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bell•weth•er -noun: one who takes initiative or leadership
3
People ask the difference between a leader and a boss. The leader leads, and the boss drives.
s e c t i o n s
Theodore Roosevelt
4
Letter from the Editor
5
Book Report
6
Leadership
7
Sales and Marketing
8
Customer Loyalty
9
Cover Article
12
Industry news
14
Featured Article
16
Social Networking
18
State of the Economy
20
Leadership
22
Work | Life | Balance
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Bellwether Magazine | Second Quarter 2011
12 LEARNING FROM THE PRACTICING BAD PROFITEERS
14 18
To Be or Not To Be...
SOCIAL
LETTERFROMTHEEDITOR
BELLWETHER
A Blytheco, LLC Magazine Volume 2 Second Quarter, 2011 www.blytheco.com www.bellwethermagazine.com
STAFF
EDITOR Apryl Hanson CREATIVE DIRECTOR Greg Went CONTRIBUTING WRITERS Alicia Anderson Ron Baker Apryl Hanson Dick Lee Cortez NaPue Karen Price Dawn Westerberg Geni Whitehouse ADVERTISING SALES Dori Fitch SUBSCRIPTIONS www.bellwethermagazine.com Or contact Dori Fitch (800) 425-9843, Extension 1168 dorif@blytheco.com Bellwether Magazine is published by Blytheco, LLC with principal offices at: 23161 Mill Creek Road Suite 200 Laguna Hills, CA 92653 If you wish to be removed from the mailing list or to add names to the mailing list, send your request, including name, business name, and mailing address to the above address or to dorif@blytheco.com This is a copyrighted publication and all articles herein are covered by this copyright. Any use of the content for commercial reasons or other form or reproduction of material herein is strictly prohibited without prior, written approval of Bellwether Magazine.
bell•weth•er -noun: one who takes initiative or leadership
5
BOOKREPORT by Geni Whitehouse
Crush It! | Gary Vaynerchuk Short and sweet (and less than 15% alcohol), this book tells the story of a wine wholesaler who became an internet sensation. Gary Vaynerchuk has a passion for wine and he’s not afraid to share it. While his approach is extreme (he doesn’t sleep and never seems to stop working) he has a powerful message. The key is to have a maniacal passion for your idea. Businesses of every size can benefit from his success in using social media to share that passion. While you might not want to spend every waking moment being connected or getting social, you can learn a lot from his ability to create a community of dedicated followers – who eventually turn into buyers.
Evil Plans: Having Fun on the Road to World Domination Hugh MacLeod Famous for his cartoons on business cards, Hugh is an unlikely prophet. But he has a powerful and important message about doing what you love – which he calls your “Evil Plan”. He describes his own journey from advertising agency to blogger extraordinaire and throws in great stories and funny cartoons along the way. Like Vaynerchuk, MacLeod believes in going all out in pursuit of whatever it is that lights your fire. To be successful, MacLeod says evil plans for world domination have to be wrapped in excellent stories that lend themselves to socializing. It seems you can’t hatch a successful evil plan in a vacuum.
Who are you People? | Shari Caudron This book explores passion from the perspective of hobbyists. The author set out on a journey to uncover the motivation behind fanatical obsessions– she wanted to know what made these people tick. While she didn’t uncover the passion gene, she did gain insights into (and respect for) the power of shared passions in uniting people from diverse backgrounds. This book is great fodder for any business owner who is trying to build a community of raving fans – you never know what you can learn from Barbie convention attendees, Josh Groban fans, or the pigeon people. It’s a perspectiveshifter that might just open your eyes and give you new ideas that you can apply to your business. You might even end up with a new hobby.
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Bellwether Magazine | Second Quarter 2011
LEADERSHIP
Questions are the
Answer by Apryl Hanson
E
instein said “Failure and deprivation are the best educators and purifiers.” Applying that to leadership in business (or any other type of leadership) allows you the freedom to fail, and learn from it. I recently had a project that didn’t go as planned. It gave me and my team the opportunity to tear it apart, and start over from ground zero dissecting the things that went wrong. As leaders we have the privilege of asking questions of the people that we work with to help them get creative in learning from their mistakes, instead of feeling punished by them. In Managing for Results, Peter Drucker writes “Searching for potential of opportunity in a company’s vulnerabilities, limitations and weaknesses is therefore likely to be resented by its most accomplished people as a direct
• What is my gut telling me about this situation? • Were there any signs early-on that this wasn’t working that I ignored?
attack on their position, pride and power. This
If we allow ourselves the ability to self reflect as
is the reason why the opportunities are often
leaders we will develop teams that learn to self
not realized by the industry leaders but by
reflect, diagnose, and move on to solutions
people on or near the outside.”
instead of harping on issues in our businesses.
As leaders, how do we allow ourselves to stay close to the outside and not get wrapped up
Mastering this skill will require discipline but it will be very rewarding.
in emotion and ego when looking at business challenges? It comes back to asking yourself and others around you questions like: • What worked well about this situation, project (or what is working well in the business)? • What isn’t working well? • What would we do differently next time?
bell•weth•er -noun: one who takes initiative or leadership
7
SALES&MARKETING
A
t the macro level, there are only three pricing strategies: Skim, penetration and neutral. There is no doubt price can be an effective way to compete for some companies. Think of Wal-Mart, Southwest Airlines, Costco, Dell Computers, or Timex watches—all use a penetration pricing strategy. All have used price as an effective competitive differentiation, relentlessly driving out needless costs from their operations, passing the savings on to customers.
“
On the opposite side of the spectrum is Apple, BMW, Bose, Disney, FedEx, Godiva, Gucci, Lexus, and Nordstrom, all of which command premium prices—a skim pricing strategy— because they offer premium quality, total quality service, and exceptional customer experiences. In the middle are companies such as, Buick, Seiko watches, JC Penney, Sony televisions, and Toyota, where price plays a more neutral role.
Penetration Pricing
by Ron Baker
Penetration pricing is when the company decides to set the price below the product’s value to the customer, thereby ensuring a larger customer base. It is the trade-off of higher revenue versus higher margins, and can be a very effective strategy especially for new entrants into particular markets. Penetration prices are not necessarily cheap, but they are low relative to perceived value. For instance, Lexus used a penetration pricing strategy to bring Mercedes, Audi, BMW, and Porsche to their knees when it launched its LS (luxury sedan) 400 in early 1989 at $35,000, 40 percent less than BMW, Mercedes, and the same as Cadillac.
In any market, there are a certain segment of buyers who are relatively Penetration pricing can be used at any price insensitive stage in the service life cycle, and is usually after a steady customer base is because they value deployed established to drive revenue. To reiterate, though, it is a price set relative to the the offering so product’s value, not a competitor’s price. Do not let your competitors determine highly.
Far more consideration should be given to which of the three generic pricing strategies will guide the company’s pricing. Let us examine them to gain an understanding of which strategy is appropriate given the realities of the marketplace.
Skim Pricing In any market, there are a certain segment of buyers who are relatively price insensitive because they value the offering so highly. Think of early adopters in the technology industry who rush to purchase the latest and greatest gadgets, newest high-speed computers, printers, and audio equipment. Skim pricing is a conscious decision to sell to this segment at premium prices more commensurate with value, thereby earning more profit than could be made selling at a lower price to an albeit wider market. The company is not so much interested in market share as it is in extracting the perceived value from this smaller segment of the market.
your price, as they have no interest in your company’s long-term viability.
Neutral Pricing The neutral pricing strategy is generally a default strategy. In effect, this strategy minimizes the role of pricing in the marketing mix, not utilizing price to gain or restrict market share. A firm may select this strategy when it knows its product, promotion, or distribution offers other more powerful advantages to the customer. The neutral price does not mean a price in between that of competitors, but in relationship to the firm’s value. Apple laptop computers and Sony televisions, for example, are consistently priced above competitor levels, but because they offer such excellent value, the market still perceives the price as neutral. Which pricing strategy does your company use?
Ronald J. Baker is founder of VeraSage Institute and the best-selling author of The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services; Pricing on Purpose: Creating and Capturing Value; Measure What Matters to Customers: Using Key Predictive Indicators; Mind Over Matter: Why Intellectual Capital is the Chief Source of Wealth; and his latest book, Implementing Value Pricing: A Radical Business Model for Professional Firms, from which this article has been adapted. E-mail him at Ron@verasage.com and follow his blog at www. verasage.com.
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Bellwether Magazine | Second Quarter 2011
CUSTOMERLOYALTY
DELIVERING ON COMMUNITY
W
hat does community mean to you? Our world is changing! I knew that there was a turning point when I was at my favorite restaurant I have been going to for 15 years and the owner says “Are you following us on Facebook?”
The traditional meaning of community has broadened to
communities look like? What can we do to put our best
include online groups who are aligned with a brand or
foot forward?
cause. Often these communities include a movement of customers raving about a particular product, or binding together to fight against a brand. As a company, what can you do to share in the building of your community?
Chris Brogan, President of Human Business Works, an online education and community company for small businesses and New York Times bestselling co-author of Trust Agents, says in his blog (www.chrisbrogan.com) that successful
As customers are collecting together on
communities will require authentic loyalty, to and from the
different social media landscapes
customer. However, he states “Oddly, loyalty programs of
like YouTube, Twitter,
today push the reverse of loyalty: sign up and we will beat
Facebook and
you with even more mail than people who casually swing by.
LinkedIn, what
Sign up and we’ll bother you until you buy. Sign up and we’ll
will the future of these
share your data with other people.” This has to shift. Membership in a customer community needs to be more of a shared value experience. Loyalty should mean “feeling like you’re on the inside” and gaining access to the exclusive benefits of the group, whether those benefits are as simple as information, or as “real” as discounts or other gifts. This emphasis on community puts more pressure on small businesses to take their brands online, but without someone to listen and correspond with community members, you leave your brand to chance. There are plenty of software packages that can make it easier to engage with clients and decrease the amount of time that it takes to stay involved. This is new territory for most businesses yet we are increasingly feeling pressure to participate.
by Apryl Hanson
bell•weth•er -noun: one who takes initiative or leadership
9
The goal is for you to fall in love with your business again.
Geni Whitehouse SPEAKER AUTHOR CONSULTANT NERD She’s been called the “comedian CPA.” A self-proclaimed nerd, experienced software executive and former CPA firm partner, Geni Whitehouse has made it her mission to eliminate boring from the world of presentations.
Marketing Strategy Marketing Plan and Calendar Campaign Development Marketing Metrics Content Development Public Relations Social Media
STRATEGY EXECUTION EVANGELISM CONTENT DEVELOPMENT
Begin a process of fun work with the purpose of awesome results.
www.dawnwesterberg.com
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Bellwether Magazine | Second Quarter 2011
CUSTOMERLOYALTY
Courting our Prospects: Marketing Tactics that Say “I Realize that You are Special” by Dawn Westerberg
Y
ears ago, a coworker shared the account of meeting the woman who was to be his future wife. In courting her, he was relentless in making sure that his sweetheart was receiving regular
deliveries of cards, candy, flowers and later jewelry. His strategy? “If there was anyone she was even remotely interested in, they would have to run very fast to keep up with me.” Through a variety of actions and behaviors he was telling her “I realize that you are special.” “I will go out of my way to make you feel special.” Good marketing has that kind of energy and focus behind it.
particular communications preference they have. Use email
Good marketing says to your prospects: I realize that you are
to congratulate them on the good news about the company
special and I will go out of my way to make you feel special.
that you learned through alerts. Use snail mail to send an interesting article or helpful tool. Use lumpy mailing to send
Do you have a sweetheart list? A sweetheart list is a short
a logo’d item.
list of accounts you would love to have. Maybe it’s based on the characteristics of the company. Maybe it’s based
This could also be called guerilla marketing. All of your
on the fact that the company has name recognition or is a
activity is saying “I realize that you are special.” “I will go out
forward-thinking leader in your market. Whatever the reason
of my way to make you feel special.” After 6 months of this
– doesn’t it make sense to approach them with the following
kind of focus, you will have mindshare. You may then chose
purpose in mind? “I realize that you are special.” “I will go
to place them on your nurture marketing list and select
out of my way to make you feel special.”
another company to take a spot on your sweetheart list.
Let’s say you have a sweetheart list of 12 – set up a Google
Here are possible results:
Alert for both the company and the contact. Every time you get interesting news via Alerts you have a reason to email
Nothing will happen. (Rare, but a potential reality.)
or call. The efforts of their current provider will be compared to Have you searched them out on Twitter, Facebook and
your efforts. Chances are very good that (sadly) their current
LinkedIn? Try to make a connection via social media. If
provider isn’t in the “I will go out of my way to make you feel
they are on Twitter, you can respond to their Tweets or RT
special” mode. You will have preferred mind share.
(retweet) their observations and links. If they are posting on Facebook, you can leave a comment. If they connect
They may not be in a position to buy from you yet, but your
with you on LinkedIn, you’ll be alerted as to any change
efforts have been noticed, and there is a likely chance that
in their status (promotion, move to another company) and
when faced with an opportunity to make a referral, they will
if they participate in any groups, you’ll know that as well.
point another prospect to you.
It’s probably worth your time to join the group as well if it’s When they are ready to buy, you will have done such a good
appropriate.
job of distinguishing yourself from the competition, the odds Do they have a blog? The fastest way to a blogger’s heart is
will be in your favor to win the business.
a thoughtful contribution to the comments section. Remember, it’s not enough for them to decide “I need to Use every platform to communicate (I’m not suggesting
buy XYZ product or service.” Rather you want them to be
you spam them). Observe their habits and see if there is a
thinking “I want to do business with [Your Name Here].”
bell•weth•er -noun: one who takes initiative or leadership
11
COVERARTICLE LEARNING FROM THE PRACTICING BAD PROFITEERS
by Apryl Hanson It isn’t that Wells Fargo should be specifically pointed out, but many banks have adopted similar processes creating an industry norm and underwhelmed customer allegiance.
In your industry, are
there things that have developed as industry standards that create a negative customer experience? These things are somehow overlooked because we accept the fact that this is how business is done.
Why? Instead, might we be able to envision a different way of doing business outside of the norms that creating uniqueness and delivering an over the top customer experience. Marketing
B
ain and Company just released (2010) its study
books talk about your unique value proposition but most
on Customer Loyalty in Retail Banking for North America.
businesses believe that what they deliver uniquely is their
We all know that bank practices and customer service have
“customer experience”. While that may be true, I’d challenge
been on a trending downturn for what seems to be most of
you to think of your business from outside itself, from the
the past ten years. In fact, most feel held hostage by their
position of your customer looking in. Your customers,
bank in a never ending battle.
industry standard or not, have the key to what could be you
In a blog article by Fred Reichheld, author of The Ultimate Question, he states that the New York Times reported in October that a federal judge “ordered Wells Fargo to pay California customers $203 million in restitution for claims that they had manipulated transactions to maximize the overdraft fees they charged.” Instead of processing transactions in the order in which they were received, Wells Fargo put through the largest to the smallest. In a stinging 90-page opinion, United States District Judge William Alsup wrote that the practice was unfair and deceptive.
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Bellwether Magazine | Second Quarter 2011
leaving profits on the table.
So what are bad profits? Bad profits are charging more for something without increasing the value that customers are receiving or being deceptive in how you are doing business. We all should be in the business of providing something valuable to our customers and it should create a win-win situation. The customer benefits from what they receive, and you benefit from what you receive.
How can you measure your relationship with your clients?
Company study, if there were a bank that would stand out
In Reichheld’s book he talks about
•
from the normal day to day business, and increase their NPS score the benefits would be: Customers who are promoters stay longer with your
the Net Promoter Score (NPS)
company than those who are not promoters and in
which is a loyalty gauge for
general cost less to serve.
your business to understand the ongoing relationship and potential
•
more than one that is a
recommendations your clients will
detractor
give. I like to think of it as a way of measuring the good or bad press
•
that is out there about your
HAPPY CUSTOMER
A promoter customer is worth
You can have a growth rate that is
company. Think of it as what
higher than your
someone would say to a friend
competitors
if asked about your company.
This is measured by a survey process in which the customer is asked “On a scale of 0-10 (10 being the highest) what is the likelihood that you would recommend XXX company to a friend or colleague”. The answer to that question gives you the ability to
Would that be something that is worth exploring for your business?
measure if you have:
These points aren’t unique
ANGRY CUSTOMER
to banks, but would be the
benefits to any business
•
Promoters – those who respond with a 9 or 10
delivering high customer loyalty. As discussed above, we
•
Neutrals – those who respond with a 7-8
•
Detractors – those who respond with a 6 or below
can learn from watching businesses get it wrong, regardless of the industry. Take a look at your relationship with your customers and see what you can do to remove bad profits and increase your NPS.
You then add up the total’s you have in each category, and calculate your percentage of Promoters, Neutrals and
We would love for you to share your ideas on how you create
Detractors.
unique customer experiences by writing your thoughts to: ‘customerexperience@blytheco.com’
% of Promoters - % of Detractors = Net Promoter Score (NPS) Your NPS helps you understand the health of the relationship with your customers and links to future profitability. For a deep dive on this I highly recommend you read Reichheld’s book. There is really an
overwhelming
amount of data on this, and you should be measuring this for your business. According to the
Bain
and
“
We all should be in the business of providing something valuable to our customers and it should create a win-win situation.
CONFUSED CUSTOMER bell•weth•er -noun: one who takes initiative or leadership
13
INDUSTRYNEWS
by Cortez NaPue With the economy tanking over the past few years, it’s no surprise that many banks are hiking their maintenance fees in order to pass the cost on to their consumers. The Fed has already implemented new banking legislation with new policies that limit the types of fees that banks can charge, however, banks, as clever as they are, have already figured out ways to divert the expense to their customers. Banks’ recent repositioning of fees is a direct result of the newly implemented Card Act, which bans a handful of fees, including certain overdraft and excessive late charges. The new legislation also prevents over-thetop interest rate hikes. Most recently, the Federal Reserve proposed a cap on debit interchange fees which is what the bank charges retailers when customers swipe their cards. In light of this, most of the nation’s largest banks have completely revamped their fee structure, introducing a whole new set of accounts for consumers:
“
J.P. Morgan Chase Feb. 8th that all new customers would be enrolled in a new Total Checking account. The account will charge you a $12 monthly fee unless you maintain a checking account balance of $1,500, make monthly direct deposits of at least $500, or keep a $5,000 balance across all deposit accounts -- including checking, savings and investments.
- Chase announced on
Free checking is going to become less prevalent, but it’s not going to go away like the dinosaurs.
If you keep your old account, you’ll get charged a $6 monthly fee unless you make a direct deposit of at least $500 per month OR make five debit card purchases.
14
Bank of America
Similarly, Bank of America announced that they will restructure all of their checking accounts by year end. B of A’s new fees will range anywhere from $8.95 to $25 per month with the possibility of being charged up to $300 extra per month for any account infringement. But customers could get those charges waived if they make at least one direct payment each month or maintain a balance of $1,500. This feature will be eliminated by year’s end (2011) and all BofA checking accounts will be $8.95 per month unless…
Bellwether Magazine | Second Quarter 2011
You enroll in an “enhanced” checking account and keep a balance of $5,000 in your total linked deposit accounts, which include checking, savings, and investment accounts. You could also choose to deposit at least $2,000 monthly, or use a linked credit card at least once a month. If your balance drops below $5,000 or you don’t meet the other requirements, you will be charged a $15 fee.
Citibank - In September 2010, Citibank began charging monthly maintenance fees of up to $30. The basic
checking account charges a monthly maintenance fee of $8 unless you complete five or more monthly transactions, including direct deposit, debit card purchases, bill payments, check payments and/or ATM cash withdrawals. Citibank also offers an alternative that charges you a fee of $20 unless you maintain a $6,000 monthly balance in linked accounts -- including checking, savings and investments.
Wells Fargo - Ended its “free checking” account in July and now hits customers with a $5 monthly fee unless a minimum balance of $1,500 or monthly deposits of $250 is maintained. Its other accounts charge fees up to $30, but they can be waived if you meet certain requirements, like maintaining higher minimum balances or making automatic transfers to your savings account. Every Wells Fargo checking account has a free option – something that sets this bank apart from the others.
Wachovia - Customers still get to hold on to their free
checking accounts, but they will be fully integrated with the bank’s other fees soon enough-- including $2 charges to receive images of cancelled checks and $10 fees for using your savings as overdraft protection.
HSBC - This bank hasn’t made any major changes over the past year as their basic checking accounts are still charged $3 a month with no way to avoid it. Choice account users can avoid a monthly maintenance fee of $8 by using direct deposit, keeping at least $1,500 a month in deposit account balances, or by maintaining a
balance of $5,000 across all accounts -- including deposit accounts, credit lines and investments.
How to Avoid The Fees…For Now - While it may seem that the death of free checking has arrived, there are still ways to make your account free. “Free checking is going to become less prevalent, but it’s not going to go away like the dinosaurs,” says Greg McBride, a senior financial analyst at Bankrate.com. He further says that “65% of financial institutions still offer free checking, while 23% offer an account where fees can be waived with actions such as direct deposits.” Bank of America however, will not offer free checking of any type come year-end 2011. “The upshot for consumers is that what will become more prevalent is the ability to avoid fees with certain options that best suit their needs, like direct deposit, using online statements or having aggregate balances with banks,” McBride said.
Fees’ Affects on the public - The new round of fees appear to fall disproportionately on the families of lower-income persons. As evidenced by 67% of all overdraft fees owed in 2008 belonging to lower-income persons, it is projected that some 72% of all new banking fee expenses will be placed on lower-income families. With the nation’s unemployment rate at 9% and close to 50 million Americans living below the poverty line, it is a wonder how families will balance the need to have a bank account with the expense of owning one.
PRICING ON PURPOSE presents the theory of value - long established in economics - and details how any business can use various pricing strategies to create, communicate, and capture the value of their products and services. It takes a new approach of focusing on the external value as perceived by the customer and advocates matching price to value. Written in everyday language so it’s valuable to beginning executives as well as professional pricers and marketers, it covers: What and how people buy The fallacy of commodity thinking The five Cs of value The market share myth The difference between cost-plus pricing and value pricing A comparison of the Subjective Theory of Value and the Labor Theory of Value Customer segmentation strategies
This and other Ron Baker books are available at www.verasage.com
bell•weth•er -noun: one who takes initiative or leadership
15
FEATUREDARTICLE
The Growing Importance of Business IT Interpreters
by Dick Lee
W
e can divide even most small companies into three elements: production; front/back office and service settings, including management (which all together we call the “business” element); and IT – with service organizations typically lacking the production aspect. Similarly, we can divide companies into three language groups: by Alicia Anderson “manufacturing-speak;” “native language” with industry-specific language in office and service; and tech-talk. Unfortunately, few in most companies speak all three. This language barrier doesn’t pose a huge problem
service work settings, we frequently ask, “Why are you still
for manufacturing folks, because they’re mostly off by
doing this manually?” Often, we hear back, “Well, IT built
themselves, unless implementing ERP – and even then,
us a system but it doesn’t do what we need.” Or, “The
the bulk of ERP users reside in the back office, not on
system we bought (sometimes without IT involvement)
the factory floor. However, business and IT not sharing
doesn’t work.”
a common language is a huge problem. Just ask either side about accuracy of communication following any ERP, CRM, HRIS or other implementation. In fact, based on our experience, failure to communicate causes far more systems disappointments and outright face-plants than flawed technology. Watching business and IT communicate often reminds me of a tee-shirt my son wears, saying: “I can see your lips moving, but all I hear is blah, blah, blah.” But it’s not funny. Companies still pour billions down the drain every year, investing in systems that only partly meet business needs, or in some cases don’t meet them at all. In our customer-centric process practice, focused on office/
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Bellwether Magazine | Second Quarter 2011
Stepping back and seeing the big picture, rarely are these failures obviously either side’s fault. Both sides often speak in separate tongues, thus neither understands the other. But I should add, and I’m “safe” to say this because I am from the business side, business often makes only token efforts to communicate, believing IT should somehow “get it.” ESP, anyone? As if all this isn’t problem enough, empowered customers are pushing office/service process towards improving customer experience – an external goal - while remains accountable and measured by internal efficiency.
Getting past “blame”
that: design “outside-in,” from the customer perspective;
When companies engage us, among the first questions we
automation software to deliver value to customers; and
ask are: (to the business side) “Is IT giving you everything
consider business and technology an integral unit, with
you need?” and (to IT) “Are business folks telling you what
practitioners required to be fluent in both disciplines – and
they need?”
both languages.
We used to have to step aside to avoid getting blown over by
This new approach to process fills the communication gap
the heat of the responses. Today, relations between business
and then some. But adopting relatively new approaches to
and IT are far more civil, but that’s just a progression from
anything requires forward-thinking management. And the
unfriendly dysfunction to friendlier dysfunction. And neither
communication gap will stay with us as long as we try to
leverage systems architecture design and especially
“
side usually takes responsibility, preferring to blame the other. To heal the wounds and prevent recurrence we make sure IT has a seat at the table during our cross-functional team meetings where
we
conduct
attack today’s problems with legacy
approaches designed for I can see your lips process manufacturing. Companies need to adopting the new, integrated moving, but all I start process/technology approaches in their office and service settings hear is blah, blah, to finally close the business – IT communication gap. blah.
process
analysis and redesign. I wish I had a tape of all the discoveries that occur: “Oh, is that what you
wanted?” “Heck, our current system can do this;” “I never knew you needed this data,” and so on and so on.
Process should be interpreting How should we be addressing the issue? If we parse out organizations a bit more we see a sub-element nestled between business and IT – process – which is perfectly situated to interpret between business-speak and tech-talk. That’s the good news. The bad news is most process people cut their teeth in production process using production process techniques – especially Lean Sigma and the elements thereof – which has exposed them to neither
systems
architecture
issues
and opportunities nor the plethora of automation software now available. Process may be perfectly situated, but it’s imperfectly skilled and still reliant on production software approaches.
Getting to effective communication Fortunately, forward thinking process professionals
are
beginning
to
practice new process approaches
bell•weth•er -noun: one who takes initiative or leadership
17
SOCIALNETWORKING
To Be or Not To Be...
SOCIAL by Cortez NaPue
W
hether you use it or not, you’ve probably noticed a massive transition to social media and an increased need for employers to develop social media policies. With this transition comes many complexities for businesses and their employees. Can an employee access their Twitter account while at work? Are employees allowed to comment about workplace environments on their Facebook pages? The answer is tricky, and employment law can often differ from state to state. The key for businesses in accommodating the constant evolution of social media use is to know both federal and state law regarding this kind of activity and to develop a commonsense company social media policy.
The Legality of Using Social Media In and Out of Work
at work and although it may
Earlier this year, the National Labor Relations Board (NLRB)
content outside of work.
filed a claim against American Medical in Connecticut for violating federal laws that prohibit employers from terminating employees for private communications. Similarly, a Manhattan law firm has recently filed suit against J.P. Morgan Chase alleging that they wrongfully terminated an employee for writing novels and blogs under a pseudonym. The firm claims that J.P. Morgan violated New York Labor Law Section 201, which proscribes discrimination against employees for engaging in lawful recreational activities outside the workplace. The prior case was privately settled so it is not quite sure if any precedents were set, however the NLRB did make its position clear. Attorney Anthony Haller, chair of the employment, benefits, and labor practice group at the law firm Blank Rome in Philadelphia, points out that the two mentioned cases are unique in that they involved activity that occurred outside of the workplace, but further says that companies generally and legally own all communications that occur on their networks and that there is “no expectation of privacy for the employee.” The moral of these cases is to think twice before accessing any social media portal while
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Bellwether Magazine | Second Quarter 2011
be legal, to always use your better judgment when posting
Developing and Enforcing Your Company Social Media’s Policy Social media (Web 2.0) is not a fad. Its creation has changed incredibly the way we communicate on a daily basis and has provided new opportunities for businesses to reach consumers.
Because
of this, a company’s goals in developing a social media policy should not be to stifle its use, but to take advantage of it while protecting company interest and minimizing potential risk. Here are a few Do’s and Don’ts to creating a realistic social media policy:
DO’s C
reate a policy that encourages the appropriate use of social media. Your employees are usually your biggest evangelists and if allowed to speak organically, will often increase
positive recognition of your brand by others
D
ecide the overall purpose of your social media policy and how it relates to other company policies. A social media policy can often be used to strengthen other
policies such as external/internal company communication and various human resource policies
B
e sure to be clear about social media use in the work place. Many companies’ policies refer broadly to using social media and often fail to differentiate
between work and personal use.
M
ake sure to refer to your company’s confidentiality agreement, which often supersedes company communication policy.
While it may be ok to post things on Facebook or Twitter outside of work, it is never ok to post trade or company secrets in any form of communication.
W
hen wording your social media policy be sure to use non-restrictive terms that allow for the constant
changes in social media. You don’t want to be stuck with a
policy that becomes frequently outdated.
DO NOT’s D D
o not develop a social media policy without first reviewing all federal and state laws as they relate to your company’s location. o not discipline an employee for violating your company’s social media policy until first consulting with an attorney. As social media is
consistently changing, so are the laws involving it.
D
o not view private social media content without permission. Viewing someone’s private profile (by method of hacking, coercion, password
theft, etc) without their expressed permission is not only a violation of privacy, it can also open the door to a myriad of discrimination lawsuits as profiles usually contain a massive amount of personal information
D
o not develop policies that in any way prohibit an individual’s freedom of speech outside of the workplace
D
o not develop a social media policy that deters employees from or frightens employees into not using its resources. Social media has quickly become an everyday part of many lives and reports indicate that companies
with restrictive social media policies are often struck with low employee morale.
bell•weth•er -noun: one who takes initiative or leadership
19
STATEOFTHEECONOMY
Fraud Prevention & Document Security
It’s human nature to have a tendency to file certain events under “won’t ever happen,” for example: A real estate bubble | A giant oil spill | A break-in at your home or office | Fraud committed on your bank account Obviously, these things CAN and DO happen.
by Karen Price
With annual losses estimated at over $20 billion, check fraud is a major problem impacting banks and their clients. The American Bankers Association has stated that check fraud is growing at 25 percent per year. Fraudsters are continually looking for ways to outsmart “the system” and using new technology. Check fraud is one of the fastest growing financial crimes in America. Check 21, a 2003 law that enables electronic processing of checks and conversion of paper documents to electronic images has made fraud detection more challenging. Checks still account for approximately 42% of all non-cash payment and are the single greatest source of payment losses. Check fraud is also a recession proof growth industry. How does it happen? Maybe a business owner gets a call from his banker to ask about a questionable check being presented for payment at the bank, or an accountant notices that three checks in last month’s bank statement are all written to an unfamiliar person despite a realistic signature. A small business owner is notified she is overdrawn and realizes that a check originally written for $32.69 has been changed to $3,269.00, or after the layoff of their bookkeeper, the partners in a professional practice notice checks written on their account outside of their numeric range.
Types of Check Fraud include: • Stolen checks • Forged signatures, • Identity theft • Alteration of “pay to” or “amount fields” • Counterfeit check stock • Erroneous “ship to” address
• Cashier check schemes • Check kiting, paperhanging • Dumpster diving • Phishing • Hacking • Skimming • Malware
• Scare ware • Phony orders • Bleaching • Scraping • Photocopying • Scanning and washing
Protection Starts with Basic Check Security Features Layered features (combination of printed and resident in the paper) verify authenticity and make it more difficult to alter or reproduce. Look into using chemical sensitive paper, background patterns, warning borders, consecutive numbering, a padlock icon, micro printed borders, invisible fluorescent fibers, thermo chromic (heat-sensitive) ink, security warning box on back, or a security screen on back. Advanced features include foil holograms, toner adhesion, high security background patterns, high resolution border elements, chemical wash detection area, laid line backer, and true watermarks.
Partner with your Bank for the Highest Level of Protection Positive Pay is a service many banks offer. It consists of sending you an electronic file daily of checks that have come in to clear. They provide check number, date, and dollar amount. You can cross-check this against your records to verify legitimacy and immediately disallow any checks that don’t match your records. Positive pay can also provide your bank with accurate data of checks you plan to issue so that when presented for payment, they must match the information sent to the bank.
About the author: Karen Price has been a Safeguard distributor since 1982 and specializes in helping companies Manage. Grow. Succeed.® with simple, dependable business and promotional printing that supports your business needs. Her knowledge and experience help create effective results that make an impact for you. In addition to experience working with thousands of types of businesses over the last 25 years, as a long-time student of E-Myth principles and Kennedy-Glazer marketing strategies, Karen Price brings a unique perspective and wealth of information to her customers to partner with them in achieving their business goals.
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Bellwether Magazine | Second Quarter 2011
5
STATEOFTHEECONOMY
Five Things Small Businesses Need to Know about Taxes in 2011 by Alicia Anderson
1. Burdensome 1099 requirement repealed
The Patient Protection and Affordable Care Act (i.e., Health Care Reform) included a very unpopular requirement that small businesses file 1099s for all purchases over $600 – a rule that would have created many headaches for small business folks. The February, 2011 repeal was supported by Republicans, Democrats, and anyone who runs a business, although legislators are still working out the specifics.
2. New credits and deductions Eligible businesses with fewer than 25 employees can receive tax credits for paying part of their employees’ health insurance coverage. Self-employed business owners may also receive a deduction for health
insurance costs.
3. States are in financial crisis State tax revenues are in decline due to the recession. Lack of job growth means this decline will likely be sustained through 2011. Over 30 states have raised taxes in turn, some quite significantly, and some are creating or raising new fees or assessments, some targeted at businesses, to help with the shortfall. States may also choose to up unemployment insurance rates to replenish funds deleted by those without work.
4. Enforcement efforts are growing Federal budget deficits mean the IRS is on the hunt for non-compliance to boost revenues. Audits are focused on employment tax, including
executive
compensation,
employee
status,
benefits, and other general tax specifications.
5. It’s complicated Not surprisingly, tax changes come with many specific rules and regulations, and detailed filing instructions. Don’t go it alone. Good software programs are inexpensive and help guide you through the process. Your CPA is even more reliable and can help ensure you file correctly and on-time.
bell•weth•er -noun: one who takes initiative or leadership
21
STATEOFTHEECONOMY
OUTSMART AIRLINE
FEES!
Airline fees stink, but they aren’t going anywhere for a while, it seems.
by Alicia Anderson
T
hose annoying baggage fees or change fees are one of the big reasons that some airlines reported profitability in 2010. Airlines are desperate to regain revenues in this time of high oil prices and a travelling public used to cheap internet fares. For Spirit Airlines, an “ultra low-cost carrier” based in
free, and members get “benefits” like free baggage
Florida, fees represented 26.9 percent of its revenues.
checking.
Some of the more popular (with airlines, not consumers)
• Credit card payment fees – It costs airlines money to
fees – and tips for avoiding them - include:
accept credit cards, but many will waive this fee if you pay
• In-person check-in fee - Online services are replacing employees, so if you insist on checking in at the airport in person, you’ll be paying their salaries. Check in online whenever you can. • Seat selection fee – If you want to choose an aisle, window, or extra legroom, plan on paying roughly an extra $20. Avoid this by being flexible about where you sit. • Checked baggage fees - Delta charges $25 for the first checked bag up to 50 pounds. For additional bags or weight, additional fees apply. Travel light, or sign up for the airline’s loyalty program. These programs are usually
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Bellwether Magazine | Second Quarter 2011
with an airline-branded card, like the Delta SkyMiles card. This fee seems unavoidable, unless you think showing up at the airport with a stack of cash is a good alternative. • Comfort fees –Charges for blankets, pillows and food are already in place. On JetBlue, and pillow and blanket set will run you $7. Snacks and light meals can run up to $10, though soft drinks are usually still free. Some airlines have even considered charging a fee for restroom use. Bring your own sweater, snacks, and empty bottle to fill at the water fountain when you get through security. As for the restroom fee…let’s just hope it doesn’t come to pass.
WORKLIFEBALANCE
Finding Balance “The true value of a human being is determined primarily by how he has attained liberation from the self.” Albert Einstein Finding balance in all things is more of a mind-set than something you physically do. Peter Drucker wrote “Half a loaf is better than no bread”. I think we have a tendency to beat ourselves up about what we aren’t doing when we are doing something that we would rather not. We’ve got to ease up on ourselves and lower our anxiety levels. If you are always looking at the glass half empty, you will feel empty. Try to catch yourself in the act, and change your behavior. Only you can make the change and look at your “loaf” as a gift. Finding work-life balance doesn’t have to be about spending more time on vacation or with your kids. It has more to do with finding the right balance inside you that allows you to free yourself from - well, yourself. Take time to enjoy your bread, no matter how much of it you have, even if it is only for a limited time per day.
“
Half a loaf is better than no bread
bell•weth•er -noun: one who takes initiative or leadership
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