There’s a classic line from the 1970 movie “Love Story” that has become a part of our popular culture. In the drama, the dying heroine played by Ali MacGraw says to her husband, played by actor Ryan O’Neal, “Love means never having to say you’re sorry” as he apologizes for his anger. It is certainly a memorable and tear-jerking line, but is saying, “You’re sorry” all that bad if it can soothe a wound caused by someone speaking or acting out before thinking?
Disagreements and anger are a reality in the workplace and in life in general. Various people react in different ways when under pressure. Some lose their cool completely and say things they instantly regret, while others launch into tormenting the perceived offender with the silent treatment. No matter the technique used to punish, all of these methods quickly become tiresome and, more importantly, adversely affect the workplace.
Too frequently in the work environment, many people just can’t suck it up and utter the two simple words, “I’m sorry,” even when they know they’re dead wrong. It’s not a macho thing either, as women don’t behave much differently when they feel put upon. What’s a boss to do when this stubbornness becomes problematic?
In a word: intervene. When not controlled, these unreasonable, obstinate antics can become time-consuming and disruptive. It could all start with an impetuous negative e-mail or a less-than-mature voice mail left in the heat of battle that cascades into a futile distraction, as otherwise effective and seemingly sensible employees act out as if they’re in a 20- or 30-year time warp, behaving as if they’re back in the third grade rather than adults in the workplace.
The most expeditious method that works with either the protagonist or antagonist in an office drama is to call a spade a spade, so to speak, and get the feuding parties together and cut to the chase, making each person agree to bury the hatchet but preferably not in each other’s skull. If employees’ anger management issues are left to fester, they can easily result in other people in the same work environment taking sides, and in short order, you will find yourself in the midst of a Civil War. The only thing guaranteed when this occurs is that there will be casualties. It is incumbent on the ruling manager to make sure that the company doesn’t wind up as the victim, incurring a loss of productivity and causing everyone around the two factions to feel as if they’re walking on pins and needles.
While many times it would be easier for the boss to ask one of the warring participants to approach the other to work out their differences, this tactic just takes too much time and the outcome can be iffy. It really doesn’t matter who is right or wrong but that the nonsense is stopped dead in its tracks. The best way to accomplish this is to make it more than abundantly clear that anger in the workplace is a nonstarter and could be a career-inhibitor.
Allowing employees to exhibit a lack of civility will cause a domino effect that will lead to no good. Civility does not just apply to peers. Instead, it’s applicable to all who must work together, including superiors, subordinates and even fellow board members. Don’t confuse civility with agreeing or disagreeing with someone. It also doesn’t mean one has to believe that someone is effective in his or her role. Instead, what must be required is that those within an organization, no matter what level, simply take the higher road and respect not necessarily the person but the role and make the assumption that everyone has a part in working toward shared goals, until it is proven otherwise.
Once everybody knows the rules of engagement, many times the negative engagement suddenly ends and it’s back to business as usual. When that doesn’t happen, it’s time for offenders to be forced to go to their respective corners so as not to do each other or the company any more harm.
To promote coexistence when no one wants to take the first step and say, “I’m sorry,” it’s up to the adult in the room — and that would be you, the boss — to step into the fray with your whistle to call a permanent timeout to these types of disruptive shenanigans.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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Launching a new venture is probably one of the most thrilling moments for any entrepreneur. It’s a birth that often brings forth a long-standing dream for the founders and is steeped in joy, pride and egotism. However, for many new captains of industry, the dream vanishes like smoke shortly thereafter. In fact, just half of all businesses survive the first five years, and only one-third survive 10 years, according to U.S. Small Business Administration statistics. Thus, it’s worth investigating why projects fail.
In a large majority of cases, the business owners failed to raise sufficient capital to fund the labor, marketing, taxes, insurance, legal expenses, bookkeeping, supplies and costs of goods for the business. Oftentimes, they underestimated expenses and overestimated how quickly revenues would increase. In other cases, they knowingly entered the market with insufficient cash because of limited credit and savings.
Other failures are caused by an implosion from within. Specifically, the founding partners reach a point at which they disagree on how to build the business and then fail to come to a consensus that leaves all parties feeling invested in the project. Or the business develops naturally in a way that calls for the founding partners to take on roles they don't want to assume. In either scenario, the remaining partners must buy out the exiting partners in order to stay in business or fold up shop.
In the worst collapses, the venture was just poorly conceived. The founders developed a business concept based mostly on their own personal experiences or anecdotal evidence. They failed to conduct or acquire scientific research on whether there was sufficient demand for their proposed products or services. They made a cursory study of the competition. Or they made assumptions about what drives potential customers to buy when designing marketing campaigns, rather than collecting data that revealed true trends in buyer motivations.
In these cases, the founders could have mitigated their chances of failure with some thoughtful planning before the shingle was hung. Would-be entrepreneurs should clearly write out their vision with detailed specifications and the cash that will be needed to complete it. They should plan contingencies for overcoming potential obstacles.
They also should identify the strengths and weaknesses in any potential management team and seek out individuals who can fill the holes. For instance, a visionary leader who prefers to focus on the big picture will usually need someone on board who loves the details in order to ensure the project is thoroughly vetted and structured.
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.
Kurt Artinger turned an idea he had 10 years ago into a 40-employee business that made $8.1 million in 2010. Replacement Services LLC, which helps people find replacements for their lost or stolen jewelry, grew at an average annual rate of 30 percent over its first decade.
Few would have questioned Artinger if he slid into cruise control and just tried to keep a good thing going as long as he could, especially at a time when so many companies are struggling.
But Artinger had no plans to take his foot off the gas pedal. He wanted to grow even faster.
“If you’re thinking about continuous improvement, then I don’t care what I developed two years ago,” says Artinger, the company’s founder and CEO. “What I’m going to develop a year from now is going to be a heck of a lot better than what I did two years ago.”
In order to make that thought a reality, Artinger accepted that substantial changes might be necessary. The difference this time as compared to when he founded the company was that he now had a group of people around him to assist with devising a winning plan.
“So we sat down with basically a blank sheet of paper on a wall that was about 8 feet long and we put our value stream process down,” Artinger says. “What processes can we eliminate? What has value to our clients? Is that value worth that touch? We started identifying how to streamline what it is that we do.”
Artinger wanted to get down on paper every step that his company took to deliver a service to its customers. The goal was to figure out which processes worked really well and which ones required some tweaking to improve performance.
“That’s the reality of growing a company,” Artinger says. “The little problems that you have aren’t that huge, they are little problems. But if you double it or triple it, those problems become huge. So that’s what you have to identify.”
It becomes a simple process if you can set aside your ego and listen to what your people are telling you.
“Egos get in the way of so many good leaders,” Artinger says. “They have the ability to lead and change, but your ego comes into play and it’s like, ‘Is it about me personally or is it about the company?’”
Artinger just wanted the business to keep growing. Ideas that rose to the surface included achieving better inventory control and finding a simpler way to track items through the system.
If these problems were solved and the company grew even faster, Artinger would get all the glory he wanted. More importantly, his people who made great contributions to the effort by identifying key issues that needed to be addressed would get recognition and take a big step toward becoming leaders themselves.
Artinger just needed to take the time to work with them and see what thoughts they had in mind to integrate their ideas into the company’s work flow processes.
“It would be real easy for me to sit there and say, ‘You know what? That’s a great idea. Here’s what we’ve got to do,’” Artinger says. “If I do that, have I put them in position to be a potential leader later on? I haven’t. I’ve just solved the problem. It’s not my intention to beat them up, but to help them have a well-thought out plan.”
When your people have suggestions, ask questions to see how much thought they have put into it and don’t put them in a position to wait to be told what to do next.
“I don’t want to dictate how to resolve issues or problems,” Artinger says. “I want them to tell me what they think the solution is because I’m always learning how my people think.”
Through this effort which began in January 2011, Replacement Services has made progress, especially with its shipping department.
“We took a process that was about three days and our average turnaround time now is three hours,” Artinger says. “We exceed customer expectations and that’s one of the big things we look at.”
How to reach: Replacement Services LLC, (888) 205-2522 or www.replacementservices.com
Show your passion
Kurt Artinger looks forward to getting hit with a challenge when he arrives at work every morning. It’s what makes leading Replacement Services LLC fun.
“If you’re managing a group of people and/or you’re the CEO of a company, you have to be passionate about what it is that you do,” says Artinger, founder and CEO at the 40-employee insured jewelry replacement company. “In this environment, I don’t hit near as many walls as I used to. It’s always growing, always learning and always continuous improvement.”
Your people are going to look to you for clues about whether or not they should be excited about a new initiative or a new way of doing things. And one of the best ways to build excitement is through inclusion in the work that needs to be done.
“I’ve got people who say the only way I’m leaving the company is if you pry my dead butt from the seat,” Artinger says. “And that’s because they have value. That’s what people want, to be valued as employees and valued as people. If you do that, you’re going to have a very successful company.”
Ron Daugherty had hit a ceiling. Daugherty Business Solutions had been on a steady growth trajectory ever since he had launched the company, but it had reached a point where there was no more room to grow the organization.
“I found I could personally by brute force and a lot of hard work keep my hand in things and drive things forward in three or four different business units,” says Daugherty, founder, president and CEO at the 500-employee company. “But as we started to expand beyond that, it was impossible to scale further.”
The IT consulting company had a presence in St. Louis, Chicago and Atlanta and was now looking to get up and running with a different kind of opportunity in Dallas. Instead of providing service, the Dallas business unit would be a product-based venture that would support distributors and wholesalers across the country on behalf of Anheuser-Busch Companies Inc.
But the transition wasn’t going well and Daugherty quickly began to sense that he had bitten off more than his company could chew with this latest expansion.
“I had to gracefully ramp down what we were doing in Dallas and back away from it,” Daugherty says. “We had never had to do that before. It had been all growth. We didn’t hurt anyone, but we couldn’t maintain the operation with the amount of leadership required for this new product company. It was clear until our leadership bandwidth and infrastructure was strengthened, we were not going to be able to scale this thing much further. That was a pretty dramatic point in time for us.”
Daugherty realized there was a leadership void in his company that stemmed from what he had traditionally looked for when making hires and developing leaders in the business.
“We didn’t have enough leadership ability at the very highest level, the level of running a business entity or building an organization,” Daugherty says. “We started this company 26 years ago as a technology-focused organization. So most of the things we looked at and hired for and valued at the time were really smart technology people. We were very good at that, and it’s still a real theme of what we do.”
But it wasn’t enough to grow the business beyond what it was. And that growth was something Daugherty very much wanted to achieve. The trick was infusing new leadership without disrupting the culture that he had worked hard to build over the years.
“This had been a successful organization,” Daugherty says. “But it wasn’t even close to achieving the vision that I have and had for the company. So we had to address that.”
Know what you’re looking for
Daugherty wanted to find leaders to help his company grow, but they couldn’t just be any leaders. They had to be a fit for his organization and its culture. So pure business acumen wasn’t the only criteria he had in mind.
“Successful companies have a strong identity,” Daugherty says. “What that means is if you hire someone from the outside, it’s not an overnight thing that they will internalize your culture, your values and your vision.”
Daugherty sees his company as an alternative to national consulting companies in that it offers more local support from people who live in the communities in which they work. That family-oriented spirit was something he wanted to maintain in the service the company provided and the culture employees worked in.
Surely, he would have to bring in some people from the outside. But he believed it would be a mistake to automatically dismiss the untapped potential talent that might have just been waiting to be discovered.
“If you don’t promote from within, not only are you going to miss an opportunity to leverage some of the talent that you have, but some of that talent has experience that they have internalized that is associated with how your company does business,” Daugherty says.
At the same time, Daugherty recognized he needed some new blood. If everything he needed were within the company’s walls, he wouldn’t have had to shut down the Dallas site in the first place. He was going to need to look both outside and inside for this leadership talent he needed.
“You have to hire talent from the outside or you’ll become limited in terms of how fast you can grow,” Daugherty says. “You do need fresh ideas. It’s absolutely critical that you do both on an ongoing basis. If you don’t have a legitimate sincere commitment to promoting from within, why would someone join you for the long term? At the same time, you’ll limit yourself tremendously if that’s the only approach you take.”
One of the first things Daugherty did was begin looking more closely for leadership potential in the people the company looked to hire from the outside.
“It’s something we kind of paid attention to from the beginning, but we started to focus more on it,” Daugherty says. “When we hire these really smart technical people, let’s place even more emphasis on what kind of interpersonal skills they have. What sort of leadership potential do they have? What sort of business acumen do they have?
“Those became even more important for us to look for. Those are qualities we try to develop in our existing employees, but also certainly in new employees we looked to bring into the company.”
An added emphasis was also placed on developing leaders from within.
“We saw some great talent in our organization, but a need to do more to help groom and develop and bring along those business skills,” Daugherty says. “So that was part of it.”
The key to recognizing whether someone, either internally or externally, has the skills that could be groomed into being an effective leader is their mindset on new opportunities.
“Look for the evidence of how they translate the concepts that I’m talking about,” Daugherty says. “How do they relate that to specific things they’ve done? What have they done that shows that this isn’t a new idea for them, that it’s very consistent with the way they operate, the way they do business and the way they’ve led other organizations? Get it past the concept and the philosophy. What are the specific examples of how you’ve done this?”
You need to get to this depth of knowledge because it’s going to take more than energy and spirit to be a good leader. If you see it in the interview, you may think you’ve got a winner. But if there’s no substance behind it, you’ll have a problem. You need the complete package.
“It’s really tough to make somebody smarter after they join your company,” Daugherty says.
Groom new leaders
As Daugherty found people who he felt could serve as leaders in his company, the next step was to get them on the path to actually becoming those leaders he needed. He felt mentoring would be the best way to go with his direct reports doing the grooming.
The key to making it work would be their ability to demonstrate patience as the new leaders were trained. Daugherty had to get the leaders he had on staff to work just as hard as he would be working to infuse and develop more leadership in the company.
“You bring someone in and they are bright, talented and hard-working and you tend to break away too soon because we’re all busy and we all have a number of things to do,” Daugherty says. “So No. 1 is: You’ve just got to stay with it. You’ve got to spend the time.
“You can’t fall into the trap of, ‘OK, at last. I’ve got a new leader here. I’m going to spend a couple of weeks or months getting him up to speed, and then I’m going to turn things over to them so I can get more done.’ You have to spend more time. You’re probably going to have to spend six months to a year of some really significant overlap time with what they are doing.”
To that end, leadership training needs structure. Being a leader can be defined in a lot of different ways, so you need to figure out what you want to accomplish through the training.
“You have to have clarity around goals and objectives and the definition of success and what we're trying to achieve here and how we reward and incent people and how we reward folks,” Daugherty says. “You have to have structure around that or you’ll just run out of steam. Make sure the structure you put in place for how you recognize success and reward, incent and define success lines up with exactly what you’re trying to accomplish.”
Daugherty wanted people who could get the Dallas office back on its feet and make his offices in Atlanta and Chicago and back home in St. Louis stronger. He wanted people who would be ready when the next wave of expansion hit. He also wanted them to fit in with the culture and so it was key that the training was done the right way.
“If you have the values and the vision and the commitment and you have the structure, that’s been the breakthrough for us,” Daugherty says. “We see a lot of companies have the structure, but they are not connecting it to their values and how they live and think every day. And we see other organizations that don’t have the structure and all the good intention in the world will not get them where they need to go. So it’s a combination of the two.”
Daugherty reflects on his father for much of his perspective on leadership development. He was heavily involved in education, first as a high school teacher and principal and later as a superintendent, mostly in smaller towns.
“It was a job that as I think back on it and became a little bit older and more experienced, I realized what a leadership role that was,” Daugherty says.
“He had principals, teachers, bus drivers and cooks all working for him. Keeping that group motivated and working together and not fussing and fighting with each other. Helping folks on the school board, who in small towns ranged from farmers to grocery store owners and didn’t know a whole lot about the school business. Helping to educate and lead them while basically reporting to them. He didn’t have positional authority, but he needed to be their leader.”
It was a philosophy that Daugherty wanted his direct reports to understand as they worked to groom these new leaders the company needed. It was clear as he heard from the people who were getting trained that they had bought into what he was selling.
“As I bring in folks who are very senior people who interview with my leaders here, one of the things that I hear consistently is they say, ‘Ron, I’ve talked to your leaders here. Everybody is on the same page. You can see everyone here has bought into the vision,’” Daugherty says.
“They are totally committed and so we have a core team that is growing every day. It’s going to be an engine for driving a tremendous amount of growth.”
Daugherty points to people like John Wirth, his regional manager for Atlanta, Minneapolis and Chicago, who has helped make it possible to reopen in Dallas.
“He’s taking some of the leadership talent that he has developed, especially in Atlanta where he is furthest along, and we’re taking some of those leaders to Dallas,” Daugherty says.
He references Carol Morgan, who joined the company as a consultant and is now a regional vice president, as well as Jeff Hatfield and retired U.S. Navy Rear Adm. Lee Metcalf as examples of leaders who have been groomed through this system.
“We have a plan together that we’re drilling into more detail every day that shows how we can take the company from $100 million to $700 million in revenue over the next 10 years,” Daugherty says. “We’re really on a growth track with leadership development happening every day and new talent joining us as we accelerate on our journey.”
How to reach: Daugherty Business Solutions, (314) 432-8200 or www.daugherty.com
The Daugherty File
Ron Daugherty, founder, president and CEO, Daugherty Business Solutions
Born: Paragould, Ark.
Education: Bachelor’s degree in math, Arkansas State University; master’s degree, bioengineering and advanced automation, University of Missouri
Who would you have liked to meet and why?
Albert Einstein. He had a philosophy as well as just having an exceptional level of intelligence. He related the science that he understood better than almost anybody else to the real world and to human behavior.
I’m not as smart as Albert Einstein, but I’ve been smart enough to understand a lot of things around new technology. I’ve had the ability to translate those things into how they matter for businesses and for people. While I have people working for me who are a lot smarter than me on the on the technology side, to be able to pull the two sides together, I see some of that in Einstein. Really smart but able to relate as well to what that might mean to people.
Daugherty on motivation: We do have a very specific vision, culture and set of values here. When we consider someone for a leadership role, they really have to be motivated by what it is we’re trying to build. That may sound simple, but I see that point missed by people a lot. It’s not just that you’re smart or that you’re talented. Do you really want to be part of what we’re trying to do here? We’re going to be as crystal clear as we can possibly be with you about what we’re trying to do. If you want to be part of that and it motivates you to help build that, we can probably make a lot of things work here. If you’re extremely talented but you’re not particularly motivated by it, you’re never going to be a top-tier leader.
Do you understand the challenges your employees face? If you don’t, you need to. Any work force that has lived through these times of dislocation, reduced disposable income, rising prices for food, gasoline and other necessities and unrelenting worries about the future is, quite understandably, a much-changed group.
The confidence these employees have in their company’s leadership and the engagement they bring to their jobs has diminished considerably. As a result, many employees — including those whose contributions are vital to their companies’ ability to rebound quickly and nimbly — are poised to make a career move with the first signs of stepped-up hiring in their industry.
The companies that will fare the best as the recovery spreads and new opportunities are created for these disaffected workers are those whose leadership has been open, empathic and accessible during these rough times. How did you communicate about the difficult actions you took and why they were necessary?
To drive your organization through hard times, did you grab hold of the reins and issue demands that employees “fix sales” or “cut costs”? Or, did you solicit your employees’ take on the challenges and engage their help in finding a solution – so they felt indispensable, appreciated and at least somewhat in control of their fate?
Regardless of what you did or didn’t do in the past, today is the first day of the rest of your company’s future. The steps you take today to establish the face of leadership in your organization — as well as in the weeks to come as the recovery picks up strength and breadth — will position your company for the post-recovery environment. Here’s what you can do to chart a positive course.
Get behind the numbers
Break out of the routine that includes meetings, presentations, e-mails and metrics to really think about the drivers of success and the limitations that have resulted in your company’s numbers. Experience a day in the life of your organization. Go into departments and travel with sales, technical and service people on routine calls.
Don’t be fooled by success and be cautious of filtered information. Have a dialogue with people about their work instead of just listening to presentations that have been structured, massaged and beautified. Be honest with yourself and your team about the “elephant in the room,” the conditions and state of your markets and your business.
Focus on execution
Get a firm handle on how your organization plans and executes. What motivates your people? Do they have a passion for doing their job? Do they strongly believe in what the company stands for?
Relook at how work gets done and what’s really necessary versus what’s merely become routine. Ask people where and how they spend their time, and how they measure their personal and professional success.
Be visible internally and externally
People should feel they know you and have access.
Have a dialogue with your employees, customers, vendors and other third parties. As you engage with them, dig for truths so you can understand what they do, where they’re feeling stymied and how you can make improvements to enable them to be more successful.
Open communication channels
In one-on-one lunches, town halls and other venues, probe for the reality that your employees face, understand and see every day. Be grateful for the tough questions, and if they’re not asked, raise them yourself. Talk about your people and the commitment they’ve shown through the worst economic downturn since the Great Depression.
Praise the successes of your people. Be open, honest and sincere; and speak with energy and passion, but be yourself. Share your feelings and what you stand for so your employees can understand you and connect with you in ways they’ve never done before.
It’s a tall order, but it’s doable. A willingness to take a fresh, honest look at your company and to expose your fears and vulnerabilities to internal and external groups is the key. Get started today.
Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. He can be reached at (314) 825-9525 or firstname.lastname@example.org.
Traveling and working abroad often comes with risks, and savvy employers recognize that having employees overseas heightens their corporate liability. By protecting employees against the risks of global travel, employers can manage risks to their business, finances and reputation.
“In today’s litigious society, corporate governance and duty of care are paramount to a company’s crisis management strategy,” says Justin Priestley, executive director for Aon Crisis Management. “Businesses need to react to incidents in a timely and consistent manner, protecting their people, assets, balance sheet and brand reputation.”
Smart Business spoke with Priestley and David Drier, an international producer at Aon Risk Solutions, about how to keep your employees safe abroad.
How can businesses ensure that they are meeting their duty of care requirements?
There is a lot of complicated case law on this subject, but the issues are simple. There are three things businesses should consider, and by doing so, they will meet their duty of care.
The first step is actively trying to understand what the risks are for your people, and that means doing a formal assessment of risk. If you say you didn’t know about it, that’s not good enough. You could have tried to find out.
The second thing you need to do is come up with appropriate risk management measures that are matched to the risks you think exist. You need to demonstrate that the plan you are coming up with is appropriate for the risks your employees are facing.
Third, organizations should have a plan and discuss it. Talk about appropriate levels of insurance and how employees are going to get to the airport if there is a problem. Broadly speaking, those steps together provide organizations with a much better opportunity to demonstrate that they are meeting duty of care.
How can businesses ensure they are prepared for travel emergencies?
An adviser can match what it delivers to what it thinks are the main pillars of activity. So up front, it would provide information to travelers so they are aware of the risks in a particular area. An adviser can also provide some basic-level training for travelers.
Another thing a consultant can do, if people are traveling to an elevated risk location — somewhere like Mexico or India — is conduct an independent risk assessment of that proposed journey. It can be done quite quickly; it’s not some long, laborious process. It provides the concerned organization with a third-party independent review for a journey before it is booked, which backs them up in their assessment.
What type of training and education should employers provide for traveling employees?
There are two types of training. E-learning allows organizations to show that people have done the training. We also do an elevated risk course, which is instructor-led.
That course tends to be more specific to a particular client. Another option is an elevated risk course, in which the threats and risks are determined for where someone is going, and then travelers are trained to understand them. For instance, if you are in Central America, kidnapping is one of the major risks, and this is how it happens.
Then a consultant can offer advice on situational awareness. Many people understand what to look for and how to notice if something suspicious is happening. There is some really basic advice on risk mitigation strategies, like not wearing your Rolex watch if you’re traveling in more interesting parts of the world.
It’s important to focus on sensible, pragmatic advice that businesspeople need to understand.
What innovative services can help business travelers?
Mobile technology enables a traveler to see a country’s risk information on the go. Putting that information in people’s pockets is actually quite useful.
It doesn’t produce 20 pages of data on each country. It’s short, concise and condensed. Most people don’t want to read for 30 minutes to understand an issue. They want to read it in two minutes.
Second, there is a nice travel management system for risk managers or corporate security that enables them to know at the push of a button where their people are on a day-to-day basis and what the risk exposure is for those people.
Aon WorldAware, our online country information service, grades risks by looking at what is going on in that country, the capability of the terrorist organizations and their modus operandi. It gives ratings of 1 through 5, on a daily, weekly, or monthly basis, and they can print a report showing how many people they have in low-risk countries, or Level 4 or 5 countries, how many incidents they have had and where those incidents occurred.
It is an independent assessment. A partner has people constantly reviewing every country. There are 10 factors, including terrorism, civil disobedience, kidnap and ransom, street crime. All 10 factors for every country are assessed and scored 1 through 5.
Countries rated 1 through 3 are appropriate for routine business travel. For countries 4 and 5, you have to consider the risks a bit more. To put that into context, Level 5 countries like Iraq, Somalia, or Afghanistan have extreme risks.
The system monitors what happens in the world on a daily basis, and the countries are updated as the risk profile changes.
Justin Priestley is executive director for Aon Crisis Management. Reach him at 44 (0)20 7882 0478 or email@example.com. David T. drier is an international producer at Aon Risk Solutions. Reach him at (314) 719-3892 or firstname.lastname@example.org.
Insights Risk Management is brought to you by Aon Risk Solutions
Fraud floods the news these days, and any organization that lacks anti-fraud controls places itself at an increased risk of trying to plug leaks after the fact.
Many companies assume the greatest risks come from those outside the company, but oftentimes, fraud is committed by longtime employees who know how to work the system and disguise the financial leak, or by disgruntled workers who feel the company owes them something. Creating an anti-fraud policy is not enough; you also need to build an anti-fraud program and conduct regular assessments to truly mitigate the risk.
“The main type of fraud we are seeing today is asset misappropriation, which happens quite often,” says Ron Steinkamp, principal, risk advisory services, Brown Smith Wallace LLC, St. Louis, Mo.
Smart Business spoke with Steinkamp about common fraud red flags and how businesses can effectively implement anti-fraud tools to mitigate risk.
How prevalent is fraud?
The Association of Certified Fraud Examiners (ACFE) 2010 Global Fraud Survey found that a typical organization loses 5 percent of annual revenue to fraud, with the average fraud occurring for 18 months before being detected. While any business is a potential target, the industries most commonly victimized are banking/financial, manufacturing, and government and public administration. Generally, there are three types of fraud: asset misappropriation, corruption and financial reporting. Asset misappropriation includes fraudulent disbursements, theft of cash receipts and other activities in which individuals steal or misuse resources. These frauds are the most frequent, with a median loss of $135,000, according to the ACFE.
With corruption — in which an employee uses influence in a business transaction to obtain personal benefit — there is a median loss of $250,000. The least frequent form of fraud is financial statement fraud, the intentional misstatement or omission of material information in an organization’s financial report. However, its median loss exceeds $4 million.
What are some common red flags for fraud?
Incentive, opportunity and rationalization are the three characteristics that form the fraud triangle and are the red flags of fraud. Typically, fraud occurs where there is incentive or need, such as personal debt, living beyond one’s means or job frustration. Second, there is an opportunity, such as access to cash or inventory, weak internal controls, close relationships with suppliers or vendors or weak management. An individual may rationalize the fraud, feeling as if he or she is not being fairly compensated, or justify stealing money with the intention of paying it back. The fact is, this payback never happens.
How can an organization prevent fraud in a cost-effective manner?
The key is to create an anti-fraud culture, which begins by setting the tone at the top. Leaders must set the example by behaving ethically and openly communicating expectations to employees. There must be a formalized code of conduct founded on integrity that is communicated to all employees, and all employees must be treated equally.
Many businesses establish anti-fraud policies but fail to follow through with the key step of educating employees. Fraud prevention begins during hiring, when companies should conduct thorough background checks on potential employees. Upon hiring, employees should be trained on company policies and procedures, including the anti-fraud code of conduct. To foster an ongoing ethical environment, refresher training should be conducted regularly. By creating an environment where fraud is not tolerated and attempts at fraud are promptly dealt with, a business sends the message to employees, vendors and clients that dishonest behavior will not be tolerated.
What are the best ways to detect fraud?
The best way is to leverage your employees who are often the first to detect fraud. That’s why it’s very important to have an anonymous method of providing tips, such as a phone system or web-based tool. This should be available to customers and vendors, as well. Such a reporting system builds awareness of the anti-fraud culture and gives individuals a way to safely and effectively report suspicions. Other effective ways to detect fraud are by identifying fraud risks and by management’s implementation and monitoring of appropriate internal controls. Periodic internal audits are also a strong detection method.
What are some anti-fraud tools that can be used?
The foundation of an anti-fraud workplace is a formalized company code of conduct, which should include detailed guidance on permissible and prohibited behaviors and actions. The code should outline employees’ responsibilities in the prevention and detection of fraud, and explain the process for communicating concerns about potential fraudulent activities. It’s also important to have a clear, accurate picture of your fraud risks. Where are your weak spots? Are you unintentionally providing opportunities for fraud to occur?
A fraud prevention checkup will help frame the picture. This high-level assessment of an organization’s fraud health focuses on fraud risk oversight, ownership and assessment. It includes reviewing fraud policy, controls and detection efforts. A more detailed fraud risk assessment includes identifying how fraud could occur within critical processes and who might be in a position to commit it. Fraud monitoring involves using data analytics to highlight red flags and potential errors, fraud, inefficient operations and targets.
A formal fraud review/investigation is best directed by a Certified Fraud Examiner (CFE), who can conduct a thorough, independent, objective review and provide solutions. Don’t wait until you’re under water to stem the tide. Proactive measures can prevent fraud and well designed detection programs can uncover existing abuses.
Ron Steinkamp, CPA, CIA, CFE, is principal, risk advisory services at Brown Smith Wallace, St. Louis, Mo. Reach him at (314) 983-1238 or email@example.com.
For more information on this topic, please see: Fraud Prevention Checkup
Insights Accounting is brought to you by Brown Smith Wallace LLC
Every employer is facing increases in the cost of health care, which are a function of price, utilization and intensity. And with every employer looking for ways to lower costs, imaging services are a prime target. Imaging services such as MRIs are one of the fastest-growing components of health care; and there are opportunities to help identify and limit all three cost drivers.
“High-cost imaging is something that you, as an employer, want to keep your eye on because it’s trending higher, typically, than the rest of your categories of care,” says Mark Haegele, director, sales and account management at HealthLink. “But the great news is that this is an area that you can control and you can manage.”
Smart Business spoke with Haegele about why imaging services costs are increasing faster than other health care areas and what employers — particularly self-funded employers — can do about it.
What is high-cost imaging and why is its use increasing?
Imaging services are tests such as X-rays and ultrasounds, as well as high-tech imaging including MRIs, CT scans, PET scans and nuclear cardiac imaging.
While some experts say that imaging growth has slowed in recent years, it’s still one of the fastest-growing segments of medical costs, accounting for nearly 15 percent of all health care costs, according to Blue Cross Blue Shield. As an employer, your inpatient costs may be consistent year over year and your physician costs might be consistent year over year, but for many employers, imaging costs are trending much higher than those in other areas.
How can employers address increasing use and cost?
Most managed care companies have drastic variations in their imaging contracts with providers within their network. At Hospital A, the cost of a MRI might be $600, while the cost of that exact same MRI at Hospital B, right down the street, is $4,000.
The discrepancy exists because, as managed care companies negotiate with hospitals, there is give and take on each type of care, from inpatient to outpatient to emergency room to imaging.
Hospital A may have offered the managed care company a good deal on MRIs in return for higher outpatient surgery costs, while Hospital B might need less income from its outpatient surgery but a higher MRI rate. Employers and employees are typically in the dark about these variations within a network.
In addition to educating employees on how to choose where they get their imaging services, you can align incentives or bonuses to drive employees toward lower-cost options. For example, if employees know their MRI co-pay is $25, do they really care if the MRI costs $600 or $4,000? The two MRI choices are both top-quality providers, and more than likely the exact same machine. But if you, as a self-funded employer, can offer the employee a $100 gift card if he or she chooses the $600 MRI location over the $4,000 location, your company saves more than $3,000.
How can employers help control overutilization of imaging services?
Overutilization issues often arise when there is no continuity of care by employees. An employee might go to a doctor and get a CAT scan at one hospital, but the next hospital doesn’t get the employee’s records, so the same test may be repeated. Overutilization occurs most often with aliments that are hard to diagnose, and in cases in which patients are constantly going in for tests for ailments such as migraines or for sleep studies.
Employers should use comprehensive case management to identify employees who have no continuity of care and/or have chronic problems that are most likely to result in overutilization. By managing health care cases closely, employers can help employees identify and retrieve previously done tests.
In addition, education can result in a decrease of utilization. A recent National Imaging Associates study found that a large percentage of MRIs are ordered to meet patient demand rather than to meet a true diagnostic need.
What is intensity of imaging services and what opportunities exist for employers to decrease these costs?
Intensity is when employees receive PET scans, when their problem could have been diagnosed with CAT scans. The intensity level of the service is higher than it needs to be, and therefore, the costs associated with that are higher than they need to be.
There are doctors who automatically run all MRIs, which translates into thousands of dollars, when they could have first run a CAT scan, which, in comparison, costs hundreds of dollars. For example, more than 10 percent of chest CT tests are ordered with no claim evidence of a previous plain film of the chest, according to a National Imaging Associates study.
In a self-funded environment, through physician profiling and comprehensive medical management, you can help reduce inappropriate intensity levels of services to employees. There are imaging programs in which employees call to pre-certify services, and if a higher level of care was ordered than is necessary, that can be managed down to a lower level of care.
By looking at all three factors — price, utilization and intensity — employers and employees can work together using benefit design, education and aligned incentives to lower the cost of imaging services.
Mark Haegele is director, sales and account management, at HealthLink. Reach him at (314) 753-2100 or Mark.Haegele@healthlink.com.
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Learn how SBA Financing can help your business grow & succeed
Thursday, May 31, 2012
10:00 a.m. to 11:00 a.m. EST (US & Canada)
Registration is required: Click Here to Register
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Brief description of the topic:
In trying to grow their businesses, owners often find themselves seeking credit to finance those expansions.
Join Kreischer Miller, Fox Rothschild LLP and PNC Bank for this free webinar that will be hosted by PNC Bank and Smart Business to learn how U.S. Small Business Administration (SBA) loan programs may help.
The SBA offers a variety of loan programs that provide basic to complex financing solutions that business owners might not be able to attain conventionally. Hear from our well-versed panel — a CPA, an attorney and a senior SBA business development officer — who will go through case studies that show the unique ways SBA loans can be structured to help businesses successfully grow and expand.
In this session you will learn:
- How the SBA transformed since the Small Business Jobs Act was passed in 2010
- Benefits of SBA financing vs. conventional financing
- Overview of the SBA 7(a), 504 and Express Loan Programs
- Case studies showing creative ways SBA loans can be structured
Steven E. Staugaitis, a CPA and leader of Kreischer Miller’s Entrepreneurial Services specialty services group. Steve focuses on serving privately held companies with their accounting, tax and business advisory needs.
Thomas J. Kent, Jr., is a partner and Attorney for Fox Rothschild and co-chairs the firm’s Franchising, Licensing & Distribution Practice. He focuses on franchise law as well as mergers and acquisitions.
Lisa Kennedy, Vice President, Senior Business Development Officer at PNC Bank is one of the top SBA lenders in the nation. With over 22 years of SBA financing experience, she has helped fund over $150 million in SBA loans.
The Webinar and/or materials were prepared for general information purposes only and are not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell securities or currencies or to engage in any specific transactions, and do not purport to be comprehensive. Under no circumstances should any information contained in the seminar, and/or materials be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed in the seminar and/or materials are subject to change without notice due to market conditions and other factors.
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services and bank deposit products and investment and wealth management and fiduciary services are provided by PNC Bank, National Association, Member FDIC.
©2012 The PNC Financial Services Group, Inc. All rights reserved.
Executives are some of the busiest people I know. They are often some of the unhealthiest, as well.
The trend in today’s workplace is towards doing more and more with less and less. This adds strain to the already overworked executive. That strain affects the health of the executive and hinders his or her ability to do their job effectively.
This trend cannot continue. It is destroying the lives of too many top-notch professionals.
Here are 27 tips for staying healthy as a busy executive:
1. Remember to smell the flowers. Take time out to enjoy the little things in life. Being just as impressed by small events as large ones helps to cultivate wisdom and clarity.
2. Stop living a “hit-and-miss life.” Living aimlessly is like shooting multiple arrows that miss their targets. This is a waste of time and not a trait of an effective leader.
3. Anxiety is anticipation run riot. Anticipating the worst keeps us from enjoying the present. Realize that anxiety does not facilitate self-control.
4. Remember to take breaks. Taking breaks during work helps you accomplish more during the time that you are working.
5. Avoid procrastination. Remove temptations around you such as an instant messenger program or magazines, which might tempt you from being efficient at work.
6. Keep things simple. Eliminate the things that cause clutter in your life, such as unnecessary magazine subscriptions, paper and too many unused gadgets.
7. Take care of yourself. Executives who look haggard or tired tend to have more responsibilities heaped on them, because your physical condition and dress sends the message that you permit that.
8. Commit yourself to exercise at least three times a week. Keeping yourself in shape will help you perform efficiently in all areas of your life.
9. Always eat breakfast. Low blood sugar as a result of not eating properly can cause unproductive afternoons.
10. Take your vitamins. If you eat constantly on the run to save time, take vitamins to avoid potential slumps in energy.
11. Bag your lunch. Not only is this cheaper, but it is more nutritious because you have control over what you eat. This can spare you from eating empty calories that exhaust you.
12. Sit down with your family for dinner. This is the one thing that you can do each day to bond with family members. It also saves money and allows you to control your diet.
13. Make dates with your mate. Planning romantic outings keeps your relationship erotic and alive.
14. Get professional help. If you can’t cope due to bad time management skills or emotional problems, get the help that you need.
15. Ask for help if you need it. Pride prevents most executives from asking for assistance from higher ups or colleagues. Being trained wastes less time than trying to figure out something yourself.
16. Make sure you have quiet time. Set personal time aside for yourself each week doing something that you enjoy doing alone. This gives you clarity and is a form of meditation.
17. Get enough sleep. People who are sleep deprived make more time consuming mistakes and are too irritable to lead a quality life style.
18. Never get too hungry. People who are hungry are irritable and make mistakes so that things need to be done over again.
19. Avoid people who suck your time. Needy or emotionally disturbed individuals can seriously throw your plans for the day astray. Avoid them the best you can.
20. Deal with your anger. Angry individuals are hasty, reckless and make careless errors that cause time consuming mistakes.
21. If you are tired, rest. It is better to rest and do a task twice as fast afterwards, rather than do it slowly because you are exhausted.
22. Take life one day at a time. Live in the present, not in the future, and you will accomplish more.
23. Give back to the community. Engage in one meaningful activity where money is “not the goal”. This empowers you spiritually and prevents you from getting too stuck in your own problems.
24. Make yourself inaccessible at certain times. Let others know when you are working and cannot be disturbed.
25. Reward yourself for a job well done. Whenever you complete a big task, make sure to keep motivated by giving yourself a reward.
26. Seek out the good in every situation. Disappointments and delays are a part of life. Learn how to make it up to your family if you are late and can’t be there for them.
27. Realize that you always have choices. Make choices about how you spend your time, and do not be at the mercy of obligations that you cannot fulfill.
As a busy executive, staying healthy has to be at the top of your priority list. It is essential to your job as a leader. Use these tips to guide you into the healthy lifestyle you deserve.
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 firstname.lastname@example.org or visit her website at www.delorespressley.com.