Jim Kavanaugh has heard and spoken about many of the common values that leaders use to describe what their company stands for. Honesty, integrity, transparency, accountability and so on and so on.
But as he sat down to compose a list of the core values that would guide World Wide Technology Inc. after the dot-com bubble burst, he knew he needed to be more selective.
“The easy thing to do was to list every strong value that you could ever think of,” says the company’s co-founder and CEO. “You would end up with 50 different values or 50 different things that you think are critical to the organization.”
You would also end up with a laundry list of principles that, while important, would be very difficult for most employees to get their minds around. Kavanaugh needed an exclusive list that his people could easily remember and live by.
“If it was something that just drove a specific action because of the time period we’re in or it’s the Internet craze or a market melt-down, if it was anything time-related, I wasn’t interested in it,” Kavanaugh says. “I wanted it to be structured and be a value system that would stand the test of time.”
He wanted a list that would guide World Wide Technology today, tomorrow and long into the future when Kavanaugh is no longer with the company.
“A lot of organizations create their own problem, and that is they change their core values,” Kavanaugh says. “If I leave, these core values should still be able to live and breathe within the organization because it’s not dependent on me or the specific time period we are in relative to the economy.”
The IT solutions provider needed these core values to provide alignment for employees on how they were expected to act.
“As a smaller company, you can do that just through communicating in person or through some type of correspondence,” Kavanaugh says. “However, as you get larger, you need to build a more systematic way of getting that message out.”
Here’s how Kavanaugh conveyed a list of foundational core values throughout his company and got employees to commit to them.
Act with integrity
The acronym for WWT’s five core values is EPATH, or the EPATH to employee and company success.
It stands for embracing change and diversity of people and thought; passion and a strong work ethic; attitude and being positive and open-minded; being a team player; and honesty and integrity.
“I put a bunch of things down and thought about what I felt were the most important,” Kavanaugh says. “You’re never going to capture everything, but I think it’s critical that you keep it simple enough that people can understand it, and you also keep it consistent.”
Honesty and integrity is the most important one out of the group in the eyes of Kavanaugh. It is the foundation upon which the values of embracing change, passion, work ethic and attitude are built.
“People need to feel that the organization has a high level of integrity all throughout the company,” Kavanaugh says.
The conveyance of values begins at the top. “The CEO needs to do what’s right,” Kavanaugh says. “When the organization and the people see those types of decisions being made with consistent integrity, that begins to resonate and drive the values and the culture of the organization.”
These are decisions that are made both inside the company and with external clients and vendors. Internally, it may come down to a longtime employee who has developed relationships throughout the company but did something that clearly crossed the line of integrity.
“It would be very easy to try to overlook that specific action or that specific thing that individual did and just allow them to continue to work for the company,” Kavanaugh says. “If you do that, all of a sudden now people start questioning the integrity of the CEO and the executive management team because they don’t walk the talk.”
If you have honesty and integrity as one of your core values and you respond consistently each and every time someone crosses that line, the message gets delivered.
“We expect you to treat people with a level of respect and integrity, and your actions need to demonstrate that,” Kavanaugh says. “We all know what we need to do. You need to have an organization that is willing and ready to make those decisions. If you don’t make that decision at that point, you jeopardize the integrity of the entire organization.”
Externally, it could come down to a business deal in which you might be asked to break a commitment to generate more money.
“You could look at it and say, ‘That’s an easy decision; you’re going to make a lot more money if you go with this other partner,’” Kavanaugh says. “We absolutely believe it’s the wrong thing to do from an integrity perspective. If we committed to that partner, we’re going to stay with that partner. If we end up jeopardizing profit margin on this deal because of that or even potentially losing the deal, we’ll lose the deal before we jeopardize the integrity of the company and the integrity of our employees.”
Experience has shown Kavanaugh that honesty wins out in the long run.
“The old adage is desperate people at desperate companies do desperate things,” Kavanaugh says. “It doesn’t make you happy at the time that some of it is going on. But those types of business practices and behaviors are normally very short term. You can’t let them pull you down to react at their level.”
Keep talking about it
Backing up your words with action is an effective way to convey a message such as your core values. But you still need to make a continuous effort to remind your people about what your company stands for.
“It has to be something that is led from my position, and it needs to be led with a level of passion and overall commitment to the entire organization,” Kavanaugh says. “For it to really work, it needs to be delivered on a daily basis by the management team and the employees all throughout the company.”
Just when you think you’ve told your employees about your company’s core values enough, try telling them one more time.
“You have to do it to a point where people are almost like, ‘Oh, my goodness, I’m tired of hearing him say this,’” Kavanaugh says. “Well, you know they’ve got it. It’s like business concepts and values. It’s one thing that they understand it. It’s another thing that they are executing it.”
Communication means nothing, even if your employees understand what you’re telling them, if they don’t put the values into practice in their daily behaviors.
To help make this happen, WWT integrated its core values into the employee assessment process. Employees are measured not only on how they perform relative to their job and their specific job requirements but also on how they measure up to the core values.
“Are you a team player?” Kavanaugh says. “Do you have the work ethic that we expect? Do you deal with people with integrity and respect? The five core values that we have, those individuals are assessed on their core values just like they are assessed on their job requirements.”
The core values are regularly communicated through corporate updates and in meetings that are held across the organization. It’s something that is always at the core of what the company is doing.
“We’ve tried to be very clear about what our value system is all about,” Kavanaugh says. “We’re not about going in and if somebody makes a mistake on the job or a bid or a quote, we’re not going to be happy about it, but we’re not going to come in and fire somebody over that. We want to talk to them about what we expect and how we’d like to see them improve.”
By integrating them into as many modes of communication as possible, you keep your core values front and center in the minds of everyone in the company.
“It has to be something that you are very aware of and committed to day in and day out,” Kavanaugh says. “Great companies all of a sudden become mediocre companies because they take their eye off the ball.
“You link it to the assessment process, and you link it to the goaling process,” Kavanaugh says. “It starts at the executive level, and it needs to roll all the way up and down throughout the company so that they are all linked and they all understand the importance of the value system.”
The problem that many companies have is that they draw up the values, and then don’t know how to get their employees to buy in to them.
“They haven’t thought through how they are going to actually make it stick and get it to be completely integrated and proliferated throughout the organization,” Kavanaugh says.
All of your hard work to build a foundation of values can be for naught very quickly if you take your foot off the pedal once the initial development of values is complete.
“The CEO has to be passionate about pushing this on a very regular basis,” Kavanaugh says. “The organization is looking for that individual to be the driving force behind the value system of that culture. When that individual starts to take his eye off of it and it doesn’t seem to be important anymore, that is quickly reflected in the attitude and actions of employees.”
It doesn’t have to be a lot of work to do it.
“It’s how you act and treat people,” Kavanaugh says. “They have to be able to see and feel that you are passionate about these things. If they don’t and they think it’s lip service, you’ll never get the benefit of implementing something like this.”
Kavanaugh tries to assess the importance that his employees place on the company’s core values through different means.
“It’s something that we want to use and should be using consistently as a tool to recruit, manage, motivate and retain employees — and also to terminate. It’s a tool to help them do those things as we manage our culture, new and departing.”
When you lay a foundation of how to act and follow through in living by those values at the top, you set the tone for the rest of the company.
“It makes it a lot easier for people to make decisions because it’s pretty clear to them what they should and shouldn’t do,” Kavanaugh says. “They don’t spend a whole lot of time debating, ‘Whoa, should I do this or shouldn’t I do this?’ It’s pretty clear.”
Employees are using the values to make choices at WWT, and it’s paying off. Revenue reached $2.5 billion for 2007, up from $1 billion in 2003, and the company now has 1,100 employees.
“A lot of people are asking us, ‘How do you continue to grow and add to your employee base at a very challenging time?’” Kavanaugh says. “The performance has been extremely strong from our employees because of the level of teamwork and execution they have demonstrated that is helping us to work right through this bubble.
“When you make decisions that are consistent with your value system, people see that you are very serious about that and they get it and understand it. If you start turning your head, that’s when all of a sudden it becomes paper and it has no meaning. It’s critical that you really have the discipline and the rigor and accountability throughout the organization that people are going to hold people accountable to that expectation of how they should act, work and treat other people.”
HOW TO REACH: World Wide Technology Inc., (314) 569-7000 or www.wwt.com
Online training provides an attractive option for today’s busy employees, many of whom travel and/or telecom-mute. Among the most compelling benefits of online training is that it dispels the barriers of time and place when it comes to “attending class.”
According to Amanda Mead, director of online programs at Fontbonne University, online training and education continues to grow at a rapid pace.
“It’s exploding,” Mead says. “I’ve been in the business for five years, and each year, I’m asked for growth predictions. I might predict 5 or 10 percent growth, and the actual growth after the fact hovers around 25 or 30 percent.” Mead attributes the growth to an amazing amount of technology that’s being developed at a dizzying pace.
“Today’s students want to be engaged,” Mead says. “Technology is making online training and education entertaining. In addition, it eliminates travel time and makes learning more accessible to more people.”
Smart Business asked Mead what companies considering online training programs for their employees should look for in a provider.
What are some of the most compelling reasons to use online training for employees?
The training goes with the employee. Employees can access training wherever they are. They also may be able to access programs that were out of reach otherwise, for example, they are on the East Coast and want to access a program that was designed on the West Coast. Students can participate very easily in online classes. Also, generally speaking, online education includes a lot of active training that can be applied right away.
When evaluating online training programs, what are some of the first things a company should consider?
Know what you are getting. This includes doing research on the accreditation of the organization supplying the training and knowing what specialty accreditations are used within your industry. Always look for both national and industry-specific accreditation. The program doesn’t have to be but should be affiliated with some larger body.
Review the training objectives and make sure they match your needs — beyond the bells and whistles, the information given has to be the information your employees need.
How can a company ensure that the provider’s offerings meet quality standards?
Don’t be afraid to ask about quality standards. All online programs should be utilizing some type of quality assurance process in the design and development of their courses. Look for objectives that are spelled out clearly. A quality assurance program should be in place for those designing the courses as well as a system of review for each course. There also should be internal instructions for the instructors to ensure they are complying with the guidelines set forth by the program provider. In addition, ask to see the set of standards the provider is working toward. Ask for documentation on how the provider designs its programs. Obviously, you want to get the biggest bang for your buck.
What types of learning activities should be offered?
Look for differentiated learning activities.
Many lesser training programs will have essentially one mode of learning: read. A quality program will provide students with many avenues for learning, including a variety of activities (reading, real-world observations, simulations/case studies, hands-on practice) and delivery methods (reading, PowerPoint style presentations, audio/video, podcasting). When students can start to discuss objectives, put theories in their own language and apply what they’re learning to real-life work experiences, that’s when real learning occurs. In addition, look for interaction between students and between students and instructors.
Is online training expensive?
The cost of a quality online training program is similar to that of a quality face-to-face program. Cheap fly-by-night online programs exist, just as cheap in-person programs exist. To ensure that you get what you pay for, again, look for accredited programs, quality instructors and a variety of learning activities. An added bonus with online training is that there often is more access to the instructor via e-mail and discussion boards. A lot of instructors of online programs are in the ‘constant contact’ mindset. Keep in mind that you will also save dollars — in terms of travel, mileage and time away from the job. There are a lot of hidden savings.
How can the company gauge the success of the program?
You can do two things. First, observe. Watch to see if your employees are integrating the learning right away, either in specific work situations and/or by talking to/showing other employees what they’ve learned, thus ‘extending’ the training. Second, listen to the employees taking the training. They will tell you if the instructors are doing what was promised. Students generally are not concerned with the class being ‘easy.’ They really want to learn and have their education work for them. They’ll give you accurate feedback. Value their feedback and, if they are unhappy, shop for a new training program.
AMANDA MEAD is the director of online programs at Fontbonne University. Reach her at (314) 889-4514 or email@example.com.
The current environment is favorable for those looking to buy land. In order to get the most bang for your buck, however, it is important to get a quality land broker early in the process, according to Hassan Jadali, CCIM, SIOR, principal, vice president, and Tiffany Wiegers, senior associate, both of Colliers Turley Martin Tucker.
In addition to helping you navigate the complexities involved with purchasing a piece of property, an experienced land broker can also provide guidance in determining the most opportune time to buy.
“Your profit is made when you purchase a piece of land, not when you sell it,” Jadali says. “You have to buy the right piece of property, in the right location, at the right price.”
Smart Business spoke with Jadali and Wiegers about buying land for investment purposes, the importance of working with an experienced land broker and how to reduce expenses during the holding period.
Why is land a good real estate investment in the current economic climate?
Under the current market conditions there are not many people buying land. There are, however, land owners holding on to the land they have to sell. This allows for stronger negotiations with the seller. Also, prices are down in some areas up to 30 percent from three years ago. For an investor with cash on hand now is the time to purchase land.
What considerations should be taken into account when buying land for investment purposes?
Land has a cycle like any other business. Investors must make sure they are not buying at the top of the cycle. Investors must also consider the impact of time and costs associated with zoning and government approvals. For example, an investor might get an unbelievable deal on a property at a premium location and then realize utilities aren’t available at the site, substantial grading is required and/or property needs to be re-zoned. When you add all of these factors up, the costs that an investor puts into the property start to accumulate.
Determining the holding period up front is a key factor as well. Many purchase a piece of property thinking it’s in a good location, but do not plan how long they are going to hold it and what it will take to hold it.
For example, an investor plans to hold a tract of land for five years, after four years they meet with the government agency to get specific zoning and the process takes an additional three years. Suddenly the holding period is significantly increased, which takes money out of the investor’s pocket.
What strategies are there to locate the best land available?
One must understand the governmental process and be patient. The majority of the time governmental approvals are necessary, whether it is a zoning issue, a conditional use permit or both. The average time for a land deal to close is nine months due to the contingencies and due
diligence with a land sale. It is not like a building inspection where one can take occupancy upon receipt of approvals. Because there are so many processes involved with land, it is important to hire an experienced broker with extensive knowledge in land acquisitions and dispositions. What people don’t realize is that it takes time and expertise to face and overcome the challenges associated with purchasing or selling a parcel of land. A broker who does not specialize in land may not be aware of all the potential obstacles. It will save time and money in the long run if a broker with land experience is hired over a broker without land expertise.
How can a land expert aid in the process of searching for and buying land?
Brokers specializing in land have market knowledge and relationships with land owners, appraisers and municipal leaders. A good land broker will research any future plans or improvements such as highways or road construction that might impact the property. These factors can add or take away value from the property.
How can one reduce expenses during the holding period?
First, try to find a temporary use for the site. For example, if you have an industrial site, perhaps you can rent the property to a trucking company to park its trucks or to an auctioneer to auction equipment. If the site is located on an interstate and has good visibility it might make sense to construct a billboard or rent it for temporary signage. Consider farming the land. Large pieces of property that are zoned commercial will be assessed with very high taxes; by farming the property taxes may be significantly reduced.
HASSAN JADALI, CCIM, SIOR, principal, vice president, and TIFFANY WIEGERS, senior associate, are both of Colliers Turley Martin Tucker. Reach Jadali at (314) 746-0370 or firstname.lastname@example.org. Reach Wiegers at (314) 236-5471 or email@example.com.
Mike Bolen always has an opinion. And when you’re someone
who has risen to the role of chairman and CEO of a $2.3 billion
company as Bolen has, your natural inclination is to want to share
“Your first reaction is always to demonstrate that you are the
smartest person in the room or that you’ve got the answer or to
shorten the meeting by saying, ‘I’ve thought about this; this is the
way we’re going,’” Bolen says. “You don’t need other people and
you don’t need meetings if that’s the approach you are going to
take. That’s very much human nature, especially if you’re dragging
around a big ego.”
Bolen has learned to check his ego as the head of McCarthy
Building Cos. Inc., thanks in large part to some strong leaders that
he worked for in the past.
“They weren’t bashful about getting in my face and pointing out
to me that I might learn a little bit more if I keep my mouth shut
and listen to the smart people around me,” Bolen says. “You have
to build it into your philosophy in order for that to really be the
So that’s what Bolen has done. When his board of directors met
recently to discuss how to proceed with what could be the largest
and most risky job in the company’s history, McCarthy kept his
opinions to himself for most of the meeting.
“I’m very careful not to offer up or be led into giving my analysis,” Bolen says. “I was able to get a very broad-based comprehensive analysis from the other eight people in the room and then
added mine at the end. That gave us the broadest playing field with
several significant risk issues that I hadn’t thought of. A couple
ideas might not have hit the table had I started the whole process
by weighing in with how I thought it looked and how I thought it
“At the end of the day, we were able to fold all that together with
my opinions and conclusions and get a nice, surprisingly tidy consensus on how to move forward.”
That leadership style is one of the reasons McCarthy has grown
to one of the top construction firms in the United States, with an
average project value of $25 million and experience in 45 states
across the nation.
Bolen makes it a point to listen to what his 3,000 employees have
to say and factor that into any decision the company has to make.
“You have to be able to effectively communicate downstream to
your people and, maybe more importantly, to effectively hear things
that are coming upstream or sideways at you,” Bolen says. “The
most challenging piece of it is that we’ve been in a very intense
growth mode for a number of years. To be able to effectively grow
and operate a business and have it function at a high level, the
notion of two-way communication is by far the most critical aspect
Just as it’s natural for a leader to want to express his or her opinion as quickly as possible, employees often come into a meeting
expecting to hear their leader making proclamations about what
they need to do.
“It can be a little frustrating for your direct reports, but I try to
make sure I understand their opinion before I give mine,” Bolen
says. “Pay attention to the notion that the first thing you’re doing
is you’re soliciting and listening actively to the opinion of those
around you and then you weigh in later. That makes some folks
uncomfortable. But once they get used to it, they find it very effective.”
It’s all about getting your people to feel comfortable taking a
chance and expressing what they really feel, rather than just telling
you what you want to hear.
“Once they realize it’s not only OK, but that it’s encouraged and the
way it’s designed to work, you get a much more free, open and honest flow of opinion,” he says.
It can take a little while to get to this point if your people aren’t
used to it or if you have new employees who are trying too hard to
impress you with their loyalty.
“Their goal is to mine or try to figure out what I think as quickly
as possible and then adapt their position to that,” Bolen says.
“When they are not able to do that, that can be a little frustrating.
Once they understand how that works, it becomes a much more
To get to that comfort level, your employees need to feel like
they can approach you and give their opinion without fear of retribution. You need to make yourself accessible.
“Try to end up in situations as often as possible that are just like
normal life,” Bolen says. “Do that frequently and at every level of
the organization. Make sure you’re just as accessible down at the
absolute entry level with the newest, youngest and most impressionable folks as you are in the boardroom. Be able and willing to
navigate that and put in the time to do that. That’s how you’re going
to set the culture.”
Bolen says it’s not as hard as you think. You just need to make
the effort to put yourself in situations where you can get to know
“It’s amazing how much they talk,” Bolen says. “You’re going to
have a very specific reputation one way or the other. If you’re walking the talk, people will get that and they will talk about it. The next
time you are in a situation where a young person might or might not
want to walk up and engage you in a conversation, they more likely will because they have heard it’s OK to do.”
McCarthy is a 100 percent employee-owned company. But the core of any open
corporate culture is that people need to
feel valued if they are going to feel comfortable expressing themselves.
“They need to believe they are valued and
they need to believe — and they do — that
they have the freedom to poke their nose in
and learn what’s going on,” Bolen says. “Not
only do they get a chance to weigh in with
their input into a situation, but they can feel
free to go gather information and go figure
out what’s going on in a particular situation.
The culture says not only is that OK to do,
but it’s an imperative. If you are honest and
genuine about it, they figure it out and that
becomes the culture of the company.”
Organize your thoughts
When Bolen listens to his direct reports
and employees express their position on a
given topic, he’s not just sitting at the head
of the table twiddling his thumbs.
“Do everything that you can just as a matter of style to be supportive, be interested
and be interactive,” Bolen says. “Do your
homework. Come to the table informed so
that you’re not totally shocked by everything that happens around you.”
The point is that while you have an open
culture that welcomes feedback, both positive and negative, every organization still
needs a leader who is in charge.
The trick is to strike a balance between
openness and authority in your dialogue
with your people.
“It helps, at least for my style, if you can
inject a little humor into it and use humor
to make your point,” Bolen says.
Whether you use humor or not, you
should always strive to be as direct as possible when you speak to your people.
“It may come across as too direct at
times, but I think on balance, they would
rather have that than to walk away wondering what I was trying to tell them,”
Bolen says. “I try to be as prepared and
direct and funny as I can muster.
“You have to not talk around an issue, talk
directly to it. Keep it short, keep it simple,
and keep it direct — and make it as hard to
misunderstand as possible. Be organized
and know what it is that you are trying to
communicate when you stand up.”
The trick is to avoid making it sound like
“You end up more trying to remember the
exact sequence of words than trying to get an
idea out or make a point and evaluate how
that idea is being received by the audience,”
Bolen says. “It’s listening with your eyes.”
By being more informal, you can more easily engage the people you’re talking to in your
dialogue and reinforce your open culture.
“Try to connect with an individual in the
audience and bring them in,” Bolen says.
“Ask them a question. Use them as an
example of a particular point. ... That gives
you a connection with the audience that
you don’t have if you act as if they are not
in the room.”
Write with feeling
When you have an organization with
thousands of employees spread across the
country or even around the world, your
opportunities for face-to-face meetings will
sometimes be few and far between.
Learning to write effective messages can
make a big difference.
“The trick to effective communication in
writing is to give the illusion that you are
standing there having a conversation,
especially when you are doing internal
communication with your own people,”
“It’s practice, and it has to be your style. It
probably takes three times as long to do
500 words, being careful to weave in
humanity. Try to find as many ways as you
can to weave humor into the idea, unless
it’s just totally uncalled for. But have it
come across so that when people come
away from reading it, they say, ‘I know I
read what he said, but it’s almost as if I had
a conversation with him.’”
The keys to successful written communication are very similar to those for being
effective with the spoken word.
“You organize it around telling them what
you’re going to tell them, tell them and then
tell them what you told them in terms of
what it is you are trying to get done,” Bolen
says. “Overlay that with an ease and friendliness. You can develop a style that is going
to make someone want to read it and pay
attention to it because they enjoy the stuff.”
You also continue to drive home the idea that they are an important part of the
organization and that you value their role
Whether you’re writing or speaking or
even communicating through body language, it has to become part of your leadership philosophy in order for it to be effective.
“Surround yourself with people whose
opinions are going to be valuable and are
going to help mold the ultimate decision
that gets made rather than a bunch of yes-folks,” Bolen says. “Those folks aren’t
going to tolerate an environment where
they are not listened to and they don’t have
a chance to have an impact on the outcome. It becomes a business deal between
you and the kind of people you have
around you. They are going to demand it
and rightly so.”
HOW TO REACH: McCarthy Building Cos. Inc., (314) 968-3300
Spam, which in a broad sense is any unsolicited, unwanted electronic message, is a serious problem that continues to grow at an alarming rate. Not only does it slow down the passing through of legitimate mail over the Internet and therefore slow down the conducting of actual business but also dealing with spam has become an enormously time-consuming issue for IT departments.
“Spam has changed in nature over the last few years,” says Michael Lee Grissom, associate vice president for information technology at Fontbonne University. “In the early days of the Internet, it involved Internet hoaxes you’d hear about a hoax and pass it along to your friends. Then, marketers got hold of the idea and the rest is history. Because e-mail is free, spammers don’t care if they have to send out millions of messages to get one or two responses. And there really appears to be no end in sight.”
Smart Business spoke to Grissom about spam and what organizations can do about it.
How prevalent has spam become?
To give you an example, Fontbonne University has approximately 3,000 active users in e-mail at any given time. A few years ago, we were getting 20,000 messages from the outside every day. Today, we’re getting 350,000. Only 4 percent of that is legitimate e-mail. Everything else is spam. The volume is incredible. One day, we received 700,000 spam e-mails.
What special challenges does it present for the IT department and the organization as a whole?
Dealing with spam takes a tremendous amount of time. And spammers get cleverer all the time. As soon as the IT folks figure out a way to block the spam, the spammers come up with another way to get through. In addition, spam competes with legitimate e-mail, so when waves of spam hit your filter, everything slows down. This frustrates the users. Then there is the constant education that the IT department has to do with the employees about what they can and cannot do with the e-mail system.
What are the best lines of defense?
Three or four years ago, a spam filter was optional. Today, it’s an absolute must. You can filter your e-mail on site, but the downside is that all mail has to come through, which eats at your bandwidth. But the advantage is that you have more control with your settings, and you can go back into the log and retrieve messages that got caught in the filter but that were legitimate and should have made it through.
A second option is that you can out-source your e-mail service for a monthly fee, go to the provider’s browser and pick up your mail. This probably works best for smaller businesses with 20 employees or so.
A third option is a service that you route all your mail to; they filter it out and pass to you what appear to be legitimate e-mails. The downside is that while you can go back through the log, the service is expensive for a large organization. But, it will save you bandwidth. In addition to having a good filter, you can limit the types of attachments you’ll let go through.
Another thing you can do is educate users to be very selective about whom they give their e-mail address to. Educate them about phishing, as well. Phishing is where criminals try to collect personal identification about people under false pretenses. You would be amazed at how many people fall for phishing scams and give out their credit card, bank account and social security numbers just because the request looked ‘official.’ When employees do this on your watch, it’s your problem, too.
How flexible are filter rules?
There is a lot of tweaking you can do, adding your own blocked and suspect key words, etc. But you have to be careful with the words. For example, take the word ‘sex.’ What if you’re a university and you have a team of psychologists working on a project about human sexuality? Also, if the filters are catching legitimate e-mail from certain senders, you can put their names on ‘whitelists’ to allow them to come through.
What does the future hold? Will things get better?
It’s getting more and more difficult to decipher what’s legitimate and what is not, and the pace is picking up. Personally, I don’t think the outlook is good. And because it’s the ‘worldwide’ Web, it’s near impossible to try to regulate spam. If we had laws in the United States, the spammers would send their messages from Canada, India or Asia. A direct outcome of all this is that more people are having multiple e-mail addresses, segmenting by activity. And, in fact, some people are becoming less dependent on e-mail out of sheer frustration. It’s very difficult to get your arms around the entire issue. It’s just an ongoing battle with no real end in sight.
MICHAEL LEE GRISSOM is the associate vice president for information technology at Fontbonne University. Reach him at (314) 889-1488 or firstname.lastname@example.org.
Born: St. Louis
Education: Bachelor of science in business administration, University of Missouri, two years at the Columbia campus and two years at the St. Louis campus
What is the best business lesson you have ever learned?
Building a good team. Your people are probably your most important asset. It’s building that team so you all work together, work in the same direction and can all rely on each other.
A little history: MMS A Medical Supply Co. was founded in 1970 under the name of Midwest Medical Supply Co. Inc. MMS continues to provide medical supplies to acute care, long-term care, pharmacies, physicians, home health care agencies and the U.S. government.
Acquisitions, over recent years, have allowed MMS to expand into the hospice/dialysis markets as well as the retail catalog segment of the business.
In 2003, MMS added divisions to service customers in the industrial market as well as providing a redistribution service for major suppliers. The growth of MMS came through expanded markets and divisions that are serviced through its regional distribution centers.
Throughout the last few years, the use of e-mail to deliver information, market products or services, and foster relationships with customers has exploded. This flexible and useful medium can take many forms, from simple text to HTML-based to interactive formats that might include video, flash and other Web-based elements.
“The advantages are readily apparent,” says Mark E. Johnson, director of communications and marketing at Fontbonne University. “For starters, it’s cost-effective, usually costing less than a penny per e-mail. The other big factor is timeliness. E-mail enables you to respond quickly to a developing marketing opportunity versus print where you have to factor in the production and mailing time.”
But, Johnson adds, you have to differentiate your message from spam. One of the best ways to do that is to make sure your target audience is an opt-in group. In other words, you’ve already had some interaction with these prospects, and they’ve either given you approval to send them messages or have at least provided their e-mail address to you in some form. In either of those cases, the recipient should not be surprised to receive something from you by e-mail down the road.
Smart Business spoke to Johnson about e-mail marketing practices and what makes an effective e-marketing campaign.
Of what elements does an e-marketing campaign consist?
The short answer is that the elements can vary widely, and that’s the beauty of e-marketing. You have a lot of flexibility. For example, a university could use very simple, but highly visual, e-cards to promote college open houses, scholarship deadlines, etc. These are designed with a relevant graphic image and minimal copy, which, in my opinion, is best. Keep your message short and punchy because, ultimately, you’re trying to get them to click on the e-card, which then takes them to a particular page on your Web site for more information, registration to an event, etc. The other common e-marketing medium is the newsletter. This differs from the e-card in that it includes more copy and visuals, depending on what you’re trying to promote. It’s not that different from a printed newsletter in that you’ll have a name for it, along with stories or topics, probably some pictures and maybe even ads items you want to draw special attention to. The content is usually just ‘teaser’ copy, and then the reader can click through to your Web site to finish the story. This can work for a variety of businesses if you have one important factor in place the prospect needs to have some level of affinity for your product or service. In order for someone to take the added time to peruse the newsletter, he or she would generally have to be interested in some aspect of what you’re offering.
How do you decide which type of e-marketing works best?
It depends on not only the product or service being offered but also the specific offer within that product or service. For example, if a university is targeting prospects who have applied to the school but have not yet visited the campus, they should send a very specific ‘campus visit’ e-card. It’s a one-message piece with a specific call to action. However, if you’re targeting a broader audience let’s say students who haven’t applied to a school but have asked for a brochure you might send an e-newsletter containing many topics they might be interested in.
How can you increase your chances of success with an e-marketing campaign?
E-marketing is most effective when used as part of an integrated campaign or marketing approach that uses other media, as well. For instance, you can send e-cards in addition to printed postcards when you’re promoting an open house. Not everyone’s going to open the e-cards and not everyone’s going to look at the postcard. In essence, you’re just trying to cover all bases. You might also have ads on your Web site or print ads that share the visual of the e-card. In this way, you’re trying to create recognition of your message across many platforms. And, e-cards can be personalized if that’s something you think is important to your target market.
How can you measure the effectiveness of e-marketing?
The ability to measure effectiveness is an area where e-marketing is head-and-shoulders above traditional direct mail marketing. With e-mails, if you’re using a particular system or vendor, you can track how many prospects opened the e-mail, when they opened it and if they clicked through to your Web site. Additionally, you can see, by name and e-mail, who clicked on what. In some cases, you may want to follow up with prospects that clicked through but took no action. You already know they’ve shown enough interest to open your e-mail and even click through. E-mail can be a powerful tool in your marketing arsenal if used responsibly, skillfully and sparingly.
MARK E. JOHNSON is director of communications and marketing at Fontbonne University. Reach him at email@example.com or (314) 889-1467.
Born: St. Louis
Education: Bachelor of science degrees, marketing and psychology, Southwest Missouri State University (now called Missouri State University)
Whom do you admire most in business and why?
Sam Walton. Not Wal-Mart today, but Sam Walton. I think he was truly a leader. Sam Walton tried to do something to improve people’s lives, and I think he did it. What’s the optimal legacy of an individual? That’s to be a positive influence on the lives of others. He completely changed the landscape for so many small towns. You talk about painful and touch love. These people say, ‘Yeah, but Wal-Mart comes in and they put the small businesses out of business.’
But they also employ all the people that worked at small businesses and now they have health care and now they have the availability of all the different products that people have in the cities, including prescription drugs and technology tools and everything else. Sam Walton did that.
Fleming on letting someone go: Talk to them and say, ‘Look, we want to find another place for you. Can we redeploy you?’ You try to find a position that fits their personality. If that doesn’t work, you have to realize the best thing you can do for you and for the company is to let them go. You are doing them a disservice by letting them stay on. You have to be very generous in your severance package. If you did nothing, they’d be working for you for another six months. Why not give them six months severance? Why not say, ‘Look, we want to help you get a job. You can use us as a reference. But you really need to find something that fits you better than this.’
You think it may be time to put your business up for sale and retire. But how do you know if the time is right? Is your business in good enough shape to be attractive on the market? Is it turning a profit and are all of your books in order?
“You need to understand how businesses are valued in today’s business environment,” says Vince Garozzo, an officer in the corporate practice group and a member of the board of directors at Greensfelder, Hemker & Gale, P.C. “All businesses are valued based upon the quality of cash flow they generate.”
Smart Business spoke to Garozzo about what should be done to make sure a business is ready to be listed on the market.
How do business owners know their businesses are ready to be put on the market?
Business owners need to focus on improving and enhancing the sustainability of their cash flow. One way to do that is by generating more revenue, but another way is to manage the expenses and the growth of the company.
Most companies are valued and sold based upon a multiple of their cash flows. In today’s environment, such multiples could be anywhere from five to seven times, depending upon the nature of the business. Sometimes, with a sophisticated technology company with a lot of potential growth, you could be talking about a multiple as high as 10 to 12 times cash flow. In particular, publicly traded buyers look for middle-market companies that are closely held and the founder (or next generation) is examining diversification alternatives. As their stock may be trading at 15 to 20 times earnings, it makes economic sense for them to buy a company on a valuation equal to five to seven times cash flow, drop it onto their own bottom line and watch the accretion to their stock price.
How does the market look right now?
In today’s environment and due largely to the subprime meltdown over the summer, most of the active purchasers today are strategic buyers looking to make complementary acquisitions within their industry. These strategic buyers could be publicly traded or closely held, and may, in fact, be portfolio companies of existing private equity groups. Nonetheless, credit is much more difficult to attract under current market conditions, and leverage ratios are being ratcheted down, which has caused a decrease in the multiple of cash flow that a buyer is willing to pay. Consequently, it is currently a buyer’s market.
So what can business owners do?
Basically, they need to analyze the quality and sustainability of cash flow and eliminate all unnecessary and related party expenses that a buyer would not otherwise incur on a post-sale basis. For example, many closely held business owners pay themselves a significant salary and bonus. A strategic buyer may very well eliminate the owner’s compensation and replace him or her with a manager earning a substantially lesser amount. You may be better off to show earnings at an arm’s length management-level employee as opposed to showing an owner pulling out $500,000 a year as compensation. Especially if the company is a S Corporation or a LLC, where the earnings all flow to the owner anyway.
It’s also important to have a sustainable cash flow that is diversified. A buyer would rather buy a company that has 20 different customers that each make up 5 percent of total revenue as opposed to three customers that make up 33 percent each of total revenue.
Do business owners need to make repairs before a sale like a residential owner would?
There are many ways to make your company more appealing. One is to get your financial statements audited by an independent accounting firm. All buyers like to see audited financial statements of the companies they are reviewing. If you are reviewing a company generating $5 to $10 million in revenue, an audit might be too expensive. A company generating revenue in excess of $10 million generally should have its financial statements audited in order to provide more credibility to its financial statements and its earnings.
You also need to self-audit all of your contracts, licenses and intellectual property. You analyze and catalog what you have and make sure that it’s in a written format. If possible, it is always ideal to avoid change of control provisions in contracts, so if you sell the stock of the company, you don’t have to get the consent of the customer to close the transaction. Further, intellectual property is important because it provides another opportunity for the buyer to identify a continuing and sustainable earnings stream, and with the brand that is being purchased.
VINCE GAROZZO is an officer in the corporate practice group, specializing in mergers and acquisitions and corporate finance, and a member of the board of directors at Greensfelder, Hemker & Gale, P.C. Reach him at (314) 516-2624.
Dennis Barnes Jr. is never short of ideas something that helps him in his job as president of Marketing Direct Inc.
But he’s learned that just because an idea seems good to the person who came up with it doesn’t mean that it will work.
“Before you just roll out a vision, it’s important to do a little sanity check and have people poke holes in some of your thinking,” he says.
Barnes bounces ideas off his management team at his $12 million, 45-employee, direct-marketing company, and if the team validates those ideas, it’s time to move forward on them. And if his ideas aren’t validated, then it’s back to the drawing board.
Smart Business spoke with Barnes about why collaborative leadership beats holing up in your office and how to get everyone involved in the process.
Q. How do you develop a vision for your organization?
By surrounding myself with great people and collaborating, we have immediate buyin when there is a vision that comes out of it. That buy-in of the leadership ultimately trickles down through the organization.
So instead of holing up in a room myself and trying to decide where we should go, I pull together the leadership team people over the various disciplines of the company and say, ‘Let’s talk about what we’ve achieved in the last several years and [what] we want to achieve in the five years ahead.’
Q. Why is it important to get input from different areas of the company?
Everyone has an opportunity to speak. There is a big difference between a day in the life of somebody who is doing sequel programming and somebody who is on the front lines as a customer service representative dealing with clients or somebody who is heads down on a Macintosh designing a mail piece or a TV spot.
When we have all those people in the room together talking about what their priorities are, it brings everybody together, and they realize what the various roles are and how they are interdependent. While they do very different functions, they are all ultimately focused on the same outcome for our customer.
Q. How do you get employee buy-in?
It does need to start internally, rather than externally. We have something we call ‘20-minute sessions.’ We call them 20-minute sessions because we thought that’s all it would be, and they’ve become hour to hour-and-a-half sessions.
Those 20-minute sessions are either myself or myself and our senior vice president doing a one-on-one or two-on-one with every employee to talk about the vision, the values, their role, how they fit into that whole vision. We end up getting great feedback, and it ends up being a great dialogue.
The benefit for the employee is an opportunity to have reinforcement for what contribution they’re making toward the vision. Day to day, we get siloed and lose focus on how important the role we’re playing is toward the goal.
So it’s a great opportunity to reinforce, ‘Here’s where we’re trying to go, and here’s your role in that.’ Also, we get some feedback from them on things that we could do differently to make their role either more rewarding or more effective.
So, they get clarity, and we get great ideas.
Q. How do you find time to meet with everyone?
There’s not a timeline on it, so I’m not trying to knock every meeting out in one month. It’s just a rolling process, so I may meet with two or three people this month and six people next month and one person the month after that.
I know who we’ve met with and who we haven’t, so we have this rolling rhythm, and we schedule them out over time. It’s a good discipline, but we don’t tie ourselves down in terms of a timeline.
I don’t want them to feel forced, either. Sometimes, they can be impromptu. Sometimes, that feels better than something structured where you send a meeting invitation ‘Come sit in my office.’
We’ve had feedback that has led to us implementing changes in processes and investments in things that were good ideas. So the actions coming out of it reinforce that it’s time well spent.
Q. How do you sort through all of that feedback?
If something shared in that meeting looks like a potential concept for improvement, I’ll take that concept to our management team and share it with them. We’ll kick it around and talk about some of the pros and cons and make a determination together if it’s something we’d like to explore further and implement.
If so, we usually involve the person who came up with the idea. If not, we go back to the person and talk to them about the discussion we had and why we chose not to move forward with it at the time.
Usually, that gives it some closure. You see some action, or rather than perceived inaction, they get some feedback.
HOW TO REACH: Marketing Direct Inc., (314) 590-8301 or www.marketingdirect.com