Home Sections Archive by category Business Management

Business Management

Business Management

The Forces of Change

“People don’t change unless the pain of not changing becomes greater than the pain of change.” That was one of many observations made by those presenting the latest installment of BusinessWest’s Future Tense series late last month. The more important point made: by the time companies get to that point, it might just be too late to change.

‘Burn the boats.’

That’s supposedly what the Vikings did before entering into battle — a bold indication that there would be absolutely no turning back from a particular course of action — and the phrase has become heard with increasing frequency in boardrooms across this country and in many others.

And Mark Borsari, president of Palmer-based wire-brush manufacturer Sanderson MacLeod, made it one of many phrases (and takeaway strategies) he offered as co-presenter of the latest installment in BusinessWest’s ongoing and appropriately titled Future Tense series.

Borsari shared the podium with Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, and advice not to be afraid to burn the boats was among the many messages they passed along to audience members during a program titled “Change Considerations: An Examination of Lean Process, Market Disruption, and the Future of Your Business.”

The two focused on every phrase within that long title, but especially that one word ‘change.’ Like others who presented in this series before them, they noted that change is coming at business owners at an unprecedented pace and scale. And while there are some changes that cannot be foreseen or remotely planned for — Barrett summoned the example of the city of Westfield, a buggy-whip manufacturing hub that was one of few communities worldwide economically devastated by the invention of the automobile — there are things business owners can and must do.

Over the course of their talk, Barrett and Borsari listed several — from embracing new technology to being ultra-diligent when it comes to investing in it; from watching the horizon for imminent changes to recognizing emerging new trends in workforce skill sets; from embracing lean practices (whatever your business sector), to, yes, being fully prepared to burn the boats when it comes to all or most of the above.

Mark Borsari says his parents used the wet-facecloth method to get him up in the morning

Mark Borsari says his parents used the wet-facecloth method to get him up in the morning, and now he manages his company with the same mindset.

“You need to have confidence in what you’re doing,” said Borsari, noting that many lean initiatives and investments in new technology fail because leadership lacked the confidence to ride out the inevitable early questions and problems that accompany change. “If you’re a leader, stick with it; you have to burn the boats.”

One also has to keep his head out of the sand, he went on, referencing a business he was once in — the making of dentures — to get his points across.

“If you’re a leader, stick with it; you have to burn the boats.”

“That technology had not changed, until about 2004, in 150 years,” he explained. “You’d go to the dentist, the guy would put that big plastic thing with a bunch of goop in your mouth, make an impression, and send it off to a dental laboratory to a dental technician who would, by hand, make teeth; they were getting $120 to $130 a unit on average.”

By 2006 or so, intra-oral scanning had completely changed the landscape, he said, adding that a milling center in a dentist’s office can now make a tooth in hours instead of days and for a fraction of the cost.

“That is technology that is absolutely disruptive; if people in that industry were watching, they would have seen what was coming, but they missed it,” he noted. “Now these technicians have milling centers in their laboratories, and they’re making $40 a unit. You go from $120 to $40 with inflation — that’s the stuff that scares you to death.”

Barrett agreed, and for another example of not recognizing what in hindsight, or even careful foresight, seems obvious, he recalled Jim Keyes’ now-infamous quote from a decade ago: “Neither Redbox nor Netflix are even on the radar screen in terms of competition; it’s all Walmart and Apple.”

“Two years later, Blockbuster files for bankruptcy, and today, Netflix is worth about $62 billion. That’s how fast change can happen, and if you don’t anticipate the disruption, chances are you’re not going to make it,” said Barrett, adding that the business landscape is littered with similar examples of companies moving too slowly, or not moving at all, to anticipate change and get ahead of it.

How and why does that continue to happen?

“People don’t change unless the pain of not changing becomes greater than the pain of change,” said Barrett, adding that companies and business sectors are going to keep doing what has made them successful until it becomes more than obvious that they can no longer do that.

But at the rate change is happening, that won’t be possible in the near future. By the time the pain of not changing exceeds that of changing, it may be too late to change.

For this issue, BusinessWest recaps the third segment in its Future Tense series, a presentation that brought home the need for business owners and managers to prepare for and be able to withstand what can possibly come at them in the months and years to come, rather than be a buggy-whip maker in the age of the automobile.

Brush with Fame

Rosie Noble worked at Sanderson McLeod for a half-century, Borsari told those gathered at Tech Foundry for this installment of Future Tense. Her job — no, make that her domain — was a specific wire brush, or stylus, made for the healthcare sector.

“Rosie walked seven miles a day, 14 feet at a time, for 50 years — she has 2% body fat,” said Borsari as he attempted to draw a picture of how these brushes were made. “You are not going to find another Rosie Noble working for Sanderson MacLeod, walking seven miles a day, making brushes for the rate we were paying. And Rosie wants to retire; what do you do?”

The answer was the Rosie 2, built with her input. It’s the world’s first (and only) fully automatic twisted-wire stylus machine — technology that does essentially what its namesake did starting when Lyndon Johnson was in the White House. Ultimately, Borsari said, the company didn’t build this machine because it wanted to, but because it had to to remain competitive.

“People don’t change unless the pain of not changing becomes greater than the pain of change.”

The Rosie 2 is a great example of a company adapting to change, embracing and utilizing technology, and finding better and more efficient ways to do things, he noted, adding that, moving forward, it’s incumbent on all business owners and managers to write their own Rosie stories.

Jim Barrett

Jim Barrett says that, while lean practices are most commonly associated with the factory floor, this is a strategy, and mindset, that all business sectors must embrace.

There are many factors involved in this equation, said the presenters, starting with the world of work and the rapid pace of change of pace in that realm, most of it driven by technology.

To sum it all up, Barrett talked about this country’s new Lockheed-Martin F-35 fighter jet, a plane that uses artificial intelligence to self-diagnose its needs in term of fuel, parts, maintenance, ammunition, and more. Those servicing the plane don’t have to accumulate that data, as they did with past models, because the plane provides it for them.

Emerging technology does essentially the same for business owners across virtually all sectors, he went on, adding that, in the future (and even today, for that matter), employees, especially those involved in finance, won’t be needed to gather or even analyze information — again, because technology, like Blockchain, will do that for them.

“Today, a large part of the financial function is data analysis; 60% to 80% of the time is spent gathering data and making that sure that data is compatible, either between years or sets or whatever metric you’re trying to measure to: ‘do we have the right data? Is it good data? Is it compatible?’ — 60% to 80% of the time!” he said. “Moving forward, that’s largely going to be automated out of existence, all that time is going to be freed up, and that’s going to be a huge disruption to the financial function of industries.”

Instead, one of employees’ primary functions is to take the information available to them and help management decide what to do from a strategic standpoint. And to do that, they’ll probably need different skill sets than they have now, said Barrett, adding that they’ll need to do everything from “help the company make smart bets,” as he called them, to making sure the business is using the right data and the right metrics.

Instead of counting money in the cash drawer and figuring out where it came from, the retail finance employee of the future (or today) will need to be able to help answer questions like, ‘should we open a new store or close a store?’ ‘Do we go online?’ ‘How much does that cost?,’ said Barrett.

“And that’s a whole different skill set than the finance function of the past,” he went on, adding that employers and human-resources professionals need to be aware of these changes as they create their workforces.

“What people in the finance function need to understand is they need to adapt to this information, because what made them successful in the past is not going to make them successful or, like the buggy whip, relevant in the future,” Barrett noted. “If you’re still counting cash, your competition is way ahead of you.”

Investments in the Future

Borsari agreed, and said that knowing what to do with both data and emerging technology is the biggest challenge facing business owners and managers today.

With that, he clicked to a PowerPoint slide with two images — one of a palm tree, the other of an iceberg — and kept it there for a few moments as he talked about the immensely difficult and far-reaching decisions business owners face when it comes to investing in technology.

“Those of you who run businesses or run companies or organizations and have to make these decisions know that it’s exhausting — absolutely exhausting,” he said. “Our job, when you get right down to it, is to be on the bow of a ship looking out and seeing what’s on the horizon long before it gets there. It’s either an iceberg that’s going to put a hole in the side of the ship and sink you, or a pretty place you might want to take the company and go sailing.

“What people in the finance function need to understand is they need to adapt to this information, because what made them successful in the past is not going to make them successful or, like the buggy whip, relevant in the future. If you’re still counting cash, your competition is way ahead of you.”

“And it’s exhausting because you’re getting bombarded from all sides,” he went on. “Our challenge is, ‘how do we look at the palm trees and the icebergs and sort out what is the technology we think is relevant, what we think works for us, and what doesn’t?’”

Elaborating, he said the place companies must start is with a basic question: what is the technology for? And until it’s answered, the checkbook should certainly stay in the drawer. The goal, he went on, is to embrace and choose technology that enhances that which already separates you in the marketplace.

“Understand what the value-driver is for your customer,” he told his audience. “What do they come to you for? Then determine if technology is going to help you, neutralize you, or put you at a disadvantage. Once you buy it, you own it.”

Borsari noted that Palmer-based Sanderson MacLeod is not going to make wire brushes less expensively than companies in China, or almost anywhere else, given the high cost of doing business in this state.

“So why do people buy from us?” he asked rhetorically before answering that question for the audience.

“Our feeling is that our customers have to think that they’re either with us or that not being with us is a competitive disadvantage,” he said, adding that the company is known for its innovation and making products that stand out in the marketplace.

“These are the things that we think about when we consider technology,” he explained. “Is it going to help us with this, or does it make us more of a commodity?”

This discussion of technology and investments in it led naturally to another of those phrases in the program’s title — lean process.

Lean, the science of taking waste out of the process, can help drive decisions on technology investments, said Borsari, who cited the ‘5 Ms’ of waste — man, machine, method, materials, and money — and the need to identify which one (or ones) are the target of new technology.

“What are you buying the machine for?” he said. “Sometimes you think you’re chasing something, and you realize that’s not what you’re really chasing.”

What all companies are chasing are greater efficiencies and better ways of doing things, said Barrett, adding that a great misconception in business today is that lean is just for the manufacturing floor.

That’s a very limiting attitude, said Barrett, adding that Meyers Brothers, and the financial-services sector as a whole, is starting to embrace lean — out of necessity more than desire. But there are hurdles to be overcome, he said, primarily because these businesses are “dealing with people, not machines, and people are resistant to change.”

“We’re great at analyzing data — we made a career analyzing data — and people love to sit at their desks and play with spreadsheets,” he explained. “But that’s not valuable anymore; people are going to continue doing what made them successful over the past 30 years, even though times are changing.”

That’s why, said both Barrett and Borsari, what a company ultimately needs to change through lean isn’t equipment, technology, or even processes — but the culture.

The Naked Truth

Borsari called it ‘wet-facecloth management.’

And, obviously, he needed to explain that.

“When I was a kid, my parents didn’t like me sleeping in,” he noted. “They’d come in the first time and say, ‘you’ve got 10 minutes to get up.’ If I didn’t get up in 10, they’d say, ‘you’ve got five minutes, then we’re coming up with a wet facecloth.’

“It is impossible to not deal with reality when you’re facing a cold facecloth in the morning,” he went on, adding that the tactic almost always worked, and today, he more or less runs Sanderson MacLeod the same way. Reality, in this case, isn’t having to get out of bed, but to operate with the full knowledge that a few mistakes, or even one big one, can make your company the next Blockbuster or the next Kodak, a venerable institution that just didn’t position itself for the advent of digital photography.

With that, he said ‘wet-facecloth management’ means avoiding certain attitudes, including putting a company’s collective heads in the sand, as the dental technicians obviously did at the start of this century.

“Their heads were in the sand; there’s no question that there was technology coming up that would make a tooth faster than layering porcelain by hand,” he said. “You have to question yourself, and you have to have people in your organization who are empowered to challenge you on that.

“You want them reading, and you want them not feeling that if they come to you with an idea that’s a little out of whack, they’re not going to have your ear,” he went on. “But you have to make sure you don’t get your heads in the sand when it comes to technology, because if you do miss a major one, that will shut the doors.”

Another mindset to avoid is ‘magic-bullet thinking,’ he went on.

“This is where someone goes to a presentation, comes back, and says, ‘we have to buy this thing; it’s unbelievable,’” he said. “That’s dangerous; there are no magic bullets. There are things that will help you, but there are no magic bullets. I’ve bought magic bullets. They don’t work.”

Still another mindset to avoid, said both Borsari and Barrett, is the thinking that all the answers have to come from inside the company.

The proper mentality is to ‘get naked,’ as Borsari called it.

“I encourage people to get out and see other companies, and to have people come and pull you apart,” he explained. “Bare what you have; you want an idea that can come through and change things, but don’t get into thinking that you have everything covered, because you don’t.”

Barrett agreed, and said one of the bigger challenges facing businesses in all sectors is changing the culture of an organization and inspiring people to think lean, avoid magic bullets, and get their heads out of the sand.

What’s needed is a compelling message, he told BusinessWest.

“To stand in front of people and tell people they need to be more efficient because if we’re not more efficient and we’re not doing it better, we’re going to be out of business — that’s not really motivational to a lot of people,” he explained. “You need to find some way to engage them.

“In our business,” he said, “that might be to say, ‘yes, you might lose 60% to 80% of what you used to do, but if you understand that, you can now spend your time going out to customers and trying to help them with their business, and you can do better stuff that, A, they value, and, B, they’re going to pay more for, and you can have a better feeling when you leave that you helped somebody, as opposed to reading spreadsheets.’

“The message can’t be, ‘we have to be lean because we don’t we to be the next Blockbuster,’” he went on. “The message has to be, ‘we have to be lean so we can do better, higher-value stuff that’s more rewarding for us and more valuable for our customers.”

Bottom Line

‘Wet-facecloth management?’ ‘Burning the boats?’

These are not phrases you would probably hear in the boardroom 20 years ago, or even a few years ago.

But you hear them now, because the times (maybe you’ve heard this) are changing. And change is coming quickly and profoundly, and companies need to be aware that they have to change attitudes and change the way they do things.

As Barrett so aptly put it, businesses, and especially those who lead, simply can’t wait around until the pain of not changing becomes greater than the pain of change.

George O’Brien can be reached at [email protected]

Business Management Sections

Spotlighting Innovation

Matt Bannister says the Innovation Series, by relating stories of entrepreneurship, will hopefully inspire more of them in the years to come. Photo courtesy of PeoplesBank

Matt Bannister says the Innovation Series, by relating stories of entrepreneurship, will hopefully inspire more of them in the years to come.
Photo courtesy of PeoplesBank

Throughout its 133-year history, PeoplesBank has touted innovation as one of its core values. But until very recently, this emphasis on innovation has been focused inward, on products, services, and ways of doing business. With a new program, called, appropriately enough, the Innovation Series, the bank is turning that focus outward, telling stories of entrepreneurship with the broad goal of inspiring more of it.

Matt Bannister sounded more like the producer of a new television sitcom than a bank’s first vice president of Marketing and Innovation.

“If it goes well, it will get renewed for a second season,” he told BusinessWest, laughing as he did so. “Right now, we have a pilot and a handful of episodes — let’s see where it goes from there.”

He was referring not to the latest candidate for binge-watching on HBO or Netflix, but to something PeoplesBank is calling its Innovation Series. And yes, you can binge-watch this, too. Well, eventually.

There are now three ‘episodes’ available for viewing on the bank’s website and on YouTube, including that so-called pilot and an interview with the braintrusts at Valley Venture Mentors, and there will soon be more installments in the can, as they say, as Bannister sits down with more entrepreneurs.

As the name of the series denotes, this is a program about innovation and entrepreneurship.

Or what Bannister, who plays host/interviewer for the series, also simply called ‘it,’ a not-so-casual reference to that collection of qualities, talents, and intangibles it takes to not only have an idea (we all have those) but advance it, hopefully all the way to the marketplace. We’ll talk a lot more about that later, but first, more about this series, how it came about, and why.

Bannister started by saying that innovation has always been one of the bank’s core operating principles. But for just about all of the institution’s 133-year history, this emphasis on innovation has been focused inward — on the development of new products, services, and ways of doing business.

Some Tips for Entrepreneurs
to Stay Sane

Entrepreneurial life has been described as a rollercoaster — incredible highs that can follow take-your-breath-away descents.

Several mentors and startup founders offered the following tips to help smooth out the ride:

• You’re not crazy! Most people would never take the leap into starting their own business, but that’s what makes you different — not crazy. When you have that idea, the one that has been burning inside you for years, and act on it, you’re following the same path as Gates, Jobs, and Edison — and they weren’t crazy.

• Make sure to have clear expectations about ownership and compensation amongst the founding team. Write down your agreement, even if on the back of a Post-it Note, but ideally with the help of an experienced lawyer.

– Scott Foster, attorney and co-founder, Valley Venture Mentors

• Be able to pivot. Having a plan is great, and you certainly need a direction, but as you learn more about your customers and your product, you may find that you need to change the business plan, go-to-market strategy, or even change the product completely. You cannot be myopic in your immediate future, and hard pivots are what separate failed startups from those that succeed.

• Find team members that you can work well with. You will be spending more time with them than your family, so it is important to be able to have a good working relationship with them.

– Barrett Mully, co-founder, Aclarity

• Know what you don’t know, and don’t be afraid to ask for help and advice from others. There are so many resources out there to help; all you have to do is ask.

• Find mentors who have experience and that you can trust. They are the ones who will introduce you to your next investor, help you understand your industry ecosystem, and be there when you just need to talk. Our mentors have been key to our success.

– Julie Mullen, co-founder, Aclarity

• You’d be surprised what you can do on a budget or for free. You don’t need to spend money on everything. In fact, the more you can avoid spending money without needing to, the better. You can get surprisingly good results without breaking the bank, and there is a plethora of free resources for almost anything you can imagine a few Google searches away.

• Resilience and the ability to adapt to change are the name of the game in the world of startups, and being able to effectively recover from problems is the difference between life or death. Never be afraid to ask for help or consult your advisors and mentors for advice on what to do, and always lay everything out on the table for your team to discuss the best course of action.

– Evan Choquette, co-founder, AnyCafé

• Don’t be afraid to share and talk about your idea. This is how you will get feedback and find mentors, customers, and co-founders. Remember the adage “the idea is 1% and the execution is 99% of success.” You have so much more to gain by sharing and collaborating than keeping your great idea locked up.

• Entrepreneurship can be isolating and lonely. Find and build a great support community of peers, mentors, and advisors.

– Liz Roberts, CEO, Valley Venture Mentors

With this new series, the bank is turning that focus outward, Bannister went on, by turning the spotlight on entrepreneurs working to take innovative ideas to the marketplace.

Like the team at AnyCafé. Now graduates of Western New England University (they started this venture while still in school), the team members want to “mobilize your kitchen,” as Logan Carlson, president and CEO of the company, told Bannister in the second installment of the series, with a product that enables someone to brew a cup of coffee just about anywhere.

And the team at New England Breath Technologies, comprised of professors at Western New England, which is developing the first pain-free glucose detector. And also the team at Aclarity, formerly Electropure, a startup launched at UMass Amherst that designs, tests, and develops innovative water-purification devices for various applications. It is the next company to be profiled, with more to follow.

Bannister said the bank has a number of informal goals in mind with this series. The ultimate goal, of course, is to strengthen the region’s economy by increasing the population of startups and next-stage companies — a development that would certainly bring benefits for all the players within the banking community.

More short-term, if you will, the goal is to hopefully inspire others to innovate and motivate them by showing some success stories in the making (these companies certainly aren’t there yet) and what lies on the path to success.

For this issue and its focus on innovation, BusinessWest turned the tables on Bannister and asked him some questions. He and the others we spoke with expressed confidence about the innovation series’ ability to not only spotlight innovation but inspire it — and get picked up for a second season while doing so.

Getting the Idea

As he and Bannister talked with BusinessWest about the innovation series at VVM’s headquarters in Tower Square, Scott Foster, one of the founders of that nonprofit and one of those interviewees in the pilot episode, said one of the program’s goals is to convey the message that anyone — and he meant anyone — really can be an entrepreneur.

It will do that, he went on, by showing the vast diversity of people who have taken advantage of VVM’s array of programs over the years — a demographic that includes college students and college professors, retirees, housewives, and more.

But can anyone really be an entrepreneur? Foster clarified his comments by saying that people from all of those demographic groups can become entrepreneurs, if they have the necessary qualities in the right quantities, a formula (if it’s even a formula) that is hard to put into words.

Foster gave it a try.

“The best description I heard, and I heard it years ago, is this: if you’re in a conference room and there’s a meeting, and the temperature isn’t right, the entrepreneur is the one who gets up, finds out where the thermostat is, and changes it,” he explained. “Because they can see that things aren’t right, they can see that other people aren’t comfortable about it, like them, and they’re going to solve that problem.

“That spirit is the entrepreneurial spirit,” he went on. “It’s seeing a problem, not being content with the status quo, and getting up and doing something about it.”

In a nutshell, the Innovation Series was created to share the stories of some people clearly not content with the status quo and also quite determined to change the equation.

Such a mindset was articulated by Carlson as he related the genesis of AnyCafé for Bannister.

“It was a freezing cold Northeastern day, and I had walked into my Marketing class,” he noted. “I looked around, and everyone had Dunkin’ Donuts or Starbucks, and I said, ‘why can’t I brew a cup of coffee here? We have mobile phones, we’ve got all these crazy travel technologies where we can do everything on the go…”

At that moment, the camera panned to Evan Choquette, the company’s co-founder and chief information officer, who fast-forwarded nicely and took the conversation in a different direction.

Scott Foster says there are no overnight success stories, and the Innovation Series helps articulate the wild rollercoaster ride most entrepreneurs experience.

Scott Foster says there are no overnight success stories, and the Innovation Series helps articulate the wild rollercoaster ride most entrepreneurs experience.

“When Logan came up with the idea for the Travel Brewer, it was like ‘that would be really cool to be an inventor and start your own company and try to make a product,’” he noted, adding that “we basically created our own careers and our own destiny by creating this product and building it up from nothing.”

New England Breath Technologies (NEBT) was born from a similar desire to solve a problem. The company is developing what it calls a ‘breathalyzer’ for diabetics.

“We’re a technology company, and our main goal right now is to try to change the way that diabetes is managed,” said Michael Rust, co-founder and chief technology officer of NEBT. “We’re trying to develop a breathalyzer that would allow the patient to simply breathe into and give the same kind of reading as a blood glucometer, and really take out a lot of the pain and a lot of the cost of managing diabetes.”

His partner, Ronny Priefer, the company’s chief scientific officer, said their journey took a serious turn when he “stumbled” — a word you hear often in entrepreneurship — onto the fact that people with diabetes have elevated acetone in their breath. Through his work in nanotechnology, the company is advancing a product that will essentially measure those acetone levels.

Some clinical trials have been conducted, with considerable success, and more will take place in the near future, he said, adding that, if all goes smoothly — a phrase most entrepreneurs are reluctant to say out loud — the product might be on the market in 2019 or 2020.

The Company Line

‘Pivot.’

Bannister told BusinessWest that he’s never heard that word as much as he has the past several weeks, or since he took up the role of interviewer for the Innovation Series.

It’s a verb put to use extensively by entrepreneurs as they talk about how their original idea is often reshaped on the journey involved with taking an idea to the marketplace. Entrepreneurs do a lot of pivoting, because the path to success is neither smooth nor level. There are a lot of ups and downs, and they are part of the process.

How entrepreneurs cope with the twists and turns, good days and bad days, is what ultimately determines whether they have it, and the Innovation Series succeeds in getting that message across as well.

“It’s very much a rollercoaster,” said Carlson when Bannister asked him what life was like as an entrepreneur. “There are some days when you have this huge win and you’ll feel amazing, and the next day everything will come crashing down. If you don’t have a very good support network of people to back you up as an entrepreneur, things can just get so difficult.”

The team at NEBT offered similar thoughts, but also many others about how the business world, and the life of an entrepreneur, is much different than what they’ve experienced in academia.

“Being in the academic world, we’re trained to be independent researchers and to really dive deep into a particular subject, and mine is engineering,” said Rust. “As an entrepreneur, I’m really trying to make connections with the broader community, networking for the business side to try raise funding for our company, but also to create partnerships that are going to move our technology from our lab into the marketplace.

“It’s really exciting, and it actually kind of changes the way we view our day-to-day life and how we view society in general,” he went on. “Now at the dinner table, I think about new ideas that can really affect people in our community and people around the world.”

Both teams of entrepreneurs talked about the importance of support systems and mentorship, especially for those new to the world of business.

Carlson’s partner, Choquette, may have summed up things best when he related to Bannister — and his audience — what Carlson’s father told the team at AnyCafé a while back.

“He said, ‘life is 10% what happens to you and 90% how you react to it,’” Choquette recalled. “Being in business is all about being able to adapt to change and new problems and circumstances; it’s being able to take in new information and then change based on that.”

Foster would agree, and noted that this series was designed to help take the viewer on that rollercoaster ride Carlson described, and show the many emotions, and many aspects, of taking a product or idea to market.

“There are no overnight success stories — that just doesn’t happen,” he told BusinessWest, speaking from considerable experience mentoring entrepreneurs developing everything from beer to apps to wedding dresses. “It’s a long slog, believe me.”

Warming to the Idea

As noted earlier, PeoplesBank leaders had a number of motivations for creating the Innovation Series.

It’s doubtful that anyone in the room when the discussions were going on talked about inspiring those types of people who would be so inclined to get up, find the thermostat, and turn the temperature down if the room was too hot — or words to that effect.

But that’s certainly one of the goals.

And based on early returns, it is meeting that goal and seems well on its way to getting picked up for another season.

 

Go HERE to view the Innovation Series ( bit.ly/pb-innovation)


George O’Brien can be reached at [email protected]

Business Management Sections

Bridging the Gap

Brett Gearing says some of the region’s best business ideas come from people who don’t consider their idea a business, but the Alchemy Fund is trying to change that.

Brett Gearing says some of the region’s best business ideas come from people who don’t consider their idea a business, but the Alchemy Fund is trying to change that.

Alchemy is a term that dates back to medieval science — specifically, the effort to convert raw materials into gold.

It was a fruitless attempt, of course. But the four partners at the Alchemy Fund have a similar idea, one with far more potential.

Their idea is to spin ideas into — well, not gold, exactly, but profitable businesses.

Last summer, Brett Gearing, Randy Krotowski, Kevin Sanborn, and Chris Sims had an idea for a different kind of model for cultivating startup businesses. “We spent a lot of time fleshing out the objective and plan, to see if the model would actually work, and most of that entailed going to universities, meeting the academics, faculty, and staff, and saying, ‘hey, what do you have in here that’s interesting?’” Gearing told BusinessWest.

“They were more than willing to show us their research, what they spend their whole lives working on, and some of them recognized there might be commercial opportunities — but a lot of them didn’t realize it; they were busy focusing on the research.”

Those conversations convinced the four partners that the Pioneer Valley has no shortage of promising ideas sitting in labs and classrooms which, with some support — funding, advisory services, business acumen, and staffing — could become viable companies. “That was our first checkbox — there are plenty of good ideas in the area,” said Gearing.

In short, he explained, the Alchemy Fund aims to create new ventures from ideas cooked up at universities and health systems, among other sources. The team will search out these technologies and concepts, identify product and market applications, recruit founding teams, provide seed funding, handle back-office services, and coach the new company along.

“We named this product Alchemy because of how it transforms its raw materials,” Gearing explained. “Our typical starting point is an underappreciated lab technique, an industry problem whose time has come, or an existing startup team targeting the wrong market.”

The first burst of fund-raising has amassed about $1 million, and Alchemy made its first project investment, in a screening mechanism for diabetes originated at Western New England University. “We think the opportunity to bring that company to a viable business is really great, given the market size and all the attention to diabetes,” said Gearing.

Certainly, the startup and venture-capital culture are nothing new to Western Mass., and neither is medical or technological innovation, thanks to a knot of notable colleges, universities, health systems, IT firms, and precision manufacturers. However, while traditional venture-capital enterprises have startups knocking on their door, Alchemy believes some of the best ideas are being developed by people who may not be thinking about marketability — but should.

“And there are plenty of both opportunities and money here, and many ideas haven’t really spun out as ventures yet,” Gearing told BusinessWest. “We started by focusing on academia, but we’ve evolved, and we’re looking at both academia and healthcare systems. That’s where we are now, and so far, so good.”

Common Ground

The four Alchemy partners have backgrounds ranging from institutional investment to venture capital to health and wellness, and met through the region’s robust startup ecosystem, Gearing said.

“We realized there was a lot of talent in this area, and we wanted to do something in the Valley for the Valley, and thought our skill sets would work well together — and so far they have,” he went on. “If we find we need a specific skill set we don’t have, our model is flexible enough that we can bring an expert in.”

The team has explored about 25 potential opportunities in fields like polymer science, engineering, computer science, wearables, and healthcare, and is looking closely at a handful of those.

“My partners and I will kick the tires on each idea and try to get a sense of what the market looks like, how much money it takes to bring it to market, and whether we have the right skills to get it to that point,” he explained. Often, it’s a challenge simply to convince the purveyor of a good idea to take the idea to market.

“Sometimes the person doing this research is a chief data scientist or polymer scientist or engineer who might not even want to run a business because they don’t have the time. Or they might be a tenured professor and have a great gig, and absolutely love what they’re doing. So we come in and say, ‘we love your idea; we think we can make a business out of this.’”

Gearing expects the idea originator to come on board, in most cases, as a chief scientist or engineer to help move the research forward, and Alchemy will surround him with a team with the business acumen to help bring that idea to fruition.

“Once there’s a commitment there, our goal is to bring it to a stable state and then hire a CEO, COO, and help with back-office services like accounting, bookkeeping, and fundraising. That’s important because, when I look at startups, they spend a lot of time pitching their idea, raising funds, and educating people on what they’re trying to do, and less time working on the actual business. So we’ll handle a lot of that.”

To be successful, he added, Alchemy’s partners are essentially drawing on their experience and cobbling together elements of already-successful models. “We can say, ‘I know this works,’ or ‘I know this is troublesome because of XYZ.’ We’re still honing the model, but I think we’re really onto something.”

The money raised from investors will pay for a number of expenses, he noted, depending on the project. In the case of the diabetes project, because it’s in the medical space, some money might be spent on clinical trials.

“We’ll also certainly try to source a CEO in the first six months, and help build a team around them. Every scenario is different. It might be product development, it might be testing, it might be branding or marketing, and it might be a whole combination of these things.”

The goal, he emphasized again, is to spin off successful, independent companies that can grow in the region. “Ideally, we’ll bring them through several levels of funding until the real money comes in. That’s our goal — to get them to revenue as soon as we can and get them to stand up on their own.”

Working in Concert

Gearing, who has also taught at Elms College and serves on its entrepreneurial leadership board, understands the potential bubbling under the surface at the area’s many institutions of higher learning, and he’s familiar with the expansive network of entrepreneurial support across the region, from Valley Venture Mentors to TechSpring to the venture-capital community.

“I think it all needs to work together in concert, and that’s where we fit in,” he told BusinessWest. “There’s an opportunity for all of us to fit together and work together collaboratively. Through this network, we’re able to find people to help ideas along. If I need someone in the insurance space or whatever the case may be, people are more willing to open up their doors and support what we’re trying to do. And once we have proven this model works, I think it only gets easier.”

While the Alchemy Fund has been operating under the radar in many ways, even while looking for investors, he added, it’s time to take the profile to a higher place. “We wanted to make sure all the pieces fit together well, and now we have a story to tell.”

A story that’s only beginning.

Joseph Bednar can be reached at [email protected]

Business Management Sections

Anatomy of an ESOP

Delcie Bean recalls that he was advised — by more than one individual and on more than one occasion — that it might not be wise to initiate an employee stock ownership plan (ESOP) while the company was still very much in a strong growth mode. But he decided this self-described gamble was certainly worth taking — and for many reasons.

Delcie Bean

Delcie Bean

Delcie Bean likened an employee stock ownership plan, or ESOP, as one is commonly called, to an onion.

By that, he obviously meant that it has many layers of intrigue and complexity, as he found out while researching, planning, and eventually executing one for the company, Paragus Strategic IT, that he founded 17 years ago, when he was just 16.

“My initial understanding of an ESOP amounted to this 30,000-foot view,” he explained. “Over the past 2 ½ years, we kept peeling back the layers. I’ve learned more about this over the past few years than I could ever have imagined.”

Despite all these layers, Bean, as he explained why and how he went down this path, said there are two basic truths that he started with and that were still there when he peeled away all those layers: That this is, at least in his mind, the proper and fair course to take, and it is also (and this is in nearly everyone’s mind) a gamble.

“There’s a big part of me that believes that it’s the right thing to do — the fair and equitable thing to do,” he explained. “It’s not like I work that much harder than anyone else here, and there are people here who I’m sure work much harder than I do some days.

“To me, I always just felt uncomfortable with the fact that this young company was growing so fast and amassing a decent evaluation,” he went on, “but, for the most part, that was predominantly just to benefit me; I didn’t really like that.”

As for that second basic truth, Bean said he’s gambling that if he fast-forwards 10 years … 60% of the valuation of the business (as an employee-owned company) will be roughly the same or more as 100% of the valuation if he had remained the sole share holder in the venture.

“And I’ll never really know the answer to that, because we won’t be able to see both, obviously,” he told BusinessWest. “But it is something I really believe is possible. However, it takes a lot more than just forming an ESOP — there’s a lot of cultivation, education, and motivation needed. But if we get it right, then I think we can leverage the ESOP to grow the company, not only faster, but better, making it healthier, more stable, and more resilient than it could have been had I owned it and just had a bunch of employees.”

Referencing this ‘gamble’ part of the equation, Bean noted that he was actually advised — very early and quite often — against taking this step now, when the company is still very much in a growth mode, as opposed to full maturity or something approaching it, when ESOPs are a far more attractive option.

“They told me I might be leaving a lot of money on the table,” he said, adding that he didn’t want to wait 10 years or even 10 more months, because he thinks this gamble is well worth taking, and one he believes other business owners should take as well.

Paragus owners

Delcie Bean, third from right, joins other Paragus owners at a recent reception to mark the closing on the company’s ESOP.

Why? Primarily because giving employees an ownership stake in the company can — that’s the operative word here — bring advantages ranging from greater ability to recruit and retain talented workers, to improved morale, to an even sharper focus on growth and strategies to enable a company to function more effectively and more profitably.

And as one small, yet hopefully effective example, Bean pointed to … the company’s postage machine, or, to be more, precise, to the fact it’s been retired in favor of simply placing stamps on envelopes (no one has to lick them anymore).

“One of the employees pointed out that the cost of our postage machine we were renting, for the amount of postage we were using, just didn’t make sense,” he explained. “We thought ‘we’re a business, we’re supposed to have a postage machine; no one puts stamps on envelopes anymore.’ But she ran the math and figured out it would save us $1,800 a year to just pay for stamps and put them on, even with the labor added in.”

But overall, ESOPs are undertaken for more far-reaching, and more long-term, strategic thinking and implementation, he went on, noting that with ownership of the company comes what amounts to a greater stake in its success.

For this issue and its focus on business management, BusinessWest uses the Paragus ESOP as a window into this complex and often misunderstood business tool, and also at what Bean believes it will mean for his already-highly-visible company.

Taking Stock

To help explain just how onion-like and complicated an ESOP is, Bean said the plan to initiate one was actually announced to staff at a company retreat nearly three years ago, and he had undertaken preliminary research and calculations long before that.

Then, as now, the company was defined by strong growth (roughly 24% per year has been the average), as well as physical expansion — the company is already starting to feel snug in new quarters opened in Hadley just two years ago — a constantly growing staff, and the mounting challenge of finding and keeping talented help in that climate.

In all ways, the arrow was pointing decidedly up.

And this is not the time, as noted earlier, when business consultants advise ownership to go the ESOP route.

But Bean, who has generated headlines in recent years for all kinds of reasons — from almost-permanent residence on Inc. magazine’s fastest-growing companies list, to BusinessWest’s Top Entrepreneur award for 2014, to the opening of new businesses and a unique training facility to prepare people for careers in IT — decided it was time to generate one of a different kind.

And, again, he said there were many motivations, and primarily a desire to share the wealth — in part because it should be shared, in his thinking, but also because doing so would benefit the company.

Seeking to feel more comfortable with the manner in which the pie would be divided, Bean started doing some research.

It involved books, articles, case studies, and some recent examples, locally and nationally. As noted with the onion reference, he learned that ESOPs are quite involved and require planning, execution, and a large team to handle both.

As part of the exercise, Bean became closely acquainted with the ESOP undertaken by a Springfield, Ill.-based company that remanufactures and resells engines. That case was considerably different — the venture had been bought, the buyer announced its intention to sell it or shut it down, and the employees, fearing the loss of their jobs, secured the capital to buy it — but the machinations were similar enough to make it a learning experience.

There were others, including the ones at Harpoon Brewery and Chibone Yogurt, Bean went on, adding that his research revealed that in most cases, ESOPs are initiated by companies looking to raise capital for equipment purchases and other reasons, or by owners looking for an effective exit strategy.

“As Baby Boomers look to retire, if they don’t have a succession plan already created they may use ESOPs to help them with that challenge,” he said, adding that given current demographic trends and the lack of succession plans at companies large and small, it’s likely that there will be an uptick in ESOPs in the years to come.

Despite his aggressive research, though, Bean found it very difficult to find an ESOP quite like the one he was planning, for all those reasons stated earlier.

“I’m not looking to go anywhere,” he said, adding that this was a point he had to drive home to his employees over the course of the nearly three years it took to bring the plan to fruition. “Rather, it’s a commitment that I’m all in.”

ESOP’s Fable

And as he explained ‘all in,’ Bean offered some specifics as to how this ESOP works, and, more importantly, how he expects the company to leverage it in the years and decades to come.

He started by saying that unlike those cases where an ESOP is an exit strategy, no funding was raised by employees and no cash changed hands. In essence, 40% of Paragus (roughly $1.4 million) was gifted to the 40 or so employees in the form of a trust that is wholly owned by the employees of the company. And this share of the company becomes a type of retirement plan, or another retirement plan as the case may be (there’s a 401(k) program already in place).

“Once a year, employees will get a statement showing how many shares they have in their account, and what the valuation (of the company) is, and therefore what those shares are worth and what their account is worth,” he explained, adding that the ESOP becomes a perc — in his mind, a very attractive one.

We need to help the employees understand, from the context of their job, the things they can do to have an impact that matters and that can change the bottom line. We have an obligation to simplify the business down so that every position has a metric that they can understand, that is tracked, is clear, and that ties into our profitability, so they know what they can do.”

Indeed, the company has a 10-year goal for growth and valuation ($40 million to be specific), and if it is hit, he projects that the average ESOP account, governed by ERISSA, will be worth “in the low six figures.”

As for leveraging the ESOP, which closed June 8, Bean said the company had already generated a culture of ownership — reinforced with rewards — throughout its ranks, but the ESOP will hopefully take it to a higher level.

“In order for this gamble to work, there is an obligation on the part of the employee, but there’s also an obligation on us,” he explained, meaning company leadership. “We need to provide education, training, and motivation.

“We need to help the employees understand, from the context of their job, the things they can do to have an impact that matters and that can change the bottom line,” he went on. “We have an obligation to simplify the business down so that every position has a metric that they can understand, that is tracked, is clear, and that ties into our profitability, so they know what they can do.”

Elaborating, he said that each position has such a metric, and, therefore, steps, or operating strategies, that can improve profitability. Examples include everything from purchasing policies, to the level of customer service provided by service techs, to that postage machine.

At present, the company is looking at every position from the vantage point of creating a metric and providing employees with the tools, and motivation, to know where and how to work harder and better.

“If they don’t know where to invest the effort, then even if they want to, they won’t do it,” he explained, adding that one key through all of us is to take steps that improve profitability while not negatively impacting quality of service.

The Bottom Line

When asked if and how the company would begin to know if this gamble was paying off, Bean said a look at the numbers about 16 months from now would provide some clues.

“We’ve been averaging about 24% growth over the past seven years; if we can increase that number, I think we can be fairly confident that it’s because of the ESOP as the biggest factor,” he explained. “We’ll know at the end of 2017, when we’ve had a full year with this; we’ll see if we beat that 24% number.”

But the company is looking well beyond the end of next year, he added quickly, noting that the key isn’t achieving more-profound growth, it’s sustaining it.

“It’s not about a short-term bump, it’s about a long-term sustainable approach,” he said in conclusion, adding that he firmly believes an ESOP can help attain all that, and that’s why he took this gamble.

George O’Brien can be reached at [email protected]

Business Management Sections

Pay Attention to This Measure

By John S. Gannon, Esq.

John S. Gannon

John S. Gannon

Earlier this month, Mass. Gov. Charlie Baker signed a new law aimed at strengthening pay equity for women in the Commonwealth.

The new law amends the state’s Equal Pay Act by imposing stringent equal pay obligations on employers. The purpose of the law is certainly commendable, but the legislation goes beyond pay-equity issues by prohibiting certain pay-related conduct that is routine in some workplaces, including asking job applicants about their wage history and requiring employees not to discuss compensation.

The new law will be enforced by the Mass. Attorney General’s Office, but it also allows employees to sue their employers in court. The law takes effect in 2018, but employers should start planning today for necessary compliance obligations. Employees who successfully sue under the new Equal Pay Act will be entitled to recover all unpaid wages, plus an amount equal to unpaid wages as liquidated damages, as well as attorney’s fees.

Equal Work v. Comparable Work

Under the existing Massachusetts Equal Pay Act, employers are required to pay men and women equally for comparable work. The current version of the law, however, does not define “comparable.” Some judicial decisions interpreting the “comparable” work language have suggested that comparable work is something equivalent to the “equal pay for equal work” standard applied in federal law.

The legislation signed by Gov. Baker — which was also passed unanimously in the state House and Senate — defines comparable work in a much broader fashion. The new law defines “comparable work” as work that requires “substantially similar skill, effort, and responsibility” and is performed under “similar working conditions.”

This “substantially similar” language is likely to open the door to more equal-pay lawsuits in Massachusetts because it is much less demanding than the “equal work” language used under federal law.

Look at it this way, consider how many employees truly perform “equal work?” Regardless of your answer, it’s probably safe to say many more employees perform work that is “substantially similar.” When the law takes effect in 2018, all employees performing “substantially similar” work must be paid the same, unless a permissible variation applies.

Permissible Pay Differences

Some variations in pay will still be permissible, even for employees performing “comparable” work. If the difference is attributable to one (or more) of the following factors, wage differential liability may be avoided:

• A seniority system;
• A merit system;
• A compensation scheme that measures earnings by quantity or quality of sales;
• Geographic location of the job;
• Education, training, and experience; or
• The amount of travel required.

Unfortunately, the new law does not provide any guidance explaining how these exceptions will work in practice, leaving many questions unanswered. For example, is a 15-mile difference in geographic location of the job sufficient to justify pay variances for comparable work? What about a 50-mile difference? Does a bump in pay after an initial 90-day introductory period constitute a legitimate seniority system? The Massachusetts Attorney General’s Office has the power to issue regulations interpreting the new law, so it is likely the agency will put out guidance helping to clarifying these terms.

One thing we do know is that employers may not reduce the salary of an employee in order to comply with the new law. Employers who have unexcused pay differentials will need to “level up” by bringing the pay of lower earners up to the pay of the highest earner doing comparable work.

More than Pay Equity

The new law goes beyond requiring equal pay for comparable work, because it also prohibits employers from engaging in several common wage-related practices. When the new law takes effect, employers will no longer be allowed to require applicants to provide wage and salary history on job applications or at any other time before an offer of employment is extended.

This means job applications and interview practices may need a refresher. The law also penalizes employers who require employees not to discuss compensation with coworkers.

There is one silver lining for employers. The new Equal Pay Act provides an affirmative defense to employers who complete a ‘good faith’ self-evaluation of their pay practices and demonstrate “reasonable progress” toward eliminating any wage differentials. This means that employers who adequately audit their pay practices may avoid liability under the new law. However, the employer’s self-evaluation must be “reasonable in detail and scope in light of the size of the employer.” Again, regulations from the Massachusetts Attorney General’s Office might shed light on what constitutes an appropriate self-evaluation.

Skoler Abbott will be partnering with Employers Assoc. of the NorthEast (EANE) on August 30, to present a webinar on the new pay- equity law. Skoler Abbott will also be hosting a Labor and Employment law symposium the morning of Sept. 20, at which attorneys from the firm will be discussing significant developments in state and federal law, including the Massachusetts pay equity law.

John S. Gannon is an associate at the firm Skoler, Abbott & Presser, P.C.; (413) 737-4753 or [email protected]

Business Management Sections

Getting to Know You

Ross Giombetti

Ross Giombetti, president of Giombetti Associates

Thirty years ago, Rick Giombetti developed a concept, called Performance Dynamics, that links personality with business productivity and potential. His Hampden-based company, Giombetti Associates, has grown significantly since then, helping hundreds of companies succeed by understanding personalities and building better leaders. His son, Ross, recently took the reins of the firm, but doesn’t expect much to change — least of all the passion he and his father share for making a difference in clients’ lives.

It’s not always easy, Ross Giombetti says, to be a client of his business-consulting firm, Giombetti Associates.

“We want to build the relationship and build the trust so clients know we care about the demands of their business, then deliver feedback that is true, real, and honest — tell them what they need to hear, not what they want to hear. And sometimes it stings,” said Giombetti, who recently succeeded his father, Rick — who co-founded the Hampden-based firm 30 years ago — in the president’s chair.

“I’ve certainly been called ‘direct’ before,” Ross went on, “but you’ll also find we back that up with support and compassion, so when we have to deliver a message you’re not going to like, you walk away trusting it, and knowing it’s what you needed to hear to make you and your organization better.”

That message varies wildly from client to client, as it always has; Giombetti Associates deals in leadership development and training, team-building, talent acquisition and recruitment, pre-employment assessment, and strategic executive coaching, among other roles.

“But the foundation of it all is building high-performance, world-class companies through people,” he explained — an idea he would return to several times during his talk with BusinessWest.

“There’s one constant in every business, regardless of size or industry — people, who have character traits that drive their behavior, and can cause issues and conflict,” he explained. “Our clients come to us to help them solve challenges related to personality and leadership. It could be they have a team that doesn’t get along really well or isn’t maximizing their potential or their results. There could be a talent gap in the organization that they want us to help solve, or it could be them wanting us to protect their business from making bad hiring decisions.”

The heart of Giombetti Associates is a concept called Performance Dynamics — a means of assessing personality and understanding how it affects behavior in the workplace — created in 1986 by Ross’s father, Rick, and his business partner, Paul Alves. At the time, the pair — former human-resources professionals who had struck out on their own — had virtually no money, and even scraping up enough to fly to Washington to visit the U.S. Patent and Trademark Office was a challenge.

But their idea paid off, and today, the company boasts hundreds of business clients worldwide — from mom-and-pop operations to Fortune 500 companies — helping them make hiring decisions, train executives, build leadership skills, handle office conflict, and perform a host of other interpersonal tasks.

Simply put, Performance Dynamics explores personality and applies it to leadership in business. Before quitting his job to become a consultant 30 years ago, Rick Giombetti used his human-resources experience and psychology education to develop personality-assessment exercises that companies could use to understand and manage their hiring and personnel issues. These assessment tools measure factors ranging from personality traits and mental maturity to overall understanding of leadership and how people cope with conflict.

“They’re validated and defined by major psychological think tanks,” Ross said. “We put them together in a trademarked process. My father and Paul Alves, they were well beyond their time, extremely progressive as it related to personality and leadership. That’s how it all started — with a dream and a philosophy.”

With clients boasting anywhere from five employees to 100,000, in industries ranging from landscape design to advanced manufacturing; from medical facilities to banking and insurance, the one common denominator is people, he went on. “That’s one reason why we work in all those different industries. You can change the function, change the geography, but people exist in every single one of them.”

Let’s Talk

When a company hires Giombetti, it should be ready to talk.

“Our work is a combination of things and involves a lot of fact finding, a lot of exploration, a lot of open-ended conversations in an attempt to get to know a person, a team, an organization, or an entire culture. That’s where we start,” he said.

That said, “we don’t take on new business without knowing what we’re walking into. They have to believe philosophically same things we believe. If they don’t, we’re not afraid to walk away from business. We’re not afraid to fire a customer.

“Once we know what we’re looking at,” he explained, “to really help develop an individual, a team, or a culture, we have a series of personality instruments we use that go really deep, identify the ‘why’ behind the ‘what.’ It’s not hypothetical, not conceptual; it’s concrete and real.”

A few of the team members

A few of the team members at Giombetti Associates, from left: Miklos Ats, Ross Giombetti, and Amanda Collins.

As one example, he cited a client in the Midwest founded on the core belief of purpose-driven products. “They don’t really care as much about the money they make or the success they have; they want their employees to wake up with purpose. So they’re founded on the right philosophy.”

However, Giombetti went on, the company’s leader was simply too nice and struggled with making difficult decisions, and that held his organization back.

“I’d like to think that, after working more than five years with them, his own leadership and the culture as a whole have gotten much stronger and better,” he said. “They now blend family and balance of life with accountability.”

After all, he continued, bosses can care deeply about their employees’ family time, work-life balance, and having fun at work, but at the end of the day, there has to be accountability and a focus on growing the business. Now, he said, “their organization is an example of an organization we would all want to work for.”

Another client — a local firm, Notch Mechanical Constructors in Chicopee — had a much different issue. It’s a company run by five siblings who balance their input well. “They maintain boundaries and keep each other accountable and grounded, and they make good business decisions,” Giombetti said. But they struggled with finding a strong financial leader.

“We have close to a 20-year relationship with this family, and we wanted to make sure they hire the right person. We went through a lot of due diligence, and it took us longer than we or they would like, but the story has a happy ending. We found somebody who is a great cultural fit — the same philosophy, grounded, humble, but tough and smart. They’re pretty happy with the decision we made. Sometimes making the right decision takes longer.”

In both cases — a company leader who had to change his way of thinking, and bringing in the right person from the outside for a key role — it all came down to the importance of people, he stressed.

“Great organizations believe that building a strong team with great people is largely what makes you successful. You can have a great product, you can have great service, you can have a great business model, but without the people, you won’t capitalize on your opportunities. You’ll have nothing.”

Smart Growth

Giombetti currently employs six people and is actively looking for a couple more to meet the needs of an expanding client base nationwide.

“But we’re careful about the business we take on,” he said. “We don’t take on business just for the sake of growing. That philosophy will never change as long as I’m tied to the organization. I learned that from my father, that bigger is not always better; better is better. I want to do it the right way, to continue to treat our clients like their business was ours, and I don’t want to lose touch with the close relationships we have with most of them. So we’re really careful about how we run our business.”

In part, that means running the business like that client in the Midwest who prioritizes his workers’ lives away from the office, saying he wants to do the same for team members like Miklos Ats, senior associate; Amanda Collins, office manager (who’s being groomed for a larger, human-resources generalist role), and Monica Childers, who doesn’t have a title beyond ‘protector’ and ‘boss of all of us,’ Giombetti joked.

“When I’m not working, I’d rather be spending time with my wife and three kids and a million hobbies,” he said. “I’d rather see Mik spend time with his lovely wife and go eat at more great restaurants. I’d like to see Amanda spend more time honing her trivia skills, and see Monica spend more time with her awesome husband, who recently learned how to make sushi, and their fantastic two boys. We believe in ‘work hard, play hard.’”

At the same time, he wants the firm to continue giving back to the community, through its efforts with Habitat for Humanity and other local organizations. Meanwhile, Giombetti coaches youth sports and launched a mentorship program at Minnechaug Regional High School in 2012 — efforts that, along with his business success, contributed to his selection to BusinessWest’s 40 Under Forty class of 2016.

“We’re passionate about developing young people,” he said. “Most students don’t know who they are or what they want to do, but if we can help them better understand who they are, they’ll have a lot less stress and anxiety in their young life and career.”

These efforts are just one more way Giombetti is committed to the Western Mass. region. “The Pioneer Valley will always be our home. I don’t have visions about moving our office into a big city to be closer to bigger business and more opportunities. I’m happy being where we’re at, doing what we do, supporting awesome clients and individuals.

“Philosophically, we treat our clients’ businesses like our own, and we’re going to protect that,” he went on. “Our clients trust us to know their people, know their culture, know their business, and protect it like it was our own.”

As for Ross’ father, Rick Giombetti may have relinquished his president’s title this year, but he remains active in some project work as a strategic advisor, which Ross appreciates. “His legacy will live on forever here. He’s a fantastic leader.”

One who has long been committed to building up the leadership potential of others, a passion he certainly passed along to his son.

“It sounds cliché, but I wake up every morning truly being motivated to inspire people and make a difference,” Ross said. “When students are coming out of college, when they’re asked the question, ‘what do you want to do?’ a majority say, ‘make a difference,’ but they don’t know what that means — and don’t know how.

“That is the passion I live every day,” he went on. “When I see somebody grow, develop, and become a better person, become a better husband or wife, become a better teammate or leader, that keeps me coming back for more.”

Joseph Bednar can be reached at [email protected]

Business Management Sections

Visual Flight Rules

By Elizabeth McCormick

Don’t incentivize employees with money. They don’t want it.

Did you do a double-take? The statement is a bit facetious; your workers expect fair compensation for the work they do. But it’s not the be-all and end-all of their motivation. In fact, it’s not even one of their top three motivators.

The top three motivators — culture and values, career opportunities, and senior leadership — account for more than 60% of a worker’s job satisfaction. Let’s look at each of these in turn and examine how it influences — and is influenced by — a transparent corporate culture.

Defining Transparency and Culture

There’s a temptation to think of corporate culture and transparency as synonymous, whether that transparency is achieved yet or not. Consider the following statement by a fictional CEO: “our corporate culture is one of transparency.”

It probably strikes you as an empty phrase. The more cynical would likely start looking for transparency in practice in this executive’s organization, or, worse yet, start examining the CEO for behavior consistent — or inconsistent — with the statement.

Take a minute to look out the window. Some of you might see trees, green spaces, and water, while others might see walls of adjacent buildings. A few of you probably noticed the window needs cleaning. You probably see where this is going. While people can value transparency, in many ways transparency isn’t a value at all. It’s a condition.

Transparency sits in between culture and perception. You already have corporate transparency. It’s simply a matter of opacity. With this model in mind, it becomes clear that an enterprise with opaque cultural transparency is likely to frustrate perceptions. Conversely, high transparency contributes to a satisfying work condition.

Traditional, hierarchy-based management is often defined by the corner office or the prime parking space, beneficial rewards and demonstrative achievements that get entrenched in the myths of corporate culture, making the workplace a competitive environment rather than a collaborative one, promoting a set of skills in the workforce that may not be the skills best suited to advancing corporate objectives.

So it’s easy to see that, if the fictional CEO of our example makes his or her statement, then goes back to the office and closes the door, the words are hollow.

The Real Message Behind Career Opportunities

Consider the silent pluggers. Every workplace has them, those who quietly do their job, day after day, and they’re good at it. Perhaps they want to know that they can keep doing what they are doing, earning a little more over time.

To them, a bump up to supervisor may be the worst possible outcome. Promotion is a reward for some, but a punishment for others. If the corporate window on advancement is opaque, the pluggers may not be doing their best work in hopes of being passed over.

Promotion may also be a tangible demonstration of a person’s value. It’s hard to argue that your work isn’t valued if the company gives you more money and responsibility. But if this validation can come only through career advancement, then they probably aren’t experiencing workplace transparency when it comes to day-to-day job performance.

Given that salaries are typically closely guarded by company and workers alike, it’s likely that, in the opaque workplace, there are those who are consumed with the idea that others are making more for similar or less effort. A promotion or a raise is the only way they can calm the inner voices against the thought that they are being ripped off.

There just can’t be salary transparency, though, can there? Well, the military does it. Public institutions such as universities and government agencies at all levels publish salary information. We all know how much the president makes. With access through the Internet to job listings across the country or even around the world, it’s never been easier for a worker to establish his or her market value. But remember, money is only number five on the list of motivators. It’s not that workers want to be paid the most. Workers simply want to be paid fairly.

Transparency and Senior Leadership

Brace yourselves: here’s where you come in. You’ve probably heard the glib catchphrase, ‘people don’t quit their jobs, they quit their bosses.’

It may be simplifying somewhat, but examine your own job history to see if it’s true for you. What makes up a good boss is different for everyone. Despite the definitions, there are leaders who are accepted as superior, so there are overlaps of perception.

You read how opacity affects perception, and the real challenge for you as a manager is to find the balance that’s right for your company and for your workers, and, since you must live it, what’s right for you.

Reviewing the basic definition of a manager, we are reminded, of the saying, ‘a manager is a person whose work is completed through the efforts of others.’

Your workers are completing your essential work. You probably know how they tick as a group and, in some cases, as individuals. You’re likely contemplating the concept of transparency to help your people work better, more efficiently, and with satisfaction and loyalty.

E-mail, calendars, work time, and work tasks can keep tabs on the work that your staff is doing. Is this gathered information used to adjust and adapt, or is it a corporate Big Brother whose only result is increasingly complex work avoidance?

A smart approach to transparency may beat a ‘more is better’ approach, particularly during the early stages of implementation. Systems that feed the transparent condition are often used in opaque ways, sending mixed messages. Understanding transparency as a condition means treating transparency as a process. Your workers are looking to you for guidance, example, and sincerity. For more than 16% of them, it’s the most important factor leading to job satisfaction.

Your Visual Flight Rules

Reducing the opaque walls of hierarchal corporate culture is not something to attempt on a whim or on a mission statement. Employees can see right through you if your leadership lacks sincerity.

It’s ironic, but perhaps the best methods to begin efforts to improve transparency are subversive. You can quietly try on your own transparency changes, learn about your staff, their goals, dreams, and frustrations. Mix these with your knowledge of the business, your clients, and your industry. Just as a pilot flies from one landmark to the next, so too will your process toward transparency.

Elizabeth McCormick is a speaker, author, and authority on leadership. A former U.S. Army Black Hawk pilot, she is the bestselling author of her personal development book, “The P.I.L.O.T. Method: the 5 Elemental Truths to Leading Yourself in Life”; www.yourinspirationalspeaker.com

Business Management Sections

Words to Live By

By Patricia Fripp

 

In a perfect world, you would have an unlimited budget to hire top keynote speakers for all your meetings and conventions. Since you don’t, here are some proven suggestions that have been successfully incorporated by many companies and associations. Adopt them into your meeting-planning process and become a hero for getting the most for your meeting dollar.

One seasoned association executive director had six days of speaking and seminar slots to fill. As part of the overall convention, instead of assigning each slot to a different speaker, she suggested to the conference committee that they maximize the contribution of a few top presenters, hiring three of them to fill three different roles. That’s how they made 1 + 1 + 1 = 9. Three speakers used in three ways equals nine slots filled.

Here’s how such a move can save your organization time and money and let you trade up to professional speakers you might have thought you couldn’t afford.

Save on Hotels and Airfare

Cutting the number of speakers will most likely reduce the total nights of lodging needed. You will definitely save on transportation — for instance, three round trips versus nine.

Speakers May Reduce Fee

Many speakers will conduct multiple presentations for the same fee and discount several days in the same location. Perhaps your prior speakers might have been more flexible if you had only thought to ask, “after your keynote, could you conduct a breakout session?” or “while you are here, could you emcee one morning?” or “could you moderate a panel?” Even, “our chairman is a bit nervous. Could you coach him on the opening of his keynote speech?”

Speakers and trainers who travel across country will frequently charge considerably less for three consecutive days at one hotel, rather than three separate dates months apart.

The Answer Is ‘No’ If You Don’t Ask

One Realtors Assoc. event organizer asked, “after your luncheon speech, could you deliver a breakout seminar on your topic and go deeper?” That thrilled the speaker, who wanted to prove he had more to offer than the 45 minutes of ideas presented in his keynote speech.

One seasoned professional speaker always makes a habit of suggesting a breakout following her keynote. One of her clients said, “well, the agenda is already slotted in. However, we’d love it if you would emcee our ‘Top Producers’ panel, the first breakout session after lunch.”

It’s Easier to Get Sponsors

Trading up to a more seasoned or bigger-name speaker makes it easier for you to get sponsors. If you have ever said, “we can’t afford your fee,” instead ask, “if we can find a sponsor to help pay for your presentation, would you be willing to have a book signing in their booth?”

Who would sponsor your event? Consider approaching the exhibitors at your conventions or whoever sells to your members or whoever wants good PR with the people in the audience. List these ‘angels’ prominently in the program and meeting audio-visual presentations.

At many conventions, the sponsor has the opportunity to introduce the speaker and handle the Q and A. Ahead of time, introduce your speakers to their sponsors, and encourage them to incorporate a couple of lines into their presentation that tie into their sponsor.

For example, one keynote speaker, in her speech to an 800-person audience at a national convention, thrilled the association, audience, and sponsor. After her opening story, she quoted the founder of her corporate sponsor, gave examples from the sponsor’s newsletters to reinforce her points, and incorporated its name in her walk-away line.

When your speakers are wise enough to feature their sponsors in their presentations, you will not have a problem getting sponsorship for future conferences.

Three Invaluable Bonuses

Having speakers on hand throughout your event gives you far greater flexibility in scheduling. In case of a last-minute speaker cancellation or no show, they can substitute. And continuity can establish a powerful connection between audience and speakers.

With six days of speaking and seminar slots to fill, our seasoned association executive director said, “we found that, when we triple-book speakers, they become even more popular, really getting to know our association members, who always enjoy their staying around longer. Our members feel they know them as friends when they can talk to them in the trade show and after-hour events as the speakers are with us for several days.”

Continuity, during an event or from year to year, means your speakers are able to notice and volunteer to help your organization in special ways you may not have considered.

More Bang for Your Buck

Many successful meeting planners are able to negotiate with their speakers for extras.

Wise speakers figure that, as long as they are there anyway and are being paid well, their time belongs to the client. Therefore, they are happy to take on extra tasks.

The next time you are planning a conference, consider the multiple ways you might incorporate your speakers’ talents. In addition to what you are engaging them to do, it doesn’t hurt to ask if the speaker would be willing to do one of these:

• Deliver one or two breakout sessions to the schedule;
• Add a partner/guest program;
• Introduce other speakers;
• Emcee part of the event;
• Moderate a panel;

Sign autographs;

• Coach company or association leaders on their presentations; or
• Appear in the sponsor’s booth to make their sponsorship more of an investment.

If your speaker does not ask how else he can serve you, perhaps you should consider continuing the search.

Patricia Fripp is a keynote speaker, executive speech coach, and sales presentation skills trainer. Meetings and Conventions magazine named her “one of the most electrifying speakers in North America.” She is virtually everywhere with her online learning platform FrippVT. Many of the courses earn continuing-education credits earned through XtraCredits.

Business Management Sections
Local Consultants Stress the Need for Succession Planning

George Miller was explaining how he came to be the owner and operator of the Magic Wings Butterfly Conservatory & Gardens in South Deerfield.

He said he would try to make a long story short, but acknowledged that this was probably not possible, and then proved his point.

Kevin, left, and Michael Vann

Kevin, left, and Michael Vann say too many business owners make the mistake of putting off key decisions on succession.

Indeed, it took some time to explain how Miller went from being the construction-company owner originally hired by a team of nine principals to build the unique facility in Deerfield, to eventually becoming one of two partners to create and open the tourist attraction in 1999, and then become sole owner a few years later.

In short, there was obviously a good deal of attrition concerning that original ownership team, Miller told BusinessWest, adding that some of them developed cold feet when they learned the actual price tag for this facility — “I gave them some numbers and then had to perform CPR on a few of them.” Others dropped out during what became a protracted battle with the town for the permits needed to make the concept reality.

“They thought the butterflies were going to eat Deerfield,” said Miller with a chuckle, adding that he was asked to come on as a partner, and eventually, he and the lone remaining original investor prevailed and opened the doors to the facility. But this was to be a short-lived partnership.

“We had different philosophies — I liked making money, and he liked spending it,” Miller said. So he bought him out and continued to operate Magic Wings as a family operation, with daughter Kathy Fiore and son George Jr. eventually taking leadership positions.

Fast-forward to early this year, and Miller decided it was time to move on from the enterprise. Actually, his wife provided much of the motivation.

“She said, ‘when is it going to be my turn?’” he told BusinessWest, a reference to how the venture had come to consume most of his time and attention and how she would like some of both.

So Magic Wings is now for sale, thus becoming one of myriad businesses across this region and around the country now dealing with the complex, often thorny issue of succession.

In many ways, Magic Wings is atypical, said Michael Vann, who, with his father, Kevin, manages the Vann Group, a Springfield-based consulting company now handling the sale, and a company that specializes in such transactions and the larger issue of succession.

Magic Wings is certainly unique — a butterfly conservatory is an unsual business and one that commands a distinct brand of passion from its owner, said Mike Vann, adding that, in this case, there were few, if any, options concerning succession; the next generation has no interest in taking over the venture, and a sale to other employees is not a possibility, leaving Miller to sell.

But in many ways, Magic Wings is typical in that it presents lessons in how succession is something owners must be thinking about and planning for; otherwise, the process can become more tedious and difficult.

It also demonstrates how there are many moving parts to succession planning and the many other issues — from estate planning to retirement savings — that older business owners face as they come to grips with deciding the fate of what many describe simply as “my baby.”

Kevin Vann likened the process to putting together a jigsaw puzzle with many pieces.

“I tell new clients to picture it this way: you take a puzzle box that has 500 pieces in it, and you dump them out on the table,” he explained. “And you try to fit all those pieces to the puzzle — their personal life, their business life, and all those offshoots like the retirement plan — together. And when we get started, we don’t know what it’s going to look like.”

These days, the Vanns are helping many business owners with their figurative jigsaw puzzles — Mike estimates that maybe 40% of the company’s revenues are succession-plan-related — and the numbers will only move higher as the Baby Boomer generation ages and business owners confront something they probably don’t want to confront — succession.

They have forged an alliance with the consulting firm ROCG, a multi-national corporation that specializes in business consulting and especially succession issues, and are thus adjusting their own business plans to acknowledge succession planning as a major growth opportunity.

For this issue and its focus on business management, BusinessWest looks at that opportunity and the many issues involved with succession planning.

Getting the Bugs Out

Mike Vann says the numbers tell the story when it comes to the issue of succession planning, why it’s important for business owners to start thinking and doing something about it, and also why it represents a strong growth opportunity for his company.

“Statistics from a study that MassMutual conducted show that 26% of businesses have done some kind of succession planing, and 74% haven’t done anything,” he explained, adding quickly that many, if not most, of the companies in the former category would be considered larger, more sophisticated enterprises, with dozens or hundreds of employees.

Thus, the number of small and mid-size businesses — the kind of ventures that dominate the Western Mass. economy — with a plan of any kind is much smaller, perhaps as low as 10%.

There are a number of factors contributing to those statistics, said the Vanns, including a reluctance to face the issue of succession (there are several reasons why), preoccupation with other matters, especially the day-to-day operations of the business in question, and the general attitude that there will be time to do succession planning ‘later.’

Magic Wings Butterfly Conservatory

Magic Wings Butterfly Conservatory in Deerfield is a unique business, but shares many of the common issues involved with succession.

While that’s true, later can sometimes be too late, said the consultants, adding that, ideally, business owners should be thinking about succession from the day they start their venture, but more realistically, they should give it strong consideration starting no later than 10 years before their projected exit from the stage.

Put another way, said Kevin Vann, business owners should put as much energy into how they’re going to exit their business as they do with how they’re going to start it.

Helping clients with these issues has become a steadily larger potion of the business portfolio for the Vanns, who also assist clients with sales of businesses (work that is often related to succession planning), mergers and acquisitions, organic growth opportunities, and strategic planning.

“We carry an inventory of six to a dozen succession-planning cases in different stages at any given time,” said Kevin. “It’s a part of our business that’s growing rapidly.”

When asked about those stages, he said there are several, starting with creation of an actual plan itself. This is followed by diligent updating of this document as time moves on and circumstances change. And then, there’s execution of the plan.

In many cases, companies will have a plan, but it will sit on a shelf neglected, said Mike, adding that this is a common mistake business owners make.

He cited the example of a local manufacturing company operated by two brothers who put a buy-sell agreement together.

“One of them’s 68, the other’s 63, and they have a buy-sell agreement in place,” he explained. “At that age, [the younger partner] doesn’t want to have to deal with buying out his brother, and there are no family members to take over. So it’s great that you have a buy-sell agreement, but it’s bad news if you’re the one who doesn’t die.”

Kevin agreed. “Succession and the many issues involved with it are a big problem today,” he told BusinessWest. “Over the past 20 years, the population has been conditioned to think, ‘let’s get our retirement planning done; let’s get our elder-care planning and our estate planning done.’ If you’re in business, succession planning has often been pushed off, and it’s catching a lot of people off guard. And we’re all living longer, so it’s easier to put it off.”

Flight Plans

Returning to the example of Magic Wings, Mike Vann said George Miller was not exactly caught off guard — he’s known for some time that neither of his children had an interest in taking over the business when he decided it was time.

But that time came up sooner than he might have anticipated several years ago, and he is now tasked with selling — with assistance from the Vanns — a business that requires a certain kind of owner, one with the requisite passion for its unique purpose, the ability to thrive in what is definitely a ‘people business,’ and one that can see past the many challenges to what Miller believes are solid opportunities.

And it may take some time to find such an investor.

For other business owners, there are different issues to be dealt with. And the list is even longer for those in family businesses, where succession-planning issues and estate-planning issues often collide at high speeds. In those cases, matters include which children will take over the business, on what terms, and with consideration to those children who are not involved in the business.

This crowded intersection of planning issues brings Kevin Vann back to that notion of a jigsaw puzzle. And what business owners need to keep in mind is that a succession is like a will in that it can’t sit on a shelf or in a safe as years and decades go by.

“Succession plans are constantly evolving because people are constantly evolving,” he said. “Someone gets sick, they suffer a health crisis, there’s a domestic problem, an issue with children, divorce … all these kinds of things.

“It’s not just about ‘gee, I’m getting old, I might die,’” he went on, referring to the thought pattern that often spurs one to action on a succession plan. “It’s about all those other things that are going on in your life all day long.”

And succession planning is not just about money — although that is a big part of it, he continued, adding that lifestyle issues often come into play.

“Many people want to stay active, stay productive — they don’t want to let go of their business,” said Kevin. “They have nowhere else to go, have no other vocations, no other hobbies. This is their baby, and they don’t want to let go. And they don’t want to be home with their spouse. These issues are all part of the planning process.”

Overall, succession plans are like snowflakes in that no two are alike, said Mike Vann. Therefore, each situation — meaning each business and the people involved with it — is unique. And there are many moving parts to each plan.

“There’s a big evaluation component to the business,” he noted while referencing where and how the process starts. “There’s a lot of analysis with the company and the people involved with it. We spend a lot of time coming to understand not only the business, but the personalities and the expectations of those individuals. You’re dealing with some very interesting nuances with business owners’ spouses; there’s a lot of discussion as to what’s next.

“There’s a recommendation component that addresses various options,” he went on. “You look at the estate plan that’s in place and what the individuals are doing from a financial-services component. It’s a holistic piece, and it needs to be, because, for many business owners, the company is the largest and most valuable asset they own.”

As for the execution phase, well, that comes complete with its own set of issues, said the Vanns, adding that it’s one thing to have a plan, but another thing altogether to carry it out — and the latter is often more difficult than the former.

“It’s not uncommon for us to get to a situation where we’ve completed a plan, there’s agreement on the plan, and no one wants to execute,” said Mike. “That’s because there are some hard conversations that have to come, probably some decisions on a family member that an individual doesn’t want to make, and many other things. It can get difficult.”

The Vann Group’s affiliation with ROCG will help in the process of helping clients navigate all that whitewater, said Kevin, adding that company has several offices in North America and provides access to resources and knowledge.

“If we want someone to look at an employee stock-ownership program, they have people who are experts on those,” he said. “The same with valuations and the many types of situations we encounter. There’s a wealth of knowledge and experience that we can tap into.”

Happy Landings

Looking ahead and at their own venture, the Vanns acknowledge that succession planning will soon become a huge source of business for a wide range of companies and individuals involved in consulting.

They believe they will have a leg up (or six legs up, in the case of Magic Wings) on all that competition thanks to their experience, affiliation with ROCG, and work putting together hundreds of those proverbial jigsaw puzzles.

Indeed, succession planning, like running a butterfly conservatory, involves hard work and, well, making sure things take off and land properly.

And they believe they have the perfect flight plan.


George O’Brien can be reached at [email protected]

Business Management Sections
How This Program Can Help You Effectively Manage Your Company

By CHRISTOPHER MARINI

Christopher Marini

Christopher Marini

Oftentimes, we rely on Excel to help us achieve a specific function or task, but do not look beyond our immediate needs, because the program can seem difficult or outright impossible to master.

While the depth of Excel’s capabilities is vast, there are a number of different tools that, with just a little education, can make an immediate and substantial impact on our day-to-day business activities. Here are five examples that may help you improve and optimize the operation of your company and better monitor your business to gain an inside edge. 

 

Track and Analyze Historical Data

One useful feature of Excel is its ability to track historical data and use this information to calculate changes and trends. Some functions in Excel that are helpful for this purpose are averages, dollar and percentage differences, and maximum and minimum values.

If a company is already using accounting software, many of these programs have the ability to export reports, such as income statements and balance sheets, directly to Excel. These reports can be generated for the current year and any prior periods for which data is available. Once the desired reports are in Excel, users can add columns and create formulas to calculate changes and trends. 

 

Budget-to-actual Comparisons

Another great business application of Excel is a budget-to-actual comparison.

This is a great way to track how well a business is able to control its costs relative to expectations that management has set. By exporting the actual results from an accounting program and creating a column of related budget figures, the user can calculate differences on an annual or monthly basis. Excel also has icon-conditional formatting that can automatically distinguish and visually present how close individual revenues or expenses are to their budgeted figures.

 

Make Future Predictions

Excel is also excellent at enabling the user to make predictions for future periods. By using the historical data and related trends as described above, business owners can apply an appropriate dollar or percentage increase to project future values.

For example, if expenses have risen by 3% in past years, management can assume that expenses will most likely increase by a similar amount this year.  Of course, some expenses are fixed, so Excel can be utilized to maintain the same fixed cost rates while applying the appropriate rate increase on any variable costs. By calculating projected expenses, business owners can make an educated estimate on how much revenue they will need to earn in order to be profitable. 

 

Perform a Scenario Analysis

One function in Excel that many users are not aware of is the ability to use the ‘goal seek’ option to explore hypothetical situations.

This is a great tool to use in conjunction with the setting of future expectations. For instance, if a sales-oriented organization needs to earn a certain dollar amount of revenue and is trying to determine what percentage revenues should increase by to reach that desired level, this function eliminates the guesswork and quickly computes the value needed. This function is especially useful in spreadsheets where there is substantial data and linking, and can help users save time by quickly arriving at a conclusion. 

 

Create Professional Graphs and Charts

Excel is an excellent program for creating insightful visual diagrams that business owners can use both for their own review as well as for presentations to staff or outside organizations.

While there are several other programs that enable users to create these graphs and charts, Excel is a clear frontrunner due to its ability to quickly interpret figures and adjust for any changes made. Some of the other programs rely on manual entries, which can be time-consuming and result in a higher margin of error.

The ‘pivot table’ feature in Excel can be refreshed to always effectively and efficiently present the most recent data. These tables can be customized in various visual ways to ensure that users can present their data exactly how they want. Additionally, Excel graphs and charts can be copied into other programs, and Microsoft Word even allows users to insert blank and editable Excel worksheets within the document.

Bottom Line

If you are already familiar with Excel, challenge yourself to adopt some of these methods to enhance the way you think about your business. If you are not yet comfortable with the operation of the Excel software, there are several learning opportunities available. Many free websites, such as excelexposure.com and gcflearnfree.org, offer step-by-step instructions on standard tasks. For a monthly fee, lynda.com has quality Excel video tutorials. In addition, many libraries or other local organizations will often offer live group learning experiences. If your task is more complex, some accounting firms offer advanced business Excel services as part of their management advisory and consulting services.

In the business world, knowledge is power, and the additional knowledge that can be obtained from custom-designed Excel spreadsheets can help business owners become more informed and aware of company performance. This increased awareness and financial insight can help give business owners the edge they need to stay ahead of their competitors and plan for the future.

 

Christopher Marini, MOS is an associate with the Holyoke-based public accounting firm Meyers Brothers Kalicka, P.C.; (413) 322-3549; [email protected]

Business Management Sections
Does Running Your Business Out of Your Home Actually Work?

By STEVE WHITE

Working out of your house seems like the perfect scenario for anyone who wants to start their own business, unless you want to repair cars and find the prospect of having a Chevy Malibu parked in your living room problematic.

But for a one-person show — especially if the job is driven mostly by sitting in front of a computer to ply your trade — the idea of not paying rent for an office, avoiding bumper-to-bumper traffic, and staying in your warm and fuzzy pajamas is most compelling.

When Baby Boomers started getting laid off from their jobs during the recent economic downturn, many of those 55-plus folks suddenly realized they had a big house because the kids had moved on to greener pastures. There now existed wide-open spaces to set up a home-based business. All they needed was an upgrade in their computer software, a shopping cart full of supplies from OfficeMax, and new business cards.

But they also soon found some items they didn’t need, like a well-stocked refrigerator in close proximity, a 55-inch HDTV and comfy couch in the next room, and a dog that must surely have some kind of bladder problem since it always needs to go for a walk.

These entrepreneurs also discovered something was missing in their business lives — people. We’re talking about the need for real-life, face-to-face interaction and the ability to bounce ideas off someone to get opinions, feedback, and even constructive criticism. Creativity doesn’t happen in a vacuum, and it certainly doesn’t happen via e-mails, texting, Facebook, and Skyping. (OK, Skyping is close, but the camera never seems to be positioned correctly, and the people you are talking to always seem to be looking at something over your left shoulder.)

But all that being said, maybe a home-based business is just the way it has to be for budgetary reasons, and you are content to brainstorm with others face-to-face over a turkey sandwich at Panera’s. If so, here are some tips to help make working at home work:

Get out of bed. It’s great that you now don’t have to leave your house in the early-morning darkness to avoid being stuck in traffic for an hour on Route 3, but that doesn’t mean you can sleep until 10 a.m. on a workday. Try to make sure you’re on your computer no later than 9 a.m.
Dress for success. Sure, no one is going to see your footie pajamas, but working in your PJs isn’t a good mindset. Dress like you are at work, and you will feel like you are actually at work, not at a sleepover.
The couch is your enemy. Designate a room in your house as your office so that you’re free from distractions. Do not sit on the couch watching TV while juggling a computer on your lap. Unless Ellen DeGeneres and the Kardashians are your clients, you don’t need to be hanging out with them while you are at work.
Eliminate distractions. Every day shouldn’t be ‘bring your kids and pets to work day.’ If your children are school age, use that window of solitude wisely. If they are preschoolers, find a reliable day-care service … and one also for Fido.
• Communicate with your team. Keep in touch with colleagues, clients, and prospects via the usual channels, like e-mail and phone. That is, when you can’t make it to Panera’s.


Steve White is the owner of Steve White Public Relations in Norwell, Mass; www.swhitepr.com.

Business Management Sections
Alan Robinson’s Second Book on Ideas Shows Organizations How to Get ‘There’

Alan Robinson

Alan Robinson says “The Idea-Driven Organization” is designed to be a road map for companies looking to glean ideas from frontline employees.

When asked what prompted his second book on the broad subject of ideas in the workplace and how to generate them, Alan Robinson said there was something rather obvious missing from the first one, called Ideas Are Free.

Only, it wasn’t obvious to Robinson and co-author Dean Schroeder at the time.

“When we wrote Ideas Are Free, we made the same mistake a lot of writers make,” said Robinson, a professor at the Isenberg School of Management at UMass Amherst. “We went out and we looked at organizations — companies, nonprofits, and government agencies — that were doing the best in the world at this; wherever we found these systems, we went and studied them, and we said, ‘this is how they work; here’s what they look like.’

“Then the book came out, and it went all over the world, and soon we were starting to get inquiries,” he went on, noting that it became a bestseller on Amazon. “People were saying, ‘this is great … but how do we do it?’ It took us maybe a couple of years to realize that it is an entirely different problem to show what it’s like to live in this environment and then to show how to get there from being an average company.”

So, The Idea-Driven Organization: Unlocking the Power in Bottom-Up Ideas was conceived to show how.

Released a few months ago, it provides what Robinson called a road map that companies can follow in their efforts to replicate some of the organizations on the leading edge of what some would call a movement.

Elaborating, he said Ideas Are Free was a comprehensive look at best practices. The sequel, if one can call it that, is all about the journeys that bring companies to that point.

And in the course of chronicling dozens of such journeys, Robinson and Schroeder included lessons that could be taken from three local organizations — Big Y Foods, Health New England, and Springfield Technical Community College, which is, in Robinson’s estimation, one of the few institutions of higher education, if not the only one, that has enjoyed any real success in this realm (more on that later).

Those organizations, like the others cited in the book, have fully grasped what too many companies and their managers still haven’t, said Robinson, and that would be the simple math he calls the ‘80-20 rule,’ meaning that 80% of the overall improvement comes from frontline ideas, and only 20% comes from management-driven initiatives.

“This is the big gorilla in the room, and most organizations just leave it on the table,” he said. “Globalization means that companies have a lot more competition, whether they know it or not, and the Internet means people can find those competitors much more easily and compare. So the pressure on you to perform and to innovate and to get better is higher than it ever was — and, yet, most organizations have very weak cycles of continuous improvement, if they have any at all.”

For this issue and its focus on business management, BusinessWest talked with Robinson about his new book and what it offers to readers, but also about the contributions made by the three area organizations to this so-called road map, and why the author considers them some of the clear leaders in what would have to be called the ideas movement.

The Write Stuff

As he talked about Ideas Are Free, which was released roughly a decade ago, Robinson described it as a labor of love, a work, years in the making, that chronicled what leading-edge companies around the world were doing to generate ideas, review them, and, when appropriate, implement them.

But, as he said, this was a look at best practices.

“There are barriers that organizations have to remove to make their systems work — you don’t just collect ideas; you also fix the policies and the systems, the resource issues, and all the stuff that blocks ideas,” he told BusinessWest. “The process is only 20% of this issue; these obstacles to ideas are something you have to address. But when we were going in and looking at the best in the world, you don’t see those barriers, because they’d already been removed.”

Thus, The Idea-Driven Organization takes the reader back to the barrier-removal process, he went on, and to specific cases, such as one at Big Y that has been oft-cited by Robinson in his many talks on this subject, and has become known simply as the ‘eco bag idea.’

Elaborating, he said a checkout clerk at one of the chain’s stores noted that, often, after he recited the question ‘paper or plastic?’ an embarrassed customer would say that he or she left their eco bags in the car. Therefore, he suggested that signs be put in the parking lot reminding people to remember their eco-bags — a common-sense recommendation that has since been copied by many competitors.

But this sound idea didn’t get put in place for a while, because of some miscommunication and a lack of clarity concerning who was responsible for escalating ideas.

“The store manager was new, and he thought, ‘I don’t have the authority to do this,’” said Robinson, paraphrasing a section from the book called “How Effective Idea Processes Work.” “The idea goes up to the regional manager, who says, ‘it’s the store manager’s authority,’ and doesn’t take any action because he assumes he’s just being informed.”

Fortunately, the company had a policy in place whereby ideas such as this one were red flagged if they were not implemented within a certain period, Robinson went on, adding that, in the course of investigating what went wrong, company executives, including CEO Donald D’Amour, realized that store managers and other executives weren’t being trained properly in what their responsibilities were in such cases.

There are hundreds of other examples of effective obstacle removal in the book, said Robinson, adding that it was designed to help others possibly avoid such barriers to progress.

Overall, the book was undertaken to stress the importance of encouraging, gathering, weighing, and implementing frontline ideas — those that originate with individuals who work in the trenches rather than the corner office — and then provide that road map for putting a system in place.

As for the first part of that equation, the authors sum up neatly why many managers are often blind to frontline ideas — and why, if they want to take their companies forward, they can’t be.

BookJacket“Consider the constant reminders of their superiority that managers are bombarded with in the course of their daily work,” they write. “They wear the suits, they have the private offices, they are the ones chosen for promotion, they are more highly educated and paid significantly more than their subordinates, and everyone defers to them. They are the ones in charge. With all of these signals continually reminding them that they are superior to their employees, it is easy for managers to come to believe that they actually are.”

Robinson told BusinessWest that, among other things, leadership at the three local organizations he cites in The Idea-Driven Organization don’t have that problem, and that’s a big reason why they’ve been so successful.

“One of the messages of our book is that you need to be humble enough to realize that the people who work for you know a lot more than you do, and your job as manager is not to tell them what to do and be the smartest person in the room,” he explained. “Your job is to tap that know-how, and these three companies have done that very well.”

Chapter and Verse

Overall, more than 100 businesses and organizations were cited for their success in The Idea-Driven Organization, and HNE, Big Y, and STCC, all of which have worked extensively with Robinson on their systems, receive prominent mention.

While each was highlighted for different types of obstacle-clearing and pace-setting work, Robinson summed up their contributions to the book — and the ideas movement in general — by telling BusinessWest that each organization highlights the importance of getting a high level of involvement from top management in the creation of an ideas system, implementation, and problem solving.

He started with high praise for STCC and especially its president, Ira Rubenzahl.

“I have my thumb pretty much on what’s going on in this business, and this is the only institution of higher education in the United States that’s doing this,” he said of the 47-year-old college. “They’re the only ones who are actually going out to their frontline people — the registrars, the librarians, and others — and soliciting ideas.

“President Rubenzahl is in higher education, he’s the only one doing this, and higher ed could really benefit from this,” he went on. “Of all the leaders I’ve worked with over the years, he’s put more of his personal self into this than anyone I’ve seen. We did lots of training sessions at STCC, we had lots of meetings, and he sat through every one of them. He really sent a message with that; if you ask him any details about the system, he knows them cold because he’s really engaged in it, and there’s a lesson there for other organizations.”

At Big Y, D’Amour has also taken a leadership role in the ideas process, said Robinson, adding that perhaps his most notable contribution to the process was getting senior management involved early on — especially during a pilot phase involving five of the company’s stores.

“He determined that the executive team would meet every two weeks and review every idea that came up,” Robinson recalled. “The senior team at this 5,000-person company was going to look at every single idea; what that showed them was what kind of things to expect, and the senior management team said, ‘wow, this is really cool. This can really help; we need more of this.’

“The other thing they saw was how these ideas were getting hung up,” he went on, returning to the eco bag. “They said, ‘we have this idea, and it’s a great idea; why isn’t it being implemented?’”

In HNE’s case, Robinson praised now-retired President and CEO Peter Straley for having the foresight to understand years ago that the healthcare industry was heading into uncharted waters, and that his company would have to be imaginative — and nimble — to handle whatever was coming down the road.

“He said, ‘we’re facing Obamacare, we’re also looking at big changes in Medicaid, and no one knows how this is all going to shake out, and the best way to prepare my company is to make it great at improving, great at adapting, and very flexible,’” noted Robinson. “[Straley] knew his company was facing massive change and needed to get better at handling change. That was his rationale, and it was a brilliant piece of leadership.”

The authors praised Straley for his ability to put together a seven-member team to design and oversee an ideas system — one that included the IT director, general counsel, a member of the executive leadership team, several middle managers, and a frontline employee known for proposing improvement ideas — and then provide it with the proper training and the time needed to do its job properly.

“Once the design team is assembled, it must be provided with a thorough education in idea management. Its members will need to have a strong understanding of what high-performing idea processes look like, how they work, and how to address the challenges they will face in creating one,” the authors write. “The initial training can involve classes taught by experts, reading relevant books, and perhaps visits to idea-driven organizations. For the HNE team, the process began with a day of training in idea systems, and then reading and studying two books on managing ideas.

“Once the team began to apply its new knowledge, it began to learn by doing, starting with the assessment of HNE from an ideas perspective,” the authors continue. “As the team members interviewed frontline employees, supervisors, and middle and upper managers, they discovered impediments to the flow of ideas that needed to be addressed. This action learning continued as the team designed their system and rolled it out through their company. In the end, the members of the design team developed considerable expertise in the management of ideas, and HNE went on to successfully implement a high-performing idea system.”

Not the End

Robinson told BusinessWest that he’s already hard at work gathering material for the next book on ideas.

He didn’t say what the specific subject matter would be or when it would be ready to write, but he did note that the ideas movement is still in its relative infancy, and that the process of learning — and teaching others how to do this — is, like the process of soliciting ideas itself, ongoing.

And it seems likely that these Western Mass. companies, and perhaps others, can and will be part of that teaching process.

George O’Brien can be reached at [email protected]

Business Management Sections
This Growing Trend Can Make Employers Tipsy

By GREG PELLERIN
An airplane pilot wants to bring his own propeller to work. A fireman insists on bringing his hose from home. A student says, “to heck with the textbook the teacher wants me to read; I’ll find one I like better.”

These scenarios might appear to be somewhat preposterous, but what if the pilot, fireman, and student insist that their ‘stuff’ will allow them to work better, faster, and more effectively? What’s an airline executive, fire chief, or teacher to say in response?

Greg Pellerin

Greg Pellerin

BYOD, short for ‘bring your own device,’ is the latest headache facing IT departments across the country and around the world. In increasing numbers, employees are insisting on bringing their laptop computers, tablets, and cell phones to work with them — security and compliance be damned. BYOD has employers scrambling to balance worker satisfaction, productivity, and the benefits of not having to pay for all this stuff, with the potential for sensitive data breaches, violations of privacy laws, and the need to have IT people well-versed in supporting the variety of end-user devices now being brought into the workplace.

BYOD even has its own Wikipedia page. “BYOD is making significant inroads in the business world, with about 75% of employees in high-growth markets such as Brazil and Russia and 44% in developed markets already using their own technology at work,” it reads. “In most cases, businesses simply can’t block the trend. Companies like Workspot believe that BYOD may help employees be more productive.  Others say it increases employee morale and convenience by using their own devices and makes the company look like a flexible and attractive employer. Many feel that BYOD can even be a means to attract new hires, pointing to a survey that indicates 44% of job seekers view an organization more positively if it supports their device.”

One of the biggest challenges for BYOD is in the healthcare industry. The electronic health record (EHR) mandate set by the federal government has doctors and nurses expecting instant access to information. Oftentimes, that means using their own cell phones, laptops, or tablets, which comes with the risk of exposing sensitive data, in violation of HIPAA regulations.

According to Anders Lofgren, writing for Health Management Technology, “banning devices outright isn’t an option, as about 70% of IT specialists and physicians already use mobile devices to access electronic health records.” Lofgren suggests implementing a comprehensive BYOD policy as soon as possible. Here are some suggestions on what to include.

• Start by Defining BYOD
. Mobile phones may be permitted, but iPhones, Android devices, and, heaven forbid, Blackberrys require different security protocols.

• Implement MDM. That stands for mobile device management, and basically means registering each and every device with your IT department.  It’ll be up to IT to set security policies and determine how data will be accessed, stored, and used.  They’ll also decide what apps will be allowed or banned, a potential major hurdle for any BYOD policy. MDM will also mean new, complex passwords, something employees generally dislike with a passion.

• Acceptable Use. Most companies have rules about corporate-issued mobile devices governing what an employee can and cannot do. That policy needs to be reassessed with BYOD, since personal devices can be used to access potentially offensive material using the company’s network connection. Do I hear First Amendment lawsuit?

• Termination. What happens when an employee leaves the company? You can’t take back his or her phone, but you must be able to remove e-mail access and other proprietary applications. When will this process occur, and how will it be enforced?

Embracing BYOD may be a necessity in keeping a 21st-century employee happy and productive, but, like BYOB, liability questions can arise if an accident occurs on the way home. n

Greg Pellerin is a 15-year veteran of the telecommunications and IT industries and a co-founder of VertitechIT, one of the fastest-growing business and healthcare IT networking and consulting firms in the U.S.;  (413) 268-1605; [email protected]

Business Management Sections
Mandatory Paid Sick Leave on the Horizon for Many Employers

By JOHN S. GANNON

This November promises to be an exciting — and important — time for the Commonwealth. The state will elect a new governor, a Massachusetts seat in the U.S. Senate is up for grabs, and a ballot question will ask voters whether they want to vote down a 2011 law allowing resort casinos to operate in the state. Given these hot ticket items, it’s easy to overlook other voting initiatives.

However, employers should pay particular attention to Question 4, the Massachusetts Paid Sick Days Initiative.

John Gannon

John Gannon

If approved by voters, the measure will require employers to provide certain employees with several sick days each year. Various federal and state laws already require unpaid job-protected leave, such as the Family Medical Leave Act, the Massachusetts Maternity Leave Act, and the Small Necessities Leave Act. The difference with this new measure is that most employers would be required to pay employees for their time off.

History of Paid Sick Leave

Connecticut made history in 2011 when it became the first state in the country to require employers to provide paid sick leave. However, the law did not reach all employers or employees.

Employers with fewer than 50 employees were exempt from the law. In addition, paid leave was required to be provided only to non-exempt service workers. The law was predominantly focused on protecting low-wage workers in the service and retail industries. Since then, many cities have adopted similar measures. There are currently sick-leave laws on the books in San Francisco, Seattle, Washington, D.C., and New York City.

In Massachusetts, similar versions of paid-sick-leave laws were proposed in the Legislature, but none reached a final vote. This year, sick-leave supporters abandoned the legislative route in favor of a ballot strategy. They delivered enough signatures to the State House to get a question about paid sick leave on the 2014 ballot.

The Ballot Question

The law proposed on the statewide ballot would entitle employees in Massachusetts to earn and use up to 40 hours of sick time. The amount of time off, and whether it needs to be paid, varies depending on the size of the employer.  Individuals working for smaller businesses with fewer than 11 employees would be able to earn and use up to 40 hours of unpaid sick time. Employers with 11 or more employees would have to provide these 40 hours of sick time as paid leave. Unlike Connecticut, the law generally applies to all employees regardless of job duties.

The law provides three scenarios where an employee could use earned sick time. Leave could be used (1) to care for a physical or mental illness, injury, or medical condition affecting the employee or the employee’s child, spouse, parent, or parent of a spouse; (2) to attend routine medical appointments of the employee or the employee’s child, spouse, parent, or parent of a spouse; or (3) to address the effects of domestic violence on the employee or the employee’s dependent child. Employees would earn one hour of sick time for every 30 hours worked, and would begin accruing those hours on the date of hire or on July 1, 2015, whichever is later. Employees could begin to use earned sick time after working 90 days.

Carryover of unused sick time to the next calendar year would be permitted, but the employee could not use more than 40 hours in a calendar year. Unlike unused vacation, employers would not have to pay employees for unused sick time at the end of their employment.

Do They Have to Prove It?

One issue that concerns employers is whether employees have to back up their need for time off. The new law states that employers can require certification of the need for sick time if an employee uses more than 24 consecutive hours of sick leave.

Any “reasonable documentation” signed by a healthcare provider must be accepted as sufficient certification of the need for leave, and employers are prohibited from demanding that the documentation explain the nature of the illness. However, it is unclear whether employers can require medical documentation for shorter absences pursuant to company policy.

Finally, when employees are aware in advance of the need for earned sick time, they must make a good-faith effort to notify the employer beforehand. The law does not suggest how much advance notice should be provided.

Bottom Line

Many employers, particularly small businesses, oppose the sick-time mandate.  Some are already operating on thin margins, and paid-leave requirements would undoubtedly add to growing labor expenses. Those in favor of the law contend that employees should not have to choose between coming to work sick and getting paid.

Recently, the debate has transcended employer groups. Last week Democrat Martha Coakley criticized gubernatorial rival Republican Charlie Baker for his opposition to the ballot question.

If you need assistance revising or adopting your employee-leave policies, contact experienced labor and employment counsel.


John S. Gannon is an associate with Skoler, Abbott & Presser, P.C., and practices in the firm’s Springfield office. Since joining the firm in 2011, he has defended employers against claims of discrimination, retaliation, harassment, wrongful-termination claims, as well as actions arising under the Family Medical Leave Act and wage-and-hour laws. He also has experience with lawsuits seeking to enforce restrictive covenants and protect trade secrets; (413) 737-4753; [email protected]

Business Management Sections
Massachusetts Export Center Helps Firms Do Business Overseas

ExportDPartTo Ann Pieroway, the statistics speak volumes.

Take, for example, the fact that Massachusetts companies exported more than $26.8 billion in goods last year — a 4.63% increase over 2012 — and ranks as the 17th-highest exporting state in the U.S.

Or that the Bay State ranks second nationally in seafood exports, third in medical-device exports, and fourth in the U.S. in high-tech exports. Or that 28% of the state’s manufacturing workers depend on international exports for their jobs, which ranks fourth nationally.

Those achievements don’t happen in a vacuum, said Pieroway, regional director of the Western Mass. office of the Mass. Export Center (MEC).

“We have a very simple mission: to help companies throughout the Commonwealth achieve success in global markets and contribute to economic growth in our state,” she said. “The goal is to maintain jobs or grow jobs.”

It does so by providing a range of resources to client companies, from counseling and technical assistance to market research and assessment, to a wide range of training programs to help businesses navigate the tricky, hyper-regulated world of exports. As for the center’s effectiveness, Pieroway said, the numbers speak loudly there, too.

“For our latest impact study, we sent out a questionnaire to our clients — significant clients, not just somebody we’ve answered questions for,” she explained. Almost 70% responded, and reported $240 million in financial return from their dealings with the MEC in 2011. “That’s not total exports; that $240 million for 2011 is their increase in export sales due to the help they’ve received from the Massachusetts Export Center.”

With a background in offshore manufacturing, Pieroway has been involved in the export arena since 1983, when she was appointed to the governor’s International Trade Council.

“Back then, there were 27 different groups that had their fingers in international trade, but no one primary group,” she said, explaining the germination of the MEC. Paula Murphy, who still serves as statewide director, got the program running 20 years ago, and Pieroway came on board soon after. “We’re a specialty center of the Mass. Small Business Development Center Network, which put the funding in.”

Ann Pieroway

Ann Pieroway says the success of the Massachusetts Export Center can be measured in the additional dollars exporters bring into the Bay State.

Today, the center is primarily funded by the Small Business Administration, with a matching commitment from the Isenberg School of Management at UMass Amherst.

The state contributes as well, Pieroway said, and studies show that, for every tax dollar it kicks in, $4 is pumped back into the state economy. “So we don’t get cut; we’ve always been level-funded. We put out an impact study that goes to all legislators, and everyone can see what we do — $240 million is a lot of money.”

She also noted that the $2.2 trillion in overall U.S. exports accounts for 9.8 million jobs. “Supposedly, every time you get a $125,000 increase in export sales, a job is created somewhere in the network. That’s very important to us here in the Valley.”

Helping Hands

While Pieroway wasn’t at liberty to name specific clients, she did cite a broad range of services the agency provides, including:

Export counseling and technical assistance. These services are customized to each client’s needs, and might include:

• Export planning and preparation;
• Assessment of export readiness;
• Export strategy and international business-plan development;
• Assessment and selection of target export markets;
• International sales and marketing;
• Identification and qualification of overseas customers and partners;
• International payment and financing;
• Export logistics, including shipping, documentation, terms, and controls;
• North American Free Trade Agreement compliance and eligibility; and
• Working with export service providers, such as international banks, law firms, and freight forwarders.

International market research and assessment. The center has access to a wealth of information on export markets. Examples of research provided to clients include:

• General information on doing business in different countries;
• Demographic, economic, political, and cultural information on different countries;
• Market size, characteristics, and trends;
• Trade barriers and regulatory issues;
• Detailed statistical information on U.S. exports by state, product, and country.

International business-development assistance. Through the center’s partnership with other state and federal government agencies, companies can take advantage of specific programs to market their products and services internationally. These services include:

• International business-plan development;
• Assessment and selection of target export markets;
• Guidance on international sales, marketing, and distribution-channel development and management;
• Identification and qualification of overseas customers and partners;
• Participation in overseas trade shows and missions; and
• Connections with state and federal overseas offices for in-country support.

Export training programs. Partners for Trade, the state’s official export training initiative, is a regional collaborative between the Massachusetts Export Center, chambers of commerce, trade associations, economic-development agencies, and the private sector, working together to present frequent seminars on international trade.

Partners for Trade programs offer Massachusetts companies an overview of topics like international marketing, legal issues, export logistics, international distribution, and others, including country-specific and industry-specific export issues. Much of the training is provided by international trade experts from the private sector, including international business lawyers, export consultants, freight forwarders, international bankers, and international business executives from area companies. On average, more than 1,000 companies participate in the Partners for Trade program each year.

The Massachusetts Export Resource Center. Launched in 2012, the MERC offers a wide range of instructional and practical information on exporting, including training modules, video guides, workbooks, and templates.

The bottom line, Pieroway said, is that the MEC deals in information — lots of it.

“When I first started this job 19 years ago, we used to get reports from the Department of Commerce monthly, and we would send requests to Amherst; our research people would send us a stack of paper like this to take to our clients,” she said, spreading her hands a foot apart. “We no longer have a research department; we do all our own research, or have our interns do research. The things available today were nowhere near available 20 years ago; it’s all Internet research now.”

That information is invaluable to companies navigating the often-thorny, heavily regulated world of international business. Pieroway told of a seven-month-long effort to help a client send a product to China. “Anything going to China gets extra scrutiny. They finally allowed it, with all kinds of conditions. I just pray this company adheres to those conditions.

“We’ve helped companies in every industry there is,” she added, “from agriculture to guns to butternut squash to cosmetics to precision machining — you name it,” she said. And whether a client needs a license or legal assistance or any of a host of other requests, “I connect them with somebody who can help them. We have a wonderful network of support across the Commonwealth.”


Ship Shape

The day she spoke with BusinessWest, Pieroway was preparing for a Partners for Trade seminar in Holyoke called “Fundamentals of Exporting.”

“We want people to have a basic understanding of the process. For some people it’s daunting — there’s a little more paperwork going international — but we achieve results the same way you would domestically: research your client and find out who they are.”

The MEC recently launched another program, called Compliance Alliance, a forum for exporting firms that offers:

• Periodic briefings that address a variety of regulatory compliance issues and provide an opportunity for exporters to network and share best practices with one another;
• Conferences and seminars that provide in-depth training across a broad range of compliance and operational issues. Speakers include exporters, law firms, consulting firms and representatives from government export regulatory authorities;
• An e-newsletter containing updates about current compliance issues and events; and
• Online resources, such as a member directory, a compliance resource library, and a job board.

That word ‘compliance’ comes up often for a reason, Pieroway said, adding that the federal government has tried to simplify international trade, but those efforts have often just made it more difficult.

“We’re doing a lot more webinars, so a lot more people can participate, from all across the country,” she said. “We’re known for our compliance training. We know what companies are going through, and we do a lot of hand holding here.”

That hand-holding has led to national recognition, especially in 2008, when the agency won both the Presidential E Award for excellence in exporting — the highest honor the federal government issues in the exporting arena — and the SBA’s Service Excellence and Innovation Award.

“This year, we won the SBA award for the state and for the region,” Pieroway said. “We feel we should have won the national award, too. I think they thought we’d won too much.”

A 2010 survey found that more than 11,000 Masschusetts companies were exporting goods — about 90% of them small and medium-sized businesses. Along with all the other resources the MEC provides, Pieroway boils a company’s international-trade success down to a strong commitment — of people and resources — by top management.

“You’ve got to have someone in charge of this,” she said, reflecting back to when a company’s compliance ‘expert’ was often a secretary tasked with figuring out how to move product out of the country. “So they became the experts. Now there’s more emphasis on training.”

Pieroway conceded that most companies still get involved in exporting by being reactive, not proactive — for example, when foreign buyers take an interest in a product at a trade show. But the world has been shrinking, so to speak, for a long time, and opportunities abound in other countries for businesses willing to seek it out and learn the ins and outs of exporting. And that takes work.

“You cannot do international business sitting in your chair in your office; you have to leave the country to be really successful,” she said. “It depends on your commitment — of time, personnel, and money.”


Joseph Bednar can be reached at  [email protected]

Business Management Sections
Executive Coach Helps Clients Get to the Next Level

Anne Weiss

Anne Weiss says that, while she sometimes helps clients affect change, more often, she is engaged in “tweaking” their habits and thought processes.

Amy Jamrog remembers the first time she met Anne Weiss — and coming away both impressed and more than a little scared, which, in this case, was a good thing.
“She thinks really, really big,” recalled Jamrog, a wealth-management adviser and principal with the Jamrog Group, affiliated with Northwestern Mutual, adding that her career in financial services was then about five years old and at what could only be described as a crossroads, which is why colleagues had referred her to an executive coach and, specifically, Weiss.
“If you mention that someday, one day, you hope to accomplish ‘X,’ she’ll want to get that done in the first year,” said Jamrog while elaborating on what she found scary about her new coach. “And that’s what we did; I told her my three-year vision for my practice, and she said, ‘why don’t we do that in 12 months?’
“She’s synonymous with ‘tough love’ — if you say this is what you want to accomplish, she will not let up in seeing that you do,” Jamrog went on, adding that, overall, what Weiss helped her find professionally were consistency, accountability, and a calendar that consistently generated a proper work/life balance as her circumstances changed.
And because she’s been able to do that for a number of clients, she’s considered one of the most successful executive coaches in this area.
Over the years, she’s grown her client portfolio to include bank presidents, lawyers, accountants, architects, executives with large corporations, owners of small businesses, and even some business consultants.
They all have specific needs, and all were at some kind of proverbial crossroads when they decided to seek out her services, said Weiss, but there is a simple and basic pattern to the client-coach relationship, one that she has mastered to the point where she now counts nearly 20 clients from both inside this region and well outside it.
“It starts with both parties being clear about the result that they want to be accomplished,” she said, “and then creating a plan to have that goal accomplished, and then holding people to account for accomplishing it.”
Sometimes, this accountability process requires a phone call a week, other times one lengthy meeting each month, she went on, adding that, in general, having a coach makes them more effective, gives them peace of mind, or both.
She said her coaching role, which is a huge part of her consulting practice, involves working with clients on any number of issues or challenges, from teaching them how to network (a critical skill when it comes to building a business) to advising them on setting and reaching goals, to enabling busy professionals to effectively learn how to say ‘no’ to some of those requests for their invaluable time.
“A lot of times, I don’t have the answer,” she said as she said as she talked about her work. “But in talking with the client, we come up with something that would be an answer, and then we say, ‘this is good — let’s go for it.’”
Overall, Weiss said, while she sometimes brings about real change in people, more often she is “tweaking” their style when it comes to everything from how they interact with people to how they manage time to how to become more punctual.
“Sometimes people need to change, and other times people need to be tweaked, but even tweaking can often make a profound difference,” she said, referring to both an individual’s career and a company’s bottom line.
For this issue and its focus on business management, BusinessWest talked at length with Weiss about executive coaching and how she uses that tough love Jamrog described to help get through the crossroads and into the fast lane when it comes to personal and professional growth.

Getting Down to Business

Amy Jamrog

Amy Jamrog says Anne Weiss helped her with many aspects of career and business development, the most significant being the ability to work consistently.

Weiss told BusinessWest that executive coaching is certainly not a recent phenomenon — people have been doing it for decades, and in recent years, as in many fields, it has become a specialized profession, with individuals developing niches in sometimes quite specific aspects of business management.
What might be considered new, she went on, is a realization among a growing number of business owners and managers that, while they may know their industry and vocation, they don’t know everything about succeeding professionally.
And this is why her client list has grown steadily over the years, with the notable exception of the peak years of the Great Recession, when many executives decided that, despite apparent need, they felt they just couldn’t afford a coach during those lean times.
The portfolio is now larger than it was prior to the crash of 2008, said Weiss, adding that this is both a good barometer when it comes to the economy and an indication that a growing number of professionals are becoming comfortable with the concept of hiring a coach.
When asked how someone will know when they’re ready for that step, she said simply, “when you need to produce something you can’t produce on your own.”
And in the business world today, that’s most people, she went on, adding that a coach can provide such individuals with a unique, outside perspective not available from a mentor, per se, or from someone inside a company or organization.
“I’m not their advisory board, and I’m not their board of directors,” she explained. “So there’s a level of accountability and understanding, so they’re free to be able to say, ‘here’s what’s working, and here’s what’s not working.’”
Weiss brings a broad range of experience to her role as coach. Earlier in her career, she worked in sales and marketing, and eventually segued into consulting, with a heavy emphasis on executive coaching. In the mid-’90s, she partnered with two others in a venture called TLD Consulting, which was based in New York, but has been on her own for the past 16 years.
Most all of her business comes from referrals, she noted, adding that she works with individuals in a wide array of sectors, including financial services, education, and manufacturing, and has assisted a number of entrepreneurs as they have struggled to take ventures to the next level or juggle several initiatives simultaneously.
As she elaborated on what she does and how she does it, Weiss came back repeatedly to the phrase “holding people accountable” for meeting or surpassing the goals they have set for themselves.
And she does so with a passion that that prompted Jamrog to summon not only that word ‘scary’ but also ‘intimidating,’ and another business owner to note in an online testimonial that she has “ruthless compassion,” which sounds like a synonym for tough love.
“She asks really hard questions and then waits for you to figure out the answer,” said Jamrog, adding that, shortly after becoming a client, she developed a strong desire not to disappoint the coach.
“When I had to be accountable to her, and pay her, that became a real motivator for me — when I told her I was going to do something, I didn’t want to let her down,” she said. “And that made it an interesting relationship, different from anything I’d had before. She wasn’t my boss, she wasn’t my mom, she wasn’t even a colleague, but I wanted to do what I said I was going to do, because she was counting on me. The coaching relationship is very interesting like that.”

Accounting Lessons
When asked what problem, or professional weakness, Weiss was most helpful with, Jamrog said it was consistency in her work.
“I would work really hard, then I wouldn’t, then I’d work really hard again, and then I wouldn’t,” she explained. “It was a very inconsistent — and also very stressful — way to work. She helped me really build in consistent practices that became habits over time.”
But that proved to be simply one of many ‘projects’ the two would work on over a coaching relationship that would last eight years and ended only because Jamrog had reached a point professionally where she was comfortable and simply didn’t want to take on any more projects.
Weiss said her clients have different motivations for seeking out her services. Many, like Jamrog, had reached a point in their career where they realized that to get to the next level — whatever that might be — they would need some help getting there. Others, meanwhile, don’t feel accomplished in their career, despite a decent level of success, and need help reaching that station. And still others understand that, while they may be good at what they do professionally, they need a coach to help them to maximize their potential, set the bar higher, and then clear the bar.
Sometimes clients simply need some help with those people skills that are often as important as technical ability when it comes to growing a book of business.
“It’s not the same dynamic anymore,” she said of business in general. “What used to be a handshake now requires a contract, and what used to be an old-boys kind of network isn’t like that anymore. Being in business requires a lot more networking, and one of the trends I’ve seen is that people need to be trained in how to network, in how to grow their business.
“Lawyers went to school to practice law; they didn’t know that they were going to have to be accountable for going out and growing their business,” she continued. “Architects thought their job was just to draw and build. Instead, they need to be the ones on the street meeting with facility managers and learning that there’s a new job at Smith College, and that company should get it.”
Beyond these hard lessons and the broad assignments of holding clients accountable for their stated goals for themselves or their company, Weiss said she also helps with that ‘tweaking’ she described earlier, noting that, quite often, seemingly small changes in style and performance can bring about significant impact in both the efficiency of an operation and how a leader is perceived by employees, customers, and the business community in general.
“If someone alters some way that they act — they’re on time, they answer e-mails, they return phone calls — those little things will matter in how people interface with that individual and how they respond to that person,” she said. “If you show up to a meeting with an agenda, start it on time, and end it on time, there’s a respect that people will have for you, and as you keep doing that, people will start to respond very positively.”
As an example of such tweaking, Weiss cited a local banking executive who was consistently late for appointments and, more importantly, not feeling accomplished professionally.
“So we took apart his entire job to find out why,” she explained. “And what we found is that he had said ‘yes’ to more requests to be on boards, to be on committees, to be on subcommittees to committees … it’s no wonder he couldn’t handle it all. He said ‘yes’ to way too many things, so we had to unravel and undo and revoke some of the things he had said ‘yes’ to and replace him on some of those boards and committees, while keeping him on in the things that mattered most to him.”

Coach Class
Weiss noted that, while her work can at times be frustrating — over the years, a few clients have eventually been deemed ‘uncoachable’ — it is usually quite rewarding.
That’s because people come to her when they realize that they need to produce something and can’t produce it on their own, she said, adding that helping them get there by asking the hard questions, working with them to find answers, and then holding them accountable for results is very fulfilling work.
This is the essence of tough love, or “ruthless compassion” in the business world, and Weiss has it down to a science.

George O’Brien can be reached at [email protected]

Business Management Sections
Clear Vision Alliance Helps Businesses Focus on Tomorrow

Ravi Kulkarni and Lynn Whitney Turner

Ravi Kulkarni and Lynn Whitney Turner say many business leaders make the mistake of focusing on their day-to-day operations instead of seeking answers about what it will take to grow in this economy.

Ravi Kulkarni and Lynn Whitney Turner say great vision is a journey, and business owners who create compelling visions focus as much on their personal growth as they do on business growth.
The owners of Clear Vision Alliance not only do consulting, but also speak across the nation, telling people that organizations stop growing when their leaders stop growing. They were once competitors, but joined forces in 2007 to help executives learn how to create new visions and strategies for growth.
Their advice is based on statistics gleaned from their clients’ histories, coupled with relevant case studies pertinent to each industry, and they told BusinessWest they have seen many business executives so focused on their day-to-day operations that they fail to seek — and grasp — opportunities for the future.
“We have asked CEOs in large organizations to tell us what their vision is, and none of them were able to articulate it,” said Kulkarni. “And leaders of nonprofits are all about immediate needs. They are not driven by passion and don’t know what is possible, so they aren’t able to come up with innovative programs.”
Turner agrees, and says many clients tell them that they ‘hope’ their business will do well. “But hope is not a strategy, and if you put all of your eggs in one basket and the plan falls through, the business can fail.”
They added that many businesses get stuck when their revenues reach between $2 million and $10 million, which often happens after the founder’s original goal is achieved. “The owner had a vision, took it to that point, and may not have looked beyond it,” Turner said.
Kulkarni concurs, and says many companies get into a comfortable niche once they know they can survive. “Some have been in business for 30 to 50 years and they justify their stagnation by saying they have reached market saturation, or, in the case of manufacturers, that there is an excess of things being outsourced.”
In addition, the many nonprofits in Western Mass. experience problems because their services often overlap, and competition to raise money through fund-raisers such as golf tournaments is fierce. “Although most of them do an excellent job in providing services, many are always in survival mode,” Kulkarni said.
Change is possible, but may never occur until a crisis looms, they said. This happened to a nonprofit in Kansas that called upon Clear Vision Alliance to help reformulate its business model when it was nearing bankruptcy.
“After they changed their marketing strategy, they were able to expand into Pennsylvania, Arkansas, Iowa, and Washington D.C., and grew from four employees to 23 employees,” Kulkarni said.
The basis of the nonprofit’s operation was an activity program used in schools, and it turned things around when it began marketing it by using up-to-date research findings showing there is a correlation between a child’s learning, behavioral problems, and the amount of activity they engage in (more about that later).
“People come to us when they run out of ideas; most of them have made strategic decisions based on emotion and opinions, but we are data-driven,” said Kulkarni, noting that applying principles of neuroscience, combined with the latest technology and a global market analysis, can make a world of difference.

Changing Paradigms
Many firms hold annual weekend retreats for their executives that never result in change. Although team members may seem to be in agreement during these meetings, Kulkarni and Turner say they are actually in “artificial harmony,” since power struggles, individual insecurities, egos, and biases play into what happens when they return to the office.
Teamwork needs to be inspired, she went on, by competent executives who hold healthy and honest debates, do research into best practices, and employ strict discipline.
But Kulkarni says problems arise because these leaders lack “strategic humility.” In the past, he explained, executives believed they had to have all of the answers and worked in isolation to find solutions to problems, with no one to challenge their assumptions.
Although that course of action is not effective in today’s marketplace, many don’t know what it will take to grow their business beyond the point it is at and don’t ask for help.
If they do, however, the first step is to make them understand it is critically important to invest in their own education, and Clear Vision Alliance accomplishes this goal through a series of questions.
“We ask clients how they will survive over the next 10 years, but many don’t have an answer,” said Kulkarni. “They cite past knowledge and experience, but that really isn’t relevant to the future. Technology has generated a gap between what they did and the way consumers will buy in the future, and their plans are not based on current data.”
He added that formulating a plan for continued growth should be an ongoing process, but when executives are queried about how their company is doing, 90% of them answer, ‘we are busy,’ and when they are asked, ‘are you making money?’ the typical answer is ‘we hope so.’
Turner says the word ‘hope’ is simply wishful thinking. and means the company is not using the right metrics to measure its growth.
Most of Clear Vision’s clients haven’t seen their revenues change much in the past 10 years, and although they think they are doing fine, when they are told to superimpose an annual rate of 2% to 20% in inflation over the next 10 years, they realize they will lose money if they don’t increase their earnings.
“It’s a wake-up call,” said Kulkarni, adding that one company he and Turner worked with had been in business for a century, but called upon the consultants because they felt they had reached market saturation. “We created an educational process for them,” Kulkarni said, explaining that they gave the executive team Harvard case studies and other reading materials applicable to their situation, then had them debate the cases.
“One CFO told us that, when he first did the reading, he became angry, then realized he had been doing something wrong,” he continued. “And this year, the owner told us, ‘you made me very uncomfortable, and it was a good thing,’ while the entire executive team had similar comments. When people say they are comfortable, it means they are complacent.”
Turner said many firms get into a mode of doing business as usual, and don’t snap out of it until a crisis occurs. “We try to circumvent that process,” she noted.
When a crisis does hit, many think it occurred without warning, but it usually happens because leaders have not looked ahead and kept up with changes in technology and the economy.
Kulkarni gave the example of a local precision manufacturer that invested $6 million in new equipment, hoping to get $10 million in business contracts from the defense industry during a time when the government was cutting back on military spending. “A catastrophe is often in the pipeline, but people don’t see it coming,” he told BusinessWest.
He gave another example of an area manufacturer who makes home insulation from newsprint. When its leaders called upon Clear Vision Alliance for help, home building was on the rise, but print newspapers were declining, so the owner was sending trucks to Pennsylvania to purchase outdated books, even though the quality of the paper in them was inferior to newsprint. “I asked him how long he thought it would be before his sources dried up,” Kulkarni said.
Another problem occurs when business owners want to retire and discover that no one in their family is interested in taking over, and there is a discrepancy between what they think their business is worth and what a buyer thinks is a fair price. As a result, they often keep working. “Some want to get out, but they can’t because they are attached to their employees,” Turner said.

Different Focus

Although it’s easy to get caught up in solving daily problems, many of Clear Vision’s clients make the mistake of directing their focus internally with the goal of improving their systems and productivity.
“They haven’t looked at the world outside and how it will impact them, which will not help them long-term,” Turner said.
Kulkarni said one client they worked with told them he learned that “bad strategy with great execution will get you in the wrong place that much faster.”
He said the Kansas nonprofit mentioned earlier was able to reach new heights by coming up with an innovative plan. But in order to create that, the top executives needed to see what was possible.
To facilitate that, Kulkarni and Turner took the company’s leaders to visit nonprofits in Connecticut and Tennessee, where research in neuroscience, technology, and behavioral science was being applied to improve programs.
“It opened new doors for them,” Turner said. “Once their minds were open, they began doing research, and a top university connected with them to work on a project.”
By keeping up with the times, she added, the nonprofit became eligible for federal and educational grants as well as other new sources of funding, because it had differentiated itself from other nonprofits.
“Private corporations want to invest in research projects which lead to project development and new partnerships,” Kulkarni said.
Although some executives think reading will keep them up with the times, Turner says it is not enough. “When they actually see and experience something, they are able to see what they can apply to their own business,” she said. “We make them do homework beyond their current direct competition.”
However, formulating a plan to move forward isn’t easy. It requires using objective data pertinent to a target market. In addition, bringing new ideas to the team members who will be responsible for implementing change and getting them to carry them out require honed leadership skills.
“It’s very common in large corporations for people to agree during a meeting, even though they will not pull in the same direction when they leave the room,” Turner said, as she continued to talk about how top executives need to become group facilitators, as opposed to the person with all the answers, which involves examining their style of communicating and whether they make people feel comfortable enough to speak honestly.

Bottom Line
Kulkarni said organizations grow stagnant due to a lack of focus and direction on the part of their leaders.
“They have no vision, have become comfortable looking inward, and don’t have knowledge of the skills and changes they need to have an impact,” he said.
“Great vision is a journey,” he reiterated, and the path executives choose can either inhibit growth or allow them to keep pace with today’s global economy.

Business Management Sections
There Are Many Applicable Lessons from Steve Jobs’ Succession Plan

By CHARLOTTE CATHRO

Charlotte Cathro

Charlotte Cathro

Former Apple CEO Steve Jobs passed away in October and left behind him an incredible legacy. He conceived and cultivated a successful and admired company, but a long history of health issues had investors concerned about where the business would be without him.
The company had been tight-lipped about their succession plan, leading to some speculation. The world was shown what Jobs intended for the company when he resigned in August and the plan was officially set in motion.
While a company as successful as Apple needs a plan on the largest of scales, there are some cues that can be taken to benefit all companies in planning for their future.
Jobs founded Apple with his high-school friend, Stephen Wozniak, in 1976, and the two transformed the personal-computer industry. After a disagreement with company executives, Jobs was ousted from Apple in 1985, but returned to take the helm in 1997 as part of a new management team. Upon returning to Apple, Jobs continually expanded the company with new innovations. What was a computer manufacturer became a conglomerate of music, software, and personal electronics. Jobs created a following for his sleek and modern design aesthetic. Keen marketing campaigns surrounded each new product in buzz. His charismatic presentations of new products were touted for their brilliance, and his own image became inseparable from Apple’s. It is this intertwining that makes Jobs an incredibly tough act to follow.
To ensure that Steve Jobs’ vision lived on, the company created Apple University. The university is a training program for Apple executives with high-level courses designed to instill Apple’s most important principles: accountability, perfectionism, simplicity, and secrecy. The project ensures that everyone is on the same page, and allows management to trust that the organization is acting with a collective brain.
Jobs took the project so seriously that he recruited the former dean of Yale University, Joel Podolny, to run it. While not all businesses have the resources to set up such a program, business owners can and should train employees to make smarter decisions independently. An education and training program fosters loyalty and a culture of self-improvement. It doesn’t just prepare them for when you are no longer running the business; building trust will allow you to transition responsibility over time.
When it came time to name a new CEO, Apple was ready. Jobs stepped down in August, and Tim Cook was appointed in his place. Jobs trusted Cook to take the helm for several reasons. First, Cook had a strong relationship with Jobs and considered him a mentor. He has respect for the vision and history of the company, and is not looking to completely revamp it now that he is in charge. He reportedly sent a memo to employees since he took over noting that Apple would not change.
Cook has a strong drive for success, which has gotten him this far in his career. As COO, Cook managed Apple’s enormous supply chain and enabled the company to post impressive profits. His experience will allow him to maintain Apple’s standing as a fierce market competitor. Most importantly, Cook loves Apple and its products.
Cook’s appointment in August was not his first time running the show. He had filled in on several occasions during Jobs’ previous medical leaves and had been in charge of the day-to-day operations of the business as of January. While it may have been Jobs’ continuous illness that required Cook to act as a standin, it served the succession plan well. Investors, analysts, and the public started to know his name, and employees of the company got a taste of what working under Cook would be like.
Field-testing executives allows them to get some comfort in the role, and gives opportunity for feedback. Businesses can begin by including protégés in meetings with major customers and suppliers and allowing them to create a rapport. Acclimating customers to future leaders can also result in fewer losses upon transition.
A succession plan doesn’t need to be a one-for-one replacement in leadership. Jobs had developed a team of advisors with specialties in different areas. This group includes Jony Ive, vice president of design; Scott Forstall, in charge of operating system software; Bob Mansfield, hardware engineering; and Phil Schiller, Apple’s marketing head. It is unknown whether roles within the organization will shift with Jobs gone, but this ‘two heads are better than one’ approach ensures that Cook will have a sounding board for ideas.
To follow the lead of Apple, companies developing succession plans should evaluate what skills are needed for future leadership and fill the gaps, spreading the abilities to supporting roles. Smaller organizations without the resources for multiple executives with different skill sets can retain consultants or send existing staff to targeted training.
Apple has reinvented itself several times over the years, and Jobs prided himself in knowing what the public wanted, even when they didn’t. A future for the company, then, needs to include continuous innovation. The vision for the future should not just be that of survival, but of growth.
In planning beyond Steve Jobs, Apple educated its employees, created a strong corporate culture, established a support team of differing skills, and test-drove their executives. To ensure that a company lives past its president, a succession plan needs to be more than just a decision. The plan needs to be in motion as an ongoing initiative.

Charlotte Cathro is a tax manager with the Holyoke-based CPA firm Meyers Brothers Kalicka, P.C.; (413) 536-8510; [email protected]