It’s a scary feeling when you see great opportunity for your business but have serious doubts about your ability to capitalize on it. That’s precisely the situation Jim Beck, CEO of Nature’s Best, found himself in more than a decade ago.
The distributor of vitamins and health and beauty aids had an outdated warehousing system designed for an industry that had completely changed. The health food craze was taking off in a big way and presented nearly limitless opportunities for Beck’s business to grow.
Instead of just vitamins, the company could now sell frozen foods, chilled products and other products desired by those seeking to lead a healthier lifestyle. The only problem for Beck was he didn’t have the means to move this new inventory. He had to make big changes fast if he had any chance of making it work.
The good news was that Beck had a great team eager to work with him through the many challenges that Nature’s Best faced as it set out to build a new business model.
“The guys that made it happen are all the guys who run the place,” Beck says. “The pride of ownership and pride of success that came out of it for those people was probably the most rewarding thing for me because they did it. That team worked so hard and dove so deep into the weeds of the details of the whole process. It was their baby.”
The pride Beck feels for his team is strong, but he deserves plenty of credit as well for taking the bold step to completely change the way Nature’s Best does business. He could have tried to make it work with the system he had and then demanded results that would have been nearly impossible to achieve.
He could have jumped in halfway and made a series of superficial changes that would have had the same effect on the effort to sell these new products.
Instead, he recognized that he needed a new system and that by creating a new system, he would provide opportunities to scale and to replicate the process in other parts of the country as his company grew.
The old saying, “Go big or go home” doesn’t always apply in business, but it’s hard to argue that it fits in this case. When you’ve got a captive audience, you need to do whatever it takes to give your team members the tools needed to do their jobs. Put yourself in their shoes and think about what they need.
It’s the part of the equation you can’t skip over when you ask people to step up on a big change for your business. When you show that you care and you get down on the floor and break a sweat trying to make it all work, you earn loyalty that can take your company a long way. ●
Mark Scott is Senior Associate Editor for Smart Business Orange County. Reach him at (440) 250-7016 or MScott@sbnonline.com
Eve Yen uses a mix of passion and humility to find new growth opportunities at Diamond Wipes InternationalWritten by Mark G Scott
When Eve Yen arrived in the United States 20 years ago from Taiwan, she wasn’t thinking about building a multimillion-dollar business, she just needed a way to support her family.
“I was bringing my daughter over here for the schools, for a better education,” says Yen, founder, owner and president of Diamond Wipes International Inc. “My thinking was if I could have one machine, I could make money to pay the rent.”
Building the business from a small restaurant wipe supplier to the largest consumer and industrial wet wipes manufacturer on the West Coast wasn’t easy, but Yen had her children to keep her motivated.
“I hired tutors to help them learn English,” Yen says. “Every night, I sat with them to do homework and tutoring. In the beginning, I had one machine and my dream was to sell 2,000 cases per month. Then I can support my family, and we can make some money. I never envisioned that we could be where we are today.”
The company now serves more than 2,000 clients in the food service, hospitality, health and beauty industries — producing 2,600 different kinds of wipes ranging from makeup removing to cleaning.
Yen is grateful for what her team has accomplished and is careful not to let herself or her people get carried away with the company’s success.
“There are a lot of companies that have been more successful than we are in different ways,” Yen says. “Some of them have bigger market share, higher volume in sales, higher margin on products or patents. We’re very proud of ourselves. But we’re also very humble. We do very down-to-earth, solid things every day. We don’t want to think we’re going to the moon on day one. We do it one step at a time.”
Eye on the future
Yen has gone through a series of transformations in her time leading Diamond Wipes. In the early days with her single machine, she was the company. Even as it started to grow, she needed to be selling her brand.
“In the early stages, we were very limited and had one or two items,” Yen says. “So we went out and educated the whole United States about what hot towels were. What is a hot towel? How can you use it? How could it benefit you? It’s persistence of introduction and education.”
These days, Yen is primarily focused on the big picture and what it will take to continue to grow her business. She has built a team of leaders and employees who can take care of many of the functions she once had to manage.
But no matter what stage you’re at with your business, early stage or established business, Yen says you always need to be thinking of new ways to sell your product or service.
“I’m a natural salesperson and entrepreneur,” Yen says. “I am focusing on what we will be doing in two years. Where will we be in two years? What does the company need? If I say we want to grow into a medical field and develop medical wipes or a similar product to compete in that industry, what do we need from people on the R&D side? Or do we want to get into a new brand in retail? Do we want to build a new brand?”
One of the keys to her success is the fact that as she’s thinking about the future, she’s bringing her employees into the discussion to get their feedback.
“If I see something new and very interesting, I will step in to look at it and then gather the team to talk to them together and develop an idea,” Yen says. “So I’ve evolved from a hands-on, frontline salesperson to a manager to a group leader. That’s where I see myself now.”
Know your key roles
Within the team concept, there are roles that should be prioritized in any organization. Yen sees sales, operations and finance as the three pillars of a profitable business model.
“If there are no sales, there is no company,” Yen says. “How do you grow a company without any sales? Everything you make, you have to sell it and the sale has to make a profit. It has to make sense; it has to be meaningful.”
An operations department needs to be focused on ensuring that everyone has the tools they need to succeed and is positioned to do their job for the business. And finance obviously keeps track of the money.
Once those pillars are in place, it’s all about the customer.
“Your job is to help customers solve problems,” Yen says. “Your job is to help them create profit. If you can help your customer generate more profit, then your customer will like you. If you can help them solve problems, you’ll earn yourself their business.”
Mission and vision are big buzzwords in the corporate world these days and they are important to Yen too. But they have to be more than words.
“It’s what we believe every day,” Yen says. “When we talk about this, we don’t put it in a statement and put it on the wall. We actually talk every day. I have one-on-one meetings with key people, but also key people under them. I want to make sure they understand what we’re doing.” ●
How to reach: Diamond Wipes International Inc., (909) 230-9888 or www.diamondwipes.com
Lean more about Diamond Wipes on Twitter at @DiamondWipes
The word “love” is not often used in business, but at Silverado, it’s a word we use every day. In fact, it’s a central part of our core operating philosophy.
It’s fitting that a company dedicated to enriching the human spirit would echo a loving and caring outlook, but we take that even one step further. For us, love is an actionable idea — one that we characterize with the phrase, “Love is greater than fear.” And we’ve found that this mantra has made a positive impact across the business.
It’s such a powerful concept that I get mixed reactions when I share it with people, but it has truly enhanced what was already a strong Silverado culture. We adopted the philosophy in 2005, based on principles that struck me during a retreat. What I learned from that trip was so profound that I knew it could be used as a guide to further both personal and professional success.
I realized during the trip that there is only one way to know the right thing to do — it’s by making choices and acting on the greatest positive emotion: love. There’s something silly about asking our staff to “do the right thing.”
What criterion is being used to determine it? If we ask our associates to serve residents, clients, patients, families and co-workers from the standpoint of love, the reason becomes very clear.
Change is not easy
Our associates greeted the rollout of this concept with a combination of skepticism and excitement. Associates who worked most directly with residents, patients and clients immediately understood it, expressing that they live it every day.
It inspired associates to strengthen relationships inside and outside the workplace. It created fresh energy and momentum as a point of organizational pride. It also helped us build trust.
I’ve always believed that solid business ethics are critical to building trust. Our associates have been more successful by acting from love rather than fear. No one is perfect in this endeavor and it is important for our associates to see top management — beginning with me — strive to achieve this goal. When you fall short on a goal, you have to have the courage to admit that you were wrong.
Build a foundation
That strength in our culture is what ultimately enables us to attract and retain high-level talent that provides world-class service and life-changing care. It all leads to economic success — rewards that stem from the service that a dedicated and committed team provides.
When people see Silverado’s tagline, “Lives Enriched,” we want them to know that it’s more than just a tagline to us. It’s a phrase we developed as a result of a love-centric culture. By improving the lives of everyone that your organization touches, you should be able to say the same thing no matter what business you’re in. ●
Name: Loren Shook
Title: President and CEO
Silverado is a leading provider of services for the memory impaired through its six At Home Care offices, 33 Memory Care Communities and 10 hospice offices located in eight states.
How to reach: Silverado, (888) 328-5400 or www.silveradocare.com
Learn more about Silverado at:
Laura Neubauer: Why good results can be had when you find opportunities to work with your competitionWritten by Laura Neubauer
Marketing seems to be a weakness of most business owners. We are great at our core business, but when faced with a myriad of marketing options in today’s digital world, it’s often easier to do nothing at all.
Marketing needs vary based on the point you are at in your business cycle. In the early stages of my company, I needed to grow, but didn’t have the funds or resources to do much marketing.
But the techniques I put in place were so successful that I continue to use and share these methods today.
Here are a few seeds you can plant for your business:
What else can I do for you? With this question, everyone wins. Asking builds strong client relationships because it gives clients the opportunity to share new ideas that you can expand upon.
You get exponential growth from a single idea, and if widely accepted, the solution becomes part of your standard offering. The client who was the catalyst for the solution takes pride in having been part of a solution that is monetized, and thus the relationship is further strengthened.
I even ask clients for input on my internal company projects — like a new website. The customer feels like they have helped you build your company and that builds customer loyalty and retention. It’s hard to fire a vendor when they’ve helped you build your business.
Keep your competition close
Find someone in your market who is doing similar work, but focuses on slices of your business that are outside your specialty. Discuss ways that they can refer potential clients to you for your specialty and reciprocate by referring possible clients in need of their specialty.
Creating this partnership has two benefits. First, both you and your competitor now have a new product you can offer to clients and you both benefit from increased sales.
Second, you both protect your own customer base by being the source of the referral to your respective clients rather than having your clients cold-called by your competition. A strong alliance with your competitor will usually make them think twice before soliciting your customers.
Philanthropy and volunteer work
In addition to volunteering for organizations based on my personal values and passions, I learned what some of my customers were passionate about, and, if our values aligned, I joined organizations they recommended.
If you are genuine to the cause, the mutual respect between you and your like-minded customers can be invaluable. You’ll meet other business owners with whom you can form alliances and partnerships, as well as plenty of potential clients. The introductions that are made and the testimonials that are given are endless.
So the art of farming your relationships and attracting new customers rather than hunting them will not only generate revenue growth, but will also produce a more stable and protected client base that you can continue to build upon into the future. ●
Name: Laura Neubauer
Company: National Association of Women Business Owners - Orange County
Laura is a native of Orange County and the founder of 4 Every Athletes Dream, a nonprofit that supports young athletes in competitive sports.
Reach her at (714) 630-2983 or www.nawbo-oc.org
Learn more about NAWBO-OC at:
We’ve all heard stories — many of which have taken on legendary proportions — about extraordinary service provided by the likes of Nordstrom, Disney and Ritz-Carlton employees. The luxury retail and hospitality industries have elevated customer service expectations in every business category, from fast food to financial, and yes, even pediatric hospital services.
The difference is that at the Children’s Hospital of Orange County, nothing less than children’s lives are at stake, and it’s our honor, privilege and sacred obligation to serve.
The prospect of entering a children’s hospital can be terrifying. A parent’s most precious gift, his or her child, is seriously ill or injured, and the accompanying fear, anxiety and confusion produce a unique and urgent challenge to create an exceptional and memorable experience.
Every clinician and member of our support staff — from accounting to imaging — must be not only technically competent, but also wholeheartedly dedicated to our purpose and passion. Therefore, we make sure our people are aligned and ready to excel in customer service.
Here are a few standards that transcend pediatric health care and would be of great value to any business that takes the time to consider them.
Hire for fit, especially during times of fast growth
Last year, we opened a seven-story patient care tower and expanded our employee base by 20 percent to staff new services. I lost some sleep wondering if newcomers would dilute our culture of compassion, developed over years of employee longevity and institutional memory.
I’m gratified that our new hires truly exemplify the attitudes and behaviors of “CHOC people,” a direct result of our rigorous, highly selective recruitment that tests for skill and alignment with our mission and values.
Train for and reinforce expected behaviors
New and veteran employees alike annually renew their commitment to a set of standard behaviors that we call iCARE principles. Performance evaluations include measurement of alignment to these principles, which reinforce the personal role we each play in delivering our mission.
Lead by example
We hold quarterly, daylong excellence summits to develop leadership and train on customer service tools we expect leaders to utilize throughout the organization. The curriculum always includes “mission moments” which feature inspiring examples of extraordinary service to our patients. The power of these stories cannot be underestimated; they are repeated throughout our organization and externally to community members and donors.
Take feedback to heart
We value the feedback of our families, and we share comments — both positive and negative — with our employees, including this one from a recent survey: “The quality of care we received at CHOC could best be described as life changing. It was so impactful, my little boy begged me to never take him anywhere but there again.”
A mother’s two sentences immediately reconnect us to our purpose and make us strive to provide an even better experience the next time he comes to CHOC. ●
Name: Kimberly C. Cripe
Title: President and CEO
Company: CHOC Children’s
Children’s Hospital of Orange County has been consistently ranked as one of the top pediatric hospitals in the nation.
Learn more about it at (714) 997-3000 or www.choc.org
Working capital. Every business needs it, but at what cost? One path to obtaining affordable working capital is through factoring, a simple and easy concept to understand. Factoring companies provide businesses with working capital by purchasing their client’s outstanding receivables.
Typically, a factoring transaction is an arrangement between three parties (client, factor and vendor) all of which are businesses. The business owner understands his or her profit margins and the expense associated with factoring while the factor evaluates the risk.
In most cases, the increase in cash flow will not only justify the cost, but actually lower operating margins by increasing sales for the business.
Why is factoring so popular now?
It comes down to qualifying for the capital. Banks make decisions based on business financial history, cash flow and collateral. Factoring decisions are largely based on the creditworthiness of the client’s customer. Factors, however, do perform extensive due diligence on the client as well.
Often, potential factoring clients fit into the category of small to midsized businesses that are in a growth mode, but do not qualify for a traditional bank loan. Usually the client has been in business for an insufficient amount of time or does not have enough collateral to secure a loan. In other cases, some factoring clients will qualify for a loan, but find that the amount is not sufficient to meet their cash flow needs.
Firms that can help clients grow to the point where they can raise additional capital fulfill a much-needed void.
Most factoring companies utilize some type of specialized factoring software that allows clients to track the aging of their outstanding invoices, accrued fees, receipts and so forth. Most factoring software applications allow the client to run a myriad of accounting and financial reports to complement their accounting practices. By creating a transparent environment between the client and factor, it allows both parties to be on the same page and be proactive with account debtors.
Invoice factoring relies heavily on credit evaluations of both the client and customer. Once the client has passed the appropriate credit checks, they should also be informed about the creditworthiness of their customers.
Before we begin factoring any of our client’s customers, we always perform a thorough credit analysis. If one of our client’s customers has been declined for our factoring services, our client usually follows our lead and will not do business with them.
Think about that benefit. A strong factoring company will provide you with a full credit analysis from an underwriting team to assist you in making important decisions about potential customers. Partnering with the right factoring company can provide huge added benefits for any business looking to get to the next level.
Remember, it’s not just about the money. ●
Name: Don D’Ambrosio
Title: President and CEO
Company: Oxygen Funding Inc. is an invoice factoring company located in Lake Forest, Calif., that works with clients to improve their cash flow.
Despite their vital role in the global economy, entrepreneurs are often misunderstood.
“By developing new businesses, they create jobs, increase economic activity and drive innovation,” explains Maria T. Pinelli, global vice chair, Strategic Growth Markets, EY.
Yet, she says, decades of academic research into the topic have produced no universal definition of entrepreneurship, and no agreement about the precise traits and behaviors that characterize entrepreneurial leaders.
As founders of the EY World Entrepreneur Of The Year™ program, the world’s most prestigious business award for entrepreneurs, EY undertook its own research to unlock the entrepreneurial DNA.
“Although entrepreneurs operate across a highly diverse range of sectors and regions of the world, we have found they share a number of common behaviors and characteristics,” Pinelli says.
EY’s research included a survey of 685 entrepreneurs and in-depth interviews with winners of the Entrepreneur Of The Year™ Awards. Here are the key findings from the report:
Entrepreneurial leaders are made, not born.
Although many entrepreneurs start at a reasonably young age, the experience they gain through education and time spent in a more traditional corporate environment is vital to their success. More than half the respondents described themselves as “transitioned” entrepreneurs — meaning they previously spent time in traditional employment before setting out on their own.
Entrepreneurship is rarely a one-off decision.
The majority of respondents consider themselves “serial entrepreneurs,” having launched at least two companies. Entrepreneurial leaders who embark on more than one venture gain valuable insight and lessons into how to make a new business successful. They learn from mistakes made and use that experience to create more companies.
Funding, people and know-how are the biggest barriers to entrepreneurial success.
Among the six out of 10 respondents who experienced obstacles in their ventures, the most common barrier is lack of funding or finance. Despite the gradual easing of credit conditions in most countries, access to financing remains a top issue. The two other most-cited obstacles are people and expertise.
Entrepreneurs share common traits.
Entrepreneurs typically exhibit a strong locus of control — a belief that events result directly from an individual’s own actions or behavior. This is complemented by a mindset that sees opportunity where others see disruption, along with an acceptance of calculated risk and a tolerance of failure.
Traditional companies can learn from entrepreneurial leaders.
Employee incentives and fostering innovation are good places to start. It is no coincidence that fast-growing entrepreneurial companies tend to place larger amounts of share ownership in the hands of employees.
For more information, or to read the entire report, visit www.ey.com.
What was the make-up of the people interviewed for this extensive survey?
- 685 entrepreneurial leaders.
- More than 30 countries and 25 industry sectors represented.
- Majority of companies have revenues between $10 million and $20 billion.
- 58 percent of the respondents achieved annual revenue growth in excess of 20 percent in the previous year.
Who are some of the entrepreneurs who participated in the study?
- Howard Schultz, chairman, president and CEO of Starbucks, the world’s most famous coffeehouse company.
- Wally Fry, co-founder of Fry Group Foods, manufacturers of a range of vegan products.
- Ronald J. Kruszewski, chairman and CEO of Stifel Financial Corp., a full-service regional brokerage and investment banking firm.
- Denys C. Shortt, chairman and CEO of DCS Europe plc, the UK’s leading distributor of health and beauty brands.
- Khudusela Pitje, co-founder and executive director of New Gx Capital, a South African infrastructure advisory and funding company.
- Yuliasiane Sulistiyawati, President Director PT Pazia Pillar Mercycom, a chain of one-stop IT shops based in Indonesia.
Alan J. Fuerstman asked a lot of his team during the recession and got back even more at Montage Hotels & ResortsWritten by Mark G Scott
It seemed as if Alan J. Fuerstman could not have picked a worse time to open two new hotels.
In late 2008, the economy was in free fall as the global recession took hold. Leaders everywhere found themselves scrambling to see how deeply they would have to cut their expenses. And in the midst of all that tumult, Fuerstman prepared to open a new property in Beverly Hills, Calif., for Montage Hotels & Resorts.
“My concern was we’d be opening a hotel in a market in Beverly Hills that had been traditionally running occupancies in our luxury sphere in the low 80s,” Fuerstman says, meaning that hotels were typically in the 80 percent range in terms of occupancy.
“That was the average occupancy of the competitive set we were looking at. The year we opened, the occupancy dropped collectively in that set to below 50 percent. So the challenge was the business traveler wasn’t traveling. It was a dramatic reduction in travel until the economy picked up a little bit.”
Plans were also in the works to open Deer Valley, a new hotel in Park City, Utah, in 2010. Scrapping or postponing plans for these new hotels was not an option, but Fuerstman also knew that he couldn’t just ignore what was happening around him.
“The real challenge for us was to create and deliver luxury experiences, yet still maintain our vision and commitment to quality,” says Fuerstman, the company’s founder and CEO. “We had to deliver on the brand promise, but we still had to be financially viable. It really forced us to operate as a team and to get creative in finding ways to stay true to our vision and our commitment and still weather the economic storm.”
Fuerstman was confident he could make it all work. His job was to get his team, which now totals 2,500 employees, to believe the same thing.
“At the end of the day, the organization looks to the CEO and the leadership to have confidence,” Fuerstman says. “That confidence in charting the direction of the company is extremely important.”
Be clear about your plan
Fuerstman began his mission to get Beverly Hills and Deer Valley up and running successfully by being candid with his team about the challenges they faced.
“They don’t want to hear sugarcoating,” Fuerstman says. “If there is a tightening of the belt or if there are certain things that have to change for the success of the overall organization, you have to deal with those things head on. In a difficult time period, the team really appreciates open and honest communication.
“Fear of the unknown is the greatest stress for our associates. I thought it was very important that we involve all levels of the company in the problem-solving and framing of the future and what success could look like.”
One move that was on the table for Montage was to slash prices to get people in the door.
“What we had to avoid was heavily discounting and repositioning where our product stood,” Fuerstman says. “But we still needed to offer a greater value because of the economic downturn to our customers. So we turned to creating more packages and doing some more value-adds that we maybe hadn’t done in the past, but that now became part of our strategy.”
Certainly, some companies in times of recession choose to drastically cut their prices thinking that something is better than nothing. Fuerstman did not believe in this approach and felt doing so would be a disservice to what customers had come to expect from the Montage brand.
The new value options were part of the plan, but the continued commitment to exemplary service at every level was going to be just as important going forward.
“It’s important that companies take the time to map out and create the kind of infrastructure needed to deliver the outcome they are looking for,” Fuerstman says. “Some of the less glamorous parts, whether it’s opening a hotel or the opening of any business — they cannot be neglected. We cannot deliver the level of service we want to unless every aspect of the organization is pulling together to create that environment and experience we seek.”
Provide the tools to succeed
One of the first areas to get cut when the economy turns downward is often employee training, and that’s a big mistake.
“You cannot expect extraordinary results unless you’re investing in the people who will be delivering those results for you,” Fuerstman says. “Leadership needs to invest appropriately and generously in the development of their teams. Quite often, organizations make the mistake of spending less on training and spending and less on the types of things that have a long-term impact on the delivery of your product or guest satisfaction.
“We have a tremendous commitment to our training and ongoing education that starts before any associate has contact with our guest. It continues through all levels of our organization and that commitment to training and learning is never-ending.”
Having a person who is responsible and accountable to make sure employees are constantly learning is a good way to ensure the success of such an effort. The person who heads up this effort at Montage is Derra Lee Edwards, the company’s corporate director of learning.
Since Fuerstman founded Montage in 2002, he has sought to change the way people think of luxury.
“We were looking for a more comfortable luxury and a more gracious and personable style of service that was unscripted, yet highly focused on personalization for each guest experience,” Fuerstman says. “That vision led us to creating a curriculum around that.”
One of the cornerstones of customer service at Montage is employee empowerment. Fuerstman doesn’t want employees thinking about rules or polices when a customer has a problem. He wants them thinking about what the best solution would be to help that customer.
“Empowerment focuses on your ability to properly train so that the empowered associate can respond in a way that is consistent with the brand,” Fuerstman says. “One of the biggest inhibitors to empowerment is when managers and leaders overreact to associates who are trying to act in an empowered way.”
Employees have a responsibility to know your brand and your values when responding to customer concerns or questions. But you have a responsibility to not fly off the handle if they think on their feet in a way that is different than how you would have handled the situation.
“If you overreact in such a way, you’ll put the fear in your associates so that they will stop making the kind of decisions independently that you wish they were making for the betterment of the hotel or resort,” Fuerstman says. “So we look internally. When empowerment is not working, we look at ‘What are we doing wrong from the training and educating perspective that leaves our associates uncomfortable acting empowered?’ Often, we need to be self-critical.”
It all comes back to the idea that you’re part of a team, and you need to make sure you’re doing your part as the leader just as much as you expect your employees to do the same.
“If the empowerment isn’t where you’d like it to be in your organization, you either haven’t trained properly for it or you made the cardinal mistake of overreacting when an empowered associate does something different than you would like them to do,” Fuerstman says.
“That doesn’t mean we’re accepting and understanding of the same mistakes made over and over again. But it’s an important distinction. If you want an empowered environment, you need to look internally.”
Look past your ego
Fuerstman admits it took time for him to become better at being a truly empowering leader. But he quickly realized that he didn’t want to be a hindrance to the growth of his business.
“Leaders need to recruit the best and brightest talent around them,” Fuerstman says. “If someone in my organization can do something as well or better than I can, I should be the last guy doing it. I should focus on opportunities where I add the most value. That works throughout the organization. Avoid the tendency to cling to things you like to do if it can be done as well or better by somebody else. It frees you up to accomplish more.”
And in the case of Montage, it freed Fuerstman to help make Beverly Hills, Deer Valley and all his properties great success stories in the tough economy.
“Our team did a remarkable job of responding to the fact that it wasn’t business as usual and we needed to operate in a different type of environment,” Fuerstman says. “Some of those lessons learned in that time period have helped us as we’ve come out of it and prospered.”
Fuerstman is confident the future will be just as bright, in large part because of everyone’s willingness to learn from others and work as a team.
“It’s so important that we unlock our team’s best thinking and that’s a huge responsibility for us as leaders,” Fuerstman says. “The best leaders know how to nurture that and create an environment where the organization is forthcoming and freely engaged to help make our company as strong as possible.” ●
- Be loyal to your brand.
- Make continuous education a priority.
- Don’t be a bottleneck to growth.
The Fuerstman File
Name: Alan J. Fuerstman
Title: Founder and CEO
Company: Montage Hotels & Resorts
Born: Passaic, N.J.
Education: Attended Gettysburg College, Gettysburg, Pa., and received a bachelor’s degree in political science.
Why did you choose political science as a major? I was very interested in political science and thought I wanted to be a lawyer. I started working in hotels my senior year of high school and got a part-time job as a doorman and worked as a bellman every summer when I was in college. When I graduated college, I thought I’d take a year off before pursuing graduate school.
I happened to come out west and had the opportunity to open a resort as a bell captain of a hotel. I fell in love with the business and decided I really wanted to passionately pursue that as a career and I’ve never looked back.
Is there one thing that stands out to you about the hospitality business? I love that we have the opportunity to enrich lives. Whether it’s the guests staying with us, our associates, the communities we serve or the investors that choose to invest with us, we have tremendous opportunity and responsibility. It’s exciting to engage in that every day.
Who has been the biggest influence on your life? My parents. They shaped my thinking in so many ways, and they’ve had a tremendous influence on who I am today.
If you could speak with anyone from the present or past, with whom would you want to speak with? Leonardo da Vinci. To be such a visionary and ahead of his time, so forward thinking and artistic. The blend of that is incredibly interesting.
Learn more about Montage Hotels & Resorts at:
How to reach: Montage Hotels & Resorts, (866) 551-8244 or www.montagehotels.com
This analysis can be done before the end of the year — there’s no need to wait for final numbers. Another area management and auditors can tackle prior to year-end revolves around onetime items, such as acquisitions.
This will avoid surprises at audit time. In addition to ongoing regular meetings, management and the auditors should hold planning meetings when there are significant events, such as an acquisition. U.S. Generally Accepted Accounting Principles requires that the assets purchased and liabilities assumed during an acquisition be recorded at fair value at the time of the transaction.
For software-as-a-service companies, which tend to have large deferred revenue balances, the fair value of deferred revenue tends to be quite lower than the book value. Management needs to be aware of that fact when forecasting revenues and setting covenants. Management often relies on the amortization of the ‘book value’ deferred revenue when forecasting or setting covenants, which is wrong and can have costly consequences.
Public companies have regulatory deadlines, and many private companies need to meet deadlines set by banks or investors. Failing to meet these deadlines could have dire consequences, such as delisting or impact on stock value for public companies, and lack of access to funds for private companies. If good preventive and detective controls are in place, it shouldn’t take a long time to prepare for an audit.
For example, account reconciliations should be done monthly, with one person preparing them and another reviewing them. If this is done, part of the year-end audit package is already complete. Part of the internal review for the audit should also be ensuring that documents are tied to the general ledger. A lot of this goes back to putting the right internal controls in place — not because of the year-end audit but because it’s good practice and helps both operationally and financially. ●
“When we began our research, I didn’t know what to expect because no study had been done from the business owner’s perspective, only from the consumer’s,” Schiele says. “I half expected to find that businesspeople were thinking along the same lines. It was surprising to see that review sites were way down the list — just 20 percent of businesses surveyed were monitoring customer satisfaction via these sites.”
Our study is the first to consider business as a whole, looking at review sites like Yelp, Angie’s List, Google, Yahoo and others. Aside from childcare and pet care, we addressed virtually every industry. We found that marketing services, health care, manufacturing, financial services and real estate are best at dealing with review sites.
Why don’t more businesses take reviews seriously?
The biggest barrier is time. Dealing with day-to-day issues, they don’t have the energy or resources to monitor sites. And some owners prefer not to read negative things. Still, a business can grow, improve and solve problems by looking at criticism, taking it to heart and making changes.
More companies are mitigating fallout by using services like ReviewInc, which analyzes qualitative data and presents it in dashboard form. The business can see at a glance what people are saying.
Suppose a company is on top of the consumer review data. What then?
Companies that engage with people fare best. If a consumer posts, ‘We stayed at that hotel. The plumbing was bad,’ and the hotel explains how it corrected the problem and adds, ‘Next time you stay at our hotel, we’ll give you a free breakfast,’ that’s a win. But it’s not only about that future promise.
Where do reviews fit in, in a macro sense?
The old model was strictly one-way. Companies told the consumer what they had and that was it. Eventually, it became a two-way conversation where consumers could talk directly to the company. Now we’re seeing three-way communication, with consumers talking to other consumers. Businesses that participate can help foster customer loyalty.
And while it’s beneficial to get positive reviews, it’s even more important to get lots of reviews, period.
So, what’s the biggest takeaway?
Sites like Yelp have turned the tables. The power is in the hands of consumers. It’s important that you aren’t passive. Since you can’t change the platform, how do you change your business to take advantage of a new opportunity to communicate? Understand it and then use it. Use it as a market research tool, which is cheaper than surveys and focus groups.
It’s also more authentic since these reflect actual behaviors, not just intentions. Use it as a customer relationship management tool. Then, armed with this information, make strategic decisions to help grow your business. ●