Recovery continues to be slower than most businesses would prefer. Part of the slow growth is due to concern from many business owners regarding whether they can trust some of the leading economic indicators released in the past few months.

On a positive note, recent trends have shown that unemployment is being reduced overall. The National Association of Manufacturers also reported that more than 31,000 new U.S. manufacturing jobs were created in February. This increase, however, is tempered with the belief that many unemployed individuals have simply given up on job searches, as they have now been out of work for an extended period. The end of their search effort causes many to fall off of the tracked statistics. This may be causing some lower-than-actual unemployment numbers to be reported. In addition, a recent University of Michigan study showed consumer confidence figures have fallen slightly due to weakening perceptions about the economic environment.

Two other areas facing business owners have caused them to move at a slower pace when considering expansion, acquisitions and hiring of additional employees. These two areas are taxes and the looming health care changes. With the potential for higher taxes and higher health care costs on the horizon, many entrepreneurs are taking a wait-and-see approach. Thus, the reports of companies continuing to pay down third-party debt and stockpile cash still exist.

It seems businesses have returned to profitability as a result of their concentrated efforts implemented to endure the economic downturn. The threat of losses, liquidity issues and, in some cases, covenant violations forced many businesses to lean up operations, challenge spending and do more with less. As a result, many are producing more with fewer resources and have improved their processes. Earnings levels have improved, but most results are still below the levels experienced in the mid-2000s.

Also of concern is uncertainty in foreign markets. While we have had a credit and debt crisis here, overseas trouble has many business owners contemplating international business relationships and opportunities. In the mid-2000s, many production jobs were moved overseas to benefit from inexpensive labor. With the current domestic economic conditions and the lack of stability driven by the uncertainties in the Eurozone, there are rumblings that U.S. companies may work to grow domestic manufacturing and pull jobs back to the U.S. Innovations also are occurring in certain niche areas, and the shrinking cost advantage of outsourcing production is becoming more evident. Job growth continues to be a major focus domestically, and labor negotiations of major industries, such as auto makers, have demonstrated the desire for large companies to guarantee sustainability and promise to keep jobs in the U.S.

There is also concern regarding the stability of the buying power of foreign markets. U.S. companies have continued to expand their penetration into foreign developing markets. The ultimate results of the various national debt issues in the Eurozone could create an economic ripple effect that could affect demand for U.S. products in many foreign markets. Also, the continued political changes and instability in eastern countries can create swings in energy prices and product demand in those markets. This creates difficulty in planning for growth and expansion — and correspondingly a fair amount of caution when it comes to the timing of capital investment and business expansion.

Merger & Acquisition Activity

While the aforementioned factors have slowed down private business owner activity related to expansion and acquisitions, another business segment seems to have picked up. Private equity groups and private investors have been much more active in recent months. There has been significant public discussion in the past 18 months regarding cash that is on the “sidelines” waiting to be invested. We have seen that as the economy begins to expand and smooth out, more M&A deals are being contemplated. Also, business valuations are returning to more normal and expected levels driven by those wishing to market their businesses, and banks are becoming more willing and involved in financing such deals. We view this as an encouraging sign and an indication of continued movement in the right direction.

Business Succession

Each business faces unique challenges, but all ultimately need to consider, plan for and execute a succession plan. Whether the plan involves selling the company to an unrelated third party, transitioning or selling the company to the next generation, an ESOP or some combination of these, this issue has to be addressed. The recent increase in merger and acquisition activity has been driven in a number of cases by exit strategies employed by many business owners. As the baby boomers continue to exit the workforce and leave their businesses, we will see more and more movement and opportunity in this M&A wave. When these decisions are made and the process starts, planning can have a significant effect on the company’s valuation and the ultimate profit realized by the owner. This truly is one of those areas where “an ounce of prevention (of negative results) is worth a pound of cure.”

Here are a few planning ideas that can be game changers when an owner is looking to improve value:

  • Perform due diligence on your business and your business processes and activities. Many sellers believe the diligence process is the buyer’s responsibility. While buyers will spend a great deal of time and effort on due diligence, performing self due diligence can overcome a number of surprises, allow the seller time to position its operations and activities to provide the greatest advantage and better prepare the seller for questions asked during the process. Being prepared when soliciting bidders also will likely increase the number of bidders you may be able to attract.During this process, you should consider reverse due diligence, or preparing the data that will likely be requested during the due diligence process. These are standard documents requested in most diligence engagements. Having this information ready on the front end adds value and helps move the process along. Delays in outside or third-party diligence have been proven to affect deal values.Also, have your company’s financial statements audited by a firm that potential buyers consider reputable. Audited financial statements provide immediate credibility.

  • Make sure you impress upon buyers the value of the company you are offering to them. Build a business case for why the company will continue to prosper and grow and what positive effects the existing infrastructure will have on such growth.

  • Document agreements with employees and third parties. It is important for buyers to mitigate the unknowns when buying a business, so the more documentation for contractual arrangements, the better.

  • Be proactive relative to unresolved or potential litigation. Review pending or threatened claims with your attorneys and be honest about what situations exist. Resolve issues as diligently as possible. Make sure to include all potential human resources issues that may exist.

  • Avoid accounting discrepancies, unusual transactions and changes in reporting methods. An audit, as discussed above, can assist with this. However, remember that any such instances will need to be explained and will be challenged by a buyer. Clouding facts will lead to more questions and may ultimately impact the value of your deal.

When it comes to the value of your company, you can never be too diligent. For more ideas on how to enhance value, contact a BKD advisor.

Scott L. Fields is a partner at the Houston office of BKD, LLP. Reach him at sfields@bkd.com.

Article reprinted with permission from BKD, LLP, www.bkd.com.  All rights reserved.

Published in Houston

Anthony Najem felt something was missing a few years back at the company he co-founded with Karl Meyer in 1987, and he was a little frustrated.

As Meyer Najem Corp. grew and started to change, the challenges involved in adapting along the way became more evident. Some employees weren’t real keen on adjusting to change. They were finding it hard to become more engaged just because of the demands on their workloads — those demands and work-life balances became a key issue.

“As an owner and founder, you get the pulse about what’s happening in the company,” Najem says. “What you find is that people tend to not want change. People become complacent. How do you override the feeling of, ‘Oh, I don’t want to change,’”?

On its way to reaching $62 million in annual revenue with 65 employees, the company started out in light commercial construction and found its niche in health care, institutional, biosciences and other related markets.

“Change is inherent today; it’s much more rapid, so the employees have to start to develop many more skill sets within their role in the company,” Najem says. “And the big one is open and honest communication and dialogue. Once the leaders understand what the individuals are thinking, then you have a much better opportunity to discuss those and come up with plans that will help develop those individuals so they can achieve some of their goals and realize the purpose of their contribution to the whole.

“So what happens is an awakening of how you can take everybody to the next level,” Najem says.

“We brought in some experts to help assess the qualities of the leaders and the next generation of leadership and how we could make them fully aware of their strengths and their blind spots and how they could develop as leaders and as high-performance individuals. We spent a lot of time in that process, we invested a lot of energy and we are starting to see the dividends.

“The energy now with the company is at a high level,” he says. “High performance is not achieved just out of accident. There is a lot of work that goes into being a high-performance or a best of class contractor.”

Here’s how Najem developed a process to awaken employees and key management in a collaborative effect to reach new heights.

Introduce new skill sets

You’ve probably heard it over and over — engaged employees are key to a company’s success. A positive workplace relationship between employee and employer is critical to unlocking productivity complacency. Once Najem realized that achieving positive relationships starts with an improved communication effort — which coincidentally is one of the skill sets that managers and employees often need to develop, he had a plan.

“Stress management and critical thinking are the types of skills we started to develop with our employees and their key management over the last five years because when you receive that feedback, then you have to implement things to help develop those skill sets,” Najem says. “So we instituted a process — coaching/mentoring — that starts with the ownership and works all the way through the company.

In this project, there are 23 current leaders and the next generation of leaders who meet in an environment to see what it is like to experience that part of the company culture.

“When you are sitting in a room with 23 out of 65 employees, you start to see the emerging ones,” Najem says. “But you also get to see that there are people who start to understand how important they are to the whole process and the whole success of the company.

“You may have an estimator who is quite happy being an estimator. But he may take on an outside leadership role in a strategic initiative that comes out of the strategic planning process. We will typically have three to five a year that will emerge as leaders.

The emerging leaders are assigned to those who head a company committee.

“That’s how we move forward with our challenges,” he says. “With that process, you really start to see who is stepping up, who will do whatever it takes. So we’re trying to develop a culture where everybody’s doing whatever it takes without any excuses. There are no excuses because there are so many resources they can tap to make things happen.

“We want an openness policy, which is so important, and the freedom to say, ‘I don’t know that answer. Let me find who within the company can help me with that,’” Najem says. “That’s the fun part of the business; when you create that type of an environment — everybody’s helping each other regardless of what their role or their job description is. That kind of creates a lot of fun.”

As the coaching starts to occur, communication starts to develop naturally and organically.

“Then they start communicating with everybody in the field and throughout the rest of the company,” he says. “The challenge you always have is the home office versus field office and how do you communicate. How do you keep them attuned to what’s happening in the home office? We didn’t want them to feel like they were on an island.”

Many companies practice continuous strategic planning. It’s been a part of Meyer Najem, which celebrates its 25th year this month, and has been more inclusive in the last five years as more efforts have been initiated to engage employees.

“To get people engaged and empowered, you’ve got to also include them in that planning process,” Najem says. “Then you also have to get people to develop self-awareness of who they are and what they bring to the process. Self-awareness is very critical with engagement and in receiving honest and authentic communication.

“Get them involved, get them to create dialogue where they are giving you their true assessments of the discussion so that their voices are being heard, they are being trusted, that what they say you are listening to and so forth.”

A complacency mindset among a manager or an employee indicates contentment with the status quo. In that situation, you may not push the envelope or expand your boundaries. You will just coast along.

Your goal, however, is not to be happy just coasting, but to build your self-awareness so that you feel a sense of stewardship for the company, a sense of ownership.

“How do you create the next level of leaders to understand what it’s like to be an owner, not of the company but an owner of the project?” Najem asks. “You start to develop in employees the thinking: ‘I’m not just a taskmaster. I am also a great communicator.’ ‘I’m not just a good project manager but I’m a good leader.’

“Just change the dynamics of how they think about it, how they assess a challenge and then how do they go about getting it,” he says. “It’s through more of a collaborative effort than ‘I’m on the island by myself.’ I mean, it’s an everybody’s-in-it-together-type of thing.”

The theme that Najem was hoping for was that employees are all one within the company and that it takes all of us to create success.

“I just think it is so important that people realize how important they are to the whole, and that’s how we’ve organically grown this company — to get them engaged and empowered,” he says.

Undo complacency

If a company is showing signs of complacency, it’s time to press the “undo” button. The company probably will have unofficially developed an internal compartmental status and employees have parceled themselves into their own departments or within groups. This situation goes against the grain of teamwork and needs to be rectified.

“What we did was we broke down some walls, we tipped over some silos about how people think and how they compartmentalized themselves,” Najem says.

“I think we achieved getting everybody to think as one and how they fit into one entity, whether it’s a sheet of music or a puzzle, everybody found their place in the puzzle or in the sheet of music. It really helped everybody understand why they are important and why their voice is so critical to hear to develop success.”

At first, there was some skepticism. After all, the apple cart was being tipped over. Najem held sessions with all employees to initially deal with some skepticism, but also some enthusiasm.

“They kind of had this wait-and-see attitude, but what was really validating was that everybody was there,” Najem says. “From the owners to everybody, I mean everybody was in the room at the same time doing the same things, fully engaged, and fully committed to ensuring that there were good things to happen moving forward.

“I can honestly tell you that there was a lot of trust that came into play that allowed for some very authentic communication.”

And at that point, it is easier than you think to see if you are getting employee buy-in. Look for some subtle clues.

“When you are sitting around in a room with folks, and they start to squirm, you know they have some body language that you get from them, and then if they open up and start talking, and they are committed to participating, that’s probably one of the biggest spots of where you see if somebody is engaged or not,” Najem says.

If employees don’t feel threatened when they express their opinions, it shows trust.

“But leaders have to show up with trust,” he says. “You’ve got to show up with it because if you don’t, then you won’t get that. You won’t get that shared dialogue.

“You have to start it by communicating what are the intentions and the goals of the meeting. You’ve got to be able to communicate it effectively, and then you’ve got to create an atmosphere that allows that.

“You want to go to a neutral place where people are away from the daily grind so you almost have to condition them into allowing themselves to say, ‘I’m taking my hat off, my 8-to-5 hat, I’m coming into a leadership or another role that is going to allow me to be a contributing part to the vision of the company,” he says.

Team-building exercises are often used so employees will start to build trust, and you can mix up the varieties.

“There are all kinds of techniques to do that,” Najem says. “You can switch from go-kart racing to lighting a fire with flint and rubbing sticks together. We like to have fun. You’ll do team building through that.

“The team building process starts to allow them to start to trust. Then they start to have some dialogue that becomes authentic and less threatening. And so everybody is starting to get more comfortable with each other. You can’t just open up and say, ‘OK, this is an open forum. Give me your thoughts.’ So it’s been kind of fun watching this develop. Then you really start to see it within the hallways and offices and just the way the people communicate with each other.”

External and internal communications become even more of a greater need when change is occurring and you’ve got to get everybody to hear the same thing. Najem started quarterly company meetings for all employees as a first step. This effort regularly helps employees stay in the loop.

More and more, technology is making it easier to communicate. Companies are regularly developing intranets to get information regarding issues ranging from training to opportunities that exist within the company and with outside of the company. They are also using additional means of staying in touch with each other on the job.

“With the institution of iPads, it’s pretty amazing what you can do,” Najem says. “iChat, where you can see the person, has become a big thing in the last year.

“Trying to get everybody to stay connected has been a challenge but we are doing it through those types of means,” he says. “It’s been interesting to see how technology can help you.”

Keep them challenged

With employee engagement, there is no finish line. There’s no point when everyone is as engaged as they possibly can be and there are no new frontiers to explore. The best rule of thumb is that once you feel you have mastered it, you have to start all over.

“You have to continuously keep them challenged,” Najem says. “What happens if you don’t is that they become complacent, and tend not to be as engaged as you’d want them to be.”

New, creative teambuilding efforts have to continue, as do motivational efforts geared toward a multigenerational workforce, which is becoming more prevalent in companies today. Opportunities to discuss and air concerns should be encouraged.

“Healthy dialogue and debate is relevant to company culture because it creates possibilities,” Najem says. “When we have healthy dialogue, we have possibilities and people understand the difference, and when someone starts to argue, they get pretty much shut off. We say, ‘You were off task. Let’s get back to task. It’s important.’

“What really empowers people to do well is knowing where things lie – what’s the most important thing – so that they now have purpose,” he says. “Having purpose tends to allow them to not think so critically about the tasks. They think bigger. They think about how this is all going to result so that they can have a better work/life balance.”

How to reach: Meyer Najem Corp., (317) 577-0007 or www.meyer-najem.com

The Najem file

Born: Indianapolis. I moved to Houston after graduation from college and worked for a co-generator of power and steam. I moved back in 1987 to start in business with my partner Karl Meyer.

Education: Purdue University. I received a degree in building construction management.

What was your first job?

My first job was at the U.S. Postal Service. I was a mail sorter and a dock person. I will remember the job because it was a job I never wanted to do again. Sorting mail was not my cup of tea. But it paid well because it was a federal job. I think I was 15 and I saved enough money to buy my first car. I spent $4,200 for TR-6 Triumph. By the time I turned 16, I had my dream of buying my first sports car.

What was the best business advice you ever received?

I worked in Houston for company called Power Systems Engineering. There are many guys there who were just the best of the best. I remember when I was talking to a couple of them about starting my own business. They said to start a business when you are young because when you get older, it’s tougher to leave the career to start something new. The one thing that I can add to that is that I was told you should learn from someone else’s mistakes and then try not to make them. That was probably the more provocative, so I worked for somebody for seven years before ventured out to do my own thing.

Who do you admire in business?

I admire business leaders who balance their success with family and community. I just know that there are great leaders out there, and many of them are challenged by the daily grind of the business. And when I see individuals including myself that try to balance that, it’s not an easy deal.

What is your definition of business success?

Success comes in all forms. From the great referral letter that you receive for a job well done, to recognizing the employees on the job, to receiving the Crystal Eagle award, which we did, a validation of zero injury from your peers, to the local newspaper voting you a top work place all of the last three years — those are all validations of success. It’s not one thing. But it’s just a host of things. But what we really try to employ here is we want to exceed our client expectations. We’ve always, always instilled that into our people that client satisfaction is No. 1.

Published in Indianapolis

It’s OK to quit. Think about how much time we waste with stuff that isn’t working.

Quitting doesn’t necessarily mean failure. It’s OK to change your mind, to quit a job where you are miserable or to let go of a partnership or a goal that is no longer moving forward.

Seth Godin, said it in his best-selling book “The Dip”:  “Strategic quitting is the secret of successful organizations.”

Strategic quitting — or proactive, thought-out change — is not about stopping because something was harder than you anticipated. Life is hard. Strategic quitting is about identifying the wrong turns. It’s about not wasting your time when nothing is going to get better.

This applies not just to business, but to everything in life. Quit the eating patterns that don’t make you feel healthy. Quit the drinking habit that leads to fuzzy thinking. It’s OK to change something when it isn’t working.

When deals fall through

It’s the same thing with the occasional business deal that just doesn’t happen. It looked glorious from afar, full of promise. But then, something changed and you face the stark reality that the big new client/new piece acquisition/leveraged buyout isn’t going to happen after all.

It happens to us all. My advice? Communicate. Never be afraid to give people the bad news. Let your team know what happened and be transparent. Tell them your vision, the next steps to get there, and move on. It will make you happier when you “quit” and move on to something that makes you more excited.

So many people are not in love with what they do. What they do for a living — and what they do outside of work.

Plenty of great business-savvy men and women just don’t get this connection. They are far too focused on the brass ring (money, stature, success) and not on their passion, the emotional ground wire that lights up inside them.

To get passion, you need to want it

Few leaders “get” this. And that’s unfortunate, because without passion — a mission that you love — you burn out. It’s true in business and it’s true in relationships.

You have to want the concept of passion to get it. You’ve got to love what you do, to feel the kind of success that lights you up, where you don’t “hate” to go to work each morning, and can’t wait to get there because you’re excited to attack the day.

When you work with someone that lights up, you know it. You feel that positive energy radiating out, and it is absolutely contagious.

When I talk to people about whether they are passionate or not, most often I get a blank stare. They have never been asked about it. In fact, many people don’t know what I mean. I like to ask them what would get them excited to go to work each morning. What would they be thinking about when their mind raced and they couldn’t get to sleep? If money didn’t matter, what would they be doing?

Finding your passion is very difficult. But when you do, it’s amazing how you feel and what you can accomplish because you’re excited. If you do what you’re passionate about, good things will follow.

Robert Pagliarini is president of Richer Life Media. Here are some questions he thinks may help you find your passion:

What would you do that would give you a sense of pride? What would an ideal day look like for you? What have been the most significant experiences in your life (traveling, studying, awards that you’ve received)? When are you at your best? What does it look like? Suppose you had 24 hours to live. What would you regret not having done?

So what’s your passion? Do some digging. Figure it out. Put it into daily practice at work and at home.

David Harding is president and CEO of HardingPoorman Group, a locally owned and operated graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted as one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at dharding@hardingpoorman.com. For more information, go to www.hardingpoorman.com

Published in Indianapolis

When running a business, it’s difficult not to compare your company practices to those of other successful businesses. Benefit plans, however, need not be identical. Effective benefit plans should be as unique as the companies that create them and the employees for whom they provide financial security, health assurances and lifestyle perks.

There are, however, some best practices that can transcend all plans.

Design a benefit plan that achieves the employee’s goals and yours

When creating or redesigning a benefit plan, consider what you hope to achieve for the company and for your employees. Do you want a plan that provides financial security or promotes wellness? If you aren’t certain, think about your existing employees as well as those you hope to attract.

What is important to them? Almost every employee wants health care insurance and a savings plan, but younger workers may also value education reimbursement while working moms may want childcare or flexible schedules. If you aren’t sure what is most important to your employees, ask them. A thorough benefits survey can help clarify your employees’ values and correct misconceptions.

Educate employees on benefit options

Benefit plans have little value if employees don’t participate in them. Take time to educate employees on the various benefit options your plan provides so they can make smart choices when enrolling in the plan.

When employees fully understand their benefits, they are more likely to use them to their fullest potential. Plus, employees will better appreciate the value of their benefits and how they contribute to their total compensation.

Use benefits as a recruiting tool

When you’re competing for top-notch talent, compensation alone may not give your company the edge it needs. Use your benefit plan to enhance your company’s appeal and target the type of employee you want to attract.

For example, if you want to attract hard-charging employees who are focused on the long-term success of the company, initiate a profit-sharing plan that rewards employees based on the company’s performance. Highlight those aspects of your plan when interviewing job candidates, screening out those that are more concerned with their immediate gain than in contributing to the business’ bottom line.

Initiate a wellness program to minimize health care costs

With recent changes to federal health care regulations, employers are under more pressure than ever to provide health insurance for their employees, so you can bet most employers are looking for ways to reduce those pricey premiums. Just as “an ounce of prevention is worth a pound of cure,” a well-designed wellness program can be an effective remedy for high healthcare costs.

Promoting fitness and healthy lifestyle choices can help your employees prevent injuries and avoid serious illness down the road. A wellness program doesn’t have to include an onsite health club or expensive gym memberships. It can be as simple and inexpensive as supporting your employees in a walk for charity, hosting a health fair or sponsoring a companywide weight loss challenge.

Reward retention

The value in retaining critical employees is beyond measure. Not only can the cost of continued turnover do serious damage to your company’s bottom line, but maintaining your business’ institutional knowledge and a consistent point-of-contact for your customers is priceless.

With this in mind, design benefit features to encourage longevity and reward retention. Provide options for every stage of your employee’s lifecycle, from the time they are hired to the time they retire. Recognize and reward employees’ tenure with the company with benefit features that grow in value over time.

Maintain a constant commitment to benefits

When things get tough, as they often do, it is natural for employers to consider cutting employee benefits to reduce costs. Don’t automatically assume that this is the most effective cost-cutting measure, because the fallout can be hazardous. Providing a sound benefit plan for your workforce, especially when times are tough, provides employees a sense of security and reminds them that you are still committed to them. As a result, they are more likely to remain committed to you and the company long after an economic upturn.

Too often, benefit plans are a source of stress for employers. It doesn’t have to be that way. If employers adhere to a few tried-and-true best practices when designing their plans, they can offer a benefits package that provides employees long-term security, boosts morale and makes a powerful statement about the company’s commitment to its workforce.

John Allen is president and COO of G&A Partners, a Texas-based human resources and administrative services company that manages human resources, benefits, payroll, accounting and risk management for growing businesses. For more information about the company, visit www.gnapartners.com.

Published in Houston

“Value-added” has become one of those terms that has grown in ambiguity in recent years. The term has been overused, improperly used in some cases and often misunderstood by marketers.

At the 2012 Columbus Presidents’ Forum hosted by The Entrepreneurship Institute, the question of how to use the concept of “value-added” was asked in a breakout session I was facilitating. It occurred to me that if one CEO was curious about this, there are probably others out there with the same question.

The term was defined and popularized in 2000 by renown marketing professor Peter Doyle defined and popularized in his last book, “Value-based Marketing.” He labeled the “differential advantage” as giving customers a reason to choose your products. According to Doyle, it has four important components: value to the customer, uniqueness, sustainability and profitable delivery. All four components must be present.

Defining market value

Let’s take a look at definitions of market value and value-added. Marketing value at its core is presenting a product or service to potential customers for a perceived fair exchange of benefit and cost. It is commonly expressed by the following equation: Value = Benefits/Cost.

Online encyclopedia Wikipedia states that value-added refers to "extra" feature(s) of an item of interest (product, service, person, etc.) that go beyond the standard expectations and provide something more while adding little or nothing to its cost.

Putting it together

If we put it all in the proper perspective via the definitions above, value-added can be a very powerful marketing tool.

It makes sense that before we can address value-added, we first must address the whole value equation. Are the products and/or services we offer to our target market perceived as valuable? If not, there is obviously some work that needs to be done before we can move on.

If there is value, is the value great enough to cause uniqueness or market differentiation from our competitor’s products and/or services? If not, what benefits, features or additional value can we offer to achieve a differential advantage? And since the market expects us to offer this added value at little or no cost to them, how can we add value without significantly adding to our production or service costs?

Ah, this is where the value-added equation gets tough. It is unlikely that most of us can come up with the answer on our own. We will probably need to pull our product development, production, sales/supply chain and marketing teams together to brainstorm on potential solutions. Then we will need to test the market to make sure the value-added component increases the perceived worth and satisfaction in the eyes of the customer, thus achieving a differential advantage.

This means it takes an investment of time and probably an investment in further product and/or service development. I know we all want an easy answer which, by the way, is one of the causes of ambiguity around the term value-added. If it were easy, there would be no real increased value because the fourth component needed to achieve differential advantage — sustainability — would not be achieved.

The fact that it is hard work and takes deep organizational thought, investment, discovery of special capabilities to deliver something of higher quality at little cost and input from the market is what creates the true value-added components needed.

Make the investment now

As the economy continues to recover, investing in the discovery of the value-added differential advantage for your products and services will catapult you ahead of the competition when market growth is in full swing. If you wait, you will lose precious time and opportunity to grab market share.

Why not make it easy to choose your product or service over the competition — it’s a no-brainer in my book — just as your value-added component should make the selection of your product or service a no-brainer for potential customers.

Kelly Borth is CEO and chief strategy officer for Greencrest, a 21-year-old brand development, strategic marketing and digital media firm that turns market players into market leaders. Borth has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 30 certified brand strategists in the United States. Reach her at (614) 885-7921, kborth@greencrest.com or @brandpro, or for more information, visit www.greencrest.com.

Published in Columbus

After a major computer company sold a division to an international rival, the buyout left Susan wondering about her future. Susan found herself on the outside of the corporate world looking in. No longer the young college graduate on the fast track with the company she had worked for since graduating with honors in engineering, Susan watched as the restructuring left her without her high-paying job. Now at age 49, Susan was concerned, and she questioned whether her age had anything to do with her being let go. “They hired my body double from the same university and another kid,” she says. “Two new hires who would work for basically the same pay had replaced me for less per year. Yes, I have the experience, but I understand business decisions.”

Outlook changing

The Center for Retirement Research recently studied older workers and employer attitudes toward them. The study illuminates many key points, including the fact that attitudes are changing toward older workers. In the past, some evidence and many personal experiences and stories suggested that employers tend to shy away from older workers. Evidence in the courts indicates that discrimination does still exist, an unfortunate reality of a competitive marketplace. Privately, human resources professionals and other hiring decision makers point to not wanting to hire individuals with ingrained bad habits, the potential for higher health care costs and the “I’ll do it my way” attitudes that some older workers have demonstrated at their companies.

Statistics from a number of companies demonstrate that workers over 50 sometimes have a harder time finding work. The reality is that today’s 50-year-old is not the same as the 50-year-old of yesteryear. The argument can and should be made that older workers today are much different than older workers of the past. For example, Boston College’s Center for Retirement Research suggests that today’s workers are better educated than even those of 10 years ago. They are more physically fit. Physical demands of jobs are lessening as most manufacturing goes overseas. Labor-intensive positions have been and will continue to be lessened by machines and technology advances.

Assessing productivity

In a recent survey, 400 private-sector employers were asked to evaluate the relative productivity and cost of white-collar and rank-and-file workers age 55 and older, and whether, on balance, older employees were more or less attractive.

Employers worry that their older employees will have a hard time learning new tasks quickly,  that their physical health and stamina will be a problem, and there is a significant concern about  how much longer the older worker will stay on the job.

It is the cost of the older worker that is most concerning to many employers, not that the older worker is of lesser value. Over 40 percent of employers view older workers as more costly. The bottom line remains: Most employers see older workers as both more productive and more costly.

In most cases the cost and benefits seem to balance out. However, white-collar workers have much better prospects for working later in life than rank-and-file workers.

Flexible work schedules

Older workers might, for instance, have to accept lower pay or part-time work to stay employed. Many employers are hiring older workers on a part-time, temporary or project-assignment basis and not necessarily full-time. This means that not only do they get employees who need less training and are generally more reliable than their younger counterparts, but employers rarely have to pay benefits, unless they are hired 30 hours a week or there is a union issue, and they often pay an hourly rate or a project-basis rate that is far less than what these workers were earning when they worked full-time.

Another new survey suggests that employees are hoping for more interesting work in retirement. A few employers are beginning to get the picture.

There seem to be no easy answers, but it is important that as we develop the future leaders of our work force, we embrace this incredible knowledge transfer opportunity.

Sherri Elliott-Yeary is the CEO of human resources consulting companies Optimance Workforce Strategies and Gen InsYght, as well as the author of “Ties to Tattoos: Turning Generational Differences into a Competitive Advantage.” She has more than 15 years of experience as a trusted adviser and human resources consultant to companies ranging from small start-ups to large international corporations. Contact her at sherri@generationalguru.com.

Published in Dallas

When SugarHouse Casino opened its doors to the public in September 2010, the buzz was palpable throughout the region. Located on the Delaware River, it is Philadelphia’s first casino, and its debut came with a full royal fanfare: media headlines, applicants clamoring to apply for jobs and a leadership team assembled from a pool of experienced gaming industry experts from around the country.

At the center was Wendy Hamilton, the casino’s general manager. Like everyone else associated with SugarHouse, she basked in the glow of the casino’s debut. But she also knew the spotlight wouldn’t always be this bright.

“It was all new, novel and exciting,” says Hamilton, now in her second year running the casino. “We were all making decisions every day that were going to determine who we are and how we would do business for the rest of our lives here. It was really a high energy and exciting time for everyone. But now, it’s not so new anymore and it is not as exciting. The media isn’t as interested in everything we do. So the challenge has become about how we ensure this is still a great place to work, ensure people still enjoy coming to work every day when it isn’t so novel anymore.”

It happens to virtually any business that opens to a heaping helping of pomp and circumstance: At the outset, it’s an event. After some time passes, it becomes a job. Even if the Phillies are in first place this month, by now home games have become a matter-of-fact part of summertime life. The buzz surrounding Opening Day is a distant memory.

Replace the crack of the bat with the ringing of slot machines, and you have Hamilton’s predicament over the past year-plus.

“It is something that the leadership team here thinks about every day,” she says. “We are always looking for new ways to keep the team engaged, ways to get everybody on board with what we are doing.”

Plug yourself in

Maintaining a high level of engagement with your employees comes down to how you communicate. That is the simply stated version of the solution. What Hamilton has discovered is that you need to choose your interaction points for the best possible impact.

In an organization like SugarHouse, which employs just more than 1,000, you can build communication touch points through a variety of mediums. The tried-and-true methods include newsletters, e-mail blasts, speeches and videoconferences.

But what works best for Hamilton and her leadership team, and what she emphasizes, is relationship-building through informal interaction. Hamilton walks the casino floor, visits the employee lunchroom, chats with cashiers during a lull in business, so she can learn what they are learning. Hamilton says it is critical to develop a sense of familiarity between the casino’s executive team and the employees working the floor, because those employees talk to customers every day. They find out what customers like and don’t like about their experiences at the casino, and can help the executive team to identify issues at ground level before they become major problems.

“We are in a very consumer-oriented business, in a very high-touch industry,” Hamilton says. “For example, we do a lot of giveaways to certain customers who are worth a certain dollar level to us. They are usually invited to the casino at a specific day and time to pick up their gift. Let’s say it is a set of pots and pans, which is a gift that creates some logistical concerns. A set of pots and pans is not easily handed over to a customer and carried around the casino for the rest of their visit.

“So what might happen is an employee relays a suggestion from a customer about doing the pot and pan giveaway at the end of the visit, so they can just pull up to the valet stand, put the package in the car and drive away. On the executive level, it might make more sense to us if we give the package away at the promotions center, but the people at ground level will have a better feel for the details of the situation.”

Through their daily observations, employees can formulate common-sense suggestions that can have wide-ranging positive results over the long term. But if you don’t put in the time and effort to connect with them and develop a sense of familiarity, they won’t feel engaged, their enthusiasm for the job will wane and they won’t come to you with their ideas.

“I like knowing people’s names, knowing what part of the casino they work in, and even knowing a little bit about them personally,” Hamilton says. “If you can keep it casual and informal, it’s not a big deal to run into them somewhere and ask them to help you out with something. You can comfortably ask them about a new potential policy and how it might impact them in their area of work. It keeps the communication very quick, easy and efficient.”

You won’t be able to use every single idea that an employee brings forward. But even when you have to reject an idea, or table it for a while, you can still use that as an opportunity for connection, engagement and motivation.

“When you can’t use an idea, there ought to be a reason,” Hamilton says. “Either it is a good idea for your purposes or it isn’t. If it is a good idea, you use it. If it isn’t, you need to explain to the person why it won’t work. If it is a regulatory reason or something along that line, just tell them that. More often than not, it’s going to be a situation where you like the idea but you just can’t use it right now. It might be something you can do a couple of months from now. If that is the case, you have to tell them it is a great idea and there is a better chance of it happening in a few months. But it all comes back to how you communicate with the person in that situation.”

Though you can’t often develop the same level of familiarity with customers that you can with employees, you can take some of the same informal communication principles and apply it to how you interact with customers.

“I find that the little tidbit you get from a five-minute conversation with a customer is as valuable as the customer surveys we send out,” Hamilton says. “It’s a lot of being around the operation, being there while they are playing or while they are having dinner. You just ask them what is going good about their experience and how their experience could be better. I would say it is difficult sometimes in a business setting to really get a group of executives used to just being there and having those kinds of conversations – the type of conversations you would have around your own water cooler in the executive offices. You need to be able to talk like that to your customers and your employees because that is where you are going to get the real information.”

Build your team

If you’re going to keep your employees engaged over the long haul, your communication philosophy has to become a fundamental building block of your culture. Putting words on a piece of paper, or stating it to your work force, is only the first step, however. You need to promote your communication philosophy, and you need to have a leadership team that fully buys in to your plan and can implement your communication strategy.

At SugarHouse, Hamilton had the advantage of building her own leadership team from scratch, and doing so months before the casino opened its doors.

“We were very lucky here, because at the time we were hiring, this industry was experiencing some turbulence in other markets like Atlantic City and Las Vegas,” she says. “What it meant was, people who were some of the experts in this business, people who had been in a certain field for quite a while and might have turned us down under other circumstances, were willing to take the risk and come here. The field was kind of open to us.”

After Hamilton made the first couple of management hires, a chain reaction developed as those hires then started recruiting via their own professional connections.

“Once I had one or two people on board, those people did the same things, helping me by recruiting some of their own peers to fill out their own teams,” Hamilton says. “We also hired a number of people who applied to us cold, but it helps to have connections through somebody that you are working with, and you’re able to reach out and recruit through those connections.”

As Hamilton was recruiting to build her leadership team, and her team was recruiting to build their departmental teams, she emphasized three overarching traits that all management-level team members needed to possess.

“They needed to be smart, like any executive would, and they need to be a bit clever about solving problems,” she says. “Beyond that, they also need to be people who can interact in a social setting. If they are people who can function in their neighborhood or in their kid’s school, it’s largely the same thing. Sometimes you have to train people to have those informal conversations at work, because it’s not how they were coached previously. But anybody who is smart and fairly social can pull it off once the main idea is introduced.”

When building a team that can stimulate dialogue and engage employees, you need to consider your culture first. If you want to build a management team that can promote open communication, that concept first needs to be a part of your organization’s core values. If you can’t define your values accurately, you won’t be able to hire to fit your values.

Through her professional connections, Hamilton knew of many people in the gaming and casino industry with a high level of technical competency in their areas of specialization. But by getting to know those people over the years, she developed a sense of who would fit the culture at SugarHouse and who wouldn’t.

“I can name a couple of good finance folks, but I knew right away the one who would fit perfectly into the culture we wanted to build here,” she says. “You really have to be committed to making sure that you don’t have someone who might be very strong on the technical side but won’t add anything to the culture. But while you want everybody to identify with your culture and values, you don’t want to hire people who are all the same. So I don’t like to use the word ‘fit’ when it comes to culture. You don’t want to end up with 10 vice presidents who all have the same type of personality.”

Good team-building falls under the heading of “chemistry.” It’s a nebulous word when it comes to social interaction and what it means to have everybody working together. But somehow, the issue of chemistry must be addressed if you’re going to have a unified management team, and in turn, a unified, engaged and motivated company at large.

“At the end of the day, it’s up to you to make the call about whether a person is a good cultural fit or whether they simply bring the technical skills,” Hamilton says. “You could have the best people, but if they don’t fit with the culture and won’t get along with certain people, it weakens the team.

“You want to create a team that likes being together, a team that will look out for each other and have each other’s backs. Everybody has strengths and weaknesses, and if you build a team that is complementary, the job gets done, everybody plays a part and nothing falls apart because of a conflict or somebody’s weakness.”

How to reach: SugarHouse Casino, (877) 477-3715 or www.sugarhousecasino.com

The Hamilton file

Born: Philadelphia

Education: Degree in biology from Duke University; MBA in finance from St. Joseph’s University

First job: I sold saltwater taffy on the boardwalk in Ocean City, N.J. when I was 14 years old.

What is the best business lesson you’ve learned?

Don’t take it personally. Let me define that a bit. On one hand, people do their jobs well because they take it personally. However, some days you just can’t get a hit. And when things aren’t going your way, that is when you have to be careful to not lose enthusiasm. Sometimes, things are going to get tough and something is not going to go right. But especially in a leadership role, you can’t let it affect your energy and enthusiasm. You still have to project a positive attitude, because people are going to look up to you.

What is your definition of success?

Obviously, you need to be producing a quality end product. But for me personally, I want to be able to assume those things are happening. It sounds ridiculously simple, but success is when you as the leader have the people around you fulfilled and your employees are happy. You want an environment where people enjoy coming to work. That, to me, is when you can say you are successful in your role.

Published in Philadelphia

Even before he became president and CEO at Mission Hospital, Kenn McFarland knew a change was coming. Health care reform was on the doorstep and it was going to find its way inside, one way or another.

“The new health care environment was taking shape, whether you call it Obamacare or just the country responding to health care taking up so much of our gross domestic product,” McFarland says. “You might call it the riding of two horses, moving from this one horse at a gallop to this other horse that has yet to catch up.”

McFarland had been the chief financial officer at Mission Hospital for nearly 13 years prior to taking over as the interim CEO in May 2011. By November, he had made enough of an impression on the hospital’s board and trustees to receive the position on a permanent basis. With more than a decade of experience as a high-ranking hospital official, he was well qualified to take the reins and help forge the hospital’s future path.

But just because McFarland was experienced doesn’t mean the task was any easier. As part of the national health care reform plan, hospitals around the country were under pressure to transition from fixers to preventers, to medical professionals concerned not just with curing ailments but with managing the preventative medicine and lifestyle choices of their patients.

It was a drastic change in direction for a hospital staff of more than 2,400, used to operating in a specific way. Until that point, preventative medicine largely took place outside of a clinical environment, overseen by nutritionists, physical therapists and other specialists. Now, the staff at Mission Hospital would need to tear down the silos and work hand-in-hand with those specialists.

“We had to do a 180 and embrace this new business model,” McFarland says. “We have this wonderful, successful business model that we had been enjoying, but the old model celebrated a fee-for-service reimbursement. The more you did at a hospital, the more money you made. This new model will have us managing whole populations of people, keeping them healthy and out of the hospital. That is a transformational shift. It’s very taxing, you have to build a compelling argument for that platform and get people to follow that model. That would be, I’d say, one of the most challenging things that any CEO would be facing right now, especially in our health care environment.”

Develop a transition plan

In the case of Mission Hospital — and all the hospitals that comprise St. Joseph Health System — building a compelling argument for change began with locking the door and throwing away the key.

The entire health system set up a series of cascading strategy meetings, with the first meetings pulling together the CEOs from all hospitals and medical centers in the system.

“We basically locked ourselves with our board members and physician leaders, and spent a couple days together,” McFarland says. “We told ourselves, ‘OK, we know how we got here, we know how we got to be successful to this point. We know there is uncertainty in the future.’ We had guided conversations to help construct a plan in which we wouldn’t be victims of the future, but rather we would help shape the future.

“That is exactly what we did. We locked ourselves up and started crafting dimensions of performance, and from there, we started to engage everyone else and cascade it.”

The CEOs came up with three desired outcomes, intentionally throwing the ball a little too far downfield in an effort to force everyone in the organization to reach for the goals.

“The outcomes are fairly audacious. First, we want perfect care. Second, we want all of our encounters with each other, with doctors, with patients and with families, to be sacred. Third, we want all of our communities around all of our hospitals to be in the top decile in terms of their own health — their own weight management, their own dietary consumption, their own mental, physical and spiritual health.”

With the goals set, McFarland returned to Mission Hospital and began working with his leadership team to construct processes that would enable all employees to achieve the organization goals, given a willingness to work hard and stretch their capabilities.

“We built a set of enablers that would allow the work to happen,” McFarland says. “The set of enablers would allow for the fulfillment of the strategy, would show us what would be necessary to allow the strategy to work and be successful, and help us to satisfy our mission and outcomes — the things we are striving for.

“So when you think of the process, first we had to articulate those strategies, then we had to fashion those enablers that will allow those strategies to be achieved. Then thirdly, we had to show everybody how we are going to do this together, and get everybody to pull their bow strings back, aiming their arrives for those three core outcomes that we want to achieve.”

Aim your arrows

From cruising altitude, the concept seems like something everyone should agree with: Change a health care outfit from one that focuses primarily on treatment and healing to one that focuses on preventative medicine and lifestyle management, in an effort to reduce the treatment and healing that needs to occur.

But concept and practice are two different things, and to bridge the gap from the former to the latter, you need to build a compelling argument for why the change needs to happen, then package it in a way that relates to many different employees in many different disciplines, then roll it out in a manner that provides maximum coverage.

For a work force that had been highly successful under the old model, it’s not as easy as giving a speech and changing everyone’s mind.

“I had to paint a picture that showed where the new model would take us,” McFarland says. “I had to show everyone the new order of things and how it would be all about managing whole populations, whole communities and their health, and driving less emphasis on the hospital and the acute care setting. I had to show how if we want to be relevant and viable well into the future, it was necessary for us to partner with other caregivers in the community, partner with everyone from wellness and fitness centers to ambulatory care, diagnostics, recovery and rehab, outpatient rehab, inpatient rehab, long-term care facilities and the hospital setting. We had to be nimble in how we managed whole populations through the whole care process, not just the acute care side.”

Ambitious goals can help your team members draw a line from the present state of the organization to how everything will look, feel and operate once your vision is achieved. But it’s not enough to just tie your organizations future to a broad statement such as “We want to be the best in our industry.” You have to tie the organization’s future to the numbers. You have to be able to show your staff hard data that relates directly to the progress they’re making in relation to the goals you’ve set.

At Mission Hospital, McFarland held up cost per discharge as a key metric. He showed the hospital’s employees how lower the cost per discharge would have the long-term effect of helping to re-focus the hospital on preventative care.

“I communicated to our team that we are a great hospital and we make a lot of money,” McFarland says. “We are one of the top performing hospitals in the country. But we are able to do that because we operate in a very affluent area. Under this new model, where the focus is going to be on the continuum of care and population management, we are going to have to reduce our costs. We are just not going to get the reimbursement that we used to.”

With an average cost of $8,500 per discharge, McFarland set a goal of getting the hospital’s average cost per discharge down to $7,000. He and his leadership team utilized lean management practices and elements of Six Sigma to give employees a method by which to reach the goal.

“That’s huge, and we’re not going to get there simply by cutting a bunch of people,” he says. “We are going to look at our culture, we are going to look at our leadership, and if you are not on board, you are not part of the team. If you are not willing and you do not have the courage, this is not the place to be.”

Assess your staff

As part of assessing the organization’s capabilities, McFarland and his leadership team had to assess the capabilities of the staff, and as part of that, whether the skills sets of certain employees could transition into the new future of the organization, either in the employee’s current role or in another role.

“The skills that make you successful today might not be the skills that make you successful tomorrow,” McFarland says. “So there were some tough conversations in terms of who was going to be along for the ride and who would have the agility to adapt.”

McFarland knew he had to run a more efficient organization, and the people who performed functions in departments that the leadership team deemed inefficient would have to adapt to new or modified roles or, in some cases, depart the organization.

One of the most prominent cases of streamlining involved the departments who manage the hospital’s revenue cycle.

“Throughout the whole process of managing our revenue cycle — and you are talking about starting with the time of admission, patient registration, getting all of their information, discharging them, sending out a bill, collecting on that bill, writing them off and managing the whole medical record along the process — we have approximately 1,200 to 1,400 employees across our health system performing that work,” McFarland says. “Said another way, that is one in 20 employees across the system managing the revenue cycle. That’s one in 20 employees not providing bedside care and not helping the patient experience. We looked at that and asked how we could improve performance.”

With a goal of paring down the revenue cycle management to between 700 and 900 employees, McFarland and the CEOs of all St. Joseph health facilities brought their revenue cycle leadership together for a brainstorming session centered on discovering and implementing best practices. The CEOs used the improvement of the revenue cycle management as a jumping-off point for creating a system of what McFarland calls “value imperatives.” The imperatives are aimed at increasing efficiency in the organization and aligning the skill sets of employees to promote that efficiency.

“We put our revenue cycle leaders in a room for five days and said ‘If you had a blank canvas, how would you design this work?’ McFarland says. “We called that a value imperative, and set about creating a series of value imperatives. We did one around the clinical setting of our emergency rooms, how we can better take out waste, inefficiency and leverage evidence-based medicine. We also did that for how we treat stroke patients; we’re doing it for sepsis, our laboratories and our whole material management department.

“You have to take the process small pieces at a time, leverage the people who actually do the work and allow them to redesign the work, and as leaders, you have to get out of the way to ensure that they can do what is needed to affect those changes. To use the old expression about eating an elephant, you’re just trying to do it one bite at a time.”

How to reach: Mission Hospital, (949) 364-1400 or www.mission4health.com  

The McFarland file

Education: Bachelor’s degree from California State Polytechnic University, Pomona; MBA from the University of California, Irvine.

History: Chief financial officer at Mission Hospital 1998-2011; interim CEO May-November 2011: Installed as CEO on a permanent basis in November 2011.

What is the best business lesson you’ve learned?

When I was a young CPA in my first career, I was pretty naïve and green. One time, one of the partners at the firm I was working for pulled me aside and told me to never be afraid to make a decision. Many people in business are afraid of making decisions and struggle to pull the trigger. It’s not that you should be afraid of being the leader with a philosophy of “ready, shoot, aim,” but that you should be the leader who is always at the ready and aiming. If you are aiming and shoot, and you miss, admit it and be direct. If it wasn’t the right decision, admit it, don’t be afraid to show vulnerability, and allow yourself to drink in the collective wisdom of the people on your team. Use that wisdom to help you move forward. That advice has helped me on a number of occasions over the course of my career.

What is your definition of success?

It is so simple to talk about cash flow and operating margins. But what I believe is if at night I can put my head on the pillow and sleep well, that particular day I showed up, listened and brought energy. I brought my compassion, vision and ethics to the table. I let my yes mean yes and my no mean no. And if I reflect on my day and find things I didn’t do as well as I would have liked, I will aim to do better tomorrow. That will make each day a learning opportunity, and will help me continue to grow and develop as a leader.

Published in Orange County

The recession was going in the Dumpster.

No, not just figuratively — it was physically going to be thrown in the Dumpster.

On a windy day in the fall of 2009, Kim Yost, then the newly named CEO of Art Van Furniture Inc., carried a large sign bearing the word “recession” to a large waste disposal bin at the back of the main warehouse.

“I literally threw it in the Dumpster,” says Yost. “I then went back to the Dumpster several months later and threw the word ‘no’ into it.”

Yost did it because Art Van needed to get its momentum back. Like countless businesses across the country, the home furnishings retailer was sagging under the weight of the recession. Like countless businesses across southeast Michigan, Art Van’s problems were exacerbated by a local economy that wasn’t in great shape even before the recession. The faltering economy was compounding the crisis – acting as a refrigerator dropped on top the piano that Michigan businesses were already carrying on their backs.

When it is an arduous grind to merely slow the rate of damage, most business leaders are not just going to feel the result when looking at their balance sheets. They’re going to see it and hear it in the attitude of their employees.

Despite a decades-long reputation as one of the region’s and country’s leading home furnishings retailers, Art Van wasn’t immune to the recession’s effects, at the cash register, sales floor or the water cooler. It was up to Yost to make a series of bold moves to re-energize all 2,600 employees at Art Van, in spite of the economic environment in which the business was operating.

“We had to get the organization to go in a completely different direction,” Yost says. “The first thing we had to do was get our attitude completely to the point where we were no longer going to participate in the recession. I went out and publicly announced across the entire organization that the recession was over at Art Van, and we had to take our minds, our hearts and our business in a new direction.”

As Yost fashioned a new direction for Art Van, he kept one overarching belief in mind: small wins in the short term can generate big wins in the long term.

Seize the opportunity

Taking over as CEO in the October 2009, Yost was able to find a potential win simply by turning the page on his calendar. November means Thanksgiving, and Thanksgiving immediately precedes Black Friday and the Christmas shopping season.

“We immediately attacked the possibility of breaking an all-time company record for Black Friday sales in 2009,” Yost says.

Yost wanted to turn the Black Friday sales mark into a universal company goal. He wanted to create a companywide buzz around breaking the record. And, above all, he wanted his employees to leave the thunderclouds of the recession outside, bringing a sunny disposition inside the walls at every Art Van location.

“What we did were three things,” he says. “We started to act and perform as if the economy was terrific, as if we were back in the early 2000s. We developed our flier, our television campaign and the look of our stores to consistently resemble what we did in the early 2000s — say, the year 2001. From a marketing point of view, that was what we did when the economy was at its best.

“Second, we had a series of sales contests and sales promotions internally to encourage everybody to break the record. We were moving in a new direction, so we had to get that small win really early. The last thing we did was we created a game book. I have been playing sports since I was young, and I had a history in my professional career of creating game books that are unique. So we put together a Black Friday record-breaking game book for November 2009 and used that as our checklist.”

There were 32 steps the company needed to complete in order to break the record. Yost and his leadership team educated the work force on each step, what it would take to address each step and, in turn, break the sales record.

The methodical and comprehensive approach to staff motivation had the desired effect. Not only did Art Van’s associates focus on breaking the Black Friday sales record, they stepped up their game overall. Art Van broke the sales record, and the momentum from the campaign carried over to ensuing big-sale days.

“In November 2009, not only did we eclipse our company record, we did it again the day after Christmas, which is another very important sale date,” Yost says. “Then on New Year’s Day, which is another very big-event promotion for us, we broke another record. So by the time we had Black Friday, the day after Christmas and New Year’s Day, we were now creating momentum.”

After the rapid-fire success of the three sales events, the seeds for a long-term culture shift had been planted. It was up to Yost and his leadership team to feed and water the seeds until they started to sprout, then bloom, then bear fruit. Yost sent his team to all Art Van locations to recap the success of the campaign and illustrate a plan to sustain and increase the momentum moving forward.

“The leadership went out to all our stores and went through detailed discussions on how we were able to change the momentum,” Yost says. “We showed videos centered on inspiration and motivation, our tactics and strategies, we went over the success of the three promotions and what it took to do it. We literally spoke to every employee about what we were trying to accomplish.”

Write the book      

The information exchanged at the on-site meetings helped to produce the company’s first annual game book. The offspring of the game book used to launch the Black Friday sales campaign, Art Van’s first annual game book, “Clarity of Purpose,” took the motivational concepts used to spur the success of the sales campaign and extended it to motivate employees to accomplish the company’s goals for the whole year in 2010.

“In the three years that we have now been going in a different direction, we have produced three annual game books — one for 2010, one for 2011 and one for 2012,” Yost says. “Every single person in the organization was aligned behind the business plan. We re-enacted that same business plan for our 2011 game book, ‘The Next Level,’ and for 2012, which is called ‘Act Now.’ So we have made three separate roadmaps to success for each of the past three years.”

The game books for each year have been written by Art Van’s 16-member executive leadership team through a collaborative process. Each book outlines a series of specific initiatives that will receive the lion’s share of the company’s resources.

“We only have three resources that we can put into motion: time, money and effort,” Yost says. “Those key initiatives get all three of those resources for 12 months. We build on it, we communicate on it, we execute on it. But the focus has been that all 16 of us worked with collaboration to identify those key initiatives, and more importantly, to develop initiatives right throughout the organization, getting absolute alignment from stock room to board room, putting us all on the same path.”

Art Van has 2,600 direct employees, but once you factor in external support staff that also needs alignment on the vision and goals of the company — such as those who work for the company’s advertising agency, suppliers and key product providers — the number is closer to 3,000, according to Yost. That means the messages in Art Van’s annual game books have to reach a vast audience working at many different locations both inside and outside the company’s hierarchy.

“When you make the decision to park the recession in the Dumpster, as we did back in the fall of 2009, you make the decision to embark on a new course,” Yost says. “That means you have to get everybody marching alongside you. It takes a lot of heavy lifting, and a lot of triggering and communication, to get people to where they need to be.”

Yost and his team launched Art Van Television to help increase the profile of the company’s strategy. The in-house television network broadcasts in all Art Van locations, keeping employees updated on company events and promotions, and other information pertinent to the strategic direction of the company.

“We have over 100 50-inch flat-panel television screens all across our organization,” Yost says. “We are now able to broadcast all of our daily happenings to the organization in real time. Special events, activities, different promotions we are working on, the launch of our brand promise, which is a new program we just launched for our new brand initiative. All of that is communicated daily on AVTV. The screens are all throughout our corporate office, our distribution network and our 40 stores. All employees get exposed to it on a daily basis.”

Get interactive

Conveying your strategic plan and objectives comprises a large part of what it takes to point your company in a new direction. But it’s not the whole story. You need to give your employees a chance to have their say. If you don’t give your employees at all levels and locations a chance to voice their opinions and offer feedback, you can’t expect total engagement in the future direction of the organization.

When he began to fashion Art Van’s new direction in late 2009, Yost didn’t want to just physically prod his work force to sell more. He wanted to mentally stimulate them to think about how things could work better – how internal systems could improve, how new promotions could bring customers into the stores, how Yost and his leadership team could do their jobs more efficiently and effectively.

The answer for Yost wasn’t just about more sales and marketing muscle. It was about a better attitude and thousands of employees coming to work each day empowered to do their best work.

“If you’re going to aim your company in a new direction, you first need to capture the minds and hearts of your team,” he says. “That is why I literally needed to park the word ‘recession’ in the Dumpster. It was because we needed to change our vocabulary. We needed to get rid of words like ‘no’ and embrace change. And it’s all going to start with the leadership.”

As the leadership goes, so goes the rest of your company. You and your leadership team have to be the ones to set the example, develop the proper attitude, reach out to employees and keep the dialogue moving. If you don’t lead from the front, you can’t expect anyone else to step up and do it.

“We have a saying here that goes, ‘Speed of the leader, speed of the team, quality of the leader, quality of the team,’” Yost says. “We, here at Art Van and as leaders overall, get the team we deserve. As much as I’d like to give you the magic bullet that you can put to any business and it will miraculously start to improve, it is all about leadership. Every day, our leaders come to work inspired and motivated to take their teams to the next level.

“To have leadership that is motivated and inspired, you have to have them winning. When they are winning, it’s much easier to keep the momentum, and then you have to challenge them, every day, every week, every month. Another thing we say around here is ‘Winning isn’t everything, but wanting to is.’ There can be no complacency. You have to want to win every day.”

How to reach: Art Van Furniture Inc., (586) 939-0800 or www.artvan.com

The Yost file

Born: Red Deer, Alberta, Canada

Other projects: Yost is the author of “Pumptitude: Pump Up Your Attitude and Gain Altitude,” available at www.pumptitude.com.

Yost on managing growth: Speed wins, slow loses. But you have to have controlled and profitable growth, and each organization has a different ability to adapt. What I’ve found so terrific about our team is that this is a team of very fast and quick-adapting individuals. We have 91 leadership-level individuals, including sales managers and store managers. They enjoy the speed and the tempo.

But you can get to a point where you have to judge how much your team can absorb and execute to the degree of quality, and you have to pace yourself. This is a marathon, not a sprint. You do that by giving them achievable goals within short term ranges, and give them the ability to relish the success of that goal — maybe a bit of a breather — and then you get on to the next one.

If you are in dense enough forest, you have to give your team the ability to get a little bit of a clearing. They catch up, get organized and regroup, and make another little clearing. Then you let them catch up and regroup, and they hit the forest again, and so forth. So we have been very careful to watch our tempo and manage our speed, to manage out some of the things we have done to balance out the execution.

Yost on how the recession has changed the business world: I tend to refer to this recessionary time as the ‘brave new world.’ It is not going to go away even in the distant future, and we need to embrace the fact that it is here now and it exists, and so instead of going out of business, we need to go out for business. We have gained market share over the last three years consecutively, we have nine quarters of same-store sales increase, and nine quarters of consistent market share growth.

Published in Detroit

Just like software can have bugs, humans have bugs in the way we think and make decisions. As a result, many problems of businesses today are not the result of some outside factor, rather they are self-inflicted as a result of “mind bugs” — bugs in the critical internal processes that occur in the 5 inches between our ears.

The pervasiveness of mind bugs in business decisions is due to the fact that they are a product of human nature — hardwired and highly resistant to feedback. They can affect fact-gathering, analysis, insights, judgments, and decisions — and increase risk accordingly. The challenge is that the very mind bugs that are the source of the problem cause us to resist discovering them. Change the way we think? Our mind bugs tell us there is absolutely nothing wrong with the way we think. Here is a perfect example provided by Arthur Blank, co-founder of the highly successful Atlanta start-up The Home Depot, owner of the National Football League’s Atlanta Falcons, respected businessman and philanthropist.

“A lot of leaders, they listen, but they don’t really want to hear the results to the answers and when the answers come, they find a way to reinterpret them based on their original perspective of what they think the answers should be,” Blank says. “They might give you their honest opinion of what they think you’ve got to do to improve your business, but then you put it through your own filter and look at it through your own rose-colored glasses, and you choose not to see it that way. You say, ‘That’s not really what they meant. They meant some other things,’ and you just believe what you want to believe.”

Here are two mind bugs that are at the source of this problem.

Informed leader fallacy: A belief by a leader that he is better informed and has better instincts than others simply because he is the leader.

We deeply want to be led by people who know what they’re doing and who don’t have to think about it too much. So by the time we achieve a leadership position ourselves, we are good at making others feel positive in our judgment, even if there’s no strong basis. But the amount of success it takes for leaders to become overconfident isn’t terribly large. Some achieve a reputation for great successes when in fact all they have done is take chances that happened to work out. The fierce personal confidence and sense of infallibility that characterizes many leaders serves as a breeding ground for this mind bug. Most decision makers will trust their own intuitions because they think they see the situation clearly. Accordingly, it causes leaders to fall into a trap of believing they are better informed than they really are.

Closed mind: The inability to hold and examine two opposing views at the same time or to consider perspectives other than one’s own.

When we are afflicted with this mind bug we subconsciously shut down the very thing that can help us examine our own beliefs: mindful evaluation of diversity of thought. In essence, things are the way I see them because that is the way I see them. As perpetrators, we are sometimes not aware of doing this. Other times we may even be proud of it. We make the self-serving assumption that we have figured out the way things are and anything that challenges our point of view becomes “unthinkable.” It is not that we shoot the critics or fail to listen. To the contrary, we may spend time demonstrating our listening skills to others to prove we are good listeners, but afflicted as we are, we just don’t hear them. We simply are not aware that we don’t allow ourselves to hold and mindfully examine two opposing views at the same time. We give lots of lip service to others, but true diversity of thought is shut down. Once infected, we feel pretty good until the day of reckoning when we ask ourselves: “What was I thinking when I made that decision?”

Recovery requires courage

The solution to this problem requires courage — the courage to challenge our own thoughts. The real issue is that most of us do not notice our thoughts. We are out of touch with ourselves, and it can be debilitating. It’s like breathing carbon monoxide. You can’t see it or smell it, but it can harm you just the same.

Larry J. Bloom spent more than 30 years helping grow a small family business to more than $700 million in annual revenue. He is the author of “The Cure for Corporate Stupidity: Avoid the Mind Bugs that Cause Smart People to Make Bad Decisions” and the owner of a start-up media and software company that promotes better thinking. For more information, visit www.curecorporatestupidity.com.

Published in Atlanta