Team building: find the GLUE that binds your team

Danny checks his email and finds a message advising him that he is the new team leader for the Alpha project. The email goes on to say that “during your time at this company, we believe you have shown the skills needed for success as a leader.” He immediately hits panic mode because his dream has come true — but he’s not quite sure he is ready to lead.

He has always been successful in completing the tasks assigned and he knows his business like the back of his hand, but he does not know where to begin as the top dog. The process of leading a team is about communication and organization.

Initially, you must determine the course of action based on all that you know about your industry and the project that has been assigned to you. Then, begin by outlining a plan to complete the task with success. When you have completed your outline for the plan of attack — and you can present it with confidence — you are ready to face the team. It is confidence and preparedness that allows them to buy in to you as the team leader.

Once you have amassed and organized the knowledge you possess in your industry, leadership is about finding the glue that binds your team together.

Let’s look at the GLUE.

Gather Team Information

Listen to the Team

Unify the Team

Empower and Execute.

Gather information about the team members and their backgrounds and skill sets. Sometimes that information is available within the organization. Other times you are fortunate enough to know your team members.

No matter how you acquire the information, learn what you can about what the players have done on other teams or within the company at large. This background information is essential as a basis upon which you will build the infrastructure of your team.

Now keep in mind: People change. Therefore, this collected information will be subject to modification and change as you watch the team come together during the life of the project. The initial information should be reviewed and analyzed as much is you analyze the project itself.

If the information you are gathering is subjective: consider the source. Depending on who provided the information, it may or may not be accurate. Ultimately, it is in the next phase — as you listen to your team members and learn — that you will begin to determine the strengths and weaknesses of your team in reality.

Listen to their concerns and knowledge to determine their ability to understand and comprehend. As you do so, the several types of players will surface. Listen closely to the comments and thoughts of your team. The way they speak and address the situation at hand will give you great insight into the type of team member they will become.

As each team member speaks or reacts to your plan, you must balance their words and actions against the information that you have gathered about their backgrounds and with the plan that you wish to implement.

Team members will all individually bring positive skillsets to the table. Pay attention to those who will be constructive team members and aggressive participants as well as those with initiative who will lead their portion of the project with excitement. You may find that one person is an expert in the subject matter at hand while another is an expert in organization.

As you determine the place in your machine for each of the players, you will want to make sure that you speak to the expertise of the individuals so that they feel that you are speaking directly to them. For instance, when you were speaking of technical elements, you will want to look directly to your technician.

On the other hand, while you are mapping out the course of action, you may want to begin with and acknowledge that you recognize a specific individual’s organizational skills, and indicate that you trust them with keeping the task on course. If someone is questioning every action you take, give that person value by letting them know that they are beneficially keeping you on your toes. This will give that person value as your conscience.

Unify them by finding a common thread, or by creating one that they can commit to. Once you have identified the type of team members you are managing, you will want to present the project and the individual tasks in a format that speaks to the specific skillsets of the individual members.

Create unity by making it clear that they are all essential and necessary members of your team.  Help them understand that they are working for the common good of the team and the organization, and let them know that their relationship to each other is vital for success. If they can understand how they fit into the big picture — and how the project fits into the big picture of the organization — they will be more likely to feel like a part of the solution.

Empower the team to execute the plan with dedication and passion. Make the path ahead clear. Allow them to understand the stages of development as your project progresses. Give them feedback as you move along the way, and be ready and willing to step in and assist with mediation if conflict or hostility begins.

By allowing the team to clearly visualize the direction upon which they are embarking, execution will become more fluid and guaranteed. Always keep an open line of communication with all team members in a transparent and open fashion so that you will minimize the risk of competition for control.

With his plan outlined, and with a firm grasp on who his team members will be, Danny can walk into the conference room with all the information he could gather. He can now pay attention to the team members and listen carefully so that he can unify and empower them. He has the GLUE to bind his team. He must now put the plan in motion as he fosters the all for one and one for all mindset.

Joe Curcillo, The Mindshark, is a speaker, entertainer, lawyer and communications expert. As an adjunct professor at Widener University School of Law, he developed a hands-on course, based on the use of storytelling as a persuasive weapon. He has been a professional entertainer helping corporations and associations improve their communication techniques since 1979. For more information, visit   

Using humor to make a point or soothe a wound — In some cases, it’s better to have people laugh at you, instead of with you

We’ve all heard the saying that laughter is the best medicine. Humor can be an effective tool to help people cope, to relieve stress in business situations and even as a technique to emphasis the importance of a key topic of discussion.

Many politicians and executives, too, are especially adept at using humor to deflect criticism. Over a century ago the father of psychoanalysis, Dr. Sigmund Freud, lectured that humor provided an effective way for dealing with life’s stresses.

Business leaders don’t have to be stand-up comics to use humor effectively to underscore serious points that will be remembered. A bit of levity is a good icebreaker to lighten up audiences, making them more receptive to the message, and a few tasteful quips can make the difference in a presentation from people tuning out to intently tuning in.

Much of the best humor in business talks is not scripted, but instead spontaneous and plays off of any number of factors, from the environment in which one is speaking to the refreshments being served to even the subject, itself.

A leader can learn to take advantage of the opportunity by first being a good observer and listener and sensing the mood of those to whom he is speaking.

Frequently, when a business project hasn’t turned out quite as expected or resulted in an utter disaster, everyone involved is not only downtrodden and disheartened but also feels as if the worst is yet to come. This is when a sensitive leader can take control and change the dynamics of a meeting without minimizing the negatives that have occurred.


Being able to be self-deprecating, particularly when one is known as a buttoned-up executive who is all business, not only shows one’s human side, but also projects leadership, which in a difficult situation, is what everyone is looking for.

As an example, when explaining a failure, the speaker could make himself the butt of his wn humor by stating something such as, “Your company’s leadership in its infinite wisdom chose to do X or Y and wound up taking the wrong fork in the road. I just hope someone doesn’t try to put a fork in me.”

It takes broad shoulders to be a leader, and humor used at the right time and place can lighten the load for all involved.

Healing takes its own speed

The age-old saying is “sticks and stones will break bones but words will never hurt.” That simply is not true. The wrong words do hurt and can demoralize a team.

However, serious words and thoughts packaged with a dose of humor will not only help get everyone’s attention, but also serve as an elixir to soothe those inevitable hurts that every organization experiences from time to time.

Healing is a process and takes time. Letting a team know about whatever mishap has occurred is not the end of the world. A few chuckles can help everyone to move past a failure. Giving others something to laugh at will enable the leader to laugh the loudest.

Michael Feuer co-founded OfficeMax in 1988, with $20,000. During a 16-year span as CEO, he grew the company to 1,000 stores worldwide with sales of $5 billion.

How training dogs can hone management skills

Every interaction that you have with your dog trains it in some way, whether you mean to or not. Training your dog properly requires that you serve intentionally and skillfully as its leader.

Just as with the team that you lead in your day job, how well you do depends in large part on the strength of your leadership skills and the only way to strengthen leadership skills is practice, practice, practice, and in the more environments, the better.

Three fundamental leadership skills that are needed in both dog training and in human management are the ability to visualize what to do, the ability to observe and respond to observations, and the ability to motivate intended followers to help carry out the mission. In your role as your dog’s trainer, you have opportunities to exercise each of these three skills in special ways not so often encountered in more traditional leadership positions.

Visualization Skills

In your human management job, you must identify the goals and convey to your team a path to accomplishment. Properly training your dog will require that you first visualize the life that you want with your pet. Your dog depends upon you to visualize and control many more aspects of its life than should ever be the case with people in the workplace. This presents a stretch for most managers beyond issues that they typically consider in their workplace roles.

What kind of social behaviors do you want? Do you want competitive athletic prowess or a gentle cooperative demeanor? What kind of environment is best for your dog’s safety, comfort, and happiness? How will you ensure that you are providing the many things that your dog needs from you along the way? While these important questions are not the usual ones in many workplaces, thinking broadly about the many aspects of your leadership roles is always a healthy exercise.

Observation Skills

The role of a typical manager entails observing and responding appropriately. To do this, a leader needs the ability to understand and consider followers’ views of shared observations when formulating responses.

While it can be difficult enough to understand how your human followers think about some things, the different natural wiring of your dog’s mind requires stretching even more to see things from its viewpoint. By becoming more aware of the need to consider your follower’s point of view and by actually doing so in your daily leadership endeavors, you will become a more effective manager.

Motivational Skills

An ability to motivate your followers is of paramount importance to achieving leadership objectives in either venue. It requires understanding rewards and reprimands from your follower’s unique perspective and tailoring your use of these consequences accordingly. Dog training will require that you develop new systems of rewards and reprimands quite unlike those that you might use with the humans who report to you.

Regardless of whom you are leading, it is always a good practice to customize how you reward or reprimand each individual particular follower that you wish to influence.

Beyond just motivating a certain behavior, your ultimate goal is to get your followers to want to do whatever it is that you ask them to do. This level of “self-motivation” comes from instilling an expectation in your follower that doing what you want always produces the most rewarding results.

Providing frequent and consistent feedback such as is necessary in dog training is the best way to build that expectation. Practice doing so with your dog often and then take your improved motivational skills to the office.

Douglas C. Morgan is recently retired after working as president and CEO of XBC Inc. for 14 years. Most of his experience is in the information technology field working for large-scale companies with multi-million/billion dollar annual revenues. He has also spent many years raising and training dogs of many varieties. He currently works as an author and loves spending time with his canine companions in San Francisco.


Stay on top of your company’s key real estate needs and obligations

Business owners must balance numerous responsibilities to ensure their company is operating at peak efficiency. Real estate is an obligation that often falls on the priority list in favor of more pressing concerns. But when it’s put off for too long, it can cause problems, says Bill Saltzman, SIOR, CCIM, executive vice president and director of office services at Cushman & Wakefield/CRESCO Real Estate.

“When real estate is not your core business, it’s often viewed simply as a place to house your company,” he says. “But you need to craft a plan so that both you and the key leaders in your organization understand how real estate supports your core business.”

Smart Business spoke with Saltzman about managing your company’s real estate obligations.

Where do business leaders get themselves into trouble with real estate matters?

Today businesses seek to do more with fewer people, so down time is exceedingly rare. When it comes to real estate concerns, it is critical to allow enough time to plan and evaluate all of the important issues. As a tenant, you are well-advised to begin the review process with sufficient lead time. Otherwise, you run the risk of making this important decision in a vacuum or under duress. Leases often contain a holdover provision. Generally, upon lease expiration, the tenant may only remain in the premises on a month-to-month basis, and the rent can double. If you don’t go about making these decisions in a methodical and organized process, you can certainly run into trouble.

How do you develop a methodical process?

Make sure you know the commencement date and the expiration date of your lease. Develop a schedule as to when you’ll sit down with your internal team to evaluate your needs. In most companies, multiple parties need to weigh in on this process. For example, the CFO is looking at your space and lease terms from a financial perspective. Human resources may view real estate needs from the perspective of attraction and retention of employees. And the CEO may focus on corporate image and branding and will try to assess real property in the context of what the competition is doing.

It’s important to determine how decisions are made. Make sure there is consensus in terms of the role real estate plays within your organization and specific goals and objectives to be considered in any expansion or relocation. Once these basic discussions are completed, seek the advice of a professional to guide you and your team with issues such as timeline, budget, market conditions, economic incentives and needs analysis.

What motivates a business to evaluate its real estate options?

One approach is to break these options down into qualitative and quantitative factors. Qualitative is about attracting and retaining top talent. It’s the building’s proximity to a skilled workforce and the demographic you seek. You also look at amenities, signage, parking availability and cost, and access to public transportation as well as the benefits of the property itself.

Does it have required technology, acceptable views, food service, fitness or other amenities that are important to you? How well is the building maintained? Is it a comfortable place to do business? Quantitative is the value proposition. This is not just rent, but total occupancy cost, a combination of the rent, utility expenses, space utilization and efficiency, tenant improvements and other elements that make up what is paid on an annualized basis. What are you getting for your occupancy dollar?

How do you know if your occupancy cost is too high?

Total occupancy cost depends upon a number of factors including, but not limited to, the type of lease agreement between the parties, the effective rate (which is calculated after taking into account incentives, abatement etc.), escalation expense ‘pass-throughs’ and amortization of tenant improvements. With the assistance of a tenant advocate to provide you with detailed market information about trends and the occupancy cost of comparable properties, you should obtain a solid perspective of your cost on an ‘apples-to-apples’ NPV basis to determine whether or not you are paying too much.

Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate.

The melting ice cube syndrome: the clock can be your friend or enemy

No, I have not made a new discovery in chemistry/physics. Nor is the syndrome in this headline a medical finding that will lead to yet another worldwide woe. Instead, the melting ice cube condition affects every business at some point.

Organizations have a limited amount of time to solve problems or take advantage of opportunities, and the second hand on every clock is always moving. Almost every major sport except baseball must deal with that melting ice cube as well in the form of a ticking clock.

When a team is winning, it works to turn up the heat to exhaust the time and quickly melt the ice cube so that the opponent can’t score. If a team is losing, it must take advantage of every second in order to score again or create a freezing effect to slow the process.

Decide not to decide

Sometimes with a particularly serious problem, time can be a powerful tool because rather than taking action, it is better to move into a watch-and-wait mode. Often the best decision is no decision and coming to that conclusion takes evaluation, highly educated guesses and even a bit of luck.

Too many times, we spring into action and wind up doing more harm than good. Conversely, at other times we wait and hope, and the problem escalates into a disaster because of its exponential effects.

Frequently it seems we can’t win for losing and no matter which way we turn, we have issues. So what’s the best solution?

Effectively using a risk/reward inventory can point us in the right direction to improve the odds of choosing the best course of action. Many also call this an upside/downside assessment. In its simplest form, it’s really taking the time to make the effort to stop, think, research and then formulate a plan before pulling the trigger. As they say, haste makes waste, but a “do nothing” strategy can also work against you.

A leader must train his or her team to utilize a disciplined evaluation process on just about anything that is out of the norm, any matter in which making the wrong decision could prove costly or painful.

Make a work sheet

This can be facilitated by creating your own simple work sheet whereby on the left side you list the course of actions that you might take and on the right side you make your assessment using a 1 to 10 numeric gauge, with the lowest numbers indicating unlikely to help and a 10 indicating the best shot at working.

When you’re done, you eliminate those low numbered actions, as an example, any with a rating of 4 or less. You then focus on the remaining actions scored five or higher which are most likely to be effective, and don’t exceed your threshold of pain. This thoughtful and disciplined process simply improves the odds in your favor both when solving problems or jump-starting opportunities.

The clock can be your friend or your enemy; you just need to learn how to estimate what can be accomplished in the amount of time remaining before the ice cube melts and evaporates forever.

How to tailor trusts to meet your needs and care for beneficiaries

Susan L. Nelson, CTFA, senior trust executive, senior vice president, First Commonwealth Advisors

Susan L. Nelson, CTFA, senior trust executive, senior vice president, First Commonwealth Advisors

Whether you are looking to manage your own assets, control how your assets are distributed after your death, plan for incapacity or enable your business to continue uninterrupted should something happen to you, trusts can help you accomplish your estate planning goals. By establishing a trust, you ensure that the assets gathered during your life will not disappear because of the inexperience or inability of beneficiaries. A byproduct of that is the peace of mind that comes from knowing your loved ones will continue to be financially protected.

“One of the benefits of a trust is that it’s established based on the unique needs and objectives of the individual and the individual’s family, and tailored to meet those needs,” says Susan L. Nelson, CTFA, Senior Trust Executive and Senior Vice President at First Commonwealth Advisors.

Smart Business spoke with Nelson about the benefits and management of trusts.

What are the different types of trusts?

There are many types of trusts, the most basic being the revocable and irrevocable.  The type of trust you use will depend on what you are trying to accomplish. A revocable trust, often referred to as a living trust, allows the individual establishing the trust to remain in control of the assets and allows them to change the beneficiary, the trustee, the trust terms and even end the trust. The grantor can use the trust for investment management, bill paying, tax planning and avoidance of probate. It can continue on in the event of incapacity, providing seamless financial management for the grantor, and can continue on after death for the benefit of others. Once the grantor dies, the trust becomes irrevocable.

An irrevocable trust is where the grantor gives complete control to an independent trustee who manages the assets for the grantor and beneficiaries. You cannot easily change or revoke this type of trust. It’s frequently used to minimize potential estate taxes by reducing the taxable estate of the grantor because the assets transferred to this trust, plus any future appreciation, are removed from the grantor’s gross estate. Additionally, property transferred through an irrevocable trust will avoid probate and may be protected from future creditors.

What are the benefits of trusts?

Some benefits are:

  • Continuous financial management in the event of incapacity.
  • Professional investment management.
  • Financial privacy — a trust isn’t public like a will.
  • Probate avoidance with no lapse in asset protection and investments — probate can take a year or more, depending on the complexity.
  • Asset management for inheritances.
  • Creditor protection for heirs. If a beneficiary is going through bankruptcy, money in the trust cannot be touched.

Trusts can provide lifetime financial protection for a surviving spouse or disabled child, an inheritance for children from an earlier marriage, can minimize estate taxes and provide a future legacy for charity. Trusts can be used in order to protect, preserve and transfer wealth for the benefit of individuals, families and organizations. While trusts can be used for myriad circumstances, they are not for everyone. Discuss the advantages and benefits of a trust for your situation with a financial adviser.

How should a trust be managed?

Every trust is based on your needs and objectives. When setting up the trust, determine what you’re trying to accomplish so you and your financial adviser can decide how to reach those objectives. One of the first things looked at are tax implications and how to reduce pain points. Providing for future beneficiaries should also be examined. After the trust is established, you’ll need to meet periodically to discuss the investment portfolio and life changes to be certain the trust still meets your needs.

Why choose a professional trustee?

Institutional fiduciaries are pros at what they do, have professionals on staff with years of experience, and are on the cutting edge of regulatory and tax law changes.  They may be the best option for reliability, experience, responsiveness, neutrality and arms-length objectivity with beneficiaries, objective investment guidance, convenience and consistency over time. An institutional fiduciary doesn’t age or die.

Susan L. Nelson, CTFA, is a senior trust executive and senior vice president at First Commonwealth Advisors. Reach her at (724) 832-6062 or [email protected]

Follow up: To learn more, call (855) ASK-4-FCA, or visit


Insights Wealth Management is brought to you by First Commonwealth Bank

How private companies can limit exposure to lawsuits related to management

Peter Bern, CEO, Leverity Insurance Group

Peter Bern, CEO, Leverity Insurance Group

Publicly held companies generally receive greater media attention about scrutiny from shareholders and government regulators than private companies, but that doesn’t mean that private companies are immune to lawsuits regarding management activities that can disrupt operations and create a financial burden for the business.

“People think that privately held businesses and nonprofits do not have much exposure. The reality is that there are many lawsuits that are brought by shareholders, employees, regulatory agencies, competitors and customers that are not covered by general liability insurance. Only a directors and officers policy can provide coverage for an actual or alleged wrongful act, breach of duty or mismanagement,” says Peter Bern, CEO of Leverity Insurance Group.

Smart Business spoke with Bern about the risks private companies face and how directors and officers insurance (D&O) can help limit exposure.

What are some potential D&O claims for private companies?

Regardless of your company’s size, the legal cost to defend a director, officer, or employee is substantial, as are the potential penalties that can be personally incurred. Because of the personal liability risk, which is not covered under a personal insurance policy, protecting these key individuals and the entity itself is critical.
Private companies have investors, shareholders, creditors and employees that can bring lawsuits alleging wrongful acts, mismanagement, breach of duty or neglect. Regulatory agencies, suppliers, competitors and customers can also be plaintiffs.

Types of lawsuits include the following:

  • Breach of fiduciary duty, including self-dealing and conflicts of interest.
  • General business mismanagement and bankruptcy.
  • Failure to deliver services.
  • Failure to disclose information.
  • Disclosing materially false or misleading information.
  • Regulatory agency actions and investigations.
  • Merger and acquisition complications and objections.
  • Shareholder derivative actions suits.
  • Freeze-out mergers forcing minority shareholders to sell stock below fair market value.

How can companies determine what coverage they need?

Because there is no standardized policy, it makes it difficult to comparison shop. There are special endorsements or enhancements that can be placed on these policies. It’s a matter of analyzing needs and selecting the necessary limits and coverages accordingly.
Underwriting factors for D&O insurance include company characteristics such as:

  • Age: Companies with less experience and shorter history of effective management are riskier.
  • Industry: Investment banking and securities expose executive management to more risk than those experienced by board members of a small nonprofit.
  • Financial stability: If a company’s finances are unstable, there is a greater chance of becoming insolvent during a lawsuit.
  • Litigation history: Insurers will analyze a company’s history of previous lawsuits and any adverse business developments.

Is D&O coverage becoming more commonplace?

It’s been around for a long time, but it had been very cost prohibitive. Also, directors and officers thought it wasn’t necessary to purchase coverage if the company wasn’t publicly traded. But even nonprofits have exposure. They have volunteers donating time, making decisions and moving money; D&O covers them if there is mismanagement.

Still, many companies are not aware D&O insurance is available. Without D&O coverage, executives are not protected personally — business pursuits are excluded from homeowners insurance.

Whether you’re a privately held, nonprofit or a public company, it is likely that your business can benefit from a D&O liability policy. Since there is no such thing as a ‘standard’ policy, a professional insurance agent is invaluable when purchasing D&O coverage. He or she will understand your organization and can help design a policy that will meet the needs of the directors and officers, shareholders and the entity itself.

Peter Bern is the CEO of Leverity Insurance Group. Reach him at (216) 861-2727 or [email protected]

Keep up on issues that could impact your business at Leverity’s LinkedIn page.


Insights Business Insurance is brought to you by Leverity Insurance Group

How to manage third-party risk

Jim Stempak, principal, Crowe Horwath LLP

Jim Stempak, principal, Crowe Horwath LLP

Failure to assess and plan for risks associated with third parties can be costly. Of the more than 250 executives surveyed by CFO Research Services, 75 percent were harmed by action or inaction of a third party, resulting in financial loss, supply chain issues and data breaches.

“Companies initially think about risks with high-cost providers. But they may have a $10,000 contract with a small marketing or advertising firm that fails to adequately protect their customer information. Their servers get hacked and experience a breach that in turn raises concerns with their customers and brings reputational and financial risk and penalties,” says Jim Stempak, principal at Crowe Horwath LLP.

Smart Business spoke with Stempak about assessing third-party risk and solutions to limit exposure.

What poses third-party management risks?

Relationships that drive the most risks are:

  • Service providers — processing, accounting, computer services, IT, service centers, advertising and marketing, leasing, legal and collections.
  • Supply-side partners — production outsourcing, research and development, material supplies and vendors, and software development providers.
  • Demand-side partners — customers, distributors, franchises and original-equipment manufacturers.
  • Other relationships — alliances, consortiums, joint ventures and investments.

The Japanese tsunami and Hurricane Sandy illustrated this. If something happens to a single-sourced company, what’s the impact on suppliers or business partners?

What are some gaps that expose risk?

A ChainLink Research study found that 70 percent of organizations reported no resilience and risk mitigation standards for service providers. It also noted that risk assessment often focuses on the easiest risks to quantify, such as financial viability and business continuity plans.

With supply-side partners, vendor risk assessments are hampered by a lack of good data and poor visibility into contractor use.

How often should companies conduct risk assessments of third parties?

Risk assessments should be done at least annually for all vendor relationships that are high risk. Those with moderate or low risk can be done on a rotational basis.

In determining high-risk relationships, consider the financial risk penalty if a supplier has a breach. Another risk is reputational, such as a third party compromising private health information found in hospital records. Other high-risk areas are protection of systems and data, and reliability or continuity of operations. Are there contingency plans if a vendor faces a natural disaster or labor strike?

Many organizations don’t address risk management of third-party relationships until a problem arises. Before that happens, establish ownership for the organization’s third-party risk management framework, and responsibility for review and monitoring of individual relationships.

What other solutions address these risks?

First, establish ownership and buy-in, which requires executive leadership and oversight, with clear goals and objectives. Strengthen the overall relationship with the third party. Then evaluate risks by developing a risk profile of the organization that covers financial, integrity and operational issues. This spurs initiatives to audit, inspect, benchmark performance and costs, verify, and gain assurance or attestation.

A third-party risk management program should have:

  • Risk measurement and monitoring.
  • Performance measurement and monitoring.
  • Incident tracking.
  • Evaluation of the value received from the relationship.

This information guides decisions about when and whether to renegotiate an agreement. Success depends on customizing the assessment to the relationship, using automation to streamline the process, and analyzing trends of incidents.

In the CFO Research Services study, less than half of companies had a formal process for assessing and managing third-party risks, and 97 percent said at least one aspect of their third-party risk management should be improved. Businesses do their due diligence when entering contracts but tend to take their eyes off of it once a contract is signed.

Jim Stempak is a principal at Crowe Horwath LLP. Reach him at (214) 777-5203 or [email protected]


Website: Learn more about third-party risk management with a webinar, podcast, white papers and more.


Insights Accounting is brought to you by Crowe Horwath LLP

How comprehensive behavioral health management boosts health, cuts costs

Tom Albert, Manager, Behavioral Health Services, HealthLink

Integrating a comprehensive behavioral health plan into the medical health plan your company sponsors is a win-win. Employees are able to improve their health mentally and physically, and the employer can track cost savings related to direct health care costs and indirect costs through more productive, healthy employees.

“One out of every four adults will experience a mental health disorder in a given year,” says Tom Albert, manager, Behavioral Health Services at HealthLink. “I think few people, in general, realize the rates are that high.”

Smart Business spoke with Albert about how integrating behavioral and medical health allows employers to better coordinate their members’ care.

How do behavioral and medical health impact employers?

The rate of one in four adults experiencing a mental health disorder annually goes even higher for those with chronic medical problems. Furthermore, employees with untreated psychiatric or substance use disorders can be at a higher risk of on-the-job injuries. This can lead to missed time from work, expensive treatment and a decrease in quality of life for the individual.

Absenteeism is not the only concern for employers. Presenteeism, or the loss in productivity of employees who come to work sick, can also be costly for employers. The Institute for Health and Productivity Studies at Cornell University found that depression and other mental health problems are among the illnesses that have the most significant decrease to productivity.

What’s the advantage of integrating behavioral and medical health management?

Ninety-three percent of Americans believe a health care plan should cover behavioral health treatment, according to a National Association of Psychiatric Health Systems survey. Some workplaces don’t cover behavioral health. Other employer groups cover it but carve out the management, which makes it difficult to coordinate care.

Having one organization manage both medical and behavioral health benefits is gaining popularity among employers. With integration, the health plan’s medical and behavioral clinicians collaborate and ensure that individuals and their families have access to care that best meets their needs.

What are the overall goals of utilization and case management for behavioral health?

Utilization management ensures that health plan members have access to the care they need; that care is delivered in the right setting; that the quality of care meets high standards; and that resources are used efficiently in order to help control costs.

Case management involves case managers communicating directly with members and their families to assist them in navigating the health care system; addressing any obstacles to accessing treatment; and empowering members and their families to maintain an optimal level of health and functioning.

Case management helps the member to stay well so he or she doesn’t have to keep using the same services and missing work.

What is the Mental Health Parity Act?

The Mental Health Parity and Addiction Equity Act of 2008 doesn’t mandate that employers of 50 or more employees offer behavioral health coverage, but it does require that if the health plan covers behavioral health services, the financial requirements and treatment limitations are no more restrictive than medical and surgical benefits.

Prior to parity, employer groups often relied on treatment limits to control costs by limiting the number of days in a hospital or the number of visits for outpatient mental health treatment. Parity is good because the limits often were arbitrary, but it does mean the best way to control costs is to ensure care is only approved when medically necessary.

What are the results of formalized behavioral health management and review?

A Milliman case study of a large private manufacturer found a 10 percent reduction in members with chronic medical and psychological conditions saved $1 million annually and another $750,000 from reduced absenteeism, fewer and shorter disabilities, and increased productivity. An effective behavioral health management organization ensures members receive the right treatment in the least restrictive setting, which reduces costs and time missed from work, while improving overall health.

Tom Albert is manager, Behavioral Health Services, at HealthLink. Reach him at (314) 923-6288 or [email protected]

Insights Health Care is brought to you by HealthLink

How Karen Caplan stays focused on leadership at Frieda’s with top-shelf values

Karen Caplan

Karen Caplan, president and CEO, Frieda’s Inc.

As the daughter of her company’s founder, Karen Caplan is a hands-on leader.

That’s a good thing and a bad thing. The good thing is, she has detailed knowledge of everything that happens at Frieda’s Inc., the specialty produce wholesaler she leads as president and CEO.

The bad thing is that knowledge can sometimes draw her into operations-level matters that take time away from matters of strategy and goal setting for the company at large.

At times, it is a challenge for Caplan to simply cruise at 30,000 feet, without the cockpit radio humming to life with a request to dive in for a closer look at a certain project in a given department.

“I’m guessing it’s pretty common for most CEOs, especially if they’re homegrown, as I am,” Caplan says. “It’s so easy for somebody to come in and get you dragged into some detail that you don’t really need to worry about.”

In the more than quarter-century that Caplan has led Frieda’s, which produces revenue in excess of $50 million annually, she has learned how to keep her distance from matters that don’t require her attention by delegating responsibilities, building a sense of mutual trust with her employees and, quite simply, learning to say no.

“I don’t quickly react when someone asks me something or requests I get involved in something,” Caplan says. “Earlier in my career, my knee-jerk reaction was to solve the problem. But I’ve found that’s not the best way to lead a company. I’ve been very vocal throughout the company that I’m not a detail person. I say it to myself; I say it out loud. It’s going to mess things up when you get me involved in the day-to-day stuff.”


Set it down

Caplan’s mother, Frieda Caplan, who now serves as the company’s chairman, founded Frieda’s in 1962. Caplan joined the business in 1977, followed by her sister and COO, Jackie Caplan Wiggins, in 1983. With the business developing into a family affair and Karen taking the reins as president and CEO in 1986, she began to take stock of herself as a leader and how the mother-daughter leadership dynamic at Frieda’s would behave moving forward.

Caplan says the tendencies of her mother and sister initially spurred her to develop boundaries regarding leadership responsibilities. As a young executive, she enrolled in a Dale Carnegie leadership course, which gave her the initial framework for effective delegation.

“My sister and mom are both ‘knee-jerk reaction, everything is urgent, solve it now, do it now’ kind of people,” Caplan says. “I remember taking the course, coming back to work, and I remember saying to them, ‘When you have a really urgent issue, write it down on a piece of paper, set it aside and let it sit there for seven days.

“‘If, after seven days, you look at the paper again and the problem is still a problem, I want you to mention it to me at that point.’ That eliminated 99.9 percent of the issues, right there.”

Caplan also learned to stay away from areas of the company that didn’t overlap her background in sales and marketing. Through trial and error, she quickly learned that if the issue involved pricing or logistics or other areas apart from her background, she was more apt to make a problem worse by getting involved in the matter.

Over time, and through repetition of the message, Caplan has empowered her employees to tell her when she’s complicating matters through her involvement.

“Pricing and logistics are very tactical matters in our business,” she says. “I give direction, but when I get involved any deeper than that, it’s just not a good thing. And my employees know it. Everyone gives me that look that says ‘Karen, stop.’

“I’ve given everyone around me permission to tell me to stop. I feel very strongly that I can’t just have a bunch of ‘Yes, Karen’ people around me. If all you’re going to do is tell me yes, I don’t want you here. I want you to stand up and tell me what is going on. You’re not going to get fired for it. In fact, I’ll actually respect you more.”

Make it cultural

To ensure that the strategy people aren’t dragged into tactical or operations matters, you need a clear organizational structure with a separation of responsibilities. Often, the most effective way to create and maintain a firm organizational structure is to incorporate it into your strategic planning and core values.

If the concepts of personal and team accountability are promoted as part of the culture you live each day, they stand a much greater chance of taking root as foundational principles that everyone in the organization embraces.

“Everybody knows their responsibilities,” Caplan says. “The key is to have a high level of trust with the people you work with.”

Caplan says the best strategic planning processes are often homegrown. Third-party consultants can help you craft your strategy, mission and vision, but if they aren’t leading you in the direction you want to take the business, you’re probably wasting money and time.

“About five or six years ago, I said I was sick of strategic planning and tired of hiring consultants to take me and a group of my high-level people off-site to form a consensus around the company strategy,” Caplan says. “I cannot tell you how many times that did not work.

“So my sister and I decided that we knew what we wanted to accomplish. We worked with our CFO, who is excellent in strategy, and the three of us met for about two hours a week over the span of a few months, creating our company vision, mission and strategy.”

Caplan and her sister centered the company on four key values: personal accountability, service orientation, trust and playing fair.

“Those are what we stand for,” she says. “If you cannot trust the people on your team to do what they’re supposed to do, to go the extra mile and show personal accountability, you have the wrong people on your team. And that is how I feel confident in delegating the tactical issues. There is a very high level of trust in our company. We talk about it every day, and we show it through our actions.”

Hire for trust

Effective delegation requires a sense of trust throughout your organization, and trust needs to develop as a pillar of your culture. But the pillar will crumble if you don’t hire trustworthy people who align with your company’s values.

Finding and hiring those people means putting job candidates through a thorough, exhaustive interview process — particularly for management-level positions. And if you hire people who don’t fit with your culture and values, you need to either find another place for them in the company or send them packing.

“A good mantra is ‘hire slow, fire fast,’” Caplan says. “We spend a lot of time in the hiring process. Our standard is we interview people three different times, by three different people, in three different places. Every time you bring someone back, they look worse. They always look fantastic on the first interview.

“You bring them back, someone else interviews them, and suddenly, they don’t look so fantastic. By the third or fourth interview, you’re probably starting to see the real person. So you don’t get hired at Frieda’s very quickly.”

During the interview process, Caplan and her team don’t want to know just about a candidate’s professional accomplishments. The interview process delves into the candidate’s personal life and personal motivation.

“In interviewing people, you can ask them about why and how they made certain decisions or how they prioritized their life,” she says. “I don’t want to simply talk about someone’s work life. I ask them about their passions in life, about the last book they read, about the things they do on the weekends. That tells me a lot.”

Once a hire is made, the pressure is on to take the raw materials that prompted you to offer the candidate a job and cultivate them in a way that allows you to get the most out of that person. You can plant the best seeds, but they won’t grow without adequate sunlight and water.

“The thing to remember is, your core values can’t be somebody else’s core values,” Caplan says. “They have to be your own. If I didn’t live personal accountability every day, if I wasn’t prepared for all the meetings I’m called to attend, if I didn’t respond to emails quickly, everyone would say, ‘It might be listed as a value, but it doesn’t apply all the time. Karen doesn’t live it.’

“So, whatever you say the company values are, those are the real values. You hire to those values, you live those values, and if someone isn’t living the values, you move them off your team — no matter how wonderful they might be in their position.”

How to reach: Frieda’s Inc., (800) 241-1771


The Caplan file

Fast fact: Frieda’s introduced the kiwi fruit to the U.S. in 1962. The company now distributes more than 600 varieties of fruits, vegetables and specialty food products throughout the country.


What is the best business lesson you’ve learned?


To treat all people with respect. Everyone gets treated the same, regardless of the role they perform in the company. When someone enters the office and I see them, I say good morning to them by name. You have to make sure that no one is anonymous. If you can address your people by name, you’ll have a much higher level of engagement.


Caplan on firing fast: It is never easy to fire someone. That is something else I learned at the Dale Carnegie management course. If you ever aren’t affected when you have to fire someone, you should probably get out of management. But if you are fair, if you have given someone every opportunity to correct their behavior, you can stick by your decision.

I remember with one individual — she hadn’t been with the company long — and I sat her down and said, “You’re not happy, I’m not happy, and we can’t continue this way.” That was pretty straightforward.

You know immediately if someone isn’t a good fit. What happens when you hire someone, within the first week, you know if you’ve made a good hire or bad hire. Every manager, every CEO will tell you the same thing. And if they weren’t what you expected, your gut feeling is to give them more time. We are so ingrained in this country to give everybody every opportunity to correct their behavior. But unfortunately, one week of tolerating becomes one month becomes a year. Soon enough, you have someone who has been on the team for more than a year, and you’re saying to yourself, “I knew they weren’t right for us from the first day on the job.”