How Timothy Yager led a strategy to get Revol Wireless winning again in the prepaid provider space

Timothy Yager, President and CEO, Revol Wireless

Timothy Yager, President and CEO, Revol Wireless

When Timothy Yager started at Revol Wireless in the fall of 2011, the company had been losing customers every month for an extended period of time. Late 2009 through the first half of 2011 were tough years for the organization — rumors of bankruptcy and new ownership were being floated around and the wireless communications provider was in desperate need of change.

“The company was having some financial issues,” says Yager, president and CEO. “So my arrival was a chance to hit the reset button for Revol, not only for our customers, but for our employees and say, ‘It’s a new day. The ownership change has happened and they’ve brought in new management and we’re going to focus the company on winning.’”

When Revol was first launched, it was a more than 300-employee, $100 million company. It had a reputation as being on the cutting edge of the prepaid wireless industry.

“Revol had a lot of success early on because it offered unlimited voice and those kinds of things on a prepaid platform,” Yager says. “They were the only provider in the footprint offering that type of service.”

In 2008 and 2009, other prepaid providers started moving in and the competitive forces grew. In a hypercompetitive industry such as wireless, Revol wasn’t as competitive as it should have been and it quickly began to fall behind.

“They needed some help getting the business turned around,” Yager says.

Here’s how Yager reinvigorated Revol Wireless with a strategy to get the prepaid provider winning again.

Evaluate the business

Prior to Yager’s arrival, Revol’s strategy and day-to-day operations were hindered by its capital structure, which brought about a slow-to-react atmosphere. Once the company was free from that structure, there were a lot of people who were looking for strong guidance, enthusiastic leadership and setting of general objectives to get the company back on track.

When Yager was first introduced to the team, it was a transformation in enthusiasm, direction and general motivation. Everybody suddenly had a place to go and a job to do. Yager brought a lot of that enthusiasm and direction to the table, and that’s exactly what people needed.

“Those first few days and weeks were really about analyzing the team that was here and where the strengths and weaknesses were,” Yager says. “The other thing was trying to change the focus and mindset of the company.”

Yager wanted to instill a strategy that said the company was in it to win it. It didn’t happen overnight, but employees started to recognize that there was a new philosophy.

“Revol had gotten mired in the minutia and a lot of times in companies that are struggling, people retreat from making decisions,” he says. “One of the biggest things I did was come in and start making decisions.”

Simple things like “yes and no” decisions went a long way toward starting to improve morale and helped employees realize there was a new sheriff in town. Yager represented new ownership, new direction and new thought.

“I think people started to feel empowered to be successful,” he says. “In a turnaround situation, one of the biggest things you’ve got to do is make decisions. So often companies get polarized with the fear of making the wrong decision that they make no decision, and I firmly believe that sometimes a wrong decision is better than no decision.

“If people are just constantly treading water and they don’t know whether they’re going up, down, right or left, it zaps the life out of a company.”

People respect leaders who come into a company and lay out a plan of attack, are upfront about the plan and who are forceful.

“I can remember that first meeting and saying, ‘I’m not going to do everything right and I’m not going to pretend to do everything right, but we’re going to make decisions, have short meetings, focus on what needs to get done and we’re going to get it done,’” Yager says. “In our wireless industry, where it is so competitive, we don’t have the luxury of taking six months to analyze everything.

“Sometimes you’ve got to look at the facts, make a decision and move on.”

Be decisive

Revol started 2012 losing customers every month, just as it had been the year prior, but with Yager on board the wheels were in motion for the company to move forward.

“When I came in, one of the first things I did was put some extra incentives out there to our dealers to sell some phones,” Yager says. “I was trying to buy some enthusiasm from our partners to get reinvigorated about selling the Revol brand.”

Another key decision Yager made was to get out in the field and visit a lot of the company’s owned doors and indirect doors to help get the message across that it’s a new Revol and a new day.

“Those were things that didn’t cost a lot of money, but helped move the business forward because it put a face with a name they were starting to see on emails,” he says. “It also gave them a chance to meet me and realize that I’m a relatively aggressive guy.

“When you’ve got five to eight competitors in a marketplace, you’ve got to be aggressive, and by people meeting me and realizing that I wasn’t just saying we were playing to win, they could tell by meeting with me that we want to win the game.”

One of the most crucial issues that Revol and Yager identified that needed to be changed was their network.

“Revol was still operating on an older technology called 1X and had slower data speeds,” he says. “In today’s world of smartphones, Androids and everything else, data is key.”

Shortly after Yager joined the company, the board approved a plan to upgrade the network to a 3G network.

“Our key initiative in 2012 was the company deploying 3G,” he says. “We launched that service in September last year and noticed an immediate uptick in our sales to customers as well as a stickiness of our existing customers.”

Move forward

Yager’s key to helping Revol right the ship was his ability to deliver on his decisions. He was careful not to promise too much.

“I came in and made a few simple promises — two or three key things and then I spent a year beating the drum on those things to do it,” Yager says. “Too often people come in and make a laundry list of 26 items they’re going to promise. No one can get that done in a reasonable timeframe and you lose credibility. Pick and choose what needs to get done and then deliver on it.”

In 2012 Revol was all about getting 3G launched. In 2013 the company is all about selling phones and keeping customers happy.

“When we launched our 3G network we saw an immediate turnaround to our gross sales and our net sales,” he says. “We have more than doubled our sales in January 2013 from January 2012. We’ve really seen that the successes are bearing out.”

Everyone at Revol had to put in the hard work to get the pieces in place, but now that that’s done, the company has seen noticeable improvement. To continue to see those sales and revenue numbers increase, the company has to keep a focus on growing its customers.

“I’m happy to report they are growing,” Yager says. “I’m excited about what we can achieve this year. Last year we had a hard time competing from a sales perspective because we hadn’t upgraded the network. This year we’ve got those key ground-level type things in place, so I’m looking forward to being able to execute and win.

“We have almost a singular focus in 2013, which is to grow the business. There’s really only one way to grow the business, and that’s to be successful in adding new subscribers and keeping existing subscribers.”

How to reach: Revol Wireless, (800) 738-6547 or www.revol.com

Huntington-CSU partnership to provide $1.2 million to Cleveland State

An exclusive partnership between Huntington Bank and Cleveland State University will bring new customers to the bank — and $1.2 million to CSU for scholarships and academic programming over a 10-year period.

“It is hugely significant for Huntington in that we partnered with one of the most important institutions in Cleveland,” says Dan Walsh, Huntington Bank Greater Cleveland Region president. “I think it underscores our commitment to the community.

“This extraordinary university contributes significantly to the vibrancy and economy of our city.”

CSU will receive $50,000 in scholarships, a minimum of three paid Huntington internships per year and $250,000 to support the university’s Allen Theatre Project, the “Power of Three.” In addition, the bank will work with CSU to develop a financial literacy program for students in order to help build a financial foundation in their lives.

Huntington hopes to target incoming freshmen as well as the 90,000 CSU alumni.

“We are very bullish on the growth going forward,” Walsh says. “And we will continue to grow our relationship. We are very excited about this going beyond the next 10 years.

“Huntington will be tracking those alumni who open accounts so we can monitor our deal with Cleveland State. We can give extra credit if we see this threshold of new customers or profitability.”

Huntington, with its launch of branches in Giant Eagle grocery stores, has the largest branch network of Cleveland banks. A full-service branch is now open on the CSU campus, and a new Huntington Bank Vikings debit card will be issued to customers.

CSU President Ronald Berkman welcomed the relationship, which was finalized after a competitive bidding-type process to become “The Official Bank of Cleveland State University.”

“The scholarships and internships Huntington will provide will be invaluable to many of our students,” Berkman says.

2013 ERC / Smart Business Workplace Practices Survey: Workplace makeover

Sue Ann Naso

Sue Ann Naso, President, Staffing Solutions Enterprises

If you had any doubt about the recession being in the rearview mirror, consider this tidbit from the ERC/Smart Business Workplace Practices Survey. In the last 14 years, only two years — 2009 and 2010 — have returned results with Northeast Ohio companies reporting the poor economy as their toughest challenge. For the 11th year, companies in 2013 are reporting that their biggest challenge has been hiring and retaining talent.

The survey, which has been a collaborative effort between ERC and Smart Business since 2001, is aimed to let you know what companies in Northeast Ohio are doing to drive their businesses forward.

This year in particular showed an overwhelming amount of companies, 49.5 percent, listing hiring and retaining talent as their No. 1 challenge.

The other concern many Northeast Ohio workplaces have includes health care costs and the uncertainty of the Affordable Care Act (ACA). The good news is that a mere 5 percent of companies named economic conditions as the toughest challenge.

Lauren Rudman, President, Cleveland Society for Human Resource Management (SHRM)

Lauren Rudman, President, Cleveland Society for Human Resource Management (SHRM)

“Hiring continues to be strong,” says SueAnn Naso, president of Staffing Solutions Enterprises. “We see more and more companies adding recruiting talent, and it’s getting much more competitive to find those people, which is a good sign.”

Companies in Northeast Ohio are ramping up their recruiting efforts with 84.2 percent utilizing Internet job boards, and 50 percent utilizing social media to recruit talent.

“On the hiring side, you see a lot more LinkedIn activity,” says Lauren Rudman, president of the Cleveland Society for Human Resource Management (SHRM). “LinkedIn is still the No. 1 way to go, but I’ve also seen job opportunities pop up on Twitter and Facebook.

“Word of mouth is still a great way to go if your company has a referral program. Between social media, specifically LinkedIn, and word of mouth, those are still the No. 1 and No. 2 ways that work for recruiters and talent acquisition teams.”

While companies are finding ways to recruit more talent, they are also very focused on retaining that top talent once they have it.

“We’ve seen a continued emphasis on things like workplace flexibility and investing in training and development as ways to retain employees,” Naso says. “They’re focusing on keeping their turnover numbers as low as possible.”

According to the survey, 77.7 percent of companies provide financial assistance to employees to upgrade their skills through advanced education or job-related training. In addition, 28.6 percent offer a mentoring program.

“Training and development is a big one, especially for some of the millennials (Generation Y),” Naso says. “They really are focused on learning and growing, so I’ve seen a lot more hiring of people that do training and development, creating leadership training programs and having a leadership track so these young professionals see a career path and aren’t looking outside the company for growth.”

Today, there are more training and development programs than there were in the recent past and there are a couple of things that factor into that.

“One is the economy,” Rudman says. “Unfortunately, when things go bad, training and development is the first thing to get cut. As the economy continues to get better, those will either come back into play or grow.

“Another big part of it, too, is Generation Y in the workplace. Generation Y wants development, training and to know how they’re doing. Companies need to recognize that in order to retain top talent they have to provide these resources like mentoring, coaching and development opportunities because they want it more than some of the generations in the past.”

According to the companies that responded to the survey, roughly 75 hours of training are provided to new-hires in their first 90 days. Another way more companies are incentivizing employees to stay at their current company is through workplace flexibility.

“That has been a huge trend,” Naso says. “There has been a study that mentioned that about 78 percent of U.S. workers are looking at workplace flexibility as a primary reason why they’re either staying where they’re at or making a move. That is as important to them as compensation.”

According to the 2013 survey, 44.3 percent of companies in Northeast Ohio are offering flextime, 14.8 percent are offering compressed workweeks, 17.2 percent offer telecommuting and 32 percent offer a work-from-home option.

“It’s interesting because workplace flexibility tends to be something a little different to each person,” Naso says. “We’re seeing companies trying to put things in place that provide a variety of options for employees. It depends on the type of job or their focus and how they can create that flexibility.”

While hiring and retaining employees remains the top challenge, the upcoming ACA and its pending changes to health care costs have companies anxious about what the result will be.

“One trend we are seeing that was published recently in one of the staffing industry magazines is that temporary staffing jobs hit a record high in May as companies are trying to lighten the burden of the whole Obamacare regulation,” Naso says. “Instead of adding staff, they are using contingent labor to manage some of that.”

In fact, according to the survey, the average percentage of the workforce that was temporary of the companies polled was 3.6 percent, the highest since 2006. The percentage of contingent workers in 2013 was 8.6 percent.

“In preparation (for the ACA), a lot of companies are attending conferences and meetings,” Naso says. “However, I haven’t seen any hard and fast actions yet. I haven’t seen companies that have actually reduced their part-time staff from 35 hours to 28 hours or anything like that. They’re all in that wait and see mode.”

Due to the uncertainty of the ACA, a lot of employers and companies are being proactive.

“We’re seeing companies bringing in wellness coaches, reimbursing employees for gym memberships and bringing healthy food into their organizations via vending machines or fresh produce stands,” Rudman says.

“Biometric screening is another big one. You see a lot of those efforts happening, which down the road can hopefully impact and decline health care costs for those companies, as well as employee’s out-of-pocket costs.”

The biggest decision looming for companies is whether they will “play” or “pay” with the ACA.

“Pay means that the company is not going to offer health care and they will pay the penalty, which is $2,000 per employee, and then those employees will be a part of the health care exchange that the government is offering,” Naso says.

“Play means a company will provide a health insurance plan that meets all the new government standards. Even companies that currently offer insurance could be affected because their current plan may not meet those requirements anymore.”

One of the requirements is that health care doesn’t cost an employee more than 9.5 percent of their salary. There is also a minimum coverage.

“Companies that currently have a plan could have increased expense because they may have to pay more of the premium or increase the amount of coverage, which increases the cost of the premium,” she says. “At the moment I have heard that more companies are going to play than pay. But it’s still a huge unknown.”

Despite what may result from the ACA, there is no doubt that companies in Northeast Ohio are once again flourishing and waving goodbye to the recession. Smart Business thanks ERC and those companies that participated in this year’s Workplace Practices Survey.

2013 ERC / Smart Business Workplace Practices Survey: In pursuit of a better workplace

Pat Perry, President, ERC

Pat Perry, President, ERC

Workplace practices and policies ranging from innovative flexible work arrangements to the debate over the Affordable Care Act (ACA) were topics of this year’s ERC/Smart Business Workplace Practices Survey. Watching the discussions around these events unfold serves to reinforce the fact that the decisions we make as employers have the ability to significantly impact the well-being of both our individual employees and our organizations.

Now in its 14th year, the 2013 survey collaboration between ERC and Smart Business aims to shed light onto how employers in the region are effectively applying these practices, enhancing their workplaces and ensuring that they retain their top performers and attract new talent in the region.

So, whether you are pursuing the latest innovative trend or simply looking to meet the basic needs of your workforce, you are likely doing so for largely the same reason as the vast majority of other organizations in the area — to overcome the challenge of attracting and retaining the best and brightest employees here in Northeast Ohio.

Below are a few hot topics from this year’s survey. Also included are a few suggestions about how each can be used to help attract and retain top talent at your organization.

Benefits

Organizations are increasingly expressing concerns about health care costs with 42.6 percent of manufacturers and 28 percent of non-manufacturers reporting that they are “unsure” whether they will “‘pay” or “play” when the new ACA regulations take effect.

Two-thirds of organizations are choosing to “play” and will continue to offer health insurance to their employees. With many unknowns still on the horizon, try to understand the drivers of these costs for your business and explore new ways to manage them in the long-term. Investing in wellness initiatives helps manage costs and still allows you to provide the benefits that are most important to your workforce.

Safety

Creating a physically safe work environment starts with putting specific policies on the books that will keep employees safe on a day-to-day basis. We’ve been fortunate to see very low rates of violence in the workplace in recent years among participating organizations, 77.5 percent of which prohibit firearms and other weapons. But safety isn’t always as cut-and-dry as having a policy in your handbook.

While violence has declined, incidents of bullying have actually risen to a high point of 19 percent in 2013. Creating an environment that encourages employees to speak out if they experience or see inappropriate behaviors can be challenging, but results in a healthier, safer workplace.

Work-life-balance

Respondents are making this popular concept into more than just a catchphrase. This year, flexible work arrangements rose to 68.9 percent — the highest level seen in the past 13 years. While we understand not every job is conducive to off-site work arrangements like telecommuting or work-from-home, even manufacturing organizations have some options. In fact, manufacturers in this year’s survey allow their employees some degree of flexibility with 34 percent allowing part-time schedules and 36.2 percent granting flextime.

Social Media

While social media use is seeing growth on the whole, the most prominent role it plays in organizations is in recruitment strategies. Half of respondents report using some type of social media tool for recruiting. But this year organizations made it abundantly clear that not all social media tools are created equally.

When it comes to finding the right employees, organizations appear to be taking their recruiting responsibilities more seriously, with 90.9 percent sticking to professional networking sites like LinkedIn. Facebook ranked second with only half that number of users at 45.5 percent.

Sincerest thanks to this year’s survey participants and to Smart Business magazine for 14 years of survey collaboration. In addition, we would like to acknowledge the NorthCoast 99 winners over the past 15 years (www.northcoast99.org) who also demonstrate excellence in the attraction and retention of top talent.

 

Pat Perry is president of ERC, Northeast Ohio’s largest organization dedicated to human resources and workplace programs, practices, training and consulting. Reach him at (440) 684-9700 or [email protected] For more information, visit www.ercnet.org.

How Steve Bilt positioned Smile Brands to give patients the best dental care they can get

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

There are lots of ways to run a successful dental practice, which became one of the biggest challenges facing Steve Bilt and his leadership team as they contemplated the future of Smile Brands Group Inc.

“Defining a simple agenda that supports what your customer wants and needs, understanding who that customer is and then delivering that value has been a big challenge,” says Bilt, the $600 million company’s co-founder, president and CEO.

“I could look inside the 400 different units we support and say, ‘OK, you can find every model under the sun in some way, shape or form working. But if we’re going to continue to expand and refine our services and systems to better serve and support those units, there has to be more consistency in what we do.’”

It’s a question that any business with units spread across the country or around the world must answer for itself. Bilt says it’s only getting harder to come up with the right answer because the market and customer needs are constantly evolving.

“So what may have been a focused-enough strategy five years ago is a path to doom five years from now,” Bilt says.

But as the members of Bilt’s team began to wrap their minds around what needed to be done for the company’s 3,800 employees, more than 1,300 affiliated doctors and hygienists, and their patients, they kept coming back to one philosophical belief.

“There’s no one absolutely right answer, but the right answer is one answer,” Bilt says. “If you think that through, it’s not saying my way is better than your way. You don’t have to make that call. You just have to say, ‘Look. We have to decide on one way, which might be a hybrid of models with each of us bringing something to the table.

“‘But what we have to do as a team is decide on one way and pursue that one way and make sure our systems support that one way and our talk and our attitude and everything we do down to our DNA supports that one way of us adding value into the marketplace.’”

Provide the best service

The operational evolution at Smile Brands was a four-year process that included a number of different opinions, ideas and suggestions. But one of the core ideals that the group settled on was finding the best way to harness all the dental skill that existed in the organization in order for customers to receive the best care.

“We used to say let’s just create a cocoon of support around this doctor so they can just be a doctor, period,” Bilt says. “Don’t have any other level of resource for them other than the fact that they get all the freedom to be a doctor.”

The problem with that type of practice in today’s world is it wastes so much potential to share expertise and solve problems.

“Any peer group is going to have some people who excel at one thing and have a lot of experience,” Bilt says. “But if you’re out in the dental office by yourself staring at a problem you haven’t seen before, you say, ‘Oh boy, I’ll figure this out by trial and error,’ which is what you would do 15 years ago. Or you’d pick up the phone and say, ‘Here’s what I’m looking at. What do you think?’”

Bilt felt Smile Brands had the capability and thus needed to make it possible for dentists who encountered these unique problems to be able to connect with a colleague in real time and reach a solution in minutes.

“There’s this opportunity in this digital age to create an incredible peer group in a lonely profession,” Bilt says.

The ability to use technology to solve problems or even for training purposes was just something that was too good to pass up. And the best part, Bilt says, is that the integration of the right technology at Smile Brands would also reduce expenses.

“The customer has somebody who has access to stuff that is so much more powerful,” Bilt says. “That gives the doctor the ability to charge less, which is great for the consumer as well. The combination of doctors being able to be just dentists so that they can see more patients means they have an ability to charge less because they have higher volume, and all the technology helps them lever their cost structure down.”

Stay focused

You get a great idea for your business and everyone is energized to make it happen. It’s at this point where trouble can be lurking.

“We all love that rush of the initial front-end strategy planning and brainstorming session that we all do,” Bilt says. “What we don’t tend to love is the concept of change management and how do you get from here to there?”

It takes work and effort to make a change happen and some of that work can be painful. This can very easily lead to the drifting of attention away from one project that has suddenly become a lot of work to another project that seems so much more fun to talk about.

“You allow another shiny strategic initiative to start while the change management and implementation of the prior one is incomplete,” Bilt says. “You don’t go back and measure whether the first shiny initiative did what it was supposed to do and then you get distracted with the next one and forget about ever measuring the prior one. That cycle can go on for decades. That gets people into a lot of trouble.”

One key to avoiding stress and keeping your organization focused is to let people who have expertise in certain areas apply that skill to get the work done and isolate the flaws before full implementation.

Listen to their needs, their suggestions and their feedback on the best way to implement your new system.

“The docs are our thoroughbreds, and we’re the plow horses,” Bilt says. “If we’re doing it right, the plow horses plow and the thoroughbreds run. That’s really the point of the model. Let them be the thoroughbreds they are and let us plow the fields or build the track. That’s what we’re supposed to do.”

Define what you want to accomplish and get it into a plan that everyone understands and agrees to. Make sure they are aware that while there will be highs and lows along the way, the end goal will make it all worthwhile.

“My role is to help provide some vision for what we’re trying to do,” Bilt says. “What do we hope to accomplish? I try to provide support for people executing it so that they can do it properly to make sure the phases are properly led, staffed and resourced to have some level of establishing accountability for the results of each phase.”

Be a good communicator

Another major step in the transformation of Smile Brands was figuring out how to roll out the changes at each of the 400 locations. Who goes first? Who needs the upgrade most? Which locations will be the hardest to change?

Bilt says there’s no perfect way to roll out a big change. But he says communication is always the key to making it work.

“Most people are less attached to the outcome that they want in terms of where they are in the order of priority than they are in understanding why you made the decision you made,” Bilt says. “I love to know why you’re doing what you’re doing. That shows respect for me. Then I want to know how I’m impacted. Are you getting to me and if you are, when? What should I expect?”

Bilt poses a scenario in which somebody might feel strongly that his or her location should be the first to be upgraded because it is the company’s most profitable unit.

“You could say, ‘You know what, I agree with you,’” Bilt says. “‘That’s why you’re going last. You are the best market. You want to go first because you’re the best. I’m saying you go last because I’m not going to mess with you. I can’t afford it and it’s too risky.

“‘So I’m going to the worst market because if we screw it up, it costs us the least.’ We could have the exact same rationale and the exact opposite conclusion.”

Explain to people your thought process behind the implementation of change and they’ll be much more likely to be onboard with you.

“You have to do it multiple ways,” Bilt says. “I always say the rule of three when it comes to communication. If you have a new concept or an important concept, you better give it three passes to get it communicated because there is always a gap between what we think we’re saying and what people are hearing.

“It just takes multiple passes to get it right and allow them to process it and understand it.”

As Bilt looks back on the process, he says there are always things that could have been done better.

“Everything is a journey,” Bilt says. “So how did we go along that journey and how did we carry ourselves and how did we perform and how did we pick ourselves up and dust ourselves off when it got tougher than it was supposed to get? Those are the stories that make a career.”

How to reach: Smile Brands Group Inc., (714) 668-1300 or www.smilebrands.com

The Bilt File

Steve Bilt

co-founder, president and CEO

Smile Brands Group Inc.

Born: New York City

What was your very first job?

Delivering The Denver Post in the snow. Back then, it was a crazy job for a kid. You took capital risk. You had to buy your newspapers from the newspaper. You had to deliver them, collect your own money, then pay back your cost of the newspapers and you kept your margin. So if a grumpy old neighbor didn’t want to pay for the paper, it was the 13-year-old kid losing out and not the newspaper. So I learned a lot of lessons on that job.

Who has been your biggest influence?

I have to give a lot of early credit to my dad. He helped me when I was going to fall down too far in the newspaper job by helping me fold the Sunday paper or pull the cart through the snow when it was too deep to physically move it. He did help with that job to make sure I had some success or at least got that job done.

The other thing is he was really good about not knowing all the answers to the stuff he was dealing with in business. He’d actually bring up a lot of the questions he was facing at the dinner table and let me opine.

I got this notion that a business is a living, breathing thing that had to be managed and cared for and fed. It was very formative from that perspective to be able to hear and listen and participate in some of those conversations about what makes a business go and how does it go and how do you do it and how do you care for it?

Takeaways

Don’t try to do it all.

Communicate at every turn.

Finish the job.

Bruce Leon needed leaders ready to tackle any challenge that Tandem HR might face

Bruce Leon, president, Tandem HR

Bruce Leon, president, Tandem HR

Bruce Leon has seen managers who work 12 to 13 hours every day who are not shy about telling others how overworked they are in their job. He’s also looked deeper into the way some of those managers spend their day.

“When you really dive into it, they are doing the same things all the time,” says Leon, president at Tandem HR. “They are dealing with the same sorts of customer issues and complaints.”

Leon tries to encourage managers who find themselves in this predicament to analyze their workday with the goal of getting to the root cause of the problem and coming up with a solution.

“I push them to find the core reason why it’s happening and see if they can get as much done, if not more, and have a regular eight-hour day,” Leon says. “Some of them can’t do it or they are unwilling to admit that there is a better way. They just think it’s a fact of life that they are overwhelmed with work.”

Those who are unwilling to adapt become a big problem for Leon in an industry that is changing by leaps and bounds.

“You can’t make a five-year business plan today with any real comfort that those will be the issues you’ll be dealing with over the next five years,” Leon says. “For many of us, that’s a scary thing not to be able to plan out that far ahead. But I think the critical thing is if you’re able to keep up with those changes, you can have a much better opportunity with customers than those companies that aren’t keeping up with the market.”

And so the key to being one of those companies that can keep up is having leaders who aren’t afraid of change and who see the opportunity in every challenge.

“Are they leaders or are they managers?” Leon says. “I want to know their ability to innovate and I’m really looking to see how much they are proactively looking at change and how much they are reactively looking at change.”

Find your problem solvers

One of the first things Leon wants to see when he’s appraising a leader is proof that he or she is a leader who can get things done.

“You try to find people who have been successful in many aspects of their lives,” Leon says.

“Family, extracurricular activities, philanthropy. What is their involvement? There is no fail-safe method and if there were, we’d all have an easier time of it. But one of the best things you can find is people who can communicate very specifically about how they’ve done leadership things in the past and how they were successful at them. I want specifics and even people I can call to verify it.”

When you’re assessing current leaders, observe how they behave in various situations.

“When a problem arises, they just look for issues where they will perceive to be involved and then quickly exonerate themselves at the expense of throwing other people under the bus,” Leon says. “You see managers who will not let some of their good talent go to other departments, even if it means a promotion to an area where the company really could use them. People who refuse to engage in cross-training and documentation of all the processes they do.”

It takes an effort on your part to get a good read on a person, but it helps you understand which employees you can count on in a tough situation and who doesn’t have what it takes.

“We’re trying to put the right people in place so that we can scale with only having to add lower-level people to build up for the growth,” Leon says. “But I do think the people who are running your company at 30 employees are not always the same people who are going to run it at 130.”

Some of the skills that you look for are a desire to grow, the ability to be self-critical and a willingness to accept constructive criticism.

“It’s the ability to not be threatened by hiring strong people beneath them,” Leon says. “Leaders also have a strong customer service aptitude. They really have a passion for what they do. It’s not a job.”

The ideal leader you are looking for is similar to the manager at Tandem HR who was feeling swamped by his workload and was willing to take an introspective look at what he and his team were doing.

“The ones who are good can step away, get their teams together and go over the core reasons for the problem,” Leon says.

“I had one of them that came up with a call center that has been solving 93 percent of 12 customer issues they were having. It previously took multiple phone calls and voice messages and now we solve issues in eight seconds through the call center. It came about from a manager taking his group out and looking at every customer issue that was coming in and figuring out how they could streamline it.”

Don’t allow silos

Silos are another pitfall for managers. Leaders who feel insecure about their place in the organization often create them.

“People artificially create silos in a way to build their own inner security system or to build a moat around their work,” Leon says. “I think it has to do with egos and peoples’ inability to be open, transparent and willing to share. It’s the perception people feel that if they are the only ones who can do something, they will have job security.”

Having insecure managers in your company is obviously not a good thing. But the bigger problem is created when you have a situation where a leader leaves the company or is unavailable for some reason to deal with an issue related to their department.

“Everybody has to imagine what their job would be like if tomorrow, they were hit by a car and someone else had to step in and do their job for them,” Leon says.

This is not just a mind exercise for Leon, however. He wants a real action plan in place in case such an unfortunate scenario happens.

“I want to see that documented,” Leon says. “I want to see that really existing. I want to see the results of it.”

One of the ways to prevent silos from forming is to occasionally move people around to different areas of your business.

“We switch around a lot of the administrative people in different departments so nobody gets locked into one unit,” Leon says. “It forces people to be cross-trained and it prevents that natural us-versus-them attitude in the company.”

Another step that isn’t always an option for some companies is to put more people under one roof. This was an option at Tandem HR as the company is in the process of consolidating from seven to two locations. The prevention of silos was not the main reason for the move, but it will be one of the benefits when the transition is complete.

“It’s building people to be more non-siloed and building recognition between the family of companies that we have,” Leon says. “We can also streamline shared services. We hope to save a fair amount of money on shared services with the relocation.”

Going forward at Tandem HR, new employees will be given the chance to spend time in different parts of the business.

“Even if they have been brought in as a benefits specialist, they are going to spend some time in payroll or HR or 401(k) or with risk,” Leon says. “They are going to have to learn those units as a new employee.”

The cross training is part of a six-month program where employees learn about other positions as they get up to speed on the job for which they were hired.

“We do monitor their level of competency by their performance,” Leon says. “They take tests along the way as they are learning just so we can gauge how they comprehend the material.”

Check your own ego

As much as Leon works on appraising the leaders in his company, he strongly believes that he needs to fall under the same microscope in terms of how he performs his job as president.

“Many a bad business decision and many a bad leadership decision came from unchecked ego,” Leon says. “Sometimes you have to put people in place, but that can also be you. Every CEO needs their own check.”

The person or people that you ask to judge your performance need to be able to do so with honesty and without concern that negative feedback will be met with hostility.

“Without that, the likelihood that you make ego-related bad decisions or you make bad personnel decisions or you get yourself involved in activities that hurt the company is too great,” Leon says. “It’s a critical point for me personally and one I try to share with CEOs.”

Fortunately for Leon, he seems to have a pretty effective team of leaders, including himself. The company hit $355 million in revenue in 2012 and Leon feels good about the future. But he’s not one to take a lot of the credit for making it happen.

“You have to be thankful every day for having the opportunity you have,” Leon says. “It could change very dramatically tomorrow.”

How to reach: Tandem HR, (630) 928-0510 or
www.tandemhr.com

The Leon File

Bruce Leon

President

Tandem HR

What is the best business lesson you ever learned? Always hire ahead of the curve, both in terms of numbers and talent. There’s more than a 50 percent difference between a $100,000 employee and a $150,000 employee.

As you grow, you need to get better talent and go outside of your budget to get it ahead of time. It’s very difficult to do it after the fact. You often make bad hiring decisions because you’re pressured and then people walk into a situation that’s like a house on fire, which is not a good way to start.

By hiring ahead of the growth curve, it gives you a chance to find the right people, get them trained and not to have the house-on-fire first day. A lot of business people, myself included, say I’m going to wait until I hit those targets or until we get the revenue or our profits are up before we hire that senior level person. Sometimes, it’s too late.

What traits or skills are essential for a leader? Everybody has different leadership styles. For me, my leadership style is that I am very transparent. I admit my mistakes very quickly with my senior executives and let them know they will never get fired here for making a mistake. But they will get fired for withholding information and for not admitting when the mistake happened. I try to lead by example with that all the time.

What’s your definition of success? It’s to know at the end of the day that I did all I could to further the values of this company, and I was able to make an impact in the industry that I serve.

Takeaways

Study your current leaders.

Promote inclusive leadership.

Let people judge your perfromance.

Joe Kuklis: Lobbying for your business

Many CEOs, CFOs, investors and executives do not realize the impact federal, state and local government have on their organization, or the importance of maintaining a comprehensive government affairs strategy as part of their annual business planning process.

As a lobbyist, I act as a professional guide for my clients to a variety of federal, state and local elected officials. When businesses choose to interface with the government, many consider hiring a lobbying professional who can help develop a government affairs plan — just as you would hire an accountant for an Internal Revenue Service audit or a lawyer for a court case.

If you choose to start the process on your own, it is imperative that you determine what you want to accomplish as a business. Do you want to become an eligible vendor with a specific government agency? Are you looking to expand your business or are you seeking public incentives to help you with hiring new employees or training your workforce?

Maybe you just want government “not” to do something that may negatively impact your day-to-day operations. You must identify what it is that you want and be clear about it when meeting with agents of government.

Here are some tips for lobbying the government:

Identify your targets

First, make a list of legislators who could aid in your effort. Start by looking at the local officials who represent you, your business and your business’ employees geographically. They have the greatest reason for supporting your requests. They want to see your business succeed and hire more of their constituents as you grow, so they should be your Tier 1 targets.

Your Tier 2 targets should include legislators who are on the committees that have oversight of your issues, legislators who are in leadership positions and who may have a little more political gravity than most, and legislators who have expressed a public interest in your activities.

These champions will help augment your efforts with letters of support, calls into agencies to help arrange meetings, and inquiries to secretaries and agency directors when you are not getting the answers you want from government.

Arrange a meeting

Once you have a meeting with a legislator, arrive prepared and practiced. Usually, meetings only last between 10 and 20 minutes, so make sure you and your group are aware of the issues you need to cover and stick to them. Know your facts.

However, if a legislator or their staff asks a question for which you do not have the answer, don’t make something up on the fly. Take note of it and get back to them. And, if a legislator challenges you on something, answer the question honestly, but not argumentatively.

Know who you are meeting with, their goals and where they stand on the issues before your meeting.

For example, not all legislators support drilling for Marcellus Shale gas and if you are a driller walking into their office, you may be in for a hard time. Make sure your requests are realistic for each of your visits and always remain professional.

Lobbying is a contact sport. The more you contact a legislator and develop a rapport with them, the more inclined they will be to help. Realize that in doing this you are not working alone.

At the end of the day, the lobbying industry acts as a forum for conflict resolution among divergent interests. Whether you decided to go it alone, or hire a firm, know that an honest, succinct, positive and respectful approach will be effective. And remember that a successful lobbying effort takes time, resources and preparation.

 

Joe Kuklis is a political lobbyist and head of Duane Morris Government Strategies. He has built a successful career lobbying for organizations and businesses of all sizes and has helped raise $500 million for clients ranging from Fortune 500 corporations to one-person startups. His book, “The Robin Hood of D.C.,” is an insider’s guide to the government marketplace for small, mid-sized and large businesses. Visit www.robinhoodofdc.com for more information.

How Lyndon Faulkner repositioned his team at Pelican Products for a new opportunity

Lyndon Faulkner, president and CEO, Pelican Products Inc.

Lyndon Faulkner, president and CEO, Pelican Products Inc.

As one company after another made dramatic spending cuts in response to the recession five years ago, Pelican Products Inc. found itself headed in the opposite direction.

It was December 2008 and Pelican had acquired its nearest competitor, Hardigg Industries, doubling its size to become the largest manufacturer of equipment protection cases in the world. Life was good at Pelican, but Lyndon Faulkner knew it couldn’t last.

“We always expected the growth rate to moderate because you couldn’t keep growing at those figures every year,” says Faulkner, the 1,300-employee company’s president and CEO.

The moderation began about two years later and unfolded more quickly than anyone had expected.

Government and military spending was a big part of Pelican’s business and a key factor in the company’s dramatic growth. It was obviously great news from a human perspective that the U.S. began to scale down its involvement in Iraq and Afghanistan. But it was trouble for Pelican’s military business, which was shrinking fast.

“It was happening bigger than we ever thought it would and over a longer sustained period than we thought it would,” Faulkner says. “These were things that instead of being in control of them, we would have to react to them.”

Faulkner gathered his leadership team to come up with an appropriate response.

“Managing the implications of a big portion of business going into decline behind five years of growth was something we had to work on with management and leadership,” Faulkner says. “It’s everything associated with that. It’s the emotion and management of those dynamics within a business that affects everybody.”

The effort to diversify the business was to some degree already underway. But as the decline in military spending continued to accelerate, the urgency to achieve more diversity became that much greater.

Develop an action plan

Faulkner gathered his leadership team and opened a frank discussion to get everyone on the same page with both the problem and the options the company had to fix it.

“You have to get what’s happening to the company out on the table to its fullest so you’re able to recognize the impact of the problem,” Faulkner says.

“It was nobody’s fault. It wasn’t a bad plan or something that we were doing badly from an implementation perspective. It was something nobody could have done anything about.”

You can prepare and hold meetings and draw up strategic roadmaps every week. But the reality is at some point, you’re going to face a situation that you didn’t see coming.

“Things are going to happen,” Faulkner says. “Being in control of the things you can be is all fine, well and good. But you need to make sure you are doing all the preparation you can around the things in your control and make sure that you are reacting properly to things that are not in your control.”

When it comes to dealing with things not in your control, such as what had transpired at Pelican, you need to make sure your people view these issues as opportunities filled with potential rather than challenges fraught with risk.

“You just sit down and discuss the problem and you discuss the impact of the problem versus just burying your head in the sand about it,” Faulkner says. “Find the opportunity. I wouldn’t say give up on the business because it was still a very important business stream to us. But accelerate your thinking on how we could offset the decline in that business.”

The pursuit of new product segments was clearly the way to go.

But Faulkner needed to bring structure to the conversation so that his team didn’t stray from what Pelican does best. This can become a challenge for companies as you try to toe the line between branching out into new areas and reaching beyond your ability to do it well.

“We understand our protective cases are used in the transportation of things in the military and with first responders, things of that nature,” Faulkner says. “But then we look at things like medical devices. We realize in the medical device business, they are shipping products that could easily have been converted to Pelican-type products because we have a better product for moving their devices around and the transportation of them.”

Another potential market to expand into was consumer electronics. There was great opportunity, but also great risk for Pelican in this space.

“We were able to bring out a product for the iPhone 5 that has all the DNA of Pelican,” Faulkner says. “It carries protection, it looks good, it’s well-known, it’s well-made. You can drop a product with it, and it’s going to protect the product. That would be true to our brand and that’s what people expect from us.

“However, bringing out a protective case with a million shiny beads on it or something with ‘Hello Kitty’ would not be true to our brand and would not be what Pelican is all about. So in that scenario, that’s a classic way we drew the line.”

Pelican understood that its customers look to the company for protective products, not ones with lots of bling.

Lend a helping hand

The next step in the Pelican transition was the people side of the business. When you’ve been doing one thing and you’ve done it well, it’s not always easy to put a stop to it and tell those people that they now need to start doing something else.

“A lot of the people who were working on the military stuff did not have the skill set or muscles for the consumer market,” Faulkner says. “So what we’ve done there is we were able to move some of the military guys to the commercial space, industrial and things like that.

“Safety markets and first responders were not an issue for them. But as it relates to starting the new businesses up, we had to do that with a lot of new people or people who we brought on board from the business sector. They just speak a different language.”

It’s a clear illustration of why so much thought needs to go into making changes in your business. You can sit in your office and think about how easy it would be to start selling this widget when you’ve already been making that one. But it’s usually not as easy to make the change in actual practice.

“We’re finding the work we have to do for the consumer business — marketing, selling, product development, bringing products to market — it does have a very different clock speed and language than what Pelican has had before,” Faulkner says.

When you decide you want to expand your business in a certain direction, it’s your responsibility to get people the training they need.

“That’s part of your schedule,” Faulkner says. “I don’t think you’re busy and then you have to do that on top. Part of your busy schedule is to make sure you’re working with people so they are developing themselves. That’s just a basic fundamental of what I’m here to do and recognize if they don’t have the runway for that growth.”

At Pelican, this meant creating shadowing opportunities for people who wanted to be part of the new organization.

“So we had sales people, people who sold to the military extensively who have now gone out and shadowed people in the commercial space,” Faulkner says. “Most people have learned their trade by going to work with somebody in the other divisions.”

Strive to be the best

One of the lessons learned going forward was the need to hire individuals with more diverse skill sets and to make sure training is ongoing to develop more skills in the people already onboard at Pelican.

“If I’m a guy and all I’ve been doing my whole life is building products that can be dropped out of a helicopter and now I’m being told I’ve got to build great products, but they don’t have to be dropped out of helicopters anymore,” Faulkner says. “and if I make a case for that market that is made to be dropped out of a helicopter, it won’t sell.

“It’s something you have to instill and educate and teach because it’s not the way they’ve been working. It doesn’t mean that they can’t work that way. It just means they haven’t been asked to work that way.”

Regardless of what Pelican does, Faulkner says his expectation will never change. He wants it to be the best.

“People say what sort of company are you,” Faulkner says. “Are you a product company? Are you a sales company? Are you a marketing company? Are you a technology company? Are you driven more by operations, technology or finance? When we look at the different disciplines of the business, we charge our guys, the heads of each department, with being world class in everything.

“If we’re good in sales and product and marketing, we don’t expect our operations guy to just be there for the ride,” Faulkner says. “We expect our operations guy to have his own plans for being best in class in operations. What you’re doing is building the best in breed in everything. That’s what really floats the performance of the company.”

How to reach: Pelican Products Inc., (800) 473-5422 or www.pelican.com

The Faulkner File

Born: Newport, Wales. I was born at the Celtic Manor Resort, which is where they played the last Ryder Cup.

What was your very first job?

My very first jobs were a paper route and milk rounds. They used to deliver milk in those days in the U.K. and you would earn extra money by helping the milkman deliver milk. My first real job was coming out of school when I worked on construction in the summer months. It was making tea, doing errands and driving the dump truck around. But it was primarily making coffee and tea for everybody.

Who has been your biggest influence?

It starts at home with your parenting and your upbringing. I had parents and brothers and sisters who were very aspirational in trying to do better and do more. I had parents that instilled hard work in us all. None of us were frightened of going out and working hard and making things happen for ourselves instead of hoping things would happen.

How does competitiveness in sports compare to business?

In team sports, you have to have everybody pulling together and you can’t have a lot of people pulling in the wrong direction or in a different direction. That goes with attitude as well. You want everybody of a similar attitude and a similar style working with each other to help each other out. That’s a style I like to see instilled in a business. That breeds success.

Takeaways:

Focus on the opportunity.

Give people the right tools.

Always strive to be the best.

Former franchisee turned franchisor, Wan Kim reinvigorates Smoothie King as CEO

Wan Kim, Global CEO, Smoothie King Franchises Inc.

Wan Kim, Global CEO, Smoothie King Franchises Inc.

Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.

In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.

Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.

“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”

Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.

“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”

Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.

Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.

Understand all areas of your business

Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.

“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”

Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.

“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.

“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”

While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.

“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.

“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”

Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.

“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”

Prepare for growth mode

Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.

“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”

Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.

“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”

When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.

“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”

The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.

“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”

One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.

“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”

Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.

“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”

How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com

Paul Hammes – Five tips for a successful divestment strategy

Paul Hammes, Divestiture Advisory Services Leader for Transaction Advisory Services, EY

Paul Hammes, Divestiture Advisory Services Leader for Transaction Advisory Services, EY

Companies taking a “wait-and-see” approach to deal-making as economic uncertainty persists may be missing out on growth and value opportunities.

Many companies have looked to divestments to offset cash and credit challenges and to free up capital to drive growth. But this short-term thinking is shifting as companies plan for the long term and take a more strategic approach to divesting.

In a recent EY divestment study that surveyed almost 600 executives, 77 percent said they planned to accelerate divestments within the next two years, and 46 percent are planning to divest in the same time frame. As companies signal an increased appetite for divestitures, it’s important they understand and implement the appropriate steps to achieve greater value for shareholders.

Evidence from our study, combined with our work with clients, has shown that there are five leading practices that companies should follow in order to execute a successful divestment:

Conduct rigorous and regular portfolio management

Review your portfolio regularly. Companies can assess whether assets are contributing to strategic goals or if capital can be better used for other purposes.

Companies that use divestments as a strategic tool to enhance shareholder value or focus on core business strategies, rather than considering them as a reactive move to free up cash or pay down debt, tend to improve their divestment results.

Consider the full range of potential buyers

There is an intense amount of competition from buyers today for good, high-quality assets and they’re ready to transact. Appealing to a broad group of buyers can garner a price that exceeds expectations.

Companies should think about the buyer universe for a potential asset sale differently than they might have in the past, considering potential foreign buyers, buyers within different sectors and private equity firms. Each buyer may have different information needs that require a different planning process.

Articulate a compelling value and growth story

Sellers should provide tailored information about how an asset fits with the buyer’s business to help achieve strategic objectives. Develop an M&A plan for the asset or provide a view of synergy opportunities to buyers.

Prepare rigorously

Effective ongoing preparation can instill buyer confidence. As a result, companies can better control the process and realize greater speed and value. Half of the executives surveyed admit that certain changes to the preparation process could have made a significant difference during divestment.

Understand the importance of separation planning

Probably the most crucial aspect of a divestment is separation planning, yet 56 percent of respondents identified a clear separation road map as the most complex part of the divestment.

Other separation challenges include decisions regarding the completion mechanism, tax planning, estimating stand-alone costs and negotiating transition services agreements.

Every day a company waits to evaluate its capital strategy, someone else is making a change and gaining an advantage.

In heeding these five key practices, companies can take a more strategic and ultimately successful approach to divestments to ensure they get the most value possible and grow the bottom line.

Paul Hammes is the Divestiture Advisory Services Leader for Transaction Advisory Services at EY. Reach him at www.ey.com.