groupware Technology Inc.
Born: Mountain View, Calif.
Education: USC undergrad; MBA Regis University
Leadership philosophy: I don’t shy away from the fear of failure. That actually makes me work harder, and I take those challenges and adversity head-on. I’m a classic example of ‘productive paranoia.’ I’m always looking over my shoulder, always working hard and always trying to better myself to make sure that I can keep moving in the right direction.
What would you do if you weren’t doing your current job?
In some capacity, creating an environment and opportunities for others to grow. Leadership and mentoring have always been important to me.
What is one part of your daily routine that you wouldn’t change?
When I’m not traveling, taking my kids to school in the morning. Discussing ESPN Radio with my son while my daughter tries to sing over the conversation and dance free of her car seat always starts my day off in perspective.
If you could have dinner with one person you’ve never met, who would it be?
Cassius Clay. I’m a huge boxing fan. The man who became Mohammed Ali was a personal branding genius and his endless confidence and brashness are endlessly fascinating to me.
What do you do to regroup on a tough day?
If I can, go do something with my son, shoot hoops, play catch and so on. It gives me a half hour or so away from my phone. Practice, form and fundamentals messages, repeated to him over and over, are great reminders for me as well.
What do you do for fun?
Get out on the water: wake surfing, boating, being out on the water with friends and family.
I’ve always enjoyed working for myself. In fourth grade, I mowed lawns. In high school, I expanded into window washing. Later on, I started a janitorial company and an outdoor advertising company. Eventually, I raised money from venture capitalists and started a business to sell marketing supplies online. Supposedly, all of that was a single kind of activity called “being an entrepreneur.”
“Entrepreneur” however, is a stretched out word. It may have been a perfectly good word at one time, but it isn’t very useful any more. A fellow who owns a McDonald’s restaurant is called an entrepreneur, and so is Mark Zuckerberg who started Facebook. The word has come to mean something like a “businessperson” who takes “risks” to make money.
I am not sure how much risk is involved in opening a McDonald’s or dropping out of Harvard — maybe because I’ve never done either. But launching Facebook seems fundamentally different than opening the 14,000th McDonald’s. We need more nuanced definitions to describe these varied activities so that we can see the differences.
Originality, not risk
There is certainly risk in starting any new business, just as there is risk in investing in any business, no matter how large or well-established. But the essence of entrepreneurship in its most exhilarating and important sense has to do with originality, not risk. There is greater value in the discovery of new things than in the refinement of the known. That is why cooks and bakers proudly guard their newest recipes, while the best of the tried and true are free online.
Oftentimes, when we’re speaking admiringly of successful entrepreneurs, what we’re really talking about are what I’d call imagineurs (thanks, Walt Disney, for the inspiration).Imagineurs bring to the table not just a desire to build, but a desire to create — whether their creation is a new gadget, a new idea or a new business model.
This act of invention is what differentiates starting up Facebook from starting up a new McDonald’s. Both require the riskiness of basic entrepreneurship, but only one requires doing something no one else has done before.
New life into an old field
To see the potentially tremendous value in thinking up something completely new, consider a field that’s incredibly old: music. People have always wanted to be able to listen to the music of their choice at the time and in the place of their choosing.
Over the past 150 years, our ability to do so has changed and improved dramatically. Each great leap forward depended on imagineurs, be it Thomas Edison and his phonograph, or Nobutoshi Kihara and his Walkman, or Steve Jobs and his iPod and iTunes store. Each imagineur’s efforts enhanced our ability to listen to the music we love.
Imagineurs don’t have to be technological wizards or tinkerers in the lab. Walter L. Jacobs started America’s first rental car business with 12 Model T Fords; today that company is called Hertz.
Reed Hastings upended the video rental business by sending discs through the mail on a monthly subscription basis and started Netflix.
Imagineurs are architects, designers, creators and seers of the unseen. Through curiosity, ingenuity and discovery they contribute a founding insight without which, neither they nor any other business builder can proceed successfully for very long. They find a way to give customers what they’ve always wanted, but better, faster or cheaper than before.
Just as every great inventor had a mother, every great invention began with an imagineur.
Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. Reach him at JerryMcLaughlin@branders.com.