Roadblocks abound in business. Most business owners have been told, “No, we won’t fund your great invention.” Most executives have been told, “We’re not ready yet” to enter that wide-open, new market. But how they respond to those obstacles, the “no”s that are inevitable, is often a good indicator of who will ultimately succeed.
The first step is to step back and assess the causes of the opposition. That likely requires asking probing questions to get insight about the reasons and reasoning behind the rejection. The banker who rejected your idea may have valuable insight into your industry sector, information that could affect how you choose to proceed.
While data gathering, also probe for guidance on how to make your proposal stronger, when to re-pitch your proposal and who else may have decision-making or decision-influencing authority. The goal should be to identify possible avenues for future appeals.
Armed with the new information, it’s useful to then take a look back at where you are in relation to your goals for the project. Review and celebrate your successes. It will give you the energy to continue onward. But measuring your results, as well as who helped you accomplish the past results, also may shed light on who may be able to guide or assist you in your next steps.
Now, modify your strategy. Every rejection should be viewed as an opportunity to improve. Your planned adjustments should be listed and scheduled. Then, as you progress in making changes, you will be able to see your accomplishments and have a record of how you responded to different scenarios for future reference. It also will give you a clear return on investment in time and energy spent and keep you centered on progress.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s Entrepreneurial Winning Women, one of Enterprising Women Magazine’s Enterprising Women of the Year Award and the SBA’s Small Business Person of the Year for Region VI. Her company, Zeitgeist Wellness Group, offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgroup.net.
There are many pressures on organizations to make the most out of every customer interaction and maximize the return on investment on marketing and sales spend. However, businesses often don’t have the work force necessary to handle these functions as timely and effectively as they would like or the tools and processes in place to measure and track success. Companies that are able to track interaction, engagement, investments and customer patterns and behaviors often enlist the help of a customer relationship management (CRM) tool.
“A CRM tool helps businesses manage sales, marketing and customer service operations without significantly expanding their work force,” says Gina Rosen, a consultant at Columbus. “CRM, in the past, may have been nice to have — a luxury technology, but in today’s marketplace, it’s a must have to stay competitive.”
Smart Business spoke with Rosen about CRM, its applications and how it has helped businesses improve processes to better engage customers, target sales and gauge marketing effectiveness.
What are the typical features offered by a CRM system?
The features offered by CRM are very diverse. It’s primary applications are contact management; marketing automation; sales force automation; sales and lead management; reporting and analytics; call center and case management, particularly with respect to customer inquiries or complaints; workflow automation, or automating manual processes; and social media integrations. Businesses have the option for on-premise solutions where the software is hosted at the business on its servers, or they can utilize a Web-based or cloud option, which involves less initial financial investment. The software can also be customized to meet the particular needs of a business.
Is CRM cost prohibitive for businesses?
No it is not, however, had this question been asked six or seven years ago the answer would have been yes. Previously, enterprise-ready CRM software required significant funds to get the software and hardware in place. But with the advent of cloud-based solutions, even businesses run by a sole proprietor can afford CRM and leverage its applications to optimize processes. The cloud-based model allows business owners to pay through subscriptions that charge per user. The pay per user cloud-based model offers a low-cost opportunity to implement CRM, experience the value and see the return on investment (ROI).
What are the most compelling reasons an organization would implement CRM technology?
A recent survey of 200 top-performing small and medium-sized businesses showed that the number one reason businesses implement CRM software is to establish data-based metrics for sales and marketing. It also provides the ability to show ROI and quantitative key marketing metrics that mean a lot to businesses.
The second reason CRM is implemented is to proactively communicate with customers. Customers expect a lot these days, and one of those expectations is that businesses, whether small or large, interact with them. To stay in front of your customers and offer personal interaction is critical.
Within that same vein, the third reason companies take advantage of this software is for custom-targeted sales and marketing. With CRM you can customize that end user experience, which makes your sales force more effective. Customers can interact directly with your CRM custom solution through your existing website and experience a tailored visit based on previous interactions, or your sales force can utilize the standard feature when interacting with customers and have all of a customer’s history available in one spot.
What are the most important value drivers for CRM?
The top value for a business is the software’s ability to help manage marketing and sales campaigns. CRM can help businesses test marketing and distribution strategies and gauge customer reactions. This information can be applied to future marketing efforts.
Another important value driver is that the software serves as a customer data repository, allowing you to consolidate customer knowledge within the organization in CRM. This includes far more than just contact details, but also customer behaviors and attitudes and price sensitivity. This, combined with personal data, can allow businesses to build more effective and predictive sales models and marketing campaigns that result in higher sales.
Further, CRM systems can help demonstrate ROI. With CRM you can quantitatively show increases in sales, customer referrals and participation in promotions.
What is the most common challenge a business faces when implementing CRM?
Typically the challenge is user adoption — getting your sales force and front line users to embrace CRM. They often see populating the fields as double entry, an extra step, or another way for management to check in on them. But once the sales force sees that using the software results in more sales, they can easily overcome that hurdle.
What are the most common performance metrics?
The top one, hands down, is revenue growth. The faster you can show ROI the better.
Second is growth in a business’s customer base, which means adding new customers or converting leads into paying customers.
The third most common performance metric is aggregating customer data. Many companies have customer data spread out over disparate systems. CRM gives businesses a one-stop shop for their records.
Can you give us some examples of companies that have benefited from implementing CRM?
The Toledo Mud Hens baseball team, which works within the media and entertainment industry, had ticket sales go up 88 percent in one year and their internal operations couldn’t keep up with demand. Adopting CRM allowed them to automate and streamline inefficient processes, which translated into more ticket sales. A customer testimonial is available with more information.
Another example is the human resources consulting firm Findley Davies. Implementing CRM in their call center has given them the ability to manage daily responsibilities and track productivity. It has dramatically changed and improved day-to-day operations within their Benefits Administration department.
Gina Rosen is a consultant at Columbus. Contact her at (248) 850-2195 or firstname.lastname@example.org.
With more than 20 years in the market and 6,000 successful business implementations, Columbus is a preferred Microsoft Dynamics business partner for ambitious companies. Columbus’ key deliverables include flexible and future-safe ERP, CRM, BI and related business applications that deliver competitive advantage and immediate impact.
Polly LaBarre is the co-author (with Bill Taylor) of “Mavericks at Work: Why the Most Original Minds in Business Win.” The strategies, tactics and advice in “Mavericks at Work” grew out of in-depth access to a collection of forward-looking companies. These maverick companies are attracting millions of customers, creating thousands of jobs and generating billions of dollars of wealth.
Here is a portion of my interview with LaBarre about the book, which covers forming strategies, unleashing ideas, connecting with customers and enabling employees to achieve great results.
Q: Describe what you mean by “maverick.”
A: Mavericks are different, edgy and independent of spirit. Their personal style or message may not appeal to everyone. But that’s precisely the point. Mavericks are defined by the power and originality of their ideas. They stand out from the crowd because they stand for something truly unique. What’s more, they take stands against the status quo, in defiance of the industry elite and offer compelling alternatives to business as usual. Mavericks may be fighters, but they’re not rebels without a cause. Their sense of purpose is not only powerfully distinct (Think: Southwest Airline’s quest to democratize the skies); it’s provocative and disruptive (Think: HBO’s declaration of originality, “It’s not TV. It’s HBO”).
Don’t confuse mavericks’ unswerving commitment to a cause and their lack of patience for the status quo with the egotism, monomania and power mongering modeled by too many celebrity CEOs and moguls. Mavericks, in fact, have a sense of humility.
Q: Are mavericks born or made?
A: It’s probably a little bit nature, a little bit nurture. We wrote this book to nurture the maverick in all businesspeople. What red-blooded working person wakes up in the morning, looks in the mirror and says, ‘I think I’ll stand for business as usual today’? We all want to make a mark, forge our own path and express ourselves in the world. It’s just that some of us need more of a nudge down that path than others.
Hopefully, the maverick individuals and ideas we present are inspiring and instructive enough to move people. The 32 companies we feature have vastly different histories, cultures and business models. We examined glamorous fields like fashion, advertising and Hollywood, as well as old-line industries like construction, mining and household products. The maverick leaders of these organizations are young, old, women, men, Americans, Europeans, charismatic and preacher-like, retiring and almost reticent. They just don’t fit any one mold.
Q: How does a maverick survive within a traditional company?
A: We encountered a bunch of mavericks inside big traditional companies. They all seemed to have a couple of survival strategies in common: They unleashed tough questions and critiques of their organization without losing their sense of loyalty to it. They’re the kind of questions every CEO should be asking. For example, Jane Harper asked of IBM, ‘Why would great people want to work here?’ And Larry Huston, now vice president of innovation at Procter & Gamble, argued, ‘The current business model for R&D is broken. How can P&G possibly build all of the scientific capabilities we need by ourselves?’
Mavericks don’t just ask questions, they act. We saw this again and again: They just got started, usually without a budget or formal permission, by designing an experiment around their question. Jane Harper launched an experimental Extreme Blue lab in Cambridge and spent a couple of years begging and borrowing resources until the program’s impact became clear.
Mavericks look for peers and fellow travelers outside the boundaries of their company. Not surprisingly, mavericks tend to click when they meet other mavericks. They’re great networkers and learners and are always looking for kindred spirits for support and ideas.
Q: Who is the quintessential maverick in American business?
A: Herb Kelleher and the team at Southwest Airlines. In the midst of the financial carnage and heartaches of the airline business, there’s one company that keeps growing, keeps creating jobs and keeps generating wealth. And that, of course, is Southwest. Southwest didn’t achieve these results because its fares were a little lower than Delta’s or its service was a little friendlier than United’s. It achieved those results because it reimagined what it meant to be an airline. If you ask Herb Kelleher what business he’s in, he won’t say the airline business or the transportation business. He’ll say that Southwest is in the freedom business. The purpose of Southwest is to democratize the skies, to make it as easy and affordable for rank-and-file Americans to travel as it is for the well-to-do. That’s a pretty commonplace idea today but largely because Southwest fought the entrenched conventions of the industry so doggedly in pursuit of that purpose. Its unrivaled success is based on its unique sense of mission rather than any breakthrough technology or unprecedented business insight.
Guy Kawasaki is the co-founder of Alltop.com, an “online magazine rack” of popular topics on the web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of ten books including Enchantment, Reality Check, and The Art of the Start. He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through www.guykawasaki.com or at email@example.com.
It seems that every other week there’s a major story in the media about a company claiming that one of its competitors has purloined a cherished secret that provided an unfair competitive advantage. This is all part of running a business in today’s fishbowl environment, where sensitive information is too abundant and can be obtained by almost anyone and everyone who is so inclined.
In this era of heightened visibility, some of the best companies, especially high-tech firms, play everything incredibly close to the vest, particularly when it comes to providing information about current sales trends, new products and projects that they are exploring or developing. This is because such information is a coveted company asset. In today’s “victory at almost any cost” world, too many are looking for that edge to leverage whatever they can to stack the odds in their favor.
We also read too frequently about how easily these secrets have somehow wound up in the wrong hands. Sometimes a loose-lipped employee simply talks too much to too many people in the wrong places. Occasionally, someone simply leaves a briefcase or smartphone, jam-packed with confidential information, in a bar, at a restaurant or on a plane.
What’s not talked about much is the frequent practice of competitors simply asking what appear to be innocuous questions of lower-level personnel in a company in order to garner nuggets of “inside information” usually without risking the perils of violating any legal statutes. It’s also common practice for Wall Street security analysts to simply walk into a retail store, as an example, and begin asking questions about trends, what products are selling and which aren’t. It all gets down to the reality that it never hurts to ask a question because one never knows when a valuable tidbit will be revealed.
Like it or not, this is just the way it is, and there will always be people who ask and others who tell. What can you do to protect your coveted information? The answer is basic: mandate that providing revealing responses to specific questions is a violation of company policy and could result in draconian consequences for anyone who spills the beans, no matter if well-intended. Once your employees and suppliers know the ground rules and the consequences, you’re one step closer to closing the possibility of vital information inadvertently slipping through the sieve.
The best way to accomplish this is to establish, enforce and continually reiterate a “one voice, one company” policy. This translates into all hands within your organization knowing what can be told to outsiders and, more importantly, what can’t. This policy must be in writing and must state what types of questions are off limits. It must also explain how the questioner is to be handled when the interrogatory is posed. In my retail chain experience, we often had competitors, vendors and industry analysts visit stores and ask all types of questions. Candidly, I don’t blame them, but with a clearly understood policy, employees know how to respond by referring the questions to headquarters and a specific department or individual. Ninety-nine percent of the time the person asking the question never follows up with the corporate office because he or she knows the desired answers will not be forthcoming.
Most employees want to please their employer and most want others to think they are in the know. When you create an ironclad policy, it takes the pressure off of your people and adds another layer of security about things no outsider needs to know. For your suppliers, require that each sign a confidentiality agreement and specify that you have a simple “one strike and you’re out” policy. Also use your own secret shoppers to test your vulnerability by having them ask the forbidden, just to verify that the company veil is not being lifted by the unauthorized.
This protocol is certainly not foolproof, and periodically, there will be lapses — the most frightening of which are the ones you’ll never learn about. It all gets down to a numbers game. Confidential information, just like the cash, equipment and other assets on your balance sheet, can never be taken for granted and must be protected. Anyone can look in your fishbowl in this day and age, but it is your job to make sure that what they think they might find is not what they get.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at firstname.lastname@example.org.
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Are we grateful for the things we have? Are we grateful that we live in a country where the government can’t seize our businesses, where there’s no threat of rebellion and where we can go home to the comforts of our modern homes?
Many people in the world don’t have any of those luxuries. Some can’t even look forward to a good meal or clean drinking water. Most of us here in the United States don’t have to worry about such problems because the people that came before us worked hard to create a nation that has an amazing standard of living. The generation before us rose from the troubles of the Great Depression, led the fight against Nazi aggression that killed millions and returned home to finish making America into a superpower, but do we ever pause to think about the contributions our mothers and fathers made to make things easier for us today? They lived in small houses, often sheltering multiple generations, and worked long hours to make a better life for their children and grandchildren and selflessly went off to war to protect our freedom.
Do we ever think about any of that? The answer for many is no. Gratitude is in danger of becoming a lost art as we focus on accumulating money and possessions, always looking to be better or richer than the next person.
How many times have you read about or talked to someone who had everything you could ever ask for — nice home, nice car and no money problems — lamenting the fact that he or she doesn’t have as much as or more than someone else? We sometimes catch ourselves comparing who has more instead of who has less.
As business leaders, we should have some sense of moral obligation to help those within our sphere of influence, whether it’s our peers, employees or the person who lives down the street. We should be doing our best to look out for those around us, but too often, our days are consumed with the details of business.
Our world may be built on information, but wisdom is lacking. Business has been boiled down to statistical analysis and quarterly earnings reports while people are just another line on the ledger. There is often little room for gratitude in corporate America, and that’s a shame.
When our focus is on accumulating things, we can never enjoy it, because we don’t know how. How can we enjoy something when we’ve already raced off to try to get more? Like a kid tearing through a pile of Christmas presents, we never really take the time to appreciate each gift.
In this season of giving thanks, we should take a moment to think about those who came before us and who helped us get to where we are. Let’s thank those around us for a job well done and consider reaching out to someone who could use a helping hand. But most importantly, let’s consider putting our lives in perspective by thinking about those who are less fortunate.
When we focus more on gratitude, we’ll make a difference that’s far more effective than any business plan. It will allow us to take the time to celebrate success and enjoy the fruits of our labor. Gratitude doesn’t require a giant donation or a huge event; sometimes the little things are more effective.
In the end, we’ll find that the only things truly worth accumulating are good will and happiness. It’s in our control to start helping everyone around us get their fair share, and that’s something all of us can be thankful for.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
Hiring the right talent to manage and operate your business is one of the biggest challenges any executive faces. No matter how amazing your product or how visionary your plans, success won’t come easily without a workforce in place who can cultivate and enrich your company’s core values.
Figuring out how to attract and employ this talent can be tricky — candidates who look good on paper aren’t always the best fit in person.
Here’s how Petplan picks winning personalities who support and sustain our company’s culture.
When your company’s core values are clearly defined, hiring decisions become much easier. At Petplan, we have established ourselves not as an insurance company but as a pet health company that sells insurance. Putting pets first is the central idea from which our entire company culture has evolved. Thus, our staff absolutely must have a passion for pets.
Our goal to help pet parents afford the best care for their pets is something that resonates with all our employees personally, and this personal investment drives our customer service, helps determine our business partners and defines our marketing and communications strategies.
Understand your needs
To make the best hiring decisions, you need to know what you need. Because we are a business with a start-up culture, Petplan needs people who are excited about building solid, scalable infrastructure to accommodate explosive growth.
Because we are dedicated to advancing pet health, we need people who have the vision to identify key partnerships and who have an inherent passion for the product.
Above all, we need people who can think and communicate in the brand’s fun and friendly voice, whether connecting with our customers, our partners or each other.
Don’t be afraid to pass over talented people who may not be a great fit for your company’s culture. There’s more to a great team than talent. While skills can be taught, passion and personality tend to be part of the package or not.
Pass it on
Once you’ve determined your company’s modus operandi, you must effectively communicate it to your employees. For Petplan, culture is king. We strive to maintain the classic start-up culture — an environment in which everyone is a hands-on contributor and shares ideas. We use an open floor plan that promotes interaction throughout the staff, managers and executives alike.
We balance productivity and play. Our offices feature a plethora of pet-inspired décor, plus a treat table we keep filled with staff and visitor favorites. When one of our claims adjusters passes an exam, we order mini cupcakes for everyone.
When we debuted at No. 123 on Inc. magazine’s list of the fastest-growing privately held companies last year, we filled the office with balloons and had a party.
These are small perks, but they reinforce our belief that hard work can be punctuated by playful pick-me-ups now and then.
The rules of attraction
Find the sweet spot in your company’s culture for wooing the talent you want. For Petplan, one of the biggest perks we offer is that we allow pets in the workplace. Encouraging our employees to bring their pets to work helps foster a uniquely creative work environment and has given us a distinct advantage in attracting new talent.
So many prospective employees place a real premium on being able to bring their pets to work as it provides more quality time with their beloved companions and reduces expenses like dog walkers.
Most importantly, we have found that sharing our office with pets serves to reaffirm our commitment to pet health and well-being — and keeps our “pets first” philosophy at the heart of everything we do.
Natasha Ashton is the co-CEO and co-founder of Petplan pet insurance and its quarterly glossy pet health magazine, Fetch! — both headquartered in Philadelphia. Originally from the U.K., she holds an MBA from the University of Pennsylvania Wharton School of Business. She can be reached at firstname.lastname@example.org.
It was the first half of 2008. For 15 years, the company that became BioClinica Inc. had developed a strong presence as a medical image management business in the clinical research solutions space. Mark Weinstein, the company’s president and CEO since 1998, had been on board for most of that run.
“It’s been a good business, a dominant business, but in March 2008, we decided to really broaden the business and go into a new area for us, what we call e-clinical solutions,” Weinstein says. “It’s technology and solutions related to clinical research. We were stepping beyond our core business and entering a new space, but our strategic plans were intact.”
Everything was smooth sailing until the fourth quarter of that year, when the economy slammed into a wall, plunging into its worst recession since the Great Depression. Weinstein needed to keep BioClinica on course, continuing to grow its e-clinical solutions business, but he now had to do it in a climate of extreme volatility and adversity.
“When that happened, we had to do what everybody did, which was figure out how to keep the business going and stay profitable throughout the downturn,” he says. “That was a big challenge because we had just stepped beyond our core business.
“The good news is, we did fairly well, we maintained profitability and continued to grow the new business, but our revenue ramp wasn’t quite what we anticipated when we went into the space.”
But keeping the ship on course wasn’t as easy as maintaining a steady heading. Weinstein and his leadership put in months of work behind the scenes to ensure that BioClinica could continue to grow. The company generated $68 million in service revenue last year, up from $62 million in 2010.
Know your strengths
When the recession hit, Weinstein and his team had to do what a lot of company leaders were doing — assess the business and figure out which areas needed which resources in order to help minimize the effects of the downturn as much as possible.
Weinstein knew BioClinica’s best bet was the company’s primary competency — clinical research. He and his team quickly came to the conclusion that the company needed to focus on new ways to employ what it does best.
“We know clinical research very well, and we always approached it from the management of medical images as it relates to information using clinical research results,” Weinstein says. “So we wanted to stay within clinical research, but we needed bigger markets to go after.”
Within the broader category of clinical research, Weinstein decided to pour more resources into technology. With the recession driving business volume downward, e-clinical solutions became more than a new area for BioClinica to explore. It became essential to the company’s ability to weather the recession and emerge from it in a position to continue growing.
“We knew drug development was going to continue, but the challenge we had was knowing that pharmaceutical and biotech companies, as well as the world in general, became kind of like deer in headlights for a while,” Weinstein says.
“So the question becomes, what do you do with your business to try and maintain profitability? Something I have always stressed to my people is that when you hit a down market, the last thing you want to do is exit that down market in a weakened state.”
You can’t adjust the flow of resources in your business without creating a domino effect. Scaling back timetables on projects, reallocating dollars and reallocating manpower all take a cumulative toll on the organization. Your reasoning might be sound, but if you don’t keep your people in the loop, all they’re going to see is chaos and upheaval. Morale will suffer and, in turn, so will your culture.
Weinstein says a CEO’s obligation to his or her people in a time of upheaval boils down to one word: transparency.
“Transparency was a big thing for me because it wasn’t just my issue personally; it was a company issue and a market issue,” he says. “I didn’t see it as everybody’s issue to try and solve it, but I was very open with everyone.
“In some ways, it was actually better from a communication standpoint than some other market situations you might find because everybody in the world knew things were changing. The issue was that we had to do our fair share as individuals and a company to respond to that.”
Weinstein relied on the company’s organizational structure as a vehicle for communication. He focused on developing solutions with his department managers, who then rolled those solutions out to their areas of the company.
The goal was to maintain as much of a sense of normalcy as possible throughout the organization. BioClinica was responding to an economic crisis, but Weinstein didn’t want that feeling to permeate the company ranks. He wanted his people to remain focused on driving growth and finding solutions.
“We started with our executive team and just worked the process,” Weinstein says. “It was pretty similar to what we would be doing in a normal budgeting process. The issue was, the situation was somewhat fluid due to the down market, and nobody knew how long it might last.
“It was a little scary there for a while, because the economy worsened faster than anything I could remember in my career. But I wasn’t alone in thinking that, and everybody understood that they had a role to play in being a part of the solution.”
Face your customers
You can put the best crisis plan in place, plot out every detail and allocate resources perfectly, but it won’t make a bit of difference if sales dry up. If your customers aren’t buying what you’re selling, you’re still in a world of trouble.
Weinstein knew he couldn’t just focus inward on his own strategies and processes. As the economy worsened, he had to look outside the company and make sure his people were still connecting with the people and organizations that purchase from BioClinica. He couldn’t strip mine the customer-facing areas of the company if he expected it to emerge from the recession in a healthy state.
“We wanted to make sure that customers didn’t see us as retreating, so we deemed anything customer-facing to be highly critical with regard to resource allocation,” Weinstein says. “Things like development work might have changed, the rate of change of some of our products and services might not be as fast as we would have liked otherwise, because we had to gauge what the business could support and afford.
“But we didn’t want to do anything that would have affected aspects of the business that are client-facing.”
When the full force of the recession hit, Weinstein and his management team started to receive inquiries from customers as to the financial stability of the company. Weinstein looked up on it as an opportunity to reinforce confidence in BioClinica.
“We deal with all of the top pharma companies — the top 25 in the world plus 75 percent of the top 50,” Weinstein says. “In any given month, we’re sending invoices to about 170 pharma companies. So we did have more inquiries than usual relative to making sure that we did have financial stability, because drug development is going to be the key to their success. The last thing they needed was one of their vendors associated with their clinical research having financial difficulty.
“The way you quell those concerns is through simply being honest. You need to be open with people about where you stand.”
If you try to sugarcoat an issue or dance around a problem, it will come back to bite you. It’s only a matter of when.
“At the end of the day, we are all measured from the outside market from a financial perspective,” Weinstein says. “So for me to say something is happening that is not going to happen, I am delaying something that is going to be causing a much bigger problem if people have valued me based on expectations that are going to change. You really need to manage the expectations.”
However, managing customer expectations can be more easily said than done, especially if the matter involves an employee who wants to make a big impression.
Sometimes, younger employees who are eager to make their mark or simply haven’t mastered the art of managing expectations, will overpromise on a project, which could damage your firm’s reputation. Depending on the size of the account and the influence of the customer, such a misstep can potentially have long-reaching consequences.
“Sometimes, you can have a person who sees a risky situation with a project, but rather than be the bearer of bad news, they’ll tell the customer that they can get the project done without mentioning the risk level involved,” Weinstein says. “That type of situation can end one of two ways: Either you get it done and you’re a hero, or you don’t get it done and you have very poorly managed the customer’s expectations.
“So I always tell people to err a little bit on the side of losing the excitement of being the hero and more on the side of helping the customer to understand the risk you are undertaking. That way, nobody is disappointed.
“Clinical trials never happen as you plan them. As a vendor, one of our roles is to fix problems when they occur. To tell the clients that there will not be problems is not the right answer in most cases.”
Your customer-facing people have to know what constitutes a major risk. As BioClinica continued to grow in the e-research field during the recession, defining the boundaries of what made a given project a suitable risk came down to judgment calls at the executive level.
Ultimately, any decision on risk tolerance is an educated guess. You research the numbers, you measure the resources you can put into the project and you gauge the expectations of the customer. Beyond that, there are no guarantees. You can only trust the judgment of the people around you.
“We’ve amassed a tremendous amount of experience in our business, and anytime you’re able to rely on people with experience, it’s to your advantage,” Weinstein says. “I feel very comfortable that I can sit down with the right group of people, and I feel confident that we can figure out pretty quickly whether the project under consideration presents a risk that is appropriate for us.
“You can take the risk, but make sure everyone involved understands the level of the risk. The customer could always tell you that they don’t want to take that type of risk.”
If you have to walk away from a project because the risk is too big, it’s never an easy decision. But if it comes to that and you’ve built your corporate culture on a bedrock of integrity and honesty, the right answer should be obvious when you get on the phone to the customer.
“It has to be part of the fabric of who you are as a company,” Weinstein says. “If you’re talking about walking the walk like you talk the talk, I really do require that here. It can be difficult because those are never easy decisions. You want to minimize the number of decisions like that. But you simply have to stay true to the fabric of what you are as a company and who you are as a person.” <<
How to reach: BioClinica Inc., (267) 757-3000 or
The Weinstein file
Born: Washington, D.C. Raised in Richmond, Va.
Education: B.A. in economics, University of Virginia; MBA, College of William and Mary
First job: I filled foundations with dirt in a new housing development. I did it by hand, one shovel at a time, then tamped it down so the concrete foundations could be poured. I was 15 at the time, and that as much as anything convinced me that I needed to go to college.
What is the best business lesson you’ve learned?
As saying I’ve always enjoyed is, ‘Life is what happens when you’re busy making other plans.’ The path your business takes between here and the realization of your vision is not a straight line. There are a lot of curves and road switches. You have to constantly re-evaluate where you are headed. A good vision two years ago might not be a good vision now.
What traits or skills are essential for a business leader?
I am a big believer in having a strong ego rather than a big ego. A strong ego elicits feedback and makes people want to share things with you. A big ego just turns people away, which is never good. You need input from a lot of different people to run your business the right way.
What is your definition of success?
Seeing the people around me thrive personally and professionally. I am not responsible for the personal lives of the people who work here, but I can help foster a balance between their personal and professional lives. If you have a good personal life, it will help you have a better professional life.
Indemnity clauses are included in contracts to provide a means by which the contracting parties can shift the responsibility of risk.
“Indemnity clauses can expand, limit or even eliminate the obligations of one party to another with regard to property damage, personal injury and contractual obligations,” says Paula Devaney, Director, Claims Services, at ECBM. “Indemnity clauses are drafted in order to establish the terms and conditions upon which one party can shift risk associated with the performance of the contract.”
Smart Business spoke with Devaney about how to make indemnity clauses work for you, shifting risk away from your business.
What’s an example of how indemnity clauses work?
Here’s an example: Company A owns a building and retains Company B to complete parking lot repairs. As a result of the activities of Company B, a visitor to the building falls and sustains an injury. The visitor files a claim for damages against Company A. Pursuant to the indemnity clause in the contract, Company A demands that Company B respond to the claim since it arose out of their operations. If the contract did not include a properly drafted indemnity clause, Company A would have to bear the risk and costs of resolving the claim on their own behalf.
Do indemnification or insurance provisions apply first?
Indemnification provisions are evaluated first, as these clauses establish the parameters that will govern the risk being shifted. Insurance provisions are then evaluated to determine if the circumstances of the claim or demand will fit within the purview of the insurance coverage requested to be purchased. Not all of the risk that is shifted by an indemnity clause is or can be covered by insurance.
Both indemnity clauses and insurance are risk transfer vehicles. In a contractual relationship where an indemnity agreement exists, the parties will also include insurance language to support the indemnity. In the insurance world, the indemnity clause is commonly referred to as the ‘belt’ and the insurance provisions are referred to as the ‘suspenders.’
If the indemnity clause and insurance provisions are successfully drafted and implemented, the insurance purchased by the indemnitor will provide the indemnitee with a certain level of comfort that there is a means by which the indemnitor will be in a position to pay for the risk that has been shifted to them.
How does the language of the indemnity clause affect the end result?
Language that must be thoroughly evaluated is anything in the clause that establishes very broad terms of the risk being transferred. Both parties who are depending on the viability of an indemnity clause should draft indemnity language that is specific to their relationship, complies with the jurisdiction in which the clause will be interpreted and clearly, or as best as possible, defines the proposed intent of both parties entering into the agreement. Effective communication is paramount to ensure that intent is clearly understood.
What must you include when creating a contract’s indemnity clause to provide the most protection for your company?
One way to establish a high level of clarity is to include or create definitions of key terms in the indemnity clause. Terms such as claim, damages and contractor/vendor conduct can be included in a definitions section of the contract so that there is little to question as to what type of act constitutes a breach, what constitutes a claim and what damages are subject to indemnification. Simplifying and defining the terms can allow a more clear and concise interpretation of the indemnity clause against the circumstances giving rise to the demand for indemnity.
The identification of the parties to be indemnified is also crucial. The party potentially granting indemnity will wish to limit the parties to be indemnified, whereas the party requesting indemnity will seek to expand or broaden the list of potential indemnitees.
The duty to defend and associated costs must be clearly established and can also include issues such as which party controls and/or must consent to defense, the degree to which one party must consent to settlement and the remedies available if there is a refusal to defend an indemnified claim.
Other factors to be addressed are:
- Losses/damages or limitations on types of damages. Issues such as attorney’s fees must be included as a recoverable cost, while consequential damages should be contemplated along with fines and penalties.
- The period of time in which an indemnity clause survives the contract.
- Including and/or defining the type of event that can trigger the obligation to indemnify.
- Insurance procurement. The indemnity clause in a contract should not rely on the viability of the entity granting the indemnity. If the indemnitor goes out of business, their insurance may still be in effect.
When your business is signing a contract that includes indemnity clauses, what should you watch out for?
It is crucial for both parties to read the contract, and specifically the indemnity provisions, carefully. Every indemnity clause is different. There is nothing standard, and many times nothing fair, about an indemnity clause. If you do not read the clause and carefully consider the implications, you can be accepting a tremendous amount of risk you never intended to undertake.
The indemnity clause should be drafted in a manner that carefully considers the intent of both parties. When negotiating indemnity provisions, you may win some battles and lose others. However, with effective communication between both parties and effective review of the contract by legal counsel and, just as importantly, your insurance broker, the intent of the contract will at least be understood. Therefore, you can enter the contractual relationship with an understanding of the risks and liabilities.
Paula Devaney is a Director, Claims Services, at ECBM. Reach her at (610) 668-7100, ext. 1216, or email@example.com.
Insights Risk Management is brought to you by ECBM Insurance Brokers and Consultants
The Internet is an integral part of doing business — from sending emails and hosting a website to setting up virtual private networks and interconnecting locations. Today, more than ever, organizations require reliable Internet connectivity with increasingly higher speeds to satisfy growing application requirements, while carefully managing IT costs.
“Internet usage continues to grow and evolve significantly from its simpler Web browsing and email origins,” says Mike Maloney, vice president of Comcast Business Services. “Organizations, large and small, now extensively rely on the Internet to increase productivity, provide business-to-business or business-to-consumer services, streamline their supply chain and outsource IT applications to reduce costs.”
With Internet bandwidth requirements continually increasing, Ethernet dedicated Internet access is becoming a cost-effective and more flexible option to connect to the Internet, Maloney says.
Smart Business spoke with Maloney about how Ethernet stacks up against T1 connections.
How has the adoption of new technology increased the need for better Internet connections?
The potential for new technology to lower the cost of business operations is clear. For example, by moving applications to hosted or ‘cloud-based’ services, an organization can eliminate the capital expense of the application servers and operational expense of software licenses and support, while reducing the burden on their IT support staff. Spending on public IT cloud offerings is forecast to reach $55.5 billion in 2014, representing a 27.4 percent compound annual growth rate, according to a recent report from the International Data Corporation. This rapid growth rate is more than five times the projected growth rate for traditional IT products.
Meanwhile, utilizing this new technology will require a higher-speed Internet connection. An organization’s bandwidth requirements may increase due to:
- An increasing number of visitors to your locally hosted public website for e-commerce transactions.
- An increasing use of cloud-based services where you move applications from running locally to a remote data center or hosted server in the cloud.
The capital expenditure and recurring operating savings of cloud-based services typically provide a better return on investment than the additional Internet bandwidth costs. During times of accelerated growth, organizations can leverage the Internet to rapidly respond to increased productivity and supply chain, while carefully managing costs.
How have businesses been using T1-dedicated Internet access?
A popular way for organizations to connect to the Internet has been via a T1-based dedicated Internet access (DIA) service. T1 DIA services are typically offered over one or two T1 circuits so the bandwidth options are limited, inflexible and costly as an organization’s bandwidth and application requirements grow. To be competitive, you need to quickly and cost-effectively adapt your Internet access bandwidth, so T1 DIA services are challenged to meet these elastic bandwidth requirements.
With a single T1 circuit operating at 1.5 megabits per second (Mbps), you need to purchase upgraded service to get more bandwidth, which may require a new T1 router to support the bonding of the two T1 circuits. Typically, that will cost another setup charge, as well as a higher monthly recurring cost for the service. Additionally, there will be service disruption if you must replace the existing T1 equipment, and new equipment or circuits may delay the upgrade days or even weeks.
Many T1 DIA service providers cannot provide Internet access beyond two T1s. If your Internet access bandwidth needs increase beyond that, you will have to switch to a different technology with higher bandwidth choices.
Why is Ethernet-dedicated Internet access a better choice for businesses?
Ethernet DIA services are typically delivered over a single Ethernet fiber optic connection that can handle any amount of bandwidth between 1 Mbps and 10 gigabits per second (Gbps). Ethernet DIA service can be purchased in flexible bandwidth increments up to the Ethernet port speed, and the port speed depends upon your initial and anticipated bandwidth needs for the duration of the service agreement. A 10/100 Mbps Ethernet port speed is sufficient for most organizations. Unlike T1-based DIA services, Ethernet DIA services are not offered based on circuit speed.
Capital expenses are also low to non-existent with Ethernet DIA. If your building does not have a fiber optic connection, your Ethernet DIA provider will deliver a fiber optic connection, which has a one-time cost associated with that installation. Otherwise, if you can use an available Ethernet port on your router you are ready to go, as the Ethernet DIA service demarcation device is included in the setup cost. Ethernet DIA enables you to better manage your IT capital and operating expenditures during varying economic cycles. Cost savings can be achieved because you don’t have to switch Internet access technologies or providers when your organization’s bandwidth needs exceed 3 Mbps (two T1s).
Your Ethernet DIA service provider can remotely reconfigure the Ethernet service demarcation device to support the new bandwidth you require, and you can continue to use the service up until that upgraded amount. If the Ethernet service demarcation device needs to be restarted, you may only experience a minimal service disruption. This is in contrast to T1 DIA service, where new equipment and new, higher speed circuits may take days or even weeks to get implemented.
Organizations increasingly utilize the Internet as a critical business tool, and Ethernet-based DIA services provide many benefits over T1-based DIA services. The most obvious benefit is higher bandwidth. Ethernet DIA services also enable organizations to more quickly and cost-effectively add Internet access bandwidth to optimally manage their IT costs while they grow their business.
Mike Maloney is a vice president of Comcast Business Services. Reach him at firstname.lastname@example.org.
Insights Telecommunications is brought to you by Comcast Business Class