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St. Louis (751)

Wednesday, 25 June 2008 20:00

Aiming high

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Todd Ebert always wanted to be a winner.

As a 16-year-old growing up in Salt Lake City, he read in a newspaper a ‘Thought for the Day’ that has stuck with him since: “No one has ever won a race with the ambition of finishing second.”

That told Ebert that if he set his goals at being second-best, that’s where he would land, but if he worked toward being the best, one day he would achieve it.

Today, Ebert is president and CEO of Amerinet Inc., a $110 million national group purchasing organization for health care providers. That newspaper quote still motivates him, and he wants his company to be the best in the industry.

Aiming high is a simple concept, but Ebert constantly — and sincerely — reinforces it with his 365 employees. His monthly strategic update includes staff success stories, and employees often receive e-mails from Ebert, thanking them for a job well done.

Smart Business spoke with Ebert on how he plays to win and why it’s up to you to make the tough decisions.

Plan for success. Be positive, be passionate about what you do, and at the same time, share your success stories. I’m a big believer that optimism breeds optimism and that success breeds success.

I share this with the people from our leadership team as well as the company: If you are going to set a goal, set it to be the best. It does not have to be the biggest. It does not have to be the most profitable. But it has to be the best of what you do in your space in the industry.

All companies look at the balance sheet. There is success in profitability and in revenue, but I look at a number of things. I’m on the road quite a bit and meet with customers on a routine basis, and I always ask these questions: ‘How are we doing? Are we taking care of your needs? Are we providing you the cost-reduction solutions that you need and what we promised that we would do?’

Pay attention. Always ask the ones that matter the most — that is your customers and your employees. If you take care of your customers and your employees, that should be reflected in your balance sheet.

I ask the questions, and when I do share information with them, it is in a very safe and nonhostile environment. If people are offering you candid, honest feedback, they are opening up to you. The last thing you want is the reputation that employees tell you what you need to do, and you get upset at them. Listen, and then address the issue. Sometimes, there are issues where not much can be done, but many times, you can come up with solutions or processes that are better.

Listening is tough for some people. I’m not always right, and I’m very willing to get some input to debate the issues and then, as an organization, come up with the best solution going forward.

By listening to my employees, I make smarter decisions. I get better input and better feedback, and at the same time, there is an inclusiveness relative to how we go forward. There are a lot of benefits, not only from a morale standpoint and better decisions, but also, your employees are asked to provide some input —which is ownership — into the organization.

Become a decision-maker. I see myself as very collaborative. I rely very heavily on input from my leadership team, as they should rely heavily on their management teams, as well. But there has to be somewhere where the buck stops, and I’m willing to make a call and make a decision.

You get paid to make the hard decisions sometimes. I’ve been in situations where the discussion can go on forever and ever, and no one wants to make a decision. Get the best information you can, make sure you really understand the issues and then make the decision. It’s part of leadership; you’ve got to make the decision when the time is appropriate.

We always look at what’s most appropriate for our customers, and then the decisions are usually pretty straightforward. There are two benefits: No. 1, we’re always focused on what’s important for the customers, and No. 2, we want to make sure that we move out with strategies, solutions or customer services that are on the leading edge.

Know when to back off. If we have made a decision, the team is empowered to go get it done. You need to know when not to butt in, and unless you see something really going the wrong direction, let your employees do their thing.

They’re smart people. They have the passion about what you want to do as an organization, and they want to do what’s right. Let them do it.

Be a good role model. Honesty and ethics are very important. People need to trust you, and they need to believe in you. People respond to trust, ethics and honesty.

My dad always taught me to be very honest and ethical with those that I deal with because when you start to trust folks, you can get a lot done. Your whole organization knows what you stand for, and that’s what the organization stands for.

It is the right way to conduct yourself, not only for your personal life but for your business life. Those are the people that people respect. Although I would love to make a gazillion dollars, I would rather be known for my business ethics and integrity.

HOW TO REACH: Amerinet Inc., (800) 388-2638 or www.amerinet-gpo1.com

Wednesday, 25 June 2008 20:00

Plan a profitable exit

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Many baby boomers are now ready to taper off, slow down, travel and do all those things that have been on the back burner for the last 30 years. Often with a sense of urgency, and a self-imposed deadline (such as age 60), an executive will scrape together a fast strategy to retire. Emotion, rather than solid planning, drives the business sale. Once a transaction is complete, there’s no way to get back what was sold. An owner may feel displaced. What’s next?

“Exit planning is a long-term process, and owners should not make these decisions precipitously,” says Barry Worth, a member responsible for mergers and acquisitions at Brown Smith Wallace LLC. “They should line up their goals and objectives and seriously consider how they will spend their time once the business is sold.”

Smart Business spoke with Worth about exit strategies and how to address and prepare for life after the business.

Before you begin preparing for a sale, what lifestyle issues should be addressed?

The first questions to ask are: Have you thought about how you want to live after the business is sold? What will you do when you no longer go to the office every day? How will you maintain an income to continue living the way you prefer? If you want to travel, you may have plenty of time once the business is sold, but will you have the resources to make it happen? Start the exit planning process by outlining goals and objectives, which leads into wealth and financial planning. Most owners fall into two camps. The first group has thought seriously about the business not being a part of their lives, and they are confident that they have many interests or other business ventures to pursue. The other group isn’t so sure what life will be like without the business, and they don’t know how they will replace their incomes.

What about owners who want to exit but aren’t prepared to completely pull away?

An owner can recapitalize the business and get a second bite of the apple, so to speak, by selling a majority of the business to a buyer and maintaining a minority share, still working in the business’s daily operations. Many times, this buyer is a private equity group or other strategic investor that plans to grow the business and sell it down the road. This arrangement can be beneficial for owners who plan to exit in the near future, still want a revenue stream from their business and some involvement, but no longer want the financial burden of investing in the business. The benefit for buyers is having the former owner involved in management. Eventually, the private equity group will sell the business and both parties will move on profitably.

How do you prepare for a sale?

While this process is an entire topic in itself, analyzing and valuing a business to prepare it for the market is a critical part of an owner’s exit plan. Generally, an owner has one shot at maximizing his or her return, and it’s usually on the first go-around. Therefore, the owner and advisers must analyze the business with the goal of presenting the best package to potential buyers. This means evaluating personnel, operational efficiency and record-keeping processes. Every component of a business is raked over with a fine-tooth comb, and areas that need polishing are tended to before the business is listed for sale. An owner’s greatest asset is his or her business. When exiting, every weakness will subtract from the owner’s take-away value.

What about ‘Plan B?’

An important part of exit planning is addressing contingency planning. What happens if the owner’s post-exit financial plan is built around a certain number that the best buyer simply will not pay? There must be a ‘backup’ number — a second best. While a business valuation is a key indicator, the market puts a value on businesses and it may not match a formal valuation.

Who is involved in exit planning?

Exit planning is truly a team effort, and it generally involves an accountant, attorney and often a trusted business confidante and investment banker. After the owner identifies goals and objectives, responsibilities are divided among team members. The process is no different than a sports game. Each player’s individual strength and contribution leads to a team win. In an exit plan, each adviser plays a key role in carrying out the strategy and, eventually, obtaining the goals and objectives of the owner. That said, someone besides the owner should play quarterback and direct the exit planning process. If a third party is keeping score, the owner is more likely to stay on track. Otherwise, forward-looking plans are easily shifted to the back burner as the owner puts out daily fires.

How does the economy affect the acquisitions market for owners looking to sell?

In today’s economy, the credit crunch certainly introduces challenges in completing smaller deals, but there is a strong market for solid companies that are well organized. Acquisitions are, frankly, the quickest way to improve market share. Owners who carefully prepare their businesses for sale, and understand what they must get out of the transaction to live the lifestyle they choose, may discover there are plenty of buyers ready to make a move.

BARRY WORTH is a member responsible for mergers and acquisitions at Brown Smith Wallace LLC. Reach him at (314) 983-1202 or bworth@bswllc.com.

Monday, 26 May 2008 20:00

Brokering a deal

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Thinking of renewing your lease? Then think again before calling your landlord, and contemplate retaining a broker instead, advises Dave Kelpe, CCIM, SIOR, vice president, and Art Kerckhoff, second vice president, both of Colliers Turley Martin Tucker.

“Oftentimes, tenants will renew without representation because they think it is easier and less time-consuming to do it on their own and, in doing so, may not consider the financial implications this strategy can cause,” says Kelpe. “A broker brings a lot of market knowledge, expertise and time savings, which translates into a more advantageous lease.”

A broker also acts as an intermediary, allowing the tenant-landlord relationship to remain intact.

The downside of serving as your own negotiator can include paying above market base rent, being exposed to operating expense increases that may exceed those of your counterparts in the building and limiting your company’s potential growth by not having the appropriate options to grow or downsize.

Smart Business spoke to Kelpe and Kerckhoff about how to best approach lease renewals.

What are clients surprised to learn about the lease renewal process?

The time it takes. To create the leverage and effectively negotiate a renewal, the typical office tenant needs 12 to 18 months; larger tenants should begin much further out. Begin the process far enough in advance so that you know the market and your landlord knows that there is sufficient time to evaluate alternative options. If you’re trying to work out a renewal two months before your lease expires, you are likely to receive less desirable terms because the landlord knows this is not adequate time to relocate.

What advice would you give a client who is considering renewing?

Our recommendation is that tenants should not initially have direct contact with their landlord. Tenants do not want to give the landlord the impression that they are staying and will not consider any other options. Even if tenants have no desire to move, leverage is created by convincing landlords that they may vacate the property. Typically, it is significantly more expensive for a landlord to replace a tenant than to retain a tenant, in addition to the lost rent.

What areas need to be addressed to serve a client’s best interests?

The answer will vary depending on the tenant and its specific needs but may involve growth options, renewal options, assignment and subletting, the operating expense exclusions, etc. You should know what to look for and read each section of the lease in detail; for example, a ‘renewal option’ written into a lease may not truly be a beneficial option at all.

What preparation should tenants do?

Review their existing leases. The renewal/relocation process is an opportune time to modify and correct items in the original lease document. These can include the rent structure, what is included in operating expenses, holdover provisions, etc. They can even include items often overlooked, such as parking provisions, etc. Be forward-thinking, that is, consider your growth needs for the year, three years and 10 years out.

Also, know the market — for example, what the rates are in nearby buildings and the competitive transactions that have recently occurred. Landlords are well educated in these matters, so if you’re not properly informed you are already at a disadvantage.

For example, the market rent for a particular building may be $22 per square foot but has an ‘asking’ rent of $26 per square foot. Tenants may think they are getting a good deal at $24 per square foot because it is well below the building’s ‘asking’ rate or may be lower than the rent they are currently paying. They do not have the market knowledge to realize that, even though they are paying below the asking rate for the building, they are still paying well above the market rent. Having that knowledge is critical in lease negotiations.

What should you look for in a broker?

Seek a specialist active in the submarket you’re in and a firm with the tools and resources to enable you to successfully renew your lease. That includes competitive transactions in the marketplace, research and experience, and someone who is experienced in similar transactions in your submarket.

DAVE KELPE, CCIM, SIOR, vice president, and ART KERCKHOFF, second vice president, are both of Colliers Turley Martin Tucker. Reach Kelpe at (314) 746-0337 or dkelpe@ctmt.com. Reach Kerckhoff at (314) 746-0393 or akerckhoff@ctmt.com.

 

 

Monday, 26 May 2008 20:00

Selling the big picture

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It is a tradition at just about every company. The new guy comes in on his first day and gets paraded around the office to meet all of his new co-workers. Perhaps he will remember a few names and faces, but, more than likely, they will slip into the blurriness that is the first day on a new job for most people.

But if you can provide opportunities beyond the first day for an employee to get to know his or her colleagues, your new person will stand a much better chance of fitting into the culture, says Peter Van Cleve.

Van Cleve, managing partner for the St. Louis office of Bryan Cave LLP, a $411 million law firm, says the opportunities start at his organization with first-year lawyers having a chance to go to lunch with any other lawyer in the firm on the company’s tab.

“There is a lot of informal learning that takes place,” Van Cleve says. “Not only are they meeting people, but they are learning about the organization through those people. It really pays dividends in terms of getting to know other people and being able to have the availability and the access to ask questions they did not learn going in.”

Van Cleve himself has played a prominent role in welcoming new employees by serving as a mentor to newcomers. He says that he probably gets more out of the interaction with rookies than they do.

“I get a perspective from them about their view of things that is very hard for me to get otherwise,” Van Cleve says. “When you develop a close relationship with somebody, just like I am telling them things that I perceive, it’s a two-way street. I am learning brand-new things about the way some of our programs or policies are perceived by people. It is very much a two-way learning process.”

Being an effective leader means gathering a group of individuals and maximizing each person’s value by building all of them into a cohesive team that can move your organization forward to serve its clients.

Van Cleve likens his role to that of former New York Yankees manager Joe Torre or Phil Jackson in his first tour of duty as head coach with the Los Angeles Lakers.

“It’s very debatable how much he was responsible for versus the superstars,” Van Cleve says. “It’s really about getting the superstars to play well together and maximize their potential.”

Bryan Cave has succeeded by being able to find people that thrive in a culture where they are part of the big-picture goals of the organization. Van Cleve says the key is recognizing your place as the leader in your company.

“You start off with an understanding that it’s about them and it’s not about you as a leader,” Van Cleve says.

Look past the resume

The first step in building a winning culture is to hire people that fit into it.

Van Cleve says academics are important when considering a prospective new employee, but statistics should not be the sole determining factor when deciding whether or not to hire a particular person.

“It’s not a formula where you say, ‘This person is in the top 5 percent of their class, and they had a good academic record otherwise, and we check all the boxes, and we’re going to hire them,” Van Cleve says.

“It’s about whether we think they can fit into our organization. Lawyers are smart folks, and they are independent, but we work a lot in teams here. It’s about attracting people and evaluating people who we think will work well in teams. They understand it’s not about them. They can buy in to an overall vision that our group arrives at, and they are willing to sacrifice at the appropriate time for the team goal.”

You need to take the time to get to know the person behind the resume and evaluate their personality and how it might fit with your organization.

“Ask them for examples or experiences in their lives where they have worked in teams and if it has worked out for them,” Van Cleve says. “You can learn a lot about a person by examining their past experience and asking for specific examples.”

One of the ways to see different sides of a job candidate is to have the person interview with multiple people in a variety of settings.

“There are the people who really like to challenge the interviewee,” Van Cleve says. “There are people who are like, ‘Tell me the biggest challenge of your life and how you overcame it.’ And there are people who do interviews that are very laid back and you’d hardly know they were interviewing them. One of the keys ... is to try to delve into that person’s life and ask them for examples that I think are going to work well at Bryan Cave.”

Get together a variety of people from your company to handle employment interviews. The varying styles will help you get a broader picture of what the person is all about and how they might fit in at your company.

“We have a whole variety of people on our recruiting committee doing those interviews who are everywhere from first-year lawyers to our senior partners,” Van Cleve says. “They all have a different view and understanding of our culture and are measuring that person as to how good a fit they will be.”

Share your vision

Once you get people in the door, they probably have at least a surface-level idea of what your organization is all about. But you need to reinforce that message again and again to make sure they are clear about it.

“One of the best thinkers and writers about law firm management is this guy named David Maister,” Van Cleve says. “He is a former Harvard Business School professor, and he is a consultant. He answers the question, ‘How do you influence people?’ His view is that you can only influence people by convincing them that whatever you want them to do is in their own best interest.”

Van Cleve says this is best done on a one-on-one basis. “It’s individual contact,” he says. “It’s not mass e-mail communication. It’s not speeches. It’s not inspiration from on high. You need to listen to where they are coming from. Understand where they are coming from. Communicate to them what you think the overall vision is or how the overall vision relates to the particular issue you are talking about.”

In addition to the one-on-meetings, get out of your office and talk to your people. While there are some people who need to schedule a visit because of their own workload, others prefer impromptu visits and casual chats by the watercooler.

“You have got to be able to listen,” Van Cleve says. “Have a firm understanding of what your culture is and be able to reinforce that. When you have issues, you need to be both positive and creative about having to deal with those things. Integrity is an important part of leadership traits. I believe that part of my job is to see and recognize the best in our people and be an advocate for them, both internally and externally.

“This is not a top-down organization. This isn’t the sort of thing where the managing partner in St. Louis or the chairman of our firm says, ‘This is my vision and I deliver it to you.’ It’s much more understanding our culture and arriving at a common goal with our partners in terms of where we want to be as a firm.”

By talking to people about organizational issues and getting them involved with the bigger picture, you stand a much greater chance of earning their support of the company’s vision.

“None of these concepts are developed in a closed room and delivered to people,” Van Cleve says. “It’s about getting people’s buy-in. How you get that buy-in is by involving them in discussions that lead to the vision and lead to the view of what the team is going to do.”

Promote the team concept

One of the best ways to ensure success at your company is to remember that both you and your employees have lives outside the workplace.

“It’s crucial,” Van Cleve says. “If all of your life is coming in and figuring out how many billable hours you have, that’s not very satisfying over the long term. In any successful organization, you need a strong mix of what you do professionally and being able to relate to people on a very personal basis.”

When your company does something great, make sure you allow time to celebrate the victory. It could be through a formal gathering or just a simple e-mail blast to all your employees.

This environment where work is the most important part of what you do but not the only thing you do can be reinforced again by getting your organization involved in the community.

In supporting these types of activities, you are actually fortifying the foundation of your team.

“Any organization, once you get beyond 25 people or maybe 50 people, you can’t know everybody very well,” Van Cleve says. “What happens is in those larger organizations, smaller interpersonal relationships are developing. As a young associate coming in here, maybe you are coming in with 18 other lawyers who are starting that year. That’s one group for you.”

When you get to know these people and bond with these people, you feel better about yourself and the organization. And when you feel better about those things, your chances of doing well at the company are a lot better.

The firm’s mentoring program is one of the best examples of this idea.

“All of our associates have the opportunity to have a formal mentor and to see that mentor on a regular basis,” Van Cleve says. “The mentors are encouraged to meet with them and share intergenerational perspectives. As organizations get bigger, they need to do that.”

Van Cleve says Bryan Cave has succeeded because of its strong focus on relationships throughout every aspect of the firm’s operation.

“Initially, you’ll have a contact, and you’ll have a relationship,” Van Cleve says. “We have found that by making sure they know what else we can offer and getting more lawyers involved at every level with that client, we build relationships throughout that organization. We have found it works both for us and the client exceptionally well.”

HOW TO REACH: Bryan Cave LLP, (314) 259-2000 or www.bryancave.com

St. Charles County has historically been in the shadows of St. Louis County, but it’s blossomed into a booming entity, as a result of ranking in the top 2 percent in growth among all U.S. counties during much of the last decade. Several factors created this growth, including strong, pro-business communities, abundant educational opportunities, availability of high-quality jobs, a well-qualified work force, reasonable land prices and infrastructure improvements that have kept pace with growth.

For those businesses seeking office or industrial space, a St. Charles address can provide a significant property tax break — up to 30 percent compared to St. Louis County. And, two of Colliers Turley Martin Tucker’s vice presidents — Mike Statter, CCIM, who specializes in St. Charles’ industrial market, and Keith Schneider, CCIM, SIOR, who specializes in St. Charles’ office market — expect the market to continue its strong growth.

“If you consider that the population of St. Charles county is expected to be 450,000 by 2020 — roughly half the population of St. Louis County today — businesses will be missing out on the opportunity to benefit from an excellent work force and establish a presence in a county that stands on its own,” Statter says. “If you want to take advantage, now is the time.”

Smart Business spoke with Statter and Schneider about St. Charles County and why it’s such a hot commodity in today’s market.

What’s behind the county’s growth, and how long will it continue?

It started as residential growth, with the county’s population growing 853 percent between 1950 and 2000. This strong residential growth fostered commercial growth, which created a strong tax base, which funded the infrastructure. The enhanced infrastructure has facilitated continued residential and commercial growth. This self-perpetuating cycle is expected to continue well into the future.

Have prices risen?

The trend for prices in just about every product type has increased steadily. We haven’t seen the significant peaks and valleys that occur elsewhere. We are seeing some flat-lining in land right now, but as far as industrial and office products, there’s still steady, moderate increases.

What is the market like for office space?

All the growth factors mentioned, and most importantly the skilled labor pool, have fueled rapid, phenomenal office development. Large office campus users, such as CitiMortgage and MasterCard, moved their corporate offices to St. Charles County to be closer to where the bulk of their employees lived and capitalized on the abundant work force and reasonable land prices. These two users alone account for more than 1 million square feet of office space constructed since 2002. Successes such as these created credibility for St. Charles County as a player in the metro office market. In fact, since 2000, St. Charles County absorbed more office space than all of St. Louis City and County combined. We predict that in 2008, we’ll see a significant amount of new speculative office construction. However, as demand and growth continue, there’s going to be less land to develop, so rents — which are generally lower than comparable areas in St. Louis — may increase.

What is the market like for industrial space?

The St. Charles industrial market finished 2007 with a very healthy vacancy rate of 3.2 percent, which we believe provides some targeted opportunities for developers. Our industrial inventory is only about 25 million square feet, which represents about 10 percent of the overall inventory of the metropolitan area. About 8 million square feet of product has been built here in the last decade, which accounts for about 25 percent of new product delivered in the metro area during the same timeframe. Regarding industrial land, there is at present a definitive lack of large tracts available for development — leaving prospective users with 5 to 10 acre parcels that are available in disparate pockets around the county.

What about property taxes and values?

Compared to St. Louis County, property taxes are lower in much of St. Charles County. For example, the Highway 370 area, which is primarily an industrial corridor connecting into St. Louis County, can have a 30 percent differential in property taxes compared to the nearest industrial parks in nearby St. Louis County. Meanwhile, rents and asking prices tend to be higher along the I-64 corridor coming out of Chesterfield Valley versus the I-70 corridor.

Land is overall somewhat less expensive than St. Louis County, and land values are similar to building values — less expensive along I-70 corridor versus I-64 corridor. There’s a relatively young age demographic, a relatively high-income demographic and high degrees of education, so the St. Charles market is wealthy, young and smart.

MIKE STATTER, CCIM, and KEITH SCHNEIDER, CCIM, SIOR, are both vice presidents of Colliers Turley Martin Tucker. Reach them at (636) 949-9797 or mstatter@ctmt.com or kschneider@ctmt.com, respectively.

Friday, 25 April 2008 20:00

Investing in people

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There was a time when Rodger Riney interviewed each and

every person that came to work at Scottrade Inc.

“I had the privilege of being in on the hiring of probably the

first 500 or 1,000 people that we brought through here,” says

Riney, the company’s founder, president and CEO. “I could be

very careful and use my intuition as to whether I felt someone would fit in our culture.”

One of his most important qualifiers is the type of ego that

a job candidate brings to the table.

“There have been people that I interviewed where I just got

this feeling that they felt somewhat superior or had maybe a

little bit too much ego to fit in,” Riney says. “We succeeded in

the early years maybe on who we failed to hire as much as

who we did hire.”

These days, with nearly 2,000 employees and 2007 revenue at

$1.03 billion, Riney no longer interviews everyone who comes

to work at Scottrade. But his culture of teamwork and family

remains a key component of the online stock brokerage firm.

Your ability to convey the importance of a consistent and

healthy culture and identifying people who fit that culture is a

key factor in achieving lasting success. Riney still has a large

role in defining the culture to every one of Scottrade’s new

employees. At least once a month, he meets with a new batch

of employees in a session that allows both parties the chance

to get to know each other on a personal level.

“We have each new associate tell a little bit about themselves

so that everybody can get a feel for the type of people that

we’ve hired, their previous experience and the job they do now

for us,” Riney says.

He returns the favor by talking about his own background

and the early days of Scottrade.

“We really try to set the cultural tone early in their employment,” Riney says. “After you get the person in the door, we

have not just ‘meet the president,’ but we also have (an orientation program) that gives the associate a nice first few days

with the firm. We tell them a lot and go over a lot of stuff about

how the firm works and try to give them a good insight as to

what Scottrade is all about.”

By focusing on bringing everyone together and promoting a

sense of teamwork, Scottrade was rewarded with being

named to the Fortune 100 Best Companies to Work For List

for the first time.

Bring everyone together

One of the biggest challenges to maintaining a consistent and

healthy culture during a time of constant growth is the distance that often exists between the home office and other locations in the company.

“When you have 200 or 300 offices around the country in 47

states, it’s a real problem to keep quality evenly distributed,”

Riney says.

An intranet site where company news and new procedures

and policies are posted can be an effective starting point to

helping everyone feel like he or she is part of the same company and are working toward a common goal.

“Our intranet is a major conduit of information that we use to

keep people up to date on what the firm is doing and how we

think,” Riney says. “I think that helps in distributing the culture

over a period of time. We have daily input that gives us an ability to let people know some things they might otherwise not.”

Intranet technology can be a great way to offer your employees continuing education opportunities. The advantage of

doing the courses online is that everyone has the same opportunity, regardless of their location.

“We decided to either purchase or develop our own classes

that we can host on the intranet, and our employees can take

those classes either in our branch offices or they can log on

from home,” Riney says. “We encourage them to take as many

classes as they have an interest in or feel would further their

personal career or their Scottrade employment.

“It’s over 200 classes. While there will be classes we feel people in certain job categories should study and take, for the

most part, it’s voluntary. They pick and choose what they think

would be of value to themselves at the firm.”

It’s important to track which employees are taking what

courses in order to gauge the knowledge that your people are

getting through the training courses and what they still need to

learn.

However you choose to do it, whether it’s continuing education or just regular correspondence, it is critical that you keep

employees throughout your company current with what’s

going on in the organization.

“We have a quarterly newsletter for employees where we try

to make everybody aware of new employees and new things

we are doing,” Riney says.

You should also have regular training sessions at the home office

and bring managers in from the satellite offices and have a face-to-face meeting to go over any major changes in company procedure

that have been made. They can then take back that information to

their employees and pass it on in a face-to-face manner.

“Our brokers in the branches are brought in periodically to

do the same thing,” Riney says.

One tool that Riney does not have a lot of faith in for promoting a team-based culture is a suggestion box in which

employees anonymously drop in their thoughts on the company.

“Most people here, if they have an idea, if they have something that is going to make us a better and stronger firm or

result in higher associate satisfaction or better customer service, they’ll tell somebody,” Riney says. “They’ll be happy to go

to someone and give them their ideas and feelings. It seems to

work better for us that way.”

Promote a sense of team

When people think of culture, they most often think of the

atmosphere or environment at the office or the way that

employees interact with each other.

But Riney is a firm believer that culture has an impact on

employee interactions across the board.

“One of the main glues that holds the culture together in the

firm is the emphasis that we put on our customer service and

our customer satisfaction,” Riney says. “If you hire people that

can embrace that culture of customer service, you’ll find that

not only do they practice that with your individual customers,

but that same care and feeling of giving great service and great

satisfaction extends to their fellow workers, as well.”

And that’s where making sure people with big egos aren’t

hired in the first place can really help your cause.

“When I interview people, I look for their ego, and if there

is too much ego, I tend to run for the door,” he says. “I think

a modest ego is important to me in the people that we hire,

and it’s always been important. By screening out the huge

egos, I think I’ve saved myself a lot of heartache and perhaps made the company successful.”

If the job candidate does have an oversized ego, it’s unlikely you’ll be able to change the person at your company.

“They either have it or they don’t,” Riney says, referring to

team-focused employees. “The value proposition, the caring

and professional pride, is either built in or it’s not. If it’s not, I

don’t think we’re going to be able to be very successful in stimulating it or creating it.”

For those that do have it, constant interaction is a key to reinforcing your culture on a constant basis. At Scottrade, Riney

promotes continuous communication between his company

and its clients.

“We do things all day through our branch network where we

call customers, and we advise them of things that are happening or reorganizations that are taking place with securities in

their account,” Riney says. “We’re being proactive advising

them when events are occurring with their account. We’ll try to

make sure the customer has a great experience with us.”

While this is obviously good for client relationships, it also

pushes the culture just a little bit further into the mindset of

the employee.

“It’s not just for the end customer,” Riney says. “It’s how you

treat and interact with your fellow employees. That’s why it’s

extremely important that we continue to hire individuals that

can embrace a true customer service emphasis.”

Riney says a human resources department can play an important role in finding and keeping the right people for your culture.

“It’s an integral part of decisions and communications with

our associates,” Riney says. “It’s embedded in every area of the

firm. It’s not just a department off in the corner that you go to

deal with problem employees or ask a technical question about

health benefits. It’s a department that cares very much about

all the employees here.”

Riney handled HR duties for the first seven or eight years of

Scottrade before turning it over to Jane Wulf, his chief administrative officer.

The philosophy remains the same under both leaders: Treat

employees individually and do not look at them as a whole.

“You’ve got to treat them like family,” Riney says. “We will go

way out of the way to be sure we treat associates in a fair and

respectful way. They take great care to try to hire good people

that will fit in and to make sure we are paying our people competitively. Sharing the wealth is an important aspect of having

a healthy company culture.”

If the success is to continue and the culture is to be maintained, Riney knows he will need to continue to work at it.

“If a CEO is smart, they will try to continue to obsess with the

details and make sure that the company doesn’t start cutting

corners and try to take the easy way out — trying to deliver

less value for more money [and] less satisfaction for more

profit,” Riney says. “If you are on top of that and you make sure

honesty and integrity are a priority and the customer-comes-first ideal continues to resonate, I think the culture probably

takes care of itself.”

HOW TO REACH: Scottrade Inc., (800) 619-7283 or www.scottrade.com

Wednesday, 26 March 2008 20:00

Eat right, work tight

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Corporate wellness programs emphasize all the things we know we should be doing — eating right, exercising and not smoking. But why, specifically, is it in the employer’s best interest to promote smart eating habits among its employees?

“Productivity, absenteeism, morale, retention, recruiting — all of these things can be linked back to corporate wellness,” says Cheryl A. Houston, Ph.D., RD, LD, associate professor and director of the dietetics program as well as the chairperson of the department of human environmental sciences at Fontbonne University.

“There have been many general studies on the benefits of wellness programs over the last five to 10 years,” Houston says. “One of the key findings is the improvement on absenteeism rates. Companies with organized wellness programs — i.e. weekly supervised exercise — have reported a reduction of 4.8 days of sick time per employee per year. Additionally, one company realized a 68 percent improvement in days lost to disability following the implementation of a rehabilitation program for post-coronary patients.”

Smart Business asked Houston how food fits into the overall wellness picture.

What factors tend to set off poor eating habits among employees?

Stress is probably the No. 1 factor. Today’s workers have a great deal of stress, not only on the job but at home, as well. Many employees are caring for both children and aging parents. The insanity of our schedules makes it difficult to be 100 percent ‘present’ while we are at work. Technology has also created stress. Everyone expects access to you 24-7. Work never really ‘ends’ — or at least our minds are on work well into the night. This is emotionally and physically draining. As a result, people are irritable, getting headaches, suffering from mental confusion and impaired decision-making ability. All of these factors will have many long-term consequences on a person’s health. Good nutrition helps buffer these negative effects.

What can a company do to reduce stress?

Examine your own corporate culture. Do you tell everyone to take a lunch break, but then your managers don’t? Do you give the impression that your top people ‘are at it’ 24-7-365? If so, then you’re not modeling healthy behavior. Another thing you can do is ask your employees how you can help them. For example, maybe you’ve been thinking of offering a smoking cessation program — but only 10 percent of your workers smoke. On the other hand, 80 percent are overweight and would really like resources to help them lose weight. Identify the interest and the risk to tailor your programs appropriately.

How can companies create a healthier environment overall?

Studies show that there are a number of things you can do. Some suggestions are:

  • Offer some type of health education to increase employees’ awareness of health and wellness.

  • Provide a supportive social and physical environment. In his book ‘Mindless Eating: Why We Eat More Than We Think,’ Brian Wansink, Ph.D., explains how dramatically our environment influences what we eat, how much we eat and how quickly we eat.

  • Provide healthy options. Make sure you have wholesome food on hand at meetings and in the cafeteria, where it should taste good and be priced reasonably.

  • Integrate health into the corporate culture as an element to be valued. Link wellness to employee assistance programs. For example, if someone is dealing with divorce-related stress, help him or her maintain healthy eating habits during the process.

  • Conduct health risk appraisals, which give you tangible information to work with so you can provide the right types of targeted information focused to your employees.

What can an employer do for a person with special nutrition-related needs?

Let’s consider a person living with diabetes. A fluctuating schedule totally disrupts someone who is trying to manage a chronic condition. These employees need some degree of autonomy — the ability to start and stop work on their own — so they can check their blood sugar level when they need to, etc. And they should have a clean, private place to attend to their health needs — not be expected to do so in the company bathroom. The same goes for nursing mothers. Why would they want to risk contaminating their baby’s milk in a public restroom?

How should these efforts be driven through the organization?

Human resources is often thought of first, and that’s a good place to start. But it’s important to know that a wellness program does not have to be expensive; there are many free or low-cost programs available in the community. Universities are always looking for partnership opportunities where students can be brought in to speak, conduct brown-bag luncheons, do screenings, etc., all under supervision while they learn. Students in programs, such as dietetics, occupational and physical therapy, nursing and other related areas, all need these types of real-life experiences. You can also go to Web sites for organizations such as the American Dietetics Association and the American Heart Association, which will help you identify free programs and speakers.

CHERYL A. HOUSTON, Ph.D., RD, LD, is associate professor and director of the dietetics program as well as the chairperson of the

Wednesday, 26 March 2008 20:00

A sunny future

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Todd Beckman gets up early. He says the drive to be successful propels him out of bed at 5:30 a.m., to the gym for a good workout and straight through a 10-hour workday at The Tan Co., the tanning franchise company that he founded.

That drive gives the president and CEO the energy he needs to keep his company on the edge of change and also serves as inspiration for his employees, who have helped him grow The Tan Co. to 72 stores in 13 states and $30 million in 2007 revenue.

Smart Business spoke with Beckman about how to earn the respect of your employees and why CEOs should always have their phones on.

Q. What advice would you give to other CEOs?

Build respect with your employees and the leadership to where they want to look up to you and to the point where they want your job. Show your appreciation to them.

You need to show them that you’ll do the work, too. Show them that you’re not worried about telling somebody to do the job that you won’t do. That’s what’s got me to the level that I am at with the respect of our employees.

That friendship and that love between the CEO and their employees just has to be there. They just have to like you.

Q. What are pitfalls that a CEO should try to avoid?

A big one is just taking their eyes off of the game. Leaders can’t be thinking that everyone else is going to do it for them. They need to stay on it every day themselves and make sure they’re in control and have a great team underneath them.

You should be involved every day. I’m on it every day, seven days a week. I’m never more than one phone call away.

From every franchisee to every manager, they all have my number. That’s just always been my motto. I’m always going to be there.

Q. How do you attract quality employees?

We start from the ground up with most of our employees. We look at them from young kids to growing into management.

When we train them from the very beginning when they first get a job, they end up being the most successful employees we have.

They live it, and they learn it the way we want them to learn it, and they love it the way we love it.

It makes them so motivated to love that brand. That’s what makes them strive to be a winner.

We really work hard in developing winners — all the way to where we hope they can own their own franchise store.

Q. How do you train employees?

I try to lead them with the way I would want the business run. There’s a lot of motivation, a lot of training. Understanding what they’re doing is important — living the job, loving the job. Expressing that throughout the whole team; that’s pretty much what I focus on.

If they’re not liking what they’re doing, then we’ve got to find somebody else.

Q. What are some other ways you motivate employees?

We have a complete commission structure and bonuses for them to receive. We have your normal 401(k) as well as a car program. We will logo their car and pay them to be advertising on their car.

That’s a really big incentive. They really love it, especially the younger kids. It helps them buy a new car.

We put $5,000 toward their franchise fee after they’ve been with us for one year. We’re always driving to keep them happy.

Q. What has been the greatest challenge you have faced in business?

The greatest challenge for us is just getting to the customers, getting to the possible franchisees and letting them know what a great plan we have. Just getting the leads to show people how successful this brand and program is to get them involved.

Q. How do you communicate your vision to your employees?

We have a newsletter that goes out every Friday, which keeps franchisees updated on every single thing that’s going on from a week-to-week basis. We have a VP of operations who can handle any e-mails back or phone calls back from all franchisees.

Everyone has my telephone number, too. So if they see an issue or see something that is not getting done, they can call me.

HOW TO REACH: The Tan Co., (636) 305-8222 or www.thetanco.com

Sunday, 24 February 2008 19:00

Cohesion through communication

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You will never find success with a house divided, says Bill Taylor, chairman and CEO of Taylor-Morley Inc.

Approximately seven years ago, the home builder’s work force was ruled by cliques: salespeople in the field, management in the Chesterfield corporate office, carpenters on the worksite and so on. Each was separated by sputtering channels of communication and the festering antagonism of exclusion.

Faced with such division, Taylor brought his employees together the only way he knew how — by sharing any and all information that he could. Promoting an open-book policy on financials and strategic goals not only fosters a sense of inclusion, he says, it also instills trust and ownership among staff members. Today, Taylor-Morley’s employees work as an aligned unit, boosting the company’s 2006 revenue to approximately $80 million.

Smart Business spoke with Taylor about how to facilitate cohesion at your company through communication with your employees.

Don’t be afraid to let employees read the books. We have brown-bag seminars where we invite all of our company team members to a breakfast where we talk about current events and the vision of the company. The leaders of the company will discuss pertinent issues that have to do with where we are financially, meeting our goals, our budgets and also talk about current events in the industry.

We have an open-book policy where people know where we are as it relates to our goals in terms of revenue and profitability and on and on and on. That goes a long, long way to instill confidence and trust amongst your team.

The benefits are people are going to learn. Where you’re able to communicate with people, they’re not just wedged in their four-walled office or their little cubicle. They’re learning; they’re growing.

Share information with everyone.

At one time, we didn’t have that open-book policy. Six or seven years ago, we felt that there were too many little cliques going on.

We felt that the only way to really break down those barriers was to make sure that we communicated to everybody any and all information.

We have our salespeople in those brown bags, we have our field people, we have our carpenters, we have our office people, we have our customer service people, our financial people; everybody participates.

It has really, really helped tremendously just by virtue of how people are willing to help one another. We don’t have the kinds of cliques that we had at one time from one department to another. It really breaks down that barrier.

You’ve got the best shot at dealing with outside conditions when you’ve got people all pulling together and understand what the goals and objectives are, and that they know that they can count on their fellow team members to be there to help and assist toward reaching those goals.

Make yourself accessible. There is not a substitute for timely and proper communication.

People know that I have an open-door policy. I’m constantly around and engaging people and wanting to get feedback. ...

By having an open-door policy and always being accessible, that gives the individual person the mindset that you’re just not talking all the time, you’re listening, and you’re available to them.

Maintain an air of sincerity. You can say whatever you want, but if people feel that you’re condescending, they’re not going to be able to trust you.

That’s the most important thing. They have to know beyond a shadow of a doubt that when you say something to them, you’re sincere, and that they can trust that the feedback and communication that you have is important and it means something.

You’re not able to build that kind of a culture overnight. It takes time.

I’ve built my career around, ‘My word is my bond.’ People can, without a doubt, trust me. When I say something, I’m going to do something. ...

It’s pretty simple stuff, but leaders’ egos get in the way a lot of times. The most successful leaders are those that don’t have the large egos and care more about the individual and the company. If they genuinely care about their success, then along with that will come the success of the company.

Let employees know where they stand.

People want feedback. People want to know how they’re doing against their goals and objectives.

Everybody in the company is reviewed every 90 days, and they have an opportunity to have their direct report go over what their goals and objectives are in terms of their particular job and get feedback. That’s extremely important to raise the vitality of our people.

It’s really all about communication. ...

That’s helped to grow our company in terms of the quality of people.

The quarterly review process is a fabulous tool and one that gets very, very high marks from our team members.

Previous to that, people would wander around saying, ‘I don’t know whether I’m doing the right job,’ or, ‘I don’t know what so-and-so thinks.’ This leaves no doubts in the manager and the staff position of where they stand.

Associate Editor Patrick Mayock contributed to this story.

 

HOW TO REACH: Taylor-Morley Inc., (888) 297-3155 or www.taylormorley.com

Sunday, 24 February 2008 19:00

Corporate relocation

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It’s been said that moving a home is one of life’s most stressful experiences, but what about moving an entire corporation? “For many companies, their real estate obligation is one of their largest annual obligations,” says James W. Mosby, principal, senior vice president, Colliers Turley Martin Tucker. “These transactions are often multimillion-dollar obligations, and they should receive the highest priority and resources possible.”

Thorough planning is key to a smooth relocation, and it’s never too early to start the process. A carefully prepared strategy executed by a qualified team, including brokers, attorneys and architects, prior to embarking on property tours, will greatly ensure the likelihood of a successful corporate relocation.

Smart Business spoke with Mosby about ways to find the best space for your business, while getting the most for your money.

What are the phases of a good strategy?

A process we’ve executed with success on multiple occasions is divided into five phases, some of which may overlap or take longer than other phases. Phase I consists of defining your objectives and priorities. What are the desired space requirements, growth projections, financial goals, location requirements and project timeline? Keep both short-term and long-term needs in mind.

Ninety percent of problems occur because clients want to skip this all-important step and move directly to Phase II — market survey and property tours. In the first phase, market conditions and available properties are reviewed, with consideration given to existing spaces, build-to-suit, new construction and sublet opportunities.

During property tours, a range of qualities to assess functionality are considered, including location, building and area services, parking, floor plan efficiency, expansion capability, ownership stability and quality of building management services. Preliminary cost estimates are also prepared to begin narrowing down the possible options.

In Phase III, Request for Proposal (RFP) forms are submitted to selected properties in order to evaluate all occupancy variables, including tenant and landlord responsibilities, economic obligations, renewal and expansion options. Larger tenants or tenants that are adding a significant amount of new jobs to an area need to allow extra time to procure incentives. Additional financial considerations such as tenant improvement allowances, operating expense base years and moving allowances are evaluated and negotiated during this phase. A comprehensive financial analysis that encompasses both qualitative and quantitative elements is prepared for the selected properties, resulting in projected occupancy costs for each alternative.

Phase IV begins with space planning and design. An architect prepares preliminary plans for the most desired properties; these are submitted to landlords to allow them to prepare preliminary construction budgets. Negotiations continue resulting in a detailed letter of intent (LOI) defining the terms and conditions whereby a lease can be drafted.

Phase V consists of construction management so that the space is on time and within budget. The bid process is administered, a contractor is selected, permits are obtained and a construction schedule is finalized.

What role does timing play?

The goal of the entire process is designed to create leverage for the company to carefully analyze all of its options and make the best possible decision. Time and the ability to research many options will create an environment where landlords are competing for the company’s tenancy. However, not allowing enough time shifts the leverage squarely back to the landlord. Why? Because the landlords realize that the company doesn’t have the luxury of exploring many other options (if any) and is forced to make a decision. When the landlord doesn’t have to compete with other options, it will exert its leverage on the company — especially in renewals.

How much time is required?

Typically, the larger the tenant, the greater the amount of lead-time required, since there’s a greater supply of small spaces. If a company is considering a build-to-suit, the lead-time is a minimum of 24 to 30 months. If a tenant is considering existing buildings, it’s a minimum of 12 to 18 months. But again, larger tenants — 50,000 square feet and up — should allow for additional lead times.

What mistakes do you see clients make?

The most prevalent mistake is believing you can execute this process without retaining qualified individuals and involving them early in the process. Remember that most landlords will have assembled a qualified team. Why wouldn’t a company want the same advantage? A corporate relocation is a time-consuming process, but if qualified outside individuals are retained, the burden is shifted to the assembled team.

Another common mistake is not assembling an internal team tasked with this responsibility. Equally important is receiving continual participation from the individual(s) that will eventually approve the team’s recommendation. Inevitably, assumptions and decisions will be challenged, but the chosen direction can be supported through a prepared and planned process. Otherwise, you’re back to square one, with much less time and leverage.

JAMES W. MOSBY is the principal and senior vice president at Colliers Turley Martin Tucker. Reach him at jmosby@ctmt.com or (314) 746-0316.