It’s impossible to find all the answers to leading a business in a magazine article — even if it’s in the Harvard Business Review. But you might find a good question once in a while.
That’s exactly what happened to Michael Rubin a couple of years ago.
The chairman, president and CEO of GSI Commerce Inc. was thumbing through an issue of the well-known management publication when he happened upon a couple of key questions that every company leader should ask their employees. One of the questions was culture-related, and it immediately stuck out to Rubin: Could you go around to every key employee in your company and ask them what your vision, mission and core values are?
“At that point, I knew my answer would be ‘no,’” Rubin says.
GSI is a growing e-commerce solutions company with a list of clients that includes Dell, Estée Lauder and the National Football League. From the outside, GSI looks the part of a company that generated $967 million in 2008 net revenue — healthy and in peak condition. But on the inside, GSI had a case of ambiguity.
The long-term vision, mission and values of the company hadn’t been explicitly defined by management. The guiding principles of the company might have been on paper somewhere, but the communication of those principles was so lacking that many of GSI’s 4,500 full-time employees would have had trouble defining them.
To Rubin, the answer was clear: GSI needed to better define and communicate the vision, mission and values that drive his company.
“We undertook a critical process, driven by our employee base and other key constituencies, to really define our vision, mission and core values,” Rubin says. “Once we implemented that, it has really helped to shape the company.”Define your values
To focus your company on a vision, mission and set of core values, first you need to define what those values are. That was the first step in Rubin’s process.
“Our vision is to be a worldwide leader in e-commerce, growing from what was a U.S.-based platform,” Rubin says. “Our mission is to be e-commerce experts that really help our clients grow their e-commerce. Our core values support the vision and mission — for instance, the idea that a promise made is a promise kept. We’re in the business of delivering clients products that are important to their businesses, and we need to hold to that commitment.”
From there, Rubin and his leadership team performed a large-scale rollout of the vision, mission and values to the entire company. It was a task simple to state but complex to carry out.
Rubin uses the term “overcommunicate” to describe the level of persistence he and his managers used to focus their thousands of employees on the company’s guiding principles. In the world of business, “overcommunicate” is something of a cliché, but to Rubin it has a definite meaning: to never allow yourself or your senior managers to become satisfied with their current level of communication. Rubin says you should always strive to go above and beyond your current level of communication.
“We had a big rollout that we did to all the constituencies in the company,” he says. “We had a lot of different materials implemented and featured in all areas of the business. At our last employee meeting, we did, for the first time, a question-and-answer session, realizing the amount of stress and pressure on employees’ minds. That was really well received because people like it when you’re honest and answer things truthfully. It shows why communication is fundamental to the success of any business.”
Part of the hard work of communication is making it sound easy. When communicating wide-ranging concepts throughout your company, you need to state them in a straightforward manner and, as much as possible, tailor the message to your audience.
“In all the communications I have with people, I’m constantly explaining why we’re doing what we’re doing, why we’re investing in the areas in which we’re investing,” Rubin says. “When we went from a U.S. e-commerce platform to an international platform with fully integrated marketing services, that was confusing to people. We had to define to everyone why we are doing this, why it’s good for our clients, employees and shareholders, and constantly communicating the benefits to people. That is what we’ve done to help employees understand the evolution of our business.
“However, with that communication, I’m trying to reach 4,500 people, and within those 4,500 people, you have all different types of employees. When you’re communicating to numbers that large, you need to be sure that everything you’re communicating is appropriate for your audience.
“It doesn’t all get communicated in the same way. You might have a more wide-ranging message for your higher level employees and a more specific version of the message for the employees who are more involved in a specific aspect of your business. The way we communicate something to our overall business might differ than how we communicate, for example, to our marketing services business. We might take another level of detail to communicating with that business than we would to the overall organization.”Develop communicators
In order to effectively move information throughout your organization, you need help. That help has to come in the form of other managers who are practiced communicators.
At GSI, Rubin develops managers on the inside and hires managers from the outside. The managers help keep the vision, mission and values in front of GSI’s employees in their daily interactions.
“Any talent search in a high-growth company is going to be a combination of people that you’ve developed internally and people you have brought in from external sources,” Rubin says. “I believe that when you look for leadership in an employee, it’s not just what you learn in the interviewing process, it’s also the back-door references you find, where you can really find out about the person’s history, track record and management style.”
Once Rubin and his staff have made a management-level hire, they send the new manager to training, during which they are taught what will be expected of them as communicators.
“We have a leadership program at GSI, during which we work on things that are important to any manager’s success,” Rubin says. “We take them off-site and work on training them as top managers, as people who are going to continue to grow the company.”
Once the training sequence is finished, the learning doesn’t end. But the teacher might change. Rubin says that he and all of his experienced leaders are teachers on a daily basis, as is the case for anyone in a high-profile position. New managers will look to you for their cue. The behavior you exhibit is the behavior they’ll emulate, so if you want them to help set and reinforce the vision, mission and values for the rest of the company, that is the tone you need to set.
“First, you must lead by example,” Rubin says. “That means the example you’re setting is something you must fundamentally believe in. It has to be honest and real, and it has to continuously stay in line with your mission, vision and core values. If you set those principles, but then do things that are out of line and inconsistent with them, people are going to notice and call you out very quickly.”Open a dialogue
Engaging your managers is a great first step, but only if the engagement continues throughout the organizational ranks. And one of the most effective ways to do that is to give employees feedback channels. Personal contact is always best, but electronic methods such as e-mail are useful, as well.
By showing employees a concrete way that their ideas and input can help better the company, you’re showing them that they can help steer the organization, which will increase their level of buy-in with regard to the vision, mission and values.
“Great ideas come from all of [your] constituencies,” Rubin says. “If you don’t foster a culture that creates great ideas, then you’re not going to be successful. If we only solicit ideas from select people within the company, we’re going to miss out on a lot of opportunities.”
But with open feedback channels comes the need to review the feedback you get. Rubin and his management team integrate the feedback and idea review process into their strategic planning meetings. It gives them an opportunity to see if a new idea might fit with the company’s overall direction.
“You have to have the right strategy and the right financial plan and align those with your organizational goals to get everyone working together on new ideas,” Rubin says. “Each year we have a formalized strategic planning process, and out of that comes a financial planning process, which is used to get everyone in line with what we’re trying to do as a company. That gets cascaded down to individual departments and through to our individual department goals, and that’s how we get everyone focused and working together.”
As necessary as the vertical communication between management and the lower rungs of your organization is, lateral communication between departments is another key component in building a culture, reinforcing the vision, mission and values, and sharing ideas.
Rubin says that many departmental managers are more experienced in a hierarchical setting, where they’re overseeing subordinates and answering to superiors. Finding department heads who excel at taking a cross-functional approach to leadership can become a bit more challenging.
“It goes back to hiring the right people, then you have to get them into situations where they interact, and you can focus them on growing their departments by interacting with each other and sharing their expertise,” he says. “Since people tend to manage better up and down within an organization than they do horizontally, one of the qualities you have to look for during the recruiting and interviewing process is people who have a history of doing well in a cross-functional environment.
“Once you have the right people, you need the right level of alignment in order to create a cross-functional environment. Alignment happens through the goal-setting and goal-connecting process. If you can do those two things, the rest falls into place, and you will be able to get people on the departmental level who work together and make each other better.
“That is probably our biggest opportunity and, in a lot of ways, our most challenging. It’s what we talk about in our (leadership training) program — get connected, align the different goals and objectives, and make sure all those goals are connected. If you can’t do that, you have no shot of being successful as an organization.”
How to reach: GSI Commerce Inc., (610) 491-7000 or www.gsicommerce.com
Mary Stengel Austen didn’t get much sleep last night.
It doesn’t matter what day you’re reading this, she almost certainly got fewer than four hours.
“That’s the truth — I don’t get a lot of sleep,” she says with a dismissive laugh that makes it seem as though the whole world dealt with sleep deprivation so well.
Sleep is far from Austen’s top priority. Besides having five kids, she is also the co-founder, president and CEO of Tierney, a full-service marketing communications firm. The company has 145 people, and Austen wants to have a connection to all of them. She believes every person is a chance for Tierney to take on a new opportunity, so she spends her hours helping with everything from interviews to getting people to laugh off a crisis.
Smart Business spoke with her about why it’s important to take a close look at any potential hire and how important it is for you to find some mentoring of your own.
Take a look at your hiring process. You should surround yourself with people who play better tennis than you do — that’s not a great analogy for me because I don’t play tennis — but the idea is that you want to surround yourself with people that make each other better and that push each other in a collaborative way. That means they really provide a different skill set than you have, and that helps to foster more creative and innovative thinking.
I see all (senior and midlevel) people before they get hired. People can look very different on paper than they are in person, and that cultural piece is critical. Each new person creates new opportunities to change your business, and it can be positive or negative, so I feel really strongly that I need to see the senior and midlevel people and, frankly, sometimes junior people before they’re hired. I’m really pushing as we hire new people that we hire a diverse group of people. And diverse meaning not only the color of people’s skin, but their headset, meaning we have art majors, we have business majors, we have philosophy majors … and that’s by design, not by default. That ultimately provides you with more depth because you want people who think differently and come at problems differently. You want people who are really big out-of-the-box thinkers, and you also want people who are more engineer-minded in terms of, ‘OK, that’s a great, big idea, now how do we tether that to the ground and how do we pay for it [and] will it work?’
Start grooming new talent. When we have interns come in, we have them compete against a challenge. For instance, I sit on the board of Bryn Mawr Rehab Hospital and they have a program trying to (stop teens from drinking and driving), and one of the challenges was how do we continue to make that program relevant to today’s teenagers. That’s an opportunity where my senior managers, the client and I come together and listen to intern presentations. … What I’m struck by every year is really smart people that have great ideas, that may have a different point of view than I do. They have this whole layer of social marketing that I didn’t grow up in and how they communicate their strategies might be different. So that’s an avenue for them to have exposure to us.
The intern piece is also an opportunity for us to mine for talent, which is one of our challenges. That’s a really good thing for both of us. They get a test drive, and we get a test drive. Do they culturally fit into the organization? Do they have the chops to do what they need to do in the business? And vice versa — do they like what they see?
Help people keep perspective. You really have to keep a balance and recognize that sometimes there are certain things you can’t control, and you have to keep a sense of humor about it. I am not a brain surgeon. You have to really keep it in context and make sure that, yes, you work really hard, but you have to keep things in perspective and say, ‘You know what, we’ll move on.’
Much of my career has been issues management and crisis communications work, and I’ve learned that if you push people to step back from the actual incident or issue at hand, it tends to slow things down and people start to take a deep breath and say, ‘You know what, this is manageable; let’s take it piece by piece.’
Just chunk it out, so to speak. It’s not as overwhelming when you step back from something and, quite frankly, sometimes when you’re involved specifically in it from a client perspective, it’s harder to step back. So provide, as a third party, that ability to say, ‘Let’s step back and look at the big picture. What is the issue, what’s the strategy, and how do we go about working at it?’ That helps people stay focused on the big picture. So, yes, you have to think about your short-term goals, but you also have to think about what’s the ultimate goal, and that allows people to step back and think, ‘OK, how do I tackle this then?’
Find multiple mentors. I was very fortunate a few years ago to spend time at this event with Jack Welch with a total of about 100 CEOs. … He was really interesting because I had an opportunity to have a drink with him and he was pushing me about who my mentors are, and I told him (former executive at The Interpublic Group of Cos. Inc.) David Bell, and he said, ‘Well, who else?’ And I said, ‘I don’t really want to impose a lot on other busy people’s time.’ He looked at me and blurted out, ‘What is the matter with you?’ And I said, ‘Excuse me.’ And he said, ‘People kind of expect that you’re going to ask. They’re most of the time flattered, and if they’re not flattered, then something’s wrong with them.’ … That really did push me to kind of look to other organizations and other people and provide me with a different dimension.
How to reach: Tierney, (215) 790-4100 or www.hellotierney.com
With the growing concern over market stability and its effect on both short- and long-term investments, future students and their families have become more tentative about adding to their college funds. And those who are still actively saving are looking for a more effective and straightforward strategy.
“As college costs continue to increase, many are looking for smarter ways to save. Currently, the most popular product available is the 529 plan,” says Mark Anderson, a director in the Tax Strategies Group at Kreischer Miller. “These plans function simply, and the best part is that getting involved in one is easy for most families.”
Smart Business spoke with Anderson about how 529 plans compare to other education savings options and how to avoid the tax consequences of paying for a loved one’s education.
How do 529 plans differ from other educational incentive options?
529 plans are more sophisticated than some of the other education credits and tuition deductions available to taxpayers and offer a variety of unique benefits not found in other education savings options. Traditional education credits act to reduce your tax liability, preventing you from receiving a tax refund if you have no liability. In addition, education credits are reduced when adjusted gross income exceeds certain amounts. For 2009, the phaseout begins at $50,000 for single taxpayers and at $100,000 for joint filers.
529 plans are not subject to income limitations and can be utilized by all taxpayers. While there is no tax deduction or credit for amounts contributed to a 529 plan, the investment income and/or increase in the plan’s underlying value are not taxable as long as the funds are used for education expenses.
Other educational savings options carry far more limitations to how the funds may be spent, making them less desirable alternatives. 529 plans are also universally available to families in all tax brackets, making them attractive to both higher- and lower-income families.
How are 529 plans structured?
Typically, there are two main types of plans — prepaid plans and investment plans. Prepaid plans, also known as state plans, are set up by a state or political subdivision. Benefactors may buy credits in today’s dollars, allowing the beneficiary to use them to pay for credits in the future. They may also be arranged as an investment plan with a related investment account. Depending on how the plan is invested, it will produce investment gains.
All of these options provide funds for tuition and fees, as well as books, supplies, and room and board for half-time students. Computer equipment and Internet access are now also considered qualifying expenses.
What are the gift tax implications for donors?
An individual may contribute up to $65,000 at one time to a 529 plan without incurring gift tax by claiming a pro-rata gift tax exclusion of $13,000 a year over each of the next five years. If a donor chooses to contribute more than $65,000, the additional funds would be considered a taxable gift and may subject the donor to gift tax.
Donors who are considering funding educational expenses for students currently attending college should be aware of the general educational expense gift tax exclusion, as well. Under this provision, an individual is entitled to an unlimited exclusion from gift tax for another individual’s school tuition if the payment is made directly to a college or a university; this exclusion is in addition to the annual exclusion.
Are there other benefits or limitations to 529 plans?
You may not contribute stocks, securities or any other type of property into a 529 plan; this is a cash-only endeavor. However, the current market situation may work to your advantage when considering college savings.
If you have other capital gains, you can liquidate investments that may have lowered in value and contribute the cash, tax free, to a 529 plan. This would trigger a capital loss that you could use to offset other income.
Another benefit of 529 plans is that they are transferable from student to student. In the event that the initial beneficiary is unable to use all of the funds in the account, the remaining funds may be transferred to a second beneficiary.
One major limitation does exist, however. When purchasing tuition credits in a state plan or arranging the funds in an investment account, neither the donor nor the beneficiary may participate in the decisions to change the investments more than once a year.
With the drop in the market last year, and growing concern over being locked into plummeting investments, a special exception has been created for 2009 and changes will be granted twice this year.
What else does someone considering investing in a 529 plan need to know?
Most of the people who administer 529 plans do a good job of communicating the variety of investment options, but you have to make sure that the college or institution you’re considering is eligible.
Investors should also be diligent in reviewing the enrollment and maintenance fees for these accounts, as well. The Web site savingforcollege.com reviews the state tax benefits on a state-by-state and plan-by-plan basis. It also does a good job of comparing the enrollment fees and investment fees. A wealth of information is available both online and from your financial adviser.
Mark Anderson is a director in the Tax Strategies Group at Kreischer Miller. Reach him at (215) 441-4600 or firstname.lastname@example.org.
Bob McNeill is director of continuing education at Delaware Valley College and has more than 30 years in adult and continuing education. McNeill has served as the president of both The Continuing Education Association of Pennsylvania and the Pennsylvania Association for Adult Continuing Education, of which he is currently an active board member.
Q. How can a business form a successful training regimen?
It all begins with a plan. If the business has decided that it will employ outside providers to accomplish its training objectives, then the best way to keep it on track is to develop a long-term relationship with its provider. This provides for a working relationship built on outcomes, trust and cost-effective training.
Q. How can a company determine effective training techniques to maximize training spending?
Companies can determine this by first articulating what outcomes they expect when initiating a training plan. Once these are conveyed to a training provider, the provider will have a clearer picture as to how to structure the training program. The provider explains the program to the employer to insure consistency with the vision, and the plan is implemented. After the training takes place, there should be an evaluation by both the participants and the company to determine the outcomes achieved. Assessment is key in the evaluation of any training endeavor. (Use) a before/after evaluation, references, customized training with a business and industry training specialist, use a high-quality training institution students will value the training more and value themselves more because the employer went the extra mile for quality.
Q. Are there any techniques to measure whether training is working?
Before an employer commits resources to training its work force, it should know where the skills are now. This can be accomplished by an evaluation of the employee. As I mentioned earlier, a pre- and post-training assessment is critical to the success of the training effort. Delaware Valley College has recently begun to use online evaluations for this purpose. It tends to make the participants a little more at ease with the process.
In an economy in which profits are hard to come by, survival is not a given and there is extreme social unrest, business ethics is an issue of global importance. And there’s no reason to risk losing your company’s profits, your own personal assets or, potentially, your freedom by not being informed or by making faulty decisions.
Bette Walters, adjunct professor at Delaware Valley College, says that businesses are in a period of massive upheaval, and business owners need to take a fresh look at their ethics as they struggle to survive.
“There are a host of roles and responsibilities attributed to business now that historically haven’t been there,” Walters says. “How are you supposed to reconcile these new expectations and requirements with your basic obligation to make a profit?”
Smart Business spoke with Walters about how ethical missteps can doom you and how education can help you avoid making critical mistakes.
What are the big global business ethics issues that are affecting businesses today?
The No. 1 issue is loss of trust. To paraphrase Ben Franklin, ‘Glass, china and reputation are easily cracked and never well mended.’
Fraud, malfeasance and a lack of professionalism have broken trust in business, governments and institutions on a global scale. People around the world are pulling back from spending and investing. They’re angry and confused and want someone to blame. Governments are struggling to address basic human needs, stabilize the financial system, punish wrongdoing and establish new standards. Businesses are struggling with the right course of action — for example, do you outsource, or bring some jobs back to the U.S.A.? What if you have a headquarters in Michigan but make most of your profits in Europe? There are no simple answers.
The underlying causes of the current global economic crisis are complex, and they won’t be remedied by hasty legislation and throwing money at solutions — there will not be a quick fix.
How are those issues changing the way businesses are run?
Corporate compliance, governance and risk are high on the agenda. Some key concerns include determining what constitutes compliance, when and how do you conduct investigations, how do you train your employees, how do you police activities, who should govern and how, what are the risks of a business — not just traditional economic and political risks but social risks — and what is the social responsibility of the enterprise?
The federal government and shareholders are getting deeply involved in the pay structure of many corporate executives. The U.S. government has issued sweeping proposed regulatory reforms imposing new rules on how corporations are run.
Roles and responsibilities are in a state of flux. Businesses must not be paralyzed by fear or pretend they are not undergoing a time of great social unrest. Change is going to happen. The question is whether business will be ahead of the curve — and influencing the outcome.
How can educators get students to consider the implications of global business ethics?
Educators should include ethical considerations in everything they teach. They can explore the costs of both impropriety and the appearance of impropriety — and how those costs can act as a deterrent. Tracing history and relating it to the issue curve (societal pressure builds — you get action at the apex of the curve and compliance thereafter) helps students understand that business must be alert to the world around it and operate within ethical bounds.
On the positive side, focus on how you can use ethics to enhance your brand for both customers and employees. Why waste your efforts generating profits by ignoring society’s needs and expectations and inviting ruin? Use the issues to foster innovation and create a sustainable business.
What are some mistakes that businesses make?
Examining cases involving short-term thinking in the interest of immediate gains, not taking the time to understand how the underlying subprime mortgage investments were structured, not studying the numbers, ignoring questionable practices, not considering intended and unintended consequences of legislation and regulations, and disregarding laws. Businesses need to be aware that actions have real consequences and frame discussions regarding what we need to do to establish a better framework for decision-making. Whether it is how you treat employees or how you set up your reserves, there are many choices to be made; the question is, how to do make the best choices?
What can be done to rectify the situation?
The business needs to apply its skills, consider why and how bad behavior has occurred, and what needs to be done to restore prosperity and faith in free enterprise. As we work toward a new standard of best practices, a business needs to actively participate if it wants a result that accurately reflects a profit motive and legitimate business needs.
How can executive education help?
Executive education helps educators understand the needs of business and helps executives identify the trends, risks and opportunities arising out of the current global business environment. Working on oral presentation skills, developing sensitivity to issues and the environment of business, considering what is happening among the regulatory community, and learning how to work with stakeholders to maximize your opportunities for success and to minimize your risks all go toward creating a sustainable business model. An ethical framework and strong corporate culture are essential to survival. Education can help you learn how to deliver the hard no.
Bette Walters is an adjunct professor at Delaware Valley College. Reach her at email@example.com.
A year ago, as the nation’s economic backslide began to pick up speed, AmeriQuest Transportation Services was a company that had just about everything in order. The provider of fleet management services, which generated $500 million in sales last year, was nearly on pace to meet its sales plan.
“We were just a little behind our plan, and we were also building some new products and offerings,” says Doug Clark, the company’s founder, president and CEO.
Taken at face value, AmeriQuest seemed to be positioned well for an economic downturn. But when Clark reviewed the company’s strategy with his management team, they became concerned that they were looking at the future with a magnifying glass instead of binoculars. Short-term gains would mean nothing if the long-term health of the company wasn’t secure.
Clark and his team soon found themselves at a crossroads.
“The question we had as a team was whether we should continue to invest in these products and offerings, or do we stop and therefore (affect) our ability to make plan,” Clark says. “In the end, everybody took the long view, and we came to a consensus that we should be investing in the people necessary to make our company have better offerings and more strategic offerings.”
The decision to focus on long-term goals ultimately cost AmeriQuest a chance to make plan. But as the calendar pages turned, it became clear to Clark that the long-term move was the right move.
“Our team took the long view, they were hurt in the short term because they did not make plan and our bonuses weren’t what they usually are,” he says. “But it was absolutely the correct thing to do, because we started to reap the benefits in the first quarter of this year. Everybody hung in there, did more with less and kept their eyes on that long view.”
Over the past year, Clark’s challenge has been to maintain that long-range view and build it into the culture at AmeriQuest, while maintaining a realistic outlook for his employees as the daily news reports continue to bombard everyone with economic horror stories.
Build a sturdy stool
The culture at AmeriQuest is supported by a four-legged stool: transparency, collaboration, trust and confidence. They’re four principles you need to cement in the minds of your people during prosperous times, so that they’ll have the right mindset during trying times.
“Transparency and collaboration build trust among the working group, and through those three endeavors, everybody has a high degree of confidence,” Clark says. “With that resulting confidence, you will come into work with the attitude that we will persevere and we will win.”
Construction of that organizational stool needs to begin in your office, with the help of your management team. You need to decide how you want to communicate and also model the values that you want your employees to embrace.
“You have to start at the top,” Clark says. “I’d like to believe that the people who work with me in this organization truly believe that there are no hidden agendas, that there is nothing being kept from them and we are transparent. Ultimately, the culture is embedded by doing what you say you are going to do, and that keeps filtering down through the organization. The management team builds collaboration by ensuring that there are not walls being built between divisions, and that helps build trust.”
At AmeriQuest, transparency and collaboration are enabled through a great deal of in-person contact between top management and the employees in the field. The company has four offices: the headquarters in Cherry Hill, N.J., and additional offices in the Chicago area, McLean, Va., and Coral Springs, Fla., in addition to sales staff dispersed throughout the country. Clark and his management team maintain consistent contact with the other offices either by logging air miles or getting on the phone. But maintaining open lines of communication is the key.
“It’s particularly challenging when you’re not all in one place,” he says. “But we spend a lot of time on conference calls or in face-to-face meetings just trying to accomplish what we set out to accomplish. We’re a fast-moving organization, so we need that constant communication among us.”
It can be tempting to look for an easy solution to communicating, particularly in the current economic climate, when there is so much else you could concern yourself with. But Clark says now, more than ever, is the time when your people need to see you and hear from you.
There is no way around it: Promoting and maintaining your cultural principles is going to involve a lot of hard work from many different people.
“There is no one silver bullet for this,” Clark says. “It’s blocking and tackling to maintain the culture. It doesn’t come from books or once-a-year meetings where you tell everyone that this is the culture you’re going to have. It’s every day, you have to live it and adhere to it. And if you’re not adhering to it as part of the team, you should be called out on it.”
Part of communicating is modeling the right behavior. In tough financial times, when sales might be lagging and customers are hesitant, it can become easy for people to begin playing the blame game when a sale falls through or an account dries up. That is a recipe for cultural disaster. To build a collaborative culture, you need to set an example, from the top, that demonstrates a willingness to shed light on internal conflicts.
“If there is a dispute, I don’t take one person’s word for it,” Clark says. “I bring everyone who is affected into the decision circle. Everybody knows that. They know that if they have a complaint about someone or something, we’re not going to whisper down the lane. We’re going to address it and meet it head on.
“The other part to that is I try not to let things linger. If there is an issue out there, if it is a morale issue or a financial issue, we try to explain where we are and why we’re doing what we are doing. We want to communicate our reasoning with everyone. They might not end up agreeing with it, but at least they know the reasons why we’re going down a particular avenue. It’s all about continual reinforcement through your actions and words. That is how a culture is created and sustained from the top.”
Be a realistic cheerleader
With negative economic news seemingly at the top of every news broadcast and on the front page of every newspaper business section, you might feel like you’re swimming upstream in the fight to salvage your employees’ collective morale.
Swimming against the current might not always represent the best course of action.
You need to instill in your employees a belief that they and the company will endure, that times will get better and the revenue streams will pick up speed at some point. But you can’t overcompensate for bad news by attempting to slant your employees’ perception of reality.
Clark says you need to accentuate the positive whenever possible, but you also need to give your employees the straight scoop when the news isn’t as good, otherwise you’ll lose credibility and the stability of your culture will suffer.
“Part of a leader’s job is to be something of a cheerleader but not to the point of being unrealistic,” Clark says. “You need to cheerlead by conveying that you will continue to do the right things and this will all pass at some point. I tell my people that if we all co
ntinue to do the right things, we’ll be in a position to take advantage of things when the economic tide does turn.”
Remaining positive while conveying a realistic outlook requires a balancing act, especially when you and your team have to clean up after a mistake or perform a course correction.
“The key to the balancing act is that, on a macro basis, you say that your company is still doing well, that we’re still profitable or whatever positive points you have that you can accentuate. But if you have to say something that is negative, do it in a way that conveys disappointment without destroying confidence.”
Acknowledge mistakes and shortcomings without deflating the people involved even more than they already are. Instead of harping on what went wrong, use negative incidents as teachable moments and opportunities to reinforce a team-first mentality.
“If somebody missed their numbers or quotas or whatever or if there is bad news somewhere else along the line, a lot of times people will beat themselves up worse than you or I could beat them up,” Clark says. “For you to sit there and tell them they missed their numbers this month, that’s really not the right way to manage in good times or bad times. However, in bad times, it’s particularly important to create a dialogue during which you can find some solutions to correct the problem, whatever it might be.
“That doesn’t mean that you can just tell someone, ‘You did a bad job, but that’s OK,’ and pat them on the back. In a situation where a person already recognizes that they haven’t accomplished what they were supposed to accomplish and there is already negativity in their thought process, you need to acknowledge the problem, then work together with the people involved to correct it. Look at what you need to do moving forward. Don’t look back at what you’ve already done.”
Take the long view
When taking a long-range view that looks past the potholes immediately ahead, Clark goes back to a lesson he picked up from the published works of business mogul and Google investor Ram Shriram: The head of a company has to work on the business, not in it.
You’ve hired people to take care of the day-to-day operations. Your job is to make sure that those people are put in the best possible position to carry out their daily and weekly tasks by ensuring that the company is in the best possible position to succeed when times are good and endure when times are trying.
“Positioning the business to weather a down economy is something that falls onto senior management,” Clark says. “That is a major responsibility of senior management in any company. You need to look to the future and what you think the future is going to hold, then act accordingly.”
Acting accordingly means using the information at your disposal to paint the most accurate long-range picture that you can. If the projections say revenue will begin to swing upward, you might make preparations for additional hires or reduce travel restrictions. If projections aren’t as positive, you might need to rein in spending.
“Entering the fourth quarter of 2007, I was really advising our management team to enter 2008 in almost a hiring freeze,” Clark says. “The last thing you want to do is hire in January and lay off in August. That turned out to be the right advice, but more importantly, the management team followed that advice. That is why we need to get out of the details of the company and take the visionary view.
“In the end, your decisions will probably be driven by three things: cash, employees and customers. You want to accumulate cash, keep your good people and keep your good customers. That should be your focus in this economy.”
How to reach: AmeriQuest Transportation Services, (800) 608-0809 or www.ameriquestcorp.com
Abington Memorial Hospital
1200 Old York Road
Abington, PA 19001
Richard L. Jones Jr.
President and CEO
About Abington Memorial Hospital is a regional referral center for orthopedic surgery, neurosurgery, cancer and cardiac care. Among its lists of specialized areas are cardiac, cancer, stroke, senior health, and metabolic and bariatric surgery. Abington Memorial became the first acute care hospital in the region to receive Magnet designation, one of the highest forms of recognition for nursing.
Year founded 1912
Key services Level-two trauma center, heart center, cancer center, Human Motion Institute, stroke center
Albert Einstein Medical Center
5501 Old York Road
Philadelphia, PA 19141
Barry R. Freedman
President and CEO
About The Albert Einstein Medical Center is a teaching hospital that offers a full range of services, including specializations in eight areas. Among the hospital’s focuses are behavioral health, geriatrics, heart care, kidney and liver transplants, neurosurgery, orthopedics, and women’s and children’s services. The medical center is one of Albert Einstein Healthcare Network’s seven main facilities.
Year founded 1866
Key services Level-one regional resource trauma center, level-three neonatal intensive care unit, behavioral health center, kidney and liver transplants
Cooper University Hospital
One Cooper Plaza
Camden, NJ 08103
John P. Sheridan Jr., President and CEO
About Cooper University Hospital and a few of its additional campuses are undergoing a nearly $600 million upgrade and expansion project to improve services. The hospital, which has six signature programs, including a neurological institute and radiosurgery program, recently opened a new $220 million patient-care pavilion. Cooper University Hospital has received NRC Healthcare Market Guide study’s consumer choice award four years in a row.
Year founded 1887
Key services Level-one trauma center, Bone & Joint Institute, Cancer Institute, critical care medicine, neurological center
Hahnemann University Hospital
Broad and Vine Streets
Philadelphia, PA 19102
Michael P. Halter, CEO
About Hahnemann University Hospital was the first hospitals in the Philadelphia area to perform a kidney transplant and has continued down that path. An affiliate of Drexel University College of Medicine, Hahnemann specializes in heart, bone marrow, kidney, pancreas and liver transplants. The American Heart Association has recognized the hospital as a leader in coronary artery disease and heart failure treatment.
Year founded 1885
Key services Level-one regional resource trauma center for adults, aeromedical transplant program for critically ill, cardiac, transplantation program
Hospital of the University of Pennsylvania
3400 Spruce St.
Philadelphia, PA 19104
Garry L. Scheib, Executive director
About The Hospital of the University of Pennsylvania was named one of the top 10 hospitals in the U.S. in 2008 by the U.S. News & World Report. The hospital was ranked the best in the Philadelphia region in more than a dozen categories, including cancer, heart surgery, digestive disorders and kidney disease. It’s also among the nations leader in rehabilitation.
Year founded 1874
Key services Cancer center, cardiac care center, diabetes center, plastic surgery center, transplant center
Our Lady of Lourdes Medical Center
1600 Haddon Ave.
Camden, NJ 08103
Mark T. Bateman, CEO
About Our Lady of Lourdes Medical Center is a regional referral center in the Delaware Valley for prenatal, rehabilitation and dialysis services. Lourdes is one of the larger providers of cardiac services in the area, and the hospital is the only one in the state approved to perform kidney, pancreas and liver transplants. The hospital has been recognized by the American Hospital Association as a leader in community outreach.
Year founded 1950
Key services Bariatric surgery, cardiac services, dialysis center, organ transplantation, rehabilitation center
Thomas Jefferson University Hospital
111 South 11th St.
Philadelphia, PA 19107
Thomas J. Lewis, President and CEO
About Thomas Jefferson University Hospital continues to rank among the country’s top hospitals according to ratings by U.S. News & World Report. The hospital is known for its cancer and cardiology center and is one of only a few hospitals in the country to have both a regional trauma center and a federally designated regional spinal cord injury center. The hospital has not been affiliated with the university since 1995.
Year founded 1825
Key services Trauma center, spinal cord injury center, rehabilitation services, cancer center, radiation oncology
Virtua West Jersey Hospital Voorhees
101 Carnie Blvd.
Voorhees, NJ 08043
Michael Kotzen, Vice president and COO
About Virtua West Jersey Hospital Voorhees is one of the region’s leaders in most babies delivered. The hospital’s maternity center, neonatal intensive care center and pediatric intensive care unit serve expecting parents and those with children needing complex surgeries or dealing with serious medical conditions. Virtua Voorhees also focuses as a hub for community-based health education programs.
Key services Cancer program, asthma management, diabetes education and treatment, education center, maternity center
The seeds of today’s ocean cargo insurance were sown centuries ago on a Chinese river, where boat traders shifted cargoes one to the other to spread the risk of loss. That way, if a boat was lost, the merchants would not suffer a total loss of cargo.
Today, although the terms of insurance have become more complex, the same basic principles hold true, says Jay Frank, a vice president at ECBM Insurance Brokers and Consultants.
“Buyers of insurance need to know that each cargo shipment really is a joint venture on the part of the ship owners or operators and cargo owners,” says Frank.
If there is damage to the ship or cargo, all of the cargo owners participate under a “general average adjustment” that is covered under the cargo policy.
Smart Business learned more from Frank about how to minimize your risk when transporting cargo internationally and what to look for when selecting a broker.
What do business owners need to know about insuring product for international transit?
If you are in the position of frequently shipping — either importing or exporting — it’s a good idea to have a broker who does that kind of business. It’s also important to use an insurance company that is a major underwriter of cargo insurance and that can be a source of information and service.
There are other insurance companies that do not underwrite cargo insurance in any great volume. Therefore, their support would be a lot weaker than that of an insurance carrier that has experienced underwriters, adjusters and claims correspondents in many lands.
What should a business owner look for in a broker?
You want to have at least a medium- to regional-sized broker who has experience with ocean cargo coverage so the broker can offer advice when needed and will know which insurance carrier is most receptive to your product and the ports you ship to and from.
It’s wise to interview two or three brokers to find one whom you feel has the knowledge and insurance company contacts you require.
What are some common mistakes insureds make when transporting products internationally?
In order to collect an ocean cargo claim, you have to be able to prove insurable interest. Shipping documents, which include invoices, insurance certificates, purchase orders or contracts, delivery receipts with exceptions, survey reports, carriers written confirmation of nondelivery and a summation of the claim are required.
The documents will indicate the INCO TERMS — standard terms used in international contracts, such as free on board delivered or point of purchase — so that title would transfer at the buyer’s warehouse or at the shipping point. If the documents are not properly aligned and the insuring party has no insurable interest, it’s likely you will not collect your loss. Also, it’s best to make sure the insurance coverage is placed in the U.S. insurance market.
The terms of the American cargo policies can be quite comprehensive. Insurance policies from other countries can be very deficient. You want to be paid in American dollars, and you want any disputes to be settled in American courts. To allow a foreign placement of coverage puts you at a disadvantage.
What should business owners look for when purchasing ocean cargo insurance?
Look carefully at the insuring terms and conditions. There are a variety of insuring terms available under a cargo policy, such as Perils of the Sea, which is well defined in the history of ocean cargo underwriting, because it dates back 350 years to Lloyd’s of London. Perils of the Sea can be enhanced to include specific optional perils, such as theft and contamination. Or you can go to an All Risk policy that puts you in a much better position because you don’t have to cherry-pick a specific peril and risk an uninsured loss.
If it is All Risk, it would include all perils except those that are specifically excluded. A few that could be excluded, depending on the product, could be breakage, rust or contamination. If those are important to your insurance coverage, you have to be sure your policy includes those perils — which are very often excluded by underwriters who are looking to collect your premium but avoid the most likely loss.
Rust is a good example of that, when shipping metals. If they are exposed to either freshwater or seawater, they can sustain a great deal of damage. If your cargo is being shipped in a vessel that has a problem with leakage or sweating, having a policy that includes rust coverage would be very important.
What other factors can affect your policy?
The previous loss experience of the insured is going to sway the underwriting opinion of the insurance carrier. For instance, a client who imports steel from a foreign company may have a five-year history of water damage or rust claims that the underwriter will very likely not want to insure because that importer is doing something wrong, whether it is picking the wrong ships or not properly protecting the product while it’s under way.
Independent survey companies will examine your product and the ship at loading and comment on the condition of both. Then a surveyor at the offload port can do the same to identify if damage occurred in transit. Proof of claims could depend on the surveyor’s reports. If so, how did it occur? Did it occur on the ship, or did it occur prior to being loaded?
Jay Frank is a vice president with ECBM. Reach him at (610) 668-7100 x1302 or firstname.lastname@example.org.
Education: Bachelor of science degree, communications, Temple University; Juris Doctorate, University of Louisville
First job: Delivering newspapers for the Millville (N.J.) Daily Republican at age 11
What is a universal truth you’ve learned about leadership?
Credibility takes a lot of hard work and time to be established, but it can be destroyed in seconds. In order to be an effective leader, you need to have credibility at all levels of the organization.
What is your definition of success?
Success is having fun every day at work. It’s working with people you love and seeing them grow to their maximum potential. In the end, success is having a job you love because it means never having to work again.
Steiner on demonstrating humility: It takes a certain amount of maturity and experience to say you don’t know or that you don’t understand, that you don’t have all the answers. It is a sign of strength rather than a weakness. In a leadership role, I think it takes time for us to realize that. I always knew I needed a lot of help. I didn’t have any epiphany; I simply learned over time that it’s always best to surround yourself with intelligent, competent people.