As a former NFL quarterback, Ron Jaworski knows a few things about leading a team.
In fact, during his 17 years in the league, he developed characteristics that he now uses as owner and CEO of Ron Jaworski Golf Management Inc.
Among the traits Jaworski says every great leader must possess are a strong work ethic, passion and enthusiasm. Traits you also want in employees.
“The key to employees is finding those people who share the same values,” he says.
To build a successful company, everyone on your staff must embody similar philosophies. Jaworski has been able to grow his golf management company to 300 employees and $10 million in revenue. He’s accomplished that by making good hires and motivating employees.
“It’s imperative that the leadership should be involved, the owner of the company or a principal of a company be involved, particularly in (hiring) those key positions of managers, assistant managers,” Jaworski says. “I must come out of that interview process believing that they have the same goals and aspirations that I have that we see the business through the same eyes.”
Jaworski uses a straightforward method when it comes to gauging whether or not the candidate’s work ethic matches the company’s needs. Of course, he looks at the resume and drills through the normal list of questions about experience. But he also asks if they have hobbies or participate in athletics. That question leads to a better understanding of the person’s social background of interacting with people and gives light to their passion and work ethic.
“People that have been involved with athletics are used to working hard,” Jaworski says. “They’re used to being coached. They’re used to being trained. They’re used to having thick skin.”
Once you have the right employees on your team, you need to create a motivating environment. Jaworski provides team building exercises, such as softball games, and communicates regularly and thoroughly.
“You hire the right people, you train them appropriately and then you let them go and monitor their performance,” he says. “If you micromanage people and question everything that they do, then you lose them, you don’t empower them. And I’m a big believer in celebrating the small wins along the way.
“You need to celebrate those victories, those short-term goals that you achieve so that you keep your people inspired.”
How to reach: Ron Jaworski Golf Management Inc., (856) 232-8215 or www.ronjaworskigolf.com
How to use a disease management program to reduce health care costs and create a healthier work forceWritten by SBN Staff
Many employers who are watching their group health insurance premiums increase are asking obvious “what if” questions: What if my healthy employees could stay healthy? What if my unhealthy employees didn’t get sicker?
And health care professionals are asking, “Why not?” says Dr. John Wallendjack, vice president of Medical Affairs for HealthAmerica. “Why not change the focus of health care from illness to wellness, from high-cost treatment to low- or no-cost prevention, from passive patient to self-care participant? The health care approach that resulted from this questioning is called disease management.”
Smart Business spoke with Wallendjack about how employers can use disease management to address cost and quality concerns.
What is disease management, and how does it affect the cost of health care?
Disease management is the process of reducing health care costs and improving quality of life for individuals by preventing or minimizing the effects of a disease, usually a chronic condition, through integrative care.
What has driven the increasing interest in disease management?
Two developments have served as catalysts for the increased interest: the unsustainable rise in health care spending and advances in information technology.
The numbers help explain why early prevention and disease management are necessary. Health care costs have been rising for years and will continue to do so. The Office of the Actuary in the Centers for Medicare & Medicaid Services projects that from 2009 to 2019, average annual health spending growth, at 6.1 percent, is anticipated to outpace average annual growth in the overall economy, at 4.4 percent. By 2019, national health spending is expected to reach $4.5 trillion and comprise 19.3 percent of the nation’s Gross Domestic Product.
The nature of health care in the U.S. has changed dramatically over the past century, with longer life spans and greater prevalence of chronic illnesses. The Centers for Disease Control and Prevention estimates that health care costs for chronic disease treatment account for more than 75 percent of national health expenditures. As the baby-boom generation ages and develops chronic illnesses, boomers will use more health care services.
Second, technological advances are making the disease management concept more achievable. The ability to collect and analyze patient data using information technology has resulted in major improvements to the health care delivery system. This has allowed for significant strides in the creation of effective disease-management programs. IT makes it possible to determine the health risks of individuals, as well as of entire populations, and track treatment, outcomes and costs.
Once a patient’s information is in the system, it can be accessed by health care providers to coordinate care and avoid medical errors. IT helps identify health care best practices and monitor their use, and it’s behind many of the quality comparisons consumers can access to evaluate health care providers and hospitals.
How does a successful disease management program work?
Research-based guidelines are at the core of successful disease management. Simply put, they are recommended standards of treatment based on scientific evidence. The Federal Agency for Healthcare Research and Quality works with many groups that collect existing research on treatments for medical conditions, rate the quality of the research and report the accumulated scientific findings. That information is used by other professionals to develop guidelines.
Health care providers improve quality not only by practicing evidence-based medicine but also by reporting their results with patients and contributing to research. In that way, quality begets more quality.
What role do employers and health insurers play in disease management programs?
Health insurers must continue their leadership role in driving quality up and costs down. Employers who partner with health plans that have disease-management expertise make an investment in the health of their employees.
To determine how strong a partner your health insurer is, look for features such as:
- Intervention: This ranges from reminders about required care for high-risk patients to enrolling patients with chronic diseases into disease-management programs.
- Coverage of health screenings: These can detect disease early and include colonoscopies, Pap tests, mammograms, and cholesterol screenings. The tests must be affordable.
- Patient education: Such efforts teach high-risk patients how to minimize their risk of disease by changing risky health behaviors. The plan should provide tools for change, such as interactive Web sites and low-cost or no-cost health education opportunities.
- Workplace education: The plan should provide onsite health education targeted to the health needs of employees, include a health-risk assessment tool for employees to learn about their risk factors and conduct health screenings at the worksite.
- Research-based guidelines: The plan should work to discover the most effective preventive measures and treatments, and these should be communicated to and followed by all plan providers.
- Quality measurement: The health plan’s clinical guidelines should translate into better health for plan members.
What can employers do to determine if disease management is right for them?
Employers should ask themselves, ‘Am I concerned with health care value, not just costs? Am I attentive to how I can improve my employees’ health while they’re on the job? What about during their off-hours? Am I willing to invest in long-term benefits?’
If you answer yes, you are joining the list of employers seeking to lower insurance costs and produce a more productive work force through disease management.
Dr. John Wallendjack is vice president of Medical Affairs for HealthAmerica. Reach him at firstname.lastname@example.org.
What the chairman, president and CEO of Aqua America Inc. has had to endure is rapid growth the ultimate double-edged sword of business. Rapid growth means rapid success, but it can also mean outgrowing systems and processes way too quickly, creating more problems than it solves, both financially and culturally.
Most of Aqua America’s growth was due to a series of large acquisitions in 2005 and 2006 that greatly increased the municipal water system management company’s presence in the southern U.S., raising the total number of states in the company’s footprint from six to 13.
“Normally, utilities grow at 1 percent,” DeBenedictis says. “We have grown at 50 percent over the past few years. That gives you an idea of the size we’re dealing with. We had to get systems in place, people in place and change out management. The digestion period was one of our big challenges and overlaying that was the recession, the credit crunch and everything else that was happening as we were trying to grow.”
Managing water utilities is a capital intensive business. While Aqua America generated $670 million in 2009 operating revenue, the company is also slated to pay out $300 million in capital improvements to their water systems this year.
On top of managing a high-volume flow of cash, DeBenedictis is also in charge of maintaining and promoting a service-oriented culture to the company’s 1,800 employees.
The capital investments and culture are the two main prongs in Aqua America’s mission to build lasting relationships with customers. Water utility customers can’t choose what company supplies water to their city, but many cities have a choice as to who provides their citizens with water service. If Aqua America doesn’t maintain an impeccable customer service reputation, future growth opportunities might be harder to come by.
“You want to make sure that you have happy customers in any case, not just begrudging customers,” DeBenedictis says. “That’s why we wanted to make sure we had good people and good systems in place. In many cases, the reason we were able to acquire a company was because that company didn’t have good management. We’ve had to come in and make nearly a 100 percent change to first-, second- and third-level management.”Promote your culture
If you want to have a strong culture as you grow your business, you need to start with strong communication. In the aftermath of the 2005 and 2006 acquisitions, DeBenedictis rolled out a plan that would drive communication down to the ground floor of the company, and do it level by level.
The go-to person in DeBenedictis’ plan was president of each state’s operation. Aqua America has an operations president for each of its 13 states. That executive is charged with having an ongoing and detailed knowledge of the markets that Aqua America is serving in the state and how to best meet the needs of customers.
“The state president is a person I normally select myself, and we usually get a person who has been a star in another state to take on the challenge of having their own state,” DeBenedictis says. “That person basically lays the groundwork for the organization and the people they need, whether the people currently in the company are the right people or if there are changes that need to be made.”
In acquisition scenarios, DeBenedictis and his leadership team try to keep as many executives in place from the acquired company as possible, since they have already built relationships with employees and customers. If the existing state-level leaders can be kept in place and educated on Aqua America’s culture and processes, that is the best-case scenario. However, there are times when the existing managers simply can’t mesh with Aqua America, and DeBenedictis needs to move quickly.
If you don’t remove people who can’t or won’t see eye-to-eye with your strategy particularly if they occupy influential positions it can damage your culture and your ability to serve customers.
“We try to keep as many of the original people as we can, but if the culture doesn’t work, you can’t take too long to make the changes,” DeBenedictis says. “If people just don’t understand a corporate philosophy, if they’ve always been a part of a small business, they’re probably not going to understand how we do business, and they’re not going to be productive or happy.
“It’s the people who take up with us very quickly, who like the idea of being with a bigger company with more dollars to spend, those are the people we like to keep. Those are the people who are going to know our type of business.”
Promoting a culture to a new group of employees is primarily the product of two factors: managing by example and managing by data. Managing by example means you set the cultural example yourself placing an emphasis on customer service and high quality standards with your own actions. It also means highlighting the people in your organization who exemplify your cultural values by putting them in places where they can influence the values and behavior of others.
Managing by data means you set a plan of action that includes well-defined goals, and then using metrics to ensure that your managers and employees are meeting those goals. If your company isn’t hitting targets whether they be on a companywide level or further down the ladder it can be damaging to culture every bit as much as a high-ranking employee who isn’t sticking to the plan.
“You have to know that you and everybody else in the company should lead by example,” DeBenedictis says. “They’ll see how you operate and realize that this is how they should operate, as well.
“Managing by data is critical, as well, because you can’t do it all by instinct. As engineers, we learn to listen, analyze and then set a plan of action. Our assets are 100-year assets, so we can’t just do it by instinct. We do a lot of studies and data, and then make huge investments.”
Your biggest allies in developing, sustaining and promoting a culture will almost always be your long-term employees. Your staff members with the greatest company longevity have an extensive knowledge of your processes, your core values and why it all makes sense for your company. Compensation and benefits play a role in reducing turnover and increasing your numbers of 10, 15 and 20-year employees. But aside from that, committed employees will often groom other committed employees.
“We want our people to feel like if they want to work for a company like ours and they want to do a good job, they can be employees for life,” DeBenedictis says. “That is very rare in today’s world. You have to expect that employees should want to be with you for a long time, find their potential within the company. That’s why a part of our culture is entrepreneurship but also consistency and a reward for professionalism.”Impress your customers
There are many little ways you can impress customers and keep them loyal as your company grows and changes. You can mail coupons or throw in some loyalty discounts for long-standing customers. You can take the time to get to know their names and learn enough about them to strike up a conversation when you see them.
All of those tactics help. But there is only one true way you can build loyalty with customers: fulfill your promises. Do what your mission statement says you do.
At Aqua America, DeBenedictis has made reliable water service the No. 1 priority. With a water utility provider, there isn’t much else to guarantee besides faucets that run and toilets that flush. But when the faucets don’t run and the toilets don’t flush, customer attitudes and confidence can wither in a hurry.
“The No. 1 issue is we get in there and start fixing their system right away,” DeBenedictis says. “The key is that customers see the difference you make early on. For us, it might be a new water plant, fixing leaks, improved water pressure. If we do those things, we get good customer feedback because we got right in there and fixed those systems right away.”
If you want your employees to place an emphasis on customer service, you need employees who realize that they’re not working just to make the delivery or produce the product or balance the budget. They’re working, in their own way, to satisfy your customers and keep them coming back.
Once again, it comes back to culture and what you emphasize as a leadership team.
“If you give people a place where they want to work for life, they’re going to come to you with the mentality of being a professional,” DeBenedictis says. “Then, they’ll say that their job isn’t just to make the repair, it isn’t just to put the pipe in the ground correctly, it’s to make sure the customer understands what is going on and why, and that they’re happy with the job we are doing.
“We get a lot of letters from customers when our employees go above and beyond the job they were asked to do such as, they went to someone’s house on a service call and found another leak somewhere else and fixed that. If you broadcast those examples, people start to know that their job is to make the customers happy. That is something that really has to be a part of the culture from the start.”
Once again, you need to turn to your long-term employees to set the pace for customer service. When your long-standing employees hold others accountable for maintaining the reputation of the company, it’s a positive form of peer pressure.
“If you’re in a company that doesn’t have a lot of turnover, the peer pressure gets to be important,” DeBenedictis says. “The reputation of someone who has been at the company for 25 years is at stake, and then you’re bringing in a new person who might not be doing things up to their standards. That’s when employees can affect this. It’s peer pressure as much as it’s discipline or anything else.”
If you don’t have a customer-focused culture or if you can’t adequately project it to your customers, your company’s reputation will start to suffer. It’s an ongoing battle, and you need as many allies as you can find.
In the end, you are the company your customers think you are and you are the type of leader that your employees think you are.
“Most people don’t know where the water plant is in their town,” DeBenedictis says. “They just know that water comes out of the faucet and goes down the drain. They don’t know where it comes from or where it goes. But they see the trucks out on the street, they see us digging up and replacing old pipe, so they see that we’re making that investment in them and that we’re trying to build a long-term relationship with them and their towns.”
HOW TO REACH: Aqua America Inc., (877) 987-2782 or www.aquaamerica.com
The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?
It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”
That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.
But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around than to tighten the budget. The same rule applies now, too.
“I would like to think training could help the company achieve its business objectives,” says Mark Spool, owner and president, Management Development Solutions. “The way you think of that is through the skill set of the employees and the leadership of the company.”Make a plan
Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.
They wanted to know, before they embarked on another training session, whether another training session was actually necessary.
This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.
“What we typically suggest is start by performing a needs assessment,” says Waverly Coleman, assistant dean, Division of Business and Technology, and executive director, Corporate Solutions, Community College of Philadelphia. “One easy way to do this is trying to sit back and looking at where the problems are [that] the organization is facing.
“Then, sort of peel away layers of the onion, so to speak, in terms of trying to identify the root causes of these problems. Once we can identify the actual problem, what we look at are the skill levels of the individuals involved.”
And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus. Leadership development, project management and team building are all increasingly important because of the changing demographics and economy and because general communication and technology skills are as important now as always.
“Do questionnaires or do focus groups or interviews, review the employees’ performance appraisals,” Spool says. “It’s certainly understanding the business and therefore business strategies and objectives and looking into the future. What are the implications of the business in the future in regards to the skill set that is needed?”Open your wallet
Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.
Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.
“That’s an average, not a recommendation,” says Pat Galagan, executive editor, ASTD. “In that pool of companies, some are large, some are small, some are government, some are private.”
Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development.
There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.
“Companies ought to be focusing more on how their employees can learn from experience,” Spool says. “It’s been proven to be the most effective and it’s got to be the most cost-efficient.
“As long as a company continues to offer stretch assignments and grow employees and links their job with their own personal growth, you’re much more likely to retain them, let alone improve their capabilities.”Keep an eye on results
At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.
The training had not been the problem at all.
In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training and the worst might have been the money that was about to have been spent unnecessarily correcting that training.
“Companies don’t want to send people to training and also pay for the training if they don’t have some level of assurance that training is having a return on investment at that organization,” Coleman says.
The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.
“An organization’s employees are really their most valuable resource,” Coleman says. “The investment they make in human capital is really going to pay great dividends down the road for that organization in terms of helping them become even more competitive in a global marketplace.”
The intentionally defective grantor trust has become a popular estate planning tool. If structured properly, a grantor trust can be treated differently for income tax and gift and estate tax, creating planning opportunities, particularly when used with other wealth shifting techniques.
Smart Business spoke with Richard Nelson, director of the Tax Strategies Group at Kreischer Miller, about how a defective grantor trust works.
How does an intentionally defective grantor trust work?
An intentionally defective grantor trust (IDGT) is an estate planning tool used to shift wealth by removing an appreciating asset from an individual’s estate without creating a taxable gift. It also removes future appreciation from estate tax.
The trust must be a grantor trust and also irrevocable. If properly structured, the trust will be disregarded for income tax purposes and the trust’s income or deductions will be taxable to the grantor (individual creating the trust).
The IDGT will be treated as a grantor trust if it fails one or more of the grantor trust rules found in the Internal Revenue Code.
Generally, if the grantor retains sufficient control over the trust and the trust assets, it will be treated as a grantor trust even if irrevocable.
Two of the common drafting techniques used to ensure that the grantor trust fails the rules is to give the grantor the power to reacquire the trust property by substituting property of an equivalent value or by giving an individual the power to add to the trust additional beneficiaries.
These powers should result in the grantor being treated as the owner of the trust for federal income tax purposes but not for inclusion of the asset for estate tax purposes.
Generally, once the trust is created, the grantor would sell the asset to the trust in exchange for a note generally an installment note. The asset must be sold at its fair market value and an adequate interest rate must be charged on the installment note.
When using an installment sale it is essential that the asset sold to the trust is not the only source of payment regarding the note.
Once the trust is created, and prior to the sale, the grantor must gift cash or other assets with a value of a minimum between 10 percent and 20 percent of the value of the asset being sold in exchange for the installment note.
How does this create tax and estate planning opportunities?
The sale of the appreciating asset to the IDGT is not taxed to the grantor for income tax purposes. This is because, for income tax purposes, the grantor and the trust are treated as one.
As a result, both the note payments as well as the interest payments made to the grantor will not be subject to federal income tax.
At the end of the trust’s term, the trust assets will not be included in the grantor’s estate. The assets, as well as any appreciation, will pass to the trust’s beneficiaries free of tax.
If the grantor dies before the note is paid, only the unpaid balance of the note is included in the grantor’s estate. Any appreciation in the value of the trust assets goes untaxed.
During the term of the trust, any income earned by the trust on the assets held by trust is taxed to the grantor. For an additional benefit, the grantor should pay the income tax on the income earned in the IDGT from other sources held by the grantor.
This results in an additional reduction in the grantor’s assets for estate tax purposes and also increases the assets passed to the beneficiaries.
What are some other benefits that the IDGT provides?
The assets sold to the IDGT should have the potential of substantial appreciation. If those assets are, for example, an interest in a closely held corporation or a limited partnership interest, those assets may be valued at a discounted value and be deemed sold at fair market value.
Discounts may be taken for lack of marketability and for lack of control. Thus, the value of the asset sold for a note may be significantly reduced via discounting.
However, it should be noted that the IRS has in the past challenged unusually large discounts.
Is the defective grantor trust for everyone?
IDGT’s are not for everyone. IDGT’s are not specifically supported by any specific Internal Revenue Code sections. The planning techniques are based on interpretations of IRS rulings and case law. They are not IRS risk free.
Individuals who are not risk adverse must carefully consider the potential downsides in their planning.
In addition to considering the federal tax consequences, individuals should check their respective state statutes regarding grantor trusts. Some states do not recognize grantor trusts and, therefore, the sale to the trust of the potential appreciated asset would be taxed by the state either at the time of the sale or as the payments are received on the installment note.
Also, the rules are different in community property states, so individuals should obtain competent assistance in planning, structuring and implementing an IDGT.
Richard Nelson is the director of the Tax Strategies Group at Kreischer Miller. Reach him at (215) 441-4600 or email@example.com.
Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.
Imagine an office where health and wellness are a priority.
Is this anything like your office? It should be. Perhaps it will be during the months and years to come.
There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.
Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.
“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way that it is valuable, that you want to retain your highly valuable and efficient people you want to allow people to be at their job and functioning well.”
If you do not have a program up and running, pun intended, at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there is an impressive return on the investment, especially after a year or two.
But you have to plan and install the program first.Take the first step
Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.
But why do you want to install a wellness program?
There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.
“Often, our first presentation is with the president or CEO or owner of a company to make the business case for wellness,” says Jennifer Grana, director of health promotion, Highmark Inc. “And absolutely, that interest, that motivation has to be there for it to get off the ground, and sometimes, that message is more efficient coming from a physician.
“That is a key to success. If you don’t have the support of the owner of a smaller business or of midmanagement in a medium-size company, it is very hard for a wellness committee to achieve their goals and to drive interest in the program.”
And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.
HRAs and biometric screenings highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.
HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.
“The reason why higher participation is important is because the more people you have participating in a wellness program, the better chance for that behavior change,” Grana says. “And that change in behavior over time is where you’re going to see the impact in the health care cost trend.”
That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All those figures are available and can help lay the groundwork for what you need to know to start a wellness program.Consider an outside company and your employees
When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.
But you might not want to keep that plan under your own roof.
Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?
“Typically, for smaller groups and middle-market groups, we do work with human resources or management in the human resources or benefits department,” Grana says.
No matter your choice on that matter, your employees do need to feel a sense of inclusion in, perhaps even some sliver of ownership of, the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.
The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts. Some businesses opt for duffel bags and water bottles for their employees to take to the gym or larger incentive prizes like a raffle.
“Incentives are a huge driver for participation, and it doesn’t have to be a big incentive,” Grana says “We just tell our groups it just has to be a meaningful incentive. What we’ve seen from programs with higher participation percentages is that they tied incentives to their benefit design. But we’ve seen great participation with meaningful incentives that are meaningful to a certain population. We’ve had some manufacturing companies where they were raffling off a truck, something like that that gets the morale and motivation up.”Monitor results and look forward
The fruits of an effective wellness program will take some time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.
Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”
Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.
“You want to look for those success stories and those testimonials, because those often help to engage the employees more than the savings,” Grana says. “You want to make it personal for them, you want to make them feel valued, and that leads to more productivity.”
And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.
Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year thanks to employees being able to work more hours and to a possible decrease in health care costs but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.
When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.
“If you believe in the value of your human capital and you want to keep the people who are healthy now healthy in the future, then keep them engaged,” Martino says. “Keep them happy at work.”
MBA programs are changing just as much as the professions that they service. Tom Kennedy, director of MBA program and assistant professor of business administration at Delaware Valley College, says there are several major challenges that have forced the change.
“A lot of people have MBAs that were used to enter into investment banking and consulting careers, and the economic collapse has created a lot of questions about our curriculum,” Kennedy says. “Another challenge we face is that a lot of people are recruiting people without MBAs because they’re concerned about trying to retain them. Some people even think an MBA is a waste of parchment. Many people are starting to worry that the business school professors are more concerned with theory than with practical application.”
Smart Business spoke with Kennedy about how MBA programs have adapted to face these new challenges.
What steps can MBA programs take to meet the current challenges?
We need to revitalize our curriculums to make them more practical in application. We have to rely on the professors reworking their curriculum and syllabi to reflect that.
That’s important, because customers are requiring a shorter learning curve.
The cost of business today requires that, if executives hire you to join their business, they are expecting you to be able to jump right in and start helping the business right away.
The training cycles have been shortened. Businesses expect people with an MBA to be able to integrate into their company and think very quickly about big-picture implications, whether it’s in finance, accounting, marketing or operations. That’s the essence of a generalist MBA degree. Because of your education, you can break down those silos of business and look for the strategic solution the corporation is searching for.
In the graduate division and MBA programs, we are constantly looking at ways we can meet the market’s needs quicker, be more flexible and produce a real, value-added curriculum based on practical applications.
The academic world can be remarkably flexible. Graduate schools are evolving all the time. You’re going to see much more integrated curriculums going forward.
We’re at a crossroads, too, just like the organizations that we serve.
The final component is the ever-increasing awareness and need for getting the students out in the global marketplace. As companies become more global in their perspective and operations, MBA programs need to reflect this.
How are courses fighting the perception that they focus too much on theory and not enough on the practical?
One way is by doing more consultant work for local companies instead of the traditional case study management. Case studies mostly revolve around things that have happened already.
Forming consulting partnerships works especially well with small or medium-sized enterprises. The company comes in and explains its business problem to the students. Then, they begin to work on it and present their solutions to the company.
Helping small or medium-sized companies in real time makes the learning process livelier, timelier and more integrated.
The students can help them with anything from developing a marketing plan to a business plan. Sometimes nonprofits need help, as well, so MBA students can step in and provide consultancy to those companies to provide another perspective and another set of eyes to look at their situation.
It reinforces the idea of practical application. Here’s a real-world situation; chew on it, and present the company with alternatives to find solutions.
How can an MBA prepare executives-in-training for globalization?
One way is to send MBA students on study tours. The students get immersed in a country, and executives from the country they’re visiting talk to them about the challenges and issues they face. The use of telecommunications technology, such as Skype, to broadcast back and forth with other businesses is another way.
Third, some faculty works jointly with other colleges or universities to give the students a blend of what they need to know. For instance, I also teach at the University of Ulster in Northern Ireland, team-teaching with another professor on international marketing classes.
Americans need to understand more about how relationships are built because that’s the primary driver in global business. Americans are used to purely transactional activity. But you have to develop a relationship with people before they’ll do any business with you. We try to reflect that in our lectures.
That helps Americans understand there are different aspects and ways of doing business. You have to understand the cultural implications, the economic implications and the political implications. There is no better way to see that than to go out there, touch, feel and sense it. That really adds value to their education.
Down the road, when they get into situation where they are in a room with fellow professionals from Europe or Asia, they will have a sensitivity and awareness of where they’re coming from with their perspectives. That’s a huge challenge, harnessing those global employees into one team. It’s critical for the executives of the future.
Tom Kennedy is the director of MBA program and assistant professor of business administration at Delaware Valley College. Reach him at (215) 489-2322 or Thomas.Kennedy@delval.edu.
It was February 2009, and Enslin had just taken over as the president of SAP North America, the 10,000-employee, Philadelphia-based wing of global software solutions provider SAP.
The trouble was that Enslin was taking over the ship in the midst of a hurricane. The economy was faltering, and along with it, employee confidence was shaken as SAP swam against the economic current, attempting to build and maintain the customer relationships that supply the company’s lifeblood.
But in order to maintain a presence with customers, Enslin and his leadership team needed to ensure that employees across North America were not only on board with the growth-oriented vision and direction of SAP but also confident that the vision would be realized.
“I started doing town halls,” Enslin says. “I went to Chicago, Palo Alto, Dallas, Houston, and I just got in front of every employee with the same message and vision, just to let everyone know where I was. It was important that I got on the road, because when you try to communicate that type of message through a conference call, the dynamics of the interface are missing. People needed to see that I was absolutely sincere.”
Enslin needed to inform and encourage his employees, building their confidence in SAP’s future, and giving them the tools to help SAP’s leaders realize their vision: to turn SAP North America into a solutions-focused company that tailors its capabilities to meet customer needs.
Once he had the employees on board, he needed to connect with customers, discover their challenges and how to best construct SAP’s business model to meet those challenges.
“I had to show everyone that this is how we’re going to connect with customers, this is how they’re going to buy software, this is how we will be successful,” he says. “Internally, this is what we’re going to do to change, simplify our business model and do it really quickly.”
For Enslin, taking on his new role meant putting communication first. He needed to promote a message and stay on it and make sure that multiple groups with varying challenges and concerns were on board with him.
Connect with your employees
Enslin had to overcome a great deal of negative momentum when he took the reins of SAP’s North American operations. The economy was in bad shape, and employees were all too ready to believe the worst about the state of business, in general, and their jobs, in particular.
With that in mind, one of Enslin’s first and most essential messages to employees was to turn off the television, put down the newspaper and focus on the future, not the present.
“A lot of employees were really concerned about their jobs, about job reductions in the marketplace,” Enslin says. “People were concerned about where companies were going. There was a lot of negativity, so the biggest thing was really to have a positive approach to it, lay out how the plan was going to unfold over the year, lay it out in an articulate manner to the employees, and we did that from day one.”
Having a great communication plan is only the beginning when promoting a vision. Messages are made to stick in employees’ minds through hard work and repetition on the part of company leadership. And that’s exactly what Enslin set out to do.
In addition to traveling throughout SAP’s North American footprint, Enslin began to create interface opportunities with employees through periodic morning briefings and other frequent forms of messaging.
“Employees would see our messages when they first woke up in the morning,” he says. “Maybe not every morning, but maybe once a week, once every second week. It was all about clear communication from us as the executive leadership team, explaining the success we are having and how we’re facing our challenges.
“After three or four months, we got the message out, people understood our plan moving forward and started to understand how we were going to get there. From there, we needed to elevate our game. You do that by getting together with everyone on the sales team, vice presidents, managers, consulting, field leadership, and start to focus on an agenda.”
As upper management, vice presidents, managers and employees began to focus on the customer-centric vision, a dialogue began, and Enslin started to see the blossoming of another critical element in developing and promoting a vision: employee feedback.
Enslin wanted to personally gather feedback on his trips. He wanted to hear what employees were saying so he could harvest new ideas and correct misconceptions before the rumor mill could begin churning in earnest.
“The feedback was pretty incredible,” Enslin says. “As you’re on the road listening to employees, you start to break down pieces where you start to find the things that normally don’t show up on your desk. You start telling them why customers are buying in a different behavior and how we need to adjust. Once we got that type of feedback, we were able to make adjustments in a very short time. People were willing to give their feedback because they knew that action would be taken.”
When it comes to implementing your own communication strategy in times that are trying or uncertain, Enslin says that, above all, you need to have an unwavering focus on and belief in your vision. If you communicate your vision and strategy with confidence, chances are that confidence will rub off on your employees.
“First, make sure that they know your vision is rock solid,” he says. “Understand the reality of the situation, and the reality of the situation in 2009 was that people wanted to know the truth. You have to let them know the truth and explain to them the difficulty of the situation.
“It was an unconventional time. SAP America was growing at 15 to 20 percent; then all of a sudden the market changes.”
And when the market changes, your customers’ needs change. Which is why you need to communicate with customers in much the same way you do employees: buoying their confidence in your vision and strategy, creating a dialogue and opening feedback channels.
Connect with your customers
When you go to your customers, you’re really trying to get the pulse of what is going on in the markets you serve. Especially during challenging economic times, customers not only represent your financial support, they provide a wellspring of information on the condition of the market at any given time.
As Enslin settled into his role, he visited with customers and began to paint a picture of their evolving needs and what SAP could do to meet those needs in the coming months and years.
“I spent day after day listening to customers, understanding their problems and how they were trying to be successful,” Enslin says. “It’s just a matter of asking them over and over, ‘How can we help you?’” It’s getting from the customer’s vision to your vision, and to realize that, you have to move at incredible speed. You can’t become consensus-driven. You have to say, ‘We’ve made a decision, we’re headed in that direction, and these are the things we need to change in order to be successful. Once you do that and people start to see success, the rest will follow.”
In the months after Enslin assumed his post, he and his executive tea
m began to debate over the best way to interface with customers. It had to be effective, and as important, it had to be cost-effective.
“We had an internal discussion over what we should do. ‘Should we do this thing; should we save the money? Is it going to help our business? Are people going to fly to Orlando to go to an SAP conference?’” Enslin says. “It’s amazing what customers will tell you when you ask them.”
What customers were telling Enslin was that the world of business was changing with the economy, and SAP would need to adapt, as well. As the economy bottomed out, customers were more focused on cost-saving solutions. Now that the economy has started to rebound a bit, SAP’s customers are once again starting to look for innovative, creative solutions.
“You have to make sure that you’re adjusting your business model to meet your customers’ demands,” Enslin says. “That’s step one. When a market is growing, you’re probably more focused on innovation. Where we’re at now is that customers have seen enough of the efficiency, enough of the employee reductions and capital restrictions. We’re to a point where the profit-and-loss sheets are starting to look pretty good and they’re asking how do we innovate again. So we’ve adjusted our internal business model, and now we’re working with our customers to say, ‘OK, let’s innovate together.’
“What I’d tell other business leaders is listen clearly to your customers on what they need, and then you have to figure out how to adjust your business model.”
The larger your business is, the harder it will be to adjust how you do business. You won’t be able to react to every ripple and wave you encounter. So you need to prioritize what types of services you want to provide and what metrics and indicators will serve as your call to action as an organization.
“When you’re putting together a longer-term vision, it maps around a couple of areas depending on what kind of customer signals you want to go after, what solutions you want to bring to market and how you bring those solutions to market,” Enslin says. “As you’re pulling in the long-term thinking, you need to know how the support services will be structured to actually cater to customers in the future. That is around HR, your financial department, how your contracting process works and how you enable the marketing process with the Web. All of those processes have to be aligned in order to match your vision.”
In a down economy, you sometimes have to make short-term compromises with your vision and business model, recognizing the market’s limitations while still keeping your eyes on the long-term prize of growth and a rekindled culture of innovation.
“The first thing you need to say is, ‘In this quarter, we need to stabilize the environment, we need to go to market, the customers are going to be spending, but they’ll be spending less, and that’s probably going to keep occurring through 2009 and ’10,” Enslin says. “Once you have that in place, what you next want to look at are the longer-term things that you want to work on. For us, our customers are significantly involved in SAP, and they want a relationship with SAP that is a three- to five-year relationship.”
Ultimately, you might need to modify your definition of success in the short term, focusing on short-term goals with your customers and creating company benchmarks focused primarily on incremental improvement.
“There are some things, as you go through this, that are so important,” Enslin says. “One, how do you measure the success of your business? Employees are used to measuring success in terms of growth, but we changed the way we measured success in 2009. We started to articulate to our employees how many transactions we were doing as part of a quota, our customer satisfaction, our partner satisfaction. We started to articulate how we were investing in the future. Once employees see that you’re investing in the future of the business and gain a sense of confidence in that, it’s amazing what you can do when you have that positive flow in the company.” <<
How to reach: SAP North America, (800) 872-1727 or www.sap.com/usa
Communication isn’t just important; it’s vital. Businesses serve themselves well when they forge a partnership with their banks in such a way that their banker’s community network opens up to them and their business. Bankers have many resources and are glad to share them with their customers.
Get the bank involved in critical decisions early and often. Today’s most effective bankers are a strategic consultant for their business customers. The bank will have an intimate knowledge of the operations of the business and can link its knowledge to the business’s resources. The banks can also help minimize expenses by providing upfront advice when a business is considering taking on an additional expense by helping answer questions.
When approving loans, lenders increasingly rely on credit history and clear demonstration that you have the ability to repay the loan. Be open and honest about past credit issues and take the necessary steps to resolve any blemishes on your personal and business credit history. One easy way to improve your credit score is to always pay your bills on time and online bill payment services are a great solution.
Identifying and correcting any cash flow problems will help you trim expenses, save for your next big project and improve your ability to secure financing from lenders. Talk with your banker about financial services that can help improve cash flow. A thorough analysis of your business’s cash flow will help you identify opportunities for cost savings and pinpoint areas to improve operational efficiencies.
Seek to know several key bank employees. Other than the relationship manager, other key employees include the relationship manager’s manager, the administrative assistants and other branch staff. The more bank employees you personally know, the better. Bank employee turnover often presents challenges. You don’t want to be alone when your only contact leaves the bank.
Ask your relationship manager for a formal review of your bank accounts. Annual reviews of services are considered reasonable. The review should include all bank services. Ask for a treasury management specialist to be part of the annual review, or if credit is part of the relationship, ask for a risk employee to be part of the review. This is a significant part of the relationship-building process. The bank appreciates a business owner who is trying to be more efficient and profitable.
Companies with high leverage and little or no equity will continue to find credit difficult to obtain. There are certain industries that banks have a limited appetite for. Banks want to make loans to creditworthy borrowers. As part of the relationship process, ask your bank if your industry is desired.