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Tuesday, 12 June 2012 15:49

The case for humor

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Knock Knock! Who’s there? Iowa. Iowa who? Iowa lot of money for my marketing programs. Okay, so that might not be the funniest joke ever but it serves well for exploring humor as an effective business tool.

As people communicate more individually in areas of presentation and electronic media, many focus on creating a “professional” image, which simply means making it look like what’s expected. Sadly this often results in boring and forgettable websites, PowerPoint and videos. It doesn’t help the presenter connect emotionally nor differentiate from the other “professional” offerings.

Rarely do you hear people coming out of a business presentation saying: “That person was hysterical!” More often presenters attempt connection by tugging emotional heartstrings creating small trauma. In most film festivals, dramas outnumber, comedies by 20 to 1. Why? The great 18th century actor Edmund Kean answered us as he lay dying: “Death is easy, comedy is hard.”

Still, humor is a worthy aspiration, accomplishing tasks seldom achieved by serious approach.

  • Humor establishes rapport – Almost all people love to laugh. Non-offensive jokes can easily establish likeability and trust. A joke related to a difficult situation can disarm a prospect or client when delivering “tough medicine.”  Relationships are often built on experiences of shared humor. People do business with people they like, and if they smile and laugh every time you are near they associate you with happiness. Combined with knowledge, humor enhances expertise, demonstrating confidence and strength.
  • Humor triggers memorability – Many strive to create “AHA! moments” in customer’s minds.  This occurs when one is thinking one way and you turn their head to think another. Those are the very mechanics of a joke punch-line. In our example I suggest a Midwestern state and quickly turn it to a statement of finances. The unexpected wordplay registers in the brain as humor, which triggers endorphins that encode for memory. This is why a childhood joke exists in our repertoire decades after introduction.
  • Humor creates alignment – A joke is based upon shared experience. Humor works well when there is communal understanding of the issues at hand. By identifying a common problem and creating a punch-line around it, insiders will adopt the punch-line as a trigger representing the issue. So when no one remembers to turn off the lights when leaving, a giant light switch painted on the wall makes people laugh and remember their responsibility without embarrassment.

Exploring humor research can be beneficial to creating memorable marketing, particularly in video. But suffice it to say if you just want people to like and remember you in a consistent and productive manner, simply follow the words of the late, great Donald Oconnor and “Make ‘em laugh! Make ‘em laugh! Make ‘em laugh!

An Inc. 500 entrepreneur with a more than $1 billion sales and marketing track record, Kevin Daum is the best selling author of Video Marketing For Dummies. and ROAR! Get Heard in the Sales and Marketing Jungle. Visit him at KevinDaum.com or @awesomeroar

Monday, 30 April 2012 20:01

Marty Doerr: Special Report on Accounting

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An accountant can serve many types of roles for CEOs, from hands-off keeper of the books to proactive, fully engaged adviser. It’s up to executives to decide how heavily they want to rely on their accountants. But in general, the more interaction they have, the fewer financial surprises they’ll run into.

“I’ve been on both sides of the aisle,” says Marty Doerr, member-in-charge of the Tax Services Group of Brown Smith Wallace LLC, who earlier worked for a decade and a half as head of the tax department at May Department Stores. “I would just say, from a CEO perspective, it’s really helpful if he includes his CPA, whether it’s in-house or his adviser, as part of the team. Sometimes the CEO thinks of the taxperson as the guy who’s supposed to give him the answer after he’s given him the facts. But they need to be involved in helping create the facts.”

Sales of real estate and major asset purchases are two of the critical transaction types for which business executives should seek expert financial advice beforehand rather than afterward.

“You can’t have that input unless you’re at the table when they’re doing the transaction,” Doerr says. “That’s what I mean by being on the team. It can save a lot of hassles and probably taxes and maybe penalties, if you can weigh in before those transactions have already happened. It’s a matter of having somebody there who has their tax antenna up all the time.”

The unpredictability involving the upcoming election and how it will affect next year’s tax rates makes CEO-accountant interaction even more crucial this year.

“It’s so uncertain right now what’s going to happen with [tax] rates,” Doerr says. “Of course it’s an axiom that you don’t let the tax issue wag the dog, but most people think rates are going to go up next year. And any time we’re into that kind of a situation, particularly in an election year, it makes tax planning that much more difficult. So I would encourage management to keep the dialogue open.”

Marty Doerr, member-in-charge of the Tax Services Group of Brown Smith Wallace LLC, is responsible for overall client service and technical oversight of the tax practice, as well as training staff on best practices and new tax developments.

HOW TO REACH: Brown Smith Wallace LLC, www.bswllc.com or (314) 983-1200

Monday, 30 April 2012 20:01

Reliable counsel

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

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

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

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

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

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

Think, talk, transact

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

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

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

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

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

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

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

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

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

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

Multifaceted advice

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

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

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

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

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

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

The definition of trust

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

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

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

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

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

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

HOW TO REACH: American Institute of Certified Public Accountants, www.aicpa.org; National Society of Accountants, www.nsacct.org

Friday, 01 June 2012 10:43

The happy and effective executive

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As an executive, your overall well-being consists of your effectiveness combined with your happiness. Effectiveness means that you are able to produce desired results; happiness means that you are in a state of well-being and contentment.

Most executives spend a good amount of their time worrying about effectiveness. They set tough goals and push hard each day to achieve them in the most effective manner. They are results driven, and any thought of happiness comes only after the results are achieved.

This begs the question: Can a busy, hardworking executive be both effective and happy?

I believe the answer is yes. In fact, I am convinced that better results stem from increased happiness. With this in mind, here are some tips to consider that will increase your happiness as an executive:

Start with a happiness exercise

Take out a piece of paper right now and list all the things in life that make you happy. DO NOT censor them. List them as they come to mind. Let it free flow from your mind and heart. List as many people, places, situations, causes, activities, feelings and opportunities as you can possibly dream up.

Now, get in touch with your mind and heart and begin to narrow the list down. In the end, you want to have a list of no more than four things that make you happy.

You now have within your grasp the areas where you should focus your energy, time and resources. The items on the list are at the very core of your personal happiness.

Happiness in all areas of your life is the key that unlocks great measures of effectiveness. Once discovered, your personal happiness will have a direct effect on your business effectiveness.

Take this exercise seriously. Be open, honest and determined. You will be surprised at the results.

Stay happy through ongoing education

Never stop learning.

We must be surrounded with people who know more than we do. They must be a part of what we do with our life and business.

Successful, effective executives know that education does not have an expiration date.

When was the last time you put a teacher or coach into your business goals and plans?

What new thing have you learned lately? Are you willing to stretch your mind to consider more than you already know?

Happiness can be found in a good teacher, trainer or mentor. Look for someone who helps you develop new skill sets and fosters your growth. Allow them to push you to consider new ideas, thoughts and ways of working, acting and leading.

Eliminate stress

I know this is easier said than done, but consider the fact that stress is the #1 killer of a healthy body and mind. Stress eats away at the foundation of your happiness. It distracts you, wears on you and drags you down.

Meditation, yoga, hiking, exercise and deep breathing exercises help reduce and even eliminate stress. Each of these has been shown to reduce the risk of heart disease, diabetes and other ailments.

Do not overwhelm yourself with the thought of adding each of these to your life. Pick one that interests you and do it. Make a deliberate choice to incorporate a stress reducing activity into your daily life.

Consider this: The absence of stress brings on the presence of happiness.

Have an attitude of gratitude

Our attitude of gratitude serves to focus our minds on the things we have and the things we want, desire and need to live an even fuller, more meaningful and happier life.

In the end, gratitude is not just an attitude – it is a choice.

When we choose to be grateful and to express that gratefulness, we find our lives being shaped by its power. When that happens, we move our life to greater heights of happiness and effectiveness as an executive.

The basis of this article is that a hardworking, results-driven, empowered executive can find ways to be both effective in his or her work and experience happiness in their life. Although we see it far too often in the workplace, the two do not have to be mutually exclusive.

An executive that takes the time to think and dream about the things that truly make them happy, who is willing to stay fresh through ongoing education and who works hard to eliminate stress is an executive who has found the secret to being both happy and effective.

I wish you all the best.

DeLores Pressleymotivational 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 atinfo@delorespressley.com or visit her website at www.delorespressley.com.

If you’re like most CEOs, your day is spent rushing around from appointment to appointment, both internal and off-site, meeting people, solving problems and plotting strategy. The hours fly by, days blur into weeks, and the years start to blend together into a nonstop race against time.

Take a moment to ask yourself if this lifestyle makes any sense. What race are you hoping to win? What’s the reward when you get to the finish line, assuming you even know where the finish line is?

John Ortberg, author of “The Life You’ve Always Wanted,” says it’s important to ruthlessly eliminate the hurry from our lives. If you are in a hurry, there is little time to care about people. We need to slow down, even to the point of solitude.

While we are running our nonstop race, the people that suffer the most are those around us. Friends, family, colleagues and employees are often ignored as relationships are neglected in favor of the next big deal.

Ortberg suggests forcing yourself to slow down and put yourself in a position to wait. For instance, pick the longest line at the grocery store or take the long way to work. Doing so will help train yourself to slow down and be patient.

You are the person that sets the pace in your company, so if you slow down and make sure things are done right, others will do the same.

Working at a pace that’s too fast typically results in things being overlooked — things like employee recognition. When you don’t recognize and reward your employees, their job satisfaction can decline and they may leave. For every person who leaves, you and your staff have to dedicate more time to finding a capable replacement, resulting in an even faster pace as time is lost to recruiting and training. It can quickly become a vicious cycle.

Enjoy life by slowing your pace and being more productive, both at work and at home. Slowing down doesn’t mean you aren’t getting things done, it means you are doing things right and building relationships with people.

Not every transaction will turn a profit in business, but you can bet that almost every relationship you have with people will pay off in the long run. Isn’t it time you started investing in those relationships by taking the time to slow down and build them?

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or fkoury@sbnonline.com.

Emanuel Rosen is the author of the national bestseller “The Anatomy of Buzz” (Doubleday, 2000) and “The Anatomy of Buzz Revisited: Real-life Lessons in Word-of-Mouth Marketing” (Doubleday, 2009). Prior to writing these books, he was vice president of marketing at Niles Software where he was responsible for launching and marketing the company’s flagship product, EndNote. He holds an MBA from the University of San Francisco. In this interview, he brings us up to speed on the techniques for generating buzz that every small business owner must master.

Q: Going back to fundamentals, why do people talk about products and services at all?

A: Buzzing is in our genes. We are programmed to share information with friends about where to find our next meal and about the tiger who’s about to have us as his next meal. We talk to connect, so when my daughter tells her friends about the new sweater she bought, she’s also establishing and maintaining her social ties. We buzz to talk about ourselves. If I tell you about a 10-day dog sledding trip in Alaska, I’m also telling you how adventurous I am.

Q: Which comes first, buzz or ink?

A: Usually it starts with some buzz that is followed by press coverage, which can take the buzz to a whole new level. Grassroots support can actually help you get ink — sometimes buzz is the best press release because it gives journalists this warm and fuzzy feeling that your story is for real and that there’s true excitement for it. Don’t get me wrong, if CNN calls you before your product is out, don’t tell them that you’re waiting for some grassroots buzz to build, but usually it doesn’t happen that way.

Q: Which comes first, buzz or sales?

A: There are some highly anticipated products — Halo 3 comes to mind — that get tons of buzz before a single sale. This is the exception. Since product recommendation usually starts with product experience, you need to have some people out there who use the product and hopefully get excited about it. How do you get these early customers? Part of it comes from word-of-mouth marketing methods, like seeding and sneak previews, but it also comes from traditional sales and marketing techniques. If your product is contagious in some way, then these early users will start buzzing about it.

Q: What are the essential elements of seeding a product?

A: The key point to understand is that although we’re all connected to each other, information about new products rarely spreads like a wild fire. Information tends to get stuck because we live in somewhat isolated social clusters. To accelerate buzz, companies seed their product in many different clusters. The ideal seeding campaign is done on a large scale and lets people have a firsthand experience with the product. You want to reduce the price barrier as much as possible, so the product is given for free or at a reduced price.

Q: How do you seed a website or free service?

A: The good news is that the price barrier doesn’t exist. The bad news is that the thing you’re seeding is less tangible. The basic idea is the same. You identify clusters of people by geography, area of interest, by academic discipline or whatever other classification makes sense in your case. You then approach some people in each cluster trying to engage them with the service. This is a challenge that is shared by other products. The fact that a publisher seeds the market with advance copies of a book doesn’t guarantee that people will read it. But with some follow up and encouragement and some buzz from fellow users, some more people eventually try the product and start buzzing about it too.

Q: What are the characteristics of a contagious product?

A: The best buzz comes not from publicity stunts but rather from the product itself. A product or service that makes you say, ‘Wow!’ when you use it for the first time is the classic contagious product. Other examples: products that evoke strong emotions — “The Blair Witch Project” — or reward you for talking about them — Facebook.

Products that are visible can be contagious as well — think of the first time you saw someone with an iPod. Even abstract ideas can become contagious this way. The idea of living with cancer was translated into the LiveStrong yellow wristband, which started millions of conversations about the topic.

Q: What can stop the spread of buzz?

A: Since I just mentioned LiveStrong, let me tell you about an interesting study. A research team at Stanford sold LiveStrong wristbands to students who lived in one dorm on campus. A week later, they started selling these wristbands in a neighboring dorm that had a reputation as a ‘geek’ dorm with a stronger academic focus.

What happened once the ‘geeks’ started wearing the wristbands? A week later, the research team measured a 32 percent drop in students wearing the bands at the first dorm. So sometimes, when we detect that ‘the wrong people’ are using your product, we stop using it and buzzing about it. This is true especially for products that have to do with our identity.

The most common forces that block buzz are noise, inertia and forgetting. We’re distracted by competing messages, we like to stick to ‘the good old way’ of doing things, and we forget what our friends told us. It is one reason why buzz needs to be accelerated. Even delighted customers might forget about your product and run out of opportunities to talk about it.

Q: What should you do if someone who has never used your product is bad mouthing it?

A: One of the things that surprised me most as I was working on the new edition of my book was that this type of negative buzz is quite common. One study found that 30 percent of negative word-of-mouth was by people who never owned the product. If you can identify the person who’s bad mouthing your brand, you might want to let them try the product. The problem is that you usually don’t know who they are, which brings us to another reason for why word-of-mouth marketing is so important. You have to counterbalance this constant trickle of negative comments with honest, positive recommendations from happy customers.

Q: What should you do if someone who has used your product is bad mouthing it?

A: First, listen to what they are saying. Our natural tendency when we’re attacked is to fight back, but negative comments may come from an actual bad experience. This gives you an opportunity to do two things. Solve that customer’s problem, which will often turn her from a detractor to a promoter. Even more important, it may help you identify a problem in your system, fix it and reduce negative buzz from others.

Q: Who is more likely in these Internet days to talk about your product: someone who’s had a good experience or a bad one?

A: There are two types of bad experience. There’s ‘I didn’t like this hotel too much,’ and there’s ‘The guy at the reception insulted me when I asked for towels and then sent up a dirty one.’ Frustrated customers are very likely to share their experience. However, it turns out that most buzz among consumers is positive. This may seem like a contradiction, but it has some simple explanations. One of them is that most of our experiences as consumers are actually positive.

Q: What is the role of old-fashioned advertising these days?

A: It is fashionable to say that advertising is dead, but I don’t agree. Very few products can live on buzz alone. Advertising can help a lot — at least good advertising can help a lot. First, in creating awareness and building the pool of people who can buzz about the product. Second, a good ad can prompt me to tell my friends about the product. Third, a good, authentic ad that brings in real people can stimulate buzz.

Q: How has technology changed buzz and word-of-mouth marketing?

A: It hasn’t really changed what we talk about. We still talk about ourselves, we brag, we seek advice, we gossip, we connect. The Internet’s biggest effect is that it accelerates buzz. In addition, it doesn’t only let us tell our friends about the products we use, but also lets us show them these products through videos and photos. It has enabled aggregation tools such as Yelp or TripAdvisor. In essence, it gives more people more opportunities to share information with others, which directly translates to more buzz.

Q: How can a company effectively measure the buzz it’s generating?

A: The simplest method is to ask your customers how they heard about you. You can measure the daily mentions you get on blogs and on Twitter. You can supplement this with traditional marketing research to learn what customers who don’t use these services are saying. Whatever method you choose though, you need to measure on an ongoing basis, if you want to detect any effects. Companies such as ChatThreads, The Keller Fay Group and Nielsen Online provide buzz measuring services. WOMMA, the Word-of-Mouth Marketing Association, offers lots of resources on the subject.

Q: Do you believe that there are key influencers who companies should focus on because of their insight, power and prestige — that is, an ability to lead a market as their wisdom trickles down?

A: The importance of influencers varies by industry. I suspect that they are more important in the pharmaceutical industry than in the yo-yo industry. Regarding the ‘trickle-down’ theory — this is not the way that buzz flows — especially today, buzz flows in all directions. I use the term hubs to describe people who talk more than average, and I make a distinction between social hubs and expert hubs. Both can definitely help a company spread the word, but companies should encourage everyone to talk, not only hubs.

Q: Where do you draw the ethical line on generating buzz and word-of-mouth marketing?

A: One key idea here is disclosure. Word-of-mouth marketing is not about tricking people. It’s about openly inviting them to try the product and talk about it. WOMMA offers a code of ethics that can help. When you’re trying to build buzz, you want to push the envelope and think outside of the box. And when you look for original ideas, you can’t police your thoughts. But after the brainstorming, you have to change your attitude dramatically. This is best done the morning after — over some strong coffee. Think again about your wild new idea. Ask other people what they think. Ask your customers and people in the community if you are crossing the line.

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 10 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 kawasaki@garage.com.

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 mfeuer@max-wellness.com.

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Friday, 01 June 2012 09:58

Why do projects fail?

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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.