Thinkers solve problems.
Mark Zuckerberg found a better way to connect people with friends and family through Facebook. Larry Page and Sergey Brin invented a better way to search the Internet by creating Google. Steve Jobs showed us a better way to obtain and listen to music through the invention of the iPod.
None of these examples happened by luck. Each of these great thinkers spent a lot of time working to perfect their ideas. Great thinkers are not born, they are made.
To create great products and services, you have to develop the habit of expanding your thought processes and critical thinking skills. Why? Because the human mind tends to be lazy. It tends to repeat the same thoughts unless it’s trained to explore new ideas. Great thinkers put in the effort to analyze things in new ways and not accept the norm.
We live in a negative society where bad news trumps good news and the potential downsides of an idea outshine the potential rewards. It takes a lot of effort to retrain our minds to focus on the positives and the solutions rather than the ramifications of a failed idea.
Becoming a great thinker requires an investment of time; there are no shortcuts. You have to be organized and plan for it. Take time to think about the problems unique to your business or industry. Work through the pros and cons of any idea, looking for a way to make it work. Study competing companies and leaders and gain an understanding of how they think. It’s also helpful if you always do your heavy thinking in the same location, and it doesn’t have to be anything fancy. Some people do their best thinking in the shower or over a cup of coffee at a cafe.
But there is one major pitfall to avoid: Don’t equate change with new thinking. Just because you are changing something does not mean you are being a creative thinker. There might be several “accepted” ways of doing something within your industry, and changing from one of the accepted ways to the other isn’t doing anything different. The goal is to identify new ways of thinking and as a result, find a new solution to a problem that no one has thought of before.
Finding these unique solutions won’t be easy, but success never is.
There may still be sand in their cars from summertime beach trips. Once Labor Day has passed, however, it is time for your employees to stop practicing their paddle boarding and dive back into their duties at work.
Unfortunately, getting employees to snap out of vacation mode and renew their dedication to work can take some doing — especially after three months of being pulled in a million directions by activities and obligations (kids’ commitments, family reunions, picnics, weddings, summer camp, graduations and vacations, to name a few).
Workdays get longer while the hours of daylight get shorter. Your staff will need focus and diligence to catch up on some of the things they may have set aside. But the time off may have been more useful for you and your people than you might think.
You know how great ideas sometimes surface in the shower? Well, June, July and August are like a three-month long rinse. The combination of increased dopamine in the brain, the opportunity to relax and the many distractions during summertime months is a trifecta that science has shown to be a breeding ground for creativity and innovation.
Your employees may just find that once they return to projects they’ve stepped away from, there may be some new insight waiting to surprise them.
Here are a few suggestions to get the neurons and synapses firing in the right direction again:
Rank and file
Nothing is worse than walking into an office littered with leftovers from everything you’ve been working on over the past few years. Getting back into the game is much easier when you start with a clean slate — and an organized workspace!
Purge what you don’t need, prioritize what you do, and file the rest for safekeeping. Figuring out what to tackle first, and what can wait a few days or weeks, will help everyone take those first few steps toward actually getting some work done.
If you build it, they will come
One of the best things you can do is to build structure into the workday. Plan time to follow up on loose ends that need resolution, and schedule meetings to put deadlines to deliverables to help employees stay on-task and avoid distractions.
Meet with middle managers that have the most impact on employee engagement and come up with some creative compensation strategies for employees who bring their “A” game to the table right out of the gate. Encouraging a little friendly competition can help get everyone fired up for success.
Connect the dots
Your workers are struggling to refocus their energies as much as you are after summer vacation, give workers a boost by getting them together for an informal jam session about your business.
Ask for their insights and hear their ideas — you never know where inspiration for the next innovation will come from. With our energies more focused on friends and family during the summer, giving everyone the opportunity to reconnect and get excited about doing business together can do wonders for egging on enthusiasm and putting attention back on productivity.
No matter how passionate or motivated your employees, it is impossible to avoid the occasional slump or burnout, and summer vacation can sometimes only add fuel to the fire. Put a smart plan into place for getting everyone back on track and your well-oiled machine will be chugging to the top again in no time.
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. She holds an MBA from the University of Pennsylvania Wharton School of Business. She can be reached at firstname.lastname@example.org.
Work smarter, not harder: A look inside Michael O'Neill's philosophy for work-life balance at Preferred SandsWritten by Mark G Scott
Michael O’Neill doesn’t focus much on how hard his employees work each day because that’s not what he pays people to do at Preferred Sands LLC.
“What you get paid to do is to get results,” says O’Neill, founder and CEO at the 526-employee frac sand and proppant company. Frac sand is crush-resistant sand of a specific size that is used by the petroleum industry in the hydraulic fracturing process.
“People become wanderers,” O’Neill says. “You get people who work very hard and very smart, but they wander into other peoples’ areas in the company instead of focusing on where they are strong and what they need to get done. You have to keep getting them back to focus on their goals.”
It’s a tough problem because on the surface, it seems like what every leader would want: A group of employees pushing themselves as hard as they can for their employer. Employees are coming in early, leaving late and even taking work home at night, oblivious to the idea that it doesn’t have to be that way.
“You need extensive metrics in every area to help them focus,” O’Neill says. “Otherwise, conscientious people will be so dedicated to the company that they will work themselves to death because they have not been given good direction to realize they don’t have to do all the things that they are doing.
“You get lots of metrics and you pull these people in and say, ‘Look, I know you’re working hard. But I don’t know why you’re doing these five things that don’t deliver value. I’d rather you focus on this one thing and go home to your family.”
O’Neill has taken the time to build a culture that focuses on generating results, and it’s led to a business that generated $500 million in revenue in 2013. The key to that success is how he and his leadership team keep people focused on doing their jobs through metrics and to make the tough decisions when they need to be made.
Stay on top of your metrics
The effort to stay on target begins at the top at Preferred Sands. O’Neill meets with his leadership team every Monday and a regular topic is how the company is performing against its metrics.
“How are we doing well? How are we not doing well?” O’Neill says. “So the metrics say we’re not doing well in this area. You drill down and say why are we not doing well? Maybe we made some bad decisions on best in class. Maybe we haven’t made some tough decisions. Maybe we aren’t delivering value relative to the marketplace.”
It’s a systematic look back at all the metrics the company has set up such as the value of the company’s product, the conversion rate of sales calls and number of calls being made.
“You just walk through those metrics one at a time,” O’Neill says. “Are we collecting our bills? Do we have a company in trouble? You just drill down and peel back the onion and go through all those things. When you do that, you find some department isn’t functioning right.”
In this scenario, it turns out a department is being asked to do too many things at one time and important items are being missed. Here, it’s not your team’s fault because they were doing what they were told. Now it’s your responsibility to address the issue and live up to your belief in the value of working on the right job, not just working hard.
“You have competent people and they are working on these three things and maybe we did talk about that, but I didn’t realize as a CEO that we didn’t have the bandwidth to do that,” O’Neill says. “So that’s why you have those meetings. ‘My mistake, let’s drop that from the priority list and see if you guys can’t get this to work and let’s review it again next Monday.’”
When you focus solely on working hard, the result is a burned-out work force. When you focus on doing work that delivers value to your customer and earns revenue for your business, you have a stronger business.
“If my business is down, if we’re having problems, the first question I ask is are we delivering value for the customer?” O’Neill says. “If we’re delivering value for the customer, let’s double down because we’ll make a profit on that. If we’re not delivering value to the customer, then it’s the sunk cost theory. I don’t care what you spent on it, move on, drop it. You’re not delivering value. You’re just trying to push water up a hill.”
Make people delegate
One of the keys to having an efficient work force that stays on target with its metrics is having a good team of managers that can effectively guide their direct reports. They can encourage the people who are appropriately focused and steer back the ones who are veering off or spending too much time on other things.
“The two things managers tend to lack the most is the ability to make a tough decision quickly and the ability to delegate and insist the person they delegate to does their job,” O’Neill says. “What they typically do is they delegate to somebody and if he or she is too weak, they step down and start doing the work for him or her. It’s a huge leadership weakness, and we see it all the time.”
Just as you need to regularly look at your company’s metrics, you also need to spend a consistent amount of time developing the leaders in your organization.
“I always want to make sure the person we’re hiring could be the next CEO of this company or one of our other companies,” O’Neill says. “I tell them that, at any level. You could be and if you want to be and you’re driven to be the next CEO; I want to make it clear to that person that the opportunity will be there.”
O’Neill tells people that one of the most important things they need to understand as they advance is that they can’t do everything and will not advance by trying to do everything.
“Successful people have high expectations of themselves and when they become managers, they have to learn how to take that same expectation and move it to the people below them,” O’Neill says. “I’m not going to rely on myself to do this anymore. I have to rely on my team and transfer that self-reliance over to them. Therefore, I have to hold to a very high standard those that I hire and those that I keep, and I have to develop them.”
It again comes back to the idea that it’s not about working hard. It’s about doing the right thing and staying focused on what your role is in the company. When your managers advance, they need to know there are certain things they can’t do anymore and need to delegate to their replacements.
“I know I can’t scale without my managers learning to delegate to other people,” O’Neill says. “Otherwise, they’re going to be working 20 hours a day getting worn out and wondering why they aren’t getting any satisfaction.”
Dealing with conflict
Conflict avoidance is a big problem for many managers. Rather than deal with a problem head on, they try to avoid it or hope that it will just go away and resolve itself.
“So you identify a problem, but you don’t deal with it because you’re afraid that if you do, somebody is going to look bad,” O’Neill says. “So you let the problem fester.
“The reality is they would rather let the whole company go down and everybody gets run over by the bus because somebody in the organization is incapable of doing their job or is just not doing their job.”
This fear of confrontation can quickly become a major distraction from the goals your business has set forth.
“That now becomes your goal,” O’Neill says. “I don’t want to confront somebody. I don’t want someone to get hurt. What they don’t realize is you’re not going to hurt them. If they’re not in a good space, it’s not going to get any better by not addressing it. But it’s hard work. It takes stamina to always get up and say, ‘How do I refocus everybody on the goal?’”
When you promote this environment at a company level through weekly metrics meetings and you show that you’re willing to admit mistakes and make changes to keep everything on track, you encourage your managers to do the same.
“You run great organizations by being best in class in everything,” O’Neill says. “It’s how you define what is best in class and how you build a culture within your company of always looking for and relying on best in class that helps you get there.”
How to reach: Preferred Sands LLC, (610) 834-1969 or www.preferredsands.com
The O’Neill File
Name: Michael O’Neill
Title: Founder and CEO
Company: Preferred Sands LLC
Born: Merion, Pa.
Education: Bachelor’s degree in finance, Villanova University; law degree, Temple University School of Law.
What intrigues you about the law? It truly and thoroughly teaches you to problem solve. You’ve got a few hours to present your case and you’ve got to be thorough. That thoroughness of studying and outlining things and going down every avenue and checking the boxes, it’s really given me terrific insight toward problem-solving as it relates to business.
Who has had the biggest influence on your life? My parents. My mother was constantly focused on how to improve and how to get better. My father was a very hard worker and a very dysfunctional businessperson. So he was constantly scrambling in a dysfunctional world.
But no matter how bad it got, he had this ability to get up and go back to work the next day. He just had that stamina to always be the last man standing. No matter how bad it is, get up and go back the next day.
What one person would you really want to sit down and talk to and why? Peter the Great. He went around the world at a time when you couldn’t travel around the world looking for the best in class in everything, fashion, architecture, surgery, medicine, naval and army construction, commerce. He was unbelievable in his pursuit to find the best in everything and bring it back to Russia and bring that country into the present state at the time. You just wonder what made somebody so incredibly driven to do that.
Track your metrics.
Empower your employees, then let go.
Don’t fear problems. Face them head-on.
It used to be that only very large companies were doing business overseas. As more small and midsize companies enter the international marketplace, they must learn how to navigate tax laws related to conducting business in foreign countries.
“These tax laws are often broad and complex, and companies need to know how to minimize their combined taxes,” says Richard J. Nelson, CPA, director of Tax Strategies at Kreischer Miller.
Smart Business spoke with Nelson about what companies need to consider and how to manage the tax implications of doing business overseas.
What do companies need to consider in terms of taxes related to international business?
The first, and most important, decision is what to do regarding profits and cash from overseas operations. Are you planning to bring profits back to the United States right away or will you seek a deferral strategy that will leave cash and profits overseas for the time being? The answer to that question determines how overseas operations are structured.
A deferral structure is preferable when you want to keep profits offshore for a significant time and the foreign tax rate is lower than the U.S. tax rate. In order to defer U.S. tax, the foreign entity must be treated as a corporation for U.S. tax purposes. The goal is to move as much income as possible to this entity, and to defer U.S. tax until earnings are brought back here.
What problems do companies encounter with the deferral strategy?
Some pitfalls include matching of foreign tax credits, Subpart F rules and transfer pricing rules.
Proper planning is needed to ensure foreign taxes paid are credited to offset U.S. taxes. Subpart F rules, if applicable, make foreign profits taxable in the U.S., even if the earnings are not repatriated. Poor planning in these two areas could result in paying a higher overall effective tax rate on the same income.
Transfer pricing rules are designed to ensure that the transfer of goods from the U.S. company to the foreign company are priced fairly so the U.S. collects its fair share of taxes on the profit. If the Internal Revenue Service challenges your pricing, you could face significant penalties.
Does a non-deferral strategy pose pitfalls as well?
In a non-deferral strategy, the tax implications are not nearly as complicated. Generally, the foreign company is established as a ‘pass through’ entity, or you can check a box to have it treated as a disregarded entity or pass through entity. With this structure, the U.S. taxes the income of the foreign corporation and foreign tax credits are available to offset any U.S. tax on current profits. There are no additional U.S. taxes when the money is repatriated.
Under this scenario, you don’t need to be concerned about transfer pricing rules, at least from a U.S. perspective, or Subpart F rules. This structure provides the most flexibility and is well suited to U.S. companies that are S corporations with overseas operations.
Are there tax incentives for a U.S. company doing business overseas?
If you are selling products overseas that are manufactured in the U.S., you may be able to take advantage of an Interest-Charge Domestic International Sales Corporation (IC-DISC). You set up a separate corporation that makes an IC-DISC election and is, by law, exempt from federal income tax. A commission agreement is entered into between the related exporter and the IC-DISC. The related exporter pays the commission to the IC-DISC, which gets a 35 percent tax deduction. The IC-DISC then pays the commission to its shareholders, who are individuals, as a qualified dividend, which is taxed at 20 percent. The overall savings is 15 percent.
Can companies manage the various tax scenarios internally?
Because of the many complexities involved in doing business internationally, there is a lot of expertise required in planning a strategy to minimize the company’s overall effective tax rate. Seeking competent advice is crucial to avoid the many pitfalls that you may encounter when venturing overseas.
Richard J. Nelson, CPA, is a director of Tax Strategies at Kreischer Miller. Reach him at (215) 441-4600 or email@example.com.
Insights Accounting & Consulting is brought to you by Kreischer Miller
Anything published online lasts forever, so it is important to set the right tone for your company’s online communications and to mean what you say from the outset. You might try to retract or amend these public statements, but it is relatively easy to find prior versions, thus causing embarrassing or false statements to not truly disappear, says Christina D. Frangiosa, an attorney at Semanoff Ormsby Greenberg & Torchia, LLC.
“It’s safer to wait to publish materials to the Web until you have confirmed they are accurate, not misleading and not based on someone else’s intellectual property rights,” she says. “False statements about either your company’s products or about a competitor or its products could lead to lawsuits claiming false advertising, unfair competition or commercial disparagement. Misuse of the company’s or a competitor’s intellectual property can result in a loss of rights, or even, perhaps, an injunction or damages.”
Smart Business spoke with Frangiosa about avoiding legal mistakes on the Internet.
How should you handle statements about your competitors and their products?
Avoid knowingly making false statements about a competitor or the quality of its products. Publishing statements about them without appropriate due diligence could result in negative publicity for your company, corrective advertising costs or monetary damages.
How does cutting and pasting content from other websites create copyright concerns?
Many users have a common misconception: If they can find ‘free’ content on the Internet, then they must be able to use that content for any purpose. Just because content may be freely accessible does not mean that you have a right to use it. Copyright holders have exclusive rights, including the ability to choose to publish or not to publish their works; posting something on a public website constitutes publication. Copying and pasting someone else’s images, text or video into your company’s website without permission could expose the company to copyright or trademark infringement suits, among other claims.
How might misuse in social media undermine company trademarks?
Companies today use their websites and social media to communicate about their products or services. Specific employees may be assigned to prepare and/or post content. These employees should be informed about how to use the company’s trademarks to further develop the brand and maintain existing rights. If employees misuse these trademarks on the company’s sites, they may unknowingly undermine the value of the brand, and perhaps cause problems for trademark renewals or other filings.
Some employees may also use the company’s marks on personal social media. For example, an executive might use a company logo rather than a headshot on his or her Facebook page. Any statement made on these pages about company business could be seen as a formal company representation, and perhaps cause problems for the company with the Securities and Exchange Commission or other governing bodies.
What can you do to protect against these pitfalls?
- Create your own content, rather than relying on design elements you see on other sites. This may have a higher upfront cost but could reduce your litigation exposure in the long run.
- Seek a license to use any content in which you are interested, and pay the appropriate royalty fee for its use. There are organizations that accept those royalty payments on behalf of content owners.
- Obtain images, videos or other content from a valid image collection service, authorized by the copyright owner.
- Ensure employees understand the source of the content they plan to use before they upload it to the company’s site. They should be trained to avoid the impulse to right-click, ‘save as’ and then upload.
- Avoid using a competitor’s trademarks to advertise your own goods or services.
- Ensure employees understand the appropriate use of trademarks.
- Establish a social media policy that includes explanations of limits on use of the company’s trademarks.
Christina D. Frangiosa is an attorney at Semanoff Ormsby Greenberg & Torchia, LLC. Reach her at (215) 887-0200 or firstname.lastname@example.org.
Find about more about privacy and intellectual property law on Christina’s blog.
Insights Legal Affairs is brought to you by Semanoff Ormsby Greenberg & Torchia, LLC
When it comes to insurance, many customers feel they have no control over their price, product, how incidents happen, losses, etc. A properly constructed service plan mitigates this frustration.
James Misselwitz, CPCU, vice president at ECBM, says a service plan is something business owners should be asking their broker about upfront.
“They should say, ‘OK, you’ve given me this spiel on all the wonderful things you’re going to do. Now show me how you’re going to deliver it to me,’” he says. “‘Show me how you deliver it to your existing customers, and show me what happens when something doesn’t get done. Give me that blueprint, so I know I can depend on you.’
“There’s no question that somebody who doesn’t follow an active service plan with a broker will ultimately pay the highest premium out in the marketplace.”
Smart Business spoke with Misselwitz about effective service plans that help manage risk.
How do service plans create fail-safe procedures?
Although most brokers use some version of a service plan, many do not monitor and control it. A service plan is a client-driven method where business owners determine, along with a broker or agent, what services they need, how often they need it and who is responsible for delivering it to them.
Some services might be a review of market conditions before renewal; a review of the loss experience and current claim activity; a review of the outstanding reserves on claims that have already occurred; a review of information for the renewal like the current automobile schedule or payroll; and a tentative experience modification factor review that shows the impact of workers’ compensation on your renewal.
The service plan helps manage the insurance throughout each cycle of the policy. Both the company and broker know the expectations, and the plan can operate as a safeguard. When the broker doesn’t complete a claim review at six months, for example, a fully automated, computerized service plan notifies the underwriter by triggering an alert at the brokerage firm. At the same time, executives have a copy of the plan and can ask the broker about it.
What happens when service plans aren’t properly executed?
Things fall through the cracks. The insurance business is a deluge of paper and electronic messages, so it’s easy to lose a due date or report that needs to be run. If companies don’t actively manage insurance with the help of their brokers, they give up control of pricing, coverage, and losses to the whims and vagaries of the insurance companies and marketplace.
For instance, if your company doesn’t have a regular claim review on workers’ compensation activity, you could have a few large claims on reserves. You might not be working on action plans to mitigate those claims. So your renewal comes up, and it’s running a temperature with a poor loss ratio. Your insurer might ask for 40 percent more to underwrite the risk or send out a notification of cancellation. Now, you and your broker are scrambling to put together a response that will allow the underwriter to stay on a reasonable price.
With what types of insurance is a service plan most important?
With a commercial account, service plan diligence is most critical with insurance lines that have loss activity and when there is anticipated change. You want to automatically stay in control of critical items like losses, payroll, premiums, sales, etc.
Also, you need a service plan if there’s an anticipated change, such as a merger or expansion. It’s important to have the right coverage at the inception, as well as coordinating existing coverage so you’re not being overcharged because of overlap.
Why is flexibility key?
As a commercial insurance purchaser, it is important to develop a system with your broker that will deliver the service that you want and need. A service plan is one such system that can help you control costs and deal effectively with change, both in your operations and in the insurance marketplace. While flexibility is the key to tailoring a service plan for each business owner, it is the ability of the broker to audit the process that seems to be the critical element in making the program work extremely well.
James Misselwitz, CPCU, vice president at ECBM. Reach him at (888) 313-3226, ext. 1278, or email@example.com.
For more information about risk management, visit ECBM's blog.
Insights Risk Management is brought to you by ECBM
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com
Recently, I had the privilege of attending the EY World Entrepreneur Of The Year conference in Monte Carlo. I’m back to report that entrepreneurship is alive and thriving around the globe!
It was a whirlwind of a trip, packed with networking, thought-provoking panel discussions and personal interviews. We heard from a remarkable panel of speakers including Kofi Annan, former Secretary General of the United Nations and Nobel Peace Prize recipient; Sir Timothy Berners-Lee, inventor of the World Wide Web; John Cleese, award-winning actor, author, humorist and Monty Python legend; and many more.
I also had the opportunity to sit down with some of the world’s most accomplished entrepreneurs. These business leaders come from more than 60 countries that combined represent a staggering 94 percent of the global economy.
In this issue and in the months to come, you’ll learn what the world’s greatest entrepreneurs have to say about leadership, innovation, overcoming challenges, bringing their visions to life and much, much more. You’ll also hear from the leadership at EY as to the importance of celebrating entrepreneurship.
Transforming vision into reality
“Be careful about making assumptions. Those assumptions can lead you down a pretty dangerous path. It is OK to make assumptions and have confidence but you had better do your due diligence as well. An assumption is having those critical for the business make sure it is happening. I am very trusting of people and in the past have had some unfortunate instances where I did make assumptions about something and they were completely the wrong assumptions.”
Dr. Alan Ulsifer, CEO, president and chair of FYidoctors
“Growth obviously continues to be a challenge. The markets demand growth if you are a publicly traded company, and growth is a metric of how the business is doing. If you want to continue to attract the best people, attract the right sources of capital to your business, you have to demonstrate that things are going well and growth is one measure that people look to. I think that if you are a business in an established market, growth can be a challenge because those markets by and large are growing more slowly. So in order to get more rapid growth, many companies are looking at emerging markets and trying to figure out what their strategy should be for emerging markets, those that have double-digit growth potential.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group EY
“One of the toughest things for me was that people have a certain image of my country, Colombia. They don’t trust a company there to have good quality and do good work, but I am very proud to offer those qualities from Colombia. It is not easy but it is something that you can accomplish. I have been down a lot of times, but the good thing I have noticed is that every time something like that happened, I have been able to obtain positive things out of it. I have been broke multiple times, but from being broke I have been able to learn from it and rebuild.
Mario Hernandez, founder and president, Mario Hernandez
Jim Turley leaves his post as Global Chairman and CEO for EY with deep admiration for the entrepreneurs who continue to use their vision and spirit of innovation to change the world.
“They have got this wonderful ability to think outside themselves, to look at the world outside these windows and see the needs that exist out there,” says Turley, who officially retired on July 1.
“Then they’ve got a vision to create a product or service or an idea to meet the need they have seen. They have got the courage to risk everything and they are as persistent as can be. Most of them fail the first time out. But they get up, clean themselves off and do it again.”
“Work carefully with a few people who get a twinkle in their eye. If you talk about your idea, some people will respond with excitement because they get it, but not everybody. Maybe you talk to 300 people and three people will get it. Work with those three people. The web took off because a few people all over the world got it. You get the support from a few people who get it and then it builds from there.”
Sir Tim Berners-Lee, creator of the World Wide Web
Corey Shapoff has a job that many would envy, booking well-known musical acts such as Maroon 5, Katy Perry, Christina Aguilera and Kelly Clarkson for live concerts and private corporate events. But he doesn’t take much time to stop and think about all the famous people on his call list.
“I’m a grinder,” says Shapoff, president and founder of SME Entertainment Group. “I’m the kind of guy who is always looking to what’s next. You’re only as good to me as your last deal.”
It’s that instinctual drive to always try to do it better that is embedded in the true entrepreneur and allows the next vision to become a reality.
“It’s hard for me to turn it off and say, ‘That’s great,’” Shapoff says. “I’m always thinking about tomorrow. You just can’t take things for granted in our business.”
“The skill sets of an entrepreneur involve understanding how to create business. So if you’re going to give back, why not work with kids who need it the most and actually teach them and help them to be entrepreneurs. That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”
Amy Rosen, president and CEO, Network for Teaching Entrepreneurship
“When you’re an entrepreneur you feel like you have never met a deal that you didn’t like. You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”
Jim Davis, president, Chevron Energy Solutions
“It’s important that you have teamwork and all your top players are well motivated with passion, principles and values. We make sure that people know where we are going and what our main objective is for that year. We promote teamwork inside and outside the company. Our directors have to make sure they are sharing our company values and principles with each of their team members.”
Lorenzo Barrera Segovia, founder and CEO, Banco Base
“For entrepreneurs you get a great idea, you start your business and then you have to keep focused. Keep executing that idea if that idea is big enough. Never fall into the temptation of getting out of your business or change it unless it’s strategic. Secondly, try to get financing as late as you can. Never get financing as soon as you can. Thirdly, create a great team and culture, because that’s what will prevail and create value for shareholders and your community. That’s how you scale your business. The last one is to dream big.”
Martin Migoya, CEO, Globant
“It was nothing but a gut feeling. The only thing I knew was there was a big opportunity in yogurt. I grew up with yogurt. Being from Turkey yogurt was a big part of our diet. I wasn’t sure if I could do it – break through in the world of yogurt in retail.
The category was owned by two major companies; Dannon and Yopliat owned about 70 percent of the market, and they had been there for years. As a startup you go to the specialty stores first. That’s how you start and you grow and once you reach a certain level then you go to the big retailers.
I didn’t want to do that. I wanted to go to the big retailers and be in the regular dairy aisle. That was a crazy idea and nobody thought that would go, but at least we tried. When we tried, we convinced one retailer in New York, ShopRite. The result from that was we were able to expand to a couple of other retailers. After the second or third customer that we had success with for our yogurt, I knew it wasn’t going to be about selling, it was about making enough.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
One of my favorite business books, which also made it as a Broadway play and a big-screen movie, is “The Wonderful Wizard of Oz,” written by L. Frank Baum in 1900. My hero in this story is not the young orphaned Dorothy, nor the Cowardly Lion, the desperately in-need-of-some WD-40 Tin Man, nor even the Scarecrow in search of a brain.
Instead it is the Wizard. To understand why the dubious Wizard is my favorite character, one must get past the portrayal of him as scheming, phony and at times nasty.
To appreciate the man behind the curtain, recognize that he is a very effective presenter, though at times this ex-circus performer behaved a bit threatening. OK, he was a jerk, but the point of this column is to take you down the yellow brick road on the way to the enchanted Emerald City and corporate success.
From this tale there is a lesson that one can say all sorts of things, not be visible, and yet still have a meaningful impact.
Another takeaway is that playing this role provides plausible deniability. This absence of visual recognition is particularly beneficial in negotiating when you, as the boss, use a vicar, aka a mouthpiece, to speak on your behalf. This allows you to have things said to others that you as the head honcho could never utter without backing yourself into a corner.
Another plus is you can always throw your mouthpiece under the bus if necessary, of course, with his or her upfront understanding that sometimes there must be a sacrificial lamb. This is not only character-building for your stand-in, but also many times presents an unprecedented opportunity for him or her to learn in real time.
Perhaps the Wizard was the first behind-the-curtain decision-maker, but today this role is used frequently in business and government. In a similar vein, the “voice” of Charlie from the well-known 1970s TV series “Charlie’s Angels” was always heard, but he was never seen.
Frequently there is much to be said for using anonymity to float a trial balloon just to get a reaction. Think about a son having his mom test the waters by talking to dad before the son tells him he wants to drop out of junior high school to join the circus. Maybe that’s even how our former circus-drifter-turned-Wizard-of-Oz got his start.
In the negotiating process it is important to have a fallback when the talks hit a rough patch by instructing your vicar to backpedal, saying that he or she has just talked to the chief and the benevolent boss said, “I was overreaching with my request.”
This also serves to build a persona for the boss-behind-the-curtain as someone who is fair-minded and flexible. All the while, of course, it’s the boss who is calling the shots and maneuvering through the process without getting his or her hands dirty.
The value of using this clean-hands technique is that it enables the real decision-maker to come in as the closer who projects the voice of reason, instead of the overeager hard charger who at times seems to have gone rogue.
It actually takes a bigger person to play a secondary role behind the curtain rather than always be in the limelight. It also takes a hands-on coach and counselor to maneuver a protégé through the minefields to achieve the objective.
However, accomplishing the difficult tasks through others is true management and the No. 1 job of a leader who must be a master teacher.
After you have guided a handful of up-and-comers a few times through thorny negotiations, you will gain much more satisfaction than if you had done it yourself, while engendering the respect and gratitude of your pupils. They in turn will have learned by doing, even though they were not really steering the ship alone.
The final step is to let the subordinate take credit for getting the big job done. This will also elevate you to rock star status, at least in his or her eyes. Soon those who you’ve taught will emerge as teachers too, and the big benefit is that you will populate your organization with a stellar team of doers, not just watchers.
So, forget about the Wicked Witch of the West and move backstage for the greater good of the organization.