Asked to take the managing partner position of Ernst & Young’s Cincinnati office in November 2008 with the recession looming was both good and bad timing for Julia Poston. On one hand, she quickly realized the amount of challenges and drastic changes that the firm would need to cope with, but on the other hand, she could utilize personal strengths and take the firm to levels of business it hadn’t been before.

It didn’t take long for the effects of the recession to cause clients of the accounting firm’s 300-employee Cincinnati office to begin to pull back and shelve projects. Poston had to look for alternative ways to keep clients and customers satisfied while also making sure the employees of the firm understood what was needed of them moving forward.

“We were pressed to figure out how to manage our business a little differently with our revenue dropping as clients shelved things. Trying to manage the business with a smaller revenue base just meant that you had to be more frugal,” Poston says. “We really looked closely at where we could drive some of the costs out of our business without impacting the services to our clients. There were people challenges too, because people were just really worried about the recession and what it was going to mean and they felt vulnerable.”

Luckily for Poston and the firm, those were things that played to her strengths as a leader. She had to drive transparency and openness with her employees as the firm dealt with the changes of a recession.

“It caused us to have to ask them to do more with less and we had a chance to really see who the leaders were during those tougher times,” she says.

Here is how Poston took the negatives of doing business in a recession and turned them into game-changing initiatives for Ernst & Young.

Communicate in tough times

As the recession began to take effect and some of the early signs of change crept into the firm, Poston had to be upfront and clear about what this meant for employees.

“We really looked to people to come to us with ideas about how we could do things differently and challenge things that we once did,” Poston says. “What we tried to do was say to our people, ‘Hey guys, we’re in the midst of a recession and we need you guys to act like you own this firm too. Tell us how we’re going to manage through this. Rather than feeling that things aren’t as great as they once were, tell us what you would do if you were running this business.’”

In order for this approach to work, everyone in the firm had to understand that changes were inevitable and they had to embrace that fact.

“Change happens in every business,” she says. “You can either try to manage around it or you can take it and say, ‘All right, how do we need to continue to transform what we do, how we serve our clients, how we behave internally as an office given this change and react to it?’”

To get people to step up with ideas and have the urge to be engaged in helping the firm forward, Poston was open and transparent.

“If you want everybody to own the goals of your business or your practice and not just have their own personal individual goals … you have to be very transparent with them,” she says. “You have to co-develop the goals with them and then build in the accountability with all levels. The only way to do that is with transparency. Just kind of barking that out and setting those goals and telling everybody that everyone has to own those goals doesn’t work if people don’t feel that they’ve got all the right information and transparency into the process.”

Poston and her other partners took the recession as an opportunity to engage all of the firm’s employees in new ways to run the practice.

“We need to approach our work and our client services differently coming out of this recession,” she says. “We need to have far greater diversity of thought. We need to make sure that we bring, not just our partners to the table to help make decisions as it relates to our client’s business issues, but we need to invite our younger people to the table to think about how we come up with solutions and creative ways to help our clients deal with their business issues. We really have had a big emphasis on connecting everyone from partners to staff both in horizontal and vertical teamwork. We’ve really changed the culture to challenge people to speak up and share their ideas no matter what level they are in the firm.”

Through the process of communicating what it would take to get through the recession and getting employees engaged, it became evident who the leaders in the firm were.

“The people who stepped up and said, ‘We can manage through this change,’ are the ones who are most vital to our business and largely have been the ones who have been most successful coming out of the recession,” Poston says. “The ones who were kind of paralyzed by the recession and didn’t show an ability to adapt to change and doing things differently, they didn’t show great strength. They showed a resistance to change and wanted to harken back to the old days, which the old days aren’t back again.”

Discover new leadership styles

Poston wanted everyone to challenge the old ways of thinking and doing business at Ernst & Young.

“One of the things that’s been a game changer for us was we took our partner group and did something different in terms of challenging leadership styles and creating an environment of teamwork in a really different way than we had ever done before,” Poston says. “One of the things that we did was we had an off-site, three-day, two-evening event out at Camp Joy, which is a camp that has a lot of those outdoor activities like ropes courses and those physically challenging things. We called it the partner leadership challenge and it was a combination of those activities outdoors along with facilitated classroom on leadership challenge. Everyone had to attend and it was a huge game changer for us because there became an element of trust and partnership that we thought we had before, but we didn’t have any idea just how far we could take that.”

The leadership challenge and classroom part of it was started with a 360-feedback process that all the partners needed to do with at least 10 people — people above them, at their same level and below them.

“We really openly dived into all of the feedback that each of us had gotten and set goals for ourselves and buddied up to help drive that accountability,” she says. “We all got a lot of lift from one another by doing this, and that’s the kind of culture we want here — a culture of LIFT. LIFT stands for leveraging insights from teamwork with the idea being that if we team and trust in it in an extraordinary manner, we will be able to leverage each other’s insights and do an even better job serving our clients and taking care of our people here.”

The partners took it upon themselves to make sure they were acting as the best leaders they could and made sure they didn’t just talk about it, but demonstrated it.

“We identified what we thought were the five key practices of good leaders and really honed in on those,” she says. “Do we model the way? Do we actually walk the talk? Do we inspire a vision for our people and communicate that? Do we challenge processes? Do we enable others to act? Lastly, do we encourage the heart? Do we really let people get into what they’re doing? We took those five practices of leadership and we discuss those in each of our partner meetings and remind each other that we have to model the way.”

Keep your clients close

Poston understood that it wasn’t just her firm and the accounting industry struggling to get through the recession. The firm took advantage of the situation by getting closer to clients and helping them achieve better ways of doing business as well.

“When times are good and companies are growing and earnings are growing, sometimes there’s not really a burning platform for them to be interested in hearing our observations of how other businesses are tackling different issues,” Poston says. “When you’re in a recession and everybody is really struggling, we found our clients were far more interested in hearing our ideas on how they could approach the recession. They welcomed other thoughts and ideas and observations from others and they might not have as much previously. When things are good, you’re not concerned about best practices.”

It’s easy to relax and allow business relationships to just carry on when things are running smoothly. However, it’s when times are tough and those relationships are put to the test that you have to really deliver on the promises of service and support.

“If we had this come again, we would do the same thing in terms of investing more and more with our clients and spending more time with them and building those relationships so that you can help them and be a partner with them,” she says. “When the economy starts to turn, you’ve positioned yourself far better as a trusted business adviser to them. Spend more time with your clients when they are struggling and have bigger business issues, not less.”

Competition in the accounting industry is fierce, so it is crucial that Ernst & Young find ways to differentiate itself to clients.

“We’re in a really competitive business,” Poston says. “We’ve really coached our people to not take any client interaction for granted and always be at our best. A differentiator between Ernst & Young and our competitors is over the course of the last year and a half, we have really globalized our firm. We have the same methodology for client service and delivery, the same metrics, the same type of communications across the entire globe. The reason that that’s important is that it’s a pretty big benefit to our clients that have a global footprint. Our project teams, our integrated solutions are very consistent across the globe. That consistency that we have in our firm across every location is a huge plus. That’s not necessarily the structure for other firms.”

While the changes in thinking, communication and leadership have been a huge help to getting the Cincinnati office through the recession, the top priority and most helpful aspect of those changes were the clients.

“Make client service the No. 1 thing you do,” Poston says. “If you approach your business from what would be best for your clients, chances are you’ll probably be doing the right thing. And then, just really invest in your people. Take care of them and give them challenging things to do and let them be a part of the decision-making and treat them like the great young professionals that they are and they’ll deliver. You’ll have great retention and have really satisfied clients.”

HOW TO REACH: Ernst & Young Cincinnati office, (513) 612-1400 or


-          Communicate your challenges and changes to get employees engaged.

-          Challenge the old ways of doing things.

-          When times are tough make the best of client and customer relationships.

The Poston File

Julia Poston

Managing Partner

Ernst & Young Cincinnati

Born: Boston, Mass.

Education: Attended Miami University and received a B.S. in accounting

What was your first job and what did you learn from that experience?

I worked in a restaurant when I was 16 years old, and it was a really great job because you work really hard, but you learn all kinds of valuable things: how to operate with equipment, how to deal with customers and handle money. That’s when I started liking accounting because I enjoyed interacting with customers and the financial end of it as well. It was a great starting place to learn some valuable skills.

What is the best business advice that someone has given you?

My dad used to tell me that business was so unethical. I didn’t agree with him, but I’ll never forget that because, as a business leader, we have a responsibility to be good corporate citizens.

What is one of the most stressful things about tax season?

Right now, given the political environment, there is an awful lot of chatter and proposals of how our tax system might change. One of the things that we try hard to do is understand what these proposals are and talk to our clients about them so that if any of these come to be, we will be able to help our clients think about them and respond to them.

If you could speak with anyone either from the past or present, who would you speak with?

From a business standpoint, there are some incredible business leaders that I admire. A.G. Lafley was an incredible CEO at P&G, and I find those kinds of people inspiring.

Published in Cincinnati
Saturday, 30 June 2012 20:00

Honoring the best of the best

For more than 25 years, Ernst & Young has celebrated the entrepreneurial spirit of men and women pursuing innovation and entrepreneurial excellence in their businesses, their teams and their communities.

The blood, sweat and passion they’ve poured into their businesses and the triumphs they’ve achieved stand as a testament to the role they play as visionaries, leaders and innovators. Ernst & Young founded the Entrepreneur Of The Year Program to recognize this passion for excellence and to build an influential and innovative community of peers.

We have gathered here and in 25 other cities in the U.S. to welcome the men and women who are regional finalists into our entrepreneurial Hall of Fame and to toast their commitment to succeed. We applaud them for launching start-up companies, opening new markets and fueling job growth.

So let’s celebrate their achievements, their perseverance and their tireless pursuit of business excellence.

Ernie Cortes is the Entrepreneur Of The Year program director. He can be reached at (408) 947-5462.

2012 Finalists and Honorees


• Geoffrey Barker, RPX Corp. (Winner)

• John Woolard, BrightSource Energy Inc. (Finalist)

• Hubert Thieblot, Curse Inc. (Finalist)

Life Sciences

• Lawrence Blatt, Alios BioPharma (Winner)

• Guo-Liang Yu, Epitomics Inc. (Finalist)

• Robert W. Duggan, Pharmacyclics Inc. (Finalist)

Marketing Services

• Tom Bedecarre, AKQA (Winner)

• David B. Goldberg, SurveyMonkey (Finalist)

• Bill Demas, Turn Inc. (Finalist)

Media and Entertainment

• Nicholas Woodman, Woodman Labs Inc. d.b.a GoPro (Winner)

• Matt Mullenweg, Automatic (Finalist)

• Lars Buttler, Trion Worlds Inc. (Finalist)

Retail and Consumer Products

• Dale Carlesen, Sleep Train (Winner)

• John Foraker, Annie’s Inc. (Finalist)

• Neil Grimmer, Plum Organics (Finalist)


• Lisa Im, Performant Financial Corp. (Winner)

John Boncher, Cupertino Electric Inc. (Finalist)

• Mike Sechrist, Elana Whorton, ProTransport-1 (Finalist)


• Tarkan Maner, Wyse Technology (Winner)

• Lee Chen, A10 Networks (Finalist)

• Tasso Roumeliotis, Location Labs (Finalist)

Technology Services

• Matthew Monahan, Brian Monahan, Inflection (Winner)

• Larry Augustin, SugarCRM (Finalist)

• Bruton Goldfield, TriNet (Finalist)

Published in Northern California
Saturday, 30 June 2012 20:00

Honoring the best of the best

For more than 25 years, Ernst & Young has celebrated the entrepreneurial spirit of men and women who make our economy vibrant.

Ernst & Young founded the Entrepreneur Of The Year® Program to recognize those with a passion for “thinking big” and to bring together visionaries and leaders to inspire each other and our communities. We have gathered here, and in 25 cities across the United States, to honor all of our regional finalists and welcome a new class of entrepreneurs into our Hall of Fame, recognizing their resilience, ingenuity and innovation.

We applaud them for overcoming challenges, inspiring others, opening new markets and, ultimately, fueling economic growth in the Central Midwest. Let’s celebrate their achievements, perseverance and tireless pursuit of business excellence.

Congratulations to all of the 2012 Central Midwest finalists.

Randolph Buseman is a partner in the Kansas City office of Ernst & Young.

Michael Hickenbotham is a partner in the St. Louis office of Ernst & Young.

Finalists and Honorees

Industrial Manufacturing and Mining

• Steve Carter, Knight Hawk Coal LLC (Winner)


• David Karandish, Answers (Winner)

Financial Services

• Brant Bukowsky, Brock Bukowsky, Veterans United Home Loans (Winner)


• Len Rodman, Black & Veatch (Winner)


• Robert Low, Prime Inc. (Winner)


• Harry Herrington, NIC Inc. (Winner)

Master Entrepreneur

• Larry Potterfield, MidwayUSA

Energy and Chemicals

• Jerff Stroburg, Daniel Oh, Renewable Energy Group Inc. (Winner)

Retail and Consumer Products

• Kyle Krause, Kum & Go L.C. (Winner)

Bio Science

• Dr. David Faber, Trans Ova Genetics (Winner)


• Dr. Steve Lasky, Advanced Analytical Technologies Inc.

• John Eulich, ASPEQ Holdings Inc.

• Cory Wiedel, Ryan Zink, Complete Nutrition

• Benny Lee, DuraComm Corp.

• Patrick Perry, Genesys

• Dawn Ainger, Genova Technologies

• Greg Gragg, Gragg Advertising

• Mark Rutter, GROUP360 Worldwide

• Joseph Melookaran, Mithra Amaran, David Brown, Raqibul Huq, Maria Will, JMA Information Technology

• Greg Brown, Learfield Communications Inc.

• Matt Miller, MobileDemand

• Mary Quass, NRG Media LLC

• Dr. Reggie Chandra, Rhythm Engineering

• Tom Kalishman, Jerry Shaw, SAK Construction LLC

• Willard “Lee” Frickey, Sizewise

• Michael Vasquez, St. Gregory Centers Inc.

• Kevin Quigley, John Nickel, Mike O’Neill, Switch. Liberate Your Brand

• Dan Reed, UnitedLex Corp.

• Doug Schukar, USA Mortgage

• Jon Cook, VML

• Seth Burgett, Yurbuds Sport Earphones

Published in St. Louis

Richard Carrano knows all about stages — not the prosceniums on which actors ply their trade, but the phases through which companies evolve as they grow.

He also knows how hard it can be for a business to advance from one stage in its development to the next. The transitions seldom come easy.

Carrano has worked for Purchasing Power LLC, an Atlanta-based e-commerce company, since its inception in 2001, initially as chief financial officer and more recently as president and CEO. Purchasing Power, which offers a program that enables its clients’ employees to purchase expensive items like computers and home appliances via a payroll deduction plan, has grown swiftly through three developmental stages over the last decade.

Carrano says the key leadership challenge he has faced is helping Purchasing Power maneuver through the transitions from one stage to the next.

“That has been the toughest thing, managing the evolving leadership needs of a high-growth company as it transitions through different life-cycle stages,” Carrano says. “And those stages come much more rapidly with a company in our space and our size.”

Cultivate heroes

Carrano identifies Purchasing Power’s first stage of development as the period from its inception until it reached about $50 million in annual revenue.

“That first stage took us from ’01 to ’06,” he says. “The leadership needs in a company in that stage focus on what we identify as heroes.”

Heroes, as Carrano describes them, are employees who are versatile and cool-headed in the heat of battle. However, some of the less exciting but still crucial developmental tasks like establishing routines, procedures and best practices are not among the heroes’ strengths.

“Heroes are generalists who are very comfortable wearing many hats,” Carrano says. “They’re great at putting out fires. But subconsciously, they’re not wired to put in process. So what happens is, because of that lack of process, they get to continue to play the hero role. They continuously ride in on the white horse and save the day.

“In an early-stage business environment, when you’re still not exactly sure if the model is going to pan out, and with the limited amount of investment that you’re able to make in head count, you need that generalist, someone that can do many different things.”

The second stage of Purchasing Power’s growth path took the company from $50 million in annual revenue to $100 million.

“Stage 2 for us was from ’07 to ’09,” Carrano says. “At that point, we started transitioning away from the heroes and started looking for what we identify as bricklayers.”

Bricklayers are people whose forte is establishing the framework for a company’s future — the processes, the routines, the procedures that govern how employees do their daily jobs.

“The bricklayers are individuals who have a focus on process and on building the foundation of stability,” Carrano says. “And in situations like this, the CEO is sometimes put in a position where they’ve got this liability of loyalty to all those heroes that have helped them get to that point in time. But unfortunately some of the heroes aren’t maturing their skill sets as quickly as the business’s needs are changing.

“That’s a slippery slope for the leadership of the organization,” he says. “You’ve got these heroes that their co-workers identify as very important, value-added people. And then the next thing you know, they’re starting to transition out, or maybe into different roles, at the same time that the bricklayers start coming in to build the process, the foundation, the infrastructure, so that the scale can be digested.”

The third stage of development, which Purchasing Power is currently undergoing, started when the company reached $100 million in annual revenue and will end at the $200 million level, in Carrano’s estimation.

“We’ve recently entered what we identify as Stage 3,” he says. “This third stage, for us, has been from 2010 through the present. This is where we’re starting to supplement our leadership with specialists.”

Specialists are people who have developed deep expertise in an area in which the company has a need to help it continue to develop and grow.

“The processes have been defined; we’ve got a good understanding of what we’re doing and how we’re doing it,” Carrano says. “So now we’re looking to bring in some specialists to focus and introduce best practices. These are individuals that have had successful careers in other environments that translate well into our environment. And these are the individuals who really help you begin to maximize productivity, production consistency, and predictability.

“In this stage, the way we identify it from an economic resource allocation point of view, you’ve gone from where you might have had one person straddling two different roles and maybe doing each of them at a mediocre level, and now you’re at a place where you’ve broken that down into two specific roles,” he says. “You’re hiring one person to perform each of them, and you’re expecting excellence in both.

“Being able to identify and recognize what stage you’re in as a business is critical at the leadership level, to make sure that you’ve got the right people leading the organization.”

Manage the transition

The most complicated part of leading a company through its growth stages, Carrano says, is recognizing when it’s time to start making a transition — and more to the point, recognizing when it’s time to start making the changes that will enable the company to successfully navigate the next stage.

“There are a couple different concepts I rely on to do this,” Carrano says. “One of them is something I categorize as awareness and emotional intelligence. This is something that we look for in every senior-level leader.

“When deadlines are slipping, the quality of the work might not be what it used to be, and you have that conversation with the individual, and they look at you like you’re crazy, like you have no idea what you’re talking about and everything is fine, that immediately suggests something isn’t right here,” he says. “The needs of the business have obviously outgrown the capabilities of the individual.”

Another signifier that Carrano says he looks for is a two-parter: effort and execution.

“Those are two factors that we look at in gauging the performance of people, especially those in leadership roles,” he says. “Obviously, effort is always first and foremost. If the effort is where it should be, then you can work on the execution. And the execution might be improved by way of additional coaching, training, systems, things like that. But if you don’t have the effort, then you can’t even get to the execution. It’s irrelevant at that point.

“When we’re looking at the organization and the need to make a transition, we’re looking at the people that we have in leadership roles,” Carrano says. “If the effort’s there, we’ll work with them. If the effort isn’t there, we can pretty much recognize that we’re never going to get there, so we know we need to start making changes.”

Loyalty and accountability

Managing a company’s transition from one developmental stage to the next requires a keen understanding of loyalty — and of which constituencies the CEO needs to be most loyal to.

“Again, it’s that liability-of-loyalty concept,” Carrano says. “We’ve all heard the phrase,‘What got you here isn’t going to get you there.’ I think for the senior-level leader to recognize that they’ve got a fiduciary responsibility to not only their investors, but equally to the current employee base, they really need to be responsible for making sure that the building blocks for the future are the right ones. Just because you’ve relied on certain skill sets to get you to a certain point, that doesn’t mean those skill sets are the ones that are going to get you to the next level.”

Times of transition are always stressful, and the CEO often needs to make difficult decisions, and to do so quickly.

“I always put it in the context of: I don’t want to get to a certain level and look back and feel like I short-sold the opportunity by not making the decision that was the right one,” Carrano says. “While those may be tough decisions, that’s the CEO’s job. They have to make the tough decisions. They need to recognize when those changes need to be made, and ultimately they need to be accountable for making them.”

Conversely, when it comes to timing, a transition from one phase to the next shouldn’t be shoved along too quickly. The CEO has to allow for some overlap of the people being brought in versus those being moved out, as well as the incumbents being converted to new roles.

“There are a couple of pitfalls you have to watch out for,” Carrano says. “The first is not having a contingency plan, or not having some redundancy built into your overall plan. Even though you’ve brought in your bricklayer or your specialist, if they’re not up to speed, or if your processes aren’t up to speed, and your firefighter is gone, then you might find yourself in a situation where you’re in a tight spot and you don’t have anyone there to step in and save the day — and you might still need that.

“So the urge to rush through these transitions is something you have to avoid,” he says. “To just knee-jerk and start making changes without laying out a prudent timeline could put you in a position where you’re left without the process that you need in place, and you’re without the individual that can help you get through it in the interim.”

Another key pitfall to avoid is not adequately explaining to employees the context and the need for the changes being made.

“You really need to communicate well with the folks that will be left after such a transition,” Carrano says. “You have to be able to reach out to them and articulate the vision and help them see the future. If you don’t, the grapevine might take over and paint a picture of what’s going on that isn’t reality. It’s critical to control the message so you can bring those individuals to the point of clearly understanding what you’re doing and why you’re doing it.”

Lastly, Carrano says it’s crucial to understand that some people have key assets that need to be retained, and some will surprise you with their capacity to handle change and convert their skills to a new role.

“If you’ve got a good understanding of what’s going on in the business and the people who are involved in it, there might be circumstances that you can tailor one way or the other,” Carrano says. “That hero might be able to transition into a different role that is equally beneficial. And a lot of those heroes have incredible amounts of historical knowledge, and you always need that.

“So when you’re having the conversation with the individual, those are the situations where you perhaps need to act differently,” he says. “If they understand the future vision of the company and the need for change, and they recognize that they might not be the right person for a given role, then the ability to continue to get value out of them in other roles and retain that historical knowledge is something that you should absolutely be willing and able to find a way to do.” <<

HOW TO REACH: Purchasing Power LLC, (888) 923-6236,


Name: Richard Carrano

Title: President and CEO

Company: Purchasing Power LLC

Born: Wilmington, Del.

Education: Bachelor’s degree in accounting, University of Richmond; MBA, Emory University

What was your first job, and what business lesson did you learn from it that you carry with you today?

I worked as a stock clerk in a convenience store, and it was really about hard work — breaking down boxes, stacking stuff in a freezer that was 35 degrees. It wasn’t fun; it wasn’t glorious. But that’s what work is about sometimes: grinding it out and getting the job done.

Do you have an overriding business philosophy that you use to guide you?

On the theme we’ve been talking about — hiring senior-level leaders — the goal should always be to get one step closer to engineering yourself out of a job by only hiring great people that are capable and motivated to take your job. If you’re doing that, then you’re only building strength in the organization, which will clearly leave the organization in a better place.

What trait do you think is most important for a CEO to have in order to be a successful leader?

Obviously they need to have the passion and the intimate knowledge of the business. And they need to be a person that’s willing to make everyone else uncomfortable by asking the questions that nobody wants to answer.

How do you define success in business?

The way we communicate it here with our employees is what we call, simply, happiness. When you do something and you know it was the right thing to do and it makes you feel good, in most cases, that’s going to lead you down a path to success.

What’s the best advice anyone ever gave you?

My first job after college was in accounting with Deloitte & Touche. When I was working there, my uncle, who was in sales, said to me, “Whatever you do, don’t cook the books.” When you think about it, you can apply that to almost anything.

Published in Atlanta
Monday, 30 April 2012 20:01

Reliable counsel

How often do CEOs need to talk to their accountants in order to effectively manage their company’s finances? Obviously, this question can’t be answered with a simple blanket statement: “X times a year for a total of Y hours should do the trick.” There are too many different types of businesses, each with different amounts of expertise and unique needs of their own.

But if you talk to even a small number experts in the accounting field, a couple of themes emerge. One is that when CEOs are contemplating unusual transactions, it’s always better to err on the side of having too much contact with their accountant than not enough. Another refrain is that any time a CEO has any doubts or unease about an upcoming transaction, it’s definitely time to call your accountant to let him or her know you have something you need to talk about.

“Typically, in a larger company, the CFO would take on that role,” says Mark Koziel, vice president of firm services and global alliances for the American Institute of Certified Public Accountants. “But what about the CEO who doesn’t have the C-suite and the finance function inside their organization? That’s where, in particular, we talk a lot about being the trusted business adviser for that CEO. Especially in family-owned businesses, you see this a lot. You need that financial adviser, but you may not need them full time, so you can lean on your CPA on a regular basis throughout the year.

“They should be there for part of the strategic planning sessions. If the CPA knows what’s going on throughout the year and is present for discussions about important things like expansion, employment and succession, then they can be better informed for when they do the year-end planning and consulting.”

The benefits of touching base periodically with clients throughout the year, not just at year end, is a common theme among those with experience in the accounting field.

“When you meet with clients during the year, you can go over their financial statements, among many other things,” says Sharon Cook, president of the National Society of Accountants. “You can make sure they are doing everything properly. And you can make suggestions about some of the other things they need to do, for taxes and for other financial purposes.”

Think, talk, transact

Talking to your financial team throughout the year enables your experts to make suggestions in advance of key transactions that can greatly alter the tax and financial impact of those decisions.

“When you get to year end, depending on what the CPA is doing for you — if it’s a compiled financial statement, an audited financial statement, a tax return — there are definite tax implications that could be affected,” Koziel says. “And maybe some decisions would have been made another way if the CEO had considered the tax implications of what they were about to do.”

Making assumptions on your own rather than asking professionals for guidance can lead to unpleasant surprises. Accountants come across these types of situations frequently in their daily interactions with clients.

“A situation that I find clients often have problems with is, for example, in a year in which they’re expecting a large profit, they want to be able to reduce that,” Cook says. “So one of the first things they think about buying is a car, because they think they’re going to be able to write that car off in full in the first year. Then, by the time you get the books and you’re ready to do the tax return, you have to tell them, ‘Guess what — you’re not going to be able to do that. You’re going to have some limits in terms of what you can deduct this year.’”

For many types of nonroutine transactions, getting advice beforehand from your accountant or finance team is almost always the wisest course for business executives to follow.

“Some of the types of transactions that should be discussed ahead of time would be, for instance, any type of big-dollar purchases that they’re looking at,” Koziel says. “Buying versus leasing is one that needs to be looked at carefully, such as whether you want to buy or lease a building. Another important one is business expansion: If they’re looking to buy a business or even sell their business, the whole M&A transaction and how that will take place is a very important thing to consider.

“Major investment decisions along the way could have significant impact. And succession of the business — that’s another huge issue. You should be having big-time conversations about that early on.”

Other nonroutine transactions that should be reviewed carefully ahead of time include borrowing money, major equipment purchases and like-kind exchanges.

“Before you do a like-kind exchange, you should definitely talk to your accountant to make sure it’s done properly so it won’t be disallowed somewhere down the line,” says Cook. “There are many types of like-kind exchanges. It could involve property that they own. A lot of times, especially in smaller businesses, it may involve cars or equipment that they have around, where they can exchange it and therefore not pay the tax that they would have had to pay if they had sold it directly to someone else.

“Any time a CEO wants to make a big expenditure on any kind of equipment, they need to talk to their accountant to make sure they’re getting the benefit of everything they have, especially if they want to borrow money to pay for it. Because if they want to borrow money, they’ve got to figure out, ‘What is that going to do to my bottom line? Is this something I really need to do, and is it right for me?’”

Multifaceted advice

An accountant’s value to a CEO or a client company isn’t limited to figuring out the tax effects of transactions before they’re entered into. There are many other types of general business issues for which an accountant can provide valuable advice.

“Strategic planning is a big one,” Koziel says. “One of the best services a CPA can provide to a CEO is to just get them in a room for a day and sit down and talk about the business. Do a strategic planning session. Make it formal, kind of like a board of directors meeting.

“Having frequent conversations throughout the year is useful in many ways. The beauty of the CPA environment is you gain a lot of knowledge about particular industries. Take construction, for example. Typically, the CPA has more than one construction contractor client, so they see good habits and bad habits that are out there, based on other businesses in that market. And they also can sometimes translate things to other types of businesses. Maybe it’s a customer service strategy in a certain retail business that could be replicated in, let’s say, a not-for-profit that you might have as a client.

“The ability to observe how a variety of different businesses operate and being able to assess the good habits from the bad habits and recommending the good habits to other types of businesses that are in their client base — these are valuable services that CPAs are in a position to offer.”

Another important service that accountants can provide is keeping tabs on key financial line items to watch for significant changes, then investigating those changes to determine the factors that are causing them, and, if needed, recommending ways to counteract the changes.

“If you keep in close contact with your clients, especially if they’re doing their own accounting in-house, one of the things you can do is review their gross profit percentages,” Cook says. “Are they staying consistent? Are they changing dramatically from one period to another? What’s the cause of that? And you can sit down and go over that with them and see if there’s a problem. It may be in their inventory control, if they have inventory. Or is the cost of their regular purchases going up? And if so, what do they need to do to offset that? Does that mean that they need to find a way to increase sales? Or do they need to have better controls on what’s in inventory and how it’s coming out of inventory?”

The definition of trust

One of the accountant’s main goals is to achieve trusted business adviser status with his or her clients. It’s a prestigious standing, and it must be earned over time.

“It’s about giving your clients the absolute best service you can provide,” Cook says. “To be able to review and make sure they’re handling their affairs properly, to produce good financial statements, to have the best possible relationship between the accountant and the CEO, and ultimately, to make sure that their business prospers. That’s the key. That’s what you aim for.”

Koziel concluded by telling a story — “the ultimate story of a CPA as a trusted adviser,” as he calls it.

“I was at lunch with a CPA friend of mine about a month ago, and he says to me — because he’s heard me say time and again: ‘Trusted adviser, trusted adviser’ — he says, ‘You know, I never really understood the meaning of “trusted adviser” until just this past weekend. I got a call from the wife of a client of mine. The client is a construction contractor; he owns a construction business.’

“This guy was a huge car buff and had a warehouse full of antique cars. He was in the warehouse tinkering one day, and he fell to his death off of a ladder — changing a light bulb, of all things. So he says to me, ‘I’m sitting there last weekend, and this client’s wife calls me. … A little while later, I’m in her living room. It’s the wife, the two daughters, the two son-in-laws and me.’ He says, ‘That is the trusted adviser relationship. That’s exactly what you’ve been talking about. The only one that they felt comfortable enough with — the only one they felt confident enough with as the outside consultant to the family — was me. It’s almost like I was part of the family.’

“That’s the type of relationship that you start to see in these businesses with their CPAs,” Koziel says. “And as a CEO, if you don’t have that trusted adviser relationship now — well, we’re talking about your life’s savings. Whether it’s invested all in the business or whether it’s held in other types of assets — these are your life’s savings. Who are you going to trust with those types of decisions? And you’d better have that person with you year-round, to help you make better decisions all along the way.”

HOW TO REACH: American Institute of Certified Public Accountants,; National Society of Accountants,

Published in Akron/Canton

In today’s rat race of a world we call business, CEOs often overvalue themselves, believing, for example, that they have all the right answers. Wrong.

For just that reason, CEOs need leadership coaches now more than ever before. Why? Perhaps because they are so involved in their organization, they are not able to rise above it in order to serve as an unbiased, neutral and effective leader.

At the expense of “opening up the kimono too far,” I am a living, breathing testament of this fact and struggle to overcome it. For that reason, I am on a continual search for sounding boards of respected and experienced individuals who might guide my hand and challenge me to “question my answers.”

Many CEOs with whom I speak talk often about how it is lonely at the top. They, in my opinion, are not asking for pity. What they are asking for is the comfort of others who have walked a mile in their shoes, those who make big decisions daily, decisions that have significant consequences for others.

This is where leadership coaches come into the picture. Over the years, I have worked with several coaches — some good and some not so good. But I learned from each of them. Good coaches, quite candidly, are the ones who do not pull any punches and are brutally frank with you. They seek to be honest brokers of ideas, opinions and suggestions they have gathered and feed them back to you in a constructive fashion.

Good coaches also listen and learn from what CEOs and executives have said, and seek to share expertise in helpful ways, especially when it comes to challenging and questioning the answers you give them. And, best of all, they hold you accountable.

With the skills of a good leadership coach, many positive outcomes will result and improve your positioning and impact as an industry leader. Here are my top five qualities for any worthwhile executive coach:

  • An acknowledgement and self-awareness that CEOs do not have all the answers for the problems their company faces.


  • An ability to learn from others who have, as they saying goes, “walked a mile in my shoes.”


  • A sense of comfort that the coach will hold all conversations in the strictest of confidence.


  • An ability to look at things from a more neutral and unbiased perspective and be accountable to your commitments.


  • A realization that a company will benefit from a CEO who is empowered to translate what they learn from the coach into an all-new leadership style and approach, which can then be used to grow the organization.


When CEOs learn these all-important fundamentals from a coach, they can model that behavior, first moving their management team to a higher level of performance, then creating a trickle-down effect to other members of your company. The net result should be a sense of increased engagement and creativity within your organization.

Don Phillips’ book, “Lincoln on Leadership: Executive Strategies for Tough Times,” perhaps said it best. Borrowing from Abraham Lincoln’s own words referring to his strategies during the Civil War, Phillips noted that, “Leaders should realize that successful alliances put the (CEO) in a position of strength and power.”

Put another way, alignment with a coach will rapidly pay for itself and help you differentiate yourself from the competition.

In my judgment, no company today should operate without access to a leadership coach. Call them a coach, a trusted advisor or a strategic partner. Don’t get hung up on the title. Just get one. You will find it one of the best investments of your life.

G.A. Taylor Fernley is president and CEO of Fernley & Fernley, an association management company founded in 1886. Reach him at, or for more information, visit

Published in Philadelphia

Even before he became president and CEO at Mission Hospital, Kenn McFarland knew a change was coming. Health care reform was on the doorstep and it was going to find its way inside, one way or another.

“The new health care environment was taking shape, whether you call it Obamacare or just the country responding to health care taking up so much of our gross domestic product,” McFarland says. “You might call it the riding of two horses, moving from this one horse at a gallop to this other horse that has yet to catch up.”

McFarland had been the chief financial officer at Mission Hospital for nearly 13 years prior to taking over as the interim CEO in May 2011. By November, he had made enough of an impression on the hospital’s board and trustees to receive the position on a permanent basis. With more than a decade of experience as a high-ranking hospital official, he was well qualified to take the reins and help forge the hospital’s future path.

But just because McFarland was experienced doesn’t mean the task was any easier. As part of the national health care reform plan, hospitals around the country were under pressure to transition from fixers to preventers, to medical professionals concerned not just with curing ailments but with managing the preventative medicine and lifestyle choices of their patients.

It was a drastic change in direction for a hospital staff of more than 2,400, used to operating in a specific way. Until that point, preventative medicine largely took place outside of a clinical environment, overseen by nutritionists, physical therapists and other specialists. Now, the staff at Mission Hospital would need to tear down the silos and work hand-in-hand with those specialists.

“We had to do a 180 and embrace this new business model,” McFarland says. “We have this wonderful, successful business model that we had been enjoying, but the old model celebrated a fee-for-service reimbursement. The more you did at a hospital, the more money you made. This new model will have us managing whole populations of people, keeping them healthy and out of the hospital. That is a transformational shift. It’s very taxing, you have to build a compelling argument for that platform and get people to follow that model. That would be, I’d say, one of the most challenging things that any CEO would be facing right now, especially in our health care environment.”

Develop a transition plan

In the case of Mission Hospital — and all the hospitals that comprise St. Joseph Health System — building a compelling argument for change began with locking the door and throwing away the key.

The entire health system set up a series of cascading strategy meetings, with the first meetings pulling together the CEOs from all hospitals and medical centers in the system.

“We basically locked ourselves with our board members and physician leaders, and spent a couple days together,” McFarland says. “We told ourselves, ‘OK, we know how we got here, we know how we got to be successful to this point. We know there is uncertainty in the future.’ We had guided conversations to help construct a plan in which we wouldn’t be victims of the future, but rather we would help shape the future.

“That is exactly what we did. We locked ourselves up and started crafting dimensions of performance, and from there, we started to engage everyone else and cascade it.”

The CEOs came up with three desired outcomes, intentionally throwing the ball a little too far downfield in an effort to force everyone in the organization to reach for the goals.

“The outcomes are fairly audacious. First, we want perfect care. Second, we want all of our encounters with each other, with doctors, with patients and with families, to be sacred. Third, we want all of our communities around all of our hospitals to be in the top decile in terms of their own health — their own weight management, their own dietary consumption, their own mental, physical and spiritual health.”

With the goals set, McFarland returned to Mission Hospital and began working with his leadership team to construct processes that would enable all employees to achieve the organization goals, given a willingness to work hard and stretch their capabilities.

“We built a set of enablers that would allow the work to happen,” McFarland says. “The set of enablers would allow for the fulfillment of the strategy, would show us what would be necessary to allow the strategy to work and be successful, and help us to satisfy our mission and outcomes — the things we are striving for.

“So when you think of the process, first we had to articulate those strategies, then we had to fashion those enablers that will allow those strategies to be achieved. Then thirdly, we had to show everybody how we are going to do this together, and get everybody to pull their bow strings back, aiming their arrives for those three core outcomes that we want to achieve.”

Aim your arrows

From cruising altitude, the concept seems like something everyone should agree with: Change a health care outfit from one that focuses primarily on treatment and healing to one that focuses on preventative medicine and lifestyle management, in an effort to reduce the treatment and healing that needs to occur.

But concept and practice are two different things, and to bridge the gap from the former to the latter, you need to build a compelling argument for why the change needs to happen, then package it in a way that relates to many different employees in many different disciplines, then roll it out in a manner that provides maximum coverage.

For a work force that had been highly successful under the old model, it’s not as easy as giving a speech and changing everyone’s mind.

“I had to paint a picture that showed where the new model would take us,” McFarland says. “I had to show everyone the new order of things and how it would be all about managing whole populations, whole communities and their health, and driving less emphasis on the hospital and the acute care setting. I had to show how if we want to be relevant and viable well into the future, it was necessary for us to partner with other caregivers in the community, partner with everyone from wellness and fitness centers to ambulatory care, diagnostics, recovery and rehab, outpatient rehab, inpatient rehab, long-term care facilities and the hospital setting. We had to be nimble in how we managed whole populations through the whole care process, not just the acute care side.”

Ambitious goals can help your team members draw a line from the present state of the organization to how everything will look, feel and operate once your vision is achieved. But it’s not enough to just tie your organizations future to a broad statement such as “We want to be the best in our industry.” You have to tie the organization’s future to the numbers. You have to be able to show your staff hard data that relates directly to the progress they’re making in relation to the goals you’ve set.

At Mission Hospital, McFarland held up cost per discharge as a key metric. He showed the hospital’s employees how lower the cost per discharge would have the long-term effect of helping to re-focus the hospital on preventative care.

“I communicated to our team that we are a great hospital and we make a lot of money,” McFarland says. “We are one of the top performing hospitals in the country. But we are able to do that because we operate in a very affluent area. Under this new model, where the focus is going to be on the continuum of care and population management, we are going to have to reduce our costs. We are just not going to get the reimbursement that we used to.”

With an average cost of $8,500 per discharge, McFarland set a goal of getting the hospital’s average cost per discharge down to $7,000. He and his leadership team utilized lean management practices and elements of Six Sigma to give employees a method by which to reach the goal.

“That’s huge, and we’re not going to get there simply by cutting a bunch of people,” he says. “We are going to look at our culture, we are going to look at our leadership, and if you are not on board, you are not part of the team. If you are not willing and you do not have the courage, this is not the place to be.”

Assess your staff

As part of assessing the organization’s capabilities, McFarland and his leadership team had to assess the capabilities of the staff, and as part of that, whether the skills sets of certain employees could transition into the new future of the organization, either in the employee’s current role or in another role.

“The skills that make you successful today might not be the skills that make you successful tomorrow,” McFarland says. “So there were some tough conversations in terms of who was going to be along for the ride and who would have the agility to adapt.”

McFarland knew he had to run a more efficient organization, and the people who performed functions in departments that the leadership team deemed inefficient would have to adapt to new or modified roles or, in some cases, depart the organization.

One of the most prominent cases of streamlining involved the departments who manage the hospital’s revenue cycle.

“Throughout the whole process of managing our revenue cycle — and you are talking about starting with the time of admission, patient registration, getting all of their information, discharging them, sending out a bill, collecting on that bill, writing them off and managing the whole medical record along the process — we have approximately 1,200 to 1,400 employees across our health system performing that work,” McFarland says. “Said another way, that is one in 20 employees across the system managing the revenue cycle. That’s one in 20 employees not providing bedside care and not helping the patient experience. We looked at that and asked how we could improve performance.”

With a goal of paring down the revenue cycle management to between 700 and 900 employees, McFarland and the CEOs of all St. Joseph health facilities brought their revenue cycle leadership together for a brainstorming session centered on discovering and implementing best practices. The CEOs used the improvement of the revenue cycle management as a jumping-off point for creating a system of what McFarland calls “value imperatives.” The imperatives are aimed at increasing efficiency in the organization and aligning the skill sets of employees to promote that efficiency.

“We put our revenue cycle leaders in a room for five days and said ‘If you had a blank canvas, how would you design this work?’ McFarland says. “We called that a value imperative, and set about creating a series of value imperatives. We did one around the clinical setting of our emergency rooms, how we can better take out waste, inefficiency and leverage evidence-based medicine. We also did that for how we treat stroke patients; we’re doing it for sepsis, our laboratories and our whole material management department.

“You have to take the process small pieces at a time, leverage the people who actually do the work and allow them to redesign the work, and as leaders, you have to get out of the way to ensure that they can do what is needed to affect those changes. To use the old expression about eating an elephant, you’re just trying to do it one bite at a time.”

How to reach: Mission Hospital, (949) 364-1400 or  

The McFarland file

Education: Bachelor’s degree from California State Polytechnic University, Pomona; MBA from the University of California, Irvine.

History: Chief financial officer at Mission Hospital 1998-2011; interim CEO May-November 2011: Installed as CEO on a permanent basis in November 2011.

What is the best business lesson you’ve learned?

When I was a young CPA in my first career, I was pretty naïve and green. One time, one of the partners at the firm I was working for pulled me aside and told me to never be afraid to make a decision. Many people in business are afraid of making decisions and struggle to pull the trigger. It’s not that you should be afraid of being the leader with a philosophy of “ready, shoot, aim,” but that you should be the leader who is always at the ready and aiming. If you are aiming and shoot, and you miss, admit it and be direct. If it wasn’t the right decision, admit it, don’t be afraid to show vulnerability, and allow yourself to drink in the collective wisdom of the people on your team. Use that wisdom to help you move forward. That advice has helped me on a number of occasions over the course of my career.

What is your definition of success?

It is so simple to talk about cash flow and operating margins. But what I believe is if at night I can put my head on the pillow and sleep well, that particular day I showed up, listened and brought energy. I brought my compassion, vision and ethics to the table. I let my yes mean yes and my no mean no. And if I reflect on my day and find things I didn’t do as well as I would have liked, I will aim to do better tomorrow. That will make each day a learning opportunity, and will help me continue to grow and develop as a leader.

Published in Orange County

Let’s face it: We all want to be liked. But when it comes to being liked in the social media space — specifically Facebook — many companies make the mistake of measuring the quantity of the “likes” they receive as opposed to the quality.

The reality is that the quality of the likes is often much more important and relevant than the quantity of likes. That fact was driven home to me by the case of one of our clients.

Recently, the client told us that it want to gather more than 1 million likes on its Facebook page. The client’s page receives a steady viral increase of 500 to 700 weekly new likes, and the likes are “quality” likes with relevance to its company. They are coming from individuals who have a special interest in the company, who want to participate in conversations and are actively sharing our client’s posts on their personal Facebook pages and within their social contact spheres.

Looking at the analytics of the individuals who like our client’s page, we’re finding that in addition to being highly activated and engaged, they are also target-market and geographically relevant. The likes are happening because customers are actively sharing the content, pushing new people to discover the page, engaging in relevant discussions and are coming from people specifically seeking the company online in order to socially connect.

Thus far there have been no ad buys and there have been no contests launched to also supplement growth efforts. Their collection of likes — now in excess of 50,000 — has come through social networking efforts.

But internally, our client is facing the same struggle that thousands of companies currently face when it comes to evaluating their social media ROI. Managers within their organization feel that in order to justify the relevance of social media in their marketing mix, they have to obtain as many likes as possible. But getting people to simply click the “like” icon on a Facebook page is not difficult.

There are many ways to quickly inflate page likes. Contests spike likes but most of the entrants are only interested in winning the prize and not in making a purchase. You can buy packages of page likes but the majority of “purchased” likes are typically not buyers and are not geographically relevant.

Facebook ad campaigns, which are similar to Google pay-per-click advertising, can also help drive new likes. Facebook ads allow an advertiser to drill down to target potential brand loyalists and customers by a variety of geographic and psychographic denominators.

The issue is that once you stop the contest or the advertising campaign, your number of new likes will drop off considerably. You potentially will see an exponential increase in likes during the campaign period.

But what good are these new likes if people liking you possibly only visit your page once? If they initially like you and then never come back, they aren’t paying attention to what you’re saying, they’re not engaging with you and they have no interest in buying your product or service — or telling others to buy your product or service.

The relevancy in social media is to have people talking about you and with you, and ultimately becoming your brand evangelists. Statistics have shown that 90 percent of consumers trust peer recommendations and 70 percent of consumers trust recommendations online.

Companies need to turn their attention away from trying to use likes as a popularity contest. As a company leader, you need to realize that if you have a Facebook community of 1,000 consumers who are actively engaged, with analytics showing huge impression rates, it is much more valuable than a community of 10,000 who visit your page, click “like” one time, then seldom — or never — come back.

Adrienne Lenhoff is president and CEO of Buzzphoria Social Media, Shazaaam PR and Marketing Communications, and Promo Marketing Team, which conducts product sampling, mobile tours and events. She can be reached at

Published in Detroit

Just like software can have bugs, humans have bugs in the way we think and make decisions. As a result, many problems of businesses today are not the result of some outside factor, rather they are self-inflicted as a result of “mind bugs” — bugs in the critical internal processes that occur in the 5 inches between our ears.

The pervasiveness of mind bugs in business decisions is due to the fact that they are a product of human nature — hardwired and highly resistant to feedback. They can affect fact-gathering, analysis, insights, judgments, and decisions — and increase risk accordingly. The challenge is that the very mind bugs that are the source of the problem cause us to resist discovering them. Change the way we think? Our mind bugs tell us there is absolutely nothing wrong with the way we think. Here is a perfect example provided by Arthur Blank, co-founder of the highly successful Atlanta start-up The Home Depot, owner of the National Football League’s Atlanta Falcons, respected businessman and philanthropist.

“A lot of leaders, they listen, but they don’t really want to hear the results to the answers and when the answers come, they find a way to reinterpret them based on their original perspective of what they think the answers should be,” Blank says. “They might give you their honest opinion of what they think you’ve got to do to improve your business, but then you put it through your own filter and look at it through your own rose-colored glasses, and you choose not to see it that way. You say, ‘That’s not really what they meant. They meant some other things,’ and you just believe what you want to believe.”

Here are two mind bugs that are at the source of this problem.

Informed leader fallacy: A belief by a leader that he is better informed and has better instincts than others simply because he is the leader.

We deeply want to be led by people who know what they’re doing and who don’t have to think about it too much. So by the time we achieve a leadership position ourselves, we are good at making others feel positive in our judgment, even if there’s no strong basis. But the amount of success it takes for leaders to become overconfident isn’t terribly large. Some achieve a reputation for great successes when in fact all they have done is take chances that happened to work out. The fierce personal confidence and sense of infallibility that characterizes many leaders serves as a breeding ground for this mind bug. Most decision makers will trust their own intuitions because they think they see the situation clearly. Accordingly, it causes leaders to fall into a trap of believing they are better informed than they really are.

Closed mind: The inability to hold and examine two opposing views at the same time or to consider perspectives other than one’s own.

When we are afflicted with this mind bug we subconsciously shut down the very thing that can help us examine our own beliefs: mindful evaluation of diversity of thought. In essence, things are the way I see them because that is the way I see them. As perpetrators, we are sometimes not aware of doing this. Other times we may even be proud of it. We make the self-serving assumption that we have figured out the way things are and anything that challenges our point of view becomes “unthinkable.” It is not that we shoot the critics or fail to listen. To the contrary, we may spend time demonstrating our listening skills to others to prove we are good listeners, but afflicted as we are, we just don’t hear them. We simply are not aware that we don’t allow ourselves to hold and mindfully examine two opposing views at the same time. We give lots of lip service to others, but true diversity of thought is shut down. Once infected, we feel pretty good until the day of reckoning when we ask ourselves: “What was I thinking when I made that decision?”

Recovery requires courage

The solution to this problem requires courage — the courage to challenge our own thoughts. The real issue is that most of us do not notice our thoughts. We are out of touch with ourselves, and it can be debilitating. It’s like breathing carbon monoxide. You can’t see it or smell it, but it can harm you just the same.

Larry J. Bloom spent more than 30 years helping grow a small family business to more than $700 million in annual revenue. He is the author of “The Cure for Corporate Stupidity: Avoid the Mind Bugs that Cause Smart People to Make Bad Decisions” and the owner of a start-up media and software company that promotes better thinking. For more information, visit

Published in Atlanta

One thing MedSynergies Inc. has gotten good at is growing fast. The company’s revenue has been rising at an eye-popping rate, 30 percent plus for eight years running. But a byproduct of that whirlwind growth is that it’s difficult to find and retain workers who can keep up the pace. Sometimes people get left in the dust.

“The biggest issue we face is getting and keeping quality people,” says J.R. Thomas, CEO of Irving, Texas-based MedSynergies, which manages business operations for health care providers. “It’s tough to recruit and develop human talent while growing so quickly.

“Our growth comes in spurts,” Thomas says. “It’s not a linear model, and that can make it hard for people. The issue of the skill sets that are needed, the talent level that’s needed, coupled with the inadequacy of the educational system we have today, plus the complexity of people’s personal situations — this all creates serious challenges in terms of getting and retaining talented workers.”

MedSynergies’ leaders began to notice the problem eight years ago. “In 2004 we did a large transaction to put private equity in the company to grow it, and we hired a lot of people,” Thomas says. “We received plenty of impressive resumes, but we found that some of the people we hired had performance issues that weren’t evident through the interview process or the reference process. We weren’t getting the value we thought we should get. It became a real problem.”

This led to an uptick in employee turnover, which produced a slew of issues for MedSynergies. “When you start to get into a situation where you’ve created a hyper turnover rate, you start to lose the culture of the company you’ve built,” Thomas says. “You start to see tension develop between the people who’ve been around for 13, 14 years and the new people you’re bringing in. You have to find a way to reinvigorate your company’s culture and teach your fundamentals to all the new people — your mission, your tactics, your strategy. As one of our people said, ‘We have to “MedSynergize” these people in how we do business.’

“The cultural aspects of turnover are a substantial investment,” he says. “It can be an expensive process. But if you don’t deal with it, you can’t grow over the long term.”

In the eight years since its growth started accelerating, MedSynergies has experienced mixed results in recruiting and developing staff. “Overall I’d give us a B or a C,” Thomas says. “I’m not sure anyone ever gets an A in that process. And it’s an ongoing process; I don’t think it ever gets completely resolved. You just try to keep getting better at it.”

Train the troops

MedSynergies has undertaken a number programs and initiatives aimed at improving its recruitment and development of employees, with varying degrees of success. One of the first was a training program the company’s leaders dubbed MSI Boot Camp.

“We looked at this problem in 2004 and saw that it wasn’t going to go away,” Thomas says. “In fact, we began to see that the magnitude of the problem actually gets bigger as you grow. And this isn’t a matter of simply identifying a problem and then solving it. You can get better at mitigating it, but I don’t think you can solve it.”

New business was rolling in, so MedSynergies’ leadership team had to set up the new training program on the fly.

“At the time, we didn’t have a lot of time on our hands to create PowerPoints, to have great thoughts about how we were going to build our culture and onboard people,” Thomas says. “I think most small companies have that problem because everybody wears so many hats. We had to move. We had operations, we had new customers, and we were trying to hire people and grow. So the decision making was pretty quick.

“We started the boot camp and started walking our employees through things like the life of a claim and our five key metrics, which are one of our cornerstones — the foundational elements of a physician’s practice,” Thomas says. “It’s one of the things you’ve got to do right first because it’s a precedent to everything else. There’s some pretty core stuff you have to do. And very few people do it well. It has a lot of process rigor around it.”

Boot camp was an apt name for the program, as Thomas describes it.

“It was two 10-hour days, roll up your sleeves, hard core,” he says. “We covered areas like what you tell the client, what it means, how it impacts the company. And we got good results. One byproduct of that process is we found out some people at various levels of the company had skill sets that were above what they were hired in at. And we found the converse was true, too. Some people who were supposed to know it all and be an immediate impact player couldn’t dribble the ball.

“So it helped us evaluate, from a senior management perspective, our talent level in the company at that point. It also helped our ability to recruit, and it started building a culture about how we do our business.”

Go back to school

Another step MedSynergies took was aimed squarely at the problem of recruitment and the shortage of suitable talent.

“One of the big obstacles we face is that the level of talent we need at all levels of the company to meet our growth needs exceeds the ability of the city and the region of North Texas to supply it,” Thomas says. “We are really struggling to find talent at $12 to $15 an hour all the way up to $100,000 a year — and even above that level.”

MedSynergies is partly addressing this problem by partnering with a local institution that Thomas says is overlooked by many businesses in the Dallas-Fort Worth Metroplex.

“Probably the biggest unknown, unappreciated asset in Dallas-Fort Worth is the Dallas County Community College,” he says. “It’s huge. It’s one of the largest assets that, economically, we don’t know anything about. Most people don’t. I didn’t.”

A MedSynergies client who is involved with the community college convinced Thomas that his company would benefit by partnering with the school.

“We committed to do a couple things with the community college,” Thomas says. “One is we wrote a check to build a portal to help their students get jobs. So what they’re in the process of doing now is building a website where students can put their resume out and apply for jobs.”

Thomas says that part of his motivation for entering into this partnership was selfish. “I wanted access to their best and brightest to hire, at all levels of the company,” he says. “The community college is a great economic tool, and it’s a great societal tool. These are kids that are really working their way up. They either go on to four-year colleges or come out with a two-year degree, and they turn into great employees and do a phenomenal job.

“The other part is we want the community college students to look back and say, ‘They helped me get a job, so therefore I want to perpetuate the program,’” he says. “So it’s not just a charitable event. It’s really a business enterprise to pay back the school that’s done so many great things for you.

“I have high hopes for that,” Thomas says. “I think it will help our hiring process, and I think it will have some societal benefits for the community college and raise some awareness about how good a job they’re doing. They’re doing absolutely phenomenal work at the community college level. So I’m real enthused about that.”

Identify your stars

To help with employee morale and improve information sharing, MedSynergies has launched a monthly executive-employee communication program called Lunch With Leaders.

“It’s a monthly luncheon,” Thomas says. “It’s an open sign-up-to-have-lunch-with-an-executive program. Lunch is provided, and it’s a free-ranging group discussion. So you’ll hear things like, ‘I don’t understand my benefits. Are they better? Are they worse?’ Or there will be discussions about topics like working from home and other policy issues. It’s a great format to communicate with employees throughout the organization, because we find that they know a lot about what’s going on, while many of us sitting with C’s in front of our titles don’t really know that much about what’s going on.”

The Lunch With Leaders program has another important benefit. By fostering interaction between executives and employees, it makes it easier for MedSynergies’ higher-ups to identify who the company’s future leaders are likely to be.

“We’re trying to identify our superstars,” Thomas says. “There are probably 45 people in this company who are outstanding, phenomenal talent. And at the other end, there are probably another 45 people that the company will do great things without. And identifying both is very important to us.”

Asked what advice he would give other executives facing a similar predicament dealing with the dearth of available talent, Thomas says trusting your judgment is crucial.

“When you start to have a concern and you start to think there’s a problem or a potential issue, that means there is one,” he says. “Don’t second-guess yourself. You need to think about some of these issues, and you’ve got to continue to review your management team and your staff, and if you have a concern or issue, you need to trust yourself. You need to communicate it and deal with it immediately. Don’t wait.”

Another piece of advice Thomas offered CEOs is to be willing to admit you’re fallible.

“We all have egos, but sometimes you’ve got to be able to say you made a mistake, and address the mistake and move on,” he says. “We’ve done that. It’s not fun; it’s not easy. But when you tell someone ‘I made a mistake’ and you correct it, you build trust in that employee — whether it’s lateral or above you or below you. It doesn’t matter. They’re all important.”

Measure success

Asked if he thinks MedSynergies has turned the corner toward resolving its problems with attracting and retaining talent while maintaining its rapid growth path, Thomas says he sees signs that the company is improving, and he feels that constant improvement should be the goal because true resolution isn’t possible in this case.

“It’s an evolutionary process, and I don’t think we’ll ever truly resolve it,” he says. “But we’re making a lot of progress. We’re seeing better employee satisfaction. We’re seeing more referrals from existing employees for jobs. We’re getting more job applicants for open positions than we used to have. On the other hand, we’re also seeing a downside: We’re starting to see our people being recruited by other companies. People say, ‘Hey, I want to hire from MedSynergies because they have some knowledge we can use.’ But that’s part of the deal.

“If you’re doing the right things as the CEO of the company, the average performance of the employees should continually improve,” Thomas says. “In other words, on the bell curve, you’re constantly trying to move your average toward the right, which is better performance. And as you move the bar to the right, you’ve still got to deal with the part that’s to the left — the people who are not performing to the level that the job needs.

“And it never ends. You’ll never get to where everybody is an A performer. It’s mathematically not going to happen.”

HOW TO REACH: MedSynergies Inc., (972) 791-1224,



Name: J.R. Thomas

Title: CEO

Company: MedSynergies Inc.

Born: Little Rock, Ark.

Education: B.S. in zoology, University of Arkansas; MBA, University of Texas

What’s the most important thing you learned during your years in school that you use today?

It has nothing to do with the technical components, the debits and credits and pension accounting and microeconomics and macroeconomics. The most important issue about going to school is who you’re sitting next to. Because business is about people and the things they have to deal with, the issues and pressures and performance. And it’s not about psychology or sociology. It’s about how people make decisions and how you’re going to attach and relate to that customer.

What was your first job, and what did you learn from it?

When I was growing up, I worked on our family farm. Among other things, we had a commercial hay and straw baling operation. In high school, my brother and I baled 44,000 bales of straw in a month. And the concept of quit never existed. We were greasing a hay baler early in the morning in the dust and dirt, and we’d come home at 7 o’clock at night, dirty as hell, sunburned, mosquito bitten. But the value of that is we learned that when things get tough, you’ve got to put the hammer down and keep going.

Do you have any overriding business philosophy that you use to guide you?

There’s no substitute for work. Go to work every day. Have a blue-collar mentality. Bring your lunch pail to work.

What trait do you think is the most important one for a CEO to have in order to be a successful leader?

You have to have integrity and respect. There are lots of smart people out there, but to get people to charge a hill, it’s about more than organizational structure or market opportunities or empowerment. It’s about these people sitting side by side with you. Are they going to march up the hill with you? They’ve got to trust you and trust that you’re going do the right thing.

Published in Dallas