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https://www.forbes.com/sites/robertreiss/2013/04/10/what-ceos-can-learn-from-the-n-y-knicks-coach-mike-woodson-with-insights-from-aramark-ceo-eric-foss/
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What CEOs Can Learn From N.Y. Knicks Coach Mike Woodson -- With Insights From Aramark CEO Eric Foss
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What CEOs Can Learn From N.Y. Knicks Coach Mike Woodson -- With Insights From Aramark CEO Eric Foss
Photo by Chris Nelson (Photo credit: Wikipedia)
The New York Knicks are in unfamiliar territory. Having just won their 51st game – and 13th straight – the Knicks have secured first place in the Atlantic Division for the first time in almost 2 decades. Even more impressively the Knicks have done this in a year when all 5 starting players have been injured, each missing at least 10 games this season.
This Knicks’ turnaround has financial impact. According to a recent Forbes report, the Knicks just regained the # 1 spot with the highest valuation of an NBA team at $1.1 billion.
Just as the business community often tries to understand unexpected success of a company, many wonder how the Knicks have turned their franchise around. In business, it’s often an exceptional new CEO; for the Knicks I believe it’s their new leader, Coach Mike Woodson. Woodson has displayed the great leadership quality of continuous improvement, with his winning percentage improving each year: .159, .317, .366, .451, .580, .646 … and, with the Knicks where Woodson just completed his 101st game as head coach, .680!
I recently asked Mike Woodson what the key to his success this year was and he responded, “It has been a total team effort. We have a committed group of players and, from Day 1, we gave ourselves certain goals to achieve. We are all about achieving those goals and making a genuine, serious effort to grab that NBA title.”
In considering Woodson’s success and how it relates to business success, I’ve split this article into two parts: part 1 is my insight as a Knicks fan for 40 years and having interviewed about 275 CEOs; Part 2 is answers from Eric Foss. I met Eric when he was CEO of Pepsi Beverages – and coach of my daughter Molly’s basketball team, St. Mary’s Ridgefield Connecticut 5th grade girls’ travel basketball. I knew Eric Foss was the perfect executive to share perspective on ‘What CEOs can learn from Mike Woodson’ because: Eric has personally attended 100 Knicks games over the past 4 seasons, coached youth girls basketball for 15 years, and after his leadership at Pepsi became CEO of ARAMARK, where he is managing over 250,000 employees.
PART 1
1. Start with exceptional product – your defense. The fundamental truth of basketball is there are just two elements: offense and defense. Woodson’s first move was to get the team to focus intently on defense. Defense in business is the quality of your product or service. Look at Apple . Once it had superior product, then the offense – or sales, marketing and customer outreach - becomes a whole lot easier. Turnovers in basketball are like a poor product. Woodson knew to get his team to put a quality product on the floor he had to limit the number of turnovers – a stat few teams have as their primary focus. But Woodson recognized that last year the Knicks were in 29th place of 30 teams with 16 turnovers a game, and that this focus could be a key to unlock the Knicks’ potential. Woodson in essence told his team, “if you turn over the ball more than 13 times a game, you’re running laps; however, if it’s under 13 times a game, the coaching staff including ME will run laps!” Now that’s an authentic, powerful approach. The result, the Knicks are leading the league averaging just 12.1 turnovers a game. Woodson’s running laps, and the Knicks have become a defensive-minded winning team.
2. Build accountability through direct, but respectful communication. Many coaches don’t stand up to their superstars, which is analogous to not holding top executives accountable. Mike Woodson comes down hard on anyone, including their star Carmelo Anthony, if they are not playing defense. And by Woodson’s communication, we’ve all witnessed the change. Steve Novak, the Knicks sharp shooting three-point specialist says, “When I make a mistake coach tells me about it, then tells me to move on.”
3. Get talent, even if unconventional. In the off-season Woodson helped bring a 35 year-old rookie and 4 more players over 35 to the Knicks, including 2 who are now 40 years old! Most were players other teams had passed on, but Woodson knew that each player would have a specific role. And he knew individuals with unique talents can comprise a great team. In fact the NBA’s oldest player Kurt Thomas used his experience to be the catalyst who helped the Knicks win the pivotal game in Utah, which stopped a 4 game skid and started the Knicks 13 game winning streak. In an organization, the right talent and ultimately the culture are the heart of success. And it’s not just superstars; it’s a combination of the right role players.
PART 2 Eric Foss’ insights:
What has Mike Woodson done to turn the Knicks around…what can CEOs learn from this?
Woodson started by building a culture with teamwork as the centerpiece. By making sure everyone understands their role- Melo as the key offensively, Tyson Chandler as the defensive catalyst and rebounder, and JR Smith and Steve Novak as the offensive spark off the bench as the floor generals and facilitators. By doing these two things he unlocked their full potential and allowed them to thrive as individuals while also nurturing their potential as a team. These principles apply to any business/CEO as well. One key role for any CEO is to create great culture with the right mission and values. CEO’s are also responsible for providing clarity to their organization. Ensuring everyone understands their roles leads to clear accountability, establishes clear goals and working together achieves the organization’s mission and shared goals.
As a two-time CEO how have you been able to utilize these ideas?
When I was named CEO at ARAMARK, I spent the first 100 days “listening and learning”. One of my first points of action was a listening tour to establish the right tone/culture. Our overall mission is to “enrich and nourish lives”. The cornerstone of our culture was built on four key values:
1). Sell and Serve with Passion (let the marketplace set the table)
2). Front Line First (ensuring the 250,000 associates are supported by the leadership team)
3). Set Goals. Act. Win. (Results matter and we celebrate success constantly)
4). Integrity and Respect Always (We do things the right way)
Our focus as a company is on the constituents that matter most…helping consumers, clients, employees, shareholders and our communities “build” what matters most to them. We just spent the last 3 months on a “global road show” which is all about building the culture and creating alignment across the team, which is critical to any NBA team and any business.
What similarities are there between coaching a team and being a CEO?
My only coaching experience has been coaching my daughters’ basketball teams over the years, not anything like coaching in the NBA, but the “foundation” I’ve used as a Coach and CEO centers around four c’s. First is conviction. All you can ask from each member of the team is to do their best and give their all every day. Second is courage…in sports and in business it is essential that the team/organization be aggressive, stay on their toes, are willing to take risks and look to put points on the board at all times. Next is confidence. Confidence is all about maintaining the look of a leader in good times and bad and the ability to get knocked down and to pick yourself up and keep moving forward. The final c is commitment, which is all about playing as a team. There are many similarities that are transferable from coaching a team to leading an organization.
… In summary, Mike Woodson has come full circle. The Knicks originally drafted Mike Woodson as a player in 1980; now he’s their coach who is helping make the franchise the centerpiece of New York City sports.
In basketball lore the greatest offensive player was Wilt Chamberlain who averaged an astounding 50.4 points a game one year, but the defensive-minded Boston Celtics won 11 championships in 13 years. Knicks fans are hoping the defensive-minded Woodson will bring one of those championships back to New York City, just as CEOs can use Woodson’s leadership philosophy to bring winning performance to their organization.
New York Knicks logo (Photo credit: Wikipedia)
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205c592c9cdc8065546ac8a170b2c714
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https://www.forbes.com/sites/robertreiss/2013/05/03/new-research-cites-how-ceos-outperform-the-market-and-become-a-transformative-ceo/
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New Research Cites How CEOs Outperform The Market -- Become A 'Transformative CEO'
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New Research Cites How CEOs Outperform The Market -- Become A 'Transformative CEO'
Transformative CEOs Outperform the Market by 44%
After decades of studying organizations and CEOs, I believe that enterprise has now entered the 4th phase of business – The Transformative Organization. In the 1920s General Motors ’ Alfred Sloan introduced the corporation; in the 1950s Peter Drucker codified the practice of management, in the 1980s Japanese business brought quality and teams; and today the next phase of enterprise has emerged, Transformative Organizations, those who combine higher purpose and profit.
This new breed of organization is lead by Transformative CEOs. I define a Transformative CEO as someone who “creates new value that reinvigorates a company, reinvents an industry or reboots society”. To understand attributes of Transformative CEOs Jeff Fox and I studied hundreds of CEOs and outline this new breed of leader in our book, The Transformative CEO (McGraw-Hill 2012).
But in the back of my mind was a nagging question: Does such transformative leadership produce superior financial results or not?
So I reached out to a research firm The Knowledge Agency® (TKA) to devise and execute a test of this key question. Following are their process and findings …
TKA used a fundamental benchmark — the change in the stock price during each CEO’s respective tenure in that role. Since market conditions varied widely over the differing time frames tested, they gauged the results against the return from the overall market, as measured by the return on the S&P 500 index. The S&P 500 is said to represent over 75% of the US equities market.
The benchmark metric was stock price return in excess of the return from the S&P 500. TKA tested all eleven of ‘transformative’ companies (identified in The Transformative CEO) that were publically traded and had market capitalizations over $1 billion as of June 1, 2012.
Of the eleven CEOs tested, ten presided over share appreciation greater than that of the benchmark during their respective tenures. In five of the cases, this was by a triple- or quadruple-digit percentage point margin! The median of these test companies exceeded the market by a significant margin of more than 44 percentage points.
These superior gains were achieved both in periods experiencing up markets (the strong expansion experienced by Home Depot during the ‘80s and ‘90s) and in those with down markets (the prolonged contraction experienced by General Mills , UPS, and Campbell Soup since 2008).
When looking behind these numbers, TKA found that the single outlier, Xerox , actually had performance that for six of the focus CEO’s seven years in office exceeded that of the market by a margin of as much as 70 percentage points. However, during the significant downturn that started in late 2008, Xerox lost its gains and fell below the market for the first time since 2003.
Each of these CEOs had ample time to implement his or her agenda. The minimum CEO’s tenure in that role was about five years, the maximum over 23 years. (The return figures shown do not adjust for these variations. When we did that adjustment, the results were similar, with slight changes in the order of the companies. Transformation is more a matter of sustained superior performance than short-term windfalls.)
I asked TKA president and competitive strategy expert Tim Powell about the implications of his research. His comment was: “The CEO is really also the 'Chief Value Officer' of an enterprise. It's a key part of his or her job to set and monitor strategic value goals, to make sure that opportunities for value are maximized, and that threats to value are minimized. For a traded company, the single metric that summarizes success on all these dimensions is the stock price. We believe shareholder value incorporates all other forms of value that a company produces.
TKA measured the stock performance of companies selected previously based on the 'transformative CEOs’ criteria. We found that the results illustrated quantitatively that Reiss and Fox had captured so well qualitatively — that superior performance by a CEO can drive superior performance by a whole organization, which is then reflected in its stock performance relative to the market as a whole.”
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b6be2239f3b9d9a68a8522789c8258cd
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https://www.forbes.com/sites/robertreiss/2013/06/11/can-we-solve-our-global-health-challenges-industry-leaders-share-solutions/
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Can We Solve Our Global Health Challenges? Industry Leaders Share Solutions like Genomes
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Can We Solve Our Global Health Challenges? Industry Leaders Share Solutions like Genomes
Health is the oxygen that impacts practically every element of our life and economy. But today’s powerful winds of healthcare change make it hard to grasp systemic problems and solutions. These include: the changing consumer, the role of innovation and technology, growing challenges like diabetes, and out of control healthcare economics.
What I set out to do was engage three of the smartest people in different areas of health to bring broader perspective and clarity to where health services are, how they are changing, and what we should focus on for a better future.
On May 15, 2013 we convened: George Barrett, Chairman and CEO of Cardinal Health a $107 billion leader in health services; Fred Hassan, Chairman of Bausch & Lomb the 153 year old leader in eye care (and former CEO of Schering-Plough); Craig Binetti, President, DuPont Nutrition & Health, a leader in food ingredients and food protection solutions. Insight expert Sean Campbell, Life Sciences Industry Leader at IBM kicked off the meeting with insight from IBM’s CEO study. Below are the quotes …
1. How is the health consumer changing?
George Barrett, Cardinal Health: “In the U.S. patients have not really been consumers of healthcare. They’ve been consumers but they haven’t behaved like consumers. Historically, we’ve had an interesting disconnect between those who recommended the course of treatment, the physicians; those who paid for the treatment, which was some kind of insurer; and those consuming it, the patients. Some employers are now beginning to encourage, teach, and incentivize their own people to behave more like consumers and this can happen with more knowledge and transparency around cost and quality.”
Craig Binetti, DuPont: “We see a population of 7 billion growing to 9 billion by 2050. As it’s an aging population there will be increased importance of affordability, availability, access, nutrition and safety of foods. So we see increasing needs around health and wellness. For example one in six people go to bed hungry every night yet 20% of the world is obese. One thing we’ve worked on is improving access to information with the Economist Intelligence Unit to sponsor a Food Security Index.”
Fred Hassan, Bausch + Lomb: “There is a shift in responsibility to the consumer in terms of a lifetime of care for themselves. We have historically been treating consumers like populations. And we look at statistics, and averages, and medians. But every consumer is a person. And now that there is more health literacy because of the web and because of so much other information being available, consumers are now better empowered to take care of themselves in many different ways as they go through life.”
2. Specifically, how do you see technology and innovation driving solutions?
Craig Binetti, DuPont: “If you think about skills like microbiology, or immunology, or genomics, or biochemistry, when we have those kinds of skills then we can understand the way the heart works, how the digestive tract works. And so those kinds of capabilities really allow us to get to what some of the root causes whether it’s obesity or diabetes. I also think about technology from a product innovation point of view like how in Kenya technology can allow milk to be able to stay fresher longer.”
Fred Hassan, Bausch & Lomb: “We can now go to individuals’ genomes and, in an increasing number of cases, come up with specific medicine or treatment approaches that match that person’s own genome. If you look at many of the medicines right now, they work very well about a third of the time and about two-thirds of the time either there is a side effect or they don’t work very well. If we can get that one-third “highly effective” level to say two-thirds, you’ve just dramatically improved healthcare for consumers.”
George Barrett, Cardinal Health: “Our ability to use technology to study genetic factors to target the right patients with the right treatments has a profound impact. This will not only improve patient care, but it also means that we’re likely to lower the cost of studying the drugs because we’re going to be able to target those patients who are likely responders. When it comes to patient care, averaging is our enemy.
We also know that readmissions to hospitals are often driven by problems with polypharmacy, and the interaction of various medicines. If we understood how people were taking and responding to their medicines more effectively, through the use of mobile devices for example, we could prevent some of those problems.”
3. How about challenges like diabetes?
Fred Hassan, Bausch & Lomb: “We have about 18 million people with diabetes, which as you know is a very expensive condition and is a major burden for healthcare budgets. But there are 79 million people who are pre-diabetic. Now in my opinion, we must find a way to get these 79 million people to take their healthcare very seriously, to work on their nutrition, to work on their exercise so that they don’t have to go onto diabetes. Most of the issues that develop downstream are avoidable.”
Craig Binetti, DuPont: “Keeping people in a wellness state by what they eat and how they utilize what’s available to them everyday really can make a difference. It’s the micronutrients in the diet. These kinds of things keep you in a proactive health state and help avoid people from developing diabetes.”
George Barrett, “Before I respond to that specifically, there’s another dynamic at work here. The issue of wellness has become a central theme for business leaders as they engage with their employee populations. This goes beyond what your business mission is and what your purpose is; it’s about how you connect with your employees in a positive way. And engaging employees around wellness can be a prime connector. To the specific challenge of diabetes, the potential impact of education around the prevention of diabetes and the role of the individual is really significant. We know there are millions of pre-diabetics who can be helped through a focus on wellness. And here at Cardinal Health, our benefit systems are really designed around encouraging the right behaviors and encouraging a focus on wellness.”
Fred Hassan, Bausch & Lomb: “As George mentioned, CEOs are getting very engaged. And diabetes is one very obvious example where a lot can be done because it’s something where you can analyze the blood very easily. Employees should know what their HPA1C numbers are. They should know what the right numbers should be. There is no reason why more education cannot be done there. A lot of good education occurred regarding bad cholesterol numbers about ten years ago. I think now we are very close to a new wave of education around diabetes. And I think CEOs of larger companies can make a major difference here.”
4. As leader, what data points do you look to when you develop strategy?
Fred Hassan, Bausch & Lomb: “In looking at a health science project, usually it’s a triangle of three points where the questions to us are: Does it add years to life? Does it add life to years? Does it cost or does it actually save money? So in the diabetes example, that is a clear example where through innovation, we can add years to life. We can add life to years. And we can actually reduce the cost of healthcare. So this is the kind of thinking that allows us to go after things that really matter.”
George Barrett, Cardinal Health: “We are always observing the shifts in utilization real-time in the system by population, by procedure, by site of care. This tells us a lot about the migration of care; how healthcare is changing illuminates hotspots of waste and efficiency.”
Craig Binetti, DuPont: “We look at obesity rates and where they’re occurring. We know 65% of the world’s population lives in countries where overweight and obesity kills more people than actually being underweight. It’s increasingly places like Asia Pacific showing rapid increases in rates of child obesity for example China and Hong Kong and even countries like Viet Nam. So we look at statistics like this when we’re thinking about products and innovation.”
5. Your organization is deeply involved in supply chain, what insights do you have?
George Barrett, Cardinal Health: “Today’s healthcare has become increasingly integrated. And so one of the things that we are very conscious of is how we create that connecting tissue in the system.
For us it’s partly making sure that we’re positioned all along the continuum of care and able to serve the system all the way from pharmacy, to hospital, to oncology clinic, to surgery center, to physician’s office, and to the home.”
Fred Hassan, Bausch & Lomb: “Bausch & Lomb has thousands of vendors around the world. And keeping up with all that not only is a cultural challenge because you want the vendors to be aligned with you culturally, but also process wise is a bigger and bigger challenge every year.
Nowadays, for example, when talk about R&D, we automatically think of a CRO, a contract research organization, to do our work in eye health. That was not the case 20 years ago. But working with the CRO in a seamless manner is a major challenge. And I think these are some of the new skills we’re going to need in this century on how to work with outside people who are part of your ecosystem.”
Craig Binetti, DuPont: “We see that supply chains are getting longer and more global. And that’s creating even more complexity and challenges. From a global perspective, 30% of the population experiences a food borne illness every year. And so protecting that supply to health of that supply chain is another area that’s really changing and important to tackle.”
6. What is the one thing you’d like to see happen to improve the economics of healthcare in America?
Craig Binetti, DuPont: “We have increasing needs around education and awareness especially with understanding at an early age the importance of preventive care, diet and nutrition. We’ve committed to engage over two million young people every year around the world in building up their knowledge around nutrition and the importance of food safety and health and what we call food security. So I think that’s an area I’d like to see us continue to help drive. And I think with that awareness will come more prevention and help defray costs.”
Fred Hassan, Bausch & Lomb: “If we spent the same on health care on a per capita basis as some of the wealthier countries, we as a US economy, could save $800 billion per year.” A lot of difference is because the American population insists on Cadillac care. We are very insistent on the best care that we can get, especially as we get older. Some of this, we cannot really adjust in any way because that’s the way we are made as a people. But there’s one element where we are an outlier and that is the whole area of litigation. We are definitely an outlier country and defensive medicine does get practiced and it worsens our outlier status as a high health care spender.”
George Barrett, Cardinal Health: “There isn’t a single silver bullet. Clearly wellness and education are essential. I think increased coordination of care will give us better outcomes at lower cost. Further, as transparency in the systems increases, I think we’re likely to see even more consumerism in healthcare. Patients are beginning to behave more like consumers -- understanding their own health and the implications of their choices. We must recognize that it’s a journey; it’s not going to happen overnight. But I think there are some changes that have already begun to occur.”
7. What specifically is your organization doing to improve that future?
George Barrett, Cardinal Health: “We will see increased innovation. And I would argue here, innovation is not just about product innovation, it’s also about business model innovation. It’s the way you do what you do. We’ll see more focus on improving outcomes and driving down costs. In this area, we are devoting considerable energy to helping integrated delivery systems cope with the changing sites of care delivery, as care is increasingly delivered in more ambulatory settings.
I think we’ll see the same types of tools that are used in other segments of the economy where there are much more standardized activities. And I think standardization is going to be especially helpful in certain areas. As an example, our organization is helping community oncologists develop standardized clinical pathways that enable more cost-effective care and better patient outcomes. And for Cardinal Health, again, much of our work will be about following the patients through the continuum of care.”
Craig Binetti, DuPont: “The population is growing and aging. As the demographics of the world change, individual consumer needs are going to change. We’re going to have to provide those kinds of services in different parts of the world, differently. It goes back to science and innovation. At DuPont Nutrition & Health, we are building our knowledge of how things work in the body – In the heart, in the digestive tract, and in the brain. All the things that will come with people living longer and where they live. And so I think that’s more customized, more personalized going forward.”
Fred Hassan, Bausch & Lomb: “I believe this is the life sciences century in terms of innovation. There is ten times as much eye care needed for those over the age of 65 as those below the age of 65. And we’re seeing an aging of the world’s population. So it all comes back to innovation. If you can keep people from going blind, if you can help people deal with the issues of old age as far as their eye care is concerned then you’re adding enormous value. And at this time, a lot of the diseases in the front of the eye are well understood. The diseases in the back of the eye, such as acute macular degeneration, those are not well understood. And to me, that is the next frontier in innovation. And our firm, Bausch & Lomb, is working very hard in that space.”
… In summing it up, Sean Campbell, Leader of the Life Sciences Industry at IBM said, "We agree this is an exciting time for the life sciences and healthcare industry. Empowered by information and technology, patients are starting to act more like consumers, with more access to treatment options and visibility to the associated costs and choices. Technologies like predictive analytics are being used to better understand diseases and potential treatments and to identify similarities across patients to improve the quality of care. Industry leaders are applying advanced analytics to improve disease management, drive more focused sales and marketing efforts, and to build new analytics platforms, that combine internal and external data, to create new business models to coordinate care across the healthcare ecosystem. Overall, technology and innovation will be key contributors to improve the quality of care, reduce the cost of care, and most importantly, improve patient outcomes."
Robert Reiss is Host of the nationally syndicated radio show The CEO Show. To hear CEO interviews go to www.ceoshow.com
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9b3a601801f07d628e194741254204b7
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https://www.forbes.com/sites/robertreiss/2013/07/08/customer-experience-is-now-the-5th-marketing-p-and-other-top-cmo-insights/
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Customer Experience Is Now The 5th Marketing 'P' ... And Other Top CMO Insights
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Customer Experience Is Now The 5th Marketing 'P' ... And Other Top CMO Insights
As consumer individual preference is increasingly driving business, the CMO is increasingly at the center. The exponential growth of unstructured data from sensors, devices and social media is arming CMOs with the information to change business and transform the customer experience. In fact, Gartner predicts that by 2017 the technology spend by marketers will outpace that of CIOs.
Following are direct insights from a discussion I moderated on June 11, 2013 between Lisa Macpherson Senior Vice President of Marketing, Hallmark; Alan Gershenhorn, Chief Sales, Marketing and Strategy Officer, UPS; and Kenneth Dixon, Vice President and Chief Marketing Officer, Verizon Wireless. The below quotes should help you get inside the head of what some of today’s market leaders are thinking.
1. How are global business trends changing your business?
Alan Gershenhorn, UPS: “In the next two decades, there will be 3 billion people added to the middle class and the vast majority of them will come from the emerging economies. We’re spending a lot of effort and resources understanding those markets to make sure our customers can reach those consumers, in particular providing the best transportation, technology and supply chain infrastructure to support global commerce.”
Lisa Macpherson, Hallmark: “A trend, particularly acute among millennial consumers, is a very strong bias towards transparency and authentic, real connections with brands. This is driving a merging of the concepts of reputation and brand.”
Ken Dixon, Verizon Wireless: “One big trend we're seeing specifically in wireless is in the machine-to-machine space which is expected to grow to 30 billion connections in the next five to seven years.”
2. How do you utilize data and analytics in your marketing strategies?
Lisa Macpherson, Hallmark: “Our whole approach to campaign management is changing, from a calendar-based, seasonal approach, to one that's much more proactive, and much more based on behavioral triggers. So, we're not talking to you just because Valentine's Day is coming up, we're talking to you because you've shown an inclination to buy cards with a very intimate tone in the past. And so that's the tone with which we speak to you. We are really changing the whole approach we use to create and manage campaigns, from pushing content based on the calendar, to customized, personalized content based on your behavior.”
Ken Dixon, Verizon Wireless: “Technology allows for fast, fluid changes and you can easily adapt to specific communities of interest. The pendulum is already beginning to shift. People are moving away from traditional broad scale marketing initiatives to targeted efforts aimed at individuals and their preferences. For example, we can make relevant product recommendations based on a customer’s previous activity, or suggest a device upgrade based on what others who have had their handset typically choose.”
Alan Gershenhorn, UPS: “UPS is actually in the business of helping our customers become more successful. We use data, and an understanding of our customers supply chains, to help them grow their business, either by uncovering new revenue opportunities or cost savings. We use that data to quantify, in monetary terms, the value our solutions provide. We also use data to develop new products. In healthcare for example, we developed services for pharmaceutical manufacturers that monitor temperature-sensitive products, such as vaccines, throughout the journey, thereby ensuring the product arrives in perfect condition.”
3. What is the connection between marketing and customer experience?
Ken Dixon, Verizon Wireless: “The customer experience is extremely important, especially in terms of making sure that it's consistent across all channels—whether customers visit our stores, interact with us online, interface with Verizon Wireless from their handset, go to an indirect distribution partner or call one of our customer service contact centers. Customers are looking for companies that are easy to do business with and they are looking for brands to offer an experience that's the same no matter where they choose to do business.”
Alan Gershenhorn, UPS: “It truly is 360 degrees. It's every touch point at UPS, because we are in a B2B environment where it's more than one individual customer. It's the person who signed the agreement with UPS, the employee processing the shipment at the warehouse, the home or front office, and it's also the receiver of the package. We've spent a lot of time on our shippers' customers -- making sure we're delivering the experience our shippers expect their customers to receive because we are very much a part of that customer experience. And that's what really lead UPS to develop UPS My Choice, which essentially gives the residential consumer the ability to get their packages when and where they want them. It's received some very high customer experience marks. We already have more than three million customers enrolled in this service.”
Lisa Macpherson, Hallmark: “Customer experience is now the fifth marketing P that needs to be managed as purposely and carefully as the product, and the price, and the promotion, the traditional Ps of the marketing mix. We now have to consider how technology enables the service experience, and how sales associates are hired and trained and coached to interact with customers. Now we see the brand as something to be managed across every single touch point. For example, one of the greatest outcomes of our social listening and sentiment analysis at Hallmark was actually to change our model for consumer service. We had a very traditional 1-800 type of model, yet the vast majority of our feedback from consumers was coming in indirectly through social channels and that is where we needed to address it. And yet we wanted to have the same high quality, intimate connection and feeling in that relationship in social that we did when we had someone on the phone. That's really led to a mindset that we've been trying to nurture, that it's not just social media, it's social business.”
4. What are ways you interact with other C-Suite members to drive results?
Alan Gershenhorn, UPS: “Certainly there's significant interaction among us. Part of my responsibility is to develop new products as well as customer-facing technology, so I have a very strong relationship with our CIO, for example. The other thing I'd add is we're spending a lot more time now with the C-Suites of our customers, and our prospects, because we're really keen on understanding what their business objectives are and how UPS can assist by leveraging our expertise in global supply chains.”
Lisa Macpherson, Hallmark: “The number of C-Suite members that Marketing engages with every day has expanded. We now work a lot with the CIO, about data collection, data governance, data infrastructure and mechanisms on how to create insight from the overwhelming amount of data that we share.”
Ken Dixon, Verizon Wireless: “Most of my positions through my career have been in sales, and regional and area leadership, but what I will tell you is now everything we do is a team effort; collaboration across all disciplines is at an all-time high. We have incredible collaboration among all the senior leadership. And, everything we do we say, let's make sure we put the customer experience first and foremost.”
5. How will business change over the next few years and what will your organization do to capture new opportunities?
Ken Dixon, Verizon Wireless: “The devices coming out are more exciting than ever. Right now I have a Jawbone wristband on that's tracking my sleeping patterns. It's also tracking my activity level in terms of how many steps I've taken and how many calories I've burned. It’s a wearable device that syncs with my phone and it really keeps me up to date on my level of activity from a health and wellness perspective. So, I look at our devices in terms of getting fit or from an education or healthcare perspective, and I just think it's limitless at what we'll see in the next couple years…a very exciting time for Verizon Wireless.”
Alan Gershenhorn, UPS: “We believe that global trade is the most powerful force in business. Right now almost 40% of our revenue is outside of our US domestic package business. So as the pace of change gets faster and the world more complex, our customers, and their customers, demand more. So we're going to be investing more in developing deeper insights into specific industry supply chains so we can help customers reengineer their global supply chains. We’re going to be investing more in emerging markets. We will also focus on small companies as well because they can be the disruptors out there. We're also investing a lot in the area of technology because we believe that technology is one of the secrets to helping improve the customer experience.”
Lisa Macpherson, Hallmark: “Data and mobility are two key drivers of change for us. We're also looking hard at what kind of talent pool and hiring practices we need to adopt now in order to be agile, and at the same time, have grit in terms of strategic perseverance. We're finding in marketing, specifically, that we need more generalists inside to frame a business problem or a marketing problem, and then more agency experts outside, who because of their broader client base can offer individual technical specialties or just keep up with the pace of change in different marketing touch points.”
… In summary, Matt Preschern from IBM who was cited as the B2B Digital Marketer of the year in 2012 shares, "Marketing should play a leadership role in setting the customer experience strategy, and how the brand is experienced at every touch-point. That includes when a client visits the web page, any interactions with the call center, client proposals, or the purchase or delivery of a product or service. Operationally, however, I believe the entire company and all functional areas - sales, operations, call centers, customer service, procurement and all digital interactions, including marketing - need to be executed flawlessly to deliver a superior client experience that is on brand."
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4c02de01802658a4b27d6e03798a56d5
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https://www.forbes.com/sites/robertreiss/2013/08/14/how-ceos-can-engage-through-social-media-a-conversation-with-weber-shandwick-ceo-andy-polansky-on-ceos-and-social-media/
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How CEOs Can Engage Through Social Media -- A Conversation With Weber Shandwick CEO Andy Polansky On CEOs And Social Media
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How CEOs Can Engage Through Social Media -- A Conversation With Weber Shandwick CEO Andy Polansky On CEOs And Social Media
Andy Polansky sharing CEO social media insights with Robert Reiss
Social media has rapidly evolved into an integral part of marketing and public relations strategy. Just as having a company website has become standard operating procedure over the past two decades, utilizing social media channels has now become an increasingly essential platform for companies to communicate their messages to the general public and other audiences. What about the CEOs of those companies? Is there a place for them on Facebook , YouTube, LinkedIn and Twitter, and is this helpful or harmful to their company and role as CEO?
I spoke with Andy Polansky, CEO of global public relations firm Weber Shandwick, about CEOs using social media and his own role as a “social CEO.” This month, Polansky marked his 30-year anniversary at the firm. I also spoke with him about the transformation he’s seen in the PR industry over the past three decades, and how Weber Shandwick is evolving as a global leader.
Many CEOs are reluctant to use social media because they are afraid of a misstep. What's your take on CEOs in social media?
For many CEOs, social media is uncharted territory, so it’s understandable that many are reluctant to utilize the various platforms. It is important to recognize that, like so many undertakings in communications and business, there is no single formula for success. In the end, a CEO has to find the best platforms to communicate online and offline and, most importantly, to do it in an authentic way. To be honest, nothing succeeds like face to face. Yet, done well, using social media can be another compelling way to enhance the company’s reputation, business results, employee communications and tell stories around innovation. The fact that 75 percent of global executives say that having a social CEO humanizes the company should be compelling.
How engaged or disengaged are CEOs with social media today?
We are seeing a significant uptick in interest among CEOs, who increasingly recognize the importance of social media and social platforms – not just to engage external constituencies, but also to reach out and connect with their employees. Global executives project a 50 percent growth rate in CEOs’ use of social media over the next five years.
Social media is a particularly valuable platform because it allows for two-way conversations and, with that, engagement on a substantive level that is unprecedented. Not only can I share my message, but I can also listen to and solicit feedback and ideas – from employees, clients, the general public or the media. Seventy-three percent of executives say CEO social participation gives employees the chance to communicate directly with the CEO. It’s a fantastic tool for real-time conversation, and that’s very important to any CEO in today’s fast-changing business and media environment that has no boundaries.
To give you a sense of how valued a social CEO is, our global study found that 76 percent of executives think that it is a good idea for their CEOs to be social. Among their reasons for favoring their CEO's social participation is how it reflects internally – 52 percent feel inspired by their CEO's sociability. Looking externally, 69 percent say that it enhances the company's market credibility. And in general, social CEOs are much more likely to be seen as good communicators than unsocial CEOs -- 55 percent vs. 38 percent, respectively.
Over the 30 years you've been at Weber Shandwick how has social media changed the PR landscape?
The most significant change in the communications sphere has been the speed at which news travels around the world. Today’s news cycle is no longer 24 hours but 24 minutes in some cases. In that regard, social media and digital strategies have had a profound effect on how companies practice public relations and market their services. To adapt to this rapid rush of news and information, a central focus of our strategy is now centered on how to engage key stakeholders across multiple platforms, and how to do it in creative and compelling ways that distinguish clients and promote interactivity. Weber Shandwick’s mantra is “engaging, always.” This operating tenet represents how we think about the business today and how we counsel our clients to join the conversation afforded by a more connected, social world.
Public relations transcends the opportunities surrounding social media, however. Companies are more focused these days on reputation and policy issues, and what they can learn by listening carefully to their customers in order to inform strategy. In addition to our well-established marketing savvy, we’ve built a firm that also has a strong global team of experts in corporate affairs, issues management, and public affairs as well as in technology and healthcare. That continues to serve Weber Shandwick well in this environment, and the firm has grown considerably around the globe in recent years as a result.
You point to authenticity, do you think it is at the core of all this?
Absolutely. One always has to stay true to themselves and their own style. To stay close to what employees and customers are thinking and feeling, I have always had a walk-around management philosophy. For me, social media platforms are a valuable way to “walk around” on a global scale.
Can you provide an example of how you use social platforms as a CEO?
At Weber Shandwick we have an intranet called MyWeberShandwick, which is a highly collaborative platform. It’s a great vehicle for all of our employees to create communities of interest, share best practices and celebrate successes. As a CEO, it’s a great listening tool and an immediate way to connect with a team that is spread across 81 countries.
A few weeks ago, I participated in an “Ask Me Anything” Q&A session on the intranet. Our employees – from Shanghai to Berlin to San Francisco and beyond – asked me all sorts of questions, ranging from personal career advice to tips on how to enhance client relationships to what’s currently on my music playlist. It was a great way for me to connect with employees and get a pulse on their concerns and interests, and I had some fun with the give and take.
To read the Weber Shandwick study on CEO social media The Social CEO: Executives Tell All go to: [http://www.webershandwick.com/uploads/news/files/Social-CEO-Study.pdf]
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2599fcc2551424fc0445685db485aad9
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https://www.forbes.com/sites/robertreiss/2013/08/27/how-top-ceos-think-from-big-data-to-the-future/
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How Top CEOs Think, From Big Data To The Future
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How Top CEOs Think, From Big Data To The Future
Have you ever wondered, what’s top of mind for leading CEOs? Below are direct quotes from a discussion on July 23, 2013 with some of the most admired CEOs on key topics like: uncovering emerging changes, CEO priorities, what’s around the corner, the future of big data, differentiating their customer model. The CEOs in the discussion all have 100 plus year old companies who lead their specific industry.
- Hikmet Ersek is CEO and President of Western Union, which might actually be the world’s largest retailer with 520,000 storefronts and more than 1 million agents. Ersek was cited as 2012 ‘Responsible CEO of the year’ by Corporate Responsibility Magazine.
- Shivan Subramaniam is 14-year CEO, and Chairman, of FM Global. FM Global is the 185-year old insurance leader with no actuaries – only engineers -- where 30% of the Fortune 1,000 are clients.
- Jim Hackett, 19-year President and CEO Steelcase. He transformed Steelcase from a West Michigan focused business to a global leader in workflow, services and innovative work products.
1. How do you uncover emerging changes?
Jim Hackett, Steelcase: “We take an intense look at the most abstract level of “why” things are as they are. In other words, we try to understand complexity and the dynamics we can isolate what “emergence” is taking hold in our sector. We saw the implications of mobility when we were studying the first placements in the US of PC’s in American MBA programs. The students wouldn’t turn off the pc’s between classes because they took too long to boot up. The emergence of the promise tablet based software was playing out right in front of our eyes. The year was 1996.”
Hikmet Ersek, Western Union: “For many years, Russia was an inbound country, meaning people sent money into Russia. Now it’s a different environment. Russia is much more of an outbound country, where we are seeing people sending money from Russia to Central Asia and other countries. We knew about the shift in Russia before any newspapers or economists.”
Shivan Subramaniam, FM Global: “Every month we look at data from our Fortune 1000 clients, in terms of the facilities they are buying or building versus those they where they’re actually contracting. So we could have told you back in the 1980s, based on our client data, that consistently Fortune 1000 manufacturing companies were reducing their manufacturing capacity in North America and increasing it outside of North America. And that allows us to position our engineering forces all around the world as our clients expand. For instance, approximately 30 years ago we started to hire Mandarin-speaking engineers because our data clearly showed more of our clients in North America and Western Europe were pursuing growth opportunities in China by either buying facilities there or building on greenfield sites.”
2. As CEO, what’s your priority?
Shivan Subramaniam, FM Global: “My number one priority is to look ahead and ensure the company is leveraging its scientific research capabilities to anticipate what kinds of property-related risk are emerging that clients may be unaware of and that might one day threaten their operations and business continuity. Such research informs our underwriting and engineering decisions. Two decades ago, for example, we started to recognize that clients’ supply chains were becoming more sophisticated, geographically dispersed and vulnerable to natural hazards and manmade risk. If we hadn’t sought to understand those trends, associated hazards and develop loss prevention solutions, we wouldn’t be as prepared today to help them manage their supply chain risk, nor would we have the needed financial strength.”
Jim Hackett, Steelcase: “Seeing the patterns to create the business model that propel our future. The speed of change is such that if you don’t aim ahead you will be behind. But first, we have to earn a license by responding to issues now if we want to be in business.”
Hikmet Ersek, Western Union: “What keeps me motivated daily – and I think that’s the most important thing for a CEO – is to react to the customer’s needs. But I think what differentiates a good CEO from a great CEO is that ability to anticipate the future needs of the customers and then adapting the company.”
3. Talk about the future … what’s around the corner?
Hikmet Ersek, Western Union: “My prediction is that there is a huge new middle class coming from countries like Brazil, Mexico, South Africa, South Korea, Turkey, Russia. Globalization will continue in a different way, with strong customer needs from new demographics, from different parts of the world. Global companies should start understanding the needs of the future customer to create solutions while growing their companies.”
Jim Hackett, Steelcase: “I think there’s a new era of intensity because of low growth which exposes when you’re not competitive. High growth can cover that up. And so the intensity of finding models to compete is a really big thing in the minds of all the customers.”
Shivan Subramaniam, FM Global: “Businesses likely are going to see the most amount of change due to the dramatic impact of urbanization around the world. In 1992, Hurricane Andrew caused an extensive amount of damage to the city of Miami, Florida. Today, more than 20 years later, there are now more than ten urbanized cities in the world that have grown larger than Miami and have just as much exposure to natural disasters. So, as the years progress, I believe we’re going to find urbanization and the impact of natural disasters on these economic centers are going to become more and more dramatic. That means that those who have property located in harm’s way will need to do a much better job of how they prepare for such events, manage their risk exposures and ensure their resilience.”
4. When you’re talking about the promise of big data, where is it in its evolution?
Jim Hackett, Steelcase: “The way business will be run in the future with big data is that it’s very nonlinear and dynamic. It’s an augmenting tool for human performance. With sensing and with technology, you’re going to be able to understand patterns much more quickly in predictive ways that you can then do scenario modeling and prototypes before they actually happen. And then that just accelerates on itself. And this means to compete in the future you won’t be able to dismiss this and say my intuition’s better than the people that have the big data. The big data people will win over time. Of course intuition will always mean that there’s a role for human intellect. Machine learning is certain. We want to design a world where humans actually just perform better, not just machines.”
Shivan Subramaniam, FM Global: “I believe big data is still in its infancy in many ways and there are great opportunities to now comprehensively use internal and external data as a predictive tool rather than just for analytics. While using big data as a predictive tool may mean the outcomes are not going to be accurate all the time, it is still a real breakthrough.”
Hikmet Ersek, Western Union: “I think we are in the early stages. We use our data to promote our existing products, to understand the movement of money around the globe in a better way. There are companies using big data as a business model, as a product, saying that OK, I collected all this data, what can I do with that data and then they sell it to third parties. So we have to differentiate ourselves from that.”
5. How do you differentiate your customer model?
Shivan Subramaniam, FM Global: “First, we’re different than other insurance companies in that instead of using actuaries to calculate cost, we employ 1,800 engineers who focus on helping clients understand and prevent property loss at their facilities and become more resilient. Second, we are a business-to-business, mutual organization so our policyholders are also our owners. That means the customer experience is quite different because we solely exist to serve our mutual clients. It’s one of the primary reasons why we have one of the highest retention rates in the business and have celebrated 25, 50 and even 100 year relationships with many of our clients.”
Hikmet Ersek, Western Union: “In every transaction we have two customers – the sender of a transaction and the receiver of that transaction – in two different countries, two different geographies and two different demographics. We are combining our global face-to-face retail network with digital or electronic ways to send money. So you can send from a retail location in the UK to a mobile phone in Kenya. Or from a prepaid card in the U.S. to an ATM in Singapore. With 70% of our revenue outside of the U.S. in 200 countries and territories, we have local people who understand customer needs. Our competence is delivering on that model with different geographies against the different customer needs worldwide in different languages, with different regulatory environments.”
Jim Hackett, Steelcase: “We approach customer insights scientifically. We used to survey or do focus groups but you can’t get ahead of the need because the science shows that people don’t really tell you exactly what they’re doing in the interview. We’ve done studies that are ethnographically documented. So we look at it like forensics where you’re actually seeing videos of the way somebody’s sitting or the kind of like meetings are going on in our world. We match this with patterns to deliver new solutions for customers.”
… To sum up, according to Bill Fuessler, strategy and transformation leader at IBM, “The big winners over the next few years will be those enterprises that can master identifying new profit pools among their current customer base and finding new profitable customer bases. This entails the ability to apply big data to identify hidden patterns of behavior that will drive profitability. By cultivating the use of data scientists, enterprises will start to think differently about how they manage data for long-term growth.”
To hear over 300 commercial-free interviews with top CEOs, go to: www.ceoshow.com
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51367030291b69cf1f9f70d47f9e6a94
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https://www.forbes.com/sites/robertreiss/2013/10/28/top-ceos-cite-the-secret-of-the-great-turnaround-is-focus-on-people/
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Top CEOs Say The Secret Of The Great Turnaround Is Focus On People.
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Top CEOs Say The Secret Of The Great Turnaround Is Focus On People.
Imagine your business is facing significant challenges. Where should you focus? According to top leaders the answer is one word – people. Galvanize your employees to focus on the customer. As every trend has a counter trend, it is becoming increasing true that as the complexity and power of digital increases so too does the value of simplicity of human contact. Below are direct insights from a September 30, 2013 discussion with three top leaders, all of whom have created their own rules in driving organizational success and industry change.
Walt Bettinger, CEO, Charles Schwab (@WaltBettinger). Charles Schwab democratized investments, yet in 2004 ran into a difficult time and net promoter score was actually negative 35. Through employee engagement and personal follow up with customers where the cultural foundation became one where every customer interaction is critical, Schwab turned it around to a score of mid-50s. This was cited as among the greatest turnarounds in net promoter history.
Tom Mendoza, Vice Chairman, NetApp. NetApp grew from a start up to $1billion in just six years. But in the first year of the .com crash, NetApp saw its revenue drop from $1B to $800M. A key part of their solution was to focus on the culture. A few years later NetApp became Fortune’s #1 Best Company to work for in America, and today NetApp’s revenue is over $6 billion.
Dan Hesse, CEO, Sprint. In 2007 Sprint had among the poorest scores in service. By focusing on employees and customers, Sprint became The American Customer Satisfaction Index #1 most improved U.S. company in customer satisfaction over the past 5 years in their evaluation of 47 industries.
As a starting foundation for context on how the digital world will change, I asked Dan Hesse of Sprint what the future of mobile would be, He responded, “There's going to be a wireless chip in just about everything, from products in the home like washing machines, TV’s and refrigerators, to office products like printers will have wireless chips connecting these devices to each other or to the internet someday. As a result, a lot of data will be collected, so there will be a tradeoff between privacy and utility. If privacy can be adequately protected, there is a potential to transform the customer experience in a positive way.”
Here are some more insights from the CEOs:
1. What have you done to connect with customers digitally?
Dan Hesse, Sprint: “We have a voluntary social ninja program where about 3000 employees on their own time, like evenings, go to Web sites, Facebook, Twitter as well as Sprint.com, and they answer customer questions. They're trained to identify themselves as a Sprint employee and they can provide information, correct misperceptions.”
Walt Bettinger, Schwab: “With our Client Reviews section of our web site, we were the first investment firm to create unfiltered client feedback about our performance on our web site - good, bad or indifferent. In today’s interconnected and socially aware world, transparency is a winning strategy. We leave all comments up for prospects to see as we strive to further the use of social media as a way for prospects to engage.”
Tom Mendoza, NetApp: “We embedded code in our operating system so every device that we have in the world could be used for storing information and capturing patterns. We then turned it into a customer tool so a customer can look at their own situation as kind of a dashboard.”
2. What have you done to strengthen your company’s human side connection to customers?
Walt Bettinger, Schwab: “Our corporate level strategy is based on the simple concept “Through Clients’ Eyes”. In 2005, at my first executive meeting as the new leader of our retail division I went around the room and asked each executive to share with me details of all of their personal client interactions in the past 30 days. Frankly, anyone who hadn’t had one didn’t last very long on the team. To see things “Through Clients Eyes”, you simply must invest the time to actually listen.
Dan Hesse, Sprint: “We have a voluntary program which is really going old school, that we call thank you Thursdays. On Thursdays, we gather in rooms, generally cafeterias in our offices across the country. Employees get together and we write hand written thank you cards to our customers. It's amazing the impact that it's had on customers because not too many people get handwritten notes anymore.”
Tom Mendoza, NetApp: “I started this thing in the company which is catch someone doing something right. So when someone sees something innovative or extraordinary they send me an email and I make a call saying, ‘I just want to tell you we appreciate what you did, thank you very much.’ That always opens up the dialogue. The second thing we do is we have an annual innovation awards program where we recognize about ten customers from all over the globe. And from this program we capture different best practices from all our customers, and focus on personal attention and appreciation.
3. What have you done to build a culture that drives the customer experience?
Tom Mendoza, NetApp: “What culture means to me is the behavior that people in your company exhibit when no one is watching. We have 5 things that drive consistency around the world. Number one is attitude. If you don’t want to be here, don’t. The second is we’re going to tell each other the truth. No matter which title is in a meeting, if you disagree, say it. Third, is to make sure our employees feel appreciated. You cannot say "thank you" too much. And the fourth is leadership rather than management. My simple thought on leadership is people don’t care what you know unless they know that you care. The fifth is embracing change. We’re getting better or getting worse. If you’re staying the same, you are getting worse.
Walt Bettinger, Schwab: “We do have a deep customer oriented culture that Chuck started 40 years ago. Internally, we focus on the key metric of employee engagement. As leaders, it is our responsibility to build an environment where employees are highly engaged in their work, thrive on delighting clients and live for putting client interests at the forefront. Engaged employees are nearly five-times more likely to be customer oriented and more likely to create an outstanding customer experience than a disengaged employee. At Schwab, we believe that if you can’t get excited about what we do, what our purpose is, to champion every client’s goals with passion and integrity; if you can’t get excited about working at a different type of financial services firm that doesn’t have the conflicts that so many other firms do; if you can’t get excited about serving investors in a transparent, straightforward manner, then maybe you aren’t at the right place.”
Dan Hesse, Sprint: “We have 3 priorities: number one is improving the customer experience. Number two is strengthening the brand. Number three is generating cash. I use two levers to drive these priorities: the agenda and compensation. At my weekly ops team meeting, at the top of the agenda is the customer experience, with particular focus on why customers leave Sprint. And we link everyone’s compensation to subscriber metrics. A customer-centric culture is driven by spending time on the customer experience and paying people on customer metrics. ”
In summary, Dr. Saul Berman, Leader of Strategy & Transformation at IBM cited the 2012 IBM CEO study, Leading through Connections. “Through our research with over 1,700 CEOs, one of the key findings was engaging customers as individuals as well as empowering employees and working with partners more broadly correlates with organizational success. In fact, 72% of CEOs said that they are focusing on improving customer individualization and responsiveness.”
… So here’s something to think about, what are the most successful digital and human practices you’ve seen in great company turnarounds?
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f51b0086f2d732726308d0a7f0d40b26
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https://www.forbes.com/sites/robertreiss/2013/11/20/how-fortune-500-ceos-can-drive-corporate-responsibility/
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How Fortune 500 CEOs Can Drive Corporate Responsibility
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How Fortune 500 CEOs Can Drive Corporate Responsibility
Robert Reiss with Dan Hesse CEO Sprint, Elliot Clark Publisher Corporate Responsibility Magazine
I recently attended a corporate responsibility CEO awards conference where Dan Hesse, CEO, of Sprint won the lifetime achievement award, which was presented by Publisher of Corporate Responsibility Magazine, Elliot Clark. I believe Fortune 500 CEOs are in a unique position to help solve some of the world’s most pressing issues. So I reached out to Dan and Elliot to get their thoughts on some important questions.
What is it about Fortune 500 CEOs that uniquely positions them to impact some of the world’s most pressing problems?
Dan Hesse, Sprint: Because of the great divide between America’s political parties, plus global political differences, governments are less effective at solving problems, so the mantle of leadership is being passed to the leaders of the largest companies. Fortune 500 CEO’s effect the lives and livelihoods of millions – customers, employees, suppliers, shareholders, communities and other stakeholders. Values-based business leadership has never been more important to solving the country’s and the world’s problems.
What is the relationship between corporate responsibility and building a great organization with strong financial performance?
Dan Hesse, Sprint: Corporate responsibility has become an important foundation in building Sprint’s culture. It helps us attract and retain great talent because it’s a common cause and belief system that motivates us all to perform. Many CR initiatives also reduce costs in areas like the usage of energy, water, or paper, thereby improving financial performance.
What is the future of corporate responsibility in our economy?
Elliot Clark, Corporate Responsibility Magazine: Corporate responsibility is the future of the economy. Sustainability is about planning for the future. Short-term thinking is the enemy of responsibility and we see in the financial sector with subprime mortgage meltdowns, in environmental accidents and in other bad behaviors. We believe that the future of the responsibility movement should focus on ethics and behaviors because if a company fosters a positive culture it will make the right long term decisions on all of these important fronts.
What is your personal belief of the role of corporate responsibility?
Dan Hesse, Sprint: I think all leaders, whether political, spiritual, educational or business leaders, all have a responsibility to “do good.” I believe large business leadership is a vocation. Each business leader, depending on the assets she or he has at their disposal, can do good things in different ways. As a wireless company, we believe we can have the greatest impact by focusing our efforts in the areas of sustainability, fighting distracted driving, and improving the quality of life for those with disabilities.
What were your influences growing up that shaped this belief?
Dan Hesse, Sprint:
My parents raised their five children to have a strong set of values, particularly making sure we understood our responsibilities to others, especially those less fortunate. The University of Notre Dame’s purpose-based education also played a strong role. I also benefitted by being mentored during my career by a number of purpose-based, high-integrity leaders.
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f2131bd8468b6ed7c85958a0d210c2bf
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https://www.forbes.com/sites/robertreiss/2013/11/25/crouching-tiger-and-not-so-hidden-dragon-in-todays-economy-the-future-of-technology-and-economics-in-asia/
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Crouching Tiger And (Not So) Hidden Dragon In Today's Economy, And The Future Of Technology And Economics In Asia
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Crouching Tiger And (Not So) Hidden Dragon In Today's Economy, And The Future Of Technology And Economics In Asia
Interview with Savio Chan, CEO of US China Partners and Vijay Tharumartnam, MDEC
When it comes to talk about Asia and US export, everyone is talking about China, the “Dragon” future head of the global economy and its fast-growing middle class and Chinese consumers. The Asian Tigers, the nickname given to the Southeast Asia economies, play a vital role both globally and in that entire ecosystem of the overall wellbeing of the region. Malaysia has quietly become one of the shining stars of the Asian Tigers, providing business friendly efficiency. According to the latest World Bank Study last month, Malaysia is the 6th best market to do business globally – a big jump from 12th position last year.
Below are some direct insights from a October 29, 2013 discussion with two top leaders on China and Malaysia - Savio S. Chan, President & CEO of US China Partners, an expert on China Consumers and his upcoming book, “China Super Consumers – What One Billion Customers Want and How to Sell it to Them” will be published by John Wiley & Sons in June 2014, and Vijay Tharumartnam, Vice President of Corporate Communications & Marketing, Multimedia Development Corporation (MDeC), the Malaysian government agency driving the information and communication technology (ICT) industry in Malaysia.
Some of the discussions brought out some of the common traits for these two Asian economies and its distinct differences. One thing that is interesting and shared between both Malaysia and China – something not discussed often among economists –is Harmony. According to Vijay, Malaysians are “very happy people and we generally don’t have strife”. As one of the only true multiracial countries in Southeast Asia, Malaysia had a jump on most post-colonial countries and he reiterated “Malaysia is lucky, it is gratuitous.” With only 28 million people, Malaysia positions itself as “smart” and “diversity friendly” somewhat like New York. But unlike New York, it has a low attrition rate of 5%, and 3.1%unemployment rate. Multinationals (MNCs) like Hewlett Packard, IBM, Microsoft, Shell, BMW, HSBC and what reads like a list of who’s who call MSC Malaysia home.
China, its Dragon brother has 1.5 billion people, and according to Savio, companies should try harder and be smarter in accessing the Chinese Super Consumers who have an insatiable appetite of buying US and Foreign products. Savio shares that Alibaba, the largest e-Commerce company in China, and Tmall, its B2C subsidiary, are poised to do more e-Commerce than Amazon by 2014. He suggests that in the very near future the largest eCommerce company is Alibaba, as they prepare one of the largest IPOs in the world, and the largest Internet company will be Tencent holdings from China, not Google in the US. His main reason is “How can Google be the number one Internet companies if they have very limited access to more than 600 million Internet users?”
Vijay concurred that many of the ICT companies in Malaysia are not thinking about Amazon as much, and that they are thinking about Alibaba. These thoughts were reinforced with recent activity when on November 11, 2013, China’s Singles Day broke sales records. Recent data cites Alibaba, the ecommerce transactions hit $16.42 million within the first fifty-five seconds of this year’s sales event. Overall sales exceeded $2.876 billion around noon, and a huge $5.746 billion in sales by day’s end, breaking last year’s record. The largest single transaction this year was by a woman who spent $4.1 million on a 13.33 karat diamond.
Size does matter, in this case, according to Savio, and “Even if you get a very small piece of the pie, it is still meaningful.” For example the National Football League, the most successful and largest sport franchise in America, wants to sell their products in China through e-Commerce. Unlike the NBA, which has over 150 million fans in China, the NFL only has 2 million fans spread out in China, and they have no idea on how much demand Chinese have for their licensed products. So they decided to do a test with Export Now, a US company with offices in Shanghai and Ohio, to put 72 NFL footballs for sale in Tmall, the Alibaba ecommerce platform. And boom, they were gone in less than 3 hours. So they did a bigger test with 288 footballs, and again they were all sold out in just days. Savio suggested this is a number game – China doesn’t know the NFL, but it is the sheer size of the market and the power of large number of people.
Savio Chan continued to emphasize that as American brands and products, we can sell at higher margins without losing gross profit margins as Starbuck and Colgate toothpaste are both more expensive in China than in the US. As the United States is trying hard to promote exports to other countries, and Exports from US to China have grown more than 500% over the last ten years, China proves to be the best destination for such efforts.
Another example cited by Savio is China is starting to innovate with amazing technologies with Chinese characteristic is an app which is similar to a combination of Twitter and Facebook called WeChat by Tencent holdings. According to the Wall Street Journal, WeChat has tripled its active users from last year to 236 million people, making it one of the most popular mobile app in China. Besides, Tencent has set up operations in Palo Alto, California to focus on international expansion.
“If you can’t sell to China and you can’t make it in China, what is going to be your value proposition?” says Vijay. “When you are in the middle you are stuck – because you can’t charge a premium.”
“Case in point, the number one best-selling LCD TV in America is VIZIO, started by William Wang in 2002 and in less than 12 years, went from zero from more than 4 billion of revenue. The beauty of it is VIZIO does not own any factory but he partners with Chinese factories to make it happen.” notes Savio. “ You can partner with China and be number one in America.”
What does the Brand Malaysia stand for?
“Quiet dynamism.” says Vijay. “Malaysia moved from agrarian, to manufacturing, to business. This is all planned and one of our key roles going forward is to build a Digital Malaysia, to build a digital economy. We have very high penetration in Internet broadband usage (67%) and mobile phone usage (142%) and we want people to shift from being consumers to producers when using digital technology. When you bring it down to Small and Medium Enterprises (SMEs), which is 95% of our business in Malaysia, the point is how are they reaping the benefits of the Digital economy?”
What is the brand of China?
“China Super Consumers”, says Savio. In our world of global economy, the Chinese consumers could be our “Super Hero” as they not only consumed in China, they also travel around the world and spend on all kinds of goods and services. This Super Hero, if treated properly, as many of the top retailers and hotels have been trained to do, can lift the economy of your city or country. He continued to say that the reason why the latest launch for iPhone set a sales record of 9 million is because of Chinese consumers. The previous record of 4 million iPhones was launched in the US first without Chinese participation. All the retail stores on Fifth Avenue in New York are now very “Chinese-friendly”, according to Savio.
Vijay cites “For Malaysia, the two really cool things that we took a stance on from the very beginning of MSC Malaysia in 1996 was that we would not censor the Internet and the second thing is IP protection. Malaysia was one of the first countries in the region to think about and draft cyberlaws. Last year US companies did over half a billion dollars of revenue and they are not manufacturing … they are doing high-end service work such as knowledge process outsourcing that support global operations. So our key of success is recognizing what is required for this ecosystem.”
What about innovation from B2B and products and services?
“The China Post Office is a good example of innovation” cites Savio. “Recently China Horizon, a New York based investment group, set up a joint venture with China Post Office to create 10,000 retail stores named Post Mart, leveraging the trust and reach of the China Post Office. Everyone wants to show their products to rural residents, but no one has the ability to reach them. There are over 800 million people living in rural China and you cannot set up big box stores in those small villages. In cooperation with a Chinese partner that really touches everybody in China, Post Mart can sell everyday products to the rural residents of China."
The contract comes after a three-year pilot program during which more than 6,000 franchised stores and 98 directly owned rural supermarkets were set up, under the Post Mart brand, in towns and villages in Shandong, Jiangxi and Henan provinces. “This is innovation”, quips Savio. “If the US Post Office can do something similar, they could be making money now.”
Vijay shares insights of Malaysia’s future, “For innovation for Malaysia in the next five years, it is something called ‘co-opetition’. A westerner coming to Malaysia is very comfortable because the sensory experience will be less disconcerting compared to China or India. This familiarity is going to allow us to stay ahead of the game and stay in the higher value chain. Malaysia’s distinct advantage is we sit directly between China and India, the two largest countries in the world. For us it is about how we serve them a little quicker and better, and that cumulative advantage of everyone thinking the same way is what we are looking for. We will be quietly dynamic, and we will be moving that needle consistently upward.”
What will China never capitulate on?
Savio explains that if you want to understand China, you need to understand Confucius, and that China always wants to be a harmonious society. “We place harmony above prosperity. We don’t like war, and that is why we have the Wall. We want to be your peaceful neighbor, your friendly partner. Of course we are ambitious and want to be successful, but we will not be aggressive.”
Vijay explains that Malaysia will continue to be constantly innovating and move up the value chain. Last year, four out of the top five tech IPOs in South East Asia were from Malaysia. Once again, quiet dynamism.[KD2]
With this Asian Tiger and Dragon, both playing on their strengths, hopefully our world will be happy, harmonious and prosperous.
[KD1]Per Nadiah’s draft on 11/14 [KD2]Per Nadiah’s draft on 11/14
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1bff05d377ffe4e3ba9c22aca3a8466e
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https://www.forbes.com/sites/robertreiss/2013/11/26/how-top-cmos-drive-value-and-a-better-world-with-ideas-like-global-collaboratory/
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How Top CMOs Drive Value And A Better World, With Ideas Like Global Collaboratory
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How Top CMOs Drive Value And A Better World, With Ideas Like Global Collaboratory
We now realize the future of the world is really in our hands. Our $72 trillion global economy is driven by resources, technology, money and people, all of which we can deploy to build a better world. Since CMOs are in a unique position to combine corporate growth strategies with global needs, I recently had a discussion with the marketing leaders from the companies driving global change in resources, technology, money and people: DuPont, IBM, Western Union, and Korn Ferry. They shared some fascinating strategies like the Global Collaboratory, how to see global trends before the census, how culture drives organizational success, and how corporations can create a better world. Here are some of the insights:
1. As CMO, how would you describe your organization’s focus today?
Scott Coleman, Chief Marketing & Sales Officer, DuPont: “Our focus is what we call the Global Collaboratory, which is DuPont’s approach to solving some of the world’s most significant challenges through integrated science and inclusive innovation. The global population is growing at a rapid rate and the planet will reach 9 billion people by 2050. If you do the math, that’s about 150,000 more people to feed, protect and keep warm every day. The way we see it, the challenges of food security, protection and energy can’t be solved by any one person or company. We believe it will take many scientists and experts working together from inside and outside the company - across disciplines, geographies and industries – to develop these answers. That’s the Global Collaboratory. It’s our way of viewing science without boundaries and working collaboratively with many stakeholders to find new and better ways to address these challenges in the future.”
Diane Scott, CMO, Western Union: “Western Union is a global money transfer movement company and we are in about 200 countries with over 500,000 physical locations around the globe. We are fortunate in that we always touch two of our customers on each side of a transaction, which helps us understand global communities’ needs on both sides of the spectrum. And since someone is from home and someone is far from home, we have this emotional side to our business as well. Recently our business has become about the convergence of the physical (brick and mortar) world and digital (online, mobile, ATMs), which is extremely valuable for the customers we service.
As an interesting point, we are better than the census in any country because we start to see the migration trend happening long before they do. For example, Poland used to be a massive receive country with what we call an inbound market where lots of money was flowing in. And it has actually been one of the most recession-proof throughout Europe and is fast becoming quite a large outbound market as well. This data shows us that where Poles were once leaving home to work and sending money back, now migrants are moving to Poland for work and sending money out of the country.”
Mike Distefano, CMO, Korn Ferry: “Our focus is helping clients understand their unique talent situation and how they can link their talent strategy with their business strategy. We help companies not just identify and attract top talent, but make sure they are working on assignments that develop and engage them and that they see as part of their own personal career path. There's an old adage in the Search industry that goes, “You get hired for what you know and you get fired for who you are”. It turns out that cultural fit is a critical driver for ongoing success, which is why we assess and measure not only each candidate's thinking and leadership style, but also their cultural alignment to the role and the organization.”
2. Talk about how your strategy has recently changed.
Diane Scott, CMO, Western Union: “About five to 10 years back Western Union was a lot more transactionally based. We were focused on the consumer from a marketing perspective, but it wasn’t driving as much of the insight across our business. Beginning last year, we now start every internal call in the company listening to the voice of our customers so every meeting begins with a 5-minute call – both good and bad calls - from our call center. We believe that our best customers many times are the ones who take the time to give us the feedback and sometimes the bad feedback helps make us better. This feedback drives change. Even our company tagline used to be “the fastest way to move money worldwide.” And we’ve now changed to a tagline of “moving money for better” because today our customers are actually the ones who move money for better… bettering economies, bettering and enabling someone else’s life.”
Mike Distefano, CMO, Korn Ferry: “The days of marketing your practitioners and gurus based on where they went to school, what books they published and who they worked with in the past is gone. Today it is all about proof and measurement. We focus on the need, the benefit and the proof. Today’s business is about analytics and IP driven tools to help us not only attract the right people, but to measure their impact once we put them in the organization.”
Scott Coleman, Chief Marketing & Sales Officer, DuPont: “DuPont has been around for 211 years and some people still think of DuPont as a chemical company, which we clearly haven’t been for a while, we are a science company. “Advancing our strategy towards integrated science requires us to work differently, which is where the Global Collaboratory comes in. Our Global Collaboratory approach impacts everything we do – from large initiatives like our Global Food Security Index, where we convened a forum in Washington, D.C. that included many of the most authoritative food security experts, CEOs, NGOs and government leaders to examine the core issues of food affordability, availability, access and quality. But, just as important is how the Global Collaboratory impacts our everyday customer interactions, whether we’re sitting down with leaders at a CEO forum or meeting with a group of farmers in a rice paddy in Vietnam.”
3. What’s on your dashboard today?
Mike Distefano, CMO, Korn Ferry: “Demand generation is a major KPI for me. If we’re doing a good job, we are putting the right team in front of the client to address their current talent management need. Being able to nurture relationships and 'meet the client where they are' is paramount.”
Diane Scott, CMO, Western Union: “Customer satisfaction so we measure our customer satisfaction scores and our net promoter scores at all the different touch points: in person, over the phone, via the web or mobile phone or through our products and services to drive how our customers are feeling about our business.”
Scott Coleman, Chief Marketing & Sales Officer, DuPont: “From a customer standpoint, it really comes down to two things – customer loyalty and closed-loop marketing. Loyalty will always be critical for us, especially considering that we interact with many of our top customers across many different businesses and science. We use the Net Promoter Score® (NPS®) process to track customer satisfaction and loyalty and provide us with key indicators if there is an issue. We send thousands of surveys out a year and use this as a key measurement that is presented all the way to the top leaders of our organization. It’s very comprehensive and provides us with a lot of insight. Closed-loop marketing is also critical and, unfortunately, is often something that is under-estimated and under-measured. In the end, our success in marketing should always come down to the ultimate impact a program or campaign has on customers and sales. If we can’t measure the impact in real business value, then we should really consider whether it’s worth doing. If you are in marketing, and don’t feel accountable for revenue, my suggestion would be to find a different line of work”.
4. What is the value your company will provide in the future?
Mike Distefano, CMO, Korn Ferry: “The voice of the customer for us is going to change. Senior leadership historically would have looked at the talent continuum in silos in terms of recruiting, on-boarding, development, retention and engagement. That will change where this will become the whole view of the person in unified fashion from moving the most talented people into and then up the organization. People don’t think episodically about an individual anymore. The great recession in technology has certainly disintermediated and postponed the mass war for talent that McKinsey wrote about so long ago, but what we are seeing today very much is a war for talent in the best talent on the planet. And where that used to be mostly a domestic paradigm today we are definitely seeing it cross borders.”
Scott Coleman, Chief Marketing & Sales Officer, DuPont: “Our value will be through providing solutions to important challenges through integrated science. DuPont has been in many science disciplines and markets throughout our 211 years. Our portfolio today is broad and deep, with world-leading scientific capabilities in key secular growth areas. We not only bring these broad scientific capabilities to the table, but we actively integrate them to uncover the kinds of novel and life-changing innovations that would have otherwise been close to impossible. This is the unique value we provide and one of the best ways we do this is through our Innovation Centers. We have 10,000 scientists located all over the world who through state-of-the-art technology can connect physically and virtually with customers, no matter where they are. You can go into an Innovation Center in any geography and connect with scientists who are working on your problem live, in real time. I like to call it ‘integrated independence’. We use local design, local development and innovation for local areas, but we also connect it globally. So each geography independently may have their own labs or application engineers, their own Innovation Centers, but the integrated part is connecting some of the best minds in the world to work on that one customer’s particular need.”
Diane Scott, CMO, Western Union: “When you look at most of the developing markets where the majority of people live, cash is still a pretty big component. We look at our role as building the “on-ramps” and “off-ramps” for cash as well as digital and mobile economies. We have a lot of our own digital mobile properties, but what we see for our customers is they need to be able to get the money in and out of a mobile wallet, off a prepaid card.
As for the future, when you fast-forward, the world’s borders are disappearing and we are seeing an enabling of migration happening on both sides of the transaction. A lot more goods will flow and so another area is our Business Solutions, which are more of the B2B side where people facilitate cross-border payments. And what you will see as the future continues is that even the smallest of companies are going to be importing and exporting goods across those borders. In 2020, the megacities are going to look more like Lagos. They are not going to look like New York and London, which presents a whole host of opportunities and excitement for where we can go with different products and services.”
… As I consider the role of today’s customer in how leading brands drive positive social impact, Jeff Hood, Leader, Smarter Marketing Initiatives, IBM summed it up with insights from their customer study: "One of the items we found most intriguing by this study [Customer Activated Enterprise] was that customers are playing a more important role in shaping corporate strategy than the board of the directors. It is the first time we're observing such a prominent influence from the customer on business strategy, versus some of the traditional effects that the customer has had on products and services.” He continued, “Smarter marketers are investing in insights today to create a new system of engagement with their customers. Effective marketing no longer aims to target broad demographic groups - instead, it initiates 1:1 conversations with individuals in B2C and B2B models. To succeed in today's digital economy, organizations must transform their engagement model through analytics, mobile technology, social and the cloud. The ability to harness insights from data gives leaders the competitive advantage to compete and win in the era of smart."
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663d94fd8c166c91c3018f15649bbe3f
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https://www.forbes.com/sites/robertreiss/2013/12/17/top-ceos-agree-let-customers-drive-your-business-strategy-break-down-silos-and-be-entrepreneurial/
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Top CEOs Agree: Let Customers Drive Your Business Strategy, Break Down Silos, And Be Entrepreneurial
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Top CEOs Agree: Let Customers Drive Your Business Strategy, Break Down Silos, And Be Entrepreneurial
As we travel through untrodden territories of our digital new world, the old platitude “The only constant is change” has become our new compass. New competitors – in fact new industries – surface seemingly overnight as old business models flash into obsolescence; creating predictable quarterly growth is becoming harder to navigate. So, in an effort to find solutions, on November 20,2013 I facilitated a conversation with leaders from several industries including healthcare, financial services, travel, and technology. Below are the two solutions that emerged where participant quotes provide perspective. The participants were:
Keith Banks, President, US Trust Adam Goldstein, CEO, Royal Caribbean International Bob Lord, CEO, AOL Networks Alan Miller, Founder, CEO & Chairman, Universal Health Services Vasant Prabhu Vice Chairman & CFO, Starwood Hotels & Resorts Worldwide Brad Stewart, CEO, XOJET
Solution # 1: Companies need to involve customers in strategy and be more contextual with customer engagement. The customer now can drive strategy. In fact, according to a recent IBM study of over 4,000 C-suite executives, for the first time customers actually play a larger role in driving strategy than the board of directors cites Dr. Saul Berman, Leader of Strategy & Transformation at IBM. Clearly our digital world of social media and big data, combined with increased customer information and consequently expectations, has escalated the customers’ potential role where they are increasingly becoming involved in not just product development, service, sales, but even talent recruitment and strategy.
Keith Banks from US Trust talked about how clients have become part of the strategy process, “We recently created Client Advisory Councils, where clients share insights on how to best deliver service. We found the number one thing on the minds of our clients was inter-generational wealth transfer. We also found out our younger clients preferred younger advisors who talk like them, communicate in the way they do, use social media instead of meeting a lot.”
Alan Miller of Universal Health Services highlighted how the healthcare model is fundamentally changing, “Consumers are becoming more educated and engaged in making healthcare decisions for themselves and their families. As a result, we are reshaping the way we operate so that we can better meet their demands and become their provider of choice. We are constantly looking to offer new services to meet patients' needs, and we are making investments in new technology so that we can continue to provide the quality care our customers want and deserve."
Bob Lord, Global CEO of AOL Networks shared a personal example of how the customer experience is changing, “My daughter has a smartphone and there's all this contextual information on Instagram that she's doing when she's shopping at UNIQLO. UNIQLO is creating a pool of assets that they can collect to learn more about her. That was never there before. But then they're delivering her a service on the back end, saying for girls who bought this, they also like these kinds of things.”
And customers change in different settings. As Vasant Prabhu from Starwood discussed, “There is something we call a trip persona. You're a very different person when you're with family vs. a business conference. You can make big mistakes if you don't know the context.” He continues, “Customers really drive our business decisions. For example there are now as many Chinese travelling out of China as Americans travelling out of the US. In the US, most people use their Starwood Preferred Guest points for hotel rooms. Well, in China, they want to use it for weddings or at our restaurants. Also, the Chinese guest has different preferences, for example, they like tea, not coffee. And, there is a revolution in how our guests interact with us, mobile has gone from 15% to almost 50% of our digital interactions. We must understand how customers are changing and deliver what they want real time.”
Brad Stewart talked about how the private jet industry is in the early phases of a potential industry transformation, “What shocks me is that CEOs and private equity executives tell me they're spending $250k to $1.5 million a year on private aviation and they always say it’s a top 2 or 3 spend, and yet while they are flying their family, kids and pets in this little cocoon, 9, 10 miles in the sky, they often don’t really know what they are spending money on. And so what we're trying to do at XOJET is fundamentally change the conversation. So the trend needs to be about education and renting experiences.”
Companies also need to be seamless throughout the customer experience regardless of platforms. Adam Goldstein of Royal Caribbean shared, “The Royal Caribbean service standard that our guests expect on board our ships should be evident in all of their interactions with us whether they are onboard or not.” He continued talking about how he personally connects with the customers and the media in a digital world, “I guess I was one of the first CEOs to blog on a regular basis and to take the risks and seek the benefits of doing that. When I would ask journalists, why do you read my blog-- and I really meant that question seriously-- and they would say because it's not marketing speak.”
Solution # 2: As the nature of competition intensifies, it is essential to continually innovate and act like entrepreneurs. As customers now control more information, competition intensifies. The winners innovate. And like the Intel slogan, in many cases ‘corporate entrepreneurship inside’ enables agile rollouts of new business models to drive success. As one CEO mentioned, consider the idea that you plugged in your television set and it worked for 10 years. That doesn't exist anymore; now it's getting software upgrades, it's getting rebooted, and it's changing what it does on any given day. The winners innovate and act like entrepreneurs.
Bob Lord of AOL Networks shared, “Silos are the enemy of business progress, and the way to break down silos is to have customers at the center. You test and you learn, test and learn. And you have to get the whole company including the board comfortable with that structure, so that they're expecting every quarter that you have a new innovation that you're testing. When you start acting like a startup, you can create cross-functional teams that have full ownership, work on a particular problem and create excitement, energy, fun and great solutions throughout your organization. You have to try to create that entrepreneurial culture within the bigger organization.”
Adam Goldstein of Royal Caribbean explained how cruise customers have completely changed with the times, “A radical change in our business over 20 years is that in the 90s a mainstay of our communication program was the ability to disconnect from the hassles of daily life and the importance of getting away from it all. Today, it's unimaginable that you would go anywhere disconnected. In fact we have recently invested heavily to deliver a new technology enabling land line speed connectivity and pervasive Wi-Fi on several of our ships.”
Sometimes the innovations were actually about coming full circle to solutions of long ago. Brad Stewart stated, “It's almost of going back to the late 1800s and early 1900s in terms of walking into that store. Customers are expecting you as a company to treat them as if you're their one of five or 10 customers.”
Vasant Prabhu of Starwood provided more historical perspective, “The hotel business is centuries old and it started out with the innkeeper, and he knew everybody. He was always there greeting his guests, and he knew what they wanted. He knew which room they liked. He knew why they were there. He knew how they liked their food. And then we evolved to the era of the chains. They were important, because it was safe, clean and efficient, and very predictable. Now it's coming full circle. People expect you to know who they are at all times. You're not supposed to be a stranger. But the technology is getting to the point where you can do it, and frankly, you have to.”
Alan Miller of Universal Health Services shared how the CEO should view this environment, “The biggest thing for the CEO is adaptability. The CEO has to have a lot of different people who have totally differing ideas. And he has to have young people who see the world very differently. If you all wind up growing up together, that's not going to be a good thing anymore. The way the world is seen by 20 year olds, 40 year olds, 60 year olds are three different worlds totally. Getting everyone to work together is exciting and the feeling of a start-up is great which is good because I’m a pure entrepreneur at heart.”
Keith Banks of U.S. Trust sums up the business climate, “I think it's going to be a lot more intense competitively. So you've got to have the wherewithal to fight that fight. We're seeing the degree of difficulty from a regulatory standpoint is growing at a rapid pace. And that's making it more costly to do business, more risky to do business if you get it wrong. What companies need to do is evolve with the client, and sometimes evolve faster than the client. With so many data points, technology can help uncover new directions.”
… As we look at new business models that can help us lead in this new digital world frontier, CEOs need to involve their customers in driving strategy and have the agility and innovative spirit of an entrepreneur. As Len Green, professor of entrepreneurship at Babson College once explained to me, successful entrepreneurs continually exhibit several of the same characteristics. A. They are calculated risk takers; B. They do not overanalyze problems or spend too much time in meetings discussion solutions. Instead they: 1. ACT 2. Learn from the actions 3. Build on what you have learned 4. Repeat the process to solve marketplace challenges.
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537f8f3f6203b09296d3bdab2f3ca61e
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https://www.forbes.com/sites/robertreiss/2014/03/11/visionary-healthcare-leader-series-interview-1-ken-kaufman/
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Visionary Healthcare Leader Series, Interview #1 Ken Kaufman
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Visionary Healthcare Leader Series, Interview #1 Ken Kaufman
I am concerned with the state of healthcare in America. Statistically, our healthcare costs have ballooned to 17.2% of the GDP. Anecdotally, both CEOs and friends alike tell me healthcare is becoming a disproportionate amount of their budgets. Still the quality of care and outcomes lags behind many countries. In fact, a recent Bloomberg report analyzed the healthcare efficiency globally and the U.S. came in 46th place out of 48 countries.
So I decided to put together a series of interviews where I would have visionary healthcare leaders share insights on 4 fundamental questions about solutions for cost, quality, technology, and how the system might change over the next decade.
In February, I was at a Governance Institute meeting of hospital board members, and in hearing Ken Kaufman, Chair of Kaufman Hall, speak I found the first visionary for this series. Here are his responses:
Robert Reiss: With healthcare at 17.2% of the GDP, significantly higher than any other nation, how can we improve the economics of healthcare in America?
Ken Kaufman: We’ll need a total overhaul of the care system to reduce both the amount of care we consume and the cost of that care. New economic incentives like high-deductible health plans and value-based payment are encouraging consumers not to over-use and providers to be more efficient. But a more radical reworking of the care model is coming, driven by new competitors from Walgreens to Google and innovations from robotic pills for chronic conditions to greater availability of genetic sequencing. Ultimately, we need to transform the system from high-cost, provider-centric, and sickness-focused, to low-cost, consumer-centric, and wellness-focused.
Reiss: How can we enhance quality of care while not adding to costs?
Kaufman: For an example, look no further than Walgreens, which will now be diagnosing and treating heart disease, diabetes, and other chronic conditions that are the big drivers of healthcare costs. Walgreens uses physician extenders and kiosks, so it’s low cost. Ninety percent of Americans live within two miles of a Walgreens, so it’s convenient. This model is designed to get people the right level of care at a lowest cost. And it encourages people to be seen early, before their condition calls for treatment in a more expensive setting. The introduction of a company like Walgreens where doctors and hospitals once held sway is a sign of the upheaval happening in healthcare.
Reiss: In a digital world, how will mobility change healthcare?
Kaufman: A smartphone is even more convenient and less expensive than a Walgreens clinic. You can research competing doctors, even while sitting in your doctor’s waiting room. You can attach a blood pressure cuff or a blood glucose monitor. You can get a mobile video consultation quickly and inexpensively through Google Helpout. Soon you’ll be able to store and share DNA information. Mobile technology is a game-changing tool for moving care into the lowest cost setting and under the consumer’s control.
Reiss: By 2025, how will our healthcare delivery system change?
Ken Kaufman and Robert Reiss discuss healthcare at The Governance Institute
Kaufman: By 2025, patients will have moved to the top of the healthcare system, with greater engagement and choice. Doctors and hospitals likely will be at the bottom, increasingly viewed as a commodity. In between will be a company that acts like your cable TV company. It will own the infrastructure of the system and use it to deliver content. It will either rent or make the content, depending on which provides the highest quality. It will move the content to consumers using multiple settings and platforms, with consumers opting for the most economical and convenient approach. This new company may be a provider organization or an insurer, but my bet is that it’s a company that doesn’t even exist yet.
Feel free to share any comments you have, to advance the dialogue.
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0e6f5ec1e5cf6acec48468dfdd19b0c4
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https://www.forbes.com/sites/robertreiss/2014/03/18/visionary-healthcare-leader-series-interview-2-dr-raymond-j-baxter-from-kaiser-permanente/
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Visionary Healthcare Leader Series, Interview # 2 Dr. Raymond J. Baxter from Kaiser Permanente
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Visionary Healthcare Leader Series, Interview # 2 Dr. Raymond J. Baxter from Kaiser Permanente
For my 2nd interview I’ve selected Dr. Raymond J. Baxter because of his broad perspective in health care. Baxter is Kaiser Permanente’s senior vice president Community Benefit, Research, and Health Policy where he leads all research and community initiatives for Kaiser Permanente, the country's largest integrated health care insurer and provider organization with a workforce of nearly 180,000 plus 17,000 physicians, 9.1 million members, 38 hospitals, more than 600 medical offices, and generating more than $50 billion in annual revenue. Previously Baxter headed San Francisco Department of public health and New York City’s Health and Hospitals Corporation. Baxter received his doctorate from Princeton University. Here are his responses:
Robert Reiss: With healthcare at 17.2% of the GDP, significantly higher than any other nation, how can we improve the economics of healthcare in America?
Dr. Raymond Baxter: The real problem isn't that healthcare costs so much, it's that we are not getting commensurate value. If Americans were the healthiest people in the world, and we were living the longest, most productive and fulfilling lives, we wouldn't be so concerned about what percent GDP it was consuming. But we are definitely not the healthiest people, and healthcare costs are chewing up resources that could otherwise improve our lives substantially: education, early childhood development, equitable economic development, social supports for vulnerable populations and communities. So it's a value problem, not just a cost problem. We need to get more health and better outcomes for what we are spending, and we need to move our spending upstream, from costly acute and chronic care after our health has already been severely compromised, to prevention and promotion of healthy living and healthy environments.
Reiss: How can we enhance quality of care while not adding to costs?
Baxter: We need to stop providing care that is ineffective or even harmful, and always provide care that is proven effective. We need to harness information technology completely, so that we are not relying on memory, outdated teachings, or customary practice for what we do. We need to engage people fully in their own health and healthcare. And we need to engage institutions outside of healthcare to understand and help address the environmental, social and economic determinants of ill health. That means health-promoting conditions in the home, in the neighborhood, in schools and workplaces, and in the culture.
Reiss: In a digital world, how will mobility change healthcare?
Baxter: Mobility is already turning traditional healthcare on its head. For several years I've been using a Kaiser Permanente app on my smartphone to access my doctor, my lab tests and prescriptions, my appointments, reminders about my health, and information about symptoms and care. People in rural Africa and India are conducting healthcare transactions by phone and their caregivers are getting guidance and backup from specialists by mobile devices. A flood of information from remote sensors, implants, even pills with embedded chips, are adding to the stream of information being generated by health and fitness apps. Social media have enormous potential to change how information is generated and shared. We have to figure out how to use this torrent of information effectively, while at the same time addressing real privacy concerns.
Reiss: By 2025, how will our healthcare delivery system change?
Baxter: That's just over a decade ahead. How many people in 2003 predicted accurately what healthcare would look like today: apps, robots, remote care, genomics? No one thought the rising costs were sustainable, but they have continued, with some recent moderation. A lot of people thought America would have universal coverage by now, and we still aren't there. I think the most powerful force will be the consumer, assisted by technology and unprecedented access to information. The generational factor will also be huge, and it's not just the disruptive impact of the Millennials and their rejection of traditional hierarchies in healthcare; it's also the insistence of the aging baby boomers on a strong voice and role in their care and their expectation that they will live a long, healthy and active life. The definition of health and healing will be broadened, to include not just the body, but the mind and the spirit. That means medical care in clinical settings will be just one component of a continuum of supportive services inside and outside the home, schools and workplaces. For those with great means, there will be more of what we have today. But for most Americans, I think we will see a paradigm shift, where traditional healthcare organizations and relationships are overturned, and a whole new set of health-related enterprises become people's partners in achieving health goals they set for themselves.
Dr. Raymond J. Baxter, Kaiser Permanente
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2d963ead18704ed76295f67e629520b3
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https://www.forbes.com/sites/robertreiss/2014/03/31/how-great-companies-become-great-three-leaders-share-unique-practices/
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How Great Companies Become Great -- Three Leaders Share Unique Practices
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How Great Companies Become Great -- Three Leaders Share Unique Practices
What makes a great company great? It’s often a blend of unique practices that drive the triangle of growing a strong culture, positively impacting the customer experience, and delivering solid financial performance. In search of such practices, I moderated a discussion of three leaders representing hospitality, financial services and technology: Simon Cooper, President of Marriott Asia and formerly President of The Ritz-Carlton Hotel Company, and recent recipient of ‘Corporate Hotelier of the World’; Hugh Burgess, CEO North America, Allianz Global Corporate & Specialty, and Tom Mendoza, Vice Chairman of NetApp and benefactor of Notre Dame’s Mendoza School of Business.
All companies have been consistent leaders of Fortune’s Best Companies to Work for. In fact Net App has been a top three “best company to work for globally” for several years running. Here are their responses, some clear, direct and obvious, some counter-intuitive.
Robert Reiss: What’s something unique about your company?
Simon Cooper, Marriott: “We still have the founder Bill Marriott very much involved and we stress his family values in how we operate the company.“
Tom Mendoza, NetApp: “Empowering our employees to give back in ways meaningful to them has always been a high priority. Our Volunteer Time Off gives every employee in the world a one- week annual vacation to work for whatever charity they want. With teammates or their family they might build houses or help earthquake victims, whatever they want to do.”
Hugh Burgess, Allianz: “We’re so international we make up words like “globally” and “globalness” to expand the English language in terms of our focus and how we can drive better customer experiences.“
Reiss: What’s a practice where you connect with your customers?
Burgess, Allianz: “Here’s something you probably don’t hear much from an insurance executive, we at Allianz actually like customers with claims. This is because claims enable important interaction with the customer to provide feedback and also allow us to really deliver in a moment of emotional truth.”
Mendoza, NetApp: “We have several practices, C-Suite Level Customer Councils, a Customer Listening Program and an Executive Briefing Center. But with all these what’s most important is saying what you’re going to do with all the input. I think the worst thing people feel is if they continually get asked questions of input and they don’t see any feedback of what you’re going to do with it.”
Cooper, Marriott: “In China we have our 'Digital Community Panel’, which is 3,000 Chinese who travel 40 nights a year on the road. We’ve engaged them 7 times and have over 4,000 verbatims. These have helped us develop our 10 key hot buttons. Also the insights are shared in social media, which is a trusted opportunity for people to genuinely express themselves.”
Reiss: How about something internally?
Mendoza, NetApp: “I coined a term and practice when we started NetApp called “Catch Someone Doing Something Right” which is now embedded in NetApp’s philosophy and the culture all over the world. When an employee sees someone doing something extraordinary they send me an email. I’ll then call and thank the person. To this day I make 5 - 10 calls a day, and it’s expanded because now leaders throughout the company utilize it.
Another thing is when we first started the company we decided that an essential part of our culture would be candor. To reinforce this, at the end of every meeting we asked what did you think of the pace, content and candor. First two were easy to answer, latter very hard. It was important we got candor because we have to be able to tell each other the truth at the moment it counts.”
Cooper, Marriott: “Back at The Ritz-Carlton, a Marriott subsidiary, we would submit ‘Wow Stories’ where a Lady or Gentleman provided exceptional service. We would then share these stories on Monday or Friday Daily Lineup in front of 45,000 co-workers. There is nothing stronger than reinforcing values by identifying deeds and recognizing them in front of peers.”
Burgess, Allianz: “We just published our risk barometer where we survey our experts around different industries on their clients’ top risks. Number one was business interruption and contingent business interruption like from a supplier which could cause a chain reaction to their business. Internally, our team works together to come up with new insurance products for non-traditional situations.”
Reiss: Simon, you have a unique vantage point to share insights about the China Market?
Cooper, Marriott: “We have found that in China 95% of all Chinese who travel are under 42. In fact, I came across a pertinent piece of research by JWT September 2013 stating ‘60% of Chinese Millennials feel they have more in common with young people in other countries than with old people in China’. So you have a whole generation that never travelled and was relatively disconnected to the world and to the young generation.
There are other differences in focus of business practice. For example hotels in America generally find food business as unprofitable and therefore a lower focus, whereas in China food at hotels is profitable and is incredibly important both in financial terms and more importantly for a hotel's reputation.”
Reiss: You all like sports, what’s a lesson from sports that executives can use in building a great company?
Mendoza, NetApp: “I played a private round of gold with Tiger Wood with Warren Buffett as my caddy for charity. Each taught me something. After Tiger watched me hit some warm ups he said, “What is your target?" I backed up and looked. As I stood there he said, "For whatever it's worth I have never swung a club without a target." Warren, dressed in the Augusta white caddy outfit which "Woods" on the back, was humorous, humble and delighted to be part of an event to give back to charity. Both are great examples for building a business.”
Burgess, Allianz: “I’m a baseball guy. Here’s an analogy that transfers to business. If you’re a pitcher in the ninth inning, what pitch are you going to throw to have your best opportunity of striking out a batter or winning a game? In business there can be a tendency to do something outside our comfort zone a little too much instead of going with our best pitch.”
Cooper, Marriott: “Follow the puck, and the puck is mobility. We believe very strongly that mobility will be the device of the future. In China alone we have over 1.1 billion mobile phones registered.”
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03cba3b1c45578a845eb420d31f7a365
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https://www.forbes.com/sites/robertreiss/2014/05/21/top-ceos-drive-change-through-ideas-like-promoting-dissent-and-sharing-innovation-royalties/
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Top CEOs Drive Change Through Ideas Like Promoting Dissent And Sharing Innovation Royalties
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Top CEOs Drive Change Through Ideas Like Promoting Dissent And Sharing Innovation Royalties
Winston Churchill once stated, “To improve is to change; to be perfect is to change often.” Leading organizations know change is essential; and yet often as risk looms, the right change can be elusive. Two organizations that have succeeded at change are Marsh & McLennan Companies, which has transformed itself to be a leader in integrated professional services with 55,000 employees driving $12.3 billion revenue, and Cleveland Clinic where 43,000 caregivers drive superior clinical outcomes in a new healthcare model. I recently talked with both CEOs about their thoughts on change and innovation.
Robert Reiss: How is your business changing?
Dan Glaser, Marsh & McLennan Companies: “We’re a brains business, we’re not a brawn business. We’ve entered a new age of relentless acceleration, where the change of pace around improvement — in information, effectiveness, efficiency — strikes us as being new, and different than ever before. Risk awareness globally has certainly heightened quite a bit. When leaders think about risks that are looming, and that, fundamentally, are just beginning to be visible — whether we’re talking about cyber, unfunded social liabilities, water shortages, or climate change — there are going to be a significant amount of threats that will test the resilience of not only companies, but whole countries. And we feel that we will be at the forefront of providing the analysis, predictive analytics and anticipatory workshops that help companies and countries look out on the horizon to what could be looming and coming their way. Human beings have a tendency to be over optimistic. Risk is an actuality. But there’s a lot of opportunity and profit in risk. We’re here to advise companies on how to capture that.”
Dr. Toby Cosgrove, Cleveland Clinic: “Healthcare is in an unprecedented transformation. There is an increasing emphasis on transparency, beyond quality metrics. We have been marching down that road now for a decade, making data more publicly available. Now, there is a focus on transparency around cost as well. Healthcare is probably the only thing that you receive -- without having the slightest idea of how much it costs— and with limited responsibility for payment. That’s changing rapidly and it’s having a disruptive effect across healthcare. Fewer people are being admitted to the hospital as the delivery of care is shifting toward outpatient and homecare. In addition, we currently have a shortage of about 100,000 doctors across the United States. More care will need to be delivered by physician extenders, such as physician assistants and nurse clinicians.”
Reiss: How do you build innovation into the DNA of your organization?
Dan Glaser, Marsh & McLennan Companies: “We have found that innovative ideas bubble up when you tap into an element of dissent —. Fundamentally, in a big company, there is no innovation without dissent, and what I mean by that is it that somebody must challenge the way we do things in order to push us to create or do something that is more imaginative, creates higher value, or lowers cost. We encourage cognitive conflict, vibrant discussion, and when we’re in that room together I communicate as one of the principals of the firm — not as the CEO. That’s where you build it into your DNA If there was a camera in the room for these kinds of discussions, I think people would be very proud of the way we debate issues within the firm. Dissent can be viewed as kind of a negative word. I don’t view it negatively at all. To put it in the context that we use within our firm, there is always a smarter way. And so, when you think about it that way, dissention is really about finding the better path, finding the smarter way, and it becomes a really positive experience as opposed to a negative one.”
Dr. Toby Cosgrove, Cleveland Clinic: “We have created Cleveland Clinic Innovations, which has now spun off 66 companies raising $750 million in equity investments. We incent the inventors to innovate and bring new technologies that will further patient care in the future. We’ve restructured our clinical areas into “Institutes” that allow for enhanced collaboration for patients and that foster innovation among physicians. For example, most hospitals are organized around departments of surgery and departments of medicine. We decided that we would break down barriers and co-locate physicians and surgeons in an institute, regardless of what they practice. For example, in the neurologic institute, there are neurologists, neurosurgeons and psychiatrists. In our Heart and Vascular Institute, we now have cardiologists coming into the operating rooms, helping with heart valves and surgeons going to the cath labs, working with the cardiologists. The interesting development we saw, is that we now have doctors with different disciplines thinking about the same patient problems. Innovation seems to take place at the borders of disciplines, when two or more people from different disciplines are thinking about a problem that can’t be solved alone. We believe this new model will provide significantly better outcomes for patients.”
Reiss: What is the role of digital in driving innovation?
Dan Glaser, Marsh & McLennan Companies: “Digital is all about unlocking opportunities. Companies are just beginning to understand the kind of value that might be created from increased use of digital technologies. Within Marsh, we’ve begun creating mobile digital analytics. Analytics that previously would have taken several months of work in the office can now be done in real time, at the client site, as long as we’re armed with the right information. The analytics platform that Marsh developed profiles client risk using four dimensions — geography, industry, exposure and size. Beyond identifying risk issues, it also looks at a client’s willingness and financial capability to withstand unexpected losses, bringing all those factors together to create a solution that is specific to that client with regard to risk profile, risk tolerance, loss behavior, capital, their standing in the market and their reputation.”
Dr. Toby Cosgrove, Cleveland Clinic: “With electronic medical records and mobile technology, we now have the ability to communicate much more effectively with patients. Digital technology has opened doors and provided enormous opportunities to begin to involve patients in their care. As patients get more engaged, and have important information such as their test results and diagnoses, they take more ownership and become participants in their care. We also see telemedicine now as a big opportunity. The potential for understanding diseases, complications, and cures for diseases are enormous. The question is, can we maximize all the information and technology fast enough to take full advantage of it.”
The role of change in driving business success was summed up by Linda Ban, Global C-suite Study Director for IBM's Institute of Business Value, “We’ve talked to a number of companies that are not comfortable with making change when it comes to experimenting with new mobile or digital strategies. The general feeling is that these companies aren't willing to fully invest until they have it all figured out. Those companies are falling behind. Those that are embracing the disruption, helping to build that share value, not only within their organizations but across it, and are daring to be transparent, are the ones that are actually the most successful in moving forward.”
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edb6a9fa4d388f068e724793b4d2c9f7
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https://www.forbes.com/sites/robertreiss/2014/08/19/visionary-cmos-of-travel-cite-wifi-at-sea-ethnographic-research-and-pillows-as-keys-to-exceptional-customer-experience/
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The Keys To Exceptional Customer Experience, From Visionary CMOs Of Travel
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The Keys To Exceptional Customer Experience, From Visionary CMOs Of Travel
Connectivity has transformed the travel experience. Bruce Speechley, a leader in IBM's travel industry practice recently summed it up for me, "Technology is now enabling people to experience the vacation before they arrive". I wondered how the leaders of this new world of travel developed customer strategy to create loyalty, engage the Millennial Generation, utilize data, and prepare for the future. So I assembled the heads of marketing for three travel companies best known for top service in sea, land, and air:
- Carol Schuster, SVP Marketing, Royal Caribbean International, which has 22 ships and about 100,000 employees.
- Edward French, CMO, Ritz-Carlton Hotel Company, which was the first service organization to win the Malcolm Baldrige Award twice.
- Tim Mapes, SVP Marketing, Delta, which serves nearly 165 million customers each year.
Robert Reiss: What one word describes the your organization’s customer experience?
Tim Mapes, Delta: “Thoughtful.”
Edward French, Ritz-Carlton Hotel Company: “Authentic.”
Carol Schuster, Royal Caribbean International: “Wow.”
Reiss: What’s a recent customer loyalty initiative you implemented?
Mapes, Delta: “Through an exhaustive customer segmentation analysis, we identified 5% of Delta’s customers who accounted for 26% of revenue. We then went about what I call listen/respond/listen. Listen to what it was that 5% of customers wanted, respond with products and services that better address their needs, and then listen again, in the form of how they are seeing value in Delta’s actions. We’ve also used ethnographic research, where you place monitors on people through a travel experience and determine what is causing increases in their heart rate and stress levels. Instead of topping off the highs, we try to address the lows, and through that, elevate the brand experience.”
Schuster, Royal Caribbean International: “We spend a lot of time making sure that our loyal guests, in particular, are the first to know about new deployments and new programs. We give them exclusive access to new itineraries, as well as important changes to our cruise experience. With the arrival of a brand-new ship, Quantum of the Seas, which will be coming to the New York area in November, we also announced a new dining experience, which we’re calling Dynamic Dining. And so, what we did was, in order to engage them in part of this change, we gave them an exclusive event in New York City before we even shared it with the press. We followed that up the next day with a first industrywide Google hang out, which was hosted by CEO Adam Goldstein. Not only did we have trade, we actually then also reached a broader base of our loyal guests, who could not make it to the event.”
French, Ritz-Carlton Hotel Company: “We are doing things in terms of managing our customer database centrally, including using predictive modeling and purchasing third-party data, helping us to understand what we think customers will do next and how we can put the right message in front of them at the right time and ensure they are receiving the personalized service we promise. For example, the housekeeper can note which side of the bed a business traveler sleeps on, making sure to turn down the bed in the daily turndown service on that side of the bed. We share that information so that it’s housed centrally, from for the next hotel all the way to an interaction with, say, a restaurant server who inquires why a couple is staying at the hotel in a conversation, finds out it’s a special occasion for them and then, behind the scenes, makes something special happen that’s special for them.”
Reiss: How do you best engage the Millennial generation?
French, Ritz-Carlton Hotel Company: “There is a large focus for us in making sure that the way we think about the our guests and the customers applies to the bulk of guests in our hotels in over the next ten years or so, because that Millennial tidal wave is coming very quickly, in terms of that group of Millennials being the majority of our guests. One thing is we’ve just got to make sure that we understand them today, out there in our hotels, and as they’re interacting with us and so much of our consumer insight work is focused on that group of customers. Furthermore, I think that idea of having an authentic experience to the location that they’re in is important to everyone, but it is more important to that generation. We are also active in 12 social media channels globally as we know this is a great way to engage with these guests.”
Mapes, Delta: “In order to engage the Millennial generation and to build upon it upstream, earlier in the channel, you must use many of the tools we’re talking about with data and predictive modeling—based on the school, based on the city, based on the degree program the person happens to be in, based on, arguably, the family that they’ve come from, and even charge behavior in the credit card space. As a result, you can get quite confident about the people you should most likely be investing in.”
Schuster, Royal Caribbean International: “When you’re at sea, you were historically very much disconnected. And as we know, Millennials in particular are always on and connectivity is an incredibly important part of their lifestyle. One of the things we’ve done is we’ve actually invested in technology that will allow our ships to have more connectivity than the entire cruise industry combined. We’ve purchased technology called O3B (Other 3 Billion). And so, we are already in test mode on our ships in the Caribbean, and we will soon have it expanded beyond that. People are inclined, at all ages, to want to share their experiences, not after they get home, but real-time. That is just human nature now, because we have social media.”
Reiss: How do you harness data to understand customers as individuals and to increase value at each customer interaction point?
French, Ritz-Carlton Hotel Company: “For us, it’s about understanding what our guests want and need. If someone uses the spa, if they use the restaurant, if they use water sports at the hotel and things like that, we can help to build a profile that helps us decide what makes sense for them from a leisure perspective. There’s some information we can get on income levels. It may be by ZIP Code, and therefore, be a little bit more anonymous to the individual. Even something as simple as what part of the country they live in can be a predictor of what locations might be attractive to them and when. Generally, people in the North East will gravitate towards Florida and the Caribbean for beach leisure trips, for example.”
Schuster, Royal Caribbean International: “We’re building what I’m calling a customer intelligence unit, in order to become even more savvy at the way we gather and then leverage data in order to make better marketing decisions, in order to drive revenue. One of the ways we do this is we also segment our market into precise customer profiles, so that we can speak to each person with a focus on their interests or activities. For example, what they’ve done with us in the past, and also to make recommendations for the future.”
Mapes, Delta: “Delta has invested in a central digital nervous system that ensures our employees and our customers have access to information that helps improve the travel experience. You’ve started to see that in our mobile platforms, a guest can pull up the Fly Delta app, and do everything from track their bags, to know where their inbound plane is. Furthermore, we brought elements of the Sky Club Lounge into the gate area, with your ability to order food or drink, or recharge your personal device right there in the gate.”
Reiss: How do you envision the travel industry changing and what will your company do to capture those opportunities?
Schuster, Royal Caribbean International: “It comes back to really being connected. So that the kind of vacation that people are used to having on land, they’ll be able to extend at sea, without any barriers or hindrances. We’ll be able to do more of that when O3B gets expanded across the rest of the fleet. We will also have another technology that will allow us to interact with our guests, while they’re on board, so that they can make tier point changes on the fly to their itineraries or to their daily plans. So that really becomes more and more of a question of variety and choice right at your fingertips.”
Mapes, Delta: “When you think about the next two or three years, as Delta completes the construction of what amounts to a global unwired network, pilots, flight attendants, gate agents, those servicing and maintaining the aircraft, and customers, on every aircraft we fly, will be connected with access to the information they deem most important to them. It will enable us to know the revenue value of each passenger sitting in each seat. It should allow us to know what their travel history has been on us, and again, how many of their flights were on time or if any of them were delayed. With that information, we can actively find ways to do even more to improve their experience on Delta - real time.”
French, Ritz-Carlton Hotel Company: “From our perspective, it’s about providing the technology that customers want. It’s also really about providing a seamless service experience. We want our ladies and gentlemen to be interacting with our guests. So, in a future world, you can imagine the benefits of having guests sitting by the pool or at the beach being able to order their lunches, order their drinks, or check in, check out, review their bills, get more towels, and even get different choose what type of pillows they prefer on their cell phone. One, because that’s what how they increasingly want to do these types of transactions and two, because that’s the better service experience and three, because that gives our lady or gentleman a chance to be actually interacting with guests, rather than at the computer, typing in the order. We’ve just launched this mobile functionality throughout our US hotels and our new app will be offered globally by year end.”
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20c8095eb59f97be87c687039ba61586
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https://www.forbes.com/sites/robertreiss/2014/10/06/building-a-winning-brand-insights-from-derek-jeter-to-top-ceos/
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Insights From Derek Jeter To Top CEOs On Building A Winning Brand
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Insights From Derek Jeter To Top CEOs On Building A Winning Brand
When Derek Jeter retired last week he reminded us of the power of consistent actions compiled over time. Jeter, who perhaps embodies a professional brand better than any athlete said, “Your image isn't your character. Character is what you are as a person.” That quote has far reaching implications that transcend sport and shed light in business on the relationship between image and character of a company. In digging deeper, I thought a source of interesting insight could come from executives of top brands, who also were personally fans of sports. So on September 3rd I led a discussion with the following leaders:
- George Barrett, Chairman and CEO, Cardinal Health
- Julie Bauer, President, Panasonic Consumer Electronics Company
- Patrick Connolly, President, Sodexo Healthcare
- Adam Goldstein, President, Royal Caribbean Cruises, Ltd.
- Stormy Simon, President, Overstock.com
- John Thiel, Head of Merrill Lynch Wealth Management
Robert Reiss: What lessons can be learned from sports about building a brand?
John Thiel, Merrill Lynch: “I played football through high school and in college. In a brand, leadership matters because the leadership has to stand for something. And the leadership has to instill that in the employee base so you can deliver the brand promise to the clients. So having played for some really good coaches and one really bad coach, leadership made a very big difference to the outcome of our performance.”
George Barrett, Cardinal Health: “Building a brand in sports is really about performance consistency and creating a unique identity. The San Antonio Spurs have it. If you say San Antonio Spurs and you're a sports fan, you know exactly what it means: fundamentals, execution, performance-driven, humble, team-oriented, “not about me” — that is a brand. For Cardinal Health, we're that trusted partner: insightful about the entire system, but humble enough to listen to you; to understand your problems and act on creating solutions.”
Adam Goldstein, Royal Caribbean: “Let’s go back to the Spurs and maybe add in the Patriots. I’m more a fan of the Spurs than of the Patriots, but I think when you're trying to build brands that will be viable long term you want a really strong fundamental construct which doesn’t mean you're going win every day. The reason why I thought I would bring the Patriots into it is because they've not won the Super Bowl now in 10 years. Even the year they were undefeated they didn’t win the Super Bowl. But whether you like them or don’t like them, they are the premier franchise in the NFL today because of their fundamental structure of how they approach their work.”
Stormy Simon, Overstock.com: “I’m a huge sports fan. I think a lot of the branding game has to do with the coaches. When it comes to brands, as in team sports, the best team isn’t always successful. A team must have synchronicity. I would put my odds on the team that has a good coach or brand, can understand exactly where they're going to throw the ball, when they're going to throw it and have complete transparency in the way that they play the game. But even then, it doesn’t necessarily mean you always win.”
Julie Bauer, Panasonic: "Since I'm from Wisconsin, I look at the Green Bay Packers. Vince Lombardi, to this day, has had a major impact in terms of what the Packers stand for. There's a brand there that they've managed to not tarnish over the years. And so I think when we look at brands like Panasonic, we look at the same thing. And online is a great place for us to learn more about what the brand means to our end users."
Patrick Connolly, Sodexo: “Really good brands have an appreciation of their fan base and for us that's our customers and our employees, and I think that makes a very big difference in how you build your brand. Almost every hospital CEO in America knows who Sodexo is and have probably interfaced with us at some point in time, and I think it’s just as important with fan bases. You have to assure that your fan base begins to see that there's something significantly different about your organization. It’s not just that you provide really good service, but you make a difference in people's lives. And that matters.”
Robert Reiss: Talk about the future and your organization?
George Barrett, Cardinal Health: “We like to refer to industry forces like demographics or the challenge of healthcare economics as “can’t escape” dynamics and then we think about the implications of those drivers. This requires an organization that's extremely knowledgeable about its field and listening very carefully. I always remind our organization if we do that more effectively than our competitors, we'll probably win. But you have to be able to turn listening into insight and then insight into action very quickly. As a relatively large organization, purposefully fighting the “law of gravity” that pulls you toward bureaucracy is extremely important to remaining innovative and adaptive.
As an example of our proactively responding to the forces I mentioned earlier, we’ve now made strategic moves to serve patients in the home. Why? We have 11 million people over the age of 80 today. That number is going to double in the next 10 years. What is the healthcare system going to do with these patients, many with multiple chronic illnesses? We believe that people will increasingly be cared for in the home. Although we have always had a large footprint across the continuum of care, serving hospitals, physician offices, clinics, pharmacies, and governments, care is now being delivered differently across the continuum. We have repositioned to this evolving system. We’ve often said that we’re the business behind healthcare, but as we evolve to address care wherever it is needed, including the home, we are increasingly becoming the business of healthcare. We will likely emerge from behind the curtain.”
Adam Goldstein, Royal Caribbean: “You have to be vigilant about the long term trends that could either strengthen or weaken your business model. When I came to Royal Caribbean in 1988, our competitor was dominant on the marketing landscape for cruises because they had taken the word “fun”. Then in the 1990's the traveling population’s idea of what fun was on vacation evolved to become more upscale, i.e., society's understanding of what fun is on a cruise vacation moved towards what we offer. And so our offering has been more in the center of the bull's eye of cruising. And while a few years ago we advertised fun as getting away from mobility, today we are pioneering bringing (unprecedented) mobility to our ships to the point where Allure of the Seas deploys new satellite technology that gives land-speed bandwidth to the ship … in fact she will have more bandwidth on her than the entire rest of the cruise industry put together. That's 300 ships put together that will have less bandwidth than she has.”
Julie Bauer, Panasonic: "Our future is about emotion. What sport does is it either evokes pain or pleasure, depending on if your team wins or loses. But it definitely evokes emotion. And you want a brand that evokes emotion. So whether it's a fun emotion, whether you show how your employees care about the final customer, that's a critical part of a brand. We've flipped it and at Panasonic we have gone after experiential marketing. Everyone thinks of us as a TV company, and TV is a piece of our business, but it isn't everything we do. And so for example, at the Kentucky Derby, we put wearable videocamera technology on jockeys riding their horses around the racetrack. It's kind of funny because we used horses from the Seabiscuit movie and some of them were so fat they couldn't get through the gates anymore. But what we were trying to do is create a memorable new fan experience. The jockeys had this wearable 4K videocamera on their helmets, and, as they raced around the track, we could show the consumer this is what it feels like to be a winning jockey to evoke in them an emotion of awe so that our technology would stand out against Samsung's or Sony's or GoPro's, or any other competitor's. So I think emotion or uniqueness dramatically enhances the customer experience. And I've seen people switch a brand pretty quickly if the authenticity of the brand is no longer there."
Patrick Connolly, Sodexo: “How we look at the future is evolving with the rest of the world. Consequently, we are in the process of evolving from being an organization geographically-based around 80 companies in 80 countries, to a global organization organized around global segments. Obviously it is a monumental undertaking. So we will focus on healthcare, education, energy & resources and so on. As we grow we will be careful to maintain our core values. We have a very high focus on diversity and inclusion. In fact, we’ve been named the number one or two company in America for diversity inclusion by Diversity, Inc. magazine for the past five years. Two years ago we won the Catalyst Award which recognizes women in leadership, and particularly women of color, and it’s a worldwide award. It’s very challenging award to win. We don’t believe that you have to have the exact same values to work here, but you have to exhibit them. We can’t tell you what you have to believe, but if you want to work at Sodexo, you have to behave a certain way. Maintaining our core will be essential and fast moving because by 2020 we will have hired 2.5 million employees worldwide.”
Stormy Simon, Overstock: “The digital world is growing dramatically. Over the course of a year, we have an average of 25 million people a month that visit Overstock.com. That is a lot of shoppers and that means plenty of opportunities right now. Not everyone knows the scope of our online shopping offerings. Even though our name is Overstock, we have a plethora of replenishable products. We offer handmade goods from third world countries. We connect people with homeless pets. You can even shop for insurance or a car. Moving forward Overstock needs to let consumers know that we’re not just “overstocked” products. We need to make that message stronger. Additionally, what’s most important is staying true to our brand. We have soul. The management feels the soul. The employees feel the soul. For example, our employee surveys show 90% of our almost 1,600 employees said they understand the mission and feel they contribute every day. These numbers are amazingly high and something we’re really proud of. We feel good about our soul and our future.”
John Thiel, Merrill Lynch: “Our future will be centered on our purpose: to make our clients financial lives better, which is ultimately why we do what we do. To do so, we’ll focus on creating deeper connections that address our clients’ personal and family goals – and deliver on those goals in a way that is transparent as to risks, fees and outcomes.”
In summary, according to Stephen Hasselmann, General Manager, North America Strategy & Transformation, “The balance of power in brand building is shifting away from companies more towards the customer. With social media and the 24-hour news cycle, any kind of bad experience or good experience can go viral. And so companies really aren’t always in control of the brand building process. Digital pacesetters use analytics, deep understanding of customer behaviors, wants and needs, and create deeper, more personalized relationships with the customers which helps build their brands.”
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40ab64dbc7f3406a8590282fb7295a89
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https://www.forbes.com/sites/robertreiss/2014/11/17/visionary-fintech-leaders-talk-about-the-new-banking-customer-experience-model/
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Visionary FinTech Leaders Talk About The New Banking Customer Experience Model
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Visionary FinTech Leaders Talk About The New Banking Customer Experience Model
Just as in the movie The Graduate, the line, ‘one word … plastics’ became the symbol of a single word game-changer, one word has the potential to be a game-changer in today’s digital economy … ‘FinTech’.
This was reinforced when Adam Goldstein, President of Royal Caribbean Cruises Ltd. which includes the world’s 1st "Smart Ship" and most technologically advanced cruise ship, Quantum of the Seas -- which offers its guests more internet bandwidth than the rest of the cruise industry put together -- recently told me, “FinTech will change our world by allowing us to take every hassle out of the cruise experience and put the guest completely in control of managing their vacation."
To gain insight into FinTech I recently interviewed 3 visionary FinTech leaders where the discussion aired on The CEO Show nationally syndicated radio program November 2nd, 2014. Below are some insights shared from the discussion:
- Heather Cox, Chief Client Experience, Digital and Marketing Officer, Global Consumer Banking, Citigroup. Heather drives key client experience strategies at Citi, and was named to American Banker’s 2013 “Women to Watch” list.
- Daniel Durham, Managing Director and Global Financial Services Lead, North Highland. Daniel leads the team who works with 17 of the top 25 financial institutions.
- Ron Totaro, General Manager, Global Financial Services, Pitney Bowes. Ron has managed over $3 billion of FinTech P&L.
What is the relationship between FinTech and banking customer experience?
Heather Cox, Citi: “Banks aren’t setting the standard for client experience. It’s all of those other things customers do in their lives that are starting to set the standard. That’s a shift that I think all companies need to be thinking about. Client expectations are being raised. It’s no longer just about your own direct competitors. The barriers to entry keep dropping dramatically. To loosely quote Bill Gates: people need banking. They don’t necessarily need banks.”
Daniel Durham, North Highland: “Let me first start by defining FinTech as ‘the technology convergence of advancements in data and analytics intelligence behind the scenes, converging with innovative new channel capabilities to simplify the customer experience’. I saw a study that said that actually 60% of people would give more information over to their bank if their bank could simplify their experience. Customers today expect to be treated as individuals and not as broad demographic segments -- that evolution is occurring and I call it the “Amazonification” of banking.”
Ron Totaro, Pitney Bowes: “Financial services companies can enhance their customer experience by leveraging existing customer and payment transaction data and analytic tools to identify buying behaviors and customer needs. A better understanding of the customer through data and analytics enables companies to more effectively communicate and match their products and solutions while maximizing the ROI of customer acquisition and retention programs in an omni-channel environment.”
How is your organization connecting with customers in this FinTech world?
Heather Cox, Citi: “In September, we announced the US Citi Mobile Challenge, a global digital hackathon that we are hosting. We’ve had incredible response from developers, literally, all over the world looking for the opportunity to spend some time with Citi. Citi Mobile Challenge is going to be a recurring event that Citi will sponsor all over the globe. We are really excited about the potential to discover new solutions and bring them to market with a new speed and velocity. Citi is going to leverage digital to become that truly global consumer bank - the first and only global consumer bank - and I'm pretty excited to be a part of the journey. We have a unique advantage in our structure and we are going to leverage digital to make it happen.”
Daniel Durham, North Highland: “What we see now in our work with banking clients is the prevalence and evolution of mobility. I saw some stats earlier this week that said 75% of U.S. citizens have a smartphone, and almost half of them had used mobile for some sort of banking over the last year. And mobile is growing 100% a year versus other channels, which are pretty flat.”
Ron Totaro, Pitney Bowes: “We continue to look at ways that we can provide our small business and enterprise customer’s with more transparency and digital access around their payment transaction data so that they can better manage their spending for mailing, shipping, ecommerce and mobile transactions.”
Talk about innovation in FinTech.
Heather Cox, Citi: “The innovation curve is so short now and it used to be that an innovation group looked ten years out. We cannot see past 12 months at this point and that is fun, exciting and scary at the same time. Citi is known for innovation in the digital space, which is a fantastic place to be.”
Daniel Durham, North Highland: “Mobile overlays context with people’s lives. People have mobile devices with them all the time. Mobility allows you to engage with customers, where they are. And it creates a lot of opportunity for innovation, for disruption.”
Ron Totaro, Pitney Bowes: “Innovation will play a significant role in the development and delivery of financial technology customer value propositions to consumer, small businesses and enterprise customers. FinTech companies need to develop an approach for ideation around new product and process innovation and take a portfolio approach to investing in innovation projects with various investment paybacks and time horizons so as to effectively manage innovation in a P&L-focused manner. One caveat -- technology in and of itself is not a strategy and you need to focus innovation in the pursuit of desired addressable markets.”
What will the future of FinTech look like?
Heather Cox, Citi: “It seemed like science fiction five years ago but wearable technology is becoming quite real, and so mobility through common platforms is going to be really important.”
Daniel Durham, North Highland: “FinTech will intersect people’s lives with how they manage their money with banking. Think about watches, mobility wearables, all these things are designed to collect data, and more and more data about what you're doing in your everyday life. So being able to overlay that with, ‘Okay, now what do I know about Robert and how can I help Robert where he is?’ Deliver alerts to Robert, messages to Robert, help Robert understand what his goals are and safe for them or spend better.”
Ron Totaro, Pitney Bowes: “There will be continued growth in FinTech fueled by macro-trends and growth in globalization, ecommerce and cross-border trade and payment facilitation. The technology building-blocks to create customer value are now more advanced and cost effective to deploy as data and analytics tools, API’s and open architectures, mobility and cloud-based services are cornerstones of many emerging value propositions that create customer value in compelling ways.”
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60856b8a7044770225088b6fc01ad9f0
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https://www.forbes.com/sites/robertreiss/2014/12/09/how-a-ceo-and-his-daughter-mobilized-a-community-to-help-cure-parkinsons/
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How A CEO And His Daughter Mobilized A Community To Help Fight Parkinson's
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How A CEO And His Daughter Mobilized A Community To Help Fight Parkinson's
This is the story of a CEO, Jeff Butchen of teamDigital Promotions, Inc. who found out on April 20, 2013, he had been diagnosed with Parkinson’s disease. As background, Parkinson’s is a neurodegenerative brain disorder that progresses in affecting the nervous system making movement more difficult. 1 million Americans have Parkinson’s including Michael J. Fox , Muhammad Ali, Janet Reno and the late Robin Williams. And yet, while research is getting close, there still is no cure.
Enter Zoe Butchen, his visionary 14-year-old daughter, who came up with a plan to mobilize an entire community and hopefully the world, and show that out of adversity can come positive energy, love, and a remarkable willingness to help out. With a desire to help her dad and others who suffer from Parkinson’s she connected Taylor Swift’s song “Shake it Off” to the message they have been saying in their house to just “Shake it Off.” Dance, Shake and Donate Campaign, the online viral campaign was launched in October 2014.
Once you found out your dad had Parkinson’s what did you do?
Zoe: When I first found out, I wanted to see if I could do something to make a difference for my dad and other people living with the disease. Our family joke has been for dad to “shake it off”. So, when the song from Taylor Swift came out and I watched the video of all the people dancing and shaking, I thought that it could be the perfect idea to raise money and awareness for Parkinson’s research. After sharing with my family and getting their support, I decided to make this happen.
A big highlight took place on November 22, 2014 when 1,000 people joined me on a cold Saturday morning, to dance and make a video of Taylor Swift’s “Shake It Off”. Our town’s Mayor, Rudy Marconi agreed to close Main Street for the filming. Mr. Marconi’s support of children making a difference says so much about where I have been raised and sends a strong message that children’s voices matter. It was amazing to see my town and neighboring communities come out in support of my effort”. We raised $12,000 that day and over $42,000 so far for the Michael J. Fox Foundation!
What is your goal?
Zoe: My goal is to raise at least $100,000 where 100% of the money will go towards research through the Michael J. Fox Foundation. If Taylor Swift were to support my effort, even with just a tweet, who knows, maybe we can raise millions of dollars. While I admit that I don’t read Forbes business magazine, I do know that there are many company leaders who do, and perhaps they would offer to donate to my cause.Here’s the donation link: Donate.
Jeff and Zoe Butchen
As a CEO, what would you like executives to know about Parkinson’s?
Jeff: Having been diagnosed at an early age (51) and realizing that 1 in a 100 individuals over the age of 60 are diagnosed with this illness, there is a clear connection between “seasoned” business leaders being in the “hot zone” considering most CEO’s are in their 50’s. CEO’s are often so busy that our health often comes second to business needs. It is imperative that we all realize that health is our most essential possession.As Jim Rohn says, “Take care of your body, it’s the only place you have to live”.
What have you learned in this process about facing adversity?
Zoe: I’m not sure I can take credit for my family’s positive attitude since it’s my dad who has been leading our positivity. He’s been amazing at sharing a life lesson that you can’t change certain things in your life and the only way they can be better is when you have a positive attitude and make lemonade out of lemons. He’s even gone so far as telling us that this has been a blessing since he can truly make a difference in the lives of people diagnosed with Parkinson’s after him. I have embraced this philosophy and truly want to make a difference for everyone suffering.
Jeff: No different than dealing with everyday business challenges, my choice was to confront my situation head on with a positive attitude or succumb to the diagnosis and be paralyzed by the situation - “I chose positivity”.
Maintaining a optimistic approach for my employees is paramount. We are all dealt cards in our lives that we must play and my situation is certainly no different. As I have shared with my team over the last 20 years, don’t tell me how we can’t accomplish a goal, tell me how we will accomplish the goal. In short, I am not allowing my illness to impact my team in any way.
For more details, visit: DanceShakeDonate.com
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652c194ea7cd12a079f218c4f512959c
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https://www.forbes.com/sites/robertreiss/2015/03/30/private-equitys-next-frontier-insurance-bpo-drives-higher-valuations/
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Private Equity's Next Frontier: Insurance BPO Drives Higher Valuations
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Private Equity's Next Frontier: Insurance BPO Drives Higher Valuations
Traditionally, insurance firms have relied on investment banks, equity markets, fixed income funds and hedge funds for growth capital. Increasingly, however, insurance firms are attracting capital from PE investors. A key reason for this emerging trend is that private equity is now recognizing that the Insurance Industry is a logical source of revenue for their investors due in large part to newer regulations that make it more difficult for investment banks to deploy fresh capital in the insurance market. For example, just in the past two years, there have been around 30 PE deals primarily in the Insurance sector, according to Thompson One Banker. In fact according to the Global Insurance M&A outlook survey done by Mayer and Brown in April last year, 55% of Life Insurance respondents and 67% of P&C respondents believe that PE buyouts will be the most common deal type within the Insurance industry in the next 12 months.
To discuss this model further, I recently sat down with Vik Renjen, a pioneer in insurance investment models and expert in partnerships combining private equity and business process outsourcing. Renjen shares how private equity has an opportunity to experience far greater potential return with those insurance investments by proper utilization of a new partnership model involving PE and BPO engagements.
Robert Reiss: Talk about this new insurance model?
Vik Renjen: Having spent almost three decades providing global strategy to insurance, banking and capital markets and acting both as buyer and seller of BPO services, I’ve realized that there is an unprecedented opportunity to leverage the vast and largely untapped sources of efficiencies in the insurance industry which can translate into new income for these private equity firms.
Reiss: How specifically can PE and BPO partnerships enhance valuation multiples?
Renjen: In essence, it’s an unleashing of Intrinsic Value that drives accelerated appreciation in Asset Valuations.
I can share six specific identified categories of Private Equity related activities that can be efficiently leveraged using the services of a Knowledge based BPO partner. These are the foundation for successfully initiating, managing and sustaining PE investments within the insurance segment, or for that matter in any industry segment. Let me share a summary of those six partnering opportunities:
Identify Fund Opportunities –- Evaluate investment themes, prepare detailed presentations highlighting investment opportunities, and establish the niche investment value–proposition. Investment Target Identification and Evaluation -- Develop detailed reports to highlight key investment themes leading to a comprehensive short list of target investments; screen investment opportunities based on specific criteria developed in consultation with the fund manager; perform detailed business valuation of targeted companies with a review of value chain, operating and financial parameters. Develop a detailed financial model with revenue and operating drivers, financial projections, valuation using various methodologies; assessing market attractiveness, performing detailed competitive landscape / value chain analysis and commercial due diligence support including checks on suppliers / customers and market trends/risks. Optimizing Portfolio Company Performance to Increase Fund Alpha -- Create specialized industry / cluster-based shared services models to help derive synergies from consolidation of enabling functions. Consolidate similar functions of portfolio companies in the same (or similar) sector to improve operational efficiency and rationalize investments in multiple systems and redundant processes; provide analytics support for business transformation, benchmark performance across marketing and operations and evaluate sentiment across the entire value-chain, including stakeholders, investors and customers. Portfolio Monitoring and Management -- Assist in active management of portfolio by tracking changing geography/ sector compositions of competitor/ benchmark indices, identifying investment alternatives, modifying investments based on under and over-valued themes/ geographies/ sectors/ companies; assist fund manager by continuous tracking of sector/ portfolio companies recent events news-flow and performance, periodic performance evaluation, market performance monitoring relative to sector/ benchmark indices and evaluation of strategic investment alternatives. Manage Investor Relations -- Support the marketing and investor relations desk by developing periodic newsletters supported by industry analysis and white papers on emerging investment themes. Prepare fund presentations for the board and Portfolio Company’s management Exit Strategy Support -- Help develop suitable exit strategy for portfolio companies based on market timings, identify divestment route including IPO, stake sale, strategic acquirers, etc.; help prepare investor communications including investment memos and prospectus; carry out IRR analysis based on divestment scenarios.
Reiss: It sounds like that there are multiple points in the process where the partnership could be initiated. At what point, would it imperative to have a successful relationship?
Renjen: Obviously, it is best to engage as early as possible while the strategy is being designed. The sooner the sides are each bringing their best practices, the faster the strategy can be finalized. The experience of building end to end Insurance solutions supporting both the revenue generation as well as the cost side of the equation exist and is a proven model. There is no need to reinvent the wheel.
The financial incentives exist and the market seems primed for making deals. Until recently, the missing ingredient has been the non-existence of experienced BPO partners with domain driven Insurance expertise and a deep knowledge of Business Process Reengineering. The BPO component can efficiently, promptly and economically support PE firms in all facets of operational due diligence and then partner with them to execute and generate cost savings of at least 30% or more, thereby accelerating the invested entity’s valuation trajectory in the right direction.
Reiss: What is the real value proposition for a PE and BPO partnership engagement?
Renjen: A domain driven BPO firm can bring in operational and transformational expertise to conduct on demand, cheaper and faster operational due-diligence on a potential target asset. This allows for the PE firm to proactively see the inherent value of operational synergies that can be derived from the asset post acquisition, therefore impacting the Price multiple that it plans to offer for the investment. In addition to this, once an asset is either invested in or acquired, the PE firm can engage the same BPO partner to actually execute on the operational synergies and drive real efficiencies, which will again impact the forward valuation of this asset. So as you can see PE firms can benefit both proactively as well as reactively after the deal is done.
Reiss: What are the caveats that you see from the BPO and PE partnership?
Renjen: The beauty of the model is that there is minimal to no risk for the PE firms. They get a comprehensive operational due-diligence done through their chosen BPO partner on a potential Investment Target at literally a, 30 to 40% discount from, if they were to do it themselves and with a much faster turnaround. They pay for the solutions as needed on a variable basis and then engage with the same Partner to hold them accountable for the operational synergies based on an outcome based model which ensures that the BPO partner is also putting skin in the game. This mitigates any engagement risk on part of the PE firm as they control the outcomes starting from operational due-diligence all the way through operational execution to realization of the cost, quality and other efficiencies.
Reiss: Can you describe a typical arrangement and how long it takes to launch?
Renjen: The key is having an exceptionally strong business process outsourcing organization that understands the needs of both insurance companies and PE investment firms, while having the requisite domain knowledge and operational capabilities for delivering measurable and tangible efficiencies on a rapid timetable. Typically a strong BPO organization should be able to launch an end-to-end insurance service operation in 90-120 days from contract agreement. Of course, the timing is largely dependent on the regulatory requirement as well as the complexity of the product lines being supported. Whether deploying direct distribution, which requires licensed agents, or other services requiring licensing can have an impact on going live. Either way a fair assumption from contract to launch on the long side should be 120 days or less.
Reiss: There are clearly benefits for the PE and BPO components. What are the typical benefits for the portfolio insurance company?
Renjen: In terms of cost reduction and revenue enhancement, the research clearly indicates that carefully assembled global partnerships among PE, insurance and BPO firms can unleash untapped synergistic value worth billions of dollars. Experience has shown that through process optimization, right sourcing, and automation, significant savings in the range of 40% to 50% are possible for back office processing functions such as underwriting support, CAT modeling and claims. On the revenue side of the equation, carriers can increase their revenue streams significantly by deploying a direct distribution model. In fact, launching new product lines that climb from 0 to $50 Million in annual written premium in and around 2-3 years are the norm.
The timing is nearly perfect for both sides: PE firms are looking for great investments and insurance companies are looking for reliable sources of capital. The time is right for a closer relationship between the PE and insurance industries. The financial incentives exist and the market seems primed for making deals.
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e35700db46d8714fc2898666ff817d44
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https://www.forbes.com/sites/robertreiss/2015/04/21/in-search-of-building-a-great-company/
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In Search Of Building A Great Company
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In Search Of Building A Great Company
Most CEOs agree, the three legs of a great company with great product are passionate employees, loyal customers and superior financial performance. But these often-elusive goals pose important questions. How can executives build strong cultures? What is the dynamic between passionate employees and loyal customers? Is there in fact a connection to financial performance? In search of these answers I put together a panel on March 18, 2015 of thought leaders from companies possessing the three legs of greatness.
- NetApp Vice Chairman, Tom Mendoza. NetApp was "was voted #1 in America in 2009 and for the past 3 years has been top 3 best companies to work for globally. Notre Dame’s Mendoza School of business was named after Tom.
- Amica Insurance Chairman, President and CEO Bob DiMuccio. Since 2005, when Bob became CEO of the 108-year-old mutual company, Amica has won a remarkable 29 J.D. Power awards.
- Build-A-Bear Workshop CEO Sharon Price John. During Sharon’s first 18 months as CEO, the beloved company’s stock grew from 6 to over 20.
- Aflac President U.S., Teresa White. Aflac, over the past 9 years, has been named a world’s most ethical company while its revenues have increased from $14 billion to $22 billion.
1. Many leaders struggle with how to get executives and employees to embody corporate values. In one sentence, what advice do you have?
Teresa White, Aflac: “At the end of the day, it’s not about what you say; it’s about what you do.”
Sharon Price John, Build-A-Bear: “Make sure you’re creating a mission that feels greater than the individual and even greater than the company.”
Tom Mendoza, NetApp: “Be clear about what your values are and live up to them.”
Bob DiMuccio, Amica: “It’s all about respect - respect for your customers, respect for your employees and respect for your constituencies.”
2. What values are most important to your company?
Tom Mendoza, NetApp: “Trust and integrity. Since we help clients build out data infrastructure everything has to be built on trust. I’ve always said you find out if you’ve got a friend when you’ve got a problem. We want to make sure that we’re the company that is there when someone has a problem.”
Sharon John, Build-A-Bear: “Reaching, being intellectually curious and collaboration are all a part of our culture and help elevate who we are as an organization. In today’s dynamic retail environment, if you don’t have an embedded need to keep moving and growing while working together, you won’t be successful. Retail does not stop changing, so neither can we.”
Bob DiMuccio, Amica: “Our mission is to create peace of mind and build enduring relationships. So trust and reliability are the core values for our two main constituencies - policyholders and employees.”
Teresa White, Aflac: “Transparency is most important. The Aflac Way is our set of values with seven commitments, including: communicating regularly; responding immediately; knowing your stuff; treating everyone with respect.”
Tom Mendoza, NetApp: “And if I can add, I’ve been asked to speak to a lot of companies about what builds culture, and candor is a big deal. People always say, ‘I wish my bosses could hear this’ and many times you talk to bosses and they say, ‘We have candor. I say anything I want to say.’ Employees and customers must feel like you’re telling them truth, and good or bad they’re getting the straight scoop. And at meetings, everybody feels better if their issues are on the table whether or not the decision goes that way. If you feel like you’ve been listened to, if someone makes a decision even if you don’t agree, you’re usually okay.”
Teresa White, Aflac: “Well actually Tom, you just basically talked about commitment number six that is named “Shoot Straight,” and it basically says, honesty really is the best policy and there’s a lot more that it entails. Our CEO Dan Amos always says, ‘Bad news doesn’t get better with age.’ ”
3. What’s the secret to incredible customer service?
Bob DiMuccio, Amica: “On any given day, we have about 2,000 customer-facing folks who service our policyholders. So what does our rep do to resolve a customer’s issue at that moment? Well, when there’s not a perfect rule for the situation, they call on our values and our culture. And if the rep has been with Amica long enough, they understand what management or the company would want them to do in these situations. When they make a decision with our core values in mind, then you’ll have a satisfied customer.”
Sharon Price John, Build-A-Bear: “Like Bob said, when you have thousands of employees who are on the front line with face-to-face, one-on-one interfaces with consumers, there isn’t a service model that covers everything. You can’t open a rulebook. So, it has to be so engrained in the culture on what’s the right thing to do, which is hard to teach. So hiring the right person becomes that much more impactful. We use a term called 'Bearlieve,' that helps them to think through, you know, bearlieve in the right thing, making it right for the consumer.”
Teresa White, Aflac: “I think the key thing that you said, Sharon, is that you will be supported with that choice, because I think people will only do the things that they are supported and rewarded to do. If you consistently reward behaviors that are good behaviors, then people will tend to do more of those behaviors. If you consistently reward bad behaviors, or if you’re inconsistent in how you reward as a leader, then people will do whatever they feel comfortable doing. And when you talk about building a culture, you have to build your reward systems around what behaviors you want to see. I’m a firm believer in looking at what we are actually rewarding people to do.”
Tom Mendoza, NetApp: “I agree 100% with that. I think people emulate the behavior you recognize. I started something in our company at the beginning. The saying is, ‘Catch someone doing something right.’ So to this day, if anybody in the world sees somebody do something extraordinary to help a customer, to help NetApp, to help society, they send me an e-mail and I make calls. I average 10 to 15 calls a day, and I’m far from the only person in NetApp doing this, but here I am 21 years later still making the calls. It really has an amazing effect when you call because the stories of good behavior and what you recognize, I think that’s how it becomes tribal.”
4. What is the relationship between culture, customer and financial performance?
Sharon Price John, Build-A-Bear: “Our mission is to 'add a little more heart to life.' It is our goal to make each visit to Build-A-Bear Workshop special by creating a personalized interaction with one child at a time--whether it’s during the heart ceremony or through one of our cause partnerships, we want the experience to be meaningful and our Bear Builders are instrumental in that exchange. The creation of shared meaning between our employees and consumers brings 'a little more heart to life' for our Bear Builders, and it shows in their positive attitude and dedication to the company, which ultimately lead to increased sales and higher retention rates.”
Bob DiMuccio, Amica: “Your most valuable customers are the ones that are with you for a very long period of time. So retention of a customer is incredibly important. The acquisition of an additional customer is very expensive in the insurance business, as I’m sure Teresa knows very, very well. So the key to the retention of customers is building genuine relationships, and the core values that our folks impart are essential. We want our customers to say, 'Amica’s a company that appreciates me, that takes care of me,' and those values translate to top retention rates that drive our financial performance. That’s why, when we hire, we don’t necessarily look for people with insurance experience. We look for people with values that understand and appreciate exceptional customer service and being there for our policyholders.”
Teresa White, Aflac: “I often tell people, business is almost like a marriage and you have to know who you’re marrying before you get into the marriage. And sometimes there are values that a corporation has that really rub against your own personal values, and then I tell people when I’m advising them from a career standpoint that they need to get out of the marriage because it won’t work. From a transparency standpoint, we talk about what success looks like. So, we’re transparent in saying, ‘Here are the expectations. Here are your clear goals and objectives, and here’s what we don’t want to see.’ So, the line between the corporate values and financial performance to me is a line of really understanding what success looks like, having those clear metrics that say when you won because everybody wants to know and wants to be able to see it. You know, nobody goes to a football game and doesn’t pay attention to the score. So, we want people to know if they’ve won or not.”
Tom Mendoza, NetApp: “When NetApp and I started 21 years ago we decided number one we’re only going to hire people who want to be here because nothing great has ever been done by someone who didn’t want to do it. Number two, we’re going to build an organization built on respect. Number three, we’re going to deliver, which is what Teresa just said because all the stuff that we’re talking about doesn’t matter if you don’t deliver and win.
I use the word ‘culture’ more than ‘values’ quite honestly. I have been in companies that are horrific, meaning nobody thinks they’re a good company to work for and I look on the wall and their values are the same as ours. They just don’t live them. So, the culture to me is what behavior do you witness when you walk in the door. All of us four firms today have solid financial performance for a reason that’s pretty clear after today’s conversation.”
In summary, regarding the original question of the connection between culture and customer focus with financial performance, Maria-Paz Barrientos, Vice President, GBS Talent & Change Center of Competency, IBM sums up the findings from a recent IBM study of 4,186 C-suite executives, “The study found that a key similarity between companies who consistently outperformed their peers financially was the growing focus on the importance of culture and a common set of corporate values.”
Gallery: Advice From The Most Innovative Leaders 13 images View gallery
To listen to more of Robert’s interviews with CEOs go to www.ceoshow.com
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https://www.forbes.com/sites/robertreiss/2015/05/26/marketing-the-new-corporate-engine/
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Marketing: The New Corporate Engine
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Marketing: The New Corporate Engine
Consider this … the world’s largest retailer Alibaba has no inventory, the world’s largest taxi company Uber has no cars, and the world’s largest media company Face Book produces no content. Clearly there’s a seismic shift in the new business economy where the world’s leading companies are now driven by one discipline -- marketing.
In trying to get to the bottom of how marketing is changing I recently moderated a conversation with three leading CMOs:
Rashmy Chatterjee, CMO, IBM North America Nancy Jones, CMO, Allianz Life Insurance Company North America Brian Miller, CMO, Marriott Vacations Worldwide Corporation
Some insights include: a convergence between IT and marketing; how digital will supplement, but not replace, human interaction; the power and usage of blogs, 'post secrets' and real-time data; and how marketing is becoming central and the driver of revenue growth.
Robert Reiss: How is marketing changing?
Rashmy Chatterjee: In 2012 we did our first CMO study based on interviews with over 4,000 leading marketing professionals. The study showed that in 2012, 81% of CMOs felt unprepared for the future, up from 71% in 2012. So, on one hand, we have increasingly greater access to technology that can enable us with data and insights, yet on the other hand CMOs feel less prepared to do their job today as client's seek experience and real-time insights from the palm of their hands. Another market study shows that over the next three years, a large number - over 65% - of IT projects will come out of the marketing function. Increasingly marketing is not just a participant in technology discussions, but is jointly responsible with IT for many of the decisions due to the impact on client experience, privacy and brand protection. Finally- Marketing has always been responsible for protecting the promise of the brand. With the rapid growth in the influence of social networks, you know you have to enable access, but that at every point you are putting your entire brand value at stake and need to manage that carefully. So the function of marketing is definitely becoming more central to growing the business.
Nancy Jones: In the past, marketing executives were often thought of as brand people. But today marketing is more about being strategic and knowing what drives the bottom line. And yes, IT is converging with marketing. For example, in my company, other than IT itself, I have the largest IT portfolio. It's focused heavily on product innovation, data analytics, CRM technology and our digital strategies. Our IT portfolio also touches the whole life cycle of the business. In addition to the marketing activities, our customer and distributor experience efforts are driving how service works, how customer interactions happen, and how sales occur.
Brian Miller: There is clearly a transition from IT owning technological innovation to the marketing department owning the vast majority of digital and technological innovation. Just a decade ago, the IT department was designing systems to basically improve the efficiency of internal processes. That’s just evolved so dramatically to where everything is customer-facing now. But, I think that one of the biggest opportunities for a CMO today is to analyze and revamp their customer feedback mechanisms because everything is available to us through social media, and blogs. So marketers are revamping the concept of surveys to where feedback becomes real-time.
Reiss: What are you doing specifically to connect with customers?
Jones: Allianz recently commissioned a large study on the "modern family" called LoveFamilyMoney. We gathered information in a new way. Focus groups were common in the past to set up the qualitative direction, but potential challenges arose such as one individual skewing information or people not being comfortable with talking about money in front of others. So, we tried the concept of a ‘blography’ where we created a private blog community for a couple of weeks. We secured almost 250 hours of blog content on a variety of topics. People became incredibly engaged, they got very open with their information because there was the anonymity of a blog, and they actually formed a community. We even had an area in the blog where a blogger could post a secret. For instance, somebody would share: “I have $30,000 of credit card debt and my spouse doesn’t know about it,” and the other people would offer that person advice such as, “Oh, honey, you’ve got to tell your spouse,” or “Here’s what you should do to pay it”. We got very rich data in this way for the qualitative part of the study which helped inform the large quantitative study. The blography innovation resulted in a very robust study on today’s modern families. The study defined cohorts of modern family structures and examined their needs and concerns about retirement. This great data educates financial professionals as they work with different client segments and helps clients as they plan for their retirement.
Miller: A major innovation was when we converted our entire system from a sight-specific weeks-based timeshare product to a point system, which provides our customers greater flexibility and tremendous options. People can use their allotment every year for not just our resorts and sister hotels, but for airfare, trips to Italy, almost every cruise line, and adventure travel. This is helping attract younger buyers into the program. We also just launched a customer panel of about 40,000 that’s mostly our owners from different segments of the base, some non-buyers and Millennials where we get a 30%-40% response rate on our surveys. We go out to them once a month and we pick which segments we want to go to, and it’s a way to shorten the cycle of research, cut the cost of research, and get our really loyal customers or people who will consider our product to give immediate feedback on innovations we’re contemplating. Moving forward, our biggest opportunity is going to be in data integration. For example, people only spend a few weeks a year with us physically but, often the most exciting part of a vacation for the family is the three to four months where they’re actually planning the vacation. As our customer interacts with us in different ways throughout that year, aggregating and organizing those data points and knowing when to engage or react is really important.
Chatterjee: IBM has undergone a significant transformation recently from a product-oriented approach to one that is buyer-centric. So everything we do today starts with a buyer lens - which cohort do we are want to reach and what is their journey to greater proficiency. How do they define success in their role and how can IBM be essential to them every step of that journey? This is a radical change in thinking because it shifts the focus to a continuous engagement, creating experiences and longer term relationships. We believe that if we keep the buyers with us longer term not only will we be successful, but most importantly, they will achieve proficiency because of the way we are engaging with them.
Reiss: Will digital replace the human interaction?
Chatterjee: Our Millennial study revealed an aha moment that while a lot of the Millennials live effortlessly in the digital world, there is an important element of a face-to-face human contact in their journey. However, the key point is- they want to choose that time of contact- and often continue to prefer engaging digitally after that.
Miller: We just finished rolling out a new training program called The Balanced Approach. It s about how everybody needs logic to justify their purchases, but that’s not what they use to make decisions. They use emotion to make decisions. That’s why still today 97% of our sales are done face-to-face, because people need to have that interaction to understand the product and really get to the essence of what their key drivers are for taking vacations.
Jones: Digitalization is table stakes, but it’s still not going to replace human interaction and the human understanding. I don’t think technology will ever remove the need for a financial advisor, but it will be supported much differently from a digital platform perspective. I think about travel, for example, and the feeling that Millennials wouldn’t use agents because they’d just go to KAYAK or Travelocity. But, people are missing experiences and are actually coming back to the travel agents because they didn’t get that personal advice of, “Well, if you stay here, you’re going to be near this really cool restaurant that I’ve been to,” or “You’re going to see this really neat attraction.” The need for human interaction is the same in a financial relationship. Someone needs to help individuals with the bigger picture and see the emotional aspects of the modern family's relationship with money and loved ones.
Reiss: By the year 2020, what will be the core functions of the most successful CMOs?
Miller: I believe the most successful CMOs will have figured out new ways to constantly shorten the product development cycle, and they will have complete channel integration with a continued digital focus.
Jones: The CMO’s function will be to more fully understand the customers’ behavior and attitude in order to drive the right products, services and support to meet their needs. It’s really not that different today, but it’s going to be much more driven by technology and digital aspects than it has been in the past.
Chatterjee: I actually think in 2020 the core function of the CMO is responsibility for driving business growth. As the point of engagement with a brand, and the ensuing transaction, moves to where the customer wants it to be- the CMO will be responsible for ensuring that experience. This will need exceptional skills in developing organization capabilities and finding talent because it’s a very fast changing world.
Also on Forbes:
Gallery: America's 10 Highest-Paid Marketing Executives 10 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/07/14/according-to-dan-hesse-the-mobile-internet-changes-everything/
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According To Dan Hesse, 'The Mobile Internet Changes Everything'
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According To Dan Hesse, 'The Mobile Internet Changes Everything'
The ubiquitous, mobile internet is changing business models, business risks and the nature of the company-customer relationship. I explore these subjects with Dan Hesse, an in-demand speaker on subjects such as the mobile internet’s transformation of society, cyber security, and customer service excellence. When Laptop magazine selected the “Most Influential People in Mobile Technology,” Dan Hesse was ranked first, and Steve Jobs second. He’s been credited with the saying that “great customer service costs less!” During his almost seven years as Sprint CEO, Sprint went from last to first place in industry customer satisfaction and was recognized 20 times by JD Power and Associates for customer experience excellence.
Robert Reiss: How important is understanding the evolving internet to CEO’s and their boards?
Dan Hesse: Mobile communications is arguably the most important technological development in the history of the planet. Cell phone users grew from zero to six billion in 25 years, the most rapidly-adopted technology ever. But the emerging “internet of things,” where wireless chips will be put into almost every object produced -- vehicles, home appliances, clothing, health monitors, wearables and even into the human body, may be even more transformative. Cisco estimates 50 billion such connected devices will be in use by 2020.
The ubiquitous internet (sometimes referred to as the wireless or the mobile internet) changes everything! This mobile, always-on internet is transforming economies, education, language, health care, music, safety, privacy and the quality of life for the elderly and those with disabilities. CEOs and boards should understand these implications on the marketplace in which their companies operate. Imagine a world where a company, its products and its customers are connected 24/7. The customer relationship, the value proposition and the business model of every company and industry will likely be transformed. The winners and losers will likely be determined by who innovates most effectively to address this always-connected world.
Reiss: What are the implications for customer service?
Hesse: There are unprecedented possibilities for product utility, customer “intimacy” and customer service cost savings, but also unprecedented opportunity for complexity and resulting customer dissatisfaction. Customers crave simplicity. If these new connected products are simple to set up and use (“plug and play”), customers will likely self-serve (vs. calling the company for assistance), greatly reducing customer service costs.
I’ve found that providing great customer service costs less! In 2008, Sprint began simplifying its offers, reducing the number of rate plan combinations by 85% and made device usage and self-service simpler. This helped drive an over 50% reduction in care expenses, saving over $2 billion per year, as eliminating the need for customers to call allowed the company to close 42 call centers.
To some, the connected home of the future, with smart appliances, interoperable entertainment systems throughout the house and to their connected vehicles, advanced energy conservation systems, remotely activated and monitored security systems, all connected to your mobile device, sounds like Nirvana. To those who remember VCR’s blinking “12:00” or have three or more remote controls in their living rooms, this sounds more like a bad dream. The difference between providing a great vs. a nightmarish customer experience will never be more apparent. Adoption of the new utility of these products will depend upon simplicity. Ground-breaking innovations, like TiVo’s DVR, AT&T’s Digital One Rate, Apple’s iPod MP3 player or Amazon’s One-Click are examples. Simple, easily connected products will drive loyalty and stickiness, and low customer care costs.
Reiss: How do companies deal with the increasing cybersecurity threat all of these connected devices generate?
Hesse: Along with a plan to harness the power of the ubiquitous internet, ensuring the company has a comprehensive cybersecurity plan is perhaps the most important role a board of directors can play today. The most damaging attacks on companies have internal complicity, either by a mole or through an unwitting, untrained employee. Many companies don’t invest enough in training their rank-and-file employees in how to prevent attacks. Well trained employees don’t plug in USB drives they don’t know the origin of, don’t click on links they’re not sure about, don’t connect to free Wi-Fi networks they aren’t familiar with, password protect all devices, recognize when social engineering or “phishing” attempts are being made, and don’t put company logos on themselves or their devices when traveling.
Reiss: You mentioned industry business models are being transformed. What is happening in music, for example?
Hesse: Digital technology transformed the medium from the analog vinyl LP to the digital plastic CD. The internet then drove “dematerialization” to virtual products (like cloud computing and storage), so physical CD’s began to be replaced by digital “downloads”, with distribution dominated by Apple’s iTunes store. Today, iTunes is being threatened by streaming services like Spotify and Pandora (witness Apple’s purchase of Beats), as the business model is changing again, this time away from ownership to rental of non-physical assets.
ITunes made it possible for consumers to buy singles vs CD “albums,” which ushered in a decline in royalties for artists and songwriters, and the streaming services, especially the ad-supported “free” versions made the economic models for musicians even more challenging. On the other hand, the ubiquitous internet makes it easier to discover new music based on one’s music tastes and preferences, helps new artists find an audience without a record label, and helps consumers consume more music from more places (how often do you see a Millennial without their mobile device and headphones)?
And, after years of mobile phones contributing to the degradation of audio quality (slow wireless networks and small processors on the devices necessitated highly-compressed music for downloads and streaming), the 2014 launch of the HTC One M8 Harman/Kardon edition (earning a “Recommended Product” designation by audiophile magazine The Absolute Sound) proved that mobility no longer requires sound quality compromises. Many Android smartphones have followed suit, with better audio components and the ability to play high resolution (24 bit) audio files. The analogy of moving from standard definition to high definition television is a good one. Whether better-sounding digital content will be as successful as high definition TV, and whether it can yet again change the business model, has yet to be seen.
Reiss: Do you have any career advice for these always-connected Millennials?
Hesse: Try to find a line of work you love and that you’re truly passionate about. I’ve listened to successful people in many fields -- the arts, business, sports – and when they’re asked, “what made you successful”, each invariably mentions “hard work” as the number one reason. To become great at your occupation, you’ll have to work hard at it for many years. If it’s not enjoyable, that’s an unhappy life. And if you’re happy, you’ll be more effective with those around you. Happiness and success create a virtuous cycle, and it’s debatable which comes first. Albert Schweitzer perhaps had it right, “Success in not the key to happiness. Happiness is the key to success.”
More on Dan’s views about business leadership can be found at DanHesse.com.
Also on Forbes:
Gallery: 2015 30 Under 30: Enterprise Technology 31 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/07/14/marketers-must-be-business-people-and-other-cmo-insights/
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'Marketers Must Be Business People' And Other CMO Insights
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'Marketers Must Be Business People' And Other CMO Insights
The CMO function is expanding. For example, CMOs are increasingly integrating technology; a recent Gartner study cited that by 2017 marketers will exceed IT in technology spend. Human Resources is also aligning with marketing; according to Ben Edwards, Vice President Marketing Innovation, IBM, "Brand building begins with employees. Engage them in your mission, purpose." And today’s top marketers are finding ways to bring consumers into the decision-making process. Net/net, the most successful marketers of the future will be central to organizational growth, orchestrating and aligning different business functions. Here are some quotes from a discussion I moderated on June 17, 2015. The participants were:
Jody Bilney, Chief Consumer Officer, Humana Inc. Bill Borrelle, Senior Vice President, Brand Strategy, Pitney Bowes John Rudaizky, Brand and External Communication Leader, EY
Robert Reiss: What advice do you have for marketing executives?
Jody Bilney, Humana: The healthcare industry is heavily regulated. As such, marketing has historically not been at the core. That’s changing and why, for example, my title of Chief Consumer Officer is carefully developed as it signals a shift in the business - bringing the consumer into the decision-making process. So my responsibilities encompass digital, analytics, brand strategy, the consumer experience, others and of course, marketing, but intentionally the function is not called marketing. I sit between the COO and the Chief Innovation Officer meaning I have to deliver results today and have the brand be ready for tomorrow. Today’s best marketers must know their target consumer as a person – their likes, dislikes, emotions, and how they make decisions. But most importantly, marketers have to really understand the business their company is in. Marketers must be business people.
John Rudaizky, EY: In such a complex, content rich, platform diverse communications world, top marketers must have creative confidence because at the heart of strategy will remain creativity - content first, platform second. Most organizations are challenged by the always-on world of social media and the fact that we can’t control what’s out there. So for marketing executives it’s all about being connected to the c-suite and the changing market landscape to react fast. Above all is tying together brand and purpose which is critical to the future - Millennials want to contribute with purpose and so are a massive driver of disruption.
Bill Borrelle, PB: Marketers need to have an understanding of the balance between physical and digital commerce and how customers prefer to transact today. Perhaps CMOs underestimated the explosion of data and the amount of data now at our disposal for analytical purposes. A new opportunity for CMOs is to balance right brain and left-brain thinking. All this analytical insight ties into driving customer satisfaction, loyalty, and repeat purchase.
Reiss: What’s an important brand management initiative your organization has recently implemented?
Borrelle: We are undergoing a global brand transformation at Pitney Bowes. Recently, we celebrated our 95th birthday. Today, we are a global technology company powering physical and digital transactions with deep expertise in cross-border ecommerce. However, we have legacy perceptions that we are trying to correct, so we are updating our brand message. We’re proud of our legacy, but our branding is also focused on the future.
Bilney: Let’s start with the context of two issues that frame our industry. First, healthcare is an intensely personal matter. Second, 70% of Humana’s business is seniors and they have only one period a year, from October 15th to December 7th, which is just 52 days, to choose their healthcare coverage for the following year. It’s a short amount of time to present our brand and there are new regulations and new competitors every year. In addition, healthcare can be confusing, scary and stressful. Humana acknowledges that and wants to help with the consumer experience. We know where we stand. We even have a dream: we want to help our consumers achieve lifelong wellbeing. So last year we launched our first-ever brand campaign – Closing the gap between people and care. And, expanding from individuals to communities, we’ve set a bold goal of improving the health of every community we serve by 20% by the year 2020.
Rudaizky: EY has a far reaching business which spans every major industry and crosses many issues, so we manage our brand through the lens of our purpose – Building a better working world. We activate this purpose through our 210,000 employees as we believe we can create a lasting legacy by helping our clients solve their biggest questions - our new brand work captures this and how we team to provide answers to the toughest questions. A few examples of our omnichannel work include creating a social engine around #betterquestions to drive conversations around real, trending questions and solutions.
Reiss: How do you envision digital changing your industry over the next few years?
Rudaizky: Despite the size, scale and complexity of the marketplaces we serve, pretty much every industry we operate in will be transformed by digital. Clearly the way we deliver to clients will be transformed. Digital also helps attract the best talent and will enable important conversations to happen before the hiring.”
Borrelle: The world of commerce is changing due to the proliferation of data, cross-border e-commerce and location intelligence. One phenomenon I am monitoring is Millennials experiencing cluttered email boxes and a new interest in personally relevant direct mail messages that drive online purchasing behavior.
Bilney: Of the many changes in healthcare, one of the most important will be the emergence of the empowered consumer. Mobile devices change consumer behaviors. Companies will have an endless amount of data about consumer behaviors and preferences. The question is how well will companies use it? There will be more self-service and transparency in healthcare, and because of this, many new partnerships will emerge. Digital will ultimately make healthcare more affordable.
Also on Forbes:
Gallery: 10 Most Influential CMOs in 2014 10 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/07/20/top-ceos-share-how-to-shepherd-innovation/
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Top CEOs Share How To Shepherd Innovation
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Top CEOs Share How To Shepherd Innovation
Winston Churchill once famously said, “Without tradition, art is a flock of sheep without a shepherd. Without innovation, it is a corpse.” As leaders seek innovative ways to artfully shepherd their enterprises to success, I thought sharing insights from top CEOs in would be important.
So on June 22, 2015 I had a conversation with two great thought leaders on innovation, each leaders of enterprise of great tradition -- Campbell Soup Company, with over 150 years history, and Bank of New York Mellon, the first bank in America with over 230 years history. They share insights about an important innovation they helped lead, the connection between culture and innovation and their advice to CEOs.
Gerald L. Hassell, Chairman and CEO, BNY Mellon, a $16 billion company with 50,000 employees where 20% of the world’s assets flow through every day. Douglas R. Conant, consumer products expert who is Founder of ConantLeadership, Chairman of Avon Products, former CEO of Campbell Soup Company from 2001-2010, and former President of Nabisco Foods Company from 1996-2000.
Robert Reiss: What was an important innovation that you’ve helped lead?
Gerald Hassell: For context, almost 15% of our employee base are software engineers, so we’re a technology company that’s in the clothes of an investments company. We help investors get a better return on their investment in a seamless way through technology. Coming out of the financial crisis there was a pressing need to reform something called the tri-party repo market. It is highly technical and most of the world has never heard of it, but BNY Mellon and JP Morgan Chase sit between the borrowers of money and the lenders of money, meaning the broker-dealers and investors. The market had significant risks during the financial crisis that we were asked to help solve. No one thought it was solvable. We put a team of people on it and used technology in an extremely creative way to essentially today take 97% of the credit risk out of that market. . And I’m not talking small dollars. At its peak tri-party financing was roughly $2.5 trillion dollars.
Doug Conant: To me it’s a grow or die world. It’s very Darwinian, and there is no in between—you either grow or you die. At Campbell Soup Company, we had become the world’s largest and best canned soup manufacturer and our organization was extremely proud of how many cans we could run per minute. In the meantime, packages were changing and consumers were changing. The microwave had been invented in 1946 yet we did not have microwavable packaging until 2003, two years after I became CEO. We were very focused on being a great canner, and to a degree, had lost track of what our consumers were looking for. They were looking for quick convenient meals. All of a sudden, we unlocked the potential to take soup to work or to school, and that convenience platform created a multi-hundred million dollar business that helped us grow sales ten of the eleven years that I was CEO. So, a simple “close-to-home” innovation connected to meeting a consumer need – in this case, convenience – helped change the profile of our company. Similarly, we brought scaled innovation to the category in terms of health and wellness, variety, taste, and value. In addition, we innovated at the point-of-purchase with gravity-fed shelving that greatly improved shopability for the consumer. Collectively, these innovations revitalized the category during my tenure as CEO.
Reiss: Talk about the connection between culture and innovation?
Conant: The key is to stimulate superior employee engagement. To drive engagement, we first must acknowledge the reality that every employee faces: they’re overwhelmed by life. Most large organization employees have over 200 emails per day and 20 to 30 text messages, not to mention they actually have to talk to real people on the phone and meet with real people in meetings. Employees in smaller organizations have similar challenges. For the most part, they are all diligently trying to meet the needs of the various constituencies within their organization and beyond, every day. They also have complex personal lives where they’re trying to meet the needs of their family, their children, their parents, their extended families, and the community-at-large. To me, the first role of a leader is to acknowledge the challenges every employee faces as they try to juggle all of these competing interests. Also, they are juggling these interests in three time zones – they are trying to deliver in the “Present,” while honoring the “Past” and simultaneously trying to set the table for an even more prosperous “Future.” Once the leader acknowledges these challenges, they need to earnestly and visibly help create an environment that better helps employees deal with them. In my experience, as the leader earnestly works to improve the environment for the employees, over time the employees more earnestly work to advance the agenda of the enterprise. This process creates a platform for superior employee engagement where employees get both their heads and their hearts fully “in the game,” attacking their work in a more spirited and collaborative way. I have found, the more engaged they become, the more creative and innovative they can be and the more value we can create together.
Hassell: Here’s an example of what we did. We have an enterprise-wide innovation competition. We encourage people from around the company to form their own teams using our internal online social networks, and working across different divisions and areas. We encourage people to come with up with ideas by region, by business, by expertise. Then we have a judging process on a regional and business line basis, and ultimately, innovative ideas that have gone through this screening process are going to be presented to the senior leadership team, including me, and we treat it like a Shark Tank-style competition. We actually webcast it around the world. And if one of the senior executives likes the idea they step forward and they say, okay, I’m going to fund this and run with it. And it’s a great experience for the employees because they collaborate and see the power of innovation developing across the company. It’s a fantastic example of why innovation has become so important to our overall culture.
Reiss: What advice do you have for leaders about innovation?
Hassell: A recommendation I would make is show your own personal intellectual curiosity about how the world and the markets and the products and the clients are all changing. Provide a safe environment for employees and your team members to collaborate and think about what’s possible rather than just doing it the old-fashioned way. We use a term here about ‘fast fail’. I’d also advise leaders to get personally involved and work with the younger generation who by definition is thinking very differently than how we have been trained as leaders. And the markets are moving so quickly, that without the good ideas of the next generation being developed and employed today, you run the very real risk of being left in the dust.
Conant: I learned a valuable lesson from studying an amazing woman, Margaret Rudkin, the founder of Pepperidge Farm. At the end of every meeting she held, she was known to say, ‘That’s good. What’s next?’ She became famous for saying, “What’s next?” I advise all leaders to bring this ‘What’s next?’ thinking to the table every day. It drives forward thinking, innovation, and ultimately success.
Summing up the future of CEOs and innovation, Anthony Marshall, Global CEO Study Program Director, IBM said, “Business has never moved faster than it does today. With all of this constant change, innovation is absolutely critical to create and sustain new business value. Customers with rapidly changing attitudes need to be brought into innovation activities. To successfully innovate, business needs that right organization and the right processes, but mostly it’s about people—having the right incentives and the right organizational culture. It's critical for organizations to open up to be both systematic and systemic in the way they approach innovation.”
To hear over 500 interviews from top CEOs commercial-free, go to www.ceoshow.com
Also on Forbes:
Gallery: Advice From The Most Innovative Leaders 13 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/07/27/great-entrepreneurs-share-quotes-about-their-business-breakthroughs/
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Great Entrepreneurs Share Quotes About Their Business Breakthroughs
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Great Entrepreneurs Share Quotes About Their Business Breakthroughs
About 30 years ago I read a quote by Thomas Watson, the legendary entrepreneur who founded IBM: “If you want to achieve excellence, you can get there today. As of this second, quit doing less-than-excellent work.” This quote has inspired me many times throughout my business life, and reinforced the power of a quote.
On June 30, 2015, I was at an event of great entrepreneurs where they were asked about their big breakthrough in business success. I thought you would appreciate hearing their quotes.
As background, the event was The Luxury Marketing Council of Connecticut-Hudson Valley CEO Roundtable Luncheon, led by Kathryn Minckler, founder and chairman of The Luxury Marketing Council, and Judith Glaser, CEO of Benchmark Communications, at The Ritz-Carlton, Westchester, New York. The 10 participants were:
Luxury Marketing Council CEO Roundtable at The Ritz-Carlton, White Plains New York, June 30, 2015
Ira Neimark, former CEO of Bergdorf Goodman, who reinvented luxury retail by helping designers become top brands Tariq Farid, founder and CEO of Edible Arrangements, who built a beloved company with over 1,200 stores Louis Nelson, the top architect and designer famed for creating the FDA nutritional labeling system and public art places, including the Korean War Veterans Memorial Angelo Robles, founder and CEO of The Family Office Association, uniquely representing the wealthiest families in the world Jeff Butchen, founder and CEO of teamDigital Promotions, a leading digital marketing agency that has made billions of consumer to brand connections since 1995 Ralph Anderson, CEO of The Green Group who is the leading accounting firm for entrepreneurs David Amlen, CEO of MSR Studios, the largest New York independent recording studio. Amlen’s studios have recorded over 175 platinum records Joe Garofoli, founder and CEO Roc Global, a boutique investment bank helping growth stage businesses acquire institutional capital Kathryn Minckler, founder and Chairman, The Luxury Marketing Council of Connecticut-Hudson Valley Shelly Tretter Lynch, vice-Chairman, The Luxury Marketing Council of Connecticut-Hudson Valley
Ira Neimark: “I believe by my bringing from Paris, Yves Saint Laurent, Givenchy, and Dior, the three top French Couture Fashion Design Houses, to Bergdorf Goodman in 1976, for a major New York Fashion show, opened the door to show the fashion press and fashion customers that Bergdorf Goodman had awakened and would dominate the luxury fashion business. And, that it would do so at substantial sales and profits for all concerned. My advice to all CEOs is to discover a gold mine in the art of customer service. The lack of today’s CEO’s understanding of how customers should be treated has greatly reduced the opportunity for them to be ahead of their competition.”
Tariq Farid: “When I was 17 years old and just starting the business my mother said to me, ‘Don’t chase the money. It runs really fast. Do the right thing and it will follow you.” After that I spent all my time perfecting the model. People would ask when my products were coming, and I would say they’re not ready yet. I have to make them perfect, because when people see them they have to go “wow”. The real “ah ha” moment came the first Easter right after we opened. My family and I worked all day and night to create the arrangements and make sure they were perfect. The next day as they were delivered, the phone began to ring. Typically, when you get a call following a delivery it is a complaint about the order. Not this time. Each time the phone rang it was a customer calling to say, “WOW.” Their friends or spouses who received the arrangements were excited and wanted to know where they had found such a creative gift. I knew then that we were really on to something. After that the goal was to keep perfecting it, to make incremental changes that keep enhancing the customer experience, the product innovation, the supporting technology and the supply chain that makes it all possible to be consistent. That’s never been more important than it is today as technology has created incredible opportunities for companies to go well beyond the storefront. Now businesses can create their own ecosystems in which they have control of every step of the process from product development and production through the sale. Some CEOs already understand this, and as more and more understand how to truly take advantage of technology, I believe the result will be an explosion in innovation.”
Louis Nelson: “One of my first career breakthroughs was when I recommended Head bring color to all of their skis. Afterwards, the whole industry exploded into colored skis. I am always on the lookout for shifts in the wind that are important to my clients. I stay in touch with people; I observe what they do and read as much as I can. I attend all kinds of events and make sure to stay in touch with the young.”
Angelo Robles: “FOA is a global membership organization dedicated to helping the wealthiest families seize opportunity and break through challenges by vibrantly, dynamically, and proactively embracing the new, in addition to building on proven lessons from generations past. We look at the principles and strategies that families have applied to maintain their prestige through generations, centuries. And, we combine it with education and programming on today’s exponential technologies and global opportunities. Synthesizing the two — with ample input from our active community of hundreds of families — to bring our member families the best wisdom on what directions make sense today. The need for clear direction and collective wisdom is greater than ever, in light of both the threats against and opportunities for a family’s wealth and well-being today.”
Jeff Butchen: “My first career-goal breakthrough came when I was just 12 years old. I read a quote that still resonates deep within me today that said, “Success is getting what you want, but happiness is wanting what you get.” I never realized just how meaningful that would become later on in my life. The most important belief I carry running teamDigital is that our team is our “secret sauce”. I believe titles are just words that feed egos and everyone must have a voice and be empowered if they are to truly make a difference. I have also learned to embrace the reality that CEOs, me included, are not always last because we are right, but rather right (at least we hope) because we are last to make the final decision.”
Ralph Anderson: “My breakthrough moment occurred when I realized that I do not know everything. I have always said, “ Learn to listen and listen to learn”. I reflect a lot on what I don’t know and have learned to listen, especially from young people and technology, in order to learn. I also understand that my clients’ biggest assets are their family and money and always try to be very careful with any investment of their time.”
David Amlen: “I am always having breakthrough moments because we live and die on each project. Two things are essential to my successes: quality and the ability to appeal to people who understand what my company does. When I started my company, I was fearless and thought that by building a better music studio, people would just come. Now, I know that it’s all about the last experience that we delivered.”
Joe Garofoli: “The investment banking and asset management businesses have changed so much in the last few decades. However, having good ideas and trust is still at the heart of the business. My breakthrough moment occurred to me when I realized that we had to focus more on identifying good companies and having a better understanding of their capabilities, needs and objectives in order to add more value as opposed to emphasizing that our primary benefit was the ability to bring longstanding institutional investor relationships to the table.”
Kathryn Minckler: “My breakthrough moment came when I became a parent and learned how to listen more carefully and to become more flexible and patient. My first company started when my three-year old daughter and I conceived of a new toy product at our dining room table. Over the last several years, I have appreciated the importance of and of taking time, particularly to listen to my children all over again as they and their peers have increasing economic and social impact.”
Shelly Tretter Lynch: “Breakthrough moments happen all the time in life and in business and inspire future success and fulfillment. One of these moments happened when I was asked to become involved in a number of non-profit organizations in Greenwich where I live and work. Within a short space of time, I was devoting a significant portion of my time and my energy as a board member and event organizer for the YWCA with its focus on domestic abuse and for SFTT, a charity focused on the welfare of our troops returning from combat. I was honored and excited to be doing this good work but worried initially that it would distract from my business. Instead, what I learned was that by becoming more involved with our community, I became more closely identified with it. By giving something of myself to try to help others, I have been rewarded in life and in business in ways that I could never have anticipated.”
Also on Forbes:
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https://www.forbes.com/sites/robertreiss/2015/07/30/businesss-next-frontier-people-with-disabilities/
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Business's Next Frontier: People With Disabilities
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Business's Next Frontier: People With Disabilities
For years organizations seeking a competitive advantage have embraced diversity; but today the leading enterprises have found a new source of growth--people with disabilities. The global market represents 1.3 billion people and their 2.3 billion family members, friends, caregivers and colleagues; aggregately people with disabilities account for an astounding $8 trillion dollars in disposable income.
Business leaders have also found that people with disabilities build a more authentic, loyal and creative culture. People with disabilities also represent an almost untapped talent pool who bring a wide range of education, experience, expertise and perspective to the workforce. Updated federal regulations are pushing employers to actively include this talented section of the workforce in their ranks, but savvy employers are getting ahead of the curve.
As I became more aware of the economic, employment and societal impact of people with disabilities – roughly 20% of our country’s population - I asked business leaders and disability experts about this emerging and growing market and the positive impact for business.
Marty Bean, Sr. Vice President, Field Sales, PepsiCo North America Beverages and an executive champion of Pepsi ACT – Achieving Change Together – a national disability hiring and inclusion initiative in partnership with corporate disability consulting team Disability Solutions @Ability Beyond.
Kevin Cox, Chief Human Resource Officer, American Express, an organization that has been a long time leader in diversity and a company that recognizes people with disabilities as a large constituency of their customer-base, and a valuable part of their workforce.
Kris Foss, Managing Director, Disability Solutions @Ability Beyond, a consulting practice that leverages their organization’s 60 years of working with people with a wide variety of disabilities, and now work with corporations to attract, retain and engage talent who happen to have a disability.
Rich Donovan, CEO, The Return on Disability Group, globally recognized subject matter experts on the convergence of disability and corporate profitability, focused on defining and unlocking the economic value of the disability market. Rich launched the world’s first stock index focused on the disability market with Barclays in September 2014. The Return on Disability US LargeCap ETN is listed under the ticker RODI on the NYSE.
Robert Reiss: Why does your organization focus on people with disabilities?
Marty Bean: We recognized early the talent that is represented among people with disabilities and have focused our efforts on tapping into that talent for our workforce needs across the country. We created Pepsi ACT in 2013. It is a national multi-year project that has significantly increased the number of people with disabilities that are employed across a variety of career and experience levels. It has launched in five U.S. cities to date and each location has successfully employed people with disabilities, including veterans. We will continue to expand across PepsiCo North America Beverages in 2015 and see this not as a way to hire people with disabilities, but hiring the right people for the job. In fact, at our Las Vegas Certified Center half of our employees have disabilities. It is a high-performing environment and a model for efficiency and productivity. We hired the right people to get the job done well.
Kevin Cox: This is the next frontier from both a brand and workforce perspective. Ensuring that people with disabilities see themselves and their needs reflected in our products and the services we offer is important. It’s important to our customers, as well as to our workforce. We employ many people with disabilities currently and have employees with family members or friends with disabilities. This is important to them, so it’s important to us as an employer. For example, this past year we have placed focus on expanding the dialogue and education around mental health. We have recently engaged Kris Foss and her team at Disability Solutions to work with our HR organization, to make sure we are modeling the way for the entire American Express organization in the recruitment, retention and promotion of people with disabilities.
Kris Foss: There are several opportunities here for corporations and the time is now to lead in this space. PepsiCo and American Express are leading the way and as early market champions will realize maximum returns in both talent and market reach.
Reiss: Why should companies focus on hiring and retaining people with disabilities?
Cox: We honor our promise to our customers by delivering innovative solutions and exceptional service. That starts with hiring and retaining innovative people. People with disabilities have had to navigate a world that is not always accessible or set up for them in some way. As a result, they know how to find alternative solutions to a challenge and innovative uses for tools and technology. They understand and have experience collaborating for results, or leveraging relationships to get things done. We are talking about talented employees with high potential.
Bean: Throughout PepsiCo, we have colleagues who have built their careers with us and represent a great deal of organizational knowledge and expertise. This market and talent pool includes people who have acquired a disability due to age-related medical conditions or injury. As our workforce ages, we need to adapt our work environments and approaches in order to keep talent on the job and effectively supporting our customers. Similarly, we need to ensure that our products and services are accessible and relevant to this large market of consumers.
Reiss: Why is this critical to both new and mature brands?
Rich Donovan: Our research has proven that acting on disability grows shareholder value. This market is large enough to stand on its merits – about the size of China. The key is to seek and measure those things that attract consumers like branded messaging and simple actions that add to customer experience. Outperforming firms develop innovations found through disability that also impact their core customer – then scale drives returns. This is not about inclusion, it is about attracting consumers and delivering for shareholders. If you provide data, context and a path forward – smart companies act.
Bean: Building a strong talent base that includes people with disabilities positions us to better connect with all types of consumers, which is definitely a business objective of our Diversity & Engagement platform.
Foss: Hiring and engaging people with disabilities isn’t about being nice, or being charitable. It’s smart business that can positively impact your bottom line and your talent needs from the mailroom to the boardroom.
Footer Info: Contact: Kris Foss, Managing Director Disability Solutions @Ability Beyond at 203-948-2338 or [email protected] www.disabilitysolutionsatwork.com
Also on Forbes:
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https://www.forbes.com/sites/robertreiss/2015/10/12/top-ceos-cite-business-game-changers-and-strategy/
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Top CEOs Cite Business Game Changers And Strategy
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Top CEOs Cite Business Game Changers And Strategy
I recently asked a CEO who was a close friend of Steve Jobs what he learned from Steve. He told me, “Steve always said you must see around the corner.” In trying to capture how top CEOs see around the corner and develop strategy, on September 9, 2015 I held a roundtable for business leaders in healthcare, retail, financial services, professional services and technology. Below are some of the insights shared from the following participants:
Sandra L. Fenwick, CEO, Boston Children’s Hospital with 20,000 employees cited as the top clinical children’s hospital in America
Sharon John, CEO, Build-A-Bear, who since John took over about 2 years ago has seen its stock price increase over 200%
Jud Linville, CEO Citi Cards Citigroup, which is the world’s largest credit card issuer
Andy Frawley, CEO, Epsilon, the world’s largest marketing company with 7,000 employees who leads the market in connecting with customers digitally
Marc Lautenbach, CEO Pitney Bowes who has transformed the 90 year old company where stock has pretty much doubled during his 3 years as CEO
The meeting was kicked off by Linda Ban, IBM Global C-suite Study Director, who shared insights on how CEOs view game changers: “Technology is accelerating the blurring of industry boundaries – bringing seemingly unrelated industries together and sometimes redefining the way in which they are categorized. Often the greatest business disrupters that change the game come from outside traditionally competitive industries."
Robert Reiss: What is today’s business game changer?
Marc Lautenbach: It is that intersection of mobility and commerce coming together. The way we see it is that intelligent products are becoming much more important.
Jud Linville: The discussions we have now are around how to create the ultimate “buy” button. How do you create a frictionless experience for the customer and embed payment – think Uber here - so that they trust and don’t even need to think about the verification.
Sharon John: A game changer for us will be harnessing the power of the brand into new revenue streams. Based on our research and supported by our awareness and loyalty numbers we believe consumers would like to participate in the Build-A-Bear brand via categories that are not part of the current experience such as traditional toys, confection and apparel. It's time for us to shift from a "a specialty retailer" that just happens to have a great brand to "branded company" that just happens to have a great specialty retail arm. This shift can also be inclusive of a separate plush wholesale business and strategic international expansion. Ultimately we would end up with a more diversified portfolio, while growing the business and better meeting consumers needs.
Sandra L. Fenwick: It's all about experience. One message we’ve heard loud and clear from our families and providers is that it’s no longer enough to be the best in care—we must be the best in experience. Patients and families are in charge and their expectations around care, service and information are only growing. This can only make us better. We’re at our best when we’re focused on serving them well.
Andy Frawley: The real challenge is the notion of “recognition” – consistently recognizing each individual across all of their devices. Do we know who a customer is when they are not logged into your app or website? If I log in and check my account, you recognize who I am. But if I am browsing the web and clicking on ads, you may not. So we have focused on connecting with anonymous consumers and using our data assets to engage them across several devices, within a privacy-friendly framework. We think the notion of really understanding who people are is critical because you can’t have a good customer experience if you don’t know the customer.
Reiss: How is digital changing your business?
John: It may be counter-intuitive, but we have been careful not to over-digitize the experience of Build-A-Bear. We are such as experiential-based and tactile business. Yet, we do need to recognize the needs of the millennial mom and the tech-native child. We have had some interesting internal discussions about whether to create a Build-A-Bear online experience that replicates what happens in the store. In the end, we have decided to focus our digital strategy on enhancing our storytelling and brand engagement - ultimately, we are using technology to meet the needs of the consumer in a fresh and different way.
Frawley: What digital really gives us is the ability to bring the emotional elements of a brand into the customer experience everywhere. What we ask is: Do you have to have that integration of the experience? If there is a break in the chain then that is an opportunity for somebody else to come in. Everything is digital now and particularly social, so it has conditioned all of us as consumers to expect instant responses because everything is happening in real-time. This is key as the customer experience is now non-linear.
Linville: For Citi, the goal is to transport our core capabilities as rapidly as possible into digital channels and challenge ourselves to be more nimble than ever before. The credit card business is by its very nature a FinTech and “big data” business where, with machine learning, we bring buyers and suppliers together. In a very short amount of time, more than half of our new customer acquisitions shifted to digital channels, and 70% of our emails are now read on a mobile phone. How we design a responsive campaign and service customers now must consider mobile phones. This year alone, there will be an estimated $1.6 trillion of ecommerce spend. If we can close most of the incremental sales for many of our merchant clients using our cards by 1% or 2%, it blows away most of the marketing programs they have.
Fenwick: Digital impacts every aspect of our business, and of our institution. It affects how we interact with each other, how we engage with patients, and how we inform parents who want instantaneous information and are operating on a much more sophisticated level than any other time in history. Families are using resources on the web to become educated and to access service. Like Jud, 50% of the content that comes through to us is now coming digitally. That is why we're working to partner with and engage disrupters, and bring them into the fold instead having them all sit outside.
Lautenbach: The market dynamics are forcing companies to think about creating purposeful customer experiences. There are 85 different 1-800 numbers inside of Pitney Bowes in the United States. We cannot create a purposeful experience if we have an unfocused approach to interacting with our customers. That is what we are doing now – adapting our systems to focus on our customers in many ways.
Reiss: Talk about your corporate strategy over the next few years.
Linville: At the very core, it is about the relationship that people have with their money that is both highly rational and emotional. In an omnichannel digital world, how do people want to save, spend, borrow, invest, and protect their information? Equally important is our strength as a global bank with an unmatched footprint. Working with partners we have built a global rewards platform where customers can redeem their Citi points anywhere in the world, in a consistent, standardized fashion. It’s about enabling frictionless speed and simplicity for our customers. Finally, the last piece is new customer acquisition. The tools we have built in the U.S. are nascent in international markets and if we can transfer these capabilities to leapfrog local competitors it is a massive win.
Lautenbach: For us it is taking our core capabilities and reapplying them profitably in the digital world. If we can make that clearer then that is a great differentiator for us in our industry. For instance, in three years 85% of all of your statements will be digital.
John: Because we recently achieved our stated goal of returning to sustained profitability and are now shifting to delivering sustained profitable growth, we are in a unique situation and, therefore have to successfully shift our focus to the execution of our new growth strategy. Part of that strategy is to make sure that we don’t lose sight of what made Build-A-Bear successful in the first place. To that point, our shift to a growth strategy coincides with our preparation to celebrate our 20th anniversary in 2017. For the first time the kids who first came to Build-A-Bear in 1997 will now have kids of their own to bring to Build-A-Bear, too, making us a multi-generational brand which opens up new opportunities to expand the business. We want that original special customer experience to be passed on to their children.
Frawley: We will continue to be a powerful and relevant partner to CMOs at great brands, delivering personalized customer experiences at scale around the globe and building bigger businesses for our client’s. There is an enormous amount of marketing spend today that is not targeted and not addressable, but we are going to change that, so that in every multichannel moment you reach consumers at the right place and time.
Fenwick: We need to stay true to our mission and to our unique capability of taking care of children who have the most complex problems and conditions. By marrying science, discovery and innovation, we can make greater strides into personalized medicine and precision care, and live up to our responsibility to keep kids healthy.
To listen to more interviews with top CEOs, go to: www.ceoshow.com
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https://www.forbes.com/sites/robertreiss/2015/10/19/top-ceos-share-their-secrets-of-legendary-customer-service/
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Top CEOs Share Their Secrets Of Legendary Customer Service
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Top CEOs Share Their Secrets Of Legendary Customer Service
Sam Walton, the founder of the world’s largest company, Walmart, once summed up his business philosophy by stating, “The goal of a company is to have customer service that is not just the best but legendary.”
As leaders aim to achieve legendary customer service, I thought it would be fascinating to hear from CEOs of top companies in financial services, healthcare and retail their secrets of service. So on September 22, 2015 I had a discussion with these three service leaders about their service model, culture, and leadership philosophy:
David Nelms, Chairman and CEO, Discover, which ranked highest for credit card customer satisfaction among U.S. credit card companies in 2015, and pioneer known for reinventing the entire credit card business Sharon O’Keefe, President, University of Chicago Medical Center, one of the leading academic medical centers in America known for its groundbreaking therapies to patients John Venhuizen, President and CEO, Ace Hardware, the industry leaders with nearly 4,900 locally owned and operated stores all across the world and winner of nine consecutive J.D. Power awards
To kick off the discussion, Jose Martinez, a customer experience expert from North Highland shared, “Top organizations are now spending 2% of revenue on customer experience, as it increasingly becomes leaders success engine.”
Sharon O'Keefe, Robert Reiss, John Venhuizen, David Nelms. Jose Martinez
Robert Reiss: What’s the secret behind your customer model?
John Venhuizen: We call great customer service our weapon in the world. And we take it quite seriously. In an effort to simplify, we seek to operationalize this into three buckets. First we take all non-customer facing daily tasks and streamline them operationally like a lean manufacturing process, but apply that to retail. By simplifying we reduce the amount of non-customer facing time so we can increase the amount of customer facing time. Second we develop a bottoms-up schedule for our people where we align store talent with our projections for customer visits that day and tasks required to operate the store. Third is our most important bucket, which we call “operationalizing helpful.” Our customer service is everything to us and we don’t believe in leaving that up to chance. So simplification through systematized operations, but always within the framework of never letting local stores lose their own local autonomy and personality, which is where the real magic can happen.
Sharon O’Keefe: Here are two things we do. On the IT side, we have patient portals so a patient can connect directly to their medical record and interact with their clinician through emails or secured texting. They can schedule appointments and view their own test results. Connecting patients to their own clinical information makes it easier for them to navigate the complexities of healthcare. A second thing is “meds-to-beds,” where when someone is discharged before they leave we will fill every prescription on the spot, saving a trip to the pharmacy, and provide the patient education and instructions on how to take their meds. In fact the nursing staff within 24 or 48 hours after discharge actually calls the patient and family member to check how everything’s going and if there are any questions. This really reduces anxiety and makes people comfortable.
David Nelms: We have found a key to customer service is about customers being able to connect with the right person immediately. Many years ago, we pioneered 24-hours a day, 7 days a week customer service for the credit card business. And today, when most companies make it hard to reach a person, we do the opposite. If you’ve got Discover card, the very first option is to connect with a Discover employee located in the U.S. In fact, we still house all our own employees in the U.S. Then, we empower our customer service representatives to completely take care of the customer.
Reiss: How do you build a culture that delivers your customer model?
Nelms: I agree with John, it starts with values. We also have a set of eight values and it’s not just something printed on the wall, it’s something everyone lives. The very first value is do the right thing, which covers a lot of ground on its own. One way our culture delivers new customer innovations is through our feedback loop system of getting positive feedback and collecting complaints. We get feedback from all different sources, so we look for patterns to improve our operations and products.
Here are two examples of how customer feedback has helped us develop important initiatives. We started the rewards category in credit cards many years ago and are a leader in cash rewards. In fact, we gave more than a billion dollars in 2014 in cash back to our customers. Recently our customers told us through feedback loops from our representatives, that they wanted a simplified system where you never lose rewards. So, we created a new system where customers can now redeem their earnings at any time and never lose the rewards. A second is we heard a concern that customers will sometimes lose or misplace their card or leave it at a restaurant. The whole process was a real pain for customers, so earlier this year we launched an on/off switch for a credit card. We call it “Freeze It.” If a customer has misplaced their card, they can use their mobile device to turn the card off and then back on when it’s found. It’s simple innovations like these that start with the culture, start with doing the right thing, go through feedback loops and manifest themselves in service or product features to consumers.
Venhuizen: Our vision is to be the best most helpful hardware stores on the planet. We focus on communications, values, and behaviors. With communications, we try to permeate service into everything we talk about at Ace with aspirational language that we’re fanatical about customer service. Nearly all of our 4,900 stores around the world are locally owned and operated; because of that, patrons of our stores are more than customers, they’re neighbors. Ace store owners live and work, and go to church alongside members of the communities they serve. We like to say our company was built on bedrock and that bedrock isn’t our brand or supply chain; our bedrock is the values of our owners. We believe in integrity, gratitude, humility, teamwork, and love. And yes, a 90-year-old company that sells hardware, has our highest value as love. We think when we’ve got people that love what they do and who they do it with we’re going to outperform our competitors.
O’Keefe: We’ve reduced the concept of great culture down to just two simple things: respect for people and continuous improvement. And what we want to do is engage all of our employees, the clinical staff and the non-clinical staff in coming in every single day and looking for ways to improve services to patients. The respect for people is respect for each other, respect for the patients, respect for the diversity of patients we serve, respect for their families. It really permeates everything. It creates a platform on how we expect our employees to interact with our patients or our customers. We also have behavioral standards which we call, “PRIDE Values.” We reward participation, respect, integrity, diversity and excellence in everything that we do. And we celebrate those wins and tie this into ways to show respect for people and continuous improvement.
Reiss: What is the core of your leadership philosophy?
O’Keefe: It’s all about respect for all people and spend every day trying to humanize healthcare.
Venhuizen: I would say our local Ace owners prove every day that from a leadership perspective, a servant heart is not the enemy of a profitable business but it’s the enabler of it.
Nelms: It’s pretty simple. Understand your customer and do the right thing for your customer. And sometimes, the P&L may look negative but if it’s the right thing, you still do it.
To hear this and other CEO interviews, go to www.ceoshow.com
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https://www.forbes.com/sites/robertreiss/2015/10/28/the-inside-story-of-the-historic-innovation-fund-partnership-between-aarp-and-j-p-morgan/
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The Inside Story Of The Historic Innovation Fund Partnership Between AARP And JPMorgan
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The Inside Story Of The Historic Innovation Fund Partnership Between AARP And JPMorgan
On June 29, 2007 the iPhone was introduced as a societal game changer. The inside story which few know is that Steve Jobs had approached AT&T as a partner to learn sophisticated telephony technologies which made the iPhone possible.
On October 1, 2015 a new partnership with a somewhat parallel story occurred. Jo Ann Jenkins, arguably the Steve Jobs of not-for-profits, connected AARP with JPMorgan Asset Management in the first-of-its kind ‘Innovation Fund.’ AARP will provide $40 million capital for select innovative companies, and JPMorgan Asset Management’s Endowments & Foundations Group will identify and evaluate potential investments focused on improving the lives of people 50 and over. Investments will be in early to late stage companies with innovative products in three areas: aging at home, convenience and access to healthcare, and preventive health.
According to Jenkins, “AARP has a strong history of leading innovation by changing the marketplace. The AARP Innovation Fund is the next evolution of our ability to fulfill our social mission by making sure that the needs and interests of those 50-plus are well represented by products and companies.“
Kathy Rosa, Managing Director and Portfolio Manager, JPMorgan Asset Management’s Private Equity Group shared, “AARP is the first non-profit to invest in young innovative companies focused on ensuring that the needs and interests of people over 50 are well represented in the marketplace.”
The Innovation Fund is a core component of AARP’s new strategy. Jo Ann Jenkins, CEO of AARP since September 1, 2014 and recipient of The NonProfit Times 2015 Influencer of the Year Award, talks about the transformative strategy where AARP can change the fabric of American society, “We want to Disrupt Aging! Let’s change the conversation in this country around what it means to get older. It’s not really about aging, it’s about living … To ‘Disrupt Aging’, we need to get to the point where we’re no longer defined by the old expectations of what we should or should not do at a certain age. We don’t want to be defined by our age, any more than we want to be defined by race, or sex, or income. I want people to define me by who I am, not how old I am. Disruptive aging begins with each of us embracing our own age—feeling good about where we are in life.”
Kathy Rosa shared insights into JPMorgan’s role, “Our Private Equity Group has an extensive network and proactive sourcing process to identify investment opportunities. We employ a rigorous due diligence process that evaluates key aspects of investment opportunities to build customized portfolios designed to address specific client objectives.”
Since any transformative strategies may only be as effective as the organization implementing the strategies, I spoke with members of the AARP team … the level of excitement and passion is clear. Scott Frisch, AARP’s EVP and COO, described how personal it is, “disrupting aging is something we are all going to face, ourselves, our parents, our grandparents. Trying to change the perspective of what aging is, the opportunities it presents in America, is energizing because it impacts all of us.”
The desire to improve the life of the 50-plus is both innovative and new as well as tied to AARP’s roots. Terry Bradwell, AARP’s EVP of Enterprise Strategy and Innovation shared how strongly innovation is tied to AARP’s founding when Ethyl Percy worked create services and programs that had never existed before. She also did it with a focus on helping all who were retired. Her quotes are well known inside of AARP especially one that is often remembered when thinking about how programs can improve the lives of all 50-plus, not just those who are members, “What we do, we do for all.”
Interestingly, Bradwell went on to describe the challenge that history of success creates. “You have to remember we are 57 years old and organizations develop what we call muscle memory. They start doing things and they do them very, very well. This muscle memory can also stop a company from innovating, it creates an inertia that pulls the decisions and programs back to the way of known success and inhibits innovation. So under Jo Ann’s leadership we are establishing a new organizational muscle memory at AARP where we are building a culture of innovation.”
Frisch and Bradwell are charged with making sure the entire organization is incorporating innovation in all it does. AARP is focused on Financial Resilience, Health Security, and Personal Fulfillment. As Bradwell said, “we’ll have to start thinking differently. Getting solutions out into the population much faster. The types of solutions and products and services, things that I care about as a 53 year old, that will resonate with people like me. Then we have to start focusing on Generation Y and the Millennials.”
Frisch went on to explain all of the things they are using to embed an innovation culture. “We are training every employee on some level of the how to’s of innovation. We have built an innovation lab to incubate internal ideas on products and solutions and services for the 50-plus. We have a common vocabulary now that we are using to make sure we treat ideas appropriate to their stage of development.”
Frish and Bradwell are clearly excited about the transformation currently underway and the new ways AARP will be able to positively impact the 50-plus. By focusing internally so that innovation can be sustained as well as pulling innovation from the market place with the innovation fund, AARP seems to have found the game changers it has been seeking. We’ll see what the next several years brings as the innovation fund’s focus on consumer healthcare (convenience and access, preventative health, and aging at home) starts to develop into consumer facing benefits.
It seems as if the comparison with Apple works well for them. Aspirationally, they’d like to change the perceptions and experience of aging as much as Steve Jobs has changed what we now expect out of our phones. Their goal is to become the most innovated non-profit in the United States. We may all be better off if they succeed.
To hear the commercial-free podcast of Jo Ann Jenkins national radio interview go to www.ceoshow.com.
Also on Forbes:
Gallery: Advice From The Most Innovative Leaders 13 images View gallery
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What CEOs Can Learn From The Royals: Kansas City CEO Dan Hesse Explains
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What CEOs Can Learn From The Royals: Kansas City CEO Dan Hesse Explains
Dan Hesse CEO of Sprint watches the Kansas City Royals take to the field before a game against the... [+] New York Yankees at Kauffman Stadium May 3, 2012 in Kansas City, Missouri. (Photo by Ed Zurga/Getty Images)
Most Mets fans, and America as a whole, were initially stunned as the Royals displayed unprecedented grit, focus and character – exemplified by becoming the first world series team ever to actually come back to win three of the games when behind after the 8th inning. What I discovered about this remarkable Royals team is that everything was actually part of a 10-year plan to transform the sport – built on the concept of a new baseball post steroid model.
Most companies seek to do what the Royals did and win with a powerful disruptive model. So I reached out to the one man, Dan Hesse, who could shed light on what really happened with the Royals and what CEOs could learn from that model to transform their own company and industry.
As background, former Sprint CEO Dan Hesse, was named “Kansas City’s Best CEO” in a readership poll by Ingram’s magazine. Glassdoor named Dan one of America’s highest-rated CEO’s by employees, and he was named one of “10 Inspirational Leaders who Turned Their Companies Around” by Entrepreneur Magazine and one of the five “Best Turnaround CEO’s of All Time” by Fierce Wireless. For Dan’s last two full calendar years as CEO, Sprint’s Total Shareholder Return (assuming reinvested dividends) ranked #1 among all S&P 500 companies. I ask Dan about the Kansas City Royals turnaround, culture and World Series heroics, as well as insights on what CEOs can learn from the Royals.
Robert Reiss: The Royals had something very special going on. What makes this Royals team unique?
Dan Hesse: The Royals, the ones you see and the ones you don’t see, are a true team in every sense of the word. It’s said there’s no “I” in team. This team is a special combination on the field, where the whole is greater than the sum of the parts. To compare the Royals with other businesses, I think of owner David Glass as the non-executive Chair, GM Dayton Moore as the CEO, Manager Ned Yost as the COO, the players as the front-line employees, and the rest of the Royals organization as the behind-the-scenes staff support. The off-the-field support and culture played as important a role as the talent on the field. What struck me was the way that seemingly, in every interview, the players began by talking about the team’s leadership -- Dayton Moore, David Glass and Ned Yost, then mentioned their teammates. The respect the players have for the leadership, the front office and the coaching staff is palpable. When the leadership is asked about the team’s success, they talk about the players, then about others throughout the organization. Humility pervades. Every element of the organization had a contributing role in the collective success of the Royals, and perhaps uniquely, every part of the organization appreciated and valued the contributions that those in different roles played in the team’s success.
Alex Gordon with Dan Hesse family
It’s been said that Dayton Moore crafted a team for the post-steroid era. The Royals are not a power team who win via the long ball. The Royals play great defense, the batters make contact and put the ball in play, they run and “keep the line moving.” Every batter, 1-9 can hit. They have great pitching, especially their bullpen which is arguably the best in baseball. As Ned Yost has said, if the Royals can be within two runs late in the game, with the Royals bullpen and the confidence and attitude of his offense, they feel they can win. If they’re ahead after 7 innings, they’re almost invincible (their 111-game winning streak when leading after seven innings was finally broken in August). They have no big stars (but a few All-Stars partly due to their incredible fan support), but no weaknesses on offense or on defense. The Royals are a beautiful mosaic, filled with diversity of many kinds, akin to a great company, where each person plays a different but important role, where the cement keeping the people together is a common goal and a strong culture.
As Moore will tell you, many great people contributed to building this mosaic – scouts, player development personnel and minor league coaches. But few teams invested in development like the Royals. Many players, like Gordon, Perez, Moustakas, and Hosmer to name just a few, came up through their farm system. The Royals also invested in academies in Latin America. They also were willing to trade great players in order to fill in needed pieces of the mosaic. One key trade was trading star pitcher, Zach Greinke, who may win a Cy Young this year, but the Royals got Lorenzo Cain and Alcides Escobar in return. (The Royals remind me in some way of the 2001 Seattle Mariners who won 116 regular season games with no superstars, but no weaknesses, having traded away Ken Griffey, Jr., Alex Rodriguez and Randy Johnson to get a number of key mosaic pieces).
But even with the talent that the Royals had in 2014, they came up “90 feet short” in Game 7 of the World Series. “90 feet short” became the team’s mantra to describe 2015’s overarching goal of a World Series championship. Like in business, experience can make all the difference. Because of their experience on the “Big Stage” in 2014, they were better prepared for what it would take to win it all in 2015. Leadership knew keeping continuity was key, so they retained the nucleus of the 2014 team, but knew the team needed more to win it all, so during 2015 they picked up key experienced players like Johnny Cueto who pitched terrifically in Game 5 against Houston and Game 2 of the Series against the Mets, and Ben Zobrist, who’s bat and defensive flexibility were huge assets (and Ben had played on the Big Stage before as well). And Ned Yost was prepared, as 2015 was his eighth World Series (and first victory).
Reiss: You mention culture. Why is culture important to a baseball team, and what makes the Royals culture stand out?
Hesse: I believe more than anything, even more than talent, it’s the Royals culture that brought Kansas City a World Series title. They had a common goal, to win the World Series, not to come up “90 feet short” (akin to the 1960 Green Bay Packers being 9 yards short which was the catalyst for creating a dynasty).
Eric Hosmer with Dan Hesse family
Leaders drive a culture, and Dayton Moore created a special Royals culture. The leader needs to walk the talk. When others describe Moore, the first attributes mentioned are integrity and character. As John Schuerholz, the Braves GM who Moore worked for before coming to KC, said about Dayton, “He’s a man of integrity and he treated people that way. People will find reasons to go to work for a guy like that.” Moore was able to attract great scouts, coaches and players. But he was known for always looking for character and integrity in his players as well. In his book, More than a Season, he talks about what he looks for in people, most notably a positive attitude and “the ability to apply moral principles in their lives.” Alex Gordon mentions how Dayton is a “father figure” and always “reassuring.” Pitching coach Bill Fischer talks about how well Dayton treats people so “he gets the most out of people around him.” A recent Sports Illustrated article “The Abuse of Power” explains well why this supportive leadership style (exemplified as well by skipper Ned Yost) has proven to be far more effective in both sports and in business than those who demean their people.
The second key cultural element that stands out is genuine caring. I’d even go so far as to say affection. Dayton learned under Atlanta’s Bobby Cox who they say loved his players, and his players loved him. Players, like the people we work with in any business, know when you truly care about them as people. The mutual affection that the players have for the leadership and that the leadership has for the players jumps out from the TV during the interviews. It’s something you can’t fake. Moore makes sure the players spend quality time with their families, as he understands how important happiness off the field and the support system plays in performance. As Alex Gordon put it, Dayton “genuinely cares for each player on and off the field… about our lives as individuals.” Moore recalls a saying that one of his early bosses, Braves scouting director Paul Snyder had for him regarding spouses, “whenever she wants you home, you drop what you’re doing and go home.” This saying about the importance of family is indicative the “family” culture of the entire Royals organization. The players are family too. It’s been well publicized that three players, Mike Moustakas, Chris Young and Edinson Volquez lost parents during the year, Edinson’s father passing away as his son was about to pitch the first game of the World Series. Edinson said that he received condolences, by call or by text, from every single player on the team. This caring about the person, not the player, came through from Ned Yost after the World Series victory. Ned said he had only one regret, having to put a pinch runner in for Perez in the 12th inning (the right managerial call), because he so wanted Salvy to experience running to the mound and hugging Wade Davis after the final out.
The third cultural element I’ve observed is recognition. Publicly and privately, leadership recognized and complimented people throughout the organization. Players were never criticized publicly, by leadership or by each other. But special to the Royals is how the players were encouraged to become a “self-managing” group, even without organization leadership present, the opposite of the “command and control” or “hub and spoke” model some companies employ. If you have a chance to view the talk by Jeremy Guthrie at the November 3 celebration about how the players got together and recognized one another, and celebrated, each and every victory (95 regular season and 11 post season games), I highly recommend it. This perhaps also helps to explain the esprit d ’corps and enthusiasm of the Royals dugout which is more akin to a high school team than a professional team, and I mean that as a compliment.
The other key cultural underpinning of the Royals is trust, and with trust comes delegation and empowerment. The trust the players had in one another came through in interview after interview. The trust that leadership had in one another and in the players shines through too.
Reiss: The Royals could be one of the great turnaround stories of all time. How did they turn the franchise around so significantly, especially given it’s not a major market team, which with the spending in baseball, makes their performance even more impressive?
Hesse: Some people may not realize this was Dayton Moore’s tenth season as Royals GM. The first seven seasons were losing seasons. But, with the support of the Glass family, the Royals set out to build a foundation for future success, which meant building a culture and a talent scouting development system for the long haul. Those of us from other industries understand how important building a strong foundation is, and that doing so might take many years, like a wireless company building a strong network. The press (like Wall Street can be for businesses) was very tough on the Royals for years. But, the Royals stayed the course, a great lesson for all of us. The leadership of the organization led with a calm confidence. If you watched interviews with Ned Yost or Dayton Moore over the years, this is what you saw. Former Joint Chiefs of Staff Chairman, Admiral Mike Mullen, once gave a great talk to Sprint’s leadership team about leading in times of crisis. He explained how this is the time when great leaders show calm, determination and confidence, and eliminate chaos. This is what an organization needs and is looking for from its leaders.
A crisis is also when the culture of trust, delegation and empowerment yields great benefits. No team played better in crisis situations than the Kansas City Royals. The Glass family trusted and empowered Dayton Moore. Dayton trusted and empowered those working for him, like Ned Yost. Ned trusted and empowered his players. I remember Ned Yost being interviewed after a game about why he had Lorenzo Cain bunt in a key situation. Yost said Cain was not given the bunt signal, that he only signaled for a bunt perhaps four times all season, that he leaves these decisions to the player to know the situation and to make the right call.
Perhaps the two most important plays in the entire World Series are also two of the best examples of trust, delegation and empowerment in action, where the player knew it was “on them” to make the decision. Each play tied the game up in the 9th inning, games the Royals went on to win. The first was in game 1. Familia was pitching in the bottom of the 9th and he was delivering another dominating relief performance. Alex Gordon was in the on-deck circle watching him pitch to Salvy Perez. Gordon had never seen Familia pitch, but he noticed him “quick pitch” Salvy and decided to make an adjustment, to look for the quick pitch. When Familia quick-pitched Gordon, he was ready, and Alex blasted one over the center field wall which sent the game into extra innings, which the Royals won . Who knows what might have happened in the Series had the Mets won game 1 in Kansas City. The second example was Eric Hosmer’s tying run in the 9th in game 5. He wasn’t “sent”, he took a chance, on his own, to break for home when David Wright threw to first base to get Salvy Perez. To say taking home on that play was risky is an understatement, but it turned the tide of the game. It says something about the culture of a team when a player is empowered to that extent, and this is perhaps why the Royals set records in this year’s postseason for in-game “turnarounds.” The same cultural strengths that led to their 10-year turnaround also led to their late-inning turnarounds.
More on Dan’s views about business leadership can be found at DanHesse.com.
Also on Forbes:
Gallery: Tips & Secrets From Top CEOs 16 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/11/16/top-cmos-discuss-the-next-wave/
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Top CMOs Discuss The Next Wave
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Top CMOs Discuss The Next Wave
Michelangelo once said, “Every block of stone has a statue inside it and it is the task of the sculptor to discover it.” Accordingly, the task of today’s CMO, in tandem with their CEO, is to discover the next wave that can sculpt their organization’s growth strategy.
As you develop your marketing plans, I thought it would be of value to share important direct quotes on digital, Millennials and the next wave, from a conversation I moderated on October 15, 2015 with industry leading marketers from technology, investments, telecom and banking:
Lauren Flaherty, Executive Vice President and Chief Marketing Officer, CA Technologies Chris D. McIsaac, Managing Director, Vanguard Cecilia McKenney, Executive Vice President & Chief Customer Officer, Frontier Communications Vinoo Vijay, Chief Marketing Officer and Head of Corporate and Public Affairs, TD Bank
Robert Reiss: How is the digital world changing the game for your company?
Cecilia McKenney: IP-based video consumption is one of the biggest changes from a digital perspective for Frontier and is shaping the way we think about our future, our network and capital investments. It’s just amazing to me that the family TV night that all of us remember has shifted to entertainment marathons. We are consuming a season of Game of Thrones over the weekend, watching it on a connected TV, shifting to mobile, watching it on an IPhone; all of this has dramatically changed the way Frontier thinks about our entertainment services. It is this enormous amount of video consumption that drives the broadband demand, the capacity and speeds that consumers and businesses need today and in the future. All of these trends are what we at Frontier think about 24x7/365.
Lauren Flaherty: Our whole CA portfolio has been reshaped by what our customers are going through and it’s a cross industry dynamic, they say, “I’m going through a digital transformation”, which we now recognize is far bigger than the ability to reach customers and prospects, or create experiences – it’s about operating all facets of business in a fundamentally different way. So we did research with Freeform Dynamics, which showed a mainstream slogging away old school, and a new group which we call the “digital disruptors,” who are executing “digital-first” business models and performing far better. What also jumped out, the disruption waves are super compressed, and it’s getting faster and faster. We all have Uber and Air bnb on the brain, but you can look across every industry and there’s somebody entering the market who is a digital native, rethinking how you deliver better experiences, create growth and business value.
Chris McIsaac: Digital is changing our business profoundly. We have 20 millions client for whom we manage over $3 trillion in assets, and now more than 90% of our interactions are online. We are one of the largest providers of 401k services in the world with about four million individuals, and we have many instances where we’ve been able to leverage the digital experience to actually get participants in those 401k plans to save more. So digital has dramatically changed the nature of the day-to-day interactions with our clients, and importantly it’s also improving our ability to help our clients become more informed and make better investment decisions.
Vinoo Vijay: Digital and mobile capability give banks the chance to far more deeply, and richly, enable consumers to connect their money to their life. As a result I think consumers will realize greater value and potential from their banking relationships. But how it is executed will differentiate the winning banks. AT TD Bank, we look at the features that are available in our industry and how we can improve them. We look at ways to incorporate what we call 'biscuits' like being open longer than any other bank, having coin counting machines, mobile check deposit or pens not chained to the desk, into the customer experience. We call it Banking Human. And in a world of digital potential, we are making sure we marry the efficiency and inter-connectedness of digital with the service and experience that only real people can provide.
Reiss: What are you seeing with Millennials?
McIsaac: When it comes to investing, oftentimes a Millennial’s first experience comes through their employer-based retirement plan and we’ve noticed they have built in high expectations for their digital experience. We've seen a desire to complete all activity online or through our mobile apps. This expectation has pushed our thinking on things like enrollment and online education. We've been able to develop the kind of personalized experiences millennials expect and we believe will begin to travel up the age spectrum.
Flaherty: If there’s a theme for me, again, disruption is at the center of it. We see some patterns now that would suggest that you’ve got to push a bit of a reset button with this crowd. They roll a little differently because being connected is wired into their mindset – in fact, this sharing economy we see emerging has everything to do with what Millenials value: instant access; peer-to-peer driven pricing, product and service evaluations; digital vs. f-t-f; it’s a cultural shift driven and enabled by technology.
Vijay: The Millennial view on the banking side is twofold. One, Millennials expect more purpose in our brands and therefore there is much more interest in narrating that part of the old story of who we are, and why we are. And two, while they love digitization and expect digitization, it has not precluded them from still wanting human touch, as well as a sense of safety and sound methods as relates to their bank. In fact, we did a research on Millennials where we asked them if they would be likely to open a bank account with three different brands, one being a pure startup that we just made up the name, one being a bank that was outside of their region, and then the other being a bank inside their region. And we asked, if one of these banks started a digital-only offering would you be more likely to take it or not, and it turned out that they would be most likely to accept it from the bank in their region, because they saw that as the most safe and sound option of the three. I think the Millennials are also giving us a great business opportunity, and the mobility and mobile phone explosion is giving us a great opportunity, because what we’re seeing is that customers are simply more engaged.
McKenney: Just from a technology perspective, Millennials are huge on mobile… they want to do everything on their phone. And second, it’s interesting, from a service perspective they don’t seem to want the pleasantries of customer service, they just want to do it themselves … they want a customer solution that’s DIY, and they really don’t need to talk to people. They want fast, quick and efficient. They are less loyal, so they switch service providers at the drop of a hat, and frankly, the other aspect that’s been surprising to us is, they’re not diligent payers. The way we are responding to that trend is by making the ability to pay more convenient. So, we are expanding our mobile payment options.
Reiss: What will the next wave look like for you?
Vijay: We look at the future as ‘what does the human bank do’? The human bank for us is a bank that provides all the digital efficiencies that consumers demand plus a real connection to a human. Practically what that means for us is we are becoming a lot more localized, a lot more neighborhood-centric, and a lot more one-to-one in our conversations, not just because technology allows us the ability to serve our customers more uniquely, but more so that it also allows us to be a deeper part of a neighborhood's life. We want our stores to be beacons within their communities.
Flaherty: I’d slice it two ways. Five years ago, we were still talking about marketing’s role being the voice of the customer, customer advocacy, etc. We have to move from advocacy to enabling customers, empowering customers. For decision makers who invest in our software which includes CEOs to technology folks, there’s a lot of peer-to-peer interaction, a great desire for transparency … more independent trust but verify. And digital will enable all of that at an exponentially greater pace. You’ll also see software enablers like APIs that effectively enable applications to speak with applications creating a raft of new business opportunities. The wave we’re entering will really test a company’s capacity to reinvent itself through agility from the Boardroom to the technology teams. And for marketing being the enabler of what “digital first” means to our customers will be central to the value we create.
McIsaac: I think a real next wave will be enhanced client experience. The availability key data and our ability to draw insights from that data is much greater today than it ever has been in the past. So we will have more customization, more personalization, and a more flexible experience for our clients. This obviously allows us to be much more proactive in tailoring our services to meet the needs of each individual client. For us at Vanguard, this means helping investors make better investment decisions that will help them in the long run.
McKenney: Video will need to be much more flexible. It needs to be a video package that is customized for the Reiss family. We need to take the data that we collect from our video customers and then be proactive and present the video and the entertainment content that they would be interested in. It needs to be an interactive relationship between our customers and Frontier so that we can dynamically present video-on-demand content that they want. This includes flexibility on the speeds you need, like maximum speed when you’re home and you're viewing content, but if you’re going to be away for a week in the mountains, then dial down your speed and pay for what you consume versus a fixed price for a fixed speed. Wherever our customers are on the globe, they can have a customized speed and TV experience. The customer will truly be in the driver’s seat.
In summary, Warren Tomlin IBM’s Global Mobile Leader shares insight of what next wave CMOs need to do, “We have more than enough data in enterprises. We need to focus on how you look for insights in that data to leverage and create the best digital experience for the client. This is where cognitive business comes in. Anything digital will require the CIO, CTO and Marketing LOB/CMO to have joint dialogue on how to reach the customer with the best experience on their terms.”
Also on Forbes:
Gallery: 10 Most Influential CMOs In 2015 10 images View gallery
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https://www.forbes.com/sites/robertreiss/2015/11/17/how-to-fix-education-in-america/
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How To Fix Education In America
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How To Fix Education In America
Pretty much everyone in America agrees on the importance of our education system. And yet, consider these numbers: America spends $810 billion annually on our school systems and still we are in 17th place in reading and 32nd place in math globally. Shouldn’t that be unacceptable to us?
In an effort to understand how to fix the American education system, I went to a leader in one of the fastest growing and most successful segments of our school system – charter schools. Below are direct answers from Jon Hage, Founder and CEO of Charter Schools USA on our challenges, actions, a unique strategy for CEOs, insights on presidential candidates and recommendations for the future.
Robert Reiss: Describe the state of education in America and the most significant challenges we face.
Jon Hage: Our hunger for better education in this country never stops. It is the foundation of what makes America great and the key ingredient for global competition. Children are being left behind and the statistics are overwhelming yet worth repeating. Recent studies show that Hispanic and African American students are still graduating 10-15 points behind the national average. The number of students who leave eighth grade without the ability to do grade-level math and reading is closer to 66 percent.
In the past five years 16 studies found that students in charter schools do better in school than their traditional school peers. Recently, Stanford University’s Center for Research on Educational Outcomes (CREDO) 2015 Urban Charter School Study found that charter schools do a better job teaching low-income students and minorities than traditional schools.
Education in America needs to catch up to meet the demands of the global marketplace. Charter schools offer the opportunity to foster innovative environments that allow teachers and students to interact in ways that prepare them for jobs and skills that will be relevant in the future.
Jon Hage Sharing Insights About Education With Robert Reiss
Reiss: What is the most important immediate action to improve education in America?
Hage: Teachers are an incredible group of professionals, and for teachers, school never really ends. According to an Organization for Economic Cooperation and Development study U.S. primary school teachers work as many hours than the average full-time employee across other sectors. Given that many of them are hired as 10-month employees, this means that their days are incredibly long and teachers are consistently going above and beyond expectations over weekends and summer months.
Teachers deserve quality professional development and coaching to support them in their efforts. Not only will strong learning experiences and opportunities for educators lead to better outcomes for students, but it will also build an engaged, talented, and supported workforce. We need to value our educators by supporting them as dynamic professionals invested in improving their practice.
Reiss: Can the role of Fortune 500 CEO be tied into educational success?
Hage: A company’s most important asset is its people. As CEOs we are constantly seeking ways to lure the best and brightest and then left searching for policies and on-site amenities to retain them. Specifically, CEOs of major corporations should consider a new strategy – actually building a charter school in their corporate park as a way to benefit employee families and the community.
Education is changing, and I want to challenge CEOs and corporations to look at schools in a different way. In the past, corporations looked at education through the lens of philanthropy. Traditionally, education has been a part of corporate responsibility to generate goodwill. Today, I believe it can be a major part of workforce development – both in talent acquisition and in ongoing educational opportunities for employees. Business collaboration with education can help ensure that our students are excellently prepared for the 21st century workplace. Ongoing education and business partnerships can also support employee effectiveness and engagement; we need to start looking at on-site education opportunities as a way to improve workforce knowledge and skill, as well as tool for fostering community engagement and work-life balance.
Additionally, just as we are seeing constant changes in the workplace to meet the demands of each generation, we are seeing an education revolution. Parents are seeking alternatives to traditional public schools. Charter schools are on the rise and new applications and technologies are being introduced to education on all levels. The business community could be a key partner in infusing 21st century skills and technologies into K-12 education.
Reiss: Any insights about presidential candidates and their visions for education in America?
Hage: I believe that for the first time in several cycles, Republicans have an opportunity to galvanize voters on domestic issues, especially education. All of the GOP’s other principles of lower taxes, strong military and free enterprise are important, yet fall flat when speaking to a single mother desperate to raise her family and make ends meet. Inner city parents, new immigrants and suburban white families all care about a high-quality education that can allow their children to achieve great things in life.
In my time as a policy advisor for Gov. Jeb Bush, I assisted him in writing the white papers that became the charter school law in Florida. Gov. Bush has been a leader on education beyond his time in office and has made it paramount to his campaign. Gov. Bush is not alone on this issue and it is great to see an entire GOP field making this a big discussion.
Reiss: By 2020 if we get everything right what can be the state of education in America?
Hage: Parents need more choice in America. From 1999 to 2013, the percentage of all public schools that were public charter schools increased from 1.7 to 6.2 percent. Statistically speaking, the charter school movement is still in the beginning stages. To continue to make impact and change the lives of families, high quality options need to be omni-present.
We can accomplish this in three key ways:
Legislatively – We need to make sure that each state has supportive charters and choice legislation. We need to make sure that public charters receive fair funding and that each child is represented regardless of where they go to school.
Professional Development – Teachers need to be treated like other highly skilled members of the workforce. Offering them education and training on the latest techniques and technologies will ensure our students are receiving the best education.
Political cooperation – Charter and districts need to continue to work together to solve the issues facing education. This is not a competition but rather an opportunity to save and direct the lives of so many of our young students.
To hear the interview with Jon Hage, go to www.ceoshow.com/radio
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https://www.forbes.com/sites/robertreiss/2016/01/06/leaders-share-how-the-cognitive-era-is-transforming-business/
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Leaders Share How The Cognitive Era Is Transforming Business
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Leaders Share How The Cognitive Era Is Transforming Business
The third transformative era brings us full circle. The first transformative era was when the industrial revolution changed the driving force from muscle to machine. The second era was from machine to mind, when leaders like J.P. Morgan created new industry. Then in 1950 an IBMer Arthur Samuel created a computerized checkers game where instead of being programmed - for the first time - the machine actually learned. This ushered the third era of mind and machine, completing the full circle, and with the likes of Watson, this has been dubbed the cognitive era.
The two burning questions are:
How will digital change the future? How are industry leaders leveraging digital today?
To answer these, I convened leaders of several industries: wealth management, consumer products, mobility, education, technology and printing:
Keith Banks, President, U.S. Trust Julie Bauer, President, Panasonic Consumer N.A. Ralph de la Vega, President & CEO, AT&T Mobile & Business Solutions David Levin, President and CEO, McGraw-Hill Education Bob Picciano, Senior Vice President, IBM Analytics Tom Quinlan, CEO, RR Donnelley & Sons Company
Robert Reiss: How will digital change the future?
Julie Bauer: There will be tools that will help companies see who their customers are and what they want, which will help fuel an era of personalization.
Ralph de la Vega: Cyber security has become a top priority for CEOs and CIOs. There are only two kinds of companies today… those that have experienced a data breach and those that will be breached. In many cases there is data leaving a company's infrastructure without leadership being aware of it. Our experience shows that about 40% of data breaches are inside jobs.
David Levin: Human potential is reaching a new level, and this will be significantly enhanced by data.
Tom Quinlan: There will be an increasing amount of new communication tools, which will ultimately make people’s lives easier.
Keith Banks: We’re just at the beginning of digital, data-driven tools and soon we will extend their availability … Millennial workers are so natural with these tools and they will transform the workplace.
Bob Picciano: IOT will drive the next wave of cloud, the majority of data will now live at the edge of the network with value being lost almost instantly. This shift will lead to a new age of autonomous network design with analytics native to its core. Ultimately It’s not the Things in the Internet of Things, but the business transformation and outcomes that come form instrumentation of this data.
Reiss: How are you leveraging digital today?
Bauer: Panasonic is actually creating a smart city development in Denver, although we’re not a city planner. We’ll help create connected homes and we’ll do things like putting information into the hands of consumers about how they are consuming energy. Panasonic has found customers are no longer scared of information; in fact they deeply value information. And interestingly, we’ve learned internally about technology innovation; what we’ve found is that as we plan through the development process that more innovation comes from business units than from IT, and we think that’s because instead of starting with technology they start with the final experience instead.
Picciano: Organizations are just beginning to understand the shift to an “Insight” Economy. Through cognitive solutions, we are helping companies derive insights from unstructured data sources like social media to find new patterns both inside and outside the firewalls and across industry. Examples include The Weather Company and IBM Watson are providing answers to highly complex problems, or refining the correct clinical trials, or research done by wealth advisors. We’ve learned how people interact with machine-oriented data, and how it is connected, meaning that machine learning and cognitive systems will be far more effective than previous systems. Data is truly becoming the middle manager, which is enabling unbiased actionable decisions, fueling this emerging “Insight” Economy and ultimately creating new sources of competitive advantage.
Quinlan: We’ve discovered that by building a culture where employees are encouraged to submit ideas, we are able to harvest more innovation. We’ve actually changed our mindset to be able to applaud failure, and realize that failure often drives new innovative success.
Levin: We’ve focused heavily on expanding our digital offerings and delivering corporate training and education. What we’ve discovered is that through data and analytics we are able to help HR departments determine who is progressing most successfully in their training, which clearly is valuable insight for our clients. Part of our success has been going against industry trends and hiring software engineers to strengthen our in-house capabilities.
Banks: We are becoming more of a tech company where we are decreasing the number of physical branches while investing heavily in digital experiences. The big data opportunity is so immense, strategic and tactical. Our analytics team is focused on harnessing data like customer demographics, resources and investment opportunities to make more targeted decisions.
de la Vega: Real time information is almost as dramatic as the industrial revolution itself. Things that have never been connected before are now connected, like cars where car manufacturers and owners can have 24x7 real time information on the status of brakes and other critical components. A great customer example on the AT&T side is with Maersk where we now connect 280,000 refrigerated containers, enabling those containers to communicate critical information like temperature, humidity and geographic location. We are also prototyping sensors that feature solar and kinetic energy powered batteries that have a projected 10-year life.
On the internal front, we removed all of the cash registers from our AT&T stores and replaced them with tablets so employees can interact more directly with the customer. With real-time information (aggregated and anonymized) customer traffic patterns in our stores give us the capability to change digital signage in real time based on customer shifts throughout the day. And, our employees also have a great opportunity to become even smarter by obtaining nano degrees all the way up to a Masters in Computer Science degree online through our close collaboration with Georgia Tech and Udacity. It is going to be an exciting future for all.
To listen to interviews with CEOs go to www.ceoshow.com
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61c27a0fbb879aed67a02f3e9571d427
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https://www.forbes.com/sites/robertreiss/2016/03/21/top-chros-discuss-culture-in-a-digital-world/
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Top CHROs Discuss Culture In A Digital World
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Top CHROs Discuss Culture In A Digital World
Steve Jobs once said, “Simple is harder than complex.” Human resources embodies that mantra where the complexities of behind the curtain data and analytics can yield the simplistic beauty of a great culture. To explore how top companies build winning cultures in a fast-changing digital world, on February 23, 2016 I spoke with these CHROs of industry leaders:
• Victoria Berger-Gross, CHRO, Tiffany & Co.
• Matthew Owenby, CHRO, Aflac
• Larry Pernosky, CHRO, Amedisys
Robert Reiss: What is the one data point you look to first?
Larry Pernosky: Engagement because as our engagement barometer moves up or down, so will the culture and attrition.
Victoria Berger-Gross: Employee turnover -- because even though it’s a lagging not leading indicator, it’s an objective sign of what’s going on in satisfaction, engagement, and the strength of your employee value proposition against the external marketplace.
Matthew Owenby: We focus on engagement as a leading indicator of many potential issues, from which we gauge the level of trust employees have in leadership which is the foundation for creating the best employment experience possible.
Reiss: What’s the relationship between data and culture?
Berger-Gross: Over time you develop culture with qualitative hand-selection of people, close relationships, and understanding what values you can and can’t adapt in people once they’re hired. We use employee survey measurement, qualitative focus groups, and other data gathering to recognize our constraints and drive new offerings to encourage people to engage and grow with Tiffany.
Owenby: Data is particularly important from a hiring standpoint. We are careful to hire people who embody our strong, individualized culture. It’s not enough to have a technical competency, you’ve got to be a person that’s going to connect well with our culture. Data and analytics don’t build your culture-- the culture is built on values. That’s what’s worked for us for over 60 years. From a value perspective, communication is key--regularly, immediately, and with transparency. Access to LinkedIn, Facebook and Twitter makes it easier to gauge what types of communicators you may hiring.
Pernosky: We sit on a plethora of data. In redefining our culture, we needed to redefine how we use our human capital data overlaying with business outcomes. You then view your business outcome differently, incorporating engagement data to form a strategy that truly motivates and inspires employees to grow personally and professionally. That ties back to the success of the company.
Reiss: How will mobile technologies and the Internet of Things affect the future of HR?
Owenby: A practical view of mobile technologies and the future of HR is that more millennials represent today’s workforce and shape the expectation around, "I want the ability to sign up for healthcare via my Smartphone." And more senior leaders increasingly want to access information real time. We’re using more of a push rather than pull strategy, meaning we are deliberately pushing content, doing more things mobile, from an access to information perspective. Even our internal app which says, here’s what you need to be talking to your people about today and here’s how to incorporate diversity and inclusion in regular touch bases with your teammates.
Berger-Gross: We are continuing to add more mobile technologies in retail, distribution and manufacturing (we are unusually vertically integrated). This connectivity supports absolute alignment between these groups. At retail, repeat and long-term customer relationships are key to our mindset of customer service. Our retail staff are consummate and credentialed professionals – many are gemologists – and we use technology for on-going training. We also use broad consumer analytics to understand the behavioral shopping preferences of different consumer groups, which affects how we select and train sales staff.
Pernosky: Tele-medicine, tele-monitoring are becoming increasingly important to acute or even critical acute care. Partnerships across technology streams help us procure the best technology possible. A number one priority is work/life balance, and more often for millennials. Incorporating fitness, health and well-being strategies, such as personalized data feeds from a Fitbit, builds a caring culture where employees say, “I’ve got an organization who cares, and even provides technology to help me manage my life."
Reiss: How do you see the role of HR changing five years from now?
Berger-Gross: For the most part, whatever the size, companies are led by the same number of 10 to 15 people at the top. Data allows us to further scale and be more data driven, especially in the groups with high staff numbers, about scheduling and employee decisions in general. Utilizing people in different locations, not necessarily tied to particular customers in a particular location. Updated, faster customer databases--while balancing essential privacy issue.
Owenby: Accessing information in more real-time, user-friendly methods and doing basic and even complex HR transactions via your mobile device, from any location. Increased productivity and efficiency, whereby you no longer require someone to be in an office to perform a transaction.
Pernosky: We will have dynamic workforce planning and forecasting capabilities. Companies will make predictive forecasting and analytic decisions versus today’s practice whereby somebody leaves and you replace them. That will change the game, business outcomes and even capital analytics.
The future of human resources was summed up by Susan Steele, Executive Partner, Talent and Engagement at IBM. “It’s clear that the HR function, along with the entire enterprise, is increasingly becoming more digitally-oriented, data driven and cognitively-enabled. While this trend creates opportunity for tech-savvy HR leaders it can lead to new risks and challenges for those HR executives who are unprepared. I would therefore encourage all Chief HR Officers to begin planning today for the use of cognitive computing in enhancing workforce productivity, reducing business risk and increasing competitive advantage.”
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ecc4e74fe4785f97b13248d2c0be53f4
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https://www.forbes.com/sites/robertreiss/2016/04/07/what-ceos-and-presidential-candidates-can-learn-from-ancient-greek-philosophers/
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What CEOs And Presidential Candidates Can Learn From Ancient Greek Philosophers
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What CEOs And Presidential Candidates Can Learn From Ancient Greek Philosophers
A personal passion of mine is reading business books, where for over two decades I have read a business book a week as I try to learn more about the subject I cover most, business leadership. I decided to seek a recommendation for my next book to read from someone whose views I respect, Dan Hesse, who retired as Sprint CEO just over a year-and-a half ago. When I called him, I found out that, coincidentally, he had recently been asked which book most changed his life. What he said surprised me, as it wasn’t a book about business or business leadership.
Dan Hesse (Photo by John Gurzinski/Getty Images for NASCAR)
Here’s some further background on Dan, in addition to receiving Corporate Responsibility magazine's Lifetime Achievement Award, he was named "Most Influential Person in Mobile Technology" by LAPTOP magazine (Steve Jobs was No. 2), Wireless Industry "Person of the Year" by RCR magazine, "Executive of the Year" by Wireless Business and Technology magazine, and one of "10 Inspirational Leaders who Turned Around Their Companies" by Entrepreneur magazine. In 2014, Glassdoor named Dan one of America’s highest rated CEO's by employees, the only telecom, cable or wireless carrier CEO on the list. For Hesse’s last two full calendar years as CEO, Sprint’s Total Shareholder Return (assuming reinvested dividends) ranked No. 1 among all S&P 500 companies (Netflix was No. 2). During Dan’s years at Sprint, the company was recognized 20 times by J.D. Power and Associates for excellence in customer service. The 2014 American Customer Satisfaction Index recognized Sprint as the most improved U.S. company in overall customer satisfaction, across all 43 industries, over the previous six years.
Robert Reiss: Dan, I know you’re a student of business leadership. What book have you found the most influential on the subject of business leadership?
Dan Hesse: Interesting you should ask. I was recently interviewed for The Books That Changed My Life: Reflections by 100 Authors, Actors, Musicians and Other Remarkable People. I didn’t choose a book about business or a business leader (I noticed that Tommy Hilfiger chose Steve Jobs by Walter Isaacson), but chose the first book I can remember reading which shaped my views on leadership, The Republic, by Plato, which I read as a college undergraduate.
Plato’s observations were impactful in many ways. The Republic is largely Plato’s account of discussions between Socrates and other learned Greeks. Up to this point in my life, my rationale to be good or kind were based on our family’s religious beliefs, a means to an end (going to Heaven vs. Hell). The men who Socrates was talking to also viewed being just or good as a means to an end, arguing that the only reason just people act so is out of fear of being caught or punished, that they would be better off materially if they could be unjust and get away with it. Or, people act justly because of the benefits to honor or reputation. Socrates uses logic (the famous “Socratic Method”) to explain why justice, and the search for truth and “the Good” are worthwhile for their own sake, not for gains on earth or in an afterlife. He explains how only the just person can be truly happy.
Reiss: What are the leadership lessons you learned?
Hesse: First and foremost, that it’s a privilege and a responsibility to lead. Socrates talks about how a good ship’s captain is more concerned with the sailors than for himself, how the good leader is more concerned with the welfare of his subjects than for his own.
Second, great leaders bring people of different skills and walks of life (the aristocracy, the producers and the soldiers) together for the common good.
Third, good leaders are always learning and constantly seeking the truth, and that the value of uneducated opinion pales when compared to facts or the truth.
Fourth, that leadership needs to be earned, that leadership should only be bestowed on the “best,” or most virtuous person. Justice is the first and most important of the four virtues, it enables the other three--temperance, courage and intelligence.
Reiss: What is the relevance of a book written 2,400 years ago to our presidential election or business leaders today?
Hesse: Plato describes how the same qualities that make a person lead well make the organization or state function well (that an organization functions much like a person). A just person is in balance. They are educated in science, the arts and in sport, and healthy in body, mind and soul. Socrates argues that women, if provided the same education, are as capable of being fine leaders as men. A just person must lead the state, and the state must be in balance between the interests of all of its citizens, the workers, aristocracy and military if it is to function well. A leader who creates or foments class warfare is extremely dangerous, and this behavior can lead to tyranny or dictatorship. Plato asks how the tyrant “tries to rule others when he cannot be master of himself?” Even though tyrants or the greedy gain physical possessions, Plato describes them as unhappy, as “the most miserable.” Tyrants can exist in governments and in companies.
The Republic helped shape my view that business leadership is a vocation, that how a business is led impacts the lives and livelihoods of so many people – employees, customers, shareholders, suppliers and the communities served by a company, and this is why Corporate Responsibility is important of and by itself, not because the ends might justify the means (in reputation or brand). The openness, intelligence, civility and quality of the dialogue and disagreements between the participants in these Socratic debates are also important to foster within companies, in our political campaigns, and in Washington.
Our founding fathers created the United States on Plato’s principles, which had been developed further by political philosophers like Hobbes, Locke and Rousseau. Plato said that the best leaders often don’t seek to be leaders – they don’t seek power. George Washington was practically “drafted” to be our first president. The idea of a couple of open party conventions where the most virtuous or best person is “drafted” is an interesting idea whose time may have come.
More on Dan’s views about business leadership can be found at DanHesse.com.
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280f8a4820605acc021d3abf5c071401
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https://www.forbes.com/sites/robertreiss/2016/04/18/top-cmos-share-their-best-practices-for-success-in-age-of-digital-disruption/
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Top CMOs Share Their Best Practices For Success In The Age Of Digital Disruption
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Top CMOs Share Their Best Practices For Success In The Age Of Digital Disruption
March 15, 2016 — Just as 2,060 years ago, the Ides of March 44 BC, Julius Caesar uttered his last words, “Et tu, Brute” when he was without warning murdered, today fierce competitors without warning are attacking established businesses and seemingly overnight taking over the leadership position.
Most attacks come through digital disruption, and often the first to recognize these threats are marketing executives. So on March 15, 2016, I sat down with six leaders of marketing to discuss digital disruption challenges, opportunities and the future. The executives were leaders in travel, technology, academia, healthcare and consumer products:
• Jim Berra, CMO, Royal Caribbean International
• Rashmy Chatterjee, Marketing, Communications and Citizenship, IBM North America
• Ravi Dhar, George Rogers Clark Professor of Management and Marketing & Director of the Center for Customer Insights, Yale School of Management
• Paul Matsen, Chief Marketing and Communications Officer, Cleveland Clinic
• Kathy O’Brien, VP Skin and Marketing Services in the U.S., Unilever
Photo: Robert Reiss
Robert Reiss: What will drive success in the future?
Rashmy Chatterjee: The speed with which businesses transform in the Cognitive Era, i.e. their ability to act on insights gained from structured as well as unstructured data (posts, tweets, images, tones, videos, etc.). We all know data is growing at an unprecedented pace but over 85% of this is unstructured. Cognitive systems process structured and unstructured data to Understand, Reason and Learn (URL!). As an example, five years from now, I don’t think there will be anything like B-to-B, B-to-C. Marketing will be Business to Person and a deep understanding of an individual's profile will enable them to be better served by businesses, governments, hospitals or academic institutions. This has to be the purpose of technology, not a one size fits all.
Paul Matsen: From a health care perspective: consumerism. Consumers are having to pay more out of their own pocket with high deductible plans and co-pays so they are seeking more digital information. Transparency -- one of the biggest disruptions is the ability for patients to compare prices for lab tests, various procedures and imaging. Personal technology, driven through wearable, digital technology allows patients to engage in their care, keep them well and at home, where they actually will receive better care for some services.
Ravi Dhar: It’s like a democratization of experience. If you look at Uber, it allows everybody to have a limo service at a relatively inexpensive rate. Things that perhaps only the one percent could afford, are now being moved to the broader base through technology. You can call it disruption, give it different words, but what it’s doing is allowing everybody to purchase experiences that traditionally would have cost a lot of time and money. It’s not the same way of doing business, it’s certainly exciting times.
Kathy O’Brien: Certain companies will leapfrog. We are not wedded to the past. Unilever will go from being data poor, to data rich, to data intelligent. Once we are able to source and mine data in a new ways we will be able to springboard to different ideas and choose different partners, it will allow us to jump off into different avenues. I don’t think it could be a cooler time to be a marketer.
Jim Berra: It’s becoming more of an experience led economy. How can you scale customization through technology without losing sight of the fact that it’s about individuals interacting with individuals? If it becomes individuals and machines, then I think we’ve lost something in the way we deliver our hospitality brand. We’ll need to be able to react and respond quickly to consumers’ needs. Technology is a strong enabler, a catalyst. We need to be thoughtful about how that intersects with customer experience, and how our teams interact with our guests around the world.
Reiss: How is digital transforming your organization today?
O’Brien: Digitize Unilever is one of our anthems for 2016. It’s not just marketing’s job when you think about digital, it really is your entire organization, especially considering millennials. Collectively, we are trying to understand what drives the end user and delivers a more superior product. At Unilever, everything we do has to have a strong consumer insight -- not only our innovation, but our marketing innovation as well.
Berra: Two areas we’re focused on are commercialization of the Web and what we can do to create the right level of content/information/connection to guests to make vacation planning seamless and stress free. We see ourselves as a wingman in that process where digital and digital applications create a real opportunity.
Chatterjee: Digital has become the core of the IBM Marketing organization today. We are building our digital capabilities centered on a client's digital journey -- how they discover us, learn more about our capabilities, engage with us and transact with us. And the client journey could be from multiple lenses -- an industry lens, a role lens, a solution lens and many more. Most important for us is that the client's experience is consistent with the value of our brand.
Matsen: You don’t market health care like other brands. At the intersection between marketing and clinical care, the greatest transformation is the electronic medical record. Through our development of a digital product -- MyChart -- patients can make appointments online, fill prescriptions and send messages to their doctors all in a HIPAA, privacy-protected environment. Our industry hasn’t yet been able to make technology produce the efficiencies and productivity we’ve seen in other industries, such as the travel industry. That’s where cognitive computing like Watson for genomics or precision medicine has the capacity to really advance research and clinical care.
Dhar: If you look at what cloud and mobile does at the CEO or CMO level, ultimately business is about three things: faster, better, cheaper. With cloud and mobile, beyond cheaper, it’s about trying to focus on the better piece. In three areas, the acquisition of new customers, the customer experience, the targeting of existing customers -- technology plays a terrific role in trying to change and understand the customer journey. You still need insight, whether through cognitive computing or creative marketing, and a deep understanding of your consumer.
Reiss: What measurements are most important to you?
Berra: Brand search interest in Google. A brand that’s growing in search is a healthy brand. It’s a leading indicator as to where demand is headed. The ability to drill in specific query streams and different geographies helps us get a jumpstart on pricing and promotion, and recognize opportunities to ensure we get the demand that we need. This is kind of the Holy Grail metric.
Matsen: Most of our national patients come to us through digital sources, so we’re constantly looking at our lead generation and how effective we are, which ultimately enables us to track the conversion to patients and ROI.
O’Brien: Engagement. While working on Dove we found that 53% of women are very likely to tweet negatively about themselves. Partnering with Twitter, we developed an algorithm whereby if a woman tweets something negatively about herself we can identify and speak directly to her. The hope is to help women understand the widespread effect of negativity in social media. By distilling data, we unleashed the insight. We think of engagement at a whole new level… different than a click through rate. Now we are truly engaging with our consumers.
Chatterjee: The most important measurement for me is Brand health. We measure this in three ways -- Belief, Action, Advocacy. Did our marketing efforts strengthen belief for the brand; did they compel a client to take action and, finally, did the client feel good about that interaction and experience, and then did they advocate for about it positively?
Dhar: Simplicity of metrics is important, CEOs only want to spend that much neuron on trying to understand the complexities. There is value to this, but people who are working in this area realize it’s nuanced. Depending on what part of the business you’re looking at, you will have a different set of metrics.
Reiss: Talk about culture in a digital world.
Matsen: Our focused and agile culture helps us deliver exceptional service. For example, we were the first health system to introduce same-day appointments. We say our call to action is “Call today for an appointment today.” We saw over a million same-day appointments last year. That was a huge culture change in the organization because there was no universal solution. Each medical institute and department had to think about their scheduling process and their staff needs to achieve the goal. And then it became a rapid adoption of best practices across the organization to make it happen. And I will say that our CEO’s concept was “marketing should lead.” We should push/use the marketing as much to change the culture internally and drive the organizational imperative behind the same-day initiative as it was for external audiences.
Dhar: I focus on test and learn experimentation. We work with a range of companies and there are huge differences in willingness and ability and capability of testing. Companies, particularly in the tech industry, and Google is a big example of that—they’re innovating, they’re testing. I think there’s some real barriers in many companies. One is the time aspect. Another, is there a benefit to testing? Or if I make a mistake—fear of failure. There’s cost and benefit issues, but unless you test and learn, I don’t think an organization can truly learn.
Berra: We know with traditional command and control structures, you’re going to get lapped by your competitors. We want to move at a much quicker pace, empowering cross-functional teams and letting them go and defining the boundaries well in terms of “this is what we’re after and here’s the measurement approach to understand whether you won, lost or drew.
O’Brien: Our U.S. leadership has prioritized transforming the culture over anything else. We’ve worked to define what leadership behavior looks like, things like “I’ve got your back,” “Make the call.” We understand that people want to be heard. So we work so every voice is heard, every story is celebrated. IT has also been huge a huge enabler of cultural change, because you want people to have the freedom to work agilely. That means technology really has to be ramped up.
Chatterjee: Fast, Agile, Flexible. Things can change very quickly -- so really working with agility and flexibility is critical. Yet in this always-on, always connected digital world, I believe we need to create a culture that frees up time for people. To separate noise from content, to separate actions from outcome -- all this requires a level of thoughtfulness. I don’t believe you can actually culture unless you give back time for teams to THINK, innovate and prioritize.
In summary, in thinking back about Julius Caesar there is another relevant parallel: In his time Roman Numerals were the language of mathematics. Once the concept of zero was introduced, the door to multiplication and true transformations emerged … just as I believe 0 and 1 and digital disruption as a whole will open the door over the next decade to transforming the business environment as we know it today.
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58f115e31676914bd7240f68b4d1c488
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https://www.forbes.com/sites/robertreiss/2016/05/09/quality-shifts-from-measurement-to-driver-of-innovation-cite-top-ceos/
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Quality Shifts From Measurement To Driver Of Innovation, Say Top CEOs
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Quality Shifts From Measurement To Driver Of Innovation, Say Top CEOs
When Steve Jobs introduced the iPhone, one of the unanticipated results was transforming the discipline of quality from backend measurement to become the frontend driver of innovation and brand differentiation. In fact, according to Shontra Powell, COO, of ASQ (American Society for Quality), “Our digital world with real-time feedback loops has ushered in a new era of quality -- which I call the golden age of quality -- where quality has become a strategic driver of innovation, risk management and customer experience.”
To gain insight to the transformative role of quality today, on April 19, 2016 I spoke with three leading business leaders about success and how they viewed quality. Following are some of their quotes:
• Adam Goldstein, President, Royal Caribbean Cruises , which launched the world’s first smart ship. With over 45 major ships constantly moving throughout the world, Goldstein runs one of the most logistically complex businesses globally.
• Dan Hesse, recent 7 year CEO, Sprint where in his last two calendar years as CEO, Sprint had the highest total shareholder return of any company in the S&P 500. Hesse was cited, "Most Influential Person in Mobile Technology" by LAPTOP magazine. (Steve Jobs was No. 2.)
• Kip Tindell, Chairman and CEO, The Container Store , the organization who has been in the top 10 of Fortune’s Best Companies To Work For In America, more times than any other company. Tindell has been deeply involved in the important, far-reaching business movement Conscious Capitalism since early in the organization’s inception.
Robert Reiss: What is the relationship between quality and profitability?
Adam Goldstein: Sustained quality drives premium revenue generation. Additionally quality enables the most powerful partnerships, which can increase profitability.
Kip Tindell: Quality enables the retention of employees, customers, shareholders … all stakeholders of an organization.
Dan Hesse: Simply stated, quality costs less.
Reiss: What is a key to your organization’s success?
Hesse: There are two big levers that can lead to success. When I came to Sprint, the company was struggling primarily because service quality had deteriorated, so customers were leaving. Service quality and customer satisfaction go hand-in-hand. We pulled two major levers to turn things around, compensation and agenda. First we linked everyone’s pay to the number of customer calls to care; second, customer service was the first thing on the agenda of every senior team meeting. We were able to reduce our annual care expenditure by 55%, saving over $2 billion in cost per year, while Sprint went from last place in The American Customer Satisfaction Index to first place in our industry, and Sprint was the most improved U.S. company across all 43 industries they study.
Tindell: Quality is tied to customer service; service to us is communication, and we believe that communication and leadership are the same thing. I think what we do best is communication. We think anything can be solved with it, which leads to better efficiency, better profitability, much happier customers, and ultimately, overall higher quality.
Goldstein: We have our Gold Anchor Standards which have a total of 3,000 standards describing in guest-centric terms what the experience should be across all the areas of the product delivery. These standards helped us stay in the forefront of cruising and eventually led us to go into the China market in the last six or seven years and immediately become the leader in a market where we had no prior experience.Reiss: A core tenet of quality has always been continuous improvement … how does that work in our digital world?
Tindell: The digital world causes everything to be so transparent, that you now must evolve with continuous improvements. You have to get better and better and better, because things are changing at warp speed. In retail, everybody, in the palm of their hand, has unlimited selection and the best price, and so you have to offer something that is going to break out against all of that. We've long said that technology is the key to customer service, but the digital world is what is causing this dynamic and wonderful change of the retail business.
Hesse: Continuous improvement is important, but it will only happen with consistent leadership. I thought it was a great line that Kip had, where baboons look every 17 seconds for signals from the leader. If the leader changes direction, people will change what they work on, so you’ll have chaos, wasted effort and the “program of the month” instead of improvement. If the leader maintains a consistent strategy and top priority over time, improvement should be continuous.
Goldstein: In the digital world, customer expectations have increased dramatically, and rightfully so. We need to continuously improve by knowing specifics about who these two thousand people are, what they prefer, what behaviors they've demonstrated to us in the past, so that we can arm our people to serve them based on knowledge of who they specifically are, which we've really never had to do before.
Reiss: How do you believe CEOs should view quality in today’s business economy?
Tindell: The CEO has to insist upon quality, which I believe is necessary and achievable in every aspect of the business.
Hesse: It’s table stakes, and the CEO needs to lead by example by making sure quality remains at the top of their agenda.
Goldstein: Leaders have no days off from integrity or quality.
In summary, the question I pose to readers is, “How have you seen quality evolve over the last decade?” Would love to hear your feedback…
More on Dan’s views about business leadership can be found at DanHesse.com.
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44c1197cad859b2219dcaf8ec50c20d8
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https://www.forbes.com/sites/robertreiss/2016/05/23/banking-education-travel-leaders-discuss-the-future-of-digital-reinvention/
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Banking, Education, Travel Leaders Discuss The Future Of Digital Reinvention
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Banking, Education, Travel Leaders Discuss The Future Of Digital Reinvention
In the early days of the personal computer predictions were that the average worker would finish all weekly tasks in just a few hours and have the majority of their time for leisure; as we know, the opposite became true. Intensified competition and new operational models drove productivity leaps.
To dig deeper into how today’s digital reinvention will change tomorrow's business playing field, on April 22, 2016 I had a roundtable with these industry leaders:
• Adam Goldstein, President and COO, Royal Caribbean. Royal Caribbean, with over major 45 vessels globally, created the world’s first "smart" ship.
• Albert Hitchcock, Chief Technology and Operations Officer, Pearson . Pearson, the world’s largest education company and book publisher, is reinventing education through digitization.
• Carey Kolaja, Global Chief Product Officer, Citi FinTech. Citi FinTech was established in 2015 to accelerate the bank’s speed to market with next-generation mobile capabilities.
Robert Reiss: What will be different in your business five years from now?
Carey Kolaja: There will be convergence between multiple players within the financial ecosystem that will enable what we believe is contextual banking—banking happening wherever the customer is, not necessarily where the bank is.
Albert Hitchcock: The way we serve our end customer. We will be able to provide a highly personalized experience for our learners and customers that's informed by data and delivered via a global learning and technology platform.
It will be delivering a highly personalized education experience to the end user of ours, the end student, that’s delivered on a global platform.
Adam Goldstein: Our relationship with our customers through the entire vacation cycle will primarily take place through mobile technology.
Reiss: Over the next few years, what’s the biggest challenge that digital will create?
Goldstein: Having spent decades mastering and leveraging complexity, I think the digital frontier will force us to master and leverage simplicity. The big change will be mobile becoming the basis of how the customer navigates the vacation cycle. Presenting our environment to the customer in a manner so simple that it’s appealing and navigable in a mobile technology. We’ll have to manage this simplicity in a way that we haven’t had to before. I think that’s going to be a really profound challenge for us.
Hitchcock: The new technologies are relatively straightforward to create and implement, but the real challenge is how you take your people on the journey. A digital-first world means a fundamental shift in what we work on, where, how, and who with, so the challenge relates to our peoples' skills, experience, understanding and knowledge of what a world-class digital consumer experience looks like and the impact that digital is going to have on our business in the coming decade.
Kolaja: One of the emerging challenges is identity management and security. As customers, we are becoming more comfortable sharing bits of information about ourselves in exchange for more compelling, rich, relevant, timely experiences. At the same time, there’s a corresponding demand to be able to manage and protect our own digital identities. We are becoming more aware of what we’re sharing, what we’re getting in return and who we are associating ourselves with. It's going to be a very interesting, evolving debate over the next two to five years.
Reiss: How has digital helped you reinvent your offerings today?
Hitchcock: Digital education is still in its relative infancy and there is so much potential that digital has to offer us. Our goal now is to transform the entire digital educational experience, creating highly personalized learning tools and a seamless user experience. This will draw on a deep understanding of our customers and their learning patterns, but in the future we will look to take advantage of newer developments to drive new learning methodologies such as cognitive analytics. We’re creating these products and services across a range of curriculum types and age groups that focus on what we call efficacy -- proven, improved outcomes in education. This will be enabled by a single set of platform assets that will provide the broad educational community with a "consumer grade" experience comparable to what any young person would use, whether that's Facebook , Amazon or Netflix .
Kolaja: Digitization is helping us meet our customers where they are, giving them faster and easier access to information. The needs of the customers in the financial sector in banking haven’t fundamentally changed in the past 200 years, but we’re changing how we deliver on those needs. Citi FinTech opened on November 2nd and we were talking to clients 12 days later. We’re working iteratively to incorporate client input.
Goldstein: In the case of Royal Caribbean, we need to meet the customer where they are -- literally “inside of ourselves.” With our Quantum Class Project, we evaluated every aspect of the onboard customer experience. Becoming more digital, leveraging these opportunities, while ensuring we didn’t lose the personal service and the personal touch. Developing consumer features like the Bionic Bar where two robot bartenders serve you drinks ordered on a tablet, which could never have been done before.
Reiss: Talk about competition and industry convergence in the future.
Kolaja: Industry convergence is forcing everyone to reevaluate their strategies. We’re learning from industry disruptors and looking for opportunities to co-create. Citi FinTech has an intense focus on one deliverable for this year, and we’re operating in a mostly flat, non-hierarchical way. This emulates the connectedness and team strength of a young company.
Goldstein: As Chair of the Global Cruise Line Industry Association, I’m familiar with the areas where convergence is key, such as safety & innovation, but in terms of the sales, marketing and revenue generation, it’s a free-for-all. As it relates to the consumer experience, I don’t think we are converging. I actually think that we are diverging.
Hitchcock: Your competitors of tomorrow are not necessarily your competitors today. So to stay ahead we need to put the customer right at the center of everything we do and say. We need to run our businesses as effectively as an Internet platform company and as efficiently within the same cost structure, but customer service – and proven learning outcomes – will be our competitive differentiator.
Finally, in getting a sneak peak of the future of digitization, the greatest game changer of all will be the Internet of things. Mark Peterson Global Lead on The Internet Of Things for IBM has said, “The Internet of Things is changing the way we interact with the world around us. We are now able to know more about ourselves and our customers than ever before, making it possible to create entirely new business models that address individual needs with more accuracy and expediency than previously possible. The most successful companies of tomorrow are those that are transforming their business models today to utilize the Internet of Things and position themselves ahead of their competitors.”
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4fb2830e19561dc5800af6d8b6fcd9ed
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https://www.forbes.com/sites/robertreiss/2016/06/06/visionary-entrepreneur-series-josh-fox-ceo-bottom-line-concepts/
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Visionary Entrepreneur Series: CEO Josh Fox Discusses Bottom Line Concepts' Philanthropic Model
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Visionary Entrepreneur Series: CEO Josh Fox Discusses Bottom Line Concepts' Philanthropic Model
Warren Buffett once shared one of his homespun philosophies on money, "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1." As CEOs and CFOs seek growth strategies, often overlooked is one of the most fundamental -- identifying low hanging fruit where they can save money for new capital investment. I recently was introduced to Josh Fox who developed a model that within only seven years from start up has saved over 1,000 companies money. What was of particular interest to me was his philanthropic model.
Robert Reiss: What advice do you have for CEOs to identify savings?
Josh Fox: 56% of the monthly invoices that organizations receive have errors, duplications, and miscalculations. Reviewing monthly statements for these misbillings one can find (and potentially recover) serious amounts of money. Utilizing software and mark-to-market databases to accomplish this would streamline and enhance the benefits of that process further.
Reiss: Why are corporations not able to identify this money?
Fox: Typically, when internal employees are tasked with reaching out to incumbent vendors for price concessions or discounts, the vendor will ultimately give some small savings, but not before extracting an additional year, or even two, before the next open RFP. Moreover, without market-based information about what other companies are paying, what the built-in profit margins are, or what terms are possible, it is unlikely for employees to get the best results, no matter how experienced and good at their jobs they may be.
Reiss: What is the process of your model to identify uncaptured cost reductions?
Fox: After working with 1000+ companies across North America, and reviewing invoices across 52 different line items for several years, Bottom Line Concepts has created its own internal benchmarking database. We use this tool, other proprietary tools and relationships to develop averages and specific ranges for what companies are paying for products and services and what terms they are receiving. As new clients come on board, we use this information and our relationships to work with them, as well as their incumbent vendors, negotiating the best pricing and terms possible. That’s why 92% of the time we are able to identify double–digit savings.
Reiss: Describe your philanthropy model.
Fox: The inspiration for our program, Line UP for Charity, came from helping a New York-based, non-profit find approximately $440,000 across 3 expense line items. We had begun to see ever more people and groups wanting to support good causes, and because we believe in community service, too, we wanted to develop a business model to support and amplify those kinds of efforts. Very simply, we partner with organizations and individuals committed to philanthropy: a charitable organization introduces us to its board members/donors and we help fund that charitable organization through the dollars we recapture and the prospective savings we structure for its benefactors. After refunds are realized or savings are implemented for our client, we donate, in the name of that client, a portion of the contingency fees we earn to that client’s chosen charity. It is a powerful model that we are deploying with increasing frequency. That NY non-profit I mentioned were so impressed by the results we produced for them personally, they introduced Bottom Line to a study group of Chief Technology Officers from over 100 organizations and Line Up for Charity was born. To date, we have signed 23 of those organizations as clients. As we continue to recover and save money for their benefactors’ companies, Bottom Line funds the introducing charities with a portion of the fees we have earned. This is a win-win-win: Bottom Line finds lost and wasted dollars for its clients, improving their businesses, the client gets to support important, non-profit activities and the charities themselves get to do more good works. And it is all incredibly efficient because we are making use of dollars that were already lost and written off.
Reiss: What areas of business are most likely to have hidden savings?
Fox: Every area has hidden savings. Each time we start working with a new client, one of the concerns they share is that because they are so unique it will be most difficult for Bottom Line to help them. The truth is, no matter what industry a company is in, the invoices for the products and services they purchase are the same as all the other invoices we have seen for years across all the industries and individual companies we serve. It does not matter if they are a new business or one that has been around for over hundred years, profitable or struggling, large or small, public or private. At the end of the day, their telephone or broadband or copier or office supply or treasury or travel or group benefits bills are the same.
In summary, I thought I’d end this article with another quote from Warren Buffett, that relates to the geometric growth potential of identifying savings and reinvesting the found capital, "Someone's sitting in the shade today because someone planted a tree a long time ago."
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848f981cc095558be25189187ce4f017
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https://www.forbes.com/sites/robertreiss/2016/06/13/how-two-wisconsin-ceos-created-the-new-craze-of-pairing-jerky-with-beer/
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How Two Wisconsin CEOs Created The New Craze Of Pairing Jerky With Beer
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How Two Wisconsin CEOs Created The New Craze Of Pairing Jerky With Beer
It all started on January 13, 2016 when I was interviewing Troy Link, CEO of Jack Link’s Protein Snacks and sampling a variety of their jerky. I said, “All these flavors of jerky would go together great with specialty beer, why don’t we do a pairing like people do with wine, but instead with beer and jerky?” Troy replied, “In Wisconsin, we have jerky and beer all the time,” and then Troy’s team laid the foundation to run with the concept.
On my path to pairing the perfect jerky with beer, the first thing I learned is Wisconsin is unique … it has three remarkable things: scintillating Germanic old world recipes, exceptional nature supporting super fresh livestock and ingredients, and most significantly a family driven intense Midwest work ethic.
Troy’s team connected me with John Leinenkugel, of the Wisconsin-based fifth generation Leinenkugel Brewing Company founded in 1867. I then interviewed Troy Link and John Leinenkugel and shortly thereafter at my family’s annual Mother’s Day party we had a "focus group" to determine the best pairings. So in this article you’ll learn insights about beer and jerky, recommendations for fun pairings, as well as a Father’s Day gift … fatherly advice from the dads of two CEOs on how to run a great company. First, here is a link to learn more about pairing jerky and beer.
As background, Troy Link is CEO of second generation family owned Jack Link’s Protein Snacks, the fifth largest salty snack brand and meat snacks category leader. Jack Link’s Protein Snacks consists of a portfolio of brands, including Jack Link’s Jerky, World Kitchens, Matador, SQUATCH, Small Batch and the newly introduced line of high protein, responsibly raised, 100% grass fed beef meat snacks called Lorissa's Kitchen.
John Leinenkugel is fifth generation of the family run Leinenkugel Brewing company, which is based in Chippewa Falls, Wisconsin and distributed nationally. Leinenkugel’s is best known for founding a new concept for beer, during its 140th Anniversary year -- the Shandy -- which is defined as beer mixed with something extra; it starts by adding natural lemonade and then special flavors such as ginger, grapefruit and watermelon.
Robert Reiss: What is one important piece of business advice you learned from your dad?
Troy Link: Never forget where you came from and never forget the customer. My dad taught me the importance of remembering where you started and where your roots are. For us, that’s the Northwoods of Wisconsin and Jack Link’s is proud to maintain our corporate headquarters in Minong, Wisconsin. While we’ve grown to become the meat snacks leader in the snacking category, we’re still just a family-owned business among sea of corporate giants. And because we stay close to our roots, we stay close to our customers and what they want - quality and value. The fundamental values of creating high quality products at a great value drive everything we do at Jack Link’s.
John Leinenkugel: “Our father was infamous for telling us, “Never cut the quality of your product.” He taught us to stay true to our roots, the brand and always support the folks that have supported us for so many years.”
Reiss: What is something people may not know about jerky/beer?
Leinenkugel: Here’s a 1-minute Ph. D. on beer. I call it AATMF. The first two A’s are Appearance and Aroma, because we don’t taste with our mouths first. In fact, scientifically over 85% of what you taste is related to smell. And then TMF is Taste, Mouth, Feel and Finish. How the things taste on your tongue, how do they feel on your tongue or in your mouth, that’s mouth feel and then finish, how did things finish? The human tongue usually tastes sweetness at the tip, salty and sour on the side, proteins in the middle and you taste bitterness on the back of your tongue, which is why you always have to swallow beer. So to taste beer properly you can’t put in your mouth roll it around and spit it out like you do with wine. Beer is the most quaffable drink. And Robert, quaff is different that a sip. We sip wine, you drink milk or juice but you quaff beer.
Link: Jerky is perhaps one of the healthiest snacks. Jerky is natural, no fat, high protein, low carb and gluten-free. Let me tell you about our process to make jerky. First we select the best cuts of whatever protein we’re using (pork, beef, turkey). This means no fat, no connective tissue, no veins, no cartilage … only a very, very high-end piece of meat that’s a hundred percent pure protein. Second, we marinate, cure, smoke it and package it. And all the particulars come from how long you marinate it, how you smoke it, what temperatures you take it to and finally how you slice it. And we’ve gone clean label, pantry clean, so you won’t find anything in our products that you don’t find in your pantry at home.
Reiss: What is so special about pairing jerky with beer?
Link: For me, it’s the memories and camaraderie that come from the occasions where there’s beer and jerky. Whether that’s up at the cabin with family, or hosting a tailgate party with friends, it’s a fun and easy combination for any occasion.
Leinenkugel: What works so well for me with beer and jerky is that they are both portable and easy to enjoy. I personally like the ability to grab a beer and rip open a bag of jerky and enjoy a delightful high-protein snack. The mild malty sweetness of beer is a nice contrast to the smoky saltiness of jerky. It makes for a wonderful pairing.
Reiss: You both have many unique product lines, but what is your favorite paring of jerky with beer?
Leinenkugel: My favorite is Jack Link’s Teriyaki Jerky, which has a burst of flavor, with Leinenkugel’s Grapefruit Summer Shandy, which summons freshness and aliveness. And with this pair, it’s not just the flavors -- even the aromas are harmony.
I also like Jack Link’s Turkey Jerky with Leinenkugel’s BeerGarten Tart which takes the savory notes of the turkey and creates a new profile reminiscent of an aged oaky chardonnay.
Link: I really like spicy foods so the Jack Link’s Sriracha Beef Jerky has a basic flavor but you get that have heavy smoke in a very fermented spice note. So I like to pair that with a sweeter, hoppier beer, like in Leinenkugel's Honey Weiss. Add that heat along with that sweet citrus, along with the coolness of the liquid and it gave me an awesome flavor.
Another favorite is the Hickory Smoked Jack Link’s Jerky with the Leinenkugel’s Watermelon Shandy … a little spicy seasoning in the middle of the profile, followed by mild watermelon notes.”
As for my take, at my tasting those from 21 to 82 years of age did taste tests. The winner was Hickory Smoked Jerky with Watermelon Shandy. Although, as a note many of the women really liked the Cranberry Ginger Shandy with the Turkey Jerky. My next door neighbor Stan Hart, who also happens to be a CEO, summed it up, “The Small Batch Peppered Jerky was great, but frankly a little spicy for me. But, by pairing with the Summer Shandy both the beer and the jerky elevated each other … true perfection.”
I can tell you from my family experience, nothing quite makes for a great party like pairing jerky with beer. My hope is you’ll celebrate this Father’s Day and future events with your own pairings of jerky and beer.
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cf86da34bd952b153cf2e7402daa8706
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https://www.forbes.com/sites/robertreiss/2016/07/18/how-industry-leaders-are-changing-the-landscape-of-talent-acquisition-kaiser-permanente-aflac-ibm/
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How Industry Leaders Are Changing The Landscape Of Talent Acquisition: Kaiser Permanente, Aflac, IBM
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How Industry Leaders Are Changing The Landscape Of Talent Acquisition: Kaiser Permanente, Aflac, IBM
Warren Buffett once said, “In business, I look for economic castles protected by unbreachable moats.” In today’s business economy arguably the strongest moat fortifying great companies is the concept of talent. To gain insight into how the landscape of talent acquisition is changing, on June 15, 2016 I moderated a discussion with three of the most respected companies representing healthcare, financial services and technology. They are:
Chuck Columbus, Senior Vice President and CHRO, Kaiser Permanente : The largest integrated health care delivery system in the United States with 664 hospitals/medical offices and 10.6 million members. They have $60.7 billion in revenue with more than 180,000 employees and took the top spot on DiversityInc's 2016 Top 50 Companies for Diversity list.
Matthew Owenby, CHRO, Aflac : Still led by the original founding family with 70,000 licensed independent agents and $21 billion revenue, Aflac has been for 10 consecutive years a top world’s most ethical company and a perennial 100 Best Companies to Work For.
Carol Gordon, Vice President of Global Talent Acquisition, IBM : The leading cognitive and cloud technology company with $82 billion revenue across 170 countries and 378,000 employees, IBM has for the 23rd consecutive year led the U.S. in patents earned, and has consistently ranked as a Top 10 Company for Leaders and Female Executives. Last year IBM hired over 70,000 new employees.
Robert Reiss: What is the future of talent acquisition?
Carol Gordon: We’re starting to leverage cognitive in our selection and assessment tools. We believe, at some point very soon, Watson may actually interview candidates which would be a great way for potential candidates to directly experience our cognitive capability, while enabling us to better match them to roles and predict the sort of people who are most likely to be successful. We are not just looking at the right skills, but the whole person, “the talent,” to ensure they’re going to be successful in our Company and culture.
Matthew Owenby: The future may well become on-demand workforce. This means providing a workplace that’s flexible enough to allow for a generation of workers that want to work when they want, with non-traditional working hours, a non-traditional job profile and job description. It’s going to take a lot of mental gymnastics for most corporations to get their minds around. But if your workforce ultimately is not prepared to work nine to five, including from a location perspective, we may be embracing a workforce that is primarily dominated by people that control parameters.
Chuck Columbus: In the future, health care and services will be provided in innovative ways — outside the traditional hospital and office visit settings — to meet consumer preference and needs. We already are seeing a rapid movement toward e-visits with physicians and skilled clinicians taking the place of traditional office visits. Our mini clinics in retail settings are generally staffed with one or two multi-skilled people. They rely on technology to connect in real time with other skilled clinicians to supplement their capability to serve the consumer needs.
It will continue to be critical to help people considering job opportunities to understand the mission of the organization — how we serve a greater purpose to give meaning to the work. In health care, the traditional ways of working — the services we provide and the locations for care and service — are changing to improve both quality and customer convenience. Services will be provided in a more dispersed fashion, which will present challenges to sustaining a team oriented culture among the workforce. In view of these changes, we must continue to ask how can we engage the current and prospective workforce to think creatively about providing their skills and talents in a team-oriented way?
Reiss: What talent acquisition metric is most important on your dashboard?
Owenby: Quality of hire. How effective are they? How well did they integrate into the culture and what are their long-term prospects here?
Columbus: I would say the diversity of our pipelines. To best serve the diversity of our communities with cultural proficiency our workforce must be supported to bring their diversity of background, thought and perspectives every day.
Gordon: I've got three: speed to hire, quality of hire, and the hiring experience. We’re all in the business of finding the best talent as quickly as we can and making sure they're successful, how we do this – the experience we create, is very important to us.
Reiss: What’s a practice you use to identify the best talent?
Columbus: We are piloting an approach started by a group of millennials in our organization that uses an application to match people within the organization interested in working on a project or initiative outside their departmental sphere. This allows them to develop broader perspectives on our business, builds their network, accelerates their development, allows us to assess them in different settings, and breaks down traditional organization walls. It will help us learn new ways of resourcing key programs and improve talent readiness. This should prove to be an approach that we will leverage in our recruiting efforts, particularly for millennials.
Owenby: When you join Aflac domestically or globally, we want you to have a truly customized employment experience. Through our Career Success Center, we create a long-term career/relationship opportunity for you and engage as equally with you as with our customers. What matters in the future is relationship and how we’re going to differentiate ourselves. It’s not necessarily some clever use of technology, but some meaningful use of building and maintaining relationships, and that’s probably one of our big advantages.
Gordon: We’re looking at more non-traditional ways to find the type of talent we’re after. We find social forums and communities where target candidates hang out. Then we host coding challenges and hack-a-thons, to get them excited and engaged with our technology and to understand what it means to work at IBM. We also recently launched a way for candidates to upload their resume or CV giving Watson information to match them with relevant job opportunities and IBM careers.
To hear Robert Reiss interviews with top C-Suite executives go to www.ceoshow.com.
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ba1eb4ecf29425ac6b306cee479965af
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https://www.forbes.com/sites/robertreiss/2016/11/21/industry-leading-cfos-share-insights-how-digital-is-opening-new-opportunities/
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Industry Leading CFOs Share Insights On How Digital Is Opening New Opportunities
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Industry Leading CFOs Share Insights On How Digital Is Opening New Opportunities
Shutterstock
To explore how the digital world has helped leading CFOs drive success, on October 19, 2016, I had a conversation with industry leaders in financial services, manufacturing and healthcare. We discussed digital opportunities, data and c-suite collaboration. The conversation was teed up by Bill Fuessler, Global Leader Finance, Risk and Fraud, IBM who shared CFO research stating over 90% of high performing finance organizations rely on predictive analytics in their revenue forecasting, financial planning and risk management while their peers use predictive analytics on a far smaller scale. The participants were:
- Fred Crawford, CFO Aflac -- a leading insurance company that is a perennial Best Company to Work for and Most Ethical Company.
- Tom Szlosek, CFO Honeywell -- a global manufacturer of technologies that address some of the world’s most critical challenges around energy, safety, security, and connectivity and a perennial Fortune Most Admired Company.
- Doug Vanderslice, CFO Boston’s Children’s Hospital -- founded in 1869 it has been cited for several years as the #1 Children’s Hospital in America.
Robert Reiss: How is digital creating opportunities to advance your business?
Fred Crawford: On technology and transformation, the digital world has helped us develop One Day Pay, which is our innovative program that enables us to pay claims in one day. This year we’re on pace to, through the One Day Pay program, pay upwards of two million claims through our One Day Pay system.
Doug Vanderslice: One profound way that digital has been transformative at Boston Children’s is in our enhanced tele-medicine capabilities, providing easier and better access to our specialists for second opinions and advice on rare and complex conditions. With the present digital capabilities, our physicians can quickly and easily assess more patients and transmit a variety of imaging modalities digitally, quite clearly and accurately. It’s allowed our physicians to see more patients and prevented patients from having to fly into Boston to see a Boston Children’s sub-specialist.
Tom Szlosek: Honeywell has a massive installed base of control systems, sensors and devices, distinct engineering and functional competencies, and a standard cloud offering platform. We are strongly positioned to help our customers capture, aggregate, and analyze data to improve safety, security, comfort and productivity.”
Reiss: Talk about data and analytics and your organization.
Vanderslice: Implementing price transparency in a complex care environment has been of great importance for us, but is exceedingly complicated. One of the big data issues that exist for a hospital is understanding what mix of services a physician is going to order for a complex case as standardization is difficult in complex care, calculating the price of the variety of services ordered, and understanding the arrangement between the patient and their insurance company.
Szlosek: When you consider that we have completed more than 90 acquisitions during the past 15 years and all of the different platforms that we inherited, you get a sense of amount of work we have to do to remain efficient and effective in this space. Today, we have over 150 different ERP platforms in Honeywell, which can prove to be challenging in terms of being able to aggregate data and see it in a transparent way. In response, the Finance function had taken the lead to drive better analytics and have built a plan to reduce the number of platforms from its current state to roughly 15 in the next five years. We are partnering with IT and other functions to drive standardization of the analytics tools and techniques across Honeywell, which we think is going to serve us very well into the future.
Crawford: As an industry, we collect a tremendous amount of insightful data on our clients, and not surprisingly, particularly at Aflac as more of a health insurer, we collect a lot of sensitive data about our clients as well. Throughout the years, a few things have developed with all of that data including increased cyber security and sensitivity around the data, and more recently a more offense-oriented use of that data for the purposes of growing and marketing products - and finding new growth opportunities. Cyber security moved from a defense mechanism in the health insurance industry to being part of our offense, protecting us as we look to advance the ball in analytics.
Reiss: Share some insights on how your C-Suite communicates and collaborates.
Szlosek: We’ve recently put together a cross-functional enterprise information management team, and we now have a Chief Operating Officer who has prompted more collaboration with IT, Finance and the other organizations that are served by IT and Finance. We’re focused on game-changers that are going to help drive the growth, as well as the productivity.
Vanderslice: For our C-suite, we’ve established a group we call our “Operational Effectiveness Group,” which is composed of myself, our Chief Operating Officer, our Chief Nursing Officer and another operating Senior Vice President. We’re the sounding board and the decision point for questions of financial resources, versus clinical and operating quality and effectiveness.
Crawford: We’ve matured our model of innovation, ideation, investments, and then yielding corporate venture capital initiatives. This has involved a cross functional team of executives, including outside expertise, to develop and institutionalize that practice to invest in new vertical business opportunities.
The future of the CFO role was summed up by Bill Fuessler, “In our digital world, the CFO is acting much like a ‘Chief Analytics Officer.’ They are best positioned to integrate all data sources – both internal and external - and to shape the metrics and economic forecasting models needed to uncover new revenue sources.”
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5377ad563c569257fd0330043fabc560
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https://www.forbes.com/sites/robertreiss/2016/11/28/top-coos-in-hospitality-and-hospitals-discuss-our-digital-future/
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Top COOs In Hospitality And Hospitals Discuss Our Digital Future
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Top COOs In Hospitality And Hospitals Discuss Our Digital Future
At the core of the word hospitality is the word hospital. This is the first of a two part series exploring how leaders in both related industries view the digital revolution and its impact on operations. On October 24, 2016 I moderated a discussion with these industry leaders:
Jolyon Bulley, COO, InterContinental Hotels Group (IHG) – the Americas, a top hotel system with 5,000 hotels and more than 750,000 rooms across 12 brands.
Bill Peacock, COO, Cleveland Clinic, a leading global healthcare system delivering 5.1 million patient visits a year by 49,000 associates, including many of the world’s top-rated physicians.
Dr. Kevin Churchwell, COO, Boston Children’s Hospital, founded in 1869 and cited as by U.S. News & World Report perennially as America’s #1 Children’s hospital.
Robert Reiss: What excites you most about our digital future?
Bill Peacock: The ability to cultivate mass amounts of data to zero in on cures and new techniques to enhance the speed of healing.
Jolyon Bulley: The capacity to view social listening as a great insight provider, the strengthening of direct booking channels into our hotels, and using our loyalty program as a channel for us to strengthen our brands and our owners’ returns.
Kevin Churchwell: The needs of our patients and our families are always at the center of everything we do, and our digital future promises new ways to bring new therapies to the bedside; innovative new methods of impacting and changing children’s lives.
Reiss: What is your greatest fear with our digital future?
Bulley: The digital and mobile world creating a more direct and instant, but potentially less personal service to our guests.
Churchwell: The worst possibility would be lacking capital to invest in that innovation that will change a child’s life—to have the knowledge and commitment to make a difference, but not the finances.
Peacock: We must never forget the human connection between caregiver and patient, which for generations has been an important part of the experiential element.
Reiss: How are data and analytics changing your business model?
Churchwell: Operationally we are developing predictive models to enhance capacity. Based on analysis of types of patients, what’s happened in the past and how it will affect our bed situation, we can know in advance who will be admitted and when we will reach 90% occupancy. We have invested in clinical programs where we track outcomes for treatments of problems that don’t have an answer. We also track how patients and families are hearing about us, which is increasingly through social media—families are creating their own groups for particular illnesses and they’re communicating about it.
Bulley: We’re using advanced analytics with our customers where we have more than 99 million members in our IHG Rewards Club program, which is the largest loyalty club program in the hospitality industry. Our IHG Rewards Club program is all built upon a platform of earn, redeem, save, and recognition for our customers. This year we launched “Your Rate by IHG Rewards Club” which gives our loyalty customers a discount against any other published rate that may be available online. We also provide special services when they come to our hotels like access to state-of-the-art Wi-Fi and Internet through our IHG Connect Program, which is made available free of charge to our IHG Rewards Club members.
Peacock: In the decade I’ve served at the Clinic I’ve watched our use of data migrate from simple financial tracking, to productivity analysis, to supply chain and logistics oversight. Along the way we’ve integrated those systems with our electronic health record to develop care protocols and drive out variation in how we manage certain cases. To date we’ve developed over 100 of these “care paths” and are aggressively pursuing an additional 40. Nearly 15 of them are enabled with data we can mine from our electronic health record. The learning from this experience is immense. The dialogue the data generates between physician colleagues of like specialties build on the practice of medicine and causes us to have some deep conversations about why we approach cases differently. In the intensive care environment data developed in our “EHospital” allows us to provide and monitor all ICU beds in our system with an additional layer of oversight – dramatically increasing the quality of care and safe conduct of care to our patients.
Al Morales, IBM's Global Business Services Healthcare Leader, summed up the future of how digital will impact these two closely related industries, “Whether in the healthcare or hospitality industry, a positive experience really sets the tone and pace for the patient or consumer and is ultimately what attracts new business.”
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d5e5588df1953b7dddc0983f99377946
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https://www.forbes.com/sites/robertreiss/2016/12/19/embrace-cannibalization-to-succeed-in-digital-and-other-important-quotes-from-leaders/
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'Embrace Cannibalization' To Succeed In Digital, And Other Important Insights From Leaders
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'Embrace Cannibalization' To Succeed In Digital, And Other Important Insights From Leaders
On November 15, 2016 I attended what I define as a truly important conference entitled, “Unleashing Your Personal Next: Personal Transformation for Sustainable Success.” Here are some insights from the speakers on how to succeed in our digital world:
Tyler Wry, Management Development Professor, Wharton
Sree Sreenivasan, Chief Digital Officer, New York City
Ganesh Ayyar, CEO, Mphasis
Mark Casady, CEO, LPL Financial
Jose Tolosa, COO, Viacom International Media Networks
Joe Ripp, Executive Chairman, Time Inc.
David Clark, President, The Weather Channel
Tyler Wry: “You have to have more than just a strategy to deal with digital. Digital is not something you do once and then stop. You need to be able to develop competencies inside your organization to change on an ongoing basis. Digital transformation is rooted in culture, it’s rooted in leadership and it will require structural changes in your organization.”
Sree Sreenivasan: "It really makes a difference when the CEO, or the top of the company chain, cares about change. You have to make sure you pick and choose the right influencers — not everyone can change, nor should they change — right away.”
Mark Casady: “I go through digital transformation regularly. The world is full of interesting ideas and people.” Every year for the past 15 years, he thinks about what he wants to learn and goes after that knowledge wherever it resides. LPL’s digital transformation mantra became, “Let’s go from command to cooperation.” But change took time and capital; it also resulted in the replacement of 80% of the management team.
Ganesh Ayyar: “I cannot be a has-been CEO,” he said. “I cannot lead this company, which is a fantastic company, to success if I don’t change.” One of toughest things to overcome was the aversion to failure. “The fear of failure was very high,” Ayyar said. “That prevented me from creating a culture that embraces experimentation, which embraces empowerment.”
Jose Tolosa became COO of Viacom International Media Networks at the time when viewership moved to content on mobile devices anywhere/anytime from an analog world of television viewing at scheduled times. To encourage innovation and become nimble, Viacom holds competitions every year and backs winning ideas that disrupt and transform the company.
Joe Ripp, Executive Chairman of Time Inc., returned to the company after nearly a decade, he saw a proud and entrenched corporate culture rooted in print publications that needed to adapt to the digital age. “Everyone said to me, ‘You can’t change that. The culture is way too strong. I am a strong believer that Culture trumps strategy every day of the week.”
“Sometimes your culture can hold you back because you’re clinging to traditions. The only true thing about today is whatever traditions you have now, five years from now they will be totally different because the pace of change is moving so quickly,” Ripp added. “You have to look forward and make sure you’ve got people excited about change, excited about the future, excited about the vision.”
David Clark, president of The Weather Channel, the goal was to transform the network into a “Big Data company with a number of publishing platforms on top,” Clark said. “It was a very utilitarian brand, but we wanted some soul to it.” To guide The Weather Channel through this transition, Clark had to change his mental models. To understand the target audience of weather enthusiasts, he sat down with meteorologists to perceive why they love weather so much. What’s the big deal? Their answer: “Don’t you get it? It’s amazing out there.” Clark said, “That became our rallying cry.”
Ganesh Ayyar, CEO Mphasis summed up the meeting saying, “One of the factors that I believe is the biggest obstacle to transformation is the fear of cannibalization. If you don’t embrace cannibalization -- for all the good talk that we have of the CEO transformation, self-transformation, organizational transformation, a new set of strategies, new culture -- you will stop in your tracks and you will not progress.
We have read so many case studies where iconic companies have fallen by the wayside, and the challenges they were confronted with was the fear of cannibalization and not embracing cannibalization. Something that has been giving you revenue and profit suddenly is vanishing, and something new is emerging. You are afraid to embrace new simply because you will cannibalize your existing revenue and profit, as a result you don’t change, and you are hanging on to this, hoping that this shall pass. It doesn’t pass and the company dies. So if we double up this ability to handle cannibalization, I think that will help tremendously in transforming the company.”
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a6d58694276de3928b7db0ebb4c60e7e
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https://www.forbes.com/sites/robertreiss/2017/01/10/12-game-changing-practices-that-fast-track-success-cite-top-ceos/
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12 Game Changing Practices That Fast-Track Success, According To Top CEOs
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12 Game Changing Practices That Fast-Track Success, According To Top CEOs
In my quest of uncovering what it takes to build a great company I’ve had the privilege of interviewing 750 top CEOs. I’ve recognized that many CEOs learn their best leadership insights directly from other CEOs. So for this article I asked four of the great leaders of our time to explain their most important leadership philosophies. While they shared many, many ideas, I thought the 12 below quotes had potential to be game changers for CEOs and executives seeking to fast-track success:
Craig Benson – Founding CEO Cabletron Systems, former New Hampshire Governor
Ted Leonsis - Owner & CEO, Monumental Sports & Entertainment
Scott McNealy - Cofounder and 22 year CEO, Sun Microsystems
Haywood Talcove - CEO, Government, LexisNexis Risk Solutions
Ted Leonsis: Major in the majors. "Leaders must know what are the most important things and focus deeply on those. As a leader, I worry about really, really big things and really, really small things and leave everything else to the organization. For example, I like to walk around the arena before every game for 30 minutes. It keeps me in touch with my employees and it also sends the message that little things matter, like if the ketchup is low, that is a small thing, but it is important to a fan’s overall experience."
Craig Benson: Stand up meetings. "You can’t waste time. It’s the only asset you have and you can’t get more of it. I’ve found meetings if done incorrectly can be a huge waste of time. So I do stand up meetings. I don’t want more than about 15 people and we go around the group and each sums up where they are, what their biggest problems are and if they need help. We start at 8 a.m., and if someone arrives at 8:01 a.m. they can’t get in. Consequently people arrive early, and the meetings and relationships they have with each other before the meeting is often as important as the meeting itself. I had some government employees who had never met each other before so this helped. Everyone standing both energizes people and makes them want a quicker meeting."
Scott McNealy: Dunk leaders under the water. "You don’t develop leaders you only identify them. You can’t make someone a leader if they’re not one. I have found the best way to take leaders down the wisdom curve is by putting them in a new job and uncomfortable position, which I call dunking them under the water. Good leaders will find a way to succeed. With good leaders you dunk them under the water again and they become way wiser sooner. They might initially hate the dunk under water, but they look back and love the experience. They create significant business successes, while growing tremendously and quickly as true leaders."
Haywood Talcove: Randomness. "I want unpredictability and I learn a great deal from random encounters. So I will FaceTime customers and salespeople. I will show up at a site or a customer meeting. If I want success, I want to manage them, I don’t want them to manage me. Also, my belief is great leaders make themselves available to the market. Anyone can find their email or phone number. The worst thing a leader can do is to hide behind hierarchy – that just creates blind spots."
Benson: Ban organizational charts. "From day one at Cabletron I banned organizational charts. Org charts kill culture. The biggest thing in both business and government is culture. And culture has different advantages in business and in government. Business is better at getting things done quicker. Government is better at process, and what most people hate change and the process makes people feel more comfortable in change."
McNealy: Rule of 11. "Flat organizations are best. At every level of the organization structure you lose 20% of the message, so if you have five levels the worker bees have none of the correct information. A problem is everyone wants to be promoted to be a manager not doer, yet I believe too many managers are the real problem of an organization. When a manager manages only six people, they will tend to micromanage and also if someone wants to quit they can hold their manager hostage. I’ve found what’s best for an organization is what I call the ‘rule of 11’ which means each manager manages 11 people. And having 11 reports has the additional benefit of elevating someone from being a manager to a leader, and organizationally with the ‘rule of 11’ you have only the best managers."
Talcove. Be a simplifier. "I am a simplifier. Customers and your team need to simply understand value. We start with organizational accountability so everyone knows their job and understands what good looks like. Everyone must know their strategy and completely our ‘3 big rocks’ – which are our key focuses. Another way of keeping things simple is by having internal promotions, which simplifies career paths and organizational success. Frankly, an organization who that takes too many outsiders takes the wind out of the sails for the team."
Leonsis: Select the right business model. "Most professional sports teams don’t realize they are in the SaaS (software as service) business, but I recognized early that we are in a business built on long-term contracts with highly credible clients. For example, we have naming rights that last decades, long-term sponsorship deals, corporate suites and season ticket holders. When Steve Ballmer bought Clippers for $2 billion which is 10x multiple, he understood the power of long term deals with slight annual increases. So using the SaaS model has helped us redefine both our revenue as well as our multiplier."
Talcove: Reinvent legacy markets. "Great leaders are about market creation. This means adding value to the end user they didn’t initially see. I define market creation as new innovative solutions that didn’t previously exist that rearrange the competitive ecosystems, providing an advantage that is difficulty to replicate. The key to do this is to have a role like engineer or market development team who understands the market needs and gaps. That person who heads it up must be a free thinker – don’t have a corporate person. They should share their insights with a team because teams make better decisions."
Benson: Be in the game. "We started Cabletron because we saw a market need. Challenges and opportunities arose that we never could have imagined. When you start a business you’re in the game and you have to be in the game to see how it changes."
Leonsis: Separate the signal from the noise. "One more thought is, I separate the signal from noise in everything I do and focus on outcomes instead of processes. I only respond to the emails where my response is impactful and helpful and I prioritize meetings that are focused on an outcome and not just a status update. If I paid attention to the noise it would distract me from making any meaningful decisions on the things that really matter or where my attention is required and as a team owner, my main goal is to make life long memories for our fans."
McNealy: Sharing. "Everything we did to build the incredible culture and success at Sun Microsystems was based on the concept of sharing. We gave out stock options up and down the organization and we worked with distributors so they grew and profited with us. We broke all types of records for community service. Businesswise we pioneered open networking so all computers could share files. We created Java. We open sourced our processors and everything to change the world – a lot of people used our tech and even competed with us, but we did just fine and we all felt great about what we accomplished…and most Sun employees will say it was the best place they ever worked."
If anyone has a 13th game changing business practice, would love to hear it.
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ea7b8051cd7c19205f41edf5594d4454
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https://www.forbes.com/sites/robertreiss/2019/07/30/emblemhealth-ceo-karen-ignagni-shares-vision-for-healthcare/?sh=5ccbe5b84d2d
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EmblemHealth CEO Karen Ignagni Shares Vision For Healthcare
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EmblemHealth CEO Karen Ignagni Shares Vision For Healthcare
Karen Ignagni, CEO of the three-million-member EmblemHealth insurance and wellness company, has a vision for the future of healthcare in this country, and she is bringing that future to her own organization now.
Recognized as one of the most powerful people in healthcare from her work on employee benefits for large unions, representing the large AHIP trade association of insurance companies, and consulting with the federal government to reform healthcare, Ignagni told me during a recent interview for The CEO Show that she sees the future of healthcare this way: technology is going to facilitate care that is more personalized; care for mental health and physical health will come together; and the population will have more support outside of hospitals to keep themselves healthy.
Karen Ignagni EmblemHealth CEO and Robert Reiss Greg Reilly
Ignagni began the transformation of EmblemHealth, one of the nation’s largest non-profit health insurers, when she joined the New York City-based group in 2015. In the past year alone Ignagni and her team have launched two incubator initiatives that put EmblemHealth at the forefront of innovating for the future.
Curated data
One of the incubator partnerships is HealthReveal, a start-up that aggregates and curates the latest in medical research and data-driven best practices to serve as a powerful tool for EmblemHealth’s partner, AdvantageCare Physicians (ACPNY), one of New York's largest primary and specialty care practices. She said it is impossible for any doctor to keep up on all new research and clinical applications in real time.
HealthReveal utilizes artificial intelligence to analyze a patient's medical data, supporting clinicians in applying the latest clinical evidence and medical guidelines to the treatment of chronic disease before potentially catastrophic complications occur. Ignagni said the emphasis on proactive care is aligned with a coordinated approach for general population health and reflects ACPNY’s commitment to putting evidence-based care into practice, delivering enhanced results and controlling costs.
Support in community
Another of EmblemHealth’s incubator partnerships is with Cityblock Health, a start-up addressing the medical, behavioral and social needs of low-income neighborhoods through highly personalized, integrated and coordinated care. This demonstrates what Ignagni said about mental and physical healthcare coming together.
Cityblock works through non-hospital physician centers out in the communities and offers information and support intended to help people stay healthy and avoid emergency rooms.
With Cityblock, EmblemHealth’s Neighborhood Care centers are tackling what Ignagni calls “the social determinants of health” head-on – making sure the communities’ most vulnerable citizens have access to transportation, housing, nutritious food, and all the other building blocks that help them to stay healthy.
Cost containment
During our interview Ignagni also talked about the need for healthcare cost containment in this country. “To maintain the promise of access (to healthcare) we need to deal with the cost, or we won’t be able to sustain the vision of that promise,” she said.
She refers to the very difficult problem as “the Gordian Knot” because “one person’s cost containment is another person’s revenue reduction.”
The private sector, including the pharmaceutical companies, and the public sector both need “to step up” to keep the promise of healthcare sustainable.
To listen to the interview with Karen and other CEOs go to The CEO Forum Group
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fed308cb7f924def0c9b2a79b0f23e98
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https://www.forbes.com/sites/robertreiss/2020/07/01/cdc-director-dr-robert-redfield-ceos-can-have-enormous-impact-in-covid-19-fight/?sh=391915761b4f
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CDC Director Dr. Robert Redfield: CEOs Can Have Enormous Impact In COVID-19 Fight
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CDC Director Dr. Robert Redfield: CEOs Can Have Enormous Impact In COVID-19 Fight
CDC Director Dr. Robert Redfield is calling on CEOs across the country to have a flu vaccine program for their employees in place for September and October, and he says it is the innovation in the private sector — not the government — that gives him confidence that the country will find a Covid-19 vaccine in the near term.
The top official at the Centers for Disease Control and Prevention, the federal government’s public health institute, made those statements and offered other direct advice for U.S. corporate leaders contending with Covid-19 last week when I interviewed him for The CEO Show. The CDC’s job, he said, is to “keep America safe 24/7 using science and data, and to translate that into meaningful public health action and policy.”
“We want people to really encourage embracing the flu vaccine with confidence this year,” Redfield said, “because in November, December, January we’re going to have Covid again, I am pretty confident of that, and unfortunately we’re going to have flu at the same time.”
WASHINGTON, DC - JUNE 30: U.S. Centers for Disease Control and Prevention Director Dr. Robert ... [+] Redfield testifies at a hearing of the Senate Health, Education, Labor and Pensions Committee on June 30, 2020 in Washington, DC. The committee is examining efforts to contain the Covid-19 pandemic while putting people back to work and kids back in school. (Photo by Kevin Dietsch-Pool/Getty Images) Getty Images
“I tell you, this is the year to have proactive flu vaccine programs,” Redfield told my radio audience. “The private sector and CEOs can take a concrete step, play a big role in setting the example and have an enormous impact.”
“The more we can prevent flu from causing hospitalizations, the more we can prevent people with flu from filling up our ICUs, the more probability that there is going to be a hospital bed for people with Covid.”
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In the last decade 360,000 people died of the flu, and more than half of Americans annually do not get the flu vaccine, he said.
Innovation and vaccine
Even as Redfield expects Covid-19 to be present this fall he is also optimistic about the chance for a vaccine to become available soon, at least in limited supply. “It is highly likely that we will have a coronavirus vaccine deployed this fall thanks to the innovation in the private sector,” he said.
“If you had asked me in February I would have told you it’s highly unlikely that we would have a vaccine until the end of Year 2 or beginning of Year 3 of confronting this.”
He credited leadership by the President, who is pushing a public-private partnership to accelerate development of a vaccine, and Redfield said, ”Now if you ask me, I think it is highly likely that we will have a vaccine deployed this fall. It won't be deployed to everybody …. But will have a series of vaccines that will be available and prioritized for the vulnerable and first responders.”
Workers with no symptoms
Redfield, who rose to the rank of colonel during 20 years of service in The U.S. Army Medical Corps, spoke in direct terms about what U.S. corporate leaders can know and do as the economy reopens, while “the greatest public health crisis that has confronted our nation in more than 100 years” continues to cause hospitalizations and deaths.
For example, Director Redfield said, “We now know that for individuals that are otherwise healthy, under the age of 50, this virus is pretty benign..” He said the real challenge is people with chronic conditions - diabetes, hypertension, kidney disease, obesity. For them “this virus can be quite severe and cause mortality.”
He said it is most important to know that, unlike the flu, this virus can be spread by people who have no symptoms at all.
Normally business leaders can say if you aren’t feeling well stay home, and that will work for flu. With the coronavirus, he said, a significant number of people are infected but have no symptoms so there is quite a bit of non-symptomatic transmission.
“Clearly asymptomatic transmission is a critical, critical factor in driving this outbreak,” Redfield said.
Know your workforce
On top of having all of this information, CEOs should know their workforce, Redfield said. Some types of employees are less likely to be given the chance to telework. Some have living conditions that are more difficult to not co-congregate. Some don’t have the luxury to drive their own car to work …
“Individuals that are high risk with mortality and morbidity may need to be handled in a different way than individuals that are young and healthy,” the director said.
Data, vigilance, three weapons
CEOs can use the CDC’s information about the activity of the coronavirus, which tracks cases down to the county level, for the purpose of setting corporate vigilance standards for social distancing, face coverings and hand-washing.
Redfield is clear about the ability to fight the enemy with these three responses.
“We are not defenseless,” he said. “We have the powerful weapon of social distancing. This virus has a huge weakness: it has to go from infected human to non-infected human. The reality is it is threatened by distance. It has a hard time traveling over six feet.”
Another weapon, he said, is cloth face coverings. Simple homemade face coverings can interfere with the spreading of droplets and will reduce the risk of transmission “substantially.”
The other response activity that is easy and highly effective against the novel coronavirus is washing your hands, Redfield reminded the audience.
Redfield said he favored businesses reopening “in a smart way.”
Regarding the workplace, he said, “Some things have changed and will need to change. The favorite activity of going to the lunchroom or lunch buffet … with 20 people sitting together independent of knowing who may be vulnerable … those types of things will need to be modified.”
“Never underestimate the possible.”
On the questions of stopping Covid-19 and his personal leadership philosophy, Dr. Redfield said, “I have no question that we’re going to get through this and leave this chapter of coronavirus behind us.”
“Never underestimate the possible,” he said twice. “Don’t sell ourselves short. Think big. Recognize the things that have plagued this nation forever, like health inequity, health disparities; don’t buy into the idea that there isn't a lot we can do …. Ending the AIDS epidemic in America … it’s possible. Getting coronavirus behind us in the next 12 to 24 months, it's possible … Impacting health equity and health disparity in this nation, it’s possible.”
He explained that when he was an AIDS doctor his patients lived less than a year and today they live a natural lifetime. The breakthrough in fighting AIDS was not caused by him, he said, “it was caused by the innovation in the private sector to see the possible.”
“It’s all driven by the enormous capacity of the private sector to innovate,” Director Redfield said. “Never underestimate it.”
To listen to this and other commercial-free CEO interviews go to The CEO Forum Group
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2c6ee41b39833f86f71264aec6de8de9
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https://www.forbes.com/sites/robertreiss/2021/03/04/unicorn-founders-blake-johnson-and-scott-cohen-took-no-venture-capital-sold-byte-in-two-years-for-over-a-billion-dollars/
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Unicorn Founders Blake Johnson And Scott Cohen, Took No Venture Capital, Sold Byte In Two Years For Over A Billion Dollars
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Unicorn Founders Blake Johnson And Scott Cohen, Took No Venture Capital, Sold Byte In Two Years For Over A Billion Dollars
DTC Startup Beat Out Industry Giants
The past several years have been marked by a handful of brands going from zero dollars to a billion dollar valuation. The one thing almost all of them have had in common? Venture capital investors with deep pockets, multiple rounds of fund raising and dilution, over the course of five plus years of growth. But the first announced Unicorn buyout of 2021 changed all that when Byte, a direct-to-consumer, at-home invisible teeth aligner company sold to Dentsply Sirona (Nasdaq: XRAY) in an all-cash deal valued at $1.04 billion without having taken a single dollar of venture capital investment.
Repeat entrepreneurs Scott Cohen and Blake Johnson built this unicorn in record time in what some have called one of the greatest direct-to-consumer success stories of the century. Founded in 2017, Byte launched its products at the start of 2019, and they inked the billion-dollar all-cash deal with Dentsply less than two years later.
Scott Cohen, left, and Blake Johnson, right, with Los Angeles first responders. Gail Gitcho
When researching the teeth aligner industry, Cohen and Johnson have shared that they saw an opening in a crowded space to create a differentiated direct-to-consumer experience coupled with a powerful B2B offering. And that’s how Byte was born.
Their goal was to become a global brand, helping people all over the world regain their smile and their confidence and provide disenfranchised communities with access to oral care. With the recent buyout, that’s exactly what Cohen and Johnson accomplished, and all that without a dime of venture capital. Not only did Byte succeed without it, but they took on industry giants Invisalign and SmileDirectClub in the process. Their differentiator? Byte’s been mission-driven and profitable from the start, focused on improving accessibility and putting the customer first.
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Byte saw explosive company growth last year, while seeing a 50% decrease in their cost to acquire customers. Their customer-centered growth strategy kept them from experiencing the sort of backfire others like SmileDirectClub have seen when taking more of a “growth at all costs” approach. In fact, when the COVID-19 pandemic hit, Byte invested in their employees to keep up with their fast-growing customer base, with their team growing from 100 employees in January 2020 to nearly 500 by October 2020.
Cohen and Johnson promised their employees and customers they would sacrifice neither the consumer experience nor profitability as they grew the business. Having kept their promise, they earned the trust of consumers evidenced by their overwhelmingly positive customer reviews, a response that is unprecedented in the dental services industry.
It's not just customer access to the product that Byte focused on. They’ve also set forth a mission to increase accessibility to those in need. Through their ByteCares program, the philanthropic arm that Cohen and Johnson founded, Byte set out to improve 10,000 smiles, and during the pandemic they expanded that program, providing services for communities in need and manufacturing face shields and ventilator parts. They even went so far as to open up their national network of dental professionals to anyone in need of teledentistry services, free of charge. Cohen and Johnson said they would invest more in teledentistry and increasing their work with the dental industry to continue bridging the gap between underserved communities and oral care professionals.
Under the new ownership, the existing management team and CEO Neeraj Gunsager will continue to operate Byte.
As for Cohen and Johnson, we’ll be curious to see what is next for them.
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61a47d878a36f23c4be5d64e47bb5c54
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https://www.forbes.com/sites/robertreiss/2021/03/28/predictions-from-top-residential-real-estate-authority-dottie-herman-ceo-douglas-elliman/?sh=33badf6454fe
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Predictions From Top Residential Real Estate Authority Dottie Herman, CEO Douglas Elliman
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Predictions From Top Residential Real Estate Authority Dottie Herman, CEO Douglas Elliman
As we try to sort out the aftermath of the pandemic and determine the future, I was thinking about a sector that impacts not just our pocketbook, but where we live: residential real estate. So I connected with top residential real estate authority Dottie Herman and asked her about the future of many markets, with a special focus on the nation’s largest real estate market, New York City.
Robert Reiss: What are your predictions for 2025 in some of the major residential real estate markets?
Dottie Herman: No-one can predict the future. Small cities are set to boom in the next five years, while major cities will continue to come off record low prices as a result of the COVID pandemic. Urban markets may see a youth renaissance as they are drawn in by improved affordability through weaker rental rates that began during COVID. Sale and prices may continue to rise for the next several years because the economy is expected to show robust growth.
Dallas, TX: Growth: 25% to 30% Denver, CO: Growth: 25% to 30% Miami Beach, FL: Growth: 12% to 15% New York City: Growth: 10% to 15% San Francisco: Growth: 10% to 15% Atlanta, GA: Growth: 5% to 7% Chicago, IL: Growth: 5% to 7%
Reiss: How did the pandemic impact real estate?
Dottie Herman, CEO, Douglas Elliman, residential real estate authority - interviewed by Robert ... [+] Reiss, CEO, The CEO Forum Group © Dale May - All Rights Reserved
Herman: The pandemic did not change that people need a place to live, what it did change, is that people do not need to be in the office every day, which severely impacted the commercial real estate. Although they are both real estates, residential is doing well, given that people are working from home. Post pandemic, people will continue to work from home, resulting in a decline in commercial real estate. As a result, developers and owners could potentially repurpose space to residential.
Reiss: As you look ahead, what predictions can you make on the long-term impact of COVID on residential real estate?
Herman: A home was always important to people, but people come and go. During the COVID pandemic, the home became even more important to them and this trend will continue. When it comes to life after COVID, people will have a stronger emphasis on health and wellness. Buyers and renters will continue to prefer amenities that contribute to their overall wellbeing. Trends that will continue post pandemic, which including working from home and the office, larger apartments with outdoor space, home offices and multipurpose space will be in demand.
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Reiss: How specifically has the pandemic impacted the New York City real estate market?
Herman: New York City is the most expensive housing markets in the country and was the epic center of COVID-19 and virtually shut down in March 2020. In the beginning of the pandemic, the real estate market came to a complete halt. Most people took their homes off the market, being that they could only be shown virtually. At those point, prices dropped, rental vacancies rose, and inventory diminished. Fast forward to September 2020, activity rose, reaching pre-pandemic levels. Inventory opened up creating an opportunity for those that were previously priced out of the market.
Throughout history, New York City has been one of the best long-term real estate investments in the country. People that purchased during the pandemic were able to purchase when both prices and interest rates were at all-time lows. While New York City was the epicenter of the virus, people that believed in the overall recovery of New York City, will be the biggest winners of the pandemic. New York City showed that lower prices presented an opportunity for the real estate savvy and those who were previously priced out. New York City be back to the city it always was.
Reiss: You say New York City will be a stronger market with 10-15% growth by 2025, what do people need to know about the New York City market?
Ten years ago, New York City was rated the second-best city in the world and the first best city in the United States. Five years from now, I believe New York City will be number one in both categories; it will be the number one city in the world! Moving forward New York City will be a younger multigenerational with a healthy diverse mix of people and a multigenerational workforce.
To listen to an interview with Dottie Herman, pre-pandemic go to:
The CEO ForumRadio: Dottie Herman, Douglas Elliman CEO shares how building relationships is the key building a real estate leader
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9f99829543542142d640eaead994a976
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https://www.forbes.com/sites/robertrosenkranz/2015/06/09/beware-the-lucky-monkeys-how-to-pick-investment-managers/
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Beware The Lucky Monkeys (How To Pick Investment Managers)
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Beware The Lucky Monkeys (How To Pick Investment Managers)
On every mutual fund advertisement touting its track record is language mandated by the SEC to the effect that past performance does not guarantee future results. And the SEC is right; indeed there is little evidence in mutual fund performance statistics that past results have any predictive value at all.
But why is this the case? In almost every other field of human activity past performance does predict the future. A great violinist today is likely to be great tomorrow; similarly a heart surgeon, or a basketball player. Why is investment management one of the few spheres where yesterday doesn’t predict tomorrow? Answering this question is central to picking investment managers and strategies, so let me share some ideas.
Lucky monkeys. If 1000 monkeys pick stocks by throwing darts at a stock table, 500 of them will do better than average in a year. 250 will outperform 2 years in a row; 125 will outperform 3 years….and so on until you have 30 monkeys with great 5 year track records. Quite a few of those lucky monkeys will be showing up in your office, running billion dollar hedge funds and encouraging you to invest. So the problem becomes: how to do you distinguish luck from skill in an investment track record?
How do you distinguish luck from skill in an investment manager? Copyright: Everett Collection
The first thing we would do is determine if the track record could have been created with one or two simple ideas: e.g. buy value stocks, or growth stocks, or small cap stocks, or financials, or technology. This is easier said than done, and requires access to the return patterns of numerous indices and some familiarity with statistical techniques. At one time or another, any one of those ideas might have had a big payoff over a multi-year period. Most of the equity hedge funds that we have looked at have track records that can be replicated with some simple combination of long value, short growth or long small cap, short large cap. Getting a big idea right can reflect skill, but it could also be the music world equivalent of the one hit wonder—a matter of pure luck. The same could be said about getting two or three big things right in succession.
Too big to succeed. Suppose the manager has gotten a lot of small things right, say picking dozens of winning stocks and shorting losers, all with disparate characteristics and no simple unifying theme. That sort of record is much more likely to reflect real skill. If the manager combines a strong track record, demonstrable skill, and decent presentation skills, he is apt to attract a lot of money from investors. Which raises another concern: is his skill scalable? Will an approach that worked for a smaller sum, be sustainable on a larger one? On this, a backwards look is helpful: we try to analyze if the past performance could have been replicated on today’s asset base.
Suppose, for example, a manager had a great year 5 years ago, when he was running one tenth as much money he does today. If most of his or her winning positions could have been 10 times larger, that is a green light. But if positions that large would have represented a big percentage of the issuers shares outstanding, or many days of trading volume, that spells caution.
If the track record involves very active trading, one needs to analyze if, at his current size, his own purchases and sales would have moved the market significantly, or if his positions would have been virtually illiquid in stressful times. If that’s what the analysis shows, the yellow light is flashing caution.
All in the timing. Some investment strategies amount to selling insurance against unlikely events.
As an example, just as houses don’t often burn down, corporations don’t often default on their bonds. Investments in “junk bonds,” however they are leveraged or hedged, have that trait. Most of the time they will offer better returns; and at certain times in a credit cycle very impressive returns as the market psychology moves from fear to greed. And, of course, there will be the occasional default—simply a part of the game which will be offset by the results of the rest of the portfolio.
An investment track record shouldn't be ignored: it just shouldn’t be the only thing considered.... [+] Copyright: Everett Collection
But the house analogy is a good one: most of the time when my house burns down it is an independent event, and doesn’t affect the chance of yours’ catching fire. But sometimes, my house burns down in a forest fire that engulfs yours and dozens of others at the same time.
Similarly, when a corporation defaults on its bond, it might not reflect just circumstances specific to that company. The default might be driven by a credit collapse where few borrowers are able to refinance in the ordinary course or an economic collapse where few are able to maintain profitability sufficient to service their debts. This is a classic field in which looking backwards will get you in trouble: long periods of good performance leave bond prices high, spreads to better investments squeezed tight, and create an environment where bonds can come to market with a diminished margin of safety and weak legal protections.
But when recent performance looks terrible, that is often a time of golden opportunity, where bonds can be purchased with very rich yields and at prices that offer plenty of upside. When investing in this kind of strategy, looking at an impressive track record is like driving a Ferrari with your eyes glued to the rear view mirror: you are apt to have a lot of accidents.
This is not meant to suggest that investment track records should be ignored: indeed it’s the very first thing you might consider in a quest for skilled managers. It just shouldn’t be the only thing.
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0908a03825648d5919e04b82bb881d56
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https://www.forbes.com/sites/robertsher/2016/03/30/sink-or-swim-how-not-to-groom-future-leaders/
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Sink Or Swim: How Not To Groom Future Leaders
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Sink Or Swim: How Not To Groom Future Leaders
Forcing up-and-coming leaders to sink or swim in the pool of real experience is one way to develop future executive team members. It’s also a sure-fire method to drown some managers who have real potential. There are far better ways to develop managers than by foisting a big and unfamiliar organizational problem on them. One of those ways is investing in executive education taught by top-tier professors. That was the lesson that John De Santis learned early in his career, one that has given him crucial skills for leading a cloud software security firm (HyTrust Inc.) to double its revenue every year since 2013.
But let’s be honest: CEOs of many midsized companies admire smart young managers who are eager to learn the hard way. How couldn’t they be awed by the stereotypical whiz who is handed a seemingly impossible task and solves it through endless Google searches, late-night calls with old college friends, and other brute-force learning techniques. We admire people who are willing to struggle, even mightily, to solve problems with which they have no familiarity.
Image licensed from BigStockPhoto
But smarts and stamina are never substitutes for experience and structured education. As people rise in their careers, experience is crucial in making the right judgment calls. Without the benefit of experience, they often solve problems in a way that causes new problems. Sometimes they are too directive with their team when they need to take a coaching approach or they re-invent planning systems rather than taking one off the shelf that has worked for years in thousands of other companies.
That’s what De Santis discovered many years ago as a young manager at a rapidly growing company in the then nascent IT technology sector in the mid-80s.
Gallery: How To Be A Better Leader: Four Essential Tips 5 images View gallery
Early in his career, he was a product manager at Data Switch Corporation, excelling at spurring action on new products and market opportunities by reaching across functional lines using his force of personality, understanding of the marketplace and ability to persuade. All great qualities in a leader. The problem was that he didn’t understand enough about business fundamentals and was persuading his peers to take actions that resulted in unanticipated nasty side effects. Actions like pricing inappropriately, running sales promotions without measuring outcomes or rapidly changing out supply chain partners, thus wasting inventory that had just been purchased.
Forcing up-and-coming leaders to wade through problems without professional development is especially costly in midsized companies. There aren’t legions of executives and specialists to review and approve decisions. Even the CEO may not have formal business or leadership training—particularly if they were an entrepreneur or a professional who rose through the ranks. And in our experience as advisors to the leaders of midsized companies, they rarely budget for professional development the way big companies do.
Because the costs of a sink-or-swim approach are hard to measure, many companies just tread water—at subpar growth rates and with subpar profits.
Others promote their best leaders too quickly, then dismiss them when they falter, believing they “Peter principled” them, then replace them from the outside. (The Peter Principle is a concept formulated by Laurence J. Peter in which a manager is promoted to the level of their incompetence.) While I’m a big proponent of hiring outside leaders with fresh ideas and deep experience into any management team, it is expensive and risky.
Other midsized companies narrow the responsibilities of the hardworking but inexperienced executive in hopes that they’ll be more capable of “keeping up,” or ask their boss to manage them more closely (perhaps micro-manage them). Both of these choices waste the potential of the aspiring leader and are likely to result in leadership turnover.
Just as we upgrade our facilities and our computer servers, we must invest in upgrading selected high potential leaders by handing down know-how and experience through educational experiences like leadership training programs, peer groups, formal education, mentoring and more.
Years before De Santis took the CEO seat, his boss chose not to try to control or limit De Santis’ high energy and initiative, but instead to educate him, and sent him to an intensive course on the management of high tech companies held at Stanford University. De Santis says, “I came back a new man—a business man—with redoubled energy plus a host of frameworks for making better decisions. I still use many of those frameworks today. I am forever grateful to Bob Gilbertson, the CEO of Data Switch, and Richard Greene, the Chairman, who invested in me and changed the course of my career. I stayed there for another eight years and my work paid back their investment many fold.”
Leaders should plan the professional development programs for their leadership team systematically, thoughtfully and proactively. Here are some considerations about who to select for such investments and how to invest in upgrading your leadership team:
1. Start small. Pick just a few candidates if your headcount is under 150. Don’t try to start with a big “program.” It’s good to reap some benefits before you ratchet up the investment.
2. Choose candidates carefully. Candidates need to be eager to learn, and are most likely already learning on their own. If it feels like you’re “pushing training” to employees who would rather be at home, stop. You’ve picked the wrong candidates. They should be grateful, and know that the investment in their leadership development is a benefit and an honor.
3. Identify (in writing) the specific shortfall stemming from each candidate’s lack of know-how. Being clear on what the candidates must learn is crucial. While I’m not against paying for general education, to get a faster return, focus on problem solving.
4. Define ROI. The investment in a high-potential leader should have a clear ROI in the short term. For example, you might reason: This will make the candidate a better manager/leader so she can “increase efficiency of her team” or “reduce management turnover” or “bridge between two corporate silos.”
5. Plan a budget and timeline for the development activity, including detailing the start date, end date, and formal review periods. Does this sound like project management? Indeed.
6. Make no promises of promotion or rewards for completion. If candidates are “subjecting themselves” to this program in order to “get a bigger title and pay check,” then the attitude is wrong. The right reasons: The program will make them more effective in the business world. They’ll advance in their careers—at your company (if you treat them fairly) or at someone else’s. That’s the reward.
Having been the beneficiary of some employer-paid education, De Santis fosters leadership development within HyTrust, the firm he leads today. Since 2013, HyTrust has doubled in size each year, and the engineering function has had to add processes and oversight at much higher levels. As the engineering team grew dramatically larger, one high-performing engineering leader began facing management challenges. Sensing both eagerness and aptitude for professional development on the part of this engineering leader, De Santis retained a very experienced technical executive as a year-long mentor. The engineering leader was delighted, thankful, and actively collaborates with the mentor, and De Santis has seen remarkable results. The engineering foundation for continued scaling has leapt forward. Obstacles are anticipated and avoided, no longer merely reacted to. The planning horizon has lengthened, allowing for more efficient project execution and a stronger talent pool.
Employers often worry about not reaping the benefits of their investment: “What if the employee quits after the we’ve spent time and energy developing them?” That’s always a risk. But savvy employers work hard to align a career path at their firm with the desires of their employees. If this is done well, there should be little reason for employees to jump to another company.
Midsized companies have smaller pocketbooks, and often hesitate when they see the price tag involved in professional development programs. But at the increased scale of a midsized company, the cost of bad leadership and poor management adds up very quickly. In a tight labor market, replacing leaders who can’t step up is even more expensive.
Nothing drives corporate growth like great leadership. Yet we often leave our up-and-coming leaders to sink or swim, denying them the mentoring, training, education and guidance that would allow them to glide through the waves of the business world with confidence. CEOs must invest in their greatest assets: their high performing leaders.
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534fa9640e01ff48973c0b06da8f3190
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https://www.forbes.com/sites/robertsher/2020/01/14/how-midsize-companies-grow-their-own-talent-right-out-of-college/
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How Midsize Companies Grow Their Own Talent Right Out Of College
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How Midsize Companies Grow Their Own Talent Right Out Of College
As if hiring great talent—or any talent—wasn’t already hard enough, it just got harder. From an NFIB May 2019 survey, as reported by S&P Global Market Intelligence, “The percentage of firms hiring or trying to hire rose five points to 62%. However, a record-high of 25% firms cited the difficulty in searching for qualified workers as their "single most important business problem."
Running another ad simply won’t solve your problem. Read on for a solution that has been working for seven years for an architectural firm, in a market where there has been an acute shortage of qualified talent. It can work for you too.
If you’re like many companies, your leadership team is tapped out. They are cranking at full steam. They don’t have enough strong talent below them to delegate tasks. To grow, you need to create a pipeline of talent developing within your company. But how?
Best practices like posting jobs online, paying for referrals, hiring outside recruiters and attending job fairs have typically worked, but in this hyper-competitive environment, they are falling short. Companies are suffering from attrition at higher than usual rates, and those people must be replaced in addition to filling new positions. More and more candidates receive multiple offer letters.
If you’re serious about growth and in business for the long term, you must create a custom recruitment process to build an internal leadership pipeline. Commit to taking on interns every year from now on. Build a partnership with a school that turns out gifted graduates. Feed them into your accelerated leadership development program. Develop them, inculcate your company culture, then encourage them into management positions.
To grow, companies need to create a pipeline of talent that is continually developing within their ... [+] company. Getty
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Seven years ago, Michelle Mongeon Allen, CEO of JLG Architects, found the company in need of new leaders. At the time, they were a North Dakota-based firm aiming to expand geographically. They knew that in doing so, it was important to transplant their cultural DNA, but with just four closely held partners running the company, leadership capacity with limited.
And so JLG made the decision to cultivate leaders from within, creating a recruiting and training program aimed at new graduates called “JLGdna”, an acronym for Developing New Architects. Tapping their long-time relationship with North Dakota State University (NDSU), they started recruiting from the top of the school’s graduating class each year and then fast-tracking their development through JLGdna.
JLGdna was created with four primary development objectives for the new graduates:
Build in-depth knowledge of building technology and construction so that they can be better architects. Learn the JLG tools, processes and standards for project delivery. Develop strong peer relationships. Get professionally licensed faster than the national average.
Here are 5 key steps to creating a powerful college recruitment strategy:
1. Find a school that can produce great candidates for you (who may have leadership potential) and build an employer brand there, recruiting all the time.
When you are sure about the interns’ technical competence you can focus on what you really need: recruiting interns and recent graduates with management potential.
2. Make a multi-year commitment to this strategy (provided it is effective for you), even in a down year. This isn’t about short-term employees. This is about 3, 5 and 7 years for now, or even longer.
There will be times when you’ll be tempted to freeze recruitment because growth is slow or cash-flow is tight. But you must show your long-term commitment to growth and keep the program running. Nurture your reputation at the college(s) over the long term, perhaps slowing down rather than implementing a full hiring freeze. Hard times can also be opportunities to recruit even higher quality talent that went elsewhere in the past, and to use them to replace any underperforming people on your team.
3. Develop and project a clear higher-level benefit for coming to work at your company.
Enhance your reputation as a company that develops leaders by promoting employee benefits and features such as fast track promotion, accelerated learning/training and mentoring programs. Promote those benefits heavily. Gain advantage over competitors by being a constant presence in the college through guest lecturing, sponsorships and recruitment events.
Shawn Senescall, a JLG project designer who was recruited while he was enrolled at NDSU, said JLG was always well ahead of the game in advertising for open positions.
JLG made its mark on him personally during a recruiting lunch-and-learn event hosted at the college. JLG’s former CEO, COO (Allen, now CEO) and Director of HR brought in pizza and talked about JLG in order to attract students who shared the company’s values, goals and aspirations. Senescall said he came away amazed and surprised at the strategy for growth and the company goals and values they discussed.
“For me, that meeting and the energy and what they had talked about convinced me that it was kind of the company that I eventually wanted to work for after school,” said Senescall. “I still remember to this day. It was such a great presentation.”
At the time of hiring, assessment tools can help capture the performance profile you are looking for and help you interview with a high level of rigor. Once hired, have an individual success measurement system in place that the fresh-out-of-school employees respect so they can receive and perceive “fair grading” and steady advancement – just like in school.
Your personal commitment to your talent pipeline is essential. Recruits who know the CEO is personally interested in developing interns and who personally shows up and interfaces with candidates and new hires is a powerful attractant, one that big companies can’t afford to do.
Senescall recalls when he received a personal outreach by Allen. “I remember Michelle had emailed me and wanted to have coffee with me to talk about JLG and talk about potential in JLG and growth and things like that,” said Senescall. “It was just the idea that someone like Michelle would take a half an hour and have coffee with a college student who was interested in her company. And that told me that all the values and the goals that they had talked about as a company wasn't just talk. But that JLG was committed to bringing in great students. And that gesture was really what kind of sold everything for me, it drove everything home.”
The primary component of JLGdna is the peer resource group. JLG conducts specific training for this cohort at least once a month, bringing in experts from across the company to talk about various aspects of project delivery, the project process, and firm operations, so program members learn firsthand.
“In terms of recruiting, we are able to communicate our unique differentiator – you're actually going to be part of a group that’s getting really special attention,” said Allen. “We thought it really spoke to what that generation of talent was looking for.”
4. Deliver on your promise when you hire them.
Year in and year out, deliver that unique benefit and survey your recruits to see if they really feel you have been great to them. The most powerful proof of a successful program is high retention and promotion, and the most successful testimony to be given is from someone who went through it themselves.
Keep your promises and deliver everything you promised to the talent in your pipeline. This kind of college recruitment process together with quality onboarding and an in-house career development program are enablers for growth, because you decrease the frequency of desperation-style recruiting. What’s more, it drives a learning culture throughout the company, accelerating the firm’s capabilities and knowledge base.
5. Quantitatively monitor the success of your program over time. Adjust as needed and connect your success to the investment you made years ago so that you continue to maintain that investment.
What gets measured gets done. Put appropriate metrics in place from the start and evaluate the return on your investment in college recruiting. Retaining satisfied and engaged employees is a great cost saver. Remember, a successful hire is one where the recruit stays long enough to repay all their salary, recruitment, training costs and more. For JLG, the JLGdna platform has been remarkably successful over the past seven years, shaving more than a year off of the national average for licensure and enjoying a 80+% retention rate of individuals who have moved through this program, with direct colleagiate recruiting now scaled across a five-state area.
As a recruiting and development strategy, JLGdna has been instrumental in JLG’s transformation from a small, regional generalist firm to a nationally recognized, 130-person, 100% employee-owned architecture practice across twelve locations and now headquartered in Minneapolis, MN.
If you are aiming to grow significantly over the coming decade, then you must envision a full roster of executives. Put in place a college recruiting program that expedites the development of the leaders you know you’ll need. There is no time to be lost.
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1c309ef4d2737679feb7b1e26af5fb8a
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https://www.forbes.com/sites/robertsher/2020/10/30/how-high-potentials-drive-their-own-career/?sh=742a21531a6a
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How High Potentials Drive Their Own Career
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How High Potentials Drive Their Own Career
While most talented employees inevitably find their way up the company ladder, many others get stuck in dead-end jobs and trapped in a comfort zone that does not help them get ahead. What can those with high potential do to ensure they are challenged, developed and ultimately successful in their careers?
Ambitious employees advance their careers by forging a pathway of career development and leadership ... [+] and continuing to produce and progress so that the journey accelerates. getty
Many high-potential employees focus on the obvious metrics for assessing their progress: salary, benefits, responsibility, titles. Longevity itself can be an indicator, as seniority tends to attract respect and trust and may open doors. But while these indicators feel positive and can support further growth, they may also be traps, keeping an employee from real advancement.
Ambitious employees determined to advance their careers do not shy away from acknowledging their goals and setting out clear guidelines for how they assess their employers and what they will ask for along the way. This is not about entitlement. It is the employee creating an ambitious pathway of career development and leadership and continuing to produce and progress so that the journey accelerates.
“For me, it was definitely both push and pull,” recalls Kimberly Taylor, of her fast-track progress at Arborwell, the Hayward, California-based tree management service, that saw her rise in six years from marketing coordinator to a new role as Director for Marketing and Business Development. “I’m an ambitious person, I was desperate to learn and I pushed hard. But Arborwell definitely pulled me to develop myself further, funded my marketing certificate at Berkeley and really challenged me a lot.”
Designing Your Future
The starting point is to be the architect of your own advancement. The main building blocks of a strategy for high-potential employees are:
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Select a company with a positive culture ready to support employee development. Good companies create opportunities so that fantastic staff get options and rewards far greater than they could get elsewhere. Avoid companies that try to lock employees in. Be explicit with your manager about your desire to both perform highly and continuously improve and develop, with an eye toward advancement. Never demand promotion but do make clear that you aim to earn it at a good pace through excellent results. Ensure a clear definition of your current job, with agreed deliverables against which you can measure yourself and demonstrate results to your boss. Clarify and confirm next steps in your career path – in your own mind and in your manager’s – so you can both be aware of milestones you need to achieve and skills you need to learn. Identify – and, as appropriate, request support for – training, education and other development aids, and don’t hesitate to be ambitious. Then when you get support, take full advantage of it. Hold quarterly review meetings to confirm your great results with your manager and agree on next projects or learning objectives that will prepare you for your next role. The meetings should be documented, with notes ideally going into your personnel file, or at least in your own career file. Always be training up your replacement. All good leaders have a number 2 in place, ensuring they don’t become stuck because the company is overdependent on them. It also demonstrates confidence and leadership. Only work for a boss who is excited about your progression. An ideal boss mentors you and leads you. An acceptable boss cheers you on and doesn’t hold you back. A boss who just uses employees for the company’s gain without helping them develop should become an ex-boss.
The distinction between high performers and high potentials is their ability and their determination for personal growth. Both do great work. High performers spend up to 95% of their time delivering results, with the balance of 5% on development. High potentials fight for more time, both in their job and from time off, reaching a split of 75% / 25% – meaning investing significant personal time in their own growth. It’s a signal of their commitment to themselves, and it pays off.
Seeing the Forest and the Trees
Taylor’s experience at Arborwell was positive, but not unique at the company. Founder and CEO Peter Sortwell has pursued a strategy of investing in people, giving them significant responsibility and support, and holding them up for praise at key moments when merited. “Peter took a chance on me because he saw something in me that I didn’t see in myself and I’m forever grateful,” says Taylor.
Hired right out of college for a new marketing role at the company, Taylor built Arborwell’s profile, cultivated clients across the state and beyond and contributed to doubling the firm’s annual revenue. Her results, and her determination, led to rapid promotion as a director. When the company converted its ownership structure, she served as chair of the ESOP committee. Taylor has also served as a board member of the Silicon Valley chapter of Commercial Real Estate Women, providing profile and access that complemented her marketing and sales roles.
“Kimberly did wonders for the company because she was a great networker,” recalls Sortwell. “She ended up being our spokesperson and was out there in the marketplace socializing with lots of people. She opened up doors wherever we went because she just has that type of personality.”
Growing Your Own
Not every employee is high potential, talented, ambitious and ready to be fast-tracked. But Arborwell has shown the benefits developing high-potential employees. Taylor ultimately departed on good terms to join a smaller firm and continue her journey as a company builder. But Sortwell was able to step aside from frontline leadership through the appointment as president of Andy LaVelle, who came to the company as an operations manager with explicit leadership ambition. LaVelle is another example of Arborwell’s strategy of developing the business by developing the team.
As for high potentials, the strategy clearly opens the way for huge opportunity, within and beyond current employment. “Arborwell was a unique experience,” recalls Taylor. “An opportunity to forge my own path and draw my own line upwards in a company and develop myself, with the founder’s support. That’s why I stayed for so long and we were able to achieve so much. I couldn’t have gotten where I am now without what I learned at Arborwell and without Peter’s guidance.”
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9ad2b9ee1d81828b2ff6152f19607e50
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https://www.forbes.com/sites/robertsirico/2012/09/10/my-memories-of-911-and-the-end-of-freedom/
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My Memories Of 9/11, And The End Of Freedom
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My Memories Of 9/11, And The End Of Freedom
September 11, 2001 attacks in New York City: View of the World Trade Center and the Statue of... [+] Liberty. (Image: US National Park Service ) (Photo credit: Wikipedia)
I was in Europe at the time. My schedule called for a visit to Paris on September 10 followed by a meeting of the Mont Pelerin Society in Slovakia, then speeches in Warsaw and Amsterdam on welfare reform and economic freedom. My flight from Paris to Slovakia was uneventful and, returning from lunch in downtown Bratislava, I thought how the city had changed in the decade since I had last visited: the buildings were cleaner, the food better, the service professional and pleasant, the people engaging—not glum as I had noted previously. Entering my room I checked for email, and while waiting for the connection, I heard a news update come in on my phone -- “plane flies into the World Trade Center.” Thinking it was some kind of prop plane that had wandered off course, I turned on the television just as the second airliner crashed into the World Trade Center.
Reflexively I prayed for the souls caught in the conflagration and began to call friends and relatives back home. My brother Tony, who lives in Brooklyn not far from where we grew up, was watching the whole tragic event unfold from the roof of his apartment building near the Verrazano-Narrows Bridge. He later told me that the ashes of those murdered that autumn morning fell across every borough of New York. The ashes, I imagined, fell like the snowflakes at the close of James Joyce’s story, “The Dead,” falling all across a city I know so well -- ashes settling on the lake at Prospect Park where I used to go fishing, softly descending on Coney Island, on the beach where I first learned to swim, encircling the bell tower of Regina Pacis where I celebrated my first Mass as a priest, and wafting on to Old Calvary cemetery where my father was buried and later my mother.
I see the ashes that bright and sparkling summer morning making their descent on the whole of the city, the ashes of corporate executives, secretaries, and janitors, of firefighters from Brooklyn and Queens, men who lived in neighborhoods just like my own, firefighters like Stanley Smagala Jr., whose wife Dena was pregnant with their daughter Alexa when the Towers fell.
The following days for me were a period of numbness as I was received by Europeans with great tenderness and warmth. My uninterrupted itinerary (no planes were grounded in Europe, remember) took me past mounds of flowers in front of American embassies in Warsaw and the Hague, and then, on my return flight, over Manhattan and the smoldering ruins where the Twin Towers had once stood, with my birthplace in its shadow.
Yet, all of this is only the recounting of a series of memories, anecdotes. The human heart craves more. People do not seek merely the facts, but their meaning. So what is it that turns the many anecdotes from that day into a parable?
Much ink has been spilt over that tragic day. The age-old question of evil raises its bewildering head, and I continue to wrestle with that 11 years later. But here is something that came immediately to mind as I was encountering all those supportive Europeans, people who might not otherwise have been so supportive of an American -- something underscored when I was a guest on an Italian TV program for a spirited debate (the Italians know no other kind) with some socialists on the meaning of 9/11. It was not their exotic conspiracy theories, much less their untutored economic arguments that struck me. It was the sign on stage, which formed the emotional backdrop for the whole discussion: Siamo tutti Americani ora? Are we all Americans now?
What it meant was that across the divide there was a sense of human solidarity, and few were there who didn’t sense the beauty of it. If I had known then what I since learned about bin Laden, my message to that Italian audience would have been that the mastermind of the September 11 attacks was advocating just the opposite of that human solidarity we all found so encouraging; and I don’t mean this in some vague sense of a man intent on mass violence. It may come as a surprise to some that what animated Osama bin Laden was, at its heart, not merely a primitive form of Islam but something more universal. Bin Laden had dropped clues of this before, but perhaps the clearest one came a year ago, in what appears to have been his final video message. There he asserted that “the path to stop the hegemony of capitalism is to carry out a real radical change” so that the U.S. president “will be liberated, and with him, everyone else, from the hegemony of these corporations.”
Now, I do not know to what extent bin Laden was authentically inspired by a leftist ideology as such, but I can recognize the rhetoric of class warfare when I see it, and it is the antithesis of human solidarity. Envy is as deeply seated in the human heart, I fear, as is the longing for human connection. When one is poisoned by envy, as were bin Laden and his followers, the impulse toward solidarity is easily smothered.
In an age whose history is littered with the miserable failures of various totalitarian experiments, one might be tempted to think that freedom is its own self-evident good. Yet to see the heart of darkness as the world saw it eleven years ago is to understand that certain people for certain twisted reasons choose to go right on employing their freedom of action to destroy the freedom and hope and lives of others.
One might also be tempted to imagine that the answer to bin Laden’s religious mania is a morally neutral public square. But all the great and successful battles against tyranny, all the efforts to build flourishing free societies in the first place, teach a different lesson. Freedom, as indispensable as it is, is insufficient for constructing a society and culture appropriate to man, much less for defending it. If it is to flourish and endure it must be a freedom oriented to something beyond itself, oriented to Truth -- the truth of man’s origin, the truth of man’s nature, and the truth of man’s destiny. It must meet envy and the will to negation with an opposite and more than equal force -- with the kind of virtue that drove Smagala and his fellow firefighters toward danger that fiery September morning, a virtue that also works in quieter circumstances to knit together the countless ties of a free society.
Soviet Communism spent 70 years trying to eradicate the transcendent support for virtue. It failed but now post-Communist Russia struggles in the wake of that legacy to cultivate a truly free society. And on our shores, in the wake of the financial crisis, we see how quickly a deficit of virtue can lead from capitalism to cronyism, where trust, courage, and entrepreneurial risk-taking and innovation give way to corporate-government collusion, collapse, and subsequent calls for more of the very medicine that accelerated the crisis -- a nanny state that feeds on envy while reaching its tentacles ever deeper into everything from the money supply to the mortgage market.
The left appeals to envy and class warfare, while many of its opponents on the right appeal to a goddess of liberty at the center of a morally vacuous public square. But cultivating sustainable freedom is far more complicated and difficult, requiring habituation to just deeds, both visible and invisible. What the hour demands is a deeper understanding of freedom, what has been called freedom for excellence. Such freedom rewards greatness and excellence instead of trying to eradicate them; it permits men and women the space to express, pursue, and create better and higher things and does not condemn their accomplishments out of envy; and it leaves room for the most effective kind of charity to those in need -- the face-to-face compassion of private, most often religious institutions.
What all of this means for those of us concerned about the end of freedom in America and in our world, about the decline and possible death of liberty and justice for all, is that we would do well to remember the other "end" of freedom -- that the goal, purpose, and destiny of men and women called by their Creator is to lives of virtue in freedom.
The appeal here is as permanent as truth itself, but it also has a pragmatic and immediate dimension. Although declining deficits, an uptick in GDP growth, and better job statistics are important goals, in the final analysis, few will go to the barricades to defend a system’s utility. But for a way of life that protects all that we hold dear, a civilization that elevates our spirits, a culture that is rooted in realities of eternal significance -- this is a different story. For such a moral crusade, we will be able to raise a vast army.
Rev. Robert A. Sirico is president and co-founder of the Acton Institute in Grand Rapids, Mich. A portion of this essay is adopted from his new book, Defending the Free Market: The Moral Case for a Free Economy (Regnery, 2012). Also see a five-minute film, Is Capitalism Moral?, based on themes from the book.
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5d519c209ad58d9336a9003f7650d140
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https://www.forbes.com/sites/robertszczerba/2013/11/19/leahs-law-a-mothers-mission-to-save-lives/
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Leah's Law: A Mother's Mission to Save Lives
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Leah's Law: A Mother's Mission to Save Lives
In December 2002, Leah Coufal, a healthy 11-year-old girl, went to the hospital for an elective surgical procedure. She died in that hospital from undetected respiratory arrest brought on by the very medicine given to ease her pain. Placing her on a simple monitor after her surgery could have saved her life.
Leah Coufal, age 7, with her mother, circa 1996. (Image Source: L. Alexander)
Leah’s story might have ended there, another statistic: one more child killed by preventable medical error. But her mother, Lenore Alexander, is fighting to make sure that doesn’t happen, and her battlefield is the California legislature.
Alexander spoke with me about the events surrounding her daughter’s death and the devastation it brought to her family. It changed the trajectory of her life. More than 10 years after the loss of her daughter, she is focusing all her energies on a single mission: “To ensure that no other parent has to experience the pain of needlessly losing a child, when the solution is within reach and so easy to implement.”
Leah’s death didn’t occur in a rural hospital with inexperienced doctors and nurses. It happened at Cedars-Sinai Medical Center, one of the most prestigious hospitals in the country, with world-class technology and staff. The technology that could have saved Leah was already in the hospital, but it wasn’t used.
Some kinds of innovation don’t require new technologies; they require the courage to address topics that are difficult, even terrifying. As Alexander explained, “For ten years, I didn’t speak about this, because I understood it’s too frightening for mothers to hear. They don’t want to think this can happen to you, and I get it. But now medical mistakes have become so big, and there’s so many of them, and nobody talks about it ... It can’t be that you’re scared to hear my story anymore. You have to listen.”
Cases like Leah’s are all too common. Recent studies estimate that between 210,000 and 400,000 hospital patients each year suffer some type of preventable harm that contributes to their death. Despite tremendous effort and enthusiasm to reduce preventable harm, the science of improving patient safety remains in its infancy, with few examples of widespread success.
But the issue in Leah’s case is not science, but procedure. Alexander is working tirelessly to advocate for new legislation known as Leah’s Law. The bill would mandate that all hospitals electronically monitor patients’ breathing after surgery, especially when the patient has been given powerful painkillers known as opioids. This type of monitoring is routinely used in intensive care units (ICUs), but the law would require that monitoring continue when the patients are transferred to general care units. Alexander believes that such monitoring would have saved her daughter’s life.
As a parent, it’s difficult for me to conceive of anyone opposing such a law. The monitoring technology is commonly available. However, logic and reason don’t always prevail in the political arena. Arguments against such a bill could range from hospitals resisting the cost of additional monitors, to clinicians worried about issues of “alarm fatigue,” to the usual pushback against any additional legislation in the healthcare industry.
The justification for such legislation seems readily apparent from the statistics. Approximately 1 in 200 post-operative patients experience severe breathing problems. Between 2004 and 2011, 29% of the opioid-related adverse events, including death, were related to inadequate monitoring of the patient.
Continuous monitoring after operations has even been shown to reduce hospitalization costs by reducing expensive “rescue events” by 65%, and transfers to ICUs by 49%. The average length of stay in the hospital dropped from 24 to 19 days after implementation of continuous monitoring.
Alexander plans to introduce Leah’s Law into the California legislature at the start of 2014 and is pushing for similar monitoring requirements at the federal level. Leah and her mother are just one example of the devastation caused by medical errors. Theirs is a powerful call for both moral and legislative action.
For additional information or to inquire about ways you can help, please visit the following resources:
Leah’s Legacy: Website devoted to Leah Coufal with information on Leah’s Law as well as donation links Patient Safety Movement: Non-profit patient safety organization that has provided support for Leah’s Law and similar legislation around the country 2014 Patient Safety & Technology Summit: Conference dedicated to reducing instances of preventable harm in clinical environments
Robert J. Szczerba is the CEO of X Tech Ventures and author of the Forbes column “Rocket Science Meets Brain Surgery.” Follow him via Twitter, Facebook, or LinkedIn.
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ad82a210e87802d1848634ea37fb41d9
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https://www.forbes.com/sites/robertszczerba/2014/01/23/forget-obamacare-heres-4-healthcare-trends-you-should-be-excited-about/
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4 Healthcare Trends You Should Be Excited About
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4 Healthcare Trends You Should Be Excited About
With the rollout of Obamacare, the national focus of healthcare technology has unfortunately revolved around the implementation challenges of the federal health insurance website. This narrow attention ignores some of the more exciting developments in this rapidly changing industry. To help us get a glimpse into the future, I reached out to Reggie Luedtke, Co-Founder of BlueTree Network and Branch2, companies that specialize in exploring the next generation of healthcare information technology. Luedtke offered these four trends he predicts we’ll see over the next few years.
1. Greater industrial transparency will lead to better outcomes and lower costs. Shopping for healthcare is a task many consumers dread. Access to high quality information to make informed decisions is unfortunately still in its infancy. Transparency in the areas of cost, quality of care, and expected outcomes will allow patients to become informed consumers and choose the best option for their healthcare needs. Some companies, such as Healthgrades, OkCopay, and Pokitdok, are already starting to provide these transparency solutions for individuals. The next iteration will likely include building systems that seamlessly provide guidance based on a patient’s coverage, taking into account what the actual out-of-pocket costs will be, including co-pays, coinsurance, and deductibles.
Increased transparency also builds a competitive landscape for healthcare providers, positioning those organizations with the best care at a reasonable price to grow their practices. Even if a hospital can provide a majority of required services, it doesn’t mean they’re the best at all of them. For this reason, specialized care organizations that focus on a few particular and related treatments will emerge as viable options for consumers. This new landscape will put consumers in a position to share information with each other and take advantage of standardized pricing models that will both improve outcomes and lower the cost of care.
2. Wellness-monitoring apps will be linked to lower premiums. As the healthcare industry shifts to a more proactive business model, insurance companies are finding more innovative ways to motivate and monitor the health of their members. Consumers who actively track their health and behaviors, using tools like mobile apps, will eventually have lower premiums. In much the same way some car insurance companies give you the option to monitor your car’s activity and provide rebates for safe driving habits, wellness monitoring will aggressively move into the healthcare technology space. This trend is already apparent as many health plans routinely give discounts to members who go to the gym regularly. These new wellness apps will give consumers a mechanism to learn ways to improve their nutrition and exercise routines. Consumers who adopt these habits will see lower insurance premiums, in addition to improved health.
Use of health monitoring devices will lead to lower insurance premiums. (Photo credit: juhansonin)
3. Health systems will embrace new technology to improve patient experiences. Health systems are starting to investigate new technologies that allow patients to be more intimately involved in their own healthcare decisions. They’re creating in-house innovation departments and partnering with third-party organizations to define what a more patient-centric model will look like. Examples of innovators in this field include: Cleveland Clinic, University of Pennsylvania Medical Center, Geisinger Health System, and Kaiser Permanente. Health systems that don’t innovate will begin to see patients moving toward more open systems that prioritize patient satisfaction.
4. Application health portals for individuals will create a more informed consumer. Decades after e-mail became one of the most common forms of communication, most individuals still can’t use this technology to communicate with their care providers. This is changing. The next step towards empowering the patient is the development of health portals for individuals. These portals will allow patients to easily connect with their providers as well as compile data from their health and fitness devices and apps. Once this data is integrated into the portal, companies such as Narrative Science will be able to condense these complex health statistics into understandable test result summaries and personal progress notes. Think of this as an iTunes or Spotify for your health, where past behaviors can be used to recommend new healthy behaviors and fitness tracking apps. The ability to access an individual’s complete health and wellness data, combined with intelligent data mining and behavior modification applications, will create a more educated consumer.
As Luedtke explains, “These trends should enable us to move from a model of care that relies on delayed reactions to changes in large populations, toward providing both interactive and proactive care at the individual level.” Now it’s our turn as patients to make the most of these emerging tools and strategies.
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54e714bdc88983bce3c397adfdaf06c4
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https://www.forbes.com/sites/robertszczerba/2014/07/10/star-trek-tricorder-provides-vital-nutrition-information/
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Star Trek 'Tricorder' Provides Vital Nutrition Information
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Star Trek 'Tricorder' Provides Vital Nutrition Information
Traditionally, it has been very difficult for people to find detailed information about the food they eat. Food labels, which are the most immediate source of nutritional data, provide few insights about how food is prepared, harvested, or modified.
“Augmented nutrition” refers to the use of technologies — especially those integrated into mobile devices — that collect, analyze, and deliver real-time nutritional information such as calorie counts, ingredients, and chemicals of specific foods. This augmented dietary information is helping consumers make better food choices.
Fard Johnmar, digital health futurist and co-author of ePatient 2015, explained, “Unlike many digital trends, augmented nutrition is being driven by broader global, cultural, and consumer needs and desires, rather than technology.” He suggests that augmented nutrition should be viewed as an outgrowth of the steadily expanding global food movement, which is focused on helping people make more informed dietary decisions based on greater access to information about food’s health and environmental impacts.
Jennifer Jensen Wallach, author of How America Eats: A Social History of U.S. Food and Culture, has observed that powerful social and cultural forces contribute to over-eating and poor diet. Digital technologies focused on delivering augmented nutrition information may counteract these pressures by placing people in contact with others who share their beliefs and values about food, and can help them develop and maintain healthful eating habits.
Given that ePatient 2015 places the augmented nutrition trend in the context of the global food movement, it’s worth examining a commonly cited criticism of it: that only the affluent are concerned about things like purchasing organic and locally grown foods. If the cultural mores and aspirations of the food movement do not extend to all segments of society, there is less fertile ground for the augmented nutrition trend to spread.
To address this question, the innovation consultancy run by Johnmar (Enspektos) surveyed a statistically representative group of digitally savvy, U.S. health consumers (which the authors call "ePatients") in 2012. They found that about 50% of ePatients making $30,000 or less a year believe purchasing and cooking organic foods is important. This research suggests that many Americans, regardless of economic status, share an interest in issues important to people in the food movement.
Augmented dietary information is helping consumers make better food choices. (Photo credit:... [+] Wikipedia)
So where and how is augmented nutrition being applied in the real world? In early 2014, medical futurist Dr. Bertalan Meskó stated that the world’s first “really useful” food scanners were coming to market. He highlighted a technology developed by Toronto-based firm Tellspec. Using a device reminiscent of a Star Trek tricorder, users can detect allergens, chemicals, and nutrients in food. Meskó believes that these devices will truly come into their own when data collected from augmented nutrition tools is combined with other information, such as our genetic profile, to help people make truly informed decisions about what food to eat based on their genetic risk for various diseases.
A range of companies, including Weight Watchers, are already using augmented nutrition tools, such as mobile-based barcode scanners, to help people better understand how the food they purchase and consume will influence their weight-loss goals.
Johnmar suggests that augmented nutrition technologies will only gain in popularity as they become more user-friendly and integrated into other devices and appliances such as refrigerators and microwaves.
Now, if they would only cook for us …
Robert J. Szczerba is the CEO of X Tech Ventures and author of the Forbes column “Rocket Science Meets Brain Surgery.” Follow him via Twitter, Facebook, or LinkedIn.
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042ce301f0c69eefcfa056326d88a70d
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https://www.forbes.com/sites/robertszczerba/2014/08/27/should-your-health-app-be-culturally-sensitive/
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Should Your Health App Be Culturally Sensitive?
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Should Your Health App Be Culturally Sensitive?
In 2011, CNN aired a widely-debated documentary, Black in America: The New Promised Land - Silicon Valley. During the broadcast, influential blogger Michael Arrington said he didn’t know a single African-American entrepreneur. While Arrington later recanted his statement, this interview and the experiences of people featured in the documentary suggested that Silicon Valley is unfriendly to minorities.
To address this issue, Hank Williams, a technology innovator featured in the documentary, launched a nationwide effort called Platform. It’s designed to encourage and support minority and female innovators in their efforts to raise capital and manage their companies. For Williams, ensuring everyone can take part in the innovation economy is not just an issue of fairness, it’s vital to the nation’s economy. Williams observed, “a monoculture precludes a diversity of thought and creates an inbred ecosystem.” He also cited research suggesting that teams that are more diverse are innovation engines and can drive productivity to new heights.
Concerns about the consequences of failing to encourage, seek, and acknowledge the input of women and minorities is not limited to the consumer technology arena. In recent years, technologies involving smart phones and data analytics have become an essential component of how healthcare is delivered throughout the world. Moreover, some believe these tools hold special promise for people from poor communities, seniors, and ethnic and racial minorities. In some cases, people from these groups are more likely to have chronic conditions that can be expensive to treat in the short- and long-term. Unfortunately, many of the innovators developing health technologies are not well-equipped to understand the special needs of these groups.
Rohit Bhargava and Fard Johnmar, co-authors of ePatient 2015, describe this problem as “multicultural misalignment.” They warn that digital health technologies, such as mobile and wearable devices, will be much less effective if they are not optimized to account for differences in age, gender, culture, ethnicity, knowledge, and literacy. They believe that preventing multicultural misalignment is vital, suggesting that we must work hard to ensure “health innovations benefit all segments of society."
Should your health app be culturally sensitive? (Photo credit: Wikipedia)
Other voices concur. In early 2014, the Robert Wood Johnson Foundation awarded StartUp Health, a global platform focused on accelerating digital health and wellness innovation, a $500,000 grant to improve health and wellness in underserved communities. When the partnership was announced, the co-founder of StartUp Health, Unity Stoakes, said that new technology solutions “being created over the coming years must address the needs of [diverse and underserved] communities in order to truly transform health care.”
Interestingly, digitally active health consumers (whom the authors call “ePatients”) share this view. In late 2013, research conducted by the innovation consultancy Enspektos revealed that black patients who had used digital health technology in the past were twice as likely as whites to say accessing tools appropriate to their lifestyle, culture, and background is very important.
In addition to StartUp Health, a range of other organizations (including the Aetna Foundation and several government agencies) are working hard to ensure that the problem of multicultural misalignment is addressed early and often. Johnmar hails this as good news, and says he is “encouraged by the fact that increasing numbers of health technology innovators are both acknowledging and working to address the unique needs of people living in diverse communities.”
In order to significantly improve the outcomes and reduce the costs of our healthcare system, inclusion and diversity need to become integral parts of the innovation process.
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8e529edfc238fd35a1ad8e8af4ce991c
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https://www.forbes.com/sites/robertszczerba/2014/10/14/helping-hospitals-fight-the-battle-against-alarm-fatigue/
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Helping Hospitals Fight The Battle Against Alarm Fatigue
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Helping Hospitals Fight The Battle Against Alarm Fatigue
One of the top technologies hazards in the healthcare system is the problem of alarm fatigue, in which the sheer number, variety, and frequency of machine alarms in a hospital room leads to many of them being ignored or muted. The negative results range from annoyance to patient deaths.
On the Emergency Care Research Institute (ECRI) Top 10 Health Technology Hazards for 2014, alarm hazards ranked number one. According to the American Association of Critical Care Nurses (AACN), “Although studies show it is difficult for humans to differentiate among more than 6 different alarm sounds, the average number of alarms in an ICU has increased from 6 in 1983 to more than 40 different alarms in 2011. In addition, 80% to 99% of electrocardiographic monitor alarms are false or clinically insignificant.”
Medical alarm hazards are the top technology danger facing hospitals. (Photo credit: Wikipedia)
In a recent Forbes column, “Understanding Healthcare’s Top Technology Hazard,” we looked at some of the devastating impacts that alarm hazards had on both patients and the healthcare system. Describing the problem is easy, identifying effective and efficient solutions usually proves a bit more difficult.
For guidance, we turned to the Association for the Advancement of Medical Instrumentation (AAMI). In an article titled “Monitor Alarm Fatigue: An Integrative Review,” Maria Cvach, the assistant director of nursing at Johns Hopkins, broke down the research evidence into five major themes:
Excessive alarms and effects on staff Nurse's response to alarms Alarm sounds and audibility Technology to reduce false alarms Alarm notification systems
From these areas of research evidence, she developed evidence-based strategies for decreasing alarm fatigue into the following three areas:
Technology
Use “smart alarms” that keep track of multiple parameters Standardize alarm sounds for easier identification by staff Add troubleshooting animations to monitoring equipment
Hospital
Form an interdisciplinary alarm management committee to conduct an alarm risk assessment and explore strategies to reduce the number of alarms Set alarms at actionable limits and levels In scheduling staff, consider that as workload increases, so does alarm response time Provide additional means to deliver alarm signals from monitors to caregivers, such as pagers, phones, or waveform screens Invest in initial and ongoing staff training on alarm devices Employ overall noise reduction strategies to reduce stress on patients and staff
Caregiver
Suspend alarms for a short time period prior to direct interaction with patients Adjust alarms to patient's actual needs Properly prepare the patient’s skin for interface with the device Routinely replace electrocardiograph leads and electrodes Document alarm parameters in the patient’s medical record
Research in the area of alarm hazards and alarm fatigue is continuing in many universities and corporations around the world. However, many of the items in this review and other comprehensive approaches are achievable today with minimal effort and cost. Hopefully, the leadership of hospitals and other healthcare facilities are listening – above the din of all those beeping machines.
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96898fe98e35ffc4632b4690900a5a8e
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https://www.forbes.com/sites/robertszczerba/2015/01/05/15-worst-tech-predictions-of-all-time/
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15 Worst Tech Predictions Of All Time
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15 Worst Tech Predictions Of All Time
There’s an old saying that goes, “Predicting the future is easy … getting it right is the hard part.” As we welcome in the start of another year, we’re greeted with an almost unlimited supply of Nostradamus-wannabes trying to predict how the future of technology will play out. The interesting part comes when one looks back on past predictions to see who was on target and who missed the mark by a mile.
For almost all technology predictions there is the usual debate about the actual wording or context of the prediction or even if the attribution is correct. Sometimes the debate turns out to be more fun than the prediction itself.
And then there are predictions that become famous simply by how wrong they actually turned out to be, such as IBM Chairman Thomas Watson’s famous 1943 quote that “… there is a world market for maybe five computers.”
Below are my favorite 15 technology predictions, spanning the past 150 years, that didn’t quite turn out as expected.
1876: "The Americans have need of the telephone, but we do not. We have plenty of messenger boys." — William Preece, British Post Office.
1876: "This 'telephone' has too many shortcomings to be seriously considered as a means of communication." — William Orton, President of Western Union.
1889: “Fooling around with alternating current (AC) is just a waste of time. Nobody will use it, ever.” — Thomas Edison
1903: “The horse is here to stay but the automobile is only a novelty – a fad.” — President of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Company.
Early predictions were that Henry Ford's horseless carriage was simply a "fad". (Image source: T.... [+] Whalebone via Wikipedia)
1921:
“The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?”
1946: "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." — Darryl Zanuck, 20th Century Fox.
1955: "Nuclear powered vacuum cleaners will probably be a reality within 10 years." — Alex Lewyt, President of the Lewyt Vacuum Cleaner Company.
1959: "Before man reaches the moon, your mail will be delivered within hours from New York to Australia by guided missiles. We stand on the threshold of rocket mail." — Arthur Summerfield, U.S. Postmaster General.
1961: "There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television or radio service inside the United States." — T.A.M. Craven, Federal Communications Commission (FCC) commissioner.
1966: "Remote shopping, while entirely feasible, will flop.” — Time Magazine.
1981: “Cellular phones will absolutely not replace local wire systems.” — Marty Cooper, inventor.
1995: "I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." — Robert Metcalfe, founder of 3Com.
2005: "There's just not that many videos I want to watch." — Steve Chen, CTO and co-founder of YouTube expressing concerns about his company’s long term viability.
2006: "Everyone's always asking me when Apple will come out with a cell phone. My answer is, 'Probably never.'" — David Pogue, The New York Times.
2007: “There’s no chance that the iPhone is going to get any significant market share.” — Steve Ballmer, Microsoft CEO.
So, what’s your technology predictions for the New Year?
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684918733909085a3134af86a3b41364
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https://www.forbes.com/sites/robertszczerba/2015/01/28/understanding-the-hidden-dangers-when-leaving-the-hospital/
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Coming Home From The Hospital Is Actually More Dangerous Than You Might Expect
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Coming Home From The Hospital Is Actually More Dangerous Than You Might Expect
After a stressful stay in the hospital, your doctors have finally given you the green light to return home. A sigh of relief passes over you with the realization that the worst is behind you.
Not so fast …
Coming home from the hospital is actually more dangerous than you might expect, and there is a high likelihood of readmission if proper precautions aren’t taken. Let’s look at some of the facts from AARP’s Public Policy Institute:
One in five Medicare beneficiaries is re-hospitalized within 30 days of discharge; one in three is readmitted within 90 days. More than 20% of older Americans suffer from five or more chronic conditions that account for 75% of total Medicare spending—mainly due to high rates of hospital admission and readmission. It is estimated Medicare spends approximately $17.4 billion in annual readmission costs.
Because of this, it’s important to find ways to improve transitional care in order to decrease the likelihood of an adverse event or readmission.
First, we need to understand some of the terms. “Care transitions” describe the movement patients make between healthcare practitioners and environments as their condition and care requirements change. For example, a patient might receive care from a specialist in an outpatient setting, then transition to a hospital physician and nursing team during an inpatient admission before moving on to yet another care team at a skilled nursing facility. Finally, the patient might return home, where he or she might receive care from a visiting nurse. Each of these shifts from care providers and settings is defined as a care transition. “Transitional care” is the set of actions designed to ensure the coordination and continuity of healthcare, as patients transfer between different locations or different levels of care within the same location.
One group looking closely at the problem of care transitions is the Betty Irene Moore Nursing Initiative (BIMNI), funded by the Gordon and Betty Moore Foundation. Marybeth Sharpe, BIMNI Program Director, explained, “The initiative was established to improve the experience and outcomes of patients in Northern California. Improving the care patients receive as they transition from the hospital to their home or other care settings is one of four strategies of the initiative." She added that, during the past 10 years, the initiative has:
Improved patient care in more than 80% of adult acute care hospitals in the San Francisco Bay Area and the Greater Sacramento area. Supported 75% of San Francisco Bay Area hospitals to implement strategies to improve transitional care and reduce readmission rates. Achieved a 30% reduction in 30-day readmission rates and/or a 15% reduction in 90-day readmission rates in 30% of San Francisco Bay Area hospitals.
If you're not careful, coming home from the hospital may be more dangerous than you might expect.... [+] (Image source: sturti via istockphoto)
There are a number of ways that patients can be more proactive with their healthcare and improve the likelihood of successful care transitions. Kate Weiland, Program Officer for BIMNI and an expert on transitional care, offered the following six strategies for improving the likelihood of safe, effective transitions.
1. Understand your medications and ensure you talk to your doctor or pharmacist about how to take them.
26% of hospitalized patients report that medications were not explained to them, making it more challenging to adhere to the regimens when patients return home. According to the Centers for Disease Control and Prevention, 82% of all American adults take at least one prescription medication, and 29% take five or more. The average Medicare Part D patient filled 49 standardized 30-day prescriptions in 2010.
2. Make sure to schedule and go to follow-up appointments with your doctor.
There are various reasons why patients do not schedule or attend follow-up appointments, with statistics in the range of 5 to 55% on no-shows. Scheduling a follow-up doctor’s appointment before leaving the hospital can reduce a patient’s risk of being readmitted to the hospital unnecessarily.
3. Find out if your hospital offers home visits or makes follow-up calls.
Follow-up phone calls or home visits from a health care professional can help reduce the risk of being readmitted to the hospital. Patients who received a follow-up discharge call were 23% less likely to be readmitted within 30 days of leaving the hospital.
4. Inquire about referrals to community services, such as free transportation to follow up appointments and Meals on Wheels, and take advantage of them.
Individuals who live alone, who are unemployed, or who have challenges affording healthcare are more likely to be readmitted. Compared to patients with extensive social networks, hospital readmission was more frequent among those who had moderate to negligible social networks.
5. Ensure anyone taking care of you is engaged in all conversations throughout your healthcare experience.
40 to 80% of medical information provided by health care practitioners is forgotten by patients immediately. Nearly 20% of patients said their health had suffered due to poor communication for varying reasons. 52 million informal caregivers provide care to adults (aged 18+) with a disability or illness.
6. Clearly know your instructions when leaving the hospital, and if you are unsure, ask, ask, ask - and ask again.
Roughly 23% of hospitalized patients report they were not given information about what to do when recovering at home. Only 12% of adults have proficient health literacy, which means that nearly nine out of ten adults may lack the skills needed to manage their health and to prevent disease.
It’s still okay to look forward to the day you are well enough to leave the hospital. But paying attention to the details of your transition can help make sure you don’t end up right back in that same hospital bed.
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f5b384dccda4b683b91b47a0fe651bdb
|
https://www.forbes.com/sites/robertszczerba/2015/10/27/disturbing-new-study-finds-medication-errors-occur-in-half-of-all-surgeries/
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Disturbing New Study Finds Medication Errors In Half Of All Surgeries
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Disturbing New Study Finds Medication Errors In Half Of All Surgeries
A disturbing new study, published in the October 2015 issue of Anesthesiology, found that medication errors occurred in nearly half of all surgical procedures. Additionally, the study found that one-third of all errors resulted in adverse drug events or harm to patients.
The study focussed on more than 275 surgeries performed at the Harvard-affiliated Massachusetts General Hospital (MGH) involving 3,671 observed medication administrations. The results of the study are especially concerning because MGH is considered a national leader in patient safety and has already implemented numerous safety procedures for the operating room. Because of this, the rate of medication errors at other hospital across the nation is estimated to be at least as high as these study results, if not significantly higher.
The study is of particular interest because it's the first to measure the incidence of medication errors and adverse drug events during the perioperative period - immediately before, during and right after a surgical procedure. Anesthesia-trained staff observed randomly selected operations at a 1,046-bed tertiary care academic medical center to identify medication errors (MEs) and adverse drug events (ADEs) over an 8 month period from 2013 - 2014. Results of the study include the following:
Medication errors were observed in almost 1 out of every 2 surgical procedures. The most frequently observed errors were mistakes in labeling, incorrect dosage, neglecting to treat a problem indicated by the patient’s vital signs, and documentation errors. Medication errors and adverse drug events were more common with longer procedures, especially those lasting more than six hours and involving 13 or more medication administrations. More than 1 one in 20 (5%) perioperative medication administrations resulted in a medication error or an adverse drug event. Of the more than 3,600 medication administrations in the observed operations, 153 medication errors and 91 adverse drug events were recorded either by direct observation or by chart review. 80% of the medication errors were determined to have been preventable. 33% of the observed medication errors led to an adverse drug event, and the remaining 66% had the potential to cause an adverse event. Of all the observed adverse drug events and medication errors that could have resulted in patient harm, 64% were considered serious, 33% were considered significant, and less than 2% were considered life-threatening
Karen C. Nanji, MGH Department of Anesthesia and lead author of the study, attempted to put a positive spin on the results, “Prior to our study, the literature on perioperative medication error rates was sparse and consisted largely of self-reported data, which we know under-represents true error rates. Now that we have a better idea of the actual rate and causes of the most common errors, we can focus on developing solutions to adequately address the problems."
With serious medication errors occurring in almost half of all surgeries, the operating room is a... [+] very dangerous place. (Image Source: John Crawford via Wikimedia)
Most of the clinicians I spoke with after the study was published were not surprised with the results. In fact, several commented that they felt the actual number of errors that occur during surgeries was probably much higher. The most disturbing aspect is that most of these errors were classified as preventable. The technologies already exist to significantly reduce these types of life-threatening errors, but many hospitals don't take the necessary steps to address the problem.
Every consumer of healthcare services should be appalled by these results. Recent studies indicate that up to 400,000 people are killed each year due to preventable medical errors (which includes medication errors) and hospital acquired infections. This makes medical errors the third leading cause of death in America, behind heart disease (1st) and cancer (2nd). Additionally, a 2011 Institute of Medicine (IOM) study, “The Healthcare Imperative: Lowering Costs and Improving Outcomes,” indicated that of the $2.5 trillion spent on domestic healthcare costs in 2009, $765 billion (or 30%) was attributable to preventable costs.
The level of waste and harm that is generally accepted in the healthcare sector would never be tolerated in other mature industries. How long would Apple stay in business if their iPhones routinely produced errors in critical situations and caused preventable harm to the consumer on a regular basis? We need to stop holding the healthcare industry to a different standard than every other industry we interact with. It really is a matter of life and death.
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cd8dafd609922d9a8cb5c4408b5f6426
|
https://www.forbes.com/sites/roberttuchman/2014/12/05/why-tcu-in-the-college-football-championship-may-cost-dallas-millions/
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Why TCU In the College Football Championship May Cost Dallas Millions
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Why TCU In the College Football Championship May Cost Dallas Millions
In the most recent College Football Playoff Pool , Texas Christian University jumped up to the #3 ranking, placing them in tremendous position to earn a spot in the first-ever college football playoff tournament. The perennial powerhouse Ohio State Buckeyes sat on the outside of the top four looking in, despite looking dominant over the course of their last several games.
While it is true that everyone loves a good Cinderella story, the financial implications of TCU making it into this inaugural postseason tournament rather than OSU are rather significant. For both the NCAA and the city hosting the game, that particular outcome would be relatively catastrophic.
For starters, should Ohio State fail to make the playoff, the Big Ten would fail to receive the $6 million awarded to conferences for each team that makes the postseason, plus $2 million more for expenses associated with both the semifinal and championship rounds.
Of course, that money doesn’t disappear off the face of the planet; it just goes to the Big 12 instead. However, there are other ways in which real money could be lost if Ohio State fails to make the playoff, due in large part to the fact that OSU has an exponentially larger fan base than Texas Christian.
What makes that large fan base so profitable is that they will travel almost anywhere to support their teams, and they do so in droves. Ohio State and other Big Ten schools not only travel the best, but also spend the most. Ohio State is at the forefront of one of the most well known conferences and even the NCAA at large.
Furthermore, OSU has one of the largest alumni bases in the country, which probably has something to do with those huge travel groups for bowl games. With an annual undergraduate enrollment of around 40,000 students, OSU churns out a ton of graduates every year. As they multiply by tens of thousands of people every decade, the alumni base only grows. There are few things that keep them more in tune with their alma mater than a perennially successful football program. If the Buckeyes are in a bowl game of any type, playoffs or otherwise, the Ohio State fans will absolutely be there.
All that said there is significantly more money to be made should they make the four-team playoff.
Nothing against TCU fans, who are surely thrilled to support the surprise team of the 2014 college football season, but when one considers all the things football fans purchase in support of their favorite teams, it’s easy to understand how a much larger alumni base and fan base could equate to more dollars earned.
One must consider why there is such a huge economic impact by the amount of fans that descend on a city during a major sporting event such as the first annual College Football Championship. The number of hotel rooms secured is astronomical and many come at inflated prices of $500 or more for a room, with minimum night stays of three and four nights. With long stays comes what hotels call food and beverage opportunities. This includes room service, mini bars, and on property dining. These food and beverage opportunities are where most hotels make a lot of their profit, even more so than in the inflated room rates.
Then think of the number of restaurants and bars that will miss out on revenue opportunities, catering to only a fifth of the fans at most, than an event that features Ohio State. Additionally, if one is attending the first ever CFC, they are most likely going to purchase a lot of licensed merchandise being sold on site. To have TCU in that game rather than OSU, the difference could easily be tens of millions of dollars for the host city.
Even more so, TCU is about a 20 minute drive from the Cowboys stadium in Arlington, probably limiting fans from staying in hotels and driving revenue to the Dallas area.
Back in June it was reported that television revenue for the games could top $470 million, with ticket sales, merchandising and sponsorships adding as much as another $50 million to that number. With TCU in the playoffs rather than OSU, those numbers could be in jeopardy.
A big part of doing the playoff in the first place was to generate the maximum amount of income, and while more money will be generated in 2014 than 2013 regardless of who makes it, there flat-out is more money to be had with Ohio State in the “big game” than TCU.
Robert Tuchman is President of Goviva, which puts together bucket list trips to major sporting events. Previously he founded TSE Sports and Entertainment. He is the author of Young Guns: The Fearless Entrepreneur. Follow him @roberttuchman.
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aac5f14e01cd1d43ddbd4645fb71fe75
|
https://www.forbes.com/sites/roberttuchman/2017/01/18/is-houston-the-nfls-best-super-bowl-host-city/
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Is Houston The NFL's Best Super Bowl Host City?
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Is Houston The NFL's Best Super Bowl Host City?
This Jan. 14, 2017 photo shows The George R. Brown Convention Center, which will host the NFL... [+] Experience in Houston. Super Bowl LI will be played Feb. 5 at NRG Stadium in Houston. (AP Photo/David J. Phillip)
February 1, 2004 was a day that will forever be etched in my memory. It was Super Bowl XXXVIII, and even though I sat in the third to last row of Houston’s Reliant Stadium, my seats on the 50 yard-line gave me a bird’s eye view of Adam Vinatieri’s 41-yard field goal, giving the New England Patriots a victory over the Carolina Panthers. That moment will always be what I remember about the game, but the memories I have of festivities in Houston are equally meaningful. It’s been nearly 13 years since the largest city in Texas hosted the Super Bowl and much has changed in Houston.
In 2004, 200,000 people took part in the festivities surrounding the Super Bowl in Houston. This year, more than 1 million people are expected to take part in activities surrounding the big game. Many of these fans will be attending Super Bowl Live, a fan festival that runs from January 28 through February 5, centered in downtown Houston in and around Discovery Green. The multi-day event with food, music, entertainment, attractions, and more will allow everyone to experience the Super Bowl even if they aren’t attending the game. This area of the city will serve as the epicenter of all the action at Super Bowl LI. It’s amazing to think that when Houston last hosted the Super Bowl in 2004, Discovery Green did not even exist.
To make way for the downtown festivities, Houston’s famed Avenida de las Americas is also undergoing a major transformation. The Avenida de las Americas, which runs across the front of the George R. Brown Convention Center, is the partial closure of the boulevard to create a walkable plaza. Formerly an eight-lane boulevard separated by an esplanade, ADLA (as termed by Houston residents) will be narrowed to just two southbound lanes in order to create a new pedestrian plaza that draws the convention center closer to Discovery Green park across the street. This creation gives way to perhaps the most glaring aspect of Houston’s transformation, a thriving and chic culinary scene.
Lining the promenade are four new restaurants in the Convention Center that are expected to open in time for Super Bowl. Since 2004, Houston's 6,000 dining establishments have increased to over 10,000. Newcomer B&B Butchers is pulling out all the stops with a custom-built restaurant shuttle for guests trying to navigate Houston's streets. In addition, celebrity chefs such as Monica Pope and Chris Shepherd have all opened restaurants along with Bryan Caswell whose latest incarnation, Reef, was voted by Bon Appétit as the best seafood restaurant in America.
This year’s stadium for the Super Bowl rivals all other venues in their quest to be regarded as most spectacular. Houston’s state of the art NRG Stadium offers features that include a retractable roof, the NFL’s second largest video screen, and a seating capacity expandable for 80,000 patrons including 197 luxury suites. Aside from the venue, Houston’s February weather will also play a major role in boosting the economy for businesses throughout Harris County. Good weather allows fans the opportunity to participate in outdoor activities including golfing, eating, and shopping. In addition, hotel capacity has nearly doubled since 2004, from 44,000 rooms to approximately 84,000 rooms. Houston has also seen an incredible boom in tourism since Vinatieri’s game winner. The city is definitely ready to play host.
The evolution of Houston has primed America’s fourth most populous city to benefit greatly as it hosts Super Bowl LI on February 5. Its close proximity to other major cities passionate about football, including Dallas, Austin, San Antonio, and New Orleans allows many fans access to enjoy the festivities. In addition, Houston’s proximity to Mexico, one of the most thriving non-U.S. markets for NFL football has given fans south of the border the ability to be closer to the action.
While the ramifications of hosting the big game extend far beyond the week of action leading up to the NFL’s biggest event, Houston is gearing up to use the Super Bowl as yet another opportunity to showcase just how good Texas truly is.
Robert Tuchman is an executive at CAA Premium Experience, a division of Creative Artists Agency. Previously he founded Goviva which was acquired by CAA. Prior to Goviva he started TSE Sports & Entertainment which was acquired by Pfingsten Partners. He is the author of Young Guns: The Fearless Entrepreneur. Follow him @roberttuchman.
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d618232cd9644670e467026560e460ed
|
https://www.forbes.com/sites/roberttuchman/2017/01/22/the-most-lavish-super-bowl-package-money-can-buy/
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The Most Lavish Super Bowl Package Money Can Buy
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The Most Lavish Super Bowl Package Money Can Buy
During this time of year, I seem to always get asked what is the most incredible Super Bowl package someone can buy? If budget is no object, there are some amazing ways one can experience the Super Bowl and its surrounding festivities. Thinking ahead to the big game that is less than two weeks away, here is what I would offer as the ultimate Super Bowl experience in Houston.
Friday, February 3:
A private jet flies you and three friends into Houston Executive Airport.
A driver pulls onto the tarmac in a Cadillac Escalade to take you to your exquisite accommodations for the next few nights in one of the five-star suites at the Hotel Icon. For the entire weekend, your driver will be on-call to shuttle you around town.
Dinner at the popular Houston restaurant Reef, with a private cooking demonstration by celebrity chef and James Beard Foundation semifinalist, Bryan Caswell. A former NFL coach, such as Herm Edwards or Rex Ryan, will join you and your friends at dinner to share thoughts on Sunday’s game.
After dinner, it’s off to your first Super Bowl party of the weekend, ESPN’s Next Party, where the featured performers are Fergie and DJ Khaled. After spending some time at the ESPN Next Party, your driver will then take you over to the Bruno Mars Super Bowl Party presented by PepsiCo at Club Nomadic, a super cool pop-up entertainment venue in downtown Houston.
Saturday, February 4:
Saturday starts with a round of golf at Wildcat Golf Club, offering sweeping views of Houston’s skyline and 80 acres of lakes, all within one mile of NRG Stadium. A former NFL great, such as Jerome Bettis, Ronnie Lott, or Warren Moon, will join you and your foursome. If you are not a big golfer, you have the option to choose from several of the many spa services offered at Houston’s prestigious Fiori Spa.
Saturday afternoon it’s time to hit iconic sports agent Leigh Steinberg’s 30th annual Super Bowl Party at Hughes Manor. A great daytime event where you will mingle with NFL owners, general managers, coaches, and celebrities.
Saturday night starts out with drinks at Boheme, a bar that offers an artsy vibe, and then continues on with a mouth-watering meal prepared by Houston based celebrity chef Monica Pope. Joining your group to talk up-to-the-minute Super Bowl news will be a top media personality such as Adam Schefter, Joe Buck, or Mike Greenberg.
After dinner Saturday night it’s off to your first party of the evening to see Taylor Swift perform at Direct TV’s Super Saturday Night. After you "Shake it Off,” it’s on to the Rolling Stone party to dance with the likes of Diplo, Nas, & DJ Cassidy. Then its time to hop back in the Escalade and head off to the always memorable Maxim Party, where you will get to listen to Travis Scott and DJ Khaled while enjoying bottle service at your private VIP table.
GLENDALE, AZ - FEBRUARY 01: A general view of atmosphere during the DIRECTV Super Fan Tailgate at... [+] Pendergast Family Farm on February 1, 2015 in Glendale, Arizona. (Photo by Imeh Akpanudosen/Getty Images for DirecTV)
Super Bowl Sunday, February 5:
Your driver picks you up at noon at Hotel Icon and takes you to a pre-game tailgate party right outside NRG Stadium. In anticipation of the big game, you and your friends will enjoy an authentic tailgate experience filled with Texas barbecue fare, a top shelf open bar, and current and former NFL VIP's walking around taking pictures and signing autographs.
Then, if you still have the energy and are still standing, the next stop is Super Bowl LI where you will be sitting in the best seats in the house on the Club Level directly on the 50-yard-line. Included with your seats, you will have access to all-you-can-eat food and beverage while you watch to see who is crowned the NFL’s best.
After the game you will head directly back to Houston Executive Airport where your private jet will fly you home.
Estimated all-inclusive package price for four people: $250,000. Have no fear if this dream scenario is not in your budget as there are many other far more reasonably priced packages still available.
Robert Tuchman is an executive at CAA Premium Experience, a division of Creative Artists Agency. Previously he founded Goviva which was acquired by CAA. Prior to Goviva he started TSE Sports & Entertainment which was acquired by Pfingsten Partners. He is the author of Young Guns: The Fearless Entrepreneur. Follow him @roberttuchman.
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f4cdb30f1696938da4d6bc5ae5eda799
|
https://www.forbes.com/sites/robertvamosi/2011/09/27/a-secure-software-model-matures/
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A Secure Software Model Matures
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A Secure Software Model Matures
It is one thing to say you have secure software, it is quite another to back that up with security best practices. Building Security In Maturity Model (BSIMM) is a secure software development lifecycle model that grew out of scientific observations around software security practices at nine companies ranging from Adobe to Google, and Wells Fargo back in 2009. BSIMM's third iteration, released on Tuesday, now includes the best practices for secure software development from 42 companies, including 19 financial services companies, which co-creator Gary McGraw said are at least "five to seven years ahead of the federal government" in terms of security.
BSIMM 3 delineates 109 security activities related to 12 software practice areas, such as software environment, architecture analysis, attack models, strategy & metrics, and code review. McGraw, CTO at Cigital, said the report documents two or more real examples for each activity. Other BSIMM co-creators include Brian Chess at Fortify, and Sammy Migues at Cigital.
In addition to studying new companies, BSIMM 3 for the first time provides longitudinal data on the security process at eleven of the thirty companies profiled in May 2010. For example, McGraw mentioned that J.P. Morgan Chase has implemented BSIMM for vendors (vBSIMM) for all its contractors. This ensures that third-party contractors for Chase also follow secure software lifecycles themselves. In all, ten of the eleven revisited companies showed improvement.
For companies that want to begin the process of secure software development, the BSIMM model provides a loose framework that can be adapted to most any organization, large or small. All the tools can be downloaded from the BSIMM site for free. For example, Software Security Framework (SSF) is an adaptable security model that allows any organization to assess their current state of software development, to prioritize changes, and to chart progress.
BSIMM3 describes the work of 786 Software Security Group members working with a 1750 additional people to secure the software developed by a total of 185,316 developers. Companies in this year's report include Adobe, Aon, Bank of America, Capital One, The Depository Trust and Clearing Corporation (DTCC), EMC, Fannie Mae, Google, Intel, Intuit, McKesson, Microsoft, Nokia, QUALCOMM, Sallie Mae, SAP, Scripps networks, Sony Ericsson, Standard Life, SWIFT, Symantec, Telecom Italia, Thomson
Reuters, Visa, VMware, Wells Fargo, and Zynga.
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44fb714a38b9bcf3b819ca6957a89177
|
https://www.forbes.com/sites/robertvamosi/2012/07/20/the-best-hacking-film-you-havent-seen-yet/
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The Best Hacking Film You Haven't Seen (Yet)
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The Best Hacking Film You Haven't Seen (Yet)
When was the last time you saw a good documentary about the origins of computer hacking? Well, Code 2600, a new documentary film from a young filmmaker named Jeremy Zerechak comes really close to being both accurate and entertaining while at the same time scaring the pants off anyone who doesn't yet know that computer data is eternal and can be stolen by the wrong people if we're not careful. So it is fitting that the documentary, which is only available in limited release right now, will be shown next Friday at DefCon, the world's largest hacker conference and this year also celebrating its 20th anniversary.
Code2600 is a rich visual history of computer hacking's past as told by some of its principal participants.
The film opens with news of a Soviet satellite orbiting the earth in the late 1950s. The United States, which once thought itself on top of the world in technology, found itself behind. Suddenly, says Zerechak, the US military was keen on computer technology. He points out that in the 60s and 70s the military had all the best high-grade computer equipment, but after the computer revolution of the 80s and 90s that was no longer the case, with the military today buying off-the-shelf mobile devices.
Somewhere in those intermediate 60 years of military history we have the origins of computer hacking.
Like Steven Levy's 1984 classic book Hackers, the film explores early computer hackers who studied the original wired telephone switching system. One hacker, John Draper, discovered that the sound produced by an inexpensive Capt'n Crunch cereal toy whistle could interrupt the normal AT&T long-distance billing process. This 2600 hertz tone (hence the title of Zerechak's documentary) was very important to early hackers, known as Phone Phreaks, who wanted to access fast computers on the other side of the world without paying long distance charges. AT&T, at great expense, began to change its switching system.
Around the same time, the Homebrew Computer Club was starting in the San Francisco Bay Area. Member Bob Lash remembers a young Steve Wozniak showing off his early Apple computers – along with everyone else who was also building their own computers at the time. There was a lot of trial and error. But smart people where able to do very sophisticated things at home.
Throughout the film, Zerechak uses classic footage to capture a moment or to make a point. One reoccurring sequence is the 1950s black and white footage of Dr. Claude Shannon, mathematician, cryptographer and the father of information theory, with his metal mouse and its square maze. This was one of the first experiments in artificial intelligence, demonstrating how Theseus, his robotic mouse, could learn and adapt to a rapidly changing environment. This is an obvious metaphor for computer hackers who probe the phone networks, and later the Internet, simply wondering what is connected to what.
In one of his interview segments, Marcus Ranum, Chief Security Officer at Tenable Security, says that in the early days there was limited addressing. In other words, without a Google search, you had to know where on the Internet you wanted to go. Or, like the metal mouse, you had to search until you found something new or interesting. Often, you used your phone modem to find other phone modems. In looking for computers set with default "guest" accounts, hackers used war dialing -- randomly dialing phone numbers until they got a computer on the other end -- to access corporate or military computers. At the time, says Ranum, system administrators would laugh at logs that showed 800 attempts for access using the default word "guest." But that was when the Internet was still an intimate community of military, academics, and a few curious hackers, barely a few years removed from the days of the early ARPANET that predates today's Internet.
The upcoming shift, from in invite-only world to what we have today, is important; that's when hackers realized they were no longer alone on the Internet and had to go underground. Jeff Moss, founder of Black Hat and DefCon, describes in one of his interview segments growing up in the Bay Area in the 1980s and having one of the first affordable home computers that, with a modem, connected over the phone to various bulletin boards. He says that he could connect and no one would know his true identity or age; he would only be judged by what he wrote. For a 14 year old boy, Moss says it was liberating to be able to talk about sex and drugs.
Then in the early 1990s, Moss says AOL, Prodigy, and CompuServe destroyed the local community bulletin board, opening up what had been an exclusive neighborhood of thought and discussion to the entire world. It created a gold rush—it gave us spamming and phishing which both got started only once the masses starting surfing the net. It also threatened to push the curious hacker community into a dark corner -- until Moss founded DefCon in the summer of 1992. DefCon is a real-world computer bulletin board where communities of hackers and law enforcement talk openly about the Internet with an eye toward fixing what is broken.
Not every computer hacker is malicious; Moss makes the point that there are good plumbers and bad plumbers. And not all famous computer hackers are ex-felons like Kevin Mitnick. Zerechak's film includes footage of the Boston-based L0pht Heavy Industries members testifying before Congress in May of 1998, saying confidently that they had the knowledge to take down the Internet in 30 minutes (but also that they wouldn't do it). Today, one of the original members of L0pht, Peiter Zatko aka "Mudge," works for DARA. Another, Joe Grand aka "Kingpin," runs a hardware design studio in San Francisco. And even Moss, who wasn't part of Lopht, has served on President Obama's Homeland Security Advisory Council and is today ICANN's Chief Security Officer.
The film digresses into the important privacy issues we face today, with insight from Jennifer Granick, who at the time of production was a lawyer with the Electronic Frontier Foundation (EFF), and Lorrie Cranor, a researcher with Carnegie Mellon University's CyLabs. They remind us that with each digital transaction we're leaving digital breadcrumbs everywhere, and that we don't always have a say in how that information might later be used.
One of the really cool moments within the documentary is when penetration tester Gideon Lenkey shows off a mobile version of the Metaploit software running on an iPhone: Lenkey uses it to log into a Windows laptop in an open Internet Café. Lenkey also reveals some of his social engineering tricks he uses to get inside corporate campuses without explicit permission.
Capping the film are interview segments with security expert Bruce Schneier who says "the Internet is the greatest Generation Gap since Rock N Roll," and that our kids, who grew up with this technology already available to them, will be the best to decide how electronic devices should be used going forward.
Moss agrees: "People can't control what they don't understand. How do you evaluate the risk of a computer controlled car? Well, people don't really know. We've never had computer controlled cars before."
I should disclose that I am one of the handful of supporting computer security experts that appear throughout Code2600. Although my interview segments were shot at Black Hat DC back in January 2010, they hold up well today. Indeed all of the interviews Zerechak captured in the three and half years he worked on the film appear eerily prescient today.
Since premiering at the Cinefest Film Festival in San Jose, California, last March, Code 2600 has enjoyed a limited run exclusively in film festivals around the country. At the Atlanta Film Festival the documentary won a coveted Grand Jury Award. Zerechak is currently working on a major film distribution deal so hopefully Code 2600 will receive the wider audience it deserves. In the meantime, you can see it next Friday night, 8pm, July 27, 2012, at the Rio Hotel in Las Vegas, Nevada. Admission to DefCon 20 is $200, cash only (of course).
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fccfd4b3fa17bf7e86bf6729942dcbeb
|
https://www.forbes.com/sites/robertvamosi/2014/11/19/this-iot-device-is-actually-fda-approved/
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This IoT Device Is Actually FDA Approved
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This IoT Device Is Actually FDA Approved
Dr. David Albert, co-founder of AliveCor, is bucking a trend in IoT. Unlike smartwatches and health wearables that monitor the electrical energy from your heart, your electrocardiogram or ECG, his product is certified as a Class II medical device by the Food and Drug Administration (FDA).
In an interview with Forbes.com after his talk at RE:WORK Internet of Things Summit in San Francisco earlier this month, Albert who graduated from Harvard College and Duke University Medical School said he knew approval for his product was inevitable. But he said there is a lot of confusion in Silicon Valley. And in Washington.
The fear of FDA regulation is dampening the mood in Silicon Valley elsewhere, Albert said, adding it amounted to "a lot of worry for no reason." He wouldn't speculate why others are not also seeking FDA approval saying only that the wearable healthcare industry is running faster than federal regulators.
"No one cares whether their Fitbit is accurate or not," he quipped. "A point of here or there. With ECGs, that's different."
How accurate is his AliveCor product? In a 2012 study, one of eight academic studies published on the copmany website, Ubiquitous Wireless ECG Recording: A Powerful Tool Physicians Should Embrace', AliveCor's 1-lead readings where compared with lead-1 recordings from a traditional 12-lead clinical device in a hospital. In the end, the lead-1 results were the same on both devices, with AliveCor experiencing perhaps a little more signal noise. Such positive independent studies are required to earn a 510(k) Clearance from the FDA or a CE-mark in the European Union. AliveCor has both.
The concept is simple — AliveCor is a protective case for your iOS or Android phone with two sensors located on the backside. Feeling dizzy? Put your fingers (one from each hand) on the sensors and view the result on your phone in the AliveCor app. To avoid interference with pacemakers and other implantable defibrillators, the device can work with the mobile phone in Airplane mode.
Why is this important? Now patients with cardiovascular disease can check their readings almost anywhere. Atrial Fibrillation (AF) is a leading cause of stroke and is the most common heart rhythm disturbance, yet its signs are easy to miss. If during an AliveCor ECG reading AF is detected, a dialog box within the app appears: "Result is not a diagnosis but a possible finding. We recommend sending it for analysis or sharing it with a medical professional."
For $12 AliveCor provides a US Board Certified cardiologist who can review your medical data in as little as a half hour. Or you can forward the data to your current physician directly.
The AliveCor app also allows you to record additional symptoms and activities that lead up the possible finding such as having alcohol within the last 24 hours, caffeine in the last 12 hours, dizziness, exercise, palpitations, and/or shortness of breath. Data is stored on the device and on AliveCor's encrypted servers in the US and Europe. Your ECGs are searchable and can be favorite within the app. These notes over time can help your healthcare provider discover what's negatively affecting your health.
With effective home monitoring, IoT has the potential to disrupt healthcare as we know it, Albert said. He spoke during his presentation about the proliferation of smartphones, even in Africa, and how IoT devices such as his can extend basic healthcare to even the most remote regions of the world. He told the audience that the healthcare revolution is perhaps easier in developing countries because they don't have rigid health infrastructures, like the US.
"If healthcare costs continue to go up in the US," Albert said, "then patients will want to be empowered to do more on their own."
He speculated that with IoT and home monitoring, annual checkups will not be required. Instead patients will see their doctors only when necessary. This, he said, has the potential to disrupt the health insurance industry as well.
"We live in exponential times," Albert said.
|
7843bbbc6ae4e8afc35fcc681f580499
|
https://www.forbes.com/sites/robertvamosi/2015/02/05/farm-bred-iot-technology-goes-industrial/
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Farm Bred IoT Technology Goes Industrial
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Farm Bred IoT Technology Goes Industrial
It's the dead of night in rural Indiana when a truck pulls up alongside a central pivot irrigation system. Two men dressed in black get out with bolt cutters in hand, and over the next several minutes they cut and remove copper wiring from the irrigation system before driving off. On the open scrap market the two men stand to make between $300-$400 from their copper wire theft, while the farmer will have to pay up to $10,000 in parts and labor to get that system repaired and running again. According to Edward DeSalle, CEO of Net Irrigate, manufacturer of Wireless Agricultural Irrigation Monitoring (WAIM) technology, rural copper wire theft is a frequent occurrence, and not just in Indiana.
"The older model was someone driving around in a truck, or having a dedicated farm hand that would do nothing in the summer but make rounds to all the irrigation systems and check on that," DeSalle said. His solution is an easily mounted IoT device that proactively monitors irrigation systems in the field and can be managed remotely from any smartphone. "It's going to tell you of critical events that might cause you to take action," he said.
The copper wire theft prevention aspect of the Net Irrigate product WireRat looks for discrete changes in electrical states by sending its own electrical signal through the irrigation system. If the copper wire gets cut the signal is broken and the product notifies the user-designated recipients via voice, text or email of the change of state. For other mechanical concerns the product also includes accelerometers and various other sensors. The overall simplicity of the company's irrigation products have given rise to a new line of products built to deliver similar remote monitoring capabilities to any industrial, commercial and the Internet of Things devices.
On Monday Net Irrigate announced a new product xProxy, based on WAIM but built for HVAC, pumping systems, signaling devices, and motor controls. DeSalle said if you attach xProxy to a pressure switch, for example, whenever the pressure drops below 5 psi and the switch opens, an alert will be sent out. "You shouldn't have to involve full blown SCADA implementations, PLCs, Ethernet modules, modems, private networks, and knowledge of proprietary protocols," he said. "It should be as simple and affordable as adding a light bulb, relay, or switch."
Net Irrigate and xProxy are both platforms for notification services in the Cloud that enable any type of device to have remote messaging capability. "You don't do anything to the physical device itself; everything is done through an app on your mobile phone," DeSalle said. "Because it's all Cloud based, we're developing a very rich API around it so other hardware, other end-to-end device developers can easily integrate into this notifications platform," he said.
DeSalle started his Bloomington, Indiana, company in 2006 with products centered around flow meter telemetry, that is measuring the amount of water coming out of the groundwater wells and going out to the fields. He said the company still does some of that today although they evolved into a pivot and pump monitoring company, with the additional theft detection, because "we found the ROI was so much higher for the farmer."
In the case of copper wire prevent, WireRat is mounted on the end tower of the pivot irrigation system, and plugged into a terminal strip there. The end-user then opens a mobile app, punches in the serial number of the Net Irrigate device, gives the site a unique name, and assigns up to ten recipients voice, text, or email notifications.
Another scenario is that some of these irrigation systems get stuck in the mud and don't have kill switches, so it is only watering one spot in the field. "Say it happened at ten o'clock at night and you don't check it until the next morning," DeSalle said. "You've flooded a part of your field. You've wasted water and energy, and you've also ruined your crop in that area of the field as well." He said his PumpProxy product can provide preventative maintenance saving the farmer from a couple thousand to fifty thousand dollars depending on the crop.
A third scenario is alignment. "[A center pivot irrigation system] is a big, mechanized piece of equipment," DeSalle said, "so if a pivot gets out of alignment and twists up because the limit switches aren't working properly, you're looking at $10,000 in damages."
For xProxy, DeSalle gave the example of a simple limit switch that might open on a conveyer but "somehow gets to a point that it shouldn't get to." He said the customer would mount the xProxy product on the limit switch, enter the serial number into the mobile app, enter the message you want it to send when a particular condition occurs, enter a call list of who's going to get notified, and that's it. "It's that simple."
xProxy is currently in beta. The first commercial xProxy devices will start shipping in April 2015.
All of DeSalle's devices are based on a custom designed circuit board and use Verizon 2G "because we don't have a need for speed," he said. "Battery life is tied to the critical events, so if you have a situation where you have one critical event per week you're going to have a product that's going to last 7 to 8 years. And when you consume it, you change it out just like a lightbulb."
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5b945eeb153afb0d3fac2661fa949e13
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https://www.forbes.com/sites/robertwood/2010/09/10/what-to-give-irs-in-an-audit/
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What To Give IRS In An Audit
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What To Give IRS In An Audit
Provide receipts and other supporting information if the IRS asks, but what if you have memos and letters from tax advisers about whether you qualify for a deduction, audit risk or potential tax litigation? You don’t want to hand them a roadmap of arguments to make against you. “Work-product” protection means a taxpayer need not turn over documents created in anticipation of litigation. This protection has wide application, not just to tax litigation.
What should you do if the IRS asks for all your documents about a particular deduction, income item, or tax year? As part of vetting a particular tax position, you and your tax advisers may discuss what tax arguments the IRS could make. You might talk about audit risk and tax authorities pro and con. Traditionally, documents to be used in tax litigation and relating to the strength or weakness of a tax position are covered by work-product privilege so the IRS generally cannot get them. If the IRS issues an Information Document Request or subpoena, you may be able to legitimately refuse.
Work-product protection is different from attorney-client privilege. Attorney-client privilege protects communications between clients and their lawyers, whether or not those communications deal with anticipated litigation. Discussions with tax lawyers are privileged, but discussions with accountants are not, unless the accountants are subcontractors of the tax lawyers. Having lawyers hire accountants can bootstrap attorney-client privilege to accountant communications, which makes sense where tax litigation is imminent or might involve an IRS criminal matter.
Unfortunately, in U.S. v. Textron, Inc., the First Circuit Court of Appeals gave the IRS access to all documents not protected by attorney-client privilege, radically curtailing work-product protection. Textron memos and calculations dealt with the extent to which its tax reporting would pass muster in an IRS audit. The court found the documents were not prepared specifically for use in litigation so were fair game. Although this decision is binding only in federal courts within the First Circuit, there are signs the IRS may apply it nationally.
Companies and individuals alike should plan ahead for which tax issues on their returns are solid and which are not, and these may help:
Legend Everything. It may help if your notes and documents are legended at the time they are created with "work-product" protections. It may help if you can show they are for the specific use of anticipated litigation. Hire a Lawyer. If you solely deal with your tax lawyer and not your accountant, this should not apply. Having your tax lawyer act as the liaison for all communications can import attorney-client privilege. Separate Tax Dispute Files. Keep legal opinions and memos on tax matters in a separate file. Don’t just have a "tax" file. If you have a big tax issue (say a lawsuit recovery, a casualty loss or conservation easement), keep that file separate. Bifurcate Files. Segregate tax issues. Keep a file on each and don't comingle them. That way if you turn over a file you've limited the disclosure to the pertinent topic. Words vs. Numbers. If you maintain tax accrual work papers, limit them to numerical analyses. Keep tax memos in a legal file, preferably with your lawyer. Think of tax documents as tax returns and spreadsheets only, numbers rather than words. Keep legal issues associated with taxes (discussion of case law, IRS rulings, etc.) in a legal file. Corporate Counsel. In a company, keep legal opinions and tax memos with the general counsel's office. Keep legal opinions and tax memoranda in a file separate from accounting and financial statements. Timing. Work-product protection is more clear-cut after your return is filed. If you know you have a dispute, you have a much better argument you are preparing documents for the specific purpose of litigation.
You can reach me at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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7e1737ef4b9701c0d8311582e14a3ef1
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https://www.forbes.com/sites/robertwood/2010/12/01/richie-rich-tax-audits/
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Richie Rich Tax Audits
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Richie Rich Tax Audits
Leona Helmsley was already famous when she uttered the now immortal words: "Only the little people pay taxes." Still, this ushered the Queen of Mean into the ranks of tax history in ways neither she nor the maid who reported the quip could have contemplated. Mrs. Mean would later achieve additional notoriety in the estate planning department with her $12 million bequest to her beloved dog, a Maltese named Trouble. See Helmsley's Dog Gets $12 Million in Will.
The hotel baroness' forays into tax planning were most famously of the sales tax and business versus personal variety. Nevertheless, her little people quote surely sums up what many people feel about the rich: their rules are different. The IRS may have taken a page from Mrs. Helmsley's book in setting up its new Global High Wealth Industry Group. See 'Audits From Hell' Target Rich. Some now call this "The Wealth Squad," but I like to call it "The Rich Squad."
The Rich Squad is just getting started, but if you're rich (more about what that might mean below), start getting your ducks in a row. Otherwise you too could end up with a Maltese named Trouble. Keep good documents and records, since if you ever have to go down this road much of the audit process will be providing copious copies of just about everything.
How Rich is Rich? This may be the question of the ages, right up there with the meaning of life, but no one seems to be saying just how rich you have to be to get targeted by The Rich Squad. Still, there are some figures available. The Rich Squad is part of the IRS's Large Business and International Division.
That generally means more than $10 million in assets. Assets and income are not the same, of course. A business might have $10 million plus in assets, but only a tiny fraction of that in annual income. That applies to individuals too.
Judging from the other units of business the IRS's Large Business and International Division monitors, the assumption is clearly that The Rich Squad is not going to be dealing primarily (if at all) with people who simply have a large Form 1040 and nothing more. That's not their focus. In fact, there's a reason The Rich Squad germinated in the fertile soil of the IRS's Large Business and International Division.
They are adept at dealing with the complex business and investment entity structures that wealthy people so often use. For reasons of tax law, liability protection, hedging investment risk, anonymity, and succession planning, most wealthy people don't put all their eggs in one basket. The Rich Squad audit, therefore, would logically take into account the range of assets and entities across the family group.
Most observers and practitioners suggest that this program is still in its startup phase. Yet of the details that have emerged so far, some are very clear. The written questions and paperwork required are extraordinary. See IRS High-Wealth Industry Group Evaluation of Wealth Squad IDR. The IRS commonly issues Information Document Requests, usually abbreviated to "IDRs" by tax professionals.
If you get an IRS IDR you are not required by law to respond. However, you should always respond. If you don't, you will usually end up with a subpoena so it's foolish not to consider them with care. Usually that means having tax professionals help you. In the case of a Rich Squad audit, that conclusion is even more obvious, and you should probably seek the assistance of tax attorneys rather than accountants since attorneys have the added benefit of attorney-client privilege.
Wherever you fit on the wealth scale, you should be aware that the IRS is doing more to troll for compliance glitches with wealthy taxpayers. You should also be aware that when it comes to wealthy people and the IRS, to quote Casablanca, "I think this is the beginning of a beautiful friendship."
For more, see:
IRS 'Wealth Squads' On The Way
Is the New IRS Wealth Squad Coming for You?
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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f80adc9ab801dd88bdaceef71a960a2b
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https://www.forbes.com/sites/robertwood/2011/01/10/beware-each-form-1099/
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Beware Each Form 1099!
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Beware Each Form 1099!
It’s January, and that means Form 1099 season. Companies big and small are about to start churning them out and you can’t afford to ignore them. If you’re in business--even as a sole proprietor--you need to pay attention to issuing them or face penalties. See The Truth About IRS Forms 1099.
In fact, the burden on businesses to issue the ubiquitous little forms seems to be growing each year, and more will be required soon. See Adjust Recordkeeping Before Form 1099 Onslaught. Even cost basis is now required on some Forms 1099. See Forms 1099 For Cost Basis: What, Me Worry?
Watch Your Mail. If you’re an individual taxpayer you need to watch for each Form W-2 and 1099. People always seem careful with Forms W-2 since they are traditionally attached to tax returns showing total wages as well as how much in taxes was withheld. But I’m often surprised by how careless people are about Forms 1099.
Perhaps I’m being overly dramatic to suggest you “beware” of every form. After all, they are not rattlesnakes. Still, these forms matter and can trigger an audit of you’re not careful. Here are some tips.
Beware Changes of Address. Whether or not the payer has your correct address, the information will be reported to the IRS (and your state tax authority) based on your Social Security number. That means you have an interest in making sure payers have your correct address. Update your address directly with payers, as well as putting a forwarding order in with the U.S. Post Office. You'll want to see any forms the IRS sees.
Quite apart from notifying the Post Office, it’s a good idea to file a change of address form with the IRS too. The IRS explains how and why. See Topic 157 - Change of Address–How to Notify IRS. Use IRS Form 8822.
Beware Timing. Any Form 1099 sent to you goes to the IRS too--often a little later. The normal deadline is January 31 for mailing 1099s to taxpayers, but the payer has until the end of February to send copies to the IRS. Some payers send them simultaneously to taxpayers and the IRS. However, most payers mail taxpayer copies by January 31, and then wait a few weeks to collect all of the IRS copies, summarize them and transmit them to the IRS, usually electronically.
Beware Errors. The usual gap in time between your receipt of a Form 1099 and the receipt by the IRS means you may have a chance to correct errors. Don't just put arriving Forms 1099 in a pile; open them immediately. Suppose you get a 1099-MISC on January 31 reporting $8,000 of consulting pay, when you know you received only $800 from the company that issued the form?
Inform the payer immediately in writing (and by phone too if you can). There may be time for the payer to correct it before sending it to the IRS. That's clearly better for you. If the payer has already dispatched the incorrect form to the IRS, ask the payer to send in a corrected form. There's a special box on the form to show it is correcting a prior 1099--so the IRS doesn't just add the amounts together!
Missing One? Don’t Ask! Although keeping payers advised of your current address is a good idea, if you don't receive a Form 1099 that you expect, I wouldn’t request it. After all, if you are expecting a Form 1099, you know about the income and the amount. Just report that amount honestly on your tax return.
Reporting more income doesn't trigger a mismatch, so the IRS computers will have no problem with it. In contrast, if you fail to report something on your return that is reported on a Form 1099, that is a mismatch. But why not affirmatively request a Form 1099 you expect?
In my experience, if you call or write the payer and ask for a Form 1099, you may be buying trouble. The payer may issue the Form 1099 incorrectly. Alternatively, you may end up with two of the forms, one issued in the ordinary course (even if it never got to you) and one issued because you inquired. The IRS computer might end up thinking you had twice the income you really did.
For more about Forms 1099, see:
I'm Sending An IRS 1099: 1099 Are You Outta Your Mind?
IRS Form 1099 Wars
Let There Be Forms 1099
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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fbbe32a66fe5f4dd250321e1af9dbdcd
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https://www.forbes.com/sites/robertwood/2011/02/03/some-control-wont-convert-independent-contractors-to-employees/
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Some Control Won't Convert Independent Contractors To Employees
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Some Control Won't Convert Independent Contractors To Employees
Think of the independent contractor vs. employee line as a sheet of ice on a pristine winter lake. Skate lightly and you'll sail by smoothly. Tread heavily and you'll end up very cold, very wet and very unhappy. Contractor vs. employee disputes are messy and hard to describe to anyone who doesn't do them for a living.
In fact, who is an employee and why it matters can take on nearly religious fervor. But when you come right down to it, a lot of it is basic. Classically, an employee is someone working full time for wages, only for you, and doing what you say where, when and how you direct. Conversely, an independent contractor does a one-time job for you for a fee on his own schedule with his own tools, in his own way.
But given the blended roles, work habits and lifestyles of today’s new economy, these polar extremes meet in a very gray middle more times than you can imagine. The stakes are large and varied. Most obviously, employers pay wages to employees and must withhold taxes. Independent contractors are obligated to pay their own expenses and taxes.
Employers also normally have liability for the acts of their employees. That means if an employee driver causes an accident the employer is typically fully liable. If the same individual is an independent contractor, the employer is much less likely to have liability. An employer must comply with wage and hour laws, nondiscrimination, the provision of benefits, and other employment laws covering its employees, but in most cases is not required to do so for independent contractors.
An employer has unemployment insurance and worker’s compensation obligations for employees. In contrast, companies have great discretion in how they treat independent contractors. And the list goes on. For more, see Independent Contractor-Versus-Employee Issues Arise in Multiple Contexts.
Although the stakes are huge, determining who is an employee can be tough and can involve multiple legal tests. The IRS has a test and there are many other tests in play. See Who Cares About Contractor vs. Employee Status? Much of the debate is about control, and which details impact the kind of “control” that makes a worker an employee.
But some control isn’t fatal. Take the case of Empire State Towing and Recovery Ass’n v. Commissioner of Labor. There, the question was whether a towing company had to pay unemployment insurance for a lawyer it hired to do legal and lobbying work. If he was an employee, it did. If he was an independent contractor, it did not.
The judge ruled him to be an employee, but the Court of Appeals said no. He maintained a database for the association, did mailings out of his own office and did not work exclusively for the association. The lawyer could sign checks, but he had to get a co-signer over $500. He also had to submit periodic reports and attend meetings.
The appellate court said the test was about the company's overall control. There was no evidence the towing company controlled everything the lawyer did. Thus, the lawyer was not an employee. The court also noted that he was a professional subject to ethical rules and responsibilities. All of that made him a contractor for New York State Labor Law purposes.
If you are an employer, you may think small dollar disputes are not worth fighting. However, fighting even small worker status disputes can make sense. One adverse result often leads to another, so assuming that some small disputes aren't worth the effort or expense can be shortsighted. See Independent Contractor vs. Employee: Domino Effect of Recharacterization. Congress is looking to toughen up these rules further, so beware. See White House On Contractor vs. Employee: There Will Be Blood.
For more, see:
Miranda-Like Warnings To Independent Contractors?
Pervasive Contractor vs. Employee Issues and How to Address Them
Criminal Penalties For Misclassifying Independent Contractors?
Legal Requirements That Influence Control of Independent Contractors and Employees
Defining Employees and Independent Contractors: Don't Try This at Home!
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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8b25777d0c0abaa5e3d9f97247a525ba
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https://www.forbes.com/sites/robertwood/2011/02/09/irs-offshore-amnesty-second-last-chance/
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IRS Offshore Amnesty: Second (Last) Chance
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IRS Offshore Amnesty: Second (Last) Chance
It is not blanket amnesty, though criminal prosecution is highly unlikely. This and other points about the IRS's newest foray into foreign bank account disclosure are prompting questions. Announced February 8, 2011, the new "2011 Offshore Voluntary Disclosure Initiative" offers what IRS Commissioner Shulman called the "last, best chance" to come clean. Some observers thought the vaunted previous come hither program with its October 15, 2009 deadline was the last best. Now, there's another with its own set of rules.
Those who thought failing to meet the October 15, 2009 deadline meant the IRS would give no quarter may be happily surprised. After all, many taxpayers didn't know about that program until it was too late. Some couldn't quite pull the trigger to come forward given all the variables, especially the fact that the IRS wouldn't unconditionally commit to forgo prosecution.
In fact, the IRS hasn't promised not to pursue prosecution, although traditionally the IRS won't unless they already have an investigation underway before you step forward. That can militate for a "pre-clearance”—disclosing very little to the IRS until they confirm you are not under investigation. See Q&A 23.
For months now tax lawyers have known another program was coming. This program is less generous than the first, so most coming clean under Numero Uno should feel better than those who will now.
The Who? If you have a foreign bank account holding more than $10,000 at any time during the year, you must check the “yes” box on Schedule B to your IRS Form 1040 disclosing it. You must report your worldwide income including any foreign earnings even if they are taxed abroad. Plus, you must file an FBAR annually (Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts). Separate from tax returns, FBARs are due each June 30 for the preceding year.
Failing to do any of these is serious even if you didn't understand you were supposed to. You sign tax returns under penalties of perjury, so failures can be considered tax evasion or fraud with big civil and criminal exposure. The penalties for failure to file an FBAR are even worse: prison for up to ten years and criminal penalties up to $500,000 for each FBAR.
You could hope you're never discovered, but you can't run out the clock. The IRS generally has three years after a return is filed to audit or six years in cases of substantial (25%) understatements of income. If a tax return or FBAR is never filed, the statute of limitations never runs. See Even The IRS Has Time Limits.
The IRS could come after you 20 years later. And clearly, the IRS is getting more and more data from foreign governments and institutions to ferret out holdings by US persons.
The How Many? The IRS's first offshore disclosure program in 2009 corralled about 15,000 taxpayers, but only about 2,000 of those cases are wrapped up. See IRS Sets Offshore Amnesty, Part II. Since the October 15, 2009 deadline about 3,000 more have come in under the IRS's old-time one-off system of voluntary disclosure. Those 3,000 can opt to come in under the new deal. See Q&A 19.
These numbers may not seem too impressive, but they are when you consider the IRS only expected 1,000 or so in its 2009 deal. The IRS suggests disclosure deals with foreign banks are in the works, so this new initiative may shake more people out of the bushes. Even though the IRS won't say conclusively that entrants won't be prosecuted, the first program proved the IRS generally would not. Besides, there are few alternatives.
The Why? Not everyone with a foreign bank account is trying to hide income or assets from the IRS. Many people have their feet in multiple countries, inherited foreign accounts or married into them. Some US citizens have hardly ever lived in the US. Whatever the circumstances or reasons, US citizens and permanent residents (Green Card holders) are at risk if they don't report foreign income and accounts.
The What? The 2011 voluntary disclosure program involves paying back taxes and interest on any income you didn't report, plus a 20% penalty on those back taxes. There is also an FBAR penalty equal to 25% of the amount in the foreign account(s), as opposed to 20% before. See Q&A 8. You base that 25% on the year with the highest balance from 2003 through 2010. Some taxpayers can qualify for reduced 5% or 12.5% penalties, a positive change from the 2009 program for those who qualify. See Q&A 52 and 53.
Taxpayers will be required to complete a "Foreign Account or Asset Statement" for each previously undisclosed foreign account or asset during the voluntary disclosure period. See Q&A 25. Similarly, individuals disclosing offshore financial accounts with an aggregate highest account balance in any year of $1 million or more will be required to complete a "Foreign Financial Institution Statement" for each foreign financial institution with which the taxpayer had undisclosed accounts or transactions.
Penalty Reduction? The new 12.5% penalty is for those whose offshore accounts or assets did not surpass $75,000 in any calendar year between 2003 and 2010. See Q&A 53. Taxpayers who inherited a foreign account and never withdrew money from it or foreign residents who didn't even know they were US citizens might face only a 5% FBAR penalty. The 2011 program provides additional guidance for qualifying for these lowered penalties.
Plus, if you qualify for the 5% or 12.5% penalty but came in under the 2009 voluntary disclosure program, you may get a second bite at the apple. See Q&A 52 and 53. After providing the necessary information to the IRS, you may be able to get a redetermination.
The When? The new August 31, 2011 deadline is unlike the October 15, 2009 date. Taxpayers must not only come forward by August 31, 2011, but also file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the deadline. See Q&A 1. That deadline may be problematic to sweat the details, get counsel, review old tax returns and bank records, prepare all amended tax returns and file all required documents.
The paperwork can be considerable so don't wait until the last minute. Although I've seen some clients complete the entire process, many who came in under the 2009 program are still slogging through the paperwork. Everything takes time.
The IRS has already posted some helpful guidance. More forms and documents appear to be forthcoming, but keep checking the IRS website for more information.
For more, see:
IRS Offers New Amnesty For Offshore Tax Cheats
Still Have A Foreign Bank Account?
What To Do If Your Foreign Account Is A PFIC
Still More Foreign Account Worries!
Six Questions About Secret Foreign Bank Accounts
Ten Things To Know About Offshore Bank Accounts
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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99a205a386d4481ff7513ba5b9f8af0f
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https://www.forbes.com/sites/robertwood/2011/02/18/home-foreclosures-and-tax-returns/
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Home Foreclosures And Tax Returns
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Home Foreclosures And Tax Returns
Foreclosure and taxes are two unpleasant topics. Together, they're even worse. Yet as Americans turn to tax returns, a record number will be facing the tax impact of 2010 foreclosures. We're talking, of course, about debt relief income, also called discharge of debt income, cancellation of debt income, or just "COD."
If you owe $500,000 to the bank, but the bank forgives it, it's as if the bank just handed you $500,000. In general, Uncle Sam assumes you've got income when your debt is relieved. See 10 Things About COD Income. That means Uncle Sam wants his cut.
Exception for Home Mortgage. In response to the mortgage crisis, Congress exempted from income up to $2 million (per couple) in mortgage debt on a principal home, forgiven from 2007 through 2012. This exemption applies if:
You restructure "acquisition" debt on a principal residence--meaning debt you used to buy or improve a principal residence. If you used a home equity loan to buy a boat or play the stock market and the lender forgives that debt, it's not covered; You lose your principal residence in a foreclosure (but be careful: You may have income to the extent the canceled debt does not relate to the purchase or improvement of your principal residence); or You sell your principal residence in a short sale, where the sales proceeds are less than you owe and the lender writes off the balance.
If your lender writes off some of your mortgage, you must reduce your basis in the residence by the amount of discharged debt not counted as income. (But you don't have to reduce your basis below zero). Whenever you do sell, you can still use the usual tax benefits that apply to sales of homes. In general, you should qualify for excluding up to $250,000 (or $500,000 if you're married).
Example: Zeke and Lilly bought their house for $1 million in 2007, but in 2010 it is worth only $700,000. Unable to make payments on their $900,000 mortgage, they walk away in 2010. The bank sells it and collects $700,000, and forgives the additional $200,000 loan balance.
Tax-wise Zeke and Lilly have sold their home at a $300,000 loss, plus triggered $200,000 of COD income. The loss on a personal residence is not deductible (and can’t offset the COD income either). The $200,000 of COD income is taxable, but they can elect to exclude it and reduce their basis by the $200,000. The tax result is neutral--so they face no taxes from the foreclosure.
More Examples. As this example shows, you need to go through the numbers and the facts carefully. The IRS has helpful information on its website devoted to foreclosures.
Cautions. This COD relief works only for primary residences (no vacation homes). It doesn't apply to second mortgages or to home equity loans used for anything other than improvements to your principal residence.
Also, the relief isn't automatic. You must file IRS Form 982, "Reduction Of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)." Sophisticated people may be able to handle this, but I suggest professional help.
Bankruptcy and Insolvency. Apart from the special rules for home mortgages, there's a more general exclusion from COD income. If your debt is discharged when you're in bankruptcy as part of a court-approved bankruptcy plan, it isn't income. Again, the amount of the discharged debt reduces certain tax attributes, such as net operating losses or the basis of property. The rules are complicated and Form 982 is required.
Even if you are not in bankruptcy, if you are insolvent when your debt is discharged, there is no tax. Insolvency means your liabilities exceed your assets. To escape tax, your liabilities must exceed your assets by more than the amount of debt discharged.
IRS Forms 1099. Any government agency, financial institution or credit union forgiving a debt of $600 or more must issue a Form 1099-C to you and send a copy to the IRS. Don't ignore Forms 1099. If you receive one and disagree with the amount shown, write the lender requesting that it issue a corrected Form 1099-C showing the proper amount of canceled debt. If you believe the canceled debt isn't income to you because you're insolvent or for any other reason, you'll need to address this on your return.
You can reach me at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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01043b93f2f07f9b3e91b12dab7e1021
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https://www.forbes.com/sites/robertwood/2011/03/04/irs-foreign-account-disclosure-what-about-the-states/
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IRS Foreign Account Disclosure: What About The States?
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IRS Foreign Account Disclosure: What About The States?
You may be inundated with information about disclosing your foreign accounts to the IRS and making up for your past tax return and FBAR transgressions. After all, though there's a debate about whether IRS programs amount to bona fide amnesty, that's what you want. See IRS Offshore Amnesty: Second (Last) Chance. It's not inexpensive, but paying back taxes, interest, and penalties is a lot better than the alternative—having them track you down and lower the proverbial boom.
But one thing you're not inundated with is information about your state tax problems. As if worrying about the IRS knocking on your door wasn't bad enough, you have your friendly state tax collector(s) too. Since state income taxes are smaller than federal, you understandably worry about the IRS first and foremost.
Then you can deal with your state—in some cases, more than one! If you hire a tax lawyer to help you, he or she will almost always discuss state taxes only after resolving federal. But the assumption is that eventually state issues must be resolved too. After all, there's a free flow of information between the IRS and the states.
The IRS has had a general program of voluntary disclosure for decades as well as various programs aimed at assessing particular tax issues. For example, in 2003 the IRS established a "Voluntary Compliance Initiative" for taxpayers who had underreported their U.S. income tax liability using offshore payment cards (including credit, debit, or charge cards) issued by banks in foreign jurisdictions or offshore financial arrangements. See Rev. Proc. 2003-11, 2003-1 C.B. 311.
But it wasn't until the UBS prompted Swiss banking mess that the IRS (in 2009) came out with a pre-packaged program for voluntary disclosure of offshore accounts. See 2009 Offshore Voluntary Disclosure Program. About 15,000 people came forward under the IRS initiative, and most of these cases are still not finished. Some are, and it’s a great feeling to sign off on the IRS closing agreement after filing amended tax returns and FBARs and to really be through.
There was no prepackaged IRS program during 2010, but several thousand taxpayers still came forward on an individualized basis. Most of them are still being processed. More recently, the IRS has started another prepackaged voluntary disclosure program in 2011. See 2011 Offshore Voluntary Disclosure Initiative. Under this new 2011 Offshore Voluntary Disclosure Initiative (OVDI) , taxpayers can be more or less guaranteed they will not be prosecuted and they get correct their tax and foreign account transgressions. See Tax Amnesty: IRS Voluntary Disclosure Part Deux.
States Too? A few states have no state income tax, but most states have one. They want to get in on the foreign account gravy train. If you didn't report your interest income to the IRS from an undisclosed Swiss account you likely didn't report it for state tax purposes either. The IRS voluntary disclosure program involves amending up to eight income tax returns to fully disclose and report income. While you are preparing the amended federal returns, you should be prepared to amend your state tax returns too.
After the IRS's 2009 program, at least seven states (Alabama, Connecticut, Hawaii, Minnesota, New Jersey, New York, Ohio and Wisconsin) replicated the IRS program for themselves. California was a notable no-news state. But for the FTB's comments on the IRS's 2009 program see California Taxpayers Urged to Report Offshore Bank Income. Now, most states have something in place, either as a knock-off of the IRS program or as some other kind of me-too. Clearly, if you are filing amendments to your federal tax returns you should be filing (or at least considering filing) the state counterparts as well. In some states, this is mandatory. Even if it isn't mandatory, it is clearly good business.
Still, it's more extensive than just filing state counterpart amended returns. You may need to formally apply for admission to your state's voluntary disclosure program. Some states may (after getting information about you from the IRS) simply send you a bill, but don't count on it. In extreme cases, if you neglect your state tax responsibilities, the state could seek criminal penalties even though the IRS has blessed you.
In some cases, simply filing amended state tax returns noting that they are being filed to conform to the federal returns may be enough. If the state doesn't formally require anything else, that could be accepted and not call attention to the taxpayer. Elsewhere, that kind of stealth filing might be a major mistake. Whatever you do, get some help and attend to your state tax and disclosure issues too.
For more information, see:
Still Have A Foreign Bank Account?
What To Do If Your Foreign Account Is A PFIC
Still More Foreign Account Worries!
Six Questions About Secret Foreign Bank Accounts
Ten Things To Know About Offshore Bank Accounts
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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a2175ffe3cb2c8bf43f79e581b24ecd0
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https://www.forbes.com/sites/robertwood/2011/03/25/irs-on-what-is-a-foreign-account/
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IRS On What Is A "Foreign Account"
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IRS On What Is A "Foreign Account"
If you have a foreign bank account with $10,000 or more at any point during the year, you need to file a report annually. File a Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts--referred to as an FBAR. Separate from tax returns, FBARs are due each June 30 for the preceding year. See Ten Things To Know About Offshore Bank Accounts. Of course, you must report any income from the account (along with the rest of your worldwide income) on your tax return, and check the “yes” box on Schedule B that you have a foreign account.
But the FBAR disclosure is the detailed one. And penalties for failure to comply are distinct from the penalties for an incomplete tax return. FBAR penalties can be extreme: prison for up to ten years and up to $500,000 for each FBAR failure. FBAR rules have long been in the law--the Bank Secrecy Act dates to 1970.
Even so, many taxpayers and even professionals didn’t know about the rules until recently. Yet hoping you’re not caught--or that if you are discovered you can plead innocence--could require an awfully long wait (forever actually) before you’re truly in the clear. In fact, if you fail to file an FBAR, you can’t run out the clock.
The IRS generally has three years after a return is filed to audit or six years in cases of substantial (25%) understatements of income. See IRS Wins Big In Six Year Audit Push. But if a tax return or FBAR is never filed, the statute of limitations never runs. See Even The IRS Has Time Limits. That’s one reason many people who didn’t comply in the past are taking advantage of the IRS’s latest amnesty program. See IRS Offshore Amnesty: Second (Last) Chance.
Non-Accounts? The IRS published final regulations regarding FBAR filings that include some important clarifications. See Federal Register, February 24, 2011. For example, some types of accounts are not treated as foreign accounts triggering a filing obligation. Thus, an account with a financial institution in the U.S. isn’t “foreign.”
Likewise, an account with a U.S. institution that holds foreign assets doesn’t require a filing as long as you can’t directly access foreign assets maintained in a foreign institution. Also, officers or employees who have signature authority over their employer’s foreign accounts need not personally maintain records of the accounts.
For more, see:
Ten Facts About Tax Expatriation
Ten Ways To Audit Proof Your Tax Return
Six Questions About Secret Foreign Bank Accounts
IRS FAQs Regarding FBAR — Filing Requirements
FinCEN Issues Final Rule on FBAR Responsibilities
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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b12a738794f6a5279c614056e089c6ef
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https://www.forbes.com/sites/robertwood/2011/04/07/forms-1099-are-going-going-gone/
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Forms 1099 Are Going, Going, Gone
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Forms 1099 Are Going, Going, Gone
Congress passes many tax laws and sometimes thinks better of it. See Let There Be Forms 1099. The most recent example was the extra millions—piles and piles—of Forms 1099 that were supposed to paper American businesses, raking in money by the bushel from tax cheats. Who knew there would be such outrage to additional Form 1099 requirements, when the little taxing slips are already so ubiquitous?
There was outrage, but at least these expanded Form 1099 rules were repealed before going into effect. Congress passed H.R. 4, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.” That's not a great title, with an acronym that comes out "CTPRESOA."
But don't think it repeals all Forms 1099. If you're in business, you still must issue a Form 1099 to anyone whom you pay $600 or more for services during the course of the year. Services, not goods. And there are many specialized Form 1099 rules.
So why not add more? In 2010, Congress passed the Small Business Jobs Act of 2010 (P.L. 111-240) and the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148). Beginning in 2012, businesses were to issue Forms 1099 for payments for any type of property and gross proceeds. Plus, it wasn't just individual tax cheats being targeted but corporations too. Payments to corporations—previously exempt from reporting—would get slapped with a Form 1099 starting in 2012.
Then there was the rental income fiasco. For payments after 2010, a person receiving rental income from real estate was considered engaged in the trade or business of renting property for information reporting purposes. That meant Forms 1099 for payments of $600 or more to a painter or plumber. This rule was already in effect, although the forms wouldn't be issued until January of 2012 for 2011 payments.
Bad Idea. Almost right after passage, business groups started grousing for good reason. So these laws were repealed. Of course, there are still many Form 1099 rules. But at least the gross proceeds rule (a rule as big as the universe), the payments for property rules, and even the rental income rule are now history.
Revenue Offset. The awkward part of this repeal was the largely political but Einsteinian-sounding rule that for each subtraction to the tax system there must be an addition. As proof positive the Forms 1099 have teeth and encourage people to report income, the additional Forms 1099 required by the just repealed 2010 laws were supposed to add $21.9 billion to the IRS's coffers!
Big Bucks. For that reason, the new law—repealing the still new and not yet in effect 1099 laws—includes an offset for the lost revenue from repealing the 1099 provisions. It increases the amount of “excess advance payments” of the premium assistance credit for a taxpayer who doesn't receive health insurance through his employer (or his spouse's employer) and whose income falls between 100% and 400% of the federal poverty line (FPL). After Dec. 31, 2013, the repayment caps are increased for taxpayers with household incomes of at least 200% but less than 400% of FPL. Full repayment is required for taxpayers whose incomes exceed 400% of FPL.
For more about Forms 1099, see:
Ten Things to Know About 1099s
Got IRS Forms 1099? More Soon
Adjust Recordkeeping Before Form 1099 Onslaught
Forms 1099 For Cost Basis: What, Me Worry?
IRS Form 1099 Wars
I’m Sending An IRS 1099: 1099 Are You Outta Your Mind?
The Truth About IRS Forms 1099
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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430e053c33860924a7ff171bdd36dfee
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https://www.forbes.com/sites/robertwood/2011/04/11/avoid-irs-hit-list-of-tax-scams/
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Avoid IRS Hit List Of Tax Scams
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Avoid IRS Hit List Of Tax Scams
Most people don't think of the IRS as a consumer protection agency. But the IRS warns the public off tax ideas that can only get them into trouble. This is a good time of year for the IRS to release its annual "Dirty Dozen" of the worst tax scams. The IRS has even gone Hollywood with a video.
The promoters of blacklisted tax ideas can face heavy fines or even prison. Taxpayers who buy in can end up with huge bills for taxes, penalties and interest. Here's what to avoid.
1. Hiding Income Offshore. U.S. taxpayers must report worldwide income, even income taxed in foreign countries. Plus, you must disclose any foreign accounts you have. See IRS Will Find Your Offshore Account and Ten Things To Know About Offshore Bank Accounts.
2. Identity Theft and Phishing. Beware identity theft, since someone with your personal information can file a fraudulent tax return and collect a refund. If you believe your personal information has been stolen and used for tax purposes, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. A suspicious e-mail or an "IRS" Web address that does not begin with http://www.irs.gov should be forwarded to the IRS at [email protected].
3. Return Preparer Fraud. Most are honest. Dishonest return preparers may skim a portion of client refunds, charge inflated fees or make false promises. The IRS regulates paid tax preparers, including registration, competency tests, continuing professional education, and (soon) preparer tax identification numbers.
4. Filing False or Misleading Forms. Seeking refunds with phony information returns, like Form 1099 Original Issue Discount to claim false withholding credits can carry penalties or even criminal prosecution.
5. Frivolous Arguments. The IRS has a list of frivolous legal positions to avoid that have consistently been thrown out of court. See Ten Tax Protestor Claims To Avoid.
6. Nontaxable Social Security Benefits With Exaggerated Withholding Credit. Returns reporting nontaxable Social Security Benefits with excessive withholding may result in a $5,000 penalty.
7. Abuse of Charitable Organizations and Deductions. Abuses of tax-exempt organizations include attempts to shield income or assets from tax, controlling donated assets or income, and highly overvalued non-cash contributions. High penalties apply.
8. Abusive Retirement Plans. Abuses in retirement plans include attempts at avoiding IRA limits and not reporting early distributions. Also be wary of shifting appreciated assets into IRAs at less than fair market value or companies owned by IRAs.
9. Disguised Corporate Ownership. Some corporations and other entities disguise ownership, facilitating underreporting of income, fictitious deductions, non-filing of tax returns, money laundering, financial crimes, etc. Don't do it.
10. Zero Wages. Filing a false information return to lower taxes is illegal. Typically, a Form 4852 (substitute Form W-2) or a “corrected” Form 1099 improperly reduces taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported to the IRS. Such filings carry a $5,000 penalty.
11. Misuse of Trusts. Some promoters urge taxpayers to transfer assets into trust to reduce income subject to tax. Such trusts rarely deliver.
12. Fuel Tax Credit Scams. The IRS receives excessive claims for the fuel tax credit. Fraud involving the fuel tax credit is considered a frivolous tax claim carrying a $5,000 penalty.
Reporting Suspected Tax Fraud. You can report to the IRS on Form 3949-A, Information Referral, or by letter to the IRS, Fresno, California, 93888. Include specifics about who, what, how, when, amounts and any other helpful information. Your identity can be kept confidential.
Whistleblowers can also report fraud to the IRS on Form 211 Application for Award for Original Information, and may be eligible for a reward. Follow the procedures in Notice 2008-4, Claims Submitted to the IRS Whistleblower Office under Section 7623.
See also:
To Avoid Fate Of Wesley Snipes, Skip Tax Protester Arguments
Ten Tax Protestor Claims To Avoid
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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db41fd83b510c977da23ce0bc7105f89
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https://www.forbes.com/sites/robertwood/2011/04/13/quiet-foreign-account-disclosure-not-enough/
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"Quiet" Foreign Account Disclosure Not Enough
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"Quiet" Foreign Account Disclosure Not Enough
The IRS has made it clear that foreign account compliance is one of its major initiatives. Its current foray into foreign bank account disclosure was announced February 8, 2011. The 2011 Offshore Voluntary Disclosure Initiative offers what IRS Commissioner Shulman called the “last, best chance” to come clean.
In the past, many U.S. taxpayers familiar with Form 1040 didn’t focus on this issue. They, and in many cases even their professional tax advisers, may have entirely neglected to answer the question on Schedule B. It asks--yes or no--whether they had any foreign bank accounts. Alternatively, they may have inaccurately answered “no.”
Even if they ignored or fudged on that question, many did not file an FBAR (Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts) annually. Provided you have more than $10,000 in a foreign account, the FBAR is a separate detailed disclosure that must be completed detailing where and how much you have in foreign banks. Foreign accounts are aggregated so if you have more than the $10,000 threshold offshore, you must file the FBAR. FBARs are due each June 30 for the preceding year. Many angry U.S. citizens and permanent residents (holding green cards) didn’t even know about the FBAR form until recently. See IRS On What Is A Foreign Account.
But it’s getting harder today--maybe even impossible--to remain ignorant of these rules. In fact, today the government is doing a very good job publicizing all the multiple ways you need to report and account for your foreign accounts and assets. See IRS Says What To Do About Foreign Accounts On 2010 Returns.
Many people who didn’t comply in the past--regardless of whether or not they knew about the rules--are applying for a kind of limited tax-amnesty. See Tax Amnesty: IRS Voluntary Disclosure Part Deux. From now until August 31, 2011, taxpayers can apply for a form of relief. Yet with taxes, penalties and interest--and an FBAR penalty that is now 25% of the highest aggregate account balance over the last eight years--some say the penalties are too stiff.
These penalties may seem high until you consider the alternative. In fact, the penalties for coming forward under the current prepackaged IRS program pale in comparison to what the IRS could rain down on taxpayers caught violating the rules. Between income tax, interest, civil and criminal penalties for the tax and FBAR violations, jail time can be as high as ten years and fines can be multiples of the foreign accounts. See IRS Offshore Amnesty: Second (Last) Chance.
For all these reasons, most people want to come forward under the new IRS program, no matter how painful it may be. If the alternative is a full voluntary disclosure under the IRS program or a more limited (and one might hope less expensive) quiet disclosure, the choice may be easy. A quiet disclosure is usually described as filing amended tax returns and past due FBARs without coming forward to the IRS or truly “fessing up.”
The IRS has made its position on this point very clear. To the IRS, a quiet disclosure is no disclosure at all. See IRS Offers Amnesty For Offshore Tax Cheats. Nevertheless, some taxpayers may follow this path. There are no statistics on which to base a judgment whether it might work. The risk seems high.
You can reach me at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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6c3f2f90060a9e46195bccb536427eff
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https://www.forbes.com/sites/robertwood/2011/04/26/short-sale-tax-problems/
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Short Sale Tax Problems
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Short Sale Tax Problems
A short sale isn’t a new reality TV show about midget sellers. It’s just a house sale where the sales proceeds are not enough to pay off the mortgage. Often the lender will cancel the rest of the loan. The tax code generally taxes you when you are relieved of paying back a debt, treating it like cash paid to you. See 10 Things About COD Income.
Fortunately, there’s an exception for debt relieved in this circumstance, but it’s limited and can be tricky. Note that you can’t claim a loss deduction when you lose money on the short sale of a personal residence. But you may be able to avoid the normal discharge of debt income when your lender loses money.
For debt discharged between Jan. 1, 2007 and Jan. 1, 2013, the tax code allows you to exclude up to $2 million of mortgage debt forgiveness on your principal residence. To qualify, it must be “qualified principal residence debt.” You can use the tax exclusion if you restructure the acquisition debt on your principal residence, lose it in a foreclosure, or sell it in a short sale.
Even if you qualify, though, the relief isn’t automatic. You must file IRS Form 982, “Reduction Of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment),” and attach it to your return.
Example 1: Allen’s house is subject to an $850,000 mortgage for which he is personally liable. It has declined in value to $700,000. The lender agrees to a short sale for $700,000 and will cancel the remaining $150,000 of debt. Allen has $150,000 of debt discharge income, but as long as the debt was qualified principal residence debt, he pays no tax.
Example 2: Sallie bought a main home for $315,000, using a $300,000 mortgage loan. She later took out a $50,000 second mortgage to add a garage. Both the first and second mortgages qualify for the exclusion. But if Sallie used the second loan proceeds to pay credit card bills or college tuition, they wouldn't qualify. See IRS Publication 4681.
Note that this exclusion applies to canceled debt, not gain. In some short sales you may have gain from the sale instead of, or in addition to, income from discharge of debt.
Other Relief Provisions? Don't forget other tax relief provisions. You can exclude up to $250,000 of gain ($500,000 for joint return filers) from selling a home that’s your principal residence for two of the last five years. If you fail this two-out-of-five-year rule, you still might get relief if the sale was because of a change in your place of employment, health, or unforeseen circumstances.
Watch Out for Refis. Refinanced qualified principal residence debt is eligible for the exclusion up to the amount of the old mortgage principal just before the refinancing.
For more, see:
Home Foreclosures And Tax Returns
IRS: Ten Facts for Mortgage Debt Forgiveness
IRS: Home Foreclosures and Debt Cancellation
Foreclosed? The tax man may want his cut
Mortgage forgiveness tax relief differs from home-sale loss
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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8c8048cccb5bf2d0a719a9c5607867df
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https://www.forbes.com/sites/robertwood/2011/05/23/latest-foreign-account-prosecution-fuels-fears/
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Latest Foreign Account Prosecution Fuels Fears
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Latest Foreign Account Prosecution Fuels Fears
If you are fence-sitting and can't decide whether to disclose your past foreign account noncompliance to the IRS, the latest press release from the Justice Department and the IRS might just give you the necessary shove. According to the criminal information and plea agreement, Michael Schiavo, 53, of Westford, Mass., held an account in his name at HSBC Bank Bermuda from 2003 to 2008. In 2006, about $100,000 went from a partner's account at UBS in Switzerland to HSBC Bank Bermuda. See HSBC Client Schiavo Accused of Failing to Report Offshore Account to U.S.
Schiavo confessed that he knew this payment was taxable income, but he deliberately chose not to report it. The same was true of the interest income that accrued in the HSBC Bank Bermuda account. Schiavo shortchanged the IRS to the tune of $40,624 in taxes.
Observers are struck by the relatively small amounts of income and tax involved and the small size of the account. It ranged from about $65,000 to $150,000. But even more striking was the nature of the disclosure Schiavo made and how the government reacted to it.
Shiavo appears to have tried to make a "quiet" disclosure, meaning that he simply filed past due FBAR forms and amended his prior Form 1040 tax returns to report the account. What's wrong with that?
It isn't a voluntary disclosure and it seems to fly in the face of the OVDI, that's what. The OVDI is supposed to serve as a vehicle for avoiding criminal prosecution. Mr. Schiavo could have come forward but chose not to, instead silently filing his forms.
On its website, the IRS strongly encourages taxpayers to come forward and contains some stern warnings:
"The IRS is aware that some taxpayers have attempted so-called “quiet” disclosures by filing amended returns and paying any related tax and interest for previously unreported offshore income without otherwise notifying the IRS. Taxpayers who have already made “quiet” disclosures are eligible to take advantage of the penalty framework applicable to this initiative by submitting an application, along with copies of their previously filed returns (original and amended) to the IRS’s Voluntary Disclosure Coordinator (see FAQ 24) by August 31, 2011. Taxpayers are strongly encouraged to come forward under the 2011 OVDI to make timely, accurate, and complete disclosures. Those taxpayers making “quiet” disclosures should be aware of the risk of being examined and potentially criminally prosecuted for all applicable years." FAQ 15.
Schiavo faces up to five years in prison, followed by three years of supervised release and a $250,000 fine.
For more, see:
Bank Director Charged With Hiding Funds In HSBC Bermuda Account
"Quiet" Foreign Account Disclosure Not Enough
IRS Foreign Account Disclosure: What About The States?
Beware Foreign Trust Reporting to IRS
Don’t underestimate IRS’s new foreign tax rules
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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c86c823f3ce501e070ac940db66d6b00
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https://www.forbes.com/sites/robertwood/2011/05/24/irs-voluntary-disclosure-a-mistake-for-some/
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IRS Voluntary Disclosure A Mistake For Some
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IRS Voluntary Disclosure A Mistake For Some
Since it was announced February 8, 2011, the IRS has ramped up its 2011 Offshore Voluntary Disclosure Initiative (or OVDI) program in a big way. The program runs through August 31, 2011, and while it's available, generally promises limited amnesty for foreign account noncompliance. But the system is imperfect and inflexible. That inflexibility means it's ill-suited for some taxpayers, yet there's not much of an alternative.
Under the OVDI, taxpayers are subject to a penalty equal to 25 percent of the highest aggregate account balance on their undisclosed account(s) between 2003 and 2010. If the value of the undisclosed account(s) was less than $75,000 at all times during the tax years in question, the penalty is cut in half to only 12.5 percent. Moreover, in limited inheritance situations, a penalty of only 5 percent may be imposed. These account balance penalties are in lieu of the FBAR penalties that would otherwise apply.
On top of the FBAR penalties, participants in the OVDI are required to pay taxes and interest on any monies (such as interest income on foreign accounts) they previously failed to report. Finally, on top of the taxes and interest, they must pay an accuracy-related penalty equal to 20 percent of the underpayment of tax, plus interest. Some taxpayers could even owe failure to file and failure to pay penalties.
Eight Long Years. The OVDI covers 8 long years, 2003 through 2010, not the 6 years covered by the IRS's 2009 voluntary disclosure program. Another difference between the current program and the 2009 program: the penalty is 25 percent rather than 20 percent under the 2009 OVDI.
One-Size Doesn't Fit All? There's been some grumbling from taxpayers and practitioners about the one-size fits all nature of the OVDI. As this label suggests, it's not a good fit for everyone. Yet there are some high points.
For example, if you inherited the foreign account and never touched it, you may end up with only a 5 percent penalty, not 25 percent. Furthermore, if the only activity you had with the account was to get the account put into your name, it appears that you may still be able to qualify for the 5 percent penalty.
Examine Me! What can you do if you think the treatment you're receiving isn't fair? Not much, it turns out. With no rights to the IRS Appeals and no flexibility in the voluntary disclosure program, the only way the IRS can consider your arguments (for example, that you should only pay a 5 percent or 12.5 percent penalty rather than 25 percent), is to opt out of the voluntary disclosure program and ask for an examination. But there, the stakes will be high.
True, you might end up paying less than the 25 percent programmatic penalty. But you could also pay much more. The penalties for failure to file an FBAR are severe. Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation. Each year you didn't file is a separate violation.
For more, see:
2011 Voluntary Disclosure Initiative FAQs
Tax Amnesty: IRS Voluntary Disclosure Part Deux
IRS Offshore Amnesty: Second (Last) Chance
IRS: Tax evaders can avoid jail if they come clean
IRS Offers New Amnesty For Offshore Tax Cheats
IRS' Latest Offshore Accounts Voluntary Disclosure Program Wrong For Many Taxpayers
IRS Announces Amnesty to Declare Offshore Accounts
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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f2427034e6c8abe7eb3b65f289b0f3c0
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https://www.forbes.com/sites/robertwood/2011/05/31/when-too-good-tax-deals-become-fraud/
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When Too Good Tax Deals Become Fraud
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When Too Good Tax Deals Become Fraud
Whether or not you put “tax” in front of it, “fraud” has a decidedly unpleasant ring. But tax fraud seems especially bad, invoking the wrath not merely of private parties but of the IRS. Yet tax fraud can involve state taxes too, as an Iowa judge recently proved with the now shut-down Iowa filmmaker’s tax credit scandal.
An Iowan judge sentenced Minnesota film producer Wendy Weiner Runge to a whopping 10 years in prison over the now suspended Iowa credit. Shut down in 2009 after publicized abuses--including a page one article in the Wall Street Journal--the program promised big tax credits to filmmakers--a whopping 50% of production costs.
But the credits were widely transferred, with filmmakers swapping credits for cash to those having Iowa tax liabilities. It wasn’t even clear that the production costs on which the credits were based were legitimate. Audit figures revealed film budgets padded with expensive and unneeded items that were really being financed with the tax credits. See also Iowa Film Tax Credit Program Racked By Scandal.
Tax History Channel? On the federal side, trading in tax credits and deductions has a storied tradition. The most recent entrant into the tax scam hall of fame might just be the sham cemetery deals that are the subject of a current government enforcement action. The Justice Department has sued to enjoin Michael Strauss, Patrick Strauss and Joseph Barreiro from promoting sham cemetery investments that carry a big promised tax component. See Justice Department alleges tax scam run through sham cemetery in Va. in civil complaint.
Here’s how it’s supposed to work. You’re promised $5 of tax benefits for every $1 you invest! How can that be a bad deal? If the tax benefits don’t turn out to be real despite tax opinions to the contrary, that's how. See Why Tax Opinions Are Valuable.
The entities involved in the burial deal include Burial Specialists LLC, Memorial Specialists LLC, and Dignified Charitable Burials. According to government allegations, one of the entities bought a $90 million license giving rights to future profits from performing funeral services. The entity with the license would deduct a portion of the license’s value annually. See 3 accused of using sham cemeteries to run $35m tax scam.
Given the numbers, you might think those tax deductions would provide huge tax losses to the investors. Yet the government’s suit claims the license and its supposed value were grossly inflated and the purported tax benefits were fictitious. While it’s too soon to say if the government will prevail, going after a tax shelter is usually its death knell. Who wants to invest in something the government is trying to shut down?
A good way to cross check marketing materials and tax opinions that you may suspect are not truly independent is to get your own advice. Also remember that the IRS can be a good source, such as their annual hit list of tax scams. See Avoid IRS Hit List Of Tax Scams.
See also:
Filmmakers Sentenced In Iowa Film Office Scandal
'Defiant' Wendi Runge receives 10 years
To Avoid Fate Of Wesley Snipes, Skip Tax Protester Arguments
Ten Tax Protestor Claims To Avoid
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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037d29b27cc12ebeb2b7b34b1788f1e1
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https://www.forbes.com/sites/robertwood/2011/06/14/should-you-file-fbar-for-the-first-time/
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Should You File FBAR For The First Time?
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Should You File FBAR For The First Time?
Image via taxesforexpats.com
For more information on FBARs, see Primer For First Time FBAR Filers.
As June 30 gets closer, should you file your first FBAR? An FBAR, or Report of Foreign Bank and Financial Accounts, Treasury Form TD F 90-22.1, has emerged from the dusty stacks of federal form oblivion onto the front page. If you have foreign bank accounts holding more than $10,000 in the aggregate any time during 2010, you can face big penalties or even jail if you fail to file by June 30, 2011.
If you haven't disclosed your foreign account on your tax return and haven't previously filed FBARs, should you? If you are in the process of coming clean with your foreign accounts under the OVDI, the answer appears to be yes. Even if you've only done a pre-clearance, you should probably still file your FBAR. See FAQ 23.
But what if you won't make a voluntary disclosure under the OVDI? First, examine your assumptions. It may be shortsighted not to join the OVDI. The deadline is August 31, 2011, but many are extending until November 29, 2011. See IRS Updates Voluntary Disclosure Amnesty: What You Should Know.
Second, consider the alternatives and your facts. Starting to file FBARs now can appear to be a "quiet disclosure," something the IRS discourages. See FAQ 15. Here are some variables:
Did You Report All Income? If you reported all income from your foreign account(s) or wouldn't have had to pay additional U.S. tax even if you had (for example, because of foreign tax credits), filing an FBAR is less risky. In fact, the 2011 FAQs explicitly states that such filers are not required to enter the OVDI. See FAQ 17. In that case your tax returns might not have to be amended.
Arguably your sole failure was to file FBARs, so starting to file now makes sense. The IRS could assess penalties for your past failure to file FBARs, but you could explain and dispute the penalties. Alternatively, you could explain with your first FBAR that you previously were not aware of filing requirements.
Did You Check the Foreign Account Box? Another variable is whether you previously disclosed the existence of your foreign account on your tax return, even though you didn't file FBARs. If you did and you wouldn't owe more tax because you included the foreign income, you shouldn't need to file amended tax returns. Your sole failure was to file FBARs so you should start filing them now.
It's less clear what to do if you checked the "no" box on Schedule B to your tax return saying you don't have any foreign accounts, or if you didn't check either box. That makes your returns inaccurate and gives you more exposure. Most advisers would probably say that if you still wouldn't owe more U.S. tax, you should file the current year FBAR.
Not wanting to be discovered is a poor excuse for continuing to ignore the rules. If you reported all the foreign income—or wouldn't owe more tax even if you had—your big failure was the FBARs. You probably should start filing now, even though it could mean you'll face a dispute about penalties.
If you didn't disclose the account on your tax returns and owe tax from the past, you face a tough choice. Staying hidden forever seems unlikely and is highly risky. But if you file your first FBAR and the IRS asks for past FBARs and asks questions about your past returns, you can't lie. The choices are tough enough that you should clearly get advice from an experienced tax lawyer.
For the basic rules of FBAR filings, see Are You Getting Enough FBAR?
For more, see:
IRS To Let Some Bow Out Of Swiss Account Disclosure Program
The IRS Grills Taxpayers on Offshore Accounts
Latest Foreign Account Prosecution Fuels Fears
Still Have A Foreign Bank Account?
What To Do If Your Foreign Account Is A PFIC
Still More Foreign Account Worries!
Six Questions About Secret Foreign Bank Accounts
Ten Things To Know About Offshore Bank Accounts
Sacre Bleu! The Foreign-Account Penalty
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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917be24a54aa0552e6418c2a0bfebe9f
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https://www.forbes.com/sites/robertwood/2011/06/15/how-do-you-opt-out-of-irs-voluntary-disclosure/
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How Do You Opt Out Of IRS Voluntary Disclosure?
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How Do You Opt Out Of IRS Voluntary Disclosure?
Announced February 8, 2011, the IRS 2011 Offshore Voluntary Disclosure Initiative (OVDI) program is a welcome but conditional amnesty allowing taxpayers to come clean with foreign accounts and get into compliance with the IRS. The program runs through August 31, 2011, but in some cases can be extended until November 29, 2011. See IRS Updates Voluntary Disclosure Amnesty: What You Should Know.
Some find the system inflexible and fear they may be paying more than necessary given their facts. See IRS Voluntary Disclosure A Mistake For Some. There’s been discussion of “opting out” of the program to take your chances in audit, but it’s a topic fraught with fear. Now, however, there is guidance about opting out of the program that makes much of it transparent.
Program Basics. Under the OVDI, taxpayers are subject to a penalty of 25 percent of the highest aggregate account balance on their undisclosed account(s) between 2003 and 2010. If the value was less than $75,000 at all times during those years, the penalty is only 12.5 percent. See FAQ 53. Moreover, in limited inheritance situations, a penalty of only 5 percent may be imposed. See FAQ 52.
These account balance penalties are in lieu of all other penalties that may apply, including FBAR and offshore-related information return penalties. Plus, participants are required to pay taxes and interest on any monies (such as interest income on foreign accounts) they previously failed to report. Finally, they must pay an accuracy-related penalty equal to 20 percent of the underpayment of tax, plus interest.
Opting Out. Opting out of the program can make sense for some, though it involves taking your chances with an IRS examination. The IRS has published a separate guide detailing the rules and procedures for opting out. See Opt Out and Removal Guide for the 2009 OVDP and 2011 OVDI. The IRS illustrates pros and cons of opting out with examples. See FAQ 51.
Here are some of the rules.
Program Status Report. Before you can opt out, the IRS sends a letter reporting on the status of your disclosure and what you still must submit. If you’ve given enough data, the IRS will calculate what you would owe under the OVDI. You should provide any missing items within 30 days. Written Warning. The IRS sends another letter explaining that opting out must be in writing and is irrevocable. You have 20 days thereafter to opt out in writing. Taxpayer Submission. Within 20 days, the taxpayer opts out in writing and makes a written case what penalties should apply and why. IRS Summary. The IRS employee who has been handling your case summarizes it, agreeing or disagreeing with your view of penalties, and listing how extensive an audit he or she recommends. Central Committee. A Committee of IRS Managers reviews the summary and decides how extensive an audit to conduct. The IRS says “the taxpayer is not to be punished (or rewarded) for opting out.” See Opt Out and Removal Guide for the 2009 OVDP and 2011 OVDI. The Committee also decides whether to assign your case for a normal civil audit or to assign it for a Criminal exam. Interview? Some audits will include taxpayer interviews.
Bottom Line? The opt out procedure is helpful but still a bit daunting. If you are considering it, make sure you get some solid advice from an experienced tax lawyer about the nature of your facts. See FAQ 51.
For more, see:
Latest Foreign Account Prosecution Fuels Fears
IRS Foreign Account Disclosure: What About The States?
IRS Will Find Your Offshore Account
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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b27c1b5649e50020c91e144e6e322a57
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https://www.forbes.com/sites/robertwood/2011/06/18/giving-to-charity-great-staying-off-irs-radar-priceless/
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Giving To Charity? Great. Staying Off IRS Radar? Priceless.
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Giving To Charity? Great. Staying Off IRS Radar? Priceless.
The IRS has grown unforgiving of even small noncompliance with its charitable contribution rules. In fact, the IRS announced that approximately 275,000 tax-exempt organizations lost their exempt status as a result of failing to file the proper forms! See IRS Issues Guidance for Charities – and a Warning to Donors. That impacts all of us, not just the charities. If you don't double check that the organization you support is currently up to IRS snuff, you'll end up with no deduction and possibly other tax problems.
Here are five basic tips to help you plan:
1. Most Basic Rule: Make Sure the Organization Qualifies! This is fundamental: you can’t deduct contributions to individuals, political organizations or candidates. Look for the tax status of the organization. The IRS maintains a list of all charities. To check whether particular organizations are on the IRS list, search for charities or download Publication 78, Cumulative List of Organizations. The recent IRS guidance makes clear you can't rely on an old list.
2. You Can’t Deduct the Value of Your Time. This is so even if you bill by the hour and donate many hours of otherwise billable time to charity. Yet out of pocket costs are OK. Take the recent big victory of a cat lady in U.S. Tax Court. Her case stands for the rule that unreimbursed volunteer expenses are deductible, when incidental to charitable work for a qualified charity and properly substantiated.
3. Beware Charity Auction Purchases. If your donations entitle you to merchandise, goods or services, you can only deduct the amount exceeding the fair market value of the benefits you received. So if you pay $500 for a charity dinner ticket but receive a dinner worth $100, you can deduct $400, not the full $500.
4. Beware In-Kind Donations. Donations of property are usually valued at fair market value. Clothing and household items must generally be in good used condition or better. Vehicles also face special rules. If you make a property contribution worth $250 or more, you must retain a statement by the charity describing the property and its value.
If your noncash contributions for the year exceed $500, you must complete IRS Form 8283, Noncash Charitable Contributions, and attach it to your return. See Form 8283 Instructions. If you donate an item (or a group of similar items) worth more than $5,000, you must also complete Section B of Form 8283, which requires an appraisal by a “qualified appraiser” meeting IRS criteria, so allow time for these formalities.
5. Itemize. You can’t deduct charitable contributions unless you itemize deductions. Donations go on Schedule A to your Form 1040. Furthermore, you can only take a deduction of up to 50% of your adjusted gross income for most charitable contributions (30% in some cases), and there may be additional limitations on your ability to deduct these contributions.
For additional explanation of these and other charitable contribution rules, see IRS Publication 526, Charitable Contributions.
If you want the IRS’s take on valuation issues and how to value noncash items, see IRS Publication 561, Determining the Value of Donated Property.
See also:
IRS Issues Guidance for Charities – and a Warning to Donors
One Easy Way to Lose That Charitable Deduction
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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d0fcd7e7102b508304528241d3c0d081
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https://www.forbes.com/sites/robertwood/2011/06/21/can-irs-force-your-accountant-to-talk/
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Can IRS Force Your Accountant To Talk?
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Can IRS Force Your Accountant To Talk?
With all the talk of undisclosed foreign bank accounts and coming clean to the IRS, there’s renewed buzz about an age-old topic: what tax information can the IRS get? Under the U.S. Constitution, you can’t be made to testify against yourself. You can assert your Fifth Amendment rights and decline to answer IRS questions, even in front of a judge.
But documents are a different story. If you have documents---such as foreign bank account records---the IRS can obtain them with a summons, subpoena or search warrant. That may make you wonder if you aren’t better off with sensitive information in the hands of your lawyer. That’s especially true if you’ve considered a quiet disclosure.
Thanks to attorney-client privilege, if you confess to a lawyer you’re hiding income or assets offshore the IRS can’t make the lawyer talk. The IRS can’t even make your lawyer produce your documents with a summons or subpoena. See Latest Foreign Account Prosecution Fuels Fears. Such are the basics of the attorney client-privilege.
That should impact how you handle your case. If you ask your lawyer to obtain your foreign bank records, your lawyer can’t be forced to hand them over to the IRS. In contrast, if you obtain your own foreign bank records, they’re fair game.
Accountants, however, don’t have this privilege. If you make statements or provide documents to your accountant, he can be compelled to divulge it no matter how incriminating it is. The accounting profession lobbied for its own privilege in the 1990s, and a statutory “tax preparation” privilege was added in 1998 (IRC Section 7525(a)(1)). However, it is inapplicable to criminal tax cases so is of little value.
In sensitive tax matters, the answer to this quandary for the last 50 years has been the Kovel letter. Named after United States v. Kovel, it works like this: Your tax lawyer hires an accountant to work for him on your case. In effect, the accountant is doing your tax accounting and return preparation, but reporting as a subcontractor to your lawyer.
Properly executed, this end-run imports attorney client privilege to the accountant’s work and communications. However, recent IRS lawsuits are eroding this well-established principle.
In United States v. Richey, the Ninth Circuit Court of Appeals refused to protect an appraisal that a taxpayer, lawyer and accountant were trying to keep out of IRS hands. In United States v. Hatfield, a federal court in New York also cut back on Kovel, forcing disclosure of discussions between the lawyer and accountant.
Kovel is still good law and the practice remains widespread. But additional precautions, such as more rigid direction from the lawyer to the accountant and segregation of accounting and legal files, are good ideas.
For more, see:
Tax Amnesty: IRS Voluntary Disclosure Part Deux
Why Your CPA Might Blab
How Do you Opt Out Of IRS Voluntary Disclosure?
IRS Updates Voluntary Disclosure Amnesty: What You Should Know
IRS Voluntary Disclosure A Mistake For Some
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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e5b213cf030293df070bd1880d3a8d67
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https://www.forbes.com/sites/robertwood/2011/06/22/even-u-s-branch-accounts-abroad-trigger-fbar/
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Even U.S. Branch Accounts Abroad Trigger FBAR!
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Even U.S. Branch Accounts Abroad Trigger FBAR!
With June 30 mere days away, you may be fretting about FBARs, especially if it’s your first. See Should You File FBAR For The First Time? If you have foreign bank accounts holding more than $10,000 in the aggregate any time during 2010, you can face big penalties or even jail if you fail to file by June 30, 2011. The FBAR, Report of Foreign Bank and Financial Accounts (Treasury Form TD F 90-22.1) should not be taken lightly.
You should file if you are in the process of coming clean with your foreign accounts under the OVDI. Even if you’ve only done a pre-clearance, you should probably still file your FBAR. See FAQ 23. It's a tougher call if you have never filed and are not willing to clean up the past.
But must you file an FBAR even if the only foreign account you have is at a foreign branch of a U.S. bank? Yes, so says the IRS. If the branch is located in a foreign country, even if it is owned by a U.S. bank, it’s still considered a foreign financial institution for purposes of the FBAR rules. See Foreign Accounts With Domestic Banks Are Subject to FBAR Rules.
Here are some basics about FBARs:
No E-Filing/Receipt by Due Date. FBARs can’t be e-filed, and aren’t governed by the usual “mailing is filing” rule applicable to tax returns. Make sure your FBAR is received by June 30. Who Must File? U.S. taxpayers including citizens, residents, and entities that have foreign financial accounts totaling more than $10,000 at any point during the year. What’s an Account? Foreign bank and brokerage accounts are generally included, as are offshore mutual funds or pooled investments. However, hedge and private equity funds generally don’t count. An account with a U.S. institution that holds foreign assets doesn’t require a filing as long as you can’t directly access foreign assets maintained in a foreign institution. But as noted above, foreign branches of U.S. institutions are treated as foreign. FBAR Penalties. The penalties for failure to file an FBAR are considerably worse than tax penalties. Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation–and each year you didn’t file is a separate violation.
For more, see:
Are You Getting Enough FBAR?
IRS On What Is A "Foreign Account"
Latest Foreign Account Prosecution Fuels Fears
Still Have A Foreign Bank Account?
What To Do If Your Foreign Account Is A PFIC
Still More Foreign Account Worries!
Six Questions About Secret Foreign Bank Accounts
Ten Things To Know About Offshore Bank Accounts
Sacre Bleu! The Foreign-Account Penalty
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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7b7554a8a16b357f9ce1bb4a7fccfa9e
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https://www.forbes.com/sites/robertwood/2011/06/23/beware-irs-and-foreign-account-data-swaps/
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Beware IRS And Foreign Account Data Swaps
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Beware IRS And Foreign Account Data Swaps
I recently warned that the IRS will find your offshore account. If you have foreign bank accounts containing more than $10,000 at any time during the year, you have important IRS obligations:
Check the “yes” box on Schedule B to your IRS Form 1040 disclosing that you have a foreign account. Report your worldwide income including interest on the foreign account and other earnings even if the foreign income is taxed elsewhere. File an annual disclosure on Treasury Form, TD F 90-22.1 — commonly called an FBAR (Report of Foreign Bank and Financial Accounts). FBARs are due each June 30 for the preceding year.
Since you must sign tax returns under penalties of perjury, failures can be considered tax evasion or fraud. Tax evasion carries a prison term of up to five years and a fine of up to $250,000. Filing a false return carries a prison term of up to three years and a fine of up to $250,000. Failing to file a tax return carries a prison term of up to one year and a fine of up to $100,000. The penalties for failure to file an FBAR are even worse: a prison term of up to ten years and criminal penalties up to $500,000 for each FBAR.
If you failed to comply you can make a “voluntary disclosure” to the IRS. See Tax Amnesty: IRS Voluntary Disclosure Part Deux. But this should be done carefully, through a tax lawyer rather than an accountant because of attorney-client privilege. The IRS latest amnesty program allows you a way out if you are noncompliant with the maze of tax and reporting required for foreign bank accounts. See IRS Updates Voluntary Disclosure Amnesty: What You Should Know.
Wherever your foreign accounts may be, don't assume they will remain secret. The U.S. and many foreign governments are constantly streamlining information exchanges and more are clearly on the way. Yes, Switzerland is involved. Plus, at the recent Global Transparency Forum held in Bermuda, representatives of a whopping 101 countries met to review and assess their respective progress with the OECD's transparency guidelines.
While many may be focusing with laser like intensity on Switzerland, it is not the only game in town. As this report indicates we can expect continuing developments in global transparency.
For more, see:
How Do You Opt Out Of IRS Voluntary Disclosure?
IRS Updates Voluntary Disclosure Amnesty: What You Should Know
IRS Voluntary Disclosure A Mistake For Some
Should You File FBAR For The First Time?
"Quiet" Foreign Account Disclosure Not Enough
IRS Foreign Account Disclosure: What About The States?
Latest Foreign Account Prosecution Fuels Fears
IRS To Whistleblowers: "Thanks, But We're Withholding!"
Robert W. Wood practices law with Wood & Porter, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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a7a1104d229b211cc1f6ef51df4425ac
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https://www.forbes.com/sites/robertwood/2011/07/06/irs-may-find-innocent-fbar-violation-willful/
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IRS May Find "Innocent" FBAR Violation Willful
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IRS May Find "Innocent" FBAR Violation Willful
To the IRS, foreign account compliance is a major enforcement effort. The IRS 2011 Offshore Voluntary Disclosure Initiative offers what IRS Commissioner Shulman called the “last, best chance” to come clean. Many U.S. taxpayers---even with professional tax advisers---neglected to answer a pivotal question on Form 1040 Schedule B: do you have a foreign bank account, yes or no?
Some ignored the question or inaccurately checked “no.” Even those answering “yes” may not have filed an annual FBAR (Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts). Regardless of amounts, you must report all your income---even foreign interest. Plus, if you have one or more foreign accounts containing more than $10,000 in the aggregate, you must:
Check the “yes” box on Schedule B to your IRS Form 1040 disclosing that you have a foreign account.
File an annual disclosure on Treasury Form, TD F 90-22.1—commonly called an FBAR. FBARs are due each June 30 for the preceding year.
Many U.S. citizens and permanent residents didn’t know about these rules until recently. See IRS On What Is A Foreign Account. But it’s harder today to remain ignorant. See IRS Offshore Amnesty: Second (Last) Chance.
You can still enter the IRS OVDI program until August 31, 2011, though time is short. Unlike the 2009 IRS amnesty that required you only to enter the program by October 15, 2009, the current OVDI program requires to you supply everything---even payment---by August 31 unless you qualify for an extension (once granted, extensions allow up to November 29, 2011). See IRS Updates Voluntary Disclosure Amnesty: What You Should Know.
Much of the current focus in these waning weeks is on How Do You Opt Out Of IRS Voluntary Disclosure? But to opt out you first must enter the program. See Opt Out and Removal Guide for the 2009 OVDP and 2011 OVDI for the procedures for opting out. Others consider quiet disclosure, something that to the IRS is a dirty word.
As you evaluate alternatives, consider what the IRS says is “willful.” Among other things, this analysis will influence whether you can qualify for reduced penalties upon opting out. The IRS says willfulness can be a conscious effort to avoid learning about FBAR reporting. Form 1040 Schedule B refers to the instructions to Schedule B, which mention FBARs.
The IRS says that with hardly any diligence, the person could have learned of the requirements quite easily. A person with foreign accounts should read the information the government specifies in its tax forms and instructions. Failing to follow-up on this knowledge may provide evidence of “willful blindness.” See Excerpt From Internal Revenue Manual, 4.26.16.4.5.3, Paragraph 6.
The failure to learn of filing requirements coupled with efforts to conceal the existence of the accounts may lead to a conclusion that the violation was willful. Yet “[t]he mere fact that a person checked the wrong box, or no box, on a Schedule B is not sufficient, by itself, to establish that the FBAR violation was attributable to willful blindness.”
For more, see:
IRS Voluntary Disclosure A Mistake For Some
Even U.S. Branch Accounts Abroad Trigger FBAR!
Should You File FBAR For The First Time?
Can IRS Force Your Accountant To Talk?
Beware IRS And Foreign Account Data Swaps
IRS Foreign Account Disclosure: What About The States?
Latest Foreign Account Prosecution Fuels Fears
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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9b961cdaa1b688028111a33aebea5fd2
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https://www.forbes.com/sites/robertwood/2011/07/06/lap-dance-tax-v-amazon-tax/
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Lap Dance Tax v. Amazon Tax?
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Lap Dance Tax v. Amazon Tax?
Stripped bare, taxes are about raising revenue. With state and local tax revenues suffering, sales and use taxes are being more aggressively collected. In our increasingly wired society, much of the public discussion focuses on the Amazon Tax and taxes on product sales everywhere. But some revenuers are peeling off the last tax dollar from nearly every walk—or shimmy—of life.
In upstate New York, an adult juice bar (go figure the demographics) called "Nite Moves" lost a sales tax fight over its lap dances. See 677 New Loudon Corp., dba Nite Moves v. New York Tax Appeals Tribunal. The club eked out its earnings from admission charges, non-alcoholic beverages, and exotic dances. The latter had two revenue components. "Couch sales" were fees paid by a patron when a dancer performed in a private lounge. The dancers also paid the club for the privilege of performing.
The state claimed $125,000 of sales tax was due on the dances. The bar claimed the dances couldn't be taxed since state law exempted musical performances. The club claimed the dances fit snug as a bodysuit within precedent holding choreographed artistic performances exempt.
It wasn't exactly ballet, said the state. These lap dances weren't even choreographed, with each move outlined and planned. Sure, there might be a sort of, er, climax. These were just bump and grind routines that came naturally.
Did these "dancers" have artistic training, years of schooling and dance practice? Hardly. Most dancers relied on videos and fellow dancers to, as the court put it, "learn their craft." Then they saddled up.
Shorn of pretence and shame, the club had a cultural anthropologist testify about her extensive research on exotic dance. Nite Moves put its voluminous DVD collection into evidence to support the expert's opinion that these were live dramatic choreographed performances. Yet the court seemed bothered by the fact that the anthropologist had not actually seen the backroom couch dances at Nite Moves. The court then issued a unanimous opinion upholding the tax.
For more coverage of this revealing story, see:
Judges Fail to Appreciate the Art of the Lap Dance
Court: Lap Dances Aren't Tax-Exempt
'Stripping Is NOT Art': NY Ruling Means Lap Dancing Is a Taxable Service
Lap Dance Tax? Court Says Erotic Dances Are Not Art, Subject to Sales Tax
Taxman in $lap Dance: Hand in Clubs' Pockets
NY Court Rules Private Lap Dances Not Tax Exempt
NY Court Says Juice Bar's Lap Dances are Taxable
NY Court: Strip Club Has to Pay Taxes on Lap Dances Because They’re Not Artistic Performances
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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5aa84229f4e1f3ca293bac79758a9e5e
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https://www.forbes.com/sites/robertwood/2011/07/25/kinder-gentler-irs-lifts-innocent-spouse-barrier/
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Kinder Gentler IRS Lifts Innocent Spouse Barrier
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Kinder Gentler IRS Lifts Innocent Spouse Barrier
The IRS rarely changes its policy and goes back on something it's been fighting about for years in court. But despite years of brutal tax litigation, that's what the IRS did here, announcing a marked easing of its strict policy on innocent spouse claims. The winds of change were blowing when the IRS launched a review earlier this year.
But who knew it would blow into a tornado. Why care about innocence? Most taxpayers file returns jointly, and don’t think about a lying, cheating or disappearing spouse until the IRS asserts joint liability. My response: Consider Tax Filing Status Carefully. After all, breaking the joint liability presumption is tough and often requires going to court.
Even then, you’ll lose if you don’t act in time. Up until now, the IRS required claims for innocent spouse relief within two years of first IRS collection activity. But you might have no idea the IRS was trying to collect if your spouse was concealing it! Previously, the IRS said that was too bad: two years is two years. It was too late to bring an innocent spouse claim and have it considered on the merits.
Taxpayers tried to get around the two-year rule with "equitable relief" claims, but the IRS said these too had to be brought within two years. But now the IRS says its rigid two-year rule for equitable relief is out the window. (The two-year rule for innocent spouse claims under other provisions continues to apply.)
This change doesn't mean you'll be labeled innocent or let off the tax hook, but it does mean you'll be one step closer. What's more, the IRS is fixing this retroactively. Here are five points:
The IRS will no longer apply the two-year limit to new equitable relief requests or requests the IRS is currently considering. If your equitable relief request was previously denied just because of the two-year limit, you can reapply as long as the tax statute of limitations is still open. See IRS Form 8857. The IRS will not apply the two-year limit in any pending litigation involving equitable relief innocent spouse claims. Even if IRS litigation over innocent spouse relief is final, the IRS may suspend its collection activity in certain cases. The change to the two-year limit is effective immediately, and details are in Notice 2011-70.
In considering who is innocent, the IRS and the courts look at a number of factors including whether:
You are still married; You'll endure economic hardship; You knew that the IRS wasn't paid; You have subsequently complied with income tax laws; You enjoyed significant economic benefits because taxes weren't paid; You have been the victim of spousal abuse; and Whether you are in poor health.
For more, see:
Publication 971
Read Innocent Spouse Expose Now!
More Timing Disputes Over Innocent Spouse Relief
IRS Tougher On "Innocent" Spouse Relief
IRS To Give Innocent Spouse A Facelift
The Marriage Trap
Tax Court To IRS: "Stop Denying Innocent Spouse Relief!"
IRS Accused Of Unfeeling Treatment Of Abused Spouses
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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27eafcb5b0ecf0e52941e650c037d140
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https://www.forbes.com/sites/robertwood/2011/08/01/how-bad-is-your-tax-shelter/
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How Bad Is Your Tax Shelter?
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How Bad Is Your Tax Shelter?
Image by JD Hancock via Flickr
No one wants to lose money, and losing money while trying to save it is especially frustrating. What if you buy something you think will save you taxes only to find you were defrauded? You may be tempted to sue. But at the very least, you might assume you can deduct the cash you lost in the shelter! See Seeking Shelter In Tax Shelters?
Not always. That's the lesson of Vincentini v. Commissioner. There, the court ruled an investor who thought he was buying tax benefits couldn’t even claim a theft loss when the investment imploded and the promoters went to jail. What’s more, although he relied on a CPA, his reliance was "unreasonable" so penalties applied.
Sound harsh? The tax deductibility of theft losses isn’t always controversial, but is touchy with tax shelters. There’s a long tradition of tax shelter investors trying to deduct all that’s promised to them, but when the deal goes south and their tax deductions fail, claiming a theft loss deduction.
Perhaps it’s a Hail Mary pass, but it has a certain appeal. “Dear IRS,” the investor might say, “if this shelter is as bad as you say it is, I was defrauded out of my money.”
Tax shelters are defined by the tax code to include any plan or arrangement having a significant purpose of avoiding or evading federal income tax. That sounds incredibly broad---a huge number of transactions have tax ramifications as a significant purpose! The key is whether the tax ramifications are the reason for entering into the transaction. See When Too Good Tax Deals Become Fraud.
You can deduct theft losses not compensated for by insurance. For an individual, the deduction is limited to losses in a trade or business, a transaction for profit, or losses from fire, storm, shipwreck, casualty or theft. See IRC Section 165(c). You count a loss from theft during the year you discover it. See IRC Section 165(e). But if you have a claim for reimbursement with a reasonable prospect of recovery, you can’t claim any loss until it’s clear it won’t be reimbursed.
Dominick Vincentini invested in shelters with Anderson Ark & Associates (AAA). On his 1999 return, he claimed a partnership loss of $907,470, offsetting $796,629 in early distributions from his IRA. His return was prepared by Gary Kuzel, a CPA recommended by AAA. Kuzel also helped document the shelter. See CPA Sentenced in $120 Million Tax Shelter Case.
In early 2001, AAA principals were arrested and indicted for various crimes. Many were convicted by 2002 and ordered to pay restitution in 2004. See Four Defendants Sentenced in $120 Million International Tax Shelter Case. In 2003, the IRS disallowed all Vincentini’s shelter losses so he amended his 1999 return and claimed a theft loss deduction.
The IRS denied that too, saying he still might recover. The Tax Court agreed, noting Vincentini had not shown there was no reasonable prospect of recovery in 2001. See Memorandum Findings of Fact and Opinion and Supplemental Memorandum Opinion. The Tax Court also upheld penalties. Since Vincentini knew Kuzel was affiliated with AAA, he shouldn’t have relied on him.
On appeal to the Sixth Circuit, Vincentini argued that the convictions and presence of court-appointed lawyers in the criminal trials made it clear Vincentini was never going to see a dime. There still might be a recovery through a civil suit, said the court. The Sixth Circuit also upheld the penalties. Vincentini conducted no research on Kuzel's professional background or his ties with AAA.
Bottom line? Theft loss nuances are one more reason to stay away from tax shelters.
For more, see:
Two Out of Three Not Good Enough
Man Invests $1.7M with Author of Financial Success Audiotapes and Shockingly, Things End Badly
Couple acquitted of tax fraud
Seeking Shelter In Tax Shelters?
Tax Shelters Not Über Alles
Know Tax Shelters When You See Them?
To Avoid Fate Of Wesley Snipes, Skip Tax Protester Arguments
Ten Tax Protestor Claims To Avoid
IRS: Topic 515 - Casualty, Disaster, and Theft Losses
IRS: Abusive Tax Shelters and Transactions
IRS: Abusive Tax Schemes – Criminal Investigation
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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f8af9183d0baf136b9152a1e330947b4
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https://www.forbes.com/sites/robertwood/2011/08/16/irs-narrows-independent-contractor-relief/
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IRS Narrows Independent Contractor Relief
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IRS Narrows Independent Contractor Relief
Image via finetsolutions.com
If you treat workers as independent contractors who are really employees and fail to withhold payroll taxes the IRS can reclassify them and assess potentially crippling retroactive penalties. For many, a key way out of this mess is Section 530, a tax relief provision that can let you keep even an erroneous classification. Under this provision, a business can treat an individual as an independent contractor if:
It never treats the person as an employee; It does not treat any other person with a substantially similar position as an employee; All required federal tax returns and Forms 1099 show the worker as an independent contractor; and The business had a “reasonable basis” not to treat the person as an employee.
One can satisfy the fourth requirement by reasonably relying upon:
Judicial precedent or IRS rulings; A past IRS audit; or A long-standing practice of a significant segment of the relevant industry.
Plus, if you cannot meet any of these three you can still show a reasonable basis some other way. It is no secret that the IRS finds this a frustrating provision that allows some businesses to go on misclassifying workers forever. Congress has several times considered repealing Section 530 altogether.
In the meantime, the IRS is considering timing and whether the business was actually relying on one of the permitted items at the time it made its worker status decision. In Program Manager's Technical Advice, “Section 530: Reasonable Reliance Safe Harbor,” the IRS considers whether an employer must show it relied on the safe harbor before it engaged a worker to provide services.
Section 530 relief would seem to be available only if you established you had in fact relied, but when? At the time you classified your workers, suppose you had little money and knew you could not afford to pay payroll taxes so intentionally flaunted the rules, knowing all the time the workers were entirely subject to your control and therefore employees.
Later, it turns out that judicial precedents, an industry practice or some other basis arguably brings you within Section 530 relief. Must you show that you did not initiate your reliance too late? A key question is whether the taxpayer must demonstrate that it reasonably relied on a safe harbor before engaging the worker to perform services.
One case raising this issue is Peno Trucking v. Commissioner, where the Tax Court held that the company failed to show it actually relied on relevant judicial precedent. Reversing the Tax Court, the appellate court found the trucking company could have relied on an Ohio ruling when it made its employee versus contractor decision because the Ohio ruling was rendered before the tax years in question. The timing issue satisfied, the Sixth Circuit went on to rule that Ohio had used the same 20-factor common law test.
The IRS doesn’t like this “could have” approach. In the recent Program Manager's Technical Advice, the IRS stated that an employer must demonstrate actual and reasonable reliance before the employment decisions were made. Moreover, the IRS says that employers must demonstrate reliance in fact.
In the case of an industry practice, the taxpayer would have to show it was aware of the practice before making the decision to treat the workers in question as independent contractors. In addition, the taxpayer would need to show the industry practice was in fact the basis of the decision and that relying upon it was reasonable.
Bottom line? Some business won’t meat these tough standards. Expect more worker status controversies.
For more, see:
Independent Contractor or Employee? The 100-Year War
Some Control Won't Convert Independent Contractors To Employees
Ten Mistakes to Avoid Over Independent Contractors
Independent Contractor Versus Employee Issues: Bad, Ugly, and Uglier
White House On Contractor vs. Employee: There Will Be Blood
Miranda-Like Warnings To Independent Contractors?
Publication 15-A, Employer’s Supplemental Tax Guide
Publication 1779, Independent Contractor or Employee
Publication 1976, Do You Qualify for Relief under Section 530?
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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dcf37d1e52d9629587f283f70a93bc6b
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https://www.forbes.com/sites/robertwood/2011/09/17/is-your-employer-provided-cell-phone-taxable/
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Is Your Employer-Provided Cell Phone Taxable?
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Is Your Employer-Provided Cell Phone Taxable?
Image via webhaber
If your employer gives you a cell phone and makes you carry it, how could it be income? Good question. Answer, ask the IRS.
First, remember that just about everything is income. A gift isn’t income---but it must come from detached and disinterested generosity. The IRS thinks virtually nothing your employer gives you is motivated by detached and disinterested generosity.
Fortunately, there are rules under which some items are not taxed even though they are clearly not motivated by detached and disinterested generosity. Some fringe benefits are not income to employees even though the employer is deducting their cost. A prime category is working condition fringe benefits, and that brings us to cell phones.
In Notice 2011-72, the IRS explains that cell phones are often provided by employers not to compensate employees but with what the IRS calls non-compensatory purposes. Translated: the employer is doing it for its own business reasons.
The most common example is where the employer needs to contact the employee at all times for work-related emergencies. Another is if the employer requires the employee to be available to speak with clients when the employee is away from the office. Yet another is where the employee needs to speak to clients in other time zones outside the employee’s normal work hours. All those seem like good reasons for an employer to provide a cell phone.
Plainly, the employer is not trying to compensate the employee. The way the IRS looks at it, in all of these cases the employee would be able to deduct the cost of the phone as a business expense if he or she had to pay for it. That, curiously enough, means that when it’s the employer who pays for it, the value of the phone isn’t income to the employee. It’s considered a working condition fringe benefit.
Does this "good reason" rationale apply to everything else your employer provides? Not hardly. The IRS’s phone notice says its working condition and de minimis fringe benefit analysis in the notice only apply to employer-provided cell phones, not other items.
Phone Home? What if rather than providing a phone, your employer reimburses you for using your own phone? The IRS issued a memo to IRS auditors explaining that if your employer reimburses you for using you own phone, the same kind of analysis should apply. That means if the employer is reimbursing you because it requires you to be reachable, to take business calls, etc., the reimbursement shouldn't be income. But the IRS tells auditors to make sure the employees have the right cell coverage.
For example, if you claim you are reimbursed because your employer requires you to make overseas calls from your cell, you'd better be sure you actually can make those international calls! Similarly, auditors are to watch for odd spikes in reimbursements. But one thing that's not a problem? If your employer reimburses you for your monthly no limit cell service, and you use it both for business and personal calls.
For more, see:
Guidance Issued on Tax Treatment of Business Cell Phones
IRS, Employers Finally Connect on Cell Phone Issues
IRS Memo on Employee Cell Phones
IRS Targets Employer Provided Cell Phones
Are Employer Provided Cell Phones Coming Soon to Definition Of Compensation?
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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5f5e40e62a842cd1f87a7618fe29592a
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https://www.forbes.com/sites/robertwood/2011/09/27/snookered-by-the-snooki-tax-credit/
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Snookered By The Snooki Tax Credit?
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Snookered By The Snooki Tax Credit?
Image via zeroscape.org
With Snooki pervading popular culture, it should be no surprise that some are for and some are against. More broadly, Jersey Shore and its cast of improbable stars are loved and loathed in equal measure. Few can doubt that the Garden State has benefited by the ubiquitous program. That’s the situation, and business, after all, is business. Or as another Italian American once said, “It's not personal. It's business.”
Whatever your view, it seems clear the show’s producers and MTV are benefiting big time. In exchange, the Clam State--another of its names--gave out tax incentives as part of the Snooki-sized package. Yes, New Jersey’s Economic Development Authority gave a $420,000 subsidy to the show for filming there.
Now that episodes have filmed in Miami and Florence, it's not clear Jersey needed the ensemble cast on its home turf. Groups thinking the show stands for the wrong things got miffed, creating a situation. Some wanted the Jersey Shore tax credit vetoed by Governor Chris Christie. He was in a pickle, talking Jersey tough about revocation, making everyone unhappy regardless of which side of the Situation’s abs you find yourself. See Snooki to Snookered: States' Film Tax Credits Produce Embarrassment.
And now, according to The Star-Ledger, Governor Christie made the credit an offer it couldn't refuse. Yup, he's vetoed it here, standing up for all that's right in the Snooki State. (The "Garden State" moniker on license plates always was a puzzler. Garden state? Even the Governor thought it didn't fit.)
Was the Governor's Situation unrelated to his possible Presidential bid? See New Jersey's Christie Entering Presidential Race? Since I'm not sure, I'll have to consult my copy of The Rules According to JWOWW.
This Garden State Film Flap may have created a situation, but film flaps are hardly new to states hoping to entice work and publicity. They face embarrassment when the result isn’t exactly Gone With The Wind. Jersey isn’t the first state to look silly. The Iowa filmmaker’s tax credit was shut down after a scandal over abuses. Hardly a Field of Dreams.
An Iowa judge even sentenced a producer to 10 years over the flimflam film tax credit. Iowa's credits were widely transferred and swapped for cash. See When Too Good Tax Deals Become Fraud. Production costs were padded and unneeded items were financed. See Iowa Film Tax Credit Program Racked By Scandal.
Trading in tax benefits happens at the federal level too. The Justice Department sued to prevent sham cemetery investments with big promised tax benefits. When you’re promised $5 of tax benefits for every $1 you invest, something besides the bodies must stink.
A good way to cross check tax benefits you suspect are not real---call them tax special effects---is to get your own independent tax advice. See Why Tax Opinions Are Valuable. The IRS can be a good source too, including their annual hit list of tax scams. Don't get snookered.
For more, see:
Goofiest Tax Credits, From Snooki To Solyndria
N.J. Gov. Christie vetoes tax credit for 'Jersey Shore'
Sarlo Seeks To Expand Program That Gave 'Jersey Shore' Tax Credit
Iowa Takes New Look At Films Despite Despite New Jersey Flap
Here's The Situation: Call To Block Jersey Shore Tax Credit
When Too Good Tax Deals Become Fraud
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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1007894353366d135f9f456cfd28b55c
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https://www.forbes.com/sites/robertwood/2011/10/03/fail-to-pay-payroll-tax-go-to-jail/
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Fail To Pay Payroll Tax: Go To Jail
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Fail To Pay Payroll Tax: Go To Jail
Image via theexpgroup Do not pass go, do not collect $200, go directly to jail. When an employer withholds taxes but fails to send this trust fund money to the IRS, the agency gets serious. If you fail to pay and are a “responsible person” the IRS can pursue you personally even if you aren't an owner of the business. In fact, the IRS can assess a Trust Fund Recovery Assessment, also known as a 100-percent penalty, against every responsible person. See What Is The Trust Fund Recovery Penalty? You can be pitted against all the other responsible persons, all of whom will be scrambling to avoid paying. The company is billed for the tax plus responsible persons can each be billed for 100 percent. Whoever pays first loses. The IRS doesn't like habitual offenders. The practice of using withheld taxes as working capital is sometimes referred to as “pyramiding.” To make sure this doesn’t occur again, the government can seek to enjoin the bad behavior. See IRS Pursues Payroll Tax Pyramiding.
Payroll tax violations can even become criminal. Take Peter Labovitz, who was sentenced to six months in prison for failing to pay employment taxes. He plead guilty to willfully failing to pay over the income taxes and Social Security (FICA) taxes due for Connections Newspapers LLC which had a string of 15 community newspapers in Virginia and Maryland. See President of Connection Newspapers Sentenced to Prison.
Labovitz ran day-to-day operations, directed employees, approved payments and made financial decisions. Between 2002 and 2008, he collected $940,000 in payroll taxes but failed to hand the money over to the IRS. Labovitz was sentenced to six months in jail and one year of supervised release of home confinement. He was also ordered to pay $647,510 in restitution to the IRS.
The IRS rarely pursues criminal charges, but these are serious cases. Even in civil cases, the IRS doesn’t like excuses. In Oppliger v. United States, the court found business owners liable for a $2M penalty even though an accountant embezzled the money and then died! See IRS Penalties Despite Dead/Embezzling Accountant! Even the U.S. Supreme Court may turn a deaf ear, as occurred in Davis v. United States, where the Court let stand a whopping $11 million in IRS penalties against four business owners and their accountant.
For more, see:
IRS "Responsible Person" Label Hurts
IRS Nightmare: What Employment Taxes?
With Taxes “Responsible” Means Holding The Bag
Personal Tax Liability When A Business Goes Under
Beware Personal Liability For Employee Taxes
Choose Your Ground In Tax Disputes
Internal Revenue Bulletin 2005-24
No Get-Out-Of-Jail-Free Card For Payroll Tax Liability
Supreme Court Deaf To Payroll Tax Woes
Don't Cross IRS On Payroll Taxes
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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ef9916635aec4d6ad9f50b60218efe39
|
https://www.forbes.com/sites/robertwood/2011/10/08/trafficking-in-tax-shelters-can-mean-jail/
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Trafficking In Tax Shelters Can Mean Jail
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Trafficking In Tax Shelters Can Mean Jail
Image via wix.com
It may seem odd to equate tax shelters with illegal drugs. Then again, there are similarities. Both are meant to be secret. Both involve large amounts of money. And both can hype you up and then bring you crashing down. Just when you thought everything would be rosy, you can end up feeling downright miserable. See "DAD" Tax Shelter Is A Deadbeat.
And I'm only talking about investing in shelters, not dealing them to others. Trafficking in tax shelters may not get you killed, but it can still get you sent to the big house. And you thought an IRS audit, tax dispute, then more taxes, penalties and interest were bad enough.
Just consider what happens if you're the dealer who's selling a poison-laced shelter. You might know it's posion when you sell it or you might find out later. You'll probably end up in a bunch of civil suits, which won't be pretty.
But on top of everything else, the government can prosecute you for promoting it. The feds have sentenced Richard Muto of Niagara Falls, New York to 36 months in prison and a year of supervised release for his role in pushing these deals. See Muto gets 3 more years in jail. Here’s what he did.
Muto was a financial advisor and owned Tax and Investment Strategies in Niagara Falls, New York. He marketed abusive trust schemes for two different vendors, American Asset Protection based in Palm Beach County, Florida, and later The Aegis Company, based in Palos Hills, Illinois. Both were problems waiting to happen.
The hapless customer---call him Joe Taxpayer---would get a series of domestic and foreign trusts and international business corporations (IBC). Hey, seems like you got a lot of paper for your money. Joe Taxpayer could then divert his personal income and assets into this "structure."
The supposedly "independent" trusts and IBCs would create the rosy impression that Joe relinquished control of the income and assets, but this was all a sham, all smoke and mirrors. The trusts and IBCs secretly remained under the complete control of Joe Taxpayer. Talk about having your cake and eating it!
Muto told lots of Joe's out there that these multi-layered trusts legitimately reduced or eliminated their federal income taxes. Presto! Meanwhile, everything remained Joe's and he could do what he wanted with it. Muto told Joe not to worry.
Meanwhile, Joe and others were filing false tax returns, either believing Muto or not asking too many questions. Muto had an answer for the inevitable IRS queries too: The best defense is a good offense.
When the IRS tried to inquire or figure it out, he had a prepackaged way to get them off the scent. He told all the Joes to submit frivolous correspondence to the IRS and to just intimidate the IRS agents. That would thwart audits of the trusts he was promoting.
Who was Muto's best customer testimonial? Reminding me of the old Hair Club for Men commercials: ("I'm not just the president of the Hair Club for men, I'm also a customer"), the best testimonial was himself! That meant Muto filed false returns for 1996, 1997 and 1998.
Soon he'll be doing a big promotional deal on his latest product: license plates.
For more, see:
Know Tax Shelters When You See Them?
Tax Shelters Not Über Alles
Seeking Shelter In Tax Shelters?
How Bad Is Your Tax Shelter?
Taxes As Seen On TV?
When Too Good Tax Deals Become Fraud
IRS - Abusive Tax Shelters And Transactions
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at [email protected]. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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