Dealers Diagnose
Opportunities in
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news
Accentuating the Positive is More Important Than Ever
BKM of Texas, Steelcase Dealer, Hosts Special All-Day Symposium for Local Higher Education Community It’s no great industry secret that higher education represents one of the few vertical markets showing any signs of life these days. But knowing where the opportunities lie and positioning your dealership to take full advantage of them are two very different things. In Dallas, BKM of Texas has put in place a program that positions the dealership as a supplier in the higher education market with resources that go far beyond just having the right products at the right price. Now in its fourth year, BKM’s annual Higher Education Symposium offers education planners and providers in its North Texas market the opportunity to spend a full day exploring emerging trends in education-oriented environments and technology use. This year’s event drew some 60 attendees—including academic deans, facility planners, faculty and members of the A&D community from 25 different educational institutions—who came to BKM’s Dallas showroom to hear presentations on distance learning, trends in library design and more. Also at the event, BKM awarded special scholarships to two deserving local community college students, further reinforcing the dealership’s ties with the local education community. Higher education is a key market for BKM of Texas, explains vice president of sales and marketing Carlene Wilson and the event plays a major role in establishing the dealership as a market expert. “It’s not just about introducing new products,” she says. “The symposium spurs conversation between our people and leaders in the education community and provides an outstanding networking opportunity for the educators themselves to exchange ideas and learn from each other.” And if, as happened this year, the event uncovers three new projects that right now are just in the early planning stages but hold great promise for the dealership further down the road, that’s all good, too! Meanwhile, planning is already well underway for next year’s Symposium, with Carlene and her team already aiming for an even bigger and better event. continued on page 4 NOVEMBER 2009
OFDEALER
One of the more thought-provoking sessions at last month’s NeoCon East event in Baltimore was a panel discussion on the state of the industry that offered a wealth of insights and illuminating observations from some of the Baltimore/ Washington area’s leading designers. One comment, from Diana Horvath of Envison, seemed particularly relevant, as the industry prepares to enter the second year of a business downturn of truly historic dimensions. “I would encourage every principal in this room to start focusing on the optimism side of things,” she urged NeoCon East attendees. “Your employees and the clients that are still giving you work are getting tired of the negativity. We must have a level of gratitude for what we have and build upon that, rather than constantly focusing on what we’ve lost.” Those words echoed consultant Bill Kuhn’s discussion of effective leadership in his column in our September issue earlier this year. “Inspiring, motivating, and energizing people are as critical to managerial success as they are to leadership,” Bill wrote. Putting it simply, you can’t do any of that—and you can’t expect your people to be too terribly interested in supporting you—if the primary discussion topic in staff meetings and around the water cooler is “what we’ve lost.” And don’t think your customers will react any differently to any negativism from you. Business is pretty dreadful right now, and we all know that. But eventually it will get better, and meanwhile, it’s essential to maintain a focus on the positive and be willing, as an organization, to aggressively seek out every potential opportunity, then pursue, persuade, and convince prospective clients that your organization is the solution to their specific needs. Admittedly, there’s a fine line between focusing on optimism in these challenging times and abandoning any meaningful sense of reality. But successfully walking that fine line, like it or not, is probably one of the most mission-critical tasks for just about every dealer owner and manager today. Simon DeGroot Editor in Chief OFDealer
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Dealer News } continued from page 2 Peabody Office Furniture Recognized by Local Family Business Association
Question: What do you do to draw traffic to your showroom and drum up some business at a time when the overall market is about as bad as it gets?
Even with today’s fierce competition, there’s still plenty of room in the office furniture industry for a well-run, family-owned and operated business. Case in point: Peabody Office Furniture in Boston.
If you’re Jeff Kavich and his team at All Makes Office Equipment Co. in Nebraska, you reach out to one of the country’s top designers and bring her in for a very special event.
It was way back in 1899 that Lester J. Peabody first opened for business. Back then, the focus was typewriters and office supplies with office furniture joining the mix until 1911. Fast forward to today and the dealership he founded, Peabody Office Furniture, is still going strong and proud of its claim as “the longest standing Knoll dealer in the country.” Last month, the Peabody team had even more reason to be proud, after being named a finalist for a Massachusetts Family Business Award, a special honor presented each year by the Family Business Association, an independent, nonprofit which recognizes family businesses statewide. Peabody’s didn’t win this year but it was named one of just five finalists in the “Up to 50 Employees” category out of more than 200 nominations. Not too shabby, particularly in these challenging times!
The designer in question was Jhane Barnes, whose work features prominently in the offices and branding of such high profile corporations as Google, Delta Air Lines and Sony. It was also front and center at All Makes last month as its “Meet Jhane Barnes” event drew some 50 buyers and influencers from the local A&D community to the dealership’s Omaha showroom for a special presentation on her innovations in contract and interior textiles, carpeting, eyewear and office furniture. The event was co-sponsored by casegoods and seating manufacturer Jofco and floorcovering company Tandus, both of which have partnered with Barnes on various textile treatments. “We were thrilled to have Jhane Barnes visit All Makes and are proud to have her sustainable products on display in our showroom,” said Kavich, All Makes’ president and CEO.
Today’s Business Products in Ohio Celebrates 25th Anniversary
All Makes Office Equipment, Nebraska Dealer, Hosts Designer Jhane Barnes
Congratulations go to Rick Voigt and his team at Today’s Business Products in Parma, OH, which this month celebrates its 25th year of service to the Northeast Ohio business community. “Twenty five years is a major milestone for any local businesses,” said Rick, who started the company with his father, Don, in 1984 and who currently serves as president. Starting out with a leased 6,000 square foot warehouse, Today’s Business Products today operates from a 40,000 square foot showroom and warehouse which it acquired in 2000. “As an independent business, we’re proud to have achieved our success despite strong competition from the corporate big box stores. Because we’re family owned, our major driver is the customer, not Wall Street. Our goal is to be a business partner, not just a supplier who sells you something.” Recent years have seen the dealership hit the acquisition trail quite aggressively, adding three other independent dealers under its umbrella since 2004.
Award-winning designer Jhane Barnes and All Makes president Jeff Kavich at the dealership’s recent “Meet Jhane Barnes” event.
And while the majority of the dealership’s business is in office supplies, Rick and his team also put an emphasis on office furniture. “We position ourselves as a mid market dealer,” he continued on page 5
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Dealer News } continued from page 4 explained, “with an office design staff that provides a turnkey operation and the ability to create an office from conception to installation.”
New Showroom for San Diego Inscape Dealer OfficePlanIt
Rick also credits a veteran management team for the company’s ongoing growth and success. He boasts that the company’s first hire—Karen Cipalla—is still with the company and now serves as vice president of administration. Rick’s two brothers, John and Paul, also work with the company. As for the future? “The next 25 years will be more fun than the first 25 because we’re a well-established company with a great reputation to build on,” Rick said. “And we’re looking to do more acquisitions.”
OEC, Louisville Haworth Dealer, Turns to Education to Maintain Key Business Relationships
OfficePlanIt’s new showroom is located in a former Wonder Bread factory that dates back to 1894!
How do you maintain business relationships with key customers and prospects in a market where people interested in buying anything are few and far between? For a growing number of office furniture dealers, the answer to that question increasingly lies in end user education.
It’s been a busy couple of months for the folks at OfficePlanIt in San Diego. After recently being appointed a Premier Dealer for Inscape in the Southern California market, the firm held the grand opening earlier this month for its brand new showroom, a 5,000 sq. ft. facility in downtown San Diego.
In Louisville, for example, Haworth dealer Office Environment Company (OEC) last month held the last in a series of educational sessions on critical industry trends for members of the local A&D community.
The showroom may be new but the building that houses it dates back to 1894 and was a former Wonder Bread factory!
OEC held three different sessions this year—on sustainability, managing different work styles and cultures and the changing definition of “the office.” Each one was presented by subject specialists from Haworth and came with Continuing Education Units (CEUs) for designers needing them to maintain their certification. And, says OEC marketing manager Renee Cooper, they provided a very effective way for the dealership to keep in contact with key buyers and influencers. For OEC, education helps draw local architects and designers —as well as students from the nearby University of Louisville’s design program—to visit the dealership’s showroom and see firsthand some of the resources it offers. “It’s more important than ever today to nurture our key business relationships, so that when the market does finally rebound, we’ll be ready to pick up where we left off,” she contends.
OfficePlanIt principals Theron Williams and Jim Edmondson are hoping to make a different kind of dough in their new home and, says Jim, even though the market has been soft of late, business is still out there and the OfficePlanIt team has been aggressively pursuing it. As their blog proudly notes, the dealership recently secured major projects from two local fast-track growth companies and, says Theron, they’re looking for more to come. “We’re expecting to see a huge turnaround for the industry next year,” he predicts. “There’s a lot of pent-up demand in the market and as a small dealership with low overhead, we’re already well positioned to make the most of it when business does start to pick up.”
Office Furniture Group, Southern California Teknion Dealer, Sponsors Alzheimer’s Fundraiser Alzheimer’s disease is a silent killer that affects over 5.3 million Americans. In Irvine, CA, Scott Lazarus and his team at Teknion dealer Office Furniture Group are going the extra mile to support continued on page 6
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Dealer News } continued from page 5 Alzheimer’s caregivers and medical researchers as sponsors of Design 2 Care, an annual event that brings together the local A&D community among others to raise funds for the Alzheimer’s Family Services Center in nearby Huntington Beach.
NYC Dealer Account Exec Rappels for Charity
This year’s event raised over $16,000 for the cause, as over 200 attendees took part in a silent auction and viewed a special exhibit featuring original artwork by Center patients. Scott gives credit to Center board members Steve Francis of local rep firm Steve Francis & Associates and Diana Murphy of Rossetti Architects in Los Angeles for his involvement in the event. “Certainly these are tough times for all of us, but that’s probably even more reason than ever to get involved and give back to our communities by supporting organizations that need our help,” he says.
Lane Office’s Chris Mimnaugh takes an unusual approach to checking out a local office building for prospects, but it’s all for a good cause.
Chances are most of us have learned far more than we ever wanted to about the ups and downs of the office furniture industry over the past year or so. In New York City, Chris Mimnaugh, an account executive with Knoll and DIRTT dealer Lane Office, has a particularly unique perspective on it all after rappelling down a Long Island office building—all five stories—to help raise funds in support of local residents with autism, mental retardation and other special needs. Chris, who raised $1,500 on his way down, commented, “I’m proud to support my community and this is a great opportunity for a new experience. Rappelling requires focus and takes you out of your everyday thoughts. I work with clients as they make real estate decisions, but this is a whole different way of looking at buildings!”
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NOVEMBER 2009
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BIFMA September Numbers Show Continued Industry Stability But Little Indication of Improvement Any Time Soon The worst may be over but don’t go looking for much in the way of an upturn in industry sales any time soon. That was the message that came through loud and clear last month, when the Business and Institutional Furniture Manufacturers Association (BIFMA) released its statistics for September. The BIFMA numbers showed signs of continued industry stability—orders were down 32% versus the same month last year, pretty much matching industry performance in August and July, which both posted 33% declines. Unfortunately, however, signs of tangible improvement have yet to materialize, according to industry analyst Budd Bugatch of the Raymond James & Associates investment house.
2009 BIFMA Forecast - Y/Y% Chg 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% -30.0% -35.0%
Orders Feb-08 Feb-08
May-08 May-08
10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% -30.0% -35.0%
Shpmts Aug-08 Aug-08
Nov-08 Nov-08
Feb-09 Mar-09
May-09 May-09
Aug-09 Aug-09
-2.8% -6.3% -10.8% -13.1% -26.5% -29.3% -32.1% Orders “While economic conditions are -6.3% -10.4% -11.6% -19.3% -28.6% -31.0% Shpmts -2.6% seemingly on the mend and we were encouraged by the third quarter’s 3.5% Source: BIFMA / Global Insight growth in Real GDP, the late-cycle nature of office furniture demand suggests a recovery for the industry is likely to lag the broader economy by at least three to four quarters,” Bugatch suggested.
Given tight credit conditions and long lead times between planning and completion of new office buildings, project-related office furniture demand is likely to remain challenged for the foreseeable future,” he predicted.
Herman Miller Unveils New LA Showroom Herman Miller has opened a new showroom in Los Angeles that it says reflects the company’s commitment to “forward-looking, problem solving design and environmental stewardship.” A former warehouse built in 1956, the new facility’s design is the result of a joint effort between Herman Miller and architecture and design firm tvsdesign. “There was a significant effort to complement Herman Miller’s design legacy throughout the showroom,” noted Steve Clem, the showroom’s lead architect and interior designer and principal at tvsdesign. “This was accomplished through a collection of curved walls and freestanding forms. Eames plywood screens, for example, are not only used as space dividers, but also as artwork. These are the types of details that make the space so delightful and unique.”
Sustainable elements of the LEED (CI) Platinum-pending showroom include a 10-year lease, which encourages conservation of resources and reduction of waste from frequent moves or new construction; its location within an area close to public transportation, local businesses, and restaurants; energy efficient light fixtures and occupancy sensors throughout the space, and MBDC, BIFMA level and Greenguard certified products and materials. In addition, 20% of the building materials and products in the project were manufactured within 500 miles of the site and a construction waste management plan ensured over 75% of all construction waste was recycled and diverted from landfill during construction, among other features.
continued on page 9 NOVEMBER 2009
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Industry News } continued from page 7 Haworth Acquires Minority Position in Tuohy Furniture
AIS Promotes Lazarus to Executive Vice President of Sales
Haworth has acquired part ownership of Tuohy Furniture Corporation, the Minnesota-based manufacturer of executive casegoods, conference tables, seating and lounge furniture.
Manufacturer AIS has promoted Rob Lazarus, previously senior vice president of sales, to the position of executive vice president of sales.
In a joint statement, Haworth and Tuohy said they will realize significant benefits from the new partnership and form a strong alliance in the marketplace.
In his new role, Lazarus will be responsible for implementing sales strategies and working closely with AIS senior sales VPs, regional sales VPs, territory managers and independent sales representatives to create marketing distribution plans and goals for each region.
With little overlap in the two companies’ products, Tuohy’s executive casegoods, conference tables, seating and lounge furniture will strengthen Haworth’s market position, the companies said. Tuohy will continue to be autonomously managed by its current management team, led by Dan and Michael Tuohy, and maintain its brand positioning and company name. Tuohy will also maintain its current distribution channels, realizing potential growth opportunities through Haworth’s distribution network, the two companies said.
Lazarus has been with AIS for over eight years and has over 20 years of industry experience at both the dealership and manufacturing levels, “Rob’s knowledge, passion and positive energy make him a valuable asset to the executive management team,” said AIS president and CEO Bruce Platzman. “Over the years, Rob’s hard-work, perseverance and the passion to ‘make-it-happen’ have fueled AIS to strive and better ourselves as a company overall. His dedication to AIS and forward-thinking abilities make him the perfect fit for this role.”
New Teknion Showrooms in Santa Monica and Boston Earn LEED Certification Teknion Corporation’s new Santa Monica showroom recently gained LEED (Leadership in Energy and Environmental Design) Gold certification from the U.S. Green Building Council (USGBC) in the Commercial Interiors (CI) category. In addition, the company’s Boston showroom has attained LEED Silver-CI. The Santa Monica showroom was created by Vanderbyl Design of San Francisco, CA, in conjunction with architect of record Pollack Architecture, while the Boston showroom was designed by The Baker Design Group.
National Office Furniture Announces $10,000 ‘Gift of Inspiration’ Winner National Office Furniture has announced the winner of its 2009 Gift of Inspiration Award, a special program designed to support scholarship funds, endowments, learning materials and other important educational and developmental programs. The recipient of this year’s $10,000 award was Southwest Middle School in Savannah, GA, which will use the funds to start a program to help students who have been retained to better prepare for their transition to high school. “At National, we believe in building stronger communities. We know all those involved in educating future generations put forth extraordinary efforts every day to create impactful learning experiences,” says Don Van Winkle, National’s vice president and general manager. “We’re proud to know that the gift will be put towards a program that will inspire our youth not only today, but throughout their lifetime.”
Configura Hosts Second Annual North American User Conference
Teknion Boston’s Showroom
Configura, maker of CET Designer software, recently wrapped its second annual User Conference in Las Vegas. The two-day event, for which OFDA was a conference sponsor, drew nearly continued on page 10
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Industry News } continued from page 9 100 CET Designer users and dealers and their respective manufacturers. A variety of sessions were offered during the event, including peer-taught sessions led by Configura CET Designer “power users” Maureen Soules, CID, Fluid Interiors; Paul Riches, Heritage Office Furnishings and Raza Syed, Business Furnishings. Los Angeles architect Joey Shimoda headlined the conference with a keynote presentation on design trends and how technology is bridging the communication gap between A&D firms and dealerships. “Changing expectations of the workforce are shaping the future of architecture and design,” Shimoda told attendees. “A large percentage of the population is rethinking its values.” Also at the conference, Configura presented its 2009 Awards for excellence in design and specification work. Young Office’s Karen Barton garnered the grand prize for Best Large Project, winning a computer, two monitors and a one-year subscription to CET Designer for her firm (Young Office is based in Greenville, SC and is a Steelcase dealer). In the Best Rendering category, first prize was won by Maureen Soules, CID, Fluid Interiors, Minneapolis, (Haworth dealer). Second prize was won by Juan Melendez, RGO Office Products, Calgary, Alberta (Steelcase dealer). Third place went to Alvin Hernandez, Wittigs Office Interiors, San Antonio (Haworth dealer).
Eggers Industries Celebrates 125th Anniversary Congratulations to Two Rivers, WI-based Eggers Industries, which this year is celebrating its 125th year of continuous operations as a wood products manufacturer. Privately held since its inception in 1884, Eggers operates three divisions in Northeast Wisconsin, where it manufactures architectural flush doors, true stile and rail doors, door frames, veneered plywood panels, and custom components for commercial projects including veneer wrapped metal and wood components. The company attributes its longevity and success to “The Eggers Way,” a set of ideals, practices, and core values that put a premium on balanced responsibilities that consider customers, employees, shareholders and the community. Mary Lester Streu, vice president of operations, states, “The ability to stay true to the company values makes us special. Some people view us as conservative; we view ourselves as focused. We stay close to a key principle: under commit and over perform. We do not try to do everything. We stay true to our custom manufacturing business. We want a healthy company, not a big company. Those are the true roots of Eggers Industries.” For more information, visit www.eggersindustries.com, call 920-793-1351 or e-mail bdiederichs@eggersindustries.com.
In the Best Success Story category, Pam McClelland, BOS, Chicago (Haworth dealer), won the first prize.
Version 2.0 for Furniture Command Center Dealer Management System Sherpa Software Development has announced the release of version 2.0 of its Furniture Command Center (FCC) dealer management system. Sherpa said FCC, a web-based product launched in 2007, was tailored specifically to meet the needs of small and midsize contract office furniture dealerships and includes features such as integration with existing accounting products (instead of replacing), automatic workflow tracking, dynamic role based privileges and more. For more information, visit www.furniturecommandcenter.com, e-mail info@furniturecommandcenter.com, or call 571-482-7175. NOVEMBER 2009
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Health Care Reform Legislation Faces Even Greater Hurdles in U.S. Senate On November 7, the U.S. House of Representatives narrowly passed H.R. 3692, its final version of comprehensive healthcare reform. The vote was 220 to 215, with one Republican (Rep. Cao of Louisiana) voting in favor of the bill and 39 Democrats voting against it. The National Federation of Independent Business (NFIB), which leads a small business coalition in which OFDA participates, promptly voiced major concerns about the bill. In brief, the “Affordable Health Care for America Act” fails to live up to its name and, in its present form, would greatly harm rather than help small business.
their average annual compensation/employee is more than $20,000. 4 Creation of a national, unelected insurance commissioner with broad authority to institute rules and regulations, including reporting and other requirements that will increase compliance costs, particularly for small businesses. 4 Creation of new “rules of construction” that would provide green lights for trial lawyers seeking to file lawsuits against small employers.
The Coalition has challenged H.R. 3692 on numerous grounds, but the key shortcomings of the bill include:
Action on the bill now shifts to the U.S. Senate, where prospects for passage of healthcare reform legislation are still highly uncertain.
4 A mandate that businesses—including many small businesses—offer a yet-to-be determined minimum level of healthcare insurance to both full-time and part-time employees.
Senate Majority Leader Harry Reid (D-NV) has merged two very distinct committee bills and is still waiting for the new bill to be “scored” by the Congressional Budget Office on its cost.
4 A requirement that all employers now offering health insurance must reach the new minimum standards for coverage within a 5-year period—violating the promise that “you can keep what you have.”
Apart from the uncertain cost burden of the Senate bill, arguments regarding insurance coverage of non-documented workers and federal funding of abortion are expected to be even more problematic in the Senate.
4 Play or Pay provisions requiring employers with an annual payroll of $500,000 or more to pay a payroll tax of up to 8% if they do not offer a “qualified” health insurance plan.
In addition, Republicans are planning for a possible (and credible) filibuster effort to prevent a floor vote on the bill.
4 To avoid the payroll tax, employers must offer “qualified” plans to both employees and their families and contribute at least 72.5% of the total premiums for employee plans and 65% of premiums for family plans.
On a more positive note, there are serious initiatives underway in the Senate to develop floor amendments to reinstate previously proposed reforms that would help curb the growth of insurance premiums for small businesses and reduce the disparity in premium cost burdens carried by small vs. large firms.
4 If a company’s employees decline coverage from their employer and obtain coverage from one of the proposed state insurance exchanges, the employer must pay up to an 8% payroll tax for those employees.
The office interiors industry needs to actively weigh in on this forthcoming Senate debate, which can still be influenced if the voice of small business for specific reform alternatives is focused and persistent over the next several weeks.
4 The required “public option,” which many insurance experts believe will steadily crowd out private plans, shifting higher medical costs toward employers who offer those plans.
OFDA members can anticipate calls to action in the next few weeks as specific alternative reform packages are more fully assembled by their Senate supporters.
4 Restrictions on the use of funds from existing Health Savings Accounts (HAS), Medical Savings Accounts (MSA) and Health Reimbursement Accounts (HRA) to purchase over-the-counter health products, other than insulin, and limits on contributions to Flexible Spending Accounts (FSA). 4 Limitations on small business tax credits to companies with 25 or fewer employees and a phase-out of the credits for eligible firms if NOVEMBER 2009
As it is often said on Capitol Hill, “The Senate is not the House,” an expression that highlights the reality that measures approved in the House often face much larger challenges in the Senate. It is time for all small businesses to call and e-mail their senators and demand that their economic interests and concerns be addressed. Contact Chris Bates at cbates@ofdanet.org for further information on this critical national issue that affects all employers and their employees.
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S A V E
T H E
D A T E
OFDA 2010 CONFERENCE
October 9-12 Hyatt Regency Coconut Point Resort and Spa Bonita Springs FLORIDA
Dealers Diagnose Opportunities in
Healthcare By Alicia Ellis
What if you went to a doctor and were told you were dying. What would you do? Would you just accept it and go home or would you ask for a second opinion? Would you seek out new treatments, alternative therapies, specialists in the field? I bet you would. Now what if someone told you that your dealership is dying? The economy sucks, sales are down, the traditional avenues that served your dealership so well in the past are gone and aren’t coming back anytime soon and your company is going to die. What would you do? While this may all sound a little extreme here, the point is this: You wouldn’t settle on a death sentence for yourself because you know there are a lot of options that may stave off death or at the least extend your life, so why would you allow your dealership to suffer without fully examining possible options that could breathe new life into your Do Pati c ent: tor company? O ’s
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sight aggin ted G , g f rowt e e a c r of c Diag onom h nos h y a , nge, is: A l a c k p bsenc of Trea rodu tme e of h c t n d t e :I ealth grow ficien nvest c t cy a h r . e m E prod furn d e n u t c a i i shing show ucts and ting dedi n healthc s room termi are cated n alloc ology salesp Ref a erra e . Eve t i o n l . ntua ople on of fu : Manu l r areas nishings facturers and m, patient and prod carrying u a edica rooms l emp , examcts for rec range ep loyee areas ination ro tion , to n o ame ms, a few . NOVEMBER 2009
At a time when commercial construction is down, retail is down, small business growth is down and the economy is at best only beginning to show signs of what could be a small recovery, healthcare is one of very few brightspots and the opportunities it offers for dealers are only going to grow. Life expectancy rates are increasing, the huge generation of baby boomers is moving into their golden years and the expected passage of healthcare reform legislation of some kind, no matter what its final make up, promises to undoubtedly bring millions more people into doctors’ offices, clinics and medical facilities. Much to the dismay of healthcare furnishings manufacturers who believe the healthcare market represents a viable choice for dealers, many have been noticeably reluctant to head towards hospitals and medical offices in their markets. continued on page 14 OFDEALER
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Cover } continued from page 13 According to Marty Cagle, president of Intensa, a 10-year old manufacturer of medical equipment, modular casegoods and over the past year and a half, a full line of examination tables, “It’s time for dealers to break the old healthcare buying habits.” Cagle explained that many doctors’ offices have become used to buying their equipment from medical equipment manufacturers that do not sell to office furniture dealers. “These medical equipment salespeople took advantage of their relationship selling gloves, to sell rolling chairs, exam tables and equipment,” he said noting that Intensa sells exclusively to office furniture dealers with a line of competitively priced, high quality options that will allow dealers to become a complete healthcare provider. “For every dollar up front, there’s a dollar in the back just waiting for the dealer with the foresight and skill to go after it,” he maintains. Ed Miles, healthcare director for GLOBALcare, the healthcare division of Global – The Total Office, couldn’t agree more. “It’s only logical for dealers to get ‘off the carpet’ and expand into waiting areas, lounges, patient rooms, specialty clinics, ambulatory care facilities, hospice care and assisted living facilities,” said Miles.
HEALTHCARE STATS: n In 2006, life expectancy at birth for the total population reached a record high of 78.1 years, up from 75.4 years in 1990. n In 2006, there were about 1.1 billion visits to physicians’ offices, hospital outpatient departments and hospital emergency departments. There were 902 million visits to physicians’ offices, 102 million visits to hospital outpatient departments, and 119 million visits to hospital emergency departments. n In 2006, 43% of doctor visits were to specialty care physicians, up from 34% in 1980. n 87.1% of healthcare establishments are offices of physicians, dentists, or other health practitioners, with another 11.5% being residential and nursing care facilities. n Healthcare will generate 3 million new wage and salary jobs between 2006 and 2016, more than any other industry. n The number of people in older age groups, with much greater than average healthcare needs, will grow faster than the total population between 2006 and 2016; as a result, the demand for healthcare will increase. n From 1950 to 2006, the total resident population of the United States increased from 151 to 299 million persons, representing an average annual growth rate of 1.2%. During the same period, the population 65–74 years of age grew, on average, 1.5% per year, increasing from 8 to 19 million persons. The population 75 years of age and over grew the fastest (on average, 2.8% per year), increasing from 4 to 18 million persons. n By 2029, all of the baby boomers will be age 65 years and over. As a result, the population age 65–74 years will increase from 6% to 10% of the total population. As the baby boomers age, the population 75 years of age and over will rise from 6% in 2006 to 9% of the population by 2030 and continue to grow to reach 12% in 2050. By 2040, the population age 75 years and over will exceed the population 65–74 years of age. n Findings from the National Health and Nutrition Examination Survey show that the proportion of adults who are obese has more than doubled from 15% in 1971–1974 to 34% in 2003–2006 for adults 20–74 years (age-adjusted). n The proportion of young adults age 18-29 years who are obese has more than tripled from 8% in 1971–1974 to 24% in 2005–2006.
GLOBALcare Patient Room Tom Carrigan, director of marketing for High Point Furniture Industries (HPFI), believes office furniture dealers are in a great position to move into the healthcare market because it’s a natural extension of their knowledge. Historically, a manufacturer of wood continued on page 15 NOVEMBER 2009
n According to a 2008 study, 52% of responding facilities have seen an increase in admissions of severely obese patients since 2006. In addition, 28% of responding facilities invested in physical renovations to accommodate obese patients with the median cost of renovation estimated at $100,000. SOURCES: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 edition, and the National Center for Health Statistics Health, United States, 2008
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Cover } continued from page 14 office casegoods and upholstered seating for a wide range of commercial markets, HPFI has focused a lot of attention of late on bariatric furnishings, making a name for itself with its weight-rated furniture that is designed to be sensitive to the feeling of patients and their families. “Bariatrics is a great business and you don’t have to be a large dealer to get involved,” said Carrigan, who points out more than 87% of HPFI healthcare establishments are offices and surgical centers and that half of all non-hospital establishments employ fewer than five workers. “The population is aging and obesity rates are climbing and with a little training on bariatric ratings, cleanability and germ fighting capabilities, dealers can take advantage of these trends to move from the reception area and into patient rooms.” Whether working with hospitals, doctors’ offices, clinics, bariatric centers or assisted living facilities, there are plenty of dealers out there who, to varying degrees, are growing their healthcare business and, in most cases, are helping to alleviate and in many cases obliterate company losses due to the current economic burden.
In order to find out more about the healthcare furnishings industry and the opportunities it offers dealers, OFDealer talked to more than 20 dealers and manufacturers, both large and small, around the country and asked how their healthcare business was doing, how they were marketing their products and where they saw their company a few years down the road. “We have found that many of our healthcare customers’ priorities are similar to those of our standard contract customers, in terms of value for their investment, quality of fixtures and furniture, and lead times,” said Susan Borrelli-Gerace, CAD designer for Milton Terry Associates, Inc. in Oak Ridge, NJ. “These are coupled with the addition of some specialized needs—such as anti-microbial finishes and specialized storage items to accommodate sinks and other fixtures to round out our offerings.” Growing revenue in healthcare from two percent three years ago to five percent this year, Milton Terry is currently experiencing an increase in healthcare opportunities, and is in the process of putting together a campaign catering to that industry. “One of the biggest challenges involved in serving the healthcare market is knowing and anticipating the specific concerns and needs of that industry with regards to specialized storage or work needs for areas other than "traditional" commercial furniture products that would suit the doctor's offices, waiting rooms and file rooms,” said Borrelli-Gerace. “Many people in the healthcare field don't often think to go to their office furniture dealer first for assistance with areas such as exam rooms, labs, and assisted living suites. Our job has been to educate ourselves on their specialized needs and then find viable options to fill those needs and lastly, to educate potential clients on our capabilities to effectively provide those specialized products and services to them.” “After the initial meeting and my research regarding a potential client, I am armed with a design board which effectively tells its story to my client and enables them to comfortably place their project into my hands only,” said Lucia M. Hardy, president of Office Installation Services, Inc. in Indianapolis, IN. “The non-institutional looking healthcare fabric offerings have
Primacare Collection for GLOBALcare NOVEMBER 2009
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Cover } continued from page 15 made my design boards more exciting and more appealing to my healthcare clients.” Having increased healthcare revenue over the past three years by five percent with healthcare products from Logiflex and La-Z-Boy, Hardy anticipates the creation of a dedicated healthcare showroom over the next year and expects to generate up to 20% of total business over the next three years from the healthcare industry.”
WaveWorks Casegoods
Working with National Office and Steelcase’s Nurture line among others, Ed O'Connor, director of sales for DeKalb Office Environments in Alpharetta, GA, has seen the company increase healthcare revenue from eight percent three years ago to more than 30% today. With a dedicated sales rep and showroom for healthcare furnishings, O’Connor anticipates revenues from healthcare will continue to increase to around 40% by 2012. O’Connor credits DeKalb’s 22% increase in revenue over the past two years to its dedicated team of sales professionals who
from National Office Furniture
“I find it most effective to deal directly with the ‘check writers’ or owners of the small to mid-size healthcare facilities,” said Hardy of her marketing plan “All of the facility managers of the large entities (hospitals, surgery centers, etc.) are constantly bombarded either directly by manufacturers or sales representatives. However, the dental offices, dental spas, cosmetic surgeons and the like are often ignored and greatly appreciate the attention to detail and hands-on approach I provide, not only for the furniture and lounge purchases, but for the overall design as well. In my opinion, the bottom line for the design and purchase is function and fabrics!”
understand the market and who have the ability to bring new solutions to the users of healthcare-related space.
“The most important resources are knowledge about the market and understanding of the challenges that the users of products face,” said O’Connor. “The healthcare market has traditionally been looked at as a highly price-sensitive market that typically pushed back from new and different solutions. Healthcare providers are just like everyone else today—they’re constantly being challenged to re-think the way healthcare is delivered. As a resource provider, we are there to explore options with them and show the customer through knowledge that we can impact their clinical work process.” According to O’Connor, most healthcare customers are extremely service-oriented, with very specific time requirements from start to finish on projects—especially in clinical spaces. “The deeper into clinical spaces that we get, the more intense the service requirement becomes,” he continued. “Order sizes are from one chair to many workstations and you must deliver every order flawlessly and to the satisfaction of the individual user.” While moving “off carpet” is something dealers should consider, going from doctor’s offices and smaller clinics into the hospital continued on page 17
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Cover } continued from page 16 setting involves a much larger dedication to the industry. For Kim Augspurger, president of Saxton Inc., a Des Moines, IA dealer selling to hospitals has been an education. A dealer of Nemschoff, Carolina, Legacy, Neocase and Patrician products, 70% of Saxton’s revenue is generated through a dedication to healthcare. “There are a lot of entry points into a hospital: facilities, purchasing, nursing directors, administration, physicians, and maintenance,” said Augspurger. “These positions have various levels of authority and many decisions are made via a
understand what questions to ask. This requires knowledge about the products you represent and the issues your client faces. It's your role to bridge that gap.”
haven't historically focused on healthcare, is to hire someone who is knowledgeable and bring that expertise in-house.
Saxton takes a business to business approach to marketing, calling on key decision makers and leveraging their experience and knowledge. They also host learning opportunities and attend trade shows that help them connect to the market.
That’s exactly what One Workplace in Milpitas, CA did when they consulted with and eventually hired Cliff Bass. A large Steelcase dealer in the Bay area, One Workplace employs over 300 people in three offices but was only generating nine percent of revenues from healthcare sales three years ago.
“People in the healthcare industry know each other and they talk to each other, so your reputation is critical,” said Augspurger. “The healthcare
An expert in healthcare, Bass was instrumental in the creation of Synergy 4 Health, a Nurture dealer and the standalone healthcare division of One Workplace. Over the past year and a half Synergy 4 Health has embraced healthcare with a 4,500 sq.
HermanMiller | Co/Struc System committee so you have a lot of people to sell to and to serve.” “The language is different from the general office industry and if you are not familiar with codes, regulations, specific issues, and specialty products that are unique to healthcare, it will show quickly,” she warns. “As you meet with the customer to determine how you could assist them with their needs, you must
customer's priorities begin with patient care. While there is a constant push on the budget, the reality is it's more important to make the right decision that leads to better care. Becoming knowledgeable and staying knowledgeable about not only products but care issues is key.” While knowledge can be taught, Augspurger’s advice for dealers who
ft. healthcare showroom that it operates jointly with Nurture and five salespeople dedicated to selling healthcare. “One Workplace was lucky in that they had serviced three area hospital systems for more than 10 years before creating Synergy,” said Bass. “With the solid back end support of One Workplace, we were able to bring in a combination of experienced and exceptional healthcare people continued on page 18
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Cover } continued from page 17 and train a couple of furniture salespeople who were ready and willing to dedicate themselves to healthcare and begin to create a great team.” With 90 hospitals in the Northern California area, Synergy has worked tirelessly to build a level of trust with decision makers, hosting A&D and end user events focused around the showroom and sharing the research created by Nurture and other manufacturers, all the while learning about their individual needs. “If someone doesn’t know about hospitals, they won’t know where to start,” said Bass. “Can you be on every floor and in every room in a hospital? That’s hard to accomplish and while some dealers see hospitals as the silver bullet, hospital margins aren’t what they used to be and the larger projects could have extremely long lead times,” he cautioned. “If I was a smaller dealer, I would want to find a niche,” Bass continued. “You can’t be everything to everybody so narrow it down, find where your strengths lie, surround yourself with knowledgeable people and get out there.” Just like every patient, every dealer, of course, is different. And Bass’s prescription for success may not work for all. But given the size of the healthcare market and its relative health and potential compared to just about any other segment out there, it’s fair to say that any dealer who isn’t looking seriously at establishing some kind of specific healthcare market focus is missing what could well be an opportunity that could well be golden today and even more attractive tomorrow. Are you ready to get better?
Synergy 4Health / Nurture Showroom | Milpitas, CA NOVEMBER 2009
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Tradeshow Wrapup
The current economic climate did little to dampen the mood at this year's NeoCon East show, the mid-Atlantic region’s premier design exposition for commercial interiors with a focus on the federal government.
Business Abounds at NeoCon East
Held October 29-30 at the Baltimore Convention Center, NeoCon East offered a variety of seminars, product and service displays and networking opportunities to more than 8,000 industry professionals who work in some capacity with city, county, state and federal buildings.
More than 250 exhibitors packed the expo floor with thousands of products and despite predictably lower attendance than in prior years, the aisles were still crowded as architects, interior designers, facility managers, government specifiers, dealers and students came eager to check out the latest product innovations. In addition to commercial furnishings and seating, there were plenty of exhibitors showcasing floor coverings, hospitality and healthcare furniture, artwork, lighting, stone/tile, technology products, wall coverings and textiles.
Standouts among the products include: Herman Miller’s new Energy Manager, a proprietary device that senses occupancy and controls power in the company's systems furniture to save energy and lower costs. It controls two of the four circuits of power in a cluster of workstations. When a person sits down to work, an occupancy sensor detects their presence and turns on the devices in the cluster plugged into those two circuits—task lights, printers, monitors, or chargers. When the cluster is unoccupied, the devices automatically turn off.
Kimball Office | interstuhl's Mitos office chair with "transmotion" mechanism. As the sitter reclines, the entire seat moves on an arc-shaped curve to the rear and downward, embracing the back. A “relax” lever reduces the spring strength in the backrest, so that the sitter can lie back deeper and longer with little effort. In addition, the headrest moves forward when the sitter leans back, relieving shoulder and neck tension in even the most reclined position. The armrests pivot 180 degrees, cushioning the upper arms and taking pressure off the upper body. The Mitos Mobile is a versatile piece that transforms from a footrest into a laptop stand, lectern, mobile workstation or visitor’s chair. continued on page 20 NOVEMBER 2009
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C + P Möbelsysteme Resisto locker solutions feature an electronic locking system operated using transponder or fingerprint technology. Made of steel, Resisto lockers offer two compartment depths, special doors made of 1.5 mm-thick steel, and a curved front door mounted on piano hinges.
Aurora’s Times-2 Elite secure storage system rotates for fast access from either side, and gives double the depth of conventional lateral files. Available in 29 colors and customizable doors, tops and end-panels, the Times-2 Elite offers a variety of shelving options including rollout filing drawers, accessory drawers, and even a wardrobe kit.
Designed from the ground up, Views from CenterCore incorporates architectural and functional design elements to create an individual work space that is private yet still connected to the broader open floor plan environment. Views’ work surfaces, storage units, panels, modesties and screens flow smoothly from one to another without unnecessary breaks or disruptions.
National Office Furniture previewed eCoupled wireless technology at NeoCon East. This intelligent wireless power charges cell phones, laptops and other enabled devices through electromagnetic induction without requiring direct contact between device and power source and eliminating the need for cords and adapters. National is in development of seamlessly integrating this safe and efficient technology into its seating tablet arms and tables, retaining the clean lines of these products while offering the convenience of advanced technology. continued on page 21 NOVEMBER 2009
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Wrapup } continued from page 20 Crypton Super Fabrics and Signature Carpet introduced Signature Crypton Carpet with an advanced, chemical enhancement that changes the actual process by which carpeting is manufactured. Signature Crypton Carpet, with up to 46 percent recycled content, blocks fibers from stains, odors, mold and mildew. An ionic barrier allows the carpet to withstand the wear and frictional forces that often damage existing carpets. No special cleaners are needed and the carpet can withstand hot water extraction commercial cleaning without compromising performance. And, the carpet will also offer a 9-foot corridor width, reducing installation waste by more than 25 percent.
NeoCon East is known for its heavy focus on education and this year’s event was no exception. More than 40 CEU-accredited seminars covering a broad range of important topics were offered, organized around tracks such as facilities management; facilities construction and renovation; green design; government services administration; health care; health, safety and welfare; hospitality; institutional; office design; professional development; residential, lighting and the newly created educational track, career development, designed specifically for those attendees seeking new job opportunities or securing the current position they have.
Topping off a great show were several events designed to encourage networking and creativity in design. Winding down after the first day’s success, booth parties were hosted by many exhibitors, but the biggest networking event was Pecha Kucha Night. If you weren’t able to make it to NeoCon East 2009, there’s always next year, as NeoCon East returns again to Baltimore, September 29-30, 2010. For more information, visit www.neoconeast.com.
Of particular interest to dealers were classes on Furnishing the Future: Leaner and Greener Workplaces, Saving Time and Money by Demystifying the Relationship Between Furniture Representatives, Dealers and Designers, The Green Future of Hospitality, and Next Generation Offices. NeoCon East hosted an impressive line-up of keynote speakers including Duff Goldman, chef and baker turned celebrity with the hit reality show “Ace of Cakes” on the Food Network. Goldman spoke about looking outside of the box to overcome seemingly difficult tasks and the importance of teamwork in design, whether it be a cake or a space. A keynote panel discussion moderated by Kay Sargent, principal at IA Interior Architects, Washington D.C., featured representatives from a variety of government agencies who came together to discuss the stimulus bill and how government agencies will reap the benefits but need to be prepared for changes on the horizon. In addition, the show featured its annual State of the Design professional discussion with principals of leading firms exploring where we are as professionals, what challenges and opportunities we are facing and what lies ahead. NOVEMBER 2009
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PR JECTPROFILE Smarter Interiors A Flawless Performance By Alicia Ellis
Started in 2001 in Richmond, Virginia, CenterStage was a $70 million restoration and construction project that sought not only to completely restore a 1928 Loews Theater but also to expand the complex to include two smaller venues, office space, dressing rooms, lounges, classrooms, galleries and reception areas. With a set opening date of September 11, 2009, the project was designed and the majority of the spaces specified by Boston-based Wilson Butler Architects, who specialize in theater and restoration projects. As one of only three original Loews theaters left in the United States, it was important to restore the theater to its original opulence while incorporating modern features. When it came to furnishing the project, SMG, a Philadelphia-based venue management company that oversees the day to day operations of Richmond CenterStage, wanted to make sure that they utilized local dealers. After an extensive bid process, Smarter Interiors, a Richmond-based HNI dealer, was awarded a $550,000 contract to supply and install furniture for the performance theater, production support
continued on page 23 NOVEMBER 2009
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Project Profile } continued from page 22 spaces, reception areas, ticket booth, break areas, private offices, open offices and educational classrooms.
scheduled, with a private opening on September 11 and first public event on September 12 of this year.
“Our lead designer, Susan O’Kelly was instrumental in helping us win the bid,” said Greg Campbell, one of Smarter Interior’s principals. “She really brought the project to life and was able to match the furniture to the period and successfully blend the old with the new.”
Carpenter Theater has been returned to its original glory and the two smaller venues, Rhythm Hall and the Libby Gottwald Community Playhouse, will host a variety of performances. Four groups, the Virginia Opera, the Richmond Symphony, the Richmond Shakespeare organization and Richmond Ballet will host regular series at the complex and five more resident companies, including a jazz ensemble, an African dance troupe and two children's theaters, will occasionally perform.
According to Campbell, Smarter Interiors needed to furnish the donors’ lounge, two conference rooms, one outdoor area, 13 private offices, 29 workstations, eight classrooms, nine lobby areas, nine dressing rooms and three backstage areas. The bid was awarded in April with setup and install scheduled for the third week in August. “We utilized a variety of products with Allsteel’s Terrace and Gunlocke workstations leading the way,” said Campbell. “Office spaces are modular and can be changed as the need arises or added onto if the staff grows. And, the open office workstations were designed for collaboration, with an unobstructed view to the outside.” Smarter Interiors also planned to utilize David Edward bar stools in the donor’s lounge and orchestra pit, American Seating furniture in the classrooms, HBF sofas and textiles, along with Marquis Seating lounge furniture. “The only problem we ran into was with a $12,000 custom upholstered sofa from New Zealand but after a change in manufacturers, we were able to achieve the look the client wanted at a major cost savings for them,” explained Campbell. “The orders were placed in mid-May and plans for setup began.”
“It’s wonderful to see the completed project,” said Campbell who has watched the construction and refurbishing progress for the past eight years. “It’s been a long time in the making but well worth it and Smarter Interiors is thrilled to share in what is and will be the centerpiece of Richmond’s cultural arts scene for many years to come.”
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With setup and installation scheduled for the third week of August and a open date set in stone, Smarter Interiors found themselves in a scheduling nightmare, with different trades people trying to work around each other to finish painting, installations, flooring, acoustics issues and stage work. “SMG really worked hard to schedule everything from delivery trucks to painters and finishers,” said Campbell. “In the theater, sound checks were going on as workers on scaffolds painted above them to make every detail just perfect for the opening.”
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Smarter Interiors was able to deliver, setup and install everything within four working days. The opening went on as
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Developing
Leaders Throughout Your Organization By Bill Kuhn
As I discussed in my September column, dealers must develop their workforce, blending both leadership and management at all levels in the organization. Dealerships are becoming more complex and the challenges are increasing in every position in your organization. Today’s economic and industry decline has added further demands on leaders and managers throughout your business.
Motivate Challenge Empower Commit
Create an appropriate learning environment I continue to assert that a positive, healthy culture is important when trying to provide the challenges and satisfaction that today’s workforce is seeking. People will display their potential leadership and managerial talents only when they are motivated, challenged, empowered and committed.
The key to performance is behavior—knowing what do to and how to act as a particular situation arises, knowing when to lead and when to manage. This behavior must be assumed and applied by everyone in the company.
Creating a strong culture that embodies the conceptual underpinnings of a learning organization is key to development. Learning must be an ongoing process that includes education, training, and real-life exposure to the variety of situations in your dealership.
Several dealer principals have told me that their most effective competitive weapon is their ability to develop and grow leaders.
Coach, develop, and stretch your staff
Exceptional performance can be a direct result of developing and growing leaders at all levels within your company. Being an effective leader-manager requires training and development to gain a better knowledge and understanding of your company and the culture you espouse, and what it takes to be a leader and a manager. Consider the following approaches in developing leader-managers throughout your organization: NOVEMBER 2009
Coaching focuses on personal development and feedback, combining education with real-life exposure. Train your people so they will know when to lead and when to manage.
Bill Kuhn, principal of William E. Kuhn & Associates, is a noted industry consultant, writer, and speaker with over 35 years of industry experience. He consults with dealer principals and their management teams in areas of strategic planning, leadership and organizational development, marketing, financial management, valuation and merger/ acquisition. For more information, contact Bill by phone 303-322-8233, fax 303-331-9032, or e-mail: BillKuhn1@cs.com.
Also teach them how to practice new behaviors in both leadership and managerial situations. Leadership training is ongoing; it never stops. Stretch your workforce and give your staff challenging assignments, set high expectations and coach them to meet those challenges and expectations. OFDEALER
continued on page 25 PAGE 24
Leaders | KUHN } continued from page 24 Evolving leaders should be asked introspective questions: What turns a manager into a leader? Do you have the ability to assume your boss’s position? Why should anyone be led by you? Your staff must be given information, guidance, and support in handling challenging situations. But likewise, they must be empowered—and that means you and your company must be willing to accept a level of risk.
Build teams Very few leaders possess all of the skills to be great operators and marketers or sales leaders—the skills needed to provide a distinctive mix of value at a profit. There are too many challenges today to go it alone. It takes a team of leaders, managers, and staff, all of whom collectively possess the necessary skills. Properly constructed, teams can be highly successful in identifying problems and opportunities, and in providing innovative approaches to enhancing productivity, profitability, and customer satisfaction.
determining then who has or may have the leadership and managerial potential to get your dealership where you want it to be. And when succession planning is tied to a succession management program, it can create a company-wide learning environment for the development of leader-managers.
Reward Those who lead—and will lead—want rewards, both financial and non-financial. In talking with potential future leaders within companies, I find they are motivated because they are committed to constantly learning more about leadership and management, but, more importantly, because they know they will have an important future stake in their company. Leadership at all levels can be developed and you can make it happen. Develop your entire staff to be leaders and managers—of one another and of your customers. It will improve your performance, enhance your culture, motivate your workforce and be a critical step in planning for your future.
Effective teams also provide a learning experience, as a team tackles problem-solving, deals with interpersonal relationships and draws upon both leadership and managerial skills.
Take on additional responsibilities Another approach to developing your workforce to assume leader-manager roles is to have your people take on additional responsibilities, perhaps even dropping some functions. The president of a highly successful client I’ve worked with constantly had their talented people switch jobs. For example, one person moved from the head of HR to IT, and then to marketing. The president’s philosophy should stand as a beacon for what every manager who aspires to greatness should believe: “I want to make every direct report highly marketable, so they have such a resume of achievements that they can always move on to an even better job if they choose to leave.” And an interesting side note: There was virtually no management turnover in that organization. It is estimated that people entering the workforce today will change jobs—even careers—five to seven times in their lifetimes. Why not have some of those five to seven changes occur right within your own company?
Tie in succession management Managerial and leadership development have a direct correlation to succession planning. Succession planning requires an understanding of where your talent lies, and
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Finding the
the
Answers to the Healthcare Market Puzzle Healthcare, in most cities, is moving ahead with building projects and hospitals, clinics and other major players are still acquiring furniture medical products, and other things for their projects. Projects have slowed, but they have not ceased to exist like in the commercial business sector. Certainly, if you ask a dealer who “really” is in healthcare today, they usually will tell you, “It’s not bad out there, better than our office business today.” The point to be made in this commentary is that the office furniture dealers who repeatedly say they want to be in healthcare or claim they already are in that market are for the most part very far off the mark. There is little understanding of the “healthcare sector” even though they may have a good understanding of the transactional business that needs to occur to sell a piece of furniture or “supply” a project with furniture. Frankly speaking, most of the manufacturers who make furniture specifically for healthcare are at a loss when they are pushed to explain certain aspects of healthcare that could really enhance their business and relationships or better yet, train their sales teams and the dealers’ sales teams on healthcare selling. They lack knowledge. One furniture manufacturer in West Michigan has some tremendous product alliances or owned companies with very high quality products that are part of the office environment that transfer nicely into healthcare. But this manufacturer has had a very difficult time selling these wonderful products into healthcare settings. Is it because the products are too expensive? Or is it due to a lack of understanding by distribution and their sales teams? Another West Michigan company who undoubtedly had the best opportunity of entering healthcare in the past 30 years has struggled terribly.
Last
word
boboosdyke HCFI
Why would a manufacturer that offers high quality furniture, seating, medical carts, healthcare storage solutions, nurses stations, ancillary healthcare products, healthcare architects, and healthcare dealers miss the mark of success in healthcare? How can a furniture dealer, who supposedly transformed itself into a “healthcare dealer” with one of the “big boy manufacturers,” not find success at every turn of the road in healthcare? After all, the customer, the hospital, is doing a building project and they need everything a dealer can offer—from medical carts and Rx carts and medical storage solutions to white boards, lecterns, materials management solutions, seating, sofas, nurse stations, work stations and executive offices. You get the picture on the potential of this account and we have not even discussed the medical office buildings yet! It must be frustrating for the “big boys” to offer all these product solutions and have so little success in their wide and most advantageous product lines! They do sell their fair share of furniture but again, they miss out on all the higher margin product areas. And for what reason? Bringing a total solution to the healthcare provider was an effective way to sell more “things” or products into healthcare. Selecting healthcare manufacturers who made product specifically for healthcare like exam tables, stools, exam lights, every type of cart imaginable, and too many more to list, represented a sure way to expand the dealers’ business and fairly quickly add revenues. After all, even the healthcare customer wants to reduce suppliers and get more products from fewer suppliers. Why wouldn’t an integrated solution work for the healthcare dealer? Group Purchasing (GPO) contracts DO NOT rule the furniture manufacturer/dealer world as everyone believes. This can be continued on page 27
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Last Word } continued from page 26 proven with a few simple questions to the dealers or manufacturers themselves.
furniture mentality to sell into healthcare and it is a costly and slow road.
For the large furniture manufacturers to insist on negotiating contracts with GPOs that reduce margins to a level that dealers are forced to make money on services is not wise.
Do not misunderstand me. Healthcare is still a tremendous opportunity even today. But you have to be serious about the market. The real healthcare furniture dealers of today are few and far between but when they “get it,” it really can take off and add volumes of business…not just in furniture but in all areas.
The only winner in this situation is the manufacturer and that is not always the case. Even the customer loses! Why? Because dealers cannot service the facility post-sale on the furniture margin, so they contract for after sales service, raising the price to the end user. With a long standing career in healthcare, my goal was to transfer the knowledge I gained from 30 years in real healthcare product selling and marketing, help furniture dealers become real healthcare dealers and give them access and education on additional product areas that are medical in nature. For example, if you are supplying a hospital with nurse stations, patient room seating and more, can’t you also provide the facility hampers, pharmacy carts, nursing carts, exam tables, stools, lights, etc.? You would think so! Why is it so difficult for dealers to implement the concept of providing “other products?” I am still convinced that the basic concept of an integrated healthcare dealership is alive and needed, but there are reasons why it fails in a dealership more often than it succeeds. This includes:
If you want to learn how a real healthcare dealership has developed—how and why—head to San Francisco for the holidays and visit One Workplace and speak with the owner Dave Ferrari or better yet, Cliff Bass, whose background is in healthcare, not furniture. They have a healthcare showroom like no other and they “get it”. Let them tell you about projects with architects, bundling product areas and why it works. Cliff gets it and so can you! Robert J. Oosdyke is president of Health Care Furnishings, Inc. (HCFI), a healthcare consulting firm that assists dealers and manufacturers in penetrating the healthcare marketplace with strategic plans, marketing strategies, and complete differentiation from competitors. His 25 years of medical product consulting can now benefit the furniture dealer. If you want more information on HCFI's exclusive territory rights to develop the healthcare market for elite medical products and furniture, contact boosdyke@hcfi.net, 949.480.2379. www.hcfi.net
Lack of healthcare knowledge. This is defined as really understanding the healthcare market and the needs of your customer and how your solutions benefit them in the big picture. Few manufacturers and dealers communicate or understand the inner workings of facilities and even more important, how healthcare really works in its totality, not just in the microcosm of the institution you are attempting to sell to. It is nearly impossible to get furniture sales people to sell anything beyond furniture. Whiteboards become a stretch! The market for Electronic Medical Records (EMR) is exploding. Carts or “computers on wheels” were developed for furniture dealers to sell for EMR situations and they failed miserably. Why? Lack of knowledge by the manufacturers and the dealers of how to penetrate the healthcare sector. Real sales management in dealers is poor overall. “They are on commission, if they don’t sell they don’t succeed” seems to be the attitude in many dealers. In healthcare dealerships, it is even worse on the healthcare side. Furniture manufacturers have been in and out of healthcare for years. They had or have too few individuals in their organizations that come from healthcare and they used a
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