Looking to save money and focus on core competencies, business owners are turning to cloud solutions — where someone else hosts their systems and manages their infrastructure. However, by using a third party, companies can lose the transparency they previously had with respect to the security, operations and controls around the technology.
“It’s put a premium on doing due diligence on the provider upfront to set a baseline understanding of what the cloud providers are doing — and ongoing how they deliver their services,” says Christopher Kradjan, a partner at Moss Adams LLP.
Smart Business spoke with Kradjan about cloud services risks, as well as cloud provider audits that are setting industry benchmarks.
What are the concerns with receiving services from a cloud provider?
When businesses self-hosted, they could observe and directly control the systems to understand if the systems were performing as expected, making changes as necessary. Now, they lose a lot of that transparency working with a third party.
With the ongoing cloud-based operations, companies want to see inside the operations to track performance, such as the system’s security and availability, its functional processing integrity, and the practices around maintaining privacy and confidentiality of the data.
What do business owners need to consider before selecting a cloud provider?
First, look at your current methods of using technology to understand the costs, staffing and implications of how you are delivering services now. Then identify the new system’s requirements and how you want it delivered.
Properly screen vendors through the request for proposal and procurement process, including taking time for demonstrations. Once you’ve narrowed it down to finalists, do reference check references to ensure the systems will work as expected, both from a technical standpoint and being able to achieve your expected ROI.
There are large, well-known cloud providers, but more are small businesses in their startup phase or still building out market share. They lack sophisticated infrastructure, raising questions about their long-term financial viability. Also, if they are successful, their ownership could sell the business to another provider.
You want a reliable vendor with staying power, but in order to have a continuity of operations, contractually you need to know who owns the data and have exit strategies if the vendor sells or goes out of business.
How should you monitor cloud services?
You need a good vendor management program that looks at the risks associated with each vendor and benchmarks the complexity of the solutions to determine the level of monitoring required. The sophistication of the data, level of importance, what it’s automating and its criticality to the business drive backward what is implemented.
If a business takes the time to do this properly, it winds up stratifying cloud providers into very low risk all the way up to moderate and high-level impact to create monitoring systems accordingly. High-risk areas may require vetting with a due diligence questionnaire or site visit, as well as regular reports from the cloud provider.
How can external audits help in this space?
Companies often ask cloud providers for insight into their business, and providers are continually filling out questionnaires. Therefore, many cloud providers are using SOC 2 (Service Organization Controls) reports, which are based on standardized attestation standards that measure how well the cloud provider is providing its services. The examination can attest to the security, availability, processing integrity, confidentiality, and/or privacy of the system.
In addition, the Cloud Security Alliance (CSA), a leading organization that evaluates cloud providers, has developed the Cloud Control Matrix (CCM) as part of its best practices for examining cloud providers.
The SOC 2 report can be mapped against the CCM for double value —the value of the independent SOC 2 attestation report, coupled with the depth and questions from the CCM — to create a rigorous benchmark.
With the SOC 2 examination and/or CCM, cloud providers can give answers to customers, while differentiating themselves in the market. These examinations help business owners with their upfront due diligence and ongoing monitoring. It can even be used as a gating function with the cloud providers to assess their quality and dedication to strong business practices.
Christopher Kradjan is a partner at Moss Adams LLP. Reach him at (206) 302-6511 or email@example.com.
Insights Accounting is brought to you by Moss Adams LLP
You need operating cash to grow your business, but securing a traditional commercial loan isn’t always easy for small and midsize business owners. Fortunately, Small Business Administration (SBA) loans are a worthwhile financing option. An SBA loan typically offers longer terms, more competitive interest rates and, best of all, bankers can be more lenient because the government guarantees up to 75 percent of the loan amount.
“An SBA loan is a sensible option for businesses that experienced a decline in sales and profits during the recession,” says Santiago “Chico” Perez, SBA sales manager for California Bank & Trust. “Bankers can consider your financial projections, along with historical data, when evaluating your loan application.”
Smart Business spoke with Perez about the growth opportunities through an SBA loan.
When should business owners consider an SBA loan, and how do these loans differ?
New ventures traditionally have a hard time securing working capital, but you may get $100,000 to $5 million through a SBA loan, as long as you’ve run a similar enterprise and propose a viable business strategy. You also can use SBA funding to purchase another company or procure equipment or inventory to fulfill a new contract.
Generally, SBA loans can offer more favorable terms. For example, you only need 10 percent down to purchase real estate, and you can roll fees into the loan balance. SBA loans feature higher loan-to-value ratios, longer repayment periods and no balloon payments. Companies often qualify for higher loan amounts because they can amortize the purchase of buildings over 25 years or equipment over the remaining economic life, and need less cash flow to service the debt. Owners also can use funds to buy raw materials, finished goods or equipment to expand into new markets.
How does the SBA’s underwriting criteria differ from traditional commercial loans?
Bankers will review standard requirements such as financial statements and credit reports, but some criteria differ:
- Projections. Bankers consider future sales and historical data when evaluating loan applications. Ensure your projections are realistic and correlate with current financials and forecasts. For example, earnings won’t automatically double with a larger facility or new equipment. Instead, explain how the equipment lowers operating costs or how you’ll use the extra space to add a new production line. Substantiate claims with copies of customer agreements and contracts.
- Resumes. Tout your management team’s industry experience and track record.
- Ownership. Owners with more than a 20 percent stake must submit signed personal financial statements and tax returns.
- Down payment. Lenders must determine the source of a borrower’s down payment, even if the funds are in an escrow account.
- Collateral. The need for collateral hinges on the loan purpose and program so review underwriting criteria at SBA.gov, and state both in your proposal.
- Tax returns. Owners must supply three years of tax returns, financial statements and balance sheets to qualify.
Does the SBA offer other support to small business owners?
The SBA provides myriad tools and support to help owners create a loan proposal and navigate the underwriting process. Small Business Development Centers offer free assistance with financial, marketing, production and feasibility studies, and many centers engage local experts.
The SBA also provides mentorships, free counseling and business plan expertise through the national nonprofit SCORE.
What else can owners do to successfully navigate the lending process?
Loan approval hinges on an accurate, thorough proposal, so take your time and seek expert advice. Bankers want to hear the story behind your numbers; be ready to explain how you overcame adversity and how you’ll use the SBA loan to take your business to the next level. Help your banker understand your customers by including links to your company’s website, LinkedIn page or Facebook page in your proposal. Finally, you can accelerate the process by selecting an approved Preferred Lender who can approve loans without submitting the entire package to the SBA.
Santiago “Chico” Perez is SBA sales manager at California Bank & Trust. Reach him at firstname.lastname@example.org.
Website: California Bank & Trust is an SBA Preferred Lender. Learn more at www.calbanktrust.com/smallbusiness/loans/small-business-loans.html.
Insights Banking & Finance is brought to you by California Bank & Trust
How Kailesh Karavadra is focusing on culture and talent to deliver outstanding results at EY San JoseWritten by Gregory Jones
Kailesh Karavadra didn’t always want to be an accountant. In school he studied electronic engineering and later decided he wanted to try his hand at accounting. He fell in love with the profession and first joined EY in the U.K.
A few years later, the $24 billion accounting firm asked Karavadra if he’d be interested in moving to Silicon Valley.
“With my background in engineering and computers and business background in accounting, it made a lot of sense with what the Valley was going through in the early ’90s,” says Karavadra, managing principal of EY’s San Jose office. “So I came here, and I loved it, and have been here ever since.”
Karavadra has been with EY for more than 20 years, but it was in early 2012 that he was named managing principal for the 750-employee San Jose office, an announcement that coincided with the firm’s 50th anniversary of its presence in Silicon Valley.
“When we wake up every day and we put on our EY uniform and we come to work, our heart and soul is in building a better working world,” Karavadra says. “Over the past year I’ve had the chance to talk to almost every one of our employees, from our partners to our staff, and connect with them and listen to what’s on their minds and understand some of the complexities and challenges we work with.”
Karavadra has been focused on continuing to foster a strong culture at EY as well as continuing to recruit and retain top talent that will help the firm in its goal to build a better working world.
Here’s how Karavadra is making sure EY San Jose is prepared for the future.
Start with culture
Karavadra has been with EY for 23 years. He’s been with the firm for so long that when he speaks with young professionals today they’ll say, ‘Twenty-three years! Aren’t you bored?’
“I laugh because I have never had a single boring day,” Karavadra says. “The one differentiator is our culture and our people value that a lot.”
EY has been named to Fortune’s best companies to work for list for 15 consecutive years.
“That comes from our inclusiveness and flexibility and that we really empower our people,” he says. “For our employees, every day they show up for work it’s about choices. What we try to do is cultivate a culture that empowers them to make the right decisions, leverage the information that’s available in our culture and have diverse thinking to do the right things when serving our clients and our firm.”
Karavadra and the San Jose office encourage and empower employees to drive their own bus. “There are so many opportunities within our firm to drive their careers, to learn so many things, to be able to experience many things, and that’s the culture we want them to be able to feel,” he says. “Our employees are excited, they’re energized, they’re enthusiastic, and they’re passionate about what we do.”
One of the things that EY is very proud of is inclusiveness and that is something that Karavadra heard loud and clear from his people as something they value.
“This isn’t just about ethnicity and gender and those things that many organizations like ours do a great job around, but it’s the diversity of thought,” he says. “We encourage our people to bring that diversity of thought, to bring the different thinking and look at the problems we’re trying to solve for our clients and the value we’re trying to add to our clients in different ways.”
Developing a culture such as what Karavadra has in San Jose and what EY has bred around the globe hasn’t happened overnight.
“There’s a great saying out there that I personally believe in, which is, ‘People don’t care what you know until they know you care,’” he says. “At the foundation of our culture is the caring. We treat ourselves as family.
“One way we foster that culture is through our alumni and our retired partners. We did several events last year where we bring our retired partners back, and it’s amazing to me the pride, passion and excitement they have for our firm. We have almost 1 million alumni that have gone through the EY culture. During these events we invite our alumni to reconnect with each other, as well as reconnect with current employees.”
Another way Karavadra helps foster EY’s culture and helps to build a better working world is through five things that he constantly talks about with his team.
“No. 1 is that we really do contribute to the success of the capital market,” he says. “No. 2 is that we truly help and improve as well as grow businesses. The third is we support entrepreneurs. Fourth is we are incubators for leaders. Fifth is giving back to the community.”
Find and retain top talent
Those five things are important aspects of the EY culture, but they also help drive why employees love to work for the firm and why potential employees are attracted to working there as well.
“There’s a saying by John F. Kennedy Jr., ‘Some people see the world the way it is and say why, others see it differently and say why not,’” Karavadra says. “When we go on campuses we see a lot of very young, talented people who want to make a difference, who want to contribute and have a sense of belonging.”
Karavadra makes sure to talk a lot about the firm’s family culture, team atmosphere and sense of empowerment.
“We also bring our current employees because we want them to be the voice and they will shoot from the hip and give an honest view and opinion of what it’s like working here,” he says.
Karavadra also goes on these campus visits to speak with potential hires. He wants to make sure he understands what those candidates are looking for in a company and in a job.
“What they tell me is they want to work in a dynamic environment,” he says. “They love the innovation, entrepreneurial spirit and the teaming aspect of an organization.”
Focusing on recruiting strong talent is important, but all that energy is wasted if you don’t also focus on retaining those great candidates once you have them.
“It’s not only important to hire good talent and keep them here, but for our clients in the markets at-large it means that when people have energy, enthusiasm and they believe that we’re doing the right thing, they’re going to provide exceptional client service,” Karavadra says.
“They’re going to be a part of the highest performing teams and when you add our global strength and structure to the local empowerment in our local offices, that’s a real strong recipe for people to have a successful career.”
Karavadra believes that above all else, trust is one of the biggest factors for retaining talent in an organization.
“I truly believe in my DNA, that trust is at the heart of it,” he says. “Young people these days are incredibly smart, incredibly connected and talented.
“But when we’re out there talking to people, the most important thing that I share, whether it’s for recruiting or with employees, there is nothing more important than making sure you hold the ethics, reputation and integrity of yourself and our firm at the highest level. Nothing should compromise that.”
Whether you’re on campus recruiting or trying to attract experienced hires, establishing trust is the most important thing.
“They need to feel that this is an organization with honesty, trust, integrity and teaming. Where employees feel there are common goals and we work together,” he says.
While trust is a big reason employees will remain with a company, a second big reason is training and the ability to develop new skill sets.
“We put in 2.7 million hours of training last year for our people,” Karavadra says. “We really want our people to be the very best they can be. It is important for us to make sure we provide all of the latest and relevant insights to them, whether it’s classroom training, industry training or leveraging our web-based technology tools. The San Jose office is the global technology center, so we have a lot of our thought leadership around the world that we develop right here for our technology clients.”
Training at EY is not the only formal training team members get, they also get to take advantage of the firm’s apprenticeship model.
“What I learned when I started as a staff member 23 years ago is that I looked at people around me and there were mentors and coaches who took an interest in me and cared about me,” he says. “They would take me aside and say, ‘You just did this inventory account, this cash reconciliation, and looked at this tax document. Here’s why it’s important for us, why it’s valuable to the client and the impact it could have.’
“Right away from the first day, the training climatizes you to understanding the importance and the accountability that we have on the work that we do. It’s not just showing up every day to put in your number of hours and then we clock out. There’s a real importance to that training.”
How to reach: EY San Jose, (408) 947-5500 or www.ey.com
Work on establishing a culture that is attractive to employees.
Devote time to recruiting the best talent for your organization.
Provide training resources to help retain your best talent.
The Karavadra File
EY San Jose
Born: Kampala, Uganda
Education: He studied electronic engineering and received a master’s degree in engineering from University College of North Wales in Bangor.
What was the first job you had and what did you learn from it?
I delivered newspapers. I used to get up at 5:30 a.m. before school and do it again after school. So it was twice a day, six days a week. I was always inspired by working hard and taking my responsibilities seriously, because you’re accountable for the things you are doing. Hard work will always get you a reward.
Who do you look up to?
I have five mentors that I am in constant connection with who are across five different continents. That has happened because of the years of experience here and the networking. I can call them anytime and pick their brains and they try and make sure they support what I am doing.
If you could speak with anyone from the past or present, with whom would you want to speak with?
The one person who has shaped me more than others is Mahatma Gandhi. I have always been incredibly inspired by the willpower he had. He was someone who realized that something needed to change and he was willing to take the first step.
When thinking about innovation, most people immediately think about new products like the next iPhone or electric vehicle. I, however, have always believed that business innovation comes in many different flavors. For example, Dell re-engineered the way we buy computers, Apple revolutionized the way we buy music and Zappos.com provided a service never before seen online.
I recently read “Ten Types of Innovation: The Discipline of Building Breakthroughs” by Larry Keeley and found it to be a great way to think about all the ways we might innovate within our own companies. All companies must continually improve or they will eventually die. According to Keeley, the most powerful strategies typically consist of several of the following types of innovation:
Profit Model — Gillette pioneered one of the classic business model innovations by creating the razor/razor blade system. The company taught consumers that razor blades could be discarded rather than sharpened for reuse.
Network — Network innovations enable companies to focus on their core strengths while leveraging the strengths of partners. Franchisors license their proprietary systems to franchisees to achieve much faster growth than they could do on their own capital.
Structure — Southwest Airlines was able to achieve faster turnarounds, lower maintenance costs and achieve more efficient operations by standardizing its fleet of Boeing 737s. The company’s unique structure resulted in much lower costs than its full-service competitors and increased profits.
Process — Toyota became the leading car company in the 1980s by creating the lean production system, which reduced waste, improved quality and lowered costs.
Product Performance — Before the launch of the iPhone, Corning Glass created Gorilla Glass at the request of Steve Jobs. This tough, scratch-resistant glass is now used in more than a billion devices worldwide.
Product System — Oscar Meyer wanted to do more than just sell cold cuts, so it created Lunchables — a lunch system that includes crackers, meats, cheese and dessert in a single fun package.
Service — Men’s Wearhouse promises free lifetime pressing of any purchased suit, sport coat or slacks at any of its stores, a service that is valued by business travelers who hate ironing.
Channel — Amazon created a closed wireless network that is free for Kindle customers so they can purchase and download e-books in less than 60 seconds.
Brand — Intel created the Intel Inside campaign to increase the perceived value of computers that use Intel processors.
Customer Engagement — Blizzard Entertainment created the most profitable online game in history, World of Warcraft, by designing the game to encourage and provide incentives to players to connect and collaborate, which increases their engagement and loyalty.
According to Keeley, the “heart of innovation is understanding when a broad shift is called for and driving it forward with courage and conviction.” Low-risk innovations improve existing products or systems by providing higher quality, improving speed or creating better service. The next level of innovation is to “change the boundaries” by bringing new products or services to an adjacent market.
The highest level of innovation is the rare occasion when you attempt to radically change an entire industry structure. Keeley says, “Transformational innovations erase the boundaries between once distinct markets and irrevocably change what is expected from competitors and consumers alike.”
So how can you decide which type of innovation will work for you? Opportunities are often discovered when observing how customers are either delighted or disappointed by current offerings. Keeley discusses how most innovation strategies focus on changes in three primary areas: 1) business models 2) platforms 3) customer experience.
The most radical and transformational strategies employ more than just one strategy at a time. It’s the CEO’s responsibility to determine when the opportunity for strategic innovation exists, and whether the organization is capable of making the necessary changes to succeed.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. The Alliance of CEOs is the most strategically valuable and innovative organization for leaders anywhere. The Alliance strives to provide the creative environments where breakthrough ideas happen. Paul can be reached at
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com
Recently, I had the privilege of attending the EY World Entrepreneur Of The Year conference in Monte Carlo. I’m back to report that entrepreneurship is alive and thriving around the globe!
It was a whirlwind of a trip, packed with networking, thought-provoking panel discussions and personal interviews. We heard from a remarkable panel of speakers including Kofi Annan, former Secretary General of the United Nations and Nobel Peace Prize recipient; Sir Timothy Berners-Lee, inventor of the World Wide Web; John Cleese, award-winning actor, author, humorist and Monty Python legend; and many more.
I also had the opportunity to sit down with some of the world’s most accomplished entrepreneurs. These business leaders come from more than 60 countries that combined represent a staggering 94 percent of the global economy.
In this issue and in the months to come, you’ll learn what the world’s greatest entrepreneurs have to say about leadership, innovation, overcoming challenges, bringing their visions to life and much, much more. You’ll also hear from the leadership at EY as to the importance of celebrating entrepreneurship.
Transforming vision into reality
“Be careful about making assumptions. Those assumptions can lead you down a pretty dangerous path. It is OK to make assumptions and have confidence but you had better do your due diligence as well. An assumption is having those critical for the business make sure it is happening. I am very trusting of people and in the past have had some unfortunate instances where I did make assumptions about something and they were completely the wrong assumptions.”
Dr. Alan Ulsifer, CEO, president and chair of FYidoctors
“Growth obviously continues to be a challenge. The markets demand growth if you are a publicly traded company, and growth is a metric of how the business is doing. If you want to continue to attract the best people, attract the right sources of capital to your business, you have to demonstrate that things are going well and growth is one measure that people look to. I think that if you are a business in an established market, growth can be a challenge because those markets by and large are growing more slowly. So in order to get more rapid growth, many companies are looking at emerging markets and trying to figure out what their strategy should be for emerging markets, those that have double-digit growth potential.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group EY
“One of the toughest things for me was that people have a certain image of my country, Colombia. They don’t trust a company there to have good quality and do good work, but I am very proud to offer those qualities from Colombia. It is not easy but it is something that you can accomplish. I have been down a lot of times, but the good thing I have noticed is that every time something like that happened, I have been able to obtain positive things out of it. I have been broke multiple times, but from being broke I have been able to learn from it and rebuild.
Mario Hernandez, founder and president, Mario Hernandez
Jim Turley leaves his post as Global Chairman and CEO for EY with deep admiration for the entrepreneurs who continue to use their vision and spirit of innovation to change the world.
“They have got this wonderful ability to think outside themselves, to look at the world outside these windows and see the needs that exist out there,” says Turley, who officially retired on July 1.
“Then they’ve got a vision to create a product or service or an idea to meet the need they have seen. They have got the courage to risk everything and they are as persistent as can be. Most of them fail the first time out. But they get up, clean themselves off and do it again.”
“Work carefully with a few people who get a twinkle in their eye. If you talk about your idea, some people will respond with excitement because they get it, but not everybody. Maybe you talk to 300 people and three people will get it. Work with those three people. The web took off because a few people all over the world got it. You get the support from a few people who get it and then it builds from there.”
Sir Tim Berners-Lee, creator of the World Wide Web
Corey Shapoff has a job that many would envy, booking well-known musical acts such as Maroon 5, Katy Perry, Christina Aguilera and Kelly Clarkson for live concerts and private corporate events. But he doesn’t take much time to stop and think about all the famous people on his call list.
“I’m a grinder,” says Shapoff, president and founder of SME Entertainment Group. “I’m the kind of guy who is always looking to what’s next. You’re only as good to me as your last deal.”
It’s that instinctual drive to always try to do it better that is embedded in the true entrepreneur and allows the next vision to become a reality.
“It’s hard for me to turn it off and say, ‘That’s great,’” Shapoff says. “I’m always thinking about tomorrow. You just can’t take things for granted in our business.”
“The skill sets of an entrepreneur involve understanding how to create business. So if you’re going to give back, why not work with kids who need it the most and actually teach them and help them to be entrepreneurs. That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”
Amy Rosen, president and CEO, Network for Teaching Entrepreneurship
“When you’re an entrepreneur you feel like you have never met a deal that you didn’t like. You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”
Jim Davis, president, Chevron Energy Solutions
“It’s important that you have teamwork and all your top players are well motivated with passion, principles and values. We make sure that people know where we are going and what our main objective is for that year. We promote teamwork inside and outside the company. Our directors have to make sure they are sharing our company values and principles with each of their team members.”
Lorenzo Barrera Segovia, founder and CEO, Banco Base
“For entrepreneurs you get a great idea, you start your business and then you have to keep focused. Keep executing that idea if that idea is big enough. Never fall into the temptation of getting out of your business or change it unless it’s strategic. Secondly, try to get financing as late as you can. Never get financing as soon as you can. Thirdly, create a great team and culture, because that’s what will prevail and create value for shareholders and your community. That’s how you scale your business. The last one is to dream big.”
Martin Migoya, CEO, Globant
“It was nothing but a gut feeling. The only thing I knew was there was a big opportunity in yogurt. I grew up with yogurt. Being from Turkey yogurt was a big part of our diet. I wasn’t sure if I could do it – break through in the world of yogurt in retail.
The category was owned by two major companies; Dannon and Yopliat owned about 70 percent of the market, and they had been there for years. As a startup you go to the specialty stores first. That’s how you start and you grow and once you reach a certain level then you go to the big retailers.
I didn’t want to do that. I wanted to go to the big retailers and be in the regular dairy aisle. That was a crazy idea and nobody thought that would go, but at least we tried. When we tried, we convinced one retailer in New York, ShopRite. The result from that was we were able to expand to a couple of other retailers. After the second or third customer that we had success with for our yogurt, I knew it wasn’t going to be about selling, it was about making enough.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
One of my favorite business books, which also made it as a Broadway play and a big-screen movie, is “The Wonderful Wizard of Oz,” written by L. Frank Baum in 1900. My hero in this story is not the young orphaned Dorothy, nor the Cowardly Lion, the desperately in-need-of-some WD-40 Tin Man, nor even the Scarecrow in search of a brain.
Instead it is the Wizard. To understand why the dubious Wizard is my favorite character, one must get past the portrayal of him as scheming, phony and at times nasty.
To appreciate the man behind the curtain, recognize that he is a very effective presenter, though at times this ex-circus performer behaved a bit threatening. OK, he was a jerk, but the point of this column is to take you down the yellow brick road on the way to the enchanted Emerald City and corporate success.
From this tale there is a lesson that one can say all sorts of things, not be visible, and yet still have a meaningful impact.
Another takeaway is that playing this role provides plausible deniability. This absence of visual recognition is particularly beneficial in negotiating when you, as the boss, use a vicar, aka a mouthpiece, to speak on your behalf. This allows you to have things said to others that you as the head honcho could never utter without backing yourself into a corner.
Another plus is you can always throw your mouthpiece under the bus if necessary, of course, with his or her upfront understanding that sometimes there must be a sacrificial lamb. This is not only character-building for your stand-in, but also many times presents an unprecedented opportunity for him or her to learn in real time.
Perhaps the Wizard was the first behind-the-curtain decision-maker, but today this role is used frequently in business and government. In a similar vein, the “voice” of Charlie from the well-known 1970s TV series “Charlie’s Angels” was always heard, but he was never seen.
Frequently there is much to be said for using anonymity to float a trial balloon just to get a reaction. Think about a son having his mom test the waters by talking to dad before the son tells him he wants to drop out of junior high school to join the circus. Maybe that’s even how our former circus-drifter-turned-Wizard-of-Oz got his start.
In the negotiating process it is important to have a fallback when the talks hit a rough patch by instructing your vicar to backpedal, saying that he or she has just talked to the chief and the benevolent boss said, “I was overreaching with my request.”
This also serves to build a persona for the boss-behind-the-curtain as someone who is fair-minded and flexible. All the while, of course, it’s the boss who is calling the shots and maneuvering through the process without getting his or her hands dirty.
The value of using this clean-hands technique is that it enables the real decision-maker to come in as the closer who projects the voice of reason, instead of the overeager hard charger who at times seems to have gone rogue.
It actually takes a bigger person to play a secondary role behind the curtain rather than always be in the limelight. It also takes a hands-on coach and counselor to maneuver a protégé through the minefields to achieve the objective.
However, accomplishing the difficult tasks through others is true management and the No. 1 job of a leader who must be a master teacher.
After you have guided a handful of up-and-comers a few times through thorny negotiations, you will gain much more satisfaction than if you had done it yourself, while engendering the respect and gratitude of your pupils. They in turn will have learned by doing, even though they were not really steering the ship alone.
The final step is to let the subordinate take credit for getting the big job done. This will also elevate you to rock star status, at least in his or her eyes. Soon those who you’ve taught will emerge as teachers too, and the big benefit is that you will populate your organization with a stellar team of doers, not just watchers.
So, forget about the Wicked Witch of the West and move backstage for the greater good of the organization.
Networking is a critical best practice for business owners regardless of their company’s size. When you are just starting out, the effort you put in to making and nurturing contacts can directly impact your revenue and the future success of your business.
Smart Business spoke to Elisabeth Fraser Au-Yeung, vice president of marketing at Sensiba San Filippo LLP, about tips and tools that can help you become a polished and eloquent networking expert.
How can business owners prepare for a networking event?
Savvy networkers always have a plan in place before attending an event. A plan may include evaluating the event — is the event of high value to attend? What are your goals for attending? Will your target audience be in attendance?
Try to obtain a list of attendees and any sponsor firms prior to the event. Use the list to build a prioritized list of ‘target’ attendees you want to meet and speak with. You can take it one step further and create goals for each person you want to meet, as well as speaking points that you have thought out and practiced for when you meet that person. You can even search online for photos of the individuals you want to meet so you can more easily find and recognize them.
In addition, you need to have a few tools including business cards, a practiced and polished elevator pitch, and even marketing collateral that you can hand out. Have a pen so you can make notes on the back of the business cards you receive. Note any significant details that the person you met shared so when you follow up, you can mention this and make it a more impactful and personalized connection.
When you arrive, how do you start a conversation?
It can be more comfortable to arrive to an event early, as the room will be less crowded. Do not wait for someone to approach you. Be the master of your own destiny. Approach a person or a group and ask if you can join them. When you meet someone, make eye contact, have a firm handshake and smile. By doing so, you will look and feel more confident.
As you are speaking with people, listen to what they have to say and be cautious about interrupting. When it is your turn to speak, ask open-ended questions about the people with whom you’re speaking, such as what brought them to attend the event? What makes them passionate about their business or industry? What are they doing for the summer? People enjoy discussing the things they are passionate about, including their business and personal interests.
How should business owners ‘pitch’ themselves and their business?
When asked about your business, have a brief and easily understandable description of what you do. Be sure to incorporate into your description the ‘so what’ factor — what it is that makes you or your company different and why the person you are speaking with should be interested in hearing more about your business.
What are the most important tips for success in networking?
Networking is all about relationship building — having rapport and building chemistry over a period of time with people you meet. A relationship will not be built at just one event. It is something that needs to be nurtured.
Remember to ask everyone you meet for a business card. After the event, send an email and a LinkedIn invite to connect with them within 48 hours. Reference something you discussed by checking your notes on the backs of the business cards so your contacts have a recollection of your conversation. Make yourself ‘valuable’ by offering to send a white paper or thought-leadership piece. Follow up with your contacts every 30 days to keep in touch, and even offer to meet for coffee or lunch to further strengthen your relationship.
Elisabeth Fraser Au-Yeung is a vice president of marketing at Sensiba San Filippo LLP. Reach her at (925) 271-8700 or email@example.com.
For more market insights, visit Sensiba San Filippo's blog.
Insights Accounting is brought to you by Sensiba San Filippo LLP
For the first time in modern U.S. history, companies are employing four generations of workers. Four generations in the workplace can mean more opportunity for success or more problems, depending on how an organization deals with the generational differences.
“We’ve never had four generations working side-by-side, a 20-year-old working with colleagues that may be 50 years older. In order to work together, you have to honor those differences, and you can’t expect everyone to act and think like you do,” says Terri Walker, principal human capital consultant at TriNet, Inc.
Smart Business spoke with Walker about the ways various generations view their jobs and how to manage employees to create a happier, more productive workplace.
What challenges come with having four generations of workers?
An older, more experienced worker (born before 1946) or baby boomer (1946-1964) may have different values than someone coming to the workplace for the first time. Those employees likely expect a level of respect that a Generation X (1965-1977) or Generation Y/millennial (1978 and later) employee wouldn’t automatically give just based on age. The younger workers value the knowledge and achievements you bring to the workplace more than just the fact you’ve been there a long time.
Additionally, there are differences in how generations communicate. Frequently, Gen X/Gen Y workers prefer instant messaging (IM) or email, whereas other workers might value meeting face-to-face and going to a person’s desk to have a conversation. Older workers may feel it’s rude to IM or send a text when you’re in the same building, while the younger worker thinks you’re bothering them by taking time to walk to their desk.
No one way is right or wrong; they’re just different. When you understand and respect these differences, you’ll have a more productive workplace. You don’t have to agree with each other’s values, but you have to respect them.
What are the risks of managing everyone the same?
You’re going to have employees who are not satisfied with their work environment because policies are too loose or too stringent. Employees generally know and understand work duties, but management style is what drives them toward other opportunities. High turnover brings costs in recruiting, management time and loss of productivity. The last thing you want is churn because of the work environment.
It’s up to management to bring everyone together, to find what motivates employees and tailor rewards that keep employment interesting for all. Someone who’s been with the company for years may be waiting for that gold Rolex watch at retirement, while a younger employee wants an immediate — though smaller — reward for a job well done, maybe a Starbucks gift card.
Most of us grew up with the golden rule that you treat others the way you want to be treated. However, a new rule has come into play, the ‘titanium rule’ — treat others the way they want to be treated. That involves understanding what motivates them and treating them accordingly.
How can a company bring people together?
First, look at and understand your employee base. What are the different generations? Does one generation dominate your workforce or management team? How well do they work together? What methods does your organization use to communicate? How is technology being utilized? How are managers communicating with employees? Also, look at turnover to see if there are peaks in a particular department, which could indicate a problem with communication or work style.
Once you’ve conducted an analysis, work with executive management to find the gaps where you could be doing better. Make sure managers, supervisors and all employees feel they are valued. This approach creates a robust, productive workplace where everyone is engaged and respected, which brings real benefits in dollars and cents.
Ensure that your leaders have the knowledge and skills to communicate and work effectively with all employees. It takes flexibility and open-mindedness, a willingness to look at different ways of doing things. Successful organizations and managers incorporate these elements into their structure and practice them daily.
Terri Walker, SPHR, is a principal and human capital consultant at TriNet, Inc. Reach her at (510) 352-5000 or firstname.lastname@example.org.
Insights Human Resources Outsourcing is brought to you by TriNet, Inc.
A few years ago, one of my friends embarked on what he deemed an ambitious, yet simple plan: Write a New York Times Best Seller.
“Ed” had reason to be optimistic: His first two books had sold well and he had successfully leveraged them to launch a burgeoning consulting practice. Ed also had a nationally known book publisher to handle distribution for this book, and he had developed a comprehensive marketing and promotions plan for the launch.
Ed felt all the pieces were in place and was sure he would succeed. His goals were two-fold: break out from the pack and grow his business, and hit the New York Times Best Seller’s list. While his head told him the first goal was more realistic, his heart was set on the second — publicly claiming it was his only true benchmark of success.
Needless to say, Ed’s book didn’t make the list. Few books do. That doesn’t mean Ed’s book was a failure. Quite the contrary, it was a huge success.
As a result of Ed’s book, he landed numerous speaking engagements with organizations and companies around the world. He began to command four- and five-figure speaking fees from those engagements, and his book was purchased and distributed to every attendee.
Further, Ed’s speaking engagements lead to dozens of private companies hiring him to provide one- and two-day seminars, where he taught executive teams how to implement the ideas he espoused in the book. Ed was also presented with numerous business opportunities for new and existing clients to tackle initiatives beyond the book’s subject matter that he had not previously considered but were related to his expertise.
Finally, Ed did sell thousands upon thousands of copies of his book in bookstores nationwide and online through booksellers like Amazon.com and BarnesAndNoble.com. His book was in the hands of the right people — and lots of them — and he had established a national profile.
Viewed through this lens, there is little doubt that Ed’s book was wildly successful — even if it wasn’t a New York Times Best Seller and even if it didn’t stack up to his primary benchmark.
This is the reality of book publishing. Each month, I speak with dozens of entrepreneurs and CEOs about their nascent book ideas and the possibility of having Smart Business Books handle development and publication of their stories and manuscripts. I begin every conversation the exact same way: “If your goal is to have a New York Times Best Seller, we’re not the right option for you.”
That’s because you should write books for the right reasons. If your only goal is getting on a best-seller’s list, then your ambitions are off the mark. Writing and publishing a book is not like a professional sports team’s season — there isn’t one winner who takes the championship and a bunch of losers who fall short. Publishing a book is not an all-or-nothing proposition.
This isn’t to say you shouldn’t aim high with your goals, and having your book become a best-seller is certainly one way to measure success. Setting reasonable expectations, however, is essential.
So why write a book?
One of the most important questions you should be able to answer when thinking about writing a book is, “Who is going to read it and why?”
As Ed’s story demonstrates, a book is a very useful business development tool. It is an immediate conversation starter, an excellent credibility builder and one heck of a leave-behind. If you’re engaged in marketing, why not capture your expertise through a book?
Another reason is to celebrate a milestone or establish a legacy piece. It could be for a 50th or 100th anniversary, or to recognize the history of an organization upon the founder’s retirement or death.
And, if you are interested in helping others succeed, a book is a great way to share your expertise or what makes you and your organization special. For example, if you’ve built an amazing corporate culture where productivity blossoms and innovation flourishes, the “how” and “why” are good subjects for a book. And if you’ve been involved with several mergers and acquisitions, consider sharing what worked and what didn’t, and the lessons learned along the way.
Whatever your story, the key is having a reason to share it with others. The bottom line: It’s your story. Make it count.