Thinkers solve problems.
Mark Zuckerberg found a better way to connect people with friends and family through Facebook. Larry Page and Sergey Brin invented a better way to search the Internet by creating Google. Steve Jobs showed us a better way to obtain and listen to music through the invention of the iPod.
None of these examples happened by luck. Each of these great thinkers spent a lot of time working to perfect their ideas. Great thinkers are not born, they are made.
To create great products and services, you have to develop the habit of expanding your thought processes and critical thinking skills. Why? Because the human mind tends to be lazy. It tends to repeat the same thoughts unless it’s trained to explore new ideas. Great thinkers put in the effort to analyze things in new ways and not accept the norm.
We live in a negative society where bad news trumps good news and the potential downsides of an idea outshine the potential rewards. It takes a lot of effort to retrain our minds to focus on the positives and the solutions rather than the ramifications of a failed idea.
Becoming a great thinker requires an investment of time; there are no shortcuts. You have to be organized and plan for it. Take time to think about the problems unique to your business or industry. Work through the pros and cons of any idea, looking for a way to make it work. Study competing companies and leaders and gain an understanding of how they think. It’s also helpful if you always do your heavy thinking in the same location, and it doesn’t have to be anything fancy. Some people do their best thinking in the shower or over a cup of coffee at a cafe.
But there is one major pitfall to avoid: Don’t equate change with new thinking. Just because you are changing something does not mean you are being a creative thinker. There might be several “accepted” ways of doing something within your industry, and changing from one of the accepted ways to the other isn’t doing anything different. The goal is to identify new ways of thinking and as a result, find a new solution to a problem that no one has thought of before.
Finding these unique solutions won’t be easy, but success never is.
When Parsa Rohani saw a wavering commitment to mission and vision at Neudesic LLC, he knew it was time to regroupWritten by Mark G Scott
When Parsa Rohani left Microsoft in 2000 to start his own business as a technology partner to Microsoft, he had some clear goals in mind of what he wanted to build.
Rohani saw opportunity in the advent of the Microsoft.net platform and joining with co-founders Tim Marshall and Anthony Ferry, he set out to build a company that could capitalize on it.
Neudesic LLC was soon a success, becoming profitable in 2004. But as the company began to really take off and grow — with more customers, more employees and more locations — the focus began to drift. Neudesic has about 550 employees overall, with 390 in the United States and 160 in India.
“I was talking to my partners and even though we knew what our values were and we had an idea of what our vision and mission for the company was, maybe that vision and mission was not shared across our offices,” Rohani says.
“Although we are headquartered in Irvine, we have offices across the country. One of the things we felt was lacking was our value proposition and our mission. The idea of who we were as a company was getting diluted the further you went away from Irvine.”
Neudesic was still achieving profitability when many companies were scrambling as the global recession of 2008 hit, but it wasn’t growing as quickly. Rohani realized that if he wanted the growth to continue, he and his employees would have to take a few steps back and get refocused on what it was all about.
“The things you do when you’re a five-man company versus a 500-person company, there are some similarities,” Rohani says. “But there are also some significant differences in terms of how you operate the business, what you look for and how you train and educate your people. Fundamentally, it starts with you as the leader.”
In other words, your employees are probably not going to come to you and say, ‘Hey, we’ve lost sight of our values. We need to do something about it.’
“You are the first one who needs to change,” Rohani says. “If you don’t change and you expect everybody who works for you or reports to you to adjust to the new realities of business, then it’s going to be an utter failure.”
Seeking to avoid that fate, Rohani decided it was time that he and a group of his leaders get away and get refocused on the company’s core principles.
Do the groundwork
It’s easy to talk about getting away from the day-to-day routine of your business to talk about big-picture issues. The key to making it work is to have a plan for what to do when you get away.
“You have to have a purpose for what you’re doing and you have to work to engage the leadership of the company,” Rohani says. “Not just a few, but you have to engage a pretty good cross-section of your company to be part of it and understand why you’re doing it so it doesn’t just seem like busy work. It is the purpose of the company.
“If you don’t have the time to do it, in my view, over time you’ll become irrelevant. If you’re always tactical and you never take the time to look at the strategic value of your company, then it’s only a matter of time before you’ll be irrelevant.”
In 2010, which is when this process began, Neudesic had about 300 employees. So Rohani wanted to build a team of about 20 employees to take part in this off-site workshop to refocus the company’s mission, vision and values.
“What you want first and foremost is people who are passionate,” Rohani says. “Who are your most passionate people about a particular topic or about your business? Another group of people I would strongly consider are the ones that are most interactive about how to make the systems or the company better. People who are always OK with everything that you do may not be the best choice to figure out how to prepare your company for change.”
Once the team is chosen, your job quickly shifts back to purpose. You can’t wait until you get to the off-site meeting to start discussing the key points.
“About 60 days before the off-site, we started a collaboration effort across the company with these 21 people,” Rohani says. “We put in a variety of topics to be discussed and we did a lot of pre-work remotely, as time allowed, to prepare us for the off-site.”
Challenge your people
As the discussion began at the off-site meeting about what values were most important to Neudesic and how those values fit into the company’s mission and vision, Rohani was full of questions.
“My role was to facilitate and ask questions and challenge people on their ideas and thoughts,” Rohani says. “I did not propose a set of values and say, ‘OK, these are the 10 values I think are important. Let’s vote.’ I was an active participant.
“When you ask people the right questions, people who are passionate and smart, they tend to find the right answers. When you help them find the right answers, they own the whole thing instead of if you gave them the answer. Then you own it and it’s not theirs.”
The 21 people who were part of the off-site meeting were divided into teams, and each group was given the task of choosing five values on its own. With more than 20 possibilities, the list was eventually whittled down to five: passion, discipline, innovation, teamwork and integrity.
“So you take the first letter of each of our values and it’s PDITI,” Rohani says. “We looked at it and said, ‘If you’ve got these five, what else do you need?’ At the end of the day, there was consensus that all 20 some odd values that had been presented by the teams were represented by these five.
“Quality was one of the values that was out there. If you’re passionate, disciplined and you work in teams and you have innovation, quality is part of that. So do you call it out separately on its own? You can’t have quality without discipline.”
It was a smooth process for Neudesic, but there was some give and take to arrive at the final five values. That’s good. You should be concerned if you get people together and don’t have a little conflict in the process.
“If people aren’t engaged and challenging and asking the questions, they are basically conformists,” Rohani says. “They are not telling you everything that is in their head. Either you have a problem as a leader engaging these folks or you have the wrong people. The first thing you look at is yourself. Are you providing the right forum? Are you encouraging the kind of participation that is needed?
“An organization is composed of many individuals. Those individuals collectively are smarter than any one leader. If as a leader, you fail to cultivate the collective wisdom that is in your organization, that’s your fault.”
Building on the momentum
With five core values in hand, the Neudesic team returned from its off-site meeting excited about its regained focus.
“Even though we’re a technology business, everyone needs to be focused on the fact that it’s not about technology,” Rohani says. “It’s about business. It’s about innovating for our clients using technology, but not using it for the sake of technology. That’s been key in almost every initiative that we’ve taken since then. We were too focused on technology, and now our focus isn’t just technology, but the ultimate value it delivers to the business.”
So what’s the key to maintaining the momentum that everybody feels coming out of a workshop? Rohani says the key is developing a series of objectives that can help guide everyone going forward.
“You have to define the short, medium and long-term objectives that you have,” Rohani says. “Around each objective, you need to establish a rhythm. What happens a lot of times, and it happens to us too, is sometimes you say, ‘Hey, this is a great idea. Let’s do it.’ Then you don’t establish a rhythm. You don’t rally around it and measure the progress for it in a rhythmic, regular fashion. So it just becomes another thing you tried that never worked out.”
The objectives laid out a formula and provided the rhythm to keep things moving.
It’s not always an easy thing to do to stop and reflect on things like values, mission and vision. But those leaders who think their time is better spent on other things, or that their business is going well already and doesn’t need to look at such things, ignore these components at their own peril.
“I read a quote from Jack Welch a long time ago,” Rohani says. “He said, ‘Change before you have to.’ So it goes back to the biggest challenge for a business, which for me is managing change. Not responding to change, but managing it. Changing before you have to.”
How to reach: Neudesic LLC, (800) 805-1805 or www.neudesic.com
The Rohani File
Name: Parsa Rohani
Title: Co-founder and CEO
Company: Neudesic LLC
Born: Montgomery, Ala.
Education: Electrical engineering degree, University of Southern California.
What was your first job and what did it teach you? I was a sales clerk at a department store called Bullock’s, which eventually got bought by Macy’s. It helped teach me that you need to value your people because they certainly didn’t value their sales clerks. I was still going to school, so it was a part-time job, but I worked hard. The register recorded how much you sold per hour, and I was the top guy. I sold more per hour than anyone else. Six months after I started, I went in to ask for a raise, and they raised me from $3.80 to $3.90 an hour.
Who has been the most influential person in your life? My father. I love my mother dearly, but I got a lot of the values I have from my father, like integrity. If you do the right thing, are always truthful and are honest with yourself and others, you’ll have nothing to worry about.
What person would you like to meet? I’ve met him, but I would say it would be Bill Gates. What I admire about him is his ability to change the world. First he created the largest most successful software company and made computers commonplace. Before Microsoft, computers weren’t so prolific. He created that.
What I really admire about the guy is now he has turned his focus and attention to changing the world through his foundation. If you look at most businessmen who are successful, that’s what they do. All they do is run their business. It’s a very unique individual that is able to do both.
Take time to refocus off-site.
Push your team for strong solutions.
Establish a rhythm.
If your company is sold in part or whole, there will be change. It is inevitable and generally sought. It is hard, particularly if the company was yours.
If the new investor is a strategic one, the change will be easier to predict. Typically strategic buyers, particularly the large ones, have well-developed systems and processes that they will implement in the newly added company.
These include reporting chains, standardized employment and compensation structures, and other authority systems. It generally is difficult for entrepreneurs and family business owners to adjust to these regimes — they typically don’t last long. As such, success in these situations comes from recognizing this from the beginning, and structuring the transaction and transition accordingly.
“Partnering” investments, however, have a much different dynamic. In these investments, the investor often is betting on one or more of the existing managers to lead the company going forward, even if they are selling some or most of their ownership. The investor views its role as partnering with these leaders to assist them in realizing their strategic vision and the company’s potential. Partnering is how our firm invests.
If you are contemplating a partnering transaction, the following are some thoughts regarding how to maximize your success in working with your new investor/partner:
Openness in the process
The clearer your post-transaction aspirations, the better your ability to communicate these to your future partner. If these are communicated, your future partner has the ability to accept them, or not, and then structure accordingly.
The future partner has a similar imperative of openness regarding objectives and timing. This fosters the most critical component of a successful partnering — alignment.
For us, the strategic plan is the cornerstone of communication. It sets forth the vision, goals, path, responsibilities and budget of the organization. It sets expectations. You will be highly successful with an investor/partner if you present acceptable plans for growth and improvement, and then consistently meet or exceed them.
If choosing between a high-growth plan with high risk, or an acceptable plan with very low risk and potential to exceed it, I suggest the latter.
Willingness to let go
Change can be uncomfortable. This is particularly true for most successful business owners. This includes the very difficult, but necessary, process of letting go of employees and managers — no matter their tenure or relationship — who can’t keep pace or aren’t embracing the company’s new direction.
This also includes letting go of the notion that it is right merely because it is “how it’s always been done.”
Accountability can be difficult for those who aren’t accustomed to it (i.e., most entrepreneurs — which usually is why they are entrepreneurs). As such, success with a future partner will depend in part on how, and how often, the leader and team agree they will communicate.
Ideally, this communication and accountability can be accomplished without creating new tools (and more work) for the team. The goal is to keep the partner apprised of key issues and challenges. In doing so, the partner is able to bring assistance and potential solutions. In not doing so, you and the company are deprived of that opportunity for support.
It takes considerable effort to bring on an investor/partner. If done well, however, the benefits greatly outweigh the costs. You gain a skilled sounding board, a provider of resources and capital, a vastly greater network, asset diversification and a risk sharer.
Your ability to execute in the four areas described above can greatly impact your success. The onus is on you.
Dan Lubeck is founder and managing director of Solis Capital Partners, a private equity firm headquartered in Newport Beach, Calif. Solis focuses on investment in lower-middle market companies, typically located in the Western U.S. Lubeck was a transactional attorney and has lectured at prominent universities and business schools around the world. For more information about the company, visit www.soliscapital.com.
Cease and desist letters can be used for more than stopping trademark
infringements — they can be invaluable marketing opportunities.
“There are a lot of ways to turn a possible negative into a real business positive,” says Tom Speiss, shareholder and trademark attorney at Stradling Yocca Carlson & Rauth. The letter could be used to initiate a conversation about a potential acquisition or licensing opportunity.
“You want all CEOs and key decision makers to read your letter and say, ‘This is a company we need to meet,’” says Speiss.
Smart Business spoke with Speiss about how to capitalize on cease and desist letters.
What is a trademark cease and desist letter?
Simply put, if a company owns a trademark and sees another using it in the same space, the letter is intended to get your competitor to ‘cease’ using your mark. Rather than filing suit, which should be a last resort, a well-crafted letter with your position statement and a clear articulation of your rights to the mark may be all you need.
Are certain elements necessary for the letter to hold legal significance?
The best offense is a well-planned defense. First, you must be able to confirm receipt of the letter. If you later file suit, you will have proof that your competitor received the letter, giving you a better opportunity to claim damages, especially if willful infringement can be proven.
Second, the message in the letter needs to be clear. It should state that you have superior rights to the mark, what those specific rights are, and it should include the trademark registration number. Specific is terrific here — there should be no doubt about what you are claiming and how you’d like to remedy the situation.
How can you ensure the letter has the intended effect?
Do your research. Make sure you are well within your rights before asserting a claim. Once the alleged infringer
receives the letter they will likely conduct their own investigation about your company, so be prepared.
Then order a trademark search report. The report will give you a more complete picture including: a list of applications and registrations at the U.S. Patent and Trademark Office, a list of abandoned and pending marks, state registered marks, business and domain names, and Web use. You will want to have a solid case for your claims before you draft the letter.
How could it be used as a marketing opportunity?
We all have one chance to make a first impression. This is a terrific opportunity to demonstrate your industry prowess and position your company as a viable suitor or partner. Perhaps you are a prime acquisition target. Or, maybe your strategy includes growth by strategic acquisition. Maybe there’s a licensing deal in your future. Whatever the case may be, if the recipient of your letter sees you as a clean and professional organization, this could be one way to start the conversation toward something much greater.
How would you advise companies considering this strategy?
Think with the end in mind. Before you write the letter, think about your desired outcome and talk about it internally.
You will want to make sure the letter is accurate and viable so you can continue to pursue your desired opportunities in the marketplace. Then, put your best foot forward. Keep in mind, your letter may be read by unintended recipients such as news media or your main customers.
If you write a strident and aggressive letter, your competitor may find a way to use it against you in the marketplace. Don’t let them do that. Make sure you give your recipient a reasonable ‘out’ by not forcing them to mount an aggressive defense out the gate. When done right, you could turn your competitor into an ally.
Tom Speiss is a shareholder at Stradling Yocca Carlson & Rauth. Reach him at (424) 214-7042 or firstname.lastname@example.org.
WEBSITE: Find Tom Speiss’ profile at www.sycr.com/thomas-j-speiss-iii.
Insights Legal Affairs is brought to you by Stradling Yocca Carlson & Rauth
You need operating cash to grow your business, but securing a traditional commercial loan isn’t always easy for small and midsize business owners. Fortunately, Small Business Administration (SBA) loans are a worthwhile financing option. An SBA loan typically offers longer terms, more competitive interest rates and, best of all, bankers can be more lenient because the government guarantees up to 75 percent of the loan amount.
“An SBA loan is a sensible option for businesses that experienced a decline in sales and profits during the recession,” says Santiago “Chico” Perez, SBA sales manager for California Bank & Trust. “Bankers can consider your financial projections, along with historical data, when evaluating your loan application.”
Smart Business spoke with Perez about the growth opportunities through an SBA loan.
When should business owners consider an SBA loan, and how do these loans differ?
New ventures traditionally have a hard time securing working capital, but you may get $100,000 to $5 million through a SBA loan, as long as you’ve run a similar enterprise and propose a viable business strategy. You also can use SBA funding to purchase another company or procure equipment or inventory to fulfill a new contract.
Generally, SBA loans can offer more favorable terms. For example, you only need 10 percent down to purchase real estate, and you can roll fees into the loan balance. SBA loans feature higher loan-to-value ratios, longer repayment periods and no balloon payments. Companies often qualify for higher loan amounts because they can amortize the purchase of buildings over 25 years or equipment over the remaining economic life, and need less cash flow to service the debt. Owners also can use funds to buy raw materials, finished goods or equipment to expand into new markets.
How does the SBA’s underwriting criteria differ from traditional commercial loans?
Bankers will review standard requirements such as financial statements and credit reports, but some criteria differ:
- Projections. Bankers consider future sales and historical data when evaluating loan applications. Ensure your projections are realistic and correlate with current financials and forecasts. For example, earnings won’t automatically double with a larger facility or new equipment. Instead, explain how the equipment lowers operating costs or how you’ll use the extra space to add a new production line. Substantiate claims with copies of customer agreements and contracts.
- Resumes. Tout your management team’s industry experience and track record.
- Ownership. Owners with more than a 20 percent stake must submit signed personal financial statements and tax returns.
- Down payment. Lenders must determine the source of a borrower’s down payment, even if the funds are in an escrow account.
- Collateral. The need for collateral hinges on the loan purpose and program so review underwriting criteria at SBA.gov, and state both in your proposal.
- Tax returns. Owners must supply three years of tax returns, financial statements and balance sheets to qualify.
Does the SBA offer other support to small business owners?
The SBA provides myriad tools and support to help owners create a loan proposal and navigate the underwriting process. Small Business Development Centers offer free assistance with financial, marketing, production and feasibility studies, and many centers engage local experts.
The SBA also provides mentorships, free counseling and business plan expertise through the national nonprofit SCORE.
What else can owners do to successfully navigate the lending process?
Loan approval hinges on an accurate, thorough proposal, so take your time and seek expert advice. Bankers want to hear the story behind your numbers; be ready to explain how you overcame adversity and how you’ll use the SBA loan to take your business to the next level. Help your banker understand your customers by including links to your company’s website, LinkedIn page or Facebook page in your proposal. Finally, you can accelerate the process by selecting an approved Preferred Lender who can approve loans without submitting the entire package to the SBA.
Santiago “Chico” Perez is SBA sales manager at California Bank & Trust. Reach him at email@example.com.
Website: California Bank & Trust is an SBA Preferred Lender. Learn more at www.calbanktrust.com/smallbusiness/loans/small-business-loans.html.
Insights Banking & Finance is brought to you by California Bank & Trust
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com
Workplace contentment, fulfillment or wellness may be intangible, but it will affect the growth and success of your business. When it’s present, there are obvious, unmistakable signs, says Satinder Dhiman, Ph.D., Ed.D., associate dean of the School of Business, chair and director of the MBA Program and professor of management at Woodbury University.
“When you go into an organization, you can almost smell it,” he says. “Being highly fulfilled takes a conscious decision; it’s not something that just comes about.”
Businesses have less absenteeism, turnover and stress leave when employees have a sense of belonging, enhanced contribution, and more engagement and trust.
Smart Business spoke with Dhiman about how to encourage highly fulfilled employees.
Why do executives need to be concerned with workplace contentment?
A recent Gallup survey found that 47 percent of employees feel disengaged, and when that’s the case it will affect the bottom line. People just going through the motions are more likely to be absent and leave the company. There also are about, depending on the survey, 17 to 20 percent of employees who are positively disengaged.
Organizations are not just numbers, and you don’t want to pursue profits in an unbridled manner. Remember that businesses are about people.
What are the characteristics of highly fulfilled employees?
These employees have a sense of ownership and commitment. They focus on what is right, are generally more appreciative and concentrate on making things work. They are aware of their contribution to the organization and know how it adds to the bigger picture.
This then leads to high emotional intelligence. They are in better control of their own feelings, so they are better equipped to deal with the feelings of others. And better interaction leads to greater trust, which is the glue holding things together.
Research shows corporate communication failure happens not because the message was wrong, but because it was interpreted wrong. There was distrust of the messenger.
How can management increase workplace contentment?
A great employer will inspire employees through actions, not just words or slogans. To achieve this, approach employees in a holistic manner, appreciating all skills and abilities. There’s a joke that at his retirement party, an employee said, “For 40 years you paid me for my hands; you could have had my brain for free.” Also, strive to create a culture of appreciation. Instead of catching people doing something wrong, catch people doing something right.
Fulfillment engages the body, mind and spirit. So, take a genuine interest in employees’ well-being and what is happening with their emotional makeup. You want to help employees attain their dreams — send a few staff members to a local conference, provide tuition reimbursement or be flexible on hours to allow them to go to class.
If employers support employee education, many fear employees will gain skills and leave. However, in addition to being more productive while working for you, think of the economy as a whole. You hire people who have been trained elsewhere. Your employees gain skills and go elsewhere. There is no real gain or loss.
Of course, bonuses and pay raises don’t hurt in terms of building trust and appreciation.
Why is personal fulfillment so important?
Workplace fulfillment is more likely when employers and employees are fulfilled in their own lives. It trickles down.
Attaining personal wellness comes from self-knowledge or understanding your purpose in life, as well as selfless service. Once those two pillars are in place, certain mental habits or gifts contribute and help create a sense of self-fulfillment. They are:
- Pure motivation.
- Taking a vow of harmlessness.
By focusing on each of these habits, you can create personal fulfillment. And, by sharing it with your employees, achieve organizational well-being.
Satinder Dhiman, Ph.D., Ed.D., is an associate dean, School of Business; chair and director, MBA Program; and professor of management at Woodbury University. Reach him at (818) 252-5138 or firstname.lastname@example.org.
Book: More on this subject can be found in Satinder Dhiman’s new book, “Seven Habits of Highly Fulfilled People: Journey from Success to Significance.” Find it on Amazon.com.
Insights Executive Education is brought to you by Woodbury University
Recently, I had the privilege of attending the EY World Entrepreneur Of The Year conference in Monte Carlo. I’m back to report that entrepreneurship is alive and thriving around the globe!
It was a whirlwind of a trip, packed with networking, thought-provoking panel discussions and personal interviews. We heard from a remarkable panel of speakers including Kofi Annan, former Secretary General of the United Nations and Nobel Peace Prize recipient; Sir Timothy Berners-Lee, inventor of the World Wide Web; John Cleese, award-winning actor, author, humorist and Monty Python legend; and many more.
I also had the opportunity to sit down with some of the world’s most accomplished entrepreneurs. These business leaders come from more than 60 countries that combined represent a staggering 94 percent of the global economy.
In this issue and in the months to come, you’ll learn what the world’s greatest entrepreneurs have to say about leadership, innovation, overcoming challenges, bringing their visions to life and much, much more. You’ll also hear from the leadership at EY as to the importance of celebrating entrepreneurship.
Transforming vision into reality
“Be careful about making assumptions. Those assumptions can lead you down a pretty dangerous path. It is OK to make assumptions and have confidence but you had better do your due diligence as well. An assumption is having those critical for the business make sure it is happening. I am very trusting of people and in the past have had some unfortunate instances where I did make assumptions about something and they were completely the wrong assumptions.”
Dr. Alan Ulsifer, CEO, president and chair of FYidoctors
“Growth obviously continues to be a challenge. The markets demand growth if you are a publicly traded company, and growth is a metric of how the business is doing. If you want to continue to attract the best people, attract the right sources of capital to your business, you have to demonstrate that things are going well and growth is one measure that people look to. I think that if you are a business in an established market, growth can be a challenge because those markets by and large are growing more slowly. So in order to get more rapid growth, many companies are looking at emerging markets and trying to figure out what their strategy should be for emerging markets, those that have double-digit growth potential.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group EY
“One of the toughest things for me was that people have a certain image of my country, Colombia. They don’t trust a company there to have good quality and do good work, but I am very proud to offer those qualities from Colombia. It is not easy but it is something that you can accomplish. I have been down a lot of times, but the good thing I have noticed is that every time something like that happened, I have been able to obtain positive things out of it. I have been broke multiple times, but from being broke I have been able to learn from it and rebuild.
Mario Hernandez, founder and president, Mario Hernandez
Jim Turley leaves his post as Global Chairman and CEO for EY with deep admiration for the entrepreneurs who continue to use their vision and spirit of innovation to change the world.
“They have got this wonderful ability to think outside themselves, to look at the world outside these windows and see the needs that exist out there,” says Turley, who officially retired on July 1.
“Then they’ve got a vision to create a product or service or an idea to meet the need they have seen. They have got the courage to risk everything and they are as persistent as can be. Most of them fail the first time out. But they get up, clean themselves off and do it again.”
“Work carefully with a few people who get a twinkle in their eye. If you talk about your idea, some people will respond with excitement because they get it, but not everybody. Maybe you talk to 300 people and three people will get it. Work with those three people. The web took off because a few people all over the world got it. You get the support from a few people who get it and then it builds from there.”
Sir Tim Berners-Lee, creator of the World Wide Web
Corey Shapoff has a job that many would envy, booking well-known musical acts such as Maroon 5, Katy Perry, Christina Aguilera and Kelly Clarkson for live concerts and private corporate events. But he doesn’t take much time to stop and think about all the famous people on his call list.
“I’m a grinder,” says Shapoff, president and founder of SME Entertainment Group. “I’m the kind of guy who is always looking to what’s next. You’re only as good to me as your last deal.”
It’s that instinctual drive to always try to do it better that is embedded in the true entrepreneur and allows the next vision to become a reality.
“It’s hard for me to turn it off and say, ‘That’s great,’” Shapoff says. “I’m always thinking about tomorrow. You just can’t take things for granted in our business.”
“The skill sets of an entrepreneur involve understanding how to create business. So if you’re going to give back, why not work with kids who need it the most and actually teach them and help them to be entrepreneurs. That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”
Amy Rosen, president and CEO, Network for Teaching Entrepreneurship
“When you’re an entrepreneur you feel like you have never met a deal that you didn’t like. You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”
Jim Davis, president, Chevron Energy Solutions
“It’s important that you have teamwork and all your top players are well motivated with passion, principles and values. We make sure that people know where we are going and what our main objective is for that year. We promote teamwork inside and outside the company. Our directors have to make sure they are sharing our company values and principles with each of their team members.”
Lorenzo Barrera Segovia, founder and CEO, Banco Base
“For entrepreneurs you get a great idea, you start your business and then you have to keep focused. Keep executing that idea if that idea is big enough. Never fall into the temptation of getting out of your business or change it unless it’s strategic. Secondly, try to get financing as late as you can. Never get financing as soon as you can. Thirdly, create a great team and culture, because that’s what will prevail and create value for shareholders and your community. That’s how you scale your business. The last one is to dream big.”
Martin Migoya, CEO, Globant
“It was nothing but a gut feeling. The only thing I knew was there was a big opportunity in yogurt. I grew up with yogurt. Being from Turkey yogurt was a big part of our diet. I wasn’t sure if I could do it – break through in the world of yogurt in retail.
The category was owned by two major companies; Dannon and Yopliat owned about 70 percent of the market, and they had been there for years. As a startup you go to the specialty stores first. That’s how you start and you grow and once you reach a certain level then you go to the big retailers.
I didn’t want to do that. I wanted to go to the big retailers and be in the regular dairy aisle. That was a crazy idea and nobody thought that would go, but at least we tried. When we tried, we convinced one retailer in New York, ShopRite. The result from that was we were able to expand to a couple of other retailers. After the second or third customer that we had success with for our yogurt, I knew it wasn’t going to be about selling, it was about making enough.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
Wakefulness is not the first trait you may think of for effective leadership. Empathy and reflection aren’t typically considered strategic business values. And that emotional intelligence should be a factor in hiring is foreign.
However, corporate America should be about more than just the bottom line — a stakeholder approach with social responsibility is key, says Joan F. Marques, Ph.D., Ed.D., assistant dean of the school of business, chair and director of the BBA Program, and an associate professor of management at Woodbury University.
“Effective leadership consists of a mix of hard and soft skills,” she says. “A major part of being an effective leader is being human, vulnerable, seeing the big picture, the purpose to what you do.”
Smart Business spoke with Marques about the responsibility of corporate leadership.
How does the notion of the awakened leader sync up with the bottom-line mentality that drives corporate America?
Is corporate America awake? Yes and no. In the past two decades, we’ve seen evidence of corporations run by individuals excessively focused on profits. A great many leaders are still driven by a bottom-line mentality. It even drives our students — I once had an MBA student who wanted a ‘massive bank account.’ But the process of waking up involves realizing there is more to life than money. Many people go through life sleepwalking, never questioning it. In the book ‘True North,’ Bill George writes of ‘crucibles,’ suggesting that most people wake up only when confronted with loss, illness or something painful.
There needs to be a middle path. You cannot ignore profit, but it should not happen at the expense of others. If you consider the well-being of customers, suppliers, employees and other stakeholders, getting to a certain level of profitability will probably take longer, but your conscience will be intact.
Thankfully, a growing number of business schools are awakening to this trend. Many are addressing the responsibility MBAs have to the larger community, taking into account workplace spirituality and ethical leadership. It’s a break from the kinds of leaders they were grooming in past decades.
You’ve suggested that empathy and reflection are key corporate values. What’s the best way to ensure they find their way into corporate best practices?
Empathy and reflection are personal and interpersonal values, and the best way to incorporate them is on those levels, preferably starting at the top. Of course, some believe these values don’t belong in the workplace — just as so many examples prove the necessity of including them.
Consider Starbucks. Their products aren’t cheap, and on price alone there doesn’t appear to be much empathy. But below the surface, the company has done a lot. Empathy and reflection were foundational for the company, stemming largely from Howard Schultz’s personal experience growing up. For years, Starbucks has been providing health insurance to part-time workers, the company ceased using milk that includes bovine growth hormone, and it has looked at how it uses and conserves water.
Another example is Costco, which works with only a 15 percent markup. Costco employees get stellar salaries for that industry, resulting in a happier workforce that treats customers better.
Cases like these show that empathy and reflection have value, long-term.
Businesses are good at hiring for cognitive intelligence, but how are they at screening for emotional intelligence?
Generally, businesses don’t screen for emotional intelligence, which is inherent in stakeholder approach and social responsibility. In order to screen for it, they would need to practice emotional intelligence first.
We did a study on how business students, especially undergraduates, look at leadership values. Empathy ranked lowest in perceived importance for leaders while charisma and networking came out on top. Respondents saw no place for emotional intelligence.
So far, there has been a mutually supporting dynamic at play: the business world demanded short-term profits and students delivered it upon entering. As business educators, we are facing the immense task to evoke a paradigm shift. We’re diligently working on it.
Joan F. Marques, Ph.D., Ed.D., is assistant dean of the school of business; chair and director, BBA Program; and associate professor, management at Woodbury University. Reach her at (818) 394-3391 or email@example.com.
More wakefulness quotes, points to ponder and action plans can be found in Joan’s book, “Joy at Work, Work at Joy: Living and Working Mindfully Every Day.” Find it on Amazon.com.
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One of my favorite business books, which also made it as a Broadway play and a big-screen movie, is “The Wonderful Wizard of Oz,” written by L. Frank Baum in 1900. My hero in this story is not the young orphaned Dorothy, nor the Cowardly Lion, the desperately in-need-of-some WD-40 Tin Man, nor even the Scarecrow in search of a brain.
Instead it is the Wizard. To understand why the dubious Wizard is my favorite character, one must get past the portrayal of him as scheming, phony and at times nasty.
To appreciate the man behind the curtain, recognize that he is a very effective presenter, though at times this ex-circus performer behaved a bit threatening. OK, he was a jerk, but the point of this column is to take you down the yellow brick road on the way to the enchanted Emerald City and corporate success.
From this tale there is a lesson that one can say all sorts of things, not be visible, and yet still have a meaningful impact.
Another takeaway is that playing this role provides plausible deniability. This absence of visual recognition is particularly beneficial in negotiating when you, as the boss, use a vicar, aka a mouthpiece, to speak on your behalf. This allows you to have things said to others that you as the head honcho could never utter without backing yourself into a corner.
Another plus is you can always throw your mouthpiece under the bus if necessary, of course, with his or her upfront understanding that sometimes there must be a sacrificial lamb. This is not only character-building for your stand-in, but also many times presents an unprecedented opportunity for him or her to learn in real time.
Perhaps the Wizard was the first behind-the-curtain decision-maker, but today this role is used frequently in business and government. In a similar vein, the “voice” of Charlie from the well-known 1970s TV series “Charlie’s Angels” was always heard, but he was never seen.
Frequently there is much to be said for using anonymity to float a trial balloon just to get a reaction. Think about a son having his mom test the waters by talking to dad before the son tells him he wants to drop out of junior high school to join the circus. Maybe that’s even how our former circus-drifter-turned-Wizard-of-Oz got his start.
In the negotiating process it is important to have a fallback when the talks hit a rough patch by instructing your vicar to backpedal, saying that he or she has just talked to the chief and the benevolent boss said, “I was overreaching with my request.”
This also serves to build a persona for the boss-behind-the-curtain as someone who is fair-minded and flexible. All the while, of course, it’s the boss who is calling the shots and maneuvering through the process without getting his or her hands dirty.
The value of using this clean-hands technique is that it enables the real decision-maker to come in as the closer who projects the voice of reason, instead of the overeager hard charger who at times seems to have gone rogue.
It actually takes a bigger person to play a secondary role behind the curtain rather than always be in the limelight. It also takes a hands-on coach and counselor to maneuver a protégé through the minefields to achieve the objective.
However, accomplishing the difficult tasks through others is true management and the No. 1 job of a leader who must be a master teacher.
After you have guided a handful of up-and-comers a few times through thorny negotiations, you will gain much more satisfaction than if you had done it yourself, while engendering the respect and gratitude of your pupils. They in turn will have learned by doing, even though they were not really steering the ship alone.
The final step is to let the subordinate take credit for getting the big job done. This will also elevate you to rock star status, at least in his or her eyes. Soon those who you’ve taught will emerge as teachers too, and the big benefit is that you will populate your organization with a stellar team of doers, not just watchers.
So, forget about the Wicked Witch of the West and move backstage for the greater good of the organization.