An accountant can serve many types of roles for CEOs, from hands-off keeper of the books to proactive, fully engaged adviser. It’s up to executives to decide how heavily they want to rely on their accountants. But in general, the more interaction they have, the fewer financial surprises they’ll run into.
“If you want to derive the most benefit, you have to work with your accountants year-round,” says Steve Christian, managing director at Kreischer Miller. “If you just want a scorekeeper who prepares a financial statement and a tax return and don’t want to include him in your team of advisers, you certainly don’t need to. But most progressively minded companies try to surround themselves with good advisers. And the way you become a good adviser is to intimately know the company you’re advising and spend as much time with them as you can, 365 days a year.”
Often, accountants can steer a company clear of pitfalls that might have adverse tax or financial consequences.
“Sometimes you enter into a transaction — you buy a company, you buy some equipment, you do something related to a transaction — and it will have some negative impact as to the financial statement or the tax returns,” Christian says. “Our value takes place by guiding you through the impact of transactions, as opposed to the value of preparing a return or preparing a financial statement. That’s why we really think you need to call us before you act rather than after you act.”
Advice on best practices in a client company’s market sector is another area in which accountants can provide value.
“CEOs know their companies intimately, but unless you belong to a peer group or something like that, you may not have many opportunities to see what best practices other companies are utilizing,” Christian says. “Meanwhile, your accounting firm may support 1,000 different clients out there. So while we may not have the answers to everything, we can tell our clients what we’re seeing is happening with other companies, and they can use that information take advantage of best practices.”
Steve Christian, managing director with Kreischer Miller, has a range of experience providing business advisory, audit, accounting and tax services to a variety of businesses, including privately held companies, partnerships, and SEC registrants.
HOW TO REACH: Kreischer Miller, www.kmco.com or (215) 441-4600
How often do CEOs need to talk to their accountants in order to effectively manage their company’s finances? Obviously, this question can’t be answered with a simple blanket statement: “X times a year for a total of Y hours should do the trick.” There are too many different types of businesses, each with different amounts of expertise and unique needs of their own.
But if you talk to even a small number experts in the accounting field, a couple of themes emerge. One is that when CEOs are contemplating unusual transactions, it’s always better to err on the side of having too much contact with their accountant than not enough. Another refrain is that any time a CEO has any doubts or unease about an upcoming transaction, it’s definitely time to call your accountant to let him or her know you have something you need to talk about.
“Typically, in a larger company, the CFO would take on that role,” says Mark Koziel, vice president of firm services and global alliances for the American Institute of Certified Public Accountants. “But what about the CEO who doesn’t have the C-suite and the finance function inside their organization? That’s where, in particular, we talk a lot about being the trusted business adviser for that CEO. Especially in family-owned businesses, you see this a lot. You need that financial adviser, but you may not need them full time, so you can lean on your CPA on a regular basis throughout the year.
“They should be there for part of the strategic planning sessions. If the CPA knows what’s going on throughout the year and is present for discussions about important things like expansion, employment and succession, then they can be better informed for when they do the year-end planning and consulting.”
The benefits of touching base periodically with clients throughout the year, not just at year end, is a common theme among those with experience in the accounting field.
“When you meet with clients during the year, you can go over their financial statements, among many other things,” says Sharon Cook, president of the National Society of Accountants. “You can make sure they are doing everything properly. And you can make suggestions about some of the other things they need to do, for taxes and for other financial purposes.”
Think, talk, transact
Talking to your financial team throughout the year enables your experts to make suggestions in advance of key transactions that can greatly alter the tax and financial impact of those decisions.
“When you get to year end, depending on what the CPA is doing for you — if it’s a compiled financial statement, an audited financial statement, a tax return — there are definite tax implications that could be affected,” Koziel says. “And maybe some decisions would have been made another way if the CEO had considered the tax implications of what they were about to do.”
Making assumptions on your own rather than asking professionals for guidance can lead to unpleasant surprises. Accountants come across these types of situations frequently in their daily interactions with clients.
“A situation that I find clients often have problems with is, for example, in a year in which they’re expecting a large profit, they want to be able to reduce that,” Cook says. “So one of the first things they think about buying is a car, because they think they’re going to be able to write that car off in full in the first year. Then, by the time you get the books and you’re ready to do the tax return, you have to tell them, ‘Guess what — you’re not going to be able to do that. You’re going to have some limits in terms of what you can deduct this year.’”
For many types of nonroutine transactions, getting advice beforehand from your accountant or finance team is almost always the wisest course for business executives to follow.
“Some of the types of transactions that should be discussed ahead of time would be, for instance, any type of big-dollar purchases that they’re looking at,” Koziel says. “Buying versus leasing is one that needs to be looked at carefully, such as whether you want to buy or lease a building. Another important one is business expansion: If they’re looking to buy a business or even sell their business, the whole M&A transaction and how that will take place is a very important thing to consider.
“Major investment decisions along the way could have significant impact. And succession of the business — that’s another huge issue. You should be having big-time conversations about that early on.”
Other nonroutine transactions that should be reviewed carefully ahead of time include borrowing money, major equipment purchases and like-kind exchanges.
“Before you do a like-kind exchange, you should definitely talk to your accountant to make sure it’s done properly so it won’t be disallowed somewhere down the line,” says Cook. “There are many types of like-kind exchanges. It could involve property that they own. A lot of times, especially in smaller businesses, it may involve cars or equipment that they have around, where they can exchange it and therefore not pay the tax that they would have had to pay if they had sold it directly to someone else.
“Any time a CEO wants to make a big expenditure on any kind of equipment, they need to talk to their accountant to make sure they’re getting the benefit of everything they have, especially if they want to borrow money to pay for it. Because if they want to borrow money, they’ve got to figure out, ‘What is that going to do to my bottom line? Is this something I really need to do, and is it right for me?’”
An accountant’s value to a CEO or a client company isn’t limited to figuring out the tax effects of transactions before they’re entered into. There are many other types of general business issues for which an accountant can provide valuable advice.
“Strategic planning is a big one,” Koziel says. “One of the best services a CPA can provide to a CEO is to just get them in a room for a day and sit down and talk about the business. Do a strategic planning session. Make it formal, kind of like a board of directors meeting.
“Having frequent conversations throughout the year is useful in many ways. The beauty of the CPA environment is you gain a lot of knowledge about particular industries. Take construction, for example. Typically, the CPA has more than one construction contractor client, so they see good habits and bad habits that are out there, based on other businesses in that market. And they also can sometimes translate things to other types of businesses. Maybe it’s a customer service strategy in a certain retail business that could be replicated in, let’s say, a not-for-profit that you might have as a client.
“The ability to observe how a variety of different businesses operate and being able to assess the good habits from the bad habits and recommending the good habits to other types of businesses that are in their client base — these are valuable services that CPAs are in a position to offer.”
Another important service that accountants can provide is keeping tabs on key financial line items to watch for significant changes, then investigating those changes to determine the factors that are causing them, and, if needed, recommending ways to counteract the changes.
“If you keep in close contact with your clients, especially if they’re doing their own accounting in-house, one of the things you can do is review their gross profit percentages,” Cook says. “Are they staying consistent? Are they changing dramatically from one period to another? What’s the cause of that? And you can sit down and go over that with them and see if there’s a problem. It may be in their inventory control, if they have inventory. Or is the cost of their regular purchases going up? And if so, what do they need to do to offset that? Does that mean that they need to find a way to increase sales? Or do they need to have better controls on what’s in inventory and how it’s coming out of inventory?”
The definition of trust
One of the accountant’s main goals is to achieve trusted business adviser status with his or her clients. It’s a prestigious standing, and it must be earned over time.
“It’s about giving your clients the absolute best service you can provide,” Cook says. “To be able to review and make sure they’re handling their affairs properly, to produce good financial statements, to have the best possible relationship between the accountant and the CEO, and ultimately, to make sure that their business prospers. That’s the key. That’s what you aim for.”
Koziel concluded by telling a story — “the ultimate story of a CPA as a trusted adviser,” as he calls it.
“I was at lunch with a CPA friend of mine about a month ago, and he says to me — because he’s heard me say time and again: ‘Trusted adviser, trusted adviser’ — he says, ‘You know, I never really understood the meaning of “trusted adviser” until just this past weekend. I got a call from the wife of a client of mine. The client is a construction contractor; he owns a construction business.’
“This guy was a huge car buff and had a warehouse full of antique cars. He was in the warehouse tinkering one day, and he fell to his death off of a ladder — changing a light bulb, of all things. So he says to me, ‘I’m sitting there last weekend, and this client’s wife calls me. … A little while later, I’m in her living room. It’s the wife, the two daughters, the two son-in-laws and me.’ He says, ‘That is the trusted adviser relationship. That’s exactly what you’ve been talking about. The only one that they felt comfortable enough with — the only one they felt confident enough with as the outside consultant to the family — was me. It’s almost like I was part of the family.’
“That’s the type of relationship that you start to see in these businesses with their CPAs,” Koziel says. “And as a CEO, if you don’t have that trusted adviser relationship now — well, we’re talking about your life’s savings. Whether it’s invested all in the business or whether it’s held in other types of assets — these are your life’s savings. Who are you going to trust with those types of decisions? And you’d better have that person with you year-round, to help you make better decisions all along the way.”
HOW TO REACH: American Institute of Certified Public Accountants, www.aicpa.org; National Society of Accountants, www.nsacct.org
As an executive, your overall well-being consists of your effectiveness combined with your happiness. Effectiveness means that you are able to produce desired results; happiness means that you are in a state of well-being and contentment.
Most executives spend a good amount of their time worrying about effectiveness. They set tough goals and push hard each day to achieve them in the most effective manner. They are results driven, and any thought of happiness comes only after the results are achieved.
This begs the question: Can a busy, hardworking executive be both effective and happy?
I believe the answer is yes. In fact, I am convinced that better results stem from increased happiness. With this in mind, here are some tips to consider that will increase your happiness as an executive:
Start with a happiness exercise
Take out a piece of paper right now and list all the things in life that make you happy. DO NOT censor them. List them as they come to mind. Let it free flow from your mind and heart. List as many people, places, situations, causes, activities, feelings and opportunities as you can possibly dream up.
Now, get in touch with your mind and heart and begin to narrow the list down. In the end, you want to have a list of no more than four things that make you happy.
You now have within your grasp the areas where you should focus your energy, time and resources. The items on the list are at the very core of your personal happiness.
Happiness in all areas of your life is the key that unlocks great measures of effectiveness. Once discovered, your personal happiness will have a direct effect on your business effectiveness.
Take this exercise seriously. Be open, honest and determined. You will be surprised at the results.
Stay happy through ongoing education
Never stop learning.
We must be surrounded with people who know more than we do. They must be a part of what we do with our life and business.
Successful, effective executives know that education does not have an expiration date.
When was the last time you put a teacher or coach into your business goals and plans?
What new thing have you learned lately? Are you willing to stretch your mind to consider more than you already know?
Happiness can be found in a good teacher, trainer or mentor. Look for someone who helps you develop new skill sets and fosters your growth. Allow them to push you to consider new ideas, thoughts and ways of working, acting and leading.
I know this is easier said than done, but consider the fact that stress is the #1 killer of a healthy body and mind. Stress eats away at the foundation of your happiness. It distracts you, wears on you and drags you down.
Meditation, yoga, hiking, exercise and deep breathing exercises help reduce and even eliminate stress. Each of these has been shown to reduce the risk of heart disease, diabetes and other ailments.
Do not overwhelm yourself with the thought of adding each of these to your life. Pick one that interests you and do it. Make a deliberate choice to incorporate a stress reducing activity into your daily life.
Consider this: The absence of stress brings on the presence of happiness.
Have an attitude of gratitude
Our attitude of gratitude serves to focus our minds on the things we have and the things we want, desire and need to live an even fuller, more meaningful and happier life.
In the end, gratitude is not just an attitude – it is a choice.
When we choose to be grateful and to express that gratefulness, we find our lives being shaped by its power. When that happens, we move our life to greater heights of happiness and effectiveness as an executive.
The basis of this article is that a hardworking, results-driven, empowered executive can find ways to be both effective in his or her work and experience happiness in their life. Although we see it far too often in the workplace, the two do not have to be mutually exclusive.
An executive that takes the time to think and dream about the things that truly make them happy, who is willing to stay fresh through ongoing education and who works hard to eliminate stress is an executive who has found the secret to being both happy and effective.
I wish you all the best.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email firstname.lastname@example.org or visit her website at www.delorespressley.com.
If you’re like most CEOs, your day is spent rushing around from appointment to appointment, both internal and off-site, meeting people, solving problems and plotting strategy. The hours fly by, days blur into weeks, and the years start to blend together into a nonstop race against time.
Take a moment to ask yourself if this lifestyle makes any sense. What race are you hoping to win? What’s the reward when you get to the finish line, assuming you even know where the finish line is?
John Ortberg, author of “The Life You’ve Always Wanted,” says it’s important to ruthlessly eliminate the hurry from our lives. If you are in a hurry, there is little time to care about people. We need to slow down, even to the point of solitude.
While we are running our nonstop race, the people that suffer the most are those around us. Friends, family, colleagues and employees are often ignored as relationships are neglected in favor of the next big deal.
Ortberg suggests forcing yourself to slow down and put yourself in a position to wait. For instance, pick the longest line at the grocery store or take the long way to work. Doing so will help train yourself to slow down and be patient.
You are the person that sets the pace in your company, so if you slow down and make sure things are done right, others will do the same.
Working at a pace that’s too fast typically results in things being overlooked — things like employee recognition. When you don’t recognize and reward your employees, their job satisfaction can decline and they may leave. For every person who leaves, you and your staff have to dedicate more time to finding a capable replacement, resulting in an even faster pace as time is lost to recruiting and training. It can quickly become a vicious cycle.
Enjoy life by slowing your pace and being more productive, both at work and at home. Slowing down doesn’t mean you aren’t getting things done, it means you are doing things right and building relationships with people.
Not every transaction will turn a profit in business, but you can bet that almost every relationship you have with people will pay off in the long run. Isn’t it time you started investing in those relationships by taking the time to slow down and build them?
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
The art of buzz: Reasons people talk about products and services and the best ways to seed discussionsWritten by Guy Kawasaki
Emanuel Rosen is the author of the national bestseller “The Anatomy of Buzz” (Doubleday, 2000) and “The Anatomy of Buzz Revisited: Real-life Lessons in Word-of-Mouth Marketing” (Doubleday, 2009). Prior to writing these books, he was vice president of marketing at Niles Software where he was responsible for launching and marketing the company’s flagship product, EndNote. He holds an MBA from the University of San Francisco. In this interview, he brings us up to speed on the techniques for generating buzz that every small business owner must master.
Q: Going back to fundamentals, why do people talk about products and services at all?
A: Buzzing is in our genes. We are programmed to share information with friends about where to find our next meal and about the tiger who’s about to have us as his next meal. We talk to connect, so when my daughter tells her friends about the new sweater she bought, she’s also establishing and maintaining her social ties. We buzz to talk about ourselves. If I tell you about a 10-day dog sledding trip in Alaska, I’m also telling you how adventurous I am.
Q: Which comes first, buzz or ink?
A: Usually it starts with some buzz that is followed by press coverage, which can take the buzz to a whole new level. Grassroots support can actually help you get ink — sometimes buzz is the best press release because it gives journalists this warm and fuzzy feeling that your story is for real and that there’s true excitement for it. Don’t get me wrong, if CNN calls you before your product is out, don’t tell them that you’re waiting for some grassroots buzz to build, but usually it doesn’t happen that way.
Q: Which comes first, buzz or sales?
A: There are some highly anticipated products — Halo 3 comes to mind — that get tons of buzz before a single sale. This is the exception. Since product recommendation usually starts with product experience, you need to have some people out there who use the product and hopefully get excited about it. How do you get these early customers? Part of it comes from word-of-mouth marketing methods, like seeding and sneak previews, but it also comes from traditional sales and marketing techniques. If your product is contagious in some way, then these early users will start buzzing about it.
Q: What are the essential elements of seeding a product?
A: The key point to understand is that although we’re all connected to each other, information about new products rarely spreads like a wild fire. Information tends to get stuck because we live in somewhat isolated social clusters. To accelerate buzz, companies seed their product in many different clusters. The ideal seeding campaign is done on a large scale and lets people have a firsthand experience with the product. You want to reduce the price barrier as much as possible, so the product is given for free or at a reduced price.
Q: How do you seed a website or free service?
A: The good news is that the price barrier doesn’t exist. The bad news is that the thing you’re seeding is less tangible. The basic idea is the same. You identify clusters of people by geography, area of interest, by academic discipline or whatever other classification makes sense in your case. You then approach some people in each cluster trying to engage them with the service. This is a challenge that is shared by other products. The fact that a publisher seeds the market with advance copies of a book doesn’t guarantee that people will read it. But with some follow up and encouragement and some buzz from fellow users, some more people eventually try the product and start buzzing about it too.
Q: What are the characteristics of a contagious product?
A: The best buzz comes not from publicity stunts but rather from the product itself. A product or service that makes you say, ‘Wow!’ when you use it for the first time is the classic contagious product. Other examples: products that evoke strong emotions — “The Blair Witch Project” — or reward you for talking about them — Facebook.
Products that are visible can be contagious as well — think of the first time you saw someone with an iPod. Even abstract ideas can become contagious this way. The idea of living with cancer was translated into the LiveStrong yellow wristband, which started millions of conversations about the topic.
Q: What can stop the spread of buzz?
A: Since I just mentioned LiveStrong, let me tell you about an interesting study. A research team at Stanford sold LiveStrong wristbands to students who lived in one dorm on campus. A week later, they started selling these wristbands in a neighboring dorm that had a reputation as a ‘geek’ dorm with a stronger academic focus.
What happened once the ‘geeks’ started wearing the wristbands? A week later, the research team measured a 32 percent drop in students wearing the bands at the first dorm. So sometimes, when we detect that ‘the wrong people’ are using your product, we stop using it and buzzing about it. This is true especially for products that have to do with our identity.
The most common forces that block buzz are noise, inertia and forgetting. We’re distracted by competing messages, we like to stick to ‘the good old way’ of doing things, and we forget what our friends told us. It is one reason why buzz needs to be accelerated. Even delighted customers might forget about your product and run out of opportunities to talk about it.
Q: What should you do if someone who has never used your product is bad mouthing it?
A: One of the things that surprised me most as I was working on the new edition of my book was that this type of negative buzz is quite common. One study found that 30 percent of negative word-of-mouth was by people who never owned the product. If you can identify the person who’s bad mouthing your brand, you might want to let them try the product. The problem is that you usually don’t know who they are, which brings us to another reason for why word-of-mouth marketing is so important. You have to counterbalance this constant trickle of negative comments with honest, positive recommendations from happy customers.
Q: What should you do if someone who has used your product is bad mouthing it?
A: First, listen to what they are saying. Our natural tendency when we’re attacked is to fight back, but negative comments may come from an actual bad experience. This gives you an opportunity to do two things. Solve that customer’s problem, which will often turn her from a detractor to a promoter. Even more important, it may help you identify a problem in your system, fix it and reduce negative buzz from others.
Q: Who is more likely in these Internet days to talk about your product: someone who’s had a good experience or a bad one?
A: There are two types of bad experience. There’s ‘I didn’t like this hotel too much,’ and there’s ‘The guy at the reception insulted me when I asked for towels and then sent up a dirty one.’ Frustrated customers are very likely to share their experience. However, it turns out that most buzz among consumers is positive. This may seem like a contradiction, but it has some simple explanations. One of them is that most of our experiences as consumers are actually positive.
Q: What is the role of old-fashioned advertising these days?
A: It is fashionable to say that advertising is dead, but I don’t agree. Very few products can live on buzz alone. Advertising can help a lot — at least good advertising can help a lot. First, in creating awareness and building the pool of people who can buzz about the product. Second, a good ad can prompt me to tell my friends about the product. Third, a good, authentic ad that brings in real people can stimulate buzz.
Q: How has technology changed buzz and word-of-mouth marketing?
A: It hasn’t really changed what we talk about. We still talk about ourselves, we brag, we seek advice, we gossip, we connect. The Internet’s biggest effect is that it accelerates buzz. In addition, it doesn’t only let us tell our friends about the products we use, but also lets us show them these products through videos and photos. It has enabled aggregation tools such as Yelp or TripAdvisor. In essence, it gives more people more opportunities to share information with others, which directly translates to more buzz.
Q: How can a company effectively measure the buzz it’s generating?
A: The simplest method is to ask your customers how they heard about you. You can measure the daily mentions you get on blogs and on Twitter. You can supplement this with traditional marketing research to learn what customers who don’t use these services are saying. Whatever method you choose though, you need to measure on an ongoing basis, if you want to detect any effects. Companies such as ChatThreads, The Keller Fay Group and Nielsen Online provide buzz measuring services. WOMMA, the Word-of-Mouth Marketing Association, offers lots of resources on the subject.
Q: Do you believe that there are key influencers who companies should focus on because of their insight, power and prestige — that is, an ability to lead a market as their wisdom trickles down?
A: The importance of influencers varies by industry. I suspect that they are more important in the pharmaceutical industry than in the yo-yo industry. Regarding the ‘trickle-down’ theory — this is not the way that buzz flows — especially today, buzz flows in all directions. I use the term hubs to describe people who talk more than average, and I make a distinction between social hubs and expert hubs. Both can definitely help a company spread the word, but companies should encourage everyone to talk, not only hubs.
Q: Where do you draw the ethical line on generating buzz and word-of-mouth marketing?
A: One key idea here is disclosure. Word-of-mouth marketing is not about tricking people. It’s about openly inviting them to try the product and talk about it. WOMMA offers a code of ethics that can help. When you’re trying to build buzz, you want to push the envelope and think outside of the box. And when you look for original ideas, you can’t police your thoughts. But after the brainstorming, you have to change your attitude dramatically. This is best done the morning after — over some strong coffee. Think again about your wild new idea. Ask other people what they think. Ask your customers and people in the community if you are crossing the line.
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 10 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 firstname.lastname@example.org.
There’s a classic line from the 1970 movie “Love Story” that has become a part of our popular culture. In the drama, the dying heroine played by Ali MacGraw says to her husband, played by actor Ryan O’Neal, “Love means never having to say you’re sorry” as he apologizes for his anger. It is certainly a memorable and tear-jerking line, but is saying, “You’re sorry” all that bad if it can soothe a wound caused by someone speaking or acting out before thinking?
Disagreements and anger are a reality in the workplace and in life in general. Various people react in different ways when under pressure. Some lose their cool completely and say things they instantly regret, while others launch into tormenting the perceived offender with the silent treatment. No matter the technique used to punish, all of these methods quickly become tiresome and, more importantly, adversely affect the workplace.
Too frequently in the work environment, many people just can’t suck it up and utter the two simple words, “I’m sorry,” even when they know they’re dead wrong. It’s not a macho thing either, as women don’t behave much differently when they feel put upon. What’s a boss to do when this stubbornness becomes problematic?
In a word: intervene. When not controlled, these unreasonable, obstinate antics can become time-consuming and disruptive. It could all start with an impetuous negative e-mail or a less-than-mature voice mail left in the heat of battle that cascades into a futile distraction, as otherwise effective and seemingly sensible employees act out as if they’re in a 20- or 30-year time warp, behaving as if they’re back in the third grade rather than adults in the workplace.
The most expeditious method that works with either the protagonist or antagonist in an office drama is to call a spade a spade, so to speak, and get the feuding parties together and cut to the chase, making each person agree to bury the hatchet but preferably not in each other’s skull. If employees’ anger management issues are left to fester, they can easily result in other people in the same work environment taking sides, and in short order, you will find yourself in the midst of a Civil War. The only thing guaranteed when this occurs is that there will be casualties. It is incumbent on the ruling manager to make sure that the company doesn’t wind up as the victim, incurring a loss of productivity and causing everyone around the two factions to feel as if they’re walking on pins and needles.
While many times it would be easier for the boss to ask one of the warring participants to approach the other to work out their differences, this tactic just takes too much time and the outcome can be iffy. It really doesn’t matter who is right or wrong but that the nonsense is stopped dead in its tracks. The best way to accomplish this is to make it more than abundantly clear that anger in the workplace is a nonstarter and could be a career-inhibitor.
Allowing employees to exhibit a lack of civility will cause a domino effect that will lead to no good. Civility does not just apply to peers. Instead, it’s applicable to all who must work together, including superiors, subordinates and even fellow board members. Don’t confuse civility with agreeing or disagreeing with someone. It also doesn’t mean one has to believe that someone is effective in his or her role. Instead, what must be required is that those within an organization, no matter what level, simply take the higher road and respect not necessarily the person but the role and make the assumption that everyone has a part in working toward shared goals, until it is proven otherwise.
Once everybody knows the rules of engagement, many times the negative engagement suddenly ends and it’s back to business as usual. When that doesn’t happen, it’s time for offenders to be forced to go to their respective corners so as not to do each other or the company any more harm.
To promote coexistence when no one wants to take the first step and say, “I’m sorry,” it’s up to the adult in the room — and that would be you, the boss — to step into the fray with your whistle to call a permanent timeout to these types of disruptive shenanigans.
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 email@example.com.
A unique new book with an unorthodox, yet proven approach to achieving extraordinary success.
What does it take to grow rapidly and effectively from mind to market?
This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.
Beating the competition is never easy. That’s why it requires a benevolent dictator.
Published by John Wiley & Sons. AVAILABLE NOW! Order online now at: www.thebenevolentdictator.biz
Also available wherever books and eBooks are sold, and from Smart Business Magazine and www.SBNOnline.com. Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.
Launching a new venture is probably one of the most thrilling moments for any entrepreneur. It’s a birth that often brings forth a long-standing dream for the founders and is steeped in joy, pride and egotism. However, for many new captains of industry, the dream vanishes like smoke shortly thereafter. In fact, just half of all businesses survive the first five years, and only one-third survive 10 years, according to U.S. Small Business Administration statistics. Thus, it’s worth investigating why projects fail.
In a large majority of cases, the business owners failed to raise sufficient capital to fund the labor, marketing, taxes, insurance, legal expenses, bookkeeping, supplies and costs of goods for the business. Oftentimes, they underestimated expenses and overestimated how quickly revenues would increase. In other cases, they knowingly entered the market with insufficient cash because of limited credit and savings.
Other failures are caused by an implosion from within. Specifically, the founding partners reach a point at which they disagree on how to build the business and then fail to come to a consensus that leaves all parties feeling invested in the project. Or the business develops naturally in a way that calls for the founding partners to take on roles they don't want to assume. In either scenario, the remaining partners must buy out the exiting partners in order to stay in business or fold up shop.
In the worst collapses, the venture was just poorly conceived. The founders developed a business concept based mostly on their own personal experiences or anecdotal evidence. They failed to conduct or acquire scientific research on whether there was sufficient demand for their proposed products or services. They made a cursory study of the competition. Or they made assumptions about what drives potential customers to buy when designing marketing campaigns, rather than collecting data that revealed true trends in buyer motivations.
In these cases, the founders could have mitigated their chances of failure with some thoughtful planning before the shingle was hung. Would-be entrepreneurs should clearly write out their vision with detailed specifications and the cash that will be needed to complete it. They should plan contingencies for overcoming potential obstacles.
They also should identify the strengths and weaknesses in any potential management team and seek out individuals who can fill the holes. For instance, a visionary leader who prefers to focus on the big picture will usually need someone on board who loves the details in order to ensure the project is thoroughly vetted and structured.
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.
In today’s rat race of a world we call business, CEOs often overvalue themselves, believing, for example, that they have all the right answers. Wrong.
For just that reason, CEOs need leadership coaches now more than ever before. Why? Perhaps because they are so involved in their organization, they are not able to rise above it in order to serve as an unbiased, neutral and effective leader.
At the expense of “opening up the kimono too far,” I am a living, breathing testament of this fact and struggle to overcome it. For that reason, I am on a continual search for sounding boards of respected and experienced individuals who might guide my hand and challenge me to “question my answers.”
Many CEOs with whom I speak talk often about how it is lonely at the top. They, in my opinion, are not asking for pity. What they are asking for is the comfort of others who have walked a mile in their shoes, those who make big decisions daily, decisions that have significant consequences for others.
This is where leadership coaches come into the picture. Over the years, I have worked with several coaches — some good and some not so good. But I learned from each of them. Good coaches, quite candidly, are the ones who do not pull any punches and are brutally frank with you. They seek to be honest brokers of ideas, opinions and suggestions they have gathered and feed them back to you in a constructive fashion.
Good coaches also listen and learn from what CEOs and executives have said, and seek to share expertise in helpful ways, especially when it comes to challenging and questioning the answers you give them. And, best of all, they hold you accountable.
With the skills of a good leadership coach, many positive outcomes will result and improve your positioning and impact as an industry leader. Here are my top five qualities for any worthwhile executive coach:
- An acknowledgement and self-awareness that CEOs do not have all the answers for the problems their company faces.
- An ability to learn from others who have, as they saying goes, “walked a mile in my shoes.”
- A sense of comfort that the coach will hold all conversations in the strictest of confidence.
- An ability to look at things from a more neutral and unbiased perspective and be accountable to your commitments.
- A realization that a company will benefit from a CEO who is empowered to translate what they learn from the coach into an all-new leadership style and approach, which can then be used to grow the organization.
When CEOs learn these all-important fundamentals from a coach, they can model that behavior, first moving their management team to a higher level of performance, then creating a trickle-down effect to other members of your company. The net result should be a sense of increased engagement and creativity within your organization.
Don Phillips’ book, “Lincoln on Leadership: Executive Strategies for Tough Times,” perhaps said it best. Borrowing from Abraham Lincoln’s own words referring to his strategies during the Civil War, Phillips noted that, “Leaders should realize that successful alliances put the (CEO) in a position of strength and power.”
Put another way, alignment with a coach will rapidly pay for itself and help you differentiate yourself from the competition.
In my judgment, no company today should operate without access to a leadership coach. Call them a coach, a trusted advisor or a strategic partner. Don’t get hung up on the title. Just get one. You will find it one of the best investments of your life.
G.A. Taylor Fernley is president and CEO of Fernley & Fernley, an association management company founded in 1886. Reach him at firstname.lastname@example.org, or for more information, visit www.fernley.com.
When SugarHouse Casino opened its doors to the public in September 2010, the buzz was palpable throughout the region. Located on the Delaware River, it is Philadelphia’s first casino, and its debut came with a full royal fanfare: media headlines, applicants clamoring to apply for jobs and a leadership team assembled from a pool of experienced gaming industry experts from around the country.
At the center was Wendy Hamilton, the casino’s general manager. Like everyone else associated with SugarHouse, she basked in the glow of the casino’s debut. But she also knew the spotlight wouldn’t always be this bright.
“It was all new, novel and exciting,” says Hamilton, now in her second year running the casino. “We were all making decisions every day that were going to determine who we are and how we would do business for the rest of our lives here. It was really a high energy and exciting time for everyone. But now, it’s not so new anymore and it is not as exciting. The media isn’t as interested in everything we do. So the challenge has become about how we ensure this is still a great place to work, ensure people still enjoy coming to work every day when it isn’t so novel anymore.”
It happens to virtually any business that opens to a heaping helping of pomp and circumstance: At the outset, it’s an event. After some time passes, it becomes a job. Even if the Phillies are in first place this month, by now home games have become a matter-of-fact part of summertime life. The buzz surrounding Opening Day is a distant memory.
Replace the crack of the bat with the ringing of slot machines, and you have Hamilton’s predicament over the past year-plus.
“It is something that the leadership team here thinks about every day,” she says. “We are always looking for new ways to keep the team engaged, ways to get everybody on board with what we are doing.”
Plug yourself in
Maintaining a high level of engagement with your employees comes down to how you communicate. That is the simply stated version of the solution. What Hamilton has discovered is that you need to choose your interaction points for the best possible impact.
In an organization like SugarHouse, which employs just more than 1,000, you can build communication touch points through a variety of mediums. The tried-and-true methods include newsletters, e-mail blasts, speeches and videoconferences.
But what works best for Hamilton and her leadership team, and what she emphasizes, is relationship-building through informal interaction. Hamilton walks the casino floor, visits the employee lunchroom, chats with cashiers during a lull in business, so she can learn what they are learning. Hamilton says it is critical to develop a sense of familiarity between the casino’s executive team and the employees working the floor, because those employees talk to customers every day. They find out what customers like and don’t like about their experiences at the casino, and can help the executive team to identify issues at ground level before they become major problems.
“We are in a very consumer-oriented business, in a very high-touch industry,” Hamilton says. “For example, we do a lot of giveaways to certain customers who are worth a certain dollar level to us. They are usually invited to the casino at a specific day and time to pick up their gift. Let’s say it is a set of pots and pans, which is a gift that creates some logistical concerns. A set of pots and pans is not easily handed over to a customer and carried around the casino for the rest of their visit.
“So what might happen is an employee relays a suggestion from a customer about doing the pot and pan giveaway at the end of the visit, so they can just pull up to the valet stand, put the package in the car and drive away. On the executive level, it might make more sense to us if we give the package away at the promotions center, but the people at ground level will have a better feel for the details of the situation.”
Through their daily observations, employees can formulate common-sense suggestions that can have wide-ranging positive results over the long term. But if you don’t put in the time and effort to connect with them and develop a sense of familiarity, they won’t feel engaged, their enthusiasm for the job will wane and they won’t come to you with their ideas.
“I like knowing people’s names, knowing what part of the casino they work in, and even knowing a little bit about them personally,” Hamilton says. “If you can keep it casual and informal, it’s not a big deal to run into them somewhere and ask them to help you out with something. You can comfortably ask them about a new potential policy and how it might impact them in their area of work. It keeps the communication very quick, easy and efficient.”
You won’t be able to use every single idea that an employee brings forward. But even when you have to reject an idea, or table it for a while, you can still use that as an opportunity for connection, engagement and motivation.
“When you can’t use an idea, there ought to be a reason,” Hamilton says. “Either it is a good idea for your purposes or it isn’t. If it is a good idea, you use it. If it isn’t, you need to explain to the person why it won’t work. If it is a regulatory reason or something along that line, just tell them that. More often than not, it’s going to be a situation where you like the idea but you just can’t use it right now. It might be something you can do a couple of months from now. If that is the case, you have to tell them it is a great idea and there is a better chance of it happening in a few months. But it all comes back to how you communicate with the person in that situation.”
Though you can’t often develop the same level of familiarity with customers that you can with employees, you can take some of the same informal communication principles and apply it to how you interact with customers.
“I find that the little tidbit you get from a five-minute conversation with a customer is as valuable as the customer surveys we send out,” Hamilton says. “It’s a lot of being around the operation, being there while they are playing or while they are having dinner. You just ask them what is going good about their experience and how their experience could be better. I would say it is difficult sometimes in a business setting to really get a group of executives used to just being there and having those kinds of conversations – the type of conversations you would have around your own water cooler in the executive offices. You need to be able to talk like that to your customers and your employees because that is where you are going to get the real information.”
Build your team
If you’re going to keep your employees engaged over the long haul, your communication philosophy has to become a fundamental building block of your culture. Putting words on a piece of paper, or stating it to your work force, is only the first step, however. You need to promote your communication philosophy, and you need to have a leadership team that fully buys in to your plan and can implement your communication strategy.
At SugarHouse, Hamilton had the advantage of building her own leadership team from scratch, and doing so months before the casino opened its doors.
“We were very lucky here, because at the time we were hiring, this industry was experiencing some turbulence in other markets like Atlantic City and Las Vegas,” she says. “What it meant was, people who were some of the experts in this business, people who had been in a certain field for quite a while and might have turned us down under other circumstances, were willing to take the risk and come here. The field was kind of open to us.”
After Hamilton made the first couple of management hires, a chain reaction developed as those hires then started recruiting via their own professional connections.
“Once I had one or two people on board, those people did the same things, helping me by recruiting some of their own peers to fill out their own teams,” Hamilton says. “We also hired a number of people who applied to us cold, but it helps to have connections through somebody that you are working with, and you’re able to reach out and recruit through those connections.”
As Hamilton was recruiting to build her leadership team, and her team was recruiting to build their departmental teams, she emphasized three overarching traits that all management-level team members needed to possess.
“They needed to be smart, like any executive would, and they need to be a bit clever about solving problems,” she says. “Beyond that, they also need to be people who can interact in a social setting. If they are people who can function in their neighborhood or in their kid’s school, it’s largely the same thing. Sometimes you have to train people to have those informal conversations at work, because it’s not how they were coached previously. But anybody who is smart and fairly social can pull it off once the main idea is introduced.”
When building a team that can stimulate dialogue and engage employees, you need to consider your culture first. If you want to build a management team that can promote open communication, that concept first needs to be a part of your organization’s core values. If you can’t define your values accurately, you won’t be able to hire to fit your values.
Through her professional connections, Hamilton knew of many people in the gaming and casino industry with a high level of technical competency in their areas of specialization. But by getting to know those people over the years, she developed a sense of who would fit the culture at SugarHouse and who wouldn’t.
“I can name a couple of good finance folks, but I knew right away the one who would fit perfectly into the culture we wanted to build here,” she says. “You really have to be committed to making sure that you don’t have someone who might be very strong on the technical side but won’t add anything to the culture. But while you want everybody to identify with your culture and values, you don’t want to hire people who are all the same. So I don’t like to use the word ‘fit’ when it comes to culture. You don’t want to end up with 10 vice presidents who all have the same type of personality.”
Good team-building falls under the heading of “chemistry.” It’s a nebulous word when it comes to social interaction and what it means to have everybody working together. But somehow, the issue of chemistry must be addressed if you’re going to have a unified management team, and in turn, a unified, engaged and motivated company at large.
“At the end of the day, it’s up to you to make the call about whether a person is a good cultural fit or whether they simply bring the technical skills,” Hamilton says. “You could have the best people, but if they don’t fit with the culture and won’t get along with certain people, it weakens the team.
“You want to create a team that likes being together, a team that will look out for each other and have each other’s backs. Everybody has strengths and weaknesses, and if you build a team that is complementary, the job gets done, everybody plays a part and nothing falls apart because of a conflict or somebody’s weakness.”
How to reach: SugarHouse Casino, (877) 477-3715 or www.sugarhousecasino.com
The Hamilton file
Education: Degree in biology from Duke University; MBA in finance from St. Joseph’s University
First job: I sold saltwater taffy on the boardwalk in Ocean City, N.J. when I was 14 years old.
What is the best business lesson you’ve learned?
Don’t take it personally. Let me define that a bit. On one hand, people do their jobs well because they take it personally. However, some days you just can’t get a hit. And when things aren’t going your way, that is when you have to be careful to not lose enthusiasm. Sometimes, things are going to get tough and something is not going to go right. But especially in a leadership role, you can’t let it affect your energy and enthusiasm. You still have to project a positive attitude, because people are going to look up to you.
What is your definition of success?
Obviously, you need to be producing a quality end product. But for me personally, I want to be able to assume those things are happening. It sounds ridiculously simple, but success is when you as the leader have the people around you fulfilled and your employees are happy. You want an environment where people enjoy coming to work. That, to me, is when you can say you are successful in your role.