Mindfulness, a concept originally characterized by Ellen Langer in 1989 as a state of alertness that is manifested in active information processing, includes creating new categories rather than relying on categories present in our memory; welcoming new information by being open and attending to changed signals, welcoming more than one view and being aware of multiple interpretations, and avoiding being on auto-pilot.
In 1999, Karl Weick and Kathleen Sutcliffe extended the concept of individual mindfulness to the collective dimension, describing it as the widespread adoption and diffusion of mindfulness by the organization’s members. Mindfulness helps organizations to notice more issues, process them with care, and detect and respond to early signs of trouble. Weick and Sutcliffe describe five cognitive processes that constitute organizational mindfulness: Preoccupation with failure, reluctance to simplify interpretations, sensitivity to operations, commitment to resilience, and deference to expertise. These, they contend, are prevalent among members of high reliability organizations.
So how does organizational mindfulness apply to the management of organizations?
Let us look at these five processes one by one.
Preoccupation with failures
Mindful organizations demonstrate an ability to learn from failures and breakdowns. The organization learns from what did not work and identifies gaps to ensure transformational success. These firms see failures as an opportunity to learn and to try again instead of getting discouraged and throwing in the towel.
In no way does this mean that you ought to get totally absorbed with failures. Mindful leaders spend equal time celebrating successes and analyzing failures to move the organization forward.
Reluctance to simplify interpretations
High performance organizations refuse to simplify interpretations, especially when facing intense competition, increased complexity and large amounts of data.
Business professionals are exposed to an enormous amount of internal data and market information. They face variations in the degree of analyzability of market information, in the degree of information commensurability, and in the equivocality of information coming out of multiple sources in the organization.
The inherent levels of information uncertainty and ambiguity require they focus on complex problems without reducing and oversimplifying them.
Sensitivity to operations
Leaders of mindful organizations purposefully invest in developing capabilities of their front line personnel. They pay attention to all organizational actors whether in leadership or in the “trenches.”
Mindful leaders listen actively to the rumor mill and embrace feedback coming from organizational skeptics. Being sensitive to operations also entails adjusting strategic programs by taking into account the knowledge of people who actually do the work.
Commitment to resilience
Resilience is one of the dimensions of the organizational confidence construct.
Leaders of mindful organizations commit to the success of all organizational programs. They purposefully develop shared beliefs, courage and resilience when implementing business strategies so that the organization keeps going when facing adversity.
The role of organizational champions and change agents is equally important to build collective confidence in teams.
Deference to experts
Decision-makers in business units should rely on the expertise of specialized centers of excellence to optimize business decisions and firm performance. Business leaders should avoid improvising and ought to defer tough decisions or complex problems to internal experts.
The five characteristics of high reliability organizations proposed by Weick and Sutcliffe can be applied and operationalized by any company in search of business excellence. Organizational mindfulness and mindful champions can play a critical role in the success of organizations. I call this mindful business management. I encourage you to read more about this emerging theory on organizational mindfulness.
Stephan Liozu (www.stephanliozu.com) is the founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management. He earned a Ph.D. in management at Case Western Reserve University and can be reached at firstname.lastname@example.org.
Whether you are looking to manage your own assets, control how your assets are distributed after your death, plan for incapacity or enable your business to continue uninterrupted should something happen to you, trusts can help you accomplish your estate planning goals. By establishing a trust, you ensure that the assets gathered during your life will not disappear because of the inexperience or inability of beneficiaries. A byproduct of that is the peace of mind that comes from knowing your loved ones will continue to be financially protected.
“One of the benefits of a trust is that it’s established based on the unique needs and objectives of the individual and the individual’s family, and tailored to meet those needs,” says Susan L. Nelson, CTFA, Senior Trust Executive and Senior Vice President at First Commonwealth Advisors.
Smart Business spoke with Nelson about the benefits and management of trusts.
What are the different types of trusts?
There are many types of trusts, the most basic being the revocable and irrevocable. The type of trust you use will depend on what you are trying to accomplish. A revocable trust, often referred to as a living trust, allows the individual establishing the trust to remain in control of the assets and allows them to change the beneficiary, the trustee, the trust terms and even end the trust. The grantor can use the trust for investment management, bill paying, tax planning and avoidance of probate. It can continue on in the event of incapacity, providing seamless financial management for the grantor, and can continue on after death for the benefit of others. Once the grantor dies, the trust becomes irrevocable.
An irrevocable trust is where the grantor gives complete control to an independent trustee who manages the assets for the grantor and beneficiaries. You cannot easily change or revoke this type of trust. It’s frequently used to minimize potential estate taxes by reducing the taxable estate of the grantor because the assets transferred to this trust, plus any future appreciation, are removed from the grantor’s gross estate. Additionally, property transferred through an irrevocable trust will avoid probate and may be protected from future creditors.
What are the benefits of trusts?
Some benefits are:
- Continuous financial management in the event of incapacity.
- Professional investment management.
- Financial privacy — a trust isn’t public like a will.
- Probate avoidance with no lapse in asset protection and investments — probate can take a year or more, depending on the complexity.
- Asset management for inheritances.
- Creditor protection for heirs. If a beneficiary is going through bankruptcy, money in the trust cannot be touched.
Trusts can provide lifetime financial protection for a surviving spouse or disabled child, an inheritance for children from an earlier marriage, can minimize estate taxes and provide a future legacy for charity. Trusts can be used in order to protect, preserve and transfer wealth for the benefit of individuals, families and organizations. While trusts can be used for myriad circumstances, they are not for everyone. Discuss the advantages and benefits of a trust for your situation with a financial adviser.
How should a trust be managed?
Every trust is based on your needs and objectives. When setting up the trust, determine what you’re trying to accomplish so you and your financial adviser can decide how to reach those objectives. One of the first things looked at are tax implications and how to reduce pain points. Providing for future beneficiaries should also be examined. After the trust is established, you’ll need to meet periodically to discuss the investment portfolio and life changes to be certain the trust still meets your needs.
Why choose a professional trustee?
Institutional fiduciaries are pros at what they do, have professionals on staff with years of experience, and are on the cutting edge of regulatory and tax law changes. They may be the best option for reliability, experience, responsiveness, neutrality and arms-length objectivity with beneficiaries, objective investment guidance, convenience and consistency over time. An institutional fiduciary doesn’t age or die.
Susan L. Nelson, CTFA, is a senior trust executive and senior vice president at First Commonwealth Advisors. Reach her at (724) 832-6062 or email@example.com.
Follow up: To learn more, call (855) ASK-4-FCA, or visit ask4fca.com.
Insights Wealth Management is brought to you by First Commonwealth Bank
Holding the line on health care costs has long been an ongoing concern of insurers, employers and consumers. In recent years the use of value-based networks for providers has become more popular. These networks are also sometimes referred to as narrow, tiered or high-performing networks.
Essentially, value-based networks encourage members to utilize the more efficient providers — meaning hospitals or physicians — by either narrowing networks, or by lowering copayments or deductibles for providers in different tiers in the network.
“Value-based networks are a variation on the long-established practice of having one level of benefits for in-network providers and another level for those out of network,” says Andrea Gioia, executive director for Product Innovation at UPMC Health Plan. “The difference is, with a value-based network the member can choose the providers he or she prefers based on the criteria that are most important to him or her.”
Smart Business spoke with Gioia about how value-based networks can make sense for employers who are looking to reduce health care costs.
How does a value-based network system work?
A value-based network system is an attempt by insurers and employers to contain costs by offering health benefits plans that offer employees a real choice. Depending on the provider they choose, the employee may be able to pay lower copayments or have a lower deductible.
More financial responsibility falls on the member in terms of decision-making and, as a result, this should encourage initiatives that will provide better information about the cost and quality of health care in order to make more informed decisions.
The health insurer makes the determination about which tier hospitals or physicians will be on. This could be based on the rates the insurer is charged, as well as the quality and efficiency of care being offered. With a value-based network system, when an insurer saves money by getting lower rates from certain hospitals, those savings are passed along to the member in the form of lower out-of-pocket costs such as a lower copayment or a lower deductible.
Quality is determined through claims-based methods, external certification and health information technology.
Why are value-based network systems becoming more available?
A lot of factors are at work, including the fact that there is a demand for more consumer-driven options. Certainly, employers as well as employees are increasingly interested in finding ways to contain health care costs and hold down the cost of premiums. Value-based networks can deliver in both areas.
What could be the consequences of value-based networks?
Ideally, a value-based network system should engage its members in the process. Members have more incentive than ever to be involved in choosing providers and treatment because they are exposed to higher out-of-pocket expenses.
In addition, this could spur competition between providers to cut costs and raise quality standards in order to avoid landing on the higher-priced tiers. Estimates have indicated that tiered products, on average, are priced 10 to 15 percent lower than non-tiered and HMO products.
Health insurers tend to support value-based networks because it gives consumers skin in the game. The consumer will have a financial interest in health care decisions beyond the cost of a premium.
Can value-based networks impact quality?
When a provider’s tier is tied to quality, the potential is certainly there that a value-based network will not only encourage better value but also drive providers to perform better and more efficiently. As cost and quality information becomes more available to consumers of health care, the more likely it will be that consumers will base their health care decisions on this information. This has the potential to drive change in health care in a positive direction.
Andrea Gioia is an executive director, Product Innovation, at UPMC Health Plan. Reach her at (412) 454-8293 or firstname.lastname@example.org.
Save the date: Join UPMC WorkPartners for an upcoming webinar, “Keys to a Successful Health Management Incentive Program,” at 10 a.m., June 27. To register, contact Lauren Formato at email@example.com or (412) 454-8838.
Insights Health Care is brought to you by UPMC Health Plan
Most news surrounding the implementation of the Patient Protection and Affordable Care Act (PPACA) pertains to the employer penalties for noncompliance with the large employers’ shared responsibility provision that begins with the 2014 plan year. However, how does PPACA apply if an employer has fewer than 50 full-time equivalent employees?
Smart Business spoke with Whitford about how smaller business owners need to be counting employees carefully and preparing for PPACA provisions.
How is employer size defined?
A large employer is defined as having 50 or more full-time equivalent employees during a testing period that can be from six to 12 months. Full time is defined by the government as 30 hours per week.
The term equivalent is used to account for those who work less than 30 hours per week. For example, if an employer has 30 full-time employees working 30 hours each week and three part-time employees working 20 hours each week, it has 32 full-time equivalent employees. The part-time hours per month are added, then divided by 130 to determine additional full-time equivalent employees.
There is some relief for seasonal workers.
How does PPACA apply to small employers?
The employer penalties are just one piece. All employers are subject to certain rules if providing a health insurance plan, such as:
- Waiting periods for eligibility cannot exceed 90 days, beginning in 2014.
- Continuing to cover dependents of employees until age 26, in most cases.
- Providing a Summary of Benefits and Coverage to each employee at specific events, such as open enrollment.
- Supplying 60-day notification for any plan changes, except at renewal.
What are some other considerations?
If a plan is not grandfathered — hasn’t changed since the law went into effect in 2010 — then it must continue to waive all cost sharing for preventive care services, which includes women’s preventive care for plans renewing on or after Aug. 1, 2012.
Employers also must offer employees information on the public insurance exchange whether providing health coverage or not. The law requires this notice be distributed each March; however, it has been delayed in 2013, pending Department of Labor guidance.
In 2014, all non-grandfathered small group plans will have limits on the deductibles charged in-network. The maximum deductible will be $2,000 per individual and $4,000 per family. There also will be out-of-pocket limits that apply to all non-grandfathered plans. These limits are the same as those for high deductible health plans, which this year is $6,250 for an individual and $12,500 for a family.
How will the pricing methodology change?
The biggest change for small employers will be the pricing methodology applied to group insurance plans. Insurance companies will be unable to use gender, industry, group size or medical history, and therefore are limited to family size, geography, tobacco use and age. The companies can charge the oldest ages no more than three times what they charge the youngest ages. Many insurance companies use a ratio of 7:1 or higher, so this should result in higher rates for younger, healthier groups and better rates for older, less healthy groups. In addition, there will be new taxes and fees passed through to the employer in 2014.
Where do small employers have flexibility?
A small employer, with fewer than 50 full-time employees, has more flexibility in determining how many hours an employee must work to be benefits-eligible. For example, a small employer can establish 37.5 hours as the minimum to be eligible for the company health plan, so employees regularly working less than 37.5 hours aren’t eligible. Those employees most likely are eligible for a subsidy to purchase coverage in the public insurance exchange. But, as a small employer not subject to the employer penalties, there are no financial consequences.
Because of the complexities, employers are encouraged to review their employee count and other pending health care reform legislation with a qualified advisor.
Chuck Whitford is a client advisor at JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7257 or firstname.lastname@example.org.
Insights Employee Benefits is brought to you by ChamberChoice
When you go to the dictionary to look for the definition of focus, you will see such lofty things as:
“the point where the geometrical lines or their prolongations conforming to the rays diverging from or converging toward another point intersect and give rise to an image after reflection by a mirror or refraction by a lens or optical system.”
“a point at which rays (as of light, heat, or sound) converge or from which they diverge or appear to diverge.”
Luckily, for those of us that are not physicists, I did find one definition that makes sense when trying to understand the meaning of focus:
“a point of concentration or directed attention.”
What do you concentrate on the most with your business? Where do you direct your attention? These are the questions of focus. Over the years in my coaching and speaking, I have found them to be of utmost importance to the success of those in the workplace.
Let's look at 5 tips for improving your focus as a busy professional.
1. Stop doing what you are doing.
If you struggle with focus on a daily basis and you continue to think and act in the same manner – you need to stop and stop right now.
The quote that is often attributed to Albert Einstein speaks to us here: “Insanity is doing the same thing over and over again and expecting different results.”
Stop. Breathe. Assess. Evaluate.
This leads us to our second tip.
2. Determine what needs your concentration and attention.
In the workplace, too many people “fly by the seat of their pants” when it comes to what needs to get done. In most instances, it is pure laziness that sustains this way of doing things. It takes work to stay focused and be successful.
As I said above, you will need to assess and evaluate in order to determine what needs your directed attention. Hopefully you have goals in place for yourself and your team. Let those goals be the defining line for your focus.
This leads us to our third tip for improving your focus as a busy professional.
3. Clear all unnecessary distractions.
Once you have determined the areas and actions that need your concentration, it is time to laser target your focus. In order to do this, you must clear away anything that would disrupt, distract or lessen your laser focus.
- Cell phones
- Social Media
- Instant Messaging
- Tasks that could be delegated
Make a list of all the things that you must stop doing in order to stay focused. This is the opposite of the normal to-do list. It will make clear what needs to be cut out from your daily routine.
Some distractions are going to be hard to give up because they have imbedded themselves as habits – and habits take time to change. Development of laser-targeted focus does not happen overnight, but it must be practiced daily in order to achieve its mastery.
4. Work in 60- to 90-minute blocks of time and provide yourself a reward.
Do not expect too much from your focus. Saying that you are going “to work until it's done” is an overload for most of us. It is also too vague and not goal-oriented.
Set aside a specific amount of time for a designated task. Studies have shown that we do well when we block off 60- or 90- minute time frames. This allows you to see the light at the end of the tunnel and know that a break is coming.
As we work, our alertness drops off, increasing the lure of distractions. Set a timer and take a break at the end of each cycle.
How about a reward? We all like rewards in one form or another – even if we are the one giving the reward. Say to yourself, “After this 90 minute session of work I am going to take a 10 minute break and walk around the building.”
Other possible rewards are:
- A snack (be careful not to overindulge and get sleepy)
- Text messaging
- Fresh air
5. Learn to say no.
I mentioned delegated tasks earlier. Many busy professionals struggle with delegation. We tend to hold the old attitude of“if you want something done right, do it yourself.”This might be true in the here and now, but in the long run it will lead to lack of focus and, ultimately, exhaustion.
Learning to delegate is a form of learning to say no. “No, not me, not now.” When we learn to say no, we are truly saying yes to our focus.
There are many other tips that one can use to stay focused. These are the five that I have found to be the most useful. Take the time today to try one, two or all of them. Your goals deserve your focus. Your team deserves your focus. You deserve it as well.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” Contact her via email at email@example.com or visit her website at www.delorespressley.com.
The ultimate endgame in any marketing strategy is conversion.
While conversion means different things to different industry sectors, the actions of reaching conversion are universal. In retail, for example, it means searching for and buying a specific product online or in a store. In business-to-business, conversion could be when a prospective client reaches out with their contact information or and requests more information to engage with your services.
Conversion is a multitiered journey that consists of navigating through three steps — awareness, interest and engagement.
Awareness, essentially developing a brand message that resonates across all channels (such as Web, offline, print, mobile and video) is relatively straightforward if you have the proper brand strategy. You must define two things: who you are and what it is you’re trying to say.
However, converting awareness into interest, and eventually engagement, is where organizations most often lose their way.
I personally see this problem regularly manifest itself during a review of an organization’s website. Often, there are too many words and screens of text to sift through, and those words are either clichés or don’t really mean anything to the organization’s prospective — or current — clients.
The bottom line: The organization gained my awareness but lost my interest. Conversion is less likely a potential outcome.
This, however, is easily solvable.
One way to turn awareness into interest is by creating more consumable content, which is defined as providing, in a simple and nonoverwhelming way, the key points that will grab someone’s attention to learn more about what you do and what you offer.
Think of it this way: Develop clean, concise copy that clearly defines what you do and why you’re different from the competition and that articulates your value proposition, without being wordy. You should not have to scroll down more than one time on a Web page to accomplish this goal.
When you look at traditional advertising, the same problem exists. Review your current ads and ask yourself these questions: Are you running an ad that truly reflects your brand? Does it articulate your intended message and your brand through a series of a few choice words? And is there a defined call to action?
Now consider how you’re messaging to your prospects live, such as through your organization’s presence at trade shows.
At your booth, are you presenting a video reel that drones on for five or 10 minutes and includes every aspect of your company? Why waste a lot of money producing a corporate video that is too long, boring and that no one will watch? You will never see an ROI for your efforts.
Instead, determine whether you can develop a short experience at your booth that captures your desired audience’s attention. For example, combine a simple one-page handout with a brief video — no more than a minute long — that uses powerful imagery, focused messaging on your differentiators and a series of client icons that demonstrate who you work with.
You can always expand upon that brief overview video through a series of short complementary videos that are focused and highlight different segments of what your organization does and how it does it.
Let your prospect choose which area of your business he or she is interested in and wants to learn more about — whether it’s through your website, in print or in person. When someone chooses to learn more, it’s a safe bet that he or she is engaged.
The initial goal of all of this should be to generate interest rather than make a sale. The time for conversion is later, but you’ll never get there if you don’t generate interest and engagement first.
Dave Fazekas is vice president of digital marketing for Smart Business Network. Reach him at firstname.lastname@example.org or (440) 250-7056.
What if the leaders at IBM had stuck to making punch card equipment? What if after making the transition to the personal computer market, they had stayed entrenched there?
Punch card equipment is long gone, and with recent PC sales numbers significantly in decline, the leaders of IBM have stayed ahead of monumental changes in the market and kept the company moving forward for decades.
An open mind.
Too often, CEOs place self-imposed limitations on themselves, both in business and personally. The status quo becomes acceptable and new ideas become verboten. When this happens, growth is stifled — a dangerous situation. Many business gurus will tell you that you are either growing or dying. A stagnant company sees itself as not losing ground, but as its competitors move forward, its relative position in the market fades, even though it views itself as standing firm.
The only way to avoid this is to keep an open mind. CEOs need to constantly grow and learn from a personal perspective — so they constantly improve their leadership and people skills — and also from a business perspective — so new ideas are allowed to push the organization forward.
While there are many approaches to keeping an open mind, here are three ways to get started.
- Embrace trial-and-error. Finding success might require experiencing a dozen failures. Whether it’s a new way of running a meeting or trying to find the next innovative product, accept the fact that success has a cost. Don’t eliminate an idea because it goes against what the company has always done.
- Seek knowledge. As a professional, a CEO should never stop learning. There should always be a curiosity about your industry that drives you to seek an understanding of the latest trends and strategies, but you should be constantly looking at other industries as well. Often, best practices in one industry can be applied to another. If you are the first to make the move, it will give you an advantage over the competition.
- Find a mentor. The right mentor can make you aware of your blind spots. Without someone to offer a different perspective, it is easy to fall into familiar ways of thinking, thus stifling the chance of new ideas taking root.
The longer a CEO runs a business, the easier it is to fall into the trap of doing what worked yesterday or last week. When this goes on long enough, the business ends up with an overall strategy that is several years old.
You would never say, “Let’s use the same strategy we developed five years ago,” but because of a closed mind, that’s what ends up happening by default.
Be vigilant about your search for knowledge. In the end, it will make you a better leader and improve your company’s chances for success.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
When you flip a light switch, turn on the water or start your car, you expect reliability every time. For employees, it’s just as mandatory that they be reliable, by showing up on time, completing the tasks at hand and basically doing their jobs time and time again.
By the same token, your employees expect you, as their leader, to be reliable. This means when you say you’ll do something, you do it, when they need direction, you provide it, and when the chips are down, you’ll be there for them.
Being reliable is good, but being too predictable — not always. In fact, being too conventional can make your company a “me, too” organization that only reacts to what the competition does, rather than taking the lead. It can be a bit more daring to set the trend, but if managed and controlled correctly, the rewards dramatically outweigh the risks.
Warning signs that your leadership has become too predictable occur when your subordinates begin finishing your sentences and know what you will think and say before you utter that first word on just about every topic. Compounding the problem is when your employees begin to perpetuate the negative effect of you being so darn predicable by believing it themselves and telling others, “Don’t even think about that; there’s no point bringing up your idea about X, Y or Z because the boss will shoot you down before you take your next breath.” This bridles creativity and stifles people’s thinking and stretching for new ideas.
It’s human nature for subordinates to want to please the chief. Under the right circumstances, that can be good, particularly if you are the chief. But it can be a very bad thing if you are looking for fresh concepts that have never before been run up the flagpole.
Uniqueness is the foundation of innovation and the catalyst for breaking new ground. George Bernard Shaw, the noted Irish playwright and co-founder of the London School of Economics, characterized innovation best when he wrote: “Some look at things that are and ask why. I dream of things that never were and ask why not?”
The “why not” portion of this quote is the lifeblood of every organization. A status quo attitude can ultimately do a company in, as it will just be a matter of time until somebody finds a better way.
As a leader, the first step in motivating people to reach higher is to dispel the image that you’re exclusively a predictable, same-old, same-old type of executive who wants things a certain way every time. There are dozens of signals that a boss can give to alter a long-standing image and dispel entrenched mindsets. You can always have a midlife crisis and show up at work in a Porsche or Ferrari instead of your unremarkable Buick. This flash of flamboyance will certainly get people questioning what they thought was sacrosanct about you. The cool car might also be a lot of fun; however, the theatrics might be a bit over the top for some, not to mention a costly stage prop just to send a message.
A better solution is to begin modifying how you interface with your team, how you answer inquiries from them and, most importantly, how to ask open-ended questions that are not your typical, “How do we do this or that?”
Another technique is when somebody begins to answer your question, before you’ve finished asking, particularly in a meeting, abruptly interrupt the person. Next, throw him off guard by stating, “don’t tell us what we already know.” Instead, assert that you’re looking for ideas about how to reinvent whatever it is you want reinvented or improved in giant steps as opposed to evolutionary baby steps. If you’re feeling particularly bold, for emphasis, try abruptly just getting up and walking out of the meeting. In short order, your associates will start thinking differently. They’ll cease providing you with the answers they think you want. Some players will hate the new you, but the good ones will rise to the occasion and sharpen their games.
If you want reliability, flip the light switch. To jump-start innovation, you could begin driving that head-turning sports car. Better yet, get your team thinking by how you ask and answer questions and by not always being 100 percent predictable but always reliable.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at firstname.lastname@example.org.
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Nicholas DeIuliis keeps Consol Energy Inc. on its toes by turning potential energy into kinetic energyWritten by Gregory Jones
If you ask Nicholas DeIuliis about the state of the energy industry these days, he would tell you it’s the nature of the industry that keeps it exciting and evolving.
DeIuliis is president of Consol Energy Inc., a more than $6 billion, publicly owned producer of coal and natural gas and one of the leading diversified energy companies in the U.S. He and Consol have been focused on new technologies, new energies and, above all else, keeping Consol one of the leading producers in its region.
“Energy has always been a big issue within our regional economy, national economy and now the global economy within the last number of years,” DeIuliis says. “Consol Energy still looks upon those tried and true forms of energy, but what’s really changed in the last number of years is how we’ve evolved in deploying technology in both the coal and natural gas side.”
As the industry continues to push forward, the success of companies such as Consol depend upon its ability to keep employees safe, effectively communicating and remaining innovative.
“The most important thing we do is we establish what our values are and we literally numerate them for our teams,” DeIuliis says. “We say what our top values are and which is first, second and third. For us, No. 1 is safety. Second is compliance. And third is continuous improvement and taking a long-term view.”
Here is how DeIuliis is helping to drive those values at Consol Energy that, in turn, help drive the company.
In the energy industry, there are all kinds of dangers that employees face while on the job. DeIuliis and his team take great pride in running a company that focuses on keeping its workforce safe.
“Safety has always been something that is critical to us throughout our history, and we’ve been around for about 150 years,” DeIuliis says. “So we’ve learned what works very well and also learned the hard way through those 150 years what doesn’t work very well when it comes to safety.”
DeIuliis wants to take the challenge of safety and turn it into an opportunity, which sounds simple, but it’s often very challenging.
“We first started with the philosophy of safety itself,” he says. “What is our culture going to be when it comes to safety? Is it truly going to be our top value that will not change during market swings? A value is something that is constant. So first and foremost, that is our most important top value.
“Secondly, if it’s our top value, what’s the expectation going to be? Are accidents part of the business of extracting natural gas or coal resources, or can we truly take an approach of zero accidents of any kind across the entire employee base as the expected outcome and expected goal?”
Consol has taken the latter approach and created an absolute zero program that says the only acceptable standard of performance is no accidents to the employees on any given day across the entire company.
“Anything that’s an accident no matter how small or slight is an exception to that rule and a violation to that philosophy,” he says. “So you have that philosophical change that needed to occur to turn a challenge into opportunity, and over the last three or four years, it has turned and evolved into the culture and philosophy.”
Now DeIuliis and Consol have to find the ways to further improve the company’s safety outlook.
“What are the tactical things we’re going to do to improve our performance?” he says. “How are we going to bring the science and technology to the table to get smarter about risk identification, hazardous mitigation and overall employee training? All of those things lead you to a better place on safety performance.”
Communication is king
In conjunction with safety performance, how well Consol Energy communicates its message relates to how easily and effectively it can improve the organization.
“Communication is the lifeblood of taking a concept or an opportunity and making it a reality,” DeIuliis says.
Consol Energy has nearly 10,000 employees and 6,000 to 8,000 contractors on top of that. So communication throughout the organization is critically important to furthering a concept, philosophy, a new technology or standard, and whether or not that comes to fruition — and when it comes to fruition.
“Sometimes the when part is just as challenging and just as important as whether or not it actually comes to fruition,” he says. “You can’t overemphasize the importance of communication, especially in a complex and large organization or a complex and large world such as what we’ve seen in the energy space throughout the U.S. and the globe.”
Saying that your company communicates is easy, but actually getting results from your communication is much more difficult. You have to utilize multiple communication tactics.
“We use what we call a portfolio approach to communication,” DeIuliis says. “We don’t put all our eggs in one basket, one means or one method of communication. We will utilize a range of those like you would in an investment portfolio.”
Consol uses everything from closed-circuit TVs that update employees on safety procedures, initiatives, technological breakthroughs, compliance issues and regulatory issues to training programs to make sure that employees are engaged.
“We look at that as an investment in communication that is going to get that know-how rate of return, which will be very good, not just for the shareholders of the company and stakeholders but, most importantly, for the employees themselves, because they will be in a more safe and compliant place,” he says.
“There’s a whole range of different communication tools that we use … that will put us in a better position to succeed in that communication challenge and opportunity.”
In order for communication to be most effective, especially in a company the size of Consol, there has to be someone who has ownership of the messages being spread throughout the business.
“The communication approach goes back to the messaging and the content of what you’re saying,” he says. “The ownership is across the entire company. In reality, it extends beyond the employees within the company. It extends to our partners and other stakeholders that touch or deal with the company in some, way, shape or form. It might be the customers downstream that we’re selling the coal and natural gas to; it could be our contractor partners providing services at our rig sites and coal mines or anyone in between.”
While everyone owns a part of the communication process, it’s also critically important that that communication process and the messaging behind the communication are viewed as owned by action, not just by words with the leadership of the company.
“The leadership of the company for us means many different people, not just our CEO and chairman,” DeIuliis says. “It’s our CEO and chairman all the way down to the mine foreman, all the way down to the employee working on the barge line or all the way down to someone standing on one of our rigs right now.
“It’s a group effort and everybody has a role and a responsibility. Your actions have to be consistent with what you’re saying.”
Just as important as safety and communication are within the energy industry, so too is the need to remain innovative. Recent substantial growth in natural gas drilling and advancements in clean coal technology are two areas driving energy these days.
DeIuliis and Consol look inside and outside the industry in order to bring the best innovation to the forefront of the company’s operations.
“There are two broad groups I look to over time for help and insight,” DeIuliis says. “One is the management team that we work with and around. They’re the best and brightest in the industry. Getting that comfort level and that trust level with the exchange of ideas and thoughts as time goes on is the lifeblood of any successful organization.”
The other broad group DeIuliis looks at is almost the mirror image of his leadership team. He looks toward entities and individuals with insights and experiences outside the industries Consol works within.
“It’s amazing how many already established processes, technologies and concepts are out there in entirely different industries that are being viewed as innovations and ground-breakers with the coal, natural gas and fossil fuel industry that we operate in,” he says.
“Every time we tend to look outside our box and outside our industries, we always come away with an injection of innovation that keeps us going.”
As the world of business and that of energy continue to evolve and change as time goes on, the success of a company comes back to its values.
“In the energy industry, we’ve seen a lot of volatility and a lot of peaks and cycles through the years,” DeIuliis says. “We’ve become used to a certain extent of the things that will enviably occur. But if you go back to the values, and those that are truly the values of your organization, and if you’re the safest and most compliant operator in that environment, you’re going to be the most successful or profitable whether it’s a market peak or trough.”
The key to managing through those kinds of ups and downs has been simplicity.
“The way we manage in those downturns is sticking to those values and as long as we’re pushing for better safety performance, compliance and continuous improvement, we will be fine in any market,” he says.
How to reach: Consol Energy Inc., (724) 485-4000 or www.consolenergy.com
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The DeIuliis File
Consol Energy Inc.
Education: Graduated with a chemical engineering degree from Penn State. He received a master’s degree in business administration and a juris doctorate from Duquesne University.
Career: DeIuliis began his career in Consol Energy’s research and development group in 1990. He became vice president of strategic planning responsible for optimizing the value of Consol Energy’s assets resulting in the creation of CNX Gas Corporation, where he served as president and CEO from its 2005 inception until early 2009. He has been the president of Consol Energy since February 2011.
DeIuliis is also director at-large of the board of directors of the Independent Petroleum Association of America, a director of the U.S. Chamber of Commerce and the Bituminous Coal Operators’ Association Inc.
Regionally, he is on the advisory boards of the University of Pittsburgh Cancer Institute, the Pittsburgh Penguins Foundation and the Catholic Foundation. He is a registered professional engineer in the Commonwealth of Pennsylvania and a member of the Pennsylvania Bar.