Curt Harler

Saturday, 26 May 2007 20:00

Legal action on the go

First there was fast food. Now there is fast legal action. One such ‘rocket docket’ for patent lawsuits is in the Eastern District of Texas. In less than five years, the town of Marshall has increased the number of patent cases heard eightfold.

To find out what is going on, Smart Business asked E. Leon Carter, a member of the litigation section of Munck Butrus PC, a Dallas-based law firm.

What is a ‘rocket docket’?

That phrase refers to jurisdictions in which cases go to trial relatively quickly. Cases in the U.S. District Court in Marshall typically go to trial 14 to 18 months from filing, as opposed to 24 to 36 months in most other jurisdictions. In effect, it cuts time to trial in half.

The phrase usually is heard in criminal cases where the defendant is indigent or in jail. It’s a good thing in patent cases, too, for both sides. Plaintiffs prefer quick resolution, and many defendants benefit from an early trial setting since ongoing litigation — particularly patent litigation — can depress stock prices.

Is Marshall the only place this is happening? Can anyone file there?

The Eastern District is the only place in Texas. For years the Eastern District of Virginia was considered a rocket docket, but that court became so inundated with lawsuits that their time-to-trial lengthened considerably. Currently, the Western District of Wisconsin is one of the few other jurisdictions also considered a rocket docket.

Patent owners from anywhere can file in Marshall, provided that the infringer is subject to personal jurisdiction in the Eastern District of Texas. That includes big cities like McKinney, Sherman, Texarkana, Tyler, Longview, Lufkin and Beaumont, so there’s a good chance the product was used there. The same holds true for the Western District of Wisconsin.

Judges in the Eastern District of Texas handle more patent cases every year than those in any other district, with the possible exception of the Northern District of California (Silicon Valley) or Southern District of New York. They have acquired considerable expertise in typical issues relating to patents and patent law.

Is this a way for the ‘little guy’ to level the field against giant corporations?

Surprisingly, fast trial settings can actually hurt little guys. Deep-pocket defendants use their resources to overwhelm a smaller opponent by contesting every issue to the fullest extent possible and by conducting ‘leave no stone unturned’ discovery. Fast trial settings compress the time frame during which such actions can be undertaken, so while a large corporation can easily just add more lawyers to the team, a smaller entity may be unable to keep pace.

Delay only benefits certain defendants who wish to continue their wrongful conduct for years while litigation drags on, or to defer a judgment against them for as long as possible.

Do local lawyers have an advantage via the ‘good ol’ boy network’?

I don’t think so; judges in the Eastern District do not show favoritism. I think that every judge would be offended by the suggestion. Local counsel is advisable simply because, as in any district, knowledge of the judge’s past rulings and views on law are important to understanding how matters are likely to be resolved. But consistent rulings on an issue are not so much evidence of bias as they are an indicator of adherence to principal. Judges all follow the law.

How did Marshall, a town of less than 25,000, become a clearinghouse for patent disputes?

Patent cases are complex and extensive, taking years to resolve. Some patent owners began taking advantage of the early, firm trial settings for which Marshall and other divisions in the Eastern District of Texas are known, to obtain quicker resolution. Judges reacted by adopting local patent rules, similar to those used in Silicon Valley, to force more efficient handling of patent cases. As a result, cases are brought to trial within a structured pretrial framework that allows both sides to more quickly learn the other side’s contentions.

So it’s a matter of fast trials and local patent rules?

No. Judges in the Eastern District were always willing to hear patent cases. Patent cases are intrinsically complex, both due to the high-level technology commonly involved and the arcane nature of patents. Parties to patent disputes are often combative, sometimes justifiably so, given the importance of technology to their enterprise. So in many other federal districts, judges are not eager to be assigned patent cases, a fact that even the U.S. Congress recognizes.

E. LEON CARTER is a shareholder at Munck Butrus PC and is a member of the firm's litigation section with over 20 years of trial and litigation experience. He has served as a Dallas County Assistant District Attorney and as an Assistant Attorney General for the state of Texas. Reach him at (972) 628-3600 or .

Saturday, 26 May 2007 20:00

Getting that SBA loan

For many businesses, the first line of financing is a loan backed by the SBA (U.S. Small Business Administration).

Small business is a big contributor to the nation’s economy, generating 50 percent of the private, nonfarm gross domestic product. Many budding businesses turn to the SBA for help.

“An SBA loan — provided to a business by a bank — is guaranteed in part by the SBA,” says Michael Benson, senior vice president and Small Business Segment manager for FirstMerit Bank. “SBA provides a guaranty to the bank up to a certain percentage of the loan balance that the bank will be made whole if the loan defaults.

Smart Business asked Benson for help getting familiar with the SBA process.

Does the SBA actually provide money?

No, the SBA does not provide grants or do any actual lending. All of the money is provided by the participating bank in the form of a commercial loan to the business. SBA provides a guaranty (up to a certain percentage of the loan amount) that the bank will be repaid if the loan is not paid as agreed. When the SBA provides direct funding, it is generally related to disaster situations, like Hurricane Katrina.

To get an SBA loan, do I start with the SBA or my bank?

You always start with a participating bank, primarily one with a preferred SBA lender status. This indicates that the bank is deemed to have the expertise to work with the client directly.

Is there an SBA pre-qualification program?

Not necessarily. Experienced small business bankers generally do a good job of pre-qualifying a business, but it is by no means a credit decision.

The bank makes the initial decision on the loan. If the loan is otherwise creditworthy, but perhaps lacks collateral or is a start-up enterprise, the bank may approve the loan, subject to an SBA guaranty. Then the application is submitted to the SBA for its approval. Generally, if an SBA preferred lender makes an initial approval, then the SBA will approve the deal as well.

Is a written business plan required?

A written business plan is very helpful to the credit decision process, both for the SBA and the bank. While it is not required in every instance, any loan request that will significantly impact the future income statement of the business should have a business plan that tells the story of the company and includes pro forma financials that are realistically predictive of the company’s future financial performance.

Situations where business plans and projected financial performance are definitely needed include: loans to any start-up business, loans that represent relatively large capital injections for buildings or equipment, and loans that help finance a firm’s expansion into a new line of business.

Customers can receive assistance in preparing their business plans from local Small Business Development Councils or the Service Corps of Retired Executives (SCORE), an organization that helps people start new businesses. Some universities also sponsor business incubators.

Will they demand my personal property as collateral?

The personal guaranty of the business owner is a given.

Banks and the SBA are generally unwilling to lend to an entity that does not have the guaranty support of its owners. The SBA requires that all useful collateral is pledged. If the owners are not willing to carry the weight of risk personally, the bank and the SBA will not be willing to take on all of the risk.

Business owners often are asked to pledge their personal residence as collateral. This is especially important when lending for intangible items or items that are difficult to secure. These things include: franchise fees, goodwill on a transfer of business ownership, inventory and receivables.

Who sets the interest rates and terms on SBA loans?

The bank sets the interest rates and terms. Loan limits generally are $2 million under 7(a), $350,000 under Express, $250,000 under Community Express and as high as $4 million under 504.

How do I know when I’m ready to graduate to a non-SBA situation?

Once the bank is comfortable enough with a loan request to approve it conventionally, it does so. Some of the conditions include: being an established business, having a history of making positive cash flow, having collateral, and having experience in the industry.

It should be noted, however, that an SBA loan should not be regarded as a substandard path for financing. It is a conduit for quality businesses or individuals with realistic business plans to obtain needed funds to grow or expand their business.

MICHAEL BENSON is senior vice president and Small Business Segment manager for FirstMerit Bank. He specializes in small business banking and merchant services. Reach him at

Saturday, 26 May 2007 20:00

An ounce of prevention

Cancer: It’s terrifying. While we all run the risk, there are things we can do to keep a serious diagnosis at bay with the most effective methods being prevention and early detection.

Smart Business asked Kathy Lukity, RN, at Akron General Medical Center’s oncology department for some guidance on ways companies can encourage workers to make health — and cancer prevention — a high priority.

What are some of the ways companies can encourage cancer prevention?

Education about cancer is essential. Following a healthy lifestyle will lessen the risk of cancer, while screening for cancer will allow early diagnosis and treatment.

Companies can assist in this process by providing information to employees and encouraging them to exercise, maintain a healthy weight, eat a proper diet and become informed on their own about screenings and further prevention.

The health of the company’s employees will benefit the company overall. Insurance rates and costs to the company can be lowered. Healthy staff means less absenteeism, fewer days of family medical leave and less loss of productivity.

Is smoking still a big problem?

Unfortunately smoking is still a problem. According to the American Cancer Society (ACS), smoking is responsible for nearly one in five deaths in the United States. It is estimated that approximately 20 percent of all adults smoke and the numbers are increasing in the younger population.

Smoking accounts for 30 percent of all cancer deaths and it is the major cause of cancers of the lung, larynx, oral cavity, throat, esophagus and bladder, along with a contributing cause of cancer of the pancreas, cervix, kidney, stomach and some forms of leukemia. Smoking is also a major cause of heart disease, aneurysms, bronchitis, emphysema, stroke and asthma.

Encouraging staff to quit smoking will allow them to have some very immediate health benefits and will reduce their risk of the aformentioned diseases.

Talk about screening programs.

We recommend that people 20 and older have health exams and health counseling. Here are the screening guidelines for specific cancers according to the ACS:

Breast Cancer: Yearly mammograms starting at age 40, clinical breast exams every three years for women in their 20s and 30s and yearly after age 40. Self breast exam education is encouraged for women in their 20s. MRIs are recommended for women at high risk.

Colon and Rectal Cancer: Beginning at age 50, men and women should follow one of the five testing schedules — yearly fecal occult blood test or fecal immunochemical test, flexible sigmoidoscopy every five years, yearly fecal occult blood or fecal immunochemical test plus flexible sigmoidoscopy every five years, double contrast barium enema every five years, colonoscopy every 10 years.

Cervical Cancer: Women should begin cervical cancer screening no later than the age of 21 or three years after they begin having sexual intercourse. Screening is done yearly with a Pap test or every two years using the newer liquid based Pap test. Beginning at age 30, women who have had three normal Pap tests in a row can get screened every two to three years.

Endometrial Cancer: At time of menopause, women should report any unexpected bleeding to their doctor and should be educated about endometrial cancer.

Prostate Cancer: At age 50, annual digital rectal exams and prostate specific blood tests should be offered. High-risk men should begin testing earlier based on their family history and recommendations of their physician.

Does health insurance provide coverage for such programs?

Health insurance typically covers cancer screening according to ACS guidelines. The exact coverage will vary by the policy, deductibles and co-pays. Some health insurance also will cover programs for weight reduction.

What are some other things a company can do to help workers lessen their risk of cancer?

Some companies pay for health education programs and basic screening services. We participate in company health fairs and education programs related to specific cancers, smoke-free environments and assisting employees in smoking cessation efforts. Companies can post information about community events and education programs. Some companies offer exercise areas, weight loss challenges or group walking programs.

If food is available at the company, offer healthy food choices. Newsletters are another way to provide information to staff.

KATHY LUKITY RN, BSN, graduated from the Akron General Medical Center School of Nursing and completed her BSN at the University of Akron. She is the Care Coordinator of the Breast and Lung Center at AGMC, established to facilitate timely diagnosis of breast and lung cancer. Reach her at (330) 344-2778 or (330) 344-5864.

Wednesday, 25 April 2007 20:00

Building banking partnerships

Among the key players in any company’s financial group are its CPA, corporate attorney and business banker. The typical business manager might feel like an orchestra conductor, giving each musician room to play a part, but trying to keep the whole thing in balance.


“Rarely do all the providers have the full picture — and it is even rarer that they have a common, shared understanding,” says David J. Janus, president and CEO of FirstMerit’s Cleveland area office. “I think the biggest synergy is the shared knowledge of the owner’s long-term strategy and goals.”

Smart Business turned to Janus for tips on keeping the relationships harmonious and in balance.

What is the basic strategy with providers?

External service providers are no different than a management team. The owner must get them all working in the same direction to execute their strategy and to accomplish the goals they set forth. Too often these service providers are privy to the piece of strategy around the particular service or project they are working on but do not have the entire picture.

A service provider might suggest a solution that fits the current situation, but another solution would be better from a long-term perspective. For example, I’ve worked with companies that wanted debt capital available for substantial growth and large equity capital distributions for estate planning purposes, to buy out shareholders, and to purchase another company with bank debt. Those objectives are in conflict with each other.

Ideally, we’d want to sort out the priorities with the owner along with the accountants, lawyers and insurance providers to find the best solution.

Does the orchestra leader analogy really work?

Yes, it does. The conductor is always trying to get the most out of each player, but they are best when in perfect harmony. Rare is the company that tries to get perfect harmony. The typical business owner views them as providing separate services and playing separate roles.

So are all equally important?

I’m not sure it matters who is most important. All would be deemed ‘trusted advisers’ of the owner but it depends on the owner’s needs and the situation to determine who plays the lead role at any particular time. The fact that each provider brings unique services to the owner suggests they are all equally important.

What other professionals should have a seat at the table?

Add the commercial insurance provider into the mix and any consultants the company uses with any frequency: management consultants, HR consultants, industry consultants, and so on.

These providers all sit down with owners and sometimes with the leaders. What information you give them depends on what they need to know at the time. An owner likely would want his management team working with the CPAs on an acquisition, but the owner may not want management involved in some litigation work done by the lawyers. It’s very important that service providers know each other and effectively provide the best service possible.

Do many businesses do this?

No. In fact, I have yet to see a business owner pull together his or her entire professional service team for a strategy summit.

Should all parties have similar access to corporate records and books?

Service providers know what information they need to review. I wouldn’t suggest they all have free access to everything, but if the information is pertinent to the situation or the project then they should have access. The business owner should be in a position of complete trust with these service providers, so full disclosure is best.

Why is it important to get them all working on the same page?

Having your professional service provider group working collaboratively will yield better results, avoid surprises, mitigate potential problems, potentially head-off bad decisions and help owners meet their objectives.

I would suggest a summit among these providers once a year after the financial results are available for the most recently ended year and plans are complete for the coming year and beyond. This should be a thought-provoking session about where the owner wants to go with the business, how success is measured, how he or she plans to get there and what impediments might be in the way. Consider this group your informal board of directors. After all, you’re paying them for their advice and service, so why not get the most of synergies among them?

DAVID J. JANUS is president and CEO of FirstMerit’s Cleveland area office. Reach him at (216) 694-5658 or

Monday, 26 March 2007 20:00

Can’t get no satisfaction?

The history books are full of examples where little things meant a lot. The histories of many companies could be a lot better if management paid closer attention to every chance to tie customers closer to their product or service. A positive customer experience is the place to start any customer retention program.

“Every customer interaction is an opportunity to build or destroy customer loyalty,” says Steve Boyazis, executive vice president at InfoCision Management Corp. “This ranges from how simple the instructions are, to how knowledgeable the salesperson is, to how easy it is for the CSR [customer service representative] to resolve issues and problems at once.”

Smart Business talked with Boyazis about some of the “little” things that make a big difference when building customer loyalty.

Is the focus on the existing customer or new customers?

So much marketing, advertising and development effort is spent on attracting new clients — but more likely than not, the most profitable customers are the ones you already have. This means your team has to shine when clients call back and want to make a change in their merchandise or service order, or has a problem or a question. This is most likely going to be the next time you get a chance to interact with them. And that’s when you have to provide a great customer experience.

Existing clients are already convinced to purchase your product or service, so the challenge is to assure that they will continue to be good clients in the future and that they will recommend you to their friends.

What leads to a great customer experience?

Being in the customer care business, we are always looking to find what leads to a great customer experience. Some things are obvious, like it starts with the people who are addressing the issue. More specifically, are they friendly, knowledgeable and passionate about what they are doing?

Ultimately you have to strive to provide a resolution for clients the first time they call with a concern. This actual metric always depends on the industry and product, but shooting for a resolution rate better than 85 percent is a good rule of thumb. After that, there is no real silver bullet. It is really about doing all the little things that help inspire trust and confidence.

Can you share some touchstones that build a great customer experience?

We’ve found that to be great at customer care you have to manage all the details:


  1. Answer the complaint, question and change calls quickly (less than 30 seconds). The longer people are on hold, the more difficult the interaction is.


  2. Have an efficient process to quickly approve and manage rebates, alternative offers and the like.


  3. On the other hand, you have to be careful not just to give away things to resolve the problem.


  4. Ensure the folks on the phone have access to all the appropriate product and/or service information so they can do the research themselves to answer the question. Try to eliminate having to escalate issues to other people in the network. This should occur less than 10 percent of the time.


  5. When things can’t be resolved, provide a timeline as to when they will be.


  6. Follow up with the client to make sure things worked as described and/or the action items were completed.


Do actual results prove your points?

We recently ran a customer care program that dealt with customers looking to downgrade or cancel a service and found that by doing a bunch of the little things, 75 percent fewer customers actually canceled than were planning to before we started working with the client.

As far as we can tell, no one thing in particular drove this success. But on average, we answered the customers’ calls 30 percent faster, which led to few angry callbacks. We were able to resolve about 10 percent more of the issues on the first call. We armed our communicators with better data so they could identify alternatives and solutions faster and thus made the call about 30 seconds shorter. And we called back over twice as many customers to follow up on unresolved issues.

All of these little things ultimately added up to the fact that customers were more satisfied (by about 11 percentage points) and the amount of business that was actually canceled was 75 percent lower than expected.

STEVE BOYAZIS is executive vice president at InfoCision Management Corp. in Akron. Reach him at (330) 670-5877 or

Wednesday, 28 February 2007 19:00

Tele-profit centers

The business case for any investment must include a reasonable return on investment (ROI). That holds true for call center business as much as for any other aspect of a company’s operations.

Smart Business spoke with Chris Wagner, vice president of marketing at Info-Cision Management Corp., to get tips on creating a solid return on a company’s call center business.

Is the bottom line on ROI simply sales?

In a call center, there are a lot of considerations, and it is not always a straight line to sales. The key is to look at costs outside the call center.

The importance of media cost. For example, if I am a company running ads on TV, the largest cost I have is the advertising that drives calls to the call center. If it costs $5 to handle a call, the cost of driving that call to the call center is likely $15 or $20. Some people say that a cheaper per-minute cost in the call center is key. But if you are not maximizing your return on the cost of driving the call, you will lose out.

The importance of conversion and abandon rate. If I run an ad that drives 100 calls to the call center — at $10 a call, I’ve spent $1,000. Of those, the abandon rate (inability to handle a call) at this particular call center is 10 percent. So I end up with only 90 opportunities to sell. If I sell them at a 50 percent rate, I’ll make 45 sales. If each sale generates $20 of profit, my return is only $900; I actually lose money.

A better call center operation might lose only 2 percent of its calls, leaving 98 chances to sell. If their employees are better at selling, I can get 60 percent of the callers to buy, meaning 58 total sales. At the same $20 profit per sale, I now make money.

The only things that changed were the result of the call center’s ability to handle the calls, the quality of the people on the phone, and the quality of the training, not in the product or the profit per unit. Remember, the biggest cost is usually driving the caller to the call center.

Should the call center be the focus when maximizing ROI?

ROI is not necessarily reflected in the revenue generated by a call to the call center. Studies show that poor call handling can reduce a customer life cycle by as much as 30 percent … all for the cost of improperly handling a $10 phone call.

Additionally, you can benefit from up-sells and cross-sells. We have a utility client who has many customers calling with billing questions. It costs them $7 to handle each billing call. But when we make a $10 per month up-sell to only 5 percent of those customers, we net them $70 annual profit. That eliminates 50 percent of their cost of handling calls. In short, one transaction pays for 10.

The call center should not be a drain on the budget. When properly executed, a call center should — at worst — break even. A well-run customer call center will get you additional sales at no added acquisition cost.

What are some overlooked areas that are ripe for exploring?

Look at customers who called but did not buy. Build a database and handle them specially. Offer them a slightly sweeter deal on the callback. They were half-convinced.

Look at your own customer base and sell them product upgrades, cashing in on brand loyalty.

Traditional metrics focus on reducing call time or handling time. In many cases, the opposite is true. One added minute on a phone call can add ROI. After all, if the customer called in, he or she has some time set aside. You can use that time to up-sell or cross-sell.

Should I expect my call center to suggest ways to maximize returns?

At a lot of companies, the call center is an afterthought. In a partnership, information is shared back and forth. This requires good, open communications. Both the client and the call center need to understand the client’s customer model. Then you can build a strategy that treats the customer in a way that will maximize the return on investment. It lets you create value on each transaction.

If a company doesn’t feel like it is getting this kind of service from its current outsource partner, I would strongly encourage it to have discussions with other competitors. Finding the right fit is the key. If a company has internal call centers that are not performing at this level, I would always encourage split-testing of that center against an outsourced partner. A great way to pick up the creativity on your program is to challenge them against competition. It is also a great way to share best practices.

CHRIS WAGNER is vice president of marketing at InfoCision Management Corp. InfoCision is a privately held teleservices company and is a leading provider of inbound and outbound marketing for nonprofit, commercial, religious and political organizations. Reach Wagner at (330) 668-1400.

Wednesday, 31 January 2007 19:00

Accelerating cash flow

Once a company has earned its money, there is nothing better than getting it in-house, fast. Accelerated cash flow features are offered by commercial banks to help their customers manage and improve the efficiency of their cash-flow process.

“One of the newest services is the result of the Check Clearing for the 21st Century Act, commonly known as Check 21,” says Maureen Murman, vice president of treasury management services for FirstMerit Bank in Cleveland. That law went into effect in October 2004. Smart Business asked Murman more about Check 21 and the processes that help accelerate collections and make depositing funds more convenient.

Briefly review the Check 21 law and what it allows businesses to do.

The Check 21 legislation mandated that banks, businesses and consumers must accept substitute checks as if they were the original check. No organization may opt out. This makes it possible for banks to exchange checks electronically across the full spectrum of check processing and therefore offer customers new services, such as remote deposit.

How do remote deposits work?

A business uses a specialized desktop scanner and software provided by the bank to turn paper checks into electronic images and send the images to the bank with an electronic deposit ticket. The business does not have to send someone to the bank, so it saves time and broadens the banking opportunities beyond the geographically convenient area.

How about other services for getting money into a business account faster?

Traditional bank services that speed up business cash flow include lockbox, sweep accounts and Automated Clearing House (ACH) collections.

Let’s start with ACH first. How does that work?

Automated Clearing House is the term for electronic transactions, the most widely known of which is direct deposit. A nationwide network of financial institutions is linked by this process. A business can initiate an ACH transaction as a charge to its customer’s checking account to collect payments. This has been used for many years by utilities and insurance companies but is now frequently used by clubs, schools, religious groups, service providers ... any organization that is paid on a repeated basis.

ACH transactions can also be initiated online and are an inexpensive option for a business to build into its Web site for online consumer bill pay.

Tell us a bit about the automated sweep programs for paying down loans.

An automated line of credit sweep uses funds to pay down a line as soon as deposited checks are collected. It automatically draws on a line as incoming checks clear at the bank. This minimizes a company’s borrowing. The company does not borrow when it writes checks but when the checks actually get to the bank, which is usually several days later. Sometimes deposits have been made in the meantime, eliminating the need to borrow altogether.

In the nonelectronic area, what about lockbox services?

A lockbox is a post office box from which the bank collects mail on a daily basis, makes the deposit and gives the customer information regarding what was received. The mail tends to get to the bank faster with a lockbox because of the postal system and the consistency of the bank pickup and processing. With electronic banking, images of the checks and any other information received in the lock-box may be seen at the customer’s office the same day the deposit is made. Bank archiving systems also provide very efficient storage and later research of payments, too.

What is a typical fee range for all of these services?

Fees vary widely, based on the services used and the volume of activity within the services. Because these types of services speed up cash flow and improve efficiency, they often pay for themselves either by reducing borrowing costs or allowing staff to use their time more productively.

Who should a business owner talk to about these issues?

The owner should talk to his or her bank relationship manager or treasury management representative about how he or she can take advantage of bank services to improve cash flow. Lacking those contacts, the owner can ask the branch manager for an introduction to the business banking team.

MAUREEN MURMAN is vice president of treasury management services for FirstMerit Bank. Reach her at (216) 694-5637 or

Sunday, 31 December 2006 19:00

Vive la diffrence

People who provide services — investment bankers, consultants, technology firms, investment advisers, financial planners, physicians, lawyers, journalists — are different than people who work at a product-oriented company. They need to be managed differently, too.

“The biggest difference is that in a services firm you are leading leaders,” says Bryan I. Schwartz, partner and chairman of Levenfeld Pearlstein LLC. “People in a medical group, a university, investment bankers, a law firm — all have roughly equivalent educations, backgrounds and opportunities. Your authority to lead them is a function of their willingness to be led.

“Most successful professionals are interdependent, not independent. Those who are independent will never be as successful as those who work with and draw from their peers.”

Smart Business talked to Schwartz about using professional services workers to guide business planning and organizational development.

How do you manage people at companies that provide services?

The top-down, do-what-I-tell-you philosophy works on an assembly line. Your need to have willing employees is less because they are following a prescribed system. Not a lot of people question authority in a top-down organization. But in a partnership-style governing body, authority is more ambiguous. Telling someone what to do is less important than getting him to buy into the program.

The skills required to lead people who are leaders in their own right is different than that required to impose authority in other settings. It’s all about the talent. Talented people want to get to the next level. Everyone, wherever they work, needs to feel they have the right career path, not merely a job. The service-firm employee has more choices among employers than the line person.

Where does a manager start?

It all begins with recruiting. We look for a business-culture fit, technical ability and leadership ability. Sometimes I spend four hours on one interview. It’s a big investment, but if the hire does not work out, it could cost us hundreds of thousands of dollars and other problems that do not appear on the bottom line.

We do a lot of psychological evaluation — looking at who the person is as a human being, more than the skills they bring to the job. They need skills, of course, but chemistry is vitally important. In a service business, it’s all about energy. That energy can be accelerated by hiring people who are aligned with the firm’s focus … or it can be sucked out by an energy vampire who is not attuned to the company’s goals.

How do you know who fits?

I like to look at patterns of success, starting from childbirth. How were they raised? What is their moral code? Why did they choose a school? Did they play sports?

Sports are important. The marathon runner or golfer does not have the team approach a football or soccer player has. It is a generalization, but individually focused people will never be as successful in a service-firm setting as the more gregarious team player.

How do employees of services companies differ from employees at manufacturing companies?

A manufacturer looks first for a person who can help the business. A services company should first look for an individual who is the right fit. The right fit is more important than the ability to bring in money. If a service firm does not have the right platform, it cannot obtain the right people and the business will not go anywhere.

Under top-down management, one’s career is always subordinate to the company’s goals. In a service firm, one’s career and the company’s goals must be aligned. Remember, most top-level employees in a services firm are looking for a career, not a job.

There are people who can bring in a lot of money, but they create a cancer in the firm. In a services firm, people are your widgets. Your brand is your people. If you hire the wrong kind of people, you send the wrong message. Just like the weakest link in a chain, the worst person in a services firm sets your company’s image.

Is there a litmus test?

I like the old lunch-versus-sleep test. Interview a candidate. Then decide: is this person fun to lunch with? That is fine, but not vital. Then ask, If I gave this person an important task, could I go home and sleep confidently that he or she will do the job well? If the answer is ‘yes,’ it is that latter person you want to hire.

BRYAN I. SCHWARTZ is a partner, firm chairman, and driving force behind the creation and continued success of Levenfeld Pearlstein LLC. Reach him at or (312) 346-8380.

Thursday, 30 November 2006 19:00

Intelligent contingencies


 What would happen if a tornado hit your distribution center? If a key person or piece of technology is

knocked out for an extended period? If a snowstorm kills power to headquarters? Is your business ready to cope intelligently and systematically with a business interruption?

One way to be sure your business is ready is to have an updated contingency management plan ready for use.

“There is no silver bullet,” says Rod Keeley, business continuity manager with Westfield Group. “But having something is better than having nothing.”

Smart Business asked Keeley for more information about planning for business interruptions.

When did contingency management become such a hot button for businesses?

It started with Y2K, the computer software compatibility issue back in 1999. People began to realize that a single issue could totally disrupt their business. Then came September 11 and storms like Hurricane Katrina.

What is the first step in building a plan?

Create a business impact analysis (BIA). This is a survey to help you identify where your risks and vulnerabilities are. It also highlights ways to mitigate the risks.

Look at your business as a whole, not just information technology and computers. In our case, we have identified 17 business-critical departments in addition to our information technology department through our BIA and contingency plan.

Is this disaster recovery?

Business continuity is for business operations and processes. Disaster recovery is for the information technology and telecommunications that support these business processes. In our case, I have a peer on the IT side and we work together.

Where do you start?

We look at the biggest risks that could

impact our business. As an insurance company, we have that mindset as part of our culture. We look for ways to identify and mitigate risk. Contingency management is really just another part of your overall risk management program, and you should give it the same attention you would your insurance coverage or risk control measures.

It is important to get buy-in from the top down. The executives and department heads need to be fully committed. Sometimes you run into someone who will say, ‘We’ve been here 150 years, nothing has happened, what’s the risk?’ But stuff happens every day.

For us, it was not a hard sell since we sell protection. But you have to get that buy-in from the top.

What do you look at?

The question to answer is, ‘How will we recover from a disaster?’ We look at technology to help us communicate internally, with the media, our customers and our agency partners. We always plan for the worst case … but it is often something much less disastrous that will trip the plan; a weather incident, for example, that shuts down the system.

Any business interruption should trip the plan. It does not need to be a worst-case crisis or major emergency. Even a power outage or security breach is covered.

Next, look at what will be affected — your financials, brand image and ability to serve customers. Then find ways to close the gap.

And how do you close the gap?

We have a plan for each of our critical units, with manual work-arounds for every contingency we can think of. It has a list of steps to take, who to contact, what needs to be done. For computers, you can look at services that replicate the data center off-site. Depending on your needs, that might be 20 miles away or 100 miles away. This allows you to mirror or back up your data on a daily, weekly or monthly basis. Obviously, that requirement will change if you are a financial firm, a hospital, or a plumbing supply outlet.

It may sound trite, but you need to take a holistic approach to the business and what needs to be protected. Look for any vulnerability that will impact your ability to continue to support your customers.

Are there places to go for help?

One good group is the Contingency Planners of Ohio ( I attend their meetings regularly. There are similar groups in other states.

How long does it take to get started?

It’s an ‘as-soon-as-possible’ job. Get executive buy-in and then start writing the plan. Start with each department and look at its business processes. Re-examine the business processes every time a new group or focus is added to the business, then test how well each part of the plan works.

ROD KEELEY, certified business continuity planner (CBCP), is the business continuity manager with Westfield Group. Reach him at (330) 887-6438 or In business for more than 157 years, Westfield Insurance provides commercial and personal insurance services to customers in 17 states. Represented by leading independent insurance agencies, the product we offer is peace of mind, and our promise of protection is supported by a commitment to service excellence. For more information, visit

Friday, 22 September 2006 10:42

Choosing a commercial banker

Picking a commercial bank is a bit like choosing a spouse. In both cases, you will be picking a partner who will be with you through good times and bad, who will be privy to your business’s innermost financial dealings, and who can give the kind of advice and support that usually is received only from a long-term friend.

Smart Business asked David J. Janus, president and CEO of FirstMerit’s Cleveland-area office, about the banker-business relationship as it applies to the commercial market.

What should a business be looking for when choosing a bank?
Relationship, relationship, relationship! How do you define relationship? Assuming a small or medium-sized privately-held business, the owners and professional managers of the business must know the banker, their team leader and the next level up of management, and the credit officer. We rely on the people we know who represent the organization we do business with. It’s as simple as that. If you don’t know the people representing the bank, you have no relationship.

On the hard-dollars side of the question, outstanding customer service at a competitive price is one of the key factors in choosing a bank.

What kinds of things are most important to a business in today’s market if it is looking for a new bank?
Again, relationship, relationship, relationship! Most banks have the same or similar products and services. How you differentiate a bank is by the relationship. Does my banker keep in touch? Is the banker just pitching product or is the banker a ‘businessperson who happens to work at a bank?’ Does the banker really understand my business?

Look for a bank with access to capital to fund operations and growth of your business model. You want a relationship manager with experience ... someone you won’t have to continually educate about your business.

If there are parts of an existing relationship that need to be fixed, how does one go about working this?
Tell the banker that you’d like to have a ‘relationship review’ with all of the product partners with whom you do business — including credit. It’s a great way to all get on the same page and to have a candid discussion.

When you go into a relationship, figure out quickly who the decision-makers are. Who is your advocate in the bank? If you don’t have one, get one. Make sure he or she is high enough up the ‘food chain.’

Should the size of a banking partner vary depending on the size of the business?
Good question. I’ve worked for very large, large, medium, and smaller banks. You want to work with a bank that can meet your needs. The bank that can lend $1 billion in foreign currency and issue debt for customers in Europe is not what a small or medium-sized business needs. Multi-national companies require multi-national banks; small and medium-sized businesses do not.

In fairness to big banks, though, that doesn’t mean they’re not capable of helping companies that are not multi-national. The decision for the business owner then becomes, ‘Am I going to have a good relationship with this bank and am I going to get to know the decision-makers?’

Really, though, the size of a banking partner matters only on the very large end of the market.

How does a business go about a needs assessment when choosing a bank?
You have to ask yourself and your financial people what’s working and what’s not.

Can one get assurances that they’ll be dealing with an experienced banker, not a rookie?
You need to know more people at the bank because things will change over time.

What is the value of a local banker against a big-capital bank that might be out of town?
A local banker suffers the highs and lows of the economic cycle with you and your business. He or she has more at stake because he/she has a home here, belongs to the same church, school and community groups. You know the decision-makers and they know you.

How long should I expect it to take before a new bank is up to speed on my business needs?
It is important for you to be up to speed prior to changing.

DAVID J. JANUS is president and CEO of FirstMerit Cleveland area office. He has 28 years of commercial banking experience. Reach him at (216) 694-5658.