One of the signs of a boom — or at least a boomlet — is that companies start wanting to drive their competition crazy. This occurs when “survival” is no longer an issue and optimization or maximization can become a goal. However, the desire to do things to the competition can lead a company astray — or drive it to even greater heights.
Companies go astray when defeating the competition becomes more important than taking care of customers. When companies become obsessed with the pursuit of excellence, by contrast, they often reach new levels of greatness. Here’s how to avoid the former and achieve the latter.
1. Know thyself. Before you can drive your competition crazy, you have to understand what your company stands for. Otherwise, you’ll succeed only in driving yourself crazy. For example, Apple stands for cool technology. It will never represent a CIO’s safe bet, an “enterprise software company,” or service and support. If it decided it wanted to drive Microsoft crazy by sucking up to CIOs, it would drive itself crazy — that is, if it didn’t perish trying.
2. Know thy customer. The second step is to truly understand what your customer wants from you — and, for that matter, what it doesn’t want from you. One thing that your customer seldom wants to do is to help you drive your competition crazy. That’s in your head, not your customer’s. One more thing: A good company listens to what a customer says it wants. A great company anticipates what a customer needs — even before the customer knows it wants it.
3. Know thy enemy. You cannot drive your competition crazy unless you understand your competition’s strengths and weaknesses. You should become your competition’s customer by buying its products and services. I never truly understood what it was like to be a customer of Microsoft until I bought a Sony Vaio and used Windows. Sure, I had read many comparisons and competitive analyses, but they were nothing compared with hands-on usage.
4. Focus on the customer. Here’s what most people find surprising: The best way to drive your competition crazy is to succeed because your success, more than any action, will drive your competition crazy. And the way you become successful is not by figuring out what you can do to the competition but for the customer. You succeed at doing things for the customer by using the knowledge that you’ve gained in the first three steps: understanding what you do, what your customer wants and needs and what your competition doesn’t do. At the intersection of these three factors lies the holy grail of driving your competition crazy. For most companies, the key to driving the competition crazy is out-innovating, out-servicing or out-pricing it.
5. Turn customers into evangelists. There are few things that drive a competitor more crazy than unpaid customers who are evangelists for a company. Create a great product or service, put it out there (“let a hundred flowers blossom”), see who falls in love with it, open up your arms to them (they will come running to you), and then take care of them. It’s that simple.
6. Make good by doing good. Doing good has its own, very sufficient rewards, but sometimes you can make good and do good at the same time. For example, if you own a chain of hardware stores, you can help rebuild a community after a natural disaster. You’re bound to get a lot of publicity and create bonds with the community — this will drive your competition crazy. And you’ll be doing something good!
7. Turn the competition into allies. One way to get rid of your competition is to drive it out of business. I suppose this might be attractive to you, but a better way is to turn your competition into allies. My favorite author of children’s books is Tomie DePaola. My favorite DePaola book is “The Knight and the Dragon.” This is the story of a knight and a dragon that train to slay each other. They are smashingly unsuccessful at doing battle and eventually decide to go into business together. Using the dragon’s fire-breathing ability and the knight’s salesmanship, they create the K & D Bar-B-Q. For example, if a Home Depot opens up next to your hardware store, let it sell the gas barbecues, and you refill people’s propane tanks.
8. Play with their minds. If you’re doing all this positive, good stuff, then it’s OK to have some fun with your competition — that is, to intentionally play with their minds. Here are some examples to inspire you:
- Hannibal once had his soldiers tie bundles of brush to the horns of cattle. At night, his soldiers lit the brushwood on fire, and Hannibal’s Roman enemies thought that thousands of soldiers were marching towards them.
- A pizza company that was entering the Denver market for the first time ran a promotion offering two pizzas for the price of one if customers brought in the torn-out phone directory ad of its competition.
- A national hardware store chain opened up right next to a longtime community hardware store. After a period of depression and panic, the store owner came up with a very clever ploy. He put up a sign on the front of his store that said, “Main Entrance.”
Guy Kawasaki is the co-founder of Alltop.com, an “online magazine rack” of popular topics on the web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of ten books including Enchantment, Reality Check, and The Art of the Start. He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through www.guykawasaki.com or at email@example.com.
While attending an event we put on with a local charity, I was impressed with the difference that seemingly minor things can make in someone’s life. I was proud of the contribution and effort that our employees put into the event and the dedication the nonprofit showed for its mission.
The event made me think about the business community and all of the wonderful things companies do for those in need. Take the recent destruction from Hurricane Sandy as an example. Businesses have pledged more than $90 million in assistance, two-thirds of which was monetary donations to organizations like the American Red Cross.
While companies give back in as many ways as possible, even during these difficult economic times, I was wondering if there wasn’t more that could be done in our local communities. Not every effort has to always include a financial component.
Here are some nonfinancial ways to give back in addition to what you already do for the community:
- Give more time. Some organizations have a greater need for man-hours in addition to financial backing. Your business may already give generously on the financial side, but maybe your favorite charity could use a labor boost as well. Nationally, about 35 percent of companies have some sort of formal volunteer program. Consider donating employee time to help out with a big project or basic cleaning and organizing.
- Offer advice. You probably already serve on one or more boards for a nonprofit, but there is always another charity out there that could use your help. You don’t have to become a full-fledged board member, but you can offer advice as needed to help the existing members navigate through a problem that plays to your strengths. If the nonprofit is looking for a board member and you don’t have the time, help it find the right person by making a recommendation or referral.
- Hire nontraditional employees. One way of giving back to the community is helping others help themselves. There are many skilled employees with either physical or mental disabilities that could be a great addition to your company if given the chance. When you have a job opening, make sure you are considering all candidates, including those from nontraditional backgrounds.
- Do pro bono work. If you can provide a service that a nonprofit needs, consider donating it. Marketing, printing, IT services — basically anything an office needs is probably something a charity could use. Find out what the nonprofit could use, then figure out a way to help out. Even if your company can’t help, maybe you know someone else who can.
In this season of giving, it’s not hard to find a worthy cause. There’s also no question that you and your company have most likely already given a lot, assuming you are in a position to do so. But there’s an old question that asks, “How much charity is enough?” The answer is easy: Just a little more.
Take the time to evaluate whether you can do just a little more than what you are already doing to make an even bigger difference.
If you are in search of a worthy cause, consider donating to The Pillar Fund, a donor-advised fund administered through the Cleveland Foundation. For more information, contact Dustin Klein at firstname.lastname@example.org.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or email@example.com.
Artur Wagrodzki and Tomasz Tokarczyk were surprised at what they found upon arriving in the United States from their native Poland. They were just teenagers, but they still had an image of what America was like, and Brooklyn wasn’t really matching up with what they had envisioned it to be.
“I thought it was going to be palm trees everywhere,” Tokarczyk says. “In Brooklyn, you have concrete going all over. That was my first impression.”
The childhood friends and future presidents of Artur Express Inc. grew up as neighbors and eventually went to work for a limousine company in the New York City borough. It was there that they found their love for the transportation industry.
“It was a black car service and they took bankers and people like that around the city,” Wagrodzki says. “We worked in different departments, but we basically were dispatching drivers, picking up phone calls and doing customer service. In some respects, it was a little bit similar to what we do now. We just move freight instead of people.”
The numbers show Artur Express Inc. does a very good job moving that freight. The transportation and logistics company was founded in 1998 and grew to $28.1 million in 2008 revenue. Revenue reached $54.9 million in 2011.
“When we started this business, we were really young,” says Tokarczyk, who serves as president along with Wagrodzki of the 50-employee company. “So maybe that gave us a big advantage. We took it upon ourselves to build the business, and we just did what we felt was right. We ran with it and did everything in our power to make it work and help the company grow.”
The business partners have led with a mix of instinct and collaboration. They don’t worry so much about what the leadership textbooks say you’re supposed to do. But they understand the importance of building a strong culture where employees are committed to doing their job to the best of their ability in order to satisfy the customer.
“A lot of the loads that we haul are for very important customers and it’s very time-sensitive,” Wagrodzki says. “You can give a driver the wrong ZIP code and he’s going to end up in a different state. It’s that crucial. So we need very accurate data and we need everybody to do their job.”
Here’s a look at how Wagrodzki and Tokarczyk work together to lead Artur Express and make sure their employees know exactly what needs to be done to keep the company on top of its game.
Share your responsibilities
One of the biggest changes at Artur Express in recent years has been the influx of technology into every aspect of the company’s business. Whether it’s tracking loads or the drivers who deliver them, technology has led to a different way of doing things in the company and throughout the entire transportation industry.
“The main key for our operation is to develop and use all the different technology that is out there to be able to perform and control the different problems that we have and give that information to the customer,” Wagrodzki says.
Everybody can benefit from technology, of course, but you’ve got to know how it can help you. To just implement something because everybody else is doing it or because it’s shiny and new is asking for trouble.
Wagrodzki says they are careful to incorporate technology that helps them and helps their customers. They have the advantage of having been with the company since the beginning.
“We’ve worked hands-on in the business from day one and we know the ins and outs of it,” Wagrodzki says. “We know exactly what we do on paper and then we just convert all those different ideas to our computer system. It’s not just bells and whistles. It’s something we can really use.”
That conversion process is handled by an IT department that is usually pretty tuned into what Wagrodzki and Tokarczyk are looking for. That type of connection is obviously important.
“All they need is an idea of what we want,” Wagrodzki says. “It takes a while to put it together, but once it’s in place, it becomes a very easy process that you can access any time, which helps gets us get the information to the people it needs to go to.”
It’s those connections that you have with your IT team and with your employees that make or break the integration of things such as technological tools to help you track volume and the status of deliveries.
If you’re not speaking the same language, you’re not going to get what you want or what your company needs.
So Wagrodzki and Tokarczyk make sure they are accessible.
“Employees know if they have an idea, they don’t have to put it out to us or management in some fancy form,” Tokarczyk says. “They can just shoot us a quick email and we react instantly. Every idea they send to us, we try to make it better. Some of the good things we’ve done, that’s how they have been developed.”
It’s that partnership that makes the difference between a business that can grow and one that is limited by the capacity of the entrepreneur. Wagrodzki says he and his partner knew enough to hand off some of their work as they grew to allow the company to gain more customers and take on more work.
“When we started the company, we did it all from accounting to billing to dispatching,” Wagrodzki says. “You name it, we did it. It’s helping us now to be able to meet up with the managers, meet up with the staff and give good pointers on how we used to do it. Maybe it was on a smaller scale, but the factors are still the same.
“If you have 50 trucks or 500 trucks, you have to apply those same rules. We try to treat our employees and our independent contractors on a very personal level. That definitely helps.”
Keep looking for talent
Hiring is always a challenge for any business because you just never know exactly what you’re going to get, Wagrodzki says.
“You’re going to take a gamble when you hire somebody,” Wagrodzki says. “They try to be perfect in the interview and you follow the rules and follow your steps of having them interview with multiple people. I would say 85 percent of the people we hire turn out pretty good.”
But it’s that other 15 percent that can cause a problem. It’s why Artur Express is always in recruiting mode to some degree. With the growth that the company has been experiencing, Tokarczyk says they can afford to bring in talent that has untapped potential.
“We try to find people who can grow with us and are motivated,” Tokarczyk says. “They do have management potential, but maybe that potential needs to be discovered a year or two years from now.”
If you’re looking for more experience in your new hires, it pays to keep tabs on others in your industry. In these difficult economic times, there are often companies that don’t make it or have to let people go whom they otherwise would prefer to keep.
“Sometimes we’re able to get those good people from different companies that were bought out or are no longer in business, “Tokarczyk says. “These people have been there for 15 or 20 years and they’re looking for another strong company where they can set their roots for a while. That’s how we were able to get a lot of the good people that we have.”
Whatever way you go, when you do bring someone in, give strong consideration to having more than one person interview the candidate if you don’t already do that. It will give you a variety of perspective that can help guide your decision.
“We try to have them interview with at least three or four different people,” Tokarczyk says. “This way, we have an idea where they would best fit in the company.”
One thing that Tokarczyk always asks candidates when he interviews them is why they like transportation.
“You can get all kinds of answers,” Tokarczyk says. “Sometimes, you get an answer like, ‘Hey, my father used to drive and he took me on a trip.’ Some of the customer service girls that we hire, those were the answers we got. So there’s always an aspect of transportation in our employees’ lives, one way or the other. That’s always good to hear. You have to be in it to love it.”
Manage your relationships
Artur Express relies on about 400 independent contractors to deliver freight for clients rather than its own employees.
“They are our partners in this business,” Wagrodzki says. “It’s a 50/50 responsibility. If they don’t make the delivery or if they don’t deliver on time, we’re not going to be able to use them again with this customer. They know it’s a one-time shot.”
One of the things Wagrodzki looks at to determine whether the company is doing well or trending in the wrong direction is the fleet of independent contractors.
“There are always guys who come and leave,” he says. “That’s normal. But once you see that nobody has left for a month or two, you can feel good that the company is doing well. We are providing the service that our customers need.
“You might have other times where something is not working and all of those independent contractors are leaving. Now there is something you need to react to.”
In an attempt to be proactive about relations with the contractors, Artur Express has created a team of people who check in regularly to address questions and concerns before they become a big problem.
“They are constantly on the phone with those contractors asking questions,” Wagrodzki says. “What are we doing wrong? What can we do better for you? That’s a key in this business. We match up contractors and customers, and we manage the process of them picking up the load on time and delivering it on time. Once we have those two parties happy, we’re happy.”
The recession has provided a bit of a challenge in this area as Artur Express has worked hard to help both parties understand what the other is dealing with.
“In some cases, customers don’t want to pay too much and drivers want a lot,” Wagrodzki says. “You have to talk to drivers. ‘Hey, this is the industry right now, this is the market.’ And if the market goes up, you have to go to customers and say, ‘We bid this business for the last two years, but we need an increase now.’ Most of the time they do understand because we move a lot of freight and we know from one customer to another there’s not that big of a difference.”
The key is approaching all relationships with a good attitude and not being afraid of a little conflict that is always going to come up from time to time.
“We never look for a perfect project or for a bulletproof opportunity,” Tokarczyk says. “We’re always looking to take some type of risk. But we’ve learned over the years that you can sit on the sidelines and play it safe or you can play the game. If you play it right, you usually end up on the good side.” <<
How to reach: Artur Express Inc., (800) 487-4339 or
The Tokarczyk and Wagrodzki Files
Tomasz Tokarczyk, president, Artur Express Inc.
Born: Kamienna Góra, Poland
Artur Wagrodzki, president, Artur Express Inc.
Born: Zielona Góra, Poland
Wagrodzki on managing through the recession: If we had to give customers little breaks on the business, we did it. We were able to convince our drivers that we will have the business, and it will be steady. We were lucky enough to make sure our business was diversified. We were working with retail, home goods and a lot of food companies.
Wagrodzki on word-of-mouth recruiting: We were able to hire more independent contractors because the contractors that we had, they talk a lot out on the road. Word-of-mouth is a big deal for transportation. The drivers drive and they talk and if you have good customers and you pay the drivers on time, they can’t ask for more. They just want to join your team and haul your freight.
Wagrodzki on bonuses: We have all different bonus programs set up for our employees and they are revenue-driven bonuses. Retention is a big factor in our business, so we have customized bonus programs for dispatchers and for load planners and all different types of tiers in our operation. Our employees feel that they own a piece of this company. If the company succeeds, we’re going to succeed as well.
Let your people help you run your business.
Don’t ever stop looking for talent.
Make managing relationships a constant priority.
Who hasn’t felt like they’ve been misled by what certain companies profess?
The recording that states, “Your call is very important to us” as you wait 15 minutes to speak to a human being. The bait and switch buried in the fine print of an advertisement.
Businesses, through both behavior and words, suggest that we can expect certain things from them.
These promises are critical to an organization’s identity since potential customers need to know what they can expect from a business before an investment is made. You need a central promise that makes it clear how your business is different than your peers.
Some call it a brand promise. Others call it a brand essence, a differentiator or a unique selling proposition. We happen to call it “signature strength.”
Some businesses clearly do it better than others. Historically, Volvo has been very clear about its promise: safety. While it remains to be seen how its new corporate and brand strategy — “Designed Around You” — will affect the safety record of Volvo’s cars and the public’s perception of the safety promise, Volvo’s past is one of a clear brand promise of safety.
What makes a promise work?
First, the Volvo promise was very clear. There was no confusion about what Volvo wanted to be and wanted consumers to believe. Your customers and consumers need to know how you are different. How else will they know whether or not to try you out?
Secondly, Volvo’s promise was authentic; it was genuine. The surest way to failure is to erode trust by not delivering on your promise.
Third, the promise was simple; there were no qualifiers. As humans, our capacity to retain detail about thousands of brands is understandably limited. Every time we have to process unfamiliar details, our prefrontal cortex devours energy. The Volvo promise was simple. Safety. Period.
Finally, the Volvo promise was relevant. Every car needs to be safe because people are concerned about safety for their children and themselves.
In addition to being characterized by clarity, authenticity, simplicity and relevance, some leaders find it helpful to categorize their central promise.
The insights of Michael Treacy and Fred Wiersema in their book, “The Discipline of Market Leaders,” is helpful to many. After studying 80 corporations in 36 markets, they concluded that there are three broad value disciplines: operational excellence, product leadership and customer intimacy. Each provides a unique customer value.
These companies are masters of execution that is achieved through standardized, centrally planned operations. Control and efficiency are hallmarks of cultures. Think Walmart.
These companies focus on offering products or services that go beyond the norm and push performance beyond current limits. They are at the vanguard of their industry and are rewarded for their innovation. Think Apple.
Companies in this segment focus on satisfying unique needs and building custom solutions. They aspire to be experts in what their customers need and create lasting, loyal relationships. The cultures at these companies empower their people to do what it takes to meet the needs of customers. Think Nordstrom.
Treacy and Wiersema rightly suggest that one can’t excel in all three value disciplines since being all things to all people is a losing game. Their solution is to choose one to excel at — providing the foundation for your signature strength — and be good at the other two disciplines.
What discipline are you the best at? Or perhaps a better question to ask is what discipline do you need to be the best at? Once you decide which value discipline is the best fit, how will you communicate your central promise to your stakeholders in ways that are clear, authentic, simple and relevant?
Whatever you decide, don’t let your promise outrun your performance.
Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO’s Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity. To explore how to discover or maximize your signature strength, you may reach Kanefield at (314) 863-4400 or firstname.lastname@example.org.
Now that the 2012 presidential election is in the history books, a lot of attention has befallen the health care industry, particularly in terms of “health care exchanges” due for implementation under President Barack Obama’s health care reform beginning Jan. 1, 2014.
Ron Present, principal of health care advisory services at Brown Smith Wallace in St. Louis, Mo., says, “On a broad level, these health care exchanges are like an Amazon.com for insurers to offer their services. But there are implications for employers that can be far-reaching.”
He says while these exchanges can offer certain employers a way to unload the burden of providing health insurance to employees, business owners should carefully consider the implications — in terms of strategy, cost, and talent acquisition and retention — such a move could have.
Smart Business spoke with Present about health care exchanges, what they are and how they might impact health insurance options for employees.
What are health care exchanges?
On the broadest level, they’re a marketplace that offers health care coverage options for a given geographic area. It’s an access listing point for insurance companies to identify what costs and benefits would be available for customers in one collected area. These portals will look different depending on whether it is a federal- or state-created exchange, and the options within would, of course, differ accordingly.
When someone goes on the exchange, that person would be presented with a multitude of options through carriers like Aetna and United Healthcare, and those selections would be made by a user based on demographic data, type of coverage and so on. The exchange calculates costs, eligibility, payment options and such, allowing potential buyers to decide what’s best for them. Then it’s up to the buyers to decide what suits them best.
What’s really interesting in light of the election is that a lot of states are talking about not complying with this provision of health care reform. Exchanges are supposed to be in place by Jan. 1, 2014, and notifications of intent to the federal government by the states were supposed to be completed by Nov. 16, 2012. However, U.S. Department of Health and Human Services Secretary Kathleen Sebelius recently has extended the deadline to Dec. 14. The problem is, if states don’t have a state health care exchange set up, they’ll have to revert to the exchange that’s set up on the federal level, with more federal involvement. It’s an interesting irony for those resistant states.
How can health care exchanges benefit businesses from an accounting perspective?
Exchanges are currently geared to individuals and small businesses, with the definition of the latter differing by state guidelines. The most common definition of small business is one with fewer than 100 employees; those entities may be able to use an exchange to purchase insurance for group employees, which in theory opens them up to a better deal. The buying power of a large group is good for smaller employers and helps keep their overall costs down — think standards and levels of cost.
The other theory is, that in going to these exchanges, so many people will be buying insurance that the insurance competitors with similar benefits will make things interesting. It’s anticipated that by 2016, or perhaps 2017, this model may open up for larger employers, as well.
How did the election results change the way health care exchanges are viewed?
The big impact of the election is that health care reform is here to stay, so many individuals and companies who took the wait-and-see approach are now scrambling. Some 42 percent of health care providers hadn’t really done much at all about it leading up to the election, according to a recent survey by Modern Healthcare.
Are there tax advantages to health care exchanges?
It’s difficult to discern, but the penalties and the taxes aren’t really related to the exchange itself so much as they are to the actual health care reform. If we’re focusing specifically on the exchange, you could say that if certain employers opt to cut all health insurance, they might decide that it is cheaper to leave employees to find their own health insurance. It leaves them open to a bit of a double whammy though. The employer would have to pay a penalty for noncompliance, and it would no longer have the deductible from the insurance side.
How can business owners prepare for changes in health care exchanges?
Work with your accountant to do a complete financial analysis of your business. A lot of the issues in health care reform are more strategic than financial. The real challenge is looking at the ‘What if I don’t offer insurance?’ model, because the financial implications are mostly related to not doing it.
The jury’s still out on how it will all play out. But even those situations aren’t just a black-and-white number-crunching approach. It’s looking at what your competitors are doing. You might ultimately be saving money by not offering health care, but if you’re unwittingly losing your best employees to a competitor, where is the savings? Maybe you’re paying the price another way without really counting the cost.
Ron Present is principal, health care advisory services, at Brown Smith Wallace in St. Louis, Mo. Reach him at (314) 983-1358 or email@example.com.
Insights Accounting is brought to you by Brown Smith Wallace LLC
Learning how to deal with disaster during a crisis is probably not the right way to go. In the aftermath of Hurricane Sandy, employers are reminded of the importance of insurance, disaster planning and claim preparation.
“Always at a time like this, organizations who were not affected need to take a step back and ask themselves, ‘What if?’” says Neil Harrison, group managing director, Risk Control, Claims & Engineering, at Aon Risk Solutions. “We are spending a lot of time talking to organizations and helping them to say, ‘OK, what if it was us? Would we have been ready? Were we prepared?’”
Smart Business spoke with Harrison and Roland Laury, CFPS, senior risk consultant at Aon Risk Solutions, about some best practices business owners can use to help them ride out any disaster.
How did Hurricane Sandy affect the overall insurance industry?
An event like Sandy gives the insurance industry an opportunity to demonstrate why it exists. Too often, businesses look at insurance purely as a cost, but the industry is playing a role in business specific and general economic recovery. From the perspective of brokers and insurance companies, they expect to be judged in terms of their performance and how they respond to clients. There is a lot of resource pressure, as the number of claims is significant, so already busy staff is suddenly taking on increased workloads. Resource scale and leverage become key, and operational efficiency is a prerequisite for success.
It’s too early for anyone to comment on the longer-term impacts of insurance pricing or coverage availability for individual businesses or industry segments. When these events happen, almost everybody has an opinion of the cost, and those opinions vary widely. The reality is nobody knows at this early stage. Property damage, business interruption and contingent business interruption all come together to create the overall cost. In addition, just because an organization is based in St. Louis or somewhere not in Sandy’s way doesn’t mean businesses didn’t have customers, suppliers or vendors who were affected. This may indirectly affect them in terms of business interruption or contingent business interruption.
What should business owners know about their insurance policy for an event like Sandy?
There are some key things that organizations should look at. The first step is making sure you’ve got the right insurance coverage — the terms, the conditions in place, definitions of perils — for this kind of event and that you understand it. Business owners need to understand limits and exclusions. They should aim to have claims preparation coverage on the property cover, meaning there’s the opportunity to engage an expert for some of the accounting work critical to quantifying and making the claim. With this coverage in place, and with a relevant expert engaged, generally speaking, a claim is better prepared and the process runs more smoothly.
Linked to that is the need to make sure that the values at risk — asset values and business interruption values — are well understood and accurate. Too often, an organization has a claim and then is found to be underinsured or overinsured. A best practice is having an external expert work with you on assessing those values during your policy renewal process. The business interruption is particularly important because it’s far more complicated to work out in post-loss panic mode. If you think about the economy since 2008, everybody has different values at risk now than they did then. Organizations may have just continued to index link their values or sums insured.
Looking beyond insurance, what can businesses do to respond well to disasters?
The organizations that have responded well are those with business continuity plans which are well defined, kept up to date, frequently tested and broad. The plans cover not just the direct issues of building damage but also employee safety and welfare issues, supplier issues, customer issues, etc. There’s no alternative to investing the time, and probably some money, in a far-reaching business continuity plan because it gives the balance sheet the best protection possible.
Insurance is an outcome in many ways of business continuity. Take a broad look at the business, plan for every eventuality, make sure everyone knows what to do when an incident happens, have restoration firms on contract so you’re first in queue when an incident happens, and have access to generators or additional alternative power.
How can a business best submit claims if it does suffer damage?
When a significant incident hits, the company has some responsibility to mitigate the damage and the cost of the loss. Much of it is common sense, but common sense is easier to apply when it’s written down and people know what they are responsible for. Make sure that:
- Everyone knows to report the loss to a broker or insurer immediately and there are clear lines of communication.
- Immediate action is taken to minimize loss.
- You keep the documents, invoices or receipts for any vendors brought in for restoration or to provide alternative power, etc. Later, this will become a part of the insurance claim.
- You take photographs of the damage. It’s surprising how many people get everything repaired and then try to make the insurance claim without proof.
- You engage an external expert, if needed. Sometimes when a business is in trouble mode, it’s all about recovery. Outside expertise allows the business leader to talk to customers and suppliers and deal with staff, while the expert handles the more tactical, and somewhat more mundane, issues.
It’s important for businesses to have continuity planning, follow best practices for insurance, consider a claim preparation clause and ensure common sense is applied when a loss occurs. Recognize that disaster response, claim response and claim preparation are specialist technical disciplines, and many organizations find that their investments in those areas have a positive return.
Neil Harrison is the group managing director, Risk Control, Claims & Engineering, at Aon Risk Solutions. Reach him at (312) 381-5660 or firstname.lastname@example.org.
Roland Laury, CFPS, is a senior risk consultant with Aon Risk Solutions. Reach him at (314) 719-5120 or email@example.com.
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Many employers feel they have no control over the health care events of their employee population, seeing themselves as victims rather than informed consumers. However, it’s important to understand there are alternative solutions outside of the “insurance” box options when choosing a health plan for employees.
“As an employer, whether you have 10 employees or 500 employees, there is a whole host of new products and concepts that may make some sense for you — that you really need to explore,” says Mark Haegele, director, sales and account management, at HealthLink.
These options, including small group self-funding, captives, exchanges and co-ops, are growing as the health care industry rapidly changes, based on improved data analysis and the drive to keep overall health care costs down.
Smart Business spoke with Haegele about how these out-of-the-box health plan options work and what advantages they can bring.
What options are available for smaller employers who want to self-fund?
There are a host of new programs under a self-funded environment for employers with 10 or more employees. The 15-life employers may never have thought these options were available, but that’s not the case anymore. Self-funded employers can avoid premium taxes and state-issued mandates, while getting away from insurance company risk and profit. The employer has additional freedom to structure its health plan and can receive more claim information to better manage the health of the employee population, and therefore lower costs. Self-funding continues to be of interest to employers.
How do captives work to some employers’ advantage?
Small employers, with help from third-party claims administrators or benefit consultants, join forces to set up their own captives or use a cell in an established captive to cover risk above a self-insured retention. It’s usually made up of similar-sized employers, not necessarily similar in industry-type. For example, a 50-life employer would take the risk up to $50,000 for each member in the health plan. The captive, getting contributions from all employers, takes the risk from $50,000 to $250,000. The re-insurance carrier would risk all costs over $250,000.
By boosting retentions and pooling risks with other employers — who typically agree to put in wellness, disease management and other programs to lower claims costs — employers hope to keep increases in health insurance costs more in check. Also, all contributions to the captive, such as the $50,000 to $250,000 in the example, are tax-free. Finally, by pooling risks, participating employers can hold on to profits — if premiums exceed claims and other costs — rather than surrendering profits to a commercial insurer, as with a fully insured program. Many employers are looking at captives and starting to understand the advantages.
How are employers exploring the use of health care exchanges, both public and private?
Exchanges are new organizations set up to create a more organized and competitive market for buying health insurance. They offer a choice of health plans, certify participating plans and provide information to help consumers better understand options. Private exchanges are beginning to pop up, and in 2014 government-run exchanges will come on line.
Like a cafeteria plan, the consumer has a menu of insurance alternatives, such as five different insurance companies and six different plans, for one rate. While this creates the ultimate choice, exchanges may not be cheaper. Exchanges take away an insurance company’s ability to decline, drawing bad risk like those with major health problems. Many national insurance carriers say when public exchanges start, commercial population premiums will increase by 40 percent.
Private exchanges may be able use their advantages over public ones to lower costs. Even though they cannot decline, they have more control over who is coming in and can make it less attractive for bad risk through higher prices or benefits. Also, public exchanges must take subsidized members — uninsured with income under a certain threshold — who are likely more of a bad-risk population.
Employers are determining whether to continue to offer a health plan or just pay the penalty and send employees to purchase health care off the exchanges. It’s not as simple as it seems — although an employer may pay $8,000 per employee per year to offer a health plan and the penalty is only $2,000 per employee, typically employees demand higher wages when not receiving benefits. Retaining and attracting key employees could be why employers offer benefits in the first place. There are also tax implications with the decision to terminate, including extra taxes. One model found that Company X with 10,030 employees, where 3,000 highly paid employees purchase health care no matter the cost, paid $26 million more to terminate its health plan rather than raise the employee premium.
What role do co-ops play with alternative health plan solutions?
Health insurance purchasing cooperatives allow small businesses and municipalities to band together to negotiate for improved health insurance coverage for employees. The California Health Care Foundation found that under the right circumstances pools can meet cost and coverage goals and expand insurance choices, but it depends on the cohesiveness of a pool’s members and the market in which it operates.
Whatever health plan alternative you find fits your company best, employers do have options outside of the big box. You can get away from typical insurance companies.
Mark Haegele is a director, sales and account management, at HealthLink. Reach him at (314) 753-2100 or firstname.lastname@example.org.
Empathy is the ability to experience and relate to the thoughts, emotions or experience of others. Empathy is more than simple sympathy, which is being able to understand and support others with compassion or sensitivity.
Simply put, empathy is the ability to step into someone else's shoes, be aware of their feelings and understand their needs.
In the workplace, empathy can show a deep respect for co-workers and show that you care, as opposed to just going by rules and regulations. An empathic leadership style can make everyone feel like a team and increase productivity, morale and loyalty. Empathy is a powerful tool in the leadership belt of a well-liked and respected executive.
We could all take a lesson from nurses about being empathetic. Time and again, nurses rate as the most trusted profession. Why? Because they use proper empathy to make patients feel cared for and safe.
Over the years I have discovered that most people who score high on assessments for empathy have no idea why. They do not completely understand what it is they actually do that makes others see them as empathetic. They can only express that they:
- Like people.
- Enjoy working with and helping others.
- Value people as individuals.
In order to facilitate a deeper understanding of the importance of empathy in the workplace, I will pose four questions regarding the nature, role and benefits of empathy.
1. Why does it matter for us to understand the needs of others?
By understanding others we develop closer relationships.
The radar of every good executive just went off when they read the word “relationships.” This is not a bad thing since most people understand the problems that happen when improper relationships are developed in the workplace.
This being said, the baby cannot be thrown out with the bath water. In order for a team of workers and their leaders to work powerfully together, proper relationships must be built and deepened.
When this happens through empathy, trust is built in the team. When trust is built, good things begin to happen.
2. What traits/behaviors distinguish someone as empathetic?
Empathy requires three things: listening, openness and understanding.
Empathetic people listen attentively to what you’re telling them, putting their complete focus on the person in front of them and not getting easily distracted. They spend more time listening than talking because they want to understand the difficulties others face, all of which helps to give those around them the feeling of being heard and recognized.
Empathetic executives and managers realize that the bottom line of any business is only reached through and with people. Therefore, they have an attitude of openness towards and understanding of the feelings and emotions of their team members.
3. What role does empathy play in the workplace? Why does it matter?
When we understand our team, we have a better idea of the challenges ahead of us.
To drive home the above point, further consider these:
- Empathy allows us to feel safe with our failures because we won’t simply be blamed for them.
- It encourages leaders to understand the root cause behind poor performance.
- Being empathetic allows leaders to help struggling employees improve and excel.
Empathy plays a major role in the workplace for every organization that will deal with failures, poor performance and employees who truly want to succeed. As leaders, our role is simple—deal empathetically with our team and watch them build a strong and prosperous organization.
4. So why aren’t we being more empathetic at work?
Empathy takes work.
- Demonstrating empathy takes time and effort to show awareness and understanding.
- It’s not always easy to understand why an employee thinks or feels the way they do about a situation.
- It means putting others ahead of yourself, which can be a challenge in today’s competitive workplace.
- Many organizations are focused on achieving goals no matter what the cost to employees.
Each of these reasons can be seen as true.
Let me ask a question though: What distinguishes average to mediocre leaders from those who excel?
In my opinion, the distinction comes through the ability of the leader who actively works against all the so-called “reasons” and incorporates an attitude of empathy throughout his or her organization. That type of leader will excel.
By spending more time learning about the needs of their employees, leaders can set the tone and approach taken by their employees to achieve their organization’s goals.
When writing about empathy I am reminded of the famous quote from Theodore Roosevelt:
“Nobody cares how much you know until they know how much you care.”
This is a truth that has long stood the test of time. It is true for our relationships in and out of the workplace.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email email@example.com or visit her website at www.delorespressley.com.
Roadblocks abound in business. Most business owners have been told, “No, we won’t fund your great invention.” Most executives have been told, “We’re not ready yet” to enter that wide-open, new market. But how they respond to those obstacles, the “no”s that are inevitable, is often a good indicator of who will ultimately succeed.
The first step is to step back and assess the causes of the opposition. That likely requires asking probing questions to get insight about the reasons and reasoning behind the rejection. The banker who rejected your idea may have valuable insight into your industry sector, information that could affect how you choose to proceed.
While data gathering, also probe for guidance on how to make your proposal stronger, when to re-pitch your proposal and who else may have decision-making or decision-influencing authority. The goal should be to identify possible avenues for future appeals.
Armed with the new information, it’s useful to then take a look back at where you are in relation to your goals for the project. Review and celebrate your successes. It will give you the energy to continue onward. But measuring your results, as well as who helped you accomplish the past results, also may shed light on who may be able to guide or assist you in your next steps.
Now, modify your strategy. Every rejection should be viewed as an opportunity to improve. Your planned adjustments should be listed and scheduled. Then, as you progress in making changes, you will be able to see your accomplishments and have a record of how you responded to different scenarios for future reference. It also will give you a clear return on investment in time and energy spent and keep you centered on progress.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s Entrepreneurial Winning Women, one of Enterprising Women Magazine’s Enterprising Women of the Year Award and the SBA’s Small Business Person of the Year for Region VI. Her company, Zeitgeist Wellness Group, offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgroup.net.
There are many pressures on organizations to make the most out of every customer interaction and maximize the return on investment on marketing and sales spend. However, businesses often don’t have the work force necessary to handle these functions as timely and effectively as they would like or the tools and processes in place to measure and track success. Companies that are able to track interaction, engagement, investments and customer patterns and behaviors often enlist the help of a customer relationship management (CRM) tool.
“A CRM tool helps businesses manage sales, marketing and customer service operations without significantly expanding their work force,” says Gina Rosen, a consultant at Columbus. “CRM, in the past, may have been nice to have — a luxury technology, but in today’s marketplace, it’s a must have to stay competitive.”
Smart Business spoke with Rosen about CRM, its applications and how it has helped businesses improve processes to better engage customers, target sales and gauge marketing effectiveness.
What are the typical features offered by a CRM system?
The features offered by CRM are very diverse. It’s primary applications are contact management; marketing automation; sales force automation; sales and lead management; reporting and analytics; call center and case management, particularly with respect to customer inquiries or complaints; workflow automation, or automating manual processes; and social media integrations. Businesses have the option for on-premise solutions where the software is hosted at the business on its servers, or they can utilize a Web-based or cloud option, which involves less initial financial investment. The software can also be customized to meet the particular needs of a business.
Is CRM cost prohibitive for businesses?
No it is not, however, had this question been asked six or seven years ago the answer would have been yes. Previously, enterprise-ready CRM software required significant funds to get the software and hardware in place. But with the advent of cloud-based solutions, even businesses run by a sole proprietor can afford CRM and leverage its applications to optimize processes. The cloud-based model allows business owners to pay through subscriptions that charge per user. The pay per user cloud-based model offers a low-cost opportunity to implement CRM, experience the value and see the return on investment (ROI).
What are the most compelling reasons an organization would implement CRM technology?
A recent survey of 200 top-performing small and medium-sized businesses showed that the number one reason businesses implement CRM software is to establish data-based metrics for sales and marketing. It also provides the ability to show ROI and quantitative key marketing metrics that mean a lot to businesses.
The second reason CRM is implemented is to proactively communicate with customers. Customers expect a lot these days, and one of those expectations is that businesses, whether small or large, interact with them. To stay in front of your customers and offer personal interaction is critical.
Within that same vein, the third reason companies take advantage of this software is for custom-targeted sales and marketing. With CRM you can customize that end user experience, which makes your sales force more effective. Customers can interact directly with your CRM custom solution through your existing website and experience a tailored visit based on previous interactions, or your sales force can utilize the standard feature when interacting with customers and have all of a customer’s history available in one spot.
What are the most important value drivers for CRM?
The top value for a business is the software’s ability to help manage marketing and sales campaigns. CRM can help businesses test marketing and distribution strategies and gauge customer reactions. This information can be applied to future marketing efforts.
Another important value driver is that the software serves as a customer data repository, allowing you to consolidate customer knowledge within the organization in CRM. This includes far more than just contact details, but also customer behaviors and attitudes and price sensitivity. This, combined with personal data, can allow businesses to build more effective and predictive sales models and marketing campaigns that result in higher sales.
Further, CRM systems can help demonstrate ROI. With CRM you can quantitatively show increases in sales, customer referrals and participation in promotions.
What is the most common challenge a business faces when implementing CRM?
Typically the challenge is user adoption — getting your sales force and front line users to embrace CRM. They often see populating the fields as double entry, an extra step, or another way for management to check in on them. But once the sales force sees that using the software results in more sales, they can easily overcome that hurdle.
What are the most common performance metrics?
The top one, hands down, is revenue growth. The faster you can show ROI the better.
Second is growth in a business’s customer base, which means adding new customers or converting leads into paying customers.
The third most common performance metric is aggregating customer data. Many companies have customer data spread out over disparate systems. CRM gives businesses a one-stop shop for their records.
Can you give us some examples of companies that have benefited from implementing CRM?
The Toledo Mud Hens baseball team, which works within the media and entertainment industry, had ticket sales go up 88 percent in one year and their internal operations couldn’t keep up with demand. Adopting CRM allowed them to automate and streamline inefficient processes, which translated into more ticket sales. A customer testimonial is available with more information.
Another example is the human resources consulting firm Findley Davies. Implementing CRM in their call center has given them the ability to manage daily responsibilities and track productivity. It has dramatically changed and improved day-to-day operations within their Benefits Administration department.
Gina Rosen is a consultant at Columbus. Contact her at (248) 850-2195 or firstname.lastname@example.org.
With more than 20 years in the market and 6,000 successful business implementations, Columbus is a preferred Microsoft Dynamics business partner for ambitious companies. Columbus’ key deliverables include flexible and future-safe ERP, CRM, BI and related business applications that deliver competitive advantage and immediate impact.