Calm down … those two letters in the headline are not what you might be thinking. However, it got your attention, for this leads to an important subject.
When you, or those with whom you work, don’t follow the principles of these two letters, problems occur. Not doing what these initials represent can be the difference between success and failure, cost big money, create disappointment and actually ruin relationships.
Hopefully by now you’ve figured out that F.U. stands for Follow Up. This skill is central to achieving objectives, supporting your people or customers, and maintaining your credibility. Too many people just don’t get it and consistently fail to make F.U. a part of their business regimen.
Words are cheap, but it’s action that makes the difference. Many promises are made every day such as: “I’ll get the answer and return your call soon,” or “My person will call your person so that we can get together.” Good intentions aside, if one does not make note of it, the call just might never happen.
Fortunately, only a relatively few get hit by locomotives because trains are big and people see them coming, but many are stung by bees. That’s the same with following up. Virtually no one would forget to pick up the big order, or neglect to attend a huge meeting, but too many let the smaller, yet important, matters slip through the cracks. This not only affects the person who didn’t receive what was promised, but also could significantly impede productivity.
As an example, an associate is to provide needed information first thing in the morning. Breakfast comes and goes and as the lunch hour approaches people along the line are sitting on their hands waiting. Do the math; count up what that could cost your business day in and day out. Frantically, and with a high degree of disgust, you track down the tardy offender and are appalled by the response, “Oh, sorry, it just slipped my mind. I forgot to write it down.” Sure, this can happen once but by the second or third time it becomes a pattern and the credibility of the perpetrator can be lost.
Following up is a reflection of respect. When people don’t have the courtesy of doing what they say, you begin to wonder if they can ever do it. In my companies, all those with whom I work quickly become aware of my sacrosanct F.U. policy.
Essentially after every meeting, whether a one-on-one or with a group, I assign a date for my own purposes of when what was discussed is to take place. If it was a task of significance, the date would be agreed upon with those who had to do the work.
When new employees receive a memo from me, with the unexpected “F.U.” initials in the bottom left-hand corner, many are initially stunned, thinking I’m giving them a crude ultimatum or don’t think much of their work. Fortunately, those with a modicum of common sense quickly realize that these two letters are not a pejorative as they are always followed by a numeric string that even a newbie can figure out represents a date.
I remind my team that I do not want to be their father or their baby sitter. Instead, when I ask that something be done by a certain date, and everyone involved agrees, it must happen.
Alternatively, the person assigned the task could always come back and say he or she can’t meet the deadline, don’t know how to do what was being asked, need help with the issue, or had figured out a better alternative. What could not happen is for the person assigned the task to pretend that no follow-up was required, or worse, that the covenant was never agreed upon.
Because so few follow up as promised, this presents your business with an outstanding opportunity to rise above others and create a rock-solid reputation for saying what you’ll do and then doing what you say. All it takes is a little discipline and respect for those with whom you work. It’s better to carry around a little string for your finger than run the risk of finding the proverbial rope around your neck as a result of errors of omission.
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. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at email@example.com.
Thinkers solve problems.
Mark Zuckerberg found a better way to connect people with friends and family through Facebook. Larry Page and Sergey Brin invented a better way to search the Internet by creating Google. Steve Jobs showed us a better way to obtain and listen to music through the invention of the iPod.
None of these examples happened by luck. Each of these great thinkers spent a lot of time working to perfect their ideas. Great thinkers are not born, they are made.
To create great products and services, you have to develop the habit of expanding your thought processes and critical thinking skills. Why? Because the human mind tends to be lazy. It tends to repeat the same thoughts unless it’s trained to explore new ideas. Great thinkers put in the effort to analyze things in new ways and not accept the norm.
We live in a negative society where bad news trumps good news and the potential downsides of an idea outshine the potential rewards. It takes a lot of effort to retrain our minds to focus on the positives and the solutions rather than the ramifications of a failed idea.
Becoming a great thinker requires an investment of time; there are no shortcuts. You have to be organized and plan for it. Take time to think about the problems unique to your business or industry. Work through the pros and cons of any idea, looking for a way to make it work. Study competing companies and leaders and gain an understanding of how they think. It’s also helpful if you always do your heavy thinking in the same location, and it doesn’t have to be anything fancy. Some people do their best thinking in the shower or over a cup of coffee at a cafe.
But there is one major pitfall to avoid: Don’t equate change with new thinking. Just because you are changing something does not mean you are being a creative thinker. There might be several “accepted” ways of doing something within your industry, and changing from one of the accepted ways to the other isn’t doing anything different. The goal is to identify new ways of thinking and as a result, find a new solution to a problem that no one has thought of before.
Finding these unique solutions won’t be easy, but success never is.
It was the late C. Everett Koop, a former U.S. surgeon general, who once famously said: “Drugs don’t work in patients who don’t take them.” That’s a simple way to look at a costly and complex problem — medication non-adherence — where the failure to take drugs on time in the dosages prescribed is both dangerous for patients and costly to the health care system.
“There are a number of reasons that people either don’t take their medication or stop taking it before they should,” says Chronis Manolis, RPh, vice president of pharmacy for UPMC Health Plan. “But what it often comes down to is a lack of understanding of the disease and a lack of respect for the condition.”
Smart Business spoke with Manolis about the problem of medication non-adherence and the ways it can be addressed.
What does medication non-adherence cost?
This problem impacts the cost of health care in many ways. According to the Express Scripts Drug Trend Report, $329 billion was spent on avoidable medical and pharmacy expenses as a result of patients not being adherent to medication treatments. Approximately 50 percent of patients do not take their medication as prescribed, which results in increases in the overall cost of treating chronic conditions and increases the number of hospitalizations and emergency department visits.
Why is medication non-adherence a persistent problem?
Clearly, there are a number of reasons why people may not take their medicine as directed by their physician. Consider, for example, people who have asymptomatic conditions such as high blood pressure, cholesterol disease and Type 2 diabetes. For them, taking medication may have no immediate effect on the way they feel. And, when medicine does not make you feel better, some don’t understand why they need to take it. As a consequence, many do not.
What are other factors that contribute to medication non-adherence?
Well, first, there’s the cost of the prescription. If there’s no generic available, it can be expensive, and a patient may simply choose not to purchase it. Then, there’s forgetfulness, which is a factor for older patients, but also for others as well. Some patients may avoid taking medicine because they fear the possible side effects. Others may not take it because they do not believe that the medication is truly effective.
But, what is often the underlying cause is a basic lack of understanding of their condition. Many patients do not realize they are taking medicine now in order to stay healthy in the years to come and to avoid a more serious condition 10, 20 or 30 years later when it will be too late to treat it with medication. For some, that’s a hard concept to grasp.
What kinds of solutions would help promote medication adherence?
Solving the problem of medication non-adherence is complex because there is no ‘one size fits all’ solution. A comprehensive, multi-pronged solution is needed to improve medication adherence.
These include promoting the need for more conversation between physicians and patients concerning the importance of medication in the overall treatment plan. There also needs to be a way to involve pharmacists more. Pharmacists are uniquely positioned to reinforce the message regarding the importance of medication. This can include encouraging patients to use their medication as prescribed and asking patients if they understand why they are taking a drug and if they understand the condition that it’s being used for.
Health plans can play a role as well because they can determine if patients are refilling their prescriptions in a timely manner. Health plan pharmacists can reach out to non-adherent patients and provide customized solutions and tools for patients to improve adherence. Additionally, health plan pharmacists can help triage specific patient adherence issues to other members of the health plan’s team including care managers and health coaches. For example, if cost is a factor, often less expensive generics are available. If forgetfulness is a problem, pillboxes or enrolling in refill reminder programs could work. Or, finding a substitute for the medication or changing dosing and/or frequency of the medication can eliminate side effects.
Chronis Manolis, RPh, is a vice president of pharmacy at UPMC Health Plan. Reach him at (412) 454-7642 or firstname.lastname@example.org.
Insights Health Care is brought to you by UPMC Health Plan
Your entire employee population — even those part-time, seasonal and currently not eligible for benefits — will be increasingly impacted by health care reform. Beginning in 2014, a key provision of the Affordable Care Act (ACA) known as the “individual mandate” will require most individuals to purchase health insurance or pay a penalty. The requirement to maintain coverage applies to all ages, even children.
Smart Business spoke with Craig Pritts, sales executive at JRG Advisors, the management arm of ChamberChoice, about how the individual mandate may impact your employee population.
What are the penalties for not following the individual mandate?
The penalty for not obtaining acceptable health insurance coverage will be phased in over three years and will be the greater of either a flat dollar amount or a percentage of income. In 2014, the penalty will start at $95 per person or up to 1 percent of income. In 2015, the penalty increases to $325 per person or up to 2 percent of income. For 2016 and after, the penalty goes up to $695 per person or up to 2.5 percent of income.
For penalty calculation purposes, ‘income’ will be defined as the taxpayer’s household income minus the taxpayer’s exemption (or exemptions for a married couple) and standard deductions. The penalty will be calculated on a monthly basis and will be assessed for each month in which an individual goes without coverage. There will be no penalty for a single lapse in coverage lasting less than three months in a year.
Those covered under an employer-sponsored group health plan or a government-sponsored program such as Medicare or Medicaid can continue to be covered and will not be subject to a penalty.
Who is exempt from penalty?
Individuals may be exempt if they:
- Cannot afford coverage. Those for whom a required contribution for coverage would cost more than 8 percent of their household income.
- Experience a gap in coverage for less than three consecutive months.
- Have income below the tax-filing threshold.
- Receive a hardship exemption from the Department of Health and Human Services.
- Are incarcerated.
- Are members of a Native American tribe.
According to the Internal Revenue Service (IRS), if they are eligible for an exemption for a single day of a month, they will be treated as exempt for the entire month.
How will the IRS enforce the penalties?
Beginning in 2015, everyone who files a federal income tax return for the previous year will be required to report which family members are exempt from the individual mandate and whether each person not exempt had insurance coverage. A penalty will be owed for each nonexempt family member without coverage. Married couples filing a joint return will be jointly liable for the penalties that apply to either or both of them. Anyone claiming a dependent will be responsible for reporting and paying the penalty for that dependent.
The IRS will assess and collect penalties in the same manner as taxes. However, the ACA imposes certain limitations on the IRS’s ability to collect. It’s anticipated that assessable penalties will be subtracted from individual tax refunds, if applicable.
How will tax credits help people comply with the individual mandate?
The ACA created a premium tax credit to help eligible individuals and families purchase health insurance through an affordable insurance exchange, making coverage more affordable. Taxpayers may qualify for a premium tax credit if their annual household income is between 100 and 400 percent of the federal poverty level for their family size; if they cannot be claimed as a dependent by another taxpayer; or if they are not eligible for minimum essential coverage, which is coverage under an employer-sponsored group health plan or Medicare or Medicaid plans.
The health insurance arena is changing, and individuals have a responsibility to comply with new legislation or pay a penalty. Understanding the legislation is challenging, to say the least. It’s good to work with an advisor who has the resources to help employees sort through the confusion, understand options and responsibilities, and find the best solution to fit their needs.
Craig Pritts is a sales executive at JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7253 or email@example.com.
Insights Employee Benefits is brought to you by ChamberChoice
With drilling in both the Marcellus and Utica Shale formations, Western Pennsylvania is sitting on one of the largest U.S. natural gas fields.
Even if you’re not directly affected, Bob Taylor, Senior Corporate Banker and Senior Vice President at First Commonwealth Bank, says the multiplier effect ripples out into the economy. Each well site has about 250 different jobs associated with it, and Marcellus alone has about 6,378 active wells.
“It’s an engine that is going to drive the region here for the next 20 years,” he says.
Smart Business spoke with Taylor, an energy lender, about where Western Pennsylvania’s natural gas industry is going.
What is the current situation with Marcellus and Utica?
Small companies first explored Marcellus, finding the sweet spots to de-risk the field. Then larger companies like Exxon Mobil Corp., CONSOL Energy and Chevron Corp. bought up these companies and their acreage to move into steady production drilling. Three years ago, more then 45 operators were drilling in Marcellus. By 2013 that was down to 33, according to the Pennsylvania Department of Environmental Protection.
With Utica, the large companies stepped in first to acquire acreage. This consolidation has impacted area service providers that supply the well operators in Utica.
Overall, there has been a strong impact in counties like Washington and Greene. Pittsburgh will be affected now that an agreement has been reached to drill under the airport, bringing in $50 million upfront and $450 million in royalties over the next 20 years.
How are natural gas prices impacting the rig count and service providers?
Marcellus has been ranked as one of the lowest cost fields; operators can get a 10 percent ROI with prices as low as $2.75 per 1,000 cubic feet (mcf) for dry gas and $2.25 per mcf for wet gas. With today’s price around $3.50 to $4.25 per mcf, Marcellus is profitable.
Wet gas is more valuable because it has additional liquids that can be separated out and sold, such as ethane used to make plastics. Utica is principally dry gas in Pennsylvania, but Marcellus has both wet and dry gas.
Several years ago prices were high, but supply began to exceed demand, depressing prices. Therefore, some rigs moved to the wet gas in Ohio’s Utica play. Marcellus went from 100 rigs last year to around 53. Many service companies also have crossed the border.
However, each region has a field manager — service companies that supply products in Pennsylvania have to re-qualify for Ohio. The overriding factor is safety. For example, a service provider’s truck can’t be within 100 feet of the wellhead and must have fire extinguishers.
In the future, the volatility of price should moderate to around $3 to $7 per mcf, with increased demand from export, vehicles, manufacturing and electric generation.
What gas-gathering infrastructure is developing?
Many wells have been drilled and completed, so the next push will be to lay pipe to gather the gas and bring it to production facilities. It costs about $1 million per mile to lay pipeline, and about $3 billion to $5 billion is being spent in Pennsylvania alone.
Just like drilling, laying pipe has a number of associated jobs from engineers, steel pipe manufacturers, excavators and welders to safety inspectors who monitor pipelines.
Why is wastewater treatment the wild card?
Water is injected into the ground at high pressure to frack the shale rocks and release natural gas. Flow-back water that comes up has salt brine, minerals, dirt, sand, etc. Originally, the solids were removed and the water was reused for fracking.
With the drilling slowdown, there is excess wastewater. The cheapest elimination method is deep injection wells, but there are environmental concerns. The Environmental Protection Agency (EPA) may stop or limit deep injection wells sometime in the future. The EPA could require an evaporation and crystallization technique that distills the wastewater, but cost estimates for these reclamation facilities vary from $2.5 million to $100 million.
Bob Taylor is a senior corporate banker and senior vice president at First Commonwealth Bank. Reach him at (412) 690-2214 or firstname.lastname@example.org.
FOLLOW UP: To learn more, call (800) 711-BANK (2265), or visit fcbanking.com.
Insights Wealth Management is brought to you by First Commonwealth Bank
Bill Byham holds a doctorate in industrial/organizational psychology — but that’s not the only way to define him. While he is not only considered an expert in the scientific study of employees, workplaces and organizations, he was one of the first in the world to use a groundbreaking hiring technique called assessment centers.
Some 35 years ago, Byham worked for J.C. Penney Co. when he began using simulated on-the-job techniques to find the most qualified potential employees.
“Assessment centers are a way of evaluating people by putting them through simulations where the people can show what they can do rather than just conducting an interview,” Byham says. “It’s like picking a basketball player — you wouldn’t interview them, you would put them out on the basketball court to see what they could do.”
Byham had great success with these assessment centers at J.C. Penney and wrote an article in the Harvard Business Review that made him famous, gaining the interest of many big companies looking to use this technique.
It wasn’t long until an entrepreneurial opportunity was born. He partnered with Doug Bray of AT&T and started Development Dimensions International Inc., which today is a leader in talent management, leadership development, hiring and talent acquisition.
“We help companies make the most of their employees,” says Byham, chairman and CEO. “We help organizations be more successful in hiring people by teaching interviewing skills. We are very big in the training business, particularly at the supervisory level, where we train more than 500,000 people a year.
“We also have a big business to help companies determine who will be their fast trackers and how to develop them for higher-level jobs.”
Since Byham started DDI, a 1,100-employee, $200 million organization, the company has trained upwards of 20 million people. Today, his focus is on the continued R&D of products in training and development techniques.
Here’s how Byham goes about R&D to keep DDI in front of its customers and on the cutting edge of its industry.
DDI places a great deal of energy into its R&D process. As a global company, DDI offers its products in as many as 20 languages. Rolling out changes to an existing product or developing a completely new one is a big cost. Costs and language aside, however, to remain an industry leader, you need to have plenty of ideas, and good ones.
“We do so much R&D here,” Byham says. “A problem that we do not have is a lack of good ideas. We have more good ideas than we know what to do with.
“So the first problem is trying to slim down the list of projects because all the projects are in the multimillion dollar range.”
In order to develop all these good ideas that DDI brings to the table, the company fosters a sense of empowerment among its employees.
“The whole company is built on empowerment — that is to empower people to own their job and feel responsible to make decisions,” Byham says. “If you treat your employees so that they feel empowered and they treat their job like they own it, then people will always want to improve and come up with ideas.”
In addition to a sense of empowerment, DDI prides itself on having a management team that is very open to new ideas and has a willingness to make changes.
“That’s one of our big problems — we make so many changes all the time because people come up with new ideas,” he says.
The management team works to narrow down the options.
“We have a series of meetings to cut them out and usually it’s not hard to get it down to eight,” he says. “But then to get it down to two or three new projects is tougher. R&D to us is brand new, game-changing products, or a big change in what we’re doing.”
DDI’s biggest product is called Interaction Management, which is a supervisory training program that is among the best-selling of its kind in the world.
“We try to update it every six or seven years,” Byham says. “That essentially becomes a new product.”
DDI recently finished a new middle management training program. The concept rethinks how middle managers get trained, including what they get trained on and how their skills are developed and what happens after that in the company to make sure they really learn it and apply those new skills.
“It’s not just coming up with a new idea,” he says. “It’s coming up with the whole pathway to learning and change, which starts out with a better understanding of their needs.”
Focus your R&D efforts
Part of having a strong R&D process is being able to not only take suggestions from your customers for products and develop those, but also being able to develop products out in front of what your clients want before they know they want it.
“You have to look at R&D in that sense as a 50/50 balance,” Byham says. “We do a lot of customer surveys. We’re out with our customers a lot and they’ll say, ‘We want a training program on this.’ However, I think it was Steve Jobs who said, ‘If you only give your customers what they ask for, you’ll always be behind.’
“What I’ve always noticed is you have to be out in front of the customer because sometimes it takes us several years to develop these things. If you just try to keep up with that hot topic, we won’t get it out until it is no longer a hot topic. So we have to anticipate needs and then be ahead of that.”
DDI has had instances where it was ahead of customers on products. Just a few years ago DDI developed a product to help companies prepare for retirements and how to handle an older workforce.
“We’ve been way ahead of our contemporaries and competitors on that,” he says. “The bad side is the whole thing is built on the assumption there is going to be a huge amount of retirements. With the economy being what it was until recently, a whole lot of people who were going to retire decided not to. We’re still ahead of the tide there a little bit.”
The R&D process isn’t just about finding the next new product, but also devoting some effort to keeping well-performing, existing products up-to-date.
“The more products you have, the more it costs you to keep the old products good,” he says. “The ratio for us is around 60 to 70 percent old products and 40 to 30 percent new. You have to look at the sales of the old product. If you’re still going up with the old product, you will want to keep investing in it.”
Byham likens it to Tide for Procter & Gamble. There have been 20 new versions of Tide and they’re still making money on it. They’re going to keep that product and put it in front of customers.
“If you really have an excellent old product, like we have with Interaction Management, you would not want to let that go, but you still want to be out looking for new things,” Byham says.
Plan for the future
Byham’s biggest focus may be on R&D, but another forward-thinking area he is keeping in mind is succession planning. Byham is 76, and very aware of his age. He knows that anything could happen at any time requiring someone else to lead the company.
“There’s never been a company more ready for retirements because the whole company is so dedicated to growing our own leaders,” Byham says. “We practice what we preach.”
One of the keys to succession planning that DDI lives by is that you can’t develop everyone for high-level jobs.
“If you try to spread your money out evenly across people, you don’t have any effect by it,” he says. “The first big thing is to define who are the people who have the most raw talent to be developed. Then you have to look at how you accelerate their development.
“You keep on developing everybody and you keep on promoting people, but there are certain people you promote faster who are being accelerated up the ladder.”
DDI also believes that you don’t aim people at high-level jobs. You aim people at a level of jobs, like the C-level, but you don’t name the job specifically because companies today are too dynamic.
“We preach that companies should do away with the old succession plan, which was to take an organizational chart and move people up who are next in line,” Byham says. “We have done all kinds of research that proved that did not work.
“Instead you should get a pool of people who are the most talented and get them to aim at a level within the organization rather than a particular job. Then when the job is open, you choose from that pool.”
How to reach: Development Dimensions International Inc., (412) 257-0600 or www.ddiworld.com
Foster an environment that breeds
Focus R&D on a mix of customer demands and brand new ideas.
Think about the future of your company and who’s going to lead it.
The Byham File
Chairman and CEO
Development Dimensions International Inc.
Born: Parkersburg, W.Va.
Education: He received his bachelor’s and master’s degrees from Ohio University and a doctorate from Purdue University.
What was your first job and what did you learn from that experience?
My family was in the undertaking business. If you work in a funeral home, there’s a lot of work to do. My early job experiences taught me the importance of good interpersonal skills.
How would you describe your work habits?
I value creativity a lot, but at the same time, I have a strong scientific orientation of proving it and challenging and doing research. I’m pretty good about coming up with new ideas, but I’m also very good about punching holes in new ideas and doing research to make sure they really work.
Who is someone you look up to in business?
I looked up to my father. He was an entrepreneur and owned his own company.
What is your favorite DDI product?
It would have to be our supervisory training program called Interaction Management. We have trained millions and millions of supervisors.
A 2010 global survey of more than 1,500 CEOs conducted by IBM revealed that 60 percent of top executives face an increased amount of complexity in their business. Seventy-nine percent of them expect an even greater level of complexity over the next five years and only 49 percent of them estimate that they will be ready for it.
The questions then become: Are you ready to face more complexity? How good are you at managing complexity? Can you leverage this complexity to create differentiation and competitive advantage?
Complexity can be good and bad at the same time. There are four types of complexity in business and it is important to break them down to be able to understand them and eventually address them:
Imposed complexity is coming from regulations and mandatory compliance guidelines both at industry and governmental levels. It is typically not controllable and manageable so it is best to prepare for it and find a way to minimize its impact on the business.
Inherent complexity is structural complexity, which is inherited and well rooted in the business. It can be addressed by making deep structural changes that might be painful but beneficial to the future of the business.
Designed complexity is based on purposefully designed strategies and programs to support the long-term vision for the firm. This complexity is based on managerial choices aimed at creating competitive advantage.
Unnecessary complexity is the result of legacy management design and structure that might not have been updated, eliminated or refreshed. It is unnecessary because it brings no value to the business and it solely exists because no one is paying attention to it.
As a leader of your organization and in the face of resource constraints, I highly recommend you start paying attention to these four types of complexity. Assemble a process and team to review complexity and engage in the design of strategies that will leverage complexity to bring differentiation to the market. Here are some quick tips on how to do this:
Design positive complexity to create differentiation.
This should be the main focus of your critical actions and priorities. Can you create complexity that differentiates your supply chain processes, your customer service experience levels and your digital marketing strategies without overwhelming your customers? Can you create unique value selling propositions based on unique internal designs and systems?
Quickly kill unnecessary complexity while reassigning resources and skills.
Unnecessary complexity might be inherited from legacy management designs or decisions. They might bring zero business value and need eradication. Be decisive and free up resources for something else.
Transform internal complexity into simple value propositions.
Remember that internal complexity has to be transformed into simple offerings for customers. If you propose something to your customers, do it by absorbing complexity and acting as a consultant for your customers.
Focus on pockets of value-creating complexity for customers.
It is all about value. Complex designs have to bring value to customers. If not, they should not be implemented. As a leader, make sure value is real and can be monetized through pricing. You might have the best supply chain management process, but will customers see the value in it and be willing to pay for some of the services?
Assign your best talent to manage complex problems and initiatives. Complex problems need mindful problem-solving.
The business world is changing in front of our eyes. What are you doing to change with it while remaining nimble, easy to do business with and focused on value? Are you leveraging complexity to create sustainable competitive advantage?
Stephan Liozu is the founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management. He earned a doctorate in management at Case Western Reserve University and can be reached at email@example.com. For more information, visit www.stephanliozu.com.
Many CEOs, CFOs, investors and executives do not realize the impact federal, state and local government have on their organization, or the importance of maintaining a comprehensive government affairs strategy as part of their annual business planning process.
As a lobbyist, I act as a professional guide for my clients to a variety of federal, state and local elected officials. When businesses choose to interface with the government, many consider hiring a lobbying professional who can help develop a government affairs plan — just as you would hire an accountant for an Internal Revenue Service audit or a lawyer for a court case.
If you choose to start the process on your own, it is imperative that you determine what you want to accomplish as a business. Do you want to become an eligible vendor with a specific government agency? Are you looking to expand your business or are you seeking public incentives to help you with hiring new employees or training your workforce?
Maybe you just want government “not” to do something that may negatively impact your day-to-day operations. You must identify what it is that you want and be clear about it when meeting with agents of government.
Here are some tips for lobbying the government:
Identify your targets
First, make a list of legislators who could aid in your effort. Start by looking at the local officials who represent you, your business and your business’ employees geographically. They have the greatest reason for supporting your requests. They want to see your business succeed and hire more of their constituents as you grow, so they should be your Tier 1 targets.
Your Tier 2 targets should include legislators who are on the committees that have oversight of your issues, legislators who are in leadership positions and who may have a little more political gravity than most, and legislators who have expressed a public interest in your activities.
These champions will help augment your efforts with letters of support, calls into agencies to help arrange meetings, and inquiries to secretaries and agency directors when you are not getting the answers you want from government.
Arrange a meeting
Once you have a meeting with a legislator, arrive prepared and practiced. Usually, meetings only last between 10 and 20 minutes, so make sure you and your group are aware of the issues you need to cover and stick to them. Know your facts.
However, if a legislator or their staff asks a question for which you do not have the answer, don’t make something up on the fly. Take note of it and get back to them. And, if a legislator challenges you on something, answer the question honestly, but not argumentatively.
Know who you are meeting with, their goals and where they stand on the issues before your meeting.
For example, not all legislators support drilling for Marcellus Shale gas and if you are a driller walking into their office, you may be in for a hard time. Make sure your requests are realistic for each of your visits and always remain professional.
Lobbying is a contact sport. The more you contact a legislator and develop a rapport with them, the more inclined they will be to help. Realize that in doing this you are not working alone.
At the end of the day, the lobbying industry acts as a forum for conflict resolution among divergent interests. Whether you decided to go it alone, or hire a firm, know that an honest, succinct, positive and respectful approach will be effective. And remember that a successful lobbying effort takes time, resources and preparation.
Joe Kuklis is a political lobbyist and head of Duane Morris Government Strategies. He has built a successful career lobbying for organizations and businesses of all sizes and has helped raise $500 million for clients ranging from Fortune 500 corporations to one-person startups. His book, “The Robin Hood of D.C.,” is an insider’s guide to the government marketplace for small, mid-sized and large businesses. Visit www.robinhoodofdc.com for more information.
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com